Leeham News and Analysis
There's more to real news than a news release.
Etihad, Emirates refute charges of favoritism from government owners
Two of the Middle East’s most aggressively growing airlines said charges that they benefit from government subsidies, artificially low fuel prices, cheap airport facilities and preferential financing refuted these charges at the World Routes conference in Chicago this week.
Neither, however, addressed charges they unfairly benefit from US ExIm Bank funding, a particularly sensitive topic for Delta Air Lines which has been waging an effective campaign to cast doubt over the Depression-era institution intended to support US exports. Boeing is the largest user of ExIm financing and Emirates in particular has been an active participant in the program. Delta claims ExIm provides below-market rate fees and interest charges.
The airline industry is changing and acting like real businesses to return value for shareholders
“Our industry is changing and acting like real businesses to return value for shareholders.”
It’s a remarkable statement when you think about it. But this is how Jim Compton, vice chairman of United Airlines, led off at the World Routes conference this week in Chicago.
The US airline industry for years seemed to be operated more for market share than for profit. At least this is how many chief executive officers often characterized things until after 9/11, when US carriers wrenched through the aftermath of that horrible day. Even so, CEOs often complained there was too much capacity to allow for profitable operations. It wasn’t until after the global financial collapse of 2008 that US airlines began to consolidate, reduce flights and take capacity out of the system. Profits began to return.
Airbus critiques the Boeing 737 MAX 200
With the formal launch by Boeing of the 737 MAX 200, the 200-seat high density version of the 737-8 with an order for 100+100 from Ryanair, Airbus was quick to launch its own critique on the airplane.
Kiran Rao, Executive Vice President, Sales & Marketing for Airbus, was quick to take aim at the advertised seating capacity of the MAX 200 and at the 197 seats Ryanair CEO Michael O’Leary says will be in the carrier’s configuration.
In an interview with Leeham News and Comment, Rao said that Boeing has to eliminate too many galley carts, even at reduced food and beverage options, to adequately service passengers. One cart is needed for every 40 passengers.
Airbus could decide on A380neo within six month: Emirates’ Tim Clark
Airbus could decide within the next six months whether to re-engine the A380 with Rolls-Royce powerplants, says Tim Clark, the president of Emirate Airlines, which has ordered more of the giant airplanes than any other customer.
Tim Clark, president of Emirates Airlines. Emirates Airlines photo.
Clark, speaking to a press gaggle on the sidelines of the World Routes conference Sunday in Chicago, said a RR engine would likely be based on elements of the Trent 1000 and Trent 7000 engines on the Boeing 787 and Airbus A330neo.
Boeing’s P-8 program viewed as “model” defense procurement
The Boeing P-8A Poseidon program has been termed a model of procurement by the US Defense Department, reports Boeing program managers. It came in on cost and on time, and as more P-8s are delivered to the US Navy, the per-airplane cost is coming down—saving US taxpayers $2.1bn.
The Royal Aeronautical Society-Seattle Branch sponsored a public briefing Tuesday at the Museum of Flight at Boeing Field in Seattle at which the P-8 program was described.
Boeing 737-based P-8A Poseidon. Boeing photo.
Boeing will deliver its 20th P-8 to customers this year—the US Navy and India—in a program that eventually is expected to sell well more than 100 aircraft worldwide. The P-8, based on the 737-800, is replacing 50-year old Lockheed Martin P-3 Orions. The P-3 is based on the Lockheed Electra, a four-engine turbo-prop that entered commercial service in January 1959. The P-3 entered service in 1962, just in time for the Cuban Missile Crisis.
Stephen Tripp, P-8A Business Development Senior Manager for Mobility, Surveillance and Engagement for Boeing, spent more than 30 years in the Navy, including flying P-3s and “chasing submarines.” He joined Boeing upon retirement on the P-8 program.
“Submarine threats are not going away,” Tripp said. “China and [Russian Premier Vladimir] Putin are launching subs at a rate not seen since the 1960s.”
Alenia, traveled work contine to plague 787: Everett Herald
At a time when Boeing continues to assure Wall Street that all is well with the 787 program, industrial partner Alenia of Italy and traveled work from Boeing South Carolina continue to plague the program, according to a report from The Everett Herald.
The Herald’s report also comes on the heels of a “documentary” by Al Jazeera English calling into question the competency of the Charleston 787 plant. The documentary was widely criticized, including by this column, for its tactics.
The newspaper, which is located in the same city as Boeing’s wide-body plant, reports that barrel sections made by Alenia continue to have quality control issues, six years after production began on the composite airliner.
Odds and Ends: Delta/Airbus/Zodiac unveil A320 interior; Upgauging narrow-bodies, down-gauging 747s
A320 interior upgrade: After nearly a year of denying a story by Mary Kirby of Runway Girl Network and avoiding our own report from two years ago, Delta Air Lines, Airbus and interior OEM Zodiac revealed a new interior for the A320 family.
The announcement was made at the APEX convention by Airbus. The interior will appear beginning in Q12016, in this case in Delta’s A321ceos.
New pivot bins will be installed on the Airbus A320 Family beginning in 1Q2016. Delta Air Lines will be the first customer in the A321ceo. Airbus photo.
The overhead bins, which mimic the A350 design, are available for retrofit. Airbus says there is 10% more space compared with today’s bins.
Al Jazeera dumps “Inside Story” look at 787 documentary
Update, Sept. 15, 12:20pm PDT: We got an email from Al Jazeera America Inside Story saying that Al Jazeera English Inside Story is the one that extended the invitation to appear, not Al Jazeera America Inside Story. If you all are confused, so was I. Apologies to AJA Inside Story.
Al Jazeera America English canceled its planned panel discussion of the documentary by sibling Al Jazeera English of the Boeing 787, aired last week to withering criticism by reviewers, including this column.
AJA’s AJE’s half hour discussion program, Inside Story, was to take a free-wheeling look at the documentary. I was invited, and accepted, a slot on the panel. Even after I pointed out my scathing review, AJA AJE assured me that I was still welcome.
The program was to air Sunday or Monday this week. I received notice in a 3am email Sunday (PDT) that the program had been canceled, although no reason why was given and none was provided when I asked.
I don’t know what the real intent of the program was, though I can guess. AJA AJE was trying to get the IAM and SPEEA unions as the other panel participants, so to me it smelled of validation of the documentary rather than an independent discussion. I have no way of knowing whether the unions accepted or declined and the program was canceled for lack of participants or whether it was canceled for other reasons.
Update, Sept. 15, 8:00 am PDT: AJA AJE says the news director concluded there had been enough coverage of the Boeing story and decided to move on.
However, I had my talking points ready. Here’s what I would have said had the program proceeded: