Boeing in no rush to fast-track future widebody strategy

• Production ramp-up beyond 10/month inevitable with 787-10X development
• 787-10X Gate 4 formal launch scheduled in June 2013
• 787-10X MEW determined at 264,000lbs, versus 787-9′s 250,000lbs
• 787-10X may feature improved range, become platform for rolling out improvements
• Rolls-Royce Trent 1000 Package B still 3% higher than original SFC
• 787-8 to be “few hundred kilograms” over Rev K specification on MEW by LN140-150
• Boeing likely to launch 777-300ER+, reducing fuel burn by 4-5%

Since the European plane-maker Airbus inaugurated its sprawling 74,000m² final assembly line (FAL) factory for the US$15 billion A350 XWB (Extra Wide Body) aircraft programme in Toulouse, France on 23rd October, the potential competitive response from its transatlantic arch-rival Boeing has captured widespread media attention. As Airbus makes progress in manufacturing the first A350-900 flight test aircraft ahead of its first flight in mid-2013 and first delivery in the second half of 2014 following a string of delays, Boeing is under increasing pressure from some of its customers to launch a revamped 777, dubbed the 777X, sooner rather than later as the future widebody battle begins to take shape.
Hong Kong-based Cathay Pacific Airways, a strong Boeing 777-300ER customer with an eventual fleet of 50 aircraft, has ordered an additional 10 350-seat Airbus A350-1000s this July with a total of 22 A350-900s and 28 A350-1000s on order. United Airlines, the world’s biggest airline and an airline considered close to the US plane-maker, is reportedly holding discussions to order additional A350-1000s, or switch some of its 25 A350-900s on order, to the larger variant as a 747-400 replacement.
And the outspoken chairman of Dubai-based Emirates Airline, Tim Clark, is increasingly vociferous and exerting even more pressure on the airframer to move swiftly to launch the revamped 777X that features a supercritical carbon fibre reinforced polymer (CFRP) wing and a next-generation engine.
Rather than responding swiftly, Chicago-based airframer Boeing seems to be overprotective of its darling, the lucrative 365-seat 777-300ER cash-cow aircraft that helped garner 200 sales for the jet last year alone albeit this year’s sluggish global economy dragged the year-to-date net sales to only 17 examples at press time.

Image Courtesy of Boeing

Production ramp-up beyond 10 per month inevitable with 787-10X
In contrast to the notion that Boeing’s inaction on its future widebody strategy is effectively ceding grounds to Airbus, Boeing is arguably taking the time necessary to develop products that meet customers’ needs and deliver shareholder returns by understanding the future widebody market more fully before finalising its plan and making commitments that carry significant implications on the company’s future for years and decades to come.
Quite frankly, determining the future widebody production timeline is a decision that Boeing should not take lightly by any means as it not only involves billions of dollars in capital investment, it also bets the entire company’s future on these key development projects, thereby considerably eroding the margins of error in the lucrative twin-aisle market which is forecast to require 7,950 new airplanes valued at US$2.08 trillion in the next 20 years, even eclipsing the single-aisle market over the same period in terms of value which will see 23,240 new airplanes valued at US$2.03 trillion being demanded, according to the latest current market outlook (CMO) released by the world’s second-largest airframer.
The stakes involved could not be any higher. This is particularly true after the bitter lessons Boeing learnt from the difficult initial stage of the 787 production following its roll-out in July 2007, when the delamination in the 787′s side-of-body area, shortage of fasteners and a 58-day International Association of Machinists and Aerospace Workers (IAM) strike in fall 2008, brought the programme to its knees. In order to enhance the control and oversight over the 787′s outsourced global supply chain, Boeing agreed to pay US$580 million in cash and another US$422 million in advance payments to buy out Vought Aircraft’s 50% stake in Global Aeronautica’s South Carolina plant and subsequently Alenia’s remaining 50% stake in 2009.
This, coupled with an in-flight fire in November 2010 over Laredo, Texas due to a foreign object debris (FOD) in the P100 electrical panel that prompted a redesign in the aircraft’s electrical system software (ESS) and build quality issues such as the incorrectly installed shim inside the horizontal stabiliser built by Italy-based Alenia, resulted in perennial delivery delays and cost overruns which saw the first 787 only being delivered on 25 September 2011, more than 3 years late from the originally envisaged May 2008 delivery target.
As it currently stands, the gross inventory of the 787 is US$24.8 billion at the end of the 2012 third-quarter, US$1.3 billion higher than at the end of the second-quarter, with a US$14.3 billion deferred production balance featuring 53 work-in-process (WIP) examples, which is expected to hit a peak of US$20 billion and start declining steadily afterwards following successfully achieving the ambitious production ramp-up to 10 units per month by the end of 2013.
Therefore one of the most important pre-requisites of the formal launch of the 323-seat 787-10X is the supply chain readiness to ramp the 787 production beyond the 10 per month production rate, which further strengthens the business case of the 787-10X in terms of availability, margin and production cost, thereby improving the possibility of successfully achieving profitability of the entire 787 programme in one fell swoop.
For example, the backlog of the 787 programme remains strong at 806 unfilled orders, after delivering 38 airplanes since September 2011 with a total order tally of 844 units, and current 787 deliveries are already stretching into the 2018-2019 timeframe, if not longer, which implies that should Boeing be serious in reducing the size of its backlog and bring the game-changing 787-10X into the marketplace by 2018-2019 as currently envisioned, a production rate ramp beyond 10 aircraft per month is inevitable.
Former Boeing Commercial Airplanes (BCA) chief executive Jim Albaugh had hinted in April this year that the company’s two 787 final assembly lines in Everett, Washington and North Charleston, South Carolina, have the capability of producing 7 examples per month for a total of 14 units per month after ramping up the 787 production to 10 units per month at the end of 2013, with Everett churning out 7 examples per month and the South Carolina line producing the remainder.
The recent successful achievement of a rate break to 5 airplanes per month with the roll-out of LN83 does give Wall Street analysts and investors alike grounds for some comfort and more confidence, as Boeing seems to be on track to achieve a rate break of 7 per month in March or April 2013 before finally reaching the 10 per month milestone at the end of 2013. This has renewed the general confidence in the 787′s learning curve and the company’s cost-reduction initiatives undertaken to improve the profitability of the programme.
“Unit deferred production (DP) declined to ~US$100M from US$118M in Q2. However, this is a blend between 3 learning curves: two production lines (a more mature Everett & Charleston, which is just ramping) and EMC (change incorp). Everett has made the most progress and EMC is doing okay, but difficult change incorp units remain. DP should peak late ‘14/early ’15 at ~$20B ($14.3B in Q3), which marks the milestone at which cash cost matches book cost. Said differently, BA expects DP/unit to fall from $100M/unit to zero in 8-10 quarters, but the slope remains anyone’s guess due to the 3 curves,” Credit Suisse analysts wrote in a note to clients on 24th October.
“We now see Boeing as on the backside of challenges on the 787. We now see the 787 as proceeding well on schedule and quality, which should drive top and bottom line performance and cash flow,” New York-based boutique investment bank Bernstein Research said in a November 19th note to clients.
In doing so, not only could Boeing reap the benefits of economies of scale and adopt more lean manufacturing practices on the 787 production line, thus lowering overall per unit production cost and improving the unit profit margin, this also opens the door for better 787 pricing after early unsatisfactorily low 787 pricing, coupled with sizeable compensation related to the perennial 787 delays, resulted in deepening losses as Boeing delivers each early-ordered 787, evidenced in Boeing Commercial Airplanes’ declining operating margin in the 2012 third-quarter to 9.5% compared to 11.4% a year ago.
Hence Boeing must be careful not to provide too much heavily-discounted launch pricing to potential 787-10X customers as some 787-9 customers are seeking to switch to the larger double-stretched variant as a means of providing indirect compensation for their delayed 787-9 deliveries. According to Aspire Aviation‘s sources at the Chicago-based plane-maker, one such customer is Singapore Airlines (SIA), which has remained very keen for its wholly-owned low-cost subsidiary Scoot Airlines to be a 787-10X launch customer through a combination of order conversions and additional orders in order to operate a mixed 787 fleet that suits its needs over medium-haul intra-Asia low-cost flights with the -9 complementing this over the longer-haul low-cost market segment, after transferring its 20 787-9 orders to Scoot on 24th October.
Simply put, Boeing must redouble its effort to maintain the pricing of the 787-10X and not to cannibalise its margin for it to have a realistic chance of achieving a low to mid single-digit margin over the initial production block of 1,100 units as it adds an expected wave of fresh 787-10X orders to its order book once it is formally launched.
This very need to boost the profitability of the 787 programme by launching the 787-10X variant, which makes successfully achieving the ambitious 787 production ramp-up all the more important, Aspire Aviation believes, complicates the talk with its engineers union Society of Professional Engineering Employees in Aerospace (SPEEA) as Boeing on the one hand cannot let its labour cost spiral out of control amid intensifying competition with Airbus in the widebody segment, yet on the other hand it cannot risk derailing the 787 production ramp-up plan which is crucial to the 787 programme’s profitability and its 787-10X development.
Nevertheless Aspire Aviation predicts an eventual agreement being reached by both sides despite SPEEA’s balking at Boeing’s second contract offer which was termed as “across-the-board pay and benefit cuts” despite an improved offer of annual pay raises of 4.5%, 4%, 4.5% and 4% in each of the following 4 years for the union’s engineers, or 3.5%, 3%, 3.5% and 3% for its technical workers over the same period, as both sides have incentives to create the common good and make Boeing successful in the future.

Image Courtesy of Boeing

787-10X platform for rolling out improvements
In the first step towards formally launching the 323-seat 787-10X double-stretched variant, Boeing’s board of directors has given the authority to offer (ATO) over the 787-10X in October, which enabled Boeing to advance its commercial talks and discuss pricing details with potential customers such as Scoot Airlines and British Airways (BA), which Aspire Aviation‘s sources have said is in “advanced discussions” for up to 60 examples as a replacement of its 46 strong Boeing 777-200ER fleet over most transatlantic routes (“Launch of Boeing 787-10X has implications on 777X programme“, 22nd Oct, 12).
“We are beginning to discuss more details about the airplane with customers. We anticipate strong market demand for this third and largest member of the 787 Dreamliner family,” Boeing spokeswoman Karen Crabtree was quoted as saying.
“The timing of a decision to launch the programme will depend on market response during this next phase of our discussions about the airplane”, and that those discussions are “conditioned upon our obtaining final board approval to launch the programme at a yet-to-be-determined date”, Crabtree added.
While this has spurred significant interests from potential customers such as Qatar Airways whose chief executive Akbar Al-Baker characterised the 787-10X as having “one of the best seat-mile costs of any airliner”, Boeing officials indicated there is still some way to go before its formal launch.
“We’ve got a lot of support all the way through the company including our board of directors. Clearly our customers have told us that they would prefer us to focus on fuel-burn economics versus extending range,” Boeing 787 programme vice president (VP) and general manager (GM) Larry Loftis said on Monday.
“We still have some more work to do before we’d be ready to launch the programme and/or be given authority to launch the programme,” Loftis said.
Indeed, Aspire Aviation‘s multiple sources at Chicago-based Boeing have independently confirmed that the 787-10X’s formal launch, or Gate 4, is currently scheduled to take place in June 2013 ahead of the Paris Air Show next year and that Boeing is eyeing the 787-10X as the platform for rolling out further improvements.

	787-10X
3-class passenger no.	323
Range	6,700 nm (GE) 6,750 nm (RR)	12,408 km (GE) 12501 km (GE)
Max Take-off Weight (MTOW)	250,800 kg	553,000 lb
Max Landing Weight (MLW)	201,800 kg	445,000 lb
Max Zero Fuel Weight (MZFW)	192,800 kg	425,000 lb
Manufacturer’s Empty Weight (MEW)	119,748 kg	264,000 lb
Overall length	68.28 m	224 ft
Wingspan	60.0 m	197 ft
Diameter	5.77 m	18.9 ft
Cabin Width	5.49 m	18.0 ft
Engines	Rolls-Royce Trent 1000-TEN General Electric GEnx-1B PIP 2
Thrust (lbs)	76,000 (RR) 75,000 (GE)

Source: Aspire Aviation
For instance, engine improvement is going to be a key focus of the 787-10X development, with the more fuel efficient 76,000lbs Rolls-Royce Trent 1000-TEN (Thrust Efficiency New Technology) engine and 75,000lbs General Electric GEnx-1B PIP 2 (performance improvement package) engine being featured.
In particular, the new Rolls-Royce Trent 1000-TEN engine would reduce the engine’s specific fuel consumption (SFC) by 3% from the Package B standard and meet the original SFC target after the latest tweaks to the engine included in the Package B improvements still had a SFC shortfall of 3%, against earlier reports of the Package B engine missing the original SFC by 2% while the Package A engine had a 4.3% SFC shortfall, people familiar with the situation said. The TEN engine will incorporate design tweaks such as rising line intermediate pressure compressor (IPC) and blisks in the first 3 stages of the high pressure compressor (HPC) but it will only enter into service in 2016, implying that the Package C engine which provides a 1% incremental improvement in SFC is still 2% short of the original target in the foreseeable future.
In addition, the manufacturer’s empty weight (MEW) of the 787-10X has settled at 119.7 tonnes (264,000lbs), versus the 787-9′s 113.4t (250,000lbs) and is “disproportionately larger than an increase required under a simple stretch”, suggesting that Boeing could yet raise the 787-10X’s maximum take-off weight (MTOW) of 250.8t (553,000lbs) to further improve the aircraft’s payload/range performance, the same sources say.
This could satisfy different customers’ requirements by allowing a higher maximum take-off weight (MTOW) which Asian airlines could utilise by adding more seats and minimising the seat-mile cost of the aircraft on intra-Asia routes or utilise the aircraft’s range fully at a reasonable payload over longer sectors such as transatlantic routes to be flown by British Airways (BA) or other European and US carriers, thereby solving the dilemma in one fell swoop and catering to the demands by aircraft lessors such as Air Lease Corporation’s (ALC) founder and chief executive Steven Udvar-Hazy who expressed publicly of wanting to see the -10X’s range being increased to 7,000nm mark.
Currently, the 5.49m (18ft) stretch of the 280-seat Boeing 787-9 with a 4-frame stretch in the aft fuselage and a 5-frame stretch in the forward fuselage has a range of 6,700nm or 6,750nm when powered by the GEnx-1B PIP2 and Rolls-Royce Trent 1000-TEN engines, respectively.
This bodes exceptionally well for the 787-10X’s market appeal when considering its 25% lower block fuel burn per seat than the A330-300, in addition to a 10% and 5% lower cash operating cost (COC) per seat than the 314-seat A350-900 and 350-seat A350-1000, respectively. This is particularly attractive for airlines on medium-haul routes where the extra range is not needed and the 787-10X’s existing range of 6,700nm could already cover 85% and 84% of all the 353-seat 777-8X and 314-seat A350-900 missions, respectively, as well as 96.5% of A330-200 HGW’s (High Gross Weight), let alone the 787-10X seats 27.6% more passengers at 323 seats in a standard 3-class configuration than the 253-seat A330-200 and has a larger revenue cargo volume.
The 787-10X is currently envisioned to reach ‘Gate 4′, or formal launch in June 2013, the milestone of firm configuration in the second half of 2014, a roll-out in first half 2017 followed by an entry into service (EIS) in 2018 to 2019.
“The market will tell us really when that is, but really we’re looking at the back end of this decade,” Boeing 787 programme vice president (VP) and general manager (GM) Larry Loftis said.
In the meantime, the introduction of the 787-10X could feature new improvements or weight savings that are likely to benefit its smaller siblings, especially the smallest -8 variant which Aspire Aviation firstly reported Boeing is going to miss the originally targeted manufacturer’s empty weight (MEW) and airline-specific operating empty weight (OEW) by line number 90 (LN 90) and that the 787-8 is still going to be “hundreds of kilograms” overweight compared to the ‘Rev K’ specification by LN140-150, people close to the matter said.
As the significantly lighter 787-9 parts become more readily available, the overweight issue of the -8 should be improved gradually, although Boeing has not set a new LN target for the -8 meeting the original weight specifications as of this writing. This is evidenced by the fact that the first 787-9 to be built, LN126, will meet its original MEW and OEW targets with later-built examples being 2% underweight, Aspire Aviation reported, helped by the elimination of side-of-body modification which saves 363kg (800lbs) in weight as the two titanium fittings installed on the upper and lower sides of each 787-8 wing are held together by hundreds of fasteners, thereby incurring a weight penalty and increasing fatigue risk.
“The weight of the airplane [787-9] has been very stable through the whole programme,” Loftis revealed. “We improved it [by] a couple hundred pounds,” Boeing Commercial Airplanes (BCA) senior vice president (SVP) and general manager (GM) of airplane programmes Pat Shanahan commented.

A350-1000 brings the widebody race on
While the 787 is facing a declining risk profile in spite of the production ramp-up and 787-10X development, the pendulum is swinging in the opposite direction for Airbus’ A350 XWB (Extra Wide Body) programme.

After a €124 million special charge recorded in 2012 first-half and pushing back the entry into service (EIS) of the baseline A350-900 variant to the second half of 2014, Airbus has managed to resolve the automated wing drilling glitches at its Broughton, UK wing factory and A350 programme manager Didier Everard expressed his confidence of meeting the mid-2013 first flight target.

However, the automated wing drilling glitch was simply one of many challenges facing the programme, with weight being another notable example. According to Aspire Aviation‘s sources at Airbus, the baseline A350-900 variant is around 3 tonnes overweight whereas the -1000 is approximately 5 tonnes overweight, with Emirates chief executive Tim Clark saying in an Aviation Week report the aircraft is “overweight and late” and the carrier’s -1000 order “is in limbo”.

“That’s still to be seen as far as the weight of the aircraft is concerned. But in the briefings over the last 24 hours it’s clear they understand the concerns and are addressing those issues and if necessary Rolls-Royce will have made sure there’s a little extra power. They understand what the issues are and where they have to be and are on top of things, particularly in terms of weight control,” Air Lease Corporation (ALC) chief executive Steven Udvar-Hazy conceded.
Make no mistake, while the A350 programme is under increasing risks ahead of its first flight in mid-2013, ultimate load testing, overweight issue, it is noteworthy that the overweight issue is a typical one across aircraft programmes at an early stage and this could be addressed through learning from flight testing and structural testing experience. In comparison, the first 787 ever built, LN1 is 9.75 tonnes (21,500lbs) overweight and LN7-19 are 6.1t (13,500lbs) overweight whereas examples after LN20 are 3.99t (8,800lbs) overweight, with 787-8 examples between LN140 and LN150 being “hundreds of kilograms” overweight.
Meanwhile, with Airbus targeting the 777-300ER replacement market, Aspire Aviation believes it makes strategic and commercial sense for Airbus to swap the entry into service (EIS) dates of the A350-800 and -1000, which are in mid-2016 and mid-2017, respectively.
“There is a trend to slightly bigger aircraft everywhere in the world, and we’ll probably sell more than we expected. We will need extra capacity and we are prepared for that,” Airbus chief executive Fabrice Bregier said in a Bloomberg interview.
First of all, the A350-800 is not an optimised airplane with the most heavily penalised fuel burn and overweight issue and customers have been shifting away from this variant for larger, more fuel efficient and economical versions, with Qatar Airways switching its order for 20 A350-800s to possibly -900s and -1000s and Libya’s Afriqiyah Airways converting its 6 -800 orders into -900 ones in addition to ordering 4 extra examples.
Importantly, with Airbus’ ambition to challenge Boeing’s leadership position in the 300-400 seat segment and sell 70 to 80 -1000s per year instead of the 40-50 originally envisaged, Airbus should prioritise the A350-1000 development and ensure the early availability of the A350-1000 as it enables airlines to obtain a 350-seat jet that is most fuel efficient per seat as soon as possible in light of a toxic mix of stubbornly high fuel prices, a sluggish global economic recovery assuming the US fiscal cliff does not take place, and intensifying long-haul competition.
“The sequence may change depending on the market if there is increasing demand for the -900 and -1000,” Airbus A350 programme manager Didier Everard said.
With Airbus planning a production ramp-up to 1 unit per month in late-2013, 2 per month in 2014, 4 per month in 2015 before achieving a 10 per month production rate in 2018, it could maximise its returns by building more A350-1000s and minimise the risk in this ambitious ramp-up through rationalising the A350 production plan and executing a more strategically focused one.
“The A350 XWB final assembly line is designed to be flexible and to be able to produce all three members of the A350 family (-800, -900, -1000). We are working on a ramp-up to 10 per month to be reached four years after the first A350 XWB delivery and are constantly and closely following market trends so that we anticipate and adapt our production to meet our customers’ needs,” an Airbus spokeswoman told Reuters.
Ironically, while the A350-1000 will be the most fuel efficient 350-seat aircraft with a 25% lower fuel burn per seat despite the lower payload, 15 fewer passengers and a smaller revenue cargo volume than the 365-seat 777-300ERs before the 407-seat 777-9X enters into service in mid-2019 or even later, swapping the EIS dates of A350-800s and -1000s arguably aids Boeing’s development of the revamped 777, dubbed the 777X.
One of the reservations Boeing has about the development of the 777X is the final firm configuration of the A350-1000 and its future capabilities in terms of fuel burn and payload/range performance. With Airbus and Boeing being locked in a two-horse race, both sides are effectively sitting out and waiting to watch what its competitor’s product would look like and how it would perform. As Airbus is undeniably ahead and is more advanced in the development of the A350-1000, it should leap forward and advance the -1000′s EIS should it be convinced about the -1000′s technology and a lighter carbon fibre reinforced polymer (CFRP) fuselage.
Intriguingly, this also means Airbus will have to finalise its A350-1000 configuration sooner than it otherwise will, thus giving Boeing leverage to take the time to develop its 777X that will make the revamped 777 become more competitive.

The 777X development programme consists of a 407-seat 777-9X and a 353-seat -8X, in addition to a low priority -8LX ultra long-range model. The -9X will be 76.48m (250ft 11in) long and have an 8,000nm (nautical miles) range, a maximum take-off weight (MTOW) of 344 tonnes (759,000lbs), a 21% lower fuel burn per seat and 16% lower cash operating cost (COC) per seat than the 365-seat 777-300ER. The 353-seat 777-8X, meanwhile, will be 69.55m long and feature a MTOW of 315t which will also have an 8,000nm range.
While the authority to offer (ATO) of the 777X is admittedly delayed, the engine race between General Electric (GE), Derby, England-based Rolls-Royce and Pratt & Whitney (P&W) and their offerings, the GE9X, RB3025 and possibly a 100,000lbs geared turbofan (GTF) is still ongoing, albeit Aspire Aviation‘s sources at Pratt & Whitney (P&W) acknowledge its chance of being selected as the engine supplier to the 777X is “diminishing”.
Evendale, Ohio-based engine-maker General Electric (GE), on the other hand, is understood to be the frontrunner of the engine race, over which Boeing is expected to make a decision on whether to press ahead with a dual-source or a sole-source strategy late this year and name the engine supplier in the 2013 first-quarter. It is adhering to its technology test plan for the GE9X, Aviation Week says, with the first run of a new engine core taking place in 2014, a “Toll Gate 6″ final design in 2015, first engine to test (FETT) in 2016 before obtaining its engine certification in 2018 and supporting the 777-9X’s entry into service (EIS) in mid-2019.
The 325cm (128in) fan size GE9X will have a “very close to 10%” reduction in engine specific fuel consumption (SFC), a 10:1 bypass ratio, 60:1 overall pressure ratio (OPR) and 27:1 high pressure compressor ratio, versus the 42:1 and 23:1 ratios on the GE90-115B engine that it replaces, as well as a third-generation twin annular pre-mixing swirler (TAPS III) combustor.
On the material choice, Boeing is still evaluating a carbon fibre reinforced polymer (CFRP) wing and a metallic wing, with the metallic wing leading to a 5% worse fuel burn per seat, Aspire Aviation‘s sources at Boeing said. The same sources pointed out that the preparations for a full-scale demonstrator are already made, with related activities taking place behind the 40-25 and 40-26 buildings.
For Boeing, the Chicago-based airframer believes it still has time on its side, especially the 777-300ER is nevertheless going to be the most fuel efficient “big-twin” until the A350-1000 enters into service with its EIS date still being uncertain due to risks of a potential further delivery delay and that Aspire Aviation predicts Boeing will eventually implement the performance improvement package (PIP) dubbed the 777-300ER+ that will reduce block fuel burn of the aircraft by 4%-5% before the 777-9X’s proposed EIS in late this decade or early next decade.
The 777-300ER+ will feature a recontoured belly fairing that reduces the aircraft’s aerodynamic drag, further weight reductions and an improved GE90-115B engine, the same sources say.
Moreover, it is relatively easy for one to forget the fact that the block fuel burn of the 777-300ER has already been reduced by 3.6% since it enters into service with Air France in 2004 and it burns 2.8 litres (L) of fuel per passenger per 100 kilometres (km), versus the A340-600′s 3.8L and the 747-400′s 3.4L.
“We will have several variants and improvements for the 777 in place before the A350-1000 even hits the market,” Boeing Middle East president Jeff Johnson said in a Reuters interview.
“There is demand for the 777X, but what this really comes down to is the trade-off. I think you’ll see it in the near term. I don’t know if near term is tomorrow, next year or two years. But we are going to stay very close to our customers. Our strategy is to stay close, see what they need and we will roll that out,” Johnson asserted.
Lastly, once the 407-seat 777-9X enters into service, it will be an airplane in its own class, enabling fast-growing Asian and Middle Eastern airlines to carry more passengers and revenue cargoes without compromising flight frequency and revenue cargo volume. Its business case is strengthened by a strong customer base with large 777 operators such as Emirates Airline, Qatar Airways, Singapore Airlines (SIA), Cathay Pacific, Air France, British Airways (BA), Japan’s All Nippon Airways (ANA) and Japan Airlines (JAL), just to name a few.
In conclusion, while it is true that Boeing may not deliver a knock-out blow to Airbus in taking the time necessary to develop the right products and bring them onto the marketplace at the right time, it is nonetheless possible for the Chicago-based airframer to draft a widebody strategy that besieges Airbus from both the lower end and the upper end of the widebody segment with the 787-10X and 777X as the former fills the void in Airbus’ widebody strategy where there is no true one-to-one A330 replacement and the latter caters for the growing air travel demand in the Asia/Pacific region. And Boeing’s conservative approach over the 787-10X and 777X derivative programmes is, quite frankly, carefully drawn from the painful lesson it learnt from the 787 and its implications on the company’s engineering, financial resources and oversight on its global supply chain.
As George Bernard Shaw wrote, “Success does not consist in never making mistakes but in never making the same one a second time.”

Habibie: Sukhoi SSJ-100 Butuh Sertifikasi FAA

Sertifikasi FAA akan menjadi dasar sertifikasi dari kemenhub.

 

VIVAnews - Pihak Sukhoi mengklaim bahwa pesawat tipe SSJ-100 mereka telah mengantungi Type Certificate dari otoritas penerbangan Indonesia. Dengan demikian, pesawat jenis ini sudah dapat dioperasikan oleh maskapai di tanah air.

Sukhoi juga mengatakan bahwa pesawat ini telah dipesan sebanyak 12 unit oleh maskapai Sky Aviation. Padahal sebelumnya, pesawat jenis ini mengalami kecelakaan di Gunung Salak yang menewaskan 45 orang. 

Mantan Presiden Indonesia sekaligus insinyur pembuat pesawat terbang BJ Habibie mengatakan bahwa sertifikat boleh saja diberikan asalkan sebelumnya telah mendapatkan sertifikasi yang sama dari Badan Aviasi Federal Amerika Serikat (FAA).

"Kita lihat peraturan yang berlaku, kalau sudah dapat sertikasi dari FAA, itu dasar kita," kata Habibie dalam peluncuran buku "Democracy Take Off? The BJ Habibie Period" di Jakarta, Selasa, 28 November 2012.

Berita penerbitan Type Certification dari Kemenhub Indonesia disampaikan oleh First Vice President Sukhoi, Igor Vinogradov, di laman berita RIA Novosti. Dia mengatakan, bahwa mereka siap memasok pesawat ke maskapai Indonesia.

Sertifikat ini memungkinkan pesawat tersebut diekspor dan beroperasi di Indonesia tanpa ada pembatasan. Sertifikasi dari FAA bisa dijadikan rujukan, karena tidak mudah mendapatkannya. "Tidak semudah itu FAA memberikan sertifikasi," kata Habibie.

Kemenhub mengatakan bahwa pihaknya tidak mengeluarkan sertifikat namun validasi. Untuk Sukhoi SSJ-100, Kemenhub masih dalam tahap validasi.

Menurut penelusuran VIVAnews, pesawat Sukhoi SSJ-100 baru mendapatkan Type Certificate dari Badan Keamanan Aviasi Eropa atau EASA. Menurut EASA, yang dikutip dari superjetinternational.com, pesawat SSJ-100 telah memenuhi standar lingkungan dan kelayakan terbang.

 

REFILE-Honeywell, Rockwell Collins expected to win Boeing contract- WSJ

Nov 15 (Reuters) - Honeywell International Inc and Rockwell Collins Inc are expected to win major contracts to supply systems to Boeing Co for its updated 737 Max jetliner, the Wall Street Journal reported, citing two people familiar with the decisions.
If successful in securing a contract, Honeywell will supply the jet's auxiliary power unit and the 737 Max's environmental and engine-bleed systems, while Rockwell Collins will supply the jet's avionics, the Journal said.
737 Max, an updated version of the single-aisle 737 jet, is expected to be delivered in late 2017 to Southwest Airlines Co , the Journal said.
"No announcement has been made on who will supply these items" on the 737 Max, Boeing spokeswoman Lauren Penning said in an email to the Journal. (ht tp://link.reuters.com/jyn93t)
The jet will employ a new model of engine, supplied by CFM International, a joint venture between General Electric Co and Safran SA, the Journal reported.
Boeing had no immediate comment on the Journal report when contacted by Reuters. Honeywell International and Rockwell Collins could not immediately be reached for comment by Reuters outside regular U.S. business hours.

Boeing says further 737 production increase likely

(Reuters) - Boeing Co (BA.N) said it likely would increase its production rate on 737 jets beyond its current forecast, which calls for 42 a month starting in the second quarter of 2014.
The company is currently building a third production line at its factory in Renton, Washington, to accommodate the 737 MAX, which will enter production in 2015.
"Eventually, we'll use the third line for future rate increases," Beverly Wyse, vice president and general manager of the 737 program, said in a conference call with reporters on Thursday.
She said Boeing officials "expect to see significant growth" in orders for single-aisle planes. "We don't have any specific plans when that next rate increase will be, but we're pretty sure it's coming."
Earlier Thursday, Boeing said it had settled on a "firm concept" for its new 737 MAX jet and had chosen Honeywell International Inc (HON.N) and Rockwell Collins Inc (COL.N) to supply new systems for the plane.

Rockwell says Boeing 737 MAX deal "very material"

(Reuters) - Boeing Co (BA.N) said on Thursday it had locked down a basic design for its new 737 MAX jet, choosing suppliers for key components and moving the project a step closer to production in 2015.
Boeing gave Honeywell International Inc (HON.N) and Rockwell Collins Inc (COL.N) valuable new contracts to provide systems for the plane.
Honeywell will supply an electronic bleed air system, which controls cabin pressure and helps with getting ice off the wings. Rockwell Collins will provide large-format display screens for the new jet's flight deck.
"It's very material to us," said Kent Statler, executive vice president and chief operating officer of commercial systems for Rockwell Collins. "We see it stretched over 4,500 aircraft. It is a sizeable opportunity."
The size of the market for single-aisle jets such as the 787 and the rival Airbus's (EAD.PA) A320 is expected to continue to grow, and Boeing said this likely would drive up production rates for its planes.
Boeing, based in Chicago, said its "firm concept" calls for the 737 MAX to use 13 percent less fuel than current 737s. The plane will include new LEAP-1B engines from CFM International, which combines resources from Snecma, a unit of the Safran Group of France, and General Electric Co (GE.N).
Rockwell's deal takes the display contract away from Honeywell, which supplies six smaller, six-by-eight-inch screens standard on the current 737.
Four of the new, 15.1-inch color displays will be standard on the 737 MAX, a similar size and configuration to ones that Rockwell Collins supplies for Boeing's 787 Dreamliner.
The 15.1-inch Rockwell display is also used on Boeing's KC-46 aerial refueling tanker for the U.S. Air Force, and available on the 747-8 and as a retrofit on 757 and 767 models, Statler said.
"This is a continuation of a strategy and relationship that has been building over the last decade" between Boeing and Rockwell, Statler said.
The configuration will offer a significantly larger area to display data to pilots, and will handle more advanced air traffic control and awareness technology as it comes into use, Statler said.
Airbus uses smaller-format screens on its A320 jets, and plans larger displays, supplied by Thales SA (TCFP.PA), on the A350.
Honeywell said it is the largest single supplier for the 737MAX, with systems including environmental controls, avionics and an auxiliary power supply.
Boeing said the 737 MAX remains on track for first delivery in 2017.
Boeing is currently producing 35 737 jets a month. The company said it likely would increase the production rate beyond its current forecast that calls for 38 a month in the second quarter of 2013, and 42 a month, starting in the second quarter of 2014.
The company is currently building a third production line at its factory in Renton, Washington, to accommodate the 737 MAX, which will enter production in 2015.
"Eventually, we'll use the third line for future rate increases," Beverly Wyse, vice president and general manager of the 737 program, said on a conference call with reporters.
She said Boeing officials "expect to see significant growth" in orders for single-aisle planes. "We don't have any specific plans when that next rate increase will be, but we're pretty sure it's coming."
Boeing shares rose 0.5 percent to $71.63 in afternoon trade. Rockwell Collins was up 1.7 percent at $54.61.

Boeing engineers union likely to back mediation in stalled talks

(Reuters) - The union that represents Boeing Co engineers is likely to agree to mediated talks in a bid to resolve the standoff with the planemaker, the executive director of the union said on Friday.

On Thursday, Boeing asked for U.S. mediators to help resolve talks with the Society of Professional Engineering Employees in Aerospace (SPEEA) union, which represents its 23,000 engineers, saying the sides were far apart on pay and benefits.

That move halted labor discussions around midday Thursday in Seattle, and no further meetings were scheduled, the two sides said. Union contracts with Boeing expired Sunday.

"We will almost certainly agree to some type of mediation, but we find the company's position confusing," Ray Goforth, SPEEA executive director, said in an email to Reuters.

Goforth said Chicago-based Boeing had not responded to many union proposals and that a lot work was left to do.

"We view this action on their part as a stunt to distract people from the proposed pay and benefit cuts," Goforth added.

The union has balked at a Boeing contract that it says would cut the growth rate of compensation of professional and technical employees. Boeing says its latest offer is much improved over its initial proposal and reflects a tough competitive environment.

Shares of Boeing were up 0.6 percent at $74.56 in early trading.

REUTERS SUMMIT-Boeing targets doubling of Middle East defence sales

(For other news from Reuters Middle East Investment Summit, click here)

* Mideast defence revenue seen doubling to $4 bln in 2 years
* Gulf customers shopping for F-15 and F-18 jets - Boeing
* Boeing not in talks with UAE on fighter jet deal
* New 777X aircraft to be offered in near term
By Praveen Menon
DUBAI, Nov 20 (Reuters) - Boeing expects to double revenue from its defence and security business in the Middle East over the next two years as recent turmoil in the region drives up demand for arms.
Gulf Arab states and other Middle Eastern countries that witnessed the Arab Spring uprising are "shopping" for new high-tech military equipment as they swap out older weaponry and invest in new capabilities, Jeff Johnson, president of Boeing Middle East said at the Reuters Middle East Investment Summit.
The U.S. planemaker, which also makes fighter jets, helicopters and anti-missile technology, expects to increase its annual revenue from defence in the region to about $4 billion over the next two years.
That would be part of a wider plan to lessen reliance on U.S. government work, which is being squeezed by spending cuts.
Boeing's fighter jets as well as the U.S. company's C-17 military transport aircraft have been in strong demand. Last year, Boeing signed a $29.4 billion deal to sell 84 F-15 fighter jets to Saudi Arabia, as well as a big defence sale to UAE.
"A lot of customers are shopping for the F-15 and F-18 Super Hornets and as we introduce more C-17s into the market, we will continue to see interest in that strategic area too," Johnson said.
The Middle East accounts for a third of Boeing's international defence business, Johnson said. This equates to an annual revenue of about $2 billion.
Asked if demand in the region would result in a doubling of this figure, Johnson said: "Yes, over the next couple of years. There is so much interest over a wide range of products."
Revenue for Boeing's defence business was about $31 billion last year and is expected to be about the same in 2012, with about 18 percent from its international clients, Johnson said.
"It's a very competitive market. When we see the flattening of defence budgets in Europe and U.S, emerging markets become more important and clearly Middle East is up there."
Johnson said high oil prices coupled with threats to the region were going to allow Gulf armed forces to upgrade their military resources.
The United Arab Emirates (UAE) had been expected to finalise a $10 billion deal with Dassault to buy 60 of the French group's Rafale jets, but talks faltered as the UAE said the terms were uncompetitive.
Others have also been trying to sell their wares. British Prime Minister David Cameron visited the UAE earlier this month, hoping to get it to consider the BAE Systems-built Eurofighter Typhoon fighter jet.
Boeing is not in active talks with the UAE on this deal.
"We have offered our platforms. If one of those fits the bill, we will certainly talk to the customer. But we are not in any kind of active discussions," Johnson said.
Boeing has offered its fighter jets to other Gulf states including Kuwait, Qatar and Saudi Arabia. Egypt has also been a top customer for Boeing in defence and commercial planes, and it has strong trade relations with Jordan and Iraq.
777X IN NEAR-TERM
Johnson dismissed concerns that airlines may opt for rival Airbus' A350-1000 passenger jet if the new version of Boeing's popular 777 plane is delayed.
"We will have several variants and improvements for the 777 in place before the A350-1000 even hits the market," he said.
Boeing has not yet offered the new version of the 777, provisionally called the 777X, though carriers such as Emirates and British Airways have been planning for it to enter service by the end of this decade.
Boeing appears at least a year away from offering a new version of the 777, Reuters reported this week.
"I think you'll see it in the near term. I don't know if near term is tomorrow, next year or two years. But we are going to stay very close to our customers."
"Our strategy is to stay close, see what they need and we will roll that out," Johnson said.
Tim Clark, President of Emirates, the largest customer of the 777, said in November it would consider replacing its planned fleet of 175 Boeing 777s with the 777X.
"These comments were very reassuring," said Johnson.
"There is demand for the 777X, but what this really comes down to is the trade-off," he said, suggesting discussion are on the changes that are being asked for by the customers and what the planemaker can offer.
He added that Qatar Airways and Abu Dhabi's Etihad Airways will have a big role in the decision on the new stretched version of the Dreamliner, the 787-10.

Airbus sells 460 planes in Jan-Oct, trails Boeing

(Reuters) - European planemaker Airbus won 460 aircraft orders in the first 10 months of the year, less than half the score by Boeing as its U.S. arch rival continued to benefit from a surge in demand for its new fuel-efficient 737 MAX model.
Airbus said net orders in the period from January to October reached 403 after taking into account 57 cancellations, compared with 1,009 for Boeing in the period to November 6. The U.S. company has received 990 net orders for 737 narrow-body jets this year.
Boeing also outpaced Airbus in terms of deliveries in the period through October, handing over 486 aircraft to customers, including 342 737s, against 462 for Airbus.
The latest data show Boeing is still on course to reclaim the top spot in commercial aircraft production from Airbus this year. The U.S. group lagged Airbus on deliveries for the ninth year in a row last year.
Boeing's market share sank to its worst level in the history of its 40-year rivalry with Airbus in 2011 as it took longer to decide on a strategy to meet demand for more fuel-efficient single-aisle jets in response to Airbus' new A320neo.
But its new 737 MAX is helping it overtake Airbus this year.
Airbus said last week it expects to deliver 580 aircraft this year, with gross orders of 600-650.
Airbus' new business in October included the purchase of 15 A330-300s by Turkish Airlines and an additional order for four A350 XWB jetliners from Libya's Afriqiyah Airways.
The planemaker added that it delivered five A380 superjumbos last month, taking the total since January to 22 and keeping Airbus on track to deliver 30 of the planes this year.
The company also previously targeted selling 30 of the superjumbo planes this year but has since said that could be tough to achieve. Airbus only sold four A380s during the 10-month period.

Turkish Airlines looking at aircraft financing options

Nov 26 (Reuters) - Turkish Airlines confirmed on Monday it is looking at several options to finance buying additional aircraft, including leasing arrangements and possible eurobond or sukuk issues.
Bankers familiar with the negotiations told Reuters on Friday the airline was in talks with banks about a leasing arrangement worth around $500 million to help fund orders from 2014.
The airline was considering using Enhanced Equipment Trust Certificates (EETCs) for the first time - financial securities issued by banks under which the airline gets ownership of the planes when the certificates mature - the bankers said.
"Work is being conducted on different and innovative financing methods for aircraft financing, including both classic methods and capital market financing alternatives such as EETC, sukuk and eurobond," a Turkish Airlines spokesman said.
"However no decision has been taken regarding the methods... or the amount."
The airline said last month it had decided to buy 15 Boeing B777-300ERs by 2017, with an option to buy five more, and 15 Airbus A330-300 planes between 2014-2016.
EETC transactions, effectively a form of secured debt financing like mortgages, are often used by airlines in Europe and the United States, but are rarer elsewhere.
Aircraft leasing firm Doric Nimrod Air Finance Alpha said in June it would use EETCs worth almost $590 million to help finance the sale of four Airbus A380 planes to Emirates airline.

China sells jets, dabbles in Eastern Air revival

(Reuters) - China unveiled 50 new orders for its COMAC C919 passenger jet at the opening of the country's main air show and promised to assist in the rebirth of one of the most famous names in aviation -- defunct U.S. carrier Eastern Air Lines.
Potentially worth several billion dollars, the orders for China's first commercial passenger jet dominated the first day of the China Airshow, held every two years in the southern city of Zhuhai, along with fresh evidence of China's military ambitions.
The C919 is designed to challenge Airbus (EAD.PA) and Boeing (BA.N) in the largest segment of the $100 billion annual jetliner market.
Tuesday's orders for the 150-seat jet boosted the official tally to 380, reaching the state-owned manufacturer's declared breakeven point of 300-400 orders.
However, Western analysts say it will be some time before the aircraft, due to make its maiden flight in 2014, proves both its technical worth and its financial viability.
"You can always build a jet -- you can practically Google it, in fact," said Virginia-based aerospace analyst Richard Aboulafia. "But the real skill is creating something the market wants and then selling and financing it."
Confirming a Reuters report, Commercial Aircraft Corporation of China (COMAC) announced orders for 20 aircraft each from local carriers Joy Air and Hebei Aviation Group.
Its only foreign customer GECAS, the leasing and financing unit of General Electric (GE.N) which co-produces the engines, agreed to buy 10 more, taking its total order for the plane to 20.
Others that have expressed interest include Irish low-cost carrier Ryanair (RYA.I) and British Airways IVAG.L, according to COMAC.
Separately, COMAC forecast the global passenger fleet would double in size over the next 20 years, thanks mainly to a sharp increase in demand from China where annual passenger traffic would grow an average 7.2 percent each year to 2031.
In its 2012-2031 Market Forecast report, COMAC predicted 31,739 new planes, valued at $3.9 trillion, would be needed worldwide over the next two decades to meet demand. China alone would need nearly 5,000 new planes in that time.
EASTERN REBORN?
In a surprise move, the state manufacturer also announced tentative purchase plans by investors said to be planning to resurrect U.S.-based Eastern Air Lines, which went bankrupt in 1991.
There have been sporadic reports of efforts to relaunch the airline, whose forked logo was seen on display as a backdrop to Tuesday's signing ceremony.
The announcement puzzled several delegates, including some who had done business with the original Eastern, who said little had been heard about the re-invented airline's plans or its leadership.
"We do not comment on our customers," a COMAC spokesman said.
Once led by former World War I ace Eddie Rickenbacker and later by former Apollo astronaut Frank Borman, Miami-based Eastern Air Lines rose to become one of the largest airlines in the world before losing a battle against low-cost competition.
"We are still a young company. The start-up investment has not been finalised yet," Jack Shi, senior vice president for commercial development of Eastern Air Lines, told Reuters.
Shi addressed a packed hall of Chinese airline executives and media, but there were no other top executives present from the U.S. carrier which Shi said had been reconstituted in 2008 in Miami, the original hub of Eastern.
He said the airline, which included some previous employees of the bankrupted group, was shopping for planes to start services late next year from Miami to unspecified destinations in Latin America.
"Eastern used to be the largest U.S. airline to serve the Latin America market," he said. "A lot of preparation work needs to be done, such as applying for an air route."
Shi told his Chinese audience that once reborn, Eastern wanted to be the first operator to fly COMAC jets in the United States just as it had introduced the European Airbus there.
CONGRESS STEALS SPOTLIGHT
This week's air show is being attended by a record 650 exhibitors including dozens of foreign companies drawn to China by the growth of its aviation sector, projected to displace the United States as the world's largest aviation market soon.
But there was a notably low-key official presence as top regional representatives and government leaders congregated in Beijing for the ruling Communist Party's 18th Congress, marking a transitional period in Chinese leadership which has slowed the pace of business across many strategic sectors.
The exhibition featured prototypes of a new Chinese business aircraft and a model of a new stealth fighter that China apparently hopes to build for export.
Industry publication Aviation Week noted the model bore a "striking resemblance" to an aircraft recently photographed flying from the Shenyang Aircraft factory, which captured worldwide interest from military analysts and publications.

Did French prime minister accidentally reveal big Airbus order?

(Reuters) - Airbus parent EADS, whose merger talks with BAE Systems leaked to the press in the summer, may find more of its business subject to accidental early disclosure - this time by the French prime minister.
Jean-Marc Ayrault, who has just returned from Singapore and Philippines to help drum up business for French companies, told Airbus workers his trip had highlighted the importance of remaining competitive on world export markets.
But departing from a prepared speech for the opening of a new Airbus factory in southwest France, Ayrault then referred to billions of dollars of plane orders that did not appear to correspond to business already announced from those countries.
"I would like to add that during this trip, Airbus signed an order for 15 aircraft and took options for the A350 and possibly the A380," Ayrault told an audience of 1,000 staff and media.
The expressions of Airbus executives at the event gave nothing away, but aerospace industry watchers have said Singapore Airlines (SIAL.SI) is among a number of top carriers seen as candidates to consider fresh orders for long-haul jets.
Such deals are sure to grab industry attention because a battle between Airbus and Boeing over the lucrative "mini-jumbo" market for large twin-engined jets has reached a crucial phase.
Airbus (EAD.PA) is looking to bag a high-profile endorsement for its A350-1000 long-range jet, while Boeing is pondering upgrades for its 777 airliner which is enjoying record sales.
During Ayrault's trip, Philippine Airlines confirmed an order for 10 Airbus A330 jets on top of a purchase in the summer. An official in the French prime minister's office said his comments alluded to this latest purchase "and nothing else."
An official government transcript of his comments confirmed the wider reference to potential A350 and A380 orders.
Airbus declined comment. Neither the Singapore nor Philippine carriers were immediately available for comment.
Ayrault was speaking as Airbus inaugurated a factory for the A350 in the latest chapter of its rivalry with U.S. planemaker Boeing .
Airbus hopes to boost sales of the A350-1000, the largest variant due to seat 350 people. A four-year drought ended when Hong Kong's Cathay Pacific (0293.HK) placed an order for the airplane and upgraded 16 orders for smaller A350-900s in July.
Armed with Cathay's endorsement, Airbus is widely expected to target other standard-bearers including Singapore Airlines and major Western carriers that might be ripe for an upgrade to the larger model or a brand-new order. Singapore Airlines already has 20 A350-900s on order.
"They're big 777 users, and anything that indicated a pattern of 777-300ER migration towards the A350-1000 would be a big wake up call for Boeing," said analyst Richard Aboulafia.
The 777-3000ER is the most recent version of Boeing's most profitable aircraft and sells for $298 million apiece.
The A350-1000 is worth $321 million at list prices.
Airbus says the lightweight carbon-composite aircraft will beat the 777 on efficiency, but will not be available before late-decade. Airbus plans to increase output of the largest A350 to try to break Boeing's firm hold on the mini-jumbo market.
Influential aircraft lessor Steven Udvar-Hazy, founder of Air Lease Corp (AL.N), urged Airbus to focus on this model.
"We are trying to persuade Airbus to de-emphasize the A350-800 in favour of the A350-1000," he told Reuters.
For its part, Boeing wants to persuade major customers like Singapore to keep ordering the current 777-300ER or else wait for a possible upgrade around the turn of the decade. Airlines such as Emirates have pressed it to firm up the design plans.
Airline sources say the U.S. planemaker is holding a summit of carriers next week to discuss their large-jet requirements.
Boeing declined to comment on the meeting.
"We schedule a series of meetings with customers to discuss twin-aisle airplanes, including our existing product line and future development options," a spokesman said by email.
"We are always talking with our customers about their fleet requirements, and per Boeing policy, do not discuss details".

France backs Airbus in funding row with Germany

(Reuters) - France backed Airbus (EAD.PA) on Tuesday in a row with Germany over funding for its next jetliner, in a sign of lingering tension following the collapse of a European aerospace industry merger.
Germany is unhappy about its share of work on the $15 billion A350 aircraft project and has withheld half of a roughly 1.2 billion euro ($1.6 billion) development loan, sources close to the matter say.
In a rare intervention, French Prime Minister Jean-Marc Ayrault said it was essential all partners met their funding commitments for the A350, the newest generation of aircraft in the European planemaker's fierce rivalry with Boeing (BA.N).
Speaking at the inauguration of an A350 production plant in southwest France, Ayrault did not refer to France's closest ally by name. But he left no doubt that he was referring to the rift with Germany, which has deepened since Berlin blocked a merger between Airbus parent EADS and UK's BAE Systems (BAES.L).
Speaking to over 1,000 workers, Ayrault said:
"The European partner nations...have always played a major role in the development of major aerospace projects," he said.
"It is of course the case for the A350, and it is essential that their commitments are met in full. As for France, its own commitments will be respected."
Plans for the $45 billion merger to form the world's largest aerospace and defense group fell part earlier this month with most of the participants blaming German Chancellor Angela Merkel for derailing the deal, something Berlin denies.
Flanked by heads of EADS and Airbus during an emotional ceremony honoring one of the planemaker's founders, Ayrault gave strong backing to EADS Chief Executive Tom Enders.
"I have supported EADS," he told reporters. "It is very important to give a message of confidence to the whole of the EADS group, not just Airbus, and I think this was expected."
Enders, a German-born executive who has clashed with Berlin over his decision to base the aerospace group in Toulouse where many of its aircraft are built, chatted and joked with airline customers but did not take a direct part in the ceremony.
His successor at the helm of Airbus, Frenchman Fabrice Bregier, acknowledged the tensions with Berlin.
"To my knowledge, we've still some debates in Germany and only in Germany," he told reporters. "But I'm very confident that we'll get through that and that we'll demonstrate that the A350 is not limited to the assembly line in Toulouse."
LIGHTER JETS
Even as European nations argue over A350 funding, the use of government loans to help finance Airbus projects is itself the subject of a bitter trade dispute with the United States.
"Father of Airbus" Roger Beteille, 91, paid tribute to European aircraft co-operation as he received a standing ovation from Airbus workers in the assembly hall named in his honor.
The new Airbus jet heralds a new phase in the race for fuel efficiency and profits with U.S. rival Boeing.
Built in response to the Boeing 787 Dreamliner, the A350 is Europe's first contribution to a new generation of jets designed to cut airline fuel bills by using mainly lightweight carbon-composite materials instead of heavier aluminum.
Airbus and Boeing expect total demand for more than 6,000 such mid-sized, long-range jets worth hundreds of billions of dollars over the next 20 years.
Their arrival is expected to alter the shape of long-haul travel by leading to new routes bypassing crowded hub airports, since the aircraft are smaller than people-carriers such as the Airbus A380 superjumbo and the newest version of Boeing's 747.
But both firms face huge construction challenges for the revolutionary jets, woven and baked out of carbon fiber that is stronger and lighter than metal but costlier to produce. Neither the A350 nor the 787 is expected to make a profit for years.
Airbus says the A350 will take to the skies in the summer of 2013 and enter service in the second half of 2014. Production is scheduled to peak at 10 aircraft a month in 2018. Three variants will be produced, seating between 270 and 350 people.
Bregier confirmed that Airbus was looking at increasing volumes for the largest of the three, the A350-1000, in a battle for the mini-jumbo market as reported by Reuters on Monday.

Airbus opens A350 plant to meet rising competition

(Reuters) - European planemaker Airbus inaugurated a factory for its A350 jetliner on Tuesday, sparking a new phase in the race for fuel efficiency and profits with U.S. rival Boeing.
French Prime Minister Jean-Marc Ayrault fought through fog and an air traffic control strike to fly to Toulouse, southwest France, to name the plant after "Father of Airbus" Roger Beteille, a pioneer of twin-engined long haul passenger jets.
Built in response to the Boeing 787 Dreamliner, the A350 is Europe's first contribution to a new generation of jets designed to cut airline fuel bills by using mainly lightweight carbon-composite materials instead of the heavier aluminum.
Airbus and Boeing expect total demand for more than 6,000 such mid-sized, long-range jets over the next 20 years and their arrival is leading to new routes bypassing crowded hub airports.
It is a market worth several hundreds of billions of dollars and is set to upstage the largest jetliners such as the Airbus A380 superjumbo and the latest version of Boeing's 747.
But both firms face huge construction challenges for the revolutionary jets, woven and baked out of carbon fiber that is stronger and lighter than metal but costlier to produce. Neither the A350 nor the 787 is expected to make a profit for years.
Airbus says the A350 will take to the skies in the summer of 2013 and enter service in the second half of 2014, a year later than originally scheduled. Three different models of the aircraft will seat between 270 and 350 people.
The competing 787 went into service in Japan a year ago after complications with a ground-breaking production system and global supply chain delayed its first deliveries by three years.
Even before Tuesday's inauguration, the 74,000-square meter Toulouse plant has been building the first A350 that will never fly but will be shaken apart in stress tests.
Full production will now begin in earnest ahead of next year's maiden flight, rising to 10 planes a month by late 2018.
The factory ceremony comes as competition intensifies for the sales of jets to Asia and other fast-growing markets.
The largest model, the A350-1000, will also compete against Boeing's 777 mini-jumbo, which boasts the world's largest jet engines and dominates a lucrative market just below 400 seats.
Boeing lifted production of the 777 overnight in the wake of record sales and analysts say it is poised to launch a new stretched Dreamliner, to be called the 787-10.
That could slow a rally in sales of the older Airbus A330 which soared as airlines scrambled for capacity to cope with growing traffic, as 787 delays left them short of seats.
Boeing is due to publish third-quarter earnings on Wednesday.
Airbus is also involved in disputes with the United States and even one of its founder nations, Germany, over the funding for the A350, whose development is estimated at $15 billion.
The United States has accused Europe of ignoring recent World Trade Organization rulings by subsidizing the aircraft through development loans, while Germany has withheld part of its share of the loans in a row with Airbus over jobs.

Special Report: After merger collapse, fractured Europe faces new battle over Airbus

(Reuters) - On a cloudy day in southwest France last month a frail 91-year-old Frenchman in a white shirt and white tie took the stage in front of 1,000 Airbus workers and VIPs and delivered a subtle warning.
Known as the "Father of Airbus", co-founder Roger Beteille reminded his audience, gathered in a vast new plane factory in Toulouse, how an industry once "devoted to destruction" had become a symbol of European unity in the decades after World War Two.
Only by "working hard together, hand in hand", Beteille said, had the European firm's employees realized their dream to create "the largest and best airliner manufacturer in the world".
The meaning of the revered engineer's message to Europe's feuding politicians and industry barons was plain: cooperate with each other or lose what you have built.
Just two weeks before the ceremony - to mark the start of production of the new Airbus A350 jet - talks between France, Germany and Britain to create a European aerospace and defense giant bigger than Boeing had collapsed in acrimony. Chancellor Angela Merkel, Europe's most powerful leader, had refused to back the $45 billion merger between Airbus parent EADS and British defense group BAE Systems, effectively dooming the deal.
Top officials in the German government deflected blame, alleging discord between Paris and London over the size of the French government's stake in the combined group.
But two confidential sets of demands sent by the German government before and during the talks and described to Reuters, as well as conversations with senior officials in Germany and France, confirm that the roots of the failure lay far deeper.
The mega-deal fell apart because of Berlin's growing resentment of what it saw as its loss of influence within EADS, wariness about France - sometime rival, sometime partner - and suspicion about the motives of the firm's German CEO Tom Enders.
"We already have an imbalance on technology within EADS, to the benefit of the French. We didn't want to make this situation even worse by hooking up with BAE," a senior German official said.
For Enders, who in the months before the BAE talks had come under acute pressure from Berlin to move prized Airbus research work to Germany from France, the proposed deal with BAE was a last-ditch attempt to free EADS from the yoke of government influence.
The deal's failure is likely to bring the opposite result. Germany, emboldened by its growing stature in Europe, looks set to push ever more aggressively for jobs, technological know-how and management influence - as the French did to detrimental effect in the early years of the firm.
Insiders say this could have disastrous consequences for the company. Some fear it will also tarnish ties between Berlin and Paris at a time when Merkel and French President Francois Hollande must find common ground to solve the crippling euro zone debt crisis.
"The fight that is happening now over Airbus is a grave threat," said an industry veteran with close ties to EADS. "Going back to a situation where you have to argue at the board over every industrial decision would be a disaster. That could really kill the company."
In the aftermath of the deal's collapse, deep-seated tensions between Paris and Berlin have been exposed. The two are already squabbling over Merkel's plans to centralize control over European budgets. Germany is also increasingly skeptical about Hollande's readiness to reform the French welfare state.
Enders declined to be interviewed for this story. The German government, Airbus and EADS also declined comment.
POWERFUL SYMBOL
EADS was formed in 2000 through a merger of France's Aerospatiale-Matra and Germany's Dasa, together with Spanish aerospace assets.
The deal, unveiled by French Prime Minister Lionel Jospin and German Chancellor Gerhard Schroeder in the border city of Strasbourg, was hailed as a breakthrough for the fragmented European aerospace and defense sector.
It gave Toulouse-based Airbus, the hugely successful civil jet-making joint venture between France, Germany, Britain and Spain, a dominant parent. And it was a powerful symbol, just a year after the birth of the euro, of Europe's potential for industrial cooperation.
Its first decade brought major successes: Airbus outsold arch-rival Boeing and launched the double-decker A380 superjumbo, the world's largest passenger plane.
But the company was also dogged by infighting, as executives like Noel Forgeard, backed by President Jacques Chirac, pushed for French domination and an end to the awkward dual Franco-German management structure.
It wasn't until Enders was put at the top of Airbus and Louis Gallois became CEO of parent EADS in 2007 that the healing between the Germans and French could begin. By June this year, when Enders took the top EADS post, the days of national strife finally seemed at an end.
Behind the scenes, however, German politicians led by Peter Hintze, a theologian and close party ally of Merkel, were deeply unhappy. Merkel's aerospace tsar believed the balance of power within Airbus had been tilting toward France for some time.
First, the main A380 factory had been placed in Toulouse. Then the plane maker's next-generation jet, the A350, was to be built there in a plant named after Beteille. This would give French workers many more jobs in the $15 billion project - up to 42 percent of the total work when top suppliers were included.
In return, Germany negotiated the right to build a successor to the best-selling A320 exclusively in Hamburg. But as struggling airlines looked for fuel savings, Airbus decided instead on a quick, modest revamp of the existing A320 with new engines. The so-called A320neo, to be built in both Toulouse and Hamburg, proved a huge success and boosted EADS stock. But in Berlin the triumph was bitter.
LIST OF DEMANDS
In November last year, Merkel's government decided that it would purchase a 7.5 percent stake in EADS held by Daimler.
For years, the carmaker had held a 22.5 percent share in the aerospace group to counter-balance 15 percent held by the French government and 7.5 percent owned by French media firm Lagardere. But Daimler was eager to reduce its holding, seen as peripheral to its main auto business, and asked for Berlin's help.
After failing to convince German firms to take a look at EADS, the government agreed to buy the stake itself. With that came a new determination in Berlin to rebalance power within the company in its favor.
In late February, months before Enders began merger talks with BAE, Hintze wrote to him with a list of demands that threw Berlin's newfound assertiveness into stark relief.
In the letter, according to people familiar with its contents, Merkel's ally noted that an imbalance had developed within Airbus to the disadvantage of the German plants.
"This development is unacceptable to the German federal government," wrote Hintze. "What is required, therefore, is a reversal of the trend, and a restoration of the Franco-German balance, particularly in research and development."
For Germany, this was a not just a battle for jobs, but for know-how and control.
Among Hintze's demands was the relocation of one of aviation's crown jewels, Airbus "Flight Physics", from Toulouse to Bremen. The work carried out by scientists in the department - located in "M-01", an iconic design office shaped like an upside-down pyramid - dates back to Concorde. Its recruitment ads seek experts in disciplines like aeroelastics, the science of how flags fly and wings flutter.
Hintze also insisted that a German be appointed to the prestigious chief engineering post, and that the group responsible for plane "structure" be relocated east of the Rhine. Hamburg, he declared, must have full control over the A320's successor.
The icing on the cake was Hintze's request for a one-for-one "balancing" of French and German Airbus staff from the top down through the first five levels of hierarchy. Horrified EADS executives said this would reverse a half-decade drive to rid the company of national rivalries.
Enders fired back a toughly worded rejection of Hintze's demands with the backing of the company's board, a person familiar with the matter said.
"The division of labor should be dictated by economics, not politics," Francois Heisbourg, special adviser at the Paris-based Foundation for Strategic Research and a former aerospace executive, told Reuters last month.
"Toulouse is a high-tech aerospace cluster, the largest and most competent in Europe. You don't simply decree that it all has to move to Germany."
AVENTIS ANGER
It was against this tense backdrop that Enders took the reins of EADS and began serious merger planning in June.
One of his first acts was to move the company's headquarters to Toulouse, ending the awkward split between Paris and Munich that had existed for more than a decade.
The step was symbolic - a sign to investors that EADS had overcome national divisions and was operating like a normal company. Apart from his L-shaped office, strewn with souvenirs of Airbus's global market conquests, the spartan white premises where Enders set up shop remain mostly empty.
But in Berlin it was seen by many as confirmation that France was bent on taking de facto control of EADS, aided and abetted by a CEO who was placing the company above national loyalties.
Also gnawing at the Germans was the fact they had been outmaneuvered by France in previous cross-border endeavors.
Back in 1999, the merger of Hoechst and Rhone-Poulenc to form Franco-German drugs giant Aventis was hailed as a model of European cooperation. Underlining the point, some of the firm's top managers were the children of French and German officers who had fought during World War Two.
Just five years later, the French government worked to help a smaller domestic firm, Sanofi-Synthelabo, take over Aventis, as the shocked Germans looked on.
In 2011, after years of shifting former Hoechst jobs from Germany to France, the company dropped all pretence, ditching the dual name Sanofi-Aventis in favor of Sanofi, which it called "simpler and easier to pronounce". A Franco-German project was now officially French.
This was not the only example. Over the years, Germany had watched in dismay as France intervened with industrial firms like Areva and Alstom. Officials in Berlin vowed it would not happen again.
RADIO SILENCE
On July 25, 45 years to the day after France, Germany and Britain authorized Beteille to start planning "the airbus", Enders won the support of the EADS board to pursue the idea of an audacious merger with BAE Systems of the UK.
The would-be deal was never given more than a 50 percent chance of success, according to people on both sides. But political hurdles were thought to be highest in France or Britain - two long-term, fiercely patriotic rivals - or in the United States, where BAE's status as a privileged foreign contractor might be questioned. Few expected Germany to object.
The merger would create an integrated aerospace and defense firm bigger than Boeing, and an undisputed European champion with a strong presence in the lucrative U.S. market to boot.
Enders believed the ambitious nature of the deal alone would help overcome any government opposition. By giving Germany, France and Britain a "golden share" that allowed them to block future takeovers, he also hoped they would agree to pare back their day-to-day involvement in the firm - a dream that was dashed when the French insisted on retaining their stake in EADS.
But the Germans, suspicious of Enders, wary of French motives and already seething over waning influence within EADS, smelled a rat.
Hintze was against the deal from the start and wasn't shy about letting his bosses know. The 62-year-old Protestant pastor from a small town on the Rhine river had got to know Merkel - herself the daughter of a Lutheran clergyman - in the years after German reunification. Their ties ran deep. He was among the first people she named to her team after becoming minister for youth and family under Chancellor Helmut Kohl in 1991. Seven years later she succeeded Hintze as general secretary of the Christian Democratic Union (CDU).
While the French and British quickly appointed senior officials to oversee the talks and formulate a list of "red line" demands, Berlin stayed silent.
In late August, Enders was due to accompany Merkel on a trip to China - the perfect opportunity to talk the deal through in person. But the thrill-seeking 53-year-old, a former paratrooper who studied at UCLA in California, tore ligaments in his arm in a hang-gliding accident and had to cancel at the last minute.
"Tom is good on strategy but not so good on psychology," said a former colleague. "One very important mistake was to miss the trip with Merkel."
Two weeks later, during the Berlin air show, Bloomberg News reported that merger talks were underway, forcing EADS into a mad one-month scramble to convince governments to back the deal.
Berlin finally delivered its own list of seven conditions at the end of September.
Obtained by Reuters, it picked up where Hintze's demands from late-February had left off. It called for key EADS radar assets and Atlas Elektronik, an affiliated maker of submarine sonars, to be ringfenced inside a new German company, two of whose directors must be government-approved; it demanded balance between French, British and Germans on the board and executive committee; no job losses for Germany; special voting rules for strategic decisions; a German group headquarters and, crucially, full research-and-development control over all single-aisle jets - the cash cow of Airbus.
Enders wanted the deal badly and agreed to all points but one: the German demand that he shift the operational command centre of the combined firm from the freshly painted EADS headquarters in Toulouse to Ottobrunn, outside Munich.
Still, Berlin would not budge. In the weeks that followed, Merkel became convinced that if she let the deal go through, the new company would run roughshod over German interests. She sealed the deal's fate in a call to French President Hollande on the morning of October 9.
The unborn giant was buried with no name - "Airbus" had been rejected by BAE - and unpublished plans to save 850 million euros were placed back in the drawer. In a final call, say witnesses, Enders told BAE counterpart Ian King, "Let's stay friends".
BATTLE ROYALE
Almost a month later, EADS has moved to contain any damage from its summer dalliance with BAE, touting business as usual.
But the tremors sent by the failed deal will be felt in Toulouse, Paris and Berlin for some time.
The relationship between Enders and the German government, already strained by earlier feuds over a costly bailout for the delayed Airbus A400M army plane, will be hard to repair.
The EADS chief is unlikely to ease off his drive to rid the company of state pressure. Meanwhile, Germany is pressing to buy even more shares.
In a paper sent to members of the German parliament's budget committee last month, the economy ministry urged lawmakers to free up 2.65 billion euros to take Germany's stake in EADS up to 15 percent - on par with France.
This could set the stage for a battle over seats and influence on the EADS board. Already, Berlin is threatening to withhold hundreds of millions of euros in loans for the A350. A shareholder pact designed to balance French and German interests within the group poses a legal minefield and could be another source of tension.
"I don't know how the firm is going to be able to manage given the tensions between the various shareholders," said Heisbourg of the Foundation for Strategic Research. "The Germans have made quite clear that they are prepared to exercise their shareholder rights quite aggressively."
Some in the industry believe Germany's goal is to push Enders out to make room for someone more focused on German interests, though aides to Merkel vigorously deny this. Others say the bigger risk is that Enders becomes fed up and chooses to leave himself.
Regardless, many in the industry say that a return to the uneasy status quo that existed before the BAE deal was floated will be next to impossible.
With the dream of a European defense giant dashed, the French could take another look at consolidating their own fragmented sector, which includes combat-to-business jetmaker Dassault, and Thales, Europe's leading defense electronics group.
Keen for a bigger slice of the massive U.S. defense budget, EADS management may feel compelled to look outside Europe for deals, although politics could get in the way again.
"I don't think we've seen the end of this. We may have only seen the first stage," said Alexandra Ashbourne-Walmsley, who runs a defense consultancy in London.
Most worrying of all, say European industry sources, is the spectre of a political fight over the crown jewels of Airbus that stokes dormant national rivalries and scares off investors. With no major new projects on the horizon soon, the opportunities for redistributing jobs are limited for now. But that seems unlikely to keep the Germans at bay.
By blocking the BAE deal, Berlin sent a signal to its partners. It may be open to closer European cooperation, but only on its own terms.
That has implications not just for the bold planemaking project launched by Beteille and others in the decades after World War Two, but also for the crisis-hit bloc as a whole.