5 years ago I can’t imagine seeing these two stories come out on the same day.

https://www.avweb.com/avwebflash/news/B ... 030-1.html

https://www.reuters.com/article/us-airb ... SKBN1E51U9

Will have to see how it all plays out but one could have bet a ton of money here in 2012 on the chances of seeing these two articles with the same dateline appearing at the end of 2017. In practical terms if Airbus is really considering 6 per year that isn’t good news at all.

The 767 news is interesting. I would still expect any orders for a passenger version to be tied up with a 797 agreement and a cargo conversion agreement if they get done. In that case the timetable for all the pieces starts to make more sense.

Regardless is a pretty strange set of articles to see on the same day.

bigjku wrote:

5 years ago I can’t imagine seeing these two stories come out on the same day.

https://www.avweb.com/avwebflash/news/B ... 030-1.html

https://www.reuters.com/article/us-airb ... SKBN1E51U9

Will have to see how it all plays out but one could have bet a ton of money here in 2012 on the chances of seeing these two articles with the same dateline appearing at the end of 2017. In practical terms if Airbus is really considering 6 per year that isn’t good news at all.

The 767 news is interesting. I would still expect any orders for a passenger version to be tied up with a 797 agreement and a cargo conversion agreement if they get done. In that case the timetable for all the pieces starts to make more sense.

Regardless is a pretty strange set of articles to see on the same day.

The AvWeb article is quite poor. They cite Leeham as a source, but when you go there it contradicts the notion that the NMA plan is slipping ("NMA EIS target remains 2025, Boeing says, as opposed to 2027, according to market sources") and it doesn't say the 767 "will be ramped up", it says "Boeing 767 production ramp up studies underway, effective as soon as early 2020".

Too bad we don't have the "pile o' poo" icon, I'd use it on the AvWeb story. It's adding 0.5 and 0.5 and getting 2.0.

There was a story in the Puget Spoud Business Journal that was more current but it’s behind a paywall so I didn’t link.

They didn't come out the same day. The second article is just a couple very brief snippets of older information. The rumor that the timeline for the MoM may be more like 2027 than 2025 came out last week. The Leeham article about polling suppliers with regards to ability to support a ramp up and additional passenger 767 orders is from October and is under discussion here:

viewtopic.php?t=1376671

That said, I do see Leeham mentioned the 767 sales prospects again this morning in regards to an article about prospects for used A330's to fill the same role.

The possibility of another A380 rate cut is unfortunate. I think they'd previously said they were looking at the potential to maintain production profitability below one per month, but hadn't hinted at going as low as 6 per year.

iamlucky13 wrote:

They didn't come out the same day. The second article is just a couple very brief snippets of older information. The rumor that the timeline for the MoM may be more like 2027 than 2025 came out last week. The Leeham article about polling suppliers with regards to ability to support a ramp up and additional passenger 767 orders is from October and is under discussion here:

viewtopic.php?t=1376671

That said, I do see Leeham mentioned the 767 sales prospects again this morning in regards to an article about prospects for used A330's to fill the same role.

The possibility of another A380 rate cut is unfortunate. I think they'd previously said they were looking at the potential to maintain production profitability below one per month, but hadn't hinted at going as low as 6 per year.

Airbus never really defined non-material losses at the 12 and 8 per year rates. You have to figure those only get bigger at a 6 per rate.

Honestly I think their stock would go up if they said they were walking away from the program.

i guess with 6 per year Airbus can give EK the 10 years production guarantee.

bigjku wrote:

Honestly I think their stock would go up if they said they were walking away from the program.

It might.

But that'd be absolutely no sensible way to gauge the long term effect of a decision on the health of a company! [not just Airbus]

I would look at the 6 per years A380 production rate under the premises of giving a guaranty to Emirates about keeping the A380 production running for a certain number of years, rather than a decision to go for 6 frames a year in the near future.
The main problem is, that Emirates takes more than the 8 or 6 per year in the near future and therefore depletes the backlog faster than a production rate of 8 a year would indicate.
Looking at the situation today, the production rate has been lowered to 12 a year and deliveries this year will be at least 15 frames.

Amiga500 wrote:

bigjku wrote:

Honestly I think their stock would go up if they said they were walking away from the program.

It might.

But that'd be absolutely no sensible way to gauge the long term effect of a decision on the health of a company! [not just Airbus]

No but in this case I think this is one where the markets would be correct. I honestly think both the A380 and the 748 are distractions.

bigjku wrote:

Amiga500 wrote:

bigjku wrote:

Honestly I think their stock would go up if they said they were walking away from the program.

It might.

But that'd be absolutely no sensible way to gauge the long term effect of a decision on the health of a company! [not just Airbus]

No but in this case I think this is one where the markets would be correct. I honestly think both the A380 and the 748 are distractions.

Agreed that the VLAs are distractions and money sucking entities.

To economically make parts, 25 per year is the minimum. Neither is there for many parts. With spares, because they are quads, they are for many parts.

Lightsaber

lightsaber wrote:

bigjku wrote:

Amiga500 wrote:

It might.

But that'd be absolutely no sensible way to gauge the long term effect of a decision on the health of a company! [not just Airbus]

No but in this case I think this is one where the markets would be correct. I honestly think both the A380 and the 748 are distractions.

Agreed that the VLAs are distractions and money sucking entities.

To economically make parts, 25 per year is the minimum. Neither is there for many parts. With spares, because they are quads, they are for many parts.

Lightsaber

With the R&D sunk, it probably makes sense for Airbus to keep trickling the line. As long as they aren't losing anything significant per build, they'll get it back in support.

It also keeps open the potential for more orders, which may result in a build profit down the line. Whereas shuttering the line definitely kills any chance of profits.

Right now, trickling the line is low risk. You aren't gonna lose much, you might make a little and if something were to change in the Asian market, you might make a decent bit.

lightsaber wrote:

bigjku wrote:

Amiga500 wrote:

It might.

But that'd be absolutely no sensible way to gauge the long term effect of a decision on the health of a company! [not just Airbus]

No but in this case I think this is one where the markets would be correct. I honestly think both the A380 and the 748 are distractions.

Agreed that the VLAs are distractions and money sucking entities.

To economically make parts, 25 per year is the minimum. Neither is there for many parts. With spares, because they are quads, they are for many parts.

Lightsaber

I would suspect that the 748 using a variant of a widely produced 787 engine would be under a bit less pressure from the engine supplier side to fish or cut bait but I am with you. I don’t ever see enough sales to justify getting production for these aircraft back above the 2 per month level even if they were further modernized. If you can make absurd margins on a cargo variant you might limp along otherwise it’s time to bail.

I think the 779 is about the upper limit size wise for what the market will really support. Even then I have concerns. I think it’s far more likely to stay at the 5 per month rate than go up and could see it being sustainable at 3 or 4 per month even. I don’t see it going towards the rate 777’s once did.

My guess is that Boeing slowly feeds improvements into the 77X over the years. The 797 as a new program will be launched, in about 2025ish you will see a 787 revamp with new engines kick off. Once 797 flys they will move onto the 737 replacement before they bother to address the segment above the 788/A350 again.

I suspect Airbus won’t try to play in the above A350 market simply because there isn’t room above the A350-1000 to fit anything. If they can find the partner to re-engine the thing maybe they revamp the A380 but I don’t see it being worth their time. I am not really sure where they deploy their talents next honestly. To me their way forward is less clear. But I don’t think it should be time and money sunk into the A380.

Seems that the A380 is tracking to the low side of the predictions:
• Malaysia telling us that the Haji-liner project is cancelled
• HiFly not taking the Dr Peters / ex-SQ frames, no recent update on their plans
• Airbus said to be discussing reducing production to 6 per year with major suppliers.

Seems Airbus is reaching the goal they set for themselves a long time ago, parity with the 747!

lightsaber wrote:

To economically make parts, 25 per year is the minimum.
Lightsaber

old manufacturing school logic... todays production methods allow manufacturers to make a single part as cheap or cheaper than a lot of 25. look at Just in Time and other concepts that have been successfully implemented. Additionally lot sizes greater than one require more storage and handling costs plus inventory taxes. Not to mention if you have a setup or material flaw on a lot of 25, the whole lot must be redone where as in a single unit production, only the single unit needs replacing. Years ago when I was managing parts stores for Boeing, we had bins of just in case parts (many not spare-able) that were eventually scrapped either do to no use, cure date expiration, engineering change, etc. that wiped out any economies of scale.. heck when we converted to JIT, some KC 97 and KC 135 parts were found.

Revelation wrote:

• Airbus said to be discussing reducing production to 6 per year with major suppliers.

there comes a point where the costs of retaining capability (even with enlightened parts control) and manpower skills that even a reduced rate line begins to eat up more than any potential profit. I think the A380 is more likely to reach that point before the 747-8F only because of the convoluted logistics flow, unique equipment requirements and the un-Godly split site production responsibility idea..