QUOTE AND NEWS
Clusterstock  Jun 28  Comment 
PARIS (Reuters) - Britain is an indispensable part of the European aerospace industry, the head of Airbus Group said on Wednesday, softening earlier comments he made on the country's shock referendum decision to leave the European Union. Airbus...
Flightglobal  Jun 28  Comment 
German flag-carrier Lufthansa s first Airbus A350-900 is nearing structural completion at the Toulouse final assembly line.
Flightglobal  Jun 28  Comment 
Airbus has found a new role for its veteran A320 prototype, having converted the airframe into an airborne laboratory.
Flightglobal  Jun 28  Comment 
French investigators have repaired the flight-data recorder of the EgyptAir Airbus A320 which crashed in the Mediterranean Sea in May.
Clusterstock  Jun 27  Comment 
By Tim Hepher PARIS (Reuters) - As Western planemakers seek to finalize lucrative deals to sell some 200 jets to Iran, doubts are growing over the sale of a dozen Airbus A380 superjumbo jets to the country's national flag carrier, several people...
Flightglobal  Jun 27  Comment 
Although not everyone has revealed their cards yet, with two weeks or so to go, this year s Farnborough air show looks like being one of the most exciting in years for significant aircraft appearances. Both re-engined single-aisle contenders the...
Clusterstock  Jun 26  Comment 
On Thursday, an Air Serbia Airbus A330-200 landed at New York's JFK International Airport. It's the first time the Serbian capital of Belgrade has had direct air service to New York in 24 years.  The arrival of this Serbian Airbus embodies...
Motley Fool  Jun 26  Comment 
Widebody aircraft demand has slowed significantly in the past two years -- but so far it's not a big problem for Boeing and Airbus.
Flightglobal  Jun 24  Comment 
Airbus Group is referring to the UK decision to leave the European Union as a wake-up call , but has yet to assess the competitive impact of the result.
guardian.co.uk  Jun 24  Comment 
JP Morgan, Airbus and Ford say they will review UK operations as analysts warn of serious implications for City workforce Thousands of jobs are at risk in the UK after some of the world’s largest companies warned they could relocate their...




 
TOP CONTRIBUTORS

The European Aeronautic Defence and Space Company (EADS.PA) is the dominant aerospace company in Europe today. Its largest subsidiary, Airbus S.A.S., is an aircraft manufacturing company based out of several European nations, with the majority of its operations in France, Germany and Spain. The majority of EADS's profits arise from Airbus' operations.

Airbus and its primary competitor Boeing control most of the commercial airplane industry. Recently, Airbus has faced a barrage of difficulties stemming from delays with both the A380 and A350. These delays could cost Airbus more than $4B in the form of penalties, higher production costs and order cancellations. As a result of these delays Airbus is also significantly behind Boeing in terms of its current production cycle. It may be years before they can launch a new model that can effectively compete with Boeing's latest aircraft. In a positive development for EADS, the company beat 1Q08 sales and earnings forecasts on the strength of strong sales across all major divisions other than Airbus.

So true. Honesty and everything recgoniezd.

Trends and Forces

Future of Aviation: Hub and Spoke vs. Point to Point

In investing such a great deal of its resources towards the development of the A380, Airbus has made a bet on the growth of the Hub and Spoke model of transport. If this model takes hold in the future, it will bode well for the A380 as it can cater to high-density routes. If a point-to-point model of transport takes hold, the existance of extremely high volume routes will be minimized thereby lowering the demand for the A380.

Fuel Costs

Airplane fuel costs account for a large part of airline operating costs. Fuel prices move in tandem with oil prices, their primary determinant. When fuel costs rise airlines have two choices: pass on higher fuel costs to passengers, decreasing consumer demand for travel, or absorbing costs direct order fewer aircraft. Rising fuel costs can also lead to greater demand for more fuel efficient aircraft.ly .

That's ralely thinking at a high level

Aviation Sector Demand

Demand for Airbus Aircraft is determined by the success comercial airlines, which is in turn related to the fortunes of the individual airline and the state of the Aviation industry as a whole. The Aviation industry is extremely cyclical in nature, with downturns resulting from freak occurrences such as terrorist attacks. In taking orders for Aircraft, Airbus takes a risk that orders may be later cancelled. Generally, when airlines place orders, they pay between 3-5 percent of the total costs on order, and the next 20% in installments over the next year or two, while the final 75% is paid upon delivery. This backlog represents a potentially high risk in the event of a recession or large default.

International Demand

The commercial aircraft industry currently lies at a turning point in the dynamics of international aircraft demand. Traditionally emerging markets have accounted for less than 5% of commercial aircraft demand but over the course of the next twenty years, 1 in 5 aircraft deliveries will be to emerging markets. With traffic growth rates of 10% a year, markets like India and China will be crucial to the successes of Airbus.

Aircraft Fleet Growth in India and China
Country Passenger Fleet Size in 2005 Passenger Fleet Size in 2025 Freighter Fleet Size in 2005 Freighter Fleet Size in 2025
India 190 959 8 134
China 758 26666 33 409

This trend continues to the rest of the emerging world in Eastern Europe, Latin America, the CIS, and Africa. Traffic Growth rates in the developed world will average 4-5% compared to 8-10% for the emerging world.

Competition

Airbus and Boeing dominate the manufacturing of commercial aircraft. Currently Airbus has 48% of future orders in terms of value and 51% percent of orders in terms of total aircraft. Airbus dominates in the category of narrow-body aircraft orders with its workhorse A320. Boeing dominates in the more lucrative category of small/medium wide-body orders.

References

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