Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Airbus makes it official: A320 FAL comes to Mobile
Farbrice Bregier, CEO Airbus: We operate state-of-the-art factory, will create jobs, invest and grow the economy here in Mobile. We are proud to call an American town ‘home.’
We have more than 1,000 aircraft with 12 aircraft operating in America.
We invest more than $12bn a year in US economy, 250,000 jobs in more than 40 states. We are the largest export customer in US aerospace.
Why now? We’ve been talking about building aircraft here for seven years but pieces never came together. [Now they have.] Sourcing the best talent is a global challenge. A320neo is the best selling aircraft in its category. It would be foolish not to seize the opportunity.
Gov. Robert Bentley: Because of the groundwork laid…on the tanker project, we succeed today. The Airbus project will indeed accelerate Alabama’s [economic progress]. We’ve created a business-friendly environment in Alabama. I believe Alabama has the opportunity to build a major aerospace center just like we did with the automobile industry. By 2018 40-50 aircraft a year, first delivery in 2016.
The full press release:
Airbus and Mobile: Implications and analysis
Before getting to the meat of things, a couple of key stories:
Mobile Press-Register, June 30. Details of the plan.
Wall Street Journal: Boeing complains.
It’s now one of the worst-kept industrial secrets: Airbus will announce at 10am CDT July 2 that it will construct a $600m A320 Family Final Assembly Line (FAL) in Mobile (AL).
This is a major strategic and tactical move in the intense, often bitter competition between Airbus and Boeing.
Even before the plans became official, Boeing issued a pissy slam, harking back to the World Trade Organization dispute, rather than stating that it is in a position to compete against Airbus and its A320 with what Boeing otherwise routinely characterizes a better airplane with the best workers in the world.
Perhaps the pissy statement was chosen because in many respects, Airbus has mouse-trapped Boeing—and there is very little the company can do about it.
Before explaining, here are some facts to keep in mind. Click on the graphic to enlarge.
787 enables ANA to begin Seattle route–after an interim 777 solution
Japan’s All Nippon Airlines, the launch customer of the Boeing 787, said yesterday that the new, high-tech airplane is the enabler that prompted it to schedule its first service from Tokyo to Seattle.
Never mind that initial service begins in August with the Boeing 777-300ER and the 787 service won’t begin until October (ironically, with a 787 that will be delivered in August).
The seeming contradiction is explained by an initial summer-time surge in passenger demand that makes the 777 a viable start. Seattle is a highly seasonal market and the smaller-capacity and more fuel efficient 787 is what makes the 787 the preferred choice, ANA said during a celebratory event yesterday.
ANA will need all the advantages it can get from the 787’s lower fuel burn. The airline will be challenging giants Delta Air Lines and United Airlines on the routes. Delta operates the Airbus A330-300, a highly efficient airplane, and United uses the 777-200ER. Each has a good feeder system to Seattle and each has a good hub in Tokyo.
ANA, which like United, is a member of the Star Alliance, terminates its service in Seattle but it has a much better hub than UAL and DAL in Tokyo. It’s counting on the beyond-Tokyo strength to support its route. The daily traffic is 1,000 passengers but only 200 are between Seattle and Tokyo.
ANA’s 787s now is service are the heavy-spec ones with Rolls-Royce engines that initially have not been up to spec. Even so, the 787s are 21% more fuel efficient than ANA’s Boeing 767-300ERs, the airline said. ANA did not offer a comparison vs its 777s.
Boeing desperation: give it a rest, gents
This is really reaching. Is this really the best Boeing can do?
Odds and Ends: Airbus to Mobile; No “doubts” about A350
Airbus to Mobile: The New York Times reports that Airbus is gearing up to announce plans to build the A320 in Mobile (AL). We reported this prospect during our reporting from the Airbus Innovation Days last month. Bloomberg has this take.
A350: No doubts at Airbus. But the margins are probably gone to first flight and EIS. Airbus is sticking to its schedule of EIS by mid-2014; we think it will slip into early 2015.
Update, June 28, 10am PDT:
We can confirm that as of this moment, EADS/Airbus has not made the decision to establish a final assembly site in Mobile. We think we have a reasonably clear understanding of the situation that leads us to believe an affirmative decision is near. It is our belief that any FAL will follow along the lines that were discussed for the KC-30/45 FAL: build the parts within the current supply chain and ship to Mobile for final assembly. This follows the well-established FAL model for Hamburg, Toulouse and Tianjin.
We received some speculation that this FAL might be fore the A330 P2F conversation. We don’t see a business case for this. Our focus is entirely on the A320 family and the intense competition with the 737 family. Note we do not distinguish between ceo/NG and neo/MAX.
Farnborough Air Show preview
Overview
This is really expected to be a boring show from the perspective of orders. Airbus has been downplaying expectations following last year’s Paris Air Show blow-out of more than 1,200 A320neo orders. How can you match that? The answer is, Airbus can’t.
Boeing will certainly firm up hundreds of 737 MAX commitments, so this will be Boeing’s show. And there is the buzz that Boeing is partnering with Lockheed Martin and NASA (oh, another government subsidy?) to produce a 2,500 mph SST, with details supposed to come at the Air Show. Then there is the leak that the 787 will fly there, the first time in 28 years Boeing has an aerial flying display.
We’ve talked with several journalists and industry personnel who are skipping the Air Show this year. So are we, and we’ve been at the Farnborough and Paris air shows since 2008. We just don’t expect enough news this year that we can’t get from the press releases.
So here are our expectations for the show:
Odds and Ends: MAX EIS dates; McNerney on business climate; A320 Tianjin plant only breaks even
MAX EIS dates: Aviation Week has this story that lists the planned MAX EIS dates: 737-8, 2017 (we previously reported 4Q2017); 737-9 in 2018 and 737-7 in 2019. AvWeek also reported the bypass ratio for the LEAP-1B is 8.5:1.
Eulogy for the 747-400: Bloomberg has this interesting piece about the current status of the Boeing 747-400.
McNerney on US business climate: Boeing CEO Jim McNerney has these comments on the US business climate.
Airbus Tianjin plant only breaks even: so says this report in Aviation Week.
US Air’s 1549 A320 now in museum: It’s a tribute to the flight crew and to aviation safety.
737 MAX vs A320 neo: The debate continues
Here’s the next round in the continuing debate.
Bernstein Research published this chart detailing how Airbus and Boeing differ on the performance improvements they predict.
There is, of course, no way to know who is correct until the airplanes enter service.
We hear the A320 sharklets are performing better than advertised (Aviation Week actually reported this a while back as well). If the figure we’re hearing proves correct, the neo and MAX should have parity.