The DEW Line

Boeing today has released its latest current market outlook for civil airliners, predicting again that air traffic growth should far out-pace the world's economic growth. (China: Boeing says "thank you".)

Read it here.

And Randy Tinseth's Paris Air Show briefing here.

The way airlines buy aircraft today makes no sense. The current model doesn't work for the customers, the manufacturers nor the financiers. The system has to change.

Cheers to Fortune magazine for spotting one possible solution to this problem: hedge funds! (Really.)

Here's an excerpt, but check out the full article here:

Traditionally, airlines purchased most of their fleets, renting the rest from a few big leasing companies owned by firms like GE (Charts, Fortune 500) and AIG (Charts, Fortune 500), which could afford to ride out the industry's ups and downs. But hedgies spotted a flaw in the model: Aircraft were financed based on the creditworthiness of airlines rather than the value of the actual planes. And with global demand for travel trending up, the funds bet that the metal could be alchemized into flying gold.

Southwest Airlines, the only carrier that Wall Street analysts love to love (or LUV?), announced today that it is deferring deliveries of 15 Boeing 737-700s. This is bad news for airlines. Very bad. I've polled my colleagues, who actually know a thing or two about the air transport industry, and no one can remember a time when market conditions forced Southwest to defer aircraft deliveries.

But even worse is the simultaneous announcement by Southwest on two of the steps it is taking to boost revenue: does anybody believe launching a new advertising campaign and revamping the boarding and seating method are the keys to turning things around??

Here is the original 7E7 artist's concept when Boeing launched the program on April 26, 2004:

And this is an image of Boeing's first actual 787-8 Dreamliner. Quite a difference, no?

I know this is primarily a defense industry blog, but I can't help it: this 787 vs A380 race is going to be a hoot, folks.

Yesterday, Singapore Airlines confirmed finally that it will operate the first flight of the A380 superjumbo on October 25.

The 787 first flight was supposed to be August, then September, and now will very likely be mid- tto late-October.

The question: can Boeing resolve it's issues with 787 production and beat Airbus into the sky before the A380's entry into service date? My money is on Boeing.

"Start your turbofans" (Source: Singapore Airlines)

P.S.: Singapore Airlines also announced offering a new suites section that is a "class beyond first".

Why does Boeing want to make it harder for 787 passengers to survive a plane crash?

That's the hugely loaded question that is being asked this week by a 46-year Boeing engineer, Vince Weldon, who went public with his concerns about the 787's crashworthiness on a Dan Rather-hosted TV special last night. Watch the show here.

Weldon believes Boeing is rushing the 787 into service before it knows for sure how the all-composite fuselage will behave in a crash landing scenario. Two key questions: Will composite structure absorb as much of the impact shock as an aluminum airframe? Does composite resist fire as well as metal?

I had my say about this issue during a live spot on the TV morning show Fox & Friends this morning, but -- in case you missed it -- here's the gist of what I said.

The bottom line is that Boeing will have to prove that the 787 meets at least the crashworthiness standard of aluminum structures. If there are unknowns or validated problems, the FAA will rightly refuse to certify the aircraft.

Weldon's real question, however, may be whether Boeing or the FAA knows enough composite structures to make a reasonable judgement.

This may be a philosophical clash more than anything else.

Weldon comes from a generation of venerated Boeing engineers who were famous for being hard-headed about safety and testing. This is a group that believed in physically validating almost any assumption.

But times have changed across the the industry. These days, more engineering assumptions are validated digitally in computer labs versus physically in flight test conditions.

I would not write Weldon off as a disgruntled employee grinding a composite ax. But nor would I write off the consensus opinion -- shared by every airframe manufacturer in the business -- that composites are a safer and more efficient alternative to metal.