A380 Break-Even Point Likely To Slip Further to 2020

The issue now is not production problems but rather defered deliveries for the airframe. Boeing is having similar issues with its 777 and 787 which has not even had its first flight.

The question I always go after as many well know, these subsadies and loans they have recived now are not going to be payed back untill 2020? The inital break even point was to have been 250 aircraft but now its closer to 500???

Must be nice

Mounting deferrals of A380s are further undermining Airbus’s efforts to achieve profitability for the program, and could push the financial break-even point for the aircraft past 2020.

Although airlines aren’t singling out the A380 for deferrals—Boeing 777s, 787s and other aircraft types are similarly affected—the postponements spell particular trouble for the economics of the mega-transport. Airbus is in a critical period of ramping up production of the A380 to gain efficiencies and make up for the greatly increased development costs that surged by billions as a result of the two-year delay in the program. If those efforts stall due to sagging demand, it will increase the challenge to reach financial viability for the aircraft.

Airbus has ceased providing a break-even number for the aircraft—following the lead of rival Boeing—but cost increases owing to program delays have effectively meant the aircraft maker would have to sell more than 500 of the aircraft to turn a profit. So far, it has 200 firm orders. The original break-even point was around the 250th unit.
www.aviationweek.com.../aw st_xml/2009/04/20/AW_04_20_2009_p43-133953.xml&headline=A380+Break-Even+Point+Likely+To+Slip+Further

Originally posted by FredT
The question I always go after as many well know, these subsadies and loans they have recived now are not going to be payed back untill 2020? The inital break even point was to have been 250 aircraft but now its closer to 500???

Ahh more of the same old rubbish.

The loans and RLI (repayable launch investment) is getting paid back with every airframe delivered, and that timeline has nothing to do with the break even point moving at all.

If the original break even point was 250 airframes, then the repayable launch investment will be repayed in full when the 250th airframe is delivered - the thing that is pushing the break even point up is the additional costs suffered by Airbus due to delay compensation and extra expenditure incured during development.

Put simply, the breakdown of repayment schedules with each airframe delivered is thus:

Airframes 1 - 250: Airframe construction costs, Airbus/EADS investment, 3rd party investment, RLI from governments.

Airframes 251 - X: Airframe construction costs, Airbus/EADS additional investment, new loans to cover additional costs

The amount repaid to initial investors and governments per each airframe delivered was set at the start of the A380 development program - it does not change, and thus 3rd party investors and governments will get their original investments back on the airframe delivery schedule they initially agreed to.

So the answer to your question is 'no'. But it won't stop you asking the question, will it?

i`ve read alot of rumours that the break even point for the 787 is somewhere around 750 airframes and is increasing monthly with all the delays

Originally posted by RichardPrice
Ahh more of the same old rubbish.

Funny I could say the same

So the answer to your question is 'no'. But it won't stop you asking the question, will it?

Got a source for all of this "good" news or is it just rumors???

No, as long as Airbus and frotress Europe keeps playing an unfair game I will keep asking these questions.

Originally posted by Harlequin
i`ve read alot of rumours that the break even point for the 787 is somewhere around 750 airframes and is increasing monthly with all the delays

Have no idea, but did Boeing get interest free loans that they do not have to pay back untill the break even point to fund the 787?

Originally posted by FredT

Got a source for all of this "good" news or is it just rumors???

No, as long as Airbus and frotress Europe keeps playing an unfair game I will keep asking these questions.

Why should I need a source - its all laid out in the 1991 agreement that I have repeatedly posted here and elsewhere. RLI is repaid on a per airframe delivery basis, and set before first delivery. The only thing that has been hiking up the break even point is the additional costs. Its not a rumour, its actually reading the agreement and understanding it.

The break even point has nothing at all to do with RLI repayments.

And this 'unfair game' is one that your lords and masters agreed to. But as noted in the F136 thread, you really don't care about keeping your word when it doesn't play to your advantage, now do you.

Originally posted by FredT

Originally posted by Harlequin
i`ve read alot of rumours that the break even point for the 787 is somewhere around 750 airframes and is increasing monthly with all the delays

Have no idea, but did Boeing get interest free loans that they do not have to pay back untill the break even point to fund the 787?

Actually, no they didn't - they got outright grants and tax cuts given to them. No repayments necessary there...

Again, well detailed in previous threads - are you actually bothering to read those when they are posted?

www.faqs.org...

The United States and the European Union are having a trade fight on the issue of, government aid to Boeing co. and Airbus. The complaints are so large, the United States alleges $15 billion in illegal EU subsidies to airbus while the European Union claims $23 billion in unfair U.S government aid to Boeing, that the outcome could increase costs, not just of air travel, but also of other goods on both sides of the Atlantic.

so whislt you says `interest free loans` fred , the governement DID give aid to boeing - both sides here arn`t really whiter than white

reply to post by RichardPrice


Wow somebody sure woke up on the wrong side fo the subsadies eh?

I thought this thread was about the A380 not the F-136. If you dont have a source, there is no need to go all strawman on it

I am not suprised to hear this kind of news since the logistical route already is causing major headache and is inefficient and costly.

Not to mention the stuf in that article...

Seems that Airbus together with Boeing is on a freefall that will piledrive these two company's into the ground.

Both company's realy suffer from projects that get postponed each year and is feeling the effects of it already.

For Boeing:

-Problems with 787 and order cancelations.

-Failing to win the KC-X program.

-Discontinuation of some of the AC types they currently are producing.

For Airbus:

-A380's mounting cost and cumbersome production rates and logistical nightmares.

-Failing to win the KC-X program.

-The nightmare project called the A400.

Could it be the time for other plane manufacturers to take over the number 1 and 2 spots in building planes?

The narrowbodies are the only thing making money for these companies - yet the airlines want a new one but these 2 say `nah not yet` - so the sales of the smaller aircraft makers are picking up

It looks to me like both aircraft companies are doing very impressive. Airbus got 777 orders last year, Boeing got 662. In 2007 Airbus got 1341 orders and Boeing got 1413. The 787 has almost 900 orders, A350 has almost 500, the 737 / A320 are doing well as is the A330 and 777. Sure the 787 is a trainwreck, however it should be sorted out eventually...

idea.sec.gov...

Looks good to me. Over a billion dollars of profit. However, given an economical crisis there will no doubt be some slowdown. Other companies don't have a hope of catching up to either, atleast, in the short term.

[edit on 16/5/2009 by C0bzz]

reply to post by C0bzz


year to date:

boeing:

737 41
747 -1
777 8
787 -49 (was -57 till they got 8 last week)

total for year to date for boeing is

-1


active.boeing.com...

total orders for boeing year 2008

active.boeing.com...

644 aircraft of which

430 are 737 family.

narrowbodies keep the companies in business.

current market prices for the 787 and A350 are very very similar , the A350 weighing in around $160million with the 787-8 at 161>171 million

www.boeing.com...

before discounts of course

airbus:

total orders 2008 are 777

of which 472 are the A320 family

www.airbus.com...

the current year to date info on airbus site is a bit of a messy excel sheet


edit:

as of todays date there are 861 firm orders for the 787 family , BUT in my opinion the 43 for the 787-3 will be scrapped , as that version is rather close to being chopped.

with the current climate i can see the real number of orders dipping under 800 sooner rather than later.


for the A350

www.airbus.com...


478 , although again look at reducing downwards when compnaies go bust or can`t pay

[edit on 16/5/09 by Harlequin]

Originally posted by FredT
Have no idea, but did Boeing get interest free loans that they do not have to pay back untill the break even point to fund the 787?

No.

They got govt grants to develop composite technology in the F/A-18 E/F, the X-32 and the V-22...

oh, and the C-17.


All of that knowledge gained is directly transferable to the 787 program, in both positive and negative directions.

reply to post by kilcoo316


The difference is that the EU etc does research and this type of pump priming as well. Are you saying the the EU spends zero in this type of research?

Add to that launch aid and loans that only have to be repaid if the venture is profitiable.

loans that only have to be repaid if the venture is profitiable

Fred, I keep seeing this from you. Can you show anywhere this has been the case? From what I have seen the loans are repaid incrementally from the deliveries starting with airframe number 1, not *after* profitability has been reached. I am no expert on this so I cannot state that case with certainty, but I would like you to show something to go with this statement.

All the information I have seen points out that Airbus programmes benefit, rather than detract from, the national economies. ie from the A320 programme the UK Govt recieved double its initial loan back from Airbus in loan repayments and continues to get a royalty on every aircraft sold. This is also the case with every type so far with the exception of the newest two, though in time it will be as the rules are the same.The agreement that Europe and the USA both came to (and which the US only repudiated after losing pole position) allows for 33% of launch capaital to come from repayable loans, BAE only requested 25% for the A380.

I really don't get why you are so angry at this when Boeing gets money from the US treasury and just keeps it. wouldn't that be something more like to anger you?

Originally posted by FredT
The difference is that the EU etc does research and this type of pump priming as well. Are you saying the the EU spends zero in this type of research?

Oh, no, no.


But the EU money spent in fundamental research is the equivalent of the NASA grant aid given to Boeing/GE/Pratt etc.

For example, we've projects running in the EFE (environmentally friendly engine) program right now, a US equivalent would be the NASA EEE (energy efficient engine) program.


The military grants are much nearer the final solutions stages than researching for stuff 10-15 years down the line. For instance, neither of the programs I mentioned will develop production run technologies (think auto-tape layers for composite lay-ups etc).

Freddie boyo, have a wee gander at this:

www.defense-aerospace.com...

WRIGHT-PATTERSON AIR FORCE BASE, Ohio --- Members of the Air Force Research Laboratory and Lockheed Martin's famed 'Skunk Works' launched a new era of aircraft manufacturing technology and performance with the successful initial demonstration flight of the Advanced Composite Cargo Aircraft June 2 at Air Force Plant 42 in Palmdale, Calif. The ACCA is a modified Dornier 328J aircraft with the fuselage aft of the crew station and the vertical tail removed and replaced with completely new structural designs made of advanced composite materials fabricated using out-of-autoclave curing.

and

The road to this first flight started over a decade ago with industry and government laboratories collaborating in the AFRL-led Composites Affordability Initiative (CAI), a series of critical development steps in both materials and manufacturing technologies designed to mature dramatic, cost-saving processes.

Now, do you really think the AFRL are not going to get this out to Boeing?

If your thinking no.

www.ml.afrl.af.mil...

The Composites Affordability Initiative (CAI) team consisting of the Air Force Research Laboratory's Materials and Manufacturing Directorate and Air Vehicles Directorate, the Navy's Office of Naval Research, Boeing, Lockheed Martin, and Northrop Grumman, has developed a relational database to archive all test data and make the data accessible to all team members for current and future use.

The lines linking Boeing to the US govt are much more blurred than Airbus and the EU... that does not mean they do not exist.

As the problems continue to mount...

bigpondnews.com...

reply to post by Seekerof


whats thet problems with an A330 got to do with this thread?