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October 01, 2006

Timmy Elsewhere

Something at the ASI. Now that Airbus appears crocked (and boy am I glad they finally paid up!), will everyone still use them as a shining example of European Union co-operation?

October 1, 2006 in The Blogger Himself | Permalink


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The thing with Airbus, for me, is their woeful safety record. They frighten the heck out of me.

Posted by: james higham | Oct 1, 2006 11:52:34 AM

This morning's Telegraph claims that the new runway at Stansted won't be able to cope with the new Airbus.

Posted by: dearieme | Oct 1, 2006 1:11:00 PM

They don't have a woeful safety record.

Posted by: Matthew | Oct 1, 2006 1:12:35 PM

They don't have a woeful safety record. And what's more, the inside story on the Airbus delays puts the blame on the avionics software, developed by ... an American company.

Posted by: Kay Tie | Oct 1, 2006 4:58:22 PM

The A380 delays are due to wiring problems and issues with the production ramp up. Must we always blame the Americans for everything?

It's no surprise the WhaleJet won't operate out of Stansted. It's a heavy!

Airbus's problems are crystallised because Boeing has refound its feet with the the Airbus's Worst Nightmareliner and the Big Twin.

The article says a revamped 737 will take on the A320. That's not true. Y1 will be an all new design using 787 technology and techniques. The 737 has been taken as far as it can be. It's had a great run, but despite the latest revamp being 10 years newer than the A320, it is still srtuggling to match parity.

Posted by: Josh | Oct 1, 2006 6:34:04 PM

"wiring problems" is a euphemism for "software". The A380 uses CAN bus, and problems getting the messages up and down it properly are software not "wiring". Must we always blame the Europeans?

Posted by: Kay Tie | Oct 1, 2006 7:51:02 PM

Kay, Airbus's problems boil down to Boeing getting their strategy right and Airbus getting it wrong. They've simply been outmanouvered by their American rival. Whether you can pin it to Airbus's parent company's crazy franco-german power structure or not, its going to cost them billions of euros.

Posted by: Andrew Paterson | Oct 1, 2006 8:42:35 PM

Strategy wrong? You mean that it's the wrong kind of aircraft at the wrong price for a market that doesn't exist? And all those pissed off airlines waiting for those new jets are imaginary?

No, I think you'll find that the strategy is just fine. It's the execution that's flawed.

Posted by: Kay Tie | Oct 1, 2006 9:09:44 PM

Or rather they've built a plane to fit a market model which is increasingly being shifted away from (ie hub to hub flights), which is no longer big enough to provide the kind of returns necessary to meet the development and construction costs of this enourmous program, yet alone a profit.

Even before the current delays A380 orders halted at 168, well short of the 300 or so units needed to merely break even. It seems you have far more faith in Airbus and the A380 than the world's airlines Kay.

Posted by: Andrew Paterson | Oct 1, 2006 10:38:09 PM

Here's an article from 2005 which highlights the strategical differences between the two manufacturers, and some very salient quotes from a Boeing spokesman:

January 21, 2005

"Nevertheless, while everyone here seems respectfully awed by the A380's technological achievement, the US aerospace giant believes the European consortium is making, literally and strategically, a massive mistake. To a degree, Boeing has bet its commercial airplane future on it.

After congratulating Airbus for "an industrial accomplishment of some note," Boeing spokesman Todd Blecher says, "It's a very large airplane aimed at a very small portion of the commercial market."

The A380 aims at big hub airports, he explains. "It's the way people used to travel" - a pattern he sees decreasing in an era of direct flights between more cities. Where Airbus expects to sell 1,250 of these "superjumbo" jets, Boeing sees a market for about 400, and wants no part of it.

Though both Airbus and Boeing employ analysts who model the future, these rivals have come up with vastly different visions of what flying will be like in 20 years."

Posted by: Andrew Paterson | Oct 1, 2006 11:03:02 PM

No wiring, not software. As in they got the gauge wrong and the hundreds of kilometres of wiring in the aircraft have to be redesigned.

Posted by: Josh | Oct 1, 2006 11:38:20 PM

And why shouldn't we blame the Europeans when it's their bloody aircraft?

This scapegoat mentality is what is driving Airbus down. Blame an American contractor for screwing up his end and holding back the whole program. Blame the customer because they had the gall to demand something close to all the luxury liner amenities Airbus said the aircraft could carry.

Blame everyone except that paragon of European might, Airbus.

As for the strategy. They may get something out of it but the opportunity cost has been enormous. The Airbus's Worst Nightmareliner has just reached the 400 mark. If Airbus's strategy was right, Boeing's strategy was positively tautological.

Posted by: Josh | Oct 1, 2006 11:48:04 PM

One thing to note from Tim's ASI story is that if is all based on the exchange rate of the dollar/euro rising to 1.40, which I believe Tim doesn't think will happen as he doesn't believe the current account numbers.

Posted by: Matthew | Oct 2, 2006 8:37:38 AM

Having just travelled on all business 48 seat EOS to NY, the idea of travelling on a mega jet with all the surrounding delays processing time etc is simply a no. Shorter haul, the arrival of "affordable" private jet air taxis due to the Very Light Jet phenomenon is going to drive a model based on flexibility of airport and quick turnaround. Small airports, personalised service is the way at the higher margin end. Unless they make the business offering incredibly different, the only market I can see is akin to a flying long haul "cross channel ferry" and I doubt it will be very economic on that basis.
The point on the exchange rate is that the past proftability has been flattered by the previous exchange rates. It doesn't have to go to 1.40, just failing to go back to 90 will be a problem.

Posted by: Mark T | Oct 2, 2006 8:52:19 AM

I suspect that Airbus have the wrong strategy concentrating on a big hub-to-hub aircraft with limited volume potential whilst Boeing have focused on smaller direct-to-destination aircraft.

But these things go in cycles. Boeing got it wrong for a number of years and Airbus won market share because of this. Airbuses were so refreshing to travel in compared to Boeings because they were wider bodied and light and airy - such a nice change after the 'old' Boeings. But Boeing have caught up in this respect and, I suspect, have now chosen the right strategy.

Posted by: HJHJ | Oct 3, 2006 10:09:24 AM

I think Tim's point was not about how Airbus picked the wrong market to focus on, but on how the EU tends to pick up anything it can to bolster itself. Even if that has nothing to do with the EU. Note for example Chirac and all the other leaders at the launch of the A380 noting how it was great of Europe (meaning the EU). First blame is going to be deflected onto Americans if possible, as we have already seen. If it still continues to fail then it will go from being a European (meaning EU) Champion to being a private consortium, and a new rallying point for the EU will be found. Possibly the Rider Cup.

Posted by: chris | Oct 5, 2006 9:25:38 AM

Even if it bombs as a passenger jet, which is at this point highly likely, I think the freight variant of the A380 will be a hit.

Posted by: Chris Mann | Oct 6, 2006 7:34:44 AM