QUOTE AND NEWS
Insurance Journal  Jun 16  Comment 
Investigators found the main wreckage sites of EgyptAir Flight 804, which crashed last month over the Mediterranean Sea with 66 people on board. A search team provided images of the Airbus Group SE A320 jetliner’s remains to authorities,...
Clusterstock  Jun 15  Comment 
PARIS (Reuters) - Airbus faces a challenge to meet delivery targets for the A350 jet this year due to problems with suppliers, the head of the European planemaker said in remarks published on Wednesday. Airbus still has to deliver at least 41 of...
Financial Times  Jun 15  Comment 
Fabrice Brégier is increasing passenger jet production, but it is bringing significant challenges
Biomass Magazine  Jun 14  Comment 
Amyris Inc. has announced that on May 29 Cathay Pacific commenced a two-year program of flights from Toulouse, France, to Hong Kong using Amyris renewable jet fuel. The initial 12-hour flight was the longest flight using a renewable jet fuel to date.
Flightglobal  Jun 14  Comment 
Egyptian investigators believe the transmission from the crashed EgyptAir Airbus A320 s flight recorders will continue until 24 June.
Wall Street Journal  Jun 14  Comment 
Airbus will set up helicopter final assembly in China as part of a deal to sell 100 light twin-engine choppers in the country.
The Australian  Jun 14  Comment 
The Economic Times  Jun 13  Comment 
The company plans to launch the service from October and has collaborated with Air Medical Group Holdings (AMGH) of the US and Airbus Helicopters for this purpose.
Flightglobal  Jun 13  Comment 
Airbus has modified its A320neo to cut down the characteristic barking dog noise generated by the A320 s power transfer system during ground manoeuvring.
Reuters  Jun 13  Comment 
Airbus Helicopters has signed a framework agreement to build a final assembly line in China, as part of a deal to sell 100 H135 helicopters to a Chinese consortium, the...
Clusterstock  Jun 11  Comment 
For most people, private jets such as the $61.5 million Gulfstream G550 or the Bombardier Global Series are the epitome of luxury air travel, but there are a select few who can afford more than that. They’re converting airliners into private...




 
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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