Boeing Environmental Report

Boeing just issued a 50 page report on its approach to environmental issues. In addition to the link here, we’ve added this permanently under our Green Aviation section.

Boeing is participating our our Eco-Aviation conference June 18-20 in Washington, DC, organized with Air Transport World.

There is a high quality list of speakers.

Eco-aviation continues to gain importance in profile and substance. Boeing’s Scott Carson, president of the Commercial Aircraft division, spent a fair amount of time during his presentation at the annual investors’ conference yesterday talking about aviation and the environmental movement.

In an interview we just completed with Airbus for the new publication, Aviation and the Environment, Airbus discussed the environmental advances of the A350’s new Rolls-Royce Trent XWB engine compared with the new Trent 1000 on the Boeing 787. Although the Trent XWB doesn’t represent a technological break-through, it does provide advances over Rolls’ own latest engine technology for the game-changing 787.

Whereas fuel efficiency and noise have been the drivers in the past for new airplanes, there are a whole new set of drivers for technological advances to protect the environment.

Boeing’s new environmental report is important reading for a better understanding of what Boeing is doing and the issues in eco-aviation.

You read it here first: 767 production boost

The Seattle Post-Intelligencer reports today that Boeing plans to double production on the 767 line to accommodate airlines affected by the delays in the 787 program. We reported this back on April 15.

The P-I reports production will double to two a month sometime next year. We reported that the boost would come in 2010 and could be a doubling to 24 a year or even somewhat higher, to 27-30 a year.

We’ve also reported that lessor Aircastle may swap some Airbus A330-200F positions for A330 passenger slots to take advantage of 787 delays. We can now report that lessors Intrepid Aviation and Guggenheim are also thinking of swapping out early A330F slots for A330P positions, adding to their orders for A330s instead of a pure swap. Additional freighter orders would be placed with early positions being switched to the passenger model.

We’ll have more details in an update of our Corporate Website later today, delayed so we can include information from Boeing’s investors day conference this morning.

EADS’ ex-lobbyist quits McCain campaign

It generated a lot of headlines at the time of the USAF aerial tanker contract award to Northrop Grumman when it was revealed that a campaign adviser to Republican presidential candidate US Sen. John McCain one time had EADS as a client.

EADS, of course, is partnered with Northrop to offer the KC-30 tanker to the USAF. EADS is parent of Boeing’s arch-enemy, Airbus, and the KC-30 is based on the commercial A330-200 which essentially put Boeing’s 767 commercial airliner out of business. Boeing’s KC-767 is based on the commercial 767-200, with parts from the 767-300 and 767-400.

After Boeing lost the tanker award, critics of the decision blamed McCain for the loss, a position we find preposterous, but that’s neither here nor there. When it was discovered that a top McCain adviser was once a lobbyist for EADS, the conspiracy theorists really went to town.

We thought that the entire round of accusations was poppycock, and still do. (Disclosure: although we’re defending McCain on this one, we have no connection to his campaign and aren’t even for him; we liked Ron Paul in the primary and Barack Obama in the general.)

But with the McCain campaign adopting its own rules on ethics, conflicts of interest and lobbyists, the former EADS lobbyist quit the campaign.

A wire service story on the action may be found here.

Boeing loses another defense contract

Make it four. That’s the number of defense contracts Boeing has lost this year. This AP story outlines them.

Maybe it’s just coincidence, but Boeing certainly hasn’t done very well since protesting the first loss, that of the KC-45A tanker program. Maybe there’s no retaliation going on with the Pentagon. Maybe we’re just being cynical. But we can’t help wondering if there’s a connection.

Government R&D for A350 wing

The Financial Times reported today (May 15) that the UK government will help fund the research and development for the composite wing for the Airbus A350.

An excerpt:

Aerospace groups are joining forces with the government and regional development agencies to fund research and development aimed at strengthening the UK’s leading position in the manufacture of wings for commercial jets.

They are planning to invest £103m ($200m) in a three-year programme to develop and manufacture wings out of carbon-fibre composites, rather than aluminium. The R&D programme will be led by Airbus, the European aircraft maker, which has its wing design and manufacturing operations in the UK at sites near Bristol and in north Wales.

The full story may be found here, but it’s Subscription Required.

Our immediate thought, of course, was about that old bugaboo, government “subsidies” and the entire WTO/EU/USTR/Boeing/Airbus/USAF tanker series of fights.

This will only add fuel to the fire of the complainers over Airbus “subsidies.”

The Airbus response, of course, will be that Boeing gets plenty of R&D and “subsidy” support from NASA and the US Department of Defense.

UA-US, DL-NW, Boeing-Airbus

Richard Aboulafia, Addison Schonland and Scott Hamilton discuss the winners (or not) between Airbus ands Boeing in the potential tie-up between United Airlines and US Airways and Delta and Northwest in this 15 minute podcast by AirInsight. (Subscription only.) The link is here.

EADS profits on increased production

EADS, parent of Airbus, reported a stronger-than-expected profit on higher production at its principal subsidiary. The details may be found in this AP story.

A couple of take-aways:

  • This better performance, despite the worries over the dollar-Euro exchange rate, slower-than-desired progress in Power8 cost-cutting and new issues with A380 production, may make it more difficult to get cuts from the already recalcitrant labor unions; and
  • The A320 family, where higher production rates have kicked in (and going higher still) has proved to be a key to the Airbus recovery and cash flow. When Airbus announced plans to boost production of this family, Boeing criticized the move as unwarranted by market conditions. That was hardly the point; because of delays and cash flow shortfalls in the A380 program, Airbus really had little choice. (That Boeing is now considering boosting the 737 production seems to demonstrate Airbus was right about the market demand, too.)

Airbus plans to take the A330/340 production to 12 a month by 2010 in response to demand for this airplane, higher and sooner than expected. This will further aid the cash flow shortfalls from the A380 program.

Jumping the gun, perhaps?

Northrop Grumman announced the grounding breaking for its KC-45A tanker even though the Government Accountability Office hasn’t rendered its decision on the Boeing protest of the tanker contract award by the USAF to Northrop.

This strikes us as incredibly premature and reminds us of another premature declaration:

Groundbreaking for the KC-45 Tanker Manufacturing Facilities

Set for June 28

Mobile, Alabama Site to Provide KC-45 Tankers to United States Air Force

WASHINGTON – May 13, 2008 – Northrop Grumman Corporation (NYSE: NOC) and its key subcontractor, EADS North America, will join local, state and federal officials and the citizens of Mobile, Ala., in a groundbreaking ceremony on Saturday, June 28. Ground will be broken at Mobile’s Brookley Field, where two adjacent manufacturing facilities will be built to produce the nation’s new fleet of aerial refueling tanker aircraft.

The ceremony has been scheduled pending the outcome of the Government Accountability Office review of the tanker contract award. “We anticipate a favorable decision and look forward to starting construction on this historic facility,” said Ronald D. Sugar, Northrop Grumman chairman and chief executive officer. “We’re committed to transforming Mobile into the centerpiece of an expanding aerospace corridor.”

“This event underscores the fact that we are ready to get to work now,” Sugar said. “We need to move forward quickly to provide our men and women in uniform what the Air Force has identified as its number-one acquisition priority – the new refueling tankers they so desperately need.”

Northrop Grumman and EADS North America are committed to the U.S. Air Force and also have contractual agreements in place with one another, the state of Alabama and the city of Mobile to ensure construction of the facilities is ready to move forward.

“We are excited that Brookley Field will once again be a hub of American military aircraft manufacturing,” said Rep. Jo Bonner of Alabama’s 1st Congressional District. “There is no doubt that Mobile is poised to be the crown jewel of a rapidly growing aerospace center of excellence in the Southeastern United States, bringing thousands of jobs and creating endless opportunities for our entire region.”

EADS North America will deliver the KC-45 aircraft platform to Northrop Grumman. Airbus, an EADS company, is responsible for manufacturing at its Mobile final assembly facility and will assemble, test and certify the aircraft before delivery. Following delivery to Northrop Grumman, the aircraft will receive the necessary military modifications to turn the commercial airframe into a U.S. Air Force KC-45 Tanker. In keeping with U.S. Department of Defense requirements, only Northrop Grumman and U.S. government employees with appropriate security clearances will militarize the tanker aircraft.

“EADS North America is fully committed to providing Northrop Grumman with an aircraft built in the U.S.,” said Ralph D. Crosby, Jr., EADS North America chairman and chief executive officer. “More importantly, our men and women in uniform require and deserve the most capable system available. They have been waiting far too long for a modern tanker. Our entire team is ready to get to work now.”

Northrop Grumman’s architectural and engineering firm for the facility, BRPH Companies Inc., was selected last year and is prepared for the construction phase. Northrop Grumman’s facility is scheduled for completion and initial operation late next year. BRPH is leading a team consisting of KBR’s Mobile office and Thompson Engineering, headquartered in Mobile.

The groundbreaking ceremony occurs just a few days after the 60th anniversary of the start of the Berlin Airlift. This is significant because Brookley Field was the base from which C-54 transport aircraft supported the airlift.

About the KC-45

The KC-45 Tanker aircraft will be assembled in Mobile, Ala., and the KC-45 team will employ 48,000 American workers at 230 U.S. companies in 49 states. It will be built by a world-class industrial team led by Northrop Grumman, and includes EADS North America, General Electric Aviation and Sargent Fletcher.

Northrop Grumman Corporation is a global defense and technology company whose 120,000 employees provide innovative systems, products, and solutions in information and services, electronics, aerospace and shipbuilding to government and commercial customers worldwide.

###

0508-292

Airbus revises downward A380 deliveries

It’s official: new delivery schedule for the A380 shows fewer than planned for this year and next.

A 43 minute webcast on the press conference is available at www.eads.com.

Here’s the Airbus PR:

Airbus has completed the A380 programme review and is now informing customers about changes to its delivery schedule. The review assessed the programme status at the critical juncture of transitioning from low rate “individual” production, so-called Wave 1, to the full serial design and manufacturing process, called Wave 2.

Overall, the recovery programme, initiated in summer 2006, is progressing well. Four aircraft were delivered as planned and are performing very well in airline operations on long-range routes. Seventeen aircraft are in various stages of production, mainly in the wiring installation and system testing phases. Most aircraft earmarked for delivery in 2008 have already flown.

However, the review has also shown that the steep ramp-up planned in 2006 is not fully achievable. Time and resources needed for Wave 1 production aircraft are higher than expected, and this has created some delay in the changeover to Wave 2 with its new design and manufacturing process.

As a result, Airbus plans now for 12 (instead of 13) deliveries in 2008 and
21 (instead of 25) in 2009. Details about the new plan and the further
ramp-up and delivery slots in 2010 and the following years will be discussed with customers in the coming weeks.

The results of this review do not, at this stage, cover the financial impact. The extent of the additional costs will be influenced by the actual production and delivery scenario. This will follow discussions with the customers and a more precise evaluation of the implications of the new delivery schedule for 2010 deliveries and beyond. This will therefore take some more time to determine.

Airbus is an EADS company.

Checking jobs at Northrop? Check Boeing, too

US Sens. Patty Murray (D-Boeing) and Maria Cantwell (D-WA) have asked the White House to investigate the claim by Northrop Grumman that 48,000 direct and indirect jobs will be created with the KC-30 program.

The KC-30 will be assembled in Mobile (AL) for the USAF’s KC-45A program.

Murray, who is actually D-Washington, is Boeing’s most vocal and hyperbolic advocate (along with US Rep. Norm Dicks, also D-Boeing/Washington), and has vowed to block the Air Force award to Northrop because the KC-30 is based on the Airbus A330-200, and Murray has been leading a crusade against Airbus for years.

Murray, Cantwell and a couple of other members of Congress want the White House to determine how Northrop’s job count increased from 25,000 to 48,000 after the award was announced and after the jobs issue erupted as a major point of controversy, according to this report in The Seattle Post-Intelligencer.

It’s a fair question and one we raised at the time in this report on our Corporate website. We were surprised and skeptical of the doubling of jobs claim as well. Our report details how Northrop got its new number.

Whether one accepts Northrop’s methodology or not is a matter of debate, but at least Northrop offers up one. Boeing does not for its job claims of 44,000 direct and indirect jobs for the KC-767 program, despite having been asked several times by reporters and analysts (including us). Furthermore, there is ample reason to suspect the Boeing figure.

In 2001, Boeing claimed 22,000 jobs were tied to the 767 program when the company was producing these at a rate of 36 a year–two to three times the rate proposed by the Air Force for the KC-45A program. Boeing also claims just 25,000 jobs associated with the C-17, which is has more US content than the 767 (the 767 fuselage, tail and certain wing components are built in Japan, Italy, the UK and Canada while these are built in the US on the C-17). The production rate for the C-17 is similar to that proposed for the KC-45A.

So how can Boeing claim there are twice the jobs at as little as one third the rate for the KC-767 vs. the commercial 767 at its peak? How can there be nearly twice the jobs associated with the KC-767 vs. the C-17? Boeing has never answered either of these questions.

As long as Boeing boosters want an investigation about Northrop’s jobs claim, this should be expanded to include Boeing’s job claims.

Having said all that, on the merits of the award, the entire jobs issue is irrelevant anyway. Jobs were not part of the RFP or evaluation process. This issue has been political from the get-go, and should have no bearing on the award at all; the award should be entirely about technical merits.