104 Comments Add your own

• 1. Vero Venia  |  April 15th, 2009 at 18:05

  

  Today is obviously a dog day!

  http://www.flightglobal.com/blogs/flightblogger/2009/04/bo-eing-and-the-presidential-p.html

• 2. Jerrold  |  April 15th, 2009 at 18:16

  

  What are the implications of the A 380 problem for Boeing’s 787.

  Both are suffering from deferrals and maybe cancellations but the 787 seems to be less maladapted to this changing world than the A380.

  Will this result in any carrier eventually shifting an order over to Boeing? Until the economy and the market recovers, hauling this big plane around does not seem to make sense.

  If not resulting in shifting orders, will the circumstances keep more carriers from cancelling or deferring their 787 orders.

  Would you share some thinking on the dynamics of your posted article

• 3. boeing investor  |  April 15th, 2009 at 18:39

  

  http://www.airwaysaviationnews.com/2009/04/asia-pacific-airline-market-status.html

  “It’s just a matter of time before Airbus has no choice but to cut the A380 production rate again, further undermining the already flawed and irrecoverable business case for Europe’s worst airplane program since the highly acclaimed but highly dismal business appeal of the failed Concorde project.”

  Back in the day, Aerospatiale and the former BAE Systmes did the right thing and killed Concorde - why wont they be brave and do the same on the WhaleJet?

• 4. Aurora  |  April 15th, 2009 at 19:36

  

  “Breakeven (my view) may be closer to 600.”
  “the business case for filling the A380 becomes more and more dismal . . . .”

  What business case? Was there ever a business case? Did Concorde have a business case? Who needs a business case?

  Vive la Whalejet!

• 5. joolzg  |  April 15th, 2009 at 19:46

  

  lets wait and see if the 787 lives up to its billing, what a biased group of people you are.

  especially when the americans who were so upset that they could not build a concorde so they did their best to stop it flying!

  I cant wait to see what your saying in a year when the 787 is put back another 18 months because of “technical difficulties” and the “whale” is still being delivered and flown all over the world.

  is it anything to do with you losing the title of “building the largest passenger plane”!!!

  joolz

• 6. Mike M  |  April 15th, 2009 at 22:09

  

  Joolz what in the name of the Universe are you on about?

  Americans were not against Concorde - the whole fucking world was - it was an environmental abomination. Thats exactly why Boeing failed with the Sonic Cruiser concept too. You know, fuel economy and all?

  Actually an 18 month delay to the 787 would be GREAT - it would completely miss this economic downturn and be in much BETTER shape at service entry than the A380 - Qantas grounds its entire fleet due to tech issues, Emirates sends a nice 40 slide powerpoint presentation and Singapore quietly sucks ass knowing its 65% discount on the fat pig was worth it.

  As for titles - they mean nothing - yet Airbus seems to want to clamor for the “fastest selling” tripe at every opportunity it gets to pimp its current whore that is the A350-not-as-wide-as-the-777-but-we-still-call-it-”Extra-Wide-Body” XWB airplane!

• 7. Chris Wallace  |  April 15th, 2009 at 22:16

  

  Airbus is not about to cancel the A380, so why people keep expecting/hoping for it is beyond me. Okay, they may never make any money off it, but they at least keep whittling down the amount of money they lost.

  It appears Economy cabin traffic is imploding almost as deep as First and Business class since the significantly larger Economy cabins on the A388 vs. the 744 and 77W matched with seat-mile costs should imply SQ, QF and EK being able to discount fares deeper to stimulate demand while still making money.

  However if A388 operators can’t fill the back at a profitable level due to a finite limit of people willing to fly regardless of fare price, then that could favor operators like SQ and EK with 77Ws vs. QF which doesn’t have anything smaller then the 744 when it comes to long-haul intercontinental services in the current environment. Notice SQ has now pulled the 744 off SIN-LHR (probably the most “bell-weather route n their system) in favor of the 77W.

• 8. Mike M  |  April 15th, 2009 at 22:21

  

  Chris Wallace:

  >>>Airbus is not about to cancel the A380, so why people keep expecting/hoping for it is beyond me. Okay, they may never make any money off it, but they at least keep whittling down the amount of money they lost.>>>

  I dont think anyone said that it would be canceled

  Also the amount Airbus “loses” is questionable too.

  >>>QF which doesn’t have anything smaller then the 744 when it comes to long-haul intercontinental services in the current environment.>>>

  Qantas is both too proud and stupid to admit that it screwed up by not having 777’s - even as recently as December 2008 when they rejected it. QantASS’ other big screw up was it went for A330s - I dont think we need any major history lessons on how that dog operates so “well” for them

• 9. keesje  |  April 16th, 2009 at 00:20

  

  All this suggest some people on here got slightly frustrated. And probably not because of what is happening at Airbus..

  Talking on breakeven point, lets avoid the 787 shall we. 800?

  747-8 ROI ? 737 marketshare, 777-200ER/LR backlog? 767 future ? Reality sucks..

  A330 a dog ? 500 Sold since 787 launch. You can’t find used ones.. The A330 is the reason Boeing rushed the Dreamliner.

• 10. Dougloid  |  April 16th, 2009 at 02:33

  

  Interesting topic Saj….you have a knack for thinking the unthinkable.
  I’m in mind of something one of the Boeing execs said back in the last aerospace implosion-remember the one in the early nineties? Oh. You guys were still in diaperz. Anyway-where was I? Oh yes. He said more or less” A firm contract is all very well but when your customer calls you up and says ‘I can’t make my payments’ all of a sudden a firm contract doesn’t mean very much anymore.”

  The point is, you can’t get blood out of a turnip and you can’t force people to take airplanes they can’t or won’t pay for, unless it is at a ruinous discount. What it boils down to is who’s going to end up taking it in the shorts. All of a sudden the airplanes are turning into white elephants because each of them represents a huge chunk of money that Airbus has got to recover in a down market.

  Everyone in the EU who pays taxes, let me remind you of an old aerospace acronym heard around McDonnell Douglas: B.O.H.I.C.A.

  Bend over, here it comes again.

• 11. Falcon  |  April 16th, 2009 at 03:15

  

  Hey Dougy (pun intended)

  After lambasting Airbus and Bloomberg for not getting facts right shouldn’t we expect you to get the number of 747’s delivered in its first 18 months right.

  Not that it is an important number. If it was we should be worried about the 777 since only 37 were delivered in the first 18 months.

  Maybe you can explain how that number is important without considering the number of planes that were supposed to be delivered and the reason why they were not delivered. Same goes for no A380 deliveries yet this year.

  Then we have the usual suspects who show their bias / foolishness by claiming a programs breakeven point has anything to do with said programs continuation. Do yourself and everyone else a favor and learn that the only thing that counts is the future so forget how much was spent before. If continuing provides positive cash flow then continuing is the right decision.

  Sometimes a loss may be compensated by tactical reasons but that is the next lesson. Just remember that looking forward is why it is right for Boeing to continue pursuing the 767 tanker even though the Italian, Japanese and even work done for the US versions have been nothing but money pits so far.

• 12. boeing investor  |  April 16th, 2009 at 04:53

  

  Good ole Keesje entertains once more:

  “Talking on breakeven point, lets avoid the 787 shall we. 800?”

  Count the orders/options/purchase rights together - they equate to more than Airbus has even develiered. Big deal, B/E could be 1000 and the 787 will still make money.

  “747-8 ROI ?”

  Paid up program, marginal $1bn charge already factored in.

  ” 737 marketshare,”

  2200 on backlog AND?

  ” 777-200ER/LR backlog?”

  How many have been delivered you fool yet you go on about the backlog? The 777 is no A340!

  ” 767 future ? Reality sucks..”

  See above re deliveries.

  A330 a dog ? 500 Sold since 787 launch. You can’t find used ones.. The A330 is the reason Boeing rushed the Dreamliner.

  Rushed? Hardly - you’ll find that it was the XWB that had lots of restarts - Boeing sold over 500 777’s since the 787 launched, so whats your point on the old A330?

• 13. Mike M  |  April 16th, 2009 at 06:44

  

  >>>If continuing provides positive cash flow then continuing is the right decision.

  Lots of “if’s” Falcon:

  I hazard a guess that there isnt a single analyst out there today in Europe or the US who would happily assert that the A380 is providing positive cash flow, particularly as most money for an airplane is received on delivery.

  You just seem annoyed at McVities accuracy while masking your own views with “if’s” and a host of other bias towards the reality of the marketplace today. No wonder you categorically failed to address even once the slew of A380 deferrals…oh but its cash positive right?

  Whatever dude, whatever.

• 14. anon  |  April 16th, 2009 at 08:31

  

  The following page shows Boeing’s backlog breakdown by model.

  http://active.boeing.com/commercial/orders/index.cfm?content=displaystandardreport.cfm&pageid=m25066&optReportType=UnfAnnModel&RequestTimeout=20000

• 15. Ed  |  April 16th, 2009 at 09:21

  

  Never seen such bias. Well guys, stay amongst yourselves and wait until your dreamliner becomes a nightmare…It will be interesting to read you again, then…

• 16. coolis  |  April 16th, 2009 at 10:58

  

  This is quite an interesting discussion and it’s quite strange to see such different views between Boeing and Airbus.
  Boeing has bet on the 787 Dreamliner and the backlog of the 787 is quite impressive.
  Airbus has bet on the A380 and also, on the view of the 787 success, bet now on the A350 XWB.
  Whatever people think about the Airbus A380, Airbus definitely needed to build this airplane to have a complete family of airplane. Whatever the issues, it makes sense to have a complete family because Boeing was always coming with its 747 and Airbus was unable to compete. Now, that’s done and it makes sense.
  The next challenge is the 787 and the A350. And the A350 is in a better situation as the delivery of 2013 will be a good start for the airline recovery.
  Just my 2 cents

• 17. skeptic  |  April 16th, 2009 at 15:10

  

  To all the posters decrying “bias”, keep in mind that the nature of editorial pieces is O-P-I-N-I-O-N. There is no obligation to be “unbiased”. One is trying to get one’s opinion across. Its OK, really.

  If one feels differently about the A380, or the 787 for that matter, state your case.

  Personally, I agree with the people who say this thing (i.e., the A380) was launched on shaky ground. It works if you can fill up the front of the plane with people paying obscene amounts of money for the privilege of non-stop eating and imbibing and parking their overly large frames in a larger seat. If the airline can’t do that, then an A380 becomes a difficult conversation topic at the next shareholders meeting.

  But that’s my OPINION. And its OK, really. Even if I’m wrong, its only an OPINION.

• 18. Dougloid  |  April 16th, 2009 at 15:22

  

  Hey Farkin (pun intended), what do you not understand about what I posted? What does any of it have to do with Boeing and why should I bother with that-to satisfy your need for what you see as some kind of even handedness?

  There, there, little fella. I’m not Boeing’s friend-you gotta remember they did me out of a job. Does that make you feel better?

  You say: Do yourself and everyone else a favor and learn that the only thing that counts is the future so forget how much was spent before. If continuing provides positive cash flow then continuing is the right decision.

  What do you not understand about the cost of debt service? A running cash flow doesn’t mean you’ve got a profitable enterprise, just that you’re not losing money as fast as you otherwise might.

  You also say Sometimes a loss may be compensated by tactical reasons but that is the next lesson.

  What lesson is that, what loss are you talking about, and how much money are you willing to lose?

  Elementary capitalism: Businesses are in business to make money. If they don’t make money, they go down the toilet. Try justifying your position at the next stockholder’s meeting.

• 19. Michael Di Marco PE  |  April 16th, 2009 at 16:26

  

  What widebody family?

  1. 200 – 300 passengers market

  To address the demised of B767 vs. A330, the B787 was born. I am truly amazed by the amount of ink that has been spilled regarding the A330-200HGW ability to compete against the 1st 20 out of spec B787 and nothing regarding its demises vs. in spec 21st on. Essentially, Boeing booted Airbus out of this market.

  2. 300 – 400 passengers market

  With the advent of the B777NG, this is Boeing territory. Since Airbus can’t complete in the 200 – 300 passengers market and disparately needs to reestablish its present here, the A350XWB was born. Disregard all its market hyper, it must be acknowledged that Airbus has still refuses to publish its OEW. This refusal gives creditability to FleetBuzz Editorials assertion that it is grossly overweight.

  3. 300 – 400 passengers market

  This is Boeing territory. The B747-8 maintains this.

  4. 500 – up passengers market

  This is Airbus territory. Once they had a market campaign, 1 to 1 B747 replacement. It didn’t last long. We all know its true replacement, 300ER.

  The market realities have demonstrated its inflexibility to adapt to changing conditions.

  Their widebody family is essentially none existing.

• 20. ikkeman  |  April 16th, 2009 at 16:43

  

  dougloid:
  that what got us into this mess. stockholder meeting dictating company policy. The business of enterprise is not to make money - it’s continued existence.
  That’s one side of what the A380 is about. Airbus felt they needed something to offer at the top of the seats market, apparently they’re paying quite a few billions for that desire. Though it’s (so far) a financial loss, it may still have been the right choice.

  I cannot see how an airplane that’s competative when only filled to 65% capacity (555/853) does not have a place in the aviation business.
  About production runs, The 747 delivered a mean of 27 a/c a year.

  Both Boeing an Airbus are getting deferrals and cancellations. Last time I checked Boeing was actually into negative orders (may have changed since) - would you claim it should exit the commercial aviation market if it’s still true. It cannot make good financial business sence to stay in a market without demand.

• 21. Mike M  |  April 16th, 2009 at 17:18

  

  >>>I cannot see how an airplane that’s competative when only filled to 65% capacity (555/853) does not have a place in the aviation business.>>>

  That assumes that yields for First/Business actually make any money in the first place. Just look at poster #17’s point about wasting obscene amounts of money to cut your steak with metal cutlery instead of plastic utensils.

  If big old Emirates cant make the A380 work on runs to NYC, then that speaks volumes - not just for yields it has lost, but the fact that cramming in hundreds of steerage passengers doesnt cut the mustard either.

• 22. Vero Venia  |  April 16th, 2009 at 17:54

  

  There is obviously a huge overcapacity out there. Deliveries are only for replacement. Airlines don’t need extra aircraft.
  Deliveries are under pressure in 2009 and 2010. This statement is valid for both Boeing and Airbus.

  Want to know how much Boeing and Airbus need to cut deliveries? Do some simple math!
  http://verovenia.wordpress.com/2009/02/16/simple-math/

• 23. B380  |  April 16th, 2009 at 18:23

  

  “If big old Emirates cant make the A380 work on runs to NYC, then that speaks volumes”

  What speaks volumes is the fact that they redeployed the aircraft where load factors are stronger, which indicates good fleet management. Secondly, where A380 is strongest is when during the hard times the airline reduces capacity through the reduction of frequencies for a given demand. This will allow to reduce costs. If EK wants to maintain frequencies on DBX-JFK route, then any village idiot will understand that a smaller plane is required. Everybody seems to judge the plane during the biggest slump in traffic, advertising one solution for all problems - 777. When the traffic will pick up, then the A380 will shine, especially in terms of CASM.

  Just for the information, the first A380 will be delivered on the 24th of April with the majority of deliveries coming in the last 3 months of the year. Ramp up will follow in 2010.

• 24. Dougloid  |  April 16th, 2009 at 18:36

  

  My apologies to Falcon-he may have been speaking to Doug McVitie. If that’s the case, he gets a mea culpa-a small one, mind you, and no retraction of my comments on his comments.

  Ikkeman, you say the following:

  The business of enterprise is not to make money - it’s continued existence.
  That’s one side of what the A380 is about. Airbus felt they needed something to offer at the top of the seats market, apparently they’re paying quite a few billions for that desire. Though it’s (so far) a financial loss, it may still have been the right choice.

  Take another hit off the crack pipe fella and calm down.

  Do you run a business? Probably not. Do I run a business? Yes-two of them as a matter of fact.

  I can tell you with absolute certainty that the fellows who overlook the small matter of making money-which you seem to dismiss as a mere bagatelle-are the same fellows who are in bankruptcy court because they used their personal assets to keep a failing business alive.

  Making money is the single most accurate index of a business’ worth and prospects for survival that there ever has been. If it doesn’t make money, what’s the point? To provide jobs for a bunch of featherbedding louts?

  OK, then, it’s a jobs program bankrolled by the taxpayers.

  If it’s that, what business does it have trying to compete in an allegedly open market? See, because a real business has to produce goods and make a profit.

  I mean, maybe you’re on to something, that this particular emperor doesn’t have any clothes. You might ring up the WTO and let them know about it.

• 25. Mike M  |  April 16th, 2009 at 18:37

  

  >>>When the traffic will pick up, then the A380 will shine, especially in terms of CASM.

  Of course, this completely misses the point -Yields. What good is CASM when 800 people return no profit?

  But of course, as Aurora mentions above, who needs a business case for this airplane?

  

• 26. B380  |  April 16th, 2009 at 18:48

  

  “What good is CASM when 800 people return no profit?”

  Depends what the airlines will charge for the ticket.

• 27. Mike M  |  April 16th, 2009 at 19:19

  

  >>>Depends what the airlines will charge for the ticket.

  And as we have seen in this year alone, First/Business class travel is collapsing everywhere - no one can afford to be premium price leader when those at the back of an airplane arrive at exactly the same time as those at the front having paid substantially less for their ride.

  “Depends what the airlines will charge for the ticket” is a classic answer which fails to account for the fact that it just doesnt work when you have more seats to fill on a bigger airplane - thats why the “order boom” of the past few years has seen an explosive growth in twin engined airplanes and not quadjets.

  Even the village idiot knows that the A380 is the most inflexible and costliest airplane in the skies - not only to procure, but to operate and make profitable on any route network - go ask Emirates (an airline that has produced profits every year bar 1 since its inception).

• 28. skeptic  |  April 16th, 2009 at 19:39

  

  Mike M, if Mr. Wheeldon is correct and EADS has been dumping these A380 things at 50% discounts, then it probably is not the costliest aircraft in the skies. If you are referring to its operating costs, costs of ownership, then you might be right.

• 29. keesje  |  April 16th, 2009 at 19:55

  

  I agree with Boeing that about 1000 VLAs will be sold in the next 20 yrs. Maybe another 500 in the ten yrs after. Stretches, new engines, cabins, systems etc. as normal.

  The airlines and passengers love it, it obscured the 747-8i and performs better then promised.

  And that just doesn’t sit well in some parts of the world..

  http://www.boeing.com/commercial/cmo/images/2008/lg/lrg_demand_bysize.gif

  Get over it.

• 30. ikkeman  |  April 16th, 2009 at 20:48

  

  Dougloid, I think we basically agree. Ofcourse a company needs to turn a profit. But it’s those businesses that only looked at the quick buck, setting up sub-prime mortgages just to make a buck selling them, not interested in the long term effect that’re actually in chapter 11… To bad it’s not just them.
  However, every business has some poject/programs or divisions that do not make money but are required nontheless. Ever made money on you HRM department (or is yours an temp agency?)

  I think we couldn’t speak of an aviation duopoly if Airbus didn’t have something to compete with the 74. Don’t kid yourself - the A380 maybe to big to act as an 1 on 1 replacement for the Jumbo, but without the 38 those orders would be filled by the 74.

• 31. Vero Venia  |  April 16th, 2009 at 21:16

  

  keesje,

  I hate crystal balls. Even Boeing does not know the future.

  The first 747-400 was delivered twenty years ago (in 1989). The last passenger 747-400 was delivered in 2005. There have been only about 450 747-400 delivered during those years.

  The reality is that twin engined aircraft are more and more capable. Today, twins fly most long range routes http://www.boeing.com/commercial/aeromagazine/articles/qtr_2_07/article_02_6.html

  Quads (be it A380 or 747-8) will have less and less role.
  First, because twins, like the 777-300ER, A350-1000XWB, 787, are getting better and can do most routes with better CASM.
  Second, because airlines business model and the regulatory environment change (air transport liberalisation, airport privatisation).

• 32. keesje  |  April 16th, 2009 at 21:32

  

  Vero, during the last 20 yrs air traffic trippled.

  In the next 20 those 450 747-400 must be replaced & 80% of long haul travel is between hubs. Slots get restricted, fuel gets sparse and probably there won’t be many twins above 350 seats. A380s will do 450-700 seats (some less some more).

  Like Boeing, GE, Airbus and RR I feel confident the A380 will do well. No competition is good for margins.

  (forget the 50% discounts non-sense some dream up in their desperate attempts to dismiss the A380).

• 33. Vero Venia  |  April 16th, 2009 at 21:59

  

  Maybe the traffic tripled during the last 20 years, but things have also changed since 747-400’s EIS. Have you heard about the fall of Berlin wall? Have you heard about airline privatisation during the last twenty ears? Have you ever heard about air transport liberalisation? Have you heard about airport privatisation? Have you heard about the new ETOPS rules?

  You need to understand today environment if you want to see why 747-8 and A380 won’t sell in a large number. Many airlines already replaced their 747 by 777. Many airlines replaced their 747-400 by 777-300ER, e.g Air France. You don’t need to replace the 747-400 by a bigger quad.

  The only reason why big and very big aircraft can be interesting is for airports where slots are not available anymore. But, there are changes on airports’ side as well. More and more airports are available around big cities thanks to privatisation. How many airports are really slot constrained? There are very few of them!

  When the A350-1000XWB will enter into service, it will have better CASM than both A380 and 747-8i.
  Airlines have to start to compare A380 and 747-8i case against the A350-1000XWB. The result is surprising!

  Don’t expect to see a bright future for either the A380 or the 747-8i. Neither of these will be a big seller.

  http://verovenia.wordpress.com

• 34. boeing investor  |  April 16th, 2009 at 22:16

  

  “In the next 20 those 450 747-400 must be replaced & 80% of long haul travel is between hubs. ”

  Perhaps you missed the 777-300ER orders?

  And 80% of long haul travel is not between hubs at all. Nice way to justify a non-existent market for the A380.

  “You don’t need to replace the 747-400 by a bigger quad.”

  This is a concept hard to grasp by keesje and other Airbusiers.

  “forget the 50% discounts non-sense some dream up in their desperate attempts to dismiss the A380″

  Oh yeah thats right - the discounts were closer to 65% for Emirates and British Aiways - but of course, Keesje charms us with his repeated failure to acknowledge that he has zero insider info on these and other loss-busting deals Airbus went through to get its delinquent quad jet to get some sales. But then, Airbus has never had much luck with its quads - look at the sorry ass tale the A340 has to tell, the A380 is upon that same path.

  As already said by others and warmly ignored by keesje is that passengers today want to get from A-B without paying top-dollar for it. Thats why high class fares/first class traffic have nosedived - and why A380 customers keep on deferring the fat blob because there is zero sight of first class traffic recovering for 5 or more years to pre-2008 levels. And even then there is no guarantee that airlines will be making as much money off First class in 2014 as they made in 2006/7.

  But of course, those with the Airbus bias blinkers on like keejse will dismiss these facts out of hand, even when IATA confirms the woes of the industry.

  Keep smoking it keesje, your jester entertainment is unrivaled.

• 35. B380  |  April 16th, 2009 at 22:24

  

  Mike M,
  “First/Business class travel is collapsing” - the 800 seater version will not be configured with 1st and business. Hence when the traffic will indeed pick up (both A and B predict that) then depending on what the airline charges, the yields will be there. Air Austral is one of the airlines attracted by that.

  The typical A380 boo boys will only be happy when the A380 is cancelled with massive losses. It is very easy to criticise an aircraft during the most difficult period and only 18 month into service. Just wait till the 787 is in service and we will see if Dougie will be falling over himself to give an interview criticising Boeing. Lets have this debate in 20 years time when both -900 and the A380F will be in service….

  …but then again could one have a conversation with somebody coming up with this:
  “Singapore quietly sucks ass knowing its 65% discount on the fat pig was worth it” — Only in your wet dreams dear boy.

• 36. keesje  |  April 16th, 2009 at 22:29

  

  “Many airlines replaced their 747-400 by 777-300ER, e.g Air France. ”

  A wide spread mis interpretation IMO. Fact is there was no VLA replacement in existence for airlines retiring 747s until recently. Might that have played a role?

  Some here also assume CASM is more important then capasity. Surprising as airlines networks and organisations are build around markets and passenger streams..

  Bigger aircrafft offer lower CASM (imagine a A380-900 with enhanced A350 XWB engines).

  The slots restrained hubs are the ones that dominate long haul travel.. airlines are merging, new hubs created. Liberization, deregulation? Don’t those help VLA’s?

  http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/img/hubspokederegulation.gif

• 37. Mike M  |  April 16th, 2009 at 22:31

  

  >>>then depending on what the airline charges, the yields will be there>>>

  Yields on what? A $5 ticket? Maybe $76? You’re clutching at straws in the vain hope cheap tickets with 800 passengers actually “makes” money.

  >>>Only in your wet dreams dear boy.

  Typical response from someone that has no real industry connections either with airline or airframe maker.

• 38. Mike M  |  April 16th, 2009 at 22:33

  

  >>>Bigger aircrafft offer lower CASM

  …and do nothing for yields. While Airbus has no ambition of making a profit, airlines DO.

  Thats why the A380 and 787 and a slew of other airplanes are being pushed back as traffic declines.

• 39. Vero Venia  |  April 16th, 2009 at 22:49

  

  keesje,

  For once I agree with you VLA is not a in a replacement market. It creates its own market. It has to prove that the market exists.
  As far as I know, that market is not growing fast since 2000. Neither the A380 nor the 747 -8i changes my opinion until now.

  I would be willing to admit that I am wrong if the A380 can reach 400 orders in 2012 (twelve years after its launch) or if the 747-8i can reach 300 orders in 2016 (ten years after launch).

  Let’s set a rendez-vous in 2012 here at Fleetbuzz Editorial. Until then I stick to my opinion.

• 40. B380  |  April 16th, 2009 at 22:51

  

  “Typical response from someone that has no real industry connections either with airline or airframe maker.”

  1. You shouldn’t be so quick as to judge my connections.
  2. It had be reported several years ago that Airbus got $198m for the first one they handed over. That includes the launch discount. Hardly what you claim is it?

• 41. Aurora  |  April 16th, 2009 at 22:53

  

  B380, “lets have this debate in 20 years time”.

  We have just passed through the greatest orders binge in the history of commercial aviation. The A380 sold less than 200 during that time. Its been on sale for almost 10 years. There have also been 20 cancellations and ILFC will be able to cancel theirs come Jan ‘10. How many of these aircraft have actually been placed by any lessor? Do you think the premium pax market is coming back to what it was? 800 pax in a whalejet may make for great publicity, but what about yields?

  So why do we need another 20 years?

• 42. Vero Venia  |  April 16th, 2009 at 23:00

  

  Sorry keesje, I misunderstood your comment. But my last comment remains valid.

  The slots restrained hubs are the ones that dominate long haul travel.. airlines are merging, new hubs created. Liberization, deregulation? Don’t those help VLA’s?

  The answer is a blunt “no”.

• 43. Ed  |  April 16th, 2009 at 23:42

  

  keesje said in reply #29;

  “I agree with Boeing that about 1000 VLAs will be sold in the next 20 yrs. Maybe another 500 in the ten yrs after. Stretches, new engines, cabins, systems etc. as normal.

  The airlines and passengers love it, it obscured the 747-8i and performs better then promised.”

  keesje, the market for the VLAs is mostly for the B-747-8F and A-380-800F. Opps, I’m sorry, there is no A-380-800F, that program failed (as have the A-340-500/-600). I guess EADS factors in a given failure rate?

  Ed said in reply #15;

  “Never seen such bias. Well guys, stay amongst yourselves and wait until your dreamliner becomes a nightmare…It will be interesting to read you again, then…”

  First, that was not me, all of you know me as a Boeing supporter.

  But, “Ed”, Boeing has not had a failed airliner or military airplane ever. Yes, the B-377 program was saved by the USAF KC-97, so that program did not fail. The B-367-80 lead to the very successful KC-135 and B-707 programs, the B-717-200 more than broke even with about 150 airplanes sold. The B-727, B-737(most successful airliner of all time), B-747 (still in production, more than 1500 sold), B-757, B-767, B-777, and B-787 programs are all going well. All of the B-700 series airplanes, except the B-717-200 sold well over 1000 airplane each. Boeing’s only model that has not sold well is the B-737-600, but that model is over shadowed by its other B-737NG sisters.

  The B-787 Dreamliner is a huge success, selling over 800 airplanes before the first flight. There will be thousands of more B-787s sold.

• 44. B380  |  April 17th, 2009 at 07:43

  

  Aurora,
  In that same period you forgot to mention Airbus had severe production difficulties, which threatened the whole program, pushing deliveries far to the right. Hence the cancellations by UPS and FEDEX. This turned out to be a blessing of a kind for Airbus that they could drop the F version for now. I have no doubt there will be plenty of orders and deliveries in the future. As for ILFC, they have bigger problems to think about, like company survival and if they have to cancel orders or sell existing planes, then they will do that.

• 45. keesje  |  April 17th, 2009 at 09:26

  

  vero, during the last decade air traffic grew with 4-5% per yr.

  So in 5 yrs (e.g. 2002-2007) nearly 35%, ~ the capasity difference between a 747 and a A380..

  There is little to prove the markets exist IMO. The A380 are ordered, long term growth is likely to continue.

  So if you are ordering a 747 replacement for the next 20-25 yrs.. One of the reasons all bought the A380 iso the 747-8i.

  Lets not put 747-8i and A380 in the same category. One is the first of a new series, the other the last. One is in operation the other unlikely to ever be produced.

• 46. Vero Venia  |  April 17th, 2009 at 11:22

  

  keesje,

  Let’s say it differently such that you can understand.

  Nobody says that the market for VLA does not exist at all. It does, but it is quite small. I once wrote this message at Randy’s blog http://boeingblogs.com/randy/archives/2009/02/first_flight_40.html#comment-49640
  As I mentioned in that comment, many airlines bought the 747 for its range and not for its capacity.

  New air transport agreements between countries (also known as “openskies”) are quite recent. It may need many years before airlines modify their fleet and operations to adapt to this new environment. But a new trend is set. This new trend is not in favor to VLA.

  Please look at 777-300ER and A350-1000XWB orders. 777-300ER amassed about 400 orders since the go-ahead in 2000 without any launch customer. ( http://www.flightglobal.com/pdfarchive/view/2000/2000%20-%200635.html )
  The A350-1000XWB has today 75 orders, six years before its EIS. So yes, the trend is set. We are witnessing the evolution. The interesting thing is that both the 777-300ER and the A380 were launched in 2000.

  Air traffic grew by 4%-5% annually in the last decade. Okay, I agree. But, the “topology” of air transport is changing. You have changing rules and you have new efficient aircraft. For example US-EU open sky agreement entered into effect only in March 2008. The new ETOPS rules entered into effect only in 2007. Things are moving. It needs time to see the full impact of these changes. Traffic will continue to grow in the next decade (about 3% to 4% annual growth). But the way this growth is obtained is not necessarily by VLA. VLA may play a role but a very minor one.

  Don’t expect a bright future for the 747-8i or the A380.

• 47. Mike M  |  April 17th, 2009 at 11:38

  

  >>>2. It had be reported several years ago that Airbus got $198m for the first one they handed over.

  Considering its only been around 18mths since the first A380 was delivered, either your “several years ago” bit is wrong or the $198m on handover is wrong.

• 48. boeing investor  |  April 17th, 2009 at 14:17

  

  The A380 are ordered, long term growth is likely to continue.

  ————

  Ha!

  As Aurora said, the biggest boom years in nearly 50 years have elapsed - the A380 had NO competition in ANY form for nearly 10 years and still barely scraped 200 orders while the 747-8 snared half that total in a third of the elapsed time.

  “One is in operation the other unlikely to ever be produced.”

  Whatever you say fool:

  http://www.fleetbuzzeditorial.com/2009/02/03/boeing747/

  Even your beloved Lufthansa remains commited to it and hasnt jack shit about canceling.

  Keep digging Keesje…

• 49. Dougloid  |  April 17th, 2009 at 15:34

  

  You say:

  “Ofcourse a company needs to turn a profit. But it’s those businesses that only looked at the quick buck, setting up sub-prime mortgages just to make a buck selling them, not interested in the long term effect that’re actually in chapter 11… To bad it’s not just them.
  However, every business has some poject/programs or divisions that do not make money but are required nontheless. Ever made money on you HRM department (or is yours an temp agency?)”

  Your analogy is not apt.

  The business of building airplanes is not the business of buying and selling mortgages. That’s a shell game in which your institutions fed as greedily at the trough as any other group of pigs-now ruing the excess and blaming it all on the Americans like a bunch of hungover drunks: “Ooooooooh, they led me astray, honey, that’s why I blew the rent money on booze.”

  We’re talking about manufacturing a product here that you can put your hands on and actually use it to make money.

  Businesses do have departments that are not income producers, but those are what are known as operating expenses. This would be the first time I ever heard of the entire reason for a 20 billion dollar project being classified as an operating expense like the employment office or the groundskeepers.

  I’m a sole proprietor of two small businesses. One is professional services and the other is retail. You simply cannot lose money on everything you produce without a payday somewhere along the line.

  I worked for Delavan a/k/a Goodrich for about a year. They build fuel system components for Rolls turbofan engines. They sell fuel nozzles for the RB211, and they lost money on every one of them-about $1,000 each to be precise. There were reasons for doing it, however, one being getting a- market position on large turbofan engines-which they did not have at the time and the JT3C&D were a dying market-and the other was developing a captive market for repair and overhaul. Certain parts for fuel nozzles (piece parts as they’re called) were not sold to anyone, much less a competitor in the fuel nozzle overhaul trade like DERCO.

  So….knowing that they were losing money on fuel nozzle assemblies but making it back over the long term was a strategy. I do not see that with the a380.

• 50. Vero Venia  |  April 17th, 2009 at 15:36

  

  boeing investor,

  You are right, the A380 has NO competition in ANY form and has “only” 200 orders. The 747-8F has NO competition of ANY form and yet it has “only” 78 orders. The 747-8i has NO competition of ANY form and yet it has “only” 28 orders.

  Now, everybody understands that very big aircraft market is relatively small.

• 51. B380  |  April 17th, 2009 at 16:00

  

  Mike M,
  “Considering its only been around 18mths since the first A380 was delivered, either your “several years ago” bit is wrong or the $198m on handover is wrong.”

  Indeed, slip of the keyboard…

  http://www.flightglobal.com/articles/2008/01/10/220734/airbus-sells-sia-a380s-for-198.6-million.html

• 52. Mike M  |  April 17th, 2009 at 16:23

  

  B380 -

  Those jets were sold to a third party lessor, NOT Singapore Airlines.

  Thank you for demonstrating that you no nada about what SQ actually paid on delivery for its A380’s.

• 53. B380  |  April 17th, 2009 at 16:44

  

  Airbus was paid for the planes, which SIA are leasing. It is a common business these days. However I would like to see demonstration of the 65% discounts you had been stating.

• 54. MPTA 098  |  April 17th, 2009 at 17:00

  

  Why are (i) businesses that are building transportation vehicles and (ii) businesses that are running transportation networks continously seeking economies of scale either in vehicle/vessel production or transporting goods and passengers? Well, for a starter, quite a few bloggers don’t seem to have much insight into this.

  For example, one could take a look at how the 66,343-ton S/S Norway’s (previously S/S France) passenger capacity and amenities revolutionized the cruise industry in 1980 and started a building frenzy as competitors began to order bigger and larger ships. Later this year, the 220,000-ton, 5,400-passsenger Oasis of the Seas will be delivered and is some 40 percent bigger than the present record holder, the three RCCL Freedom Class vessels.

  In the airliner production business, the OEMs will achieve higher margins when they’re constructing bigger planes partly because the weight of the avionics and flight control systems etc, do not increase linearly with increasing empty weight of an airplane. It’s therefore not surprising that when A380 production matures, the production cost of one A380 comfortably will be below USD 100 million (April 2009 value).

  In the airliner business, there are several ways to achieve economies of scale (bigger planes and large fleets etc). As for the A388, one should note that for the first three operators, the number of premium seats are rougly the same as what’s been typical for the 744. However, one should note that these new state-of-the-art premium seats require more onboard space. In the three class configuration, the A380 now offers at least 100 more economy seats than a typical 744 while carrying roughly the same number of premium seats, all in an aircraft that’s essentially similar in nature to the double shrink A318 model. In the future, further improved, stretched and significantly more structural efficient 2nd generation A380s can provide for the same number of premium seats, and with even more space per passenger than what’s currently being offered on the A388, while carrying another 100-200 passengers in economy class.

  Thanks to economies of scale in production, there will only be an insignificant single digit cost increase for Airbus in producing these newer model A380s.

  Thanks to economies of scale in operation, airlines can operate the current A388, but much more the A380 NGs, on the key global trunk routes offering even better comfort in the premium classes (NGs)
  , while the CASK on flying the increased number of especially economy class passengers, are simply too advantageous to pass upon for airlines on these trunk route segments. The airlines operating the A380 NGs can therefore significantly undercut the competition (i.e. those not using the A380) on the price on economy class tickets, because this group of travellers usually don’t give a dam about frequencies and will nearly always pick the cheapest ticket.

  It’s not surprising that the A380 detractors are caught up in the present and seemingly only preoccupied with the short view. However, when taking the long view, one can usually say that when forecasting future technologies and trends, one has generally tended being too optimistic in the short term, but too pessimistic in the long term. Clearly, the airline industry currently finds itself in dire straits, but unless cities’ population growth and wealth creation will be stopped for the next half century or so, which of course is highly unlikely, there will be significant demand for A380s and other large VLAs in the future.

• 55. Mike M  |  April 17th, 2009 at 17:01

  

  http://www.flightglobal.com/articles/2005/04/01/196002/on-a-roll.html

  “The book price of the aircraft is from $272-292 million, although launch customers have gained substantial discounts.”

  For specifics, there is wide agreement between the best in the industry like Aboulafia, McVitie, Wallace, Udvar Hazy - all agree that discounts of 60%+ has been seen on A380 sales. You’ll appreciate that nailing a hard figure down to any airline deal is as obscure as moonpie (unless we evaluate the Easyjet A319 deal).

  There has been no public or private refutation by Airbus ever on its price for the A380 and also the mystery of break-even which moved from 250 to 420 and again in 2007 to a now “unknown” figure.

  Wheeldon may be right around 600 given that Falcon stupidly believes the A380’s currently sold actually generate “cash positive” revenue for Airbus.

• 56. Mike M  |  April 17th, 2009 at 17:12

  

  >>>It’s not surprising that the A380 detractors are caught up in the present and seemingly only preoccupied with the short view. However, when taking the long view, one can usually say that when forecasting future technologies and trends, one has generally tended being too optimistic in the short term, but too pessimistic in the long term.

  Perhaps you missed the fact that the A380 lost out to the 777, 787, A330 and A350 during the recent order boom?

  Give or take a few years including 9-11/SARS etc, that was a decade stretch in which just 200 orders were secured. How much more longer term view does the A380 need?

  Already Airbus and Boeing are investing in composite fuselages for their next generation widebodies - the A380 is old technology on the brink of expiry - in another 10 years, the A380 will be so outdated that even the eventual A320 and 737 replacements will be composite built too.

  This has nothing to do with “being caught up in the present” - the A380 has failed to impress the market for the last 15 years - both when in development and since it entered service. In a way, Boeing was smart to shelve the 747-500X and 747-600X. Yes the 747-8 has come at a price, but in dollar terms compared to the A380, its small change of $685m vs $25bn. Go figure.

  The A380 ultimately is an “answer” to a “question” that was seldom if ever asked.

• 57. MPTA 098  |  April 17th, 2009 at 18:32

  

  “Perhaps you missed the fact that the A380 lost out to the 777, 787, A330 and A350 during the recent order boom?”

  Ahh, that mythical “boom”, and now it’s bust, eh?

  Do note that the more this mantra is repeated, it doesn’t necessarily represent a rational interpretation of “what happened”. An A380 investment is/was based on thorough analysis by the airlines. However, in a new unproven VLA market, it’s only natural that you’ve got quite a few airlines sitting on the sidelines waiting to see how things turn out. Add significant production delays to the equation, and you should be able to figure out why the A380 was never a “participant” in this airliners.net driven “boom” -myth.

  “Give or take a few years including 9-11/SARS etc, that was a decade stretch in which just 200 orders were secured. How much more longer term view does the A380 need?”

  Look at a production run of 30 years, with 20 of those producing NGs.

  “Already Airbus and Boeing are investing in composite fuselages for their next generation widebodies - the A380 is old technology on the brink of expiry - in another 10 years, the A380 will be so outdated that even the eventual A320 and 737 replacements will be composite built too.”

  Actually, the promise of composites in fuselage production WILL NEVER BE FULLY REALIZED with a conventional tube and wing configuration. The 787 is at best, a FIRST GENERATION composite airliner. What you want is co-cured stringers/stiffening AND frames, something that is not possible doing on a convex shaped mandrel. Do note that on the A350, Airbus will produce the aft Section-19 using a method superior the one used on the 787 barrels; the INSIDE-WINDING/INSIDE “AUTOMATIC FIBRE PLACEMENT OF CFRP-fuselage barrels METHOD: Page 12
  http://www.scribd.com/doc/5440286/Herbeck-2008-05-07-Production-Technology-Center-Eng

  If Airbus and Boeing will stick to the conventional tube and wing configuration for their NB replacements, they will likely skip CFRP. Do note a NB spends much more time on ramps than a WB and is partly therefore susceptible to the dents and dings associated with “ramp rash”. Application of CFRP is therefore problematic while metallic technologies are not standing still.

  As for claiming that the A380 is “old technology on the brink of expiry - in another 10 years” just demonstrate how little technical insight you actually possess.

  “Yes the 747-8 has come at a price, but in dollar terms compared to the A380, its small change of $685m vs $25bn. Go figure.”

  Yeah, go figure where you geo those numbers from!

  (i)The USD 25 bn estimate is more than 50 percent wide off the mark.

  (ii)The USD 685m estimate is about 1/5 of the total R&D for the 747-8-I/F programme.

• 58. B380  |  April 17th, 2009 at 20:37

  

  Mike M,
  “The book price of the aircraft is from $272-292 million, although launch customers have gained substantial discounts.” — That says nothing other than there are discounts, which nobody is disputing. The $198.6m price paid supports that. I am however looking for the 65% range you had claimed.

  “best in the industry like Aboulafia, McVitie” — Oh Lord…
  “all agree that discounts of 60%+ has been seen on A380″ — please do provide a link.

  “You’ll appreciate that nailing a hard figure down to any airline deal is as obscure as moonpie (unless we evaluate the Easyjet A319 deal).” — I absolutely appreciate that but you had nailed a hard figure of 65%, so follow it with something. We could indeed discuss the EasyJet deal or discuss the Ryanair deal, CEO of which claimed he raped Boeing for…

  “There has been no public or private refutation by Airbus ever on its price for the A380 ” — As soon as Boeing starts providing details of their discounts offered particularly for 748I, then you can critisise Airbus.

  “…and also the mystery of break-even which moved from 250 to 420 and again in 2007″ — Has Boeing provided similar information on the 787?

• 59. Jacobin777  |  April 17th, 2009 at 23:53

  

  MPTA 098 …maybe Airbus will eventually be able to sell 500-600 of the Big Beast (I’m skeptical on it)..but one MUST take into “time decay” of money as well. Airbus has to pay interest on its loans (even if its lower than “market rates”). A delivered A380 is indeed “cash-flow positive”, but as Dougloid eloquently stated, it doesn’t make a difference (given the enormity of the debt burden the program is in).

  Apropos, Airbus stated a few years ago they were going to deliver 4/month (48/year)…how the numbers have changed dramatically to the downside the past few years.

  I’ll be surprised if they deliver even 30/year starting from 2010.

  Straight from Airbus:

  “The complete process for equipping the cabin of an A380 takes 20 days and production of 48 aircraft per year is planned. ”

  http://www.airbus.com/en/presscentre/pressreleases/pressreleases_items/10_jun_04_topping_out_ceremony.html

• 60. Vero Venia  |  April 18th, 2009 at 07:17

  

  If you want to know more about the amount of transaction (including commission) of SIA’s A380 and also other aircraft please check this link:
  http://www.doricassetfinance.com/en/matrix.html

  The list price of Airbus and Boeing products are in the following links:
  http://www.airbus.com/store/mm_repository/pdf/att00011726/media_object_file_ListPrices2008.pdf
  http://www.boeing.com/commercial/prices/index.html

• 61. Mike M  |  April 18th, 2009 at 07:22

  

  >>>>However, in a new unproven VLA market, it’s only natural that you’ve got quite a few airlines sitting on the sidelines waiting to see how things turn out.

  A decade on, they’re still waiting. Most have given up on the VLA arena (aside from freighters, 747-8F) and switched to 777, 787, A330, A350’s. As for your airliner.net theory- its stupid- airlines invest for the future. Nothing stopped them ordering swathes of A380’s- perhaps like the 787/A350- so they could take advantage of a new airplane.

  But that never happened and is even less likely to occur now- given that airlines know that passengers are price sensitive and not inelastic any more. Filling the front is not as easy as five years ago and the premium market shows zero signs of recovery- yields will never be profitable with 500+ economy seats regardless of supposed CASM “benefit”. Thats why the A380 is in a pit of its own dog-doo.

  >>>The USD 25 bn estimate is more than 50 percent wide off the mark.

  Check Bloomberg- it was reported there that those were indeed the latest avilable figures for the A380 in late 2007, running at around $25bn.

  http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aBepCIjeTirA

  “The double-decker A380 cost $18 billion to develop.”

  Factor in currency exchange, payments for delays and compensation and $25bn is as accurate as you’ll get it.

  More: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=anoqRFo3ol70

  “The A380’s calendar was set back three times. The plane’s development has cost at least 6 billion euros ($7.6 billion) more than the 12 billion euros originally projected”

  E6bn + E12bn = E18bn or around $22bn. Not exactly “wide off the mark” really.

  >>>The USD 685m estimate is about 1/5 of the total R&D for the 747-8-I/F programme.

  My bad on that - the $685m was the charge announced earlier this year. The cost of the program is a lot less than that which you denote too.

  B380-

  >>>please do provide a link.

  Google it.

  >>>>As soon as Boeing starts providing details of their discounts offered particularly for 748I, then you can critisise Airbus.

  AFAIK, Boeing doesnt have such a policy.

  >>>Has Boeing provided similar information on the 787? (B/even)

  See above. Although what is not in doubt is that the A380 will never break even while the 787 certainly will, even it its post-1000th airplane.

• 62. Vero Venia  |  April 18th, 2009 at 07:29

  

  There is a big trouble with “securitization” recently because lease rate of aircraft is declining. The reason is because there is an oversupply in the market.

  If you wish to know more about plunging lease rate you can read this link:
  http://verovenia.wordpress.com/2009/03/26/super-massive-black-hole/

  Please read this brochure about securitisation and SPC in Cayman islands:
  http://www.ogier.com/Publication%20Library/Securitisation_in_the_Cayman_Islands.pdf

• 63. B380  |  April 18th, 2009 at 16:11

  

  Mike M,
  “>>>please do provide a link.
  Google it.”
  – Right, so you don’t have it, I thought so. Pointing me in the direction of Aboulafia and McVitie for information about the A380 is like asking, the well respected, GWB about climate change.

  “AFAIK, Boeing doesnt have such a policy.” — Well neither does Airbus, so why would they comment on speculation?

  “Although what is not in doubt is that the A380 will never break even while the 787 certainly will, even it its post-1000th airplane.” — By definition, both remain to be seen.

• 64. Dougloid  |  April 18th, 2009 at 20:31

  

  “The complete process for equipping the cabin of an A380 takes 20 days and production of 48 aircraft per year is planned. ”

  http://www.airbus.com/en/presscentre/pressreleases/pressreleases_items/10_jun_04_topping_out_ceremony.html”

  Jacobin777, you never fail to produce the goods. As to equipping what is essentially a custom built interior in twenty days, I nearly fell out of my chair laughing, having seen what outfitting a green and fairly large airliner consists of. You simply don’t have enough room to get the bodies in there to get the work done in 20 days. First, you’ve got the problem of configuration control trying to figure out what goes where-and they will get it wrong. Then the sparkies have to come in, do what they’re going to do, check it out and sell the work package to QA. Next the guys who do the overhead-baggage bins, ceiling panels, sidewall panels, window reveals, etc-and sell it to QA. Then, you’ve got the guys who have to install and test the lavatories and galleys and sell the package to QA. Then you’ve got the guys who lay down carpet and install seating. When this is all done, you have a raft of functional tests you have to go through, some of which take a lot of time out from your 20 days, like pressurization and test of the environmentals.

  Then, if you’re lucky and nothing major goes wrong, you don’t have to rip everything out and fix what went wrong because somebody bypassed inspection.

  20 days? Bwaahhhahhhahhhah.

  Say-do they miss me at a.net?

• 65. Falcon  |  April 18th, 2009 at 22:04

  

  Dept Dougloid,

  No I was not referring to you. Don’t know you lambasted Airbus and Bloomberg nor that you stated a certain number of 747’s delivered in the first 18 months. On top of that I don’t even think your post was visual when I posted mine.

  I appreciate that you reached this conclusion by yourself and posted an apology. Very few people posting here are honorable enough to admit their mistakes, apology accepted.

  As to your remark about cost of debt service. This is the very point so many people get wrong, unfortunately you too. The cost is there if the program continues or not so it should not be considered when evaluating if they should continue to produce or not. Below is a very simplified formula to put numbers at it. Of course there are a lot more variables and the numbers are unlikely to be representative but the theory is correct.

  Assumptions
  Total spending on R&D, infrastructure and tools start – today: 20 BEUR

  Average manufacturing cost per plane up to 50 planes: 120 MEUR

  Average sales price per plane up to 50 planes: 100 MEUR

  Average manufacturing cost per plane > 50: 100 MEUR

  Average sales price per plane >50: 120 MEUR

  Scenario one
  Program scrapped today, no more planes produced.

  Total revenue: 13 * 100 = 1,300 MEUR (13 planes delivered)

  Manufacturing cost: 13 * 120 = 1,560 MEUR (ignoring WIP)

  Debt for other programs to cover: 20,000 + 1,560 – 1,300 = 20,260 MEUR

  Scenario two

  Program ends after 50 planes

  Total revenue: 50 * 100 = 5,000 MEUR

  Manufacturing cost: 50 * 120 = 6,000 MEUR

  Debt for other programs to cover: 20,000 + 6,000 – 5,000 MEUR = 21,000 MEUR

  Result over scenario one: 760 MEUR negative forward cash flow.

  Scenario three

  Program ends after 100 planes

  Total revenue: 50 * 100 + 50 * 120 = 11,000 MEUR

  Manufacturing cost: 50 * 120 + 50 * 100 = 11,000 MEUR

  Debt for other programs to cover: 20,000 + 11,000 – 11,000 MEUR = 20,000 MEUR

  Result over scenario one: 260 MEUR positive forward cash flow.

  Scenario four

  Program ends after 200 planes

  Total revenue: 50 * 100 + 150 * 120 = 23,000 MEUR

  Manufacturing cost: 50 * 120 +1 50 * 100 = 21,000 MEUR

  Debt for other programs to cover: 20,000 + 23,000 – 21,000 MEUR = 18,000 MEUR

  Result over scenario one: 2,250 MEUR positive forward cash flow.

  Based on this it is better to shut down the program now than continuing to 50 planes. Continuing to 100 planes provides a small positive forward cash flow but the risks probably makes shutting down now the better option. Continuing to 200 planes provides a significant enough positive forward cash flow that it is better to continue to that time.

  Mike M,
  I never stated “currently sold actually generate “cash positive” revenue”. That is your stupid failure to comprehend | non willingness to understand | write whatever suits you. Hope you’re as honorable as Dougloid.

• 66. Chaser  |  April 19th, 2009 at 03:43

  

  What everyone seem to be missing in this debate is that no one has cancelled the A380(excluding the F version which was for entirely different reasons).
  The same applies to the 748.
  Can only mean the business case for these aircraft is considered sound by the airlines involved despite all the “expert” opinion here and on other forums.
  The period of deferral I believe gives a good indication of just how long this downturn is predicted to last.

• 67. skeptic  |  April 19th, 2009 at 11:20

  

  Chaser: “Can only mean the business case for these aircraft is considered sound by the airlines involved….”

  …or their jobs are on the line or they are too arrogant to admit they ordered the wrong plane?

• 68. ikkeman  |  April 19th, 2009 at 12:32

  

  Hey Vero, That’s the Juice at least I was looking for.
  Doing a quick .xls based on that data gives me an averaged weighed discount for Bo aircraft of 34% vs 38% for the Ab’s.

  can we now stop the nonsence of claiming they don’t practice the excact same business?

• 69. Vero Venia  |  April 19th, 2009 at 13:01

  

  The only thing that matters in this long discussion is the market size of 400+ seater aircraft. We do not know yet if that market will grow or if it will remain between 3% to 4% (in value) or if it will shrink.

  At this stage (2009), anything we say about the A380 or the 747-8i is pure speculation or irrelevant or both.

• 70. Chris Wallace  |  April 19th, 2009 at 17:07

  

  Interesting numbers, Falcon.

  If you don’t mind, I’m going to lift the equations and keep them handy for those people who remain absolutely convinced that even with a total spend 10 times smaller combined with a higher sales price per frame and a lower manufacturing cost per frame, that the 747-8 program cannot possibly make any money with the current 100+ sales.

  You’ve presented a case that if the A380 can generate a positive forward cash flow with 100 sales, then the 747-8 is going to be a cash-generating machine of the ages for Boeing.

• 71. Mike M  |  April 19th, 2009 at 18:44

  

  Read what I first wrote Falcon (apologies for all my accusations at you after #13) however my reference still stands:

  “I hazard a guess that there isnt a single analyst out there today in Europe or the US who would happily assert that the A380 is providing positive cash flow, particularly as most money for an airplane is received on delivery.”

  This was directed at your comment of “If continuing provides positive cash flow then continuing is the right decision. ”

  Airbus will always continue the A380 no matter what it costs - just look at the funds being poured into the calamity that is the A400M as well.

  Continuing the A380 is not in question (least thats what this blog said up top) - whether it makes any tangible money is laughable given the huge discounts given at launch and continuing costs on the program thanks to the likes of Emirates/Qantas complaining means that forgetting “how much was spent before” is not an option when the spending of money goes on unabated.

  Whether you or any other kool-aid drinkers like it or not, the A380 will always be known for money spinning - into a chasm.

• 72. Falcon  |  April 19th, 2009 at 18:59

  

  Chris,

  Don’t mind at all. Anything that can make people understand that past investment should have no influence on if a program continues or not is great and I’m happy if this can help you.

  Don’t think I proved that anything will be cash generating for ages as manufacturing costs goes up dramatically with low production rates but I agree it makes as little sense to shut down the 748 line as it does the A380. If either receives a lot of cancellations and the production rates go below 12 or so a year then it is time to look at it but that is not where we are today.

• 73. Falcon  |  April 20th, 2009 at 03:39

  

  Mike M,

  That was a very poor apology and then you insult me by calling me a kool-aider because I suggest the continuation of the A380 program (and all other programs) should be based on said programs ability to generate positive cash flow going forward. Shame on you.

  On top of that your argumentation is all over the place and most of the time out of context.

  How about something to substantiate that the huge discounts are to blame for the program being in the negative when the to my knowledge the only related document leaked from Airbus showed that even the first SQ frame was sold at profit. (later events turned it into a loss, similar to what Boeing admitted about some 748’s)

  Also would be interesting to see some solid argumentation for your claim that all current and future frames will be individually be cash negative compared to not building them. That EK argument is not up to it as that is a cost they will have even if they don’t produce a single additional frame.

  Then I’d like to see your substantiation for how the A400 program proves Airbus will continue the A380 program no matter the cost. To my knowledge Airbus has said they can’t afford doing it by themselves thus unless the customers pony up more money Airbus rather takes the cost of shutting down the program. From the numbers I have seen mentioned Airbus doesn’t have the finances to be able to absorb the A400 additional costs so I think that threat is true and it runs completely counter what you stated.

• 74. Dougloid  |  April 20th, 2009 at 15:08

  

  Falcon, if I read your numbers correctly what you’re saying is that it’s going to get worse before it gets better, but that if Airbus stays the course and the market doesn’t deteriorate any further-i.e., cancellations, deferrals, defaults et cetera-that Airbus will ultimately come out ahead on the A380 program.

  Valley of the shadow of death and all that, what?

  It’s a sanguine view but it assumes a lot, and the biggest problem will be in convincing the stakeholders that that is actually what will happen.

  We’ve talked a lot about breakeven numbers in the past here and at a.net before I got booted off for taking a Hitler fanboy to task (long story there).

  When I worked for Douglas it was pretty much common knowledge that we’d have to make in excess of 400 MD11s before the program started returning real money to the stockholders. That was on an investment of about $7b usd for development.

  Boeing got to eat a lot of that investment when it bought Douglas and let it bleed to death on the slaughterhouse floor. Good on them.

  Imagine what would have happened if Airbus had acquired Douglas’ commercial operations when they had the chance….we’d have been building KC11s or KC330s and there would be no tanker controversy.

  Imagine-an entree into the domestic American market with a fully staffed production facility in the heart of a geographical area with the greatest collection of ground level aircraft production expertise that may have ever been assembled?

• 75. Michael Di Marco PE  |  April 20th, 2009 at 15:40

  

  I thank Saj for posting the tables so the table’s structures are not loss.

  Link

  MPTA 098 in his comment #57 stated,

  “Actually, the promise of composites in fuselage production WILL NEVER BE FULLY REALIZED with a conventional tube and wing configuration. The 787 is at best, a FIRST GENERATION composite airliner. What you want is co-cured stringers/stiffening AND frames, something that is not possible doing on a convex shaped mandrel. Do note that on the A350, Airbus will produce the aft Section-19 using a method superior the one used on the 787 barrels; the INSIDE-WINDING/INSIDE “AUTOMATIC FIBRE PLACEMENT OF CFRP-fuselage barrels METHOD: Page 12 “

  Superior really?

  Parameter: 787-8 787-9 350-800 350-900 350-1000
  Height B(in): 233 239
  Width A (in): 227 234
  Area (ft2): 288
  311

  Circ (ft): 60
  62

  Circ Construction 6 barrels w/ 7 circ attachments 3 barrels w/ 4 circ attachments
  Circ (fasteners-ft): 420
  248

  Longitudinal: None 4 Shells/b w/ 4 longitudinal attachments
  Lengths (ft): N/A Base - 7m
  = 154.3 – 23 = 131.3 Baseline:
  1st: 16 m
  2nd: 18 m
  3rd: 13 m
  = 47 m (154.3 ft) Base + 7 m
  = 154.3 + 23 = 177.3
  Longitudinal(ft): 0 131.3 154.3 177.3
  Longitudinal(fasteners-ft): 0 525
  617
  709

  Total fasteners-ft: 420
  773
  865
  957

  Ellipse (Oval) area = Π(A/2)(B/2)/144
  Ellipse (Oval) circumference is approximated by ≈ Π [3((A/2)+(B/2))-((3(A/2)+(B/2))*((A/2)+3(B/2)))1/2 ]/12

  1. Fasteners

  On average, the 350 has double the number. However, the majority is longitudinal. The consequence is that the fuselage is weakened. The result is that the 787 maintains a 6,000 ft climate control throughout its complete flight profile, whereas, the 350 can only maintain 6000 ft @ takeoff and landing and @ cruising it is at the less desirable 8000 ft.

  2. Windows

  Have you already forgotten JL gaffe regarding their sizes. Ours are bigger than yours?

  3. Size

  Why does the 350 need to have a larger cross section area by 8%?

  a. + 6 in height to match 787 requirements for Cargo + passenger + crown (OHCA)?
  b. + 7 in width. Why 7? It doesn’t allow 10 across. However, it allows for a little wider seat. The inference is that XWB really stands for Extra Wide Butts.

  I think the real reason is that the 4 shell concept based on a frame and plate arrangement doesn’t allow for a tighter H/W ratio.

  4. To bring the point home

  Parameters -800 (Diff) -9 (Diff) -900
  MTOW (#): 546700 -6700
  540000 50800
  590800
  MZFW (#): 382500 13500
  396000 27300
  423300
  Max Payload: 112500 24700
  137200 -4900
  132300
  OEW(#): 270000 -11200
  258800 32200
  291000
  Cargo (LD3): 28 8
  36 0
  36
  Floor Area (ft2): 2620 142
  2762 243
  3005
  Passengers: 270 10
  280 34
  314
  Range (nm): 8300 0
  8300 -200
  8100
  Notes: 1.0 OEW from WIDEBODYPHOTOG master_lh_mission_dataset.gif

  The 787-9 wins hands down against -800 and for good measure I included -900. Except for the body count it wins against the -900 to.

  The point of “Shoot the Dog”, actually, they used to shot horses. Dogs were euthanized by being put to sleep. Nevertheless, Airbus is in denial. With all good run businesses, the P&L, Balance sheets are judicially reviewed for the status of it health, income vs. expenses etc. For some unknown reason, we are 100% focused on expenses (CASM) and have been ignoring the income (RASM). The reality is that RASM is in a free fail. No CASM adjustments or manipulations (subsidies etc) are going to address this. Like the emperor‘s new cloths, the child is reality and he is shouting, “look RASM demises.”

• 76. Chris Wallace  |  April 20th, 2009 at 22:41

  

  But Dougloid, the stakeholders are the European governments themselves. The A380 is just like any other large infrastructure investment program. Heck, Airbus is, as well.

  These governments get their “return on investment” not through making a profit on the actual project, but through the long-term tax revenues the job, wealth and knowledge-creation those projects bring. Just as the A300 begat the A320, A330, A340, A380 and now A350XWB.

  The A320 might be the only program whose royalty payments exceeded the initial direct investment, but all the programs all generate income taxes, sales taxes, business taxes, property taxes, and a whole host of other taxes that all flow back into the government and not only re-pay the direct investments, but help fund everything else the State is expected to provide to it’s citizens.

• 77. Aotearoa  |  April 21st, 2009 at 14:00

  

  “These governments get their “return on investment” not through making a profit on the actual project, but through the long-term tax revenues the job, wealth and knowledge-creation those projects bring. Just as the A300 begat the A320, A330, A340, A380 and now A350XWB.”

  Well put Chris. Just highlights to me how it’s not an even playing field between Airbus and Boeing and explains how Airbus (and EADS) are so frivolous with monies entrusted to them. I’m glad I’m not an EU Taxpayer for sure.

• 78. MPTA-098  |  April 21st, 2009 at 15:11

  

  “As for your airliner.net theory- its stupid- airlines invest for the future. Nothing stopped them ordering swathes of A380’s- perhaps like the 787/A350- so they could take advantage of a new airplane.”

  Sadly, the “airliner-net-theory” is not a theory but fact. As for “stupid”, saying that the “the A380 is old technology on the brink of expiry” certainly qualifies as on of the least intelligent assertions that I’ve seen on this site.

  On debunking that silly and superficial “boom” theory, first one should note that the 787-8 is essentially a replacement for the 767-300 for which the replacement cycle is in full swing.

  2nd, that the A380 is PARTLY a replacement for the 747-400 for which the replacment cycle as of now has not yet reached crescendo.

  3rd, that the A380, as previously mentioned, will be inventing a NEW VLA MARKET. A full double-decker will only start to be a killer application at around 80m of length. Therefore, the current A388 is only a h’or deuvre for what is yet to come. The initial A388 seems to have served one of the purposes when the aircraft was launced and that was to end the 744 sales as well as any coming “advanced” 747 passenger carrying derivative. So, one should be able to conclude that the DOUBLE SHRINK structurally inefficent A388 forced Boeing to act irrationally, and waste some USD 3 billion on the structurally efficient STRETCHED 747-8I — and it still can’t compete — when a GEnX engine upgrade to 0.5 billion to the 744, would more than enough have done the job and secured triple digit 747F sales for at least another 10 years.

  4th, that the number of sales secured by Boeing during this latest “boom” is essentially meaningless. Partly courtesy of both a 24-36 month programme delay and the current bust cycle, many orders won’t be realized before a decade after the initial order was placed, which will become a new, but little “glamorous” record in the business. Look for fery few new 787 orders during the next half decade. It would have been cheaper for Boeing to have sold 787s at a quarter of the rate achieved during the yrs 2005-2008 and instead made the same number of sales from 2005-2015.

  5th, that no product has ever been so overhyped as the dreamliner. Many airlines joined the band wagon in the belief that the 787 truly would become a “dreamliner”. Sadly, Boeing’s solid reputation has been delivered a severe blow, now as many of the airlines have wakened up from a couple of years of zombie existence where they’ve discovered that the 787 is ONLY another evolutionary airplane.

  “But that never happened and is even less likely to occur now- given that airlines know that passengers are price sensitive and not inelastic any more. Filling the front is not as easy as five years ago and the premium market shows zero signs of recovery- yields will never be profitable with 500+ economy seats regardless of supposed CASM “benefit”. Thats why the A380 is in a pit of its own dog-doo.”

  Actually, ALL WB planes have that same problem. With the A380 one carries significantly more economy class passengers while retaining the number of premium seats, OR — since most A380s on order are yet to be delivered — the airlines can reconfigure with less premium seats and more in Y. Since the next couple of years will propably become a battle of existance for many airlines, the ones operating the A380 can really squeeze the ones who aren’t by maximising CASK in Y. Do note that during a recession it’s the economy class passengers who are keeping the airlines afloat.

  “Check Bloomberg- it was reported there that those were indeed the latest avilable figures for the A380 in late 2007, running at around $25bn.”

  Even Mr Doug McVitie seems to be dissing Bloomberg these days. They certainly seem to be a business thats dumbing down.

  “The double-decker A380 cost $18 billion to develop. Factor in currency exchange, payments for delays and compensation and $25bn is as accurate as you’ll get it.”

  A3XX projected cost at launch: €8.8-billion in December 2000. (Remember that the euro was weaker than the dollar then).

  A380 R&D cost spent at first flight in April 2005: About €11 billion.

  A380 total R&D spent at MSN-003 delivery to SQ: about €12,5 billion.

  “The A380’s calendar was set back three times. The plane’s development has cost at least 6 billion euros ($7.6 billion) more than the 12 billion euros originally projected”

  False, that 6 billion figure seems to be a number that’s just floating around in the blogosphere. If you ment to say €4.8 billion, that number is/was not a loss, but the projected earnings shortfall through 2010 which was announced by EADS at the third delay announcement in October 2006. Since the deliveries is progressing on a slightly slower schedule that projected at the time, one can add a few hundred million euros late next year to the above mentioned figure.

  “>>>The USD 685m estimate is about 1/5 of the total R&D for the 747-8-I/F programme.

  My bad on that - the $685m was the charge announced earlier this year. The cost of the program is a lot less than that which you denote too.”

  A lot less?

  You’ve got to be kidding. On the outset, the 747-8 was about a USD 2 billion programme. When it was realised at Everett that they needed a significantly modified wing to compete with, among other things, the aerodynamically superior A380 wing, USD 1 billion + had to be added to the R&D for the programme.

• 79. Mike M  |  April 21st, 2009 at 15:57

  

  >>>Sadly, the “airliner-net-theory” is not a theory but fact.

  That itself speaks volumes. Particularly as you dismiss a key fact that despite all the time it had to itself on sale as the only VLA transport during the biggest boom in over half a century, the A380 has launguished in securing orders. Granted, 200 orders (plus further options) is nothing to be sniffed at, but for a program costing so much money, its a travesty. (or a jobs project if you will…)

  >>>Since the next couple of years will propably become a battle of existance for many airlines, the ones operating the A380 can really squeeze the ones who aren’t by maximising CASK in Y. Do note that during a recession it’s the economy class passengers who are keeping the airlines afloat.

  Im well aware that economy passengers keep airlines afloat during bad times, but for an airplane costing so much to operate with just low paying customers defeats the purpose of the service - thats why the trend towards smaller, longer ranged two engine airplanes has become the norm. You’d be hard pressed to find any Airbus or Boeing executive who’d argue otherwise.

  >>>False, that 6 billion figure seems to be a number that’s just floating around in the blogosphere.

  So Bloomberg is now a blog? McVitie may have issues with them, I certainly do not, nor do I consider Bloomberg to be “blog-esque” - you just choose to ignore the numbers brought forth with a refutation of your own with zilch to back it up apart from the widely known starting cost of the then A3XX project. I’d like to see you bring some evidence to suggest Bloombergs numbers are wrong, perhaps then I may be able to grasp why Mr McVitie has issues with them.

  >>>When it was realised at Everett that they needed a significantly modified wing to compete with, among other things, the aerodynamically superior A380 wing, USD 1 billion + had to be added to the R&D for the programme.

  On the contrary - the wing was always due a significant upgrade. Its late design changes that raised the cost and has nothing at all to do with wing efficiency. Most if not all of the later changes to the wing were because of higher loads /weights on the center section which forced a redesign and incurred costs as a result. In fact it has been the “blogosphere” that gave traction to the notion that the wings were to blame when there is nothing official from Boeing as far as I know to suggest that the wings were somehow more inferior than first envisaged.

  As for the A380 wing, many recall it failing below the limit load test (http://www.flightglobal.com/articles/2006/02/16/204716/airbus-a380-test-wing-breaks-just-below-ultimate-load.html) and fixed with localized strengthening (http://www.flightglobal.com/articles/2006/05/23/206797/airbus-to-reinforce-part-of-a380-wing-after-march-static-test.html ) - hardly the pinnacle of what I’d term “aerodynamically superior” - but then the EU has a knack for certifying its home-grown products with critical deficiencies like the A300 tail, or A320 computers that override pilot commands, similar to the ANZ A320 crash in France to which there has been equal mystery with - (but “we mustn’t blame Airbus!).

  American Airlines would probably give a vivid view on that.

• 80. MPTA-098  |  April 21st, 2009 at 16:09

  

  To: Michael Di Marco

  It doesn’t strengthen your “case” that you’re copying some of that widephotographer’s notoriously inaccurate spreadsheets.

  In any case, you completely missed the point of my post, and that is that the A350’s fuselage Section-19 will be produced as a barrel, but where the FIRST layer of CFRP tape will constitute the outer moldline of the section-barrel which is different than what’s being done on the 787 where only the last layer of CFRP tape will constitute the outer moldline of the barrels. You should know that it’s preferable to construct CFRP pieces in CONCAVE shaped molds since the additional layers required for strenghtening can be put on after the initial layers and outer surface, or moldline if you will, has been layed down in the mold. On the 787, the surface of the mandrel mold is CONVEX, and consequently the action required for achieving a smooth outer moldline of the vehicle is considerably more complex and expensive to achieve.

  So, I suggest that you read (again?) this link:

  INSIDE-WINDING/INSIDE “AUTOMATIC FIBRE PLACEMENT OF CFRP-fuselage barrels METHOD:

  Page 12 at http://www.scribd.com/doc/5440286/Herbeck-2008-05-07-Production-Technology-Center-Eng

  Also, look at Section A-A on page 24 at this link:
  http://www.asipcon.com/2006/06_proceed/Wednesday/1200_Bucci.pdf

  You can see that in this concept the skin of the metallic laminated wing is reinforced on the “inside”, while the outer moldline is unchanged. For a composite wing, or outer surface, likewise the moldline will be a continous surface, while the structural reinforcements are applied on the inner surface. If you’re doing this in a concave shaped mold you’re home free. A convex shaped surface, on the other hand, only complicates things. Well, nobody said doing the 787 would be easy, but this point is another reason why ramping up production might not be as “trivial” as originally projected back in the heydays of 2004-2006.

• 81. orack babama  |  April 21st, 2009 at 18:25

  

  “propos, Airbus stated a few years ago they were going to deliver 4/month (48/year)…how the numbers have changed dramatically to the downside the past few years.
  I’ll be surprised if they deliver even 30/year starting from 2010.”

  Dear Jacbin777 Boeing planned to produce 192 Nightmareliners a year from 2011-2012. The A380 numbers are even now more realistic than the Boeing pipe dream. It is not even certain there are 192 Nightmareliners COMBINED in service before 2015…LOL.

  http://www.flightglobal.com/articles/2006/05/29/206927/boeing-787-production-rate-may-hit-16-per-month.html

• 82. MPTA-098  |  April 21st, 2009 at 18:53

  

  “That itself speaks volumes. Particularly as you dismiss a key fact that despite all the time it had to itself on sale as the only VLA transport during the biggest boom in over half a century, the A380 has launguished in securing orders. Granted, 200 orders (plus further options) is nothing to be sniffed at, but for a program costing so much money, its a travesty. (or a jobs project if you will…)”

  As I’ve already explained, most of the VLA market is being “invented”. New infrastructure has been aquired by both airports (wider taxiways, runways, ramps and boarding-bridges etc) and airlines (new bigger hangars etc). Add the delays, and now the global recession, and it might occur to you that it’s not surprising at all, that many potential A380 customers are still sitting on the bench and that they didn’t order the aircraft during this mythical “boom”. It’s human nature to be conservative about new aquisitions that will be operating outside the scope of experience of most airlines. Surely, it’s much easier to jump on a band wagon like the “dreamliner” which supposedly is to operate within the scope of experience of most airlines.

  “So Bloomberg is now a blog? McVitie may have issues with them, I certainly do not, nor do I consider Bloomberg to be “blog-esque” - you just choose to ignore the numbers brought forth with a refutation of your own with zilch to back it up apart from the widely known starting cost of the then A3XX project. I’d like to see you bring some evidence to suggest Bloombergs numbers are wrong, perhaps then I may be able to grasp why Mr McVitie has issues with them.”

  You should be able to grasp that part of the dumbing down press rarely seem to be putting correct financial numbers in context. In this instance, they’re seemingly unable to differentiate between “loss” and “projected earnings shortfall” (i.e. means the earnings will arrive, but at at a later date than originally projected).

  “On the contrary - the wing was always due a significant upgrade. Its late design changes that raised the cost and has nothing at all to do with wing efficiency. Most if not all of the later changes to the wing were because of higher loads /weights on the center section which forced a redesign and incurred costs as a result. In fact it has been the “blogosphere” that gave traction to the notion that the wings were to blame when there is nothing official from Boeing as far as I know to suggest that the wings were somehow more inferior than first envisaged.”

  What’s official from Boeing when they launched the porgramme is that they would be “re-lofting” the wings. In naval architecture, for example, lofting is the process of connecting the frames with smoothly curved stringers (or doing so mathematically) to fill out the 3-d shape of the hull. So when Boeing said they would be relofting the wings, that pretty strongly implied that the airfoil shape would change. (i.e. more supercritically shaped) So this is turning out to be a very substantial reworking of the wing. However, during the design phase, Boeing started to learn that even though it was overweight by some 6-7 tonnes, the A380 was performing superiorly aerodynamically to more than enough compensate for the increased OEW. Partly because of this development designers were sent back to the drawing board to undertake additional analysis which would lead to a “re-re-lofting” of the 40 year non-supercritical legacy airfoil. Also, the initial re-lofting incurred unacceptable weight penalties that apparently only were negated with the new more optimised, but significantly more expensive design, and consequently, the R&D expenses for the “new” 747-8 wing is about 2/3 of the total outlays for the programme.

  “As for the A380 wing, many recall it failing below the limit load test (http://www.flightglobal.com/articles/2006/02/16/204716/airbus-a380-test-wing-breaks-just-below-ultimate-load.html) and fixed with localized strengthening (http://www.flightglobal.com/articles/2006/05/23/206797/airbus-to-reinforce-part-of-a380-wing-after-march-static-test.html ) - hardly the pinnacle of what I’d term “aerodynamically superior” - but then the EU has a knack for certifying its home-grown products with critical deficiencies like the A300 tail, or A320 computers that override pilot commands, similar to the ANZ A320 crash in France to which there has been equal mystery with - (but “we mustn’t blame Airbus!).”

  It’s absurd how you’re taking off in several tangential directions and again demonstrating a pitiful lack of technical insight into the topic at hand.

  As for the A380 testing wing breaking just below the ultimate ultimate load target, do note that today it’s a goal to design EXACTLY to the required 1.5 times the limit load. It’s easier to put in some extra structural strengthening than to take out weight of an over-engineered structure. On the A380, this required only a few hundred kg in extra structural strengthening inside the wing.

  Now, clearly your reference to the ANZ A320 accident near Perpignan, France is with the intent to troll and has zero relevance to the topic at hand. Therefore, there’s no point in continuing the discourse.

  However, just to set the record straigt, one should note that there are two entirely separate issues here: The aircraft failed the test the three pilots attempted; the two crew lost control and were unable to regain control before crashing into the sea immediately below. When a pilot tests an aircraft he must anticipate failure. The crew slowed the aircraft below the speed for the test to been successful. Too slow, it stalled. If you’re going to stall a plane you’d better have enough altitude to recover from a stall. In fact, such low speed tests are expected to be performed at FL140, or some 10000ft higher than the altitude was when the ANZ A320 stalled.

• 83. Vero Venia  |  April 21st, 2009 at 19:38

  

  MPTA-098 said
  As I’ve already explained, most of the VLA market is being “invented”. New infrastructure has been aquired by both airports (wider taxiways, runways, ramps and boarding-bridges etc) and airlines (new bigger hangars etc). Add the delays, and now the global recession, and it might occur to you that it’s not surprising at all, that many potential A380 customers are still sitting on the bench and that they didn’t order the aircraft during this mythical “boom”.

  There is a market for VLAs, for sure. The question is about the market size.
  Nobody said that the market didn’t exist at all. The question has always been about the size. Time will tell whether the market will grow, will remain at current level or will shrink.

• 84. Mike M  |  April 21st, 2009 at 22:28

  

  >>>As I’ve already explained, most of the VLA market is being “invented”.

  Funny, IATA and others would argue its been contracting for the last 30 years. Even th trend for seat counts has and continues to go down. The 747 was losing this segment before even the 747-400 entered service.

  >>>The question has always been about the size.

  Yes, and its getting smaller. Airports in this climate will not shell out money on a handful of flights for A380’s. Why else is Emirates paymasters getting rid of a runway in Jebel Ali’s new Maktoum Airport?

  >>>mythical “boom”.

  Funny.

  >>>You should be able to grasp that part of the dumbing down press rarely seem to be putting correct financial numbers in context.

  So in other words you cant refute the $25bn~ price tag? Understood.

  >>>It’s absurd how you’re taking off in several tangential directions and again demonstrating a pitiful lack of technical insight into the topic at hand.

  Similar to your pitiful lack of understanding at the marketplace, the biggest sales boom in 50-plus years and a blinkered vision on a VLA market that has been contracted since the 1980’s.

  >>>Now, clearly your reference to the ANZ A320 accident near Perpignan, France is with the intent to troll and has zero relevance to the topic at hand. Therefore, there’s no point in continuing the discourse.

  So why did you continue with then? (Answer not required BTW).

• 85. Falcon  |  April 22nd, 2009 at 14:58

  

  Chris and Dougloid,
  I think both of you are taking the numbers I used far too serious. I do not have exact enough numbers to state that the turning point is at 50, 100 or any other exact number. I do know a few persons who have access to much better numbers than I care to know and they say my numbers are pessimistic,that’s all.

  All I wanted to highlight is that a program as a total may be in the red with no hope of ever turning profit and may still make more sense to continue than shut it down.

• 86. ikkeman  |  April 22nd, 2009 at 16:56

  

  boys, boys… who cares who said what. There’s only two fact’s in this whole discussion:

  1) the A380 is here to stay - wheter you think it’s because the Euro’s use it as a social workshop or you think it’s the best thing since oxygen - the final outcome is the same.

  2) only time can tell who is right, and if history teaches us anything it’s how unreliable historians are. Just sit back and enjoy the show for the next decade, and then return to this discussion.

  then for a few personal opinions:
  Might the VLA demise since the 80’s have something to do with the inherent inefficiency of the 196x’s tech 747 vs the 199x’s tech in the 777?
  That iconic crown may look nice, but it’s not the pinnacle of aerodynamic perfection.

  The current A388 orderbook holds more orders than the 747-100 ever filled. Not to bad i think?
  Boeing came out with the significantly improved 742 less than 2 years after the first 741 was delivered.

• 87. Michael Di Marco PE  |  April 22nd, 2009 at 17:01

  

  To MPTA-098

  I appreciate the additional references and your points regarding that 787 ramping up is not as straight forward as envisioned years ago and that the 4-shell approach has its advantages vs. monolithic barrel approach. However, there is one irrefutable fact that the monolithic barrel approach will always products a superior airframe. The issue is fasteners and especially the longitudinal ones. 787 have none. Consequentially, it can maintain at least a + 2,000 ft differential pressure advantage throughout its complete flight profile and the 350 can’t.

  From Onlineconversion.com

  1#/in2 = 1,882.6 FT air @ 15 deg C, close enough to 2,000 ft

  Comparing 787-9 vs. 350-800 hulls

  787-9 Circumference = 60 ft
  Length = 131.3 ft (-800 length)

  # = 1#/in2 * 60ft*131.3ft*144in2/ft2 = 1134432/2200#/tons = 515.7 tons

  The -9 can handle at least 515.7 tons greater hull pressure than the -800.

  Maybe in time Boeing can achieve the Holy Grail in hull design, sea level. Ears popping will become a thing of the past and a fine memory.

  Beside fasteners, there is the window size issue and weight. Regarding weight, the last available 350 OEW was Widebodyphotg. Since them, OEW is unavailable. This intentional void gives creditable to Saj’s assertion that 350 is grossly overweight.

• 88. Vero Venia  |  April 22nd, 2009 at 18:08

  

  ikkeman,

  Yes, the A380 is there to stay. Whether the program is profitable is not our problem.

  Concerning the size of the VLA market, you need to be a little bit patient. In only three years, that is twelve years after A380’s launch, we will know if the market grows or shrinks.

• 89. Mike M  |  April 22nd, 2009 at 18:22

  

  >>>Might the VLA demise since the 80’s have something to do with the inherent inefficiency of the 196x’s tech 747 vs the 199x’s tech in the 777?

  Of course, you completely miss the point - it was the 767 which revolutionized ETOPS and opened up P2P traffic connections where the 777 expanded it.

  If the 1960s tech was so inefficient, as you so (in)eloquently put it, the 737 would never be where it is today, nor would we see the 747-8 either.

  I would factor in the growth of smaller regional airports too, but if you cant comprehend why the 747/VLA market has been shrinking for the last three decades, it wouldnt make much sense to you

• 90. Falcon  |  April 22nd, 2009 at 19:13

  

  Michael Di Marci PE,

  “The issue is fasteners and especially the longitudinal ones. 787 have none. Consequentially, it can maintain at least a + 2,000 ft differential pressure advantage throughout its complete flight profile and the 350 can’t.”

  I completely fail to understand why “longitudinal” is a limitation, please explain.

  I never found structural engineering fun so only took the classes I had to but as I remember you just add strength until it is strong enough. Yes it usually adds weight but there is no reason why it can’t be done.

  Probably you get on your OEW horn again but I’d suggest you wait for them to announce it before you put too much in to it. After all lower weight is a secondary whereas fuel consumption and load are primary. If you need an example look at how longer wings usually means better performance despite added weight.

• 91. ikkeman  |  April 23rd, 2009 at 13:45

  

  Mike M
  Thanks for your enlightening rebuttal. though did nothing IMHO to refute anything I wrote.:

  Yes, 76 introduced the concept of long(er) range twins, but could in no way replace the 74.
  The 77 combined true long range with twin economy and a large cabin, thus resulting in one of the most sucessfull programs out of Boeing. IT’s been replacing 74’s whereever possible.

  The 73 lacked a credible replacement from Boeing - 74 did not after the 77 introduction.
  To judge the efficiency of 60’s tech, look to your own garage - what year is your car from. Also, the jumbo jet crown, while iconic and great to look at, is neither structurally nor aerodynamically desirable. It was placed there for operational, not design reasons

• 92. Mike M  |  April 23rd, 2009 at 17:28

  

  >>>Yes, 76 introduced the concept of long(er) range twins, but could in no way replace the 74.

  Who said anything about replacing? Its about the GROWTH of one market (twins) that has decimated the need for another (Quads), which you kindly even acknowledge too in this:

  >>>The 77 combined true long range with twin economy and a large cabin, thus resulting in one of the most sucessfull programs out of Boeing. IT’s been replacing 74’s whereever possible.>>>

  >>>Also, the jumbo jet crown, while iconic and great to look at, is neither structurally nor aerodynamically desirable.

  1400 deliveries disagree with that nonsense.

• 93. ikkeman  |  April 24th, 2009 at 06:18

  

  so if one type’s growth decimates the need for the other, is it than wron that the latter is being replaced by the former?

  deliveries say nothing about individual features of any product.
  Ask any aero or structural engineer wheter they like discontinuities in their fuselage cross section.

• 94. Vero Venia  |  April 24th, 2009 at 08:03

  

  ikkeman said, “so if one type’s growth decimates the need for the other, is it than wron that the latter is being replaced by the former?”

  This is exactly what happens with the 747 and the 777-300ER.

• 95. MPTA-098  |  April 24th, 2009 at 12:08

  

  Quote (i):”Funny, IATA and others would argue its been contracting for the last 30 years. Even th trend for seat counts has and continues to go down. The 747 was losing this segment before even the 747-400 entered service.

  Quote (ii): “I would factor in the growth of smaller regional airports too, but if you cant comprehend why the 747/VLA market has been shrinking for the last three decades, it wouldnt make much sense to you”

  First, shame on me for continuing the discourse

  Second, you’r assertion is based on including the 747-100 in the 747/VLA historical sales tally, but SELECTIVELY excluding the 777-300ER and A340-600 which both are extremely close to the 747-100 in passenger capacity and significantly exceeds it in payload capability. In fact, Lufthansa has put 5 toilets and a galley downstairs on their A346s, while still having more LD-3 (LD-1) positions available than the 747-100 in the lower deck areas, and effectively increasing enough Y-seats to make the aircraft about equal in capacity to the 741 in a current state-of-the-art hypothetical three class configuration.

  Also, “Rheinwaldner” at a.net has ponted out that:

  ————————————————————-Quote: “There never have been 10 years that have seen VLA-sales as high as the last ten years!

  March 1969- March 1979: 297 sold VLA’s
  March 1979- March 1989: 453 sold VLA’s
  March 1989- March 1999: 374 sold VLA’s

  And last but not least: The Decade of the VLA!!! :
  March 1999- March 2009: 574 sold VLA’s.

  May I recall one more time that the 773ER and the A346 have comparable or more capability than the Classic-747 and are much closer to the 744 than the A380? That means that one could count those two types too as VLA-representatives. For the total VLA market in this decade I don’t have to explain further what that would mean.”
  ————————————————————

  What is true, is the fact that larger aircraft (including ALL WBs) as a percentage of total civilian airliner sales has declined due to, among other things, the rise of no-frills airlines and low-cost carriers around the world and the increased range capability of the 737NG and A32X over earlier generation narrowbodies. However, the ABSOLUTE number of 747-100-CLASS-AIRCRAFT, and larger, that’s been sold during the last 4 decades, have in fact INCREASED.

  Quote: “>>>Also, the jumbo jet crown, while iconic and great to look at, is neither structurally nor aerodynamically desirable.

  1400 deliveries disagree with that nonsense”

  You seem to be totally unaware of the Section-41/42 ISSUES on the 747 which has an oval cross-section of the fuselage in sections 41 and 42 which places higher stresses on the skin, ribs and frames.

• 96. MPTA-098  |  April 24th, 2009 at 12:26

  

  To: Michael Di Marco

  In the first reference one can see that the A350’s fuselage Section-19 WILL BE produced as a MONOLITHIC BARREL, but that in contrast to what’s being done on the 787, the CFRP tape will pe put on the INSIDE SURFACE of the mandrel. This method is superior because the outer moldline of the fuselage section will be molded against the concave shaped inner surface of the mold under heat and pressure, therby producing a very high quality continous surface. Do note, therefore, that as the gauge of the skin varies due to load variations, the extra tape used will only be “visible” from the inside of the aircraft.

• 97. Vero Venia  |  April 24th, 2009 at 17:50

  

  to MPTA-098

  What is a VLA?

  As far as I know there were only about 450 747-400 ordered.
  The last passenger 747-400 was delivered in May 2005.
  The first passenger 747-400 entered into service in 1989.

• 98. MPTA-098  |  April 24th, 2009 at 18:16

  

  Vero Venia, that’s a good question. If a 747-100/200 is/was defined as a VLA, as put forth by the people subscribing to that mythical boom combines with a supposedly “lack of A380 sales”, then certainly a 777-300ER (and 777-300 as well) and A340-600 would qualify as VLAs as well. Also, a 747- 400 has less than 10 percent more floor area than a 777-300ER, while the A380 has about 50 percent more floor area than a 747-400. So one could perhaps talk about three classes of VLAs:

  Small VLAs: 747-1/2/3/4, 777-300(ER), A340-600
  Intermediate VLAs: 747-8I, A380-800
  Large VLAs: Two possible A388 derivatives; A380-900X (12 frames stretch), A380-1000X (25 frames stretch), BWB etc.

  As for the 747-400, that aircraft’s engines are one to two+ generations behind those onboard the A340s, 777s and A380s. Part of the reason why it lost out in sales to the 77W, A346 and A388.

• 99. Vero Venia  |  April 24th, 2009 at 18:28

  

  Let’s define VLA as 400+ seat aircraft (747-8i & A380).

  Thanks to whoever created this tinyURL:
  http://tinyurl.com/747-400-deliveries

• 100. Michael Di Marco  |  April 25th, 2009 at 06:52

  

  Posted on behalf of Michael Di Marco

  Click

  Falcon,
  The issue is fasteners and especially the longitudinal ones. 787 have none. Consequentially, it can maintain at least a + 2,000 ft differential pressure advantage throughout its complete flight profile and the 350 can’t.” I completely fail to understand why “longitudinal” is a limitation, please explain.

  My son is an aerodynamic engineer. The primary reason is that longitudinal fasteners break the Hoop stress surface.

  I never found structural engineering fun so only took the classes I had to but as I remember you just add strength until it is strong enough. Yes it usually adds weight but there is no reason why it can’t be done.

  True, however, since this hasn’t happen infers a negative benefit.

  Probably you get on your OEW horn again but I’d suggest you wait for them to announce it before you put too much in to it. After all lower weight is a secondary whereas fuel consumption and load are primary.

  You are under a misconception. Actually, there are three. Payload/OEW is for structural, the aspect ratio is for wing aerodynamic and SFC for engine efficiencies. The attached tables have all three for comparison purposes.

  If you need an example look at how longer wings usually means better performance despite added weight.

  The attached table will demonstrated that the Aspect Ratio is the true indicator of the wing performance.

  MPTA-098

  In the first reference one can see that the A350’s fuselage Section-19 WILL BE produced as a MONOLITHIC BARREL, but that in contrast to what’s being done on the 787,

  What is being done on the 787? From the story behind it,

  Another piece of the technology puzzle that would not have been ready in 2006 was the large-scale automated production of the one-piece composite fuselage barrels that make the 787 a unique flying machine.

  Instead, Boeing took a technological leap and opted for one-piece composite barrels. A computerized machine lays down carbon fiber on a mold, or mandrel. The carbon fiber is intensely tailored to a particular section of the plane. The thickness is not uniform. It changes constantly — and only Boeing has the formula.

  Once the mandrel has been wrapped with the carbon fiber, it is moved into a huge oven known as an autoclave, where it is cured under pressure and temperature.

  But how to get the mandrel out of the barrel after it is baked?

  That question was one of the reasons Boeing initially considered a fuselage of composite panels. The composite skin could be easily lifted off the mandrel. But how to pull that mandrel out of a tightly wrapped one-piece composite barrel that is not smooth or uniform on the inside?

  That’s a Boeing trade secret, Gillette said.

  Boeing did not know how to get the mandrel out when it made the decision to use one-piece barrels for the Dreamliner. “That was one where we had to decide whether it was impossible or we just did not know how to do it but we could figure it out in time. The team obviously figured it out in time.”

  The CFRP tape will pe put on the INSIDE SURFACE of the mandrel. This method is superior because the outer moldline of the fuselage section will be molded against the concave shaped inner surface of the mold under heat and pressure, therby producing a very high quality continous surface. Do note, therefore, that as the gauge of the skin varies due to load variations, the extra tape used will only be “visible” from the inside of the aircraft.

• 101. Falcon  |  April 27th, 2009 at 12:32

  

  Michael Di Marco
  The primary reason is that longitudinal fasteners break the Hoop stress surface.

  I didn’t ask you to name the stress force. I asked you to explain why it prevents Airbus from having the same inside pressure as the 787. I’m sure your son can explain that it is very common to have joints under various forms of stress and there are multiple ways to handle them.

  I have not seen anything about the 8,000 ft level during cruise anywhere else but I trust you got it right. What it tells me is that Airbus decided that cruising at this level is the better compromise over the total cost for maintaining a lower level. That is compromise based on the total solution and not limited to just having longitudinal joints.

  My point is that you’re guilty of what was brought up in a later blog on this site; misleading by limiting context. This is my real objection to your statements about this and most other things where I comment on your statements.

  True, however, since this hasn’t happen infers a negative benefit.
  Negative benefit??? There is no such thing as a negative benefit but I understand what you’re trying to say.

  Maybe it is and maybe it isn’t. It all comes down to how important people find the difference between 8,000 ft and 6,000 ft and the costs of creating and maintaining that pressure difference. It also very much depends on who you are, e.g. a passenger probably rate it different from the airlines accountants.

  The attached table will demonstrated that the Aspect Ratio is the true indicator of the wing performance.
  Sorry but there is way more to it than just aspect ratio.

• 102. Michael Di Marco PE  |  April 28th, 2009 at 19:30

  

  Falcon,

  Michael Di Marco

  The primary reason is that longitudinal fasteners break the Hoop stress surface.
  I didn’t ask you to name the stress force. I asked you to explain why it prevents Airbus from having the same inside pressure as the 787. I’m sure your son can explain that it is very common to have joints under various forms of stress and there are multiple ways to handle them.
  I have not seen anything about the 8,000 ft level during cruise anywhere else but I trust you got it right. What it tells me is that Airbus decided that cruising at this level is the better compromise over the total cost for maintaining a lower level. That is compromise based on the total solution and not limited to just having longitudinal joints.

  From Boeing 787 PR dated July 19, 2004,

  “Because their structures are primarily metal, today’s commercial airplanes are certified to a maximum altitude equivalent of 8,000 feet to minimize structural fatigue during normal operation. The 7E7 will be pressurized to a maximum altitude equivalent of 6,000 feet during normal operation, a decision enabled by the stronger, more-durable composite materials from which the airplane will be constructed. Composites are not subject to the same fatigue conditions that limit the amount of pressure cycles that can be applied to an aluminum airplane.”

  Since both are using composites, the method; monolithic barrel vs. frame/plate should have no impact here. But, it does.

  My point is that you’re guilty of what was brought up in a later blog on this site; misleading by limiting context. This is my real objection to your statements about this and most other things where I comment on your statements.

  Limiting or pertinent context?

  Using your statement as an example,

  “Probably you get on your OEW horn again but I’d suggest you wait for them to announce it before you put too much in to it. After all lower weight is a secondary whereas fuel consumption and load are primary. If you need an example look at how longer wings usually means better performance despite added weight.”

  I addressed your implied conclusion that a longer wing usually implies better performance (aerodynamically) despite added weight. I explained that the aspect ratio is the first order measurement of the wing’s aerodynamic efficiency, the higher it is the greater its efficiency. The accompanying table should have demonstrated that. You ignored my response right or wrong by, “Sorry but there is way more to it than just aspect ratio.”

  Of course, that statement is true in itself. However, it has no bearing on the validity of your implied conclusion. If I am wrong, please by all means point this out to me for my and for all the members benefit. We are having a dialogue not a monologue.

  True, however, since this hasn’t happen infers a negative benefit.
  Negative benefit??? There is no such thing as a negative benefit but I understand what you’re trying to say.
  Maybe it is and maybe it isn’t. It all comes down to how important people find the difference between 8,000 ft and 6,000 ft

  From the same PR

  “A comprehensive study of more than 500 people found that Boeing [NYSE: BA] 7E7 Dreamliner passengers will feel more relaxed and less fatigued thanks to cabin-pressurization improvements on the all-new airplane.
  Oklahoma State University and Boeing conducted the study, which was based on U.S. Army Research Institute of Environmental Medicine methodology characterizing 68 possible altitude symptoms. The goal was to determine participants’ comfort levels at various pressurization levels.
  “Improving the passenger experience with flying is important to us,” said John Feren, vice president of Sales and Marketing for the 7E7 program. “We want to make sure that the changes we introduce represent a real improvement, and clearly our studies show that a lower cabin altitude will have a positive effect on passengers.””

  and the costs of creating and maintaining that pressure difference. It also very much depends on who you are, e.g. a passenger probably rate it different from the airlines accountants.

  True, however, in the final analysis, it’s the passenger that pays the bills.

  The attached table will demonstrated that the Aspect Ratio is the true indicator of the wing performance. Sorry but there is way more to it than just aspect ratio.

• 103. EDO  |  May 5th, 2009 at 08:59

  

  I like the A380 because it should, and I repeat should, insulate passengers from turbulence a bit better than smaller planes.

  Beyond that, for all the technical and financial analysis offered you forget one thing:
  Airline travel sucks!

  We do not like to be crammed into tiny seats and spaces. We do not like to wait in long lines and be subjected to a full body search at any given moment. Next thing you know they will have proctologists in the airport screening process.

  It is a necessary evil. Nothing in the 380 or the next round of planes will change that. Better than before? Perhaps. Anywhere near where it should be? Not even by a mile.

• 104. Jacobin777  |  May 5th, 2009 at 18:09

  

  Dougloid, thanks for the kind words…:-)

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