March 2012 Archives
The never-ending and why-did-it-ever-get-started transatlantic World Trade Organisation legal battle between Airbus and Boeing over government subsidies is certainly among the best lawyers' pension schemes yet devised in the 21st Century, and well-enough detailed here on flightglobal.com as to demand no further illumination (until such time as something really happens, which could be a very long time if ever).
Remarkably, though, the saga took another spin deeper into Jarndyce v Jarndyce territory yesterday when Hans Peter Ring, chief financial officer of Airbus parent EADS, fielded a question about so-called "launch aid" loans to Airbus by European governments. These loans, which Boeing alleges undermines its own competitive position by pumping cheap money into Airbus's development of new airliners, are repayable and, according to a WTO ruling in the case, quite legal.
According to Ring, they are also more expensive than Airbus could borrow in the normal commercial lending market. Airbus takes them, though, because they spread the risk better, he added. We shouldn't discount the value of spreading risk better, but if Ring is right then it's really difficult to see just what it is Boeing is making such a fuss about.
So, how long can it be before the United States, Boeing, the European Union, Airbus and their ranks of lawyers reach the point, like their fictional counterparts contesting Jarndyce v Jarndyce, that they genuinely cannot recall what it is they are fighting about bar the latest procedural matter in the case?
Still, it is not just trade laywers who should thank Airbus and Boeing. Any aerospace industry observers who have not had the pleasure of reading, or re-reading, Bleak House should take this case as excuse to revel in a classic which reminds us all how trivial such things as legal battles between rich people really are.
But as insightful as Charles Dickens was, don't take Bleak House as a guide to how Airbus v Boeing might turn out. Jarndyce v Jarndyce came to a sudden and unexpected conclusion, with no apparent winner but sparking off great celebration all around. Airbus v Boeing is unlikely to end, let alone warrant celebration. If there is any winner, it will surely be some outside party like China or Brazil.
Airbus has hit a rough patch this year with revelations that cracks are developing in the wings on its A380 superjumbos, a problem first identified on three Qantas and Singapore Airlines aircraft back in January. But while the problem has attracted much media attention and is being taken seriously by Airbus engineers, the accountants are non-plussed.
Yesterday in Paris, EADS chief financial officer Hans Peter Ring didn't let the issue detract much from his presentation of 2011 results that show the Franco-German aerospace giant and its dominant Airbus division racking up satisfactory - if not impressive - revenue and profits growth. Asked about the latest troubles to dog a programme that has historically been a severe drag on EADS's earnings, Ring was clearly pleased to be able to report that fixing the wing cracks will fall within the normal warranty cost provision already made for the A380.
So, expect no charges against 2012 operations, which Ring and chief executive Louis Gallois promise will result in further profitability growth. Last year, EADS revenue gained 7% to €49.1 billion and earnings before interest and taxes rose 38% to nearly €1.7 billion, taking the profit margin higher by nearly a percentage point to 3.45%. Airbus commercial sales grew 10% to €31.2 billion ($41.1 billion) and divisional EBIT gained 87% to €543 million on the back of a tenth consecutive year of increased production - to 534 deliveries - and a record net order intake for 1,419 aircraft.
Resolving the A380 cracks problem will involve detailed visual inspection of wing-rib feet and an interim repair that relieves stresses believed to have been introduced by the original assembly process. A more permanent repair may involve replacing the wing-rib feet - each wing rib has 30-40 of these L-shaped brackets that connect them to the wing skin - with beefier parts of a different alloy, as well as altering the assembly process.
The problem needs addressing but is not grounding aircraft; nearly 70 have been delivered and for many it will be adequate to delay inspection until routine maintenance comes due.
The results of the contest are certainly impressive: from aircraft that look like flying cars to a modern concept of an airship docking facility.
Credit:Martin Sztyk І Fentress Architects
Credit: Alexander Nevarez І Fentress Architects
The top prize, though, went to a futuristic and environmentally sustainable vision of London's proposed Thames Estuary island-airport, complete with vertical take-off pads for the aircraft of tomorrow.
Credit: Oliver Andrew І Fentress Architects
Credit: Oliver Andrew І Fentress Architects
Diverse as all these proposals are, a common theme stands out: space and compactness. Aware of the increasing difficulty of expanding on existing airport facilities, it is likely that the aviation and aerospace industry will need to come up with innovative solutions to increase capacity while reducing the environmental impression. Despite the fact that these projects might have a touch of fantasy, some of these innovative ideas could soon become reality.
Visit our Future Aviation Concepts Gallery to see more
Malaysia Airlines has unveiled the design and specifications of its first Airbus A380-800 aircraft.
The aircraft, to be delivered in the middle of June, will have a new livery on its exterior, said the airline.
The aircraft will have 494 seats in a three-class configuration - eight in first class, 66 in business and 420 in economy. The business class seats, together with 70 economy seats, will be on the aircraft's upper deck.
Full story on the Malaysia Airlines A380 unveiling...