Posts Tagged ‘EADS’

Surprise! Boeing wins $35 billion tanker order

February 25, 2011

Airbus will no doubt protest but if they really expect to displace Boeing for the US Air Force  tankers they are living in a dream world. They should have seen the writing on the wall when the whole contract was re-tendered even after they had won the order for 179 aircraft in 2008. There is no US politician who would have the courage to place such an order outside of the US.

Bloomberg reports:

Boeing Co., the sole supplier of aerial refueling tankers to the U.S. Air Force since 1948, beat European Aeronautic, Defence & Space Co. for a $35 billion program to build 179 new tankers, the Pentagon said yesterday.

It was the Chicago-based company’s third try at the contract since Congress and the Air Force first proposed the tanker replacement program in late 2001 — a contest in which Boeing was viewed as an underdog, said an analyst.

“Boeing’s victory was a major upset, and not at all what the industry was expecting,” Richard Aboulafia, a military aircraft analyst with the Fairfax, Virginia-based Teal Group, said in an e-mail.

Boeing will manufacture basic 767-model aircraft in Everett, Washington, and convert them into tankers in Wichita, Kansas, during the first stage of a three-part Air Force program stretching decades to replace its tanker fleet.

The initial contract for the development phase was valued at $3.5 billion. The entire first phase covers 13 production lots through 2027. The Pratt & Whitney unit of United Technologies Corp. will provide the engines. Boeing says the win will create and sustain 50,000 jobs among 800 suppliers in 40 states.


$35 billion US tanker decision imminent: Boeing and Airbus prepare to protest a loss

$35 billion US tanker decision imminent: Boeing and Airbus prepare to protest a loss

February 24, 2011

The much awaited winner of the order for 179 tanker aircraft for the US Air Force worth about $35 billion will be announced after markets close this evening (Thursday 24th February) reports Reuters (via the NYT):

KC-767-200ER/300ER is a credible replacement for the KC-135R: image

The decision, expected after U.S. financial markets close, marks another pivotal point in the Air Force’s nearly decade-long struggle to begin replacing its 50-year-old KC-135 Stratotankers, which refuel fighter planes and other aircraft in mid-flight to extend the range of military operations.

But analysts say there is no guarantee an epic industry battle will end there. The losing bidder is likely to file a protest that could delay — or overturn — the contract.

The competition to supply 179 air-to-air tankers has sparked sporadic transatlantic tensions and clashes in Congress among lawmakers eager to bring jobs to their states. …. Now, the Pentagon is close to giving its decision on the third attempt to replace aging Eisenhower-era tanker planes and senior defense officials say the choice between Boeing and EADS could come on Thursday.

A330 MRTT tanker (EADS)

A330 MRTT tanker (EADS)

Both Boeing and EADS, through its North American subsidiary, are offering specially adapted versions of existing twin-engined wide-body passenger jets: the Boeing 767 and the Airbus A330.

Analysts widely expect the losing side to file a protest against the decision with the Government Accountability Office, the arm of Congress which rules on federal contract disputes.

The Air Force has been trying since 2001 to begin replacing its Boeing-built KC-135 tankers.

An initial $23.5 billion plan to lease and then buy 100 modified Boeing 767s as tankers, fell apart in 2004. …. EADS, partnered with Northrop Grumman Corp, won a 179-plane deal in February 2008, only to have it canceled after government auditors upheld parts of a protest by Boeing.

Northrop subsequently pulled out, leaving the European aerospace and defense company to bid alone.

Rolls Royce engine failure will eat up $80 million of Qantas profits

February 17, 2011

Qantas half-year profits have already been hit to the tune of $55 million by the failure of the Rolls Royce Trent 900 and the subsequent grounding of their A380 aircraft in November last year. They also stated that there would be a charge of $ 25 million for the second half-year which gives a total cost to Qantas – for this financial year – of at least $ 80 million.

BBC News:

Qantas Airways said its first half net profits had risen four-fold, but it added that last year’s explosion in one of its Rolls-Royce engines had wiped off $55m (£34.4m). The breakdown led to the grounding of its A380 aircraft last year.

The Australian airline predicted 2011 full year profits would be much higher than last year. But it warned that these would be held back by high fuel prices and the recent floods in Queensland.

Qantas said there would be another $25m charge in the second-half results from the A380 problems.

Rolls Royce has already announced  a hit on profits for direct costs of £56 million (about $89 million) for the engine explosion and related events for the year till December 2010. No doubt the losses suffered by Qantas will be part of their compensation claim against the engine maker.

With compensation claims due also from Airbus (EADS), Singapore Airlines and Lufthansa and with the additional costs spilling over into 2011, the total cost of the engine mishap will likely exceed my estimate of  $300 million.

Estimated costs for Rolls Royce:

  • Direct costs $130 million
  • Indirect (servicing) costs thru 2011 – $50 million
  • Qantas claim – $70 million
  • Airbus claims – $50 million
  • Singapore Airline claims – $25 million
  • Lufthansa claims – $10 million

What impact the loss of potential sales could have is anybody’s guess – but it would be interesting to see if Pratt & Whitney shows a better than expected order intake.

Sarkozy pushes nuclear, arms deals on India visit

December 5, 2010
The Indian Air Force has the second largest fl...

IAF Mirage 2000H: Image via Wikipedia reports on the French President’s 4 day visit to India soon after the visits by President Obama and the Russian Prime Minister. The Chinese Premier is due next.

Close on the heels of India’s environment ministry clearing the last hurdle for French nuclear company Areva to supply six third-generation pressurised water reactors for a project worth Rs95,000 crore ($22 billion), French president Nicolas Sarkozy today kicked off a four-day visit to the country, pitching for new nuclear energy and arms contracts.

However, villagers in Jaitapur in Maharashtra, where the plant will come up, today staged a protest. Reports said at least 10,000 people turned up at the site to oppose the project.

Sarkozy, heading a large delegation of 7 ministers as also 60 business leaders, including the heads of aircraft-makers Dassault Aviation and EADS and Areva, to lobby for multibillion-dollar contracts for fighter jets and nuclear equipments, also stressed India’s increased stature in world affairs.

Although Indian officials said no defence deals will be signed during Sarkozy’s visit, French aircraft maker Dassault is hoping to secure a $1.2-billion contract to upgrade 56 Mirage-2000 aircraft that India bought from France in the 80s.

Dassault and EADS are vying with US and Swedish rivals for an Indian Air Force purchase order for 126 warplanes, for an estimated $11 billion.

“We all know how critical it is for India to ensure its energy security,” Sarkozy said in a speech at the Indian Space Research Organisation at India’s technology hub Bangalore.

Battle lines are being drawn: EADS + Airlines versus Rolls Royce

November 5, 2010

After yesterdays midair failure of a Trent 900 engine on a Qantas Airways A 380 flight the German press today are unanimous in blaming Rolls Royce (and thereby protecting Lufthansa and EADS). Qantas is also positioning itself and questioning Rolls Royce’s engine design.

Der Spiegel writes:

‘Airbus and Qantas Are Victims’ of A380 Engine Problem

While the incident may be damaging to Airbus, German editorialists argue that the Rolls-Royce engine is to blame.

But I think the airlines (Qantas, Lufthansa and Singapore Airlines) and the manufacturer of the Airbus A380 (EADS) cannot so easily paint themselves as victims and absolve themselves of all responsibility. It is the airlines who pressurise the engine makers and the aircraft manufacturers for never ending improvements in fuel efficiency. EADS can ill-afford to market a plane which does not have more than one engine supplier.

Der Spiegel continues:

Qantas Airways CEO Alan Joyce said on Friday that it did not seem to be a maintenance problem. “This is an engine issue and the engines have been maintained by Rolls-Royce since they were installed on the aircraft,” he told a news conference in Sydney. Joyce confirmed that the engine failure had caused damage to the plane’s wing. “That was part of what made this a significant engine failure,” he said.

The center-left Süddeutsche Zeitung writes:

“The problem is not that one of the Airbus A380’s engines failed. … What makes the emergency landing such a serious incident is that parts of the debris damaged the wing. … Rolls-Royce, the manufacturer of the engines, now has to ensure that such a thing never happens again, even if this means that the A380 is grounded for a time.”

“Airplane manufacturer Airbus, as well as the airline Qantas, are the victims here. Yet the failed engine will not do their image much good, following the dramatic images of the damaged aircraft that were seen around the world on Thursday.”

“The A380 was two years late coming to the market. The delay cost the company billions, caused an internal revolution and undermined confidence. … Yet, despite all the criticism, one must not forget that the airlines and passengers praise the aircraft: A380 flights, despite somewhat higher ticket prices, are always full.”

The Financial Times Deutschland writes:

“The engine blow-out on the Airbus A380 that forced the Qantas flight to conduct an emergency landing on Thursday is above all a problem for the engine manufacturer Rolls-Royce.”

“The disaster highlights the dilemma that the entire industry faces. … The necessary and correct demand to make modern aircraft with lower emissions is taking its toll.”

“No one would imply that the testing was consciously sloppy. However, it is obvious that when it comes to a flagship aircraft like the A380 there is immense pressure to get it on the runway as soon as possible. Those who demand more tests do not make any friends. The close call shows, however, how much is at stake.”

In the meantime Singapore Airlines has resumed A380 flights following checks of the aircraft’s engines, despite the head of Qantas saying a design fault may be to blame for yesterday’s engine failure on one of the Australian carrier’s A380s.

Shares of Rolls-Royce Group PLC continued to get battered by the market, losing another 2.7% over fallout from the midair failure of one of its engines on a Qantas Airways flight. They lost 3.3% in value yesterday.

Rolls Royce and EADS shares take a beating

November 4, 2010

London South East reports on the aftermath of Qantas grounding its A 380 fleet and Singapore Airlines delaying all A 380 flights for extra checks of the their Trent 900 engines:

Shares in Rolls-Royce fall 3.2 percent after Qantas Airways suspends flights of its Airbus A380 fleet after the failure of a Rolls Trent 900 engines triggers an emergency landing in Singapore.

Shares in Airbus parent EADS were 3.7 percent down after what is one of the most serious incidents for the world’s largest passenger plane in three years of commercial flight.

‘If it is a design fault on the engines it would be embarrassing because Rolls is the number two engine manufacturer in the world and has a fantastic reputation,’ says BGC Partners senior strategist Howard Wheeldon.

‘These type of things take a fairly lengthy time to investigate,’ he said, adding that ‘it will be costly to address those issues’ if it is a serious fault with the engine.

The intense competition between the two engines for the A 380, the Trent 900 and its rival the GP7200 manufactured by the General Electric/Pratt & Whitney Engine Alliance is centred around fuel efficiency. The GP7200 is generally thought to have a 1% advantage. It also seems to be the strategy for the U.S. engine makers to constantly maintain this performance gap over their competitor as each tries to improve performance.

From Aviation Week:

Of course Rolls-Royce disputes the existence of that fuel-burn performance lead and says its improvement plan for the Trent 900EP (enhanced performance) will lead to more substantial efficiency modifications by around 2013. Still in the early stages, these plans will incorporate advanced technology from the most recent iterations of the Boeing 787’s Trent 1000 and the Trent XWB for the A350.

The core of the package will be the introduction of elliptical leading-edge modifications throughout the entire compression system, including improved high- and intermediate-pressure (HP/IP) compressor blades and vanes. The modification, which also applies to the fan and outlet guide vanes, improves flow interactions by altering boundary layer thickness and increasing laminar flow. The changes are similar to elliptical leading-edge modifications made to the HP compressor introduced recently to International Aero Engines’ V2500 in the SelectOne program, as well as the Trent 700EP. The elliptical feature also is part of the baseline fan design for the Trent 1000 and XWB.

“The package includes tweaks to the air management system, and that also affects fuel burn,” says Crawford. “We’re very confident in being able to achieve the 1% post-2011. The program is already defined, the detailed design is being done and bits are in manufacture. Testing is next year and will cover maturity modifications to upgrade areas we’ve seen on early engines.” These include “potential ‘wear out’ areas we want to address, such as seal segments and optimized tip clearance.”

As with the Trent 700EP, the 900EP enhancement will be offered as an upgrade kit for existing engines. “The modifications are all optional and are completely interchangeable. You will get the full 1% if you install all the parts,” says Richard Keen, Airbus programs marketing director. “From 2011 this will be the production standard for all new Trent 900 orders,” he adds.

With the problems being experienced by the Trent 900 and also with the Trent 1000 for Boeing’s Dreamliner, one obvious question is whether the cut-throat competition for fuel efficiency is leading to a trade-off between efficiency on the one hand and reductions in clearances and compromises on wear considerations on the other.

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