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Consolidated "Airbus 380 - problems and discontinuation" thread

Consolidated "Airbus 380 - problems and discontinuation" thread

Old Aug 12, 2014, 9:29 am
  #91  
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Originally Posted by geminidreams
Ive flown in the Emirates 380 and some US airlines and I will fly Emirates in comparison every day of the week which is why they fill planes. All I can say is that US airlines are lucky they dont fly on competitive routes to Emirates as they would be having a much tougher time of it.
That's like comparing a Harley-Davidson to a Greyhound bus, and criticizing the Harley because it can't carry as much baggage. It's silly. They're built to perform entirely different missions.
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Old Aug 12, 2014, 11:06 am
  #92  
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and no US airlines are state owned
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Old Aug 12, 2014, 11:58 am
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The only non-state owned or non-majorly state-subsidized/partially state-owned airlines with the A380 are Lufthansa, Qantas, Air France, British Air, Korean, and Asiana. All other top ranked and A380 carriers are state owned or heavily subsidized (Emirates, Etihad, Malaysian, Singapore, Thai, and China Southern).

It is not surprising that the carriers with the most A380s rely heavily on state support/subsidies and vanity/ego when utilizing such large aircraft without the concern for cost/benefit and profit. The private enterprise carriers with A380s have all cut back on their A380 orders because they need to consider the cost/benefit and profits, and they all now understand that the A380 does not deliver in that way as much as other aircraft.

The US carriers DL, AA, and UA might not have A380s but they are among the most profitable carriers in the world. I'd say the US carriers knew what they were doing when they decided against the A380.

Last edited by bhrubin; Aug 12, 2014 at 3:10 pm
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Old Aug 12, 2014, 3:07 pm
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Most of you are focusing on passengers, and forgetting about cargo. A while ago I asked a senior Cathay exec about the A380 - and let's face it with flights 5x per day to London with overnight flights just a couple of hours apart they shouldn't find it too hard to fill an A380 - and his response was that they thought it unlikely because of the relative shortfall in freight capacity.
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Old Aug 12, 2014, 8:07 pm
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Originally Posted by BearX220
That's like comparing a Harley-Davidson to a Greyhound bus, and criticizing the Harley because it can't carry as much baggage. It's silly. They're built to perform entirely different missions.
Not really an appropriate analogy. The point is that Emitates provides a better service period whether in a 777 or 380. The point is that many carries running competing routes are struggling against Emirates and the other ME carriers and so would US airlines if they were running head to head.
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Old Aug 12, 2014, 8:11 pm
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Originally Posted by bhrubin
The only non-state owned or non-majorly state-subsidized/partially state-owned airlines with the A380 are Lufthansa, Qantas, Air France, British Air, Korean, and Asiana. All other top ranked and A380 carriers are state owned or heavily subsidized (Emirates, Etihad, Malaysian, Singapore, Thai, and China Southern).

It is not surprising that the carriers with the most A380s rely heavily on state support/subsidies and vanity/ego when utilizing such large aircraft without the concern for cost/benefit and profit. The private enterprise carriers with A380s have all cut back on their A380 orders because they need to consider the cost/benefit and profits, and they all now understand that the A380 does not deliver in that way as much as other aircraft.

The US carriers DL, AA, and UA might not have A380s but they are among the most profitable carriers in the world. I'd say the US carriers knew what they were doing when they decided against the A380.
Emirates are very profitable and still growing significantly. I dont know why you think Emirates would be heavily subsidised when Dubai was basically broke a few years ago and had to be bailed out by Abu Dhabi. Not all ME carriers operate off oil revenues, Dubai has insignificant oil resources.
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Old Aug 12, 2014, 10:13 pm
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Originally Posted by geminidreams
Emirates are very profitable and still growing significantly. I dont know why you think Emirates would be heavily subsidised when Dubai was basically broke a few years ago and had to be bailed out by Abu Dhabi. Not all ME carriers operate off oil revenues, Dubai has insignificant oil resources.
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.
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Old Aug 12, 2014, 10:34 pm
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Originally Posted by bhrubin
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.
If you know so much just state the quantum of subsidy that emirates has received? Emirates doesnt need subsidies as they make money. They actually have an excellent location as a hub between Asia and Europe and a fleet that is better than the US trash and reasonable levels of service. There are lots of businesses that dont have a stock price to measure value, doesnt mean they dont make money.
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Old Aug 12, 2014, 11:04 pm
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Originally Posted by geminidreams
If you know so much just state the quantum of subsidy that emirates has received? Emirates doesnt need subsidies as they make money. They actually have an excellent location as a hub between Asia and Europe and a fleet that is better than the US trash and reasonable levels of service. There are lots of businesses that dont have a stock price to measure value, doesnt mean they dont make money.
Oh dear. When a company isn't public it doesn't have to disclose those figures...as in the case of Emirates. They do have an excellent location and a better fleet than the US carriers--that isn't in question. You seem to have missed the point that the REASON they are so good is because they have so much subsidies and don't have to answer to shareholders as do publicly traded carriers such United, American, and Delta--those pesky American carriers. No one is saying that Emirates isn't making money, either--but it's hard to know when they don't have to report earnings publicly, so it's hard to know the subsidies they receive allowing them to earn whatever they earn.

Emirates is entitled to the A380. It is a great plane...but it will be a failure for Airbus which is what the original point was supposed to be. You just don't seem to accept the other facts that so bother you...
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Old Aug 13, 2014, 12:18 am
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Originally Posted by bhrubin
Oh dear. When a company isn't public it doesn't have to disclose those figures...as in the case of Emirates. They do have an excellent location and a better fleet than the US carriers--that isn't in question. You seem to have missed the point that the REASON they are so good is because they have so much subsidies and don't have to answer to shareholders as do publicly traded carriers such United, American, and Delta--those pesky American carriers. No one is saying that Emirates isn't making money, either--but it's hard to know when they don't have to report earnings publicly, so it's hard to know the subsidies they receive allowing them to earn whatever they earn.

Emirates is entitled to the A380. It is a great plane...but it will be a failure for Airbus which is what the original point was supposed to be. You just don't seem to accept the other facts that so bother you...
Here is the link to Emirates annual report http://www.theemiratesgroup.com/engl...al-report.aspx
Reporting their 26th successive profit. Last year just under $1b. Please point out the line item dealing with subsidies. For sure Emirates have some objectives that would have a significance to Dubai that would not be an issue for fully private companies but that is more likely to cost them money.

The reality is the biggest operator of the 380 is not receiving subsidies to buy or operate them, they can utilise them profitably because the have the traffic volume to fill them. My daughter flew the 380 from Gatwick to DXB and returned BKK - DXB - LHR and there was almost no free seats. So it seems there is a case for them. Emirates especially sells the premium cabins of the 380 as a major lure for the premium business.

Not every airline can run a 380 business model as they dont have the traffic. However Emirates is the prime example of how it can be used. May not help Airbus make money.

Then again Norwegian Air is getting resistance in the US, maybe a bit of protectionism of the free from subsidy carriers? Governments interfere in markets in a lot of ways.
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Old Aug 13, 2014, 7:53 am
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Is Airbus still receiving subsidies from European governments?
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Old Aug 13, 2014, 9:59 am
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Originally Posted by dieuwer2
Is Airbus still receiving subsidies from European governments?
Did not Boeing get a second opportunity to bid on air refueling tankers after losing to Airbus. Don't try to make out that big ticket items with major consequences for local economies don't get government interference. If you think there is a free market out there you are very naÔve. When Boeing sets up an assembly operation you don't think they get tax breaks and incentives? US military contractors are even worse constantly being pork barreled.
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Old Aug 13, 2014, 10:09 am
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Originally Posted by dieuwer2
Is Airbus still receiving subsidies from European governments?
Like Boeing doesn't get help either. A $199M tax refund on profits of $5.9B last year. $1.6B in refund over the past 12 years.
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Old Aug 13, 2014, 12:09 pm
  #104  
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Originally Posted by geminidreams
My daughter flew the 380 from Gatwick to DXB and returned BKK - DXB - LHR and there was almost no free seats. So it seems there is a case for them.
Fortunately most modern forward-looking cost-benefit analysis is not based on the past observations of someone's daughter who took one trip.
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Old Aug 13, 2014, 12:30 pm
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Originally Posted by geminidreams
Here is the link to Emirates annual report http://www.theemiratesgroup.com/engl...al-report.aspx
Reporting their 26th successive profit. Last year just under $1b. Please point out the line item dealing with subsidies. For sure Emirates have some objectives that would have a significance to Dubai that would not be an issue for fully private companies but that is more likely to cost them money.

The reality is the biggest operator of the 380 is not receiving subsidies to buy or operate them, they can utilise them profitably because the have the traffic volume to fill them. My daughter flew the 380 from Gatwick to DXB and returned BKK - DXB - LHR and there was almost no free seats. So it seems there is a case for them. Emirates especially sells the premium cabins of the 380 as a major lure for the premium business.

Not every airline can run a 380 business model as they dont have the traffic. However Emirates is the prime example of how it can be used. May not help Airbus make money.
Your information is sound. But it doesn't preclude that Emirates may or may not be getting subsidies (http://www.ibtimes.com/emirates-airl...e-stay-1472912). Since there are no shareholders and ONLY the Government of Dubai Corporation owns it, it is possible to provide subsidies and hide them amidst many lines on any annual report (since there doesn't have to be any proof for each line released to the public, only proof to the Government of Dubai Corporation).

Assuming Emirates doesn't have any subsidies for the moment, it still is the ONLY carrier in the world that is betting on the A380. While its position in the Gulf as an ideal hub crossroads location for the entire world DOES make it more likely to succeed now with the growing markets in China, Africa, SE Asia, and India, the fact that its Gulf competitors Etihad and Qatar have NOT chosen its A380 strategy is salient. Even Turkish, the fast growing airline in the world now, is not using the A380 as its standalone--though it has just tried to lease a few A380s. The business model of the A380 will likely work for Emirates only as long as the world economy doesn't hit a bump in the road...as it inevitably will. Any bump and the A380 Emirates model is the first to go down due to its much higher passenger load requirement for profitability (85% or higher).

Again, the fact that some A380 routes can have >85% capacity (like the one your daughter took) isn't the salient point here. Everyone recognizes that there are SOME routes on which the A380 makes perfect sense--namely, those hub-to-hub routes which are so often slot-limited, thereby creating demand for a bigger passenger plane like the A380. But those slot-limited routes are finite...and shrinking as more passenger demand is spread by the point-to-point routes now made more profitable by smaller more efficient planes with greater range, including but not limited to the B787 and even the A350.

The original question was whether or not the A380 is a failure. As I stated in a previous post, it depends on whom you ask. For Airbus, the answer is a clear yes--the A380 is a failure on which they are unlikely to ever recoup their $25 billion investment, at least not over the next 3 decades.

Also, the fact that your daughter or any person you know flew the A380 and saw it full has no bearing on the load factors for ALL A380 flights. When you need to provide an anecdote of a single example flight to try and prove your point, you know there is something weak with your point.
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