For Boeing: when one door closes, another door opens

There’s a saying that when one door closes on an opportunity, another door opens. This is the case with Boeing’s decision to proceed with a 737 re-engine. We first wrote about this in a previous post. Max-Kinglsey Jones of Airline Business picked up the theme in his recent blog.

There’s no question Boeing’s march down the path to re-engining was driven by Airbus, it was embarrassing and it was messy. Having said that, the re-engine frees resources and money to concentrate on getting the 787-9 right, launching the 787-10 and deciding what to do with the 777-300ER to meet the competition of the re-defined A350-1000.

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US airlines ready orders

There has been a rash of articles this week breathlessly focusing on US carriers and the prospect they will order airplanes this year.

This is no revelation, nor is the prospect that Boeing customers might line up and buy from another manufacturer.

We’ve written about this in the past. It appears to be time to revisit the topic.

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The GE Powerhouse and how it wins deals

Those of us who are intimately familiar with commercial aviation will find this as no news. For those who don’t deal in this business every day, this will provide a better understanding of how deals are won in aviation.

This is the story of the GE Powerhouse and how family ties combine to enable GE Aviation and CFM International to win deals that might otherwise go to competing engines.

None of what we’re about to tell you is to suggest that the GE/CFM engines are inferior (though, obviously, some might dispute this), because they are superb engines. But a telling comment came from CFM’s Sandrine Lacorre, product marketing director, who said at a UBM Aviation conference, “What we can’t do technically, we will do commercially.”

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Odds and Ends, Post-Paris Air Show 2011

Here are our closing views of the PAS:

Boeing

Boeing did very well at the show. We know the headlines almost universally say Boeing had a bad show (which it didn’t) and was trounced by Airbus (which it was), but people easily overlook comparing Boeing’s performance vs. previous air shows.

Boeing announced more than 140 orders worth some $22bn–about equal to the 2009 Paris Air Show. By anyone’s standards, this ain’t shabby. Boeing often announces low numbers at air shows, claiming it doesn’t hold orders for the shows and Airbus does. We regard this as so much poppycock, because we know customers drive announcements and both Airbus and Boeing hold announcements for air shows at customer requests.

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Odds and Ends at the Paris Air Show, Day 4

Our final Odds and Ends as we head back to Seattle Friday.

  • Marc Birtel, one of the corp-com guys at Boeing, asked us what we were impressed by at the Air Show (this was Tuesday, before the Airbus landslide of NEO orders). We must be getting too jaded or too familiar with Air Shows, because we said, “nothing comes to mind.” On reflection, these impressed us: Boeing’s display of technology in the form of the two 747-8s, a 787, a 737-700 with the Sky Interior; the ever-impressive A380 flying display; the Breitling Constellation; the Bombardier “igloo” Pavilion (well, its contents, actually) was way-cool; and of course the impressive number of NEO orders.
  • We were also impressed by the laid-back, almost shoulder-shrugging at attitude of Airbus CEO Thomas Enders. We interviewed him shortly after the press conference summarizing the best Airbus Air Show ever and the historic AirAsia order, the largest ever in commercial aviation. He seemed suitably excited in the press conference but afterward he could have been ordering a cup of coffee. (He did consent to a glass of champagne). The orders were all well and good, he said, but now Airbus had to produce and deliver them. Today’s news was already yesterday, for Enders; there were other things to be concerned about.
  • We opined over at AirInsight about the increasing nasty battle shaping up between Airbus and Bombardier.
  • See this story about John Leahy dancing to seal the AirAsia deal. CEO Tony Fernandes was very funny when telling it and words can’t do it justice. But Leahy dancing is not a vision we want to have. But it’s better than the story of his old boss, Jean Pierson, dropping his pants to seal a deal. Now that’s not a vision to go to bed with.
  • The saying is “Paris in the springtime.” We can say, “Paris in June sucks.” It rained (sometimes heavily) for three of the four days at the air show. In 2009, it was two out of four.

CSeries order intact, says Republic; CFM offered “great incentives” for engine deal

Bombardier’s CSeries order with Republic Airways Holdings, announced today at the Paris Air Show, is intact, says the company spokesman.

Peter Kowalchuk told us late Wednesday (Paris time) that there is no change in the CSeries order, despite the Airbus one announced today for 40 A320neos and 40 A319neos. First delivery, of the A319neo, is in 2016.

The first CSeries is scheduled for delivery in 2015.

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Odds and Ends at the Paris Air Show, Day 2

Odds and Ends at the Paris Air Show, Day 2

Airbus

Airbus owned the day again with a bunch of orders, including capturing a Boeing 737 operator, Garuda Indonesia. For the A320neo (In this context, we’re not counting SAS, which already operates A320s.) Up to now, Boeing has been dismissing the sales of the neo as being only to A320 airlines, as well as winning deals on price and asserting the neo only brings the airplane to “parity” with the 737-800. Airbus’ John Leahy, COO-customers, counters that airlines aren’t buying Boeing’s line and are buying the neo because it is more efficient than the 737-800. So, it would seem, lessors are also convinced. ILFC previously ordered the aircraft. Air Lease Corp, CIT Aerospace and GECAS also placed orders.

The ALC order could be considered particularly significant. Its CEO, Steven Udvar-Hazy, previously was cool to the neo and now placed a bet for 50 of them.

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Qatar’s CEO on A350, CSeries

Qatar Airways was the launch customer of the Airbus A350-1000, for which Airbus has now moved entry-into-service back from 2015 to 2017 in order to provide for a higher-thrust engine design from Rolls-Royce, increased payload and increased range.

John Leahy, Airbus COO, said Saturday at the EADS media day, that all delays for the -1000 and the -800, which is also seeing an EIS adjustment from 2014 to 2016, were “consensual” with the customers.

This makes comments by Akbar Al-Baker, Qatar’s CEO, all the more interesting. Al-Baker was at a Boeing press conference to announce the order of six 777-300ERs. In the Q&A, he was asked about the A350-1000. His response from the recording we made:

Q. How does the performance of the revised A350-1000 compare to the 777?

Al-Baker: …We have great confidence in Boeing, they have the finest products in the range of the Triple 7 type. As far as the A350s are concerned, it is still a paper airplane. The proof is in the pudding. The Triple 7 is already flying. It is doing fantastic. It is reaping us huge benefits. I would not like to talk about the Dash 1000 at the moment until I have been properly briefed by Airbus and of course I will critique that product when I have been given more details, as I do not have them. It would be unfair for me to sit her and criticize the competitor’s product, especially since we are the launch customer.

Q. I know you don’t want to talk about the A350-1000 in detail, but could you give us any reaction at all to the delay? Is that going to pose a significant problem for you?

A. Yes, we are hearing rumors that the aircraft will have significant delay. This will dent our expansion and fleet replacement program. As CEO of an airline, it would never make me happy that one of the programs we are so dependent on is getting delayed. This is very disappointing to us. We hope that the performances they are today talking about is the right information and it will do what Airbus says they are intending to do.

Qatar has also been a key target to order the Bombardier CSeries. Expectations were high at the Farnborough Air Show last year that Qatar would do so and when it didn’t, BBD suffered huge negative press. Expectations have been that the order was likely ready to go at this show. We learned shortly before the show that there would be no order.

We caught up to Al-Baker immediately after the Boeing press conference ended and had this exchange:

Q. Could tell me what your approach to the CSeries right now. It seems to be on and off, on and off, on and off.

A. No, the CSeries, we have just deferred our decision because we have so many airplanes coming one after the other within the same time, so we have deferred it. We still have confidence in the CSeries. We feel it is a very fine airplane. We have not changed our mind, we have just deferred the decision until  not too long in the future.

Q. How long? Three months, five months?

A. I don’t know. We still are quite busy with what is in the pipeline, but we are still very keen. I assure you that the CSeries is an extremely fine airplane in its category of aircraft.

Odds and Ends of the Paris Air Show, Day 1

Odds and Ends of the Paris Air Show, Day 1

The Air Show began with heavy downpour that delayed traffic and buses, but fortunately not us since we didn’t stay in the City—but rather just 5km up the road. Nonetheless, we got soaked. Yet the rains couldn’t dampen the spirit of either Boeing or Airbus—or the wiseacre at the Show who played the theme song from the old movie, “Singin’ in the Rain” during one of the periodic cloud bursts.

For Boeing, rain notwithstanding, Monday was a very good day for the company. It received 17 orders for the slow-selling 747-8 (15 from one airline), customers unidentified. Boeing also announced orders for the other 7-Series airplanes except the 767. The various order announcements may be found on the Boeing website.

Contrast this to the Paris Air Show in 2009 (Paris runs in odd years, Farnborough in even years). On the Monday and Tuesday, officials vowed the 787 would have its first flight by the end of June. On
Tuesday evening, these officials were called back to Seattle to deal with the fact the test pilots would not fly the airplane because the wing-to-body join was not up to snuff. A few days after the air show ended, the company called off the first flight, to great embarrassment. It was six months before the airplane flew.

At this air show, Boeing has one 787, two 747s, a 737 with the Sky Interior inspired by the 787 and a 777-200LR. This represents the technology The Boeing Co. is known for and the achievements that can be had.

Boeing started the air show with a bang (figuratively). The remaining days should be good as well.

Airbus

If Boeing started the show with a figurative bang, Airbus did literally. The big A380 scraped a wingtip on a building after airport controllers sent them down what turned out to be an incorrect taxiway. The A380 was beached for the first day and probably a few more. This came on the heels of the A400M scrubbing its aerobatics because another test plane had an engine problem. The best aerial display (to us, anyway) was the flight demonstration of the Breitling L-1049 Constellation.

But Airbus began with 100 orders for its A320neo from GECAS and Air Lease Corp., putting COO John Leahy well on the way toward the 600 orders for the airplane that was his goal by the end of the air show. We think it possible he’ll be much closer to 700.

Bombardier

The other manufacturer that has been in the focus is Bombardier. Following a long draught in orders, BBD racked up two in the week before the air show and a third Monday. Two of the three are Unidentified, but now BBD has 113 firm orders and almost as many options. BBD also said today’s customer will be the launch operator.

Rain, rain go away—a rail strike is coming

Buzz among journalists today is that a one-day rail strike is planned for tomorrow. Traffic to and from Le Bourget is bad enough on a good day. Rain makes it worse and a rail strike will paralyze the roads. Except for us. Taxis get to use dedicated bus lanes and we should be at the air show tomorrow in 10 minutes, strike or no strike. The US should take a cue on the dedicate bus lanes. But in typically Washington/Puget Sound fashion, nobody can make a decision let alone one in a timely fashion without some nitwit launching an initiative to reverse the decision.

AirInsight has been doing a running commentary on Monday’s air show events.

Odds and ends on the final pre-Air Show day

 Odds and Ends from the Paris Air Show

  • While an order or two are expected to come from Qatar Airways’ mercurial CEO Akbar Al-Baker, the buzz here already is that U-Turn Al may yet again live up to his nickname. It’s been widely expected that he would, at long last, order the Bombardier CSeries, but Al-Baker is renowned in aviation circles for embarrassing OEMS. He’s done it to Bombardier, Airbus and Boeing and has flipped-flopped in his praise-criticism-praise for the CSeries and the A320neo. For Boeing, it was a major embarrassment when at the Farnborough Air Show in 2008 Boeing issued a press release announcing Qatar ordered the 777 only to rescind it hours later (even though it was correct) at Al-Baker’s insistence. Neither did he show up for the 787 roll-out even though Qatar’s logo was displayed in the roll-call of tail logos and a chair was reserved with his name on it. While Al-Baker recently trashed-talked the A320neo, word now is that he will place an order for the airplane (with CFM LEAP engines, maybe?) for a new Qatar leasing company. He has been feuding with Pratt & Whitney, and if he by-passes the GTF for the A320neo, this could mean PW hasn’t bent over to his demands—and the CSeries could suffer as a result.

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