When we did our analysis of the A330neo after the Farnborough launch we limited our checks to trip fuel efficiency as we did not have enough clarity of the cabin improvements that Airbus announced. After a meeting in Toulouse last week with Airbus cabin experts we know have the missing information.
Airbus gives the A330 cabin an interesting update for the A330neo. It comprises A330 ideas (improved crew rests), A350 ideas (improved lighting and IFE) and finally ideas tried out on the A320 (SpaceFlex and SmartLav lavatories). Combined they give the A330neo cabin a better passenger experience and improved utilization of cabin space. Read more
The major OEM’s have published their half time 2014 results and we can make an analysis of their half year results together with orders / deliveries and the state of their product lines. We compare Boeing and Airbus on the high end and in a follow up article Embraer and Bombardier on the low end. To make orders and deliveries comparable we include the month of July as the OEMs collected business to be announced at Farnborough mid July.
Boeing had a strong first half 2014. Boeing Commercial Airplanes (BCA) business is now past the initial problems on the 787 program and delivered 48 units January to June 2014 (8 per month) which is the same numbers as for the 777 program. The 737 is now at rate 40 per month with a first half total of 239 deliveries. The 747-8 is at rate 1 with only 6 deliveries and the 767 has stopped as a commercial program with only 1 delivery during the first half year. The commercial deliveries of 342 aircraft drove a 4% increase in company overall revenue and a 5% increase in earnings compared to first half 2013 (both non-GAAP i.e. the core business performance), this despite a Defense, Space and Security side which was down 5% on revenue and down 15% on earnings.
The troubled unit is Boeing Military Aircraft (BMA) which is struggling with its 767 tanker program (KC46A charged BMA with $187 million and BCA with $238 million due to increased development costs) and it is also fighting to not have its major military airplane program, the F18, stop 3 years from now from lack of orders. The military aircraft order drought contrasts with BCA where first half orders was 783 aircraft, mainly 737 but also 777X, where Emirates and Qatar confirmed their orders for 200 777X. Read more
Airbus Group (before EADS) reported 1H 2014 results yesterday against the backdrop of an eye-catching cancellation (Skymark A380). Overall it was a report which showed solid progress in making the former EADS a homogenous, modern industrial group managed by market realities and not involved government’s politics.
Much has been achieved since the same occasion last year when then EADS announced the name change to Airbus Group and the merging of its Defense and Space side into one tighter knit division. These changes reflected market realities; civil aerospace is growing year over year whereas Defense budgets are shrinking. The yesterday announced group numbers shows gains in revenue and profitability (+6% each when EBIT is cleaned from sale of ex. Paris HQ) underlining solid progress in the undertaken structural changes. Read more
Airbus cleared the air about the A330neo, which we concluded was a must last December, and made the 2014 Farnborough Airshow go off to an exciting start. A lot has been speculated about the A330neo, and in the end it did come out bit stronger than what most had anticipated. Some of that is marketing but a lot is real, and here we give a first assessment of what was launched.
Let’s start with the specifics as given by Airbus and Rolls-Royce today in presentations and discussions. Here are the A330-800neo and -900neo’s main features: Read more
AirAsiaX orders A330-300s: As forecast earlier this week, the budget carrier ordered 25 Airbus A330-300s. According to reports, AirAsiaX may not be done. Group CEO Tony Fernandes wants Airbus to develop an A330neo. Stay tuned.
Washington State and Airbus: The Associated Press wrote a story about the courtship of Washington State of Airbus, making a link between the Boeing 777X site selection Schizophrenia and the Airbus effort. Some headline writers made an even more direct cause-and-effect link. This vastly overstates what’s been going on. Gov. Christine Gregoire began reaching out to Airbus in 2010, but the effort was stalled by the then-contentious and bitter competition between Boeing and Airbus over the USAF KC-X tanker competition. Gregoire, who was just named chairman of the advisory committee to the US Export-Import Bank, naturally backed the Boeing bid but was wisely measured in her rhetoric when it came to the EADS KC-330 offering. The Washington Congressional delegation, however, was often vitriolic and as a result, Gregoire’s efforts largely stalled.
Once that competition was over in 2011, Gregoire resumed her efforts in the last year of her governorship, meeting with EADS and Airbus officials at the 2012 Farnborough Air Show. The WA Dept. of Commerce had continued efforts throughout. This past summer, Commerce and the Pacific Northwest Aerospace Alliance hosted an Airbus suppliers meeting in the Seattle area, attended by about 120 suppliers (about 30-40 had been expected).
So while the AP story is factually correct overall, any linkage to 777X and the Airbus courtship is overstated. This has been a long-term effort by Airbus, PNAA and it is a concept we called for in October 2009 in a speech before the Governor’s Aerospace Summit just days before Boeing announced it was locating 787 line 2 in Charleston (SC). The Airbus effort, if anything, has more of a link to that event than to the 777X.
Boeing names Muilenberg COO: Dennis Muilenberg, CEO of Boeing’s defense business, has been named COO of The Boeing Co. He is succeeded by Christopher Chadwick. Ray Conner, CEO of Boeing Commercial Airplanes, was named Vice Chairman of the Board and continues in his current position. The press release is here.
McNerney reaches retirement age next year but given the timing, we think he’ll stick around a bit longer to give Muilenberg more time in the #2 corporate position. Since Muilenberg is younger than Conner, we think Muilenberg is the more likely choice for successor.
Another Day, Another 777X story: The obsession continues. Seattle Times columnist Danny Westneat has this commentary worth reading. The Everett Herald has a good wrap up of where things stand in Washington State right now. The Seattle Times looks at Long Beach (CA) in depth and its potential for the 777X.
From EADS’ Investors Day 1: Airbus parent EADS is having two days worth of briefings for aerospace analysts. Here’s initial news coverage from Day 1:
Reuters: EADS strategy stresses Airbus
Illinois and 777X: Add the Prairie State to those submitting bids to Boeing for the 777X assembly site. Illinois was previously not included in any list that we saw.
Air Canada: The airline’s Board of Directors meets today to ratify staff recommendations to replace the Airbus A319/320/321 fleet. Airbus and Boeing are competing with their A320neo and 737 MAX families. This competition is said to be only for the 150-200 seat sector. A separate decision for the 100-149 seat sector is expected to come next year. Bombardier hopes to win that part of the deal.
Update, 10:30 PST: The Wall Street Journal says Air Canada and Boeing are negotiating a deal for 50 737 MAXes.
Update, 11:15am PST:
LOT gets $33m from Boeing: Reuters reports that LOT Polish Airlines will receive $33m from Boeing for the 787 problems. Payments will be in cash, the news agency says.
Bombardier scored a huge deal at the Russian air show, MAKS, with a letter of intent for an order for up to 100 Q400 turbo-props.
The Q400 has been trailing rival ATR, which is half owned by Airbus parent EADS, for the ATR-72 turbo-prop, by a wide margin in recent sales. ATR recently obtained third-world, gravel runway certification for its airplane.
The BBD deal includes the potential of establishing a second Q400 assembly line in Russia. The BBD deal is for 50+50 and isn’t expected to be completed until next year.
Bombardier has been making a major effort in Russia, placing used CRJ regional jets there, previous orders for the Q400 and an order for 32 CSeries. It’s also signed an agreement to explore customer support services for the Irkut MC-21 150-212 seat mainline jet.
Other MAKS news:
- Russia’s own Sukhoi announced orders for the Superjet, with 100 going to home-grown lessor Ilyushin Finance Corp.
- Russia’s VEB Leasing converted an MOU for 20 MC-21s to a firm order. These are for lease to UTAir and Transaero.
- Airbus, Boeing and Embraer have yet to announce any deals.
- This is the first air show since the Soviet Union collapsed.
The move to drop the acronym EADS for Airbus Group is being made out by some media to be a major step that better positions Airbus to compete with Boeing. This is a stretch.
The name change simply reflects reality: Airbus is the dominate member of the company. It also does away with the acronym, which many people mispronounced as “eeeds” rather than how it was supposed to be said (E-A-D-S, like I-B-M) that reflects an awkward name, European Aeronautic Defense and Space, a name so awkward it doesn’t readily appear on the EADS website.
A name change has really been thought about for years. On one trip to Toulouse, in 2009, we had a discussion then with Airbus personnel and the topic came up. We favored the Airbus name for the enterprise then–not that our opinion had anything to do with the action four years later :-).
More significant is the continued direction by CEO Tom Enders to move away from the government influence that first was instrumental in the growth of the enterprise but then became an albatross with jobs and prestige programs trumping business decisions (think A400M engine, the A380 [the product of 747 envy] and assembly locations). The volatile topic of government subsidies, necessary in the beginning and conceptually little different than the early days of US defense and commercial aviation, evolved into “reimbursable launch aid” that is unnecessary for a company like Airbus and which remains a target of international controversy when politics arise.
We welcome the change and the continued evolution of Airbus into a true commercial enterprise. Tom Enders will leave a legacy that will make him one of the most significant figures in global aerospace.
Meantime, EADS today announced its first half financial results.
“One Boeing” is the strategy that blends all the company enterprises–Boeing Commercial, Boeing Defense, Boeing Commercial Aviation Services and other business units into a single set of resources rather than operating as solo businesses.
The P-8A Poseidon program is just such a blend. Using the commercial 737-800 as the platform with the 737-900ER wing, Commercial and Defense integrate the technologies of the two units and assemble the P-8A in what is actually the third 737 production line.
The US Navy has plans to acquire 117 P-8As to replacing the Eisenhower-era Lockheed P-3 Orion. The P-3 and the P-8 has a primary mission of anti-submarine patrol but the airplanes are increasingly being used for maritime patrol in a variety of countries for fisheries, immigration and more recently anti-piracy surveillance.
India ordered eight. Boeing sees a potential market for more than 150 more with countries now flying the P-3.
The Poseidon’s One Boeing approach was copied for the re-bid of the USAF KC-X tanker competition. The original platform, the KC-767 International program, was largely a Boeing Defense effort. The KC-767I, which involved taking a commercial 767-200ER and converting it to a cargo aircraft at Italy’s Alenia and finishing it out at Boeing Wichita, was a disastrous effort. Boeing pulled the work back from Alenia and design and flutter issues caused the program to be several years late to customers Italy and Japan. Only eight were built.
In the re-bid against EADS, BCA and BDS joined forces in an effort patterned after the Poseidon project. Boeing won with a bid that was 10% below EADS. So far, the USAF reports the project is going according to plan.
Boeing is now talking with customers to sell the KC-46A tanker outside the US, which was always part of the plan, according to this Bloomberg article. The platform, called the 767-2C, is about six feet longer than the 767-200ER but shorter than the 767-300ER. Air Force officials were quoted in trade press that commercial cargo versions could be offered, but nothing has been said about this prospect since.
However, we understand that Boeing is nearing a commercial order from FedEx for the -2C that will enable Boeing to boost production of the 767 lines to as much as 2.5 aircraft per month by October 2016.
Isaac Alexander (@jetcitystar on Twitter) provided us with the following so you can follow the latest at next week’s Paris Air Show. He has his own blog with an addiutional list of companies.
From Isaac: Here is a list of micro-news sites for the 2013 Paris Air Show. This will be the 50th edition of the event. If you know of a company or press website that is not listed below, please contact me by Twitter at @JetCityStar, or by email at email@example.com. This page will be continually updated during the event.