Odds and Ends: Top 10 stories in 2012; A400M; C919 “orders”

Top 10 Stories in 2012: Here’s a piece we did for CNN International on the Top 10 stories, David Letterman style, for 2012.

Airbus A400M: Airbus claims it’s ready to go. First deliveries slated for next summer.

C919–orders, no deposits: How firm are the 380 “orders” for the COMAC C919? Good question. According to a Chinese media report via this Western news story, there are no deposits for the “orders.”

Washington State’s Signal to Boeing: Gov. Christine Gregoire, in her final budget (see leaves office next month), put $25m in for aerospace training and STEM education. The Puget Sound Business Journal explains the significance of this.

Update (already): Seems Mobile (AL) is put out we didn’t include the Airbus announcement of a production plant there in our Top 10. Over at CNN, a reader commented that the Delta Air Lines purchase of an oil refinery was worthy. Feel free to add your comments about what should have (or should not have) been included in this list.

42 Comments on “Odds and Ends: Top 10 stories in 2012; A400M; C919 “orders”

  1. The EADS/BAE merger was the “buggest” story of the year on CNN…? ;-)

    • No-one…?

      Okay then: Scott, the caption in the last picture of your CNN piece says “Arguably the buggest aviation story of the year” instead of “Arguably the BIGGEST aviation story of the year”. Thought you might want to correct that typo.

  2. Re A400M, the article header:

    “Airbus Expects Military Albatross to Finally Take Wing”

    I checked out “DANIEL MICHAELS” on Google in combination with “Boeing” and looked through the first 10 hits. He is a guy that (in those 1st 10 google hits) gives Boeing the benefit of the doubt in all cases and finds some balancing sidelines / moderating historic perspective with every Airbus success.

    • Mr. Michaels should have a look at the early history of the C-17. Bad start, design issues, turned into a successful program later. ;-)

  3. So, keesje, Josh and Uwe, you all present interesting comments but they don’t address the topic of the article, rather attack the messenger. So are you inferring that the A400M was a success, or that any article highlighting an Airbus problem is unacceptable?

    • It’s the typical fanboi parade. They can never say anything bad about Airbus.

    • Well, this represents two question that are more or less independent.

      A400M : Ask again in a decade or two. Declaring it a succes would certainly be premature. Just like demanding the opposite.

      US Media: usually not able or not willing to give a neutral and factual report.
      noteworthy exceptions in the aerospace field: Dominic Gates, Jon Ostrower ( as Flightblogger ) some others .

    • I provided a subtle hint that calling the A400M an ‘albatross’ might be premature. How that constitutes an attack is beyond me.
      While we are at it, anyone remember the Shorts Belfast?

      • Shorts continues to produce, and is one of the key factories on the CSeries, CRJ, and Q400 as well as the Bombardier biz jets.

  4. Jim, I’m not inferring that the A400m was a success. That would be a bit early with the first aircraft being delived next year. I wondered about the critical Header of the article and then quickly looked up previous articles of the author, to see if he is generally critical about new aircraft. From my small sample it appeared he isn’t. But maybe it’s all my perception. You can take a look yourself.

  5. For some reason, I couldn’t link to the story on the A-400M. But if EADS claims “it is ready to go” as Scott wrote, why is first delivery still 6 months away? Seems to me EADS slipped in another slip to the schedule. Until reading Scots one liner, I thought the A-400M would begin deliveries in 2013Q1, now it appears to be 2013Q2, at the earliest.

    Is Germany still planning on selling 13 of their 53 aircraft they have on order? To who? Is EADS still PO’d about that?

    According to Wiki, the only order with a firm (beginning) delivery date is Malaysia, who has 4 on order. France, Germany, UK, Luxembourg, Spain, Belgium, and Turkey all show either an “expected date” or show “unknown” for the delivery date.

    http://en.wikipedia.org/wiki/A400M#Orders

    Spain is showing almost a 60% increase in the price of the 27 A-400Ms on order, from nearly E3.5B to nearly E5.5B, that works out to an average fly away costs of E203.44M ($264.5M USD) for each A-400M, in 2010.

  6. If the engine issues settle down the A400M could be a success as it has a niche all to itself.
    The C17 is too much plane for many missions whilst the C130 is not enough, and at the moment the A400M has no competition.
    The Embraer and Japanese offerings do not seem to have much impetus at present.
    Not sure if Airbus have written off the cost over runs, but if they have and as I have said above if the engines behave, Grizzly could have a very bright future.

    • Well, the Antonov An-70 is on the verge of rising from the ashes, and the Kawasaki C-2 is already flying. Both are in the same payload class with the A400M.

      • Except the next time the Russians and Ukrainians get into a tiff, there goes the An-70 yet again… and Putin wants to put Imperial Russia back together. The Japanese have that wee little problem of a Constitution that prevents them from making military equipment for anyone but the SDF. If they change that, maybe. If DPRK gets more active, like pops off another nuke test, that could well happen.

      • How high would you realistically judge their sales potential?

        Afaics Japan never put mil related planes on the international market. Do we see actual preparation for that?
        Russian planes tend to be difficult to sell though I think the AN-70 could be more of a contender than the C-2.

        As manufacturer and brand Airbus has good pedigree and global presence.
        The civil cert will prove an advantage imho.
        Quite a bit will actually depend on visibly good user experiences in the next couple of years. That will take power from the various FUD campaigns we have seen.

  7. Slightly OT: does anyone know when AMR is likely to firm its MAX and/or NEO orders?

    • Of course, the C-17 did compete with the An-124 and the Il-76 in the civil market (MD-17), but without success. That’s not meant to be negative, as outsize commercial cargo is a niche market that has not enough volume to justify buying new airplanes.
      In the military market, the competition is uncompetitive on life cycle cost, performance and reliability/dependability.

  8. @Howard, Uwe
    Japan has started backing away from their artificial post-WW2 military sales restrictions (they were certainly promoted by the US A&D industry back then)
    The C-2 is a mixed bag of highly advanced flight controls with a pretty conventional but immature structure and the usual ‘proven’ but somewhat dated engines the military seems to prefer. Production quantity would in any case be critically low.
    The An-70 looks like a sound concept, the unknown is engine and propeller reliability and political meddling, as you say. Needs to be proven in Russian AF serice first..

    The big general issue is that the military market is shrinking, so that no new aircraft is likely to ever sell in large quantities of several hundreds to justify the R&D cost. In terms of a business case, the C-17 will be hard to beat. Same goes for the Hercules in the 20t payload class.
    It looks like both programs are profitable at rates of 10-12 per year, maybe even 8. From the standpoint of protecting the industrial base it seems to make sense to keep these program alive through FMS, I don’t want to use the term ‘subsidized’ here, because personally I think that it is legitimate to protect one’s industrial base – that’s the reason why I am positive on the A400M as well. Even if there was a superior US product, it would make sense for the European taxpayer to stick with the A400M (unless it turns unprofitable from a macro-economic standpoint)

  9. G650 certification? simultaneous with the G260
    F35 initial operational squadron?

    • G650 received its FAA type certificate September 7, 2012.

      First operational F-35 squadron is VMFA-121 at MCAS Yuma, first aircraft 168719 (BF-21) delivered in November according to Air Forces Montly

  10. Regarding the Top 10:
    The B777X talking is hardly an event. If Boeing had launched the B777X, yes, that would be news. But I think a number of events desire more attention.

    SAS and Iberia are both one event, that is the downfall of European legacy carriers – Part II. Part I caught Sabena, Swiss, Alitalia, others.
    Now the business model of the remaining airlines gets tricky. Iberia’s downfall is somehow triggered by economic events in Spain (hard to earn money when national GDP is shrinking by 3%), while SAS is in trouble for years. Due to its complicated labor agreements, SAS is also a piece of toxic waste for any possible investor. Lufthansa thought about buying it (it is cheap) to gain more Lebensraum.

  11. Scott, you may have put the EADS-BAE saga in the number one spot for all the wrong reasons. The real story behind the deal collapse could possibly be summed up in on word: BREXIT (British exit of the European Union).

    It was partly because Germany now anticipates Britain leaving the EU that Berlin vetoed BAe’s deal with the defence giant EADS. It did not want Europe’s defence industry to be concentrated in a non-EU member.

    http://www.guardian.co.uk/commentisfree/2012/nov/18/editorial-britain-leaving-european-union

    • AFAIK the Germans balked at the deal a.o. because the Brits claimed the CEO position (permanently) for the new company. I think the French government never liked this merger, but they were clever enough to let the Germans stall the deal.

      • Well, compared to the Germans, the French has seemingly not gotten all their defense eggs tied down in one basket.

  12. Do you seriously think that is going to happen…?

    I do not see that coming by a long shot, but hey, if anyone it would be the Brits, they have always seen themselves a little on the side on their isle.

    • Well, If you had asked me just 12 months ago I would definitely have said no. However, a plausable path for a British exit from the EU seems now to have been irrevocably set by Cameron in trying to head off the challenge by the increasingly vocal Euroskeptics in both his own party and in the UKIP.

  13. GB leaving the EC is a good idea if trade and free market access is not important for them.

  14. Uwe :
    How high would you realistically judge their sales potential?
    Afaics Japan never put mil related planes on the international market. Do we see actual preparation for that?

    Yes. From Aviation Week, June 5th 2012

    “Japan Eager To Generate Military Exports”

    “The C-2 and P-1 are still in development and undergoing flight tests. The manufacturer [Kawasaki] has made it clear that it wants to sell the C-2 and P-1 overseas if a country shows interest. It also has plans for a commercial cargo variant of the C-2, with export sales specifically in mind.”

    Russian planes tend to be difficult to sell though I think the AN-70 could be more of a contender than the C-2.
    As manufacturer and brand Airbus has good pedigree and global presence.
    The civil cert will prove an advantage imho.
    Quite a bit will actually depend on visibly good user experiences in the next couple of years. That will take power from the various FUD campaigns we have seen.

    Russia has no problem selling aircraft that are rugged and must work on rudimentary runways. Russia does have problems competing against western offerings in the advanced military and civilian aerospace fields where absolute price/performance and full spectrum-capability are crucial.

  15. The constant fretting about whether the 777X is offerable now or later is truly missing the reality of the situation. These are commercial decisions and have little to do with what is happening with the development of the airplane. In a purely process-driven world, commercial decisions such as showing the product to the industry and offering it for sale are closely aligned to defined stages of engineering development. However, that’s not always how it works because that’s not always what is most advantageous to Boeing.

    We have a perfect example in the case of the 737 MAX: Boeing went to market with the MAX long before Boeing’s process said it should have, and as a result we have all had the privilege of watching the airplane evolve before our very eyes (multiple engine iterations, a new wingtip, a new flight deck, all added after the MAX was first shown to the world). These are the parts of a development program which are supposed to be complete before a product is made public, let alone offered for sale. But Boeing chose for commercial reasons to put the airplane in the marketplace before the developmental path dictated. By process, the MAX would only be offerable now. Instead, Boeing has nearly 1000 orders for the airplane and has undoubtedly blocked A320neo success at many operators which Boeing believes are strategic to its business and future success.

    Now let’s look at the 777X. Apparently the blogosphere assumes Boeing is not continuing to make developmental progress on the airplane if they have deferred any decision to offer it for sale. I would not be so naive. The engineering effort continues at steady and increasing levels. The developmental program is gaining momentum, even if the commercial decisions are being delayed. I believe Boeing realizes there is little, if anything lost by delaying the commercial launch, provided the developmental timeline is maintained. The A350 is the only competitor and it has a large backlog that will make the 777-300ER viable on the basis of availability alone until late in the decade. Even that timeline assumes Airbus avoids or overcomes any technical and industrial challenges the program may face as it tiptoes through the minefield it faces in the coming couple of years.

    I would offer that Boeing is not “dithering” on the 777X, as has been suggested. Instead, I see them working within an inherently flexible process to maximize the business advantages of keeping the 777X program an R&D project, while at the same time continuing to develop the aircraft they believe will arrive at the time and with the performance necessary to answer the competition.

  16. Mostly agree on the 777X. However it seems to me in discussions with airlines Boeing found out the airlines prefer a beefed up 787-10 over a still heavy 777-8X. Significant IMO, but it already became clear 7 yrs ago.

    I wonder what if it would become clear the 777 family will have a hard time forever competing with A350 XWB (based) aircraft because of its weighty 9.5 abreast fuselage..

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