Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
- SPEEA, Boeing at impasse over safety program, union says April 23, 2024
- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
- 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
Boeing sees long life for 737
Update, March 11: Dominic Gates of The Seattle Times has an excellent article about the new Boeing airplane and its production site.
Original Post:
In a short article we did for Aviation Technology magazine, Boeing sees a long life for the 737. The airplane could sell right alongside the Y1, which Boeing’s Mike Bair says is erroneously called the replacement for the 737; he prefers to call this the “new airplane.” It is known internally as the Y1, hence our use of the term.
Indeed, the new airplane is 150-210 seats (some reports have it 180-220, but Bair told us 210 was the upper limit–though there is still some fluidity).
Our full article will be in the next issue of the magazine.
The Wall Street Journal has this article.
We’ve added a link to the daily news briefs from Aircraft Technology’s parent, UBM Aviation, to the right hand side of this page. UBM’s website is painfully slow, though.
What next for EADS, Airbus in US?
With plans to assemble the KC-45 in Mobile (AL) in shreds, what’s next for EADS and Airbus in the US?
EADS and Airbus said creating a final assembly line (FAL) for the KC-X would lead to assembling A330-200Fs there as well. Without the tanker, the business case for the freighter FAL in Mobile didn’t exist, said officials.
The tanker contract is gone and Airbus now has a backlog of only some 50 A330-200Fs.
Odds and Ends: Boeing to compete production site for new 737-class airplane
Odds and Ends begins below the photo.
We’re not big on photos but every once in a while we find one that we’ve very impressed with–like this (via Airliners.net) at LAX:
EADS KC-X briefing: No protest
Here is a three page PDF of the slides from the Press Conference: EADS-NA Press Briefing Slides 3-04-11.
EADS today confirmed widely reported stories that it will not protest the USAF contract award of the KC-X tanker to Boeing.
Ralph Crosby, Chairman, and Sean O’Keefe, CEO of EADS North America present.
The following are all paraphrased quotations, not word-for-word direct quotes.
Tanker updates: More financial analysis, 2020 market share
As interested parties and aviation geeks wait for EADS to make (likely not) and announce its decision (as soon as March 4) on whether to protest the USAF contract to Boeing on the KC-X aerial tanker, more updates have come in.
First is a new market share forecast by G2 Solutions of Kirkland (WA). Next is a new updated from one of our readers, who goes by the screen name OV-099. He previously provided a detailed analysis of where he thinks EADS and Boeing came out on pricing. He updates this with more Net Present Value analysis and other economic data.
Both new items are below the jump.
Concern grows over mum Air Force, but EADS won’t protest, says Reuters
Update, 10:30 PST: Loren Thompson of the Lexington Institute, who has come in for our share of criticism for his unabashed bashing of Airbus and subsidies as it relates to the KC-X competition, has this very good essay on why Boeing won.
Here is a link to Richard Aboulafia’s commentary.
Original Post:
We are hearing from a variety of sources a growing concern that the Air Force hasn’t been as forthcoming as it should be in its debriefs with EADS.
But Reuters moved a story a short time ago that EADS won’t protest.
The Mobile Press-Register, in a rare front-page editorial, and the Alabama Congressional delegation are complaining that the Air Force has been as forthcoming as they believe it should about why Boeing won the tanker contract. Publicly, the Department of Defense said Boeing was the “clear” winner in what had become a price shoot out. DOD, EADS and Boeing will not reveal the pricing.
Pricing the KC-X: $163m estimate for Boeing, $169m for EADS
One of our readers, with the screen name OV-099, provided a comment on our Dewey Defeats Truman post calculating the possible prices on the KC-45 and the KC-767.
OV-099 has been a long-time poster and when the occasion arises, does in-depth analyses on financial terms. We’ve cross-checked his work with others and found his numbers-crunching to be pretty spot-on.
With that in mind, we asked OV-099 to take a final look at his original posting with the thought of elevating it to a primary post. He has slightly revised his numbers. What follows is his analysis of how much EADS and Boeing priced their KC-45 and KC-767 in the bids to the USAF. His analysis is below the jump.
Update, 1-:30 am: OV-099 has further refined his analysis; the update is below.
Odds and Ends: Airbus working with NASA, tanker-take and other things
Our Odds and Ends this week:
- Airbus parent EADS has posted a job listing for an intern for one year to study open-rotor technology for a success to the A320. Airbus is working with GE and RR engines and–drum roll, please–NASA. Boeing contracts with NASA were, of course, subject of the European complaint against Boeing for illegal subsidies.
- Chet Fuller, the new SVP of sales, marketing and asset management for Bombardier Aerospace, gives a long interview about the CSeries with Francois Shalom of The Montreal Gazette in this story. It’s worth the read.
- Pratt & Whitney’s GTF engine is testing better than plan and ahead of schedule. Flight Global has this story and this one.
- Aviation Week has a good piece about the choices facing Boeing on the 737 issue.
- More than one reader suggests that politics played a role in the USAF awarding the the tanker contract to Boeing. There is no question that Rep. Norm Dicks (D-Boeing/WA) got the air force to change its life-cycle timeline from 25 years to 40 years in computing costs. Political or not, this was a correct action. The current tanker fleet has already flown 50 years and airplane life cycles are routinely 30-40 years in commercial passenger/cargo service. The additional period clearly worked to the disadvantage of the KC-45. We like this email we received: It’s all political. The south has thumbed its nose at this administration. This is the consequence. I don’t think the Air Force or SECDEF could sell giving a $35B award to a foreign country that involves creating jobs in the south. Our politicians (and unions!) played this well.
We think this is a gross over-simplification of what happened, but it’s a pretty good, if cynical, take on things. The Joplin (MO) Globe looks more closely at the life-cycle cost equation.
- The Everett Herald has a pretty good understanding of how Boeing won in this article.
- Aviation Week has this superb article on the tanker contest.
- Defense News analyzes whether EADS will protest.
- Embraer opened a business jet assembly plant in Florida. Hondajet has a similar plant in the Carolinas. Airbus was willing to do a plant in Alabama. While Boeing was outsourcing the 787 overseas, other companies were finding the US a good place to do business. Makes you think.
“Dewey defeats Truman” perfect prediction in KC-X tanker contest
Note: here is the link to the tanker transcript.
Podcast: Richard Aboulafia talks to Addison Schonland.
Richard Aboulafia of the Teal Group said it best: the upset Boeing win over EADS in the KC-X tanker contest is the “Dewey Defeats Truman” moment of this contest.
For those who don’t know this reference, see here.
Aboulafia predicted EADS would win. So did Michel Merluzeau of G2 Solutions in Kirkland (WA). And Loren Thompson, a paid Boeing consultant. We did, too. So did Daniel Tsang of Aspire Aviation and even the Boeing shills in Europe did.
Boeing officials thought they were going to lose and so did its supporters in Congress.