This week’s featured link:
Horizon Air operations stabilize as crisis abates – The Seattle Times
It’s good to see a little bit of light at the end of the tunnel for Horizon, but this is far from over. Next year, instead of the growth Horizon promised, it’s just going to retire 13 Q400s to be replaced by Embraer 175s. Stable is good, but it still feels precarious.
Two for the road:
Binge-watch all 12 ‘Earning Our Wings’ episodes starting today – Delta News Hub
Not sure if you saw it when it came out, but Delta has put out these roughly 4 minute videos on a regular basis showing the training life for flight attendants. It’s been a decent reality-ish show in bite-size pieces. Now that the 12 episodes are done, you can see them all right here.
RPT-Lockheed Martin could beat Boeing in race to supply Canada jets – Reuters
The fallout from Boeing’s big push for a retaliatory tariff on the Bombardier C-Series continues. Now Canada is refusing to buy 18 Boeing fighters and will instead buy some used aircraft from Australia. This order was just a stopgap until a bigger 88 airplane order is placed, and it’s now highly unlikely that Boeing will have a shot at that. This also give Lockheed new hope that it can get back in the game. This isn’t ideal for Boeing or for Canada, but I do enjoy seeing Boeing take this hit. (And if that’s not enough, how about Delta’s decision to order 100 A321neos instead of Boeing 737 MAX 10s?)
The ITC hears the Boeing-Bombardier case next week and it is certain that Airbus/Bombardier will provide a lot of information and response that didn’t get presented the first time around including that United cancelled its 737-700 order (or converted it to larger aircraft) even with the reported 70% discount that Boeing offered United. If United can’t figure out how to make the economics of the smallest 737 work regardless of the price Boeing sells them for combined with the near complete absence of sales for the smallest 737MAX which Boeing argued is hurt by the Bombardier C Series, then Boeing’s case quickly falls apart. Sadly, Boeing will still pay the price for its attempt to squash the C Series and the CS500 will likely be built anyway. Given that Delta says that it will wait for the C Series to be built in Alabama before taking delivery and Delta has only ordered new generation engine CS100s (partially convertible to CS300s) and A321NEOs with nothing in between, the chances are very high that Delta is holding out for the CS500.
Boeing’s strategic failure at shutting down the 717 and 757 lines while attempting to kill off competitors that produce superior products in categories where Boeing hasn’t or won’t invest in new products will go down as one of top failed strategies of hubris in corporate America. You can’t lose a market to a competitor that you have walked away from.
So you don’t think with McNerney awful decisions on the commercial side he deserved to see his salary doubled from $12.5 million in 2007 to $29 million in 2014 (a 132% increase) while the value of stock over the same period only went up 18% – almost entirely associated to military orders, many of which are being called into question by the Trump administration?
Any coincidence the Boeing board at the time was filled with other CEOs who gave themselves similar pay increases despite stagnant, and in many cases, declining stock prices, bankruptcy, and massive layoffs and employee salary freezes.
I’m sure the C-suite at Boeing is seeing the error of their ways but to be fair they didn’t ask for the level of tariff they got. Nevertheless this should be a learning lesson to them. My hope is this fallout is enough for them to green light a clean sheet new design for narrow body aircraft. The 737 is a fine aircraft but it’s origins go back to the 1960’s. It’s time.
I don’t get why people are thinking that the Boeing- Bombardier dispute is now a massive egg on face moment for Boeing. Didn’t Boeing get exactly what they wanted? Sure, Airbus gets into the program now, but what Boeing was trying to avoid is another big plane manufacturer developing, and that’s what the Airbus deal is. All they had to give up was a couple orders from Delta and Canada, why are people acting like Boeing is hurting now?
VP – It’s hard to know if Boeing got what it wants or not. If Airbus shuts this thing down over time, then Boeing wins. But if not, then Airbus has a weapon to win in a segment where Boeing doesn’t compete. If Boeing wanted to compete, it would be stretched thin. It currently has a focus on this “middle of the market” segment to replace the old 757s/767-200s. Then it also has to figure out in the long term what to do about its 737. This could significantly hurt Boeing if Airbus can capitalize, but we just don’t know.
Hey Cranky, I appreciate your response! While I realize that this is a massive segment of the market that Boeing is now basically losing out on, my argument is that this even if the CSeries is a massive cash spinner for Airbus, Boeing still “wins”. Sure, they lose out on MOM until they build a cleansheet, but wouldn’t they rather have that happen then having another big competitor to deal with?
VP – I don’t think they do win if the C Series is a success. Bombardier wouldn’t likely have grown into a true large jet competitor. It was severely handicapped as it was, and the chance that it could get additional funding to launch a major large aircraft is probably slim. So I think with Bombardier you have a successful competitor in small jets, but an unlikely entrant into bigger markets. But now Airbus can use the C Series to sell a family of jets, and that can make Airbus stronger vs Boeing in a sales competition. If Airbus just kills the C Series, then Boeing wins. But if that thrives, I still think Boeing is worse off.
Offtopic but considering it seems that Darwin Airline failed to live up to its name and wasn’t fit enough to survive (reports are that it’s now dead), “Airlines We Lost 2017” might need a special section (mausoleum?) for Etihad’s dearly-departed ex-stepsons.
Boeing deserve everything bad that flows to them from the Bombardier C-Series tariff fiasco. What an incredible act of selfish arrogance, directed largely against one of its prime customers!