Leeham News and Analysis
There's more to real news than a news release.
Get over it and move on
In the three days following the withdrawal by Northrop Grumman from the KC-X tanker competition over its conclusion that the Final Request for Proposals for the USAF aerial tanker was irretrievably skewed toward the smaller Boeing KC-767, Northrop supporters and Europeans–notably France–have decried the fairness of the FRFP.
French officials in particular have bemoaned the development. Diplomats, all the way up to the President, have vowed “this is not over.” Retaliatory threats of freezing out US sales to Europe are being thrown about.
As readers of this column know, we have favored the Northrop KC-30 from the get-go and we have supported a split buy between the KC-767 and KC-30 for political and strategic reasons. With this reminder, we have this to say to Europe:
Get over it and move on.
Boeing’s secret KC-X plan
While France elevates the complaints over Northrop Grumman’s withdrawal from the USAF KC-X competition to a head-of-state level, a Boeing insider has leaked the company’s secret NewGen tanker plans to this column. We show the exclusive picture after the jump.
Boeing’s Albaugh at JP Morgan conference
Jim Albaugh, president of Boeing Commercial Aircraft, appeared March 9 at the JP Morgan Transportation Conference, one day after Northrop Grumman withdrew from the KC-X competition.
Below is a running tab of Albaugh’s presentation and Q&A.
EADS 2009 loss on A400M, A380
No surprise here: EADS reported a loss for 2009 on write-offs for the A400M and the A380. Here are some links to tide readers over while we juggle listening to the earnings call with the JP Morgan Conference we are also listening to this morning.
EADS presentation, a 44 page PDF.
Links to the Earnings and Analyst Calls.
EADS won’t bid on KC-X tanker, or seek new partner.
A380 will have losses for 2-3 more years.
From the Earnings Call:
Northrop, EADS to skip tanker bid
Update, March 9, 7am PST:
EADS will not independently bid for the KC-X contract, Market Watch reports.
Update, 1pm PST:
Northrop will no-bid and not protest, we have confirmed. EADS is undecided whether to proceed with a bid on its own but it is unlikely. Northrop’s decision was reached over the weekend.
The USAF RFP was built to be a bid for the cheapest tanker, in the view of a source close to the competition. It was unwinnable by Northrop, it was concluded.
In the near-term, this kills the Airbus plan to build a production facility in Alabama.
As we reported Feb. 23, a DOD document pretty well indicated that the extra capability of the KC-30 wasn’t important in this round but that it would be considered in a future competition.
Northrop bid $184m in the 2007 competition it won for the KC-30 and suggests that taxpayers need to be sure Boeing comes in below this price as a sole-source bidder.
The full Northrop press release is below the jump.
13 minute interview with Boeing’s Albaugh
King 5 (NBC) in Seattle posted a 13 minute raw-footage interview with Boeing Commercial Airplane CEO Jim Albaugh. The audio is pretty weak on speakers, but much better on headphones.
Air Park with A350 contract in dire financial condition
The air park selected by Spirit Aerosystems as the location for a 500,000 sf facility to produce fuselage panels for the Airbus A350 is in dire financial condition and cannot repay state bonded indebtedness, according to a newspaper article.
This is at Kingston (NC), which was the runner-up for Boeing’s 787 Line 1 assembly site that is now in Everett (WA). Washington State wanted the Spirit facility, but North Carolina was chosen for its closer proximity to Toulouse, France, where the A350 will be assembled, and for other factors.
The financial difficulties won’t have any affect on Spirit’s Airbus contract.
EADS, governments reach A400M Agreement
EADS just announced an agreement with the eight governments that ordered the A400M to resolve the financial dispute. The two-page press release may be downloaded here: EADS A400M.
Boeing selects KC-767 for Tanker
Boeing, as expected, announced that it will offer the KC-767 to the US Air Force for the KC-X aerial refueling tanker competition.
The press release is below the jump.
There are a couple of very specific references in the press release challenging the KC-767 vs. the Northrop KC-30, which is based on the Airbus A330-200.
What we find particularly interesting is the announcement that the KC767 will have a 787-based cockpit, and a new fly-by-wire boom that as best we can tell is V 6.0 derived from the ill-fated KC-767AT. Illustrations on Boeing’s tanker web site have consistently shown a KC767 with winglets, but the press release says nothing about this (the updated tanker website continues to show a KC767W). It’s unclear what, if any, wing structural changes or whether a new wing might be involved, another feature from the KC767AT.
Boeing continues to cite the 24% fuel burn advantage it claims of the KC767 over the KC-30, which does not take into account additional savings afforded by winglets, which amount to about 4% on the commercial 767-300ER.
We also note Boeing’s specific reference to a flight control system that gives the aircrew “unrestricted access to the full flight envelop for threat avoidance at any time” as opposed to the computer-driven fly-by-wire system of the A330.
It has been assumed Boeing would offer a KC767 based on the Italian KC767, which is several years late and still undelivered. Market sources continue to assert Boeing has problems with the wing-mounted pods (Boeing previously said this has been fixed) as well as the fuselage center-line hose-and-drogue (Boeing previously declined comment). Boeing calls its offering the low-risk solution. Northrop continues to point to Boeing’s non-delivery of the Italian tankers as evidence of high-risk. EADS’ KC-330 MRTT is 18 months late to launch customer Australia.
We are hearing more and more than Northrop is more likely to protest the Final Request for Proposal than to no-bid the project. A announcement is expected by next week.
Christmas Day bombing attempt
BBC sponsored a bombing test on a retired Boeing 747 to see if the Northwest Airlines Airbus A330 would have survived the Christmas Day bombing attempt. The results are surprising and may be seen here.
The aluminum fuselage flexed but did not breach. We immediately wondered what the result would have been with a composite fuselage that makes up the Boeing 787 and the Airbus A350.