Tuesday, September 19, 2017

Airbus Will Hail Mary Its A-380 In China

The A-380 needs customers stat! China needs expanded transportation hubs stat! Airbus would like China having the A-380 as a solution going from city to city with 500 passenger a trip. China has its population emerging into a economic surge where air travel is a partial solution for moving about the region. Trains, planes and automobiles are the eventual winners for the honor of people moving in China. The A-380 hasn't sold to anyone for some time and Airbus will give some away pretty soon to keep its production lines open until profitable sales are found.

There is a dichotomy of travel pairs in China. Single aisle connecting large villages of a million or more and duo aisle connecting large towns for million people or more. The A-380 can do people but it can't do regional airports while China is currently building in abundance for its emerging economy. Airbus insists China will need the A-380 in numbers until Airbus turns a jumbo profit on its A-380. The A-380 would be used for inter continental travel. Future travel pairs will run into the same trouble the A-380 now faces. There are only so many world-wide airports for the A-380. A population of 500 Chinese travelers may board the A-380 in Shanghai but were would it fly?

The duo aisle configured can go as far as the A-380 but land pretty much any where in the globe. It will carry a load from 250-300 passengers. The single aisle can virtually island hop around the Pacific ocean and can land anywhere in China. There are small villages in China of 100,000 people or more and the 737 will keep those airports in mind. There are multiples of multi-million peopled cities in China and the mid wide bodies are on the case. Where would the A-380 land if it left China? Where would it land in China having A-380 capable airports? It obviously can find 500 Chinese wealthy enough for buying tickets and filling an A-380 everyday going somewhere. The pride thing does wonders on a government's mind set. China will buy a handful of A-380's because they can.

The emotional limit will soon be reached for China's want for super big/jumbo aircraft. The transportation plan will come down to having more flights going everywhere everyday than having more Super Jumbos everywhere everyday. That should make it clear for everybody.

Time will play the A-380 out of vogue and onto the desert for a parts bin.

The plan will eventually evolve into a competitive nature. The best wide body operating in the environs of China will win. The best wide body is defined as what gives China the best deal for its economy. That is why both Airbus and Boeing want to build plants in China. The new norm is not importing into China but building product in China. The win win combination is a technological opportunity and a work force opportunity for the Chinese people and nation. China would like to learn how it too can build high tech aircraft for its many reasons.

Chrysler in America almost had Mercedes working with them creating a better 300 touring car, then it left America allowing a Fiat take-over. In the aviation world there are no scenarios like the Chrysler mishaps and China hopes to land a major air framer long enough in order to build its aviation portfolio. Both Airbus and Boeing know this as well, but the carrot of selling wide bodies and single aisle is too much a temptation for mega makers to ignore. They hope to get in and out before China takes what it wants for its own techno shelf just as Mercedes did with Chrysler. The 300 was one fine car. 

Monday, September 18, 2017

What Will Emirates Do At Dubai?

The airshow is rapidly approaching. The caveat was a wide body order many predicted, but Emirates the big player positioned itself with an order for 70 wide bodies for either Airbus or Boeing. Things change as is often the case. The recent reports is that Emirates has backed off announcing any purchases of wide bodied aircraft at this year's airshow. The reason for that assessment is that the market has slowed for this middle-east juggernaut.

The next step for any fan of any aircraft maker is to always look at the positive after losing out on an opportunity. Both Boeing and Airbus have much to gain with a major wide body order either for its 787 or its A-350 aircraft. The question is what will move Emirates towards making an order announcement at the Dubai airshow. The quick answer is a nominal order with a big option floated about. Emirates would be locking in a price going forward until its aviation market improves. Having said that, a mixing order of types would be the case. Optimism suggests 10- 787-9's and 10- 787-10's are booked with 50 frames optioned into the future. Emirates may further direct options for 20- 787-9's with another 30- 787-10's in a sprawling Boeing order book at the show. 

The pressure is on Boeing to give Emirates the "right" price in light of Airbus chomping at its heels. If Emirates were to wait for its right moment to order, it might be another seven years out before it would start receiving those aircraft and things change quickly, overnight, in some cases. The risk of waiting hangs heavy on Emirates'  buying plan. That is why ordering twenty 787 is better than just waiting. Somewhere in between is always the logical conclusion. 

An Example, Qantas Airlines for a longtime had ordered a multitude of 787's and then cancelled the order, but kept its 787 options intact as it regrouped its financials. It is just now Qantas has begun to take delivery of those former 787 options in a negotiated firming of 787-9's. It may not get all of its options sealed up for delivery but it will gain a substantial lot in the process at a decent price.

Another consideration is what the two makers are offering Emirates. Boeing may have locked a price in with Emirates if it just signs an MOU for 70 aircraft to be firmed in the next 24 months. There are many scenarios for either Boeing or Emirates with this impending order and a commitment at Dubai is more likely than having a hard order.

Friday, September 15, 2017

The American Iceberg Tipped By American Airlines

American Airlines is in talks with Airbus on its already ordered 22 A-350 wide bodied aircraft. Boeing has already placed 31 of its 787's into American Airlines hands as it has more to deliver with more in the option vault. The 787 could flood American Airlines fleet. The tally for American Airlines is 31 of the 787 delivered (20 787-8's and 11 787-9's) currently in its fleet with 13 more to go on order. It also has a standing option for 52 more 787, if it chooses. That is a large fleet of aircraft.

American President Robert Isom said, “I don’t like small fleets in an airline our size,” The Airbus deal could go large, but having a Boeing Order Book representing a possible 94 wide bodies, remains skeptical for any additional A-350's. The American Airline's wheeler and dealers say they have a place for the A-350 in its fleet. An often used ploy for incentivizing price reductions with both mega builders of air frames.

American Airlines has its needed goals and objectives in a secret place. If Airbus would just give away its airplanes then a deal would be made with the airline. 

It would be easy to cancel its options for 52-787's, but a move in that direction may cost American Airlines (dollars lost) from breaking up its commonality efficiency with Boeing. 

On the other hand Airbus cancellation penalties exists for any order cancelled from the airlines order of 22 A-350's. American Airline is less interested in having a big mixed fleet than just a small fleet of anything, so the stakes rise for both makers. 

By this time American has worked out several scenarios. 

  • One, in which what it would cost American cancelling the  Airbus order?
  • Second, a mixed fleet cost of operations can have a big financial impact.
  • Finally, going all-in on with Boeing or Airbus is in its objective goals.

American now knows the cost of cancellations, and that will probably cost them the equivalent of one or two aircraft delivered. Boeing may cover the cost of the Airbus penalty with the remaining 52 on option. In fact, American Airlines may find a lessor in a sell lease back arrangement thus avoiding an Airbus cancellation penalty and utilizing 22 of the A-350 over time as a fleet supplement until all 787's are delivered going forward. Point number one above is a "bite the bullet" moment and American is seeking the least financial impact during its continued negotiations with Airbus.

The American Airlines president has essentially stated, American is a "Big One Fleet" airline company casting a light on cancelling the Airbus order, and it is already positioned for having a Big Boeing Fleet inventory. The negotiation with Airbus could be taken for minimizing its cancellation penalty from the Airbus maker.

Going all-in is the obvious outcome as American has already set up a massive 787 fleet in the books and it would be an efficiency drag to its operation having the A-350 in operation, where the 787-9 and 787-10 could do the job well if the 787-10 is ordered by American after these negotiations. 

Expect another loss for Airbus where some A-320 single aisle are parleyed into any remaining Airbus deal, as a face saving announcement. The talks will continue during the balance of 2017. Any book changes will occur during the first of 2018. Boeing is too embedded into American Airline's DNA. I can say this because I'm retired šŸ˜Š!

Thursday, September 14, 2017

Wednesday, September 13, 2017

Reading The Tea Leaves 787 will Go To 14 per Month

The old Star Trek episode said, "Make it so number 2". Dennis Muilenberg, Boeing's number one had long since held back the "Make It So" order. The why's of that command are as varied as one can imagine. The itemized list of things that happens with such an order from the top requires a what's in the tea leaves analysis from a solid Winging It perspective.

The first item up is future orders. Boeing knows something big is coming this way.


“We expect to add 100 airplanes to the 787 block. That will factor in to the financials and is accretive to our margins,”

Financial Definitions: "Accretive"

Image result for accretive

An accretive acquisition will increase the acquiring company's earnings per share (EPS). Accretive acquisitions tend to be favorable for the company's market price, because the price paid by the acquiring firm is lower than the boost that the new acquisition is expected to provide to the acquiring company's EPS. As a general rule, an accretive merger or acquisition occurs when the price-earnings (P/E) ratio of the acquiring firm is greater than that of the target firm.

In finance, accretion is the change in the price of a bond bought at a discount to the par value of the bond. Accretion can be thought of as the antonym of amortization.

  • YTD, the order book nets 78 units for the 787. That number is twenty-two short of the magical 1,300 unit number in the current accounting block. A 100 unit increase would suggest moving the block out to 1,400 units. Boeing is already making money for each 787 delivered while each unit contributes to the reduction of its set aside deferred costs of $27 Billion. Boeing's job one, is to eliminate the deferred cost of about $27 billion.

  • The second Item up is cash, Boeing will increase its cash inflow by two more 787 units a month when making revolutions for fourteen units a month pace. The current twelve a month pace stands at 144, 787 units a year delivered. Moving to 14 units a month suggest about 166 units delivered each year into the foreseeable future. If Boeing sells each unit for about 150 million at "deal"  prices it will add an additional $3.6 billion a year to its cash coffers. An important stockholder indicator indeed.

The third item up is Suppliers.

  • Boeing cannot announce going 14 a month without going to each supplier and gaining a commitment for every part provided will be there without delay. A big part, the jet engine, is an example. It is probably the most complex and expensive part on the 787. Both mega suppliers, Rolls Royce and GE, also have high tech suppliers stretched all over the world when it provides an engine for its customers. It seems Boeing has checked the supplier resource off its to-do list and can go 14 a month by 2019. Therefore, its seat makers are on-board by 2019.

There are many more subset items when announcing a rate increase from 12 to 14 787 production capability. The trickle down impact is big on workers, plant and equipment.

The tea leaves read in all this, 

...is that Boeing would not make this announcement from the top unless it has the orders already "bagged" even though not announced or publicly confirmed. Forecasting a demand is not a significant enough reason for increasing its production output. Something concrete has already occured while not announcing the who-what-when and where details.  Even though the close of 2017 is near and the order scramble has started for both mega air frame makers, Boeing had started earlier this year scrambling towards a robust 787 order year. 

Tuesday, September 12, 2017

Malaysia MOU's Boeing For Eight 787-9.

Boeing just agreed with Malaysia's most recent deal making via MOU and has become a Trump PR moment as he gains traction with 100's of thousands aerospace voting workers throughout Boeing and the supplier's land. It won't be booked until... well we'll say by years end just to be coy with Airbus, as it usually does when it dramatically comes up with orders busting Boeing's order bubble at the last minute. Airbus has some work to go at its order book stands at 215 units where Boeing lists 426 net orders. 

The Malaysia MOU only bumps Boeing's book by eight 787-9's and eight 737 Max eights. This is just the sweetener. It is also reported a total of 25 Max were in the talks with another 25 Max flying in the background. The 8-787/50-737 order mix includes 737-Max 10's. 

Airbus was also in the works for this order, but Boeing appears to lodge its foot first in Malaysia's Air big hanger doors. Trump of course was right there with Malaysian Prime Minister Dato’ Sri Mohd Najib Tun Abdul Razak in talks at the White House today.

The MOU was all they could present for the cameras, but it is well known up to Ten Billion (US) in orders are in play.

Since John Leahy announced his impending retirement this fall, Boeing is on the order rampage. The 777-9X family recently doomed the A-350-1000 as a second chair offering within the aerospace marketplace.

The 777X is an actual Super Jumbo downsize fitting in at every major hub. The A-380 has reached its white elephant potential and Airbus scrambles on what to do! An A-350-1100 prospect has a thin market with the 777X already absorbing most of the potential sales. Euros are hard to come by when considering  any A-350-1100 do-over in light of its A-380's aging. The Airbus Top end is vulnerable.

Boeing once again got aggressive on the big chess board when it quickly moved forward with the 777X. It simply "Castled" with its 777X and took the Airbus queen's pawn in the process. The A350-1000 is now a lost leader in the market place. Airbus must do a moon shot at this time or gradually lose its place chasing Boeing.

Back to Malaysia Airline. It has aging A-330 and the 787-9 MOU explains the A-330's fate. The Max order is a key signal when having the single aisle turn of events going to Boeing and not Airbus. For every Max ordered is not a NEO ordered. The battle is in the trenches and Boeing has become aggressive in those proverbial trenches. The gap closes between the two mega makers of single aisle backlog. 

The first Max to hit the market place will now sell the majority of Boeing's future single aisle aircraft. Politics aside, as it can only go so far. President Trump cannot tip the balance for Southwest Airlines into buying more 737's nor can President Emmanuel Macron of France convince Indigo to buy more A320 NEO's. It's a business plan thing and politics is a four year cycle in the US.

Time is a sand shifting wind. Over time no one knows how any airline will play its hand for prosperity's sake. Indigo may collapse under its own weight or Southwest could merge with a bigger fish like United, causing some sort of change to occur. Currently, Boeing won a big one today with Malaysia's tip of its hat towards both the 787 and Max. The trend line is a dog fight between the two giant manufacturers as no outcome can be predicted. At this time Boeing has the high ground over Airbus in the 2017 dog-fight. 

Sir Isaac Newton's Third Symphony Plays on

It’s down to a techno leap for the jet engine before passenger service breaks its deadlock between Airbus and Boeing. The gold rush is on for going out of the Jet engine box with something no one saw ten years ago from jet propulsion. Maybe it’s not conventional jet power and it’s something different. After-all the jet engine builders are tweaking jet power with ceramic, and carbon fiber fan blades. 

Image result for newton's third law of motion examples in everyday life

This becomes like using new shoe laces on a sports shoe or a new ground breaking new sole for better performance. It’s still a shoe giving the athlete a micro advantage over another competitor. That is where the marvel of the jet engine resides and where airline competes like an athlete.

A jet engine needs movement ahead of a centuries old idea of propelling a balloon across the room in a gasp of air through its mouth piece. The whole time since WII, jet engines came from the idea people have been wrestling with the “next step”. Rockets were reserved for moon shots and the stars. Jet engines were reserved with making a basic concept for every action there is an opposite reaction.

Newton’s three laws came from: The three laws of motion were first compiled by Isaac Newton in his PhilosophiƦ Naturalis Principia Mathematica (Mathematical Principles of Natural Philosophy), first published in 1687.

The jet engine came from the Newtonian principles. The best engine is down to composites, ceramics and designs within that law. 

Newton’s 3rd law remains after all these centuries of trial and error.

The next great airplane will use Newton’s 3rd principle, but it will come from the action side of the equation. Propulsion will indeed need a new format not necessarily labeled as a jet. Carbon fiber fan blades will carry Jet engine efficiency only so far.

The source of action must change from a carbon fuel source such as “Jet A” fuel or kerosene as most in the industry know it. There is only so much energy stored in a 100 pounds of “Jet A”. The jet principle must change beyond efficiency within its current configuration of burn and push out. The lack of finding a new source of power has limited jet power improvement to its internal workings. 

The source of power will form around its delivery system which is called an engine. Even though the word engine become a simple understanding for most, it is perhaps a lynch pin and the most complicated part of using a source power for its propulsion. 

Perhaps the word propulsion is the proverbial brick wall. The answer may come from a new manipulation of the universe’s mystery of energy or power. The simple magnet exercise from childhood comes to mind where opposing magnets try break away from each other’s polarity when opposite to the other magnet. This may not be a pathway to pursue but is definitely a compass bearing towards finding an answer.

The earth is the world’s biggest magnet (hah word play!). 

The modern jet engine is running out of development room much the same as a hand pump. Most pumps today are electrical and move mountainous amounts of water. However, the energy source for its electrical operation is found with having massive bulk of acres of solar panels to dams on huge rivers. Airplanes thrive on light weight appliances. Nuclear and electrical sourcing can weigh no more than its current fuel load. The lighter weight source allows for expansion from other technologies assisting travel and flight.

The obvious pathway comes from looking at the universe and how it functions. Then scaling that down to an aircraft “engine”. The most readily available source comes from nuclear energy. The first of many red flags to strike up, environmental impact from radiation exposure, extensive cost prohibit a nuclear path, and an uncertain solution would extend its timeline to service maybe by centuries.

Walt Disney was on to something when he made the movie “Flubber” he possibly acknowledged a need for a quantum leap from the jet engine. Once again harnessing an opposite and equal reaction in forms other than spewing gasses from the jet engine is the sticking point. A jet engine costs millions of dollars where its replacement may cost trillions of dollars for each one delivered. That is why so many engineers are looking at jet engine parts and its internal designs rather than a whole new concept for Newton’s third law.

Monday, September 11, 2017

Boeing Patent EP 2591996 A1, Could This Be The 797?

Here is the not so secret Boeing Patent

 EP 2591996 A1 ...

The now, and  much speculated flying oval. Could this be the enigmatic 797 (unannounced)? Here are some quick points of interests found in the patent papers.

Publication number
US20130119198 A1
Publication type
Application number
US 13/293,958
Publication date
May 16, 2013
Filing date
Nov 10, 2011
Priority date
Nov 10, 2011
Also published as
Original Assignee
Export Citation
External Links: USPTOUSPTO AssignmentEspacenet

Okay some attention points are made above

A Point of interest: the above sketch is 10 across seating.

Didn't see this one coming a "Flying Egg" above?

The design suggest a shorten body length is the big sketch takeaway. Expect a streching in length and some narrowing of body when configuring for a 797. Instead of ten across, I'm staying with 7 seats across with dual aisle within the elyptical shape at the passenger level, The ceiling and under passenger areas will probably gain some inches for obvious reason's.

A wheels up will need some design modifications as well see below.

Note: Below the engines ride high on the stabilizers, as a lower ground clearance would make wing mounts unattainable in this design. Under wing engine mounts will take some more design effort unless the old style tail engines are once again in favor.

The above diagram shows an eliptical effect to the extreme. Boeing would go somewhere between this extreme design and the traditional straight body design.

An airplane  body experience will change how people look at the current classic tube for five hours versus having a room feel with the same trip duration flying in the big "E". It will take getting used to, but after the adjustment, it could become a preferred way to travel. This elyptical design would be a baby step towards a giant flying wing body.

Below are sketches showing little nuances such as a sloping floor near the bow.

Possibilities for an eliptical frame would include window pacements, especially in the wing area. A 797 would take advantage of a a taller floor to ceiling and narrower across section making window placements an interesting outcome. The design is pushing possibilities with these sketches. and would not represent a 220 passenger version.

A final passenger cross view for the seat area sans overhead bins and seats.

The design is specifically calling out extensive CFRP materials in its construction. Below is the note list refering the use of CFRP material throughout.

Remember this is just a patent for cornering all airplane elyptical designs allowing for unlimited possibilities within the patent sketchings.

Sunday, September 10, 2017

The Immense Electrical Power Could Tune In HAARP

Many conspiracy theorist  have long piped about the  High-frequency Active Auroral Research Program or commonly know as HAARP. Jesse Ventura, former Governor of Minnesota gave internet streaming to the subject. He exploited the Alaska HAARP base as a cause of the world's earthquakes. There was even a tie to the mega earth Quake in Haiti as a HAARP event. China had major earthquakes at that time as well. HAARP was a suggested cause for those quakes. 

The common denominator to all this conspiracy theory is electrical power. The USS Zumwalt could light a small town with its power source. The secret weapon of the Zumwalt could be a HAARP generator stationed off some coast line waiting for the next hurricane or earth quake to happen.

Image result for Zumwalt electronic radar

An off-mainstream website has this to say about HAARP:

"The military says the HAARP system could:
    • Give the military a tool to replace the electromagnetic pulse effect of atmospheric thermonuclear devices (still considered a viable option by the military through at least 1986)
    • Replace the huge Extremely Low Frequency (ELF) submarine communication system operating in Michigan and Wisconsin with a new and more compact technology
    • Be used to replace the over-the-horizon radar system that was once planned for the current location of HAARP, with a more flexible and accurate system
    • Provide a way to wipe out communications over an extremely large area, while keeping the military's own communications systems working
    • Provide a wide area earth-penetrating tomography which, if combined with the computing abilities of EMASS and Cray computers, would make it possible to verify many parts of nuclear nonproliferation and peace agreements
    • Be a tool for geophysical probing to find oil, gas and mineral deposits over a large area
    • Be used to detect incoming low-level planes and cruise missiles, making other technologies obsolete
    Further reading at HAARP  .Net will fill in more details of what the HAARP generation has for power needs to generate trouble and mischief. 

    Wikipedia makes a "power" point: "Lyndon B. Johnson, the last Zumwalt, is being considered for the installation of a railgun in place of one of the 155 mm naval guns after the ship is built. This is due to the installed Rolls-Royce turbine generators being capable of producing 78 megawatts (105,000 hp), enough to power the electromagnetic weapon."

    The HAARP case with the Zumwalt class Destroyers become a no-brainer when considering what it has already achieved with its built-in power generation capability.

    A small example of the Zumwalt possibilities: 

    "The class has a low radar cross-section; an integrated power system that can send electricity to the electric drive motors or weapons," 

    The Zumwalt could light up 2,500 homes but it won't, its built for war.

    Friday, September 8, 2017

    Airshow Mania Announces 797 At Farnborough 2020

    It is hard to forecast the "Perfect Storm", especially with the Boeing company. Boeing has over the last three years stalled, climbed and looped over announcing a New Medium Aircraft (NMA). First there was the let it slip off the lips mode, then...

    Photo Depiction of a 797 from Leehamnews.com
    Image result for 797 NMA 

    • "We will build if we find perfect customers". 
    • The customers came forward with a solid "like" that idea response. 
    • Then came Boeing PR speaking through Mr. Toad, "We will build it if we find the perfect design." 
    • The Toad then said, "We will build when market data determines the perfect time."
    • Mr Toad then says, "We are sinking with the 787-10, Max and 777X programs all at once.

    Boeing PR Spokes-Toad Full Resume Video

    What Boeing is really saying is... we don't know what we are doing until we do it! Or is it waiting for the perfect 797 storm before putting out to sea? The storm started to form when customers said that's a great idea. Winds picked-up after the market data forecaster said there was a system moving in and no company will step up or fill-in as a low pressure system is standing at a 5,000 unit forecast. 

    A second and third storm systems came in from the Northwest from Seattle and from the Southeast's Charleston, SC. The 737 Max and 787-10 had to have its entry into the market place before a perfect storm could be managed. The 777X is undergoing design modifications while processes are being built in Everett, WA. A whole new wing plant is completed before final scratches are complete on Boeing's giant Etch-O-Sketch found in engineering. The book keeper reports the Max is flying off the shelf as if in some sort of pre-hurricane water bottle frenzy at Walmart. 

    The 777X program is the lynch pin for Boeing's perfect storm. Its entry into service is scheduled for the end of 2019 or early 2020 as aviation forecasters predict. The 787-10 is for the first half of 2018 with that program running slightly ahead of schedule. Expect a 2018 springtime 787-10 entry into service.

    The airplane program fronts are converging towards the first half of 2020 with the Max at full production by that time, 787-10 entering service since 2018 and the 777X  is having its opus entry by early 2020. The data guys are weary with checking it twice in some sort of yuletide mania. Then up comes Farnborough Airshow, Great Britain's answer to Paris. The storm should hit in a show stopping sort of way. 

    The show will open July, 2020 and Boeing will have orders in hand by that time. It will take about 150 orders for the 797 having any significant show impact and orders may go to a "higher count". A maniacal forecast is for 300-797 orders at the show.

    Leading candidates for this order venture would include the main European airlines such as British Airways, Norwegian and Air France to name a few. Ryan Air could convert some of its single aisle order backlog depending on price, efficiency and range variables for the 797. The North American carriers would swap order backlog for new 797's. 

    The wild part of the storm could be an Asiatic emphasis where anywhere from India to China could boost the book by another hundred units. Boeing would expect a 797 entry into service by 2025. It has the resources and technology in place for a clean sheet program rush-to-service. Neither the 787-10 or 777X is an actual clean sheet effort. The 797 is already in the engineering works.

    A general concern is whether the NMA will take away from other program types such as the 737 or 787. It will of course nip around both types edges, but the core of the NMA concept will establish new business models for its customers which will be unrivaled. The emergence of Boeing's new NMA will come from "The Perfect Airline Storm". 

    The perfect storm arrives as:

    • Boeing has checked-off its prior programs completeness
    • Customers are willing and able for NMA
    • Boeing has immense technical and facility resources in place only awaiting the 797-NMA modifications
    • An announcement venue is at the right moment (Farnborough 2020)