Huge win for Airbus

[Thanas]

Link

AMERICA Airlines has made the world's largest aircraft order, with a plan to buy 460 planes from Boeing and Airbus and options to acquire 465 more.

The deal is worth $US40 billion ($37.18bn) at list prices, with options taking the total to $US81bn.

While the order will reinvigorate an ageing American Airlines fleet, it will also make a significant contribution to the UK.

Aerospace is one of Britain's few world-class manufacturing industries and its high-value exports are expected to play an important role in reviving the economy.

Airbus, a subsidiary of EADS, builds the wings for all its aircraft at factories at Filton, near Bristol, and Broughton, in North Wales.

American Airlines, which has a strategic alliance with British Airways, yesterday ordered 260 Airbus A320s, paying about $US23bn. It has options to buy a further 365 Airbus aircraft, worth $US33.6bn.

The wings are one of the most technically sophisticated parts of a plane and typically represent about one fifth of the total value. This implies that Britain's share of the Airbus orders could be worth up to $US11bn.

Other companies likely to benefit from the American Airlines order include Rolls-Royce, part of a consortium that will make some of the engines for its aircraft, and Messier-Dowty, which makes landing gear.

American's order will enable it to replace its domestic fleet with more fuel-efficient aircraft.

US carriers have some of the oldest fleets among the world's leading airlines because they have been too financially weak during the past decade to commit to large orders. The result has been that aircraft have been kept flying despite burning up to 25 per cent more fuel than the most modern jets.

Analysts have estimated that the average age of American's fleet is about 14.1 years, compared with 3.3 years for Ryanair.

Gerard Arpey, chief executive of American, said: "We expect to have the youngest and most fuel-efficient fleet among our peers in the US within five years. This new fleet will dramatically improve our fuel and operating costs, while enhancing our financial flexibility."

The deal is also an important milestone for Airbus because the European company has previously struggled to win big orders from America's largest carriers.

American's order is so large that it has chosen to split it between Boeing and Airbus, and has probably squeezed better prices from both manufacturers as a result.

It will buy 100 Boeing 737s and a further 100 of the next generation 737, which is expected to be developed later this decade. The carrier will buy 130 Airbus A320s and a further 130 A320neos, which will be introduced from 2015.

The A320neo (new engine option) has been a stunning success since it was launched last December. It was the star of the Paris Air Show last month and Airbus now has orders and commitments for more than 1250 of the aircraft - worth about $US115bn at list prices.

With oil prices remaining at more than $US100 a barrel, airlines are keen to buy aircraft that can cut their fuel bills. The A320neo is expected to reduce fuel consumption by 15 per cent, compared with the existing model.

Tom Enders, chief executive of Airbus, said: "The order by American represents a strong endorsement of our constantly improving single-aisle product line."

Why is this so important? Because American Airlines previously claimed it will stick with Boeing only orders up until 2018. Considering further orders from American companies are expected soon, this is great news for Airbus.

[Alyeska]

Competition is a good thing. And bullshit claims about Airbus being government funded, well so is Boeing. Its called Military Sales. Both make great airplanes and its good to see they are producing planes like what survived the Hudson river landing.

[Lonestar]

I usually fly American. I'm going to miss the "McDonnell Douglas" metal stamp by the dor of the MD-80 as I walk into the plane...

[Irbis]

The wings are one of the most technically sophisticated parts of a plane and typically represent about one fifth of the total value.

Is it? I was under impression that such a title would belong to avionics or engines, actually. I guess wings are very critical part, though we've sure come a long way from time when a handful of pipes covered with cloth sufficed.

Why is this so important? Because American Airlines previously claimed it will stick with Boeing only orders up until 2018. Considering further orders from American companies are expected soon, this is great news for Airbus.

Granted, though USA at least has semblance of competition in big aviation orders, really big win for Airbus would be winning anything in, say, Japan.

[Rabid]

Granted, though USA at least has semblance of competition in big aviation orders, really big win for Airbus would be winning anything in, say, Japan.

*cough*

Fact : they are at least in the process of selling 4 to 6 A380 to Skymark Airlines.

Question : What are the odds that Congress, or whatever body having the power to do so, come into play and decide that only Boeing or an american company has the right to sell planes to the companies in question, for whatever reasons ? I'm specifically thinking of some kind of repeat of what happened with the refuelling/tanker-planes that the USAF wanted to buy, some times ago.

[Irbis]

*cough*

Fact : they are at least in the process of selling 4 to 6 A380 to Skymark Airlines.

Ah. This is pretty unique plane, which might be reason it was bought, but still, good for Airbus. As far as I'm aware, Japanese airlines are pretty much 99% US made airplanes, with one exception that bought Airbuses, only to be bought by competing airline which promptly (at a loss, IIRC) replaced all of them with more US planes.

Question : What are the odds that Congress, or whatever body having the power to do so, come into play and decide that only Boeing or an american company has the right to sell planes to the companies in question, for whatever reasons ? I'm specifically thinking of some kind of repeat of what happened with the refuelling/tanker-planes that the USAF wanted to buy, some times ago.

Well, since it's not a state company, my guess would be the most successful way to attempt to block the sale would be public boycott made by people with teabagger/NIMBY mentality? "Made in USA" doesn't have magic it used to have, but now, in time of crisis, it might be easy for competition to incite public against "jobs stealing planes" or something like that. Maybe even pass a legislation that would allow the state to only buy passage on lines with all-American fleet, making AA rethink the idea, though this option is both very unlikely and probably illegal.

[ChaserGrey]

Question : What are the odds that Congress, or whatever body having the power to do so, come into play and decide that only Boeing or an american company has the right to sell planes to the companies in question, for whatever reasons ? I'm specifically thinking of some kind of repeat of what happened with the refuelling/tanker-planes that the USAF wanted to buy, some times ago.

As Irbis mentioned, this would be difficult if not impossible for Congress to do. The USAF tanker competition was completely different because it was the government buying those planes, so regardless of what the Air Force wanted Congress could (and did) ultimately veto the sale by refusing to appropriate money for the purchase. American Airlines, though, is a privately owned and managed company. Congress can no more tell it to buy Boeing than they could tell trucking companies they had to buy GM.

Well, since it's not a state company, my guess would be the most successful way to attempt to block the sale would be public boycott made by people with teabagger/NIMBY mentality? "Made in USA" doesn't have magic it used to have, but now, in time of crisis, it might be easy for competition to incite public against "jobs stealing planes" or something like that. Maybe even pass a legislation that would allow the state to only buy passage on lines with all-American fleet, making AA rethink the idea, though this option is both very unlikely and probably illegal.

Not least because it would pretty much limit govt. folks to flying on Southwest. I don't know of any other airline with an all-American made fleet. [For those of you not in the USA- Southwest is a regional airline over here that saves money on maintenance by operating only Boeing 737s. AFAIK they don't fly international at all, maybe to Canada and Mexico.] United, Continental, U.S. Air, and Delta all operate Airbus aircraft already.

I doubt we'll see any action from the government on this. Some wailing and gnashing of teeth from Boeing, but if they're smart they'll take this as a wake-up call. My guess is that they were jerking American Airlines around a bit and somebody high up in American got tired of it.

[Jon]

Any attempt to block a US airline buying 'non-US' aircraft would be pretty damn retarded. I guess you could always point those kind of idiots to this page;

http://www.airbus.com/company/americas/us/

For the production of its jetliners, Airbus buys more parts, components, tooling and other material from the United States than any other country. Workers in more than 40 states help build Airbus aircraft, supporting 180,000 high-quality manufacturing jobs across the U.S. This supplier network involves some of the most respected names in American aerospace, including Alcoa, Eaton, GE, Goodrich, Hamilton Sundstrand, Honeywell, Northrop Grumman, PPG, Pratt & Whitney, Rockwell Collins and Spirit Aerosystems.

[ComradeClaus]

Err, one thing I've always wondered about these multi-nation consortiums, is how are the planes designed? Is all the work for Airbus done in France? Or do British Engineres design the wings, the French the other parts & the Germans te Fuselage, or do they just put the pieces to gether like ikea furniture?

Also, is there ever a situation where one country is ahead of it's partners? Like if Britan built all it's Airbus wings before the fuselages were completed by the others, so they's have to sit around waiting? I cringe at the Idea that the company flies whole wings to a central factory inside a Belouga. Seems VERY inefficient to me (especially in wasting fuel). Why not simply ship all the smaller components from the suppliers to each member country & have them each build whole planes? And isn't it a bad thing for the Europeans to have a single monopoly designing aircraft? where is the competition? Like when Tornado was ordered, it had no competing designs, though it shared the concept of the preceding F-111. (being tactical strike fighter-bomber & interceptor) Competition drives down costs, monopolies raise costs.

Another example, when the Transall C.160 was designed, it had the Aeritalia G-222 & CASA (i forgot the exact designation) to compete with in Europe, now the A-400 has an empty field, if one doesn't include the US C-130J & C-17. And that program is in dire straights.

I apologise if my questions sound absurd, it's just that consortia are such an alien concept to me & nothing I've read about them seems logical.

[Thanas]

Any attempt to block a US airline buying 'non-US' aircraft would be pretty damn retarded. I guess you could always point those kind of idiots to this page;

http://www.airbus.com/company/americas/us/

For the production of its jetliners, Airbus buys more parts, components, tooling and other material from the United States than any other country. Workers in more than 40 states help build Airbus aircraft, supporting 180,000 high-quality manufacturing jobs across the U.S. This supplier network involves some of the most respected names in American aerospace, including Alcoa, Eaton, GE, Goodrich, Hamilton Sundstrand, Honeywell, Northrop Grumman, PPG, Pratt & Whitney, Rockwell Collins and Spirit Aerosystems.

That is a bit misleading though.

[Teebs]

Any attempt to block a US airline buying 'non-US' aircraft would be pretty damn retarded. I guess you could always point those kind of idiots to this page;

Probably more importantly, there are plenty of European airlines which buy lots of Boeing aircraft and the EU has shown a willingness to retaliate against the US for bad behaviour in relation to trade (such as when the US imposed steel tariffs in the early 2000s).

[MrDakka]

Err, one thing I've always wondered about these multi-nation consortiums, is how are the planes designed? Is all the work for Airbus done in France? Or do British Engineres design the wings, the French the other parts & the Germans te Fuselage, or do they just put the pieces to gether like ikea furniture?

Also, is there ever a situation where one country is ahead of it's partners? Like if Britan built all it's Airbus wings before the fuselages were completed by the others, so they's have to sit around waiting? I cringe at the Idea that the company flies whole wings to a central factory inside a Belouga. Seems VERY inefficient to me (especially in wasting fuel). Why not simply ship all the smaller components from the suppliers to each member country & have them each build whole planes? And isn't it a bad thing for the Europeans to have a single monopoly designing aircraft? where is the competition? Like when Tornado was ordered, it had no competing designs, though it shared the concept of the preceding F-111. (being tactical strike fighter-bomber & interceptor) Competition drives down costs, monopolies raise costs.

Another example, when the Transall C.160 was designed, it had the Aeritalia G-222 & CASA (i forgot the exact designation) to compete with in Europe, now the A-400 has an empty field, if one doesn't include the US C-130J & C-17. And that program is in dire straights.

I apologise if my questions sound absurd, it's just that consortia are such an alien concept to me & nothing I've read about them seems logical.

Hell, the entire aerospace industry is essentially a series of contracts and subcontracts, etc.

[Jon]

That is a bit misleading though.

Not really. Sure, the bulk of the work is completed in Europe but every single airplane Airbus builds requires materials and components supplied by companies in the States. As Teebs points out eitherway, it’s not like major European airlines, such as British Airways, Air France and Lufthansa, aren’t buying from Boeing. In fact, Boeing’s widebody market is almost exclusively supported by non-US airlines these days.

[Irbis]

Also, is there ever a situation where one country is ahead of it's partners? Like if Britan built all it's Airbus wings before the fuselages were completed by the others, so they's have to sit around waiting?

I imagine they make exact order needed, as storage is very expensive, probably triply so in aero industry, as you have to doublecheck each stored part if it's still good. Maybe a few extra pieces as spare parts. Generally, manufacturing of complex products today tries to adopt Just-In-Time philosophy, producing on time/demand, storing little.

Why not simply ship all the smaller components from the suppliers to each member country & have them each build whole planes?

Because you would need multiple factories/assembly plants instead of just one, multiple critical people, amount of shipping would rise, actually, and the process would become far more complicated, bleeding money at each step?

And isn't it a bad thing for the Europeans to have a single monopoly designing aircraft? where is the competition? Like when Tornado was ordered, it had no competing designs, though it shared the concept of the preceding F-111. (being tactical strike fighter-bomber & interceptor) Competition drives down costs, monopolies raise costs.

Welcome to 21st Century. Competition in high-tech as you know it is a thing of the past, today, it is good enough if you have just two competing companies (Airbus/Boeing, AMD/Intel, ATI/Nvidia, etc). Jobs could have made his first Mac in garagelike conditions, today, only truly big companies can shoulder the costs of R&D.

And, in theory, if you want competition in Europe, you can (theoretically) ask Russians.

Another example, when the Transall C.160 was designed, it had the Aeritalia G-222 & CASA (i forgot the exact designation) to compete with in Europe, now the A-400 has an empty field, if one doesn't include the US C-130J & C-17. And that program is in dire straights.

Well, A-400 almost got terminated because it was too expensive for Airbus. What you're proposing is two 50% smaller companies paying for two A-400 programs. How?

You can do it like USA does - pay two aircraft producers to produce prototypes, pick one (often, only on political motive), start producing, say, F-22.

EU will have that option when it (or its military) will become more integrated, especially enough for its members to not waste money on too much competition, such as keeping dozens of national rifle producers alive, driving the costs and decreasing interoperability enormously.

Probably more importantly, there are plenty of European airlines which buy lots of Boeing aircraft and the EU has shown a willingness to retaliate against the US for bad behaviour in relation to trade (such as when the US imposed steel tariffs in the early 2000s).

Well, except EU institutions have a lot less to say in EU than the Congress has in USA, and EU doesn't even have the option of appeal to patriotism, since very few people feel 'European'. USA buys almost virtually US-made weapons only, rare few exceptions being either badly needed, or forced to move production to USA, and I don't see Europe doing anything about it, hell, F-35 will soon proceed to bleed even more money out of EU.

Just how EU would do anything to Boeing sales in retaliation if such law was passed? Tax non-EU made planes, which will immediately meet with US retaliation in WTO?

[Fingolfin_Noldor]

If the Americans so much as go for the blanket "Buy American", the WTO will be the next stop.

[Rogue 9]

Question : What are the odds that Congress, or whatever body having the power to do so, come into play and decide that only Boeing or an american company has the right to sell planes to the companies in question, for whatever reasons ? I'm specifically thinking of some kind of repeat of what happened with the refuelling/tanker-planes that the USAF wanted to buy, some times ago.

Precisely zero. Congress does not have that power. They can impose a prohibitively high tariff on foreign aircraft, but they have no more power to tell American to cancel this particular transaction than they do to tell me not to buy any given imported good at a retailer. The tanker deal was the government buying planes, and Congress can say they won't pay for it, but given that they don't control AA's bank accounts, the situation is hardly analogous.

[ComradeClaus]

Also, is there ever a situation where one country is ahead of it's partners? Like if Britan built all it's Airbus wings before the fuselages were completed by the others, so they's have to sit around waiting?

I imagine they make exact order needed, as storage is very expensive, probably triply so in aero industry, as you have to doublecheck each stored part if it's still good. Maybe a few extra pieces as spare parts. Generally, manufacturing of complex products today tries to adopt Just-In-Time philosophy, producing on time/demand, storing little.

Why not simply ship all the smaller components from the suppliers to each member country & have them each build whole planes?

Because you would need multiple factories/assembly plants instead of just one, multiple critical people, amount of shipping would rise, actually, and the process would become far more complicated, bleeding money at each step?

Most aircraft parts are built in individual factories by individuial companies. Germany's branch of airbus for example, has many contractors build enough parts to build the whole plane in the Hamburg factory, which is large enough to allow a whole Airbus to be built, if so chosen, it's some stupid concept of 'partnership' that forces each country to build only a single section, then ship at great cost to final assembly in the parent companies' facility in France. It would be bad for french & British ego if more airlines were buying airbuses 'made in Germany', than from them. Like with almost every product built in Germany that competes with britain & France. Cars, food/beer, firearms, miniaerospace (gliders, ultralights), guns, tanks, howitzers, subs, small frigates (MEKO designs), almost the entire world buys German (except in culture, but that's due to lousy marketing). If Germany were allowed to design Major Aerospace independently, it'd easily surpass the rest of Europe. It earned it's position of #4 ranked economy for a good reason. Only (self-destructive) politics holds it back.

And isn't it a bad thing for the Europeans to have a single monopoly designing aircraft? where is the competition? Like when Tornado was ordered, it had no competing designs, though it shared the concept of the preceding F-111. (being tactical strike fighter-bomber & interceptor) Competition drives down costs, monopolies raise costs.

Welcome to 21st Century. Competition in high-tech as you know it is a thing of the past, today, it is good enough if you have just two competing companies (Airbus/Boeing, AMD/Intel, ATI/Nvidia, etc). Jobs could have made his first Mac in garagelike conditions, today, only truly big companies can shoulder the costs of R&D.

Yet Burt Rutan accomplished multiple suborbital flights w/ a single space craft, something Europe's ENTIRE unified Aerospace Industry couldn't accomplish. With nothing more than a tiny company, on a TINY budget that wouldn't even buy a single warplane today. This, crowning a decades-long career of setting world flight records, Voyager, & that one single-engined jet that flew steve fossett (god rest his soul) unrefueled around the world.

And, in theory, if you want competition in Europe, you can (theoretically) ask Russians.

Another example, when the Transall C.160 was designed, it had the Aeritalia G-222 & CASA (i forgot the exact designation) to compete with in Europe, now the A-400 has an empty field, if one doesn't include the US C-130J & C-17. And that program is in dire straits.

Well, A-400 almost got terminated because it was too expensive for Airbus. What you're proposing is two 50% smaller companies paying for two A-400 programs. How?

You can do it like USA does - pay two aircraft producers to produce prototypes, pick one (often, only on political motive), start producing, say, F-22.

Right, i was thinking more like how the Russians used to do it; have Design Bureaus design & build prototypes (funded by respective govts), then after the govt tests & selects a winner have the aircraft companies build them. The companies simply build while the seperate bureaus design (you could have one in Britain, France, DLR in Germany, etc) Same w/ the Engines.

EU will have that option when it (or its military) will become more integrated, especially enough for its members to not waste money on too much competition, such as keeping dozens of national rifle producers alive, driving the costs and decreasing interoperability enormously.

Or just let Germany design all the small arms & cannon & other weapons, since, judging by export sales, they seem by far the most popular in Europe (besides Oto-Melara in Italy, which has a naval cannon monopoly) & leave the culture (tv shows/ books/ movies) to the English & the cooking to the French & remainder of EU:angelic: besides, America has hundreds or rifle (gun) companies, ranging from tiny, home-grown shops (like Red Jacket) to giants like Smith & Wesson.

[Irbis]

Yet Burt Rutan accomplished multiple suborbital flights w/ a single space craft, something Europe's ENTIRE unified Aerospace Industry couldn't accomplish. With nothing more than a tiny company, on a TINY budget that wouldn't even buy a single warplane today. This, crowning a decades-long career of setting world flight records, Voyager, & that one single-engined jet that flew steve fossett (god rest his soul) unrefueled around the world.

Maybe because Europe actually wanted to make something useful, not a craft that had to be lifted to 15 km, from there jumped to 100 km with 180 kg of cargo maximum, stay there for minute, not even allowing placing such cargo on orbit, then glide down?

It was one trick plane built solely to claim a prize, and its competitors burned a lot of money on projects that went nowhere.

For comparison, Mig 25, 45 year old plane, can reach 37+ km under its own power, is actually faster than SSO, and could presumably reach 100 km border with help of some rocket auxillary engines mounted on pylons, with larger cargo at that, though what would be the point of all that I don't see.

Right, i was thinking more like how the Russians used to do it; have Design Bureaus design & build prototypes (funded by respective govts), then after the govt tests & selects a winner have the aircraft companies build them. The companies simply build while the seperate bureaus design (you could have one in Britain, France, DLR in Germany, etc) Same w/ the Engines.

Except the bureau has to be pretty much married to the company, because without it they won't know what the company can build. So, all that does is to make multiple design bureaus in one company, competing for talent, money and time, bureaus that are married to countries, too, making them political, and increasing leaks on top of all that. It can conceivably work, but most likely will make the product inferior in the end. Two bureaus is maximum if you wanted efficiency, IMHO.

Or just let Germany design all the small arms & cannon & other weapons, since, judging by export sales, they seem by far the most popular in Europe (besides Oto-Melara in Italy, which has a naval cannon monopoly) & leave the culture (tv shows/ books/ movies) to the English & the cooking to the French & remainder of EU

<shrug> some standardization is in order, I guess, the current situation shows what I'm talking about well - 20 different bureaus giving 20 inferior designs, out of which German (and on smaller scale, French/Belgian) ones are best because of efficiency of scale. Had 20 been replaced by 2-5, each could possibly make German-level (or better) projects.

besides, America has hundreds or rifle (gun) companies, ranging from tiny, home-grown shops (like Red Jacket) to giants like Smith & Wesson.

Except these aren't "national" producers, making them free game to politicians, but commercial companies inside one big market. Though, somehow they still lose to European products a lot

[Hawkwings]

I found this article a few weeks back, before the deal was announced. It mentions that American has preferred status as a Boeing customer, and gets the best deals on new airplanes. With this purchase of Airbus craft, they no longer have said preferred status. In addition, both United and Delta are planning to upgrade their fleets soon as well, and they are both larger airlines than American.

And here is the news that indicated Boeing is pursuing a re-engined 737, seemingly after indications from Southwest Airlines and Ryanair that the re-engine is the option they prefer. Well, they just want a better airplane sooner, rather than a super-airplane in the unforeseeable future. Since the 737 sits so low however, they're going to have to do some fancy trickery to get a more efficient high-bypass turbofan to fit under the wings with enough ground clearance.