LA REDAZIONE di Aerospazio Campania

The so-called Japanese Heavy is an industrial partner with Boeing on the 787 program, building the composite wings. The 70-90 seat MRJ regional jet will have composite wings. Boeing is shying away from planes with less than 150 seats in the future. If the MRJ is a success, we think it likely Mitsubishi will grow the airplane up to 150 seats, particularly since Kawasaki Industries, another 787 partner, has announced plans to create a 100-150 seat jet.

From there it's only another step to grow into 200 seat jets and a full family. It took Airbus 14 years to create a family and 34 years to have a full product line.

This is not good for American industry. And in our view, Boeing is creating its own future competitor.

 LA REDAZIONE di Aerospazio Campania

Business Week reports on the ever-more-complicated politics surrounding the Boeing/Airbus/Northrup tanker-contract bidding. Lobbyists from both sides worked the Democratic National Convention and Boeing could be seeing its future at stake:

Adds [Lexington Institute defense analyst Loren] Thompson: "Boeing is at least as worried about their key commercial customers in the U.S. market as they are about the tanker franchise. Once EADS sets up a commercial operation in the U.S. market, Boeing loses a lot of its national advantage in terms of competing for congressional support, protests from the [U.S. Trade Representative], and so on."

The electoral politics of the thing are straightforward. Washington state [Boeing] votes Democratic, Alabama [Northrup/Airbus] votes Republican, and you can expect the incoming administration to award the contract accordingly.

The defense acquisitions argument is a different matter. Until DoD throws Airbus a contract, Boeing will retain a monopoly on large-aircraft sales to the military because the only other big domestic producer, Lockheed/Martin, got out of the transport business for good after taking a bath on the L-1011. An award to Airbus would also help build the domestic manufacturing base (if perhaps in an industry facing long-term decline) and punish Boeing for its ethics problems.

AFP, the European news agency, reports DOD/USAF officials are worried another tanker protest will be filed, no matter who wins Round Three.

Reuters has this report on a USAF general urging quick action.

Update, 12:50 PM PDT, Sept. 4: In true military fashion, it's hurry up and wait--the final RFP for the tanker has been delayed another week, according to this report in The Hill newspaper.

View the CEO Blog video on youtube here:
p/s: jgn tanya naper dia pakai lagu tu...aku pun xtau, dia yg pilih sendiri..

hehe..this is the 2nd project to be launch by our department. Videos n blogs was developed by the New Media & Relationship Management Team ;)

El 'superjumbo' A380, el mayor avión comercial construido, tiene capacidad para transportar 555 pasajeros. La aeronave comenzó a operar en octubre del pasado año tras un retraso de dos años que dañó severamente los resultados de Airbus y que forzó a realizar una reestructuración de la compañía.

Gallois explicó que la nueva versión del A380 para 1.000 pasajeros había sido proyectada desde el principio, pero parece ser que no se tomará una decisión sobre su fabricación hasta 2010.

Fuente: El Economista.

Business Week: Boeing's tanker challenge.

Reuters: US arms buyer faults Boeing. This story quotes a Jacques Gansler of the University of Maryland who now sits on the Defense Science Board. If memory serves correctly, Northrop Grumman partially funded a study at the U of M Gansler oversaw on the tanker. No mention of this is in the story.

Note: Be sure and check out updates to posts below on the 787 and the best-and-final offer.

Update, August 31:

The Tacoma News Tribune has this long analysis on the tanker and whether Boeing should press on.

The company is actively talking about stretching the A380-800 to a -900, 1,000 passenger version. A new intereview with Louis Gallois, CEO of Airbus parent EADS, looks at 2010 as when this program might be launched. The story is here. Meanwhile, delivery of Emirates Airlines' second A380 is delayed.

For all those Airbus-Northrop critics who whine about the prospect Northrop (the prime contractor, let's remember) won't protect and honor US restrictions on selling the KC-30 or its components to nations hostile to US interests, here's a Reuter's story about how Airbus won't sell airliners to Syria as long as sanctions are in place.

Pratt & Whitney shipped its P1000G Geared Turbo Fan engine to Airbus for installation on an A340 test bed, according to this Flight International story. Airbus is considering offering the GTF on its A320 family.

Update 8:40 AM PDT, Aug. 29: EADS says there are no current discussions underway with Syria for a large Airbus order. The operative word in the statement is "currently."

Compartimentul de depozitare are o lungime de 37.7 metri, un diametru de 7.4 metri in care incap componenetele unui A320.

Mai multe detalii despre acest avion gasiti aici si aici.

The concept of the modern jet airliner was probably invented sometime in the 1950's, when the Boeing 707 was introduced. If you look at any other planes that hit the market since then, not much has changed. All planes look roughly the same, and operate in the same way. Sure, the Boeing 747 has a partial top deck, and the Airbus A380 has a full one, but it is still a round tube on the outside with rows of seats on the inside, and things all operate the same.

The look and feel of airliners did not change. And neither did the way we travel - this was introduced in the 1920's or 1930's, obviously based on the configuration of trains, trams and buses: sitting behind each other in neat rows, with seats close together to use the floor space in the most economical manner possible.

With the rise of passenger numbers world-wide, and the increasing importance of air travel globally, it seems amazing that the airline industry has not come up with better ways to travel halfway around the world than sitting in a seat for 16 hours or so, watching the back of another seat (at least, in economy class).

Perhaps it is not really surprising, as there are only two big players in the market (Airbus and Boeing) and so effective competition and innovation is perhaps less than what it would be if there were say 20 major aircraft manufacturers.

Yet it is time that we start thinking beyond the same old concept, in order to make air travel more comfortable in the long term, increase its attractiveness, even for economy passengers.

Seats in planes are close together because that way the airline gets best return on the available space. But seats are not comfortable on longer trips, and reclining them is not an option as it intrudes on co-passengers space, in the current configuration of the typical airliner.

So let's say we have the same space, but we want to use it in a way to allow more space to recline, even lay down. To start with, we can make some observations:

If you have ever travelled in a Boeing 747-100 (the first series; the last ones were taken out of service with most airlines around 10 years ago I think), you probably remember the magnificent "headroom" this plane had. The ceiling was very high and it gave an enormous impression of space.

Later models of the Boeing 747 (such as the 300 and the 400) have much less headroom. The space above was closed off, possibly to reduce the air-conditioning required or for similar reasons. However the space is still there.

There are other planes with a lot of headroom, such as the Airbus Beluga (which follows the same design concept as the Aero Spacelines "Super Guppy" that preceded it).

So - if planes were designed not with a floor in the middle of a round tube, but more creatively, taller, with different floors, even partial ones, that could have innovatively designed, light-weight "beds" stacked above each other, or seats that would tilt people back to a degree allowing for more space.

In some cities in the world (notably in Japan) cars are stacked in car parkings. A similar concept could be used in planes, where passengers could be stacked in fully reclining seats - for example, if someone wanted to recline, the seat would be lifted off the floor into the air, reclined, and stacked there. Up to three levels of stacking could be realistic, depending on the type of plane, its shape and the row configuration.

Obviously research would need to be done into the best combination of shape (of the plane) and ways to use the internal space. But I believe there is room for significant creativity, which will pay off because air travel is so massive now, and will become bigger still.

Other design concepts could be studied too, such as catamaran-type planes (with two or more connected hulls) which would allow for more design options, delta-wings or concepts derived from military designs such as the B2 bomber, which would allow odd-shaped aircraft to fly reliably.

The question remains: are current airliners of the best possible design, or can this be improved, particularly to improve passenger comfort and options on long-haul flights, without increasing manufacturing and fit-out cost of the plane to a significant degree? It won't be simple and will be a big change, but it will need to be done to further improve the quality and value proposition of air travel during this century.

If you like this idea and you work in a type of industry where this is relevant, I would be happy to discuss in more detail, answer questions or assist in other ways. For details and contact information please see the "About itimes3" page.

George Spark

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All usage of this site is entirely at users risk.

Boeing also threatened to no-bid the contract if it doesn't get its way on the request.

As readers know, we have always felt the KC-30 was the more capable airplane for the KC-X than the KC-767 offered by Boeing. We've sided with Northrop on any number of issues during the competition. But not this one, as we opined on August 22.

Northrop believes that Boeing is stalling on the bet that the Democrats will increase their majorities in the House and the Senate in the November election, and that this will increase Boeing's sympathy in Congress. We have no doubt this is part of the Boeing calculus. So what? EADS decided to locate the KC-30 production facility in Republican Alabama at a time when the Republicans controlled Congress. That was hardly a coincidence. Politics have permeated this process from the start and while there is plenty of reason to stop now, that's not going to happen.

Boeing, in its political gambit, is taking a risk that falls into the "be careful what you ask for category," however. While it seems certain Democrats will increase their majority in Congress, it's hardly a sure bet today that they will win the White House. Sen. John McCain is giving Barak Obama a run for his money and if McCain wins, this won't be good news for Boeing.

We see no harm in giving Boeing the six months. We think both sides will produce a better bid, and that's good for taxpayers.

Meantime, Steve Trimble at Flight International has an interesting take on his blog about how the re-bid can flip-flop some of the suppliers.

Update, 09:15 AM PDT Aug. 26: Innovation Analysis Group does a six minute podcoast with an Israeli reporter discussing Israel's plan to update its aerial tanker fleet. The air force could use the KC-135/707 for another 20 years if necessary, but it really wants to buy the same aircraft used by the USAF.

Update, 2:30 PM PDT Aug. 26: So far, no final RFP has emerged from DOD; it was thought that it might be issued yesterday. We're picking up rumblings that it may not come out this week.

Update, 350 PM PDT Aug. 26: Reuters now reports the final RFP may be issued next week.

Update, 12:00 PDT, Aug. 27: The St. Louis Post Dispatch has this piece looking at the strategic implications of the tanker competition.

so, duminica plec la NY, e a doua oara cand merg in acest oras, prima oara in 2005, noiembrie, cu Silviu si Irina, participanti si expozanti la AdTech. Atunci nu m-a dat pe spate orasul, poate pentru ca toata lumea mi-a facut capul mare despre cat de misto e NY ridicand prea mult asteptarile mele (tin minte ca am fost putin socat de mizeria de pe strada). Oricum atunci nu prea am avut timp de  plimbari insa am o intamplare haioasa cu un sofer de taxi roman pe care o s-o povestesc intr-un post.

Plec cu Delta, cursa directa, a mers cineva cu ei?, cursa care am inteles ca o sa dispara din peisaj la toamna ... in 2005 am mers, la dus, cu un Airbus nou de la KLM, super accesorizat, sa vedem cum e Boeingul 767 de la Delta.  Revin.

The downward sweep of the business cycle may have switched the aircraft trading industry from a Seller’s market to a buyer’s market beginning in December 2007.

The one certainty in the airline business is that every cycle is different and that holds true this time round.  However, the outcome of the cycle is always the same. The aircraft trading and financing market goes from peak to trough and back again over a period of months or years. It’s the downward speed and the change in the direction of the cycle this time rounds that has everybody scratching their heads. Countering that is the hope expressed by a minority of trend-analysts and fund managers that whilst they concede the economy was now in recession, the indicators are such they argue; that this one will be shorted lived and may have passed already.      

How do we know what market conditions really are?  Let’s review the facts.

Recession in the aerospace sector of the economy is characterized by significant economic decline globally but more specifically in the aviation business which includes the air transport industry, aircraft, engine and parts manufacturing, maintenance, overhaul and spare parts support services, aircraft financing. Leasing and trading. The Business Cycle Dating Committee of the U.S. National Bureau of Economic Research (NBER) is the usual reference source for recession data covering the economy. The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP that is the preserve of politicians. The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.  

The business cycle is the recurrence of periods of expansion (Recovery) and contraction (Recession) in economic activity with effects on inflation, growth and employment. A business cycle affects profitability and cash flow making it a key factor in the rise and fall of the inflation rate, which in turn affects return on investment.

Early warning indicators

A number of early warning indicators for recession that many observers are considering in the current cycle are:

1.       Is passenger and freight traffic growth slowing?

2.       Are load factors declining (or is surplus capacity increasing)?

3.       Is airline profitability decreasing (or are losses emerging)?

4.       Are airlines failing?

5.       Airlines not exercising aircraft order options?

6.       Is the aircraft backlog declining as a percentage of the global aircraft fleet?

7.       Is the discount rate of interest rising?

8.       Is the fear factor influencing market decisions?

A Buyers market is one where there is more supply of aircraft, engines and parts inventories than there is demand for them. Prices tend to fall allowing buyers to set the price and terms of sale. Bottom fishers begin to prevail as the downturn deepens.

A Stimulus package was introduced by the US government to counter the lowest consumer confidence level recorded in 26 years.  Gas prices rose to new highs in 2008. The tax rebates designed to stimulate spending were paid out in May.  An estimated 130 million taxpayers received rebates ranging from $600 to $1,200. If the rebate is targeted at food and gas then it is unlikely that it trickled into travel and tourism markets.

So where is the aircraft trading and financing market today?  

For several years now the ATA view is that: “while conditions were certainly improving in 2007, airline debt levels remained precariously high through 2006 and 2007 and into the first quarter of 2008, leaving the airlines especially vulnerable to jet fuel inflation, recession and exogenous shocks (e.g., terrorism, war, pandemics, natural disasters, biofuel and food rationing).” Going back to 2006 ATA economists believed it would take several years of airline profits to dig our way out of this hole, repairing balance sheets to the point where we can invest adequately for the future including the replacement of ageing fleets and expand  capacity to meet growth projections. Compounding ATA concerns in 2007 were the fears that the U.S. government, on hearing the first relatively positive news about the industry finances in five years, would respond with additional tax and fee burdens.” That is not now likely to come to pass as the losses in the first half of 2008 will likely wipe out the entire $5.5 million profits the global industry made in 2007.

According to ATA: “All of the traditional network carriers continue to simplify and shrink their fleets. Year-end 2005 figures show that American, Continental, Delta, Northwest, United, and US Airways combined mainline operating fleet was 20% (700 plus airplanes) smaller than on June 30, 2000.” In the first quarter of 2008 the industry reported a similar cut back in capacity – 753 commercial aircraft were offered for sale or lease. With changes in long-standing work rules forced on Labor thought the bankruptcy courts, labor productivity surged 30 percent and unions; pilots in particular, are now demanding payback from Wall Street. Network carriers alone have shed over 160,000 jobs since 2001, a 37 percent reduction, and more cuts are being announced as the poor quarterly reports pour in. Airlines did reduce costs by improving fuel efficiency. Fuel efficiency has risen 18 percent since 2000 but jet fuel costs have increased by more than 50%. The airlines also have reduced distribution costs, closed facilities and automated a number of customer-service functions. By necessity, especially with fuel prices at historic highs, the changes are numerous and ongoing.” According to an ATA sample of the financial reports of 45 major global (passenger) airlines, fuel replaced labor as the largest single cost item for the global airline industry in 2006, for the first time ever! It now account for almost 40% of operating costs. Yields did improve in recent years but total costs grew faster. To overcome the surge in fuel costs carriers like Delta make the case that fares need to increase by 20% until fuel prices fall back to 2005 levels.

The most telling figure is that the number of commercial aircraft offered for sale or lease is up 13% in the first quarter of 2008, and breached the 1,000 mark in the second quarter and at the current rate the number of commercial aircraft on the market could exceed 1,500 aircraft by the end of 2008.

Giving Boeing six more months to come up with a revised bid is a prudent and reasonable thing to do. Here's why.

1. Why not? It gives the appearance of fairness and the fact of fairness. Besides, at the EADS media day immediately preceding Farnborough, EADS North American COO John Young predicted the process would take to March anyway. What's three more months after that?
2. Boeing and Northrop will have to "sharpen their pencils," as DOD procurement chief John Young (no relation to the EADS-NA John Young) put it, and come up with a better price, benefiting taxpayers.
3. Northrop and Boeing may sharpen the technical characteristics of the airplanes, providing a better product for the Air Force. We think a KC-777 is a non-starter--it's just too big for the KC-X (it's better suited for the KC-Y or KC-Z, as our chart on our Corporate Website this week shows). The 767-400 is the only logical alternative Boeing has to offer for the KC-X competition, even if it still falls short compared with the KC-30 (also see the chart). But what if Northrop responds with a KC-30 powered by the fuel-sipping GEnx engine? This cuts the KC-30 fuel consumption by 15%, providing a better life-cycle cost and thus benefiting the taxpayer. Airbus already did the analysis of an A330-powered GEnx airplane when it first proposed Version 1 of the A350. The GEnx is now certified for the 787, so certifying it for the A330 should be of little concern. We'll call a GEnx-powered KC-30 the "KC-35."
4. Northrop could propose a "KC-33," a tanker based on the larger A330-300, though we don't think that's necessary.
5. Boeing's "KC-764" could be proposed with the GEnx, which would improve the performance of the 767-400 as well as the fuel economy. NA KOA (remember them?) proposed such an airframe-engine combination as part of its response to the Request for Information from the Air Force at the start of Round Two of the competition, and it had been in touch with Boeing to partner with Boeing on such a project, so there is already some research completed on this. (NA KOA really wanted to offer a tanker based on the 747-400, readers will recall, and filed a protest with the GAO when Boeing refused to go along. The GAO dismissed that protest and last month dismissed NA KOA's request for reconsideration.)
6. Adding six months to the process won't make any difference in the operation of the KC-135 fleet.

Giving Boeing another six months will likely produce better pricing, perhaps a better plane and perhaps better life cycle costs. DOD should grant Boeing's request.

Update, 2:00PM PDT: IAG has a new podcast with Boeing IDS spokesman Dan Beck on the Boeing request for six more months.