QUOTE AND NEWS
Reuters  11 hrs ago  Comment 
Airbus Helicopters, the world's largest supplier of commercial helicopters, has started building an assembly line in China in what Europe's largest aerospace group said was a key step in its plans to tap into the Chinese market.
Flightglobal  May 26  Comment 
To boost fuel economy and range, Airbus has re-engined its successful A320 series and tweaked the aerodynamics. But how good is the Neo?
Flightglobal  May 26  Comment 
BOC Aviation has ordered four Airbus A320neo family and two A330-900 aircraft, all of which will be leased to TAP Portugal.
Clusterstock  May 25  Comment 
The Airbus A380 superjumbo may be the next big thing in private jets, but the tiny Cirrus Vision Jet is the next game-changer. At $1.96 million, the diminutive Cirrus is the most affordable private jet on sale today. In fact, it's about half the...
Flightglobal  May 25  Comment 
Australian investigators have detailed an incident in which a Cairns air traffic controller cancelled take-off clearance for a departing Tigerair Airbus A320 after realising it had lined up on the wrong intersection.
Reuters  May 24  Comment 
U.S. Treasury Secretary Steven Mnuchin said on Wednesday that his department is reviewing licenses for Boeing Co and Airbus to sell aircraft to Iran, telling lawmakers he will increase sanctions pressure on Iran, Syria and North Korea.
Clusterstock  May 24  Comment 
The single-aisle airliner market is one of the most lucrative and hotly contested segments in the aviation business. But for the past 15 years, that white-hot competition has almost exclusively been between two companies — Airbus and...
Flightglobal  May 24  Comment 
Delta Air Lines' first Airbus A350-900 made its maiden sortie today, flying for 5h 37min off the coast of France.
The Economic Times  May 24  Comment 
Vistara has selected CFM International’s advanced LEAP-1A engine to power its A320neo aircraft, with engine features such as its fuel efficiency, reliability, and operating economics.
Flightglobal  May 24  Comment 
Cathay Pacific has detailed the issues with its Airbus A350-900s' interiors, and said that the entire business class cabin on its first three aircraft will be replaced with new seats in the coming months.




 
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

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki