Do Orders Mean Anything?

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RC20
Posts: 547
Joined: 09 Dec 2005, 00:00

Do Orders Mean Anything?

Post by RC20 »

While I am admittedly not an Airubs fan, I have begun to wonder about orders for them (and to a lesser degree Boeing actually having any meaning). Airbus more so because they cheat on the numbers up front, then hide the down sides as time goes by.

The A320 NEO has hundreds of orders, but then would it not have had hundreds of orders NEO or not anyway? Certainly by the time you get to 2014 they would (or sooner). Airbus is seeing huge numbers of cancellations and deferrals (in many cases deferrals are a euphemism for cancellation). Boeing less so (though they have been hit with those).

Neither Airbus or Boeing seems to have any white tails (one way or the other they have sold the slots that were given up, though no one says what kind of a deal someone got for those).

With backlogs of 5 years, how in the realm of sanity can you call that an order (for anyone).
The least amount of money is put down, and if you have to walk away, well, you have bigger problem than a 100k or so per aircraft (never have seen exactly just how much).

And how can an airline actually plan that far in advance? Reasonably you cannot, 6 months is tough anymore, let alone 5 years.

So you make huge orders, then sell off the slots, defer deliveries, change models and only take what you finally wound up finding you could afford (or, ooops, actually needed as the economy went south again)

Boeing is talking about setting up production for 60 a month if they do the 737 replacement. Stunning.

Orders for new models have some relevance in how well its being accepted, existing? Its just a thought until you are 6 months out, then you probably have some idea if you will take it or not.

regi
Posts: 5140
Joined: 02 Sep 2004, 00:00
Location: Bruges

Re: Do Orders Mean Anything?

Post by regi »

It sounds indeed impossible to make predictions 5 years in advance.
But you forgot what it is based on: the airlines know how their airplanes will be within 5 years , assuming that they will fly as many hours and do take offs/landings as today. The airlines know that they will need replacement within some years. The aircraft manufacturers know this as well.

Secondly, the world population is continuously growing and the global wealth has never been so big as today. It is almost an axioma that more wealth means more flights - meaning more airplanes.

To come back on your title about the (non)sense of orders: it would be very interesting to read a contract between for example Emirates and Boeing. About downpayments, fines for late delivery, changing specifications all that stuff. But I assume that one of the items in those contracts is just a confidentiality agreement that forbids any partner in the process to unveil the details of the contract.

Because of the huge price of airplanes, they are build on order and are not available off the shelve. I have thought about this subject before, regarding the huge wealth of some Russians. Imagine that they just make some standard Il-96 airplanes and throw them on the market, off the shelve. I take the Russian example with the Il-96 because it is an airplane that has practically halted production because of lack of funding. The same with the An-124. If those unacceptable rich Russians would invest their money in a fleet of 20 An-124, this would certainly change the policy in the cargo market.
So it is about money and greed - as usual.

Desert Rat
Posts: 1137
Joined: 08 May 2007, 09:38

Re: Do Orders Mean Anything?

Post by Desert Rat »

RC20 wrote:
And how can an airline actually plan that far in advance? Reasonably you cannot, 6 months is tough anymore, let alone 5 years.

.
I think that most of the Airlines know what will be there fleet in the next 10 years.

RC20
Posts: 547
Joined: 09 Dec 2005, 00:00

Re: Do Orders Mean Anything?

Post by RC20 »

I think most airlines HOPE they know. Contracts may not allow it, but Boeing and Airbus will shift and juggle and adjust as much as possible.

Anhoen remember the 777F Air France Parked in the desert? They sold those to FedEx.

Frankly its like the sitation where travel agents block out seats, then let them go as they see how things are falling out.

Airlines grab slots and then juggle and adjust as deliveyr and the current reality comes closer.

One anyitial firm has predciet that HALF of Boeing 787 orders are on shaky ground. Probably true. However, there are others who find they need slots. BOieng is happy because they can drop a low ball pruchase and get good money out of it. Boeing is unahppy if its a white tail.

So, no the orders do not mean anything. If you have watched the shfits and moves and defereal and changes form one model to the next.

And its not just Airbus, Delta deferred the North West 787 orders until (2017 or 2018). They may still pick them up, but that's a shaky order, and it certainly does not belong on Boeing's books as a firm order. There needs to be another category (Pending might be good). Delta may go for A330s instead. They have an idea of what ballpark they want to be in, but then they have to figure out how to get the ball in play (pay a leaser and a whole lot of money, or buy, and more money and.....)

A350 gets delayed (which it will) and suddenly those slot become hot commodity, and Boeing can make money on them. Delta may give em up and someone else take them.

And if you really want to see how it fell out, look at the announced orders, then compare it to what is going down the line and actually being labeled as WHO that bird is going to. Nothing at all like the way the orders came in or the original delivery dates (ANA excepted).

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