Consolidated "Airbus 380 - problems and discontinuation" thread
Aug 28, 2014, 1:41 pm
#151
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And how does (for the part you conveniently cutout) their planning account for unknown and unknowable events - after all, if "making a bet" & getting it wrong is somehow important then you can no doubt point to some subsequent event that this had a result upon (eg. the company going under) or something that they should have been able to predict, etc? Spending all this time going on and on about it is otherwise just making noise. 
[removed quote of and response to now-deleted material]
As I said, Airbus has so far taken a loss on the A380 and so what if they do? Give it ~20 years and re-visit the question. Maybe things will have changed again and they'll be up to 500-700 orders over time. Or maybe not. Again, Airbus isn't going to go under from it.
Last edited by cblaisd; Aug 28, 2014 at 6:23 pm Reason: [removed quote of and response to now-deleted material]
Aug 28, 2014, 2:06 pm
#153
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So you equate their business planning to "making bets"? And how does (for the part you conveniently cutout) their planning account for unknown and unknowable events - after all, if "making a bet" & getting it wrong is somehow important then you can no doubt point to some subsequent event that this had a result upon (eg. the company going under) or something that they should have been able to predict, etc? Spending all this time going on and on about it is otherwise just making noise
And how does (for the part you conveniently cutout) their planning account for unknown and unknowable events - after all, if "making a bet" & getting it wrong is somehow important then you can no doubt point to some subsequent event that this had a result upon (eg. the company going under) or something that they should have been able to predict, etc? Spending all this time going on and on about it is otherwise just making noise Yes, I equate my words "Airbus made a bad bet" with your words "they simply estimated demand incorrectly". And so does anyone else who has no agenda.
Your "planning ...for unknown and unknowable events" is the bet they made...and they got it wrong, pure and simple. They bet wrong on this one (the A380 that we're discussing). You seem to be unwilling to concede that their prediction was incorrect. That's a bad bet, no matter how you try to wiggle out [removed unnecessarily personalized and uncivil commentary]
I have no idea how you get from what I wrote to "You seem to be arguing simply for argument's sake and refuse to acknowledge that anyone else has a point or is right." But hey, whatever floats your boat & makes you feel all unique or whatever. 
As I said, Airbus has so far taken a loss on the A380 and so what if they do? Give it ~20 years and re-visit the question. Maybe things will have changed again and they'll be up to 500-700 orders over time. Or maybe not. Again, Airbus isn't going to go under from it.
I've never talked about Airbus going under. We are discussing the A380. I am discussing the A380. You are trying to change the topic from the bad bets Airbus made on the A380 and the fact that it will be a big money loser for Airbus into another topic of your choosing (Airbus overall) that is not what is being discussed.
[removed unnecessarily personalized commentary]
You are wrong. You just don't want to concede. I've demonstrated through multiple news sources citing multiple "analysts" and CEOs and airline executives the reasons why you are wrong, and yet you simply fail to accept the information.
I call that arguing for argument's sake.
To end with your own quote, which seems so perfectly appropriate:
But hey, whatever floats your boat & makes you feel all unique or whatever.
The A380 was introduced in 2005. In its first 20 years, it has no chance to break even on the Airbus investment--as all of the aforementioned evidence and analysis has clearly suggested.
Boeing made a bet that was bad at first but which turned out to be quite good--for completely different reasons than exist for the A380. Boeing's 747 was perfectly suited for the longhaul routes, modifiable to be suited for shorter routes with more seats, fuel efficient enough to handle the loads on more routes, and modifiable to be suited for cargo--something the A380 has turned out to be not so good at. Nearly 40% of 747s ultimately were used for cargo or other non-passenger service, something that is not true of the A380.
Boeing has made bad bets, too. No one is arguing that. But the Airbus bet on the A380 was worse.
This is no comment on Boeing versus Airbus. This is strictly about the A380, our topic of discussion.
Last edited by cblaisd; Aug 28, 2014 at 6:28 pm Reason: merged poster's 2 consecutive posts; removed unnecessarily personalized comments;
Aug 28, 2014, 2:36 pm
#154
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Yes...and the 747 was introduced to the market in 1970 amidst a recession and followed by 2 more severe recessions in its first 20 years...and yet by the 1991 had recouped Boeing's investment: http://books.google.com/books?id=p-i...%20747&f=false
The A380 was introduced in 2005. In its first 20 years, it has no chance to break even on the Airbus investment--as all of the aforementioned evidence and analysis has clearly suggested.
Boeing made a bet that was bad at first but which turned out to be quite good--for completely different reasons than exist for the A380. Boeing's 747 was perfectly suited for the longhaul routes, modifiable to be suited for shorter routes with more seats, fuel efficient enough to handle the loads on more routes, and modifiable to be suited for cargo--something the A380 has turned out to be not so good at. Nearly 40% of 747s ultimately were used for cargo or other non-passenger service, something that is not true of the A380.
Boeing has made bad bets, too. No one is arguing that. But the Airbus bet on the A380 was worse.
This is no comment on Boeing versus Airbus. This is strictly about the A380, our topic of discussion.
The A380 was introduced in 2005. In its first 20 years, it has no chance to break even on the Airbus investment--as all of the aforementioned evidence and analysis has clearly suggested.
Boeing made a bet that was bad at first but which turned out to be quite good--for completely different reasons than exist for the A380. Boeing's 747 was perfectly suited for the longhaul routes, modifiable to be suited for shorter routes with more seats, fuel efficient enough to handle the loads on more routes, and modifiable to be suited for cargo--something the A380 has turned out to be not so good at. Nearly 40% of 747s ultimately were used for cargo or other non-passenger service, something that is not true of the A380.
Boeing has made bad bets, too. No one is arguing that. But the Airbus bet on the A380 was worse.
This is no comment on Boeing versus Airbus. This is strictly about the A380, our topic of discussion.
Aug 28, 2014, 2:44 pm
#155
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I'm not challenging the myriad reasons WHY Airbus made a bad bet on the A380. I'm simply stating the fact that Airbus made a bad bet. The rolled the dice on a much bigger 4 engine aircraft, and they lost.
That was the focus of the NYT article that spawned this thread discussion. That is what I've been focusing on.
Some people herein, perhaps ardent A380 fans, simply cannot accept that the A380 was a bad move for Airbus and that it isn't likely to ever recoup its investment--despite all the evidence out there and herein. Other people herein simply seem unwilling to concede points. They clamored for evidence. I gave them evidence. Then they ignore the evidence and try to change topic or dispute the evidence.
I am sure I will love the A380 when I fly it (in BA F in October and in EK F in January). But my love for its premium class offerings will not change the fact that Airbus will take a big loss on the A380. Airbus' loss is turning out to be Emirates' gain, though!
Aug 28, 2014, 6:13 pm
#157
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After a half an hour of tedious thread cleanup, removing off-topic political characterizations, removing uncivil personal characterizations and attacks, and merging consecutive posts, let me now say:
If anyone has any further thoughtful, civil, respectful comments on this thread's topic, feel free.
If anyone wants to make this thread a personalized fight among a handful of posters, take to PM.
Folks who are unable to do the above may find their FT privileges at risk, unfortunately.
Thank you.
cblaisd
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Last edited by cblaisd; Aug 28, 2014 at 6:42 pm
Aug 28, 2014, 9:23 pm
#159
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You must be joking. Did you not read the original article cited?
Check this out for "fact" from 2013: http://aviationweek.com/awin/airbus-...klog-shrinking
That would be a total of 3 Lufthansa, 6 Virgin Atlantic, 10 Hong Kong, 5 Kingfisher, 2 Air Austral, not to mention the AF delays and possible cancels. That's 26 cancels or reductions from 2013 alone.
Plus this from 2014:
http://www.businessinsider.com/airbu...es-a380-2014-7
That would be another 6 cancels on the A380 for 2014.
Plus this from 2014: http://www.aviationnews-online.com/e...-four-engines/
That Turkish reduction from 15 to 6 A380s is another 9 reductions in A380 sales.
Between all the cancels, planned reductions, and expected cancels and reductions in the coming years, not to mention the discount from $400 million list price to the current asking price of about $200 million as previously cited, Airbus would need to sell twice as many A380s as it originally projected (original projection 750, and it isn't even close to halfway there) to BREAK EVEN on its investment--not even considering the money it loses on the production of each and every A380 at the new discounted price.
My opinion has plenty of facts to back it up. My opinion is based on those facts. [Removed unnecessarily personalized characterization and personal attack] the A380 was a very bad bet for Airbus.
Wow. The FACTS are that Airbus projected it needed to sell 750 A380s to break even. It isn't even close to that mark now 14 years into the A380 program. It has produced and/or has future orders for only a total of 359 A380s as of today (including most of those that are now canceled and also including the 50 more A380s ordered by Emirates, the only carrier ordering MORE)--and the future orders are shrinking, being delayed, or canceled outright. I've shared plenty of facts and evidence of canceled orders from numerous airlines, yet you don't want to accept it.
[Removed personal attack and OMNI/PR political characterization]
On top of everything I already shared as evidence, here is another that puts the FUTURE of the A380 in perspective. From http://aviationweek.com/awin/airbus-...klog-shrinking
Airbus made a bad bet in the 1990s that airlines would prefer bigger 4 engine jets. It turns out that they were wrong--except for Emirates and a few routes that justify the unit costs for the A380. But not even close to enough to recoup Airbus' initial $25 billion investment to develop the A380 (750 A380s at the original asking price of $400 million)...not to mention the fact that they are discounting the A380 by such substantial sums now ($400 million down to near $200 million per A380), which means they are losing money on the production of every new A380.
Now with their own A350 that enters the market in 2017, Airbus has offered another alternative to the 787 that permits even lower unit costs than even the discounted A380 at above $200 million a jet.
Airbus made a bad bet. The A380 program was a bad investment for Airbus. The numbers are quite clear, which is why Airbus developed the A350 after seeing its A380 numbers disappoint and watching Boeing's 787 numbers soar. Unfortunately, Airbus loses money on the A380.
The A380 is a wonderfully engineered plane...but not a success in terms of profit and business. That is called a business failure.
Check this out for "fact" from 2013: http://aviationweek.com/awin/airbus-...klog-shrinking
That would be a total of 3 Lufthansa, 6 Virgin Atlantic, 10 Hong Kong, 5 Kingfisher, 2 Air Austral, not to mention the AF delays and possible cancels. That's 26 cancels or reductions from 2013 alone.
Plus this from 2014:
http://www.businessinsider.com/airbu...es-a380-2014-7
That would be another 6 cancels on the A380 for 2014.
Plus this from 2014: http://www.aviationnews-online.com/e...-four-engines/
That Turkish reduction from 15 to 6 A380s is another 9 reductions in A380 sales.
Between all the cancels, planned reductions, and expected cancels and reductions in the coming years, not to mention the discount from $400 million list price to the current asking price of about $200 million as previously cited, Airbus would need to sell twice as many A380s as it originally projected (original projection 750, and it isn't even close to halfway there) to BREAK EVEN on its investment--not even considering the money it loses on the production of each and every A380 at the new discounted price.
My opinion has plenty of facts to back it up. My opinion is based on those facts. [Removed unnecessarily personalized characterization and personal attack] the A380 was a very bad bet for Airbus.
Wow. The FACTS are that Airbus projected it needed to sell 750 A380s to break even. It isn't even close to that mark now 14 years into the A380 program. It has produced and/or has future orders for only a total of 359 A380s as of today (including most of those that are now canceled and also including the 50 more A380s ordered by Emirates, the only carrier ordering MORE)--and the future orders are shrinking, being delayed, or canceled outright. I've shared plenty of facts and evidence of canceled orders from numerous airlines, yet you don't want to accept it.
[Removed personal attack and OMNI/PR political characterization]
On top of everything I already shared as evidence, here is another that puts the FUTURE of the A380 in perspective. From http://aviationweek.com/awin/airbus-...klog-shrinking
Airbus made a bad bet in the 1990s that airlines would prefer bigger 4 engine jets. It turns out that they were wrong--except for Emirates and a few routes that justify the unit costs for the A380. But not even close to enough to recoup Airbus' initial $25 billion investment to develop the A380 (750 A380s at the original asking price of $400 million)...not to mention the fact that they are discounting the A380 by such substantial sums now ($400 million down to near $200 million per A380), which means they are losing money on the production of every new A380.
Now with their own A350 that enters the market in 2017, Airbus has offered another alternative to the 787 that permits even lower unit costs than even the discounted A380 at above $200 million a jet.
Airbus made a bad bet. The A380 program was a bad investment for Airbus. The numbers are quite clear, which is why Airbus developed the A350 after seeing its A380 numbers disappoint and watching Boeing's 787 numbers soar. Unfortunately, Airbus loses money on the A380.
The A380 is a wonderfully engineered plane...but not a success in terms of profit and business. That is called a business failure.
Aug 28, 2014, 10:32 pm
#160
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I believe it is fair to say that the A380 is not the runaway success that Airbus hoped it would be.
To date.
Air traffic, particularly in Asia, however, continues to grow at a massive rate. How that growth assists growth in the A380 sales over the next decade is stil an open question.
Airbus can't take back the development costs now, so it is forced into a wait and see position on the sales of mammoth aircraft. The good thing for Airbus is that they don't have a lot of competition.
As an aside, a 50% discount is not a big deal. 40% discounts on volume purchases are common across the industry. An awful lot of money is made on the back side on parts.
To date.
Air traffic, particularly in Asia, however, continues to grow at a massive rate. How that growth assists growth in the A380 sales over the next decade is stil an open question.
Airbus can't take back the development costs now, so it is forced into a wait and see position on the sales of mammoth aircraft. The good thing for Airbus is that they don't have a lot of competition.
As an aside, a 50% discount is not a big deal. 40% discounts on volume purchases are common across the industry. An awful lot of money is made on the back side on parts.
Sep 3, 2014, 6:24 am
#161
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I have never flown A380 but always thought it was a great combo of comfort and efficiency i.e. lower CASM. Anyone has a sense of what cost per available seat mile is for the 380? Granted the more first and business class seats you have, CASM will go up and the A-380 may have relatively higher first and business class. But still, if the CASM is low and the jet offers more comfort, other airlines would eventually gravitate toward the aircraft as more people fly Emirates etc.
Sep 21, 2014, 6:48 am
#162
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I have never flown A380 but always thought it was a great combo of comfort and efficiency i.e. lower CASM. Anyone has a sense of what cost per available seat mile is for the 380? Granted the more first and business class seats you have, CASM will go up and the A-380 may have relatively higher first and business class. But still, if the CASM is low and the jet offers more comfort, other airlines would eventually gravitate toward the aircraft as more people fly Emirates etc.
The reason SQ, MH are not doing as well as EK in growth is the location.
They are a bit off to the side geographically.
They are certainly doing well enough to knock off Qantas.
MH is struggling with many issues.
CX,SQ,EK,EY,QR etc are all focused on connecting traffic in 1 hub.
The US airlines are focused on multiple hubs.
I have flown the AF 380 many times in 2009-10 and it is fine (even with angled seats)
The LH 380 LH (e.g., from PEK to FRA) is fine as well. I sleep well enough slanted thank you.
I have flown the LH 748 WAS-FRA-DEL/BLR and it has the new car smell, but the foot rest was small.
I prefer the 380 to the 747/8 for long haul.
The dominant hub model demands an A380 to survive and grow.
Watch EY - I suspect in the future it will be the dominant airline in the ME and will steadily replace its fleet with the A380s
Sep 21, 2014, 7:02 am
#163
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Sep 21, 2014, 7:06 am
#164
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If an entity has gone bankrupt 3 times and is now owned by someone else, is it the most profitable in the world?
Yes, if I could write off all my stock losses and restart with a new owner and a blank slate for "profitability"
I saw UA go bust one, bought by unions - go bust again - and now acquired
The only long lasting US airline to be truly profitable is SouthWest.
Sep 21, 2014, 7:07 am
#165
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Oh dear. Emirates is owned fully by a subsidiary which is owned fully by the Government of Dubai. Emirates doesn't answer to shareholders in the same manner as the private enterprises of non-state owned carriers. Period. End. Emirates therefore can take risks and make purchases short-term that might turn out to be poor moves in the long-term but which don't hurt its stock valuation--as it's owned by a state, and fully backed by that state government. There is a huge difference. There's a reason why the state-owned carriers Emirates, Etihad, Qatar, Singapore, Cathay Pacific, Malaysian, etc are often the best service oriented carriers compared to their private enterprise peers that cannot rely as easily on government subsidies--because they can afford to do what other carriers cannot, and because they have hiring practices and training that would be considered illegal in some.