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PW100
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Re: A380 was success for Airbus, says new CEO

Wed May 29, 2019 9:10 pm

9Patch wrote:
PW100 wrote:
Based on a 250 frame RLI, most of that would have been repaid by now . . .

Doubtful.
What are you basing this on?
Show us the numbers.


If you are so desparate for numbers, why don't you start at the initial claim . . . ?


Delta777Jet wrote:
If it was such a success how about Airbus pays back the credits they took which now the tax payers have to pay !
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grbauc
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Re: A380 was success for Airbus, says new CEO

Wed May 29, 2019 9:43 pm

DrPaul wrote:
acjbbj wrote:
The A380 is the biggest and worst failure in all of commercial aviation.


I readily admit that the A380 hasn't sold anything as much as Airbus had envisaged, but does the 235 sold so far with another 50 or so ordered merit such a damning description? There have been in my lifetime several airliner models that have not done that well, such as the Lockheed Starliner (55 manufactured), the Boeing Stratocruiser (56), the Vickers VC-10 (54), the Vickers Vanguard (44), and the Convair CV-990 (37), not to mention the one and only Bristol Brabazon. Even when taking into consideration the much larger number of air passengers today compared to when these planes were introduced, one may fairly say that the sales performance of the Whale is a big disappointment but hardly 'the biggest and worst failure in all of commercial aviation'.



All the cases you site are in the earlya nd developing era...... In the modern day with the large amount of money put down to build it.(A380) I don't agree with the poster but I can see how one will build such a case could be built.

I love the A380 has a fan and a passenger I really really want it to say around a long long time. F/J seats have become affordable. It's a big let down for sure though.

In today's world everybody wants there team to be the biggest and baddest and there is not much appreciably commemoration for the other side. Silly
 
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enzo011
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Re: A380 was success for Airbus, says new CEO

Wed May 29, 2019 9:51 pm

VV wrote:
If the target was, "Let's make a program that will have some commercial and technical failures such that we get better next time" then it is a success.

I do not think it was the target and thus it is a failure in general terms.


Nuance. No company goes out to make mistakes, it is how you react to those mistakes. This is the point being made but people are taking his statement and putting their spin on it. Now granted as fanboys it is fun, but we should be past that by now on this thread. As an example, would you consider the Dunkirk evacuation a success or failure? Some would say that because they had to withdraw from Europe and was retreating and losing the battle it is a failure. But that evacuation helped them keep a lot of their forces they would use for future battles that helped win the war. If you are of the opinion that the A380 was a total failure then you should have the same opinion about the successful evacuation of all those thousands of troops, a big fat failure.


par13del wrote:
If that were the case why would Airbus say that they think they do not need to repay RLI since the program is now cancelled?
Something is not adding up....


Depends on the agreement, right? If they are supposed to pay back money on a program on deliveries only then I fail to see how you can pay money if there is no deliveries to be made. At the same time if you invested on the A320 and is still receiving RLI long after the initial investment has been paid I don't see why people on here are so hung up about it. Especially if you aren't a tax payers in that country and even if you are your country has still probably received back way more than the investments on the other programs if the A380 does have unpaid investments. That is the risk of those type of loans.


bikerthai wrote:
Then it leads to suggest that the same people would not consider the MAX issue is a good thing for Boeing as it refocuses them on safety. I would call those folks pragmatists. Boeing could have learn the same lessons with a lot fewer deaths. Airbus could have learned the same lessons without losing do much capital. Imagine how much improvement to the A320 or A330 line with that much money. And they would probably have learned the same lessons.



Yes, you could say that the MAX issues are a great opportunity to learn from for Boeing to become a better company. But we are not sure how much that will cost Boeing in the long run through lost orders and compensation and I am also not going to try and put a value on the lives lost. But I doubt you would have found any Airbus fan crowing about how the A380 is a success while the wiring problems were being discovered and the delays were happening. It took them years to learn from the mistakes and it will only be way into the future whether we can make that same determination on the MAX.
 
9Patch
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Re: A380 was success for Airbus, says new CEO

Wed May 29, 2019 10:43 pm

PW100 wrote:
9Patch wrote:
PW100 wrote:
Based on a 250 frame RLI, most of that would have been repaid by now . . .

Doubtful.
What are you basing this on?
Show us the numbers.


If you are so desparate for numbers, why don't you start at the initial claim . . . ?


What initial claim?
 
Waterbomber2
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Re: A380 was success for Airbus, says new CEO

Wed May 29, 2019 11:30 pm

9Patch wrote:
PW100 wrote:
9Patch wrote:
Doubtful.
What are you basing this on?
Show us the numbers.


If you are so desparate for numbers, why don't you start at the initial claim . . . ?


What initial claim?


I'll help you out on this one PW100.
250 units x 250 million USD = 62.5 billion USD

The development cost was probably no where near the claimed 25 billion USD.
Airbus and supply chain staff are costing 30 USD per hour at best. 25 billion USD buys you 750 million man hours worth of resources. That's the equivalent of a team of 5000 people working full-time for 100 years on nothing else... or 50.000 people for 10 years.

That is whale fiction.
 
ewt340
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Re: A380 was success for Airbus, says new CEO

Wed May 29, 2019 11:51 pm

kitplane01 wrote:
ewt340 wrote:
kitplane01 wrote:

It we compare to Apollo 13, the Challenger explosion, and other rockets that exploded it was a success????
It's a worse failure than any of the programs you cited because it lost $25 billion and those didn't.

And they only escaped unscathed if you think (1) They don't mind losing $25B and (2) They had nothing better they could have done with $25B except lose it.


Are you sure they lost all $25 billion of those money or couple billions they couldn't recoup from the development program? Cause losing $25 billions and losing couple billions are 2 different thing there buddy.

Also, compared to C-series which ended up in Airbus hand for free. or SS100, MC-21 and ARJ21. Compared to those program, A380 is a damn success I said.


Airbus won’t give an exact figure. Airbus says they spent $25 billion on development lost money on early production years, made a little bit in middle production years, and lost money on later production years. Pretty much the whole business press takes a guess that they lost about $25 billion. I’ve already provided citations. If you don’t believe that, let’s stop talking.


That's not true according to the article you gave us. Analyst said they spent around $25-$26 billions for the first 15 years.
That's not the number Airbus gave, which stands at $16 billions.

You are lying about unproven analysis that contradict the data from the company itself.

Now you could try to justified your $25 billions number but you need to provide better proofs than that.
 
9Patch
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 12:23 am

ewt340 wrote:
That's not the number Airbus gave, which stands at $16 billions.

When/where did Airbus give this number?
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 8:08 am

9Patch wrote:
ewt340 wrote:
That's not the number Airbus gave, which stands at $16 billions.

When/where did Airbus give this number?


On the article provided by previous commenters. It states that Airbus provide the $16 billions price tag while Analyst estimated the cost to be around $25-$26 billions but with no actual data, it's just a prediction.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 9:09 am

Waterbomber2 wrote:
9Patch wrote:
PW100 wrote:

If you are so desparate for numbers, why don't you start at the initial claim . . . ?


What initial claim?


I'll help you out on this one PW100.
250 units x 250 million USD = 62.5 billion USD

The development cost was probably no where near the claimed 25 billion USD.
Airbus and supply chain staff are costing 30 USD per hour at best. 25 billion USD buys you 750 million man hours worth of resources. That's the equivalent of a team of 5000 people working full-time for 100 years on nothing else... or 50.000 people for 10 years.

That is whale fiction.


You mut be be a Boeing accountant with such creative numbers :)
 
litzj
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 9:58 am

Although I am a Fan of Airbus, I am hard to tell A380 had commercial success......

Probably, experience from A380 design, development, manufacturing is important for Airbus, however, A380 came out at wrong-age.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 11:57 am

The market is not there
 
Vladex
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 12:40 pm

litzj wrote:
Although I am a Fan of Airbus, I am hard to tell A380 had commercial success......

Probably, experience from A380 design, development, manufacturing is important for Airbus, however, A380 came out at wrong-age.


Passenger growth is there and there is a demand for something good and there is nothing like A380 out there. It was the wrong airlines that got it and most established airlines didn't because of the short term financial ideology.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 1:48 pm

PW100 wrote:
bikerthai wrote:yabeweb wrote:Exactly, but for some poeple it is hard to swallow that even a failure (as in sales)can means something good for the company, go figure....Then it leads to suggest that the same people would not consider the MAX issue is a good thing for Boeing as it refocuses them on safety. I would call those folks pragmatists. Boeing could have learn the same lessons with a lot fewer deaths. Airbus could have learned the same lessons without losing do much capital. Imagine how much improvement to the A320 or A330 line with that much money. And they would probably have learned the same lessons.btCould they (bolded quote)?


Well, if you flip it around and see how Boeing messed up with the 787. One could say Boeing's lessons learned with the 787 would cost almost as much if not more than the A380 from a pure dollar standpoint. However, in the long run because they guessed right, the impact is not as glaring.

bt
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DALMD80
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 1:56 pm

If it was a success, then why was it terminated?
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ScottB
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 1:57 pm

enzo011 wrote:
As an example, would you consider the Dunkirk evacuation a success or failure? Some would say that because they had to withdraw from Europe and was retreating and losing the battle it is a failure. But that evacuation helped them keep a lot of their forces they would use for future battles that helped win the war. If you are of the opinion that the A380 was a total failure then you should have the same opinion about the successful evacuation of all those thousands of troops, a big fat failure.


Well, no, one does not call a retreat a failure simply because it's a retreat. One must evaluate the tactical situation and make decisions based on the scenario one faces. The Dunkirk evacuation was probably the best possible decision given the facts on the ground at the time.

Contrast that with the A380 program: it was based on a delusional market forecast -- total available market of ~2000 frames over 20 years. The market forecast was largely engineered to justify launching the program which in some part existed to stroke European egos -- ours is bigger than yours. Airbus did a poor job of evaluating the tactical situation and blew billions of euros on a product with a wildly overestimated market. Worse yet, the CATIA screw-up cost them billions more. Launching A380 was not a good decision given the realities of the market at the time and the actual direction the market was heading.

Really, the only Dunkirk-like decision with respect to the A380 which one might call a success was the decision to end the program -- because it finally was a rational response to the utter lack of demand for A380 outside of one difficult customer.

tropical wrote:
I wonder if other equally questionable statements made by A or B bosses over the years had/ would have resulted in as popular a thread as this one (or even merited a thread being created in the first place)


Sure! I can remember a notorious occasion where Noel Forgeard called the 787 a "cheap Chinese copy" of the A330.

PW100 wrote:
Imagine in what hole Airbus would have found themselves if the CATIA FUBAR would have hit the A350 and/or A320neo program(s)


Believe it or not, I think the CATIA screw-up would have had less or equal impact on A350 or A320neo simply because those aircraft are smaller and less complex. The size and customization of each A380 made the rewiring process that much more involved for each of the affected aircraft.

deltadc9 wrote:
I have always wondered, if Boeing had not done the 748, would all or most of the 47 748 passenger orders gone to the 380? If so would that have been enough to gain some momentum for the program and prevent some or most of the 380 cancellations? Or at least made it possible for Airbus not lose so much money? Was this part of Boeings motivation for the 748?


I think the 748 was largely driven by Boeing's evaluation of the cargo business and discussions with customers in that space. The 748i wasn't a huge effort if they were going to be developing the freighter and there were some customers who had expressed interest. IMO the 747-8 program would be viewed overall as a modestly successful derivative if Boeing hadn't screwed up the development program but they did so instead it lost the company money.

Waterbomber2 wrote:
Let's imagine for a minute that a 2030 A380neo would have a 50% fuel burn advantage, burning about the same as an A359 today, ie 6 tons per hour.
A fare that used to be 500$ becomes 350$, the market expands because more people can afford to fly.


I'm not sure why you think those same advantages in fuel efficiency wouldn't extend to every single type on the market. In fact, it's far more likely that new, highly-efficient propulsion systems would first be used on narrowbodies or smaller widebodies simply because those markets are far, far larger. RR/PW/GE/CFM would be far more interested in market segments with potential sales of 3000 engines annually versus 200.

Stickpusher wrote:
What's certain is that the upward arc of numbers travelling was severely hit closely after the A380 program launch, and also closely after EIS. Airbus would have had a hard time predicting 9/11 and the subsequent slowdown that killed carriers (and also killed the return of Concorde after a year or two). The A380 launched at the end of 2000 IIRC. EIS with Singapore was in 2007, and a year later along came the GFC. A lot of the growth momentum in travel was lost, the upward arc Airbus predicted in the 90s flattened out somewhat - generally upward but with all the predictions now well out of whack. While we can only guess at how much was actually lost, any increase at all would bring it closer to their predictions. Historical events dealt the entire aviation market a bad hand in the noughties, all programs suffered and niche ones fared the worst.


What's absolutely certain is that the airline industry is hit with periodic shocks, and those shocks were no less common before 2000 than after. Before 2000 we had oil price shocks in the late 1970s, a deep recession in the early 1980s, the Lockerbie bombing, the Gulf War in 1990-1991, and the late 1990s Asian economic flu. One could even argue that the bust of the early aughts should have been a mild boost to the A380s prospects in that smaller independent competitors like SR, SN, TW, etc. were knocked out of the market or forced to consolidate with larger groups of carriers.

airbazar wrote:
I think Airbus overestimated demand from Asia and underestimated the ability of Asian countries to build infrastructure.
The "line" at the time was that demand for air travel in Asia was about to explode (which it did), but unlike in Europe and the U.S. airport construction kept pace with the growth. As a result those markets which Airbus envisioned needing the A380 were being served by smaller aircraft and mainly by LCC's.
The LCC revolution more than anything killed the A380, IMO. At the time (pre-2000), airlines like Singapore Airlines and others were operating 400+ seat 744's on short 1-2-hour hops. If you visited Narita or Kai Tak in those days, most gates were occupied with 747's. That was the the world we lived in, pre 2000.


But by 2000 it was also obvious that Asian nations were indeed moving forward with improvements to their infrastructure. Hong Kong opened Chek Lap Kok before the 1999 handover to the Chinese, ICN was nearly done by 2000 (it opened in 2001), and it was abundantly obvious that the Japanese government was willing to play the long game with respect to expansion at Narita. Construction of Pudong started in 1997 in response to congestion at Hongqiao and it was plain from the start that the new airport was planned with plenty of expansion in mind. KLIA opened in the late 1990s and planning for the new BKK (to replace DMK) was well underway by 2000; the project was delayed by the aforementioned Asian economic flu. And in China specifically, it has long been clear that the government is willing to move forward with large infrastructure projects regardless of the number of citizens who might live in the way -- the Three Gorges Dam should be one of the easiest examples to cite.

So... they didn't pay attention to the fact that Asian airport infrastructure was being upgraded more effectively than in larger, more mature markets.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 2:49 pm

enzo011 wrote:
VV wrote:
If the target was, "Let's make a program that will have some commercial and technical failures such that we get better next time" then it is a success.

I do not think it was the target and thus it is a failure in general terms.

Nuance. No company goes out to make mistakes, it is how you react to those mistakes. This is the point being made but people are taking his statement and putting their spin on it. Now granted as fanboys it is fun, but we should be past that by now on this thread. As an example, would you consider the Dunkirk evacuation a success or failure? Some would say that because they had to withdraw from Europe and was retreating and losing the battle it is a failure. But that evacuation helped them keep a lot of their forces they would use for future battles that helped win the war. If you are of the opinion that the A380 was a total failure then you should have the same opinion about the successful evacuation of all those thousands of troops, a big fat failure.

I think our last exchange was valuable but I have to say I'm surprised to see another example of exaggeration, especially right after you emphasized the concept of nuance.

I think Dunkirk and even MAX are poor comparisons because we're talking about weighing cost versus benefit and once you add human lives to the equation it becomes emotional. In the case of Dunkirk you are also talking about a political struggle (fascism vs democracy), and throw in nationalism (survival of Britain as a nation) to boot so the scale is too big and too emotional. I would say the Titanic is a better (yet still flawed due to the loss of human life) comparison than Dunkirk because it involves commercial rather than political motivations along with engineering hubris ("unsinkable ship") yet in the end some improvements (better regulations on lifeboats and radio communication) resulted. We have yet to know what we will or won't learn from MAX.

On balance, an objective person has to say A380 was not a success because it did not meet its goals, not by a long shot.

We keep talking about breaking even as a measure of success, but that is a classic case of moving the goal posts.

For its business case, Airbus assumed it would be shipping 750+ frames by 2021 with a internal rate of return of 20%.

Don't believe me? Well, here's a slide from Airbus:

Image

I think if you told the person who made that slide that in reality they'd build 251 frames, be shuttering the line in 2021, key customers like LH and AF would cancel orders, and frames would be scrapped after 12 years of service they'd agree it was not a success.

I think we could say that if A380 produced 20% return on the huge amount of business 750 frames represents Airbus could be in a very much improved position in the market.

Yet after two decades of trying Airbus found it could not even sell enough to break even on production for more than one or two years.
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 3:23 pm

bikerthai wrote:
PW100 wrote:
bikerthai wrote:yabeweb wrote:Exactly, but for some poeple it is hard to swallow that even a failure (as in sales)can means something good for the company, go figure....Then it leads to suggest that the same people would not consider the MAX issue is a good thing for Boeing as it refocuses them on safety. I would call those folks pragmatists. Boeing could have learn the same lessons with a lot fewer deaths. Airbus could have learned the same lessons without losing do much capital. Imagine how much improvement to the A320 or A330 line with that much money. And they would probably have learned the same lessons.btCould they (bolded quote)?


Well, if you flip it around and see how Boeing messed up with the 787. One could say Boeing's lessons learned with the 787 would cost almost as much if not more than the A380 from a pure dollar standpoint. However, in the long run because they guessed right, the impact is not as glaring.

bt

Apart from the messed up quote (not my text), I'd agree with your message. The misfortune on the 787 will have done an awful lot of good to Boeing in terms of lessons learned. Which they will no doubt have, and continue benefit from on later programs.
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 3:24 pm

DALMD80 wrote:
If it was a success, then why was it terminated?

Perhaps because they finished reaping the benefits.
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DALMD80
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 3:29 pm

I guess.
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PW100
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 3:29 pm

ScottB wrote:
PW100 wrote:
Imagine in what hole Airbus would have found themselves if the CATIA FUBAR would have hit the A350 and/or A320neo program(s)


Believe it or not, I think the CATIA screw-up would have had less or equal impact on A350 or A320neo simply because those aircraft are smaller and less complex. The size and customization of each A380 made the rewiring process that much more involved for each of the affected aircraft.


I considered that as well, but what made me state that was, it is one thing to mismanage and rebuild two or three frames (albeit large ones) per month for a two year delay, vs 40+ frames per month for two years runnning.
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VV
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 3:47 pm

DALMD80 wrote:
If it was a success, then why was it terminated?


Because they have successfully learned from the mistakes done during the program and now they are doing better.

It was an expensive way to learn.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 3:58 pm

PW100 wrote:
I considered that as well, but what made me state that was, it is one thing to mismanage and rebuild two or three frames (albeit large ones) per month for a two year delay, vs 40+ frames per month for two years runnning.


Yeah, but in the case of the A320neo, there was a gradual changeover from oeo to neo, and the initial examples (mostly for testing) would have been produced at a very low rate. It's exceedingly unlikely that they would have been producing dozens of frames per month with CATIA-version-related design issues. In the case of the A350, the production rate of the initial frames was likely similar to A380's; it's unlikely they'd want to have several dozen aircraft parked while waiting to complete flight testing.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 5:09 pm

acinvestigator wrote:
What was this CEO under the influence of to make such a laughable comment?


In a related story, White Star Line CEO calls maiden voyage of Titanic a 'success', noting, "We got the passengers most of the way to New York." -ir
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 6:47 pm

IslandRob wrote:
acinvestigator wrote:
What was this CEO under the influence of to make such a laughable comment?

In a related story, White Star Line CEO calls maiden voyage of Titanic a 'success', noting, "We got the passengers most of the way to New York." -ir

And, "It improved our understanding of navigation, communication and metallurgy...".
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 6:54 pm

Revelation wrote:
IslandRob wrote:
acinvestigator wrote:
What was this CEO under the influence of to make such a laughable comment?

In a related story, White Star Line CEO calls maiden voyage of Titanic a 'success', noting, "We got the passengers most of the way to New York." -ir

And, "It improved our understanding of navigation, communication and metallurgy...".


"... and, of course, icebergs."

-ir
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Waterbomber2
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 8:03 pm

Right now, I'm seated at a fast food joint at a random airport in Germany and the guy sitting at the table next to me is flipping through pages of magazine articles about the A380 titled "the queen of the skies." Probably an enthusiast or a spotter.
The point is he's not reading through pages about the B777-300ER.

I think that the A380 will come back from this situation and quite soon. What Airbus lacks currently is an engineering vision for this aircraft.
The A380 can be made more efficient, a lot more efficient.
What they presented with the A380 Plus is laughable and an insult to those who designed and built this marvelous machine.

What I really wonder is why China has been so passive in its long haul aviation growth strategy.
Ok, they have a pretty sizeable fleet but nothing to mirror their strategy in many other sectors or anything that could meet the underlying demand.
Demand for leisure long haul travel is there but it's not fully fulfilled. Perhaps they don't want their people spending money abroad?
Even in terms of smaller widebodies, I would expect China to have hundreds on order, but that is not the case.
This is very intriguing.
 
Lukas757
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 8:25 pm

Waterbomber2 wrote:
Right now, I'm seated at a fast food joint at a random airport in Germany and the guy sitting at the table next to me is flipping through pages of magazine articles about the A380 titled "the queen of the skies." Probably an enthusiast or a spotter.
The point is he's not reading through pages about the B777-300ER.


Well, you more likely find an article about the Apollo–Programme than a random Television–Satellite, but still it’s the second which provides us with useful information every day. That’s just not the way economics work, I’m actually impressed in how long you fight to put the A380 in a light it just isn’t.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 8:29 pm

A success wouldn’t become obsolete within 11 years.
 
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Re: A380 was success for Airbus, says new CEO

Thu May 30, 2019 11:01 pm

ScottB wrote:
Well, no, one does not call a retreat a failure simply because it's a retreat. One must evaluate the tactical situation and make decisions based on the scenario one faces. The Dunkirk evacuation was probably the best possible decision given the facts on the ground at the time.

Contrast that with the A380 program: it was based on a delusional market forecast -- total available market of ~2000 frames over 20 years. The market forecast was largely engineered to justify launching the program which in some part existed to stroke European egos -- ours is bigger than yours. Airbus did a poor job of evaluating the tactical situation and blew billions of euros on a product with a wildly overestimated market. Worse yet, the CATIA screw-up cost them billions more. Launching A380 was not a good decision given the realities of the market at the time and the actual direction the market was heading.

Really, the only Dunkirk-like decision with respect to the A380 which one might call a success was the decision to end the program -- because it finally was a rational response to the utter lack of demand for A380 outside of one difficult customer.


You are right. Airbus totally misjudged the market and spent billions on the A380 that they should have spent on other programs. So why did Boeing decide to launch the 748 if the decisions were so obvious for us armchair CEO's? Boeing had the right forecasts, they knew Airbus overestimated the market and they had the ideal replacement for the 747 in production with the 77W, and yet they decided to spaff a few billion on a program they knew had a limited market and where the competition were struggling to compete.

But then you also don't really engage with what the CEO has said, due to the lessons learned from the A380 they have become a better company as a result and for those valuable lessons the program for Airbus is a success.

Revelation wrote:
I think if you told the person who made that slide that in reality they'd build 251 frames, be shuttering the line in 2021, key customers like LH and AF would cancel orders, and frames would be scrapped after 12 years of service they'd agree it was not a success.


I am yet to see anybody say that the A380 was a financial and sales success. I am also not going to pretend that I know more about the company and how it is doing than the current CEO, so if he comes out with a statement about how the company has learned from their lessons and that has been a silver lining to the A380 program I will not just dismiss what he is saying. I know the sales and marketing managers from Airbus have been vocal and talking shite that we laugh at, but I cannot remember the CEO's going down the same route that often. Do we have previous evidence of Faury making outlandish statements before?

As for making ridiculous statements from CEO's, the really funny thing is this statement isn't even the most outlandish or misguided this year.

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Re: A380 was success for Airbus, says new CEO

Fri May 31, 2019 2:19 am

enzo011 wrote:
So why did Boeing decide to launch the 748 if the decisions were so obvious for us armchair CEO's? Boeing had the right forecasts, they knew Airbus overestimated the market and they had the ideal replacement for the 747 in production with the 77W, and yet they decided to spaff a few billion on a program they knew had a limited market and where the competition were struggling to compete.


Did you even read the rest of what I wrote before you went with this kneejerk response? If not, I'll provide it again:

ScottB wrote:
I think the 748 was largely driven by Boeing's evaluation of the cargo business and discussions with customers in that space. The 748i wasn't a huge effort if they were going to be developing the freighter and there were some customers who had expressed interest. IMO the 747-8 program would be viewed overall as a modestly successful derivative if Boeing hadn't screwed up the development program but they did so instead it lost the company money.


The A380F was dead and in any event wouldn't be suitable as much more than a parcel hauler thanks to the upper deck floor being required for structural reasons. Given the number of 748F orders, I think the 748 would have been an OK program if they hadn't botched the development. But they did and it cost them a few billion. Once you're committed to building the freighter, the passenger version isn't that costly to develop, although Boeing obviously hoped to sell more.
 
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Re: A380 was success for Airbus, says new CEO

Fri May 31, 2019 7:55 am

ScottB wrote:
enzo011 wrote:
So why did Boeing decide to launch the 748 if the decisions were so obvious for us armchair CEO's? Boeing had the right forecasts, they knew Airbus overestimated the market and they had the ideal replacement for the 747 in production with the 77W, and yet they decided to spaff a few billion on a program they knew had a limited market and where the competition were struggling to compete.


Did you even read the rest of what I wrote before you went with this kneejerk response? If not, I'll provide it again:

ScottB wrote:
I think the 748 was largely driven by Boeing's evaluation of the cargo business and discussions with customers in that space. The 748i wasn't a huge effort if they were going to be developing the freighter and there were some customers who had expressed interest. IMO the 747-8 program would be viewed overall as a modestly successful derivative if Boeing hadn't screwed up the development program but they did so instead it lost the company money.


The A380F was dead and in any event wouldn't be suitable as much more than a parcel hauler thanks to the upper deck floor being required for structural reasons. Given the number of 748F orders, I think the 748 would have been an OK program if they hadn't botched the development. But they did and it cost them a few billion. Once you're committed to building the freighter, the passenger version isn't that costly to develop, although Boeing obviously hoped to sell more.



You will need to provide links where Boeing launched the 748 as a freighter with the passenger version as only an added version. At best I find references that Boeing thought it would be 50/50 (which as shown below doesn't seem viable and some rewriting of history as I cannot find quotes to confirm this) but the opinion on here, AFAIR, was that Boeing thought the passenger version would consist 2/3 of production and the cargo version would be 1/3.

I will point to the following quotes from the release from Boeing when they launched the new aircraft.

The 747-8 Intercontinental passenger airplane will be stretched 3.6 m (11.7 ft) compared to the 747-400 to accommodate 34 additional seats in a typical three-class configuration. The only jetliner in the 400- to 500-seat category, it will have a range of 14,815 km (8,000 nmi) and will feature the new Boeing Signature Interior.


Boeing forecasts the need for about 900 airplanes -- passengers and freighters -- in the 400-plus-seat segment over the next 20 years. Boeing also forecasts that large widebody freighters (65 metric tons and above in capacity) will comprise 34 percent of the freighter market by 2024.


Boeing Launches New 747-8 Family

So Boeing thought the market was 600 aircraft for the 400 plus passenger aircraft of which there was only 2. The 748, as the first quote states, and the A380, more than 500 seats.
 
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Re: A380 was success for Airbus, says new CEO

Fri May 31, 2019 1:08 pm

ScottB wrote:
Given the number of 748F orders, I think the 748 would have been an OK program if they hadn't botched the development.


As I recall there were not many issues that came up with the 747-8 development. They had a delay because during the 787 crisis, they pulled personnel from that program to help out the 787. This action shows that Boeing was not whole heartedly committed to the 747 program other than a foil to the A380. We all believe that the A380 is better than the 747, but updating the 747 was just Boeing hedging their bet, and nothing more. And yes, the freighter was a side benefit. The nose door makes it unique and once that line is closed . . .

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Re: A380 was success for Airbus, says new CEO

Fri May 31, 2019 1:25 pm

enzo011 wrote:
Depends on the agreement, right? If they are supposed to pay back money on a program on deliveries only then I fail to see how you can pay money if there is no deliveries to be made. At the same time if you invested on the A320 and is still receiving RLI long after the initial investment has been paid I don't see why people on here are so hung up about it. Especially if you aren't a tax payers in that country and even if you are your country has still probably received back way more than the investments on the other programs if the A380 does have unpaid investments. That is the risk of those type of loans.

Unfortunately, the RLI experts are not present, but in previous threads they have made known that RLI is per project (a/c) versus the company as a whole, so the continued payments on the A320 program is not relevant. If the A340 is lumped in with the A330 then that is fine, but if that was also individual, it may not have repaid its RLI so that would be another drag on Airbus finances, let's not add the A400.

In any event, not sure we will ever get the full accounting, but will just have to do A.Net analysis on the commentary.
 
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Re: A380 was success for Airbus, says new CEO

Tue Jun 04, 2019 3:13 pm

enzo011 wrote:
ScottB wrote:
enzo011 wrote:
So why did Boeing decide to launch the 748 if the decisions were so obvious for us armchair CEO's? Boeing had the right forecasts, they knew Airbus overestimated the market and they had the ideal replacement for the 747 in production with the 77W, and yet they decided to spaff a few billion on a program they knew had a limited market and where the competition were struggling to compete.


Did you even read the rest of what I wrote before you went with this kneejerk response? If not, I'll provide it again:

ScottB wrote:
I think the 748 was largely driven by Boeing's evaluation of the cargo business and discussions with customers in that space. The 748i wasn't a huge effort if they were going to be developing the freighter and there were some customers who had expressed interest. IMO the 747-8 program would be viewed overall as a modestly successful derivative if Boeing hadn't screwed up the development program but they did so instead it lost the company money.


The A380F was dead and in any event wouldn't be suitable as much more than a parcel hauler thanks to the upper deck floor being required for structural reasons. Given the number of 748F orders, I think the 748 would have been an OK program if they hadn't botched the development. But they did and it cost them a few billion. Once you're committed to building the freighter, the passenger version isn't that costly to develop, although Boeing obviously hoped to sell more.





You will need to provide links where Boeing launched the 748 as a freighter with the passenger version as only an added version. At best I find references that Boeing thought it would be 50/50 (which as shown below doesn't seem viable and some rewriting of history as I cannot find quotes to confirm this) but the opinion on here, AFAIR, was that Boeing thought the passenger version would consist 2/3 of production and the cargo version would be 1/3.

I will point to the following quotes from the release from Boeing when they launched the new aircraft.

The 747-8 Intercontinental passenger airplane will be stretched 3.6 m (11.7 ft) compared to the 747-400 to accommodate 34 additional seats in a typical three-class configuration. The only jetliner in the 400- to 500-seat category, it will have a range of 14,815 km (8,000 nmi) and will feature the new Boeing Signature Interior.


Boeing forecasts the need for about 900 airplanes -- passengers and freighters -- in the 400-plus-seat segment over the next 20 years. Boeing also forecasts that large widebody freighters (65 metric tons and above in capacity) will comprise 34 percent of the freighter market by 2024.


Boeing Launches New 747-8 Family

So Boeing thought the market was 600 aircraft for the 400 plus passenger aircraft of which there was only 2. The 748, as the first quote states, and the A380, more than 500 seats.


Boeing originally launched the 747 as a freighter first priority, passenger second priority design. The first passenger versions had the hardware already installed for freighter conversion.

This is because Boeing did not see a future for it as a passenger plane as they were betting on the SST (2707) to be the future. The passenger version of the 747 was considered a stop gap until the 2707 was ready for service. After that the passenger 747 was still to be offered, but only to a small market that didn't want the SST or had special needs for it. The 2707 didn't happen, and the 747 continued as the flagship in its absence. Boeing originally saw few passenger version sales after 1980 with the SST as their flagship.

Ironically the 748 had a similar outcome, but it was planned this time. It is common knowledge that Boeing did not have faith in the hub and spoke model required for VLA service, and the point to point 787 was their baby, and the 748 was just milking the cash cow, and quite possibly a middle finger to the 380.
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 12:59 am

deltadc9 wrote:
Boeing originally launched the 747 as a freighter first priority, passenger second priority design. The first passenger versions had the hardware already installed for freighter conversion.

This is because Boeing did not see a future for it as a passenger plane as they were betting on the SST (2707) to be the future. The passenger version of the 747 was considered a stop gap until the 2707 was ready for service. After that the passenger 747 was still to be offered, but only to a small market that didn't want the SST or had special needs for it. The 2707 didn't happen, and the 747 continued as the flagship in its absence. Boeing originally saw few passenger version sales after 1980 with the SST as their flagship.

Ironically the 748 had a similar outcome, but it was planned this time. It is common knowledge that Boeing did not have faith in the hub and spoke model required for VLA service, and the point to point 787 was their baby, and the 748 was just milking the cash cow, and quite possibly a middle finger to the 380.

Pure revisionism. PanAm bought it first and foremost to be a passenger aircraft. The first application was for passenger service, and the idea was once its passenger service viability was over with, it would go on to a second life in the freighter market, unlike the "successful" A380. Freighter service was "icing on the cake", not "first priority". 747 pure pax aircraft have gone on to be freighters in large numbers (much like DC-8, DC-10, etc), showing the idea of such prioritization is false.
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 1:48 am

Revelation wrote:
deltadc9 wrote:
Boeing originally launched the 747 as a freighter first priority, passenger second priority design. The first passenger versions had the hardware already installed for freighter conversion.

This is because Boeing did not see a future for it as a passenger plane as they were betting on the SST (2707) to be the future. The passenger version of the 747 was considered a stop gap until the 2707 was ready for service. After that the passenger 747 was still to be offered, but only to a small market that didn't want the SST or had special needs for it. The 2707 didn't happen, and the 747 continued as the flagship in its absence. Boeing originally saw few passenger version sales after 1980 with the SST as their flagship.

Ironically the 748 had a similar outcome, but it was planned this time. It is common knowledge that Boeing did not have faith in the hub and spoke model required for VLA service, and the point to point 787 was their baby, and the 748 was just milking the cash cow, and quite possibly a middle finger to the 380.

Pure revisionism. PanAm bought it first and foremost to be a passenger aircraft. The first application was for passenger service, and the idea was once its passenger service viability was over with, it would go on to a second life in the freighter market, unlike the "successful" A380. Freighter service was "icing on the cake", not "first priority". 747 pure pax aircraft have gone on to be freighters in large numbers (much like DC-8, DC-10, etc), showing the idea of such prioritization is false.

It's always been said that the 747 was a stop gap measure until the 2707 come online. Hence the reason for putting the cockpit above the main floor and for the nose-loading feature.
The 2707 never came to fruition, and the 747 ended up being sold primarily as a pax version.
 
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 2:01 am

WayexTDI wrote:
It's always been said that the 747 was a stop gap measure until the 2707 come online. Hence the reason for putting the cockpit above the main floor and for the nose-loading feature.
The 2707 never came to fruition, and the 747 ended up being sold primarily as a pax version.

Agree to all of this, my disagreement is with the "freighter first priority" statement.
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 2:07 am

WayexTDI wrote:
Revelation wrote:
deltadc9 wrote:
Boeing originally launched the 747 as a freighter first priority, passenger second priority design. The first passenger versions had the hardware already installed for freighter conversion.

This is because Boeing did not see a future for it as a passenger plane as they were betting on the SST (2707) to be the future. The passenger version of the 747 was considered a stop gap until the 2707 was ready for service. After that the passenger 747 was still to be offered, but only to a small market that didn't want the SST or had special needs for it. The 2707 didn't happen, and the 747 continued as the flagship in its absence. Boeing originally saw few passenger version sales after 1980 with the SST as their flagship.

Ironically the 748 had a similar outcome, but it was planned this time. It is common knowledge that Boeing did not have faith in the hub and spoke model required for VLA service, and the point to point 787 was their baby, and the 748 was just milking the cash cow, and quite possibly a middle finger to the 380.

Pure revisionism. PanAm bought it first and foremost to be a passenger aircraft. The first application was for passenger service, and the idea was once its passenger service viability was over with, it would go on to a second life in the freighter market, unlike the "successful" A380. Freighter service was "icing on the cake", not "first priority". 747 pure pax aircraft have gone on to be freighters in large numbers (much like DC-8, DC-10, etc), showing the idea of such prioritization is false.

It's always been said that the 747 was a stop gap measure until the 2707 come online. Hence the reason for putting the cockpit above the main floor and for the nose-loading feature.
The 2707 never came to fruition, and the 747 ended up being sold primarily as a pax version.



Just a side question, how much money was spent on the 2707 - and what was actually built from that money before the project was scrapped?

Despite the misadventures, it looked to be pretty far along the way.

I agree the 747 was really intended as freighter first, being designed with that in mind primarily and the passenger version being an alternative.
 
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 3:38 am

Revelation wrote:
WayexTDI wrote:
It's always been said that the 747 was a stop gap measure until the 2707 come online. Hence the reason for putting the cockpit above the main floor and for the nose-loading feature.
The 2707 never came to fruition, and the 747 ended up being sold primarily as a pax version.

Agree to all of this, my disagreement is with the "freighter first priority" statement.

You were talking about sale and manufacturing I guess, I understood design-wise.
Guess we're in agreement then.
 
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 9:55 am

ScottB wrote:
Did you even read the rest of what I wrote before you went with this kneejerk response? If not, I'll provide it again:

ScottB wrote:
I think the 748 was largely driven by Boeing's evaluation of the cargo business and discussions with customers in that space. The 748i wasn't a huge effort if they were going to be developing the freighter and there were some customers who had expressed interest.


I saw that the first time and decided to let it slide but since you now highlight it again I have to call it out for the revisionist history it is.

Boeing developed the 748 first and foremost as a passenger aircraft to answer the A380. It was shopped to customers and launched as such. The design and budgets also reflected this.

This idea that it was intended for cargo and the passenger version was a "cheap" extension has only been spun - not uncoincidentally - *after* it turned out to be used mostly as a cargo aircraft.
"As with most things related to aircraft design, it's all about the trade-offs and much more nuanced than A.net likes to make out."
 
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 12:45 pm

Revelation wrote:
Agree to all of this, my disagreement is with the "freighter first priority" statement.


Are we all talking about the original 747 or the 747-8?

Joe Sutter has emphatically stated that the original 747 was passenger first (see the A-net thread:

https://www.airliners.net/forum/viewtopic.php?t=444911

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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 12:54 pm

SomebodyInTLS wrote:
Boeing developed the 748 first and foremost as a passenger aircraft to answer the A380. It was shopped to customers and launched as such. The design and budgets also reflected this. This idea that it was intended for cargo and the passenger version was a "cheap" extension has only been spun - not uncoincidentally - *after* it turned out to be used mostly as a cargo aircraft.


First flight
747-8F: February 8, 2010
747-8I: March 20, 2011

Introduction
747-8F: October 12, 2011, with Cargolux
747-8I: June 1, 2012, with Lufthansa

Of course one can argue that the I would have a longer gestation. But even back then, we all would have predicted that the Freighter version would have a longer production live than the I.

bt
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 1:32 pm

bikerthai wrote:
SomebodyInTLS wrote:
Boeing developed the 748 first and foremost as a passenger aircraft to answer the A380. It was shopped to customers and launched as such. The design and budgets also reflected this. This idea that it was intended for cargo and the passenger version was a "cheap" extension has only been spun - not uncoincidentally - *after* it turned out to be used mostly as a cargo aircraft.


First flight
747-8F: February 8, 2010
747-8I: March 20, 2011

Introduction
747-8F: October 12, 2011, with Cargolux
747-8I: June 1, 2012, with Lufthansa

Of course one can argue that the I would have a longer gestation. But even back then, we all would have predicted that the Freighter version would have a longer production live than the I.

bt

Also a bit weird to suggest the “design” and “budget” reflects this. The passenger 748 was originally going to be a different (shorter) length than the cargo 748F, with more range, before it was changed to be the same length as the 748F. Makes one start to wonder about Boeing’s thoughts about pax sales and production commonality with the Freighter...

Initial exploratory studies may have been led by the passenger version and how to compete with the A380, but by program launch it is pretty clear that the freighter would be taking a huge portion of the sales. LH (the first pax airline customer) didn’t even order the 748 until a year after launch.
 
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 3:47 pm

Good God this board has become a place of awful tribalism. I have seen little intellectual curiosity from several here to dissect the Airbus CEO's statement. And there is so much misinformation that I feel compelled to add some information:

1) If we define success as either making a profit in the program or delivering a forecasted number of planes without losing money, Airbus has obviously failed spectacularly. If we use Airbus numbers (as at least one prior posted summarized nicely), we can ssume they have lost at least $25 billion. Probably closer to 30 assuming they ran losses on most of their production run. This should be beyond dispute even amongst the most ardent Airbus fans.

If you define success as building an engineering marvel irrespective of the cost, then I would personally tend to say that the project could be considered a success even if I know others may disagree.

2) On the topic of losses, let's look into this because there is a lot of baseless insinuation in this thread that ALL losses are eaten by the EU tax payers. That is categorically false. Again, let's use Airbus numbers. $25 billion in total development was supported by about $4 billion in total launch aid on the program. Of that, as far as I can tell, the UK and Germany paid nearly half based on some recent news. And since Germany is reporting that about 1/3rd has been repaid to this point (with a little more being paid through 2021), it stands to reason that the UK and other lenders were also repaid roughly 1/3rd of their launch aid up to this point. That means of the original $4 billion, there are roughly $2.7 billion still outstanding.

The remaining losses on the development cost are being shouldered entirely by Airbus not the EU states who lent them that money. They financed those development cost losses entirely through regular cash flow, conventional borrowing or a combination of both. Similarly, any losses due to production inefficiency are eaten by Airbus, NOT the EU states issuing the RLI originally.

What I don't know is how much of the losses Airbus has already written off vs what it still has to write off, but my assumption is that it should not affect cash flow dramatically at this point UNLESS (and this will be my last point), EU State sponsors are expecting something that is not in accordance with the original RLI agreement (like lump sum repayment of remaining RLI at program termination). Either way, can we please dispense with the "of course Airbus could make an ego decision because they had no skin in the game" narrative? More than 80% of the initial development and eventual losses were entirely theirs.

3) Let's remind ourselves that Launch Aid is NOT and has never been a traditional loan that has to be repaid in full. It is a loan that is repaid via airplane deliveries and it is not limited in scope to recouping only the original loan amount or loan+interest (which woud be what a commercial loan would do). Instead, some programs will never repay the original loan while others will repay the initial RLI several times over. The A320 program used $2.8 billion RLI to launch and certify.

While I can't find any total program numbers, I did find that the UK provided roughly $400 million of that RLI. By 1999, Airbus had repaid the UK in full with interest. By 2002, Airbus had repaid the UK roughly $800 million (roughly double the OG loan from 1984/1985). It wasn't until 2015 that Airbus and the UK quietly renegotiated the royalty percentage, so between 2002 and 2015, Airbus kept paying full royalties on all A320 series airplanes and since 2015, they have been paying at a lower rate, but they continue to pay the UK. While I cannot find any exact numbers using Google alone, it is fair to assume that the UK have been handsomely rewarded for their initial investment and will continue to be handsomely rewarded for decades to come.

Similarly, the A330/340 program got $700 million launch aid from the UK in 1988 and as of 2002 was repaying $150 million per year on that RLI. Again, we don't have exact numbers for this, but based on these published numbers combined with sales of A330 since 2002, it is safe to assume that the UK (and presumably other lender States) are WAY ahead on their original investment.

The A380 marks the first time that any EU State has ever taken a bath on an investment, and it seems at least some of them are panicking over the A380 loss even though they have reaped and continue to reap massive benefits of the A320/A330 programs while the A350 is lining up to be the next Golden Goose. I suspect that in the end, cooler heads will revail and according to the original agreement, EU tax payers will eat the loss of the A380 ($2.7 billion) while continuing to be repaid plenty on the other 3 programs (A320/330/350).

While we are at it, let's put that $2.7 billion in unpaid RLI in perspective. In 2017 (the latest available World Bank Data), the EU had a GDP of nearly $17.5 trillion. The biggest RLI providers are Germany, the UK, and France and their respective GDPs are $3.7 trillion / $2.6 trillion / $2.5 trillion (roughly half the total EU GDP). While nobody likes losing $2.7 billion in loan repayments, the loss is tiny in comparison to their GDP as a whole and individually and will not even be close to impacting their future budget discussions.

One thing Airbus will likely have lost is the ability to renegotiate royalties as program age since its A380 failure has show EU member States that profits are not guaranteed, therefore gains on other programs should not be limited. But that will serve as a catalyst for Airbus to make better decisions about whether to seek RLI in the future.
 
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 4:57 pm

Much thanks to you for your long-form post.

aaexecplat wrote:
If you define success as building an engineering marvel irrespective of the cost, then I would personally tend to say that the project could be considered a success even if I know others may disagree.

Thing is, they did NOT set out to build an engineering marvel irrespective of the cost, they set out to build 751 A380s with internal rate of return of 20%.

Ref: viewtopic.php?p=21410545#p21394895

See the difference?

Selling 751 A380s with investment of around EUR 12B and internal rate of return of 20% is a lot different than a $25B smoking hole in the balance sheet.

Thus, yes, A380 is not a success.

One nitpick:

aaexecplat wrote:
The A380 marks the first time that any EU State has ever taken a bath on an investment

https://www.telegraph.co.uk/business/20 ... al-launch/ says "An earlier Airbus jet, the A340, received RLI funding but investors lost out on the programme as the four-engine airliner was a commercial flop". I presume this refers to A340-500/600 which received a separate RLI from the earlier models for both Airbus and RR, and ended up being a money loser.

Interesting counter point from Leeham/Hamilton:

Airbus says using government launch aid money at commercial terms is a matter of relationships, jobs and being supported by the governments who want continued influence over the company.

We say poppycock.

If there is no financial advantage for RLI, we don’t see any reason for governments to step up on commercial terms that cannot be obtained from the marketplace
. If the governments want to support Airbus (and, by extension, parent EADS), let them order more A400Ms instead of reducing orders, launch the A319MMA (the maritime aircraft) and other A320-family military derivatives and buy more goods and services from EADS. Buy more KC-30s. Up the R&D funding on military programs, which would allow EADS to free up cash for Airbus. Military funding is not subject to WTO rules.

There are certainly less controversial ways to support Airbus than RLI.

Ref: https://leehamnews.com/2010/07/06/go-to ... -for-a350/

I do think Airbus keeps asking for RLI because they want the government to have, literally, some investment in the success of Airbus.

Thus I agree with Leeham's characterization of Airbus's rationale behind accepting RLI.

Yet as I said earlier, IMO if they want to say they run their business on strictly commercial grounds they have to stop taking RLI.

If they truly want less governmental influence on them, they can just go to the financial community and get a loan at commercial rates.

They surely have the assets to serve as collateral and the cash flow to pay back the loans.

To me it's clear they want the government to be involved so if they do step on their dingus they have someone with skin in the game to save their butts.

aaexecplat wrote:
It wasn't until 2015 that Airbus and the UK quietly renegotiated the royalty percentage, so between 2002 and 2015, Airbus kept paying full royalties on all A320 series airplanes and since 2015, they have been paying at a lower rate, but they continue to pay the UK.

I do think the low key grab for givebacks on the A320 RLI is devious if not treacherous.

They signed the deal, they should live up to it.

Meanwhile no one notices how Boeing is quietly digesting the > 33% overruns on KC-46A instead of begging for givebacks like Airbus has done with A400M.
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aaexecplat
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Re: A380 was success for Airbus, says new CEO

Wed Jun 05, 2019 5:15 pm

Revelation wrote:
One nit:

aaexecplat wrote:
The A380 marks the first time that any EU State has ever taken a bath on an investment

https://www.telegraph.co.uk/business/20 ... al-launch/ says "An earlier Airbus jet, the A340, received RLI funding but investors lost out on the programme as the four-engine airliner was a commercial flop". I presume this refers to A340-500/600 which received a separate RLI from the earlier models for both Airbus and RR, and ended up being a money loser.


It is really difficult to find accurate info on these RLI issuances, so from what I can tell, the numbers are found are accurate for the OG A330/A340 only and that the A345/346 indeed lost taxpayers money. According to some articles I found just now, the total RLI for the A345/346 was about $600 million. I cannot find a reliable number as to what portion of that was repaid however. Given that relatively few of these were sold, maybe it is safe virtually none was repaid?

Revelation wrote:
I do think Airbus keeps asking for RLI because they want the government to have, literally, some investment in the success of Airbus.

As I said earlier, IMO if they want to say they run their business on strictly commercial grounds they have to stop taking RLI.

If they truly want less governmental influence on them, they can just go to the financial community and get a loan at commercial rates.

They surely have the assets to serve as collateral.

Yet it's clear they want the government to be involved so if they do step on their dingus they have someone with skin in the game to save their butts.


There is no question that RLI is an odd thing for Airbus to seek at this point...no getting around that.

Revelation wrote:
aaexecplat wrote:
It wasn't until 2015 that Airbus and the UK quietly renegotiated the royalty percentage, so between 2002 and 2015, Airbus kept paying full royalties on all A320 series airplanes and since 2015, they have been paying at a lower rate, but they continue to pay the UK.

I do think the low key grab for givebacks on the A320 RLI is devious if not treacherous.

They signed the deal, they should live up to it.

Meanwhile no one notices how Boeing is quietly digesting the > 33% overruns on KC-46A instead of begging for givebacks like Airbus has done with A400M.


Not sure I find your A v B comparison helpful. Because your comparison conveniently omits the ways that Boeing gets launch aid of their own or even better cold hard cash givebacks via tax concessions, lower levels of regulatory due dilegence and military development. Never mind that they lost that tanker bid to Lockheed/Airbus fair and square and then threw the toys out the pram and ended up getting the contract after a BS re-bidding process that was rigged to hand the business to Boeing.

Back on topic, Airbus kept their end of the bargain for 30 years and eventually decided that enough was enough and that the tables had somewhat turned. No different than Boeing putting the gun to the head of several governors and threatening to move production if tax breaks were to not be extended or implemented...
 
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kitplane01
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Re: A380 was success for Airbus, says new CEO

Thu Jun 06, 2019 6:32 am

aaexecplat wrote:
Good God this board has become a place of awful tribalism. I have seen little intellectual curiosity from several here to dissect the Airbus CEO's statement. And there is so much misinformation that I feel compelled to add some information:

1) If we define success as either making a profit in the program or delivering a forecasted number of planes without losing money, Airbus has obviously failed spectacularly. If we use Airbus numbers (as at least one prior posted summarized nicely), we can ssume they have lost at least $25 billion. Probably closer to 30 assuming they ran losses on most of their production run. This should be beyond dispute even amongst the most ardent Airbus fans.

If you define success as building an engineering marvel irrespective of the cost, then I would personally tend to say that the project could be considered a success even if I know others may disagree.


I think everything written here is correct, and well stated. But I'm not sure it's tribalism.

At least one poster just refuses to believe Airbus lost this kind of money (and citations do not convince him). Maybe his head-in-the-sand is tribalism, or some other kind of illogic. You wrote "beyond dispute" but there is one person disputing!

Some posters think the "lessons learned" were worth $25B. I don't believe it, but it's hard to quantify "lessons". Maybe that's tribalism, but it's not obvious. I think it's more likely failure to grasp the huge-enormous amount that $25B is.

But to be honest, I think arguing the failures of the A380 gets away from the original post, which was about the falsehood the Airbus chairman said, and why he said it. Honesty would have been easy here (just say "we learned a lot from the A380 program and created a great airplane, thank you for your hard work")
 
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bikerthai
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Re: A380 was success for Airbus, says new CEO

Thu Jun 06, 2019 1:26 pm

aaexecplat wrote:
No different than Boeing putting the gun to the head of several governors and threatening to move production if tax breaks were to not be extended or implemented...


One minor difference, Boeing has given back to the community all the benefits they received by having successful airplane programs :relieved: For the longest time, the whole Puget Sound economy eagerly awaits the annual Boeing Christmas Bonus. Now, the bonus is in the Spring, (alas, not much to be expected this coming Spring due to the MAX fiasco).

bt
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aaexecplat
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Re: A380 was success for Airbus, says new CEO

Thu Jun 06, 2019 1:55 pm

bikerthai wrote:
aaexecplat wrote:
No different than Boeing putting the gun to the head of several governors and threatening to move production if tax breaks were to not be extended or implemented...


One minor difference, Boeing has given back to the community all the benefits they received by having successful airplane programs :relieved: For the longest time, the whole Puget Sound economy eagerly awaits the annual Boeing Christmas Bonus. Now, the bonus is in the Spring, (alas, not much to be expected this coming Spring due to the MAX fiasco).

bt


Do you even hear yourself? Did you read my post carefully? Airbus has repaid (even with the A380 and A345/346 duds) WAY MORE than they ever got. That's a direct benefit to the tax payers. They also provide 130k employees well-paying jobs and support a metro area (Toulouse) that would otherwise look very different. And it isn't like Boeing hasn't made any missteps when it comes to airplane development...

You need to stop thinking along the lines of "Boeing is better" and then making up narratives in your head to justify your starting position. The two companies the largely the same...they both mostly succeed and occasionally fail, they both pressure their respective governments to gain advantages, they both violate WTO rules, they both get subsidies...they just go about it differently.
 
Amsterdam
Posts: 376
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Re: A380 was success for Airbus, says new CEO

Thu Jun 06, 2019 2:09 pm

Waterbomber2 wrote:
Right now, I'm seated at a fast food joint at a random airport in Germany and the guy sitting at the table next to me is flipping through pages of magazine articles about the A380 titled "the queen of the skies." Probably an enthusiast or a spotter.
The point is he's not reading through pages about the B777-300ER.

I think that the A380 will come back from this situation and quite soon. What Airbus lacks currently is an engineering vision for this aircraft.
The A380 can be made more efficient, a lot more efficient.
What they presented with the A380 Plus is laughable and an insult to those who designed and built this marvelous machine.

What I really wonder is why China has been so passive in its long haul aviation growth strategy.
Ok, they have a pretty sizeable fleet but nothing to mirror their strategy in many other sectors or anything that could meet the underlying demand.
Demand for leisure long haul travel is there but it's not fully fulfilled. Perhaps they don't want their people spending money abroad?
Even in terms of smaller widebodies, I would expect China to have hundreds on order, but that is not the case.
This is very intriguing.


lol

The a380 will never be the 747.

The cockpit of the airbus is on the first floor, of the 747 on the second floor so those pilots sit much higher. The 747 will always be the special one.

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