13 April 2017

Airbus CEO says “he is not close to retirement”

Succession planning is proof that Airbus is a changed company

In a Reuters interview after the Airbus AGM yesterday CEO Tom Enders said he has no intention of retiring when his current term ends in 2019 and that “it is up to the board and shareholders to decide” if they want him to stay. Mr Enders’ comments yesterday are the first insight to what is likely to be fascinating succession planning at Airbus. It is interesting for two reasons; firstly the company’s history of the management team being chosen by the French and German governments and secondly what the future holds for Fabrice Bregier who currently runs Airbus Commercial Aircraft and has recently been appointed Chief Operating Officer of the newly integrated Airbus SE.

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18 January 2017

SFO shows its metal with £497m fine for Rolls-Royce

Black cloud over engine manufacturer should now start to lift

The Serious Fraud Office’s (SFO) five year investigation of Rolls-Royce has finally come to a conclusion, with a verdict that shows the SFO is getting tough on corruption, but one which should hopefully allow the dark cloud over Rolls-Royce to start lifting.

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12 January 2017

Airbus does it again

Record breaking 2016 for Airbus as it exceeds delivery target

At yesterday’s annual New Year press conference, Fabrice Bregier (Airbus Commercial CEO) triumphantly announced that Airbus delivered 688 aircraft last year, exceeding its target of 670. 

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14 December 2016

Airbus is cutting it fine

Record breaking December needed to meet guidance

I highlighted last month that Airbus had its work cut out to meet its 2016 delivery target of 670 aircraft, needing to deliver 154 in two months. Well the latest statistics show 61 aircraft were delivered in November, leaving 94 to be delivered in December. I previously said that “I am not generally predisposed to bet against Airbus when it comes to them achieving delivery targets” and I think I still feel the same as their track record is strong, but it feels as though the risk is increasing of Airbus not meeting FY16 guidance.

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Andy Chambers
6 December 2016

Who’s the daddy?

Airbus, Boeing, the WTO or the lawyers

As the latest round of chest beating by Boeing and Airbus dies away until the next round of appeals, I really start to wonder why the finger pointing and name calling persists. It seems to me that only one group of people are directly benefiting from the “discussion”, and I do not mean Joe public.

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Andy Chambers
1 November 2016

It pays to be civil in the long run

Backlog execution should enable improved investor returns

By the end of September, Boeing and Airbus had surpassed an aggregate of 1,000 aircraft deliveries as previously announced product introductions and rate increases continue to drive up demand across the aerospace supply chain. By the year end the two companies are expected to deliver an aggregate of around 1425 aircraft, slightly higher than in 2015.

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27 October 2016

Consolidation in the Cyber market

Who will benefit from the super nomal levels of forecast growth?

The global Cyber attack last Friday is the latest stark reminder of how the defence and security market is changing. Attacks do not have to be physical in order to cause harm. Cyber attacks have the potential to be fatal or economically disastrous in just the same way as conventional warfare. As President Obama said on Monday “One of the biggest challenges for the next President, and the President after that is going to be how do we continue to get all the benefits of cyberspace but protect our finances, protect our privacy”. In a world where growth is hard to come by, new forecasts see the Cyber Security market growing 12-15% year on year until 2021. But is it clear what the products of the future will look like? And can we discern which protagonists will win market share?

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18 October 2016

Innovation in the defence industry

Is it industry or the the MOD that is too old to innovate?

There is uproar in the upper echelons of the defence industry. Last month Tony Douglas, CEO of the government’s Defence Equipment and Support group (DE&S) reportedly berated senior defence industry executives for all being over forty-five, implying that they are too old to be innovative. Ironically, in my previous blog ‘Brave new world for defence industry’ I highlighted that it is the Government’s cost cutting that is jeopardising long term innovation. So is Mr Douglas’ criticism fair? 

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6 October 2016

Are airlines weathering the impact of Brexit and terrorism?

Passenger traffic growth analysis

In my 27 July blog ‘The Summer of Hate’ I espoused that summer 2016 could be a defining moment for the aerospace industry. I questioned whether the new wave of terrorism on mainland Europe would lower our propensity to travel by air and therefore encourage more people to holiday closer to home. The IATA passenger data is now in for July so what does it show?

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5 October 2016

Do tanks have a future?

A look at how armour is evolving

Last month the British Army caused traffic chaos in London by driving a replica First World War tank and a modern Challenger tank around Trafalgar Square. This impressive, yet slightly anti-social display was to commemorate one hundred years of tank service. Seeing these two goliaths of warfare side by side, it struck me that whilst major technological advances have been made over the past century, a modern tank still looks remarkably similar to its predecessor. It made me question whether tanks one hundred years on will still look so similar? Or whether in fact modern warfare no longer needs tanks? These are questions that are likely to be preoccupying the military vehicle manufacturers such as General Dynamics, BAE Systems and Nexter.

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17 September 2016

The debate about the A380 rages on

Singapore Airlines will not extend lease on first A380

The A380 programme has taken another blow with the news that Singapore Airlines (SIA) – the aircraft’s first buyer and currently its second largest customer - will not renew the lease for its first A380. My 19 July blog ‘The end of the road for the A380’ highlighted that the future of the aircraft looks uncertain, with one of the issues being the unknown shape of the market for second hand A380s. The end of this first lease marks a new chapter for the aircraft and so far the outlook does not look that positive. 

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13 September 2016

August deliveries at Airbus

Slow progress on A320neo

In my blog on 4 September I said I would be watching Airbus’ August delivery numbers with interest. Well they were released last week and despite Airbus CEO Fabrice Bregier saying that staff on the A320neo programme have been working overtime to catch up on deliveries, not much progress appears to have been made so far.

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8 September 2016

Safran and Zodiac - do opposites attract?

A look at two very different French Aerospace companies

Safran and Zodiac are both French, both exposed to the structural growth of the civil aerospace industry, and both have world class products. But it is there the similarities end. Over the past five years, Safran has proved itself to be a well-run company with strong project execution. Zodiac’s management and execution has been found sorely wanting as it struggles to keep pace with the production ramp ups at Airbus and Boeing. Last week saw Zodiac’s ninth profit warning in two years, but interestingly over the past couple of months there has been a resurgence in market rumours that Safran is potentially interested in acquiring the company. Why are the two companies such a different investment proposition, and do they really have a future together?

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4 September 2016

Busy summer at Airbus

Record breaking number of deliveries in August

In last week’s blog I highlighted that Boeing and Lockheed Martin had been busy over the traditionally quiet month of August. A recent Reuters interview with Airbus CEO Fabrice Bregier suggest that engineers in Toulouse have also been unusually industrious this summer. Airbus has not yet published official orders and deliveries data for August, but Bregier said “I can already tell you is that it will be the best month of August in Airbus’s history, in terms of the numbers of planes delivered”.

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31 August 2016

Boeing struggling to meet 2016 orders target

Is the 777 going the way of the A330?

Aviation Week last week published data that suggest Boeing will struggle to meet its widebody order target in 2016. It appears the American aircraft manufacture is suffering from the same phenomenon as its European rival Airbus where sales of the legacy A330 dropped sharply once the newer and more fuel efficient A330neo was an option. Boeing has only booked 8 orders for the classic 777 in 2016, due in part to the re-engined 777X which is due to enter service in December 2019. So what is happening and is this cause for concern?

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23 August 2016

What does the future hold for NATO?

Trump and Corbyn refuse to support Article 5

9/11 was the first time that NATO’s article five – an attack on one member state is an attack all – had been invoked. It sent a powerful message about the strength of the alliance. Every member of NATO, no matter how small, provided assistance to the United States during the campaign in Afghanistan.  Fifteen years on and the alliance is arguably in its weakest position since its formation in 1949. Politicians in six major member nations have questioned the point of NATO and only five of the twenty-eight states spent the guideline 2% of GDP on defence. Could this be ‘make or break’ for NATO? And if so what could this mean for the defence industry?

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16 August 2016

The rise of the activists

A look at the impact of activist investors on the Aerospace and Defence sector

Last week it emerged that the activist investor, Elliott Capital Advisors, now holds a 5% stake in Meggitt. This makes Meggitt the third European Aerospace & Defence company to have such an investor on its shareholder register and it led me to ponder what is driving these activists? Why the interest in Aerospace and Defence? And what are they trying to achieve?

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11 August 2016

Geared Turbofan engine too hot to handle?

Teething problems for Pratt & Whitney's new narrowbody engine

Pratt & Whitney’s struggles to deliver correctly functioning Geared Turbofan engines for Airbus A320neo aircraft is a reminder that aircraft development is always fraught with risks. Airbus clearly signposted in January that 2016 neo deliveries would be back loaded into the second half of the year. It is targeting 56 aircraft this year but as of the end of July has only delivered 11, so it has its work cut out in Toulouse. Where has it gone wrong?

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Andy Chambers
4 August 2016

Have you heard of GKN?

Making things work for more than a quarter of a millennium

Watching a BBC documentary of a behind the scenes look at the opening ceremony of the 2012 Olympic games reminded me of how the industrial revolution was a centre piece of the performance, creating the illusion of the Olympic rings being forged from steel. Had it happened back in the latter part of the 18th century as new processes changed Britain for ever, those rings may well have been forged in iron by one of the UK’s greatest global brands. GKN’s forebears have been making things happen for over 250 years and the company Guest, Keen & Nettlefolds was formed via merger in 1902. The company is one of our leading global manufacturers, and yet it is hardly a household name.

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27 July 2016

The summer of hate

The impact of terrorism on the Aerospace & Defence sector

An article in the press today described the summer of 2016 as the “summer of hate”.  The relentless pace of the attacks has invoked terror into the minds of ordinary people and politicians have been forced to make frequent declarations of their determination to protect their citizens.  It therefore seems logical to me that the summer of 2016 will be one which shapes the near term future for Aerospace and Defence companies.

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19 July 2016

The end of the road for the A380?

A look at why the business case for the A380 has gone wrong

Airbus launched the A3XX aircraft (which would become the A380) in 1997 based on winning 650 orders over the next twenty years. It claimed to be in consultation with 20 leading airlines about their requirements for a new double-decker aircraft. Nineteen years on, the A380 has won just 319 orders from 18 airlines. So where has it all gone so wrong for what is Airbus’ flagship aircraft? In addition, with the announcement last week at the Farnborough Air Show that the production rate has been cut to twelve per year, what does the future hold for the programme?

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Andy Chambers
15 July 2016

The rain fell mainly on the planes

Farnborough Airshow 2016 rant, sorry round up

When considering my view on the Farnborough International Airshow 2016 it is tempting to focus on the chaos of the first couple of days at the show. Monday’s washout was spectacular, and when we were eventually cleared from the site at around 5.30pm there was hardly anybody left. Even the ice cream van had gone home!

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15 July 2016

Full speed ahead for Successor

UK's nuclear deterrent looks assured with May as PM

On Wednesday evening, Theresa May was asked to write her orders for how the military should react in the event of nuclear war. Not exactly the easiest first few hours in a new job and probably cause for a sleepless night. However, the executives at the top of the UK defence industry will probably have slept a little more soundly as the future of Trident finally looks secure under her leadership.

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