A 5.8 earthquake hit the Washington (DC) area, centered about 50 miles southwest but felt as far south as North Carolina and as far north as Boston. No serious damage appears to have been done.
Normally we wouldn’t remark on this, but as it happens, just yesterday we were talking with a Seattle-area person with direct interest in where Boeing builds assembly sites. We naturally talked about Boeing’s 787 site in Charleston (SC) and the bombshell dropped by CEO Jim McNerney that Renton (WA) can’t assume it will be where the 737RE will be built (we can’t yet bring ourselves to call this thing the NE737). Among the considerations is natural disaster risk.
Bloomberg News writes that 787 certification may come August 26. In a superb article giving a current assessment of the program, Bloomberg cites Bernstein Research as estimating the first 1,000 airplanes will cost an average of $116m each. The program accounting block–the point at which the 787 will break even–is expected to be at least 1,000 airplanes, according to most forecasts by Wall Street analysts. Boeing’s accounting block historically has been around 400. Boeing should give the accounting block on this program with the third quarter earnings call in October, assuming first delivery in September.
Delta Air Lines deferred the highly anticipated order for the 100-150 seat airplane due to worries about taking on too much debt in the current economic environment. Multiple sources say Bombardier’s CSeries had been favored over the Embraer E-195.
Delta’s RFP from Boeing didn’t include the re-engined airplane because at the time of the RFP, the 737RE didn’t exist. But we are 99% certain conversion rights will be in the final contract.
The Airbus A321neo does have its promised EIS until 2017, and Airbus was unlikely to be able to offer production slots for this model until 2019. Delta wants all aircraft delivered by 2018 and Airbus couldn’t meet this with the A321 Legacy, either. Plus the price was higher.
At 10:50am PDT our readership YTD exceeded all of 2010.
Bloomberg News just tweeted Delta Air Lines is to order 100 Boeing 737-900s. WE have three sources saying the same, though without the number.
Boeing won the deal over the Airbus A320/320neo due to earlier delivery positions and price, we are told.
Update, 9:50amPDT: We heard last week that Delta may defer ordering the 100-150 seat airplane and while we’ve been working to confirm this, Flightblogger beat us to it.
UPDATE 12:46 PM ET: CONFIRMED – Delta will order 100 737-900ER aircraft, the largest single order for the type. Further, industry sources confirm that a selection of a smaller narrowbody that pitted the CSeries against the Embraer E-195 has been delayed, as the airline does not see the same level of urgency to replace its 757s starting in 2013. The airline’s aircraft evaluations excluded consideration of the re-engined narrowbodies from Airbus and Boeing. FULL STORY SHORTLY
The next five weeks should be pretty exciting for Boeing–and significant.
Last week, the company received certification of the 747-8F from the FAA.
Before the end of the month, the Board of Directors is to receive from Boeing Commercial Aircraft the details of the 737 re-engine program (we sure hope marketing comes up with something better than “NE737″)**; we actually have learned the date of the BOD meeting, but will honor Boeing’s policy of not revealing the date). At this meeting, Authority to Offer the 737RE is expected, with details of just what the airplane is to follow to customers and the public (not sure of the timing).
At that point, we’ll be able to see just how well the 737RE stacks up against the A320neo and how creative Boeing’s engineers have been in taking a 1960s-generation airframe and bringing it forward to the 21st Century.
With Steve Wilhelm of the Puget Sound Business Journal getting a scoop that Boeing is naming the re-engined 737 the NE737, which we were underwhelmed by, and the conversation in the Internet and analyst community about the name, we thought we’d run a Name that Plane contest. It worked for the 7E7; why not for the 737 re-engine?
Even though this is a “contest,” there is no prize.
Studies by Boeing to increase production of the 737 to as high as 60 a month cannot be justified by demand through 2020, or even 2030, according to a new analyst report by Wedbush, a Los Angeles-based investment bank.
In a 16 August research note, Wedbush’s aerospace analyst Kenneth Herbert believes a rate of 50 per month can be supported by 2015 through 2020, but that global demand and competition from new entrants in the 100-200-seat market means Boeing and Airbus can only justify this rate for the 737 and A320 families.
Wedbush also predicts that Boeing will keep production of the 737 re-engine at Renton (WA). Boeing’s CEO, Jim McNerney, said on the manufacturer’s second quarter earnings call that Renton was not the automatic choice for assembling the 737 re-engine and that other options would be considered. Boeing commercial airplanes CEO Jim Albaugh said separately that it will be six-eight months before a decision on the assembly site will be made.
The first is from Aeroturbopower, a blog that concentrates on engines and engine-related stuff. In today’s post, Aeroturbopower has a very interesting analysis on fuel burn on the Airbus A320 vs the Boeing 737-800. The results may surprise you, given the very effective messaging campaign by Boeing and the equally poor messaging campaign by Airbus.