QUOTE AND NEWS
Wall Street Journal  Jul 29  Comment 
Airbus has canceled a $1.7 billion order for six A380 superjumbo jets from Japanese budget carrier Skymark Airlines, as it continues to struggle to sell the world's biggest passenger plane.
BBC News  11 hrs ago  Comment 
Reuters  Jul 28  Comment 
Perlan Project said on Monday it has partered with European plane maker Airbus Group NV to fly a glider to a height of 90,000 feet, or 27,000 meters, to obtain data about the...
TheStreet.com  Jul 28  Comment 
NEW YORK (TheStreet) -- Shares of Airbus Group are down -0.81% to $14.78 after it was reported that the aerospace firm agreed to drop an order for six A380 superjumbos by Skymark Airlines, the Japanese low-cost carrier, sources told...
newratings.com  Jul 25  Comment 
SCHIPHOL-RIJK (dpa-AFX) - Airbus Group NV (EADSF.PK, EADSY.PK) said Tuesday that it has terminated purchase order with Japan's Skymark Airlines Inc for the six A380s aircraft. Skymark inked a firm contract for four A380s in 2011, and later...
Motley Fool  Jul 24  Comment 
With the launch of the revamped A330, Airbus is looking to bridge the wide-body order gap with Boeing...
Motley Fool  Jul 24  Comment 
Shares of Hawaiian Holdings, Inc. took off on Wednesday, and not just because of a good earnings report.
Motley Fool  Jul 23  Comment 
DuPont analysis is a century-old tool used to help find companies earning more profit. Here’s a screening of aviation giants Boeing and Airbus through it…
Wall Street Journal  Jul 23  Comment 
Airbus has submitted a bid to the Danish government for its Eurofighter Typhoon combat jet as the country seeks to replace its fleet of aging Lockheed Martin F-16 jets.
Reuters  Jul 22  Comment 
Hawaiian Airlines said on Tuesday it plans to add a revamped version of the Airbus A330 jetliner to its fleet beginning in 2019 as it looks to expand to longer-haul destinations.




 
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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