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

Tue Nov 07, 2017 9:30 pm

My personal opinion is, that (unfortunately) the A380 has no real future and Emirates should focus on the 777. There is not so much capacity difference anymore.

But all the talking about the failure ("financial disaster") is not completely true in my opinion.
Airbus had no other choice the develop a 747 competitor, and in this regard Airbus was successful!

See the post of beaconinbound:

beaconinbound wrote:

Now think of a world without the A380. Maybe Airbus would have done another program like a slightly bigger A350 along a new A330. That would have most probably made Emirates the biggest 747-8 customer of all time (also flying 77Ws) with Boeing forcing Airbus' hand on pricing of smaller widebodies - pretty much what they did when the 744 ruled global aviation. Airbus would most probably have found themselves in a less fortunate position.


... and DWD (by the way, welcome to the forum and thanks for your good contributions)!

DWC wrote:
But mere profit is NOT the only criterion in business, contrary to what many US a-netters here think.
I am an economist, trained in France : many do not know that Jean Tirole - who also works in Toulouse, was awarded the Nobel prize in economics for all his pioneering research in "GAME THEORY". Strategy is core to business, specially in a duopoly where any project has infinite repercussions both in terms of line-up & sales down the road. The A330/340 program was essential but it is the A380 that made what Airbus is today, a game changer that convinced every airline still in doubt that Airbus was every bit just as big & good ( if not better ) than Boeing : while the 777 is a magnifiscent aircraft & a cash-cow for Boeing, the whale-jet is the new Queen of the Skies in everyone's mind from a communications point of view, however poor the sales compared to early projections, with many technological processes incorporated into the A350 ( or precisely, discontinued ).



eisenbach
DC-6, Do228, Saab340, Twin-Otter, C212, Fokker50, AN24, ATR42, ATR72, Dash8-400Q, MD90, MD83, EMB120, A380, A300, A343, A346, B721, B742, B744, B748...
 
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SomebodyInTLS
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 1:44 pm

Matt6461 wrote:
DWC wrote:
to airports, that uses up precious slots & gives the atmosphere a little more pollution, all of which are paid in fine by the pax we are & not by the airlines.


Well nowadays the A380 is the most fuel-inefficient production widebody


That is quite the statement to being throwing out there as fact.

AFAIK Emirates' 615-seat A380s have the *best* CASM around!
"As with most things related to aircraft design, it's all about the trade-offs and much more nuanced than A.net likes to make out."
 
aaexecplat
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 5:25 pm

Matt6461 wrote:
My hope at this point is for A380 death in ~2020 and a VLA resurrection around 2030. If EK extends life-support for this program - as seems likely now - that's not going to happen.


Why would you hope for the A380 program to die?
 
Arion640
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 5:33 pm

aaexecplat wrote:
Matt6461 wrote:
My hope at this point is for A380 death in ~2020 and a VLA resurrection around 2030. If EK extends life-support for this program - as seems likely now - that's not going to happen.


Why would you hope for the A380 program to die?


He's the most anti A380 person on this forum.

I've never understood how you could hate an aircraft, unless you're an extreme Boeing/Airbus Fanboy.

They are metal tubes that fly at the end of the day.
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tphuang
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 5:37 pm

A380 is the most consumer friendly aircraft out there today. There are no other airliner i'd rather be sitting on for a 14 hour flight.

The hate this aircraft gets is unbelievable to me.
 
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Slug71
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 6:10 pm

Arion640 wrote:
aaexecplat wrote:
Matt6461 wrote:
My hope at this point is for A380 death in ~2020 and a VLA resurrection around 2030. If EK extends life-support for this program - as seems likely now - that's not going to happen.


Why would you hope for the A380 program to die?


He's the most anti A380 person on this forum.

I've never understood how you could hate an aircraft, unless you're an extreme Boeing/Airbus Fanboy.

They are metal tubes that fly at the end of the day.


tphuang wrote:
A380 is the most consumer friendly aircraft out there today. There are no other airliner i'd rather be sitting on for a 14 hour flight.

The hate this aircraft gets is unbelievable to me.


Apparently choice is good when it comes to airlines but bad when it comes to aircraft.
 
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Revelation
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 6:21 pm

Arion640 wrote:
He's the most anti A380 person on this forum.

I've never understood how you could hate an aircraft, unless you're an extreme Boeing/Airbus Fanboy.

They are metal tubes that fly at the end of the day.

tphuang wrote:
A380 is the most consumer friendly aircraft out there today. There are no other airliner i'd rather be sitting on for a 14 hour flight.

The hate this aircraft gets is unbelievable to me.

The inability to understand concepts more complicated than "hate" was unbelievable to me, but not it is not.
The gun is NOT a precious symbol of freedom
It is a deadly cancer on American society
Those who believe otherwise are consumed by an ideology
That is impervious to evidence
 
aaexecplat
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 6:29 pm

Revelation wrote:
Arion640 wrote:
He's the most anti A380 person on this forum.

I've never understood how you could hate an aircraft, unless you're an extreme Boeing/Airbus Fanboy.

They are metal tubes that fly at the end of the day.

tphuang wrote:
A380 is the most consumer friendly aircraft out there today. There are no other airliner i'd rather be sitting on for a 14 hour flight.

The hate this aircraft gets is unbelievable to me.

The inability to understand concepts more complicated than "hate" was unbelievable to me, but not it is not.


What is a rational reason to hope for the A380 program to end, in your eyes?
 
tphuang
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 6:35 pm

Revelation wrote:
Arion640 wrote:
He's the most anti A380 person on this forum.

I've never understood how you could hate an aircraft, unless you're an extreme Boeing/Airbus Fanboy.

They are metal tubes that fly at the end of the day.

tphuang wrote:
A380 is the most consumer friendly aircraft out there today. There are no other airliner i'd rather be sitting on for a 14 hour flight.

The hate this aircraft gets is unbelievable to me.

The inability to understand concepts more complicated than "hate" was unbelievable to me, but not it is not.

There is a difference between thinking that an airliner doesn't fit today environment vs wishing the death of a very customer friendly aircraft.

But thanks for butting in a discussion that has nothing to do with you.
 
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Revelation
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 6:49 pm

aaexecplat wrote:
What is a rational reason to hope for the A380 program to end, in your eyes?

To free up the resources and the market demand to allow a better VLA to emerge.

It's pretty clear to people reading what Matt writes that this is where he's coming from.
The gun is NOT a precious symbol of freedom
It is a deadly cancer on American society
Those who believe otherwise are consumed by an ideology
That is impervious to evidence
 
Arion640
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 7:18 pm

Revelation wrote:
aaexecplat wrote:
What is a rational reason to hope for the A380 program to end, in your eyes?

To free up the resources and the market demand to allow a better VLA to emerge.

It's pretty clear to people reading what Matt writes that this is where he's coming from.


I find it very hard to believe VLA will have a long long term future. P2P will become the norm except the gulf carriers who can book aircraft out with cheap fares.
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Jayafe
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 7:20 pm

Revelation wrote:
aaexecplat wrote:
What is a rational reason to hope for the A380 program to end, in your eyes?

To free up the resources and the market demand to allow a better VLA to emerge.


I guess the same applies to closing down Boeing and allowing a better company to raise :spin:
 
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mariner
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 7:34 pm

Revelation wrote:
To free up the resources and the market demand to allow a better VLA to emerge. It's pretty clear to people reading what Matt writes that this is where he's coming from.


Not to me. I disagree with him as to why people travel in larger groups , but I might have understood that as his position until I read this:

Matt6461 wrote:
Given these fundamental facts, Airbus should have realized - as Boeing did - that route fragmentation and preference for frequency and smaller gauge spelled doom for the VLA sector.


Are we talking about the same Boeing who announced the 748i after they'd started selling 787's?

So it seemed to me to be yet another attempt to let Boeing off the hook and finally I dismissed his thesis as just another Airbus/ A380 bash, lightly disguised with some mildly high-falutin' prose.

mariner
aeternum nauta
 
Waterbomber
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 7:47 pm

EK needs the A380. Together with EY, they are trying to maximise bilaterals but they are not given an endless amount.
To grow and make best use of bilateral slots, EK has no choice but to use larger and larger aircraft at the same frequencies and ask destination airports to ugrade their facilities. So if anything, EK will try to replace B77W's by A380's.
Obviously, this strategy of growth can only be maintained for as long as EK is subsidised and supported by the UAE.

IMO EY is just a vehicle to increase bilateral frequencies in the name of "competition". Eventually I see the 2 airlines being merged not long after the move to DWC.
 
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Revelation
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 8:21 pm

mariner wrote:
Are we talking about the same Boeing who announced the 748i after they'd started selling 787's?

So it seemed to me to be yet another attempt to let Boeing off the hook and finally I dismissed his thesis as just another Airbus/ A380 bash, lightly disguised with some mildly high-falutin' prose.

That's one way of looking at things.

Another would be to consider that Airbus made a large move with the A380 and Boeing decided to do 748i as a small move to keep price pressure on A380.

That would be consistent with the "game theory" arguments being made here to support Airbus's decision making.
The gun is NOT a precious symbol of freedom
It is a deadly cancer on American society
Those who believe otherwise are consumed by an ideology
That is impervious to evidence
 
Jayafe
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 8:23 pm

mariner wrote:
Are we talking about the same Boeing who announced the 748i after they'd started selling 787's?

So it seemed to me to be yet another attempt to let Boeing off the hook and finally I dismissed his thesis as just another Airbus/ A380 bash, lightly disguised with some mildly high-falutin' prose.

mariner


After 16 years in the forum, I would assume you already knew that the B dogma never fails.... :stirthepot:
 
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Revelation
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 8:30 pm

Jayafe wrote:
mariner wrote:
Are we talking about the same Boeing who announced the 748i after they'd started selling 787's?

So it seemed to me to be yet another attempt to let Boeing off the hook and finally I dismissed his thesis as just another Airbus/ A380 bash, lightly disguised with some mildly high-falutin' prose.

mariner


After 16 years in the forum, I would assume you already knew that the B dogma never fails.... :stirthepot:

And A dogma is always perfect and those who disagree are haters, sigh.
The gun is NOT a precious symbol of freedom
It is a deadly cancer on American society
Those who believe otherwise are consumed by an ideology
That is impervious to evidence
 
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mariner
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 9:06 pm

Revelation wrote:
That would be consistent with the "game theory" arguments being made here to support Airbus's decision making.


Um - I've never espoused a "game theory." I don't know what the "game theory" is, less do I care.

I think Boeing decided on the 748i for two reasons. Like a number of a.netters and av.nuts generally they could not bear to think that the 747 line was coming to an end when they could squeeze just one more variation out of it. It's a romantic view that might get a lot of emotional support, but the cold hand of reality was greater.

The second was as you say, a way of kicking Airbus/A380 in the nuts.

mariner
aeternum nauta
 
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Matt6461
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 9:37 pm

SomebodyInTLS wrote:
Emirates' 615-seat A380s have the *best* CASM around!


There's a big difference between fuel efficiency - my claim in the reply - and CASM. The A380 is still the most efficient widebody on CASM (narrowly) but the worst on fuel efficiency.

There's also a difference between nominal CASM (actual seat-mile costs of particular airframes) and normalized CASM from which apples-apples comparisons can be made. By nominal CASM the best real-world planes are probably a 230-pax A321 or 440-pax A330.

aaexecplat wrote:
Why would you hope for the A380 program to die?


Because I'm the biggest VLA fan on this forum and the A380 is a bad VLA. I have written much here about how I hope/wish that Airbus would either turn the A380 into a truly dominant plane that would kill the 777X or else start from scratch. I'm taking a long term view now and only see Airbus building a ~2030 VLA if the A380 dies.

mariner wrote:
Um - I've never espoused a "game theory." I don't know what the "game theory" is, less do I care.

mariner wrote:
The second was as you say, a way of kicking Airbus/A380 in the nuts.


You should read up a little before engaging someone's views and mischaracterizing their motives. Ignorance and hostility often run together.
 
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SomebodyInTLS
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 10:27 pm

Matt6461 wrote:
SomebodyInTLS wrote:
Emirates' 615-seat A380s have the *best* CASM around!


There's a big difference between fuel efficiency - my claim in the reply - and CASM. The A380 is still the most efficient widebody on CASM (narrowly) but the worst on fuel efficiency.


Okay, I might just be a stupid engineer but I genuinely don't understand how in that case the fuel efficiency - being one of the largest contributors to its CASM (which you agree is the best) - can then be the worst.
"As with most things related to aircraft design, it's all about the trade-offs and much more nuanced than A.net likes to make out."
 
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Matt6461
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 10:49 pm

SomebodyInTLS wrote:
I genuinely don't understand how in that case the fuel efficiency - being one of the largest contributors to its CASM (which you agree is the best) - can then be the worst.


Fuel is the biggest cost factor but at today's gas prices it's only ~35% of operating cost for an A380.
The A380 has good economies of scale on flight crew (same # of pilots as a 788), maintenance (low thrust per passenger), en route fees (overflight fees generally don't scale with size) and - most importantly - ownership cost. The A380 sells for only a few percent more than a 777-9 but has ~50% more capacity.

I don't have links to the past analyses at hand, but both (Leeham and AirwaysInsight) show the A380 as the worst on fuel per seat but best overall CASM.

If you play with some numbers it isn't hard to see how savings on the 65% of non-fuel costs can beat losses on fuel costs. There's another thread, for example, about how IAG likes the A332 for Level because it's cheap to own/lease despite burning more fuel than a 787.

The tragedy here, of course, is that the A380 should be the best on fuel by a long shot. Were it so we'd see a lot more of them flying.
 
tphuang
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 11:05 pm

Matt6461 wrote:
SomebodyInTLS wrote:
I genuinely don't understand how in that case the fuel efficiency - being one of the largest contributors to its CASM (which you agree is the best) - can then be the worst.


Fuel is the biggest cost factor but at today's gas prices it's only ~35% of operating cost for an A380.
The A380 has good economies of scale on flight crew (same # of pilots as a 788), maintenance (low thrust per passenger), en route fees (overflight fees generally don't scale with size) and - most importantly - ownership cost. The A380 sells for only a few percent more than a 777-9 but has ~50% more capacity.

I don't have links to the past analyses at hand, but both (Leeham and AirwaysInsight) show the A380 as the worst on fuel per seat but best overall CASM.

If you play with some numbers it isn't hard to see how savings on the 65% of non-fuel costs can beat losses on fuel costs. There's another thread, for example, about how IAG likes the A332 for Level because it's cheap to own/lease despite burning more fuel than a 787.

The tragedy here, of course, is that the A380 should be the best on fuel by a long shot. Were it so we'd see a lot more of them flying.


This has been discussed in the past, the configuration that leeham used in their modeling had much smaller J seating for 777 than 380. Yet, you keep bringing it up like gospel. Please stop regurgitating stuff that has been proven wrong.

EK 777 has to pack J passengers like shrimps to achieve similar CASM to A380. It drives away passengers on routes like NYC-SIN who are avoiding EK because one of the legs is 777.

If they used CX much more generous 777 configuration, it would have worse CASM.

Yet, you keep bringing it up. If it was so terrible, why would EK still purchase A380 instead of the cheaper 77W option?
 
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Matt6461
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 11:09 pm

tphuang wrote:
the configuration that leeham used in their modeling had much smaller J seating for 777 than 380.


You are probably referring to the public/free analysis that Leeham published. I am referring to the premium analysis that Leeham published, in which the A380 has 54% more seats than 777-9. Considering that A380 has ~52% more floor area and less-dense Y seating, that's a very fair ratio for the A380. Generous, I would say.

tphuang wrote:
If it was so terrible, why would EK still purchase A380 instead of the cheaper 77W option?


The answer to your question relates to marginal capacity cost, yield curves, non-ownership DOC elements. I have written extensively about these points elsewhere and repeatedly. You need to do more intellectual work than this to make a full answer to your question worth my time.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Wed Nov 08, 2017 11:13 pm

Please keep the thread on topic, and refrain from personal attacks or harsh language towards other users. Respect goes a long way, and that includes respecting opinions which differ from your own.

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

Thu Nov 09, 2017 12:23 am

tphuang wrote:
A380 is the most consumer friendly aircraft out there today. There are no other airliner i'd rather be sitting on for a 14 hour flight.

The hate this aircraft gets is unbelievable to me.

A number of people think it is the wrong aircraft, or inferior to competing aircraft, or not as good at its job as other jetliners. That is both normal and true of virtually all other models by both A and B, and I would not describe it as hating.

But I do agree with you that the A380 does seem to have a minority of detractors who actually despise it with all their might. I'm not saying that the poster(s) above fall in that category, but over the years I've seen plenty of examples on this forum and elsewhere. I cannot think of other aircraft that attracts similar bile.

There is of course no way of proving this but I'm convinced that ultimately the reason for such animosity boils down to that most childish of arguments; namely 'mine is bigger than yours'. The advent of the A380 meant that the venerable 747 would suddenly no longer be the biggest passenger airliner in the world, and some of the most passionate fanboys hated that, and the A380 by association.

Again, the above refers to a minority of people out there who seem to harbour genuinely hostile sentiments towards the A380, rather than most people who have perfectly legitimate and reasonable criticisms about the model. But it is still puzzling that anyone could have such animosity for an inanimate object.
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 12:34 am

eisenbach wrote:
and DWC (by the way, welcome to the forum and thanks for your good contributions)!

Matt6461 wrote:
Anyway, welcome to A.net and glad to have an economist posting here. :)

Thank you gentlemen :spin:

Matt6461 wrote:
DWC wrote:
But mere profit is NOT the only criterion in business, contrary to what many US a-netters here think.


I assume that you're saying "profit on A380 sales" is not the only business criterion. That's true but the other criterion you list ultimately matter because they impact profit. At least under U.S. law, that is truly all that matters for a business. I realize the Europeans have a more civilized view of corporate responsibility.

Correct.
Economic rationale calls for minimal profits of some kind, but these need not to be at the programme's bottom-line, nor in monetary profit if "positive" "virtuous" "externalities" are factored in. Airbus specialists here will be able to describe these factors better than me, but off the top of my head, the A380 programme
1. increased Airbus' know-how with widebodies, specially in the above VLA segment
2. bought itself entry to the highly "uncontestable market" VLAs are
( means very high entry barriers & very high losses if out, reason why Airbus continues )
3. augmented its market share in those segments within Europe, important $$$ in maintenance & future orders
4. some sweeping orders for other models ( QR, EY)
5. patents
6. MASSIVE FREE PUBLICITY WORDWIDE ( magazines, newspapers, TV, blogs )
7. brand recognition ( highly valued in accounting ), actually EADS had to change its name to Airbus
8. better integration of the former GIE into a sole company
9. paved the way & partly funded the technologies & manufacturing processes of the A350
10. also subsidized the A350 in that the lack of sales diverted some production facilities to the A350 ( and seems to the A320 ramp up as well ), same can by said of a few conversion orders (VA)
11. more economic activity in the producing regions which generate more income taxes at regional/national levels that financed in turn public facilities for Airbus ( roads, airport upgrading at TLS, XFW )

Also from a macroeconomics POV, benefits to the EU are usually paid back to Airbus in immaterial ways, like political clout, thanks to
12. more employments, particularly tech specialisations
13. increased EU industrial integration
14. superior balance of payments, particularly with the Middle-East ( in exchange for Oil & Gas - Qatar )
15. some increased EU political influence in the UAE & Asia

I don't have the numbers, but it is fair to say that all the above have made the programme highly successful & globally positive, perhaps no big profits yet but no losses, even if it breaks even the benefits above are immense, something the Japanese & Chinese have excelled at in other high-barrier industries. In the unlikely event of new large orders, these will garner additional mega $$$.
As I said earlier, I only see that happening if & I am aware these are big ifs,
1. EK replaces their current fleet
2. EK merges with EY within the next decade
3. China orders ( and perhaps a few by NH or TG )
4. The A380 second-hand market takes off.
 
tjh8402
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 1:34 am

tphuang wrote:
Revelation wrote:
Arion640 wrote:
He's the most anti A380 person on this forum.

I've never understood how you could hate an aircraft, unless you're an extreme Boeing/Airbus Fanboy.

They are metal tubes that fly at the end of the day.

tphuang wrote:
A380 is the most consumer friendly aircraft out there today. There are no other airliner i'd rather be sitting on for a 14 hour flight.

The hate this aircraft gets is unbelievable to me.

The inability to understand concepts more complicated than "hate" was unbelievable to me, but not it is not.

There is a difference between thinking that an airliner doesn't fit today environment vs wishing the death of a very customer friendly aircraft.

But thanks for butting in a discussion that has nothing to do with you.


I will admit a degree of animosity towards the A380 because of its aesthetics (it's ugly) and for contributing to the end of the 747. That being said, I agree with other posters above that the appropriate reason to wish its end is to remove an imperfect product from the market and hopefully see it replaced by something better. as far as being passenger friendly goes, I have a hard time imagining anything that forces me into Y seating with 400 other people as passenger friendly, whether the seats are an inch wider or not.
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 1:36 am

mariner wrote:
Um - I've never espoused a "game theory." I don't know what the "game theory" is, less do I care.
The second was as you say, a way of kicking Airbus/A380 in the nuts.

That' two inconsistent remarks & the first is uneducated, Game theory is used by most big companies. you way want to ask god Google how much it is applied.
In fact, it is John Nash & his updated equilibriums that launched it, cooperative games amongst players strengthen your global strategy even if the optimum is not to go for the optimum, here's a case in point & a practical matter as we are essentially between gentlemen I believe :
https://www.youtube.com/watch?v=2d_dtTZQyUM


Revelation wrote:
Another would be to consider that Airbus made a large move with the A380 and Boeing decided to do 748i as a small move to keep price pressure on A380.
That would be consistent with the "game theory" arguments being made here to support Airbus's decision making.


From another member : http://www.airliners.net/forum/posting.php?mode=quote&f=3&p=19942775
NameOmitted wrote:
The question presupposes the 747 needs saving. The 747-8 was a "fleet in being." It provided price pressure on the A380, preventing Airbus from enjoying the sort of cash cow that Boeing enjoyed for so long, and being able to plow that extra cash into other programs. In that, the program is successful.

Freighter orders continue to trickle in. There is no freighter A380, nor is there likely to be as long as there is a 747 able to be converted, since the most expensive 747 available will be cheaper than designing an A380-F, denying A380 operators of a huge portion of the second hand market, further depressing the value of the A380 as a potential cash cow.

The 747-8 program has been a strategic success, and sales for the freighter are still trickling in. The line will continue to crawl along, and there will be ships in the sky for several decades yet.
Last edited by DWC on Thu Nov 09, 2017 1:39 am, edited 2 times in total.
 
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Matt6461
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 1:37 am

DWC wrote:
perhaps no big profits yet but no losses, even if it breaks even the benefits above are immense


At the program level there have been huge losses. Airbus isn't as transparent here as Boeing's accounting practices are, but $20bn spent so far is a conservative estimate. The program is/was breaking even on an annual production/recurring basis, but is deep in the red overall.

DWC wrote:
I don't have the numbers, but it is fair to say that all the above have made the programme highly successful & globally positive


I'm politically left, don't believe that narrow corporate P/L is the only metric for public/private investments, so I agree that we should include all those factors in evaluating the program. In the U.S. we tend to be corporate shills and market fundamentalists who ignore the factors you list.

Nonetheless, I'm sure you'll agree that profit matters. That $20bn could have been spent on a lot of goods besides a VLA. Does considering the program losses change your calculus at all?

A true social/political/economic accounting of the program would include everything from jobs created to plane-spotter's utility to the value of A380 threads on A.net. I don't see a firm case that all of that is definitely worth $20bn and I'd suspect we'd need many hours to make one.

DWC wrote:
2. EK merges with EY within the next decade


IMO this only happens if the merged airline moves to DWC. Given our doubts about that...
Plus at DWC EK/EY will no longer be slot-constrained and most of the A380 rationale disappears.
 
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Matt6461
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 1:44 am

By the way, I noticed this story in the site-related forum: http://www.businessinsider.com/qantas-c ... ty-2017-10

Interesting quotes:
According to Joyce, he can fly two 236-seat Dreamliners for less than the cost of a single 486-seat A380, which entered the Qantas fleet in 2008.

"If we were to fly two 787s tail-to-tail, the per-seat cost would be less than the A380," the Qantas CEO said.


"The A380 still has a role on airports that have slot restrictions (where you can't add a second flight) or where the scheduling windows work for (a single flight) like out of Los Angeles," he said.
 
JHwk
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 1:44 am

Revelation wrote:
Another would be to consider that Airbus made a large move with the A380 and Boeing decided to do 748i as a small move to keep price pressure on A380.

If that was Boeing's plan (I would agree it likely was), they fell for it hook, line, and sinker. Airbus has never been as well positioned in terms of product, product lines, and ability to respond to Boeing's next move. They have made it difficult for Boeing to do a clean-sheet or incremental improvement of an existing design, as Airbus has a lower cost response at their fingertips. Previously, they delayed the 787 program due to the 747-8 resource drain, and managed to sell more 380's.

Boeing's only hope in terms of game theory is that Oil prices actually drop in the next few years and stay that low. This offsets Airbus' pricing power on having more efficient aircraft for the vast majority of use cases. Boeing has been stuck over-investing in the 737 Max and 777X, and today lacks the capital flexibility to dominate the market.

I am a fan of the 380 as a passenger, but from a first-order analysis of the plane it is a failure. Second and third-order impacts are huge though!
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 2:17 am

Matt6461 wrote:
Nonetheless, I'm sure you'll agree that profit matters. That $20bn could have been spent on a lot of goods besides a VLA. Does considering the program losses change your calculus at all?


As I stated at the beginning, a rational programme has to reap benefits, but not necessarily in terms of profits - which is a very narrow definition of results. There is a wide literature about profits in nature & long-term benefits that can ill be calculated ex ante, but which are within economic rationale. A classic example is free ( or virtually free ) education & health care which consistently reap immense economic benefits in the long term, once kids become knowledgeable consumers. From a well-being perspective, new indicators have been developped to replace the crude GDP/GNP, which do not factor things like product quality or product diversification. Applied to the private sector, the Japanese car industry investments in the US for example were loss-making for years before they became profitable & eventually ate about half of US car makers market-share. Long-term strategy is not the US' forte ( save exceptions like Apple ). In the end, bucks do not make a country better or life happier, it is what companies produce & people do about their lives. I'll live in Japan or the EU anytime over the US for their consistently higher product & service quality, to say nothing of quality of life : 5 weeks paid holidays, good regional cuisines, umpteen wines & liqueurs, architecture, culture, history. Lexus, BMWs, Audi, Mercedes-Benz, Volvo all command a premium for sure, but why is it Lincolns or Cadillacs to not sell abroad other than the very few ? Anyway, this is not a topic that can be really discussed in a blog, even some economists have trouble grasping it & prefer to resort to simplistic equations while Asian companies leapfrog them big time.

As to your second question of "opportunity costs", perhaps, but in the end Airbus managed to strengthen their position handsomely. You see, it is very difficult to remake a scenario ex post, you have good arguments just as Airbus did in year 2000, so the chances of missing out are just as high ( actually way higher imho ) than what you criticize Airbus for. I am practical : I focus more on the present & future than on the past : the current Airbus line-up is impressive, I am actually more worried about Boeing, they have consistently lost market share in past years ( even after absorbing MDD's civil aviation, which was not the target, I know ), they need a totally new narrowbody strategy whereas Airbus have two modern narrowbody line-ups ready to be upgraded & maximized when need be, the 767 & 748 are marginal if not dead, the 787 needs to recoup several tens of billions & 777X is still to bear its fruits. In economics, what matters is their current market-share & up-dated line-up for future sales, Airbus is clearly in a more favourable position, whether the A380 sells or not. In terms of Game theory, Böing are in big trouble, their bullying Delta & CSeries shows abysmal strategy decision-making & backfired splendidly in the eyes of anyone in the industry : that will have further consequences.
 
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mariner
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 2:29 am

DWC wrote:
That' two inconsistent remarks & the first is uneducated, Game theory is used by most big companies. you way want to ask god Google how much it is applied.


It's a wee while since I've been called "uneducated" - LOL - I don't know what is "inconsistent" and I still don't know why I should care about "game theory". It may be used by a lot of companies - I don't work in the corporate world.

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

Thu Nov 09, 2017 2:46 am

mariner wrote:
DWC wrote:
That' two inconsistent remarks & the first is uneducated, Game theory is used by most big companies. you way want to ask god Google how much it is applied.
It's a wee while since I've been called "uneducated" - LOL - I don't know what is "inconsistent" and I still don't know why I should care about "game theory". It may be used by a lot of companies - I don't work in the corporate world.


1: uneducated because you should look into it before dismissing it :old: did you watch the video ?
Game theory is FUN ! It is about intelligence & brain intelligence.

2. Inconsistent because you first dismiss it & then second sentence is clearly a Game Theory objective, however uneducatedly stated :rotfl:

3. We all apply Game Theory daily in our lives without knowing it, better to know a few tenets for higher happiness & survival 8-)
 
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Slug71
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 2:56 am

tjh8402 wrote:
That being said, I agree with other posters above that the appropriate reason to wish its end is to remove an imperfect product from the market and hopefully see it replaced by something better. as far as being passenger friendly goes, I have a hard time imagining anything that forces me into Y seating with 400 other people as passenger friendly, whether the seats are an inch wider or not.


Except the imperfect product can be fixed. While a clean sheet design would be better, it's likely far cheaper to just update it. If Airbus was to pull the plug, I don't think we'll see another VLA from A or B for a long time. The A380 is basically what the "A318/A319/A330-800" is since it's a shrink. And we see how they are selling. While the A380 is much bigger and can be difficult to fill on many routes, It has the potential to be more like the "A320" if Airbus gave it a worthwhile update and addressed it's flaws. A big reason the 747 was so successful is because it received many updates and changes.

Matt6461 wrote:
DWC wrote:
perhaps no big profits yet but no losses, even if it breaks even the benefits above are immense


At the program level there have been huge losses. Airbus isn't as transparent here as Boeing's accounting practices are, but $20bn spent so far is a conservative estimate. The program is/was breaking even on an annual production/recurring basis, but is deep in the red overall.


I'm pretty sure this is incorrect. I recall reading on this forum some time back (probably a couple years) where someone had explained that the A380 returned all it's program costs. IIRC, It was paid upfront from other programs and the rest covered by early production. The only losses are due to the current low production rate where the cost of production is not being met but compensated for by other programs.
 
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mariner
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 3:06 am

DWC wrote:
uneducated because you should look into it before dismissing it :old: did you watch the video ?

Game theory is FUN ! It is about intelligence & brain intelligence.


Fun for you, perhaps, but one person's fun can be another person's turn-off. It was a movie I'd already seen, long ago. If you think that's the answer to life I hope it works for you.

DWC wrote:
2. Inconsistent because you first dismiss it & then second sentence is clearly a Game Theory objective, however uneducatedly stated :rotfl:


Actually, the second sentence was (and was intended as) the converse of the first which was more generous to Boeing - and which you didn't post.

DWC wrote:
3. We appy Game Theory is our lives daily without knowing it, better to know a few tenets for higher happiness & survival 8-)


It always amazes me when people who don't know me tell me how I live my life.

Still, I'm not quite sure how were have wandered so very far off the topic of this thread, but maybe that's a game you play.

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

Thu Nov 09, 2017 3:10 am

SomebodyInTLS wrote:
That is quite the statement to being throwing out there as fact.

AFAIK Emirates' 615-seat A380s have the *best* CASM around!


Better than a 550-seat 77W?

CASM comparisons make no sense absent some sort of density parameter.
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Slug71
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 3:59 am

incitatus wrote:
SomebodyInTLS wrote:
That is quite the statement to being throwing out there as fact.

AFAIK Emirates' 615-seat A380s have the *best* CASM around!


Better than a 550-seat 77W?

CASM comparisons make no sense absent some sort of density parameter.


Are there any 550-seat 77Ws?

Not sure what that has to do with the thread title.
 
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NeBaNi
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 5:18 am

Matt6461 wrote:
By the way, I noticed this story in the site-related forum: http://www.businessinsider.com/qantas-c ... ty-2017-10

Interesting quotes:
According to Joyce, he can fly two 236-seat Dreamliners for less than the cost of a single 486-seat A380, which entered the Qantas fleet in 2008.

"If we were to fly two 787s tail-to-tail, the per-seat cost would be less than the A380," the Qantas CEO said.


"The A380 still has a role on airports that have slot restrictions (where you can't add a second flight) or where the scheduling windows work for (a single flight) like out of Los Angeles," he said.

Is LAX slot restricted at the times QF makes its flights work? I thought LAX had morning slots available still. If that's the case, then the scheduling argument doesn't work anymore. Joyce mentions it is cheaper per seat to operate two 787s compared to one A380. So yes, if there are slot restrictions, one A380 flight makes sense, but if there are no slot restrictions, why would you schedule one A380 instead of two 787s even if there are scheduling windows? Two 787s should still be cheaper.
 
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7BOEING7
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 6:43 am

Slug71 wrote:

I'm pretty sure this is incorrect. I recall reading on this forum some time back (probably a couple years) where someone had explained that the A380 returned all it's program costs. IIRC, It was paid upfront from other programs and the rest covered by early production. The only losses are due to the current low production rate where the cost of production is not being met but compensated for by other programs.


Actually it's correct! Airbus invested $25-$30 billion in the A380 of which basically $0 had been recovered by sales of A380's until late 2015/2016 when a few airplanes were finally produced for less than the amount they sold for. Now, with the reduced rate very little if any profit is being made. Other programs covered the cost -- just like Boeing and the 787-- but early production models of the A380 were some of the most expensive to build and lowest priced -- just like the 787 -- no profit there.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 7:36 am

NeBaNi wrote:
Matt6461 wrote:
By the way, I noticed this story in the site-related forum: http://www.businessinsider.com/qantas-c ... ty-2017-10

Interesting quotes:
According to Joyce, he can fly two 236-seat Dreamliners for less than the cost of a single 486-seat A380, which entered the Qantas fleet in 2008.

"If we were to fly two 787s tail-to-tail, the per-seat cost would be less than the A380," the Qantas CEO said.


"The A380 still has a role on airports that have slot restrictions (where you can't add a second flight) or where the scheduling windows work for (a single flight) like out of Los Angeles," he said.

Is LAX slot restricted at the times QF makes its flights work? I thought LAX had morning slots available still. If that's the case, then the scheduling argument doesn't work anymore. Joyce mentions it is cheaper per seat to operate two 787s compared to one A380. So yes, if there are slot restrictions, one A380 flight makes sense, but if there are no slot restrictions, why would you schedule one A380 instead of two 787s even if there are scheduling windows? Two 787s should still be cheaper.


LAX isn’t slot restricted, he said or where there are scheduling windows which is where 1 A380 to LAX is better than 2 787’s, QF would prefer to have the aircraft at LAX for the day arriving in the early morning and leaving late at night which is how most US-OZ flights are scheduled.
 
WIederling
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 8:28 am

PW100 wrote:
WB GTF fan is I think a really huge thing. Can you name a lightweight (planetary) gear system that has proven to handle 100000 shp+ power levels?


RR does have something on the test stands right now:
https://www.rolls-royce.com/media/press ... arbox.aspx

Goes back more than two years:
viewtopic.php?t=775449
Murphy is an optimist
 
AsiaTravel
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 8:31 am

Last edited by AsiaTravel on Thu Nov 09, 2017 8:56 am, edited 1 time in total.
 
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 12:17 pm

7BOEING7 wrote:
Slug71 wrote:

I'm pretty sure this is incorrect. I recall reading on this forum some time back (probably a couple years) where someone had explained that the A380 returned all it's program costs. IIRC, It was paid upfront from other programs and the rest covered by early production. The only losses are due to the current low production rate where the cost of production is not being met but compensated for by other programs.


Actually it's correct! Airbus invested $25-$30 billion in the A380 of which basically $0 had been recovered by sales of A380's until late 2015/2016 when a few airplanes were finally produced for less than the amount they sold for. Now, with the reduced rate very little if any profit is being made. Other programs covered the cost -- just like Boeing and the 787-- but early production models of the A380 were some of the most expensive to build and lowest priced -- just like the 787 -- no profit there.


Programme bottom-line is not all there is to it, profits are garnered from a series of other externalities. see the 15 items I listed above & there are many more, like the benefits for Airbus of all its 225+ produced A380s preventing an extra 225+ Boeing widebodies generating profits for Boeing to counter Airbus better with new programmes ( and fund the 787 fiasco for years to come ), with the same other positive externalities. I can see the industrial & financial scenario where actually Airbus did not loose a penny on the A380s globally speaking, the programme reaped immense benefits in all these 16 reasons, and as I said, there are more industrial & finance experts can detail further.
Last edited by DWC on Thu Nov 09, 2017 12:33 pm, edited 1 time in total.
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 12:21 pm

Jayafe wrote:


If so, shows how many of us here see better by just sticking to practical data 8-)
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 1:53 pm

Arion640 wrote:
This has now turned into a fan boy thread.

Hopefully it turns into an "EK has just ordered 30+ A380s" thread.

That'd be a lot more fun than the last few pages have been.
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It is a deadly cancer on American society
Those who believe otherwise are consumed by an ideology
That is impervious to evidence
 
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keesje
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 1:53 pm

I expect further sales from current operators and some more justifying a Mid Life upgrade to be launched in the coming yrs.

Optimizing engines, capacity and systems for the new decade.

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

Thu Nov 09, 2017 2:05 pm

Slug71 wrote:
I'm pretty sure this is incorrect. I recall reading on this forum some time back (probably a couple years) where someone had explained that the A380 returned all it's program costs. IIRC, It was paid upfront from other programs and the rest covered by early production. The only losses are due to the current low production rate where the cost of production is not being met but compensated for by other programs.


The A380 has not returned its program costs, especially when we talk about development. If there is a significant return on the A380 development, that will come rather through use of patents and solutions for other frames like the A350. What the A380 has not done is running up a huge deferred cost still to be returned to the coffers. The cost of the A380 has been written off at the time they occurred, so there is no baggage to carry. As it is Airbus should be running sales and production of the A380 at near 0 as the slow down to 8 frames a year has not yet occurred. Airbus is making money on service and spare parts for that bird. Some of the investment in production facilities for the A380 is used for other aircraft families. The whole spent investment may reach 25 billion EUR, but that is IMO rather high calculated and should include the fuck up with the CATIA versions and subsequent production problems and overun of production cost for early frames.

I doubt that the A380 chucking along on a low production rate, is or will be a drain on Airbus profits in the year to come. It helps that most of the frames produced now, are for one customer only, and that should result in a more economic production.
Last edited by mjoelnir on Thu Nov 09, 2017 2:27 pm, edited 1 time in total.
 
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seahawk
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Re: Airbus Working With Emirates on New Order for Flagship A380

Thu Nov 09, 2017 2:11 pm

30+ is more than expected and at the reduced production rate, would keep the program alive for quite some time. It should be enough to reach the time window for which a new engine becomes reasonably attractive. The question is what improvements do the new frames bring?

Winglets? Engine PiPs? New stair configuration?
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