Leeham News and Analysis
There's more to real news than a news release.
Oil doubles, it’s good for Airbus and Boeing
The price of oil has doubled off its low of only a few months ago, closing Friday (May 23) at around $61bbl. This is actually good news for Airbus and Boeing (and Bombardier and Embraer) as these companies struggle to protect their skyline (order backlog) over the balance of 2009 and in 2010.
Based on the forecasts that the airline industry will recover in 2010 and 2011, and on the hope that the financial markets will improve next year, Airbus and Boeing have been engaged in high-profile efforts to maintain production rates of the A320 and 737 lines in particular and the A330 and 777 lines as well.
777 answer to A350
Flight International has a May 14 story we’ve just seen (we were out of town) about Boeing’s possible response to the Airbus A350-1000. This may be found here.
The most interesting thing to us is the timeline: within three-four years after Boeing gains clarity on the A350-1000, or perhaps by around 2018-19. Or, Boeing suggested, three or four years after the A350 EIS, currently forecast by Airbus as 2013 for the -900 model (the -1000 EIS is slated for 2015 and the -800 in 2014).
787 program update
Boeing today (May 21) gave aerospace analysts an update on the 787 program at the annual investors’ day. Key points:
- There are now more engineers working on the -9 than on the -8, a major change;
- Executing the flight test program in 8 1/2 months will be a challenge;
- Resources from across the Boeing enterprise will be required to meet the flight test timeline;
- Certification with three regulatory agencies progressing well;
- There will be “bumps in the road;”
- The “sun never sets” on the 787 production system (a reference to the global industrial production system);
- The -9 will speak to the “heart of the economic proposition” of this aircraft;
- The key to the -9 is not to forget the lessons learned on the -8;
- As the market conditions solidify, we’ll be moving into the -3 (some time after -9 EIS in 2013);
- Firm configuration for the -9 later this year. Read more
Can split tanker buy save money?
Here is an interesting think piece about the controverisal proposal by some Members of Congress to split the KC-X tanker procurement between Boeing and Northrop Grumman.
Aviation Week reports the FAA has certified Boeing’s Wedgetail, the 737-based electronics airplane ordered by the Australian services. The program, which includes electronics from Northrop Grumman, is years behind schedule.
EADS surpasses Boeing
EADS, parent of Airbus, surpassed Boeing last year as the world’s largest aerospace company.
With revenues suppressed by the 57 day IAM strike, Boeing slipped to number 2 in a study of 67 companies by Deloitte.
If the name Deloitte sounds familiar, it should. Deloitte Consulting did the recent study that panned Washington State’s aerospace competitiveness, a key component in whether Boeing stays or goes in Washington. Another Deloitte firm is Boeing’s auditor. The consulting-auditor relationship led labor unions to charge the competitiveness study was tainted.
We wonder how the unions will explain away this study.
A320 v 737
We’re back from two days at Airbus for its Innovation Days presentations, and the timing couldn’t have worked out better. Less than two weeks before we attended Boeing’s 737 enhancements day, followed by the 787 update day.
Both Airbus and Boeing events were highly informative. The 737 day announced things that we wrote about in December for Aviation and the Environment: an entirely new interior, based on 787 features; making standard Required Navigation Procedures (RNP) in the cockpit—80% of customers were already adding this as an option—and aerodynamic improvements that are intended to decrease drag and fuel consumption by 1%. Also announced was the next step in engine tweaks by CFM for the CFM 56-7B. This is project to provide for a 1% improvement in fuel burn.
Enders on “internationalization”
Tom Enders, the CEO of Airbus, vowed to continue “internationalization” of its production while protecting intellectual property rights and avoiding Boeing’s mistakes with the 787 program.
Speaking to a small group of the 90 journalists attending the Airbus Innovation Days in Hamburg, Enders told us that the international plan is “strategic” and that Airbus “will do this in a responsible way.”
Airbus sees recovery in 2010
Airbus officials see a recovery in the global economy and passenger traffic next year, they said this week at the Airbus Innovation Days in Hamburg.
We were among about 90 journalists to attend the event, formerly known as the Technical Briefing and held in Toulouse.
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There was little new technically to talk about-after all, what else is there to say about the A380, A350 and A400M programs that isn’t well known? (Just a few things, which we’ll get to later.) So the news really came from non-technical items.
Boeing production cut?
FlightGlobal reported yesterday (May 7) that supplier GKN’s CEO predicted Boeing will cut production next year of the 737 to 21 a month. This would be 32%, roughly in line with a forecast made in January by Steven Udvar-Hazy, CEO of mega-lessor ILFC. He also forecast Airbus will have to do likewise.
Most people scoffed at Hazy’s prediction, including many in Boeing and Airbus, who said Hazy was talking out of self-interest. Whether he was or wasn’t, Hazy has an uncanny knack of accurately predicting things. He also predicted that cancellations and deferrals will outpace orders and so far, he’s correct about that at Boeing and pretty close at Airbus.
25 more 787s canceled
Boeing’s weekly orders update shows another 25 787s have been canceled, bringing the total net cancellations for this aircraft to 57 so far this year.
The latest customer is not identified.
Update, May 8: Our colleagues at FlightGlobal have the story of who the customer is (which is why we could not say, because of our affiliation with Flight’s Commercial Aviation Online, and we could not break the news ahead of them). We expect them to publish as early as today but more likely next week. Watch their website (or their premium affiliates or Flightblogger–we’re not sure just which entity will break the news).
As for us, we’ll be at Airbus in Europe next week getting briefings and talking with executives. Watch for periodic postings next week on no particular timetable.
Update, 9:25 AM: Flightblogger just posted.