PNAA Conference: Airbus says A320 cancellations not as bad as numbers suggest

Feb. 12, 2015: Simon Pickup, Strategic Marketing Director, Airbus, took issue (no surprise there) with Boeing’s Randy Tinseth, VP Marketing, at the Pacific Northwest Aerospace Alliance conference today in Lynnwood (WA), and Tinseth’s barb that Airbus had a record year of 340 cancellations.

One hundred fifty of the A320ceo cancellations were swaps to A320neo orders, so the numbers weren’t as bad as numbers appeared, Pickup says.Quotations are paraphrased.

  • We will have a very smooth transition from A320ceo to A320neo, with strong sales in ceo. Backlog of airplanes now reaching nine years.
  • Airbus and  Boeing closely agree on future demand.
  • North American airlines will account for about half of $25bn profits projected by IATA this year.
  • Airbus continues to project a 20 year requirement for 1,501 Very Large Aircraft (Boeing is less than half), including freighters.
  • A321neo has 73% market share vs 737-9.
  • A320neo on track for first delivery to Qatar before the end of the year.
  • Continues to claim A330neo beats 787 on trip and seat cost.
  • A350 vs 787: Would you like to have a slightly wider seat or a slightly larger window?

 

68 Comments on “PNAA Conference: Airbus says A320 cancellations not as bad as numbers suggest

  1. “Airbus continues to project a 20 year requirement for 1,501 Very Large Aircraft (Boeing is less than half), including freighters.”

    1500 VLA! The A380 was launched in 2000 and in 2020, there will be only about 300-350 aircrafts produced at a low production rate of 25-30 aircrafts/year. Even including the 747-8, there will be at most 500-600 aircrafts far from the ~1500 aircrafts.

    Boeing is a lot more realistic than Airbus. Not long ago, Airbus claimed that the A380 will get 1300 of the 1700 VLA.

  2. “Boeing is a lot more realistic then Airbus”.

    Tinseth says Airbus had a year of 350 cancellation. But forget to mention 150 were upgraded to NEO’s. Reliable.

    • This being the same Airbus that said there would be no converting?

      Still is a cancellation in one program and an adder in another.

      Also key is when the takeup is on the new aircraft order.

      Ie. obviously canceled in the next couple of years and then taken up in 2025?

      • Airbus has the luxury of being overbooked on the available CEO production.
        What should they do? Cancel those orders outright?
        “Sorry, we only have NEOs and you can’t have those.”

        • Uwe wait, so what you are saying is Airbus sold the same slot more than once? So ceo sales were that good that Airbus never really needed to produce the neo? So all of those orders that have been canceled and not replaced for ceos are not really important because Airbus is overbooked? And finally, based on your comment the industry should really be worried about the Airbus narrowbody backlog because some of the confirmed sales could be double booked sales? Be careful what you say because what you’re saying drives real worry.

          • In your shoes I’d start out with being more careful in reading and understanding what other posters write.
            You are scraping strange arguments from thin air.

            Airbus sold more than the minimum CEO frames needed to fill the gap and the ramp up to changing over fully to the NEO.

            Thus Airbus has the freedom to either produce more CEO frames during the ramp up phase ( i.e. a slower ramp up) or swap customers over to NEO frames.
            Another degree of freedom is ramping up overall production
            with the added advantage of being able to individually finetune CEO (rampup/rampdown) and the NEO ramp up.

        • They may have sold more, been able to offer the swap option, or simply sold the same spot twice? Those are all options. Since you don’t know the production schedule you have the same option I have, making assumptions. Mine were based on your call, not based on anything else. What you said meant that they could have an entire backlog of double booked ceo sales. If true you have called the entire order book in to question. I assume that not to be true, but your comment (which you thought to be insightful) was an interesting justification for not worrying about transfers or cancelations. Which I found to be less insightful. SO I read you, and I understood you but I thought that those who use those type comments should understand the implications of them. Nothing against you personally, but more to the point you were making. By the way one confirmed and real order is better than 2 possibles. But in business you are never sure that everyone will buy what they say at the time they say, so you double book your risk.

          • IMHO you munge the orderbook vagaries for a “use type” ( here the complete A320 demand ) with the potential redistribution of orders by way of upgrades.

            Another vector you mention is orders by different customers servicing the same market.
            You can either service both parties ( and see how they compete : various outcomes ) or pick a champion and only supply that party. ( opens up for the competitor picking his own champ ).
            Servicing both parties offers reasonably safe sale of one full set of airplanes required for the market.
            The champion solution will sell one full set in the best case and none in the worst case. Assuming equal probabilities you average out at 50% of market demand.
            The champion solution makes sense if you have leverage into the competiton outcome. The US history and current prevalence of “twisting arms” makes that an attractive solution for Boeing. Significantly less so for Airbus.
            This is reflected in the order books.

  3. The one golden rule I have learnt in marketing & sales is to never criticise or put down a competitor. The one time I did cost me dearly.

    Holding the position he does one would expect Mr Tinseth to conduct his role with a more mature & professional attitude.

    This one-upmanship approach does nothing for enhancing customer loyalty or winning back customers. To a lesser extent this advice could be thrown toward Airbus as well.

  4. I would like to see the numbers on “ceo sales”

    Are they really sales or customers taking the orders they have not converted?

    Clearly though Airbus is doing nicely with the A321, almost no competition.

    So overall the market in single aisle is 50/50 split, but the individual models show a different story.

      • Deliveries are a function of production rates, not orders; if you have an imbalance of order (Airbus v Boeing) you have a longer delivery stream for one or the other but if both OEMs have the same production rate the deliveries are 50/50.

        • So what you’re saying is that the overbooked story is a story. Production runs have been in balance, and not too many years ago there was a story about Airbus moving deliveries around so production runs remain consistent. Boeing does the same thing. Order cancelations are generally done at the point the airframer requests confirmation of purchase so the production slot is confirmed. Since lead times are more than 12 months out, what is being pushed are orders that are in the 15 to 18 months out in the planning cycle. So you may be sold out past 19 months, but you may have slots open sooner because an airline cannot pick up a confirmed slot 14 months out on the production schedule. The concern will be how many of the “real ” ceo production slots are real orders. The answer to that is coming over the next 12 to 15 months. That may be what Randy was speaking of, holes in the current production schedule because airlines are moving orders out and there are no replacement airlines willing to assume the slot. That means you have to carry finished good inventory until a buyer comes along and takes the frame. Production lines are humming right now so any cancelation without a backfill can mean trouble.

        • Airbus has been rather vocal in that there will be no significant rate increase during CEO NEO switchover.
          Nonetheless the announced increases for both airframes currently sit on about the same curve.
          ( Just no common dates for a simple 1:1 comparison, Boeing appears to have given numbers a date further out )

          Then, changing tack and counting deliveries when
          previously sales were touted as the prime metric probably has more foundation in the market situation ( Lower MAX sales than NEO ) than in anything else of actual weight.
          Fanboys playing Quartets ( I can’t get you on speed but my wheels are bigger 😉

          • If I have a run rate, and the market accepts that run rate, and I draw revenue from that run rate, then my sales are that run rate. I might announce 2X in new sales, but how I run determines whether I think those 2X sales are real or not. If my competition and I have the same run rate, the market is equally split. You know very quickly in this world who has lost share when you see finished good inventory build. You will then know that neither of the double booked sales were real. I assume that in many cases both framers will face that issue when actual cut over comes. Neither wants a Skymark type cancelation. Because the Airbus switch is sooner than Boeing’s we will soon see how strong those transition sales are, and to add that fuel prices are down, people might be more willing now to push their switch to the right. To overcome that both companies might be willing to offer new incentives to back buyers so the overall carrying cost of the switch is not as bad as it could be with planes waiting for owners. Might be a great place for a leasing company to be if they have placement demand.

          • I think that,just nobody is aware of the strong engine dependency of the A320NEO (And 737 Max) !
            Airbus is depending on P&W 1100 production and availability .. and with the C-Series expérience, Airbus may wonder if they will get enough engines in time, and make the split as planned between CEO & NEO !
            Another question is when will the Leap be certified, and if this engine wil be certified on spec’s (Same question for the B737 MAX !)

            So, Airbus & Boeing may need some flexibility with their orders book and customers !
            The oil low pricing may help a lot, if sustained !

      • I continue to disagree as the assumptions that all those booked orders will be delivered at some far date.

        The reality is that at some point Boeing will come up with a new aircraft, Airbus will respond with a further upgraded A320 series or an all new aircraft and a lot of those far out orders will get shifted (or canceled).

        If Airbus really had a 60/40 split, they would be producing 60% of the single aisles. As we have seen from last years production, Boeing made something like 49.8%.

        Overbooked, double booked, far out orders that get shifted to the right, call me a stick in the mud but rubber meets the road is aircraft turned over to customers and that is why Boeing is ok for the short to mid term. (overall, A321 is a different story)

        Longer term stay tuned.

        • The GTF engine is at the foot of the steepest part of the developement S curve. ( see the announced improvements in the next years ) The CFM LEAP is afaics in a position of less easy potential gains. even more so for the MAX.
          This will lead into a use case differentiation between 737 and A320.

          What happens if the MAX keeps on selling reasonably well buoyed by availability and (comparatively more expensive ) improvements while on the NSA front a sufficient and “real” performance delta against the A320 family is not achievable?
          My guess is another over promise like the Dreamliner will not have the desired market uptake.
          ( the “what NEO? We have NSA!” offer already floundered )

  5. Do the 350 cancellations include the 80 plus Kingfisher a320 and 330 orders?

    In any event, both A and B have orders that are less likely to be filled than others, especially if there is a down turn in finances (eg. Skymark, Transaero). I believe Leeham has a “storm warning” flag that he used to describe orders that are set for airlines with less solid footing. I am sure that both A and B are taking this into account. The “orders” race is kind of stupid, when both manufacturers have enormous backlogs. Deliveries and profits and RD investment are profits are more compelling measures of how they are doing methinks…

    • Backlogs are irrelevant … to a point. But an order backlog is what a company will use to plan and justify production speed adjustments, so in the end they do matter, even if not exactly the same way.

  6. I will take a slightly larger seat over a much bigger window anytime! It looks like the 787 is getting squeezed between the A330neo and the A350, instead of the A350 being squeezed between the 787 and the 777. In addition to that the Dreamliner is more expensive to manufacture than it was expected to be when this bold new design was launched. And I would not be surprised to learn one day that it is also more expensive to operate than what was initially promised. Not to mention the complexity of its design for small operators. As for reliability I don’t know, for it seems to have become taboo to talk about it. The scarcity of new orders might be a reflection of these shortcomings.

    • @Normand,

      Ha….that’s a nice fairy tale to tell yourself. The 787 getting squeezed between the A350? And the reason for scarcity of sales is more likely due to “can’t get one anytime soon,” or that’s the reason Airbus fans say is the reason for the scarcity of A350XWB sales, at least. Or is that an excuse that only applies to Airbus? Both manufacturers have full books, so no one is really ordering any more of either, at the moment.

      As far as reliability, it probably has improved to the point that there is no point in talking about it, as it is a non-issue. And smaller operators, like Norwegian, apparently have no problems with operating it, since they’ve ordered more, so I think your point is rather pointless.

      • When I state that the 787 appears to be squeezed between the A330neo and the A350 I actually want to confess my astonishment that it is not the A350 that is squeezed between the 787 and the 777 as I had anticipated could happen when the A350XWB was launched. The big surprise for me, like many others, is not so much the immediate success of the A350, almost on a par with the 787, but the enduring success of the A330.

    • I read between the lines on that one. First I thought you were a supporter of Boeing then I got it. So all the performance data that’s out there about the 787 is not real? Lack of orders has something to do with available production slots, and also that there are more than 800 that need to be produced. It might cost too much, but here’s your marker, which of the customers that has received his or her frame has canceled an order? I’m seeing people come back and top off. As for a wider seat, think that has to do with the airline’s plan and not the design. I buy a seat that is 17.5″ wide for my fleet that’s what I buy. The window, well you get that no matter what. Let them both fly please and enjoy the fact that the world will be better off because of the innovation that has taken place on both sides of the pond. So it cost more than anyone thought, but what we gained has been a marvel in technological breakthrough. Enjoy your view out the window in a tight seat. By the way watch the video of the 787 catching the A340 and passing it. That my friend is what technology will do. I will bet the A350 will do the same thing to an A340 and an 747 too. These things are fast and beautiful!!!!

      • Of course you’re right than comfort is generally designed by what the Airlines put in their planes then OEM design, but the OEMs can also help too. Whether intentional or not, Airbus has made the A350 cross section in such a way that 18″, 9 abreast HAS to be the standard, because anything more and you’re crossing into LCC territory which I’m sure no blue chip airline wants, so due to this “accidental” design, the A350 will almost always have more room the the 787, which has it’s sweet spot at 8 abreast, but just that small space, that airlines can still go 9 abreast.

        • It is quite obvious that both were intentional. But Airbus being a European company has a tendency to be more accommodating for the working class. 😉

      • “I read between the lines on that one. First I thought you were a supporter of Boeing then I got it.” Be careful what you read between the lines because that space is normally blank unless you have a defective printer. 😉

        In my answer to Neutron73 for the same post I made a confession. I will make another one for you: I am a supporter of Boeing. And it so happens that I am also a supporter of Airbus. While I am at it I might as well reveal that I am a supporter of Bombardier (who would have guessed?) and yes, believe it or not, I am a secret admirer of Embraer. I have not yet developed any particular affinity for the others but I wish them all good luck, be they Russian, Chinese or Japanese.

        “It might cost too much, but here’s your marker, which of the customers that has received his or her frame has canceled an order?” Yes the 787 now costs too much because it is considerably more expensive to manufacture that was originally anticipated. And besides Boeing is trying to recoup part of its notoriously bad investment. That being said we have to remember that many frames of the initial batch of 800 could be acquired for a meagre amount of money and future considerations. Most likely the best bargain ever in the history of commercial aviation. Who would want to pass a deal like that?

        But I have to agree with you on one point: The 787 is indeed fast and beautiful. So was the Dream behind it.

          • ~2006:
            “click 3 fuse parts together, stick some wings on, hang a pair of engines and plug all plugs : voila : roll out.”

            They didn’t start from where they expected to start
            and the originally planned process ( and associated cost per plane ) appears to be unachievable .

          • Uwe,
            The worst the case is with the first units the “easier” should be (mathematically) to obtain a steeper learning curve :-). Nevertheless, the 87% doesn’t even take into account how well/bad they did on that first production before roll out, it is based on Greg Smith’s reported cost reduction on the last 175 deliveries (from the 36th unit onwards).

          • I am aware of the limitations and the limited keyhole view this presents.

            If the initial problems had been of the rather “dumb but simple” kind, progress could have been in big steps.
            Cost of the prototypes must have been “humungously large”
            $1B per all taken together ?
            IMU original planning was not for prototypes ( specimen done from an irregular process ) but for “pre series production”. i.e the first item of the line would be used for certification. Sellable items from #1 onwards.
            ( The A350 seems to have come quite a bit nearer to that goal.)

            777 probably made very good progress because vast amounts of money were _successfully_ thrown at a problem. Any date available on 777 production break even?) What we’ve read over the years a judicious amount of really dumb errors were made fixable at a very fast rate
            expecially with the very slow demand on finished frames But there must remain some really hard to fix problems to average out to the rate observed. ( OK lots of dumb mublings … )

          • “Cost of the prototypes must have been “humungously large”
            $1B per all taken together ?”

            Indeed. When I wrote the analysis of the 787 break even in 2011 (http://theblogbyjavier.com/2011/10/28/will-boeing-787-ever-break-even/), one thing that needed to be modelled were the RC. Taking the WIP at that point and the numbers of A/C produced, I estimated an average cost of 310m$ for the first ~50 units (similar to reported figures elsewhere). But then you need to spread those 18bn$ of WIP along the curve. The more steep the learning curve (e.g. 75%) the higher the 1st unit cost would have been. The results I got: for 75% the 1st unit would indeed have exceeded 1bn$ RC, for a lower curve (84%) the 1st unit cost was somewhat lower ~670m$ RC.

            The next question then is: what is the RC now? Get the unit cost of those 1st units (670m$-1bn$), plug in the learning curve formula (as per Greg Smith’s reports) and you’ll get RCs still around 200m$, almost the double than the ~115m$ they may be selling for after discounts… tough. Talk of accounting block, deferred costs, etc…

          • Jon Ostrower once reported that the ~400 frames sold for an average of $87m _sans engines_.
            I don’t think the later orders were all that much more costly. Keeping old customers and enticing new ones can’t have been cheap in that environment. With all the bubbly news from a problematic product money must have been the lube product of choice. ( I still wonder what the tariff was for fake news like “Air Berlin orders more 787” 3 days in advance of the NTSB report ).

            Current production cost and break even:
            The only arrangement were I can fit a $200+m
            bill for production in with an advised cost break even sometime this year is when that break even is measured against list prices? Lead me.

          • Thanks!

            By the way, I put the figures in the model and it may be sooner. At the end of 2019. For the 2022 date I had taken the RC for the first unit (~650m$) that corresponds to LC 84% but applied the 87% curve [apples with pears].

            Now I did it going from the RC for the 1st unit down with the 84% curve thru end 2013 and then from that point continuing with a 87% curve (to go by reported figures).

            With that correction, now RC must be about 180m$, RC = RI by end 2019, if prices keep being increased 3%/year, but discounts are kept ~47%, etc…

          • Thanks for your comment Javier. I had not seen your latest analysis and I am glad to see that you are still working on this. I speculate while you calculate. 🙂 You have done a brilliant extrapolation that will help us to substantiate any claim we can make in regards to the profitability of the 787 programme.

            You make a good point when you say “I don’t think this project will ever break even (an investment concept). But with time and as development and deferred costs are swallowed it may well be a cash cow in the years to come.” We are nowhere near that point in time as the deferred costs are still staring Boeing in the eyes while blinding the analysts at the same time. When time comes to swallow those deferred costs I just hope Boeing won’t get an indigestion. 😉

            My understanding of the mechanics of deferred costs is that they are gradually absorbed over the years through profits that would normally have upped the balance sheet but in this case would only have a neutral impact as they are subtly factored into the deferred costs “cloud” via some magical accounting trick. And like you say that is what will eventually turn the 787 into a cash cow when the manufacturing costs will be lower than the prices at which the frames were actually sold. But I am afraid that because of its genetic inheritance that cow will always produce soured milk.

          • Thanks for your compliments, Normand.

            In relation to “We are nowhere near that point in time as the deferred costs are still staring Boeing in the eyes while blinding the analysts at the same time.”, take a look at my previous response to Uwe’s comment. I think they may be losing about 70-100m$ RC per unit produced. Many deferred costs still to be seen.

          • Javier, when do you expect the manufacturing costs to be lower than the actual prices at which the frames were sold? I know it is difficult to estimate because we don’t know what those prices were in the first place. So to reformulate my question, when would you guess this could start to happen?

          • From one side, I assume that manufacturing costs are now around ~225m$/unit, that they continue with a 87% learning curve.
            From the other side, I assume the 787 sells with a discount of 47% (http://theblogbyjavier.com/2015/01/15/my-forecast-of-boeing-commercial-airplanes-2014-revenues/), thus now for around 115m$ (then-year dollars for delivered aircraft), I assume that Boeing continues to increase list prices by ~3% a year.
            Too many assumptions. In any case, with those in mind the two trends don’t converge before ~1,300-1,400 units built. Now we are in the 220s deliveries, at a rate of 120-140/year, no sooner than 2022-2024…
            At that moment some phony exec will trump “break even”, but it will not be that, it will be that RC have just gone under RI.

          • Thanks Javier. So if I got that right it would mean that the 787 could potentially start to generate some cash flow in about seven years from now, or later. I understand it’s only a ballpark figure, but at least we now have a bone to chew on. 😉

          • “it would mean that the 787 could potentially start to generate some cash flow in about seven years from now,”

            Yes, though I would rather say *no sooner* than 7 years from now, it may well take 9+ years.

          • Thanks again Javier. We know where the floor is but as to the roof anything goes. The most pessimistic among us would say that in this case the sky is the limit. 😉

            By the way Javier as I was listening to the radio earlier today I learned that a study of various websites around the world was carried out to determine how polite or obnoxious comments were as a function of their point of origin. First they discovered that most comments were not as impolite, to put it mildly, than it is generally believed. Second the study revealed that it was in Spain that people were the most friendly with each other. I thought you might want to know that. 😉

            Cheers!

            Normand

          • Hi Javier,

            2019 is much earlier than had been estimated earlier. If I recall correctly you were talking of another seven to ten years. So I am not sure I understand where this sudden surge in productivity comes from. In what ways did you modify your assumptions?

            There is also an additional factor to take into account. This has to do with what I like to call “future considerations”. Like for example “when you will come to Boeing to buy a batch of 737 we will give you a steep discount to compensate you for the delays incurred on your order of 787”, that kind of thing. This type of deal would not impact directly on the 787 manufacturing costs but instead would artificially modify the 737’s. But in reality it belongs to the 787 and if it was accounted for the “proper way” it would push the break-even point still further into the future.

          • Javier: “Yes, though I would rather say *no sooner* than 7 years from now, it may well take 9+ years.”

            But if I do the math with your latest figures I end up with the following equation: 2019 – 2015 = 4 years. Did I miss something?

          • Normand,

            “But if I do the math with your latest figures I end up with the following equation: 2019 – 2015 = 4 years. Did I miss something?”

            You’re correct. The first calculation I did (for which I obtained 7 years) was wrong, as it mixed a first unit cost (that was obtained using a curve of 84%) with a wrong learning curve from the beginning (87%, which should only be applied from 2013, earlier a more agressive curve applied which yielded higher cost reduction).

          • Thanks for the clarification Javier. In 2019 you may have to do the same calculations again, but for the CSeries. 😉

  7. The A320 versus 737 and 757 story is probably done no matter how many twists and turns are spun by Boeing or Airbus.

    IMHO, the fascinating stuff will be the A350-1000 versus the 777-X and the A330Neo/A350-900 combo versus versus the 787.

  8. 17 Inch hurts on long flights and people/trolleys bump into you with those narrow aisles. Read thousands of trip reports everywhere.

    Thing is 787 and 777X economics (per seat) stand or fall with it. That basically stops any further discussion with Boeing & 787 operators.m They invested/ committed for the next 20 yrs. It must be ok. The guys deciding never do economy class anyway.

    • When American put premium econ on the 777 at 9, that was a glimmer of hope. Then the 787 comes out, the premium econ seat goes from premium width to econ minus width. Doesn’t seem very consistent.

      With seatguru telling exactly the specifications of every seat in the world, everyone is interested in the minute details of every seat. Width is a pretty important detail.

      9 on the 787, 10 on the 777, is a 19″(center to center of armrest)

      Econ minus width seats
      787 at 9, 777 at 10, A380 at 11
      Econ standard width seats
      767 at 7, A330 at 8, A350 at 9, 747 at 10
      Econ plus width seats
      777 at 9, A380 at 10

  9. If Airbus really takes its own numbers serious (regarding 1500 VLA), it should dramatically increase its production.
    Given that the B747-8 is dead (as passenger aircraft), and the B777X not counted as VLA, Airbus needs to deliver 75 A380 a year. Given that currently the market doesn’t demand the A380 so hard, there will be the big A380 run in a few years (to catch with the aggregated demand of 1500 aircraft). 100 A380 a year … compared to about 30 currently.

    But seriously: there is a market for the A380, but 1500 appears widely optimistic. Quoting 1501 shows that someone took the output of a model too seriously.

  10. Who says Airbus will sell 1500 A380s in 20 years?! Not Airbus!

    The 1500 total market demand includes freighters and Airbus didn’t expect Boeing to drop the ball, but assumed a 50 % marketshare. ~30-40 A380s per year.

    IMO the old school A380 nay sayers like Aboulafia are starting to forget what they loudly predicted earlier. Bummer is Google has a strong memory..

    • Boeing didn’t drop the ball, the bellies of its 777s are simply too large to justify having exclusive freighters. See how many are being used by airlines from Africa now? Also, based on what you’re saying Airbus had no way of every expecting to have a large portion of the VLA space because they have no freighter a cargo focused company would want? Guess you are right it may be 1,500 but the +300 they have now is all they can get? I would think they are projecting the market so someone will beat a path to their door wanting VLA. You may be right though, because you were right on the A321.

  11. They just hang on orders ( real or imagined ) much too long…
    Btw.
    Kingfisher called, they want to know when their a320’s are being delivered. .
    Memo to airbus :
    Remove outstanding kingfisher
    Orders..you played your little games to win the order race last year..
    68 planes would’ve lost the order race last year..!!!

    • What is it with the “indisclosed customer” inflation in Boeings books?
      Then, you’d never get Airbus bookkeepers to follow your preferences. There are distinct requirements that make an order
      and there are distinct requirements that break an order.
      And those requirements are not what you would like them to be. Customer “dysfunctional” actually makes it more difficult if not impossible to take down contracts.
      See, a contract is “something” between two or more parties and to remove/cancel that “something” you need all those parties. ( Except you are the US government or another supported party 😉

      • Ok. Can you kindly explain the undisclosed order for 10 A380’s for the Hanian Group?

        • 10 frames ? No idea.

          Boeing unidentifieds:
          1000+ frames from ~5000 frames sold overall in the last 5 years. Quite the inflation from 55 in the 5 preceeding years.

          Pray tell.
          Do they now sell off planet to our galactic overlords ;-?

        • Once you figure that out, tell me about doric,amedeo, or whatever they call themselves, order for 20 a380s. .

  12. 20 yr VLA?
    50 747
    100 A380
    300 A380 neo, if they launch it

    150 or 450. Neither will launch a new VLA in the next 20 yr.

  13. @rensim

    As you probably know production of the PW1100 (A320neo) is independent of the production of the (PW1500). The PW1100 is manufactured in United States and the PW1500 is manufactured in Canada. The latter has a head start and like you have suggested the PW1100 will benefit from the experience gained by P&W on the CSeries. It is likely that production will initially be slower at the American facility and they might have difficulty to keep up the pace with Airbus which is planning to EIS the A320neo before the end of the year.

    For the PW1500 it is the exact opposite. We can imagine that the Canadian facility had to slow down somewhat because the CSeries is nowhere near where it was supposed to be at this stage. In fact it is now more than two years behind schedule and flight testing is progressing rather slowly. The A320neo does not have this kind of problems and the order book is near full capacity. I can only suppose that the Canadian facility will have to support the American one until the CSeries is certified, maybe in 2017 or 2018 if they get lucky. 😉

    In Canada the PW1500 can be delivered to Bombardier literally from door to door with a forklift since both manufacturers are located on the same industrial site. Whereas the US facility has to ship the engine from Connecticut to Airbus in Toulouse, Hamburg and eventually Mobile, AL. You have raised an interesting question rensim and I wish someone would investigate this situation beyond my own speculations.

  14. I read your reply to Uwe only after I had sent you my last question. But still, can you estimate the approximate year you think Boeing might be able to manufacture the 787-8 at a lower price than it was sold at. My understanding is that the year would be very different with other variants like the 787-9/10. Another complication would be the fact that early batches of 787-8 were probably sold at much lower price than more recent batches.

  15. Pingback: Boeing 787 recurring costs vs. recurring income | The Blog by Javier

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