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Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 12:05 pm

Please continue the discussion here.

Airbus Considers Ending A380 Production - Part 3 (by American 767 Dec 17 2014 in Civil Aviation)

Me and the other moderators we wish you a happy holiday,

Ben Soriano
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 12:19 pm

Continuing from part 3:

Quoting travelhound (Reply 226):
For this business case to work, we would have to expect, at the very least to produce thirty aircraft per year (i.e. - 300 sales) to ensure a stable manufacturing cost base. As such the $2.5 billion in development costs would be paid off over 300 frames.

So tell us why you think production must continue for ten years? Why not five, or fifteen for that matter?

Quoting travelhound (Reply 226):
...but than we have to manage these aircraft over the next twenty years with technical support / updates / upgrades / etc.

If we assume this plus other incidental costs, cost another 1% we are now down to a 3% margin or $7.5 million profit per aircraft.

It has already been pointed out to you, but I'll do it again: Supporting aircraft over their lifetime is a major PROFIT generator for manufacturers, it's certainly not "costs".

Quoting KarelXWB (Reply 230):
Quoting travelhound (Reply 226):
That is actually incorrect. Boeing have stated the average size of aircraft have decreased from 304 to 299 seats.

The total amount of seats doesn't say much about aircraft size. Tommy is right about aircraft getting bigger because airlines are using more space for bigger premium seats. We are seeing more Economy Plus, and full flat beds etc. Revenue per aircraft goes up, despite total amount of seats going down.

  
Exceptions confirm the rule.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 1:12 pm

From the previous thread:

Posted by trvavelhound in reply 211:
There would be other additional ongoing costs to an A380NEO. Manufacturing costs, parts produced by other suppliers, application of new technologies, ongoing support of the NEO airframe, project management costs, etc, etc, etc would all have to be included in the business equation.

Of course they would have to be included. And they will be included.  .

Posted by SEPilot in reply 213:
There is a desperation on the part of many members of this forum to keep the A380 in production.

I guess for every "despaired" member who wants to see the A380 remaining in production there are at least 100 despaired members wanting the opposite since 2005. And the desperation factor on their part is a lot higher, seeing all these countless threads on the A380 and its demise. Some even predicted the aircraft would never fly back in the days. So where this argument is coming form is totally unclear to me.

Posted by SEPilot in reply 213:
I sense that many outside this forum, particularly in Airbus, share this feeling. Unfortunately the reality is that the market for the A380 was never there and it has not materialised.

Firm order exceeding the original business case on which the decision to go ahead with the program is what you call "the market for the A380 was never there and has not materialised"?      

Posted by lightsaber in reply 214:
I think we all can agree the A380 is due for a NEO to stay in production. I see the business case for a NEO. Not the strongest business case, but enough of a better ROI than the 'do nothing' option to make it happen.
  .

I agree.

Posted by lightsaber in reply 214:
Since that is over 400 engines, it is a business case for RR (in particular if they 'steal' GP 7200 orders). I agree that that is the minimum plus growth. Plus other airlines. If the cost per flight is improved, it shall help sales. of the A380NEO. It comes down to how many other A380s. I see a future.

[checkmark}.

With spares already EK would be good for over 500 engines. And no doubt quite some customers will order replacements for their current A380's, lifting the number of frames and engines even higher.  .

Posted by OldAeroGuy in reply 215:
Neither of these failure conditions are used to determine the operational category of an airplane.


I am not so sure of that. But I will admit I have no documents to back up my claim. But do you have documents backing up your claim?

Posted by SEPilot in reply 216:
I agree that if the A380 is to stay in production it needs the NEO, but I can see no decent ROI for it. I cannot even see break even over the long term, because the main customer for the NEO needs them over at least 10 years, if not more, and I cannot see enough sales to maintain production at break-even rates for that long.

I don't share your in my book rather pessimistic view. Time will tell in the end how this one will play out.

Posted by SEPilot in reply 218:
You can offer all the arguments you want, but unless the customers step up and say that they will buy them (be they new customers or replacements) there is no case here.

That goes for every airliner program. We have just discussed the B777-200ER becoming obsolete, a perfect example of customers not stepping up anymore because they went with the B77W and/or the A332/A333 which were so much improved over their life time.

Posted by tommy1808 in reply 220:
It should enjoy about the same difference as the 77W vs. the classic.

  .

And then the A380 has much more cabin space "to play with" to get even better values.  .

Posted by tommy1808 in reply 223:
I am quite sure Astuteman quoted EK and SQ over and over and over again and both made very clear that the A380 is 20-21% better than the 77W. So i am quite sure the gap is that big.

  .

Posted by astuteman in reply 227:
For real?

For every one person "desperate" to keep te A380 in production there are TEN that are just as "desperate", if not more so, to see it closed down. God only knows what you and your like are going to do when Airbus go ahead with the NEO and keep the line open for decades to come. I think I can hazard a guess though.


  .

Posted by astuteman in reply 227:
Have you even stopped to think that those supposedly "desperate" to keep the line open are doing nothing more than expressing a more positive view to yours about the business case? So we're not allowed to hold a more positive opinion without it being "desperation"? Who do you think you are to gives us such a put down? Our opinions are every bit as valid as yours if you hadn't figured. Seems clear to me where the desperation lies

  .

The A380 has generally been written off by many here on A-net even before it flew. Practically on a daily basis since 2005 we have seen threads being started about its failure. And yet here she is, delivering 30 copies a year (ok, less then originally anticipated) to multiple new customers and they all are very happy with the aircraft and the product they can install on it. And I have a feeling that this will go on for quite some time, of course with a neo-version of the A380-800 and possibly also a stretched A380-900!   .

Posted by tommy1808 in reply 232:
Why would it be more expensive to build? If anything, it is to be expected that, while being at it anyways, Airbus would optimize towards cheaper, more efficient production..... and since the production line is there and paid for, they may even, scary thought, optimize the supply chain to allow for less than 30 frames/year .....

As we have seen on the A330 very successfully. But all aircraft OEM's are constantly trying to improve their product, methods and costs. So nothing new there as well, and the A380 will of course not be excluded from such improvements.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 1:40 pm

Posted by Astuteman in the previous thread:
Have you even stopped to think that those supposedly "desperate" to keep the line open are doing nothing more than expressing a more positive view to yours about the business case?
So we're not allowed to hold a more positive opinion without it being "desperation"?
Who do you think you are to gives us such a put down?
Our opinions are every bit as valid as yours if you hadn't figured

Of course your opinion is just as valid as mine, and yes, you have a much more positive view of the prospects for the A380. But the only real prospect for A380NEOs that I have seen is EK, and while many have tried to make the case that their order alone would justify the NEO, I have repeatedly shown that it cannot. And nobody has named even one airline that has shown any interest at all in the NEO other than EK. And I would hope that Airbus would have some pretty firm commitments, public or private, before investing that amount of money in a program that has fallen so far short of expectations so far. Does anyone know of any other airliner that has not gained a single new customer in the first 7 years after EIS?
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 1:54 pm

Quoting SEPilot (Reply 6):
Does anyone know of any other airliner that has not gained a single new customer in the first 7 years after EIS?

Why don't you accept Asiana Airlines and Transaero Airlines as new customers?
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 1:58 pm

Quoting Finn350 (Reply 8):
Quoting SEPilot (Reply 6):
Does anyone know of any other airliner that has not gained a single new customer in the first 7 years after EIS?

Why don't you accept Asiana Airlines and Transaero Airlines as new customers?

  

BA placed their order less than a month before EIS, and there were multiple repeat orders from customers other than EK.
Exceptions confirm the rule.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 3:23 pm

Quoting Finn350 (Reply 8):
Quoting SEPilot (Reply 6):
Does anyone know of any other airliner that has not gained a single new customer in the first 7 years after EIS?

Why don't you accept Asiana Airlines and Transaero Airlines as new customers?
Quoting A342 (Reply 9):
BA placed their order less than a month before EIS, and there were multiple repeat orders from customers other than EK.

I think these highlight why this topic has gone to so many installments.
No new orders since EIS equates to Asiana, Transaero and Amadeo (hope I spelled it right) but also includes BA who ordered one month before EIS and others who topped up. Next will be a definition of what constitutes an order, or MOU etc etc.

Personally I have gotten a lot from the reasoning behind the business case logics put forward and shot down, some interesting discussions. What I fail to understand is the continued comments about it being an A380 bash while still providing relevant input to the discussion, clearing up errors / mis-information does not have to be done with a caveat.
In any event I admit to being one who has read each thread and posted in most when I had questions, so.....
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 3:59 pm

Quoting par13del (Reply 10):
I think these highlight why this topic has gone to so many installments.
No new orders since EIS equates to Asiana, Transaero and Amadeo (hope I spelled it right) but also includes BA who ordered one month before EIS and others who topped up. Next will be a definition of what constitutes an order, or MOU etc etc.

I was not attempting to redefine the question, I was merely calling the logic behind it into question. Why should orders from new customers since EIS be a superior indicator of success compared to others?

One COULD argue that orders placed before EIS or even first flight are a better metric because going for an unproven product is more of a risk than going for a proven one.
One COULD equally argue that repeat orders are a better metric because customers have experienced the aircraft first-hand and saw that it met or exceeded their expectations.

Am I saying that these are better indicators of success that orders from new airlines since EIS? No, absolutely not. It just shows that everyone can choose parameters to their liking to prove their point. But actually, it proves nothing.  

I would even go so far as to say that by picking certain metrics, almost any aircraft programme can be redefined to be a tremendus success or a tremendous failure.
Exceptions confirm the rule.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 4:07 pm

Quoting EPA001 (Reply 4):
Posted by OldAeroGuy in reply 215:
Neither of these failure conditions are used to determine the operational category of an airplane.


I am not so sure of that. But I will admit I have no documents to back up my claim. But do you have documents backing up your claim?

As a summary document, this one is available:

http://www.aspireaviation.com/wp-con.../12/777X-airport-compatibility.pdf

Although it is provided by Aspire, it is a Boeing original document.
Airplane design is easy, the difficulty is getting them to fly - Barnes Wallis
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 4:11 pm

Quoting OldAeroGuy (Reply 13):
As a summary document, this one is available:

Thank you for providing the document. Since it is Christmas and I am cooking right now, I will read it later.  
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 5:37 pm

Quoting A342 (Reply 12):
Why should orders from new customers since EIS be a superior indicator of success compared to others?

If success is what is being discussed, sure it is, but in the context of whether the model is successful enough to warrant additional investment to create the NEO and the 900 it is a valid point of discussion.
On one side we have those who state that the NEO is a "must" to obtain additional orders, to a layman something like "if you build it they will come".
On the other side we have those who want to see additional orders to justify the investment.
Both sides in principle have merit, we only need to look at the A32XX-NEO / 737-MAX , initially Airbus said no conversions to NEO now they are allowed, so of the out-standing orders for the A380, if an NEO is announced today, how many will convert?
Airbus may well want to deliver all its current A380's or as close to all before making the NEO available, that's fine in theory until folks like the CFO start "pontificating" about production figures, break even, time lines, etc etc etc.

If we review the A380 threads I'm sure we will find a few post / posters where the same thoughts of the CFO may have been raised, but it was probably drowned out by the choir.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 5:47 pm

Quoting par13del (Reply 17):
Airbus may well want to deliver all its current A380's or as close to all before making the NEO available,.

  
they have no reason to announce anything. The 77x has its early adaptor orders and there probably won´t be much order rush going on until around 3 years before EIS, i don´t think the dreamliner franzy will repeat itself. By that time Airbus can work through most of the backlog, maybe even sell a few more and has ample time to evaluate how much better they can make the A380 and make up their mind weather there will be a A388neo, an A389neo or both. With A32xneo and A33xneo they also waited pretty much to the last second to announce it.

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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 5:49 pm

I think if Airbus does announce the A380-800neo project, there would be a number of other airlines besides the ME3 carriers interested.

Specifically, CX and SQ, especially for transpacific flights to North America. It would allow flights between SFO/LAX and HKG to be flown with a full load non-stop year round.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 6:35 pm

Quoting RayChuang (Reply 19):
Specifically, CX and SQ, especially for transpacific flights to North America. It would allow flights between SFO/LAX and HKG to be flown with a full load non-stop year round.

I would think the current 575,000kg model can do that already.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 7:49 pm

Quoting Stitch (Reply 20):
I would think the current 575,000kg model can do that already.

  
not much room for cargo anyways, and only that are may ser gains from more TOW or lower fuelburn.

best regards
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 9:01 pm

Lets turn this to a positive. As pro-380 posters are not outnumbered 100 to one, or even 10 to one, lets prove it in 2015, and replace the 747 on every page heading, with the 380, and in 2016 choose something from the Boeing stable.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 9:35 pm

SEPilot quote
I recall reading that EK has said that the 77W is just slightly less efficient than the A380. I recall Astuteman saying that if the A380 had the same seat density as the 77W then it would beat it by a wide margin, which is true. But nobody flies it at that seat density so it is academic. And the charts I have seen on this forum that give CASM show the A380 just slightly better than the 77W.

Key question then, is how good is EK at translating the known passenger preference for the 380 versus other aircraft in their own and competing fleets, into additional revenue? Always easier and cheaper to get EK 777 Y seats into or out of LGW. Ditto out of AKL to / from Australia vs competition, so some 'pulling' power.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 9:39 pm

Quoting planesmart (Reply 23):
But nobody flies it at that seat density so it is academic.

And since my reply to that ended up in part 3 after it was closed:

I would hardly call SQ or BA "nobody"

best regards
Thomas
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 10:10 pm

Quoting tommy1808 (Reply 24):
Quoting planesmart (Reply 23):But nobody flies it at that seat density so it is academic.
And since my reply to that ended up in part 3 after it was closed:

I would hardly call SQ or BA "nobody"

The entire post you responded to is below, so I can infer from your response that both BA and SQ fly their A380's in a high density configuration, I honestly thought that no one did and SkyMark was on the way to being the only one.

" I recall Astuteman saying that if the A380 had the same seat density as the 77W then it would beat it by a wide margin, which is true. But nobody flies it at that seat density so it is academic."
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 10:13 pm

Quoting par13del (Reply 25):
so I can infer from your response that both BA and SQ fly their A380's in a high density configuration, I honestly thought that no one did

Noone does. But there are two ways of getting there and BA and SQ chose to fly their 77W with a comparable low - density configuration.

Best regards
Thomas
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 10:45 pm

Quoting tommy1808 (Reply 24):
And since my reply to that ended up in part 3 after it was closed:

I would hardly call SQ or BA "nobody"

I was quoting SEPilot from Part 3. Please don't attribute his ramblings to me.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 11:09 pm

Quoting tommy1808 (Reply 18):
With A32xneo and A33xneo they also waited pretty much to the last second to announce it.

I believe that the day the 380NEO will be announced can be calculated in the following way: The day the relevant engine will be ready - minus - the time it takes Airbus to implement the program. They should not say anything officially about doing a 380NEO before such date as it will disturb their sales campaigns.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 11:17 pm

Quoting abba (Reply 28):
They should not say anything officially about doing a 380NEO before such date as it will disturb their sales campaigns.

It may also enhance their sales campaign unless they do not want to offer discounts on the older model, see the A32X-CEO and NEO, some carriers want discounts to fill out the last CEO slots.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Thu Dec 25, 2014 11:45 pm

Quoting abba (Reply 28):
They should not say anything officially about doing a 380NEO before such date as it will disturb their sales campaigns.

Too late, everybody knows it's a possibility. Any customer wanting a 380 can't get one before 2018, knows they need to file holes in production going forward, knows they will have two Skymark frames just sitting around and knows the NEO will probably be a marked improvement -- they will either wait the extra two +/- years or get a really, really good deal which won't help AB's bottom line. Actually, anybody that really needed the airplane would be in line already with AB or Amedeo.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 7:25 am

Quoting EPA001 (Reply 2):
Firm order exceeding the original business case on which the decision to go ahead with the program is...

Is this, in fact, correct? The only relevant number I'm aware of is from an Airbus slide stating program break-even at about 250 frames, and an IRR of something like 20%. That 250 frames is *not* the business justification, rather the 20% IRR is. I've never heard what number of frames were associated with the 20% IRR (and it's certainly not the 250 frame program-break-even - that's an IRR of 0%).
 
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 9:43 am

Quoting planesmart (Reply 20):
I was quoting SEPilot from Part 3. Please don't attribute his ramblings to me.

i don´t. But i should have made that obvious. Sorry.

best regards
Thomas
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 10:34 am

this is all hyperbole!! Airbus isn't going to do any such thing. Even if they have to resort to leasing airplanes on 5 year walkaway leases.
They are NOT going to just abandon that airplane.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 12:10 pm

In the late 1990s mainly japanese carriers could be interested in such a big plane, and they not ordering was just pure boycott I believe. American airlines didn't buy 380's because they were in and out of bankruptcy and kept weared planes. I don't think the 380 was instrumental for Emirates success, but if they could establish themselves in the Azores ... shame the islands are rather small.

It'd start fast with them sweeping Miami and Iberia out of the northern Europe to South America market, with southern Europe to SA market following suit. Then they'd go for the southern Europe to NA market. I don't think north americans perceive how uncomfortable is for many trips for many of us them routing everything through London and/or New York. In the end you would see people from Manchester skipping Heathrow to go to US.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 3:00 pm

Quoting javierglez (Reply 27):
In the late 1990s mainly japanese carriers could be interested in such a big plane, and they not ordering was just pure boycott I believe. American airlines didn't buy 380's because they were in and out of bankruptcy and kept weared planes.

So the fact that Japanese and American carriers started abandoning the 747 for DC10/767/777 makes never no mind, they were both available long before the A380 arrived.
It would seriously derail this thread if we started in on the why USA carriers do not order the A80 or cannot use it successfully while all other carriers in the world are flying A380's into US airports.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 3:16 pm

There are those from USA who fit the American Stereotype and believe that if it won't sell, work in the U.S then it is obviously a failure. Sadly this is a growing attitude in Europe regarding Europeans.

With regards A380, it is enjoyable seeing the reaction to what was an off the cuff remark by the CFO. From where I am standing the A380 will be here for many many more decades, much to the annoyance of it's haters.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 7:08 pm

Quoting bigsmile (Reply 29):
There are those from USA who fit the American Stereotype and believe that if it won't sell [or] work in the U.S then it is obviously a failure. Sadly this is a growing attitude in Europe...

With respect, the doomsday predictions about the demise of the A380 are basically Euro-centric and America-centric, in that they ignore (as Europeans and Americans with blinkers on so often do) important fundamental facts regarding demographics and infrastructure on the other side of the planet from Europe and the United States:

1) The population growth in east Asia, southeast Asia, and south Asia is dramatic, and shows no sign of slowing. In fact, recent intimations that China may gradually move away from its one-child-only policy will serve only to accelerate such population growth.

2) An enormous amount of that growth is in the middle classes - who have (and are using) their new-found discretionary income for holiday travel. As anyone who has seen the masses of mainland Chinese tourists in such previously-unheard-of places as Paris, Rome, Firenze, Switzerland, Scandinavia, Bangkok, Israel, India, and Hawaii can well attest.

3) China and India are now doing business with the rest of the world in such enormous amounts that business travel to and from those countries has boomed. The globalization of business is an undeniable fact.

4) There is no indication that the construction of new airports/runways or expansion of existing ones will keep pace with the projected growth in passenger traffic. In fact, for the most part, construction of new airports/runways/terminals is either recently-completed or near completion (e.g., Hong Kong, Dubai International, Hamad International, Incheon, Kansai, Abu Dhabi Midfield, Shenzhen Bao'an International's expansion). And with rare exceptions (e.g., Al Maktoum International/Dubai World Central; Beijing Daxing International), planning/construction for entirely new airports/runways/terminals is at a virtual standstill worldwide.

For the foreseeable future, the only solution is larger numbers of passengers per landing/takeoff slot and per terminal gate or remote stand. This can only be accomplished by larger aircraft carrying larger numbers of passengers - the A380 (and to a lesser extent, the 747-8I). I believe that Airbus did not misjudge the need for Very Large Aircraft. I believe that they simply misjudged the timing for the entry into widespread commercial service of such aircraft. And I believe that the misjudgment in timing was heavily skewed and distorted by the world-wide Great Recession that is now only just ending (which, I submit, could not reasonably have been predicted by Airbus, as it was largely driven by conservative fiscal policies, blatant corruption, and financial institution de-regulation in the United States). I expect that by 2030, the A380 (and stretched and "neo" versions at that) will be commonplace. Which in no way negates the excellence of the 787, 777-8, 777-9, A330-800neo, A330-900neo, and A350, or the essential roles that they will play in coming decades.

As to why the A380 has not been a huge seller in Japan? Two plausible answers: 1) Japan is only now dragging itself out of a very prolonged economic slump, and 2) Japan is a small country with a superb high-speed rail network. Between Tokyo and Osaka, the two largest metropolitan areas in Japan, up to 13 trains per hour with 16 cars each (1,323-seat capacity) run in each direction with a minimum headway of three minutes between trains. That's a capacity of roughly 300,000 passengers per day. No airline model beats that - even with all-economy-class A380 shuttle service between Tokyo and Osaka every 30 minutes. China's new and vast high-speed-rail network will similarly limit domestic A380 use in China (although to a lesser extent; China being much larger than Japan). The real future for VLA aircraft like the A380 is in medium-to-long haul routes between increasingly slot-restricted airports. Whether one is an Airbus fan, a Boeing fan, or either likes or dislikes the aesthetics of the A380 is all immaterial.
 
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 7:23 pm

Quoting SEPilot (Reply 3):
And nobody has named even one airline that has shown any interest at all in the NEO other than EK.

QR has expressed an interest in it, whilst it doesn't make the case either for or against, it shows there is further interest.
 
Planesmart
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 8:18 pm

Quoting ChinaClipper40 (Reply 30):

Excellent post.

I think posters who have not spent extended periods in India and China in the last 30 years, and again more recently, do not comprehend the economic size and rate of change in these countries, nor their potential for future growth.

They've been funding our deficits for the last decade, and will fund our growth too.
 
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par13del
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RE: Airbus Considers Ending A380 Production - Part 4

Fri Dec 26, 2014 8:24 pm

Quoting ChinaClipper40 (Reply 30):
I expect that by 2030, the A380 (and stretched and "neo" versions at that) will be commonplace.

By 2030 the current A380 will be 20 years old, the NEO or 900 will be slightly younger, I would expect that if the market is shaking out in those terms that new build a/c will appear, both from Airbus and Boeing.

Quoting ChinaClipper40 (Reply 30):
As to why the A380 has not been a huge seller in Japan? Two plausible answers: 1) Japan is only now dragging itself out of a very prolonged economic slump, and 2) Japan is a small country with a superb high-speed rail network.

So maybe for the NEO and the -900 Airbus should look at a real people mover for shorter distances versus the current model which is designed for long haul, Boeing attempted something similar with the 747.

Quoting ChinaClipper40 (Reply 30):
4) There is no indication that the construction of new airports/runways or expansion of existing ones will keep pace with the projected growth in passenger traffic. In fact, for the most part, construction of new airports/runways/terminals is either recently-completed or near completion (e.g., Hong Kong, Dubai International, Hamad International, Incheon, Kansai, Abu Dhabi Midfield, Shenzhen Bao'an International's expansion). And with rare exceptions (e.g., Al Maktoum International/Dubai World Central; Beijing Daxing International), planning/construction for entirely new airports/runways/terminals is at a virtual standstill worldwide.

Population growth in Europe and Japan has been slowing, in regions of the world where populations are growing space for new airports is not a huge problem, I suspect for the near and far future, slot restrictions will continue in Europe but be negligible elsewhere.
It would be something if the vast majority of A380's end up being used on domestic runs in China and India for example versus international flights.

Quoting planesmart (Reply 32):
They've been funding our deficits for the last decade, and will fund our growth too.

Hopefully, things like avoiding taxes, Kyoto Protocols and all the other ***RA that the EU and USA are coming with are not also designed to slow down the competition.
 
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EPA001
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 12:08 am

Quoting ChinaClipper40 (Reply 30):

An excellent post indeed.  .

Quoting planesmart (Reply 32):
I think posters who have not spent extended periods in India and China in the last 30 years, and again more recently, do not comprehend the economic size and rate of change in these countries, nor their potential for future growth.

Having been in that region quite a number of times over the last 15 years has really been an eye-opener for me. And I knew the region already better than average because of my heritage. Still many people in my part of the world (the North-Western part of continental Europe) underestimate the force and speed of the developments in that region. The rising number of tourists from that region in The Netherlands is not to be missed, and these people will come in more and more numbers.

Quoting par13del (Reply 33):
By 2030 the current A380 will be 20 years old, the NEO or 900 will be slightly younger, I would expect that if the market is shaking out in those terms that new build a/c will appear, both from Airbus and Boeing.

By 2020, at its designated EIS, the baseline aircraft for the B777-9X will be 26 years old. So imho no completely new aircraft are necessary to build an attractive offering for the future.  
 
mjoelnir
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 12:15 am

Quoting par13del (Reply 33):
By 2030 the current A380 will be 20 years old, the NEO or 900 will be slightly younger, I would expect that if the market is shaking out in those terms that new build a/c will appear, both from Airbus and Boeing.

So what, the B777 is now exactly twenty years old. In 2030 the A380 with upgrades will not be an old frame compared to the lifetime of other model lines
 
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Aesma
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 12:28 am

As there ever been that much talk about closing a production line when there is still years of orders to produce ahead ?

Especially with Airbus, wasn't the A340 still available very recently while there was already no more production ? And the A318 ?
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
777STL
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 12:42 am

Quoting EPA001 (Reply 2):
The A380 has generally been written off by many here on A-net even before it flew. Practically on a daily basis since 2005 we have seen threads being started about its failure. And yet here she is, delivering 30 copies a year (ok, less then originally anticipated) to multiple new customers and they all are very happy with the aircraft and the product they can install on it. And I have a feeling that this will go on for quite some time, of course with a neo-version of the A380-800 and possibly also a stretched A380-900! .

That cuts both ways. It surely hasn't been the raging success all of our European friends here thought it would be either. The fact that they're even considering axing the program at some point speaks volumes.

Quoting planesmart (Reply 15):
Lets turn this to a positive. As pro-380 posters are not outnumbered 100 to one, or even 10 to one, lets prove it in 2015, and replace the 747 on every page heading, with the 380, and in 2016 choose something from the Boeing stable.

It continues to amaze me how upset some of you get over some very valid criticism of the A380.

Quoting strfyr51 (Reply 26):
this is all hyperbole!! Airbus isn't going to do any such thing. Even if they have to resort to leasing airplanes on 5 year walkaway leases.They are NOT going to just abandon that airplane.

Meanwhile it destroys their earnings and profitability? I don't think so. Airbus, like any publicly traded company, has a fiduciary duty to its shareholders to run the business the best, most profitable way possible. If that includes getting rid of an unprofitable program, so be it. Unlike a.net nerds, these guys don't make decisions based off of nationalistic interests or pure emotion.
PHX based
 
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EPA001
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 12:53 am

Quoting 777stl (Reply 37):
The fact that they're even considering axing the program at some point speaks volumes.

They are not considering that. Where have you read that?
 
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par13del
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 2:16 am

Quoting EPA001 (Reply 34):
By 2020, at its designated EIS, the baseline aircraft for the B777-9X will be 26 years old. So imho no completely new aircraft are necessary to build an attractive offering for the future.
Quoting mjoelnir (Reply 35):
So what, the B777 is now exactly twenty years old

Yes and it is being replaced by the 777-9X, I guess you don't consider that a new a/c, ok.

I will reconsider my thoughts on the NEO and the 900 because I was thinking they would be new a/c with EIS later than 2007, sort of explains why some regard the 737-NG as having the same age as the classic.
 
mjoelnir
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 2:47 am

Quoting Aesma (Reply 36):
As there ever been that much talk about closing a production line when there is still years of orders to produce ahead ?

I do not think so.

Quoting 777stl (Reply 37):
It continues to amaze me how upset some of you get over some very valid criticism of the A380.

I am amazed at the invalid criticism.

Quoting 777stl (Reply 37):
Meanwhile it destroys their earnings and profitability? I don't think so. Airbus, like any publicly traded company, has a fiduciary duty to its shareholders to run the business the best, most profitable way possible. If that includes getting rid of an unprofitable program, so be it. Unlike a.net nerds, these guys don't make decisions based off of nationalistic interests or pure emotion.

How much do you think it will cost to shut down the A380 production while there are still confirmed orders to be delivered? With compensating both the customers and suppliers for breach of contract the first for non delivery and the second for not taken the ordered items. Not talking about the write of for the production lines and tools? Are you really talking about making that financial disaster? Do you really believe it does not cost anything to shut down such a production line? Or is that not what you are advertising?
And if not, why are you talking today about shutting down a line that has to run 5 years at current production levels just to clear the current orders? That should reach production break even next year. And do you take in your calculation that a big part of the revenues for an air framer are spare parts and afters sales service?

I do not dispute that Airbus is not reaching the intended sales figures. I do not dispute that it is very unlikely that Airbus will get a reasonable pay back on the development cost or will reach program break even, however we define that.
Those cost are written off and Airbus has learned some lessons. Those investment should play no part in the consideration regarding the continuing production of the A380. Regarding the decision for a neo or -900, the only consideration can be, will the investment for those extra developments stand under future added revenues that pay those investments.

But talking at this point in time about shutting down the program and producing gigantic additional costs, instead of getting in the revenues that are possible to get is just plain crazy.
.
You guys have a bee in your bonnet regarding the shutting down of the A380.

[Edited 2014-12-26 19:10:25]
 
mjoelnir
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 3:05 am

Quoting par13del (Reply 39):
Yes and it is being replaced by the 777-9X, I guess you don't consider that a new a/c, ok.

I will reconsider my thoughts on the NEO and the 900 because I was thinking they would be new a/c with EIS later than 2007, sort of explains why some regard the 737-NG as having the same age as the classic

As long as the design is grandfathered, holding on to design features as old as the original design, I have difficulties accepting those birds as a brand new design all around.
 
777STL
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 7:25 am

Quoting EPA001 (Reply 38):
They are not considering that. Where have you read that?

See below.
Quoting mjoelnir (Reply 40):
I am amazed at the invalid criticism.

Lol, ok.

This thread was started based off an article written by a German. But yet it was written off to us "dumb Americans".

At any rate, how is your opinion any more valid than mine is considering you're obviously biased(in the other direction) yourself?


Quoting mjoelnir (Reply 40):
How much do you think it will cost to shut down the A380 production while there are still confirmed orders to be delivered?

How much money could they be making utilizing the same resources devoted to a program that's a sure home run instead of keeping the A380 program on life support?

Quoting mjoelnir (Reply 40):
Do you really believe it does not cost anything to shut down such a production line? Or is that not what you are advertising?

So it makes more sense to sustain a program that's losing money otherwise? Not a chance.

Quoting mjoelnir (Reply 40):
You guys have a bee in your bonnet regarding the shutting down of the A380.

Again, I wasn't the one that said it, Airbus's CFO said it at an investor's meeting:

http://www.businessweek.com/articles.../airbus-a380-big-plane-small-sales

"The dearth of orders for the seven-year-old plane led Airbus Chief Financial Officer Harald Wilhelm on Dec. 10 to raise the prospect of discontinuing the A380 as soon as 2018. Wilhelm’s remarks at an investor meeting in London riled customers who bet on the big plane. The next day, Airbus backtracked. Fabrice Brégier, who leads its airliner unit, told investors that upgrades to the A380—more fuel-efficient engines and a stretch version capable of carrying 1,000 passengers—will happen “one day.”

I'd imagine he would know better than anyone, so pardon me if I remain skeptical of the A380's business case for continued existence. The same day, Airbus's stock price dropped 10%, so evidently it isn't just us silly Americans that remain skeptical.
PHX based
 
tommy1808
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 8:26 am

Quoting mjoelnir (Reply 40):
How much do you think it will cost to shut down the A380 production while there are still confirmed orders to be delivered? With compensating both the customers and suppliers for breach of contract the first for non delivery and the second for not taken the ordered items.

And maybe much more important: how much will it cost to lose all those A380 customers to Boeing. Since no A380 operator uses it for its low CASM, but for its size and the Premium revenue it can generate, those customers won´t have any other choice but buying the next biggest aircraft. And that ain´t an Airbus.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
abba
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 8:34 am

Quoting ChinaClipper40 (Reply 30):
With respect, the doomsday predictions about the demise of the A380 are basically Euro-centric and America-centric, in that they ignore (as Europeans and Americans with blinkers on so often do) important fundamental facts regarding demographics and infrastructure on the other side of the planet from Europe and the United States:

   Spot on. Finally a nice piece of analyses

Quoting planesmart (Reply 32):
I think posters who have not spent extended periods in India and China in the last 30 years, and again more recently, do not comprehend the economic size and rate of change in these countries, nor their potential for future growth.

The first time I was in Guangzhou (Canton in the old days) was in 1989. At that time you only saw cars in the streets rarely and couldn't get a proper taxi from the railway station to your hotel. I believe that the White Swan Hotel was the tallest building in town....

Quoting par13del (Reply 33):
By 2030 the current A380 will be 20 years old, the NEO or 900 will be slightly younger, I would expect that if the market is shaking out in those terms that new build a/c will appear, both from Airbus and Boeing.

Highly unlikely as both Boeing and Airbus about that time will be very busy developing the successors for the 737/320. And after that Boeing might go for a new 777x and Airbus for a new 330. I find it highly unlikely that the 380 will get any new developed competitor in the next 3 to 4 decades.
 
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seahawk
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 9:37 am

Demographics alone are no indication. Surely the demand for air travel will increase, but China is also building airports, so the increase could be achieved by increasing frequencies which favours smaller planes. Imho the industry has decided that in general they prefer frequency over capacity. Which actually makes sense. In a time of quickly changing demand flying 2x400 seats is easier than 1x600, as you can offer more seats when the demand is high and just drop one flight when the demand is low.
 
81819
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 9:42 am

Quoting seahawk (Reply 45):
Demographics alone are no indication. Surely the demand for air travel will increase, but China is also building airports, so the increase could be achieved by increasing frequencies which favours smaller planes. Imho the industry has decided that in general they prefer frequency over capacity. Which actually makes sense. In a time of quickly changing demand flying 2x400 seats is easier than 1x600, as you can offer more seats when the demand is high and just drop one flight when the demand is low.

....or if we look at the experience with Cathay and their 777's they fly two differently configured aircraft within hours of each other. In other words they can adjust the mix of premium and economy seats by simply swapping one 777 for another.
 
tommy1808
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 9:44 am

Quoting seahawk (Reply 45):
so the increase could be achieved by increasing frequencies which favours smaller planes

Afaik the bottleneck in China is the airspace and much less the airports, and that is a little more difficult to address.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
mjoelnir
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 10:50 am

Quoting 777stl (Reply 42):

Just again how much would Airbus have to pay Emirates for cancelling the delivery of 80 A38ö if Airbus would close the line tomorrow? 10 million USD per frame, 50 million per frame? Years of litigation and a big customer never buying Airbus again?

How would you in the real world compensate that, how would that lead to more sales of A320, A330 and A350?

Have you any example of an producer tanking a production line while they have enough orders? Why is Boeing still producing the B747-8, losing money with every frame? Very simple, because it would cost more money to close down the production with outstanding orders unfilled than producing the frames already ordered.

If Airbus has in 5 years no more orders to fill of course they close down the A380, but doing it now would be financial suicide for Airbus.

And I imagine you would dance if Airbus would close down the A380, thinking of all the B777 Emirates would buy instead
 
NAV30
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RE: Airbus Considers Ending A380 Production - Part 4

Sat Dec 27, 2014 11:05 am

Quoting mjoelnir (Reply 48):
If Airbus has in 5 years no more orders to fill of course they close down the A380, but doing it now would be financial suicide for Airbus.

I don't think Airbus has any alternative but to produce and deliver on all current orders - unless the customers concerned opt for different models.

On the other hand, I do think that they should stop taking orders for yet further fours. There is no room for doubt that all four-engined aeroplanes - including both the A380 AND the B748 - are out of date and production will have to be discontinued as soon as ever possible?

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