Airbus cleared the air about the A330neo, which we concluded was a must last December, and made the 2014 Farnborough Airshow go off to an exciting start. A lot has been speculated about the A330neo, and in the end it did come out a bit stronger than what most had anticipated. Some of that is marketing but a lot is real, and here we give a first assessment of what was launched.
Let’s start with the specifics as given by Airbus and Rolls-Royce today in presentations and discussions. Here are the A330-800neo and -900neo’s main features: Read more
AirAsiaX orders A330-300s: As forecast earlier this week, the budget carrier ordered 25 Airbus A330-300s. According to reports, AirAsiaX may not be done. Group CEO Tony Fernandes wants Airbus to develop an A330neo. Stay tuned.
Washington State and Airbus: The Associated Press wrote a story about the courtship of Washington State of Airbus, making a link between the Boeing 777X site selection Schizophrenia and the Airbus effort. Some headline writers made an even more direct cause-and-effect link. This vastly overstates what’s been going on. Gov. Christine Gregoire began reaching out to Airbus in 2010, but the effort was stalled by the then-contentious and bitter competition between Boeing and Airbus over the USAF KC-X tanker competition. Gregoire, who was just named chairman of the advisory committee to the US Export-Import Bank, naturally backed the Boeing bid but was wisely measured in her rhetoric when it came to the EADS KC-330 offering. The Washington Congressional delegation, however, was often vitriolic and as a result, Gregoire’s efforts largely stalled.
Once that competition was over in 2011, Gregoire resumed her efforts in the last year of her governorship, meeting with EADS and Airbus officials at the 2012 Farnborough Air Show. The WA Dept. of Commerce had continued efforts throughout. This past summer, Commerce and the Pacific Northwest Aerospace Alliance hosted an Airbus suppliers meeting in the Seattle area, attended by about 120 suppliers (about 30-40 had been expected).
So while the AP story is factually correct overall, any linkage to 777X and the Airbus courtship is overstated. This has been a long-term effort by Airbus, PNAA and it is a concept we called for in October 2009 in a speech before the Governor’s Aerospace Summit just days before Boeing announced it was locating 787 line 2 in Charleston (SC). The Airbus effort, if anything, has more of a link to that event than to the 777X.
Boeing names Muilenberg COO: Dennis Muilenberg, CEO of Boeing’s defense business, has been named COO of The Boeing Co. He is succeeded by Christopher Chadwick. Ray Conner, CEO of Boeing Commercial Airplanes, was named Vice Chairman of the Board and continues in his current position. The press release is here.
McNerney reaches retirement age next year but given the timing, we think he’ll stick around a bit longer to give Muilenberg more time in the #2 corporate position. Since Muilenberg is younger than Conner, we think Muilenberg is the more likely choice for successor.
Another Day, Another 777X story: The obsession continues. Seattle Times columnist Danny Westneat has this commentary worth reading. The Everett Herald has a good wrap up of where things stand in Washington State right now. The Seattle Times looks at Long Beach (CA) in depth and its potential for the 777X.
From EADS’ Investors Day 1: Airbus parent EADS is having two days worth of briefings for aerospace analysts. Here’s initial news coverage from Day 1:
Reuters: EADS strategy stresses Airbus
Illinois and 777X: Add the Prairie State to those submitting bids to Boeing for the 777X assembly site. Illinois was previously not included in any list that we saw.
Air Canada: The airline’s Board of Directors meets today to ratify staff recommendations to replace the Airbus A319/320/321 fleet. Airbus and Boeing are competing with their A320neo and 737 MAX families. This competition is said to be only for the 150-200 seat sector. A separate decision for the 100-149 seat sector is expected to come next year. Bombardier hopes to win that part of the deal.
Update, 10:30 PST: The Wall Street Journal says Air Canada and Boeing are negotiating a deal for 50 737 MAXes.
Update, 11:15am PST:
LOT gets $33m from Boeing: Reuters reports that LOT Polish Airlines will receive $33m from Boeing for the 787 problems. Payments will be in cash, the news agency says.
Bombardier scored a huge deal at the Russian air show, MAKS, with a letter of intent for an order for up to 100 Q400 turbo-props.
The Q400 has been trailing rival ATR, which is half owned by Airbus parent EADS, for the ATR-72 turbo-prop, by a wide margin in recent sales. ATR recently obtained third-world, gravel runway certification for its airplane.
The BBD deal includes the potential of establishing a second Q400 assembly line in Russia. The BBD deal is for 50+50 and isn’t expected to be completed until next year.
Bombardier has been making a major effort in Russia, placing used CRJ regional jets there, previous orders for the Q400 and an order for 32 CSeries. It’s also signed an agreement to explore customer support services for the Irkut MC-21 150-212 seat mainline jet.
Other MAKS news:
The move to drop the acronym EADS for Airbus Group is being made out by some media to be a major step that better positions Airbus to compete with Boeing. This is a stretch.
The name change simply reflects reality: Airbus is the dominate member of the company. It also does away with the acronym, which many people mispronounced as “eeeds” rather than how it was supposed to be said (E-A-D-S, like I-B-M) that reflects an awkward name, European Aeronautic Defense and Space, a name so awkward it doesn’t readily appear on the EADS website.
A name change has really been thought about for years. On one trip to Toulouse, in 2009, we had a discussion then with Airbus personnel and the topic came up. We favored the Airbus name for the enterprise then–not that our opinion had anything to do with the action four years later :-).
More significant is the continued direction by CEO Tom Enders to move away from the government influence that first was instrumental in the growth of the enterprise but then became an albatross with jobs and prestige programs trumping business decisions (think A400M engine, the A380 [the product of 747 envy] and assembly locations). The volatile topic of government subsidies, necessary in the beginning and conceptually little different than the early days of US defense and commercial aviation, evolved into “reimbursable launch aid” that is unnecessary for a company like Airbus and which remains a target of international controversy when politics arise.
We welcome the change and the continued evolution of Airbus into a true commercial enterprise. Tom Enders will leave a legacy that will make him one of the most significant figures in global aerospace.
Meantime, EADS today announced its first half financial results.
“One Boeing” is the strategy that blends all the company enterprises–Boeing Commercial, Boeing Defense, Boeing Commercial Aviation Services and other business units into a single set of resources rather than operating as solo businesses.
The P-8A Poseidon program is just such a blend. Using the commercial 737-800 as the platform with the 737-900ER wing, Commercial and Defense integrate the technologies of the two units and assemble the P-8A in what is actually the third 737 production line.
The US Navy has plans to acquire 117 P-8As to replacing the Eisenhower-era Lockheed P-3 Orion. The P-3 and the P-8 has a primary mission of anti-submarine patrol but the airplanes are increasingly being used for maritime patrol in a variety of countries for fisheries, immigration and more recently anti-piracy surveillance.
India ordered eight. Boeing sees a potential market for more than 150 more with countries now flying the P-3.
The Poseidon’s One Boeing approach was copied for the re-bid of the USAF KC-X tanker competition. The original platform, the KC-767 International program, was largely a Boeing Defense effort. The KC-767I, which involved taking a commercial 767-200ER and converting it to a cargo aircraft at Italy’s Alenia and finishing it out at Boeing Wichita, was a disastrous effort. Boeing pulled the work back from Alenia and design and flutter issues caused the program to be several years late to customers Italy and Japan. Only eight were built.
In the re-bid against EADS, BCA and BDS joined forces in an effort patterned after the Poseidon project. Boeing won with a bid that was 10% below EADS. So far, the USAF reports the project is going according to plan.
Boeing is now talking with customers to sell the KC-46A tanker outside the US, which was always part of the plan, according to this Bloomberg article. The platform, called the 767-2C, is about six feet longer than the 767-200ER but shorter than the 767-300ER. Air Force officials were quoted in trade press that commercial cargo versions could be offered, but nothing has been said about this prospect since.
However, we understand that Boeing is nearing a commercial order from FedEx for the -2C that will enable Boeing to boost production of the 767 lines to as much as 2.5 aircraft per month by October 2016.
Isaac Alexander (@jetcitystar on Twitter) provided us with the following so you can follow the latest at next week’s Paris Air Show. He has his own blog with an addiutional list of companies.
From Isaac: Here is a list of micro-news sites for the 2013 Paris Air Show. This will be the 50th edition of the event. If you know of a company or press website that is not listed below, please contact me by Twitter at @JetCityStar, or by email at firstname.lastname@example.org. This page will be continually updated during the event.
Beginning in 2007 and for the next six years, it was trials and tribulations for The Boeing Co.
The 787 program was years late, billions of dollars over budget and the first commercial airliner produced by Boeing that was grounded.
The Queen of the Skies, the 747, has largely become morbid-bound in its latest iteration, which was also years late and well over budget.
The KC-767 International Tanker program became an embarrassment, also years late, over budget and beset by design issues. This program in disarray was weighed by the USAF as a risk factor that played a role in selecting the Northrop/EADS KC-330 in the first round of competition to recapitalize the KC-135 fleet.
In a huge embarrassment, Airbus skunked Boeing over the entire single-aisle re-engine vs new replacement issue, swept in an won a big order from American Airlines and forced Boeing into a highly awkward co-press conference to launch the MAX at American in which former BCA CEO Jim Albaugh looked like he had just swallowed four or five lemons.
It continued: The A320neo is far outselling the 737 MAX and Airbus has co-opted a number of previously exclusively Boeing customers.
Readers know we’ve been pretty hard on Boeing throughout many of these issues, and we’re inherently skeptical. So when we now conclude that Boeing at long, long last is back on track and picking up speed, we’re not simply sniffing kerosene.
EADS reported its first quarter earnings and in the process reiterated plans to fly the Airbus A350 in June.
Speculation remains rampant that Airbus will fly the airplane in time for the Paris Air Show.
Meantime, sales for the giant A380 languish, with open delivery slots in 2015–the year Airbus has said the program will break even. Like the rival Boeing 747-8I, sales of the Very Large Aircraft have stagnated while sales of the Big Twin engined airplanes have flourished. Airbus, like Boeing on the 747-8, took a huge write off years ago on the A380 program.
Airbus is sticking with its 20 year forecast of 1,300 VLA Passenger sales for Airbus and Boeing, and officially expects to capture 50% of the market. We’ve believed the forecast to be, kindly, optimistic. But the A380 has nearly 90% of the VLAP market and we expect this to remain the case. Airbus might reach its goal of 650 sales over 20 years, but even this is likely to be generous. This are new sales on top of the 272 already sold.
In a lawsuit between Rolls-Royce and Pratt & Whitney a few years back, it was revealed Airbus expected 630-650 program sales, which means about 42% of the sales have already been reached. (It took Boeing nearly 40 years to reach 1,300 747 sales, and for a time the 747 held a monopoly in the “jumbo jet” market). No orders for the A380 have been booked so far this year.
Tanker-like Redux: As you read this story, it sounds a lot like Boeing vs EADS, right down to the build-it-in-the-USA element.
Ryanair’s 200 737s: News emerged that Ryanair will firm up an order soon for 200 Boeing 737s. This has been hanging “out there” for some time. We learned of this likelihood a couple of months ago. It was all hush-hush while Ryanair took another run at Aer Lingus.
Pan Am landmark: For those filled with nostalgia, this news is sad: the famed Pan Am Worldport faces the wrecking ball.
New Winglet use: This is pretty cool. Via Steve Trimble of Flight Global.