Thursday, October 25, 2007

Smoking After Sex

In this morning of post-coital bliss folks are busily constructing castles in the air over the first, heavily stage managed, revenue flight of the A380 PotemkinLiner. The usual suspects are indulging in rampant speculation about who's likely to sign on the line next.

Although we're all pleased as punch that finally something happened with the A380 program it's good to review the tape. I mean, far be it from us to be a wet blanket but there it is.

The tape.

  • One heavily massaged pre-production model flew one revenue flight, more than two years after it was supposed to.
  • There will be no 850 seat version, because it's grossly overweight as it sits. It's rather unlikely that a 555 seat version will be able to carry anything besides a lunchbox and a six pack of your favorite adult beverage.
  • At its most optimistic, the order book holds far less than 200 orders after six years of offerings, pleas, and general giveaways at fire sale prices. Airbus says 165, and there are possible options for another 25.
  • The A380F program went down the crapper with a thunderous roar. Why? Freight companies didn't want to wait forever for an aircraft with a persistent downside and a need for specialized freight handling equipment. It's likely that persistent nagging weight problems had something to do with this decision.
  • The development budget has ballooned to nearly $20 billion by some estimates.
  • The breakeven point for the program is pushing close to 500 frames by some estimates. Even Airbus concedes it's 420 and counting.
  • The vaunted Power8 cost reduction/rationalization program that was supposed to transform Airbus into a lean mean fighting machine has yet to produce any pain for anyone. One analyst (Hugh MacVitie of Arran Aerospace) scoffs "I've got more power in my hair dryer than Power8 has shown so far."
  • There are serious delays and cost overruns in other Airbus programs including the A400M Bigger HercLiner and the A350 IWannaBeLikeMikeLiner which is a year or more away from anything that can be called a design freeze. These programs are being damaged by the black hole of the A380 which is sucking up every available euro, dollar and pound that Airbus can get its hands on from every source.
  • Being true to your school didn't stop Airbus insiders from exercising their stock options and dumping shares in advance of public knowledge that the program was going to be seriously delayed.

So go ahead and light that cigarette, lean back against the pillows, say nice things to each other and pretend you can see things in the smoke clouds.


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