GE analysis post Farnborough

Our wrap up of Farnborough would be incomplete without looking closer at the world’s leading engine supplier, GE Aviation, which together with partners (like SAFRAN in CFM joint venture) garnered more than $36 Billion in orders and commitments during the show. This figure was only significantly bettered by Airbus ($75 Billion) and it came close to Boeing’s $40 Billion. With such level of business the claim by GE Aviation CEO, David Joyce, that the Airbus A330neo engine business was not the right thing for GE as they have more business than then they know what to do with, was certainly no case of “sour grapes”. Continue reading

Ukraine claims Malaysian airliner shot down over air space–(Update)

Update, 1:10pm PDT: Jon Ostrower of The Wall Street Journal Tweeted that US intelligence officials confirm a SAM was fired at MH17; details to follow at The WSJ.

Photo via CNN, apparently showing MH17 falling from the sky.

Malaysian Airlines Boeing 777 (flight MH17) has crashed in Ukraine and government officials claim the airplane was shot down. As yet, this appears to be unconfirmed.

We’ve already been asked for our reaction. Here’s our statement.

“It’s hard to have a reaction within minutes of the first reporting. Reports claim the airplane was shot down, but has this been confirmed? Reports say the airplane was at 10,000 meters (roughly 33,000 ft), and cruising altitude, in-flight break-ups due to something wrong with the airplane are highly, highly unlikely, certainly suggesting an “outside force” may have been involved. But until a shoot-down is confirmed, the only reaction can and should be prayers for the victims.”

Here’s what will happen next, aside from the emergency response to the crash site:

  • Given the allegation of a shoot-down, efforts will be made to confirm this as soon as possible.
  • Flights may be rerouted as a precautionary measure until the shoot-down is affirmed or discounted.
  • Investigators will consider (in no particular order):
  1. Shoot down;
  2. Sabotage;
  3. In-flight break up due to structural issues;
  4. Mechanical issues;
  5. Weather conditions; and
  6. Crew condition, among other things.

These are, except for #1, standard areas of investigation.


Farborough Air Show, July 16: Snipe hunts in an era of model improvements

  • Upate, 5:30am PDT: The Wall Street Journal has an article that is more or less on point to the theme of this post.

It doesn’t matter what the competition does, it’s always inferior–until you do it yourself.

The continued, and tiring, war of words between Airbus and Boeing throughout the decades is monotonous and self-serving. If you step back, it’s also amusing.


  • Boeing constantly dissed the Airbus concept of fly-by-wire–until ultimately adopting FBW in its airplanes.
  • Airbus dismissed twin-engine ETOPS of the 777 while promoting four-engine safety of its A340–until evolving the A330 into a highly capable ETOPS in its own right.
  • Airbus put-down the 777X, saying the only way Boeing could make it economical was by adding seats…which Airbus has now done for the A330-900 to help its economics.
  • Boeing ridiculed the idea of a re-engined A320, but then had to follow with a re-engined 737 MAX due to the runaway success of the A320neo.
  • Boeing ridicules the A330neo as an old, 1980s airplane–neatly ignoring the fact that the 737 and 747 are 1960s airplanes.
  • Airbus still calls the 777/777X/787 a “dog’s breakfast,” though we know some dogs who eat pretty well.

And so it goes.

The fact of the matter is, however, that minor and major makeovers of existing airplanes have long been a fact of life, maximizing investment and keeping research and development costs under control. The Douglas DC-1 was the prototype for the DC-2, which begot the DC-3. The DC-4 (C-54) begot the DC-6, DC-6B and DC-7 series. The Lockheed Contellation was reworked from the original L-049 through the 647/749/1049 (in various versions) and finally the 1649.

Then came the jet age, with vastly more expense, and model upgrades became the norm. The sniping today between Airbus and Boeing goes unabated in an era of historical model improvements.

Continue reading

Airbus, Boeing plan for production gap of A330, 777 with near-term availability claims

On the eve of the Farnborough Air Show, the aviation industry is watching to see whether Airbus will launch the A330neo program. Officials recently tried to tamp down expectations that a program launch will occur at the FAS, but we would not be surprised if an Authority to Offer is announced.

The industry will also be watching Boeing to see if some 200 commitments for the 777X announced at the Dubai Air Show will be firmed up at the FAS. We certainly expect this to be the case. (We also would not be surprised if there is a significant order for the Boeing 787-10.)

Questions will almost certainly arise once again about the production gaps for the Boeing 777 Classic and the A330ceo. Boeing faces a sharp drop in the backlog after 2016 and Airbus faces an even sharper fall-off after next year.

Near-term availability is an important element in Boeing’s plan to bridge the period between the in-production 777 and the entry-into-service of the 777X, says Randy Tinseth.

There are no AirbusA350 delivery slots of consequence available until 2019 and the 777 has plenty of slots starting in 2017, three years before the 777X EIS is planned.

But Airbus can make the same claim for the A330 vs the 787.

Continue reading

Odds and Ends: A330neo more likely; Boeing cockpit commonality; Monarch Airlines

A330neo more likely: The Financial Times of London has a long interview (including a five minute video) with Airbus Commercial CEO Fabrice Bregier (free registration required) in which he says the launch of the A330neo is becoming more and more likely. It remains unclear (and probably unlikely) that the launch will come next week at the Farnborough Air Show, but we don’t think it will be long afterwards.

Air Lease Corp, CIT Aerospace, Delta Air Lines, AirAsiaX and Virgin Atlantic are among those that have publicly expressed interest in the neo. We’ve heard a couple of other names as well.

Although Bregier told us last month he thought the market potential was about 400-500, he says in the FT article it could be more than 1,000.

We’re told there is still some internal division over proceeding with the program, but at the same time signs are continuing to build that the decision is all but a done deal to do so.

Boeing cockpit commonality: Airbus has for years promoted cockpit commonality across its airplane line as an economic and operational advantage vs Boeing. Given the longevity of Boeing’s product development, the 7-Series hasn’t been a common cockpit, though there have been some common elements.

With the development of the 737 MAX and the 777X, this “disadvantage,” if you want to call it that, is diminishing. In a recent interview with Boeing’s Randy Tinseth, VP Marketing, we asked about this. His response:

I don’t think there is any question that over time we have worked to raise the bar across the flight decks, worked to have common training and transition times and we have minimized transition times. We seamlessly transition from the 737NG to the MAX. We have leveraged the 787 and we have continually moved for more commonality. The 787 and 777 have common type ratings. You take your recurrent training in every other simulator training time. With 777X we will look to gain [even] more commonality. You have to find the right mix between commonality and capabilities.

It’s important but not the biggest swinger in the campaign. It doesn’t drive the answer in an economic campaign.

Monarch Airlines, Boeing and Bombardier: Monarch’s widely reported (but still unofficial) selection of Boeing’s 737 MAX for its re-fleeting probably means Bombardier won’t get a slice of this order, a huge disappointment to BBD, which put up a good fight for the deal. Airbus is the incumbent and this will be an important flip for Boeing. BBD was hoping to get a slice of the pie in any Boeing win for the larger mainline jet, with the CSeries taking the smaller end. But we’re hearing Boeing’s ability to offer better commercial terms for a sweeping package aced out BBD’s ability–or lack of it–to offer a similar commercial deal. BBD had hoped for the deal for next week’s Farnborough Air Show. Instead, the headlines will go to Boeing.

Our Farnborough coverage: Leeham News and Comment will be at the FAS, with reporting by our new European associate. Watch for reporting at the end of each day (UK time).

Boeing should “dual source” 737 fuselage work–right here in Puget Sound

Boeing’s 737 line suffered a second disruption when a train carrying fuselages from Spirit AeroSystems derailed in Montana, sending three of six down an embankment and into a river.

Source: PBS.

The disruption may be short-lived, but nonetheless highlights the issue of relying on Spirit as a sole-source supplier for 737 fuselages. This is the second time in two years there has been a disruption for the 737 line. A tornado struck the Spirit plant in 2012, closing the facility for a short time. Damage was slight, but had the twister been more of a direct hit, the impact on Boeing would have been severe.

With Boeing planning to bring production of the 737 line to 47/mo by 2018 and pondering rate 52 and even rate 60, the company should consider creating a second fuselage production line–and it should be right here in Puget Sound.

Continue reading

Boeing’s production gap challenge for the 777 Classic

Wall Street aerospace analysts are becoming increasingly concerned that Boeing will fall short of its goal to maintain 777 production rates at the current 8.3/mo through the introduction of the 777X, planned for entry-into-service in 2020.

One analyst predicts a rate reduction from 8.3/mo to seven and then to five as 2020 gets closer. Others are beginning to hint that they won’t be far behind in lowering expectations. But don’t tell this to Randy Tinseth, VP Marketing for Boeing.

“We have things in the pipeline and we’re working on those,” he told us July 1. “We’re confident the sales will come home and we’re confident we’ll bridge the gap.”

Continue reading

Odds and Ends: MH370 Update: Australians think hypoxia most likely, others still point to pilot misdeeds; and more

MH370: Australian investigators, having reevaluated evidence of missing Malaysian Airlines MH370, conclude that crew hypoxia may be the most likely reason the flight disappeared. But even within the Australian government, this is not a unanimous conclusion, and it’s certainly not within the international community. The captain of the flight is the chief suspect, according to other reports.

Boeing cost cuts: Ray Conner, CEO of Boeing Commercial Aircraft, explained Boeing’s cost-cutting approach in Washington State and with suppliers and plead for understanding, reports the Seattle Times. Conner also termed the potential loss of ExIm Bank funding as a “huge blow,” should Republicans in Congress succeed in killing the program. Closing ExIm would give Airbus a major advantage, he said.

Airbus funding: Airbus and a company in the Middle East have created an Islamic funding structure to help finance Airbus aircraft in the region. With the Middle Eastern carriers becoming more and more important in global aviation, expanding this area as a funding source naturally follows. Islamic financing is not new, but it’s been a narrowly-based source of funding.


Asiana crash finding implicates Boeing somewhat, but our view is this is a pilot issue, plain and simple

The National Transportation Safety Board (NTSB) yesterday lay the Probable Cause of the crash of the Asiana Airlines Boeing 777 last year at San Francisco as pilot error, but in the process implicated a “complex” auto-throttle system as a contributing factor.

Not surprisingly, Boeing disagreed (“respectfully” so), nothing that 55m flights in the 777 had occurred without incident.

While we are not at all surprised at Boeing’s position (we would have been surprised had it been otherwise), we side with Boeing on this one.

We will grant that perhaps the auto-throttle system might be tweaked to make a safe airplane and safe system even better, incorporating an aural warning when necessary. And perhaps the training procedures could be made better and more clear. But in the end, it remains the responsibility of the cockpit crew to monitor instruments and speak up when things aren’t as they should be.

In this case, the flight was also under visual flight rules (VFR). So, the pilots should have been:

  • Looking out the window to visualize the approach;
  • Monitoring the airspeed and altitude instruments, among others; and
  • Speaking up. Most importantly, the third pilot did see something was wrong but didn’t say anything. Culturally, it is common in Asia for subordinates to defer to the Captain. But it’s lousy Cockpit Resource Management.

If the pilots had been doing their job, the plane almost certainly would not have crashed. The auto-throttle may have led the pilots to a false sense of security, but in the end they didn’t fly the airplane.

That’s was caused the crash.

Airbus Innovation Days, Part 5: wide body twin development

Kiran Rao, executive vice president, strategy and marketing.

Rao discussed the wide-body strategy for Airbus at Innovation Days on Wednesday. The following paraphrasing synopsizes his remarks.

  • More than 3,500 wide bodies have been sold by Airbus, starting with the A300B2, the first wide0body twin.
  • 1,200 wide-bodies are in backlog. A330: 250-300 seats; A350: 280-370 seats; A380 more than 500 seats (two-class, long range layout).
  • Airbus officials, including Rao, continued to promote the company’s 18-inch seat campaign, comparing the A-Series against the Boeing 777/787 17-inch 10 abreast and nine abreast respectively.
  • Boeing has to go 10 abreast with the 777 “because the economics don’t work at nine abreast.” Boeing had to go with nine abreast on the 787 rather than eight abreast because the “economics don’t work” compared with the A330 otherwise.
  • Economics is the “most important criteria” and the “Airbus aircraft come out ahead.”
  • Rao claims the A330 has lower maintenance costs, lower airport, lower navigation and lower capital costs. The A330 has simpler systems so costs less to maintain, particularly on the engines. The A330-300 is slightly lighter than the 787-9.
  • For the first time we’ve heard, an Airbus official referred to the “A330ceo.”
  • Each seat for a long-haul operator is worth $2m per year, so an A350-900 vs a 787-9 with 35 more seats can generate $70m more revenue per year.
  • The A350-1000 has a 15% COC per trip and a 5% COC per seat advantage, Rao says. Assumptions: 4,000nm, $3/gal, 2 class configuration, 369 seats for A350, 405 seats for 777-9.
  • 777-9X is inefficient without the stretch and a longer wing. It has inferior comfort, Rao says.