Boeing’s WA ‘exodus’: Three key leaders in Washington State responded to the drumbeat from State. Sen. Mike Hewitt (R-Walla Walla) that Boeing is in an “exodus” from Washington. Read the article here.
We agree that the use of the term “exodus” is overblow, as we wrote in previous articles here, here and here. We also believe that the greatest threat to Washington’s future in aerospace is when Boeing designs clean-sheet replacements for the 777 and 737, as which point we think there is a real chance these new designs will be built at Boeing’s growing Charleston (SC) complex.
But this bickering between Hewitt, on behalf of the the State’s Republican party, and the Democrats gets Washington nowhere.
At least the Democratic gubernatorial administration has come up with a plan for Washington’s aerospace, although we’ve noted we think it falls short of being bold and innovative. Hewitt and the Republicans haven’t come up with anything except criticism.
The State is undertaking two more studies (on top of at least four we can remember) to come up with ideas about what needs to be done. There are several industry organizations and experts that could be tapped to provide ideas, which the state is not using: the Pacific Northwest Aerospace Alliance, the Pacific Northwest Defense Coalition and INWAC in Eastern Washington, just to name three. The state-appointed Washington Aerospace Partnership doesn’t have a single industry representative on it, which is astounding, but it could come up with suggestions for economic development since the membership is overly weighted with these organizations.
Let’s stop the bickering, roll up the sleeves and get to work coming up with a forward-thinking, bi-partisan aerospace plan for Washington.
CSeries Competition: The Puget Sound Business Journal has this article looking at the competition the Bombardier CSeries will give the incumbents.
Meanwhile, Bombardier has undertaken low-speed taxi tests for the CSeries. This is, of course, a prelude to first flight.
A380 deployments: This article goes down the list of Airbus A380 operators and how the aircraft are deployed and configured.
Boeing raises prices: Boeing hiked the list prices slightly of its commercial airplanes. Here is a report comparing Boeing’s new prices with Airbus.
Posted on August 19, 2013 by Scott Hamilton
Lorenzo supports AA-US merger: In a radio interview with Bloomberg news, Frank Lorenzo supports mergers in the US airline industry and the proposed one between American Airlines and US Airways. Lorenzo is the former CEO of Texas Air Corp, and Continental Airlines. Lorenzo said labor, shareholders and stakeholders would lose if the Department of Justice prevails in its effort to block the merger.
DOJ lawsuit might impact Bombardier: An analyst for a Canadian investment bank thinks the DOJ lawsuit could delay an order by American to replace some of its regional jet fleet. The Scotia Capital analyst covers Bombardier, so his focus is on the impact to this company but Embraer is competing for the business, too.
93% Airport Concentration: While DOJ whines about the prospect of the New American Airlines controlling 69% of the slots at Washington Reagan National Airport, the Dallas Morning News cites a report that 93% of the airport traffic at three airports is controlled by the combined Southwest Airlines-AirTran company.
Our own Milestone: Today we surpassed one million views in a single year, running about 55% YTD ahead of last year.
Posted on August 16, 2013 by Scott Hamilton
Note: Some articles of interest:
The lawsuit filed by the US Department of Justice against the proposed merger of American Airlines and US Airways reads more like a political document than a legal brief.
It’s clear the true intent is to force American and US Airways to divest slots at Washington Reagan National Airport. But in throwing in the proverbial kitchen sink, DOJ has made a mockery of its own case.
DOJ claims more than 1,200 city pairs will be adversely affected by the merger, with most of these being connections since the non-stop overlapping routes number only about a dozen.
But lots of the city pairs cited by DOJ are pretty obscure. Just to pick a dozen examples:
DOJ Examples of Connecting Routes | |
1 | Austin, TX-Palm Springs, CA* |
2 | El Paso, TX-Kahului, HI |
3 | Columbus, OH-Fresno, CA |
4 | Des Moines, IA-Kahului, HI |
5 | Kapaa, HI-Tucson, AZ |
6 | Albuquerque, NM-Salinas, CA |
7 | Albuquerque, NM-Kapaa, HI |
8 | Charlotte, NC-Grand Junction, CO |
9 | Charlotte, NC-Durango, CO |
10 | El Paso, TX-Salinas, CA |
11 | Charlotte, NC-El Paso, TX |
12 | Harrisburg, PA-Fayetteville, AR |
Some of the cities listed in the DOJ complaint (like Salinas, CA) aren’t truly served by airlines but rather by nearby airports (in this case, Monterey (CA). In another, Palm Springs (CA) is actually shown in the complaint being served by Riverside (CA). DOJ seems obsessed with city pairs involving Kapaa (HI) and El Paso (TX). Figuratively speaking, the three people per year flying between some of the city pairs cited by DOJ are really going to drive the market (queue the sarcasm).
DOJ appears to be really stretching in its attempt to make an anti-trust case.
DOJ’s lawsuit is replete with uninformed and ill-informed assertions that in aggregate make it clear the department simply doesn’t understand the dynamics of the airline industry.
Posted on August 15, 2013 by Scott Hamilton
Secret 777X Plan: The Seattle Times reports that Boeing has some secret planning underway for assembly options for the 777X. This involves increasing the automation on the assembly (and thereby reducing manpower) and increasing the production rate to 10 or 12 a month, according to Dominic Gates’ story. This rate is still below the ultimate target of 13/mo Airbus has in mind for the A350, up from the announced 10/mo. And Airbus is considering yet a second assembly line for the A350, though it is unclear if Line 2 would be for the incremental 3/mo to 13 or more than 13.
The increased automation described by The Times, and the manpower-automation trade off, sounds very similar conceptually to the robotic process Boeing uses to paint 777 wings. In pre-Paris Air Show briefings, Boeing addressed the manpower issue. What jobs were lost to painting were shifted elsewhere as production of the 777 ramped up to the current 8.3/mo. According to The Times article, increased production of the entire 777X line would offset jobs lost to automation.
IAG goes with Airbus: In another huge order, assuming all options are exercised, Airbus scored a big win with the parent of British Airways, Iberia and Spain’s Vueling (an LCC), IAG, for up to 220 A320ceo/neos. Bloomberg has the details.
Posted on August 15, 2013 by Scott Hamilton
The US Department of Justice’s lawsuit to block the merger of American Airlines and US Airways displays a concern that comes a little late.
As far back as the Reagan Administration, DOJ had ample opportunity to take aggressive action to block mergers. It’s concerned now about hub concentration? The Northwest Airlines-Republic Airways merger eliminated competition at the Detroit and Minneapolis hubs, where both carriers competed. The TWA-Ozark merger eliminated Ozark’s hub at St. Louis.
The new American would control 69% of the slots at Washington Reagan National Airport, and this is a concern? Consider:
And so on.
There are actually few directly overlapping routes and no competitive hubs between US Airways and American.
DOJ is concerned about job losses? Even the unions support this merger.
DOJ is concerned about the effect on consumers? Welcome to the club. All the previous mergers mentioned above were detrimental to consumers, but these cleared DOJ.
If United-Continental and Delta-Northwest were OK, this merger is, too.
Posted on August 14, 2013 by Scott Hamilton
Hazy on the 787-10: Steven Udvar-Hazy, CEO of Air Lease Corp and one of the most influential persons in the aviation business, weighs in on the versatility of the Boeing 787-10 in this Aviation Week article. Hazy and ALC were on the industry design team Boeing consulted during the discussions leading to the launch of the aircraft at the Paris Air Show. Originally Boeing planned a range of about 6,700 nm. Hazy constantly urged a range of 7,000 nm. This article gives an insight into Hazy’s overall thinking.
Turboprops: It’s a small market but five companies/countries are looking at whether to build the next generation of turboprops, as reported by Aviation Week.
Posted on August 13, 2013 by Scott Hamilton
The Chinese government and airlines have very few orders for the re-engined Airbus A320neo family and Boeing 737 MAX. There are no identified Boeing 737 MAX orders in China and just 19 A320neos.
There are 197 Unidentified MAX orders, some of them rather large. China in the past has placed large Unidentified orders with Boeing that remained so categorized for years, but there is no way to tell if this is the case right now.
Nor has China placed any orders for the Bombardier CSeries despite growing commercial ventures between Bombardier and the C919 developer, COMAC.
Posted on August 12, 2013 by Scott Hamilton
SuperJet 100: This airplane, which is basically the old Dornier 728 jet design, was supposed to be Russia’s leap to western standards. It hasn’t worked out that way, according to this article.
Cell Phones on Airplanes: There continues a debate over whether cell phones really have to be turned off for take-off and landing. This finally explains the technical issues of the cell phone and other electronic devices.
787 Real Time Monitoring: NPR (the national public radio in the US) has this report about Boeing’s real-time monitoring of the worldwide 787 operations.
Crikey: The ever-direct (and cranky) Ben Sandilands weighs in on the Airbus-Boeing advertising tiff.
Posted on August 8, 2013 by Scott Hamilton
The Puget Sound Business Journal reports that a Boeing exec says the US Export-Import Bank is necessary to help finance Boeing aircraft so free cash flow can go toward R&D rather than financing customer orders.
Hmm. We think all the billions of dollars going to stock buybacks to pump “shareholder value” (aka the McDonnell Family and Harry Stonecipher) might be better spent on R&D.
Sarcasm aside, we agree with Boeing that the ExIm is needed. Republicans (who claim to be for business) continue to target ExIm funding as corporate welfare. True, ExIm is often characterized as “Boeing’s bank” since most funds support Boeing airplanes. But as we have opined several times before, the European Credit Agencies fund Airbus and if the ExIm is shut down, then Airbus gains a major advantage.
Posted on August 7, 2013 by Scott Hamilton
The Risk of Fire: FlightGlobal has this story about the risk of fires on board (free registration required). The news article is alarming about the risks of lithium-ion batteries, combined with the new composite technology.
The page for the original report is here.
The 70-page report is here.
Among the findings FlightGlobal reports is what we wrote about early this year: if you have a fire on the airplane, you have to get on the ground in a short period of time (15 minutes, according to an Airbus study, 18 minutes according to this new one).
The interaction between the batteries and composites is a concern.
COMAC C919: The Wall Street Journal has an article talking about the anticipated delays of the COMAC C919. This is via Google News, so it should be accessible to Readers. Here is also a short news item from China Daily and one from Bloomberg.
Airbus loses advertising complaint: Remember those Boeing ads promoting its 747-8 as 26% more economical than the A380? Airbus filed a complaint with a UK watchdog agency, which denied the complaint Tuesday. Aviation Week has this article. One of the things that strikes us from the regulator’s decision is its conclusion that customers would, essentially, see past Boeing’s claims.
Boeing’s use of seats counts–notably 467 for the 747-8–supports the math of the advertisement. But Airbus is right that in true airline configuration, the count would be 405 seats, which dramatically alters the Boeing claims.
Regardless, we have previously opined that the comparison is ridiculous. Given the large differences in the size of the airplanes, comparing the 748 with the A380 is like comparing the 737-700 with the A321. Boeing is cheeky to make the comparison and Airbus fell for it. This debate is hardly worthy of two world-class companies,
Rather than engaging in a debate over seat-based economics, Airbus has a clear upper hand in these numbers: airlines have purchased 262 A380s and only 40 747-8Is. These are the only numbers that count and with these, Airbus clearly has the better advertisement.
Update: AirInsight has some statistics to look at.
Posted on August 7, 2013 by Scott Hamilton