Odds and Ends: Bombardier lands Delta’s RJ deal; 787 events in perspective; Airbus/China; Enders victory

Delta Air Lines: Bombardier, in a welcome development, landed a major order with Delta for 40+30 CRJ900s, beating out Embraer’s E-Jet proposal. Delta has a large, installed base of CRJs and EMB wasn’t too optimistic, in management-analysts meetings last week, according to research notes. But BBD liked its odds, considering the CRJ is more fuel efficient than the E-Jet (being a small airplane), even if the E-Jet is far more comfortable.

For BBD, the order is important for two reasons. First, the CRJ backlog is shrinking. Deliveries begin 2H2013, and this illustrates the point. Second, with BBD sucking up cash in advance of CSeries first flight in 1H2013, the deposits, progress payments and delivery payments are welcome, indeed.

The next face-off between the two OEMs is American Airlines, where both have large installed RJ fleets of aging aircraft.

Boeing 787 events: Airworthiness Directive. “Emergency” landing. AirInsight puts things into perspective.

Airbus lands China orders: Hmm. EU suspends plans to impose ETS tax. Airbus lands orders for 60 A320s and 10 A330s. What do you make of that…

Enders now 1-1, sort of: Tom Enders, CEO of EADS, lost his bid to acquire BAE Systems due to German government interference. The merger would have reduced government meddling, balanced EADS commercial and military business, put EADS on a more equal footing with Boeing and positioned EADS better for US DOD contract bids. But Enders has now won a corporate governance restructuring that ends government meddling in daily operations. He still hasn’t achieved his other goals, but this one is so huge that we rate Enders’ won-lost record 1-1.

11 Comments on “Odds and Ends: Bombardier lands Delta’s RJ deal; 787 events in perspective; Airbus/China; Enders victory

  1. The 787 airworthiness directive on fuel leaks is getting much more attention than it deserves. ADs are issued by the tens per aircraft model per year. The majority goes unnoticed by the public. But what’s up with Quality Control at Boeing?

  2. I agree with most of what you said, Guru Josh. But fuel leaks were only found in 3 airplanes, so far, out of some 35 delivered to date. That is only about 10%. The other in service airplanes must be inspected and I have not heard of any more airplanes found that needed repairs, beyond the 3. I don’t see this as any type of trend regarding Boeing’s QC. I also don’t see this as any type of less than perfect final inspections by the SPEEA engineers at Boeing just prior to delivery.

    This is much different than the final inspection of GEnx-1B, or -2B engines prior to delivery from GE to Boeing for installation on B-787-8s and B-747-8s.

    These fuel leaks were found during regular inspections of in service B-787s (post flight inspection?). Which is much different than the wing rib-foot cracks that were first found on the QF A-380 “Nancy Bird” after it had an in-flight engine explosion. I am confident that problem would have eventually been found during inspections, too. That accident just happened to show the problem a little earlier than if it was discovered later during an airline maintenance inspection.

    Congradulations to BBD and DL on their RJ aircraft buy. It is a well needed shot in the arm for BBD.

    I don’t see this as a win for Tom Enders, yet. He may have an agreement to limit Germany, France, and Spain’s ownership of EADS to 30%, but the AW&ST story doesn’t say when this will happen. Yes, the 30% government ownership is down from 51% back in 2000, but it went to that level a few years ago. Under this “new” agreement, Spain will own 5.6%, France and Germany each with 15%. I am not good at the new math, I went to elementrary school way back in the late 1950s and early 1960s. Back then this math would add up to 35.6%. I am a product of the “old school”, sorry.

    • I’m not sure about this, so do not bite my head off. Also I am not, nor do I wish to be any type of financial expert but…

      I believe some of the nominally french and german “ownership” of EADS is through national public-private cooperations. even though the governments are majority stake holders in these cooperations, some of that “ownership” is private. Thus, the math, using a few fractions, could add up to ~30%.

    • 10% assembly errors would imho break any ETOPS certification as it has immediate repercussions on flight savety. The fault revelation interval must be shorter than the fault activation horizont. ( IMHO not valid here but valid for the ribfeet issue )
      Interesting question ( for me ):
      Does the “no worker shall work on the same components of redundant system instances” apply for factory work?

      • We don’t know this is an “assembly error”, or not. The airworthiness directive calls for inspections, then repairs as needed. Yes, it is a flight safety issue since it addresses a fuel leak, or possible fuel leak.

        But ADs are common among just about every type of airplane. The B-787 is not unique in this respect. ADs are issued to prevent a possible future event that could happen should the issue not be addressed. They are not commonly used to ground an airplane type. An AD still allows the arplane to be used as it was intended to carry pax and/or cargo on daily missions while inspections are made, and/or then repaired as required. An AD does not prevent an airplane from being used during ETOPs operations.

        “Does the “no worker shall work on the same components of redundant system instances” apply for factory work?” Good question, but I don’t know the answer. What does this have to do with this B-787 AD?

    • “Only” 10% found with a manufacturing error is not a trend?!?

      (Note: I’m not slamming Boeing here, stuff happens…)

  3. kc135topboom :
    “Does the “no worker shall work on the same components of redundant system instances” apply for factory work?” Good question, but I don’t know the answer. What does this have to do with this B-787 AD?

    wording was:
    “… to inspect 787 Dreamliners for improperly installed fuel-line connectors …”
    (Q a pipe to pipe fitting or one of these “leakfree separatable” connections )
    ~=assembly error. contrast with design, manufacturing or process errors.

    Thus: Quite a lot. Can you have a dual “hit” on one plane or not?

  4. With all respect to AI, their view of this is just plain BS.

    D. Gates has a piece on this.
    http://seattletimes.com/html/businesstechnology/2019828980_dreamlinerfaaxml.html

    It makes clear that this was no minor problem. It created an imminent danger of a very serious accident. It arose because production people (it is not clear whether the production was in Wash and SC) failed to properly hook the fuel lines in the pylon to the engine. It is incomprehensible how at this stage of this plane’s deeply troubled development any frame, let alone a large number of them, could have been produced and gotten out the door without these problems being caught. If one of these planes had gone down because of this, the 787 program would be done, brought finally to a merciful and perhaps long-overdue end; and B would be done too.

    This is just the kind of thing B has lied and mislead the public and their customers about for years. Given that history and the seriousness of this debacle, who is going to believe anything B says, even if it seems truthful. It is significant that so far B will not reveal in specific detail what the production errors were, but no matter how they occurred they are inexcusable at this stage of this program, and AI should have made that clear. By not going after B very hard on this, AI and other media become enablers of those at B who are responsible for this mess and want to perpetuate what remains of their dysfunctional 787 production system. This is not in the end a matter of material things – production lines, structural organization, etc. It is a matter of soul and will. Do people at B finally want to leave behind the childish, irresponsible culture that gave rise to the 787’s dysfunctional production system, the culture that refused to recognize and deal with real risk, and instead rewarded those who ignored it? With this latest event, I think the jury is still out.

    Reply

  5. kc135topboom :
    Under this “new” agreement, Spain will own 5.6%, France and Germany each with 15%. I am not good at the new math, I went to elementrary school way back in the late 1950s and early 1960s. Back then this math would add up to 35.6%. I am a product of the “old school”, sorry.

    If you actually read the article it quite clearly says that France and Germany will each own 12%, and Spain will own 4%, for a total of 28%. And they are agreeing to keep that total below 30%. The 15/15/5.6 is the current ownership, not the future one.

  6. IMO Airbus should be its own corporation, no more political influence needed. EADS could hold a minor control post and that´s all. If EADS wants more military business in US they better team up with NG,LM or Boeing.

    As all 3 defence giants are publicly traded stock could EADS in theory buy some control posts in these?

    • Think about why BAE shares rose from the merger offer in view of the obvious problematics of the resultant company participating in DoD procurement 😉
      US Defense spending is a contracting market in a jingoistic/protective environment.

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