Here is from the man himself !!
More from the interview with Airbus sales chief
Airbus has a depth of experience and talent. We are producing more than one airplane a month in the single-aisle and up to seven a month in wide-bodies. We’re finally getting our act together on the A380. We’re about to have an industrial launch, I trust, on the A350-XWB, which required a quick redesign.
“The survivability of Airbus is not in doubt. It’s generating billions of dollars in cash and revenue and profits…. It’s not as bad as it looks.”
On the A380 production delays:
“We have a way forward. … We leave a lot of these customers speechless when we try to explain what happened and why it happened. But after all the yelling and screaming, people say, it looks like you’ve finally got it under control.
“With the exception of Fred Smith [chief executive of FedEx], most are staying with the program. … I believe Emirates will stay with us. I’m not getting any indication right now that they are seriously looking at canceling their order.”
On whether the A350 will primarily compete against the 787 or the 777, and on its sales prospects:
“It’s going to be both.
“[The A350-1000 is] an airplane with the range of the 777-300ER, about 15 fewer seats, and about 25 to 30 percent better cash operating costs per seat.
“Granted, you’ve got to wait a few extra years, but you get better performance and better economics than Boeing has on the table right now.
“I’ve got 100 orders already for the A350. So far, I’m not finding anybody who wants to cancel their order.”
On using composites in the A350:
“We’re talking in a range of 50 percent [composites] by weight, similar to what Boeing is doing [in the 787].
“The one thing we’re not looking at, at all, is Boeing’s concept of doing this male mold where you wrap the fabric around it and have this one piece coming off the line. Our engineering staff are pretty convinced that is not at all the way to go.
“The customers don’t seem to care that much, as long as the airplane has the performance, the economics and the reparability. And that’s where composites gets people worried a bit, on the reparability. They ask, how are we going to repair it?
“Anything you see with Airbus will have composites perhaps in sections that can be removed and repaired rather easily. Whereas what Boeing is doing is this one big male mold which produces one-piece fuselages.
“Most of the world’s airlines, at least the ones I’ve been talking to, have big concerns about that.”
On the prospects of launching a freighter version of the A330:
“I would think you will see the industrial launch of an A330-200 freighter in the next few months.
“I have a few delivery positions that I’m marketing at the end of 2009 and 2010. But with everything else we’ve had on our plate, [the A330 freighter] hasn’t been at the top of the list.
“You tend to go out to see Qantas or Emirates or Singapore first, to explain what’s happening with the A380, before you go running around asking if you’d be interested in an A330 freighter for delivery in 2010.”
On his heart surgery two weeks ago, when doctors put a couple of stents in a blocked coronary artery:
“Boeing’s market share may have had something to do with it. [a joke]“I’ve had better years.
“I’ve been told if I don’t want to have more blockages in my heart, I ought to slow down a little bit. I did spend three nights on airplanes flying out to Australia. Unfortunately for me, that was just before I had the heart surgery.
I’m still trying to get out to meet the customers. But I guess as you get older, you slow down a bit.”
On Boeing’s strong performance and the 787:
“On the industrial side, Boeing has been doing something right.
“And they’ve clearly got a leg up on us on the 787. We didn’t see it coming. We didn’t know the level of technology that they had.”
On the 787 sales lead:
If that were a market for 1,000 airplanes, and we lost 400, that would be devastating. If it’s a market for 6,000 airplanes, which we think it can be over a 20-year period, especially when you start looking up to the A350-1000 [which competes against the 777], then you’ve got a situation where the first 400 lost are extremely disappointing but not critical.”
On the schedule for new single-aisle jet-development program to replace the A320 and 737 families:
“Boeing has much more of a need to look at single aisle than we do.
“In all my travels around the industry, I get questions about ‘When I can get A320 delivery positions?’, not ‘When are you coming out with an updated version?’
“We got caught napping on the 787. Don’t expect we’re going to fall into that trap twice. We’re watching what the level of technology is. … A whole new generation of engines has to be developed.”
On Airbus’ gangbusters production:
“We’re taking the production up to 34 a month [on the A320 narrow-body jet family]. We’re looking at even going higher. No one’s ever done that before.
“You can say it’s been the best of years, it’s been the worst of years. In 22 years at Airbus, I don’t think we’ve had this big a backlog with this level of production.”
On this year’s race for orders, which at the end of October stood at 788 for Boeing, 508 for Airbus:
“I’m not in an order race with Boeing. Which is what you would say if you were several hundred orders behind.
“We’ve really been looking at the 40 to 60 percent market-share range. … We want a duopoly that’s stable. …
“When all is said and done, I think you’ll see Airbus sitting between 40 percent and 60 percent of the market for the next five or six years. The last five years, we were above 50 percent.
“Will we be slightly below? I don’t think it matters whether we are slightly below or slightly above.”
http://seattletimes.nwsource.com/html/businesstechnology/2003431623_leahyweb15.html
By: bring_it_on - 25th November 2006 at 05:54
Seems like the A350XWB is delayed yet again
EADS core shareholders are at odds on financing A350 XWB jet
PARIS: The question of how to finance a new long-range Airbus jet has led to a showdown between core shareholders of its parent, European Aeronautic Defense & Space, that threatens to delay a decision on the $12 billion project, people with knowledge of the discussions said Friday.
A planned Friday meeting of the EADS executive board at Airbus headquarters in Toulouse, France, was abruptly canceled late Thursday evening, these people said. The decision was made after the group’s biggest private shareholders – the German automaker DaimlerChrysler and the French conglomerate Lagardère – failed to persuade the French government, which owns 15 percent of EADS, to support a public bond issue to raise money for the A350 XWB, the radically redesigned 270-seat jet that Airbus hopes will be a competitor to the Boeing 787 “Dreamliner.”
“The private shareholders want to achieve this financing via the capital markets,” said one person who had been briefed on the situation. “But the French state objects to that. They want a capital increase.”
The French Finance Ministry has proposed an issue of new shares in EADS that would be bought up either by the government directly or by the French state-owned bank, Caisse des Dépôts & Consignations, said the person, who requested anonymity because of the political sensitivity of the issue.
“It looks as if the French are trying to use the A350 as a hostage to increase their influence” within EADS, this person said.
The French state owns its 15 percent stake in EADS through a joint holding company with Lagardère, which owns 7.5 percent. DaimlerChrysler is EADS’s largest shareholder over all, with a 22.5 percent stake, while the Spanish government owns a further 5.5 percent. A Russian state-owned bank, Vneshtorgbank, acquired a 6 percent to 7 percent stake in the group this summer but it does not hold a seat on the EADS board. Shares of EADS are also publicly traded.
A French Finance Ministry spokeswoman declined to comment on the situation Friday, but noted that the government was not represented on the EADS board.
“All decisions of this type are decided by the executive committee of EADS, of which we are not a part,” she said.
Michael Hauger, an EADS spokesman, declined to comment, as did representatives of DaimlerChrysler and Lagardère.
The French co-chief executive of EADs, Louis Gallois, who also assumed the role of Airbus chief last month, has promised investors and employees that a decision would be made on the development of the A350 by Thursday. But a prolonged tussle over the financing program could postpone a ruling until next month or beyond.
After failing to drum up more than 100 orders for the A350, Airbus went back to the drawing board this year and in July introduced the A350 XWB, which is to have a wider fuselage and is expected to make extensive use of lightweight composite materials. But the plane, which Airbus has said will begin deliveries in 2012, is already several years behind the 787, which Boeing says will enter commercial service in 2009. Boeing has already received more than 400 orders for the 787.
It was not clear which of the two A350 financing plans Gallois, a former government official and head of the French railroad, SNCF, supports. Efforts to reach him Friday were unsuccessful. Gallois has, however, been firm in his belief that the A350 is a crucial plane for Airbus.
“I believe that Airbus has to be present across the whole market and the A350 is in the middle of the market,” Gallois said in a French radio interview in October, adding that midsize planes like the A350 and the 787 would soon represent about 40 percent of the commercial aircraft market. Airbus in the past week forecast demand for more than 5,000 midsize planes between now and 2025.
Any effort by Paris to assert more control over EADS is likely to be met with staunch resistance from the German government, though Berlin does not itself own any part of EADS.
France owes its EADS holding to the fact that it was a partial owner of Aérospatiale Matra, the Lagardère unit that was folded into EADS when the company was created six years ago. The German side accepted the large French shareholding reluctantly. EADS’s German co-chairman, Manfred Bischoff, once described the concession as “the toad that we had to swallow” to create EADS.After the EADS management crisis this summer set off by delivery delays to the A380 superjumbo jet, Paris signaled that it wanted to revisit a 2000 shareholder pact, which banned the French state from having a direct role in the group’s management.
“Some people consider today that this pact doesn’t give enough power to the state because I remind you that in this pact it was the industrial shareholders, Lagardère and DaimlerChrysler, who assumed operational control,” the French finance minister, Thierry Breton, said in June.
The power struggle is taking place as Berlin is trying to broker a deal in which several major German banks would buy a stake in EADS while DaimlerChrysler reduced its holding in the company by 7.5 percentage points to 15 percent.
The German government is eager to keep the shares in German hands as a counterweight to French interests.
Separately, the Paris prosecutor’s office confirmed Friday that it had opened a criminal investigation into whether top EADS managers, including the company’s former co- chief executive, Noël Forgeard, were privy to inside information when they sold company shares in March.An investigating judge was expected to be appointed in the coming days to look into the allegations, a court spokeswoman said.
The inquiry follows separate investigations begun in the summer by market regulators in France, Germany and the Netherlands.
http://www.iht.com/articles/2006/11/24/business/eads.php?page=2
Board approval of Airbus A350XWB launch delayed as EADS shareholder funding concerns dominate
Shareholder concerns over the funding of the Airbus A350XWB programme has meant Airbus parent EADS has reportedly cancelled a board meeting scheduled for today.
The meeting, which was scheduled to take place in Toulouse to decide on the industrial launch of the A350XWB, was cancelled at the last minute yesterday evening, reports French business daily Les Echos.
An employee of EADS shareholder Lagardere confirms the meeting has been cancelled, but was unable to immediately give further details. DaimlerChrysler declined to comment, while EADS could not immediately be reached.
Citing industry sources, the report claims the reason for the cancellation is a lack of agreement on the €9-10 billion ($12-13 billion) needed to fund the project among EADS shareholders DaimlerChrysler, Lagardere and the French State.
This is in part due to France’s reluctance to provide the project with repayable finance, which could further aggravate the ongoing US dispute over launch aid. France and Germany are also awaiting guarantees on Airbus’ turnaround plan, says the report.
Possible solutions include the introduction of new Airbus shareholders, joint ventures with industry partners, turning to the financial markets or a combination of these measures, adds Les Echos.
By: andrewm - 20th November 2006 at 14:23
Can everyone posting in this thread make sure it stays on topic or it will be locked. No negative comments towards other members will be tolerated.
By: bring_it_on - 20th November 2006 at 13:10
Was the remark about airlines, airports or airplane manufacturers? Or all three combined?
Airlines!!! Infact this was his quote –
As of 1992, in fact—though the picture would have improved since then—the money that had been made since the dawn of aviation by all of this country’s airline companies was zero. Absolutely zero.
Warren Buffett, billionaire investor, interview 1999
By: chornedsnorkack - 20th November 2006 at 12:51
W. Buffet once said that the Airlines (all commercial airlines combined) have made Absolutely “ZERO” profit since the advent of commercial aviation to the mid 90’s ! Does this mean that boeing and airbus also dont make money?
Was the remark about airlines, airports or airplane manufacturers? Or all three combined?
By: Bmused55 - 20th November 2006 at 11:45
bring-it-on,
‘bashing’ leahy as an employee of airbus is a bash towards airbus. Have senior management ever censored his comments ?
Am sure pleanty of boeing officials have made equally ‘foot in mouth’ comments yet seem to go unnoticed/ignored here.
Continued anti airbus / boeing posts are very immature these days. (back on the ignore list for someone)
I don’t know whats more immature.
The “supposed” bashing (Which none of the Moderators can see!) or your persistence in attempting to muddle our words and blacken my name.
Put me on your ignore list, I do not care. MAybe we’ll get some peace and quiet. But I have not bashed Airbus here, and thats fact. If I had, the Mods would have been down on me like a ton of bricks. I stated my opinion on Leahys typical ill thought out comments against Boeing. Nothing more
I will not stand for your accusations any longer. Now please, drop it and go somewhere else or start talking on topic.
By: bring_it_on - 20th November 2006 at 11:32
How about Phil Conduit ‘I am innocent’
And that had something to do with Airbus ? Phil condit (like many other rotten execs ) was someone who was much much worst then Leahy . I dont have any problems calling Condit an A$$%$%% but that in no way meaning that I also call boeing the same . You have to sort out indivigual people from the company as a whole . I repeat Leahy is great at selling Aircrafts and for that I would always have him as My head of sales if I was at airbus however he is a loud mouth (typical Queens salesman) and has very little legitimacy (in my mind) when it comes to talking about the “OTHER COMPANIES PRODUCT” . Just look at some of his views on the dreamliner –
Unless [Boeing] have discovered some new law of physics or some new
manufacturing process that nobody in the world has ever heard of —
and we know they have not — then they either will be sub-optimal, in
which case they will make an airplane and it will cost them a fortune
to do it, or they will come back toward the best engineering and
manufacturing standards and build a plane with less than 30 percent
composites.” — Seattle Post-Intelligencer, 19-Jul-04
“You will see a significant proportion of customers that Boeing
thought that they might have for the 7E7 now switching to the A350
because of performance of the aircraft.” — Reuters, 11-Dec-04
. “The ‘dream machine’ or whatever it’s called? I couldn’t have hoped for a better name, being their competitor. It’s a PR man’s dream, but an engineer’s nightmare … It’s purely a PR man’s dream. I think the travelling public knows that, too, which is probably why they voted [for the name ‘Dreamliner’]. In fact, it seems most of the people at Airbus who voted picked the ‘Dreamliner’. Some of the traditionalists voted for ‘Stratoclimber’, which would have been a better name.”
It is a bit like a bunch of guys in the 1960s in Detroit, saying: ‘We can hold the Japanese off for a few more years. We’ve got to get those tailfins just a little bit higher, get a little bit more chrome, some really dynamite headlights, and the Japanese are going to be history, because everyone’s going to want our new Cadillacs or whatever. And they went right off the cliff doing it.”
“[The 7E7] is more a marketing tool than an engineering reality … It’s guerilla marketing. It’s an attempt to say, ‘don’t buy my competitor’s product now, just sit around until I think of something else to do’.”
He’s been dead wrong on the 7e7 –> 787 ! Why should anyone beleive hime now? Its one thing to talk about your own aircraft but to turn around and shoot your mouth at someone else’s aircraft specially when you have been proven wrong (over a very short period of time) is not wise !!
By: paulc - 20th November 2006 at 11:22
How about Phil Conduit ‘I am innocent’ 🙂
By: bring_it_on - 20th November 2006 at 11:20
However, what does seem a risk for an airline is if Boeing does deliver the plane
The risks are no different for Airbus,Embraier,bombradier and others !! Airbus’s venture of 60 A319’s with SKYBUS is the same .
Pan Am and Braniff, among many others, seem to have lost a lot of money flying empty 747-s…
W. Buffet once said that the Airlines (all commercial airlines combined) have made Absolutely “ZERO” profit since the advent of commercial aviation to the mid 90’s ! Does this mean that boeing and airbus also dont make money?
The 787 isnt a VLA . It is a mid sized carrier which due to its economy (lower CASM which competes with jets much larger then it) opens routes which were previously not economical . If some airline is trying to substitute the 787 for a 737 then it will have trouble but for most international routes the 787 shouldnt be that hard to fill up. Now the 380 and 747-8 might be another story.
By: bring_it_on - 20th November 2006 at 11:16
They had plans for 787, sure.
They had dreams of buying them but could never put forward the money to actually place an order . Had they put down money and found financers willing to fund their dreamliner purchase then they would have put into effect their buisness plans for the fleet of 787’s . Putting in motion a buisness plan before the CARRIER of the buisness plan isnt even a GUARANTEE is something that isnt sensible . I cant speak of them but boeing doesnt care since no order ever took place.
‘bashing’ leahy as an employee of airbus is a bash towards airbus. Have senior management ever censored his comments ?
No!!
Am sure pleanty of boeing officials have made equally ‘foot in mouth’ comments yet seem to go unnoticed/ignored here.
Please provide some from the recent past !!
Continued anti airbus / boeing posts are very immature these days.
If someone is well known to shoot his/her mouth off and has a past history of making dubious claims (AGAINST OTHER’S products rather then his own) then bashing him isnt the same as bashing Airbus IMO . Airbus is much bigger then LEAHY or any one person . Leahy is a big mouth and some of his comments (like the onse I posted and dozen others ) are just meant to malign boeing , and have been proven wrong very quick time . I think He has become a bit smarter now and the way Boeing handeled A380 delays and the way People like Mululy,Carson,Bair and Baseller commented does set a high example which Leahy should also try to acheive . He has a typical Queens swagger !!
By: paulc - 20th November 2006 at 10:20
bring-it-on,
‘bashing’ leahy as an employee of airbus is a bash towards airbus. Have senior management ever censored his comments ?
Am sure pleanty of boeing officials have made equally ‘foot in mouth’ comments yet seem to go unnoticed/ignored here.
Continued anti airbus / boeing posts are very immature these days. (back on the ignore list for someone)
By: chornedsnorkack - 20th November 2006 at 08:24
Well that is not Boeing’s fault .This is a matter for Primaris’s IT department to sort out as to why it hasnt updated its site maybe it also says something about their state of affairs 😉
Why would they loose anything? They will simply get a refund of their deposits.
You need to think about what you just wrote there !! Take a moment step back and just read those lines 🙂
If an airline managment plans out future strategy based on aircraft it has not ordered then there is something seriously wrong with that airline!!
Well, was Primaris future strategy based on 787?
They had plans for 787, sure.
However, what does seem a risk for an airline is if Boeing does deliver the plane, and they cannot find a use for it. Pan Am and Braniff, among many others, seem to have lost a lot of money flying empty 747-s…
By: bring_it_on - 17th November 2006 at 20:34
I think Mr. Leahy needs to go to bangkok
By: bring_it_on - 17th November 2006 at 15:43
They reserved 20 slots from 2008 or 2009. And then they did not firm the orders. Boeing has announced that the Primaris slots have expired and been resold since June 2006 or so… and presumably has refunded the deposits of Primaris… while Primaris hasn´t bothered to update their webpage and still claims they would operate 787 starting in 2009.
Well that is not Boeing’s fault .This is a matter for Primaris’s IT department to sort out as to why it hasnt updated its site maybe it also says something about their state of affairs 😉
Does not look like they lost a lot by reserving the 787 slots
Why would they loose anything? They will simply get a refund of their deposits.
But how do the consequences compare with the revenues of the airline in case no order had been made?
You need to think about what you just wrote there !! Take a moment step back and just read those lines 🙂
If an airline managment plans out future strategy based on aircraft it has not ordered then there is something seriously wrong with that airline!!
What happens if Northwest shuts down before the delivery of 787, but after first instalments of the firm order have been paid?
Those are legal matters and our dealt with legally in every industry!!
I’m not sure anyone here could accurately answer that question.
Unless we have a bankruptsy lawyer amongst our ranks…
Does Boeing owe the firm order initial installments to NWA?
Northwest hasnt cancelled their order so why would boeing owe them anything? You must understand that these are legal matters and outside the realm of commercial aviation . I would recomend contacting a legal atorney who deals with corporate law !!
By: chornedsnorkack - 17th November 2006 at 15:15
No, Boeing owes no money to NWA
Does Boeing owe the firm order initial installments to NWA?
By: Bmused55 - 17th November 2006 at 14:35
So, I understand that NWA is a creditor of Boeing – but Boeing is not, and is not planning to become, a creditor of NWA?
No, Boeing owes no money to NWA and NWA, as far as I know, do not owe any money to Boeing, yet.
By: chornedsnorkack - 17th November 2006 at 14:25
I think we’re now venturing into the legal realm.
I’m not sure anyone here could accurately answer that question.
But FWIW, NWA are not bankrupt. They are in Chapter 11 Bankruptcy protection. A clause that helps hold off their creditors to give them a chance to sort the finances out. (simplified, but essentialy the gist)
So, I understand that NWA is a creditor of Boeing – but Boeing is not, and is not planning to become, a creditor of NWA?
By: Bmused55 - 17th November 2006 at 14:07
For the airline.
For Boeing, if 20 early and hot slots are reserved to a speculative venture because it was early to jump on a bandwagon, this means Boeing cannot sell the same slots to a more cautious, respectable and profitable customer.
BTW, the list of 787 customers includes Northwest.
Northwest is bankrupt.
If Northwest pays the agreed price for the 787-s in full, receives them and then collapses, then the planes would be clearly Northwest assets, and the creditors would be able to auction them off secondhand and share the proceeds.
What happens if Northwest shuts down before the delivery of 787, but after first instalments of the firm order have been paid?
I think we’re now venturing into the legal realm.
I’m not sure anyone here could accurately answer that question.
But FWIW, NWA are not bankrupt. They are in Chapter 11 Bankruptcy protection. A clause that helps hold off their creditors to give them a chance to sort the finances out. (simplified, but essentialy the gist)
But RE: the primaris slots. Boeing doesn’t seem to have missed out. They’ve used those slots already for more prestigious customers. If anything Boeing benefitted because once the reservations timed out, Boeing were able to offer early slots to whoever was at the negotiating table at the time. No doubt that won them an order.
By: chornedsnorkack - 17th November 2006 at 14:01
Theres no halm in reserving slots, just in case.
For the airline.
For Boeing, if 20 early and hot slots are reserved to a speculative venture because it was early to jump on a bandwagon, this means Boeing cannot sell the same slots to a more cautious, respectable and profitable customer.
BTW, the list of 787 customers includes Northwest.
Northwest is bankrupt.
If Northwest pays the agreed price for the 787-s in full, receives them and then collapses, then the planes would be clearly Northwest assets, and the creditors would be able to auction them off secondhand and share the proceeds.
What happens if Northwest shuts down before the delivery of 787, but after first instalments of the firm order have been paid?
By: Bmused55 - 17th November 2006 at 13:49
For example, see Primaris:
They reserved 20 slots from 2008 or 2009. And then they did not firm the orders. Boeing has announced that the Primaris slots have expired and been resold since June 2006 or so… and presumably has refunded the deposits of Primaris… while Primaris hasn´t bothered to update their webpage and still claims they would operate 787 starting in 2009.
Primaris continues owning 2 secondhand 757-s, operating one for charter and leasing the other. Does not look like they lost a lot by reserving the 787 slots.
Precisely.
I think Primaris are concentrating on making ends meet.
Perhaps one day they will operate 787s. The certainly jumped onto the boat to reserved soem good slots for themselves. Theres no halm in reserving slots, just in case.
By: chornedsnorkack - 17th November 2006 at 13:41
If the airline has made no firm order, then anything paid are typically refundable deposits. And if they haven’t ordered a product, they’ve not made plans for it. It would be folly to base a strategy on the delivery of aircraft you are not ordering. Therefore if they walk away, there are no financial consequences for either party.
For example, see Primaris:
They reserved 20 slots from 2008 or 2009. And then they did not firm the orders. Boeing has announced that the Primaris slots have expired and been resold since June 2006 or so… and presumably has refunded the deposits of Primaris… while Primaris hasn´t bothered to update their webpage and still claims they would operate 787 starting in 2009.
Primaris continues owning 2 secondhand 757-s, operating one for charter and leasing the other. Does not look like they lost a lot by reserving the 787 slots.
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November 15, 2006 at 11:24 am