Boeing 757's are Still Sexy

God help me but airplanes are cool. I freely admit that there are certain aircraft that I classify as "good looking" and the Boeing 757 is one of them. I don't know what it is...maybe the combination of a long sleek hull with big engines hanging off the wings...but its one cool flying machine made even cooler when Northwest put winglets on them.

Northwest has big plans for these putting the 757 into a not so traditional role, international flying. The Cranky Flier has a good update on this as does IAG here. Photo credit goes to IAG as well. Nice!

Politics Complicate the Future at Airbus

Its clear now that politics are going to play a huge role in any corrective action taken by Airbus. As the French and Germans prepare to meet today its plainer than ever. Rumors have surfaced that Germany, yes...the country, is considering buying a stake in Airbus parent EADS in an attempt to guarantee a hand in the decisions regarding Airbus. This comes in the face of other rumors that five German based Airbus facilities could be sold off. Meanwhile, the new head honcho at Airbus, Louis Gallois, is trying to assure everyone that everything will be handled fairly in terms of national interest. Finally EADS tells us to not expect any decisions on restructuring at Airbus for the next few months. That which puts us into 2007 before we'll hear how Airbus plans to pull out of this A380 induced nose-dive. Sounds like great politics but poor business strategy to me. Airbus needs to start making decisions now now now.
The press is drawing comparisons between Airbus' current dilemma and the problems that faced Boeing in the mid to late 90's. Its a fair comparison. The difference is that Boeing was and is a business first and a major national manufacturer a distant second. Boeing was able to enact its recovery plans without far less worry for which countries were involved (though political interests and alliance did work in the background). The unprecedented level of multi-national outsourcing on the 777 and the upcoming 787 are evidence of that. Generally speaking, governments are not good at being successful businesses. The government interests in EADS and Airbus need to quit meddling and let Airbus be a business.

Emirates Buys Some Big Boeings

Emirates Airlines announced a firm order for of ten Boeing 747-8 freighters and options for an additional ten aircraft. This is a $5.6 billion warning shot across the bow of Airbus who are struggling to deliver the A380 as promised to Emirates. The airline's plan to expand their cargo opration hangs in the balance so they are supporting those plans up with the new 747-8. And the warning shot is two fold as Emirates also needs a new mid-range aircraft, i.e. the A350 XWB or the Boeing 787. Airbus has cautioned that the A350 XWB could be heavily delayed, Boeing's 787 is going to beat it out the door by 2-3 years at the current date. Airbus is in a very tough position.

Does Airbus Need to Decide? A380 or A350

The impact of the besieged A380 project came into stark focus today as Airbus admitted it has fallen ten years behind Boeing. Everyone following this debacle knows that the A380 is bleeding resources and finances from their other major projects, namely the A400M and the A350 XWB. Is it time for Airbus to reconsider the their projects and their future?
Airbus says the A400M, a military airlift aircraft, has no cushion left in its timeline to absorb further delays and will not make money unless costs can be cut. Ouch...double whammy.
The A350 XWB is no stranger to this blog...an aircraft that Airbus intends to pit against the Boeing 787. Airbus parent company EADS is now stating that they will not let this project move forward until the company demonstrates that they can manage the A380 and have the finances for the additional project. I am suggesting that maybe EADS needs to reconsider their priorities. Should the A380 take precedence over the A350?
I have suggested that the A380, even in concept, was doomed to be a small player in the airline business. Just a handfull of airlines flying it to the few airports that will spend the money so that they can handle the aircraft.
In my mind the timeline of the A350 XWB makes that project dead in the water unless Boeing makes some large errors in delivering the 787. I see this as an even bigger problem than the A380. Consider this quote from a Reuters article:

After several false starts, Airbus has come up with a new wider design for the A350 to try to halt a surge in sales of Boeing's rival 787 Dreamliner. Both planes exist only on paper, but the mid-sized market has become the biggest battleground between the two firms despite public attention to the A380.

Nobody's saying it yet but I am beginning to wonder. Should Airbus consider killing the A380 in favor of getting the A350 back on track? Should they devote themselves to bringing making the A350 XWB a reality and push the timeline back on the A380? Is the A380 simply ahead of its time or will its time ever come?


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Boeing Does the Happy Dance With Ryanair Today

All smiles at Boeing today as they closed a deal with Dublin-based Ryanair for an additional 32 737-800s. At "list price" that's worth $2.25 b-b-billion...cha-CHING. This brings Ryanairs total order to 281 737-800s.

Ryanair's business model is a thing to behold as they offer flights for next to nothing but monetize the crap out of every single thing that you might be willing to pay extra for. But it seems to be working. One thing that is central to it all...a single fleet type standardized in every way possible. They have taken this page from the Book of Southwest and lived it to the extreme. One aircraft type, one pool of parts, one way to train flight crews, one way to train mechanics. This equals low cost to operate.

Good News, Bad News for Airbus

The good news: The group tasked with studying wake turbulence on the A380 has found that standard spacing for the aircraft on departure and landing will not need to increase as much as originally feared (ATW link). This helps to mitigate some but not all the concerns from already crowded airports trying to maximize the number of aircraft they can shove through their airspace. The A380 will cause a 2 minute wait for another "heavy" aircraft on departure (same as the 747) but will cause a 3 minute wait for medium and light aircraft (up from the 2 minute wait on the 747). On approach it is going to require increased spacing for all aircraft types. If you read this and found yourself asking what is wake turbulence and why do I care then Wikipedia is your friend.
The bad news: Information continues to trickle out of Airbus that the A380 is sucking up company resources like there is no tomorrow. This resource drain will likely cause 6-12 month delay on the A350 XWB pushing it into 2013 for the first deliveries. If Boeing can maintain their timeline to deliver the first 787-8 in 2008 with the larger 787-3 and 787-9 in 2010 then the story on the A350 XWB could be over before its begun.

Besieged at EADS/Airbus

As long as we are talking about Airbus and EADS today lets step back and try to summarize all the fronts they are battling on:

A380 Program: Delays along with recent departures of key individuals from the program

The less-than-amicable departure of long time partner BAE. BAE cites the A380 progam as a contributing factor in the decision to sell off their 20% interest

Depressed stock value (30% decrease since the beginning of the year) thanks in part to the A380 delays and unknowns with the A350 re-design.

The unexpected purchase of 5% of EADS stock by Russian investors and increasing pressure by Russia to gain influence at EADS. All this thanks to the aforementioned depressed stock value.

A350 redesign project due to demands from their customers that they do something to with their current long range aircraft product line. The project is still on the drawing board and only Aeroflot is committing to the aircraft so far.

Heavy competition from Boeing's 787 drawing interest and orders away from future A350 variants.

Increasing interest in the upcoming Boeing 747-8 as a alternative to the A380 causing airlines around the world to re-think their long term strategy.

EADS and Airbus have their hand full but I am not counting them out. Airbus has proven to be a very shrewd competitor to Boeing and has made some good decisions in the past. Unfortunate for them that several issues have coalesced at the same time forcing them to divide their efforts. Stay tuned...

Aeroflot Decision on Next Aircraft Definitely Not Indefinite

Apparently "indefinitely" is a lot shorter time span than I thought. Just last Friday Aeroflot said the decision on their next aircraft purchase was on hold indefinitely. Then Monday an Aeroflot shareholder decided it made good business sense to lock in the deal for the Boeing 787. But that deal was not blessed by the Russian goverment who are trying to leverage some influence with Airbus parent company EADS. Today, Aeroflot is announcing that they will purchase both the Boeing 787 and the Airbus A350. The purchase would be staggered with 22 787s being delivered 2010-2012 and 22 A350s from 2012-2016. Apparently this decision has appeased the Kremlin and both deals will receive the endorsement of the Russia government.

Aeroflot Decides to Keep its Place in Line

A 30% Aeroflot stakeholder and seriously rich guy Alexander Lebedev decided that Aeroflot needed to keep there options open on a deal to by 22 787 from Boeing. As I posted just yesterday politics, finance and business plans are swirling at the Russian airline as they try to decide on their next major aircraft purchase. The deal on the table with Boeing is a sweet one with a reported $10 million dollar discount being offered per aircraft. Mr. Lebedev decided to step up and secure both the terms and Aeroflot's place in the delivery line before the terms of the offer expired.

Hmmm...lemme see here, 22 multiplied by $10 million per aircraft...hey, that's a pretty big chunk of change that Aeroflot just saved by making this deal now. This is a good business decision for Aeroflot. Secure the deal and the delivery slots now before the deal gets away. If Russia pressures the carrier into buying Airbus A350s in an attempt to build influence at EADS they should be able to easily sell off these aircraft even before they are delivered. Very shrewd. You will also note that Boeing is not doing their tradition happy dance normally associated with a $3 billion (with a "b", billion) aircraft deal. Another sign that this deal is anything but truly done.

Aeroflot Delays Decision on the Next Big Thing

Aeroflot had been poised to make a $3 billion commitement on 22 long range aircraft until it announced late last Friday that this decision would be delayed "indefinitely". The Boeing 787 was seen as a front runner since its most direct competitor, The Airbus A350 is still on the drawing board without any buyers yet. Spin control has local media reporting that Aeroflot doesn't really know what they want. But it seems to me there is a fair bit of politics running amok here. Reuters is reporting that Russia is in "bilateral talks" with the U.S. as it tries to join the World Trade Organization while a Russian bank has just purchased a 5% stake in Airbus parent company EADS. According to the article the Kremlin has been seeking some influence in the business decisions at EADS. So what will win, world politics or state interests?

Just How Important Is the 787 to Boeing?

If you're wondering how important the 787 is to Boeing then just take a look at the lengths they are going to. Faced with exactly zero companies in the world capable of quickly moving massive pieces of their 787 between their worldwide partners they looked to themselves for the solution. What I am referring to is the 747-400CL which just completed its maiden voyage. The aircraft looks like a pregnant version of the familiar 747 and has three times of the cargo volume of the -400 variant. Folks, that is massive...the extended barrel is 18 inches wider that the Airbus A380. The project calls for three of these aircraft to be created. Boeing will use the aircraft to shuttle large assemblies between its facilities in Japan, Italy, Kansas, South Carolina and Washington.

Its a major undertaking to create and certify a special built variant of an aircraft but the 787 is that important to Boeing. They intend to show that an aircraft can be built using worldwide partners for major assemblies. They believe that the 787 will shape the future of Boeing. Per Boeing's website the 377 firm orders are valued at $59 billion so...yeah...its THAT important. Thus the 747-400CL is born.