FlightBlogger Archive 2007-2012

Tag: FlightBlogger Archive

IAM contract gives 70-year old Renton factory new lease on life

With 74% of the International Association of Machinists and Aerospace Workers local 751 voting to approve a four-year contract extension, the longest running commercial aircraft production facility in the world will now be home to the 737 Max. (My Full Story)

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

December 8, 2011
Boeing, the IAM, and the month that shook aviation

When October ended the 787 hadn’t yet entered scheduled revenue service, the A350 wasn’t delayed, the A320neo had no launch customer, Embraer hadn’t picked a direction for its future products, Continental Airlines still existed and American Airlines wasn’t bankrupt.

Add the record aircraft orders from Emirates and Lion Air, retirement of ZA001, the first flight of a Sharklet-equipped A320 and November 2011 was the month that shook commercial aviation.

One event in particular, the landmark deal between Boeing and the IAM to place the 737 Max production on its ultra-lean Renton final assembly line will shape the landscape for at least the next half-decade.

The agreement was the month’s biggest surprise, the culmination of four weeks of secret negotiations, which began in late-October, and whose commencement came just a month after the IAM released once-secret documents related to Project Gemini, the 787’s second line selection.

That moment in a downtown Seattle hotel meeting room was arguably the low-point in relations between the union and Boeing management. The revelation was called the “smoking gun” that validated the IAM and National Labor Relations Board complaint against the company’s selection of Charleston as the 787’s second home.

This is where the relationship stood nine weeks ago:

This revelation will no-doubt spur a discussion that laments the actions of management or labor, but the publication of the documents – and their content – illustrate just how deep the adversarial “arm’s-length” relationships runs between Boeing and its workforce stakeholder. Boeing’s own description of a labor “hostage situation” is perhaps the clearest example of the state of its interaction with the representation of its largest group of employees.

The Piepenbrock Framework explains not only product development strategies of big “Blue” leaps, but the short-term decision-making that erodes trust and collaboration for mutual benefit of the organization’s stakeholders. Boeing’s relationship with labor, and labor’s relationship with Boeing, by this standard, is a deep shade of Blue with little collaboration or trust to be found.

The documents illustrate, above all, how Boeing’s leadership views its strategic decisions through a zero-sum lens that any move that creates a winner, must also by definition, create a loser.

The landmark nature of Boeing’s new four-year agreement, which is being voted on today at union halls around Puget Sound and Portland, is notable primarily for its timing, coming nearly a year before the contract’s expiration. The new contract extends its existing contract to 2016 and slows employee wage growth compared to the 2008 contract and increases healthcare contributions, but was greeted by many with great relief, as it accompanied a Renton promise of 737 Max production, a $5,000 ratification bonus and the avoidance of a strike next fall.

Though the sentiment is not universal, tweeted the Seattle Times aerospace reporter Dominic Gates, who was speaking with Machinists in line to vote earlier today: “Machinists don’t love this Boeing deal. But voting yes anyway for the most part.”

Boeing initially planned to select the 737 Max final assembly line site in mid-2012, in the thick of its contract negotiations. Whether it was explicit or not, the Max line had become a proverbial bargaining chip in lieu of a production decisions for a now-shelved New Small Airplane. The production system now matches Boeing’s “minimum change” goal for the new variant’s development.

While the event reflects a changed tone between the leadership of both parties, what remains to be seen is if this direction toward cooperation can be sustained for the long term. Lasting structural change doesn’t happen after four weeks and Boeing and the IAM’s detente provides labor stability over the next four years. That stability has prompted a 9% increase in its stock price since the agreement was first announced.

The coming 40% expansion of its production rates means the hiring of more machinists and higher revenues with which to bolster Boeing’s corporate earnings, a definitive short-term benefit for both.

“We wouldn’t go up in rate if we didn’t think we could sustain it for 2-3 years,” said Boeing Commercial Airplanes CEO Jim Albaugh last week, indirectly portending reduced production rates later in the decade.

How the parties work together to either mitigate the impact of an oversupplied market or manage a reduction in production rates, will likely test sustainability of the relationship. Boeing’s production habits have reflected, and arguably been a significant contributor to, the cyclicality of the industry and rapidly accelerating and potentially decelerating production rates will be the test of the future. While the stability of the Boeing/IAM relationship in good times is necessary, the relationship in challenging times is perhaps even more essential.

On the other end of the 737 Max supply chain, Spirit AeroSystem’s engineers, represented by SPEEA’s Wichita Technical and Professional Unit (WTPU) reached a nine and a half year agreement last week as well, complete with an incentive package tied directly to the performance of the largest aerostructures supplier in the world.

The contract mirrors Spirit’s decade-long agreement with its own machinists, offering both labor stability and predictable costs as it manages its growth. The company, formerly Boeing Wichita, has supplied fuselages, pylons and thrust reversers for each of the more than 7,000 737s built to date.

For Boeing, which has yet to firm its list price for the new re-engined narrowbody, the production economics of the 737 Max are beginning to come into focus, but more than the dollars and cents of the agreement, beginning the work of developing long-term stability and trust at the company can provide a positive ripple effect across the industry as airlines and suppliers plan for the future.

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

December 7, 2011
Boeing looks set for record 21-hour 787 flight to Bangladesh

Boeing is taking the 787 to Bangladesh today, typically a brief 12h 40min polar flight, the GEnx-1B-powered ZA006 is taking a decidedly longer route across the North Atlantic and through Europe and Asia. The flight will take the 787 from Boeing Field in Seattle to Shahjalal International Airport in Dhaka, the nation’s capital city.

Dhaka is an interesting choice for the record flight’s destination, Biman Bangladesh, which just recently received its first 777-300ER, is a 787 customer.

The now filed flight plan has the aircraft aloft for 20h 23min, breaking the current 787 endurance record by more than two hours after ZA102 flew non-stop from Guam to Paine Filed in 18h 7min to complete systems functionality and reliability testing in August.

SEA J70 MLP J36 DIK J70 ABR J90 RWF J34 WOOST J146 JFK J225 PVD J55 BOS J575 YQY VIXUN LOGSU 4900N 5000W 5100N 4000W 5100N 3000W 4900N 2000W BERUX UP179 STG UN725 ORKUM UM603 ARSIK UM731 TEKSA UM732 CAR UM871 NOTRI UQ789 ORTAP UP167 ARLOS UN4 SALUN A145 BRN UP751 LXR A145 ALMAL B418 ASPAN UN318 LOXAT N318 KATIK A415 SHJ P307 VAXIM L301 RASKI L301 NOBAT L505 OPAKA G450 CEA A462 DAC

While it won’t break 2005’s 22h 42min 777-200LR world record flight from Hong Kong to London, ZA006’s journey will likely set a record for longest endurance flight for an aircraft in its weight class, as its maximum takeoff weight is nearly a quarter million pound less than that of the -200LR.

I’m sure we’ll be hearing more about this as the record flight unfolds.

Photo Credit Russell Hill

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

December 6, 2011
Alenia parent believed 787 costs would force program’s cancellation

Flight International’s Italy Special Report is out this week and business editor Dan Thisdell, takes a close look at Finmeccanica, the troubled Italian aerospace company. The impact of rising development costs and workmanship issues from Alenia Aeronautica, the unit of Finmeccanica responsible for supplying the Boeing 787’s Section 44 and 46 fuselage barrels and horizontal stabilizer, forced a billion dollar (€753 million) charge against the company’s earnings in the third quarter, €161 million of which paid as a penalty to Boeing for the “non-compliance” of the stabilizers.

For the proper context, Alenia’s initial August 2005 contract for 787 was valued at $1.1 billion over the first 150 aircraft, or about $7.3 million per shipset.

The Italian supplier has since been removed as the sole source for the 787-9’s horizontal stabilizer, which will now be built to start at Boeing’s Seattle Development Center.

The impact of skyrocketing 787 program-wide costs due to the “major technological, process and structural challenges” were so systemic and “substantial”, reports Thisdell, that CEO Giuseppe Orsi believed that Boeing would cancel the aircraft’s development.

The €592 million figure was based on a huge increase in Finmeccanica’s assessment of the contract cost. Up until the end of the first half, Orsi explains, Finmeccanica valued the programme at only 300 shipsets, as there had been a “tangible risk” that a permanent increase in development and industrialisation costs would lead Boeing to cancel the 787 programme. In the event of cancellation, Finmeccanica would have kept a Boeing cash advance, but with certification and first delivery finally achieved, cancellation is “quite unlikely” and that, says Orsi, changes the calculations dramatically, as the contract is now valued at 1,022 shipsets.

Orsi believes the 787 will, now, prove profitable over the 1,022 aircraft plan, and should provide “low single-digit” profitability during the early programme period.

The 1,022 profitability figure for Alenia is in line with Boeing’s initial accounting quantity of 1,100 deliveries which the airframer says was driven by both the rising costs of the program and the substantial demand for the aircraft, far in excess of the accounting block of 400 for the 747, 757, 767, 777 and 737NG programs.

Now with the billion dollar charge to its earnings due to 787, Finmeccanica believes it will now turn a profit over 1,022 deliveries when coupled with its cost reduction plan. Unclear if that profitability will take the company longer to achieve than Boeing as its new second source role on the 787-9, reduces its revenue by half per shipset, though Alenia is “assured” 100% production rates for the yet-to-be-launched 787-10X.

Though Orsi’s acknowledges that the company’s financial troubles go far beyond the 787, his take on the impact of the rising development price tag is the first public acknowledgement of by a supplier of the dire seriousness of the 787’s cost increases that almost made the program not worth Boeing’s undertaking.

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

December 5, 2011
Movie Monday – December 5 – A Phenom’s Journey

Long-range delivery flights are standard practice in an industry without any borders and the product itself is its own delivery system. Today’s Movie Monday, produced and filmed by Anna Lucchese, takes us inside an aircraft’s extended journey to its customer.

In May, an Embraer Phenom 100, the Brazilian airframer’s very light jet, or entry-level jet depending on your preferred nomenclature, was delivered from the company’s Sao Jose dos Campos base to New Delhi, India. The aircraft (N4200), which is owned by the Joyalukkas Group, crossed from South America to South Asia over 19 legs and nine days.

While this particular aircraft had a long way to travel to its customer, in Melbourne, Florida today, Embraer is delivering the first US built Phenom 100 to a US customer, the first North American expansion for the company, adding to its Brazilian and Chinese manufacturing footprints.

Movie Monday runs just under 10 minutes. Enjoy.

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

December 5, 2011
Boeing’s first 787, ZA001 to be decommissioned Thursday

Thursday, December 1, ZA001 will ferry to Palmdale, California.

It will be the aircraft’s last flight for a while, as the first 787 will be decommissioned as a test aircraft, Boeing confirms.

Its Rolls-Royce Trent 1000 engines will be removed and it will remain in long-term storage before finding its way to a permanent spot in a museum, likely not far from the first 757, 747 and 737.

It’s a coincidental bookend of sorts, its ferry coming a day after Boeing and its largest union reached a landmark deal to secure 737 Max production in Renton. Much of the program’s life was defined in-part by the contentiousness between labor and management.

ZA001 may also be the single most expensive test asset in commercial aviation history, with the aircraft’s estimated cost exceeding $4 billion, say company sources.

Its flying life as a globe-trotting test aircraft will conclude just 15 days shy of its second birthday as a flying machine and its extended gestation in Everett filled the two and a half years that preceded. It was a strange way to come into the world for this first carbon fiber jetliner, wound from looms, rather than forged from metal.

Those who assembled it felt it almost maddening at times, rife with frustration and the stress of the push to speed it towards flight test.

The machinists and engineers could make a washing machine fly if they had to, and there were days that making ZA001 into a living, breathing aircraft seemed to feel that way.

Then-787 chief systems engineer Mike Sinnett held his blackberry up to ZA001’s cooling fans, running for the first time in June 2008, on the other end was David Hess, then-Hamilton Sundstrand CEO, whose electrical power system had brought the aircraft to life.

When it came time for its first factory gauntlet in April 2009, ZA001 proved incredibly hard to fool, stubbornly refusing to raise its landing gear. A flip of the gear handle would not suffice, its deeply integrated computer systems had to be tricked into believing it was flying.

“Hot diggity dang, TM, it works!” were the words from then-787 Chief Pilot Mike Carriker at the controls of ZA001 on December 15, 2009 as the jet climbed away from Paine Field for the first time.

Assembled, disassembled, re-assembled and disassembled and reassembled a few more times after that, the amount of changes made to its structure and fasteners and the lack of initial documentation made its future as a member of All Nippon”s fleet – any fleet – a non-starter.

It officially left Boeing’s production inventory in March 2009, though the official disclosure, along with a $2.5 billion charge to its earnings along with ZA002 and ZA003, shifted the first three 787s to research and development duty in August of that same year.

ZA002 lives on as a demonstration aircraft for Boeing Charleston, while ZA003 will take the lead on the Dream Tour over the next half year.

Though its service was brief in comparison to the company’s other first models in its near 100-year history, ZA001’s impact will be felt for decades, having laid the foundation for the company’s technological and financial future.

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

November 30, 2011
Breaking: 737 MAX to be built in Renton as IAM and Boeing arrange sweeping deal (Update2)

Just breaking now, The Seattle Times reports that the IAM and Boeing have reached a sweeping deal to place the 737 Max final assembly line in Renton, having secured a new four-year contract as well as a settlement of the National Labor Relations Board complaint against the company’s second 787 final assembly line in Charleston.

UPDATE 2:28 PM: The IAM and Boeing have confirmed the deal, saying that once a December 7 ratification vote takes place, the union will instruct the Obama administration that its grievances have been resolved and the NLRB dispute will be dropped.

UPDATE 4:16 PM: Reactions are pouring in from around Washington, from the State’s two US Senators, the Mayor of Renton, Snohomish County Executive (PDF) and SPEEA.

My first pass at the story:

The union leadership has recommended its members approve the new four-year contract, which includes a $5,000 ratification bonus, a 2% cost of living wage increase each of the four years on the contract, pensions for new hires, new health care plans and preservation of medical benefits for retirees.

“Boeing has assessed the business case for locating production of the 737 MAX in Renton in light of the economics of a proposed new labor agreement and the company is prepared to locate 737 MAX production in Renton provided the economics contained in that proposal are achieved,” said Boeing

Here are the complete details of the contract that being shared with the union’s membership.

This is a breaking story and will be updated.

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

November 30, 2011
Video: Sharklet-equipped A320 completes first flight (Update1)

Airbus just announced that A320 MSN001 – fitted with Sharklets – has completed its first flight from its Toulouse, France base. Video of the flight itself isn’t yet available, though Airbus has released footage of the installation process of the new fuel-saving wingtip treatments.

Photo Credit Airbus

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

November 30, 2011
GEnx-powered 787 certification, Air India delivery to slide to 2012

US Federal Aviation Administration certification of the General Electric GEnx-1B-powered 787 is set to slide to early 2012 due to the lack of availability of a production aircraft to satisfy final regulatory requirements, sources confirm.

While Boeing has completed a portion of its extended operations (ETOPS) and functionality and reliability (F&R) testing on a Block 4 GEnx test aircraft ZA005 and ZA006, the FAA mandates a portion of the required 300h F&R campaign to be undertaken on a production aircraft.

Boeing and GE had intended to certify the Block 4 GE-powered 787 variant in the fourth quarter 2011.

Boeing declined to comment on the GEnx 787 certification schedule.

Boeing will employ Airplane 35 a GEnx-powered 787 for Air India as its confirming production article for testing, though the slow process of change incorporation has pushed the aircraft’s first flight to the first half of December, sliding the completion of the FAA’s Part 25 requirements.

The delay has pushed Air India’s first delivery into 2012, after its latest schedule had it being delivered in the fourth quarter of 2011, already delayed from 2009.

The aircraft is expected to transition from the company’s Everett, Washington factory to its flight test base at Boeing Field in Seattle later in December, say program sources.

ZA005 remains an active test aircraft, conducting flight tests of the GEnx-1B’s first performance improvement package (PIP1), expected to deliver a 1.4% improvement in specific fuel consumption, due to an increase in the number of low pressure turbine (LPT) blades.

The Block 4 GEnx-1B engine configuration received FAA certification in March 2008, and the PIP 1 configuration was certified in August. A second PIP for the GEnx-1B is expected to achieve engine certification next year.

Test aircraft ZA006 is currently having its instrumentation removed in preparation for its coming relocation to Boeing’s Global Services & Support facility in San Antonio, Texas for refurbishment.

Boeing has delivered two Rolls-Royce Trent 1000-powered 787s, both to All Nippon Airways and aims to deliver a combined 15 to 20 747-8s and 787 in 2011, two-thirds of which will be 787s.

The slow pace of aircraft change incorporation has continued to put pressure on Boeing’s delivery schedule, with its internal planning showing five more deliveries in 2011. However, program sources caution that only one or two 787s for ANA will be ready for delivery before the end of December.

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

November 29, 2011
What will happen to American’s unfilled aircraft orders? (Update1)

After months of speculation about its seemingly impending bankruptcy, American Airlines officially filed Chapter 11 protection this morning to restructure its business. The filing comes after years of network issues, hemorrhaging cash and labor disputes, as well as ordering massive amounts of aircraft – perhaps more than any other airline in the world.

According to Boeing and the airline’s recent US Securities and Exchange Commission filings, American Airlines holds firm orders for a total of 15 777 aircraft, split between 9 777-300ERs and 6 777-200ERs, as well as orders for 143 outstanding 737-800s.

Of its record 460 aircraft order in July, ~~only~~ the 100 737-800s have been officially added to Boeing’s backlog, part of that 143 narrowbodies still to deliver. In the near-term the consensus thus far points to the bankruptcy hastening the departure of the MD-80s from American’s fleet.

UPDATE: Airbus says the 130 current generation A319 and A321 aircraft that were a part of the July order are now a part of its backlog as firm orders.

American Airlines Senior Vice President Craig Kreeger says of the record aircraft buy: “That order is rock solid. Airbus and Boeing will give us the youngest fleet in the industry within a few years … and that remains an important part of our strategy.”

Though even with that assurance, longer-term questions remain about the massive number of unfirmed orders waiting to be put on Airbus and Boeing’s books, all of which are dependent on the process of American’s restructuring.

Boeing issued the following statement earlier today:

We anticipate as part of American’s reorganization that new, fuel-efficient airplanes will be a key part of their ongoing success, so we expect these Boeing airplanes to be a part of it.

We have seen a number of our customers go through the bankruptcy process and successfully reorganize. We hope it will be an opportunity for American to do the same and emerge stronger from the process.

When we entered into our recent agreements with American, we were confident that these assets at issue will be core to their operation in almost any scenario. We have no reason to doubt that today.

Of its orders that are not yet firm, American holds 130 A320neos and 100 737 Max aircraft. Further, American has unfirmed orders from Boeing for 42 787-9s, which are dependent on approval of a new agreement with its pilots. The airline also has purchase rights and options for 365 more A320 family aircraft, 40 737-800s and 60 737 Maxs, and 58 787-9s

All told, American Airlines holds firm, unfirmed commitments, options and purchase rights for 1081 aircraft, 795 of which currently stand as commitments to Boeing and Airbus.

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.

November 29, 2011