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The A380 Defections Begin

Fedex is cancelling its order of 10 A380s because of Airbus’ delivery delays, and getting 15 Boeing 777s instead. This comes after Virgin Atlantic’s deferment of its order for 10 planes last month. Of the big customers left (scroll down for ‘A380 Orders So Far’ on this page) Emirates is already making threatening noises and has cancelled some A340 orders, Singapore Airlines could cancel or ask for a deferment (which results in no money flowing into Airbus’ coffers, although I’m guessing they’ll book the revenue anyway), and UPS will be under pressure to look at Boeing as well. Only Lufthansa and Air France look like reliable customers.

Given the number of people Airbus employ, none of this is likely to be well-received in Europe. However, given the reorganisations at Airbus the A380 delays have prompted, a leaner, more effective Airbus may be the lemonade that came out of the A380 lemon.

1 Comment

7 November 2006 7:50 pm

Irrational Exuberance re GOOG

Amr Awadallah: 22% sequential growth for a $1919M Q4 is still very impressive, but it missed the expectations and it certainly does not justify the $500 to $600 stock price targets that some analysts are setting. To put things in perspective, Microsoft with a marketcap of $300B did $11B in sales last quarter, that is almost double what Google made for the whole year, so how can Google get a marketcap of $150B (at $500 price target). I think Greenspan had a word for this, let me try to remember, ah, he called it “irrational exuberance”.

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1 February 2006 1:07 pm

Google IPOs

So Google finally IPOs — with an approach as unusual as its approach to webmail. The founder’s letter in their S1 filing eloquently argues the case for taking the long view:

Although we may discuss long term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders’ interests, and we believe that artificially creating short term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short term targets is as pointless as a dieter stepping on a scale every half hour.

For now, Google is probably not going to change the world, and the IPO is probably a bad idea for many investors; but for those with the pockets to take a risk, there are promises