welp... there goes airbus

"farscythe - makin da cawfee!" (farscythe)
04/27/2020 at 08:40 • Filed to: None

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jobsecurity? who dat?

hold my corona!

DISCUSSION (24)

pip bip - choose Corrour > farscythe - makin da cawfee!
04/27/2020 at 08:46

saw that earlier today, yep not great news.

ranwhenparked > farscythe - makin da cawfee!
04/27/2020 at 08:48

Boeing will be right behind them. Who would have ever thought that COMAC might be the only commercial aircraft company to survive past 2020?

My bird IS the word > farscythe - makin da cawfee!
04/27/2020 at 08:49

I just dont understand how nobody can seem to actually make money building or operating airplanes.

farscythe - makin da cawfee! > My bird IS the word
04/27/2020 at 08:55

tbh..at the moment nobody can make any money building anything...

orders for goddamn everything are getting cancelled left right n center...

at this rate all the monies in the world are going to end up neatly divided between supermarkets....and jeff bezos

duurtlang > My bird IS the word
04/27/2020 at 08:56

Especially in this market with only 2 dominating players with a strong vendor lock in, so they have semi-monopolies .

They both, Boeing especially, have very lucrative defense contracts as well. You could almost see those as state subsidies.

ranwhenparked > My bird IS the word
04/27/2020 at 08:57

Airbus' customer base mostly vanished overnight. Airlines have mostly stopped flying and grounded the majority of their fleets, and are not placing orders for new aircraft, and, in some cases, canceling or postponing orders they've already placed. Plus, sales of spare parts and aftersales support has basically stopped. The fact that there's no timeline on when this will start to turn around makes it worse - airlines and manufacturers could afford to muddle through if they knew for certain it was only going to be for a month or two months, but if it's 6 months, 9 months, a year, 2 years, it quickly becomes a different story.

Grindintosecond > farscythe - makin da cawfee!
04/27/2020 at 09:03

Boeing: “A mateurs. Here is how you really bleed cash...”

Grindintosecond > My bird IS the word
04/27/2020 at 09:05

The real money is in the parts and services to support the plane. Jet Blue was set up with a deal where they didn’t have to make a single payment on their planes until they recieved their last delivery of the initial order. That way they could fly, make money, and hten afford to pay for it. The servicing, however, they still had to pay for.

My bird IS the word > ranwhenparked
04/27/2020 at 09:06

I mean more generally. I dont think they should be hurting that bad after like,a month or two of disruptions

ranwhenparked > My bird IS the word
04/27/2020 at 09:10

Its also about the future, they have no idea if this is a month or two or indefinite. Also, they are capital intensive industries, when cash stops coming in, but continues to go out at a rapid rate, they get in trouble fast. If they are going to need to survive this way for a year or two years or more, they can’t immediately start burning through all their cash and credit facilities and be left with nothing after 6 months, either.

In a normal recession, their business might drop off 10-20%, in this case, with a government mandated near total economic shutdown, their business has dropped off 90+%. This is the first time in history something like this has ever happened, totally uncharted territory, no precedent to learn from, and no company was prepared for something like this

ttyymmnn > farscythe - makin da cawfee!
04/27/2020 at 09:25

The world will need airplanes. While it seems clear that the industry was over due for some contraction, nobody imagined it would all happen in three months. Like Boeing, who seem to be in a considerably more precarious state, Airbus will fire a lot of people, trim down their operations, and continue as a smaller company. This letter may well have been more of a warning to employees that the firings are coming.

MasterMario - Keeper of the V8s > ttyymmnn
04/27/2020 at 09:27

I imagine whatever happens with Airbus will also happen to Boeing, but worse. Boeing was not in a good position going into this ordeal to begin with.

jimz > My bird IS the word
04/27/2020 at 09:30

just because something has a high price tag doesn’t mean it has tons of profit, honestly. Bentley, for example, sells cars/SUVs from $250,000 on up. But for any given year they only make a couple hundred million in profit at most. I think they actually lost money last fiscal year. Manufacturing commodity goods (and commercial airlines are more or less commodity) is hand-to-mouth.

Airlines, on the other hand, wouldn’t be in such bad shape had they not spent so much of their profits on share buybacks.

ttyymmnn > MasterMario - Keeper of the V8s
04/27/2020 at 09:31

I read an article last night that suggested that if Boeing were to go ahead with their on again, off again plans for the 797, they may be perfectly placed in a year or two to take advantage of the changed market. However, Boeing can’t seem to tell their ass from a hole in the ground right now. I’m waiting to see how many MAXs go from storage straight to scrap. They really screwed the pooch with that one, and the coronavirus made it exponentially worse.

farscythe - makin da cawfee! > ttyymmnn
04/27/2020 at 09:33

oh.. im reasonably sure the company will survive..some shape of it anyway

but man....theres going to be a lot of aircraft engineers/mechanics looking for work....

maybe some of the office wonks too...(but really nobody cares about them)

Highlander-Datsuns are Forever > farscythe - makin da cawfee!
04/27/2020 at 10:01

It’s time to scoop up an A380 for personal use.

farscythe - makin da cawfee! > Highlander-Datsuns are Forever
04/27/2020 at 10:03

huh....i was just thinking i really need to get a car again....and gas is cheap now

airbus it is :D

Highlander-Datsuns are Forever > farscythe - makin da cawfee!
04/27/2020 at 10:07

Do like me and buy a bicycle that cost the same as a decent used car.

Future next gen S2000 owner > farscythe - makin da cawfee!
04/27/2020 at 10:10

Once Prime grocery gets to all cities, it’ll all just go to Bezos.

farscythe - makin da cawfee! > Highlander-Datsuns are Forever
04/27/2020 at 10:10

my bike cost 3 times as much as me last car...and it was only about $1600

farscythe - makin da cawfee! > Future next gen S2000 owner
04/27/2020 at 10:13

well...theres a cheery thought...

amazon doesnt sell groceries here.....yet... tbh they didnt sell anything but books here till a couple months ago

Future next gen S2000 owner > farscythe - makin da cawfee!
04/27/2020 at 10:16

Amazon is the Sears catalog of our time.

For Sweden > farscythe - makin da cawfee!
04/27/2020 at 11:49

How can Airbus run out of cash? Germany and France can just bleed more money out of Southern Europe.

SmugAardvark > farscythe - makin da cawfee!
04/27/2020 at 13:12

It’s also worth stating that Airbus is more than just jetliners. Airbus Defens e and Space is the second largest space company and one of the largest defense companies in the world. And they have a range of other such holdings around the world.

Airbus collapsing would mean many tangential industries would be pretty severely impacted as well.