Northrop Grumman may decide this week or next what it will do about the bid for the USAF KC-X Final Request for Proposal, Leeham.net understands.
Northrop has said frequently and clearly that it may not bid because it believes the FRFP is skewed toward Boeing’s KC-767, and we are satisfied this is no idle threat. But we also believe that while the odds, as things stand today, are that Northrop won’t bid, don’t consider this a sure thing.
As Airbus and EADS countdown to the March 6 earnings report with a hoped-for resolution of the financially disastrous A400M program, the companies are unexpectedly benefiting from a recent weakening of the Euro to the US dollar.
Every 10 cent difference in the exchange rate means US$1bn EBIT (earnings before interest and taxes) to Airbus, whose costs are primarily in Euros while sales are in dollars.
The Final Request for Proposals for the USAF’s KC-X aerial tanker is due to be issued Feb. 23. The controversial and hotly contested procurement between Boeing and Northrop Grumman is supposed to be decided as a result of information provided in the FRFP, but does another document issued this month by DOD hint at the outcome?
We spoke last week at the Pacific Northwest Aerospace Alliance (PNAA) annual conference in Lynnwood (WA) in which we made two proposals that were immediately labeled as radical–though we don’t think they are.
One involved Boeing and the IAM 751 local and the other was aimed at the State of Washington.
Boeing CEO Jim McNerney told an investor’s event that the company will decide by year-end on a 737 re-engine program, and by year-end or early next year on enhancing the 777, saying a new 777 is “unlikely.”
The death today of US Rep. John Murtha (D-PA), chairman of the House Appropriations Committee, means US Rep. Norm Dicks (D-Boeing/WA) will likely succeed him, and this is bad news for Northrop Grumman and its bid for the KC-X USAF aerial tanker.
Murtha supported a plan to split the buy between Northrop’s KC-30, based on the Airbus A330-200, and Boeing’s KC-767 despite opposition from the Department of Defense for a dual procurement. Murtha believed a split buy was the only solution that would win Congressional funding to replace the 50-year old Boeing KC-135s.
Steven Udvar-Hazy, co-founder of International Lease Finance Corp. and one of the most powerful voices in commercial aviation, retired on 5 February after more than 27 years in the leasing business.
His departure from ILFC was expected since the mega-lessor was plunged into a financial morass because of the massive scandal at its parent, AIG, which acquired ILFC in 1990 in what was then considered a masterful piece of timing. Only a year later, Iraq invaded Kuwait and aircraft, airline and lessor valuations plunged on the global economic crisis created by the subsequent Iraq War of 1991.