Jan. 29, 2018, © Leeham Co.: This year isn’t even a month old. If the rest of the year continues like January, commercial aviation is in for an exciting year.
The stunning news, of course, was last week’s shocking defeat for The Boeing Co. in its trade complaint over the Bombardier C Series sale to Delta Air Lines.
Nobody I know of thought Boeing would lose. It did, and by a unanimous verdict.
Then there was the order from Emirates Airline for the Airbus A380, saving the airplane from almost certain program termination.
The Boeing 787-10 was certified. The first delivery will be in March.
And Qatar Airways said it will receive the first Airbus A350-1000 next month.
Let’s look at these events.
The shocking defeat Friday has already been scrutinized as much as it can until the redacted decision is released around March 2. Parties get the unredacted version Feb. 9.
Only the lawyers get to see the unabridged version. It will be Boeing’s lawyers who recommend the next course of action to CEO Dennis Muilenburg.
Boeing’s statement Friday in the wake of the defeat was defiant. I fully expect Boeing to appeal to the Court of International Trade or NAFTA, but if it doesn’t, I don’t expect this to go away, either.
Although Boeing can’t appeal the US International Trade Commission’s decision to the World Trade Organization, there’s nothing to stop Boeing from asking the US Trade Representative from seeking consultation from the WTO about the C Series subsidies.
Also: just wait for the first CS300 sale to a US carrier in which Boeing offered the 737-7 and loses. Will Boeing file another complaint, this time (unlike in the Delta deal) actually competing an airplane it produces? We’ll see.
In the meantime, Bombardier and Airbus pledge to proceed with the C Series Final Assembly Line in Mobile (AL), a move Boeing claims makes no economic sense.
Tim Clark, COO of Emirates, pressed Airbus for an A380neo. Airbus officials want to do it, but were unwilling on the strength of one order from one airline.
Yet to meet the forthcoming Boeing 777-9 economics when this airplane enters service in 2020, Airbus needs to reengine the airplane. The A380neoPlus improves seat-mile costs but not trip costs (at least not appreciably). The 777-9’s engines will be two generations newer than those on the A380.
Emirates hasn’t selected an engine. The airplanes don’t get delivered until the next decade. Airbus now can tell other potential customers the A380 is no longer on life support.
Press reports already identified British Airways is in talks for a small order. Perpetually, China is identified as a potential customer for more. The Singapore Air Show is early next month—might something be announced there? Or would the Chinese wait for Farnborough or one of their own events?
If BA, China and who knows who else place an order this year, might the A380neo with 787 engines be launched in time to meet the forthcoming 777-9? This is probably too aggressive, but maybe not far behind?
The last member of the 787 family is now ready for delivery. The first unit goes to Singapore Airlines, but not at the air show, apparently—March has been set for entry into service. (The airplane could be delivered next month, at that, in time for the airline to do its proving runs and so forth.)
The 787-10 is Boeing’s trump card (no pun here) to boost profit margins on the 787 program to recover all those deferred production costs. This is still an uphill challenge.
With Qatar Airways the first customer and launch operator for the A350-1000, expectations were high Qatar wouldn’t take delivery last month as intended.
People were half-right.
Qatar did accept and pay for the airplane, but issues with its very fancy first class section had to be worked out. Akbar Al Baker, the CEO, told reporters last week the airplane will be flown to Doha for final acceptance next month.
The A350-1000 is going to be a very good airplane. Although Boeing persists in claiming the much heavier (and with slightly fewer passengers) 777-8 is more economical, LNC’s numbers just don’t agree. Also, physics is physics. The heavier airplane with fewer passengers and a metal structure can’t “get there” in an apples-to-apples analysis.