Author: Jon Ostrower

McConnell Air Force Base – Wichita, Kansas – June 2008

Fall Begins
The surprisingly busy Summer has now come to a close with Labor Day here in the United States, and based on the week ahead, things are really picking up speed quickly. Starting tomorrow, I begin two months of on-the-road reporting starting with Wichita on Tuesday (see below) and at least 36,000 miles to fly before it’s all said and done.

British Airways E-170
Last week British Airways took delivery of its first Embraer E-170 (G-LCYD) aircraft, the second new type for BA along side its first Airbus A318 (G-EUNA). Each aircraft are certified for the steep 5.5 degree approach to London City airport where they will be frequent visitors for significantly different missions. The E-170 will fly on UK regional routes, while the A318 will cross the Atlantic to JFK with an all-business configuration.  The E-170’s UK arrival was postponed last week after an alleged bird strike following the climb out from Recife in Brazil. The aircraft has since returned to Sao Jose dos Campos for minor repairs. Embraer undertook steep approach trials at London City during the Summer with a specially painted E-190 aircraft.

COMAC & Asian Aerospace
On just about the other side of the planet from where I sit, a small and dedicated team of Flight journalist is covering Asian Aerospace 2009 in Hong Kong. (Make sure you check out Day One’s digital daily) While not the largest of shows, Asian Aerospace will certainly make headlines this year with the Commercial Aircraft Corporation of China (COMAC) unveiling preliminary details about its model C919 aircraft, the first major mid-market narrowbody to enter the fray since the A320.

Boeing Charleston De-certification Vote
On Thursday, Boeing Charleston
machinists and aerospace workers will vote to continue their
affiliation with the International Association of Machinists and
Aerospace Workers. The vote, which may not even take place this week
due to a complaint by the IAM, is being watched closely from all
corners of the country. It is widely believed that if Boeing Charleston
goes fully non-union, the South Carolina facility will garner a
significant leg-up over its Pacific Northwestern competition for the
second 787 assembly line. It’s more than a little bit worth noting that
one year ago last week both the IAM voted to strike, halting jetliner
production at Boeing for 57-days. What a difference a year makes.

Lufthansa A380
The first A380 for the fifth of sixteen customers has taken shape outside the aircraft’s final assembly line in Toulouse, France. The aircraft, which is bound for Lufthansa and will be delivered early early next year, has received its engines and is approaching its first flight. MSN038 (F-WWSH) will be flown to Hamburg for painting and cabin outfitting. As is the Airbus custom, European and Middle Eastern A380 customers receive their aircraft by way of the Hamburg Delivery Center. Lufthansa will be the second European operator of the type after Air France takes delivery of MSN033 later this year, and the German flag carrier is expected to configure its A380 fleet with around 550 seats, the largest operator to do so.

In addition, the first Wave 2 A380 – MSN026 – entered service with QANTAS yesterday, the first superjumbo to be outfitted with production standard wiring harnesses, and the fourth for the Australian airline. Previously A380s had been wired and re-wired by hand after it was found that CATIA V4 and V5 wiring definitions were incompatible, creating gaps in the extensive wiring throughout the A380. 

No more AA300s
Two weeks ago, and with little fanfare, American Airlines completed retirement of its Airbus A300 fleet. The last day of scheduled operations took place on August 24th with a flight Guatemala City to Miami, a flight to Port-au-Prince with another return to Miami, followed by its last revenue flight from Miami to JFK as Flight 1908 with Ship 070 (N90070). The retirement marks the end of the type’s usage in North America. Discussion of a new twin-aisle medium haul has been reignited in recent weeks with reports that both Boeing and Airbus are actively looking at a twin-aisle offering as part of its 737 and A320 replacement studies.

Top Aviation Tweeters
Shashank Nigam over at Simpliflying has put together a great list of aviation tweeters and it’s a must read. I was honored to be included on the list along side 10 other must-follow industry tweeters that include: Benet Wilson, Steve Frischling, Dan Webb, Ron Callari, Addison Schonland, Devesh Agarwal, Mary Kirby, Brett Snyder, Rob Mark and Scott McCartney. 

Flickr Cleanup
Some do Spring cleaning, others do Fall cleaning. That being said, I’ve more or less
cleaned up my Flickr account, which now contains more than 2,300
photographs. I added a handful of new ones last week, but the real
change is a more organized tagging that is much more easily searched.
For example, a query for Dreamlifter, British Airways or 737 yields a
much more polished result than before. Feel free to go exploring. May I
recommend a search through the 787 archives?

Why Wichita?
In February, I penned a business analysis on the rapidly changing fortunes of Wichita, Kansas, one of the United States’ biggest aerospace clusters. The city, which is home to Cessna, Hawker Beechcraft, Boeing, Bombardier (Learjet) and Spirit Aerosystems, has found itself at the center of a worldwide economic downturn and a political environment openly disdainful of its chief export, business aircraft. I’m in Wichita all week to expand on that original article for a feature for NBAA in October that will provide an up-close look at where things stand for the city and the prospects for the future.

The five year battle between Boeing and Airbus on claims the European-airframer received illegal subsidies for the development of its commercial portfolio has taken a significant turn with reports indicating that the World Trade Organization has ruled, at least in part, in favor of Boeing.

The preliminary ruling, which was handed down today, has been distributed confidentially to US and European trade officials.

Almost immediately, the rhetorical war of words erupted as initial reports in the Wall Street Journal citing multiple sources claiming that the initial ruling declared the repayable launch aid for development of the A380 represented an illegal subsidy by the governments of France, Germany, United Kingdom and Spain.

The United State Trade Representative says the 1000-plus page report is under review and its confidential contents are not being discussed.

Neither Boeing nor Airbus have issued official statements on the ruling or on any of the reports detailing the decision, with unnamed sources as the best place for information.

As a counter-point the report of the A380’s illegal subsidy, another report by Dow Jones Newswires and Financial Times suggests that 70% of the United States’ claims on Airbus subsidies have been dismissed, citing a European source in Brussels.

Adding that despite the finding of illegality, the ruling “also confirmed that repayable launch aid is a permissible way to partner with governments.”

Despite the lack of official confirmation of any of the details contained in the report, elected officials have not been deterred from weighing-in on the potential implications.

Congressman Norm Dicks (D-WA), whose home state hosts the majority Boeing’s commercial operations, has been a vociferous proponent for the company on Capital Hill, hailing the report and calling it “encouraging” while decrying the “the damage that has been done to America’s premier airline manufacturer which has suffered the loss of 20 percent of the market share -representing hundreds of billions of dollars in value and tens of thousands of jobs.”

Dicks urged the Pentagon, which is currently preparing for a re-bid of the US Air Force tanker contract, to take into account the WTO ruling in its decision-making.

“The U.S. government cannot reward illegal market actions that have harmed U.S. manufacturers and stolen U.S. aerospace jobs,” said Dicks. “The tanker contract must be awarded on the basis of a level playing field, and because of today’s ruling that means it must account for the direct and unlawful subsidies that have allowed Airbus to launch the A330 and other large civil aircraft without the risks that other manufacturers must assume.”

The reaction appears to solidify the assessment of aerospace analysts that the ruling, no matter the outcome, would only serve to further the rhetorical arguments and political maneuverings, rather than force real changes in how Boeing or Airbus deal with government money.

According to one source familiar with the WTO rules, any appeals filed by both sides to the preliminary ruling must be resolved within 90 days of being filed, meaning that a “final WTO ruling will be out by next spring.”

Still pending, however, is a counter suit by Airbus alleging that research and development funding through NASA has directly benefited Boeing’s ability to transfer the intellectual property towards developing commercial aircraft, such as the majority-composite 787 Dreamliner.

Yet the same source familiar with the WTO case also suggests that no matter the outcome of the European case against Boeing, “Europe will have to come into compliance with today’s ruling.” Adding that “If the EU prevails on any of the allegations it has made, that will not excuse the EU from complying with rulings that go against it in the US case.”

A seemingly relaxed Jim McNerney spent yesterday morning candidly discussing his Boeing’s future along side aerospace industry analyst Heidi Wood at Morgan Stanley’s Global Industrials Unplugged Conference.

As McNerney discussed his company’s recent experience with composite technology on the Boeing 787, he looked toward future applications of what he believes Boeing will learn from current struggles.

“For example,” he said of the 737 replacement. “If we decide to go with a composite fuselage based on our lead and being able to manage composites, and think we can get there first, we may decide to go first. Engine technology will probably be a push. So, that airframe may be the discriminator.”

Referencing the two years of delays endured by Boeing on the 787 McNerney says: “I like our chances there, in terms of coming up with a more innovative — Lord knows, we’ve learned the hard way on how to design and build composites.”

“Eventually, that’s going to pay off for us. And it’s really going to pay off when we do — re-do the 777 and when we take a look at the narrow-body. It’s the bleeding edge — eventually, the innovator’s advantage will come back to us. Right now it hurts like hell.”

McNerney presents a ‘when’, not an ‘if’ statement for Boeing to re-do the 777, potentially providing a glimpse at the airframer’s future planning. Boeing publicly introduced the idea of re-winging the 777 or developing the double stretch 787-10 at June’s Paris Air Show, as a competitor to the A350-900 and -1000.

Perhaps the company’s thinking has shifted as the 787-9 has slipped almost an additional year to late 2013? Does the 787-10 make sense against the current program schedule? 

A Boeing spokesman reiterated that no decision has been made regarding the 777 or the 787-10 and the company is waiting on the performance of the A350-1000 to firm up before making any final determinations on product strategy between 305 and 365 seats.

Boeing predicted in July that the details of the preliminary ruling on the WTO case would leak in the days just before Labor Day. Almost like clock work and right on schedule, the Wall Street Journal reports that the WTO will rule that Airbus received illegal subsidies for its aircraft development programs, setting up a potential challenge to state aid for the A350.

According to the WSJ:

Legal experts say the WTO’s preliminary decision, part of a process
that could drag on for years, could alter the framework for government
aid to airplane makers, which invest billions in developing new
jetliners. In addition, the decision could eventually crimp Airbus’s
ability to tap state funds, these people say.

Though the challenge to the A350 may be the important first test case for the ruling, the conseqences could reach far beyond the trans-Atlantic trade battle between Boeing and Airbus. The ruling may serve as preceedent for future aircraft development and could have an impact on the planning of nations like Brazil, Canada, China, Japan and India to develop commercial aircraft of their own. This ruling certainly has the potential to significantly alter the landscape for those wanting to get a piece of the commercial pie.

When General Electric and Boeing collaborated to develop the GEnx engine earlier in the decade, the two aerospace companies always envisioned that the engine would first hang, and fly, under the wing of a 787 Dreamliner.

Instead, the second GEnx variant, the -2B model which is rated at 66,500 lbs of thrust, was installed under the wing of the 747-8F late last week for the first time.

The -2B model has been in flight test since March 24th and has amassed more than 1,500 hours of ground tests and 100 hours of flight testing under the wing of GE’s 747-100 test bed.

The -2B differs from the -1B engine with the inclusion of a conventional bleed air system, whereas the 787’s systems are electrically driven.

As RC501, the first 747-8F, inches closer to flight test, Mohammad “Mo” Yahyavi, 747 vice president and general manager says that Boeing has identified 3,500 lbs or about 4/10 of 1% of the aircraft’s 975,000 lb MTOW that will be removed for weight savings, according to a report by Aviation International News.

“At this point we are working with our suppliers. For example, one of
our suppliers-[GE subsidiary] Middle River, which makes our thrust
reversers for us-is coming up with some really good ideas for weight
reduction and we are working with them to apply those.

One of
those ideas involved switching from a steel to an aluminum ring. Asked
about possible changes to materials used in other parts of the 747-8 to
lighten the structure, Yahyavi confirmed “there are a few of those
examples going on right now,” as program engineers prepare for
scheduled first flight of the freighter version during the fourth
quarter.

In addition to receiving its four GEnx-2B engines, Boeing has also installed one of the aircraft’s raked wingtip and will later install the second after leaving the factory to extend the 747 wingspan to 224 feet 7 inches, a growth of more than 13 feet over the -400 and -400F.

Program sources tell FlightBlogger that RC501 could leave the factory for the paint hangar as early as the middle of the month, but suggest that the date is fluid and could slip to later in September.

Boeing says first flight is targeted for the fourth quarter of the year, with early indications that the company has set its sights on mid-November for the maiden sortie.

Photo Credit Boeing

Boeing Commercial Airplanes (BCA) president and CEO Scott Carson has announced he will retire from Boeing at the close of 2009, but will be succeeded as head of Boeing’s commercial unit effective tomorrow by current Integrated Defense Systems (IDS) president and CEO Jim Albaugh.

Dennis
Muilenburg will succeed Albaugh as president and CEO of Boeing Integrated
Defense Systems.

The change in leadership comes just days after Boeing firmed up plans to fly its oft-delayed 787 Dreamliner by the close of 2009 after accumulating more than two years worth of delays.

UPDATE 5:45 PM: Flight’s story is now up. CEO Jim McNerney says the succession planning let Boeing to consider both internal and external candidates for the BCA CEO role. McNerney cited Albaugh’s experience being able to provide “technical oversight at BCA”, a reference to his background as an engineer. Carson’s background was rooted on the business operations side of Boeing, not its engineering side. McNerney says Albaugh has a “working knowledge” of the 787 program. He also added that Albaugh “is the best person in Boeing at this time” for his new role, an important caveat that does not discount the future leadership potential of executives Pat Shanahan and Ray Conner who were both believed to be front runners for the BCA chief position in the event Carson retired.

Additional updates and full internal statements of both Carson and Albaugh are available below the fold.

This Movie Monday just speaks for itself. Israeli F-15 pilot lands safely with one wing. As the old adage goes, “A good landing is the one you can walk away from.”

Special thanks to @erripman for the find.

Author Peter Cohan has spent the last several weeks writing about the 787 at his blog at Dailyfinance.com. Cohan, for the sake of background, is the author of You Can’t Order Change: Lessons from Jim McNerney’s Turnaround at Boeing. He is both a professor at Babson College in Boston and Management Consultant.

He caused quite a stir last week when he suggested (via sources) that the 787’s environmental control system and electrical system could force two more years of delays on the program. I chased his assertions with my sources and found little to support his claims. However, both systems have gone through significant development challenges and revisions, a fact publicly acknowledged in 2008 by then CEO of Hamilton Sundstrand David Hess.

Simply stated “We’re all late,” Hess said of the entire 787 supply base, including his company’s contribution.

His latest column, “Will Boeing’s 787 really fly this year?” Cohan attempts to ascertain whether or not the latest schedule is a “head fake” or legitimate path forward. Cohan continues to cite the sources who asserted that the issues with the electrical and environmental control systems would cripple the program, and have added that the flight test campaign would do so as well.

Cohan’s “sources familiar with the 787 program” appear to know not of what they speak:

But interviews with sources familiar with the 787 program are not
confident that Boeing really has the problem licked. They describe very
rigorous testing of five aircraft, with Federal Aviation Administration
(FAA) officials keeping close tabs. One source claims that the FAA
establishes the requirements for certification and suggests that Boeing
will have a tough time satisfying them.

“Sources familiar with the 787 program” who want to talk about flight testing and cannot tell you how many aircraft are in the certification campaign, invite significant skepticism regarding their insight and level of familiarity.

And that plan is very rigorous. As he told me, “The plan Boeing has
is to use multiple test platforms, I believe it is five airplanes for
flight test, and fly aircraft around the clock seven days a week. Yes,
they will have to fly the aircraft at all altitudes in all conditions
of flight, including such wonderful conditions such as icing, rain,
snow, ice, etc.”

And that’s not all. My source says that Boeing will “have to test
the aircraft under specific test parameters and conditions at a great
variety of altitudes within the design envelope. All the tests are
supervised by FAA personnel and there are FAA pilots assigned to the
test program. It’s not like the FDA or other government agencies that
allow companies to be ‘honest,’ the FAA guards their own hen house, and
they have very big teeth!”

But another source believes that Boeing will not even be bringing in
the FAA for 2009’s flight tests. He sees a sequence of tests in which
Boeing tries to get its test pilots comfortable with the aircraft
before bringing in the FAA.

The conditions that Mr. Cohan described are what is commonly known in many aviation circles as “flight test.”

I would also add that if his “sources” are familiar with 787, then I suggest they take the time to understand the context of what it takes to certify a commercial aircraft. Of course the FAA won’t be on any of those 2009 tests. The first two months of flight test will be spent getting the aircraft to the point of Type Inspection Authorization. The TIA will bring the aircraft into conformity in preparation for the FAA to begin the certification process. Before this point, the flight test fleet operates with a Part 91 Experimental Type Certificate. Early testing on the 787s will get pilots comfortable with the aircraft, its handling characteristics and make changes as needed. Boeing starts the flight tests for its own learning purposes before the FAA comes in and begins certification. There is simply no scandal here.

Now, let’s talk about the seven day a week claim. Yes, that is Boeing’s plan. However, “flying seven days a week” doesn’t mean a Southwest-style 20 minute turn around. The 24-hour clock is a methodological change in how Boeing does flight test and is very ambitious, but frequently misrepresented. Here’s an excerpt from the 787 feature I authored before the Paris Air Show:

BOEING CLOCKS IN FOR BUSY DAY
The underpinning of Boeing’s 787 testing is based on efficient use
of the 24h clock, ensuring that no part of the day is wasted. Three
shifts support the aircraft.

Boeing envisages a day beginning at 06:00 with the arrival of the test crew, followed by a pre-flight briefing 30min later.

At 07:00, each of the six flight-test aircraft will be released back
to the flight-test crew after undergoing maintenance or preparations
overnight, beginning the 8h testing block. By 08:00, the 90min
pre-flight briefings will be wrapping up and the aircraft will be in
the sky by 09:00 for a typical 5h testing block. By 14:00, the aircraft
will head back to base for a touchdown at 15:00, followed by 2h of
post-test debrief.

After touchdown, the aircraft will be handed over for 16h of
overnight maintenance and preparation by the second and third shifts,
culminating in the aircraft’s 07:00 release the following day, for the
process to begin again. Boeing then runs preliminary analyses of the data gathered during the day, running from 17:00 to 21:00.

Boeing’s Production Integration Center at the company’s Everett
facility will also support the Seattle flight-test centre during the
overnight schedule by co-ordinating maintenance routines overnight to
ensure the aircraft are flying again by the next morning, says Bob
Noble, vice-president of 787 supplier management.

1. First Flight
Boeing says that ZA001 will fly by the end of 2009, an assessment that confirms previous reporting. Sources continue to maintain that a late November or early December time frame is targeted for the maiden sortie. ZA001 is currently prepped for the side-of-body reinforcement inside Paint Hangar 45-04. Vice president for airplane programs, Pat Shanahan, says Dreamliner One is “functionally ready to fly on all accounts” separate from the wing fix. All gauntlets are completed on both ZA001 and ZA002.

2. Fix Installation
The installation of the fix for each airplane is expected to take three months for each of the first six flight test aircraft. That timing includes the required preparation ahead of the physical installation. Boeing says they have already completed preparation on ZY997 and ZA001 with installation to begin within a few weeks. The pacing is driven by the size constraints inside the wing and center wing boxes. ZA001 will not fly until the fix is installed, tested and validated on ZY997.

3. Flight Test
The flight test program has been extended from 8.5 months to as much as a year if required. Boeing says that they’ve added “several weeks” worth of margin, but they have from 4Q09 to 4Q10 to complete certification of the 787.

4. 787-9
With the six to nine month slide in first delivery, Boeing has pushed back first delivery of the 787-9 to the end of 2013. The aircraft is currently in a sizing phase before freezing of the external configuration. Air New Zealand is the launch customer for the type and was supposed to get its first in early 2013. In addition, according to an American Airlines spokesperson, the airlines was supposed to receive its first in fall 2013 and has not yet received any revised delivery guidance.

5. 2nd Final Assembly Line
Boeing acknowledged directly that the current infrastructure in Everett is capable of a maximum production rate of seven 787s per month. The company now says it will officially need a second line in order to meet the goal of producing 10 787s per month. Front runners for the line second appear to be Everett and Charleston, though Long Beach and San Antonio are believed to be in consideration as well. A decision will come by the close of the year.

6. Flight Test Fleet
ZA001, ZA002 and ZA003, fully up to FAA spec for certification, have been transferred from inventory (potential to be sold) to a research and development expense of $2.5 billion. There’s no word on where they aircraft will end up, however NA001 (1st 757) remains in Boeing’s control. ZA001 and ZA002 were originally set to be delivered to ANA and ZA003 to Northwest.

ZA004 to ZA006 will be delivered after significant, though not cost prohibitive, rework following flight test. They aren’t currently viable for airline customers but Boeing believes they will be operated by VIP customers eventually. ZA004 was destined for Northwest while the GEnx-powered ZA005 and ZA006 were to go to Royal Air Maroc.

7. The Tally
Today’s disclosure of the schedule brings the total program delay to 29-32 months after first delivery was originally planned in May 2008. Delivery of ZA100 to ANA will take place somewhere between October and December of 2010.

Boeing Announces New 787 Schedule and Third-Quarter Charge
CHICAGO, Aug. 27 /PRNewswire-FirstCall/ — The Boeing Company (NYSE: BA) today announced that the first flight of the 787 Dreamliner is expected by the end of 2009 and first delivery is expected to occur in the fourth quarter of 2010.

The new schedule reflects the previously announced need to reinforce an area within the side-of-body section of the aircraft, along with the addition of several weeks of schedule margin to reduce flight test and certification risk. The company projects achieving a production rate of 10 airplanes per month in late 2013.

“This new schedule provides us the time needed to complete the remaining work necessary to put the 787’s game-changing capability in the hands of our customers,” said Boeing Chairman, President and Chief Executive Officer Jim McNerney. “The design details and implementation plan are nearly complete, and the team is preparing airplanes for modification and testing.”

Based on the revised schedule and other assumption updates, the company has determined that the 787 program is not in a forward-loss position.

However, separate from the updated program profitability assessment, the company has concluded that the initial flight-test airplanes have no commercial market value beyond the development effort due to the inordinate amount of rework and unique and extensive modifications made to those aircraft. Therefore, costs previously recorded for the first three flight-test airplanes will be reclassified from program inventory to research and development expense, resulting in an estimated non-cash charge of $2.5 billion pre-tax, or $2.21 per share, against third-quarter results. This charge will have no impact on the company’s cash outlook going forward.

The 787 team working the side-of-body reinforcement has completed initial testing and is finalizing design details of new fittings that are expected to ensure full structural integrity of the joint. The static test procedure that uncovered the issue will be repeated and the results fully analyzed before first flight is conducted. Fatigue testing also will be performed on stringer components to validate the long-term durability of the modification.

The first 787 test airplane and static test unit have been prepared for the new fittings. Installation is expected to begin within the next few weeks.

—
This is a breaking story and will be updated.