A400M Update

Ozair · Fri Feb 02, 2018 4:11 am

Noray wrote:
Before you start holding lessons: Please stop mixing up $ and €, otherwise there's no chance at all that you come to a useful result.

I have been very clear on what currency I am using. Keesje’s original vague and unsubstantiated 25 billion was the one value that has lacked a currency. I note I didn’t use a currency for the 4.5 billion which was referenced in the defence news article I quoted previously, that was obviously in US as indicated in the article.

Noray wrote:
Now that's creative accounting on your side. The sources say that there was a 3.5 billion euro bailout in 2010, and I don't ignore this at all. We don't know to which phase of the project this gets added internally by the different parties, so we must add it to the initial total of € 20 billion. The penalties that we've heard of are much lower than what you suggest.

At the very least we can use the below quote from Revelation from Reuters, an article that you quoted!

Revelation wrote:
tells us the expensive asset has cost EUR 20M (original budget) + EUR 3.5B (customer bailout #1) + EUR 7B (Airbus writeoffs) so far, with Airbus coming back for more concessions presumably because the bleeding hasn't stopped yet. Hard to find that extensive savings, IMHO. Maybe the customers will tell us more about its cost effectiveness after bailout #2.

So even there we are looking at a total development cost that includes 3.5 billion Euro bailout, plus 7 billion Euro in Airbus write-offs. Add that to the original estimates and you are easily approaching 15 billion Euro in dev costs. Add the cost to build 180 aircraft at 152 million Euro each, 27 billion Euro and we approach a far more realistic figure for total program costs. Any way you want to cut it, the program is not what Keesje claimed and that 15 billion Euro is right in the region I have stated numerous times of 300% of initial projections.

Noray wrote:
What Airbus has to account for in their financial reports is not only the actual costs, but also the risks that arise from the program. A cost risk for Airbus can be a cost risk for the customers as well; in case of possible penalties it's unknown which side will bear the costs in the end. So all your math is futile.

Mate, the costs are clear. That Airbus chooses to account for their costs via accounting means that allows them to improve their bottom line is their issue, not mine.

Noray wrote:
We do know that there are sources that say the project is "now costing well over 30 billion euros."

Now we are getting somewhere… Finally recognition of what the total program costs potentially are. I’m not sure why it has taken so long to get to this point.

Any idea where the additonal EUR 10 billion plus in costs has gone?

SamYeager2016 · Fri Feb 02, 2018 9:26 am

Perhaps this thread should be closed. A new Production and Delivery thread can then be opened and for those who are interested a separate thread can be opened to discuss costs.

Nicoeddf · Sat Feb 03, 2018 1:53 pm

SamYeager2016 wrote:
Perhaps this thread should be closed. A new Production and Delivery thread can then be opened and for those who are interested a separate thread can be opened to discuss costs.

I agree. This pissing contest about which countries screw up their military budgets and development programs really is annoying.

Not sure why for so many it has always to be black and white, rather than enjoying a new aircraft from an enthusiasts point of view.
And that goes both ways. I can give credit to the good old Herc without a need to discredit the A400M or the other way round...

This thread got uninteresting and unreadable for all but three people...

Grizzly410 · Sun Feb 04, 2018 5:37 pm

Back on topic then.

Friday MSN2 finished its mission within FT department.
https://twitter.com/backtosnow/status/9 ... 3761062912

2 aircrafts remains on duty, MSN4 specialized in refueling and paratrooping testing and MSN6 for aerial delivery and marketing.

Nicoeddf · Mon Feb 05, 2018 12:58 pm

Whats happening with msn2 now?

Grizzly410 · Mon Feb 05, 2018 2:21 pm

The news is not an official announcement, we'll know once Airbus decide to communicate...

MSN3 is already dusting on the tarmac of the old C235 FAL, I fear MSN2 follows it.

WIederling · Mon Feb 05, 2018 3:18 pm

German military personnel stuck in Mali due to no A400M being available. rerouted home via commercial transport.
https://www.focus.de/politik/ausland/a4 ... 13261.html

This is either cringe worthy for the Luftwaffe or some political gaming?

Dutchy · Mon Feb 05, 2018 3:30 pm

Grizzly410 wrote:
The news is not an official announcement, we'll know once Airbus decide to communicate...

MSN3 is already dusting on the tarmac of the old C235 FAL, I fear MSN2 follows it.

Are these two so different from regular A400M that no current operator would like to take them for a discounted price?

Grizzly410 · Mon Feb 05, 2018 5:08 pm

Yep they are very different. MSN3 was a bit like MSN1, heavily instrumented to test the flight envelope. MSN2 less instrumented but specialized to develop defense system (DASS) and tactical flying. Both have currently next to 0 operational capability : the refurbishment cost prohibit any cheap offer.

We don't know if MSN56&75 were offered at all, even less if discounted, but I'd expect these to be easier to sell... Unfortunately they still hang around without flag (MSN56 recently moved to Flight Line, MSN75 long term storage where MSN56 sat during some months in 2017).

KarelXWB · Tue Feb 06, 2018 11:02 am

Revelation wrote:
Not sure why OCCAR would be motivated to give Airbus another break. Airbus is a giant corporation with giant profits and should be able to meet its commitments.

Airbus will meet its commitments as it continue to work on extending capabilities. Just not within the original time frame, hence the penalties.

Giving them another break reinforces a bad precedent. Enders is praised for gaining independence from the government and acting more like a corporation, but here he wants to get away with capitalizing profits and socializing debts.

My dear friend,

You know how the game works: avoiding penalty fees will result in higher cash flow, which analysts and stake holders see as a good sign, resulting in higher stock market.

Revelation · Tue Feb 06, 2018 12:11 pm

KarelXWB wrote:
My dear friend,

You know how the game works: avoiding penalty fees will result in higher cash flow, which analysts and stake holders see as a good sign, resulting in higher stock market.

Agree, just don't know why OCCAR would let them off the hook. Just like Boeing lost the case where they claimed CS harmed the 737, Airbus would not win the case saying they can't afford the penalties.

Meanwhile in http://aviationweek.com/singapore-airsh ... -they-cost the A400M's one export customer, Malaysia, likes everything about their A400Ms except the cost:

They are a boon to the military because they are proving to be outstanding airlifters, Defense Minister Hishammuddin Hussein says. Despite this, military officials say privately that the US$740 million spent on them could have funded other, more pressing requirements, such as airborne early warning and maritime patrollers.

The reason for those needs is the threatning Chinese:

“It’s undeniable that their [China’s] policies and actions in the South China Sea, especially in waters claimed by Malaysia, are a major concern,” says Daniel. “While we [Malaysia] can never match China in terms of capacity, there is a dire need for intelligence, surveillance and reconnaissance, and maritime enforcement assets to better monitor its activities and, if need be, intervene.”

Seems to be a touch of buyer's regret.

An earlier article ( http://aviationweek.com/defense/indones ... 0ms-aw101s ) points out the challenges of funding various programs that Malaysia faces.

Nicoeddf · Tue Feb 06, 2018 1:14 pm

Revelation wrote:

Meanwhile in http://aviationweek.com/singapore-airsh ... -they-cost the A400M's one export customer, Malaysia, likes everything about their A400Ms except the cost:

They are a boon to the military because they are proving to be outstanding airlifters, Defense Minister Hishammuddin Hussein says. Despite this, military officials say privately that the US$740 million spent on them could have funded other, more pressing requirements, such as airborne early warning and maritime patrollers.

The reason for those needs is the threatning Chinese:

That is a bit misleading, Revelation. He didn't say he they didn't like the cost of the A400M, but rather that they apparently made a mistake in prioritizing military hardware requirements, thus having now a transport aircraft where they would rather need AWACS and patrol capabilities.
Hardly A400Ms fault...

jupiter2 · Tue Feb 06, 2018 4:10 pm

Nicoeddf wrote:
Revelation wrote:

Meanwhile in http://aviationweek.com/singapore-airsh ... -they-cost the A400M's one export customer, Malaysia, likes everything about their A400Ms except the cost:

They are a boon to the military because they are proving to be outstanding airlifters, Defense Minister Hishammuddin Hussein says. Despite this, military officials say privately that the US$740 million spent on them could have funded other, more pressing requirements, such as airborne early warning and maritime patrollers.

The reason for those needs is the threatning Chinese:

That is a bit misleading, Revelation. He didn't say he they didn't like the cost of the A400M, but rather that they apparently made a mistake in prioritizing military hardware requirements, thus having now a transport aircraft where they would rather need AWACS and patrol capabilities.
Hardly A400Ms fault...

There isn't anything really misleading in Revelations comments, the total "cost" of the aircraft to Malaysia includes the inability to solve other requirements they have now, due to lack of finances. If Malaysia can have their time again, they may well acquire AWACS instead, as they would appear to be a more pressing need now than transports.

However, agreed that it's definitely not the A400M fault, it's just a matter of having different priorities now than when the aircraft were ordered. The reverse could've also been true under different circumstances. The "buyers regret" is more about Malaysia not forecasting how much of a threat China would be to Malaysia's own interests now, as opposed to when they made the decision to get them..

Revelation · Tue Feb 06, 2018 4:17 pm

Nicoeddf wrote:
That is a bit misleading, Revelation. He didn't say he they didn't like the cost of the A400M, but rather that they apparently made a mistake in prioritizing military hardware requirements, thus having now a transport aircraft where they would rather need AWACS and patrol capabilities.
Hardly A400Ms fault...

Not sure where the distinction lies. There's no doubt A400M brings a lot of capabilities but also a lot of costs. Yet I agree it does come down to prioritizing military requirements. And I'm not assigning fault to A400M. The title of the article ("Malaysia’s A400Ms Work, But They Cost") is more provocative, IMHO. In any case, it seems there's a whole lot of things at play here.

The 2nd link I posted shows (as usual) the process of allocating funds is a mix of what the military wants and what the government can afford. Also a big factor is where the government's priorities lie (politics, economic and technological development goals, etc). And we are being told that the military staff is sharing opinions privately that presumably they won't share otherwise. I get the feeling that there's a lot going on behind the scenes.

The 2nd link (less than one year old, apparently before A400M order was finalized) said:

The air force has two transport squadrons equipped with 17 Lockheed Martin C-130 Hercules and three with 25 Airbus light transporters—CN-212s, CN-235s and C295s. A third C-130 squadron should be stood up once the nine ex-Australian Hercules agreed to in 2012-13 are delivered. Australia donated four of the Hercules and sold the other five, with spares and flight simulator, at a discount. One crashed on Dec. 18.

If the A400M order is finalized, it will enable the air force to slowly phase out C-130A and C-130B Hercules, some of which have been in service since the early 1960s. In replacing those aircraft, Indonesia could return to Airbus for more Atlases, but an alternative would be to buy C-130Js, the air force’s preferred solution, according to industry sources.

One look at the map shows why Malaysia would want/need a lot of tactical airlifters, yet if you feel your neighbors are threatening, I can see the case for quantity over quality.

Revelation · Tue Feb 06, 2018 4:23 pm

jupiter2 wrote:
There isn't anything really misleading in Revelations comments, the total "cost" of the aircraft to Malaysia includes the inability to solve other requirements they have now, due to lack of finances. If Malaysia can have their time again, they may well acquire AWACS instead, as they would appear to be a more pressing need now than transports.

However, agreed that it's definitely not the A400M fault, it's just a matter of having different priorities now than when the aircraft were ordered. The reverse could've also been true under different circumstances. The "buyers regret" is more about Malaysia not forecasting how much of a threat China would be to Malaysia's own interests now, as opposed to when they made the decision to get them..

Agree, although the 2nd AvWeek article from March 2017 makes the time line hard to understand. At that point the A400M order was not finalized, and was being held due to the tragic crash. Surely the issue with the neighbors was known then and direction could be changed, but wasn't. So many ways to account for that outcome.

Grizzly410 · Tue Feb 06, 2018 4:51 pm

Revelation wrote:
Agree, although the 2nd AvWeek article from March 2017 makes the time line hard to understand. At that point the A400M order was not finalized, and was being held due to the tragic crash. Surely the issue with the neighbors was known then and direction could be changed, but wasn't. So many ways to account for that outcome.

Because now it's finalized ? :shock:

Ozair · Tue Feb 06, 2018 8:17 pm

Revelation wrote:

The 2nd link (less than one year old, apparently before A400M order was finalized) said:

The air force has two transport squadrons equipped with 17 Lockheed Martin C-130 Hercules and three with 25 Airbus light transporters—CN-212s, CN-235s and C295s. A third C-130 squadron should be stood up once the nine ex-Australian Hercules agreed to in 2012-13 are delivered. Australia donated four of the Hercules and sold the other five, with spares and flight simulator, at a discount. One crashed on Dec. 18.

If the A400M order is finalized, it will enable the air force to slowly phase out C-130A and C-130B Hercules, some of which have been in service since the early 1960s. In replacing those aircraft, Indonesia could return to Airbus for more Atlases, but an alternative would be to buy C-130Js, the air force’s preferred solution, according to industry sources.

One look at the map shows why Malaysia would want/need a lot of tactical airlifters, yet if you feel your neighbors are threatening, I can see the case for quantity over quality.

Grizzly410 wrote:
Revelation wrote:
Agree, although the 2nd AvWeek article from March 2017 makes the time line hard to understand. At that point the A400M order was not finalized, and was being held due to the tragic crash. Surely the issue with the neighbors was known then and direction could be changed, but wasn't. So many ways to account for that outcome.

Because now it's finalized ?

The article in question is talking about the Indonesian Air Force, not the Malaysian Air Force. We know the Indonesian Air Force has stated numerous times they see a need for approximately 5 A400M but no more and are looking at other transports, including the C-130J, for future acquisitions based on their fleet size and needs.

Revelation · Tue Feb 06, 2018 8:22 pm

Ozair wrote:
The article in question is talking about the Indonesian Air Force, not the Malaysian Air Force. We know the Indonesian Air Force has stated numerous times they see a need for approximately 5 A400M but no more and are looking at other transports, including the C-130J, for future acquisitions based on their fleet size and needs.

Thanks for catching my mistake. I found the link at the bottom of the first article so I presumed they were about the same topic, and didn't read closely enough. Makes much more sense now!

KarelXWB · Wed Feb 07, 2018 4:59 pm

Looks like all parties reached an agreement today.

Airbus SE (stock exchange symbol: AIR) has signed a Declaration of Intent (DoI) with the A400M Launch Customer Nations (Germany, France, United Kingdom, Spain, Turkey, Belgium, Luxemburg) defining the framework for achieving a mutually binding contract amendment later in the year.

Airbus, European defence agency OCCAR and the Customer Nations have agreed to work on a number of contractual elements including a revamped delivery plan as well as a roadmap for the development and completion of military capabilities for the A400M.

http://www.airbus.com/newsroom/press-re ... er-na.html

And:

Airbus says 2017 results may see material charge on A400M as it gets buyer agreement to contract changes that still need to be finalized.

https://twitter.com/R_Wall/status/961281552415158272

Revelation · Wed Feb 07, 2018 5:35 pm

KarelXWB wrote:
Looks like all parties reached an agreement today.

Airbus SE (stock exchange symbol: AIR) has signed a Declaration of Intent (DoI) with the A400M Launch Customer Nations (Germany, France, United Kingdom, Spain, Turkey, Belgium, Luxemburg) defining the framework for achieving a mutually binding contract amendment later in the year.

Airbus, European defence agency OCCAR and the Customer Nations have agreed to work on a number of contractual elements including a revamped delivery plan as well as a roadmap for the development and completion of military capabilities for the A400M.

http://www.airbus.com/newsroom/press-re ... er-na.html

And:

Airbus says 2017 results may see material charge on A400M as it gets buyer agreement to contract changes that still need to be finalized.

https://twitter.com/R_Wall/status/961281552415158272

Sounds more like an agreement to not reach an agreement today and to "work on" one "later in the year" so we can try to put spin on the likeyhood that Airbus will be taking yet another A400M write off on 2017's results.

Note how Airbus's presser speaks of new "delivery plan" instead of "delivery delay" and "roadmap for the development and completion of military capabilities" yet avoids "penalty relief" or "price increase" which is the main things they are after.

KarelXWB · Wed Feb 07, 2018 6:12 pm

Revelation wrote:
Note how Airbus's presser speaks of new "delivery plan" instead of "delivery delay" and "roadmap for the development and completion of military capabilities" yet avoids "penalty relief" or "price increase" which is the main things they are after.

I don't think I have to explain how press releases work.

There is some truth in there however. If production rates are being reduced, it automatically comes with a new delivery plan.

Revelation · Wed Feb 07, 2018 6:30 pm

KarelXWB wrote:
Revelation wrote:
Note how Airbus's presser speaks of new "delivery plan" instead of "delivery delay" and "roadmap for the development and completion of military capabilities" yet avoids "penalty relief" or "price increase" which is the main things they are after.

I don't think I have to explain how press releases work.

There is some truth in there however. If production rates are being reduced, it automatically comes with a new delivery plan.

If you pardon the expression, you've managed to dive into a pile of dung and find a pony ( ref: https://judymintz.com/2012/12/04/theres ... somewhere/ ).

It's frustrating because it'd be interesting to know a lot more about what positions the various players were taking.

FT: Airbus wins new deal for A400M gives us more details.

It says the hit to earnings that Airbus is taking could be "material" and says that at least 6 of 7 partners have agreed to the delays. I'd guess #7 is Germany.

It says the production rate will look like:
2017: 19
2018: 14
2019: 11

As for the blame game:

The programme was originally meant to have ushered in a new era in military procurement, with Airbus agreeing to a fixed-price contract. But the technological challenges proved too great, as did the high degree of customised requirements of the different customers.

Sounds like the old A380 "blame the customer" line.

Much more interesting reading than the Airbus presser...

Noray · Wed Feb 07, 2018 8:54 pm

Revelation wrote:
KarelXWB wrote:
Revelation wrote:
Note how Airbus's presser speaks of new "delivery plan" instead of "delivery delay" and "roadmap for the development and completion of military capabilities" yet avoids "penalty relief" or "price increase" which is the main things they are after.

I don't think I have to explain how press releases work.

There is some truth in there however. If production rates are being reduced, it automatically comes with a new delivery plan.

If you pardon the expression, you've managed to dive into a pile of dung and find a pony ( ref: https://judymintz.com/2012/12/04/theres ... somewhere/ ).

It's frustrating because it'd be interesting to know a lot more about what positions the various players were taking.

FT: Airbus wins new deal for A400M gives us more details.

It says the hit to earnings that Airbus is taking could be "material" and says that at least 6 of 7 partners have agreed to the delays. I'd guess #7 is Germany.

The delay is no news. The news is that the partners accept the delay and a new delivery plan, which means that there will be much less penalties than Airbus would have had to pay if the plan hadn't been agreed on. There will be a new hit to Airbus' earnings due to the compromise, but without the deal it would have been much higher.

I'm not sure if Germany is the partner that didn't agree. It's in the country's interest to delay the delivery of aircraft #41-53. which were not part of its military planning. According to Handelsblatt, #53 won't be delivered before 2026 under the new agreement.

Revelation wrote:
It says the production rate will look like:
2017: 19
2018: 14
2019: 11

As they've built up an inventory, the delivery rate will not sink immediately, though.

SheikhDjibouti · Thu Feb 08, 2018 1:44 pm

Don't know if I'll get shouted at for being off-topic....

Currently on FR24 is "DARK21"
FR24 is struggling to give meaningful details because of "Invalid Transponder code", but it took off from MUC at 13:35 CET, and after zig-zagging around over North Norfolk is currently maintaining 0 kts (!) airspeed at FL150, and visiting all the old airbases up there. (RAF Coltishall, Gt Massingham, etc). I would be amazed if it didn't end up at RAF Marham sometime later today.

Mostly it's invisible due to 8/8ths cloud, but occasionally it can be spotted in a break, and the remainder of the time all you can do is listen to it's unique sound. It's definitely an A400M,

Strato2 · Thu Feb 08, 2018 9:28 pm

Revelation wrote:
[Sounds like the old A380 "blame the customer" line.

Where and when has Airbus blamed the customer for anything related to the A380? And they have not done that here either.

Ozair · Thu Feb 08, 2018 9:33 pm

Communiques from the Airbus partners A400M meeting have been released. One each from the UK, Spain, Airbus and the OCCAR.

They can be read here, http://www.defense-aerospace.com/articl ... r_end.html

Airbus is the only one talking about financial issues and contract woes while the others all seem to agree that some action and production delay is required.

Revelation · Thu Feb 08, 2018 10:10 pm

Strato2 wrote:
Where and when has Airbus blamed the customer for anything related to the A380? And they have not done that here either.

I was referring to the "high degree of customization" statement. If you don't want to allow such customization, simply don't allow it. If you do want to offer such customization, put adequate pricing protections into the deal. Don't complain about excessive customization, which IMHO is blaming the customer for taking you up on your offer to allow customization.

Kiwirob · Fri Feb 09, 2018 4:06 pm

Revelation wrote:
Strato2 wrote:
Where and when has Airbus blamed the customer for anything related to the A380? And they have not done that here either.

I was referring to the "high degree of customization" statement. If you don't want to allow such customization, simply don't allow it. If you do want to offer such customization, put adequate pricing protections into the deal. Don't complain about excessive customization, which IMHO is blaming the customer for taking you up on your offer to allow customization.

The NH90 is a much better example, so many issues related to making to many customer specific versions.

Revelation · Mon Feb 12, 2018 6:04 pm

Seems we're finally getting some leaks.

Exclusive: Europe's A400M army plane may see some features axed says:

SINGAPORE/BERLIN (Reuters) - Europe's new troop transporter may never go into battle with all the promised military capabilities after buyers of the A400M agreed to let Airbus negotiate an opt-out for features deemed too difficult to build.

It doesn't say what features will be eligible to be left out.

It does say:

Under last week's deal, Airbus has re-committed to bringing new deliveries up to the final operational standard, known as "SOC3," which includes flights at low level. It must also retrofit earlier planes in two stages by April 2027.

Airbus must meanwhile pay or give credit notes for all damages for delays due as of last week, when the agreement was signed: a move that underscores likely fourth-quarter charges.

One can infer, then, that features falling after SOC3 can now be opted out?

http://www.defenceweb.co.za/index.php?o ... e&id=25800 from 2012 gives us some definitions:

SOC 1 (initial aerial delivery) standard next year; SOC 1.5 (full aerial delivery and initial tanker capacity) in 2014; SOC 2 (enhanced tactical mission and additional performances) in 2015; SOC 2.5 (enhanced tanker capabilities and search and rescue) in 2017 and SOC 3 (low level flight) in 2018.

It's not clear what if any things are not a part of SOC3.

Noray · Mon Feb 12, 2018 8:23 pm

Revelation wrote:
It doesn't say what features will be eligible to be left out.

I guess that this is still subject to further tests. The text mentions the notoriously problematic issues defensive systems, paratrooper drop and helicopter refueling. For example, Airbus are planning new tests for helicopter refuelling, and if these don't succeed, they now know that it won't ruin them financially. France has already ordered two KC-130 to make up for it. Another example that comes to my mind is the number of paratroopers in automatic jumps that may be reduced below the scheduled 116.

Revelation wrote:
One can infer, then, that features falling after SOC3 can now be opted out?
...
It's not clear what if any things are not a part of SOC3.

I'm not sure if I understand you correctly. SOC3 is the final standard. The intermediate SOC steps have become somehow obsolete in the past, as Airbus is ahead with some of them and behind schedule with others. I think the message is that Airbus will still try to reach the final step even if some intermediate steps are left out.

Ozair · Mon Feb 12, 2018 9:36 pm

Revelation wrote:
One can infer, then, that features falling after SOC3 can now be opted out?

http://www.defenceweb.co.za/index.php?o ... e&id=25800 from 2012 gives us some definitions:

SOC 1 (initial aerial delivery) standard next year; SOC 1.5 (full aerial delivery and initial tanker capacity) in 2014; SOC 2 (enhanced tactical mission and additional performances) in 2015; SOC 2.5 (enhanced tanker capabilities and search and rescue) in 2017 and SOC 3 (low level flight) in 2018.

It's not clear what if any things are not a part of SOC3.

I think half the problem now is that the SOC concept has gone out the window with the delays and differing rates of progression, hence the long delay to get current aircraft up to the current standard.

Concurrency isn’t just for fighter programs, it can hurt transports as well…

Revelation · Tue Feb 13, 2018 1:15 pm

Noray wrote:
I'm not sure if I understand you correctly. SOC3 is the final standard. The intermediate SOC steps have become somehow obsolete in the past, as Airbus is ahead with some of them and behind schedule with others. I think the message is that Airbus will still try to reach the final step even if some intermediate steps are left out.

Thanks for the clarification. I was confused by saying SOC3 was the final standard yet things were being deleted from the final standard, so presumed there'd be another milestone to get some of them added back, but I was wrong.

In re-reading the article it seems that the reporters did get a look at the document and yet the details are so vague. Airbus claims things have moved forward by putting this framework document in place, but it seems there still is a lot of arguing ahead.

Meanwhile https://www.marketwatch.com/story/earni ... 2018-02-13 suggests that Airbus will be writing down another EUR 1B on A400M once earnings are reported in the next 24 hours, on top of the nearly EUR 7B written down so far.

Ozair wrote:
I think half the problem now is that the SOC concept has gone out the window with the delays and differing rates of progression, hence the long delay to get current aircraft up to the current standard.

Thank you also for the clarification.

Ozair wrote:
Concurrency isn’t just for fighter programs, it can hurt transports as well…

Yes, and KC-46A has around 30 frames built before any are delivered. We'll see how well that works out.

See also: A380 hand re-wiring for first 20 frames, Boeing's "Terrible Teens", etc.

Contrast to:: A350 "stop and fix" approach.

SeJoWa · Tue Feb 13, 2018 2:21 pm

Revelation wrote:
Noray wrote:
...
Ozair wrote:
Concurrency isn’t just for fighter programs, it can hurt transports as well…

Yes, and KC-46A has around 30 frames built before any are delivered. We'll see how well that works out.

See also: A380 hand re-wiring for first 20 frames, Boeing's "Terrible Teens", etc.

Contrast to:: A350 "stop and fix" approach.

Not sure if that's still Toyota's method, but "stop [the line] and fix" used to be an integral part of their lean manufacturing system.
Paired with tiger teams on standby, of course.
The pressure to get the line moving again helps to find a solution, but presupposes the courage to weed out quality flaws by actually using that stop option.

KarelXWB · Thu Feb 15, 2018 12:04 pm

The A400M program booked a € 1.3 billion charge in 2017.

http://www.airbus.com/newsroom/press-re ... orman.html

These charges are inline with analyst expectations.

Revelation · Thu Feb 15, 2018 12:38 pm

KarelXWB wrote:
The A400M program booked a € 1.3 million charge in 2017.

http://www.airbus.com/newsroom/press-re ... orman.html

Am wondering if you have anything to say about it (as this is a discussion forum, do not post links, news stories or press releases without adding your own comments to them....)?

Revelation · Thu Feb 15, 2018 10:47 pm

https://leehamnews.com/2018/02/15/airbu ... -problems/ ends with a write up of what was said on Airbus's earnings call.

It echos what has been said earlier, that Enders says this write down is the last big one we should expect due to the agreement reached with customers.

Yet we know ( as reported in this thread ) all they signed so far is a document providing the framework for an agreement.

I guess the customers still want some wiggle room ( otherwise they would have signed an actual agreement ), but at the same time Enders claims closure.

I'm confused, but am willing to go with it.

Guess I'll never make it in the diplomatic corps, sigh.

Ozair · Fri Feb 16, 2018 1:50 am

Revelation wrote:
It echos what has been said earlier, that Enders says this write down is the last big one we should expect due to the agreement reached with customers.

Yet we know ( as reported in this thread ) all they signed so far is a document providing the framework for an agreement.

I guess the customers still want some wiggle room ( otherwise they would have signed an actual agreement ), but at the same time Enders claims closure.

I guess it all depends on what the final agreement is. How much capability do the partner nations sacrifice to stop Airbus pulling additional dev charges because they can't deliver to the contract. Hopefully we get some more insight later in the year on what has been deemed too difficult or costly to implement.

KarelXWB · Fri Feb 16, 2018 4:03 pm

Regardless of what Airbus and its customers have agreed on, if it believes that 2017 has seen the last charge then the A400M should at least not be a financial drain anymore.

Ozair · Fri Feb 16, 2018 8:22 pm

KarelXWB wrote:
Regardless of what Airbus and its customers have agreed on, if it believes that 2017 has seen the last charge then the A400M should at least not be a financial drain anymore.

Problem is they have made that claim before. A400m is further along now though hence why the details of the agreement matter.

Balerit · Fri Feb 23, 2018 8:54 am

Balerit wrote:
tommy1808 wrote:
mxaxai wrote:
It does not surprise me that the SAAF preferred the simpler, smaller C160 in their regional conflict.

The C160 is actually bigger than the C130. It's cargo area is also longer, wider and higher.

They probably liked it because of that and its very good rough field capabilities. It has slightly more power per kg and a lot less weight on its equal sized wing. It has been designed for pure inter combat zone operations with rarely more than 100nm to fly. In its niche there probably never was a more effective aircraft and South Africa probably needed exactly that.

Best regards
Thomas

Yes and most importantly was it's ability to kneel allowing faster loading and unloading resulting in quicker turnaround times. Dickie Lord has some good stories about them in his books.

KarelXWB · Wed Feb 28, 2018 11:24 am

Revelation wrote:
The graphs are nice, but as you admit these planes have quite varied characteristics so simply counting tails is problematic. The situation is far more complex than market share. The big deal to me at least is about the sustainability of the product and fitness to purpose, and A400M is challenged in this regard.

Counting tails tells us something about the potential market. People argue A400M should get more orders, but if we accept the market for this type is not bigger than ~ 200 aircraft, that argument is just hypothetical.

I understand the A400M gets criticized, but what I'm really missing in this thread are solutions. So according to you, what needs to be changed on the A400M, taking into account that more orders will probably not happen?

Revelation · Wed Feb 28, 2018 1:27 pm

KarelXWB wrote:
Revelation wrote:
The graphs are nice, but as you admit these planes have quite varied characteristics so simply counting tails is problematic. The situation is far more complex than market share. The big deal to me at least is about the sustainability of the product and fitness to purpose, and A400M is challenged in this regard.

Counting tails tells us something about the potential market. People argue A400M should get more orders, but if we accept the market for this type is not bigger than ~ 200 aircraft, that argument is just hypothetical.

I understand the A400M gets criticized, but what I'm really missing in this thread are solutions. So according to you, what needs to be changed on the A400M, taking into account that more orders will probably not happen?

Given the content in bold ( and the entire context provided in the original post viewtopic.php?f=10&t=1027711&start=500#p20052521 ) those are things that cannot be changed at this point in time.

The "fitness to purpose" issue is a function of the original specifications. The "sustainability of the product" issue is a function of the cost of the product, largely also due to the original specifications.

Take for instance the engines. Pretty much every other product in its space is using variations of off-the-shelf commercial engines. Yet A400Ms goal of being a pseudo-tactical airlifter meant the engines had to be turboprops for low and slow beach operations, and its goal of also being a pseudo-strategic heavy lifter meant they needed to be very powerful to lift lots of fuel and cargo, so no existing commercial engines would do. It's engine is now in a size/weight class with no other applications in sight, thus no production volume, thus no affordable spare parts. The vendor can charge pretty much whatever it wants for spares. Given the tiny volume, they're justified. Given the vendor is a conglomerate of four different partner companies, I doubt any one of them is going to volunteer to take less money, never mind all four.

The best way to improve sustainability would be to cut the price so the second tier of customers could buy them in numbers, but its complexity and the politics around the product makes that pretty much impossible.

WIederling · Wed Mar 07, 2018 5:38 pm

some reading fodder in view of published issues about "availability":
Availability Improvements in New Transport Aircraft – The Case of the A400M:
https://www.sto.nato.int/publications/S ... 144-10.pdf

Ozair · Thu Mar 08, 2018 9:21 pm

I am surprised at the drop to 8 a month from 2020, we knew it was going to drop but this is a permanent reduction. As the article says it will take until the early 2030s to deliver all contracted aircraft at that rate. Is this an attempt to improve the export potential of the aircraft by extending production, essentially giving prospective buyers more chance to buy?

I also question the economic viability of the A400M line at eight a year, Airbus aren't making much of a profit with a production rate that low.

Airbus to slash A400M assembly rate

Airbus is to dramatically slow its final assembly rate for the A400M tactical transport from a high of 19 achieved in 2017 to only eight per year from 2020, the company confirms.

"Production will be adjusted to eight units per year as of 2020, following production of 15 A400Ms in 2018 and 11 units in 2019," Airbus says. "This adjustment is based on discussions with the launch customer nations," it says, adding that its Defence & Space unit will "pursue export opportunities beyond this level".

Airbus and its seven European customers for the Atlas transport signed a declaration of intent in early February, confirming their agreement to review a combined 170-unit order. This followed a lengthy effort by the manufacturer to ease what it described as the "huge financial burden" it was facing – a consequence of financial penalties linked to programme delays and the late introduction of promised tactical capabilities.

Under its revised production schedule announced on 7 March, Airbus Defence & Space should end 2019 having delivered approximately 80 aircraft from the total of 174 A400Ms currently ordered, also including lone export buyer Malaysia. At the reduced rate of eight per annum, it should take a further 12 years for it to complete the remaining aircraft, extending work into the early 2030s.

The A400M rate announcement was made in conjunction with a move by Airbus's commercial arm to also slow its A380 output to six superjumbos per year from 2020. The combined measures will affect up to 3,700 jobs in France, Germany, Spain and the UK, the manufacturer says.

"Airbus has to ensure the best possible production flow for its products," the company says. "These rate adjustment decisions provide clear visibility for customers, the supply chain and employees over the coming years."

https://www.flightglobal.com/news/artic ... te-446551/

Revelation · Thu Mar 08, 2018 9:42 pm

Ozair wrote:
I am surprised at the drop to 8 a month from 2020, we knew it was going to drop but this is a permanent reduction. As the article says it will take until the early 2030s to deliver all contracted aircraft at that rate. Is this an attempt to improve the export potential of the aircraft by extending production, essentially giving prospective buyers more chance to buy?

I also question the economic viability of the A400M line at eight a year, Airbus aren't making much of a profit with a production rate that low.

Airbus to slash A400M assembly rate

Airbus is to dramatically slow its final assembly rate for the A400M tactical transport from a high of 19 achieved in 2017 to only eight per year from 2020, the company confirms.

"Production will be adjusted to eight units per year as of 2020, following production of 15 A400Ms in 2018 and 11 units in 2019," Airbus says. "This adjustment is based on discussions with the launch customer nations," it says, adding that its Defence & Space unit will "pursue export opportunities beyond this level".

Airbus and its seven European customers for the Atlas transport signed a declaration of intent in early February, confirming their agreement to review a combined 170-unit order. This followed a lengthy effort by the manufacturer to ease what it described as the "huge financial burden" it was facing – a consequence of financial penalties linked to programme delays and the late introduction of promised tactical capabilities.

Under its revised production schedule announced on 7 March, Airbus Defence & Space should end 2019 having delivered approximately 80 aircraft from the total of 174 A400Ms currently ordered, also including lone export buyer Malaysia. At the reduced rate of eight per annum, it should take a further 12 years for it to complete the remaining aircraft, extending work into the early 2030s.

The A400M rate announcement was made in conjunction with a move by Airbus's commercial arm to also slow its A380 output to six superjumbos per year from 2020. The combined measures will affect up to 3,700 jobs in France, Germany, Spain and the UK, the manufacturer says.

"Airbus has to ensure the best possible production flow for its products," the company says. "These rate adjustment decisions provide clear visibility for customers, the supply chain and employees over the coming years."

https://www.flightglobal.com/news/artic ... te-446551/

Ok, putting this together with #622 we have a production rate of:

2017: 19
2018: 14
2019: 11
2020: 8

and maintaining 8 for the foreseeable future.

I agree that can't be a profitable rate. I thought the production rate goal was 30 per year? Must be a lot of unused tools, fixtures, facilities. I'm sure Enders et al will tell us the losses are not material. There's some truth in that, but A400M and A380 are two very large investments that are not producing meaningful return on those investments and now are committed to being up and running for another decade or more.

Ozair · Thu Mar 08, 2018 10:12 pm

Revelation wrote:
I agree that can't be a profitable rate. I thought the production rate goal was 30 per year? Must be a lot of unused tools, fixtures, facilities.

Additionally, it doesn’t lend to being competitive on price. A higher production rate would provide economies of scale that won’t be present at just 8 a year.

How hard will it be to increase production above 8 a year if a few export orders do come in? Do we expect partner nations to delay or sell off their own production slots in a similar way the Eurofighter has been exported?

KarelXWB · Thu Mar 08, 2018 10:22 pm

As I pointed out earlier, I think it's time to accept that the A400M market is not much bigger than the current order book, thus we should not expect much export orders.

Ozair · Thu Mar 08, 2018 10:48 pm

KarelXWB wrote:
As I pointed out earlier, I think it's time to accept that the A400M market is not much bigger than the current order book, thus we should not expect much export orders.

In that context then, what point is there to slow production to 8 a year? Is it to keep the workforce, slow customer delivery, meet the capability delivery required through slow incremental improvement?

If the assessment is that there will be few export orders then wouldn’t delivering as fast as possible and closing down the line be better for Airbus and the respective partners?

KarelXWB · Thu Mar 08, 2018 11:02 pm

Ozair wrote:
In that context then, what point is there to slow production to 8 a year? Is it to keep the workforce, slow customer delivery, meet the capability delivery required through slow incremental improvement?

Shutting down production would result in large write offs, nobody wants to be that guy that puts the trigger. Thus current management would stretch out production as far as possible with minimal losses. By the time production needs to wind down in 2030, current management will be long gone and it will be someone else's problem.

mxaxai · Fri Mar 09, 2018 1:01 am

Ozair wrote:
KarelXWB wrote:
As I pointed out earlier, I think it's time to accept that the A400M market is not much bigger than the current order book, thus we should not expect much export orders.

In that context then, what point is there to slow production to 8 a year? Is it to keep the workforce, slow customer delivery, meet the capability delivery required through slow incremental improvement?

If the assessment is that there will be few export orders then wouldn’t delivering as fast as possible and closing down the line be better for Airbus and the respective partners?

The partners do not want all aircraft delivered at once. Most of them have a fixed budget per year and couldn't afford to take delivery of all frames over a short timespan.

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