QUOTE AND NEWS
Motley Fool  4 hrs ago  Comment 
Airbus easily outpaced Boeing in aircraft orders at last week's Farnborough Airshow, but it was a meaningless victory.
Clusterstock  7 hrs ago  Comment 
Bombardier's long-awaited C-Series entered service with Swiss Global Airlines on Friday. The state-of-the-art Canadian airliner opened its career with a short flight from Zurich to Paris. The Swiss Global Bombardier is the first of 30 C-Series...
Flightglobal  Jul 18  Comment 
The Australian Transport Safety Bureau is investigating an incident where an Emirates Airline Airbus A380 descended below minimum assigned altitude while on approach to land at Melbourne Tullamarine International airport.
Clusterstock  Jul 17  Comment 
By Parisa Hafezi and Tim Hepher ANKARA/FARNBOROUGH, England (Reuters) - Iran has expanded its search for aircraft and is looking to order dozens more jets while it continues to try to overcome hurdles to deals worth some $50 billion with Airbus...
Clusterstock  Jul 16  Comment 
PARIS (Reuters) - The first delivery of a new version of Airbus's A320 jet to Pegasus Airlines has been postponed following the thwarted coup attempt in Turkey, the European planemaker said on Saturday. Turkey's leading budget carrier had been...
Flightglobal  Jul 16  Comment 
Investigators have disclosed that the existence of a fire was discussed in the cockpit of the EgyptAir Airbus A320 which crashed in the Mediterranean Sea in May.
Financial Times  Jul 15  Comment 
Burberry shakes up board; Airbus and Boeing at Farnborough, Thomson Reuters and UFC also in the news
Flightglobal  Jul 15  Comment 
Airbus's chief salesman John Leahy has dismissed Boeing s view that there is a market opening up for an all-new aircraft in the so-called middle-of-the-market (MoM) sector.
Flightglobal  Jul 15  Comment 
At Farnborough, the Airbus A380 was once again a sight to behold as it manoeuvred almost silently, almost balletically through its aerial routine. More than a decade after its air show debut at Paris, the world s largest airliner remains a...




 
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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