Qantas Airways: The troubled airline canceled 35 787-9s. Stories in Google News from all over.
Update: David Strauss at UBS re-issued his April note analyzing over/under orders for all Airbus-Boeing models. In his cover email, Strauss today referred readers to the 787 section. Excerpts:
At 859 aircraft from 56 customers, 787 accounts for roughly two-thirds of Boeing’s widebody backlog. Assuming Boeing hits its planned 10/month 787 production rate by end of 2013, we estimate Boeing has roughly eight years of production in backlog. By region, Asia accounts for the largest percentage of the 787 backlog at 38%, with the remainder fairly evenly split between North America, Europe and the Middle East. We estimate that roughly 73% of the 787 backlog has been ordered for growth as compared to 27% for replacement.
Our analysis indicates Boeing’s 787 customers are in a net over-ordered position of roughly 400 aircraft or 29% of their combined widebody backlog. 787 customers that we have identified as being over-ordered include Singapore, Aeroflot, Qatar, Gulf Air, Qantas, Air China, Vietnam and United, while BAIberia, Etihad, China Eastern, Jet, Oman, Uzbekistan and Saudi appear under-ordered. Although our analysis indicates Delta is under-ordered on widebodies, we don’t expect Delta to order more 787s as it has already deferred its existing 787 orders indefinitely.
787 upswings: Aspire Aviation has a long piece on the 787 program.
777X Development: Dominic Gates has this story about the slowing of 777X development. This is very similar to what we’ve been hearing from a variety of sources. Update, 7:25pm PDT: Randy’s Blog (Randy Tinseth) refutes Dominic’s article with a memo from Ray Conner, president of BCA. As we noted in this item, Dominic’s reporting is similar to what we’ve been hearing–including as late as Tuesday of this week. We’ll also observe, for what it’s worth, that this seems to be unfolding in a scenario very similar to the New Small Airplane/737 MAX timeline. If nothing else, the customers seem to have an understanding that appears to be “evolving.”
It’s a slow August for news, but here are two items we’ll bring to your attention:
Assessing the MAX: Over at AirInsight, we have this post assessing the Boeing 737 MAX, written shortly after the Farnborough Air Show.
Airbus and Mobile: This story discusses how the Airbus plant at Mobile (AL) will add to the aerospace cluster there. The comparison with Seattle, which we make, highlights a real challenge we see for Airbus and the aerospace cluster in Mobile. The supply chain here is struggling under the weight of the high demand for airplanes (not just at Boeing, but all the OEMs), both in terms of product and skilled help. As a member of the Board of Pacific Northwest Aerospace Alliance, we hear of the manpower shortage all the time and the efforts by the State and others to boost training and education to meet demand.
The shortage of skilled labor, and of engineers, is a major challenge for Boeing, and (like it or not) one reason for outsourcing. But the impact on the supply chain is equally great. The lower Tier suppliers in effect become the training ground for the upper Tier and Boeing. This means there is a continuous skill-churn that these small businesses really can’t afford.
Washington State is not the only place where this problem exists; it’s a national problem. What we hear at PNAA is story after story of foreign students (notably Chinese) coming to this country for engineering education then taking their skills home rather than emigrating here. Nationally, there is a wide imbalance between education and training and demand. The shortage of our education institutions in graduating the skills in STEM and touch labor is large. Even high schools have cut back on vocational training of all kinds.
In this State, budget cuts have severely impacted the community colleges and high-ed schools. The aerospace industry is but one of those hurt by these cuts.
Dire Outlook: This article is nothing to cheer about. The author predicts a low growth in global GDP, and this is what Airbus and Boeing rely upon for their growth and production forecasts. It says airlines are emitting much more pollution than generally thought, and if true, this means more costs (especially in Europe) in fees. Also buried in the article is the revelation from Air New Zealand that it costs the airline $1.25m to operate a Boeing 777-300ER round trip from NZ to London, with more than 50% of the cost being in fuel. No wonder the prospect of the Boeing 787 and Airbus A350, with 20% lower fuel costs and 25%-30% lower trip costs, is so important.
787 Deliveries: They are still slow but they are picking up, and it will be about 1 1/2 years before the backlog of airplanes parked at Paine Field in Everett is cleaned out. But it’s progress.
American-US Airways: AirInsight has a podcast discussing the disruptive impact of a merger here.
737 Challenges: The Puget Sound Business Journal has this long piece about the challenges facing the 737 from Airbus and others.
737 MAX and China: Meantime, China is, at long last, looking at the MAX for its airlines.
American Airlines: A merger with US Airways makes the most sense, says Aspire Aviation (we agree as long as US management is in control)
We were traveling Wednesday so we’re a little behind on this:
American Airlines: The judge overseeing American’s bankruptcy denied a request to void labor contracts, particularly the pilot contract. This is a huge blow to management–and would seem a boost for the US Airways merger effort.
Hong Kong Airlines: This financially ailing carrier, under growth restrictions by the authorities, may cancel its order for the Airbus A380. The airline was supposed to firm up an order for the Boeing 747-8I that was announced as an “Unidentified” commitment during the Paris Air Show last year, but it never did.
The Boeing 787-10 will come much later than most suggestions, according to this article by Bloomberg.It was widely thought that Boeing Commercial would go to the Board by year-end to seek an Authority to Offer (ATO) the plane by year-end of next year, with an EIS perhaps around 2016.
Boeing officials bragged that this model would have superior economics and would be an “A330-300 killer.” It would also replace the 777-200ER.
Now, according to Bloomberg, no move to the Board is apparently imminent and the prospect of the EIS moves to the end of this decade.
What does this mean for the 777X? Does this mean the X timeline moves up? Boeing has been saying it’s not in a hurry due to what it believes to be uncertainty over the Airbus A350-1000.
Update: Boeing contacted us to say that nothing has changed in its timeline as outlined in the news article.