Thursday, November 30, 2006

A350 Funding In Place: UPDATE

It's reported this afternoon that the EADS shareholders have reached an agreement on a $13 billion USD financing package that will let the board move ahead with the official launch of the A350WXB program tomorrow.

As expected, la belle republique is going to front some of the cash but how much is not yet clear. It is said EADS will fund the project initially from its own war chest to the tune of 4 billion euros and another 4 bn backed by state guarantees from the UK, France, Germany and Spain.

Stay tuned

Air France To Introduce A380 Narita Service in 2009

There's a report out yesterday that Air France announced that it's going to introduce service to Narita (Japan) in 2009 with the A380. The implications of this otherwise unremarkable report are, in fact, quite remarkable. I've linked to the Japanese website that reported this but the report's unreadable unless you've got some sort of translator thing going.

What's important here is that the aircraft will be configured for 444 passengers. Yes friends, this is the 555 passenger capacity, soon to be expanded to 850 or so A380 Albatross.

What this is telling the world, for those who take an interest in such things, is that the weight/payload equation on the A380 is emerging like Marley's ghost, rattling its chains and otherwise making itself obnoxious.

My old man used to say that one of the things that a fellow could not do was put eight pounds of sugar (well, he didn't say sugar but this is a family oriented blog) in a five pound bag, no matter how good his intentions were.

Tuesday, November 28, 2006

Memo to Airbus Employees: Don't Get Too Comfy

Usually, when The Maginot Line is getting ready to drop a bomb there's a bunch of feel good announcements that come before, talking heads deny everything and then the turd hits the fan along about the middle of the week. Well, we've had the feelgood announcements and the talking heads so here's what might be this week's drama.

In this case, there's a report out from Reuters that says that Airbus' boss Louis "Louie Louie" Gallois has said that The Maginot Line is going to outsource fifty per cent of the A350 airframe work (if it gets built at all). The only way The Maginot Line gets close to that figure is if they outsource all the product development to China and India. And if that's the direction they're going, Katie bar the door. You can kiss your jobs goodbye, fellows.

Sunday, November 26, 2006

A380 Albatross Update: Alles in Ordnung, Stupid!

There are a couple of interesting stories today that may prove to presage something interesting from Airbus next week. At least it's food for thought for idle speculators and sidewalk superintendents, of which I happen to be one.

I've noticed that whenever an important announcement is made by The Maginot Line, there's a pre-announcement buzz, the obligatory "Every problem is solved! Alles in ordnung, stupid!" announcement from one of the usual talking heads, and then along about Monday or Tuesday the poo hits the fan, or more appropriately, the bird hits the first stage of the compressor. the rumors, as yet unconfirmed. One is that China Southern, which holds a position for five A380s is going to dump the Albatross in favor of an order for the A350WXB....which means that they're hopping mad about not getting the hauling capacity for the 2008 Summer Olympics in Beijing and are raking The Maginot Line over the compensation coals.....that's an interesting rumor.

As far as the obligatory "Alles in ordnung, stupid!" message, the product marketing director of the A380 program told Gulf News that everything was wonderful, the wiring problems have been solved, fuel efficiency is 17 per cent better than the B747-800, and all they need to do now is rewire the 26 airframes that are sitting around waiting for it.

Inquiring minds need to know: where is Barbara Kracht?

I don't know about you, but tying up money in 26 airframes and then letting them sit for a couple years until they can be delivered is an interesting admission that says a lot about why Airbus needs money.

That's rework on a grand scale that Douglas could never have dreamed of, and it says a lot about the disconnect between engineering and production at The Maginot Line.

Stay tuned. Next week's likely to be interesting.

Say It Ain't So, Joe: EADS Funding UPDATE

Forbes is reporting today that EADS has contacted between five and seven Persian Gulf investment funds for help in financing the A350WXB. It's also mentioned that EADS will either increase its capital so as to bring in new money, or for the funds to buy a chunk of EADS.

Forbes also suggests that Dubai Capital Investments and/or Qatar Investment Authority, both state run funds, may well buy a chunk of the EADS Airbus unit.

Remember, you heard it here first. My money's been on Dubai since this story broke.

Friday, November 24, 2006

A350WXB Launch On Hold Says Les Echos

Reports are that the meeting of the EADS Board of Directors that was going to approve the launch of the A350WXB has been cancelled. According to Les Echos by way of Flight International, there is serious disagreement over how to fund the project in a manner that won't exacerbate the already simmering trade dispute with the US over subsidies, which is before the WTO.

This doesn't sound good. Stay tuned.

Tuesday, November 21, 2006

Internet Explorer 7: Don't waste your time

There are abouyt three people in the world who do not know that Microsoft introduced it's latest version of Internet Explorer, this time version 7.0. It's alleged to be a huge improvement, lotsa security improvements, and it's such an improvement that Microsoft is going to make it a Windows update.

Well. I tried it.

Don't waste your time or storage space messing with this. It looks pretty, I'll give it that. The screen presentation is nice, but it's clunky, with a significant number of unexplained crashes, slow page loads, and other problems that lead me to believe that it's just not ready for prime time.

I'm not one of the Firefox apparatchiks whose business it is to slag Microsoft-they're usually pretty good if a little bit slow off the mark. It's just not quite ready for seamless web noodling.
As for the 'security' issues: here's a deep dark secret. The only times any computers in this household got viruses was when I tried to look at websites where I probably shouldn't have been anyway. Spyware's unavoidable but manageable with Lavasoft's Adaware SE and Spybot-Search and Destroy. The virus problems are policed by AVG Free, which is reliable, free, and unobtrusive, unlike its commercial competitors from Norton with their constant requests for money.

So turn off the automatic updates, sit back, and wait until it's been fine tuned before you drop it in.

Removing IE7 is easy enough through the 'add and remove programs' feature. It'll revert to IE6.

Monday, November 20, 2006

A350 Launch Pending: UPDATE

Flight International is reporting today that there is going to be a delay of entry into service of a year or more beyond what was announced thus far for the A350WXB-no sooner than mid 2013.

That's nearly seven years, assuming there are no delays. Seven years. If that's the best that can come out of The Maginot Line, there'll be a lot of others heading for the exits before this is over.

We previously noted that the method of construction that John Leahy says that Airbus is going to use tells us that they have no confidence in monolithic carbon fiber composite technology. They're also choosing to give up on learning the technology so as to come up with a new 737 beater.....sheesh.

Film at 11.

A tip of the hat to one of my correspondents, who suggested that Maginot seemed to be a more accurate portrayal of what's happening over there at Airbus...we'll see how it hangs together.

Friday, November 17, 2006

Thai Airways: We Could Cancel

It's reported today that Thai Airways has advised da Festung in no uncertain termis it could well cancel its order for the Airbus A380, because of delays to that program.

Mr. Wallop Bhukkanasut, a highly placed executive at the airline has told Reuters thatlate deliveries would cause the airline to alter its business plan. He said that decision would be made early next year.

I do not think that it is going to take that long.

Leahy: A350 Launch Pending

It's been widely reported that the launch of the New! No! Better than new! Metal! No! Composite! No! Better the way only we Europeans can do it! A350WXB is pending this month. A few details have leaked out. According to Da Festung's chief cheerleader and salesman deluxe John Leahy, the aircraft will, indeed, be built of carbon fiber composite material, but unlike the integrated construction methods that Boeing is using, the A350WXB will be built using individual panels. This, Leahy says, is to facilitate repairability.

Further, he mentions that the Airbus engineering staff are convinced that the integral fuselage construction model is not the way to go and that easily replaceable panels are what is needed. I assume that this must be the three college student engineers in Finland who unaccountably did not get sucked into the A380 toilet.

This doesn't make a lot of sense. The integrity of the construction method is what eliminates the need for numerous heavy support structures in composite construction. It sounds as if Airbus will be merely substituting one skin material for another over structure, without taking advantage of the enormous strength potential inherent in integrated composite construction methods.

And that seems to be a bad way to go about it because it's the difference between true monocoque construction like the Supermarine Spitfire and scabbing covering over structure like the Hawker Hurricane. When we're talking about repair that necessitates replacing entire skin panels in large commercial aircraft anyway, those aircraft are either a) likely near the end of their economic life anyway or b) have been involved in accidents that necessitate large scale reconstruction of a problematic and time consuming nature.

The composite crowd over at Boeing are not the unschooled rookies and backwoodsmen that it is fashionable to refer to Americans as over in Europe. We heard this sort of thing before from Da Festung a couple iterations back when they said: "A composite A350? Never happen. Nope. Not in this life. You Americans don't know how to do it. When it's done you will really see us show you how it's done."

I'm quite sure that Boeing has composite structure repair procedure well in hand. So one wonders why Airbus wants to espouse this method of construction.

The answer seems clear-it's a lack of confidence. They don't believe it'll work and they're afraid of the technology down deep where it counts, and they don't want to invest the kind of money it'll take to do it the right way.

They just flat don't believe in the technology, and that's kind of sad coming from a company that boasts about its engineering prowess.

Stay tuned.

Thursday, November 16, 2006

Say It Ain't So:EADS to Sell Stake to Gulf Investors?

Reuters is reporting this day that rumors are flying think and fast that The Emerald City is looking to sell off a stake in its enterprise to unnamed investors, perhaps in the Gulf, China or possibly Russia. This was had from the usually productive French rumor mill press (in this case the dailies Les Echos and Le Monde), both of which seem to be pretty well connected when it comes to this sort of thing.

Of course the mandatory talking head was trotted out for the ceremonial denial.

My bet? My money's on Dubai. They've got a lot of money and a lot of exposure in the A380 program.

Film at 11-stay tuned

Wednesday, November 15, 2006

US Airways Bid to Buy Delta: Be Careful What You Wish For?

As everyone except three guys on a dogsled in Greenland know, US Airways-you know, the airline that got purchased when it emerged from bankruptcy by America West-US Airways has offered to buy Delta for about $8 billion in cash and stock. Citigroup-you know, the folks who are just itching for you to be a day late on your credit card payment so they can jack you up to 34 per cent-are agreeing to advance the lion's share of the cash to finance the acquisition.

Of course, one of the advantages of buying a company in Chapter 11 is that the stockholders and unsecured creditors of the floundering company are screwed, blued, and tattooed as the saying goes. They're damaged goods. It's part of a continuing picture of businesses using chapter 11 to shuck off their pension obligations, high wage structure, and improvidently entered into financial arrangements, only to re-emerge stronger than ever. Like K-Mart, for one.

Whether this level of consolidation is a good thing business wise, I don't know, and I don't and won't care unless I'm flying somewhere which I probably won't be.

But there's an ethical and moral question I'm confronted with every day in my legal work, and that is, when does or should a debtor cut and run? Many of the folks I deal with have taken the high road, and struggle mightily to avoid bankruptcy at considerable cost to themselves and their peace of mind. They're abused and victimized by predators like Citibank and their prowling lackeys, and they have to be dragged kicking and screaming to the bankruptcy courts.

That raises another subject and that was the bankruptcy reforms that were instituted last year. It's a homily on being careful what you wish for.

Previously, the debtors could go straight to chapter 7, and the creditor community made many a grave and ponderous argument about 'payment morality'-the idea that debtors should feel morally responsible to pay their damned bills.

Citibank in particular has refused to work with credit debt settlement outfits, instead resorting to punishing litigation against people who can't afford lawyers. These are the folks who've said "Yes-it IS my debt, and I will do everything in my power to pay you, given some time and breathing room-just don't sue me in front of my neighbors."

So the American Bankers Association among many others lobbied mightily to get 'bankruptcy reform' passed in Congress and they finally pulled it off and got George's Idiot Son to sign the bill. Here's what they got.

If an individual debtor makes below the median income for their county they'll pretty much go straight to Chapter 7. Not much joy there. If the individual debtor makes over the median income for their county, they'll be steered into Chapter 13, which means the creditors will have to accept payments, not all the debt will be paid, and the consumer may well end up in chapter 7 anyway.

That's right, they'll be compelled by law to take the same sort of remedy that they refused when the idea came from the debtor community in the form of debt settlement. The debtor makes payments if he can do it and if not, he gets to chapter 7.

Nice work, Citibank. You got a lot of reform there.

Tuesday, November 07, 2006

Federal Express Cancels A380 Order UPDATE

It's also being reported today that according to Mr. Ring of Airbus, the remaining orders for the A380F are in "the cancellation zone" whatever that is.

Bloomberg is reporting this day that Federal Express has cancelled an order it had placed for the Airbus A380F freight version and ordered the Boeing 777 freighter instead. This is the first outright cancellation for the big Airbus and it could be the start of a rush toward the exits.

What's most interesting about this cancellation is that it is for freighters-which normally do not have the fancy bells and whistles that the passenger version might be expected to have. That sort of undercuts the "It's the wiring, stupid!" argument.

Stay tuned-it's only Tuesday.

Stay tuned-the week is young.

Monday, November 06, 2006

Airbus to dump 80 per cent of suppliers? UPDATE.

In a report from Deutsche Welle this morning it is stated that production of parts in low wage countries (read China) will increase by 50 per cent. That more or less confirms what I was thinking about this whole announcement.

Dear Valued Airbus Partner and Team Member Deluxe,

I don't know how to tell you this, and it hurts me far more than it hurts you, but if you're an Airbus supplier the chances are 8 out of 10 you're going to be out of a job. Just thought you'd like to know.

One other thing. Just because you're out of a job doesn't mean that some blokes in China won't come up with an interesting proposal at a good price....


Your Friends At Airbus

Friday, November 03, 2006

Austrian Dumps Airbus; TAM Orders Boeing

It's being reported today that Austrian Airlines is planning to rid itself of its A330-200s and A340-300s and standardize on Boeing products. TAM, one of the largest Brazilian carriers and previously an exclusively Airbus house has broken ranks and ordered the Boeing 777 rather than the Airbus A340.

The A340 is an interesting study in what can go wrong in the airline trade and how quickly it can happen. Launched with mucho fanfare and a super size helping of European hubris, its four engines were promoted as having an extra modicum of reliability and safety. Who could forget the now infamous "4 engines 4 long haul" campaign slogan?

Of course that was before the idea of $60 per barrel crude became a reality, and the A340 floundered and foundered on the rocks of economics. It's simply cheaper to fly twin engine planes that carry the same number of people to the same places.

Wednesday, November 01, 2006

Big Noise From University of Whingeconsin

Every once in a while there's a local matter, which although fairly insignificant, assumes huge proportions on the scale of stupid, lame, no good, belly draggin' human conduct. Such is this.

It seems that the University of Wisconsin at Madison-hereinafter to be referred to as the University of Whingeconsin has a logo plastered on the side of the football player's helmets. It's called the Flying W, and it's a capital W in script. Not unlike the same letter that's on the helmets of the Waukee, Iowa high school team and, as someone's discovered, on the helmets of at least five other high schools and counting.

Waukee's on the right. The University of Whingeconsin is on the left.

Well. The University of Whingeconsin has threatened the high school with all sorts of trademark hell if they do not cease and desist from using the letter W in that fashion, accused the players of a form of dishonesty amounting to plagiarism and generally thrown its weight around trotting out its phalanxes of talking heads and lawyers.

Mark Hansen of the Register's got it right, it's boorish, offensive and ultimately silly, and the University of Whingeconsin surely has better things to do than threaten high school kids for using a letter that's commonly available in any number of ways. I've got a suggestion.

Straighten up the W enough to make the University of Whingeconsin go away. Then place a small capital "FU" in front of the W.