Boeing won an important, symbolic victory over Airbus in the neo v MAX competition by nabbing SilkAir, heretofore an exclusive Airbus A320 family customer.
SilkAir will order up to 68 Boeing 737-800s and -8 MAXes.
After Airbus grabbed three 737 customers for its neo family, Boeing vowed to aggressively go after Airbus operators. SilkAir is the first win in this effort.
SilkAir has been a loyal A-320 customer for years……until now. It is good to see the tables get turned on Airbus every once in a while. Now if Turkish Airlines would just sign on the dotted line for the B-747-8Is they have been talking about……
Who has been talking about it? As I can remember TK talking about the 747-8i specifically anymore than they’ve been talking about the A380, correct me if i’m wrong though
Silk Air must have got a very conviencing offer from Boeing but it seems that it was not good enough to sign directly a firm order.
That LOI will allow Silk Air to put the required pressure on Airbus.
Both boeing and airbus make great planes and have incredible manufacturing power compared to the “little guys”. With the right pricing, slot availability and pricing (read: right business case), any of them can grab each other’s customer. In the recent past, airbus was the “little one” of A vs B, but now both of them have become more equal, and airbus can no longer play the slot availability card. It also seems that as an organization, airbus seems to get more driven by margin that was in past as it phases out of the startup minset it carried.
Basically, we will see more customer robbery both ways… and boeing will also be doing its own to airbus. This will become business as usual for these two aircraft giant. If anything, it show what a stable market the nb really is.
Yes, this no longer is a “cosy” duopoly.
This is Boeing clawing back up a slippery slope with stepped up help from
the government. Wonder what a fresh (wiki)leak would expose.
Why is it when Airbus “steals” a Boeing customer it’s just the awesome elan of Airbus, but when Boeing turns the tables it must be because of “help from the government”???
AFAIK, A32X series will stop being produced in late 2017/ early 2018, while the 737NG prgram will carry on for another two years with the last 737NG being manufactured in late 2019/ early 2020. With the assumption of all things being equal (backlog, total production out, putproduction ramp-down on the A32X and 737NG, production ramp-up of the neo and the MAX, etc.), Boeing has some 800-900 more slots to fill on the 737NG than what Airbus has to on the A32X-series. IMO, this should partly explain why Boeing is seemingly going all out in trying to secure orders for 737NGs and why they are seemingly extremely aggressive in offering the combination of the 737NG and the MAX to existing Boeing customers as well current Airbus customers. Airbus, on the other hand, is only in need of a couple of hundred more sales for the A32Xceo in order to fill the remaining production slots.
I’ve been thinking for a few months we should be nearing this situation: Despite the neo’s earlier availability, those earliest neo slots (between 2015 and 2017, when the MAX enters service) are likely now all committed. If so, Airbus can no longer sell the profitability power of neo economics being available sooner. If we’ve reached that point where both companies are only able to offer slots in in the same timeframe, I expect we’ll see the same kind of market parity going forward that we’ve seen over the past decade between these two types.
Despite today’s announcement by Silk Air, I also think this will largely end major defections by customers on either side. In other words, prepare for things to get boring again 😛
The wildcard in all of this is the CSeries, which I expect to grab in increasing share of the bottom end of Boeing and Airbus’ market.
Airbus’ Mobile plant will solve some of the slot problems.
Even if we assume ramp up is nearly instant Mobile would deliver <25 in the first year and below 50 further on
resulting in ~10% capacity increase in the first two years.
In real life there probably will not be much difference to the
Tinajin production schedule timeline?
Do you believe Airbus has production capacity (including the Mobile plant) which they are not currently offering for sale? That wouldn’t be very smart, now would it?
Since Mobile was only approved a few weeks ago, we would say the answer this was yes. Now that it has been approved, of course they will be offering slots for sale.
And of course it depends on the supply chain.
But Airbus isn’t doing Mobile to maintain current capacity. It’s doing Mobile to increase capacity. And Airbus said the first ceo will roll out of the factory in 2015, followed by neo shortly thereafter. And there isn’t a thing Boeing Boeing can do about it vis-a-vis MAX, which isn’t to enter service until 4Q17.
No it won’t. They can only build as many as the supply chain can feed. That won’t change with Mobile. It just trades a plane built in France for one built in the USA. Airbus would need to expand their suppliers and their own production facilities to make the difference. Airbus right now, per Enders could final assemble 50/mo. The supply chain can’t keep up with that. Mobile will not expand availability by a single slot.
Wildcard?? Who?? 😉
Even if the “wildcard” schedule remains on track (I’m with Aboulafia about 12-18 month delay), “aggressive pricing” on new builds and decreasing lease rates (as Allegiant demonstrated) indicate that the cards are not lining up for a “wildcard” to grab much of anything.
2/5th of the aquisition are regular NGs ( obviously to be delivered before 2017 ? ).
Did they get an offer they could not refuse ( price, financing, “fringe benefits” ) ?
Now why would a company that is run by beancounters focusing on profits do that? Winning a sale on planes that don’t make money doesn’t make bean counters very happy. Now in the socialist model the goal is to keep the most people employed and therefore it makes more sense to sell planes at a loss to keep the factories full.
You are caught by the “Einstein Trap”.
“Make your model as simple as possible. But not simpler.”
And when logic fails, use BS and diversion to confuse the issue :-). Not very scientific…
Probably something similar to what Norwegian Shuttle must have received for their A320.
Despite today’s announcement by Silk Air, I also think this will largely end major defections by customers on either side. In other words, prepare for things to get boring again
What? I hope not! Customer robberies are the most exciting thing in the aviation industry world! Keep them coming with some extra chilli, 747-8i and cs-series!
Airbus now wants a higher share of the profit of the market, Boeing is feeling the heat of the early neo slots bookings, and bombardier wants to sell their c-series for a fair price; all while lease rates of the smaller nbs is going down the drain. Jeez! Game on! I don’t believe this is going to be a smooth ride!
Because Ms. Clinton was rather proactively vocal on that topic and the US needs some fine gifts to further their interests in the region to pile up weight against the chinese? ( and enough historic evidence to fill a basket 😉
I would expect similar advances in Turkey to push their “trash Syria” agenda.
So are you suggesting that Boeing is giving away airplanes so that the US goverment can further it’s strategic goals? Or are you suggesting that the Secretary of the State is paying Boeing to sell planes at a loss for that purpose? For a goverment that can’t even pass a budget in the middle of a major partisan battle that sounds impressive. I doubt you will find many Americans who thinks their goverment works that well. Also wouldn’t it work much better to just give the Singapore goverment a bunch of F-18’s?
BTW – I am impressed that we have managed to link an announcement of an airplane order from an Asian carrier to the US goverment “trashing Syria”.
Such bitterness and you are not even employed by Airbus..
LOL! You are trying too hard, UWE…
So it was government intervention?
Or maybe it was product dumping?
Or perhaps it was special lending terms from Boeing or Ex-Im?
Or did someone offer a tempting bribe, or even a “special” massage?
Since you can offer nothing to support this rubbish, you offer this???
Almost certainly it would expose nothing, but don’t let that stop your truly excellent imaginings!
The truth is 9 times out of 10 aircraft purchase decisions are made on a host of very normal business criteria which encompass everything form aircraft price and finance terms to technical performance, revenue potential, operating costs, and delivery positions. All of these factors are given a value and weighted in an evaluation model, where each OEM’s offering is competed against the other on a life-cycle (NPV) basis. If you want to make safe assumptions, bet on this kind of decision making, rather than looking (hoping) for some sinister undercurrent, as this is the basis on which most aircraft purchasing decisions are made.
Both Boeing and Airbus are linking current model orders with orders for the MAX and neo in order to ensure the very tail end of production for the current models get sold.
Not necessarily – see above. Production cut-over to the new models will take about 2 years for both OEMs. There will certainly be 2018 737NGs, and likely a few 2019 737NGs which are produced.
If Aspire Aviation(whose opinions mean very little to me as a blogger) is to be believed, Airbus won the yet to be announced Pegasus Airline order, so I guess that’s another defection to Airbus?
@Bryan, have a link to the Pegasus Airline order?
It’s not officially announced. Like I said, it has been mentioned only so far by Aspire Aviation, and here’s the link to the blogpost where he mentions it:
From the article: “A key litmus test would be Turkey’s Pegasus Airlines, where Airbus is close to signing a memorandum of understanding (MOU) with the Turkish carrier for the A320neo, multiple Aspire Aviation sources at Airbus and Boeing confirmed. Boeing is understood to be making a last-ditch effort to lure back the Turkish carrier for the 737 MAX aircraft.”
Have they? I only remember Randy talking about the Hunchback.
The right to choose is perhaps the most essential right of free enterprise, be it delivery dates, price or one of a host of other reasons, Silk Air’s selection is quite a coup for Boeing, even more suprising as the airline is still taking delivery of 320 varients & the implications this order brings to the fleet operating costs.
As we don’t see any anything dramatically new offered from the aircraft type selected the assumption must be made that it’s a decision based on price & delivery dates.
The assertion that Boeing has woken from it’s long slumber may be correct, but this order goes little way to address the dramatic almost ran single aisle exodus Boeing has suffered over the last twenty years.
I think this is a bit of hyperbole from Aspire, particularly considering who Pegasus is. They are linked by ownership with Air Berlin and IZair (now Air Berlin Turkey), all of whom have operated both A320s and 737s and have a demonstrated history of dual-sourcing and switching types. Product loyalty has never been their style.
You realize both companies have essentially split the market evenly over the time period you are referencing, right?
CM: As you I and the industry are aware:
The single aisle market has been almost evenly split (not quire or essentially) over the previous twenty year period, many would question your remark, if only because the competitor did so from an almost nil production rate, quite an achievement by any measure, clearly!.
Relatively stationary market shares for the last 12 years.
In the 15 years before a fast rise.
The effect of the NG “levy” is visible but did not stop the tide.
( I should add in the DC9/B717 numbers. others? )
Correct me if I am wrong, but I believe this Silkair order is the first “flip-flop”.
They were originally a 737 operator and then went to Airbus and now its back again.
The only very critical parts of the supply chain are the engines, otherwise, I just thing the other issues can be overcome, with suppliers, increasing production, or duplicating sources, these NB are not rocket science, and duplicating galleys providers, through a 2-3 years lap is not an impossible task, for example !
In the other hand Silkair choice may be driven by a host of reasons …
– They may want to use the two types of NB, A & B in thr long term !
– They may be irritated with Airbus for a lot of reasons, A380 Wing behavior, high pricing from JL, lack of A320NEO slots, etc …
– I see, some heavy underground play, from the engine makers, CFM may have it’s owm sales politic, in this case !
They are unable to compete with P&W for early slots … and know they are at risk to be relegated 2-3% behind the perf’s of the P&W GTF,
So they may lost the market, if they go ahead with the A320NEO, and are 100% sure to win it, for later planes, with B737 MAX … which OEM would you choose to help, in this case !
I see a large “political” downplay from Airbus for the future capacity of the Mobile FAL !
They may be planning the double line FAL ASAP, to churn out 2 A/C à week, and an US assembly may prove to get a ramp-up clearly quicker than the Chinese one !
Just see Boeing’s impressive progress at Charleston !
John Leahy has been unable to offer Mobile Slots before Farnborough … and the business they are loosing now, has been initiated months ago !
The bigger issue is not A vs B, it is a+B vs the new competitors. A+B has lost the 736/A318 market and now 737-700/A319 is the next market to get taken away. Things are heating up, how will the old duopoly do? Will they give up below 150 seats? Will they aim higher say 215-225 seats, to cover the market above A321/739?
None of the duopoly has a winner below 150 seats and none has a very good 210 seat + frames. I guess both will have to go back to the drawing board on the higher scale, is the A310/767/757 market niche big enough to spand resources on it? The russians are aiming right at the duopoly heart 738/739/A320/A321 sized market. Bombardier/Comac is going to eat the 126-150 seats market from below.
Will the duopoly wake up in time and figure out how to defend the NB market? It will take new models and new engines, wings etc I think they have lost the 737-700/A319 as well now. A late wake up can be brutal, it has happened before, with old behemoths asleep at the weel being overtaken by fresh thinkers. With the MAX/NEO programs very few orders have been placed for the smallest frame offered, maybe its time to go bigger instead, A325/7310? A bold move but wise with time IMO.
Traffic and planes are growing together ….. no much science !
The A319-737-7 may be lagging, but more for lack of interest of the airlines for this segment !
An all new plane like the CSeries, only get 140 orders, vs 2000 for the NEO/MAX pair !
For 2016 P&W will have to deliver in excess of 80 engines à month to Airbus !
Awaiting the arrival of the Leap … may be late and slightly under spec’s the GE Way !
And may be only 6 to 8 engines/Month to deliver for the C-Series, if it is not late in EIS… hum !
Add the same qty, for the MRJ, and pre-serial for the MS21 !
The next choice to come, for P&W, and concerning the manufacturing priorities, may be interesting in East Hartford !
Congratulation to Boei g for this commitment tobuy and take options on the 737NG and MAX. Hopefully they will be able to escape the strategic pricing we saw sofar.
A350 XWB MSN1 Cockpit Avionics + Core Electronics powered up for the first time
As the first A350 XWB prototype air frame dubbed “MSN1” is nearing completion, on August 2nd its cockpit avionics and board computers have been powered up for the first time.
They will keep running all the time, while the rest of the peripherals are integrated successively.
Early power-up considerably helps to avoid integration errors, which could sum up and later pose complex debugging and testing problems.
Anyway, powering up the on-board electronics is a milestone for each new air frame, and is hinting at the rapidly approaching first flight, will for the A350 XWB is scheduled for 2014.
MSN1 is following the very first MSN5000 air frame, which is only for non-destructive and destructive testing and not for flight testing.
Total firm orders for the three A350 variants are now standing at 574 (August 2012).
Link to pic of the still “naked”, but already powered up A350 XWB cockpit avionics:
It takes a little getting used to it, to see an almost fully digital flight deck for the first time.
When do they plan to install the control columns and yokes? 😉
The MiB style autopilot with inflatable pilot, column and joke will be installed late, after flighttesting, to avoid unpleasant mishaps 😉
Airbus advises to not order the option.
“nearing completion”??? What are you talking about? They don’t even have a center, aft fuselage, or set of wings… they did “power on”, on a half present bird. This is little better than the faux roll out of the 787.
How could that be? Airbus accident findings are always “pilot error”.
Yeah, they pluged all those boxes with little flashing lights into a wall outlet….
First PowerUp is supposed to precede attaching the wings anyway afair.
No idea if it is also supposed to be before doing the fuselage joins in regular production.
Having the join interfaces available for pretesting could be very helpfull imho. Being able to test connectivity while installing/attaching components is very usefull.
“This is little better than the faux roll out of the 787.”
I am trying to figure out your justification for writing this. Well I actually do know, but let’s discuss this comparison of yours.
We are talking about someone in a blog mentioning powering on the cockpit section of the A350 nose section and you want to compare this with an empty shell of an aircraft (sans any capability of powering anything up, if I recall correctly) being rolled out in a very public ceremony?
Silk air was 737 customer. She had 6 frames between 91 and 99. 9V-TRF crashed due to “rudder handover” issue.
Baying an aircraft is complex process with involves many variables. Some of them are on “supply side” – delivery date, purchase price, training, CMV, future base value and so on. Others are on “demand side” such as propensity for air travel, O-D demand, branding and so on. I could be that 150 seater is to small and 185 to big for some markets. From the other hands all Singapore based LLC flies 320 family, so it makes sense from marketing point of view to choose 737.
Not true, Balkan. The MI-185 crash in Dec. 1997 was not caused by any rudder issues. According to the Indonesian NTSC, who was the lead investigating agancy, the cause was ‘undetermined’. The US NTSB, who assisted in the investigation said the cause was ‘intentional act by a pilot, most likely by Captain Tsu Way Ming’. This crash was not caused by the rudder or any other parts of that B-737-300.
Boeing settled out of court with the surviving families. ( and swapping out Boeing/NTSB for Airbus/EASA you’d be all over
those findings 😉
No needs to fight on the cause of the crash. The CVR was off, so we could only guest on the cause of the crash and the reason of the malfunctioning of CVR. I think the coincidence with United Airlines Flight 585, USAir Flight 427, Copa Airlines Flight 201, Eastwind Airlines Flight 517 is striking. It is my opinion.
Thank you for cementing my point 😉