On US TV last night there was a documentary on building the A380. It seems to me that the cost and trouble of moving the massive pieces would wipe out any potential profit in this product. If the cost of movement were not enough, the potential for disruption of the supply chain is so great with the complicated nature of waiting for tides to fall on Welsh rivers and traffic to be cleared from 150 miles of French roads.
Has Airbus sharpened their pencils enough to account for all the potential for disaster in the supply chain? Or is this just an exercise for a heavily subsidized industry with no real need to make a profit?
Scott
By: Bmused55 - 11th June 2004 at 21:50
I thought the A380 will need to sell 200 units to break even?
By: tenthije - 11th June 2004 at 21:47
The logistics are indeed mind-boggling, but the same goes for any plane. The 747 has the same logistic mess. There too parts come from all over the world. Parts ranging in size from nuts and bolts to complete tails and engines.
As for the “complicated nature of waiting for tides”, how complicated is that? The tides are easily predictable. And you may have to wait for a day, but so what? You don’t seriously think that the A380 is made using a just-in-time system like used in the automotive industry do you?
In fact, even in the much fabled automotive industry the just-in-time system has significant margins build in. I arrange shipping sea containers with car parts over the ocean. Between the time my company picks up the goods from suppliers to the moment we deliver them at Ford on the other side of the atlantic takes 25 to 30 days. A container could miss a ship and still be on time to meet the deadline. There would be (a lot of) aditional costs, but it is possible.
By: Jeanske_SN - 11th June 2004 at 21:41
Do you know the cost of an A380? I think its $550 million. I think It’s all organised very well. Of course the first 10-20 aircraft will be lossmaking, but that’s normal. Construction goes faster when experience is gained.
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June 11, 2004 at 9:28 pm