Re: A340 development

Date:         21 Feb 97 01:10:40 
From:         matt@firstsol.com (matt weber)
Organization: 1st Solutions Inc.
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In article <airliners.1997.484@ohare.Chicago.COM>, Chuanga@cris.com says...
>
>A few days ago, Airbus and GE announced that GE is not going to offer the
>GEXX for the proposed A340-600X due to differences in pricing and risk
>sharing.  Pratt and R-R are ready to talk to Airbus.  If Airbus does go
>ahead with the A340-600X using either a Pratt or R-R engine, then this
>will be the first time an Airbus airframe is not initially offered with
>either a GE or CFMI engine.

GE has traditionally been pretty savy on the management side, so if GE doesn't
want the business, as Andrew points out, there is probably something seriously
wrong with it. I pointed out in a post regarding the 747-500/600 program that
Airbus's market size estimates approach twice what anyone else thinks the
market is. The current experience is I doubt an all new engine can be
developed for only a billion USD. The last round of engine purchases makes it
fairly clear that neither GE, RR or PW expects to make much money on engines
anytime soon. The only hope is sole source deals, and GE appears to have
essentially walked away from this one. The high cost of R&D is what drove the
GE/PW alliance for the 747-500/600 engine program. PW isn't likely to get any
support for European tax payers to develop the thing, and I doubt RR can
expect much more. Add to that RR is going to take a pretty good size hit when
the smoke clears over the RB211-524G/H reliablity and fuel consumption
problems. Now have to wonder if perhaps that issue may have been one that was
involved in BA's decision to put GE-90's on their 777's.

I am lead to believe by a conversation with senior management of one RR
powered 747-400  operator that the engines do not meet guarantees, (and
never will, RR abandoned the 'get well' program). That is likely to be
continuing drain on RR's income, although I don't know how much of one it is.

>The A340-600X needs a new engine so that the operation cost of the new
>plane can be competitive with Boeing products.  I doubt Pratt will go
>ahead with the Advance Dcuted Prop (ADP).

Unless there is a dramatic and permanent upturn in fuel prices to well past
1USD per gallon before taxes, I think the prop-fans are dead. In addition, the
current week's Aviation Week and Space Technology reports a 777-200IGW+ is in
the works, and  that will push the 777-200 range well past the 7000nm mark. I
think is the kind of news Airbus would rather not be hearing.

IMHO, Boeing has very quietly attacked Airbus where it is going to hurt. The
high cruise speed on the 777 relative to the A340 suggests there are almost no
long haul circumstances where the A340 will get you there sooner than the 777
IGW+ even if you have to make a stop, and a thumbnail calculation of 777IGW+
versus A340 on a 7500nm sector suggests the 777 arrives about 75 minutes
before the A340! So on an 8500nm sector, it is very possible the 777 will
arrive sooner EVEN it has to stop somewhere!! (A340 long range economy cruise
is assumed to be M.78, 777's routinely fly at M.85).

The final problem is that if you really overestimate the size of the market,
each aircraft carries a big R&D price tag with it. I suspect that in the final
analysis that is part of what stopped the 747-500/600. High R&D cost, and in
the final analysis, the increased capital cost of the aircraft was going to
offset any potential ASM savings. I.E total operating costs may not be any
better than the current 747-400.

My opinions anyway..