Every Which Way But Loose
August 4th, 2008
After taking delivery of its first Airbus A380-800, (complete with showers for First Class passengers) Emirates decision to exercise 30 options on A350’s and commit to a new purchase of 30 A330-300’s will surely get people wondering just how many more widebody airplanes can the airline absorb and operate.
(Quite why anyone would pay a ludicrous amount of money for the luxury of an on board shower when it could be better spent on hiring a private jet is of course an entirely different matter! Fractional ownership, anyone?)
On the back of a historic order placed just a few weeks ago at the Farnborough Air Show by neighbouring Abu Dhabi based Etihad Airways, the Middle East now is not just a battleground divided on religious and political grounds, but its a theatre of intense cut throat competition to both lure tourists and transit passengers to the ends of the Earth using its geographic location as a springboard to cover the globe.
All images courtesy of Emirates
Only recently EADS clinched a deal with (Abu Dhabi based) Mubadala Aerospace to supply a variety of components for new and existing Airbus airplanes. It comes as even less of a surprise that EADS has announced a potential deal with Dubai Aerospace Enterprise (DAE) to shift some manufacturing work from Europe to Dubai.
Such deals are not without their sceptics and perhaps rightfully so. There is widespread belief that the majority of these big orders won by Airbus in the Middle East are not without strings firmly attached.
“(The United Arab) Emirates owns Airbus. They don’t need a manufacturing facility in the Middle East when they have one in France,” says Doug McVitie, Managing Director at Arran Aerospace.
“This has little to do with the dollar and everything to do with their new Middle East paymasters,” he goes on to say.
Another US-based industry commentator was riled at the announcement of Emirates decision to opt for Airbus A330-300’s without so much as giving Boeing a chance to compete in the absence of an RFP, confirming a sea of change in its industrial and geopolitical strategy.
“It looks like the [Boeing] 777 was an “anomaly”; otherwise this is an Airbus airline,” he said on the condition of anonymity.
“Boeing only prevailed in cases of clear superiority over a competing Airbus product, i.e., the 777-200LR / 777-300ER vis-a-vis the A340-500 / A340-600, or the fact that Airbus did not have a competing product, i.e., the A380-800F vs the 747-8F,“.
Teal Group’s Richard Aboulafia gave his candid opinion at the end of last years bumper “orderfest” and noted how a third of Airbus’ widebody orders lay firmly in the Middle East region.
“Mideast orders comprise 9% of Boeing’s backlog and 13% of its twin aisle backlog. But the Mideast market accounts for 19% of Airbus’s total backlog by value and an astonishing 33% of Airbus’s total twin aisle backlog,” he wrote in his newsletter published in December 2007.
Critically, of the (circa) 200 firm orders for the A380 family, 73 of those come from Emirates, Etihad Airways and Qatar Airways, representing a third of the entire orderbook. (Data kindly supplied by Uresh Sheth, correct as at July 14, 2008).
The A350 too, has a heavy reliance on two of the three above named carriers. According to wikipedia, there are 477 firm orders for the A350 family, of which 227, are based on Middle East based carriers, representing over 47% of the program orderbook.
Of course, the question of European airlines staring in despair at the prospect of a tirade of flights from the Persian Gulf peninsula could ultimately lead to the death knell of some carriers. Emirates itself has made known its plans to boost its presence in Germany, much to the ire of Lufthansa.
“What exactly will the French government do when confronted with thousands of job losses at Air France-KLM or cancellation of hundreds of combined A350/A380 orders,” says the US commentator.
One source on Capitol Hill points out that the furore over Washington’s reluctance to bless the Dubai Ports World deal in 2006 is one reason for the UAE’s tacit acceptance to align itself more towards Europe for commercial reasons while placating the US politically by agreeing with the latters policies in the region.
Despite delivering Emirates first A380 on July 28th, 2008, EADS stock dropped to an intra-day low of E12.2 before closing at E12.22 (Source: Bloomberg.com).
“There is still a lot of work ahead of us,“ Airbus CEO Tom Enders said in relation to the A380 program, raising fears that the projected delivery targets for 2009 and 2010 may be revised for a second time.
Airbus’ success in the Middle East is not without merit. Having borne the wrath from (Qatar Airways CEO) Akbar Al Baker on the undefined A350XWB late last summer and soon after signing the deal at the Paris Air Show and then irking Emirates with delays to the GP7000 powered A380 by some 21 months, Airbus has ridden the waves of distress and success remarkably well.
There is little doubt that Emirates, Etihad and Qatar Airways will eventually induct all the airplanes that they have ordered over the last few years. The bigger question is just how hard costs will bite into their cash flows to finance these jets and also whether between the four key airports in the region (Abu Dhabi, Dubai International, Al Maktoum International and New Doha International airports) there is enough traffic to fill all those seats the three big airlines will have on offer.
Airbus’ production plans runs the inherent risk that any major deferrals by any of the three big Arab airlines will throw those plans into disarray. With Power8 being stretched out to 2012 and seeing the overall EADS workforce grow by 1% since 2007, questions over the success of the cost cutting regime while ploughing ahead to offer work to the UAE and China remain.
“Like any offset program, the China A320 line is an expensive waste of time and money,” says Aboulafia.
“Airbus is now held to ransom in China and in the Middle East - in both cases a hostage to someone else’s fortune,” McVitie says.
Emirates, Etihad and Qatar Airways’ hold on the A350XWB program is the one area most analysts fear Airbus’ exposure could end up being fatal. Having seen countless iterations of the ill-fated A330-derived A350, the A350XWB is not only the near two decade old response to the Boeing 777 family, Airbus also has its work cut out to prove its credentials of being able to deliver the airplane on time.
Seeing the 787 Dreamliner being delayed three times due to varying supplier, logistic and production issues, the workshare distribution on the A350XWB will equally be under the watchful gaze of the entire industry, not least because Airbus is also taking a new panel approach to building the airplane, also using composites like the 787.
Resources are starting to get stretched somewhat at Airbus - the flagship A400M still has a mountain of challenges to overcome and EADS boss Louis Gallois admitted that progress was “slower” than expected. Already running several months late with a charge of almost E900m against it, the A400M is another needless distraction for EADS as it struggles to balance a greater backlog on its commercial side with a view to meeting those order commitments whilst decreasing the size of its workforce.
The recent decision by the GAO to uphold Boeing’s protest on the USAF tanker award has only served to stifle Airbus’ ultimate aim of shifting A330 production to the United States. Given the popularity of that twinjet, the company hasn’t contemplated using its UAE partners in assembly just yet - if Northrop Grumman/EADS lose the tanker deal, the prospect of Mubadala/DAE pushing for final assembly of A330’s just as Tianjin has the A320 line, may be something Airbus gives serious consideration to. As to how that would be taken in Europe remains to be seen, although it will be a bitter pill for Franco-German workers to swallow if such overtures are entertained.
In any direction that it turns in the Middle East, the powerhouses of Emirates, Etihad and Qatar Airways possess the power to turn Airbus every which way but loose. At the same time, will some of these carriers regret their alignment to Europe over the United States?
Airbus’ major wins in the region does not mean that Boeing has “lost” much, if anything. According to this order spreadsheet, Boeing has also secured some sizeable orders too. (Data kindly supplied by Uresh Sheth, correct as at July 14, 2008).
Only time will tell whether Airbus comes good on the A350XWB, and we have three big carriers all waiting on the sidelines watching closely too.
Sphere: Related ContentEntry Filed under: 737NG, Aeroplane, Aerospace, Air Arabia, Air Transport, Air Travel, Airbus, Airbus A318, Airbus A319, Airbus A320, Airbus A321, Airbus A330, Airbus A350, Airbus A350XWB, Airbus A380, Airbus Orders, Airlines, Airplane, Airplane Order, Airplanes, Airport, Airports, Aviation, Bahrain Air, Boeing, Boeing 737, Boeing 747-8, Boeing 747-8F, Boeing 747-8I, Boeing 777, Boeing 777-200LR, Boeing 777-300ER, Boeing 777F, Boeing 787, Boeing 787 Order, Boeing 787 Orders, Boeing 787 Premiere, Boeing 787 Rollout, Boeing 787-10, Boeing 787-3, Boeing 787-8, Boeing 787-9, Boeing Orders, DAE, Dreamliner, EADS, Emirates, Etihad Airways, FleetBuzz.com, Gulf Air, Iraqi Airways, Jazeera Airways, Kuwait Airways, Low Cost Airlines, Low Cost Carriers, NAS Air, Saudi Arabian Airlines, Travel, Yemenia
28 Comments Add your own
1. Steve | August 4th, 2008 at 8:41 am
Another Airbus “glass half-empty” editorial. I need to sit down!
Quite why anyone would pay a ludicrous amount of money for the luxury of an on board shower when it could be better spent on hiring a private jet is of course an entirely different matter!
Nobody is paying ludicrous amounts of money to have a shower on a plane. It’s an additional facility for 1st class pax. EK has said they won’t be charging a premium for A380 pax, unlike SQ.
Sounds to me like Doug McVitie and your “anonymous source” (why was he/she “riled”?) are just bitter. But tell me, what plane could Boeing have offered Emirates in the same time frame they can get their A330-300s?
Maybe, just maybe, Boeing is reaping the harvest of US foreign policy? In which case, Boeing should be using its legion of Washington lobbyist to get the US government to modify ME policy (or maybe they’re too busy trying to have the tanker deal put on a plate for them?)
It’s strange how every Airbus order from the ME is “high risk, selling-out-the-company” type orders, while large Boeing orders from the very same airlines are all good business. Emirates planning to operate over 100 777s is presumably a good thing, but 100 A350s is bad.
It seem Emirates is still looking at the 748i. But that can’t be right, it isn’t built by Airbus!
http://www.atwonline.com/news/story.html?storyID=13555
I suppose the preferred solution to Airbus’s “problem” in the Me, would be to simply not sell planes there, and let Boeing have all the business.
Oh, by the way, expect a major A350 commitment next week from a non-ME airline.
2. boeing investor | August 4th, 2008 at 9:20 am
Etihad charges roughly $6600 for a roundtrip to NYC from AUH in F class. Emirates (A380/DXB) is about $10,000, a 33% *premium* by anyones account!
Would it be fair to assume/presume that British Air managed to secure slots of 2010 for 777-300ER’s that Emirates could not have at least gotten the same rather than wait till 2012 for A333’s?
Afterall, wouldn’t Boeing accomodate one of its largest 77W operators? I would find that hard to believe otherwise.
Who said Emirates operating 100 A350’s is bad? Its only “bad” for Airbus because much of the A350 orderbook rests with just one or two key carriers in the region as indicated by the article. The same is not true for the 777.
Its a “given” that these M.E airlines will not cancel the A350 orders placed, but the *risk* of damage to the program if one or more carriers did cancel places the entire A350 in huge jeopardy - nothing to be scoffed at with a near $20bn price tag while still aiming to recoup the $25bn wasted on the A380!
3. Jamie D | August 4th, 2008 at 10:17 am
Shaikh Maktoums speech at the A380 delivery was brilliant, especially his words about expanding in Germany (presumably with his armada of 58 A380’s!)!!!
Watch out Lufthansa!
4. Steve | August 4th, 2008 at 10:33 am
Emirates is not charging more for A380 flights than flights on other types. Comparing their fares with other airlines is irrelevant to that point. SQ is charging an A380 premium.
BA is only getting 77Ws in 2010 by leasing them. But, apart from that, Emirates requirement was to replace A330-200s with another regional plane. What could Boeing have offered in the same time? The 77W is a fine plane, but a lot more expensive than A330s and cost more to operate on the regional routes the A330-300s are intended for. High fuel costs now preclude the option of abusing long-haul types on short-medium routes, the 777 is not the best plane for EK’s requirement.
the *risk* of damage to the program if one or more carriers did cancel places the entire A350 in huge jeopardy
With over 500 orders and commitments (and more to come very soon), the A350 is under no risk from one or two customers cancelling, even the biggest. If EK and QR did cancel their orders, it would of course be a blow to the A350, but it certainly would not stop the program, or place it in jeopardy.
5. boeing investor | August 4th, 2008 at 10:59 am
Pretty sure Brit Air is NOT leasing:
http://www.boeing.com/news/releases/2008/q3/080801b_nr.html
“The Boeing Company [NYSE: BA]. is pleased that British Airways has reinforced its long-standing relationship with Boeing by agreeing to purchase Boeing 777-300ERs for its long-haul fleet.”
Even BA’s press release speaks of an outright purchase, not lease
Emirates uses its 777-300ER’s on a multitude of regional routes, call it “misuse” if you will - across the Indian Subcontinent for example - the A330 certainly doesnt have an “edge” in terms of selection, and again I find it very hard to believe Boeing would not have offered pre-2012 777’s to Emirates. I find it even harder to believe that Emirates would turn the 777 down in favour of A330’s!
As for canceled A350 orders, I apologize if I wrongly implied that this would lead to the end of the said airplane - rather, the damage from losing one/two key clients would be immense.
Of course, if Airbus was driven by profit and not market share, cancelation of any EK/QR/EY A350/A380 order(s) would be fatal.
6. Steve | August 4th, 2008 at 12:58 pm
Pretty sure Brit Air is NOT leasing:
This week’s Flight International (electronic version) claims that 4 of the 6 will be leased (from GECAS). My BA contacts also say they’ve been told 4 will be leased. Which pretty much explains first delivery in 18 months for a plane with a backlog of 350+.
Boeing’s PR also suggests the deal has not yet been completed.
7. Steve | August 4th, 2008 at 1:00 pm
Of course, if Airbus was driven by profit and not market share
What makes you think they’re not driven by profit? Without additional A380 costs, they’d have posted over 10% profit margin instead of 5%+ for 6 months.
8. boeing investor | August 4th, 2008 at 1:29 pm
“This week’s Flight International (electronic version) claims that 4 of the 6 will be leased (from GECAS).”
Could well be - I’d be more inclined to side with Boeing’s press release than Flight International
From what I know, the 4 options are the airplanes that may be leased from GECAS, but the 6 firm are a direct purchase from Boeing, vis a vis the 787 delay “compensation”.
9. Ken | August 4th, 2008 at 2:09 pm
As a former EADS shareholder I must put in my 2 cents worth.
Although I lost a few dollars on EADS when I sold my shares I luckily did so prior to the A380 fiasco announcement, so I have followed the misfortunes of Airbus very closely.
Let me just say right from the beginning that EADS and Airbus are the worst run companies I’ve ever owned shares in.
So Airbus by attaching itself to the middle east in so many ways has set itself up for a catastrophic failure if one or two things happen.
Emirates finally has to realize the reality of the aviation business as it now exists, who the hell is going to fly to UAE for a holiday? the center of the universe is not Dubai and no matter how much money they throw at it, and how many islands they build it never will be anything more than a glitzy expensive city in the middle of nowhere.
Second scenario is all the Gulf carriers are fighting for a share of a diminishing market, there is not enough traffic to sustain a profit for any of them.
One or two of the Gulf carriers will suffer from some type of failure, they cannot sustain the acquisition rate for new aircraft and expect to fill seats. No matter how rosy they may paint the picture, they must justify their existence like any other business.
As many analysts have said the need for 747/A380 sized aircraft is diminishing, they cost to much to operate, they are hard to fill, landing fees are astronomical, and if you are a commercial traveler you don’t want to get to an airport and wait for hours until you and 600 fellow passengers sort through their luggage and wait again at customs.
So I’ve ranted enough, but you get the picture.
Many analysts both financial and aviation agree that the Middle East is a volatile and uncertain market, and despite all the rhetoric from the leaders of the UAE it really is a gigantic bubble fraught with immense risk, many call it a house of cards that with one change in the winds of fortune would collapse into an empty desert.
10. Chris Wallace | August 4th, 2008 at 2:30 pm
If the A380-800 had never been launched, EK would be operating scores of 747-400s right now. It just so happened that when they decided to launch their major expansion, the A380 was “available” so they went with the better plane for their needs.
EK will never buy the 747-8I. I don’t know why they keep mentioning it, since an A388 can do everything a 748I can for them - only better. If necessary, EK will wait for the “Mk. II” A388s with improvements gleaned from in-service data as well as the built-in MTOW growth as necessary to reach the West Coast of North America from JXB. Plus with the runway length at JXB, those A388s will be able to depart at MTOW even on the hottest days.
The Middle East is not only perfectly suited to serve the European Union to Africa/Asia/Oceania/Australia, but it is also perfect to serve North and South America to India and Africa. By operating shorter stage lengths, the Middle Eastern carriers will be able to operate much closer to MZFW payloads then those that have to fly to HKG/SIN first, to say nothing of those going non-stop to NRT, ICN, or PVG/PEK. That means EK A388s will depart LHR and FRA with not just their cabins, but also their bellies full and will need to burn less fuel for the entire mission. And they should be able to get better aircraft utilization since they will have two medium (sub-12 hour) missions as opposed to one long and one short. So they could possibly get in an extra turn a day (four vs. three).
11. Aurora | August 4th, 2008 at 3:51 pm
I recollect that Mr. Steven Udvar-Hazy alluded to the extremely “generous” terms that Airbus was being forced to concede to garner these large mideast orders for the A350. To paraphrase SUH, Airbus would not be able to sell the planes if they didn’t give generous concessions. One wonders what these concessions are; we already have one analyst (Mr. Doug McVitie) alluding to 55% “market distorting discounts” to EK on their 1st A350 order. I suspect that any of these three carriers (EY, QR, EK) could cancel all or part of their A350 or A380 orders on a whim, with no penalties.
For Dubai Inc.’s part, they are after much more than aircraft. They will use these orders to extract route concessions and a share of the production. One wonders what Qatar and the UAE will demand? Whatever they eventually demand, this whole endeavor is shaping up to be much more than an aircraft deal.
12. sky mapper | August 4th, 2008 at 4:43 pm
“EK will never buy the 747-8I. I don’t know why they keep mentioning it, since an A388 can do everything a 748I can for them - only better.”
Disagree. The Airbus apologists at Flight global posted recently that by 2012 the A380 would have 2h more endurance et al compared to the 747-8I.
So, Airbus ridicules a “40 year old” airplane, and takes 12 years for the A380 to “catch up” and surpass it?
Hardly the makings of a good airplane!
Lets not forget, the chances of the new 747 improving performance will likely force Emirates into a purchase rather than stand idly by and see more customers line up for it.
Emirates screwed up royally by missing the 787 boat, and they may yet do it again by missing out on the 747.
13. Chris C | August 4th, 2008 at 5:08 pm
Very interesting article indeed, thank you!
Chris Wallace: (Or is it “Stitch?)
I would have to disagree with you completely on your statement that “Emirates will never buy the 747-8I. The 747-8I and A380 will compliment each other well in Emirates, and further, the -8I has already been earmarked to fly the Asian routes according to Emirates, as well as Dubai - Los Angeles year-round. There’s a simple reason why Emirates keeps on mentioning the -8I: It’s an “excellent aircraft” and one that Emirates is very, very interested in….even more than just interested in!
14. Steve | August 4th, 2008 at 5:13 pm
Emirates finally has to realize the reality of the aviation business as it now exists, who the hell is going to fly to UAE for a holiday? the center of the universe is not Dubai and no matter how much money they throw at it, and how many islands they build it never will be anything more than a glitzy expensive city in the middle of nowhere.
Plenty of people do fly to the UAE for a holiday. However, the majority of EK’s passengers do not set foot in Dubai.
As to being in the middle of nowhere, you couldn’t be more wrong - look at the globe, the Gulf is slap in the middle of Europe, Asia and Africa. An ideal place for a mega-hub connecting billions of potential passengers.
Look at EK’s year-on-year passenger growth and their profits. They’re a money-making machine. They have a great business plan and are in business to make money.
15. Steve | August 4th, 2008 at 5:22 pm
Emirates screwed up royally by missing the 787 boat, and they may yet do it again by missing out on the 747.
How, exactly, did EK “screw up” by not ordering 787s? Boeing wouldn’t offer the -10 that EK wanted. The A350 does for them what they wanted a 787 to do. How have they screwed up?
Likewise, the 748i doesn’t quite do what EK want it to do. So again, how have they screwed up by not ordering it?
16. sky mapper | August 4th, 2008 at 5:41 pm
Every major carrier is a 787 customer - are they blinded by some Boeing “PR”?
EK knew FULL WELL that this imaginary 787-10 never existed so they couldnt order it! Duh!
Look at the 747-8I - EK threw a hissy fit over the fuselage length - why the heck should Boeing tailor an airplane for ONE customer when it has others lining up?
On the face of it, the 747 DOES do what EK wants, because by Flight globals admission the A380 will not have enough endurance until 2012 before it barely surpasses the “40 year old” 747. Ridiculous Steve, you’re clutching at straws.
The simple fact is Boeing doesnt need to placate on price when the -8F is selling. It can charge a premuim, a price perhaps too high for EK to pay since they get near 50-60% off list with Airbus.
Also, A350 does NOT do all that EK wants it - the price they paid for them ensures that EK will be happy to take the machines - EK is on record to say that the -1000 doesnt have the seat count, range or freight space compared to the 777-300ER.
The A350-800 is just an overweight pig and the -900 is edging towards being 4t overweight - and this is a COMPOSITE airplane? Gimme a break - Airbus may as well have stuck to aluminum!
In fact, which A350 model ISNT overweight?!!
17. Steve | August 4th, 2008 at 7:28 pm
Every major carrier is a 787 customer
Every major carrier? Even Boeing wouldn’t dare claim that.
EK knew FULL WELL that this imaginary 787-10 never existed so they couldnt order it!
Boeing was touting the -10 to anyone who would listen. As the scale of 787 problems became clear, the -10 has been put on the back-burner. It may well end up in the waste-bin with the -3.
why the heck should Boeing tailor an airplane for ONE customer when it has others lining up?
Isn’t that exactly what Boeing has done with LH? Who else is “lining up?”
EK is on record to say that the -1000 doesnt have the seat count, range or freight space compared to the 777-300ER
Well Duh! It’s a smaller, but much more efficient, plane. Apparently it’s good enough for four airlines to have ordered it, with another joining their ranks next week. Oh, in case you missed it, EK bought another 30 A350s last week. It must really stink.
The A350-800 is just an overweight pig and the -900 is edging towards being 4t overweight - and this is a COMPOSITE airplane?
Yes, the -800 is such a pig that 40% of all A350 sales are for that model. The airlines are so misguided, why didn’t they ask you for advice?
The A350 is currently overweight, but unless I missed something, the 787 is one seriously phat bird itself. Didn’t SUH say the -9 was something like 9t overweight? :-O
You’ve still failed miserably to explain how EK has screwed up. You argument seems to be they’ve screwed up because they didn’t order from your darling Boeing.
18. Jacobin777 | August 4th, 2008 at 8:39 pm
I have to agree with Aurora here….there is MUCH more to it than just EK/EY/QR purchasing Airbus planes.
As the article points out, there are “plots” and “subplots” to all of the Airbus planes being purchased. The “unbalance” of the Middle East Airbus order book speaks for itself.
I don’t think the article states that Boeing isn’t vulnerable because indeed it is (and even more so given the recent B737 win with Fly Dubai). I’m also a bit skeptical on EK purchasing the B748I. I was hoping EY would be purchasing it, but the recent Farnborough order of the A380 has somewhat dashed that hope.
That being said, as the article stated, Airbus is MUCH more vulnerable to the Middle East than Boeing is. As the article also stated, what will the various “legacy” European carriers do when/if EK decides to start launching other routes out of Europe? We’ve already seen LH not too happy about it.
I think ILFC is on company which might have problems as well….QR has already started their leasing business “Onyx Leasing” and its just a matter of time before EK start sending a number of their birds (both old and possibly new) to a leasing subsidiary.
As Aurora also stated, discounts of 50%-55% for even non-launch carriers (such as EK) is becoming common at Airbus.
Leahy had previously stated that carriers which purchased the A350mark-I would be able to get the A350XWB at the same prices.
There is no doubt I think EK as well as EY and QR will do well (at least for the next few years)…pax like flying on these carriers (even though their standards have gone down..at least with EK), but the question is how sustainable is the current order and delivery rates with these “3 horseman”-something which is more important to Airbus and Boeing…add to the fact there are smaller LCC’s now springing up such as Jazeera Airlines and Air Arabia (and the aforementioned FlyDubai), as well as the other Gulf Carriers such as GF, SV..the next 10 years in Middle East Aviation is going to be quite interesting.
Finally, I do not believe Dubai’s economic model is sustainable. 6-7 years ago, I used to hear many people talking about “Dubai is or is going to be the “place to be”", I dont’ hear of that as much anymore (personally, I would rather buy property now in Sharjah..;-) )In fact, inflation in the Gulf countries such as Qatar and the Emirates is hitting a staggering >20%!!
19. SthPacific787 | August 4th, 2008 at 10:21 pm
Message for Steve. If you don’t like it, don’t read it. It’s save me having to scroll down past your posts to read the good stuff!
20. Steve | August 4th, 2008 at 11:13 pm
Message for SthPacific787. If you don’t like my comments, don’t read them.
21. Chris Wallace | August 5th, 2008 at 1:56 pm
Boeing and Airbus curry favor with China because of the size of the market (Airbus opening an A320 FAL and Boeing’s long history of choosing Chinese suppliers for their planes). Why should it be any different for the Middle East, which is also a strong growth market?
As to the 747-8I at EK, if they love it so much, why have they not ordered it? If they want to use it on routes other then JXB-LAX/SFO/YVR then the current range will be fine so nothing should be stopping them.
22. Gary | August 5th, 2008 at 5:35 pm
Umm..
As crude prices went up, this buying spree is kind of helping to ease the pain with the trade balance.
As you know, buying in bulk saves. As a passenger, I am not worry about flying on Middle East Airlines at discount prices with reasonably service. Just like I do not mind to shop at Wal-Mart for the same product offered at Nordsdrum.
The only risk here is that the suppliers, like Mr. Rich Aboulafia suggested, are over-concentrated on a segment of customers. And one of the supplier is hanging on public money for lifeline at least for the time being. Since listed price of its shares is close to nothing (as suggested earlier by major stock analyst), a slight adjustment of business scenario to the south might render taxpayers to take further financial blunt.
Anyway, like the airlines management, I prefer to see both (or more) competitors stay healthy and produce the most efficient stuff for us, the consumers to enjoy. This is a tough challenge in face of the current energy crisis. A strong Airbus Industrie (& EADS) is in the best interest of every consumer, passengers and airlines alike.
23. sky mapper | August 6th, 2008 at 7:53 am
-Every major carrier? Even Boeing wouldn’t dare claim that.
Who said anything about claiming that?
-Boeing was touting the -10 to anyone who would listen.
Really, considering it was only EK harping on about it and not buying it - that is if you are deluded enough to believe that a -10 model even really existed to buy in the first place.
-It’s a smaller, but much more efficient, plane.
…and its losing that edge every day as Boeing enhances the 77W with a 10% (or more) improvement and the A350-1000 adds weight etc etc
-the 787 is one seriously phat bird itself. Didn’t SUH say the -9 was something like 9t overweight?
Is it? How many tons overweight? 1? 2? 3? 4? 5? 6?
As for Hazy, I find it funny that the -9 launch customer ANZ hasnt said squat about it being 9 tons overweight, let alone Boeing. SUH is out on a limb, as are you!
24. Aurora | August 6th, 2008 at 10:28 am
SUH is out on a limb, as are you!
Maybe he’s worried? It used to be he worried about the likes of GECAS and Pegasus; now there’s competition from the middle east, with China looming. If these orders are eventually delivered, these aircraft could be finding their ways into the hands of lessors if the grandiose plans for expansion don’t pan out.
25. Chris Wallace | August 6th, 2008 at 2:22 pm
Up until the latest round of delays, Boeing was presenting a planned 787-10 model to airlines along with the -3, -8 and -9. MTOW and systems were the same as the 787-9, passenger count was about 310, and range was expected to be around 7800nm.
26. Steve | August 7th, 2008 at 5:39 pm
From what I know, the 4 options are the airplanes that may be leased from GECAS, but the 6 firm are a direct purchase from Boeing, vis a vis the 787 delay “compensation”.
Today’s Boeing order update confirms that BA only ordered 2 77W.
27. Steve | August 7th, 2008 at 6:03 pm
Who said anything about claiming that?
You were the one that claimed every major has ordered the 787.
Really, considering it was only EK harping on about it and not buying it
No, EK was not the only airline that told Boeing that the -10 they were considering offering for sale was not up to snuff. Do some research.
Here’s a good start:
http://www.boeing.com/news/releases/2007/q2/070619c1_pr.html
As long ago as Dec 2005, Boeing was talking about launching the -10.
http://www.atwonline.com/news/story.html?storyID=3547
Those airlines that were pushing Boeing for a better -10 are now looking seriously at the A350. Expect some major news next week.
as Boeing enhances the 77W with a 10% (or more) improvement
What changes have garnered a 10% improvement today? They might be working on getting there, but what have they announced yet?
Is it? How many tons overweight?
According to the 787’s biggest customer, 14,000lbs.
http://www.atwonline.com/news/other.html?issueDate=11/12/2007
QUOTE:He also said that the 787-9 is around 14,000 lb. over budget on its operating empty weight.
You still haven’t explained how EK “screwed up” by not ordering the 787 and 748i.
28. boeing investor | August 8th, 2008 at 6:44 am
Steve, I stand corrected on the BA lease deal.
Cheers.
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