Is Boeing finished?

Steve (as 41oo) wrote:

Good posts guys interesting reading. Yes titanium oxide is very white. A380 very big. George, I asked the question is Boeing finished a year ago and it was based on the premise that either Boeing or Airbus had called it right ref hub to hub or direct flights. The jury is still out. However, what I did not of course anticipate is that Airbus and its holding company could be just as venal corrupt self serving and nepotistic as anything in the US

I don't claim to know anything about venality in the management of Airbus. However, in general I would avoid investing in any corporation with substantial ownership and governance by any government.

I'm not sure what motivated your last comparison and slam about supposed venality, corruption and nepotism in the U.S. To what are you referring? Boeing?

With reference to your original proposition, I believe it turns out the contest never was one of hub-to-hub vs direct air route linkages. Both exist now, with neither able to entirely suppress the other. There are no visible (to me at least) market forces that will change that substantially.

Even beyond Airbus' current delivery problems (issues that will eventually be solved), there is the question of fuel economy going forward. Airbus has invested the weight savings of composite materials in a larger aircraft (which requires added structural weight relative to payload); while Boeing has invested it in lower specific fuel consumption. I believe Boeing's is the better bet. Moreover the capital requirements are such that Boeing will be able to field an entire new fleet of models carrying from 120 to 500 passengers, while Airbus is constrained to fielding at most two variants of its new super large aircraft.

Airbus will eventually get over its current delivery problems, though some added government money may be required - and with that, of course goes added government control. Governments generally aren't good at business.

0 Replies

georgeob1 wrote:

I'm not sure what motivated your last comparison and slam about supposed venality, corruption and nepotism in the U.S. To what are you referring? Boeing?

I think both companies have had their difficulties with various scandals... share price manipulation, insider dealing, sexual favours etc. (at least that what I read in the business section).

Right now BAE systems are trying to sell their share in EADS and are not too happy the share price has taken a big hit.

0 Replies

what, you dont like AMTRAK? Do the French and Japanese highspeeds and maglevs generate profits or are they too, like AMtrak, subvention suckers.

0 Replies

Steve (as 41oo) wrote:

georgeob1 wrote:
I'm not sure what motivated your last comparison and slam about supposed venality, corruption and nepotism in the U.S. To what are you referring? Boeing?

I think both companies have had their difficulties with various scandals... share price manipulation, insider dealing, sexual favours etc. (at least that what I read in the business section)

Boeing got in some trouble a couple of years ago for some irregularities and overcharges on government contracts. However, I' m not aware of any troubles in the other areas you mentioned. I'm not suggesting Americans or American companies are above such things - only that it didn't happen at Boeing, which in fact is a fairly straight-laced company.

I suspect the real problems in EADS comes from the direct government influence on the management boards.

I also believe they will get over their schedule problems with the A-380 - if they don't collapse over yet-to-be-revealed financial matters. The production lifetime of such aircraft is measured in decades, and in the long run, the current debacle won't matter much.

0 Replies

the battle rages

http://news.bbc.co.uk/1/hi/business/5152982.stm

but the big question still remains unanswered. Which company has backed the winning horse for tomorrows aviation industry...hub to hub or point to point?

Of course George will say that Airbus deserves to fail because of unfair government backing...(whereas Boeing gets its subsidy through generous military contracts)

but leaving that aside there is a very interesting clash of strategies. Or is there room for Boeing and Airbus?

0 Replies

Steve (as 41oo) wrote:

the battle rages

http://news.bbc.co.uk/1/hi/business/5152982.stm

but the big question still remains unanswered. Which company has backed the winning horse for tomorrows aviation industry...hub to hub or point to point?

Of course George will say that Airbus deserves to fail because of unfair government backing...(whereas Boeing gets its subsidy through generous military contracts)

but leaving that aside there is a very interesting clash of strategies. Or is there room for Boeing and Airbus?

I believe your continued fixation on hub-to-hub vs point-to-point is contrary to the facts. The world aviation system has generous amounts of both and there are no visible factors operating that suggest one orr the other will disappear. 747 and 777 - sized aircraft have served hub to hub networks quite well for a long time now, and it is likely their more fuel-efficient successors will be able to continue. Moreover, just what advantage is a larger, less fuel-efficient aircraft presumed to have?

I do not believe that Airbus "deserves to fail" and I have not said anything here to suggest that. I have said that, other factors beng equal, I would not invest or put my economic bets in a corporation with a substantial degree of government ownership and control. I also expressed the opinion that Airbus will eventually get over its current production problems.

The tiresome recitation of the "generous government contracts" bit for Boeing ignores the fact that the corporate structure that owns and operates Airbus is also Europe's largest government and defense ciontractor. In both cases there are more or less distinct corporate structures for the service of these different markets. In Boeing's case they all have the name 'Boeing'. There has been an enormous consolidation of the defense and aviation industries throughout the Western world - Europe's has been even greater than ours. Hypocritical whining.

Of course there is "room" for both Airbus and Boeing. If either fails another competitor will arise somewhers to fill the gap. Airbus has had a good run for the past decade as a result of some wise choices on investment in fly-by-wire and early composite structures made 20 years ago. Since then they appear to have stumbled and made some bad bets on new investments. The competition will continue. Get over it.

0 Replies

Your intemperate remarks disappoint me. I have nothing to "get over". I'm making no beef either way...you are[/i]. I believe you are roaring about because Thomas and Walter demonstrated that you were wrong on GDP/oil ratios.

0 Replies

I think if you go back to that thread you will find that I accepted their information and acknowledged my error with good humor. I wasn't irritated or intemperate about it at all.

With respect to the Airbus matter, I believe I have been consistently objective and even-handed. If there has been any "roaring about" it was in the opening of this thread, and not my comments. I acknowledged both Airbus' achievements and what I believe are its errors. I did not gloat over the present situation as might have been expected, given the tone of the start of this thread. I did not suggest that Airbus "was finished" as you did of Boeing. On the contrary I suggested that in the long run the current difficulties in Airbus won't count for much.

We do evidently have different opinions about hub-to-hub and point-to-point networks and perhaps the merits of super large aircraft. However these are matters which the unfolding facts will eventually tell the tale. I have a good deal of experience in aviation and even aircraft design. So far, I believe the weight of the evidence is very strongly with me.

0 Replies

georgeob1 wrote:

We do evidently have different opinions about hub-to-hub and point-to-point networks and perhaps the merits of super large aircraft.

no we dont. I admit the title of the thread was provocative, but I could equally have said Is Airbus Doomed? (which looks more likely now than when I first posted). A lot rides on who called it right and as you say time will tell. I'm only interested in debating the relative merits of the different strategies, I think its all still up for grabs.

0 Replies

"Up for grabs"? Whatever whoever is grabbing, it doesn't appear the marketplace is grabbing the Airbus/Hub-Spoke proposition:

Quote:

Costs almost double as Airbus redraws A350

By Rhys Blakely

Airbus today revealed the cost of developing a rival to Boeing's mid-sized 787 jet soared to $10 billion (£5.5bn) after the struggling European planemaker announced a radical revamp of its A350 project at the Farnborough International Airshow ...

... Earlier this month, Airbus said it had booked 117 firm orders for passenger jets in the first half of 2006, less than half the number in the same period last year. Boeing reported 480 orders at the end of July - around four times as many as Airbus over roughly the same period.

The twin-engined Boeing 777 outsold the Airbus's A340 at a rate of 10-to-1 last year as high fuel prices prompted airlines to buy the more efficient model.

Airbus said it had received just 20 orders for long-haul models, which include the A330, A340, A350 and A380. There have been no orders for the A380 so far this year ...

0 Replies

My buddy is a truck driver with a newborn and a new house payment. His wife makes the real money working for Boeing. They might have to move to Washinton state Boeing were I guess things are still going strong.

0 Replies

Right on schedule, another delay Rolling Eyes

Quote:

EADS Confirms Further Year Airbus Delay

By Associated Press
Published October 3, 2006, 12:23 PM CDT

PARIS -- Airbus parent EADS said Tuesday delivery of the flagship A380 superjumbo jet will be delayed by another year until the second half of 2007, prompting some airlines to consider canceling their orders.

Virgin Atlantic Airways Ltd. and Emirates -- the biggest A380 customer -- both said they were examining their options as a result of the delays, which EADS NV said will shave a total of $6.1 billion off operating profit

And also right on schedule, another reorganization -

Quote:

Airbus Restructures to Catch Boeing
As the aircraft manufacturer slips further and further behind archrival Boeing, CEO Streiff admits big changes are needed

Airbus Chief Executive Christian Streiff had no choice. In unveiling plans for a restructuring of Airbus during a Sept. 29 board meeting of its parent European Aeronautic Defence & Space, Streiff tacitly acknowledged what has become painfully evident in recent months: Airbus has fallen behind archrival Boeing (BA ) not only on aircraft orders, but, even more worrisome for the Europeans, on the urgent task of improving efficiency and reining in costs ...

And right on schedule as well, second thoughts are beginning to crop up

Quote:

Emirates to `Review Options' on New Airbus A380 Delay

By Will McSheehy and Andrea Rothman

Oct. 3 (Bloomberg) -- Emirates airline, the largest customer for Airbus SAS's A380, said it will ``review all of its options'' after being told delivery of its first superjumbo will be delayed an additional 10 months to August 2008.

``This is a very serious issue for Emirates,'' spokesman Mike Simon in a phone interview today, reading from a statement written by President Tim Clark. ``We've started a review to see how we can minimize impact on our expansion plans.'' ...

... ``These are very strong words for Emirates and catastrophic news for Airbus,'' Doug McVitie, managing director of the Dinan, France-based aviation consulting firm Arran Aerospace, said in a phone interview. `For Emirates this is a matter of prestige, not of penalties. I'm hearing it's increasingly likely Emirates will defer or cancel half its order, perhaps in favor of Boeing's passenger 747-8 planes.'' ...

... Singapore Airlines Ltd., scheduled to be the first carrier to operate the A380, yesterday said it is waiting for details from Airbus on further delays ...

... Richard Branson, chairman of Virgin Atlantic Airways Ltd., indicated Sept. 27 that the airline will stick with its order for six A380s only if the plane offers the passenger load and range promised.

``We would like the plane if the plane is delivered as originally promised,'' Branson said.

Airbus has told Virgin Atlantic its A380s will also be subject to further delays, spokesman Paul Charles said in a phone interview today. The airline will say more ``this evening or tomorrow morning,'' he said ...

All in all, EADS/Airbus appears to have used up its allocation of screwups - any more patience from customers and shareholders should there be further delay or other nonperformance is not to be expected. Make-or-Break time appears to be here - in all likelihood, this is it; sink or swim. Should there be additional bad news before consistent, volume deliveries start, its reporting well could be the lead paragraph in the EADS/Airbus obituary.

0 Replies

Bad news for Airbus, but I continue to believe that if they get through their current balance sheet & governance issues and succeed in delivering a good aircraft - even if it is yet another year late - they will find a good long-term market for it.

Boeing is now at work on an upgraded, lighter weight & aerodynamically improved version of the 747. This is a relatively low capital requirement way of renewing their dominance of the wide-body market for another decade. On the flip side Boeing hasn't yet delivered their new aircraft either - they could run into problems too.

I am a bit surprised that there hasn't been much debate over changes in terminal design that may be required to support Airbus' new designs. Perhaps this is not the major issue I suspect for the relatively small numbers of major terminals that will be served by the giant aircraft. It wouldn't surprise me to see Airbus come out with a somewhat scaled down version of the A-380.

0 Replies

IF goes a long way - if it gets that far. I honestly don't see EADS/Airbus doomed by this - nor really do I see this as doom for the A380 - just more in a continuing string of bad news. IF this latest organizational reshuffle works out to the satisfaction of the currently disgruntled shareholder base, and IF the A380 gets itself online, delivering and performing satisfactorily, before its prospective customers' patience goes offline, then yes, I agree everything points to a long, successful market presence for the plane. Should either "IF" come up a miss, however ...

And frankly, I really like the technology behind the plane, and tip my hat to its developers - whether A380 itself is "The Wave of the Future", much of what undoubtedly will be the future of aeronautics is there. While prolly not alltogether apropriate to say of an airplane, A380 is a groundbreaker.

I don't discount the challenges faced by Boeing, either; they've stepped way out onto the bleeding edge too, and the thing about the unexpected is that it is unexpected. There's that Pink Floyd lyric ... "I thought I'd thought of everything". I suspect, however, that EADS/Airbus faces greater challenge, and if past performance is future indicator, their future is a bit murkier.

0 Replies

I hopes the best fer both since much Titanium will be spoken for.

0 Replies

f#@$ing geologists !

0 Replies

Well since I started this thread I must admit to being somewhat surprised that the A380 looks more like sinking EADS/Airbus rather than Boeing. Embarrassed

However if they can get planes delivered, and get over the board room shenannigans, I think Airbus have a winner. As I said a year ago, the real challenge to Boeing...one that they seem to have opted out from...is not financial or even delivery of planes on time, but a difference in view of how the airline business will look in 10 years time. Airbus have taken the huge gamble that we will be moving large numbers of people hub to hub. Boeing dont seem to be rising to that...why not? Are they wise or chicken? Its interesting.

0 Replies

Steve,

I believe you are giving excessive weight to a concept of a hub-to-hub network that has become a bit obsiolete in the new global economy with a now much greater number of high volume hubs, linked by now much more variable distances between them.

For the past few decades hub networks have clustered around 1,000NM (nautical mile), 2,500NM, and 5,500NM route segments in the Europe, North America and Asias Pacific. This has been served by a small number of Boeing & Airbus designs, some with variants optimized for the different length route segments. I believe the future network is going to be a good deal less amanable to such clustering and narrow optimization.

Secondly, while increasing aircraft payload and size clearly simplifies terminal operations, the picture with respect to route capacity and operating efficiency & cost is a good deal more complex - and it doesn't necessarily favor increased size and payload. In simplified terms aircraft fuel consumption is determined by weight and, though aircraft volume varies with the third power of size or characteristic dimension, aircraft structural weight (for any type construction material) varies roughly with the fourth power of size. (Scaled up structures are weaker). This, coupled with the fact that aircraft range varies with the logarithm of the ratuio of takeoff weight to landing weight, means that , at a constant payload fraction, size must increase faster than route length and weight faster than size. The net effect is that there is a point at which operating cost per unit of payload increases as aircraft size and capacity are increased. In an era of higher fuel costs this is very significant.

Finally, as we have seen the radically larger A-380 development has tied up most of Airbus' capital making them less agile in a period of changing market conditions that put a premium on agility and adaptability. With fewer concentrated capital requirements Boeing will be more able to adapt their development efforts to unfolding conditions in a market that is likely to require a greater number of tailored designs for the increasingly variable hub network.

In short, I still believe Boeing has made the better development bet. They may well have done it for the wrong reasons or out of mere necessity, but it is likely to be the better bet nevertheless. In many ways the situation is analogous to than in 1967 when Boeing dropped its plans for an SST following the discovery of defects in their swing wing design for an aircraft that could operate efficiently in both supersonic and subsonic modes. The European consortium was left alone with a double delta wing design that imposed large capital requirements, but which offered advantages only in a very narrow market segment.

0 Replies

thanks george late here and im tired will read your post again and comment later

yawn

'night

0 Replies

A380 wraps up technical route proving after a final trip over both poles
30 November 2006

http://www.airbus.com/en/

0 Replies

Is Boeing finished?

Related Topics

Quick Links

My Account

able2know