In more bad news for Boeing and Airbus, international passenger traffic declined for the fifth straight month in January. Traffic was down 5.6 percent for the month, according to a research report by UBS Securities.
International traffic decline was led by Asia, which was down 8.4 percent, followed by North America with 6.2 percent and Europe, which was down 5.7 percent, UBS said.
International cargo traffic was down 23 percent in January, the eighth consecutive decline.
UBS Investment Research has downgraded shares of Spirit AeroSystems stock from Neutral to Sell.
Although Spirit’s stock prices are down significantly, “we believe (Spirit stock) is actually more expensive than it looks,” said UBS analyst David Strauss. Spirit is trading in line with similar companies that are its peers, yet it’s more at risk, the report said. That’s because Spirit is less diverse than its peer companies, it said. Spirit receives 90 percent of its revenues from Boeing “and is subject to execution risk on its development programs, mainly the Boeing 787.”
Spirit stock closed at $10.41 Thursday, down 48 cents. It’s 52-week range is $7.14 to $31.49.
More sad news at Cessna Aircraft.
Several hundred Cessna workers in Wichita are receiving 60-day layoff notices today. It’s a continuation of Cessna’s effort to cut 4,000 jobs in Wichita and 4,600 companywide as sales decline and order deferrals and cancellations increase.
Cessna spokesman Doug Oliver said he did not have specific numbers on the notices going out.
But others say the number will fall between 600 and 800.
Molly is out today. Here’s a story from the Associated Press:
Eclipse Aviation says it will not oppose a motion filed by senior noteholders in federal court to convert the Albuquerque aircraft manufacturer’s bankruptcy proceedings to Chapter 7, which would lead to liquidation of the company.
The senior secured noteholders filed the motion in U.S. District Court in Delaware on Tuesday after it became clear that Eclipse’s buyer, European-based EclipseJet Aviation International Inc., was unable to obtain financing, particularly from the Russian government.
Eclipse Aviation said in a news release today the company does not plan to contest the motion.
Albuquerque business bankruptcy attorney Bill Davis says given the circumstances of the motion filed, he believes it’s 99 percent certain the judge will order a Chapter 7 bankruptcy to proceed. Davis is not representing anyone in the case.
Negotiations between Boeing Wichita and its engineering union broke down today after Boeing refused to move on key issues, a union leader said.
A strike by the engineers is a “high possibility at this point in time,” said Bob Brewer, Midwest director of the Society of Professional Engineering Employees in Aerospace.
Members of SPEEA’s engineering union will revote on Boeing’s last offer next week. It is the same offer members rejected by 88 percent earlier this month. This time, however, members will vote on whether to authorize the union’s negotiating team to call a strike.
If they do, the team will decide whether to call a work stoppage, Brewer said. A date for the vote has not been set, Brewer said.
“I think there’s a lot of energy behind that,” he said. “I think the employees are tired of seeing the less-than-standard or deficient offer that they’ve been seeing.”
A federal mediator was called in to help with the talks, which resumed Monday after the contract’s rejection.
Boeing spokesman Jarrod Bartlett said the contract is one that rewards employees yet keeps the Wichita site competitive.
“We hope that employees will study and understand the provision of the best and final offer and vote to ratify,” Bartlett said. The company is prepared for a strike but is “focused on reaching an agreement.”
Boeing “communicated to SPEEA that our best and final offer was on the table, and that is our best and final offer,” Bartlett said.
SPEEA represents about 700 engineers in Wichita. Talks began in November, making them the longest negotiations in SPEEA history, the union said.
A strike would be a first in SPEEA’s history in Wichita. Boeing engineers and technical workers struck the company for the first time in the Seattle almost nine years ago.
Yingling Aviation has added a self-service refueling station for piston aircraft owners and operators using 100 low lead fuel.
Yingling is located at Wichita Mid-Continent Airport. The pump is on the south end of Yingling’s ramp adjacent to the airport fuel farm.
Customers will pay with a credit card and pump their own fuel. The service is available around-the-clock.
Saying it’s the longest negotiations of its history, the union representing Boeing Wichita engineers is planning a rally today.
Boeing and the Society of Professional Engineering Employees in Aerospace have been in talks since November. Earlier this month, members rejected the company’s offer of a contract. SPEEA represents about 700 engineers at Boeing in Wichita.
SPEEA said it may ask for federal mediation in the talks.
The rally will be held at 4 p.m. at the Marriott Courtyard hotel in Old Town.
Yesterday, I posted a copy of Hawker Beechcraft’s new ad promoting the use of business jets. A commenter wondered about Cessna’s new ad campaign. It’s a valid point. I didn’t post it because I wrote a story about it last week. But hey, you should see it, too.
Ken Razak — at 90 years old — continues to work enthusiastically on one of his passions — aircraft design. I recently visited Razak at his home office in East Wichita.
His enthusiasm remains robust for the aviation industry. He and his business partner, John Guernsey, have designed a unique, short-field aircraft designed for commercial missions. They’re calling the plane the Flow Control Model 10.
“We spent a lot of time studying what kind of an airplane it would be that would have a… lot of commercial merit,” he said. “We both have been working on the detailed design fo the airplane.”
Those who’ve been involved in the aviation industry for some time will remember Razak. He started the School of Engineering at Wichita University in 1943. He also designed and oversaw the construction of the Walter Beech Wind Tunnel.
It was there that Razak conducted tests, analysis and research taht remains important to the current aircraft design. The research was sponsored by the Office of Naval Research.
“When we build this prototype, we won’t have to do any wind tunnel testing,” Razak said. “It’s already done.”
The plane would be ideal for a variety of uses, Razak said. It would suit the package and product delivery industry, the commuter airline industry for short haul transportation, for a corporate aircraft, for countries with poorly-developed infrastructures and for the military, he said.
The design features a rear-opening door for the rapid loading of passengers and packages. One version would carry up to 12 passengers. Another version would carry up to 30 people.
The plane has a single propulsion engine with a separate engine for blowing air over the deflected flaps and control systems. It also can be used for heating and ventilation.
Another option of the Model 10 is what he terms a “gust alleviation system.” By blowing air over a deflected flap, the system relieves those bumpy gusts and makes for a smoother ride, he said.
Razak and Guernsey have shared in the cost of the plane’s design and analysis. Guernsey is a Federal Aviation Administration designated engineering representative who has certified airplanes for manufacturers.
The two are working on plans for a prototype. They’re looking for investors or a manufacturer to buy the design and intellectual property and build the prototype.
They’re also willing to take the plane to a certified prototype stage for an investor — the most difficult component of an airplane.
For $12 million, “we would build a flying and certficated prototype,” Razak said.
Investors would own the airplane and its certificate, he said.
“Our goal is to get this machine flying in a commercial environment,” he said.
Boeing Co. has lost its third order for 787s, bringing the total cancellations to 33.
The 787 Dreamliner — which is starting to be dubbed the 7-late-7 by some, is now almost two years behind schedule.
Hong King real estate developer Joseph Lau canceled his order for a private version of the airplane, according to a report by Bloomberg. A Boeing spokesman declined to comment on why Lau’s Sky Peace Ltd. decided not to buy the aircraft, which was ordered in May 2007. Lau is the chairman of Chinese Estate Holdings and is Hong Kong’s fifth wealthiest man, the report said.
Dubai-based leading company LCAL dropped plans to buy 16 Dreamliners earlier this month and Russian airline S7 Group canceled an order for 15 in January. Azerbaijan Airlines dropped an order last year.
Boeing now has orders for 878 Dreamliners.
