FEDEX cancels A380 orders

[AEROMONKEY]

Things are gettin worse at Airbus....GO BOEING!!

http://edition.cnn.com/2006/BUSINESS/11 ... index.html

[Troubleshot]

This could start a land slide effect...bad news for Airbus

[...]

does this mean FedEx won't be building a huge Euro-hub in CDG?

[AEROMONKEY]

thats exactly what it means....they're now planning to build in YQT.

[...]

Great Chinese food in YQT..Mr. Chinese rocks..ask for Yeng tel 'em Dog sent ya...it was there where my fortune cookie told my to stay on my meds.

[Clodhopper]

Probably won't be the last cancellation either.

[ahramin]

Actually clodhopper, it is the first cancellation.

[Clodhopper]

Actually clodhopper, it is the first cancellation.

Indeed. And duly noted.



All we need is EK to pull out. Bye bye A380.

[Golden Flyer]

Well this A380 is turning out to be another MD-80

[Clodhopper]

Well Boeing didn't do so well with the 717 (basically a high-tech MD-80 variant). But they didn't bank a huge part of their entire future on it...

[hind sight]

Well this A380 is turning out to be another MD-80

What exactly happened with the MD-80?

[Clodhopper]

Well this A380 is turning out to be another MD-80

What exactly happened with the MD-80?

According to the Airliners.net aircraft history, the MD-80 family actually performed rather well:

Total MD-80 series (inc MD-87) 1191 aircraft, of which 132 MD-81, 569 MD-82, 265 MD-83, 150 MD-88 (and 75 MD-87, see separate entry).

Not bad for an a/c that was certified and delivered in the early 80's and ended production in 1997. If you go back to when it was announced, then its 20 years worth of orders.

Would the A380 have 1,200 orders in 15 years? Probably not. Its been around 10 years now since Airbus really began talking about its "Super Jumbo" and they're at around 150 orders. If you take away the 15 from Fed-Ex, then you're at 135 after roughly 10 years (6 if you go from the 'official announcement' in 2000).

MD-80 - roughly 60 a/c per year (but a 260 a/c fleet at American Airlines at one point)

A380 - roughly 25 a/c per year (and with the most reasonable large order already placed, for 45 from Emirates).

With the series of delays Airbus is facing, they're gonna be in rough shape to take advantage of their predicted 1,200 very-large-a/c market by 2020.

I think the A380 will turn out to be far too much of a niche aircraft compared to most.

[goldeneagle]

I think the A380 will turn out to be far too much of a niche aircraft compared to most.

Interesting. For those of us that can remember that far back, similar comments were made regarding the 747.

The 380 project is far enough along now, it will be completed, and the aircraft will be offered for sale. Once it reaches the status of 'certified, in production', then the sales game changes. Today, selling the 380 is still 'selling a dream', and involves an element of trust for a client to jump in. Once it's out, flying the line, and it will get there now, to far along to not arrive, sales becomes a simple case of 'cost per seat mile' and there will be an operational history to back it.

Concorde was killed by politics (banning of supersonic overflights in north america), the 380 doesn't have that problem. The project will live or die on the cost per seat mile when finally in the fleet.

Another factor that doesn't show in the blurbs in the news today, the fedex cancellation will have been affected significantly by the plunge in value the us dollar has taken over the last few years. If you are a buyer, with us dollars to spend, the continual slide of it's value does make products valued in any other currency look less and less attractive on an almost daily basis.

This cancellation reflects the delay, Fedex needs the capacity before airbus can deliver, so they go elsewhere. When the 380 hits the air in a freighter form, if it's a penny cheaper per pound than the Boeing to operate, you can bet your last dollar, they will immediately start popping up in the purple and white paint job, just as fast as Fedex can find buyers for the Boeings.

[Clodhopper]

This cancellation reflects the delay, Fedex needs the capacity before airbus can deliver, so they go elsewhere. When the 380 hits the air in a freighter form, if it's a penny cheaper per pound than the Boeing to operate, you can bet your last dollar, they will immediately start popping up in the purple and white paint job, just as fast as Fedex can find buyers for the Boeings.

If that was the case, why hasn't FedEx upgraded their fleet sooner with a major overhaul of newer generation freighters over the MD-11, 727, A310 fleet they currently operate? I'm sure newer 757, 767, and 747 frieghters have lower per pound costs.

They cancelled the A380 because Airbus can't deliver, and I don't see them going back. If they get the 777-200LRF those will be around for quite a while. They could replace other types with the A380, but I don't think they'd turn right around and sell off the new types.

[Lommer]

GE is, as usual, bang on. The A380 will happen, and I would predict that it will see service for longer than the anticipated 20 years. As it get proven and has the kinks worked out, I suspect it will be a very popular aircraft - especially amongst cargo carriers. Make no mistake, airbus is taking a huge hit on the A380 which gives Boeing a good chance to bounce back to an equal footing, but in the long run I think the A380 will be a success.

[Clodhopper]

GE is, as usual, bang on. The A380 will happen, and I would predict that it will see service for longer than the anticipated 20 years. As it get proven and has the kinks worked out, I suspect it will be a very popular aircraft - especially amongst cargo carriers. Make no mistake, airbus is taking a huge hit on the A380 which gives Boeing a good chance to bounce back to an equal footing, but in the long run I think the A380 will be a success.

I don't doubt the A380 will be around for a while, if they can find the customers. The market should be there for the forseeable future. And they seem to have enough interest to keep it going even after all of what they've been through delay- and cost-overrun-wise.

Remember, the DC-10 was considered an amazing aircraft when it debuted, but a few accidents and mishaps and boom! Public (mis?)conception wins out: airlines avoided it like the plague.

I know financial and delivery delay problems aren't as crushing to an airplane's image as a shot of it burning on the evening news, but people do remember. And financially, those airlines already taking a huge hit on the A380 now are going to remember when it comes time to consider buying more of them, or the next Airbus product on the line (the already delayed A350).

I certainly hope that Airbus can pull through this and keep up with Boeing. There is nothing better for the consumer than competition (in most cases).

[cyyz]

It's another Concorde.

[goldeneagle]

It's another Concorde.

Only if boeing can convince the regulators to regulate it out of the skies the way they did with concorde.

[invertedattitude]

Boeing Equal footing with Airbus?

What the hell are you talking about? Boeing has always had superior product and done better in sales, even last year... what does that refer to?

[Clodhopper]

Boeing Equal footing with Airbus?

What the hell are you talking about? Boeing has always had superior product and done better in sales, even last year... what does that refer to?

If you're referring to total orders, sorry to burst your bubble av8r:

TOULOUSE, France (UPI): Airbus SA managed to beat archrival Boeing Co. last year in the race to book the most aircraft sales. The Toulouse, France, aerospace company notched 1,055 net new orders in 2005 compared to Boeing's 1,002, The Wall Street Journal said Tuesday. While each company broke its own sales records, and in the process topping the industry's previous record for total sales of 1,631 set in 1989, the value of Boeing's orders exceeded those of Airbus.

The link for you click-happy non-believers

[cyyz]

It's another Concorde.

Only if boeing can convince the regulators to regulate it out of the skies the way they did with concorde.

Interesting, they didn't mention that on the concorde special, all they said was that they had 250 orders, and then it was delayed and the 747 came out and they lost 150 orders and then the tax man stopped footing the bill for it....

But if you're right, that's just silly... Regulating a product you're spending tax dollars on making..

[ei ei owe]

[quote="Clodhopper
If you're referring to total orders, sorry to burst your bubble av8r:[/quote]

Well I guess it's no contest if Airbus ships out 60 more 319's compared to 777's, 47's and 67's. Jesus, even Juicy can buy a 319 with his wages.

[goldeneagle]

It's another Concorde.

Only if boeing can convince the regulators to regulate it out of the skies the way they did with concorde.

Interesting, they didn't mention that on the concorde special, all they said was that they had 250 orders, and then it was delayed and the 747 came out and they lost 150 orders and then the tax man stopped footing the bill for it....

But if you're right, that's just silly... Regulating a product you're spending tax dollars on making..

Concorde died when the american regulators locked it out of east coast airports with noise concerns, and cross continent stuff with bans on supersonic transits. It was interesting, because during this period when all the rules were being made to prevent concorde from operating in north america, the SR-51 was screaming back and forth making all kinds of records, yet if concorde did it, that was somehow going to 'harm the children'.

After being denied _most_ of the east coast, all of the west coast, and all cross continent travel in north america, concorde was a product with no market. A lot of other countries quickly made 'me too' regulations, they didn't want to be left off the bandwagon.

Concorde was LOUD, inefficient, and expensive. Funny, the original 747 was LOUD, inefficient, and expensive. I wonder how different the skies would look today if the SST models had recieved the same amount of r&d towards 'quiet and efficient' that the subsonic stuff got over the years. It's a mildly academic subject though, the sweet spot in terms of 'drag produced per pound carried' still lies in the subsonic range, and always will, all the research in the world wont change the fundamentals of physics, only help us understand and apply them better. In terms of development, the Concorde was to SST as the 707 was to subsonic transport jets. It certainly would be interesting to see what would have come out of it, had the same $$ been spent researching and developing SST as went into the progression from 707 thru to modern designs...

[pelmet]

But the 747 doesn't create sonic booms. And The Concorde would not have been restricted as much as possible to desert locations, Military operating areas, and flights over water on its very occasional flights that had a lot more priority than movie stars sipping champagne. And if you think the Yanks are bad for noise abatement, take a look at Europe. Too bad. I would love to have flown that machine, but I sure would love to see the Make-work A-380 project flop.

[Driving Rain]

http://ca.news.finance.yahoo.com/091120 ... ncels.html

CAE wants other FedEX contracts after delivery company cancels Airbus order
Thu Nov 9, 4:32 PM


By Luann Lasalle

MONTREAL (CP) - Flight simulator maker CAE Inc. (CAE.TO) should be able to get replacement contracts with FedEx Corp. (NYSE:FCX) after the U.S. delivery company cancelled its order for 10 Airbus A380 freighters, CEO Robert Brown said Thursday.

CAE reported an 81 per cent increase in earnings juring the July-September quarter, despite flat overall revenue in the second quarter of the Montreal-based company's 2007 fiscal year, which ends next March.

Brown said CAE is a preferred supplier of FedEx, which cancelled its order for the double-decker jets earlier this week and placed an order with competitor Boeing Co. (NYSE:BA)

CAE had only just started to do some work on the flight simulators for the cancelled FedEX order, Brown added.

"At this point, we don't think there's a lot of risk for us," he said.

Brown said there could be replacement contracts for other simulators such as Boeing 757 and 777.

"With the strong possibility that they (FedEx) could cancel, we are in discussions with them to see if there are other simulators to replace them," Brown told a conference call with analysts to discuss the quarterly results.

FedEx announced an order for 15 Boeing Co. 777 freighters worth US$3.5 billion at catalogue prices and blamed the A380 holdups for its decision - the first cancellation for the program, now two years behind schedule.

In its second quarter results, CAE said it had net income of $30.9 million, 12 cents per share, up from year-ago earnings of $17.1 million, seven cents per share.

Revenue was $280.4 million compared with $280.3 million.

Sales in CAE's military simulation segment, which tend to be lumpy from quarter to quarter, were down 32 per cent from a year earlier at $64.3 million.

The company cited "lower activity on certain European programs and lower revenue on some U.S. programs," compared with strong year-earlier defence business.

But civilian simulator sales were up 51 per cent to $84.2 million. The civil simulator division's operating income increased to $18.6 million from $3.4 million thanks to strong deliveries and a favourable profit mix, improved program execution and money from Investissement Quebec to cover research and development costs.

"We do not anticipate benefiting from all of these factors on a regular basis going forward," CAE said.

Brown said 17 full flight simulators have been sold so far and he expects that to increase to 25 for the 2007 financial year.

Civil training and services brought in quarterly revenue of $78.4 million, off by $1 million from a year earlier.

Military training and services revenue edged up six per cent to $53.5 million.

CAE ended the quarter with an order backlog worth $2.58 billion, up from $2.43 billion a year ago.

Brown said CAE now has a diversified base of business with a balance between the civil and military markets, a balance he wants to keep going forward.

He also said that CAE hopes to be part of the U.S. Joint Strike Fighter (JSF) program.

The project, valued at hundreds of billions of dollars over several decades, will build a next-generation warplane that will be used by the U.S. Navy, Air Force and Marine Corp. as well as be modified for use by defence forces in Canada and other countries.


CAE closed at 10.06, down 13 cents, Thursday on the Toronto Stock Exchange.