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NAV30
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 7:20 am

Quoting Planesmart (Reply 101):
I can see Boeing and US interests having issues.

Have to agree, Planesmart - rumoured direct government subsidies to a given new-design civil aeroplane would be very much a 'new' issue........

[Edited 2015-10-18 00:28:29]
 
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JetBuddy
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 7:30 am

The article says they're looking at using the TXWB engines, but that they're too powerful for a simple engine swap. $3 billion sounds a bit much for a engine swap alone. And if that was the plan, a huge chunk of the expenses would be from the engine manufacturer. RR has previously stated they don't see a business case to develop a new engine for the A380neo alone. I do believe the A380neo will happen, but I believe it will be both a re-engine, a stretch of the fuselage, and aerodynamical clean up.

(I only reached about 50 posts before the trolling started getting out of hand, and didnt bother reading any more.)
 
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speedbored
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:38 am

Quoting NAV30 (Reply 90):
Therefore using the term 'firm' is inappropriate until the aeroplane can be shown to have met specification.

Following that sort of logic, perhaps the term 'firm' is also inappropriate on every existing aircraft order until it is delivered, just in case the airline goes bankrupt in the period between order and delivery?   

As far as reality is concerned, a firm order is a firm order as soon as the contracts are signed. Almost every single contract contains cancellation and termination clauses, which may or may not come into play as events pan out, none of which alter the fact that a firm contract is a firm contract.

Quoting SEPilot (Reply 89):
A senior Airbus official is on record as saying they need to produce 30 per year in order to make a profit

And, more recently, some of the most senior Airbus officials are on the record as saying that they will now be able to break even at fewer than 30.

Quoting tortugamon (Reply 91):
I definitely concede that if you deliver fewer planes you have a much harder time breaking even and that is something a few A380 defenders can't bring themselves to say.

I don't see anyone claiming that it is not harder. I only see people rebuffing the claims by the detractors that it is impossible.

Quoting justloveplanes (Reply 95):
I think somehow, somewhere, Dubai will come up with the money.

I'm not convinced that Airbus are actually asking for money - they have plenty of cash spare at the moment. I suspect that what Airbus are seeking is a sufficiently firm commitment from EK, on delivery rates and prices, to reduce the program risk to a level at which Airbus can feel comfortable going ahead with it.
 
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seahawk
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 10:10 am

Nothing new in the article.

- everybody is looking at the TXWB, because it is the newest engine in RR´s line-up
- everybody is looking at EK to commit to the NEO, because they are the only party interested so far
- everybody is looking at what Airbus is going to do, but they wait for commitments from RR and EK

You can have new articles about the NEO each week, yet the business case won´t be any better from that. A NEO to gain 5% better engine performance makes no sense for the airframe manufacturer, especially not at current fuel prices.
 
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EPA001
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 10:13 am

Quoting NAV30 (Reply 97):
The ME3 have so far placed 235 orders (I should perhaps say 'provisional' orders &nbsp Wink for the B778/9Xs - with Emirates well 'in the lead' with 150. Hard to see the A380 continuing to sell in large numbers once those become available?

Oh, come on NAV. It has been told a thousand times in hundreds of threads out here that the ordered B777-X are mostly replacements for the current B777 fleet of EK.

In time EK will need to replace the A380's as well as they are more and more the backbone and cash cow of EK. TC has stated that he wants 200+ A380's if the new airport is ready. Whether of not he will order them remains to be seen, but if an appealing A380-neo comes to the market, EK will order these 200 copies easily and maybe even in one batch.  
 
Ruscoe
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 10:40 am

Quoting speedbored (Reply 104):
they have plenty of cash spare at the moment.

Airbus are clearly concerned about their current financial situation as evidenced by a change to Contract Accounting on the 350, and the slow ramp up of 350 production.

Plenty of cash means nothing unless you look at it in the overall picture, of where the money is coming from and where it is going.

I think Airbus have moved ahead under the current leadership, but if they cannot get some development money from someone else, they will terminate the 380 program, and if they do all Airbus supporters should rejoice that management have taken a tough but correct decision.
Airbus have much more pressing places to put their cash than into the 380.

Airbus have been caught on the back foot by the success of the 787 and 77x programs, and they cannot afford to not respond to Boeings upcoming initiatives. Boeing will do some type of MOM and NSA, a longer range 787-10, and possibly an even bigger 77X, and they will keep the 747 line open but only for freighters in the main, so there is no point in putting more of their own money into the 380..

Putting more money into the 380 program is not, imo, the appropriate response, and it would appear Airbus management think so also.


Ruscoe
 
tortugamon
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 10:53 am

Quoting speedbored (Reply 104):
I don't see anyone claiming that it is not harder.

As predicted.

Quoting speedbored (Reply 104):
I'm not convinced that Airbus are actually asking for money

The journalist must be lying.

Quoting seahawk (Reply 105):
A NEO to gain 5% better engine performance makes no sense for the airframe manufacturer, especially not at current fuel prices.

Agreed.

Quoting EPA001 (Reply 106):
TC has stated that he wants 200+ A380's if the new airport is ready.

He has stated that he has interest in improved A380s not 200 more of the same variety.

tortugamon
 
PhoenixVIP
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 11:32 am

Quoting Clipper101 (Reply 84):
I do not really believe there will be a -900

But if there's really only a 2.5 - 3% at best improvement between a Trent 900 to Trent XWB then you'd have to go the Boeing route with the 777X and stretch the A380 to improve its economics further otherwise any A380neo using XWB technology is wasted.

Quoting NAV30 (Reply 90):

Hence the 777X or A380neo has ZERO orders really. Haha. Don't shoot before thinking.

Quoting NAV30 (Reply 97):
Hard to see the A380 continuing to sell in large numbers once those become available?

Emirates will place 'provisional' order of 200 A380neo should they be developed. Hard to see 150 is a number larger than 200????????

Quoting seahawk (Reply 105):
You can have new articles about the NEO each week, yet the business case won´t be any better from that. A NEO to gain 5% better engine performance makes no sense for the airframe manufacturer, especially not at current fuel prices.

  

So why bother with any A380neo now...
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zeke
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 12:22 pm

Quoting Ruscoe (Reply 107):
Airbus are clearly concerned about their current financial situation as evidenced by a change to Contract Accounting on the 350, and the slow ramp up of 350 production.

As far as I am aware the IAS 11 contract accounting is only for the first two batches of A350s (around the first 20 made). Totally different to the program accounting that Boeing uses.

The production ramp up is what they advertised, if anything they look like they are going to be ahead of their plan this year.
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NAV30
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 12:49 pm

Quoting EPA001 (Reply 106):
Oh, come on NAV. It has been told a thousand times in hundreds of threads out here that the ordered B777-X are mostly replacements for the current B777 fleet of EK.

They are 'enlargements,' not mere replacements, EPA001. My own guess is that that is all Boeing need aim at - I don't see any prospect of them embarking on yet ANOTHER stretch, it's pretty clear that a 400-seat twin-engine B779X will be more than a match (in financial and all other terms) for the four-engined A380. And therefore there appears to be no reason for Boeing to go even further with yet another enlargement/upgrade, at the present time?
 
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speedbored
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 12:54 pm

Quoting Ruscoe (Reply 107):
Airbus are clearly concerned about their current financial situation as evidenced by a change to Contract Accounting on the 350, and the slow ramp up of 350 production.

The change to contract accounting is simply to provide a more accurate picture, in accordance with IAS standards, of what the money is being spent on. It has absolutely nothing at all to do with concerns about their financial situation.

Quoting Ruscoe (Reply 107):
Airbus have been caught on the back foot by the success of the 787 and 77x programs

Hmm.

With the vast amount of deferred costs, it's definitely a bit of a stretch to call the 787 a success at this stage. And the 77X was a reaction by Boeing to the sales success of the A350 so I fail to see how it caught Airbus out in any way.

Quoting tortugamon (Reply 108):
As predicted.

Feel free to provide some quotes as evidence to prove me wrong.

Quoting tortugamon (Reply 108):

The journalist must be lying.

Why? Nowhere in the article does it say that Airbus are asking EK for money.

Quoting zeke (Reply 110):
The production ramp up is what they advertised, if anything they look like they are going to be ahead of their plan this year.

  
And they actually seem to be ramping serial production up faster than Boeing did with the 787. Although Boeing did begin serial production quite a while earlier than Airbus have.
 
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par13del
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 1:03 pm

Quoting tortugamon (Reply 98):
They haven't even received half of their 140 A380s yet. How can the replacement for an aircraft they haven't even received yet be so essential that it is the strategic interests to the UAE?

Well if an airline who works on 10 year leases orders a batch of a/c which will take more than 10 years for delivery, they will have to source replacements for the early deliveries before completion of the order.
Or am I missing the time frame that EK has to receive all the A380's that they have ordered?
 
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BaconButty
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 1:13 pm

Quoting Ruscoe (Reply 107):
Airbus are clearly concerned about their current financial situation as evidenced by a change to Contract Accounting on the 350, and the slow ramp up of 350 production.

If Airbus is "Concerned", then a competitor that used Program Accounting must be ****ing bricks!

In all seriousness, what we have here is a unique situation where you have a numbers-run customer who is extremely interested in Airbus bringing a derivative airframe to market, but Airbus has been unable to assemble a customer base broad enough to de-risk it from their point of view. The obvious answer is risk sharing between the customer and the manufacturer, and that is being explored - it will be interesting to see what form that takes. If it happens, my guess will be a JV set up capitalised by A and EK, which would sub-contract A to develop A380-900NEO. The JV would then have exclusive rights to market the airframes, taking a cut as they sell.

Thoughts:
1. Not sure why there's any suggestion there would be any impropriety with such a setup. There's a bit of vertical integration, but it's hardly like, say, an airline owning an oil refinery  
2. At $3bn it is clearly way more than a simple re-engine. Airbus have just completed one such exercise that involved similar mooted wing structure changes and certifying no less than 6 engine/airframe combinations half that. What the extra involves is anyones guess. (wing tip treatments? A stretch by the sound of the article, but 6m or 3? Aero improvements? Materials changes? Sidewall manipulation to give decent 11 abreast?)
3. I wouldn't be quick to assume that they're proposing a vanilla Trent XWB, it's not how RR work. It's clear that RR have stepped back some time ago from from offering the Advance, but that's not to say that changes at a suitable TR level might not find their way in - it's in RR's interest.
4. The breakeven number of frames may be less than people think. Stretches are great for manufacturers since the increase in revenue dwarfs the increase in manufacturing costs - it's why it makes sense for Boeing to develop the 787-10 when the program is still adding to it's deferred costs. It could be as low as 100 frames - I don't think it's the size of the orders that is putting Airbus off, rather the level of exposure they will have to the health of a single Airline. Hence why risk sharing options are being explored.
5. Risk sharing means reward sharing - should the model attract market interest in the 2020's I would expect Emirates to benefit.
6. This is an interesting potential development at a time when the aviation industry is at it's most boring for a long time. It's a shame that this forum can't discuss it without the same old characters hijacking the discussion and turning it into groundhog day.
Down with that sort of thing!
 
PhoenixVIP
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 1:42 pm

Quoting NAV30 (Reply 111):

A380-900 are 'enlargements,' not mere replacements for over 200 the EK want to order. My own guess is that that is all Airbus need aim at, it's pretty clear that a 380-seat twin-engine B779X will be less than a match (in financial and all other terms) for the four-engined A380-900 at 650 seats. And therefore there appears to be no reason for Airbus or Boeing to go even further with yet another enlargement/upgrade, at the present time or near future until new technologies are sought for even better stretches?
Inspire the truth.
 
NAV30
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 2:07 pm

Quoting PhoenixVIP (Reply 115):
My own guess is that that is all Airbus need aim at, it's pretty clear that a 380-seat twin-engine B779X will be less than a match (in financial and all other terms) for the four-engined A380-900 at 650 seats.

Of course you could be right, PhoenixVIP. But, in my view, we have to look at the full picture. Yes, Airbus look like retaining their lead with the A380, as far as the world's biggest airports are concerned.

BUT, they have virtually nothing with which to counter Boeing's lead on mid-sized aeroplanes like the B787 and B779, which can cater for almost ALL other airports world-wide; except the A350, which (though a very promising design) is 'late to the field,' with only about six aeroplanes in service so far? As an ex-European, that kind of 'upsets' me........ I'd be much happier if both 'sides' were operating on more level terms.

Don't get me wrong - I fervently believe in competition. But Airbus, through giving absolute priority to the A380 for years, seem to have ceded the main 'playing field' to Boeing 'on a plate'?

[Edited 2015-10-18 07:22:39]
 
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par13del
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 2:52 pm

Quoting zeke (Reply 110):
As far as I am aware the IAS 11 contract accounting is only for the first two batches of A350s (around the first 20 made).
Quoting speedbored (Reply 112):
The change to contract accounting is simply to provide a more accurate picture, in accordance with IAS standards, of what the money is being spent on.

So something is going to change after the first 20 are produced to ensure that normal accounting will provide a clear picture, is the initial two batches financed differently than the rest of the orders?
 
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zeke
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 3:25 pm

Quoting par13del (Reply 117):
So something is going to change after the first 20 are produced to ensure that normal accounting will provide a clear picture,

The first two batches had a series of changes in the manufacturing, they had very high production man hours. Generally speaking, the 10th aircraft will have half the man hours as the 1st. Batch 3 is supposed to be at spec weight, with the new cabin.

AFAIK they are not financed differently, however they wanted to account for the high initial production costs, and production stoppage when they required to fix an issues.

To put this in context, 8 of the first 18 A350s are in service with airlines already, and only 4 of the 787s out of the first 20. The man hours required to update the initial 787s may exceed their value, they may end up being scrapped.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
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BaconButty
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 3:35 pm

Quoting par13del (Reply 117):
So something is going to change after the first 20 are produced to ensure that normal accounting will provide a clear picture, is the initial two batches financed differently than the rest of the orders?

As I tried to explain on the other thread, it doesn't really matter if they stop contract accounting or not, since over time it will tend towards the results yielded by accounting on a unit basis anyway! I.e. as time moves on, you will get to the point where the first frame delivered as part of a contract costs nearly the same as the last frame. This just smooths out the early build anomalies.
And contract accounting is "normal".
Down with that sort of thing!
 
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Revelation
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 3:43 pm

I found the source link: http://www.latribune.fr/entreprises-...tre-la-main-a-la-poche-513886.html and interestingly enough Google Translate renders the title as "A380 Neo: Emirates Airbus asks to put the hands in the pocket"!

Quoting prebennorholm (Reply 86):
It is not like Airbus would have any problems to finance a NEO. They just want to be pretty sure that the money is well spent.

I think finding 3B EUR to spend on a project with such uncertain returns is a problem for any corporation.

Quoting NAV30 (Reply 90):
It's axiomatic that if someone has ordered a new model that hasn't flown yet, and the new model eventually fails to meet the specified performance, the prospective purchaser has the option of voiding the contract. That would apply both to any upgraded B777 AND to any upgraded A380. Therefore using the term 'firm' is inappropriate until the aeroplane can be shown to have met specification.

Unfortunately for you, the entire aviation industry, and indeed the entire business world, has already settled on the use of the word 'firm', and that means a contract with firm financial commitments has been signed, regardless of any cancellation clauses in said contract that might make it seem less firm. I find your attempt to redefine 'firm' adds much more confusion than clarity, so I think you should stop it.

Quoting speedbored (Reply 104):
As far as reality is concerned, a firm order is a firm order as soon as the contracts are signed. Almost every single contract contains cancellation and termination clauses, which may or may not come into play as events pan out, none of which alter the fact that a firm contract is a firm contract.

  

Quoting speedbored (Reply 104):
I suspect that what Airbus are seeking is a sufficiently firm commitment from EK, on delivery rates and prices, to reduce the program risk to a level at which Airbus can feel comfortable going ahead with it.

The translation says:

Quoting Matt6461 (Thread starter):
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.

You've only listed two of the items. Clearly Airbus is asking for contributions to finance the development of the program in addition to commitments on the number of orders and delivery rate.

Quoting seahawk (Reply 105):
Nothing new in the article.

Airbus asking EK to help finance development of the program certainly is new, and the 3B EUR price is new.

Quoting seahawk (Reply 105):
You can have new articles about the NEO each week, yet the business case won´t be any better from that. A NEO to gain 5% better engine performance makes no sense for the airframe manufacturer, especially not at current fuel prices.

Why be so impatient? You are asking to know if the couple will be married, and we're just talking about the latest date.

On the other hand, your suggestion of ultimate futility is valid. Spending EUR 3B to put an engine with 5% improvement in fuel burn seems to be a non-starter. The last NEO that got a commitment was A330neo which looked like:

http://i0.wp.com/leehamnews.com/wp-content/uploads/2014/07/screenshot-2014-07-14-19-00-38.png

It looks like Airbus is having a hard time coming up with a similar slide for A380. If one emerges, I'm sure they will change the "per seat" part of the equation to make up for the lack of much fuel burn improvement.

Quoting Ruscoe (Reply 107):
Airbus have much more pressing places to put their cash than into the 380.

Saving the A380 program from a likely future collapse has to be a pressing need, but unfortunately there isn't good enough technology available at the right time and at a low enough cost to make a NEO program very attractive.

Quoting zeke (Reply 88):
The UAE have been trying to establish aircraft manufacturing base, a risk sharing partnership may have spin offs beyond just financing, it may enable the UAE to manufacture as part of the deal.

Which is another way of saying any money UAE might invest will come with strings attached, ones that certainly will add cost to the program.

Quoting BaconButty (Reply 114):
If it happens, my guess will be a JV set up capitalised by A and EK, which would sub-contract A to develop A380-900NEO. The JV would then have exclusive rights to market the airframes, taking a cut as they sell.

And yet the article says "Visibly Emirates would not be willing to finance such co-development".

As above UAE's and EK's near term fiscal challenge in the aviation sector is DWC. It would seem to not leave a lot of money available for a marketing and/or manufacturing partnership on the A380. Besides, if you were proposing to get involved in aircraft marketing and/or manufacturing, wouldn't you want to do so on a program with a lot better prospects for success?
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olle
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 3:47 pm

Quoting NAV30 (Reply 116):

BUT, they have virtually nothing with which to counter Boeing's lead on mid-sized aeroplanes like the B787 and B779, which can cater for almost ALL other airports world-wide; except the A350, which (though a very promising design) is 'late to the field,' with only about six aeroplanes in service so far? As an ex-European, that kind of 'upsets' me........ I'd be much happier if both 'sides' were operating on more level terms.

Airbus has moved from 0% to 》50% market share of nb in 30 years.

It has moved from close 0% to 40% market share of wb in 30 years.

They must be crying...
 
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zeke
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 4:00 pm

Quoting Revelation (Reply 120):
It looks like Airbus is having a hard time coming up with a similar slide for A380. If one emerges, I'm sure they will change the "per seat" part of the equation to make up for the lack of much fuel burn improvement.

Come on, that is pure Boeing fanboyism. There is no reason that process cannot be applied to any aircraft in service, e.g. A320neo, 737max, 748, 777X, A330neo.

Quoting Revelation (Reply 120):
Which is another way of saying any money UAE might invest will come with strings attached, ones that certainly will add cost to the program.

Does not need to add cost at all, UAE is looking for ways to diversify away from oil, they want new industries, and aircraft parts need to be built. Airbus is always looking for additional production capacity.
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seahawk
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 4:13 pm

Quoting Revelation (Reply 120):
Airbus asking EK to help finance development of the program certainly is new, and the 3B EUR price is new.

Imho just another from of Airbus requiring a more than serious commitment by EK.

Quoting Revelation (Reply 120):
Why be so impatient? You are asking to know if the couple will be married, and we're just talking about the latest date.

On the other hand, your suggestion of ultimate futility is valid. Spending EUR 3B to put an engine with 5% improvement in fuel burn seems to be a non-starter. The last NEO that got a commitment was A330neo which looked like:

Imho one thing is clear and that is that the NEO will be stretch too. EK talked about 13% lower CASM, which imho is impossible with a pure NEO. The A380 and its current engines are ready for the -900 the question is why do they even want a NEO and there the answer is range imho. A NEO could offer more range and 13% lower CASM, but it would be tailor made for EK. Apart from EK all other users are more interested in lower trip costs, so they would probably prefer a lower price (lower capital costs) or a NEO which would reduce the trip costs more, which imho is not possible with currently available engines. So they will be probably looking a later launch date for a NEO. My gut feeling says that either EK pays a big part of the development or it won´t happen.
 
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Revelation
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 4:47 pm

Quoting zeke (Reply 122):
Does not need to add cost at all, UAE is looking for ways to diversify away from oil, they want new industries, and aircraft parts need to be built. Airbus is always looking for additional production capacity.

For your scenario to play out, the sheiks have to be convinced that A380neo is the right investment, and then they have to finance and build out the facilities in a locality with little to no background in aviation manufacturing and said operation has to deliver full quality on time and the sheiks have to agree to eat any cost overruns involved. That's a big ask, IMHO.

Quoting seahawk (Reply 123):
mho one thing is clear and that is that the NEO will be stretch too.

The 3B EUR price tag also supports that position.

This all gives us the suggestion that Airbus probably feels a simple re-engine alone does not deliver enough value to make it a viable program, the stretch is needed to add value.

I tried to find a cost estimate for A330neo for comparison and came up with:

Quote:

Airbus will incur a development cost of between one and two billion euros (US $1.4 – 2.7 billion) for the A330neo, which will feature several changes from the existing platform.

Ref: http://airwaysnews.com/blog/2014/07/...eo-as-a-competitor-for-boeing-787/

Not the best sourcing ever, but it seems credible to me.

Thus it seems Airbus is seeing a 50% - 100% increased cost for A380neo vs A330neo, which suggests A380neo's scope is larger. It suggests A380neo will be a stretch, or perhaps it'll include building and certifying both -800 and -900.

Quoting seahawk (Reply 123):
So they will be probably looking a later launch date for a NEO.

The article says they will "donate time", so, yes, you have plenty of time to pick your wedding clothes!
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
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speedbored
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 4:48 pm

Quoting NAV30 (Reply 116):
except the A350, which (though a very promising design) is 'late to the field,'

Late to the field compared to the 779 that Boeing is "leading" with? Yes, of course it is   

Quoting Revelation (Reply 120):
You've only listed two of the items. Clearly Airbus is asking for contributions to finance the development of the program in addition to commitments on the number of orders and delivery rate.

That is because I believe that the "contribution" that Airbus are seeking will come in the form of deposits and higher sales price (than the ceo) via firm order(s) from EK. I would be very very surprised if Airbus are seeking any other sort of financial stake in the project.

It is worth taking into account that all of this article is based on information from unnamed sources and there are very few quotations. so it is almost entirely journalistic interpretation which I find, these days, is almost always as sensationalist as possible. Google is also altering the meaning with poor translation in a few places so it is better to only look at the original French.

Even if this story is true (and I am very sceptical about some of it), I suspect that the truth is far simpler than what is being presented. I suspect that what Airbus is really seeking is a sufficiently concrete commitment from EK to reduce the risk in doing this project almost entirely for a single customer.

I will admit that my interpretation of this article is being coloured somewhat by what I am also hearing on the rumour mill, but it all looks just like normal commercial terms negotiations to me.
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 4:53 pm

Quoting Revelation (Reply 120):
The translation says:

Quoting Matt6461 (Thread starter):
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.

You've only listed two of the items. Clearly Airbus is asking for contributions to finance the development of the program in addition to commitments on the number of orders and delivery rate.

Number of orders, delivery rate... what's obviously missing is the price.

A "contribution to finance" could already be achieved by agreeing to higher upfront costs and a reduced discount. I think many on here are reading way too much into the whole "co-finance" thing.

Quoting Matt6461 (Reply 16):
The fact that Airbus is asking for creative transactional schemes

Are they? This whole thread is based on one article translated with google.
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 5:07 pm

Quoting speedbored (Reply 125):
I suspect that what Airbus is really seeking is a sufficiently concrete commitment from EK to reduce the risk in doing this project almost entirely for a single customer.

I have seen this mentioned by other posters, what exactly is this, has EK welched on a previous commitment that had penalties and ignored them? Yes, they cancelled the initial A350 order, but unlike Skymark, Airbus did not initiate legal action so I have to assume - mother of all evils - that EK did the cancellation via legal means acceptable to Airbus.
So in other words, what has to be different from all the other orders that airlines place with either OEM on a daily basis to warrant an additional commitment?
I am more inclined to believe as it relates to the A380 it is about maintaining a consistent delivery rate to ensure the program continues on its march to full profitability. If the project goes ahead and NEO's and CEO's are being produced together for a period of time, can Airbus maintain the production rate desired - 20 to 30 frames easily doable - and the client / clients accept the completed frames and putting them into service to recoup their investment.
If that is the case, other than having space for the frames - for which a storage fee will be charged - can Airbus modify the agreement that the client makes the final payment on completion of the frame - client test flights et. al - even though they store the frame for a few months before fly away?
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 5:07 pm

Quoting NAV30 (Reply 116):
BUT, they have virtually nothing with which to counter Boeing's lead on mid-sized aeroplanes like the B787 and B779, which can cater for almost ALL other airports world-wide; except the A350

"they have virtually nothing.....except the A350" is like saying "I'm almost broke.....other than this wad of cash in my pocket". I mean, do you really look at the current marketplace and see Airbus as on the ropes?

Counter the 787?

A321neoLR
A330-200/300
A330-800/900
A350-900

Counter the 779X?

A350-900/1000
A380-800

There are PLENTY of products in the Airbus lineup that are both competitive and compelling. The A350 is selling great, and the 777 replacement market is only going to get stronger. The A330neo is a low cost, low risk option to compete with the 787. Airbus even has a narrowbody that is starting to stretch it's legs and can theoretically go into some traditionally WB markets, taking some very low end WB sales.

Conversely, Boeing has a range-limited 78X, a quite-large-almost-niche 777X program, and ..... crickets. I think it would be silly to bring either the MAX9 or the 748i into the conversation for risk of getting laughed out of the forum.

Which lineup would I prefer to have:

A32Xneo
A330neo
A350
A380

vs

737MAX
787
777X
748i

?

To me, not a difficult choice. I'd currently choose Airbus. More capable narrowbody, low cost low end widebody, more modern high end widebody, and a viable VLA.

-Dave
-Dave


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Revelation
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 5:23 pm

Quoting speedbored (Reply 125):
That is because I believe that the "contribution" that Airbus are seeking will come in the form of deposits and higher sales price (than the ceo) via firm order(s) from EK.

In the phrase "contributions to finance development", you seem to focus on the word "contribution" whereas I focus on the word "finance". That's fair, we just interpret the statement differently.

Quoting speedbored (Reply 125):
I would be very very surprised if Airbus are seeking any other sort of financial stake in the project.

That's quite fair -- you certainly are entitled to such an opinion.

Quoting flood (Reply 126):
This whole thread is based on one article translated with google.

Yes, that's the nature of this site -- all we really have to go on is press reports and the occasional insider gossip. However if the reports are false I personally would expect someone from EK or Airbus seeking to clarify their positions.

Quoting PlanesNTrains (Reply 128):
"they have virtually nothing.....except the A350" is like saying "I'm almost broke.....other than this wad of cash in my pocket".

  

I'm really surprised at all the blatant disrespect the A350 seems to still attract. The a/c is aimed right at the sweet spot of the market, has plentiful orders from blue chip customers, and has executed almost perfectly to plan, from design to manufacturing to EIS to early ramp up it's ticking all the boxes. What more do you want from a program?

Quoting PlanesNTrains (Reply 128):
To me, not a difficult choice. I'd currently choose Airbus.

Certainly fair to chose Airbus. I'd chose Boeing because the sweet spot of the market is the twin engined widebody and Boeings products cover a broader swath of that. A330neo is there because it's cheaper to build but as 787 becomes more available A330neo will decline. A350 covers the middle of the market but is undermined from below by 787 and above by 777X. A350 really can't grow into 777X territory without huge investments and it's already shown it can't shrink. So A350 is an excellent product that is doing very well, but it's bracketed by two other excellent products that are also going to be very successful, and given the choice I'd rather have the two excellent products. Of course that's no disrespect to the A350, it's an excellent product too.

Of course, all of the above are vulnerable to cheap oil making used a/c a lot more attractive then they were 10 years ago, and the record production rates making such used a/c so widely available.

[Edited 2015-10-18 10:35:25]
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 6:04 pm

Quoting PlanesNTrains (Reply 128):
Conversely, Boeing has a range-limited 78X, a quite-large-almost-niche 777X program, and ..... crickets. I think it would be silly to bring either the MAX9 or the 748i into the conversation for risk of getting laughed out of the forum.

It is the weekend so I will dabble in some laughter.

You had a fairly analytical post, then you evolved into the exact same rhetoric you sought to refute.

"Range limited 78X" - For the targeted airlines, this plane seems to have a great offering for CASM, Payload, etc.

739Max - I would like to use the same phrase proA321 vs 757 posters use. "The A321 covers 95+% of all routes the 757 flies." Applied to the 739MAX, I would be willing to bet the 739MAX can fly near 95% of the routes the A321neo will fly. I would also point that the vast majority of those routes are much shorter, where the efficiency,weight etc of the 737Max might just prove to be very desirable.

In the age where the large airlines support a mixed fleet, it is ridiculous to declaratively state Airbus has the superior offering. It is the nature of a duopoly in the manufacture space and scale on the airline side. Depending on the airline, configuration and use case, they are going operate all of the above listed airframes, in some combination. It wont be the same across airlines.

Look at the 787 - Dense Domestic, Dense International, Long and Thin, Low density long and thin (heck that is just ANA).
I am sure A350 will look like this within a few years too.

A332 today - Domestic config, mid haul, long haul ( Look at Delta vs HA)

There are countless examples.

Look back historically, the A300, DC10, 767, 777, all of them were operated effectively and profitably for operators that used them in different configurations and use cases.

Scale, logistical/operational technology are going to make this even more prevalent with new and future aircraft.

Everyone can have their opinion of who is better or better positioned, but the duopoly of the commercial Aviation market isn'g going to have A pull away from B or B from A.
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 6:27 pm

Quoting airzona11 (Reply 130):
You had a fairly analytical post, then you evolved into the exact same rhetoric you sought to refute.

I think it's very true that every airframe has a sweet spot that someone will choose for their fleets. "Range-limited 78X" is not to say it's not a great airframe without a purpose". It's to say "Not as capable". With the MAX, I'll let the numbers speak for themselves. The A321 is close to opening transatlantic options. For a narrowbody fleet, having that option might allow you to defer a widebody purchase, saving tens of millions of dollars. A MAX is simply not as capable or relevant in that scenario. That's not to say that I don't like the MAX - it's to say that it's not as capable of a family as the A32Xneo.

My words aside, my point was that Airbus is not in a bad spot. They are competitive in most segments, if not market leading. And I'm a Boeing fanboy (of sorts).

Quoting airzona11 (Reply 130):
In the age where the large airlines support a mixed fleet, it is ridiculous to declaratively state Airbus has the superior offering.

It's not ridiculous at all. IF I HAD TO CHOOSE ONE LINEUP - I'd choose Airbus' - currently. I'm not saying that I think airlines shouldn't have a mixed fleet. How boring and pointless. However, my personal opinion is that Airbus has the OVERALL more compelling lineup - today.

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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 6:39 pm

Quoting BaconButty (Reply 114):
1. Not sure why there's any suggestion there would be any impropriety with such a setup. There's a bit of vertical integration, but it's hardly like, say, an airline owning an oil refinery

There is an issue in the US. If you remember in the 30's Boeing, United Airlines, and PW were united into one conglomerate, and the government came after them and forced a breakup under antitrust laws. It also proved to be detrimental to Boeing, as they had come out with the first really modern airliner, the 247, and since United was part of the company United got all of the early production. AA did not like sitting on the sidelines, and so the president of AA went to Donald Douglas and pushed him to build a better airliner, which he did (the DC-2.) The rest, as they say, is history. There is no precedent of an airline owning a refinery, and so there has been no clamor against it. But if Airbus and EK get in bed too closely on the A380 I am sure all of the US airlines will cry foul, and Airbus may have legal problems selling in the US. The airlines do not want to keep Airbus out of the US, but they do not want to see EK get an even bigger competitive edge, which they would fear would be the result of this deal
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 6:50 pm

Quoting par13del (Reply 127):
So in other words, what has to be different from all the other orders that airlines place with either OEM on a daily basis to warrant an additional commitment?

Firstly, I have no reason to suspect that the A350 cancellation was not done fully in accordance with their contract.

The problem that I see for Airbus is that a cancellation, well in advance of delivery, usually results in the manufacturer, at best, retaining any deposits. In the case of large orders, to be delivered over a significant time period, the up-front deposit will often be pretty small on a per-aircraft basis. I suspect that Airbus are worried that, even if EK committed to, say, a huge 200 frame order, and Airbus then went ahead and spent $3bn on development, their normal contracts would still make it possible for EK to cancel their order at a cost of, at most, a few hundred million.

Airbus would then be left trying to recover almost the entire $3bn development cost from the small number of frames that might be ordered by other airlines, which would most likely be an impossible task due to the very low production rate that those orders would be able to support.

I suspect that Airbus are simply seeking greater up-front payments, and/or larger cancellation penalties, to ensure that they will not be left so far out of pocket if EK did change their mind and reduce or cancel their order(s).

Quoting flood (Reply 126):
A "contribution to finance" could already be achieved by agreeing to higher upfront costs and a reduced discount. I think many on here are reading way too much into the whole "co-finance" thing.

   That's how I'm interpreting it.
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 7:23 pm

Quoting PlanesNTrains (Reply 128):
Counter the 787?

A321neoLR
A330-200/300
A330-800/900
A350-900

Counter the 779X?

A350-900/1000
A380-800

There are PLENTY of products in the Airbus lineup that are both competitive and compelling. The A350 is selling great, and the 777 replacement market is only going to get stronger. The A330neo is a low cost, low risk option to compete with the 787. Airbus even has a narrowbody that is starting to stretch it's legs and can theoretically go into some traditionally WB markets, taking some very low end WB sales.

Conversely, Boeing has a range-limited 78X, a quite-large-almost-niche 777X program, and ..... crickets. I think it would be silly to bring either the MAX9 or the 748i into the conversation for risk of getting laughed out of the forum.

Which lineup would I prefer to have:

A32Xneo
A330neo
A350
A380

vs

737MAX
787
777X
748i

?

To me, not a difficult choice. I'd currently choose Airbus. More capable narrowbody, low cost low end widebody, more modern high end widebody, and a viable VLA.

The problem I see with Airbus' lineup is that I see a huge consolidation of size within a similar size bracket.

I doubt the A330-800neo will have any sizable orders anytime soon. The A330-900neo should do well, but the A350-900 is right there. Any airlines wanting some additional capabilities would easily go for the A359, which has proven to be a financial success.

The A350-1000 is not selling as fast as I expected it to, and the 777X has nearly outsold it by a ratio of 2:1. It's lighter, burns less fuel, but as I said on another thread, the 777-8 trumps the A35K with range, and the -9, with size.

The A380 may be a viable VLA, but it's not selling. The 747-8 isn't either.

The fight is more ferocious on the narrowbody end. The A319neo has been outsold by the 737 MAX 7, but that hardly counts, seeing as the smallest of those families never sell anymore.

The A320neo and 737 MAX 8 are true competitors and each are very attractive to the airlines. The real star of the Airbus narrowbody line is the A321neo. The 737 MAX 9 falls short of it on every front.

The 787 is doing well, the best selling model being the -9. As time goes by, I believe we'll see the -8 fall out of favor and be replaced by an NLT, which I'll touch on in a second. And then we have the 787-10, which is claimed to be the most efficient widebody airliner on the market, which will surely give the A350-900 a run for the money. As the recent order by EVA shows, the 787-10 will certainly be popular in the years ahead.

Boeing's next fight is the NSA (and) NLT, which would effectively replace the 737, 757, 767-200 and, possibly, the 787-8. Two planes the size of the 737 and two larger models the size of the 757, developed side by side, is what I envision, and a lot of people are thinking Boeing could launch said aircraft as early as 2018/19.

While Airbus has the:

A319neo (which won't sell well)
A320neo
A321neoLR
A330-800neo (which probably will sell slow, if at all)
A330-900neo
A350-900
A350-1000
A380 (which has a questionable future as well)

Boeing has the:

737 MAX 7 (which won't sell well as well)
737 MAX 8
737 MAX 200
737 MAX 9
787-8 (which will probably fall out of favor as time progresses)
787-9
787-10
777-300ER
777-8
777-9
747-8i (which isn't selling)

But what happens if those aircraft that's don't sell well are removed and new aircraft are introduced?

A320neo
A321neo
A321neoLR
A330-900neo
A350-900
A350-1000
A350-1000HGW (OR) Airbus Supertwin (A360?) (OR) A380-900neo

Vs.

NSA7
NSA8
NSA9 (NLT9)
NSA10 (NLT10)
787-9
787-10
777-8 (perhaps replaced by a 777-9LR)
777-9
777-9LR/HGW(?)

So the reality is, I'd choose both. Both companies have planes I would want to use.
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 7:28 pm

Quoting HALtheAI (Reply 40):
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.

They have other, smaller planes they can defer if they need to lower the amount of frames they take but continue to grow. I ask if anyone knows if DXB can take more A380's if they are in place of other, smaller frames?
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 8:25 pm

Quoting Revelation (Reply 120):
And yet the article says "Visibly Emirates would not be willing to finance such co-development".

My French is schoolboy, but doesn't visiblement mean obviously, or publicly? Implying that they would like to achieve the same ends more . . . discretely? I'm better with French wine than their language though.

Having said that, this is probably closer to the mark than my suggestion:
Quoting speedbored (Reply 133):
I suspect that Airbus are simply seeking greater up-front payments, and/or larger cancellation penalties, to ensure that they will not be left so far out of pocket if EK did change their mind and reduce or cancel their order(s).
Quoting SEPilot (Reply 132):
There is an issue in the US. If you remember in the 30's Boeing, United Airlines, and PW were united into one conglomerate, and the government came after them and forced a breakup under antitrust laws.

The fallout from the Air Mail scandal is a world apart from a JV to bring one derivative model to market that has been on offer to the wider airline community for some time without takers. As I said above, I think I was reading too much into it, and revelation/speedboard et al are probably on the money suggesting Airbus requiring a higher level of upfront commitment. I still believe what I suggested would be an interesting solution, though.

Quoting SEPilot (Reply 132):
There is no precedent of an airline owning a refinery, and so there has been no clamor against it.

And I thought Delta did buy a refinery recently?
Down with that sort of thing!
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 8:41 pm

Quoting LAX772LR (Reply 62):
Is this just bad math, or is there another outstanding order in trouble? LH's cancelled 1?

The true number of bad orders is more like 52:

-Amedeo's 20
-Virgin's 6
-QF's 8
-Transaero's 4
-Hong Kong's 10
-AF's 2
-Air Austral's 2

265 real orders. I don't think the final delivery tally will be much above that, if at all.

Quoting Clipper101 (Reply 64):
When following-up all along on the discussions over A380neo, I am getting to a conviction that touching current wing could spell to an A380neo in a combination of a new wing platform plus new engine (on the outside, do not know if there would be any improvements regarding systems/avionics)
So, when we are talking A380neo, what exactly we are talking about?

Good question. Airbus is clearly not talking about a rewing - yet. It's probably the only way to sell decent numbers of A380's, so down the line this option will probably come up. It's very expensive, but should always be thought of as an option for the A380.

Quoting airzona11 (Reply 76):
The trend is not for larger 4 engine planes. It is for larger twins (A35K, A321, 789/10, 77W,77X, A333/9, 739). Period.
Quoting Ruscoe (Reply 94):
The only reason to have four engines is to get the thrust necessary to move the mass.

The fact is that the A380 has lower per-pax maintenance costs than contemporary twins like 77W. Yes the trend has been to twins, but it is far from clear this trend should hold for VLA's.

A quad has many advantages over a twin, especially for bigger planes, including:
-greater wing bending relief
-lower overall thrust requirement
-shorter, lighter landing gear
-better optimization of engine for cruise

These benefits are likely outweighed by higher acquisition costs at smaller size levels. But it isn't the slam dunk we all seem to think. The A340-300, for example, compares pretty well against the 77E, despite being an older design.

Quoting HALtheAI (Reply 83):
Kinda cherry-picking there by assuming that the Trent XWB doesn't receive a PIP of its own during that time period.

Fair enough. And the TWXB derivative would almost certainly incorporate some Advance technologies. Still don't see how you get much beyond 6-8% SFC delta though.

Quoting zeke (Reply 88):
For an airline that is not interested in the type they spend a long time evaluating it, and have senior managers fly it.

What part of "the carrier is not interested in the A380neo" don't you understand? http://centreforaviation.com/analysi...et-is-not-returning-loyalty-240554

Quoting Revelation (Reply 120):
I found the source link

WHAT AN ERROR BY ME!! Apologies to forummers for forgetting to post this at the outset. THanks for digging, Rev.

Quoting seahawk (Reply 123):
EK talked about 13% lower CASM, which imho is impossible with a pure NEO.

In every quote I've seen, STC talks about ~13% better "unit costs" or something ambivalent like that. I agree that 13% lower CASM is impossible with a NEO.

IMO if Airbus could get 13% lower CASM with a simple NEO, they probably already would have launched it.

Quoting Boeing778X (Reply 134):
The A350-1000 is not selling as fast as I expected it to, and the 777X has nearly outsold it by a ratio of 2:1. It's lighter, burns less fuel, but as I said on another thread, the 777-8 trumps the A35K with range, and the -9, with size.

Our two published analyses of the A35J versus 779 find that the 779 is better on fuel per passenger. The weight issue is overrated here. 779 is better aerodynamically and propulsively, the A35J only structurally.
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 8:45 pm

Quoting Matt6461 (Reply 137):
Our two published analyses of the A35J versus 779 find that the 779 is better on fuel per passenger. The weight issue is overrated here. 779 is better aerodynamically and propulsively, the A35J only structurally.

Which I'm sure is the case, especially with the 787 derived wing and empennage.

Of course, I suppose that would depend on seating, weather and actually data when the aircraft in question have flown.
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HALtheAI
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 8:56 pm

Quoting ncfc99 (Reply 135):
They have other, smaller planes they can defer if they need to lower the amount of frames they take but continue to grow. I ask if anyone knows if DXB can take more A380's if they are in place of other, smaller frames?

Actually, there is. And EK recently delayed the order for these planes till Airbus makes a decision on the A380neo. Coincidence?

I'm going to go out on a limb and say that if the A380neo is launched, it'll mean the cancellation of EK's A350/787 RFP. Wouldn't be the first time either. They cancelled their original A350 order to buy more A380s a couple years back. With DXB so space constrained, EK can't afford to be wasting valuable gate space on non-essential planes. It's not like the 787 and A350 are in danger of ceasing production, unlike their beloved whale.

Plus, why add a new type to their fleet when the 77W makes a perfectly good "small", "regional" aircraft?   
 
airfrnt
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:04 pm

Quoting Matt6461 (Thread starter):
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.

Interestingly enough, there was a research paper not to far back that looked at why Airbus launched the A380, while Boeing did not launch a 747-5/6. It came to conclusion that the biggest factor was the availability of unconventional funding - in particular launch aid from the european powers.

Now it appears that the only way this gets launched is with more unconventional funding - this time from EK.
 
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:06 pm

Quoting HALtheAI (Reply 139):
I'm going to go out on a limb and say that if the A380neo is launched, it'll mean the cancellation of EK's A350/787 RFP. Wouldn't be the first time either.

The A380 and 787/A350 would cover completely different roles.

Quoting HALtheAI (Reply 139):
They cancelled their original A350 order to buy more A380s a couple years back.

They swapped the A350 order to A380 with Airbus, but the A350's replacement in this context is the 777X. The A359 became too small and the A35K became a little too capable, extra weight for capability that EK weren't going to use.

Quoting HALtheAI (Reply 139):
With DXB so space constrained, EK can't afford to be wasting valuable gate space on non-essential planes.

They need a 'regional' widebody. The A380 and 77W/777X are not regional widebodies. Neither is the A350, but it's a lot lighter.

Quoting HALtheAI (Reply 139):
It's not like the 787 and A350 are in danger of ceasing production, unlike their beloved whale.

No, but Airbus and Boeing are keen on this order.

Quoting HALtheAI (Reply 139):
Plus, why add a new type to their fleet when the 77W makes a perfectly good "small", "regional" aircraft?

The 77W is a long range plane. The 78X in particular makes a much better regional aircraft.
 
PhoenixVIP
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:07 pm

Quoting NAV30 (Reply 116):

Of course you could be right, PhoenixVIP. But, in my view, we have to look at the full picture. Yes, Airbus look like retaining their lead with the A380, as far as the world's biggest airports are concerned.

BUT, they have virtually nothing with which to counter Boeing's lead on mid-sized aeroplanes like the B787 and B779, which can cater for almost ALL other airports world-wide; except the A350, which (though a very promising design) is 'late to the field,' with only about six aeroplanes in service so far? As an ex-European, that kind of 'upsets' me........ I'd be much happier if both 'sides' were operating on more level terms.

Don't get me wrong - I fervently believe in competition. But Airbus, through giving absolute priority to the A380 for years, seem to have ceded the main 'playing field' to Boeing 'on a plate'?

[Edited 2015-10-18 07:22:39]

Yes the A380 has more orders than the 777X yet the 777X hasn't flown yet to your definition so nothing's firm. At least the A380 is flying.

They have the A350 and A330 to counter Boeing's wide body and funny enough now the 777-9X is labeled as mid size by NAV0/20/30/70/380 so breaking news everyone!!!! The 777X is mid size only and therefore cannot compete against any A380neo etc. I love the blunders.

Boeing ceded the playing field with their 787 blunders and late arrival with the 777X proposals. Now they're talking about a 777-10X because they know they need to cover a further gap in their lineup.

But please, stop taking this thread off topic with the numerous copy and paste rubbish.

Quoting PlanesNTrains (Reply 128):

Range limited but over time will improve and has a huge A330-like potential depending on how Boeing optimise this frame. It will be an excellent frame.

Quoting Matt6461 (Reply 137):
IMO if Airbus could get 13% lower CASM with a simple NEO, they probably already would have launched i

Only concern with this is if 13% means doing the stretched A380-900 it's actually not really a significant saving of sorts to warrant any A380. Not at least until a further CEO order can be placed.
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MrHMSH
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:09 pm

Quoting Matt6461 (Reply 137):
Our two published analyses of the A35J versus 779 find that the 779 is better on fuel per passenger. The weight issue is overrated here. 779 is better aerodynamically and propulsively, the A35J only structurally.

I thought the difference was marginal, with unit cost difference being almost identical to the 738/A320 difference?
 
GavinSharp
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:18 pm

Quoting BaconButty (Reply 136):
Quoting Revelation (Reply 120):
And yet the article says "Visibly Emirates would not be willing to finance such co-development".

My French is schoolboy, but doesn't visiblement mean obviously, or publicly? Implying that they would like to achieve the same ends more . . . discretely?

In this context I think it means "apparently", as in "apparently, Emirates would not be ready to finance such a co-development".
 
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speedbored
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:20 pm

Quoting Matt6461 (Reply 137):
What part of "the carrier is not interested in the A380neo" don't you understand?

No need to be so rude.

Given that Zeke actually works for said carrier, in a senior role, I suspect that he has a far better knowledge about what is or is not going on at the moment than some Bloomberg journalist.
 
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Matt6461
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:22 pm

Quoting MrHMSH (Reply 143):
I thought the difference was marginal, with unit cost difference being almost identical to the 738/A320 difference?

Per AirwaysInsight's analysis, the CASM delta on a ~6000nm trip is ~4%, varying with fuel cost of course. http://airwaysnews.com/blog/wp-conte...015/01/Operating-Cost-Analysis.jpg

Leeham arrived at a similar number.

Quoting PhoenixVIP (Reply 142):
Only concern with this is if 13% means doing the stretched A380-900 it's actually not really a significant saving of sorts to warrant any A380. Not at least until a further CEO order can be placed.

Yeah I'm always assuming that the NEO won't be a true -900. Perhaps that plane could approach 13% CASM delta, but its trip cost would be so huge that it wouldn't sell many copies.

Even for EK, there's a trip cost/CASM tradeoff that would probably result in fewer A380's ordered if the -900 were the only offering. There's a reason EK operates many more 777's than A380's. Make the A380 too big and it doesn't work even for EK on a lot of routes. That's why STC has been saying the A380 doesn't need to be any bigger. Sure he'd love to see the -900 as another family member, but he'd probably prefer the -800 or maybe -850 if there's only one A380 - as there almost certainly will be.

This simple fact just reiterates how deeply misplaced was Airbus' decision to optimize for the -900. 15 years after program launch *nobody* is clamoring for more size.

Airbus needs to go back to the drawing board here. Clean sheet VLA, rewing, cheap PIP for a few EK orders, or program termination. The NEO isn't happening.
 
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777Jet
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:28 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.

Good on Airbus.

If EK aren't interested in contributing finances to something they just they really want, then I would hope that Airbus announces that it won't be going ahead with it until things change.

Then let's see how bad EK want the NEO.
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MrHMSH
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:31 pm

Quoting PhoenixVIP (Reply 142):

Yes the A380 has more orders than the 777X yet the 777X hasn't flown yet to your definition so nothing's firm.

Let it go mate. You're as bad as him.

Quoting Matt6461 (Reply 146):

Per AirwaysInsight's analysis, the CASM delta on a ~6000nm trip is ~4%, varying with fuel cost of course.

I had 2% in my mind for the A320/738. I maintain though, the A35K and 779 are close enough in unit costs that you'd buy based on what capacity you wanted.
 
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SEPilot
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 9:52 pm

Quoting BaconButty (Reply 136):
Quoting SEPilot (Reply 132):
There is no precedent of an airline owning a refinery, and so there has been no clamor against it.

And I thought Delta did buy a refinery recently?

Yes, they did, which is why it was brought up. And as I said, there is no precedent for that, and hence nothing to give opponents any ammunition. But there has been legal precedent established that an airline cannot be part of the same conglomerate as an airliner manufacturer, and that is my point.
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Matt6461
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 10:03 pm

Quoting MrHMSH (Reply 148):
I maintain though, the A35K and 779 are close enough in unit costs that you'd buy based on what capacity you wanted.

This is probably right for many operators. CX said something to this effect about its order for both types.

But I think the marginal cost of the extra capacity has to be looked at too. If you have a big hub, and were thinking of buying A35J, the economics of the 777-9 might convince you to upgauge. Trip cost is about 10% higher, capacity about 15% higher. A big hub operator like CX gets about 75% of the RASM from transfer pax as it does for O&D.

http://centreforaviation.com/analysi...et-is-not-returning-loyalty-240554

Quote:
48% of Cathay's throughput and 41% of revenue are from connecting passengers

The marginal capacity of the 777-9 is cheaper than, or approximately equal to, that 75% figure. So if CX has the connecting capacity to board more transfer pax on the long haul leg, it's probably profitable to upgauge. Plus 777-9 has better payload/range and more cargo volume so you can sell more belly freight. I think this is part of why the A35J has sold very few frames (any?) since the 779's launch.

...and to bring it back to the topic, that marginal capacity cost ("MCC") calculus is what Airbus needs to address with the A380. The CEO's MCC versus the 77W is up around 80%, higher if cargo is included. Against the 779 its MCC is at least 100%. So upgauging to chase transfer pax doesn't make economic sense at that capacity/efficiency tradeoff. Keeping total capacity constant, while losing frequency, also doesn't make sense with those economics.

To offer the same MCC over the 777-9 as the CEO offered over the 77W requires ~10% CASM delta, and that only replays the CEO vs. 77W competition - not an appealing proposition IMO.

I know of written about this conceptual framework before, can get repetitive... Some new folks on this thread, though, so figured I'd restate for them.
 
tortugamon
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RE: Airbus Presses EK To Finance A380neo

Sun Oct 18, 2015 11:14 pm

Quoting par13del (Reply 113):
Well if an airline who works on 10 year leases orders a batch of a/c which will take more than 10 years for delivery, they will have to source replacements for the early deliveries before completion of the order.
Or am I missing the time frame that EK has to receive all the A380's that they have ordered?

In reply #79 I laid out when their aircraft will be coming off lease and my conclusion was that EK shouldn't be desperate for an A380 replacement before 2024 or so. That is 8-9 years away. I don't see an immediate launch as absolutely necessary.

Quoting Revelation (Reply 120):
Saving the A380 program from a likely future collapse has to be a pressing need, but unfortunately there isn't good enough technology available at the right time and at a low enough cost to make a NEO program very attractive.

Well stated. Agreed.

Quoting seahawk (Reply 123):
The A380 and its current engines are ready for the -900 the question is why do they even want a NEO and there the answer is range imho.

Well the current ceo has plenty of range as its flying the longest route in operation currently. What is the benefit of even more capability? I think they will get that automatically with the aero improvements and the engine upgrade. IMO Airbus almost has to stretch the airplane to try to keep excess range/capability to a minimum. A very capable aircraft.

Quoting PlanesNTrains (Reply 128):
To me, not a difficult choice. I'd currently choose Airbus. More capable narrowbody, low cost low end widebody, more modern high end widebody, and a viable VLA.

Well you would make less money for the next 3 years, but ok!  

tortugamon

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