We’re off to the Paris Air Show

Today is Thursday and we are on our way to the Paris Air Show.

First up on the schedule is the EADS/Airbus media day on Saturday, with a briefing that is expected to unveil the changes we previously reported to the A350-1000. The briefing day is embargoed to 12:01 am Sunday, June 19 (Paris time), matching the Boeing air show briefing embargo.

We’ll be filing regular reports on this site.

Additionally, Addison Schonland, managing director of AirInsight and of Innovation Analysis Group, will be at the show. He’ll be posting on both sites.

Observations on labor, Boeing

As we prepare to head off to the Paris Air Show, there have been a couple of important developments on the labor front with Boeing.

First, what we consider to be good news.

SPEEA, the engineers union representing Boeing workers primarily in Puget Sound but at a few Boeing facilities elsewhere, proposes entering binding arbitration on wages when contract negotiations begin next year. The contract is amendable at the end of 2012.

Boeing’s reaction is measured but encouraging:

“We are encouraged by this proposal and SPEEA’s offer for a dramatically changed way to negotiate a labor contract. We’ll need some time to review this proposal and engage in some serious internal discussions about it.

“We are in the process of setting up meetings with key SPEEA leaders to further discuss this concept.”

Now for the not-so-good news.
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As entirely expected, the first day of the NLRB hearing on the IAM complaint that Boeing established 787 Line 2 in Charleston in retaliation for the 2008 strike was just procedural and didn’t go anywhere. The judge’s suggestion that the two sides settle their differences also went nowhere.
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We’ve already expressed our view that the NLRB general counsel recommendations, and the IAM demands, are non-starters. Some other agreement is necessary to settle this matter, though we have no clue what might be acceptable to both sides.
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Perhaps the IAM and Boeing should follow SPEEA’s lead and go with an arbitrator. We view settling this before the IAM contract negotiations begin next year to be imperative. Otherwise, this issue will cast a shadow over the negotiations that will only inflame things.

Boeing ups 737 production to 42/mo from 1H2014

Boeing announced today that it will increase the production rate of the 737 to 42 a month from the first half of 2014. This is on top of consecutive rate increases from 31.5 to 35 to 38 a month, which haven’t even been implemented yet. The 38/mo is due to be effective in 2013 and 35/mo next year.

Here is the press release.

This compares to an announced rate of 42/mo for the Airbus A320, although 737 Program Vice President and General Manager Beverly Wyse said during the Boeing pre-Paris Air Show briefing that because Airbus shuts down production in August for the month, the 42/mo really equals 40/mo. (With the announced rate increase, Boeing lifted the news embargo on Wyse’s presentation; embargoes on other briefings remain until June 19 Paris time.)

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Boeing’s thinking still up in the air on New Small Airplane

Boeing promises “clarity” at the Paris Air Show about its New Small Airplane (NSA) program, but aside from settling on the performance it believes is required, little clarity has truly been achieved inside Boeing.

We learned last week key insights to Boeing’s thinking–and the divisions still remaining–within Boeing about the direction to go with the NSA. Our information comes from within Boeing, but the sourcing remains unidentified because the sourcing was not authorized to speak to the press. This information was obtained entirely separate from the pre-air show press briefings held June 2-3, which are embargoed to June 19 (Paris time)/June 18 Seattle time.

Information has been cross-checked with others and with statements made by Boeing executives in the public domain.

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Odds and ends: A350-1000, A380 orders coming; NLRB action starts today

A350-1000: We broke the international news that Airbus and Rolls-Royce were going to modify the design of the A350-1000 to increase the range of the airplane. Now, the ever-thorough Flight Global has this story with a fair amount of detail that leaves the two companies little left to announce at the Paris Air Show next week.

A380 orders: When we did the Paris Air Show outlook for affiliate AirInsight, we indicated that Hong Kong Airlines would likely place the order for five A380s that had been expected at the Zhuhai Air Show but failed to materialize. It’s now been confirmed by the airline. Aspire Aviation takes a look at the rationale.

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Paris Air Show outlook

There are several items looking at the Paris Air Show outlook:

AirInsight had a live discussion Friday with Addison Schonland, Richard Aboulafia and Ernie Arvai hosting it. The transcript is here.

AirInsight also published a lengthy written preview of what to expect from all the major airframe and engine OEMs here.

Here’s a short-take on Airbus at the show.

Larger engine, longer range A350-1000 to be announced at Paris Air Show

Airbus and Rolls-Royce have agreed to up-size the Trent XWB engine powering the A350-1000, which will add about 500nm of range, Leeham News has learned.

The formal announcements have been planned for the Paris Air Show. Airbus issued a “no comment” to our inquiry and Rolls-Royce did not return calls.

Emirates Airlines CEO Tim Clark has been urging Airbus to add power to the airplane and enlarge it to 380 passengers in three-classes and add range to allow non-stop service from Dubai to Los Angeles. Qatar Airways and Korean Airlines have also encouraged Airbus to enlarge the airplane.

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UBS: Boeing too aggressive in 787 ramp-up plans

UBS Securities issued a note today that says Boeing is too aggressive in its production ramp-up plans for the 787. A synopsis:

* 787 learning curve appears more aggressive than 777: BA’s assumed learning curve is a key component of its forecast for 787 profitability and cash generation. Our analysis indicates that BA is assuming much faster learning on 787 than it was able to achieve on 777 despite having less control of production this time. With 777 type learning, we estimate BA would likely be in a forward loss with flat to progressively worse 787 cash flow over the next several years.

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Paris Air Show outlook for Boeing

Here is a preview for Boeing for the Paris Air Show. More detail will be coming from AirInsight next week.

Pre-Paris Air Show discussion and AirInsight preview

AinInsight will host a live pre-Paris Air Show discussion Friday, with guest Richard Aboulafia of the Teal Group. Sign up to participate here.

Also look for AirInsight’s Paris Air Show preview next week. We historically have done air show previews here but this year we’re combining our thoughts with our partners, Ernie Arvai and Addison Schonland at AirInsight. AirInsight will go down the airframe and engine OEMs with our outlook for orders and announcements.

Addison and I will be at the air show, providing daily coverage. I’m also attending the Boeing pre-air show briefings this week (with news embargoed to June 19); and the EADS/Airbus media day June 18, at which there will be an A350 briefing that had been scheduled for May 31 but was postponed to the media day.

Just a hint of AirInsight’s preview next week: we’re expecting Airbus to announced and firm up several hundred orders for the A320neo and more A380 orders; Boeing may have some 747-8I orders ready to announce; Bombardier should have more CSeries orders; CFM will get its first LEAP-X orders on the neo (and these will be large numbers) while Pratt & Whitney will continue to add to the GTF book; Embraer won’t announce a new airplane and neither will Boeing; ATR (an EADS company) will have a nice turbo-prop order; and we expect a major announcement from Rolls-Royce.