Odds and Ends: Boeing earnings call; US Airways Media; 787 update Day

There’s a lot of news happening today and tomorrow.

NTSB Hearing: The NTSB hearing on the Japan Air Lines Boeing 787 battery fire is today and tomorrow. This can be followed live (and later archived) here.

Boeing Earnings Call: This is Wednesday, April 24. This can be followed here. Expect a fair amount of discussion about the impact of the 787 battery issues on earnings. Ordinarily we’d have our usual live running coverage but instead we will be at the…

US Airways Media Day: This airline has an annual media day and it was scheduled for today a long time ago. We’ve been a regular at this, and due to the pending American Airlines merger, apparently there is going to be big press demand: they had to move the venue from headquarters to a hotel location in Scottsdale. We’ll have several updates throughout the day.

787 Update: LOT Polish Airlines expects to return its two 787s to service in June; Ethiopian this month; the Japanese airlines could return the airplane to service this month but ANA plans up to 200 test flights first, so this will slip to May and perhaps June. It’s unclear when Japan Air Lines plans a return-to-service (RTS). Qatar Airways wants to RTS this month. United Air Lines appears planning next month.

NTSB hearing on JAL 787 battery incident today, tomorrow: live, 9am Eastern Time

You can follow the NTSB hearing on the Japan Air Lines battery fire on the web here. It starts at 9am Eastern Time. Mobile phone access is also available.

Odds and Ends: Boeing’s presence in Seattle; 747-8 future; Japan awaits 787 NTSB hearings; Airport delays

Boeing’s presence in Seattle: Bill Virgin, a respected local journalist and observer of aerospace and manufacturing, wrote this column for the Tacoma News-Tribune looking at Boeing’s future presence in the Seattle area.

The points Virgin raise are valid, and in total have been discussed for years here. We raised some of these points as far back as April 2009 in a speech to a local economic development group.

Parochially, of course, we want to see Boeing stay here. Putting on our business hat, we can make a solid argument for Boeing’s diversification. We see Charleston becoming to Everett what Hamburg is to Toulouse: a major, major manufacturing center and aerospace cluster.

We are firmly convinced that when the day comes Boeing designs an all-new airplane to replace the 737, South Carolina will be its assembly home and Renton’s facility will close, to be given over to mixed use development along the lines of what’s called Renton Landing. Boeing’s “move to the lake” has been years in the planning and years in the making. We don’t believe it is over.

What about Everett? We see the future of Everett solid for at least a generation and probably a lot longer, at least until the 787 production begins to wind down. Local politicians fear Boeing will assemble the forthcoming 777X somewhere else. We don’t think so. The 777 tooling is here, the skilled workforce is here and it wouldn’t make sense to build a derivative elsewhere, just as it didn’t make sense to build the 737 MAX anywhere but Renton. Furthermore, we firmly believe the 777X will kill off the nearly morbid 747-8I. This will free up space to build the 777X here.

747-8 Future: The Puget Sound Business Journal last week published a long story about the inter-relationship between the 777X and the 747-8I, an its impact on the struggling program. On the same day the story was published (Friday), Boeing announced a production rate cut in the program from 2/mo to 1.75/mo. We had expected a deeper cut. One consultant we spoke with on Friday suggests Boeing will do what it can to keep the 747-8 alive pending recapitalization of the 747 at the USAF–in other words for Air Force One and the Doomsday aircraft. We’ve been saying the former for quite a while but had not thought about the latter. But there are only four aircraft. Still, the prestige of having the 747 as Air Force One is worth a lot.

The PSBJ article is here: PSBJ 747 041913

Japan Awaits Hearings: Japanese regulators are waiting for the Boeing 787/Japan Air Lines hearings by the National Transportation Safety Board this week before deciding whether to approve a return-to-service by the aircraft, according to this news report.

Airport Delays: You can track airport delays resulting from controller layoffs here.

NTSB Testimony to the US Senate on safety, 787; FAA reviewing ETOPS

The Chair of the National Transportation Safety Board testified today before the US Senate. The 11-page testimony is here.

Sen. Jay Rockefeller of the Commerce Committee had this to say. This news article contains this:

The testimony, however, comes amid growing frustration and concern expressed by some senior Boeing officials about what they contend is the FAA’s drawn-out decision-making process. Procedures for conducting ground and airborne tests of the redesigned batteries–as well as detailed criteria for determining their success–were agreed on by Boeing and the FAA before testing started.

We believe the FAA won’t approve anything until after the NTSB hearing April 23-24 on the Japan Air Lines incident, not based on anything we know but simply an assessment of the politics involved.

Testimony by FAA Administrator Michael Huerta has not as yet been posted on the FAA website.

Flight Global reports that the FAA testimony revealed the agency is reviewing the 787′s ETOPS, confirming a story Reuters had last month (and which Boeing dismissed as speculation).

Reuters has this story today on Huerta’s comments. It sounds like he meant to say 180 minutes will be OK, but nothing beyond that at this time.

Odds and Ends: Finding the “root cause;” The cliche about bad pennies

Finding the “Root Cause:” The world waits for the Boeing 787 to return to service, following a series of proposed “fixes” designed by Boeing in conjunction with its relevant suppliers and with help from Ford, General Motors and other experts versed in lithium ion batteries.

The National Transportation Safety Board, investigation the Japan Air Lines battery fire in Boston, and the Japanese investigators trying to figure out the battery melt-down of the ANA battery in Japan, have yet to identify the root cause of the issues.

This disturbs many, who question the wisdom of prospectively returning the 787s to service without know the root cause. We confess we’re not too happy about this, either…the idea of an in-flight fire simply scares the bejesus out of us. (So does Boeing’s insistence no “fire” occurred, just two-inch flames in the JAL case and none at all with ANA. This simply is an eye-roller.)

But Sunday we were watching a program on the Smithsonian channel called Air Disaster. This program examines air accidents and near-accidents and this particular episode was called Turning Point, about Northwest Airlines flight 85 in 2002.

The flight was two hours west of Anchorage on its way to Tokyo (six hours away) when there was a rudder hard-over. Through superb airmanship, the flight returned to Anchorage and a one-shot emergency landing. The flight landed safely.

Investigators determined the Power Control Module (PCM) end cap blew out. The connecting rod went beyond the end of the PCM end cap and jammed the rudder. There was no apparent reason why the end cap blew out.

The long and the short of it: the NTSB could not find the root cause of what happened. But “stops” were added to the PCM to prevent the connecting rod from extending beyond the end cap location should another end cap blow out. Four years later, one did and the Air France 747-400F landed safely. Only then was it discovered that a design defect caused the failure.

This brings us to the 787. Many ask how the Federal Aviation Administration can clear the 787 to return to service without finding the root cause first. Boeing’s redesign has several elements to it, but to us the key one is the element intended to deny oxygen to the battery and thus snuff any fire before it can get started. Basic science tells us if there is no O2, there is no fire.

We recognize that many will say Boeing, its suppliers and the FAA should have designed this system in the first place. But as we have written on more than one occasion, aviation is replete with instances where testing was thought to be adequate only for later service to demonstrate through incident or worse that a flaw worked through the system. We’re just glad this flaw was discovered before any lives were lost or even any serious injuries occurred.

As for the prospect the FAA will allow the 787 to return to service but with ETOPS restrictions: we don’t see why restrictions should be imposed. When Reuters asked for our opinion about the prospect the FAA might restrict the 787 to only over-land flights, we said this would be very damaging and this is true. Since then there has been some speculation the ETOPS would be reduced from 180 minutes to 120 minutes. While this would be inconvenient, costly to airlines and still hurt the 787 business case, this is far less damaging than prospectively restricting the airplane to over-land flights.

Boeing said that it expects no restrictions (Mike Sinnett, 787 engineer, at the Tokyo press conference). Our view is rather pragmatic (or fatalistic, depending on your point of view). Given the information from Airbus in a 2012 fire-and-smoke study (totally unrelated to anything involving batteries or the 787) that a fire can go out of control in eight minutes and you need to land within 15, it doesn’t really matter whether ETOPS in 60, 90, 120, 180 or 330 minutes. If there is an airborne fire, chances are you’re cooked no matter what the ETOPS. (It also might be problematic for land within 15 minutes from a cruising altitude of 41,000 feet to an airport that could accommodate the 787 in any event.)

Note: we caution readers planning to comment on the above to watch yourselves. We’re clamping down on spurious and ill-considered tirades.

Bad Pennies: You know what they say about bad pennies always coming back. This couldn’t be more true with Scot Spencer, the convicted felon who keeps turning up in commercial aviation circles. We knew this guy when he and others purchased Braniff Inc (the second one) from the Hyatt family, ran this into the ground and bankrupted it, then started a third Braniff. Spencer and one of his co-investors went to jail for bankruptcy fraud.

Reputations of several respected airline officials Spencer and his co-investors hired to run Braniff Inc were damaged by their association with Spencer. We then wrote for trade magazine Airfinance Journal and revealed a scheme called upstreaming from a series of aircraft leases whereby Spencer and his co-investors bumped the lease rates they paid to higher rates subleased to Braniff, adding tens of thousands of dollars per month to Boeing 737s leased to the carrier through a separate company owned by Spencer and his co-investors. Once this was revealed, a $100m financing was withdrawn prior to closing. Braniff Inc ceased operations a few months later.

The Department of Transportation banned Spencer from future airline involvement, so he went to San Bernardino (CA) and in a move that still baffles us, persuaded elected officials there to give him millions of dollars in contracts to develop the former Norton AFB into a commercial airport. The project was silly to begin with–the Ontario Airport is just down the road–but even knowing Spencer was a convicted felon didn’t dissuade these stupid officials from giving Spencer contracts.

This story, complete with photo of Spencer in custody and hiding his handcuffs, has links to several other stories.

This old document has some of the sordid history of Spencer’s involvement with Braniff.

Here is a court record of Spencer’s bankruptcy fraud.