I read an article in a British newspaper in 1975 or so that made the same statement! We are still awaiting the profits from that beautiful plane.David747 wrote:I'm going to save this article from Aboulafia and then printed back here when the A380, not only becomes operational, but makes a profit for Airbus. 8)
New problems for the Airbus A380
Moderator: Latest news team
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smokejumper
- Posts: 1033
- Joined: 21 Oct 2005, 00:00
- Location: Northern Virginia USA
Profit may be very elusive. If the reports are right, customers are paying around 135 million for the plane. That’s pretty desperation pricing, when you consider that they tend to get 20% off of list.
Add into the fact that the latest delay penalties drop that down to about 100 million per aircraft. All those delays of course are adding to the cost of it.
And that assumes that the article is not right and they are covering up other issues under the guise (or while) they work out the wiring problems. A number of small nagging technical issues (and or fuel burn/efficiency that does not meet the specifications and maybe can’t be brought into compliance) can nag you into a technical failure.
Putting the beast into service is hugely expensive, and all those costs are getting no return right now (you have to be ready before it gets to you, not after).
And when all is said and done, keep in mind that all the figures for economics, assume a full airplane. If its only 75% full (not untypical) then you are loosing money.
Of course 75% full A380, means a full 747 (at least theoretically).
I still go back to what JAL did on the European flight. They actually carry fewer passengers on the 777, but as its far more economical, they make a net 12-15% on the route.
Yep, there is room for large capacity aircraft, just not huge numbers of them. When does the market get to the point that Airbus can sell them and start getting some real money out of them. That would mean around 250 million each. So far, no one seems to have paid that price.
Add into the fact that the latest delay penalties drop that down to about 100 million per aircraft. All those delays of course are adding to the cost of it.
And that assumes that the article is not right and they are covering up other issues under the guise (or while) they work out the wiring problems. A number of small nagging technical issues (and or fuel burn/efficiency that does not meet the specifications and maybe can’t be brought into compliance) can nag you into a technical failure.
Putting the beast into service is hugely expensive, and all those costs are getting no return right now (you have to be ready before it gets to you, not after).
And when all is said and done, keep in mind that all the figures for economics, assume a full airplane. If its only 75% full (not untypical) then you are loosing money.
Of course 75% full A380, means a full 747 (at least theoretically).
I still go back to what JAL did on the European flight. They actually carry fewer passengers on the 777, but as its far more economical, they make a net 12-15% on the route.
Yep, there is room for large capacity aircraft, just not huge numbers of them. When does the market get to the point that Airbus can sell them and start getting some real money out of them. That would mean around 250 million each. So far, no one seems to have paid that price.
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keen_watcher
- Posts: 31
- Joined: 23 May 2006, 00:00
A380 problems
Following lines are quoted and posted on PPRUNE today. It seems Airbus is shutting down the Hamburg facilities for quite a while to figure out what are next steps good for the program..
http://www.pprune.org/forums/showthread.php?t=244840
Quote:
"A380 Scheduled Announcement Could Come As Early As Friday
French newspaper LaTribune, citing unidentified company officials, says Airbus may make an announcement about A380 delivery schedules as early as Friday -- this according to Bloomberg.
Airbus is in the midst of big problems with its new A380 program. Just how big no one really knows, and Airbus, of course, isn't talking. But from all external indications, it's big. LaTribune reports there are internal rumors Airbus may end all A380 program-related activities at its Hamburg, Germany plant.
You may remember all the shakeups with company leadership earlier in the year -- mucky mucks with EADS, Airbus' parent company, getting fired for selling stock, Airbus leadership replaced when the first round of A380 delays were announced, etc., etc. And just last week the European planemaker told its customers to expect even more delays because they were having trouble with the plane's 300 miles of wiring.
After Airbus announced that second program delay -- in less than three months -- EADS said they hadn't had enough time in looking things over to determine exactly how much the latest delay would impact the program, time and dollar-wise. Bloomberg estimates cost overruns might total $5.5 billion before everything is said and done; company earnings might be hit for $1 billion a year.
Following Airbus' surprise announcement last week, EADS told the circling media wolves to expect more information about Euros and schedules in around four weeks. With this latest report from France, it now looks as though someone lit a fire over at Airbus.
Perhaps Korean Air Lines' announcement they would seek compensation from Airbus for the delays has prompted company leadership to move a little faster, and hammer out whatever issues besides wiring might be interfering with getting this program airborne.
No matter what the news and numbers are, an official announcement would be progress, would it not ?"
"A380 pull out from Hamburg and all work sent to Toulouse?"
"Taffman, not quite correct. Hamburg shut till next september, for a rethink of approach"
http://www.pprune.org/forums/showthread.php?t=244840
Quote:
"A380 Scheduled Announcement Could Come As Early As Friday
French newspaper LaTribune, citing unidentified company officials, says Airbus may make an announcement about A380 delivery schedules as early as Friday -- this according to Bloomberg.
Airbus is in the midst of big problems with its new A380 program. Just how big no one really knows, and Airbus, of course, isn't talking. But from all external indications, it's big. LaTribune reports there are internal rumors Airbus may end all A380 program-related activities at its Hamburg, Germany plant.
You may remember all the shakeups with company leadership earlier in the year -- mucky mucks with EADS, Airbus' parent company, getting fired for selling stock, Airbus leadership replaced when the first round of A380 delays were announced, etc., etc. And just last week the European planemaker told its customers to expect even more delays because they were having trouble with the plane's 300 miles of wiring.
After Airbus announced that second program delay -- in less than three months -- EADS said they hadn't had enough time in looking things over to determine exactly how much the latest delay would impact the program, time and dollar-wise. Bloomberg estimates cost overruns might total $5.5 billion before everything is said and done; company earnings might be hit for $1 billion a year.
Following Airbus' surprise announcement last week, EADS told the circling media wolves to expect more information about Euros and schedules in around four weeks. With this latest report from France, it now looks as though someone lit a fire over at Airbus.
Perhaps Korean Air Lines' announcement they would seek compensation from Airbus for the delays has prompted company leadership to move a little faster, and hammer out whatever issues besides wiring might be interfering with getting this program airborne.
No matter what the news and numbers are, an official announcement would be progress, would it not ?"
"A380 pull out from Hamburg and all work sent to Toulouse?"
"Taffman, not quite correct. Hamburg shut till next september, for a rethink of approach"
Don't know how they'll fix it, but i mean it would be a huge disappointment for this plane not meet its expectations just because of things like entertainment systems, the plane is a great one and looks like meeting its performance targets..
just hope they'll find a way around it quickly. Maybe Airbus can ask airlines to get rid of individual TV screens and then install them when they find a proper way to do it?
just hope they'll find a way around it quickly. Maybe Airbus can ask airlines to get rid of individual TV screens and then install them when they find a proper way to do it?
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cageyjames
- Posts: 514
- Joined: 03 Jun 2005, 00:00
- Location: On Lease to PHL
This article may be a victim of language differences, and one should allow for that.
"Thai Airways International was to buy several, but now looks unlikely to take delivery."
http://tinyurl.com/fx4gc
"Thai Airways International was to buy several, but now looks unlikely to take delivery."
http://tinyurl.com/fx4gc
There are no strangers in the world, just friends we have yet to meet.
What plane are you talking about? the 747, the Concorde?smokejumper wrote:I read an article in a British newspaper in 1975 or so that made the same statement! We are still awaiting the profits from that beautiful plane.David747 wrote:I'm going to save this article from Aboulafia and then printed back here when the A380, not only becomes operational, but makes a profit for Airbus. 8)
what does that mean? i dont' believe Thai cancelling their order.bits44 wrote:This article may be a victim of language differences, and one should allow for that.
"Thai Airways International was to buy several, but now looks unlikely to take delivery."
http://tinyurl.com/fx4gc
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keen_watcher
- Posts: 31
- Joined: 23 May 2006, 00:00
ONLY 2 or 3 A380 in 2007!!
News below an hour ago!!
Tuesday October 3, 09:15 AM
PARIS (Reuters) - European aerospace group EADS (Paris: NL0000235190 - news) <EAD.PA> now expects its Airbus unit to deliver only two or three A380 super jumbo aircraft next year, France's La Tribune newspaper reported on Tuesday as the firm's board met to consider how to put the much-delayed programme back on track.
Airbus said in June that it expected to deliver nine planes next year, down from an original target of 20 to 25. It said last month there would be fresh delays, but declined to be more specific pending the outcome of the board meeting.
An EADS spokeswoman confirmed the company's board would meet but declined to comment on details. La Tribune said the board would meet by videoconference.
According to La Tribune, EADS is due to announce it will shift the bulk of A380 production to its Toulouse factory in France. In compensation, its German Hamburg factory will take over production of the A320 model.
Tuesday October 3, 09:15 AM
PARIS (Reuters) - European aerospace group EADS (Paris: NL0000235190 - news) <EAD.PA> now expects its Airbus unit to deliver only two or three A380 super jumbo aircraft next year, France's La Tribune newspaper reported on Tuesday as the firm's board met to consider how to put the much-delayed programme back on track.
Airbus said in June that it expected to deliver nine planes next year, down from an original target of 20 to 25. It said last month there would be fresh delays, but declined to be more specific pending the outcome of the board meeting.
An EADS spokeswoman confirmed the company's board would meet but declined to comment on details. La Tribune said the board would meet by videoconference.
According to La Tribune, EADS is due to announce it will shift the bulk of A380 production to its Toulouse factory in France. In compensation, its German Hamburg factory will take over production of the A320 model.
Emirates will review its options
A further 10 month delay will push Emirates first delivery until August 2008.
http://tinyurl.com/lgbvx
http://tinyurl.com/lgbvx
There are no strangers in the world, just friends we have yet to meet.
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smokejumper
- Posts: 1033
- Joined: 21 Oct 2005, 00:00
- Location: Northern Virginia USA
I was thinking of the Concorde (lost big money), but the 747 is also a beautifful plane (it made and keeps making money for its manufacturer).David747 wrote:What plane are you talking about? the 747, the Concorde?smokejumper wrote: I read an article in a British newspaper in 1975 or so that made the same statement! We are still awaiting the profits from that beautiful plane.
With today's announcements regarding another year's delay (2 years after contracts call for delivery), I feel even less optomistic that the A380 will ever be profitable, especially when considering the cost of money and Boeing's lead in the twin aisle market. With the increased costs, delivery delays, engineering manpower shortage, loss of credibility, etc., how will Airbus design, test and deliver a 787 competitor?
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keen_watcher
- Posts: 31
- Joined: 23 May 2006, 00:00
Hope this is not true!!
Following appeared on IAG Blog web site a few minutes ago... Hope it's not the case...
http://iagblog.blogspot.com/
Tuesday, October 03, 2006
A380 news - its worse than you think
Hot rumors are that Emirates may cancel half its A380s and buy the 747i instead. It may be worse than any of us believed:
Tim Clark, President Emirates Airline said: "Emirates has been advised by Airbus of a further 10 months delay to its A380 programme, which means that our first aircraft will now arrive in August 2008. This is a very serious issue for Emirates and the company is now reviewing all its options." -ends ======= Regards Emirates
And this one from an undisclosed source: A reliable source with an interest in the A380 program just rang to tell me that EADS/Airbus will announce the first deliveries will be in 2009 (although the "official" press story may say 2008), and that the airplane's problem is more than wiring. I know nothing more; I'm told the news will be out by the close of business today in Toulouse.
Bloomberg reports: "This is a very serious issue for Emirates," spokesman Mike Simon in a phone interview today, reading from a statement written by President Tim Clark. "We've started a review to see how we can minimize impact on our expansion plans."
"These are very strong words for Emirates and catastrophic news for Airbus," Doug McVitie, managing director of the Dinan, France-based aviation consulting firm Arran Aerospace.
posted at 10/03/2006 06:29:00 AM - 0 comments
http://iagblog.blogspot.com/
Tuesday, October 03, 2006
A380 news - its worse than you think
Hot rumors are that Emirates may cancel half its A380s and buy the 747i instead. It may be worse than any of us believed:
Tim Clark, President Emirates Airline said: "Emirates has been advised by Airbus of a further 10 months delay to its A380 programme, which means that our first aircraft will now arrive in August 2008. This is a very serious issue for Emirates and the company is now reviewing all its options." -ends ======= Regards Emirates
And this one from an undisclosed source: A reliable source with an interest in the A380 program just rang to tell me that EADS/Airbus will announce the first deliveries will be in 2009 (although the "official" press story may say 2008), and that the airplane's problem is more than wiring. I know nothing more; I'm told the news will be out by the close of business today in Toulouse.
Bloomberg reports: "This is a very serious issue for Emirates," spokesman Mike Simon in a phone interview today, reading from a statement written by President Tim Clark. "We've started a review to see how we can minimize impact on our expansion plans."
"These are very strong words for Emirates and catastrophic news for Airbus," Doug McVitie, managing director of the Dinan, France-based aviation consulting firm Arran Aerospace.
posted at 10/03/2006 06:29:00 AM - 0 comments
:(:(Smokejumper: I think the A380 will make Airbus a profit in the next few years, but I also see a limited market of maybe 400 A380's only. The VLA market, despite what Airbus or Boeing say is very very limited. McDonnell Douglas had to abandon the plans for the MD-12 based on those projections of a limited market.
Even though the proposed MD-12 had lower MTOW weight than the A380 does at the moment, was probably a factor in why it did not sell, but also the MD-12 could have been used to carry as many as 500 passangers, like the A380, and that didn't attract any customers, especially from the Asian countries who need large airliners.
It is clear that the A380 is not the proposed MD-12, and thank God for that, but unlike Abulafia, whatever his name is, and others, I do still believe the A380 will be a profitable airliner in what, in reality, is a limited Market.
Even though the proposed MD-12 had lower MTOW weight than the A380 does at the moment, was probably a factor in why it did not sell, but also the MD-12 could have been used to carry as many as 500 passangers, like the A380, and that didn't attract any customers, especially from the Asian countries who need large airliners.
It is clear that the A380 is not the proposed MD-12, and thank God for that, but unlike Abulafia, whatever his name is, and others, I do still believe the A380 will be a profitable airliner in what, in reality, is a limited Market.
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smokejumper
- Posts: 1033
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- Location: Northern Virginia USA
In order to be profitable, the A380 will have to sell in large numbers. I do not know what the break-even point is, but I would not be surprised if it were in the 500+ range after all the extra costs and financing charges are accounted for. The program has cost about $13.5 Billion in development costs (that's about $85 million each for the 159 ordered to date). Reports are that the plane is selling in the $125-150 million range; this indicates that about 57% of the sales price of each plane is for development. The balance is for engines, wings, fuselage, flight systems, etc. (plus entertainment and wire systems).
After Airbus pays for the development cost, there is not much more left to pay for the parts and put the planes together, unless the owners of Airbus (EADS and its shareholders) pay lots of money! If sales really hit a high stride, the development costs can be amortized over a larger base.
I do not think that Airbus will sell 500 A380's. With today's fuel and other costs (including insurance for 550 passengers on one flight!), airlines will probablly not put too many in service - the market has become self limiting. It is easier to get a 75% load factor in a 450 seat plane than it is to get a 75% factor in a 555 seat plane.
I think that today's economics are working against the A380, but it might prove itself once it enters service. If it does, additonal orders can be expected, but probably not 500. I believe that Airbus can not raise the sales price high enough to cover all the costs since the productivity is only about 25% more than the B747-8i.
The A380 is a great example of engineering and is beautiful in flight. I hope it makes it!
After Airbus pays for the development cost, there is not much more left to pay for the parts and put the planes together, unless the owners of Airbus (EADS and its shareholders) pay lots of money! If sales really hit a high stride, the development costs can be amortized over a larger base.
I do not think that Airbus will sell 500 A380's. With today's fuel and other costs (including insurance for 550 passengers on one flight!), airlines will probablly not put too many in service - the market has become self limiting. It is easier to get a 75% load factor in a 450 seat plane than it is to get a 75% factor in a 555 seat plane.
I think that today's economics are working against the A380, but it might prove itself once it enters service. If it does, additonal orders can be expected, but probably not 500. I believe that Airbus can not raise the sales price high enough to cover all the costs since the productivity is only about 25% more than the B747-8i.
The A380 is a great example of engineering and is beautiful in flight. I hope it makes it!