Posted on 06/12/2005 6:43:05 AM PDT by Arkie2
The 2005 Paris Air Show was supposed to be a triumph for Airbus. Opening tomorrow at Le Bourget airfield, the event was to be a backyard showcase for the new A380 superjumbo jet and an opportunity for the European jet maker to once again upstage Boeing.
Instead, on the eve of the show, Airbus is struggling with a rash of bad news and straining to prove it can match Boeing's 787.
It's a welcome change for Boeing, flush from its recent run of jet orders. This may be its most angst-free air show in years.
Doug McVitie, a former senior salesman at Airbus and now managing director of France-based industry consulting firm Arran Aerospace, thinks Airbus' run of besting Boeing in orders every year since 2001 may be over.
"It couldn't last," McVitie said of the European ascendancy. "They have lost their way."
As for Boeing, he thinks the Americans in Paris can afford to be cocky.
"A 'Bring it on' attitude might be realistic," he said.
Because the balance of power may be tilting Boeing's way again, the real focus of the show will not be the just-debuted A380 but the unlaunched A350 — Airbus' proposed rival to Boeing's new 787.
Everyone had expected Airbus to launch the A350 at the Paris show, but last week majority owner EADS surprised the industry by saying the launch wouldn't come until September.
The big question is, why?
Held every two years, the Paris Air Show is the most important aviation trade event of 2005. The mood will be much improved since the last time around.
Two years ago, upset over lack of French support for the war in Iraq, the Pentagon sent no senior people and no U.S. military airplanes.
This year, Boeing-built F/A-18E/F Super Hornets will roar back into the sky over Le Bourget, showing off against the French Rafale, the Swedish Gripen and the British-German-Spanish-Italian Typhoon Eurofighter.
The show will be back to full strength on the commercial side, too, with a global recovery of the industry well under way.
Boeing will display its new ultra-long range 777-200LR, which had its maiden flight in March. Also on ground display: the first 767 tanker — for the Italian Air Force — and a China Airlines 747-400 freighter.
In its presentations to journalists and industry insiders, Boeing can focus on trumpeting the outstanding progress of the 787, both in sales and in the manufacturing plan.
As for news, that is expected to be relatively low-key.
New jet news
According to an insider, Boeing may announce in Paris a previously undisclosed target date of early 2007 for entry into service of a new higher-capacity derivative of its narrow-body jet, the 737-900X. And a few Boeing customers may choose to announce orders, either for the 787 or for the new 777-200LR freighter.
Boeing is negotiating 777-freighter deals with American air-cargo hauler Atlas Air, Gemini Air Cargo, Southern Air and World Airways, as well as Eva Airways of Taiwan and both Emirates and Etihad of the United Arab Emirates, the insider said.
But those talks are ongoing, and no rush of Boeing orders is expected.
"They don't have a wow factor," said Scott Hamilton, founder of Seattle-based aviation consultancy Leeham.
Some observers had thought Boeing might use the show to announce it would go ahead with the 747 Advanced, a new version of the jumbo jet that will incorporate 787 engines and luxury Sky Suites for first-class passengers on the upper deck.
Taiwan-based China Airlines is one of the airlines talking to Boeing about the 747 Advanced, in both passenger and freighter versions.
According to the Boeing insider, the company also has been negotiating deals for the freighter version with several mainland Chinese carriers, Singapore Airlines Cargo, Abu Dhabi-based carrier Etihad and Luxembourg-based Cargolux.
GE tapped
Boeing has already decided General Electric will be the sole engine supplier to the new 747 program, according to an internal company document obtained by The Seattle Times, and a go-ahead is all but certain.
However, the formal 747 Advanced launch is not expected until the end of summer. In Paris, Boeing executives seem content to float on the tide of recent good news.
"Boeing doesn't have to make a big splash," said McVitie of Arran Aerospace.
In contrast, Airbus must.
Despite the star billing of flying the A380 — the world's largest commercial jet, which flew for the first time in April — Airbus suddenly looks vulnerable.
The company's preparations for Paris have been seriously marred by a debilitating Franco-German leadership struggle. Airbus is still without a chief executive as the show begins.
Then there are the airplane problems. For months, Airbus has repeatedly lost to Boeing in sales campaigns; the A350 plan is unclear; and the A380 will be seriously delayed entering service.
Skeptical of profit
Aaron Gellman, a professor of management and specialist in transportation studies at Northwestern University, blames Airbus' stark reversal of fortunes on the decision to build the A380, a hugely expensive project he believes will never make a profit.
Gellman, who has consulted for Boeing and authored the 1990 U.S. government report that first attacked Airbus' use of state subsidies, compares the A380 to the Channel Tunnel between Britain and France.
"They can't close it down and they can't make any money running it," he said.
"We're seeing the first episode in a long-running saga called Desperate Manufacturer," he quipped. "ABC may have the rights to it."
Richard Aboulafia, a U.S. industry analyst with The Teal Group and co-author with Gellman of a critical analysis of the A380's economics, sees Airbus in trouble but hardly out of the game. He believes the key to Airbus success in Paris in still the A350.
"There's just so much at stake for them," Aboulafia said. "I have to believe they'll get it right this time."
In Toulouse Friday, Airbus officials insisted there will be plenty of good news about the A350 in Paris to impress everyone.
"It's happening. We have many, many orders, they are solid. (The launch) will be in September," said Debra Batson, an Airbus spokeswoman.
100 orders promised
Airbus officials confirmed that chief salesman John Leahy will deliver more than 100 orders in Paris, as he promised.
The new US Airways will have 20 of those, but Airbus bought those orders with a loan to lubricate the merger with America West. Middle East carrier Emirates was expected to provide the largest order of around 50 airplanes, but has delayed its decision until the fall.
So analysts will look to see if there is a big order from International Lease Finance Corp. (ILFC), the world's second-largest aircraft lessor.
Because ILFC already has 30 A330s on order, it could easily convert those to A350s. If Leahy has persuaded ILFC chief Stephen Udvar-Hazy to buy more A350s beyond that, it'll be a significant win.
Adam Pilarski, analyst with consulting firm Avitas, said many in the aviation world consider Udvar-Hazy the best market maker in the business.
"If he bought it, that's an unbelievably strong endorsement," Pilarski said. There are rumors the A350 may win Qatar's 60-airplane deal, stealing it from under the nose of Boeing, which had pushed hard to win that order for the 787.
Leahy also may have some big European A330 operators lined up. But only big ILFC or Qatar orders may have the kind of wow factor he needs.
Funding is the issue
Airbus initially pitched the A350 as an A330 derivative. Now Leahy is claiming it's an "all-new" plane with a composite rear fuselage, composite wings and the engines designed for the 787.
"It's a new aircraft with 90 percent new parts," said Thierry Caillard, an Airbus manufacturing manager in Toulouse.
Airbus said it has the plane's customers and design configuration essentially settled — so why not launch it officially?
The issue appears to be money. It's the one piece of the puzzle that isn't in place.
The A380 program has swallowed up Airbus resources, and with the first superjumbo deliveries delayed, so are the initial revenues from that plane.
Airbus has asked the British government for a subsidy of almost $700 million to make the A350 wings in Wales, and it wanted an answer by the Paris Show, according to The Sunday Times of London. Airbus was threatening to make the wings elsewhere if it didn't get the money.
Clearly, Airbus didn't get what it wanted in time for Paris. That makes the smoldering trade dispute between Airbus and Boeing a critical factor in the Europeans' new airplane program.
Just as the show opens, a World Trade Organization panel in Geneva is expected to begin considering the U.S. case against Airbus subsidies — a move aimed squarely at stopping European government loans to the A350.
Suggest they park the 380 next to the Spruce Goose.
I can't help but wonder if the recent spate of Boeing sales are being driven by the Airbus jet that lost it's tail fin over the Caribbean. The French can bribe local airline executives and their supervising politicians -- but no bribe is big enough if the product is going to crash. A tank that breaks down is not a big problem since most of them outside the US/UK/Australia are ever going to be used. A passenger jet liner that breaks down in air is going to publicly kill the passengers and the owning airline's reputation.
Yeah, and it's going to be six months late being delivered. That delay may be the first of many. I think Airbus has hit the shoals with this plane and Boeing will soon be announcing the enhanced 747 which may actually come to market ahead of the A-380.
Don't forget that the American Airlines plane that broke up after takeoff from JFK after 9-11 was an Airbus. Even though the accident report cited overly aggressive control inputs by the F/O there was, and is, a suspicion that the composite rudder failed due to design error.
My personal name for the A380 is "The Albatross."
I think it looks like world's largest albatross, bird of ill omen. May it be the proverbial albatross around Airbus' neck.
Of course, if there is a problem, is it really a design error? Or is it a material problem that's just now coming out as we get enough usage hours on composite wings and tails?
Hmm, perhaps this Boeing turnaround is really due to it's ex-boss playing French leader with his subordinate? *g*
But I think Airbus learned its lesson: the tail design on the A330/A340 models are vastly stronger and subject to more stringent maintanence procedures, and Airbus has been extremely careful with the A380 tail design for the very same reason.
Now, if Boeing just had the guts to bring the 787 in over Paris with a full barrel roll...
A380:
What is amazing was the media tsunami that happened a few months ago with this plane. It was 380 this ... air bus that... now you look below the surface and there is a stench of death...
Boeing has made huge stides in efficiency recently, outsourcing much of their engineering and manufacturing work to Russia, Japan and India. Where a few years ago it would take Boeing 22 days to build a typical commercial jetliner, that should come down to just 3 days in the near future due to "just-in-time" deliveries throughout their entire supply chain.
Each probably about as effective as a pop gun in the hands of a Quaker.
The Gripen is actually a pretty competent bird, roughly as capable as one of our F-15E's.
The Rafale is still having problems, and the EF2000 isn't getting traction either.
I read a figure almost twice that from European papers with a total launch aid request of $4bln.
You know, all passenger aircraft manufacturers have produced products that have had serious flaws and many have even crashed. Boeing certainly has had its share of screw-ups.
Despite hating the French government and the arrogance of most of its citizens, I happen to LOVE Airbus aircraft. To be honest, I feel more comfortable in them than in Boeings. The interiors of all that I've ridden in were much nicer.
Sure, Airbus pays bribes to get sales - common business practice in Europe (and is expected in Asia) - but this doesn't detract from the fact the quality and regulation-obsessed Europeans have produced a mighty-fine aircraft.
I for one happen to believe Boeing has gotten sloppy when its American rivals went the way of the dodo. Competition is good for all of us. It is in everyone's best interest to have two major rivals competing to make the better product.
This should be good theater.
I'd vote for a tailslide or hammerhead stall.
Didn't that 707 test pilot decide to do his roll over Seattle on his own authority and guts?
As someone said yesterday "Airflop380".
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