Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
eg777er
Topic Author
Posts: 1782
Joined: Fri Feb 04, 2000 11:11 pm

Phil Condit On Airbus A3XX

Tue Jul 25, 2000 4:32 pm

Just an interesting tidbit - saw some interviews with Phil Condit yesterday at Farnborough - on CNN, CNBC and also BBC World on their 'World Business Report'.

Basically he said these things:

1. Market for A3XX - 400 aircraft with only a certain no. of routes. Pax more interested in point-to-point services with the least no of stops. This is why Boeing have the 777X.

2. Subsidy - Boeing are not concerned about subsidy unless it is subsidy 'not on commercial terms'. Condit stated that the 'terms' issue was key - if the money was loans with 'real world' interest rates Boeing would not be concerned.

3. Richard Quest, BBC World's Business correspondent asked Condit whether he was betting the company on the fact that Airbus was wrong about the size of the market for the A3XX.

'Well we bet the company when we made the 747, but that's how you win. You bet the company. We are betting the company.' he said.

Preceding the Condit interview was one with Noel Foregard of AI. Asked whether the A3XX was commercially viable, he scoffed that 'We wouldn't go ahead with it if it were not commercially viable'. On the issues of subsidy, he claimed that 'If anyone gets subsidies it's Boeing'.

Both very interesting. However, I have a question. If the market for the A3XX is only 400 aircraft, as Boeing claims, what happens if Airbus get 400 orders for the A3XX over the next 5 years and 'sews up' the market - where does that leave Boeing?
 
eg777er
Topic Author
Posts: 1782
Joined: Fri Feb 04, 2000 11:11 pm

RE: Phil Condit On Airbus A3XX

Tue Jul 25, 2000 5:38 pm

...forgot to add the Noel Foregard claimed that either American, Delta or Continental would be a new Airbus customer by the next Farnborough - 2002.

Optimistic?
 
User avatar
RayChuang
Posts: 8138
Joined: Sat Jun 24, 2000 7:43 am

RE: Phil Condit On Airbus A3XX

Tue Jul 25, 2000 10:04 pm

I really doubt that AA, CO or DL will buy any Airbus planes soon.

The reason is simple: they area heavily committed to Boeing planes. Note that all three airlines have bought lots of 757-200's, are buying lots of Next-Generation 737's, and may eventually become some of the biggest customers of the 777. Why bother buying Airbus airliners when Boeing's current offerings already meet their needs for the next ten years?

Given that the 777-200ER (neé 777-200IGW) can fly SFO-HKG non-stop year-round, the airlines I mentioned above are very unlikely to order the A340. And with CO and CL being launch customers for the 767-400, you can forget about them buying the A330, too.
 
Guest

RE: Phil Condit On Airbus A3XX

Tue Jul 25, 2000 10:10 pm

>>>Both very interesting. However, I have a question. If the market for the A3XX is only 400 aircraft, as Boeing claims, what happens if Airbus get 400 orders for the A3XX over the next 5 years and 'sews up' the market - where does that leave Boeing?<<<

400 orders is not enough to break even on the A3XX development costs. The answer to your question is that both will lose money with their VLA, but Airbus will lose more due to higher development costs. Airbus can have 100% market share, but if they can't turn a profit from it, what's the point?



 
eg777er
Topic Author
Posts: 1782
Joined: Fri Feb 04, 2000 11:11 pm

RE: Phil Condit On Airbus A3XX

Tue Jul 25, 2000 10:13 pm

Very true. How many do they need to sell to break even?
 
acvitale
Posts: 1913
Joined: Sat Aug 18, 2001 8:25 am

RE: Phil Condit On Airbus A3XX

Tue Jul 25, 2000 10:34 pm

Independent financial analyst claim Airbus needs to sell 1300-1600 depending on who you speak with to break even.

I think the A3XX will be a fine plane that will never make Airbus any money. It is more an EGO issue for the manufacter.

To claim Boeing is subsidized when Airbus is not is a fallicy. At least Boeing a public corporation has it's financial records avail. for public inspection. You can see everything on Edgar online.

Airbus has no publically avail. financial records for review and is fond of throwing these statements around. If Boeing had interest free money and subsidies they would be much better off today!
 
jonnyboy
Posts: 211
Joined: Mon Jul 17, 2000 1:19 am

RE: Phil Condit On Airbus A3XX

Tue Jul 25, 2000 11:43 pm

Sure Boeing are playing it safe, but even if Airbus lose money on the project as a whole, they have prestige and publicity that will be unrivalled, at least in Europe.

Think, February 2006, the first flight of the A3XX, landing at Heathrow after 6 hours flying from Dubai, on Emirates. The frenzy will be unrivalled. Anyone who's anyone will be on the flight, airline and manufacture will make sure of it. Every photographer in the world will be at the threshold. This has only been seen before for the 747 and Concorde.

Airbus is relying on the fact that they will become 'the world's favourite manufacturer', and passengers will demand to fly in that comfort and style. Airbus is being ambitious, innovative, and in my view will succeed on many levels, and eventually economically. Basically every 'Joe Public' will wanna fly A3XX. Look at it -
http://www.airbus.com/products/A3XX_comfort.html

OK, they invested loads. But the countries will get a return on job security and creation (estimated 60,000)
And Airbus will break even below 1,000 planes, they wouldn't be that stupid. They say there is a market for 1,300 planes over 20 years, that is kinda optimistic. They apparently have 170 orders already, and definite orders from Air France, Emirates, Virgin (ILFC) and Singapore. According to the papers these are CONFIRMED!

Give it a few years of service (the 747 flew empty in the early 70's, remember) and every customer will want one, and every airline will therefore want one.

Don't get me wrong, I'm not saying its a sure thing, but it will be exciting.

Oh yeah, didn't the 747 get gowernment subsidy for development, since it started out as a military cargo design?
 
User avatar
RayChuang
Posts: 8138
Joined: Sat Jun 24, 2000 7:43 am

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 2:01 am

I think you might want to know a little background on the 747.

Yes, it was true that Boeing was one of the bidders on the C-5 transport project, and their proposal was for a high-winged plane with a fuselage-mounted horizontal stabilizer (it would have looked a lot like what the Antonov An-124 became). I think that Boeing never got any money from the Department of Defense because this was only a proposal, and the most of the proposal development had to come out of Boeing company funds.

But since Lockheed got the contract (along with General Electric for the high-bypass engine), Boeing used the research data from their C-5 proposal to develop a high-capacity long-range airliner powered by four high-bypass engines. Boeing studied several different designs, but the final design was a wide-body fuselage with a relatively short upper deck for the cockpit and a (then) small lounge behind it. Pan American World Airways became the first customer, signing up for 25 planes at the launch of the project in 1966.

Unfortunately, Boeing ran into a bad stretch economically when the 747 went into service in 1970. Many airlines ended up cancelling or deferring orders, and Pratt & Whitney had serious problems with JT9D engine reliability that wasn't solved until 1973 or so. That was why there was a big push to get the General Electric CF6-80 and Rolls-Royce RB.211-524 qualified for 747 operation, and in fact a large number of 747-200's were built with GE and R-R engines. Boeing didn't really recover until the early 1980's when the rising economy and the success of the 757 and 767 projects got Boeing to build more 747's, especially the 747-300 and 747-400 models later in the decade.
 
CX747
Posts: 6245
Joined: Tue May 18, 1999 2:54 am

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 2:06 am

Excitement does not equal profit. The average airline customer truly doesn't care what aircraft he flies on. Will Airbus build the A3XX? Yes. Will they make a profit? Not for 20 years.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
Navion
Posts: 1069
Joined: Tue May 18, 1999 1:52 am

JonnyBoy

Wed Jul 26, 2000 2:16 am

The point is not "what the hell, A3XX funding provides jobs etc."; the point is it is unfair. If it continues, then the US subsidizes Boeing, new products are offered, Airbus starts hemmoraging money, and you have an all out trade war between the EU and the US. That's why those callous, rude, shallow, and unsubstantiated comments by jokers like Noel Foregard have no validity. Airbus has been heavily subsidized, they couldn't offer new products at the rate they are and with the risk if they were not subsidized, and Boeing is the only manufacturer is this situation that reports publicly it's finances. Airbus does not therefore their words are just that, words. Trust me JonnyBoy, the EU doesn't want a trade war, but if Boeing did what Airbus is doing, that's what you would get. Think about it; if Boeing has the financial "resources" (I'm being diplomatic) avialable to them Airbus has, why don't they just build a New Large Aircraft?
 
sv11
Posts: 221
Joined: Tue Jun 01, 1999 6:26 am

RE: JonnyBoy

Wed Jul 26, 2000 4:32 am

The 400 aircraft estimate may be over 20 years-its unlikely to be 5 years. The 747-400 is selling like 30 aircraft/year now and a lot of them are cargo. There isn't much demand for 747 size aircraft now, but that may change. However the trend has been toward smaller aircraft like A340/777.
Of course there is a question of airport constraints that may favour an A3XX but new airports are being built and existing one expanded.

sv11.
 
WorldTraveller
Posts: 594
Joined: Sun Jun 06, 1999 3:47 am

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 4:35 am

Activale said:
"Independent financial analyst claim Airbus needs to sell 1300-1600 depending on who you speak with to break even."

WHAT??? I've never heard this.

Airbus AND most of the major financial analysts predict that airbus needs to sell about 250-300 planes to break even. The above numbers are completely rediculous.

Airbus won't commit suicide with a project, believe me.
Did you know that it's the 400+ seat market where most profits are achieved (until now only by Boeing)?

Regards,
the WorldTraveller
 
777X
Posts: 854
Joined: Fri Dec 19, 2014 12:44 am

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 4:51 am

Sorry, neither of you have it right

Airbus, and it's 'independent' analysts say 250-300 are required to break even

Boeing, and it's 'independent' analysys say ~1400

So the truth is likely to be somewhere in the middle

Regards
777x
 
D L X
Posts: 12671
Joined: Thu May 27, 1999 3:30 am

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 5:09 am

Hold on a second. Doesn't Airbus believe that there is a much greater market than 400 jets? I have heard many times that they believe the market is closer to 1600 or more over 20 years.

And at a development cost of $12B, Airbus would have to make $48 Million dollars in profit from EACH plane in order to break even after just 250 sales. Somehow, I doubt that's going to happen.
 
Hamlet69
Posts: 2541
Joined: Thu Mar 09, 2000 2:45 am

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 5:23 am

The last time I heard the statistics, it was 550-600 aircraft to break even on the A3XX project.

JohnnyBoy,

I don't know what paper you are reading, but the only "CONFIRMED" order is Emirates, who've put down a deposit for 5 passenger and 2 freighter aircraft. In addition, Air France (10) and ILFC (5) have eached signed letters of intent. The latest word from Singapore is that they are still evaluating the A3XX and the 747X Stretch. I doubt Boeing is going to let Airbus get Singapore without a fight.

Hamlet69
All gave some. Some gave all.
 
Guest

CX747

Wed Jul 26, 2000 7:24 am

Hi CX747, I agree with your statement. I however do not belive that Airbus will sell even 300 A3XX's in the next 20 years. Airlines are relying on Boeing to come out with a new plane or a new 747. Airbus needs to start thinking like a company and not worry about how the public will turn to them instead of Boeing. Airbus is not focusing on the important issues with the A3XX. Sush as the company's future with an A3XX, or a possible failure of the A3XX. They are just bragging about it because they designed a plane larger than a 747. I wonder when Boeing is going to announce what they've been doing all these years in preparation for the A3XX.

Hmmmmmmmmm...

Rgds,

B744
 
jonnyboy
Posts: 211
Joined: Mon Jul 17, 2000 1:19 am

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 7:48 am

A couple of points

1.
I quote The Guardian, a well respected broadsheet from the UK

"Launch Customers (confirmed): Air France, Emirates, Singapre, Virgin, leasing firm ILFC"

I said apparently, I'm not saying its definitely true. But I wouldn't be surprised at all if Air France were a launch customer given the legacy of government tie-ins.

2.
I understand about not starting a trade war, but what is wrong with a government providing support to one of its industries, for the good of the national economy? And the costs won't just be written off by the governments like with Concorde (no dis-taste intended in light of todays sad events)

3.
Estimates are estimates, it is probably impossible to tell how many orders it will get. The project needs momentum, which Airbus is trying to create at Farnborough, and with TV commercials. Publicity will sell this plane (hopefully like 747 rather than Concorde).

Like the 747 the A3XX makes economic sense, and will make practical sense as soon as airports get their act together. Don't knock it 'till you try it, who doesn't want to fly it in 6 years? Hands up!

Thought so.

P.S. NO-ONE can deny the US aviation industry is jealous of the project. Why would they dismiss it as a failure before it started if they didn't think it would do anything.

Sorry, one more point. Are you saying there has been NO crossover between military and commercial technology at Boeing.  
 
Guest

RE: Phil Condit On Airbus A3XX

Wed Jul 26, 2000 8:38 am

...there are crossover between the military and commercial at Boeing, Aerospatiale Matra, BAe, CASA, DASA, Lockheed and so on...

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos