Mon Dieu!
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.
YES! there is a video of it posted here somewhere.
IT IS AMAZING to see a full passenger play do the manuver.
I just wish they would have those planes do rolls during an airshow.
THAT would slap airbus silly since airbus has neutered controls.
Airbus in the long run is just another Concorde project -- the politicians are paying the bills (with the taxpayer's money) so they can't help but to interfere.
Nothing like being gutsy over a populated area. Sheesh, if he wants to show off, do it over the desert or ocean.
The Spruce Goose could fly just fine if bigger more powerful engines were fitted to it.
Boeing's problems began when it purchased McDonnel Douglas for their military sales division. Boeing wanted to expand their military sales arm, in particular they hoped to win the strike fighter competition. They lost sight of their core business, commercial aircraft, and it nearly cost them their existence.
Fortunatlely, they seem to have gotten past stealing corporate secrets, bribing pentagon officials, relocating headquarters for show and any number of other things they've done recently which took them off their game.
"Nothing like being gutsy over a populated area. Sheesh, if he wants to show off, do it over the desert or ocean."
Heck, it's only Paris and Seattle.
I don't think the Thunderbirds or the Blue Angels would pull in many people over the ocean although plenty of folks would drive into the desert to watch them. ;^)
I've read the 707 test pilot did it a couple of times. Never with an airline name painted on it, tho.
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