Royal Canadian Air Force (RCAF) News and Discussions

[pkcasimir]

With the recent orders coming in from the ME, I guess Boeing won't be too concerned with losing 18 SHs. Their intimidation of Bombardier really isn't about the C-Series and the 737 as the competition crossover is minimal, it is a warning shot not to go above the 160 seat threshold. I think they also realize that the F-35 progress is advancing to the point where the SH can't win the final fast jet competition later on. Even junior realizes this which is why the interim purchase was conceived as a face-saving measure.

I think you misinterpret Boeing's motives in the complaint against Bombardier. Boeing is not concerned about Bombardier building a larger seat jet but with Bombardier offering its CS300 series which is in direct competition with Boeing's new 737 MAX 7 series. The CS300 seats 130 people and the MAX 7 starts at 138 seats. If Boeing's allegations of government subsidies and dumping below cost are true, then Boeing has a lot to complain about and to be concerned about. The MAX 7 only received FAA certification earlier this year.
That aside, I think Canada's threat to cancel the SH deal in retaliation against Boeing's complaint, while being applauded by jingoists, is really quite absurd and the Canadian Press's attempt to make it look like the threat of canceling the deal has struck fear into Boeing's heart is equally absurd. Boeing's lifeblood is its commercial airliner business and the SH deal is Lilliputian in comparison. Of course, Boeing defense is making mollifying noises but Boeing senior management knows where its bread is buttered and that the SH deal is nothing compared to its 737 business. Boeing would not mind losing the SH deal if they were to win their complaint against Bombardier.

 

[BigM60]

I think you misinterpret Boeing's motives in the complaint against Bombardier. Boeing is not concerned about Bombardier building a larger seat jet but with Bombardier offering its CS300 series which is in direct competition with Boeing's new 737 MAX 7 series. The CS300 seats 130 people and the MAX 7 starts at 138 seats. If Boeing's allegations of government subsidies and dumping below cost are true, then Boeing has a lot to complain about and to be concerned about. The MAX 7 only received FAA certification earlier this year.
That aside, I think Canada's threat to cancel the SH deal in retaliation against Boeing's complaint, while being applauded by jingoists, is really quite absurd and the Canadian Press's attempt to make it look like the threat of canceling the deal has struck fear into Boeing's heart is equally absurd. Boeing's lifeblood is its commercial airliner business and the SH deal is Lilliputian in comparison. Of course, Boeing defense is making mollifying noises but Boeing senior management knows where its bread is buttered and that the SH deal is nothing compared to its 737 business. Boeing would not mind losing the SH deal if they were to win their complaint against Bombardier.

Agree. Boeing would have run this past their Defense Division before they launched the complaint but everyone in Boeing will be looking at the bigger picture. There is no bluff in what Boeing is doing, nor do they fear the loss of a potential modest Super Hornet order. Shareholders see the commercial products as the most valuable part of Boeing. Fighters are nice but it's not Boeing's future.

 

[John Fedup]

Boeing is trying to retain its marketshare in the low volume end but its market competition is from Brazil and Canada, two countries with weak currencies against the US. Soon, China will enter the 100-150 seat market and the long term outlook for the 737-7 MAX is not very promising. Boeing would be better off with a decent 757 replacement. The A320/A321 NEO combination is out performing Boeing's product by a wide margin.

The whole debate about aerospace subsidies is a big cluster. Everyone is doing it via tax breaks, questionable loans, R&D credits, etc. The biggest subsidy of all is the benefits aerospace derives from military developments, an area Bombardier really sucks at compared to all its rivals.

 

[BigM60]

Boeing is trying to retain its marketshare in the low volume end but its market competition is from Brazil and Canada, two countries with weak currencies against the US. Soon, China will enter the 100-150 seat market and the long term outlook for the 737-7 MAX is not very promising. Boeing would be better off with a decent 757 replacement. The A320/A321 NEO combination is out performing Boeing's product by a wide margin.

The whole debate about aerospace subsidies is a big cluster. Everyone is doing it via tax breaks, questionable loans, R&D credits, etc. The biggest subsidy of all is the benefits aerospace derives from military developments, an area Bombardier really sucks at compared to all its rivals.

With the defence review released in June - does this complicate what the govt. may have planned to have said about a Super Hornet purchase in the review? We are negotiating a deal but we are also threatening to pull out? Yes, Boeing is probably the last company that should complain about subsidies.

 

[John Fedup]

The review, according to Liberals, was completed a while back before this cancellation threat. Therefore the review likely still contains the 18 SHs. If they decide to review "the review", expect the report to be delayed as it will be done by many of the same people responsible for our stellar defence procurement!

 

[pkcasimir]

Boeing is trying to retain its marketshare in the low volume end but its market competition is from Brazil and Canada, two countries with weak currencies against the US. Soon, China will enter the 100-150 seat market and the long term outlook for the 737-7 MAX is not very promising. Boeing would be better off with a decent 757 replacement. The A320/A321 NEO combination is out performing Boeing's product by a wide margin.

The whole debate about aerospace subsidies is a big cluster. Everyone is doing it via tax breaks, questionable loans, R&D credits, etc. The biggest subsidy of all is the benefits aerospace derives from military developments, an area Bombardier really sucks at compared to all its rivals.

Interesting to see that you think you know more about the airliner business than Boeing Management. Boeing is trying to defend its low end narrow body market in North America and determined that its is not squeezed on two ends by Airbus and Bombardier. Bombardier's CSseries is highly dependent on the North American regional market where American airlines decide its future.Therefore, it makes perfect sense for Boeing to use US law to stop a potential rival undercutting its market, especially if Boeing's allegations about subsidies and dumping are true. Boeing is determined to stop any airplane manufacturer from becoming another Airbus. Boeing made a big mistake in not defending itself against a subsidized Airbus and is determined not to repeat this mistake. It will confront China in the same way.
The issue with the 757 replacement is a total canard and has nothing to do with this dispute. Narrow body airliners are cash cows and Boeing is determined to keep its cash cow. Its profit margin for each 737 MAX is somewhere between 15 and 20%.
Boeing made a calculated decision that its North American narrow body market share is vastly more important than its fighter. business and it is correct.

 

[John Fedup]

The C-Series is not much of a threat to the main 737 business, namely the 150 to 200+ seat versions. If Boeing wants a successful 130 seat 737, they should configure a longer tube 737 with bigger seats. Boeing is the last company that should be whining about subsidies.

Maybe the Canadian government should give Bombardier a couple of billion to develop a MPA based on the CS-300 as a replacement to our P-3s. Surely this is the type of subsidie Boeing can appreciate.

 

[Novascotiaboy]

On a completely different vein see the attached for what could have been, what should have been and lessons from our history of acquisition and infighting within the RCAF and government.

http://scholars.wlu.ca/cgi/viewcontent.cgi?article=2857&context=etd

Oh the possibilities of what things would look like today had we acquired C5A Galaxy transports and F4 Phantom fighters.

This was a very good read.

 

[KiwiRob]

The C-Series is not much of a threat to the main 737 business, namely the 150 to 200+ seat versions. If Boeing wants a successful 130 seat 737, they should configure a longer tube 737 with bigger seats. Boeing is the last company that should be whining about subsidies.

Maybe the Canadian government should give Bombardier a couple of billion to develop a MPA based on the CS-300 as a replacement to our P-3s. Surely this is the type of subsidie Boeing can appreciate.

The C-Series 100 & 300 aren't a threat to Boeing but the proposed 180 seat cs500 takes the fight directly to the 737, it will be a better aircraft, Boeing know this, the MAX program IMO was a waste of money, Boeing needed to start the 737 replacement program, the MAX is a bandaid.

 

[John Fedup]

The C-Series 100 & 300 aren't a threat to Boeing but the proposed 180 seat cs500 takes the fight directly to the 737, it will be a better aircraft, Boeing know this, the MAX program IMO was a waste of money, Boeing needed to start the 737 replacement program, the MAX is a bandaid.

Both Boeing and Airbus took the easy way out with engine upgrades and a few other improvements to address the C-Series threat which was basically something new and few efficiency. Both big players had major commitments to wide body aircraft at the time and didn't want to shift resources. The collapse of oil prices weakened the C-Series major feature, reduced fuel burn.

It would be interesting to see what the market response would be to a CS500 if it were available now. I do not believe Bombardier will produce it now, they simply don't have the resources. PW can't even provide geared turbines fast enough for the two smaller versions.

 

[John Fedup]

On a completely different vein see the attached for what could have been, what should have been and lessons from our history of acquisition and infighting within the RCAF and government.

http://scholars.wlu.ca/cgi/viewcontent.cgi?article=2857&context=etd

Oh the possibilities of what things would look like today had we acquired C5A Galaxy transports and F4 Phantom fighters.

This was a very good read.

Just started reading it, interesting piece. I was reminded that as bad as junior and his old man were, Pearson's defence minister Paul Hellyer was the worse thing to ever happen to DND and particularly to the RCAF. BTW, his striking off the F-4 from the bid list sounds familiar, doesn't it! Must be a Liberal thing.

 

[Novascotiaboy]

They say history repeats itself. The Phantom with Spey engines would have been a fantastic addition. The problem would have been had we bought them when proposed we would have been looking at a solution long before now for a replacement for the F4 likely around 1996 to 2006. And the likely winner would have been what? Too early for Rhino and F35. Sometimes procrastination has benefits.

Besides the F4 loss the missed opportunity for C141 and C5 would have provided a capability few western air forces could rival.

Using an open mind one can look at the past as described in this report and see that the rapid build up of the RCAF and its subsequent decline is a matter that continues today. From 138 F18 to 65 whatever replaces them. It's not realistic to think a single fleet of one type can cover the multitude of requirements that our air for requires. The report is clear on many occasions quantity has a value all its own.

For my tax dollars I believe we can do better. We dither on a subject for far too long. Buy something and get the ball rolling. We waste far more than $2 billion over twenty years on far less in this country. Eighteen Super Hornets will get used doing something. Hopefully the F35 has a place with a maple leaf at some time but it won't be under The liberals and it will cost us a lot more when we do. It's the Canadian way you know.

 

[John Fedup]

In hindsight, the US refusal to export F-22s was both understandable (protect the crown jewel) and unfortunate (too few built). A sale of 50 jets to Canada for the defence of North America only would have freed up extra USAF F-22s for overseas deployment if necessary. More importantly, the RCAF would have jets now and the F-35 debate would be moot. The sovereignists would have a hard time saying the F-22 wasn't the best jet to defend Canada and the peaceniks couldn't complain about them being in some foreign adventure. Such a sale may have delayed the production line closing allowing the USAF to buy a few more.

 

[KiwiRob]

Both Boeing and Airbus took the easy way out with engine upgrades and a few other improvements to address the C-Series threat which was basically something new and few efficiency. Both big players had major commitments to wide body aircraft at the time and didn't want to shift resources. The collapse of oil prices weakened the C-Series major feature, reduced fuel burn.

It would be interesting to see what the market response would be to a CS500 if it were available now. I do not believe Bombardier will produce it now, they simply don't have the resources. PW can't even provide geared turbines fast enough for the two smaller versions.

Airbus had a far better plane to start with, the simple fact that it has longer landing gear ment it was far easier for them to hang bigger diameter fans on, Airbus is waiting for Boeing to make the first move, as soon as Boeing announces a new narrowbody Airbus will follow. This is why Bombardier has to build the CS500, it's where they will really cash in, they would be the first western manufacturer with a modern narrow body in the prime seating capacity area of the market.

 

[John Fedup]

This is why Bombardier has to build the CS500, it's where they will really cash in, they would be the first western manufacturer with a modern narrow body in the prime seating capacity area of the market.

I agree a CS500 is where the money is and it should have been the first offering but the family management was too timid to enter the big two realm. Remember, Bombardier dithered in their decision to launch the CS100 and CS300. Had they decided on a CS500 back then, both Boeing and Airbus would have had a hard time responding with even a "neo" solution let alone a clean sheet design given the problems with the A380, A400M, and the Dreamliner as well as the future 777X and new 350. The CS500 was an opportunity to be a real player and I believe it is now too late barring a change in the preferred share arrangement which would allow a recapitalization of Bombardier.

 

[John Fedup]

The latest comment on the interim SH purchase from our defence minister is in the link below. Who would have thought that LM's main competitor might end up turning the tide in favour of the jet junior didn't want?

Sajjan says Boeing is not a trusted partner as Super Hornet dispute escalates | Ottawa Citizen

 

[MrConservative]

The latest comment on the interim SH purchase from our defence minister is in the link below. Who would have thought that LM's main competitor might end up turning the tide in favour of the jet junior didn't want?

Sajjan says Boeing is not a trusted partner as Super Hornet dispute escalates | Ottawa Citizen

John I am really trying to get my head around the $5-7B quote for eighteen Shornets in that article. To what level are the support, manual. spares and training etc and for how long is that for? TBH it is a couple of billion more than I thought it would be.

 

[John Fedup]

The 5-7 billion must be CDN so roughly that is 3.7 to 5 billion US. Like you, the numbers baffle me and DND is hardly a fountain of information. Even assuming a F-35 price for these interim SH of 100m US, that is still only 1.8 billion US so the spares and support cost appear to be around 2-3 billion on top of the 1.8 billion buy price. No idea as to what the spares and support consist of.

 

[vonnoobie]

It's based on the possible lifetime costs of them. Aircraft aquisition, spare parts, operations, maintenance etc

 

[John Fedup]

It's based on the possible lifetime costs of them. Aircraft aquisition, spare parts, operations, maintenance etc

Still, 2-3 billion for operations, spares, and maintenance seems pretty excessive for 18 jets that many think will be obsolete in 10-15 years, then again junior's idea of "interim" may mean using them for 20-30 years. After all, he won't be the one flying one of these jets into harms way 20 years from now.