747 production may end: Boeing

July 27, 2016: For the first time in a Securities and Exchange Commission filing, Boeing said production of the iconic 747 may end.

In a 10Q quarterly filing today, concurrent with the 2Q2017 earnings release, Boeing said:

 

747 Program

Lower-than-expected demand for large commercial passenger and freighter aircraft and slower-than-expected growth of global freight traffic have continued to drive market uncertainties, pricing pressures and fewer orders than anticipated. As a result, during the second quarter of 2016, we canceled previous plans to return to a production rate of 1.0 aircraft per month beginning in 2019, resulting in a reduction in the program accounting quantity from 1,574 to 1,555 aircraft. This reduction in the program accounting quantity, together with lower anticipated revenues from future sales and higher costs associated with producing fewer airplanes, resulted in a reach-forward loss of $1,188 in the quarter. The adjusted program accounting quantity includes 32 undelivered aircraft, currently scheduled to be produced through 2019. We previously recognized reach-forward losses of $885 and $70 during the second half of 2015 and the first quarter of 2016, respectively, related to the prior decision to reduce the production rate to 0.5 per month and lower estimated revenue from future sales due to ongoing pricing and market pressures. We are currently producing at a rate of 1.0 per month and expect to reduce the rate to 0.5 per month in September 2016. We continue to have a number of completed aircraft in inventory as well as unsold production positions and we remain focused on obtaining additional orders and implementing cost-reduction efforts. If we are unable to obtain sufficient orders and/or market, production and other risks cannot be mitigated, we could record additional losses that may be material, and it is reasonably possible that we could decide to end production of the 747. (Emphasis added.)

Boeing continues to warn of the prospect of a “material” forward loss in the 787 program. This is consistent with years for SEC filings.

787 Program
The 787 program continues to have near breakeven gross margins. The combination of production challenges, change incorporation on early build aircraft, schedule delays, customer and supplier impacts and changes to price escalation factors has created significant pressure on program profitability. If risks related to this program, including risks associated with productivity improvements, supply chain management, planned production rate increases or introducing and manufacturing the 787-10 derivative as scheduled cannot be mitigated, the program could record a reach-forward loss that may be material.

 

83 Comments on “747 production may end: Boeing

  1. For Whom the Bells Toll, 747 its for you. Sad but reality.

    And the A380 is going to sell how many?

    • Whatever. No “Bungee Backlash” possible from any Airbus type.

  2. So, you buy back shares and you have a loss.

    I sure wish I could do that kind of tax accounting. Shoot with all my money going to keeping alive not to mention deprecation on a house, 2 cars, a lawnmower, a snow blower, weed whacker , the BBQ, I could be in a loss forward posting forever.

    Ooops, I am, but I can’t write it off and still owe taxes. Obviously I choose the wrong career.

  3. The Hunchback of Seattle has gotten way too lenient treatment in the media, various blogs and bulletin boards compared to the A380 considering the latter is comparatively a resounding success. If the tables were reversed this topic would have 200 answers already.

    • Here are the facts:

      B747 program deliveries = 1,522 units since 1969 (47 years). Average of 32+ units / year

      A380 program deliveries = 193 units since 2007 (9 years). Average of 21 units / year

      By all accounts the B747 is a fully mature program and other than trying to recoup the investment in creating the 747-8 series, Boeing has made money hand over fist on this program.

      By all accounts given the massive investment overruns and lack of sales, the A380 program is a mess. The ONLY reason that aircraft is still produced is to keep Emirates happy. They by themselves account for close to 50% of all orders / deliveries of this program. Airbus recently was forced to reduce production 50% down to 1 per month. No way it recoups its investment EVER at that rate and if Emirates doesn’t keep buying then its all over. The jury is out whether Emirates will keep buying A380’s at the rate they have been buying once the so called “A380 killer” B777-9 enters service in 2020, an airplane Emirates ordered in large quantities.

      • I doubt Emirates is going to keep the A380 program afloat (so long A380!). Also, Emirates has nearly half (150/306) of the 777x orders, so I don’t see the 777x program looking too hot either.

        It seems like a bad time to build big planes.

        • Yeah, the B777-8/-9/-10X program doesn’t have a huge number of orders but as a derivative (lower investment than a new airplane) of a very successful program which has delivered 1412 airplanes over the past 20 years (70+ aircraft / year), already having 306 orders 4 years before the 1st delivery in my book means its already successful.

    • Once the CFO of Airbus mentioned that the program would be profitable even if the program would be ended after 2018.

      What he really said was violently turned into something a big public wanted to hear: Airbus is considering ending production. That was enthousiatically embraced by big media and the rest is history (stock -10%).

      I was amazed the press was never asked about that “journalism”.

      • Once the CFO of Airbus mentioned that the program would be profitable even if the program would be ended after 2018.

        I’m quite sure he didn’t say that.
        In fact, Airbus has continuously pointed out that they’re now profitable on a per-frame basis, and expect to remain so even at a reduced production rate going into 2018. However, they’re not going to be profitable at 12/year. (“I don’t say we will break even at 12,” [Brégier] said. On the other hand, he stressed that losses incurred at that production rate “will not be material for Airbus.”)
        They also far from profitable on a program basis – they don’t exactly advertise this, but they never pretended otherwise, either.

        • Huh?

          If by per frame basis we mean aircraft, then no, at best break even and not that.

          • If by per frame basis we mean aircraft, then no, at best break even and not that.

            Well, they broke even on 27 delivered in 2015 and expect to be profitable this year, as well as into 2018. At 12/year (the planned production rate for 2018) they don’t expect to be profitable, but don’t expect a material loss from A380 production, either.

          • I assume they can lift with 5 or 10 million a bird loss, another billion or two and we are talking real money!

        • The debts for the A380 are already paid by Airbus so a per-frame view is not unrealistic. With deferred production costs the picture would be different.

          Airbus is a company coffering aircraft from 320 to 380 and A380 is far bigger than the A350. This is a good reason to continue production at low level without mayor gains.

          For the 747-8 it is quite different. The 777-9X is the replacement product for the 747. It makes no sense to offer two nearly identical products with one fare more expensive than the other.

          • Interesting, what kind of ROI could they have gotten by investing 20 billion into even a lowly CD?

            Of course I am not a bussiness, but I always thought you wanted 8 to 15% profit on the money that you spend.

            What do I know.

    • If the tables were reversed this topic would have 200 answers already.
      True enough. Same on a.net, where the corresponding thread got 12 replies in 4 hours. Their weekly A380 thread, usually based on much less than a direct statement from Airbus about the plane’s future, gets to the same number of replies in minutes.
      The A380 seems to just rub some people the wrong way. All you can do is shrug and move on, really.
      On the topic of the 747 – it’s not really surprising, I guess. A bit sad, but the feeling that the 747-8 was maybe that one derivative too many (and too late!) had already crept in with a lot of people even before today.

      • The 747 is certainly a resounding success overall, the 747-8, not so much. A380, not at all (technical vs financial, it works fine)

        Also interesting the 747-8 did not stand alone (nor apparently the rest of the lineup) as its assessed over the entire 747 production.

        What an amazing way to juggle things.

        • 748 does not stand alone hits the nail in the head. The reason I am an A380 fan is it has done something rarely done before, sell a significant number of a cut down model. (off the top of my head A330-200 is the only other aircraft I can think of to achieve this.) The ideal would have been the A380-900, but after Wall street crashed the World there wasn’t the demand. I like to think someday the World will get back on track.

          • And the corollary to that its the only plane that never sold the regular model either. Good grief, talk about a one trick pony (to paraphrase so many)

            I agree, A380 is a hot button issue, at this point I find it of interest to see if it was as I thought and an ego project vs a valid segment.

            So far ego is winning

    • If you think the 747 has gotten “way too lenient” treatment in the media, well, you just must be really selective in what you read because it has been critiqued a plenty in the press.
      Of course calling it “The Hunchback of Seattle” is a rather fanboyish statement so that might be coloring your judgement.

  4. @Strato: The 747 and A380 are very different planes, so it’s not unreasonable to judge them differently.

    The 747 is an icon, a symbol of the Golden Age of aviation with all its associated romance and nostalgia. The average man on the street can’t tell a 737 from an A320, but show him that unmistakable hump and he knows it’s a 747. After almost 50 years and 1,500+ aircraft, the plane owes Boeing nothing – by any measure, the program has been a success. Sure, the 748 hasn’t sold well, but everyone knows it was a “me too” vanity exercise rather than a serious aircraft. Like a grand old diva on her farewell tour, we all smile and applaud her, speaking fondly to each other of how great she was in her prime. But deep down inside, we all know her time has come to an end. “News” of the cancellation is not really news, just details of the inevitable.

    The A380, on the other hand, is a relatively new plane, one Airbus told us would usher in a new era in aviation where mega-airlines fly mega-planes between mega-hubs. With the exception of Emirates at Dubai, that has not happened (yet). Rather than a grand old diva, the A380 is the flashy young one-hit wonder desperately trying to prove she’s got staying power. The fact that Airbus pivoted to the A350 suggests they realize the “point-to-point” model championed by Boeing with the 787/777X is more likely to dominate for the next decade or so. What Airbus is trying to do is keep the A380 around long enough for the mega-plane/mega-hub model to develop (it eventually will given finite amounts of airspace and airport capacity). The question is whether the A380 will still be around and competitive when it does.

    • The fact that Airbus pivoted to the A350 suggests they realize the “point-to-point” model championed by Boeing with the 787/777X is more likely to dominate for the next decade or so.
      Beg your pardon?
      Airbus have been in the less-than-VLA size category for ages, and always saw more demand in that category than they did for the VLA/A380 niche.
      So it’s not like in the A350 Airbus finally realised there’s a market there…

      Also, most flights with 787 and particularly 773ER today still start and/or end at a hub, so it’s not like they heralded a new era of point-to-point. Stating otherwise is just trying to rehash Boeing’s marketing from around the time of the A380 launch and trying to make it fit reality.

      Airlines simply didn’t quite go for the large category as much as Airbus had hoped. Partly because 9/11 happened almost right after the A3XX launch, partly because airlines generally are a bit more size-conservative these days (look at how long it took for the first 773ER to be delivered to a US airline), partly because for a lot of airlines, twins offer a bit more flexibility.
      The A380 is able to generate a lot of money for you (BA’s almost exact words), but you have to be a heavyweight yourself, i.e. be able to fill it (also, BA’s almost exact words).

      What Airbus is trying to do is keep the A380 around long enough for the mega-plane/mega-hub model to develop (it eventually will given finite amounts of airspace and airport capacity).
      That’s actually exactly what Airbus have said they’re trying to do. 🙂

      The question is whether the A380 will still be around and competitive when it does.
      Well, the main question is whether it’s going to be around – making it more competitive should then be doable. A slight stretch and new engines have been mentioned a few times already as obvious (if costly) enhancements.

      • Yep, about $20 billion in the hole on a program basis, they will never get out of that hole. Not that Boeing is any better, the B787 is likely destined to be a major loss maker on a program basis for a very long time. The much lower investment in developing the B747-8 has clearly not brought a return to Boeing -but- just having that option out there forces Airbus to discount the A380 far more than they would have liked further driving that program into the red.

        Way back in the mid 90’s Airbus decided that the B747 was too much of a cash cow for Boeing (the B747 had no direct competitor) and they were convinced (incorrectly) that profits generated by B747 sales subsidized losses in the B737 and B767 programs (aircraft which directly competed with the A320 / A300 / A310 / A330 programs) so they decided they had to put a stop to that. The A380 is the result and justified the launch by saying that everyone will have to use bigger planes due to congestion.

        Unfortunately the design precludes a viable freighter as an option and it even precludes airlines from generating freight revenue at all. Interestingly the B777-300ER has 7,600 cu. ft. lower hold capacity while the A380-800 only has 6,500 cu. ft. The A380 can barely carry the passenger baggage much less any revenue cargo while the B777-300ER can carry an awful lot of revenue freight above and beyond the passenger baggage. The A380 has a very limited mission capability and as such it will garner very limited sales forever however, it has done one thing, it has allowed Emirates to quickly shift the traditional European capitals center of connectivity over to Dubai.

        Lastly, when the Boeing B777-9 and -10X come along it will be all over for the A380 anyways (as it will be for the B747 as well). There has never been a 3 or 4 engine program that has been able to compete with a similarly capable twin….just look at what happened to the B727 when the B737 and A320 came along…or the DC-10/MD-11/A340 when the B777 came along. You just can’t beat a well designed twin…..

        • So the A380 uses the aircraft space far more efficient than the 777 with huge wastes space and just the space below the pax could be used properly.

          • Seems you might have misunderstood the point I was trying to make regarding the lower hold capacity of the A380-800 vs. B777-300ER.

            A380-800 lower hold capacity for bags / freight = 6500 cubic feet. B777-300ER lower hold capacity for bags / freight is 7600 cubic feet. Using Emirates layouts for both aircraft (354 passengers in the 777-300ER and 517 passengers on the A380-800) and assuming each passenger checks 2 bags measuring 29 in. x 19 in. x 12 in. (typical luggage size), the A380 will only have 2,545 cubic feet remaining for REVENUE generating cargo to be loaded after a full load of passengers and their bags are aboard. Conversely, once it is fully loaded with passengers and their baggage the B777-300ER will have 4,892 cubic feet (92% more volume than the A380) remaining for revenue cargo. For many airlines who are well managed, the difference between losing money and making money on many routes is the ability to carry REVENUE cargo on passenger aircraft. My point quite simply is that because of its design (2 passengers decks stacked on 1 lower hold area) makes it far less capable of generating a profit on a trip basis.

          • Useable belly freight is constrained by volume _and_ weight.

            My understanding is that at the routes we are talking about the 777 has the volume but not the excess payload while the A380 does not have the volume while being able to move a bit more mass … .

          • True dat Uwe. Hypothetical situation with the previously mentioned Emirates layouts both operating a 6,000 nautical mile mission. Assume each airplane is 100% full and each passengers checks 2 bags (previous example). Per payload range curves I could find, maximum payload on a B777-300ER is 140,000 pounds. Maximum payload for an A380-800 is 170,000 pounds. Average passenger weight is 170 pounds (including carry-on luggage). Using average of 10 pounds / cubic foot density, each bag weighs 38.2 pounds.

            Before any revenue freight is added, total payload of passengers plus baggage is 127,389 pounds for the A380 and 87,226 pounds for the 777-300ER. On a weight basis this leaves 42,611 pounds on the A380 and 52,774 pounds on the 777-300ER which can be allocated to revenue cargo. However, if we use the same average 10 pounds / cubic foot density for freight then the 777-300ER will use ALL of its remaining 4,892 cubic feet of revenue freight volume available and not hit a weight limited maximum payload. Meanwhile the A380 still only has 2,545 cubic feet remaining which translates to only 25,450 pounds of revenue cargo.

            The 777-300ER will carry a full 52,744 pounds of revenue cargo above the passengers and baggage while the A380 can only carry 25,450 pounds of revenue cargo (being severely limited by volume). In order for the A380 to efficiently use its remaining volume and weight capability, average freight density would have to be 16.74 pounds / cubic foot which largely unrealistic. Even then, the B777-300ER still carries more weight -and- has more volume remaining than an A380, two elements required to maximize trip revenue.

          • semjeito : Did you plagiarizes that from me? I wrote the same thing many times. If not well done!

      • This entire comment has been deleted as irrelevant to the topic at hand and a violation of Reader Comment rules against personal insults.

  5. In its one hundred year history there is nothing more recognizable as a Boeing product than the 747. As far as I am concerned it is Boeing’s greatest accomplishment. If the 707 was an audacious and innovative product, the 747 was by comparison a reckless endeavour beyond belief. And a completely successful one at that. This iconic aircraft represented Boeing’s magnificence at a time when it was at its best.

    “The 787 program continues to have near breakeven gross margins.”

    Let me rephrase this without changing the meaning of the sentence: The 787 continues to be a money-loosing program. Didn’t McNerney say at the beginning of 2015 that the 787 would be cash flow positive before the end of the year? Some of us commented at the time that this appeared to be a little optimistic. We now know that it was completely unrealistic. Like many other things with Boeing nowadays.

  6. I searched the actual 10-Q from the Boeing website and could not find that last sentence in the paragraph you quote. Please advise the page.

    • The 2Q2016 isn’t on the Boeing website yet (10pm PDT July 27). Go to SEC.gov, to Company Filings, to find it.

  7. If I were a conspiracy theorist I’d belive that the 747-8 was intended either as a spoiler to the A380 business case or born out of the belief that Airbus would fail to make the A380 fly. Other than that, the business case of the 747-8 was marginal at best from the outset. The technical concept was poor in assuming that one could get away with minimum changes to the airframe anf fuselage tooling while adding a completely new wing. Later Boeing admitted that adding a new wing to an old airplane will create an 80% new design. That didn’t make the business case any better.

      • Easier to ask how much will they keep! Fuselage and some el systems sounds like it.

    • I thought it had more of a future as it was a mid split between 777 and A380

      Cramming more seats into the 777 pretty well stuffed that.

      When I saw the F mix vs the pax it was, this is not good.

      • “I thought it had more of a future as it was a mid split between 777 and A380”

        It is the existing sample of the 2/4 aisle MOM that appears to be not working as advertised .

        Now think about what chances the 1/2 aisle MOM proposed by Boeing has. 🙂

        • Well a 747 was designed 50 years ago?

          Things change. Boeing has airline review groups.

          I suspect they know more about what they want and what works business wise.

          We may not like it, so then we vote with our tickets.

  8. Sad to see the end of an era, it seals the gradual loss of all those distinctive aircraft, b747/l1011/dc10 amongst others.

    There is a continual urge of some of us to position their OEM of choice by denigrating what has happened at the competitor. I like to look at it the other way. All that investment has been spent and good or bad it has gone. That leaves the OEMs with models to sell or develop into the future. On that basis Airbus has A320/330/350/380 to sell or further iterate into new offerings, Boeing has B737/787/777 as platforms and B767 as a freighter/tanker.

    There is little point in remembering the past but instead the battle is about the current competitiveness and the future potential of these platforms. It doesn’t appear likely that anything substantially new or separate from these will be with us in the next 10 years. So based on that who would you rather be? Would you prefer the Airbus position or the Boeing position going forward. I myself see positives and negatives in either stance. Votes please with your reasoning

    • You need to remember the past so you have a guide for your future.

      Not the same thing as living in the past

    • I feel your loss.
      At some point the Junkers F13 ( and its upgrades ) was no longer viable and manufacture was discontinued.
      For a while the Junkers fleet had dominated commercial flying.

  9. “Sad to see the end of an era,”
    Everything has an end. Only sausages have two 🙂

    To this end current competitiveness can be a foundation for reaching future competitiveness. But you do need quality building stones towards a future to place on that foundation.
    It seems to be a good idea to create these building bricks when the current product is at its profit creating best.

    • A hosepipe also has two…

      As does a car. Even a plane has two ends.

  10. From the outset the 747-8 seemed well positioned inbetween the 777 and A380. The only real 400-450 seater with good cargo capability, existing worldwide infrastructure and a dedicated freighter version. Boeing prognosed one third would be freighters.

    The modification (wing) proved much more expensive than expected and all major airlines ordered 773ERs and A380s. Only LH and few political sales were realized.

    Do I believe thete’s a market for a longhaul 400-450 seater? Yes, obviously the 748 is’t the right platform. Soon the 747 will have it’s 50th universary. Some of the 747-8 is very new (engines). More of it has hardly been modified & is sixties technology.

    • “Do I believe thete’s a market for a longhaul 400-450 seater?”

      The 748 fell into the “lack of efficiency” gulf between classes. ( here twin aisle and double decker VLA. )
      And like the 767 was engulfed by the one between single and twin aisle frames.

      Technology improvements let these move up and out.
      IMHO a reason that made sizing the A380 difficult.
      It was sized at the lowest efficient double deck capacity and designed for significant growth “to go with the flood”.
      Only the flood raised slower than projected/expected.

      • I recall that at the time it was launched the A380 was promoted much more on floorspace than how many seats could be crammed in. This is where I see the problem, had the market gone for the value added approach and Airbus had gone for the 900 it would have been a roaring success. Emirates saw this vision and it has been fairly successful but even they are now densifying. Also they have paid considerably less for the planes than they cost to make.

        • hmmm, they can’t find routes to fill the 800, what does the 900 get you except even more routes you can’t fill?

          • I think you are missing the point. I think it would work if you could get enough premium passengers.It seems that there aren’t enough rich people and they like frequency.

          • If you can afford first you have a private jet. RIP premium.

          • So why do they appear to be swapping in A380 on previously 777 serviced routes?
            ( Just because the like making losses? Not. 🙂

          • Because tourist class pax are willing to pay more for the A380, and they are getting a hard time in the travel press for the 10 wide 777 product. EK uses A380 on all their routes to developed countries as soon as the traffic will allow. I suspect that they might still be using 34 inch pitch on 777s used to Australia as well, they did that when they went to 10 wide on some aircraft.

            That is also why Clark rejected 11 wide on the A380, he was worried about killing the golden goose.

          • Grubbie:

            I think I did get the point.

            If I was rich I would not be poor either! I am not, and it did not. So there we are, 900 is a bigger harder beast to justify with even fewer routes.

            Ergo, wishful thinking or might haves don’t pay the bills.

          • Emirates Airlines have just announced (31st July 2016) the largest ever profit. Emirates carried a record 51.9 million passengers (8 per cent more

            than the previous year prior) and returned the record profit despite the load factor falling 3.1% to 76.5%.

            Given Emirates presently has operates 77 A380s in its fleet a goodly proportion of the profit must be attributed to their very sucessful opertaion of the

            A380 fleet.

            Included in press release were some interesting comments made by Sir Tim Clark. Emirates, President and CEO, which are copied below:-

            1) Emirates could add more current model A380s to its existing order of 142 even if Airbus decides not to go ahead with a new engine model of the super jumbo known as a “neo,” Clark said.

            2) “As the first batch comes up for retirement we will want to replace them with more A380s,” he said. “Whether that’s enough to persuade Airbus to keep the line going is up to them really. They have got to sell more.”

            3) Emirates, the biggest A380 operator with 77 in its fleet and a further 65 on order, has been pushing Airbus to commit to building the A380neo. Clark said Emirates could need as many as 200 A380s, current model or neo, once it moves over to Dubai’s newest airport Al Maktoum International at Dubai World Central in the mid-2020s.

            It also worthwhile recalling his earlier comment:

            Emirates President and CEO Tim Clark has admitted that the splurge on A380s was a gamble, writing in the airline’s publication OpenSky: “We were bold ordering this double-decker when we did, and in the numbers that we did, but my goodness, it has proved to be a gamble worth taking. Our customers love it, and it is one of the most efficient aircraft to operate today in terms of fuel burn per passenger.”

            I find it refreshing listing to someone who is prepared to put his money his on on what the passengers have rightly regard as the best ride in the sky by far (and yes I have flown the A380 in both business and economy) and demonstrated good returns in doing so!!!!!.

  11. 787 reach forward loss may be material ….
    Hummmm…. Material is a slippery word, but probably north of $ 15 billion would qualify?

  12. What was the 747-8 development cost? Maybe 3.75 billion over 125 units, needed to make 30 million per unit over production cost to pay for development.

    A380, 20B / 300 , 66 million per unit towards development.

    777x, 10B / 300, 33 million per unit towards development.

    -8 and A380, and first 300 units of 777x have probably paid very little towards development. 777x and A380 can make more of a contribution in the next tranche if they continue on to 600 units.

    • “What was the 747-8 development cost? Maybe 3.75 billion … ”
      My guess would be that the -8 redesign is hugging $10b or even “overwhelming” that demarcation.
      ( ~3.5b is what Airbus spent on the A340NG 10 years earlier in an upgrade scoped coverage much fewer changes.
      All that feature creep and issue fixing on the 748 must have added quite a bit on the cost side.)

      • That would be shockingly expensive if true. I wonder what the actual development costs were for the:
        A380 all new aircraft
        A350 all new aircraft
        787 all new aircraft
        CS100 all new aircraft
        747-8 stretch and re-engine
        A320 re-engine
        737 MAX re-engine
        ???

    • Extra capability was also rewarded in tanker rounds 1 & 2 before congress intervened.

      T-X from the looks of it, the Aermacchi-Yakovlev design seems hard to beat IMO.

      • Keejse:

        You are re-writing history. It was illegally given a go when it was credited with that extra capacity when the RFP …… DID NOT ALLOW IT! Plane and simple.

        As that was the only advantage, round 2 went to 767.

        You can argue the merits of the RFP, but the USAF wrote the RFP as they wanted a low cost solution to a relatively low tech asset.

        They are willing to pay more for the TX per the RFP so Airbus should enter the A330MRT. It certainly would trash everyone on capacity and range.

        ACM, not so much

        • Round 1 : 2002 : Boeing won, fraud, Druyn, CFO, CEOm -$600 mln fine
          Round 2 : 2008 : EADS/NG won, everybody happy until EADS/NG won.
          Round 3 : Boeing won, after Congress took over and issued lowest price for minimum (~KC767) fixed spec startegy. On 25 September 2009 the USAF issued the entirely new RFP for a fixed-price contract specified 373 requirements

          In 2010, Northrop Grumman saw the writing on the wall and decided to not submit a bid for the KC-X tanker stating that they believe the new evaluation methodology favors Boeing’s smaller tanker.

          Before that only Boeing was complaining the KC30 was too large/capable. Not the USAF, they added points according to the agreed upon procedure.

          Few outside the US can’t see the contract had to go Boeing & the rules were changed to realize that goal. The US looking for a domestic product didn’t surprise anyone. Most people can see the political / strategic logic.

          The way the 3rd round was fabricated and the dog & pony show to make it look honest, and the rewriting history after it was amusing. 😀

          Sad for the DoD, USAF and Boeing employees who lost their jobs as scapegoats in the process.

          • Keesje:

            You continue to re-write things and obviously do not understand the US procurement system.

            Round 1 as you call it was a lease proposal. It was rife with issues (corruption) . It was never approved. As there was no competition and it was pointed at Boeing get it off your plate.

            Round 2: Congress had noting to do with it. The USAF gave credit to more fuel, large cargo and waived the ramp spacing requirement when it was a VIOLATION of the RFP to do so.
            That is the key part you do not get, it is illegal to give a credit on an RFP if said credit is no IN the RFP and it was not. Period. .
            Boeing protested to the Government Accounting Office (NOT CONGRESS) who upheld them on that basis and correctly.
            The GAO is not congress, plain and simple.

            Round 3 went to Boeing as they underbid Airbus.

            Speeding is against the law. If you want to speed, don’t complain about getting caught. Change the law.

            TX: USAF wants more and is willing for us to pay for it. That may get pushy back as congress DOES vote on the funds. Will see.

          • After Round 2 when the Government voided the Airbus win, everyone knew that the Tanker contest was a sham and that it was going to be rigged so Boeing could win. However, what I thought was priceless was Airbus’ threat to pull out of the competition just prior to Boeing getting awarded the contract (seems like Airbus was worried that they under-bidded the contract…and they did!). Then, just like “Magic” Boeing’s proposal is “accidently” e-mailed to Airbus and Airbus stays in the contest – knowing that they driven Boeing to waaaaay underbid their Tanker Contract. So, Boeing is such with a fixed-price contract they can’t perform.

            Money well spent by Airbus by participating in a rigged bid in order to ruin Boeing’s profit.

          • “Period. .”

            😀 😀

            I guess some developments will just be denied forever, too frinkin unglorious / embarrasing

      • Trouble was the Air Force didn’t tell Boeing that points were being rewarded for excess capability which is what they were legally required to do.

        • No, points for excess were not written into the RFP.

          That is the crux of it, the USAF gave points where they were not allowed to.

          You can’t legally give something that is not there.

      • I think the idea could be to encourage bidders to follow Leonardo’s dual trainer/attack aircraft idea, without going all the way to saying it, allowing USAF to follow that line in the future, but without being financially committed too much just yet. Or maybe it is a permanent new way of doing business, which could kill the KC-46A in future rounds. The other obvious thing is the USAF were impressed enough with the A330 as a tanker base to bend the rules to get them, so maybe they are ¨legalising¨ what they tried to do with the first KC-X decision for future use.

        • Its not legalizing . Its up front.

          Is it justified? That I do now know, I need more information.

          USAF does a lot of bait and switch, first it was the TX would replace the A10 in an attack version (really, high speed Mach 2 trainer that will get down in the weeds? BS)

          Now they want more from the TX and are trying to buy two different CAS (not telling the USAF Secretary of Course). Same with giving credit on the KCX, they were not allowed but did.

          As an organization they have no integrity.

    • Martin A:

      Really? Boeing is developing an all NEW aircraft with Saab.

      That plays right into their hands as all the other offerings are based off current airframes that would be impossible to modify without other penalties.

      • See above. I was thinking of KC-46A. For the trainer thing I agree, Boeing probably have time to incorporate changes. I am sure they would like to bid for the cheap attack option at little cost as well if that comes to pass. Variously denied or agreed to depending who the press are quoting on the day.

        • The cheap attack option is off the table.

          USAF is playing games and I think they are about to get slammed.

          The did not even tell the USAF secretary what they were up to, and are now proposing two more.

          I practice what I preach and have written a member of the Military committee on that subject.

      • Looks like it is the reverse. Saab does a new frame and Boeing “homesteading IP is us” does the home turf insertion?
        ( compare EADS/Northrop Grumman KC-45 )

        • Yep, but Boeing is the US selling point. Sort of like Holden and Chevrolet selling Suzuki, it gave them a good reputation in the small car bis., in some countries they haven’t been so respected since.

          Hence I called it a Boeing for short, sorry.

          • Hehe, what used to be Daewoo. in Germany is now sold as Chevrolet.
            Invariably the best time for these products is just before the change to US management.
            ( also see Saab cars or Opel which thrives or withers on the vine in inverse relation to GM core management intervention. Elements of a scavenger culture. )

          • Well you can’t blame Boeing.

            They obviously have realized they can’t design a decent fighter or trainer so they outsourced it to SAAB who CAN!

            Actually I think it will be a good deal for the US.

            The advanced trainer is needed and SAAB certainly makes darned good fighters as a reasonable cost (more so considering the limited base). They truly are amazing.

            I have no issue with buying a foreign design.

            I do have an issue when those same foreign countries do not buy an obliviously superior and lower cost US product.

            I did not see the Fueling consortium in Europe open up their tanker competition to the US.

            France should have bought the F-18 and spent billion on top of billions modify the Rafael to a carrier aircraft when it was not and will never be suited to it

          • Daewoo where already bankrupt or near bankrupt. I could never understand GMs thinking in keeping a line of cars that where already failures due to lack of updating and rising costs in Korea. If they had updated them to something new they would have made a killing when oil was up, as it was they sold well for a little while until folks realised Ford Fiesta, Mazda 2 etc where better, lower fuel consumption and nearly the same price. GM bankrupt.

            I think Boeing aren’t going that way quite yet, SAAB is at least as good at what they do as Boeing is, and as they don’t compete anywhere it seems a pretty good match up to both sides for me.

  13. You guys STILL bitter over the already discussed and debunked KC-X program? Jeez, give it up already.

    It’s like that scene in Ronin with Robert DeNiro (Sam) and Sean Bean (Spence)

    Spence: What do you use… weapons-wise?
    Sam: Hm?
    Spence: Weapons. I’m a, I’m a weapons man.
    Sam: Weapons man.
    Spence: Yeah (chuckles).
    Sam: OK.
    Spence: They tend to settle the argument. So what you favor?
    Sam: Oh, you know, it’s a tool box. I don’t care. You put the tools in for the job. That’s all.
    Spence: What?
    Sam: You know, actually I favor the old 1911.
    Spence: Forty-five. Old gun.
    Sam: It’s served my country well… a long time.
    Spence: (chuckles) Your country. Not done too well though, have ya? Last two wars?
    Sam: Perhaps not, but at least we don’t go around whining about it.

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