Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
- Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale April 23, 2025
Boeing responds to the public release of the WTO ruling
Boeing has issued the following statement:
Boeing Calls WTO Ruling a Landmark Decision and Sweeping Legal Victory
– Launch aid for every Airbus program deemed illegal and damaging
– ‘Prohibited’ A380 launch aid must be withdrawn ‘without delay’
– Legal principle set: airplane programs must be funded on commercial terms
– Government funding of Airbus infrastructure and R&D programs also ruled illegal
– More information, including excerpts from the decision, will be available later today at www.boeing.com/wto
Read more
Airbus responds to WTO public release of final subsidies report
The 1,038 page Final Report by a three-member panel of the World Trade Organization on the US complaint about illegal subsidies to Airbus was made public today.
Findings and Conclusions: 5 pages, PDF. These are difficult to grasp when taken in isolation of reading the entire report, which at this posting we’ve not done.
Home Page to the Report in segments and the entirety.
The Interim Report was issued in September and the Final Report in March, but these were supposed to be confidential. Riddled with leaks to Airbus and Boeing partisans and promoted in the press as wins and losses by both sides, the public report is the first opportunity to read it for one’s self and draw conclusions.
At 1,038 pages this is going to take a while.
In a pre-release, embargoed press briefing, Airbus and its parent EADS said the appeals by the US and European Union are expected on points each side believes were in error.
Airbus made the point that this panel report has not been adopted by the WTO as fact and therefore any claims by Boeing that this is the final, and actionable, conclusion is misleading. The panel report may be appealed (and will be), after which the WTO appeals panel must decide on these appeals. After this process is done, the WTO itself must accept or reject the report.
“More has been costing more”
With the Pentagon’s announcement this week that a major push has begun to wring costs out of the defense budget, will this macro approach trickle down to one of the largest defense procurements in decades–the KC-X tanker recapitalization?
Remember when Defense awarded Northrop Grumman the KC-X contract in 2008? A key, if not the key, to winning was, “More, more, more.”
Now Ashton Carter, the top procurer in DOD, says “more has been costing more.”
Given one advantage Boeing has over EADS in the current KC-X competition–life cycle and MilCon costs–will “more, more, more” cost EADS the contract?
The irreverance of Buzz Aldrin
Let’s start out the week with this humorous and enlightening interview with retired US astronaut Buzz Aldrin, the second man to walk on the moon.
In it, he answers one of mankind’s most pressing question.
787 grounding not “safety-of-flight” issue
The temporary grounding of the Boeing 787 flight test airplanes to deal with the latest assembly issues is not a safety-of-flight issue and was not sought by the flight test crews, says Scott Fancher, program manager.
The Seattle Times reported the cessation of flight tests yesterday. Boeing disputes the term “grounded” and says the flights are discontinued until inspections and repairs are completed.
In a telephone press conference this morning, Fancher says the problem with shims and fasteners in the horizontal tails assembled by Italy’s Alenia stem from improper gaps surrounding the shims and too much torque on the fasteners.
Dictionary and the KC-45
We love clever ads.
Here is the PDF. KC-X_Dictionary
Below the jump is EADS’ ad that appeared yesterday.
Boeing gives Everett a makeover
Here’s a departure from our usual stuff with this Aviation Week story about Boeing’s $800m “make-over” of its Everett plant.
Separately, Boeing will have the 787 at the Farnborough Air Show but not the 747-8.
Weak Euro helps Airbus vs. Boeing
The weak Euro at its present level could help Airbus lower the cost (mostly in Euros) and therefore the price (entirely in dollars) by as much as 10%, according to Charles Armitage, an aerospace consultant based in London.
Check out this story in Aviation Week.
This is bad news for Boeing generally and for the KC-X competition specifically. This could put pressure on Boeing Commercial Airplane prices.
WTO vote watered down, meaningless
We’ve gotten a hold of the US House amendment that was approved in the matter of the WTO subsidy issue in the KC-X competition–which Boeing and its supporters touted as a key victory to ensure the subsidies found by the WTO to be illegal and which would be considered in the evaluation if the Senate goes along–and the final version, which as adopted is meaningless pulp.
The adopted language is far different than what was initially proposed.
Here is what Boeing supporters in the House suggested: Original Amendment.
Here is what what actually adopted: Approved Amendment.
The Original Amendment was a clear violation of the WTO rules, which provide that no complaining government can impose self-help prior to completion of the entire WTO process, including the issuance of the Final Report (which has been done in the US vs Airbus case), appeals (not done) and WTO authorization for sanctions (not done).
Let’s talk about the planes
Update, June 4: Reuters has this recap from Jim McNerney’s appearance at an investors’ conference in which he says EADS could win the tanker competition on price–a key point of our column below.
Original Post:
Note: this is a very long column.
In a previous post, we lamented that the debate over the KC-X procurement seemed to be about everything BUT the attributes of the planes offered by Boeing (the KC-767 NewGen) and EADS (the KC-45, based on the Airbus A330-200).
The public relations campaign and the shrill political posturing has been about the WTO trade dispute between the US (Boeing) and the EU (Airbus) over illegal subsidies to both companies and whether these should be included in the Pentagon’s evaluation; about jobs; about extending the deadline to submit bids so EADS can do so; and about freezing Obama administration appointments in a particularly snitty move by an EADS Senator.
None of these has anything to do with how the USAF evaluates the plane. The USAF evaluates the equipment on the merits of performance, capabilities, life cycle costs, military construction costs (MilCon) and a bunch of technical requirements, 372 in all.
If the airplanes’ costs come within 1% of each other, another 93 discretionary criteria will be scored, including exceeding capabilities.