A330s and A350s for Russia

[RC20]

Report they are in discussions for both.

Not surprised, Putin is determined to blend Russian Aircraft production with Airbus, and the decision will be political not economics to ensure that it’s an all Airbus relationship for Aeroflot.

Bad news for Aeroflot, once that is established, it never quits, they become uncompetitive, and then they have to be even more protected, hate discontent etc. I think Boeing has simply given up on this one.

I know Boeing has its niches (Japan) and Airbus at least had theirs, but this is totally one sided by government, not relationships. Not a good thing for Russia. China somewhat the same, but they split the orders to keep it competitive.

Pie in the sky delivery date for the A350, when they need a new fleet as soon as possible. Boeing gave them a great deal, now it will never happen, and no reason for them to even bid.

[smokejumper]

A couple of things that strike me as I read the articles about Russia and this situation:

- Both Boeing and Airbus invested in Russia's areospace industry to take advantage of their talented engineering capability. Airbus' investment (and possibly promises of production) may pay off in sales, while Boeing gets moderate cost (but very capable) engineering capability.

- Putin is interested in maintaining Russia's aircraft manufactring capability and Airbus might be the way to go. Russia has offered to buy a chunk of Airbus and become an owner/partner.

- If manufactureing is shifted to Russia in a time when Airbus is trying to restructure and "go lean", how will a job shift (from France and Germany) sit with these nation's unions?

Interesting times to sit on the sidelines and watch.

[chornedsnorkack]

Does Airbus regard Il-96 as a competitor of A340?

[RC20]

Does Airbus regard Il-96 as a competitor of A340?

I would guess not. The design is very dated (despite the updates in engines and electronics) Very little interest except minor orders from former Soviet Block countries. I think one of those cancelled.

I don’t blame Putin for trying to put the industry in order. Frankly it’s a good move to try to get Airbus production in Russia, but only if its bid work, not forced. But if its done under a government edict, then you have a (another) political mess, jobs creation program. What happens when things go wrong? If you are not competing, but are given, then the results can be very bad.

If EADS owned those Russian entities, that would be one thing. This would be nothing more than a low cost extension of what they have now, more complicated, messier and worse results.

While I do not want to get into politics too much (and I have no sympathy for Western Oil companies), what’s happened with them is a total caution in dealing with a government that is nationalizing (no other word for it) things. Those oil companies had fully legal contracts, and then the system is being used to force them out. That’s going to drive out all sorts of investment, and certainly you cannot trust any agreement, it will be broken as soon as the government thinks they can get away with it (rightly or wrongly if it can and if it works short term). Long term it’s a disastrous policy.

Add into that, when you force product choices that things begin to go badly. Then all decisions become political.

[bits44]

Russia in this insane display of stupidity has set the country back 20 years.

If they think anyone with a reasonable amount of intelligence is going to invest in or partner with a Russian company in a business venture they are going to be rudely awakened.

I would bet Boeing is kicking themselves after thinking they could make a go of it in Russia.

Of course this all may change, after all they have changed their minds 2 or 3 times before

The worst part of this whole incredible farce is Aeroflot is left to twist in the wind while the politicos play their stupid game.

[tsv]

Does Airbus regard Il-96 as a competitor of A340?

Technically it may be a competitor but there is no comparison between the after sales service that Ilyushin can offer compared to Airbus. Most of the interest in this aircraft has been from countries who don't or won't deal with the west for Political reasons. Aeroflot was supposed to take 6 more Il-96's in exchange for being allowed to buy foreign planes with reduced import taxes. I doubt these aircraft will ever be delivered but has anyone got an update on this order?

Regarding the wisdom of ordering A330's/A350's I think this is politically a very sound move by the Russians for 2 reasons.

Firstly the Americans seem intent on getting more control over the CIS region, including Russia itself. As an example a recent documentary shown on SBS television, Australia, showed one of George Bush's brothers meeting with Boris Berezovsky in one of the Baltic states. The program alleged the reason for the meeting was to discuss how the US could help Berezovsky to oust the current Russian Government and install a more "US friendly" government! The program also alleged the parties worked together to influence the outcome of the Ukrainian elections. I don't think any self respecting sovereign state can be expected to tolerate this level of Political Interference. Let alone place billion dollar orders with that countries' companies.

Secondly if Russia wants a future in aviation manufacturing it is far better off getting into bed with the Europeans than the Americans. Boeing would simply continue to throw them a few crumbs (eg design jobs or marketing advice with the SSJ project) while keeping all the spoils for themselves and slowly sqeezing all life out of the manufacturing plants. For example Boeing would never agree to let the Russians do final assembly of one of it's aircraft.

Conversely the Europeans are much more open to doing joint projects which will deliver real mutual benefits to both partners, as evidenced by the SSJ. The reason is necessity. The Euro is no longer competitive against the US dollar and European Labour Unions are a big restraint on business development. To compete with Boeing and other US aviation businesses they must find cheaper unskilled labour (which China and India can provide in Spades) and also cheaper skilled labour (Russia, Ukraine, Brazil?).

Aeroflot would probably have preferred the 787 but I don't think they'll be too upset. The A330 is an excellent aircraft and the A350 should be even better than the 787, given they've had an extra 2 or 3 years to design it.

Finally I agree totally with other posters that the Russians would do well to get their legal systems sorted out. Russia is much too important a country to be run by a bunch of mafia thugs. Somehow they must crack down on corruption.

[bkonner]

Hello,

A couple of disclaimers: I am an American and a stock holder in Airbus. Airbus' parent company is more than a manufacturer of aircraft for the airline industry. It is also a manufacturer of military equipment. Is it wise for the EU, and the German and French governments to allow this? Certainly the US government would never allow a Russian company or the Russian government to invest in Boeing. I hope the EU and respective governments think long and hard if in fact Russia plans to invest in Airbus.

Bill

[earthman]

Slightly off-topic, but I recall a joke from a few years ago, regarding Russia and EU membership. Putin said that he had no objections against the EU joining Russia in the future.

[tsv]

Slightly off-topic, but I recall a joke from a few years ago, regarding Russia and EU membership. Putin said that he had no objections against the EU joining Russia in the future.

Good One!

[smokejumper]

Does Airbus regard Il-96 as a competitor of A340?

Aeroflot would probably have preferred the 787 but I don't think they'll be too upset. The A330 is an excellent aircraft and the A350 should be even better than the 787, given they've had an extra 2 or 3 years to design it.

Unless there are some real technology breakthroughs, I do not see how Airbus can develop a better aircraft than the 787, especially if they do not use a lighter-weight wound-composite barrel fuselage (carbon panels over a conventional aluminum frame will certainly be heavier). Also, I am sure that Boeing will continue development of the 787 and constantly improve it. Airbus' taking 2-3 (or will it be 5-6) years to develop a new product is not an advantage!

[DFW]

Agreed. Ordinarily, a 2-3 year lag gives one the advantage of knowing what your competitor's committed product is. That way, you can design your product to counter the other's product. But the current A350 iteration doesn't show any such advantage at this time. At least, it's not apparent to me.

[RC20]

I know some say that second to market means better, but if you don’t have the technical base to jump over someone, second to market may mean pretty much nothing.

In the case of the 787, while the composite fuselage and wings are a huge leap, keep in mind that the electric systems are equally so. While not quite ready for prime time with all electric, its mostly electric, and that’s another major change (noting the A350 so far is bleed air).

Huge reduction in routing of ducts, cooler issues etc. There nothing restrictive about it either, one they have all the other hardware proven (the F35 is doing it now), then they can incorporate it into the aircraft as it has the generators to do so. They will keep refining it and get even more efficiency out of it (they have gained another 3% on life cycle costs already, and Boeing is always conservative about those figures) .

I know the popular press call the A350 me to, it really is “me sort of”. Airbus simply does not have the capabilities in place to execute that yet. So, its either a hybrid, or wait longer. Time will tell.

And while the A330 is fine aircraft, you will be competing against people that have a much more economical one. They can charge as much as you and make more money, or cut prices and take away your traffic, or drop them some and take away your traffic and still make a lot more money.

Then you have to consider imposing competition restrictions, and when you have lots of places you want to fly (and countries) and you have to negotiate a separate deal with each one, and keep Aeroflot afloat. Well, it will just get worse and worse.

Again, I have nothing against Russia protecting their best interests, but there is a question of what really is in their best interest? Giving out work shares is not it.

And I think Boeing has done a good job in Russia. They were there far before Airbus. They have spent a lot building up something functional and competitive there. Russian in turn has provided very good engineers. That’s a good situation for Russia, and Boeing makes a profit doing so. At some point, if there is a viable Russian aircraft industry again, Russia benefits as well in that regard.

[smokejumper]

Agreee with RC-20.

Boeing's selection electrical systems will result in lower weight and (perhaps?) lower maintenance costs. The weight associated with metal ducts, duct insulation, bleed air coolers, etc is significant.

Hydraulic systems are prone to leak and the weight associated with metal lines, fittings and hydraulic fluid is significant. Boeing's hope is for the electric systems to work reliability in commercial service.

[Zenfookpower]

Once the German and British participation within EADS are "controlled" one can easily see the next step France (EADS) will take.. Very interesting article here
http://en.rian.ru/world/20070221/61078095.html and here
http://en.rian.ru/russia/20070221/61077360.html

[smokejumper]

If Airbus (i.e., France) joins up with Russia, where does this leave Germany, Spain and the UK, especially in the era of Power 8 reductions?

Would the French would sell out their commercial allies for commercial gain?

[Zenfookpower]

If Airbus (i.e., France) joins up with Russia, where does this leave Germany, Spain and the UK, especially in the era of Power 8 reductions?

Would the French would sell out their commercial allies for commercial gain?

"Sell out" might be too strong.. How about "controlling" their commercial allies for commercial/political gain.....This is one big chess play

[vc-10]

That wouldn't suprise me.....
Airbus need to ditch the government control that they have now. Governments should be only shareholders. 100% of the control should be in the hands of the managers of the company. It should split from EADS aswell.....

[DFW]

Getting back to the original topic, Russia is not helping matters by potentially tying airplane orders to a partnership with Airbus. The A350 is already being delayed by political fighting. Russia is only complicating matters, thus prolonging the start of the A350 program. At some point, carriers that compete against Aeroflot will be fielding brand new B787's while Aeroflot waits another five years to get their A350's.

[smokejumper]

Check article in Seattle Times:

http://seattletimes.nwsource.com/html/b ... ing22.html

No new news here - Russia will most likely buy interim A330's while waiting for the A350 in hopes of solidifying a relationship with Airbus. This is probably to the detriment of Aeroflot which needs to revise their fleet as early as possible. A 5 year delay just means that the airlline will experience higher fuel and maintenance costs.

Certainly the US' outspoken views (and ill-advised statements) have offended the Russian Government, to Boeing's disadvantage.

[RC20]

I think it said it well, Boeing gave up on this a month ago (probably longer ago than that).

Of course Aeroflot does not want a 777 type, so the A330s will be the long term aircraft. Of course, when they get them is open, as Airbus is giving two away with each A380.