SeoulIncheon
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 7:43 am

IIRC A380 was originally scheduled to be delivered in 2004, when economy was peaking, then got delayed and first flight was made in 2007(right before large recession). Given that A380 was around 150 frames short of breakeven, I wonder if A380 was delayed a year or two less(and delivered in 2005/06) A380 would have broke even.

I give A340-500/600, MD-11 serious run for money in terms of being recent biggest commercial failures. A sorry attempt at trying to revive a dying programme that was decent more than a decade ago.
 
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 8:31 am

ThomasCook wrote:
After observing this thread and many other A380 related posts not just in recent weeks but in general, it really shocks me about how much joy a large number of members are taking from seeing the A380 line close. Every opportunity some get, they will say the most ridiculously negative things about what is essentially a marvel of engineering and a truly inconic aircraft that should be celebrated and appreciated and truly deserving of a place in the aviation hall of fame. I’ve worked on the A380 for 10 years now, over 630 sectors, and let me tell you, I’m delighted everytime I step back onboard. I see the customers satisfaction and excitement about flying on it. I enjoy the incredible quietness, the smooth ride, the space, the ingenuity and its intelligence in cabin systems. The aircraft is very deserving of praise so I find it really quite sad to read ‘enthusiasts’ taking such joy in stating continually that the aircraft is ‘dead’, a ‘flop’, a ‘failiure’ etc etc. Why the negatively? If you want to talk about the A380s commercial success and viability, do it in a constructive manner rather than resorting to paltry terms to describe what has come to be with the announcement of the closure of the line.

I really hate this term but ‘fanboyism’ is truly rife on this forum from all angles and it is truly ridiculous to read the posts of so called enthusiasts adding nothing to worthy of reading to thread after thread of Boeing vs Airbus posts.

Seriously, if all you’re going to post are unconstructive statements or make up some fluff with nothing to back it up in order to big up your preferred manufacturer or vice versa, just don’t bother, I’m sure myself and others are very much bored of reading it. This forum was very different when I first joined. Now...well, you get the gist.


- 100% with you, the true aircraft enthusiasts seem to have largely left, everyone else just wants to bitch about Airbus, the A380, 787 & anything else they don’t like.

We should be sad when an aircraft production line closes, not happy!
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rbavfan
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 8:51 am

brindabella wrote:
777PHX wrote:
I'm not sure why this is considered a sad thing. Minus the costs involved in shutting down production, they're all sunk costs. With this move, Airbus can utilize those resources for something else more lucrative and the company and its shareholders will be better off for it.


Unfortunately, it can all get very messy from here - and may well do so:

1) Google "Seattle Times" + "Boeing".
2) read the piece from 15th Feb. by Dominic Gates.
3) then absorb the history and analysis of the use/misuse of "RLI" and the likely content of the final WTO judgement due this year on the AB vs BA case.
4) note the previous highly-critical comments about the WTO already uttered by the President of the USA elsewhere.
5) then recall that there is a Trade War against China currently under way initiated by that same President. The grounds for the action is on the basis of China;s perceived violation of WTO trading and IP rules, among other damaging activities.
6) and now read the Gates piece again.

I think it is perfectly possible that this all has the potential to get very nasty between USA and the European countries who so readily accommodated AB's many requests for capital.

:worried:

I really wish that AB had just paid the RLI back and so put a final stop to it all.

cheers (I hope).


For those of us not in finance what is RLI? If your going to quote it please say what it is .
 
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 8:56 am

HighBypass wrote:
To have an honest discussion, we should be talking in actual figures and not uninformed estimates. Much of the talk here is far too general to carry any weight in a serious debate. Without the solid support of real figures, how can we reasonably debate this?

There are figures available on both the A380 and 787 programs that come close to reality and are generally accepted as the truth if anyone among us cares to do some serious research.

zeke wrote:
Max Q wrote:
With development costs of over $25 Billion the A380 must be the most expensive mistake ever undertaken by a civilian aircraft manufacturer, even more than the 787


Airbus didn’t even spend 10 billion developing the A380, only around 1/3 of the funds were internally generated, the rest from risk sharing partners.


"Risk sharing partners" is largely a euphemism for the taxpayers of France and Germany, and to a lesser extent, Spain, and the UK.


If your noting the figures, generally accepted as truth, for the programs are available why not post them yourself rather than mention their existence?
 
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Finn350
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 8:58 am

rbavfan wrote:
brindabella wrote:
777PHX wrote:
I'm not sure why this is considered a sad thing. Minus the costs involved in shutting down production, they're all sunk costs. With this move, Airbus can utilize those resources for something else more lucrative and the company and its shareholders will be better off for it.


Unfortunately, it can all get very messy from here - and may well do so:

1) Google "Seattle Times" + "Boeing".
2) read the piece from 15th Feb. by Dominic Gates.
3) then absorb the history and analysis of the use/misuse of "RLI" and the likely content of the final WTO judgement due this year on the AB vs BA case.
4) note the previous highly-critical comments about the WTO already uttered by the President of the USA elsewhere.
5) then recall that there is a Trade War against China currently under way initiated by that same President. The grounds for the action is on the basis of China;s perceived violation of WTO trading and IP rules, among other damaging activities.
6) and now read the Gates piece again.

I think it is perfectly possible that this all has the potential to get very nasty between USA and the European countries who so readily accommodated AB's many requests for capital.

:worried:

I really wish that AB had just paid the RLI back and so put a final stop to it all.

cheers (I hope).


For those of us not in finance what is RLI? If your going to quote it please say what it is .


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rbavfan
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 9:21 am

airbazar wrote:
It was a mistake only if you believe Airbus would be where it is today without it.
Going back to the turn of the century Airbus was primarily a narrow body aircraft manufacturer. Boeing held something like 70% of the widebody market share which is by far the most lucrative segment. Some believe the A380 gave Airbus the know-how and reputation as a trusted wide body OEM. True or not we'll never know but today Airbus competes with Boeing on equal terms in all segments. Was it worth a $25 billion loss to get to this point?


OK if the widebody segment is the most lucrative. Why are Airbus & Boeing keeping other programs running due to their NB airframes?
 
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LTU1011
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 9:32 am

ThomasCook wrote:
After observing this thread and many other A380 related posts not just in recent weeks but in general, it really shocks me about how much joy a large number of members are taking from seeing the A380 line close. Every opportunity some get, they will say the most ridiculously negative things about what is essentially a marvel of engineering and a truly inconic aircraft that should be celebrated and appreciated and truly deserving of a place in the aviation hall of fame. I’ve worked on the A380 for 10 years now, over 630 sectors, and let me tell you, I’m delighted everytime I step back onboard. I see the customers satisfaction and excitement about flying on it. I enjoy the incredible quietness, the smooth ride, the space, the ingenuity and its intelligence in cabin systems. The aircraft is very deserving of praise so I find it really quite sad to read ‘enthusiasts’ taking such joy in stating continually that the aircraft is ‘dead’, a ‘flop’, a ‘failiure’ etc etc. Why the negatively? If you want to talk about the A380s commercial success and viability, do it in a constructive manner rather than resorting to paltry terms to describe what has come to be with the announcement of the closure of the line.

I really hate this term but ‘fanboyism’ is truly rife on this forum from all angles and it is truly ridiculous to read the posts of so called enthusiasts adding nothing to worthy of reading to thread after thread of Boeing vs Airbus posts.

Seriously, if all you’re going to post are unconstructive statements or make up some fluff with nothing to back it up in order to big up your preferred manufacturer or vice versa, just don’t bother, I’m sure myself and others are very much bored of reading it. This forum was very different when I first joined. Now...well, you get the gist.


I congratulate you, this has to be THE post on a.net of the last couple of years, I totally concur. Some of the comments on the myriad of threads, are on the same level of insanity we see have to endure in other recent walks of life. It seriously degrades the attempt to learn something and the overall experience here...


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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 9:41 am

thevery wrote:
CSeries wasn't a huge success for BBD, too.


Yes but it is still being produced, improving on production cost & is well recieved by the airlines operating it.
 
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Faro
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 9:41 am

SEPilot wrote:
It may well rank as the biggest money losing commercial project of all time, period.



Losses, like speeds and in-laws, are relative.

Before talking about history and all time, and to arrive at a proper reckoning, one should calculate the total losses as a percentage of the average GDP of the countries involved in the A380’s manufacture over the period of the frame’s production.

By that token, I don’t know if it would be biggest money-losing commercial project of all time but it would certainly be up there, with Convair’s then-historic C880/990 losses, the Tristar, the early carbon fibre RB211, etc.


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Max Q
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 9:42 am

Speaking for myself I don’t take any satisfaction or ‘joy’ from the A380 program ending, as a Pilot and an enthusiast I find
the endless succession of twins very boring and it will become more so as the A380s leave the skies


The intention of this thread was simply to discuss whether this was the most expensive civil aviation manufacturing loss


Not to criticize Airbus, I’d like for them to have succeeded personally, and developed a Neo and stretched version


It would have made the aviation world a lot more interesting



Didn’t mean to imply the 787 was a mistake either, that was poorly worded, just that the A380 was even more expensive to develop
than the Dreamliner
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oceanvikram
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 10:56 am

"A380 Biggest manufacturing loss in civil aviation to date?" ... Maybe, but I would interested to know what are some people's thoughts on the Tristar, the Comet and the Concord.

I am an aviation enthusiast through and through and good on Airbus to give it a go. What was in some of our imaginations, Airbus made it into a reality.

Yes it was a huge risk and it did not pay off but so what. To all you nay sayers, at least Airbus put their money where their mouth is!

By the way, what do you critics want? Do you want us to stop our imaginations turning into reality? And what about human ingenuity, let's stop that as well?
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 1:22 pm

HighBypass wrote:
"Risk sharing partners" is largely a euphemism for the taxpayers of France and Germany, and to a lesser extent, Spain, and the UK.


Incorrect, risk sharing partners are suppliers that sign up for exclusive access to a project for their technology.

For example the landing gear manufacturer paid for their own r&d to design, test, build and supply the landing gear for the A380. That is a major system Airbus didn’t have to spend large sums of money on.

This is not exclusive to the A380 or even unique to the aerospace industry.

RLI is very different to a risk sharing partnership.
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 2:12 pm

Biggest manufacturing loss maybe. The A380 was ambitious and fine engineering accomplishment but at the wrong time.
Airlines didn’t buy A380 because they had to have it for range. Airlines didn’t buy it because he just had to have it as a flagship.Airlines just didn’t buy it because everybody else was. That is what happened in the early days of 747. Eventually starting with aircraft like the 772ER and 773ER killed the quads in operating costs and had the necessary range. Later 787 and A350 just confirmed the trend and proved Boeing right on point to point versus the hub and spoke theory.
Airbus were blinded by the egotistical need to have a flagship to complete the family. They realise that now and have killed the A380 off..
A380 is a great plane but poor sales and economics ( when well less than full) have sealed its fate.
Had A380 become available in 1990 it would have killed 744 numbers (1989) and got a good foothold before 777. Who knows what would have happened then. A380 great airplane but 15 years too late...
 
lat41
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 2:33 pm

[/quote]

It was simply arrogance. Airbus laughed at Boeing, a company with far more experience building aircraft and a lot more historical data, and proceeded to build an aircraft that wasn't needed in anywhere near the numbers they predicted.

What's worse is that Boeing made the correct predictions but the 787 nearly did Boeing in. If they hadn't been pumping out 737's they would have likely gone under. Airbus took out government loans and now they don't even have to pay them back.[/quote]


Here we called them tax breaks.
 
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 3:02 pm

N328KF wrote:
Antarius wrote:
Elementalism wrote:
Ahh the ole Itanic.

Nothing, IMO, tops HP spending billions on Autonomy.

Except for HP paying Intel billions, who between them and a few other partners, spent tens of billions on an architecture that was slower than the one it was intended to replace. Intel gets double points here for simultaneously pursuing NetBurst (itself a multi-billion dollar sinkhole) at the same time.

Yet in the end the allure or fear of Itanium/Itanic/Unobtanium caused the deaths of Alpha, PA-RISC, and SPARC and the demise of the non-Intel/AMD server market.
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 8:52 pm

c933103 wrote:
ThomasCook wrote:
After observing this thread and many other A380 related posts not just in recent weeks but in general, it really shocks me about how much joy a large number of members are taking from seeing the A380 line close. Every opportunity some get, they will say the most ridiculously negative things about what is essentially a marvel of engineering and a truly inconic aircraft that should be celebrated and appreciated and truly deserving of a place in the aviation hall of fame. I’ve worked on the A380 for 10 years now, over 630 sectors, and let me tell you, I’m delighted everytime I step back onboard. I see the customers satisfaction and excitement about flying on it. I enjoy the incredible quietness, the smooth ride, the space, the ingenuity and its intelligence in cabin systems. The aircraft is very deserving of praise so I find it really quite sad to read ‘enthusiasts’ taking such joy in stating continually that the aircraft is ‘dead’, a ‘flop’, a ‘failiure’ etc etc. Why the negatively? If you want to talk about the A380s commercial success and viability, do it in a constructive manner rather than resorting to paltry terms to describe what has come to be with the announcement of the closure of the line.

I really hate this term but ‘fanboyism’ is truly rife on this forum from all angles and it is truly ridiculous to read the posts of so called enthusiasts adding nothing to worthy of reading to thread after thread of Boeing vs Airbus posts.

Seriously, if all you’re going to post are unconstructive statements or make up some fluff with nothing to back it up in order to big up your preferred manufacturer or vice versa, just don’t bother, I’m sure myself and others are very much bored of reading it. This forum was very different when I first joined. Now...well, you get the gist.

I think the behavior cannot be explained by merely "fanboyism". To me, it seems like there are some individuals who think the success of others (companies/countries/etc) are unwarranted, and that what appears to be the achievement of others must be supported by something breaking the rules in their eyes. Only that can explain why they're so cheerful about something that doesn't go right at other places, as they think anything who're superior to what themselves support must have gained unfair advantages somewhere like ignoring business case or whatever, and those things that go wrong so that only those products/companies they support are the one true way of making a product and others cannot surpass them. You can see these comments about Airbus, you can see these comments about Bombardier, and you can see these comments about Norwegian.


I don't have a stake in A or B, but I do seem to recall derisive and downright snarky comments way back when about the 787 ("that plastic airplane") from Airbus leadership. Is it any wonder why some people here have been eagerly awaiting this comeuppance?
 
acjbbj
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Re: A380 Biggest manufacturing loss in civil aviation ?

Sat Feb 16, 2019 9:11 pm

It was simply arrogance. Airbus laughed at Boeing, a company with far more experience building aircraft and a lot more historical data, and proceeded to build an aircraft that wasn't needed in anywhere near the numbers they predicted.

What's worse is that Boeing made the correct predictions but the 787 nearly did Boeing in. If they hadn't been pumping out 737's they would have likely gone under. Airbus took out government loans and now they don't even have to pay them back.


And if Airbus hadn't been pumping out A319 A320 A321, both old style AND new style, they would have gone under too. Because A380 continues to fail.
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sat Feb 16, 2019 9:58 pm

global2 wrote:
c933103 wrote:
ThomasCook wrote:
After observing this thread and many other A380 related posts not just in recent weeks but in general, it really shocks me about how much joy a large number of members are taking from seeing the A380 line close. Every opportunity some get, they will say the most ridiculously negative things about what is essentially a marvel of engineering and a truly inconic aircraft that should be celebrated and appreciated and truly deserving of a place in the aviation hall of fame. I’ve worked on the A380 for 10 years now, over 630 sectors, and let me tell you, I’m delighted everytime I step back onboard. I see the customers satisfaction and excitement about flying on it. I enjoy the incredible quietness, the smooth ride, the space, the ingenuity and its intelligence in cabin systems. The aircraft is very deserving of praise so I find it really quite sad to read ‘enthusiasts’ taking such joy in stating continually that the aircraft is ‘dead’, a ‘flop’, a ‘failiure’ etc etc. Why the negatively? If you want to talk about the A380s commercial success and viability, do it in a constructive manner rather than resorting to paltry terms to describe what has come to be with the announcement of the closure of the line.

I really hate this term but ‘fanboyism’ is truly rife on this forum from all angles and it is truly ridiculous to read the posts of so called enthusiasts adding nothing to worthy of reading to thread after thread of Boeing vs Airbus posts.

Seriously, if all you’re going to post are unconstructive statements or make up some fluff with nothing to back it up in order to big up your preferred manufacturer or vice versa, just don’t bother, I’m sure myself and others are very much bored of reading it. This forum was very different when I first joined. Now...well, you get the gist.

I think the behavior cannot be explained by merely "fanboyism". To me, it seems like there are some individuals who think the success of others (companies/countries/etc) are unwarranted, and that what appears to be the achievement of others must be supported by something breaking the rules in their eyes. Only that can explain why they're so cheerful about something that doesn't go right at other places, as they think anything who're superior to what themselves support must have gained unfair advantages somewhere like ignoring business case or whatever, and those things that go wrong so that only those products/companies they support are the one true way of making a product and others cannot surpass them. You can see these comments about Airbus, you can see these comments about Bombardier, and you can see these comments about Norwegian.


I don't have a stake in A or B, but I do seem to recall derisive and downright snarky comments way back when about the 787 ("that plastic airplane") from Airbus leadership. Is it any wonder why some people here have been eagerly awaiting this comeuppance?

Yes, because I don't believe anyone who post in the forum board are actually part of the Boeing's leadership
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sun Feb 17, 2019 10:38 pm

hvusslax wrote:
kitplane01 wrote:
Do you think it's to improve technology (then spend more than 5% of Airbus revenue on R&D. Don't spend it making additional copies of loss making aircraft)


As far as I understand, the production of additional A380 frames has been cash positive for Airbus since 2015. The problem is that with the low production rate, there is little hope that R&D costs will ever be fully recouped.

People are being a bit dramatic about the whole thing. Airbus took a chance, they sunk a lot of money in R&D to build a brilliant machine. It wasn't what the market needed. That's business, you win some and lose some.


That's false.

Airbus CEO says they are taking a production loss on every plane built. It is cash negative, says Airbus.

https://www.flightglobal.com/news/artic ... ir-445983/
 
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Sun Feb 17, 2019 10:42 pm

ThomasCook wrote:
After observing this thread and many other A380 related posts not just in recent weeks but in general, it really shocks me about how much joy a large number of members are taking from seeing the A380 line close. Every opportunity some get, they will say the most ridiculously negative things about what is essentially a marvel of engineering and a truly inconic aircraft that should be celebrated and appreciated and truly deserving of a place in the aviation hall of fame. I’ve worked on the A380 for 10 years now, over 630 sectors, and let me tell you, I’m delighted everytime I step back onboard. I see the customers satisfaction and excitement about flying on it. I enjoy the incredible quietness, the smooth ride, the space, the ingenuity and its intelligence in cabin systems. The aircraft is very deserving of praise so I find it really quite sad to read ‘enthusiasts’ taking such joy in stating continually that the aircraft is ‘dead’, a ‘flop’, a ‘failiure’ etc etc. Why the negatively? If you want to talk about the A380s commercial success and viability, do it in a constructive manner rather than resorting to paltry terms to describe what has come to be with the announcement of the closure of the line.

I really hate this term but ‘fanboyism’ is truly rife on this forum from all angles and it is truly ridiculous to read the posts of so called enthusiasts adding nothing to worthy of reading to thread after thread of Boeing vs Airbus posts.

Seriously, if all you’re going to post are unconstructive statements or make up some fluff with nothing to back it up in order to big up your preferred manufacturer or vice versa, just don’t bother, I’m sure myself and others are very much bored of reading it. This forum was very different when I first joined. Now...well, you get the gist.


The more variety of airplanes in the sky the better is it for almost everyone on this forum, including me.

Can you offer an example of someone saying that they derive "joy" from trashing the A380, or Airbus in general?

Personally, I think we now know the A380 was a mistake, and I'm glad Airbus can move on. Please don't take calling the A380 a mistake as taking joy from the program failure. I wish it had worked, and I imagine almost all of the A380 detractors feel the same way.
 
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Mon Feb 18, 2019 9:27 am

Aesthetics are important, people will say buying an airliner is a pure business proposition but humans make that decision and a good looking aircraft is a lot easier to spend hundreds of millions on



The A380 may be a technical ‘wonder’ but it’s ugly as they come


It has to be said, and I believe that’s a factor in its demise
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Mon Feb 18, 2019 3:17 pm

kitplane01 wrote:
hvusslax wrote:
As far as I understand, the production of additional A380 frames has been cash positive for Airbus since 2015. The problem is that with the low production rate, there is little hope that R&D costs will ever be fully recouped.

That's false.

Airbus CEO says they are taking a production loss on every plane built. It is cash negative, says Airbus.

https://www.flightglobal.com/news/artic ... ir-445983/

Both are correct.

A380 production line was originally size for 24 per year (with built-in growth path to 48 per year!).

Airbus shipped 27 one year (2015?) and broke into cash positive on a production basis.

Yet they did not have the orders to continue producing at that rate, and volume matters.

The rule of thumb we see here is doubling rate increases profit by 13%.

Cutting production rate by a factor of two twice (~24 -> ~12 -> ~6) means losing 26% which is ruinous.

Therefore at rate 6 they were losing money and those loses were not as digestible as Airbus claimed.

The result is a big change of diet at Airbus.
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acjbbj
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Re: A380 Biggest manufacturing loss in civil aviation ?

Mon Feb 18, 2019 5:08 pm

aaexecplat wrote:
These threads are just all so sad. There are now 5+ threads open and more opening every few hours to mostly $hit on Airbus. Is all this really necessary? And very little facts are presented along the way. Mostly personal opinions, and in many cases provable falsehoods (some clearly intentional). It honestly doesn't speak highly of this community, it doesn't encourage participation and it just isn't much fun to hang around here anymore among all this hatred and animosity.


As much as I agree that A388 is failing, I have to agree. We don't need 1000000000000000000000000 threads per second just to bash Airbus for the programme.
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Mon Feb 18, 2019 5:48 pm

boeing767-300 wrote:
Biggest manufacturing loss maybe. The A380 was ambitious and fine engineering accomplishment but at the wrong time.
Airlines didn’t buy A380 because they had to have it for range. Airlines didn’t buy it because he just had to have it as a flagship.Airlines just didn’t buy it because everybody else was. That is what happened in the early days of 747. Eventually starting with aircraft like the 772ER and 773ER killed the quads in operating costs and had the necessary range. Later 787 and A350 just confirmed the trend and proved Boeing right on point to point versus the hub and spoke theory.
Airbus were blinded by the egotistical need to have a flagship to complete the family. They realise that now and have killed the A380 off..
A380 is a great plane but poor sales and economics ( when well less than full) have sealed its fate.
Had A380 become available in 1990 it would have killed 744 numbers (1989) and got a good foothold before 777. Who knows what would have happened then. A380 great airplane but 15 years too late...

It wasn't possible to do A380 in 1990.

The 747-400 engines did not have enough thrust and were EIS in 1989.

The 777-200/300 engines had too much thrust but did not EIS till 1995.

Since there clearly was a bigger market for the 777, you could not have talked your way ahead of the 777.

So at best you were looking at late 90s for engines of the required thrust and efficiency to do A380.

Airbus itself was iterating through various A340 proposals and finally landing on A340-500/600 in 1998.

I think you could have argued for a 1998 launch of A380 vs the actual late 2000 launch if A340-500/600 was omitted, but that would have been a big ask for Airbus to abandon the A330/A340 to its fate vs the 777.
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kitplane01
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Mon Feb 18, 2019 6:07 pm

Revelation wrote:
kitplane01 wrote:
hvusslax wrote:
As far as I understand, the production of additional A380 frames has been cash positive for Airbus since 2015. The problem is that with the low production rate, there is little hope that R&D costs will ever be fully recouped.

That's false.

Airbus CEO says they are taking a production loss on every plane built. It is cash negative, says Airbus.

https://www.flightglobal.com/news/artic ... ir-445983/

Both are correct.

A380 production line was originally size for 24 per year (with built-in growth path to 48 per year!).

Airbus shipped 27 one year (2015?) and broke into cash positive on a production basis.

Yet they did not have the orders to continue producing at that rate, and volume matters.

The rule of thumb we see here is doubling rate increases profit by 13%.

Cutting production rate by a factor of two twice (~24 -> ~12 -> ~6) means losing 26% which is ruinous.

Therefore at rate 6 they were losing money and those loses were not as digestible as Airbus claimed.

The result is a big change of diet at Airbus.



Errrrr .. no.

Quoting the CEO of Airbus: "It doesn't mean we are still making money on that, but the losses that such a low rate would produce are certainly digestible.". In 2017, Airbus delivered 15 A380s and was "very close" to production breakeven, says chief finance officer Harald Wilhelm.

That means they are taking a loss on the production of A380s, which means they are not making money producing A380s. For context go read the article.
 
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Revelation
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Mon Feb 18, 2019 8:30 pm

kitplane01 wrote:
Revelation wrote:
kitplane01 wrote:
That's false.

Airbus CEO says they are taking a production loss on every plane built. It is cash negative, says Airbus.

https://www.flightglobal.com/news/artic ... ir-445983/

Both are correct.

A380 production line was originally size for 24 per year (with built-in growth path to 48 per year!).

Airbus shipped 27 one year (2015?) and broke into cash positive on a production basis.

Yet they did not have the orders to continue producing at that rate, and volume matters.

The rule of thumb we see here is doubling rate increases profit by 13%.

Cutting production rate by a factor of two twice (~24 -> ~12 -> ~6) means losing 26% which is ruinous.

Therefore at rate 6 they were losing money and those loses were not as digestible as Airbus claimed.

The result is a big change of diet at Airbus.



Errrrr .. no.

Quoting the CEO of Airbus: "It doesn't mean we are still making money on that, but the losses that such a low rate would produce are certainly digestible.". In 2017, Airbus delivered 15 A380s and was "very close" to production breakeven, says chief finance officer Harald Wilhelm.

That means they are taking a loss on the production of A380s, which means they are not making money producing A380s. For context go read the article.

For context, go no further than this post and in particular reread the parts of the quotes that I bolded.

With a large enough volume they eventually were making a small amount of money. Once the volume dropped they were not.

Your article only covers the phase where volume had dropped.
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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sergegva
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Mon Feb 18, 2019 10:54 pm

kitplane01 wrote:

Airbus CEO says they are taking a production loss on every plane built. It is cash negative, says Airbus.

https://www.flightglobal.com/news/artic ... ir-445983/


Airbus CEO says they are taking a digestible production loss on every plane built at the rate of six aircraft per year. And they deliver more than 6 a year every year since 2008.

The fact that two aircraft/month (or 24/year) had to be delivered at the beginning of the program in order for each delivery to start generating a profit does not mean that two aircraft per month had still to be delivered, 10 years later. Over time, the cost of producing the same aircraft decreases.

In the same article, Airbus says that 15/year in 2017 was very close to production breakeven. If we use the 24/year rate to production breakeven during the first 5 years of the A380 production, that's already 6 units sold above the cost of production. If we then use, for the next 5 years, 20/year (still well above the 15/year mentioned by Airbus in 2017), that's 30 more units sold above the cost of production.

No one is claiming that the A380 was a commercial success in hard cash. But to say that not a single copy has been sold above its cost of production seems to be a fanciful and provocative shortcut.
 
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kitplane01
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Re: A380 Biggest manufacturing loss in civil aviation to date?

Mon Feb 18, 2019 11:37 pm

Revelation wrote:
kitplane01 wrote:
Revelation wrote:
Both are correct.

A380 production line was originally size for 24 per year (with built-in growth path to 48 per year!).

Airbus shipped 27 one year (2015?) and broke into cash positive on a production basis.

Yet they did not have the orders to continue producing at that rate, and volume matters.

The rule of thumb we see here is doubling rate increases profit by 13%.

Cutting production rate by a factor of two twice (~24 -> ~12 -> ~6) means losing 26% which is ruinous.

Therefore at rate 6 they were losing money and those loses were not as digestible as Airbus claimed.

The result is a big change of diet at Airbus.



Errrrr .. no.

Quoting the CEO of Airbus: "It doesn't mean we are still making money on that, but the losses that such a low rate would produce are certainly digestible.". In 2017, Airbus delivered 15 A380s and was "very close" to production breakeven, says chief finance officer Harald Wilhelm.

That means they are taking a loss on the production of A380s, which means they are not making money producing A380s. For context go read the article.

For context, go no further than this post and in particular reread the parts of the quotes that I bolded.

With a large enough volume they eventually were making a small amount of money. Once the volume dropped they were not.

Your article only covers the phase where volume had dropped.


Actually, for context I needed to re-read "2015". I think you might be right, and me wrong. I take it back.

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