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Airbus Orders Collapse As Airlines Retrench

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http://www.telegraph.co.uk/finance/newsbys...s-retrench.html

Airbus's order intake fell to €6.19bn (£5.3bn) from €44.1bn the previous year, according to results released by parent company EADS.

The net number of commercial planes ordered in the first six months of the year was 68, compared with 487 in the same period in 2008.

Still, Airbus's revenue was down only 1pc on last year to €13.95bn, as it delivered 254 aircraft to customers, nine more than last year.

The company, along with US rival Boeing has said that its substantial order book, built up during the boom years, will support earnings and prevent it having to make large cuts in production.

Ryanair's chief financial officer Howard Millar yesterday poured cold water on that theory, saying the planemakers were "in denial."

"They're thinking they got a huge backlog which will see them through but in reality that backlog is very shaky and could disappear. They'll end up having to deal with people like Ryanair," he said. Mr Millar claimed Airbus would not negotiate with the budget airline on the grounds it could not meet Ryanair's pricing requirements.

EADS said today first-half earnings before interest and taxes fell 23pc to €888m, hit by foreign exchange weakness and lower prices for aircraft.

That's one huge drop in orders, the manufacturing recovery is here......

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Guest KingCharles1st

Another timely indicator of WHY house prices are about to soar...

:rolleyes:

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they will close many european plants and relocate to china to save opn running costs when the boom years order book runs out

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they will close many european plants and relocate to china to save opn running costs when the boom years order book runs out

Airbus have already built their first plane in China this year It'll go recovery or not

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I have no less than 4 good friends who work for Airbus manufacturing components. They all have large mortgages too. Logic says....

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Dieinair no. 2:

"...but in reality that backlog is very shaky and could disappear. They'll end up having to deal with people like Ryanair."

My airline pilot sister tells me that a big proportion of airliner sales in the last few years derive from the major airlines upgrading to more advanced models from relatively new planes on the back of easy credit, and that they can and will keep their existing aircraft in the sky a lot longer if that credit isn't forthcoming. When a plane is bought and paid for, the extra cost in fuel and maintenance compared to the next generation model is a lot less than the interest payments on the capital expenditure for a newer plane. Because of the downturn after 9/11, Northwest kept a fleet of 20 to 30 year-old DC-10s in regular long-haul service for around five years longer than they'd intended to. They cost a bomb in maintenance, repairs and higher fuel consumption, but newer planes would have cost a substantially bigger bomb in loan and interest payments. Apparently one of the reasons BA isn't haemmorhaging money as fast as some of its competitors is that it hasn't bought any new aircraft for quite a few years now, and therefore its capital fleet costs are among the lowest of the legacy airlines.

So after all that R & D on a new generation of airliners (A380/747-800 & 787/A350), Airbus and Boeing could be selling precious few of them in the next few years...

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Related to which, if I understand correctly, Ryanair's business model depends on being able to 'flip' planes, analogous to a way a large company runs its car fleets. It buys new 737s or A320s in bulk and at a hefty discount, runs them into the ground (metaphorically, unless they really do cut back on pilot training!) and then just as your big company will send its three year-old Mondeos to auction, sells them onto Air Mugabe (or equivalent) just as they start to become maintenance intensive.

However, if the likes of Ryanair stop being able to buy new airliners 100 at a time and at a hefty discount from the list price, perhaps because of credit drying up...

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In the past Ryanair bought when the larger airlines cancelled orders, however the larger airlines have learnt that Ryanair have been able to keep prices as low as possible by purchasing planes this way. Hence why larger airlines are reluctant to cancel orders and are far more cautious when buying new planes for the the fleet.

Ryanair are in denial if they think they will be able to get airbus craft at a discount, and boeing are reluctant too as the major airlines discovered how much Ryanair were paying.

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I understand the planned date for retirement of the last B52 bombers is 2040 - they entered service in 1955!!!

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In the past Ryanair bought when the larger airlines cancelled orders, however the larger airlines have learnt that Ryanair have been able to keep prices as low as possible by purchasing planes this way. Hence why larger airlines are reluctant to cancel orders and are far more cautious when buying new planes for the the fleet.

Ryanair are in denial if they think they will be able to get airbus craft at a discount, and boeing are reluctant too as the major airlines discovered how much Ryanair were paying.

Perhaps they'll move to Tupolev???

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Perhaps they'll move to Tupolev???

do you think you could pay a supplement to go in an airbus or boeing?

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do you think you could pay a supplement to go in an airbus or boeing?

Perhaps we've stumbled upon a new business model for budget airlines, charge more for the better manufactured planes.

How much surcharge would it be to fly in a airbus/boeing?

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Just had another thought perhaps they should charge extra if passengers which to wear clothes on the flight, all adds to the weight.

You could also charge extra for having an all nude cabin crew?

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Apparently one of the reasons BA isn't haemmorhaging money as fast as some of its competitors is that it hasn't bought any new aircraft for quite a few years now, and therefore its capital fleet costs are among the lowest of the legacy airlines.

Yes, and though BA, to be fair and just, does have a pretty good safety record, it might be worth focussing the mind towards a spiritual dimension when you next take off in a 14-20 year old 747 or similarly aged 737. There only so much recycling to be done before the core structure of old aircraft makes them a candidate for the knacker's yard. Just one more flight anyone?

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Related to which, if I understand correctly, Ryanair's business model depends on being able to 'flip' planes, analogous to a way a large company runs its car fleets. It buys new 737s or A320s in bulk and at a hefty discount, runs them into the ground (metaphorically, unless they really do cut back on pilot training!) and then just as your big company will send its three year-old Mondeos to auction, sells them onto Air Mugabe (or equivalent) just as they start to become maintenance intensive.

You can't really run an aircraft into the ground. If they didn't maintain it according the regulatory and manufacturer's standards then they would get grounded or banned from EU airspace. New aircraft will have less defects and out of phase maintenance needs though.

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Dieinair no. 2:

"...but in reality that backlog is very shaky and could disappear. They'll end up having to deal with people like Ryanair."

My airline pilot sister tells me that a big proportion of airliner sales in the last few years derive from the major airlines upgrading to more advanced models from relatively new planes on the back of easy credit, and that they can and will keep their existing aircraft in the sky a lot longer if that credit isn't forthcoming. When a plane is bought and paid for, the extra cost in fuel and maintenance compared to the next generation model is a lot less than the interest payments on the capital expenditure for a newer plane. Because of the downturn after 9/11, Northwest kept a fleet of 20 to 30 year-old DC-10s in regular long-haul service for around five years longer than they'd intended to. They cost a bomb in maintenance, repairs and higher fuel consumption, but newer planes would have cost a substantially bigger bomb in loan and interest payments. Apparently one of the reasons BA isn't haemmorhaging money as fast as some of its competitors is that it hasn't bought any new aircraft for quite a few years now, and therefore its capital fleet costs are among the lowest of the legacy airlines.

So after all that R & D on a new generation of airliners (A380/747-800 & 787/A350), Airbus and Boeing could be selling precious few of them in the next few years...

It tends to be true for a lot of things mechanical that overall costs will be similarish whether you have newis or fairly oldish (not antique). The cost of money is more on the newer item but the cost of maintainace and repairs higher for the older item.

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Perhaps we've stumbled upon a new business model for budget airlines, charge more for the better manufactured planes.

How much surcharge would it be to fly in a airbus/boeing?

pay to buy your ticket - pay an added fee to land safely!

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