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Airbus to decide on future of troubled A350

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Flying Fox

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From The Australian -

From correspondents in Toulouse November 15, 2006

AIRBUS would decide before the end of the month on whether to go ahead with its A350 jetliner, with the launch dependent on the success of a restructure, chief executive Louis Gallois said today.


The A350, a long-haul mid-sized plane, has been drawn up by Airbus as a competitor for Boeing's popular 787 Dreamliner and 777 long-haul planes, but its development costs have been estimated at $US10 billion-$US12 billion ($13bn-$16bn).

Mr Gallois said the A350 program depended on implementation of a restructuring plan aimed at slashing production costs, cutting jobs and streamlining suppliers to the Toulouse-based group.

"We will not launch the A350 without Power 8,'' Mr Gallois said, referring to the name of a restructuring plan announced by Airbus at the beginning of October.

"We cannot launch a new program if we are not sure of being in a competitive situation,'' he said.

Speaking at a round table attended by subcontractors of the group and French Prime Minister Dominique de Villepin, Mr Gallois said that a decision on the A350 would be made before the end of November.

The Power 8 restructuring plan is a reponse by Airbus to delays to its superjumbo A380 project, which is running two years behind schedule because of costly production problems.

The plan, which has not been fully revealed by Airbus, has caused anxiety for many European governments and trade unions that are anxious to preserve jobs and avoid factory closures.

Earlier today, the London-based Financial Times newspaper reported that Airbus planned to outsource as much as a quarter of the work for the A350 to subcontractors, worth an estimated $US3.5 bn.

The move, described as a "huge shift'' by an analyst quoted by the FT, would save the company money on the development costs and would counter the effect of the strong euro, which has made Airbus planes more expensive for customers outside the eurozone.

Before deciding to launch the A350, Airbus will also have to decide on how it intends to finance the development costs of the project.




Sounds like more challenging times ahead for Airbus.

I think that that will still go ahead with the A350XWB (in some way/form) because Boeing are having such great success with the 787 I don't think that they can simply sit around without a competing product.
 

NM

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Flying Fox said:
Sounds like more challenging times ahead for Airbus.

I think that that will still go ahead with the A350XWB (in some way/form) because Boeing are having such great success with the 787 I don't think that they can simply sit around without a competing product.
They will have to do something. Airbus orders for A330/A430 series aircraft so fare this year are not looking string. Their published numbers do not yet include the 4 x A330-200 ordered by Qantas last moth, but that order is for interim capacity while awaiting other aircraft types (A380 and 787).

Published orders to date for A330/A340 family for 2006:

A330-200: 18 orders (plus 4 for Qantas)
A330-300: 7 orders
A340-300: 3 orders
A340-500: 0
A340-600: 0 orders (and VS has cancelled their earlier order)

so without the A350, they will be leaving the whole mid-sized market to Boeing. This order book is indicative of the fact that A330 and A340 are at the end of the order life due to the next generation of efficiency promised by the 787 and as yet not matched by Airbus.

Add to that the fact that Qantas is the only customer to place orders for A380 so far this year.

At the last A320 family is selling very well for Airbus (8 x A318, 164 x A319, 198 x A320, 101 x A321, making a total of 467 orders). For how long can the A320 family subsidise the other families?
 

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Totally agree that they are leaving the whole mid-size market to Boeing if they don't do something because as you say the A330 & A340 are coming to the end of their production life-cycle.

I think that you will find that SQ also ordered 9 additional A380s this year -

Singapore Airlines
 

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Flying Fox said:
Totally agree that they are leaving the whole mid-size market to Boeing if they don't do something because as you say the A330 & A340 are coming to the end of their production life-cycle.

I think that you will find that SQ also ordered 9 additional A380s this year -

Singapore Airlines
I guess there must be a difference between a "Letter of Intent" and placing an order. I assume the order is not confirmed until a deposit is paid. This is probably the case also with QF's 8 x A380 and 4 x A330 "order" announced last month and not showing on Airbus' list of orders for the year.
 
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NM said:
I guess there must be a difference between a "Letter of Intent" and placing an order. I assume the order is not confirmed until a deposit is paid. This is probably the case also with QF's 8 x A380 and 4 x A330 "order" announced last month and not showing on Airbus' list of orders for the year.
As I recall, Qantas announced it as a "firm order". This was distnct from the 737's where they simply said they had agreed to buy five more (these don't show up in Boeing's order book either).
 

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A possible decision Friday 24 November!

cnn said:
Report: EADS set to redesign A350

Posted: 1223 GMT (2023 HKT), November 21, 2006

PARIS, France (Reuters) -- Top management at EADS is set to meet on Friday to prepare an official decision next week to launch the redesigned Airbus A350 passenger plane, French newspaper Les Echos said on Tuesday.

It said EADS chairmen Arnaud Lagardere and Manfred Bischoff, as well as its co-chief executives, Louis Gallois and Tom Enders, would meet on Friday to hammer out the final details.

EADS had no immediate comment early on Tuesday.

Gallois has also been head of subsidiary Airbus since early October after costly delays in the A380 superjumbo program shot a hole in its finances at a time when the lower dollar made the European group less competitive with Boeing.

The A350 is Airbus's biggest gamble since the double-decker A380. It aims to counter Boeing's dominance of the fast-growing market for fuel-efficient long-haul twinjets carrying 200 to 350 people.

More...
 

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It would seem that the consensus is that EADS will go ahead with this, despite som concerns around the company.
 
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