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 5. Turbofan design problems April 26, 2024
- Airbus 1Q2024 results: Airbus CEO: “A350 in-service experience drives positive reputation and orders” April 25, 2024
- A350-1000 or 777-9? Part 3 April 25, 2024
- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
EADS 2009 loss on A400M, A380
No surprise here: EADS reported a loss for 2009 on write-offs for the A400M and the A380. Here are some links to tide readers over while we juggle listening to the earnings call with the JP Morgan Conference we are also listening to this morning.
EADS presentation, a 44 page PDF.
Links to the Earnings and Analyst Calls.
EADS won’t bid on KC-X tanker, or seek new partner.
A380 will have losses for 2-3 more years.
From the Earnings Call:
Northrop, EADS to skip tanker bid
Update, March 9, 7am PST:
EADS will not independently bid for the KC-X contract, Market Watch reports.
Update, 1pm PST:
Northrop will no-bid and not protest, we have confirmed. EADS is undecided whether to proceed with a bid on its own but it is unlikely. Northrop’s decision was reached over the weekend.
The USAF RFP was built to be a bid for the cheapest tanker, in the view of a source close to the competition. It was unwinnable by Northrop, it was concluded.
In the near-term, this kills the Airbus plan to build a production facility in Alabama.
As we reported Feb. 23, a DOD document pretty well indicated that the extra capability of the KC-30 wasn’t important in this round but that it would be considered in a future competition.
Northrop bid $184m in the 2007 competition it won for the KC-30 and suggests that taxpayers need to be sure Boeing comes in below this price as a sole-source bidder.
The full Northrop press release is below the jump.
Air Park with A350 contract in dire financial condition
The air park selected by Spirit Aerosystems as the location for a 500,000 sf facility to produce fuselage panels for the Airbus A350 is in dire financial condition and cannot repay state bonded indebtedness, according to a newspaper article.
This is at Kingston (NC), which was the runner-up for Boeing’s 787 Line 1 assembly site that is now in Everett (WA). Washington State wanted the Spirit facility, but North Carolina was chosen for its closer proximity to Toulouse, France, where the A350 will be assembled, and for other factors.
The financial difficulties won’t have any affect on Spirit’s Airbus contract.
Boeing selects KC-767 for Tanker
Boeing, as expected, announced that it will offer the KC-767 to the US Air Force for the KC-X aerial refueling tanker competition.
The press release is below the jump.
There are a couple of very specific references in the press release challenging the KC-767 vs. the Northrop KC-30, which is based on the Airbus A330-200.
What we find particularly interesting is the announcement that the KC767 will have a 787-based cockpit, and a new fly-by-wire boom that as best we can tell is V 6.0 derived from the ill-fated KC-767AT. Illustrations on Boeing’s tanker web site have consistently shown a KC767 with winglets, but the press release says nothing about this (the updated tanker website continues to show a KC767W). It’s unclear what, if any, wing structural changes or whether a new wing might be involved, another feature from the KC767AT.
Boeing continues to cite the 24% fuel burn advantage it claims of the KC767 over the KC-30, which does not take into account additional savings afforded by winglets, which amount to about 4% on the commercial 767-300ER.
We also note Boeing’s specific reference to a flight control system that gives the aircrew “unrestricted access to the full flight envelop for threat avoidance at any time” as opposed to the computer-driven fly-by-wire system of the A330.
It has been assumed Boeing would offer a KC767 based on the Italian KC767, which is several years late and still undelivered. Market sources continue to assert Boeing has problems with the wing-mounted pods (Boeing previously said this has been fixed) as well as the fuselage center-line hose-and-drogue (Boeing previously declined comment). Boeing calls its offering the low-risk solution. Northrop continues to point to Boeing’s non-delivery of the Italian tankers as evidence of high-risk. EADS’ KC-330 MRTT is 18 months late to launch customer Australia.
We are hearing more and more than Northrop is more likely to protest the Final Request for Proposal than to no-bid the project. A announcement is expected by next week.
Christmas Day bombing attempt
BBC sponsored a bombing test on a retired Boeing 747 to see if the Northwest Airlines Airbus A330 would have survived the Christmas Day bombing attempt. The results are surprising and may be seen here.
The aluminum fuselage flexed but did not breach. We immediately wondered what the result would have been with a composite fuselage that makes up the Boeing 787 and the Airbus A350.
Northrop may decide on KC-X this week or next
Northrop Grumman may decide this week or next what it will do about the bid for the USAF KC-X Final Request for Proposal, Leeham.net understands.
Northrop has said frequently and clearly that it may not bid because it believes the FRFP is skewed toward Boeing’s KC-767, and we are satisfied this is no idle threat. But we also believe that while the odds, as things stand today, are that Northrop won’t bid, don’t consider this a sure thing.
Sliding Euro helps Airbus
As Airbus and EADS countdown to the March 6 earnings report with a hoped-for resolution of the financially disastrous A400M program, the companies are unexpectedly benefiting from a recent weakening of the Euro to the US dollar.
Every 10 cent difference in the exchange rate means US$1bn EBIT (earnings before interest and taxes) to Airbus, whose costs are primarily in Euros while sales are in dollars.
KC-X FRFP due Feb. 23; does a report hint on outcome?
The Final Request for Proposals for the USAF’s KC-X aerial tanker is due to be issued Feb. 23. The controversial and hotly contested procurement between Boeing and Northrop Grumman is supposed to be decided as a result of information provided in the FRFP, but does another document issued this month by DOD hint at the outcome?
Woods Hole searching for Air France wreckage
Woods Hole Oceanographic Institute from Boston has been hired to search for the wreckage of Air France 447, the Airbus A330-200 that disappeared in the South Atlantic during a severe thunderstorm.
Woods Hole participated in the search for the Titanic, along with famed oceanographer Robert Ballard. Ballard is not involved in the search for the A330 wreckage.
Murtha death bad news for Northrop tanker bid
The death today of US Rep. John Murtha (D-PA), chairman of the House Appropriations Committee, means US Rep. Norm Dicks (D-Boeing/WA) will likely succeed him, and this is bad news for Northrop Grumman and its bid for the KC-X USAF aerial tanker.
Murtha supported a plan to split the buy between Northrop’s KC-30, based on the Airbus A330-200, and Boeing’s KC-767 despite opposition from the Department of Defense for a dual procurement. Murtha believed a split buy was the only solution that would win Congressional funding to replace the 50-year old Boeing KC-135s.