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New Boeing 777-200lr

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posted on Feb, 16 2005 @ 02:40 AM

Originally posted by bigx01
that's 100% correct boeing is a publiclly traded company so they have to make a profit or no one would want to buy their stock. airbus is a private company so they really dont need to make a profit and more importantly they can actually lose money on planes as long as their owners ( if they happen to be publically traded ) make a profit. which if i was airbus i'd dump planes on the world below actual cost even if it ment taking a loss on them.

Actually Boeing have been buying back a lot of their stock recently, because it means they have to pay less dividends. And post 9/11, you do realise that you could pick up new 737s for less than $20million USD? Airbus wouldnt survive if it was dumping aircraft, but you are right in that it being a private company means it doesnt have to pander to shareholders.

sounds like something the sopranos would set up to launder money

It sounds like you want to start an arguement, or have an ulterior motive. In which case, go else where.

posted on Feb, 16 2005 @ 02:53 AM
not making an arguement, just clarifying facts that you have already pointed out. and you dont have to buy back stock to pay less dividends. you just pay less dividends. with 839 million shares outstanding reducing the dividend by 1 penny ( dividends are paid quarterly so thats 4 cents overall ) will give you 24 million less paid to share holders which is easier than buying back 24 million shares

no they don't. no one has to pay dividends, dividends are decided by the board members of a company and they can be cancled at any time. the faa has no say as to if a company has to pay dividends, neither does the sec or the irs or the government for that matter.

there is no company in the United States that is required to pay dividends. in fact many companies do not pay dividends, many companies that are in either aerospace or airlines do not pay dividends. i own several stocks in the aerospace industries and none that i own pay any dividends and never have
[edit on 16-2-2005 by bigx01]

[edit on 16-2-2005 by bigx01]

[edit on 16-2-2005 by bigx01]

posted on Feb, 16 2005 @ 03:01 AM
Actually, yes you do. Above certain levels the FFA (or whatever the Federal Financial Agency is called - its not the SEC) forces companies to pay certain levels of dividends above a certain income level. Buying back stock lessens the number of dividends you are required to pay.

posted on Feb, 16 2005 @ 03:12 AM
in fact even though this is off the topic of this thread. it wasn't until last year that Microsoft paid a dividend and the it was a one time only special dividend of 3$ per share. they were not required to pay it, and they will not be paying $3 a share again

posted on Feb, 16 2005 @ 03:45 AM

Originally posted by MickeyDee
you make that sound as though the A350 is better then the 787, which its not.

Bit bias towards Boeing coz ur American i think...

[edit on 15/2/2005 by MickeyDee]

[edit on 15/2/2005 by MickeyDee]

hey i am australian and i like boeing much more than that "airbuss"

posted on Feb, 17 2005 @ 02:57 PM
Watched a show on Dicovery channel about the engines on the 777. The flight tests were conducted on a 747. The one 777-300 engine was able to power, on it's own, the 747. It is apparently the most powerful comercial engine ever.

posted on Feb, 17 2005 @ 03:25 PM

Originally posted by RichardPrice

But it looks like better data has come to light since I last searched around - Airbus have placed the A350 at $150million USD initial price point (mainly due to the high $ price at the moment). Im not sure exactly what Airbus are up to with this
It looks like Airbus are going to compete with the 787 directly on efficiency according to sources, and that initial price point is both open to negotiation and fluctuation in $ price (since Airbus sells in Euros and the dollar has devalued dramatically in recent times)

Airbus could have a big problem with low dolar. The A350 was originaly said to have much lower price 90-100mil. $ compared to 787 130mil$ so even with the 787 eficiency airlines would be not able to save 30 mil.$ (against A350).

From the article about the $ issue :

So far, the dollar's fall has certainly not held Airbus back. During that long currency slide, Airbus has consistently outsold Boeing and risen to become the world's No. 1 airplane-maker.

But beyond 2007, the dollar's plummet will take an increasing toll, eating gradually into Airbus profit margins.
That makes the planned A350 a riskier investment. And it could force Airbus to increase airplane prices, making it harder to sustain the constant undercutting of Boeing.

Luckily for Airbus, because the dollar is standard for many aviation suppliers, more than half of its expenses also are paid in dollars. When it buys aircraft engines, even from Rolls-Royce of Britain, it pays in dollars.

But about 43 percent of its expenses must be paid in euros — labor costs, overhead, taxes, payments to general suppliers, as well as a chunk of the payments to airframe suppliers. With its revenue in one currency that is falling steeply, and a big portion of its costs in another currency that's rising, Airbus has a recipe for lower returns and squeezed margins.

In a research note to clients, Nadol wrote that at an exchange rate lower than 0.80 euros to the dollar, Airbus' earlier cost cuts will be insufficient to maintain its profit margins beyond 2006. Yesterday's exchange rate was 0.75 euros per dollar.

"We are protected until at least 2007," said Airbus spokeswoman Mary Anne Greczyn.

Airbus needs at least $10 billion in hedging coverage per year, depending on how many jets it delivers. After 2007 the amount of coverage Airbus has in place successively decreases, and the locked-in exchange rates rise because those airplanes were ordered as the dollar fell.

By 2009, less than half of Airbus' euro expenses are covered by hedging contracts and the average rate locked in is 0.92 euros per dollar.

As Airbus lands future firm orders for delivery in 2009, it will be hedging at current exchange rates, and that average locked-in rate will fall steeply.

The impact: Airbus' cost of airplane production will correspondingly rise. It's difficult to predict how much, but assuming a continued need for $10 billion a year to cover euro expenses, a slide from the current average locked-in exchange rate of one euro per dollar to an average of 0.85 euros per dollar would cost Airbus $1.5 billion a year.

When Airbus' forthcoming super-jumbo A380 jet launched in 2000, the dollar was riding high. Along with low interest rates that kept down the cost of borrowing, that helped launch the airplane.

Airbus' next development effort, the mid-size A350 that will go head to head with the 7E7, won't have those advantages.

"The A380 seemed to have all the luck," said analyst Pilarski. "The A350 may have the bad luck of a weak dollar and increasing interest rates."

The A380, scheduled to fly next year, is not unscathed, though.

In 2000, Airbus' A380 business case pegged the exchange rate at what then seemed a conservative 0.89 euros per dollar, according to a presentation last summer by Airbus CFO Andreas Sperl.

Sperl estimated that a sustained exchange rate of 0.77 euros per dollar would reduce the rate of return on the A380 investment, originally projected to be 20 percent, by almost 3 percent.

Last year, specifically to counter the effect of the dollar's fall, Airbus introduced a sweeping cost-saving program aimed at cutting $1.5 billion per year in expenses. Now 90 percent implemented, that program isn't enough.

At an EADS investor conference in New York two weeks ago, Airbus announced a new program to cut overhead. The new plan, still formative, envisages saving money in part by reducing outsourcing — the reverse of Boeing's cost-saving ideology.

Airbus hopes that with hedging, cost-cutting and increased market share, it can counteract the dollar's slide.

posted on Feb, 17 2005 @ 05:44 PM
If I want to read an aviation article doing a spot of the old 'fortune telling' about Airbus and it's possibilities I'll probably not rely too heavily on Seattle based sources.

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