Leeham News and Analysis
There's more to real news than a news release.
First 747-8I rolled out
Boeing rolled out the first 747-8I Sunday (Feb. 13) in pomp and ceremonies that were foregone with the rollout a few years ago of the freighter version.
Here is some of the news coverage:
At a major press event Saturday, attended by some 80 global print and broadcast media, officials touted the 747’s fuel efficiencies compared with previous 747 models and, of course, against the Airbus A380. Airbus and Boeing have been having a running battle for years over which airplane is more efficient; Aubrey Cohen of The Seattle PI discusses this in his article above, which includes a link to a piece we did a year ago citing Lufthansa and Emirates figures which favored Airbus.
Slow down on “797” launch
The news agencies are buzzing with stories that Boeing CEO gave the go-ahead for a new replacement for the 737.
This isn’t what we said and what he did say is not new. Do a Google News search to check out all the stories.
McNerney said Boeing prefers a new airplane, and it does; this isn’t new.
He said evaluation continues. This is true; R&D on a re-engine has not, repeat not, been discontinued. This is because no definitive decision has been made.
So slow down, everybody. This isn’t the launch of a new airplane at Boeing.
PNAA: Split buy is only solution for tanker buy
Day 2 of the PNAA conference: Richard Aboulafia, consultant of The Teal Group, said that a split buy is the only way the USAF will be able to procure the KC-X tanker.
Aboulafia said the decision no longer effectively rests with the Air Force, but with Congress. Each political party has the ability to block a sole-source selection, Aboulafia says.
Other thoughts from Aboulafia:
PNAA conference: EADS likely to win tanker contest
We’re at Day 1 of the Pacific Northwest Aerospace Alliance conference in Lynnwood (WA) and at the Defense Focus Day co-organized by the Pacific Northwest Defense Coalition, consultant Michel Merluzeau of G2 Solutions (Kirkland, WA) predicted EADS will likely win the KC-X competition.
Before the Francophiles go crazy, Merluzeau favors Boeing’s KC-767.
Budget impasse hits tanker funding
We wondered about this months ago and sure enough, there is yet another twist in the KC-X competition: Congressional dithering on the budget means there isn’t (as yet) funding for the tanker procurement that is needed this year. See this story from Defense News.
Boeing suggests long life for 767
Boeing rolled out the 1,000th 767 Wednesday (Feb. 2) and BCA CEO Jim Albaugh suggested there is a longer life for the airplane even if the USAF doesn’t choose the KC-767 for its next tanker.
Dominic Gates has this story about the event. The Seattle PI quotes Albaugh as predicting 2,000 767s before the line peters out in this story.
We first suggested there might be a longer life in January 2010 with this posting.
We don’t really have much to add to Gates’ story or our previous post except for this refreshed analysis:
WTO penalties on the tanker? Let’s talk about this
For all the spin back-and-forth Monday (Jan. 31) on the final, but still confidential, ruling on illegal subsidies to Boeing, little was said about the long-running (and overly-politicized) effort by Boeing and its supporters to have Congress force the USAF to take into consideration the previous WTO ruling on illegal Airbus subsidies for the KC-X competition.
Before we start our discussion today, let’s remind readers of our long-standing position that the USAF can’t do so for a variety of practical reasons and one major one: countries can only do so after the WTO authorizes sanctions, and unless the USAF postpones a decision on the tanker contract (or, more likely, screws it up yet again), the award date will come years before any WTO authorization is granted. We need not recount all our reasons nor the process; we’ve done this many times and a search of our Archives will yield postings from recent times on this.
Having stated this disclaimer, one of our reasons for opposing the effort by Boeing and its supporters was that the final Boeing decision had not yet been issued.
The decision is done, even if it is yet confidential for a few more months pending translation. However, with a final decision, the US Trade Representative could share a definitive ruling with the USAF for calculation.
Again, setting aside all the objections, here’s the interesting part that nobody has yet focused on, including Boeing (and this is really inexplicable):
Odds and Ends: 777 future may slip to 2020 decade
Update, Feb. 2: Flight Global has this very good analysis about the WTO fight between Airbus and Boeing.
Original Post:
In this issue of Odds and Ends, we talk about the 777, a CNN interview with Jim Albaugh and a variety of other things.
- The future of the 777 may slip to the next decade, according to information. Boeing believes the A350-1000 will become a new airplane rather than a derivative of the baseline A350, delaying entry-into-service until late this decade. Accordingly, a move to enhance or replace the 777 currently is being thought as a project for the early 2020 decade.
- Boeing seems increasingly likely to go with a replacement for the 737 with a 2019 EIS.
- Boeing Commercial Airplanes CEO Jim Albaugh gives a short video interview with CNN in which he returns to his recurring theme that Boeing “over-stretched” on the 787. He talks about some of the reasons, and he is candid about the shortfalls over its pushing technology, the shortage of engineers and other issues. Read more
EADS releases statement at tanker hearing
Update, Jan. 28, 6:30am PST: Predictably, Sen. Cantwell wasn’t satisfied. She said the Senate Hearing didn’t get at the “core issue,” and called for an investigation by the USAF Inspector General. EADS said today that’s fine; here is Chairman Ralph Crosby’s statement:
“We would welcome an investigation by the DoD Inspector General—if such an investigation does not delay the decision on acquisition of new tankers.
“Scandal and protest have kept this badly needed system out of the hands of our service men and women long enough. We are interested in illuminating unambiguous facts, not in a tactic for delaying the decision process.”
Update, 4:30pm: Here is the archived Hearing web cast; thanks to Dominic Gates of The Seattle Times for the link.
Update, 3:45pm: Boeing delivered the first KC-767 to Italy. See the article here.
Also: While the Hearing was pretty much a sham in our view–partisans on both sides were more interested in scoring political points than in fact-finding–one thing did come out of it and that is the allegation by Sen. Maria Cantwell (D-Boeing/WA) that EADS had the data more than a month appears to be wholly unsupported. EADS received the data Nov. 1; it opened the disks that night, discovered the error and secured the disks the same night. At USAF direction, they (as did Boeing) returned the disks Nov. 8 2, during which time the relevant disk was secured.
Update, 9:15 am: Our take on the hearing:
- A lot of political posturing and little substance.
- No minds changed; Boeing partisans support Boeing and EADS partisans support EADS.
- Senators for Boeing tried to turn this into a hearing about WTO and illegal Airbus subsidies, to no avail–but achieved political points they wanted to make; but does anybody care?
- The 15 second/3 minute/15 minute issue raised by Sen. Lindsey Graham (R-Boeing/SC) wasn’t diffused by committee Chairman Carl Levin (D-MI) and could lay the ground for a Boeing protest if it loses; see Trimble’s running log and closing commentary at the end of this post.
- We watched some but not all of the hearing and frankly came away thinking there’s more smoke than fire based on what we saw–which wasn’t all of the hearing and obviously doesn’t include any of the documentation the USAF provided. But nothing has been settled and this will continue to be an issue throughout the remainder of this competition.
- More than ever, we believe the only solution is to split the contract. We firmly believe there are sound strategic and tactical reasons to do so but politically it is the only choice that has any chance of moving forward with this contract.
- Nobody seems to give a damn about the needs of the warfighter anymore; it’s solely, entirely, 100% about Boeing vs Airbus and jobs rather than the Air Mobility Command and the needs of the warfighter.
(Boeing statement follows EADS; a link to download the EADS timeline follows Boeing; and a link to FlightGlobal’s running blog follows the EADS timeline.)
EADS released the following statement to the Senate committee, chaired by Carl Levin (D-MI), hearing information about the USAF inadvertent release of proprietary information on the KC-X procurement.
The hearing was called at the request of Sen. Maria Cantwell (D-Boeing/WA).
Sean O’Keefe
Chief Executive Officer
EADS North America
Statement for the Record
To the Senate Armed Services Committee
January 27, 2011
Chairman Levin, Senator McCain, and Members of the Committee, I am pleased to provide a statement to the Committee concerning the U.S. Air Forces’ inadvertent release of Integrated Fleet Aerial Refueling Assessment (IFARA) data in the KC-X tanker procurement. The facts surrounding this incident, and the responsible actions taken by EADS North America, are straight forward and deserve to be clearly understood with full transparency. We are pleased to contribute in any way to that full understanding.