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-   -   This can't be good - A380 (https://www.pprune.org/rumours-news/609817-cant-good-a380.html)

bizflyer 7th Jun 2018 10:58

Dr Peters Group plan part out of two A380's returned from lease by SQ
 
https://www.dr-peters.de/en/company/...018-06-01.html

Less Hair 7th Jun 2018 11:09

So two used ones being parted out, at least another one leased on flying to HiFly.
SIA had five retired for new ones. Who is taking the other ones then?

KenV 7th Jun 2018 12:19

This can't be good - A380
 
Only 10 years after they went into service, two A380 super jumbo jets are being broken up for parts.
There might be some really good reasons for this, but no matter the reason, this can't be good for future prospects of this airplane.

https://www.cnbc.com/2018/06/05/a-de...broken-up.html

wiggy 7th Jun 2018 13:33

Worth bearing in mind (as I understand it) that these were v early airframes with weight/performance issues that made them a very unattractive option for the rumoured prospective purchasers..I don’t think we can draw any conclusions about the second hand market in 380’s until some more typical airframes hit the market.

swh 7th Jun 2018 13:42

First few 787s didn’t see a day of airline service and were broken up !!

CONSO 7th Jun 2018 13:45

Well with sales in decline- its a good bet that the 380 will never meet its sales- delivery projections when Airbust filed for a bit of gubbermint help via low cost ' loans' - thus under the rules, a significant portion of the ' loans ' will never have to be repaid, but simply forgiven. Just one of the advantages of a state run company with short work weeks, great vacations, and fabulous PR ...:rolleyes:

Of course the BA 7 late 7 game - the shareholders eventually take it in the shorts over the long term . . .

BAengineer 7th Jun 2018 13:59

The leasing companies have been warning for years that there isn't any viable used market for these aircraft so scrapping seems the obvious decision. Whether it is an economic decision depends on what the sale price was in the first place - if the airline got a really good deal then a 10 year lifespan isn't a big issue.

swh 7th Jun 2018 14:23

Two are being parted out, two are being taken by HiFly. HiFly have advertised for crew, the first aircraft has gone test flights.

RufusXS 7th Jun 2018 18:15


Originally Posted by swh (Post 10167342)
First few 787s didn’t see a day of airline service and were broken up !!

That's not really true. The first 6 787s produced were meant to be test articles. 1-3 were never envisioned as having economic value after testing so I believe they are scattered around the world as static displays. 4-6 were thought to potentially be suitable for sale, but only #6 was purchased (I believe by the Mexican government for VIP transport). 4 & 5 were indeed scrapped with very low hours (1,500ish I believe).

That's quite different than being sold to carriers, used for a number of years but nowhere near their potential lifespan, then being scrapped for lack of interest.

Now, the 787s did have their early production units known as the "terrible teens." Those sat at Boeing for several years waiting for buyers. They were eventually modified to upgrade some of their degraded performance and were sold (I'm sure at steep discounts). Now if those serve for however many years/hours/cycles that these A380s served for, then can't find a buyer and are thus scrapped, that's probably a better comparison. Other than test articles #'s 4 & 5 though, I'm not aware of any 787s being scrapped yet.

vapilot2004 7th Jun 2018 19:20

Two points I found interesting - one, the owners of the leased aircraft apparently already made their investment back (with a profit) during the lease period. What happens to the aircraft afterwards is all gravy - they can sell the A380's engines, chop the rest up for scrap, and still have made plenty of money.

The second point, the biggest issue regarding profitability in the secondary market of the super jumbo is the enormous cost of an interior refit - $30-40 million US, which is outside of the range that airlines are willing to pay, so this fact, along with the limited demand for such a large, complex aircraft factors into the limited desirability.

Intruder 7th Jun 2018 19:35


Originally Posted by swh (Post 10167342)
First few 787s didn’t see a day of airline service and were broken up !!

I know of one that was broken up at PAE just a few weeks ago. Haven't heard of any others...

Several of the early 787s are already in museums, including #1 in Nagoya, Japan and #3 at the Museum of Flight in Seattle.

BluSdUp 7th Jun 2018 21:35

CONSO

And Boeing would do just fine without the Military, Fed and State subsidy, Eh, EH!
The dreamliner are making money for them ,,,,,,,,,,,,,,eeeeh. NEVER!

Grow Up

tdracer 7th Jun 2018 22:58


Originally Posted by BluSdUp (Post 10167726)
CONSO

And Boeing would do just fine without the Military, Fed and State subsidy, Eh, EH!
The dreamliner are making money for them ,,,,,,,,,,,,,,eeeeh. NEVER!

Grow Up

BSU, Boeing is currently cash flow positive on the 787 to the tune of roughly $25 million/aircraft. That's about $4 billion/year. Now, even at that rate it'll take several years to break even on the program, but the 787 will likely make money.
Airbus isn't even cash flow positive on the A380... They need to up the production rate to twice it's current rate to be cash flow positive, so as it stands now, the more A380's they build, the more money it looses.

swh 7th Jun 2018 23:24


Originally Posted by RufusXS (Post 10167557)
That's not really true. The first 6 787s produced were meant to be test articles. 1-3 were never envisioned as having economic value after testing so I believe they are scattered around the world as static displays. 4-6 were thought to potentially be suitable for sale, but only #6 was purchased (I believe by the Mexican government for VIP transport). 4 & 5 were indeed scrapped with very low hours (1,500ish I believe).

o

It is true, none of the 787 test aircraft were supposed to be scrapped, they were all planned to go into service like the 777. All were supposed to be sold.

When’re market showed no interest in these frames, Boeing decided to scrap the aircraft, they used the aircraft to move 2.5 billion out of their 787 production costs into their R&D budget. They fixed two problems, their bloated production costs and aircraft no one wanted to buy.

glad rag 8th Jun 2018 09:18


Originally Posted by KenV (Post 10167273)
Only 10 years after they went into service, two A380 super jumbo jets are being broken up for parts.
There might be some really good reasons for this, but no matter the reason, this can't be good for future prospects of this airplane.

https://www.cnbc.com/2018/06/05/a-de...broken-up.html

tranche1 heavyweight aircraft.

lederhosen 8th Jun 2018 10:46

VApilot the investors have I understand got about 75% of their original investment back after ten years. They may make a profit at some time in the future depending on how well the parting out goes.

Torquelink 8th Jun 2018 11:08

And that is the totality of the yield they have made on their investment. In other words, currently they are 25% out of pocket and even if that 25% is recovered through part-out, they will have made a zero return on their investment over 10 years.

swh 8th Jun 2018 12:18

Read the link in the opening post, return to investors 145-155%

lederhosen 8th Jun 2018 14:51

swh it says they are expecting a planned return in that range. The actual return could be anywhere between Torquelink's nil and Peter's hoped for upper end of 55% over the 12 years the money will have been invested. Investors (some of whom I know) are inclined to believe it when they actually see the money.

NOC40 8th Jun 2018 15:11

except: "This includes the repayments already made of approximately 72 percent (DS Fund No. 129) and 81 percent (DS Fund No. 130)". So the returns definitely won't be zero, and will very likely be in excess of 100% of the original money invested. As to how much and when, I agree those are harder questions to answer


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