Pontifications: Boeing-Bombardier dispute’s big winner: Airbus

By Scott Hamilton

June 12, 2017, (c) Leeham Co.: Boeing won round one Friday in its price-dumping complaint against Bombardier over its sale of the CSeries to Delta Air Lines.

The US International Trade Commission (ITC) voted 5-0 to continue the investigation. It now goes to the US Department of Commerce to determine whether tariffs should be imposed on the deal, and how much. Delta Air Lines would have to pay the tariffs.

Boeing won this round but the big winner is likely to be Airbus.

 

Delta pays, Airbus wins

Airbus isn’t even a party to the case. But the timing couldn’t work more in its favor than if it had planned it.

Delta is understood ready to launch a competition in August or September for its first re-engined Airbus NEO or Boeing MAX families. It has 123 A319s and A320s inherited from the acquisition of Northwest Airlines that are aging and need to be replaced.

There are 74 737-800s dating to 1998, so these will be approaching replacement age soon.

According to market intelligence, Delta will seek proposals for 75 firm orders and 75 options for the NEO or MAX.

Boeing’s April 27 complaint over the Delta deal immediately prompted speculation that Boeing would place it at a disadvantage when the bake-off of the NEO and MAX begins.

Now, a decision on the tariffs is believed to be expected in October, smack in the middle of this bake-off.

 

What’s really going on?

Why would Boeing risk losing, if not essentially forfeiting this big order from Delta?

A couple of media reported that for Boeing, this is about Airbus and “never again.” By that, Boeing means it won’t ignore a potential subsidized competitor to the point when it threatens Boeing’s commercial existences.

I have a hard time with this line of thinking because Boeing ignores the far greater threat of China and Russia, but I’ve already written about this. However, Bombardier is the proverbial 98 lb weakling, so Boeing is going after BBD because it can without repercussion—or can it?

Canada already threatened to kill a deal for 18 F-18 fighters. But why would Boeing risk a potential deal for 737 MAXes, including asking Delta to be a launch customer for the MAX 10, in the anticipated bake-off between Airbus and Delta for NEOs or MAXes beginning this fall?

Small change

The answer to this question came from one of the people I encountered during my recent 10-day trip that included the annual meeting of the International Air Transport Assn. This person has a vested interest in the outcome (I won’t say why), but is not connected to Boeing or Bombardier in this matter.

His theory is simple: Boeing wants to kill the CSeries, period, and this is the best way to do it.

If Boeing prevails and thereby effectively closes the US market to CSeries, which has the largest potential globally, the business case overall suffers, maybe to the point of tanking the program.

If BBD loses and Delta has to pay the tariff, the theorist continues, Delta might cancel the order—and this could kill the CSeries program.

It’s an interesting theory, but there are obvious holes in it.

Finally, one more theory advanced is that Boeing is using Bombardier to send a message to Russia and China.

Interesting, but I doubt either will be intimidated by what the US does in this case.

Thus, the risk of losing the F-18 or Delta orders is seen by Boeing as pocket change in the long-term, global scheme of things, the theory goes.

What’s the bet?

What’s the outcome likely to be?

Even though we skeptical journalists that I met during my 10-day trip didn’t think Boeing had a case with the arguments advanced, we all agreed Bombardier is a subsidized company, irrespective of whether the bail-out money is in the form or equity, debt or a gift or any other form. Without it, BBD was headed for bankruptcy. It was just that Boeing’s specific arguments don’t hold water, we believed

That said, the general view was that Trump’s Administration would side with Boeing, which has done a very masterful job of foreplay with the narcissistic egomaniac. And sure enough, it did.

With that, the bet is that Airbus will be the winner in the Delta competition this fall.

138 Comments on “Pontifications: Boeing-Bombardier dispute’s big winner: Airbus

  1. Too many sour-grapes in our World today. Not pointing a finger, just have had
    enough! Recently purchased another classic car [Clinton, IA]. Untied or Delta $338 one-way fare, plus TSA b.s., NOT WORTH THE HASSLE. Trucked it, no ware&tear on car or me….$1,500 Priceless!!

  2. If Boeing wins the case Embraer (“Boeing”) will have a monopoly in the 80-120 seat US market?

    • Comac would surely be the big winner from this. Its a shame. The CS1/300 are better than anything in this class.

      • Not going to get FAA certification. They pulled out of the process a while back. Plus its an A320 style plane, too heavy to compete with Cseries

        • FAA only applies in the states does it not. Also, you may have noticed the big dispute between Boeing and Bombardier over dumping. The CS300 is an alternative to the 737 Max 8 in many aspects.

  3. See Delta have 88 B717-200’s on lease, when are these due for replacement?

  4. My take is that senior Boeing management gain in this dispute by being seen to act. They can be aggressive and it will have some impact to report back at the AGM. Further it aligns the management with Trumpspeak and buys them time over which juicy options will be ‘earned’.

    Will it have any benefit to the stockholders in the longer term? I think not. The Cseries is too far down the line to be stopped, it ignores the wider market forces and it is the act of a bully and will be perceived as such by the industry.

    To beat the competition Boeing needs to compete, this is in the first instance dictated by the quality of the product. All these actions are an indicator to the industry of the vulnerability of Boeing and reinforces the view that they have evolved the wrong single aisle strategy.

    The management are patting themselves on the back for ‘acting decisively’, what they seem to forget is that decisiveness is not enough, the course of action taken is also important.

    • It might turn out that Canadair launches the CS500 as a response with tons of Chinese cash and that they produce in China “Everything Witchia makes for the Boeing “. That will force Boeings hand to design a new narrowbody replacement to the 737 or a shorter range cheaper version of the 797 to replace the 737 series and cost them $10bn extra besides the 240pax 4500nm 797 for $25bn. Wonder if Boeing shareholders approve of less divident the next 15 years due to this?

      • Air Canada has ~70 outstanding Boeing orders, mostly MAX 8&9’s replacing A320/321’s. Don’t think they are to happy about that know?

        One thing is sure, I cant see Air Canada as a launch customer for the MAX10.

        • CAll it the Spurance vs Halsey approach.

          Spruance kept his carriers close to Saipan and covered the invasion fleet.

          Halsey in Leyte Gulf went after a zero threat (pun fully intended) empty fleet of carriers and got sucked away from the mission, protecting the invasion fleet.

          Boeing has not a clue what the real mission is.

        • They also have outstanding orders for 787’s. Ironically the most subsidized airplane ever built.

          • West Jet of Canada operates an all Boeing fleet with 62 outstanding orders. However still small change in the Boeing bigger picture of getting several hundred orders for airlines needing something in the MAX7 size and paving the way for for Embraers E2’s in the 80-120 seat class.

  5. I agree, Airbus will win. I don’t think Bombardier will loose. Boeing will loose.

    Boeing should concentrate on its own issues. It needs to design better and cheaper and it needs to build better and cheaper.

    Boeing trying to say others are subsidised and they are not doesn’t cut the mustard. The tax breaks given by Wahington state for the 777X should be enough to cover the entire development cost of the 777X. The tax breaks won’t cover the cost, but the reason lies inside Boeing with nobody else to blame. But, regardless, Boeing will blame others!

  6. This is the end then of the commercial division and maybe even the business jet division of Bombardier. Then this will surely mean the beginning of a trade war Canada-US. Boeing is “drowning” a child in order to maintain its existence… Bombardier then should leave bringing jobs back and let Embraer enjoy its new position.

    • It may be the end of business dealings with the US for Bombardier’s commercial aircraft division. However, it might mark a new beginning for a whole lot of new Bombardier business dealings with the rest of the world. Loser: Boeing.

      • It reminds me a little of McDonnell Douglas’s exit from the airliner business. They put little money into the commercial side, and waited on the defense industry. There was not much innovation on the MD-90/95; and the MD11 should have been made with two engines. They thought about two engine wide-bodies for decades. McNerney and his minions stated many times, they want to grow old platforms, not make new planes. It’s better for the major stockholders. Why should Boeing make a new NSA if they can hamstring Bombardier? Boeing stock is up mostly because of defense.

        • Douglas big mistake was that they joined with Mcdonnell in the late 70s. If instead they went with their across town builder Lockheed, we could have had only 1 tri jet in production -the better one the Tristar, which made more sense for the market and they could have later built a direct A320 competitor, plus a large twin based on Tristar ?
          US would have stayed with 2 airframe builders and they would still have the “LD95” in the 100 seat market.

  7. What if this is a message to Airbus to NOT discount sales and charge a high(er) price for sales in the US? It would leave Airbus and Boeing as a winner, cos it means higher margins for both.

    Although I’d be more than surprised, if Boeing will win that Delta deal.

    • Think Boeing is sending warning signals to Airbus (maybe Comac/Irkut as well) not to undercut the MAX10 price with the A321NEO (or “A322”)?

      A competitively priced “A330-200 Lite” (combined with an A322) could make life also difficult for Boeing’s MoM plans?

      • I would be extremely surprised if the A321neo comes anywhere near the MAX 10 in price. The A321neo has a monopoly in its own capability niche and as such will be commanding much higher profits than the MAX 9/10. Note the current product mix of A321/A320 and you will see the high numbers of A321 which must be pushing current production limits at Hamburg. If I were Airbus I would be making that fact generate me big margins.

        • Hi Sowerbob, that’s interesting but I also think the MAX10 won’t come cheap and Airbus should maintain is dominance in the A321 market.

          Will a theoretical A322 also be build at the same facility?

          • Interesting point, Airbus could build it in any of the 4 facilities but I guess we would count out Mobile and Tianjin so it comes down to Hamburg or Toulouse. I am not aware of the manner of the capacity constraints in Hamburg, whether they are line based or due to lack of space. It presumably would make sense to build in Hamburg if space permits, leaving Toulouse more and more to be the widebody facility.

          • Was wondering about Mobile as an A321 dedicated facility that could take pressure of Hamburg to facilitate the A322?

            Wonder what price laws will there be on the A321 in such instance?

          • I think Alabama is making all A321 now.

            Not NEO to start withy but A321?

            Something I said for a long time, not only does Airbus get a good return on the A321 (I assume not gouging) but Boeing has to pay more to make the MAX as it took a lot more changes to keep competitive.

  8. A question for the technical guys. What are the main pros and cons of the PW1100G (81″, 2860Kg’s) vs the PW1500G (73″, 2180Kg’s). Price, fuel consumption, reliability, etc.?

    Was just wondering what the the theoretical performance of of an A319 will be when fitted with PW1524G vs PW1124’s? There will be a weight saving of ~1.35T and engines will have 8″ better ground clearance and most likely have less drag for the same (static?) thrust as far as I can make out.

  9. As you write: ‘Finally, one more theory advanced is that Boeing is using Bombardier to send a message to Russia and China.’
    Should this be the message I suspect that Boeing play carefully. Rather than bankruptcy or the shutting down of the CSeries program altogether there may be as rumoured a Chinese investment into the company.
    This would potentially be a big boost to both the CSeries and to the Chinese aerospace program through the transfer of technology and engineering expertise

  10. Delta has stated an intent to favor airbus over Boeing anyway if the former is within a few percentage points. I don’t see Boeing as particularly concerned with the current commercial market split with Airbus, but has taken the bombardier threat seriously.

    Embraer just doesn’t have the capacity to threaten or disrupt the NSA. For all of the lamentations that Boeing isn’t taking the Chinese and Russians seriously, it is interesting to question what western sales they’ve lost to them, or foresee at this time competing with them on even. Mitsubishi, similar to the brazilians, has a limited product range with the MRJ.

    Boeing’s legal team, and tactics, seem to have picked a fight with an opponent that matters in a venue they can win, without risking any real business opportunities, it seems to me. Delta can gripe all they want but they’re the ones who have basically become a single supplier airline from Boeing’s perspective, so whatever. B and A both want higher margins for their main duopoly products.

    I also am not sure if it’s a foregone conclusion any tariff would be passed on to delta, or paid by bbd or other mechanisms. But I could be wrong on that.

    • I think we have to disagree on that.

      18 x F-18 sales is not peanuts. Possibly more as the F-35 gestates to something workable.

      There are other sales to Canada.

      They are a neighbor, it seems to me that smaller aircraft feeding the bigger 737 routes is a win for Boeing.

      This has got to be one of the all time stupid decisions of all time. Edsel comes to mind.

  11. Delta and Boeing has a fall out under Mr Anderson and they have never order any Boeing aircraft since. The 10 737-9 that was order was contractually force on them by Boeing. Just ask the people in the know.

    • I believe Delta took those on their own as those were options and not remotely mandatory. It may have been a work out to getting the 787 deposits solved. Still they ordered the 900 in the4 first place.

      I don’t disagree they are not fond of Boeing but I think they are also smart in not shooting themselves in the foot.

      Why the 737-900 works for them I don’t know, but it seems to fill a slot they need or want filled.

  12. This whole thing is weird. I wonder what’s really going on in the heads of the Boeing board. Do they really think they can kill the C-Series? Muscle away Comac, Irkut or Arbus? I think not. Maybe it’s really only to make themselves indispensable to their stockholders after all the strategic blunders they have made over the past decade and with more such srew-ups just around the corner?
    It’s the way Putin saved his presidency – when he was falling out of favor in Russia he started the conflict with Ukraine. An enemy so small that you can’t loose, even if you can afford to go to real war, but big enough trouble that the nation connects with their leadership.
    That this conflict damaged the Russian democracy further and especially the economy apparently didn’t case too much of a problem for a good while. Only recently the opposition is comming back.
    But Boeing is not a state so I’m not sure if this strategy will work at all or for how long. The 787 problems still cooking in the books, the half raw 777X and the really difficult 797 and 737-10 projects hanging in mid-air, – it all doesn’t look so pretty.
    Yes, I think it’s basically a deviation to the fundamental blunders the board has made over the past years and is still meaning to commit, simply because they don’t get it right.
    And in the end, with very little doubt, Airbus will be the big winner.

    • Agree, Boeing has a backlog/(unfilled) orders of ~8200 (NG+MAX). Not sure if the few CS100’s (which they have no equivalent for) will put them out of business and drive America into recession.

      • My apologies, double accounting, backlog ~4500. Still many years of production.

        • Agreed on weird.

          Just leaves a possible opening for the MC-21 amongst other aspects.

        • Can you offer a better explanation for this apparently awkward action?
          If everything was so rosy the board members might rather spend their day playing golf instead of waisting it in meetings with a bunch of expensive lawyers.

          • Tells me that Boeing will not launch an NSA soon and keep the 737 in production well beyond 2025?

            The CS300 eats away at the bottom and the A321 at the top.

            To be honest if it was not for the -800NG/MAX8 the B737 prospects do not look great.

            If the CS100/300/(500) stay alive, Airbus do an A320Plus and A322 while the C919 and MC21 also come into play, no MoM. Boeing will be forced to do an NSA.

            Except if Boeing focus on the 200+ seat market and JV with Irkut on the <200 seat market?

  13. ”Thus, the risk of losing the F-18 or Delta orders is seen by Boeing as pocket change in the long-term, global scheme of things, the theory goes.”

    But on the long run it won’t be 18 jets to replace, but the whole fleet of 88 jets, and that’s not small change. It will hurt Boeing deeply.

    • Long term I think Canada goes with a more modern Jet.

      Short term take up is better than long term as you never know.

    • After all is said and done Canada will simply go back to the F-35.

  14. Everybody in the whole world knows that U.S. Companies line Boeing got their innovation cash from fat military contracts. I call that hidden illegal subsidy. Well actually they didn’t even hide all their own illegal subsidies according to the WTO.
    It really is a bit rich to see this kind of action from Boeing and it puts USA business leaders in a bad light.
    The optics for Boeing and the USA in general are this: only Americans are entitled to succeed in business.
    At the end of the day Boeing is forcing the American public to ride on outdated aircraft.

  15. Great play Boeing execs.

    You want to destroy Bombardier’s ability to produce the CSeries, which will allow Airbus to buy the CSeries and then develop the CS500, spend some money on a new wing update to the A320.5/A321/A322, and keep selling the A320neo for as long as there are airlines flying.

    • There are several airlines in Delta’s position requiring the replacement of >15 year old A320-100’s. But I also noted that some of these are replacing it with MAX8’s and not with 320/321NEO’s.

      Think the reason is the A320 is now to small and A321 to much airplane for them, the MAX8 is the right size and also has the seat mile cost advantage over the A320.

      So Airbus, an A320Plus please! Airlines won’t replace 737-800NG’s in coming years with the A320’s, maybe A321’s, but more likely with MAX8’s.

      Many say this will wake-up Boeing to build the NSA, but so what. If Airbus take the market now replacement aircraft for NEO’s and MAX’es will only be required in 15+ years when Airbus could/should also have and NSA.

      If it was not for the so called Boeing-Delta “scuffles” the MAX8 could become a winner in the new Delta order whereas an A320Plus would have been a “no-brainer”.

      The A320 being the most likely replacement for the A319’s in the “absence” of the CS300.

      Won’t be surprized if Boeing puts in an offer with “very low” prized B737MAX7 and/or MAX8’s?

      • Delta’s 737-800s seat 160 in 2 class + while their latest A320 version seats the same number. 160 .
        There A321s seat 192 with same classes, while the 737-900ER seat 180.

        Dont see the A320 as being too small or the A321 too much ( they have
        domestic 757s which need replacing too)

        • Hi Dukeofurl. The 320 and 321 have their place in the market and are good aircraft, but why are airlines such as Air Canada, AA and UAL replacing A320’s with MAX8’s? I am seeing a trend and it appears to be gaining momentum

          Total A320NEO orders for 2017 stands at -39, difficult to get MAX8 only orders but total MAX orders for 2017 is 96 (NEO total, -16). This excludes the now confirmed 30 MAX8 orders from Iran Aserman Airlines.

          Airlines replacing older A320’s and 737-800 most likely wants something with 10% or so more seats, 175-180. That’s why I am going on about the A320Plus.

          If Airbus is happy about losing sales to the MAX8, so let it be, Boeing is smiling. After all the “hanky-panky” a pointing case will be if Delta orders MAX8’s in the mix?

          Boeing is producing ~500 B737 per year, at this rate it is a 9 year backlog, not bad for a 50 year old aircraft, give them time to build the MoM.

          Airbus keep on saying that the A321 out sells the MAX9 by 4:1 or so, but the MAX10, which many (including me) are very sceptical about, could surprize, especially if CFM can get the LEAP B to 31K-Lb as they say they could.

          • Don’t think it is enough to state a trend only be analyzing seat capacity of each aircraft, bit more depth would be required. Maybe variables like, price, delivery slot, financing, etc, are equally important and could point to a different explanation, not necessarily a market trend.

          • These are just observations, no scientific analyses. The Delta order will be a water shed if they actually order MAX8’s.

            I can actually see that a longer range MAX9 with 31K-Lb engines (developed for the MAX10) could give current 757 operators an attractive alternative to the 321’s?

            And on another front, if Air Malaysia do not order A330NEO’s but 787-9’s and/or -10’s Airbus will have to take a hard look at where the go with the 330.

        • CFM is working on a 31K-Lb LEAP-B for the MAX10 which apparently will be ready by 2019/220. If these are fitted on a MAX9 (or even long range MAX8) Airbus could have some unexpected competition.

          By 2025 a 220-240 seat all new twin-aisle MoM could be flying, sure some in Airbus will say, “we have it covered”. Just put a fourth auxiliary tank on the 321LR and reduce seating to 140?

          p.s. My apologies, I should not be so pessimistic about Airbus.

        • Another 50 orders for the MAX, so 80 for the week so far.

          It could have the A320Pus if it existed? As could have been the LionAir and Spicejet and other orders?

    • Yes, I have a hard time seeing the CSeries wing and platform going away if it is technically superior and has inherent value. Somebody will purchase it and keep making it.

      Boeing and Airbus have the challenge in the future that the 150 seat and 200 seat aircraft can’t be covered by one wing. Each aircraft requires one optimized wing. Choose one or the other or build two all new wing designs.

        • Yes a 4,500 to 5,000nm wing first at 45m. Then a lighter 3,000nm wing at 40m with folding tips to fit into 36m gates at space constrained airports like Midway.

          • Why would they need 3000nm range if you are flying from Midway ? Even that is too much . They would stick with a non folding 36m wing.
            But I cant see a two wing design for commercial reasons, production efficiency goes down and costs go up. Look how difficult the different versions of the F35 went

          • I don’t know, Midway is pretty far out in the Pacific…

          • Don’t know what (if) the real requirements for a MoM will land up being. Some options;
            1A)220 Seats – 3500Nm,
            1B)260 Seats – 5000Nm (OEW ~40T less than the 787-8/9).
            This in an ideal world would require two wings and two engine thrusts.

            An one wing, one engine thrust option could be;
            2A)240 Seats – 4000Nm (standard model) with variant/layout options of,
            2B)270 Seats – 3000Nm (high density, short haul),
            2C)210 Seats – 5000Nm (low density, medium – “long” haul).

          • Its Midway on the outskirts of Chicago. Furthest coastal city is 1500nm. away.

    • Bombardier Inc won’t be for sale as long the family is the main shareholder. That’s why the family holding is so important. Otherwise the Chinese would be the first to buy, not Airbus. (My two cents)

        • There are ~1000 A319’s and some 900 B737-700’s that’s more than 10 years old, as well as also drips and drabs of 737-300’s, DC9-3X, MD8x’s, etc that needs replacement over the next 10 years.

          The CS300 could pick-up at least 50% of these on merit. But the market in emerging economies linking smaller destinations are potentially much bigger.

          So long live the CSxoo’s.

  16. Maybe next week BBD has a few hundred on order from Europe & Asia and everything looks different.

    • Or they bring in a Chinese partner and then what?

      Sue China?

      I see the C series as beneficial to North America as a whole and Boeing benefits by more generated traffic in areas the heavy 737 is non competitive.

      Work with BBD, not fight them. Just plane (sp intended) stupid.

      • Cseries has a chinese partner now, they produce the middle fuselage. Due to the support from state entities in Quebec and Northern Ireland, cant see the production moving from those locations

  17. I think Airbus is the target. Bigger orders get bigger discounts. The US has the biggest airlines, therefore it’s highly likely that Boeing has made its cheapest offers and sales in its home market.

  18. Surely Delta could create a Canadian subsidiary to buy the aircraft and then lease them to themselves for a dollar a year.

    • Could be a work around. As we have seen with the WTO rulings, they just do the same with different methods.
      Even Bombardier/ P&WC used to have royalties in return for state aid, but when the WTO ruled that illegal, they just unwound those payments and royalties and got the money in other ways ( which are very secret).

  19. Do you think American airlines will watch this sad show without doing anything? They will be the first to be penalized. They need competition and innovation. And not blockages, immobilism and infantile reactions on the part of one (only?) of their suppliers. The US market counts for one, although it is important. It is the dynamics of airlines around the world that will eventually win this battle by giving step by step credibility and recognition to the CSeries. In any case, outside the United States, Boeing will face the same competition with the CSeries and in the long run, sales of the 737 will suffer setbacks. In the market of 100-150 seats. Here, once again, is a grotesque image of what is happening at this moment in this fight of imaginary forces …

    • And then, in the worst case scenario of abandoning the Delta order, you can imagine a fairly large number of airlines around the world who would like to take advantage of the same conditions as Delta, if there are any advantageous conditions. And this, as of the next year!

      • Will it be illegal for Delta to lease CS100/300’s from, for example a China based leasing company (at US trade acceptable prices), if they need to abandon the purchase order?

  20. I still think a large part of this is aligning Boeing with Trump. If Trump wants the USN/MC to buy a significant number of F18s rather than F35s (or maybe there is some other big non-commercial aircraft financial upside Trump can push Boeing’s way – KC46? KCxyz? space systems, all sorts of things) and if Boeing’s actions don’t hinder sales of the MAX versions that have a chance around the world (and why would they?), then the loss of a smaller F18 order from Canada and any MAX order from Delta may make the action financially sensible all on its own. If Boeing sense that Delta are swaying heavily to Neos anyway, the balance swings even further.

    Boeing comes across as a bully but the sales still roll in, overall it makes more money, places a marker in the ground and sets a precedent and nothing more is intended or need happen.

    • Inclined to agree with you, bit risky though, the market doesn’t like to feel manipulated

  21. It all looks like BBD is a pawn in a Boeing chess game to get the MAX order later in the year. They’ll drop the case if Delta orders MAX aircraft and Airbus loses out.

  22. It strikes me that Boeing risks losing much more than a 75+75 single aisle order from Delta. Good luck to them on a sales campaign for a NMA/MOM for the 82 767s that, despite solid TechOps, will eventually have to be retired. And DL’s 757s on ETOPs routes could also be NMA targets.
    If Boeing manages to get the fines placed, Delta may be out of reach of Chicago’s sales efforts for a generation, unless they offer some very ‘opportunistic’ prices (Boeing did that for United, of course, in part to waylay the CS300. Oh, the irony.)

  23. It’s probably some sort of PTSD for Boeing, they must still be reeling that some (at that time) little OEM from Europe challenged them and in almost 4 decades, cut their market share to a near duopoly.

    Of course in Boeing’s mind it was subsidies1!!!111 that was 100% responsible for this.

  24. I think we pretty much all agree that Boeing’s case does not hold water. The question is why would they want to present such a hopeless case? What are they expecting from this? Certainly not all the flack they have since been receiving from their fans all around the world.

    The only reasonable explanation I can come-up with is that more than a year later Boeing still has not recovered from Delta’s C Series order. What Boeing is most afraid of is the chain reaction this could generate among other US operators, like for example United and American. When the deal was announced they obviously perceived this as Bombardier invading their home turf, and this at about the same time Airbus was opening shop in their backyard.

    In my opinion what Boeing hopes to achieve with this case is to slow down the C Series progression in the United-States as much as possible until the time Boeing will have committed to the NSA.

    To get a sense of the drama that must have unfolded in Boeing’s boardroom when Bombardier made its Delta order announcement in April 2016 it is worth revisiting the following video, but with the present dispute in mind.

    https://www.youtube.com/watch?feature=youtu.be&v=ul7KVapsJO4&app=desktop

    • Normand, I agree with you

      It reminds me of a company I left to set up on my own. We set up afresh and did our own thing, the company fixated on us for the following 7 years through restraint of trade, accreditation issues, property deals, they fought dirty, making life really difficult for us. The simple fact was that they lost focus on the market need and as such we took their market. Once we were 3 times their size in our market they sort of stopped.

      This is what is happening at Boeing, a loss of focus on what they have to do. It is all very well being outward looking but it is what makes you special as an entity, the quality and modernity of aircraft in this case, which determines enduring success.

    • Off topic — unlike the far too often predictable Hollywood movies, German war films generally focus on the horrors of war and the needless waste of human lives. FWIW, I can’t stomach war movies where the Germans, Russians or Japanese (etc.) are speaking in (broken) English rather than having them subtitled.

      Anyway, here’s the original: 😉

      https://www.youtube.com/watch?v=0YTePIi4arg

      • I actually opened your attachment, could help laughing, very good.

        But in response to Normand, Boeing has all the attention on it before Paris. And, “Our United Dr, Big Rabbit, glass in the ice-cream”, long forgotten. United most likely a MAX10 launch customer as well as ordering CS’s.

        Happy days are here again.

    • Classic!

      But on a other the issue of loyalty. None of the major European airlines have ordered the A330NEO, as far as I am aware, Germany, France, BA, KLM.

      787, 777’s Rule, subsidized by the US.

      • The 777X has no orders from US airlines, while it may appear as if the A350-900 is the most versatile civilian airliner in operation today.

        • The 350’s are excellent aircraft, just wish Airbus could sort out production issues.

          As you said no orders for 777X’s from the US airlines (and no A380’s). Interesting dynamics.

  25. Couldn’t Delta setup a leasing arm in Canada, Bahamas, whatever, provide it with capital and have it procure the CSeries, then lease it back to Delta mainline? That way to aircraft would be ‘exported’ to the USA?

    • Now, Delta’s gotta to be thinking C500 for their 150-160 size replacement.

  26. I think it’s more a question of plain stupidity than a complex chess game.

  27. Meanwhile, Akbar Al Baker seems to be furious over the Trump administrations’s support of the anti-Qatar alliance, Perhaps the Qatar government will just cancel the 72 Boeing F-15QA fighter aircraft they have on order, while Mr. Al Baker will start cancelling 777s and 787s en masse.

    https://www.youtube.com/watch?v=UuLFHXg3Nog

    • Is Al Baker about to do a U-Turn on the United States?

      • Trump-Boeing: A dangerous liaison. If Boeing were to lose a large number of 787 and 777 orders from Qatar Airways, it could just be the start of a losing streak of order cancellations; where the direct cause would be Dennis Muilenburg’s choice of having Boeing gotten into bed with Trump.

        • If Qatari airlines are losers and other ME airlines winners from the current ME situation Airbus is the most likely loser at the end of the day.

          Don’t know where Azerbaijan stands in the political arena but I have many times considered Baku as a potential hub for an airline/s along the Emirates/Qatar formula.

          Got two runways (~3.8km and 3km), 5000Nm to NY and 3000Nm to Beijing, most European and destinations in India, <2000Nm.

          • With all due respect, but you do sound like UAE national Saj Ahmad — Boeing’s “head cheerleader” who’s also the “chief analyst” (LOL) at the one-man operation “Strategicaero Research”.

            Airbus’ open exposure here to Qatar Airways is evident. The longer this spat goes on, as seems likely, the more chances are that Airbus will end up with a very bloodied nose.

            And let’s face it – Airbus is thus far, doing a pretty poor job of trying to get the A350 up to rate while battling quality faux-pas too.

            If Qatar Airways starts to regress, so too will the A350 program.

            http://www.strategicaeroresearch.com/page/2/

            Now, do you seriously believe that Etihad and Emirates would be cancelling their orders with Airbus just because the UAE government somehow would start taking their cues from Trump?

            In the unlikely event that Etihad and Emirates would be cancelling their Airbus orders, the EU would probably respond by severly cutting UAE traffic rights to the EU.

          • No offense, actually I some sorts of French/British X-breed living in Africa.

            Don’t think Emirates or Etihad will cancel Airbus orders, but could see an increase in Boeing orders from them.

            Still think we could see a major 787-10 order from at least one of these that could serve basically all their destinations other than the Americas with Australia being on the edge of its range limits.

    • Thanks for the clip. Seems the bully syndrome is picking up momentum? Qatar is not the largest country in the world and BBD not the largest aircraft manufacturer in the world.

        • The way interest rates are increasing in the US most Americans could be driving Chinese cars in the future?

  28. Sad that Boeing chose to go to the Lawyers vs the Engineers to solve their own issues.

    • They might have 40 people working on this issue plus Washington lawyers, meanwhile the Boeing Commercial has 76,000 people.
      Disputing contracts even amoung US only contractors is endemic, this is just an extension of this.

  29. Looking at the Boeing portfolio for the next 5 years, the 787-9 is a very good investment for an airline. And the 737-8, but it lacks a growth version.

    The US airlines make clear to Boeing the CS300, NEO’s & A350 are excellent & they’ll probably get more. Unfair. Might as well call in Trump / congress to fight them..

    • If it was not for the 737-800NG and MAX8 the 737 was dead.

      Why does Airbus not do a 320Plus? Keep the 737 alive because they don’t want Boeing to develop an NSA?

      If CFM can get the 31K-Lb LEAP B right for the 737, Airbus can only blame itself for losing Billions of what is going to follow.

      • There’s a saying in chess circles; “long think, wrong think”, or “paralysis by analysis”. It would appear as if Boeing is fraught with paralysis, since that diagnosis would seem to fit the irrational organisational behaviour of Boeing, lately.

        • Very true, sometimes better decisions are made over a few beers and a barbeque, and I am serious. But then you go for it, boots and all.

          On Boeing’s website they claim that something like 75% of orders up to 2035 will be single aisles. If they mean it they have a weird way of addressing it, except trying to kill BBD.

  30. OV-099: “It would appear as if Boeing is fraught with paralysis, since that diagnosis would seem to fit the irrational organisational behaviour of Boeing, lately.”

    To stay in your chess metaphor, I would say that Boeing is still the king and Bombardier only a pawn. But it now appears that the king has been cornered by the pawn and can’t move.

  31. Boeing — a case study in how to turn a successful company into a stalemate company.

    • My business experience comes from a total different background than airlines and aircraft. But I would have broken up the Boeing commercial division into single aisle and twin aisle business units.

      The MoM crisis/grey-zone and lack of an NSA is a result of this one sloth of a a seemingly directional division.

      • To support my statement, maybe a summary. If Boeing numbers are correct with 75% (by units) sales are going to single aisles do the following represent a balanced capital-risk-return investment ratio since inception of Boeing?

        1) Single aisles.
        A)727,
        B)737,NG,MAX,
        C)757.

        2)Twin Aisles.
        A)707,
        B)747,-8,
        C)767,
        D)777,
        E)787,
        X)777X, capital investment makes this virtually a new type.

        If there were two divisions would this have looked like this.

        Airbus is in the same situation due its herd syndrome;
        1)Single Aisles.
        A)320, NEO family,
        B)Waiting for the Boeing NSA.

        2)Twin aisles.
        A)300/310,
        B)330, NEO
        C)380,
        D)350,
        E)Waiting for Boeing’s MoM.

        No wonder these guys are in the situation they are? Burning capital on twin aisles while the money is in the single aisles.

        That’s why Embraer, BBD, COMAC and Irkut is catching up.

          • You never flew in one of those?

            Meant falling under larger longer range aircraft category, it had four engines?

        • I wouldn’t characterize Airbus strategy as waiting for Boeing.

          At least not on the A300, A310, A320, A330/40, A380, A400, NEO. Even A350 proved a A340/777 replacement rather than responds. probably they’ll launch A322 too, based on opportunity rather than waiting for Boeing.

          • I really hope so Keesje. See Ryanair is looking at MAX10, if they not careful the MAX10 could (band-aids and all) could actually hurt the 321.

            Just don’t know how Airbus just excepted/allowed the MAX8 to flourish. After many ding-dongs in my head the following could be options for the 320-family.

            1)319 – PW1500G engines?
            2)320-As is (160 seats)
            3)320PlusXR – 180 seats, new wing, 4500Nm-at full pax capacity,
            4a)321-As is (200 seats),
            4b)321LR???,
            5)322-220 Seats, new wing, 35000Nm.

            A320Plus and A322 to share same wing, landing gear, engines, etc.

          • Hi Keesje, maybe you can explain this but something does not add up?

            The 321CEO has a claimed range of 3200Nm with 185 pax, the 321NEO-LR with 185 pax and 3 additional tanks, 3700Nm

          • @Anton

            According to John Leahy, Ryanair is welcome to buy the A32xneo-series at list prices. 😉

            Mr O’Leary has a tough reputation when it comes to negotiations. In 2002, he infuriated Airbus by signing a contract with Boeing for its 737-800 aircraft after coming close to a deal with the European manufacturer. Relations between Ryanair and Airbus have never fully recovered.

            https://www.ft.com/content/58d5923e-fafb-11e0-bebe-00144feab49a

          • Seems Airbus have a take-it-or-leave-it attitude when it comes to the A321.

            I stumbled across something about an 31K-Lb LEAP-B that could be available in 2019/20, but just can’t find it again. Do you know anything about it? Could be a game changer for the MAX’es.

            The CFM56-B2 had a 68″ fan and 31K-Lb thrust if I am correct, but much lower by-pass ratio.

          • The 737-10 looks IMJ more like a Hail Mary pass on the part of Boein, in order to try to prevent a further exodus of current 737 customers opting for the A321neo.

            As for the range of the A321neo, the 15 percent reduction in fuel burn should lead to a range increase of (3200nm x 1.15): 3680nm.

            Since the current A321-200ceo is fuel volume limited, the addition of two auxiliary fuel tanks is required in order to fly 3200nm (pax and bags only). The A321LR will be equipped with a third auxiliary fuel tank, while MTOW will be increased from 93.5 metric tonnes to 97 metric tonnes. Therefore, the range capability of the A321LR will be increased to around 4000nm.

          • Thanks, those were my thoughts but figures I could get showed differently, so I was confused.

          • Sorry to be a pain OV-099, but what would the approximate range be of the 321NEO without auxiliary tanks. If around 2000Nm more than enough for many routes, don’t know if such an option is available?

            Just thinking of LCC’s and the MAX10.

          • The A321neo with a MTOW of 93,500 kg, and no auxiliary fuel tank(s) installed (ACT), has a range of about 2550nm at the max structural payload of 25.5 tonnes.

            The equivalent figures for the “sharkleted” and “non-sharkleted” A321ceo (MTOW of 93,500kg), is about 2250nm and 2150nm, respectively – both versions having the same max structural payload of 25 tonnes (0.5 tonnes less than on the A321neo).

          • Remember, this is the still-air operating envelope at the max structural payload. In the real-world you’d have to take into account headwinds and a sufficient fuel reserve; or about a 15 percent reduction in range.

          • Coming from a Hot&High airport environments I appreciate these can do “bad” things to you.

            Just hope Ryanair knows that a MAX10 will struggle at many of its destinations which have <2.5km strips, probably destined for the major hubs which will make sense.

            Was thinking about an A320Plus with new wing as long range aircraft. Just as important could be is it capabilities of flying 2500Nm (180-220pax) with no auxiliary tanks taking off at HGW's from hot&high and/or short strips, (~32K-Lb engines?)

          • Frankly, I’d be surprised if Ryanair were to order the MAX-10. They would have to add one extra cabin crew member as there is a legal limit of 1 cabin crew member per 50 available seats (not necessarily occupied!). I’d guess that O’Leary would want a passenger capacity as close t0 250 seats, as possible. The max capacity for the A321neo (Space-Flex option) is 240 seats, while it’s only 230 seats for the MAX-10.

            Nevertheless, if Ryanair orders the MAX-10, would it be because they are starting to fear their competitors operating a large number of superior A321neo aircraft?

          • Was wondering if a MAX10 will have an extra door like the MAX200 if it goes high density?

            Or, Ryanair surprize by launching a single class “comfort” with 32-34″ pitch and reclining seats between its major hubs?

            Rome has two really long strips.

    • Just a personal view. Boeing should have done a “MAX” on the 777-200/300’s, already very good aircraft, but focused on an NSA after the 787 that is good competition to the A350.

    • Wonder how many airlines in hindsight think they should have rather gone with an A350-900/1000 combination rather than the 777-8/9 combination?

      Don’t think the current Geopolitical developments are in favour of the 777X?

      See Airbus is looking at a new wing for the A380? Someone at Airbus seems possessed with it?

      And now one of my favourite gripes, the 350-900 has turned into an ultra long range 9000+Nm aircraft. Rather spend that money using the A350 air frame in developing an A350-800 (original), with 280 seats, 8000Nm range, own wing, wing box, centre section, 74 K-Lb XWB engines, and landing gear.

      Goodbye 787-9!

      And the 330-900, as crazy as this may sound (and maybe it is) I can see it as having a future as an 330-1000, a “simple” ~5.4m (11 panel) stretch, 330/340pax, 5500Nm, 76 K-Lb engines, landing gear upgrades.

      High Density Central Asia-Asia-Europe, North-South America, Europe-US East Coast.

        • Agree Keesje, airlines appear to unfortunately have lost interest in the A330NEO as orders seemed to have dried up for it?

          I believe there is kind of a “MoM” market between 300 and 350 seats with ranges of 4000-6000Nm which the 787-10 is aiming at. At the moment orders are slow at the moment but I can see several 100’s of orders from Asian and ME airlines for and B787-10 type aircraft over the next 5 years or so.

          Airbus best response could be an aircraft in size between the A350-900 and -1000 with an ~6500Nm range using the -900’s wing, undercarriage and engines.

          Unfortunately I also think that the 330-900 will never be “real” competition to the 787-9 which appears to be gaining momentum?

        • Hi Keesje, can the 330 take more fuel without auxiliary tanks if the MTOW are increased to 245-250T?

          If so I can see advantages for the 330-800 to increase range to somewhere between 8000-8500Nm, this could be useful for long, thin routes where the 787-9 has to much capacity and generate interest from a number of airlines.

  32. OK, so we’re not impressed, but I don’t things are that bad at Boeing. I think that they are going to react fairly quickly with the NSA. It’s just not credible that they are in any way threatened by the C series, which I expect to be soon leapfrogged and slowly die from lack of development cash, or proper competition if that segment is deemed to be profitable.
    It’s just the rather distasteful American way of doing business and I think their main objective is to collect protectionist ammunition for future use against Airbus. Prepare for an Airbus wide body assembly line in Mobile.

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