Why Airbus Can't Glide on 2005. (Airwars)

Once Airbus builds a product that fills a "Certain Market Niche" the state run Airlines within Europe will buy it. The A380 is a good example. A stillbirth because it does not fit into the trend (Hub and Spoke is not the trend and that’s what the A380 was designed for) this plane is built and BOUGHT by who?

Lufthansa, British, Air France… and what other airlines have ordered this plane? Please tell us who the FEW are outside of the COINCIDENTAL Airbus consortium member states that have bought this massive jetliner? Ahhhhh yes, all just a big coincidence again!

Once Airbus offers a long range jet equivalent to a 747SP what do they buy? Ahhhh yes the A340……..

BTW- guess who owns the FRAPORT and will gladly pay for Terminal modifications, hangars etc? Ahhhhh-yes the FRAPORT who is owned by who?

Within Europe you have private Airlines and Boeing sells even TODAY IN THOSE MARKET NICHES (i.e. Ryan Air and the 737). Some privates buy Airbus and that's just how competition is. Even in the US Airbus sells well and had users such as United. But the State run airlines within Europe favor a certain manufacturer. There is a TREND. To state otherwise can only be supported with polemics, taking statistics out of context of time and markets or airframes that the manufacturers offer. The state run airlines within Europe buy what the state built aircraft builder builds.

Airbus was birthed by the state, it is managed by the state, it is given preferential treatment by the state when it comes to purchases.

Red6

"this plane is built and BOUGHT by who"

Air France China Southern Emirates Etihad Fedex ILFC
kingfisher Airlines Korean Air Lufthansa Malaysia Airlines Qantas Qatar Airways Singapore Airlines Thai UPS Virgin Atlantic

The production of the A380 was sold (until the year 2010) before a single plane was build. I guess Airbus really has no problems with the present situation of the A380 program.

"BTW- guess who owns the FRAPORT and will gladly pay for Terminal modifications, hangars etc? Ahhhhh-yes the FRAPORT who is owned by who? "

Airports around the world built new terminals for the 380. The same was true for the 747 in the past. frankfurt is the second biggest airport in europe and simply is a natural place for the A380. By the way Frankfurt could even be much bigger if the environmental maniacs would end their protests or the US army left earlier their base.

"State run airlines within Europe favor a certain manufacturer"

If you look at the numbers Airbus has problems in the US and Boeing has problems in europe. Additional to that is japan a closed market for Airbus because of the unique japanese system and the strong ties to Boeing. The aviation system has always bee anything but a normal market.
But the real markets are india, china and the rest of asia at the moment. The state owned companies in india prefer oeing while airbus is doing more than well with the private companies.

"Airbus was birthed by the state, it is managed by the state, it is given preferential treatment by the state when it comes to purchases2

it is always the same. The boeing guys say airbus has advantages because of state support an the Airbus guys say this is not true because boeing gets more subsidies.
In the end both are right and both do not really need these things. let the WTO rule and i am not sure if Boeing will be happy with the result because the 787 gets a lot of direct subsidies from the japanese government but also from italy while Airbus only gets loans which were paid back every time until today. the civil aviation business has always been a very political business. That´s why often politicians announce the contracts from Bush to Tony Blair or Chirac.

1. The FRAPORT has as much of Rhein Main as they want. They were building on Rhein Main 10 years ago already. Go to Google earth (Which is old pics BTW) and if you look at all the West Hangers, Southern buildings etc you'd have a clue and wouldn't make such an asinine statement.

FRAPORT gets what they want, when they want, how they want. The environmentalists have no say. Nor do the people living in the surrounding area. The Airport has it’s own little TV channel which they use to appease the “Volk” and by this point most of the tension is not taken serious anymore. Minister president Koch himself sat on the Board of Directors for the FRAPORT until recent, between the state of Hessen, City of Frankfurt and BUND the FRAPORT is 70% STATE OWNED (Another one of those “SO CALLED” private firms). The state is in bed with business and there is a conflict of interest. The “Will of the people” does not matter. Even when you did have a referendum years ago and the overwhelming majority was against the “Startbahn West”, even when nearly EVERY city major and counsel was against the expansion, it all went ahead, 100% full speed ahead.

2. The A380s near exclusive market is within Europe and within those nations that are members of the Airbus consortium. The A380 HAS NOT sold enough planes to recoup the initial investment. It as a project is right now flapping in the wind and people are crossing their fingers, hoping that they just might scrape by and get their initial investment back. To do that – they will need to actually get contracts that “STICK” for about another 100 units. Right now, the only people who are remotely interested are in Asia and are looking at using this jet as a giant cattle car with an “In excess” of 800 passenger load. The A380 is a stillbirth, as the Eurofighter is as well.

The trend in the last years has been AWAY from the “Hub and Spoke” concept. Do you want a connect flight with a hold over, plane transfer etc? No, no one does. People want to fly direct. They want to fly from Frankfurt to Cincinnati WITHOUT a layover in New Jersey. It is the smaller jets with longer range that are selling, like the 787 BECAUSE he can “ECONOMICALLY” do this. The A380 was designed for high capacity long range and about the only market it has is in some of Asia where they will reconfigure this plane as a tight fitting mass cattle car, and in Europe, where the state airlines, state owned and operated Airports will bye and make all necessary accommodations at whatever the cost. When the 747 was built, the Hub and Spoke concept was alive and kicking. Today someone wants to fly from the US and go directly to Leipzig WITHOUT landing in Frankfurt. Look even in Germany and how all these airports are busting out at the seams. In the US it’s the same way.

When the 747 was built, the Hub and spoke concept was there, today it’s fading away. Your comparison between the A380 and the 747 is therefore BS. Today even in the US you would be hard pressed to find an airport willing to do what they did in the 70s for the 747. Why? Passenger air travel has changed. The cost in infrastructure changes, it’s basic concept (A huge super Jumbo) and and and, is a day late and dollar short.

3. Southwest airlines in the US is one example of the small airlines encroaching on the big guys (In this case AA). Southwest will continue to beat the snot out of AA in the Southwest US especially now with Dallas/Love Field and some other issues. The huge mega carriers of past are in for some hard times. Even in Germany you have Ryan air, German Wings…….. These guys are taking business from who? Lufthansa. The consumer will be the profiteer and can enjoy more direct flights AND lower airfares. But even there, you notice a trend I hope? It’s not the big Vater “staat” and their “Gremium” and “Komitee” and an “Ausschuss” that with a bunch of bureaucrats decided to make this so. It was PRIVATE and FREE enterprise. It works! Believe it or not, when and where given the chance German private and free business does VERY well. But in Germany the old institutions want to stay alive. They want a piece of the pie. The Telecom did not volunteer the privatization or look forward to an open and competitive market. In fact they did all they could to keep the market closed.

4. Let’s look at a typical example of the German state mastermind “Beampte” at work. If you go back in time to the days of the monopoly of the Bundespost on the phone system you had your choice of Green, beige, maroon, black or white phone. They had about three models of phone and when you called you could still hear the rotary dials in the background turning as a connection was being made. Worst of all – this antiquated and crappy telecommunications net was expensive WHILE it gave you no choices and poor service. If your kid wanted a Mickey Mouse phone – to bad! It was near communist! Any importation of phones was actually forbidden! Why? Well, you don’t want any competition for the state monopoly do you? In Germany you have Ziess, German Wings, Mercedes, BMW, Audi, Sauer, Walther and so many more PRIVATE and successful stories. The list nearly never includes the old state created, managed or subsidized firms or industry. If you really think about it – Airbus has massive backing in financial subsidies (13 Billion Euro or 15 billion USD by early 2005), a semi closed market where some airlines (not all) within Europe give them preference in purchase, the states (Laender and Federal governments) even build crucial infrastructure (Special hangers at FRAPORT etc) for them and and and. Yet a PRIVATE firm beats them. Even the training of pilots, technicians that work on engines to airframe is subsidized through a state run education system. Most of these things are non-issues; in fact Germany just has a different way of doing things than we do. The fact that a turbine mechanic in Germany is trained not at his or the companies expense; but that the state pays for it is non-issue. No one in the US will use this as a argument. But DIRECT money injections like Airbus gets. Direct subsidies to develop aircraft for the commercial civilian use, intended to compete on a international market is NOT fair trade. All these Bullshit arguments you hear are nothing more than “distracters”. They are intended to draw attention away from the real matter at hand. The US DoD procuring a C17 from Boeing does not equate to a subsidy. These topics are brought up to derail and refocus attention. Airbus is a state CREATED, state MANAGED and heavily state SUBSIDIZED firm. The defense of Airbus is based on polemics. Those who try to defend what is going on have to resort to cheap rhetorical arguments that have no weight.

quote - “The subsidies offered so far for the development of the Airbus A380 “super jumbo” jet amount to $6.5 billion, the largest amount of government funds committed for a single project, according to Allgeier. Airbus has also requested $1.7 billion in launch aid for the A350 model it is about to develop.”

Make some bad decisions? No problem, ask for more money from the government of Germany, France, Spain…..

But don’t worry. Airbus will do just fine. Even though they are behind now they will quickly make up the lost ground. The UK already pledged ~250M USD and other will follow. Airbus despite not having even made back the money on the investment to build the A380 will quickly and soon crap out a A350. Why do you think that is possible?! lol

Red6

1. Frankfurt/Fraport

How long did it take to build the Startbahn West and today how long does it take to build the additional capacity that frankfurt needs to grow. How many years does it take to build a airport in germany in a urban region.
I can understand the people there but you can not have everything jobs growth taxes but please fly over mainz or any other village where i don´t live. look how many people work at the airport frankfurt. The same problem with the airbus factory in hamburg.

2. You just repeat Boeings strategy and future predictions and you might be right or not. It is a growing market and more and more people have to or want to travel by plane. So we will see if the A380 will be a failure or not. It is clearly possible but until now the only facts that we have is that the production is sold until the year 2010 today and i am sure in the incoming four years they will get additional orders. It is clear that Airbus hoped for more especially in the japanese market or other Boeing customers. Airbus thought the 380 will be a door opener for other planes with traditional Boeing customers after boeing decided in the end not to build a new plane in this segment.
This had not really been the case at the moment. They won new customers but i guess not the ones they really wanted.
I can not predict the future if i could my living would be much more easier.
In the end Airbus is more than just a success story and it was a clear Airbus decade. Nobody including several Boeing CEOs thought that this will happen. in the year 1995 Boeing still had a market share of 80%. With the 787 Boeing was able to build a very good plane that clearly has a market and airlines are willing to buy it. Boeing archived a great comeback this year after a lot of problems. You just have to look at the humiliating discussions in the last decade about the several planes that boeing wanted to built but never did. During the last decade Boeing got a real image problem while Airbus was the innovative successful more or less young winner company that now has changed. Boeing shows the world that they can built new innovative planes that airlines are willing to buy.
I believe the airlines have every interest that both companies are doing well. I don´t believe that there is any airline that wishes the old times back where we had not much competition in a lot of segments of the aviation business. Perhaps we will even see additional competitors in the upcoming years and decades.

4. The story about subsidies is very old long and i agree with you. I don´t believe that Airbus needs any governmental support. Airbus archives record profits and the future outlook is more than just good. The shareholder of EADS are huge companies and are able to get the money on the normal markets. Airbus mainly gets loans and pays it back but you are right it is wrong because airbus need not to pay these loans back if the investment is a failure (i know nothing about the rates). Until today this never happened because all investments had been a success in the last years.
Let the WTO rule and end this discussion but as i said i don´t believe that boeing will be happy with the ruling because the 787 gets the "clearer" direct subsidies these billions will have to come from other sources. Not to mention the issue about the US, state of washington etc Boeing connections.
If you look how complicated this issue is you will see how much the different governments are involved in that business and i don´t think that this is a good situation.

In terms of the general problem of state owned companies:

In the last years the government sold much of its shares of the former state owned companies. In the upcoming years this problem will be solved. Lufthansa is a private company as far as i know ( the bund sold it shares in the 90s or so)and had a very successful year with a very positive outlook. Different form a lot of other airlines Lufthansa managed the cost problems very early and very well. Telekom faces a lot of competition that´s why they lose a lot of their market share with the "old" business to other competitors. As far as i know has the BUND no shares of telekom anymore but i am not very sure here.

You simply don’t WANT to understand what a subsidy and unfair trade is. You choose to overlook the fact that Airbus WAS CREATED with ILLEGAL practices.

Just throwing out some bogus “Counter Accusation” in a defense don’t cut it.

Let me explain it this way to you:

1. Imagine we slap a tax on all our private airlines if they want to buy an Airbus. That way we cut Airbus out just as the state run Airlines in Europe did do in the 90s only without a tax or tariff. It was just an understood thing that the state airline will buy the state built airplane.

2. Then what we need to do is give Boeing “Direct” aid in financial injections so they can quickly develop aircraft in a complete vacuum of profits, assets available etc. Can you go to the bank and get a 15 Billion Euro loan? Airbus was getting money injected into it like mad. They were building model after model after model of airframe. This is not possible if you’re a REAL stock traded firm that has to finance it’s own development off of profits generated. If you have REAL shareholders who expect and demand a return on their investment.

The expansion and growth of Airbus is NOT because of their overwhelming successful market strategy, their stream lined and efficient production, new innovative technology which gives them and edge! No, Airbus was made to what it was because it had the financial backing of several governments who pumped 13 BILLION EURO’s just by early 2005 into this consortium and shielded it from competition.

BMW has to pay for the development of a new car with the revenue gained off of past sales, selling off assets, taking on more debt with the promise to pay it back with an interest……..etc. Boeing is the same way. Boeing can’t just go to the US government and say “Give me 1.7 BILLION USD more for free please to develop an A350 quickly!” That is exactly what is happening! Already today Great Britain has pledged ~250 MILLION USD equivalent to Airbus to do just that.

What has happened is that unfair trade has become acceptable! Saying nothing and doing nothing for a decade allowed this to become the norm.

What will happen – Eventually this will fuel a major trade dispute. If the EU wants to play the game of selected trade and big subsidies to create an industry and sustain it, then we need to close our market off to their products as well. Bottom line –We don’t need them as much as they need us / our economy is in much better condition than all consortium member states.

In about 2000 – 2001 the issue was already growing and taking a front seat. However, on the political radar screen the illegal subsidies to Airbus took a back seat after 9-11 for the Bush administration and State Department. Over time you will see a reemergence of this issue – a growth in importance.

I suggest you read the history of the DeHaviland Comet. Research Why McDonald Douglas went under after the DC-10 and then look at Airbus and ask yourself how an Aircraft manufacturer who has had Jetliners AT AIRSHOWS full of high ranking business executives crash into forests, a worse safety record with major retrofits to flight controls and the tail on some of their aircraft because they caused crashes survives so well. In fact, the company just keeps getting business and just keeps pumping out one new model after the other. Take a look at how long Cessna stopped building a few of its airplanes and why? Yet after Several Airbus tails ripping off – one shortly after 9-11 and one just about a year ago in Cuba, despite no feedback controls and no control input limiters which have allowed for airframes to be overstressed and helped lead to several crashes, Airbus moves full speed ahead! The money just keeps flowing.

Airbus was made into what it was by the backing of the state, not some great market strategy, some new technological break through or super efficient production and low cost. Cost was low, and development fast because BILLIONS were pumped into this firm. No normal business has the means to develop at the pace they did, growing as fast as they did, having to build infrastructure etc. It takes money to develop a plane -Lots of it. How does a small firm in 1980 get all that money to develop all those airframes?

http://www.americaneconomicalert.org/view_art.asp?Prod_ID=550

How should i answer this.

I mean you have a clear let me say preference and this is no problem.

1. I do believe that without governmental support Airbus would never happened because of the problems to enter such a market and to compete against competitors like Boeing as a start up. So you are right here but that is a discussion about history and not really worth to do.

2. Boeing never was really interested in the past to bring the issue of subsidies to an end with a WTO ruling. That´s why both agreed to a compromise years ago and there are good reasons for this. As i said perhaps a lot of boeing fans will really be disappointed about the WTO ruling. I believe both companies need no subsidies and shouldn´t get support from taxpayers money. I am interested in economic issues and i am not a airbus or boeing supporter. All the airbus bashing here simply ignores every economic fact of the last decades. Boeing had a very good year and perhaps we see a new boeing decade but who knows how the 350 380 and the 787 will perform when they are up in the air until today not a single one has been delivered to a customer. The 320 will dominate their segment until boeing builds a new plane. The same is true for the 777 that performs very well.

You prefer to ignore the things about boeing fine. Boeing went to the japanese government and got billions for the development of the 787 given the fact that 35% are made in japan and supported by the japanese taxpayer. Both companies produced a lot of papers accusing the other site of unfair subsidies and so on. The WTO will rule and we will see the result and we both will be happy when the subsidies have an end. if that will ever happen. As i said EADS has no problems to get that money from the markets and that´s the way it should be for both companies.

3. If you believe that the reason for the success of airbus are subsidies you didn´t take Airbus serious enough. That was the mistake of several Boeing CEOs in the past.

Both have a positive outlook for the next years and will enjoy good years.

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