QUOTE AND NEWS
Wall Street Journal  Sep 29  Comment 
The U.S. Army has revised plans to award an $800 million helicopter contract to an arm of Airbus Group and doesn't expect to decide until January whether to open the proposed deal to competition.
Financial Times  Sep 29  Comment 
Managers allegedly knew of profit warning when selling shares
Reuters  Sep 29  Comment 
Airbus looks set to win European safety certification for its newest airliner, the A350, on Tuesday, people familiar with the plans said.
Motley Fool  Sep 28  Comment 
Gulf airline operator Emirates cancels a huge order for Airbus’ new state-of-the-art A350-XWB planes, and Boeing smells an opportunity.
TheStreet.com  Sep 27  Comment 
TOULOUSE, France (TheStreet) -- The first flight of the Airbus A320neo on Thursday went smoothly, and has airlines eagerly awaiting the first delivery, expected in the fourth quarter of a2015. The launch customer is Qatar Airways. Lufthansa, an...
Reuters  Sep 26  Comment 
Airbus sees a "distinct possibility" of adding at least one new customer for its A380 superjumbo jet before the end of the year, the European planemaker's sales chief John Leahy told Reuters on Thursday.
Clusterstock  Sep 25  Comment 
TOULOUSE France (Reuters) - Airbus Group has begun sounding out potential partners for parts of its defense and security business whose future was left undecided in a recent portfolio review, Chief Executive Tom Enders said on Thursday. Airbus...
Wall Street Journal  Sep 25  Comment 
Airbus flew for the first time a new version of its A320 single-aisle jet that has gained a lead in the market for more fuel-efficient short-haul planes.
newratings.com  Sep 25  Comment 
SCHIPHOL-RIJK (dpa-AFX) - Corrects headline to show Airbus projects $4.6 trillion jetliner market French aerospace company Airbus Group (EADSF.PK, EADSY.PK) Wednesday projected the global jetliner market at $4.6 trillion in the next two decades....




 
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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