Warbird Information Exchange

That's got to be one of the most ignorant statements I have ever heard during my 35 years in the aviation business.

Airbus Limits A350 Customization, Avoid A380 Pitfall

By Andrea Rothman

May 10 (Bloomberg) -- Airbus SAS is putting stricter controls on how airlines can custom-design the cabins of A350 widebody planes after a multitude of requests for different interiors for the A380 led to cost overruns and delays.

The planemaker, based in Toulouse, France, sees a much larger market for planes of the A350’s size than the A380 and aims to avoid delays, said Tom Williams, executive vice president of aircraft programs.

The A350, which will challenge Boeing Co.’s 777 and 787 models, is set for entry into service in 2013, with 530 orders from 33 customers. The A380 began service in late 2007, 2 1/2 years late and 50 percent over budget, having notched up development costs of 18 billion euros ($25 billion). Airbus has struggled to satisfy each airline’s different requests, spanning showers, cocktail bars and private suites in some cases.

“Where we got into trouble, and where we continue to get into trouble in the last couple of years, has been with customization,” Williams said today in a briefing at Airbus’s wing-building facility in Broughton, U.K. “If you look at what we’re doing with the A350, we have had a much more rigorous approach to A350 customization.”

Williams said airlines will be able to pick and choose the placement of seats, galleys, bathrooms or in-flight entertainment within the confines of a “background” template.

Singapore Airlines Ltd. and Gulf carrier Emirates are among those that have embraced cabin customization in order to make their A380s flagships.

A350 Range

Airbus, a unit of European Aeronautic, Defence & Space Co., has 27 A380s flying commercially today and has won a total of 202 orders. The company has forecast that aircraft operators may buy about 1,300 very large passenger planes over 20 years. That would include Boeing 747-8s. By contrast, it’s predicting sales of 5,000 aircraft with 250 to 300 seats over 20 years, a category that includes the A350.

The European company plans to debut the new range with an A350-900. That will be followed by the A350-800, planned for 2014. An even larger variant, the A350-1000, is scheduled to enter service in late 2015, Airbus said today.

Another lesson learned from past aircraft programs, including the A380, is that difficulties arise when customers buy seats, in-flight entertainment and other equipment for Airbus to install before delivery. Five aircraft were affected by a ruling last year from the European Aviation Safety Agency that withdrew approval for seats made by Yokohama, Japan-based Koito Industries Ltd. With the A350, Airbus will buy seats and in-flight entertainment systems directly.

Secure Supply Chain

The shift will allow the planemaker to “secure the supply chain,” Francois Caudron, an Airbus vice president, said today in a webcast. Airlines will still choose the supplier and negotiate the price, however.

Production of the A380 superjumbos is now “on the right track,” with a goal of 20 deliveries this year, double the pace of last year, Williams said. Design changes underway on the plane will add 100 nautical miles to its range, he said.

In a later presentation, Chief Operating Officer John Leahy told journalists that he expects to seal contracts for the sale of 10 A380s this year, and said he wouldn’t bet against the possibility of doubling that number, as he expects an economic rebound to attract new buyers.

New Engine Decision

Airbus is also still talking to engine makers Pratt & Whitney and CFM International, a joint venture of Safran SA and General Electric Co., about possible plans to put new engines on existing A320 planes, both Williams and Leahy said today.

Leahy said Airbus expects to make a decision in coming months on whether to go ahead and fit new engines onto old planes, and promised more information at the Farnborough Air Show set for mid-July. A final decision won’t come till later in the year.

Aircraft lessors are resistant toward seeing Airbus or Boeing fit new engines onto older models as that move could soften residual values for existing A320 and 737 planes, Leahy said. Airlines, however, are generally in favor, he said, as the increased fuel-efficiency from new engines would serve as a hedge against rising fuel prices.

Leahy predicted that if Airbus chose to put new engines on the A320 series, which began flying in the late 1980s, Boeing would make a similar move with its 737 series, which was largely redesigned in the mid-1990s. Media reports containing speculation about Boeing introducing an all-new plane to succeed the 737 as early as 2018, to get a jump on Airbus, should be taken with “a little grain of salt,” he said.

To contact the reporter on this story: Andrea Rothman in Toulouse, France at aerothman@bloomberg.net.

Last Updated: May 10, 2010 13:15 EDT

What is the link with the tanker bid ? except to one more time bashing Airbus ?

If Airbus is wrong with this decision, all the major will come to buy Boeing and you will happy.
What's next ?

US Congress deals blow to EADS over tankers
FT.com 05/28/2010
Author: Jeremy Lemer
© 2009 The Financial Times Limited. All rights reserved

The US House of Representatives on Thursday night adopted a measure to force the Pentagon to consider the role of illegal subsidies in the multibillion-dollar contest between Boeing and EADS to sell refuelling aircraft to the US Air Force.

The decision deals a potential blow to EADS, the European aerospace and defence conglomerate. A recent decision by the World Trade Organisation in a dispute over large aircraft found that the European company had received subsidies.

Under the congressional measure, the Pentagon may have to adjust EADS's bid to account for any funds it received in violation of trade treaties, which could give its rival Boeing an edge in the competition.

However, the measure must pass several other steps, including reconciliation with a companion defence bill in the Senate, before it becomes law.

The defence department has strenuously resisted efforts to insert international trade disputes into its procurement process, noting that under trade rules it was not allowed to penalise EADS for receiving alleged subsidies.

The amendment will further politicise an already fraught acquisition process that has dragged on for a decade, gone through three iterations and been marred by international political spats and serial accusations about US protectionism.

In 2008, EADS and Northrop Grumman, its US partner, won a competition to supply an initial 179 tankers but the Pentagon cancelled the contract after complaints by Boeing were upheld. The decision led to criticism from European politicians.

Then in March this year, EADS's partner Northrop Grumman withdrew from the contest after claiming that the rules were rigged in favour of Boeing. European politicians again criticised US authorities. The Pentagon eventually extended a key deadline allowing EADS to launch a solo bid.

The amendment was sponsored by a number of US congressmen from states where Boeing has a strong presence, including Kansas and Washington. It passed by 410-8 votes after EADS supporters secured last minute changes that would allow the Pentagon to consider a parallel case proceeding at the WTO in which the US and Boeing are accused of using illegal subsidies.

Jo Bonner, a Republican from Alabama where EADS plans to build a factory if it wins the contest, said that the amendment now applied in an "even-handed way to both competitors."

Todd Tiahrt, a Republican congressman from Kansas, said it was "outrageous to even consider outsourcing thousands of jobs to a foreign company" when the unemployment rate was close to 10 per cent.

"We need an American tanker built by an American company with American workers," said Mr Tiahrt.

Boeing said it was "entirely appropriate" that Congress take steps to "prevent the US defence industrial base from suffering the same fate as the commercial aircraft industry, where illegal subsidies have contributed to the loss of tens of thousands of US aerospace jobs."

EADS said it believed that the Pentagon "should be allowed to run the fair and open competition to which it is committed. We leave it to the department to comment on the extent to which this or any legislation impacts that objective."

Separately on Thursday night, another European defence contractor, Rolls Royce, received some mixed news from Congress.

Politicians voted to continue to fund a second engine for the F-35 fighter jet that is made by Rolls and General Electric. But the Senate armed services committee left the programme out of its version of the 2011 defence spending bill.

Robert Gates, US defence secretary, has repeatedly tried to cut the programme as part of an effort to restrain spending on weapons systems, only for Congress to include the funding in defence spending bills.

Update 2: US House votes pro-Boeing in tanker contest
Reuters News 05/28/2010
Author: Jim Wolf
© Reuters Limited 2010.

* Bill would force Pentagon to weigh illegal subsidies
* Marks Boeing victory in race with EADS for tanker deal
* Measure is adopted by lopsided 410 to 8 vote (adds Iran-related sanctions, procedural background)

WASHINGTON, May 27 (Reuters) - The U.S. House of Representatives approved a Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz)-backed bill that would force consideration of illegal subsidies in the multibillion-dollar race between Boeing and Europe's EADS (EAD.PA: Quote, Profile, Research, Stock Buzz) to sell refueling aircraft to the U.S. Air Force.

The lopsided 410 to 8 vote marked a victory for Chicago-based Boeing in its drive for a deal to build an initial 179 tanker aircraft potentially worth up to $50 billion.

Companion legislation must be passed by the Senate before it can be signed into law or vetoed by President Barack Obama.

Boeing and EADS, the corporate parent of Boeing's commercial archrival, Airbus, are locked in an increasingly bitter race over the U.S. Air Force deal.

Boeing earlier this week accused EADS of courting Iran and other countries at odds with the United States and said this should be taken into account in the tanker competition, too.

The measure passed by the House would require the Defense Department to consider any "unfair competitive advantage that an offeror may possess" in evaluating bids on major weapons systems.

The term "unfair competitive advantage" means a situation in which the cost of development, production, or manufacturing is not fully borne by the offeror for the contract, the amendment to a defense spending bill said.

A World Trade Organization (WTO) panel, in a final ruling in March, faulted billions of dollars of European subsidies to Airbus, including, according to U.S. lawmakers briefed on the matter, almost $5 billion used to develop the A330, EADS' tanker frame.

A WTO panel is expected to make an interim ruling by the end of next month on a European Union counter-complaint that Boeing has unfairly benefited from U.S. federal, state and local subsidies.

NINE-YEAR SAGA

It was not immediately clear how the legislation adopted late Thursday would apply to any WTO finding that Boeing also unfairly gained from subsidies. But any such final ruling may not come soon enough to figure in the tanker saga, which has dragged on for nearly nine years.

Bids are due July 9 and the Pentagon has told the bidders to be ready to start work by Nov. 12 if chosen for the deal.

This round of competition is the third time the Air Force has sought to start replacing its KC-135 tankers, which average about 50 years old.

The first, in 2004, would have been a lease-buy deal with Boeing, but it collapsed after two Boeing officials were convicted of conflict-of-interest violations, one of them the Air Force's former No. 2 arms buyer.

A team of EADS and Northrop Grumman Corp (NOC.N: Quote, Profile, Research, Stock Buzz) won a 179-plane deal in 2008, but Boeing successfully protested the award, leading to the current round.

Rep. Jay Inslee of Washington, one of the measure's sponsors, said Republicans and Democrats could be united in a "simple proposition" as lawmakers considered the measure.

"We will never allow foreign competitors to steal American jobs by using illegal subsidies, then reward them by allowing the use of those illegal subsidies to win a contract worth tens of billions of dollars," said Inslee, whose state is home to the Boeing production line for the 767 wide body that would be converted into a tanker.

The Defense Department has maintained that it is barred from unilateral retaliatory action for violations of international trade rules.

"That is the purview of the WTO," Geoff Morrell, Defense Secretary Robert Gates chief spokesman, said May 13. "If we were to do so, we would then be in violation of WTO rules and subject to disciplinary action."

Boeing cheered the vote, saying it was entirely appropriate for lawmakers to take steps to prevent the U.S. defense industrial base "from suffering the same fate as the commercial aircraft industry, where illegal subsidies have contributed to the loss of tens of thousands of U.S. aerospace jobs."

"We fully support the efforts of all members of Congress who share our concern about the unfair competitive advantage that EADS/Airbus, a foreign company, gained from decades of illegal launch aid subsidies worth billions of dollars," a Boeing statement said.

EADS North American arm, which would be the prime contractor for its Airbus-based tanker, said it believed the Defense Department should be allowed to run "the fair and open competition to which it is committed."

"We leave it to the Department to comment on the extent to which this or any legislation impacts that objective," James Darcy, a company spokesman, said by email.

The Defense Department did not immediately respond to a request for comment.

The Defense Authorization bill, as approved by the House, also included a provision that would bar Pentagon fuel purchases from companies that have been sanctioned for doing business with Iran's energy industry.

Todd Tiahrt, a Republican congressman from Kansas, said it was "outrageous to even consider outsourcing thousands of jobs to a foreign company" when the unemployment rate was close to 10 per cent.

"We need an American tanker built by an American company with American workers," said Mr Tiahrt.

I am only in my 20s but someday I will fly it at airshows. I am getting rich really fast writing software and so I can afford to do really stupid things like put all my money into warbirds.

I am only in my 20s but someday I will fly it at airshows. I am getting rich really fast writing software and so I can afford to do really stupid things like put all my money into warbirds.

Fairness, Not Protectionism
DoD Must Weigh Unfair Advantage in Tanker Bid
Defense News 06/21/2010
Author: U.S. Rep. Todd Tiahrt

The United States achieved a major milestone in the long-overdue competition to build America's next generation of aerial refueling tankers when the House passed the Fiscal Year 2011 National Defense Authorization Act. The House adopted the Inslee-Tiahrt amendment by an overwhelming vote of 410-8.

This provision, patterned after the Fair Defense Competition Act authored by Sen. Sam Brownback, R-Kan., and myself, forces the Department of Defense to consider any potentially unfair competitive advantage a competitor has in the KC-X acquisition process and apply it equally to both bidders. But despite this prudent defense acquisition change, many false charges have been leveled against this effort that was overwhelming supported.


After sitting idle for more than 25 years as U.S. companies were forced out of the commercial aircraft business and at least 65,000 American aerospace workers lost their jobs, the U.S. government at last took action.


In 2004, the United States filed a case with the World Trade Organization (WTO) against the European Union for providing billions of dollars in subsidies to aircraft manufacturer Airbus. The WTO ruled this past March that these subsidies were illegal and harmful to the United States.


Yet, the Pentagon has chosen to ignore the substantial unfair competitive advantage provided to EADS in the form of $5.7 billion in illegal "launch aid" subsidies. The Defense Department also has allowed EADS to submit a bid for the Air Force's new tanker contract based on subsidized planes from Airbus.


Competing Against Countries


Under these circumstances, Boeing, the only American company in the tanker competition, is not competing against just Airbus; it is competing against at least four European governments and treasuries.


Even with the faltering European economy, there is no way any company can compete against the full weight and force of multiple nations.


Appropriate Accounting


Some claim that accounting for these illegal subsidies is a violation of WTO guidelines. This is simply not true. This approach is consistent with all U.S. government obligations as a member of the WTO and does not violate the WTO Agreement on Government Procurement's (GPA) terms or spirit.


Certain military procurements, including fixed-wing aircraft, are exempt from the GPA. Even if the KC-X competition were covered under the GPA, accounting for unfair competitive advantages, including subsidies, would not constitute a violation. Rather, the GPA exists to prohibit discrimination between suppliers based on country of origin. This effort would account for any unfair competitive advantage regardless of whether the company is based in Europe, the United States or elsewhere.


Others contend that Article 23 of the WTO Subsidies and Countervailing Measures Agreement prevents DoD from accounting for unfair competitive advantages and subsidies. Article 23 does prevent countries that have initiated WTO proceedings from declaring a violation of WTO rules and engaging in self-help remedies before the WTO issues a ruling.


The approach taken in the Inslee-Tiahrt amendment, co-authored by Rep. Jay Inslee, D-Wash., however, does not address or redress the WTO process. It only ensures that DoD is conducting procurement competitions on fair and even terms. Our effort through the National Defense Authorization Act simply improves the fairness of the overall acquisition system, which is exempt from international trade laws.


Finally, the Department of Defense has argued that it cannot address the issue of unfair competitive advantages and subsidies until it knows the outcome of a separate WTO case brought by the European Union against the United States. Not only is there no legal reason for DoD to ignore the March WTO ruling, but it is also inappropriate for DoD to link these cases.


The WTO, in Article 3.10 of the Dispute Settlement Understanding, expressly forbids member nations from linking separate disputes. In other words, the Defense Department's rationale for setting aside a WTO ruling on subsidies is itself prohibited by the WTO.


For all of the above reasons, the procurement changes sought in the Inslee-Tiahrt amendment are vital in ensuring a fair competition for American workers. We want fairness, not protectionism. Our military men and women are in dire need of a modern, survivable tanker, and several attempts to secure a contract for the replacement of our Eisenhower-era tankers have failed.


We cannot afford anymore delays - we must get it right this time. The Inslee-Tiahrt amendment is a much-needed first step to ensure a level playing field for both companies.


--- Rep. Todd Tiahrt, R-Kan., is a senior member of the House Appropriations defense subcommittee. Boeing employs more than 2,500 workers in Kansas.