Friday, February 10, 2006

Money For Nothing: Airbus and the Great Cash Giveaway.

Money For Nothing: Airbus and the Great Cash Giveaway.

First of all, a little concession. I found this via a link from Randy Baseler's blog. Thanks, dude, for pointing out the significance of this issue.

It is reported in a recent Flight International article that John Leahy, Airbus salesman deluxe, is offering cash back to operators of the A340 who are complaining about the fuel burn vis a vis competitive aircraft. Enplaned does a pretty good job of dissecting this and running the numbers.

Leahy poses this astounding question: "Is it a good investment to spend a couple of billion dollars to get a better aircraft when you can solve the fuel burn problem with money?"


When you spend money to improve your product or your service, that spending has the kind of synergy that brings dividends in all sorts of places that you'd never imagined. Even if ultimately unsuccessful, there are things for engineers and production folks to learn about in the field of product improvement that will pay you back big, somewhere, somehow. Money spent on research and learning is hardly ever wasted.

On the other hand, Leahy is suggesting it's better to pour money down a dry hole to make people go away, and that is the most incredible part of this whole affair.


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