Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- The BWB has a long way to go before flying passengers, freight May 12, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 21. May 9, 2025
- Does an A220-500 need a new wing and engines? Part 2. May 8, 2025
- Embraer downplays tariff impact on 2025 results May 6, 2025
- JetZero readies effort for private equity fund raising May 5, 2025
“Earning” the right to build airplanes at Boeing
The Boeing Co. seems to be at never-ending crossroads.
The development of the 787 was to be a game-changer with an entry-into-service planned for May 2008. If this had happened on time, this innovative airplane would have set Airbus back five years and positioned Boeing to proceed with a new 737 and/or 777 years ahead of Airbus.
The 787 is a game-changing airplane, all right. But the strategic game changed in the wrong direction because of the outsourcing screw ups and mismanagement of the program. The 747-8 suffered from the trickle-down effect of diverted resources to the 787, and new airplane programs ground to a halt.
Boeing and Beyond: A KIRO News special tonight (Update)
Update, Oct. 20: KIRO will stream live the news special tonight. Here is the link, which may have other stuff until the program commences at 7pm PDT.
The show will be archived on KIRO’s Boeing page here.
KIRO TV (CBS-Seattle) will have an hour-long special about Boeing Oct. 20 with a rebroadcast Oct. 25. The KIRO press release is below the jump.
Air Force chief ambiguous on tanker selection timing
The Hill, a specialty publication reporting on matters of “the Hill,” aka Congress, reports today that the chief of the US Air Force won’t confirm selection of the winner for the KC-X program will be selected this year.
Heidi Wood, the aerospace analyst at Morgan Stanley, concluded some time ago that the selection would slip to 2011. There have been previous hints at this.
Also while we were on holiday: the Government Accountability Office rejected that final elements of the protest by US Aerospace for its late filing of a bid. We don’t think this silly proposal wouldn’t have gained traction even if the filing had been on time. This leaves Boeing and EADS as the only bidders for the KC-X.
Here is a link to a piece we did for Armed Forces Journal magazine’s October issue.
EADS reveals its analysis of tanker fuel use; says KC-45 is more efficient than KC-767
- EADS reveals its study–countering two Boeing-commissioned reports–about fuel usage of the KC-45 vs the KC-767;
- EADS says it delivers more bang for the buck than Boeing;
- Flight Global has a good story detailing some of Boeing’s KC-767’s technical specifications;
- Boeing is prepared to deliver its first two KC-767s to Italy by year-end, at long last, five years late.
After two years and two studies commissioned by Boeing promoting the KC-767 as less costly to taxpayers over a 40-year period, EADS has provided its analysis to us of the operating costs of the EADS/Airbus KC-45 tanker vs. the Boeing KC-767. The EADS analysis rebuts the two studies commissioned by Boeing in support of its tanker bid.
EADS and before it went solo, Northrop Grumman, has largely ignored the Boeing studies other than to generally dismiss the veracity of them. In doing so, both said the USAF would run its own analysis and determine the KC-45 delivered more bang for the buck, which is what happened in the 2008 competition won by Northrop. The KC-45 achieved an IFARA (efficiency) score of 1.9 vs. 1.71 for the KC-767.
But EADS and Northrop missed the point of the Boeing studies, and that was to influence Congress, not the Air Force. EADS finally got it, and released the following data.
EADS’ internal study, based on requirements and criteria in the USAF Request for Proposals, says the KC-45 will use 3% less fuel per gallon of fuel delivered on refueling missions than the KC-767 on 500nm trips and 31% less on 2,500nm trips. Thus, using USAF criteria, EADS says on a 2,500nm mission with 250 sorties, the KC-45 will save about $25.8m in one day alone, based on assumed fuel-per-gallon pricing disclosed by the Department of Defense.
Using USAF Net Present Value criteria in the RFP; 500nm increments for missions, and other factors, EADS ran several different scenarios with variable factors based on RFP criteria and concluded that mission-driven factors—and not solely training scenarios on which Boeing studies are essentially based—means the KC-45 $1.37bn to $16.5bn on an NPV basis over the 40 year life cycle.
This compares with Boeing’s AeroStrategy study that concludes the KC-767 saves taxpayers $11bn-$36bn over the same period, but not on an NPV basis.
EADS uses USAF criteria and the cost to deliver a gallon a fuel as the basis for its study compared with the Boeing approach, using commercial airline fuel consumption data filed with the US government.
The distinction compared with Boeing’s methodology is important, as we will explain. Read more
Labor at Boeing and Airbus
The Everett Herald has a series of stories today about labor relations at Boeing and Airbus. The links are below. Note: The Herald’s website is one of the clunkiest in CyberUniverse, so don’t be surprised if it is frustratingly slow.
Boeing and its unions already in negotiating stance. Be sure to watch the video on this link, and then click the link within the story for the second video.
Unions at Boeing and Airbus have much in common.
Machinists and rocky and rich history.
Washington State still ranks high in union strength.
Separately, there is this report:
KC-767 cost advantage over KC-45
Boeing has released the results of a study it commissioned on the life-cycle cost advantage of the KC-767 vs. the KC-45, this time using a firm we’ve actually heard of and greatly respect: AeroStrategy.
AeroStrategy analyzed 10 scenarios, fuel price escalation, maintenance, and a variety of other factors to conclude that over the life of the program, the KC-767 will cost $11bn-$36bn less than a fleet of KC-45s.
Boeing signs US composites tooling deal
Boeing has signed a $53m deal with Aerospace Composites & Transparencies, the California-based division of Britain’s Hampson Industries.
Aerospace Composites, which also has plants in Texas and Michigan, builds tooling for composites work. Although Hampson would not directly confirm the contract is with Boeing, a spokesperson acknowledged that several aerospace analyst reports that it is are not wrong.
The contract is believed likely connected with Boeing’s plan to expand its US-based production on the 787-9 and future airplane programs.
And speaking of advanced materials, this story discusses a variety of them. It is from the magazine Metal Miner.
787 stands down suppliers third time
Boeing has implemented its third, 30-day stand-down for its supply chain on the 787 program. Says Boeing:
As we have previously indicated, when opportunities arise we distribute flow in our production system to make the most efficient use of resources by ourselves and our global partners. We periodically align our production plans to meet adjusted customer needs, taking advantage of this flexibility in the market to further strengthen the 787 production system. This technique of balancing deliveries to most efficiently manage flow and customer requests within the production system is a common practice for our airplane programs.
A350: Development is running 6-8 months late, says a key supplier. This supplier believes there is still a chance Airbus will deliver the A350 in 2013, as promised, but it will be close.
Tanker update
It’s been a while since we’ve talked about the KC-X tanker competition, which is coming to the forefront again with the issuance of the Interim Report on Boeing subsidies by the WTO.
- Flight International has this story citing Ralph Crosby, chairman of EADS North America, talking about costs and process in the competition.
- The Telegraph of the UK has this story about the boondoggle lease deal of A330 MRTTs for the Royal Air Force. A reminder of how lease deals such as that proposed by Boeing in 2001 for the USAF (and killed because of the pricing and improprieties) can be way too costly, the UK MRTT deal is also an example of how dopey specifications can ruin a good idea. The UK DOD didn’t require combat-ready specifications (note to critics: this wasn’t an Airbus failing but a Department of Defence failing) for the MRTT. The UK situation also is indicative of old tanker-transports in need of replacement, just like the US KC-135. Most notably of the parallels is this statement in The Telegraph’s story: But in an era of budget shrinkage, how we buy equipment is as important as what we buy. The AirTanker deal is only the most obvious example of a procurement process that takes too long, costs too much and, even then, doesn’t always give us what we’re supposed to get.