The news that China’s AVIC is recruiting Western executive talent for its aerospace subsidiaries is alarming.
Long-time readers of this column and our main website know that we’re concerned about Western technology transfer by Airbus, Boeing, Bombardier and Embraer to China, Japan and Russia as the Big Four pursue outsourcing. We’ve seen each of these countries produce regional airliners and China and Japan announce plans for a 150-seat jet.
None of the regional airliners are likely to be commercial successes, but we think China’s ARJ-21 and Japan’s MRJ are probably proving grounds for the larger jets. Japan’s Heavy Industry that are industrial partners to Boeing’s 787 program openly said they are using 787 wing technology they developed for the MRJ and the planned 150-seat jet.
Posted on February 26, 2009 by Scott Hamilton
Update, Feb. 20: Flight Global has this report with a dire prediction from the IATA General Director that Airbus and Boeing won’t be able to deliver half of the aircraft scheduled this year because of the credit crunch.
And we’re told that many in the Airbus supply chain have already made plans for lower production rates than announced yesterday by Airbus.
Original Post:
Market Watch had this report today:
Airbus said it’s reducing the production rate on its A320 single-aisle family of aircraft to 34 a month from 36. Additionally, it now plans to hold work on the wide-body A330/A340s at 8.5 a month, instead of increasing it further as previously planned.
We think this is just the tip of the iceberg. See our report from February 13. For now Airbus reaffirms its delivery target for 2009, with the production adjustments scheduled to take place from October. But Airbus’ CEO said in a statement that “I do not exclude further production cuts if the need arises.”
Dow Jones filed this report about France’s Safran, the parent of Snecma, which is the joint venture partner of CFM international, supplier of engines to the Boeing 737 and Airbus A320:
Posted on February 19, 2009 by Scott Hamilton
The big question being asked by just about everyone with an interest in aviation these days is what are Airbus and Boeing planning for production rates this year and next.
Jobs are at stake in an economic environment where, in the USA, the number of jobs lost since the start of the current recession is equal to or more than the population of Chicago. European labor laws make it more difficult to simply chop jobs, but even so this is a concern.
Suppliers are worried that Airbus and Boeing will cut production rates, hurting their businesses (and leading to more job reductions).
Here’s an encapsulating review of what’s going on.
Posted on February 13, 2009 by Scott Hamilton
Just so readers don’t think Boeing is the only one with problems, Germany’s Der Spiegal reports things may be going far south with the Airbus A400M. Here’s their report, via Business Week.
Posted on February 5, 2009 by Scott Hamilton
Jon Ostrower has an interesting think piece about the prospect of Ryanair ordering up to 400 Airbus A320s or Boeing 737s powered by the new Pratt & Whitney GTF, or Geared Turbo Fan P1000G.
We first broke the story that Boeing is evaluating the prospect of 737 “re-generation” for an article we did for Aviation and the Environment magazine. P&W is developing the engine for Mitsubishi’s MRJ regional jet and Bombardier’s CSeries, but both airplanes are small. The MRJ seats 70-90 and the CSeries 110-149, but the MRJ has only one order in Japan and the CSeries continues (at this writing) to be stillborn. P&W has been developing the GTF for 20 years; without re-engining the A320 or 737, this investment is pretty much down the drain.
With Boeing and Airbus seemingly putting off a full replacement airplane for their prime jets until around 2020 or even later, airlines–notably Southwest–want a more fuel efficient airplane before then. The GTF would save 12%-15% on fuel burn. As we wrote for AE magazine, Boeing is on track to make some decisions for a 737RG this year with a prospect for an EIS in the 2013-15 period. This is a timeframe P&W can meet to provide the GTF to Boeing.
Airbus, of course, provided an A340-600 test bed for P&W to get some good data for the GTF. This information went to Airbus’ R&D department, where evaluation of a GTF A320 is almost a certainty.
Or not. James Wallace of The Seattle Post-Intelligencer reports that Airbus super-chief John Leahy says there aren’t any talks going on with Ryanair.
Posted on February 4, 2009 by Scott Hamilton
Seattle Times columnist Ron Judd got the real reason why Airbus parent EADS said no to bidding on Air Force One:
“Airbus backed out only after the US government failed to qualify for financing.”
Posted on February 1, 2009 by Scott Hamilton
EADS and its subsidiary Airbus won’t compete for the Air Force competition to replace the US President’s Air Force One.
The very idea of the President of the United States possibly flying around in a French airplane was blasphemous, even for us. With only three orders in the USAF Request for Information (RFI), there was no way EADS would assemble the A380 in the US, in contrast with the prospect of building the KC-30 air force tanker in Mobile (AL), meaning the airplane would have been assembled in France.
This leaves Boeing as the sole-source supplier for the new Air Force One and its two backup airplanes. Boeing will in all likelihood offer the 747-8 (as opposed to the 777 or, even more far-fetched, the 787). The 777 and 787 are considerably smaller than the 747-8, and the new composite technology for the 787 is something the Secret Service probably would like to see proved before entrusting POTUS to it.
Boeing has eight VIP orders for the 747-8I.
EADS’ statement is below:
Posted on January 27, 2009 by Scott Hamilton
Too much is being made over a decision by France to funnel cash through French banks for the express purpose of providing financing to Airbus customers.
France will provide $6.5 billion to the banks for loans to the airlines. The US government should follow suit. Bloomberg News has this report about the lack of financing available to customers potentially hurting Boeing.
The French stories headline or write about the money to the banks being aid to Airbus. In a round-about way, it is, but more to the point the world credit crisis is putting the squeeze on airlines. Depending on who you believe, there is a funding gap of $10bn to $28bn this year for customers buying airliners. Even though Airbus and Boeing pledged up to $1.5bn and $1bn respectively in customer financing this year, and other OEMs will likely step up as well, and even though the export credit agencies are doubling their participation, this isn’t enough.
The Obama Administration proposes around $900bn as a stimulus for the US economy, some of it for dubious project the Republicans rightly question, such as millions to resod the National Mall in Washington, hundreds of millions to engineer social policy via Planned Parenthood and (at least at one point) funding to build a museum in Las Vegas about the history of the mob.
Boeing is the USA’s largest exporter. Instead of funding dubious projects, Obama should earmark money for the banks that would be required to put into the credit markets to finance Boeing airplanes.
France got it right. The US should follow its example.
Posted on January 27, 2009 by Scott Hamilton
Airbus announced its 2008 order book today, with 777 net orders, reflecting cancellations of 65 A319s from bankrupt US discount airline Skybus, the last of the original A350 orders and a few others.
The tally is the fourth best Airbus posted going back through 1995, that last data immediately available from the company.
Gross orders were 900.
Airbus Orders | ||
1 | 2007 | 1458 |
2 | 2005 | 1111 |
3 | 2006 | 824 |
4 | 2008 | 777 |
5 | 1998 | 454 |
6 | 1997 | 389 |
7 | 2004 | 270 |
8 | 1999 | 244 |
9 | 2000 | 243 |
10 | 2002 | 219 |
11 | 1996 | 208 |
12 | 2003 | 186 |
13 | 2001 | 184 |
14 | 1994 | 80 |
15 | 1995 | 77 |
Posted on January 15, 2009 by Scott Hamilton
EADS and its subsidiary Airbus will have their year-end 08 press conferences January 13 and 15 to discuss 2008 orders, events and the outlook for 2009.
This comes on the heals of a January 9 analyst report by Goldman Sachs (London) on EADS with a Sell recommendation entitled, “It’s worse than we thought.”
The gloomy report follows one in December, also a Sell rating, that Goldman today says wasn’t gloomy enough.
The Goldman analysts look at plunging worldwide airline traffic, the dismal state of affairs in China’s aviation sector and what is now at least a three year delay in the troubled A400M program, also worse than thought in the December report. (More after the jump.) Read more
Posted on January 11, 2009 by Scott Hamilton