7 ms·

Great news for both, Airbus needed that to save the program, finally have a chance to reach profitability, and solve the chicken and egg problem of no-one is bu

by nolok 9y ago

Great news for both, Airbus needed that to save the program, finally have a chance to reach profitability, and solve the chicken and egg problem of no-one is buying it because it looks like it will be stopped, it will be stopped because no one buys it. Emirates, having half the frames out, keeps the program going which means they don't get trapped in maintenance hell. Funny to look back at the messages a few days ago here on HN saying it will "obviously not happen".

caio1982 9y ago
I will save my personal opinion on the A380 for later but about previous comments on HN you always have to remember the crowd is a bunch of professional guessers. It stops to be funny quite fast...
mpweiher 9y ago
Yep, I thought the public musings about halting production were simply putting the pressure on Emirates. Seems to have worked. https://news.ycombinator.com/item?id=16152902 https://news.ycombinator.com/item?id=16152902
- shadowbantruth 9y ago
  Nobody outside of HN thinks anything of HN. I'd be deluded to believe otherwise
  - distances 9y ago
    You misunderstood the comment. Parent was talking about public musings of Airbus.
notahacker 9y ago
What we've witnessed over the last few months has basically been the negotiation process. Emirates know they're the anchor customer with a strong negotiation position and so expect even bigger discounts than airlines normally get from airframers by playing hardball, and humiliating Airbus by not making the anticipated airshow order. Airbus's only counter was to look actually willing to accept the possibility of writing the whole programme off, with negative implications for Emirates' own prospects
- walkingolof 9y ago
  Or the reverse, Airbus talking allot about stopping production knowing that Emirates built their business case around the plane....
  - throwwwwaway9 9y ago
    +1. Parts and maintenance might have just tripled in price and awaiting time. Emirates protected their investment at a low price...plane for plane, why not get this and insure that someone will be there for the previous order's planes.
    - MR4D 9y ago
      Parts and maintenance are negotiated as part of the purchase. For an airline not to do so would be economic suicide. Also has the side benefit of locking in gradual prices increases for the manufacturer.
      - notahacker 9y ago
        Emirates does its own A380 heavy maintenance, but yeah, they'll have guaranteed the parts supplies
  - sho 9y ago
    > Emirates built their business case around the plane Absolutely. Emirates needed this deal just as much as Airbus. At the end of the day AB has multiple other profitable lines to fall back on, especially their cash cow 32X program. For Emirates the 380 is irreplaceable, not even by the 777-10, if it was even flying yet, which it isn't. I have no doubt EK got a good deal but Leahy isn't stupid. He was playing hardball too. And interestingly, it has not been specified yet whether this order is for the current model or the plus..
fyfy18 9y ago
The real test will be how well they fare on the second hand market, when Emirates begin to retire their first aircraft over the next few years. Last year an A380 that had been with Singapore Airlines for 10 years was put into storage until a buyer is found [0], and an Irish leasing company decided to start their own airline as they couldn't find anyone to lease their A380s [1]. [0] http://www.traveller.com.au/first-retired-a380-superjumbo-parked-at-tarmac-aerosave-awaiting-sale-or-scrap-gziiuo http://www.traveller.com.au/first-retired-a380-superjumbo-pa... [1] http://www.telegraph.co.uk/travel/news/leasing-company-forced-to-start-own-airline-because-nobody-wants/ http://www.telegraph.co.uk/travel/news/leasing-company-force...
- alistairSH 9y ago
  Is 10 years really the expected (first-owner) lifespan of a wide-body? Is that typical for narrow-bodies as well? Seems short, given the cost to purchase.
  - notahacker 9y ago
    Well there is no "typical" for an A380-sized widebody and Emirates might have no choice but to keep most of theirs until the end of their lifespans (unless there's a freighter conversion programme). But in general a commercial passenger aircraft lasts around 25 years, so 10 years isn't really a short period of ownership for a first owner (and is a fairly long lease). Fixed maintenance intervals often require the aircraft to be almost totally rebuilt within that timescale, which is a good opportunity to transfer owner/operator and refit to some other airline's spec. Most airframes - the A380 is an exception - can be readily resold or leased on a liquid market. There's big depreciation over the first few years, sure, but operating costs are bigger than capital costs, and newer aircraft are less thirsty for fuel. Airlines purchasing aircraft also usually get big discounts, and have specialist financial institutions willing to front up the capital and eat some of the downside risk on the depreciation. Airlines leasing aircraft typically do so for periods of more like five years, with lease extensions at their discretion.
    - skgoa 9y ago
pwaai 9y ago
I wonder if any of these Airbuses will be decked out as a private airplane. Really curious to know how the extra room can be used.

by nolok 9y ago

caio1982 9y ago

I will save my personal opinion on the A380 for later but about previous comments on HN you always have to remember the crowd is a bunch of professional guessers. It stops to be funny quite fast...

mpweiher 9y ago

Yep, I thought the public musings about halting production were simply putting the pressure on Emirates. Seems to have worked. https://news.ycombinator.com/item?id=16152902 https://news.ycombinator.com/item?id=16152902

shadowbantruth 9y ago
Nobody outside of HN thinks anything of HN. I'd be deluded to believe otherwise
- distances 9y ago
  You misunderstood the comment. Parent was talking about public musings of Airbus.

notahacker 9y ago

What we've witnessed over the last few months has basically been the negotiation process. Emirates know they're the anchor customer with a strong negotiation position and so expect even bigger discounts than airlines normally get from airframers by playing hardball, and humiliating Airbus by not making the anticipated airshow order. Airbus's only counter was to look actually willing to accept the possibility of writing the whole programme off, with negative implications for Emirates' own prospects

walkingolof 9y ago
Or the reverse, Airbus talking allot about stopping production knowing that Emirates built their business case around the plane....
- throwwwwaway9 9y ago
  +1. Parts and maintenance might have just tripled in price and awaiting time. Emirates protected their investment at a low price...plane for plane, why not get this and insure that someone will be there for the previous order's planes.
  - MR4D 9y ago
    Parts and maintenance are negotiated as part of the purchase. For an airline not to do so would be economic suicide. Also has the side benefit of locking in gradual prices increases for the manufacturer.
    - notahacker 9y ago
      Emirates does its own A380 heavy maintenance, but yeah, they'll have guaranteed the parts supplies
- sho 9y ago
  > Emirates built their business case around the plane Absolutely. Emirates needed this deal just as much as Airbus. At the end of the day AB has multiple other profitable lines to fall back on, especially their cash cow 32X program. For Emirates the 380 is irreplaceable, not even by the 777-10, if it was even flying yet, which it isn't. I have no doubt EK got a good deal but Leahy isn't stupid. He was playing hardball too. And interestingly, it has not been specified yet whether this order is for the current model or the plus..

fyfy18 9y ago

The real test will be how well they fare on the second hand market, when Emirates begin to retire their first aircraft over the next few years. Last year an A380 that had been with Singapore Airlines for 10 years was put into storage until a buyer is found [0], and an Irish leasing company decided to start their own airline as they couldn't find anyone to lease their A380s [1]. [0] http://www.traveller.com.au/first-retired-a380-superjumbo-parked-at-tarmac-aerosave-awaiting-sale-or-scrap-gziiuo http://www.traveller.com.au/first-retired-a380-superjumbo-pa... [1] http://www.telegraph.co.uk/travel/news/leasing-company-forced-to-start-own-airline-because-nobody-wants/ http://www.telegraph.co.uk/travel/news/leasing-company-force...

alistairSH 9y ago
Is 10 years really the expected (first-owner) lifespan of a wide-body? Is that typical for narrow-bodies as well? Seems short, given the cost to purchase.
- notahacker 9y ago
  Well there is no "typical" for an A380-sized widebody and Emirates might have no choice but to keep most of theirs until the end of their lifespans (unless there's a freighter conversion programme). But in general a commercial passenger aircraft lasts around 25 years, so 10 years isn't really a short period of ownership for a first owner (and is a fairly long lease). Fixed maintenance intervals often require the aircraft to be almost totally rebuilt within that timescale, which is a good opportunity to transfer owner/operator and refit to some other airline's spec. Most airframes - the A380 is an exception - can be readily resold or leased on a liquid market. There's big depreciation over the first few years, sure, but operating costs are bigger than capital costs, and newer aircraft are less thirsty for fuel. Airlines purchasing aircraft also usually get big discounts, and have specialist financial institutions willing to front up the capital and eat some of the downside risk on the depreciation. Airlines leasing aircraft typically do so for periods of more like five years, with lease extensions at their discretion.
  - skgoa 9y ago

pwaai 9y ago

I wonder if any of these Airbuses will be decked out as a private airplane. Really curious to know how the extra room can be used.