QUOTE AND NEWS
The Times of India  4 hrs ago  Comment 
New York, May 16, 2016 (AFP) -US carrier Delta Air Lines said Monday it will cut planned flights growth and delay deliveries of four Airbus A350 aircraft to contend with rising fuel prices and shrinking revenue.
Wall Street Journal  May 15  Comment 
Steps are under way to eliminate the hazard, which was discovered after a takeoff incident last year involving an easyJet flight departing from Belfast.
guardian.co.uk  May 13  Comment 
World’s seventh biggest arms manufacturer targeted because it makes and maintains jets used in Saudi bombardment of Yemen Peace campaigners are to stage a demonstration outside the Science Museum in London on Saturday afternoon in protest at...
Flightglobal  May 13  Comment 
Controller fatigue contributed to a loss of separation assurance incident between a Singapore Airlines Airbus A330-300 and a Jetstar Airways A320 over Australia.
Benzinga  May 12  Comment 
Allegiant Travel Company (NASDAQ: ALGT) revealed an agreement to acquire four additional Airbus A319 aircraft from low-cost carrier Cebu Pacific, which is a Philippines based one. According to the company, the purchase represented another...
The Hindu Business Line  May 12  Comment 
Airbus has contracted Aequs Aerospace to supply over 100,000 titanium machined parts for the A320neo (new engine option) programme. These parts will be delivered to the Airbus plant in Toulouse, Fr...
Flightglobal  May 12  Comment 
Airbus has assigned the development of a new A321 overwing door to the aerostructures manufacturing arm of Saab.
Flightglobal  May 12  Comment 
Investigators believe a software anomaly in an EasyJet Airbus A319 s electronic flightbag might have resulted in its crew s using take-off performance data for the wrong runway at Belfast.
The Economic Times  May 11  Comment 
The A330-200 offers guests a customised two-cabin seating configuration of 18 seats in premiere (business) class and 236 in economy, it said.
Flightglobal  May 11  Comment 
Engines for the first Emirates Airbus A380s to be powered by Rolls-Royce Trent 900s have been sent to the type s final assembly line in Toulouse.




 
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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