From Irish airline Ryanair, a few weeks back…
In response to media reports today 23 Jan, Ryanair’s Stephen McNamara said:
“Don’t believe all of what you read in the press. Michael O’Leary confirmed in Rome yesterday (22 Jan) that there is no aircraft order imminent and none that is expected until perhaps the end of calendar 2013 or early 2014, at the earliest.”
From the newswire on Wednesday… Read more
Boeing has struck a four-year deal with its biggest union that would protect production from strike action and end a high-profile attempt to force the aircraft maker to close a new factory, the FT says. The company was hit by a damaging 52-day strike in 2008, the last time the contract was up for renewal, which cost the company about $5bn in lost revenue, halted production of all its commercial aircraft models and caused delays to the introduction of the 787 Dreamliner. If members of the International Association of Machinists agree to ratify the deal, the union has agreed to drop its grievance against the company over a new 787 factory in South Carolina, which is at the heart of a dispute between Boeing and the National Labor Relations Board that has been widely cited by business in the US as an example of regulatory over-reach.
Boeing on Sunday won its single largest ever commercial aircraft order when Emirates, the fast-growing Gulf carrier, announced it would buy at least 50 twin-aisle passenger airplanes from the US manufacturer, the FT reports. The order for 50 Boeing 777 long-haul aircraft is worth $18bn at list prices, a record contract by value for the US company. Unveiled at the Dubai air show, the deal provides a much-needed boost for Boeing, which has been badly trailing Airbus – its arch rival – in the number of orders won this year.
China Eastern Airlines Corp. dropped an order for 24 Boeing 787 Dreamliners in favor of 45 smaller 737s after the larger jet’s delivery was delayed and a weakening economy hurt demand for long-haul air travel, Bloomberg reports. The carrier will pay “significantly” less than the 2008 catalog price of $3.3bn for the 737s and it will get a “certain amount of indemnity” from Boeing, the airline said in a statement on Monday. The basic prices for the 737 and 787 orders are “comparable,” it said. The Shanghai-based airline is also returning five A340-300s to Airbus SAS in exchange for 15 smaller wide-body A330s.
US airlines contemplating a splurge of spending on new aircraft may struggle to secure the jets they want, according to senior industry executives, as record backlogs at leading manufacturers such as Boeing and Airbus squeeze out new orders, the FT reports. Since the start of the year a number of US airlines have begun to examine their fleets, spurred by high fuel costs. American Airlines is in private talks with manufacturers to buy several hundred jets, while Delta Air Lines has publicly asked makers to pitch for a fleet of up to 200 aircraft. Still, US carriers have left it late to begin re-fleeting. Airbus and Boeing are ramping up production as fast as they can, aiming to produce more than 40 of their workhorse single-aisle aircraft every month by 2012 and 2014 respectively. And while they are eager to win extra business, record order books mean that production slots are limited. Bernstein Research estimates that at current rates it will take Airbus and Boeing between seven and eight years to work through their backlogs.
US airlines contemplating a splurge of spending on new aircraft may struggle to secure the jets they want, according to senior industry executives, as record backlogs at leading manufacturers such as Boeing and Airbus squeeze out new orders. The FT says since the start of the year a number of US airlines have begun to examine their fleets, spurred by high fuel costs. American Airlines is in private talks with manufacturers to buy several hundred jets, while Delta Air Lines has publicly asked makers to pitch for a fleet of up to 200 aircraft. Still, US carriers have left it late to begin re-fleeting and record order books at Airbus and Boeing mean that production slots are limited, despite a ramping up of output.
Airbus and Boeing have declared their almost total dominance of the market for large commercial aircraft is over. Speaking on the first day of the Paris Air Show, Jim Albaugh, head of Boeing’s civil jet division, made the frank admission as Brazilian, Chinese, Canadian and Russian companies are all set to enter the 100-seater- plus market with jets of their own in the next five years. “The days of the duopoly with Airbus are over,” he said.
Government and industry safety officials haven’t yet pinpointed the cause of a five-foot gash that opened in the fuselage of a midair Southwest Airlines jet, and the carrier said Sunday it expects many of its oldest Boeing 737 models to stay grounded for inspections for at least two more days, the Wall Street Journal says. Southwest voluntarily stopped flying 79 of its oldest 737 models, which account for nearly 15 per cent of its fleet, in the wake of the incident. The Seattle Times adds that cracks have been found in at least two other Southwest Boeing 737-300s. Boeing is developing a “service bulletin” strongly suggesting immediate checks on all similar models with comparable flight time and age.
Boeing has clinched a fiercely contested contract to supply the US Air Force with refuelling aircraft, beating rival EADS, the European aerospace and defence company, to win the $35bn prize, the FT reports. The victory caps a decade of false starts, political controversy and international intrigue over which of the two dominant global aerospace companies would eventually build a new fleet of “flying petrol stations” for the US military. Bloomberg adds that the Boeing win was a surprise for the aerospace industry.
Boeing has won a fiercely contested contract worth at least $35bn to supply the US Air Force with refuelling aircraft, beating rival EADS, the European aerospace and defence company, reports the FT. On Thursday, the Pentagon said Boeing was the “clear winner” in the contest and awarded it a $3.5bn development contract to deliver the first 18 tankers by 2017. The move effectively guarantees it the right to build at least 179 aircraft worth $35bn. Follow-on orders could bring the total contract value to more than $100bn. The NYT however warns that the decision – “a surprise twist in a long-running saga” – could face opposition from lawmakers who were counting on EADS’s promise to build an assembly plant in Alabama.
The US government has expressed doubt about the suitability of corporate partnership with an Indian state aerospace company as Boeing and Lockheed Martin bid to supply New Delhi with 126 strike fighters, reports the FT. The US is pitching for what is one of the world’s largest military contracts, worth $11bn. Boeing’s F/A-18 Super Hornet and Lockheed’s F-16 Super Viper are vying with the Eurofighter Typhoon, Saab’s Gripen, Dassault’s Rafale and Russia’s MiG-35 in a competition expected to be decided this year.
Boeing expects earnings to fall by up to 15 per cent this year compared with 2010 as the cost of delays to its troubled 787 Dreamliner starts to become clear, reports the FT. The world’s second-biggest aircraft maker by sales last week revealed the seventh delay to the 787 programme – a further six-month postponement until the third quarter of this year – meaning first deliveries will be more than three years later than originally planned.
US and Chinese officials touted a $45bn package of export deals on Wednesday to coincide with the state visit of Hu Jintao, the Chinese president, but the largest contract was in fact a reiteration of a previously announced order, notes the FT. US companies have been critical of China in the past 12 months, pressing the administration of Barack Obama to toughen defence of their intellectual property rights and their ability to access lucrative Chinese government procurement contracts. To smooth the waters, the Chinese president met the chief executives of high- profile US companies on Wednesday such as Jeff Immelt of General Electric, Steve Ballmer of Microsoft and Lloyd Blankfein of Goldman Sachs. The export package includes a $19bn order for Boeing aircraft, 70 extra contracts involving 12 US states worth $25bn and a series of investment deals. Combined, the deals will support about 235,000 US jobs, the White House said.
Boeing has announced a further delay of at least six months in the delivery of its long overdue 787 Dreamliner passenger jet, the seventh postponement of the troubled aircraft in three years, the FT reports. Japan’s All Nippon Airways, the first customer for the new jet, should now receive its first 787 in the third quarter of this year, not, as Boeing had previously promised, in the first quarter. An electrical fire on a 787 test flight in November caused the latest delay, which Boeing said was “not expected to have a material impact on 2010 financial results”. The fire led some analysts to predict that deliveries could be delayed at least six months or possibly until 2012.
Boeing has announced a new delivery delay of at least six months for its long overdue 787 Dreamliner passenger jet, the seventh postponement of the troubled aircraft in three years, the FT reports. Japan’s All Nippon Airways, the groundbreaking jet’s first customer, should now receive its first 787 in the third quarter of this year, Boeing said. It had previously promised to hand one over in the middle of the first quarter of 2011. An electrical fire on a 787 test flight in November caused the latest delay, which Boeing said was “not expected to have a material impact on 2010 financial results”. The fire led some analysts to predict that the first deliveries could be put back at least six months and possibly until 2012.
European jet maker Airbus has won what it says is a record deal to sell 180 aircraft to the Indian budget airline IndiGo, reports the FT. The order, worth $15.6bn at advertised prices, includes 150 of Airbus’s new A320 NEO jets, a fuel-efficient variant of its popular A320 jet, which dominates the skies along with the 737 group of planes built by US rival, Boeing. The deal ends industry speculation that Airbus is struggling for orders for its new model, announced late last year. The deal, which Airbus said is “the largest single firm order number for large jets in commercial aviation history” puts pressure on Boeing, which has been considering whether to revamp its 737s with fuel-efficient engines like Airbus, or develop a new plane.
The repeated delays affecting Boeing’s 787 Dreamliner are “a great disappointment”, said its first customer, All Nippon Airways, in a fresh sign of pressure on the maker of the world’s most advanced long-haul passenger jet. Japan’s second-biggest airline by revenues is still unclear about the precise cause of a fire on a 787 test flight earlier this month, and was pressing Boeing to say whether it would result in further delays to the jet, said Shinichiro Ito, ANA chief executive. “We are pushing them to present the detailed cause of the irregularities,” Mr Ito said in an interview with theFinancial Times Financial Times in London. “We are pushing Boeing to present the schedule for the delivery as soon as possible.” Mr Ito said ANA, which was supposed to get the first of the 55 Dreamliners it has ordered more than two years ago, had been forced to revise fleet retirement plans and take other steps to fill the gap caused by the delays to the 787.
The head of Airbus has lashed out at the “absurdity” of the prolonged aircraft subsidy row between his company and Boeing, its US rival, saying both sides had taken state aid and the only winners were likely to be their emerging rivals in China and Russia, reports the FT. In an unusually frank assessment of the six-year World Trade Organisation battle between the US and European Union over the funding of their respective aircraft-makers, Tom Enders, chief executive, said the WTO had, unsurprisingly, found “both are guilty”. The WTO has issued a series of rulings in the cases the EU and US launched against each other in 2004, but with no end to the fight in sight, many argue the only feasible resolution lies in a negotiated settlement.
The head of Airbus has lashed out at the “absurdity” of the prolonged aircraft subsidy row between his company and Boeing, its US rival, saying both sides had taken state aid and the only winners were likely to be their emerging rivals in China and Russia, reports the FT. In an unusually frank assessment of the six-year World Trade Organisation battle between the US and European Union over the funding of their respective aircraft-makers, Tom Enders, chief executive, said the WTO had, unsurprisingly, found “both are guilty”. “Let’s be honest about it, the simple truth is, in the aerospace or aeronautic business, none of us, none of the companies that play a role in it, has been growing without any government support,” Mr Enders told an Aviation Club lunch in London. “So let’s accept reality.” The WTO has issued a series of rulings in the cases the EU and US launched against each other in 2004, but with no end to the fight in sight, many argue the only feasible resolution lies in a negotiated settlement.
Boeing has postponed the first of its 787 Dreamliner deliveries to the first quarter of next year, adding to two years of delays, Bloomberg reports. The firm cited testing failures for an engine unit produced by Rolls Royce in its announcement on Friday. New delays will force changes to carrier operations, leaving Boeing at risk of further compensation claims from airlines. Boeing had already warned of other technical hitches that might hold back roll-out of the Dreamliner, the WSJ adds.
The European Union has appealed a World Trade Organization ruling against EU government aid given to Airbus, a subsidiary of EADS, the Wall Street Journal reports. The move follows the US government’s winning of a case three weeks ago in which it claimed the European Union’s support to Airbus was disadvantaging US rival Boeing in the airline market. The paper says EU officials said at the time they had no intention of suspending the aid and had hinted strongly about an appeal.
Emirates, the Dubai-based airline, on Monday announced a $9bn order for 30 Boeing 777 passenger jets, making it the biggest deal so far at the UK’s Farnborough air show, reports the FT. The agreement follows an $11bn order for 32 Airbus A380 superjumbos by Emirates at the Berlin air show last month. According to the Telegraph, that brings Boeing’s tally for the airshow to 70 orders so far, still far behind Airbus’s 122 orders, which is already close to the airline’s 130 target for the week. In leasings, Bloomberg reports General Electric’s GECAS has ordered 40 Boeing 737-800s and 60 Airbus A320s, in deals collectively valued at $8bn.
Emirates, the Dubai-based airline, announced a $9bn order for 30 Boeing 777 passenger jets, making it the biggest deal so far at the UK’s Farnborough air show. The agreement follows an $11bn order for 32 Airbus A380 superjumbos by Emirates at the Berlin air show last month, the FT reports.
Shares in aircraft maker and Dow constituent Boeing fell 44 per cent on Monday before NYSE Euronext and Nasdaq OMX Group cancelled trades, Bloomberg reported. Apparently errant orders sent the quote to a low of $38.77 during early trade – compared with a quote of 68.77 on Friday.
The US Department of Defence gave EADS, the European conglomerate, a chance to overcome Boeing in a contest for a $50bn air tanker contract by announcing on Wednesday a probable two-month extension to the tender, according to the FT. The move came a day after Nicolas Sarkozy, the French president, who had previously denounced the Pentagon’s bidding process as unfair and protectionist, discussed the tanker deal with President Barack Obama in the White House.
Boeing will take a $1bn charge in the third quarter on its 747-8 programme – the updated and stretched version of its 747 jumbo – making it the second high-profile new aircraft project to hurt the US group’s profitability in recent months. Tuesday’s announcement was another setback for the world’s second-largest aircraft-maker after problems on its 787 Dreamliner programme.
Airbus rival Boeing‘s troubled 787 Dreamliner looks unlikely to make a profit for at least two years after its first delivery, as the aircraft-maker warned on Wednesday that the programme could make a loss in its initial stages. Boeing is poised to announce the details of the fifth delay to the 787 programme after discovering weaknesses in the structure where the wings join the body, the FT said. Although it has repeatedly stressed the fault can be fixed using a relatively minor technical solution, Boeing is gearing up for significant financial implications because of the cost of solving the problem and penalties to customers.
The Paris Air Show starts next week, on June 15, and is traditionally a chance for aircraft manufacturers to show off new wares while one-upping each other with aircraft order announcements. But with their major customers in turmoil, this year’s show may be a rather dismal event for commercial planemakers.
In fact, UBS are estimating there are 1,300 too many aircraft in the aviation system, representing industry overcapacity of about 8 per cent. It hardly bodes well for aircraft orders. And in 2010, things will barely improve, according to the bank. There will still be 1,100 too many planes. Read more
Like the Japanese sport of sumo wresting, the art of placing an aircraft order is about two things — timing and bulk.
United Airlines may have perfected both aspects. From the Wall Street Journal: Read more
On Monday, we mentioned RBS’s role in financing the purchase of Phenom aircraft for a new business jet operator.
Dublin-based RBS Aviation Capital leases and finances aircraft and engines, with ownership of 372 aircraft and loans secured against some 320 planes, according to its website. All together its total lending and owned assets amount to some $12bn. Its customers include Virgin Atlantic, BMI and EasyJet. Read more