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wimdemeester
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Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 2:50 pm

Be kind as this is my first one:
The latest Airbus O&D showes 828 deliveries against an orderlist of 1184 leaving 366 aircraft to be delivered. However that list shows quite a number of doubtful names like Grupo Marsans, Kingfisher as well as several leasing companies, which ordered two years ago and still show no allocations on the 2012 production schedule. And f.i. Gulf Air order is also in process of being revised and so on.

This makes the very firm ones among the firm orderlist perhaps closer to 300 than the almost 400 as shown and it makes me wonder why Airbus management has decided to increase production to 10 monthly to be reached in less than 18 months and therefore I ask myself for how long the 330 will be a very competitive and attractive airliner and for what time may the increase in production be viable and sustainable? The more so as order intake this year is rather limited (so far) as compared with previous years.
I would like to learn your opinions about this
 
tayser
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 3:09 pm

Might be about clearing the 330 backlog sooner so some of the space used to assemble the 330s can be handed over to the 350 assembly line.

$0.02.
 
MEA-707
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 3:20 pm

The 777 production rate has also been increased with a backlog of less then 400. These two aircraft are cash cows and they want to turn out as many of them as possible in relatively short term to make money. Knowing if they don't increase the production rates and airlines have to wait longer, some airlines might walk to the competitor and buy their current or future product (787, A350) instead.
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Jack
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 3:24 pm

Quoting WimdeMeester (Thread starter):
The more so as order intake this year is rather limited (so far) as compared with previous years.

NET order intake to end November = 83

Delivered to end November = 78

While the order intake for the whole year may not be above deliveries if there are a few end of year deletions, they are not doing too badly.
 
bringiton
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 3:29 pm

Quoting MEA-707 (Reply 2):
The 777 production rate has also been increased with a backlog of less then 400. These two aircraft are cash cows and they want to turn out as many of them as possible in relatively short term to make money. Knowing if they don't increase the production rates and airlines have to wait longer, some airlines might walk to the competitor and buy their current or future product (787, A350) instead.

Although the 787 has finally been delivered , the delays in production and the backlog ensures that the A330 will see good demand , and i am sure airbus is making good money out of 330 sales.. 777 story is the same , for airlines looking at deliveries before 2013 or so , they do not have much of an option ... Both the 330 and 777 will see steady sales till the end of the decade so it makes sense for both A and B to bring availability better so that they can feed more demand...
 
frmrCapCadet
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 3:34 pm

With the delivery problems and backlog for the 787, any slowdown in the 350 and the 330s may be selling near to the end of the decade.

[Edited 2011-12-10 07:36:09]
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ebj1248650
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 4:53 pm

Quoting MEA-707 (Reply 2):
The 777 production rate has also been increased with a backlog of less then 400. These two aircraft are cash cows and they want to turn out as many of them as possible in relatively short term to make money. Knowing if they don't increase the production rates and airlines have to wait longer, some airlines might walk to the competitor and buy their current or future product (787, A350) instead.

This makes a lot of sense assuming they also expect more orders to come in significant enough numbers to make the production line speed up well worth while. However, this is kind of like looking into a crystal ball to project the future. I'm no economics expert by any means but I don't see the world economic situation getting significantly better any time soon so, in a sense, I suspect both Boeing and Airbus are gambling; hoping earlier availability will encourage sales and further hoping that sales don't dry up.
Dare to dream; dream big!
 
Jack
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 5:20 pm

If the world economy improves, 787 production ramp up is slow, or A350 build has problems, then Airbus are ideally set to sell a lot more A330.

I assume the ramp up from 8 to 10 would not have cost too much especially as dropping the A340 probably saves a bit on tooling in the factory etc. Even if they only manage 2-3 years at this rate they will not be out of pocket.

If demand drops they can lower the price a good bit as the A330 must have paid for itself many times over and still make a profit without hitting their own products too hard.

The 777 (against the A350) seems to be ramping up earlier in comparison to the A330 (against the 787). For the same points noted above, Boeing are sure to sell many more 777. A great aircraft as long as you are not in the middle of a 2-5-2 seating plan !
 
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lightsaber
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 5:25 pm

Quoting ebj1248650 (Reply 6):
I don't see the world economic situation getting significantly better any time soon so, in a sense

Nor will oil become significantly cheaper. That alone will push fleet replacement. There is significant growth in Asia and the mid-east; those are the demand markets. For Airbus, the risk is minor as workers will just be shifted to the A350.

Between the A380 and 787 delays, they global fleet replacement cycle, as others have already noted, is behind schedule.

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something
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RE: Is It Wise To Increase A330 Production Rate?

Sat Dec 10, 2011 7:24 pm

You should also take into consideration how much Airbus loves temporary employment. Once the backlog is cleared, they can get rid of the additional workers quite easily.
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neutronstar73
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RE: Is It Wise To Increase A330 Production Rate?

Sun Dec 11, 2011 1:49 am

I don't think Airbus should increase the A330 production rate. Although the line is mature and they can easily do it, I would rather they concentrate their efforts on getting the A350 to market. Why spend the money on an airplane you plan to obsolete in a couple of years.
 
col
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RE: Is It Wise To Increase A330 Production Rate?

Sun Dec 11, 2011 2:28 am

Quoting neutronstar73 (Reply 10):
I don't think Airbus should increase the A330 production rate. Although the line is mature and they can easily do it, I would rather they concentrate their efforts on getting the A350 to market. Why spend the money on an airplane you plan to obsolete in a couple of years.

This makes no sense. The 350 is a development, the 330 is a production increase. Different situations. They are not spending money for no benefit, each unit off the production line increases profit. If they increase production for three years, those additional, say 70, units add a lot to the bottom line. They also have to deliver to the commitments they have made to their customers, which means they need an increase. What other aeroplane is available in the 330 type market at the moment. The 772 is just about done, the 767 is a freighter/tanker, 787 is pot luck when you get one and the 350 is at the phase of anyone's guess as to how it will go.
 
neutronstar73
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 12:38 am

You misunderstood me. I think they should concentrate their resources to get the A350 to production and delivery, and keep the A330 production rate as is. Those airlines with commitments will get their birds, according to the likely agreed upon schedule, and you don't have to outlay costs to the A330, which will sell continuously until the A350 hits market.

If you increase production, not only Airbus are affected but all their suppliers as well. They have to put money toward getting to the increased production rate, and will be staring at the inevitable cut in production rate. The A330 is not projected to have any mass future orders once the 787 and A350 hit market, so why spend the money and time to build up production rate for a line that is soon to be shut down?

Sorry you didn't comprehend that. I personally think it will be a waste of time and energy to ramp up production rates when you are likely to see a big reduction or non-existent future orders.
 
tdscanuck
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 1:20 am

Quoting neutronstar73 (Reply 12):
I think they should concentrate their resources to get the A350 to production and delivery, and keep the A330 production rate as is.

They're almost certainly not the same resources. It's not a zero-sum game.

Quoting neutronstar73 (Reply 12):
so why spend the money and time to build up production rate for a line that is soon to be shut down?

Because they'll make more money than if they don't.

Tom.
 
col
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 3:11 am

Quoting neutronstar73 (Reply 12):
You misunderstood me.
Quoting neutronstar73 (Reply 12):
Sorry you didn't comprehend that.

I guess so. Being from a manufacturing background, I was always taught to try to match supply and demand, thus ensuring maximum profitability. Airbus is lucky in that their order book and production can be programmed a few years in advance, hence the production increase.

The rest of your arguments, like I said before, don't make any sense to me. The 330 order book requires the increase. The cost increases to manufacture more units per year is little compared with the return, and that would be for Airbus and its vendors. The 350 project needs the 330 to be as profitable as possible, it is what funds the next program.

Boeing would do the same thing, so I am not picking sides. Look at the 777. Should they have kept the 777 production rate lower to help the 748/787, nope.
 
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zeke
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 4:45 am

Quoting neutronstar73 (Reply 12):
so why spend the money and time to build up production rate for a line that is soon to be shut down?

The more of any aircraft that are out there in the market the more the manufactures earn from post sales support and parts. That is a big part of the ongoing business and cash flow.
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MoltenRock
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 4:46 am

Quoting neutronstar73 (Reply 12):

LMAO! Now that's funny! What's next? Having Boeing shut down their 767 and 777 lines tomorrow so they can focus on getting the 787 out the doors?
 
neutronstar73
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 5:39 am

Quoting MoltenRock (Reply 16):

Truly a ridiculous remark. And it makes no sense. Boeing has no need to INCREASE 767 production beyond what they are going to make for the USAF. And possibly FedEx. And the 777 has NO REPLACEMENT, but is seeing an increase in demand.

So I don't understand you analogy. But you have also consistently claimed in other threads that "airbus as a rule are wider" so i expect nothing less.  
Quoting WimdeMeester (Thread starter):
00 than the almost 400 as shown and it makes me wonder why Airbus management has decided to increase production to 10 monthly to be reached in less than 18 months and therefore I ask myself for how long the 330 will be a very competitive and attractive airliner and for what time may the increase in production be viable and sustainable?

My sentiments exactly. Seems to me many Airbus customers are (or will/should be) moving on to the A350, what with that very ambitious delivery schedule they have planned.
 
MoltenRock
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 6:28 am

Quoting neutronstar73 (Reply 17):
And it makes no sense. Boeing has no need to INCREASE 767 production beyond what they are going to make for the USAF. And possibly FedEx. And the 777 has NO REPLACEMENT, but is seeing an increase in demand.

LMAO! If anyone has a nonsensical stance, it's you dude. Come on!

It's pretty clear anyone saying any one particular aircraft maker shouldn't increase their production rate should feel the same way about the other manufacturers otherwise they're being hypocrites. Yes, the 777 does have a competitor, it's called the 787 and A350, not to mention the A380 in some limited instances. Sadly, some can't see thru their self-declared, and well known fanboyisms. Tragic, really.

Airbus has over 3+ years of A330 production on their order books @ 100 frames per annum, and have sold another nearly 100 airframes this year, and yet you are an expert to say that Airbus shouldn't increase their production from 80 frames per annum, to 100, all the while speaking out of the other side of your mouth, and declaring that Boeing increasing their 777 production is good / great, vs. getting their 787 or 777NG out the door. LMAO!

If you honestly can't see the utter hypocrisy of this stance, then I have nothing more to say to you.

[Edited 2011-12-11 22:51:26]
 
col
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 7:06 am

Quoting neutronstar73 (Reply 17):
Truly a ridiculous remark. And it makes no sense. Boeing has no need to INCREASE 767 production beyond what they are going to make for the USAF. And possibly FedEx

Correct on all points, but Molten is just trying to show how ridiculous it is in a Boeing scenario. Also, you are bang on with the 767 production, you make the amount in the timeframe that is required. Exactly the same as Airbus is doing with 330.

Quoting neutronstar73 (Reply 17):
My sentiments exactly. Seems to me many Airbus customers are (or will/should be) moving on to the A350, what with that very ambitious delivery schedule they have planned.

No idea what airlines you are talking about? Some 350 and 787 customers have ordered 330's recently, so think you are a tad off base here. Again with the 350, it has nothing to do with the 330 production increase!
 
Burkhard
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 10:35 am

Quoting neutronstar73 (Reply 12):
The A330 is not projected to have any mass future orders once the 787 and A350 hit market, so why spend the money and time to build up production rate for a line that is soon to be shut down?

The A330 and the A350 hit different markets. The A350 will replace A340s and is optimized for long range. The A330s, the A333, is a mid range plane without any competitor currently, maybe if the 787-10 comes out in 2017 - so it is fair to assume another 200-300 A330 still can be sold without reengine.
 
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JerseyFlyer
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 12:08 pm

And there may be a lumpy order for say 100 330-200Fs in sight for which they need to demonstrate delivery capability.
 
Cerecl
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RE: Is It Wise To Increase A330 Production Rate?

Mon Dec 12, 2011 12:32 pm

Quoting neutronstar73 (Reply 12):
so why spend the money and time to build up production rate for a line that is soon to be shut down?

Firstly, "soon" is a relatively term. With Boeing's trouble with 787 production, and uncertainties regarding 787-9, Airbus will be foolish to think that they will not be able sell A330 in the next five years or so.
Secondly, one of the reason A330 is selling well at moment is because of its availability. It makes sense for Airbus to accentuate this advantage.
Thirdly, whatever you wrote about A330 also applies to 77W. There will be a 777NG and A350-1000 will eventually gather pace. So it is not entirely correct that 77W, let alone 777 family as a whole, does not have a replacement. There may be a few years' difference in when the transition occurs with A330 and 777, but I guess a few years is "soon", isn't it?  
Quoting neutronstar73 (Reply 12):
I think they should concentrate their resources to get the A350 to production and delivery, and keep the A330 production rate as is.

This makes no sense. A330 and A350 are at different phases of development/maturity. Whatever cost Airbus/suppliers put into increasing A330 production is likely to be more than compensated by the profit brought in by these planes.
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