"Imperfect substitute of A350". #Quoteoftheday

This propaganda that is going on is same as the nuclear weapon, it is their to scare people not to be used by any party. No EK cancellation No changes on the open skies agreement. it is all drama that make us in a.net and other media busy watching.

If we were going to see if prices went up we would need to do it market by market. In Seattle right now Alaska and Delta are seriously competing, Southwest is hanging in (securely), and other domestics are there as needed to keep a market presence. Some markets have more than one airport (Los Angeles, Chicago, and New York). And of course no one should assume that airlines operate in a classic free market - never have, never will. There are specific legs that are free market, but often they are subsidized by other routes which are near monopoly.

My suspicion is that if you looked at the moderately competitive routes WN and B6 fly and finagle with their books and pricing you could come up with an accurate CASM with which to compare other routes. This too has a distortion, legacies provide large and better coverage of almost all markets and that has a cost which would be fairly added into that CASM. Oddly enough there are few books on the economics of running an airline* (also running car dealerships).

* we probably have members here who could write such a book. An economic problem in book writing is that publishers want a 300 page book**. But with Amazon self-publishing maybe someone will write a 100-150 book and hopefully make a little money (or maybe 2 or 3 of you would do it).

**As an inveterate non fiction reader I call it the more pages than book syndrome, really hurts some non fiction books.

I will repeat.....a cancellation of the 777X order will not happen. The frame is absolutely tailor made to EK's specifications. The posturing by the US and Sir Tim is just that....posturing. It is what savvy parties do in a negotiation. Those that have speculated EK might want to push out some delivery dates sounds reasonable to me, but their is too much to lose on both sides to walk away from the deal.

EK is nothing if not savvy, but they will not abandon an aircraft they had a major hand in developing over spite. That is no way to run a business. EK played hardball with Airbus over the A380 but in the end EK ordered 36 additional frames because the A380 fits their business model very well.

Ultimately, this is about business imho.

If the USA blows up the bilateral with the UAE, what I have difficulties to imagine, than I would assume that both Emirates an Etihad will cancel Boeing orders. The Backlog for the 777-8/9 is 326 frames, without those two, it would be reduced to 151.
A bilateral is about trade, trade is business especially in Dubai.
A380 is not replaced by another frame. You can always take a A350 instead of the 777-8/9.

Trump is certainly unpredictable, but his inner circle (in particular, Jared Kushner) are friendly with the Gulf Arab leaders... MBZ in particular. That's partially why I'm skeptical the bilateral goes anywhere.

LAX772LR wrote:

fsabo wrote:

In true airbus style its capability will only grow with time.

...uh, that's sorta what ALL manufacturers do with their aircraft products over time.

From what I read from certain posters on this site, Airbus is the only company that improves their products over time, while Boeing doesn't improve its products at all. What gives?

Not sure what STC made these comments.

Last news I heard was that the USA was not planning to change the Open Skies Agreement with the UAE.

Much ado about nothing.

Planesmart wrote:

First important part of this equation - Boeing and the President have kept quiet, and STC made the statement. And was OK being quoted.

Second, rarely in business are the matters stated, actually THE topics under discussion/negotiation.

More likely, EK wants to extend/defer 777X deliveries, while retaining the launch pricing, packaged with even sharper 787 pricing. And perhaps even seeking more open, open skies, with a US acquisition in mind. And Boeing Capital financing at super fine margins.

Perfect timing for EK. A380 order qualified, and no decision on engines. Possible early indication of 777X performance issues on early deliveries? And 787 and engines aren't firm either.

Could also force GE to make a serious EA bid on the A380, with PiP. If EA not on next A380's, may as well select RR for 787, and if we are going to do that, may as well go A350/RR

How firm are the latest FZ 737 orders?

So much to play for / negotiate, and all inter-related.

You think AAB is a 'tough' customer?

GE can't make a Sole engine bid for the A380. They sold out to sole source their engines to Boeing for the B777 and B787 they're probably NOT going to queer that deal for Airbus. They have a sweet deal to Not have to compete with PW . They can't do much about Rolls Royce..

DCAfan wrote:

My impression is that TC is toying with Trump. Not sure this is a good idea as Trump is unpredictable. I presume Emirates ordered the next generation 777 because it is more optimal for its network than the A350

I sense that TC is goading Trump by saying for all intents and purposes that his button is bigger than Trump's. For Emirates sake, it better be.

That would be suicidal behavior by TC. But I don't disagree, it does appear he doing just that. He really should heed the example of NFL. Trump can be very calm in his dealing with companies. But then he can decide to make example of them just a easily.

Why is Clark going in the open like this? This is so not like him. This would have been okay if it was AAB, but Tim Clark? For him to lose it like that, I think we have two possibilities:

1- He may know something that the US government is seriously reevaluating the Open Skies agreement. He may have learned something that makes him think things are changing, so he's playing his biggest card, the 777X.
2- He might be willing to reduce the size of the order, as others have predicted for years. the growth of EK may not be as big as they expected in 2013 when the order was placed.

I can't think of any other reason for why he would say that in such a way, with reason #1 being the more likely one.

The list price of 777X for the EK order is over $60 billions, I guess it's clear whose the US government would choose to be on.

xwb777 wrote:

If the US government was want to renegotiate the open skies policy, they would have done it long time ago.

The current US government isn't acting exactly like the same as the US government that was there years ago

Some comments from Sir Tim Clark regarding Chapter 11:

"“I wish I had a consolidated industry like they do, 220 million travelling on three big carriers and two other ones. Only a fool would not make money on that,” said Clark. “But half of them were in Chapter 11 not too long ago, and some of them twice. If that wasn’t a subsidy, then I’ll eat my hand.”"

Our beloved Analyst, Saj Ahmed on Emirates cancelling the B777X order:

""Neither party would seriously consider abandoning the orders already placed," said Saj Ahmad, chief analyst at StrategicAero Research.

“The fact is, that they [Emirates] have nothing else to replace them [the 777Xs] with. The A350s aren’t up to the job and in any case, EK (Emirates) was instrumental in developing the 777X specifically for their mission requirements,” he said.

Source: http://www.arabianbusiness.com/transpor ... -president

Sorry, but the person behind Strategic Aero research has no credibility at all. He must be the most extremist Boeing fanboy out there and most of his posts are beyond ridiculous.

strfyr51 wrote:

will Bowing go bust without the EK order? NO! EK needs to fly to the USA and if they don't?? Then stay home!!
Boeing will do OK! what do they expect Boeing to make US Policy?? YGBSM!!

Emirates would survive without flying to the USA, and Emirates would do OK without flying to the USA... It wouldn't be the end of the world for them!!!

StTim wrote:

But his quote about how they were instrumental in the design mission is correct. It is why the 777X is not a good frame for so many operators - despite what the Boeing fan boys would say. It is a niche frame.

I don't know if that is true but the main reason Airbus lost the A350 for EK is because Airbus wouldn't make a model that suited EK requirements exactly.

But his quote about how they were instrumental in the design mission is correct. It is why the 777X is not a good frame for so many operators - despite what the Boeing fan boys would say. It is a niche frame.

RickNRoll wrote:

StTim wrote:

But his quote about how they were instrumental in the design mission is correct. It is why the 777X is not a good frame for so many operators - despite what the Boeing fan boys would say. It is a niche frame.

I don't know if that is true but the main reason Airbus lost the A350 for EK is because Airbus wouldn't make a model that suited EK requirements exactly.

EK is not one of that so many operators, given the specific geography and operational model they have.

RickNRoll wrote:

StTim wrote:

But his quote about how they were instrumental in the design mission is correct. It is why the 777X is not a good frame for so many operators - despite what the Boeing fan boys would say. It is a niche frame.

I don't know if that is true but the main reason Airbus lost the A350 for EK is because Airbus wouldn't make a model that suited EK requirements exactly.

But that does not mean that EK could not use the A350 instead of the 777-8/9.

neomax wrote:

This is Airbus' order to lose...

What in the world are you talking about?

First of all, there are hefty cancellation penalties.

Second of all these orders are already booked.

Third of all, Airbus already lose the order.

Make some sense.

Fiend wrote:

strfyr51 wrote:

will Bowing go bust without the EK order? NO! EK needs to fly to the USA and if they don't?? Then stay home!!
Boeing will do OK! what do they expect Boeing to make US Policy?? YGBSM!!

Emirates would survive without flying to the USA, and Emirates would do OK without flying to the USA... It wouldn't be the end of the world for them!!!

Wrong.

Their whole business model is based on connection opportunities on ultra long haul flights. This is also where they can either charge a premium or fill up an entire A380 on a daily basis. Go to the UAE and try to find more than a few Americans at a time. They are not numerous there. Not the mention the bulk of their US connecting traffic is going to the Indian subcontinent.

It wouldn't be the END of the world but it would be the END of a lot of things for them.

-IR

ElroyJetson wrote:

I will repeat.....a cancellation of the 777X order will not happen. The frame is absolutely tailor made to EK's specifications. The posturing by the US and Sir Tim is just that....posturing. It is what savvy parties do in a negotiation. Those that have speculated EK might want to push out some delivery dates sounds reasonable to me, but their is too much to lose on both sides to walk away from the deal.

EK is nothing if not savvy, but they will not abandon an aircraft they had a major hand in developing over spite. That is no way to run a business. EK played hardball with Airbus over the A380 but in the end EK ordered 36 additional frames because the A380 fits their business model very well.

Ultimately, this is about business imho.

I wouldn't have believed that EK would cancel the A350 but they did. They will require that Boeing stops the airlines from cancelling the Open Skies policy or their need for the 777X suddenly changes significantly.

RickNRoll wrote:

ElroyJetson wrote:

I will repeat.....a cancellation of the 777X order will not happen. The frame is absolutely tailor made to EK's specifications. The posturing by the US and Sir Tim is just that....posturing. It is what savvy parties do in a negotiation. Those that have speculated EK might want to push out some delivery dates sounds reasonable to me, but their is too much to lose on both sides to walk away from the deal.

EK is nothing if not savvy, but they will not abandon an aircraft they had a major hand in developing over spite. That is no way to run a business. EK played hardball with Airbus over the A380 but in the end EK ordered 36 additional frames because the A380 fits their business model very well.

Ultimately, this is about business imho.

I wouldn't have believed that EK would cancel the A350 but they did. They will require that Boeing stops the airlines from cancelling the Open Skies policy or their need for the 777X suddenly changes significantly.

You are giving way too much power to Boeing and the airlines. Only the government can change the open skies policy, and it has shown no sign of doing so (although the executive branch is quite unpredictable right now).

Here is what I think:

Cancelling Open Skies is a bluff tactic

STC's threat to cancel the 777X is as real as it gets

I am not making a political statement about the election with the following quote, but I am using an actual analogy I have heard which is very similar to the current dilemma:

"Once he lost, Trump would be both insanely famous and a martyr to Crooked Hillary. His daughter Ivanka and son-in-law Jared would be international celebrities. Steve Bannon would become the de facto head of the tea-party movement. Kellyanne Conway would be a cable-news star. Melania Trump, who had been assured by her husband that he wouldn’t become president, could return to inconspicuously lunching. Losing would work out for everybody. Losing was winning."

This is the exact strategy that the US3 are trying to use in the Open Skies debate.

The US3 are trying to sling mud at the ME3 because they are continuing the same strategy they have pursued under past administrations under the perception that they will lose. However, like the election, you must be careful what you wish for. The US3 are probably expecting to lose the Open Skies debate in the same way Trump expected to lose the election. Of course we know the latter completely went in the opposite direction and is arguably not what he had bargained for. Losing the open skies is beneficial for the US3; they get to slander the ME3 while not having to prove anything themselves. They can claim the victim card to stifle competition while continuing to print record profits. The alternative is that they win which sees the consumer suffer resulting in widespread bad PR against the US3 in the media, which would be magnitudes worse. If the US3 can "lose," they win. If you make record profits either way, then do just enough to make your competition look bad under the guise of US jobs, but don't lobby hard enough to end up in a situation where you have to prove your own worth. However, under the unpredictability of the current administration, this could backfire much in the way Boeing succeeded in efforts to get a 300% tariff slapped on the CSeries resulting in nothing but bad PR, and could be a curse, not a blessing. If the US3 make the mistake of pushing too hard like Boeing, instead of losing, the US3 could gain the support of the administration and after repealing open skies, they won't have to just talk the talk, but they'll have to walk the walk, and there is no good outcome for them if that happens. The US3 would much rather prefer the first option, where they can attack the ME3 and lose instead of win and get attacked by the public and exposed by the media if open skies is repealed. It would be a supremely unpopular move to say the least and that is why the US3 are trying to walk a fine line of trying to hurt others without getting hurt themselves.

The reality is, it's always easier to be the one who is attacking than to be the one who is being attacked. The US3 excel at attacking the ME3 to get Open Skies repealed, but will end up winning the battle and losing the war.

Trust me, the US3 do not want to have their names next to an article about anti-consumerist collusion to degrade the flying experience which is what WILL end up happening if they inadvertendly succeed at getting Open Skies repealed.

You can talk all day about saving US jobs, but the real challenge is what you do when you're in the spotlight and somebody gives you the chance to do so. The US3 will be despised by the public when mainstream news publicizes this and people across the country realize what has just happened.

Net neutrality is the closest parallel to open skies and gives the best picture about how the general public would react to a repeal of it, as both the internet and ability to travel are very important to the public and are widely perceived to deserve robust protection from any interference from industry giants. The unfortunate news is that if net neutrality is any indication, open skies is not going to survive to see 2019 either. Even with endless media publicity, dozens of campaigns to save net neutrality and widespread public support, nothing was enough to save it.

Unfortunately, I don't think that open skies is going to survive either. Open skies doesn't have the benefit of any of the mainstream awareness that net neutrality had, and in the current protectionist climate, its chances for survival are infinitesimally bleak. The reality we have to face is that industry giants have a tremendous iron grip on the issue, and people's opinions have no weight in it whatsoever. The benefit open skies has is that unlike net neutrality which had industry giants on one side and people on the other, open skies has industry giants on both sides. This is primarily the reason why the debate has been so drawn out. The US3 is akin to the FCC; the anti-consumer if you will. The ME3 represent the public interest, but also have a major advantage of positive public perception while also being equally powerful industry giants. Unlike net neutrality, the anti-consumer has a strong counterweight: Emirates. As the saying goes, you need fire to fight fire; you need a corporation to fight a corporation. STC has the 777X order which is his nuclear button, not to be used except in the most dire of dire situations.

If ever there was a time to use it, this is it.

RickNRoll wrote:

ElroyJetson wrote:

I will repeat.....a cancellation of the 777X order will not happen. The frame is absolutely tailor made to EK's specifications. The posturing by the US and Sir Tim is just that....posturing. It is what savvy parties do in a negotiation. Those that have speculated EK might want to push out some delivery dates sounds reasonable to me, but their is too much to lose on both sides to walk away from the deal.

EK is nothing if not savvy, but they will not abandon an aircraft they had a major hand in developing over spite. That is no way to run a business. EK played hardball with Airbus over the A380 but in the end EK ordered 36 additional frames because the A380 fits their business model very well.

Ultimately, this is about business imho.

I wouldn't have believed that EK would cancel the A350 but they did. They will require that Boeing stops the airlines from cancelling the Open Skies policy or their need for the 777X suddenly changes significantly.

EK wanted a regional wide body and that is what Airbus promised them with the A350. Then they upgraded the A350 and it was no longer optimized as a regional frame. So to me, it made perfect sense that EK cancelled the A350 order.


The 777X was made almost exactly to EK's specifications and imho perfectly meets their business model as a high capacity very long range wide body. I would be truly shocked it they cancelled the order. Now maybe pushing out some deliveries....sure...I could see that quite easily.