I think the crutch of the article revolves around the simple commercial realities of the project. For Emirates they need Airbus to keep building the A380 because their business model revolves around it and for Airbus they need Emirates to keep buying the plane because the worlds airlines don't want to buy it.

The question revolves around how many new A380's Emirates fundamentally need and can Airbus economically produce aircraft at this demand point profitably.

I suspect, and as the article alludes there will be an economic wasteland delta between the two.

Revelation wrote:

DWC wrote:

I also surmised elsewhere that JL would not leave without a landmark deal, specially that it is he & Jean Pierson who talked Airbus into the A380 adventure, so there was an added personal commitment to a programme he officially strongly believed in. Besides, him leaving with his cherished programme in limbo would have been a stain in his career & a certain failure history would have retained against him and Airbus.

I'm not sure that it's a good thing for a corporation to allow an executive to make deals in order to improve their personal legacy.
Since this tentative deal is a "kick the can down the road" kind of affair, maybe it is being pushed forward to give Leahy's successors a means to blame him for prolonging the agony if the often repeated prediction of the future strength of the VLA market never happens.
Time will tell.

It is not about personal legacy, it is about LEADERSHIP RESPONSIBILITY & INDUSTRY CONSISTENCY.
It is also about the "vision thing" : it was Leahy who talked Airbus into becoming No.1, the Europeans were happy with their 18% & found themselves lucky to even get to 20%.
Take Steve Jobs at Apple, Jack Ma at Alibaba, MOL at Ryanair, STC at Emirates or Tony Fernandes at AirAsia : would you reconsider your "I'm not sure that it's a good thing for a corporation to allow an executive to make deals in order to improve their personal legacy" ?

travelhound wrote:

The question revolves around how many new A380's Emirates fundamentally need and can Airbus economically produce aircraft at this demand point profitably.

If you found that in the article, great, it's an interesting - if basically unanswerable - question.

I didn't find that in the article. Instead, I found a lot the same old negative stuff being trotted out. I thought much of the media trying to cover its butt (for having declared the A380 dead last week) by justifying itself this week. How many more times is the press going to write the premature obituary of the aircraft?

What much of the media missed is its own irrelevance. It doesn't matter what anyone thinks of Emirates and its business model and how the airline is run, it doesn't matter what anyone thinks of the A380 or of Airbus or how its business is run or its future. This is a $16 billion trade deal, which, if it were any other aircraft, would be getting its proper respect from the press. That's $16 Billion, folks.

Instead it has engendered some of the silliest headlines - and articles - I've seen in a while.

mariner

mariner wrote:

I found a lot the same old negative stuff being trotted out. I thought much of the media trying to cover its butt (for having declared the A380 dead last week) by justifying itself this week. How many more times is the press going to write the premature obituary of the aircraft?

What much of the media missed is its own irrelevance. It doesn't matter what anyone thinks of Emirates and its business model and how the airline is run, it doesn't matter what anyone thinks of the A380 or of Airbus or how its business is run or its future. This is a $16 billion trade deal, which, if it were any other aircraft, would be getting its proper respect from the press. That's $16 Billion, folks.

Press & some A-netters covering their butts, and perhaps soon whatever BA deal for good measure.
As to the deal, it's still an MOU, 20 orders (+16 options), so at 2018 list prices ($445.6 million) & what I believe to be some 50% discount, that's only a $4.456 billion deal for time being, still handsome & emblematic for the A380...

mariner wrote:

travelhound wrote:

The question revolves around how many new A380's Emirates fundamentally need and can Airbus economically produce aircraft at this demand point profitably.

If you found that in the article, great, it's an interesting - if basically unanswerable - question.

I didn't find that in the article. Instead, I found a lot the same old negative stuff being trotted out. I thought much of the media trying to cover its butt (for having declared the A380 dead last week) by justifying itself this week. How many more times is the press going to write the premature obituary of the aircraft?

What much of the media missed is its own irrelevance. It doesn't matter what anyone thinks of Emirates and its business model and how the airline is run, it doesn't matter what anyone thinks of the A380 or of Airbus or how its business is run or its future. This is a $16 billion trade deal, which, if it were any other aircraft, would be getting its proper respect from the press. That's $16 Billion, folks.

Instead it has engendered some of the silliest headlines - and articles - I've seen in a while.

mariner

The article mentions certain facts about the A380 which allows us to suppose the realities of the A380 program. I am not too sure why we need the article to make a definitive conclusion when details about costs, financing, securities, etc. are at this stage unknown.

Some media agencies simply reported the order, others like this article raised questions about the real value of the order.

In an ideal world this is what we should expect from an independent media.

DWC wrote:

As to the deal, it's still an MOU, 20 orders (+16 options), so at 2018 list prices ($445.6 million) & what I believe to be some 50% discount, that's only a $4.456 billion deal for time being, still handsome & emblematic for the A380...

The public figure - the one that every commentator is using - is $16 billion, and media are basing their point of view on that, although they may - may - add the caveat that "nobody pays full price."

Very few people know the actual price paid, and if it is 50%, as you say, a lot of people said it was 50% at the time of the Dubai Air Show so it would seem that not much has changed.

If both sides - seller and buyer - are happy, I don't see that ti matters. Similarly, I didn't see that ti mattered when Boeing (according to Wiki at the time) was selling the first batches of the 787 for a surprisingly low price.

mariner

travelhound wrote:

I think the crutch of the article revolves around the simple commercial realities of the project. For Emirates they need Airbus to keep building the A380 because their business model revolves around it and for Airbus they need Emirates to keep buying the plane because the worlds airlines don't want to buy it.

Leahy is also hinting that there is another A380 order in the works, so let's wait and see how that pans out.

The EK MOU could be a bridge order for Airbus to keep building the A380 at the minimum required rate until demand returns. The question though is the impact of the secondary market on that demand given that the premier airlines and those who still fly it but cannot exploit it's unique capability rotate them out of their fleet while still relatively young.

mariner wrote:

DWC wrote:

As to the deal, it's still an MOU, 20 orders (+16 options), so at 2018 list prices ($445.6 million) & what I believe to be some 50% discount, that's only a $4.456 billion deal for time being, still handsome & emblematic for the A380...

Very few people know the actual price paid, and if it is 50%, as you say, a lot of people said it was 50% at the time of the Dubai Air Show so it would seem that not much has changed.

About 50% is the believed price for launch customers, and considering the levels of EK orders, we can be pretty sure they always got that.
In terms of economic references, several studies ( one link in article below ) got to the same conclusion, in any case the French Press repeatedly cites 230 million per frame instead of the catalogue $420-445 in past years.

Yesterday French mag Challenge(s), which incidently follows Airbus the most - a real goldmine for me, says Airbus may even have gone below that, considering the strategic importance of the deal ( and I'll add considering Leahy's imminent leaving the company ) : "Le prix catalogue de l'appareil est de 445,6 millions de dollars pièce, mais il est vendu, dans les faits, aux alentours de 230 millions, selon les calculs de Challenges et du cabinet Ascend dévoilés en juin dernier. Vu le caractère stratégique du contrat, il n'est pas exclu qu'Airbus soit encore allé plus bas"
https://www.challenges.fr/entreprise/ae ... 380_561107

DWC wrote:

It is not about personal legacy, it is about LEADERSHIP RESPONSIBILITY & INDUSTRY CONSISTENCY.
It is also about the "vision thing" : it was Leahy who talked Airbus into becoming No.1, the Europeans were happy with their 18% & found themselves lucky to even get to 20%.
Take Steve Jobs at Apple, Jack Ma at Alibaba, MOL at Ryanair, STC at Emirates or Tony Fernandes at AirAsia : would you reconsider your "I'm not sure that it's a good thing for a corporation to allow an executive to make deals in order to improve their personal legacy" ?

Yes, it should be noted that most highly successful organisations (they could be business, industrial, charitable or other entities) require some form of strong leadership from individuals in those organisations. These strong leaders give the organisation a purpose and direction. Organisations without a strong leadership tend to go around in circles.

DWC wrote:

Yesterday French mag Challenge(s), which incidently Airbus the most, says Airbus may even have gone below that, considering the strategic importance of the deal ( and I'll add considering Leahy's imminent leaving the company ) : "Le prix catalogue de l'appareil est de 445,6 millions de dollars pièce, mais il est vendu, dans les faits, aux alentours de 230 millions, selon les calculs de Challenges et du cabinet Ascend dévoilés en juin dernier. Vu le caractère stratégique du contrat, il n'est pas exclu qu'Airbus soit encore allé plus bas"
https://www.challenges.fr/entreprise/ae ... 380_561107

"Airbus may have even gone below that"....

Well, maybe, maybe not, as long as the seller and the buyer were happy. Although I'm not sure why Leahy leaving the company should have affected the price.

I remember too well the A380-bashing Gellman Report of 2005 (?), which claimed that Airbus had sold the A380 to Singapore for $140 million. Many believed it.

But if you believe that, then you must also believe that Airbus made $60 million when it sold the Singapore lease on to Doric for $200 million - a much publicised event. I expect it's in the archives here.

So - sorry - but I don't believe any numbers until I hear them from one of the parties involved in the negotiation. And even then I'd prefer two sources, which used to be the golden rule for all journalists.

mariner

DWC wrote:

mariner wrote:

DWC wrote:

As to the deal, it's still an MOU, 20 orders (+16 options), so at 2018 list prices ($445.6 million) & what I believe to be some 50% discount, that's only a $4.456 billion deal for time being, still handsome & emblematic for the A380...

Very few people know the actual price paid, and if it is 50%, as you say, a lot of people said it was 50% at the time of the Dubai Air Show so it would seem that not much has changed.

About 50% is the believed price for launch customers, and considering the levels of EK orders, we can be pretty sure they always got that.
In terms of economic references, several studies ( one link in article below ) got to the same conclusion, in any case the French Press repeatedly cites 230 million per frame instead of the catalogue $420-445 in past years.

Yesterday French mag Challenge(s), which incidently follows Airbus the most - a real goldmine for me, says Airbus may even have gone below that, considering the strategic importance of the deal ( and I'll add considering Leahy's imminent leaving the company ) : "Le prix catalogue de l'appareil est de 445,6 millions de dollars pièce, mais il est vendu, dans les faits, aux alentours de 230 millions, selon les calculs de Challenges et du cabinet Ascend dévoilés en juin dernier. Vu le caractère stratégique du contrat, il n'est pas exclu qu'Airbus soit encore allé plus bas"
https://www.challenges.fr/entreprise/ae ... 380_561107

As EK negotiate engines separately, and that deal hasn't been concluded, the article and your comment are not supported by facts. Just like assuming sale/leaseback values are THE price paid for the aircraft and engines.

mariner wrote:

How many more times is the press going to write the premature obituary of the aircraft?

Media are advertisement driven.

As long as those customers prefer having their merchandise ads embedded in Euro Bashing this will continue.
( A380 ( for a reason ) gets the biggest swig from that chamberpot. But it is not the only target. )

This gets support by way of embedding journalists.
( i.e. investigative journalism is more or less dead.)

AirlineCritic wrote:

Wow, although somewhat expected. Very glad to see this. Hope to be able to fly more A380s in the future!

There's only one thing though that I want to say:

Come on AY, go for it. They'd be cheap now. Please. PLEASE. TAKE THEM! ORDER 10!

(This armchair CEO definitely would go big and order more planes for Finnair.)

A380 would be really cool. Unfortunately, Finnair commercial boss Juha Järvinen said in December 2017 in the Aerotelegraph interview: "The A380 is a bit too big for us. He also has a big disadvantage. Its freight capacity is too low."

But, you'll never know

The interview is in German.

mariner wrote:

Well, maybe, maybe not, as long as the seller and the buyer were happy. Although I'm not sure why Leahy leaving the company should have affected the price.
I remember too well the A380-bashing Gellman Report of 2005 (?), which claimed that Airbus had sold the A380 to Singapore for $140 million. Many believed it.
But if you believe that, then you must also believe that Airbus made $60 million when it sold the Singapore lease on to Doric for $200 million - a much publicised event. I expect it's in the archives here.

1. Leahy living is a double-edged thing for EK seen from a Game Theory perspective :
- means he has little time left & wants the deal so badly EK can pressure prices down
- also means he is eager to commit whereas EK do not have that close relations with the new team which may well decide to ditch the programme, so actually LJ may have the upper hand & force EK into a contract at the price he wishes ;
either way it leads to a contract and that is what we have seen.
2. the 50% is a standard practive for big orders, not just a figure tossed in around a-net, but one you see in the commercial press AND in the financial analysis accessible through the link in the article.
3. Which means that the reports you mention are irrelevant, it's not about "believing" but about profressional press. Naturally, you are free to remain sceptic

Planesmart wrote:

As EK negotiate engines separately, and that deal hasn't been concluded, the article and your comment are not supported by facts. Just like assuming sale/leaseback values are THE price paid for the aircraft and engines.

1. I did point it was an MOU, right ?
2. I also divided by four that flashy & fishy 16billion the press so happily parrot everywhere - which is more than you credit them.
3. We are discussing the media on a MOU Challenge(s) have some experience on. Even when the contract is signed - if signed ( and it will be signed ), we won't have more hard evidence as the terms are secret. But in all probability, we do know engines should be RR.

In addition to purchase price, the report that offset arrangements are also included in the deal shows which party is in the driving seat

DWC wrote:

2. the 50% is a standard practive for big orders, not just a figure tossed in around a-net, but one you see in the commercial press AND in the financial analysis accessible through the link in the article.

But it should be clear that this is not a discount specific to the A380. It is usual industry practice to give large discounts on most orders. The A380 doesn't suddenly cost less than an A330 due to it.

speedbored wrote:

AA, for example, flew almost 80bn empty ASKMs in 2016 and still made a huge profit.

Ok, compare 2016 numbers

AA-81.5% load factor with ~402K departures.
EK-75% load factor with ~187K departures.

Last time AA had load factor below 80% was in 2004.
And AA is not ordering planes like there is no tomorrow, even with such huge profits.

mxaxai wrote:

DWC wrote:

2. the 50% is a standard practive for big orders, not just a figure tossed in around a-net, but one you see in the commercial press AND in the financial analysis accessible through the link in the article.

But it should be clear that this is not a discount specific to the A380. It is usual industry practice to give large discounts on most orders. The A380 doesn't suddenly cost less than an A330 due to it.

Indeed, 60% discounts are not unheard of in the industry. There are reports that Boeing launched the 737 MAX 10 with a 66% list price discount.

DWC wrote:

Leahy living is a double-edged thing for EK

I hope you meant to write "leaving"

Leahy "living" is only a problem for Boeing

dtw2hyd wrote:

speedbored wrote:

AA, for example, flew almost 80bn empty ASKMs in 2016 and still made a huge profit.

Ok, compare 2016 numbers

AA-81.5% load factor with ~402K departures.
EK-75% load factor with ~187K departures.

Last time AA had load factor below 80% was in 2004.
And AA is not ordering planes like there is no tomorrow, even with such huge profits.

We cannot blame the A380 alone for the 75% load factor. What about the fact that their smallest frame is 77W? And many of those frames are over 400 seats. They are forced to send 77W even to the thinnest of routes. If their A380 isn’t doing well on some routes, they can simply downgrade to 77W. But what if their 77W isn’t doing so well? What happens to their loadfactor then?

We can only make a conclusion if we see the average loadfactor per route/type.

dtw2hyd wrote:

speedbored wrote:

AA, for example, flew almost 80bn empty ASKMs in 2016 and still made a huge profit.

AA-81.5% load factor with ~402K departures.
EK-75% load factor with ~187K departures.

Last time AA had load factor below 80% was in 2004.
And AA is not ordering planes like there is no tomorrow, even with such huge profits.

So what? Doesn't alter the fact that, apart from the occasional blip (sometimes caused by their rapid expansion, incidentally), EK pretty consistently has above industry average load factors. Yet, for some reason, you seem to think that is a bad thing because there are other airlines with better load factors - maybe you think EK can only be considered a success if it has the best load factors in the industry?

Also not a particularly good idea to compare load factors between almost entirely long-haul airlines, and airlines with major domestic operations.

DWC wrote:

But... Boeing are doing extremely well, both in orders and deliveries.
While Boeing think in shorter-terms than Airbus ( Leahy just underlined that again with his ram-up slides ), they maximize on very sensible criteria : barring the 748i, fact is all their civilian models have been remarkably successful. I expect the 777X to garner more orders when airlines place orders to rejuvenate parts of their current 777 fleets & am sure Boeing will come up with a suitable 737 replacement once they decide on their strategy - whether linked to a MoM or not. Even if they are losing NB market share in relative terms, they are actually expanding it well in absolute terms ( % can be very deceiving ) : with still a handsome 40% MS for comparatively little investment in all these past decades, that is an excellent strategy.

First -- are Leahy's ram[p]-up slides available somewhere? What do they show?

As to your comment, I think we're in line with how we perceive Boeing's outlook. I grew up in the US and have some national pride toward Boeing, so nationalistically I want Boeing to be the best and to want to be the best -- not just for its shareholders but also for the flying public. That Airbus could pull off this order shows me two things: one, that they are going to be even more aggressive now in going after more A380 sales, and two, that of the two companies the one with clear solutions to the world market is now Airbus.

speedbored wrote:

BaconButty wrote:

Buffalomatt1027 wrote:

If anything, it showed that Boeing projected the right model with the 787. Point to point is the future... and not the hub / spoke model.

Why do people keep saying this? It completely ignores the fact that Airbus had the A330 in its product portfolio, which along with the 767 and A300 was instrumental in fragmenting the market, at the point the A380 was launched. Not to mention Boeing had the 747 line which they would later recapitalise at no small expense. It's anthrpomorphisation of corporations and then projecting our biases onto them.

Even a quick look at any recent IATA annual report would debunk the "point to point is the future" myth.

The numbers of unique city pairs with airline service has shown a pretty constant increase in numbers year on year for at least 10 years, and the rate of increase has been outstripped by the general increase in passenger seat-miles. If anything, the rate of increase of unique city pairs has fallen slightly since 787 EIS. The data suggests that point-to-point is actually decreasing slightly as a percentage of the total market.

I know BA has been adding cities like San Jose, Oakland, Nashville, Austin, and so on. United just started a direct flight to Australia a couple days ago. But as more 787 get delievered, airlines do need to expand those point to point routes.

Also, passengers like frequency of flights ..... ideally an airline would like 1 A380 flight to where ever, but passengers like frequency and time flexibility.

Buffalomatt1027 wrote:

[
Also, passengers like frequency of flights ..... ideally an airline would like 1 A380 flight to where ever, but passengers like frequency and time flexibility.

True , except when one end of that flight is into a slot restricted airport like Heathrow. Then it could be one A380 or just one 787 and a lot of people are flying a different routing/airline.

Eyad89 wrote:

We cannot blame the A380 alone for the 75% load factor. ..

I am not blaming A380 in particular. When systemwide load factor is 75%-77% (teeter tottering near BELF), adding capacity by ordering planes is a bad thing. Let it be 777-9, 787-10 or A388.

qf789 wrote:

Emirates have announced a commitment of 36 additional A380's. The commitment includes 20 firm and 16 options

Dubai-based Emirates Airline has signed a Memorandum of Understanding (MoU) to acquire up to 36 additional A380 aircraft. The agreement was signed this morning at the airline’s headquarters in Dubai by HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, and John Leahy, Chief Operating Officer Customers, Airbus Commercial Aircraft. The commitment is for 20 A380s and an option for 16 more with deliveries to start in 2020, valued at US$16 billion at latest list prices.

http://www.airbus.com/newsroom/press-re ... a380s.html

Only in the Airbus world do options become commitments

DWC wrote:

Take Steve Jobs at Apple, Jack Ma at Alibaba, MOL at Ryanair, STC at Emirates or Tony Fernandes at AirAsia : would you reconsider your "I'm not sure that it's a good thing for a corporation to allow an executive to make deals in order to improve their personal legacy" ?

IMHO the deal needs to benefit the corporation, not the individual. In this case, the deal does line up with the corporation's interests.

I doubt the deal was done to further JL's legacy, I think it was done to "kick the can down the road" for several more years.

Besides, if the deal is being done to bolster reputations, wouldn't Airbus prefer that JL do something to transfer some of that limelight to that Franco-German guy whose name I can never spell? Why continue to bolster the legacy of the American guy who is on his way to drinking fruit juices at a trendy fat farm on some tropical island?

dtw2hyd wrote:

When systemwide load factor is 75%-77% (teeter tottering near BELF), adding capacity by ordering planes is a bad thing. Let it be 777-9, 787-10 or A388.

The vast majority of EK's outstanding orders will be replacements for their existing fleet. The 778s and 779s will replace 77Ls and 77Ws almost exactly one-for-one. So little additional capacity there. But of course, with ever-increasing passenger numbers they need additional capacity.

SC430 wrote:

Only in the Airbus world do options become commitments

Actually, Boeing does exactly the same thing.

Their PR values the recent flyDubai order at $27 billion (at list price) which only makes sense if you include the 50 options.

tigerotor77w wrote:

First -- are Leahy's ram[p]-up slides available somewhere? What do they show?

They were in last monday emblematic press conference, so must be in the media-kit somewhere on Airbus website.

mxaxai wrote:

But it should be clear that this is not a discount specific to the A380. It is usual industry practice to give large discounts on most orders. The A380 doesn't suddenly cost less than an A330 due to it.

But of course, selbstvertändlich, this is an aviation geek forum, not some kindergarden, thus my "standard practice"

speedbored wrote:

DWC wrote:

Leahy living is a double-edged thing for EK

I hope you meant to write "leaving"
Leahy "living" is only a problem for Boeing

Err, right, the rest of my sentence made that very clear.
Nevertheless, the myth will live on for some time

DWC wrote:

1. Leahy living is a double-edged thing for EK seen from a Game Theory perspective :
- means he has little time left & wants the deal so badly EK can pressure prices down
- also means he is eager to commit whereas EK do not have that close relations with the new team which may well decide to ditch the programme, so actually LJ may have the upper hand & force EK into a contract at the price he wishes ;
either way it leads to a contract and that is what we have seen.
2. the 50% is a standard practive for big orders, not just a figure tossed in around a-net, but one you see in the commercial press AND in the financial analysis accessible through the link in the article.

If 50% is the standard, then "Leahy" really doesn't matter because, presumably, anyone on the sales team can negotiate it.

I don't buy all this stuff about Leahy and his retirement. Sure a deal would be (was) nice but not enough to give away the farm for and how is Airbus going to explain "a special deal for John" to the shareholders?

More than that, it puts Emirates in the cat bird seat for next time and Leahy is not such a fool.

DWC wrote:

3. Which means that the reports you mention are irrelevant, it's not about "believing" but about profressional press. Naturally, you are free to remain sceptic

I didn't think I needed your permission to remain a sceptic - LOL - but thanks anyway.

mariner

tigerotor77w wrote:

First -- are Leahy's ram[p]-up slides available somewhere? What do they show?

You ask, I deliver. (sorry, this is going to be off topic)
Link: Airbus Investors chapter-03
I think it's slide 9 - 13.

Airbus has been ramping up especially A320 production constantly for the last ~30 years.
I think the A330 had a production slowdown around the 2002-2004 period.
When the A380 was developed Airbus envisioned a production rate of 8/month. But it never surpassed 3 (30 /year).
(not in the slides)

Lets add some on topic stuff;
Wasn't the current airport where Emirates operates suited for up to 100 A380's, besides the ~150 777's !?
Emirates already has received 101 A380s and will most likely receive another 13-14 in 2018 & 2019.
So by early 2020 Emirates will have 115 A380s.
Phasing out of Emirates first A380's will start from 2020 (2008+12year lease period).
The first two years 2020-2022 WWTTs will come out of first lease period, those are very likely to be replaced.

Emirates still has 41 A380s on order. 28 to 27 of those will be delivered past 2020.
But the press releases state that the planes from the MoU (20 order + 16 option) will start being delivered from 2020.
This doesn't add up to me.

Is it correct that Emirates already has received four different A380 versions?
[8x WWTT EA; ?x initial wing EA, ?x re-twisted wing EA, (total 90x EA) and 11x re-twisted wing RR]
(or are only the RRs with the upgraded wings?) By 2020 EK will have received ~25x RR A380s

After 2020 there are still 27 RR A380s to be delivered, before the additional 20 (+16) from the MoU.
I expect there must be some change in the 27 already ordered A380 otherwise the press releases wouldn't have stated that the 20 from the MoU will start being delivered from 2020. (or this is for a lessor).

Anyone some thought on this?

If a new engine is certified, can it also be used on current frames?

Is it a coincidence that lessor AMEDEO has ordered 20 A380s and Emirates MoU is for a order of 20 A380s and 16 options !?
How many A380s did Emirates receive before the A380 wings were reinforced?

CFRPwingALbody wrote:

How many A380s did Emirates receive before the A380 wings were reinforced?

reinforced?

Twist and with that lift distribution was changed.
this?
https://www.ainonline.com/aviation-news ... sh-airways

Slug71 wrote:

Airbus (or any business) won't sell for less than cost, and I doubt cost is that low.

Airbus says they are taking a "non-material" lost on the cost of A380 production. In other words, Aibus says they are selling for less than the cost of production, but that the loss is not a big deal amount.

The hope is that the business will turn around (neo??) and will pay back the losses. Weather there will be an actual NEO is a interesting question.

WIederling wrote:

CFRPwingALbody wrote:

How many A380s did Emirates receive before the A380 wings were reinforced?

reinforced?

Twist and with that lift distribution was changed.
this?
https://www.ainonline.com/aviation-news ... sh-airways

Forgetting the early planes that needed some reinforcement to be retrofitted?

Buffalomatt1027 wrote:

speedbored wrote:

BaconButty wrote:

Why do people keep saying this? It completely ignores the fact that Airbus had the A330 in its product portfolio, which along with the 767 and A300 was instrumental in fragmenting the market, at the point the A380 was launched. Not to mention Boeing had the 747 line which they would later recapitalise at no small expense. It's anthrpomorphisation of corporations and then projecting our biases onto them.

Even a quick look at any recent IATA annual report would debunk the "point to point is the future" myth.

The numbers of unique city pairs with airline service has shown a pretty constant increase in numbers year on year for at least 10 years, and the rate of increase has been outstripped by the general increase in passenger seat-miles. If anything, the rate of increase of unique city pairs has fallen slightly since 787 EIS. The data suggests that point-to-point is actually decreasing slightly as a percentage of the total market.

I know BA has been adding cities like San Jose, Oakland, Nashville, Austin, and so on. United just started a direct flight to Australia a couple days ago. But as more 787 get delievered, airlines do need to expand those point to point routes.

Also, passengers like frequency of flights ..... ideally an airline would like 1 A380 flight to where ever, but passengers like frequency and time flexibility.

It's business passengers who like frequency, which is why you don't find the A380 on LHR-JFK, most of the rest are price sensitive. Indeed, it's quite common for some people to book connecting flights rather than direct flights as the price is usually less.

kitplane01 wrote:

Slug71 wrote:

Airbus (or any business) won't sell for less than cost, and I doubt cost is that low.

Airbus says they are taking a "non-material" lost on the cost of A380 production. In other words, Aibus says they are selling for less than the cost of production, but that the loss is not a big deal amount.

The hope is that the business will turn around (neo??) and will pay back the losses. Weather there will be an actual NEO is a interesting question.

Airbus is taking a taking a "non-material" loss on planes delivered now. Why people extrapolate this to the aircraft that will be delivered as part of this sale I have no idea. A production rate of 6 per annum won't be a surprise now.

mariner wrote:

DWC wrote:

Yesterday French mag Challenge(s), which incidently Airbus the most, says Airbus may even have gone below that, considering the strategic importance of the deal ( and I'll add considering Leahy's imminent leaving the company ) : "Le prix catalogue de l'appareil est de 445,6 millions de dollars pièce, mais il est vendu, dans les faits, aux alentours de 230 millions, selon les calculs de Challenges et du cabinet Ascend dévoilés en juin dernier. Vu le caractère stratégique du contrat, il n'est pas exclu qu'Airbus soit encore allé plus bas"
https://www.challenges.fr/entreprise/ae ... 380_561107

"Airbus may have even gone below that"....

Well, maybe, maybe not, as long as the seller and the buyer were happy. Although I'm not sure why Leahy leaving the company should have affected the price.

I remember too well the A380-bashing Gellman Report of 2005 (?), which claimed that Airbus had sold the A380 to Singapore for $140 million. Many believed it.

But if you believe that, then you must also believe that Airbus made $60 million when it sold the Singapore lease on to Doric for $200 million - a much publicised event. I expect it's in the archives here.

So - sorry - but I don't believe any numbers until I hear them from one of the parties involved in the negotiation. And even then I'd prefer two sources, which used to be the golden rule for all journalists.

mariner

Singapore airlines at the time signed a lease to payback whatever they sold the aircraft for plus interest, with Doric giving a small discount for the residual value in 12 years. So with Singapore's excellent credit back then, they would have borrowed more than they paid.

The airframes were just visible collateral for the syndicate of banks Doric would have been the front for. I'm certain with Singapore as the end borrower, they would have been flexible on appraised value.

Singapore signed up for a 12 year loan that had the aircraft paid for in ten years and the final two years for interest. In other words, the resale price at transaction was probably a fictional but slightly justified value.

Lightsaber

Mariner wrote:

I remember too well the A380-bashing Gellman Report of 2005

...which predicted ~400 deliveries by 2020, IIRC. That was the lowest prediction and it was too optimistic.

It takes a lot of gall to continue dismissing something as biased "bashing" when history proved it didn't "bash" enough.

lightsaber wrote:

Singapore airlines at the time signed a lease to payback whatever they sold the aircraft for plus interest, with Doric giving a small discount for the residual value in 12 years. So with Singapore's excellent credit back then, they would have borrowed more than they paid.

It was always my understanding that Airbus itself financed the lease of at least the first A380 and that it was Airbus who sold that lease on to Doric.

Matt6461 wrote:

Mariner wrote:

I remember too well the A380-bashing Gellman Report of 2005

...which predicted ~400 deliveries by 2020, IIRC. That was the lowest prediction and it was too optimistic.

It takes a lot of gall to continue dismissing something as biased "bashing" when history proved it didn't "bash" enough.

Then maybe I've got a lot of gall but I defy anyone to read the report and say that it was positive to the A380. For the record, here it is - via Leeham:

http://leeham.net/images/FileLib/050416-shadow.pdf

mariner

Mariner wrote:

I defy anyone to read the report and say that it was positive to the A380.

Nobody said the report is positive for the A380; I'm just saying it was correct. Generous to the A380, actually.

Any unbiased statement about the A380 is a negative statement. It's been a financial disaster and far under-performed even its biggest public critics' expectations.

If you said "The U.S. sucks at rugby," you might be biased but you'd also be right. Accordingly, I'd have no occasion to dismiss your opinion as U.S.-bashing. Same goes for Gellman et. al. and the A380.

JustSomeDood wrote:

Business passengers are exactly the sort of pax you wanna cater to, especially on stuff like LHR-(North American Major), it's a way to increase yield per payload carried, hence BA flying hugely premium configured 744/77E/787s from LHR to North American Cities.

That's not always true. If it were, we wouldn't see more than half of most plane's long-haul configurations devoted to Y pax.
J seats occupy 3-4x the space of a Y seat these days. It isn't hard to see yield per cabin areas work out in the Y-cabin's favor quite often. Plus your non-airplane expenses (lounges, amenity kits, food/beverage) are a higher portion of fare for F/J than for Y.

gunnerman wrote:

Buffalomatt1027 wrote:

speedbored wrote:

Even a quick look at any recent IATA annual report would debunk the "point to point is the future" myth.

The numbers of unique city pairs with airline service has shown a pretty constant increase in numbers year on year for at least 10 years, and the rate of increase has been outstripped by the general increase in passenger seat-miles. If anything, the rate of increase of unique city pairs has fallen slightly since 787 EIS. The data suggests that point-to-point is actually decreasing slightly as a percentage of the total market.

I know BA has been adding cities like San Jose, Oakland, Nashville, Austin, and so on. United just started a direct flight to Australia a couple days ago. But as more 787 get delievered, airlines do need to expand those point to point routes.

Also, passengers like frequency of flights ..... ideally an airline would like 1 A380 flight to where ever, but passengers like frequency and time flexibility.

It's business passengers who like frequency, which is why you don't find the A380 on LHR-JFK, most of the rest are price sensitive. Indeed, it's quite common for some people to book connecting flights rather than direct flights as the price is usually less.

Business passengers are exactly the sort of pax you wanna cater to, especially on stuff like LHR-(North American Major), it's a way to increase yield per payload carried, hence BA flying hugely premium configured 744/77E/787s from LHR to North American Cities.

Matt6461 wrote:

Nobody said the report is positive for the A380; I'm just saying it was correct. Generous to the A380, actually.

Not that generous:

http://leeham.net/images/FileLib/050416-shadow.pdf

"In January, 2001, Airbus could reasonably have projected 496 A380 deliveries over the first 20 years. (The study team itself holds the view that a more realistic expectation is about 350 A380 deliveries.) "

Matt6461 wrote:

Any unbiased statement about the A380 is a negative statement. It's been a financial disaster and far under-performed even its biggest public critics' expectations.

I've never said otherwise, but you know I don't come here to discuss finance - although I can. I come here to share my love of civil aviation. So the paradox is that the A380 gets very high marks from passengers - such as me.

And some of the finest aircraft I've ever flown have been financial disasters - the VC-10, for example. So it is beyond my imagining that supposed lovers of civil aviation can be so very negative to the A380.

mariner

mariner wrote:

lightsaber wrote:

Singapore airlines at the time signed a lease to payback whatever they sold the aircraft for plus interest, with Doric giving a small discount for the residual value in 12 years. So with Singapore's excellent credit back then, they would have borrowed more than they paid.

It was always my understanding that Airbus itself financed the lease of at least the first A380 and that it was Airbus who sold that lease on to Doric.

Matt6461 wrote:

Mariner wrote:

I remember too well the A380-bashing Gellman Report of 2005

...which predicted ~400 deliveries by 2020, IIRC. That was the lowest prediction and it was too optimistic.

It takes a lot of gall to continue dismissing something as biased "bashing" when history proved it didn't "bash" enough.

Then maybe I've got a lot of gall but I defy anyone to read the report and say that it was positive to the A380. For the record, here it is - via Leeham:

http://leeham.net/images/FileLib/050416-shadow.pdf

mariner

The report states state aid to be repayable over a 17 year period.

Does this mean Airbus:

1) have to pay all outstanding state aid monies by the end of 2018
2) the state will take a loss and write of any remaining aid monies owing; or
3) the A380 program has already accounted for the repayment of state aid monies over the original seventeen year period?

If option 3 is correct than the cot to manufacture the A380 could be substantially less in the very near future

BaconButty wrote:

kitplane01 wrote:

Slug71 wrote:

Airbus (or any business) won't sell for less than cost, and I doubt cost is that low.

Airbus says they are taking a "non-material" lost on the cost of A380 production. In other words, Aibus says they are selling for less than the cost of production, but that the loss is not a big deal amount.

The hope is that the business will turn around (neo??) and will pay back the losses. Weather there will be an actual NEO is a interesting question.

Airbus is taking a taking a "non-material" loss on planes delivered now. Why people extrapolate this to the aircraft that will be delivered as part of this sale I have no idea. A production rate of 6 per annum won't be a surprise now.

I'll answer that.

Airbus has been building A380s for at least 12 years. They have presumably already extracted much of the possible efficiency and learning that can be had. The production rate is slowing. They have not told the media of new and important production cost reductions, which if they did exist their stockholders would want to know about.

We have reasons to believe that the costs are not going to significantly decrease ... and no reason to believe otherwise.

Their geographically scattered production system is probably exactly what you don't want to minimize production costs under a low rate schedule.

WIederling wrote:

CFRPwingALbody wrote:

How many A380s did Emirates receive before the A380 wings were reinforced?

reinforced?

Twist and with that lift distribution was changed.
this?
https://www.ainonline.com/aviation-news ... sh-airways

No this issue: Aviationweek A380 Wing rib feet crack

XT6Wagon wrote:

Forgetting the early planes that needed some reinforcement to be retrofitted?

do you have a reference?

AFAIR
we have the "wing rib thing" and
observed fatique somewhere in the fuselage ribs rear end of wingbox to fuselage join.
we have the initial minimal upgauge of materials in a select place of the wing to fix the 147% ultimate load failure.
more?

kitplane01 wrote:

We have reasons to believe that the costs are not going to significantly decrease ... and no reason to believe otherwise.

The footprint of A380 dedicated infrastructure has been significantly reduced. Buildings have been repurposed
and some associated workforce are thus removed from the A380 production cost run up. ( now available to A350 and my guess A320 production.)

Their geographically scattered production system is probably exactly what you don't want to minimize production costs under a low rate schedule.

Some really hate that, do they?
But it is quite effective for high value product manufacture. Even more for low number production.