Mr. Doug McVitie MA

GLG News by Mr. Doug McVitie MA, Founder & Chief Consultant

Well, the WTO Ruled in Favor of Boeing, But Bloomberg's Take Was Surprising

September 12, 2009

Analysis of:Boeing, U.S. Seen Winning WTO Case on European Aid to Airbus | www.bloomberg.com

So this story is already a week old, but crucially only three weeks into the one-month appeal time. EADS has already made the tactical error of calling this (interim) result "Only Part One", when it simply can't be -- the two cases are separate and so can't be interdependent..So what does EADS do? Appeal and underline its "Part Two" gambit or just totally ignore the reality of the huge anti-European findings and instead focus on the baloney of trying to "talk it out"? Talk, remember, is cheap.

A Frenchman's Word is His Bind

September 5, 2009

Analysis of:US lawmaker says WTO ruling faults Airbus subsidies | us.mg2.mail.yahoo.com

1) EADS chief confident ahead of WTO ruling

"Sauve Qui Peut!" Udvar-Hazy's on a Mission

September 4, 2009

Analysis of:Airbus May Produce Two Versions of Future A320, Tribune Says | www.bloomberg.com

There have been thousands more stupid stories written about Airbus than there were episodes of "Here''s Lucy!" (144), but at least the latter were funny. However, this outwardly dumb idea has some merit despite its "Loony Tunes" provenance (Udvar-Hazy). Interesting too that Bloomberg's aerospace reporting is sharpening up after their Paris Air Show fiascoes.

Spirit's Turner Opens the Door for Slight 737 Reduction in 2010

September 3, 2009

Analysis of:Spirit Chief Executive: Production Cuts Could Be On The Way | www.kake.com

Does this apple taste better than that orange? If we temporarily lower production rates by a couple of aircraft a month on our narrowbodies (not the 30% the original Mini-Me Udvar-Hazy advocated), will it matter? Will the apple taster better than the orange?

Honey, Those Bad Airline Guys Shrunk the A380 Orderbook, Again

September 3, 2009

Analysis of:Singapore Airlines delays A380 deliveries | www.google.com

What do Air France-KLM, British Airways, China Southern, Kingfisher, Lufthansa, Qantas, Singapore Airways, Thai Airways and Virgin Atlantic Airways all have in common? Simple. All nine airlines -- 66% of the entire airline customer backlog -- has ripped up their A380 delivery contracts and told Airbus to go think again. And people thought the Eiffel Tower was a bad joke?

North Carolina Gets Serious on Attracting Defense Business

August 30, 2009

Analysis of:Committee seated to bolster defense aerospace industry | www.enctoday.com

"A new committee was seated by North Carolina’s Eastern Region in Kinston this week to help North Carolina attract defense-related aerospace industry." Defense-related aerospace industry? What else bar the putative second 787 production-line, yet in a masterful piece of strategic business thinking, the already existent Defense/Aerospace Advisory Committee does not once mention the 787 in its communiqué. It has the USAF tanker on its mind... These people know what they're at.

ILFC Sale Grinds to a Halt

August 29, 2009

Analysis of:AIG paused auction of aircraft leasing firm | www.reuters.com

The ILFC saga draws no nearer to a stable market conclusion.Crippled by huge accumulated debts and the loss of access to AIG's preferential credit terms, ILFC is today only a shadow of its former self, and is about as marketable as last Monday's weather forecast..

Positive Early Signs Coming out of Far East

August 28, 2009

Analysis of:Korean Air and Air China see a return in European and American demand | www.centreforaviation.com

This isn't the biggest investment story of the year but I reckon it's a three-minute read with longer-term implications, so worth bothering about.

Airbus Lost $7.5bn+ Trying to Flog the A350XWB

August 28, 2009

Analysis of:Breaking: Boeing targets 787 first flight by end of 2009, first delivery in 4Q 2010 | www.flightglobal.com

It's not often I quote this rather scattershot Flight blog because despite its undoubted accuracy at times, it's also capable of some of the least-incisive aerospace thinkng out there. And that's some achievement. But there's a reason to follow the story for this time round.

Airbus Still Owes $4bn on A380 Launch Aid

August 28, 2009

Analysis of:Boeing hopes WTO ruling will avert Airbus A350 aid | www.besternews.com

It's ironic; Airbus has delivered 18 A380s in four-and-a-half-years, the aircraft has a current market value of about $157m, giving the installed fleet a market value of slightly more than $2.8bn, yet Airbus still owes $4bn+ in 'repayable ' launch aid for the most subsidized, most deferred aircraft in history. And the arrogant French still believe they have a right to launch assistance for their putative, much-relaunched and many-times-mocked A350? Give me strength.

US Commercial Aerospace Industry is Really Movin' South...

August 28, 2009

Analysis of:Boeing Announces New 787 Schedule and Third-Quarter Charge | boeing.mediaroom.com

Just as the heart of the European aerospace industry used to to be Toulouse but is in fact now Hamburg, both dwarfed of course by the artificial monstrosity that is Dubai and the Middle East; so the heart of the US aerospace industry is shifting from the Pacific Northwest to the Central Southern States, it would seem. Nothing lasts forever...

Boeing will FLy 787 in Fourth Quarter

August 27, 2009

Analysis of:Boeing Announces New 787 Schedule and Third-Quarter Charge | boeing.mediaroom.com

Ending months of pointless media speculation and the useless senseless fabrication, Boeing today announced it expected to fly the 787 before the end of the 2009 and to make first deliveries to All Nippon Airways in the fourth quarter 2010. This will begin the biggest ramp-up in the history of commercial aviation to try to reduce the highest new-aircraft backlog manned flight has ever seen -- a double whammy of spectacularly positive proportions

Airbus in Cloud Cuckoo Land re Upcoming WTO Ruling

August 26, 2009

Analysis of:WTO Ruling on Aircraft Subsidies Pending | www.aviationweek.com

Once again, Airbus firmly believes it is in the right as far as subsidies go and the rest of the market is mislead. But as my great friend and long-time colleague Richard Aboulafia so succinctly puts it, "EADS is cash rich...and does not need government money; there are plenty of legal, or at least subtle, ways to achieve the exact same result of helping to make the A350XWB happen.” So why is Airbus not paying its own way, then?

Airbus 1H09 Net Income Drops 6%, EBIT Down 27% as Problems Pile Up

August 25, 2009

Analysis of:EADS second-quarter profit up 76%; Airbus targets 300 gross orders | atwonline.com

Just as parent company EADS recently reported improved 2Q YoY figures belying an overall negative first half , so commercial-aircraft division Airbus, while touting "sound financial management" (EADS ceo Gallois), was unable to avoid a huge 27% EBIT drop YoY on just a 1% drop in Earnings. That's disciplined financial management? Hate to see what a free-for-all would look like,,,

Ever Seen an F-16 Fly Backwards at 35,000ft?

August 24, 2009

Analysis of:Loss of Control in an F-16 Fighter, Test Pilot on Yaw Departure | www.avweb.com

The Lockheed Martin F-16 Fighting Falcon, in service for more than 30 years, is a fourth-generation multirole jet fighter originally designed by General Dynamics Corp as a lightweight VFR fighter for the USAF. Such has been its ubiquitous success, more than 4,000 have been sold to foreign air force on top of 1,300+ deployed at home. At altitude, say 35,000ft and of course according to weight and armament, The F-16's top speed is put at around Mach 2+, or roughly 1,500 mph. Forwards...

Aerospace Chess Grand Master Lufthansa Pre-Positioning Pieces

August 23, 2009

Analysis of:Lufthansa Talks With Virgin Over Possible BMI Sale, Times Says | www.bloomberg.com

Lufthansa's taking to Virgin Atlantic is like the head girl talking to the school's fashion queen -- very little in common yet bound by the same elementary rules. So why is the German flag-carrier ostensibly turning its back on bmi's 11% Heathrow landing slots? But head girls don't get to be head girls without having more smarts than the average fashion queen, so there's much more to this duo than meets the eye.

787, A350 Delays Push back VSMPO Titanium Ramp-Up

August 23, 2009

Analysis of:VSMPO-Avisma postpones titanium expansion by 2 years | www.forbes.com

Russia's VSMPO-Avisma , the world's largest titanium producer, has postponed a major increase in production until 2014, two years later than planned, due to the financial crisis, a company official said. Looking beyond the corporate-speak however, is the massive upset to titanium draw-down plans caused by the A350 and 787 delays.

Russia Slates Loss-Making Plane Builders

August 19, 2009

Analysis of:Putin:Russia will not save plane builders | www.chinadaily.com.cn

Imagine this were said in Europe rather than in Russia: "I would like to warn you against the illusion that the state will cover losses indefinitely, pull you out of debt and correct management's mistakes...". They won't like to read that over their cornflakes in Toulouse this morning.

BAE Systems Wants Supplier Subsidies

August 18, 2009

Analysis of:BAE warns of credit threat to suppliers | www.telegraph.co.uk

In a thinly veiled attempt to muscle in on the UK government's latest pro-Airbus handout to GKN, BAE Systems has warned it too could suffer if lower-tier suppliers run short of cash. Well yes, guys. This is called business.

Is there a Weakling Amongst US Carriers Today?

August 16, 2009

Analysis of:Liquidity will determine how long carriers can survive, analysts say | www.dallasnews.com

It seems axiomatic that liquidity will determine how long US carriers can survive, as the referenced article details, but in fact there's more to it than that. The article itself is an excellent piece of airline financial analysis by serious industry professionals rather than bloggers and other observers and as such is worth developing slightly.

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