Odds and Ends: MH370 tracking; Garuda rules out A380, 747-8; last 747-400 flight; E-Jet vs Turbo-props

MH370 tracking: With Britain’s Immarsat and the Air Accident Investigation Board key to determining the general location of Malaysian Airlines Flight MH370, The London Telegraph has one of the best narratives of of the behind-the-scenes story of how this came about. The London Independent also has a good story. And here is a story that explains the difficulties of searching in remote oceans.

  • Update, 10:30am PDT: Aviation analyst and former pilot John Nance is profiled in this Puget Sound Business Journal account that includes’ Nance’s theory of MH370. It’s an intriguing theory. He believes this was a deliberate act–either terrorism or murder-suicide–and that once the flight settled out southbound from Malaysia, it was set on auto-pilot and all aboard, including the pilot, were killed by asphyxiation. The airplane flew until it ran out of fuel and crashed into the Indian Ocean; he even gives a speed and angle-of-attack estimate.

Garuda rules out A380, 747-8: The Australian reports that after planning to order either the Airbus A380 or Boeing 747-8 last year, officials have ruled this out.

Last 747-400 flight: Japan’s All Nippon Airlines plans to complete its last Boeing 747-400 flight this month, ending an iconic era in the country where 747s once ruled the skies.

E-Jet vs Turbo-Props: At the ISTAT conference last week, we reported that Embraer says its E-175 E2 is more efficient than similarly sized turbo props on missions of more than 250 miles. This story in The Economic Times of India follows through on this theme.

2013 Year in Review: 787 grounding was the top story

We’re back from what we had planned as a holiday hiatus. This was interrupted by the IAM-Boeing 777X contract issue, of which we felt compelled to initiate some special posts.

This leads off our 2013 Year in Review.

IAM-Boeing 777X Contract

Although it was not voted by Readers as the most important story of 2013, nor did it even make the Top Three, its importance can’t be understated. The relationship between the IAM 751 District, which represents Boeing “touch labor” workers in Puget Sound (and in limited numbers, in Oregon and elsewhere), is to put the best face on it, dysfunctional. Relations hit a lot point in 2008, with a 57 day strike, and 2009, when Boeing elected to put 787 line 2 in Charleston. We thought, as did many others, that 751 and Boeing entered a new era in 2011 when an agreement was reached extending the 2012 contract to 2016 in exchange for locating the 737 MAX construction in Renton. As it turns out, this guarantee had less promise to it than was thought; Boeing is using this assembly as a stick (or a carrot) in the current 777X contract proposal.

If the 777X is not assembled in Washington, this will likely mark the beginning of a serious migration of Boeing from Washington. What’s been happening up to down, with 787 Line 2 and a series of jobs relocations, is peanuts compared with what will happen as airplane programs wind down and Boeing has clean-sheet designs in the next decade.

Failure of 751 and Boeing to come to some accord (not necessarily one based on the January 3 contract vote) has grave implications for IAM jobs and aerospace in Washington.

Top Story of the Year

Readers voted and we agree that the top commercial aviation story of the year was the three month ground of the 787. Except for the Concorde, a special and highly limited case, there hadn’t been a grounding of a commercial jet since 1979 with the McDonnell Douglas DC-10. With only 50 787s in service at the time of the grounding, global disruption was limited but the number of 787s scheduled for delivery during this time magnified the global implications. Japan Air Lines and its rival All Nippon Airways, with more 787s in service than any other carrier, were disproportionately affected. The grounding may have helped influence JAL to break the Boeing monopoly and buy Airbus with the A350-900 order.

ANA is still considering a major order and having lost JAL to Airbus, Boeing can be counted on being motivated to cut virtually any deal on any terms and conditions to avoid losing ANA.

A350 and 777X

A mere handful of votes separated the first flight and flight testing of the A350XWB with the launch of the 777X. The A350XWB barely topped the 777X as the second most important story of 2013.

Flight testing by all accounts is going well. Airbus officials are so far sticking with an entry-into-service for next year, but when is a moving target. Officials initially said mid-year, then September then November or December. Based on customer comments, we moved EIS to 1Q2015 in our estimates months ago, perhaps January.

In mid-December, the new American Airlines did what we had expected: it dropped the US Airways order for the A350-800, swapping it into the A350-900. The days of the -800 are numbered, and we think this subtype will follow the 787-3 into oblivion as early as 2014.

Boeing finally launched the 777X in November at the Dubai Air Show. The launch was really anti-climatic: Lufthansa Airlines had already become the first customers in advance of the air show, but Dubai provided the well-expected, high-profile order of 150 from Emirates Airlines and more orders from Qatar Airways and Etihad Airlines. On December 20, Cathay Pacific Airways ordered 21 777-9s, giving Boeing some 280 orders and commitments for the airplane. How many of the commitments will actually be firmed up by the end of 2013 is something we’ll all know in early January.

CSeries First Flight and Flight Testing

Bombardier came in at a distant fourth in the Reader tally with the first flight of the CSeries. This is BBD’s attempt to leap into the Big Leagues, challenging Airbus and Boeing directly at the small end of the mainline jet market. First flight was delayed three times and the flight test program has been slow off the mark. Flight Test Vehicle 2 is behind schedule entering the program and, we believe, so is FTV 3.

Bombardier long said that EIS would be 12 months after first flight. Following the September 16 launch of FTV 1, BBD stuck with this plan publicly. This meant EIS would be September 2014.

Not a chance.

We already had moved EIS to 1Q2015 by the time BBD CEO Pierre Beaudoin told the Toronto Globe and Mail in November that EIS was still a “good year” away.

We now have EIS in 2Q or 3Q2015 in our estimates. BBD’s year-end earnings call is February 11. We expect an EIS update from the company at that time.

Other Stories

All other nominees for 2013′s Top Stories were also-rans to Bombardier. Here are the results at December 29.

Vote for the Top Aviation Stories of 2013

Answer Votes Percent
Airbus A350 XWB has first flight and enters testing 168 20%  
Airbus A380 gets big order boost from Emirates 16 2%  
American Airlines and US Airways merge 39 5%  
Boeing 777X is launched 164 20%  
Boeing 777X Site Selection competition 43 5%  
Boeing 787 is grounded 258 31%  
Boeing 787-10 is launched 11 1%  
Bombardier CSeries has first flight and enters testing 74 9%  
Embraer launches E-Jet E2 3 0%  
IAM 751 rejects 777X Contract Nov. 13 33 4%  
IAM International Forces Vote on Second 777X contract offer 24 3%   

Odds and Ends: Embraer reports weak quarter; MRJ FTV #1 assembly; JAL, ANA politics

Embraer’s Third Quarter: Embraer delivered fewer commercial airplanes in the third quarter than had been expected. The maker of E-Jets and the E-Jet E2 re-engined versions due beginning in 2018 listed its deliveries and backlog in its press release. Analysts expects 22 E-Jets would be delivered in the quarter. But the backlog is up 44% year-over-year, largely on the strength of the launch of the E2 (150 orders, 100 of which are for the smallest E-175 E2 and 25 each for the E-190/195 E2), and orders from Republic Airways Holdings and SkyWest Airlines for the current generation of E-Jets. The E-175 remains to most frequently-ordered airplane.

Although Embraer is expanding the size of the E-195-E2 by up to 12 seats, orders have been few. The E-190 has proved a better-selling model than the E-195.

EJet_E2 Compare

Source: Embraer

Officials expect to have a healthy fourth quarter delivery stream.

Mitsubishi MRJ: Assembly for the first Mitsubishi MRJ Flight Test Vehicle (to borrow Bombardier’s term for the CSeries) is underway. The first delivery was originally planned for this year; it’s now planned for 2017, four years late. This rivals Boeing’s 787 and exceeds the Airbus A350 and as yet the CSeries.

JAL, ANA Politics: Reuters has an analysis about the suspicion politics may have been involved in the decision by Japan Airlines to buy the Airbus A350 and the pending order by ANA of an Airbus or Boeing airplane.

Odds and Ends: ANA, Airbus and Boeing; Era of the jumbo jet; Repo wars

ANA to stay with Boeing? After losing Japan Airlines to Airbus, analysts are split over whether ANA will also defect. Some say JAL’s order will give ANA cover to defect. Others say JAL’s order will increase the pressure on ANA to stay with Boeing. The Seattle Times this story. Our take: compare this with what happened following American Airlines’ order with Airbus. The Delta Air Lines competition was next, and Boeing was determined not to lose that competition–and it didn’t. Market talk says Boeing’s price to Delta was 10%-15% below Airbus’ offer, though this has never been confirmed. We understand there were other considerations besides costs. Regardless, both sides are going to go all-out to win.

SuperJumbo Era: The Financial Times has a story about whether the era of the super-jumbo (the Airbus A380 and the Boeing 747-8) is over (free registration required). Bloomberg has a story about the Boeing 777X being a jumbo killer.

Repo Wars: Here’s an departure from our usual coverage–tactics used to repossess an airplane from a delinquent airline. A decade ago, we were involved in a similar situation, planning the repossession of a Boeing 767-300ER from a South American airline. The lessor obtained a court order while we did some behind-the-scenes plotting to “arrest” the airplane at Miami. It was at the gate, full of passengers when the sheriff served the pilot with the court papers. Secrecy was imperative, as the story linked above references. Once the airplane was seized, the airline rescheduled a second 767 to stay on domestic service so the lessor couldn’t seize that airplane, too.

Odds and Ends: ANA to be battle royale; Boeing’s top salesman; Delta and the A380

All Nippon Airways Wide-Body Battle: Having lost a bombshell order to Airbus at Japan Airlines, the focus in Japan now turns to ANA, reports Reuters. Will Boeing shift work from Japan? Reuters has this story.

Boeing’s Top Salesman: Jon Ostrower has a very interesting and candid story about Boeing’s top airplane salesman, John Wojick, and the 787 program. Via Google News in a new Wall Street Journal format, it looks like it’s not behind the paywall.

Delta and the A380: Delta Air Lines flies the Boeing 747-400 but it doesn’t look like it will fly the Airbus A380. See this story by Motley Fool.

Backstory on the JAL deal from Bloomberg; ‘Boeing blew JAL, others’ says Aboulafia

Japan Airlines deal: Two items of note came across our desk concerning the Japan Airlines’ order from Airbus for the A350-900/1000. The first is from Bloomberg, which has an interview with Airbus CEO Fabrice Bregier. Lots of speculation exists that JAL ordered the A350 because of the problems with the Boeing 787. While this may have played a role at some level, Bloomberg reports that Bregier began his efforts prior to the JAL 787 fire in January.

The other is the October newsletter from Richard Aboulafia of The Teal Group that takes Boeing to task for essentially blowing the opportunity to retain JAL’s business for the 787-10 and/or the 777X. At this writing, Aboulafia hasn’t uploaded his newsletter to his website (so keep checking). In a nutshell, Aboulafia raps Boeing management for dithering on both airplanes. Had Boeing authorized the 777X six months ago, Aboulafia writes, Boeing could have kept IAG (British Airways) and if launched in 2012, Cathay Pacific could have been kept.

Aboulafia also predicts JAL’s rival, ANA, will buy the A350. Otherwise it will be at a competitive disadvantage, he writes. The newsletter is quite harsh.

Airbus breakthrough: Japan Airlines orders 31 firm+25 option A350-900s/1000s

JALAirbus scored a big breakthrough October 7 (Tokyo time) when Japan Airlines announced an order for 18 A350-900s, 13 -1000s and options for 25 more.

This is a huge win for Airbus and a big blow to Boeing’s decades-long wide-body monopoly in Japan.

*******************************************************************

Update, 06:15 am PDT: Here are a couple of stories about the order.

Reuters: Airbus clinches landmark deal.

CNBC: Deal shows loyalty fading fast

Reuters: Airbus sees JAL deal spurring R&D in Japan

AP via Seattle Times: JAL says deal unrelated to 787 woes

Airbus press release

Reuters, 0800 PDT: 787 woes did contribute to JAL Airbus purchase, says Boeing exec

********************************************************************

JAL A350-1000JAL, and its rival, All Nippon Airways, had been reported nearly a year ago giving serious thought to ordering the A350 as a way to diversify its reliance on The Boeing Co., long the exclusive supplier for wide-body aircraft at the two carriers.

The lengthy delays for the 787, followed by the 3 1/2 month grounding earlier this year, are widely believed to be behind the consideration to buy the A350. John Leahy, COO-Customers, told us in advance of the Paris Air Show that he did not expect orders to be announced at the international event (and they weren’t) but he hoped to conclude something before the end of the year.

Boeing has a deep relationship with Japan and its international carriers. Japan provided around US$2bn in financing to the so-called Japanese Heavies to help fund their participation in the 787. It was suggested, but never confirmed, that Boeing might build the 777X wings in Japan to snare orders and keep Airbus from winning an A350 deal.

Relationships mean everything in Japan, and the strong one between Boeing, the government and the airlines combined to make Airbus a miniscule player there. Fear of offending the Japanese is why Airbus and the European Union didn’t include the government’s funding of the Heavies for the 787 in the bitter international trade dispute between the EU and the United States.

Odds and Ends: CSeries, 787, A320neo v 737 MAX, First vs Business; Southwest Air

CSeries Powers On, Compresses Schedule: Bombardier is racing toward its first flight. The company powered on the CS100 Flight Test Vehicle 1 yesterday and Jon Ostrower had this article about BBD compressing the schedule to stay on track for launching the CS300. Static testing of the wing has been completed.

Next phase for 787: With yesterday’s successful test flight of the 787, Boeing is ready to move on to the final series of tests to return the aircraft to service. The Wall Street Journal reports that the new battery containment system will be tested once again by pushing the battery to destruction. Boeing hopes to get the airplanes back in the air by May 1.

The National Transportation Safety Board will hold public hearings April 21-22.

A320neo vs 737 MAX: Following the recent round of orders, Airbus now has a 65% market share for its neo vs Boeing’s 35% share for the MAX.

First vs Business: Here’s a piece we did for CNN International on the merits of First vs Business Class.

Herb and Lamar would roll over: Southwest Airlines finally acknowledged what we’ve been whinging on about for years: it’s not the airline of Herb Kelleher of Lamar Muse any more. We’ve written many times that this “legacy LCC” drifted away from its low cost model, its focus on simplicity and its point-to-point strategy in a series of steps. It took the mainstream media a long time to catch up to what we wrote so long ago.

Odds and Ends: Post-SPEEA Vote; LionAir and RyanAir; ANA skeptical of Boeing timeline

Post-SPEEA Vote: The ratification of the contract offer by Boeing by the SPEEA technical workers is welcome news. It gives Boeing and its stakeholders certainty at a time when the 787 issues remain outstanding and the developmental programs of the 777X, the 787-9 and 10, the 737 MAX and the KC-46A are at important stages. Although SPEEA took a loss over the pension issue, the union was able to extend the previous contract provisions over economic issues for another four years. Call this a draw for the two sides.

LionAir and RyanAir: On Monday Airbus announced an order for 234 A320ceo/neo family members from LionAir, previously an all-Boeing customer. Today Boeing announced an order for 175 737-800s from RyanAir, an exclusive Boeing customer. There were no MAXes in the order, however. RyanAir CEO Michael O’Leary has not been a fan of the re-engined 737.

ANA skeptical of 787 timeline: Reuters has an interview with All Nippon Airways in which it expresses some skepticism about the Boeing timeline of returning the 787 to service within weeks. ANA calls this a “best case” scenario.

On the other hand, LOT, which took the 787 out of its schedule through September, now says the airplanes could be back in service by summer.

Vote in the Polls: All Nippon Airlines has begun its effort to rebuild the 787 brand flying in its colors. Boeing began its effort last week. Is the view of the 787 turning? If you haven’t already done so, please be sure to vote in these polls (scroll down after clicking the link).

Paine Field Pleads its Case: Targeted for closure in Sequester, with a decision to be announced this week, the director of Everett Paine Field pleaded his case to remain open in this letter:  FAA Tower Closure – Paine Field (1).

Well wishes: Daniel Tsang, founder of Aspire Aviation, has been hospitalized in Sydney, Australia, with an unknown ailment first thought to be measles but it’s not. Well wishes to him.

 

787 battery diagrams

Boeing Monday (Feb. 18) made available two battery diagrams for the 787 lithium-ion batteries.

Diagram #1

Diagram #2

  • The New York Times has a Reuters article revealing the second battery on the ANA 787 had some swelling.
  • Boeing was seeking extended ETOPS prior to the incidents, according to this article.
  • Bloomberg News has this long article on the prospect of a SPEEA strike vote tonight.
  • Where’s Waldo is a famous game. Where are the grounded 787s? See here to find out.