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 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
DOD to EADS: You’ve got 60 days
Update, April 1, 0800PDT: Boeing just issued this statement in response to the DOD announcement yesterday:
ST. LOUIS, April 1, 2010 – The U.S. Department of Defense on March 31 said it will extend the deadline to receive proposals in the U.S. Air Force KC-X Tanker competition from May 10 to July 9 if European Aeronautic Defence and Space (EADS) makes a formal request for an extension. The Boeing Company today responded with the following statement:
“We are deeply disappointed with EADS-Airbus efforts to further delay this vital warfighting program and tilt the U.S. procurement process in its favor. EADS-Airbus has been fully engaged in the competition for four years and was always expected to provide the vast majority of its team’s work content.
“We welcome the denial of EADS’s repeated requests to alter U.S. warfighting requirements, and we support the Air Force’s stated intent to provide a level playing field for qualified competitors. We do not see a legitimate reason for EADS’s bid deadline extension request, and we believe an extension that favors any individual competitor does not further the goal of ensuring fair competition.
“Boeing remains fully prepared to submit a competitive proposal by the May 10 deadline originally set by the Air Force. However, this latest development, along with the World Trade Organization’s recent final ruling that Airbus has been heavily and illegally subsidized for decades, requires Boeing to review all of our options for going forward while we wait for a final determination on a deadline extension.”
Original Post:
DOD just announced that it will extend the deadline from May 10 for 60 days to July 9 in order to give EADS the opportunity to submit a bid for the KC-X contract. This is contingent upon EADS notifying the Pentagon of its intent to bid.
EADS hoped for 90 days.
The Pentagon will compress its evaluation schedule to stay on its delivery date timeline for an early-fall contract award. No changes will be made in the RFP. The Pentagon also rejected questions whether political interference was involved.
Financing airplanes in 2010
Geneva, Switzerland: During the Aircraft Finance and Commercial Aviation Conference, we filed a couple of stories in aircraft finance with Commercial Aviation Online. Since CAO is a paid subscription service, our arrangement with CAO is that it gets exclusive use for a few days before we can post the stories here.
The stories are below the jump. In them, we report what panelists had to say about the “funding gaps” in 2009 and 2010 and about aircraft values.
Get over it and move on (Part 2)
A flurry of activity has been happening on the air force tanker front while we’ve been in Geneva, Switzerland, (working, not playing). Unfortunately, we think the activity has all been rather sad.
In the aftermath of the World Trade Organization issuing its final report on the US Trade Representative complaint about illegal subsidies to Airbus, the anti-Airbus crowd has once again seized on this issue to attack the new reports that Airbus parent EADS is now likely to bid on the KC-X contract against Boeing’s KC767NewGen.
EADS: decision within days on tanker
Update, March 29: Airbus CEO Tom Enders now says a decision will be made in two-three weeks.
Original Post:
Geneva, Switzerland: EADS will decide within days whether to pursue a bid on the KC-X tanker program, this column has learned.
The Pentagon has yet to officially decide whether to grant a 90 day extension so EADS can be fully briefed on what is necessary to make a bid, something that Northrop Grumman had previously done as the prime contractor. EADS needs to be brought up to speed on everything Northrop learned during the previous effort to bid on the tanker.
Day 2 from Geneva
The second day at the Aircraft Finance and Commercial Aviation Conference in Geneva, Switzerland, covered a lot of ground but the most interesting for our readers is the skepticism over the prospect of re-engining the Boeing 737 and Airbus A320 families.
Potential buyers are anything but convinced this is the way to go. They look at the unknown capital cost, the new costs associated with maintenance, inventory and other factors, and have yet to be convinced that the net-net fuel savings will be sufficiently large to offset the added costs.
Air India’s 787 penalty payment, 787 vs A330 efficiency
This article from India has an interesting reference to the penalties paid to Air India by Boeing (and what the airline originally wanted) for the delays of the 27 787s on order.
The article also notes that Air India’s analysis is that the 787 is 17% more fuel efficient than the A330.
Configuration details on KC-767 emerge
As the world waits to see whether EADS will join with a new partner and pursue a KC-X bid after all, we’ve obtained some new information about the configuration for the Boeing KC-767.
Boeing’s press announcement and illustrations that it will offer the KC-767 left unanswered some questions, so we posed several to Bill Barksdale, Boeing’s tanker spokesman. Below is the email exchange.
EADS may bid for tanker after all
Update, Mar. 19, 230PM PDT: Just when you thought this couldn’t get any weirder, Russia announced it plans to submit a bid to the KC-X, according to The Wall Street Journal:
By PETER SANDERS
In another twist to the ongoing saga to replace the Air Force’s aging fleet of aerial refueling tankers, United Aircraft Corp. of Russia is planning to bid on the $40 billion contract, according to a person familiar with its plans.
United Aircraft, an aerospace consortium owned by the Russian government, will seek to offer a tanker version of its Ilyushin Il-96 wide-body jetliner, dubbed the Il-98, this person said. The planes would be largely built in Russia, and assembled in the U.S., this person says. United Aircraft will partner with a “small U.S. defense contractor,” which will be renamed United Aircraft Corp. America Inc., this person said, declining to name that contractor.
Update, Mar. 19, 600AM PDT:
DOD says it might extend the deadline for submitting a bid so EADS can do so if it wants. Here is one story.
Update, Mar. 17, 900AM PDT:
This AP story cites EADS ambitions in the US, but buried toward the bottom is a new statement from EADS CEO Louis Gallois and EADS North America Sean O’Keefe about the prospect of EADS submitted a bid for the KC-X. Here is the excerpt:
Earlier this month, EADS pulled out of bidding for the Pentagon refueling tanker contract, saying a smaller plane offered by rival Boeing Co. appeared to be the front-runner. EADS, which had partnered with Northrop Grumman for the 179-tanker order, has criticized the contract as anticompetitive.
“The U.S. Air Force will not have the most modern, most capable airplane,” Gallois said. “It’ll be the first time the British, the Australians have a better airplane than the Americans.”
Gallois said it’s unlikely that EADS will submit a new bid for the tanker contract.
Instead, EADS will move to make other deals in the U.S. Building its presence here through acquisitions may bolster its case when bidding for national defense contracts, but “that would not be the objective,” said Sean O’Keefe, CEO of EADS North America.
But: comments added in our Comment section after the above posting suggest that EADS is still considering a bid if the deadline to do so is extended, and DOD might.
Won’t this ever go away?
Update, Mar. 16, 830AM PDT:
Airbus received EASA certification for the A330MRTT. Here’s an excerpt from the Bloomberg story that moved just a short time ago:
Airbus Tanker Gets Civil Certification From European Regulator
By Andrea Rothman
March 17 (Bloomberg) — European Aeronautic, Defence and Space Co.’s Airbus unit won civil certification for a military tanker version of its A330, putting the plane a step closer to maturity before it enters service in Australia by year-end.
Certification from the commercial aviation regulator, European Air Safety Agency, means handling qualities of the plane and on-board systems correspond to civil certifications, which are more stringent than military requirements. Besides refueling other planes in mid-flight, the A330 tanker could carry as many as 300 troops.
EASA’s approval is the first civil certification ever extended to a tanker and transport aircraft developed in Europe.
Update, March 15, 300PM PDT:
Richard Aboulafia has a particularly entertaining commentary in his latest monthly newsletter.
He also has a more prosaic but thoughtful commentary here.
Update, March 15, 900AM PDT:
This news report out of Europe updates the situation, in typical military fashion: Hurry up and Wait.
Original Post:
Information is coming out late today (March 12) that EADS may try and bid for the KC-X tanker contract after all. The Pentagon may extend the deadline for bidding to accommodate EADS, George Talbot of The Mobile Press-Register tells us. He will be posting his own story at www.al.com shortly.
Here are the stories: