Airbus predicts 480 deliveries in 2010

Airbus’ COO-Customers, John Leahy, predicts 480 deliveries in 2010, about the same number as this year, according to this Aviation Week article by Robert Wall.

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Boeing takes hard hit on DOD budget

Boeing took a hard hit on the Defense budget announced today by Sec. Robert Gates. The C-17 program will be canceled after the current contract is filled. The CSAR-X helicopter procurement is canceled. The Airborne Laser system based on the 747, is reduced to research only. The Next Gen bomber is off the table. There are other programs in which Boeing was involved that are gone, too.

This makes the recompete for the KC-X aerial tanker all that much more important. Gates said this will proceed in the summer.

Update: Defense Industry Daily has this superb recap of the winning and losing programs.

We did a podcast with Addison Schonland of IAG and George Talbot of the Mobile Press-Register about the implications for the tanker procurement.

Here is a link to Gates’ formal statement.

Major shift on split tanker contract

Update, April 3: The New York Times has this long piece on the prospect of a split procurement.

Original post:

It is a subtle but major shift on the controversial proposal to split the KC-X aerial tanker contract between Northrop Grumman and Boeing.

KIRO TV (CBS) in Seattle interviewed US Rep. Norm Dicks (D-Boeing/WA), who throughout the previous competitions has been dogmatically in favor of a single contract to Boeing. Dicks is #2 on the House Appropriations Committee, where any funding bill will have to originate. The chairman of the committee is US Rep. John Murtha (D-PA), who came out solidly in favor of a split contract as the only way to break the logjam over an award.

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Airbus may scrap A400M

Airbus may scrap the troubled A400M program, according to this London Telegraph report of a Der Spiegel interview with Airbus CEO Tom Enders.

Peugeot Citroen fired Christian Streiff, who designed the Power8 restructuing program for Airbus but then resigned after three months in a power struggle. Here is the report picked up by The New York Times.

Update, 4:00 PM March 30: Airbus discounted the London Telegraph/Der Spiegel report and says the company remains committed to building the A400M. Here is the Reuters report.

The picture about the future of the A400M is about as clear as this one.

Source: EADS

ILFC in perspective

Update, March 26, 2:20PM PDT: Bloomberg News moved this piece in which ILFC’s CEO says he’ll get the lessor out from under AIG’s “cloud.”

Original Post:

Mega-lessor International Lease Finance Corp. filed its 2009 10K annual report March 25 with the Securities and Exchange Commission. In it, the company discussed possibilities that could create what’s called a “going concern” situation.

In accounting-speak, the reference is all about bankruptcy. If a company or its auditors raise questions about the ability to continue as a “going concern,” this means there is a possibility the company could seek protection in the US bankruptcy courts. This almost always is a Chapter 11 reorganization filing rather than a Chapter 7 liquidation action.

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Countdown for ILFC’s 10 A380s

The countdown is underway for the outstanding order of 10 Airbus A380s by mega-lessor International Lease Finance Corp.

ILFC was an early customer for the super-jumbo jet and suffered two year delays along with the other customers when Airbus’ industrial production issues arose for the giant aircraft. As part of the restructured contract for the order as a result of the delays, ILFC obtained the option to cancel the orders in 2010.

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It’s Boeing (and Airbus) against the world

We were at the ISTAT conference this week, one of the largest aviation conferences in the world, where 1,000 aviation professionals gather for the Spring Annual General Meeting to assess the current state of the market. And the state of the market is dismal.

ISTAT stands for the International Society of Transport Aircraft Trading.

A major topic, perhaps the major one, was the so-called “funding gap” that exists this year: with $68 billion in aircraft financing required, nearly all observers believe there is a funding shortfall, or gap, of $10 billion to $28 billion, depending on who’s talking.

Except that Boeing, as well as Airbus, doesn’t subscribe to this theory. (Neither does the leasing company AWAS, but this firm is not out front about it.)

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Uncertainty exists over fighting composite airplane fires

c. Leeham.net

Uncertainty exists over how airport fire departments will fight fires in the new composite commercial airliners, indicating that the manufacturers still have educating to do.

A top fire official at Denver International Airport, the location of the most recent airport crash and fire in the USA, believes the coming composite-based commercial airliners will require airport fire departments to change they way they fight post-impact fires. DIA is not yet served by the Airbus A380, the only commercial plane flying with more than component parts made out of composites, and the airport is not slated to be among the first served by the Boeing 787—due to enter service in early 2010.

But a platoon captain with the Los Angeles Fire Department stationed at LAX Airport, one of two US airports currently receiving service from an airliner with substantial composite construction (the A380; New York’s JFK is the other), says his airport follows substantially the same guidelines established for fighting post-impact fires of current generation airplanes.

And Boeing told the airport authorities at Everett, WA’s, Paine Field, where the 787 will perform its flight testing, that there isn’t any effective difference between a composite airplane and a traditional one.

Bill Davis, assistant fire chief of the Denver Fire Department assigned to the Denver International Airport, believes tactics have to be changed after reviewing the post-impact fire analysis of the US Air Force Northrop Grumman B-2A bomber in Guam February 23, 2008. The USAF issued its crash report in June 2008.

“This will fundamentally change everything from strategy and tactics and equipment,” Davis said. “It strikes me that we’re definitely going to have to train to and equip ourselves differently. I’ve studied fires in military composites. This (B-2A crash) is the first of an all-composite airplane; usually there are just parts that are composites.”

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EADS financial results 2008

EADS, parent of Airbus, posted its financial results for 2008. The press release may be obtained here. EADS summaries of the results:

  • Group EBIT* of € 2.8 billion – supported by excellent underlying performance, significant positive foreign currency effects but burdened by programme charges
  • Net Income of € 1,572 million (FY 2007: € -446 million)
  • Free Cash Flow exceeded expectations with € 2.6 billion
  • Robust balance sheet with Net Cash at a record level of € 9.2 billion
  • Revenues increased by 11 percent to € 43.3 billion
  • Order book grew 18 percent to a record of € 400 billion
  • Dividend proposal of € 0.20 per share
  • A400M issues with customers and suppliers pending

The analyst call may be obtained by clicking the top right webcast item on this page. The 20 page PDF earnings slide show may be obtained here.

The A400M program took a charge of 704m Euros, or more than $894m at today’s exchange rate.
EADS predicts between 300 and 400 orders for Airbus this year.

Obama to delay tanker, says report

CQ Politics reported late Monday night that the White House has told the Pentagon to delay procurement of the KC-X tanker. See the story here.

Update, March 10: DOD Buzz has this item speculating the suggestion to cut the tanker program is nothing more than a budgetary ploy.