This is how cabotage starts

[MikeD]

UAL and DAL have both (or will both) benefited from Chapter 11 and wether you like it or not, it's somehow a state backing (our good friend Wikipedia explains that a chapter 11 is filed with the FEDERAL bankruptcy court to obtain protection etc. Notice the FEDERAL). This refusal to acknowledge that US airlines have, do or will receive help, protection from the federal government is so hypocrite it makes me want to eat my sidestick. The same way Boeing whines about Airbus being state funded it is just the same state funded through its military branch thanks to massive corruption to obtain contracts (see the scandalous 330 vs 767 case that landed Boeing execs in jail for corruption and yet that got the 767 selected). So please stop thinking that brave US companies are surrounded by a bunch of lazy and state funded airlines because it is wrong.

And further, the 330 was selected even to be the KC-46, to be assembled in Mobile, Alabama here. Boeing whined and cried about not knowing the award terms, managed to get that award cancelled, and got their 767 selected in order to keep the line open.

Whether anyone likes it or not, Airbus was fairly awarded that contract, and had it removed from them.

 

[Cherokee_Cruiser]

UAL and DAL have both (or will both) benefited from Chapter 11 and wether you like it or not, it's somehow a state backing (our good friend Wikipedia explains that a chapter 11 is filed with the FEDERAL bankruptcy court to obtain protection etc. Notice the FEDERAL). This refusal to acknowledge that US airlines have, do or will receive help, protection from the federal government is so hypocrite it makes me want to eat my sidestick. The same way Boeing whines about Airbus being state funded it is just the same state funded through its military branch thanks to massive corruption to obtain contracts (see the scandalous 330 vs 767 case that landed Boeing execs in jail for corruption and yet that got the 767 selected). So please stop thinking that brave US companies are surrounded by a bunch of lazy and state funded airlines because it is wrong.

+1

 

[Pilot Fighter]

And further, the 330 was selected even to be the KC-46, to be assembled in Mobile, Alabama here. Boeing whined and cried about not knowing the award terms, managed to get that award cancelled, and got their 767 selected in order to keep the line open.

Whether anyone likes it or not, Airbus was fairly awarded that contract, and had it removed from them.

If the Air Force hadn't mismanaged the program, Boeing wouldn't have received a second chance. I've seen the full report, compliments of my father, a retired Boeing VP not involved in the program. I'm not sure it has been released to the public yet. That said, my father also admits that if the Air Force hadn't screwed up, the 330 would have won fair and square. Given a second chance, Boeing turned it into a political battle and won.

 

[Pépé le Pilot]

And when Airbus plays by Boeings little trick book there's an outrage, ooooh Boeing can't compete fairly against Airbus blablabla. While promoting open market everywhere, the US is the most protectionist country I can think of... Do what I say but for the love of god don't do what I do !

 

[jynxyjoe]

And when Airbus plays by Boeings little trick book there's an outrage, ooooh Boeing can't compete fairly against Airbus blablabla. While promoting open market everywhere, the US is the most protectionist country I can think of... Do what I say but for the love of god don't do what I do !

Even the International courts in '05 agreed Boeing was getting some subsides, but no where near the amount that Airbus did. I don't have a link (so it's not true I'm sure) but Aviation Week and space pornography covered it and it was discussed at length nationally and internationally. Boeing, afterward, went with a two tiered approach. Approach one was continue fighting the subsides that Airbus received in courts and trying to weaken their R+D for future aircraft, or at the very least get some financial compensation. Approach two was being realistic, realizing even though Boeing was correct and the courts agreed with them that they'd never be able to get state subsidy genie back in the bottle, and pushing the development side onto foreign nations (Japan) who would cover a lot of costs. Essentially copying the Airbus subsidy model with another nation (since the USA wouldn't allow it).

Airbus bitched and bitched the subsides did nothing and their projects would have succeeded regardless. Boeing tried it out with another government and it worked miracles on their bottom line. Now Airbus is screaming it's unfair. I've been out of that side of the business for years now but that was how I took the decade long purse-fight between those two manufacturing behemoths (purse fight is a licensed trademark of @Boris Badenov).

 

[Pépé le Pilot]

You're a respected member of this forum, and always have liked your remarks, but I'm afraid that you are on your own on this one. See, Airbus Military is a tiny division of Airbus, unlike Boeing Military so there goes the subsidy argument. Furthermore let me remind you that several Boeing execs directly linked to the 330/767 bid have been sent to jail on corruption charges directly linked to that contract. But this goes directly along the line of oh no not again no us argument : do what I say, not what I do.

 

[JOEFRIDAY2]

UAL and DAL have both (or will both) benefited from Chapter 11 and wether you like it or not, it's somehow a state backing (our good friend Wikipedia explains that a chapter 11 is filed with the FEDERAL bankruptcy court to obtain protection etc. Notice the FEDERAL). This refusal to acknowledge that US airlines have, do or will receive help, protection from the federal government is so hypocrite it makes me want to eat my sidestick. The same way Boeing whines about Airbus being state funded it is just the same state funded through its military branch thanks to massive corruption to obtain contracts (see the scandalous 330 vs 767 case that landed Boeing execs in jail for corruption and yet that got the 767 selected). So please stop thinking that brave US companies are surrounded by a bunch of lazy and state funded airlines because it is wrong.

When an airline files Chapter 11, the US government does not inject money into that airline in any shape, form or fashion. A company, such as an airline, must have money available or lined up in order to have a plan of re-organization that will be satisfactory to the creditors. This is called debtor in possession (DIP) financing. The DIP financing usually comes from investors, equity funds or capital companies.

Debts are settled or discharged under the jurisdiction of the bankruptcy court. The creditors (which usually include employees) and insurance companies that guaranteed debts are the ones that lose money here. The original stockholders are often wiped out and their stock is usually worthless or worth a lot less.

The only thing the federal government has been on the hook for in recent airline bankruptcies (excluding AA) were the underfunded pension plans. In AA's case the federal government refused to take over the underfunded pension plans because they determined that American Airlines did have funds to cover the shortfall.

 

[A Life Aloft]

In regards to the tanker mess, Darleen Druyun who left the AF, (she had been the Principal Deputy Undersecretary of the Air Force) and was hired by Boeing in 2003. She was sentenced to 9 months in jail and fined in 2004 for corruption. CFO Michael Sears (he actually recruited Druyun and it's complicated because Druyun's daughter was working at Boeing at the time and introduced her mother to Sears) who was fired from Boeing, and Boeing CEO Phil Condit resigned in February 2005. Later that same month, Sears was sentenced to four months in prison and Boeing ended up paying a $615 million fine for their involvement.

 

[jynxyjoe]

You're a respected member of this forum, and always have liked your remarks, but I'm afraid that you are on your own on this one. See, Airbus Military is a tiny division of Airbus, unlike Boeing Military so there goes the subsidy argument. Furthermore let me remind you that several Boeing execs directly linked to the 330/767 bid have been sent to jail on corruption charges directly linked to that contract. But this goes directly along the line of oh no not again no us argument : do what I say, not what I do.

Trying to go in order.
The subsidy issue I was invoking was the A380 project, which I misunderstood and thought that was a part of the argument. That's my fault if it wasn't even a part of the discussion.

Well that was an issue with corruption from an Air Force officer, followed by a CEO who was brought in to "clean things up" and had to resign 3 months in because he was banging his secretary in his office during down time, followed by no CEO. Boeing had a huge cultural problem dating back to post WWII contract letting.

Bid number two came out with John McCain leading the charge, but it became clear that the second RFC was asking for exactly what the A330 was (cargo plus), which was a completely different mission, and Boeing pushed that McCain was pushing the Air Force to award the Airbus people a contract as a lesson to Boeing. Maybe not such a bad idea, but a lot of folks thought that action was taking it too far.

Let number 3 came out and it didn't favor the tanker plus cargo airplane, so why even bid?

I'd have to sit down and do some serious reading to get back into that one. I knew more about the commercial side anyway.

 

[jynxyjoe]

Trying to go in order.
Well that was an issue with corruption from an Air Force officer, followed by a CEO who was brought in to "clean things up" and had to resign 3 months in because he was banging his secretary in his office during down time, followed by no CEO. Boeing had a huge cultural problem dating back to post WWII contract letting.

For a factual and useful summary explaining the above please reference @A Life Aloft below.

In regards to the tanker mess, Darlene Dunhan who left the AF and went to Boeing in 2003. She was sentenced to 9 months in jail and fined in 2004 for corruption. CFO Michael Sears who was fired from Boeing, and Boeing CEO Phil Condit resigned in February 2005. Later that same month, Sears was sentenced to four months in prison and Boeing ended up paying a $615 million fine for their involvement.

Nicely done. Condit may have been banging another manager, I can't remember.

Also funny to note, for something like half a year Boeing was without a head of the holding company, two CEO's were left (one military side, one commercial) and their stock recovered some 30 or 35 dollars in value being without a figurehead.

 

[MikeD]

Trying to go in order.
The subsidy issue I was invoking was the A380 project, which I misunderstood and thought that was a part of the argument. That's my fault if it wasn't even a part of the discussion.

Well that was an issue with corruption from an Air Force officer, followed by a CEO who was brought in to "clean things up" and had to resign 3 months in because he was banging his secretary in his office during down time, followed by no CEO. Boeing had a huge cultural problem dating back to post WWII contract letting.

Bid number two came out with John McCain leading the charge, but it became clear that the second RFC was asking for exactly what the A330 was (cargo plus), which was a completely different mission, and Boeing pushed that McCain was pushing the Air Force to award the Airbus people a contract as a lesson to Boeing. Maybe not such a bad idea, but a lot of folks thought that action was taking it too far.

Let number 3 came out and it didn't favor the tanker plus cargo airplane, so why even bid?

I'd have to sit down and do some serious reading to get back into that one. I knew more about the commercial side anyway.

What I never understood was that Boeing knew the terms of Bid #2, and they knew the 767 didn't necessarily compare with the A330 in terms of matching the bid, yet they never offered up the 777 instead, which seems like it would've given the 330 a fair run for its money. Again, I know that Boeing was trying to keep the 767 line open at all costs, and this was the only way to, but that's quite a risk when you know from the outset that what you're offering on the table, doesn't match up with what the competitor is offering. It's not like the bid terms were any secret that Boeing wasn't aware of.

 

[Pépé le Pilot]

I don't really understand the difference between indirect state (well that would be Europe, because Airbus is not just French) funding for the A380, and corrupting state officials to maintain the 767 line opened and forcing some useless military contracts to help fund the SmokeLiner...
You should also know that Europe funding of private corporations (Airbus is a private company where for example France owns like 10%) is very strictly controlled...

 

[Pilot Fighter]

What I never understood was that Boeing knew the terms of Bid #2, and they knew the 767 didn't necessarily compare with the A330 in terms of matching the bid, yet they never offered up the 777 instead, which seems like it would've given the 330 a fair run for its money. Again, I know that Boeing was trying to keep the 767 line open at all costs, and this was the only way to, but that's quite a risk when you know from the outset that what you're offering on the table, doesn't match up with what the competitor is offering. It's not like the bid terms were any secret that Boeing wasn't aware of.

I recall that Boeing was making a big deal about aircraft already being in production with completed deliveries while Airbus was running into some problems that delayed deliveries. I don't think that Boeing thought they had credible competition, so why consider other airframes?

 

[jynxyjoe]

What I never understood was that Boeing knew the terms of Bid #2, and they knew the 767 didn't necessarily compare with the A330 in terms of matching the bid, yet they never offered up the 777 instead, which seems like it would've given the 330 a fair run for its money. Again, I know that Boeing was trying to keep the 767 line open at all costs, and this was the only way to, but that's quite a risk when you know from the outset that what you're offering on the table, doesn't match up with what the competitor is offering. It's not like the bid terms were any secret that Boeing wasn't aware of.

If you read the Boeing press releases (via AW&ST) they made it sound like the RFQ #2 didn't want the cargo part, but they awarded the contract to the tanker+cargo option. They demanded the bid be redone and the award be based on the RFQ, not John McCain and his political circus riding atop the committee that awards the DOD's budget. It's hard for me to say for sure, but it seems like the Air Force was being bullied by McCain to award the tanker to Airbus because Boeing was so so dirty in it's dealings. I think there's some merit to that argument. I'd love to see a GAO report on it if one was created finally.

I don't really understand the difference between indirect state (well that would be Europe, because Airbus is not just French) funding for the A380, and corrupting state officials to maintain the 767 line opened and forcing some useless military contracts to help fund the SmokeLiner...
You should also know that Europe funding of private corporations (Airbus is a private company where for example France owns like 10%) is very strictly controlled...

OH my man, if I could get my head around all that I'd be working as a lawyer. Essentially it revolves around state vs federal subsides to corporations. Because we have this government model, each historically with it's own responsibilities, it becomes impossible to translate it to the world model of government that appears to prevail in western democracies. We set things up so differently (on purpose) so long ago that it's very hard to understand logically.

I don't have a bone to pick with Airbus anymore, I did feel like the A380 monies were illegally awarded but I admit I'm comparing the 747 development with the A380 development and those are two different times with two very different set of international laws in place. I also felt/feel like that Boeing had to stop bitching and find away around the problem rather than trying to make the international courts do anything. Boeing loves the subsides now, and I think you'll see them farm that development out to whatever country will pay for it (China included).

 

[A Life Aloft]

This is also an interesting/ironic side read.

Top Air Force Official Dies in Apparent Suicide

By ERIC SCHMITT and GINGER THOMPSON

Published: October 15, 2007

WASHINGTON, Oct. 15 — The second-highest ranking member of the Air Force’s procurement office was found dead of an apparent suicide at his Virginia home Sunday, Air Force and police officials said today.

The official, Charles D. Riechers, 47, came under scrutiny by the Senate Armed Services Committee earlier this month after the Air Force arranged for him to be paid $13,400 a month by a private contractor, Commonwealth Research Institute, while he awaited review from the White House of his appointment as principal deputy assistant secretary for acquisition. He was appointed to the job in January.
The Washington Post reported on Oct. 1 that the contractor, Commonwealth Research, registered as a nonprofit organization in Johnstown, Pa., paid Mr. Riechers for two months as a senior technical adviser, though he did no work for the company.
“I really didn’t do anything for C.R.I.” Mr. Riechers told The Post. “I got a paycheck from them.”
The Air Force has disputed The Post’s portrayal of Mr. Riechers’s role and said in a statement today that he was “employed in a scientific and engineering technical assistance capacity to the Air Force and made recommendations that were instrumental in engineering our acquisition transformation and continuing the Air Force’s modernization of our aging fleet.”
Specifically, the Air Force said that Mr. Riechers, a retired Air Force officer and master navigator, provided technical advice on several programs including converting commercial aircraft to military using and modernizing the C-130 transport plane. Loren Thompson, an expert on the military at The Lexington Institute said it was unclear whether Mr. Riechers’s suicide had anything to do with the inquiry. However, he said that Mr. Riechers’s death would cast a further shadow over the Pentagon’s beleaguered procurement system.
Commonwealth Research and its parent company, Concurrent Technologies, have extensive contracts with the Pentagon, intelligence agencies and other Federal departments.
A year before Mr. Riechers’s appointment, the Air Force was mired in scandal. The Pentagon canceled a $23 billion deal to lease 767 tankers from Boeing after the disclosure that a former Air Force procurement officer, Darleen Druyun, was found to have favored Boeing in contracts before being hired by the company.
At a hearing by the Senate Armed Services Committee earlier this month, Senator Carl M. Levin of Michigan said far too many weapons acquisitions had been plagued by “cost increases, late deliveries to the war fighters and performance shortfalls.”
Senator Levin added that 25 of the Pentagon’s major defense acquisition programs had overruns of at least 50 percent. And he expressed concern about an “alarming lack of acquisition planning across the department.”
“The root cause of these and other problems in the defense acquisition system is our failure to maintain an acquisition work force with the resources and skills needed to manage the department’s acquisition system,” Mr. Levin said. “The Pentagon and Justice Department are currently conducting criminal investigations into some $6 billion in contracts to supply essential supplies to American troops in Afghanistan, Iraq and Kuwait.”
In May, Mr. Riechers told the Armed Forces Communications & Electronics Association’s Northern Virginia Chapter that restoring credibility to the Air Force was a priority for the Air Force. He said the Darleen Druyun scandal was an “aberration,” that was not representative of the Air Force’s acquisition system.
Mr. Reichers was a retired Air Force officer and master navigator specializing in electronic warfare, with 20 years of operational, acquisition and staff experience, according to the Air Force. He flew more than 1,900 flight hours, with 90 hours of combat and combat support time in B-52G and EC-130H aircraft.

 

[Pilot Fighter]

Air Force was being bullied by McCain to award the tanker to Airbus because Boeing was so so dirty in it's dealings. I think there's some merit to that argument. I'd love to see a GAO report on it if one was created finally.

Report was created and sealed.

 

[jynxyjoe]

Report was created and sealed.

le sigh.

 

[Pilot Fighter]

Back to Emirates for moment, am I being cynical for thinking that keeping books that show them struggling financially like everybody else helps them dodge criticism when they try to enter new markets? "Hey, fuel costs are killing us too, can we share a gate?"

 

[Pépé le Pilot]

Since they pretty much don't pay for anything other than fuel, I'm just rolling laughing. They have mega-orders, seems they can't have enough 380 but still loose money despite not paying taxes and fuel at what, $300/ton ? They must be doing something wrong, even we turn a profit with one of the highest cost of labour around and high fuel price...

 

[typhoonpilot]

Since they pretty much don't pay for anything other than fuel, I'm just rolling laughing. They have mega-orders, seems they can't have enough 380 but still loose money despite not paying taxes and fuel at what, $300/ton ? They must be doing something wrong, even we turn a profit with one of the highest cost of labour around and high fuel price...

Hmmm, "don't pay for anything other than fuel".

Let's look at that closely. Just from my experience they paid, in no particular order:

1) A pretty generous 6 figure salary
2) A 4 bedroom villa with garden and all utilities
3) A car to pick a pilot up and take him/her home from work
4) A retirement fund
5) Medical expenses
6) School tuition costs for those with kids

Multiply that by 3500 pilots

They would also pay:

1) Overflight charges
2) Landing fees
3) Crew overnight costs
4) Handling fees
5) Administrative costs

etc, etc, etc

Oh, and as to the fuel. Again, they pay market rates for fuel and tanker inbound to Dubai at times.


TP