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British Airways to buy 12 A380s

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British Airways to buy 12 A380s

Old 27th Sep 2007, 06:38
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British Airways to buy 12 A380s

Announcememt from Airbus this morning
British Airways will buy 12 Airbus A380 aircraft as part of the airlines’ long term fleet modernisation. The announcement marks the first time British Airways has selected to introduce Airbus aircraft for the company’s long haul fleet. The decision vindicates Airbus’ product strategy. The A380 is a key part of the solution for sustainable growth and eco efficiency in air transportation.
The aircraft will be powered by Rolls-Royce engines.
It's been a long time coming.....

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Old 27th Sep 2007, 06:43
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Along with 24 Boeing 787s. and options for a further 7 A380s, and 18 787s.
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Old 27th Sep 2007, 06:53
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Thumbs down Duff Gen

Mmmmmm....nothing in Press Releases on EADS or Airbus web sites
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Old 27th Sep 2007, 06:56
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It was a stock exchange announcement.

See: http://www.flightglobal.com/articles...eing-787s.html
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Old 27th Sep 2007, 07:02
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The official BA announcement is here:
http://www.bashares.com/phoenix.zhtm...162&highlight=
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Old 27th Sep 2007, 07:11
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Email sent out to all staff this morning confirming this.
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Old 27th Sep 2007, 07:19
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Quite right T-Rotor - I should have mentioned the Boeings as well. I just thought the Airbus order was a tad more surprising.

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Old 27th Sep 2007, 07:43
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Does this make the 747-8 a 'one airline' airliner I wonder? Pointedly no reference to it in the above article and Press Release below:

BA PRESS RELEASE

British Airways has today placed an order for 12 Airbus A380 and 24 Boeing 787 aircraft with options for a further seven Airbus A380s and18 Boeing 787s. Both aircraft types will be powered by Rolls-Royce engines.

The new aircraft will replace 34 of the airline's longhaul fleet and will be delivered between 2010 and 2014. The order, including options, will give the airline the ability to grow its capacity by up to four per cent per year and the flexibility to tailor its future capacity growth in line with market conditions.

The aircraft will be greener, quieter and more fuel efficient with significantly lower carbon dioxide emissions and reduced impact on local air quality. This was a key consideration in the order.

Willie Walsh, British Airways' chief executive, said: "This is an exciting day for British Airways with our largest fleet order since 1998. It's great news for our business, our customers and the environment.

"These aircraft set the gold standard when it comes to environmental performance in the key areas of CO2 emissions, local air quality and noise. They will contribute significantly to our target of improving fuel efficiency by 25 per cent between 2005 and 2025.

"They are also much quieter than their predecessors, which is of vital importance at Heathrow. Both the A380 and B787 are rated as producing a quarter of the noise level of the B747-400.

"These new aircraft will continue our commitment to deliver the best travel experience to our customers. This order builds upon our recent investment in improving the customer experience through Terminal 5, the new Club World cabin, inflight entertainment system and ba.com."

The new aircraft types will enable the airline to strengthen further its network strategy, complementing each other in the longhaul fleet. The A380 will be used to provide more capacity for the airline's key high-density markets and maximise use of scarce Heathrow slots. The B787 will be used to start new routes and increase frequencies in existing markets.


Both aircraft bring significant economic benefits with lower costs per seat. They are both long range aircraft and bring more flexibility in to the fleet as, unlike the B767 that they replace, they can be flown across the airline's network.

British Airways will continue to consider the most suitable aircraft to replace its remaining B747-400 aircraft and is examining the B787-10, B777-300 ER and A350XWB.

The airline has arranged for a group of banks to provide $1.5 billion of debt financing to cover all of the airline's firm orders to the end of 2011.


Ends
September 27, 2007 095/LG/O7


Notes to editors:
The airline will order both the B787-8 and B787-9.
The new aircraft will replace 20 of the airline's B747-400s and its14 longhaul B767 fleet.

The A380s will be powered by Rolls-Royce Trent 900 engines and the B787s will be powered by Rolls-Royce Trent 1000 engines. The engine order includes a lifetime maintenance contract.

In terms of CO2 emissions per seat, the A380's performance will be 17 per cent cleaner than the Boeing 747-400's, and the B787's performance 30 per cent cleaner than the B767's.

On the noise rating system at Heathrow, the A380 and the B787 are classed as QC 0.5 on arrival compared to QC2 for the B747-4. (That means they are rated as producing 25 per cent of a 747-400's noise level.)

In terms of NOx emissions, an A380 produces 10 per cent less than a B747-400, and a B787 produces 46 per cent less than a B767.

The total list price for the firm orders is US$8.2 billion for the airframe and engines.

The airline currently operates 114 longhaul aircraft - 57 B747-400, 43 B777s and 14
B 767s.

A webcast of British Airways' conference call to city analysts can be accessed via the internet www.bashares.com at 3pm.

This document is the summary financial statement for the year ended March 31, 2007 of British Airways Plc, whose details are above. Certain statements included in this edition of Investor may be forward-looking and may involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements include, without limitation,
projections relating to results of operations and financial conditions and the company's plans and objectives for future operations, including, without limitation, discussions of the company's business and financing plans, expected future revenues and expenditures and divestments. All forward-looking statements in this report are based upon information known to the company on the date of this report. The company
undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. It is not reasonably possible to itemise all of the many factors and specific events that could cause the company's forward-looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the
global economy. Fuller information on some of the factors which could result in a material difference is available in the company's Annual Report and Accounts for the year ended March 31, 2007, which is available on www.bashareholders.com.
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Old 27th Sep 2007, 08:14
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FROM: Willie Walsh, Chief Executive

TO: All mail users


We have today placed an order for 12 Airbus A380 aircraft and 24 Boeing 787 aircraft with options for a further seven Airbus A380s and 18 Boeing 787s.

Environmental factors were a key consideration in our order, the largest since 1998. The aircraft we have selected are greener and quieter, with both the A380 and B787 rated as producing a quarter of the noise level of the B747-400.

They are also more fuel efficient with significantly lower carbon dioxide emissions and reduced impact on local air quality. They will contribute significantly to our target of improving fuel efficiency by 25 per cent between 2005 and 2025.

In terms of CO2 emissions per seat, the A380’s performance will be 17 per cent cleaner than the Boeing 747-400’s, and the B787’s performance 30 per cent cleaner than the B767’s. In terms of NOx emissions, an A380 produces 10 per cent less than a B747-400, and a B787 produces 46 per cent less than a B767.

At the same time we have announced that Rolls-Royce engines will power both aircraft types. The A380s will be powered by Rolls-Royce Trent 900 engines and the B787s will be powered by Rolls-Royce Trent 1000 engines. The engine order includes a lifetime maintenance contract.

The aircraft we have ordered will replace 34 of our longhaul fleet - 20 B747-400s and 14 longhaul B767s - and will be delivered between 2010 and 2014.

Today’s announcement reflects the considerable work we have undertaken in recent years to strengthen our cost base, resolving the NAPS pension deficit, reducing debt, returning to an investment grade credit rating and making significant progress towards our goal of a 10 per cent operating margin.

Modernising our fleet also demonstrates our on-going commitment to providing the best travel experience possible. We have renewed our award-winning Club World cabin, introduced a new inflight entertainment system and continue to make improvements to ba.com. Next year we will have the best airport experience in the world with the opening of Terminal 5 and within a few years we will boast one of the youngest aircraft fleets in the sky.

Today’s order, including options, also gives us the ability to grow capacity by up to four per cent per year and the flexibility to tailor future capacity growth in line with market conditions.

The A380 will be used to provide more capacity for the airline’s key high-density markets and maximise use of scarce Heathrow slots. The B787 will be used to start new routes and increase frequencies in existing markets.

Following today’s order we are continuing to consider the most suitable aircraft to replace our remaining B747-400 aircraft and are examining the B787-10, B777-300 ER and A350XWB.
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Old 27th Sep 2007, 08:59
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Memo from WW to the BA PR department :

"Prepare a Press Release about our new aircraft order.

Opening paragraph about the order.
Three paragraphs full of green waffle.
One paragraph about the UK content, especially any bits made in marginal constituencies like Derby.
One paragraph for The City saying how brilliant we are at finance.
One paragraph about how we provide the best experience for pax (ha-ha). (DON'T mention the baggage !)
Couple of paragraphs at the end for the staff about aircraft usage.

Bang it out ready for peak viewing time on BBC Breakfast on Thursday.

Make it look good."

Last edited by WHBM; 27th Sep 2007 at 10:21.
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Old 27th Sep 2007, 09:06
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I just thought the Airbus order was a tad more surprising.
I don't think it was surprising, even if it were not a thread started here a few days ago.

Given that their hub is congested beyond imagination and several prime routes have multiple 744s each day, that would be more than sufficient to start the ball rolling.

Anyway, this thread can now join the four dozen other A380 threads in the Spectators Balcony.
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Old 27th Sep 2007, 09:26
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Bit of a blow to the 747-8i is it?
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Old 27th Sep 2007, 09:27
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paxboy

I agree that, in a logical world, it would not be at all surprising. It certainly seems to make sense, if a bit belatedly.

My surprise was because of what I have perceived over many years as BA's lack of enthusiasm for Airbus products in general, and long haul products in particular.

I wonder if this is a turning point for the A380.....

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Old 27th Sep 2007, 09:37
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Does this make the 747-8 a 'one airline' airliner I wonder? Pointedly no reference to it in the above article and Press

The B747-8I (Pax) is a spoiler by Boeing to destroy Airbus's pricing power on the A380. All Boeing need to do is offer the B747-8I at stupidly low prices to force Airbus to match that price on the A380. Thus Airbus make no profits from the project, their ROI is destroyed and their cash income flow is degraded, making it difficult for them to finance new projects. Boeing's own (relatively low) project costs for the B747-8 will be covered by the freigher versions they sell, leaving Airbus having spent north of $10 billion on the SuperJumbo and a difficult job of earning any return.

Lufthansa allegedly paid circa $80million a piece for their B747-8I's (the price of an A330) and Steven Udvar-Hazy of ILFC told Boeing they wouldn't sell any B747-8I's unless they offered them at an eye-wateringly low price.

In a duopoly, you don't always have to sell your product to make life difficult for the other guy, especially if he's just bet the company.
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Old 27th Sep 2007, 09:49
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But if Boeing is pricing the Pax-747-8 like A330s shouldn't they sell more of them now? But they don't.
My theory: Like the 747-8F killed the A380F the A380Pax kills the 747-8Pax.
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Old 27th Sep 2007, 09:51
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This will be only the first order for the A380. You can expect a follow-on and an eventual A380 market in BA for in excess of 35, along with a large fleet of B777 and retiring 747-400, with limited use of B787 on thin medium/long routes much as the B767 does now. But that does it, there is no room for another type. Is it the turning point for the A380? No- it is on a long steady climb. The eventual market for it will be 1000+ up to 1500. It will be the new premiere fleet for large airlines (to show they are big and have arrived). Therefore multiply average fleets of at least 20 by the number of airlines that will have to have them, and you can arrive at a reasonable assessment. It will be a winner because it has no long term competition in the capacity stakes. It has had a difficult gestation, but show me a large aircraft program that hasn't! It will not be long before the stretched A380 is announced- just look at that design, it is begging for it.
Frankly I am surprised at the shere short sightedness of the number here who have denigrated it and assumed there was no room for it in the future, and predicted failure. I have seen it all before with the original 747 when overnight doubling of capacity was looked on as ridiculous. People then couldn't envisage the effect it would have. It nearly destroyed Boeing, then went on to become an amazing money spinner. I like the 747, I flew 3 models over 18 years, but great though it is, it is not the equipment for the next 40-50 years too. That would take it up to 80 years since that shape hit the sky!

Last edited by Rainboe; 30th Sep 2007 at 19:01.
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Old 27th Sep 2007, 10:03
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I think it is indeed a turning point for the A380, and the beginning of the end for the B747-8.

For example, on London-Hong Kong Cathay will have been looking to see what BA are going to do. Now BA have confirmed they will go for the A380 (and Cathay will be able to work out that the 12 ordered will include the Hong Kong route) then they will feel they need the A380 as well to compete effectively.

Similar approach elsewhere. South African may not have much funding currently available, but if they can't compete with BA they probably feel they are finished on the London route. Japan Air Lines are probably having a long think this morning as well.

BA have no need for an aircraft fleet sized between the B777-300 and the A380, let alone one whose basic design concepts are in the 1960s, so it does seem the end of the B747-8 is closer. What on earth possessed Lufthansa to buy them ?
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Old 27th Sep 2007, 10:07
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A fantastic deal? You can bet BA got a similar, or better deal as well, on all the equipment. They are fantastic on bargaining. That's why it took so long!
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Old 27th Sep 2007, 10:51
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The A380 will be used to provide more capacity for the airline's key high-density markets and maximise use of scarce Heathrow slots.
Which routes are they talking about? The Far East ones?
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Old 27th Sep 2007, 10:56
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But if Boeing is pricing the Pax-747-8 like A330s shouldn't they sell more of them now? But they don't.
Unfortunately the operating costs for a twin engine like the 777 or the 330, especialy if they have comparable ranges, will keep most airlines from buying more 747's.

I'm still wondering if any of the US airlines will ever order any more of these 4 engine beasts.
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