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KPDX
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 2:58 pm

Quoting AviationAware (Reply 196):
There seems to be a lot of emotion involved when the A380 is concerned, leading to sometimes blatant disregard for the facts that this aircraft has just not sold well so far. When 50% of a program's orders are from a single operator, that is a VERY bad sign that should have everyone's alarm bells ringing.


  

The denial and defensiveness regarding the A380 is getting to a fever pitch right now. It's order book isn't bad, but it's not great by any means. I'll be happy if it succeeds later down the road, but I'm not holding my breath quite yet.

Quoting KarelXWB (Reply 198):
The story is even worse for the 747-8i,

I don't see who in their right mind would say the 747-8 is a success story. It's not really even debatable. In fact, it's kinda a disservice to the A380 if you begin comparing the two, order status-wise. 
 
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BaconButty
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:07 pm

Quoting racercoup (Reply 195):
I'd love some examples of where Richard was wrong concerning the A380.

Dozy Dick:

Quote:
The A380 itself would have been impossible without billions in taxpayer euros that will never, ever be paid back.
http://www.richardaboulafia.com/shownote.asp?id=318

Reality:

Quote:

This advance is then repaid by means of a levy on the sale of each aircraft.
....
Once the actual sales exceed the target, as has happened, investing governments continue to collect “royalties” or “upside” on the additional sales, which will further increase their rate of return.
http://trade.ec.europa.eu/doclib/docs/2010/september/tradoc_146503.pdf

He didn't believe the wiring loom issues to be a contributor to delays "This is the dumbest effort to deflect blame for the disaster" but rather the delays were due to " trying to get the weight down and improve performance." Doh! In the same article Ricky also says "In the interests of fairness, here’s some free (and obvious) advice to Boeing: as soon as the 787 is out the door, launch the 797 narrowbody. Do to the A320 what the 777 and 787 are doing to the A330/340."
http://www.richardaboulafia.com/shownote.asp?id=221
When did the A330 line close again? I'm sure it was in the news recently  

Anyway, that's a quick shufty. I could have mentioned the infamous shadow appraisal Boeing paid their shill for (among others). E.g. "The advent of the Sonic Cruiser, which will bid especially for the “premium” passengers on many routes, will strip away the most profitable A380 traffic from about 2008.". Not to mention the absolute corker these still-tending halfwits came up with - estimate an aircrafts production costs by its weight! Don't bother with financials and margins, ma, git that there metal bird on the scales!
Down with that sort of thing!
 
StTim
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:12 pm

Few would claim that the A380 is a shining star in the Airbus portfolio. It does suffer from the problems that Leeham outline and at least for Airbus they haven't had to virtually give them away to shift any frames at all.

As i said above re an Aspire article the language used in these articles is often the most telling. The basic story can be similar but the tone can be streets apart. A balanced tone and a reasoned argument is what we have tended to see from Leeham. Richard however is unbalanced - in his writing - and this upsets many and rightly so. Is he an analyst or an evangalist?
 
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KarelXWB
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:17 pm

Quoting AviationAware (Reply 199):
It sure keeps the assembly line running, but it is terrible news again for the residual values, especially if that monstrous operator is an airline like Emirates that already has some of the frames on order planned for replacement of older A380s.
If the single largest operator (and buy such a huge margin!) of a type is excluded from the secondary market, that puts additional pressure on it.

That's a fair point. However, we can't predict the future.

It's difficult: on one hand we have analysts claiming the secondary market will be a disaster. Some analysts have good arguments, others are just being silly. On the other hand we have the airframe owners being comfortable about the situation. On top of that, lessors keep taking A380s as part of sale/leaseback deals. They must be comfortable about resale market once those frames come off lease. And I doubt those people are fools.

So what should I believe? Maybe it's better to stay neutral, and see what happens. After all, 2020 (when the first A380 comes available on the secondary market) is still far away from our bedroom.
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BaconButty
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:19 pm

Quoting AviationAware (Reply 196):
blatant disregard for the facts that this aircraft has just not sold well so far.

I actually think the A380-800 has sold excellently. I think the A380 program has sold poorly. Just to spell it out, I believe the inability to bring the planned derivatives to market in a timely manner due to an inability to productionize the design is at the heart of the problems.
Down with that sort of thing!
 
travelavnut
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:30 pm

Quoting baconbutty (Reply 201):
Anyway, that's a quick shufty.

You just have to look at this archives ( http://www.richardaboulafia.com/archives/ ) to immediately see the blatant bias;

Airbus:

Airbus’s Terrible, Horrible, No Good, Very Bad Day…And What They Can Do To Make It Better - Forbes.com blog
Airbus Needs Another Big Step Towards Reform
Airbus Twin-Aisles—Big Needs, Limited Means
The Airbus Debacle - Wall Street Journal


Boeing:

Boeing's Options After Its Legacy Military Aircraft Wind Down
Boeing Made The Right Call

He writes at lot more about Airbus and his choice of words is also very clear. About Airbus it's always terms like "horrible" or "debacle". Yet about Boeing it's "Boeing options after..etc".

This guy is the definition of being biased.
Live From Amsterdam!
 
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Stitch
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:44 pm

Quoting AviationAware (Reply 199):
So signing Sale-Leasebacks gives them experience in getting lessees for planes they ordered themselves?

Yes, because they have to calculate residual values and rates of return for their investors and secure funding on open commercial markets to buy the planes from the original customers as well as calculate lease rates sufficient to secure a positive rate of return for their investors as well as re-pay those commercial lenders.

If anyone knows what an A380 is worth in terms of a monthly rent and residual value, IMO, it's Amedeo.
 
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anfromme
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:55 pm

Quoting travelavnut (Reply 182):
Everything the guy writes is biased and colored, he's the Fox News of the aerospace industry.
Also he's proven wrong on this forum so many times I lost count years ago. Just the “They have exactly one enthusiastic customer.” is pure prime cut Bravo Sierra.

  
That's my problem with him - it's fair enough to criticise Airbus (or Boeing, for that matter), but with Richard, even his Airbus criticism is without much value because you know a priori that he's going to criticise Airbus. That's a foregone conclusion, not the result of an actual analysis that's worth considering. When Airbus won IAG and JAL, he wasn't crediting the capabilities of the A350 with for a single second. He was just blaming Boeing for not launching the 777X sooner. (Which is BS as well, because IAG didn't order A350 all that much before LH ordered 777X, and JAL actually ordered A350 after that LH order.)
But it makes sense (in a way), because his belief is that Boeing's widebody offerings are clearly superior over Airbus'. He actually said that. And he resorts to calling people criticising him "random Euro-sycophants".

Completely different story with analysts like Leeham or reporters like Ostrower.
Both of them praise and criticise both manufacturers based on the merit of the issue at hand. Leeham for instance aren't big believers in the A380, either, but they refrain from issuing nonsense statements like "Where does this end? They have exactly one enthusiastic customer.", and they apply the same standards to both OEMs.
So any comment from Aboulafia regarding Boeing or Airbus is pretty much useless, because one is consistently too rosy, while the other is consistently too bleak.

Quoting KarelXWB (Reply 186):
He trashed the A350 program as well, for example.

Yeah, there was that legendary number of bar raising exercises he had to perform during the space of a week during the Paris air show a good 8 years ago in order to still be able to say something negative about the programme...

Quoting KarelXWB (Reply 186):

Leeham News is also very critical and writes about both Airbus and Boeing, and does it much better than uncle Richard.

  

Quoting KarelXWB (Reply 188):
Even without the A380, Airbus would had never launched the A350 before the 787.
Blaming the A380 for everything is just too easy.

  


Getting back to the Skymark A380s - I'm quite curious to see who's going to pick them up.
Enforcing their contractual rights in the way Airbus did, I do wonder how quickly they think they can place those frames, as they must surely have felt that having two white tails (well, covered-up star tails) is preferable to not terminating the contract.
Personally, other than a leasing customer (possibly via Amadeo - which would open the door particularly for TK) I'd mostly see existing customers as potential takers, primarily BA and SQ. Sure, EK would hardly notice two more frames, either, but I'm kind of hoping for a slightly less boring solution  
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par13del
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 3:56 pm

So since we are diverting the thread, where exactly did Richard cut his teeth in the Aviation Industry, Europe or America?
It is easy to say one should be fair and unbiased but if one is an expert they usually start with their strength at one OEM or the other, no one actually hires an Airbus expert to provide advise on Boeing and vice versa.
Usually humans tend to be more tough on their own versus the neighbours kid.
Just a thought.
 
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anfromme
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 4:11 pm

Quoting par13del (Reply 208):
where exactly did Richard cut his teeth in the Aviation Industry, Europe or America?

The whole point is: This shouldn't matter in somebody's analysis.
Leeham is US-based as well (actually Washington-based, even) and has never shown the same bias towards/against either of the two OEMs. Both get the same treatment, and Leeham tends to provide some actual facts to support their analysis, rather than just dressing up their predictable opinion/bias as facts (or facts-based).

"Independent analysis" contradicts the very concept of "supporting the home team".

Quoting par13del (Reply 208):
It is easy to say one should be fair and unbiased but if one is an expert they usually start with their strength at one OEM or the other

Do they? Sounds to me like they're in the wrong job if they think they need to be closer to one manufacturer than the other.

Quoting par13del (Reply 208):
no one actually hires an Airbus expert to provide advise on Boeing and vice versa.

So you're saying that Aboulafia shouldn't be asked about anything Airbus because he is a Boeing expert, i.e. his words are worth about as much as those of Boeing's own PR people when it comes to Airbus?
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StTim
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 4:11 pm

You can be tough but he goes beyond that. Critical analysis from a point of strength is really telling. But when you look at the words he uses in the pieces it is not critical analysis it is critical trashing and as such it becomes untrustworthy.

I would have the same problem with an so called industry expert analyst who the same terms against Boeing products. When I sat the entrance exam many years ago for my MBA one of the key parts was critical appraisal of a piece of writing. You have to look for the angle, even in more balanced articles.

oh I passed by the way  
 
mffoda
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 4:12 pm

I thought this whole Doric - Amedeo thing was settled in the "Amadeo And Doric Issues? " thread.

Doric is the company that has 36 A/C on lease (via sale/lease back), they never ordered directly from A & B.

Amedeo is the company that has 20 A380's on order (speculative) from Airbus. But has never leased an A/C.

Isn't that about right?
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par13del
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 4:31 pm

Quoting anfromme (Reply 209):
The whole point is: This shouldn't matter in somebody's analysis.

Well, how does one get to be an independent analysis in any field, go to work for multiple OEM's long enough to know a little to be dangerous or long enough to be to old to go elsewhere?

Quoting anfromme (Reply 209):
So you're saying that Aboulafia shouldn't be asked about anything Airbus because he is a Boeing expert, i.e. his words are worth about as much as those of Boeing's own PR people when it comes to Airbus?

Like I said, if you want an analysis on Airbus why go to a Boeing expert or vice versa, if you are asking them questions it says more about motives versus the project involved.
 
Prost
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 4:39 pm

Quoting anfromme (Reply 207):
Getting back to the Skymark A380s - I'm quite curious to see who's going to pick them up.
Enforcing their contractual rights in the way Airbus did, I do wonder how quickly they think they can place those frames, as they must surely have felt that having two white tails (well, covered-up star tails) is preferable to not terminating the contract.

I've been wondering the same thing. Airbus seems like a great supplier to new carriers, so for them to cancel this contract seems out of the norm for them. Obviously a lot more that we don't know, but I wonder if Airbus feels they can easily place these frames with another carrier?
 
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BaconButty
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 4:45 pm

Quoting mffoda (Reply 211):

I thought this whole Doric - Amedeo thing was settled in the "Amadeo And Doric Issues? " thread.

Doric is the company that has 36 A/C on lease (via sale/lease back), they never ordered directly from A & B.

Amedeo is the company that has 20 A380's on order (speculative) from Airbus. But has never leased an A/C.

Isn't that about right?

Doric Asset Finance is the German company that does the sale/leaseback - or strictly speaking there are many LSE listed investment vehicles who each own one or more aircraft that (IIRC) pay management fees to Doric Asset Finance. So strictly speaking Doric Asset Finance own no aircraft either.

Irish based Doric Lease Corp was spun out Doric Air Finance in order to engage in speculative leasing (for some reason not possible in Germany?). There was later some kind of falling out - it's all a bit murky, and led to an extremely bizarre statement here
http://www.doric.com/fileadmin/Doric...Update/2014_05_15_doric_update.pdf
suggesting that one of the key founders and MD of Doric Asset Finance had no involvement in its core business. Which is odd to say the least.

Doric Lease Corp were later rebranded as Amedeo.
Down with that sort of thing!
 
racercoup
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 5:00 pm

Richard has been critical of Boeing when appropriate, and has been a glowing supporter of the Airbus A350 product and execution. I feel the criticism of him here is a combination on bashing of anything viewed as negative towards the A380 program and his tendacy towards sarcasm.

http://www.bloomberg.com/news/2014-0...-aircraft-deliveries-increase.html

Here is a timely Bloomberg article.

On the issue of EK being such a large part of the order book:

"This is rather an unhealthy concentration of demand, as it represents a big single point risk,” said Nick Cunningham, managing partner at London-based Agency Partners:

Sounds like he agrees with Richard.

On the current state of the order book:

“Without referring to any specific airline, I can assure you that we have cases where airlines are in the order backlog but not in the production plan,” Chief Executive Officer Tom Enders said today on a conference call to discuss earnings. “We are watching the situation carefully, and know about the strengths and weaknesses of customers.”


"Among customers that have ordered superjumbos yet remain undecided about actually taking them is Virgin Atlantic Airways Ltd., with six units on the order book. Qantas Airways Ltd. (QAN) had also planned to top up its existing fleet by as many as eight planes, an expansion that’s been thrown into doubt amid a cost-cutting drive. And Amedeo, an aircraft lessor that ordered 20 A380s this year, has yet to find a single client for the jet"

On the subject of 2015 delivery slots:

"Airbus has been trying to get early 2016 customers to move forward to take two delivery positions at the end of 2015"

Information pertinent to this post:

"Enders told analysts that Airbus’s decision to cancel Skymark’s order before installing buyer-furnished equipment such as seats and in-flight entertainment would make it easier to re-market the first two planes that had been built but not customized. Some observers said it may still be tough. "

If you cannot access the article using the link above it can be found on the Yahoo home page.
 
airbazar
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 5:26 pm

Quoting Stitch (Reply 193):

If they want to increase their losses even more, then sure...

Why? I don't think SAA's losses have anything to do with the aircraft that they operate. They will continue to lose money by the bucket load regardless of what aircraft they operate for reasons well documented. Personally I don't think a small number of VLAs are necessarily worse for SAA because they are based in a remote area of the globe where frequency is not always beneficial. What's the point of running 2 flights to LHR within 30mins of eachother?

Quoting AviationAware (Reply 196):
When 50% of a program's orders are from a single operator, that is a VERY bad sign that should have everyone's alarm bells ringing.

And 50% of the 777X program going to a single airline is not a problem? Why is it even a problem? You should have stopped at "did not sold well so far."  
 
aviationaware
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 5:40 pm

Quoting airbazar (Reply 216):
And 50% of the 777X program going to a single airline is not a problem? Why is it even a problem?

I doubt very much that Emirates' share of the 777X program will remain at even remotely the current level. Eventually that plane will pick up much more steam and sell beautifully, something the A380 can't say of itself.

As to why such a large share of the program going to a single operator being a problem, I wrote something on that above. It's terrible for residual values and it makes the program incredibly volatile.

Quoting airbazar (Reply 216):
You should have stopped at "did not sold well so far."

We seem to have very different opinions about what selling well means. There are 3 aircraft programs that are not selling well for one ore more criteria:

1) CSeries which lacks commitments from large network airlines
2) A380 which lacks a large enough variety of operators to ensure a healthy secondary market
3) 748i which lacks both

The A380 has sold in numbers that are still eons from break even. That's in my eyes a prime definition of not selling well. Did I mention that Emirates buying half of the planes also means that they are getting them ass cheap and will have no trouble regarding production slots as they are virtually the only ones in the race for them? That's far from optimal for Airbus.
 
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Revelation
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 5:43 pm

Quoting racercoup (Reply 195):
I'd love some examples of where Richard was wrong concerning the A380.

Right here in this thread where he said the A380 has exactly one enthusiastic customer. I think there are several enthusiastic customers, BA for one. They just aren't planning to replace the 50+ 747-400s one for one with A380s (or 747-8s either) so maybe that makes them "unenthusiastic" by Richard's standard, but not mine.

Quoting airbazar (Reply 216):
And 50% of the 777X program going to a single airline is not a problem? Why is it even a problem? You should have stopped at "did not sold well so far."

I think it's a problem, but I'm pretty confident that the 777X customer base will broaden once it is more established, unlike the A380 which is losing customers as it gets more established.
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phxa340
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 5:48 pm

Quoting airbazar (Reply 216):


Comparing % customer share of an airplane that has been in production for 6-7 years with a plane that is still in design phase isn't really fair.

Quoting anfromme (Reply 209):


I don't think anything needs to be said of the Boeing 748 - it's DOA. The fact that people keep debating the A380 is because it's future prospects are unclear. The 748 prospects are very clear.
 
lpdal
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 7:58 pm

Quoting RickNRoll (Reply 162):

That was five years ago. Has it not been fixed yet?

As far as I know, EK is the only airline that has bathing systems onboard (not counting those Middle East airlines that use Boeing Business Jets-BBJs). The system of water recycling/plumbing that is in use aboard these frames requires frequent fine tuning and repair, due to the nature of the apparatus. They've ordered a lot more A380 options, so I'm assuming they've figured out how to cope with this.

-LPDAL
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clickhappy
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 8:45 pm

Quoting airbazar (Reply 216):
And 50% of the 777X program going to a single airline is not a problem?

I guess the A330NEO is really doomed! Does it even have any firm orders?
 
racercoup
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 8:51 pm

Quoting Revelation (Reply 218):
Right here in this thread where he said the A380 has exactly one enthusiastic customer. I think there are several enthusiastic customers, BA for one. They just aren't planning to replace the 50 747-400s one for one with A380s (or 747-8s either) so maybe that makes them "unenthusiastic" by Richard's standard, but not mine

OMG !! That's the best you can do?

That comment is complete open to interpretation. Has he been wrong about the market size, the weak order book, the effect of new twins on VLA sales etc? I would expect that someone from the USA would understand that when Richard used the term enthusiastic towards EK he was referring to their large percentage of the order book, not how much EK or other airlines liked the model.

Quoting KarelXWB (Reply 203):
On top of that, lessors keep taking A380s as part of sale/leaseback deals. They must be comfortable about resale market once those frames come off lease. And I doubt those people are fools.

Other than the EK/Doric leases I have not read of any other airlines leasing A380. EK leases are not traditional in the sense that Islam forbids the paying of interest. From what I understand the EK leases are partnership arrangements in which all parties share in the profits/losses of the financed item. Maybe some else can shed more light on the subject.
 
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KarelXWB
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 9:05 pm

Quoting racercoup (Reply 215):
Here is a timely Bloomberg article.

The article doesn't say much. A news agency like Bloomberg would never publish harsh language. Just look at uncle Richard's own website (see the examples above), it tells you what kind of guy he is.

Quoting racercoup (Reply 222):
Other than the EK/Doric leases I have not read of any other airlines leasing A380

There are others. Air France A380s are also on lease, for example (and not from Doric).
What we leave behind is not as important as how we've lived.
 
aviationaware
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 9:07 pm

There are some A380s on tax leases.
 
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anfromme
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 9:07 pm

Quoting par13del (Reply 212):
Well, how does one get to be an independent analysis in any field, go to work for multiple OEM's long enough to know a little to be dangerous or long enough to be to old to go elsewhere?

Firstly, you don't have to ever have worked for A or B to be an aviation analyst. In fact, it probably helps if you haven't, as that reduces the likelihood of retaining some (conscious or subconscious) bias.
Secondly, in any case if you call yourself an "independent" analyst your analyses should be completely untainted by whom you ever worked for before... or you should be honest enough to not work on topics where you know you're not unbiased.
Yes, it really is that simple. Otherwise, I may as well read PR statements from the companies themselves instead of your analyses.

Quoting racercoup (Reply 215):
Richard has been critical of Boeing when appropriate, and has been a glowing supporter of the Airbus A350 product and execution.

On both counts: Not really.
Counter-examples were already recounted above by myself and others.
I myself mentioned the constant bar-raising he did when the A350XWB was originally launched in 2007 - here it is, dug up from a previous thread:

Quote:
The bar: it had no sales to a "blue chip" customer, quite ignoring (or forgetting) the Singapore order.
So then he raised the "problem": "The A350 badly needs GE's backing, he said"
Which didn't stop Singapore from ordering it, so then he raised the ILFC problem:
"Unless ILFC orders the A350 quickly it will not have that official stamp of approval by the most important financier of aircraft in that class," he said. - which ILFC promptly did, having suggested it would at the start of the show. Its just that Mr. Aboulafia didn't take the many hints.
JAL Orders 31 A350 Part 2 (by wilco737 Oct 7 2013 in Civil Aviation)

That's the sort of stuff people mean when they say he's biased. Nobody is saying he's 100% wrong 100% of the time, but it's so tedious to sift through his statements in search for something that's actually a valid point that many people just don't bother any more as there are many much more balanced aviation analysts out there. Leeham News being a prime example that's been mentioned here a few times as well; and Leeham aren't exactly glowing supporters of the A380, either.
Ironically, Aboulafia was actually in favour of the A320neo, while Leeham were luke-warm.
But then, looking at the reasons he suggested why the A320neo was a great idea, he got most of them wrong again.... For example, he suggests that the A321neo is the closest thing to a 757 replacement we'll see for now (true), but then concludes that it is thus their only chance of keeping a US market presence outside USAirways. sarcastic 

Quoting racercoup (Reply 215):
I feel the criticism of him here is a combination on bashing of anything viewed as negative towards the A380 program and his tendacy towards sarcasm.

Please re-read the points that have been made above by many people, which should tell you that - well - your feeling is completely off the mark.

Quoting KarelXWB (Reply 223):
There are others. Air France A380s are also on lease, for example (and not from Doric).

As are some of Singapore Airlines'. At least one of them from Lloyd Fonds, another German financing company.
Source (sorry, German only).
Second Source (English).

[Edited 2014-07-30 14:13:25]

[Edited 2014-07-30 14:20:09]
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NWAROOSTER
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 9:21 pm

Richard Anderson may be a fan of Airbus, but he is not a fan of the A380. He is a fan of any manufacturer that will sell him the aircraft he feels will serve Delta the best at the cost that he is willing to pay. Delta is buying a large quantity of 737-900ERs if I am correct.
Delta has a very large fleet to manage and time is on Delta's side.   
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KarelXWB
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 9:23 pm

Quoting NWAROOSTER (Reply 226):
Richard Anderson

I believe we were talking about a different Richard  
What we leave behind is not as important as how we've lived.
 
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Stitch
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 9:24 pm

Quoting racercoup (Reply 222):
Other than the EK/Doric leases I have not read of any other airlines leasing A380.

Doric's portfolio includes A380s from EK, LH and SQ.


Quoting racercoup (Reply 222):
EK leases are not traditional in the sense that Islam forbids the paying of interest.

I'm not an expert on Sharia Law, but I believe the prohibition is for the acceptance (charging) of interest, not the payment. Also, the Emirates that make up the UAE are not exactly strict followers of Sharia Law and Islamic banking principles.  Wink
Quoting racercoup (Reply 222):
From what I understand the EK leases are partnership arrangements in which all parties share in the profits/losses of the financed item. Maybe some else can shed more light on the subject.

In order to purchase the planes (Doric's portfolio includes A380s, 777s, A330s, A340s and A320s), Doric uses a combination of commercial loans and the creation of an investment trust for that aircraft that then sells shares on the Isle of Man and London Stock Exchanges.

[Edited 2014-07-30 14:35:31]
 
racercoup
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 10:26 pm

Quoting Stitch (Reply 228):
I'm not an expert on Sharia Law, but I believe the prohibition is for the acceptance (charging) of interest, not the payment. Also, the Emirates that make up the UAE are not exactly strict followers of Sharia Law and Islamic banking principles.

I gleaned my information from an article on the Harvard Business review concerning EK and their finance vehicles. It was quite clear in the article that EK leases conform to Sharia law with a profit split being substituted for any sort of interest payments. That said the following Bloomberg article explains and EK bond sale to pay for aircraft this year in accordance with Islamic law.

http://www.bloomberg.com/news/2013-0...ion-in-planes-islamic-finance.html
 
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Revelation
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 10:38 pm

Quoting racercoup (Reply 222):
I would expect that someone from the USA would understand that when Richard used the term enthusiastic towards EK he was referring to their large percentage of the order book, not how much EK or other airlines liked the model.

I'm not sure what nationality has to do with it, but in any case, I don't know how one can imply that just because EK has ordered a huge number of frames that the other customers are not enthusiastic. We're talking about frames that list at USD 414M or EUR 300M and to me any airline ordering a fleet of 10 or more are by definition enthusiastic about the aircraft. The list of such is Emirates, Singapore Airlines, Qantas, Lufthansa, Air France, British Airways, Etihad Airways, Korean Air, and Qatar Airways. As you say it's open to interpretation, but that's as good a metric as any, IMHO. I have only read one place where it was said AF was having issues filling its frames, and outside of that, all the reports I've read have been enthusiastic. Even QF remained enthusiastic after the RR engine had its well publicized incident, and even the cracked wing rib feet issue hasn't put the customers off the frame. Maybe the tune will change if there's a significant market downfall because its trip costs are an incentive to park the frame if it can't be filled, but that hasn't happened.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
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Stitch
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 10:45 pm

Quoting racercoup (Reply 229):
I gleaned my information from an article on the Harvard Business review concerning EK and their finance vehicles. It was quite clear in the article that EK leases conform to Sharia law with a profit split being substituted for any sort of interest payments.

Looking at the HBR and Bloomberg articles, both refer to the use of sukuks (an Islamic financial instrument similar in purpose to a bond) by Emirates to purchase airplanes outright and that profit split is used to bypass the prohibition on Riba (usury) because these bonds are being offered to Islamic entities.

Now Emirates may do something similar with their contracts with Doric on the A380s and 777s they are leasing from them to bypass the prohibition on Riba or because the contracts are executed in non-Islamic countries with non-Islamic entities, the prohibition on Riba may not apply.

[Edited 2014-07-30 15:48:20]
 
PlanesNTrains
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 11:09 pm

Quoting travelavnut (Reply 182):
Everything the guy writes is biased and colored, he's the Fox News of the aerospace industry.

You know, everytime someone uses Fox News as their test of bias, I have to sort of chuckle. As if other news outlets, blogs, information sources, politicians, etc. aren't biased? Wrong? Mislead? Lethargic?

Often times, someone is considered biased based on the viewpoints of the person doing the judging.

I don't care what news source you use or what political direction you choose. Putting such references in your comments just smacks of condescension to the people reading your post.

Quoting KarelXWB (Reply 188):
The head start is three years, not four. In addition, the original A350 was launched in 2004, the same year as the 787. Customers rejected the A350, forcing Airbus to make something better. This caused a delay of two to three years, and is unrelated to the A380. Even without the A380, Airbus would had never launched the A350 before the 787.

Blaming the A380 for everything is just too easy.

While I don't disagree out of hand, I do remember at the time the original A350 came out it seemed like Airbus was stalling due to limited resources. First, it was "We don't need to respond." Then it was "We just need to reengine." Then it was the next iteration, etc, until we got the XWB.

While that's my own interpretation, and it's based on nothing more than my own recollection and perception, it is how I remember viewing things at the time.

Quoting KPDX (Reply 200):
The denial and defensiveness regarding the A380 is getting to a fever pitch right now. It's order book isn't bad, but it's not great by any means. I'll be happy if it succeeds later down the road, but I'm not holding my breath quite yet.

Maybe if people stopped shouting "The sky is falling!" every friggin' day around here, then others wouldn't need to constantly feel like they need to defend the big bird.

-Dave
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
mrcomet
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RE: Airbus Cancels Skymark A380 Order

Wed Jul 30, 2014 11:40 pm

I doubt THY or DL or any other airline is going to make a billion dollar plane decision on some cheap birds on the market. Airbus is cutting costs as much as they can to get another big carrier to pick up the A380. That's a huge decision to fit a niche plane into their networks and that takes a lot of analysis, setting up maintenance, stocking parts, planning and buying interiors, arranging marketing, and lots of other stuff. If they are going to buy the A380, they are going to make a decision after an analysis and no bargain bin deal is going to get them to do anything different. If they buy them, it was because they already decided to buy A380s.

I doubt either will. It's a plane made for EK, BA and a maybe a few others. There are too few routes they can use them and there are alternatives that have less risk.
The dude abides
 
aryonoco
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 1:03 am

Perhaps those who want to discuss Doric/Amadeo and Richard Aboulafia and 748 and 77X and A330NEO can setup a different thread and leave this to be about the Skymark deal and potential houses for these birds.

Thank you.
 
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KarelXWB
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 8:09 am

Quoting PlanesNTrains (Reply 232):
While I don't disagree out of hand, I do remember at the time the original A350 came out it seemed like Airbus was stalling due to limited resources. First, it was "We don't need to respond." Then it was "We just need to reengine." Then it was the next iteration, etc, until we got the XWB.

The first A380 was already in final assembly in 2004, most of the engineering resources became available at that point.

Quoting aryonoco (Reply 234):
Perhaps those who want to discuss Doric/Amadeo and Richard Aboulafia and 748 and 77X and A330NEO can setup a different thread and leave this to be about the Skymark deal and potential houses for these birds.

  

[Edited 2014-07-31 01:11:56]
What we leave behind is not as important as how we've lived.
 
PlanesNTrains
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 8:12 am

Quoting KarelXWB (Reply 235):
The first A380 was already in final assembly in 2004, most of the engineering resources became free at that point.

Well, I can't argue with facts but I do remember how it seemed at the time. Oh wellz....

-Dave
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
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KarelXWB
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 9:35 am

Airbus on Thursday said its decision to cancel a $2.2 billion jet order from Skymark Airlines was final, rejecting the Japanese carrier's suggestion that talks were still ongoing.

http://economictimes.indiatimes.com/...-jet-deal/articleshow/39340616.cms
What we leave behind is not as important as how we've lived.
 
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anfromme
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 9:55 am

Quoting KarelXWB (Reply 237):
Airbus on Thursday said its decision to cancel a $2.2 billion jet order from Skymark Airlines was final, rejecting the Japanese carrier's suggestion that talks were still ongoing.

I keep being surprised by the tough stance and choice of words from Airbus about this, to be honest. In any public statement, they usually leave at least some wiggle room as there'll always be talks going on behind the scenes and things may look different tomorrow than they do today... not with this one, apparently, though.
I find this even more surprising considering the stereotype of "saving face" being very important when dealing with Japanese customers.

Random thought, based on nothing in particular - is Airbus playing hardball to then sell those two existing frames to Skymark at different conditions? But then - a subfleet of two or three A380s doesn't really make any sense.
42
 
fcogafa
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 10:19 am

This can't make things comfortable between them in regards to the remaining A330s
 
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frigatebird
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 10:21 am

Quoting anfromme (Reply 238):
I keep being surprised by the tough stance and choice of words from Airbus about this, to be honest. In any public statement, they usually leave at least some wiggle room as there'll always be talks going on behind the scenes and things may look different tomorrow than they do today... not with this one, apparently, though.I find this even more surprising considering the stereotype of "saving face" being very important when dealing with Japanese customers.

Indeed. And the remarks made by the Skymark CEO, publicly criticising Airbus is also not typical:

From this article:
The airline revealed it had been requesting a six-to-12-month deferral for the first two examples and indefinitely postpone the remaining four, or convert some to the smaller A330, which entered service with Skymark in June (Skymark Airlines inaugurates Airbus A330 service.). After Airbus's announcement, Mr. Nishikubo responded "We were informed with a fax on Sunday that the contract had been terminated because we hadn't made pre-payments after April," adding "We haven't talked enough. Questions like what would happen to the pre-deposits or whether we have the option to convert the order to other types have not been answered. Official meetings haven't been held either." He regretted "It has been unilateral. And this has been leaked to local media (in Europe). It's against the rules."
Sounds like two parties talking on two completely different frequencies.

I can understand Airbus couldn't agree with deferring delivery of 2 almost complete frames 6-12 months. Perhaps forcing delivery to BC with the A380s ending up in storage at VCV was not an option for Airbus either. But Skymark is still customer for A330s. How will they fix their relationship?
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KarelXWB
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 10:31 am

Quoting fcogafa (Reply 239):
This can't make things comfortable between them in regards to the remaining A330s

Funny you mention it. Skymark took delivery of their 3rd A330 yesterday.
What we leave behind is not as important as how we've lived.
 
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Revelation
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 11:23 am

Quoting frigatebird (Reply 240):
I can understand Airbus couldn't agree with deferring delivery of 2 almost complete frames 6-12 months. Perhaps forcing delivery to BC with the A380s ending up in storage at VCV was not an option for Airbus either. But Skymark is still customer for A330s. How will they fix their relationship?

Something just doesn't seem right. The CEO says "we didn't talk enough" which allows for either side to be blamed but "Questions like what would happen to the pre-deposits or whether we have the option to convert the order to other types have not been answered" clearly is blaming Airbus for not answering the questions that Skymark was asking.

As for "outrageous cancellation penalties beyond the realm of common sense" the article says:

Quote:

NHK, Japan's national public broadcaster, reports the figure is around 70 billion JPY, though Skymark declined to comment. This may be in addition to the 26.5 billion JPY that the airline has already deposited; 7 billion JPY each for the first two machines and 12.5 billion JPY for the remaining four. For the six airframes, Skymark had calculated the acquisition cost to total 191.6 billion JPY as of May.

Google's converter says 70B JPY is around 680M USD and 191.6B JPY is around 1.9B USD.

If the 70B JPY cost includes the deposit it's 37% of the total acquisition cost and if it does not the cancellation is 49% of the total.

Put another way, if the total acquisition cost is $1.9B then each frame is $317M so the cancellation fee is more than the cost of the two frames if the deposit is already in the cancellation fee and right at three frames if the deposit is not in the cancellation fee.

I don't know if these fees are "beyond the realm of common sense". Two of the frames are already built and others were close to being built so it seems a stiff cancellation fee is justified. However the public meltdown in relations does not seem to be justified. To me the only explanation that makes sense is that Airbus is trying to send a message to others who are wavering on their A380 orders.

The article also gives an explanation about why financing was hard to obtain:

Quote:

Its balance sheet has deteriorated, and having avoided borrowing any cash from banks since its birth, ironically, it does not have any rapport with financial institutions to receive support.

I guess the advice I was given early in life to establish a good credit rating was sound!
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
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Ab345
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 11:48 am

 
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moo
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 11:59 am

Quoting Revelation (Reply 242):
Put another way, if the total acquisition cost is $1.9B then each frame is $317M so the cancellation fee is more than the cost of the two frames if the deposit is already in the cancellation fee and right at three frames if the deposit is not in the cancellation fee.

It may be worth pointing out that "total acquisition costs" include the airframe purchase costs, but they will probably also include spares, training, additional crew qualifications, ferry flights, familiarisation flights, slots and other airport related costs etc.

So there are a lot of incidental costs there which won't be included in the final cost.

And the deposits paid are over the entire order of 6 airframes, not just the first two.
 
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JerseyFlyer
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 12:07 pm

Quoting Prost (Reply 213):
I wonder if Airbus feels they can easily place these frames with another carrier?

It does look as though Airbus jumped quickly to cancel, so it may well be that a couple of 380 / RR customers could do with an early top-up as the global economy improves.

Quoting Revelation (Reply 242):
Airbus is trying to send a message to others who are wavering on their A380 orders.

It was said a few years ago that Airbus had refused cancellation of launch orders from Thai (and MH?).

Quoting frigatebird (Reply 240):
Questions like what would happen to the pre-deposits or whether we have the option to convert the order to other types have not been answered.

As for this quote from Skymark, these will be matters fixed in the contract. What he is asking for is a variation from what is already contractually agreed. Nothing wrong with that, but there is no obligation on Airbus to agree.
 
Tangomaniac
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 12:11 pm

List of Doric A380-leases:
Airbus A380-800 (9V-SKA) Singapore Airlines
Airbus A380-800 (9V-SKB) Singapore Airlines
Airbus A380-800 (9V-SKC) Singapore Airlines
Airbus A380-800 (9V-SKD) Singapore Airlines
Airbus A380-800 (9V-SKE) Singapore Airlines
Airbus A380-800 (A6-EEL) Emirates
Airbus A380-800 (A6-EEM) Emirates
Airbus A380-800 (A6-EEO) Emirates
Airbus A380-800 (A6-EEC) Emirates
Airbus A380-800 (A6-EEB) Emirates
Airbus A380-800 (A6-EDZ) Emirates
Airbus A380-800 (A6-EDY) Emirates
Airbus A380-800 (A6-EDX) Emirates
Airbus A380-800 (A6-EDC) Emirates
Airbus A380-800 (A6-EDE) Emirates
Airbus A380-800 (A6-EDG) Emirates
Airbus A380-800 (A6-EDH) Emirates
Airbus A380-800 (A6-EDP) Emirates
Airbus A380-800 (A6-EDR) Emirates
Airbus A380-800 (A6-EDT) Emirates
Airbus A380-800 (A6-EDW) Emirates
Airbus A380-800 (A6-EEK) Emirates
see http://www.doric.com/Investments.4.0.html?&L=1

Best regards,
Tangomaniac
 
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Revelation
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 12:17 pm

Quoting JerseyFlyer (Reply 245):
What he is asking for is a variation from what is already contractually agreed. Nothing wrong with that, but there is no obligation on Airbus to agree.

I agree and I appreciate your correct framing of the situation, but the report quotes the Skymark CEO as saying that Airbus didn't even respond to the request for a variation, and then cancelled the contract via fax. All of this seems to me to be quite unexpected, so that's why I have to wonder if Airbus isn't trying to send a message.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
racercoup
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 12:35 pm

Quoting Revelation (Reply 247):
so that's why I have to wonder if Airbus isn't trying to send a message

And what message would that be? Don't let us paint your name on aircraft you're not going to end up buying?

Many questioned whether this order would ever become reality, maybe Airbus waited too long to investigate the situation.
There is plenty of egg on the face to go around here and plenty of it rests on Airbus sales department. IMHO
 
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moo
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RE: Airbus Cancels Skymark A380 Order

Thu Jul 31, 2014 12:54 pm

Quoting Revelation (Reply 247):
the report quotes the Skymark CEO as saying that Airbus didn't even respond to the request for a variation, and then cancelled the contract via fax.

So we have Skymarks version of events, but we don't have anything more yet...
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