Airbus: A400M, Future funding

With tanker news dominating this week, there are a few Airbus items that haven’t received much attention: the A400M, future airplane program funding and the A350.

(Updated September 26.)

A400M

This disastrous program appears heading for some resolution. Aviation Week has this report. It looks like Airbus is headed toward a new agreement with the A400M customers (most of which are Airbus member-states) that will restructure the contract, terms and conditions in a program which has already cost Airbus billions of dollars in cost overruns. The program costs the company $100m a month, and it–along with the A380–has been a huge financial drag.

UBS estimated that the restructured contract could add 5bn Euros to the charges Airbus has already taken. We spoke with Airbus CEO Tom Enders earlier this month and he said the estimate is “completely unreasonable.” While he would not offer a “reasonable” number, published reports suggest a 3.5bn Euro figure.

The program has been a perfect example of political interference, notably on the engine selection at the start, which speaks more than ever why Airbus and EADS should divorce from ownership by the French and German governments.

The ever-candid Enders said the A400M should have stuck with the proposed Pratt & Whitney turbo prop rather than having a new design forged in Europe forced upon the airplane. “The choice was made under political pressure,” he said.

KC-X tanker DRFP released

Update, September 28: DOD Buzz reports Boeing is going to offer two bids, one each for the KC-767 and KC-777. Here is the link. We think this is a brilliant move.

Original Post:

Here is the link to the RFP. We’ll add information after we’ve read it, which will take all weekend. One thing we did find right away: the USAF is asking for field performance data on runways 6,000 ft to 15,000 ft. This means the Boeing 777 isn’t zapped on this criteria; the 2006 RFP required 7,000 ft. runways. The Systems Requirements document does include a 7,000 ft. runway requirement. SRD document pg. 26, 3.4.2.2.1.

On another requirement from the 2006 competition: spare engines had to be transportable in the C-130 cargo plane. A 777 GE 90 wouldn’t fit; this requirement has been changed to the C-17. The C-17 has an 18-foot wide cargo bay; the GE-90 is slightly over 10 ft wide (bare engine, without nacelle). SDR pg. 40, 3.6.3.3.1.

Here is Boeing’s statement, issued upon receipt of the DRFP:

“Our next step is to conduct a detailed review of the document. We want to understand how requirements will be defined and prioritized and how the proposals will be evaluated. That information will help us decide which plane to offer or whether to offer both planes. We appreciate that there will be frequent, open discussion with the U.S. Air Force as we go forward. Both the Air Force and the American taxpayer will benefit from the tanker options we can offer. Boeing has a KC-7A7 ‘family of tankers’ available to meet the warfighter’s requirements. Whether it’s the agile, flexible 767-based tanker or the large 777-based tanker, Boeing will deliver a combat-ready tanker with maximum capability at the lowest cost.”

What is noteworthy is the reference to offering the KC-767 and the KC-777. This is contrary to stated DOD intent to buy only one airplane. This is something we suggested Boeing do for the 2006 competition on the theory it would checkmate the Northrop bid. While we think the 777 is too big for the KC-X competition, a dual-offer by Boeing simply cannot be matched by Northrop.

Northrop believes its KC-30 is the right-sized aircraft in the sweet spot.

Here is Northrop’s statement:

“Northrop Grumman applauds the Defense Department and U.S. Air Force for re-starting the effort to replace its Eisenhower-era KC-135 aerial refueling tankers, and the company is looking forward to competing for and winning the contract again.

“Northrop Grumman will review the draft RFP and provide the U.S. Air Force with comments on the draft in short order.  We will defer further public comments until we have completed our review.”

Here is the synopsis as publish on the Business Opportunity website.