Daily G2 Solutions analysts news review now available at: 

March 2011

Commercial Aircraft Delivery Outlook:  Steady, for now

 

December 2009

Ron Stearns,  G2 Solutions Research Director to present UAS forecast at Aviation Today Webinar

How to Gain from the UAV Boom
An Aviation Today Webinar
Wednesday, January 27, 2010
11 a.m. to 12 p.m. (EST)

 

BBC Interview with G2 Solutions Managing Partner ahead of the Boeing 787 first flight

 

November 2009

ATLC in the UAE: F-22s, Rafales, Typhoons and more

A significant exercise will take place right after the conclusion of the Dubai Airshow in the United Arab Emirates.  The Al Dhafra airbase will host teams of six AdA Rafales, six USAF F-22As and six RAF Typhoons as well as the local UAE & French squadrons (and also Pakistani F-16s but unconfrimed).  This is the first time that (officially that is) Rafales and F-22As will participate in a large joint exercise such as the Advanced Tactical Leadership Course (ATLC).  Al Dhafra is a joint UAE and USAF base and is the home of the majority of the Emirates F-16s and Mirage 2000-9s. The UAE Air Warfare Center was the very first tactical center to be set up in the Middle East. It has been developed by the UAEAF  to conceive  and evaluate combat tactics,  an especially important effort since the entry in service of large numbers of F-16s and 2000-9s. Al Dhafra AWC is very similar in goal to two other major tactical centers, Nellis  AFB  for Red Flag and  Florennes AB for TLP.

 
The goal of ATLC is to train forces in a multinational & large scale exercise environment and raise the interoperability and the combat effectiveness of the participating air forces by developing pilot leadership skills while improving improving tactics, techniques and procedures. ATLC typically lasts about four weeks and consist of large scale exercises and training sorties designed to specifically improve aircrew mission skills.   Week three of the four week exercise is typically  dedicated to large scale night exercises. 


So, this is a “routine” event,
not the sensational duel reported by Le Point magazine in France, and a good opportunity for participating nations to improve joint operations. Note: F-22s, although present, are reportedly not participating directly to ATLC after all. This is so far confirmed by The Dew Line. 


Revisit the very good flight test report from Peter Collins and read why Rafale is perhaps the best pure dogfighter currently in service. Our June 2009 research note is all about Combat Aircraft Market,  we remain very positive about  the Rafale outlook, with a market potential exceeding 300 aircraft to 2019,  more if it clinches the MMRCA deal in India.  However,  the Indian procurement is not necessarily logical, and still heavily bureaucratically impacted.  While Rafale is the logical choice for India as a combat asset,  the packages put together by Lockheed Martin and Gripen Team are quite impressive and attractive.

 

G2 Solutions and Teal Group to Present 2010 Forecast.  See Banner Below for information.



August 2009

Michel Merluzeau's Interview with NBC 5 Seattle (Click picture to launch the video)





July 2009



June 2009


UAVs and fuel cells

UAVs must have high persistence to be of optimal value. Especially smaller UAVs used by soldiers on an "over the next hill" basis. A 30 minute UAV does not help much - but 2 hours would be very useful. Powering these devices is complicated.

Ron Stearns, research director at G2 Solutions explains all about what why persistence is important in ISR. And why fuel cells are going to play a critical role in the UAV business.

Listen UAVs and fuel cells

April 2009

Michel Merluzeau addresses some of the issues facing Airborne Surveillance in a 20 minutes podcast with Addison Schonland of Innovation Analysis Group

 

The news from Somalia is getting lots of attention, but there are other hot spots like the Malacca Straights. Pirates are as dangerous and unpredictable as ever. The best way to keep track of maritime piracy threats is from the air explains managing partner at G2 Solutions Michel Merluzeau. Michel describes the problems and various aircraft in operation or under development and the kind of problems they need to solve. The piracy threat is not going away and the assets needed to mitigate against the threat cost much more than the pirates' equipment. This is not a happy situation.

Listen  Maritime surveillance in times of piracy

 

Gates Calls for a New Acquisition and Contracting Paradigm

Defense Secretary Robert Gates’ Monday, April 6 press conference offered surprises as well as some things long anticipated.

What seems apparent is an unwillingness to deal with decades-long procurement cycles, as budgets and threats are moving too quickly to maintain such a structure.  Part and parcel of this is a reset on programs attempting to leverage leap-ahead technologies - whatever they may be.  Gates’ comments on technology readiness should be taken seriously, as should his concurrent emphasis on a more rapid fielding of platforms and capabilities.  One needs only to look at the ABL and FCS programs as examples that strayed from these evolving principles.

Program cancellations, redirects and recompetes will continue to garner a great deal of press coverage; their impacts appear immediate to their constituencies.  Look for a change in contract structures, perhaps to include a greater number of firm, fixed price contract vehicles where appropriate, and look for more scrutiny on the feasibility of “productizing” technologies and delivering on schedule.

Gates has gone to great lengths to explain (time and again) that his decisions were made without regard to top-line DoD budgets or to their political and/or job related impacts. “I tell you as I said yesterday, virtually every decision that I announced yesterday I would have made regardless of what our top line was. If our top line had been $581 billion, I would have made the same decisions that I made and announced yesterday because they went to what should be in the base budget; they went to program a rebalancing of getting more of the irregular — the resources for irregular warfare into the base budget; putting a cap on programs where there was no military requirement for additional resources; and then killing programs where the budget was out of control or they were overdue or the technology was too great a risk,” Gates said in an April 7, 2009 Defense Media Roundtable.

On a “programs mentioned” basis, winners and losers are being singled out, and perhaps rightfully so especially when Secretary Gates called out the FCS contract vehicle in his April 6 News Briefing from the Pentagon: “Further, I am troubled by the terms of the contract, particularly in its very unattractive fee structure that gives the government little leverage to promote cost efficiency. Because the vehicle part of the FCS program is currently estimated to cost over $87 billion, I believe we must have more confidence in the program strategy, requirements, and maturity of the technologies before proceeding further.”

So, in the short term, Gates’ decisions on the following programs will positively or negatively affect the following companies, although Tier 1 and Tier 2 suppliers will also suffer/benefit:

1) VH-71 Presidential Helicopter reset and recompete:  Lockheed Martin

2) CSAR-X cancellation:  Boeing, Lockheed Martin and Sikorsky all competed

3) TSAT program cancellation: Boeing, Lockheed Martin

4) Cancellation of second ABL aircraft: Boeing

5) Multiple Kill Vehicle Program termination: Lockheed Martin

6) DDX to stop at three ships with likely reopening of DDG 51 line: General Dynamics likely hurt, Northrop Grumman to benefit

7) C-17 program, USAF ends acquisition: Boeing

8 ) Future Combat Systems, reset and recompete of vehicle portion: Boeing and SAIC

9) F-22, production to end at 187 aircraft as planned: Lockheed Martin, Boeing

10) MDA, evolving emphasis on theater and/or “rogue” threats: Boeing, Raytheon, Northrop Grumman and Lockheed Martin - with the theater emphasis likely helping Raytheon at the relative expense of others.

March 2009

COMAC 919, C-Series and KC-X: Traction or Inaction?

Three great topics - all containing a fair amount of uncertainty - with C-Series having finally turned a significant corner with the firm Lufthansa order.

COMAC 919

The Chinese aerospace industry continues apace with its plans to become a major regional and global player by the early 2020s.  That does not surprise us, as we have been on the record, especially during the great tanker hysteria of the summer of 2008 stating that China, not Europe was the main threat to the future of the US aerospace industry. What to think then of the COMAC 919?  Does one need to see this project primarily as an effort to compete directly with Boeing and Airbus?  We think that one the consequential aspect of the project will be direct competition with the two majors.  However, as with all things Chinese, one needs to look at long-term strategy, this long march (長征) towards the rise of the middle kingdom as a new industrial and political hegemon.   

Can 919 succeed?  The short answer is yes and no.  919 will likely establish a solid regional and domestic footprint,  garner a few overseas clients in countries linked politically and economically with the PRC, and will be used as a bargaining tool for trade negotiations and all sort of favors required by the communist government.    However,  we do not believe this aircraft can come close to what Boeing or Airbus plan to replace the 737 and 320 families.  This is not even close, so let's not go there. 

What COMAC 919 will be is a clean sheet design, perhaps a glorified C-Series or Superjet.  Western content will of course be extremely high with engines, avionics, electrical, and flight controls all provided by traditional players.  What COMAC will be as an organization is an integrator, not a manufacturer.  919 will not be a creator of technology, it will be a leecher;  very much unlike what Seattle and Toulouse have in mind (for 737/A320 replacement) which will be a considerable technology evolution.  P&W or CFM look set to supply either GTF or LEAP56 engines, and Thales and Rockwell Collins are in a strong position to garner the avionics and flight controls project portions. In fact, Thales might be in a better situation than Collins; its nose-to-tail approach may fit project requirements better. 

How many 919s could be operating in the world eventually?  If the aircraft is indeed successful, probably as many as 800-1000 919s could be flying the Chinese skies by 2026.  The rest of the world is an entirely different issue.

C-Series

C110/130 are no more, it's all about CS100 and CS300 now.  Yes,  some people I spoke to in the past year or so often looked confused when I asked about the C130 passenger version; these are simply name/numbers one should not reuse, and Bombardier got the message.  The firming up of the Lufthansa order,  something many were obviously expecting, is particularly timely in this environment given its significant psychological value to Bombardier and the industry. 

It also clearly sends  the signal that customers have relative faith in the design and timing.  It also sends out a much needed  message at the macro level:  this too (crisis) shall pass and BBD's timing will coincide with a definite up cycle.  In short,  there is light at the end of the tunnel and the sky is not falling.

KC-X Tanker

Unfortunately, we don’t see much light at the end of the oversized tanker saga.  Governments obviously do not function as efficiently as the private sector in most cases, and the tanker is one perfect example of inefficiencies and indecisiveness.  That the newly enshrined Obama administration decides to examine KC-X is perfectly reasonable, one can expect it. News of a planned 5-year delay is rather surprising and plays in favor of the Boeing company, or does it?

Let's assume that the Air Force customer has indeed changed its mind (very unlikely), or has been forced to (likely). A 5-year delay changes the equation entirely wherein we most likely say good bye to 767. In five years time, 767/764 will be a nearly 35 year-old design.  Think of it this way (a rather extreme example but rather telling), it would be like having the 1990 US Air Force buy 1955 KB-50 tankers.  Again, the example is extreme (and inaccurate to a large extend) , but why would the Air Force settle for a product at the end of its life cycle that will eventually prolong aging aircraft maintenance issues?  

Boeing can and will do better.  A 5-year delay could introduce two new pieces to the equation, both formidable competitors: KC-777 and the (highly) hypothetical KC-787.  This respite will give Boeing some time to refine engineering and develop the systems required for both aircraft.  Again, it all depends what USAF wants the aircraft to do (KC-X vs KC-Y) and KC-30 still remains a very strong, and mightily attractive candidate for the next five to ten years. 

Of course, we think the five year delay won't happen, so  may be let's forget about the above .  Boeing will likely push for it, but as noted above, unless the tactical situation has changed dramatically in the past few months,  USAF will want to push forward with KC-X and rightly so.  Launching a competition now means that at best, the first KC-4Xs will enter service in 2012-14.  The Obama administration will indeed have a lot of explaining to with its constituents and Members of Congress if it goes ahead with the decision to delay tanker another five years.  What has changed?  Not much in our opinion, so let's move forward please.

RAND Project Air Force: China’s Thinking on Escalation: Evidence from Chinese Military Writings.

Last year’s release of “The Challenge of Nuclear-Armed Regional Adversaries” (Ochmanek-Schwartz) contains a very interesting chapter simply entitled: “China’s Thinking on Escalation: Evidence from Chinese Military Writings.”

Here are some of the author’s most interesting comments as presented in their report:

  • The PLA’s current modernization efforts—in stark contrast to past activities—have been uniquely comprehensive, covering doctrine, force structure, and training and education.
  • PLA writings on war control tend to be very general and discursive in nature and provide limited insights into actual PLA behavior during conflict.
  • A prominent argument in Chinese writings about war control is that conflict is far more transparent in a globalized world, and, thus, it is subject to national and international limits—some of which constrain China and others that China would seek to use to its advantage during conflict.
  • Chinese writings also discuss certain military actions that pertain to containing warfare and creating favorable conditions for China to prevail.
  • Chinese writings also emphasize the importance of gaining the political and military initiative [争取主动] and avoiding situations that could put China in a reactive, passive, or defensive [被动] posture. PLA writings highlight how difficult and costly such control is to regain once lost and specify a series of steps to achieve and maintain initiative, including rapid reaction to incipient crises, quick deployments, strong standing forces, solid contingency planning, rapid mobilization of societal forces, a resolute political stance, rapid generation to wartime postures, and avoiding outsider intervention and the internationalization of the situation.
  • PLA publications suggest that the Second Artillery’s nuclear forces are postured, first and foremost, for deterring nuclear attacks on China and preventing deterrence failures (Second Artillery was chosen because the PLA has placed significant emphasis on it in recent modernization efforts; in particular, the Second Artillery’s conventional missile forces will likely be used in future contingencies such as those over Taiwan). For decades, this has been the main preoccupation of the Second Artillery: possessing a credible capability to deter nuclear aggression against China. However, if deterrence fails, PLA writings clearly indicate that the Second Artillery would conduct retaliatory strikes. It would do so, ironically, for the purpose of deescalation and, perhaps, war termination. Second Artillery nuclear operations are based on the assumption that China has already been hit with nuclear weapons, and some explicitly state that the Second Artillery is operating under “grim” nuclear conditions. Most Western analysts of nuclear affairs regularly and, to some extent, rightly, dismiss NFU (no first use) pledges as unreliable confidence-building measures.
  • A further challenge for the Second Artillery is how to respond to U.S. conventional missile attacks on Chinese nuclear weapon support facilities or actual nuclear-capable missiles. Under a narrow interpretation, such attacks would not constitute nuclear first use and, therefore, would not justify a Second Artillery nuclear counterattack campaign. Yet, the possibility of suffering a disarming first strike by conventional precision-guided weapons is clearly a source of concern for Chinese planners, one that is currently being debated in Beijing. This scenario directly calls into question the sustainability of China’s current NFU policy in the face of advances in U.S. conventional weapon technology.
  • China’s relative inferiority to the United States in both space and general conventional military capabilities may lead Beijing to consider offensive operations in space in an effort to counter the United States’ comparative advantages. According to an article in a leading Chinese military journal, “The party with inferior military space forces will be unable to organize a comprehensive and effective defense. It should therefore concentrate its limited military space forces on the offensive.”
  • It is unclear whether Chinese strategists recognize the inherent tension between their concept of using nuclear counterstrikes for de-escalation and war termination and the risks of inadvertent escalation.

February 2009

World Business and Personal Jets Avionics Market to Recede Through 2011, With Recovery Anticipated Around 2012



Our new research note "Personal and Business Jets: Market Analysis and Outlook" is now available.

The 48-page research note AB081 presents business jets and avionics market analysis, including a detailed avionics market and systems forecast from 2008 to 2020.

Business jets are essential, efficient and productive tools of the modern global economy, but the current economic and financial crisis places increasing cost pressures on owners and users alike. Major losses in the US and European economies will impact the immediate market outlook which could take five years to recover. Additionally, recent politicians & media mischaracterization about business jets has further affected the immediate outlook.

The new generation of aircraft introduced since the late nineties has been a productivity multiplier, enabling executives to reach customers and suppliers globally. At the core of this revolution, integrated avionics systems have grown dramatically in terms of their capabilities and reliability, providing unique operating reach to users while significantly improving safety. This nearly $2 billion annual market is witnessing rapid technology changes that few companies can master entirely.

"While we have seen Garmin (NASDAQ:GRMN) emerging as a strong player in the general aviation segment and personal jets markets, Rockwell Collins (NYSE:COL) and Honeywell (NYSE:HON) will maintain their control over the larger business jets categories. The only potential threat to these two companies may come from an established avionics player such as Thales (EPA:HO)," said Michel Merluzeau, G2 Solutions' Managing Partner.

While Honeywell and Rockwell Collins control well over 80% of the forward-fit market, Thales might capture 5-10% of this segment by 2020. Universal Avionics, Esterline CMC Electronics (NYSE:ESL) , L-3 (NYSE:LLL) and Chelton Flight Systems have respective technological and market strengths, but will find it difficult to migrate upmarket as technology evolution and OEM cost pressures will continue to increase.

"Universal Avionics will thrive in the aftermarket, but long-term viability is questionable based on its current structure and product offering," says Merluzeau. In the current environment, acquisitions could accelerate especially among those companies hurt by the Eclipse program collapse such as Avidyne and Innovative Solutions & Support (NASDAQ:ISSC). The report confirms that industry should brace for two to three very difficult years with deliveries expected to drop at least 30 percent.

In the News Review This Week

January 2009

DoD Releases Quadrennial Roles and Missions Review Report

A cursory read through this document speaks more to continuity than anything else, although the ordering, emphasis and importance of DoD Core Mission Areas and Core Competencies will provide the most enduring outputs.  Another interesting emphasis in the document could be called Operations Other than War, or the application of soft power, something that many interested onlookers have anticipated from the new leadership at the Pentagon.  To say that the application of soft power is new with regard to the GWOT would be a misnomer, as the strategy shift accompanying the “surge” in Iraq also involved an increased use of soft power to bring factions to the table.  If nothing else, this document alludes to an increasing of DoD responsibilities in stability and reconstruction.

Here is a brief look at Core Mission Areas and Core Competencies Core

Mission Areas:

1) Homeland Defense and Civil Support

2) Deterrence Operations

3) Major Combat Operations

4) Irregular Warfare

5) Military Support to Stabilization, Security, Transition, and Reconstruction Operations

6) Military Contribution to Cooperative Security

Core Competencies

1) Force Application

2) Command and Control

3) Battlespace Awareness

4) Net Centric

5) Building Partnerships

6) Protection

Our Winter 2009 Newsletter can be downloaded directly here

In the News Review This Week

December 2008

Rafale in Pole Position in Brazil

This race is probably the most promising for Rafale, despite formidable opponents, F-18E and Gripen, it looks to us that this is most definitely Rafale’s to lose. Brazilian president Lula’s comments (”I am very interested in this aircraft”) during his meeting with French President Nicolas Sarkozy underscore the strength of Rafale’s competitive position while Dassault’s chosen partner, Embraer is key to any contract going to the Brazilian military.

Will we see a different defense policy from the incoming US Administration towards Brazil? Doubtful. It is also unlikely that Brazil truly would find Washington to be a reliable defense partner in Brasilia’s own terms. The Indian “syndrome”, namely the US embargo on defense articles following the 1998 nuclear testing has left scars with many emerging powers; not only in terms of what it means as far as doing business with Washington, but especially how it led many to become increasingly reluctant to associate their national defense with US interests & conditions.

Markets considered safe in the past such as Thailand, Saudi Arabia, Kuwait and even Japan have already or are at risk of turning away from US products in favor of European or Domestic solutions. The ball is clearly with the US government; it needs to adapt, listen and accept more of our allies’ demands rather than impose them, otherwise the addressable market for US companies will continue to shrink. Singapore and South Korea were abnormal contracts by any commercial definitions, these types of wins will become rare in the future

Time for Northrop to act or risk losing KC-X

It is time for a Northrop Grumman all-out offensive to ensure that the political transition does not further degrade its tanker chances

With an Obama administration just around the corner, defense programs will be scrutinized over the next few months, with unavoidable ideological considerations getting in the way of immediate end-user requirements. This is the nature of politics and politicians, a combination often devoid of common sense and largely concerned with career considerations. Despite Robert Gates retaining his job, there will be some latency with key programs such as F-22 and KC-X.  Since the R. “Pontius P” Gates Tanker postponement move last September, KC-X has fallen below the radar screen with the notable exception of  Northrop Grumman’s ad in the Washington Post, which reportedly earned them a scolding from DoD officials (we won’t question the merits), leaving only recently the limelight to American Center for Progress (by name only).  Rep John Murtha’s (D-USMC) recent comments are symptomatic of the transitional lethargy that typifies any changes in administration. Despite being closely involved in major defense procurements, folks like Murtha love the grandstanding opportunities to make a point.  It is noteworthy how dynamic the incoming POTUS has been since elected while tracking some radical policy changes from the early days of his campaign.   In typical pompous fashion, Rep Murtha’s decision to wait a few more years for KC-X will bring smiles in Washington state (our neighborhood) while it might raise some concerns in Century City. 

Time is exactly what Boeing needs to further develop a competitive solution.  Since we think Boeing’s best bet at this time is to move with 767-400 to counter A330, this delay will help Boeing optimize the airframe for the tanker mission and give them a much stronger shot at winning the prize.  The bigger 767-400 has not shined against A330 in the commercial world, but again, we are not dealing with commercial issues when it comes to the tanker mission, something that both bidders need not to forget.  

In short, we think Northrop Grumman is at risk of losing the initiative, and thus losing KC-X even before the new RFP is being issued.  An EADS win will be politically unacceptable for an Obama administration, especially at a time where the US economy is being hit by the most severe recession since the 1920s.  President Obama risks an open rebellion if he allows another Northrop Grumman/EADS win.  Even if the EADS footprint grows in the South and helps the US economy greatly, the selective media distillation of the story will always portray Boeing as the victim and Northrop Grumman as the villain. 

Journalists often have a way of selectively reporting information that suits their agenda rather that reporting information objectively.  While on the topic of journalists, let’s quickly mention the Flight International incident last week, which will undoubtedly be used by Northrop/EADS opponents to argue the case that EADS cannot be trusted with some DoD work, which is an oversimplification of course but makes for great media headlines.

Now Boeing has a unique chance, after losing the competition twice already (once was not on the merit of the solution, the second time was), to finally maintain control over USAF tanker program and put a serious dent in the EADS North American expansion plans.  As the French say “Jamais deux sans trois”, but this delay will be especially welcome in Seattle.  764 is a much stronger and capable aircraft, one that might be good enough to make this round even closer than the last one.  Hopefully, USAF will proceed with a fly off, so that concerns about both aircraft can be addressed and real performance data can be presented to decision makers.  If Boeing does indeed proceed with 764, we see the chances of a split significantly decreasing, as the narrowing of the aircraft performance would make a split even more unattractive to the customer.  

With Boeing fixing the 787, a program still mired with significant uncertainties in our opinion, the 767 might be the only option for a while.  Now what can Northrop do to ensure reasonable chances of winning?   It basically needs to continue pushing the issue on the Hill, ensuring that the message about KC-30 is clear and perhaps migrating more work in states that have been traditionally friendlier to the Boeing company (just a little note of fantasy, it would be interesting if EADS migrated work in the Seattle area).  Perhaps Northrop could also use some time, from a political standpoint, as there is no way to predict what the next round of elections are going to be like.   Although the democrats are on a high, the cyclicality could be abruptly down in the next round of elections if the GOP can get its message right (doubtful) and if the recession continues to drag well into 2010 (possible). This, when coupled with a few geopolitical hotspots could mean some serious troubles.   This does not suggest that a Republican congress will significantly enhance Northrop’s chances, but it is noteworthy to state that no Democratic members of Congress have really been vocal about supporting Northrop Grumman, perhaps with the exception of the representatives from the LA Basin who might have paid lip service to this issue when in fact they should have been more vocal in their support for the local player.  

Can Northrop push a lease option?  Perhaps this would be an interesting option to get USAF to sign on as quickly as possible, however, the risks and cost to the end user are significant.  The other option on the table might come from NATO, but the economic slowdown is going to put a serious dent in major program decisions.   

Boeing has regained the initiative and can be better prepared for this third round of the KC-X competition.  Overall, we think they have the right mix at this time.  Northrop Grumman only has the best aircraft.  

Here you have it, it’s all about the politics and that makes it even more illogical.

 

October 2008

Is there a future for the Aerospace industry in Washington State?  Of course there is, but it will take vision and commitment from all sides to slow down the current tide  

The Boeing post strike debate is going full speed by now.  We have given our views to several media outlets about what we believe is the essential take away from the third longest running strike in Boeing’s history.  To summarize it simply, we think this is a strategic win for Chicago (although their spokesman likes to insist that nobody wins in those affairs).  Unions have obtained important concessions, some of which are undoubtedly big wins for their members; however, when all is set, measured and done they won a small victory with the micro issues, whereas the corporation has won the macro battle.  

Now some in the industry (hello Richard) are predicting a bleak future for the Seattle area aerospace industry and I quote him in his latest monthly letterAircraft clusters are fragile” and” The Puget Sound aviation cluster won’t be moved in one giant piece; rather, like every other ex-cluster, it will disaggregate." We do not fundamentally disagree with Richard at all, in essence, the strike has further damaged labor/management relations and reignited an already intense debate within BCA on which type of business and production models would better serve the organization in the future.  
So, what about those clusters that everybody seems to be so interested about?  Aircraft design and production is faced with two major issues: an overall increasing division of labor and rising global competition within the next two decades.   Aerospace clusters as we know them now will remain; it is their shape and role within the greater aerospace marketplace that will be reshaped by market considerations and programmatic decisions. 

The Seattle area aerospace industry will not disappear, I am prepared to bet on that.  However, its shape, role and overall importance within the Boeing organization will certainly change considerably over the next two decades.    The 787 model has taught us a few very interesting things about aircraft manufacturing, the most important being that it takes a fair amount of highly skilled individuals to put together the many parts that fly you and me closely in formation to whatever our destination may be.  Lesson # 1:  an experienced workforce is an incredibly valuable asset, lesson #2:  to reassemble it somewhere else is a momentous, time consuming and expensive task. 

That is why Boeing will act prudently about the direction (physical and business) it wishes to take about aircraft production.  This is not trivial at all, some would say you can find machinists and engineers many places in the US and the world: true, but the concentration and talent found in those clusters is hard to match and is invaluable to any organization, plain and simple.   What is at risk for the Seattle Area?  For now and the next 5-7 years not much should change. Boeing has a healthy (albeit moderately inflated backlog for its 737NG and production for 787 will ramp up from late 2009.  Now, is there life for the Renton site after 737?  The best answer is that we do not know, but the answer is: probably not as much as there is now.  

How Boeing will handle its next generation narrowbody and 777 replacements is up in the air right now.  There will be a fair amount of outsourcing for sure, but I would expect Boeing to bring back a significant amount of engineering and design in house to ensure that programs do not experience the glitches encountered with 787.  In all, yes, Boeing’s footprint in the Seattle Area will shrink but it will transform rather than disappear.  It will ultimately be a more balanced organization in the area with, on one end, production and assembly shrinking as work migrates out of states, and one the other end, fewer workers required to assemble the aircraft as new integration processes change the way Boeing builds those in its Seattle area facilities.  Results: increased efficiency+distribution of labor=fewer workers=reduced footprint=leaner assembly process. Design/engineering/flight testing will stay here for the foreseeable future but some additional component production, if not the final assembly altogether, might migrate toward "preferred" southern and central states as well as Boeing overseas’ partners.

It is also up to Federal and State politicians to ensure that a conducive business climate, one that is lighter on bureaucracy, reduced union influence, taxes and regulations, encourages Boeing to work with WA and US partners.  If WA can rethink its business climate, then Boeing might not be the only company willing to expand its activities in the Pacific Northwest. The status quo, "them vs. us" is simply not acceptable.

mmerluzeau@g2globalsolutions.com

The Week in Review:  October 6

Boeing still on strike:   Boeing and the machinists union agreed to return to the negotiating table in an effort to end the now 36 day long strike. So far little to no progress is to be reported. 

NBAA 2008:  Attendance was marginally lower than in 2007 in Atlanta but overall the business aviation pulse remains strong.  Focus will be on execution in the next few years as the financial meltdown resulting from the global credit crisis will eventually impact business aviation.

Gulfstream introduces the G250: The battle for new midsize is on, The G250 promises to deliver strong range and speed performances (3,400 nautical miles at Mach .80) with one of the largest cabin in its class.  G250 comes standard with the now bug free Honeywell PlaneView250.

Eclipse's minimalist presence in Orlando:  Eclipse's presence was noticeably reduced from the previous years of lavishness, irrational exuberance and glitz.  Only two aircraft and a small reception desk made for quite the spartan approach at this year's NBAA.  Eclipse is logically cutting on cost in an effort to survive, which is still debatable at this point.

Lockheed VH-71 First Flight:  The first flight of an operational pilot-production example  has taken place at the  AgustaWestland factory in Yeovil, England, on September 23. The aircraft will be flown to NAS Patuxent River, MD for modifications.

Taiwan needs for additional F-16s ignored by US?   The US DoD has announced  plans to sell 30 Boeing AH-64D Apache Longbow helicopters worth $2.5 billion, upgrade packages for Taipei's four Northrop Grumman E-2C Hawkeye AEWC aircraft, and spares for the RoCAF Lockheed F-16A/B and Northrop F-5 combat aircraft.  Regrettably, still no progress is reported with the sale of additional F-16s.  Taiwan might therefore have to look elsewhere for new aircraft.

Next week:  Focus on an Obama administration:  with polls now clearly favoring Senator Obama, we will take a look at his Defense platform and potential players in his administration.

September 2008

Back to square one

The decision to cancel the KC-X RFP altogether is a significant blow to USAF and may inflict serious damage to  Boeing-Air Force relations for decades. This cancellation also means that a winner will likely not emerge until 2010 at best and that the first KC-45 tankers will most probably enter service around 2015. The future of Mobile as an aerospace hub is also in doubt for the time being. Boeing's fought hard to maintain its monopolistic position in North America and seems to have won a significant battle for now.

Secretary Gates' decision is first and foremost a political one.  It removes a potentially (although incorrectly identified as such) damaging issue for Senator John McCain ahead of the November election.  Although the democrats will be able to use John McCain's role in the cancellation of the first KC-X award, it gives Boeing's supporters in Congress a weaker case to argue.   What Gates' decision also does is reinforce the view that the acquisition process is no longer functioning in the best interest of the customer; in short, politician’s special interests and roles must be reduced to a more objective and realistic level, otherwise warfighters will continue to be penalized.

It is clear to us that KC-X part 3 (or whatever USAF decides to name it) will not be easier especially with a potential Obama administration who is seen to favor the Boeing bid and whose position on the issue has followed a disappointingly partisan line.  Whoever leads our next administration needs to make this program an absolute priority.

Boeing's options are still limited but somewhat improved, however, it is undeniable that Boeing can claim much from SecDef Gates' decision:

- A win:  BA has won a reprieve to prevent Airbus from establishing a production footprint in the US.  This was the key issue.

- Time to propose a revised tanker aircraft if the RFP is not radically altered:  either 764 or 777 are the most logical options now

- A way to further influence the requirements of the customer

While Boeing is clearly getting a last minute break, Northrop Grumman can also further polish the offering and make KC-30 an even stronger proposition.  If USAF decides to proceed with only a slightly revised RFP, NGC and its suppliers can put forward the A330F version and give the aircraft more range and fuel offload capabilities.  The question of GenX re-engining has been addressed before and we do not believe this is yet an option for USAF, although this might eventually change.

For Boeing, the choice is now about the aircraft that will lead the company's third attempt at winning the program.  We however do not believe that USAF requirements will change so dramatically that suddenly 777 will become a perfect shoe in for KC-X.  It never was.  777 is 45% larger than KC-30, it is more expensive, it needs more ramp space and runway requirements are significantly higher than 767 and 330. 

The critical element in all this is that USAF needs to forget about the past.  The only way to avoid feeding future protests is to make very clear that this will be an entirely new contest, and a capability replacement program, not a platform replacement.  The Air Force can then clearly define what it wants from the tanker based on needs and not based on suppliers 'own definitions of what tanker should be doing. The comparative KC-135/KC-767 has plagued the entire competition and has given Boeing critics plentiful ammunition.  At this point, the subject of which aircraft will be better suited becomes irrelevant until the new RFP is available.  It could make 777 the perfect fit, or even A340 or A350 for that matter. As we said, Pontius Pilate lives and his name is Robert Gates.

The Week in Review:  September 5

Unresolved contract issues at Boeing:  A strike will be costly for everybody.  Boeing will lose in the area of $100-$120 million per day, 787 first flight will be delayed to 2009 and with the Seattle Rain Festival running for most of Q1, this might have an effect on flight testing albeit a minor one.  The big losers in this strike will be the unions.  Striking will only rightly encourage Boeing management to proceed with plans to consider alternative sites for the NextGen Narrowbody program and even consider subcontracting larger portions of the work to Japanese suppliers.  The 787 assembly model, despite all the initial problems makes clear business sense and will eventually work out just fine.
 
Bombardier's results, back in the black:  This is good news for the Montreal region however, Q400 sales are a direct consequence of oil prices, and not so much due to a visionary market strategy on the part of Bombardier.  Still one can only appreciate the irony, a few years back pundits were already preparing for the end of the regional turboprops.  Not yet.
 
The SAAB Gripen team offer to the Koninklijke Luchmacht:  That is a seriously disruptive offering right there.  Sure, Gripen is nowhere near F-35 projected capabilities over time, but do the Dutch really need it? It all comes down to the role the Netherlands expect to play in the future of the alliance and what makes good sense from an industrial standpoint. Gripen has strong potential in several markets, but the Dutch will be better off overall sticking with F-35 over the long run.
 
US Presidential elections:  an article in DoD Buzz has outlined some of the priorities of the Obama campaign.  A quick analysis of this article leads us to conclude that there is far more to worry about  in an Obama administration in terms of political and bureaucratic interference. Few names impress us in that team with the notable exception of the excellent Pierre Chao and of course, Dr. William Perry.
 
Mitsubishi and Boeing joint efforts on the MRJ:  this shows us that the Japanese manufacturer gets it.  If, as we expect they turn out a really capable regional airliner, coupled with Boeing’s unique capabilities and customer reach, this will certainly put some serious pressure on Bombardier and Embraer.  The CRJ-1000 will likely be the first victim.
 
And finally, everybody's favorite topic,  the tanker program:  Anything worth mentioning this week?  Yes, the comments from AMC CO General Lichte: "We need a new tanker now. I don’t care which one it is. And we need to get on with this quickly.”  This is a welcome statement and also perhaps sends a message to Boeing not to expect an additional six months to put forward a new aircraft.  It is clear that USAF has priorities driven by the realities on the ground, or the air in that case.
 
This just in:  the Boeing strike is on.  This could mean bad news for the future of the Seattle workforce.

August 2008

 

July 2008

Chinese  Long Term Naval Strategy: Bases in the South Pacific?

The ever expanding influence of China as a political and military force is often mentioned as an issue of concern when it comes to the Taiwan strait. However, the Chinese are also attempting to expand their military sphere of influence, further sharpening the disconnect between their "stated" intentions and real world facts. With France increasingly looking to disengage from its former colonies in the Pacific, Tahiti and New Caledonia by 2015-2018, China has actively begun to influence politics and politicians in the area.

While the US is keeping watch on the situation, a CRS report in 2007 lamented: "Some experts suggest that the United States should pay greater attention to or more directly engage the Southwest Pacific. In some Pacific Island countries, weak political and legal institutions, corruption, civil unrest, and economic scarcity could lead to “failed states” and/or become springboards for terrorism". Additionally, the report states that, "Some specialists argue that China’s main objectives in the Southwest Pacific are to check and reverse Taiwan’s diplomatic inroads and to garner influence but not replace the United States as the regional hegemonic power. Others argue that China has devised a comprehensive strategy to take advantage of waning U.S. interest in the region since the end of the Cold War, especially in Melanesia."

Those statements would be anecdotal at best if this were just another report concocted by some talented analyst buried somewhere in SE. DC. However, facts on the ground, particularly in Tahiti suggest that there is indeed a concerted Chinese effort to become, over time, the leading island trade and political partner, taking over from France. China is particularly interested in gaining access to Papeete's port facilities, currently used by the French Navy and Faaa's 11,000ft runway. Combined with increased trade, China will continue its effort of corrupting and buying local officials in the autonomous French territory. France and the US in particular must pay particular attention to this worrisome development.

C-Series: Soft Launch

Bombardier's Farnborough announcement came as a surprise to no one.  This was basically the only "prestige" venue available to Bombardier for a launch in 2008.   The surprise, and frankly our disappointment, comes from a borderline mediocre product launch.

What is this limited LoI (letter of Intent) from Lufthansa telling us?  Are operators waiting for a frozen configuration before committing? Quite possibly.  Are Chinese companies going to announce orders toward the end of the year? This is a likely scenario.

Launch orders are indicative of many things; however, the apparent lack of enthusiasm for the product at a trade show must not be interpreted as a definite sign of product weakness.  This does not apply to the C-Series, which has all the ingredients to become a relatively successful product.  However, C-Series’ “poor” showing at Farnborough might be due to a few issues that Bombardier needs to address.  There are elements completely outside of Bombardier’s control such as potential US airline customers’ precarious financials. It might take a couple of years before we see orders from US companies based on a still speculative recovery curve. 

Bombardier is especially taking risk with its Chinese partnership, and this move is possibly dissuading some customers from moving forward at this point.  Consequently, there might be a fair amount of wait and see from the marketplace to assess how Chinese suppliers initially execute their workshare.  This waiting period will help establish a comfort level, if any, on this issue. While we think Bombardier (BBD) is making a fundamental mistake outsourcing the work to Shenyang, this is primarily a financial decision; BBD does not have much choice if it wishes to move forward in time with the program. However, if execution on the part of Shenyang is not on par with expectations, the consequences for the program could be serious, as is the transfer of intellectual property (IP) to a likely future competitor.  Chinese companies have a poor track record in this area and will likely continue to violate agreements despite assurances to the contrary.   

Second, there might be some leftover PR damages from the Q400 saga last fall. Despite being vindicated on the issue, BBD has some ways to go before customers' full confidence in the company is restored.  Furthermore, BBD needs to work on improving supplier relations if C-Series is to run as smoothly as possible, as there is still plenty of discontent from suppliers working with Bombardier on other programs.  Indeed, it is the supply chain that will make or break this program; Bombardier has the right product concept and the market should respond positively. C-Series can move the company to Tier 1 supplier status but there is little built in margin, perhaps a year, at most two to fully maximize the entry into service  (EIS) opportunity window.

C-Series is also largely dependent on the success of P&W’s GTF engine program; if all works well, then we have a winner.  If P&W experiences delays or problems (quite unlikely) with the engine, then the C-Series opportunity window will evaporate and get pushed closer to other OEM aircraft entry in service dates.   Any delays could then intensify the competitive environment and lead to order losses for BBD. 

While Rockwell Collins selection was expected, its Fusion is a very impressive avionics suite, we are surprised that BBD has not selected Thales for avionics and flight control systems.  Thales has a strong nose to tail solution in that domain, and the presence of Thales Canada in the Montreal area could have been a benefit to BBD during the program development and testing phases.

Finally, it is also likely that the marketplace is waiting to see what Embraer is prepared to do in response to C-Series.  Despite all the “vagueness” coming out of São José on the issue, we do not see Embraer sitting idle and conceding this market segment to BBD.  Bombardier has opted to target a specific market segment (100-145 pax); it is possible that Embraer will decide to focus on a higher capacity aircraft together with another (European) partner. 

Embraer also has the advantage of being able to respond with a design that may benefit from advances in technologies if it chooses to wait for the second half of next decade to introduce its new product.  Overall, we think that Embraer’s response to the C-Series could be a much stronger offering and we have more confidence in Embraer’s ability to execute a new program if it partners with established aerospace OEMs in Europe and North America.  Additionally, and despite the potential of the C-Series with US carriers, few have expressed strong interest for the aircraft and are instead planning to procure additional 737s/320s to replace older MD-80s-DC-9s types.  This current approach provides airlines with enough operational flexibility as the market eventually recovers from its current downturn.

The key positive from the Farnborough launch is Lufthansa. Bombardier might yet announce further airline commitments in the near future but to gain the initial backing (as expected) from a well established and solid operator such as the German airline was indeed critical to the overall program initial perception.

 

June 2008

Now what?

GAO has spoken, but we are still no closer to a final resolution of what is best described now as the tanker soap opera. 

While we felt the Boeing protest had indeed several merits on the technicalities, we still believe a lengthy recompete is unnecessary and might actually lead to further legal complications that would further delay the delivery of these critical aircraft to USAF.

If there is indeed to be a recompete, KC-30 remains the more capable aircraft when compared with KC-767.  However, some have hinted that Boeing would now offer the 777, which could be a very attractive option to the customer, albeit perhaps too much aircraft for the mission as currently defined by USAF. (Perhaps a reason or two why 777 was not offered in the first place).  Let’s not forget that the issue at stake here is goes beyond the lucrative tanker contract and is actually an extension of the Boeing-Airbus turf battle.

Some will now argue, and perhaps we share most of their feelings, that Boeing won a political battle while not proposing a product to the customer that could equal A330 mission performance... When one examines the GAO decision, it remains clear to us that our evaluation of the contest in December 2007 was indeed close, let’s look at the five criteria as presented by USAF:

Mission capability:  This is the key criterion and USAF was reportedly not entirely clear with this metric.  If USAF decides to rewrite those metrics, it might lead to more confusion and feed future protests.  However, it also is clear that the customer perception of mission capabilities was perhaps altered for the better during the competition.  While USAF might need to tweak this to reflect lessons learned, how it will proceed with the evaluation will remove any doubts as to which company has the better product.

Our view:

  • December:  KC-30 Wins

  • Now: KC-30 wins the recompete

Proposal Risk.  USAF found that the two proposals had a similar level of risk.  Risk can be based on technical approach, estimated cost, teaming arrangements and all factors that can intervene in the overall risk perception.

Our view: 

  • December: KC-767 Wins

  • Now: KC-767 wins the recompete

Past performance: Boeing lost to the Northrop Grumman-EADS team. The simplistic argument that Boeing has built the majority of the current tanker fleet cannot be entirely used as a past MOP. It appears that GAO had no significant issues with how the Air Force applied this criterion.

Our view: 

  • December: Northrop Grumman slightly ahead

  • Now: Northrop Grumman wins the recompete

Cost/price: This is apparently where USAF made several mistakes with cost estimates and life cycle costs.  A recompete will be instrumental in devising better cost measurements and strategies.  This is Boeing’s Achilles heel in spite of public proclamations on A330’s increased fuel consumption over the life of the weapons system.

Our view: 

  • December: Northrop Grumman wins

  • Now: Northrop Grumman wins the recompete

Integrated Fleet Air Refueling Assessment:  Boeing will say that this was applied unrealistically.  However, USAF scenario modeling will remain classified for obvious reasons and GAO is unlikely to have shed valuable insight.  Even if IFARA modeling was partially flawed, USAF’s response to GAO on the issue in May was perfectly reasonable, and while numbers can be manipulated in favor of either platform, realistic scenarios will be crucial, as they will demonstrate that tanker ops in the pacific will require a longer range, heavier aircraft such as KC-30 or KC-777.

Our view: 

  • December:  Boeing Wins 

  • Now: Tie   

What can USAF do now? Ignore GAO?  This perhaps would set a dangerous precedent going against the best interest of future procurement processes.  Split the award between the two bidders?  This option might eventually materialize. While involving significant added costs, a split buy may have proven a way to avoid all this government waste in the first place (see our January entry on the topic).

The Boeing camp has won a significant battle, as we had mentioned earlier in March, Boeing’s reasonable points have proven valid to GAO, but again, those are technicalities with the procurement process, nothing to do really with which aircraft is better suited for the mission.  USAF needs to move quickly with a recompete and provide all resources necessary to announce a final selection by end of 2008.  Neither Boeing nor Northrop Grumman should continue to receive funding until a final decision has been made.

 

 

 

USAF B-2 Mishap Report and Accident Video

 



Summary of Report from ACC

 

May 2008

 

USS Truman Temporary Residents

US Navy Video

 

 

A350 overweight, so what?

There is something fundamentally wrong at times with some elements of the media. A recent story in the German press claims that the A350 is about eight tons over initial weight targets.  While this come as no real surprise to us, it however is not the weight problem that really is interesting, but the increasing voracity of the media to jump on any story for the sake of a story.  News travel very fast in the internet age, and what was previously considered anecdotal is now positioned as news with little to no analysis or research behind it.  As for A350, now 6-7 years from her entry in service, it is somewhat expected that initial designs would come higher than planned.  If the aircraft is indeed suffering from weight issues, Airbus will now work with suppliers to find ways to meet more aggressive weight targets while making the necessary improvement with the aircraft carbon fiber fuselage barrel design. With oil hopefully at half its current price around 2015, aircraft weight might not be as critical as it is now... Time to take a longer term perspective, not just with 350, but also with C-Series, MRJ and the rest...

 

A reminder of what lies ahead for Airbus, Bombardier and Boeing...

 

It will take some time for the Chinese aerospace industry to get up to par with western standards and manufacturing efficiencies and procedures.  However, G2 Solutions' experience with China leads us to suggest that the ramp up will accelerate, and that it will much faster than what some might have suggested in previous years.  While we are not talking of dog years,  we would not be surprised if China makes an attempt to develop that 150-200 pax aircraft by the end of next decade to propose a solution, albeit inferior to Airbus and Boeing's new narrowbodies.  Even if by that time China is not able to compete on the same levels in terms of evolutionary technologies and especially will lag behind in terms customer support and service, price positioning will allow them to take some minimal market share away from Toulouse and Seattle in what we believe will initially be "political" purchases.  With the Chinese government able to exert political and financial pressures on potential buying countries, the Chinese domestic market alone will support product growth, with the real threat materializing between 2025 and 2030.  By that time, Alabama will look like a real nice place to live and work...

 

April 2008

Guessing Game...

With all the talk about Airbus and the GTF option for the 320 upgrade, here is a slide we put together early last fall to discuss some of the options available to the two major aircraft OEMs.  Some of the terminology might have changed since, but it clearly highlights, in our opinion, that Airbus might have the upper hand as far as the timing of upgraded/new products.  However, as we all know, what looks good and promising now might be an altogether different story in five years time.  With an economic slowdown clearly affecting the market, Boeing might be able to delay the 737RS enough  to match the new Airbus narrowbody innovations.

 

 

 

Northrop Grumman awarded BAMS contract  

DoD Announcement:     

The Department of the Navy announced today that the Northrop Grumman Corp. has been awarded the system development and Demonstration (SDD) contract for the Broad Area Maritime Surveillance Unmanned Aircraft System (BAMS UAS).   The BAMS UAS contract award is the culmination of a year-long source selection process since the Navy received industry proposals in May 2007. The $1.16 billion cost-plus-award-fee contract is to develop a persistent maritime intelligence, surveillance and reconnaissance (ISR) data collection and dissemination capability that fulfills the maritime war fighter's requirement for continuous battle-space awareness.  The BAMS UAS will be developed using Northrop Grumman's RQ-4N platform.  "This announcement represents the Navy's largest investment in unmanned aircraft systems to date.  The extraordinary efforts leading to this announcement have helped the BAMS UAS program begin to develop a persistent ISR capability never before available to the fleet," said Capt. Bob Dishman, program manager for the BAMS UAS program. "This is a significant milestone for the BAMS UAS program, concluding a deliberate and meticulous source selection process that adhered to stringent Federal Acquisition Regulation and Naval Air System Command source selection processes and documentation requirements."  The BAMS UAS is an integral part of the maritime patrol and reconnaissance Force. As an adjunct to the P-8A Multi-Mission Maritime Aircraft, the BAMS UAS will provide persistent maritime and littoral intelligence, surveillance and reconnaissance to joint forces and fleet commanders worldwide. This capability will enhance battle-space awareness, improve force projection capabilities and protect and defend the fleet and the nation.

The Last of the Bandits

Today will mark the end of major era of military aviation history.  F-117A will officially be retired at ceremonies at Holloman AFB and Palmdale, CA.  The four ship flight will then head north to their original base on the Tonopah test range, in the North West corner of the Nellis Range.  There, they will stored in the original hangars that were built in 1982 to house the first operational 117 squadron.  With the entry in service of F-22A and other exotic new manned or unmanned platforms, the days of the Nighthawk were indeed numbered.  Here are some of the individuals who had a significant role in the emergence of the first operational stealth aircraft in the world:

- Ben Rich, Lockheed Aircraft
- Denys Overholser, Lockheed Aircraft
- Dr William J. Perry,  Former DoD Engineering Chief and later Secretary of Defense
- Senator Samuel Nunn, Jr.,  Chairman of the Senate Armed Services Committee

and many more...

 

 

Two KC-10s, the Moon and a PDLCT

This is not the title of a new Chronicle but rather an interesting airborne combination courtesy of NATO air forces joining in the skies over central Asia.  The Mirage 2000D crew has got some interesting creative flair...Almost looks like those two USAF KC-10s are on their way to the moon.

 

 

It's a long Road...

There’s no question the elusive first Rafale export sale is getting closer and closer but the buyer seems to be changing every six months.  Morocco collapsed last year, Libya emerged as the next likely buyer shortly thereafter, but since then things have gone very quiet.  Russia has reportedly offered a deal to Libya for a squadron of Su-35 including a full weapons package. This could be an advantage since France has apparently not included MICA in the pending Rafale transaction.   Recent information circulating in the French media is now suggesting that the UAE is at an advanced stage of negotiation with Dassault for the procurement of 20-30 Rafales to replace or complement its fleet of remaining Mirage 2000s (upgrades near completion) and 2000-9s (Bader 21 agreement). The deal could also involve the transfer of the 2000s to a potential buyer with India reportedly expressing strong interest.  It however remains unclear as to which aircraft will be sold.  Transferring the 2000-9s to India would be a strong signal that Delhi is leaning Rafale for the MRCA tender and is using the -9s as a bridge to Rafale since both aircraft share common modular avionics and some other systems, including part of the weapon system.  To date India has only expressed interest in upgrading its 2000s to the -5 standard; procuring -9s would lead to a hybrid fleet of 2000s, however a switch to -9s could perhaps be on the table (the 2000-9 is a suped up -5, the type difference is not a stumbling block).    It is also not clear if the UAE AF would decide to keep some of the newer -9s and sell the remaining aircraft to India.  Judging by the recent announcement that France will have a permanent base in the UAE soon, this bit of news seems rather logical and perhaps represents the strongest Rafale lead since…ever.  With the rumored announcement of a Greek AF buy for a squadron of Rafale reportedly imminent, this could be the year Rafale makes it to the big league.


                    Photo:  Dassault Aviation


GAO Report:  Defense Acquisitions: Assessments of Selected Weapon Programs

From GAO :

This report is GAO's sixth annual assessment of selected weapon programs. Since 2000, the Department of Defense (DOD) has roughly doubled its planned investment in new systems from $790 billion to $1.6 trillion in 2007, but acquisition outcomes in terms of cost and schedule have not improved. Total acquisition costs for major defense programs in the fiscal year 2007 portfolio have increased 26 percent from first estimates, compared with 6 percent in 2000. Programs have also often failed to deliver capabilities when promised. DOD's acquisition outcomes appear increasingly suboptimal, a condition that needs to be corrected given the pressures faced by the department from other military and major nondiscretionary government demands. This report provides congressional and DOD decision makers with an independent, knowledge-based assessment of defense programs, identifying potential risks when a program's projected attainment of knowledge diverges from best practices. The programs assessed--most of which are considered major acquisitions by DOD--were selected using several factors: high dollar value, acquisition stage, and congressional interest. This report also highlights overall trends in DOD acquisition outcomes and issues raised by the cumulative experience of individual programs. GAO updates this report annually under the Comptroller General's authority to conduct evaluations on his own initiative.

The report can be accessed here

 

 

A few interesting articles have caught our attention lately.  The first one, published in Airline Business is a remarkably rational piece from Doug Parr, Greenpeace's chief scientist.  His point about biofuels cannot be contradicted; it's a fact, they will do more harm than good.   The environmental zealots mafia litigation lobby now needs to come up with practical solutions besides "airplanes are bad", and moderate their (ideological not factual) view that global warming climate change is primarily due to business and commercial aviation growth.  The solution lays with scientific research, and from our point of view, it begins with more aggressive MPG for every car in the Western World,  a minimum of 35-40 MPG by 2015 seems reasonable enough.

Then there is this article in Human Events which raises a very troubling point if indeed correct.  If, as suggested by the article, the Integrated Fleet Air Refueling Assessment (IFARA) model is partially flawed, this might have helped KC-30 and penalized KC-767. We do not have the details and the AF most likely has a reasonable explanation, but this could have some traction, though probably not enough to reopen the competition.

General Chuck Horner (USAF Ret) often brings clarity to complex situations. He proves it again with this (refreshing) piece for NR Online.  We do not entirely agree with him about France's intentions vis a vis the CFM-56 engines. Commercial considerations and the fact that a good chunk of the A320s flying in the world since 1988 use that engine are the key reasons for France's "good behavior".  Add to this the fact that the entire KC-135FR fleet in service with the French Air Force also uses the above mentioned engine.  The list could go on and on.

The article can be found here

This week's edition of the Thud Factor is available here

 

Inside look into a RTO sequence (courtesy of a patient Airbus flight test aircrew)

 

 

March 2008

This week's edition of the Thud Factor is available here

Veritas Liberabit Vos

Graham Warwick of Flight International recently listed this "bipartisan" blog about the tanker program. This site does little in terms of new and/or pertinent information.  Still, we would "recommend" it as a read for those interested in trying to understand how some on the Hill and K Street are trying to influence or interpret Boeing's protest. 

http://tankerblog.blogspot.com/

 

The Center for a New American Security (CNAS) and Foreign Policy Magazine Health and Future of the U.S. Military Survey Results

Very interesting & revealing read (click on image to be redirected to Foreign Policy's website)

It’s getting crowded at the top

Gulftsream’s G650 announcement introduces yet another airframe at the top end of the business aviation market. The range is an impressive 7,000 NM at .85 Mach and 5,000-NM at 0.9 Mach.  This all looks very good but speed costs money, and the DOC/hour of  the G650  is likely to be around the $3,500 mark (perhaps more).    Competition with the Global Express will be interesting, but might come down to a matter of personal requirements, not necessarily comparative aircraft performances. One of the most notable pieces of news coming out of this announcement has to do with the selection of Thales for the design of the Fly By Wire system,  perhaps Bombardier will read the signs here.  Now Gulfstream can also work on their website loading speed too…

Of Politicians, Tricycles and Professionals…

As the tanker saga continues we are tempted to drop the topic from this blog altogether. However, comments we hear in the “news” media and from Capitol Hill might give Jay Leno and Jimmy Kimmel some interesting competition.  In all seriousness, the storm is gathering strength and the aftermath of the competition is seemingly losing all elements of logical thinking. It is regrettable that the Boeing protest is driven mostly by complaints related to technicalities in the USAF selection processes. It looks increasingly like this is being managed by a group of lawyers  advising BA that the only way to overturn the NGC win is to show how USAF made mistakes in changing requirements during the competition.  We are in no position to judge if Boeing’s strategy has legal merit (we think it regrettably might).  

What is conspicuously absent from the whole debate, and especially from the media comes down to this simple question:  What is the best aircraft for the warfighter to execute this strategic, long-term mission (and give US forces an advantage when our Beijing friends get their own tricycles over to Taiwan)?  We have not heard a single lawmaker ask the best for the warfighter question during subcommittee hearings; Sue Payton was only there to face the so predictable ire of congressmen “angry” from WA and KS (thou shalt rename temporarily nameless here).  The way Ms. Payton handled some of our elected representatives’ questions (correction: posturing) deserves the Nobel Peace Prize or its US equivalent since the previously nameless would probably complain that the Nobel Prize is a threat to national security due to its high foreign content and should be presented in the 6th district of the great State of Washington. 

Our sarcasm is noticeable because the protest’s banner holders have  contributed to Boeing’s (reasonable) questions causing the argument to lose any logical sense and defensibility. Weak arguments, short-term political needs and emotional temper tantrums are a common thread.  Boeing’s case, and we believe that some of the points raised by Mark McGraw have merits, now needs to be handled by professionals that can re-ignite a rational and defendable case for the 767.   Who better but USAF to do this?  They (and Boeing) need to tell the non-Boeing crowd to tone down, as the rhetoric will get them nowhere.  Similarly, Northrop Grumman needs to keep a lid on  dubious claims suddenly doubling the number of incidental jobs created by KC-45A; the tit–for-tat is frankly getting a little old.    The best of the media reporting about the KC-45 aftermath can be found here, here and here.  Those are the professionals that deserve some attention.

What we find interesting is that Boeing is seriously pointing to the many risks with the production model (multiple sites, multiple partners) that NGC is planning for KC-45A.  When one looks at the many problems encountered by an even more decentralized program like 787, one may wonder why Boeing chooses this line of criticism.   It is regrettable that  criticism toward KC-30  often omits the name Northrop Grumman  from (surprisingly) inferior selective reporting such as CNN’s Lou Dobbs.   Northrop Grumman is one heck of a great American organization and how they managed to trump the equally great American Boeing Company speaks volumes about the strength of their tanker strategy.  Case closed.

ISTAT and the unanswered questions

John Leahy is a brave man.  He has, for better or worse, become the official voice of Airbus for many years and thus has earned, deservedly at times ("The 7E7 is not a threat"), but not most of the time, his fair share of criticism.  Most recently, he has been right on the money when he indicated that about 27% of recent commercial orders are “on shaky grounds”.  We said 25% last summer, but again, that was before the credit bubble of August.  However, it is reasonable to question his recent point as reported by Flight here “People are "smoking something" if they say we really need to come up with a new narrowbody sooner than now being projected”.  Is there any truth behind his statements or does this need to be filed into the Leahyism section?

2017 is a long time; airlines such as Air France and a few others would have ideally liked a new generation narrowbody aircraft by 2012.  Airbus suggestions that they might have to wait until 2017 earliest is indicative of two things:  either Airbus is ready to introduce a 320NG that can serve as a bridge to the new narrowbody or Toulouse is now engaged in not so subtle disinformation warfare. 

As far as engine technology is concerned, GTF is likely to remain the best choice; we believe that propfans have too many risks (speed, certification…) and unknowns associated with airline operations that basically outweigh the benefits.  We feel Boeing will launch its replacement narrowbody aircraft first as the 737NG will not be easily upgradeable, unlike the A320, and thus has entered its downward product cycle.  737 will have to go by 2014.  Competition will intensify for Toulouse and Everett and it will come from Montreal and may be from San Jose (and partner(s)?) if rumors are indeed correct.

A Desjardins Securities analyst recently hinted at a 150 pax C-Series, and we believe this is a likely development for the yet to be officially launched new Bombardier aircraft.  The C-Series has a serious window of opportunity that may extend from 2014 to 2017 if Airbus and Boeing decide to postpone their new narrowbody introduction to market.  What is the opportunity for a 130-155 pax C-Series?   If Bombardier hits its market window it will be in direct competition for an addressable market estimated at 3,500+ aircraft…

Now if you wonder why we keep mentioning tricycles, see the first cartoon below.

Friday 4 PM humor (follow hyperlinks below by clicking on image)

J.D. Crowe
Mobile Register
Mar 12, 2008
 

 
      Click here to view
       Eric Devericks
       Seattle Times
     
 March 13, 2008
       
 


The February 29 Earthquake

The dust has settled; is this the end of the beginning or the beginning of the end?  Familiar words indeed, yet we cannot be but surprised at the immensely logical decision our Department of Defense announced yesterday Feb. 29.  The Northrop Grumman team win is a slap in the face to conformism, petty protectionism, pork and short-term business considerations. With the benefits of hindsight, most of the signs were already there. 

In 2004, I spoke at a conference in Los Angeles, and made the so predictable call that Boeing would win the tanker program and anybody even thinking  EADS had a shot was out of his/her mind. I even offered to pay for dinner at one of the most expensive Georgetown restaurants if it did happen.  A couple of years later, my offer was off the table and so was my thinking that Boeing could engage cruise control and win KC-X.  The EADS team, and its new partner Northrop Grumman, had just put one very strong offer on the table and my conversation(s) with the crew at the Alabama economic development office impressed me in terms of the KC-30 team’s vision and motivation.  To the end I would have favored a split award; it appeared to be the most logical decision from the end user standpoint, although it probably would have been cost-prohibitive to develop two types concurrently.

We have expressed our view in this blog that a KC-X win for EADS-Northrop, whether a split or sole source, would have tremendous consequences for the US based aerospace industry.  For the first time in decades, our country would witness an expansion of its large airframe production facility footprint as a result of the KC-30 team win. The opportunities created by this win are many and could eventually have positive consequences for Boeing and its customers. A shake up at Boeing is likely, now the game is afoot, and Northrop Grumman plans as an EADS gateway into the US market will grow. With A330F coming to Mobile, we expect the partnership to work on future programs, including the new A320RS and perhaps pitching the A400M to the US military sometime in the middle of the next decade. Boeing now needs to reexamine its internal decision making processes and understand that old strategies no longer works in this global market driven by the ever-changing concept of “best value”.

Boeing’s loss is regrettable, because of its impact on the Everett, BFI and Wichita workforces in particular (although the job losses figures used by opponents to the NGC-EADS team are grossly exaggerated).  KC-767, although not as capable in many areas as KC-30, is still a product that could have served USAF very well.  Information will slowly emerge, but we believe that classified scenario modeling showed USAF that KC-30 was better suited for future engagements and added much-needed airlift strategic capabilities.  That alone was probably the deciding factor in the selection of the KC-30.  The information and measurement criteria were reserved to USAF and the bidding teams and thus will remain classified for years.  Economic considerations, price and other elements were important but did not appear to have been the primary deciding factors.

Was price a deciding factor?  Of course, but Boeing should have been able to easily match any EADS offer in that regard. If not the case, then this was a serious mistake. Steve Trimble gives us a pretty good idea of price and its impact in the DEW line. 

KC-30 is a like the Big One in California.  It is not a matter of if the quake will happen but when. Well, it happened on February 29, and it signals a departure in DoD thinking where best value has triumphed over pork and the business-as-usual mentality.  The strategic implication for the occidental aerospace industry is also clear.  Note my use of the word occidental.  I, for one, believe strongly that a rapprochement between the European and US aerospace industries is not only desirable but also required to counter emerging Asian capabilities and support both continents defense budgets.  To rethink our agreements and bury our differences will be necessary if our common industries are to remain competitive through 2020 and beyond.  Failure to partner and engage in joint programs will only leave our industries vulnerable, reduce innovation capabilities, affect NATO’s ability to operate and adversely impact our ability to remain globally competitive.  Let me be very clear, the Airbus vs. Boeing battle is nothing compared with what our aerospace industries will face from China and others in the future.

For the Boeing worker on the floor in Everett, this prose may be interpreted with pessimism and categorized as a complete misunderstanding of the realities faced by American workers today.  The sentiment of abandonment and betrayal are probably very real and completely understandable.  However, for future generations of Aerospace workers in America and Europe, this deal signals that our government customers are now prepared to address and intervene directly to put an end to our industrial base rate of departure. 

Boeing cannot reasonably argue that KC-767 was the all American solution (75%+ US content).  KC-30 perhaps has a lower US content (60%+) but the loss is bitter because it comes so close after years of tension with France and Germany in particular.  Regardless, American companies are going to benefit tremendously from this deal, from engines to avionics to maintenance, so the argument that America lost and France won is “null and void”.  

Perhaps Boeing failed to take risks.  This is where Northrop Grumman CEO Ron Sugar needs to be commended for taking the initiative to go after this deal with a solution many ridiculed at the time.  Going with a mostly Franco-German product for DoD on the back end of one of the most serious diplomatic crisis in US-EU relations was a risky gamble that paid off.

Did Boeing also fail to measure the impact of the KC-30 in the mind of the customer?  I think USAF came to KC-30 with little or no knowledge of the aircraft and its capabilities, and as the competition progressed it became clear that KC-30 better suited the mission.  This also was our perception at G2 Solutions.  The more we looked into the value propositions of both teams, the more value we began to see emerging from the KC-30 product. 

Now what can Boeing do?  Should they protest or will they be forced into protesting by the usual, yet logical, political pressure of a few?  If Boeing is to protest, they must not do so because they know they might be able to reverse DoD’s decision with support from the Hill.  Boeing should now think hard about whether or not it can change DoD’s mind based on the KC-767’s merits.  In our opinion, KC-30 has won once, and would win again in a recompete scenario.  Boeing was reluctant to throw 777 into the KC-X fight and this might have been why they lost.  The footprint and other “best fit” arguments have been tossed back at Boeing with the KC-X decision and USAF’s underlying message to Everett has been that institutional inertia and risk aversion lead to failure. Boeing’s decision to continue selling a 767 airframe solution perhaps better suited to U.S. allies than its own DoD is in short a colossal failure of vision. Such shortsightedness is not limited to Boeing, but to all, including we who had predicted Boeing would win outright or at least garner (in G2’s case), a portion of KC-X.

Loosing KC-X is a bitter pill to swallow for Boeing and for Washington State; despite the monumental denial of cash, its impact on Boeing's Everett operation should be minimal in the short term.  This is certainly not the gloom and doom that many in the industry or in the sensationalist politico-media complex have incorrectly described.  Boeing, as an aerospace organization, is doing very well for the foreseeable future and with 787 issues being resolved rigorously, the KC-X loss will motivate and help the company refocus and develop stronger competitive offerings in the future.

mmerluzeau@g2globalsolutions.com

 



The Thud Factor: Keeping Track of US DoD Spending


February 2008


Week Ending 2-29-2008



Tanker Award Announcement Tomorrow,Thursday, Friday at 1700 Eastern


Northrop Grumman awarded KC-45A contract

Full Pentagon Press Conference
Transcript



Boeing Protest unlikely to overturn decision. 

Boeing statement:

We were just informed that our KC-767 Advanced Tanker proposal was not selected in the KC-135 Replacement Program known as KC-X. Obviously we are very disappointed with this outcome. We believe that we offered the Air Force the best value and lowest risk tanker for its mission. Our next step is to request and receive a debrief from the Air Force. Once we have reviewed the details behind the award, we will make a decision concerning our possible options, keeping in mind at all times the impact to the warfighter and our nation.
The Boeing Company would like to thank the many people who helped us in this campaign. We have received tremendous support from our suppliers, elected federal/state/local leaders, unions, community groups, and the 160,738 men and women who work for Boeing.

Northrop Statement:


February 29, 2008—Northrop Grumman announced today that it has been selected by the U.S. Air Force to provide the KC-45A aerial refueling tanker for the KC-135 tanker replacement program. The Air Force’s KC-45A is based on the highly-successful A330 commercial airframe, produced by EADS.



DoD Announcement

Boeing remains favorite to win KC-X, but split award would signal new strategic DoD vision for US based aerospace industry


 
   Credit:  Boeing/EADS

Week Ending 2-22-2008


B-2 lost on take off at Andersen AFB, Guam


Pacific News Center


US AIR FORCE PHOTO



The 12th B-2  "Spirit of Kansas" was lost on take off from Andersen early Saturday morning.  Both pilots ejected shortly after the aircraft became airborne. The aircraft had entered service in February 1995 with the 509th Bomber Wing based in Whiteman AFB, MO.






Two aircraft concepts that make sense.





Business Aviation:  Temporary Surge



Quick Thoughts:

- Cessna remains the undisputed market leader
- Bombardier's growth rate is well below par, reflecting aging of its product line
- Gulfstream, Embraer and Dassault expanded output between 15 to 33 percent
 





Bear Sighting in the Pacific


Photos: US Navy
CVN-68 visited by Bear Couple


Tanker Award:  Only a matter of Politics?

The date draws near; we should know, hopefully this month, who between Northrop Grumman and Boeing will win the lucrative contract to provide the US military with a much-needed nextgen tanker aircraft.  This has been a long road, particularly for the customer, and let us hope  the award to either team marks the beginning of a change of tone within the defense contractor community, and will not lead to a protest.  For some reasons, we doubt it. 

Recently G2 Solutions was contacted by Bloomberg to discuss the tanker award and take part in their analyst survey.  The article can be found here. Although not statistically relevant, this survey highlights some clearly consensual facts about this competition:
- It is Boeing's to lose
- A protest is likely
- The tanker award will mark the beginning of "a real political struggle"

Our position has been clear from the beginning; although we see significant merits to awarding part of this contract to the EADS-Northrop team, it remains clear to us that Boeing is the Air Force favorite and a large cross-party majority of Congress. Northrop Grumman and EADS' strategies have been very shrewd, and the last minute (and predictable) announcement by Tom Enders last month could still resonate positively with those who will ultimately sign the checks. 

And why not?  The EADS offer is full of merits, from job creation, to addition of production capabilities within the US, to expanding partnerships between the European and US aerospace industries and ultimately, delivering a strong product to the customer.
Boeing has been in the driver’s seat for most of the competition so far, and has been clearly steering the program towards KC-767 although it hinted that 777 was on the card at one point.  However, we have been sensing some anxiety with Boeing’s recent moves (Northrop-EADS have also made a lot of noise about KC-30’s “best-value”), but this recent declaration in the media from Boeing's tanker spokesman is odd (as reported by Scott Hamilton on his website www.leeham.net) and claims that Boeing would be out of the tanker business for the next 20-40 years if Northrop-EADS wins KC-X.  While remotely possible, this statement is a bit over the top in our opinion.  Boeing has indeed shown some signs of nervousness about KC-X in 2008.  First, it was an unconvincing and largely irrelevant fuel consumption survey posted on Boeing's tanker website on January 14th, then the gloom and doom comment from their spokesman, what’s next?
Yes, we like the 767; it’s an altogether great aircraft, and is the logical choice for the USAF. However, the KC-30 is quite the KC-767 on steroids and can deliver where 767 might come short.  The strong reliance of the USAF on KC-10s for operations in the Middle East helps illustrate the significant role played by such large tanker assets.  Although we do not think the Air Force ought to buy 179 of them, a fleet of 50-70 KC-30 would significantly help USAF operate globally quite efficiently.  Both projects also carry a fairly close level of risks; both are hybrids and relatively untested concepts.

The battle for cash is really at the heart of the matter.  With ever increasing R&D costs, Boeing has been spending considerable sums to keep NGC/EADS away from its turf and prevent a win that might positively impact Airbus’ ability to finance its nextgen A350 and A320 replacement narrowbody aircraft as well as its A400M military transport aircraft.  The same goes for EADS by the way, Boeing has been spending large amounts of cash defending Fort-Tanker and a loss would mean less cash available for R&D and other programs such as KC-Y. This is one of the last DoD mega contracts to be awarded for a while, and one which will shape our aerospace landscape and its ability to commercially compete with Asia in the future.

Then come politics and the ugliness of it all;  the current administration has awarded several major and highly visible contracts to European based manufacturers:  the presidential helicopter to Agusta Westland (together with LMT) and the C-27J to Alenia (together with LMT and L-3), and the UH-72 award to American Eurocopter.  Those contracts were primarily awarded to countries that initially supported the administration's policy in Iraq, and especially not to States leaning on the other side of the political fence. There are those who predict a fight on the Hill against "rewarding" a Franco-German company.  While  still a possible outcome, this does not resonate as strongly as it could have four or five years ago. What ultimately will win votes are jobs. With a US economy now clearly entering a  recession, a split award might be exactly what both sides of the aisle need to show they are doing something about helping the economy recover.  Losing fifty tankers to NGC-EADS will barely affect Boeing's commercial aircraft record production over the next five years but will have an overall positive impact on US exports once 330F enters production.
There might be more to this, although not discussed at length in the US media, transatlantic relations are possibly on the verge of another downturn following years of moderate improvements.  The NATO crisis over Afghanistan is soon to enter a new phase and a very public resumption of transatlantic disagreements over military operations could provide some added traction and arguments for those pushing for the “perceived” all American solution.  Regardless  the outcome, EADS-Northrop Grumman has already won a significant battle.  The partnership has demonstrated it can provide a competitive solution to the government, that it can become a near US-based partner and that transatlantic cooperation is viable and desirable in the long run.


FY09 Budget Figures Available from DoD

Major Weapon Systems
RDT&E
Air Force Specific
Navy Specific

January 2008


Tour the A380 Flightdeck

This remarkable 360 Panorama is available here or by clicking on the picture below. 




Lockheed Martin in trouble with Morocco?

It would appear that the F-16 sale to Morocco is far from certain.  After literally being handed the deal by the dysfunctional Dassault-French Government team, Lockheed Martin is now reportedly experiencing difficulties with the  24 F-16s financing.  Paris' Les Echos has reported that the $2.4 billion  financing required by Morocco is not coming together as planned.  The subprime crisis was a factor back in the summer of 2007, and it would appear that it has become an even bigger issue now from a banking standpoint.  This does not mean that the F-16 is out (yet). It however could signify some serious problems ahead which may lead Morocco to reconsider the offer, and either revert to its original choice with Rafale (France was able to put financing for 18 aircraft, but too late) or postpone this purchase altogether.  With the Algerian AF modernizing and the Libyans also looking at Rafale and Sukhoi, Morocco's Mirage F-1s and Northrop F-5s would suffer greatly in any BVR engagements against the Algerian SU-30s.  Morocco badly needs to upgrade and taking a smaller number of Rafales or F-16s might be next on the agenda.



Mr. Enders Goes to Mobile or is Airbus heading for Alabama?

EADS has scheduled an early press conference for Monday morning 9am Eastern time.  Tom Enders will be there accompanied with some heavy hitters including Ralph Crosby, Governor Jim Riley (R) and Senator Jeff Sessions (R).   Based on Dr Enders previous comments late last year, it is reasonable to assume that EADS might announce that they have opted to move forward with the production of the A-330F in Mobile which would provide EADS with a production/assembly operation inside the dollar zone.  KC-45 is also on the table and no doubt that any decision by EADS to move forward with the 330F might have some influence on the soon to come USAF decision

The Year of Living Dangerously

Not exactly what most of us would like to hear as 2008 begins its takeoff roll. 2007 was a milestone year for commercial aviation, it likely will not be followed by a repeat in 2008. With the US economy now feeling the pain of the credit crisis, high energy costs and a weakened dollar the domino effect we had feared would ensue is beginning to show signs of strength in other areas. 

With the European and some Asian economies also exposed to a US downturn, 2008 likely will be a year of economic correction; this is our best case scenario. Both Boeing and Airbus had incredible years, orders have surged to never seen levels with more than 1400 aircraft orders for Boeing alone, Airbus has yet to release its final number but it looks like it very well might exceed Boeing’s.  Can this be repeated in 2008?  Doubtful, this is possibly as good as it might be for at least five years, the market will enter a period of relative contraction for now. Business aviation also had a milestone year, VLJs are now in full-rate production and services.  However, serious questions remain as to the short term survival of some programs including the often troubled Eclipse 500A.  The recent termination of the ATG Javelin program did not come as a surprise to G2 Solutions, as the aircraft served the interest of too narrow a market segment and had serious teething problems.  Without question VLJ numbers will continue to grow, however we would expect one or two additional programs not to make it past 2008.

Consolidation in the US airlines industry will likely materialize as well.  A rapprochement Delta/United or Delta/Northwest has long been rumored.  It is also possible that one or two airlines might go belly up due to a likely contraction of passenger traffic in North America. Air France’s turnaround initiated in the late 1990s is about to mirror French President Sarkozy’s new Italian romance.  The Alitalia takeover will undoubtedly be a boost for the AF/KLM group’s main hubs in Paris and Amsterdam which will benefit from the increased intra-European traffic towards Malpensa, Linate and Venice. Some Italian resistance is to be expected, in particular with regard to international service to MPX.  Business travelers in particular will logically be annoyed at being forced to add a stop to their travel.

On the military side we might see the end or a new beginning of the tanker saga.  Hopefully the Air Force will decide in favor of both manufacturers as both aircraft can serve the US military well. The USAF crisis will likely intensify, with aging F-15s being grounded due to structural fatigue.  G2 Solutions understands that Canadian C/F-18s have been flying CAP missions usually flown by USAF F-15s out of Elmendorf AFB. As unfortunate as F-15 structural fatigue problems are for the current force, it might be fortuitous for the F-35 and F-22 programs. Suffice to say that pork will have a taste of F-22 and F-35 in 2008, might as well pile on as much as possible in this final stretch for the Lone Star State.  Navy also faces some tough questions ahead with several programs likely to face either delays or cuts, P-8 and BAMS come to mind.  Delays or cancellations in either of these programs will increase the scrutiny on P-3 availability rates.  The Navy is doing everything in its power to keep these aircraft flying, but the size and scope of P-3 airframe corrosion seems only to worsen over time.
Despite claims to the contrary, this will have a negative effect on P-3 deployability and capability.

On the international scene, this will be the make-or-break year for Rafale.  If the Libyan order materializes as expected this could be a major boost for the aircraft in markets such as India, Korea, Japan and especially Switzerland. Combined with a reshuffling at SOFREMA, France might get it right. The aircraft still needs critical planned improvements in the areas of radar and engines to be exported successfully. The big question in 08 will also be the future of international F-35. With 2007’s technical delays, some might reevaluate the program with a more critical eye, especially the UK, Netherlands and Denmark. There are still signs of discord about technology transfers with the US. The challenge of configuring a baseline aircraft to STOVL, conventional and carrier operations should not be underestimated as F-35 development grinds on.  DoD and international service-specific airframe numbers will continue to flux throughout 2008; it’s best to write those order numbers in pencil. G2 Solutions would be very surprised if those international partners back out of the F-35 program at this point, as offsets and partner industrial base considerations quickly move into the political and economic realms.
Will Bombardier (ever)  launch the C-Series? Please see us later about this one.

2007 also witnessed China's remarkable entry in the (major) commercial aircraft market with the roll out of its 717, sorry, ARJ.  More will follow and it is possible that we will see a 170-220 passenger aircraft manufactured in the PRC by the end of next decade.   China can build aircraft, perhaps with the support of foreign companies initially as it was the case for the J-10 and J-11 combat aircraft, but the country will transition to more indigenous designs next decade leading it to become a force to reckon with by 2025.

Embraer will continue to be one of the companies to get it right in 2008; we have yet to see the San Jose side miscalculate.  Its E-Jets series has been very successful and the Phenom programs appear to be well on track.  With the 320/737 replacement programs entering a critical year, it is possible that we will witness Embraer being courted by either Airbus or Boeing to support this gargantuan program.

2008 will also shake things up politically, elections in the US and transition of government in Russia will all have strong impacts on aerospace markets.  The US appears to be leaning away from the War on Terror as a political center of gravity, which might have a significant impact on the DoD crowd residing in the city surrounded by reality.  2008 will also be a dangerous year and it will happen in the Middle East. Iran still fails to reassure with regards to its nuclear intentions.  The US National Intelligence Estimate has been felt like a shockwave and Israel is feeling increasingly vulnerable.  Syria and Hezbollah might be looking for ways to retaliate and Iraq, while slowly improving, might get thrown into turmoil if Turkey decides to act decisively against Kurdish separatists.  A regional satellite, Pakistan, might also completely collapse into civil war this year, which would certainly have strong consequences for its Indian neighbor.  Global warming and those carbon offsets look really like non issues when one examines the potential global ramifications of crisis in that region.  We will expand more, January 31st to be precise for the annual forecast webinar, see us on the Aviation Today website.



The Future of US DoD?


Thomas P.M. Barnett outlines a post-Cold War solution for DoD



December 2007

Warning:  one ship might hide another

Outside

Photo:  French Navy

Seems like our Russian friends have found ways to discreetly ship surplus Tarentul Missile boats courtesy of the Norwegian  sealift vessel M/V Eide.  Destination:  Vietnam.  The value of airborne maritime patrol assets clearly illustrated by this find from a French Navy Dauphin Helicopter.  The M/V Eide had previously been used to ship the Canadian Submarine HMCS Chicoutimi back to Halifax NS in 2004 following a fire during its first cruise shortly after departing Faslane Naval Base in Scotland.



Inside

Photo:  French Navy



Here is a Tarentul freely roaming the seas.



Rafale Accident: Initial Inquiry Suggests Spatial Disorientation Could be the Primary Factor


Photo Sirpa air

French investigators have been examining the data recovered from the Sq 1/7 Rafale B's recorders that crashed in Southwestern France last week, and information now suggests that pilot spatial disorientation is being singled out as the likely cause of the crash. Two Rafales were practicing combat maneuvers Thursday December 6th, when one aircraft abruptly dived into the ground from 12,000ft following a head to head engagement.
The FAF investigators' initial interpretation suggests that the pilot of the Rafale might have been under the impression he was maneuvering in the horizontal plane when in fact data shows the aircraft was maneuvering in the vertical plane.  It also appears that the pilot had full control of his aircraft and was executing maneuvers with the aircraft until impact, this would support the now likely spatial disorientation theory.
The accident tool place at night and in bad weather conditions.  The French Air Force investigation team has not uncovered so far any mechanical problems with the aircraft.  However, temporary G-LOC or other physiological events have not been excluded yet.




Airbus A340 Overrun in Toronto

Runway Overrun and Fire, Air France Flight 358, Airbus A340-313 F-GLZQ, Toronto/Lester B. Pearson International Airport, Ontario, 02 August 2005

Video animation now available from Transport Safety Board of Canada (click on picture below to stream)


Full TSB report is also available here:

French        English


Rafale for Libya: Announcement this week?

Despite the loss of a Rafale B during a routine mission on Thursday, Dassault could announce the first export sale of the Rafale during the state visit of Col. Muammar Al Gaddafi in Paris.
However, it now appears that as President Sarkozy and Col Gaddafi are meeting for the third time in Paris this week, the French government is in turmoil over comments made by the Libyan head of state over human rights at UNESCO Tuesday evening. 
The order could be for a full squadron of aircraft with an estimated value at around $1 billion. Presidential sources have in Paris have indicated late Monday evening that Libya was interested in a total of 14 Rafales as well as Tiger helicopters and upgrades for Mirage F1s (see our blog entry in August for more info)
No further information has emerged about Thursday's accident which involved a Rafale B aircraft from Squadron 1/7 Provence, based out of St Dizier Air Base in Northeastern France. Based on available information, the pilot did not attempt to eject nor did he establish radio contact with his wingman as the aircraft plummeted to the ground from 12,000ft.

Update:

It looks like things will take more time for Rafale's first export.  It appears that Libya is indeed committed to buying the aircraft but this contract still needs to be negotiated.  Verdict before July 2008 according to sources.

 

Burt Rutan:  The Future of Space Exploration at the TED conference, Monterey 2006




GAO:  Aviation Runway and Ramp Safety: Sustained Efforts to Address Leadership, Technology, and Other Challenges Needed to Reduce Accidents and Incidents

Full GAO report available here 

Solutions to address the problem of runway incursion are already available. Honeywell has been leading the effort with its RAAS (Runway Awareness and Advisory System) already in service with Air France and soon Emirates.  For more details about RAAS, click on the image below.



November 2007

KC-X:  Split buy chances are increasing

There is a lot of media information circulating about the tanker program and the newly announced delay now scheduled for sometime in the first quarter of 08. We have made no secrets at G2 Solutions that the Boeing KC- 767 was our favorite based on multiple elements. Overall, it indeed appears the aircraft is a better fit in the Air Force inventory.  Oh well, if defense market intelligence were logical, politicians would be too, an entirely impossible scenario and one likely to never materialize given the possibility of a split buy.Why are we suddenly thinking split buy? The Air Force has indicated they cannot afford both airframes; perhaps USAF should rephrase it and declare, "We can afford it but instead really want to assign those funds towards more F-22As" or something like that.  Another argument, wisely used by both the customer and Boeing is that a split buy would increase the overall cost to the AF, not only from an acquisition standpoint but also from a cost of operation issue.  The main argument in this case being that microfleets are expensive, and unless one goes for a large number of aircraft the cost penalty will remain, a strong argument against a split buy for sure. However, any commercial operator could show USAF, and we remember one distinct EU based cargo company that shall remain nameless, who demonstrated that above a certain number of aircraft, somewhere around 35, the cost penalty of a split buy is marginal at best.
Read the signs: what is the best way for the Air Force to avoid a costly, time consuming, emotionally charged and at the end of the day entirely wasteful protest?  Split buy.
In an ideal world, maybe; however, what is really at stake here?  The tanker award is key, no questions, but let's look at the big picture.  Boeing is fighting this battle for one main (good) reason, to get Airbus off its turf and to prevent the emergence of a potential new player in the commercial aircraft market:  Northrop Grumman.

Are we exaggerating here?  Maybe, but let's look at the facts.  IF NGC-EADS wins tanker or even a small portion of it, then Mobile is a go.  KC-30s will be assembled there and it is likely that the 330Fs will soon follow. This location thus becomes sustainable for a minimum of ten years, more with orders from the US based package carriers. This would give ample time to Airbus to design a utilization strategy for the facility based around either cargo markets or its new narrowbody aircraft scheduled for production between 2015-2020.  Airbus is a company already built around decentralized production sites; adding one based on the US dollar is exactly what Tom Enders needs to ensure the organization emerges from the strong Euro/oil/credit/380 crisis.  If Airbus adopts a 787 model for the future 3XX narrowbody production, then Mobile becomes a possible production hub for the aircraft, together with Hamburg.  Sarkozy is breaking the gallic unions' back right now, give him a few more years and he might well succeed at marginalizing the French national pastime, the almighty national strike. Union protests about the new US site could thus become a non-issue in the future.
Boeing is fighting for its role (and perceived identity) as the sole US-based commercial air transport manufacturer.  IF US KC-30 happens, Airbus then becomes part of the US aerospace industrial base equation; the KC-X US only supply chain becomes much less of an issue (bordering irrelevance) and Northrop Grumman (together with its powerful lobby and talent) becomes a force in the commercial aircraft business by the middle of next decade.  With US defense markets looking to take a dive from FY09-10, the company needs to maintain growth momentum and diversify into commercial ventures.  The joint marketing and possibly design of future Airbus aircraft is looking increasingly like a distant possibility. Did we say merger?  We cannot go that far yet.  KC-X split award is not entirely about a small 30-40 KC-30 order; Boeing is really fighting about maintaining its relative control over the US military customer and keeping Airbus away from US soil. If Airbus sets up shop in AL (courtesy of US taxpayer money via USAF), then the impact at the WTO will surely be felt, as will the ability of Airbus to maintain its R&D and product momentum.  Boeing's future beyond KC-X hangs in the balance and our neighbors definitely do not want to witness the emergence of a US based euro-US hybrid (as BBC Top Gear’s Jeremy Clarkson would say, “Beware of the hybrid that is supposed to save money and the earth but in fact is nothing but an overweight, overpriced and under performing vehicle).

Now about KC-30 vs. KC767.  We have put together a table based on an internal exercise we conducted a few weeks ago.  This was strictly a qualitative, thus opinionated assessment of the perceived & relative strengths and weaknesses of both airframes and teams, nothing scientific there.  Based on what we read in the press and hear from our sources, we came to this oh so surprising conclusion: it is too close to call. As a matter of fact, let's call it a tie.  Still, as you can see from the figure below, we still favor KC-767.  However, no doubt that KC-30 has a role to play in the USAF inventory.  Now let's relocate our operation to Geneva, we sound more and more like neutral Switzerland these days.

 

V-22’s deploy to theater, and finally a chance to prove a touted transformational USMC force-projection capability

I had a conversation with a friend the other day, who happens to have been an active duty Marine.  We have a number of conversations – some enlightened, some not so.  He has a love for all things rotary wing, so naturally over time our talks turned to the Osprey and the roughly 25-year path this aircraft has taken to Iraq.  I received word shortly thereafter from another source that the V-22 was in theater, replete with this picture of the Thunder Chickens of USMC Tiltrotor Squadron 263.

I sent this image, and here was the snippet of our conversation that followed:

RS: “Did you get that email and picture I sent you about the first Marine V-22 unit to arrive in theater?

USMC Friend: “Haven’t seen it yet, but was it a picture of the V-22, with the Marines in the windows screaming ‘Save us!”

His comment was flippant but concise.  From reading the USMC/rotary wing blogosphere one can see comments of serious concern about the Osprey.  From an outsider’s perspective, the Osprey is a bit of an acquisition contradiction for the Marine Corps, a service that has traditionally eschewed long lead times, budget busting programs (through FY 2006 more than $20 billion spent DoD wide) and exotic, minimally-proven concepts. At times the Osprey was said to encompass up to 70 percent of the entire Marine Corps acquisition budget.

The blogosphere comments seem to hinge on a perceived lack of defensive armament, autorotate inability and doubt regarding the Osprey’s ability to take battle damage and continue its mission. The Ospreys currently deployed will rely on a single flex-mounted 7.62 mm machine gun, manually operated only when the rear door is open.  The Marines plan to acquire some 360 Ospreys, while the Navy and Air Force currently plan to buy 100 more combined.

The Osprey aims to bring with it ability to self deploy, and the following performance information from the Osprey Web are indeed impressive:

Performance

Max Cruise speed (MCP), SL, kts (km/h) : 241-257 (446-476) Max R/C, A/P Mode, SL, fpm (m/m) : 3,200 (975) Service ceiling, ISA, ft (m) : 24,700 (7,529) OEI Service ceiling, ISA, ft (m) : 10,300 (3,139) HOGE ceiling, ISA, ft (m) : 5,400 (1,646)

Mission radius with aft sponson tank

Land-Assault Troop Mission (24 Troops), nm (km) : 242 (448) Pre-Assault Raid, nm (km) : 267 (495)

Mission radius with wing tanks

Land-Assault Troop Mission (24 Troops), nm (km) : 233 (432) Pre-Assault Raid, nm (km) : 306 (567)

We also have word that BAE Systems is attempting to fast track a retractable, automated GAU-17 7.62 mm belly gun for the V-22.  The gun is intended to provide 360-degree suppressive fire.  The system is dubbed the Remote Guardian(TM) System (RGS), and BAE is attempting to have it available for installation in Q3, 2008.  Adding the RGS system to the V-22 after deployment flight testing and systems development invites issues not limited to: weight, center of gravity, flight characteristics, range, speed, payload and when and how (in the flight envelope) the gun can be deployed. Currently the RGS is designed to provide fire throughout the V-22 flight envelope. The demands from the V-22 user community must have been intense in order to bring the RGS to the fore this late in the game.

The elimination of the autorotation requirement is in concept offset by the Osprey’s ability to use altitude and lift characteristics to glide to a belly landing, although it is tacitly acknowledged this maneuver is dicey at best at altitudes below 1,700 feet. 

The Osprey became an object of focus in the course of G2 research into Department of Defense spending on the Maintenance, Repair and Overhaul of Aircraft Structural.  The Osprey caught our attention for all the same reasons we’ve now seen in a Time Magazine cover story, although the timing and tenor of the Time article seems at best coincidental and at worst opportunistic. I am no apologist for the V-22, but this story could have run anytime in the past four or five years replete with the same cogent points on budget, capabilities, accidents that have claimed the lives of 30 people and a flight testing regimen that has come under criticism for being truncated and/or falsified.

The degree to which the V-22 delivers on its promises will soon become apparent, but we at G2 Solutions believe the V-22 will have continuing teething problems, equal to or greater than any new weapons system deployed to a hostile theater of operations.  In this respect G2 Solutions is led to believe that the DoD’s current fleet of CH-47, CH-46, CH-53 derivatives and other rotary-wing transport/assault assets will continue in use and importance, in spite of plans to replace portions of operational responsibilities with the V-22.  If G2 Solutions is correct, the DoD will have to continue its impressive on-the-fly regimen of in-theater or stateside repair, maintenance and recapitalization of these vital assets beyond current timelines.

The Osprey would seem now to have a chance to prove its detractors wrong, to prove that this aircraft can be truly transformational, enabling a force projection and protection capability not currently offered by the workhorse CH-46 Sea Knight and CH-53 variants in the Navy/Marine Corps.

Godspeed to the Thunder Chickens.

Comments or questions for the author:  rstearns@g2globalsolutions.com

 

Shin-shin is here  

 

Japan is making very good progress with three critical programs, C-X, P-X and FS-X.  The latter driven in particular by its aging F-4 and F-15 fleets and current export restrictions with the F-22A.  FS-X, now ATD-X has been on the table for about eight years and it emerges now that some serious work has been ongoing to possibly field the aircraft by the second half of next decade, especially if the US does not release F-22A to Japan.  Whether or not the ATD-X will move beyond the technology demonstrator phase remains primarily a matter of politics. Japan is increasingly likely to grow its indigenous defense industry and rely less on US systems in the future.

The rise of China also poses a critical problem from a political standpoint in particular, with the Japanese military wanting to increase domestic sourcing, or at least diversify them to avoid too much reliance on US suppliers.  With China gaining political influence in the US, the long standing ties between the Japanese military and the US defense industry might begin to show some cracks soon. However, building a domestic 5th generation fighter aircraft will be a challenging task for Japan, but definitely not an insurmountable one; especially with the (expensive) experience gained with F-2.  In the meantime, the JASDF needs to procure interim fighters to replace the F-4EJ KAI early next decade.  The competition between the F-18E/F, Eurofighter, Rafale and F-35 will be interesting and perhaps could go to Eurofighter judging by the strong interest expressed by the JASDF for the aircraft. Here is a look at the ATD-X courtesy of Fuji News Network, nice aircraft.

 

 

 

France vs. France or when Rafale loses again

 

Fighter Export Success Depends on Aircraft and Sales Team  Performance

 

Chinese Grand Prix 2007: Britain's sensational rookie Lewis Hamilton is about fifty laps away from becoming the first driver to win the formula one championship in his first year.  Two hours later, a combined team and driver mistake has seen his championship lead shrink by seven and four points over his two rivals.  Two weeks later in Brazil, Ferrari's Kimi Raikkonen capitalizes and wins the Championship.

What is the lesson?  A winning team is composed of individuals working together and supporting each other so the strengths of some support the weaknesses of others to achieve the desired results.  Obviously there lies the issue with the Dassault Rafale failure in Morocco, the Dassault, DGA (Délégation Générale pour l'Armement ), MoD (Ministere de la Defense) and MoE (Ministere de l’Economie et des Finances) team does not work well together and Lockheed Martin's well-oiled F-16 international machine is always ready to capitalize.

 

A typical bureaucratically-induced loss

 

King Mohammed and then President Jacques Chirac have always been on close personal terms.  Chirac was a good friend of Mohammed's father and long time ruler, Hassan II who had purchased Mirage F-1Cs from France in the 1970s at the time of the first prime ministership of Jacques Chirac.  In early 2006, King Mohammed and President Chirac tentatively agreed on the purchase of a squadron of Rafale to counter the newly delivered (Algerian) MiG-29SMTs and the soon to be delivered Sukhoi 30s.  The Algerian purchase has the potential to significantly alter the strategic balance in North Africa and Morocco badly need to respond as the F-1s and F-5s would soon be clearly dominated in any BVR engagement with the Algerian Air Force.

Dassault prepared an offer for the Moroccan air force, including current French Air Force inventory Mirage 2000s to be upgraded to the -5 standard with new aircraft to be delivered at a later date. For Dassault, this is a model than has proven successful with Brazil and would allow the company to extend the production of 2000s a few more years in the hope that India would decide to directly purchase an additional wing of 2000-5s. However, it emerges that the King remains firmly convinced that Rafale is the best option for Morocco at this stage.

 

Done Deal

 

The Dassault offer is submitted in July 2006 for a total price of $2.5 billion according to Les Echos, a hefty sum, if one considers that it only includes a total of 18 aircraft. This would average about $140 million per aircraft, well above the $70-$90 million price range generally estimated for Rafale, no information is available to us to further clarify if any equipment, support or training are included.  The Dassault pricing in this case does not seem to make much sense and could be based on a customer budget figure rather than aircraft’s list price. 

 

It is then that, unsurprisingly, the holes in the French strategy begin to appear.  Morocco contacts DGA, headed by former Thales Avionics boss Francois Lureau, to discuss Rafale pricing.  With assistance from the French MoD, DGA provides pricing data based on existing French air force Rafale contracts; one problem: the per aircraft price is much lower than what Dassault has offered to the Moroccan Air Force, in the area of $25 million less per aircraft.  In Rabat and St Cloud, all hell has broken loose and it becomes clear that there is no coordinated commercial strategy in place between Dassault and the French government. 

 

By the end of 2006, Les Echos states that the offer has climbed to $3.6 billion.  France will now provide maintenance and spares for the Rafales as well as training and support.  Financing becomes an issue and Morocco is pressing France to lower the total package to a more "reasonable" price; France reluctantly complies but no deal is finalized as expected by early 2007.  However, the bill remains too high for Morocco, whose economy still greatly relies of phosphate production, tourism and income from nationals living abroad.  The Saudis then intervene; Riyadh has just selected the Eurofighter Typhoon for its air force and the close relation between Saudi Arabia and Morocco, a well-known playground of the Saudi elite, emerges as the most likely solution to the financing of the Moroccan Rafales. 

 

Whether or not US influence in Saudi Arabia played a role, it appears that in February of this year, the Saudis decide to withdraw their financing offer.  In the meantime, well aware of Morocco’s financial situation, Lockheed Martin submits its first offer for used F-16s to the RMAF.  Still convinced that Rafale fully meets his air force needs and not the F-16, the King confirms to Chirac that the deal is still on. 

Morocco then requests financing from the French government, now in pre-election mode and thus partially paralyzed by the uncertainties as to who might lead the country for the next five years.  Frustrated at the lack of responsiveness from Paris, King Mohammed now considers other alternatives; Lockheed Martin has been trying to sell F-16s to the country for years. In 1991, Morocco had seriously considered the purchase of 20 ex-USAF F-16A/B (then at the time also funded by the Saudis and the UAE). France had also made an offer for the Mirage 2000, which included upgrades to its fleet of F-1CH/EH.  

 

Jane’s Defense Weekly reported that France had been "within an inch" of signing a contract in May and June for 18 Rafales in a package worth $3.1 billion.  We also expected an announcement at Le Bourget and mentioned it in our aviation today Webinar at the end of May.  It never happened. In May-June, the new Sarkozy administration is in full campaign mode (again) to win the parliamentary elections, the two election rounds consume significant time and no doubt that it took the edge of the French proposal for a while.

 

It is also in June that LMT’s proposal is getting increased traction with the RMAF; no longer are used F-16s on the table but 24 brand new block 50-52 aircraft.  Politically, the US offer is also very strong and no doubt that the highest echelons of the current/past US administrations were parties to the deal.  The US proposal also comes with assistance for anti-poverty programs and full support for Morocco Western Sahara policy according to Moroccan sources.  The offer is too good to ignore and the King gives his approval in July. Late efforts from President Sarkozy in September do not reverse the decision and Morocco publicly announces the deal at that time.

 

It appears clear that the French export systems failed miserably in this instance.  Clearly favored by the client, Rafale did not win because of the absence of coordinated strategies between the parties that would play a role in supporting the deal.  Bureaucratic inefficiencies, absence of customer focus, and possibly some arrogance that Morocco was a done deal, and that Rafale could not possibly lose to F-16.  Well, it did.


October 2007



SAS and Bombardier:  Years of Appeals Ahead Full

 

It finally happened, SAS has ditched the Q400.  Not really a surprise following the latest gear up event at CPH. The public perception of the aircraft had reached such lows in Scandinavia that the SAS board has taken a clearly logical business decision. The relation between SAS and BBD was poor from the beginning, following a series of lemons and what has been described as Bombardier's arrogance over the years.  That might be the correct thing to say from the victim's standpoint, in this case SAS , but it does not hold water when one examines the good safety record of the Q400 since entry in service in 2000.  SAS will squarely lay the blame on Bombardier for failing to update its maintenance guidelines, while the other side will rightly point out that SAS is quite isolated with the type of problems encountered by the aircraft over the past few weeks.  We remain convinced that the truth with all these problems probably lies between SAS maintenance and Bombardier' suppliers QC and overall limited customer support.  Let's see if other Q400s develop similar symptoms soon.

 

California Fires:  When Politics and Special Interests Got in the Way of Public Safety

 

 

California has always been burning, and that has nothing to do with global warming or Hollywood’s tendency to blow hot air on anything it touches.  It has been a high-risk state, ever since men set foot in the Golden State (note: Golden, dry pale yellow grass, burns very well) The point is, fires are nothing new there; whatever their size, frequency and scope. Over time California’s population growth has removed the buffer zone that once existed allowing damage to be contained to remote areas.  When combined with the ever regressing IQs of arsonists, who like nothing more than to set nature on fire to satisfy their own twisted minds or business interests you have a potent and deadly combination. Those criminals are at the source of many fires, as it was the case during the Greek tragedy this summer.

California has been slow and only partially effective at combating fires from the air.  The 1990s early 2000s was a period of near-complete stagnation in terms of the state’s ability to draw up concrete long-term plans regarding the future of its aerial tanker fleet. The S-2 acquisition and modernization is perhaps the only positive accomplishment of CDF in its effort to maintain a fleet of capable firefighting aircraft.  However, as the tragedy in progress has demonstrated, their aircraft can’t do the job around the clock and are getting old.  The WWII converted bomber mafia that lobbied and to some degree paralyzed the modernization of air assets in the US was sidelined to a large degree when several aircraft crashed while fighting fires in several western states.   Aging aircraft simply cannot handle the rigor of the job year after year, and their crews sadly paid the ultimate price.

 

LA County has leased Bombardier CL-415s from Québec for many years.  While the aircraft has proven its worth in Southern France, Italy, Greece and many other places, no orders have yet emerged from California or other western US states (Note: Minnesota DNR is a user) that still prefer to use private contractors. The CL-415s has operational limitations, but it far exceeds anything available on the market currently in terms of payload, number of drops per hour and especially maintainability/reliability. On top of that, it is built like a tank. Sure, it may have some issues with high winds, but all aircraft do, especially the old PBYs that once were used by private contractors and also the super DC-10 tanker, that definitely could not match it’s drop speed and precision (they are very different aircraft built for different missions, so the comparison stops here).  On the other hand, if a CL-415, as its detractors love to point out, misses a drop, it can return for another attempt relatively quickly, unlike the S-2s or P-3s who need to return to base to refill their tanks. This is a time consuming process when a fire needs to be quickly contained because of high fire danger and proximity to urban areas.


Clearly, the 415s can be a very effective complement to the S-2Ts, and are far more effective at interface firefighting, and studies have demonstrated that scoopable water is available within ten miles of nearly all wild land/urban interface areas in Southern and Northern California. CL-415s and land-based tankers are both needed; however the CL-415 is  the rapid reaction, persistent tool needed by California to address this repeating fire problem. A fleet of Cl-415s response time would be less than 15-20 minutes in most cases, and its ability to continuously and precisely drop water in that ever narrowing buffer zones increasingly makes the aircraft a must buy by CDF. Data has shown that a CL-415 can drop has much as 120,000 gallons in 3-4 hours mission, or in the area of 70-80 drops if scoopable water is available close by. The $25 million per aircraft seems like money well spent to ensure that those million dollars Malibu properties are protected.

 

A380 again...

 

According to Flight International's Stephen Trimble, the USAF has requested information about the A380 for an eventual recapitalization of the VC-25 and C-5 fleets. As capable as the A380 might be, whether as a freighter aircraft or as a VIP transport, the prestige associated with the VC-25 fleet in particular and the callsign Air Force One, pretty much guarantees that Airbus will never win the resulting political battle.  The C-5 is another issue altogether, and A380 might stand a chance there, even if only a small one.  A380 however lacks some of the features of C-5 and has more limited cargo space which limits its ability to carry airframes such as the CH-47. 

USAF will need to have a solid case for this to even move forward.  The US is now in an election year, here is more ammunition for those who believe that the US aerospace industry needs to be supported and not penalized for its capabilities. This story will either drag well into 2009 and beyond or simply fizzle.  We do not remember if the French Air Force did or did not give a call to Boeing for information about the 747 or 777 a few years ago when they procured two A340s for their presidential fleet...


Here is a link to Stephen's article: 
US considers Airbus A380 as Air Force One and potentially a C-5 replacement

Pat Shanahan returns to Boeing Commercial airplanes to lead the 787 program.  This will be good news for the 787 program. Shanahan has the reputation of being a highly efficient troubleshooter with "struggling" programs.  Mike Blair is moving to another position within BCA. 

 

 

A380 delivery to Singapore Airlines

 

Looks like Toulouse was so eager to show off ahead of the Whalejet first delivery that they posted aircraft interior promotional material early.  Some of the most interesting segments are now available at www.a380delivery.com.  The first class suites are very impressive, SQ is setting new standards in the industry.  Economy class is, well..., economy class.

This is a very important day for A380, after many years of arduous work, Airbus deserves well earned congratulations for now.

First SQ commercial flight is scheduled for October 25.

   


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