Sunday, June 17, 2007

Big Show in Paris; As the Airbus Turns?

As everyone on the planet except three guys on an ice floe in the Arctic know, next week is the biennial Paris Air Show. In the sturm und drang stakes Paris never disappoints, and we here at the Dougloid Papers are going to be watching the news feeds for items of interest.

One thing that's going to be on everyone's mind is the continuing daytime soap opera that is Airbus and what may happen in the way of new orders and other earthshaking developments from da Festung. So let's review potential areas of interest to kibitzers such as ourselves.

  • The inscrutably named Power8 (what happened to Power7? what's in Power9? could there be Power10?) is Airbus' restructuring plan that proposes to shed 10,000 worker bees and five or six subassembly plants in Europe, all in an effort to save 30 per cent in structural costs. That's if it all goes according to plan, but nothing at Airbus ever follows the script. In any event, losing 10,000 jobs and a couple subassembly sites is a bandaid for a broken leg. Translation? Much more needs to be done than is in the playbook to eliminate structural inefficiencies, and it won't get done because the social and political cost is too high for a governmental jobs program like Airbus.

  • The A380 program is stalled, bogged down, stuck in limbo and on a fast track to nowheresville. After the soap opera of the last couple years, Airbus is 'on track' to deliver a lone aircraft to Singapore Airlines this fall if everything goes according to plan, and there will be a gradual rampup of deliveries thereafter, so 'tis said. At present the order odometer seems jammed at 160 or thereabouts, they've lost the A380F program, and the prospects of landing a big order from a real player like BA are at best problematic, given the drain on resources the program has become. In addition, as we've been saying for the past year, there is a persistent unresolved weight problem with the A380. The problem was inadvertently revealed when Airbus staged a publicity joyride for media types a few months ago and some real world weight figures came out-which were ignored by everyone except us. After that, we've been treated to a reworking and repositioning of the A380 as a luxury cruiser for a favored few, rather than a cattle hauler for masses of Asians as it was first promoted. In brief, it's a 400 passenger, payload limited aircraft, which makes one wonder whether it's really the wiring or something more like a massive weight reduction meat axe being wielded in Toulouse? For BA, betting the airline on the A380 and Airbus being able to deliver is like asking a rancher's bank to bet its roll on cattle that haven't been born. And lest we forget, the B747-8 has taken sales from the lower edge of the VLA segment and may just be what BA selects-they're the single largest B747 operator in the world, they have a lot of credibility at Boeing headquarters, and they have the ability to get Boeing to sit up and pay attention. At this point the B747-8 program looks a lot like Kaiser Bill's fleet in being. It doesn't have to do much except be on everyone's mind, to be the very legerdemain to the A380 sales effort-if such a thing exists at all.

  • The A350 is like the Twelfth Imam. We don't know where it is, or what it will look like, only that it'll be better than anything that's being built today and people who don't believe any of this are heretics to be expunged at all costs. Two previous iterations (v. 1.0 was a refried A330 and v.2.0 was a product improved and larger airframe based loosely on the A330) went down the hopper. Version 3.0 is said to be a CFRP panels over conventional structure (a/k/a black aluminum) proposition. We've already opined that da Festung doesn't have the intestinal fortitude to make the leap to monolithic CFRP structure that will be required to build the successors to the B737 and A320, and perhaps the B777. We've also opined that by the time product definition and design freeze arrives for real in October 2008, Airbus will be committed to production without really having any good idea whether Boeing has built the better mousetrap. If true, that will translate into a five or six year deficit, assuming that Boeing decides to quit working on new stuff from here on in.

  • The A400M airlifter is more or less on schedule for entry into service in 2009. At present there are about 190 on order from the governments of Europe and some smaller orders from a few countries. It is intended as a replacement for fleets of elderly C160s and C130s. However, the A400M is a new although conventional airframe and a completely new engine that will have a development curve to be accounted for. In particular, the engine is going to be a limited production project in a class by itself with little commonality to any civil engine anyone's got a use for-nobody's building 15,000 hp turboprops these days, although it might have marine or stationary applications. The A400M load wise is in a sweet spot between the Lockheed Martin C130 and the Douglas nee Boeing C17. It does not have the ability to stage an all up main battle tank into a 5,000 foot dirt strip which is the mission the C17 was built around, and it does not have the large installed base of the C130-which has been around since the 1950s. As a practical matter when one is selecting a cargo hauler, the mission model defines the configuration. Because of this, it is quite clear that the countries which will order the A400M will still depend on the kind offices of C17 operators to do the kind of heavy lifting that the A400M will not be able to do. It's a political statement of a sort that Europe is not intending to place heavy equipment in a hot spot in the future.

I think we can expect some interesting developments during the pendency of the Paris Airshow, but whether anything happens that signals a sea change in the fortunes of Airbus is a tossup.

If there are no new orders from credible customers announced for the A380, that will signal that the industry has issued a vote of no confidence in that program and its future will be up in the air. There will be orders for the A350, but as these will be far in advance of production they're likely to be at a very low cost to the people who buy.

There have been signs of aggression from the A400M people as the effort to corral column inches and get some facetime with potential operators continues as we saw in the recent rumble up in Canada. I do not think that ever was a serious effort to sell airplanes as much as it was to get the name out. The main problem that the A400M program has is that the aircraft itself is too big to be a C130, too small to be a C17 and not available for a number of years yet.

Stay tuned. I'm watching with interest.


Post a Comment

<< Home