Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
- SPEEA, Boeing at impasse over safety program, union says April 23, 2024
- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
Odds and Ends: A320 Sharklet tests better than forecast; Emirates and A350-1000
Airbus Photo
Happy Thanksgiving–another Mystery Photo
OK, Readers, y’all had a good time with the post yesterday. It’s Thanksgiving. Here’s another Mystery Photo to identify. It is an airplane.
SPEEA contract terminates Nov. 25
The Everett Herald has this story.
The Seattle Times has this story.
Sunday, November 25, is a critical date in the looming confrontation between Boeing and its White Collar engineers union, SPEEA. This is the date the current contract terminates.
After this date, both sides are basically free to escalate short of a lockout or a strike. SPEEA is gearing up to have another contract vote and the leadership has already basically rejected the second Boeing offer. A strike vote still has to be taken before SPEEA could strike. Based on our conversations, we don’t see the prospect of a strike until after the first of the year–if at all. The union isn’t known for its willingness to walk out.
After members rejected Boeing first contract proposal with a 96% vote, things initially appeared to improve between labor and management. The good will turned out to be short-lived.
Rhetoric is heating up and by all appearances, it seems that SPEEA may well be headed toward a second contract rejection. Work-to-rules and refusal of voluntary overtime is already underway. Large demonstrations have taken place.
What happens after the contract terminates remains to be seen. We’re not optimistic about the next several weeks.
Supplier Honeywell thinks Sequestration is OK; Mystery photo
In a break from major defense contractors, politicians and just about everybody, the CEO of Honeywell thinks Sequestration might be a good thing.
We opined about this on Election Day.
For a switch in topics and our usual stuff, let’s have a little contest. You win nothing except bragging rights.
What is this?
Odds and Ends: Bernstein: no 777X before 2020; Alaska, Frontier and Competition; A380 repair costs; Boeing labor challenges
No 777X before 2020: Bernstein Research, in a note issued today, says it doesn’t see delivery of the Boeing 777X before 2020. Also: on a recently completed trip to Asia, Bernstein wrote this:
There’s clearly huge demand for the 787. There was a lot of excitement about it, but Boeing was heavily promoting the 747-8, for which the company is certainly seeking more orders, with few orders for the passenger version and the air freight market being very weak. To date, the majority of orders for that airplane have been freighter orders. This is a relatively small program, but we think it is the most difficult within Boeing’s portfolio right now. …[Y]ou’re probably not going to see the growth that Boeing had once hoped for there. That’s certainly how we have been making assumptions, as well.
Alaska, Frontier and Competition: The Centre for Asia Pacific Aviation has this analysis about Alaska and Frontier airlines, which aside from being a little geographically-challenged, is one of CAPA’s usual well-researched and thought-0ut looks at airlines. (In fairness, CAPA often strays from the Asia-Pacific, but we couldn’t resist the quip.) CAPA now actually calls itself Centre for Aviation.
A380 Repair Costs: Aviation Week has this article detailing the costs to Emirates Airlines for repairs to the Airbus A380 wing bracket cracks.
Boeing Labor Challenges: Boeing seems headed for war again with labor unions. Here’s an article from The Everett Herald with several links within it; one from MyNorthwest.com about SPEEA; and one from The Seattle Times about SPEEA.
Cargolux and Qatar: We posted some news about Cargolux and Qatar yesterday; The Seattle Times has this piece about the threat to the Boeing 747-8F from Cargolux’s problems.
Odds and Ends: Cargolux, Qatar to split; P-8A and MAX; More on Sequestration; Dodging that depth charge
Cargolux, Qatar Airways to split: Several news stories report that Qatar Airways is going to dump its 35% stake in Cargolux. The stories indicate a disagreement in the direction of Cargolux. This story is the most detailed, although it’s now a month old and out-of-date.
The day before the news broke last week, we were told that Qatar wanted to set up a Cargolux hub in Doha and decline more deliveries of Boeing 747-8Fs to Cargolux in favor of using Qatar Airways’ Boeing 777Fs. This tracks similarly with the month-old story linked above. Cargolux has eight 748Fs on order.
There is a general softness in global air cargo traffic that is causing some cargo airlines to consider deferring 748Fs as well, complicating Cargolux’s viability.
We were also told there are sharp personality differences between the Qatar and Cargolux board members that aggravated relations between the two companies.
P-8A and MAX: Bloomberg has this story that looks at an angle about the Boeing 737 MAX that hasn’t been discussed before: Boeing will stick with the NG-based P-8A Poseidon and not shift to the MAX.
Sequestration: We had a recent think piece on how sequestration might not be a bad thing in the long run because it would force the Pentagon to truly re-think its global defense strategy. This piece in Defense News, an authoritative trade publication, picks up a similar theme.
Dodging that depth charge: EADS wanted to merge with BAE Systems. BAE is the prime contractor of the UK’s nuclear submarine fleet. Read this story about the HMS Astute. EADS may well have dodged that bullet–er, depth charge.
Odds and Ends: Air France v Rolls-Royce for A350; Virgin America rejigs; Last A340s sold; Heading South with SPEEA
Air France v Rollsr-Royce: The saga continues-see this Bloomberg story. We understand there is more to it than just maintenance. Rolls wants AF to order the Trent 1000 for the 787 order, too.
Virgin America: This airline, headquartered in San Francisco, has been an airline in search of a business plan. Its operations don’t have a niche and didn’t fill a void (like jetBlue created and filled at NY-JFK). It’s lost hundreds of millions of dollars. And, finally, the losses have caught up. Bloomberg has this story about aircraft order deferrals and cancellations. The deferrals are Airbus A320neos (note to Alabama: VA was going to take the first neos from the new Airbus Mobile plant in 2016).
Virgin is seeking to restructure aircraft leases, according to two industry sources. Failing to do so could lead to a Chapter 11 filing, the sources say.
Last A340s Sold: The remaining two Airbus A340-500s, originally destined for ailing Kingfisher Airlines, have been sold.
SPEEA and Boeing: Things appear to be heading south with SPEEA. This could affect Boeing’s year-end push to deliver as many as 50 787s as well as the other 7-Series.
Boeing 737 MAX update
Update: Aviation Week has this piece that has some good close-ups of artwork.
Boeing held a tele-conference updating the 737 MAX program. Beverly Wyse, VP and GM of the 737 Program are Michael Teal gave the briefing.
Beverly Wyse (BW)
Michael Teal (MT)
BW: 737 MAX has met firm design concept. Honeywell will provide an electronic bleed air system. Flight deck will have large displays from Rockwell Collins. MAX production will have future growth capability.
MT: We have in place a plan to preserve training commonality with large flight deck displays. We engage with regulators for training regulations and feel this will not be an issue.
Development team made significant progress to have aerodynamic design. We removed nose gear door bump from earlier iterations. We can get longer gear within the wheel well. LEAP 1B reached architectural freeze in September, freezing fan size and core size. Final design freeze will be in April 2013.
With the completion of firm concept, the completion of production design can move forward.
BW: It is important we maintain stability in our production plan. The 737 MAX transition allows us to maintain stability with NG rate increases and into the MAX.
Q&A:
BW: Third production line begins in 2015 with construction of first flight test aircraft. Eventually will use the third line for future rate increases beyond the planned 42 a month.
MT: Will only offer radial tires on nose gear, nose gear retracts further into the wheel well.
MT: 13% fuel reduction is a per-seat off the 737NG from today’s most efficient NG (19% better than original 1997 NG.) MAX will continue with the same maintenance cost as today’s NG.
MT: Goal is to have the same field performance as NG.
BW: 737-7 MAX: Many of our customers select a primary model but have substitution rights into other model. We see the -7 as being part of a family of aircraft where airlines can use -7 on thinner routes. It also serves missions in high-hot regions, such as in Tibetan plateau. We see the -7 serving these critical missions. I would no say “no question” that we will build it, but customers have asked about it and it is in our family today.
MT: Flight test plans for -8 will have four test planes. Expect to have two flight test airplanes for the -9 and -7.
BW: Part of the reason for more flight test airplanes is to proceed as fast as possible.
MT: Can’t give you at this time an exact count of the amount of change of MAX vs NG. This is part of the design process between now and the middle of next year.
MT: This airplane is an amended type certification, do not see re-certification.
[Editor: UBS Securities issued a new research note even as the teleconference was proceeding, with this comment:
[Systems changes represent onset of scope creep: This morning BA announced that it had achieved “Firm Concept” on 737 MAX including new bleed air system from HON, new tail cone, new winglets, and surprise move to upgrade 737 NG displays from HON with 787 large format displays from COL. BA’s move to incorporate updated systems beyond the engine represents a departure from its stated strategy of minimal design changes on 737 MAX.
[When MAX was announced, former CEO of BCA Jim Albaugh said he wanted minimal changes. The MAX has, for some time, appeared to be undergoing design creep, hence the questions about commonality and re-certification.]
BW: Right now we are saying 2017 EIS, [Southwest Airlines previously told us 4Q17, Jim Albaugh hoped to advance this schedule); as we move forward we will get more definitive about the schedule.
Very un-British report on Ryanair-AerLingus
This amused us a lot–from the free British e-newsletter from Airline Fleet Management.
Talking Point
Pesky pursuer Ryanair claims Aer Lingus is a done deal
Ah, Ryanair. It’s like the Granny no one wants a sloppy kiss from, or the colleague no one wants to sit next to at the Christmas dinner. In fact, many of its hardened customers don’t really like it that much. Bottom of the friends list though is Aer Lingus.
To Aer Lingus, Ryanair is a sleazy old man with relentless ambition and bad intentions. Despite continuous rebuttals, it keeps trying to woo, or win Aer Lingus by force.
Ryanair now says it is “confident” that its €700m takeover bid for Aer Lingus will gain approval from the European Commission, despite the regulator recently sending the airline a list of objections based on rules governing competition.
The carrier said it has devised a number of remedies, including: “new airline bases in Dublin, new entrant competitors on over 40 routes to/from Dublin, Cork and Shannon, as well as specific competition solutions that guarantee increased price competition”.
It has until December 31 to finalise these plans before the watchdog makes its final decision.
Ryanair already owns 30 per cent of Aer Lingus and has had two failed attempts at a takeover. In 2007, the Commission turned down a bid for completion issues and in 2009, Ryanair dropped its second bid.
Poor Aer Lingus, when is it going to convince Ryanair that ‘no means no’?
Mary-Anne Baldwin, Editor, Airline Fleet Management