More on the A380: Bloomberg News has this story on Airbus’ efforts to increase sales of the A380, focusing on selling it with increased seating.
KC-30 Boom: Airbus Military still has problems with the refueling boom on its KC-30, some two years after delivery to Australia. Long-time Readers will recall that Airbus’ inexperience with designing the book was one key criticism by Boeing in the interminable KC-X tanker competition.
Comment: We remember when Boeing said Alabamans couldn’t build a tricycle (during the bitter competition for the KC-X tanker).
Hunker Down: We’re going into the bunker on this one–Washington should become a right-to-work state. In 2008, IAM 751 (during its strike) boasted WA is the fourth most-unionized state in the country. We know this inhibits expanding aerospace here. We’ve heard it from companies. We’ve heard it from the head of one of the Economic Development Commissions here that unions are the first topic to come up when he is recruiting companies to expand here. We don’t object to unions per se but we don’t think someone should be forced to join one. (That’s how we feel about Republicans, too….)
Take two Viagra and try again: The refueling boom was being extended when it fell off an Airbus KC-30 during a test flight.
Thank you for smoking: Airbus is really pushing Europe to delay implementation of its emissions trading scheme, which jeaopardizes orders from China. Despite the sarcasm, we agree with Airbus–any regulations through be through ICAO, not on Europe’s own, ill-advised hook.
Macht nichts, II: MTU is a partner with Pratt & Whitney on the Geared Turbo Fan for the Mistubishi MRJ, the Bombardier CSeries, Irkut MS-21 and the A320neo but looks to join GE for the new engine for the Boeing 777X.
It’s now one of the worst-kept industrial secrets: Airbus will announce at 10am CDT July 2 that it will construct a $600m A320 Family Final Assembly Line (FAL) in Mobile (AL).
This is a major strategic and tactical move in the intense, often bitter competition between Airbus and Boeing.
Even before the plans became official, Boeing issued a pissy slam, harking back to the World Trade Organization dispute, rather than stating that it is in a position to compete against Airbus and its A320 with what Boeing otherwise routinely characterizes a better airplane with the best workers in the world.
Perhaps the pissy statement was chosen because in many respects, Airbus has mouse-trapped Boeing—and there is very little the company can do about it.
Before explaining, here are some facts to keep in mind. Click on the graphic to enlarge.
Boeing had a good week with 777 orders from a variety of customers, though some were previously unidentified ones that had already been booked. Back in January we predicted that Boeing will see a stream of orders that will justify increased production. Boeing has announced a rate of 8.3 per month and we can reveal it is considering going to 10 per month.
Meanwhile, Airbus confirmed that it faces mounting challenges with the production timeline for the A350. For the moment it is still sticking with the EIS of 2H2013. We fully expect this to slip into 2014. At the moment, our conclusion is that the A350 will be a year late. This may change.
Airbus and Boeing are engaged in their usual public bickering over the strategies in the A320/737 class. Airbus launched the NEO and claims this provides enough fuel burn reductions to make the program worthwhile. (We think the boost in range to the A320 and A321 have as much to do with the program as anything else.) Airbus is right. Boeing claims re-engining doesn’t provide enough fuel burn benefit to make re-engining worthwhile on a net, all-in cash-on-cash basis to be worthwhile. Boeing makes a good argument on this narrow basis, but this ignores the environmental benefits to re-engining and other factors. Airbus says there isn’t going to be a real convergence of technology until 2025-27 to justify a new airplane. Boeing believes there is enough new technology available to justify a new airplane by 2019. We think they are both right–and both are wrong.
As interested parties and aviation geeks wait for EADS to make (likely not) and announce its decision (as soon as March 4) on whether to protest the USAF contract to Boeing on the KC-X aerial tanker, more updates have come in.
First is a new market share forecast by G2 Solutions of Kirkland (WA). Next is a new updated from one of our readers, who goes by the screen name OV-099. He previously provided a detailed analysis of where he thinks EADS and Boeing came out on pricing. He updates this with more Net Present Value analysis and other economic data.
One of our readers, with the screen name OV-099, provided a comment on our Dewey Defeats Truman post calculating the possible prices on the KC-45 and the KC-767.
OV-099 has been a long-time poster and when the occasion arises, does in-depth analyses on financial terms. We’ve cross-checked his work with others and found his numbers-crunching to be pretty spot-on.
With that in mind, we asked OV-099 to take a final look at his original posting with the thought of elevating it to a primary post. He has slightly revised his numbers. What follows is his analysis of how much EADS and Boeing priced their KC-45 and KC-767 in the bids to the USAF. His analysis is below the jump.
Update, 1-:30 am: OV-099 has further refined his analysis; the update is below.
Richard Aboulafia of the Teal Group said it best: the upset Boeing win over EADS in the KC-X tanker contest is the “Dewey Defeats Truman” moment of this contest.
For those who don’t know this reference, see here.
Aboulafia predicted EADS would win. So did Michel Merluzeau of G2 Solutions in Kirkland (WA). And Loren Thompson, a paid Boeing consultant. We did, too. So did Daniel Tsang of Aspire Aviation and even the Boeing shills in Europe did.
Boeing officials thought they were going to lose and so did its supporters in Congress.
It now appears the USAF will announce the tanker contract Thursday, Feb. 24, at 5pm EST. Expectations are that EADS will be awarded the contract, but there have been so many twists and turns that we’re not predicting the outcome.
The greater question will be, Will there be a protest? As we reported Monday, EADS says it won’t protest if it loses provided there is nothing egregious in the selection process. Boeing has clearly been laying the groundwork for a protest, but neither is it certain Boeing will do so if it loses.
Here is the timeline of what happens next:
The announcement is made.
The Department of the Air Force has 10 calendar days to brief the losing side.
The losing side can request an accelerated debrief.
The losing competitor then has 10 calendar days from the time of the debrief to file the actual protest with the GAO.
The GAO then has up to 100 calendar days to rule on the protest (they may take less time).
The results can be: 1.) GAO finds no merit and throws out the entire protest; 2.) GAO sustains part of the protest; 3.) GAO sustains all of the protest.
The GAO does not rule on whether or not the Department chose the right aircraft, which aircraft was better, etc. It only rules on whether the proper process was followed during the source selection.
The Department can then accept the ruling and provide a timeline for how they will address the issues the GAO ruled on and determine whether and how it impacts the outcome. Or, they can note the GAO ruling but proceed as originally planned.
As Washington (DC) buzzes with the prospect that the Department of Defense will, at long last, announce its award for the KC-X contract before the end of this month, EADS held a press briefing February 16 to lay out its views one last time that its airplane is the best choice for the job.
Boeing made calls to editorial boards last week to make its case.
The process has dragged on so long that we couldn’t help but think of the photo below, purported to be the first air-to-air refueling.