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StTim
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RE: The A380NEO Thread Part 2

Sat Jan 03, 2015 10:06 pm

I must admit I used to like flying the kangaroo route on the same plane - so you could leave your hand luggage on board whilst going to the lounge for a shower and a change of clothes. Very civilised.
 
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speedbored
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RE: The A380NEO Thread Part 2

Sat Jan 03, 2015 10:19 pm

Quoting StTim (Reply 100):
I must admit I used to like flying the kangaroo route on the same plane - so you could leave your hand luggage on board whilst going to the lounge for a shower and a change of clothes. Very civilised.

I agree but BA (and probably others) stopped allowing that a few years ago, unfortunately. Even when both legs are the same aircraft, you now have to take everything off at SIN. Security concerns, apparently.
 
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Matt6461
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RE: The A380NEO Thread Part 2

Sat Jan 03, 2015 11:35 pm

Quoting speedbored (Reply 93):
Quoting Matt6461 (Reply 64):
We usually hear at least some rumors about potential buys. I haven't heard any - have you?

Actually, what I hear makes me think a lot of people might be eating a lot of humble pie shortly after Le Bourget this year.

VERY interesting. Can't wait.

Quoting speedbored (Reply 93):
Quoting Matt6461 (Reply 64):
Plus those Skymark white tails haven't been taken up, though they are still in litigation.

Do you have any evidence that they have even been offered to anyone yet? Knowing Airbus, I would be very surprised if they start trying to offload them until they have got a lot closer to settling things with Skymark.

Richard Anderson said no publicly, and made some disparaging remarks about the A380 along the way. http://www.flightglobal.com/news/art...ce-delta-on-a380-economics-400373/ But ya know - this quote might be pre-Amedeo. So probably I was wrong in thinking this came as a response to Lapidus. Point conceded.

Lapidus also stated: "We will expand and broaden the base for this aircraft and it will happen this year.” In the Leeham article I discussed earlier there's an interview with Lapidus in which he seems pretty downbeat about his sales efforts so far. He doesn't predict any imminent sales in that article.

And yeah I'll concede that it might be premature to expect placement of the Skymark frames by now. Litigation is ongoing, Airbus may have strategic reasons not to rush to mitigate damages by selling to another airline.

Quoting speedbored (Reply 93):
Quoting Matt6461 (Reply 78):
Can you tell us, in your professional opinion, what relevance, if any, fuel efficiency has on the A380's sales prospects?

Of course it does, it is one of those factors that will affect how much profit an airline can squeeze out of a frame. But it doesn't mean that the most profit can be achieved by always using the aircraft with the lowest fuel consumption.

I don't think anyone is arguing this. Just off the top I'm taking the Leeham suggestion that the A380NEO has better CASM despite being worse on fuel.

Still, if we look at airliner competitions historically, the more fuel-efficient bird generally wins in head to head competitions. That's not true if we compare different payload/range profiles, as I've argued to others in previous posts. And it's also not true if other cost factors outweigh fuel efficiency as with A380NEO. A fully depreciated A340-300 is about as good on CASM as a brand new 787-9, for example, and LH is using the 343 for its new "lower cost" long haul op. I would agree that we can't know which of those two planes would be preferred without knowing some deep level of detail, but I don't think we have to more than the fundamentals of airliner performance and economics to know that, were Airbus still building the 343, a new 787-9 would be preferred 100% of the time.

[Edited 2015-01-03 16:02:37]
 
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Matt6461
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RE: The A380NEO Thread Part 2

Sat Jan 03, 2015 11:50 pm

Quoting speedbored (Reply 93):
Again, Leeham were taking the simple, easy, broad-brush approach. Might or might not be close to reality but totally ignores the (not insignificant) costs associated with switching from one aircraft type to another, which may need new ground equipment, and maybe different third party handlers at outstations.

I don't deny that this is a factor for an airline's purchasing decision. But this factor, along with airport lounges, crew training, diversions for maintenance, etc. - all of them appear not to be correlated* with the broad aircraft performance metrics we're discussing. So yes, it means the picture we get is a little more fuzzy. But if they really are uncorrelated, then, again, they're just noise that obscures - but doesn't kill - the signal sent by the fundamentals of cost and revenue. A signal that, taking a higher view of commercial airliner success, has so far broadly explained the success or failure of certain models.

I'll just state some of the obvious:
-77W and A346 are similar on range/payload and capacity profile. 77W kills the A346 because it's cheaper to fly.
-A35J kills the 77W because it's cheaper to fly and roughly similar.
-77X is cheaper per seat than A35J but only a little and it's bigger, so it doesn't kill it.

I could go on but the point should be clear - I still don't see how it can be argued that we are far off base by talking CASM and capacity levels, given this demonstrable history. Maybe the difference is that you're in the weeds of individual airline purchasing decisions, whereas the cost/capacity/revenue signal doesn't emerge from that noise until you take a program-wide view. At that level, the picture seems pretty clear.

[Edited 2015-01-03 16:14:04]

*diversion for maintenance would probably be correlated with CASM metric somewhat. To the extent that the missing variables are correlated with broad performance metrics, their absence from an abstracted analysis is less important.


[Edited 2015-01-03 16:17:08]
 
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SEPilot
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 1:20 am

Quoting brilondon (Reply 86):

That is not entirely true. The Boeing 747 was a result of Boeing and PA designing a replacement for the 707 based on the design of a military transport aircraft,

The only part PA played was Juan Trippe promised Bill Allen that if Boeing would build it, PA would buy it. PA was extensively consulted during the design, but they had no financial participation in it. And both Boeing and Airbus have consulted heavily with airlines on all new and revised airliners, so there was nothing unusual here, except for the degree of influence PA had on the 747. But to say they had a hand in designing, developing, or financing it is wrong. And it took nothing from the military transport; that was a totally different aircraft (high wing, T-tailed, and much slower.)
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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Matt6461
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 1:47 am

Quoting speedbored (Reply 93):
Quoting Matt6461 (Reply 78):
Airbus was certainly way off on its sales projections.

Actually, at the time they made their projections, I think they were pretty close to correct.

Maybe we have different definitions of "pretty close." This post has some old sales projection figures:http://www.pprune.org/spectators-balcony-spotters-corner/124821-boeing-takes-poke-airbus-a380-sales-propjections.html

Airbus was anticipating 1,100+ sales over twenty years from 2005 - about 55/year. Even the 2007 revised production schedule saw a rate of 45/year. Even in 2011, Airbus' internal projections saw 630 sales. http://www.flightglobal.com/news/art...asts-630-total-a380-sales-356543/. The lowest forecast of 190 deliveries by 2013 was too optimistic. It's now 147 at 2014's end. Total sales, taking out dead orders, are no more than 300. If Airbus moves all CEO commitments to the next five years and builds at 30/year, it will have delivered ~300 by decades end. That seems unlikely and even that is far less than half what Airbus predicted.

Quoting speedbored (Reply 93):
But the world has changed a lot since then, for some reasons that no-one ever predicted.

Boeing certainly projected that market fragmentation would denude sales. Many, many people who were considered irrationally hostile to the A380, such as Richard Aboulafia, predicted sales that turned out about true. Aboulafia actually predicted 400 sales by 2025. Without a NEO, he'll probably be too generous. He also said this:

Quote:
The A380 "was never a good idea", according to Richard Aboulafia, vice president of the Teal Group consultancy. "In fact, it was a very bad idea, one of the worst self-inflicted wounds in aerospace history. The market wants range and efficiency; capacity for capacity's sake is not wanted at all," he said. The A380's four jets are a disadvantage, he said, as twin jets "can do most of the job in terms of range and seat count... Airbus made its problem worse by designing an aircraft that's extremely heavy, even for its seat count."


I actually agree/disagree with Airbus, Aboulafia, and Boeing. I agree that "capacity for capacity's sake is not wanted at all" - I think this is at least a true statement regarding VLA's for the foreseeable future, and its correctness should have been painfully obvious in 2000 when Airbus launched the A380.

I disagree on the broader point that the A380, as a VLA, was doomed to fail. It wasn't, and might yet succeed. Airbus knew, in 2000, that a folding wing option would reduce fuel burn by 11%. Combine that with forgetting the stupid stretch idea and optimizing for the -800, and they could have had an A380 with 20% better fuel burn. I believe Aboulafia correctly accused Airbus of stupidly pursuing capacity for capacity's sake, but I also think it's stupid to ignore the fact that a double-deck VLA can provide economies of scale that justify its size. It's also not very smart to say quads are always worse than twins, especially for larger aircraft. An A388 with 20% lower fuel burn would have sold at a profit over the last ten years. I also believe that an A380 with only 10-12% better fuel burn is a dubious value proposition in the next decade. I base that judgment off of the broad trends of efficiency versus capacity that the airliner market shows.

If Airbus wants to make a profit looking forward, it has to make the plane dramatically more efficient. My judgment is that the A380X is the only option besides program termination to make a profit. A NEO will keep it limping along, but won't be profitable.

[Edited 2015-01-03 17:53:16]
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 2:10 am

Quoting Matt6461 (Reply 105):
My judgment is that the A380X is the only option besides program termination to make a profit.

Re-winging the airplane sounds like an astonishingly expensive proposition, with a high probability of people whining about the lack of growth potential of the aircraft, come 2025 or so. The NEO will keep the A380 going just long enough for worldwide demand to grow into the aircraft's sweet spot, around 750 seats. While the sizing of it was premature (with the benefit of hindsight), re-winging now with a smaller wing would be a late reaction to a problem that will be a decade out of date by the time the solution is fielded. Better just to hunker down.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 2:21 am

I wish we had more threads like this one, it's kind of like airline buyers sitting around having a few pints and talking shop. I'm thoroughly enjoying it thus far even if I only understand about 50% of what you guys are talking about. Please keep it up and thanks for the education.
 
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Matt6461
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 2:47 am

Quoting WingedMigrator (Reply 106):
Re-winging the airplane sounds like an astonishingly expensive proposition, with a high probability of people whining about the lack of growth potential of the aircraft, come 2025 or so. The NEO will keep the A380 going just long enough for worldwide demand to grow into the aircraft's sweet spot, around 750 seats. While the sizing of it was premature (with the benefit of hindsight), re-winging now with a smaller wing would be a late reaction to a problem that will be a decade out of date by the time the solution is fielded. Better just to hunker down.

I disagree re 750 seats but I used to think along the same lines. Here's why I changed my mind:

-the big step in efficiency comes from a double-decker layout. An optimized re-winged A380 should be about 30% better than 77X on COC. I've started some analysis of this here: Revised, Optimized A380-8X Part One: Weight Est. (by Matt6461 Dec 14 2014 in Tech Ops). I'll get to the other posts in my planned series once I figure out how to post screenshots (any help would be appreciated!).
-Efficiency gains from stretching are "normal" gains - not the game change that an optimized double decker creates.
-the bigger the plane is, the more niche is its market. Even if, in the future, the market would take 30 750-seaters per year, nobody is going to build a clean sheet VLA for that market. So an A388X gets that market anyway. BUT, if you target the 750-market, you don't necessarily get the 550-seat market because a smaller plane might beat you.
-by staying around 550 seats, trip costs stay low. Only about 10% more than 77X. That gives it a ton of appeal.

Regarding cost - yes it would be expensive. I won't argue the whole case here but I think a 550-seater with 10% higher trip costs than a 77X would sell enough frames, and with sufficient monopoly pricing, to close the business case.

I don't think Airbus will do it, however. Among other things, they'd have to admit that their whole strategy on the A380 - focusing on a monster stretch - was wrong. That would be tough.
 
RickNRoll
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 3:29 am

Quoting brilondon (Reply 86):
First the A380 is an aircraft that is a niche aircraft and only has a few routes on which it can make money.

How many routes is Emirates using it on?
 
29erUSA187
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 3:38 am

Quoting RickNRoll (Reply 109):
How many routes is Emirates using it on?

The real question is how many are profitable. DFW is a big no. I think Qatar and Etihad nailed it on the head with the 787 and A350. The A380 is just too much Airplane, I doubt that a capacity will do anything to help.

I hate to say this, but the age of the VLA is done. Its now the age of the VLT (Very Large Twin) and airbus needs to adapt or be left in the dust by Boeing and the 77X
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 4:07 am

Quoting 29erUSA187 (Reply 110):
I hate to say this, but the age of the VLA is done. Its now the age of the VLT (Very Large Twin) and airbus needs to adapt or be left in the dust by Boeing and the 77X

I don't even think that the 779 will be the smash hit that the 77W was; the A3510 is a very solid competitor, and I think will take about 60% of the sales between them. The efficiencies are very close, and from what I have seen most airlines favor the smallest plane that gives the best efficiency. While the 779 does seem to offer slightly better efficiency and more payload, the A3510 is lower risk, and I think will do very well. I do not think at this point Airbus needs to do anything to counter the 779.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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speedbored
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 9:16 am

Quoting Matt6461 (Reply 105):
If Airbus wants to make a profit looking forward, it has to make the plane dramatically more efficient.

New engines and a few minor tweaks would be enough. A -900 stretch would be killer.

New wing? Will never happen - far too expensive.

Quoting Matt6461 (Reply 105):
My judgment is that the A380X is the only option besides program termination to make a profit.

Please do enlighten us as to how exactly Airbus would make a profit from terminating the program.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 9:36 am

Quoting 29erUSA187 (Reply 110):
The real question is how many are profitable. DFW is a big no.

Do you have anything to back this up??
 
parapente
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 9:42 am

Its very early days to see the full impact of the A380 when only half of the first sales round of 300 aircraft built. Yes perhaps BA could have bought a few more - perhaps they will take up their options and of course LH bought some 748's and 77X's but generally speaking,sales were as expected I believe.
But nearly all the traffic appears to be TATL hubbing to Asia/Far East.( Yes Qantas is flying them to N America)

But it seems (to me) that the Pacific rim has largely ignored the aircraft. Huge population centers from China/Japan/Korea/Singapore etc to huge population centers such as Vancouver/Seattle/SF/LA (and further inland) etc don't seem to fit the A380 model.
As a Brit I have no knowledge of the vast trans Pacific (rim) markets,I would have thought the 380 could do well (obviously not) just wonder why.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 9:45 am

Quoting speedbored (Reply 112):
A -900 stretch would be killer.

Killer of Airbus' bottom line. Takes the A380's biggest liability and make it worse.

Quoting speedbored (Reply 112):
Please do enlighten us as to how exactly Airbus would make a profit from terminating the program.

Hurried writing. Should have read: Assuming Airbus is sticking with the plane - setting aside program termination - the only way to make a profit...

If Airbus does a NEO now, they're going to have to put a new wing on the plane someday anyway - if they ever want to make a profit. Might as well do it now. Its development plate for projects with early 2020s EIS is pretty light. Later in the decade it needs to respond to NSA/MOM from Boeing. Now's the time.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 10:51 am

Quoting Matt6461 (Reply 115):
If Airbus does a NEO now, they're going to have to put a new wing on the plane someday anyway - if they ever want to make a profit.

Putting a new wing on would almost certainly guarantee that they will never make a profit. Wings are the most expensive part of an aircraft to develop. Putting a new wing on now would likely cost about half of what the entire airframe cost to develop in the first place, for marginal benefits.

The current wing, with a few minor tweaks, is perfectly adequate for the NEO and for any future stretched and higher MTOW variants.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 11:13 am

Quoting Matt6461 (Reply 115):
Killer of Airbus' bottom line. Takes the A380's biggest liability and make it worse.

If you want to compare it to smaller planes, it means it is too big, but for the routes that fit it, the size is what makes it work. The plane is already designed to be stretched in regards to the most expensive items that would have to be modified, such as the wing.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 11:19 am

Quoting 29erUSA187 (Reply 110):
The real question is how many are profitable. DFW is a big no. I think Qatar and Etihad nailed it on the head with the 787 and A350. The A380 is just too much Airplane, I doubt that a capacity will do anything to help.

You didn't answer my question.

Emirates seems to have the ability to put 'too much plane' and a router and over time make it enough plane. Otherwise they would have gone broke years ago.
 
astuteman
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 11:43 am

Quoting Matt6461 (Reply 115):
If Airbus does a NEO now, they're going to have to put a new wing on the plane someday anyway - if they ever want to make a profit. Might as well do it now. Its development plate for projects with early 2020s EIS is pretty light. Later in the decade it needs to respond to NSA/MOM from Boeing. Now's the time.

Matt, firstly let me say that although I might disagree with some of the points you raise, it's refreshing to see someone proactively discussing possible solutions to shortfalls for this aircraft, instead of just dismissing it as a historical sideshow. for that you have my respect.

We have had some discussion about the complexity of the investment decisions made by airlines, and some recognition that it's not all about CASM or RASM, as this excellent comment from Kanban relates..

Quoting kanban (Reply 94):
I have heard of sales discussions that were not about CASM/RASM but about ease of engine changes, fueling, cargo hold loading/unloading, catering ease.. One could have the greatest revenue producer when flying that loses any advantage in crewing, airport turn-around, and maintenance..


I strongly believe that the posters claiming that "only 21 airports will ever be able to handle an A380" were talking out of their a**e.
However, the rhetoric hides a real issue for me in that the A380 IS a difficult plane to accommodate.
It has stretched many boundaries in what airports can handle or not.
Where the sceptics are usually wrong is in seeing today as a permanent situation.
I think history is already showing us that ever so slowly, more and more airports will gradually accommodate more and more A380 movements.
But only very slowly..

I'd LOVE to see a 90m high AR folding tip CFRP wing on the A380, as you know from our discussions on the tech-ops threads.
My concern is twofold.
Firstly, producing a plane that is "code G" on the runway and with the same "fold-away time" issues as the 777X might experience to me just exascerbates an already serious handling issue.
I just don't think enough airports will be capable in time to support it for the A380NEO in this timeframe.

Secondly, amongst all the CASM/RASM arguments, we always seem to lose sight of the fact that one of the key financials that airlines absolutely DO use in investment decisions is ROI, or NPV.
I don't know why we miss it, but it will encapsulate all of those ancillary issues like maintenance, availability, ease of handling, and acquisition cost.

Adding the "wonderwing" will unquestionably increase the capital cost of the aircraft considerably, a factor which may well undercut much of the fuel burn gain that it would deliver, when considered from the airlines viewpoint on an NPV basis.

And it WILL stretch airbus resources at a time when they've already laid down a marker on cashflow for the next few years.

For those reasons I don't think the time is yet right for this wing.
assuming the NEO does go ahead, and the programme continues, I see this wing being an option for the 3rd iteration at the end of the next decade.

Rgds
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 12:09 pm

Quoting wingman (Reply 107):
it's kind of like airline buyers sitting around having a few pints and talking shop.

You couldn't be further from the truth.

My opinion of the A380 as an airline employee in management is we'll evaluate it again in 10 years. It's an aircraft ahead of the market.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 12:54 pm

Quoting ChaosTheory (Reply 120):
My opinion of the A380 as an airline employee in management is we'll evaluate it again in 10 years. It's an aircraft ahead of the market.

That's certainly the sort of message that I hear a lot.

The challenge for Airbus is keeping the production line going at reasonable cost until the market "catches up". But I'm sure Emirates will go a long way towards helping them with that.
 
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par13del
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 1:06 pm

Quoting ChaosTheory (Reply 120):
My opinion of the A380 as an airline employee in management is we'll evaluate it again in 10 years. It's an aircraft ahead of the market.

The concept may be but the technology is not, so in 10 years time what exactly do you expect the A380 to be, same and fuse but Advance Engine?
 
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Revelation
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 2:14 pm

Quoting seahawk (Reply 5):
But in the end, the fact remains that the A380NEO is probably the only application for the Advance engine before Ultrafan is ready and there fore the best bet to regain some of the money spent on engine development starting with the 777X offer.

As others have said, most corporations spend on R&D regardless of the outcome, and in many times it's funded by governmental sources. For instance:
http://www.cleansky.eu/content/homepage/about-clean-sky-2

There is large spending associated with doing one-off prototypes like we see RR doing with its composite fan, but the truly huge spending comes when they have to scale it up for production. Also a lot of simplifying assumptions one makes when doing the R&D need to be revised when you are building something you expect to sell.

Quoting seahawk (Reply 6):

There is another option, that makes even more sense. Drop the A380. The time and money needed for a A380X can be used for a A322, A3511 and by 2025 the single aisle family will need looking at as well.

I think Airbus will keep the line open as long as feasible, but I also have to wonder if there isn't a better place to spend the money.

Quoting Matt6461 (Reply 7):
Europe gave them billions to build it. If they close the line now, it'll look like they took those billions and Europe got nothing back. It'll make it harder to get future launch aid.
No one is suggesting they shut down the A380 line now. It's a "reduction to absurdity" argument some are throwing out to churn things up. The real question is what will the future be in the 2018+ time frame.

Airbus got RLI for the A350 after the A380's "less than smooth" intro. It's hard to see how they would not be offered it again.

Quoting speedbored (Reply 67):
I have consulted for many different airlines on many different aircraft acquisition projects and not once, ever, have I encountered RASM or CASM being used as any part of the airlines analysis. Why not? Because aircraft have a whole load of fixed costs that don't change depending on how many seats you sell or miles you fly and it is these that can make the difference.

What the airlines do is detailed analysis of the markets airports and routes they serve (or want to consider serving) and then run many thousands of "what if" permutations of aircraft type, cabin layouts, schedule timings, etc. and analyse the total costs and revenue that each permutation will generate. This will identify which aircraft/cabin/schedule/etc best suits each route. They almost always develop their own proprietary software to assist with this.

These days, very few airlines assign specific aircraft for each route and, instead, use pools of aircraft to allow them to maximise schedule efficiency and aircraft utilisation. And that is where things can get really complicated with additional analysis of the interactions to determine the best fleet makeup.

And by "total costs", I do not just mean the cost of buying/leasing the aircraft plus the trip costs. Airlines include EVERYTHING, including things such as training, maintenance (including trip costs for off-base maintenance), ground handling/equipment, diversions, emergencies, de-icing, cleaning, etc. etc. I have even seen the costs of airport lounges/lounge upgrades included in some analyses.

I wish I could publish some examples but I always have to sign client confidentiality agreements and I am not going to risk having to repay £100k's of fees by doing so.

Excellent for you, but I don't know what we here at a.net are going to do with the situation. It's not likely the average member would have access to the resources needed to run thousands of variations of such parameters across thousands of routings. I could just imagine the squawking if someone tried. We'd see claims of not factoring in cost, weight and drag of the wi-fi setup relative to its earning potential, etc. It'd never end. And then some one (not picking on you here) would show up and say they are sure we're doing it all wrong because they have access to closely held information but of course they can't share it without putting their livelihood at risk.

Quoting kanban (Reply 94):
As mentioned several times and ignored with the normal "blinders" on discussion style, is that the airlines have many metrics to consider when determining the fleet make-up. A.neters seem to have only two and they are statistical lords of the heavens.

I presume that is because those parameters are the ones we have access to, via filings to the USA DOT and similar agencies. As above, if members went too far beyond the basics, it'd lead to endless squawking.

Quoting Matt6461 (Reply 85):

The simple fact that Airbus chose this financing structure means it was the best financing option. That means it was better than any option Airbus had in the capital markets. This is all I mean by subsidy - any sort of financing help from a government that isn't available through capital markets.

Yes, that's a pretty straight forward truth that's hard for some to recognize. To me, it's just a form of "social endorsement" that is just a part of the way things are done in that part of the world, just like there are differences in the way things are done in the US such as bankruptcy law that others outside of the area have a hard time accepting.
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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Matt6461
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 2:52 pm

Howdy Astuteman, glad to "see" you again.

Quoting astuteman (Reply 119):
We have had some discussion about the complexity of the investment decisions made by airlines, and some recognition that it's not all about CASM or RASM, as this excellent comment from Kanban relates..

Quoting kanban (Reply 94):
I have heard of sales discussions that were not about CASM/RASM but about ease of engine changes, fueling, cargo hold loading/unloading, catering ease.. One could have the greatest revenue producer when flying that loses any advantage in crewing, airport turn-around, and maintenance..

These are valid points but I've always incorporated most of them - I think the most significant points are explicitly part of CASM (crewing, maintenance). Some of them - e.g. engine maintenance - I think we can broadly model: I just assume that it's roughly proportional to thrust at constant technology level (higher-temp cores have higher costs), plus some delta for engine arrangement. A good post in TechOps that agreed broadly with this, subject to operator preferences for risk allocation vis a vis third party maintenance providers.

Airport turnaround time could also be modeled, I posit, by escalating crew and capital costs by the amount of time turning versus average mission flight time. Maybe don't escalate flight crew costs - they're not back there cleaning and shooing people off (although they're often saying "hi" to deboarding passengers, wonder if that's "on the clock").

Catering ease - you got me. No ideas there, but also no idea why it would be worse in any direction that affects our discussion. Cargo unloading - wouldn't it just be proportional to cargo carried? But yeah, there are idiosyncrasies (e.g. door layouts) that throw in some variation. Ease of engine changes - maybe apply a penalty to tri-holers, if any are still around, but don't see how it would vary massively with most planes.

Anyway there are things that we (I, specifically) can't quantify precisely or even approximately. But unless they run in some direction for or against trends that we're discussing - aren't they just noise? The noise might overwhelm the trend in some cases. If we were talking 77X vs. 35J, where CASM is 2-3% apart, I frankly would have little idea about who buys what. Seems like that market will split, I don't claim to have much to add there. Maybe caterers hate the 777 layout so much that you pay a 300% premium to feed pax. But on the A380 - CEO, NEO, or X - the discussion is very gross and goes to fundamentals. Here I think we can abstract from details and ask what I think is the fundamental question - how efficient does an A380 (or any VLA) have to be in today's market, in order to sell well?

I am of the somewhat tentative, but mostly convinced, opinion that a 5% CASM edge, standing alone or even in combo with a 5% RASM advantage, wouldn't justify a 50+% bigger plane in today's market - or even next decade. I am also mostly convinced that a 30% CASM advantage would justify a 50% bigger plane. And yes, CASM itself is a gross measure. But at the broadest level of generality, bigger planes need to fly more cheaply per seat. I see that as a necessary condition, alongside of which other necessary conditions coexist as well. There are times when the condition perhaps doesn't apply - when an airline needs exactly 550 seats from a given slot, for example. But I take it as well-demonstrated that this is a very rare occurrence and that basing the A380 business case off of it is a recipe for marginality. Which means we have to attract A380 buyers by efficiency (or some other strategy*), so routes are reorganized for it, rather than waiting for the world to start flying 500 at a time routinely.

*This diversion isn't directed at you, Astuteman. The other strategy proposed here is RASM focus. I want to clarify that I think this strategy complimentary to CASM, not opposed. Proponents of this strategy, imo, don't confront that RASM strategies, by reducing seat count, have implications on trip revenue versus trip cost - i.e. profit. Trip revenue= RASM*seats, and trip cost=CASM*seats, while trip profit= (trip revenue)-(trip cost). When an X% reduction in seat count yields less than X% increase in RASM, then trip revenue decreases. Planes can accept trip revenue decrease only to the extent that their CASM leaves room for profit. I argue that real-world airliners are in the domain where X% reduction in seat count yields less than X% increase in RASM. By this I mean that doing 9-abreast Y on an A380, or 8-abreast on an A350, or 1-1 J class in a widebody, would lower trip revenue. If this is broadly true, then only a plane that starts with a significant CASM advantage can configure its cabin to focus on RASM (I also recognize an intrinsic RASM advantage from, e.g., wider Y seats at 10-abreast for A380). And its space to lose seats and trip revenue faces the constraint of its CASM edge: If A380's CASM is 10% lower than 77W's CASM, its "comfort strategy" trip revenue better not fall below 90% of what an airline could make with a full densely-configured plane. But the better it is at CASM, the more room it has to pursue RASM strategies. If A380 was 45% better on CASM (not saying it's possible), then maybe economy gets a couple bars and the window seats give way to a jogging track. These strategies aren't opposed, they're complimentary. But the RASM strategy is only available where CASM is better in the first place (assuming similar baseline seating density).

Quoting astuteman (Reply 119):
I'd LOVE to see a 90m high AR folding tip CFRP wing on the A380, as you know from our discussions on the tech-ops threads.
My concern is twofold.
Firstly, producing a plane that is "code G" on the runway and with the same "fold-away time" issues as the 777X might experience to me just exascerbates an already serious handling issue.
I just don't think enough airports will be capable in time to support it for the A380NEO in this timeframe.

You might be right. My gut is that, if Airbus wanted to make this happen, they'd be as capable of making it happen as Boeing with the 77X.

But I wish I had started the A380X discussion with a wing and winglet that fits the 80m box. I've modeled that too. By going to CFRP and reducing wing area to ~6900ft2, it saves tons of weight. It's within 3-4% of the wonderwing, which is much heavier. Bigger, costlier to maintain, engines for takeoff though. I'd still make the case for A380X even if "Code G" runway configuration were off the table... Maybe I'll do 4 posts in Tech Ops.  
Quoting astuteman (Reply 119):
Secondly, amongst all the CASM/RASM arguments, we always seem to lose sight of the fact that one of the key financials that airlines absolutely DO use in investment decisions is ROI, or NPV.
I don't know why we miss it, but it will encapsulate all of those ancillary issues like maintenance, availability, ease of handling, and acquisition cost.

I don't understand this point. What is the investment from which you're computing ROI? Is it airplane purchase value versus projected future profit stream from the purchase investment? If so, I'd disagree. Except for credit-poor airlines, purchase price is easily transferred into operating cost via lease or other capital markets structures (bonds, secured commercial paper, sell/lease-back).I pointed out earlier that a fully-depreciated A343, for example, is about as efficient as a sticker-price 789. DOC/CASM would say "meh" between them. But ROI would see that A343 as 30 times better than the 789 if you plucked the A343 for a few million. That doesn't seem like a better representation of the economics. ROI would come into play when an airline doesn't have enough funds to buy all the planes it wants. In that case, they'd need to buy the cheaper plane. But most airlines can access capital markets and leasing options.

And to be clear, I've never considered maintenance and capital cost ancillary. With crew they're the biggest parts of the 40-70% of (long-haul) DOC that is not fuel. Maybe most of our misunderstanding stems from not specifying terms when I say CASM. I am using direct operating costs (DOC) per seat, the primary components of which are Fuel, Capital, Crew, Maintenance, and Fees. Ground handling, for instance, I always thought to be a component of fees. Maybe not? Cash operating cost (COC) is just DOC minus capital cost. I sometimes use COC to discuss an OEM's pricing latitude for a plane, but always try to specify. Maybe we should say DOCASM and COCASM just for certainty.

[Edited 2015-01-04 06:54:52]

[Edited 2015-01-04 07:03:04]
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 3:09 pm

Quoting ChaosTheory (Reply 120):
My opinion of the A380 as an airline employee in management is we'll evaluate it again in 10 years. It's an aircraft ahead of the market.

What do you think management would do if Airbus presented a proposed version that had 30% lower operating costs (assume it's Airbus engineers and management, not some crazy dude in an online forum)? Whose trip cost was only 10% greater than a 77X? Would they give it a new look?
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 3:25 pm

Quoting Matt6461 (Reply 125):
What do you think management would do if Airbus presented a proposed version that had 30% lower operating costs (assume it's Airbus engineers and management, not some crazy dude in an online forum)? Whose trip cost was only 10% greater than a 77X? Would they give it a new look?

We will operate it eventually, even if it stays in its current unimproved guise.

The fuel savings from an A380neo variant wouldn't be significant for us as it would be operated on max 4-5 hour sectors where our market could support it.

If any of the ACMI operators pick the A380 up secondhand, then I could easily see it operating for us in the near future.
 
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 4:57 pm

Quoting astuteman (Reply 119):
Where the sceptics are usually wrong is in seeing today as a permanent situation.
I think history is already showing us that ever so slowly, more and more airports will gradually accommodate more and more A380 movements.
But only very slowly..

I think your point here is very valid. It is very likely that sometime in the future aircraft the size of the A380 will be in demand, enough to justify their development and production. The question is whether this will happen soon enough to save the A380. My personal opinion is that it will not, because I do not see it happening in the next 20 years. And that means Airbus will have great difficulty finding customers for the 25 to 30 per year that they need to cover costs, let alone recover the money that must be invested to make it viable. And the other issue is that by the time the demand is there, I believe that all aircraft will be composite construction, not aluminum. And hence it will really need a clean sheet design, and will also be a twin.
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RE: The A380NEO Thread Part 2

Sun Jan 04, 2015 6:48 pm

Quoting Revelation (Reply 123):
I presume that is because those parameters are the ones we have access to, via filings to the USA DOT and similar agencies

This is what leads to the "four blind men describing an elephant" analysis we so often encounter

Quoting Matt6461 (Reply 124):
Ease of engine changes - maybe apply a penalty to tri-holers, if any are still around, but don't see how it would vary massively with most planes.

Yes three holers had a issues with changing the center engine. However, as engines get larger, getting them to a site for an engine change vs maintaining engine inventories at more sites becomes an issue. Secondly having the equipment to remove the cowlings, engine becomes another.. a plane manufacturer and engine manufacturer that teamed up to create an engine change process that took 3 hours over one that took 5 hours (figures are for illustration only) would have an advantage. Yes a 4 holer has an advantage of smaller engines, and an ability to deadhead on three to a engine change site..

Years ago Boeing started doing computer simulations of maintenance actions to ensure accessibility and ease.. it is a selling point... the less time spent doing maintenance tasks, the more time allowed for revenue
 
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RE: The A380NEO Thread Part 2

Mon Jan 05, 2015 7:57 am

I remember an Airbus sales presentation from a long time back. They were forecasting that with x% traffic growth an airline would need A380 y times a day on a certain route.

I asked the question - why does the airline need to match the growth, rather than let prices rise? Airbus had no reply.

It is what we are seeing in the USA. Capacity control leading to more profits.

A380 is a great aircraft if you think the role of airlines is to carry as many passengers as possible. For UAE incorporated (and used to be Singapore Inc) this is the case.

The difference in Singapore (vs Emirates) is that the authorities decided to go the LCC route as a way of carrying more passengers to/ from Singapore.
 
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RE: The A380NEO Thread Part 2

Mon Jan 05, 2015 9:26 am

Quoting lutfi (Reply 129):
The difference in Singapore (vs Emirates) is that the authorities decided to go the LCC route as a way of carrying more passengers to/ from Singapore.

The "authorities" had nothing to do with it. These are independent airlines and make their own decisions based on purely commercial reasoning.
 
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RE: The A380NEO Thread Part 2

Mon Jan 05, 2015 9:29 am

Quoting lutfi (Reply 129):
I asked the question - why does the airline need to match the growth, rather than let prices rise? Airbus had no reply.

It is what we are seeing in the USA. Capacity control leading to more profits.

more profits lead to more competition though, lowers the price again.

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RE: The A380NEO Thread Part 2

Mon Jan 05, 2015 10:45 pm

Someone asked earlier for a quote from BA regarding its intent not to grow its A380 fleet:

Quote:
Airlines Group (IAG) chief executive Willie Walsh was quoted as saying “aircraft coming into Heathrow will generally be smaller” and has indicated that BA has no intention to grow its A380 fleet beyond 12 examples, despite an existing fleet of 43 747-400s.
http://www.aspireaviation.com/2014/1...-key-to-boeings-widebody-strategy/

Interesting that Walsh sees average aircraft size continuing to decrease at Heathrow. Presumably he means widebody flights.
 
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RE: The A380NEO Thread Part 2

Mon Jan 05, 2015 11:48 pm

Quoting kanban (Reply 128):
Quoting Revelation (Reply 123):
I presume that is because those parameters are the ones we have access to, via filings to the USA DOT and similar agencies

This is what leads to the "four blind men describing an elephant" analysis we so often encounter

So EITHER we get speedbored to give up on £100k's of fees and live in homeless poverty eating gruel whilst spending his days crunching numbers for us from a public library for the sheer joy of it (and also get the world's airlines to serve up all their internal data so he can crunch it), OR we use what we have and accept that it's amateur (or in the case of a few web sites, near-amateur since they seem to be able to get people to pay to participate) analysis done with quite limited data.

Personally, I find the argument that people shouldn't try to project based on the information they have because they aren't professionals with access to gobs of data and the tools and experience to analyze it is pretty pointless, given that this is an enthusiast site...
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RE: The A380NEO Thread Part 2

Mon Jan 05, 2015 11:55 pm

Quoting Matt6461 (Reply 132):
http://www.aspireaviation.com/2014/1...-key-to-boeings-widebody-strategy/

Interesting that Walsh sees average aircraft size continuing to decrease at Heathrow. Presumably he means widebody flights.

Wow, there are hours of Anet discussion topics in that article, saying the B777X seat count will soon be increased making the A380NEO decision more necessary if Airbus are to keep up, the A330NEO's performance is further from the B787's than Airbus would have you believe, etc. It is a long article, but interesting.
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 12:24 am

Quoting Matt6461 (Reply 132):
Someone asked earlier for a quote from BA regarding its intent not to grow its A380 fleet:

Quote:
Airlines Group (IAG) chief executive Willie Walsh was quoted as saying “aircraft coming into Heathrow will generally be smaller” and has indicated that BA has no intention to grow its A380 fleet beyond 12 examples, despite an existing fleet of 43 747-400s.
http://www.aspireaviation.com/2014/1...-key-to-boeings-widebody-strategy/

Interesting that Walsh sees average aircraft size continuing to decrease at Heathrow. Presumably he means widebody flights.

You talked about BA deferring or cancelling deliveries. Again BACK THAT UP instead of always coming with something else.

Quote out of the article you are quoting: "The A380 has worked so well for BA such that it brought forward 1 delivery from 2016 first quarter to 2014 fourth quarter". (I know it should be 2015 fourth quarter, but that journalist has everything so well researched)

I read in that article that Willy Walsh has indicated that BA will not grow its fleet beyond the 12 A380, but could the journalist have forgotten to add, "at this time"? BA has 7 options on the A380 and that does not indicate to me that BA is not adding some A380 some time in the future.
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 12:29 am

Quoting tommy1808 (Reply 131):

The "authorities" had nothing to do with it. These are independent airlines and make their own decisions based on purely commercial reasoning.

Actually in Singapore the CAAS had a policy of encouraging LCC & granting them route authorities, plus building LCC terminal. Compare & contrast to HK.
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 12:31 am

Quoting mjoelnir (Reply 135):
I read in that article that Willy Walsh has indicated that BA will not grow its fleet beyond the 12 A380, but could the journalist have forgotten to add, "at this time"? BA has 7 options on the A380 and that does not indicate to me that BA is not adding some A380 some time in the future.

Just as with the report on EY not adding any more A380-orders at present to its future fleet (while they only have received 1 A380 up till today), the words "at this time" or "at present time" are very important. And these words are too easily left out to draw any final conclusions regarding the future developments we will see at quite a few airlines.

[Edited 2015-01-05 16:35:07]
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 1:47 am

Quoting mjoelnir (Reply 135):
You talked about BA deferring or cancelling deliveries. Again BACK THAT UP instead of always coming with something else.

I didn't say that:

Quoting Matt6461 (Reply 41):
Most of the others (LH, AF, BA, VS, QF), are on record as wanting to cancel outstanding orders or are saying they don't want any more.

"OR are saying they don't want any more." You didn't read my post closely enough - no biggie, lots of text here by now.

Re whether they're saying they don't want more now or never: I never said never. But look at BA's current widebody order book and stated fleet replacement plans. They have 52 A350/B787's on order for delivery well into next decade. They've stated that the 787-10 and A35J are replacing the 744's. For the foreseeable future, their words and deeds seem to suggest they don't want more A380s.
------------------------

I never said the A380 doesn't work for some airlines on some routes. It clearly does. It works so well on some routes that BA moved up an order and EK wanted 50 more. I never said the A380 is a bad plane - as a passenger I love it and wish it was more common. But the routes on which it works are so rare that it hasn't sold very well and will continue to be a niche aircraft. There are very few routes on which its massive capacity escalation won't cause yield dilution that outweighs its marginal - if any - efficiency advantage versus smaller competitors. Unless a route can already support A380 capacity at decent frequency, the only way to turn a 77W route into an A380 route is to cut prices or offer a radically different passenger experience - one that will cause folks to opt for a connection over a direct flight.

The only way out of this low sales conundrum is to fundamentally change the aircraft's economics: to make it so efficient that cost savings outweigh yield dilution, or so efficient that you can offer radically more comfortable seating while still making a profit. This is a reality about VLA's that just must be faced. NEO won't be efficient enough to do so, especially now that the 77X is in the mix. We probably need the A380 to get 20% more efficient to broaden its market appeal.

[Edited 2015-01-05 17:48:37]

[Edited 2015-01-05 17:52:09]
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 2:01 am

Quoting Matt6461 (Reply 138):
But the routes on which it works are so rare that it hasn't sold very well and will continue to be a niche aircraft.

One way to contrast the viewpoint I've been expressing with the predominant opposing viewpoint is:

"Opponents": All Airbus has to do is wait for traffic levels to increase to the point where A380s make sense on more routes. The 5% total improvement a NEO would bring will keep it going until then.

Me: I'm not sure that traffic will ever increase sufficiently to make the A380 profitable for Airbus, especially if point-to-point is nearly as efficient and becomes more common. But even if I accept your argument, why wait? Make the plane deliver on what should be game-changing double-decker economics now (well, 6 years from now).
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 2:23 am

Quoting Revelation (Reply 133):
Personally, I find the argument that people shouldn't try to project based on the information they have because they aren't professionals with access to gobs of data and the tools and experience to analyze it is pretty pointless, given that this is an enthusiast site.

This may be an enthusiast site, and as such people should recognize that business decisions are not made based on one (CASM) or two criteria (CASM/RASM) when there is a whole myriad of factors they consider.. that was my point. I do appreciate all the digging some do, however I will stick with the analogy in regards to some.
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 2:27 am

I'd like to take a poll of readers on this thread.

1. Do you believe that a bigger plane, in general, has to be more efficient?

2. Do you believe that there is any effect on yield of plane size? (generally speaking)

3. Do you believe that there is any effect on yield owing to frequency?

4. If you said yes to 1-3, and assuming the effects are negative for increasing plane size, do you think any VLA can sell well?

5. If you said yes to any of the foregoing, approximately what broad relationship do you see between efficiency (measured by CASM, RASM-CASM, ROI, or any other metric) and capacity for a given plane?

I'll go first. I say yes to 1-3. I think, generally speaking, capacity and loss of frequency negatively impact yields.

I say yes to #4. Here's where I split from guys like Richard Aboulafia, who almost perfectly predicted A380 sales and said in 2007 that Airbus should cancel the program. He was right about this version of the A380, but I think he's dead wrong about VLA's in general. He's also way too simplistic on quad v. twin. If a VLA is efficient enough, it would make business sense to accept lower yields, because you'd be saving so much in cost - or to trick out your plane well enough that per-seat yields would overcome higher tip/seat costs.

On number 5 here's what I see:
-The market looks to split between A35J and 77X. The former is ~3% worse on seat costs but ~7-8% better on trip costs.
-A359 and B787 are ~5-6% worse on seat costs than A35J, 10-15% better on trip costs.

This is a very gross evaluation, but broad market trends indicate that seat cost improvement is usually around 30-40% of trip cost increase. Therefore, in order for an A380 to be in line with market trends, at 50% bigger than 77X, it would have to be at least ~15-20% better per seat than its smaller competitor. That efficiency improvement would just put the A380 in line with the market trend for capacity/efficiency tradeoff. Because the domain in which that tradeoff makes sense shrinks with capacity, it might still be a niche aircraft even if it met the market trend. My judgment is the A380 has to beat the market trend - has to be more than 20% more efficient than biggest competitor - to convince airlines to reorient their routes around it. For that it needs a new wing, which is a different topic I've discussed elsewhere.

[Edited 2015-01-05 18:53:34]
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 2:50 am

Quoting kanban (Reply 140):
This may be an enthusiast site, and as such people should recognize that business decisions are not made based on one (CASM) or two criteria (CASM/RASM) when there is a whole myriad of factors they consider.. that was my point. I do appreciate all the digging some do, however I will stick with the analogy in regards to some.


TL;DR- This is a debate about fundamental paradigms, not details (VLA viability). The answers are clear given your paradigm. The world's two greatest experts disagree on the paradigm, so one group of geniuses is wrong. Because the experts disagree on the paradigm, and the correct answers are clear even to amateurs, given each paradigm, this is a valid subject for amateur debate.

-------------------------------------

This is all reminiscent of sports fans second-guessing their team's decisions, or discussing who is the best player. I'll use American baseball as an example.

We have a ton of statistics in baseball - we can quantify the sport to a greater degree than perhaps any other. Fans spend a lot of time debating things like - (1) "This guy sucks!" or (2) "We paid too much for this guy!"

Question (1) is a subject about which amateurs with limited information can have very good opinions. The distance between a player who sucks and one who does not is great. We can look at his stats, look at whether he's not such a complete asshole that he ruins team chemistry, and come to a reasonable conclusion on the issue. Babe Ruth, for example, did not suck. Anybody who knows anything about baseball can see that.

Question (2) is where the professionals have a decided edge. Teams win and lose, or are profitable or not, based on pretty thin margins. Team management has sophisticated modeling about a player's age and health, and a deeper modelling of statistics - especially for fielding - that fans just don't. Paying 10% too much for your players can be the difference between riches and ruin, but fans don't have the expertise for these kinds of decisions, generally.

I believe this debate is more like (1) than (2). We - I at least - aren't debating whether the A380 sucks, though some people think so. We are, however, debating very high-level, fundamental issues of performance. In this debate the answers are very clear, but differ with your fundamental paradigm. If you believe, as I do, that a VLA has to offer game-changing efficiencies (20-25%) to succeed, then the debate is easy: no reasonable analysis of the A380 sees it as that much more efficient than smaller competitors. If you believe (Airbus view) that capacity and frequency don't matter very much and a small efficiency edge is good enough, then the A380 will sell very well. If you believe (Boeing view- kind of) that VLA's and quads are just inherently stupid, then no efficiency edge ever could make the A380 not suck.

So I think amateurs have enough information to correctly decide, depending on which of the three foregoing fundamental paradigms is true. The debate is really about the paradigm, not the details.

Here's the thing: The two greatest agglomerations of professional knowledge disagree about which of the foregoing paradigms is correct. Airbus thinks the A380 will succeed as is, Boeing thinks no (clean-sheet) VLA was worth building. One of them is wrong. Depending on whose side you take, you're necessarily saying the other group of geniuses is wrong.

I think they're both wrong.

[Edited 2015-01-05 18:59:35]

[Edited 2015-01-05 19:01:12]

[Edited 2015-01-05 19:09:14]
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 3:32 am

Quoting EPA001 (Reply 137):
Re whether they're saying they don't want more now or never: I never said never. But look at BA's current widebody order book and stated fleet replacement plans. They have 52 A350/B787's on order for delivery well into next decade. They've stated that the 787-10 and A35J are replacing the 744's. For the foreseeable future, their words and deeds seem to suggest they don't want more A380s.



I understand airlines do take options to not exercise them.  

One wishy washy quote in an article about the wide body strategy of Boeing after losing the Delta order does not constitute a valid fleet planing information regarding BA. In the same article you find a glowing endorsement of the A380 by BA. BA are getting 2 each in 2015 and 2016.

BA is still flying 43 B747-400, 46 B777-200 and 15 B767. The B777-300ER and 4 B777-200 are rather new. That are 100 frames to be replaced in the time frame you are talking about. BA has still some orders to make in the next years and more if one would talk expansion.
8 A380 and 8 B787 are already flying for BA. That makes outstanding wide body orders B787 42 orders, 8 delivered, makes 34 and A 380, 12 ordered, 8 delivered, makes 4, with the 18 A350-1000 that makes 56 outstanding orders. Hardly enough do replace 100 frames.
There are 22 B787-9 on order for BA and 26 options for A350 at IAG, hardly all for BA, but there are 15 B737-300 and 42 B777-200 to be replaced.
There are 12 B787-10, 18 A350-1000 and 4 further A380 on order to replace 43 B747-400. The 7 options on A380 would just fit nicely.
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 3:45 am

Quoting mjoelnir (Reply 143):
I understand airlines do take options to not exercise them.  

If they knew for certain that they'd take the planes they wouldn't pay extra for the option. They'd just make it a firm order.

Would you care to answer my poll? Our discussions on here would be a lot more productive if we clarified our basic assumptions. They're lingering in the background a lot of times, and it takes too long to circle back to fundamentals in every reply...
 
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 4:47 am

Quoting Matt6461 (Reply 141):
1. Do you believe that a bigger plane, in general, has to be more efficient?

2. Do you believe that there is any effect on yield of plane size? (generally speaking)

3. Do you believe that there is any effect on yield owing to frequency?

4. If you said yes to 1-3, and assuming the effects are negative for increasing plane size, do you think any VLA can sell well?

5. If you said yes to any of the foregoing, approximately what broad relationship do you see between efficiency (measured by CASM, RASM-CASM, ROI, or any other metric) and capacity for a given plane?

1. Yes, but one still has to compare frames doing similar work. You can not compare for example long haul and short haul frames.

2. Yes, everything being comparable and if there are enough passengers on the route the larger plane will bring better yields. We have SQ talking about that the difference in RASM between the A380 and the B777 is bigger than the fuel burn difference.

3. Yes on short haul, diminishing on longer stage length, unimportant on really long flights.

4 If your assumption would be right than a few frames selling well should not sell well. Up to a certain size bigger seems to be always better on A.net until the discussion hits the A380.

Quoting Matt6461 (Reply 141):
On number 5 here's what I see:
-The market looks to split between A35J and 77X. The former is ~3% worse on seat costs but ~7-8% better on trip costs.
-A359 and B787 are ~5-6% worse on seat costs than A35J, 10-15% better on trip costs.

There is no reason to believe that the A350-1000 should be worse on seat cost than the B777-9.
Both the B777-9 and the A350-1000 should be better on seat cost than the B777-8.
 
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Matt6461
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 4:59 am

Quoting mjoelnir (Reply 145):
4 If your assumption would be right than a few frames selling well should not sell well. Up to a certain size bigger seems to be always better on A.net until the discussion hits the A380.

Thank you for answering sir. I guess I should have added the following question to the survey:

6. Given that the A380 is ~50% bigger than the competition, how much more efficient than a 77X do you think it should be, in order to match capacity/efficiency trends? (open question - but if you say, "exactly as efficient as now," please approximate how much more efficient you think it is, either on CASM or RASM-CASM or whichever metric you prefer)

I'm not malignantly ignoring your response re A350 vs. 77X, just don't want to sidetrack the discussion.

[Edited 2015-01-05 21:11:27]

[Edited 2015-01-05 21:13:19]
 
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TheRedBaron
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 5:20 am

Quoting Matt6461 (Reply 146):
6. Given that the A380 is ~50% bigger than the competition, how much more efficient than a 77X do you think it should be, in order to match capacity/efficiency trends?

Its of no consequence because nobody is using the A380 as a super carrier with 700 PAX, so It canT be compared, efficiency or not, it all washes down on how much money are you making on a constant basis, you could put 50 super suites on an A380 cross the atlantic and fill it up and make a fortune with super rich people (is there market for that? I don't think so, but bear with my example), or they could put 800 sardine can seats and sell the tickets for 150 USd each and be immersed in a sea of red ink, even if you sell them all, because of a lot of expenses and capital; expenditure, EK has find a way to make it work and if the latest builds are any indicator, they want to put a lot more pax on their aircraft, so I guess THEY CAN SELL those seats....

I wonder what would happen if one legacy carrier in the USA buys a small fleet of A380.... will they make the competition bite the bullet and order more, or they would be alone with an unmatchable product (fleet wise)...

In my view its not the aircraft at fault, but the philosophy of its usage, and the marketing of the hard product that has cornered its market.

TRB
The best seat in a Plane is the Jumpseat.
 
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Matt6461
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 5:51 am

Quoting TheRedBaron (Reply 147):
Its of no consequence because nobody is using the A380 as a super carrier with 700 PAX, so It canT be compared, efficiency or not

So I'm going to put you in the camp of people who think VLA's can't work, period? I appreciate this response, including the hypos with 50 billionaires or 800 suffering proles. But let's hammer down on the numbers a little more:

Say the A380 lowers its seat-mile costs by 25%. Assuming its current trip cost is 45% more than 77X, its new trip cost would then be [ .75 * 1.45 ] only ~9% greater than 77X's.

I believe that airlines would find ways to make 9% more revenue from the additional 50% seats. A few ideas:

-offer 20% discounts on connecting itineraries only. That way your point-to-point yield, versus a 77X, doesn't change. Meanwhile you steal all price-sensitive connecting pax from the competition. You'd have to up your network capacity, but that'd be pretty when your connecting pax are giving an easy 10% profit margin versus competition (20% discount, ~30% CASM advantage)

-For carriers like SQ and CX, who have separately-branded low-cost carriers, fill the extra space with no-frills Y seats branded as Scoot or Dragonair, selling them at 20% discount. That way you're not watering down the brand and you're going after stimulated demand.

-Use some of the 50% additional space for a cargo compartment with the equivalent of 25-30 LD3 space. Gets you about 10% of pax revenue right there, making up trip cost difference.

-Put your Y seats at 37-in pitch, charge 9% more for them. Or just win on load factor versus the competition. Put your F seats at 1-1 upstairs like Etihad. Increase J pitch from ~55 to ~80 - basically first class. Charge 10% more.

-Upper deck is bowling alley.  

Ok so hopefully you get my point. If the A380's trip costs get to within, say, 10% of the 77X, the possibilities for making up that increment are myriad. If you can't make 10% more with 50% bigger plane, you just need to fire your marketing department.

[Edited 2015-01-05 21:52:48]

[Edited 2015-01-05 22:10:14]
 
KD5MDK
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RE: The A380NEO Thread Part 2

Tue Jan 06, 2015 6:21 am

I really can't see how BA expects to get by with downsizing so many routes from 744s to 78Js unless it finds extra slots it has been hiding or really reduces total capacity.

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