Donald Trump has announced he wants to cut government costs by cancelling the order for new planes to carry the American president.
Six weeks ahead of taking office, the president-elect tweeted: “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!”
The government has a contract with Boeing to build two or more new planes.
They would enter service around 2024.
Boeing shares fell more than 1% after Donald Trump’s tweet, but recovered most of their losses in afternoon trading.
Donald Trump would not fly on the new planes unless he won a second term in the 2020 election.
He also announced on December 6 that Japan’s SoftBank has agreed to invest $50 billion in the US aimed at creating 50,000 new jobs.
Image source Wikimedia
Donald Trump revealed the plan after meeting with SoftBank CEO Masayoshi Son at Trump Tower.
The president-elect tweeted: “Masa said he would never do this had we (Trump) not won the election!”
Donald Trump now uses his own plane, but as president he would travel aboard Air Force One, which is equipped with special safety, defensive and communications equipment.
The real estate mogul is known for his admiration of his Trump-branded Boeing 757 jet, boasting to Rolling Stone in 2015 that his aircraft was “bigger than Air Force One, which is a step down from this in every way”.
“Did you know it was featured on the Discovery Channel as the world’s most luxurious jetliner?” Donald Trump said at the time.
He told reporters on December 6 at Trump Tower in New York that Boeing was “doing a little bit of a number” and the cost was “ridiculous”.
“We want Boeing to make a lot of money, but not that much money,” Donald Trump added.
The US Air Force released a statement saying it had budgeted $2.7 billion for the project, “but expects this number to change as the program matures with the completion of the risk reduction activities”.
The White House said it was not clear where Donald Trump got the $4 billion figure he cited to replace the Air Force One plane.
Spokesman Josh Earnest said: “Some of the statistics that have been cited, shall we say, don’t appear to reflect the nature of the financial arrangement between Boeing and the Department of Defense.”
The Government Accountability Office estimates that the project’s overall cost will be $3.2 billion, a figure that is expected to rise.
Boeing spokesman Todd Blecher, in a statement, said: “We are currently under contract for $170m to help determine the capabilities of these complex military aircraft that serve the unique requirements of the president of the United States.
“We look forward to working with the US Air Force on subsequent phases of the programme, allowing us to deliver the best planes for the president at the best value for the American taxpayer.”
Boeing, the world’s largest maker of passenger jets, has reported a 25% rise in its quarterly profit, helped by an increase in deliveries of commercial aircraft.
The aircraft maker earned $1.70 billion for Q3 of 2015, up from $1.36 billion a year ago.
Revenue rose by about 9% to $25.85 billion, with commercial aircraft deliveries up 7% to 199.
Boeing also raised its 2015 sales and profits guidance.
Revenue will be $95-97 billion, up from the prior estimate of $94.5-96.5 billion. Operating cashflow, Boeing’s preferred performance measure, may be $9.5 billion for the year, up from the $9 billion the company estimated earlier in the year.
Photo AP
Boeing’s shares rose 2.8% to $142.82 in pre-market trading.
The company said deliveries had surged on its backlog of orders. Boeing delivered 126 of its narrow-body, short-haul 737 aircraft in the period, up from 120 a year ago. It made more 737 planes than all other commercial models combined.
Boeing’s commercial backlog stands at $426 billion, while it has $46.2 billion of defense, space and security orders to fulfill.
“By continuing to profitably deliver on our large and diverse backlog, we are driving strong growth in revenue, earnings and cash flow,” said president and CEO Dennis Muilenburg.
“Solid operating performance across our commercial and defense businesses during the quarter also supported our continued investment in innovation and our people, and our commitment to return cash to shareholders.”
Delta Air Lines will replace its old Boeing planes with 50 Airbus wide-body jets powered by Rolls Royce engines.
The order, worth $14 billion, confirmed by Delta on November 20, is a victory for the European plane maker over its US rival’s Dreamliner 787.
It includes 25 Airbus A350-900 and 25 advanced Airbus A330-900neo aircraft.
Rolls Royce will provide Trent engines for both types of aircraft and long term servicing in a deal worth $5 billion.
The order is welcome news to Rolls Royce which has seen its share price fall by around a quarter since the beginning of the year following cut backs in military spending.
The company issued a profit warning in October and earlier this month announced 2,600 job losses as development work on two of its latest engines, the Trent 1000 and XWB, came to an end.
Airbus is reported to have won the contract after promising to deliver its latest A330neo in 2019, ahead of Boeing’s 787 Dreamliner.
The Dreamliner has been beset with problems, suffering several delays before its 2011 introduction and then being grounded due to battery fires last year.
However, by October 2014 Boeing said more than 1,000 Dreamliners had been ordered by 60 customers around the world.
The Delta deal is significant for Airbus and Rolls Royce because they hope other American legacy carriers will follow its example as they upgrade their ageing fuel-hungry fleets.
John Leahy, Airbus’ Chief Operating Officer said: “When the most successful US airline today … says <<yes we want 50 more of your wide body planes>>, you can’t debate the fact that it is a massive endorsement of your product line.”
The A350s will be delivered in Q2 2017 and will fly routes between the US and Asia. They are expected to give a 20% improvement in operating cost per seat over Delta’s existing aircraft.
The A330neos will fly medium-haul trans-Atlantic routes as well as some routes between the American west coast and Asia.
The Federal Aviation Administration (FAA) has ordered airlines to replace or modify the cockpit display units fitted to hundreds of Boeing jets.
The US air safety regulator said that tests had indicated that mobile phone and computer signals could cause the screens to go blank.
The affected planes are typically fitted with several screens, each of which costs thousands of pounds.
Honeywell – the displays’ manufacturer – has stressed that the problem has not been experienced in-flight.
“The only known occurrence was during a developmental test conducted on the ground,” said spokesman Steve Brecken.
“We worked with Boeing and addressed any concerns in 2012 with new display hardware.”
Boeing had previously issued an alert in November 2012 after an aero plane operator and Wi-Fi vendor noticed interference caused by the installation of an in-flight internet system.
The “phase 3” display units were found to be susceptible to the same radio frequencies used to transmit data via Wi-Fi.
The FAA has ordered airlines to replace or modify the cockpit display units fitted to hundreds of Boeing jets
In addition, the FAA said it was concerned that the screens could be disrupted by mobile satellite communications, cellular signals from phones, and air surveillance and weather radar.
The watchdog noted that the displays were required to provide pilots with information about airspeed, altitude, heading and pitch and roll, and added that the fault could cause a crash.
“We are issuing this AD [airworthiness directive] to prevent loss of flight-critical information displayed to the flight crew during a critical phase of flight, such as an approach or take-off, which could result in loss of airplane control at an altitude insufficient for recovery, or controlled flight into terrain,” it said.
Planemaker Boeing said that it had recommended that carriers implement the changes back in 2012.
However, the FAA said that it had estimated that a total of 1,326 Boeing 737 and 777 jets still needed to make the change.
It estimated that the replacement program would cost about $13.8m (£8.5m) to implement.
The agency noted that Virgin Australia, Air France, Ryanair and Honeywell were among those that had opposed the new rules on the grounds that they did not believe either current in-flight Wi-Fi systems or passengers’ electronic devices emitted signals at a strong enough level to affect equipment on the flight deck.
The FAA said Ryanair had complained that the demands imposed “a high, and unnecessary, financial burden on operators”.
Honeywell had suggested that airlines should be forced to install new screens only if Wi-Fi enabled tablets or other such equipment were used in the cockpit.
However, the FAA rejected these complaints saying it wanted to “eliminate” any risk of interference.
“We do not agree that no problems have occurred on in-service airplanes, since the Wi-Fi… testing that disclosed this susceptibility was conducted on an in-service airplane fitted with phase 3 display units,” it added.
The FAA has given the companies involved five years to swap or modify the components.
Boeing has reported high profits from April to June 2014 boosted by “strong” commercial aircraft sales.
Boeing’s net profits rose 52% to $1.65 billion from the same period last year.
During a quarter which saw the company deliver its first Dreamliner 787-9 aircraft, Boeing’s earnings from commercial aircraft operations helped to offset a fall in defense profits.
Separately, Delta Air Lines reported a 17% rise in profits thanks in part to higher fares.
Earnings from Boeing’s defense, space and security business fell 25% to $582 million, but profits from commercial aircraft rose 7% to around $1.6 billion.
Boeing boosted its full-year earnings forecast to between $7.90 and $8.10 per share, up from its previous forecast of $7.15 to $7.35 per share.
“Overall, our strong first-half financial performance, sustained focus on growth and productivity, and positive market outlook support our increased earnings guidance for the year,” said Boeing CEO Jim McNerney.
Boeing’s earnings from commercial aircraft operations helped to offset a fall in defense profits
Boeing expects higher full-year profits in part due to second-quarter tax settlements totaling $408 million.
The company said commercial aircraft deliveries rose 7% to 181 in the three month period. The total included 30 Dreamliner jets.
Boeing grounded a number of aircraft last year, including the Dreamliner fleet, following two incidents where batteries caught fire.
The aircraft maker said it had a total order book worth $440 billion, with more than 5,200 orders for commercial aeroplanes.
“With 783 new commercial airplane orders to date this year and significant contracts in the quarter for military aircraft and satellites, our backlog remains large and diverse,” Jim McNerney said.
Meanwhile, US carrier Delta Air Lines announced second quarter earnings rose 17%, to $801 million from a year ago.
Passengers flew more miles, at higher average fares, and fuel spending declined, the company said. Delta’s average fuel price was $2.93 per gallon in the quarter. The company owns its own refinery in Philadelphia.
The results from Delta come before American and United post second quarter figures on Thursday. Analysts expect the biggest US carriers to report large profits.
Chinese businessman Su Bin has been charged by US authorities with hacking into the computer systems of Boeing and other companies with large defense contracts.
Su Bin, who was arrested in Canada last month, is accused of working with two other suspects to steal data about military projects and sell it to China.
Prosecutors said Su Bin was targeting information about fighter jets, military cargo aircraft and weapons.
A 2013 US report identified industrial spying from China as a growing threat.
Chinese businessman Su Bin has been charged by US authorities with hacking into the computer systems of Boeing and other US companies
There has been no specific allegation of involvement by the Chinese government in Su Bin’s case, but the US has accused China of systematically stealing American high-tech data for its national gain.
The US Department of Justice recently indicted five Chinese military officers for hacking into US businesses – charges dismissed by China as a fabrication.
Su Bin reportedly runs a Chinese aviation technology company with an office in Canada.
He was detained on June 28 while trying to gain Canadian citizenship, US authorities said.
They allege that Su Bin and his co-conspirators have been trying to sell the stolen data to state-owned firms in China.
The justice department said it “remained deeply concerned about cyber-enabled theft of sensitive information”.
“We have repeatedly made it clear that the United States will continue using all the tools our government possesses to strengthen cyber-security and confront cyber-crime,” spokesman Marc Raimondi said.
Boeing released a statement saying it was co-operating with the US authorities to hold accountable “individuals who perpetrate economic espionage or trade secret theft against US companies”.
Su Bin is scheduled to appear in court for a bail hearing next week.
Boeing has received permission from the US Treasury to export certain spare commercial parts to Iran, a company spokesman says.
Boeing has had no public dealings with Tehran since 1979.
In a statement, the plane maker said the license had been granted for the safety of flight.
Iran Air is still flying passenger planes bought before the 1979 hostage crisis
The step is being seen as part of a temporary agreement to ease sanctions on Tehran that US Secretary of State John Kerry reached with Iran last year.
Under the deal brokered in November, Iran agreed to curtail its nuclear activities for six months in exchange for sanctions relief from nations including Britain, China and the US.
General Electric said late on Friday it had received US permission to overhaul 18 engines sold to Iran in the late 1970s. That work would be carried out at GE facilities or at German firm MTU Aero Engines, it said.
Iran Air is still flying passenger planes bought before the 1979 hostage crisis, during which 52 Americans were held hostage in Tehran for 444 days.
Iran has reportedly argued that sanctions imposed after the hostage ordeal have prevented Tehran from upgrading its plane fleet and reduced the safety of its aircraft.
There have been more than 200 accidents involving Iranian planes in the past 25 years, leading to more than 2,000 deaths, reports say.
Boeing has said the license covers only components required to ensure ongoing safe flight operations of planes it sold before Iran’s revolution in 1979.
No discussions are to be allowed over the sale of new aircraft when and if sanctions are completely lifted, correspondents say. If a permanent deal is agreed, it is thought likely that Iran would require the purchase of hundreds of new aircraft.
General Electric has confirmed that it has placed an order for 40 Boeing planes worth $4 billion at list prices.
The order includes 20 737 MAX 8 planes and 20 next-generation 737-800 jets.
The order was booked last year, but so far had been attributed to an “unidentified customer” by Boeing.
GE Capital Aviation Services (GECAS) said the new planes would help it meet growing demand for more fuel-efficient aircraft from its customers.
“Our airline customers require more fuel-efficient aircraft to compete in the marketplace,” Norman CT Liu, chief executive of GECAS, said in a statement.
General Electric has confirmed that it has placed an order for 40 Boeing planes worth $4 billion at list prices
GECAS has now placed total orders for 95 units of 737 MAX 8 airplanes and 387 of the next-generation 737-800 jets making it the biggest buyer of the two models in the leasing industry.
A slowdown in global travel demand, coupled with high fuel prices, has hurt the profitability of many airlines across the globe in recent years.
As a result, airlines have been looking to keep their costs in check to try and sustain their profitability.
That has in turn caused a rise in demand for fuel-efficient aircraft.
The 100-200 seat narrow-body – or single-aisle – aircraft market is forecast to generate $20 trillion over the next 20 years.
The sector is currently dominated by Airbus’s A320 and Boeing’s 737 aircraft, but other firms are also looking to tap into the market.
Boeing has claimed that its next-generation 737’s offer the “lowest operating costs in its class”.
Airbus has announced its first deal with Japanese carrier Japan Airlines (JAL).
The aircraft manufacturing giant has won an order from JAL for 31 of its A350 planes, in a deal worth nearly $9.5 billion at list prices.
The A350 is designed to be more fuel-efficient and is a direct competitor to rival Boeing’s 787 Dreamliner, which has been hit by safety and technical issues in recent months.
The deal is a blow for Boeing, which has dominated Japan’s aviation market.
“This is Airbus’ largest order for the A350 so far this year and is the largest ever order we have received from a Japanese airline,” said Fabrice Bregier, chief executive of Airbus.
“I must say that achieving this breakthrough order and entering a traditional competitor market was one of my personal goals.”
Airbus has won an order from JAL for 31 of its A350 planes, in a deal worth nearly $9.5 billion at list prices
According to the deal, JAL also has an option to purchase an additional 25 planes.
In recent years, the aviation industry has been hurt by a slowdown in demand and high volatility in global fuel prices.
That has seen many leading carriers turn to more fuel-efficient aircraft in an attempt to cut down costs and maintain profitability.
Both Airbus and Boeing have seen a surge in demand for such planes.
Airbus, which says the A350 will use about 25% less fuel than previous generation wide-bodied aircraft, has had 725 orders for the plane prior to securing the JAL deal.
The company hopes to start delivering the first A350s to customers by the end of 2014.
Yoshiharu Ueki, president of Japan Airlines, said the new planes would offer “high level of operational efficiency and product competitiveness” and help the airline to cater to “new business opportunities after slots at airports in Tokyo are increased”.
Meanwhile, Boeing’s 787 Dreamliner continues to remain popular despite this year’s temporary worldwide grounding of the aircraft while safety regulators investigated the cause of fires. Boeing has received orders for more than 950 Dreamliner jets so far.
Japanese carriers, JAL and All Nippon Airways (ANA), are two of the biggest operators of the Dreamliner jets.
Boeing has decided to suspend deliveries of its new 787 Dreamliner jet until a battery problem is resolved.
Boeing said it would continue to build the plane, but not deliver any until US safety officials gave their backing.
The Federal Aviation Administration has joined the Dreamliner investigation.
All 50 of Boeing’s 787 Dreamliners have been suspended from flying since an All Nippon Airways flight on Wednesday made an emergency landing due to a fault.
“We will not deliver 787s until the FAA [Federal Aviation Administration] approves a means of compliance with their recent Airworthiness Directive concerning batteries and the approved approach has been implemented,” said a Boeing spokesman in an email.
US Transportation Secretary Ray LaHood said earlier the Dreamliner would not fly again under authorities were “1,000% sure” it is safe.
Boeing has decided to suspend deliveries of its new 787 Dreamliner jet until a battery problem is resolved
A string of issues in recent weeks has raised questions about the 787, which is the first major aircraft grounding since 1979.
Dreamliners have suffered incidents including fuel leaks, a cracked cockpit window, brake problems and an electrical fire. However, it is the battery problems that have caused the most concern.
This week, US and European aviation regulators said planes should be grounded while safety checks are carried out on their lithium ion batteries.
On Friday, US officials from the Federal Aviation Administration and the National Transportation Safety Board joined the Japanese probe at Takamatsu airport in western Japan.
The Japan Transport Safety Board said the battery and the systems around it would be sent to Tokyo for more checks, adding there were similarities with an earlier battery fire on a 787 in Boston operated by Japan Airlines.
The pilot of the ANA plane made an emergency landing on Wednesday after he smelled burning and received a cockpit warning of battery problems. All passengers evacuated the plane on emergency slides.
The investigation is being led by the Japan Transport Safety Board.
Boeing is investing heavily in the 787 Dreamliner, and needs to sell 1,100 over the next decade to break even. It has stood by the integrity of the Dreamliner, which has been in service since October 2011.
Boeing and European rival Airbus dominate the global airliner market.
Giant planemaker Boeing used an unusual substitute for passengers to test its in-flight wi-fi system – potatoes.
Passenger seats on a decommissioned plane were loaded with huge sacks of the tubers for several days as signal strengths were checked.
Boeing’s researchers say that potatoes “interact” with electronic signals in a similar way to humans.
The technique also took advantage of the fact that spuds – unlike humans – never get bored.
Boeing’s engineers did a number of tests to ensure that passengers would get the strongest possible wi-fi signal while in the air, all while meeting safety standards that protect against interference with an aircraft’s electrical systems.
Wireless signals fluctuate randomly in the enclosed space of an aeroplane cabin as people move about.
This means that signal distribution is uneven throughout the cabin, with weaker and stronger connectivity in different seats.
Boeing used potatoes as substitute for passengers to test its in-flight Wi-Fi system
“You want your laptop to work anywhere it’s located on your seat, [but] there can be significant signal changes just due to the location of the laptop,” said Boeing engineer Dennis Lewis.
To test the signal distribution, the firm turned to spuds instead of human test subjects, filling the seats with 20,000 lbs (9,000 kg) of potatoes in sacks.
According to Boeing, potatoes’ “interactions” with electronic signals mimic those of a human body, making them “the perfect stand-in for people who would otherwise have had to sit motionless for days while the data was gathered”.
The UK Potato Council said many people underestimated the humble potato’s alternative uses.
“[The examples are] in paper and ink manufacturing, potato starch is used in clothing to strengthen the fibres so they don’t break during weaving, and for sweetening – glucose can be extracted from potato starch,” said the council’s spokeswoman.
“For beauty and sores – potatoes have calming, decongestant and astringent properties and raw potatoes can calm tired eyes, potato as alcohol, and potatoes can produce electricity.”
Frederic Rosseneu of the European Potato Trade Association Europatat said the organization was “looking forward to other experiments in which spuds can help to make our lives more convenient”.
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