Tit for tat on KC-X

Stephen Trimble of Flight Global has EADS’ opening shot on talking point in Congress. It is brutally frank and takes off the gloves often kept on by Northrop Grumman in the KC-X competition.

We’ve seen–but do not yet have–Boeing’s resp0nse. We’ll post it when obtained.

Update: Boeing’s response is after the jump:

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787, A350 “way over-ordered,” says UBS

In an analysis that might create heartburn for any number of people at any number of levels, David Strauss and his aerospace team at UBS Securities issued a report Tuesday (April 27) that concludes the next-generation of airplanes–the Boeing 787 and Airbus A350–are “way” over-ordered.

The “good” news (tongue-in-cheek, for those who don’t pick up on our odd humor) doesn’t stop there. UBS concludes that the Boeing 777,  Airbus A330 and Airbus A320 are also over-ordered.

The Boeing 737 is under-ordered, in the UBS view,  but this doesn’t relieve the concerns about this order-book, either, according to UBS.

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KC-X: price dumping and assessing risk

Now that EADS said it will bid after all for the KC-X contract, questions have been raised about the possibility EADS will offer pricing that is below its costs (or “price-dumping”) to win the contract. Boeing supporters, and Boeing itself, have raised this concern.

On the other side, EADS is focusing on the fact its KC-45 is in production and in flight tests while Boeing’s proposed KC-767 NewGen is a conceptual airplane that is a riskier prospect.

How are these two particular concerns dealt with?

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IAM threatens Boeing strike in 2012

Bloomberg has this long story looking at the 787 development since last June, when Boeing officials then predicted the airplane would make its first flight by June 30. Only two days later, Boeing announced another delay for the troubled program that ultimately stretched to six months.

Bloomberg’s story is an interesting look at the 787 program and other challenges facing Boeing as it recovers and prepares for new competition with Airbus in the 737 and 777s arenas.

But what caught our eye most was this excerpt:

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Enviro Aerospace conferences this week, next month

Here is a good enviro-aerospace conference coming up next month that provides one of the broadest coverage of topics to anyone interested in the emerging green-aviation issues. Sponsored by the AIAA, the conference

is called Making a Difference: Aerospace Leadership for Energy and Environmental Challenges.

“Making A Difference” has about the best agenda and broad spectrum of speakers we’ve seen of any enviro-aviation conference in the US. Representatives of the FAA, Air Transport Association, Shell [Oil] Global Solutions, the Office of Science and Technology of the Office of the President of the United States, MIT, Billy Glover, Boeing’s top enviro guru, the USAF, Delta Air Lines, EADS, United Technologies (parent of Pratt & Whitney), NASA and a number of other top-level organizations, agencies and companies are speakers. This event is May 11-12 in Washington (DC).

This follows an event this week (April 27-29), also in Washington, entitled Advanced Biofuels leadership Conference. The Air Transport Associationm United Airlines, Lufthansa, the FAA’s CAAFI bio-fuels group, FedEX, several biofuels companies, UOP (the Honeywell company at the forefront of aviation biofuels) and US Airways are among the companies, agencies and groups at this conference.

These two conferences provide the broadest possible coverage of these enviro-aerospace topics.

EADS confirms KC-X bid

Update, 500 PM PDT: Innovation Analysis Group has a 24 minute podcast on this development featuring Flight Global defense writer Steve Trimble, TEAL Group aerospace analyst Richard Aboulafia, IAG’s Addison Schonland and us.

Original Post:

EADS North America and Airbus have scheduled a press conference for 2pm EDT today. EADS NA CEO Sean O’Keefe, former EADS-NA CEO Ralph Crosby (who remains in charge of obtaining the KC-X contract) and Airbus Americas Chairman Allan McArtor are scheduled to appear.

Clearly this is the kick-off for the return of EADS to the competition.

Update, 0945AM PDT: Boeing already is on the offense, issuing a statement that the WTO ruling that Airbus, and the A330-200 on which the KC-45 is based, benefited from illegal subsidies should be considered. The Department of Defense has stated repeatedly that the WTO ruling will not be considered.

The WTO Interim Report on the EU case against Boeing is expected to be issued in June, ahead of the extended deadline of July 9 for proposals to be submitted. It is widely anticipated that Boeing will likewise be found to have benefited from illegal subsidies.

We have all along cautioned about focusing on the subsidies issues because we believed both parties will be found to have violated WTO trade rules. The Airbus report is out and the Boeing report is coming. Boeing and its supporters already have said any Boeing violations will “pale” in comparison with launch aid provided Airbus.

Whether it does or doesn’t remains to be seen, but since the underlying thesis of Boeing and its supporters is that any WTO violation should disqualify a company seeking this contract, then any violation by Boeing would disqualify Boeing. This, of course, won’t happen and therefore neither should it happen with respect to EADS (or Northrop before it withdrew).

Furthermore, DOD has reaffirmed over and over that it will not consider the WTO rulings, so all this is for Congress. This makes a sham of the DOD procurement process. The debate should be on the technical and operational merits of the offerings.

The press conference begins:

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EADS to bid on tanker

Reuters just moved this story that EADS is preparing to bid the contract alone. L-3 Communications appears to be definitely out of partnering with EADS and “for now” EADS is prepared to go it alone, Reuters says.

Sen. Jeff Sessions (R-EADS/AL) blasted US Rep. Norm Dicks (D-Boeing/WA) for what Sessions termed attempts to intimidate potential EADS partners. Here is this report.

From strictly a taxpayers’ point of view, the EADS competition should result in better pricing for the Pentagon whoever wins. The past competition has already seen the price driven down compared with the original Boeing lease deal from 2002-2004 and an improved airplane offering from Boeing.

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L-3 appears out as EADS partner

Update, April 16, 0900 PDT: Reuters moved this story this morning about EADS options dwindling away.

DOD Buzz has this analysis on why EADS needs a partner.

Original Post:

Reuters just moved this report that L-3 is probably out as a potential partner for EADS in a possible KC-X tanker bid.

This sends EADS scrambling for alternatives.

Reuters also reports that political pressure may have had a hand in Northrop Grumman’s decision to withdraw and that political issues may be involved in L-3’s apparent decision to withdraw from consideration.

If true, if political interference is at work, “incendiary” won’t even begin to cover the fall-out that could come from this.

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