A Commercial Aviation Consultancy

Airbus

We published a premium story today on the timing of the A380′s launch.  The timing of the A380 launch was driven by many factors and certainly one of the principal factors was competing with Boeing’s 747 and its monopoly of the VLA segment of its era.

Providing perspective of how Airbus had to view its decision at the time, we spoke with Professor Tobias Kretschmer, an expert on strategy and game theory from Ludwig-Maximilians-Universität München.  Professor Kretschmer uses the A380 vs 747 in his game theory lectures and is familiar with the key decision Airbus faced at the time the A380 was launched.

Bloomberg reports that Malaysian Airlines is likely to see some big changes.   A possible new CEO, layoffs and an aircraft order review are the identified changes.

The current CEO has a contract that expires in the next few weeks.  It is doubtful that he would want to renew it given the past year.  Who could blame him? It may have been the most awful year any airline CEO ever had to go through.

The layoffs could be big – 3,000 to 4,000 according to the Bloomberg story.  There are some 20,000 employees at the airline, and laying off a fifth will be be a severe blow.  Once the state effectively takes the company private, the unions will have a tough time overcoming any layoffs.

What about fleet rationalization and orders?  The table below lists the fleet and orders.  Airbus is not exposed… Continue reading

2014-07-29_9-36-41[UPDATE: Bloomberg News]

Today’s Skymark news about its cancelled order at first glance looks like very bad news for Airbus.  Clearly the cancellation is disruptive for Airbus, but they must have reached the end of their patience.  Skymark has made $255m in payments so far, but cannot secure the rest of the finance to pay for the aircraft on order.

So now what?  Actually the situation Airbus faces may not look as bad as it seems.  Firstly Airbus has known about the Skymark situation for some time.  Since Airbus terminated the deal, it would seem they have the upper hand. After all they say  “Airbus is reserving all its rights and remedies” and they have $255m banked.

Moreover, the Airbus sales team have no doubt already identified potential customers for two “bargain” A380s.  There are reports British Airways is extremely pleased with… Continue reading

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