America is going to pay for the cronyism that merged every airplane manufacturer into one and eliminated internal competition. If you don't have internal competition, you'll collapse in the face of external competition. There is no way to get away from Boeing without getting away from the American aerospace industry entirely, a problem that didn't exist back when McDonnell Douglas was around.
A large part of the problem with Boeing is McDonnell Douglas. After the merger, the corporate culture of McDonnell Douglas was transplanted into Boeing. Their HQ was moved from Seattle to Chicago and money was spent on buying back stock instead of long-term R&D.
Assembly facilities being moved to the south because "it's cheaper" didn't help either. Engineers and technicians are not really just cogs in a wheel where you can replace one with another and get the same results. You lose a lot in the way of "informal knowledge base" when you do that.
This has very little to do with that. McDonnel Douglass had no equivalent to the 757 really either. (The MD-11 was a suitable replacement for the 767, if you wanted a 3-hole aircraft)
I'm absolutely certain that if Boeing was making a 757NG like aircraft, United would have bought those. When it comes down to it, Boeing has no direct replacement for the 757. Airbus does, so United bought airbus.
If Boeing had wanted to play ball on an NMA aircraft, United definitely would have purchased them. Instead they abandoned their smaller 787 variant and didn't pursue NMA at all, leaving the door wide open for Airbus.
Boeing stopped making the plane because the situations that led to its existence evaporated, and it looked as if there would never be more demand again, and the world seemed to be trending to 737 size aircraft in ever increasing numbers.
My suspicion: the whole world lets the FAA validate airplanes and then sort of rubber stamps. Boeing was able to capture the FAA, but Airbus wasn't(since it's a foreign company). As such Airbus is still working with a proper adversarial regulator, whereas Boeing can get away with more cut corners. Eventually that screwed them.
The EUs move for greater local safety review, ironically, might make Airbus less safe, since they might be able to capture the EU regulators.
[edit] to emphasize: it's not market competition or the EU being better than the USA that's different. It's just the quasi-monopoly the FAA has on global aviation safety checks and the effect it has on foreign versus local companies.
In fairness, if there were multiple US aircraft manufacturers, they might battle each other for FAA regulatory capture and prevent either of them from achieving it.
[double edit] For the reverse of this see Dieselgate: discovered by some random American(named of all things John German) and pushed into the limelight by the EPA or whatever. It's not a perfect metaphor since he worked for an NGO, but arguably even civil society faces a sort of funder capture. Would German environmental NGOs have blown the whistle on something like this? Maybe?
> Would German environmental NGOs have blown the whistle on something like this? Maybe?
I think yes, it's just that they expected the regulatory system to work. Companies intentionally defeating emissions tests, unthinkable! ... just as unthinkable as the FAA rubberstamping whatever Boeing puts in front of them :(
> Airbus is still working with a proper adversarial regulator
I'm not sure this is true in a practical sense. For example, Airbus does the same unbelievable things with AoA sensors that Boeing did with MCAS: even if they have two or three of them on an aircraft, they don't compare them before allowing one sensor to drive automatic functions, so a single failed sensor can cause the airplane to do unexpected and dangerous things (for example, multiple uncommanded pitch down events on Quantas Flight 72). A true adversarial regulator would never have allowed such design flaws.
The Qantas Flight 72 incident was quite a bit different, as all AoA sensors were working correctly. The issue was due to corruption on one of the CPU exploiting these AoA sensors value [1]. Though you are entirely correct that there was a design flaw and the incident should not have happened, since these corrupted values ended up overriding the correctly calculated ones from the other ADIRU units.
[1] "The exact nature of the corruption was that the ADIRU CPU erroneously re-labelled the altitude data word so that the binary data that represented 37,012 (the altitude at the time of the incident) would represent an angle of attack of 50.625 degrees." https://en.wikipedia.org/wiki/Qantas_Flight_72#Potential_tri...
Let's not forget that until the two MAX crashes, Boeing had an overall safer record for its 7x7 line than Airbus did with its equivalent passenger jets.
So the EU's "vaunted" adversarial regulator actually was doing a much worse job than the FAA.
I think you have both misunderstood the argument being made, and misrepresented the relative safety of Airbus and Boeing passenger jets – which, by my understanding, is broadly comparable.
Because Europe has not legalized corruption to the same degree as the US. Massive campaign contributions is not as common in Europe, hence large European multi-nationals likely don't have the same opportunity to change regulations to serve them.
Of course they can still influence politicians by talking about all the jobs they will provide etc. Also power in Europe is not centralized the same way as it is in the US. In the US you can lobby Washington DC.
American lobbyist companies started swarming Brüssels as soon as the EU started gaining more power over national legislation.
So there is potential for the EU to head in the US direction, but it isn't quite there yet.
> Massive campaign contributions is not as common in Europe
Also far more complex - the political groupings in europe (EPP, ALDE, etc) are far looser organizations than the US parties, and power is spread in lots of different levels. Most Euro countries are coalitions of smaller parties too, defence in depth.
The US and UK suffer from having just two parties that from time to time get all the power. Infiltrate one party and your time will come. Infiltrate both and you're safe.
Please stop that. Brussels is the English name for the city and clearly that letter does not exist in English. Alternatives are "Brussel" (Dutch) and "Bruxelles" (French). The closest to what you wrote is the German "Brüssel" (no S).
It is funny how you think there is no corruption in Brussels. Of course it is there! The rules of the game are though that we don't touch our own Corporations. So Brussels will look the other way when VW cheats their customers in the US and Washington won't care when let's say Google has its way in EU. The real difference is that corruption is somehow legalized in the USA (a.k.a "lobbying") while it's not in the EU, so you will just not know about VW CEO hadling bags of money to Brussels unelected environnmental commissar.
socialdemocrat didn't claim no corruption, simply not the same degree.
Corruption in Europe is different, and often more subtle, than in the US (have lived and worked in both) but I do feel that over the 30 years the US has really gotten a lot worse compared to the EU countries.
The corruption also flourished during communism, but in different apparent form. Before communism, I don't know. (But the Habsburg empires I expect were deeply corrupt too - but the "west" was deeply corrupt too so it also gets difficult to compare.)
yeah, but they will not attempt destroying them financially too. EU fines US companies as if it wanted to get rid of them from the market. Not like it'd like to just fine them.
Also, note, how during Trump presidency EU is so much more cautious with that. Cynic in me says that's the proof that it is and has always been political. US can go after VW, MB, BMW, Porsche, Siemens, etc. There is no way that no federal laws are violated with the scale od operations these companies have in the US. All it takes is skilled and ambitious US Attorney General on Trump orders. Look at Lufthansa. All they need to do, and there were gossips about it being implemented already, is to ban electronics on flights to the US due to "battery self-ignition risk". But exempt US based carriers. Remember customer is always right. And Germany's BEST customer (who also happens to provide military security) is the US. Some people in EU seem not to grasp this simple truth
EU law is proposed by the Commission, made up of appointed representatives of each member state's elected government. It's voted and amended by the directly elected members of the EU parliament.
This is HN not the Daily Mail comments section, let's keep this space free of baseless europhobic disinformation.
It's not, and it could easily have gone the other way. By not having any competition or diversification, countries expose themselves to tremendous risk: the balance of the aerospace industry rested on a coin flip and the US bet tails. Without the cronyism, we could have had many separate raffle tickets against Europe's one.
It seems like Airbus currently is different. Maybe the friction from it being very multinational prevented it from becoming like Boeing, maybe it will have its own big scandal in a month. Who knows. But currently, Airbus does look better.
I mean, it wasn’t a safety scandal, but the A380 was a huge disaster for the company. I’d be more comfortable getting on a notional A360 than a notional 797, but both companies have self-harmed recently.
It lost them money but it didn't hurt their brand. Those are great planes to fly in as a passenger, they're just not profitable in the end for Airbus.
Boeing can't even keep its newest plane in the skies, and may have killed off the 737 line for good. Think another revision after the MAX is ever going to be approved?
As well as being great to fly in (seriously, business class on the upper deck by the window is an absolute dream) they have that "WOW" factor that I haven't experienced since first seeing a 747 or Concorde.
The 737 needs to go away. It's a great plane from a different era (staircases instead of jetways). That era has long passed. They've been trying to shoehorn it in. Rather than scale up the 737 cockpit flight controls they could have scaled down the 777 cockpit. Or even developed an all new one license cockpit in the same vein as the A320 series.
I think that the MAX was about as modest as they could make it. That was really the point of the whole exercise. A more modern engine core with a smaller fan wouldn't have moved the fuel economy needle enough to justify a new model I don't think, and Boeing would have lost a lot of orders to the A320neo.
Everything would have been fine except there was so much pressure to make every change as modest as possible that it didn't quite all work. They needed to either make significant changes to the landing gear or significant changes to the flight control computer and they chose neither.
787 doesn't fill the same role as 737 and A320, it's a much larger plane that carries more passengers. 737 and A320 seem to be much more popular for domestic flights within the US than larger planes.
Airbus scandal won’t come “in a month”: Boeing’s problems became public in 2013 and it is the same problem over and over.
- The Ducommon airframes in 2013, problem is FAA delegated certification to Boeing,
- The batteries, albeit smaller,
- The MAX, 2 crashes due to oversight and to the FAA delegating certification to Boeing.
Boeing’s problem didn’t come in a day, but in 20 years since the merge with MD, who had the same lose and fast culture. Airbus is safe for the time being, even if risks always exist, political instability for example. Not the case for the moment.
This is the same basic design flaw that Boeing's MCAS has (allowing a single AoA sensor failure to cause the airplane to do unexpected and dangerous things), but unlike MCAS, it wasn't an ad hoc addition to deal with an issue in a redesign of an old airplane, it was designed into all Airbus fly-by-wire aircraft from the start.
You keep posting this, but it's simply not true- Qantas flight 72 did not experience an AoA sensor failure, and even if it had, the A330 uses all 3 independent AoA sensors and all 3 independent air data inertial reference units to command control movements.
The issue was caused by one of the ADIRU CPUs corrupting valid sensor data to produce a series of very specific spikes, hitting a specific edge case in the AoA cross-check logic that made the flight computer behave as if the erroneous data it was seeing was valid.
It's undoubtedly a serious design flaw, but it's not even remotely in the same ballpark as the Max's flagrant disregard for all process and well known design standards.
> a specific edge case in the AoA cross-check logic
What the article you linked to describes doesn't look quite like that to me. It looks like a design that does not use the "median of three values" method that the article says is used for "most" sensors (but not AoA). I agree, however, with your correction that it was not a direct AoA sensor failure such as occurred in the 737 Max incidents.
> It's undoubtedly a serious design flaw, but it's not even remotely in the same ballpark as the Max's flagrant disregard for all process and well known design standards.
It's not the same as MCAS in the sense that it's not an ad hoc addition to deal with an issue that arose in a redesign of an old airplane, true.
However, it is a case of (a) a flaw in an automated system causing the plane to automatically take an action that is unexpected and dangerous, instead of the automated system detecting the error; and (b) an automated system overriding the input of the human pilot in a case where the human pilot can plainly see that the automated system is doing something wrong.
Also, it illustrates a more general design philosophy with Airbus that has led to other incidents, which is to hide important information about what the automated system is doing from the pilots and limit their ability to interfere with its operation. The pilots have no direct readout of the AoA sensor values that the automated system is using, or indeed of most of its other inputs. It was also not clear to the pilots exactly what mode the automated system was in (they thought it was in Direct Law when it wasn't), and there was not a simple "stop the automation" button they could press to put the plane into a known manual mode with known behavior.
While I would agree that this is not the same specific failure mode as MCAS was with Boeing, I'm not sure it's not "remotely in the same ballpark" as far as long term implications are concerned.
As somebody who lives close to the Hamburg Airbus Factory and read a lot about the Boeing story: the regulators are more strict within the EU, and my feeling is the biggest mistake in the whole Boeing saga was to have them regulate themselves.
While there might be a economic benefit to not having to go the extra mile to get a regulators aproval, this can bite you really badly if you cannot uphold quality yourself any longer. And the interviews I heard wirh Boeing personel is nothing I ever heard even in personal exchanges with Airbus people. They surely also have their issues, bur to me it feels like a few magnitudes difference in severity.
So in short: underfunding the FAA isn’t doing you airplane manufacturers a favour in the long term. I know in the US people are usually anxious to give any job to the state, but regulating is actually one of the things they should do, and should do well
Airbus isn't focused on profit (cutting corners), it's focused on politics (i.e. providing jobs in different countries). Hopefully that would make (local) engineers more powerful...
The context of the reply is why Airbus would not encounter the same organizational faults as Boeing. The general consensus is that Boeing pursued profit over safety with respect to the MAX. & they did so by cutting corners.
I think it is fair to say that Boeing cut some corners which resulted in the current situation - but even Airbus surely only prioritises safety over profit to a point - and I'm also sure Airbus cuts some corners. And this is also not really clarifying why Airbus, a publicly listed company with shareholders, is not focused on profits.
I think what is being missed here is nuance - I don't think air-travel with 0 risk is possible - most things come with risk and if we are not willing to consider anything else nothing will ever get done.
There is being prudent and then there is being negligent - I think people conflate them. I don't think there is any publicly traded company that does not care about profit - Boeing is not somehow unique in this. If the profit is competently pursued then you won't jeopardise safety beyond a certain point though - because that will in the long term impact profits and shareholders who appoint execs are not benefited by reduction in long term profits and therefore the value of the company.
Airbus and Boeing are widely considered to be the one of most competitive and efficient duopolies on the planet. That might have a lot to do with the fact that they are based in two different large economies and cultures.
The nature of their products and customers, and the scale needed, may not lend itself to having a lot of smaller competitors. Where are the economies of scale (or other efficiencies) going to come from? This may already be reasonably optimal for large aircraft.
> America is going to pay for the cronyism that merged every airplane manufacturer into one and eliminated internal competition.
This is true, but the counterpoint is: America isn't going to pay very much for accidentally killing its last airliner manufacturer.
Airliners are a very mature market, with little incentive to innovate and minimal gains when you do. It's literally cheaper to operate 20 year old vehicles than replace them with the best available new ones! In how many other industries is that true?
And airliners are small: Airbus revenue is like $60B, Boeing (which also sees a lot of defense spending to pad the number) is $100B. No one else is even on the map. This is a tiny market, in a global sense. We're just stuck on the idea of it being important because of history: Airliners "feel like" a high tech growth industry of the future. They aren't. They're trains, basically.
The core devil's advocate position here is: so what? Boeing failed. Let them die (or rather, shrivel into the defense-only core of the company). Let the rest of the world fight over this tiny market with its shrinking margins. Nations that truly want to invent new things and grow in new ways[1] have better things to do and more important problems to worry about.
[1] Whether the USA still qualifies is sort of an open question, but for a different thread.
Their defense side is also seriously suffering. They've lost the vast majority of contracts in recent history and their main combat jet, the Super Hornet, was inherited in the McDonnell Douglas merger and continues to suffer under their management.
We pay for this all over the place and not just in planes. Look at it in communications, entertainment, social media. Stock price is valued as more important than choice for the consumer.
Eh, in the Bay Area we have plenty of public transportation agencies / systems (which all coordinate really poorly with each other), and none of them are great (though some are more cost-efficient than others, e.g. Caltrain vs. Bart).
None of them compete, effectively, since they’re in different coverage areas.
Except for bart, basically. And I certainly treat bart and MUNI as competitive products for commuting to work, although it doesn’t feel like MUNI does...
BART and MUNI have fundamentally different orientations, despite overlapping service along the Market Street subway.
BART's service is long-train (up to 10 cars) through service on fully dedicated trackways following a single through route within San Francisco. If you happen to be transiting any points between Colma and Embarcadero strickly along that route, BART is your best bet.
MUNI Metro serves multiple endpoints throughout San Francisco, several lines of which transit the upper level of the Market Street subway. Outside that route, the metro shares rights of way with street traffic, resulting in drastically less predictable schedules. The requirement to manage tight-radius curves and street traffic also limits the length of metro trainsets to a maximum of two coupled trolleys.
The results aren't pretty, for MUNI. But that's all but a given under the environment they're operating in.
>The results aren't pretty, for MUNI. But that's all but a given under the environment they're operating in.
Not necessarily. They could exclusively run fast 4 car trains along the length of the subway, with transfers to street lines. That would prevent a single street-level train from backing up the whole system. http://newmunimetro.com/m-market/
That's a possibility, though there's a long history of transit users prefering through routes rather than transfers. If Muni could maintain 4 minute headways (or shorter), consistently, in the subway, that might be an option. It would reduce the wait times inbound on the subway to an average of 2 minutes, which is tolerable.
You still end up with the service irregularities on the surface sections, unless those rights of way are dedicated. Something which really should have happened long ago on Geary and Irving/Judah, 3rd St., etc. Maybe with the dedicated transit route on Market the idea will spread.
Extending the subway further out is another option, though expensive and fairly unlikely.
But do they actually compete? Whenever I see privatized public transport it seems the systems cover different areas and in practice you either have only one real option or you have to pay for all options, neither of which leads to actual competition.
My understanding is in Tokyo they compete a little - that is there are a few people who are within walking distance to two different private operators. However even there most people are only really within talking distance of one line.
With land based transit competition it is really hard to compete because land within walking distance is finite. (if you don't demand walking distance you get less riders by a lot). Thus to have real competition you need to have extremely high density - 50 story apartment buildings with few parks or other open space, at that point one line cannot handle all the riders and a second line can compete.
I think the MTAs woes are unique to the MTA/management of the MTA and not lack of competition. Paris and Madrid have no problem building and operating trains at reasonable costs even though they also operate with no competition.
I'd argue the problem is endemic to large stationary organizations, but some do a better job than others at keeping it at bay.
It's interesting to wonder why. I think one aspect is the degree to which politically powerful are willing to fight it. Famously Stalin actually cared that the Moscow metro worked well, and it did, in a country otherwise crippled by complacent behemoths.
Perhaps the Parisian elite likewise take more pride in having a metro which works OK, are willing to spend more political capital fighting for it. They feel some obligation to keep up with Brussels & Berlin, perhaps that substitutes for competition?
I would kill for second avenue subway in 99% of America. It only sucks in Manhattan. MTA is the worst, except it’s also the best mass transit in the country.
If we could build subways for about of half the current low price by world standards (Spain or Turkey) cost most cities would have subways. However since New York "insists" on paying about 7x what Spain would for the same amount of subway it is just barely worth it to build the SAS, and anything with even slightly less ridership potential is a waste of money.
I have seen a lot of explanations of why the US pays so much more - they tend to not hold up. Note that last time congress asked the question the bill did not allow examining non-US construction for the report - something to write your congressman about.
> However since New York "insists" on paying about 7x what Spain would for the same amount of subway it is just barely worth it to build the SAS, and anything with even slightly less ridership potential is a waste of money.
Literally any amount spent on the subway will be returned in rent to landlords. You're just looking from the wrong perspective.
Not sure why you're downvoted. MTA basically has a license to print money. Their expenses keep growing while the service keeps deteriorating and fares increasing. They are very poorly managed and awarded the contract with no competition. The MTA has become too big to fail.
> Stock price is valued as more important than choice for the consumer.
By who? And why should those that value it more than choice for the consumer value choice for the consumer more? And how would they even go about doing that?
If you have cash to speculate, liquidate now- American market is going to take a dip in January with Boeing, which will be a good opportunity to re-invest.
In what sense? I work with a lot of Aerospace, Transportion and Logistics companies and I've personally seen tens of hundreds of companies that are suppliers for Boeing/Airbus. What do you think GE, United Technologies, Rolls Royce Aerospace, etc. all do?
Yes, there are hundreds of other manufacturers and many moving parts, which reminded me of SpaceX.
One of the reason SpaceX has been abled to save so much cost was that they made / design all the parts themselves, truly vertically integrated. And this has led to better design, lower cost, higher level of knowledge in every part of the system, and more innovation.
I remember there were so regulation that forbid AirCraft manufactures to do that, what was the rationale behind it?
I thought the example of SpaceX was quit well known [1], and the reason why SpaceX Rocket in itself, excluding the cost reduction of reusable luncher were much lower.
There were also numerous article and Interview from Elon Musk himself confirming that.
> Because SpaceX is a private company, it has not divulged the secret to its pricing.
?
> There were also numerous article and Interview from Elon Musk himself confirming that.
Do you honestly believe everything Musk says? He has a history of embellishing the truth.
I'm not saying SpaceX isn't vertically integrated, I just find claims surrounding anything Musk says dubious unless it's confirmed by 3rd party reporters.
They're far too horizontally integrated. Reducing vertical integration is part of their quality problem resulting from adopting black-box management, see:
but it may also mean far less chance to innovate production practice.
If vertical integration is always good, the ideal situation is a single producer for any kind of product and no suppliers, which doesn't seem to work too well either.
Efficiency and security are always traded for one another. Unfortunately, markets will tend to the short term benefits so the pendulum will swing towards efficiency until it’s gone too far and something causes it to swing back.
Up to a point. But when you get to the point that an industry is so vertically integrated that only one entity can viably compete, you have a monopoly.
There's no monopoly here, there's a duopoly. Airbus and Boeing are in fierce competition with each other. On top of that, the Chinese are entering the fray too.
Efficient market theory would suggest that there is no margin in equilibrium, and what looks like margin is actually the cost of capital (which all companies, big and small, have to pay).
That's incorrect - you would only expect no "margin" in a perfectly competitive market, which obviously isn't the case in the market for airliners.
In markets where firms have market power, there is an explicit and well-studied phenomenon known as "double marginalization"[1][2], which is what the parent comment is describing. Vertical integration is one possible solution to this problem, although there are other approaches as well.
Double marginalization also occurs elsewhere in the air travel industry. Imagine I flew on American Airlines from Charlotte to London, and then continued on British Airways from London to Lyon. If both airlines set their prices independently, then they would both add a markup, and the combined price of the itinerary would be higher than the profit-maximizing price that a single airline would set. In this situation, antitrust authorities will often allow the airlines to form a joint venture and coordinate on price-setting. This reduces horizontal competition (because e.g. AA and BA are no longer competing with one another for passengers on JFK-LHR), but can provide consumer benefits if eliminating double marginalization allows airlines to set their prices lower on multi-airline itineraries.
That's too broad a statement. There are some theories in economics that work very well, like supply and demand, or arbitrage theory. The idea of the cost of capital is also a fairly well-trodden one, it is taught in business courses, used on wallstreet, and seems to work in practice.
I can't think of a single broad economic axiom or theory that doesn't depend—wholly or in-part—on the principle of ceteris paribus, which excludes their practical application to essentially everything in real life.
In a few cases, economic theories do a passable job of roughly mirroring real-world behavior, but that's the exception and not the rule.
>on the principle of ceteris paribus, which excludes their practical application to essentially everything in real life.
When a principle is violated marginally, conclusions made based on the principle are themselves violated marginally. You can't write off chemistry because relativistic effects violate the conservation of mass any more than you can write off economics because no two soup cans are identical.
>If you break both of them up too much, they may be unable to compete against a major Chinese manufacturer when it scales up.
This is a crucial point that so many people seem to miss. If you want to break up these companies (manufacturers, banks), they are going to get absolutely crushed in the global economy, competing against Chinese state-sponsored companies.
In the game theory of open global commerce, it pays to cheat.
The other is to force investment (either from them or through government) to a third vendor. Bombardier and Honda seem really interested in entering the space, and maybe Dassault can be dragged into it, but its capital intensive.
The Boeing 787 battery issues shows exactly that they're vertically dis-integrated to the maximum extent possible. So what you're saying is the completely opposite of the truth.
I don't think cronyism is any less of a problem for Airbus than it is for Boeing. Boeing happens to have had a recent bad incident that got it a lot of negative PR. But Airbus has had past incidents due to design flaws that are just as shocking.
It's not just the airframe OEMs, but the entire supply base of aerospace manufactures has been going through a consolidation. Look at Rockwell Collins and Safran. But it's not all bad, most of this consolidation will lead to new opportunities for new suppliers.
Hmm, not so sure, it a global habit and for each country that does it, then it goes international. Lots of other countries merge their major manufacturers, or allow them to, then - being 5x larger - find themselves powerless to avoid being bought out by their American cousins.
Has happened to countless engineering, manufacturing, chemical and tech here in Europe. I suspect it would already have happened with most of the last remaining defence players were they not defence players.
We're starting to see similar now China has risen as far as they have. Real competition is really, really unpopular in today's world.
It will be interesting how Boeing/Airbus/traditional carriers react when China fully enters the market with Comac-built/branded planes. Commercial flights of its first plane, the C919 are slated for 2021. The whole 737 MAX fiasco really came at a bad time for the US aerospace industry, and if the other comments about Airbus being just as bad culture-wise are true (profits/jobs over serious engineering), then China could really be set up to take a lot of commercial aircraft market share over the coming decades.
It will be interesting how Boeing/Airbus/traditional carriers react when China fully enters the market with Comac-built/branded planes. Commercial flights of its first plane, the C919 are slated for 2021.
Eh, the Chinese aren't a threat despite what McNerney thought. If nothing else the C919 isn't Comac's first attempt at an airliner, the ARJ21 was.
Airliners are extremely complex. Take a look at Mitsubishi. They've got experience building planes, turbines, etc. Yet Mitsubishi is still struggling with the MRJ, in large part because the MRJ is the first Japanese built airliner in an extraordinarily long time. As for the Chinese, McDonnell-Douglas sold tooling to the SAIC (now Comac) so that they could build licensed MD-80s (some of which are flying in the US). The tooling was eventually used to develop the ARJ21 and Comac still couldn't make it work well. There are a few ARJs flying in China, but even the domestic airlines don't want them. The Canadians tried their hand at a modern airliner with the C-series, and that pretty much bankrupted Bombardier.
China could really be set up to take a lot of commercial aircraft market share over the coming decades.
Even if (or when) Comac were magically able to produce a competitive airliner, there's more to selling planes than just building them. Support is a huge issue. The Russians have significant experience successfully building airliners and yet even with western turbofans Sukhoi couldn't find a market for their SuperJet. They sold a few to the Belgians and the Mexicans but those have largely stopped flying. Why? There's no support. Boeing and Airbus have huge support networks all over the globe. Comac has absolutely nothing like this in the works or in place.
It's not fair because countries are made of individuals. The Chinese government won't let Chinese companies buy American planes and the American government won't let American companies buy Chinese planes. Both restrictions are unjustified regardless of the existence of the other.
What happens in that case is simple and obvious: the existing global trade barriers and protectionism will get worse.
The US will move to lock Airbus and China out of its massive, wildly profitable domestic airline market through protectionism. Which is exactly what China is guaranteed to do, either directly or indirectly, as it pushes its own airplane manufacturing efforts to the forefront in the pursuit of its economic self-interest.
How many Soviet-made jet planes did the US buy from 1950 to 1990?
Well TBF the soviet planes always looked scary even on the ground and my experiences as a passenger on them were not reassuring either. I don't expect the same of 21st century Chinese aircraft.*
In addition the US and EU may short-sightedly try to protect their aircraft manufacturers but US+EU are less than 45% of world GDP. Plenty of people will be perfectly satisfied with a Chinese plane when their only choices are all foreign manufacturers.
* This isn't to say I want to be first -- I typically wait a few years before flying with a new model, though it's hardly a perfect heuristic: I had no idea the 737-Max wasn't really just another 737.
The world was divided into two economic spheres during the Cold War.
The difference now with that China is that though some would say that China is capitalist in name only (and they wouldn't be completely inaccurate) it is part of the WTO and thus part of the global capitalist system to some extent. Consider for a moment that exports account for a greater % of its GDP than does the US.
Arguably China is much more like Japan of the 80s and Korea of the 90s than the soviets of the 50s.
Basically the tail, wings, radar cover, fuselage, interior, and assembly is Chinese – everything else is US and EU. (The C929 being co-developed with Russia has a greater percentage of parts home-made – this is exactly how China is ramping up its aircraft carrier development, methodically and incrementally bringing more and more expertise onshore).
Buying the C919 when it hits mass production will be like buying a very familiar but cheaper Airbus or Boeing equivalent. Neither Japan nor Korea nor Russia have ever managed to pull this off.
Who knows what will happen. Time will tell. Looking to the Soviet past is not a good indicator of what is coming down the pike imho.
China is still heavily dependent on Western jet engines and avionics. But they are getting experience building airframes, and they could potentially catch up in a generation or two on that given how slowly that part evolves. They won’t be able to build a 787/350 or even a 777 style carbon fiber airframe overnight, however.
There is no reason for the USA to block out Comac if they are flying with Pratt&Whitney or GE/CMF engines or Honeywell flight controls.
Which one are you talking about? The J-20 or FC-31?
The J-20 has appeared (and flied and demonstrated its weapon bay) on multiple public air shows where foreign medias were invited. I believe they also have a few squadrons in service already.
I'm sure Boeing would have loved to have those orders, but 50 planes is not catastrophic.
In terms of the aircraft group, Boeing has steadily growing 787 orders and deliveries, with about 500 orders yet to deliver.
In terms of their space program, they are close to testing their manned capsule and just got a light touch program review, while SpaceX got put through the ringer.
And there are other aspects to Boeing that I'm not familiar with, but I'm sure don't relate directly to the 737 MAX.
As for Airbus, they have had to kill their A380 program, seemingly prematurely, in the face of declining interesting and cancelled orders. So, it's not all roses on the other side of the pond either.
787 orders and deliveries are very nice, but the bread and butter of Boeing and Airbus remains the 737 and A320 families. As you say Boeing has 500 orders for 787 yet to deliver, but they most importantly have 4,500 of the 737 remaining to deliver. Same for Airbus, they have about 600 orders for the A350 yet to deliver, but they most importantly have over 6,000 A320 in the pipeline.
The biggest issue for Boeing is that the MAX sold about 5,000 frames vs 7,000 for the A320NEO, going from a 50%/50% market shares (737NG vs A320) down to 40%/60% market shares (737MAX vs A320NEO). On the other hand the A320 is practically sold out for the next decade (Airbus is aiming at a production of 750/year, and that's quite a challenge), so the ratio is unlikely to move much.
Thanks, interesting. Do you think this dynamic has already been priced into Boeing's stock now, which is why it did not move much on this 50 plane order?
Yes, I think it is, none of what I wrote should come as a surprise to anyone even casually reading news about Boeing/Airbus. Certainly not an analyst crunching numbers.
Got any further reading on SpaceX getting a tougher review due to the pot thing? It seems kind of silly, if a CEO is seen having a glass of wine outside of work is there generally a presumption that the company / it’s employees are drunk during business hours?
> In terms of their space program, they are close to testing their manned capsule and just got a light touch program review, while SpaceX got put through the ringer.
Except the whole point of this subthread is that Boeing's stock price never faces any actual consequences, regardless of how badly the company screws up.
Boeing will not be allowed to fail, even if it personally bankrupts every taxpayer in the United States. And they know it.
Puts are short term, not long term. I agree that boeing will not be allowed to fail. Let's assume that it gets that bad. At what valuation will the company in the immediate wake of a bailout? 125% of current value? Or 75% of its current value?
I think partly it’s the nature of the business. Even if every airline wants to drop the 737 and order all A32xes from now on, they can’t; Airbus simply doesn’t have the pipeline. Boeing will sell either a patched up MAX or a less ambition re-engine (a MEDIUM?) Probably for less money, but it’ll sell; the airlines really have very little choice.
it's worse than that : airplane pilots are certified for a particular set of aircraft (and that's why the 737 max came to existence). Even if a company wanted to boycott Boeing, on top of refresh its current fleet it would have to re-train and re-certified all its employees.
Weirdly enough, most of Air France & KLM fleet are comprised of Boeing planes
> Most of Air France & KLM fleet are comprised of Boeing planes
Are you sure about that? On WP I see 79 Boeing out of 223 planes for Airbus, but I’m not expert. Is there any wider fleet to consider? https://en.wikipedia.org/wiki/Air_France
The USG is already putting tariffs on foreign planes. We have all the downsides of nationalization without any of the benefits of collective ownership (except for the fact that Boeing is in people's retirement accounts, which is a little collective ownership). Capitalism and socialism on their own both have provisions for taking care of the elite and taking care of the average person. What we have now with these pseudonational industries is a combination of both that takes the elite-benefiting parts of capitalism and combines them with the elite-benefiting parts of socialism.
"The World Trade Organization said on Thursday the United States had ignored its request to halt a subsidized tax break for Boeing Co in its main plane-making state of Washington as a 15-year-old transatlantic trade row edges towards tit-for-tat sanctions."
It's funny how the US complains about China propping up or even owning (usually partially) big corporations there, but they do the same with Boeing and many other companies.
At least in China, the government is the one that has the final say on everything, and the state-owned corporations have to do what the government wants. Here, the corporations get to do what they want, but they still get subsidies from the government but without being required to operate in the interests of the government or the nation at large.
According to their most recent 10-K, the Defense, Space, and Security business unit represents about 23% of Boeing's revenue and 13% of their profit. Some portion of the Global Services revenue comes from government contracts as well, though, so the true contribution is higher.
In analyzing a stock price you need to look at what other people perceive about it, which is not the same as objective facts. So in this case it tells us that other people don't think the company's sales will be hurt much. I believe they are wrong (and sold most of my Boeing stock right after the second crash) but only time will tell.
1. The market correctly understands that Boeing is backstopped by the US government. Removing any large downside risk.
2. Even including the problems with the 737 max, Boeing has an exceptionally good safety record.
3. Regulatory capture of the FAA by Boeing is bad news for consumers, but not necessarily for shareholders.
4. Investing in aircraft manufacturers during a growing economy is reasonable and Boeing is one of only two airplane manufacturers positioned to take advantage of the trend.
The fact that these news are not catastrophic, but rather wishful politically-motivated thinking. Boeing is here to stay, until maybe a viable competitor in China springs up.
My takeaway is that Airbus and Boeing both need to make progress on their clean-sheet midsize designs. The A321XLR sounds great but it's kinda what Boeing has been doing to the 737, milking it for decades. The A320 is a newer design, for sure, but it's not young.
I won't miss the 737. What I'd love to see is a twin-aisle-but-small short range aircraft. Yeah, that won't happen, but it would be comfy.
The Airbus A220 (formerly the Bombardier C-Series) is a clean sheet design and by most accounts, one of the best designs of its class today. It widely considered to be a next generation commercial aircraft, and will be unsurpassed by competitors for a couple of years until they catch up with newer designs. It’s enjoyed rave reviews by consumers and airplane nerds love it.
Delta has already bought a bunch and I look forward to these planes becoming more and more common.
Obligatory Wendover Productions video on the A220 and the fight with Boeing
IIRC, Boeing muscled the C-Series out of the market with race-to-the-bottom tactics, which eventually led to the Airbus acquisition of the program. If Airbus manages to meet its targets with the A220 this might constitute in ironic justice.
I look forward to the day when most of my regional flights are on A220s. CRJs are a little long in the tooth. ERJs are decent but A220s are much better.
Cabin config is of course airline dependent but in one of the default configurations the A220 middle seat is actually wider than the flanking seats. In a world no one cares about customer comfort this is a nice reversal.
As a frequent flyer customer I find comfort has much more to do with aircraft than cabin service: I flew 2 United segments in the past few days on 737 equipment. United flight attendants are the highest paid among US airlines but United doesn’t spend enough money on ops. Aircrafts had so many technical issues and both segments were heavily delayed and very uncomfortable. No amount of customer service would have helped.
My memory is that Bombardier expanded into territory they had never been in; outsourced to their partners a lot of details; had significant issues during major-part integration; and faced huge timeline crunches and overruns.
They also missed completion and delivery of air-frames on contracts with regional airlines. And other signs of "we messed up" on a project.
There seemed to be lots of complaints at the time (on Canadian forums and news-stories) about how the family that owns Bombardier would have been fired as C-levels in a public company based on this fiasco.
OTOH, I haven't heard anything about this in a long time.
Because it costs money and Boeing would rather have larger executive bonuses than pay for a new design. The fact that a new design would be better for the future health of the company is irrelevant: the executives won't be there in 20-40 years, so why should they care about that? All that's important is their compensation in the next few years until they land a gig somewhere else.
It costs billions and take a decade. This is something to need to time very right, otherwise you can miss a shift in the market (see A380) or a new technology (like a new engine) after you started, or get a competitor to release before you. In the meantime, the current backlogs are full, so there's no rush; everyone is waiting for somebody to make a move and enjoying profits in the meantime.
Twin aisle planes just aren't economical for 737-class short haul. Boeing's next plane[0] will probably be a twin-aisle design, but it's targeted as a slightly larger 757 replacement. Maybe if we're lucky we'll see that evolve to include a shorter variant to replace the MAX.
Got on a Delta 767-200 flight the other week and I loved it. Coach had so much room it was like sitting in first class on narrow-body. I had one of aisle seats on the side with only one row neighbor.
That's in the pipeline, but Airbus (and probably Boeing at this rate) are waiting for the next step up in engine technology before they make that investment so as to get the maximum step-up in fuel efficiency, and that is due in the 2025-2030 timeframe.
Absolutely- For a few years I was traveling over 100k miles annually interestingly mostly in the back of the bus on United's 757 fleet between EWR and SFO, and if I had a choice, I would choose a double aisle over a single aisle any day. In fact, I would do almost anything to avoid the 757- it's one of the oldest airplanes still in service, the last rolling off the assembly line 15 years ago.
Just the higher ceiling height on double-aisle aircraft make the trip so much less claustrophobic, and the double aisles mean that you aren't essentially held hostage until the service cart rolls by.
The 757 is an old, loud, design and loading/unloading it took forever, all the while you had cramped overhead bins. It wasn't often I could avoid the 757 when going to SF, but if I had any option, I would avoid it. Literally any other plane in service is a more pleasant experience. I always thought it was somewhat ironic that United chose the oldest plane in any major airline's fleet to fly between two tech hubs- those 757s were also pretty much the last to get wifi onboard as well.
Well, the 737 MAX isn’t a valid alternative to anything while it’s grounded.
Maybe the concept of the MAX being a replacement was valid but, based on Boeing’s blundering development of the plane, can you really fault anyone for avoiding it?
Will the MAX fly again? Will it crash again? Will passengers trust it again?
Too many unknown questions make it hard to plan ahead.
Actually, it's really not. United has already bought MAXes to replace other planes, but to replace their 757 they waited Boeing new annoncement that was supposed to be this year (except Boeing delayed it to next year a few months ago).
It just occurred to me that Boeing has been quite successful with branding ("Dreamliner", "MAX"), but maybe wishes it hadn't been... Everyone now knows that MAX is bad, but how many people can tell the difference between a 737-8 and a 737-800?
Boeing still may rebrand the plane and stop calling it the MAX, as you say it was only ever a marketing name. The plane is certified as the “737-8”, “737-9”, etc.
I have been thinking about how to implement that after the MAX starts flying again. Flight search interfaces don’t seem to filter on equipment. And of course, equipment gets changed at times, so you may book one aircraft and have a different one swapped in on the ramp. I wonder if after you have checked in, and the airline swaps in a MAX, if you can get credit for your ticket if you refuse to board a MAX? I would guess not. (Yes, I know airlines try to avoid changing equipment because it causes reseating hassle and crew scheduling hassle. But it does happen)
Seems like you could either target routes that don't fly 737s at all, just much bigger or much smaller planes. Or you could stick to carriers that don't own any 737 MAX 8's such as Amtrak and SNCF.
It may not filter on equipment, but they do show you what kind of plane you are flying when you are buying the ticket so you can decide right then if you want to buy something else instead.
Fleets are often completely from one manufacturer. For example, easyJet is all Airbus while Ryanair is all Boeing. I can reasonably easily avoid all Ryanair flights in favour of easyJet.
I flew about the same, fortunately never on a MAX. That being said I'm in the same boat, you couldn't pay me enough money to take a ride on a plane that the pilot literally cannot fly without the MCAS system functioning perfectly.
Maybe I'm just blissfully ignorant to how bad all the planes in the air are... but I feel like pilots would be screaming bloody murder if they were all as bad as the MAX.
If the MCAS completely disengages, the plane is perfectly flyable under most conditions. It will just pitch up more than other planes in turns, which could be manually fixed by adjusting the trim. The MCAS system is set to automatically adjust the trim, and the crashes were caused by it doing so when there was no need.
>literally cannot fly without the MCAS system functioning perfectly.
This is not the problem. The aircraft's performance is within the bounds of "perfectly acceptable for what it is" but it is too different from the existing 737s in a particular area. If the portion of the MCAS that handles this particular area were just turned off the MAX would fly fine but it wouldn't be close enough to a 737 for anyone to say with a straight face that pilots can fly without retraining. This need for pilot compatibility lead to a faulty implementation of MCAS of which flies the plane into the ground in certain conditions.
That's a silly comparison. The risk of death from flying in a MAX is still wildly lower than the risk of dying in the safest car on a mile by mile basis.
You didn't call anyone stupid, you asked a passive aggressive question designed to demean without advancing any worldviews or assertions of your own. That's fucking stupid.
The Max wasn't supposed to replace the 757 except in a few niche cases. As mentioned in the article, the nma launch delay being put off to 2020 lost Boeing this contract.
Pilots have been saying this for a long time. But it started with anger towards the constant expansion of the 737 (the 900 has some additional limits that hit hard when icing conditions in some places like Denver). The 757 was the sports car of airliners but with a high price tag (and it never really displaced the 727). As for the A321...it had a rocky start.
757-300 and 787-8 have similar seat counts, but the latter is overkill in terms of range and somewhere in the ballpark of double the cost of an a321. Not to mention that pilots that are type certified for larger twin-aisle aircraft tend to be more senior and expensive than those that are certified for midrange single aisle aircraft.
> United’s 757 planes will reach the end of their lifespan in about a decade
About a decade?! I was on one of their 757s returning to Dublin a while ago; it felt like they were already pushing the end of its lifespan. I suppose the repair of the interior doesn’t say much about the airframe...
Airplane lifespans are determined by pressurization/depressurization cycles (i.e. number of flight trips), not distance flown or interior wear and tear.
Yep, I mean I know it’s nothing to do with the interior. But this didn’t seem like a plane that was being taken care of; it felt like one they intended to scrap the next week, so there was no point putting the work in any more. I was honestly kind of shocked; hadn’t been on a plane like it since Ryanair modernised their fleet.
Most airlines don't bother refitting older aircraft, or if they do it's just upgrading the entertainment system. Top tier airlines (e.g. Emirates and Singapore) typically refit their aircraft every 10 years, which involves pretty much reassembling it from scratch, so they don't feel as old.
You can install new interiors at any time, it's just not worth it for old planes with a limited future (because they're gas guzzlers).
Planes can essentially fly indefinitely if you're willing to put money into ongoing maintenance. For instance some B-52s will have served for roughly 100 years by the time they are retired.
>Airlines receive only about 60% of their revenue from passengers directly (the other 40% comes from selling frequent-flier miles to credit card companies). But of that 60% of passenger consumer revenue, the big money comes from business travelers – as opposed to those flying for leisure or personal reasons – in percentages that far outweigh their numbers. Business travelers account for 12% percent of airlines' passengers, but they are typically twice as profitable. In fact, on some flights, business passengers represent 75% of an airline's profits.
I think that video conferencing and collaboration technologies have already curtailed business travel, the most profitable part of the airline business.
The high volume in terms of passenger numbers is dominated by leisure travel. Video conferencing is unlikely to affect this (although the family did a Hangout at Thanksgiving), but it might be affected by stronger environmental campaigns or by a significant economic downturn. In fact, I think an economic downturn could cause a fairly steep drop in leisure air travel.
When they say "business travelers", do they mean people traveling for business, or people traveling in business class? I am fairly certain that those are almost entirely disparate groups at this point.
I would so love this. It seems like it shouldn't be too much to ask to spend 50% more and actually get an armrest and a seat that doesn't make my tailbone numb after a few hours. In percentage terms, it's not a lot of space. If a couple inches for an armrest is to wide to fit in an existing plane in a 3+3 config, maybe they should plan better for the next generation of planes.
Some writers say the bombardier C has widened the middle seat in 3 abreast, which would be a significant thing if true.
My personal view, (from the luxury of Business, now moving back south as I cease work travel) is that seat pitch, seat size, and seat density should be regulated. That removes competitive tension around "who suffers more for price" but at a socialized cost of travel costs more than bucket seat prices. I know thats anti-democratising in the specifics of who now will be able to afford routine travel, but the cram-them-in approach has got beyond acceptable.
There will not be a ceiling anytime soon. Cheaper flights mean people relocate farther from family and companies take contracts for jobs in remote areas etc. People want to travel extensively. If people could teleport they would. There is a huge latent demand from developing countries too.
That is unless we get a steep carbon tax. Hopefully we will.
Fun fact: United used to be part of Boeing. The two were split in 1934 when a scandal around air mail pricing led to laws saying you couldn't both make planes and operate them commercially.
Sometimes this has unintended consequences. For example, not being able to make cars and sell them directly as created a system that doesn't necessarily benefit consumers.
Australia has media policy like this in regard to newspaper TV and radio in Metro areas. Didn't stop Rupert Murdoch centralised ownership of media but kind of kept it at bay. Also banking.
It offers a detailed look at Douglas Aircraft and their doomed attempt to boost profits via outsourcing.
Those familiar with the commercial aviation business know that Boeing's "purchase" of McDonnell-Douglas resulted in wholesale importation of Douglas's accounting wizardry to what had been a largely engineering- and safety-driven corporate culture.
Relevance to the MAX fiasco and the tardiness of Boeing's NMA designs is left as an exercise to the reader…
What’s the state of mechanical engineering Software tooling / infrastructure On Linux and UNIX-like operating systems? I know Solidworks and AutoCAD are primarily Windows-based software, with proprietary data formats like .SLDPRT/.SLDASM (Solidworks Assembly) and high vendor lock-in. Why haven’t we seen greater adoption of scriptable, composable utilities (like a finite element analysis simulation) that might enable better horizontal scaling and commoditization of complements? Is it because hardware and mechengr is capital intensive already and high capex on software is justifiable? Seems to me like a first principle (software is free to copy) just waiting to be executed on.
Might make entry into otherwise moaty markets like aerospace a bit easier.
Aerospace was the earliest adopter of standard CAD data formats (ISO 10303 [1]) and the current development is mainly funded by Boeing and Airbus. You could build something on top of Open Cascade Technology [2] if you want an open source solution, BRL-CAD supports STEP too.
FreeCAD is not bad and used pretty extensively by the 3D printing hobbyists. It's nicely script-able with Python.
However, from my experience, it's still nowhere near the level of polish that e.g. Solidworks has, so professional work is still primarily done with non-Free tools.
I have no direct information, but I'd imagine the big aerospace companies have significant proprietary internal tooling, specialized to their own work flows and IP.
It's surprising airbus hasn't eaten more of Boeing's lunch. The A32x series planes fit the roles of the 737/757/767 seemingly, and likely don't require new certifications to fly each in the series. I think boeing has not only lost customers from the 737 max but confidence from people actually flying boeing jets as a whole. I for one look at the plane I'm flying on when buying tickets, I pay more for planes that have good to great safety records. I can't be alone in that.
They're production constrained.
The backlog for A32x is like 10 year long.
At some point, better a slightly inferior plane now (well, in the next few years) than in 20 years.
I assume they don't increase production (or at least not enough to massively reduce this backlog) because they don't expect this to keep up, and it's a massive investment.
You think they could have predicted the need for a 757 replacement and realized the 737 isn't it. Or just kept updated 757s in production, just like the 737 has been.
Boeing's next plane will likely be a 757 replacement[0]. Part of the reason that the MAX exists is the clean-sheet replacement designs take a long time (and take longer than anticipated/desired even after accounting for the fact that they take a long time).
The A321XRs are super long single-aisle planes and they're planning to use them on trans-atlantic routes. 6 hour+ flight times on single-aisle configurations will make a poor user experience even worse.
Single-aisle airliners are already super common on 6+ hours transcontinental flights in the US, and relatively common on shorter transatlantic flights from the US east coast to Europe (where the single-aisle 757 these jets are replacing are already used). Consumers seem to tolerate this just fine.
From a different perspective that's what you got when company are obsessed to save money everywhere no matter what it takes, to the point to outsource airplane control system software to India at $9 per hour, we had airplane-battery-problem a few years back at Boeing due to the same reason, now it starts to kill people, where is the end?
People buy airplane for safety first, nobody dares to buy them no matter how cheap they are if they will end up killing people on board.
