What's wrong at Airbus? Will the A380 sink the ship?

[Geronimo]

Originally posted by Oerdin


Sorry but your basic premise, that military contracts are some how a subsidy, is flat wrong. Anyone can compete for those contracts just like a civilian contract. There is no subsidy.

Somehow no matter how often and no matter how many ways this simple truth is stated, it never seems to be understood by those who continue to accuse boeing of receiving some sort of "subsidy" because it sells military hardware.

[Geronimo]

Originally posted by DanS
With regard to the thought that Airbus can't lose, we very well may test that hypothesis. If the A380 comes in overweight (f.e., by moving to copper wire instead of aluminum wire), then Airbus could be compensating its customers for years to come because the aircraft's performance isn't to spec.

even then airbus wouldn't lose if the current relationship with its patron governments didn't change.

It would simply paper over any losses, however huge with new loans which it would never have topay back because of its unprofitability.


Airbus can't die unless and until it is abandoned by it's government sponsors.

And letting airbus flounder would be politically impossible for those sponsors.

[DanS]

Don't forget that there are several Airbus gov't sponsors. So it can't die unless the several gov't sponsors cease to make unanimous decisions in the face of large interminable losses.

This is a much more iffy proposition.

[pchang]

the government sponors do not need to be united

They can pull out one by one. As long as there is one left, Airbus can live on.

[Dinner]

Originally posted by Geronimo

Somehow no matter how often and no matter how many ways this simple truth is stated, it never seems to be understood by those who continue to accuse boeing of receiving some sort of "subsidy" because it sells military hardware.

I suppose BAe and Berreta are both being subsidized by the American government because those European companies have HUGE military contracts in the US? Nope, they simply competed and won based on their merits. Airbus, Lockheed-Martin, Gruman, and a half dozen others competed for the military contracts which Boeing now holds and the entire process was transparent.

Boeing won those bids because Boeing came up with a better product costing less money. That's not a subsidy that's just a customer who shopped around and took the best deal.

[Geronimo]

The battle between Boeing and Airbus reminds me of a battle between one of the new battlestar galacticas "cylons" and a colonial human. The human can kill the "cylon" over and over and over but it will just keep coming back while if the human slips up even once it's curtains for the ex-colonial.

[Geronimo]

Originally posted by Oerdin


I suppose BAe and Berreta are both being subsidized by the American government because those European companies have HUGE military contracts in the US? Nope, they simply competed and won based on their merits. Airbus, Lockheed-Martin, Gruman, and a half dozen others competed for the military contracts which Boeing now holds and the entire process was transparent.

Boeing won those bids because Boeing came up with a better product costing less money. That's not a subsidy that's just a customer who shopped around and took the best deal.

well said.

[Dinner]

Now, there is corruption and massive fraud in the defense procurement process. Haiburton's 10 year long no bid contracts set at rates far above the market rate (even the market rate in Iraq) are clearly just handouts to politically favored companies. Also Randy "Duke" Cunningham writing in legislation that companies who gave him brides had to win contracts is also corruption.

The Republicans do have a habit of giving extremely fat contracts to companies which give them campaign contributions. This type of fraud has exploded to a massive degree since the Republicans gained control of all branches of government and just based on that several of them should be publically hanged for cheating the taxpayers.

[Geronimo]

Originally posted by Oerdin
Now, there is corruption and massive fraud in the defense procurement process. Haiburton's 10 year long no bid contracts set at rates far above the market rate (even the market rate in Iraq) are clearly just handouts to politically favored companies. Also Randy "Duke" Cunningham writing in legislation that companies who gave him brides had to win contracts is also corruption.

The Republicans do have a habit of giving extremely fat contracts to companies which give them campaign contributions. This type of fraud has exploded to a massive degree since the Republicans gained control of all branches of government and just based on that several of them should be publically hanged for cheating the taxpayers.

all true, but afaik that kind of corruption hasn't bennefitted boeing yet, if it ever will.

[snoopy369]

Originally posted by Oerdin
Also Randy "Duke" Cunningham writing in legislation that companies who gave him brides had to win contracts is also corruption.

Is he Mormon?

[q=Oerdin]
The Republicans do have a habit of giving extremely fat contracts to companies which give them campaign contributions. This type of fraud has exploded to a massive degree since the Republicans gained control of all branches of government and just based on that several of them should be publically hanged for cheating the taxpayers. [/q]

I think an unbiased look would find that this is in no way a republican-only issue... we've had democrats with very similar issues. Military specific tends to be republican because republicans tend to be the pro-military group (on the whole, anyway) and so have more contacts in the military.

Democrats give their pork to other places that aren't quite as likely to get them accused of illegal actions (say, domestic construction companies). Just as unethical in my opinion. Just not as good of a news story.

[Dinner]

The problem has exploded under Republican control just like ear marks have exploded. On a scale of 1 to 10 the Democrats played small pool around 4 while the Republicans have mastered the art of bilking hundreds of billions.

The should all be hanged but I'll wager that if an honest accounting was made there would be a lot more Republicans up on that scaffold.

[DanS]

It turns out that indeed the A380 is overweight. 5.5 tons, or 2.3% over what Emirates signed the contract its purchase contract for. Pretty late in the game to try to lose weight. I wonder how much Airbus will have to compensate its customers for this performance problem.

From the Seattle Post Intelligencer...

Airbus A380 a bit too superjumbo
Passenger plane is 5.5 tons overweight, customer reports

By JAMES WALLACE
P-I AEROSPACE REPORTER

The Boeing Co.'s 787 Dreamliner is not the only jetliner in development that needs to go on a diet.

The double-decker A380, the 555-passenger giant from Airbus that has been delayed for up to two years by what Airbus has said are wiring problems, is about 5.5 tons overweight, a senior executive with an airline that has ordered the plane disclosed Friday.

Airbus has not previously acknowledged that its flagship new jet is significantly heavier than customers were promised.

Tim Clark, president of Emirates Airlines, which has ordered 43 of the superjumbos, revealed the weight problems while speaking Friday to reporters at Heathrow Airport in London.

"We have not yet engaged with Airbus as regards not only the delay but the fact that it is overweight," Clark told reporters, according to a Reuters report. He was in London for the opening of a new lounge at Heathrow Airport that will be used by A380 passengers.

Airbus has blamed a series of delays in getting the A380 ready for customers on wiring issues. But some industry analysts have speculated that wiring alone could not fully explain why the plane is two years behind schedule.

Richard Aboulafia, vice president of analysis for the Teal Group, an industry consulting business in Fairfax, Va., said it is now clear there are additional problems.

"This is big news," he said of the revelation by Clark that the A380 is 5.5 tons too heavy.

That's the equivalent of about 55 passengers who weigh 200 pounds each, Aboulafia noted.

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"This goes a long way in explaining the delay," Aboulafia said. "Wiring alone did not explain what we were all hearing. It sounds like weight-reduction design changes are a big part of the delay, too."

The first A380 was supposed to have been delivered to Singapore Airlines early this year. The airline won't get the first plane until next October, Airbus has said.

Emirates will be the second airline to get A380s. But that won't happen until 2008. Under the original Airbus delivery schedule, Emirates would have had 18 A380s by the time it will now get its first plane, Clark said.

The airline is sending its own audit team to Toulouse, France, home of Airbus, to investigate the delays and determine how realistic the latest A380 delivery schedule is, Clark told reporters. The A380 problems led to a major management shake-up at Airbus this summer. The top executive resigned. His replacement recently resigned, too.

Weight is a problem with all new aircraft development programs. A heavier plane burns more fuel. Range and payload are affected.

Earlier this week, Boeing said its 787 Dreamliner is 2 percent to 3 percent over the target weight, and a team is working on the problem. Boeing would not say how many pounds that percentage represents.

"We considered whether we should give out a figure, but it literally changes by the week and sometimes by the day," a Boeing spokeswoman said Friday.

Final assembly of the Dreamliner won't start for several months. That makes it easier for engineers to look for ways to get the weight out. But the A380 is already in flight testing.

Typically, launch customers for an all-new jet from Boeing or Airbus get performance guarantees written in their contracts, with financial penalties if the plane is too heavy and does not perform as promised.

Clark would not comment on any financial compensation that Emirates might seek from Airbus because of the A380 delays and the weight problem.

And he did not sound convinced that there won't be more delays.

"It would be foolish to say we do not expect anything further," he was quoted as saying when asked if there could be a fourth A380 delay announcement from Airbus.

Clark also was asked about the A350XWB, the plane that Airbus has said it will develop to challenge Boeing's 787 as well as the bigger 777.

In July, Airbus announced that it would redesign the A350 in response to customers' criticism that the previous design was not good enough to challenge the 787.

Clark said the latest version of the A350XWB (extra wide body) is still lacking. Emirates has been considering a 100-plane order for either the 787 or A350.

Meanwhile, Airbus does not have a plane to seriously challenge either the 787 or the bigger 777.

This was underscored again Friday when Emirates announced that it has canceled a $4.2 billion order for 10 of the Airbus A340-600 models and dropped options for eight more.

http://seattlepi.nwsource.com/business/290276_airbus28.html

[DanS]

Interestingly, here's a link to a July, 2004 Bloomberg article where Tim Clark says the A380 is overweight by 4 tons. So 1.5 years later, and the A380 has gained weight!

http://seattlepi.nwsource.com/business/182471_airbusproblem17.html

[pchang]

I now have confirmation

that the guys I was working with at Airbus have been let go.

[Asher]

For incompetence or cost-cutting?