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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 11:52 pm

CFRPwingALbody wrote:
I think one key issue with the A380 is the secondary market, airlines must be found that dare to take the 12year old planes and use them until end of plane live. I wouldn't be surprised if Emirates has to abandon it's 12year use plan.


12 years is an A.net myth. The initial lease may be for 12 years but historically their Boeing 772's were kept for 20 years +/- and their 773's (non-ER) were kept for 16 years +/-. They have retired 1 77W (after 12 years) but of the oldest 30 the average age is over 11 years with several past 12 and no retirement indicated. Except for the early A380's I see them continuing past 12 years with the leases because it makes more sense financially. As a passenger if the interior has been refurbished you have no idea how old the airplane is and most don't care.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 12:02 am

I think that Malaysia assumes a low usage, thus long live. It would be nice if I'm wrong.
A lot of plane stowage has been created besides the A380-FAL; Terraserver. Could Airbus be planning a FAL stop during the Beluga XL production? The Beluga XL's are assembled inside the A380 FAL right?
Lots of additional facilities have been build to ramp the A350 production. Possibly the A380 FAL could be used for A350.
At the same time Airbus planes to ramp-up A320 production rate. For this two A380 flight-line hangars have been converted in A320 Hamburg FAL4. Also three A320 painting halls have been constructed beside the two A380 painting halls. In Toulouse facilities have to be created so the cabin outfitting of the A320's assembled in Toulouse can also happen there, instead of at Hamburg.
So for the A380FAL buildings other uses are possible, but the factories for part assembly are most likely more difficult to purpose. And then there is also the problem that could happen when A380 production ramps up again.
I think the A380plus has to be developed, also to improve the already produced airplanes. otherwise I fear there will be hardly any secondary market demand for the A380. There are interesting times ahead for the A380 program.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 2:20 am

CFRPwingALbody wrote:
But I can not imagine that they have written off all the plane value (payed enough rent to the lessor so it has a good return on it's plane investment), so it can be scraped. (The early batch with the wrong wiring are a exception.)

https://www.ainonline.com/aviation-news ... ement-plan is from 2013 and at that point Doric had 14 A380s on lease to EK. The article says, believe it or not:

Dr. Peter Hein, Doric’s managing director, admits the lessor’s A380 program faces “hard questions,” but expresses satisfaction with the aircraft to date. “With respect to our Airbus A380s under management, we only have excellent experience,” he said, before explaining the mechanics of his business.

Over the 12-year lease, the debt is fully amortized and the investor(s) [get] more than 100 percent of the equity investment in distributions. The relevant amounts to pay debt service plus distributions result from the contractual monthly lease rents. At Year 12, investors have a positive return already, plus an unencumbered plane with four engines.

What this means is some (many?) airlines are willing to pay high rents to avoid all the down side involved with having a bunch of depreciating capital equipment on the books.
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 2:32 am

Always the chance that EK could hand back early frames that were heavier and had several rounds of rewiring but extend leases on the post 2010-models and keep them longer like they did with the 777s.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 3:09 am

Revelation wrote:
CFRPwingALbody wrote:
But I can not imagine that they have written off all the plane value (payed enough rent to the lessor so it has a good return on it's plane investment), so it can be scraped. (The early batch with the wrong wiring are a exception.)

https://www.ainonline.com/aviation-news ... ement-plan is from 2013 and at that point Doric had 14 A380s on lease to EK. The article says, believe it or not:

Dr. Peter Hein, Doric’s managing director, admits the lessor’s A380 program faces “hard questions,” but expresses satisfaction with the aircraft to date. “With respect to our Airbus A380s under management, we only have excellent experience,” he said, before explaining the mechanics of his business.

Over the 12-year lease, the debt is fully amortized and the investor(s) [get] more than 100 percent of the equity investment in distributions. The relevant amounts to pay debt service plus distributions result from the contractual monthly lease rents. At Year 12, investors have a positive return already, plus an unencumbered plane with four engines.

What this means is some (many?) airlines are willing to pay high rents to avoid all the down side involved with having a bunch of depreciating capital equipment on the books.


Investors don't buy planes for some low nominal yield that is likely negative in real (inflation-adjusted) terms. There are much safer instruments (T-bills) for that kind of low return.

Given the risk profile, historically, of the airline industry and of the A380 specifically, investors would probably want stock-market-like returns on A380 financing deals.

One possible reason the deal fell apart at the end is that EK's lessors came back and said, "If Airbus can't guarantee production for 10 years, we're going to have to charge a much higher lease rate to cover our investor's risk of holding a basically worthless asset at the end of lease term." One might expect that EK would have checked with investors about that preference and received a full commitment before these negotiations went so deep, but at least one party - Airbus, EK, financiers - had a sudden, unexpected misgiving. EK's reps would have been presenting Airbus' commercial terms to potential lessors/banks; their responses - in terms of lease/finance terms - would have lagged the EK-Airbus interface. Seems as likely it was the financiers as EK/Airbus.

While it's true that Dr. Peter's is currently painting a bright picture on A380 fund performance, (1) of course a CEO subject to liability and/or reputational damage is going to say positive things about the thing he sold investors on and (2) per other stories, IIRC the "safety valve" for the value proposition is that the lessor can part-out these early-returning A380's for a handsome residual value. As time progresses and there are more A380's leaving service than entering, demand for such part-outs would be very low and consequently the safety-valve residual value much lower. So even a genuinely pleased Dr. Peters could be less hopeful about future A380 deals than they are about the current deals.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 3:40 am

As well as bad faith bargaining speculation, it is at least as probable that both Airbus and EK are aware of the mutual problems, and have not been able to see a mutually beneficial contract without significant risks for either party. In which case good faith negotiations will continue.
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 3:43 am

Matt6461 wrote:
Investors don't buy planes for some low nominal yield that is likely negative in real (inflation-adjusted) terms. There are much safer instruments (T-bills) for that kind of low return.

Given the risk profile, historically, of the airline industry and of the A380 specifically, investors would probably want stock-market-like returns on A380 financing deals.

Agreed. Clearly Doric / Amedeo / Dr Peters et al expect to get more than scrap value after 12 years.

One possible reason the deal fell apart at the end is that EK's lessors came back and said, "If Airbus can't guarantee production for 10 years, we're going to have to charge a much higher lease rate to cover our investor's risk of holding a basically worthless asset at the end of lease term." One might expect that EK would have checked with investors about that preference and received a full commitment before these negotiations went so deep, but at least one party - Airbus, EK, financiers - had a sudden, unexpected misgiving. EK's reps would have been presenting Airbus' commercial terms to potential lessors/banks; their responses - in terms of lease/finance terms - would have lagged the EK-Airbus interface. Seems as likely it was the financiers as EK/Airbus.

While it's true that Dr. Peter's is currently painting a bright picture on A380 fund performance, (1) of course a CEO subject to liability and/or reputational damage is going to say positive things about the thing he sold investors on and (2) per other stories, IIRC the "safety valve" for the value proposition is that the lessor can part-out these early-returning A380's for a handsome residual value. As time progresses and there are more A380's leaving service than entering, demand for such part-outs would be very low and consequently the safety-valve residual value much lower. So even a genuinely pleased Dr. Peters could be less hopeful about future A380 deals than they are about the current deals.

It seems EK is really digging in their heels, so it must be due to some primary force such as push back from the financiers.

https://www.bloomberg.com/news/articles ... a380-jumbo says:

If we order any more, we want to make absolutely sure that the will is there contractually to continue the line for 10 to 15 years,” Clark said. Airbus “would like to put more aircraft into us and everyone else, but their board may have a view that says ‘If you don’t sell any more, Emirates or no Emirates, we don’t want you to do it’, so we need to see something from them which says ‘We will do this’.”


It must not have been a fun plane ride home for Enders, Bregier et al.

Hopefully STC comp'd them some first class suites on an A380 so they could toss down a few at the upper deck bar!
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 5:23 am

Revelation wrote:
https://www.bloomberg.com/news/articles ... a380-jumbo says:


One implication from this whole story: EK is not confident that their current orders aren't vulnerable to program termination without adequate compensation from Airbus. I can't imagine that Airbus gave in 2013 what it refuses to give now, when its position is more desperate.

That inference implies a higher likelihood that the A380 dies around 2020, and that EK's latter tranche of ~30 frames from ~2021 never gets delivered. There are already gaps in the production skyline in 2019, no way Airbus keeps the line open during 2020 without further orders if there's wiggle room (as EK seems to believe).
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 5:24 am

It must not have been a fun plane ride home for Enders, Bregier et al.

Hopefully STC comp'd them some first class suites on an A380 so they could toss down a few at the upper deck bar!


It sure wasn't fun. But at some point they must start to find out what the customers really want and then decide if they do it or not. If customers want a neo then don't offer new wingtips. It's all or nothing now. I am sure, the other guys (DLH, SIA, AF, etc), when they need a replacement for their A380s in a couple of year will not want some warmed up A380. They want new stuff. Maybe this is also the problem with the A330neo. They offered something but not exactly what the customers want...
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 6:20 am

bigjku wrote:
The issue has been Airbus having a unsteady performance recently over he last 5 years or so. From 2012 to 2016 it drove free cash flow of $1.59 billion. Boeing drove $33.1 billion. The gap is getting worse as in 2017 Airbus has negative free cash of $4.2 billion thru 9 months and Boeing has a positive number of $9 billion.

That is really the biggest thing for Airbus to overcome and what would see their stock take off the most. If they can start to efficiently drive revenue into cash they should be almost self financing. Hell thats why many investors were big on them going into 2017 after the Boeing run up. The expectation is at some point they will generate cash in large amounts. It just keeps not happening and people are noticing.

https://www.fool.com/investing/2017/11/ ... again.aspx


A couple of points.

Firstly Airbus has been investing heavily in inventory to support heavy ramp-ups across the range.
That hits cash flow.

But what really hits cash flow is that every model in the Airbus line-up has had issues in ramp-up/delivery.
Most especially of course the A320NEO. But the A350 too has had serious issues, and the A330NEO has been delayed 9 months or so.
There isn't a programme where Airbus haven't had expensive aircraft stood around either waiting for engines or cabin equipment.

I don't believe A-net has really fully comprehended the issues Airbus have had with production in the last couple of years.

In terms of the comparison with Boeing it must also be noted that Boeing will print far more cash with their defence contracts that Airbus ever will - that is the nature of how the US DOD does its business with major defence contractors (this one is my field)

None of that changes any of the numbers you quote.

But Airbus should go strongly cash positive once it gets its ramp-ups under control.

As a final point, free cash flow by definition is AFTER R+D expense is taken into account

Rgds
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 7:16 am

Flightglobal reporting A380 unlikely at DAS. Tim Clark says EK owners are seeking assurances that the A380 line will continue for 10-15 years

https://www.flightglobal.com/news/artic ... it-443264/
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 7:42 am

qf789 wrote:
Flightglobal reporting A380 unlikely at DAS. Tim Clark says EK owners are seeking assurances that the A380 line will continue for 10-15 years

https://www.flightglobal.com/news/artic ... it-443264/


With Enders / Bregier no longer at the show, this is stating the obvious really.

However, that Emirates is angling for up to 15 years production assurance, it looks like Mr Enders' comments about being in production for 10 more years etc seems either premature or just ill-timed.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:05 am

Thx for link DWC.Off subject but it does strike me just how 'grown up' SIA are compared to ME3 shernanigans.They quietly work out what their best fleet is,what should be leased/owned,the correct balance of seating across 4 grades. (Love the new layout on their A380's btw),their route planning etc etc.
Their future fleet has a lovely balance too imho.All done with none of this public fuss and bother.
For some odd reason I have never used them but looking at their soft product I think I will next time I have the chance.
Ok back to Emirates squabbling!
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:19 am

Matt6461 wrote:
Lower demand = lower price and quanity; lower quantity = higher production cost.
Folks who raise this spares rationale assume that basic economic dynamics won't make spares production as unprofitable as frame production.
Why? Everything that makes the A380 harder to sell and produce for a profit also applies to its spare parts.
What's more, we can expect a good share of the in-service fleet to be scavenged for spares, flooding the market and further depressing prices.

At best it's speculative that future spares sales will be profitable, at worst it's folly. Businesses shouldn't take losses in year 0 for small speculative gains in year 15.


Airbus can price spares far higher than the cost of the same part that goes into an airframe. Furthermore, they don't have to concern themselves with assembly costs.

Regarding scavenging spares off the fleet, thats all well and good, but you'll likely not get too many off the early birds and you'll not be replacing 'safe life' parts with anything scavenged.

You also have various changes to the A380 over the years, some of which will affect what spares are fit to carry over from even, say, frame 100.


If Airbus are saying that the profit/loss from 8 frames a year is noise, then they will definitely push that to profit with spares.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:21 am

To me it looks like Airbus have been used to give this show some attention. Without the speculated 380 orders, what is there really to talk about?
Even the 40 B787-10 are a far cry from the 100 x A380 or 150 x B777X orders we used to see there.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 10:29 am

The premature departure of Airbus senior executive from Dubai is sending a message to EK. The message, is you can only push us so far. The token, by EK standards, 787 order, is tit for tat, which when the detail emerges, may be model hopping 777X options.

There are buybacks on the existing A380 orders. EK and leasors obviously want more, as these translate directly to lifetime cost of ownership. The likely compromise sought by EK, is a two tier higher buyback (higher if the program is cancelled within X years of taking delivery, which would also be a disincentive to Airbus to cancel the project / incentive to develop future variants). EK may even be asking for retrospective changes. Airbus may be countering with a lower buyback if a Boeing product replaces A380, and the reaction of the customer to that, is naturally, guarantee we can replace A380 with A380.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 10:39 am

Revelation wrote:
If we order any more, we want to make absolutely sure that the will is there contractually to continue the line for 10 to 15 years,” Clark said. Airbus “would like to put more aircraft into us and everyone else, but their board may have a view that says ‘If you don’t sell any more, Emirates or no Emirates, we don’t want you to do it’, so we need to see something from them which says ‘We will do this’.”



Sometimes the customer may be asking too much. I mean, 15 years production, really? Airbus has already agreed on 10 years production and buybacks. Perhaps EK demands have reached the level of unrealistic, thus the manufacturer walks away.
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 11:14 am

KarelXWB wrote:
Sometimes the customer may be asking too much. I mean, 15 years production, really? Airbus has already agreed on 10 years production and buybacks. Perhaps EK demands have reached the level of unrealistic, thus the manufacturer walks away.

parapente wrote:
Thx for link DWC.Off subject but it does strike me just how 'grown up' SIA are compared to ME3 shernanigans.They quietly work out what their best fleet is,what should be leased/owned,the correct balance of seating across 4 grades. (Love the new layout on their A380's btw),their route planning etc etc.

I double-plus that : SQ & most other airlines know how to behave.

As much as I like flying EK, EPIRATES are bullying the industry & only France / Germany / China / Canada agree that the ME3 claim to world dominance is illegitimate due to their low % of O/D. The only problem for France & Germany is that the UAE & Qatar are also big Airbus buyers.
The EK / EY / FZ / G9 models, while remarkably well thought of from the UAE's point of view ( and QR for Qatar ), are economically illegitimate from the bigger countries POV & many are saying it. But because China & others ( India, Russia, Vietnam, etc ) are reorganizing their industry faster than ever, EK & QR need to follow the BICYCLE PRINCIPLE : "keep riding or fall" so as to cement their airlines positions & keep the lead, while developping their tourism industry to attract even more pax, lure more financial & industry companies to sustain their economy.
EK is Dubai's lifeline, QR is Qatar's. Small wonder the UAE are in talks with Russia to produce a version of the MC21.
Note how the unprecedented joint embargo on Qatar also happens to benefit SV / MS / GF / EK / EY / FZ / G9...
In the long run, MS-IR-SV are the natural LT competitors that could imitate them, à la TK, let alone India if they ever coordinate.
So as the ME3 can be strategically cornered anytime ( any country can ditch the bilaterals ), they need to think very long term & cement their future with the A380.
Meanwhile, Singapore ( the model Dubai uses ) is in a less favourable geographic position relative to long haul & SIA are very busy in that other game fencing off dire LCC competition : SQ has not grown much in the past decade, there is no room left, but SIA has thanks to their non-premium airlines Scoot & SilkAir ( and Tigerair until recently )
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 12:56 pm

Planesmart wrote:
The premature departure of Airbus senior executive from Dubai is sending a message to EK. The message, is you can only push us so far. The token, by EK standards, 787 order, is tit for tat, which when the detail emerges, may be model hopping 777X options.

Yet STC's statements to the press show no compromise either.

Seems the A380's fiscal realities are catching up with it.

It really is only of use to a small number of airlines on a small number of routes so resale value is a huge concern.

It's low volume of production and high cost of manufacture don't leave much room for Airbus to make fiscal concessions.

There are buybacks on the existing A380 orders. EK and leasors obviously want more, as these translate directly to lifetime cost of ownership. The likely compromise sought by EK, is a two tier higher buyback (higher if the program is cancelled within X years of taking delivery, which would also be a disincentive to Airbus to cancel the project / incentive to develop future variants). EK may even be asking for retrospective changes. Airbus may be countering with a lower buyback if a Boeing product replaces A380, and the reaction of the customer to that, is naturally, guarantee we can replace A380 with A380.

Enders public commitment to ten more years of production seems to be hampering Airbus's ability to negotiate.

Ten years of production is now the starting point of negotiations rather than the end.

It's one thing to say something to the press in a moment of euphoria, it's a totally different thing to make contractual commitments.

Perhaps Enders should have stuck to running Airbus corporate and left the salesmanship to Leahy et al?

KarelXWB wrote:
Revelation wrote:
If we order any more, we want to make absolutely sure that the will is there contractually to continue the line for 10 to 15 years,” Clark said. Airbus “would like to put more aircraft into us and everyone else, but their board may have a view that says ‘If you don’t sell any more, Emirates or no Emirates, we don’t want you to do it’, so we need to see something from them which says ‘We will do this’.”



Sometimes the customer may be asking too much. I mean, 15 years production, really? Airbus has already agreed on 10 years production and buybacks. Perhaps EK demands have reached the level of unrealistic, thus the manufacturer walks away.

STC's hands may be tied by the financial community and EK's own recent results that show their growth is not on the same stellar curve of days past.

He may have no other choice but to play hardball.
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 3:18 pm

Revelation wrote:
It also looks like the "A380 Plus" is off the table:

DUBAI - Emirates is rejecting the proposed Airbus A380plus concept in spite of its plans to continue ordering more of the largest commercial aircraft.

“We would rather they just offered us the continuation of the line,” Emirates Airline President Tim Clark said at the Dubai Airshow. “I have never been a big fan [of the A380plus].

Ref: http://aviationweek.com/commercial-avia ... s-continue


No surprise there. They already said at/after Paris that they're not taken by it.

Revelation wrote:
Reuters: Emirates believes Airbus can bow to demands on A380 programme says:

DUBAI (Reuters) - Emirates believes Airbus can meet demands from the Dubai government to guarantee development of the A380 jet programme, as it challenges the planemaker to see who will blink first in talks over a new $16 billion superjumbo plane order.


The highlighted bit sounds like they want some updates.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 3:33 pm

Revelation wrote:
STC's hands may be tied by the financial community and EK's own recent results that show their growth is not on the same stellar curve of days past.
He may have no other choice but to play hardball.

Yes from a rational finance & legal point of view.
But here is where it gets interesting, because it was unnecessary & harmful to EK ( and Airbus ).

Game Theory shows that broadcasting demands & underlining a product's problems only makes it harder, raising concerns & actually raising lease prices as the information gets "perfect" ( all there is to know is known ) & "symmetrical" ( everybody knows & I know that you know that I know that you know... ), thus raising expectations & conditions & therefore pushing up prices ( STC's problem ).
Asia does things in the quiet & they get solved globally at a lower cost.

My reading is that Airbus knowing this possibility ( Game theory with strategic Information 101 ) decided that EK were both too unpredictable & too price-making ( competition is not working - they set the price as there are other sure customers on the horizon ) to invest into the Neo at this point of the game. EK may have put themselves in a shakier position than they thinkt, because as Airbus are internally gambling on China in the LT, they may well let EK pester & tamper all they want, just to not lose money.

Last, EU need EK, EK need both Airbus AND bilaterals, but EU need not the bilaterals. If EK ditch their A380 & go for more 777X as replacements, it is the priviledge of France & Germany to extend or renew the bilatetals - or not ( and, just a thought, taking the Game steps further : if the UAE can embargo Qatar, the EU surely can the UAE ).
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 3:33 pm

travelhound wrote:
As per the abcdlist A380 production website

http://www.abcdlist.nl/a380f/a380f.html

Emirates - 113 built, parts produced, 100 delivered
QATAR - 10 built, 8 delivered
Singapore - 5 built, 0 delivered.

(113+10+5)-(100+8+0)=30


The following aircraft have been built & not delivered:

Emirates: MSN 232, 234, 238, 240, 248, 249, 250 (7 total).
Qatar: MSN 235, 254 (2 total).
Singapore: MSN 247, 251, 253, 255 (4 total).

For a total of 13 aircraft at different stages of assembly. Even if we include the 2 additional ex-Skymark aircraft, it's far below the 22 you mentioned.

As the current production rate is 12 aircraft per month, there is just no way 22 aircraft could have been built.
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 6:02 pm

Egerton wrote:
If I were a senior person in Airbus management, or if I were a member of the Airbus Board of Directors, then in both cases I would be seriously displeased by recent A380 events.

When negotiating, it is best to remember that to make a deal, it has to benefit both sides. It takes two to tango. I think it likely that the offender in this case is the top national leader in that state. Insulting your partner in public can only be done once. I would now be questioning if Emirates are a firm with whom I wish to do business. I would be minded to go home to Toulouse, throw the Emirates paperwork into File 13, and spend my time doing useful work with people who can be relied upon.


"qf789 wrote:
Flightglobal reporting A380 unlikely at DAS. Tim Clark says EK owners are seeking assurances that the A380 line will continue for 10-15 years

https://www.flightglobal.com/news/artic "

It is not Sir Tim Clark initiating this bizarre way of seriously displeasing Airbus top brass. Sadly Sir Tim has been reduced to being the mouthpiece to the EK Owners, i.e. top national leader in that state. Meanwhile back in Toulouse, the chances of the A380 line being closed prematurely have increased. A serious blunder by the EK Owners.

I suspect it will cost the EK Owners dear, either by having no more new A380s to purchase in due course, or they will become available only at a price which will take into account the risk factor in dealing with folks capable of such behaviour. What goes around come around, a bit like being hit by your own boomerang.

Likewise, the price of a A380NEO will go up, with more cash up front (per Lowbank) and lower Airbus risk.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 6:07 pm

Egerton wrote:
It is not Sir Tim Clark initiating this bizarre way of seriously displeasing Airbus top brass. Sadly Sir Tim has been reduced to being the mouthpiece to the EK Owners, i.e. top national leader in that state. Meanwhile back in Toulouse, the chances of the A380 line being closed prematurely have increased. A serious blunder by the EK Owners.


The chances really haven't changed. EK knows that current Airbus management has no desire to see A380 production end for a variety of reasons.
 
tjh8402
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 6:19 pm

DWC wrote:

Last, EU need EK, EK need both Airbus AND bilaterals, but EU need not the bilaterals. If EK ditch their A380 & go for more 777X as replacements, it is the priviledge of France & Germany to extend or renew the bilatetals - or not ( and, just a thought, taking the Game steps further : if the UAE can embargo Qatar, the EU surely can the UAE ).


The EU-UAE relationship is much bigger than the A380. EY is also a UAE airline and is buying plenty of Airbus aircraft (they've got 20 more on order than they do Boeings). The UAE is a big military partner of the EU. All their tanks as well as most of their armored and tracked vehicles, as well as their AA defense are from Europe (mainly French). Their Air Force has plenty of European offerings including A330 MRTT and Mirage fighters. They're big boys. Just like I've argued DL won't let a trade dispute affect their relationship with Boeing, I don't see the EU and UAE letting hurt feelings over a press conference end a very productive relationship.
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 6:44 pm

tjh8402 wrote:
DWC wrote:
Last, EU need EK, EK need both Airbus AND bilaterals, but EU need not the bilaterals. If EK ditch their A380 & go for more 777X as replacements, it is the priviledge of France & Germany to extend or renew the bilatetals - or not ( and, just a thought, taking the Game steps further : if the UAE can embargo Qatar, the EU surely can the UAE ).


The EU-UAE relationship is much bigger than the A380. EY is also a UAE airline and is buying plenty of Airbus aircraft (they've got 20 more on order than they do Boeings). The UAE is a big military partner of the EU. All their tanks as well as most of their armored and tracked vehicles, as well as their AA defense are from Europe (mainly French). Their Air Force has plenty of European offerings including A330 MRTT and Mirage fighters. They're big boys. Just like I've argued DL won't let a trade dispute affect their relationship with Boeing, I don't see the EU and UAE letting hurt feelings over a press conference end a very productive relationship.

Depends
Your facts are globally right but it depends on how you look at them.
1. I of course included EY in my UAE argument, what I said is that the EU does not need the bilaterals as the UAE need them : there is no airline tickets market for EU carriers to fly into the UAE, whereas UAE airlines model falls apart without them. The EU have two Jokers to play with, the UAE two airlines to play with the same Joker.
2. I haven't checked but the military toys must be "small change" compared to the global EK / EY / G9 orders.
3. The GCC are globally dominated by the USA with bases in Qatar & Saudi ; military speaking, the EU & France have little influence and will not go against Uncle Sam.
4. We are talking to a threat to the A380 & repeated treacherous tactics by EK after the deal was seemingly signed by both parties or Enders & Brégier would not have flown in to be slapped in the face : these breaches of etiquette are always repaid & the French like Charles de Gaulle's saying "la vengeance est un plat qui se mange froid" ( vengeance is a dish best served cold ). Like the Chinese, Airbus will wait their time.
5. DL : their relations with Boeing are already quite sour.

I still think both EK & Airbus need the order, but EK have made things very difficult & much PRICIER in every way (so did Airbus by messing up)
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 7:17 pm

DWC wrote:
4. We are talking to a threat to the A380 & repeated treacherous tactics by EK after the deal was seemingly signed by both parties or Enders & Brégier would not have flown in to be slapped in the face : these breaches of etiquette are always repaid & the French like Charles de Gaulle's saying "la vengeance est un plat qui se mange froid" ( vengeance is a dish best served cold ). Like the Chinese, Airbus will wait their time.

We can add more fingers to that slap in the face based on what STC has been saying today:
• STC saying that he's sure that Airbus's Board of Directors will grant his request (going over the heads of Enders and Bregier)
• STC saying that he didn't know about A350's reworked rear bulkhead and thus more seats till it was too late to do anything about it (making Enders and Bregier look incompetent)

I still think both EK & Airbus need the order, but EK have made things very difficult & much PRICIER in every way (so did Airbus by messing up)

I appreciate what you are writing. Neither side is covering themselves with glory here. It'd be best for both parties if they patch things up ASAP instead of letting them fester. We've been told there will be an Airbus announcement tomorrow AM. It'd be best for everyone if they could some how resolve this by then.
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tjh8402
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 7:32 pm

DWC wrote:
1. I of course included EY in my UAE argument, what I said is that the EU does not need the bilaterals as the UAE need them : there is no airline tickets market for EU carriers to fly into the UAE, whereas UAE airlines model falls apart without them. The EU have two Jokers to play with, the UAE two airlines to play with the same Joker.
2. I haven't checked but the military toys must be "small change" compared to the global EK / EY / G9 orders.
3. The GCC are globally dominated by the USA with bases in Qatar & Saudi ; military speaking, the EU & France have little influence and will not go against Uncle Sam.
4. We are talking to a threat to the A380 & repeated treacherous tactics by EK after the deal was seemingly signed by both parties or Enders & Brégier would not have flown in to be slapped in the face : these breaches of etiquette are always repaid & the French like Charles de Gaulle's saying "la vengeance est un plat qui se mange froid" ( vengeance is a dish best served cold ). Like the Chinese, Airbus will wait their time.
5. DL : their relations with Boeing are already quite sour.

I still think both EK & Airbus need the order, but EK have made things very difficult & much PRICIER in every way (so did Airbus by messing up)


My point on EY was that if we're looking at who benefits from whom in airline sales, it's not as though the UAE has turned its back on the EU. EY remains a good Airbus customer.

I can't speak in monetary values, but European equipment is certainly quite numerous in the UAE inventory. Scanning the Wikipedia page, I see:

388 French Le Clerc tanks
76 British Scorpion reconnaissance tanks
over 400 French armored personnel carriers
49 Mirage fighters
3 A330 tankers
mix of 224 trainers from France, UK , Italy, and Switzerland

The Eurofighter Typhoon and Dassalt Rafale have both also seen over a hundred sales between the two to various Middle Eastern Countries. I haven't looked into shipbuilding or missiles, but I'm sure there's plenty of business there.
 
2175301
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 7:55 pm

I actually think a lot of people are over-blowing the complexity of things. Here is how I see things going down...

Airbus and EK are discussing more EK A380's and there seems to be a serious mutual interest.

Just prior to final negotiations Aibus's CEO Mr. Tom Enders publically states that the A380 will remain in production for at least a decade. I am quite sure that the Airbus negotiators also said the same.

EK essentially said... "Yes, that is what we want to see to ensure the value of our order.. Just put it in writing..."

Now, above several people seemed to disputed my previous claim several pages back that such things as putting things in writing are in fact normal during negotiations; and that the real issue relates to the fact that Airbus was surprised by such a request. Really? Why do contracts and negotiations for them exist at all if not to put things in writing. It has been my personal and very painful at times, and is reported to be a common issue, that verbal promises seem to have a way of vanishing if they mean real money or inconvenience.

Somehow a lot of people seem to be blaming EK for what is literally just a very common position during negotiations... Put it in writing. The fact that Airbus balked at that... that the CEO had made such public (and likely private) promises apparently without Airbus Board Approval so they could easily put it in writing (in some way as there are various ways of writing that); is not EK's fault. Any competent contract negotiator should fully expect a "put it in writing" response to any and every verbal promise.

So the current story is that this will eventually go through (i.e. that Mr. Enders will ask and get Board approval) shows, in my opinion, just how unprepared Airbus was for this negotiation.

A lot of people can spout theories about negotiation and the process for setting things up for success (and I have the recent 2017 book on "The Lost Art of Closing" by: Anthony Iannarino which goes over all those steps); and all of those steps could have been properly done to the "T"; and the negotiations will still fail if one side is not willing to "put it in writing" - especially public statements of the CEO that affect the product in question.

I myself have negotiated and signed multiple multi-million dollar contracts; dealt with many contract issues (learned many lessons), and even used the "force majeure" clause once on several of those contracts with complete acceptance by the other parties. For a contract negotiation to fail over a "put it in writing" of a very public CEO statement... is just stunning to me.

Have a great day,
 
CFRPwingALbody
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:03 pm

Huhu. A 15year production run at rate 8/year is 120 planes if I'm not mistaken. And the order was only 38, and airbus still has 44 planes to deliver to EK. That's a total backlog of 82 planes for 15 years.
No wonder Airbus left the negotiations.
If EK wanted a 15 year production garante, fill the minimal production requirement. They should have placed 76 additional orders.
Nice to know that EK will most likely continue using their first batch of A380's.

Does someone know how many A380's have the wiring fix, and how many has EK?
Those will most likely leave service early, possibly after only ~10 years.
 
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william
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:08 pm

The question is why is putting the 10 year A380 production guarantee so contentious if the company has publicly stated it will keep the line open?..............Unless, Airbus management is still considering...................................Hmmm, remember the Airbus CFO from a year or so ago that was quoted about the A380 fate that had to be walked back?

Corporate Airbus is being very prudent, good for them, their profits and their shareholders.
 
CFRPwingALbody
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:15 pm

The current board of Airbus might have the oppinion to continue A380 production. But what happens when the board changes in a couple of years. Off coarse the commitment to continue production should be written in the purchase contract. I'm not speculating further because we don't have the details, and most likely we'll never see them.
 
N212R
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:34 pm

astuteman wrote:
But what really hits cash flow is that every model in the Airbus line-up has had issues in ramp-up/delivery.
Most especially of course the A320NEO. But the A350 too has had serious issues, and the A330NEO has been delayed 9 months or so.
There isn't a programme where Airbus haven't had expensive aircraft stood around either waiting for engines or cabin equipment.

I don't believe A-net has really fully comprehended the issues Airbus have had with production in the last couple of years.


In the same way that many of the loyal Airbus posters haven't been tripping over their feet to emphasize that critical issue.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:48 pm

N212R wrote:
astuteman wrote:
But what really hits cash flow is that every model in the Airbus line-up has had issues in ramp-up/delivery.
Most especially of course the A320NEO. But the A350 too has had serious issues, and the A330NEO has been delayed 9 months or so.
There isn't a programme where Airbus haven't had expensive aircraft stood around either waiting for engines or cabin equipment.
I don't believe A-net has really fully comprehended the issues Airbus have had with production in the last couple of years.

Nor have there been many A-net posters anxious to bring unwanted attention to that critical issue.

It is a very complex question + requires many technicalities of how Airbus manage all their financial flows & payments to subconstructors. Those are corporate secrets & such masive financial "immobilizations" cannot go long unnoticed by financial analysts. Airbus shares trading value have triplicated in the past 5 years to an all-time high 87 euros, may not last : let January come & show if Airbus have a quarter left, analysis will be available soon thereafter, based on disclosed sales & total deliveries.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 8:59 pm

2175301 wrote:
Just prior to final negotiations Aibus's CEO Mr. Tom Enders publically states that the A380 will remain in production for at least a decade. I am quite sure that the Airbus negotiators also said the same.

EK essentially said... "Yes, that is what we want to see to ensure the value of our order.. Just put it in writing..."

Now, above several people seemed to disputed my previous claim several pages back that such things as putting things in writing are in fact normal during negotiations; and that the real issue relates to the fact that Airbus was surprised by such a request. Really? Why do contracts and negotiations for them exist at all if not to put things in writing. It has been my personal and very painful at times, and is reported to be a common issue, that verbal promises seem to have a way of vanishing if they mean real money or inconvenience.

Somehow a lot of people seem to be blaming EK for what is literally just a very common position during negotiations... Put it in writing. The fact that Airbus balked at that... that the CEO had made such public (and likely private) promises apparently without Airbus Board Approval so they could easily put it in writing (in some way as there are various ways of writing that); is not EK's fault. Any competent contract negotiator should fully expect a "put it in writing" response to any and every verbal promise.

I did the googling and the Enders quote was:

"At Airbus, we believe in our flagship A380 and we believe the future is bright. I am convinced we will still produce A380s 10 years from now. Passengers like it and are willing to pay the premium," he said.

Ref: https://www.stuff.co.nz/business/indust ... e-a-future ( a copy of a Reuters article )

I don't blame EK for saying "put it in writing", that is indeed their next logical step, because that is surely the kind of commitment they'd love to have.

I think Enders' statement can be read more of a statement of intent rather than a commitment, especially given the time and place (a ceremony handing over the 100th A380 to Emirates), but again it's perfectly natural for EK to say "great, now put it in writing".

When I first read Enders' statement I did feel he was indeed leaving himself open to the demand that he back up his statement with words.

To me it seemed to be something of an 'own goal'.

2175301 wrote:
I myself have negotiated and signed multiple multi-million dollar contracts; dealt with many contract issues (learned many lessons), and even used the "force majeure" clause once on several of those contracts with complete acceptance by the other parties. For a contract negotiation to fail over a "put it in writing" of a very public CEO statement... is just stunning to me.

I think the gripe is that EK apparently waited till very late in the process to ask for it in writing. In turn the Airbus side might have felt that the statement was just a statement of intent, and commitment would need board level approval, and given that Enders is taking a lot of heat over the corruption/compliance issues, he might have felt it was a very bad time to ask the Board to commit to a decade of losing money on the A380 and/or cancellation payments and/or buybacks. Of course EK must have known this too, but its own concerns about A380 future values are quite legitimate IMHO and they might feel the Board has no choice but to make some concessions despite Enders' discomfort, given the current environment.

william wrote:
Corporate Airbus is being very prudent, good for them, their profits and their shareholders.

Corporate EK is also being prudent.

The used A380 valuation problem (crisis?) is no longer a hypothetical thing.

An A380 has gone directly from airline service into storage without engines. It's not hard to imagine more will follow.

As desperate as it seemed to be to end up in Hajj service, even that doesn't seem to be an option.
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travelhound
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 10:19 pm

KarelXWB wrote:
travelhound wrote:
As per the abcdlist A380 production website

http://www.abcdlist.nl/a380f/a380f.html

Emirates - 113 built, parts produced, 100 delivered
QATAR - 10 built, 8 delivered
Singapore - 5 built, 0 delivered.

(113+10+5)-(100+8+0)=30


The following aircraft have been built & not delivered:

Emirates: MSN 232, 234, 238, 240, 248, 249, 250 (7 total).
Qatar: MSN 235, 254 (2 total).
Singapore: MSN 247, 251, 253, 255 (4 total).

For a total of 13 aircraft at different stages of assembly. Even if we include the 2 additional ex-Skymark aircraft, it's far below the 22 you mentioned.

As the current production rate is 12 aircraft per month, there is just no way 22 aircraft could have been built.


KarelXWB,

The numbers I quoted in my original post are correct with the exception of the two Transaero aircraft (included in my numbers) that have fallen off the ABCD list.

Emirates (113 built / parts produced, 100 deliveries). Included in this total are two (2) ex Skymark frames that are currently either stored or at outfitting. The ABCD website is showing an additional 12 Emirates aircraft that are either stored (4), at outfitting (2), waiting for first flight (1) or have parts built (5). If we include the two Skymark aircraft there is now a total of 14 aircraft that have been built, in final assembly or parts have been produced.

The ABCD website clearly shows all five Singapore Airlines and two Qatar aircraft have been built or are in final assembly (7).

The website is now showing two of the three ANA A380's have had their parts produced.

I have lost track of all of the aircraft produced / delivered / donated / etc. I think there is still a VIP aircraft that is still available for sale.

My posts on this matter revolved around the A380 supply chain and the need for new orders so that they can maintain production. My posts clearly stated the A380 would need new orders within the next two years. In stating this I noted that materials / parts can have 2-year lead times. I think we can deuce from this statement that the supply chain is probably already producing parts for A380's that are to be delivered in two years-time.

My posts are based in fact, have merit and are relevant to the topic of the discussion.
 
Jayafe
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 10:33 pm

travelhound wrote:
My posts are based in fact, have merit and are relevant to the topic of the discussion.


Are you sure about that?:

travelhound wrote:
(113+10+5)-(100+8+0)=30


I guess maths are overrated nowadays... :scratchchin:
 
Couprace
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 10:41 pm

astuteman wrote:
bigjku wrote:
The issue has been Airbus having a unsteady performance recently over he last 5 years or so. From 2012 to 2016 it drove free cash flow of $1.59 billion. Boeing drove $33.1 billion. The gap is getting worse as in 2017 Airbus has negative free cash of $4.2 billion thru 9 months and Boeing has a positive number of $9 billion.

That is really the biggest thing for Airbus to overcome and what would see their stock take off the most. If they can start to efficiently drive revenue into cash they should be almost self financing. Hell thats why many investors were big on them going into 2017 after the Boeing run up. The expectation is at some point they will generate cash in large amounts. It just keeps not happening and people are noticing.

https://www.fool.com/investing/2017/11/ ... again.aspx


A couple of points.

Firstly Airbus has been investing heavily in inventory to support heavy ramp-ups across the range.
That hits cash flow.

But what really hits cash flow is that every model in the Airbus line-up has had issues in ramp-up/delivery.
Most especially of course the A320NEO. But the A350 too has had serious issues, and the A330NEO has been delayed 9 months or so.
There isn't a programme where Airbus haven't had expensive aircraft stood around either waiting for engines or cabin equipment.

I don't believe A-net has really fully comprehended the issues Airbus have had with production in the last couple of years.

In terms of the comparison with Boeing it must also be noted that Boeing will print far more cash with their defence contracts that Airbus ever will - that is the nature of how the US DOD does its business with major defence contractors (this one is my field)

None of that changes any of the numbers you quote.

But Airbus should go strongly cash positive once it gets its ramp-ups under control.

As a final point, free cash flow by definition is AFTER R+D expense is taken into account

Rgds


AS a counter point Boeing has weathered major expensive snafus it self. The 748i, 787 and Tanker programs all ate up cash. I believe part of the difference is, Boeing is a much more efficient organization, and Airbus has done too many low price high volume sales for the PR. Airbus inability to generate cash is going to plague them for years to come. Continuation of the A380 program is not helpful.
 
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Slug71
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Re: Airbus Working With Emirates on New Order for Flagship A380

Tue Nov 14, 2017 11:39 pm

Revelation wrote:
2175301 wrote:
Just prior to final negotiations Aibus's CEO Mr. Tom Enders publically states that the A380 will remain in production for at least a decade. I am quite sure that the Airbus negotiators also said the same.

EK essentially said... "Yes, that is what we want to see to ensure the value of our order.. Just put it in writing..."

Now, above several people seemed to disputed my previous claim several pages back that such things as putting things in writing are in fact normal during negotiations; and that the real issue relates to the fact that Airbus was surprised by such a request. Really? Why do contracts and negotiations for them exist at all if not to put things in writing. It has been my personal and very painful at times, and is reported to be a common issue, that verbal promises seem to have a way of vanishing if they mean real money or inconvenience.

Somehow a lot of people seem to be blaming EK for what is literally just a very common position during negotiations... Put it in writing. The fact that Airbus balked at that... that the CEO had made such public (and likely private) promises apparently without Airbus Board Approval so they could easily put it in writing (in some way as there are various ways of writing that); is not EK's fault. Any competent contract negotiator should fully expect a "put it in writing" response to any and every verbal promise.

I did the googling and the Enders quote was:

"At Airbus, we believe in our flagship A380 and we believe the future is bright. I am convinced we will still produce A380s 10 years from now. Passengers like it and are willing to pay the premium," he said.

Ref: https://www.stuff.co.nz/business/indust ... e-a-future ( a copy of a Reuters article )

I don't blame EK for saying "put it in writing", that is indeed their next logical step, because that is surely the kind of commitment they'd love to have.

I think Enders' statement can be read more of a statement of intent rather than a commitment, especially given the time and place (a ceremony handing over the 100th A380 to Emirates), but again it's perfectly natural for EK to say "great, now put it in writing".

When I first read Enders' statement I did feel he was indeed leaving himself open to the demand that he back up his statement with words.

To me it seemed to be something of an 'own goal'.

2175301 wrote:
I myself have negotiated and signed multiple multi-million dollar contracts; dealt with many contract issues (learned many lessons), and even used the "force majeure" clause once on several of those contracts with complete acceptance by the other parties. For a contract negotiation to fail over a "put it in writing" of a very public CEO statement... is just stunning to me.

I think the gripe is that EK apparently waited till very late in the process to ask for it in writing. In turn the Airbus side might have felt that the statement was just a statement of intent, and commitment would need board level approval, and given that Enders is taking a lot of heat over the corruption/compliance issues, he might have felt it was a very bad time to ask the Board to commit to a decade of losing money on the A380 and/or cancellation payments and/or buybacks. Of course EK must have known this too, but its own concerns about A380 future values are quite legitimate IMHO and they might feel the Board has no choice but to make some concessions despite Enders' discomfort, given the current environment.

william wrote:
Corporate Airbus is being very prudent, good for them, their profits and their shareholders.

Corporate EK is also being prudent.

The used A380 valuation problem (crisis?) is no longer a hypothetical thing.

An A380 has gone directly from airline service into storage without engines. It's not hard to imagine more will follow.

As desperate as it seemed to be to end up in Hajj service, even that doesn't seem to be an option.


I'm just hoping an updated A380 results out of this process. Even if its just a weight reduction of the frame which would be the cheapest improvement.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 12:02 am

Couprace wrote:
astuteman wrote:
bigjku wrote:
The issue has been Airbus having a unsteady performance recently over he last 5 years or so. From 2012 to 2016 it drove free cash flow of $1.59 billion. Boeing drove $33.1 billion. The gap is getting worse as in 2017 Airbus has negative free cash of $4.2 billion thru 9 months and Boeing has a positive number of $9 billion.

That is really the biggest thing for Airbus to overcome and what would see their stock take off the most. If they can start to efficiently drive revenue into cash they should be almost self financing. Hell thats why many investors were big on them going into 2017 after the Boeing run up. The expectation is at some point they will generate cash in large amounts. It just keeps not happening and people are noticing.

https://www.fool.com/investing/2017/11/ ... again.aspx


A couple of points.

Firstly Airbus has been investing heavily in inventory to support heavy ramp-ups across the range.
That hits cash flow.

But what really hits cash flow is that every model in the Airbus line-up has had issues in ramp-up/delivery.
Most especially of course the A320NEO. But the A350 too has had serious issues, and the A330NEO has been delayed 9 months or so.
There isn't a programme where Airbus haven't had expensive aircraft stood around either waiting for engines or cabin equipment.

I don't believe A-net has really fully comprehended the issues Airbus have had with production in the last couple of years.

In terms of the comparison with Boeing it must also be noted that Boeing will print far more cash with their defence contracts that Airbus ever will - that is the nature of how the US DOD does its business with major defence contractors (this one is my field)

None of that changes any of the numbers you quote.

But Airbus should go strongly cash positive once it gets its ramp-ups under control.

As a final point, free cash flow by definition is AFTER R+D expense is taken into account

Rgds


AS a counter point Boeing has weathered major expensive snafus it self. The 748i, 787 and Tanker programs all ate up cash. I believe part of the difference is, Boeing is a much more efficient organization, and Airbus has done too many low price high volume sales for the PR. Airbus inability to generate cash is going to plague them for years to come. Continuation of the A380 program is not helpful.


The A320 is a great cash cow for Airbus. The A350 is still in ramp up, and has been very successful so far, after a very smooth development program. It also has a very healthy backlog and will get some improvements already, starting soon. It will do very well for Airbus. They also see some huge benefit in the C Series. So they'll have cash flow. Their biggest drain right now is the A400M. If they can cut costs
on the A380 though, that would definitely relax the belt a little. Sourcing what ever parts they can from the A350 supply chain, might lower costs for both aircraft. The A350 windows, composite doors and door frames should all be able to be used on the A380. I'm sure there are numerous brackets and components that can also be used from the A350.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 12:41 am

this might be a high stakes game of chicken. EK wants Airbus to guarantee they'll keep the line open for 10-15 years. Airbus wants a commitment from EK that they'll order xxx frames for EU XXX each. If EK really wants to continue their current business model around the A380, Airbus can say we need the commitment from you or we'll close the line and you'll have to re-configure how you plan to do business. EK can say if you don't commit to the time-frame we're asking, we'll just go all Boeing twins after the 380's come off lease. They each may be waiting to see who blinks first. My feeling is they'll come to an agreement sooner rather than later and we'll see EK place a sizable A380 order. But that's just an un-informed opinion (there seem to be a lot of those on a.net anyhow, right?).
 
SCAT15F
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 1:05 am

Not sure if this has been posted already, but from ATWonline:

Emirates rejects A380plus concept as order negotiations continue http://atwonline.com/airframes/emirates ... s-continue

Emirates Airline is rejecting the proposed Airbus A380plus concept in spite of its plans to continue ordering more of the largest commercial aircraft.
“We would rather they just offered us the continuation of the line,” Emirates president Tim Clark said at the Dubai Air Show. “I have never been a big fan [of the A380plus]... Emirates is also not insisting on a commitment by Airbus to eventually re-engine the A380 as a prerequisite for a new order.
 
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Revelation
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 1:07 am

Looks like tomorrow Airbus will be announcing one of the biggest aircraft deal ever.

However it's for A320s, not A380s.

Ref: https://www.bloomberg.com/news/articles ... o-partners

Now we know why Leahy was sticking around, although you never do know if he could also rescue the A380 deal.

Still will probably be getting a bronze statue, IMHO.
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SCAT15F
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 1:11 am

I can understand why Clark would not be interested in the A380-Plus as compared to an NEO, but compared to the CEO? I don't get it. 4% better than CEO is still pretty significant.
 
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Slug71
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 2:02 am

SCAT15F wrote:
I can understand why Clark would not be interested in the A380-Plus as compared to an NEO, but compared to the CEO? I don't get it. 4% better than CEO is still pretty significant.


Depends on the added cost. Considering they have previously asked for significant updates, they probably want to see more out of the Plus. Seems like they want some kind of commitment/investment from Airbus. They've already said they'll commit to it and their business model depends on it. They just don't want to pay for all of it. Clark probably also feels it is more likely to get other customers if it were updated. Which in turn guarantees the line stays open longer.
Airbus is understandably wanting to treading cautious with any commitment/investment (Hence we saw the Plus in the first).
 
ap305
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 8:17 am

I think Airbus may be quite upset with EK....

http://twitter.com/GulfNewsBiz/status/9 ... 0356826113

BREAKING: Airbus COO John Leahy fires back at Emirates President Tim Clark, saying that if the press wanted to know whether there would be an order for A380s, they should “go and ask Emirates.
 
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anfromme
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 8:34 am

ap305 wrote:
I think Airbus may be quite upset with EK....

http://twitter.com/GulfNewsBiz/status/9 ... 0356826113

BREAKING: Airbus COO John Leahy fires back at Emirates President Tim Clark, saying that if the press wanted to know whether there would be an order for A380s, they should “go and ask Emirates.

Without having heard Leahy's tone of voice here, it does sound like somebody's just trying to stir the pot.
Seems like the usual banter between Clark and Leahy...
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rheinwaldner
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 8:38 am

How can an airline demand an aircraft to be produced by any number of years?

If Airbus has enough sales, they will build it.

But if the sales would not support production in X years, how could anybody expect Airbus to still build them at that time?

Does EK expect, that Airbus would just continue to build white tail A380s?
 
ap305
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 8:40 am

I sure hope that is the case... With FlyDubai ordering more Boeings and EK going with the 787 one gets the impression that the Airbus/Dubai relationship has taken a downturn.
 
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anfromme
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 15, 2017 8:44 am

Revelation wrote:
Now we know why Leahy was sticking around, although you never do know if he could also rescue the A380 deal.

...well, even EK always said they hoped they'd get the deal done in time for the show. Don't think there's any actual rescuing required to finalise the deal, just some more negotiations.

Revelation wrote:
Still will probably be getting a bronze statue, IMHO.

Considering he's been with Airbus in a sales position since 1985, I really don't think his performance in the last two months on his job will determine whether or not he gets the bronze statue. ;-)
Mind you, it's nice to go out with a bang, of course.
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