Airbus to Expand Production in China, Putting Further Pressure on Boeing

European plane maker’s move comes as U.S. rival grapples with trade tensions, MAX grounding

Airbus SE EADSY 0.60% plans to boost jetliner production in China, bolstering its position in what is set to be the world’s biggest aviation market and piling further pressure on Boeing Co. as the U.S. company contends with trade tensions and the grounding of its 737 MAX plane.

The France-based plane maker is gaining market share while Boeing grapples with the global grounding of the MAX after two fatal crashes and a dearth of orders for larger aircraft. The U.S. aerospace giant’s efforts in China are also being hindered by the continuing trade dispute between the two countries.

Airbus said Wednesday that it would expand its A330 wide-body completion center in Tianjin to be able to handle its bigger A350 model. The company is also lifting local production of its A320neo, its 737 MAX competitor.

The agreement with the Chinese government was outlined during a visit by French President Emmanuel Macron to his Chinese counterpart, Xi Jinping, in Beijing.

The move comes weeks after Boeing was forced to cut back production rates for its 787 Dreamliner, citing U.S. trade tensions with China and a lack of demand from Chinese carriers. Boeing’s last China order was in November 2017.

Airbus has meanwhile been leveraging the fallout by boosting its production in China and winning orders for its own models. Its last order from China was as recent as March.

Excerpt from WSJ

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Rolls-Royce Warns of Further Hit From Trent Issues

Rolls-Royce Holdings PLC (RR.LN) on Thursday warned of a further earnings and cash-flow hit on the back of issues in its troubled Trent 1000 engines, as the company expects to book a charge of 1.4 billion pounds ($1.80 billion).

The British aircraft-engine maker said it now expects full-year operating profit and free cash-flow to be toward the lower end of its guidance ranges as a result of higher costs in fixing Trent 1000 engines used on Boeing Co. ’s (BA) 787 Dreamliner planes.

The company estimates in-service cash costs over the Trent 1000 issues will amount to GBP2.4 billion across the 2017-23 period. This includes GBP1.6 billion previously expected, a fresh GBP400 million hit and a further GBP400 million in costs previously included within the company’s normal program contingency, Rolls-Royce said.

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Boeing vs. Technological Chaos


Human beings and their machines find it hard to understand each other.

When congressional hearings were inaugurated, they were supposed to be information-seeking exercises. Not much information seeking went on at last week’s hearings on the Boeing 737 MAX. Senators gave speeches deploring plane crashes. Even when they asked questions, they seldom waited for answers. And if any legislation results, it will surely be written by staffers based on agendas long ago hashed out.

All in all, a display of institutional decadence not unlike the one that seems to have afflicted Boeing and the Federal Aviation Administration in their implementation and approval of MCAS, the automatic software system blamed for two terrible crashes in Indonesia and Ethiopia.

To the question of how such a system could find its way into a plane, the answer seems to be “by mistake.”

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Once a Problem Child, the Dreamliner Keeps Boeing Afloat

Inflows of cash from the once-troublesome 787 Dreamliner are now sustaining the production of the grounded 737 MAX

In a twist of fate, Boeing’s BA +1.23% financial health through the 737 MAX crisis will rely heavily on what was once another problem child: the 787 Dreamliner.

During the release of its third-quarter results late in October, Boeing said the 787’s production rate would be lowered from 14 to 12 a month in late 2020 as a result of weakening demand for large jets. The model is now a key source of cash for Boeing, especially while the smaller MAX remains grounded by regulators world-wide.

Boeing spends roughly $3 billion a quarter to face debt payments and the dividend that has helped retain investors through the crisis. But producing MAX jets without selling them is creating a quarterly cash drain that seems to amount to between $4 billion and $7 billion, forcing the company to issue debt.

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