Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- 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
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
Murtha death bad news for Northrop tanker bid
The death today of US Rep. John Murtha (D-PA), chairman of the House Appropriations Committee, means US Rep. Norm Dicks (D-Boeing/WA) will likely succeed him, and this is bad news for Northrop Grumman and its bid for the KC-X USAF aerial tanker.
Murtha supported a plan to split the buy between Northrop’s KC-30, based on the Airbus A330-200, and Boeing’s KC-767 despite opposition from the Department of Defense for a dual procurement. Murtha believed a split buy was the only solution that would win Congressional funding to replace the 50-year old Boeing KC-135s.
Hazy leaves ILFC
Steven Udvar-Hazy, co-founder of International Lease Finance Corp. and one of the most powerful voices in commercial aviation, retired on 5 February after more than 27 years in the leasing business.
His departure from ILFC was expected since the mega-lessor was plunged into a financial morass because of the massive scandal at its parent, AIG, which acquired ILFC in 1990 in what was then considered a masterful piece of timing. Only a year later, Iraq invaded Kuwait and aircraft, airline and lessor valuations plunged on the global economic crisis created by the subsequent Iraq War of 1991.
Tanker, 787, 747
Last week was quite active in aerospace and so were we, unable to post. So here’s a recap of some of the things that occurred and our thoughts.
More politics and the Tanker
For the past two years we have bemoaned the politicizing of the procurement process for the KC-X tanker, extending our criticism mostly on previous Boeing efforts with its Congressional supporters–most notably Sen. Patty Murray (D-Boeing/WA) and Reps. Norm Dicks (D-Boeing/WA) and Todd Tiahrt (R-Boeing/KS). Now comes Sen. Richard Shelby (R-Northrop/AL) who, in a display that represents all the worst of what’s wrong with Congress, placed a hold on 70 Obama Administration appointments in a fit over his displeasure of the KC-X Request for Proposals and his belief it disadvantages the Northrop Grumman KC-30.
New Report on Boeing
AirInsight has published a new report on The Boeing Co. This follows reports on Airbus, the emerging competitors to Airbus and Boeing and Re-Engining the A320 and 737 families published since August.
We co-authored these reports with Ernest Arvai and Addison Schonland of The Arvai Group and Innovation Analysis Group. The link to these reports is here.
The Boeing Co. report contains a competitive assessment vis-a-vis Airbus, updating our Airbus report published in August; a close look at Boeing’s programs; its relationship with labor; the prospect for replacing the 737 and 777 to meet Airbus competition; the KC-7A7 and more.
Airbus raises prices on weak dollar
Airbus raised its list prices for aircraft by an average of more than 5% because on the continuing weakness of the dollar vis-a-vis the Euro. Airbus prices its airplanes in dollars but much of its costs are in Euros. Every 10 cent decline in the dollar costs Airbus $1bn in EBIT profits. The price list is at the end of this column below the jump.
This article explains the details. But this isn’t the only problem Airbus has.
An airline with a sense of humor
No commentary needed. More photos after the jump. We don’t know the origin of these; we received them by email. Click on the photo to get a larger, more readable image.
Boeing announced 4Q, YE2009 results
Boeing announced its 4Q and year-end 2009 results today. Here is a link to the press release. The earnings call is at 10:30 EST. We’ll have our usual running account when the time comes.
Here are some initial takes from analysts:
Tanker Contract: Follow the law
Update, Feb. 1:
The newspaper The Hill, which covers Capitol Hill, reports the USAF plans to award a contract for the KC-X this summer, sticking (more or less) to the timetable originally projected. Secretary Robert Gates also plans to urge President Obama to veto any FY2011 defense bill that contains funding for the Boeing C-17, which Gates cuts from the proposed budget.
We believe cutting funding for the C-17 is a mistake. We also believe the Administration ought to take Stimulus funds, double the KC-X procurement from 12-18 tankers a year (resulting in retiring the ancient KC-135s a lot faster) and split the contract between Boeing for the KC-767 and Northrop Grumman for the KC-30. In addition to the only political solution that will work, there are solid strategic reasons for the procurement to be split.
Taking Stimulus money to establish a new aerospace industrial base in Mobile (AL) while supporting the existing 767 program is far more productive than giving Stimulus money to things like a California dinner train.
Original Post:
Here’s a commentary from an outfit we’d never heard of before, the Forerunner Foundation. This op-ed piece appeared in the January 11 issue of Aviation Week magazine. The writer, Jerry Cox, makes an interesting point over the campaign by Boeing supporters to exclude the Northrop Grumman (Airbus) bid for the KC-X tanker.