Delta chooses Airbus over Boeing for 40-plane order

[Sen. Walter Sobchak]

Source: Reuters

Delta Air Lines Inc (DAL.N) announced an order for Airbus jets on Wednesday worth almost $6 billion at list prices, softening its reliance on Boeing for the first time in two decades as it looks for plane bargains. The order, crowning a months-long competition between the transatlantic plane-making rivals, includes 30 A321 narrowbody planes to be used on domestic flying as well as 10 A330-300 widebody aircraft for international routes. Deliveries will be between 2015 and 2017. The list price for the deal is $5.6 billion, but analysts said Delta may have won a steep discount after holding out longer than most of its rivals for lower prices as Europe's Airbus seeks to expand recent successes in Boeing's home market.

(snip)

Like the A321, the larger long-haul A330 is also part of Airbus's existing portfolio, competing on price and availability with Boeing's modern carbon-composite 787 Dreamliner. More than three years of delays getting the 787 into service allowed Airbus to improve the A330, analyst Scott Hamilton, of Leeham Co, said in a review of Delta's fleet purchases. The expectation of the 787 killing the A330 "hasn't worked out," he said. Delta has deferred its delivery of the 18 787s it has on order to 2020-2022. Those jets were ordered in 2005 by Northwest Airlines before it merged with Delta.


Read more: http://www.reuters.com/article/2013/09/04/us-delta-planes-idUSBRE9830QC20130904

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Starting in 2016 the A321's will be built at the new Airbus assembly line in Alabama:
http://www.aviationweek.com/Article.aspx?id=/article-xml/awx_09_04_2013_p0-612804.xml

[darkangel218]

1. I like airbus better.

[warrant46]

8. Looks like the cheese eating surrender monkeys have some work to do

[onehandle]

2. Ok. Whatever tax breaks they get here, they should lose right fucking now. nt

[Sen. Walter Sobchak]

3. You must really hate Alabama

[onehandle]

9. Alabama is a Right To Work state and Airbus is a French company.

Being from Georgia, being pro-Union, and having a lot of French blood...

Yeah, I'm not a big Alabama fan in this case I suppose.

[liberalmike27]

13. First Thought

"Well, that's bad for Boeing and America." Then I remembered I live in Mobile, so my second was "But good for here."

Still, I'd agree the move from France to here is the same dynamic of race to the bottom, as companies moving from here to Mexico or China. So overall it's probably a bad thing.

[cstanleytech]

5. Explain it to me please, why should they be punished exactly?

[Spider Jerusalem]

7. Because US-based airlines are actually buying their products?

But the billions in subsidies and preferential military contracts Boeing gets are A-OK, I guess.

Maybe if they could build planes that wouldn't catch fire they'd sell more of them.

[Rebellious Republican]

4. Capitilism at its best.

Dontcha love it! Someone was telling me the other day how the south destroyed the unions. Sorry for the folks in Alabama, it may sound calous, but get get what you vote for. Simple fact, time to hit the streets and make your voice heard.

Yes I am a proud southern member of a union.

[fujiyama]

6. All I know

is if I were managing an airline company and had to make a decision, I sure as hell wouldn't be purchasing 787s. It still has a lot of kinks to be worked out.

[Divernan]

10. "Airbus' top man in US has most exceptional aviation resume of any aerospace exec in US."

(My post from another thread going into detail about Boeing's FUBAR move of 787 manufacturing from Seattle to Charleston.
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=3526130)
The comments on this story in the Seattle times make a lot of disparaging comparisons of the "21st century MBAs leading Boeing" versus the industry-savy, aerospace-experienced engineer/fighter pilot American heading up Airbus' US efforts. I don't fly as much as I used to, but in the future, given a choice, I'll fly on an Airbus plane, not Boeing. . I don't fly as much as I used to, but in the future, given a choice, I'll fly on an Airbus plane, not Boeing.

http://seattletimes.com/html/businesstechnology/2021226174_airshowmcartorxml.html

LE BOURGET, France — Airbus lost the long and contentious bidding to build an aerial-refueling tanker for the U.S. Air Force, but Airbus Americas chairman Allan McArtor asserts there are signs that Boeing will stumble and give its rival a renewed opportunity. “I think we’ll get another shot at it,” said McArtor in an interview at the Paris Air Show Wednesday.

He also said that Airbus, which has U.S. engineering centers in Wichita, Kan., and Mobile, Ala., is likely to add two more in the next decade and will seriously consider locating one in Washington state. “We are attracted to Washington state for the same reason we were attracted to Wichita. That’s where the talent is,” he said. “If you want to have access to the talent that developed over the last 100 years of aviation, Washington is very fertile ground.”

Those startling ideas came from Airbus’ top man in America, who has probably the most exceptional aviation résumé of any aerospace executive in the U.S. A highly decorated combat-fighter pilot in Vietnam, he was an associate professor of engineering at the Air Force Academy, then flew as a pilot in the Air Force Thunderbirds flying-display team.

Afterward, he headed air operations at FedEx, and under President Reagan he was head of the Federal Aviation Administration (FAA) for two years. Immediately before joining Airbus, he was chief executive of Legend Airlines, a regional carrier out of Dallas.

[Divernan]

11. Boeing's Union-Busting Move to SC Backfires; Can't Meet 787 Production Demand.

Boeing's Union-Busting Move to SC Backfires; Can't Meet 787 Production Demand
Boeing has learned there's a difference between RIGHT to work and ABILITY to work. When Boeing left Washington for South Carolina in order to suppress the wages of its workers, it also left behind the quality work that had been provided by a highly skilled, union workforce. Now, that union-busting is backfiring as productivity has dropped immensely and Boeing is unable to meet their 787 Dreamliner production goals.

Via to the Puget Sound Business Journal:

Boeing’s South Carolina facility is running behind projections and won’t make its goal of producing three 787 Dreamliners a month by the end of 2013. In fact, the Everett plant will have to make up the difference in order for the company to reach its overall goal of 10 jetliners a month by year’s end.

As recently as July 24, when Boeing announced second-quarter earnings, Boeing CEO Jim McNerney insisted the company is on track to hit 10 Dreamliners monthly by the end of this year. But how Boeing accomplishes that has become more problematic. Company executives have started saying that Boeing’s North Charleston, S.C., plant is somewhat behind its goal of contributing three 787s monthly by the end of 2013.

The cost savings associated with moving to South Carolina, where workers are paid nearly half of what workers in the Everett, WA plant make, are now for naught. The Everett plant will be counted on to make up the difference.

For Boeing, the news is only getting worse as one of their largest global competitors, Airbus, is looking to move to Washington state to build their new engineering center. Airbus Americas Chairman Allan McArtor explained the move:

We are attracted to Washington state for the same reason we were attracted to Wichita. That’s where the talent is,” he said. “If you want to have access to the talent that developed over the last 100 years of aviation, Washington is very fertile ground.”

http://www.bizjournals.com/seattle/news/2013/08/02/everett-will-have-to-make-of.html?page=all

Boeing moved to South Carolina to take advantage of “Right-to-Work” laws. In an internal memo that leaked they said, “the only consistent advantage attributed to Charleston was the ability to ‘leverage’ the site placement decision toward ‘rebalancing an unbalanced and uncompetitive labor relationship.’” Their new workforce is woefully inexperienced and cannot meet demand so they have to go back to Washington to get back on track. Meanwhile, their competitor is swooping in and taking advantage of the incredible wealth of skills in Washington. If karma has its way, the worker well will be dry before Boeing has a chance to return.

http://wepartypatriots.com/wp/2013/08/23/boeings-wage-slashing-move-to-sc-backfires-as-company-cant-meet-787-production-demand/

[Divernan]

12. Warning: Don't put your family on a 787 built in Charleston - "just shy of JUNK"

Here are two readers' comments from the Puget Sound Business Journal
Mark Costas · Kansas City, Missouri
Boeing decision makers continue to lie about the true speed and quality of work in Charleston. They continue to attempt to convince the public it was a wise decision to build that plant. Every single section of airplane that arrives in Everett (Boeing's Everett plant near Seattle, WA) from Charleston needs rework. Everett employees have to redo the work that Charleston botches and then still build the planes to meet the rate increases. You NEVER here the media fawn over Everett because Boeing and Nikki Haley doesn't want the truth to get out. Trust me, you do NOT want to put your family on a 787 that is built entirely in Charleston.
Reply · 2 · Like · Follow Post · August 4 at 12:11pm

John A. Totten · Top Commenter · Miami University
IIRC the 1st 3 fuselage sections sent from Charlotte to Everett were just shy of JUNK. All required MAJOR reworks before they could go on the assembly line. I shudder to think what an entire aircraft would contain.