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n7371f
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Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:22 am

I don't think anyone saw this coming and Airbus' reaction is great spin. Open door for Boeing to sell outgoing 777-300ER's?

http://leehamnews.com/2014/06/10/emi...oost-for-slow-selling-777-classic/
 
soyuz
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:30 am

Holy Moses! What a colossal blow for Airbus! Although I couldn't fathom how EK would utilise all those birds they have on order, I still did not at all forsee this! A boost for the 777-X no doubt.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:33 am

The Airbus press release is here.
 
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seahawk
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:36 am

I hope that they will order more 777-X instead, but I think they will be launch customer of the A380NEO instead.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:38 am

 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:46 am

Quoting FirstClass (Reply 4):
what a blow to airbus

I'm not so sure.
Perhaps EK brought up this issue privately, during the time that they negotiated their most recent A380 order.
And, as popular as the A350 is (742 remaining orders, after EK's cancellation), I'm sure Airbus didn't hesitate to "trade up" to the rather slow-selling but HIGH VALUE A380.
Who can say.....

Or, maybe this opens the door for that rumored 747-8i order from last week's a.net rumor mill...... lol!
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:47 am

I have a feeling that the performance of the A350 is proving to be optimistic just as the 787 was. The difference is that the 787 still has better payload range performance than its competitors and far outperformed older mid sized jets, just not by as much as promised. The A350 might have the problem of being efficient but unable to replace previous generations of large aircraft on many missions.
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:50 am

Quoting ikramerica (Reply 6):
I have a feeling that the performance of the A350

I have a feeling that there is no evidence for your feeling.

Mr Qatar airways seems happy and he is not one to keep quite about performance shortfalls.
BV
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 5:57 am

Quoting seahawk (Reply 3):
I think they will be launch customer of the A380NEO instead.

...as crazy as it sounds, but maybe they just lined themselves up for 70 A330-300NEO instead?
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:01 am

Quoting BoeingVista (Reply 7):
I have a feeling that there is no evidence for your feeling.

Mr Qatar airways seems happy and he is not one to keep quite about performance shortfalls.

Exactly. All talk from Airbus execs to the media has been along the lines of the performance being right on the money- not something that will be easily disclosed by a listed company unless they are sure of what they are talking about.
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:01 am

Quoting BlueSky1976 (Reply 8):

...as crazy as it sounds, but maybe they just lined themselves up for 70 A330-300NEO instead?

Not unlikely. I think Airbus will have benefited from that one way or the other, because otherwise Emirates would probably pay a hefty fine. So, yes A330NEO + A380s (CEO / NEO) could be it.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:05 am

This is an unusual move by Emirates, but I expect the logic will come clear very soon.
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Prost
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:07 am

I wonder if their routes are more successful than anticipated and they simply needed larger planes. The normal rules just don't seem to apply to Emirates.

And before this devolves into a Boeing vs. Airbus brouhaha, I imagine that the language that Emirates negotiated into their Airbus contracts exists in their Boeing contracts as well. I just wonder what is a 'firm' order now? It'll be interesting to see what happens with Boeing's and Airbus' stock prices tomorrow. I can't imagine the investment community can't trust what an order is anymore.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:07 am

Quoting FirstClass (Reply 4):

what a blow to airbus

It's a bit of a shock!
But I have a feeling that this year Farnborough will be very interesting, relating to how EK will "compensate" Airbus and who's orders will take 70 newly released slots for the A350.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:08 am

Quoting BlueSky1976 (Reply 8):
...as crazy as it sounds, but maybe they just lined themselves up for 70 A330-300NEO instead?

I think if they were intending to purchase a different Airbus product in lieu of this cancellation then it would have been announced at the same time. They weren't scheduled to take any deliveries anytime soon so they could have held off announcing the cancellation until an A330NEO/A380NEO was launched.

This seems like a pretty big split to me, and definitely good news for Boeing.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:14 am

Quoting BlueSky1976 (Reply 8):
...as crazy as it sounds, but maybe they just lined themselves up for 70 A330-300NEO instead?

I can see such an order much more probably than an additionaly 777X order. I doubt they will order more 777X but that has nothing to do with their A350´s.
So, maybe we will see DL and EK as launch customers for the A330NEO at Farnborough?
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:23 am

Logically EK will make a 2 type fleet for some reason. A380s & 777s, seems a good combination.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:33 am

Like others, I'm very surprised at this, but since they recently ordered more A380s, was the A350 order simply transferred to the A380 order? Airbus gains more A380 orders and EK can cancel a now unwanted A350 order without paying a hefty fine. Now that is certainly a WIN/WIN
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:33 am

Emirates has been publicly declaring its unhappiness with the performance of the -1000 version even after Airbus decided to delay the entry into service of the type by almost two years to allow Rolls-Royce more time for a significant engine upgrade.

The cancellation is not impacting too much in terms of order numbers Airbus that, still have around 742 orders for the aircraft, but it does raise the question whether other airlines are as unsatisfied with this version.
Qatar has 37 order and Etihad 22.

My conclusion is that today, with the cancellation and the additional order of 50 more A380, Emirates is more than ever, the real owner of the A380 project.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:36 am

Quoting UM78 (Reply 18):
Emirates has been publicly declaring its unhappiness with the performance of the -1000 version even after Airbus decided to delay the entry into service of the type by almost two years to allow Rolls-Royce more time for a significant engine upgrade.

What is their problem with the -1000? Are they making similar demands for the 777X?
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:37 am

Well my hypothesis of Boeing and Airbus stock prices being down is blown to pieces. Airbus is trading higher in European markets, and Boeing is trading lower. Don't let me near your portfolios folks.

[Edited 2014-06-11 00:09:10]
 
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kngkyle
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:39 am

Quoting 777ER (Reply 17):
Like others, I'm very surprised at this, but since they recently ordered more A380s, was the A350 order simply transferred to the A380 order? Airbus gains more A380 orders and EK can cancel a now unwanted A350 order without paying a hefty fine. Now that is certainly a WIN/WIN

But why would they not make both announcements at the same time? Then it looks like a win for Airbus too, or at least not a massive loss like this cancellation does.
 
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Ab345
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:43 am

As P.R. news/headline this is indeed a blow for Airbus (especially in this so-far slow year) and a flashy dent in the A350s still impressive order book. But.......

I cannot get it out of my mind that this has been brewing for a while and most certainly will produce an order for some other frame from Airbus. Since the first EK A359 would have flown in 2019 there is time for major reshuffling.

For Boeing I do not however believe that all those orders are going to the 777X. Some last 77W maybe sure! Would be practical and availability helps.

We just need to wait and see the whole puzzle come to place. There could be a A330neo hiding somewhere in there   
 
UM78
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:43 am

Quoting RickNRoll (Reply 19):

They have mainly required a range extension and not to delay the project.

Here a link of an old discussion on A.net

Emirates Warns Airbus On A350 (by Lumberton Mar 12 2010 in Civil Aviation)
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:44 am

Quoting ikramerica (Reply 6):
I have a feeling that the performance of the A350 is proving to be optimistic just as the 787 was.

I find this speculation disturbing trying to give the fault to the A350 efficiency or Airbus. What if just EK just doesn't see the anymore the demand to sustain all this A350 plus their huge fleet?

Maybe the ordered too many planes overestimating growth?
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:46 am

I went out to find several news sources on this HUGE announcement before I commented. I am shocked. The A359 was supposed to the backbone of EK's fleet. It looks as if the 77W and A388 will be their fleet.

Quoting UAEflyer (Reply 16):

Logically EK will make a 2 type fleet for some reason. A380s & 777s, seems a good combination.

Concur.


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Spiderguy252
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:46 am

Emirates is one of the few major carriers then, that neither has the A350 or the B787 on order.
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:49 am

Quoting FirstClass (Reply 4):
what a blow to airbus

It will be a true blow to Airbus if EK do not order another Airbus type in return, which is doubtful considering the cancellation penalties for the A350 order
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:50 am

Quoting prost (Reply 12):

I wonder if their routes are more successful than anticipated and they simply needed larger planes. The normal rules just don't seem to apply to Emirates.

Possible even likely, maybe their route structure is just morphing too fast towards denser routes, so the -1000 and -900 are just not a fit anymore. 777's and 380's for Emirates!

They also (heaven forbid!) might be modeling a slowdown in growth to smaller markets. So now they'll have a simply crazy backlog vice an astronomical one.
 
Elbowroom
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:56 am

So is this, and the previous A380 announcement, telling us that Emirates have decided that increasing scale (and reducing CASM) is their primary way of staying ahead of QR and EY?

Will they generally open routes with 77W in future?
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:56 am

Quoting kngkyle (Reply 21):

But why would they not make both announcements at the same time? Then it looks like a win for Airbus too, or at least not a massive loss like this cancellation does.

Say 30 A330neo and 30 A380 are ordered at the same time as 70 A350 are cancelled. In terms of value still the same, in terms of numbers less. In people´s mind still a loss. Rather send out the bad news and clean up, and then book the new order with all the regular fanfare.

IMO a blow to Airbus, but I suspect some new order within the newxt couple of weeks.
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:57 am

Quoting kngkyle (Reply 21):
Quoting 777ER (Reply 17):Like others, I'm very surprised at this, but since they recently ordered more A380s, was the A350 order simply transferred to the A380 order? Airbus gains more A380 orders and EK can cancel a now unwanted A350 order without paying a hefty fine. Now that is certainly a WIN/WIN
But why would they not make both announcements at the same time? Then it looks like a win for Airbus too, or at least not a massive loss like this cancellation does.

Yes that is a good point. Can't see EK simply cancelling the order without ordering another product to avoid the fines, unless they are ordering more A330s then I believe this cancellation was simply moved to the A380 order.
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 6:57 am

It is quite conceivable that they are going to become an all-380 and 777 operator in a matter of a few years.
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:02 am

In case that the cancellation of the A350 is followed by an Emirates Launch customer order in Farnbrough (my stommach feel say 50% chance however) a seperate cancellation ahead of the launch would free up A350 slots for A350 final slot negotiations with other customers.

Another reason is a hint to the EU to stop lobbying influence of the EU airlines regarding ME Carrier extensions.

The other strory is: I wonder why the 777x Emirates order still isn't fixed. Some special deal is underway probably? - Or some disagreements.

Regards
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:06 am

I don't see this as a huge blow. It may actually provide additional interest in the A350 program, given that these slots will now become available sooner than expected.

EK's decision making will likely have to take into account some kind of additional Airbus deal as others have noted, so this will be interesting to see.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:07 am

Quoting autothrust (Reply 24):
Maybe the ordered too many planes overestimating growth?

In 2007 the 777X wasn't even a twinkle in Boeing's eye, so seven years later (probably five) Emirates have decided to re-evaluate their fleet strategy based upon all of the market offerings (Boeing's new baby).

Not too many surprises here! Emirates are simply going with a fleet that best serves their needs.

On the flip side the A350 program is doing very well and from where I sit this order cancellation will probably have no material effect on the A350. Airbus's telephones are probably running hot with airlines wanting their production slots.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:08 am

Quoting justloveplanes (Reply 28):

Possible even likely, maybe their route structure is just morphing too fast towards denser routes, so the -1000 and -900 are just not a fit anymore. 777's and 380's for Emirates!

Possible, and even more likely, EK just realized that they ordered more aircraft than they can profitable fill and they just eliminated the smallest frame from their order book (=least revenue per flight).

Quoting kngkyle (Reply 14):

This seems like a pretty big split to me, and definitely good news for Boeing.

Actually it is bad news for Boeing. Airbus sales force just got 6 dozen of rather short term available A350 delivery slots that can tilt some fleet decisions in their favor and secure the corresponding top-up orders. This is likely to increase the total number of A350 sales at the expense of the big end of the 787 and the 777X.

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seahawk
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:09 am

Just from a PR point of view, you want to have the bad news out, before you have something good to announce.

You do not need a large A350 cancellation cloud your A330NEO launch.

I expect them to have more new A350 orders ready to announce, than the cancelled EK order + A380 orders + A330NEO.
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:13 am

Not to mention that EK will be a little old-gen if they're sticking with A330s and B777s well into the 2020s, even if they're A330 NEOs and 777-Xs.
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Prost
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:14 am

Maybe they'll order 70 A380-900s.
 
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Ab345
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:15 am

Quoting seahawk (Reply 37):

        

Quoting flyglobal (Reply 33):
The other strory is: I wonder why the 777x Emirates order still isn't fixed. Some special deal is underway probably? - Or some disagreements.

I think you have caught on to something there. Maybe some kind of re-evaluation of future fleet structure?
 
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IslandRob
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:19 am

Quoting Flying-Tiger (Reply 30):
Say 30 A330neo and 30 A380 are ordered at the same time as 70 A350 are cancelled. In terms of value still the same, in terms of numbers less. In people´s mind still a loss. Rather send out the bad news and clean up, and then book the new order with all the regular fanfare.

That doesn't make sense to me. I think Airbus would have preferred to announce a new Emirates order NOW so as to soften the blow of the A350 cancellations. Makes me wonder if a big Boeing order announcement is imminent, and Airbus PR wants to get ahead of that. Regards. -ir

[Edited 2014-06-11 00:21:48]
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BoeingVista
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:20 am

Quoting seahawk (Reply 37):
Just from a PR point of view, you want to have the bad news out, before you have something good to announce.

You do not need a large A350 cancellation cloud your A330NEO launch.

Yup, announce a 330NEO launch and some A350 orders on FIA14 day one and the bad news is forgotten

Quoting tommy1808 (Reply 36):
Actually it is bad news for Boeing. Airbus sales force just got 6 dozen of rather short term available A350 delivery slots that can tilt some fleet decisions in their favor and secure the corresponding top-up orders.


Indeed plus neither Airbus nor Boeing will be making large margins on sales to EK, Airbus can hopefuly resell the frames at better prices.
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:22 am

I imagine Emirates is putting the screws to Boeing as we speak. Of course, the resulting 777x may cheese off carriers like LH, but lo and behold, there's some additional slots available on the 350 line. Things are going to be interesting leading up to, and including the airshow.

I read the articles from Nov. 2012 that said EK was wary about the changes Airbus was making to the A350-1000, but I haven't read of any displeasure regarding the -900. In fact, from outward appearances, Airbus has been having an ideal development and testing with the 350. I'm guessing something changed at EK rather than with the 350.

[Edited 2014-06-11 00:24:27]
 
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IslandRob
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:28 am

Quoting seahawk (Reply 37):
Just from a PR point of view, you want to have the bad news out, before you have something good to announce.

You do not need a large A350 cancellation cloud your A330NEO launch.

I disagree. I believe it would be wiser to make both announcements simultaneously, letting the good news overwhelm and soften the bad news. That way, it would look like Emirates had simply decided upon a different mix of Airbus frames - no big deal. -ir
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Prost
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:38 am

If, and this is a very large if, EK were to operate only 777(various models) and A380s, wouldn't they be misusing their planes on their close in city pairs? From what I've been reading, the A330 neo should be a stellar performer for sub 5000 NM routes, and the 777 is just too much metal for these routes. Or does fleet simplification trum this?
 
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seahawk
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:38 am

Quoting IslandRob (Reply 44):

I disagree. I believe it would be wiser to make both announcements simultaneously, letting the good news overwhelm and soften the bad news. That way, it would look like Emirates had simply decided upon a different mix of Airbus frames - no big deal. -ir

You do not want to mix good and bad news, you want to get out the bad news first and then release the good news a short time after. Doing that usually means the bad news are forgotten more quickly.

Even if EK should buy other Airbus planes instead, you do not want to have the press ask why. I think Airbus probably would not want to mix a A350 cancellation with a A330NEO order, as is looks like the older product is beating the newer.

I personally expect them to be launch customer of the A330NEO, it should make for a great plane on sub 5000nm routes and for opening routes. The A359 is too close to the 777-X.

[Edited 2014-06-11 00:41:17]
 
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RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:43 am

Quoting soyuz (Reply 1):
I still did not at all forsee this

The A350, and especially the -900, was always a bit of a strange type in the EK fleet.

Quoting FirstClass (Reply 4):
what a blow to airbus
Quoting AA737-823 (Reply 5):
I'm not so sure.

From the bright side: this cancellation will open 70 new delivery slots for other or new customers.

Bad publicity, that's all.

Quoting ikramerica (Reply 6):
I have a feeling that the performance of the A350 is proving to be optimistic just as the 787 was.

On the contrary, aircraft performance has nothing to do with this cancellation: EK simply needs bigger jets. The original A350 order was placed in 2007 and the airline has changed quite a bit in the last 7 years.

We have Qatar Airways on record saying the first A350s will perform better than the first 787s.

Quoting travelhound (Reply 35):
Airbus's telephones are probably running hot with airlines wanting their production slots.

  

Quoting AF185 (Reply 27):
It will be a true blow to Airbus if EK do not order another Airbus type in return, which is doubtful considering the cancellation penalties for the A350 order

Well, they just ordered 50 more A380s.

Quoting Spiderguy252 (Reply 26):
Emirates is one of the few major carriers then, that neither has the A350 or the B787 on order.

  

Quoting UM78 (Reply 18):
Emirates has been publicly declaring its unhappiness with the performance of the -1000 version even after Airbus decided to delay the entry into service of the type by almost two years to allow Rolls-Royce more time for a significant engine upgrade.

That statement dates from 2011. Back then, Qatar Airways wasn't happy either. Their statement has changed to the positive in the last two years.

Quoting seahawk (Reply 37):
Just from a PR point of view, you want to have the bad news out, before you have something good to announce.

Announcing a cancellation at Farnborough would be worse.

Quoting prost (Reply 43):
I'm guessing something changed at EK rather than with the 350.

  

Quoting IslandRob (Reply 44):
I disagree. I believe it would be wiser to make both announcements simultaneously, letting the good news overwhelm and soften the bad news. That way, it would look like Emirates had simply decided upon a different mix of Airbus frames - no big deal. -ir

The "bad news" will always overtrump the good news.
What we leave behind is not as important as how we've lived.
 
LTH
Posts: 129
Joined: Wed Feb 26, 2014 5:49 pm

RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:45 am

Quoting tommy1808 (Reply 36):
Actually it is bad news for Boeing. Airbus sales force just got 6 dozen of rather short term available A350 delivery slots that can tilt some fleet decisions in their favor and secure the corresponding top-up orders. This is likely to increase the total number of A350 sales at the expense of the big end of the 787 and the 777X.

The Airbus press release states that the first delivery to EK was scheduled for 2019. I wouldn't call it short term, but I agree that it's nonetheless still a good opportunity for other airlines for top-up orders or smaller airlines that just need a few widebodies to go with the A350.
These new 70 slots won't hurt the 787 or the 777X sales. The first 787-10 is scheduled to have its EIS in 2018 and I'm sure there are a few more airlines out there that are highly interested in the 78Js capabilities. For 777X there will be continuous demand since the 777-9X is a class of its own and we will have to see how many -8X will be ordered since its more of a niche plane, but shares commonality with the -9X.

Both Boeing programs and the A350 program will see orders in the future, since they're offering airlines efficient widebodies. I don't think their sales depend that much on the EK cancellation.


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CXfirst
Posts: 3022
Joined: Tue Jan 30, 2007 8:13 pm

RE: Wow! Emirates Cancels Entire A350 Order

Wed Jun 11, 2014 7:48 am

Quoting AA737-823 (Reply 5):
I'm sure Airbus didn't hesitate to "trade up" to the rather slow-selling but HIGH VALUE A380.

Well, the A380 and the A350 are different markets. So, if EK really needed more A380s, one could argue that they would have ordered those A380s no matter if they were part of an A350 cancellation or not. So the real winner here is Boeing and Emirates, as Emirates don't need to pay cancellation penalties (assuming the last A380 order was part of this cancellation), while Boeing will probably sell more 777s. Airbus got more A380s ordered, but if EK really needed those air frames, they would have ordered them anyway.

-CXfirst

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