Boeing resumes 787 testing (but not, it appears, continuous airborne tests)

Boeing issued the following press release on Christmas Eve Eve. A careful reading of the press release makes it apparent that actual continuous airborne flight testing is not yet ready to resume. This is a one-off flight test.

Here is the press release:

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Senate hearing in tanker snafu appropriate

US Sen. Carl Levin announced yesterday that he will hold a hearing by Feb. 1 into the snafu by the USAF over sending Boeing and EADS information about each other’s KC-X tanker submission.

We think this is appropriate, as we have written before. The Air Force and EADS must come forward with a detailed timeline and information about the what-when-where-why about this. So that there is a full airing, so does Boeing, though let’s be clear: the burden here appears to be on the USAF and EADS.

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Odds and ends: Airbus/EADS and Boeing

With Christmas around the corner, here are some year-end thoughts, absent any breaking news of some kind in the week ahead:

737 upgrade: Southwest Airlines continues to pressure Boeing to do something about a more fuel efficient airplane, and there has been some recent buzz when Flightblogger published a picture of a 737 re-engine concept, but we believe the re-engine has been shelved for now–more likely in favor of the 737NG+. Work continues on the Boeing NLT (New Light Twin.)

787 flight tests: It’s been widely suggested by observers and analysts flight tests will resume in January; we understand Boeing is working toward resuming them after Christmas (to clarify for the cynics and comics, this means Christmas 2010 and before New Year’s 2011). P100 panel, software fixes proceeding faster than expected–but will FAA sign off when Boeing desires? An announcement is expected, in Boeing tradition, on the eve of a holiday.

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Production boosts at Boeing: more to come for 737

Boeing’s announcement today that it will boost production of the 777 from the previously announced 7/mo to 8.3/mo (100 a year) is good news for Boeing, its customers, the supply chain and (to be parochial about it) Washington State, where the airplanes are made.

But this isn’t all.

As we have previously written, Boeing is already thinking of boosting 737 production beyond the 38/mo previously announced, to as much as 42: 41 commercial 737s and one 737-based P-8A Poseidon, all assembled in Renton (WA). (The fuselage is built by Spirit Aerosystems in Wichita (KS), which at one time was Boeing’s facility.)

We learned that even 42/mo may not be the end of it. Boeing foresees the 737 production rate to as many as 50/mo.

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787 in bigger trouble than thought: Seattle Times

Update, December 21: Flightblogger’s piece (referred to in the Dec. 19 update below) is now up: The price of the 787 sales success.

Original Post:

Dominic Gates published this story for the Sunday Seattle Times; it’s not good news for the 787.

Update, Dec. 19: There is more to come, this time from Flightblogger in the next day or two.

Looking at Boeing in 2011

The Everett (WA) Herald has a good series of articles on Boeing’s outlook in 2011.

Start here. Be sure to scroll all the way down to the end of the story; there are six other related links.

There is a very good illustration on the timeline and event flow of the KC-X competition. PDF.

 

Inslee tanker amendment dropped for DOD Reauthorization

Update, 10:30 AM PST: We have now confirmed that the House leadership has dropped the Inslee Amendment from the Defense Reauthorization Act that will be sent to the Senate.

We also received confirmation this morning from Inslee’s office that the letter below the jump was written in advance of House action because it had been learned Section 848 might be removed from the House version of the Act.

Original Post:

It appears the so-called Inslee Amendment in the House Defense Reauthorization Act demanding the US Air Force take into account illegal subsidies provided Airbus and Boeing in the KC-X competition may be in jeopardy.

The Seattle Post Intelligencer first reported that Washington State Congressman Rick Larsen was circulating a letter to senior House members calling for the Inslee Amendment (official known as Section 848 of the Reauthorization bill) to be retained in the House version as it goes over to the US Senate for consideration.

But a close reading of the letter raises questions whether the Amendment is or isn’t currently in the Act. The House is in the process of revising the Act before sending it to the Senate for approval. Time is short for the Senate to act before the Christmas recess, and a bill that is not controversial is needed to speed things along.

The House version has a reported 300 add-on provisions that could cause debate in the Senate, including Don’t Ask, Don’t Tell, the Inslee Amendment and only the politicians in DC know what else.

The Don’t Ask provision was separated from the Act for a stand-alone vote yesterday in the House, where it passed. The Senate previously voted this down but another try is going to be made.

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Outsourcing US Defense

As regular readers know, a major piece of controversy over the prospect of awarding the KC-X contract to EADS North America is the assertion that this will outsource US defense procurement to a foreign company.

We’ve noted in this space many times before that this issue, in this context, is a red herring, because the Defense Department has been doing so for years and is increasingly doing so–without the hue and cry that accompanies the prospect of EADS getting this contract.

A recent article by George Talbot of The Mobile Press-Register illustrates the outsourcing to foreign companies. While Talbot talks about EADS, because Mobile (AL) (which is, one may be reminded, part of the United States–the Confederacy did lose the Civil War) is where EADS plans to build the tanker, it is also the location of an Australian company called Austal that is poised to receive a contract to build the Navy’s Littoral Combat Ship (LCS).

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737NG vs A320neo: an interesting chess game

Update, Dec. 13: FlightGlobal has this interview with Ryanair and its critique of the NEO.

Original Post:

The (London) Financial Times has this interview with Boeing Commercial Airplanes CEO Jim Albaugh in which he says there is no compelling reason now to re-engine the 737.

Boeing believes the newly announced Airbus A320neo family merely brings the legacy A320 family to parity with the 737 or at most provides only a 3%-4% direct operating cost advantage to the NEO which can be matched by yet more refinements to the 737.

Airbus refutes Boeing’s conclusions but won’t release its own numbers, regarding them as proprietary. But in a new study, The Business Case for the Bombardier CSeries, by AirInsight,  with which we are affiliated, AirInsight’s independent analysis concludes the NEO generally has at best a slight advantage over the 737-700 and 737-800–but nothing to shout about.

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Lessors, banks in blistering critique of Airbus NEO

Our colleagues at Commercial Aviation Online put together the story below on lessor and banker reaction to the Airbus A320neo announcement December 1.

We knew–and previously referenced here–reluctance on the part of these groups to the NEO concept, but even we were stunned by the blistering response toward Airbus.

This is reprinted with permission.

Lessor and banks react to Airbus neo programme

Date: 06/12/2010 11:35
Source: Commercial Aviation Online
Location: London

The launch of the Airbus neo programme on 1 December with plans for a 2016 entry into service for the initial model has generated a lot of talk in the aviation finance community, particularly concerning the impact on residual values.

CAO spoke to lessors and bankers about the move and here’s what they had to say:

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