A380: $2B Cost Overrun and Rising

According to the BBC:


Airbus A380 is $2bn over budget
The Airbus A380 superjumbo project is running 1.45bn euros (=A31bn;
$1.9bn) over budget, the company's majority owner EADS has admitted.

"That is indeed a lot, that is indeed hefty," EADS co-chief executive
Rainer Hertrich told journalists in Munich.

Total costs for the double-decker aircraft are now estimated to be more
than 12bn euros, the company said.

wrote:
Airbus A380 is $2bn over budget
The Airbus A380 superjumbo project is running 1.45bn euros (£1bn;
$1.9bn) over budget, the company's majority owner EADS has admitted


1.45, 1.9 2.0... a bucnh of numbers.

Considering the USD's devaluation, figures in USD tend to be exagerated.

But the 1.45 euros is significant.

The total cost is now estimated at 12 billion euros. Airbus had claimed about
10 billion initially while all analysts talked about 12 billion. So in effect,
the A380 is pretty well on budget :-)

These extra costs cover the whole project, including the freighter version to
enter sertvice 2008.

The project itself is on track. A380 will be "delivered" this January 18 with
first test flight this march.

##
An EADS spokesman said on December 7 that the A380 was on track for entry into
service in 2006 and that the overall program would achieve a target of an
internal rate of return of 20 percent -- despite acknowledging possible cost overruns.
##

It would be interesting to find out more about "internal rate of return", what
it really means and compare it against other projects at both Airbus and Boeing.

wrote:
Airbus A380 is $2bn over budget
The Airbus A380 superjumbo project is running 1.45bn euros (£1bn;
$1.9bn) over budget, the company's majority owner EADS has admitted


1.45, 1.9 2.0... a bucnh of numbers.

Considering the USD's devaluation, figures in USD tend to be exagerated.

But the 1.45 euros is significant.

The total cost is now estimated at 12 billion euros. Airbus had claimed about
10 billion initially while all analysts talked about 12 billion. So in effect,
the A380 is pretty well on budget :-)

These extra costs cover the whole project, including the freighter version to
enter sertvice 2008.

The project itself is on track. A380 will be "delivered" this January 18 with
first test flight this march.

##
An EADS spokesman said on December 7 that the A380 was on track for entry into
service in 2006 and that the overall program would achieve a target of an
internal rate of return of 20 percent -- despite acknowledging possible cost overruns.
##

It would be interesting to find out more about "internal rate of return", what
it really means and compare it against other projects at both Airbus and Boeing.

"nobody" wrote in message
...

The project itself is on track. A380 will be
"delivered" this January 18 with
first test flight this march.

I will be extremely surprised if the A380 does NOT
fly at the Paris Air Show in June.

A minimum of a flypast. I'm sure they are aiming
at full participation.

On Wed, 15 Dec 2004 16:02:00 -0500, R J Carpenter wrote:


"nobody" wrote in message
...

The project itself is on track. A380 will be
"delivered" this January 18 with
first test flight this march.

I will be extremely surprised if the A380 does NOT
fly at the Paris Air Show in June.

A minimum of a flypast. I'm sure they are aiming
at full participation.

No matter the extra costs?

On Wed, 15 Dec 2004 16:02:00 -0500, R J Carpenter wrote:


"nobody" wrote in message
...

The project itself is on track. A380 will be
"delivered" this January 18 with
first test flight this march.

I will be extremely surprised if the A380 does NOT
fly at the Paris Air Show in June.

A minimum of a flypast. I'm sure they are aiming
at full participation.

No matter the extra costs?

On Wed, 15 Dec 2004 11:47:28 -0500, nobody wrote:


An EADS spokesman said on December 7 that the A380 was on track for entry into
service in 2006 and that the overall program would achieve a target of an
internal rate of return of 20 percent -- despite acknowledging possible cost overruns.
##

It would be interesting to find out more about "internal rate of return", what
it really means and compare it against other projects at both Airbus and Boeing.

Must based on a pretty rosy sales/cash flow projection. We went through
that discussion some time back. When interest rates were still high but
when air traffic was still growing. Conclusion seemed to be that they did
not stand much of a chance to pay interest on the money borrowed.

Now lower interest rates help but surely the drop in air travel and the
bad health of most airlines must hurt as hell? So I can't see how they
could possibly get a 20% return value. Except based on hugely unrealistic
projections.

On Wed, 15 Dec 2004 11:47:28 -0500, nobody wrote:


An EADS spokesman said on December 7 that the A380 was on track for entry into
service in 2006 and that the overall program would achieve a target of an
internal rate of return of 20 percent -- despite acknowledging possible cost overruns.
##

It would be interesting to find out more about "internal rate of return", what
it really means and compare it against other projects at both Airbus and Boeing.

Must based on a pretty rosy sales/cash flow projection. We went through
that discussion some time back. When interest rates were still high but
when air traffic was still growing. Conclusion seemed to be that they did
not stand much of a chance to pay interest on the money borrowed.

Now lower interest rates help but surely the drop in air travel and the
bad health of most airlines must hurt as hell? So I can't see how they
could possibly get a 20% return value. Except based on hugely unrealistic
projections.

In article ,
devil wrote:

Must based on a pretty rosy sales/cash flow projection. We went through
that discussion some time back. When interest rates were still high but
when air traffic was still growing. Conclusion seemed to be that they did
not stand much of a chance to pay interest on the money borrowed.

Indeed. After the initial rash of orders (at steep discounts - much
less than list for 744s and 772LRs and 773ERs), the stream seems to have
dried up.

Now lower interest rates help but surely the drop in air travel and the
bad health of most airlines must hurt as hell? So I can't see how they
could possibly get a 20% return value. Except based on hugely unrealistic
projections.

Depends on how you calculate it. Maybe they'll use sovereign debt rate
of interest?

In article ,
devil wrote:

Must based on a pretty rosy sales/cash flow projection. We went through
that discussion some time back. When interest rates were still high but
when air traffic was still growing. Conclusion seemed to be that they did
not stand much of a chance to pay interest on the money borrowed.

Indeed. After the initial rash of orders (at steep discounts - much
less than list for 744s and 772LRs and 773ERs), the stream seems to have
dried up.

Now lower interest rates help but surely the drop in air travel and the
bad health of most airlines must hurt as hell? So I can't see how they
could possibly get a 20% return value. Except based on hugely unrealistic
projections.

Depends on how you calculate it. Maybe they'll use sovereign debt rate
of interest?