Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Teamsters, Boeing have a new contract April 29, 2025
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
Odds and Ends: Boeing’s secret 777X plan; Airbus wins big with British Airways parent
Secret 777X Plan: The Seattle Times reports that Boeing has some secret planning underway for assembly options for the 777X. This involves increasing the automation on the assembly (and thereby reducing manpower) and increasing the production rate to 10 or 12 a month, according to Dominic Gates’ story. This rate is still below the ultimate target of 13/mo Airbus has in mind for the A350, up from the announced 10/mo. And Airbus is considering yet a second assembly line for the A350, though it is unclear if Line 2 would be for the incremental 3/mo to 13 or more than 13.
The increased automation described by The Times, and the manpower-automation trade off, sounds very similar conceptually to the robotic process Boeing uses to paint 777 wings. In pre-Paris Air Show briefings, Boeing addressed the manpower issue. What jobs were lost to painting were shifted elsewhere as production of the 777 ramped up to the current 8.3/mo. According to The Times article, increased production of the entire 777X line would offset jobs lost to automation.
IAG goes with Airbus: In another huge order, assuming all options are exercised, Airbus scored a big win with the parent of British Airways, Iberia and Spain’s Vueling (an LCC), IAG, for up to 220 A320ceo/neos. Bloomberg has the details.
Odds and Ends: SuperJet 100; cell phones on airplanes; 787 real-time monitoring; Crikey
SuperJet 100: This airplane, which is basically the old Dornier 728 jet design, was supposed to be Russia’s leap to western standards. It hasn’t worked out that way, according to this article.
Cell Phones on Airplanes: There continues a debate over whether cell phones really have to be turned off for take-off and landing. This finally explains the technical issues of the cell phone and other electronic devices.
787 Real Time Monitoring: NPR (the national public radio in the US) has this report about Boeing’s real-time monitoring of the worldwide 787 operations.
Crikey: The ever-direct (and cranky) Ben Sandilands weighs in on the Airbus-Boeing advertising tiff.
Boeing: ExIm needed so we can do R&D, not finance planes; how about dropping stock buybacks instead?
The Puget Sound Business Journal reports that a Boeing exec says the US Export-Import Bank is necessary to help finance Boeing aircraft so free cash flow can go toward R&D rather than financing customer orders.
Hmm. We think all the billions of dollars going to stock buybacks to pump “shareholder value” (aka the McDonnell Family and Harry Stonecipher) might be better spent on R&D.
Sarcasm aside, we agree with Boeing that the ExIm is needed. Republicans (who claim to be for business) continue to target ExIm funding as corporate welfare. True, ExIm is often characterized as “Boeing’s bank” since most funds support Boeing airplanes. But as we have opined several times before, the European Credit Agencies fund Airbus and if the ExIm is shut down, then Airbus gains a major advantage.
Odds and Ends: The risk on airborne fires; C919 delays; A380 v 747-8I
The Risk of Fire: FlightGlobal has this story about the risk of fires on board (free registration required). The news article is alarming about the risks of lithium-ion batteries, combined with the new composite technology.
The page for the original report is here.
The 70-page report is here.
Among the findings FlightGlobal reports is what we wrote about early this year: if you have a fire on the airplane, you have to get on the ground in a short period of time (15 minutes, according to an Airbus study, 18 minutes according to this new one).
The interaction between the batteries and composites is a concern.
COMAC C919: The Wall Street Journal has an article talking about the anticipated delays of the COMAC C919. This is via Google News, so it should be accessible to Readers. Here is also a short news item from China Daily and one from Bloomberg.
Airbus loses advertising complaint: Remember those Boeing ads promoting its 747-8 as 26% more economical than the A380? Airbus filed a complaint with a UK watchdog agency, which denied the complaint Tuesday. Aviation Week has this article. One of the things that strikes us from the regulator’s decision is its conclusion that customers would, essentially, see past Boeing’s claims.
Boeing’s use of seats counts–notably 467 for the 747-8–supports the math of the advertisement. But Airbus is right that in true airline configuration, the count would be 405 seats, which dramatically alters the Boeing claims.
Regardless, we have previously opined that the comparison is ridiculous. Given the large differences in the size of the airplanes, comparing the 748 with the A380 is like comparing the 737-700 with the A321. Boeing is cheeky to make the comparison and Airbus fell for it. This debate is hardly worthy of two world-class companies,
Rather than engaging in a debate over seat-based economics, Airbus has a clear upper hand in these numbers: airlines have purchased 262 A380s and only 40 747-8Is. These are the only numbers that count and with these, Airbus clearly has the better advertisement.
Update: AirInsight has some statistics to look at.
Right-to-Work, Creepy and Right-to-Worse in Washington State
No column we’ve written has gotten more attention outside the blogosphere than the one in which we concluded that if Washington State is to truly become competitive with the South, it needs to become a Right-to-Work state.
Gov. Jay Inslee responded indirectly to the suggestion, via The Puget Sound Business Journal (it ain’t gonna happen). A leader of the engineer’s union for Boeing, Stan Sorscher of SPEEA, wrote an Op-Ed column in which he linked our column and in the next sentence said it was “creepy.” We exchanged emails with Sorscher, and he said he didn’t mean we are creepy—just the idea. The president of IAM 751, the local for Boeing, Tom Wroblewski, niftily called the idea Right-to-Worse. Several labor websites and newsletters reprinted the Sorscher and Wroblewski columns.
We occupy an interesting position in our role as an observer and pontificator in aerospace, and in Washington State, where we live. We’re not beholden to any company or special interest here, nor are we any longer on the Board of Directors of any trade group (thus we now can say what we really think). Our only interest is the growth of the aerospace sector here. We consulted to the state Department of Commerce for 18 months, until budget cuts in 2011, recommending strategies and policies. “Beyond Boeing” and seeking a suppliers fair with Airbus for our state’s aerospace businesses were among the recommendations we made.
We watched as the SPEEA and IAM 751 members essentially bailed out Boeing (“saved Boeing’s ass” is how we put it to the Puget Sound Business Journal) during the 787 and 747-8 design and production debacles. We watched while IAM 751 struck Boeing for 58 days in 2008 and SPEEA worked to defeat Boeing’s contract offer this year.
We’ve watched as Boeing placed 787 line 2 in South Carolina (our view is that this was retaliation for the 2008 IAM strike, which Boeing steadfastly denies—and which we don’t believe for an instant). We’ve watched as Boeing cut jobs in Information Technology and with engineers, outsourcing these to non-union states. We firmly believe Boeing Chicago is waging war on the unions, with the weaker SPEEA union firmly in its sights first.
In this totality and context, we came to the conclusion that Washington State needs to make some major revisions in its approach to labor—if it wants to be competitive with non-union states. Boeing has made it abundantly clear it will move jobs from unionized Washington State—the fourth-most unionized state in the nation, IAM 751 boasted in advance of its 2008 strike.
Unions would rather have no jobs than non-union jobs. Our basic view is that nobody should be forced to join any group in order to have a job. If a work force in any company votes to organize, fine. But anyone who wants to work should be free to work. Here in the Seattle area, unions are working against two projects valued at close to $1bn because they fear non-union jobs will be attached to the businesses or construction. We think this is just nuts. This is another reason Washington State needs to become Right-to-Work. These economic-drivers will create direct and indirect jobs (some of which will almost certainly be union, since at the least garbage collectors are unionized). To actively lobby against these projects and deny jobs to those who want them and positive economic impact for the Seattle area is simply an eye-rolling moment.
Aerospace jobs are moving out of the state because Boeing is moving them to non-union areas. This State lost attracting companies in the past because the State is the fourth most unionized state in the nation.
The IAM’s Tom Wroblewski pointed to Idaho as having lower wages because it’s non-union. We think Idaho has lower wages because…it’s Idaho. There isn’t a lot there to recommend it, really, despite some truly attractive areas. Among the detriments: it’s long been a pocket for neo-Nazis and skin-heads. (We are braced for the hate mail on this one.) And unionization isn’t a guarantee the state’s education system is going to be funded as it should be, as Wroblewski infers. Washington, the fourth most unionized state in the nation, has been underfunding education for decades. Former Boeing CEO Frank Shrontz was complaining about this in his day, in the early 1990s. Only this year, after the State Supreme Court, ordered the Legislature to more properly fund education did it step up and do so.
We acknowledge the sterling work of SPEEA and IAM 751 members—as we said, they saved Boeing’s ass—but Washington has to compete with the Southern States. Being the fourth most unionized state in the nation isn’t the way to do it.
Airbus adds to information about A330/A350 “Lite”
Airbus provided some answers to some (but not all) of our additional questions posed in our post a week ago about the A330 and A350 “Lite” versions.
We noted that Airbus had provided Direct Operating Cost (DOC) comparisons for the A330-200/300 vs the Boeing 787-8/9 but only Cash Operating Cost (COC) comparisons for the A350-900 vs the 787-10.
Airbus provided a detailed explanation, which is below.
But we also asked Airbus what are its assumptions underlying the DOC and COC conclusions. We specifically asked about the following assumptions, since they are important elements of reaching the conclusions Airbus did:
- Number of seats on the Airbus and Boeing aircraft;
- Fuel price per gallon;
- The stage length used; and
- The Capital Cost of the aircraft in lease rates.
Airbus responded with the seat assumptions for its aircraft but not for the Boeings:
- A330-200: 246 pax;
- A330-300: 300 pax;
- A350-900: 315 pax
Airbus also provided the assumed lease rates for the A330 and 787-8/9 but not the A350 nor the 787-10:
- A330-200: 800K$/mo
- A330-300: 900k$/mo
- 787-8: 1.1M$/mo
- 787-9: 1.25M$/mo
The A333 and 789 lease assumptions have been used since Airbus first revealed them at Innovation Days in 2011, and we wrote about those at the time. The A332 and 788 lease rates are new information.
“We have not included figures for the A359 vs 787-10 because Boeing’s own figures are currently sketchy,” Airbus said in excluding this data.
“I do not have any more info to give you at this time, but I have been advised that we may have more visibility around October,” an Airbus spokesman wrote in an email.
Because of the “sketchy” information on the 781, the spokesman wrote that absent 781 list prices (which Boeing has yet to publish), Airbus can’t calculate a DOC with capital cost.
“The A350-900 has 4% lower trip cost (COC) than the 787-10 (comparable per seat),” the spokesman wrote. “The A350-900, in its regional variant, has been specifically optimised to offer the same payload range characteristics as the 787-10. The design weights of both aircraft are very similar. In fact, in operation, with its slightly larger number of lower-comfort seats and additional passengers and stretched fuselage the 787-10 is actually heavier than the A350-900.”
Airbus also said that the A350-900’s wing is optimized for this design while the 781 wing is the same used on the smaller and lighter 788, “resulting in compromised aerodynamics that penalise fuel burn in such a large aircraft.”
(Of course, the same principals could be applied to the smaller A350-800 and the larger A350-1000, which use the same wing at the A359.)
“The newer engines of the A350-900 burn less fuel than those of the 787 which are still struggling to deliver a fuel burn level close their specification,” the Airbus spokesman adds. He said initial test flights of the A359 show fuel burn results at spec level, which he says is lower than the 787.
“Operating at a lower rating of 75,000 lbs (vs 84,000 for basic spec) for regional applications, the engines of the A350-900 will also benefit from significant reduction in maintenance cost compared to the 787-10 engines that will be operating very close to their maximum thrust capability that was designed for the 787-9,” the spokesman wrote.
C919 program in trouble
COMAC’s bid to develop a 150-200 passenger jet is in trouble.
According to this report, CFM doesn’t plan to proceed with an assembly line within China for the LEAP-1C that will power the C919. Concerns over intellectual property and the business case for the airplane are cited.
According to this article, GKN of Europe, which was to build the horizontal tail assembly, isn’t going to.
The airplane was supposed to enter service in 2016 and we already figured a delay of at least two years. Given the regional ARJ21 is already around seven years late, and still not certified, we think the two years is probably going to move to the right substantially.
If we’re generous and look at a 2020 EIS, this means the C919–an Airbus A320 look-alike–would enter service five years after the A320neo and three years after the Boeing 737 MAX. The airplane is also going to trail in sophistication.
Boeing officials as recently as this year still believe China will develop viable, commercially competitive airliners within the next 25-50 years. The ARJ21 program has been a disaster and it we anticipated that the C919 would be better than the ARJ21 (a low bar, to be sure), not truly competitive with the A320 and 737 but COMAC’s “makee-learn” airliner. It’s looking like this will be a disastrous program, too.
Mid-size, Twin-Aisle forecasts: the changing numbers; more Odds and Ends
MId-Size, Twin-Aisle Forecasts: The Blog by Javier has an interesting post about the changing mix in twin-aisle, mid-size aircraft from the Boeing Current Market Outlook over the years.
The author works for Airbus, but his opinions and his alone and we find his stuff quite analytical and balanced.
Ryanair and MAX: Talks between the Irish discount carrier and Boeing for a 737 MAX order may go into next year.
Boeing workers hurt by outsourcing: The government agreed with the IAM 751, Boeing’s local Seattle union, that workers laid off by the company have been hurt by outsourcing.