Odds and Ends: Air France v Rolls-Royce for A350; Virgin America rejigs; Last A340s sold; Heading South with SPEEA

Air France v Rollsr-Royce: The saga continues-see this Bloomberg story. We understand there is more to it than just maintenance. Rolls wants AF to order the Trent 1000 for the 787 order, too.

Virgin America: This airline, headquartered in San Francisco, has been an airline in search of a business plan. Its operations don’t have a niche and didn’t fill a void (like jetBlue created and filled at NY-JFK). It’s lost hundreds of millions of dollars. And, finally, the losses have caught up. Bloomberg has this story about aircraft order deferrals and cancellations. The deferrals are Airbus A320neos (note to Alabama: VA was going to take the first neos from the new Airbus Mobile plant in 2016).

Virgin is seeking to restructure aircraft leases, according to two industry sources. Failing to do so could lead to a Chapter 11 filing, the sources say.

Last A340s Sold: The remaining two Airbus A340-500s, originally destined for ailing Kingfisher Airlines, have been sold.

SPEEA and Boeing: Things appear to be heading south with SPEEA. This could affect Boeing’s year-end push to deliver as many as 50 787s as well as the other 7-Series.

11 comments on “Odds and Ends: Air France v Rolls-Royce for A350; Virgin America rejigs; Last A340s sold; Heading South with SPEEA

  1. Airbus won’t have a problem selling the first Alabama-based A32X NEO’s. Too much demand.

    As for VX itself, I wouldn’t be surprised if VX didn’t exist in the next 18-24 months. Never have made a profit and even during peak summer season this year, they weren’t profitable-that says a lot. Other costs will start going up as well. They have a lot of competition to the cities they fly to and the “hip factor” really only goes so far.

    VX doesn’t have the route structure to absorb losses on some routes which the other carriers can do.

    Also, the U.S. economy is not doing well and IMHO is going to do worse in the next 6-12 months than it is doing now.

    Regarding AF/Airbus/RR-I think a deal will somehow get through. The A359 is the perfect fit aircraft for many of AF (and KL’s) needs.

  2. Quoting Scott:

    “SPEEA and Boeing: Things appear to be heading south with SPEEA. This could affect Boeing’s year-end push to deliver as many as 50 787s as well as the other 7-Series.”

    Where did this 50 787 number come from?

    Boeing’s last public word for 2012 787 deliveries was 70-85 (Split between 787 and 7478-8).
    That’s 35-42/43 787′s… Yes?

    • Talked with Pat Shanahan Monday at the Qatar 787 delivery. He said it was “possible” 50 787s could be delivered this year. Qatar was 35; its getting four more. UA and LOT took two this week; that’s 41. All Boeing needs is nine more. If things with SPEEA don’t go south.

      • FWIW- although SPEEA may work to rule- it is VERY unlikely that there would be a strike before year end- if for no other reason than logistics to say nothing of fiscal cliff issues and whatever.

      • Well then, 50? SPEEA or not… It might be time to increase your holdings in BA stock as they should easily beat year end expectations once again!

  3. HI Scott, I’m a bit confused here. The article mentions that the AF/KLM contract with Boeing for the 787s is signed but not that for the Airbus A350s. That implies that the engine contract for the 787s would also be settled.
    If that were the case, there would be no sense in Rolls trying to pressure AF/KLM on the 787 deal, would there?
    Or can the airframe contract be signed before the powerplant contract has been settled?

    Could this problem with AF/KLM and Rolls force Airbus into getting another powerplant manufacturer for the A350? Or does Rolls have a contractually guaranteed monopoly on the A350? I cannot remember any more.

    • Rolls got exclusivity on thr A350-1000, negotiated by RR when they were asked to devellop a beefed up version of the Trent XWB.

      http://www.ft.com/intl/cms/s/0/125a3abe-9c21-11e0-acbc-00144feabdc0.html#axzz2Cerb4G1E

      So theoretically AF/KL could order both GENX for the -900 and Trents for A350-1000, not something anyone would prefer I guess. Now RR might be willing to outsource some engine maintenance to AF/KL, if they order it for the 787 too. Especially KLM has a long and deep cooperation with GE so that is not what KLM had in mind. The 787-10 is good news for AF/KL, AIrbus won’t like them to start discussing those with Boeing..

      Interesting new reality is that GE maintained for yrs they couldn’t offer a GENX engine for the A350-1000 (Boeing-GE 777 deal..). Now they have to offer an engine for the 777-8 and 787-10 while being locked out of the XWB-1000, and RR is also offering engines for all three. Brakes in the wall I guess.

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