New problems for the Airbus A380

RC20 · Post by **RC20** » 29 Oct 2006, 00:58

The most recent blow are

5.5 tons overweight, according to Clark.

And, more credible reports are that they need to sell 500+ of the A380 to break even.

Good news, Emirates is standing firm, but it looks like they will procure 747-8 to ensure they have lift capacity. Others will stand firm as long as their operating model does not change. If it does, they have to cancel (and can at no penalty).

The 5.5 tons may not bother the freighters, as they are after volume (UPS and FedEx which are the only orders) on it, not range. UPS is in a better position to cancel if they want. They have to factor in the uncertainty of delivery (delayed or just never) versus maintaining sufficient lift capacity and slot constraints (i.e. order more 747s and probably the 747-8F.

It looks more and more like they have given Boeing a way to edge in on what would be the A380 pax market (as opposed to the gap between 777 and the A380). Yes they can run mixed fleets (and some like Emirates could do so) but others might just go with the 747 and forget the A380.

Malaysia would be one who can’t afford it, and Thai Airlines may need to simply go to 747-8. Virgins delay may just mean those positions shift to Singapore. Does Virgin then buy 747-8?

As they only have 159 firm orders for A380 in 6 years, that’s not at all encouraging. At what point to you simply cancel the production as its not going to even break even, let alone make any money. 500+ is extremely optimistic.

achace · Post by **achace** » 29 Oct 2006, 02:22

5.5 tonnes may sound a lot, but it is less than 1% of its Max.take off weight.
(IF?) as Airbus claim they have exceeded expectations in their flight tests, it may not be such a big deal.

I wish them luck, and it certainly stacks up against the 787 in the obesity stakes.

Cheers
Achace

DFW · Post by **DFW** » 29 Oct 2006, 04:41

You can't draw any parallels between the 787 and the 380 weight issues.

Yes, the 787 is overweight, but it's still in development, and the program has only started to look at shaving off weight.

In contrast, the 380 is supposedly in production already. The easy ways to reduce weight has already been done. 5.5 tons is a lot to shave off this late in the program. And the program is already way over budget. Unbelievable.

smacDC-10 · Post by **smacDC-10** » 29 Oct 2006, 05:02

Well, 5.5 tons is equivilent to about 55 passengers. What a joke!! What else is Airbus not telling it's customers. This reminds me of the MD-11. Lies, Lies and more Lies!

beaucaire · Post by **beaucaire** » 29 Oct 2006, 08:21

That does not prevent Qantas from ordering 8 more A380's ..

http://www.chron.com/disp/story.mpl/ap/fn/4295242.html

CX · Post by CX » 29 Oct 2006, 08:58

smacDC-10 wrote:Well, 5.5 tons is equivilent to about 55 passengers. What a joke!! What else is Airbus not telling it's customers. This reminds me of the MD-11. Lies, Lies and more Lies!

5.5T = 55passengers? 100kg passengers???

In fact 5.5T equals more than 55 passengers, but what does that mean? If you want to stretch the A380 to accomodate 60 or 70 more passengers in std. config, it will probably cost you more than 5.5T. So i don't think it works like this..

Good news that QF is taking more A380s, still 4 more on option. With 20 A380s, do they need 748Is? I always thought QF would be one that would fly both jumbos, but 20 beasts is quite a lot.

achace · Post by **achace** » 29 Oct 2006, 13:50

As I said, 5.5 tonnes is less than 1% of max operating weight.
There is no harder taskmaster than QANTAS, and if they order more, you can be sure the guarantee margins in other parameters offset the weight issues.

Good one Airbus!!!!

Cheers
Achace

smokejumper · Post by **smokejumper** » 29 Oct 2006, 17:16

This might be a good oportunity for any airline to increase their A380 orders. As the stock market pundits say, "Buy on bad news!"; this is the matra of a value investor. Since Airbus has has a string of bad news (late delivery, weight, etc.), they have much to pay in penalties. This is a good negotiating position for existing customers.

Quantas just picked up 8 more.

fleabyte · Post by **fleabyte** » 29 Oct 2006, 23:15

Yes, I would love to know the price they got on the (4) A330-200 - I estimate that with the A380 penalties included, they are paying less than 40% of list price for those birds, good for Qantas.

CX · Post by CX » 30 Oct 2006, 02:25

I can hardly imagine how the A332 can fill A380's delays in any way, it is about 1/3 the size and flies about half the range? I actually wonder why Airbus is not trying to sell its A346s for a much discounted price, and QF should have no difficulties in operating A346s as they already have facilities for the A332 and A333.

CX · Post by CX » 03 Nov 2006, 02:44

Schedule for route proving tests...
http://www.flightglobal.com/Articles/20 ... tests.html

Damn, I am due to arrive HKG on 19/11 night!!

for once i hope they have a 1 day delay during that Hong Kong - Narita mission

bits44 · Post by **bits44** » 06 Nov 2006, 20:19

Airbus to cut supplier list by 80% an action sure to hurt many suppliers and their staff.

http://tinyurl.com/ygfjk9

smokejumper · Post by **smokejumper** » 06 Nov 2006, 22:04

Perhaps some of our European participants can discuss this.

As I understand it, European companies face greater difficulty (than their US counterparts) in laying off or termiating employees. If Aribus reduces the number of suppliers from 3,000 to 500, 2,500 companies will lose work and have to lay off employees, assuming they have no other work for them.

What are the regulations or laws governing such layoffs?

Post by **ElcoB** » 06 Nov 2006, 23:41

smokejumper wrote:What are the regulations or laws governing such layoffs?

Things differ from country to country and from various agreements in industrial sectors.
For instance: in Germany's EADS workplaces overtime will not be payed anymore but workers and employees will have to 'take up' these hours in the periods there is no work.
Tempory workers will be the first victims ofcourse.
Other possibility EADS and others will try is to replace workers to other divisions or units; the military divisions have lots of work now.

achace · Post by **achace** » 07 Nov 2006, 01:30

Well, if Aibus intend to reduce their suppliers to just 500, the easiest decision must surely be to get rid of their Japanese contractors. After all, JAL and ANA are not likely to buy Airbus anytime soon, and apart from one of the last A300-600's to be built, all the remaining Airbus planes are being or already have been phased out.

Cheers
Achace

cageyjames · Post by **cageyjames** » 07 Nov 2006, 04:38

achace wrote:Well, if Aibus intend to reduce their suppliers to just 500, the easiest decision must surely be to get rid of their Japanese contractors. After all, JAL and ANA are not likely to buy Airbus anytime soon...

Making business decisions using politics has gotten Airbus in this mess in the first place. If the Japanese suppliers aren't needed, then do it for fiscal reasons, not for spite. What JAL and ANA do is irrelevant when it comes to getting the best suppliers to get your product out on time.

DFW · Post by **DFW** » 07 Nov 2006, 16:46

A lot of the reduction in the number of suppliers will be to remove redundancies. For example, an airframe manufacturer may have several suppliers fabricating a component. This reduces the risk of disruption in your supply chain if for example one supplier has a worker strike going on. Consolidating your supply chain to one supplier will reduce your component price, but increases the risk of disruption.

It's possible to overcome this risk. Toyota works with far fewer suppliers than its competitors. But Toyota, like all Japanese companies, develop deep relationships with its suppliers. Its suppliers may not be the lowest bidder but are certainly the most beneficial to Toyota.

There's a right way and a wrong way to reduce the number of suppliers. Airbus will need to execute this flawlessly and not be shortsighted in selecting suppliers.

beaucaire · Post by **beaucaire** » 07 Nov 2006, 17:51

Fedex has cancelled it's 10 x A380F's...to buy 15 777F's instead..

TexasGuy · Post by **TexasGuy** » 07 Nov 2006, 18:29

beaucaire wrote:Fedex has cancelled it's 10 x A380F's...to buy 15 777F's instead..

This is not good news for A380F

http://tinyurl.com/yeelux

bits44 · Post by **bits44** » 07 Nov 2006, 20:02

It's bad news for Airbus, but certainly not unexpected! Customers of the A380 must carry on with business, plans have been made for years in advance, promises have been made to their customers, they must make alternate plans to fulfill those promises.

This is business, not a contest between aircraft manufacturers, life must go on, they are certainly not going to let Airbus' problems drag them down.

I'm afraid this may be just the beginning of many cancellations, all the the other A380 customers will want to secure delivery slots for replacement aircraft if they cancel, and there probably will be more.

Aviation24.be

New problems for the Airbus A380

Qantas opprtunity