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Airbus ready to axe A380 if fails to win Emirates deal

reuters.com

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Re: Airbus ready to axe A380 if fails to win Emirates deal

#221

Post by notatoad »

alexhutcheson wrote: post #199

This could be posturing to help them win the Emirates deal. Emirates has already made a huge investment in the A380, so if Airbus shuts down the production line that could translate to larger costs and less flexibility for Emirates in the medium term. If Airbus can make a credible threat to wind down the program, that might convince Emirates to pay more than they otherwise would as a way to keep the program afloat.

If it is, it's pretty shitty posturing. The fact that your most sigificant recent product is effectively EOL if one customer cancels is not the sort of thing you want other potential customers to hear. Even if emirates does re-up on the 380, they're going to have a hard time convincing other customers after this.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#222

Post by jsjohnst »

rsync wrote: post #156
ghaff wrote: post #84

Earlier quoted context omitted.

>And as far as airport congestion goes, building new airports is far easier than new rail lines. Might tell Berlin that :-) It may be true in general if there's undeveloped space within an hour or so drive of a major city center but major airport construction, at least in Western countries, usually hasn't gone smoothly.

"It may be true in general if there's undeveloped space within an hour or so drive of a major city center but major airport construction, at least in Western countries, usually hasn't gone smoothly." I remember DIA (Denver) being built relatively quickly and without trouble - is my memory faulty ? (genuinely curious)

> I remember DIA

The IATA code for Denver International Airport is DEN. I originally heard it by DIA and was confused many years ago, so I looked it up. Not a huge deal as most airline folks know both versions, but wanted to share the knowledge in case it was useful.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#223

Post by jsjohnst »

namdnay wrote: post #41
TremendousJudge wrote: post #31

Earlier quoted context omitted.

The business seats on a plane make more money than the economy seats. However, there aren't lines where you can fill a whole plane of business: economy is there mostly to fill up space

There are some, but they're very rare. One example is the BA shuttle between London City and New York - only business. I believe there is a French airline doing a "cheap business" Paris-New York as well.

Singapore Airlines used to have an all business flight to NYC, but it’s been phased out.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#224

Post by KeepTalking »

>> As an example, Lufthansa recently used jumbo jets on the domestic Frankfurt / Berlin route after their competitor Air Berlin went belly up.

Color commentary: This is a outcome of a micro trend that was caused due to the collapse the 2nd largest airline in Germany. It is unlikely this is an indicator of longer aircraft deployment. Regional and domestic routes tend to skew towards frequency and convenience. Most major airports and regulators also encourage this behavior when analyzing and distributing airport slots.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#225

Post by valuearb »

avar wrote: post #178
tomalpha wrote: post #167

Earlier quoted context omitted.

Do you have a source for that? I’m particularly interested because I’m due to fly on a British Airways 747 in a couple of weeks to the US. As an aside, BA appears to have the largest remaining passenger 747 fleet[0] and doesn’t plan to fully retire them until 2024. [0] https://www.flightglobal.com/news/articles/last-ba-747-400-t...

Start with this thread[1] from HN a couple of months ago (search for "inert"). This has been a long time coming[2] and is in response to TWA 800 which was a 747 that exploded in 1996 due to lack of fuel tank inerting[3]. The FAA issued a directive in 2008 saying that by December 26, 2017 (not 2018, sorry) [4] passenger planes flying within or into the US had to have fuel tank inerting. Many operators such as Delta an…

The 747 without fuel tank inerting is still has a very good safety record. It's been over 20 years since one has had a fuel tank explosion. FAA estimates are without inserting a passenger jet risks a fuel tank explosion every 60M hours, or roughly every 30,000 years. Lastly, it's unclear how well the FAA inerting requirements will even work, they only reduce oxygen levels to 12%, while military jets require 9% to eliminate explosion risks.

It's silly to spend a large amount of money to retrofit planes near the end of their useful lives with safety equipment of questionable benefit. Especially when every bit of equipment introduces it's own new risks.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#226

Post by bsder »

ptero wrote: post #183
code4tee wrote: post #43

Earlier quoted context omitted.

It’s actually the airlines dragging their feet on a lot of this, not “30 year old ATC.” Many airlines don’t upgrade their planes to have the latest equipment. Flew in a small personal plane with a friend that’s a pilot and he was explaining how in several areas his small plane has more advanced avionics than commercial airliners. For example, his plane is certified to fly the latest 3D GPS based landing approaches wh…

> It’s actually the airlines dragging their feet on a lot of this, not “30 year old ATC.” Many airlines don’t upgrade their planes to have the latest equipment. Yes, and I believe they do not upgrade because it makes no business sense for them. Regulators say, for example, "install ADS-B so you are compliant with latest standards" which at the moment has no tangible benefits for the airline. If, by installing it airl…

> Yes, and I believe they do not upgrade because it makes no business sense for them.

Agreed. Those little wingtip flip-ups--man, those went through the industry like wildfire. I never saw those and then BAM suddenly they were on every plane I flew on.

The airlines can move like the wind when money is actually involved.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#227

Post by martinald »

mdasen wrote: post #129
mpweiher wrote: post #33

I think coverage of the A380 often misses the point that at the time, Boeing's 747 simply had no competition, whereas all of Airbus's planes did. So Airbus pretty much had to create the A380 in order to protect its other lines from cross-subsidy by this unopposed cash-cow. And, also missing from almost all the coverage is the fact that this worked: if the A380 is struggling, the 747 is moribund or dead. Official back…

Boeing made a bet on the 787. However, as you note, that's an easier bet to make when you already have the 747. Boeing already had a jumbo. It's easy to make a bet on twin-engines getting certified for longer ocean crossings when you already have the 747. There's a lot of things that Boeing bet on with the 787 and you're totally right that it's way easier to make those bets when you already have the 747. However, the…

What I can't understand though is how it even makes sense at LHR.

A380 requires 'super heavy' spacing between planes AFIAK, as opposed to 'heavy' for 747 and below.

Surely all the gain you get from more passengers is lost as you need significantly more spacing between the plane and the next one? So you might as well just run two 787s instead and extract more point to point incremental revenue?

Please do reply, I've wondered this for a while and haven't been able to have a good answer.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#228

Post by KeepTalking »

cdibona wrote: post #118
monocasa wrote: post #94

Earlier quoted context omitted.

The 787 is a little more than half the capacity of a 747.

It's a better bet to say the 777 killed the passenger 747. The real question is if cargo operations will continue to drive 747 demand. It'll probably look like tanker/military demand for the 767. The a380 cargo option never really developed...

Till now, cargo operations are built on the backbone of older aircrafts that require relatively inexpensive modifications to haul pallets. The economics of the business rarely encourage brand new aircraft purchase with the exception of UPS and FedEx and ad-hoc specialized operators.

In the future, this might not be the case. In the era of fuel efficiency most passenger aircrafts were not designed to haul cargo. In-order to save on weight the main deck on the 777 was made of lightweight materials that is acceptable for passenger traffic. This in-turn makes it very expensive for cargo conversions.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#229

Post by jsjohnst »

startupdiscuss wrote: post #23
namdnay wrote: post #16

Earlier quoted context omitted.

I think that for airlines that want to differentiate on comfort/quality, the A380 is a must-have: You can pimp up the interior of a 787 as much as you want, it will never be as comfortable as what you can do with an A380 (see my other comment on the Emirates A380). However this segment probably isn't big enough to justify such an expensive production line... @frik - for some reason you are "dead" - no-one can see you…

But the segment has an outsized impact on revenue. Say a business class ticket for a transatlantic flight is 5x an economy and a first class ticket is 10x an economy. And the plane, of course, is largely fixed costs.

That’s part of the reason US based airlines don’t fly to most gulf region airports anymore.

1) they could essentially justify a lightly loaded economy section due to Business / First passengers (I’ve done several cheap mileage runs before where I had multiple rows to myself in economy). When those $$$$ passengers switched to the nicer Emirates/Etihad/etc flights, they lost that marginal advantage.

2) on top of #1, another major factor is that Etihad/Emirates/etc are heavily subsidized by their national governments. Due to this, the slot fees were much cheaper for them than US based airlines further reducing any money to be made on those segments by US based airlines.

The end result of the above is that now you have to use an alliance partner + connection to get from US to the Middle East (or fly a MENA based airline) where as before you could choose from dozens of directs.

Re: Airbus ready to axe A380 if fails to win Emirates deal

#230

Post by valuearb »

mc32 wrote: post #220
valuearb wrote: post #217

Earlier quoted context omitted.

Turned out it wasn't. The 777 is the real profit engine at Boeing, the Dreamliner may never earn back it's cost thought it will never be as bad an investment as the A380.

Apparently the Dreamliner is doing better than anticipated, for it has begun turning a profit[1]. With the A380 being developed, Boeing couldn't just stand arms crossed. They had to develop a response --and in this case develop new materials to achieve better fuel efficiency --the discoveries thereof can be reused in future frames. [1] http://www.telegraph.co.uk/business/2017/01/25/boeing-soars-...

That article is misleading, the Dreamliner is at least a decade away from true profitability, if it ever gets there. When Boeing announces it "turned" profitable, they are saying it now costs less to make each Dreamliner than they are selling for. But that is ignoring over $30B in development costs (plus interest) that it needs to earn back before it can ever generate a true economic profit.

"In the second quarter of 2015, Boeing lost $25 million on each 787 delivered but was planning to break-even per plane before the year end. After that Boeing hopes to build 900 Dreamliners over six years at an average profit of more than $35 million each. But with deferred costs peaking in 2016 at $33 billion, Leeham analyst Bjorn Fehrm considers Boeing can't make an overall profit on the program. Ted Piepenbrock, an academic affiliated with the MIT and the University of Oxford, projects losses decreasing through the first 700 airliners, forecast the cumulative deferred costs to peak beyond $34 billion and its model most favorable to Boeing projects a program loss of $5 billion after delivering 2,000 Dreamliners. Boeing’s original development investment, estimated at least at a further $20 billion, isn't included in these costs.[177]"

https://en.wikipedia.org/wiki/Boeing_787_Dreamliner

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