Ryanair says it will not buy 200 Boeing aircraft

December 18, 2009

LONDON — Budget carrier Ryanair PLC has stopped discussions to purchase as many as 200 new Boeing 737-800 aircraft after being unable to extract concessions from the manufacturer.

Ryanair chief executive officer Michael O’Leary said Friday that pricing for the aircraft — which were to be delivered between 2013 and 2016 — had been agreed, but that Boeing was “unwilling to incorporate some other terms and conditions” in the order.

He said it’s unlikely the company will reopen negotiations with Boeing or any other manufacturer.

“Instead we will focus our efforts on maintaining Ryanair’s strong traffic and new route growth into 2010,” O’Leary said. “We look forward to briefing shareholders in the first quarter of the New Year with a revised strategy which will comprise much reduced capital expenditures through 2011 and 2012.”

However, the airline will still take delivery of 112 Boeing 737-800s over the next three years. Ryanair is one of Boeing’s biggest customers.


United Orders 50 Wide-Body Airplanes From Boeing, Airbus

December 17, 2009

UAL Corp.’s United Airlines confirmed Tuesday that it placed initial firm orders for 50 wide-body planes, evenly split between Boeing Co.’s 787 Dreamliner and rival Airbus’s new A350 model, and arranged future purchase rights for 50 more of each.

United, the third-largest U.S. airline by traffic, hadn’t ordered new aircraft for 11 years. The carrier began shopping last summer, figuring it could drive a better bargain by pitting the manufacturers against each other at the bottom of the business cycle. The airline hired aviation-consulting firm Seabury Group LLC to help it negotiate.

At catalog prices, the order is valued at more than $10 billion, but major customers such as United usually win substantial discounts. These can exceed 40% off list prices, industry officials say, although actual pricing varies widely for each deal.

While United wouldn’t comment on precise terms of the deal, Chief Financial Officer Kathryn Mikells said the airline benefited from the timing and “secured the right aircraft and the right deal,” one that requires minimal capital through 2013.

“They are clearly buying at the bottom of the market, which is always a smart thing to do,” said Airbus Chief Operating Officer John Leahy, the company’s top airplane salesman.

Ms. Mikells said United won significant “backstop” financing from the manufacturers, meaning Boeing and Airbus will finance the purchases if the airline can’t find more attractive options in the credit markets when the planes are closer to delivery.

Dividing the order also gives the airline an opportunity to have the manufacturers compete all over again when United looks to convert the additional future purchase rights into firm orders, she said. The airline also can substitute other versions of these models in the future. Between favorable deal terms, the fuel and maintenance savings the new planes will bring and the revenue boost from serving new international markets with the smaller planes, Ms. Mikells said, the aircraft will produce a return on investment.

United said it will take deliveries between 2016 and 2019, with the new planes replacing its existing Boeing 747s and 767s used on overseas routes. Chicago-based United said it will hold another competition next year for a potential replacement for its aging 757 narrow-body planes.

Boeing’s new-technology 787 has been delayed by developmental problems. The manufacturer isn’t expected to begin deliveries until late 2010, 2 ½ years late. Boeing has said the plane could make its first test flight as soon as next week. Dozens of 787 orders have been canceled as airlines have grown frustrated with the delays—and because the recession has taken a toll on airline budgets.

United’s order is Boeing’s first for the advanced new plane since May and the first new customer named for the Dreamliner in more than 18 months, a big boost for the manufacturer, also based in Chicago.

The first version of the 787, which seats as many as 250 passengers and is designed to fly about 8,000 nautical miles, has attracted 840 orders from 55 customers, including Delta Air Lines Inc., AMR Corp.’s American Airlines and Continental Airlines Inc.

Airbus’s rival A350 model has logged 493 orders from 31 customers, with US Airways Group Inc. and Hawaiian Holdings Inc.’s Hawaiian Airlines being the first U.S. customers. The A350 is designed to seat 270 passengers and fly 8,300 nautical miles. Airbus is expected to start delivering the new A350 to customers in 2013.

United’s split purchase also is a victory for Airbus, which has never sold wide-body jetliners to the carrier, even though United was the first major U.S. airline to buy Airbus’s A320 single-aisle planes roughly 20 years ago. Boeing had tried to keep United exclusively in its camp for long-range planes by proposing its existing 777 model, in addition to the 787, according to people familiar with the negotiations. United operates 52 777s. But Airbus was able to make a case for its A350 model, now in development.

This deal is the sixth time airlines have opted for both models. The two often are considered direct competitors, but the A350 family of three versions is larger than the two long-range 787 models. Singapore Airlines Ltd. and Qatar Airways have ordered both planes. “A big airline like United can use two wide-body types efficiently and optimize for their route network,” said Mr. Leahy, the Airbus operating chief.

The A350-900’s range is 11% greater than the existing 747’s, and the 787-8 can fly 32% farther than United’s existing 767s. Having both allows the airline to fly to a broader array of farther destinations with fewer seats, while saving on fuel and maintenance.

Officials at Airbus parent European Aeronautic Defence & Space Co. are likely to tout such decisions by private airlines to procurement officials at the U.S. Department of Defense, who must choose between competing jetliner models from Boeing and Airbus as the basis for midair refueling planes the Air Force plans to buy. The Pentagon wants to buy only one plane model, while some members of Congress are pressing for a split purchase.

GE Aviation adds workers

December 17, 2009

GE Aviation is expanding its operation in the northern Mississippi city of Batesville.
Gov. Haley Barbour said Monday that the company will add 350 jobs over the next several years.
The plant makes composite components for the GEnx jet engine, which will power Boeing’s new 787 and 747-8 aircraft.
A news release from Barbour’s office says the GEnx is the world’s only jet engine with composite fan blades, composite fan platforms and composite fan case.
Barbour says the expansion represents a company investment of about $85 million. The state is providing $8.6 million of incentives, and Panola County is providing $4 million.

Bids received for indigenous fighter aircraft’s engines

December 17, 2009

NEW DELHI: India has received bids for developing a more powerful engine for the homemade Light Combat Aircraft Tejas, as the development of the
indigenous Kaveri engine is yet to be completed, Defence Minister A K Antony told the Lok Sabha on Monday.

Antony said in a written reply that the proposal on developing the engine under a joint venture is under consideration with the government.

“Request for proposal (RFP) for procuring 99 engines have been sent to two short-listed engine manufacturers, namely GE F414 from General Electric Aviation, USA and EJ200 from Eurojet Germany,” Antony said.

“The engine houses have responded to the RFP. Both commercial and technical responses have been received for procurement of 99 engines along with transfer of technology,” Antony added.

Tejas, meant to replace the ageing MiG-21 fleet of the Indian Air Force (IAF), is currently under development in Bangalore for the last couple of decades.

The Aeronautical Development Agency of the DRDO is developing the supersonic combat aircraft along with the Hindustan Aeronautics Ltd. (HAL).

The IAF has placed an order for 20 Tejas lightweight multi-role planes, India’s second indigenous fighter aircraft, and is inclined to increase the number to 40.

Earlier, it was planned that a turbofan engine, the GTX-35VS Kaveri, being developed by the Gas Turbine Research Establishment (GTRE), would be fitted to the production aircraft. But delays in development led to the purchase of General Electric engines, which even faced rough weather due to the sanctions imposed post-1998 nuclear tests.

The IAF had expressed reservations about the GE engines as it increased the plane’s weight from 8,000 kg to 10,000 kg. This delayed the production of the aircraft and it will be ready for delivery only by 2011.

General Electric Company (NYSE:GE) Releases FY 2010 Revenue Guidance

December 17, 2009

General Electric Company (NYSE:GE) has issued a revenue guidance for the fiscal year 2010, reporting flat revenue growth for the year. It’s revenue forecast is anticipated to be flat at around $155 billion. Reuters Estimates, analysts are expecting $150 billion during the fiscal year 2010.

A diversified technology, media and financial services company, General Electric Company creates products and services for aircraft engines, power generation, water processing, security technology, medical imaging, business and consumer financing, media content and industrial products. The company acquired ScanWind in September 2009.

China picks CFM to power future aircraft -Les Echos

December 17, 2009

An agreement is set to be signed on Monday in Beijing during a visit by French Prime Minister Francois Fillon, the paper said. CFM is a joint venture between General Electric (GE.N) and France’s Safran (SAF.PA).

Under the deal, CFM would provide its LEAP-X turbofan engines, currently being developed, for the government-backed Commercial Aircraft Corporation of China’s (COMAC) C919 plane, Les Echos said.

COMAC has said it will select engine suppliers for the C919 by the end of the year and has been holding talks with four main engine suppliers, including General Electric, Rolls Royce (RR.L) and United Technologies Corp’s (UTX.N) Pratt & Whitney.

China’s C919 would have at least 150 seats and deliveries are expected to start in 2016, COMAC has said. COMAC could yet choose multiple engine suppliers for the C919, Les Echos added. CFM, which is the sole supplier for Boeing’s 737 series, expects the LEAP-X could be certified by 2016. The engine will run on 16 percent less fuel and have 16 percent fewer CO2 emissions than existing CFM engines, according to CFM.

GE Aviation buys Washington Aerospace tech firm

December 17, 2009

GE Aviation on Monday said it has purchased Naverus Inc. — a Kent, Wash.-based maker of technology used to help pilots land airplanes — for an undisclosed price.

Naverus was founded six years ago by Alaska Airlines pilots Steve Fulton and Hal Andersen, and entrepreneur Dan Gerrity. The company now employs 60 people.

Naverus makes performance-based navigation (PBN) technology that it says can reduce airplane fuel consumption and carbon emissions, as well as increasing airspace capacity.

“The acquisition of of Naverus brings some of the best PBN technology to GE Aviation’s Systems business, further expanding our commitment to deliver environmental results for our customers,” said Lorraine Bolsinger, president and CEO of GE Aviation Systems, in a news release.

GE Aviation, based in Evendale, develops and manufactures jet engines for commercial and military aircraft. It is a unit of General Electric (NYSE: GE), headquartered in Fairfield, Conn.

Defensive Posture Helped Boost GE

December 17, 2009

General Electric Co. Chairman and Chief Executive Jeff Immelt told investors Tuesday that the “worst is over” for the company’s finance unit, and he forecast that GE revenue next year will roughly equal this year’s.

Speaking from the stage of “Saturday Night Live” in New York’s Rockefeller Center, Mr. Immelt said GE’s outlook improved after the company played “defense” for much of the past year. “I think you can think about the company being back on offense, doing what we do best,” he said. He also said the global economic environment is improving, though he expects the recovery to be gradual.

GE projects 2010 revenue of about $155 billion, flat with this year, and a profit margin of about 16%, also unchanged. GE doesn’t offer a formal earnings estimate, but Mr. Immelt said he expects sales and profit in GE’s industrial units to be roughly flat next year compared with this year. GE said last week it expects profit at its finance unit, GE Capital, to be flat in 2010.

Mr. Immelt expects sales of industrial equipment such as locomotives and aircraft engines to fall in 2010, but he hopes to compensate with increased revenue from servicing previously sold equipment. Services will account for as much as 70% of the industrial units’ profit, he said.

The company said it will have $7 billion or $8 billion of cash on hand at the end of 2009 and $23 billion to $26 billion at the end of 2010. Mr. Immelt said GE plans to use some of the cash for industrial acquisitions.

He also said the company will realize $11 billion this year in orders and revenue from economic-stimulus programs in the U.S., China, Europe, Japan and elsewhere. He said 40% of that revenue is coming from outside the U.S., on projects such as water, health care and clean energy.

GE wants to rebuild trust with investors after the credit crisis and recession, when GE was forced to cut its dividend and lost its triple-A credit rating, Mr. Immelt said. “We’ve gone through a lot. We’ve put you through a lot,” he added.

He also acknowledged that GE Capital had expanded too aggressively in areas such as real estate and “got into businesses that are not part of the GE core.” GE has injected $15 billion into GE Capital in the past 18 months and plans another $2 billion infusion in 2011 to shore up the troubled unit.

Steven Winoker, an analyst at Bernstein Research in New York, said GE’s projection was “more reasonable” than in prior years.

The company’s stock fell 20 cents Tuesday in New York Stock Exchange composite trading, to $15.75 a share. It’s down 2.8% for the year, compared with a 19% gain in the Dow Jones Industrial Average.

Mr. Immelt said GE’s NBC Universal entertainment unit expects to lose “a couple hundred million bucks” on broadcasts of the Winter Olympics from Vancouver in February.

He added that GE’s plans to sell a majority stake in NBC Universal and shrink its finance unit will make it easier to manage—and to understand—the company. “Going forward, we really just have a simpler task,” he said. “It is to continue to invest and grow in infrastructure and technology businesses and to create value in our capital-finance businesses. It’s a much easier hand to play.”

Airbus: A330 Tanker Passes Simultaneous Refueling Test

December 17, 2009

PARIS (Dow Jones)–European aerospace giant Airbus Tuesday said its A330 Multi-Role Tanker Transport aircraft passed another program milestone last week by simultaneously refueling two fighters.

Airbus is the plane-making arm of European Aeronautic Defense & Space Co.(EAD.FR)


-A week ago the A330 MRTT completed its first in-flight wet contact with a fighter using one of its new generation Cobham 905E hose-and-drogue refueling pods and last week the aircraft passed fuel to two Spanish Air Force F/A-18A+ fighters simultaneously.

-In the latest trial, the aircraft took off from Airbus Military’s Getafe facility near Madrid and met two F/A-18A+ aircraft which had flown from the Spanish Air Force base at Torejon.

-During a two-hour sortie the two fighters received 11,400 kilograms of fuel in a sequence of 13 contacts of which 11 were simultaneous. The operation was conducted at an altitude of around 15,000 feet and a speed of 250 knots and used only the hose-and-drogue pods.

Air France Airplane crash remains a mystery: Investigators

December 17, 2009

Paris: Investigators are unable to establish what caused a fatal June Atlantic plane crash but searches for the flight recorders will resume in February, the head of the French aviation accident investigation authority said.

“We remain unable to determine the causes and circumstances of the incident,” Jean-Paul Troadec, head of the BEA accident investigation authority told French radio on Sunday.

Flight AF 447 from Rio de Janeiro to Paris crashed into the Atlantic on June 1 after flying into stormy weather, killing 228 people.

The ‘black box’ flight recorders are still missing and only small parts of the wreckage have been found of the Airbus A330.

The French authority is due to issue a report on Thursday which will recommend ways to help locate black boxes more easily, sources close to the incident have said.

“Normally, these recorders are made to resist significant shocks,” Troadec said. “There is still a chance that they are in a good shape and readable.”

Troadec was in Rio de Janeiro on Sunday to meet the victims’ families.

He said the authority was making calculations to determine where the plane might have crashed and where its debris might have drifted.

Without the black boxes, he said investigators could not fully explain the incident.

Asked if this week’s report would contain new elements, Troadec said: “Yes, namely recommendations in terms of security which were not in the first report.”

A July report identified problems in handing responsibility for the aircraft between controllers but said it was too early to say what caused the plane to hit the ocean.

“I don’t expect much new concrete information on the cause of the crash,” a source familiar with the investigation told a news agency.

A second source familiar with the incident concurred, saying the report would add little to an inconclusive preliminary report issued in July.

More Beacons

Speculation has focused on the possible icing of the aircraft’s speed sensors, which appeared to give inconsistent readings and may have disrupted other systems.

Safety authorities ordered checks on the sensors known as ‘pitot probes’ and restricted the use of the type installed on the plane, made by France’s Thales.

But investigators are not expected to pin the blame on any one issue, one source close to the investigation said.

Instead, the BEA is expected to make at least three recommendations on general aircraft safety, the source said.

These include extending the life of locator beacons attached to the flight recorders to 90 days from 30 days.

Regulators could also be asked to consider ordering further beacons to be attached to important parts of the aircraft structure to assist in locating wreckage in the event of a crash. Such beacons would need to be active for 30 days.

Plane makers may also be asked to study the feasibility of installing monitoring systems that send information on basic parameters such as position, course and altitude back to an airline’s maintenance base even when operations are normal.