Airbus reports billion-dollar loss on back of record orders

News Type: Event — Seeded on Tue Mar 11, 2008 6:17 AM EDT

Article Source: Agence-France Presse

business, aviation, aircraft, airbus, aerospace, eads, financials

There is something very wrong with either a company or an industry where you are one of only two real players, you enjoy a record year for orders, you get government subsidies...and you still manage to post a billion dollar red number on the bottom line. Sometimes, things just don't make any sense...

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4.8

{"commentId":1575160,"authorDomain":"DrDanny"}

Dr Danny

I've got a few theories:

Some of those orders were sold at or below cost price. Work practices in Europe just simply aren't as flexible as in the US where they compete with Boeing or Brazil where Embraer is a serious competitor with their ERJ-170/190 series aircraft and airlines aren't happy with the delays to the A380 program or the performance of the A340, which has resulted in Air Canada abandoning them in favour of 777s, which a few other airlines have done too.

As a pilot of a Boeing aircraft myself, I would be biased though. With the Euro being as strong as it is, I can see the next few months being a very tough time for Airbus in securing new orders. A weak dollar simply makes Boeing aircraft a lot more attractive.

{"commentId":1575160,"threadId":"234267","contentId":"1358161","authorDomain":"DrDanny"}

2 votes

#1 - Thu Mar 13, 2008 8:11 PM EDT

{"commentId":1591442,"authorDomain":"borys"}

Bozzor

Airbus is being butchered by the exchange rates: with costs in largely in skyrocketing EUR and revenue largely in flaccid USD, it really is hurting. But I do think you are right with Airbus having severe work practice issues: their cost structures are tough and the Power8 program only really was designed to work up to EUR1.00 to USD1.30 - beyond that, they need to try something else...as to what that is...your guess is better than mine.

What are you flying??? And the question I always as is...joystick or yoke? ;-)

{"commentId":1591442,"threadId":"234267","contentId":"1358161","authorDomain":"borys"}

2 votes

#1.1 - Tue Mar 18, 2008 6:54 AM EDT

{"commentId":1594550,"authorDomain":"DrDanny"}

Dr Danny

I'm not sure if Airbus can change working practices really. There'd be huge resistance to anything of that nature in France with their affection for strikes. Obviously the plants in Hamburg, Germany and Filton, UK would face the same challenges. There are going to be tough times ahead with the exchange rate - The A350 is going to have be a very strong competitor against the 787 otherwise the commercial aircraft arena is going to be a tough one for Airbus. The US tanker deal is good news, but things like that, I think, will be few and far between. If I had shares in EADS, I'd be selling.

I'm flying the 737 at the moment - all being well I'll have the type rating stamped in my licence in about a week or so. It's an excellent aircraft - the other shorthaul aircraft my airline use is the Airbus, and the 737s are being phased out. Hopefully I'll be able to bid onto something bigger and better than the A320 by the time the 737s are totally phased out.

{"commentId":1594550,"threadId":"234267","contentId":"1358161","authorDomain":"DrDanny"}

2 votes

#1.2 - Tue Mar 18, 2008 8:50 PM EDT

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Airbus reports billion-dollar loss on back of record orders

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