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

Fri Nov 10, 2017 3:05 pm

The French equivalent of the Financial Times, "Les Echos" - professional & usually very well informed, extends the Reuters rumour stating the order is in the 30+ range ( plus as in more than 30 ). It also links EK's excellent financial recovery ( the +111% did not go unnoticed ) & states the order could be announced Sunday. Last paragraph ends by saying this could well be the A380s last order ever if Airbus do not convince other airlines to go for a Neo ( future replacements or Asian top-ups are not even mentionned ).

https://www.lesechos.fr/industrie-services/air-defense/030853990803-emirates-pourrait-signer-une-nouvelle-grosse-commande-da380-ce-dimanche-2128908.php
Last edited by DWC on Fri Nov 10, 2017 3:19 pm, edited 3 times in total.
 
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Revelation
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Re: Airbus Working With Emirates on New Order for Flagship A380

Fri Nov 10, 2017 3:54 pm

DWC wrote:
The French equivalent of the Financial Times, "Les Echos" - professional & usually very well informed, extends the Reuters rumour stating the order is in the 30+ range ( plus as in more than 30 ). It also links EK's excellent financial recovery ( the +111% did not go unnoticed ) & states the order could be announced Sunday. Last paragraph ends by saying this could well be the A380s last order ever if Airbus do not convince other airlines to go for a Neo ( future replacements or Asian top-ups are not even mentionned ).

https://www.lesechos.fr/industrie-services/air-defense/030853990803-emirates-pourrait-signer-une-nouvelle-grosse-commande-da380-ce-dimanche-2128908.php

Thanks for the update. I'm thankful for more information from the European press, in particular the non-English language press.

It will be interesting if we get any idea of the delivery schedule. AvWeek writes that EK has been avoiding 2019 and 2020 slots, presumably due to DWC becoming available, but who knows what time frame it is really on.

It will be interesting to see if there is a NEO upcoming. We saw in 2014-6 that EK's business alone was not enough to justify a Trent derivative. Maybe RR will be in a better position in the next decade to offer Advance or UltraFan.
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parapente
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Re: Airbus Working With Emirates on New Order for Flagship A380

Fri Nov 10, 2017 4:02 pm

Good spot DWC.My French is fairly school boy but I get the gist.The last part interests me simply because one can reverse the logic.They appear to be saying that a NEO version was definitively discussed and indeed agreed -But with one provisos (or Airbus get out clause if you will).That being that others must take it.Either Airbus are really nervous that no one will ever ever buy another one whatever they do - including brand new engines (a view that I know some here hold;-)
Or conversely that Emirates cannot imagine such a scenario - so they will get their long held wish - a 380NEO no doubt with all the bells and whistles they can muster.
Since all the maths points to 10 years time (after the 80+ that still have to be manufactured) Then a GTF engine most likely- from RR.

That timing does of course tie in exactly when one would expect to see NEO engines for the 787....
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 12:11 pm

BREAKING NEWS : Reuters now echoing the "30+" frames announced by Les Echos ( the 'French FT' )

"AIRSHOW-Emirates may order 36-38 Airbus A380 jets

DUBAI, Nov 11 (Reuters) - Dubai’s Emirates may place an order at the Dubai Airshow for 36-38 Airbus A380 superjumbo jets, worth some $16 billion at list prices, a person familiar with the matter told Reuters on Saturday."

https://www.reuters.com/article/emirates-airshow/airshow-emirates-may-order-36-38-airbus-a380-jets-source-idUSL8N1NH098
 
WIederling
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 12:23 pm

seahawk wrote:
Passenger comfort is not connected to the aircraft type, but to the airline.


Balooney!

Airlines can modulate the properties an aircraft type can provide.

9 across on a 787 in Y is not negotiable as 8 across is not competitive with a more comfortable 8 across on an A330.

This is the hard result of a design decision Boeing made. Airlines can't get around that.
Murphy is an optimist
 
AsiaTravel
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 12:29 pm

Revelation wrote:
AvWeek writes that EK has been avoiding 2019 and 2020 slots, presumably due to DWC becoming available, but who knows what time frame it is really on.


DWC is probably going to be in 2025 or after. They haven't started working on the main airport yet, just upgraded the old terminal.
 
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seahawk
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 3:43 pm

WIederling wrote:
seahawk wrote:
Passenger comfort is not connected to the aircraft type, but to the airline.


Balooney!

Airlines can modulate the properties an aircraft type can provide.

9 across on a 787 in Y is not negotiable as 8 across is not competitive with a more comfortable 8 across on an A330.

This is the hard result of a design decision Boeing made. Airlines can't get around that.


That is flexibility, as there are 787 with 8 abreast and A330 with 9 abreast. And the later will become more common in the future.
 
BlueSky1976
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 3:59 pm

seahawk wrote:

That is flexibility, as there are 787 with 8 abreast and A330 with 9 abreast. And the later will become more common in the future.


No, it won't. 9 abreast in A330 is a domain of charter and LCC operators, and is considered an exception rather than the rule.

787 is the exact oposite: uncomfortable, 9 abreast Economy-class layout is used by everyone, except for JAL.
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KarelXWB
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 4:04 pm

DWC wrote:
"AIRSHOW-Emirates may order 36-38 Airbus A380 jets


That's not a round number. Somebody must have been reading Why do some airlines order a round number of aircraft? :stirthepot:
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WIederling
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 4:17 pm

KarelXWB wrote:
DWC wrote:
"AIRSHOW-Emirates may order 36-38 Airbus A380 jets


That's not a round number. Somebody must have been reading Why do some airlines order a round number of aircraft? :stirthepot:


Weell, the final order will be 37 and 7/8th A380. One will come without tail for detractor distraction :-)
Murphy is an optimist
 
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seahawk
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 4:44 pm

BlueSky1976 wrote:
seahawk wrote:

That is flexibility, as there are 787 with 8 abreast and A330 with 9 abreast. And the later will become more common in the future.


No, it won't. 9 abreast in A330 is a domain of charter and LCC operators, and is considered an exception rather than the rule.

787 is the exact oposite: uncomfortable, 9 abreast Economy-class layout is used by everyone, except for JAL.


Wait a bit and you will might have to change your opinion. A330 9 abreast will be a thing at the next aircraft interiors Expo.
 
WIederling
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 5:12 pm

seahawk wrote:
Wait a bit and you will might have to change your opinion. A330 9 abreast will be a thing at the next aircraft interiors Expo.


for the A330NEO that would mean Improving CASM over 787 from parity to ~10..12% :-)
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lightsaber
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 5:34 pm

AsiaTravel wrote:
Revelation wrote:
AvWeek writes that EK has been avoiding 2019 and 2020 slots, presumably due to DWC becoming available, but who knows what time frame it is really on.


DWC is probably going to be in 2025 or after. They haven't started working on the main airport yet, just upgraded the old terminal.

Every bit of information I'm reading is that DWC will not make the 2025 opening. The reality is Dubai lacks the funds for such an expansion at this time. EK expanded their profits, but only enough to run Dubai and not grow it. Because Dubai must be subsidized by EK... If EK isn't making good money, Dubai isn't growing. But Dubai isn't collapsing either. They just cannot, at this time, invest billions into DWC.

Someone explain to me how the funds spend on Expo 2020 will have a ROI. Don't get me wrong, I love world's fairs (the old name for Expos), but I fail to see how investing in Expo 2020 is better than investing the Dubai's port, rail, and DWC. I'd love to be enlightened.

KarelXWB wrote:
DWC wrote:
"AIRSHOW-Emirates may order 36-38 Airbus A380 jets


That's not a round number. Somebody must have been reading Why do some airlines order a round number of aircraft? :stirthepot:

With a late opening of DWC, that number is a much more reasonable sum of A380s. Perhaps to upgauge routes?

:rotfl: Yea, round numbers not required. ;)

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Arion640
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 6:25 pm

I was once told by an Ex DXB ATC that an option on the table was to move everyone to DWC and just keep EK at DXB.
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 7:29 pm

Arion640 wrote:
I was once told by an Ex DXB ATC that an option on the table was to move everyone to DWC and just keep EK at DXB.

A good reason for that would be to keep the precious A380 Terminal.

But I don't see other airlines bloating DXB as much as EK have plans to expand :
Consider that EK is in some merging process with FZ, a number of analysts even whisper EY could be on the horizon once DWC is expanded.
In terms of growth & constraints, seems to me that the reverse makes more sense, even if to a huge cost to EK :
- DXB for most foreign airlines, specially that the embargo has cleared all QR slots ( EY do not fly to DXB ).
- DWC for EK/FZ (+EY?) & EK partners & codeshares. Interlining would remain a problem, but similar problems due to airport duplications happen with NYC, London, Beijing, Istanbul, Paris, Moscow, Tokyo, Bangkok, Milan...
 
Planesmart
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 9:12 pm

DWC wrote:
Arion640 wrote:
I was once told by an Ex DXB ATC that an option on the table was to move everyone to DWC and just keep EK at DXB.

A good reason for that would be to keep the precious A380 Terminal.

But I don't see other airlines bloating DXB as much as EK have plans to expand :
Consider that EK is in some merging process with FZ, a number of analysts even whisper EY could be on the horizon once DWC is expanded.
In terms of growth & constraints, seems to me that the reverse makes more sense, even if to a huge cost to EK :
- DXB for most foreign airlines, specially that the embargo has cleared all QR slots ( EY do not fly to DXB ).
- DWC for EK/FZ (+EY?) & EK partners & codeshares. Interlining would remain a problem, but similar problems due to airport duplications happen with NYC, London, Beijing, Istanbul, Paris, Moscow, Tokyo, Bangkok, Milan...

Making DXB or DWC exclusive to EK/FZ would trigger WTO complaints and retaliation.
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sat Nov 11, 2017 9:29 pm

Planesmart wrote:
Making DXB or DWC exclusive to EK/FZ would trigger WTO complaints and retaliation.

I never said "exclusive" & I doubt there will be a problem, there are many legal ways to incite airlines to move ( landing fees, servicing, slots... ). And there is the argument that freeing DXB actually frees up competition ( see PEK & Daxing ), as DXB is now constrained.

There are structural & operational constraints that will trounce any illegitimate lawsuit, most airports in the cities I mention are airline hubs which have a massive if not quasi oligopolistic presence, same for Terminals. Dubai is to link both airports with high-speed trains so that transfers be fast as within major airports Terminals like CDG, DFW or MAD. Plus AUH is next door to be also used should EK / EY collaborate or merge.
 
Couprace
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sun Nov 12, 2017 8:11 pm

Just out, Airbus will be buying some of the older A380's from EK as part of the deal for replacements.

http://www.reuters.com/article/us-emira ... DC05B?il=0

This deal exemplifies the problem of having one large client for a model. Boeing sells EK 40 787's that will produce free cash, while Airbus digs the hole deeper. Unreal.I hope Leahy's replacement will have some backbone.
 
Planesmart
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sun Nov 12, 2017 8:44 pm

Couprace wrote:
Just out, Airbus will be buying some of the older A380's from EK as part of the deal for replacements.

http://www.reuters.com/article/us-emira ... DC05B?il=0

This deal exemplifies the problem of having one large client for a model. Boeing sells EK 40 787's that will produce free cash, while Airbus digs the hole deeper. Unreal.I hope Leahy's replacement will have some backbone.

Happens all the time. Boeing have acquired Airbus aircraft in trades, and vice versa.

Unless we have 100% information about the lifetime contract terms and conditions, and therefore net value, it's meaningless to draw conclusions.

In contrast, Boeing tended to go in hard at the front end, with very heavy discounting, and more recently, has switched to less discounting, replaced by below the line deals, like funding, fixed price parts and buybacks.
 
Bricktop
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sun Nov 12, 2017 8:45 pm

Not a surprise as the used A380 market is as yet nonexistent. This allows Airbus to remarket them as Certified Pre Owned.
 
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Slug71
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sun Nov 12, 2017 9:06 pm

Bricktop wrote:
Not a surprise as the used A380 market is as yet nonexistent. This allows Airbus to remarket them as Certified Pre Owned.


Could also be why they didn't make the new winglets retrofittable. Unless you buy the used birds brought up to Plus standard from Airbus.
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Sun Nov 12, 2017 10:17 pm

Couprace wrote:
Just out, Airbus will be buying some of the older A380's from EK as part of the deal for replacements.

http://www.reuters.com/article/us-emira ... DC05B?il=0

This deal exemplifies the problem of having one large client for a model. Boeing sells EK 40 787's that will produce free cash, while Airbus digs the hole deeper. Unreal.

Not really.
You can bet your life Airbus know what they are doing.
It is even clear this scenario is better for them than no deal at all. Some here have suggested why.
If you have read my recent posts on Game Theory, Airbus is gambling big : the sales of frames is just one objective amongst other vital ones.
 
racercoup
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 3:10 am

DWC wrote:
Couprace wrote:
Just out, Airbus will be buying some of the older A380's from EK as part of the deal for replacements.

http://www.reuters.com/article/us-emira ... DC05B?il=0

This deal exemplifies the problem of having one large client for a model. Boeing sells EK 40 787's that will produce free cash, while Airbus digs the hole deeper. Unreal.

Not really.
You can bet your life Airbus know what they are doing.
It is even clear this scenario is better for them than no deal at all. Some here have suggested why.
If you have read my recent posts on Game Theory, Airbus is gambling big : the sales of frames is just one objective amongst other vital ones.


Over the last (5) years Airbus has generated about 2 Billion dollars in "Free Cash Flow" FCF is the cash left after funding operations and is the key source of funding for R&D, production ramp-ups etc. In the same (5) years Boeing has generated 32 Billion FCF. Airbus may be gambling, but it's sitting at the Big Boy's table with $25 dollar chips. This A30 program has become a bottomless pit and is no doubt costing progress in other areas, but no one in upper management has the backbone to end it. Christ Airbus was not even able to leverage the A380 to win the A350/787 battle. So much for Leahy being a strong sales negotiator.

This whole EK situation is a major embarrassment for Airbus. They lose money keeping EK supplied with new A380's while Boeing sells EK profitable models. wow
 
CX747
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 3:12 am

Several articles today seem to show Airbus folks not knowing what they are doing. Like showing up at the press conference for the EK today thinking it was for the A380 and slinking away when the 787 was announced.
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racercoup
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 3:32 am

CX747 wrote:
Several articles today seem to show Airbus folks not knowing what they are doing. Like showing up at the press conference for the EK today thinking it was for the A380 and slinking away when the 787 was announced.



Airbus is looking like checker players in a chess game.
 
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Matt6461
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 8:32 am

Damn this has become really embarrassing for Airbus.
TC's comments about production continuity are almost certainly based on solid knowledge of Airbus' internal deliberations. He probably has a back channel to Airbus board members who are leaning toward cutting this loss-making program.
Given that not even an EK order would have ensured production continuity, the odds of A380 program termination coming within in a few years seem pretty high.
 
Amiga500
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 10:14 am

Matt6461 wrote:
Given that not even an EK order would have ensured production continuity, the odds of A380 program termination coming within in a few years seem pretty high.


I thought at rate 8, an EK order would ensure continued production for a decade.

Of course, its an entirely different question as to whether it would it justify investment in a plus.


In addition, there is more revenue to making aircraft than simply supplying the airframe. Spares are a significant source of profit, so even if Airbus make a marginal loss on sale of the original frame, they can easily make that back and more over the next 10-15 years of service.
 
mjoelnir
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 10:21 am

racercoup wrote:
DWC wrote:
Couprace wrote:
Just out, Airbus will be buying some of the older A380's from EK as part of the deal for replacements.

http://www.reuters.com/article/us-emira ... DC05B?il=0

This deal exemplifies the problem of having one large client for a model. Boeing sells EK 40 787's that will produce free cash, while Airbus digs the hole deeper. Unreal.

Not really.
You can bet your life Airbus know what they are doing.
It is even clear this scenario is better for them than no deal at all. Some here have suggested why.
If you have read my recent posts on Game Theory, Airbus is gambling big : the sales of frames is just one objective amongst other vital ones.


Over the last (5) years Airbus has generated about 2 Billion dollars in "Free Cash Flow" FCF is the cash left after funding operations and is the key source of funding for R&D, production ramp-ups etc. In the same (5) years Boeing has generated 32 Billion FCF. Airbus may be gambling, but it's sitting at the Big Boy's table with $25 dollar chips. This A30 program has become a bottomless pit and is no doubt costing progress in other areas, but no one in upper management has the backbone to end it. Christ Airbus was not even able to leverage the A380 to win the A350/787 battle. So much for Leahy being a strong sales negotiator.

This whole EK situation is a major embarrassment for Airbus. They lose money keeping EK supplied with new A380's while Boeing sells EK profitable models. wow


You do know that you calculate free cash flow, from cash flow and to calculating cash flow you start with profits. If you skew profits by using program for cost accounting, you skew cash flow and skew free cash flow. So you can not compare Boeing's numbers with Airbus numbers without calculating the effect of the nearly 30 billion black hole at Boeing, resulting from deferred cost and unamortized tooling and other non-recurring cost.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 10:27 am

Latest update from the air show:

Dubai wants a guarantee that Airbus will keep production of the A380 superjumbo open for at least 10 years before state-owned Emirates places a new order for the world’s largest jetliner, the airline’s president said on Monday.


https://www.reuters.com/article/emirate ... SL8N1NJ0UJ
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Noshow
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 10:29 am

Can't imagine that this question would come up suddenly during a show.
 
parapente
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 10:52 am

As others have said on the orders thread.With this new order and the lower production output (8pa) then -depending on how you calculate their present production they could either make this date (10years) easily or just depending.So I can't see that it's 'just' about that.
One is talking about 2027/28.The aircraft will have been in service 20 years.Clearly no one not even Emirates is gonna buy more A380's with an engine designed 30 years earlier!
So it is demanding a commitment to a A380NEO.The planning for that NEO therefore 'has'to be some years earlier.That in turn 'must'tie in with real volume (i.e. Not the 380!).So it's actually a commitment by RR for a new engine in that thrust class (i.e. 787/350)for that time slot.
Now that's a big ask although it's logical it would/might be happening at that time anyway.
Perhaps that's why Airbus would not be drawn on a NEO 2 years ago as they would have simply got a second request for a (second) NEO later in any event?(i.e. This request).
 
Taxi645
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 10:53 am

KarelXWB wrote:
Latest update from the air show:

Dubai wants a guarantee that Airbus will keep production of the A380 superjumbo open for at least 10 years before state-owned Emirates places a new order for the world’s largest jetliner, the airline’s president said on Monday.


https://www.reuters.com/article/emirate ... SL8N1NJ0UJ


Taxi645 wrote:
Something in the order of 30-40 planes might have given EK enough leverage to get some form of commitment from airbus about a future A380NEO.

At least the official stance appears to have changed from "their is no business case for new engines now" to "new engines will likely make sense somewhere in the future"



Sure sounds like they're trying to optimize the return for that leverage alright.
 
Momo1435
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 10:54 am

Airbus already mentioned in earlier reports about this deal that the production of the A380 would go on for a decade, but they need this order to actually make this happen. This must be reflected in the negotiations, which now appear to be very interesting. Both know they need each other for the A380. This could have resulted in a very quick deal, the early reports suggested that this would happen.

But now it looks like it turned more into a discussion in who needs the A380 more, Airbus or Emirates. Which will have a big influence on the price, who is willing to pay for keeping the line open. Is it Airbus? Accepting the discounts that Emirates will be demanding. Or Emirates? With them having to accept a higher price then they bargained for in the talks. It's possible that Emirates now accepts a higher price, but with absolute guarantees that the production line will stay open for another 10 years.
 
horizon360
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 11:13 am

racercoup wrote:
while Boeing sells EK profitable models. wow


You have a strange definition of 'profitable' considering Boeing's massive deferred production and tooling costs.
 
BA1210mk2
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 11:44 am

I just saw this on the BBC:

"Talk about overpromising and under delivering.

Before the Dubai Airshow got underway on Sunday, the media was tipped off to expect an announcement that airline Emirates was buying more A380 superjumbo jets from Airbus.

This was not just any multi-billion-dollar order, but a lifeline for an aircraft programme that is fast running out of buyers.

To add to the drama, Emirates was also buying Boeing aircraft and wanted to bring the US company and its arch rival Airbus together for a joint press conference.

That, said a Boeing executive, would have been “a unique event; never happened in my lifetime”.

But five minutes before the press conference began, the Airbus entourage melted away from the room, leaving the Middle East’s largest carrier to unveil just a $15bn order for Boeing aircraft.

What happened? One source says that after an all-night negotiating session to finalise a deal, Emirates presented Airbus with last-minute demands.

“It's hardball stuff,” he says. “Emirates know how urgently Airbus needs to shift some more A380s. They’ve [Emirates] just turned the screw. Boeing will be talking about this moment for years.”
 
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DWC
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 12:06 pm

BA1210mk2 wrote:
“Emirates know how urgently Airbus needs to shift some more A380s. They’ve [Emirates] just turned the screw

Yes, EPIRATES are playing a dangerous game, an impression I got from STC's statement yesterday, so very undiplomatic.
They are bullying Airbus in the open after scrapping the huge 70 A350 order for a 40 787 order (and 60 options), which I can understand given that Airbus modified the specs.
But EK need to play fair : their model is a "service to the world" that actually has little O/D compared to their overall pax traffic, it has taken much business from Legacies even though they have stimulated also much on their own, and have thereby also prevented possible A380s orders from other airlines as well : the A380 was designed at a time when EK was not even in the horizon as a potential customer. Point is Europe does not need them if EU & Asian airlines take their place, France & Germany widen bilaterals with them at the tune of their orders, the UAE are not such a strategic partner otherwise ( whereas Qatar is because of gaz exports ), if the A380 programme goes down because of EK I do see retaliation that can go from no more bilaterals increase ( thus stunting EK growth ) to non renewal.
STC may have missed a good opportunity to hush or refrain from new demands, unless of course this is all orchestrated with Airbus :old:
 
Amiga500
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 12:17 pm

To be blunt, it doesn't really matter what EK do, the A380 is on life support.
It does not offer the CASM advantage over the 777 (both legacy and -X) to justify the higher trip costs. Airbus either have to decide to either:
(i) stretch it
(ii) re-wing it
(iii) produce all firm orders then shutter the line.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 12:19 pm

Regarding https://www.reuters.com/article/us-emir ... SKBN1DD0XD as mentioned in the orders thread, the detailed quote is:

With 100 A380s already in Emirates’ fleet, Clark made plain the concerns about Airbus’ commitment to the project were being felt as high as the Dubai government, which owns the airline.

“I think the ownership here are concerned about continuation (of the A380). They need some copper-bottom guarantees that if we do buy some more, then the line will be continued for a minimum period of years and that they are fully aware of the consequences of cancellation and leaving us high and dry.”

“Those assurances I am sure will come. Quite when, I don’t quite know.”

Asked what would be a reasonable commitment to unblock a deal, he said: “A minimum 10 years. These are vast capital investments for us and we can’t afford to have anything less than 10 years; hopefully it would be 15. But it is their call”.

It's interesting because Enders just did say A380 would be in production for a decade last week at the 100th A380 ceremony. It's clear STC and the Emirati want more than just words at a PR event. That's a bit of a slap at Enders, IMHO.

The article goes on to say that negotiations continue but such a commitment would need board level approval.

I wonder where Enders stands in all of this. Is he willing to go to the board and ask for a guarantee of 10 more years of production?

Keep in mind not only did Enders shut down the 'Bullshit Castle', but he also took control of sales away from Bregier. Whatever happens next will be up to him. We live in interesting times, don't we, Tom?

Also I note we haven't heard anything from Leahy. It'd be interesting to hear his thoughts right about now.

parapente wrote:
As others have said on the orders thread.With this new order and the lower production output (8pa) then -depending on how you calculate their present production they could either make this date (10years) easily or just depending.So I can't see that it's 'just' about that.

What I read over on the order thread doesn't make it seem easy:

travelhound wrote:
Yes, there are 52 outstanding orders for the A380, but 22 of those aircraft are already built or currently in the assembly halls being built.

As such, there are currently 30 aircraft left to be produced (assembled). Parts for some of those thirty aircraft would already be built and just waiting to be shipped to Toulouse for assembly.

If we consider the supply chain for the A380, some parts have two year lead times and/or need to be ordered in minimum quantities (forgings for landing gear), at this stage, at 8 aircraft deliveries per year, parts of the A380 supply change may need to start shutting down.

Airbus needed this order from Emirates. I’d suggest if Airbus is unable to negotiate an order for the A380, we have probably just witnessed an event that will result in the closure of the A380 production line.

AvWeek pointed out last week that there are open slots in 2019 and 2020 that Airbus must make some decisions on by the end of this year due to the long parts lead time.

I'm still on the side that expects this order to complete. It's pretty shocking that it hasn't happened already, though.

Both sides need each other, but both sides have good reason to be concerned about the future of the program.

Neither party likes the fact that EK is the only customer willing to invest in the future of the program, but neither party can do anything about that.
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
 
parapente
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 12:47 pm

Could it be the leasing company that is making this demand?I doubt it as I think it would have come up earlier in the negotiations.Just flagging it really.
As previous it's obvious that absolutely no one would be making additional orders (even Emirates) in 10 years time without a major NEO of some sort.
I guess one could do some sort of a 'back of a fag packet'calculation as to what renewal orders might be expected in a decade.
I.e.BA 12,LH 12,Qantas 10 (maybe).AF 6 ,ME2 10 etc etc.But just silly guesses really.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 12:51 pm

Revelation wrote:
travelhound wrote:
Yes, there are 52 outstanding orders for the A380, but 22 of those aircraft are already built or currently in the assembly halls being built.

AvWeek pointed out last week that there are open slots in 2019 and 2020 that Airbus must make some decisions on by the end of this year due to the long parts lead time.


That number is simply incorrect, there are some 12 A380s at different stages of assembly. Certainly not 22.
What we leave behind is not as important as how we've lived.
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 1:02 pm

Amiga500 wrote:
To be blunt, it doesn't really matter what EK do, the A380 is on life support.
It does not offer the CASM advantage over the 777 (both legacy and -X) to justify the higher trip costs.

Apparently it does as far as EK is concerned, otherwise they would be buying up cheap gap filler 77Ws instead of negotiating for more A380s.

Amiga500 wrote:
Airbus either have to decide to either:
(i) stretch it
(ii) re-wing it
(iii) produce all firm orders then shutter the line.

Airbus, RR and EK did the sums in the 2014-5 time frame and could not make a NEO with or without a stretch work. This was before RR was neck deep in its current technical and financial challenges.

I think the current "kick the can down the road" strategy is about all we can hope for till there is much better engine tech available and some customers other than EK are willing to start refreshing their fleets.
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
 
bigjku
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 1:15 pm

mjoelnir wrote:
racercoup wrote:
DWC wrote:
Not really.
You can bet your life Airbus know what they are doing.
It is even clear this scenario is better for them than no deal at all. Some here have suggested why.
If you have read my recent posts on Game Theory, Airbus is gambling big : the sales of frames is just one objective amongst other vital ones.


Over the last (5) years Airbus has generated about 2 Billion dollars in "Free Cash Flow" FCF is the cash left after funding operations and is the key source of funding for R&D, production ramp-ups etc. In the same (5) years Boeing has generated 32 Billion FCF. Airbus may be gambling, but it's sitting at the Big Boy's table with $25 dollar chips. This A30 program has become a bottomless pit and is no doubt costing progress in other areas, but no one in upper management has the backbone to end it. Christ Airbus was not even able to leverage the A380 to win the A350/787 battle. So much for Leahy being a strong sales negotiator.

This whole EK situation is a major embarrassment for Airbus. They lose money keeping EK supplied with new A380's while Boeing sells EK profitable models. wow


You do know that you calculate free cash flow, from cash flow and to calculating cash flow you start with profits. If you skew profits by using program for cost accounting, you skew cash flow and skew free cash flow. So you can not compare Boeing's numbers with Airbus numbers without calculating the effect of the nearly 30 billion black hole at Boeing, resulting from deferred cost and unamortized tooling and other non-recurring cost.


Umm...what?
 
BlatantEcho
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 1:22 pm

Reuters and Les Echos published news stories that were 100% incorrect.

And yet some people call them 'professional and well informed'

Might as well have read my own tea-leaves.
Embarrassing for everyone involved, including the media for buying into this - to try to get a 'breaking' story, when no deal existed.
 
Amiga500
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 1:23 pm

Revelation wrote:
Apparently it does as far as EK is concerned, otherwise they would be buying up cheap gap filler 77Ws instead of negotiating for more A380s.


Yes, obviously.

But not for the rest of the world. It does not exhibit the efficiencies of scale that it should.

There is a bigger market for a (nominal) 550 seat jet than the A380-800 is able to capture... simply because the A380-800 is a pretty poor (nominal) 550 seat jet. Its a shrunk version of the (nominal) 600-650 seat A380-900.

Revelation wrote:
Airbus, RR and EK did the sums in the 2014-5 time frame and could not make a NEO with or without a stretch work. This was before RR was neck deep in its current technical and financial challenges.

I think the current "kick the can down the road" strategy is about all we can hope for till there is much better engine tech available and some customers other than EK are willing to start refreshing their fleets.


As others have said, A380s problems are not in its engines.

If Airbus (& RR) were to do a re-wing that was compatible with both the existing Trent and with a future Ultrafan, then they might gain market traction. Or if they were to do a stretch with revised pylons compatible with both the existing Trent and an envisaged Ultrafan, they might get more joy.

Otherwise, its the same extremely sub-optimal wing/fuselage-empennage combination that is leaving tens of kilos of weight saving per seat on the table.

Given that the existing wing has a much lower than idea aspect ratio, and there are concerns over yield given the capacity, sticking a higher aspect ratio carbon wing with folding wingtips on the thing and reducing the size of the horizontal/vertical stabilizers seems to be the best option to improve the platform.
 
Jayafe
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 1:29 pm

BlatantEcho wrote:
Reuters and Les Echos published news stories that were 100% incorrect.

And yet some people call them 'professional and well informed'

Might as well have read my own tea-leaves.
Embarrassing for everyone involved, including the media for buying into this - to try to get a 'breaking' story, when no deal existed.


Nothing has been proved incorrect so far, and talks continue (confirmed from both sides). Not sure whay you win denying...
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 1:54 pm

BlatantEcho wrote:
Reuters and Les Echos published news stories that were 100% incorrect.

And yet some people call them 'professional and well informed'

Might as well have read my own tea-leaves.
Embarrassing for everyone involved, including the media for buying into this - to try to get a 'breaking' story, when no deal existed.

One more source: http://aviationweek.com/commercial-avia ... -a380-deal

I don't think the rumours of an order before the show were "100% incorrect".

Pretty much every account we have says EK added the requirement for the 10 year production support at the last minute.
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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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 2:09 pm

BlatantEcho wrote:
Reuters and Les Echos published news stories that were 100% incorrect.
And yet some people call them 'professional and well informed'
Might as well have read my own tea-leaves.
Embarrassing for everyone involved, including the media for buying into this - to try to get a 'breaking' story, when no deal existed.

As I called them that, let me explain something.
No leaks are actually leaks, but lip-service to readers as journalists are bound to secrecy or they loose their source.
It is also known that companies, Airbus & EK in this case, also use journalists to put pressure on each other.
What was true before yesterday is probably true today & after tomorrow, the questions are how, how many & when.
The BBC just gave a possible answer : just when the deal seemed to be closing, EK added new demands. Happens all the time, even from the beginning : when Eastern decided to finally purchase the A300, Airbus' CEO flew in to sign the contract - a major deal for the Europeans, but Eastern's CEO presented him with an additionnal 10-12 demands off the bunny hat ; both CEOs negociated again & struck the deal in the end. The point of this anecdote is this : neither Airbus nor EK are bound to the press, they are still negociating & the details evolve, neither care what we think. What is a certainty is that the deal must go through, unless one of the parties messes up : in this case my impression is that EK are being unreasonable.
 
Taxi645
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 2:20 pm

Like I said a few months ago, it's part of negotiations. Because they want to seal the deal now at the airshow everything is in the pressure cooker and more under the magnifying glass right now:

viewtopic.php?f=3&t=1357419&start=700#p19623921

Taxi645 wrote:
It's not that complicated, it's called negotiating.

viewtopic.php?f=3&t=1357419&p=19429439#p19428453

Taxi645 wrote:
I tend too disagree with that last bit. For Emirates, wiith close to a hundred of these babies flying, the A380 is central to their business model. A GTF A380neo would be highly desirable to them. Airbus can't offer a A380neo without an A380 supply chain. If they want the GTF NEO they have to help Airbus bridge the production gap. If that means buying a few dozen higher density plusses to replace their earliest A380's on their busiest routes as part of a NEO deal, I think they will be able to come to an agreement. Though negotiations for sure, but with a mutual interest like they have they'll manage


So Airbus can't offer a A380neo without an A380 supply chain. So there is an incentive for Emirates to help keep the supply chain going. But it is much less use to them to help keep the supply chain going (even when getting very favourable conditions for the plus) if Airbus is yet unwilling to commit to a later re-engined A380 in the mid to late 20's.

It's about the cost vs reward. They like to reduce the cost (that's why they like other customers to help keep the supply chain going so that they don't have to take all the burden) and they want to increase the reward: (more) commitment from Airbus to re-engining the A380 later and ideally a retrofit option for the winglet for their current fleet (Airbus thinks it's too costly, Emirates says: sweeten the deal for us, you have to do more to make the whole thing work for us).
 
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 2:37 pm

Taxi645 wrote:
Like I said a few months ago, it's part of negotiations. Because they want to seal the deal now at the airshow everything is in the pressure cooker and more under the magnifying glass right now:

Indeed the airshow adds pressure to close the deal.

The rulers of Dubai would have liked to have had a nice big A380 order to "sex up" the airshow. The fact that they were willing to screw up the optics of their own air show is pretty remarkable to me. It's also pretty remarkable that they were willing to throw Airbus under the bus while doing so.

This is definitely time to get out the popcorn and wait to see how it ends. Will EK back down on their demand, or will Airbus make a decade long commitment to produce the A380?

STC's statement suggests they aren't going to be backing down even if that means no deal at the air show. Airbus has been silent so far.
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
 
WIederling
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Re: Airbus Working With Emirates on New Order for Flagship A380

Mon Nov 13, 2017 2:41 pm

BlatantEcho wrote:
Reuters and Les Echos published news stories that were 100% incorrect.

And yet some people call them 'professional and well informed'

Might as well have read my own tea-leaves.
Embarrassing for everyone involved, including the media for buying into this - to try to get a 'breaking' story, when no deal existed.


you don't know what happened back(stabbing)stage wise.

There is a reason why "Major Tom" Enders just yesterday asked for political help in selling Airbus products.
My guess is the US administration under Trump is in no holds barred War Mode these days.
Murphy is an optimist
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