QUOTE AND NEWS
Flightglobal  7 hrs ago  Comment 
Philippines-based carrier Cebu Pacific is ordering another pair of Airbus A330-300s.
Flightglobal  10 hrs ago  Comment 
There is no other way to describe it. The second quarter of 2016 marked a modern low-point in the history of the Airbus and Boeing duopoly.
Wall Street Journal  Jul 27  Comment 
European jet maker Airbus Group is locked in a dispute with U.S. regulators over the safety of lithium-ion batteries installed on its latest model.
Flightglobal  Jul 27  Comment 
Airbus is expecting first delivery of the revamped Pratt & Whitney PW1100G powerplant to Lufthansa this week, enabling the airframer to start putting deliveries of the A320neo back on track.
newratings.com  Jul 27  Comment 
SCHIPHOL-RIJK (dpa-AFX) - Shares of Airbus Group SE (EADSF.PK, EADSY.PK) were gaining around 6 percent in the early morning trading in Paris after the aerospace and defense major reported Wednesday significantly higher profit in its second...
Financial Times  Jul 27  Comment 
Troubled A400m military programme could encounter further charges and delays
newratings.com  Jul 27  Comment 
Airbus Group Reports Half-Year (H1) 2016 Results Airbus Group SE / Key word(s): Half Year Results 27.07.2016 06:59 Disclosure of an inside information according to Article 17 MAR, transmitted by DGAP - a service of EQS Group AG. The issuer is...
Flightglobal  Jul 27  Comment 
One day after the Martin Mars made a splash at Oshkosh, JetBlue Airways made waves by flying in an Airbus A321 only minutes after confirming a new order for 30 of the single-aisle jets. The aircraft nicknamed "BluesMobile" is the first A321...
newratings.com  Jul 26  Comment 
SCHIPHOL-RIJK (dpa-AFX) - JetBlue Airways Corp. (JBLU) reported Tuesday that its second-quarter net income climbed 18.5 percent to $180 million or $0.53 per share from last year's $152 million or $0.44 per share. On average, 12 analysts...




 
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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