Articles tagged with: Boeing

15
March
2017

Why so many big defense companies are bowing out of this $16.3B Air Force competition

Featuring: Richard L. Aboulafia

Why so many big defense companies are bowing out of this $16.3B Air Force competition

The Air Force’s future $16.3 billion program to replace its training aircraft has seen each of the so-called “Big Five” defense contractors express an interest in the competition.

It has also seen three of them drop out of the running.

Of those defense giants, only The Boeing Co. (NYSE: BA) and Lockheed Martin Corp. (NYSE: LMT) remain in the Air Force’s Trainer-X competition. General Dynamics Corp. (NYSE: GD) first bowed out in April 2015, with Raytheon Co. (NYSE: RTN) announcing its exit in January and Northrop Grumman Corp. (NYSE: NOC) abandoning the program the week after. Textron Airland also announced that it too would not enter the fray, Defense News reported Tuesday.

So, why do the majority of big name defense companies want out? Given that the Air Force has already awarded contracts for the fighter, tanker and bomber— with not many major programs out on the horizon — one would think they would be clamoring to build the 350 trainers.

Richard Aboulafia, vice president of analysis at the Fairfax-based Teal Group and an aviation consultant, argued that the dearth of major future Air Force programs may actually be what’s behind all these companies leaving the field.

The Air Force, he said, likely took note of this environment marked with "not many aircraft contests" where "everyone is eager to win something” in drafting the request for proposals, allowing it to “extract the best possible terms based on the acquisition side.”

“They basically put forth a contract where you’re not reimbursed for development,” Aboulafia said. “It’s a price-shootout with a little window dressing. You get an incentive for performance but in the broader context of the cost of the program it’s almost insignificant.”

Media Outlet: Washington Business Journal Tags Boeing | Korea Aerospace Industries | Lockheed Martin | South Korea | T-X

28
February
2017

The T-X battle comes down to Lockheed and Boeing

Featuring: Richard L. Aboulafia

The T-X battle comes down to Lockheed and Boeing

WASHINGTON — With U.S. President Donald Trump’s attention fixed on the F-35 and Air Force One, the Air Force’s biggest ongoing aircraft competition so far has gone untouched. But even without Trump’s intervention, the T-X race has evolved into something not unlike an episode of a reality TV show, featuring industry teams breaking up, companies unexpectedly dropping out and upstart entries coming in at the last minute.

The T-X program began with four main competitors: Lockheed Martin, Boeing, Northrop Grumman — which developed a new prototype — and a Raytheon-Leonardo team offering the latter firm’s M-346. Over the past couple of months, Northrop has pulled out of the competition, Raytheon dissolved its partnership with Leonardo — leaving the Italian firm to ally with its US wing, DRS Technologies — and several smaller companies, including Sierra Nevada and the nigh-unknown Stavatti Aerospace, decided to throw their designs into the ring.

Analysts tell Defense News that the drama overshadows the most important point: The competition has become a face-off between Boeing’s clean-sheet T-X design and the Lockheed Martin-Korean Aerospace Industries’ T-50A, the US derivative of a trainer flown by the South Korean, Iraqi, Philippine and Indonesian militaries.

And with the T-50 already in production and thousands of hours of flight time behind it, Boeing will face an uphill battle to keep Lockheed from cinching the contract.

"It looks like the emphasis is still very much on unit price and not much of anything else. It's [lowest price technically acceptable], basically, but with some window dressing,” said Richard Aboulafia, an analyst with the Teal Group. “And given the need to roll up the upfront development costs, Boeing is at a disadvantage. They'd have to be very aggressive price-wise. They obviously have a history of doing that with [the KC-46] tanker, but this clearly puts the advantage with Lockheed."

Media Outlet: Defense News Tags Boeing | Korea Aerospace Industries | Lockheed Martin | South Korea | T-X

13
January
2015

Boeing 737 Boss to Head South Carolina Dreamliner Plant

Featuring: Richard L. Aboulafia

Boeing 737 Boss to Head South Carolina Dreamliner Plant

"Bev Wyse is one of the best-regarded people at Boeing and in the industry," said Richard Aboulafia, an analyst at the Teal Group.

Media Outlet: Reuters Tags Bev Wyse | Boeing | Boeing 737

04
December
2014

First Boeing Air Force Tanker 'On the Flight Line' Despite Earlier Wiring Problems

Featuring: Richard L. Aboulafia

First Boeing Air Force Tanker 'On the Flight Line' Despite Earlier Wiring Problems

Teal Group analyst Richard Aboulafia said he thinks that's doable despite the delays, given that the 1980s-era 767 is such a well-proven machine.

"There's no reason why they can't get through those problems," he said. "They have the domain knowledge of the jet and the technology."

Media Outlet: Puget Sound Business Journal Tags 767 | Boeing | KC-46

16
October
2014

For Boeing, Smooth Airbus A350 Certification Brings New Pressure

Featuring: Richard L. Aboulafia

For Boeing, Smooth Airbus A350 Certification Brings New Pressure

"The 350 is a very serious threat and it's very well executed on," said Richard Aboulafia, aerospace analyst for the Teal Group, an analyst firm outside Washington, D.C. "Boeing was dragging its heels on the 777X and the 787-10, the A350 is a far bigger success than it would have had Boeing been quicker."

He added that Boeing's strained relations with its two largest unions is a potential liability, as the company develops the design and manufacture of the 777X.

"Bad workforce relations are a risk," he said. "It doesn't guarantee that you're not going to execute as well as Airbus did on the A350, but it adds risk. Airbus has better labor relations."

Media Outlet: Puget Sound Business Journal Tags A350 | Airbus | Boeing

13
October
2014

SpaceX May Be A Bargain For NASA, If Musk Delivers

Featuring: Marco A. Caceres

SpaceX May Be A Bargain For NASA, If Musk Delivers

"Boeing's cost structure is higher than SpaceX — that's just a fact," said Marco Caceres, senior space analyst at the Teal Group.

Because the aerospace giant has been around longer, it most likely has an older, more experienced workforce with higher wages and labor costs, he added.

But the biggest cost differences likely come from manufacturing processes. Boeing builds its Delta rocket and Atlas V launchers in a vertical position, while SpaceX's Falcon 9 rockets are assembled horizontally, which is easier and saves on time.

Meantime, SpaceX is a vertically integrated company, building all of its parts in-house, with no subcontractors. Boeing employs numerous subcontractors to build components, which adds to costs. "When you become a more established company, you can't be a specialist in everything," Caceres said.

Media Outlet: Investor's Business Daily Tags Atlas V | Boeing | Commercial Crew Vehicle | Falcon 9 | NASA | SpaceX

06
October
2014

Boeing to Build Some 777X Parts in St. Louis

Featuring: Richard L. Aboulafia

Boeing to Build Some 777X Parts in St. Louis

Shifting 777X work to St. Louis will help Boeing reinforce its industrial and political presence in an area hit hard by the downturn in U.S. military spending, said Richard Aboulafia, analyst with the Virginia-based Teal Group.

He said the decision also reflected Boeing's desire to build more commercial parts in-house after it ran into quality and schedule problems with 787 parts made by outside suppliers. "This will reduce risk on commercial jet programs," he said.

Media Outlet: The Baltimore Sun Tags 777X | Boeing

02
October
2014

Why Boeing Had to Boost 737 Production -- Its MAX Trails Airbus

Featuring: Richard L. Aboulafia

Why Boeing Had to Boost 737 Production -- Its MAX Trails Airbus

"Boeing is at a disadvantage in terms of next generation narrow body timing because Airbus is doing a great job with the A320neo," said Richard Aboulafia, aerospace consultant for Teal Group.

First delivery of the A320neo is scheduled for the fourth quarter of 2015 to Qatar, while first delivery of the 737MAX is scheduled for the third quarter of 2017 to Southwest (LUV) .

"Airbus is going to get there the better part of two years earlier than Boeing," Aboulafia said. "The best thing Boeing can do is to catch up with them as soon as possible. In this high-fuel-cost environment, it's a game of availability; it's all about timing."

Media Outlet: The Street Tags A320neo | Airbus | Boeing

10
September
2014

Musk Seeking Mars Mission After NASA Picks SpaceX-Boeing

Featuring: Marco A. Caceres

Musk Seeking Mars Mission After NASA Picks SpaceX-Boeing

"SpaceX is the new kid on the block, but it's proven its capabilities very quickly," said Marco Caceres, director of space studies with Teal Group, a Fairfax, Virginia-based consultant. "SpaceX would love to be the first commercial company to land its own private astronauts on the moon and eventually go on to Mars."

Media Outlet: Bloomberg Businessweek Tags Boeing | CST-100 | Dragon V2 | NASA | SpaceX

10
September
2014

Boeing-SpaceX Team Splits $6.8 Billion Space Taxi Award

Featuring: Marco A. Caceres

Boeing-SpaceX Team Splits $6.8 Billion Space Taxi Award

"It's entirely possible that we wake up one day and the Russians say, 'We're not taking your astronauts up anymore,'" said Marco Caceres, director of space studies at Fairfax, Virginia-based consultant Teal Group. "NASA's anticipating this possibility. That's why they want to move as quickly as possible with this program."

Media Outlet: Bloomberg Tags Boeing | Commercial Crew Capsule | CST-100 | Dragon V2 | Dream Chaser | NASA | Sierra Nevada | SpaceX

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