The Wall Street Journal
By Gaurav Raghuvanshi
March 3, 2014 7:08 a.m. ET
India's unprofitable Jet Airways Ltd. and SpiceJet Ltd. are set to unveil dozens of new aircraft orders from Boeing Co., which is likely to turn up the competitive heat in the country's increasingly crowded airline industry.
The orders, which are worth US$8.3 billion at list prices, may be announced as early as next week at India's biggest commercial aviation show in the city of Hyderabad, people familiar with the matter said Monday. They said the orders could include about 30 Boeing 737-MAX single-aisle jets for SpiceJet, as well as a formal announcement of at least 50 planes of the same type for Jet Airways.
Another carrier, IndiGo, is also evaluating orders for more Airbus Group A320 jets, according to another person familiar with the situation, though the nation's biggest discount carrier by fleet size may not place its orders before the end of the first half.
The large orders reflect strong growth potential for India's airline industry, though the nation's domestic carriers continue to struggle.
Traffic growth is robust. Domestic travel between April and December rose 6% from a year earlier, while international traffic increased 10.7%, according to data from consulting firm CAPA — Centre for Aviation.
But India's airlines are strapped financially, having reported losses in the last three years as stiff competition forced them to discount tickets while excessive government regulation stunted growth.
SpiceJet reported a 1.73 billion-rupee (US$28 million) loss in the quarter that ended Dec. 31. The airline last reported an annual profit for the year that ended in March 2011.
Jet Airways, India's biggest premium carrier, last reported a consolidated annual profit for the year that ended in March 2007. Analysts expect the two airlines and flag carrier Air India Ltd. to report losses for the current financial year.
Competition among local carriers will likely intensify, after India's government last year allowed foreign airlines invest locally. Malaysia's AirAsia Bhd. and Singapore Airlines Ltd. have announced separate plans to enter the Indian market in partnership with local conglomerate Tata Group.
In addition to increasing competition and government regulation, India's airlines face high jet fuel charges and their airport fees are steep, especially at newly built terminals in New Delhi, Bangalore and Mumbai.
Spokesmen for Boeing, Jet Airways, SpiceJet and Indigo declined to comment Monday, while Airbus couldn't immediately be reached for comment.
Still, analysts say the industry has enormous growth potential if the country's sizable middle class chooses air travel over rail, which is the backbone of India's transportation infrastructure, despite being notoriously unreliable and inefficient.
"The losses of Indian carriers will not continue forever. The long-term outlook for the sector is extremely positive," said Amber Dubey, the head of aerospace and defense at consulting firm KPMG.
India is "getting increasingly aligned to global best practices in aviation and becoming a better place to do business in," said Mr. Dubey, noting he expects most policy problems to be resolved in the coming years.
Already, the Indian government has begun to liberalize the industry. It has allowed airlines to charge passengers for preferred seats and has permitted the A380, the world's biggest jet, to fly into India.
The government is also planning to abolish a rule that prohibits carriers from starting international service until they have a five-year track record of flying domestically and have at least 20 planes in their fleet.
Indian airlines are expected to order a combined 400 planes this year, according to CAPA, the consultancy. That compares with about 375 planes currently flying with the five national carriers.
Some of the orders will replace older aircraft. In some cases, the planes that are being replaced are only five or six years old. Many Asian budget airlines are increasingly opting to buy new aircraft and sell older planes to avoid hefty maintenance and overhaul costs.
The Indian deals likely to be announced next week will build on the more than 350 aircraft that Indian carriers have on order. The last major order by an Indian carrier was for 180 Airbus A320s by IndiGo, which was made in June 2011.
Source: http://online.wsj.com
Showing posts with label Airbus. Show all posts
Showing posts with label Airbus. Show all posts
Monday, March 03, 2014
Wednesday, February 26, 2014
Rolls-Royce Unveils New Engine for Future Boeing, Airbus Jets
Rolls-Royce Holdings Plc, the world’s No. 2 commercial jet-engine maker, will pursue geared turbofan technology championed by rival Pratt & Whitney as it seeks to power future Boeing Co. and Airbus Group NV aircraft.
The so-called UltraFan would be available from 2025 and offer about 10 percent greater efficiency than the TrentXWB, the engine maker’s most modern turbine, said Simon Carlisle, executive vice president for future programs at Rolls-Royce’s civil aerospace division. The UltraFan would build on the so-called Advanced engine, a technology upgrade due from 2020.
“The demands of the industry are becoming much greater,” Carlisle said. “We need to make sure we don’t stand still.”
Rolls-Royce has focused on powering long-range airliners, with engines on the Boeing 787 Dreamliner, Airbus A380 superjumbo and the A350 that is due to begin commercial operation this year. The company has 2,500 Trent-family engines in service and orders for the same number to come.
The London-based manufacturer faces competition to power future aircraft, with General Electric Co. the exclusive provider for the Boeing 777X, the largest twin-engine plane due around 2020. Pratt & Whitney, United Technologies Corp.’s engine arm, is also seeking wide-body applications for its geared turbofan technology on narrow-bodies.
The new Rolls-Royce offerings are not aimed at a specific plane from Airbus or Boeing, Carlisle said. Airbus has said it is exploring re-engining programs for its A380 and A330 wide-bodies.
Single-Aisle Return
Rolls-Royce, which spends about 1 billion pounds ($1.7 billion) on technology research each year, will run a test engine in 2015 to help mature the 2020 powerplant, with a trial UltraFan to come toward the end of the decade, Carlisle said at the company’s civil aerospace center in Derby.
Chief Executive Officer John Rishton has made cost control a priority as the company faces a year of no growth in 2014 for the first time in a decade. The new programs will not cause a spike in capital requirements, Carlisle said.
Technologies could flow into future engines to power the more ubiquitous single-aisle market, where Rolls-Royce has retrenched after exiting the International Aero Engines joint venture led by Pratt & Whitney. Carlisle said returning to that market is “absolutely” planned.
The new engine will include technologies including composite fan blades and casing that will save about 750 pounds in weight per turbine. Design improvements also should eliminate the need for thrust reversers.
Source: http://www.businessweek.com
The so-called UltraFan would be available from 2025 and offer about 10 percent greater efficiency than the TrentXWB, the engine maker’s most modern turbine, said Simon Carlisle, executive vice president for future programs at Rolls-Royce’s civil aerospace division. The UltraFan would build on the so-called Advanced engine, a technology upgrade due from 2020.
“The demands of the industry are becoming much greater,” Carlisle said. “We need to make sure we don’t stand still.”
Rolls-Royce has focused on powering long-range airliners, with engines on the Boeing 787 Dreamliner, Airbus A380 superjumbo and the A350 that is due to begin commercial operation this year. The company has 2,500 Trent-family engines in service and orders for the same number to come.
The London-based manufacturer faces competition to power future aircraft, with General Electric Co. the exclusive provider for the Boeing 777X, the largest twin-engine plane due around 2020. Pratt & Whitney, United Technologies Corp.’s engine arm, is also seeking wide-body applications for its geared turbofan technology on narrow-bodies.
The new Rolls-Royce offerings are not aimed at a specific plane from Airbus or Boeing, Carlisle said. Airbus has said it is exploring re-engining programs for its A380 and A330 wide-bodies.
Single-Aisle Return
Rolls-Royce, which spends about 1 billion pounds ($1.7 billion) on technology research each year, will run a test engine in 2015 to help mature the 2020 powerplant, with a trial UltraFan to come toward the end of the decade, Carlisle said at the company’s civil aerospace center in Derby.
Chief Executive Officer John Rishton has made cost control a priority as the company faces a year of no growth in 2014 for the first time in a decade. The new programs will not cause a spike in capital requirements, Carlisle said.
Technologies could flow into future engines to power the more ubiquitous single-aisle market, where Rolls-Royce has retrenched after exiting the International Aero Engines joint venture led by Pratt & Whitney. Carlisle said returning to that market is “absolutely” planned.
The new engine will include technologies including composite fan blades and casing that will save about 750 pounds in weight per turbine. Design improvements also should eliminate the need for thrust reversers.
Source: http://www.businessweek.com
Tuesday, February 25, 2014
Airbus faces tough battles over A330 longevity plan
(Reuters) - As Airbus races through flight testing of its newest plane, the next-generation A350, Europe's planemaker faces growing battles to secure a future for the A330, until now its only truly lucrative wide-body jet.
Twenty years after it entered service, the 250 to 300-seat jet has repeatedly been pronounced dead by rival Boeing but refuses to lie down, outliving its A340 sibling and surviving for now the arrival of lighter new jets like Boeing's 787 and the A350.
But analysts say time is finally ticking on Airbus's most profitable wide-body jet, despite a steady series of changes aimed at prolonging the end of its production cycle and with over 1,000 still in service.
Without a fresh burst of sales or a slowdown from current record production levels, they say, Airbus faces a sharp drop in deliveries from 2016 onwards, with the visible backlog of undelivered aircraft now worth just 26 months of production.
"The A330 had an amazing past five years, not only because of its merits, but because Boeing's 787 was delayed," said industry analyst Richard Aboulafia at Teal Group.
"But with the 787 hitting (its targeted) production of 10 aircraft per month, that is going to crowd the A330 out of the market space pretty quickly," he added.
That leaves Airbus with a two-fold challenge. It must decide
how best to maintain a foothold in the 200 to 300-seat market, where it first developed jets more than 40 years ago and which Boeing later targeted in part with its 787 family.
The version of the A350 that Airbus originally hoped would defend that spot, the 270-seat A350-800, has sold poorly and is likely to remain sidelined compared to the 314-seat A350-900.
And with the A350 only gradually building up output until 2018, experts say Airbus faces a hole in revenue and cash flow as a gap opens between peak output of the A330 and that of the A350 -just as it also wrestles with a complex transition between versions of its other main cash cow, the A320.
Even though orders may not be as bleak as they appear, with some countries still to approve deals, Airbus has already started looking at ways of heading off any output gaps.
Last year it broke from a pattern of beefing up the A330 to fly further with more payload and announced a leaner Regional version to compete in the key Chinese domestic market.
Ostensibly the aircraft is the same, but its performance will be artificially capped to help save airlines save on maintenance and statutory bills like landing fees.
Such an aircraft would be a niche product aimed at countries with congested domestic markets like China and India.
Morphing the plane in a different direction, Airbus is also looking at the possibility of new engines to boost performance in its core activity of flying medium- and long-haul routes.
It has given itself until the end of the year to make a decision but could make a move at Farnborough Airshow in July.
COUNTER-OFFENSIVE
But industry sources say Airbus has already raised the stakes by offering to increase its industrial presence in China with an A330 cabin center. It already assembles small jets there.
"We have always been open to additional industrial co-operation when the market supports it," Chief Executive Fabrice Bregier said at the recent Singapore Airshow, asked about the first report of such a proposal in Aviation Week.
In response, market watchers say Boeing has launched a counter-offensive to halt the A330's latest assault on China.
Officials with the U.S. firm acknowledge that Airbus's A330 Regional would save just over 10 percent in operating costs.
But they argue this would not compensate for the extra fuel needed for a heavy aircraft like the A330 when it is operating on short routes instead of the long ones it was designed for.
Adapting the industry playbook, they say it would be more profitable to fly two smaller Boeing 737s instead, because the Airbus would burn 12 percent more fuel than both combined.
Airbus officials argue that China's crowded skies and airport congestion rule out adding flights, so the only option is to boost capacity. About 80 percent of China's airspace is under military control, leaving scarce room for traffic development.
That could be changing as China seeks to boost the low-cost airline sector but there is no clear-cut rule on whether more flights are the right marketing tool, said Ascend analyst Rob Morris.
STRATEGIC MARKET, TACTICAL TOOLS
But critics of Airbus's plans have a fallback argument.
Boeing, they say, is likely to try to persuade Chinese airlines that even if they want to put A330s on domestic routes to ease congestion it would be better for their balance sheets and more practical to redeploy them from international ones, rather than buy even more A330s with declining resale values.
Airbus officials counter that it would cost millions of dollars to reconfigure jets in that way.
China is one of the most strategic markets for both companies but analysts say they are also behaving tactically.
Both have gambled on lighter weight carbon-fiber technology but are unable to deliver as quickly as airlines would like, and are meanwhile carving out sales pitches playing up their existing products.
The battle looks set to revive tensions between the two dominant planemakers in the $100 billion annual jetliner market that last erupted in an advertising war in 2012.
Taking aim at Airbus's flexibility over pricing of the A330, whose development was paid for long ago, a Boeing executive said it would be a "losing proposition" against the smaller 737 in China, even if Airbus gave up any gap in price.
An Airbus official retorted curtly, saying Boeing's own data was "veracity-challenged".
Source: http://www.reuters.com
Twenty years after it entered service, the 250 to 300-seat jet has repeatedly been pronounced dead by rival Boeing but refuses to lie down, outliving its A340 sibling and surviving for now the arrival of lighter new jets like Boeing's 787 and the A350.
But analysts say time is finally ticking on Airbus's most profitable wide-body jet, despite a steady series of changes aimed at prolonging the end of its production cycle and with over 1,000 still in service.
Without a fresh burst of sales or a slowdown from current record production levels, they say, Airbus faces a sharp drop in deliveries from 2016 onwards, with the visible backlog of undelivered aircraft now worth just 26 months of production.
"The A330 had an amazing past five years, not only because of its merits, but because Boeing's 787 was delayed," said industry analyst Richard Aboulafia at Teal Group.
"But with the 787 hitting (its targeted) production of 10 aircraft per month, that is going to crowd the A330 out of the market space pretty quickly," he added.
That leaves Airbus with a two-fold challenge. It must decide
how best to maintain a foothold in the 200 to 300-seat market, where it first developed jets more than 40 years ago and which Boeing later targeted in part with its 787 family.
The version of the A350 that Airbus originally hoped would defend that spot, the 270-seat A350-800, has sold poorly and is likely to remain sidelined compared to the 314-seat A350-900.
And with the A350 only gradually building up output until 2018, experts say Airbus faces a hole in revenue and cash flow as a gap opens between peak output of the A330 and that of the A350 -just as it also wrestles with a complex transition between versions of its other main cash cow, the A320.
Even though orders may not be as bleak as they appear, with some countries still to approve deals, Airbus has already started looking at ways of heading off any output gaps.
Last year it broke from a pattern of beefing up the A330 to fly further with more payload and announced a leaner Regional version to compete in the key Chinese domestic market.
Ostensibly the aircraft is the same, but its performance will be artificially capped to help save airlines save on maintenance and statutory bills like landing fees.
Such an aircraft would be a niche product aimed at countries with congested domestic markets like China and India.
Morphing the plane in a different direction, Airbus is also looking at the possibility of new engines to boost performance in its core activity of flying medium- and long-haul routes.
It has given itself until the end of the year to make a decision but could make a move at Farnborough Airshow in July.
COUNTER-OFFENSIVE
But industry sources say Airbus has already raised the stakes by offering to increase its industrial presence in China with an A330 cabin center. It already assembles small jets there.
"We have always been open to additional industrial co-operation when the market supports it," Chief Executive Fabrice Bregier said at the recent Singapore Airshow, asked about the first report of such a proposal in Aviation Week.
In response, market watchers say Boeing has launched a counter-offensive to halt the A330's latest assault on China.
Officials with the U.S. firm acknowledge that Airbus's A330 Regional would save just over 10 percent in operating costs.
But they argue this would not compensate for the extra fuel needed for a heavy aircraft like the A330 when it is operating on short routes instead of the long ones it was designed for.
Adapting the industry playbook, they say it would be more profitable to fly two smaller Boeing 737s instead, because the Airbus would burn 12 percent more fuel than both combined.
Airbus officials argue that China's crowded skies and airport congestion rule out adding flights, so the only option is to boost capacity. About 80 percent of China's airspace is under military control, leaving scarce room for traffic development.
That could be changing as China seeks to boost the low-cost airline sector but there is no clear-cut rule on whether more flights are the right marketing tool, said Ascend analyst Rob Morris.
STRATEGIC MARKET, TACTICAL TOOLS
But critics of Airbus's plans have a fallback argument.
Boeing, they say, is likely to try to persuade Chinese airlines that even if they want to put A330s on domestic routes to ease congestion it would be better for their balance sheets and more practical to redeploy them from international ones, rather than buy even more A330s with declining resale values.
Airbus officials counter that it would cost millions of dollars to reconfigure jets in that way.
China is one of the most strategic markets for both companies but analysts say they are also behaving tactically.
Both have gambled on lighter weight carbon-fiber technology but are unable to deliver as quickly as airlines would like, and are meanwhile carving out sales pitches playing up their existing products.
The battle looks set to revive tensions between the two dominant planemakers in the $100 billion annual jetliner market that last erupted in an advertising war in 2012.
Taking aim at Airbus's flexibility over pricing of the A330, whose development was paid for long ago, a Boeing executive said it would be a "losing proposition" against the smaller 737 in China, even if Airbus gave up any gap in price.
An Airbus official retorted curtly, saying Boeing's own data was "veracity-challenged".
Source: http://www.reuters.com
Friday, February 14, 2014
Airbus Buys Bank: Aerospace Group Says Move Will Improve Financial Flexibility
The Wall Street Journal
By Ruth Bender
Feb. 14, 2014 4:47 a.m. ET
PARIS— Airbus Group said Friday it will acquire a small Munich-based bank as it forges ahead with its project of setting up an in-house bank that will help the aeronautics company secure access to credit.
Airbus Group—formerly known as European Aeronautical Defence & Space Co.--said it reached a deal with Austria's Raiffeisenverband Salzburg to buy Salzburg Muenchen Bank AG, a lender which works with small and medium-size companies and private clients.
Airbus, which didn't disclose financial details of the deal, said it would rename the bank 'Airbus Group Bank' if the acquisition is approved by German authorities. It aims to close the deal "as early as possible" in 2014.
The parent group of the plane maker with the same name first laid out plans to form an in-house bank to protect its own access to credit and that of its customers in 2012, when Europe's financial crisis showed little sign of coming to an end.
Airbus, the commercial aerospace unit of the group, operates in a capital intensive sector. The commercial aviation industry requires more than $100 billion in financing annually for new airplane deliveries.
During the financial crisis that began in 2008, Airbus, its U.S. rival Boeing Co. and other plane makers relied heavily on government-subsidized funding support, known as export-credit financing. But these guarantees have become increasingly controversial and new international rules have curtailed their use.
"In the coming years the whole group can benefit through increased financing flexibility," Airbus finance chief Harald Wilhelm said in a statement.
The European aircraft maker has also had a run-in with the German government, ending talks about Berlin's possible funding of its new A350 passenger jet. Airbus has received billions of euros in preferential loans from European governments to support the development of new jetliner models over the past four decades. This includes a €500 million ($681.8 million) loan from Germany for the A350 four years ago. An agreement on a second loan, for €600 million, remains outstanding because Airbus Group has balked at the terms being imposed by the German government.
Airbus and Boeing are forecasting strong continued demand from airlines for new aircraft as growth in passenger traffic, particularly in Asia, Africa, and the Americas, rises inexorably.
Airbus's latest forecast is for airlines in the Asian-Pacific region to buy planes valued at $1.8 trillion industrywide over the next 20 years. That view was close to the $1.9 trillion estimate from Boeing Co.
Asian-Pacific airlines will need 10,940 new planes in the next 20 years, Airbus said, 4,100 of which will be widebody jets that typically carry 300-500 passengers. Boeing expects the region to take 12,820 jets.
Source: http://online.wsj.com
By Ruth Bender
Feb. 14, 2014 4:47 a.m. ET
PARIS— Airbus Group said Friday it will acquire a small Munich-based bank as it forges ahead with its project of setting up an in-house bank that will help the aeronautics company secure access to credit.
Airbus Group—formerly known as European Aeronautical Defence & Space Co.--said it reached a deal with Austria's Raiffeisenverband Salzburg to buy Salzburg Muenchen Bank AG, a lender which works with small and medium-size companies and private clients.
Airbus, which didn't disclose financial details of the deal, said it would rename the bank 'Airbus Group Bank' if the acquisition is approved by German authorities. It aims to close the deal "as early as possible" in 2014.
The parent group of the plane maker with the same name first laid out plans to form an in-house bank to protect its own access to credit and that of its customers in 2012, when Europe's financial crisis showed little sign of coming to an end.
Airbus, the commercial aerospace unit of the group, operates in a capital intensive sector. The commercial aviation industry requires more than $100 billion in financing annually for new airplane deliveries.
During the financial crisis that began in 2008, Airbus, its U.S. rival Boeing Co. and other plane makers relied heavily on government-subsidized funding support, known as export-credit financing. But these guarantees have become increasingly controversial and new international rules have curtailed their use.
"In the coming years the whole group can benefit through increased financing flexibility," Airbus finance chief Harald Wilhelm said in a statement.
The European aircraft maker has also had a run-in with the German government, ending talks about Berlin's possible funding of its new A350 passenger jet. Airbus has received billions of euros in preferential loans from European governments to support the development of new jetliner models over the past four decades. This includes a €500 million ($681.8 million) loan from Germany for the A350 four years ago. An agreement on a second loan, for €600 million, remains outstanding because Airbus Group has balked at the terms being imposed by the German government.
Airbus and Boeing are forecasting strong continued demand from airlines for new aircraft as growth in passenger traffic, particularly in Asia, Africa, and the Americas, rises inexorably.
Airbus's latest forecast is for airlines in the Asian-Pacific region to buy planes valued at $1.8 trillion industrywide over the next 20 years. That view was close to the $1.9 trillion estimate from Boeing Co.
Asian-Pacific airlines will need 10,940 new planes in the next 20 years, Airbus said, 4,100 of which will be widebody jets that typically carry 300-500 passengers. Boeing expects the region to take 12,820 jets.
Source: http://online.wsj.com
Monday, January 13, 2014
Airbus Posts Record Jet Orders, Deliveries in 2013: WSJ
Airbus Tops Boeing's Annual Order Intake
The Wall Street Journal
By Marietta Cauchi
Jan. 13, 2014 5:05 a.m. ET
TOULOUSE, France— Airbus, the commercial arm of aerospace and defense company Airbus Group NV, Monday said it landed orders for 1,619 planes in 2013, setting a new industry record and topping U.S. rival Boeing Co.'s annual order intake.
The commercial jet maker broke another industry-wide record ending the year with an unfilled backlog of 5,559 aircraft, valued at $809 billion at list prices, or eight years production.
Toulouse-based Airbus said it delivered 626 commercial jets in 2013, a company record, beating its previous record of 588 planes last year.
The tally was dominated by smaller models including 493 of its single-aisle A320 family. It delivered 180 of its A330 intermediate jets and 25 A380s, the world's largest passenger plane.
Airbus expects to deliver its first A350, which competes with Boeing's 787 Dreamliner, in the fourth quarter of this year. "We expect to produce around 10 a month by the end of 2018 and break-even on the program by the end of the decade," said Airbus President and CEO Fabrice Brégier at the jet-maker's annual news conference.
There have been suggestions that Airbus will replace the A350-800 by putting a more powerful engine in its intermediate A330 model. Company executives said that they were considering all options and that most customers were converting to A350-900s or were willing to wait until production of the A350-800 became less constrained.
"This is not a priority—we are considering all ideas including whether there will be an A350-900 reduced in size," said Mr. Brégier. "The A350-800 with improvements will remain very competitive," he said.
Airbus said it would also start producing the A320neo from the fourth quarter and that it has enough orders for a monthly production rate of 42 between 2015 and 2018.
"We have now secured transition [from the A320neo] at a rate of 42 neos a month and if the market remains steady there is an opportunity to go higher before 2018 but that's an 'if' and no decision has been made," Mr. Brégier said.
Mr. Brégier said that the supply chain had improved a lot last year justifying a "gentle ramp-up" over the next couple of years "if we plan properly and there are no problems in series programs."
Airbus reiterated earlier guidance that it would break even on the A380 superjumbo by 2015 based on 30 annual deliveries.
John Leahy, Airbus global sales chief, said that he expected to finalize a firm order for A380s from Doric Lease Corp. during the first quarter following a memorandum of understanding signed at the Paris Air Show in June.
Last week Boeing reported gross orders of 1,531 new commercial jets for last year and, subtracting canceled orders, Boeing added 1,355 net orders. This compares with Airbus' 1,503 net orders.
The U.S. manufacturer delivered 648 jets during 2013, making it the world's largest jet maker for the second year running.
Source: http://online.wsj.com
The Wall Street Journal
By Marietta Cauchi
Jan. 13, 2014 5:05 a.m. ET
TOULOUSE, France— Airbus, the commercial arm of aerospace and defense company Airbus Group NV, Monday said it landed orders for 1,619 planes in 2013, setting a new industry record and topping U.S. rival Boeing Co.'s annual order intake.
The commercial jet maker broke another industry-wide record ending the year with an unfilled backlog of 5,559 aircraft, valued at $809 billion at list prices, or eight years production.
Toulouse-based Airbus said it delivered 626 commercial jets in 2013, a company record, beating its previous record of 588 planes last year.
The tally was dominated by smaller models including 493 of its single-aisle A320 family. It delivered 180 of its A330 intermediate jets and 25 A380s, the world's largest passenger plane.
Airbus expects to deliver its first A350, which competes with Boeing's 787 Dreamliner, in the fourth quarter of this year. "We expect to produce around 10 a month by the end of 2018 and break-even on the program by the end of the decade," said Airbus President and CEO Fabrice Brégier at the jet-maker's annual news conference.
There have been suggestions that Airbus will replace the A350-800 by putting a more powerful engine in its intermediate A330 model. Company executives said that they were considering all options and that most customers were converting to A350-900s or were willing to wait until production of the A350-800 became less constrained.
"This is not a priority—we are considering all ideas including whether there will be an A350-900 reduced in size," said Mr. Brégier. "The A350-800 with improvements will remain very competitive," he said.
Airbus said it would also start producing the A320neo from the fourth quarter and that it has enough orders for a monthly production rate of 42 between 2015 and 2018.
"We have now secured transition [from the A320neo] at a rate of 42 neos a month and if the market remains steady there is an opportunity to go higher before 2018 but that's an 'if' and no decision has been made," Mr. Brégier said.
Mr. Brégier said that the supply chain had improved a lot last year justifying a "gentle ramp-up" over the next couple of years "if we plan properly and there are no problems in series programs."
Airbus reiterated earlier guidance that it would break even on the A380 superjumbo by 2015 based on 30 annual deliveries.
John Leahy, Airbus global sales chief, said that he expected to finalize a firm order for A380s from Doric Lease Corp. during the first quarter following a memorandum of understanding signed at the Paris Air Show in June.
Last week Boeing reported gross orders of 1,531 new commercial jets for last year and, subtracting canceled orders, Boeing added 1,355 net orders. This compares with Airbus' 1,503 net orders.
The U.S. manufacturer delivered 648 jets during 2013, making it the world's largest jet maker for the second year running.
Source: http://online.wsj.com
An Airbus A380
Bloomberg News
Thursday, January 09, 2014
Rolls-Royce, Wärtsilä End Merger Talks: U.K. Industrial Group Would Have Taken Over Finnish Engine Maker
The Wall Street Journal
By Matthew Curtin
Jan. 9, 2014 2:54 a.m. ET
LONDON— Rolls-Royce Holdings PLC and Wärtsilä Oyj said Thursday they are no longer in merger talks which would have seen one of the U.K.'s flagship industrial groups take over its smaller Finnish engine-making rival in a multibillion-dollar deal.
Rolls-Royce, which makes aircraft engines for Airbus Group and Boeing Co., said "preliminary discussions with the board of Wärtsilä regarding a possible offer for the company…are no longer continuing."
Helsinki-listed Wärtsilä confirmed in a separate statement that talks have ended after it had received a preliminary approach from the British company.
The companies said their statements follow press speculation about a possible deal.
The Finnish company, which has a market capitalization of around €6.7 billion ($9.1 billion), derives most of its €4.7 billion in annual revenue from making power-generation equipment for liquid-fuel and gas power plants as well as making engines for ships. It also has a services business.
Rolls-Royce, best-known for making engines for commercial aircraft, is also a big producer of power equipment and increasingly focused on the marine industry.
Rolls-Royce in partnership with Daimler AG of Germany is the process of the completion of the takeover of Germany engine maker Tognum AG. Wärtsilä recently acquired Hamworthy, a specialist U.K. maker of marine equipment.
Source: http://online.wsj.com
By Matthew Curtin
Jan. 9, 2014 2:54 a.m. ET
LONDON— Rolls-Royce Holdings PLC and Wärtsilä Oyj said Thursday they are no longer in merger talks which would have seen one of the U.K.'s flagship industrial groups take over its smaller Finnish engine-making rival in a multibillion-dollar deal.
Rolls-Royce, which makes aircraft engines for Airbus Group and Boeing Co., said "preliminary discussions with the board of Wärtsilä regarding a possible offer for the company…are no longer continuing."
Helsinki-listed Wärtsilä confirmed in a separate statement that talks have ended after it had received a preliminary approach from the British company.
The companies said their statements follow press speculation about a possible deal.
The Finnish company, which has a market capitalization of around €6.7 billion ($9.1 billion), derives most of its €4.7 billion in annual revenue from making power-generation equipment for liquid-fuel and gas power plants as well as making engines for ships. It also has a services business.
Rolls-Royce, best-known for making engines for commercial aircraft, is also a big producer of power equipment and increasingly focused on the marine industry.
Rolls-Royce in partnership with Daimler AG of Germany is the process of the completion of the takeover of Germany engine maker Tognum AG. Wärtsilä recently acquired Hamworthy, a specialist U.K. maker of marine equipment.
Source: http://online.wsj.com
Tuesday, January 07, 2014
Airbus Names New U.S. Chief: Allan McArtor Succeeds Sean O'Keefe, Who Will Resign in March
The Wall Street Journal
By Doug Cameron
Updated Jan. 7, 2014 5:51 p.m. ET
Airbus Group NV's newly appointed U.S. chief outlined plans to continue expanding in the country beyond its soon-to-open commercial jet factory, but said the European company is no longer focusing on acquisitions to increase its scale.
The world's second-largest aerospace-and-defense company on Tuesday said Allan McArtor will become chairman and chief executive of its U.S. unit, Airbus Group Inc., in March following the retirement for medical reasons of Sean O'Keefe, who has led the business since 2009.
Mr. McArtor, 72, joined Airbus in 2001 and is currently chairman of its U.S. commercial arm, spearheading the development of a new factory in Mobile, Ala. that's due to start delivering A320 passenger jets in the first half of 2016.
Airbus has succeeded in breaking the monopoly of larger rival Boeing Co. in selling jets to some of the biggest U.S. airlines, but has struggled to make similar gains in the defense market. Airbus, for example, lost out to Boeing in a hotly-disputed contest for a multibillion-dollar contract to build aerial refueling tankers for the U.S. Air Force.
Mr. McArtor in an interview singled out potential for growth in areas of the U.S. defense and space sectors such as unmanned aerial sensors, low-cost space launch systems and satellites and missiles technology. But he said Airbus has decided to steer away from deal-making to bolster its U.S. presence at a time when bulging jet order books have pushed up valuations, particularly in commercial aerospace.
"We had thought mergers and acquisitions would be a quick way to move forward," said Mr. McArtor, adding that it was no longer a "top priority."
Airbus this year shed its former corporate name European Aeronautic Defence and Space Co. NV. Mr. McArtor, a former combat pilot and head of the Federal Aviation Administration, said the rebranding "makes our story easier to tell [in the U.S.]," while the new Mobile factory provides opportunities to leverage its commercial operations into other business lines.
Excluding commercial jet sales, Airbus generated revenue of around $1.4 billion in the U.S. last year, through sales of military and civilian helicopters, space equipment, and service contracts that include running 911 call centers for New York and other major cities.
Mr. McArtor's promotion comes amid a restructuring of Airbus that includes the grouping of its defense and space units into a single organization, alongside the company's commercial jet and helicopter production.
The loss of the aerial tanker deal to Boeing has placed more emphasis on the fortunes of selling more of its U.S.-built Lakota helicopters to the U.S. Army and Air Force, though Pentagon budget cuts have reduced the potential for the military to replace hundreds of Vietnam-era aircraft.
"I'm reasonably optimistic that the Lakota program will continue," Mr. McArtor said, though he admitted the fate of the Army's armed aerial scout replacement plan would be decided by budget priorities.
The new commercial jet assembly line in Mobile will join existing Airbus plants in France, Germany and China. Mr. McArtor said the plant would move as quickly as possible to its initial production rate of four planes a month, with any increase dictated by market conditions.
Mr. McArtor will also become a member of the Airbus group executive committee, the company's new, top decision-making body.
He takes over from Mr. O'Keefe, 57, who is stepping down to focus on continuing treatment for injuries sustained in a plane crash in 2010 that killed five people, including former Alaska Sen. Ted Stevens.
—Marietta Cauchi contributed to this article
Source: http://online.wsj.com
By Doug Cameron
Updated Jan. 7, 2014 5:51 p.m. ET
Airbus Group NV's newly appointed U.S. chief outlined plans to continue expanding in the country beyond its soon-to-open commercial jet factory, but said the European company is no longer focusing on acquisitions to increase its scale.
The world's second-largest aerospace-and-defense company on Tuesday said Allan McArtor will become chairman and chief executive of its U.S. unit, Airbus Group Inc., in March following the retirement for medical reasons of Sean O'Keefe, who has led the business since 2009.
Mr. McArtor, 72, joined Airbus in 2001 and is currently chairman of its U.S. commercial arm, spearheading the development of a new factory in Mobile, Ala. that's due to start delivering A320 passenger jets in the first half of 2016.
Airbus has succeeded in breaking the monopoly of larger rival Boeing Co. in selling jets to some of the biggest U.S. airlines, but has struggled to make similar gains in the defense market. Airbus, for example, lost out to Boeing in a hotly-disputed contest for a multibillion-dollar contract to build aerial refueling tankers for the U.S. Air Force.
Mr. McArtor in an interview singled out potential for growth in areas of the U.S. defense and space sectors such as unmanned aerial sensors, low-cost space launch systems and satellites and missiles technology. But he said Airbus has decided to steer away from deal-making to bolster its U.S. presence at a time when bulging jet order books have pushed up valuations, particularly in commercial aerospace.
"We had thought mergers and acquisitions would be a quick way to move forward," said Mr. McArtor, adding that it was no longer a "top priority."
Airbus this year shed its former corporate name European Aeronautic Defence and Space Co. NV. Mr. McArtor, a former combat pilot and head of the Federal Aviation Administration, said the rebranding "makes our story easier to tell [in the U.S.]," while the new Mobile factory provides opportunities to leverage its commercial operations into other business lines.
Excluding commercial jet sales, Airbus generated revenue of around $1.4 billion in the U.S. last year, through sales of military and civilian helicopters, space equipment, and service contracts that include running 911 call centers for New York and other major cities.
Mr. McArtor's promotion comes amid a restructuring of Airbus that includes the grouping of its defense and space units into a single organization, alongside the company's commercial jet and helicopter production.
The loss of the aerial tanker deal to Boeing has placed more emphasis on the fortunes of selling more of its U.S.-built Lakota helicopters to the U.S. Army and Air Force, though Pentagon budget cuts have reduced the potential for the military to replace hundreds of Vietnam-era aircraft.
"I'm reasonably optimistic that the Lakota program will continue," Mr. McArtor said, though he admitted the fate of the Army's armed aerial scout replacement plan would be decided by budget priorities.
The new commercial jet assembly line in Mobile will join existing Airbus plants in France, Germany and China. Mr. McArtor said the plant would move as quickly as possible to its initial production rate of four planes a month, with any increase dictated by market conditions.
Mr. McArtor will also become a member of the Airbus group executive committee, the company's new, top decision-making body.
He takes over from Mr. O'Keefe, 57, who is stepping down to focus on continuing treatment for injuries sustained in a plane crash in 2010 that killed five people, including former Alaska Sen. Ted Stevens.
—Marietta Cauchi contributed to this article
Source: http://online.wsj.com
Sunday, November 17, 2013
Boeing Makes Headlines in Dubai, But Airbus Hasn't Ceded Field: WSJ
The Wall Street Journal
By Daniel Michaels
Updated Nov. 17, 2013 2:56 p.m. ET
The Dubai Airshow is shaping up to be an order extravaganza for Boeing Co. But that doesn't mean rival Airbus has ceded the field.
The unit of European Aeronautic Defence & Space Co. Sunday posted orders for its A380 superjumbo jet and new long-rang e A350 that at any other time would have grabbed the spotlight. Hometown carrier Emirates Airline ordered another 50 A380s, bringing its total order book for the world's largest passenger plane to 140 units—or almost half of all A380s on order.
Abu Dhabi-based rival Etihad Airlines said Sunday it placed a firm order for 87 Airbus aircraft with purchase rights for an additional 30. Including the related engines, the order was worth $26.9 billion at list prices, it said at the air show, and includes 50 Airbus A350s, 36 A320neo and one A330-200F freighter.
In other words, respectable numbers for Airbus, too. Officials at the European plane maker knew Boeing was planning to announce big deals for its 777X at the show. And Airbus has been on a roll. Through October, it booked 1,215 net orders after cancellations, up 14% from the year earlier. Boeing booked 957 net orders through October. Airbus last month landed a $9.75 billion order from Japan Airlines Co., breaking into territory long held exclusively by Boeing when JAL ordered 31 A350 jetliners.
But while the orders may let Airbus take some wind out of Boeing's sales, they raise other issues. That's particularly the case with the Emirates A380 order.
Placing so much reliance on one customer increases risks for both Airbus and Emirates. A problem in the Gulf that prompts Emirates to cut back could leave factories in Toulouse and Hamburg floundering.
Boeing officials are quietly highlighting Airbus's reliance on Emirates for A380 orders, saying it shows what they said all along: Demand is insufficient for the two-deck plane.
Airbus marketers, meanwhile, are hoping that Emirates's A380 machine will put so much pressure on rivals that they, too, will be forced to buy the plane. "Emirates is one of the best-placed airlines in the world to capture growth," said Chistopher Emerson, Airbus senior vice president marketing.
Source: http://online.wsj.com
Boeing, Airbus Reel In Persian Gulf Orders: Region's Airlines Seek to Establish Crucial Global Transit Point
The Wall Street Journal
By Rory Jones And Doug Cameron
Updated Nov. 17, 2013 3:38 p.m. ET
DUBAI— Boeing Co. formally launched its 777X jetliner with record orders, part of jet-buying commitments at the Dubai Airshow valued at more than $150 billion for Boeing and rival Airbus that highlighted the growing ambition of Persian Gulf airlines.
The orders, announced Sunday at the air show's start, are part of the Gulf region's effort to become the world's dominant transit point for airline passengers and foster its own economic growth. Boeing unveiled deals for several models valued at more than $100 billion, based on list prices, with Emirates Airline, Abu Dhabi-based Etihad Airways, Qatar Airways and flydubai, a low-cost carrier founded by Dubai's government five years ago. That was double the haul of rival Airbus, a unit of European Aeronautic Defence & Space Co.
The 777X family, two long-range jets capable of handling about 350 to 400 passengers and costing about $350 million to $377 million at list prices, are Boeing's first planes designed in significant part for the needs of the Gulf carriers. Their powerful engines and extra-wide wings, for example, facilitate flying in the region's extreme heat, which makes taking off fully loaded more difficult.
Boeing announced it had received 259 orders and commitments for the plane, with a list value of $95 billion, which it said is the largest product launch in commercial-jetliner history. Emirates, Etihad, and Qatar accounted for 225 of those, with the other 34 from Deutsche Lufthansa AG, disclosed in September. The launch marks Boeing's formal commitment to build the jet, which it expects to start delivering around 2020.
"The response has been, quite frankly, overwhelming," Jim McNerney, Boeing's chief executive, told reporters after arriving by company jet at the event from Chicago. Later in the day, a sandstorm halted flying demonstrations at a show that underscored the shift in power of the global aviation business to the Middle East from the U.S. and Europe.
Emirates, Etihad and Qatar are using their geographical position at the crossroads of Europe, Asia and Africa to attract new passengers and win business from other carriers.
The three state-owned carriers are part of a broader push by their governments to diversify economies away from a dependence on energy exports by expanding advanced manufacturing industries and tourism.
A significant part of the Boeing deals for Emirates and Etihad is a joint venture with Mubadala, an Abu Dhabi government-owned conglomerate tasked with creating industries, diversifying the economy and creating jobs for Emiratis. The joint venture, in which Boeing is offering its technical expertise, is making advanced composite materials for jets in the United Arab Emirates as part of a broader push into the aerospace sector.
With Sunday's deals, Boeing is on track to end the year with net orders of more than 1,300 jets—approaching its record—if all those announced Sunday become firm orders. Airbus is expected to sell a similar number of planes. Those will add to backlogs that already account for about eight years of annual production at the two companies.
Both manufacturers are developing new long-range jets. A select group of carriers are ordering them early and in record numbers to secure early access to more-efficient aircraft. Airbus on Sunday also announced 50 orders for its A350, a 777X competitor that is scheduled to enter service in 2014.
Dubai remains the focus of the industry's transition. Its existing airport is set to overtake London Heathrow as the world's busiest international hub, and it has added a second, the new Dubai World Airport that is hosting this week's show.
Emirates, already the world's largest international carrier by capacity, signed deals for Boeing and Airbus jets with a list price of $99 billion, though it and other airlines usually secure large discounts. The Dubai flag carrier is already the world's largest Boeing 777 operator, and ordered 150 of the new 777X model valued at $76 billion.
"This will help Emirates meet its future need competitive with the latest and most efficient aircraft," Sheikh Ahmed bin Saeed Al Maktoum, the airline's chairman, said at a news conference at the show.
Emirates Airline also is buying an additional 50 Airbus A380s with a sticker price of $23 billion, a welcome fillip for the European company's struggling efforts to rejuvenate sales of the superjumbo in recent years.
Flydubai ordered 111 Boeing 737s valued at $11.4 billion to highlight how the Gulf is diversifying from a reliance on long-haul flights as economic growth stirs more local business.
Qatar Airways committed to buying 50 of the 777X jets valued at $19 billion, and Abu Dhabi's Etihad signed up for 25 of the planes as part of a $25 billion deal for various aircraft. Etihad also ordered an additional 30 787 Dreamliners, which will make it the largest operator of that aircraft.
Many of the orders, notably from Emirates, will replace older jets as carriers retire aircraft to boost the efficiency of their fleets, but all of the Gulf carriers are growing far faster than the global market, and taking share from rivals.
Emirates is about double the size of Qatar Airways, which is around double the size of Etihad, though the Abu Dhabi carrier—based less than 100 miles from Dubai—is closing the gap, boosting capacity by 15.4% between 2009 and 2014, according to consultant Oliver Wyman.
Qatar led the Gulf trio with growth of 16.9% over the same period while Emirates added 13.1%, both trailing the 17.6% growth rate of Turkish Airlines, which is exploiting its geographical position to similar effect.
The expansion of the Gulf carriers has upset some in the U.S. and European airline industry, who complain in part that their state backing gives them an unfair advantage.
Capt. Lee Moak, president of the Air Line Pilots Association, International, who attended the air show, reiterated a call for the elimination of low-interest financing by the U.S. Export-Import Bank for Boeing jets to the Middle Eastern airlines. "U.S. government policies should not disadvantage U.S. airlines while helping our foreign competitors," he said.
However, U.S. aerospace companies including Boeing contend existing government policies support thousands of domestic jobs.
—Jon Ostrower in Chicago contributed to this article.
Source: http://online.wsj.com
By Rory Jones And Doug Cameron
Updated Nov. 17, 2013 3:38 p.m. ET
DUBAI— Boeing Co. formally launched its 777X jetliner with record orders, part of jet-buying commitments at the Dubai Airshow valued at more than $150 billion for Boeing and rival Airbus that highlighted the growing ambition of Persian Gulf airlines.
The orders, announced Sunday at the air show's start, are part of the Gulf region's effort to become the world's dominant transit point for airline passengers and foster its own economic growth. Boeing unveiled deals for several models valued at more than $100 billion, based on list prices, with Emirates Airline, Abu Dhabi-based Etihad Airways, Qatar Airways and flydubai, a low-cost carrier founded by Dubai's government five years ago. That was double the haul of rival Airbus, a unit of European Aeronautic Defence & Space Co.
The 777X family, two long-range jets capable of handling about 350 to 400 passengers and costing about $350 million to $377 million at list prices, are Boeing's first planes designed in significant part for the needs of the Gulf carriers. Their powerful engines and extra-wide wings, for example, facilitate flying in the region's extreme heat, which makes taking off fully loaded more difficult.
Boeing announced it had received 259 orders and commitments for the plane, with a list value of $95 billion, which it said is the largest product launch in commercial-jetliner history. Emirates, Etihad, and Qatar accounted for 225 of those, with the other 34 from Deutsche Lufthansa AG, disclosed in September. The launch marks Boeing's formal commitment to build the jet, which it expects to start delivering around 2020.
"The response has been, quite frankly, overwhelming," Jim McNerney, Boeing's chief executive, told reporters after arriving by company jet at the event from Chicago. Later in the day, a sandstorm halted flying demonstrations at a show that underscored the shift in power of the global aviation business to the Middle East from the U.S. and Europe.
Emirates, Etihad and Qatar are using their geographical position at the crossroads of Europe, Asia and Africa to attract new passengers and win business from other carriers.
The three state-owned carriers are part of a broader push by their governments to diversify economies away from a dependence on energy exports by expanding advanced manufacturing industries and tourism.
A significant part of the Boeing deals for Emirates and Etihad is a joint venture with Mubadala, an Abu Dhabi government-owned conglomerate tasked with creating industries, diversifying the economy and creating jobs for Emiratis. The joint venture, in which Boeing is offering its technical expertise, is making advanced composite materials for jets in the United Arab Emirates as part of a broader push into the aerospace sector.
With Sunday's deals, Boeing is on track to end the year with net orders of more than 1,300 jets—approaching its record—if all those announced Sunday become firm orders. Airbus is expected to sell a similar number of planes. Those will add to backlogs that already account for about eight years of annual production at the two companies.
Both manufacturers are developing new long-range jets. A select group of carriers are ordering them early and in record numbers to secure early access to more-efficient aircraft. Airbus on Sunday also announced 50 orders for its A350, a 777X competitor that is scheduled to enter service in 2014.
Dubai remains the focus of the industry's transition. Its existing airport is set to overtake London Heathrow as the world's busiest international hub, and it has added a second, the new Dubai World Airport that is hosting this week's show.
Emirates, already the world's largest international carrier by capacity, signed deals for Boeing and Airbus jets with a list price of $99 billion, though it and other airlines usually secure large discounts. The Dubai flag carrier is already the world's largest Boeing 777 operator, and ordered 150 of the new 777X model valued at $76 billion.
"This will help Emirates meet its future need competitive with the latest and most efficient aircraft," Sheikh Ahmed bin Saeed Al Maktoum, the airline's chairman, said at a news conference at the show.
Emirates Airline also is buying an additional 50 Airbus A380s with a sticker price of $23 billion, a welcome fillip for the European company's struggling efforts to rejuvenate sales of the superjumbo in recent years.
Flydubai ordered 111 Boeing 737s valued at $11.4 billion to highlight how the Gulf is diversifying from a reliance on long-haul flights as economic growth stirs more local business.
Qatar Airways committed to buying 50 of the 777X jets valued at $19 billion, and Abu Dhabi's Etihad signed up for 25 of the planes as part of a $25 billion deal for various aircraft. Etihad also ordered an additional 30 787 Dreamliners, which will make it the largest operator of that aircraft.
Many of the orders, notably from Emirates, will replace older jets as carriers retire aircraft to boost the efficiency of their fleets, but all of the Gulf carriers are growing far faster than the global market, and taking share from rivals.
Emirates is about double the size of Qatar Airways, which is around double the size of Etihad, though the Abu Dhabi carrier—based less than 100 miles from Dubai—is closing the gap, boosting capacity by 15.4% between 2009 and 2014, according to consultant Oliver Wyman.
Qatar led the Gulf trio with growth of 16.9% over the same period while Emirates added 13.1%, both trailing the 17.6% growth rate of Turkish Airlines, which is exploiting its geographical position to similar effect.
The expansion of the Gulf carriers has upset some in the U.S. and European airline industry, who complain in part that their state backing gives them an unfair advantage.
Capt. Lee Moak, president of the Air Line Pilots Association, International, who attended the air show, reiterated a call for the elimination of low-interest financing by the U.S. Export-Import Bank for Boeing jets to the Middle Eastern airlines. "U.S. government policies should not disadvantage U.S. airlines while helping our foreign competitors," he said.
However, U.S. aerospace companies including Boeing contend existing government policies support thousands of domestic jobs.
—Jon Ostrower in Chicago contributed to this article.
Source: http://online.wsj.com
Dubai's Emirates Air Orders 150 Boeing 777X Planes Worth $76 Billion: Order Helps Make the Model Largest Product Launch in Commercial Jetliner
The Wall Street Journal
By Rory Jones
Updated Nov. 17, 2013 10:23 a.m. ET
DUBAI—Emirates Airline on Sunday placed a $76 billion order with Boeing Co. at the Dubai airshow for 150 of the manufacturer's new 777X aircraft, helping make the model the largest product launch in commercial jetliner history.
The Dubai-based carrier, which is the world's largest international airline by capacity, is the biggest scalp so far for Boeing as it is the largest operator of the manufacturer's current 777 fleet, with more than 120 in service.
Qatar Airways, meanwhile, placed an order for 50 Boeing 777X worth $19 billion, and Emirates said it had purchase rights for a further 50 777X.
Earlier on Sunday, Etihad Airways became the second customer to order the 777X, purchasing 25 aircraft in a bulk commitment after Lufthansa first committed to buy the jet in September. The announcements meant Boeing received almost $100 billion in orders for the 777X, its best launch, according to Boeing Chief Executive James McNerney.
Boeing is expected to begin delivery of the revamped and more fuel-efficient version of the 777 aircraft before the end of the decade.
"This will help Emirates meet its future need competitive with the latest and most efficient aircraft," Sheikh Ahmed bin Saeed Al Maktoum, the airline's chairman, told reporters at a news conference at the Dubai airshow.
Boeing hopes to sell the 777X to many airlines around the world, such as Cathay Pacific Airways Ltd. and International Consolidated Airlines Group SA, parent of British Airways.
At the same announcement of the launch of the 777X, FlyDubai, the short-haul carrier in Dubai, ordered Boeing aircraft worth $11.4 billion.
Emirates on Sunday said it would order an additional 50 Airbus A380 planes worth $23 billion, taking its total order of the aircraft to 140.
The Dubai-based airline's order book for the A380 now amounts to $45 billion, Sheikh Ahmed said. Emirates is the biggest operator of the larger-body aircraft in the world, which came into service some five years ago.
The additional A380s will be used for new routes and to replace old aircraft, Emirates said.
Source: http://online.wsj.com
By Rory Jones
Updated Nov. 17, 2013 10:23 a.m. ET
DUBAI—Emirates Airline on Sunday placed a $76 billion order with Boeing Co. at the Dubai airshow for 150 of the manufacturer's new 777X aircraft, helping make the model the largest product launch in commercial jetliner history.
The Dubai-based carrier, which is the world's largest international airline by capacity, is the biggest scalp so far for Boeing as it is the largest operator of the manufacturer's current 777 fleet, with more than 120 in service.
Qatar Airways, meanwhile, placed an order for 50 Boeing 777X worth $19 billion, and Emirates said it had purchase rights for a further 50 777X.
Earlier on Sunday, Etihad Airways became the second customer to order the 777X, purchasing 25 aircraft in a bulk commitment after Lufthansa first committed to buy the jet in September. The announcements meant Boeing received almost $100 billion in orders for the 777X, its best launch, according to Boeing Chief Executive James McNerney.
Boeing is expected to begin delivery of the revamped and more fuel-efficient version of the 777 aircraft before the end of the decade.
"This will help Emirates meet its future need competitive with the latest and most efficient aircraft," Sheikh Ahmed bin Saeed Al Maktoum, the airline's chairman, told reporters at a news conference at the Dubai airshow.
Boeing hopes to sell the 777X to many airlines around the world, such as Cathay Pacific Airways Ltd. and International Consolidated Airlines Group SA, parent of British Airways.
At the same announcement of the launch of the 777X, FlyDubai, the short-haul carrier in Dubai, ordered Boeing aircraft worth $11.4 billion.
Emirates on Sunday said it would order an additional 50 Airbus A380 planes worth $23 billion, taking its total order of the aircraft to 140.
The Dubai-based airline's order book for the A380 now amounts to $45 billion, Sheikh Ahmed said. Emirates is the biggest operator of the larger-body aircraft in the world, which came into service some five years ago.
The additional A380s will be used for new routes and to replace old aircraft, Emirates said.
Source: http://online.wsj.com
Sunday, November 03, 2013
Airbus forges closer South African ties
By Donwald Pressly
The European-based aircraft company, Airbus, is strengthening its linkages with the South African aviation market by investing in beneficiation processes associated with downstream industries making components for their commercial and military crafts.
Airbus in Toulouse, France, is focusing on these projects with a view to reigniting the A400M – a defense transport aircraft – program, which the South African defense department decided was too expensive four years ago.
Airbus analyst Tina Rose said Airbus – which is owned by EADS with plants in Hamburg, Toulouse, Seville and Filton near Bristol – planned to double its procurement from South Africa by 2020. It currently imports components from South Africa worth R350 million a year.
While top Airbus officials were cautious to comment about negotiations with the South African government about the possible future use of the A400M to assist with SA National Defense Force (SANDF) troop and military vehicle deployment in African countries, it is the company’s view that the aircraft was essential to fulfil South Africa’s continental peacekeeping obligations.
In his medium-term budget policy statement Finance Minister Pravin Gordhan allocated almost R60m for contractual penalties incurred by Denel Aerostructures relating to the A400M cancelled contract.
South Africa announced in 2004 that it would purchase eight A400Ms at a cost of e837m (R11 billion). It cancelled them in 2009.
It is estimated that South Africa needs 300 new non-military aircraft over the next 20 years to cater for its commercial and tourist expansion on the continent.
Airbus strategic marketing and analysis executive Andrew Gordon said South Africa “is helping drive the development of aviation on the African continent with a requirement of over 300 passenger aircraft to serve the South African market by 2032”. Africa as a whole would need about 1 000 new aircraft in this time.
The company, which produces the A400M in Seville, Spain, makes much play of the fact that Denel Aerostructures produced the wing-to-fuselage fairing and fuselage top-shells.
Top-shells, machined skins of aluminum alloy positioned between the wings and the fuselage, are made up of more than 1 000 parts.
In September, the first Airbus A400M with these South African design and manufacturing contributions was handed over to the French air force, Engineering News reported.
The wing-to-fuselage fairing functions as a protective, aerodynamic shroud over sensitive equipment located in the center wing part of the A400M. It is believed to be the largest single aircraft component yet produced in South Africa, SAinfo reported.
Airbus is going out of its way to support Trade and Industry Minister Rob Davies’ plan to encourage the domestic beneficiation of the country’s mineral resources.
Rose noted that Airbus had signed an agreement with the local scientific research and development organization, CSIR, focusing on titanium powder production. While it was still in the evaluation phase, it was envisaged that this would be used instead of a heavier steel on aircraft and would likely be much cheaper.
Earlier in the year, Airbus Military placed a R200m contract with Denel for the manufacturing of “ribs, spars and swords” – the inside structure of the A400M’s tail section.
Denel chairman Zoli Kunene notably described the A400M as “the most cost-efficient and versatile airlifter ever conceived and absolutely unique in its capabilities”, SAinfo reported.
A private local aeronautical engineering and manufacturing company, Aerosud – formed in 1990 by the then key designers of the Denel Rooivalk attack helicopter – manufactures the A400M’s cockpit lining, cabinet lining and the wing-tip.
In addition, Cape Town-based Cobham SATCOM supplies the aircraft’s satellite communications antennae and underlying systems. It also supplies these for the A320, A350, as well as the Boeing B737 and B747.
Plane Talking’s Linden Birns, who represents Airbus locally, pointed out that the A400M was ideally suited to the typical African peace-support missions that were undertaken by South Africa. It has a range of 3 297km with a payload of 37 tons. This puts it within easy reach from Waterkloof with Kinshasa or Nairobi. With a lesser load of 30 tons, the range jumps to 4 537km, while with a 20 ton payload, the range moves up to 6 389km. This would take it to Abu Dhabi or Cairo from Waterkloof with ease.
Didier Vernet, the head of A400M product marketing, said the craft meant “quicker deployment” – in three days 400 troops, 60 vehicles and 100 tons of equipment could be delivered to a hotspot using 10 A400Ms. South Africa is reliant on dated Hercules aircraft and hired aircraft for its current deployments in Africa.
Earlier this year SAA took delivery of its first two A320s out of a total of 20 A320 “family” aircraft ordered in 2010 from Airbus. The A320s listed price is $91.5m (about R911.9m). The A320s will replace its present fleet of 737-800s – produced by competitor Boeing – and will augment the A319s it already has in service, marking the latest phase of SAA’s fleet modernization plan.
Birns said SAA had, in addition, begun a tender process for more fuel-efficient and economic aircraft to replace its current fleet of four-engined A340-600s.
Airbus’s Michael Bausor, the A350 XWB marketing director, said his company was proposing that “a future fleet solution” be built around the A350 family of twin-engined long haul planes.
Airbus airline marketing manager Kwame Bekoe argued that this would save SAA through efficiencies arising out of commonality including shorter conversion training for pilots, cabin crew and technical personnel. Commonality refers to the similarities of the A330-200s, A319s and A320s with common spares and technical support infrastructure.
The writer was a guest of Airbus in France.
Source: http://www.iol.co.za
The European-based aircraft company, Airbus, is strengthening its linkages with the South African aviation market by investing in beneficiation processes associated with downstream industries making components for their commercial and military crafts.
Airbus in Toulouse, France, is focusing on these projects with a view to reigniting the A400M – a defense transport aircraft – program, which the South African defense department decided was too expensive four years ago.
Airbus analyst Tina Rose said Airbus – which is owned by EADS with plants in Hamburg, Toulouse, Seville and Filton near Bristol – planned to double its procurement from South Africa by 2020. It currently imports components from South Africa worth R350 million a year.
While top Airbus officials were cautious to comment about negotiations with the South African government about the possible future use of the A400M to assist with SA National Defense Force (SANDF) troop and military vehicle deployment in African countries, it is the company’s view that the aircraft was essential to fulfil South Africa’s continental peacekeeping obligations.
In his medium-term budget policy statement Finance Minister Pravin Gordhan allocated almost R60m for contractual penalties incurred by Denel Aerostructures relating to the A400M cancelled contract.
South Africa announced in 2004 that it would purchase eight A400Ms at a cost of e837m (R11 billion). It cancelled them in 2009.
It is estimated that South Africa needs 300 new non-military aircraft over the next 20 years to cater for its commercial and tourist expansion on the continent.
Airbus strategic marketing and analysis executive Andrew Gordon said South Africa “is helping drive the development of aviation on the African continent with a requirement of over 300 passenger aircraft to serve the South African market by 2032”. Africa as a whole would need about 1 000 new aircraft in this time.
The company, which produces the A400M in Seville, Spain, makes much play of the fact that Denel Aerostructures produced the wing-to-fuselage fairing and fuselage top-shells.
Top-shells, machined skins of aluminum alloy positioned between the wings and the fuselage, are made up of more than 1 000 parts.
In September, the first Airbus A400M with these South African design and manufacturing contributions was handed over to the French air force, Engineering News reported.
The wing-to-fuselage fairing functions as a protective, aerodynamic shroud over sensitive equipment located in the center wing part of the A400M. It is believed to be the largest single aircraft component yet produced in South Africa, SAinfo reported.
Airbus is going out of its way to support Trade and Industry Minister Rob Davies’ plan to encourage the domestic beneficiation of the country’s mineral resources.
Rose noted that Airbus had signed an agreement with the local scientific research and development organization, CSIR, focusing on titanium powder production. While it was still in the evaluation phase, it was envisaged that this would be used instead of a heavier steel on aircraft and would likely be much cheaper.
Earlier in the year, Airbus Military placed a R200m contract with Denel for the manufacturing of “ribs, spars and swords” – the inside structure of the A400M’s tail section.
Denel chairman Zoli Kunene notably described the A400M as “the most cost-efficient and versatile airlifter ever conceived and absolutely unique in its capabilities”, SAinfo reported.
A private local aeronautical engineering and manufacturing company, Aerosud – formed in 1990 by the then key designers of the Denel Rooivalk attack helicopter – manufactures the A400M’s cockpit lining, cabinet lining and the wing-tip.
In addition, Cape Town-based Cobham SATCOM supplies the aircraft’s satellite communications antennae and underlying systems. It also supplies these for the A320, A350, as well as the Boeing B737 and B747.
Plane Talking’s Linden Birns, who represents Airbus locally, pointed out that the A400M was ideally suited to the typical African peace-support missions that were undertaken by South Africa. It has a range of 3 297km with a payload of 37 tons. This puts it within easy reach from Waterkloof with Kinshasa or Nairobi. With a lesser load of 30 tons, the range jumps to 4 537km, while with a 20 ton payload, the range moves up to 6 389km. This would take it to Abu Dhabi or Cairo from Waterkloof with ease.
Didier Vernet, the head of A400M product marketing, said the craft meant “quicker deployment” – in three days 400 troops, 60 vehicles and 100 tons of equipment could be delivered to a hotspot using 10 A400Ms. South Africa is reliant on dated Hercules aircraft and hired aircraft for its current deployments in Africa.
Earlier this year SAA took delivery of its first two A320s out of a total of 20 A320 “family” aircraft ordered in 2010 from Airbus. The A320s listed price is $91.5m (about R911.9m). The A320s will replace its present fleet of 737-800s – produced by competitor Boeing – and will augment the A319s it already has in service, marking the latest phase of SAA’s fleet modernization plan.
Birns said SAA had, in addition, begun a tender process for more fuel-efficient and economic aircraft to replace its current fleet of four-engined A340-600s.
Airbus’s Michael Bausor, the A350 XWB marketing director, said his company was proposing that “a future fleet solution” be built around the A350 family of twin-engined long haul planes.
Airbus airline marketing manager Kwame Bekoe argued that this would save SAA through efficiencies arising out of commonality including shorter conversion training for pilots, cabin crew and technical personnel. Commonality refers to the similarities of the A330-200s, A319s and A320s with common spares and technical support infrastructure.
The writer was a guest of Airbus in France.
Source: http://www.iol.co.za
Sunday, October 20, 2013
Airbus chief executive officer says politics in Japan influences aircraft orders
Oct 21 (Reuters) - Airbus chief executive Fabrice Bregier said on Monday that politics in Japan can influence new aircraft purchases by the nation's airlines.
"It is clear the political environment has some influence on business as we can see here in Japan, or in Europe and the United States," Bregier said on Monday during a speech at the Nikkei Global Management Forum in Tokyo.
Bregier was speaking two weeks after Japan Airlines ordered dozens of Airbus A350s, its first jets from the European company. Bregier cited the Japan Airlines order as a decision based on business concerns.
The Japan Airlines order cracked Boeing Co's half-century dominance in Japan, where it boasts an 80 percent market share.
Source: http://www.reuters.com
"It is clear the political environment has some influence on business as we can see here in Japan, or in Europe and the United States," Bregier said on Monday during a speech at the Nikkei Global Management Forum in Tokyo.
Bregier was speaking two weeks after Japan Airlines ordered dozens of Airbus A350s, its first jets from the European company. Bregier cited the Japan Airlines order as a decision based on business concerns.
The Japan Airlines order cracked Boeing Co's half-century dominance in Japan, where it boasts an 80 percent market share.
Source: http://www.reuters.com
Business boost for Rolls-Royce at Barnoldswick and Kelbrook firm Euravia
West Craven’s aerospace firms have received a double boost.
Rolls-Royce at Barnoldswick is expected to benefit from a £6 billion order from Japan Airlines for more than 30 new Airbus wide-body jets.
They will be powered by Trent XWB engines and the blades are made at Rolls’ Skipton Road site, which employs 1,000 people.
Under the latest deal, the Far East airline has secured 31 A350s, which will enter service from 2019 onwards, as part of a six-year fleet replacement programme.
An option has been taken on a further 25 craft, which are believed to have been selected in preference to Boeing’s delayed 777X.
Pendle MP Andrew Stephenson said: “This is yet more good news for the aerospace industry in Lancashire and the north-west.”
The group has secured more than 750 orders for the jets to date and aims to start delivering them to customers by the end of next year.
Meanwhile, another local aerospace firm has signed a major deal to repair jet engines for an American company.
Euravia Engineering, based on Colne Road, Kelbrook, will work with Greenwich AeroGroup, from Wichita, to provide maintenance, repair and overhaul services for Pratt & Whitney’s PT6A and PT6T engines on fixed and rotor wing aircraft in the United States.
The firm, which won a Queen’s Award for International Trade in 2010, has a mobile repair team in America, and engines can also be brought to the UK.
Euravia managing director Dennis Mendoros said: “We are very excited to work with Greenwich AeroGroup to expand Euravia’s services into the United States. Our commitment to quality engineering, cost-effective services and personal service aligns well with Greenwich AeroGroup’s pledge to provide customers with optimal aviation solutions.”
Jeff Mihalic, senior vice-president of Greenwich AeroGroup, said: “Euravia has an outstanding international reputation for delivering cost-effective, high-quality gas turbine engine services with exceptional performance and reliability.”
Euravia was founded in 1988 by Sudanese-born Mr Mendoros and the company has grown to a £10m turnover business, specialising in repairing and overhauling US-made Pratt & Whitney jet engines.
Source: http://www.cravenherald.co.uk
Rolls-Royce at Barnoldswick is expected to benefit from a £6 billion order from Japan Airlines for more than 30 new Airbus wide-body jets.
They will be powered by Trent XWB engines and the blades are made at Rolls’ Skipton Road site, which employs 1,000 people.
Under the latest deal, the Far East airline has secured 31 A350s, which will enter service from 2019 onwards, as part of a six-year fleet replacement programme.
An option has been taken on a further 25 craft, which are believed to have been selected in preference to Boeing’s delayed 777X.
Pendle MP Andrew Stephenson said: “This is yet more good news for the aerospace industry in Lancashire and the north-west.”
The group has secured more than 750 orders for the jets to date and aims to start delivering them to customers by the end of next year.
Meanwhile, another local aerospace firm has signed a major deal to repair jet engines for an American company.
Euravia Engineering, based on Colne Road, Kelbrook, will work with Greenwich AeroGroup, from Wichita, to provide maintenance, repair and overhaul services for Pratt & Whitney’s PT6A and PT6T engines on fixed and rotor wing aircraft in the United States.
The firm, which won a Queen’s Award for International Trade in 2010, has a mobile repair team in America, and engines can also be brought to the UK.
Euravia managing director Dennis Mendoros said: “We are very excited to work with Greenwich AeroGroup to expand Euravia’s services into the United States. Our commitment to quality engineering, cost-effective services and personal service aligns well with Greenwich AeroGroup’s pledge to provide customers with optimal aviation solutions.”
Jeff Mihalic, senior vice-president of Greenwich AeroGroup, said: “Euravia has an outstanding international reputation for delivering cost-effective, high-quality gas turbine engine services with exceptional performance and reliability.”
Euravia was founded in 1988 by Sudanese-born Mr Mendoros and the company has grown to a £10m turnover business, specialising in repairing and overhauling US-made Pratt & Whitney jet engines.
Source: http://www.cravenherald.co.uk
Friday, October 11, 2013
Boeing Jet Marketing Chief to Retire: Duties Will Be Split Between Sales and Finance Units
Oct. 10, 2013 3:07 p.m. ET
By Jon Ostrower
The Wall Street Journal
The head of marketing for Boeing Co.'s commercial airplanes division is retiring and the company is reorganizing its marketing and business development organizations.
Mike Bair, a 34-year veteran of the Chicago-based aircraft maker, will step down on Nov. 1. Ray Conner , chief executive officer of commercial airplanes, disclosed the move on Thursday in a memo to employees that didn't give a reason for Mr. Bair's retirement.
Mr. Bair, 57, took over as vice president of marketing and business development in February 2012, after a string of senior positions including serving as the first program chief for the 787 Dreamliner from before the plane's launch in 2004 to October 2007, when the jet's development suffered its first delays. Mr. Bair was instrumental in the conception of the program, including its radical supply chain design, which was a major cause of the delays.
Production delays would end up costing Boeing billions of dollars and the Dreamliner would deliver 3½ years behind schedule. More recently, the 787 has suffered a spate of technical issues in service, including a 3½ month grounding after lithium-ion batteries burned on two Dreamliners.
Mr. Bair's planned departure comes as Boeing moves toward getting final approval from its board of directors to launch its new 777X, which has so far secured an order from Deutsche Lufthansa AG. Japan Airlines Co. on Monday selected the Airbus A350 over the 777X, owing its decision in part to the Dreamliner's delays. The decision, by one of Boeing's most loyal customers, was seen as a major victory for rival Airbus, a unit of European Aeronautic Defence & Space Co.
A Boeing spokesman had no comment on Mr. Bair's decision to retire, calling it a personal choice.
Mr. Conner said that Boeing will split Mr. Bair's responsibilities after his departure, with marketing becoming part of Boeing's commercial sales operation, headed by John Wojick , senior vice president of global sales. The business development role will become part of the finance division, headed Kevin Schemm, a vice president.
Mr. Conner's memo called Mr. Bair "a thought leader," and noted that Mr. Bair had worked on almost all the company's major commercial jetliner since he joined the company in 1979.
Before his current role, Mr. Bair was responsible for developing a strategy for its smallest jets. He advocated developing an all-new jet to replace its venerable 737 workhorse.
"I have a lot of scars, so I know what not to do this time around," he said of the effort in a 2011 interview.
Boeing ended up putting new engines on its 737 rather than developing an all new jet, a plan it abandoned when American Airlines parent AMR Corp. split an order for 460 jets with rival Airbus.
Source: http://online.wsj.com
By Jon Ostrower
The Wall Street Journal
The head of marketing for Boeing Co.'s commercial airplanes division is retiring and the company is reorganizing its marketing and business development organizations.
Mike Bair, a 34-year veteran of the Chicago-based aircraft maker, will step down on Nov. 1. Ray Conner , chief executive officer of commercial airplanes, disclosed the move on Thursday in a memo to employees that didn't give a reason for Mr. Bair's retirement.
Mr. Bair, 57, took over as vice president of marketing and business development in February 2012, after a string of senior positions including serving as the first program chief for the 787 Dreamliner from before the plane's launch in 2004 to October 2007, when the jet's development suffered its first delays. Mr. Bair was instrumental in the conception of the program, including its radical supply chain design, which was a major cause of the delays.
Production delays would end up costing Boeing billions of dollars and the Dreamliner would deliver 3½ years behind schedule. More recently, the 787 has suffered a spate of technical issues in service, including a 3½ month grounding after lithium-ion batteries burned on two Dreamliners.
Mr. Bair's planned departure comes as Boeing moves toward getting final approval from its board of directors to launch its new 777X, which has so far secured an order from Deutsche Lufthansa AG. Japan Airlines Co. on Monday selected the Airbus A350 over the 777X, owing its decision in part to the Dreamliner's delays. The decision, by one of Boeing's most loyal customers, was seen as a major victory for rival Airbus, a unit of European Aeronautic Defence & Space Co.
A Boeing spokesman had no comment on Mr. Bair's decision to retire, calling it a personal choice.
Mr. Conner said that Boeing will split Mr. Bair's responsibilities after his departure, with marketing becoming part of Boeing's commercial sales operation, headed by John Wojick , senior vice president of global sales. The business development role will become part of the finance division, headed Kevin Schemm, a vice president.
Mr. Conner's memo called Mr. Bair "a thought leader," and noted that Mr. Bair had worked on almost all the company's major commercial jetliner since he joined the company in 1979.
Before his current role, Mr. Bair was responsible for developing a strategy for its smallest jets. He advocated developing an all-new jet to replace its venerable 737 workhorse.
"I have a lot of scars, so I know what not to do this time around," he said of the effort in a 2011 interview.
Boeing ended up putting new engines on its 737 rather than developing an all new jet, a plan it abandoned when American Airlines parent AMR Corp. split an order for 460 jets with rival Airbus.
Source: http://online.wsj.com
Tuesday, October 08, 2013
Boeing's Top Salesman Works to Rebuild Customer Trust, Fend Off Airbus: WSJ
October 8, 2013, 9:17 p.m. ET
By JON OSTROWER
The Wall Street Journal
In January, when burning batteries on two Japanese-owned 787 Dreamliners grounded the jetliner world-wide, Boeing Co. sales chief John Wojick flew to Tokyo to try to reassure two of his most loyal customers.
On Monday, he learned that Boeing's efforts to keep them both firmly in its corner weren't enough. Japan Airlines Co. announced its first-ever order from rival Airbus, a deal for at least 31 widebody A350s valued at as much as $9.5 billion.
The order is a setback in Mr. Wojick's efforts to defend Boeing's turf from Airbus and build a more aggressive, customer-focused sales culture since he took the top sales job just over a year ago. It puts heavy pressure on the 56-year-old executive to avert a similar Airbus deal with the second of its two key Japanese clients, All Nippon Holdings Inc., which is said to be nearing a decision on a major purchase.
Mr. Wojick, a former competitive downhill skier with a history of sales comebacks, has spent the year working to regain the trust of Boeing's customers—some of whom were already skeptical of the Dreamliner after years of production glitches and delays.
To fend off Airbus, he is pushing three aircraft whose improved fuel efficiency makes them vital to Boeing's future, the narrow-body 737 Max, a stretched version of the Dreamliner, and the twin-aisle 777X, the company's planned competitor to the A350s bought by JAL.
"Our failure on the 787 has caused people to want to understand why we believe the 737 Max and the 777X will be a different story," Mr. Wojick said in a rare interview earlier this year.
Through a spokesman, Mr. Wojick declined to comment on JAL's Airbus order. Boeing said it was "disappointed with the selection," but aims to continue the "strong relationship" with JAL it has built over the past 50 years.
Pitching jetliners is among the toughest jobs in sales. Multibillion-dollar orders for big passenger aircraft can take years to nail down. The process requires patience and a deep understanding of the strategic needs of the airline in question. And it depends on product-development cycles that can last up to a decade. Airbus began test flights of the A350 in June. Boeing's 777X is still five years away.
Mr. Wojick's playbook, say Boeing customers and industry executives, has included offering deeper discounts on its planes and greater flexibility on delivery timing. Inside Boeing, he also has been an advocate for customers' needs, which he says the company hasn't always adequately grasped.
Mr. Wojick "asks the right questions to understand the right metrics for [an aircraft-purchasing] decision," says Nico Buchholz, executive vice president of Deutsche Lufthansa AG. Last month, after years of deliberation, the German carrier awarded Boeing most of a $19 billion order that included 34 777Xs, an update of the company's long-range 777. Lufthansa also ordered 25 jets from Airbus, a unit of European Aeronautic Defence & Space Co.
Winning the Lufthansa commitment was Boeing's opening salvo against Airbus. The industry widely expects it to take advantage of next month's Dubai air show to give the official go-ahead to the 777X, and to snap up a wave of orders.
But the real test for Mr. Wojick will be which plane maker "has the stronger position in the widebody market five years from now. We don't know the answer today," says Howard Rubel, aerospace analyst and managing director of equity research at Jefferies LLC.
Mr. Wojick, whose boyish face is topped by graying hair, is an unusually low-key player in the big-ego world of jet sales. His counterpart at Airbus, John Leahy, is famous for firing rhetorical missiles at competitors. One of Mr. Wojick's predecessors at Boeing drove a red Porsche with the license plate JETDLR.
"I have no idea what my license plate number is," says Mr. Wojick, who drives an Audi TT.
"He's blissfully happy under the radar," says John Feren, executive vice president of aircraft lessor Aviation Capital Group, and Mr. Wojick's former boss at Boeing.
Mr. Wojick, the son of an airline pilot, studied aerodynamic engineering at the University of Colorado, then took a Boeing job in 1980.
He returned to Colorado to get his M.B.A., meeting his wife Beth in 1982 while he worked part time as a ski instructor. He later rejoined Boeing, rising through the ranks.
In a pivotal early sales deal in 1996, he beat out McDonnell Douglas, which later merged with Boeing, and Airbus, then much smaller than it is today, to replace the aging fleet of Continental Airlines.
Continental's then-Chief Executive Gordon Bethune, a former Boeing executive, says Boeing won in "large part…due to the care, attention and focus that Wojick put on the account."
Mr. Wojick's understated manner belies a sometimes-fiery temper, according to those who know him.
Amid 3½ years of delays in producing the Dreamliner, Boeing executives debated how to compensate customers who ordered the plane. Mr. Wojick, then the head of Asia-Pacific sales, argued that Boeing needed to do more for his customers, including JAL and ANA, the jet's first buyers.
In 2010, Mr. Wojick stormed out of an internal meeting after a heated discussion with Marlin Dailey, then Boeing's sales chief, according to people who attended.
"Quite frankly we were failing at meeting our commitment to our customers," Mr. Wojick recalls. "Some of us may have been able to handle our emotions a little better than others."
Mr. Dailey, now chief marketing officer at aircraft lessor AWAS, said Boeing was doing the best it could with limited resources. Both men have long since reconciled.
Boeing hasn't disclosed how it compensated Dreamliner customers for delays. Industry officials say it included cash payments and steep discounts on other jets, among other accommodations.
In July 2011, Boeing was caught off guard when American Airlines parent AMR Corp. split orders for 460 new airplanes between Airbus and Boeing in the largest aircraft order ever. The deal was a triumph for Airbus, which got its first orders from American in two decades.
Mr. Wojick says Boeing failed to understand American's needs. "For many, many years [American] struggled, and for many, many years we probably could have been better partners with them," he said.
The month after the debacle, Boeing replaced its sales chief, Mr. Dailey, with Ray Conner, who moved Mr. Wojick from Asia to head North American sales. In June 2012, Mr. Conner was named head of Boeing's commercial airplanes division.
The following month, Mr. Wojick landed an order from United Continental Holdings Inc. for 150 planes valued at around $14.7 billion at list prices, a critical win after allowing Airbus to make inroads with American. Mr. Wojick was named global sales chief that August.
Mr. Wojick's tenure started strong. Four months after he took over, Boeing reclaimed the title of world's biggest aircraft maker from Airbus, capturing the No. 1 spot in orders and deliveries for the first time in more than a decade.
But within days, the Dreamliner battery crisis surfaced. Mr. Wojick leaned on his relationships with JAL and ANA, trying to reassure customers while Boeing sought a solution to get the Dreamliner flying again.
"It takes hard work to have a clear conversation with a customer about what you do and don't know," he said. The Dreamliner resumed flights in April.
Investors seem sanguine about this week's JAL setback. Boeing's shares, up more than 50% this year, have fallen about 1.5% this week but are still trading near an all-time high.
But Boeing's status as top jet seller is tenuous: Airbus was outselling it this year even before the JAL deal, with 1,062 net orders through September to Boeing's 890, including more than 100 orders and commitments for a new version of its Dreamliner launched in June.
The battle to win orders for the long-range 777 against Airbus's A350 is especially intense. That fight threatens the Boeing cash cow and has turned into a "personal vendetta" between the two sales teams, said Steven Udvar-Házy, chief executive of Air Lease Corp. "There's been a lot of venom that's built up fighting for campaigns" over the years.
Source: http://online.wsj.com
By JON OSTROWER
The Wall Street Journal
In January, when burning batteries on two Japanese-owned 787 Dreamliners grounded the jetliner world-wide, Boeing Co. sales chief John Wojick flew to Tokyo to try to reassure two of his most loyal customers.
On Monday, he learned that Boeing's efforts to keep them both firmly in its corner weren't enough. Japan Airlines Co. announced its first-ever order from rival Airbus, a deal for at least 31 widebody A350s valued at as much as $9.5 billion.
The order is a setback in Mr. Wojick's efforts to defend Boeing's turf from Airbus and build a more aggressive, customer-focused sales culture since he took the top sales job just over a year ago. It puts heavy pressure on the 56-year-old executive to avert a similar Airbus deal with the second of its two key Japanese clients, All Nippon Holdings Inc., which is said to be nearing a decision on a major purchase.
Mr. Wojick, a former competitive downhill skier with a history of sales comebacks, has spent the year working to regain the trust of Boeing's customers—some of whom were already skeptical of the Dreamliner after years of production glitches and delays.
To fend off Airbus, he is pushing three aircraft whose improved fuel efficiency makes them vital to Boeing's future, the narrow-body 737 Max, a stretched version of the Dreamliner, and the twin-aisle 777X, the company's planned competitor to the A350s bought by JAL.
"Our failure on the 787 has caused people to want to understand why we believe the 737 Max and the 777X will be a different story," Mr. Wojick said in a rare interview earlier this year.
Through a spokesman, Mr. Wojick declined to comment on JAL's Airbus order. Boeing said it was "disappointed with the selection," but aims to continue the "strong relationship" with JAL it has built over the past 50 years.
Pitching jetliners is among the toughest jobs in sales. Multibillion-dollar orders for big passenger aircraft can take years to nail down. The process requires patience and a deep understanding of the strategic needs of the airline in question. And it depends on product-development cycles that can last up to a decade. Airbus began test flights of the A350 in June. Boeing's 777X is still five years away.
Mr. Wojick's playbook, say Boeing customers and industry executives, has included offering deeper discounts on its planes and greater flexibility on delivery timing. Inside Boeing, he also has been an advocate for customers' needs, which he says the company hasn't always adequately grasped.
Mr. Wojick "asks the right questions to understand the right metrics for [an aircraft-purchasing] decision," says Nico Buchholz, executive vice president of Deutsche Lufthansa AG. Last month, after years of deliberation, the German carrier awarded Boeing most of a $19 billion order that included 34 777Xs, an update of the company's long-range 777. Lufthansa also ordered 25 jets from Airbus, a unit of European Aeronautic Defence & Space Co.
Winning the Lufthansa commitment was Boeing's opening salvo against Airbus. The industry widely expects it to take advantage of next month's Dubai air show to give the official go-ahead to the 777X, and to snap up a wave of orders.
But the real test for Mr. Wojick will be which plane maker "has the stronger position in the widebody market five years from now. We don't know the answer today," says Howard Rubel, aerospace analyst and managing director of equity research at Jefferies LLC.
Mr. Wojick, whose boyish face is topped by graying hair, is an unusually low-key player in the big-ego world of jet sales. His counterpart at Airbus, John Leahy, is famous for firing rhetorical missiles at competitors. One of Mr. Wojick's predecessors at Boeing drove a red Porsche with the license plate JETDLR.
"I have no idea what my license plate number is," says Mr. Wojick, who drives an Audi TT.
"He's blissfully happy under the radar," says John Feren, executive vice president of aircraft lessor Aviation Capital Group, and Mr. Wojick's former boss at Boeing.
Mr. Wojick, the son of an airline pilot, studied aerodynamic engineering at the University of Colorado, then took a Boeing job in 1980.
He returned to Colorado to get his M.B.A., meeting his wife Beth in 1982 while he worked part time as a ski instructor. He later rejoined Boeing, rising through the ranks.
In a pivotal early sales deal in 1996, he beat out McDonnell Douglas, which later merged with Boeing, and Airbus, then much smaller than it is today, to replace the aging fleet of Continental Airlines.
Continental's then-Chief Executive Gordon Bethune, a former Boeing executive, says Boeing won in "large part…due to the care, attention and focus that Wojick put on the account."
Mr. Wojick's understated manner belies a sometimes-fiery temper, according to those who know him.
Amid 3½ years of delays in producing the Dreamliner, Boeing executives debated how to compensate customers who ordered the plane. Mr. Wojick, then the head of Asia-Pacific sales, argued that Boeing needed to do more for his customers, including JAL and ANA, the jet's first buyers.
In 2010, Mr. Wojick stormed out of an internal meeting after a heated discussion with Marlin Dailey, then Boeing's sales chief, according to people who attended.
"Quite frankly we were failing at meeting our commitment to our customers," Mr. Wojick recalls. "Some of us may have been able to handle our emotions a little better than others."
Mr. Dailey, now chief marketing officer at aircraft lessor AWAS, said Boeing was doing the best it could with limited resources. Both men have long since reconciled.
Boeing hasn't disclosed how it compensated Dreamliner customers for delays. Industry officials say it included cash payments and steep discounts on other jets, among other accommodations.
In July 2011, Boeing was caught off guard when American Airlines parent AMR Corp. split orders for 460 new airplanes between Airbus and Boeing in the largest aircraft order ever. The deal was a triumph for Airbus, which got its first orders from American in two decades.
Mr. Wojick says Boeing failed to understand American's needs. "For many, many years [American] struggled, and for many, many years we probably could have been better partners with them," he said.
The month after the debacle, Boeing replaced its sales chief, Mr. Dailey, with Ray Conner, who moved Mr. Wojick from Asia to head North American sales. In June 2012, Mr. Conner was named head of Boeing's commercial airplanes division.
The following month, Mr. Wojick landed an order from United Continental Holdings Inc. for 150 planes valued at around $14.7 billion at list prices, a critical win after allowing Airbus to make inroads with American. Mr. Wojick was named global sales chief that August.
Mr. Wojick's tenure started strong. Four months after he took over, Boeing reclaimed the title of world's biggest aircraft maker from Airbus, capturing the No. 1 spot in orders and deliveries for the first time in more than a decade.
But within days, the Dreamliner battery crisis surfaced. Mr. Wojick leaned on his relationships with JAL and ANA, trying to reassure customers while Boeing sought a solution to get the Dreamliner flying again.
"It takes hard work to have a clear conversation with a customer about what you do and don't know," he said. The Dreamliner resumed flights in April.
Investors seem sanguine about this week's JAL setback. Boeing's shares, up more than 50% this year, have fallen about 1.5% this week but are still trading near an all-time high.
But Boeing's status as top jet seller is tenuous: Airbus was outselling it this year even before the JAL deal, with 1,062 net orders through September to Boeing's 890, including more than 100 orders and commitments for a new version of its Dreamliner launched in June.
The battle to win orders for the long-range 777 against Airbus's A350 is especially intense. That fight threatens the Boeing cash cow and has turned into a "personal vendetta" between the two sales teams, said Steven Udvar-Házy, chief executive of Air Lease Corp. "There's been a lot of venom that's built up fighting for campaigns" over the years.
Source: http://online.wsj.com
JAL's Airbus Purchase Upsets Half-Century Relationship With Boeing: 'It's a Heartbreak,' Says Executive With U.S. Aircraft Maker
The Wall Street Journal
By Mayumi Negishi and Daisuke Wakabayashi
Updated Oct. 7, 2013 12:41 p.m. ET
TOKYO—It was a scene unthinkable just 10 years ago: the chief executive of Airbus appearing at a swank hotel conference room, shaking hands with his Japan Airlines Co. counterpart as together they hoisted a model of an A350 jetliner bearing the JAL red crane.
The real significance of the Monday news conference was that JAL's order iced out Boeing Co., which had claimed every previous JAL long-distance-aircraft contract of the past half century.
"We have had a long-standing relationship—it's a heartbreak," said Kostya Zolotusky , managing director of capital markets and leasing at Boeing Capital Corp., the aircraft maker's finance unit.
Boeing's shares fell 51 cents to close at $116.69 Monday on the New York Stock Exchange. Shares of Airbus parent European Aeronautic Defence & Space Co. rose 2.2% to close at €50.30 ($68.19) in Paris.
JAL's decision to buy Airbus planes with a list value of $9.75 billion, marks ablow for Boeing, which dominated the Japanese market for decades. It is also a transformation at Japan's flagship carrier, which has a fleet that is 70% made by Boeing.
The decision was born out of JAL's 2010 bankruptcy, according to people familiar with the situation. Kazuo Inamori , the wealthy founder of ceramics giant Kyocera Corp. and telecommunications company KDDI Corp., took over the airline and shook up its traditional culture, bringing it out of bankruptcy last year. In an interview with The Wall Street Journal shortly after his retirement in March, Mr. Inamori publicly questioned JAL's reliance on a single airplane supplier.
Airbus CEO Fabrice Brégier was heavily involved in the negotiations with JAL, which started to solidify over the summer, the people said.
JAL joins a group of carriers that have bought from both Boeing and Airbus, among the last major global carriers to do so. Splitting orders often means securing better terms for deals at increasingly competitive prices. Among the remaining full-service carriers that have pegged their fleets solely to one manufacturer, El Al Israel Airlines Ltd. and Grupo Aeromexico SAB for Boeing and Ireland's Aer Lingus Ltd. and TAP Air Portugal for Airbus. Many budget carriers like Southwest Airlines Co. and AirAsia Bhd. still operate fleets entirely made up of aircraft from a sole manufacturer.
Airbus gained a new advantage when it began flying the A350 in June, which gave it hard data on the plane's performance in flight tests to show customers. Boeing's 777X, which it is developing as a competitor to the A350, won't be airborne until 2018 or 2019 at the earliest.
Mr. Brégier, standing on Monday with JAL President Yoshiharu Ueki in front of the companies' intertwined logos, said winning over JAL was a sign the Japanese market, like the rest of the world, was opening to competition.
It was important, he said, for the plane maker to make its pitch in Japan, rather than from Airbus's base in Toulouse, France. "If you believe that from Toulouse, you can convince people here who have flown the competitor for 30, 40 years that you have the best product, then you are just damn wrong," Mr. Brégier said. "The problem wasn't Japan or Japanese customers. The problem was probably Airbus."
Boeing's viselike grip over Japan's aeronautics industry can be traced to Japan's attempts to rebuild after World War II with American support. The rapid recovery of companies like Mitsubishi Heavy Industries Ltd. and the predecessor of Kawasaki Heavy Industries Ltd. got a boost from license agreements to make parts for Boeing.
Boeing's first sale of commercial aircraft to JAL and its chief domestic rival, All Nippon Airways, was in 1964, the year Tokyo hosted the Olympic Games. The first of the 129-person Boeing jets inspired pop songs as well as races between aircraft and bullet trains, and remain associated with Japan's rapid postwar growth.
JAL's 1966 order for Boeing 747 jumbo jets—the second placed by any airline—cemented the JAL-Boeing relationship. In the years that followed, JAL took delivery of more than 100 747s, adopting the 747-400 as the airline's signature plane.
The aircraft were retired in 2011 after JAL filed for protection from creditors.
n the 1970s and '80s, Japan became the world's best market for Boeing outside the U.S., as Japan's trade and finance ministries urged airlines to buy more U.S. planes, partly, industry insiders said, to help offset a huge U.S. trade deficit. National carrier JAL—the government didn't sell its full stake until 1987—was particularly susceptible to bureaucratic influence, they said.
Boeing, in turn, gave Japanese manufacturers increasingly large parts of its planes to build, giving policy makers in Tokyo further incentive to protect the aircraft maker's lock on the market. Japan's aerospace industry "built a part of every single one of Boeing's commercial airplanes," Nicole Piasecki , a former president of Boeing Japan, said in a 2009 speech.
The mutually dependent relationship—cemented with subsidies and other support from the Japanese government—looked impossible to breach by outsiders.
Glen S. Fukushima , the president of Airbus Japan from 2005 until last year, recalled attending a meeting of the Association of Asia Pacific Airlines shortly after he joined Airbus and noting that the company supplied 16 of the 17 members. JAL was the only one that had never bought an Airbus plane. "That's how close JAL and Boeing have been," Mr. Fukushima said. "It was considered revolutionary for JAL to say it was even considering Airbus."
But Boeing's hold eventually began to loosen amid airline deregulation and other shifting economic forces. Airbus retained suppliers in Japan, denting Boeing's political advantage as a job generator. About 20% of the A350 is made from components produced by Japanese suppliers such as Ishikawajima-Harima Heavy Industries Co. and Mitsubishi Heavy, according to Airbus. And Japan is trying to develop its own fuel-efficient regional passenger jet, making Boeing as much a rival as a partner.
And JAL, with the government no longer at the helm, has become more cost-conscious since it emerged from bankruptcy protection last year with an initial public offering that was heavily promoted to foreign investors.
Indeed, the carrier is in open warfare with the government, last week accusing Japanese officials of unfairly denying JAL coveted slots that were assigned at Tokyo's Haneda airport.
"What surprises me is not that they've ordered the A350, it's that Boeing was able to hold on to its monopoly for so long," said Henri Courpron , chief executive of aircraft-leasing company International Lease Finance Corp. "I think the Japanese airline industry will benefit over the long term."
Playing Airbus and Boeing against each other should improve the terms that JAL, rival ANA Holdings Inc. and perhaps others Japanese airlines will be able to negotiate, said Mr. Courpron, a former Airbus salesman.
Boeing further hurt itself in Japan with long delays for its new flagship, the 787 Dreamliner, followed by groundings after batteries burned on JAL and ANA planes this year.
In a sign of Boeing's diminishing clout in Japan, Mr. Ueki, the JAL president, said Monday that he didn't take into account the U.S. company's history or supplier relationships in Japan and that the company had no need to consult with Tokyo before selecting Airbus. "JAL was the only factor," he said.
—Daniel Michaels and Jon Ostrower contributed to this article.
Source: http://online.wsj.com
By Mayumi Negishi and Daisuke Wakabayashi
Updated Oct. 7, 2013 12:41 p.m. ET
TOKYO—It was a scene unthinkable just 10 years ago: the chief executive of Airbus appearing at a swank hotel conference room, shaking hands with his Japan Airlines Co. counterpart as together they hoisted a model of an A350 jetliner bearing the JAL red crane.
The real significance of the Monday news conference was that JAL's order iced out Boeing Co., which had claimed every previous JAL long-distance-aircraft contract of the past half century.
"We have had a long-standing relationship—it's a heartbreak," said Kostya Zolotusky , managing director of capital markets and leasing at Boeing Capital Corp., the aircraft maker's finance unit.
Boeing's shares fell 51 cents to close at $116.69 Monday on the New York Stock Exchange. Shares of Airbus parent European Aeronautic Defence & Space Co. rose 2.2% to close at €50.30 ($68.19) in Paris.
JAL's decision to buy Airbus planes with a list value of $9.75 billion, marks ablow for Boeing, which dominated the Japanese market for decades. It is also a transformation at Japan's flagship carrier, which has a fleet that is 70% made by Boeing.
The decision was born out of JAL's 2010 bankruptcy, according to people familiar with the situation. Kazuo Inamori , the wealthy founder of ceramics giant Kyocera Corp. and telecommunications company KDDI Corp., took over the airline and shook up its traditional culture, bringing it out of bankruptcy last year. In an interview with The Wall Street Journal shortly after his retirement in March, Mr. Inamori publicly questioned JAL's reliance on a single airplane supplier.
Airbus CEO Fabrice Brégier was heavily involved in the negotiations with JAL, which started to solidify over the summer, the people said.
JAL joins a group of carriers that have bought from both Boeing and Airbus, among the last major global carriers to do so. Splitting orders often means securing better terms for deals at increasingly competitive prices. Among the remaining full-service carriers that have pegged their fleets solely to one manufacturer, El Al Israel Airlines Ltd. and Grupo Aeromexico SAB for Boeing and Ireland's Aer Lingus Ltd. and TAP Air Portugal for Airbus. Many budget carriers like Southwest Airlines Co. and AirAsia Bhd. still operate fleets entirely made up of aircraft from a sole manufacturer.
Airbus gained a new advantage when it began flying the A350 in June, which gave it hard data on the plane's performance in flight tests to show customers. Boeing's 777X, which it is developing as a competitor to the A350, won't be airborne until 2018 or 2019 at the earliest.
Mr. Brégier, standing on Monday with JAL President Yoshiharu Ueki in front of the companies' intertwined logos, said winning over JAL was a sign the Japanese market, like the rest of the world, was opening to competition.
It was important, he said, for the plane maker to make its pitch in Japan, rather than from Airbus's base in Toulouse, France. "If you believe that from Toulouse, you can convince people here who have flown the competitor for 30, 40 years that you have the best product, then you are just damn wrong," Mr. Brégier said. "The problem wasn't Japan or Japanese customers. The problem was probably Airbus."
Boeing's viselike grip over Japan's aeronautics industry can be traced to Japan's attempts to rebuild after World War II with American support. The rapid recovery of companies like Mitsubishi Heavy Industries Ltd. and the predecessor of Kawasaki Heavy Industries Ltd. got a boost from license agreements to make parts for Boeing.
Boeing's first sale of commercial aircraft to JAL and its chief domestic rival, All Nippon Airways, was in 1964, the year Tokyo hosted the Olympic Games. The first of the 129-person Boeing jets inspired pop songs as well as races between aircraft and bullet trains, and remain associated with Japan's rapid postwar growth.
JAL's 1966 order for Boeing 747 jumbo jets—the second placed by any airline—cemented the JAL-Boeing relationship. In the years that followed, JAL took delivery of more than 100 747s, adopting the 747-400 as the airline's signature plane.
The aircraft were retired in 2011 after JAL filed for protection from creditors.
n the 1970s and '80s, Japan became the world's best market for Boeing outside the U.S., as Japan's trade and finance ministries urged airlines to buy more U.S. planes, partly, industry insiders said, to help offset a huge U.S. trade deficit. National carrier JAL—the government didn't sell its full stake until 1987—was particularly susceptible to bureaucratic influence, they said.
Boeing, in turn, gave Japanese manufacturers increasingly large parts of its planes to build, giving policy makers in Tokyo further incentive to protect the aircraft maker's lock on the market. Japan's aerospace industry "built a part of every single one of Boeing's commercial airplanes," Nicole Piasecki , a former president of Boeing Japan, said in a 2009 speech.
The mutually dependent relationship—cemented with subsidies and other support from the Japanese government—looked impossible to breach by outsiders.
Glen S. Fukushima , the president of Airbus Japan from 2005 until last year, recalled attending a meeting of the Association of Asia Pacific Airlines shortly after he joined Airbus and noting that the company supplied 16 of the 17 members. JAL was the only one that had never bought an Airbus plane. "That's how close JAL and Boeing have been," Mr. Fukushima said. "It was considered revolutionary for JAL to say it was even considering Airbus."
But Boeing's hold eventually began to loosen amid airline deregulation and other shifting economic forces. Airbus retained suppliers in Japan, denting Boeing's political advantage as a job generator. About 20% of the A350 is made from components produced by Japanese suppliers such as Ishikawajima-Harima Heavy Industries Co. and Mitsubishi Heavy, according to Airbus. And Japan is trying to develop its own fuel-efficient regional passenger jet, making Boeing as much a rival as a partner.
And JAL, with the government no longer at the helm, has become more cost-conscious since it emerged from bankruptcy protection last year with an initial public offering that was heavily promoted to foreign investors.
Indeed, the carrier is in open warfare with the government, last week accusing Japanese officials of unfairly denying JAL coveted slots that were assigned at Tokyo's Haneda airport.
"What surprises me is not that they've ordered the A350, it's that Boeing was able to hold on to its monopoly for so long," said Henri Courpron , chief executive of aircraft-leasing company International Lease Finance Corp. "I think the Japanese airline industry will benefit over the long term."
Playing Airbus and Boeing against each other should improve the terms that JAL, rival ANA Holdings Inc. and perhaps others Japanese airlines will be able to negotiate, said Mr. Courpron, a former Airbus salesman.
Boeing further hurt itself in Japan with long delays for its new flagship, the 787 Dreamliner, followed by groundings after batteries burned on JAL and ANA planes this year.
In a sign of Boeing's diminishing clout in Japan, Mr. Ueki, the JAL president, said Monday that he didn't take into account the U.S. company's history or supplier relationships in Japan and that the company had no need to consult with Tokyo before selecting Airbus. "JAL was the only factor," he said.
—Daniel Michaels and Jon Ostrower contributed to this article.
Source: http://online.wsj.com
Monday, October 07, 2013
Airbus Lands Japan Airlines Jet Order: Deal Valued at $9.75 Billion Upsets Boeing's Long-Held Exclusivity
Updated October 7, 2013, 12:20 p.m. ET
By DANIEL MICHAELS, JON OSTROWER and DAISUKE WAKABAYASHI
The Wall Street Journal
Airbus scored a landmark $9.75 billion order from Japan Airlines Co., breaking into territory long held exclusively by Boeing Co.
JAL ordered 31 A350 jetliners carrying a catalog price of ¥950 billion, with an option to buy 25 more of the long-distance planes, the companies said Monday. Deliveries will start in 2019 and roll out over six years.
The win for Airbus was the clearest example of the long-term effect on Boeing's relationship with stalwart customers after more than three years of delays for its flagship, the 787 Dreamliner, for which JAL was the second customer. The tension came to a head during the grounding of the jet earlier this year, with JAL executives questioning the exclusivity that had marked the airline's relationship with the U.S.-based plane maker.
European Aeronautic Defence & Space Co.'s Airbus unit has courted JAL and its Japanese rival ANA Holdings Inc. for decades, succeeding only in placing a handful of short-distance A320 jets with the latter.
JAL President Yoshiharu Ueki said the Dreamliner problems played no role in his company's decision to go with Airbus. Dreamliners were grounded for several months after lithium-ion batteries burned on two planes, one each operated by JAL and ANA.
Mr. Ueki said the A350 met JAL's criteria for a safe, high-quality aircraft, with the financial support of the manufacturer and a rollout timetable that matched the carrier's replacement cycle. JAL ordered 18 of the A350-900 model, which has a capacity of 314 passengers. The airline ordered 13 of the A350-1000, which holds 350 passengers.
"It was the best match for us," Mr. Ueki said at a Tokyo news conference.
Airbus Chief Executive Fabrice Brégier said he participated in the negotiations with JAL personally and wanted to assure the airline that its confidence in Airbus wouldn't be misplaced. The order was the largest-ever for Airbus in Japan.
"We are opening a new chapter in our relationship," said Mr. Brégier, sitting next to Mr. Ueki and two mocked-up A350s bearing the JAL logo.
EADS shares rose 2.2% in Paris, and those of Boeing were down 0.7% Monday afternoon in New York.
The lost order for Boeing comes as the manufacturer struggles to keep up globally with its European rival. Airbus garnered 1,062 net orders to Boeing's 890 for the year through September. Boeing regained the top spot from Airbus last year, holding more orders and deliveries for the first time in more than a decade.
The news could get worse for Boeing in Japan if ANA also shifts course with its next plane purchase. The parent of All Nippon Airways by April is expected to decide how it plans to replace its fleet of Boeing 777s, which are scheduled to start retiring in 2020. The airline has said it is considering the Airbus A350 as well as an upgraded version of the Boeing 777, tentatively called the 777X.
ANA is one of Boeing's most-loyal customers and was the first global carrier to order the 787 Dreamliner. The airline operates the largest Dreamliner fleet, and its executives expressed frustration about having to ground the planes this year because of the battery problems. ANA operates 17 Airbus A320s for short-distance flights.
"If other Japanese airlines are interested in our products, we will treat them equally well," Airbus's Mr. Brégier said.
Boeing may have to pay a price to hold on to long-standing customers.
"This would increase pressure still further on Boeing to lower prices on its planes," said Hideo Inagaki, a former JAL aircraft-maintenance specialist who is a principal analyst at consultant Japan Aviation Management Research. JAL has threatened to buy from Airbus before in price negotiations with Boeing, he said, and the order announced Monday would be the first time the airline followed through on the threat.
"The timing is interesting," Mr. Inagaki said. "Japanese airlines need to consider some major aircraft purchases to revamp their fleets with more fuel-efficient planes if they are to be competitive."
Boeing's partnership with Japan has stretched a half-century, dating to Japan's postwar reconstruction and involving almost every model of jetliner from the U.S. manufacturer since the early days of the jet age. Urged on by Japan's trade and finance ministries, the country's airlines in the 1970s and '80s became big buyers of U.S. planes, partly as a way to offset Japan's trade surplus with its closest and most powerful ally.
Boeing has steadily expanded its industrial relationship with Japan, working with the country's heavy industry on the manufacturer's last three all-new long-distance jets. Japan's industrial contribution makes up 35% of the 787 Dreamliner's value, including the jet's wings and several body sections.
"The world is changing. There is open competition everywhere," Mr. Brégier said. "This is the natural trend everywhere, and airlines have to select the best product everywhere."
More than 70% of JAL's fleet is made by Boeing, with the exceptions being smaller aircraft, largely for regional flights. The airline is one of the last global carriers, along with ANA, to have such a heavy dependence on one plane manufacturer. Airbus accounts for about 7% of ANA's current fleet. Both airlines face increased pressure from lenders to reassess the risks of relying on a single plane supplier.
JAL's order with Airbus came three years after the former flagship carrier filed for bankruptcy protection. JAL turned around its operation and now has one of the highest profit margins in the industry.
In recent years, Airbus has started to show signs of breaking through in the Japanese market. Airbus won a string of small deals with fast-growing upstart airlines, including budget carriers established by ANA.
Airbus earlier this year said 44 of its planes fly in Japan. And more are entering the market, including the double-decker Airbus A380 superjumbos, which low-cost carrier Skymark Airlines Inc. expects to start flying next year.
—Mayumi Negishi contributed to this article.
http://online.wsj.com
By DANIEL MICHAELS, JON OSTROWER and DAISUKE WAKABAYASHI
The Wall Street Journal
Airbus scored a landmark $9.75 billion order from Japan Airlines Co., breaking into territory long held exclusively by Boeing Co.
JAL ordered 31 A350 jetliners carrying a catalog price of ¥950 billion, with an option to buy 25 more of the long-distance planes, the companies said Monday. Deliveries will start in 2019 and roll out over six years.
The win for Airbus was the clearest example of the long-term effect on Boeing's relationship with stalwart customers after more than three years of delays for its flagship, the 787 Dreamliner, for which JAL was the second customer. The tension came to a head during the grounding of the jet earlier this year, with JAL executives questioning the exclusivity that had marked the airline's relationship with the U.S.-based plane maker.
European Aeronautic Defence & Space Co.'s Airbus unit has courted JAL and its Japanese rival ANA Holdings Inc. for decades, succeeding only in placing a handful of short-distance A320 jets with the latter.
JAL President Yoshiharu Ueki said the Dreamliner problems played no role in his company's decision to go with Airbus. Dreamliners were grounded for several months after lithium-ion batteries burned on two planes, one each operated by JAL and ANA.
Mr. Ueki said the A350 met JAL's criteria for a safe, high-quality aircraft, with the financial support of the manufacturer and a rollout timetable that matched the carrier's replacement cycle. JAL ordered 18 of the A350-900 model, which has a capacity of 314 passengers. The airline ordered 13 of the A350-1000, which holds 350 passengers.
"It was the best match for us," Mr. Ueki said at a Tokyo news conference.
Airbus Chief Executive Fabrice Brégier said he participated in the negotiations with JAL personally and wanted to assure the airline that its confidence in Airbus wouldn't be misplaced. The order was the largest-ever for Airbus in Japan.
"We are opening a new chapter in our relationship," said Mr. Brégier, sitting next to Mr. Ueki and two mocked-up A350s bearing the JAL logo.
EADS shares rose 2.2% in Paris, and those of Boeing were down 0.7% Monday afternoon in New York.
The lost order for Boeing comes as the manufacturer struggles to keep up globally with its European rival. Airbus garnered 1,062 net orders to Boeing's 890 for the year through September. Boeing regained the top spot from Airbus last year, holding more orders and deliveries for the first time in more than a decade.
The news could get worse for Boeing in Japan if ANA also shifts course with its next plane purchase. The parent of All Nippon Airways by April is expected to decide how it plans to replace its fleet of Boeing 777s, which are scheduled to start retiring in 2020. The airline has said it is considering the Airbus A350 as well as an upgraded version of the Boeing 777, tentatively called the 777X.
ANA is one of Boeing's most-loyal customers and was the first global carrier to order the 787 Dreamliner. The airline operates the largest Dreamliner fleet, and its executives expressed frustration about having to ground the planes this year because of the battery problems. ANA operates 17 Airbus A320s for short-distance flights.
"If other Japanese airlines are interested in our products, we will treat them equally well," Airbus's Mr. Brégier said.
Boeing may have to pay a price to hold on to long-standing customers.
"This would increase pressure still further on Boeing to lower prices on its planes," said Hideo Inagaki, a former JAL aircraft-maintenance specialist who is a principal analyst at consultant Japan Aviation Management Research. JAL has threatened to buy from Airbus before in price negotiations with Boeing, he said, and the order announced Monday would be the first time the airline followed through on the threat.
"The timing is interesting," Mr. Inagaki said. "Japanese airlines need to consider some major aircraft purchases to revamp their fleets with more fuel-efficient planes if they are to be competitive."
Boeing's partnership with Japan has stretched a half-century, dating to Japan's postwar reconstruction and involving almost every model of jetliner from the U.S. manufacturer since the early days of the jet age. Urged on by Japan's trade and finance ministries, the country's airlines in the 1970s and '80s became big buyers of U.S. planes, partly as a way to offset Japan's trade surplus with its closest and most powerful ally.
Boeing has steadily expanded its industrial relationship with Japan, working with the country's heavy industry on the manufacturer's last three all-new long-distance jets. Japan's industrial contribution makes up 35% of the 787 Dreamliner's value, including the jet's wings and several body sections.
"The world is changing. There is open competition everywhere," Mr. Brégier said. "This is the natural trend everywhere, and airlines have to select the best product everywhere."
More than 70% of JAL's fleet is made by Boeing, with the exceptions being smaller aircraft, largely for regional flights. The airline is one of the last global carriers, along with ANA, to have such a heavy dependence on one plane manufacturer. Airbus accounts for about 7% of ANA's current fleet. Both airlines face increased pressure from lenders to reassess the risks of relying on a single plane supplier.
JAL's order with Airbus came three years after the former flagship carrier filed for bankruptcy protection. JAL turned around its operation and now has one of the highest profit margins in the industry.
In recent years, Airbus has started to show signs of breaking through in the Japanese market. Airbus won a string of small deals with fast-growing upstart airlines, including budget carriers established by ANA.
Airbus earlier this year said 44 of its planes fly in Japan. And more are entering the market, including the double-decker Airbus A380 superjumbos, which low-cost carrier Skymark Airlines Inc. expects to start flying next year.
—Mayumi Negishi contributed to this article.
http://online.wsj.com
Thursday, September 26, 2013
Lion Air Considers Buying Bombardier Jets: Canadian Plane Maker Tries to Improve Backlog of CSeries Orders
September 26, 2013, 5:43 p.m. ET
By JON OSTROWER
The Wall Street Journal
Bombardier Inc. said Thursday it is in talks with Lion Air of Indonesia about a potential sale of the Canadian company's CSeries jetliners to the budget carrier, a deal that would bolster the plane maker's efforts to secure new customers.
Bombardier has struggled to build a significant backlog of orders for its new 100- to 160-seat CSeries jets amid fierce competition from established competitors Boeing Co. and Airbus.
Lion Air Chief Executive Rusdi Kirana said in Montreal on Thursday that he was impressed by Bombardier's CSeries. Mr. Kirana said he met Wednesday with Mike Arcamone, president of Bombardier Commercial Aircraft, and toured a CSeries jet. A spokesman for Bombardier confirmed that the meeting took place.
Bombardier declined to comment on when any deal might be completed, but a spokesman for the Canadian company said it was "pleased" with Mr. Kirana's "positive comments" about the aircraft, which made its first flight on Sept. 16.
Mr. Kirana was reported to have said he wants to complete a deal with Bombardier in time for the 2014 Farnborough air show outside of London.
Bombardier current backlog for the CSeries stands at 177 firm orders. List prices for the CSeries are $63 million for smaller versions and $72 million for larger models, before discounts, compared with about $70 million to $92 million for similar models from Boeing and Airbus.
Lion Air purchased 230 Boeing planes in 2012 and 234 Airbus aircraft earlier this year to support its growth plans for Southeast Asia. Airbus is a unit of European Aeronautic Defence & Space Co.
Source: http://online.wsj.com
By JON OSTROWER
The Wall Street Journal
Bombardier Inc. said Thursday it is in talks with Lion Air of Indonesia about a potential sale of the Canadian company's CSeries jetliners to the budget carrier, a deal that would bolster the plane maker's efforts to secure new customers.
Bombardier has struggled to build a significant backlog of orders for its new 100- to 160-seat CSeries jets amid fierce competition from established competitors Boeing Co. and Airbus.
Lion Air Chief Executive Rusdi Kirana said in Montreal on Thursday that he was impressed by Bombardier's CSeries. Mr. Kirana said he met Wednesday with Mike Arcamone, president of Bombardier Commercial Aircraft, and toured a CSeries jet. A spokesman for Bombardier confirmed that the meeting took place.
Bombardier declined to comment on when any deal might be completed, but a spokesman for the Canadian company said it was "pleased" with Mr. Kirana's "positive comments" about the aircraft, which made its first flight on Sept. 16.
Mr. Kirana was reported to have said he wants to complete a deal with Bombardier in time for the 2014 Farnborough air show outside of London.
Bombardier current backlog for the CSeries stands at 177 firm orders. List prices for the CSeries are $63 million for smaller versions and $72 million for larger models, before discounts, compared with about $70 million to $92 million for similar models from Boeing and Airbus.
Lion Air purchased 230 Boeing planes in 2012 and 234 Airbus aircraft earlier this year to support its growth plans for Southeast Asia. Airbus is a unit of European Aeronautic Defence & Space Co.
Source: http://online.wsj.com
Thursday, September 19, 2013
After THAI incident, Suvarnabhumi Airport to get new runway
Heavy traffic at Suvarnabhumi Airport and Sunday’s incident with a disabled Thai Airways International aircraft which closed a runway for three days compels the Airports of Thailand (AoT) to build a new runway as soon as possible.
Transport Minister Chadchart Sittipunt insisted that Suvarnabhumi Airport needs a third runway to ease traffic congestion and to be prepared for emergencies.
THAI flight TG679 from Guangzhou skidded off Suvarnabhumi Airport’s eastern runway Sunday night, forcing its closure until Wednesday night, causing delays to hundreds of flights.
Chadchart said the new runway would not be longer than 3,000 meters following AoT’s recommendation that an environmental impact assessment (EIA) would be compulsory if it is longer than 3,000 meters.
However, AoT should conduct an EIA in conjunction with the construction, bearing in mind the possible impacts on people, he said.
Sita Divari, AoT board chairman, said AoT would strictly follow the Transport Ministry policy and would conduct an EIA during the construction.
He said the third runway would be reserved for emergency use.
AoT directors discussed the matter Tuesday together with building a new runway for Phuket Airport, he said.
Marisa Pongpattanapun, chairwoman of the Airline Operators Committee (AOC), said the third runway is necessary to prevent landing and takeoff delays as much as possible.
The transport minister has appointed a fact-finding committee to investigate the THAI’s Airbus A330-300 incident. It took 65 hours for the aircraft to be moved from the runway to a hangar.
The committee was instructed to submit its report within two weeks in order to find measures to effectively handle such an incident at all airports in the future.
The committee must find out whether passengers were transferred from the aircraft in accord with required procedures, whether the media crisis management including covering the THAI logo after the accident was appropriate, and whether the post-accident aviation management was correctly done.
Original article: http://www.pattayamail.com
Thai Airways Airbus A330-300, HS-TEF, Flight TG-679, Accident occurred September 08, 2013
Transport Minister Chadchart Sittipunt insisted that Suvarnabhumi Airport needs a third runway to ease traffic congestion and to be prepared for emergencies.
THAI flight TG679 from Guangzhou skidded off Suvarnabhumi Airport’s eastern runway Sunday night, forcing its closure until Wednesday night, causing delays to hundreds of flights.
Chadchart said the new runway would not be longer than 3,000 meters following AoT’s recommendation that an environmental impact assessment (EIA) would be compulsory if it is longer than 3,000 meters.
However, AoT should conduct an EIA in conjunction with the construction, bearing in mind the possible impacts on people, he said.
Sita Divari, AoT board chairman, said AoT would strictly follow the Transport Ministry policy and would conduct an EIA during the construction.
He said the third runway would be reserved for emergency use.
AoT directors discussed the matter Tuesday together with building a new runway for Phuket Airport, he said.
Marisa Pongpattanapun, chairwoman of the Airline Operators Committee (AOC), said the third runway is necessary to prevent landing and takeoff delays as much as possible.
The transport minister has appointed a fact-finding committee to investigate the THAI’s Airbus A330-300 incident. It took 65 hours for the aircraft to be moved from the runway to a hangar.
The committee was instructed to submit its report within two weeks in order to find measures to effectively handle such an incident at all airports in the future.
The committee must find out whether passengers were transferred from the aircraft in accord with required procedures, whether the media crisis management including covering the THAI logo after the accident was appropriate, and whether the post-accident aviation management was correctly done.
Original article: http://www.pattayamail.com
Thai Airways Airbus A330-300, HS-TEF, Flight TG-679, Accident occurred September 08, 2013
Monday, September 16, 2013
New Bombardier Jet Takes Flight: Canadian Aircraft Maker Seeks to Make Inroads Against Boeing and Airbus
Updated September 16, 2013, 7:26 p.m. ET
By JON OSTROWER
The Wall Street Journal
MIRABEL, Québec—Bombardier Inc.'s new CSeries jet made its maiden flight here Monday, a major milestone in the Canadian company's bid to take on giants Boeing Co. and Airbus in the market for small passenger jets.
The 120-passenger jetliner landed safely about 2½ hours after taking off under clear skies from Bombardier's factory here north of Montreal in front of thousands of employees, customers, and others who had gathered to watch.
The single-aisle CSeries makes Bombardier the first new entrant in the market for the smallest category of mainline passenger jets since 1987, when Airbus, now a unit of European Aeronautic Defence & Space Co., first flew its A320. Airbus and Boeing have been the only Western producers of larger commercial jets in the market since 1997, when Boeing merged with McDonnell Douglas.
The CSeries could be the last all-new aircraft from a Western manufacturer to enter the market for some time.
Companies in Japan, China and Russia are all working on new jets. But while Airbus, Boeing and Embraer SA—a Brazilian manufacturer that like Bombardier has focused on smaller, regional jets—all plan major modifications to existing models, they aren't known to be working on all-new designs now, meaning they're unlikely to bring any new planes to market before the middle of the 2020s.
The CSeries version that flew Monday lists for $63 million, with a larger version at $72 million, before discounts, compared with about $70 million to $92 million for comparable models from Boeing and Airbus, which have offered aggressive discounts to keep Bombardier from gaining traction, according to industry officials.
Bombardier has also set aggressive performance targets for the CSeries, including what it claims is 20% better fuel efficiency than competing models, to woo cost-conscious airlines.
Monday's takeoff was nearly silent, highlighting another of Bombardier's selling points for the CSeries, which it says is engineered to be quiet so that it can be used at smaller, noise-restricted airports.
Customers have ordered 177 of the CSeries jets. But airline executives are still looking for more evidence that the jet will deliver the company's touted performance—and waiting to see how much Bombardier plans to discount the plane.
The maiden flight give Bombardier "another element for their sales team to go and sell it," said Nico Buchholz, executive vice president of Deutsche Lufthansa AG, which has an order for up to 60 CSeries for its Swiss International Air Lines unit. But whether it will sell well, he said, depends on how aggressively Bombardier will use discounts and other incentives.
Guy Hachey, chief executive of Bombardier's aerospace division, said the company hopes to collect data over the first 100 hours of flying the aircraft to feed to sales executives to validate its claims to customers. "We'll be able to back up all the performance guarantees we've been making all along," he said.
Mr. Hachey said Bombardier hopes the CSeries will help the company's aerospace division to increase its annual revenue by an estimated $5 billion to $8 billion—it was $8.6 billion in 2012—once it reaches production of 120 jets a year.
The CSeries program is running roughly nine months behind schedule—the first flight was originally scheduled for last December—but that pales in comparison with the delays and cost overruns suffered by Boeing and Airbus in developing their newest jets.
Bombardier expects the development to cost $3.9 billion, said Mike Arcamone, president of Bombardier Commercial Aircraft, a unit of the aerospace division. The company had previously estimated the cost at $3.4 billion. A spokesman attributed the difference to new financial reporting standards that took effect in 2011 that prompted Bombardier to factor in interest costs.
Bombardier has said it plans to deliver the first CSeries after it completes certification by regulators, which itself could take a year following Monday's flight. Bombardier said it will evaluate the timing of the planned first delivery in coming weeks as the CSeries progresses in flight testing.
It has declined to identify who its first customer for the jet will be, but one person familiar with the company's plans says that Malmö Aviation of Sweden, a unit of Braathens Aviation Group, will take the first jet.
Source: http://online.wsj.com
Photo Gallery: http://www.usatoday.com
By JON OSTROWER
The Wall Street Journal
MIRABEL, Québec—Bombardier Inc.'s new CSeries jet made its maiden flight here Monday, a major milestone in the Canadian company's bid to take on giants Boeing Co. and Airbus in the market for small passenger jets.
The 120-passenger jetliner landed safely about 2½ hours after taking off under clear skies from Bombardier's factory here north of Montreal in front of thousands of employees, customers, and others who had gathered to watch.
The single-aisle CSeries makes Bombardier the first new entrant in the market for the smallest category of mainline passenger jets since 1987, when Airbus, now a unit of European Aeronautic Defence & Space Co., first flew its A320. Airbus and Boeing have been the only Western producers of larger commercial jets in the market since 1997, when Boeing merged with McDonnell Douglas.
The CSeries could be the last all-new aircraft from a Western manufacturer to enter the market for some time.
Companies in Japan, China and Russia are all working on new jets. But while Airbus, Boeing and Embraer SA—a Brazilian manufacturer that like Bombardier has focused on smaller, regional jets—all plan major modifications to existing models, they aren't known to be working on all-new designs now, meaning they're unlikely to bring any new planes to market before the middle of the 2020s.
The CSeries version that flew Monday lists for $63 million, with a larger version at $72 million, before discounts, compared with about $70 million to $92 million for comparable models from Boeing and Airbus, which have offered aggressive discounts to keep Bombardier from gaining traction, according to industry officials.
Bombardier has also set aggressive performance targets for the CSeries, including what it claims is 20% better fuel efficiency than competing models, to woo cost-conscious airlines.
Monday's takeoff was nearly silent, highlighting another of Bombardier's selling points for the CSeries, which it says is engineered to be quiet so that it can be used at smaller, noise-restricted airports.
Customers have ordered 177 of the CSeries jets. But airline executives are still looking for more evidence that the jet will deliver the company's touted performance—and waiting to see how much Bombardier plans to discount the plane.
The maiden flight give Bombardier "another element for their sales team to go and sell it," said Nico Buchholz, executive vice president of Deutsche Lufthansa AG, which has an order for up to 60 CSeries for its Swiss International Air Lines unit. But whether it will sell well, he said, depends on how aggressively Bombardier will use discounts and other incentives.
Guy Hachey, chief executive of Bombardier's aerospace division, said the company hopes to collect data over the first 100 hours of flying the aircraft to feed to sales executives to validate its claims to customers. "We'll be able to back up all the performance guarantees we've been making all along," he said.
Mr. Hachey said Bombardier hopes the CSeries will help the company's aerospace division to increase its annual revenue by an estimated $5 billion to $8 billion—it was $8.6 billion in 2012—once it reaches production of 120 jets a year.
The CSeries program is running roughly nine months behind schedule—the first flight was originally scheduled for last December—but that pales in comparison with the delays and cost overruns suffered by Boeing and Airbus in developing their newest jets.
Bombardier expects the development to cost $3.9 billion, said Mike Arcamone, president of Bombardier Commercial Aircraft, a unit of the aerospace division. The company had previously estimated the cost at $3.4 billion. A spokesman attributed the difference to new financial reporting standards that took effect in 2011 that prompted Bombardier to factor in interest costs.
Bombardier has said it plans to deliver the first CSeries after it completes certification by regulators, which itself could take a year following Monday's flight. Bombardier said it will evaluate the timing of the planned first delivery in coming weeks as the CSeries progresses in flight testing.
It has declined to identify who its first customer for the jet will be, but one person familiar with the company's plans says that Malmö Aviation of Sweden, a unit of Braathens Aviation Group, will take the first jet.
Source: http://online.wsj.com
Photo Gallery: http://www.usatoday.com
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