Boeing’s botched exit from the Joint Cargo Aircraft (JCA) program is just the latest sign that the company is struggling to right its defense business after several costly losses in recent months.
US Airways will further shrink domestic capacity in the fourth quarter, return more aircraft to lessors and eliminate approximately 1,700 jobs to keep pace with fuel costs. The airline announced June 12 that it will cut domestic mainline capacity by 6-8% in the fourth quarter, return 10 aircraft this year and next year, cancel two A330 leases, plan for more fleet reductions in 2009 and 2010, and substantially reduce its Las Vegas service. Of the job cuts, 700 will be crew.
Bombardier Aerospace will manufacture the composite airframe for its Learjet 85 business jet in Queretaro, Mexico. The facility, which opened in February, already produces the center fuselage structure for the Bombardier Challenger 850, the aft fuselage for the Global family of long-range jets and flight controls for the Q400 turboprop transport.
India’s burgeoning aviation market—up 25% per year—has hit a few speed bumps, prompting some carriers to begin delaying orders and canceling deliveries. Growth is expected to drop to 15% this year. That is still sizzling compared with mature markets. The slowdown is partly attributable to fuel costs, which have jumped 18% this year and now account for 50% of Indian airlines’ operating costs.
Our airlines are now laggards in every category. Their financial health is precarious. Some blame OPEC, but fuel prices are not the core of the problem. The solution is not consolidation. Mergers will not lower fuel prices. They will require major capital expenditures, are likely to increase labor costs and will disadvantage many employees. Our goal should be to harness competition and regulation to create a system responsive to the imperative of efficiency and the desirability of decent service. The industry’s problems reflect several shortcomings:
Joel Peterson has been appointed chairman of JetBlue Airways . He has been vice chairman, and is founding partner of Peterson Partners and a director of the Franklin Covey Co. Peterson has been succeeded by Frank Sica, who is a managing partner at Tailwind Capital and a director of CSG Systems International Inc., the Kohl’s Corp. and NorthStar Realty Finance Corp.
Russia’s premier guided-weapons manufacturer is beginning to provide some detail on a key range of air-launched missiles that are central to its future development and provide a core tactical capability for the air force. The system is also being proposed for export when it becomes available. The Tactical Missiles Corp. is working on at least four versions of its Kh-38M air-to-surface missile, the basic configuration of which was shown for the first time at the Moscow air show in August 2007.
Bettina H. Chavanne (San Diego), Graham Warwick (San Diego)
Industry is circling around two programs that promise to be the only major near-term U.S. procurements of new unmanned aircraft: the U.S. Navy/Marine Corps Small Tactical Unmanned Aircraft System (Stuas) and the U.S. Air Force’s Next Generation Unmanned Aerial System (NG UAS). Both look set to be contests between the Pentagon’s established aircraft primes and the smaller players that characterize the fast-evolving UAS industry. They will also test whether the incumbent providers can hold their ground against the heavyweight primes.
French Defense Minister Herve Morin expects the country’s military export business to grow to €6 billion ($9 billion) this year, up from €5.4 billion last year, as an arrangement put in place last year to support foreign military sales begins to kick in. It is geared to reduce paperwork, speed approvals, reduce the number of technologies covered by export controls, improve coordination of government agencies and drive sales to €10 billion by the end of the decade.
Beijing’s decision to develop a mainline airliner is forcing Airbus to rethink its Chinese industrial strategy and seek ways of working with the huge customer without helping a future competitor. One solution could be direct Airbus production in China, just as the company is establishing a greater presence in the U.S. While the European manufacturer still expects to deepen its business in China, it says the country’s decision to move into the Airbus and Boeing market must change the future relationship.
Robert Wall (Paris), Joris Janssen Lok (Delft, Netherlands)
While development of the naval version of the NH90 appears to be stabilizing, only the next six months of flight tests will reveal whether technical problems have been overcome. The NFH90 maritime helicopter suffered a difficult 2007. The schedule was reset several times, angering customers. As difficulties mounted, financial pain hit the main companies in the NH Industries (NHI) consortium, which includes Eurocopter, AgustaWestland and Stork. EADS, Eurocopter’s parent, and Stork had to take charges related to the development effort.
Airbus is due to take delivery of a second ship to transport major A380 sections. The roll-on, roll-off vessel last week was christened the City of Hamburg and will join the already in-service Ville de Bordeaux. ST Marine is also building a third ship, for delivery next year. The vessels are used to transport wings and fuselage sections to Bordeaux, where they are transferred to trucks for transport to the Toulouse final assembly line.
With ever-increasing fuel costs and the spotlight on carbon emissions, why do airlines continue to carry unneeded weight? Not only am I charged a fuel levy every time I fly, but am asked to also offset my own carbon emissions. A duty-free trolley was wheeled out (44 lb. empty weight), laden with booty, from which nothing was purchased during my most recent flight. To reduce weight, a combined global effort would help. Why not offer passengers a carbon-offsetting scheme, so each removes 1 kg. from his/her bag after packing?
Japan’s Skymark Airlines, citing pilot shortage, is cutting more services in July and August. It had already reduced its June schedule by 10%, about six flights daily on average. Now it will drop 465 flights in July and August (7.5 flights daily), most of which operate to or from Tokyo Haneda Airport. Departure of two of 85 pilots on staff has forced the cuts, according to Skymark—although it’s unclear why such a small staffing change would have such an impact on operations. The carrier appears to have a greater problem with profitability.
The Defense Advanced Research Projects Agency (Darpa) has chosen a Northrop Grumman-led academic/industrial consortium for the first phase of developing a panoramic day/night optical system. It will seek to utilize human brain activity to detect, analyze and alert foot soldiers to threats. The goal of the Cognitive Technology Threat Warning Systems program is to develop a neuro-optical system to spot targets of interest at very long ranges.
With international interest in its new-generation Seahawk shipborne helicopters growing, the U.S. Navy is gearing up to take the next step—integrating manned and unmanned rotary-wing operations on its warships. Two new versions of the Sikorsky-built Seahawk are replacing six different Navy helicopters. The anti-submarine/anti-surface warfare MH-60R “Romeo,” for which Lockheed Martin is prime contractor, will serve alongside the multi-role MH-60S “Sierra,” which has been operational for a year.
The U.S. Navy and Boeing are in talks on whether production of P-8As can be accelerated beyond the planned 13 aircraft per year planned peak production rate. The program size of 108 aircraft is not changing. Boeing says production could be increased to 18-24 aircraft, although the exact number is still being studied. Grounding of some P-3s last year has added urgency to fielding P-8As faster.
Regarding Jerry W. Cox’s somewhat idealistic Viewpoint: •First the U.S. is no longer economically head-and-shoulders above any other entity in the marketplace. •Second, nowhere is there a level playing field in big-ticket endeavors where many jobs are at risk.
The sackings of Air Force Secretary Michael Wynne and Chief of Staff Gen. T. Michael Moseley have already thrown a large rock in the placid pond at the Pentagon (see p. 24). For starters, within the Air Force there’s resentment at what some see as a double standard on loose nukes. Defense Secretary Robert Gates cited problems over handling nuclear weapons and secrets when he asked the service’s leaders to leave.
Michael G. Ryan (see photo) has become CEO of Betatronix , Hauppauge, N.Y. He was general manager of Circor International subsidiary Aerodyne Controls.
Strong endorsement by the U.S. Defense Dept. is bolstering Lockheed Martin’s multinational F-35 after it achieved a critical flight milestone last week. However, the company is facing a loss of support for its F-22 after the program’s top two champions were ousted from the Pentagon’s inner circle.
DHL’s plan to wrench North American package express business from rivals UPS and FedEx had disaster written all over it. The business model was flawed, if not clumsily executed. Unable to operate its own airline under U.S. law, the German company has been competing against the world’s most efficient express operators by contracting with two airlines, ABX Air and AStar Air Cargo, to carry packages in five different types of mostly aging aircraft (AW&ST June 2, p. 40).
It’s hard to quibble with the title—“It’s Global. Get Used to It.”—of Jerry W. Cox’s assessment of globalization in the aerospace-defense sector (AW&ST May 12, p. 66). He writes:
A spat is once again breaking out between the British Parliament’s Public Accounts Committee and the top management at defense technology company Qinetiq about aspects of the latter’s privatization. The committee in a report published last week claims government naivete and public servants behaving “dishonorably” conspired to make the privatization of the bulk of the U.K.’s defense labs an unedifying spectacle. The committee criticized the level of reward negotiated for senior management.
