A380 woes
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Not counting Soviet era Aeroflot, I don't recall other aircraft of importance near that of the A380 having such a narrow customer base. (Concorde was narrower, but...)
tdracer might correct me here, but I'm guessing the development costs of the B748 were considerably lower than the A380, given the former is a modified (albeit extensively) existing airframe versus a brand new one.
Airbus have said the A380 programme will move into the black by the end of 2015, so even if they don't get any more orders, they'll get away with it, just. Boeing will sell enough freighters (which are cheaper to make than passenger aircraft anyway) to cover their investment and probably make good money in the long run.
We talk about how hard these giants are to fill, which makes it surprising to me that Lufty, Korean and soon Transaero are going to be running both simultaneously.
Airbus have said the A380 programme will move into the black by the end of 2015, so even if they don't get any more orders, they'll get away with it, just. Boeing will sell enough freighters (which are cheaper to make than passenger aircraft anyway) to cover their investment and probably make good money in the long run.
We talk about how hard these giants are to fill, which makes it surprising to me that Lufty, Korean and soon Transaero are going to be running both simultaneously.
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So their order for 150 777x would fall into the same category?
By the same token some airlines have bought literally several hundreds of 737s and a number even have all 737 fleets. The does not make the 737 a niche product by any stretch of the imagination.
Last edited by KenV; 8th Jun 2015 at 19:54.
Una Due Ttc, I don't know what the total Boeing investment was in the 747-8/8F (and if I did I probably couldn't repeat it) - I do know it went well over budget. But I'm sure it was a small fraction of the A380 development costs. I do know that the original business case for the -8 was based on a relatively small production run, but the development cost overruns certainly increased that number significantly.
As for the A380 "moving into the black" this year, what Airbus has said is that they expect the A380 to become 'cash flow positive' in 2015 - meaning they are spending less to build each aircraft than they are selling them for. They remain far from paying off the reported $15 - $20 billion development costs.
Both Boeing and Airbus have some tough decisions coming up quickly - the long lead time for some of the 747 and A380 parts is over 30 months and both programs have significant holes in their delivery projections starting in 2018.
As for the A380 "moving into the black" this year, what Airbus has said is that they expect the A380 to become 'cash flow positive' in 2015 - meaning they are spending less to build each aircraft than they are selling them for. They remain far from paying off the reported $15 - $20 billion development costs.
Both Boeing and Airbus have some tough decisions coming up quickly - the long lead time for some of the 747 and A380 parts is over 30 months and both programs have significant holes in their delivery projections starting in 2018.
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Used aircraft coming onto the market nearly always affect prices of new aircraft and therefore, sales. It's basic market economics. The only way that is minimized is when the demand is overwhelming. The A380 was a game changer - but developed a bit early according to many. There are also those that believe if Airbus can 'hang in there', the aircraft will likely enjoy a minor resurgence down the road.
RE: Concorde - BA, in the latter years of Concorde operations was making a huge profit and she served as a standard bearer/iconic symbol for the airline. For whatever reason, Air France failed to make a profit with their Concordes.
The AF crash was caused by a series of unfortunate events and circumstances. Several BA and early Concorde development folks have been quoted as not blaming the aircraft or (specifically) the strip of metal in various documentaries and books published. Also, to clear up another factual error in this thread: the Continental engineer in Tel Aviv was cleared of all criminal charges. Does anyone else see the bitter irony (considering the history) in the story: a part installed by an American in Israel led to the deaths of a group of German citizens carried by the French?
RE: Concorde - BA, in the latter years of Concorde operations was making a huge profit and she served as a standard bearer/iconic symbol for the airline. For whatever reason, Air France failed to make a profit with their Concordes.
The AF crash was caused by a series of unfortunate events and circumstances. Several BA and early Concorde development folks have been quoted as not blaming the aircraft or (specifically) the strip of metal in various documentaries and books published. Also, to clear up another factual error in this thread: the Continental engineer in Tel Aviv was cleared of all criminal charges. Does anyone else see the bitter irony (considering the history) in the story: a part installed by an American in Israel led to the deaths of a group of German citizens carried by the French?
Silva strata,
I hope you won't mind me adding my answers to your post. It's just an easy way to deal with that number of points.
Sorry, the demise of Concorde had nothing to do with the Paris crash.
Yes it did. Concorde did not make a massive profit so the grounding after the AF crash ate into the bottom line
The truth is that many decades previously, it had only sold a handful of airframes, and only to national carriers who were obliged to take it.
Although there were hopes of a global revolution in air travel and tonnes of customers, it was accepted fairly early on that only France and UK would be likely to operate it. The two countries took the cost on for a few years, but eventually transferred costs to the airlines. They really didn't expect huge sales after the early customers pulled out.
The US disliked it for nationalistic political reasons.
True, but the operators worked round that (even cheated a bit
)
The sonic boom made it unrealistic for overland operations (the biggest market).
Might have been. But, guess what, even in the 50s when the concept was being discussed, they knew about sonic booms. That will never change. In truth the 'boom' from high altitude wasn't a huge issue. Plenty of folk here that will tell you they heard it every day without consequences. We operated supersonic in mil aircraft over the European mainland for decades as long as we were above a certain altitude.
The passenger capacity was very low.
Yep. 100. But the ticket price was huge. It was an elitist liner and the price tag reflected that. But, as you said, BA made it pay.
The range was pretty low too, and a fuel-stop defeated the object.
The airframe price and fuel burn was quite high.
Obviously. But how many jets do you know that can do Mach two all the way across the Atlantic today?
Everything you said is true. All part of the design and well known to the designers, builders and operators -and any potential customers. All those things discouraged others from buying it and you could argue that because the only operators were the France and UK placed the whole project on a more vulnerable footing. But none of those things actually killed it.
Sorry for the thread drift. I shall leave it there and let you get back to the A380. Good luck.
I hope you won't mind me adding my answers to your post. It's just an easy way to deal with that number of points.
Sorry, the demise of Concorde had nothing to do with the Paris crash.
Yes it did. Concorde did not make a massive profit so the grounding after the AF crash ate into the bottom line
The truth is that many decades previously, it had only sold a handful of airframes, and only to national carriers who were obliged to take it.
Although there were hopes of a global revolution in air travel and tonnes of customers, it was accepted fairly early on that only France and UK would be likely to operate it. The two countries took the cost on for a few years, but eventually transferred costs to the airlines. They really didn't expect huge sales after the early customers pulled out.
The US disliked it for nationalistic political reasons.
True, but the operators worked round that (even cheated a bit
)The sonic boom made it unrealistic for overland operations (the biggest market).
Might have been. But, guess what, even in the 50s when the concept was being discussed, they knew about sonic booms. That will never change. In truth the 'boom' from high altitude wasn't a huge issue. Plenty of folk here that will tell you they heard it every day without consequences. We operated supersonic in mil aircraft over the European mainland for decades as long as we were above a certain altitude.
The passenger capacity was very low.
Yep. 100. But the ticket price was huge. It was an elitist liner and the price tag reflected that. But, as you said, BA made it pay.
The range was pretty low too, and a fuel-stop defeated the object.
The airframe price and fuel burn was quite high.
Obviously. But how many jets do you know that can do Mach two all the way across the Atlantic today?
Everything you said is true. All part of the design and well known to the designers, builders and operators -and any potential customers. All those things discouraged others from buying it and you could argue that because the only operators were the France and UK placed the whole project on a more vulnerable footing. But none of those things actually killed it.
Sorry for the thread drift. I shall leave it there and let you get back to the A380. Good luck.
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Bigger is Better
Bigger is Better, that was the thought promoted by the leaders of PanAm and Boeing in the 1960s and along came the 747. It is a very complex story. Bigger is Better is the name of Chapter 6 in the book The Sporty Game written by John Newhouse. This book gives great insight into the complex world of airlines, aircraft and of course, the jet engines that power the aircraft. It is a fascinating read.
The 747 was successful as it was because it had no competition and if didn't work as a passenger aircraft, it was designed to be easily converted into a freighter and many have been.
The A-380 doesn't have the luxury the 747 had and today's market is different. Technology developments and enhancements for both airframes and engines have come along more rapidly than ever before. The A-380 and 747-8 programs are not long runway programs and neither manufacturer will make money while covering development cost no matter what the bean counters report.
The money making long runway programs are the 737, 777 (including new advancements) A-320 and A330 (including new advancements). These are the aircraft that will serve the most customers, generate the most profits for the aircraft manufacturers and the engine manufacturers that have engines on them. The revenue stream will be long lasting with service and replacement parts. IMHO, it remains to be seen if the 787 or A-350 programs will be long runway profitable programs or not.
The 747 was successful as it was because it had no competition and if didn't work as a passenger aircraft, it was designed to be easily converted into a freighter and many have been.
The A-380 doesn't have the luxury the 747 had and today's market is different. Technology developments and enhancements for both airframes and engines have come along more rapidly than ever before. The A-380 and 747-8 programs are not long runway programs and neither manufacturer will make money while covering development cost no matter what the bean counters report.
The money making long runway programs are the 737, 777 (including new advancements) A-320 and A330 (including new advancements). These are the aircraft that will serve the most customers, generate the most profits for the aircraft manufacturers and the engine manufacturers that have engines on them. The revenue stream will be long lasting with service and replacement parts. IMHO, it remains to be seen if the 787 or A-350 programs will be long runway profitable programs or not.
Concorde vs A380
Two completely different market segments - comparable in only a few small areas.
Concorde ended up filling the only market niche that it could satisfy.
That is;
As soon as you start eating into time saving with fuelling stops then the advantage disappears
Especially when coupled with (probable) frequency of service
Nobody in Sydney wants to wait three days to catch Concorde just so they can save six hours travelling.
Concorde ended up being a biz-jet for those who couldn't afford their own
Concorde ended up filling the only market niche that it could satisfy.
That is;
- Limited duration sectors
- Mainly over ocean
- No re-fuelling stops
- Good on-time performance - because each aircraft generally only did one flight per day and overnighted at the eastern end of the service sector
- Scheduling to suit the very small niche that it satisfied
As soon as you start eating into time saving with fuelling stops then the advantage disappears
Especially when coupled with (probable) frequency of service
Nobody in Sydney wants to wait three days to catch Concorde just so they can save six hours travelling.
Concorde ended up being a biz-jet for those who couldn't afford their own
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Next week in le Bourget some annoucements will be made ( always are) by Airbus that will shade some light as to the A380 future.
They are working on MSN200 at the moment, with still over a 100 in backlog order, most of them for Emirates. So roughly 3 years of production.
I think price of oil in the next year(s) will be a key factor in determining the future of the beast, and if the Emirates bet works . (If it does others will have to compete or give up that segment.)
Passenger comfort might also play an unexpected role . An OPS friend in SIA recently told me that specific requests for the 380 flights over the 747 and even over the 777 on routes like FRA-SIN is becoming extremely high, same with LH I believe.
Anyway we'll know in 3 years.
They are working on MSN200 at the moment, with still over a 100 in backlog order, most of them for Emirates. So roughly 3 years of production.
I think price of oil in the next year(s) will be a key factor in determining the future of the beast, and if the Emirates bet works . (If it does others will have to compete or give up that segment.)
Passenger comfort might also play an unexpected role . An OPS friend in SIA recently told me that specific requests for the 380 flights over the 747 and even over the 777 on routes like FRA-SIN is becoming extremely high, same with LH I believe.
Anyway we'll know in 3 years.
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A380 versus B-747
The A380 has been in production now for about 8 years (through the end of 2014). According to Wikipedia, it has racked up 317 orders. The B-747, at the same point in its lifecycle, had racked up 315 orders. Quite comparable.
However, in the next four years Boeing took in another 239 orders. The way the A380 is going (no new orders this year), it has a lot of catching up to do.
If one looks at the history of orders for the 747, it was quite cyclical - large swings up and down on multi-year timescales. One should be cautious about reading too much into the current A380 slump.
Interestingly, the separation in capacity between a B-747 and its nearest competitor - the DC-10 - was about the same as that between the A380 and its nearest competitor (excluding the 747-8) - the B-777 - a factor 1.5 to 1.6. However, the big strength of the 747 was its range - a factor 1.5 bigger than that of the DC-10, which meant the 747 could operate routes that the DC-10 could not. The A380 has no clear-cut advantage here - the 777 comes in various models that trade range for capacity, and the longest range version outstrips the A380. So I guess one could say that the big weakness of the A380 is its one-size-fits-all characteristic.
However, in the next four years Boeing took in another 239 orders. The way the A380 is going (no new orders this year), it has a lot of catching up to do.
If one looks at the history of orders for the 747, it was quite cyclical - large swings up and down on multi-year timescales. One should be cautious about reading too much into the current A380 slump.
Interestingly, the separation in capacity between a B-747 and its nearest competitor - the DC-10 - was about the same as that between the A380 and its nearest competitor (excluding the 747-8) - the B-777 - a factor 1.5 to 1.6. However, the big strength of the 747 was its range - a factor 1.5 bigger than that of the DC-10, which meant the 747 could operate routes that the DC-10 could not. The A380 has no clear-cut advantage here - the 777 comes in various models that trade range for capacity, and the longest range version outstrips the A380. So I guess one could say that the big weakness of the A380 is its one-size-fits-all characteristic.
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remember the 747 heyday when everyone was trying to keep up with the jones' . The following airlines took delivery of 747's that youll never see in their colours on an A380
ie TAP Air Portugal
Icelandair
SAS
Air Lanka
Sabena
Swissair
Olympic
El Al
Air New Zealand
Royal Air Maroc
Luxair
etc etc. How times have changed
ie TAP Air Portugal
Icelandair
SAS
Air Lanka
Sabena
Swissair
Olympic
El Al
Air New Zealand
Royal Air Maroc
Luxair
etc etc. How times have changed
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Most of those Airlines purchase the 747 for it's range rather than it's capacity (TAP to S. America for instance, Air Lingus is another good example), ELAL (to N.America) is never going to buy the A380 anyway for political reasons.
At the time of it's launch your only really effective other option was the 707/ DC-8
At the time of it's launch your only really effective other option was the 707/ DC-8
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Having flown numerous times on B747, B777 & A380 flights. I have to say the A380 is far more comfortable than the Boeings. The low cabin noise levels in the 380 are remarkable! I suspect the B787 may well match those, though I can't comment without actual experience.
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I think Virgin would be foolish not to take A380's. They can reduce the frequency marginally on the highest grossing routes yet keep the capacity and in turn get slots to start routes to other destinations.
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Which multiple-daily VS routes would you see as candidates for lower-frequency A380 service? (Serious question)