chornedsnorkackW. 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?
chornedsnorkackWell 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…
chornedsnorkackNo, Boeing owes no money to NWA
Does Boeing owe the firm order initial installments to NWA?
chornedsnorkackI 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?
chornedsnorkackTheres 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?
chornedsnorkackIf 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.
chornedsnorkackThey loose out on thier buisness strategy and expansion plans. Why do you think Emirates is Sending engineers and auditors out to Tolouse and hamburg because they are going to loose a lot of money in lost revenue due to the delays. What is int he contract is only a agreeable compensation nothing more and nothing less it speaks nothing of what an airline planned to do with the jet (new routes) its market share etc etc , Just look at what Emirates would have thought of their market share and routes in 2011 with 45 A380’s in operation (thats 24700 seats every day) . Airlines loose out a lot if an aircraft is delayed or outright cancelled what they make in compensations is basically what is in relation to the price of aircraft and in no way compensates completely for the loss in revenue , loss in market share , loss in new routes , completely throwing off your buisness plans.
So, if an airline makes an order and the aircraft is then delayed or cancelled, the airline loses revenue, new routes and market share compared to revenues in case the aircraft had been delivered on schedule
But how do the consequences compare with the revenues of the airline in case no order had been made?
chornedsnorkackBoeing would pay the airlines back any monies handed over for a firm order if they cancel a project.
In other words, unless Boeing goes bankrupt and the deposits have been spent for unsuccessful development of planes, so that customers with firm orders become creditors of the bankrupt, the airlines that make firm orders are still losing nothing if the project fails. Correct?
By the by, I personally believe the 2707 was a smoke screen to throw Airbus off track.
IMO, Boeing planned the 787 some time ago and through the 2707 project they gained experience and knowledge in composites and other technologies.
What composites? I think 2707 is mostly steel – aluminum does not do well at Mach 3. Mach 2,04 of Concorde is about the maximum – Tu-144 uses more steel than Concorde does.
The 2707 was used to keep Airbus sniffing at the real intentions.
If so, the plan worked. Airbus were surprised by their level of technology when the launched the 787.
chornedsnorkackCheap but they dont offer anything substantial. You can reserve a slot but it means nothing, the money is only to hold the production slots for a few months and if you do decide to go ahead with the purchase you still have to pay the intial deposits and the agreed upon price .
Only that. Right?
For example, if Primaris reserved 20 slots in 2008, and next day Northwest or Singapore or some other airline wanted to buy the same airplanes, make a firm order and at a higher price than what was agreed between Boeing and Primaris, Boeing would have to refuse, and if Primaris did pay the initial deposits and agreed price as they fall due, Boeing would have to deliver, and not sell to some other customer for a better price.
Right?
Boeing does catalogue the 787 orders because the 787 HAS BEED LAUNCHED and airlines have placed FIRM ORDERS for it ! In case the SST (although much ahead of my time) Boeing basically got down selected (it was a fed govt. funded project) but only had COMMITMENTS for the aircraft and NOT FIRM ORDERS. The wiki article on the SST says that they had UNFILLED ORDERS for 25 aircraft ,
I think the wikipedia article on 2707 quotes 25 airlines, 115 unfilled orders.
which could mean that either those orders were still not FIRMED up but were commitment or those orders were FIRMED up but were not delivered . If the latter is the case then boeing would have (had they followed the same procedures as they do now) Showed CHANGES on accounts of cancellations in their sales sheet much like they do now with the GROSS orders and NET orders (boeing has 828 gross orders so far but NET orders are 822 on acount of 6 aircrafts cancelled or deffered) , Airbus will be doing the same thing with the 10 Fedex cancellations , they will be listed as orders for the year they were signed but listed as cancellations for this year!!
However, the Fedexes were cancelled by customer. As were the 3 787 orders.
So, if the airline cancels a firm order, they lose initial deposit, right? Boeing gets to keep the deposit and sell the whitetail aircraft or delivery slot to someone else, right?
Now, what about cancellation by Boeing? If any airlines firmed up their orders for 2707 and paid deposits, and Boeing then cancelled, did the airlines get their deposits back, or did Boeing keep the deposits?
chornedsnorkackPrimaris technically never ordered a 787 so the same SLOT booking rules apply to them.
And slots seem to be cheap.
That is irrelevent as boeing’s orders catalogue only LISTS in service aircraft therefore in that list they never had those SST orders . However the public list is only a decade or so old as I doubt they had a website back when the 2707 was up for grab;)
Does Boeing orders catalogue list 787, or does it not?
787 is not in service.
chornedsnorkackI dont know what CHEAP means in this case,but what the slots are are basically delivery dates and Batch allocations . Suppose you are an Airline CEO or fleet manager and want new widebodies . You issue RFPs to both boeing and airbus and Boeing responds with the 787 whilest airbus does so with the A350 . Both manufacterers will then give you the best suited SLOTS or batches for delivery however they will require you to deposit a sum so that you can FREEZE those in place while the rest of the negotiations are going on .
he lost the slots but got his money back.
Well, I mean, Primaris operates with 1 single 757 – I suspect secondhand? They were advertised as the first customer of 787 in North America – but look like it was slots, not first orders. 20 787-s ordered by an airline that only had 1 second-hand 757…
My point is that Primaris did not have to deposit huge sums of money as deposits, and forfeit them to cancellation fees if their plans for all-luxury airline didn´t work out…
The SST orders are not counted. Boeing’s orders page reflects only those aircrafts which have been put into service.
True, by now those orders must have been cancelled somehow.
Did the airlines like Pan Am make any deposits or firm order installments? And did they get their money back?
chornedsnorkackthe Slots are time bound ie. you make a deposit and tell boeing that we want delivery slots for say 2nd quarter 2011 . Boeing will gladly do that for you but give you a date by which you must decide and pay the First ORDER installment to FIRM those slots . If you dont firm those slots then boeing will put those slots on the market and give you the entire money back . [/url]
Thus the slots are cheap – airlines can make deposits so that other airlines cannot make firm orders for the same planes, and if the airline then finds it does not really need those planes, they get the entire deposit back. Correct?
Boeing wont disclose most of the SLOTS and the airlines that they are talking to about slots and slot positions AA is widely considered to be negotiating slot positions for close to 100 787’s but those are just rumours as boeing doesnt talk about the customers they are talking to egarding slots and aventual orders.
Ah. So, Boeing does not disclose the total number of orders, options and slots – no one knows how many Dreamliners are unavailable for sale. Right?
Now for comparison… I think Boeing 2707 prototypes were actually started, but never completed to rollout. There are mentions of about 122 commitments of some sort for 2707. Were they firm orders, options or slots?
chornedsnorkackSo, lets´s check which is correct:
– The “firm orders” of Boeing 787 – which the airline has to pay for if they want to cancel, right? – are held by 35 airlines and are for over 400 frames. Right?
– Some of the 35 also hold “options” or “slots”, which are cheap for them – they can cancel without paying, but Boeing still is not allowed to sell those planes to someone else as “firm order” – right? And those options and slots are not counted among the 400… right?
– And there are several airlines who have only options or slots, but no firm orders – not counted among 35 or 400.
– Not a single Boeing 787 airframe has been completed to roll-out. Right?
– But there are several parts of airplanes in existence which are to be assembled into actual airworthy airframe – not example or test parts. Right?
chornedsnorkackNot only that but 35 odd customers (and counting)
In which direction?
El Al – cancelled. Aeroflot – cancelled. Primaris – cancelled.
A380 has only Fedex…
chornedsnorkackHowever they love going 10 abreast on their T-7’s and I can tell you through expereince that I’d travel in a 10 abreast Economy seat of EK over a vast majority of the airlines out there operating 9 abreast with the T-7. I dont know where you bring the A-380 into the picture but Clark is on record of saying how much they love the 777 and how it is giving them better results then what boeing had promised them . Just imagine the Economies of a twin when you can have your ASM that high (with 434 seats) .
A380 comes into the picture in that way:
Emirates thinks that the width of 10 abreast in B-777 is adequate, and the ability to have a large number of seats is useful.
10 abreast B-777 is actually about as wide as 11 abreast in A-380.
Therefore, it would also suit Emirates to put 11 abreast seats in A-380.
Right?
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