philidor
in service - 6 years
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Post by philidor on Aug 16, 2016 13:35:56 GMT 1
[A little caution. "...toward the end of the decade" is not the same thing as saying "not expected to break even before the end of the decade." What Harald said can mean anytime within even a couple of years from 2020. The latter would mean that break even comes after 2020. You are right that his exact words would not preclude break even happening slightly before the end of the decade. I believe this forecast is no more than a rough preliminary estimate, though. |
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philidor
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Post by philidor on Aug 16, 2016 13:44:03 GMT 1
And it should also mean the A350 should be cash positive a long time before that Probably, though we don't know which non-cash costs are included in the forecast. I suppose they include, at least, factory, tooling and test aircraft amortization/depreciation. |
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someone
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Post by someone on Aug 16, 2016 13:52:33 GMT 1
And it should also mean the A350 should be cash positive a long time before that Probably, though we don't know which non-cash costs are included in the forecast. I suppose they include, at least, factory, tooling and test aircraft amortization/depreciation. Amortization/depreciation are non-cash cost, and all other already paid items related to investments in either fixed assets or R&D. Which for an airplane program is huge. Cash cost is just simply the labour, materials and other misc cost spent on producing each aircraft. Don't know about the A350, but for the 787 it actually took Boeing a while to get here. Profitability is though first achieved when each aircraft is sold for more than both the cash cost and non-cash cost |
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philidor
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Post by philidor on Aug 16, 2016 14:03:37 GMT 1
Outsourcing increases cash costs, reduces non-cash costs.
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s543
in service - 2 years
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Post by s543 on Aug 16, 2016 15:24:38 GMT 1
Probably, though we don't know which non-cash costs are included in the forecast. I suppose they include, at least, factory, tooling and test aircraft amortization/depreciation. Amortization/depreciation are non-cash cost, and all other already paid items related to investments in either fixed assets or R&D. Which for an airplane program is huge. Cash cost is just simply the labour, materials and other misc cost spent on producing each aircraft. Don't know about the A350, but for the 787 it actually took Boeing a while to get here. Profitability is though first achieved when each aircraft is sold for more than both the cash cost and non-cash cost It is much more complicated. Cash cost is easy to understand but the "noncash" cost is much more mysterious. You might have more approaches. You know that the "noncash" cost is some sum which you have to get rid of somehow. And it is a HUGE number. You might say OK let's assume we will sell for instance 700 pcs i.e. you divide it by 700 and add to the cost of each frame - resulting you might have a profit on some plane and loss on the other. I am sure there are no two customers paying the same price  . The predicted number is changing i.e. you are changing the price per plane. If your financial results are decent from other parts of the business you might decide to subtract something from the unholy sum by writing some part down - as both Boeing and Airbus on A400 program did. I am sure more complicated - elaborate processes are going to be implemented. There might be - and probably was with the 380 - other way you take what you got for the frame subtract the cash cost and what is left subtract from the sum of all noncash costs. In some time in the future you get - HOPEFULLY - to the state when there is no noncash account anymore and you start to earn nicely. There are other various scenarios. The whole process is again more complicated by interests, refundable cheap supportive loans from various governments you want/must hide from the easily understandable financial statements ..... , "smart" financing from various.... sources. Up to that our noncash sum is not a fix amount. It is growing all the time, as various improvements, fixes, upgrades are being developed, tooling is improved... So the whole process is "very foggy" environment and various muddy statements do not bring too much light on the theme.  |
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philidor
in service - 6 years
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Post by philidor on Aug 17, 2016 3:14:33 GMT 1
Actually, non-cash costs are mostly amortization and depreciation of production assets, which are written down until their book value is nil. These costs only increase when new investments are made.
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s543
in service - 2 years
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Post by s543 on Aug 17, 2016 6:54:00 GMT 1
Actually, non-cash costs are mostly amortization and depreciation of production assets, which are written down until their book value is nil. These costs only increase when new investments are made. Agreed, but probably the higher part of this sum are the development expenses. What ever - the point is that there is more ways how to amortize.... and it makes all those statements just "foggy space"  |
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Post by stealthmanbob on Sept 1, 2016 15:25:23 GMT 1
We should not be too surprised by the number of Engine Runs being done, as their are 6 frames on the flightline that are awaiting their first flights, and each is for a different airline  |
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Post by marlibu on Sept 1, 2016 19:47:56 GMT 1
the test flights seem to have fallen relative to the early frames, is this an indication of how well the assembly process is progressing? bearing in mind that tents are still being erected to accommodate ' Outstanding work".
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Post by Jkkw on Sept 29, 2016 4:01:03 GMT 1
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. The predicted number is changing i.e. you are changing the price per plane. If your financial results are decent from other parts of the business you might decide to subtract something from the unholy sum by writing some part down - as both Boeing and Airbus on A400 program did.
