Update, Feb. 2: Flight Global has this very good analysis about the WTO fight between Airbus and Boeing.
In this issue of Odds and Ends, we talk about the 777, a CNN interview with Jim Albaugh and a variety of other things.
- The future of the 777 may slip to the next decade, according to information. Boeing believes the A350-1000 will become a new airplane rather than a derivative of the baseline A350, delaying entry-into-service until late this decade. Accordingly, a move to enhance or replace the 777 currently is being thought as a project for the early 2020 decade.
- Boeing seems increasingly likely to go with a replacement for the 737 with a 2019 EIS.
- Boeing Commercial Airplanes CEO Jim Albaugh gives a short video interview with CNN in which he returns to his recurring theme that Boeing “over-stretched” on the 787. He talks about some of the reasons, and he is candid about the shortfalls over its pushing technology, the shortage of engineers and other issues. Read more…
Update, Jan. 28, 6:30am PST: Predictably, Sen. Cantwell wasn’t satisfied. She said the Senate Hearing didn’t get at the “core issue,” and called for an investigation by the USAF Inspector General. EADS said today that’s fine; here is Chairman Ralph Crosby’s statement:
“We would welcome an investigation by the DoD Inspector General—if such an investigation does not delay the decision on acquisition of new tankers.
“Scandal and protest have kept this badly needed system out of the hands of our service men and women long enough. We are interested in illuminating unambiguous facts, not in a tactic for delaying the decision process.”
Update, 4:30pm: Here is the archived Hearing web cast; thanks to Dominic Gates of The Seattle Times for the link.
Update, 3:45pm: Boeing delivered the first KC-767 to Italy. See the article here.
Also: While the Hearing was pretty much a sham in our view–partisans on both sides were more interested in scoring political points than in fact-finding–one thing did come out of it and that is the allegation by Sen. Maria Cantwell (D-Boeing/WA) that EADS had the data more than a month appears to be wholly unsupported. EADS received the data Nov. 1; it opened the disks that night, discovered the error and secured the disks the same night. At USAF direction, they (as did Boeing) returned the disks Nov.
8 2, during which time the relevant disk was secured.
Update, 9:15 am: Our take on the hearing:
- A lot of political posturing and little substance.
- No minds changed; Boeing partisans support Boeing and EADS partisans support EADS.
- Senators for Boeing tried to turn this into a hearing about WTO and illegal Airbus subsidies, to no avail–but achieved political points they wanted to make; but does anybody care?
- The 15 second/3 minute/15 minute issue raised by Sen. Lindsey Graham (R-Boeing/SC) wasn’t diffused by committee Chairman Carl Levin (D-MI) and could lay the ground for a Boeing protest if it loses; see Trimble’s running log and closing commentary at the end of this post.
- We watched some but not all of the hearing and frankly came away thinking there’s more smoke than fire based on what we saw–which wasn’t all of the hearing and obviously doesn’t include any of the documentation the USAF provided. But nothing has been settled and this will continue to be an issue throughout the remainder of this competition.
- More than ever, we believe the only solution is to split the contract. We firmly believe there are sound strategic and tactical reasons to do so but politically it is the only choice that has any chance of moving forward with this contract.
- Nobody seems to give a damn about the needs of the warfighter anymore; it’s solely, entirely, 100% about Boeing vs Airbus and jobs rather than the Air Mobility Command and the needs of the warfighter.
(Boeing statement follows EADS; a link to download the EADS timeline follows Boeing; and a link to FlightGlobal’s running blog follows the EADS timeline.)
EADS released the following statement to the Senate committee, chaired by Carl Levin (D-MI), hearing information about the USAF inadvertent release of proprietary information on the KC-X procurement.
The hearing was called at the request of Sen. Maria Cantwell (D-Boeing/WA).
Chief Executive Officer
EADS North America
Statement for the Record
To the Senate Armed Services Committee
January 27, 2011
Chairman Levin, Senator McCain, and Members of the Committee, I am pleased to provide a statement to the Committee concerning the U.S. Air Forces’ inadvertent release of Integrated Fleet Aerial Refueling Assessment (IFARA) data in the KC-X tanker procurement. The facts surrounding this incident, and the responsible actions taken by EADS North America, are straight forward and deserve to be clearly understood with full transparency. We are pleased to contribute in any way to that full understanding.
Update, Jan. 28: Think again, Heidi, Airbus says. The company said no way. See this story.
Heidi Wood at Morgan Stanley predicts Airbus may have 1,000 orders by the Paris Air Show and that Boeing will have to respond earlier than its long-talked about 2019-2020 EIS of a new airplane to replace the 737. Here is what Wood says in her report, issued this morning the bold face is hers:
What’s new: Airbus could announce between 500-1,000 new NEO orders by Paris air show (June), which adds pressure for BA to come up with a new 737 replacement. We believe BA could announce a new narrowbody by Paris Air show; re-engining makes less sense, in our view. Crucially, management discussed a new plane by 2019+ however we believe these sizable Airbus’ new orders changes the game & could cause BA to accelerate plans. Our 2013-2014 model contemplates rising R&D vs. the Street, as we reason the new narrow has to occur by 2017/18 for BA to retain its most important customers.
If Wood is correct, watch Airbus crow (1) that this is the “fastest selling airplane ever” and (2) “I told you so” to every doubter.
Boeing projects there will be 20-40 deliveries of the 747-8 and 787 this year.
The projection came in its 2010 earnings announcement today, which includes the 2011 outlook.
According to the Ascend data base, 18 747s are scheduled for delivery this year, a figure we believe is reliable because while the 747 has had its issues, the program appears to be in much better shape than the 787. In fact, BCA Jim Albaugh recently told employees that the first freighter without traveled work rolled off the assembly line, an indicator of the program status.
With Sen. Carl Levin (D-MI) set to hold the tanker hearing on Thursday (Jan. 27), it is clear the USAF continues to drag on its decision in the KC-X competition, which was expected this month. It now looks like March.
We’re going to ask a question that may be considered by some to be ridiculous on its face (and we’re not entirely sure it isn’t) but which, given all the twists and turns, starts-and-stops, hissy fits and more that’s happened in the painful saga of USAF tankers, we might ask, Why not ask this question?
Is failure an option?