Odds and Ends: Tom Enders at Bernstein; JetBlue’s CEO; Al-Baker on Al Jazeera; Volcano photos

Tom Enders: Airbus Group CEO Tom Enders appeared recently at a Bernstein Research conference. A couple of highlights:

The A350 program is on track for certification and first delivery on the schedule set two years ago.We have not seen a commercial aircraft program stay this close to schedule during the last 20years, which Enders emphasized demonstrates how far the company has come in its product development processes since the A380. The challenges of the production ramp are still ahead, which is the most difficult part, with the simultaneous objectives of managing schedule and lowering recurring costs. While additional charges or schedule changes are acknowledged as a possibility, there is no change in the company’s outlook for the production ramp at this stage. Airbus expects A350 margins to ultimately be as good as on the company’s current mature programs. While development of a second stretch A350-1100 might be explored by engineers, management is not considering it at this stage. The focus remains on getting the A350-900 completed and development of the A350-1000.
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After an extensive review, Airbus saw the A330neo as a necessary step. The A330neo launch decision required assessing the risk of cannibalization of the A350-900 in detail. Airbus was convinced that this would not be a major problem and that the two airplanes could be complementary. Realistically, the expectation is that the A330ceo rate will need to come down as the transition to the A330neo occurs in 2017-18. No rate has been set for the A330neo, but it could be in the 7-10/month range. One should not, however, necessarily expect 10/month, as this was the all time peak rate. As with most programs near the end of the line, the later A330ceo prices will likely be at a discount (just as Boeing expects discounts near the end of its 777-300ER line). The A330neo development is expected to be easier than for the A320neo, because it does not involve an entirely new engine. We have seen the nacelle (to be produced by Safran’s Aircelle) as the most difficult part of the timeline. Airbus has been assured by Safran, however, that the A330neo schedule should be met.
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CEO’s departure at JetBlue: The Street.com has a recap of the issues that have led to the planned departure of David Barger, the CEO at Jet Blue. Expect more fees and more crowded airplanes. Greed prevails over passenger experience.
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Al-Baker raps Al Jazeera: Qatar Airways CEO Akbar Al-Baker criticized its sibling (or cousin), Al Jazeera English, for its “documentary” on the Boeing 787. Flight Global has a recap here.

Volcano photos: It’s not aviation but these photos of the recent volcanic eruption are incredible.

Also not aviation: Had Scotland voted for independence, would “Great Britain” have become “Mediocre Britain?” Credit to my daughter for this one.

Boeing’s P-8 program viewed as “model” defense procurement

The Boeing P-8A Poseidon program has been termed a model of procurement by the US Defense Department, reports Boeing program managers. It came in on cost and on time, and as more P-8s are delivered to the US Navy, the per-airplane cost is coming down—saving US taxpayers $2.1bn.

The Royal Aeronautical Society-Seattle Branch sponsored a public briefing Tuesday at the Museum of Flight at Boeing Field in Seattle at which the P-8 program was described.

Boeing 737-based P-8A Poseidon. Boeing photo.

Boeing will deliver its 20th P-8 to customers this year—the US Navy and India—in a program that eventually is expected to sell well more than 100 aircraft worldwide. The P-8, based on the 737-800, is replacing 50-year old Lockheed Martin P-3 Orions. The P-3 is based on the Lockheed Electra, a four-engine turbo-prop that entered commercial service in January 1959. The P-3 entered service in 1962, just in time for the Cuban Missile Crisis.

Stephen Tripp, P-8A Business Development Senior Manager for Mobility, Surveillance and Engagement for Boeing, spent more than 30 years in the Navy, including flying P-3s and “chasing submarines.” He joined Boeing upon retirement on the P-8 program.

“Submarine threats are not going away,” Tripp said. “China and [Russian Premier Vladimir] Putin are launching subs at a rate not seen since the 1960s.”

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Alenia, traveled work contine to plague 787: Everett Herald

At a time when Boeing continues to assure Wall Street that all is well with the 787 program, industrial partner Alenia of Italy and traveled work from Boeing South Carolina continue to plague the program, according to a report from The Everett Herald.

The Herald’s report also comes on the heels of a “documentary” by Al Jazeera English calling into question the competency of the Charleston 787 plant. The documentary was widely criticized, including by this column, for its tactics.

The newspaper, which is located in the same city as Boeing’s wide-body plant, reports that barrel sections made by Alenia continue to have quality control issues, six years after production began on the composite airliner.

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Odds and Ends: Delta/Airbus/Zodiac unveil A320 interior; Upgauging narrow-bodies, down-gauging 747s

A320 interior upgrade: After nearly a year of denying a story by Mary Kirby of Runway Girl Network and avoiding our own report from two years ago, Delta Air Lines, Airbus and interior OEM Zodiac revealed a new interior for the A320 family.

The announcement was made at the APEX convention by Airbus. The interior will appear beginning in Q12016, in this case in Delta’s A321ceos.

New pivot bins will be installed on the Airbus A320 Family beginning in 1Q2016. Delta Air Lines will be the first customer in the A321ceo. Airbus photo.

New pivot bins will be installed on the Airbus A320 Family beginning in 1Q2016. Delta Air Lines will be the first customer in the A321ceo. Airbus photo.

The overhead bins, which mimic the A350 design, are available for retrofit. Airbus says there is 10% more space compared with today’s bins.

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Odds and Ends: UBS on wide-bodies; CFM on GTF; Analysts on CSeries; Expedia on LCCs

UBS on wide-bodies: Investment bank UBS sees the Airbus A330ceo deliveries  dropping from the current production 10/mo to 5/mo by 2017, in advance of the introduction of the A330neo late that year. As Airbus transitions from the ceo to the neo, beginning in earnest in 2018, UBS sees deliveries dipping to just 40. The forecast doesn’t yet go beyond 2018.

Likewise, analysis David Strauss sees the Boeing 777 Classic deliveries declining from the current production rate of 8.3/mo to 5/mo by 2017, well in advance of the 2020 entry-into-service of the 777X replacement. He sees Classic deliveries holding at 60/yr in 2018.

Strauss sees 12 Boeing 747 deliveries per year beginning in 2016 through the forecast period in 2018, implying a rate reduction from 1.5/mo to 1/mo.

CFM on GTF: The head of CFM International’s technology told a conference that CFM looked at Geared Turbo Fan technology when evaluating proceeding with what became the LEAP engine and decided to take a pass.

Speaking at the Morgan Stanley conference, Reuters reports that chief technology officer Mark Little said CFM shied away from the GTF over weight and reliability concerns. But he didn’t rule out using a GTF for some future engine, according to Reuters.

Analysts on CSeries: Bloomberg reports that an increasing number of aerospace analysts and consultants believe the entry-into-service of the Bombardier CSeries will slip from 2H2015 into 2016.

We’ve previously reported that we now have the CSeries EIS slipping into 1Q2016.

Bombardier continues to press ahead for a 2H2015 EIS (which, at best, we believe is 4Q2015)

Expedia on LCCs: Airline booking company Expedia conducted a survey on Low Cost Carriers and among the results: legroom is important.

Considering the recent news items about legroom and recline wars, and Ryanair’s order for the Boeing 737 MAX 200, the survey results are worth a look.

Al Jazeera dumps “Inside Story” look at 787 documentary

Update, Sept. 15, 12:20pm PDT: We got an email from Al Jazeera America Inside Story saying that Al Jazeera English Inside Story is the one that extended the invitation to appear, not Al Jazeera America Inside Story. If you all are confused, so was I. Apologies to AJA Inside Story.

Al Jazeera America English canceled its planned panel discussion of the documentary by sibling Al Jazeera English of the Boeing 787, aired last week to withering criticism by reviewers, including this column.

AJA’s AJE’s half hour discussion program, Inside Story, was to take a free-wheeling look at the documentary. I was invited, and accepted, a slot on the panel. Even after I pointed out my scathing review, AJA AJE assured me that I was still welcome.

The program was to air Sunday or Monday this week. I received notice in a 3am email Sunday (PDT) that the program had been canceled, although no reason why was given and none was provided when I asked.

I don’t know what the real intent of the program was, though I can guess. AJA AJE was trying to get the IAM and SPEEA unions as the other panel participants, so to me it smelled of validation of the documentary rather than an independent discussion. I have no way of knowing whether the unions accepted or declined and the program was canceled for lack of participants or whether it was canceled for other reasons.

Update, Sept. 15, 8:00 am PDT: AJA AJE says the news director concluded there had been enough coverage of the Boeing story and decided to move on.

However, I had my talking points ready. Here’s what I would have said had the program proceeded:

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Embraer and Bombardier: the tale of different companies, histories and fortunes

Last month we did a situational analysis of Boeing and Airbus and we promised to do the same for Embraer and Bombardier. Our follow-up article took longer than planned, as we wanted to include the rather significant changes that have transpired at Bombardier in recent weeks. Material for the analysis is the first half 2014 financial and operational results of the aircraft manufacturers but also information we got when we sat down with the Marketing managers of the two companies at Farnborough, Embraer’s Claudio Carmelier and Bombardier’s Philippe Poutissou. Unfortunately, the latter is no longer in his job, having been replaced in a series of management and corporate restructurings at Bombardier.

Status first half 2014

The situation in the two companies could not be more different. Embraer is financially healthy with well-selling aircraft programs, both on the commercial aircraft side (E-jet) and the business aircraft side (Phenom, Legacy). Embraer is well positioned for the future with a well-received update to its E-jet program (E-jet E2 ) . Bombardier on the other hand, has problems. Its financial situation is strained with too many new aircraft programs eating up cash (CSeries, Learjet 85, Global 7000/8000) and their currently active programs have in some cases seen their zenith in the market (CRJ, Challenger 600 and, arguably, the Q400). Continue reading

Ryanair becomes launch customer for 737 MAX 200

This has some additional information from our e-newsletter of Sept. 8. Additionally, Airbus has offered some observations about the 737 MAX 200 (as Boeing often does about Airbus products). We’ve initially confined this critique to our e-newsletter; this will be posted on this website next Monday.

Boeing Sept. 8 announced its launch customer for the 737 MAX 200, the 200-seat version of the 737-8: Ireland’s Ultra Low Cost Carrier, Ryanair.

Boeing announced the program at the Farnborough Air Show and it was only a matter of time before Ryanair, which had yet to order the 737-8, became a customer. The carrier’s CEO, Michael O’Leary, had been agitating for a 199-seat version of the 737-800/8 for more than a year. (At 200 seats, another flight attendant is required.)

The 737 MAX 200 is Boeing’s response to Airbus’ move to reconfigure the A320neo to seat 189 passengers, matching the standard layout of the 737-8. The A320neo-189 is at 28 inch seat pitch, and so is the MAX 200.

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Odds and Ends: KC-46A update; A440M in the US; A320neo first flight; Southwest no longer an LCC

KC-46A update: Aviation Week has an update on the status of the Boeing KC-46A tanker. Among other things, first fight has now been moved from June to November at the earliest.

A400M in the US: Airbus thinks it’s possible to sell hundreds of its A400M to the US Armed Forces to replace the Lockheed Martin C-130 and Boeing C-17, according to this article by Reuters.

A320neo first flight: Is the Airbus A320neo first flight going to run behind schedule? Airbus won’t say but Reuters suggests that it might. So does Aviation Week, like Reuters, pointing to an issue with the engine.

Southwest no longer an LCC: Bloomberg writes that Southwest Airlines is no longer a low cost carrier, with Cost per Available Seat Mile now approaching the legacy carriers. Years ago we characterized Southwest as the first legacy LCC, as costs increased, low fares began to disappear (it’s often easier to find a low fare on a competitor today) and routes took it into big city airports previously eschewed.

Odds and Ends: Safran benefits from engine after-market; ExIm could back Airbus; Paine Field future

Engine After-market: Safran, which owns 50% of CFM International with GE Aviation owning the other half, is positioned in the “sweet spot” of the engine after-market, according to a recent  report by Bernstein Research.

The report further supports our own analysis posted August 25 and the growing importance of MRO support in winning engine orders.

According to Bernstein, Safran “has the best positioning in the aircraft engine after-market” in the investment bank’s coverage. This position is “driven by two engine families with strong growth ahead and low exposure to older engines that are at risk of early retirement.”

Bernstein notes that more than 95% of Safran’s after-market sales are derived from the CFM56, which powers 75% of the narrow-bodied aircraft, and the GE90, which powers the Boeing 777-200LR/LRF and 777-300ER.

Future programs include the CFM LEAP, GEnx and GP7200. Past programs, in decline, are the first generation CFM56 and the CF6 on earlier wide-bodies.

ExIm and Airbus: In a statement surely to inflame those opposed to renew ExIm Bank authority, the president of the bank said it’s possible it could back funding of the Airbus A320 family built in Mobile (AL).

Paine Field future: It’s a little parochial but The Everett Herald has an article looking at the future of Paine Field, where Boeing’s wide-body airplanes are assembled. The article necessarily looks at the future of the Boeing 747, 767 and 777 Classic production.

Congress is now talking about a nine month extension of ExIm.