Emirates in large Airbus order

But they need to roll it out or will they take-off out of the hangar?

Thats why i said start of Ground testing leading upto the First Flight , i doubt their would a big event (like the official rollout) when it comes out complete .

Regarding being optimistic , boeing’s position on the 787 would be clear in a few days when the new head of the program gives his assesment, i have worked with him , he is a good leader.

They wont roll it out again 😉 , i guess the tests should start on the ground in march or maybe a little earlier with first flight a month or so after that.

But they need to roll it out or will they take-off out of the hangar?
Boeing said “end of first quarter”, which I would guess is conservative. See how much I trust Boeing, I considered the later three of the total four earlier FF dates (Aug07, Aug/Sep07, Oct07, Nov/Dec07) as conservative. Guess the pilots just don’t like to fly in rainy weather.

That reminds me – does anyone know when the 787 rollout (the real one) is expected?

They wont roll it out again 😉 , i guess the tests should start on the ground in march or maybe a little earlier with first flight a month or so after that.

Not optimistic at all , airbus only needs 50-60 orders per year uptil Rollout to beat that and they can better that until we hit a downturn. The problem is airbus’s Launch to Rollout time is almost double that of boeing .

That reminds me – does anyone know when the 787 rollout (the real one) is expected?

That’s an optimistic statement! ..can’t see it myself

Not optimistic at all , airbus only needs 50-60 orders per year uptil Rollout to beat that and they can better that until we hit a downturn. The problem is airbus’s Launch to Rollout time is almost double that of boeing .

Quite a while until the first A350XWB rolls out – the way things are going, it might even have more orders than did the Plastic Pig from Seattle at rollout time! 😀

A

That’s an optimistic statement! ..can’t see it myself

You think they will stabilise? (and actually come back down in price?)

Any particular reasons? 🙂

Yes. The oil prices already factored in many risks and issues, like growing demand, long term bottleneck in production and political risks (Iraq, Iran, Venezuela, …). The current surge is the result of speculation to some extent. Winter is nearing on the Northern hemisphere … the usual suspects. It will come back down again, but of course we will not have it at 30USD a barrel. I recently learned that German government based their growth prognosis on 80 USD/barrel, I guess that this is an agreed average for the coming year if no major crisis erupts.

until in the near future oil prices stabilize a bit(they won’t get back to 30 bucks, but 70 USD is possible).

You think they will stabilise? (and actually come back down in price?)

Any particular reasons? 🙂

More devastating would be a battle between the airlines, that lose money in order to get market share. Very common occurance in the American market, less frequent in the rest of the world

Again, very true.

Often shareholders and management are too stupid to see beyond market share. They cannot see a bigger picture, in that sometimes it is better to lose some share now (and remain profitable) so that you can gain in the future when conditions improve.

The American system of filing for bankruptcy also has to be called into question I think.

even have more orders than did the Plastic Pig from Seattle at rollout time!

The rollout time is way different , airbus will be rolling out the first vareint in 2012 or 2013 with delivery later that year that is plenty of time (6 years still) whereas boeing basically had a 4 year window between launch to eis. Having said that if airbus reach 700 orders plus the year of first delivery i would be very happy ..

Quite a while until the first A350XWB rolls out – the way things are going, it might even have more orders than did the Plastic Pig from Seattle at rollout time! 😀

A

Very true – airlines have been forced to become much more efficient now. There was an article on the bbc the other day about the fuel price pressure forcing United to ground aircraft. Here is cnn on it.

More worryingly, there have been rumours that airlines have been cutting down on the reserve allocation (below legal limits) to save a bit.

The biggest problem I see is that the growing costs are actually not transferred to the customers. May sound strange, but it would be healthy for the industry if the costs for fuel are feeded to the customers directly. If so, demand will get lower, maybe we even will have a small decrease in overall traffic growth. But that would still be sutsainable by the industry, airlines and likewise manufacturers.
More devastating would be a battle between the airlines, that lose money in order to get market share. Very common occurance in the American market, less frequent in the rest of the world (I guess due to more restrictive market conditions in the rest of the world).
Boeing went out of the 90s with close to 90% market share and now stands somewhere at 50%. One reason was the downfall of the American airlines, which still did not recover completely.

An increase in prices and a small reduction in capacity in order to maintain a high load factor and low operational costs would be the best to bridge until in the near future oil prices stabilize a bit(they won’t get back to 30 bucks, but 70 USD is possible).

My reasoning is such:
My plane ticket is 100 USD.
Using the presentation (thanks for that) I pay 17 USD for fuel.
Now fuel price increases to 38 USD.
I pay a total of 121 USD for the flight.
That is a 21% increase. That is a lot, but it is not unaffordable.

To be honest, most trips I do, I would accept it. I would pay for it. Now, I am not representative. But I think most people would afford it because they give priority to their air travel.

Correct. However, consider say a family of 4 going on a holiday.

400 USD versus 484 USD – thats getting on for a 100 dollar rise.

Businesses will still pay to fly*, but families etc may not be able to afford it.

* Improved conferencing technology may affect that in the future.

A little problem is that many other cost reserves have already been exploited by the airlines. Before 2001 booking via internet wasn’t common, load factors were low and many old aircraft were flying around. Today you hardly find anything older than a B767 at primary airlines (B747 classic, A300/310, DC10, L1011 all gone). Some older types on short routes where fuel costs are less important. Next wave will be B767 and B747-400 I guess, maybe even some A340.

Last resort is higher load factors, more hubbing. We’ll see.

Very true – airlines have been forced to become much more efficient now. There was an article on the bbc the other day about the fuel price pressure forcing United to ground aircraft. Here is cnn on it.

More worryingly, there have been rumours that airlines have been cutting down on the reserve allocation (below legal limits) to save a bit.

I disagree with that (sort of) – a small change in oil price won’t result in massive increases in fare price. But with the kind of oil price changes we are seeing, its definitely having a large effect on the DOC.

My reasoning is such:
My plane ticket is 100 USD.
Using the presentation (thanks for that) I pay 17 USD for fuel.
Now fuel price increases to 38 USD.
I pay a total of 121 USD for the flight.
That is a 21% increase. That is a lot, but it is not unaffordable.

To be honest, most trips I do, I would accept it. I would pay for it. Now, I am not representative. But I think most people would afford it because they give priority to their air travel.

A little problem is that many other cost reserves have already been exploited by the airlines. Before 2001 booking via internet wasn’t common, load factors were low and many old aircraft were flying around. Today you hardly find anything older than a B767 at primary airlines (B747 classic, A300/310, DC10, L1011 all gone). Some older types on short routes where fuel costs are less important. Next wave will be B767 and B747-400 I guess, maybe even some A340.

Last resort is higher load factors, more hubbing. We’ll see.

This is a good discussion , Good points by both kilco and schorsch..

Since the early 1980s the economic growth has maore and more decoupled from energy consumption. Anyways, productivity and energy consumption are not coupled any more, and will decouple even further.

Yes, I accept what your saying, after a certain point is reached.

But if your going from a mud hut to a house (with electric) more power is gonna be used pretty much by default.

The oil price makes some considerable percentage of the airfare, but it doesn’t dramatically rise it.

I disagree with that (sort of) – a small change in oil price won’t result in massive increases in fare price. But with the kind of oil price changes we are seeing, its definitely having a large effect on the DOC.

See Airbus data here on pg 5 & 6 ***warning pd*******

Yeah… if it stays at current prices I agree.

But, will it sit?

I don’t wanna jump on tin-hat bandwagons, but with fast growing economies over the world needing fed (oil) and oil production around the world at best… marginally improving – will prices stop increasing?

OPEC have fed us pish that the prices are currently high due to speculators buying for the future – well, if everyone knew there was a load of oil in the system (after all, its only useful to the speculator as a sell-able item), then the prices would drop. I think they are near 100% capacity as it is. What happens when they pass their oil well’s best years?

Since the early 1980s the economic growth has maore and more decoupled from energy consumption. This trend is especially true for Europe (energy demand in Germany for example has declined despite moderate growth), also true to lesser extent in the USA (while the USA still need too much energy per USD economical output), and it is not really true for economies like China or India. Reasons are various (economic enables more people to have very basic comforts, while in USA/Europe it is more the thing with replacing a desktop with a laptop; also, lots of energy-intensive production moved to China, however, that doesn’t make too much).

Anyways, productivity and energy consumption are not coupled any more, and will decouple even further. The oil price makes some considerable percentage of the airfare, but it doesn’t dramatically rise it. Other activities like driving a car are much more bound to the oil price.

In general, on the long run, economic growth will exceed the growth in energy prices. Bad years are to come when over a limited time period that isn’t true (like in the so-called oil crisis).

On thing I am quite sure in: demand for travel will continue to grow, and even with current oil prices air travel remains affordable and will become affordable for more and more people. In the late 1970s the share of fuel in overall costs soared to 40 to 50%, when it was below 25% before.

Yeah… if it stays at current prices I agree.

But, will it sit?

I don’t wanna jump on tin-hat bandwagons, but with fast growing economies over the world needing fed (oil) and oil production around the world at best… marginally improving – will prices stop increasing?

OPEC have fed us pish that the prices are currently high due to speculators buying for the future – well, if everyone knew there was a load of oil in the system (after all, its only useful to the speculator as a sell-able item), then the prices would drop. I think they are near 100% capacity as it is. What happens when they pass their oil well’s best years?

i never thought it will be a viable investment for Boeing to re-draw the aircraft in such “ultra-long” specs only to feed one customers need.

Who says that it is designed for only one customer? When boeing launched the aircract they lauched it for a category of buyers , routes which warrent high capacity but not as high as the A380 , Lower end of the VLA market if you may call it . LH has bought it because they are a big airline and can well afford 2 VLA types when both are in substantial numbers , others might have to choose between one or the other , and many which have ambitious expansion plans for the future will choose the A380 , however their still remains a niche for whom the 748 will work well . The replacement market for 744’s hasnt riped yet , we must wait and see when that happens . Even if boeing take 30% of the market (PAX) even that given that the entire 748 program has cost somewhere between 3-4 billion dollars is a good ROI . Boeing are damn close to selling 100 748’s of both varients in less then what 2 years after launch , thats pretty good if you ask me .

The key factor/buisness case for the 748 is that it provides competition to the 380 and puts pricing pressure , this virtually guarantees that airbus cannot dictate the price of the 380 (which again got a boost when the 2 year delay was announced) and therefore preventing a Monetary monopoly in the VLA segement which could then be used to subsidezed deals which are very competitive for both OEM’s such as those between the 350 and 787 or 340 and 777 . Boeing has cross subsidesed and know the effect it can have overall in improving the sales aswell as keeping margins high .

Any A380-900 depends on what additional costs it takes to develop it – if their discussions with airlines suggest something fewer than 50 will be sold then I doubt they’d develop it. Above that and we could see part of the A380 family making money…..and I’m sure I’ve seen somewhere where CX may not consider the A380-800 but go for the A380-900 as any “improved economics” of operating the 900 are greater than that for the 800. Before anyone asks for sources, I’m going to try to track it down!

The only figure I’ve seen bandied about for development was $2.5 billion. So if that is 20% of what the A380 was originally going to cost in terms of development, it might not seem unreasonable to estimate that 20% of thwe orginal breakeven figure of 270 is what the breakeven of the A380-900 would be i.e. 54.

Quite a big bunch of development costs always are due to preperation of production tooling and facilities. I think these cost are more or less zero for a -900, as the whole system is prepared.
Normally the weight increased variants come a few years after the initial variant. Airbus now has close to 3 years of test experience with A380. I guess they should at least add another 2 years of airline service (while the low number of overall airframes limits the total experience) and the arrival of the final production cycle (end ’08, beginning ’09).