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Matt6461
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Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 9:59 pm

Originally in French via Google Translate:

Quote:
Pressed by the company Gulf to launch a re-engined A380, Airbus has made three requests to Emirates: what could be its contribution to finance the development of the program, the number of copies which it could commit to order, and schedule deliveries. The two sides decided to give time. There will be no announcement of this program during the next Dubai Airshow in mid-November.
Pressed for nearly two years by Emirates to launch a remotorisée version of the A380 (Neo A380 new engine option), Airbus, according to our information, made a proposal in Dubai the company to launch the project, whose cost is estimated at almost three billion.

Airbus has three applications to the company Gulf: how much she was prepared to co-finance for the development of the program; How many copies is she prepared to order and what is the commissioning schedule of devices.

Airbus proposes to re-engine the A380 with Rolls Royce Trent derived XWB engines installed today on the A350-900. A relevant point to several specialists, although it is slightly too powerful engine today. "Then we must see if the device is elongated and if its mass is increased," says one of them. In addition to developing new engines, a repowering involves changing several points, including the wing.

Asked Airbus did not comment. Emirates was not able to do well.

No announcement at the Dubai Airshow
Visibly Emirates would not be willing to finance such co-development. And the aircraft manufacturer and the company Gulf have agreed to donate time, according to a close case in Europe.

"There will be no announcement at the Dubai Airshow. The pressure is relaxed," says a close case. Many observers speculated indeed a launch of Neo A380 at the Dubai Airshow in mid-November. "This leaves time to study not only repowering but also an extension of the A380," says this source.

Which market?
Tim Clark, CEO of Emirates has repeatedly said his company was ready to order 200 copies. Pillar of the A380 program since its launch in 2000, Emirates has already ordered 140 superjumbo, of which 67 are in service today.

Since the beginning of the year, Airbus insists that improving the A380 take place "one day" but it was not the time. The manufacturer is extremely careful to invest as much money without knowing whether there is a real market. "It's a very small market that we dominate today", stated earlier this year John Leahy, Airbus commercial director of the.

     | Read Airbus he was right too soon?

The experience of the current A380 is not reassuring indeed. The program was launched in 2000 and only 317 copies were sold, 44% to a single customer, Emirates. So, if the A380 entered service in late 2007 only, the weakness of its sales already raises the question of its future.

Exhaustion of production within 5 years?
Many experts believe, that under the current order book, it is urgent to launch the Airbus A380 Neo if wants to have time to develop (4-5 years minimum) before production of the current model runs out.

With 146 aircraft to deliver a good fifteen of which is uncertain (4 Transaero, 6 Virgin, 2 Air France, Air Austral 2), the production will be exhausted by 2020. Unless garner new orders hope as the direction (it ensures that a contract could be announced by the end of the year) or reduce the rate of production, which is now 2.2 aircraft per month. In 2015, Airbus will deliver between 23 and 25 A380.

A rate one would even be considered by less than two years if the level of orders did not change. "What is the minimum to maintain skills," said one observer. "This would increase production costs and would mean a termination of the program," said one.

Well well... Looks like Airbus is maybe exploring a financing scheme with EK to enable a "one customer" launch. The translation isn't perfect but seems to say that EK doesn't want to co-finance the NEO.

Those TXWB engines would be huge for the A380; this almost certainly means a stretch. Could the engines be TXWB plus the Advance's HP spool? Otherwise seems like Airbus is giving up on the Advance in its current proposals. Given backlog problems, they probably can't wait for the Advance even if RR sees a business case for putting it on the NEO.

23 to 25 deliveries this year? KarelXWB says 25 each of the next few years in the production thread.
 
Ruscoe
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 10:44 pm

If EK did finance the development of the NEO surely it would be a condition that the NEO could not be sold to a potential competitor.
However, if they order 200 it is probably a mute point.

Ruscoe
 
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BaconButty
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 10:53 pm

Quoting Ruscoe (Reply 1):
If EK did finance the development of the NEO surely it would be a condition that the NEO could not be sold to a potential competitor.

Or that they received royalties.
Down with that sort of thing!
 
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Boeing778X
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 10:58 pm

Quoting Ruscoe (Reply 1):
However, if they order 200 it is probably a mute point.

Agreed.

317 A380s have been sold to date (Wiki) and more than half of those are going to EK. If they order 200, perhaps the A380neo will be worth the cost.

Otherwise, it's a foolish move. A one customer type is a terrible financial move. I suppose SQ and (MAYBE) CX would have it, but only just.

I'll take a guess in saying maybe as low as 150 A380neos for EK would make it worthwhile. Maybe 20 for SQ and 15 for CX?
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Matt6461
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 11:06 pm

Quoting Boeing778X (Reply 3):
I suppose SQ and (MAYBE) CX would have it, but only just.

CX has said they're not interested. http://centreforaviation.com/analysi...et-is-not-returning-loyalty-240554
 
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Boeing778X
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 11:13 pm

Quoting Matt6461 (Reply 4):
CX has said they're not interested. http://centreforaviation.com/analysi...et-is-not-returning-loyalty-240554

"CEO Ivan Chu told a 19-Aug-2015 Bloomberg TV interview that the carrier is not interested in the A380neo."

Then only EK and SQ as A380neo buyers. Can't see anyone else buying it.
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rotating14
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 11:24 pm

Quoting Matt6461 (Thread starter):

Do you have a copy of the link?
 
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MrHMSH
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 11:31 pm

Quoting Matt6461 (Thread starter):
Well well... Looks like Airbus is maybe exploring a financing scheme with EK to enable a "one customer" launch. The translation isn't perfect but seems to say that EK doesn't want to co-finance the NEO.

That's quite an unprecedented proposal in this day and age. I see why EK wouldn't want to co-finance the aircraft, which says something given how much EK has compromised to enable an A380neo.

Quoting Ruscoe (Reply 1):
If EK did finance the development of the NEO surely it would be a condition that the NEO could not be sold to a potential competitor.

I don't see why Airbus would ever accept that. Niche though the A380 may be outside of EK, you wouldn't pass up the opprtunity to sell it to customers that do have a use for it.

Quoting BaconButty (Reply 2):
Or that they received royalties.

More likely, but as above, quite unprecedented.

Quoting Boeing778X (Reply 3):

Otherwise, it's a foolish move. A one customer type is a terrible financial move. I suppose SQ and (MAYBE) CX would have it, but only just.

QR would likely be interested, EY.. maybe, SQ, the most likely but not certain, QF may decide to take the final 8 A380s as neos, it has been said on here that the A380 could have more use at QF but for the fact that the upper levels there aren't too keen on buying at the moment, or something like that. KE, OZ, BA and LH would be potential long term customers. I don't see CX ever operating A380s, they prefer frequency on very long routes when most airlines don't. I believe they also like the cargo capabilities.

Quoting Boeing778X (Reply 3):

I'll take a guess in saying maybe as low as 150 A380neos for EK would make it worthwhile. Maybe 20 for SQ and 15 for CX?

There's potential for 300-400 A380s, but realistically you're looking at closer to 250, though even that is quite optimistic, though it is entirely possible.
 
Bluebird191
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 11:39 pm

Quoting Boeing778X (Reply 5):
Then only EK and SQ as A380neo buyers. Can't see anyone else buying it.

We can add QF and BA to the list - both are seeing high load factors on most of their flights on the type. However, going by one flight two weeks ago on QF9, there were 200 seats available in economy while business was almost full (had a friend on the flight the entire journey).

Quoting Matt6461 (Thread starter):
Looks like Airbus is maybe exploring a financing scheme with EK to enable a "one customer" launch

Or, sell the A380 program to EK, which in turn would allow them to develop it into the aircraft they want it to be. EK could setup a subsidiary for it - "Emirates Aerospace Engineering" or similar, and develop the aircraft they want, with the range and specs they want or need out of it.
 
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RE: Airbus Presses EK To Finance A380neo

Fri Oct 16, 2015 11:47 pm

How about they (Airbus) just make EK guarantee to cover any losses on the plane. That way, Airbus doesn't lose money but gets valuable knowledge to use on future models? We all know EK has the money to cover any losses.

But I do wonder what is going to become of the 300+ original A380s.
 
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 12:21 am

With regard to the 200 orders I have a question......I would assume that many if not most of the 200 NEO orders would be replacements for EK's CEO's as they come off lease. If that is the case that puts 140 CEO's into the used market albeit over an extended time period. They cant place any of these aircraft now let alone that kind of number. No matter how cheap the acquisition costs drop the operating expense isn't going to go down nor will any carrier magically appear that can fill them with any consistency.

I have a good deal of respect for Airbus. Having flushed so much money down the toilet on what is already a very marginal product, I simply cannot imagine them putting this kind of investment into what is essentially a special order aircraft for one customer. If they go this route where do they get the resources for a MOM competitor and further development of the A350? Both of those I would expect would command a much greater ROI. I was surprised that they did the original A380 as is. I never held any faith in their market forecast for this aircraft in the first place. I would think/hope that they have learned their lesson on this project.

My thought is that if EK isn't willing to put their money where there mouth is then that speaks volumes. IMHO Airbus would be foolish to do this aircraft. Even if the markets continue to grow a NEO A380 is going to be relatively quickly outclassed by ever larger twins. Would Airbus not be much better off if putting their investment in that direction rather than the one trick pony A380?
 
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 12:57 am

Quoting Bluebird191 (Reply 8):
We can add QF and BA to the list - both are seeing high load factors on most of their flights on the type.

I thought BA made it abundantly clear that they do not want any more A380s?

And maybe QF, but they seem very happy with the A380s they have now. PLUS, I hear they could go the 777X route.

What about QR and EY, while we're at it?
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IndianicWorld
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:11 am

I actually aee value in the A380neo stretch version for a few carriers, as this could well bring the true efficiency benefits to the fore.

The current A388 is not optimized, given most of its design is largely set up for the larger A389 version which has not been brought to market yet. You can understand why Airbus has been quite reserved in its deployment of a larger version or a neo though so far, given some of the challenges it has faced selling and delivering the existing model so far

If EK do sign up for 200, that will go a long way to getting the program off the ground, but I can also see just as much pressure on BA or LH to sign up for more given their hub airport constraints on movement growth. That issue is unlikely to be reduced, with so many challenges in adding runway capacity.

Add in QR and likely EY in the game to keep up and you may well see a decent base to work from. It is odd though that CX is a carrier that is facing significant airport capacity issues and does not see a place for the A380neo in its fleet. It is a carrier based on frequency but that will hit a point that it can not be expanded without more runway capacity being added.

It's a hard one for Airbus though. Does it cut its losses and walk away from a plane that may well be ahead of its time, or invest in the plane on the basis that the challenges will pay off in more interest in bigger planes. Big money to risk though.
 
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:15 am

Quoting DDR (Reply 9):
How about they (Airbus) just make EK guarantee to cover any losses on the plane. That way, Airbus doesn't lose money but gets valuable knowledge to use on future models? We all know EK has the money to cover any losses.

Emirates posted ~$1.25B profit last year. The estimated 380neo development cost (per the posted article) is $3B, and current production costs at 25/year are roughly breakeven. Given the history of cost overruns in the airplane business (so costs could be greater than $3B), the current inability to manufacture the plane profitably, and the apparent lack of demand for the 380neo from other carriers, a 'loss coverage' covenant from Emirates would represent a massive financial risk for the airline. Such a covenant could potentially create a liability equal to two years (or more) of total profitability. Compare that risk to the option of there never being a 380neo, in which case they continue to operate the 380ceo that is working well for them. Given those options, no sane Emirates management teams chooses to assume the potential liabilities of the 380neo.

However, some form a financial support of the 380neo, with capped and known liabilities, and with costs less than the potential benefits of operating the 380neo, is within the realm of possibilities. Think something like a below-market-rate loan in exchange for production and performance guarantees. I don't know how WTO acceptable that is, but since it would be between two corporations I would guess it's OK.
 
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:42 am

Very interesting development. It has been speculated about before. Hard to see how a non-EK customer would want to purchase an aircraft that could help subsidize their competitor.

I see this move as very risky for both sides. I know we have a ton of respect/faith in EK but can you really feel super confident they are going to take 200 of these neos when they currently 'only' operate about 65? I have a lot of faith they are going to continue to grow but I am not sure I have $3 billion of faith.

And has been speculated by many, including our OP, a new engine doesn't really solve everything.

This is a good move by Airbus to at least try to de-risk the program by bringing them in, financially but I think EK can see the A380ceo working for them for the time being and putting up $3B does not sound that appealing.

I don't see a business case coming together here for just a new engine A380. I could see a major PIP and cabin work maybe some aero improvements but I just can't see this coming together at this time.

A couple more years down the road maybe and a substantial improvement that interests other customers, that I could see.

tortugamon
 
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:45 am

Matt6461 (or the rest of you tech experts), can you please give us some opinion as to the potential efficiency benefit the Trent XWB affords over the Trent 900 today? With PIPs, what would be the closest a Trent 900 can get to the Trent XWB?

An A380-900 would be attractive to Cathay should its cargo capabilities be of a significant increase to the -800 variant. But any stretch I agree is way ahead of its time.

Quoting IndianicWorld (Reply 12):
It's a hard one for Airbus though. Does it cut its losses and walk away from a plane that may well be ahead of its time, or invest in the plane on the basis that the challenges will pay off in more interest in bigger planes. Big money to risk though.

  
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Matt6461
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:53 am

Quoting dfambro (Reply 13):


Good points.

The default rule in business sales contracts is expectation damages: the seller has to be made whole if the buyer defaults. For sellers like Airbus, the ability to sell the frame for a discount elsewhere doesn't count; it's assumed to substitute for orders that would have come anyway.

That's the default rule, but it isn't applied in airliner sales contracts. These have "liquidated damages" provisions such as cancellation penalties. This rule is more favorable to airlines than the OEM, and overall more efficient because otherwise the risk assumed by airlines would be too great to justify many large orders.

Airbus is trying to shift the transactional risks/damages back towards the default rules with EK, and also trying to have it subsidize development costs. The interesting thing about this structure is doesn't mitigate business case risk unless, most likely, there is an explicit or assumed backing by EK's sovereign shareholder: the risk is that EK doesn't grow as projected and can't take all 200 frames. In that scenario, having just EK as a risk sharing partner doesn't help, obviously. Not unless EK fronts all the costs and later takes the frames for free or something. That's plainly impossible.

The fact that Airbus is asking for creative transactional schemes to launch the A380neo bespeaks its lack of appeal. It's rare for a big Airbus customer like CX to publicly and categorically state that it's not interested in a product, especially one defined only approximately. It's rare for only one airline to publicly encourage a product launch, while all others are reticent (ok QR said some positive things, but didn't say they'd order).

Airbus looks more and more desperate with the A380 every year. Annual unfulfilled promises of new orders, no interest in upgrades. An apparent backing away from a clean-sheet engine offering. A lessor with immediate availability who can't place a single frame. I hope they don't follow Boeing's tack with the 747 and, after several years of unwanted proposed upgrades, launch a marginal upgrade with scanty orders.
 
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Matt6461
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 2:03 am

Quoting PhoenixVIP (Reply 15):
Matt6461 (or the rest of you tech experts)

Thanks but I'd prefer not be labeled an expert. I quote experts is all. The rest is judgment about the future - a domain in which there are no experts.

Quoting PhoenixVIP (Reply 15):
can you please give us some opinion as to the potential efficiency benefit the Trent XWB affords over the Trent 900 today?

Bjorn Fehrm at Leeham News (a true expert) says the TXWB would give only ~5% SFC margin versus the current T900. That story is behind a paywall at Leeham though.

Re future PIPs, GE has floated a ~2.5% PIP for the GP7200, which would be replaceable on the current wing. I'd guess RR could do about the same. Combining that number with Bjorn's we're about 2.5% from the TXWB.

http://aviationweek.com/paris-air-sh...s-a380neo-gp-upgrade-business-case
 
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rotating14
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 2:11 am

Interesting. Personally EK won't go halvsies on the NEO. If they put up the capital to finance the NEO, they'd wanna be the sole customer, as it sounds. But what would stop Airbus, if they are financing more than 50% of the NEO, from selling it to other carriers if they show interest later on down the line.
 
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Finn350
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 6:17 am

Quoting tortugamon (Reply 14):
This is a good move by Airbus to at least try to de-risk the program by bringing them in, financially but I think EK can see the A380ceo working for them for the time being and putting up $3B does not sound that appealing.

When they talk about EK financing A380neo, they probably actually mean some form of risk-sharing in the A380neo development program (as EK would in any case be financing the program being the largest customer by far).
 
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BlueSky1976
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 6:41 am

Quoting Boeing778X (Reply 5):
Then only EK and SQ as A380neo buyers. Can't see anyone else buying it.

+ Lufthansa and British Airways, towards the end of the production run, to replace their current A380s. Maybe (and that's a BIG maybe) Qatar Airways.

That's about it.
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qf2220
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 6:58 am

This has probably been brought up in other threads, but does the A380 development resemble the 747? The -100 sales look smallish and the little bit i know about that part of its history, the 747 nearly folded somewhere during or after the -100, definitely before the -200. The -200 came along and sold a lot more, then the -300 and more importantly the -400, which was the star of the series.

Is the A380 possibly going to have a similar path? Is the NEO the -200 equivalent, to be followed up by the -400 later on to cater for customer needs that don't yet exist?
 
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KarelXWB
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:12 am

Quoting Matt6461 (Thread starter):
Those TXWB engines would be huge for the A380; this almost certainly means a stretch.

The article mentions a derivative instead of the current TXWB engine. The article also says the current TXWB is too powerful for the A380.

So we would be looking at a scaled-down TXWB derivative, most likely incorporated with some Advance technologies. Think about composite fan blades to safe weight, perhaps the HP spool too, and other improvements (including latest PIPs) to decrease fuel burn by 2-3% over the current A350 engine.

[Edited 2015-10-17 00:13:47]
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81819
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:14 am

Quoting Ruscoe (Reply 1):
If EK did finance the development of the NEO surely it would be a condition that the NEO could not be sold to a potential competitor.
However, if they order 200 it is probably a mute point.

I thought there were Anti-trust laws forbidding airline manufacturers from being airline operators.

I'd suggest any such agreement would need to be at a good arms length. In other words no royalties if Airbus sell the NEO to other operators.
 
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KarelXWB
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:17 am

Quoting travelhound (Reply 23):
I thought there were Anti-trust laws forbidding airline manufacturers from being airline operators.

I'm not in favor of this kind of business, but customers paying for product development happens in many other industries too.
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Ruscoe
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:20 am

Quoting Matt6461 (Reply 17):
Combining that number with Bjorn's we're about 2.5% from the TXWB.

I don't have the numbers in front of me, but the TXWB is significantly heavier than the existing options.
A smaller fan will no doubt decrease the weight, but the extra weight would decrease the margins again, but not by much because you are already dealing with a massive aircraft

Ruscoe
 
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Devilfish
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:28 am

Quoting BlueSky1976 (Reply 20):
Maybe (and that's a BIG maybe) Qatar Airways.

AAB is on record as wanting a stretched A350-1000. QR might not require an A380neo anymore if they could get the former.....

http://www.flightglobal.com/news/art...d-in-a350-stretch-al-baker-417772/

Quote:
"Qatar Airways would be interested in buying a stretched A350-1000 derivative should Airbus decide to build one, but only if it offers enough of a step over the rival Boeing 777-9X.

[.....]

'We would be interested in a stretch of the A350-1000. Airbus has no alternative – to be competitive it will have to do something that is bigger and better than the 777-9X,' he says.

To achieve this, Al Baker says the A350 stretch will need to incorporate 'new engine technology' and doubts that the twinjet’s existing Rolls-Royce Trent XWB engine could be adapted for the larger variant as the powerplant 'is already at its fullest' for the A350-1000."
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NAV30
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:28 am

I don't think Emirates (and maybe others) really think that the falling sales of the A380 are due to the lack of 'new engines.' I think that it's more a matter of the 'big twins' now being 'reckoned' to be capable of carrying over 400 passengers with only two of the things.

It's significant (to me, anyway) that the 'ME3 ' - Emirates, Qatar, and Etihad - already have 230 of the forthcoming larger B777Xs on order between them? They may well only be planning on buying just enough A380s to 'tide them over' until the new Boeing twins arrive in numbers?

https://en.wikipedia.org/wiki/Boeing_777X
 
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Aquila3
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:41 am

Quoting NAV30 (Reply 27):
I think that it's more a matter of the 'big twins' now being 'reckoned' to be capable of carrying over 400 passengers with only two of the things.

Ah, this is a very new and interesting argument from you.....
We missed that in our weekly A380 trashing thread.
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81819
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:45 am

Quoting KarelXWB (Reply 24):
I'm not in favor of this kind of business, but customers paying for product development happens in many other industries too.

It is common practice for military programs.
 
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speedbored
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 7:56 am

Quoting travelhound (Reply 23):
I thought there were Anti-trust laws forbidding airline manufacturers from being airline operators.

I doubt that providing finance would be construed as EK becoming a manufacturer. They would need to take a significant stake in Airbus for that to happen.

Quoting KarelXWB (Reply 24):
I'm not in favor of this kind of business, but customers paying for product development happens in many other industries too.

Me neither but the article only claims (with no supporting evidence, btw) that Airbus has asked EK "how much they would be prepared to contribute towards financing the project". Such a contribution doesn't necessarily need to be in the form of cash loans. Airbus may simply have been enquiring into how much more EK would be prepared to pay for a neo than a ceo, or whether they would be prepared to make larger up-front "deposit" payments.

Quoting KarelXWB (Reply 22):
The article mentions a derivative instead of the current TXWB engine. The article also says the current TXWB is too powerful for the A380.

So we would be looking at a scaled-down TXWB derivative, most likely incorporated with some Advance technologies. Think about composite fan blades to safe weight, perhaps the HP spool too, and other improvements (including latest PIPs) to decrease fuel burn by 2-3% over the current A350 engine.

That would be my guess, too. Given what RR have been saying about their Advance technologies, and how they are going about developing and testing them, I would expect such a derivative to contain a lot of that technology.

After all, the more real-world data that RR can get from their Advance technologies, even if it is not in the form of an entire Advance engine, will help enormously with their development efforts towards Ultrafan. I'm sure RR will want to push any such derivative as far towards Advance as they are able to within whatever timeframe is ultimately decided upon.


Google hasn't done a particularly good job on this translation, which has left quite a few things open to some misinterpretation (as demonstrated by the thread title). Original article in French can be found here:
http://www.latribune.fr/entreprises-...tre-la-main-a-la-poche-513886.html

[Edited 2015-10-17 01:03:47]
 
Prost
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 8:11 am

Could Airbus creat a subsidiary A380 corporation, maintaining 51% ownership and selling 49% to Gulf interests? Either the Emirates or the gulf carriers themselves.
 
lowbank
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 8:17 am

Quoting KarelXWB (Reply 22):
The article mentions a derivative instead of the current TXWB engine. The article also says the current TXWB is too powerful for the A380.

So we would be looking at a scaled-down TXWB derivative, most likely incorporated with some Advance technologies. Think about composite fan blades to safe weight, perhaps the HP spool too, and other improvements (including latest PIPs) to decrease fuel burn by 2-3% over the current A350 engine.

as you will be aware I cannot go into detail, however if a scaled down version was to be put forward then the design/validation costs are about the same as a clean sheet design, so I would suggest it will be an 84k engine with minor tweeks, ala T7000. there would be new technologies in a couple of areas because thats how we do things. evolution not revolution. l have said seversl times, we are not going to see a composite fan blade on. production engine for many years, if ever in my honest opinion.
The current blades are so optimised it is always going to be a challange to improve on them, just to give you an idea at the tip of the blades the material thickness of both the suction and pressure side is around a millimeter and the membrane inside is 0,76 to 1.016 dependent on blade type. The thickness gets greater as you move down the blade to a max of around 5-6 mm just above the root but the membrane never gets above 1.016mm. i have not done calcs but at best guess when you look at a blade 50% of it is vacuum sealed cavity.
Every days a school day.
 
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speedbored
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 9:44 am

Quoting lowbank (Reply 32):
l have said seversl times, we are not going to see a composite fan blade on. production engine for many years, if ever in my honest opinion.

I agree that it will be a while before RR start using their carbon-titanium fan technology on production engines, given the amazing efficiency of the existing hollow titanium fan blades, but I can definitely see it happening if/when they eventually start producing Advance or Ultrafan engines - RR marketing people seem to think so:
http://www.rolls-royce.com/customers...ducts/future-products/advance.aspx
http://www.rolls-royce.com/customers...ucts/future-products/ultrafan.aspx

Quoting lowbank (Reply 32):
The current blades are so optimised it is always going to be a challange to improve on them

True. RR really did work miracles when they invented their "top secret" hollow titanium blade manufacturing technology. I suspect, however, that cost will end up being the main driver for change. The current Titanium blades are very expensive to manufacture and I suspect that, even if they prove hard to beat from a weight/performance/life perspective, the potential cost savings from switching to carbon-titanium will eventually drive a change.
 
billreid
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 9:47 am

This is a broken olive branch. Seen it a lot in aviation.
Lets discuss you picking up the bill and we'll do it.

It appears its a way out for both AB and EK.
Same thing happens in air service all the time "if you cover the costs we'll do it?"
This should be a non-starter for EK and a way out for AB. As mentioned no announcement at Dubai.

Who else sees this as a way out and nothing more?
In business if your gut tells you it isn't going to happen because it isn't the right move then it doesn't happen.
Aren't we all hearing the same? Isn't both AB and EK outside the comfort zone by about a gazillion miles?
Some people don't get it. Business is about making MONEY!
 
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anfromme
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 9:51 am

Quoting Boeing778X (Reply 11):
I thought BA made it abundantly clear that they do not want any more A380s?

Nope. They just said they're happy with their order size for now. Not surprising given that they haven't even received all of their ordered A380s.

Quoting rotating14 (Reply 18):
If they put up the capital to finance the NEO, they'd wanna be the sole customer, as it sounds.

That would be stupid for EK, RR and Airbus. Also, it explicitly contradicts what Clark has said before, namely that more carriers should order A380s. Now - something that, should EK decide to co-finance an A380NEO, would make a lot more sense is this:

Quoting Finn350 (Reply 19):
When they talk about EK financing A380neo, they probably actually mean some form of risk-sharing in the A380neo development program (as EK would in any case be financing the program being the largest customer by far).

  
That way, EK could actually see royalties paid for each additional copy sold to anybody other than EK. Which seems a much better idea for all parties concerned than any sort of exclusivity deal.
42
 
NAV30
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 10:01 am

Quoting Aquila3 (Reply 28):
Ah, this is a very new and interesting argument from you.....
We missed that in our weekly A380 trashing thread.

I'll try to make a polite reply, Aquila3.

When I started in international business, flying long overseas trips meant that I ended up on B747s (or, later, A380s) - twins were reckoned to be 'unsafe.' Times are changing (HAVE changed) nowadays? Two (much more powerful/reliable) engines are usually 'enough' these days.

You say you're an 'IT engineer.' Does that mean that you still have to work on large 'desk-bound' computers (as I once had to) or can you now rely on smaller portable machines that you can carry in one hand, but have equal or better performance?

400-odd passengers and two engines are likely to be 'enough' for most (if not all) airlines/routes within a very few years. That's not 'trashing,' it is simply 'progress' - an already-developing trend in the aviation field.

[Edited 2015-10-17 03:14:25]
 
olle
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 10:01 am

Perhaps they will make this as a bigger down payment when ordering their 200 neo? I can imagine that the emirate canceling their A350 made management in Airbus nervious...
 
lowbank
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 10:04 am

Quoting speedbored (Reply 33):

to be honest i dont think that cost will be the driver for the composite blade. I dont think it will be cheaper to manufacture in composite but I am not a composite expert and have not done composite costings.
i do know the metallic blade costs very well.
i do know comparative costs for some metallic components and there composite alternative. the composite ones i know are in the main more expensive.
Every days a school day.
 
parapente
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 10:14 am

The 380 is the cornerstone of Emirates global model.The 380 is Airbus' largest investment and flagship.They will both work hard to make a deal as it is in both their interests to do so.It may not happen of course and then both will loose.There may well be an answer already but for reasons unknown this is not the right time to announce it.If that is the case I imagine it will be to do with the choose of 'new'engine and how that may impact any potential A350 order?This deal if it happens is bound to be highly complex.
 
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HALtheAI
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 10:46 am

Quoting Ruscoe (Reply 1):
However, if they order 200 it is probably a mute point.

It doesn't matter if EK orders 200 or 500, the delivery schedule is the key. Airbus will want EK to take at least 20/year if there are little or no other customers, but that's highly problematic early on. The crucial time period is 2020 till 2025, before EK moves into DWC and during a time when very few of their A380s will be coming off lease (Emirates only took 20 A380s in the first four years).

The reason why Sir Timmy doesn't want to 'co-finance' an A380neo is because he knows that Dubai needs all the profits Emirates is generating to finish work on DWC in a timely manner. If EK needs to pony up a $2 billion deposit or whatever Airbus wants, that probably means another year's delay before EK can move into DWC. And until they've moved into DWC, EK will be sharply restricted in the number of new planes they can add to their fleet. So, perversely, Airbus asking EK for financing assistance on an A380neo project will mean Airbus has to accept a lower delivery rate, at least initially, on said A380neo.
 
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EPA001
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 11:13 am

Quoting KarelXWB (Reply 22):
The article mentions a derivative instead of the current TXWB engine. The article also says the current TXWB is too powerful for the A380.

So we would be looking at a scaled-down TXWB derivative, most likely incorporated with some Advance technologies. Think about composite fan blades to safe weight, perhaps the HP spool too, and other improvements (including latest PIPs) to decrease fuel burn by 2-3% over the current A350 engine.

That would be the best option if an all new RR-advanced engine would not become available in time for this possible A380-version. With that package they might have enough to get a positive business case out of the studies they are now conducting.  
 
PhoenixVIP
Posts: 374
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 11:19 am

Quoting NAV30 (Reply 36):


When I started in international business, flying long overseas trips meant that I ended up on B747s (or, later, A380s) - twins were reckoned to be 'unsafe.' Times are changing (HAVE changed) nowadays? Two (much more powerful/reliable) engines are usually 'enough' these days.

400-odd passengers and two engines are likely to be 'enough' for most (if not all) airlines/routes within a very few years. That's not 'trashing,' it is simply 'progress' - an already-developing trend in the aviation field.

[Edited 2015-10-17 03:14:25]

When I started flying and still today I see four engines for large and long haul. That's the 747 and A380 hence we see airlines dumping A340 and rightly so. Two engines are enough for 360 passengers but not 650 plus. Trashing is someone who is too ignorant to understand factual information and progress is the rest of this thread and it's appropriate posts. The trend in aviation is to go up because not enough room for all our airlines. Look at how horribly cramped DXB has become and LHR and HKG are there too.

Quoting Matt6461 (Reply 17):

You're an expert in my books anyway hehe! Can I say that at only 2.5% the difference is far too insignificant to warrant change hence -900 variant is the must? Let's say we have winglets and slightly improved wings on the -900. Better for efficiency?
Inspire the truth.
 
Flaps
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 12:21 pm

Quoting PhoenixVIP (Reply 42):
It's significant (to me, anyway) that the 'ME3 ' - Emirates, Qatar, and Etihad - already have heaps of the forthcoming larger A380s on order between them? The 777X has zero orders right now and is in more trouble than the A380 or A380neo. So the ME3 plus QF, BA and their likes will top up with more albeit with the bulk from EK.

Boeing currently shows orders for 306 777X. That is 11 frames less than the entire A380 order book and the the 777X is barely off the drawing board.
 
Amiga500
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 12:33 pm

Quoting Devilfish (Reply 26):
AAB is on record as wanting a stretched A350-1000. QR might not require an A380neo anymore if they could get the former.....

If you read it carefully, U-turn Al would only buy an A350-1100 if it was better than the 777-9X.

Given the limitations of the 350 airframe and engines, that essentially means starting from scratch.

Never, ever, going to happen.


They'd be safer taking the A380-800 fuselage, putting a new wing and twin engines on it, then calling it the A360.
 
David_itl
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 12:51 pm

Quoting Flaps (Reply 44):
Boeing currently shows orders for 306 777X. That is 11 frames less than the entire A380 order book and the the 777X is barely off the drawing board.

Not according to the approved NAV30 reckoning of orders where non-flying aircraft have zero orders. It's irrelevant about how big the 777X orders will look like compared to the A380... roughly half of what has been announced as orders is EK only. They aren't replacing A380s with 777X ... just replacing 777 with 777X. As and when you find an airline that states that they are ordering 777X to replace A380s then that's when the debate can happen about the demise of the 4-holers.
 
PhoenixVIP
Posts: 374
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:13 pm

Quoting Flaps (Reply 44):

Sorry I understand what you mean entirely, but check my signature. That's the comment from our most renowned A380 is dead poster on here so therefore I can only say 777X has zero orders.  
Quoting Amiga500 (Reply 45):
Given the limitations of the 350 airframe and engines, that essentially means starting from scratch.

This is for a different thread but I wouldn't say that because A350 is very versatile and any A350-1100 rendition could be an excellent regional aircraft or can wait for PIPs to the Trent XWB that would give it enough power for a 13-14 hour flight with 380 passengers. The A380-900 neo would fill an entirely different market and would be impossible to power with two engines alone at this point in time.
Inspire the truth.
 
Alfons
Posts: 310
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:20 pm

What about some gameplay? Let's say EK finances the 3B for development costs, additionally with a 200 piece sales contract (with the government playing guarantor of loan payment (Bürgschaft in german)). And let's put that case aside now as we see it done. What can be the further positive values that this first could create on Airbus, EK, the market?

For Airbus
- a stronger bond between EK and Airbus (future products).
- EK recognizing Airbus as being a new valuable partner to work with (long-term).
- Airbus winning a new (updated) engine for free.
- Airbus winning (maybe) half of the work for a stretch for free.
- Airbus showing a stronger presence on the market due this first, having a big airline company believing in it (marketing value). -> can create "wanna have too" 's ?
- Airbus increase of financial rating in the bank & investment sector? (not due to a sales success of the A380, but as a stronger and experienced negotiator with its customer base and managing to bind sales)

For EK
- The first A380Neo deliveries with zero mistakes, perfect floor carpets, as customization wishes have been taken very much in advance by Airbus and worked on.
- Better ties to Enders and Airbus and shorter decision times/cycles for any future projects or customization wishes (on other ac models).
- An Airbus cooperation listening to Clark regarding any A380Neo successor or model updates?
- A stronger union between Clark and Kent... äh Enders, sorry.
- An increase of social currency for Clark to its Stakeholders (government, owner etc.). (personal benefits not to underestimate)

For the market
- a first which could shape the ac sales business a bit for the future. My thought about that: the bigger airlines today procure Airbus as well as Boeing products, as (seems like) commonality isn't what offers today the biggest efficiency ($$), but the perfect product match for the predefined operation it was envisaged for. Because what is more "efficient" than a dress which has been modelled directly from the body of a man and/or a woman (for best look)?
- could paying development costs to Boeing and Airbus for an update-to-perfect-match reduce the overall lifetime costs, and become a new sales model?
- put in here whatever comes into your mind


To summarize; can't there be a surplus value which goes beyond the sold number of ac, Airbus and EK might think about, and we don't see yet?

Alfons
 
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Revelation
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RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:43 pm

Quoting HALtheAI (Reply 40):
It doesn't matter if EK orders 200 or 500, the delivery schedule is the key. Airbus will want EK to take at least 20/year if there are little or no other customers, but that's highly problematic early on. The crucial time period is 2020 till 2025, before EK moves into DWC and during a time when very few of their A380s will be coming off lease (Emirates only took 20 A380s in the first four years).

The reason why Sir Timmy doesn't want to 'co-finance' an A380neo is because he knows that Dubai needs all the profits Emirates is generating to finish work on DWC in a timely manner. If EK needs to pony up a $2 billion deposit or whatever Airbus wants, that probably means another year's delay before EK can move into DWC. And until they've moved into DWC, EK will be sharply restricted in the number of new planes they can add to their fleet. So, perversely, Airbus asking EK for financing assistance on an A380neo project will mean Airbus has to accept a lower delivery rate, at least initially, on said A380neo.

That seems to be a very unfortunate confluence of events.

Seems like the options are:

A) Let the A380ceo wither on the vine

B) Spend EUR 3B to produce the A380neo with rescaled T7000 engines and a stretch with 5% improvement in fuel burn, and ~10 years from now spend a similar amount of money to integrate the Advance to get another 5% improvement in fuel burn

C) A380NWO et al

Talk about a set of alternatives with nasty financial implications.

[Edited 2015-10-17 06:58:19]
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Amiga500
Posts: 2645
Joined: Tue Mar 03, 2015 8:22 am

RE: Airbus Presses EK To Finance A380neo

Sat Oct 17, 2015 1:43 pm

Quoting PhoenixVIP (Reply 47):
This is for a different thread but I wouldn't say that because A350 is very versatile and any A350-1100 rendition could be an excellent regional aircraft or can wait for PIPs to the Trent XWB that would give it enough power for a 13-14 hour flight with 380 passengers. The A380-900 neo would fill an entirely different market and would be impossible to power with two engines alone at this point in time.

It is flexible, but remember that the -1000 is already the baseline *heavily* modified.

Stretch again and you are looking at:
- potential rotation issues with current undercarriage.
- insufficient wing area for good payload-range.
- insufficient wing area and excess power for good enough engine out performance.
- possible reinforcement to fuselage to take additional bending load.

You can compromise range, but not the other 3.

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