Airworthiness Directives: The New York Times has a good piece about ADs that should put many general assignment reporters to shame. The rhubarb over the ADs applied to the Airbus A380 spurred Nicola Clark’s reporting. This is a must-read not only for the general public to actually understand what’s going on in the world of aviation, it’s a must-read for the hysterical headline-writers who seem more interested in page hits than in facts.
787 Surge Line starts in June: Boeing’s 787 Surge Line begins operation in June. This is the line in Everett that is being created as risk mitigation for the new line in Charleston as the workforce there comes up on the learning curve. The two lines are intended to have a capacity of three per month, while Line 1 in Everett has a capacity of seven per month.
The Surge Line is supposed to terminate in May 2014, according to internal Boeing documents obtained by the IAM 751 in the now-defunct NLRB case. But we hope, and believe, the Surge Line could become a long-term line as Boeing considers ways to go beyond the 10/mo production rate goal by the end of 2013. We believe Boeing has to significantly go beyond this rate to catch up from delays that are hitting four years for some customers, as well as to open up slots for demand.
Rolls-Royce and the Trent XWB: Flight Global has a long article about RR’s engine development for the Airbus A350.
Dark Clouds over Asia: Aspire Aviation has a long piece about Asian airlines that are struggling. Asia has been a bright spot for Boeing and Airbus orders. Perhaps the bubble is about to burst.
The dual appeal of the WTO Panel Findings in the European Union’s complaint against illegal subsidies provided Boeing for its commercial airplanes program has been issued, but it remains under wraps until March 12 to allow the parties to review it and request commercial sensitive information be deleted from the public version.
The WTO Panel found Boeing received more than $5bn in illegal subsidies. The key ones are grants from NASA and the Department of Defense, but tax breaks provided by the State of Washington–amounting to $3.2bn over 20 years–also were found to be illegal.
The EU and the US Trade Representative each appealed the Panel findings. The EU wanted to start the clock on the countdown to Boeing compliance as well as seeking reconsideration of complaints rejected by the Panel. The US appealed some of the findings of the Panel that found Boeing received illegal subsidies.
Leaks from both sides are expected in advance of the March 12 public release.
We expect the core of the Panel’s findings–that grants to Boeing are illegal–to be upheld. We also expect that the tax breaks granted by Washington State (as well as Kansas) will also continue to be held as illegal.
Boeing had contended throughout the process that Airbus had received more than $200bn in illegal aid, a figure Boeing claimed includes interest expenses. The WTO found only $18bn in aid was provided Airbus. The original WTO panel found $5bn in illegal aid to Boeing. The Appeals panel could lower or raise the Boeing figure. The Reuters article has some detail on the disputed amounts in the Boeing appeal.
Here is a story we did last week for Flight Global Pro.
With huge orders last year for the Airbus A320neo family and this year for the Boeing 737 Max, the top customers for the Big Two OEMs continue the shift from the traditional “blue chip” airlines, but upstart low-cost carriers and Middle East airlines.
Air Asia and Indigo, two LCCs, are now the top two customers in terms of backlog for Airbus, with Qatar Airways and Emirates Airlines having the fourth and fifth largest unfilled orders. Only Qantas Airways of the legacy carriers hits the Top 5 for Airbus. After this flag carrier, the next legacy carrier—US Airways—comes in at only #14. Lessors, other LCCs and Latin America’s TAM (founded in 1961) and Lan (1929) are the top customers for Airbus.
Boeing is a slightly different story, driven by its long dominance of the US market. American Airlines, Delta Air Lines and Continental Airlines are legacy carriers that are in the Top 10. But Upstarts Lion Air and Norwegian Air Shuttle are Boeing’s first and third top customers with legacy LCC Southwest Airlines ranked second.
Aengus Kelly, CEO of AerCap, worried in an interview with The Wall Street Journal that the large orders placed by the newer airlines won’t be filled, and that the orders contribute to over-production by Airbus and Boeing. He specifically identified Lion Air and Norwegian Air Shuttle as having ordered to many airplanes for their future needs. Norwegian’s recent order for Boeing 737s is reflected in the Boeing customer list but not yet reflected in the Airbus list. NAS announced an order for 100 A320neos, which would thrust it to a Top 15 position with Airbus.
This is one of the more odd items we’ve seen in a while.
Southwest Airlines, the launch customer for the 737 MAX, believes that entry-into-service could be earlier than the current target of 4Q2017. Boeing would like to shift EIS sharply to the left, as early as 2016, but this will depend entirely on the engine development of the CFM LEAP-1B.
But lessor AerCap told The Wall Street Journal the MAX may not arrive until 2019.
We find AerCap’s prediction to be incredibly pessimistic, even allowing for the history of the recent Boeing programs.
Nothing we’ve heard yet suggests AerCap might be correct. We believe it way too soon to draw any conclusions that the MAX will be early or late. AerCap has not ordered the airplane.
Here is an expanded version of a story we did last week for Flight Global Pro.
The refrain that Airbus and Boeing are over-producing the core-A320 and 737 programmes resurfaced with lessor AerCap in an interview with The Wall Street Journal.
Aengus Kelly, CEO, chastised the Big Two OEMs for production plans announced so far. Airbus will go to a rate of 42 per month by the end of this year and is considering 44. Boeing plans to hit rate 42 by 2014. Both companies are considering rates as high as 60 per month.
Airbus produces airplanes only 11 months of the year while Boeing is on a 12 month production schedule.
In its 2011 20-year forecast, Boeing predicts there is a need for 23,370 single aisle aircraft in the 90-210 seat category. Airbus predicts 19,165 in the 100-210 seat market.
Based on the announced production rates, and assuming no changes through the 2030 forecast period in production—or for adjustments in the forecasts—Airbus and Boeing will produce 18,551 single-aisle airplanes.
If both OEMs go to rate 60 by 2016, their combined production exceeds their own single-aisle forecasts.