137 Comments Add your own

• 1. Vero Venia  |  June 3rd, 2009 at 08:43

  

  I have always been cautious with regard to the 400+ seat market. Today this market is driven solely by capacity. In my opinion this is a small market.

  There have been “only” about 450 747-400 delivered since its entry into service in 1989. I suspect most of them were bought more for its range and less for its capacity. Today you have very capable and efficient twins.

  Two weeks ago I imagined what I called a “Dream Fleet”
  http://verovenia.wordpress.com/2009/05/18/dreamfleet/
  I agree with most of you that the Fleet described in the blog entry is hypothetical and very scholar. However, it gives you two indications:
  * the A380 and the 747-8i are not in the same market
  * the possible positioning of the 777 replacement or enhancement

  During the study I also found out that you can put big or very big aircraft on a route if you already have enough frequency. Otherwise you have to accept to take some risk on the revenue (or on the yield). It sounds very strange or paradoxical. But that was one of my findings. May be I am wrong, may be I am right. I hope someone who has better knowledge about air transport and who has access to traffic data can validate or invalidate my “theory”.

  In only four or five years from now we will know the trend of the the VLA market. Five years is not so far away when you consider that the A380 was launched nine years ago.

• 2. keesje  |  June 3rd, 2009 at 08:49

  

  “Tomorrow’s large-airplane market will be filled by the Boeing 747-8, whose step-up in size from the current industry-standard 747-400 makes far more commercial sense in today’s slower-growth markets than the over-sized, un-optimised and under-achieving Airbus A380.

  Therefore any carrier which wants new high-capacity aircraft for delivery before 2020 has only one choice — the 747-8 Intercontinental. Reliability, practicality and pragmatism are far more bankable commodities than runaway egos, pet projects and ridiculous pipe-dreams (like 45 A380 deliveries/year by 2010/2011).

  Hystirical, Incorrect & Childish.

  Facts : dominant carriers sold out the A380 for 5-6 yrs and some further carriers clearly indicated they’ll buy it too : ANA, CX.

  The 747-8i is just not selling despite huge discounts, real question is if it will ever see the day of light. I think Boeing will do a “787-3″

  The 747-8F is doing ~ fine although none were sold for the last 18 months and the market will be flooded with cheap converted 747-400s soon. And as we know the cargo market floats on cheap converted freighters.

  Boeing expect to sell twice as much 8i as 8F’s. Something went wrong. The A380 proved more attraticve to international carriers.

  An Yes, the A380 has had a continiuos stream of orders for the last 5 yrs:

  http://en.wikipedia.org/wiki/List_of_Airbus_A380_orders_and_deliveries#Orders_and_commitments_by_date

  Dont place it in the same boat as the 747-8i. It won.

• 3. Vero Venia  |  June 3rd, 2009 at 11:07

  

  I built a chart using the information contained in the pages below.

  http://www.flightglobal.com/articles/2006/06/19/207275/airbus-battles-to-complete-a380-testing-by-year-end-to-fulfil-sia-delivery.html

  http://www.flightglobal.com/articles/2009/05/07/326170/airbus-reins-in-2009-a380-shipments-in-response-to-downturn.html

  Here is the chart.
  http://img268.imageshack.us/img268/7492/a380prod.jpg

  The chart is a view of the situation as of May 2009.

  More explanation

  The steady production rate 45 aircraft/year was mentioned in early delivery plans.

  The delivery estimated rate of 23 aircraft per year is 100% speculative. The number correspond roughly to 50% of the target delivery rate (45).

  Another reason to put the figure of 23 is to spread the backlog as far as possible.

• 4. Leelaw  |  June 3rd, 2009 at 12:44

  

  Poor Keesje, as is so often the case he’s trying to extricate himself from the intellectual quicksand he’s mired in on “Planet Airbus” by grasping for Mr. Leahy’s increasingly stale talking points.

• 5. ikkeman  |  June 3rd, 2009 at 12:51

  

  so we can expect the current 380 backlog to keep Airbus busy for between 4.5 and 7.5 years. That seems to be inline with the backlog for other types…

  23 a month is approx. the tempo that Bo has been turning out 74’s for the past ten years - seems a reasonable number when considering the 747 is (was) at the end of it’s product cycle

• 6. Leelaw  |  June 3rd, 2009 at 13:26

  

  @ Ikkeman.

  Other “types” aren’t trying to recoup a $15B+ mountain of development costs that’s apparently still continuing to grow.

  Other “types” are not maintaining a very costly and entirely separate logistical and production infrastructure at low rates of production.

• 7. boeing investor  |  June 3rd, 2009 at 13:31

  

  “The 747-8i is just not selling despite huge discounts,”

  Keesje

  I will request this only once - what evidence do you have to suggest Boeing is/has/will offers “huge discounts” on the 747-8I?

  The reason I ask is because the exact opposite is true and why airlines have opter for the cheaper/better alternative in the 777-300ER.

  So again, with no malice or ill toward you, I simply ask you bring forth something to back that claim up.

• 8. Vero Venia  |  June 3rd, 2009 at 13:34

  

  I am sorry because I omitted a very important information. The chart is really a snapshot of the situation in May 2009, especially concerning the total order.

  More orders can come in and cancellations can happen. So this is not a static situation.

• 9. ikkeman  |  June 3rd, 2009 at 13:36

  

  6. Leelaw | June 3rd, 2009 at 13:26

  So???, what’s your point - A380 will not ever make any money - I heard you the last few hundred times and you know I agree with you. Thanks for reminding us all, it might have slipped our mind how you think about the “Whalebus(t) turd”

  I was commenting on the post by Mr venia, lending my support to his claims. I tried to point out his assumprions seem reasonable and not far out of touch with current practice. Neither of us made any claims or comments as to the profitability of any program.
  This is why I feel you’re getting ever more into the Boeing Camp - whenever you have a choice of going either way, you chose the pro-boeing/anti-airbus path.
  Sad really…

• 10. MPTA-098  |  June 3rd, 2009 at 13:45

  

  Therefore any carrier which wants new high-capacity aircraft for delivery before 2020 has only one choice — the 747-8 Intercontinental. Reliability, practicality and pragmatism are far more bankable commodities than runaway egos, pet projects and ridiculous pipe-dreams (like 45 A380 deliveries/year by 2010/2011).

  Perhaps Doug only got a D/No-Award on his Scottish higher maths examination. At least that would explain his math “reasoning”.

  Airbus should deliver 14 A380s this year, and just for the sake of argument, let’s assume that there’ll be 23 deliveries next year, and 30 per year the following years (until 2016).

  Cumulative A380 delivery quantity:

  -End of 2009: 27
  -End of 2010: 50
  -End of 2011: 80
  -End of 2012: 110
  -End of 2013: 140
  -End of 2014: 170
  -End of 2015: 200

  So, by reaching two-thirds of the originally planned annual production output by 2011, Airbus will have cleaned out their A380 backlog by early 2016.

  Assuming the first delivery of the 747-8F will occur in the third quarter of 2010 to Cargolux, and that the production of freighters and intercontinental will remain at one unit per month until 2013, we’ll see the following 748 output:

  Cumulative 747-8I/F delivery quantity:

  -End of 2010: 6
  -End of 2011: 18
  -End of 2012: 30
  -End of 2013: 54 (2 per month output as originally planned)
  -End of 2014: 78
  -End of 2015: 102

  Interestingly therefore, one can reasonably predict that the 747-8I will not have an advantage over the A388 in available production slots in neither the 2010-2015 timeframe, or in Doug’s fuzzy 2010-2020 timeframe. So, once again, it’s shown that Doug is indulging in hyperbole and exaggeration; this time to magnify and distort the reality of sales and production of 748s compared to A388s.

  Vero Venia: “May be I am wrong, may be I am right. I hope someone who has better knowledge about air transport and who has access to traffic data can validate or invalidate my “theory”.

  Why don’t you submit your “theory” and manuscript to a peer-reviewed journal such as the Journal of Air Transport Management. If it’s rejected, it would indicate that your “theory” just might be a another pseudo theory that’s been crippled.

  http://ees.elsevier.com/jatm/

• 11. Vero Venia  |  June 3rd, 2009 at 14:08

  

  10. MPTA-098 | June 3rd, 2009 at 13:45 said, “Why don’t you submit your “theory” and manuscript to a peer-reviewed journal such as the Journal of Air Transport Management. If it’s rejected, it would indicate that your “theory” just might be a another pseudo theory that’s been crippled.”

  So I suppose you do not have better knowledge about air transport than I do.

• 12. Leelaw  |  June 3rd, 2009 at 14:24

  

  Mea Culpa Ikkeman, I misunderstood your point.

• 13. Vero Venia  |  June 3rd, 2009 at 14:33

  

  FleetBuzzEditorial said, “Between the 2008 Boeing Current Market Outlook (980) and the 2007 Airbus Global Market Forecast (1283), there doesn’t appear to be an awful lot separating the two jet makers in their assessment of the large airplane arena.”

  As an engineer, I love to make comparison using percentage. And when I do so, I find Airbus’ estimate (1283) is 30% higher than Boeing’s (980).

  Forecast is not always correct, for example weather forecast. That is why it is called a “forecast” or an “outlook”.

  I admit that in some cases the forecast was much more conservative than the reality. This is the case for single aisle aircraft.
  If forecaster can be wrong on the good direction, I am deeply convinced that they can be wrong the other way too. In fact, I think in most cases they are talking BS.

  That’s the amusing part about the future, you do not know anything until it happens. Fortunately we do not know exactly what will happen in the future. Someone in the past said, “If we know the future then there is no hope for humanity.”

  Speaking about his future to my teenager son during diner, I explain that he should work at school to prepare the future even if he does not know how it will be. He answered ,”So, you tell me to prepare for something that may not happen at all?” Duh!

• 14. Ed  |  June 3rd, 2009 at 14:33

  

  Vero Venia said;

  “So I suppose you do not have better knowledge about air transport than I do.”

  You are correct, Vero. MPTA-098 hasn’t a clue of what he is talking about. He has to many assumptions about the A-380 oe B-747 production rates. Both OEMs will have to settle on a rate around 12-14 airplanes per year for the two VLAs. Economic reality will set in at EADS sooner or later.

• 15. Chris Wallace  |  June 3rd, 2009 at 14:47

  

  Both of these birds are albatrosses and they’ll be hanging around the necks of both manufacturers for years to come.

  Both companies are outright lying in their market forecasts for VLAs and always have been, IMO. They just created the numbers to justify the investments to the gullible. I can expect both companies expected the ~450 747-400s in revenue service to be replaced by the A380 or the 747X. However, they’ve actually mostly been replaced by the 777-300ER and going forward will continue to be replaced by that plane as well as the A350-1000XWB.

  Yes, the pundits cling to the belief that the perpetual 5% annual growth in air travel (which no longer is so perpetual) will require that A380s be bought in large numbers to meet this demand, but we’re now almost two decades into that growth pattern since the VLAs were first serious looked at in the early 1990s and sales for the type are a grand total of 220. So that means by 2040 sales will be 440. Projecting forward at that rate, Airbus will not make their original 1000 order prediction until the next century.

  Meanwhile, the current generation of smaller widebodies (767, 777, A330/A340) have all reached the 1000 sales milestone already and the next stage will be either there (787) or closing fast (A350XWB) by the next decade.

  The 747-8 [i]Intercontinental[/i] is the 767-400ER of her family - the last, desperate scramble to try and remain relevant in a market that passed it by a decade ago. Any hope the 747 had to stay relevant as a passenger carrier died with the introduction of the 777-300ER. LH will take them because LH needs them, just as CO and DL took the 767-400ER because they needed them. I know it disappoints you Kessje to know Boeing was able to sell passenger 747s in the “A380 Era”, but take comfort in they only sold a few.

  As much as some dismiss the nose-door, the fact remains there are carriers who need it. However, for those who don’t, the 747-400BCF and especially the 777 Freighter offered cheaper or more efficient alternatives and eventually 747-400(ER)F sales would have slowed to a trickle. It would have been enough to keep the line moving at one per month probably forever, but eventually Boeing would have had to decide if it was worth keeping the line open at that rate, even if they could command a premium on pricing due to being the only option.

  The 747-8F puts the plane well beyond what the 747-400 freighter family can do in terms of payload lift and volume and it greatly improves the efficiency. More revenue and lower operating costs means more profits and with an average useful life measured in decades, even if you spend twice as much to buy a 747-8 versus a 747-400BCF, you will end up making more money over the life of the frame. Which is why the plane has seen strong out=of-the-gate sales and will likely sell at a rate that will allow more then one per month to roll off the lines which helps bolster the case to keep the line open.

  If the A380-800 sees a production rate much above two per month, I’ll be surprised. Sales are too low to justify the original four per month and I don’t think they’ll improve to the point to support three (while maintaining a stable backlog). Even with oil creeping back to within 50% of historical highs and traffic collapsing, airlines that had planned to toss their 747-400s are now deciding to refurbish them for another five years (minimum) of useful life and deferring deliveries of the A380s and 77Ws that were going to replace them.

• 16. boeing investor  |  June 3rd, 2009 at 14:51

  

  MPTA-098

  You make many assumptions in your attempt to discredit McVitie.

  However, and as history has shown, Airbus still has yet to get its arms around the A380 program. To assume they’ll make almost double the quantity of A380’s next year is a jump to far.

  On substance, Mcvitie’s points may well be proven true.

• 17. ikkeman  |  June 3rd, 2009 at 15:00

  

  7. boeing investor | June 3rd, 2009 at 13:31
  What about hte general practice by airframers to sell their products at some 30% below list price… If you doubt Bo engages in this practice, Mr Venia has a cool link to a list of financed amounts per airframe - compare that to the Bo published list price…
  I agree that a common practise shouldn’t be called a “Huge discount”

  11. Vero Venia | June 3rd, 2009 at 14:08
  Does your model take into account seasonality and the magnitude difference of normal demand fluctuation between routes? I bet that as demand fluctuates less, the risk of operating fewer a/c goes down.
  What happens with the smaller a/c you can no longer economically operate while in low demand. How expensive is parkin a bird. What about the flexibility of demand in relation to departure/arrival times.

• 18. boeing investor  |  June 3rd, 2009 at 15:31

  

  Ikkeman, I am not disputing that discouting goes on - of course it does.

  What I am skeptical about is Keesjes claim. The first 747-8I is going to a VIP customer in Kuwait whom Im working very closley with.

  While its a VIP/BBJ variant, the price negotiated is not near to the industry norm - so I find it hard to accept without evidence that Boeing has offered “huge” discounts.

  We’ll have to wait and see what Keesje can bring.

• 19. Vero Venia  |  June 3rd, 2009 at 15:42

  

  17. ikkeman | June 3rd, 2009 at 15:00 siad, “Does your model take into account seasonality and the magnitude difference of normal demand fluctuation between routes? I bet that as demand fluctuates less, the risk of operating fewer a/c goes down.”

  I mentioned once that you need to model your flow by V=U +/- u
  V is actual flow
  U is average flow
  u is the flow variation (seasonal or slowdown or random)

  That is exactly why you need enough frequency with smaller aircraft on the route. In order to make sure that your big or very big aircraft can reach the break even load factor, you can sacrifice smaller aircraft during low season or during downturn. You need several smaller aircraft such that you can rotate the “void” in order not to lose your slot. In Europe there is a 80% rule or something like that.

  The “sacrificed” aircraft can be used to open a new route or it can be parked. It is very often impossible to reallocate a big or a very big aircraft. First, because it need a very dense route and second the airport may be incompatible with your big or very big aircraft.

  It is quite complex isn’t it? That is why I love the idea of my dream fleet. The fleet is simple and versatile.

  Airlines need Flexibility and Versatility in this very dynamic economic environment.

• 20. MPTA-098  |  June 3rd, 2009 at 15:45

  

  “So I suppose you do not have better knowledge about air transport than I do.”

  At least I know that Heathrow and Gatwick are severly slot constrained and Stanstead is getting slot constrained. For this reason, LHR is, and will remain the number one VLA airport in the world for at least the next couple of decades (ahead of HKG, DXB, NRT and SIN).

• 21. Mike M  |  June 3rd, 2009 at 16:06

  

  >>>>For this reason, LHR is, and will remain the number one VLA airport in the world for at least the next couple of decades (ahead of HKG, DXB, NRT and SIN).

  Not strictly true.

  LHR has been losing VLA traffic for many years now and maybe in a decade or so will have around 85% of all movements based on single/twin aisle twinjet airplanes.

  LHR’s position as VLA heaven is shrinking faster than the other hubs’ (you mention) pace of growth.

• 22. Vero Venia  |  June 3rd, 2009 at 16:13

  

  20. MPTA-098 | June 3rd, 2009 at 15:45 said, “At least I know that Heathrow and Gatwick are severly slot constrained and Stanstead is getting slot constrained. For this reason, LHR is, and will remain the number one VLA airport in the world for at least the next couple of decades (ahead of HKG, DXB, NRT and SIN).”

  The problem with London airports is about management.

  When you know there are individuals who own slots at Heathrow you know that it needs some clean up. I don’t want to mention those (very) small aircraft abusing slots there.

  Don’t expect to see many VLA sales.

• 23. MPTA-098  |  June 3rd, 2009 at 16:21

  

  Boeing investor: “However, and as history has shown, Airbus still has yet to get its arms around the A380 program. To assume they’ll make almost double the quantity of A380’s next year is a jump to far.”

  You will find history repeats itself when people ignore learning from it. It looks like you’re refusing to believe that Airbus in fact may have learned something from their mistakes on the A380 programme.

  New delay had been encountered end of 2008 on the first aircraft (wave-2), as the volume of design activities was underestimated as well as the global workload effect in manufacturing and the stability of the supply chain. This has had a knock on effect on the following aircraft, which had led to a smoothening of the ramp-up. Situation clear now and industrial processes under execution as planned (page 10).

  http://www.eads.com/xml/content/OF00000000400004/1/92/42497921.pdf

  If the situation is “clear now” as indicated in this most recent Airbus programme review, I can’t see why doubling the production next year would be a jump to far from a technical and logistical point of view. Interestingly, during the first five years of 777 production, deliveries jumped from 13 to 32, to 59, to 74, and finally to 84 in the fifth year year of production.

• 24. boeing investor  |  June 3rd, 2009 at 16:34

  

  “It looks like you’re refusing to believe that Airbus in fact may have learned something from their mistakes on the A380 programme.”

  I implied no such thing. I just stated the obvious in that they are far from over with battling their production issues, regardless of whether its a Wave 1 or 2 model.

• 25. Vero Venia  |  June 3rd, 2009 at 16:38

  

  23. MPTA-098 | June 3rd, 2009 at 16:21 said, (whatever he said)

  Technically speaking there should not be anymore hurdle to ramp up A380 production. The only issue is if orders don’t come in quickly. As you can see in the following chart the backlog evaporates rapidly unless new orders come in.

  http://img268.imageshack.us/img268/7492/a380prod.jpg

  Ramping up A380 sales is as important as ramping up the production.

• 26. Vero Venia  |  June 3rd, 2009 at 16:45

  

  25. Vero Venia | June 3rd, 2009 at 16:38 said, “Ramping up A380 sales is as important as ramping up the production.”

  This is true for the 747-8i as well.
  Boeing needs to ramp up 747-8 Intercontinental sales this year and next year if they want to ramp up the production

• 27. Chris Wallace  |  June 3rd, 2009 at 17:52

  

  A few points about pricing:

  I have yet to see anyone offer any claims other then their own opinion of what LH paid for their 747-8s. However, we have seen claims from aerospace analysts of what airlines like QF and BA have paid for A380s. Of course, the part I find amusing is one of those offering claims is Scott Hamilton. Now Mr. Hamilton is generally bullish on the A380 and many Airbus Aficionados often quote his positive analysis of the program. And yet when he had the audacity to state that Airbus offered strong discounts on A380 sales, well he’s suddenly full of crap because airlines will pay a premium to get their hands on it for the prestige factor and the “credibility” it gives them with premium cabin customers who would not be caught dead in something as “low rent” as a 747 (even though they’ve been flying in them for the past four decades).

  I’ve seen a few A380 contracts and I know what they paid. I’d dearly love to get my hands on LH’s just to finally know the truth, but so far I’ve been unsuccessful.

  However, if Boeing really is cutting 60% off the 747-8 list, then why isn’t it selling? Why doesn’t EK buy them? They’d be $15 million less per frame then what they’re paying for their 77Ws (which they’re already getting at around 50% off list because they have bought so many).

  And if Boeing is offering the 747-8 to customers like BA for $120 million a frame plus high-margin ancillaries, that makes you wonder what Airbus offered BA to swing the deal back to them, doesn’t it?

  Of course, the real trap is that people look at today’s average A380 price of $310 million and assume that was the price in 2000 when many of these initial orders were signed. In reality, it was scores of millions less. So when you see a claim that QF paid $130 million a plane for the A380, divide that by the current list and it’s a 58% discount. But divide that by the $250 million list of 2000, and it’s only 48% which is actually well within line for a launch customer discount - especially since that launch customer will be buying plenty of high-margin ancillaries like simulators, spares, training, and such.

  Yes, I know the CEOs of QF and SQ diss the 747-8 at every opportunity, but I also know why they do it and it certainly doesn’t reflect on their professionalism. At least the other A380 customer CEOs seem to have higher personal and ethical standards.

• 28. MPTA-098  |  June 3rd, 2009 at 18:46

  

  Mike M: “LHR has been losing VLA traffic for many years now and maybe in a decade or so will have around 85% of all movements based on single/twin aisle twinjet airplanes.”

  Don’t include the 747-100/200 in that statistic as both the 777-300ER and A340-600 have much better payload/range with the former aircraft having only marginally more passenger seating capacity. Even the 747-400 only has about 13 percent more cabin floor area than the 77W.

  “LHR’s position as VLA heaven is shrinking faster than the other hubs’ (you mention) pace of growth.”

  Well, even by 2026, Airbus believes LHR will still be the number one large aircraft airport in the world (page 20):

  http://www.pnaa.net/Pages/Events/2008_Conference/Pickup_02-08.pdf

  boeing investor: “I implied no such thing. I just stated the obvious in that they are far from over with battling their production issues, regardless of whether its a Wave 1 or 2 model.”

  Ok, I’ll retract my statement implying that you were.

  However, would you care to substantiate your claim rather than saying it’s “obvious”. In fact, all the A380s that are going to be delivered this year are either in Hamburg or at the flightline in Toulouse (i.e. significantly “better” than last year when 12 frames were delivered).

• 29. MPTA-098  |  June 3rd, 2009 at 18:49

  

  Vero Venia: “The problem with London airports is about management. When you know there are individuals who own slots at Heathrow you know that it needs some clean up. I don’t want to mention those (very) small aircraft abusing slots there.”

  Although it’s quite obvious that slot concentration at congested airports is likely to occur when secondary slot trading is introduced, it’s also important to take into account the fact that the congestion patterns at individual airports can be very different.

  Interestingly, LHR is already now down in 4th place in Europe in terms of the numbers of routes served. Just a few years ago it was number one. The hubbing options from Paris, Frankfurt, and Amsterdam are much better than Heathrow. In fact, the substantially lower transfer rates at LHR is in the range of 30-35 percent, while at AMS it’s in the 40-45 percent range and at FRA it’s even over 50 percent. AMS, for example shows successive periods of slot scarcity during the day due to the connection traffic peaks of i.e. Air-France/KLM, whereas LHR demonstrates a continous excess demand of capacity during the whole day.

  The symtoms of productive efficiency in slot use to be expected after the introduction of slot trading are not self evident, as the main hub carrier(s) cannot simply continue to substitute short-haul NB flights by long-haul WB flights in the scarce peak slots. As for LHR, the continuous congestion at BA’s home base partly reflects their focus on the high yield O-D market of the London metropolitan area itself. The primary role of LHR as a gateway is reflected in the relatively low dominance level of connecting traffic.

  Finally, one can relatively safely state that slot concentration is more likely the result of efficient airport use rather than from anti-competative behaviour. The main problem currently at LHR is, of course, the congestion of the two runways that are operating at an average of 98.5 percent of capacity. It’s to the credit of the BAA that LHR is able to pull this off reasonably well!

  Vero Venia: “(whatever he said). Technically speaking there should not be anymore hurdle to ramp up A380 production. The only issue is if orders don’t come in quickly. As you can see in the following chart the backlog evaporates rapidly unless new orders come in.”

  Whatever he said???

  If you want to jump into an argument, please show some courtesy to at least read what’s been written as well as looking at the context of the argument presented.

  As for A380 production levels; even pushing production to 40 per year from 2011, Airbus will not have cleaned out their A380 backlog until 3Q/4Q 2014. The fact is that if Airbus was to introduce an A380-900 in, let’s say, 2015 and an A388R (+ an improved A388) the following year, all outfitted with Trent-XWB engines etc, not many more orders for the “basic” A388 will be needed.

  Vero Venia: “This is true for the 747-8i as well. Boeing needs to ramp up 747-8 Intercontinental sales this year and next year if they want to ramp up the production”

  Well, they don’t want to for the time being:

  The planemaker also said it will delay previous plans to modestly increase production of its 747-8 and 767, each currently at about one per month.

  http://seattletimes.nwsource.com/html/boeingaerospace/2009017116_boeingcuts10.html

• 30. Paula K  |  June 3rd, 2009 at 19:02

  

  Now Mr. Hamilton is generally bullish on the A380 and many Airbus Aficionados often quote his positive analysis of the program. And yet when he had the audacity to state that Airbus offered strong discounts on A380 sales, well he’s suddenly full of crap because airlines will pay a premium to get their hands on it

  The telling point was raised on the the fleetbuzz forums that British Airways had indeed paid a paltry sum for their A380’s, undercutting the 747-8 price by millions of bucks (double-digit).

  That said, Chris’ point about airlines not buying it if poster Keesje is right on pricing raises an interesting scenario - eitehr the 747-8i market appeal is wrong, or Airbus is indeed shipping out A380’s at any price to prevent 747 sales.

• 31. B380  |  June 3rd, 2009 at 19:06

  

  This A380 story has been milked to death here. Honestly, I don’t want to know anymore. Can you please try and change the story. My suggestion, get somebody from Boeing to talk about the 787 testing. This is much more interesting that argue about the Market Outlook. By definition, nobody knows what is going to happen and we all are going to put forward our own predicitons… This will not get us anywhere. So why not concentrate on matters at hand. Get somebody from the 787 team, rather than McVitie and his idiotic comments.
  Anyway, some of my thoughts on the article and the comments.

  Dougie:

  “Tomorrow’s large-airplane market will be filled by the Boeing 747-8″
  Well, not at this rate of sales. Freighter, yes but pax? Hmmm…

  “un-optimised and under-achieving Airbus A380″
  It had delivered on the contractual promises.

  “even generously allowing 20/year from 2010 — and that is being generous”
  Wow, you are being generous twice there… See my comment at the bottom.

  “Reliability, practicality and pragmatism are far more bankable commodities”
  You are comparing reliability of the 748 when it is not even in service?

  “It’s Boeing’s market”
  Of course it is, how can it be otherwise…

  Fleetbuzz:

  “The debates here on the Editorial have been a delight to read”
  Have they?

  “British Airways executives being among the most sceptical that such milestones can be reached”
  Can you provide a link to that? I would like to see what they are saying. Last I heard they will be getting ‘E’ versions with quite a few improvements.

  “No one has a crystal ball to predict the outcome of “who did better””
  Who needs a crystal ball when you’ve go McVitie… right?

  “from a financial standpoint, perhaps the 747-8 still appears to be streets ahead”
  Sorry, have we been reading the press releases from Boeing where they stated that the programme is in a loss position?

  Chris (reply 15):

  “replaced by the 777-300ER and going forward will continue to be replaced by that plane as well as the A350-1000XWB.”
  Certainly this will cover a big part of but not the whole market. I read somewhere that EK expect the traffic to triple in the next 20 years, so there is a place the VLA, in my opinion.

  “The 747-8 [i]Intercontinental[/i] is the 767-400ER”
  764 is a essentially a double stretch of the original 762. It was no match for the A332. Indeed CO and DL ordered it and found use for them. Both have large 767 fleets, so an incremental order would save more than than introducing a new type of aircraft. By the way, I think the same fate is awaiting 787-10 if they pitch it against the A359.

  “If the A380-800 sees a production rate much above two per month, I’ll be surprised.”
  Currently (after the revision) the plan is to reach rate 3.4 by the end of 2011. So that makes it around 36/year. I would guess 45 will be reached by end of 2013-14, at the latest.

  reply(27)
  “makes you wonder what Airbus offered BA to swing the deal back to them”
  I have seen you repeat this claim of the 11th hour change of mind BA. From my point of view I highly doubt that for an extra $10m (for example) they would change their business model to accommodate the A380, which they will not fill and be a burden on their bottom line.

• 32. FleetBuzz Editorial.com  |  June 3rd, 2009 at 19:13

  

  “The debates here on the Editorial have been a delight to read”
  Have they?

  Yep - otherwise you wouldn’t be back here discussing it. Point proven

  “British Airways executives being among the most sceptical that such milestones can be reached”
  Can you provide a link to that?

  Unable to provide a “link” to a private set of discussions with their executives I am afraid.

  Last I heard they will be getting ‘E’ versions with quite a few improvements.

  Pity then that British Airways know nothing about it

• 33. B380  |  June 3rd, 2009 at 19:17

  

  PaulaK,
  “Airbus is indeed shipping out A380’s at any price to prevent 747 sales.”
  I thought the popular belief was that Boeing was developing the 748 to prevent the A380 sales or at the very least reduce the margins to 0%?

• 34. Paula K  |  June 3rd, 2009 at 19:25

  

  I thought the popular belief was that Boeing was developing the 748 to prevent the A380 sales or at the very least reduce the margins to 0%?

  Could be - both jets seem to have done a “good job” at stifling the others sales.

  I don’t expect that this downturn will do either jets any favours and may even push the likes of the 747i to the death bed. It happened to the 747SP and A340-200, may happen again.

• 35. B380  |  June 3rd, 2009 at 19:29

  

  “Yep - otherwise you wouldn’t be back here discussing it. Point proven”

  I have been back to ask you to write something interesting. Point disproven.

  Pity then that British Airways know nothing about it

  “British Airways and Emirates will take delivery of an improved version of the Airbus A380 from 2012″
  http://www.flightglobal.com/articles/2009/05/14/326544/british-airways-and-emirates-will-be-first-for-new-longer-range.html

• 36. FleetBuzz Editorial.com  |  June 3rd, 2009 at 19:34

  

  B380 -

  This model will have the excess weight removed, thus providing the longer range/increased payload - a far cry from the proposed “E” or A380-800R version.

  

• 37. MPTA-098  |  June 3rd, 2009 at 19:52

  

  FleetBuzz Editorial.com: “Pity then that British Airways know nothing about it”

  Actually, the E-version should exceed the non-HGW version of the A345 in range.

  Range for A345: 8500/8650 nm
  Range for A345HGW: 9000 nm

  Range for A388E: 8600 nm (estimated)

  For example, SQ could substitute the E-version for the A345 and fly the LAX/JFK routes with around 420-450 pax in three classes for “only” an additional 45 percent (estimated) fuel burn over the A345, or BA can fly the E-version with more payload or less fuel burn than the versions that’s coming off the production line. However, the extra range capabilty is not needed by BA on any of their routes, as you should know!

• 38. B380  |  June 3rd, 2009 at 19:53

  

  Indeed, it was my mistake, the big ‘E’ will come later. Still, improvements are incrementally introduced
  “This model will have the excess weight removed, thus providing the longer range/increased payload”
  Can’t be bad, can it?

• 39. MPTA-098  |  June 3rd, 2009 at 20:02

  

  “This model will have the excess weight removed, thus providing the longer range/increased payload - a far cry from the proposed “E” or A380-800R version.”

  Importantly, that extra “excess” weight did not reduce the payload/range capability contractually guaranteed to the customers. Also, you forgot to mention an additional enhanced engine improvement package for both the Trent-900 and the GP7200 which will come online for the “E-version”.

• 40. boeing investor  |  June 3rd, 2009 at 20:15

  

  MPTA (#39)

  Do you think these improvements would perhaps enable Airbus to reconsider a freighter?

• 41. Jacobin777  |  June 3rd, 2009 at 20:18

  

  MPTA-098 states :”At least I know that Heathrow and Gatwick are severly slot constrained and Stanstead is getting slot constrained. For this reason, LHR is, and will remain the number one VLA airport in the world for at least the next couple of decades (ahead of HKG, DXB, NRT and SIN).”

  Despite LHR being “VLA heaven”, LHR has seen a decreasing amount of VLAs the past few years. Widebody twins and larger B73NG/A32X have seen an increase.

  Mr. Wallace, its nice to see your brought up 2000 prices for the A380. When I (and other posters) would bring up the price a carrier such as QF paid for the A380 on the other forum, I would get “dissed”. What people don’t realise is that while the A380 might be $300 million in 2007, it was well below that in 2000.

• 42. Vero Venia  |  June 3rd, 2009 at 20:25

  

  36. FleetBuzz Editorial.com | June 3rd, 2009 at 19:34 said, “This model will have the excess weight removed, thus providing the longer range/increased payload - a far cry from the proposed “E” or A380-800R version.”

  The link provided by B380 says, “British Airways and Emirates will take delivery of an improved version of the Airbus A380 from 2012 offering a slightly better payload/range performance through a modest increase in maximum take-off weight.” (emphasis added)
  So the modest range increase is obtained by a modest take-off weight increase.
  http://www.flightglobal.com/articles/2009/05/14/326544/british-airways-and-emirates-will-be-first-for-new-longer-range.html

• 43. Vero Venia  |  June 3rd, 2009 at 21:05

  

  Heck! I missed a very interesting comment in the link given by B380.

  http://www.flightglobal.com/articles/2009/05/14/326544/british-airways-and-emirates-will-be-first-for-new-longer-range.html
  Quote:
  “The increased weight version, which is not a new “-800R” type variant, says Carcaillet, will be introduced with a new build standard in 2012. He adds that the performance gain came from a requirement for a couple of customers during sales campaigns against the Boeing 747-8I. BA and Emirates will be the first to receive the upgraded aircraft, in 2012.” (emphasis added).

  The article was written on 14/05/09. I thought Emirates and British airways already made their choice.
  Is there still a remote possibility that Emirates converts some -8F to -8I? Hmmmm …

• 44. MPTA-098  |  June 3rd, 2009 at 21:15

  

  boeing investor: “Do you think these improvements would perhaps enable Airbus to reconsider a freighter?”

  Perhaps, but I don’t see a freighter version coming online until after the A389, and possibly that it too would be outfitted with Trent-XWBs. If Airbus also decided to develop a 85-89 meter long (Trent-XWB-powered) A380-1000 with 8300/8500 nm range and a MTOW at 635-650 metric tonnes, I would expect the business case for an A380-900F would trump that of the discontinued A388F; payload exceeding 200T and a MTOW of around 650T, and with the same range as the discontinued A388F. Keep in mind that the MTOW of the A380 with an additional centre double bogey landing gear assembly can grow to a theoretical 750 metric tonnes, so there’s plenty of growth potential build into that basic frame.

  Jacobin777: “Despite LHR being “VLA heaven”, LHR has seen a decreasing amount of VLAs the past few years. Widebody twins and larger B73NG/A32X have seen an increase.”

  I don’t deny, of course, that the number of widebody twins at (for example) LHR has significantly increased since the dawn of ETOPS-operations. However, this increase is also partly due to the sheer increase in traffic, and as I’ve indicated in an earlier comment, I believe one shouldn’t count the 747-100/200 as VLAs if not both the 777-300ER and A340-600 are included as they have significantly better payload/range capabilities, with the 74-2/3 having only marginally more passenger seating capacity. Even the 747-400 only has about 13 percent more cabin floor area than the 77W, while the 77W has about 18 percent more available floor area than the 77E/L.

  Perhaps, if you included the A346, 77W, 74-2/3 and even the 744 in that VLA definition of yours — which seems to be reasonable — and put the 76-2/3/4, A306, A313, A33-2/3, A34-2/3/5, 777, and 77E/L in that “small” and intermediate widebody category, Heathrow would still remain a “VLA-heaven”?

• 45. Francoise  |  June 3rd, 2009 at 21:17

  

  Vero Venia - I would be more concerned to see l’Emirat convert their A380 orders to perhaps 747I’s.

  http://www.aeroweb-fr.net/

• 46. Vero Venia  |  June 3rd, 2009 at 21:33

  

  45. Francoise | June 3rd, 2009 at 21:17 said, “I would be more concerned to see l’Emirat convert their A380 orders to perhaps 747I’s.”

  How can they do that?

• 47. B380  |  June 3rd, 2009 at 21:56

  

  Vero,
  “The article was written on 14/05/09. I thought Emirates and British airways already made their choice.”

  I don’t think there is necessarily a correlation between now and the campaigns the A380 had against the B748I. Perhaps that is really what swayed BA in the direction of the A380, Airbus offered an improved model.

• 48. Chris Wallace  |  June 3rd, 2009 at 22:24

  

  B380: Currently (after the revision) the plan is to reach rate 3.4 by the end of 2011. So that makes it around 36/year. I would guess 45 will be reached by end of 2013-14, at the latest.

  Spirit Aerosystems had their Investors Conference today. They noted that their planned production rate through 2015 for A380 shipsets is moving from one per month to two per month. Now, unless Airbus plans to deliver A380s that don’t have inboard fixed leading edges and engine pylon brackets / retention jacks, I imagine that those ramps are, in fact, not forthcoming.

  MPTA-098: For example, SQ could substitute the E-version for the A345 and fly the LAX/JFK routes with around 420-450 pax in three classes for “only” an additional 45 percent (estimated) fuel burn over the A345.

  Unfortunately, SQ can’t even find 100 passengers to fly this route at the moment, so any more seems unlikely. If they had, they would have moved to the 777-200LR which would have allowed a significant passenger seating increase on the route.

• 49. Vero Venia  |  June 3rd, 2009 at 23:37

  

  31. B380 | June 3rd, 2009 at 19:06 said, “This A380 story has been milked to death here. Honestly, I don’t want to know anymore. Can you please try and change the story.”

  I agree. The VLA story has been discussed lengthily, everything has been said.

  So what can we do now? It seems it is time to wait and see how the market evolves.

  The next bet can be on who will be the first to pull the plug.

• 50. Leelaw  |  June 4th, 2009 at 06:34

  

  “The next bet can be on who will be the first to pull the plug.”

  FWIW, an “old mandarin” of the aircraft leasing, at whose knee the once mighty Udvar-Hazy learned the business, recently told me he thinks the OEMs we will be out of the business of manufacturing VLAs by the end of 2016 at the very latest.

• 51. ikkeman  |  June 4th, 2009 at 07:39

  

  48. Chris Wallace | June 3rd, 2009 at 22:24
  you know as well as I that production rates can be adjusted in mere months - up or down.

  50. Leelaw | June 4th, 2009 at 06:34
  I’d say that comment seems very unlikely to become reality. Maybe it depends on your definition of VLA… Did he mean the 380/748 will not be considered VLA anymore in 7 years time?

• 52. chaser  |  June 4th, 2009 at 07:57

  

  Maybe the “Old Mandarin” has as much current knowledge of the industry as McVitie, who should have stayed with baking biscuits instead of bitching about his previous employer.
  “Hell hath no fury like a woman scorned”. But the biscuits are pretty good.

• 53. Vero Venia  |  June 4th, 2009 at 08:40

  

  51. ikkeman | June 4th, 2009 at 07:39 said, “you know as well as I that production rates can be adjusted in mere months - up or down.”

  When I was a student several years ago, a lecturer told us that the biggest issue about production ramp up was supply chain management.

  He added that an important issue about ramping down production was “inventory” (and the financial consequences) for the whole supply chain.

  Someone else told me that in commercial aviation industry the lead time for part production can be as long as 24 months ahead of the planned delivery.

  So, maybe ramping up or ramping down production is not as easy as you suggested.

• 54. Leelaw  |  June 4th, 2009 at 09:36

  

  Those with a bent for digging for ponies in the ever increasing VLA manure pile may want to take heed of the “Old Mandarin’s” forecast, since he told me right after the what many were hailing as UPS’s “breakthrough” order for the “WhaleBus[t]” Freighter that Airbus would cancel the program before the first pax plane was ever delivered. I must admit that at the time I felt he may be losing his grip…silly me.

• 55. ikkeman  |  June 4th, 2009 at 11:35

  

  53. Vero Venia | June 4th, 2009 at 08:40
  That would be why the announced production adjustments only take effect after a long delay - see the proposed in effect dates of the latest alterations:
  http://www.flightglobal.com/articles/2009/05/14/326415/airbus-single-aisle-output-could-revive-next-year.html
  announced before 14 May, takes effect October.
  I’ll clarify, I meant production targets can be adjusted in mere months (since Chris was talking about an announcement by Spirit)
  Also, Inboard fixed leading edges don’t seem like very long lead items to me - the engine pylon brackets might be different if they’re connected to the engine support structure. Not if they’re the fairing support structure.
  There’s still much more than 24 months to 2015…

  54. Leelaw | June 4th, 2009 at 09:36
  As I’m in no danger of being mistaken for an “old mandarin”, I’ll take the youthfull stance: those that blindly follow those that came before would never have invented the light bulb (What do you mean, a candle is not good enough?)

• 56. MPTA-098  |  June 4th, 2009 at 12:30

  

  Chris Wallace: “Spirit Aerosystems had their Investors Conference today. They noted that their planned production rate through 2015 for A380 shipsets is moving from one per month to two per month. Now, unless Airbus plans to deliver A380s that don’t have inboard fixed leading edges and engine pylon brackets / retention jacks, I imagine that those ramps are, in fact, not forthcoming”

  They said no such thing. In fact, they plan to ship 230 (A380) units as indicated by the current blocks (see below) by mid 2015 which squares well with my estimated cumulative A380 delivery quantity in comment number 10 (i.e. Spirit will typically ship the inboard fixed leading edges and engine pylon brackets/retention jacksunits to Airbus between 9 and 12 months before final delivery of the aircraft.

  Link:
  http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzQwMTc4fENoaWxkSUQ9MzI1NzU0fFR5cGU9MQ==&t=1

  On page 17 you’ll find:

  Spirit Aerosystem’s June 2009 Forecasted Production Rates:

  787 and A380: Increasing
  737, A320, and A330/340: Stable
  777: Moderating (i.e. going down)

  On page 89, you’ll find:

  Current Block Monthly Production Rates
  A380: Start <1; Current 1-2; Average 2,1

  Please read carefully: Average volumes in current block largely below or consistent with current production levels.

  NB: Do note that they’re using the word CURRENT!

  On page page 88, you’ll find:

  Current Blocks:

  -787: 500 units, 100 months duration and end point in mid 2015.
  -A380: 230 units, 110 months duration and end point in mid 2015.

  Planning blocks:

  -787: 250 units and 23-27 months duration.
  -A380: 100 units and 24-34 months duration.

  Chris Wallace: “Unfortunately, SQ can’t even find 100 passengers to fly this route at the moment, so any more seems unlikely. If they had, they would have moved to the 777-200LR which would have allowed a significant passenger seating increase on the route.”

  With all due respect, this is a somewhat disengenious statement. Those 100 seats are all business class, and until last year, SQ’s A345s had a seating capacity of 64 in C and 117 in Y+. At the time, business class on the LAX/JFK routes had very high load factors, while the Y+ load factors had been disappointing for SQ. In fact, the A345 was the only aicraft in SQ’s fleet to have Y+ seating, and 117 was just too many. Compare, for example, how many Y+ (W) seats Qantas has installed on their A388s (32). Although, the 77L has better payload/range capability than the A345, do note that the 77L is also 4 meters shorter than the A345. Unless you want to put three seets in the middle business class on ULR routes, I can’t see how a 77L could comfortably carry “many” more passengers than the A345 on these ULR routes.

  Now, as for the improved A380 version that’s coming online in 2012 — Yes, I’m calling this the E-version — it’s not unlikely that SQ would want to use these improved models for their direct routes to North America. If indeed this is the case, I’d expect SQ not to change the seating configuration in the premium classes, but I would expect them increasing pitch from 32 to 34 inches in Y and put, let’s say, 40 Y+ seats on the fron of the main deck (behind R-class). By not putting the Y+ class on the upper deck, economy class passengers would still be able to use the aft staicase to excersize.

  Possible SQ A380 seating configuration on ULR flights from 2012 and onwards:

  12R
  60J
  40Y+
  311Y

  Total: 423 seats

  Conclusion: For “only” about an 45 percent increase in fuel burn, SQ could replace the A345 on the routes to LAX and JFK in 2012, with the slightly improved A388 (E-) model, and which is likely to become at least as capable range-wise, as the initial A345.

• 57. Leelaw  |  June 4th, 2009 at 13:01

  

  Ikkeman:

  Your reply reminds me of the Greek proverb where the smug Grandson admonishes his vintner Grandfather: “come Grandpa, let me show you your vineyards.”

  The “Old Mandarin” is more realist than Luddite.

• 58. Leelaw  |  June 4th, 2009 at 14:19

  

  Apparently the most fatuous Airbusiers have dropped the wet dream of a “re-skinned”/”re-engined” A340 in favor of equally unlikely follow-on versions of the “WhaleBus[t].” Sheesh, talk about throwing a few billion more into the “Black Hole of Toulouse” when they already have nary a pot to pee in.

• 59. boeing investor  |  June 4th, 2009 at 14:52

  

  “I can’t see how a 77L could comfortably carry “many” more passengers than the A345 on these ULR routes.”

  Ask Emirates.

• 60. Chris Wallace  |  June 4th, 2009 at 15:01

  

  SQ went with a Premium Economy cabin on the A340-500 because that is the only way an A340-500 can do that mission, MPTA-098. This meant higher Economy Class fares and most people decided the extra comfort and time savings were not worth it and instead flew to NRT on a 747 and then on to SIN.

  The 777-200LR could take normal Economy Class seating in a higher density. Yes, it would have been less comfortable then Premium Economy on the A345, but it would have brought lower CASM and trip costs which would have lowered fares which generally leads to increased demand. And it would have been more comfortable then the 747 and would have burned less fuel then the A340-500. And yet SQ could not see enough traffic boost with a 77L to overcome the costs of buying and operating a new sub-model of 777.

  The plain fact is that ULR operations just aren’t economically viable. Yes, SQ could fly four times as many people for twice the cost, but you would still be looking at higher fares compared to connecting at NRT which is going to depress demand for most of those Economy seats, leading to a plane flying significantly empty.

• 61. ikkeman  |  June 4th, 2009 at 15:08

  

  as my professor was fond of quoting: “Old age and cunning will always triumph over youth and enthousiasm”
  

• 62. Dougloid  |  June 4th, 2009 at 17:40

  

  ikkeman sez “as my professor was fond of quoting: “Old age and cunning will always triumph over youth and enthousiasm”
  :-)”

  Funny. My crew chief used to say that old age and deceit would triumph over youth and good looks every time. Do you think he and your prof were pals?

  Vero Venia sez: “Someone else told me that in commercial aviation industry the lead time for part production can be as long as 24 months ahead of the planned delivery.”

  It’s true. We called ‘em “long lead” items at DAC and some were more than 36 months.

  B380 sez “This A380 story has been milked to death here. Honestly, I don’t want to know anymore. Can you please try and change the story.”

  The Bard saith “the lady doth protest too much, methinks.” Hamlet, Act 3, scene 2.

• 63. MPTA-098  |  June 4th, 2009 at 18:19

  

  boeing investor, DXB-LAX is around 700 km shorter than LAX-SIN — which btw is a route where the aircraft is facing strong headwinds flying back to Singapore — and around 1900 km shorter than SIN-JFK. So, EK’s ULR routes are not a true like-for-like comparison. However, I don’t deny, of course, that the 77L is a more capable aircraft, but my point was more centred around passenger comfort. Having flown for almost 19 hours non-stop on the A345 from EWR to SIN in Y+, I was glad at the time that I wasn’t stuck for that long in a 17-inch wide seat à la the typical EK 777 Y-seat.

  Chris Wallace: “SQ went with a Premium Economy cabin on the A340-500 because that is the only way an A340-500 can do that mission, MPTA-098. This meant higher Economy Class fares and most people decided the extra comfort and time savings were not worth it and instead flew to NRT on a 747 and then on to SIN.”

  Sure, it was known from the time SQ ordered the A345 that the performance on these routes would be marginal at best, and I did indicate in my previous comment that as the A345 was the only aircraft in SQ’s fleet to have Y+ seating; 117 was just too many (i.e. a typical airliner Y+ configuration is in the 30-40 seat range).

  Interestingly though, SQ chose to install as many as 64 relatively heavy business class seats, which is significantly more than what is typical for an aircraft of this size. Also, if SQ was using the A345HGW instead, still there would only space for an additional 150 Y seats (”generous” 34 inch pitch) instead of the 117 Y+ seats originally installed. Compare this with SQ’s 77W, where there’s 8 seats in F, and only 42 (significantly ligther) business class seats installed.

  Finally, I agree that the economics of ULR operations today are marginal at best. However, I would not bet on that this would still be the case a decade hence.

• 64. B380  |  June 4th, 2009 at 18:23

  

  Chris, reply (48):
  “I imagine that those ramps are, in fact, not forthcoming.”
  That may well be your belief but they are coming. The A380 will be ramping up beyond the 2/month you are forecasting to 3.4 by end of 2011. My personal expectation is 230-40 deliveries up to and including 2015, by when rate 4/month will be established.

  “unless Airbus plans to deliver A380s that don’t have inboard fixed leading edges…”
  No, Airbus will deliver fully assembled aircraft

  On a side note, SIA got their 8th A380 (MSN019) today, delivery flight took off this morning from Toulouse. In fact the delivery was planned for mid June but SIA made strong representation to Airbus for an early delivery.

• 65. Vero Venia  |  June 4th, 2009 at 18:35

  

  64. B380 | June 4th, 2009 at 18:23 said, “On a side note, SIA got their 8th A380 (MSN019) today, delivery flight took off this morning from Toulouse. In fact the delivery was planned for mid June but SIA made strong representation to Airbus for an early delivery.”

  That’s a very good news from A380. It seems the production issues are now over.
  This aircraft must be the third of the year.

• 66. B380  |  June 4th, 2009 at 18:51

  

  Vero, I wouldn’t say the production issues are over but the reduction in deliveries this year will help the manufacturing to iron out the issues. It is indeed the 3rd delivery this year.

• 67. Chris Wallace  |  June 4th, 2009 at 18:51

  

  The issue with a 44 frame A380 annual delivery rate is that Airbus needs to sell 44 frames a year. Every year since 2001, Airbus has sold less then 44 A380s per year. And they’ve only had two years that could support a ~30 frame annual delivery rate.

  Now I understand that hope springs eternal for some, but we’ve just been through the largest commercial airline ordering boom in history and the A380 and 747 both fared rather poorly. They were hard-pressed to compete against smaller and more efficient airliners on too many routes and even more efficient airliners are coming from both companies that will continue to depress sales. Airbus understands the A350-1000XWB weakens the case for the A380-800.

  Yes, Airbus and Boeing can adjust the rate to customer demand, but they have to also weigh that against the backlogs and how long they wish - or can afford - to keep the lines running

• 68. B380  |  June 4th, 2009 at 19:49

  

  “we’ve just been through the largest commercial airline ordering boom in history”
  We have been and will be through another one in the future. Some believe that it hasn’t been the A380’s turn yet. Between the pro and anti A380 crowd it can only be settled with a boxing match now
  My personal opinion is we will see significant orders from 2011.
  Never the less, the manufacturing plan stands as described.

• 69. B380  |  June 4th, 2009 at 19:55

  

  United are on the hunt for some new hardware, I hear. Maybe, just maybe they will bite

• 70. Vero Venia  |  June 4th, 2009 at 20:16

  

  66. B380 | June 4th, 2009 at 18:51 said, “They were hard-pressed to compete against smaller and more efficient airliners on too many routes and even more efficient airliners are coming from both companies that will continue to depress sales.”

  The competition is not only due to the efficiency of smaller airliners.
  Those widebodies must also “compete” for financial resources. Airlines can’t take deliveries of 787/A350/A330/747-8i/A380 at the same time.
  They will have to make an arbitration because financial resources are limited. There will be different choices depending on airlines’ various business model or policy.

• 71. Chris Wallace  |  June 4th, 2009 at 20:24

  

  Well it’s still early. Airbus has lowered A380 delivery targets every year, so I expect next year they will revise it yet again and will yet again push out the four per month delivery rate date. As long as they don’t get their suppliers to actually commit to meeting it, it costs them nothing to be bullish and support a fictional future number.

  I’ve flown in the A380 and I really like it. I wish I could fly it from SEA to SFO or to ORD. But the plane just isn’t economically viable on such a route. And it’s not economically viable on far more routes then Airbus would like the public to believe. Airbus’ projections were dead wrong. So were Boeing’s, for that matter. I firmly believe we will not see 50 independent daily A380 movements at each of the world’s top 20 airports, which would be required to support 1000 sales. I doubt LHR will see 50 independent daily A380 movements, and it will see more then any other airport for at least another decade.

  As for United, I think they can use the A380 if they do some rationalization on connections to have their main international hubs as NRT, SFO, ORD, IAD and FRA to support a fleet of around 20. Everything else will likely be A350s (all three models).

• 72. B380  |  June 4th, 2009 at 21:15

  

  “Everything else will likely be A350s (all three models)”
  I think the strongest model Airbus has is the A359. UA should get that and either side of it 789 and 77W.

  A 20 order for the A380 would be welcome but still a big surprise. If Johnny can do his magic, it will be a major breakthrough for Airbus. Certainly, no less than the BA deal, in my opinion.

• 73. Paulo M  |  June 4th, 2009 at 23:22

  

  I don’t think there’s any question that the Boeing 747-8 Intercontinental will be a more fuel-efficient and cheaper aircraft to operate than that bloody big awesome Airbus A380-800. I think Boeing will get what it wants there - citing the 777-300ER as the prime example - but lets not forget the 737NG.

  The only question is by how much. And that is what make or break 747-8I sales.

  Because of the stretch, the aircraft is simply at its most efficient state. Boeing “says” that even the 747-400 is “structurally more efficient” than the A380-800 - and that the stretched (or base model - whichever way you like to look at it) -900 will match the 747-400 - for structural efficiency (not economics obviously).

  And pricing? Wasn’t Boeing selling the 777-300ER for considerably more than A340-600 - before they won the market - because they believed in their product, market valuations of leased aircraft, residual values, and had a commitment to employees and shareholders? Quality is cheap!

  I think it was Phil Condit who said something along these lines: “Let’s see who makes more money.” - Thereby moving the goalposts away from total aircraft sales.

• 74. Leelaw  |  June 5th, 2009 at 01:15

  

  “If Johnny can do his magic, it will be a major breakthrough for Airbus.”

  The only way he turns that trick is through yet another low or no margin deal. My god, how the Airbusiers can continue to look fawningly upon absolute hacks like Leahy (and his chief enabler Forgeard) who managed to build a financial shambles upon solid foundation they inherited from their predecessors is mindboggling. Boeing can only hope that the disasterous policies which recklessly squandered in less than 10 years most of a patrimony meticulously nurtured/accumulated over more than 30 years are continued.

• 75. chaser  |  June 5th, 2009 at 01:17

  

  Could be some early delivery slots for A380 if ILFC cancel their order in 2010, which looks a possibility.

• 76. Dougloid  |  June 5th, 2009 at 04:56

  

  B380 sez “unless Airbus plans to deliver A380s that don’t have inboard fixed leading edges…”
  No, Airbus will deliver fully assembled aircraft

  On a side note, SIA got their 8th A380 (MSN019) today, delivery flight took off this morning from Toulouse. In fact the delivery was planned for mid June but SIA made strong representation to Airbus for an early delivery.

  B380, weren’t you the guy who said the following not long ago:

  “This A380 story has been milked to death here. Honestly, I don’t want to know anymore. Can you please try and change the story.”

  So what’s it gonna be? I think the li’l feller don’t know which way to turn, which is allus the case when me and Jed and Zeke done treed a raccoon.

• 77. Leelaw  |  June 5th, 2009 at 05:40

  

  “]Could be some early delivery slots for A380 if ILFC cancel their order in 2010, which looks a possibility”

  Udvar-Hazy deferred the delivery of his first ‘WhaleBus[t]‘ until 2013 way back in ‘06, before the A380 program was completely moribund. At the current rate of production those slots are now some years away in the queue.

• 78. B380  |  June 5th, 2009 at 06:41

  

  Dougloid,
  “So what’s it gonna be?”
  My point is that the countless arguments of what the future market outlook holds and how that affects the A380, has been discussed to death, several times over. I thought about providing some latest delivery news. If you are not interested in that, you can skip my post.

• 79. Vero Venia  |  June 5th, 2009 at 08:25

  

  69. B380 | June 4th, 2009 at 19:55 said, “United are on the hunt for some new hardware, I hear. Maybe, just maybe they will bite :-)”

  This one will be a very interesting contest.

  They will have to switch from PW to GE or RR.

  Their A320 are powered by IAE (PW, RR, Japanese aero engines and MTU)

• 80. B380  |  June 5th, 2009 at 11:20

  

  Vero,
  I thought the GP engine is the joint venture between PW and GE?

  74. Leelaw:
  “My god, how the Airbusiers can continue to look fawningly upon absolute hacks like Leahy”
  No need to bring God into this
  It is so funny how the anti-Airbusiers view Leahy, he seems to fill their eyes with blood like a bull staring at a bull fighter. What I like about him is his charisma, unlike his counterparts in Boeing, first Bright, then Carson and then this new Randy guy, ‘boring’ if I can sum up in one word. Leahy is certainly one of a kind. There is no question that he has his ‘foot-in-mouth moments but there is also no question that he has been the most successful salesman for Airbus.

  “managed to build a financial shambles upon solid foundation”
  That I disagree with. The financial shambles that befell Airbus were a direct result of the mismanagement of the A380 design (mistakes) and production (correcting those mistakes). It is hardly the fault of the salesman. I put a comparison of the margins achieved in the years predating the A380 losses (2007), a few articles ago. That is my guide to see how badly the deals were put together. From what I can see, Airbus had better margins than Boeing, especially coming out of the last downturn post 9/11, where they were greater by a factor of 2.5. Love him or loath him… the guy walks the walk (and certainly talks the talk, to the annoyance of some).
  You can download all the financial documents for the last 10 years and have your own comparison.

  “Boeing can only hope that the disasterous policies which recklessly squandered in less than 10 years most of a patrimony meticulously nurtured/accumulated over more than 30 years are continued.”
  I think Boeing have their own problems to worry about…

• 81. Vero Venia  |  June 5th, 2009 at 12:43

  

  80. B380 | June 5th, 2009 at 11:20 said, “I thought the GP engine is the joint venture between PW and GE?”

  I’m sorry for the confusion.
  I wanted to say that currently United’s widebody fleet is powered by PW. Since there is no PW engine on the latest widebodies they will have to choose another engine supplier.

  There are three aircraft with only one engine type in United’s possible choice: 777-300ER(GE), A350(RR) and 747-8i(GE).

  The others have two possible engines: 787(RR/GE), A380(RR/GP).

  As far as the 757 replacement is concerned, it can be A321(IAE/CFM) or 737-900ER(CFM) or 787-8(RR/GE)

  So, I suspect United’s aircraft selection process will be very exciting. I don’t expect any deal before 2010.

• 82. Leelaw  |  June 5th, 2009 at 13:14

  

  The cult of Leahy amongst the more fatuous busboys is baffling, for the most part they are quick to sneer at most things American, but when it comes to the vicar of the very worst aspects of American “hucksterism,” whose policies have resulted in Airbus having a ZERO enterprise value according to European financial markets, they can’t get enough. BTW, “Power 8″ needed to address a lot more than the “WhaleBus[t]” meltdown, “Forgeard’s Folly” merely hastened the revelation that “Empress Airbus” had no clothes.

  IMO, finding solace in the equally uninspiring leadership at the Boeing Bete Noire is a childish rationalization.

• 83. keesje  |  June 5th, 2009 at 14:24

  

  Leelaw, you should spend a few days at Airbus. You’ll see shiny light production lines, young employees and high tech production systems. Unlike another major passenger OEM. You have to see to believe.

  Airbus took over as the dominant civil producer some yrs ago. First being ignored, down played, ridiculed.

  After capturing their share of the market with advanced and popular products many US friends seem to have addopted the believe it must be somehow unfair. Who do Airbus think they are being so succesfull ?

  http://img.thesun.co.uk/multimedia/archive/00392/SNN22GX3AA_384_392813a.jpg

  Well maybe Obama can become president of Boeing too and save the day. Starting with a badly needed 747-8i order for the POS.

  

• 84. Dougloid  |  June 5th, 2009 at 17:04

  

  “http://img.thesun.co.uk/multimedia/archive/00392/SNN22GX3AA_384_392813a.jpg

  Well maybe Obama can become president of Boeing too and save the day. Starting with a badly needed 747-8i order for the POS.”

  Are you as childish as you sound, Keez?

  B380 sez: “My point is that the countless arguments of what the future market outlook holds and how that affects the A380, has been discussed to death, several times over. I thought about providing some latest delivery news. If you are not interested in that, you can skip my post.”

  You can’t have it both ways. If that’s what you want I suggest that you and the keezer head on back to a.net where there are moderators-otherwise known as professional cowards- you can whinge at.

• 85. B380  |  June 5th, 2009 at 19:20

  

  82. Leelaw
  “quick to sneer at most things American”
  Nonsense, maybe your wishful thinking.

  The rest of the post is just the usual noise….

  84. Dougloid
  “You can’t have it both ways.”
  No, I can’t, hence I am not getting into the discussions of the future market numbers (who is right and who is wrong), existent or non-existent business case, European ego and all the rest of it. There has been enough said already, if not too much.

  “If that’s what you want I suggest that you and the keezer head on back to a.net where there are moderators”
  What’s that got to do with anything? In reply [31], I said “Can you please try and change the story. My suggestion, get somebody from Boeing to talk about the 787 testing.” I have not complained about moderation, simply noted that we can get onto a different subject. You should read my posts a bit more carefully. You obviously had a bad experience on the a.net, no need to bring me into it.

• 86. Leelaw  |  June 6th, 2009 at 06:08

  

  Keesje:

  I’ve been through all the OEM final assembly facilities at one time or another, including those formerly at Fokker. The workers at both Airbus and EMBRAER are indeed younger and more smartly turned out, otherwise these places are uniformly awe inspiring. I must admit that your constant fascination with “shiny” things makes me wonder whether you don’t resemble Hume Cronyn’s character in the film “Marvin’s Room.”

  “The rest of the post is just the usual noise….”

  A cheeky comment indeed considering the volume of pro-Airbus smegma you regularly litter upon this site.

• 87. boeing investor  |  June 6th, 2009 at 10:10

  

  Keesje, as I politely asked in comment #7, please bring forth evidence of the huge discounts you claim Boeing has been offering.

  Thanks

• 88. ikkeman  |  June 6th, 2009 at 10:48

  

  87. boeing investor | June 6th, 2009 at 10:10

  Sorry, can’t quite retrieve the link - hopefully Mr Venia still has it.
  let’s assume discounts of up to 35% are normal in the large commercial aviation market. launch customers (and second customers) get more.
  Whether you call that huge or not is a question of opinion and, for some, a matter of who gave the discount…

• 89. B380  |  June 6th, 2009 at 11:11

  

  Investor
  “please bring forth evidence of the huge discounts you claim Boeing has been offering.”
  Is similar evidence that Airbus is giving the planes away for free required? Because that is gospel on this site

  86. Leelaw
  “considering the volume of pro-Airbus smegma you regularly litter upon this site.”
  You clearly missed all the anti-Airbus crap this site is littered with, you are obviously very happy with that…

• 90. boeing investor  |  June 6th, 2009 at 11:11

  

  Ikkeman, doesnt matter what I think makes a huge discount - I was hoping our mutual friend Keesje would perhaps try and put numbers to his claim.

  Then we could try analysing why Boeing still isnt selling the 747-8i.

  

• 91. Vero Venia  |  June 6th, 2009 at 11:48

  

  90. boeing investor | June 6th, 2009 at 11:11 said, “Then we could try analysing why Boeing still isnt selling the 747-8i.”

  Is that the aircraft launched in December 2006?

  http://www.flightglobal.com/articles/2006/12/06/210970/boeing-announces-lufthansa-as-launch-customer-for-747-8-intercontinental-passenger-variant-with.html

  The market for big and very big aircraft is quite small anyway.
  Perhaps they will sell 12 to 15 747-8 intercontinental in 2009 and 2010. It’s an optimistic figure.

• 92. Leelaw  |  June 6th, 2009 at 14:50

  

  I realize this is anathema to the doctrinaire Airbusiers, but isn’t the trendline of EADS share price rather, particuarly in the last year, compelling objective evidence that recent and prospective margins have been “disappointingly low?”

• 93. Chris Wallace  |  June 6th, 2009 at 15:54

  

  Honestly, what’s the fascination with sales price? Is that the only objective the community wishes to use to determine an airplane family’s worth?

  If sales price was the only thing that mattered to an airline, then the A330 and 777 families wouldn’t be nearly as popular as they are because you’d think Boeing would have offered the 767 and Airbus the A340 for super-cheap prices. Airlines buy planes for how much money they will make - not how much money they will cost. A 777 will make them more money then an A340 and an A330 will make them more money then a 767, so those are the planes they buy, even if they cost more.

  It’s no less different with the A380-800 vs. the 747-400. The A388 will make an airline more money over the life of the plane then a 744 which is why airlines have been buying it.

  Yes, Boeing claims great things for the 747-8 and some carriers may be holding off to see how the plane does for LH, but we need to remember that the A380 will only get better over time. So even if a 747-8 ends up being more profitable then a current A380-800, will it be more profitable then an A380-800HGW? An A380-800E? An A380-900? An A380-1000?

  Airlines hold on to planes for decades. They want a family that will grow and improve over those decades to leverage the initial investment they have made in adopting the type.

  By that criteria, the 747 is done. There will not be a 747-8ER. Or a 747-9. Even if Boeing undercut the A380’s price by $50 million per frame, the airline has to ask itself over 20 years, will it make more then that back by operating the A380 family? Chances are it will, so they’re not going to take Boeing up on the deal.

  Boeing will have to come out with an brand-new VLA if they want to compete in the 400+ (real-world) seat market going forward. The 747’s time has passed just as it has for the 707, the 727 and the 757.

  Anyway, the real bloodbath for Boeing and Airbus is the narrowbodies. The 737NG and A320 families are so evenly-matched that you see some pretty crazy deals being made to win business, but the volumes are so high, the production costs are so low they can still make nice coin even with those crazy deals.

• 94. keesje  |  June 6th, 2009 at 16:17

  

  I know price info of one of the many airlines the 747-8i was oofered too but obviously cannot disclose anything. Imagine if I did..

  Boeing itself told the world recently the program is at loss and they are most likely reassessing the 747-8i. Not doing so would be naive.

  Leelaw results and margins have been good for EADS / Airbus in recent yrs and they have money in the bank, as you probably know.

  http://www.airbus.com/en/presscentre/pressreleases/pressreleases_items/09_01_15_2008_results.html

  Agree with Chris Boeing will have to come up with something new in the 350-450 segment. It seems a significant segment. Boeing tried a low cost solution but failed.

  I did a short 2 engine + APTU study and discussion “Ecoliner” a few yrs ago on pprune and a.net with Henry Lam:

  http://www.youtube.com/watch?v=CVWQ5h5UOfk

  Boeing can do it. I think a possible cancellation of the 747-8I and launch of such an aircraft won’t far apart. Boeing has been busy lately so nothing much happenend on the Y3.

• 95. boeing investor  |  June 6th, 2009 at 18:19

  

  Keesje, no one is asking you for specific figures.

  Surely you can placate us by showing a spread of percentage(s) offered.

  Thanks.

• 96. Chris Wallace  |  June 6th, 2009 at 18:37

  

  Keesje: I know price info of one of the many airlines the 747-8i was oofered too but obviously cannot disclose anything. Imagine if I did..

  And I know A380, A350XWB, A330 and A320 deals that would cause your jaw to drop through the floor, Keesje.

  But really, what would making public such deals tell people?

  That every deal goes out like this? If it does, Boeing and Airbus must be the most efficient manufacturers on the planet to be able to recover 5-10% margins. You’d think that instead of them studying other companies to become leaner, companies would be studying Airbus and Boeing

  That Airbus and Boeing make such crappy products their customers just routinely bend them over a table in every deal? You’d think somebody would work hard to offer a better product they could command a premium on. if not Boeing or Airbus, then perhaps the Brazilians, Japanese, Chinese or Russians.

  Even if I wasn’t under NDAs, I wouldn’t post them because it would serve no purpose. It’s why I wish the analysts wouldn’t post what they think the prices are. They may be right. They may be wrong. But either way, all they do is support these silly “schoolyard arguments”.

  Yes, price is an influencer. But it is only that. A low price won’t improve your operating CASM or lower your trip costs. It won’t make the engine burn less fuel or carry more passengers/cargo. When you factor those costs and revenues over two decades, I’m more then confident that they would overwhelm any discount an airframe manufacturer could offer.

• 97. DeepBlue  |  June 6th, 2009 at 20:30

  

  At one point, it looked possible that an updated 747-I would have offered the market place a good flexible product. However, without a direct walkway from the upper deck for premium class passengers to use the ’sky loft’ and following my first experience of the super quiet and roomy A380, I urge Boeing to divert it’s investment into a 777-400. This has to be the best way to reduce airline costs and to and give a mid-life refresh to the 777 everyone is asking for.

• 98. Chris Wallace  |  June 6th, 2009 at 21:11

  

  DeepBlue:I urge Boeing to divert it’s investment into a 777-400. This has to be the best way to reduce airline costs and to and give a mid-life refresh to the 777 everyone is asking for.

  The problem with the “777-400″ is the plane is already pretty much at the limits of MTOW. So a larger, heavier plane would have to trade range for payload.

  You’d likely see range with just pax+bags shrink to under 7000nm and at full payload under 5000nm. It would be an amazing medium-range hub-to-hub plane (a “super A330-300″), but as a long-haul plane, it would probably be worse then a 747-400 in terms of payload and range. It would be more efficient, yes, but…

• 99. Vero Venia  |  June 6th, 2009 at 21:51

  

  98. Chris Wallace | June 6th, 2009 at 21:11 said “The problem with the “777-400″ is the plane is already pretty much at the limits of MTOW. So a larger, heavier plane would have to trade range for payload.”

  There is a room for improvement on the 777.

  Weight can be removed from the 777. Boeing can introduce lighter materials (composite, AL-Li), new wings and new systems.

  A new GEnx based engine at 110 klb will be much more efficient than the current GE90-115 and thus will reduce MTOW significantly.

  The 777-300 can be stretched slightly and the pressure bulkhead can be modified such that 3 more rows of seat can be accommodated.

  With such modifications, the 777-300ER seat count will increase to 389.

  I don’t see the need to do more. It would be a relatively low investment, especially if they keep the metallic fuselage with minor modifications.

  A shorter version of 325 seats can also be done.

  The modified 777, the 787 and the 747-8i are very close to My Dream Fleet (see http://verovenia.wordpress.com/2009/05/18/dreamfleet/ ).

• 100. Leelaw  |  June 7th, 2009 at 02:41

  

  “Leelaw results and margins have been good for EADS / Airbus in recent yrs and they have money in the bank, as you probably know.’

  Margins drive earnings which determines share price. EADS shares have been trading at historic (albeit a relatively short history) lows in recent years. Airbus does indeed has earnings, but they’re not high enough for investors to consider the company as having a positive “enterprise value” as reflected in the price of EADS shares. These are extremely poor indicators for a publicly traded company, even one with large percentage of its ownership held by governments/institutions.

• 101. Jacobin777  |  June 7th, 2009 at 04:41

  

  Perhaps, if you included the A346, 77W, 74-2/3 and even the 744 in that VLA definition of yours — which seems to be reasonable — and put the 76-2/3/4, A306, A313, A33-2/3, A34-2/3/5, 777, and 77E/L in that “small” and intermediate widebody category, Heathrow would still remain a “VLA-heaven”?

  For arguments sake, lets add the A346, B77W into the equation (which isn’t correct as both Airbus and Boeing consider VLA’s to be B744’s and above). B744’s are already considered VLA’s and very few-if any carriers fly B742/B743’s into LHR-even cargo carriers.

  LHR will still not see a majour increase of VLA’s (as per % of total flights. Especially A380’s, B744’s and B748’s.

• 102. Vero Venia  |  June 7th, 2009 at 09:25

  

  101. Jacobin777 | June 7th, 2009 at 04:41 “Perhaps, if you included the A346, 77W, 74-2/3 and even the 744 in that VLA definition of yours — which seems to be reasonable — and put the 76-2/3/4, A306, A313, A33-2/3, A34-2/3/5, 777, and 77E/L in that “small” and intermediate widebody category, Heathrow would still remain a “VLA-heaven”?”

  And you can add A318/A319/A320/A321/737NG as “Micro VLA”.

  Why can’t we call the regional jets as “Nano VLA”?

• 103. Vero Venia  |  June 7th, 2009 at 09:28

  

  100. Leelaw | June 7th, 2009 at 02:41

  You posted the one hundredth message. You won my respect.

• 104. B380  |  June 7th, 2009 at 10:40

  

  96. Chris Wallace -
  Chris, the last paragraph has described precisely the reason why I do not believe that BA has been seduced by an extra X% off the discounted price for the A380. If they are planning to operate the plane for 20 years, that amount will just be lost as noise in the overall costs. BA had to make a strategic decision and if that decision is influenced only by the last minute offer of the X%, then I think the company is headed by the wrong management team.

  100. Leelaw
  “Margins drive earnings which determines share price”
  Sure but there are other reasons. Confidence, for one. Confidence that the company is going in the right direction, confidence in management and confidence that the programmes are executed on time and budget. In the ‘credit crunch’ time, confidence that the airlines will get money from somewhere to pay for those planes and the manufacturers will not face mass cancellations…

• 105. Leelaw  |  June 7th, 2009 at 12:12

  

  Investors lost confidence in the ability of Airbus to be a source of robust earnings and/or earnings growth at EADS long before the onset of the “credit crisis,” before that the excuse was the weak dollar…yada, yada, yada… never are the Forgeard/Leahy low margin/high volume marketing strategy and the WhaleBus[t] fiasco cited as the sources of distress. Empress Airbus, always the innocent victim of circumstance rather than its own moronic leadership.

• 106. keesje  |  June 7th, 2009 at 14:01

  

  Yes. And still they gained market leadership from a 15% market share in the late nineties. Leelaw face it. They must do something right..

  Share price & short term profit driven enterprises hit the wall in an epic way. The economic laws are being redefined.

  Ask your president.

• 107. Leelaw  |  June 7th, 2009 at 14:52

  

  “And still they gained market leadership from a 15% market share in the late nineties. Leelaw face it.”

  To what end, Airbus has a ZERO enterprise value, with no meaningful earnings growth in sight over both the short-term and mid-term. Whatever may be the basis for a turn around over the longer term will have to overcome the considerable financial albatross that is the WhaleBus[t].

  I’m not sure that GM and Chrysler were ever chasing short-term profits, they “invested’ billions in failed capital projects, some of thismoney that could have been returned to shareholders/stakeholders in the form dividends or increased share value, but is now lost forever.

  As for Mr. Obama, he’s a committed “statetist,” as are the eurocrat caretakers of EADS/Airbus, who’s surrounded himself with hack political wastrels plucked from ranks of the obscenely corrupt “Illinois Combine” from which he himself arose. Live in Hope of “change you can believe in,” die in the despair of a trashed dollar and epic governmental waste.

• 108. Chris Wallace  |  June 7th, 2009 at 17:21

  

  Based on BA’s current fleet structure and deployment pattern, I still believe they were leaning towards the 747-8I and Airbus (and their suppliers) were able to sweeten the deal to the point that BA was willing to take a gamble and go with the A380.

  And when I say gamble, I’m not talking “high-risk stakes” or “bet the company” risks.

  But if BA truly has decided they will not buy the 747-8 going forward, then they have made a conscious decision to not grow market-share to a large part of the world. An A380 will never land at SEA or PHX - two cities that see BA 747-400 services. And there are many other city-pairs where BA sends their 55 747-400s that won’t see an A380. So that means BA will be giving up market-share to competitors. And not just airlines, but also cities as connecting traffic bypasses LHR and instead flies to AMS, FRA or CDG on SkyTeam/Star Alliance carriers.

  Such a decision may in fact for BA into Boeing’s arms for the 777-300ER, since it is a larger plane able to carry more people and cargo then the A350-1000XWB. The decision to take four of them may just be the initial tranche of what could end up being dozens or even scores.

• 109. keesje  |  June 7th, 2009 at 20:22

  

  I think most expected BA to order the A380 eventually. Many said it was build for LHR; big, quiet.

  Looking at BA growth during the last 20 yrs (3-5% /yr) it would have been dramatic to select a 10-15% bigger aircraft for the next 25 yrs.

  Only adding more flights could have avoided a drop in market share in many markets. BA flies any routes 1x 747 a day. How to deal with growth?

• 110. boeing investor  |  June 7th, 2009 at 20:42

  

  “Only adding more flights could have avoided a drop in market share in many markets. BA flies any routes 1x 747 a day. How to deal with growth?”

  Growth?

  What growth?

  Did you not see the beautiful double digit drop in the Asia region for BA in their May traffic figures?

  BA is standing down 747-400’s - BA has and always will be frequency driven, not mass market mover.

  The reason are the slots at LHR - to which the A380 adds next to no value.

• 111. keesje  |  June 7th, 2009 at 22:39

  

  Boeing Investor, BA is starting introduction of their A380 fleet from 2012 for the next 25 (?) yrs.

  They dont look to much in this weeks news for these kind of decisions.

  Major competitors like AFKL, LH, SQ and EK have a headstart.

• 112. Chris Wallace  |  June 7th, 2009 at 23:22

  

  The problem, Kessje, is that an A380-only strategy for BA means that they can only grow a handful of cities.

  I don’t begrudge BA buying the A380. I think it makes sense for them in a number of markets.

  But they have 55 747-400s that they send to cities that lack the infrastructure to effectively handle an A380. If BA has decided to not buy the 747-8 and instead replace the other 35 747s with a smaller plane, unless BA can open more frequencies at LHR, they will shrink in those markets, not grow.

  And it is not just O&D traffic to LHR that is at risk. Passengers now flying BA to LHR to connect to other destinations will instead fly LH/UA to FRA, or DL/KL to AMS, or AF to CDG and connect from there.

  But then, perhaps that is BA’s plan. To become a smaller, leaner airline serving the domestic British market through LHR as NH/JL do the Japanese through NRT. They will draw-back from being a major global-spanning EU airline and leave that job to LH.

• 113. Leelaw  |  June 8th, 2009 at 05:44

  

  A more equitable (re)distribution of slots held by the large network operators at slot constrained hub airports would largely obviate the need for
  the expanded use of VLA class aircraft in the mid-term.

• 114. Vero Venia  |  June 8th, 2009 at 09:00

  

  113. Leelaw | June 8th, 2009 at 05:44 “A more equitable (re)distribution of slots held by the large network operators at slot constrained hub airports would largely obviate the need for
  the expanded use of VLA class aircraft in the mid-term.”

  Agree.

  The A380 and the 747-8i are good aircraft. The question is not about the aircraft but it is about the market. The air transport industry is changing in a very dynamic manner.

  Only one year ago, US-EU openskies agreement became effective. http://useu.usmission.gov/Dossiers/Open_Skies/Mar2808_Open_Skies_Accord_In_Force.asp
  Quote:
  Under the Agreement, all U.S. and EU airlines may fly between any point in the EU and any point in the U.S. without restrictions on routes, the number of flights, or prices charged. Already, Aer Lingus is offering non-stop flights from Ireland to Washington, San Francisco, and Orlando that were not authorized under the old U.S.-Ireland agreement. At London’s Heathrow Airport, five new airlines are offering service between the United States and Heathrow: Air France, Continental, Delta, Northwest, and US Airways. At least five additional United States cities will have non-stop service to Heathrow: Atlanta, Dallas, Denver, Houston, and Raleigh. (emphasis added)

  BA is now facing a fierce competition at LHR. Things must change in BA’s long term strategy.

  Other changes are on the way in many places in the world.

  It is time to be Versatile, agile and Flexible.

• 115. Vero Venia  |  June 8th, 2009 at 09:05

  

  IATA’s Giovanni Bisignani delivered this message:
  http://iata.org/pressroom/speeches/2009-06-08-01.htm

  It is very interesting.

• 116. Leelaw  |  June 8th, 2009 at 09:54

  

  Vero Venia :

  I had lunch with the “Old Mandarin” yesterday and his best guesstimate is that cumulative production of each VLA type will be in the 90-120 unit range before the plugs are mercifully pulled, with less likelihood that the 748 will break 100 deliveries.

• 117. keesje  |  June 8th, 2009 at 10:52

  

  Strong indication are Cathay and ANA will order A380 soon, while other carriers (BA) will place follow up orders.

  As far as I’m concerned Boeing will focus on the 747-8F soon. Commenting on the A380 / 747-8 as similar aircraft with similar prospects is total nonsense, maybe an Euphemism for the 8i.

• 118. Vero Venia  |  June 8th, 2009 at 11:14

  

  116. Leelaw | June 8th, 2009 at 09:54

  Your number given by your Old Mandarin is quite conservative.

  For many reasons, of which some are neither rational nor economic, the total combined deliveries of the A380 and the 747-8I may be higher than 300 before the plugs are pulled.

• 119. Vero Venia  |  June 8th, 2009 at 12:20

  

  117. keesje | June 8th, 2009 at 10:52 Commenting on the A380 / 747-8 as similar aircraft with similar prospects is total nonsense,

  They are not similar aircraft, but they have similar prospect: bleak.

• 120. Falcon  |  June 8th, 2009 at 12:20

  

  Leelaw,

  What does more equitable distribution mean to you and why would it change the need for VLAs?

  Did your Old Mandarin give a time frame for when the plug will be pulled?

• 121. Leelaw  |  June 8th, 2009 at 13:25

  

  @ Falcon

  See my earlier replies #50 & 54.

• 122. Falcon  |  June 8th, 2009 at 13:46

  

  Leelaw,

  2016. Thank You. Sorry I missed it.

  What about what equitable distribution means to you and why it changes the need for VLAs?

• 123. ikkeman  |  June 8th, 2009 at 14:07

  

  116. Leelaw | June 8th, 2009 at 09:54

  Whats the logic behind that. You/he thinks both projects will still be cash flow negative in 6 to 9 years? And why stop a program that you make money from, even if it is just a little. Stopping a program won’t magically remove the depth of dept.
  Even the hugely unsuccessful A340, an aircraft without a market thanks tot the 777 and ETOPS, sold and build some 365 units so far.
  747 sold 1400+ units. Most of these (plus 3-5% YoY growth) will be replaced by long range twins. But there is a requirement for big ass quads. Why will no 380 ever visit SEA? is your crystal ball rated for 35-50 years? (or do you simply drive a DeLorean?)

• 124. Aurora  |  June 8th, 2009 at 15:59

  

  Wow! Talk about a “sharp stick in the eye”! Steven Udvar-Hazy speaks out on the possibility of ILFC cancelling the A380 order.
  http://www.capitalfm.co.ke/business/International/US-firm-may-cancel-Airbus-orders-2395.html

  “The leasing giant has noticed “an important change in attitude by airlines regarding the A380″ and found that “interest is weaker than expected in particular among the Chinese,” Udvar-Hazy was quoted as saying.
  Such a huge plane, which can carry up to 853 passengers, cannot operate on as many lines as expected, and is expensive for leasing companies owing to costs involved in making modifications for different clients.
  “If I were Airbus I would be very worried,” said the boss of ILFC, a unit of US insurance group AIG, which was recently nationalised to prevent its bankruptcy.
  “At current production rhythms, it will be very hard to make money with this plane,” he said.”

  And right before the Paris Airshow at that!

• 125. Leelaw  |  June 8th, 2009 at 16:11

  

  @ Ikkeman

  The “Old Mandarin” feels that the completely separate logistical and production infrastructure makes the cost structure prohibitive at low rates of production, without there first having been a ramp-up to a more robust and sustained rate of production, particularly in the case of the A380. In short, low rate of production from the outset is financially crippling given the level of investment. Sorry , I’m traveling today and replying from a phone at the moment, will post more tomorrow.

• 126. keesje  |  June 8th, 2009 at 16:45

  

  I think we have to realize when (prospective) customers are negotiating with Airbus on the a380 special conditions exist, big money & no competition.

  So a smart purchasing teams start explaining Leahy they basicly don’t need the A380 at all.

  http://www.independent.co.uk/news/business/news/ba-chief-hints-he-may-buy-new-boeing-not-airbus-515361.html

  Anyone stating he needs A380s is committing negotiating Harikiri.

  Smart SUH is building up a negotiating position.

  - Steven Udvar-Hazy has a short term cash issue (selling / buying ILFC)
  - 10 A380s is a lot of hard cash
  - Many airlines are deffering aircraft deliveries because of credit crunch & traffic fall
  - Oil is low making it less of a burden to fly with less efficient aircraft (747)

  SUH is preparing negotiations. It shines through.

  Of course everybody is free to forecast far reaching disasters for the A380, as we have seen for years

• 127. Orack Babama  |  June 8th, 2009 at 16:51

  

  Jacbin do you realise the reason why VLA’s in Heathrow have declined is because the Dumbojet is an obsolete and inefficient dinosaur with 50 year old origins. Because A380 was delayed it is natural that Dumbojets were replaced by more efficient and better equipment.

• 128. Erik Bloodaxe  |  June 8th, 2009 at 16:55

  

  Airbus Fanboi Keesje says: “Strong indication are Cathay and ANA will order A380 soon, while other carriers (BA) will place follow up orders.”

  Dude, you have been beating this gong for what 4 years now on aholes.net. It hasn’t happened. It’s not going to happen.

  Cathay isn’t in a position to. They were Hazy’s target for the leases of A380s and guess what???

  ANA MADE their decision. NO A380s, more 777s. ANA is not likely to order either the A380 or the 747.

  So go sing another round of Airbus Uber Alles, drink some more koolaid from the Airbus Chalet, and keep dreaming.

• 129. Aurora  |  June 8th, 2009 at 17:12

  

  keesje: “Smart SUH is building up a negotiating position.”

  So you think he’s going to double down on his order like “smart Chew” or “smart Dixon”?

• 130. Paula K  |  June 8th, 2009 at 20:08

  

  Strong indication are Cathay and ANA will order A380 soon, while other carriers (BA) will place follow up orders.

  Unfortunately this is not the case. CX has deferred 777-300R’s because it cannot fill them, nor have they identified a need for the A380-800.

  ANA will never order the A380. Their route network has also been frequency driven. The last of their cattle-cart 747-400D’s will not be replaced and I suspect its a matter of time before they too, like JAL switch their 787-3 orders to 787-8s.

  As for BA, well, they are in neck deep doo-doo to consider any new orders.

• 131. Chris Wallace  |  June 8th, 2009 at 22:02

  

  If ILFC actually had customers for their A380s, they wouldn’t need to worry about financing them.

  That they appear to not have customers is indeed an issue because why spend over $1 billion on planes that won’t be leaving the factory flight-line?

  Yes, I know a highly-respected member on a.net said NH signed an MoU with Airbus last fall for six A380s. But many more highly-respected members on a.net said it never happened and that was just an NH executive trying to “negotiate through the press”.

  Same with CX. At best, they want an A380-900 (just as SUH does) because it is clearly big enough to actually consolidate multiple 747 or 777 flights onto.

• 132. Leelaw  |  June 8th, 2009 at 23:30

  

  Stitch:

  Who’s the “highly respected” member of A.net made that that claim?

• 133. Leelaw  |  June 8th, 2009 at 23:31

  

  Stitch:

  Who’s the “highly respected” member of A.net made that made that claim?

• 134. Jacobin777  |  June 9th, 2009 at 03:42

  

  @ Orack Babama:

  “Jacbin do you realise the reason why VLA’s in Heathrow have declined is because the Dumbojet is an obsolete and inefficient dinosaur with 50 year old origins. Because A380 was delayed it is natural that Dumbojets were replaced by more efficient and better equipment.”

  I almost laughed (sic) at your silly comment.

• 135. Chris Wallace  |  June 14th, 2009 at 02:12

  

  Leelaw: It was CHRISBA777ER.

• 136. keesje  |  June 16th, 2009 at 14:44

  

  Scrollling over the main page I noticed this :

  “Therefore any carrier which wants new high-capacity aircraft for delivery before 2020 has only one choice — the 747-8 Intercontinental. Reliability, practicality and pragmatism are far more bankable commodities than runaway egos, pet projects and ridiculous pipe-dreams (like 45 A380 deliveries/year by 2010/2011).

  It’s Boeing’s market,” says Doug McVitie, MD at Arran Aerospace. ”

  Honestly, I think its hilarious

• 137. cheesy  |  December 7th, 2009 at 12:33

  

  Are you still laughing keesje?

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