Posted on 11/02/2006 9:47:46 PM PST by Paleo Conservative
EMIRATES Airlines coughed up its own funds to bail out cash-strapped suppliers of aircraft equipment caught by the Airbus super-jumbo delivery scandal. Maurice Flanagan, vice-chairman and president of Emirates Airlines, told BusinessDaily that some of the firms were not big."They produced (parts) on the expectation the aircraft would be delivered two years ahead of the date they will now be delivered," Mr Flanagan said after arriving in Melbourne yesterday.
"So we are having to bail some of them out.
"Otherwise they would have gone bust. They would not have got paid until the aircraft were there."
Emirates, the first airline to order the revolutionary 555-seat passenger Airbus jet, is buying a total of 45 aircraft worth $US19 billion.
Mr Flanagan is in Melbourne representing the airline as the official sponsor of next Tuesday's Melbourne Cup.
He told BusinessDaily that Emirates would have had 18 operational A380s now had Airbus met the original delivery schedule.
Asked how much money the airline had agreed to pay to makers of aircraft seats, galley equipment and other onboard items, Mr Flanagan replied: "We have just made that commitment and we are working our way through it".
(Excerpt) Read more at news.com.au ...
I had to excerpt, so if you want to read the whole story, you'll have to follow the link.
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Emirates wants the plane for no other reason than bragging rights. Since they have basically an unlimited amount of money, they can spend whatever it takes to ensure they get their giant toys.
Mighty generous of them. Probably kept a lot of small shops out of bankruptcy, considering the cost of materials alone that are used in modern aircraft.
And I'm sure this has improved their attitude toward Airbus. Emirates has a lot of money, but I'm sure it still ticks them off to have to bail out companies they'd contracted with to support their great white elephant that has yet to arrive. Yet one more straw on the camel's back.
"Emirates, the first airline to order the revolutionary 555-seat passenger Airbus jet."
I thought Singapore was the first airline?
http://www.a380.singaporeair.com/news_pr_20051013.html
So why isn't Airbus responsible for paying their suppliers???
Did France and Germany agree to pay for more for oil from the Emirates so they could get cash indirectly to Airbus without violating the trade rules with us???
But some of the suppliers make parts that are specific to Emirates' configurations. Emirates has its own first and business class seats.
Then they're suppliers to the Emmerates and not Airbus.
It's more than a wiring hang-up. The A380 is five and a half tons overweight today.
http://seattlepi.nwsource.com/business/290276_airbus28.html
Like I always say: "If it ain't Boeing, I ain't going!"
Maybe Emirites should just buy the A380 production facilities and operations from Airbus, lock, stock and barrel. That way they could have the A380 exclusively, and Airbus could use the cash infusion to pursue the A350 XWB.
And all of Emirites' competitors would get the shaft...
You know, if Emirites bought all the specialty tooling and the design, they could import the expertise from France and the labor from Asia. They could pay a hard-working Bengladeshi $8.00 an hour instead of paying a surly Frenchman $80.00 and hour.
There reallly is no reason this couldn't be done. It looks like Emirites is buying the operation piecemeal, anyway. They might as well just buy the whole thing at once, and they would actually have something for their money.
Oh, and under the above scenario, production is moved to some Third-World country, or perhaps to wherever it is that the Emirates are.
Those are some plausible theories about the Emirates.
What kind of contracts did these suppliers have that they were in financial trouble because of their customer's delay? When I sell something, my customer has to pay me when they order and when they get the equipment, not when they get around to using the equipment. I don't know whether Airbus or Emirates actually wrote the purchase order for these components, but I wouldn't consider the payment for an order already placed to be a bailout. I'd have insisted that I be paid on schedule per the original contract, and then asked whether Airbus wanted to store the components they'd bought or whether they wanted to negotiate a storage fee with me to hold their equipment.
If they sunk a lot of their resources into developing products to go with the A380, I can see how a smaller company could find itself in serious financial trouble even if they held up production of those products.
They can get themselves in a situation where the life cycle on their current products is fading, and what they've been speeding their development time and money on isn't needed for two years.
That can do serious damage to even a sizable company.
If Emirates is actually buying things that will go on the A380s, it would seem that they are committing to see this mess through and not cancel their A380 orders.
If they are lending suppliers money, those suppliers might be using that money to extend their product lines to supply items for more Boeing planes while they wait and see how Airbus recovers.
The muslims are advancing in europe.
It is not yet time to strike & take over.
Fellow muslims put money on the table to prevent economic instability & political unrest.
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