Airbus A400M program in doubt: report

Just so readers don’t think Boeing is the only one with problems, Germany’s Der Spiegal reports things may be going far south with the Airbus A400M. Here’s their report, via Business Week.

Boeing: 2010 production cut possible

James Bell, the CFO of The Boeing Co., appeared today at a Cowen & Co. investors conference. Here is a synopsis of his presentation, as he gave it. The third bullet point refers to potential production cuts in 2010.

  • This is one of the toughest commercial and financing markets we’ve ever seen.
  • 2008 challenging: progress made, but outweighed by IAM strike and financial markets.
  • 2009: expect up to $68bn in revenue as return to full production rates (from the IAM strike.) We still think stable production rates for commercial are appropriate, based on conversations with customers, strike-adjusted schedules. 2009 financial guidance assumes may have to make modest schedule adjustments starting in 2010 [NOTE: this statement is more definitive since the earnings call last week–see our additional comment at the end of this column]. (No detail on possible production rates was provided.)
  • If network carriers don’t start taking delivery of new airplanes in next several years, they will face unmanageable fleet replacement in the middle of the next decade.
  • Productivity on mature programs: 737 has been on Lean track for years, 777 improved by 20% with more improvements possible.
  • Boeing Capital Corp. believes it has adequate sources to support airplanes in 2009 from diverse sources. BCC will be financing in 2009, the first time in several years. We assume BCC will finance $1bn this year, issuing debt to cover a large portion of this.
  • Defense: International markets provide significant growth opportunities from 14% of revenue in 2008.

Q&A begins:

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LCAL Cancels 787 order

Also see the Updates after the jump.

LCAL, based in Dubai, has canceled 16 Boeing 787s, it has now been confirmed. This is the cancellation we wrote about on January 14 and hinted overtly about in this post.

LCAL canceled 16 of the 21 787s it had on order.  Five of the aircraft were under contract to be delivered to Royal Jordanian, and these remain on the books to be delivered directly to the airline, we understand.

While the number of cancellations isn’t a “wow factor,” what is especially significant here is that LCAL was formed for the express purpose of being a 787 lessor. Because of the 787 program delays, canceling the order puts LCAL out of business, if the Royal Jordanian aspect of this is confirmed. (We’re working on that.)

We understand that penalties paid by Boeing, based on the delays, to LCAL are significant. Boeing attributes the cancellation to “tough challenges” and “other factors;” we understand this is really about the delays to the 787 program.

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Assessing the 747 program

Since Boeing’s earnings call last week, spurred on by the Flight International and Everett Herald stories doubting the future of the 747-8 program, we’ve received media inquiries whether we think the program will be canceled.

For those who missed or already forgot our first post of 2009, the answer to this is No. We called 2009 the year of program recovery for Boeing, and this included then and includes now the 747 program. Nothing has happened to change our view.

Our post earlier this week, Keeping or Ditching the 747?, added some color and independent reporting to the stories in Flight and The Herald. We reported–as did Flight–that Boeing has run various scenarios about what to do with the program: cancel it entirely, or keep the freighter but cancel the passenger model, or slow the program down.

For those who understand Boeing’s way of doing things, running all scenarios is SOP, Standard Operating Procedure. For those who understand Boeing CEO Jim McNerney, he’s going to want all options laid out for him. This is his SOP.

Word of these studies quickly became known.

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Ryanair and a GTF-powered A320/737

Jon Ostrower has an interesting think piece about the prospect of Ryanair ordering up to 400 Airbus A320s or Boeing 737s powered by the new Pratt & Whitney GTF, or Geared Turbo Fan P1000G.

We first broke the story that Boeing is evaluating the prospect of 737 “re-generation” for an article we did for Aviation and the Environment magazine. P&W is developing the engine for Mitsubishi’s MRJ regional jet and Bombardier’s CSeries, but both airplanes are small. The MRJ seats 70-90 and the CSeries 110-149, but the MRJ has only one order in Japan and the CSeries continues (at this writing) to be stillborn. P&W has been developing the GTF for 20 years; without re-engining the A320 or 737, this investment is pretty much down the drain.

With Boeing and Airbus seemingly putting off a full replacement airplane for their prime jets until around 2020 or even later, airlines–notably Southwest–want a more fuel efficient airplane before then. The GTF would save 12%-15% on fuel burn. As we wrote for AE magazine, Boeing is on track to make some decisions for a 737RG this year with a prospect for an EIS in the 2013-15 period. This is a timeframe P&W can meet to provide the GTF to Boeing.

Airbus, of course, provided an A340-600 test bed for P&W to get some good data for the GTF. This information went to Airbus’ R&D department, where evaluation of a GTF A320 is almost a certainty.

Or not. James Wallace of The Seattle Post-Intelligencer reports that Airbus super-chief John Leahy says there aren’t any talks going on with Ryanair.

FAA weighs in on 787 flight test timeline

Update, Feb. 8:

The Puget Sound Business Journal has this article focusing on the certification timeline.

Original Post:

Boeing has publicly said that it plans a flight test timeline of 6-8 months, depending on when Boeing was making its public statements (it’s been a bit of a moving target). The latest information appears to be an 8 month timeline.

Boeing forecasts making its first flight of the 787 in the second quarter; its internal timeline was about April 20 or 24 (first reported by Air Transport World) but we understand this is now a To Be Determined date, with an internal timeline in June–still within the second quarter, it must be noted. (We previously predicted a first flight in the June-August period, and are at the moment sticking to this.)

All Nippon Airlines, the launch customer set to receive the first airplane, said it expects delivery in February 2010. This reaffirms the anticipated eight month flight test forecast made by Boeing, assuming a June first flight. If the first flight comes as late as August, a February delivery to ANA still is theoretically possible if a six month flight test program can be achieved.

As we previously reported, Boeing has reorganized its flight testing department with the intent of increasing manpower and efficiencies. Full implementation isn’t expected until September, about mid-way into the currently projected 787 flight testing timeline. This suggests the 787 flight test program may partially benefit from the reorganization.

As many have written, previous Boeing test programs have taken 11 months or more and aerospace analysts seem fairly well united in predicting a year-long flight test program is more realistic for the 787 than that suggested by Boeing. So we asked the Federal Aviation Administration what it thinks about the timeline. Here’s the answer.

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US 1549

New York magazine has a good article that starts with US Airways 1549 and continues for five URL links discussing a variety of pilot-emergency handlings. It’s a great piece and the starting URL link is here.

Keeping or ditching the 747-8?

When Boeing CEO James McNerney gave a somewhat mixed assessment of the 747-8 program last week during the earnings call, this set off a couple of key stories about the future of the airplane.

Michele Dunlop of The Evertt Herald wrote this interesting piece, published today. Max Kingsley-Jones of Flight International beat her to the punch slightly with this story on Saturday.

As readers know, we’ve been closely following the 747-8 development for more than a year and were the first to report that delays were likely.

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Why Airbus nixed AF One bid

Seattle Times columnist Ron Judd got the real reason why Airbus parent EADS said no to bidding on Air Force One:

“Airbus backed out only after the US government failed to qualify for financing.”

FAA responds to 787 fastener issue

When we were preparing our report about Boeing planning to operate its 787 flight testing program with some non-conforming fasterners still installed on the first six test aircraft, Boeing responded to our inquiries by noting that it worked with the FAA to ensure compliance with rules and safety.

In a routine action, we also inquired of the FAA. This was January 13; we published our story January 25, still awaiting the FAA response. We received that response today. Here are the questions we posed and the FAA’s answers:

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