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JerseyFlyer
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 1:46 pm

Quoting astuteman (Reply 191):
If you can fit 11-across at 18" that easily, and lift the floor by some amount as well without problems, then the A380 was designed too big, even for its brief IMO

It looks that way. Maybe it was something to do with the freighter.
 
airbazar
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 2:20 pm

Quoting astuteman (Reply 191):
I can't help thinking that Airbus were profligate with this design.
If you can fit 11-across at 18" that easily, and lift the floor by some amount as well without problems, then the A380 was designed too big, even for its brief IMO

The A380 was conceived in a different era. 20+ years ago no one was thinking about 17" wide seats in a long haul aircraft.
 
brindabella
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 2:57 pm

Quoting Ruscoe (Reply 196):
The only Caveat I would put on this is that I haven't seen the details of the lease agreement, but I strongly doubt, the
investors will have recovered their Capital by the end of the lease, they will only get the equivalent of a very good interest return,
until the frame is sold.

Hi Ruscoe,

much the most likely, IMO.

The idea that Doric would pay everything back to the Investors & rely (hope) that it all comes out OK at the resale would be a recipe for early extinction.

cheers Bill
Billy
 
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Stitch
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 3:55 pm

Quoting Nav20 (Reply 197):
I think the basic problem is that 12-year leases are just plain too short.

It appears to be the standard lease term for the commercial airline industry for a widebody.
 
EnviableOne
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 4:48 pm

Quoting Nav20 (Reply 192):
DNA3 is the duo’s third offering of shares tied to the ownership and stream of leasing revenues for the double-decker A380. Investors buying DNA3 will get quarterly dividends of 8.25 percent a year, based on the 100-pence issue price. Once the plane comes off lease, they will get the proceeds when the aircraft is sold

8.25% * 12 years is 99%

providing the whole term of the lease, scrapage value should be able to make the other 1% and if they can sell, then its all gravy on top, Basically with the investment product you aren't going to lose, but you might win big, if they can see it ex lease.
A wise man speaks because has something to say, a fool speaks because he has to say something - Plato
 
tortugamon
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 5:02 pm

Quoting Nav20 (Reply 197):
The 'conventional' lease term was 21 years, with rent reviews every five years. That's how long it takes for investors to get their initial investment back, as well as the mere rental.

Commercial real estate depreciates far slower than wide body aircraft.

tortugamon
 
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BaconButty
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 5:55 pm

Quoting EnviableOne (Reply 204):
8.25% * 12 years is 99%
providing the whole term of the lease, scrapage value should be able to make the other 1% and if they can sell, then its all gravy on top, Basically with the investment product you aren't going to lose, but you might win big, if they can see it ex lease.

I really don't want to drone on about this, but Nav20, who does know better, is leading you down the garden path with this. Take DNA one for example. From the last Asset Managers report:

Quote:
The Company‘s investment objective is to obtain income returns and a capital return for its shareholders by acquiring, leasing and then selling a single aircraft. The Company receives income from the lease and its directors are targeting a gross distribution to shareholders of 2.25 pence per share per quarter (9p per annum).
http://www.dnairone.com/investors/20...20Man'%20report%20announcement.pdf

From the last financial report:

Quote:
A senior secured finance facility provided by Westpac, in the amount of $122m provided the monies along with the placing proceeds for the acquisition of the aircraft. On the purchase of the plane, the Company entered into a lease with Emirates for an initial term of 12 years in 2010, with fixed lease rentals for the duration. The debt portion of the funding will be fully amortised over the 12-year term of the lease, with the aim of leaving the aircraft unencumbered on the conclusion of the lease.
Quote:
The loan repayments are, in reality, constant over much of the lease term, reducing in the final two years.
http://www.dnairone.com/investors/20...ancial%20Report%20Announcement.pdf

The company has a market cap of £50m. It's borrowed £74m. The income from leases goes to pay the Asset Manager (Doric), pay down the loan and pay the dividends. The other investment vehicles are broadly similar, though vary as to the specifics. The key point is, the shareholders only invest 40% of the capital required to acquire the aircraft, so if all goes well anything the frame is worth over £50m after the lease expires is gravy.

Apologies for labouring this a bit, but it seems some characters are so incapable of accepting that someone could be doing OK with the A380 that no matter how many times you present them with sourced facts they will ignore it. In any case, as I said, the new arrangements may differ substantially - they certainly carry more risk, so one would assume greater potential returns.
Down with that sort of thing!
 
Planesmart
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 8:34 pm

There is little comparison between a low tech, static building, and high tech, mobile aircraft.

As the pace of innovation increases, commercial aircraft lease terms will continue to shorten. This will happen for commercial property too, but not to the same extent.

Just like your retirement savings, and age relative to planned retirement, Amedeo will build syndicate profiles based on risk, tax, liklihood of continuity, etc.

When doing the maths, remember the manufacturer or related parties, may be equity sharing, and the leasee (or related parties), may also be syndicate participants.

Nose and especially tail payments are common in commercial aircraft leasing, so don't try to make too much sense from traditional maths.
 
speedbird128
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 10:48 pm

Quoting Nav20 (Reply 197):
As the old saying goes, 'there's one born every minute.....'

You couldn't have said it any better!!
A306, A313, A319, A320, A321, A332, A343, A345, A346 A388, AC90, B06, B722, B732, B733, B735, B738, B744, B762, B772, B7
 
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Stitch
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 11:01 pm

Quoting Nav20 (Reply 197):
Every sign, though, that Doric/Amadeo's clients are 'falling for it.' As the old saying goes, 'there's one born every minute.....'
Quoting Speedbird128 (Reply 208):
You couldn't have said it any better!!

With such an ample supply of "suckers" they can keep funding an ample supply of A380s and 777s, which is good for Doric.

And good for Airbus and Boeing.

And good for A380 and 777 customers.

[Edited 2014-02-24 15:03:20]
 
aryonoco
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 11:26 pm

Quoting tortugamon (Reply 189):
By my calculations they only need to gain about 2" of width and that should be possible with moving the floor up just a couple inches.
Quoting astuteman (Reply 191):
I can't help thinking that Airbus were profligate with this design.
If you can fit 11-across at 18" that easily, and lift the floor by some amount as well without problems, then the A380 was designed too big, even for its brief IMO

You hit the nail with this one astuteman. Looking at that picture, and then thinking that if they had put the floor a couple of inches up they'd have been able to do 11-abreast at 18" from the get go... all I can think is, why the hell not? Why was the floor put so down to begin with anyway?
 
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Amedeo Firms Up 20x A380's (Part 1)

Mon Feb 24, 2014 11:54 pm

Quoting aryonoco (Reply 210):
Why was the floor put so down to begin with anyway?

Depressingly I think it was for the freighter version. They needed more space on the main deck, I don't recall the driver (some pallet height I guess) but they achieved it by raising the upper floor IIRC. It was touted at the time as a benefit of a new-build over any future P2F.

Edit: Found a reference here
A bit different to how I remember it, but it still seems like a likely driver for the floor position.

[Edited 2014-02-24 15:58:20]
Down with that sort of thing!
 
aryonoco
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 1:57 am

Quoting BaconButty (Reply 211):
but it still seems like a likely driver for the floor position.

In other words, if the A380 had been designed with the sole purpose of doing what the A388 is doing right now, it would look different, and probably better in terms of CASM.

That's the price of being too flexible when a specialised design would have been better. But the L-1011 was criticised/failed for not being flexible enough and being too rigid a design. Hindsight is 20/20 I guess.
 
airlinebuilder
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 2:12 am

i believe in the A380 program and one way or the other it is a success, the global economic slump for some time is the only hurdle otherwise the recovering economies in some regions have uplifted the volume of travellers thus constraining the airport slots justifying what the A380 was designed for to begin with.
 
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 2:36 am

Quoting BaconButty (Reply 206):
The key point is, the shareholders only invest 40% of the capital required to acquire the aircraft, so if all goes well anything the frame is worth over £50m after the lease expires is gravy.

Thanks for that new point, BaconButty, I've been assuming up to now that the individual investors carry the whole load.

Doesn't help a lot, though, if the aeroplane can't be on-sold when the lease expires. This article suggests that the scrap value of airliners tends for the most part to be measured in thousands rather than millions. So if the aeroplanes can't be on-sold for further use, the investors will still lose out:-

http://www.digitaltrends.com/web/the-scrapping-of-a-boeing-747/
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
tortugamon
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 2:52 am

Quoting Nav20 (Reply 214):
This article suggests that the scrap value of airliners tends for the most part to be measured in thousands rather than millions.

Just the engines alone are probably worth North of $15 Million after a 12 year lease.

tortugamon
 
YVRLTN
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 2:57 am

Im sure Amedeo are not expecting to exclusively deal with the top 10 though.

Quoting KarelXWB (Reply 158):
Per Flightglobal, the top 10 (in terms of traffic) long-haul non-A380 operators are:

1. Delta
2. United Airlines
3. American Airlines
4. China Eastern Airlines
5. Air China
6. Cathay Pacific
7. Air Canada
8. Turkish Airlines
9. All Nippon Airlines
10. TAM

AC are increasing capacity in their new 77W's. Unlikely though. Only ones of these that seem likely IMO are CA, TK & NH. Also agree with Corsair already mentioned.

Others not mentioned yet:

LA
AR - remember the Marsans "order" and they have 744's to replace.
IB and or extra for BA - IAG are not opposed to leasing a few frames (77W)
CI

And an odd ball - TS...
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NAV20
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 4:36 am

Quoting tortugamon (Reply 215):
Just the engines alone are probably worth North of $15 Million after a 12 year lease.

Interesting, Tortugamon - the article says the direct opposite?

"Air Salvage International deals with around 40 planes a year, selling on anything of value to airlines around the world on the hunt for spare parts. There’s serious money involved, with an engine going for around $1 million, landing gear for $300,000 depending on age, and cockpit screens for around $30,000 each."
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
tortugamon
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 4:42 am

Quoting Nav20 (Reply 217):
Interesting, Tortugamon - the article says the direct opposite?

I believe the article is about a 25+ year old 747? The $1 Million figure for each engine sounds low (but that still would be $4 million and not 'thousands'). Regardless, the Trent 900s are much newer and with only 12 years of after the lease (not 25) and so they will have twice as much life. Personally I think $15 Mil is low but it depends on a lot of factors.

tortugamon
 
NAV20
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 4:59 am

Quoting tortugamon (Reply 218):
(but that still would be $4 million and not 'thousands'). Regardless, the Trent 900s are much newer and with only 12 years of after the lease (not 25) and so they will have twice as much life. Personally I think $15 Mil is low

Thanks, tortugamon, solves the problem. I thought you meant $15 million per engine,,,,,,,,,,  

My recollection is that the 'individual investors' on this particular deal have subscribed about 74 million (pounds)? So they still look like losing their shirts on present evidence, if the aeroplane concerned can't be sold for continued operation, and has to be scrapped?

[Edited 2014-02-24 21:16:28]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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clickhappy
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 5:03 am

8.25%. Wow, that is a nice ROI given that the world is awash in liquidity.

If Investors are getting 8.25% what are Emirates and Singapore paying? 10%? 12%? That seems like an enormous amount given the cheap cost of capital. More like rates SAA would pay.

Maybe Stitch can provide more info? Stitch, are investors getting paid from the leasing revenues or are they getting paid a percentage of what Doric estimates the A380s will be worth after the lease?
 
tortugamon
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 5:32 am

Quoting Nav20 (Reply 219):
My recollection is that the 'individual investors' on this particular deal have subscribed about 74 million (pounds)? So they still look like losing their shirts on present evidence.

The way I read baconbutty's excellent post is that the investors get paid a solid rate of return for their equity investment and the debt is paid off by the time the lease is over. Then, the principle on the investment or 50 Million pounds is covered by the resale of that aircraft at the end of that lease.

First, I don't think I have ever heard of a well functioning 12 year old aircraft being scrapped.

Second, I personally do not see an A380s being scrapped for 50 Million pounds after 12 years. That is not much more than the real price of an A320. A380s have far greater value than that so that will be profit for the investors.

Not losing their shirts at all from my perspective Nav, help me to see where you are coming from.

tortugamon
 
astuteman
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 6:31 am

Quoting Nav20 (Reply 214):
This article suggests that the scrap value of airliners tends for the most part to be measured in thousands rather than millions

  

Quoting Nav20 (Reply 217):
Air Salvage International deals with around 40 planes a year, selling on anything of value to airlines around the world on the hunt for spare parts. There’s serious money involved, with an engine going for around $1 million, landing gear for $300,000 depending on age, and cockpit screens for around $30,000 each."

the same article? Nuff said

Quoting tortugamon (Reply 218):
(but that still would be $4 million and not 'thousands').

You would have thought so.

Quoting tortugamon (Reply 221):
Not losing their shirts at all from my perspective Nav, help me to see where you are coming from.

You need help with that?  

Rgds
 
airlinebuilder
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 7:44 am

i believe in the A380 program and one way or the other it is a success, the global economic slump for some time is the only hurdle otherwise the recovering economies in some regions have uplifted the volume of travellers thus constraining the airport slots justifying what the A380 was designed for to begin with.
 
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KarelXWB
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 8:23 am

Quoting Nav20 (Reply 217):
Interesting, Tortugamon - the article says the direct opposite?
Quoting tortugamon (Reply 218):
I believe the article is about a 25+ year old 747?

And besides, A380 scrap parts will be rare in the beginning, making them expensive.
What we leave behind is not as important as how we've lived.
 
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BaconButty
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 8:56 am

Quoting Nav20 (Reply 219):
My recollection is that the 'individual investors' on this particular deal have subscribed about 74 million (pounds)?

Sub 50m.

Quoting Nav20 (Reply 219):
So they still look like losing their shirts on present evidence, if the aeroplane concerned can't be sold for continued operation, and has to be scrapped?

They could always sell their shares. As of yesterday a £1 share in DNA1 traded for £1.16. After all, as you put out, there's one born every minute.
Down with that sort of thing!
 
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Stitch
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Amedeo Firms Up 20x A380's (Part 1)

Tue Feb 25, 2014 3:38 pm

Quoting Nav20 (Reply 219):
So they still look like losing their shirts on present evidence, if the aeroplane concerned can't be sold for continued operation, and has to be scrapped?

And what "present" evidence is that?

The first Doric frames - 9-SKA, 9-SKB and 9-SKC - will not come off lease until 2017. Seems a bit premature to declare that "evidence" shows investors will lose their shirts.

Each of those frames has a current projected value in 2017 of almost $100 million - double what Doric will need to recover.

So maybe "present evidence" says that Doric and their investors will make a windfall?



Quoting clickhappy (Reply 220):
Stitch, are investors getting paid from the leasing revenues or are they getting paid a percentage of what Doric estimates the A380s will be worth after the lease?

As I understand it from the prospectus, the dividends are paid from the lease payments. They also receive a portion of the final disposition price (if the plane is scrapped or re-sold) or if the plane is re-leased, they continue to draw dividends from the new lease (and then a portion of the disposition price when the plane is finally scrapped/sold).

Quoting tortugamon (Reply 221):
The way I read baconbutty's excellent post is that the investors get paid a solid rate of return for their equity investment and the debt is paid off by the time the lease is over. Then, the principle on the investment or 50 Million pounds is covered by the resale of that aircraft at the end of that lease.

That is how I understand it, as well. The lease payments cover the dividends to the investors and the loan payments to the banks (who provide the majority of the capital used to purchase the planes).
 
NAV20
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 2:30 am

Quoting Stitch (Reply 226):
And what "present" evidence is that?

Stitch, the payments to the investors will be of the order of 8.5% per annum. 8.5 X 12 is 102. There are no provisions for periodic 'rent reviews.' So, at the end of the lease, the investors will only have received their initial investment back, with no provision to take account of inflation etc.

If, at the end of the 12-year lease, the aeroplane is on-sold, the investors will be entitled to a share of the sale proceeds. But if it cannot be on-sold, they will only be entitled to a share of the scrap value. Which is likely to be a lot less than the amounts they invested in the first place?
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
speedbird128
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 7:45 am

Quoting Nav20 (Reply 227):
There are no provisions for periodic 'rent reviews.'
Quoting Nav20 (Reply 227):
So, at the end of the lease, the investors will only have received their initial investment back
Quoting Nav20 (Reply 227):
be entitled to a share of the scrap value

Oh dear, yet (unsurprisingly) more doom and gloom from you about airbus and their products. So even if its scrapped for $50mil (which would be $50m cash in hand), that (according to your view) sucks? You show me any depreciable non-tangible asset that can return $50mil in 12 years...

What is it you expect from Airbus, their clients, and their products? First its doom and gloom because Airbus has the entirely (according to you) wrong product line up. Then nobody ordering the A380 and its so totally dead. And then when there is a firm order for 20, its at a major loss and the lessors and investors are (according to you) losing the shirts off their back.

Do you really think Amadeo (through their rather large experience in financing A380's thus far as Doric) are so stupid to do these deals at a loss?

I highly reckon they are a little more in touch with reality of aircraft marketing and leasing and residual values than you are with your "ex city town planner" information. Aircraft are not blocks of flats. When are you going to understand (or at least accept) that it is therefor a different kettle of fish altogether (and thus don't comply with your idea of a "standard" 21 year) lease? And therefor leases are structured differently, and roi achieved differently. I am confident (and this is my opinion) that (at least) most of the A380's coming off lease won't be scrapped. And will highly likely be valued at a *lot* more than a 25+ year old classic jumbo.
A306, A313, A319, A320, A321, A332, A343, A345, A346 A388, AC90, B06, B722, B732, B733, B735, B738, B744, B762, B772, B7
 
bobdino
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 8:05 am

Well said, Speedbird.
 
NAV20
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 8:45 am

Quoting Speedbird128 (Reply 228):
Oh dear, yet (unsurprisingly) more doom and gloom from you about airbus and their products

What does it have to do with Airbus, Speedbird128? I thought we've been talking about Amedeo - who have only been in business for about a month?
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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KarelXWB
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 8:50 am

Quoting Nav20 (Reply 230):
who have only been in business for about a month?

Not entirely correct, Mark Lapidus (head of Amedeo) was Managing Director and founder of Doric. Hence he knows how the business works.
What we leave behind is not as important as how we've lived.
 
speedbird128
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 8:55 am

Quoting KarelXWB (Reply 231):
Not entirely correct

Since when did facts matter Karel? Don't complicate the (rather simple) issue here.   
A306, A313, A319, A320, A321, A332, A343, A345, A346 A388, AC90, B06, B722, B732, B733, B735, B738, B744, B762, B772, B7
 
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KarelXWB
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 8:58 am

Quoting Finn350 (Reply 5):
I suppose this order means that Airbus commits itself into building these 20 frames using a standard cabin configuration instead of ramping down the A380 production from 30 per year. I suppose the first of these 20 frames will come out in 2015 using the vacant production slots. Let's hope that the customer airlines can be finalized.

Airbus today announced EK will take all remaining 2015 delivery slots.
What we leave behind is not as important as how we've lived.
 
art
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 9:45 am

Quote:
Lessor Amedeo, formerly known as Doric Lease, has firmed up its previously announced commitment for 20 Airbus A380s.

Deliveries will start in 2016 and continue through to 2020. An engine selection will be made at a later date.

I like the phrasing of the second paragraph. I can just visualise 20 A380's stting on the tarmac at Toulouse in 2020 while Airbus wait to be told which engines to install.  
Quoting Nav20 (Reply 227):
If, at the end of the 12-year lease, the aeroplane is on-sold, the investors will be entitled to a share of the sale proceeds. But if it cannot be on-sold, they will only be entitled to a share of the scrap value. Which is likely to be a lot less than the amounts they invested in the first place?

As I understand the Amedeo modus operandi

- a commercial loan is arranged to cover a proportion of the cost of the asset
- investors provide the rest
- the commercial loan is repaid within the term of the lease
- the investors own an unencumbered asset at the end of the lease

If at the end of the lease the asset is sold for a price equal to the investors' original investment, they have received 8% per annum with no capital gain or loss. Their investment, however, depends on how much of the asset cost was covered by the commercial loan.

At the end of the first lease the asset could be

- sold for parts
- sold for continuing operation
- re-leased

As I understand the maintenance methodology with the A380 the aircraft is not subject to very expensive D checks. I would think that it would therefore retain relatively more value than would otherwise be the case.

It is a little ironic that after years of people querying the possibility of filling the A380 airlines appear interested in increasing seating capacity. I note that this is how Amedeo proposes to configure its A380's.

So I guess that there will be takers for ex-Amedeo A380's / takers for second leases in the 2020's
 
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BaconButty
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 10:22 am

Quoting Nav20 (Reply 227):
But if it cannot be on-sold, they will only be entitled to a share of the scrap value. Which is likely to be a lot less than the amounts they invested in the first place?

If the frames are parted out then, yes, the investment will have provided a disappointing return, though far from the "Losing their shirts" scenario you predicted. And of course, if the planet is invaded by aliens, and our new overlords don't allow us to fly, preferring to keep us a slaves in their mines, then they won't even be able to part them out.

However, the shares are publicly traded. The longer they run, the more the share price will reflect the anticipated capital return viz a viz the income returns. DNA1 has been running for 3.25 years and the share price is up 16% in that time. Which suggests investors anticipate some value in excess of the initial share capital at the end of the initial lease.
Down with that sort of thing!
 
Planesmart
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Amedeo Firms Up 20x A380's (Part 1)

Wed Feb 26, 2014 11:19 am

The risks are country, leasee, leasor, asset, FX and interest rates. I presume NAV20 is concerned the A380 exposes investors to more asset risk, the only one you can't insure against.

Less of the doom and gloom. The scanarios in which investors will be running around naked, or even half naked, are pretty remote. Some lenders are also syndicate participants thru nominee companies. Amedeo executive aviation financing experience pre-dates Doric.

The biggest risk attaches to early build models, of any aircraft type. These risks are usually offset by lower prices (sometimes compensation or retrospective discounts), and /or higher returns.

The aviation finance industry is very specialised, informed and prudent. Do you perhaps think the absence of some 'obvious' A380 operators, may have more to do with access to funding than whether the aircraft fits?
 
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N14AZ
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 12:26 pm

Regarding the "losing-their-shirt"-discussion: on a German aviation forum someone is quoting EK's Divisional Senoir Vice President Commercial Operations, Mr. Frach, saying that the first A 380's will leave the fleet starting from 2025, not earlier. If this is correct, EK will extend the current leasing contracts, right?

I had already started a donation campaign for new shirts for Doric investors....  
 
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KarelXWB
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 12:44 pm

Quoting N14AZ (Reply 237):
Regarding the "losing-their-shirt"-discussion: on a German aviation forum someone is quoting EK's Divisional Senoir Vice President Commercial Operations, Mr. Frach, saying that the first A 380's will leave the fleet starting from 2025, not earlier. If this is correct, EK will extend the current leasing contracts, right?

It's entirely possible to extend the leasing period, although last year Clark said to renew the fleet every 12 years. Perhaps plans have changed.
What we leave behind is not as important as how we've lived.
 
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Stitch
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 5:47 pm

Quoting N14AZ (Reply 237):
If this is correct, EK will extend the current leasing contracts, right?
Quoting KarelXWB (Reply 238):
It's entirely possible to extend the leasing period, although last year Clark said to renew the fleet every 12 years. Perhaps plans have changed.

The "oldest" A380 currently owned by Doric and leased to Emirates is A6-EDC, which was delivered on 15 November 2008. Assuming Doric bought the plane on delivery and signed a 12-year lease, then it would have come off lease on 15 November 2020. However, I think A6-EDG and A6-EDH might be the first Doric frames, and they were delivered on 24 April 2009 and 15 January 2010. That would then have them come up in 2021 and 2022.

So either way, it does sound like EK may be considering a lease extension for their frames if they plan to keep them to 2025, which would certainly be music to Doric investors.      
 
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PW100
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 10:06 pm

Quoting Stitch (Reply 239):
So either way, it does sound like EK may be considering a lease extension for their frames if they plan to keep them to 2025, which would certainly be music to Doric investors

Some would argue, why keep those old overweight range-limited airframes, if they can simply dispose them off by stopping the lease without strings attached. And take brand shiny new frames instead. Let Doric investors take the financial pain.

But then again, off course the monthly rates in 2022 for a 2010 A380, will be quite some cheaper than the monthly rates for brand new 2022 frames. If they don't need the range (and how many are/will be used on DXB-Europe runs) I guess a 2010 A380 would work pretty well upto 2025.

PW100

[Edited 2014-03-06 14:07:46]
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KarelXWB
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 10:09 pm

Quoting PW100 (Reply 240):
Some would argue, why keep those old overweight range-limited airframes, if they can simply dispose them off by stopping the lease without strings attached. And take brand shiny new frames instead.

But then again, off course the monthly rates in 2022 for a 2010 A380, will be quite some cheaper than the monthly rates for brand new 2022 frames. If they don't need the range (and how many are/will be used on DXB-Europe runs) I guess a 2010 A380 would work pretty well upto 2025.

Or Emirates has yet to reveal big expansions plans and Airbus will not be able to deliver enough A380s in time   
What we leave behind is not as important as how we've lived.
 
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Ab345
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 10:13 pm

Quoting PW100 (Reply 240):

Totally agree PW100. I can also see EK being the first P2F conversion client somewhere along the line
 
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rotating14
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 10:57 pm

Quoting Ab345 (Reply 242):
I can also see EK being the first P2F conversion client somewhere along the line

Can you elaborate any further on your assumption?
 
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Stitch
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 11:01 pm

Quoting Ab345 (Reply 242):
I can also see EK being the first P2F conversion client somewhere along the line

I disagree, as EK converted their original A380-800F order in mid-2006 and by 2013 had cancelled 10 747-8Fs they originally ordered in late 2006 (and had resold to DAE Aerospace).

I therefore believe that they find the 777 Freighter to be the right frame for them at the moment.

If they need to go larger, I expect it will be the 777-8 Freighter (when that model is launched).
 
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7BOEING7
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 11:06 pm

Quoting KarelXWB (Reply 241):
Or Emirates has yet to reveal big expansions plans and Airbus will not be able to deliver enough A380s in time

Or all their expansion will be done and they'll be swapping them out for A380NEO's or 779's looking for whatever is replacing the A380 in 2040+/- when the last of their presently on order A380's are put out to pasture.

Quoting Ab345 (Reply 242):
I can also see EK being the first P2F conversion client somewhere along the line

Considering the 748F is only hanging on by it's teeth because there aren't many other over size cargo options, most 744 P2F conversions are being parked, and the freighters of choice these days are the 777F, A330F and the 778F (in the future), I don't think the economics will be there for a 15 tear old+ A380 P2F conversion.
 
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Ab345
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 11:29 pm

Quoting Stitch (Reply 244):
Quoting 7BOEING7 (Reply 245):
Considering the 748F is only hanging on by it's teeth because there aren't many other over size cargo options, most 744 P2F conversions are being parked, and the freighters of choice these days are the 777F, A330F and the 778F (in the future), I don't think the economics will be there for a 15 tear old+ A380 P2F conversion.

That's why I said somewhere along the line...  Not now not even in the next 5 years. My original thought was towards the end of the first leases. Both Stitch and 7BOEING7 mention the 778F which doesn't even exist on paper so let's hold on to that one for a bit. Of course they cancelled both original (new) 388F and then the 748F but both were the correct actions for the time.

My main reasoning is that:
--> As the main A388 operator their opinion goes a long way into the evolution of the programm itself. If they called aggressively for an A389 or even a new A388F wouldn't Airbus answer or at least consider? I ve gone through a lot of posts especially now with the Amedeo order where people seem to wonder what the heck is going to happen to some of those frames when EK and SQ start returning them? Can you really say that in 2020-2022 there is not even one slight chance that we may see some of these frames converted? Or will EK wait another 5 years till 2025 to fly the 778F?

--> Continuing on this chain of thought I believe that we will have to wait fot the development of the Cargo business till the end of the decade. Also I saw somewhere else that EY just announced a major surge in Cargo traffic in 2013. Is EK on the same page as they are?

Quoting rotating14 (Reply 243):

All of the above sum up my reasoning. I don't claim to know anything or have info. Just an honest opinion  
 
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Stitch
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Amedeo Firms Up 20x A380's (Part 1)

Thu Mar 06, 2014 11:44 pm

Quoting Ab345 (Reply 246):
Can you really say that in 2020-2022 there is not even one slight chance that we may see some of these frames converted?

I of course cannot say there is no chance or a slight chance, but I do not believe the overall market would look favorably on an A380-800P2F.

General cargo operators ignored the A380-800F while buying 747-400 (and later, 747-8) freighters. FedEx and UPS ordered it, but they needed volume and range and at the time the A380-800F was the only model that fit the bill. And while I know FedEx once said they could foresee a huge fleet of A380-800P2Fs, I expect the reality for them will be a huge fleet of 777 Freighters. UPS seems to be happy with the 747-400F, but I expect they too will add the 777F down the road.
 
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Ab345
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Amedeo Firms Up 20x A380's (Part 1)

Fri Mar 07, 2014 12:04 am

Quoting Stitch (Reply 247):

We are in agreement Stitch for the foreseeable trends yes   The main catalyst for my point is that yes the 388F was indeed stillborn but that business proposal was about a clean sheet design ( a daring one to say the least) that suffered horrendous delays and problems, cost a truckload of millions and to add the cherry on that cake the economic tsunami of 2008-20whenever came into place and we all kissed it bye bye.

The X factor in all of this is that nobody indeed knows what will happen to all of these frames when their leases are up since we don't have an available used A388 out there. But at a discounted enough price for the frame itself and with Airbus having provided a clever and practical P2F modification untill then I give it at least a 20% chance of happening.

By the way how cool would it be to see a Beluga version for the 388?   I can imagine Airbus would fit an entire plane with the wings attached. ( Joking of course )   
 
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7BOEING7
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Amedeo Firms Up 20x A380's (Part 1)

Fri Mar 07, 2014 1:09 am

Quoting N14AZ (Reply 237):
on a German aviation forum someone is quoting EK's Divisional Senoir Vice President Commercial Operations, Mr. Frach, saying that the first A 380's will leave the fleet starting from 2025, not earlier.
Quoting Stitch (Reply 248):
But at a discounted enough price for the frame itself and with Airbus having provided a clever and practical P2F modification untill then I give it at least a 20% chance of happening.

With it looking like EK could be holding on to their A380's for 17 years now they'll be starting to get a little old by then, FED (777F,763F) and UPS (744F, 763F)are now buying new and used airplanes as opposed to just used and the greatly increased belly cargo capability of the 1000+ 777/8/9's, 787's and A350's I think the chance of old A380's being converted to freight is close to "zero".

[Edited 2014-03-06 17:11:34]

[Edited 2014-03-06 17:12:25]

Second quote should be attributed to Ab345


[Edited 2014-03-06 17:13:53]

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