Ab345 wrote:

IMHO Boeing has 3 things going for them right now:

*A higher production rate that allows them to secure future deliveries . (Clearing of the backlog is helping a lot)
*Better pricing than past 787 campaigns
*Seizing the opportunity of the change of leadership at Airbus. Leahy out of the way is a big plus for them.

After having their "guns" full and ready to shoot, they found the easiest targets (AA was not difficult to secure, HA feeling awkward as the sole 338 customer) and secured the deals. Congrats to them and well done. Both companies have amazing planes on offer and as always some you loose, some you win. Personally I don't believe D7 is that easy to flip, would sure make huge headlines (and huge bonuses to the Boeing guy that secures that) but as others before have stated, the A359 was an oddball in the current fleet plans. The 251t A339 should be the best option for them.
*

D7/AirAsiaX won't be easy to flip. But not impossible. Both vendors will have to earn this order. By my estimation, Boeing will have to discount an extra $1.5 million per aircraft to overcome the advantage of already flying A330s.

The advantage to Boeing of winning this order is:
1. More aircraft sold to pay off 787 development costs.
2. Ruins the A330NEO financing market.

I do not believe Boeing will bid at a loss. I also do not believe A330NEO launch pricing is as good as today's price.

Airbus is late delivering and that opens up contract escape clauses.

Both vendors will have to win this order. Considering how agressive GE has been, that could be the tipping factor.

Either side could win this decision. AirAsiaX cannot lose rebidding this order. All terms are up for negotiation. Let us see how this goes.

But as far as I can tell, Boeing has substantially reduced the production cost difference between the 789 and A339. Boeing has removed the delivery timeline advantage of the A339. So today's bid is under different terms than the launch bid.

Lightsaber

juliuswong wrote:

AirAsia X team is currently now in the US. Can't say anything more than that. 787 souvenirs distributed in office recently. Does it constitutes to anything? I can't comment.

Visiting future destinations or other suppliers?.... I have seen Airbus models in the corporate offices of "all Boeing" operators.....

What about flying 787-10 and 330NEO together for different missions? Does it make any sense in any way ?

My Impression is:
Probably in this case Airbus must undercut the 787 Prouction cost Price, similar as Boeing did to undercut the A350 Price (as discussed in HA thread).

This case is different from selling planes to a US Airline as dumping is not relevant here.

Flyglobal

imthedreamliner wrote:

What about flying 787-10 and 330NEO together for different missions? Does it make any sense in any way ?

Yes... They operate slightly different missions. In fact what Fernandes was hinting sometime back is they were looking at expansion beyond the 66 a330neo and that is where the 787 was being studied. Even here I suspect commonality may win and there will be further a330 orders at Farnbourogh.

lightsaber wrote:

Either side could win this decision. AirAsiaX cannot lose rebidding this order. All terms are up for negotiation.

Lightsaber

Agreed. And, in light of the ongoing (and, reportedly, quite serious) bribery investigation, perhaps Airbus doesn't have quite as much "flexibility" in negotiating deals as they did during the original go-around with AirAisiaX. -ir

juliuswong wrote:

AirAsia X team is currently now in the US. Can't say anything more than that. 787 souvenirs distributed in office recently. Does it constitutes to anything? I can't comment.

You can't because you don't know? Or you can't because you know and are not at liberty to say anything?

juliuswong wrote:

AirAsia X team is currently now in the US. Can't say anything more than that. 787 souvenirs distributed in office recently. Does it constitutes to anything? I can't comment.

Aw, come on, man! You've been dropping these tantalizing hints for weeks now. Spill already! -ir

ap305 wrote:

juliuswong wrote:

AirAsia X team is currently now in the US. Can't say anything more than that. 787 souvenirs distributed in office recently. Does it constitutes to anything? I can't comment.

Visiting future destinations or other suppliers?.... I have seen Airbus models in the corporate offices of "all Boeing" operators.....

It’s possible, but Air Asia X seems to be spending a lot of time in the US lately. They were just in Seattle earlier this year (or late last year?). I agree that a Boeing order is a long shot though, but there is some smoke indicating that Air Asia X is trying to deal right now- ultimately with who is the big question.

xjetflyer2001 wrote:

787Driver wrote:

LoganTheBogan wrote:

I kinda hope not. TBH I really get sick of the 787. Too many of them flying around and they're way too over hyped. I've been on them heaps of times and don't really notice a difference between them and other aircraft, or anything they've been advertising about them. I know they work well for airlines but I just like variation.

Flying the 787 as a pilot, I do notice a small difference, compared to my previous aircraft type, but I agree that the 787 is overhyped for what it is. I especially have noticed that many interior parts feel flimsy and in the cockpit too.

I'm not sure how long of flights you two are doing with the 787, but I fly to Asia a lot so 10-12 hours is the norm I am on that aircraft, I feel 10 times better arriving at my destination than I do when I'm on a 777 or 747, can't speak for the Airbus really except for the A340-600 as that is the only long haul I have done on the airbus, but that difference in cabin pressure makes a ton of difference on my body personally

I usually fly 10-12 hours too.

george77300 wrote:

Source:
@TonyFernandes (CEO Air Asia) has just confirmed the airline has no plans to buy the Airbus #A350 XWB — despite having 10 of them on (firm) order.

• AirAsiaX also has 66 #A330neo aircraft on firm order

• Final decision on AirAsiaX’s future fleet is expected later this year



So by the looks of it A350 cancelled. A330neo order in its totality not certain. Possible B787 as previously suggested but unlikely?

I'm sorry but what is the actual source for this statement? I've not seen it reported anywhere else.

Peterwk146 wrote:

george77300 wrote:

Source:
@TonyFernandes (CEO Air Asia) has just confirmed the airline has no plans to buy the Airbus #A350 XWB — despite having 10 of them on (firm) order.

• AirAsiaX also has 66 #A330neo aircraft on firm order

• Final decision on AirAsiaX’s future fleet is expected later this year



So by the looks of it A350 cancelled. A330neo order in its totality not certain. Possible B787 as previously suggested but unlikely?

I'm sorry but what is the actual source for this statement? I've not seen it reported anywhere else.

There are several published reports, including: https://www.reuters.com/article/us-aira ... SKBN1HN102

-ir

jeffrey0032j wrote:

raylee67 wrote:

imthedreamliner wrote:

Step 1 accomplished for Boeing. Now they will give everything they have to persuade Air Asia X to switch to dreamliner. It will be interesting to watch. If it is very obvious they will keep the Neo order, then why is there a need for a final decision on fleet ? This order is alot more then selling dreamliners, it is about killing 330neo.

It's a bit premature on killing A330NEO. There are still many airlines that need to have their old A330-300 replaced. If Airbus is desperate enough to offer cut-throat prices (which it can do that profitably because A330NEO development cost is incremental), many of them may be tempted to get some -900. Prime candidate would be airlines like CX, CI, PR or MH, where they fly a substantial fleet of A330-300, but have no 787 orders. Thai and Korean could be in the play too, as they tend to order a bit of everything.

And then there are the Chinese carriers. If Airbus allows China to manufacture/assemble A330NEO, then there will be 100+ orders immediately. It's easy for CA, MU, HU and CZ to each take 20 to 30, and actually filling the planes. Airbus is already assembling A320 and A330CEO in China, getting the A330NEO assembled there is not a huge deal. Airbus will guard the A350 closely, but not A330NEO.

Airbus is not assembling any A330s in China. The A330s are assembled in Toulouse then flown to Tianjin for completion of cabin. It would be stupid for Airbus to assemble the A330 in China, which is the world's largest photocopier machine.

They already do for a320 so why would a330 be any different? In fact given the recent protectionism, i would say airbus should reach out to china right now for a large a330neo order.

Peterwk146 wrote:

george77300 wrote:

Source:
@TonyFernandes (CEO Air Asia) has just confirmed the airline has no plans to buy the Airbus #A350 XWB — despite having 10 of them on (firm) order.

• AirAsiaX also has 66 #A330neo aircraft on firm order

• Final decision on AirAsiaX’s future fleet is expected later this year



So by the looks of it A350 cancelled. A330neo order in its totality not certain. Possible B787 as previously suggested but unlikely?

I'm sorry but what is the actual source for this statement? I've not seen it reported anywhere else.

Just punch Air Asia X into google. There are tons of results. The CEO said it on an online press conference. I think cancelled is wrong term at this point. The CEO said they won’t be buying them.

Take that for what it is worth. I expect it’s a way to say the cancellation is coming when it is appropriate and necessary. Probably part of ongoing negotiations frankly.

Tony Fernandes used to be indecisive but now he's not so sure.

I have updated the title according to the linked articles of Reuters and Economic Times of India.

tphuang wrote:

jeffrey0032j wrote:

raylee67 wrote:

It's a bit premature on killing A330NEO. There are still many airlines that need to have their old A330-300 replaced. If Airbus is desperate enough to offer cut-throat prices (which it can do that profitably because A330NEO development cost is incremental), many of them may be tempted to get some -900. Prime candidate would be airlines like CX, CI, PR or MH, where they fly a substantial fleet of A330-300, but have no 787 orders. Thai and Korean could be in the play too, as they tend to order a bit of everything.

And then there are the Chinese carriers. If Airbus allows China to manufacture/assemble A330NEO, then there will be 100+ orders immediately. It's easy for CA, MU, HU and CZ to each take 20 to 30, and actually filling the planes. Airbus is already assembling A320 and A330CEO in China, getting the A330NEO assembled there is not a huge deal. Airbus will guard the A350 closely, but not A330NEO.

Airbus is not assembling any A330s in China. The A330s are assembled in Toulouse then flown to Tianjin for completion of cabin. It would be stupid for Airbus to assemble the A330 in China, which is the world's largest photocopier machine.

They already do for a320 so why would a330 be any different? In fact given the recent protectionism, i would say airbus should reach out to china right now for a large a330neo order.

It is not too difficult to see that Airbus would prefer to have the duopoly that they have right now, instead of giving someone else a free pass (by copying designs) into the widebody market. The narrowbody market is a lot bigger and can potentially accomodate a few more competitors without hurting A and B, but the widebody market is not.

Airbus reaching out to China? Western European countries like France, Germany and UK are still wary of Chinese influence, relationship between them and China are not too different from US-China, even though the US-China trade war is much more public.

ap305 wrote:

juliuswong wrote:

AirAsia X team is currently now in the US. Can't say anything more than that. 787 souvenirs distributed in office recently. Does it constitutes to anything? I can't comment.

Visiting future destinations or other suppliers?.... I have seen Airbus models in the corporate offices of "all Boeing" operators.....

True, if one only knew how much Airbus A320 swag is left at SWA's HQ offices.

The A350 made no sense in Air Asia's network and dropping them will increase future A339s buying capacity. Boeing can throw them a party full of souvenirs in their colors. That team is driving A339 price down while having a heck of a time in Seattle

jeffrey0032j wrote:

tphuang wrote:

jeffrey0032j wrote:

Airbus is not assembling any A330s in China. The A330s are assembled in Toulouse then flown to Tianjin for completion of cabin. It would be stupid for Airbus to assemble the A330 in China, which is the world's largest photocopier machine.

They already do for a320 so why would a330 be any different? In fact given the recent protectionism, i would say airbus should reach out to china right now for a large a330neo order.

It is not too difficult to see that Airbus would prefer to have the duopoly that they have right now, instead of giving someone else a free pass (by copying designs) into the widebody market. The narrowbody market is a lot bigger and can potentially accomodate a few more competitors without hurting A and B, but the widebody market is not.

Airbus reaching out to China? Western European countries like France, Germany and UK are still wary of Chinese influence, relationship between them and China are not too different from US-China, even though the US-China trade war is much more public.

They reach out to china all the time for new orders. Never a better time than now when china is on icy relationships with us.

xjetflyer2001 wrote:

787Driver wrote:

LoganTheBogan wrote:

I kinda hope not. TBH I really get sick of the 787. Too many of them flying around and they're way too over hyped. I've been on them heaps of times and don't really notice a difference between them and other aircraft, or anything they've been advertising about them. I know they work well for airlines but I just like variation.

Flying the 787 as a pilot, I do notice a small difference, compared to my previous aircraft type, but I agree that the 787 is overhyped for what it is. I especially have noticed that many interior parts feel flimsy and in the cockpit too.

I'm not sure how long of flights you two are doing with the 787, but I fly to Asia a lot so 10-12 hours is the norm I am on that aircraft, I feel 10 times better arriving at my destination than I do when I'm on a 777 or 747, can't speak for the Airbus really except for the A340-600 as that is the only long haul I have done on the airbus, but that difference in cabin pressure makes a ton of difference on my body personally

I've done 7 hour flights on a 787 and I'm pleased to get off it. The ones I flown on are cramped and uncomfortable, especially when the passenger in front of me decides to recline his seat. Given the choice between 787 and A330 for comfort I'd choose the A330.

Fiend wrote:

xjetflyer2001 wrote:

787Driver wrote:

Flying the 787 as a pilot, I do notice a small difference, compared to my previous aircraft type, but I agree that the 787 is overhyped for what it is. I especially have noticed that many interior parts feel flimsy and in the cockpit too.

I'm not sure how long of flights you two are doing with the 787, but I fly to Asia a lot so 10-12 hours is the norm I am on that aircraft, I feel 10 times better arriving at my destination than I do when I'm on a 777 or 747, can't speak for the Airbus really except for the A340-600 as that is the only long haul I have done on the airbus, but that difference in cabin pressure makes a ton of difference on my body personally

I've done 7 hour flights on a 787 and I'm pleased to get off it. The ones I flown on are cramped and uncomfortable, especially when the passenger in front of me decides to recline his seat. Given the choice between 787 and A330 for comfort I'd choose the A330.

So would I... 2-4-2 beats 3-3-3 any day, especially when we're talking about roughly the same fuselage width. A few times I've positioned in economy in the airline I fly for, and the seats are too narrow for comfort in my opinion.

Fiend wrote:

xjetflyer2001 wrote:

787Driver wrote:

Flying the 787 as a pilot, I do notice a small difference, compared to my previous aircraft type, but I agree that the 787 is overhyped for what it is. I especially have noticed that many interior parts feel flimsy and in the cockpit too.

I'm not sure how long of flights you two are doing with the 787, but I fly to Asia a lot so 10-12 hours is the norm I am on that aircraft, I feel 10 times better arriving at my destination than I do when I'm on a 777 or 747, can't speak for the Airbus really except for the A340-600 as that is the only long haul I have done on the airbus, but that difference in cabin pressure makes a ton of difference on my body personally

I've done 7 hour flights on a 787 and I'm pleased to get off it. The ones I flown on are cramped and uncomfortable, especially when the passenger in front of me decides to recline his seat. Given the choice between 787 and A330 for comfort I'd choose the A330.

Normally yes. But Air Asia X will go 3-3-3 in A330 and if they did get A350 it’s 3-4-3. Both considerably worse than 9 abreast 787.

Problem for Boeing: if they try to repeat the AA order again - underbidding Airbus again - you´ll immediately have a whole lot of current and like future 787 clients on your doorsteps threatening to pull a simiarl stunt. Either Boeing lowers their price, or they move to Airbus - it´s quite a hot fire Boeing is playing here, for neither Boeing´s nor Airbus´s margins good.

What this press release further confirms: contracts don´t appear to be worth the paper they are printed on anymore. Whilst I understand that renegotiating contracts is part of business, the current speed several market player try to switch plans is dangerous as it starts to deprieve the manufacturers from long-term planning perspective, which, in a capital goods market, is not good. It certainly raises the question if orders five plus years out from delivery can really be accounted solidly, or if auditors will need to apply a far softer valuation.

My take on D7: it´s a try to get better pricing on an A330-900neo add-on order, and at the same time getting rid of the current A350 order. Nothing more.

raylee67 wrote:

If Airbus is desperate enough to offer cut-throat prices (which it can do that profitably because A330NEO development cost is incremental), many of them may be tempted to get some -900. Prime candidate would be airlines like CX, CI, PR or MH, where they fly a substantial fleet of A330-300, but have no 787 orders. Thai and Korean could be in the play too, as they tend to order a bit of everything.

And then there are the Chinese carriers. If Airbus allows China to manufacture/assemble A330NEO, then there will be 100+ orders immediately. It's easy for CA, MU, HU and CZ to each take 20 to 30, and actually filling the planes. Airbus is already assembling A320 and A330CEO in China, getting the A330NEO assembled there is not a huge deal. Airbus will guard the A350 closely, but not A330NEO.

There are problems with being overly aggressive on A330neo pricing, though. Airbus is still in business to make a profit, and accepting poor margins to make a sale isn't necessarily in the interest of shareholders unless a big-picture benefit results (in the case of the A330neo, perhaps a vote of confidence from the largest airline customer or perhaps convincing lessors not to abandon the model). The other key risk is that fire-sale pricing on the A330neo might take sales away from the A350 as well, and the A350 will be a key profit driver for Airbus in coming years.

787Driver wrote:

So would I... 2-4-2 beats 3-3-3 any day, especially when we're talking about roughly the same fuselage width. A few times I've positioned in economy in the airline I fly for, and the seats are too narrow for comfort in my opinion.

Except we're taking about Air Asia X, which already operates its A330ceos in a 9-abreast (3-3-3) configuration. I'll pick a 9-across 787 over a 9-across A330 any day.

Siddar wrote:

What model does Air Asia X use? That will tell you if they will cancel the 330neo. If they use a quick turnover model of only operating aircraft for ten year or if they will keep the aircraft for 20+ years? If they intended to lease a large portion of aircraft or will operate them as an airline?

With Delta as a comparison we know they will hold aircraft for 20+ years and operate them in Delta. If Air Asia X is using a more short term and lease centric model then those factor into descion to purchase. Both can impose additional cost beyond purchase price and may render the purchase no longer viable.

It's all speculation of course.

I think probably plays a bigger role than most here are willing to acknowledge. Even if Airbus is willing to come down on the price of the A330neo, the thin order book so far, coupled with the fact that it's a reengined 30-year-old model (and faces pressure from the 787, A321neo, and possibly Boeing's MOM), probably is pressuring what lessors and financiers expect long-term residual values to be. That tends to drive up lease rates and financing terms, and may paradoxically raise the lease or ownership costs of an A330neo above the 787.

Flying-Tiger wrote:

Problem for Boeing: if they try to repeat the AA order again - underbidding Airbus again - you´ll immediately have a whole lot of current and like future 787 clients on your doorsteps threatening to pull a simiarl stunt. Either Boeing lowers their price, or they move to Airbus - it´s quite a hot fire Boeing is playing here, for neither Boeing´s nor Airbus´s margins good.

What this press release further confirms: contracts don´t appear to be worth the paper they are printed on anymore. Whilst I understand that renegotiating contracts is part of business, the current speed several market player try to switch plans is dangerous as it starts to deprieve the manufacturers from long-term planning perspective, which, in a capital goods market, is not good. It certainly raises the question if orders five plus years out from delivery can really be accounted solidly, or if auditors will need to apply a far softer valuation.

My take on D7: it´s a try to get better pricing on an A330-900neo add-on order, and at the same time getting rid of the current A350 order. Nothing more.

There is no evidence that Boeing intentionally underbid Airbus on the AA order. That was Boeing's order to lose - AA already has a growing fleet of 787s and is looking to dump its A333s and old 763s. Boeing didn't have to price any lower than usual since AA already wanted out of the A350 deal that they inherited from US.

In this case, the D7 order is Airbus's to lose. However, HA also went to Boeing despite already operating A321neo and A332.

IndianicWorld wrote:

This is Air Asia X.. an airline that seems to change its strategy every few months.

The amount of times it has stated it will grow frequencies only to not long after instead cut them on its network is just too hard to follow.

Their fleet decision making process seems just as hard to read.

= Exactly right. It is Tony - a man with no moral compass who changes his mind via media everyday to maximize publicity. I am sure his vendors have already factored his mercurial nature in their calculation.

Saludos,
Alex

What would the 787 offer that the A330neo would not? Nothing. Both would be configured at 9-abreast so there would be virtually no CASM advantage for the 787. Air Asia X is an LCC so customer comfort is secondary. Heck so called traditional carriers are flying 9-abreast 787's and 10-abreast 777's which are already terrible. But yeah perhaps Boeing will offer Air Asia a price they cannot refuse. Perhaps Boeing has internally conceded that profits don't matter nor ever breaking even with the 787. If that's the case I would not be surprised By a 787 order.

If the A350 seems expensive to him the B787 certainly won't fix that. Saying it aloud is just a bargaining tactic to get some more A330neos at a discounted price from Airbus or maybe a discount on the current order.

abrelosojos wrote:

IndianicWorld wrote:

This is Air Asia X.. an airline that seems to change its strategy every few months.

The amount of times it has stated it will grow frequencies only to not long after instead cut them on its network is just too hard to follow.

Their fleet decision making process seems just as hard to read.

= Exactly right. It is Tony - a man with no moral compass who changes his mind via media everyday to maximize publicity. I am sure his vendors have already factored his mercurial nature in their calculation.

Saludos,
Alex

The situation with the A339neo os fundamentally different from what they probably signed up for. Depending on how you count things they are 30-50% of the order book. It’s the lower figure against firm orders and the higher if you back out the Iran Air order and the leases which if you are placing things with HiFly this early seem somewhat less desirebale slots than the lessors likely thought.

Regardless of what numbers you use that is a huge risk for Air Asia X.

With the A380 EK is around that 50% level. And we have seen the issues that has going both ways.

Same story with the 777x to this point with EK again way out front.

But further on you rarely if ever see concentrations like that.

Qatar has like 9% of A350. ANA has 6% of 787. Of the A333 Cathay 6%. China Eastern has 5% of A332. Delta had 7% of the 767. The 757 saw concentrations closer to 12% at Delta and American. The A340 was similar with Lufthansa. EK was around 14% of 77W orders.

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

george77300 wrote:

Fiend wrote:

xjetflyer2001 wrote:

I'm not sure how long of flights you two are doing with the 787, but I fly to Asia a lot so 10-12 hours is the norm I am on that aircraft, I feel 10 times better arriving at my destination than I do when I'm on a 777 or 747, can't speak for the Airbus really except for the A340-600 as that is the only long haul I have done on the airbus, but that difference in cabin pressure makes a ton of difference on my body personally

I've done 7 hour flights on a 787 and I'm pleased to get off it. The ones I flown on are cramped and uncomfortable, especially when the passenger in front of me decides to recline his seat. Given the choice between 787 and A330 for comfort I'd choose the A330.

Normally yes. But Air Asia X will go 3-3-3 in A330 and if they did get A350 it’s 3-4-3. Both considerably worse than 9 abreast 787.

Fair point. In that case I'd pick the 787 too.

bigjku wrote:

abrelosojos wrote:

IndianicWorld wrote:

This is Air Asia X.. an airline that seems to change its strategy every few months.

The amount of times it has stated it will grow frequencies only to not long after instead cut them on its network is just too hard to follow.

Their fleet decision making process seems just as hard to read.

= Exactly right. It is Tony - a man with no moral compass who changes his mind via media everyday to maximize publicity. I am sure his vendors have already factored his mercurial nature in their calculation.

Saludos,
Alex

The situation with the A339neo os fundamentally different from what they probably signed up for. Depending on how you count things they are 30-50% of the order book. It’s the lower figure against firm orders and the higher if you back out the Iran Air order and the leases which if you are placing things with HiFly this early seem somewhat less desirebale slots than the lessors likely thought.

Regardless of what numbers you use that is a huge risk for Air Asia X.

With the A380 EK is around that 50% level. And we have seen the issues that has going both ways.

Same story with the 777x to this point with EK again way out front.

But further on you rarely if ever see concentrations like that.

Qatar has like 9% of A350. ANA has 6% of 787. Of the A333 Cathay 6%. China Eastern has 5% of A332. Delta had 7% of the 767. The 757 saw concentrations closer to 12% at Delta and American. The A340 was similar with Lufthansa. EK was around 14% of 77W orders.

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

Launch customers exchange the risk of being the ones supporting a program and/or delays for lower prices. Of course Air Asia could have waited two or three years more to find out wether the program gained more customers or not and then risk paying higher prices if they couldn't find early slots. All in all, it's a bit of a gamble for airlines.

Deeso wrote:

bigjku wrote:

abrelosojos wrote:

= Exactly right. It is Tony - a man with no moral compass who changes his mind via media everyday to maximize publicity. I am sure his vendors have already factored his mercurial nature in their calculation.

Saludos,
Alex

The situation with the A339neo os fundamentally different from what they probably signed up for. Depending on how you count things they are 30-50% of the order book. It’s the lower figure against firm orders and the higher if you back out the Iran Air order and the leases which if you are placing things with HiFly this early seem somewhat less desirebale slots than the lessors likely thought.

Regardless of what numbers you use that is a huge risk for Air Asia X.

With the A380 EK is around that 50% level. And we have seen the issues that has going both ways.

Same story with the 777x to this point with EK again way out front.

But further on you rarely if ever see concentrations like that.

Qatar has like 9% of A350. ANA has 6% of 787. Of the A333 Cathay 6%. China Eastern has 5% of A332. Delta had 7% of the 767. The 757 saw concentrations closer to 12% at Delta and American. The A340 was similar with Lufthansa. EK was around 14% of 77W orders.

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

Launch customers exchange the risk of being the ones supporting a program and/or delays for lower prices. Of course Air Asia could have waited two or three years more to find out wether the program gained more customers or not and then risk paying higher prices if they couldn't find early slots. All in all, it's a bit of a gamble for airlines.

Then again it’s unusual for more orders not to come in in the interim so I don’t think we can say they figured it would go like this. If the program was 100% on time and you have no economic way out so be it. It wasn’t and maybe they do have an out. It would be irresponsible not to look into it if you have a viable option to do so.

bigjku wrote:

Deeso wrote:

bigjku wrote:

The situation with the A339neo os fundamentally different from what they probably signed up for. Depending on how you count things they are 30-50% of the order book. It’s the lower figure against firm orders and the higher if you back out the Iran Air order and the leases which if you are placing things with HiFly this early seem somewhat less desirebale slots than the lessors likely thought.

Regardless of what numbers you use that is a huge risk for Air Asia X.

With the A380 EK is around that 50% level. And we have seen the issues that has going both ways.

Same story with the 777x to this point with EK again way out front.

But further on you rarely if ever see concentrations like that.

Qatar has like 9% of A350. ANA has 6% of 787. Of the A333 Cathay 6%. China Eastern has 5% of A332. Delta had 7% of the 767. The 757 saw concentrations closer to 12% at Delta and American. The A340 was similar with Lufthansa. EK was around 14% of 77W orders.

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

Launch customers exchange the risk of being the ones supporting a program and/or delays for lower prices. Of course Air Asia could have waited two or three years more to find out wether the program gained more customers or not and then risk paying higher prices if they couldn't find early slots. All in all, it's a bit of a gamble for airlines.

Then again it’s unusual for more orders not to come in in the interim so I don’t think we can say they figured it would go like this. If the program was 100% on time and you have no economic way out so be it. It wasn’t and maybe they do have an out. It would be irresponsible not to look into it if you have a viable option to do so.

Yes, the A330 neo isn't arriving on time and that's one of the risks that are accounted for on the discounts. On the other hand you have to convince me that this delay wasn't a relief for Toni Fernandes as any long haul LCC always faces grow problems. I've just haven't seen him complaining about the A330neo delays even a little.

In these days it's rare to find a program that's 100% on time and we don't see airliness jumping off the board every day unless they are having grow problems in which case they usually choose to defer deliveries.

I think we are too biased after the cases of Emirates, American Airlines and Hawaiian. Only the later being a sale truly 'stolen' (no derogatory intention , I think it was fair game) by Boeing.

LoganTheBogan wrote:

seahawk wrote:

Another huge win for the Dreamliner coming?

I kinda hope not. TBH I really get sick of the 787. Too many of them flying around and they're way too over hyped. I've been on them heaps of times and don't really notice a difference between them and other aircraft, or anything they've been advertising about them. I know they work well for airlines but I just like variation.

There's one big difference between the 787 and other airliners, it's the "innovative" big dimming windows, huge windows that pax have zero control over! A feature that equally upsets those who love to look out the window and nervous flyers who can still see even on the darkest setting, a friend of mine was enjoying a stunning view over the Himalayas when the crew decided it's time to sleep and dimmed all the windows in the middle of the day!

IslandRob wrote:

Peterwk146 wrote:

george77300 wrote:

Source:
@TonyFernandes (CEO Air Asia) has just confirmed the airline has no plans to buy the Airbus #A350 XWB — despite having 10 of them on (firm) order.

• AirAsiaX also has 66 #A330neo aircraft on firm order

• Final decision on AirAsiaX’s future fleet is expected later this year



So by the looks of it A350 cancelled. A330neo order in its totality not certain. Possible B787 as previously suggested but unlikely?

I'm sorry but what is the actual source for this statement? I've not seen it reported anywhere else.

There are several published reports, including: https://www.reuters.com/article/us-aira ... SKBN1HN102

-ir

Yes but in every article he has not said he won't buy the "too Expensive" Airbus A350. Thats a totally made up attention grabbing fake comment. Show a link with that written by him. The twitter account @TonyFernandes does not have that phrase anywhere I have seen on it. You and the new papers are doing Click bait.

rbavfan wrote:

IslandRob wrote:

Peterwk146 wrote:

I'm sorry but what is the actual source for this statement? I've not seen it reported anywhere else.

There are several published reports, including: https://www.reuters.com/article/us-aira ... SKBN1HN102

-ir

Yes but in every article he has not said he won't buy the "too Expensive" Airbus A350. Thats a totally made up attention grabbing fake comment. Show a link with that written by him. The twitter account @TonyFernandes does not have that phrase anywhere I have seen on it. You and the new papers are doing Click bait.

Reuters quotes Fernandes thusly: “The A350 is not an aircraft we will buy,” AirAsia X co-group CEO Tony Fernandes said in a Facebook Live chat from London. “Too expensive. Fares would go up.”

I say you're splitting hairs. -ir

PS For the record, I simply provided a link to the Reuters article at the request of another member. It's ridiculous to suggest that I'm "doing Click bait".

travelhound wrote:

If AirAsia can put nine across seating in an aircraft where every one else has eight across, an AirAsia 787 order could revolve around a paradigm shifting ten across seating configuration.

I am not too sure of many passengers who would be pleased with that.

Uh, Lion Air, Air Caraibes, Air Tansat, to name a few others at 9 across, who are part of the “every one else” brigade.

He says it at 3 mins 8 secs into the facebook live stream

https://m.facebook.com/story.php?story_ ... uk%2F&_rdr

These days an airline needs to price in the risk of engine problems, like what Rolls faces on the 787 with a 140 min ETOPS limit, as well as lots of downtime on the frames. All the easier for GE to sneak in the door.

bigjku wrote:

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

= Well, should they have not done all those analysis BEFORE placing an order? So much indecisiveness demonstrates a management that talks out of it's $$$, and perhaps not a real focus on actual quantitative analysis? After all, who does major fleet decisions on a whim ... and, they have been going back and forth on comments on 330 vs. 350 for years now ...

Saludos,
Alex

PixelPilot wrote:

Slug71 wrote:

A final decision is needed because last year Air Asia X was contemplating switching the entire NEO order to A350s. And it really doesn't make sense to operate 10 A350s alongside the large NEO order. This is likely just a bargaining ploy for better pricing from Airbus. I'll eat crow if I have to, but this is not going to Boeing. There would be huge penalties to pay.

Not necessarily considering RR issues.

That's an RR issue. Same issue as on the 787...

abrelosojos wrote:

bigjku wrote:

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

= Well, should they have not done all those analysis BEFORE placing an order? So much indecisiveness demonstrates a management that talks out of it's $$$, and perhaps not a real focus on actual quantitative analysis? After all, who does major fleet decisions on a whim ... and, they have been going back and forth on comments on 330 vs. 350 for years now ...

Saludos,
Alex

That seems silly to me. A reasonably supposition when they ordered the A330neo was that they would be one of many airlines to do so. Further ordering the A359 made sense before the MTOW increase on the A339neo. Now the decision is A339neo or 787. Seems rational to me.

bigjku wrote:

abrelosojos wrote:

bigjku wrote:

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

= Well, should they have not done all those analysis BEFORE placing an order? So much indecisiveness demonstrates a management that talks out of it's $$$, and perhaps not a real focus on actual quantitative analysis? After all, who does major fleet decisions on a whim ... and, they have been going back and forth on comments on 330 vs. 350 for years now ...

Saludos,
Alex

That seems silly to me. A reasonably supposition when they ordered the A330neo was that they would be one of many airlines to do so. Further ordering the A359 made sense before the MTOW increase on the A339neo. Now the decision is A339neo or 787. Seems rational to me.

Low A339 sales means worse leasing and financing terms. That would have been nice the contract.

RR engine issues would have probably delayed enough to open the contract.

GE is bidding agressive. I'm sure declining 777 volumes has motivated them.

This is a buyers auction. The only winner is AirAsiaX. Booth Boeing and Airbus must bid.

Lightsaber

bigjku wrote:

abrelosojos wrote:

bigjku wrote:

I don’t think this is a minor issue. Taking on a concentration like that works for EK at the very top end of the scale but it does have its own problems which have caused issues even for an airline of that size. If I ran Air Asia X I am of course asking for a better price but before I commit fully I want you to double the number of firm orders or close to it.

= Well, should they have not done all those analysis BEFORE placing an order? So much indecisiveness demonstrates a management that talks out of it's $$$, and perhaps not a real focus on actual quantitative analysis? After all, who does major fleet decisions on a whim ... and, they have been going back and forth on comments on 330 vs. 350 for years now ...

Saludos,
Alex

That seems silly to me. A reasonably supposition when they ordered the A330neo was that they would be one of many airlines to do so. Further ordering the A359 made sense before the MTOW increase on the A339neo. Now the decision is A339neo or 787. Seems rational to me.

Another alternative is cancel them without replacement order. Their current orderbook even after removing those A350s should already be sufficient to meet their short to mid term needs.
And I don't think they have really very long term plans... Last time I read news about them, if I recalled correctly, said they're not going to expand to Europe and the US in foreseeable future, before new aircraft come, but it wasn't like there are many years of time gap before they would start receiving 339...

lightsaber wrote:

That seems silly to me. A reasonably supposition when they ordered the A330neo was that they would be one of many airlines to do so. Further ordering the A359 made sense before the MTOW increase on the A339neo. Now the decision is A339neo or 787. Seems rational to me.

Low A339 sales means worse leasing and financing terms. That would have been nice the contract.

RR engine issues would have probably delayed enough to open the contract.

GE is bidding agressive. I'm sure declining 777 volumes has motivated them.

This is a buyers auction. The only winner is AirAsiaX. Booth Boeing and Airbus must bid.

Lightsaber[/quote]

= Sure. But, given AA's relationship and order book with Airbus, there would be enough contracting leeway to swing to an Airbus. I'd not be surprised if this is actually used by Tony to switch 359 to further 321's/321-LR's etc. Tony is a spin master -- just Google his views on flying to Europe or the U.S., and the position flip flops -- or, better still, speak to any airport that has had any dealings with AA.

Saludos,
Alex

Strato2 wrote:

What would the 787 offer that the A330neo would not? Nothing. Both would be configured at 9-abreast so there would be virtually no CASM advantage for the 787.

The 787 offers significantly better CASM at equal comfort levels. The 787 offers better comfort at equal CASM level.

The 9 abreast A330's run a decent 32" seat pitch. The 787-9 can easily run 30" seat pitch and have the same comfort levels thanks to its wider seats. That's quite a few extra seats while the 787-9 still burns less fuel.

I can definitely see AirAsia X in the future wanting to move away from the 9ab A330 and improve comfort slightly. Its currently using it to increase market share as they are in growth stage. A tight pitch 787 provides that slight upgrade.

RJMAZ wrote:

Strato2 wrote:

What would the 787 offer that the A330neo would not? Nothing. Both would be configured at 9-abreast so there would be virtually no CASM advantage for the 787.

The 787 offers significantly better CASM at equal comfort levels. The 787 offers better comfort at equal CASM level.

The 9 abreast A330's run a decent 32" seat pitch. The 787-9 can easily run 30" seat pitch and have the same comfort levels thanks to its wider seats. That's quite a few extra seats while the 787-9 still burns less fuel.

I can definitely see AirAsia X in the future wanting to move away from the 9ab A330 and improve comfort slightly. Its currently using it to increase market share as they are in growth stage. A tight pitch 787 provides that slight upgrade.

I don't think D7 really care that much about comfort.

I'd also debate whether 17in seats and 30in pitch are more comfortable than 16.5in seats with 32in pitch.

Flying-Tiger wrote:

Problem for Boeing: if they try to repeat the AA order again - underbidding Airbus again - you´ll immediately have a whole lot of current and like future 787 clients on your doorsteps threatening to pull a simiarl stunt. Either Boeing lowers their price, or they move to Airbus - it´s quite a hot fire Boeing is playing here, for neither Boeing´s nor Airbus´s margins good.

Exactly. I said this during the speculation of the HA 787 order. Boeing has sold 787-9s to Hawaiian at ultra thin margins and now is trying to do the same again to AirAsiaX. By doing this, Boeing has influenced the price expectations of every 787-9 customer. Those looking at purchasing additional frames will want the same thin margins. It's a race to the bottom!

This won't help to pay back deferred production costs.

Flying-Tiger wrote:

What this press release further confirms: contracts don´t appear to be worth the paper they are printed on anymore. Whilst I understand that renegotiating contracts is part of business, the current speed several market player try to switch plans is dangerous as it starts to deprieve the manufacturers from long-term planning perspective, which, in a capital goods market, is not good. It certainly raises the question if orders five plus years out from delivery can really be accounted solidly, or if auditors will need to apply a far softer valuation.

I also find this curious. There seems to be a lot of airlines issuing RFPs and getting OEMs to rebid on aircraft they still have on order.

zkojq wrote:

Flying-Tiger wrote:

Problem for Boeing: if they try to repeat the AA order again - underbidding Airbus again - you´ll immediately have a whole lot of current and like future 787 clients on your doorsteps threatening to pull a simiarl stunt. Either Boeing lowers their price, or they move to Airbus - it´s quite a hot fire Boeing is playing here, for neither Boeing´s nor Airbus´s margins good.

Exactly. I said this during the speculation of the HA 787 order. Boeing has sold 787-9s to Hawaiian at ultra thin margins and now is trying to do the same again to AirAsiaX. By doing this, Boeing has influenced the price expectations of every 787-9 customer. Those looking at purchasing additional frames will want the same thin margins. It's a race to the bottom!

This won't help to pay back deferred production costs.

Flying-Tiger wrote:

What this press release further confirms: contracts don´t appear to be worth the paper they are printed on anymore. Whilst I understand that renegotiating contracts is part of business, the current speed several market player try to switch plans is dangerous as it starts to deprieve the manufacturers from long-term planning perspective, which, in a capital goods market, is not good. It certainly raises the question if orders five plus years out from delivery can really be accounted solidly, or if auditors will need to apply a far softer valuation.

I also find this curious. There seems to be a lot of airlines issuing RFPs and getting OEMs to rebid on aircraft they still have on order.

If aircraft are too late as per the contract and miss performance? Of course an airline can cancel. They are being smart and rebidding before canceling.

The A330NEO was sold as low risk and with earlier delivery slots than the 787. I'm sure many vendor contact clauses were violated.

It is not good to miss promise. Contracts must be maintained by both parties. Generally when penalties start to exceed some value, either party may exit the contract.

You are aware there is no way the A330NEO will meet EIS ETOPS requirements?

We are also in an era where aircraft are oversold where a 20% cancelation rate is expected.

There is also no way A339 financing requirements are being met. Leasing companies are avoiding widebodies due to more rapid loss of asset value. Combine that with poor outlook for A330NEO resale, as is true of all poor selling aircraft. Look at the 717, WN had to subsidize DL's leases!

Thus I have trouble imagining how AirAsiaX wouldn't be able to renegotiate their contract or cancel it.

Some contracts are more understandable (US purchase A350, MD-11 missing promise, TWA's 717 contract, HA and the A358, err... A338).

Every time economy of scale doubles, costs drop 10% to 13%. The A339NEO has not achieved target economy of scale. No one expected Boeing to do as well as they have on later 787 costs and production rates.

Lightsaber