Airbus Group beat expectations for its first quarter profit. Continuing research and development costs weighed on earnings before one-time charges. Earnings before interest and the charges were actually down slightly vs 2013 but were better than expectations.
Group still expects the A350 to enter service with Qatar Airways late this year. According to Ascend, there will be one airplane delivered in December (at one time we thought it would slip to January, so we may not be far off). Group continues to call the A350 program “challenging” and notes there could be more charges against earnings. Under European rules, Airbus writes off charges as they occur rather than using Boeing’s program accounting method that spreads charges across hundreds of airplanes.
Cash declined nearly 1bn euros year-over-year to 13.1bn euros.
Links to the PPT presentation and financial statements may be found here.
Update, 0800 PDT:
Although I cannot see the Flightglobal article on the B767, I am pretty sure it is dead. Beside the fact that no-one ordered it (despite record backlog, crack-cheap finance and record demand for large single aisles), it has a number of technical disadvantages. In its current design state, it will neither outperform a smaller single aisle or a larger twin aisle on a cost-per-seat basis. There are very few markets where an airline actually needs exactly the seat count. So, there is little incentive to order it.
And no, a new engine will only cure one of the problems.
I have read the FG article, and I agree with Schorsch: As a pax aircraft, the 767 is done for. I wouldn’t completely rule out a small order in the next couple of years, simply on the basis of “never say never”, but I’m really not holding my breath.
The freighter will probably see a few more orders – against the backdrop of a weak freighter market, though.
In the article, some USAF officials link FedEx to the 767-2C, the slightly elongated 767-200-based 767F that the KC-46A is based on. Scott has done the same as far back as June 2013. To be honest, I’m not holding my breath on that one, either. They’d be signing up to what would likely be an orphan; a sub-variant with its very own fuselage length (and presumably heavier structure: http://www.flightglobal.com/news/articles/usaf-promotes-767-2c-as-civil-freighter-370214/ ) and different avionics from other 767s, introduced at the very end of the commercial life of the programme. It’s just 2m longer than the 767-200, which itself never saw any new-built freighters and has seen only a handful of conversions.
Seems like a pretty hard sell, to be honest, even to current operators of 767-300Fs.
Although I can of course see why especially the USAF would want you (and Boeing) to believe that the 767-2C is a viable commercial freighter. I don’t find this a very convincing proposal, to be honest.
All of that leaves us with primarily a single market for the 767 in the next decade: Military applications.
There’s the potential of up to 179 KC-46As, of course, which in itself is quite significant. However, beyond that, the air is getting quite thin. As Flight Global point out, the 767 was previously selected for a couple of additional US military projects – which subsequently got cancelled. Considering that even the US military now has to watch its spending patterns, I doubt many more opportunities for placing 767s will arise between now and 2025.
Military export opportunities would be limited to the tanker variant (as the only military 767 variant currently available), but Boeing is facing a bit of an uphill battle there against the A330 MRTT.
As for the prospect of using the 767 as a 757 replacement: I’m not sure who would seriously suggest this, to be honest. As even the FG article points out, the 767-300ER has a list price that is about twice that of what – adjusted for inflation – a 757 would cost today. A 767-300ER also costs ~70% more than a 737-9 or A321neo – before we’re even talking about operating costs.
This really doesn’t spell “viable 757 replacement”.
As an airline, if I could fill a 767 or A330 today on my longer 757 routes, the 757 is the wrong aircraft to begin with. If my 757 is just the right size and range, a 767 or A330 still isn’t the answer, even at rock-bottom prices.
As an aside: I do think that the whole 757 replacement saga is something that is hugely overplayed. A significant number of 757s are already slated for replacement by 737-900ER and -9, and even more so by A321(neo). Sure, there is a small gap of 757 missions that neither of them can fill.
But if we assume this affects ~5% of all 757 missions today (the number generally quoted), that’s still only equivalent to about 50-70 757s that have no 1:1 replacement aircraft available.
During the next development cycle – A320neo/737MAX successor – that niche will surely be filled. But at that point, market dynamics will shift anyway, as I would expect the respective families to be slightly upgauged. Which means you can’t just get a plane that can do 100% of A321neo/737-9/757 missions, but also a bunch of missions these could not do. That’s a whole different value proposition for customers and manufacturers than bending over backwards to provide a 1:1 replacement for a small subset of today’s 757 missions.
I doubt that the US Air Force will order all 179 KC-46. The fleet of USAF fighter and bomber aircraft will shrink dramatically to save the F-35. Therefore the USAF will need far less tanker aircraft to refuel the remaining fleet.
The 767-200 was offered by Boeing due to the far worse take-off performance of a 767-300 compared to an A330-200 on short runways (fuel load). Still an A330MRTT can take off with a higher fuel load from short runways than a KC-767-200.
At some point someone at Boeing realized that the larger cockpit with the operating station for refueling, sleeping compartment and other stuff required by RFP like permanent seating would take the main deck cargo door to close to the engine. So Boeing had to stretch the K-767-200 a little bit.
I can’t see any reason why a commercial cargo operator should buy the 2C instead of a -300F. A 767-300 can carry about 6 more LD2 container in the belly and at least one more big palette on the main deck. For commonality reason any current operator would order the actual -300F with right the same cockpit.
I would actually concur that this is a very likely scenario, tying in with the overall budget constraints I hinted at.
Which is why I said “up to 179” 🙂
As far as I’m aware, the USAF have some flexibility in firming up the full number of 179 KC46As, too, as some are still only options (although I couldn’t find a definite source regarding how many of the 179 are still to be firmed up; all sources – Boeing included – just state that exercising all options would take the total to 179).
I think that outside the US there is little debate over which is the more capable aircraft; which is why I said I only see limited potential in export tanker sales for the 767. Never mind that you won’t find any other country anywhere that would order tankers in significant numbers. Look at the orders and RFPs out there:
US – (up to) 179 KC-46A
France – 14-15 A330 MRTT
UK – 14 Voyager (A330 MRTT)
India – 6 A330 MRTT
Australia – 5 KC30A
Italy – 4 KC-767
Japan – 4 KC-767J
South Korea – 4 KC-767 or A330 MRTT
UAE – 3 A330 MRTT
Saudi Arabia – 3 A330 MRTT
Singapore – 3 A330 MRTT
Spain – 2 A330 MRTT
Qatar – 2 A330 MRTT
Brazil – 2 converted 767-300ER
It’s not a huge market as you can see. You’re usually talking about just a handful of planes per country, if even that.
I hadn’t actually thought about the rationale behind the stretch, to be honest, but that makes some sense.
At the time I think there were reports that the stretch was introduced to address concerns following the previous round (won by EADS), where one of the issues identified with the 762 was that it would have required more frames to fulfil the criteria laid out in the RFP. By that report, the 767-300ER wasn’t used as a baseline because its much longer fuselage would have been a problem for the boom on rotation.
I can’t say for sure whether all of this is true – can’t find the report at the moment – but it would at least make some sense and explain the stretch the 767-2C introduces.
Add to that that the 767-2C has a MTOW that’s actually 2t higher than the 767-300ER’s.
It should be no big matter to introduce the required improvements for a slightly higher MTOW on a 767-300.
From your tanker list the only two other KC-767 users except the US are Japan and Italy. Both build parts for the 767.
South Korea will be the next battle but Airbus has one big advantage: Korean Airlines operates 23 A330 and has 6 more on order.
Japan operates KC-767 and South Korean like to distinguish themselves from Japanese.
Ditto on the 767. I liked flying in it, vastly better than the DC10.
As a Freighter it seems to work better than the A330. Either its enough or you want a 777F. Airforce and FedEx will keep it in produciton. I have not seen the cockpit but Boeing accommodated FedEx with a display setup like the 787 and the 2C air force version. I don’t think its the full fledged 2C but its an interim step.
Its downside is the unique can size it requires.
The only way to make it competitive would be new engines, new wing and reduced weight fuselage (LI Al the only option and Boeing has deemed not to go there with the 777X so no trickle over)
And all the added cost would make it cost more than now.
On the other hand, you ain’t going to put a new aircraft just in that slot either as thats even more costly.
It would seem the only “replacement” will be if the 737RS (please lord let it be soon) moves up a notch and they give up the 737-700 size.
The other question to ask is, is there a markets above the 757 pax count and longer range and would the 767 with a major redo work there (shorter range than the 787 of which it would overlaps a bit).
Not a clue, thats all in the market studies we are not privy to. I don’t think so but then what I thunked has not always been right.
A330F orders have been swapped out for PAX planes at Airbus on an FAL line that is at its highest rate ever.
The 767 line currently languishes on very very few pax orders and some freighter orders.
Guess who will offer the lower priced freighter ;-?
Pax orders are virtually non-existent – the last was placed over two years ago, and the last pax 767 on the order book will be delivered in the next few days/weeks.
Not so sure on that – one area the A330 didn’t necessarily beat the 767 in was price. Also, on an A330 line humming away at its highest rate ever, with pax A330 still commanding good prices, why would Airbus want to offer a steep discount on an A330F?
If an A330neo is launched, the only period where Airbus would be in a position to offer steep discounts would be for slots in the roughly 3-year gap between 2016 and the A330neo EIS.
“As a Freighter it seems to work better than the A330.”
I doesn’t, it can’t carry the industry standard LD3 containers/pallets. If congress hadn’t forced the USAF into the 767, the 767 FAL would have been closed just like the 757. Still the KC46C is a vast improvement over the KC135 in terms of efficiency, cargo capability and flexibility. It is unclear what pricing Boeing offered to keep the 767 line open, until the KC-46C enters service.
Not including new engines (GENX/GP7000) on the KC46-C is a crime against future (next 45 yrs) tax payers I guess. I have little doubt that after the first 150 KC-46Cs are delivered/paid, someone in congresss gets the bright idea re-engining with the GENX is a fantastic idea/good business case. Not be ignored: bringing in a lot of local jobs, the earlier the better!
The only point for the KC-46 against the A330 was “fuel efficiency” with a rather strange flight profile (more than 7 touch&go maneuvers on average). An A330NEO-MRTT could beat that and the NEO update is expected to come for free for the taxpayers.
“The only point for the KC-46 against the A330 was “fuel efficiency” with a rather strange flight profile ”
There was another thing. The hoenst right of US companies to compete fairly in foreign defense competitions and the logic of preserving US defense contracts for US based companies and jobs. http://ww3.hdnux.com/photos/02/46/36/681870/3/628×471.jpg
But that’s a passed station. The KC46C looks like a very usefull platform, although Boeing should have taken the 767-300ER and GENX as a starting points. And that isn’t even in hindsight..
Back on topic (767 replacing 757) I can certainly see e.g. Delta and AA upgrading / optimizing / refreshing their existing 767 fleets and using them for the segments the 757 flies, e.g. transcon, Caribien etc. while replacing those 767s by larger twins.
E.g. introducing 3 class with 2-4-2 economy in the 767s back, smaller galleys etc. 8 Abreast Signature cabins and cockpit upgrades are “off the shelve for 767. Delta/NWA hates to retire usefull assets early.
That’s of course possible – but they would only nominally be replacing 757s there. In truth, they’d be upgauging to something much larger than a 757. And I don’t think new-built 767s are what are going to be used in large numbers for that particular niche.