Leeham News and Analysis
There's more to real news than a news release.
Airbus seeks to increase Washington State supply business; aims for 13 A350s/mo
It was the first time that Airbus specifically participated in an event in Washington State exclusively designed to mate the fierce rival to Boeing with suppliers in a meeting intended to increase business opportunities in Boeing’s back yard.
More than three years in the making, Airbus sent top supply chain officials to a suppliers fair organized by the Pacific Northwest Aerospace Alliance and the State Department of Commerce.
Before the event even started, one of the main arterials leading to the meeting was closed during the peak rush hour due to police activity. Wags suggested Boeing arranged the traffic disruption.
In fact, Boeing officials previously have said they support the idea that Washington’s supply chain sell to Airbus and other original equipment manufacturers–though they also admit they like the common suppliers to favor Boeing first. The cross-selling makes from stronger suppliers, Boeing says.
Boeing also had two people at the event listening in.
Here is an article from the Puget Sound Business Journal. We sat down with Airbus’ head of Americas procurement for Airbus and parent EADS for an exclusive interview, and we’ll have this report next week.
But one key piece of information to come out of the meeting that is critical to rival Boeing (as well as the supply chain) is that Airbus plans to produce the A350 at a rate of at least 13 per month. This confirms a long-reported rumor we’ve heard but which Airbus would never acknowledge. The confirmation came from presenter ElectroImpact, which is headquartered in Everett and has a major facility in Broughton, Wales, where it makes wings for the A380 and A350. The A350 facility was built with a capacity for 13 A350s per month.
Airbus has only acknowledged its production plans call for 10 per month within four years of entry-into-service (2H2014). Consideration to creating a second A350-1000 production line is underway and has been publicly promoted by John Leahy, COO Customers. No timeline for the decision has been specifically set, though it may come by year end.
Odds and Ends: Repairing the Ethiopian 787; the ELT theory
Repairing the 787: The prospect of repairing or writing off the 787 has gained fodder almost on the same level as speculation over the cause of the fire. There have been several articles, including this one yesterday in the Puget Sound Business Journal and this one today from a former NTSB member, writing in Forbes.
Throughout development of the 787, Boeing said repairing the composites was not something they were worried about. But most context related to ramp damage or other minor issues. Clearly, though, Boeing being Boeing, we are confident that engineering took a look at major fuselage damage potential.
In the extreme, Boeing can simply replace the entire aft end, which is depicted in this illustration.
Boeing famously replaced the nose section of a TWA 707 in 1969. The nose section of a BOAC 707 was undamaged and later grafted onto TWA 707-331 N776TW, which had been hijacked as flight 840. The nose was blown off in a Jordanian desert. The repaired aircraft flew for 10 years with TWA. The cost to repair was $4m, according to Wikipedia information (about $20m today).
Update, 9am PDT: Jon Proctor, in Reader Comments, says this BOAC angle is incorrect. He supplied the following photos that demonstrate the replacement nose was fresh from Boeing’s factory.
Jon Proctor photo.
Jon Proctor photo.
Qantas is famous for never having a hull loss, repairing damaged aircraft that others might scrap as beyond economical repair. The Airbus A380 involved in the high-profile QF34 engine explosion was out of service for a couple of years and cost something like $180m to fix, but it flies on today.
A Google search of damaged aircraft that have been repaired and returned to service shows a long list of aircraft that suffered what appears to be far greater damage than the Ethiopian aircraft. The difference, of course, is that the other aircraft were metal and this is composite.
The cost will go beyond the fuselage crown and related structure. The interior, with smoke damage, is toast. Who knows at this stage what damage has been done to systems, either from the fire, the fire-fighting or the knock-on effects.
ELT: Yesterday’s news that the Electronic Locator Transmitter is being looked at as a possible cause of the Heathrow Airport 787 fire predictably created a flurry of media activity over the implications of this prospect. The Wall Street Journal broke the news and a media frenzy ensued. WSJ posted an update late yesterday. We accessed through our subscription; Readers may try Google News to see if it is passed the pay-wall today.
The New York Times has this piece on the ELT and the potential role it may have had in the fire, either as a source or a propagator.
Flight Global has a piece that puts some good perspective on this prospect.
Washington on the move for new aerospace business
Washington State is showing signs of some real life in a slow ramp up to gain new aerospace business.
For years, nay, for decades, state politicians took Boeing for granted. Boeing officials complained and complained and complained about the need for better education, for smoother permitting processes, an onerous business climate and more. Officials warned over and over that they might move operations out of the state if things didn’t change.
When Boeing decided to move its corporate headquarters from Seattle to Chicago–with no notice to state officials it was even contemplating a move–politicians were shocked and called it a wake-up call.
Nothing happened. Officials hit the snooze button, turned over and went back to sleep.
Ethiopian 787 fire: the day after
Update, 12n PDT: The British Air Accident Investigation Board has issued its first press release. No apparent connection to the APU or batteries, but otherwise a standard we’re-working-on-it statement.
Unrelated to Ethiopian: Fascinating animations of the Asiana Flt 214 crash.
Original Post:
The origin of the Ethiopian Airlines Boeing 787 fire remains unclear the day after the event.
The New York Times has a recap that’s the best we found early Saturday.
As could be expected, we received a lot of media calls asking about the impact to the 787, to Boeing and some even about aviation safety in general.
We urged media to be cautious about drawing conclusions, other than from the photos it certainly doesn’t appear to have any connection to the previous battery fires because of the location of the fire burn-through on the Ethiopian airplane. The batteries are located far away from the burn area.
The possibility of the fire originating in the aft crew rest area was debunked when The Wall Street Journal reported Ethiopian didn’t configure its 787s with a crew rest area in this location.
Other areas quickly circulating: the aft galley, the air conditioning unit (the Financial Times reported a problem with this aircraft’s AC unit, complete with sparks, had been observed eight hours previously), a general electrical system fault, human error of some kind, and more.
It’s all speculation at this stage. And none of it leads anywhere.
Boeing stock was off $8 in the immediate wake of the news and closed down $5. In after-hours trading it was up 3 cents. Wall Street clearly feared another battery fire at first. But as the day went on and initial facts became clear, analysts seemed unfazed.
We urge media to proceed cautiously in its reporting.
This will clearly be a test for Boeing’s Commercial Aviation Services unit, known as CAS. We reported for CNN how CAS prepared to fan out to install the batter fix and to repair the fire-damaged JAL 787. This fire damage is far worse, and it puts to the test not only CAS’s ability to repair this airplane but the entire Boeing claim that a composite fuselage can be repaired from major damage.
Being first is sometimes a bitch.
Boeing has paid dearly for being first with the innovations associated with the 787, both in design and in production. The entire industry will learn these lessons, and Airbus with the A350 isn’t far behind with its composite airplane. Although Airbus has taken a more conservative approach with the A350 in a number of areas, one has to wonder what unknown unknowns will lurk over this airplane.
Some people, including us, have been mildly critical of Boeing for not proceeding with new, composite airplanes to replace the 737 and the 777. Boeing says it wants to “harvest” the technologies of the 787 before taking the next step of all-new airplanes. Perhaps harvesting lessons learned is equally important.
Did Boeing try to do too much too soon with the 787? Perhaps. But this latest incident may be little more than some human-induced fire or something originating with a vendor-supplier component that has nothing to do with the design or the systems of the 787.
Still, it’s Boeing’s name on the side of the airplane and undoubtedly some segment of the flying public will see the headlines and avoid the airplane. The public relations damage is real and, having been in the communications business, we feel for Boeing’s Corp Com department.
Odds and Ends: easyJet’s ‘neutral’ engine; Airbus, Boeing futures in Puget Sound
easyJet’s ‘neutral’ engine: We were amused at the Airbus photo release concerning easyJet firming up its orders for 100 A320neos, announced at the Paris Air Show. In the past, aviation geeks scrutinized the photos to see what engines were depicted to gain a clue if an engine order wasn’t announced with the airframe order. With the easyJet photo release, Airbus entitled it, Airbus “A320neo easyJet Neutral engines.”
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Airbus in Puget Sound: Next week the Pacific Northwest Aerospace Alliance and the Washington Department of Commerce are hosting the first Airbus suppliers fair here in the State.
- This is something near to our heart. We’ve been working on getting Airbus here for a suppliers fair since 2009 as part of the “Beyond Boeing” strategy we outlined in an October 2009 speech at a conference in Spokane (WA). When we began consulting to the Washington Department of Commerce the following year, Commerce (which previously had expressed interest) also took up the cause. The whole thing fell apart at the height of the vitriolic USAF tanker competition, when the Washington Congressional delegation became so political about the affair. Since then, Commerce and the Pacific Northwest Aerospace Alliance took up the cause and next week is the culmination of this effort. According to the State, 40 percent of the Washington suppliers it surveyed already serve Airbus, and the State is the Number 2 supplier in the US to Airbus by company count. Airbus wants to increase its US dollar-based footprint and is even talking about opening an engineering center in Washington during the next 10 years.
- The Puget Sound Business Journal article linked above has several links within it with more background.
Boeing in Puget Sound: Meantime, the Puget Sound Business Journal has several articles about Boeing’s future here:
The South is Winning: Why Puget Sound keeps losing jobs
The South is Winning: New composites could hasten drift
The south is Winning: Could Washington become a Right-to-Work State?
- In this one, we note that the unions “saved Boeing’s ass” during the 747-8 and 787 debacles but if Washington wants to truly be competitive with the South, it needs to become a right-to-work state. Fat chance.
There is also this editorial comment from The Everett Herald.
Fuel burn A320 v 737
While on our SAS flight from Longyearbyen to Oslo, we browsed the SAS magazine airplane descriptions and it contained fuel burn per seat in litres for each fleet type.
SAS operates the 319/320/321 and 737-600/700/800. Seating is as follows:
A319: 141
737-700: 141
A320: 168
738: 186
SAS reports a mere 0.001 difference in fuel burn per seat per kilometer in litres in favor of Boeing in each case–despite the 738 having 18 more seats, in which case the difference could be expected to be much greater.
We found the data to be quite illuminating.
Fuel burn per seat per km, in litres:
A319: 0.033
737-700: 0.032
A320: 0.029
738: 0.028
Airbus comes up for air, responds to Boeing’s Form 41 reliance
Airbus came up for air from the Paris Air Show and provided this response on the DOT Form 41 debate. Readers can now compare closely Boeing’s response to our queries with the Airbus response and draw their own conclusions. As with Boeing, we print their verbatim replies to our questions.
DOT form 41 Maintenance cost comparison
Boeing uses F41 data of the period 2004 to 2011 to demonstrate lower maintenance cost of the 737NG compared to the A320. Without debating about the relevancy of F41 data for aircraft maintenance performance and the “correctness” of the data, let’s have a look at the reported F41 data from the point in time when the A320 entered the US market (1991).
We see why Boeing is focusing on the 2004 to 2011 period, the reported data are at the first glance favourable for the 737NG.
However, the NG entered in the market in 1998, seven year later than the A320, hence at any point in time the graph compares aircraft with at least a seven year age difference. Is this a “like for like” comparison?
Let’s just shift the 737NG curve to the left, starting in the same year than the A320, in 1991:
The picture does now look quite different, but money over time does not have the same value and this is in the above graph penalising the NG.
To be fair the reported cost data need to be harmonised respecting the economic conditions. Let’s put all reported data in year 1991 economic condition:
At the time A320 entered the US market barely any MRO capacity was in place. This has changed over the years and from a certain point in time MROs started to make money with performing maintenance work on the A320. Competition started to take place between the MRO’s, which impacted the pricing of maintenance work in reducing the money spent for the operators. For the NG the maintenance market condition has not been the same. Due to the derivative nature of the NG to the 737 Classic a wide MRO base has been proposing maintenance work on the NG right form the entry into service in 1998.
The graph below illustrates this effect in showing the evolution of independent MROs in the US market.
Another fact leads to lower maintenance cost for the A320 compared to the NG. It is the solid structure, which has been fully fatigue tested during the certification of the aircraft. An advantage the NG does not have, because again due to the derivative nature of the NG compared to the Classic, no full fatigue test has been performed and certification of the airframe has been obtain by “grandfather rights”.
Some quotes from leading MRO’s illustrate the well maturing structure of the A320:
Conclusion:
· Instead of focusing on the “sweat spot” for the NG, data of the entire reporting period must be compared
· Comparing different fleet ages is not leading the sensible results
· Market forces e.g. competition have an impact on maintenance cost
The A320 airframe is better maturing than the NG and improvements on the A320 are showing tangible results.
Paris Air Show wrap; and other Odds and Ends
It’s over and here are the Airbus and Boeing press releases, followed by some Odds and Ends:
Airbus books almost US$70 billion at Paris Air Show 2013
· 466 Airbus aircraft orders & commitments across all product families;
· A320neo Family retains 60 percent market share;
· A350 XWB, A330 and A380 all continue to outsell the competition.
At the 2013 Paris Air Show, Airbus won US$68.7 billion worth of business for a total of 466 aircraft, which shows the resilience of the commercial aviation industry. The deals comprise Memoranda of Understanding (MoU) for 225 aircraft worth US$29.4 billion and firm purchase orders for 241 aircraft worth US$39.3 billion.
The A320 Family, spearheaded by the A320neo, continues its trailblazing success in the single-aisle market with 371 orders and commitments from six customers announced at the show, worth approximately $37.8 billion. Of these, 88 were for the A320ceo – showing that today’s in-production aircraft is still the most sought-after industry workhorse. A stand-out commitment during the show for the A320 Family was the announcement from easyJet for 100 A320neos plus 35 A320ceos – the winning result of a very intense competition. Another major endorsement for the A320 Family came from Lufthansa with the firming-up of 100 more aircraft. Additional A320 Family orders and commitments came from: Hong Kong Aviation Capital for 60; ILFC for 50; Spirit for 20; and Tunisia’s Syphax Airlines for three – significantly the first A320neo commitment from Africa.
Another star at Paris was the A350 XWB which flew for the first time on Friday 14th June 2013 and successfully completed its second flight on Wednesday 19th June. At the show this aircraft gained 69 more orders & commitments worth $21.4 billion from four customers on different continents. Air France-KLM placed a firm order for 25 A350-900s. Meanwhile, Singapore Airlines, already a large customer for the type, returned to order 30 more A350-900s; United Airlines also placed an additional A350 order for 10 A350-1000s — not only bringing its total A350 orders to 35, but also upgrading its previous order for 25 A350-900s to the larger A350-1000 model to replace its Boeing 777s. In addition, Sri Lankan signed a commitment for four A350-900s to complement an order for six A330-300s at the show.
At the top end of the product range, the flagship A380 received a commitment for 20 aircraft from the world’s third largest wide-body lessor, Doric Lease Corp, in a deal worth more than $8 billion. The contract with Doric is significant as it opens up a new, additional route to market for the A380, which is now available to airlines who wish to acquire the aircraft under the flexibility of an operating lease agreement.
John Leahy, Airbus’s Chief Operating Officer, Customers said: “The dramatic rainfall and thunder storms at Le Bourget this year didn’t dampen our order intake.” He added: “Our A350 XWB has been out-selling the 787 by better than 2- to-1 over the last five years. In addition our A320neo Family retains a 60 percent market share lead. That’s a ‘corner’ I want to stay boxed into.”
Boeing Launches New Commercial Airplane; Highlights Innovation, Efficiency and Partnerships at 2013 Paris Air Show
LE BOURGET, France, June 20, 2013 –Boeing (NYSE:BA) enjoyed a strong and productive Paris Air Show launching its newest model, the 787-10 Dreamliner, announcing important commercial airplane orders and strengthening alliances and relationships with customers and partners around the world.
“The 50th Paris Air Show has been important for Boeing with a number of historic milestones,” said Charlie Miller, Vice President of International Communications. “Our airline customers have strongly endorsed Boeing’s innovative family of commercial airplanes with outstanding orders and the launch of our latest 787 Dreamliner model.”
“The excitement and enthusiasm among customers, partners and suppliers for the products and technologies Boeing showcased across the commercial and defense businesses validated our commitment to innovation and customer focus,” said Miller.
Boeing highlighted its family of efficient commercial airplanes in both the single and twin-aisle market segments. The 787-10 Dreamliner was launched with 102 orders and commitments from five customers, including Air Lease Corporation (30), GE Capital Aviation Services (10), International Airlines Group / British Airways (12), Singapore Airlines (30) and United Airlines (20).
The new 787-10 covers more than 90 percent of the world’s twin-aisle routes with seating for 300-330 passengers. Design of the 787-10 has already started at Boeing and international partners will be involved in detailed design in the months ahead, with first delivery targeted for 2018.
The innovative 787-8 Dreamliner in Air India livery flew for the first time at the Paris Air Show, and the Qatar Airways 787 on static display attracted hundreds of customers, partners, government officials and news media. The ScanEagle unmanned aircraft system, produced by Boeing subsidiary Insitu, was part of the U.S. Corral display throughout the show.
Over the past week, customers have demonstrated their strong confidence in the full family of Boeing commercial products – the Next-Generation 737, 737 MAX, 787, 777 and 747-8, announcing orders and commitments for 442 Boeing airplanes, valued at more than $66 billion. Additional orders for 20 Next-Generation 737s and 20 737 MAX airplanes from unidentified customer(s) were posted on the Orders & Deliveries website today. The number of Boeing net orders for 2013 currently stands at 692.
Boeing announced during the show key partnerships with Embraer on the sales and marketing of Embraer’s KC-390 medium-size transport, and with Sikorsky on a joint venture to compete for sustainment services in support of the Kingdom of Saudi Arabia’ s rotorcraft fleet. The U.S. Marine Corps V-22 Program Manager reported that operational success of the Bell-Boeing tilt-rotor played a key role in the recent award of a $6.5 billion multi-year contract for 99 aircraft. Boeing also announced that work has begun at Le Bourget on a $354 million Mid-Life Upgrade contract with Air France Industries to upgrade four French E-3F Airborne Warning and Control System (AWACS) aircraft.
Customer announcements this week
(Note that Boeing is including a May 31 announcement from TUI in this tally–Editor)
|
Customer |
Quantity and Model |
Approx. List Price Value |
Status |
|
(60) 737 MAX |
$6.1 billion |
Commitment |
|
|
(4) 737 MAX |
$400 million |
Commitment |
|
|
(10) 787-10 |
$2.9 billion |
Commitment |
|
|
(2) 777-300ER (7) 777-300ER |
$2.8 billion |
Firm order (2) Commitment (7) |
|
|
(30) 787-10 (3) 787-9 |
$9.4 billion |
Commitment |
|
|
(12) 787-10 |
$3.5 billion |
Commitment |
|
|
(30) 787-10 |
$8.7 billion |
Firm order |
|
|
(20) 787-10 |
$5.8 billion |
Firm order |
|
|
(5) 747-8 Intercontinental (6) 777-300ER |
$3.6 billion |
Commitment |
|
|
(30) 737 MAX 8 |
$3.0 billion |
Firm order |
|
|
(175) 737-800 |
$15.6 billion |
Firm order |
|
|
(5) 737-900ER |
$473 million |
Firm order |
|
|
(3) 737 MAX 8 |
$301 million |
Commitment |
|
|
(20) 737 (20) 737 MAX |
$3.8 billion |
Firm order |
* First announced by customer on May 31
Odds and Ends
Embarer has good show: Embraer launched its E-Jet E2 with 375 orders and commitments, most for the E-175-E2 75 seat model.
Aerodynamics of the goose in flight: The video is a hoot (or should we say honk); you will enjoy this a lot.
By your finger tips: If you thought the video was a hoot, get a “load” of this story.
787-9F: Boeing plans to make a freighter, some day, of the 787-9.