EU Referendum

European governments have been interfering with commercial decisions in Airbus, shock!

Louis Gallois, chief executive, watching the company go down the pan and unable to make decisions in its best long term-interests, is now complaining about it. Even bigger shock!

That is the thrust of a Financial Times interview with Gallois, and all of a sudden the issue becomes very boring in its predictability.

The chief executive has attacked European governments "for haggling over the spoils at the struggling aircraft maker" without having regard to its long-term fate. He tells the newspaper: "I was very surprised to see that every government, the British, the French, the Germans and the Spanish were all saying we want the best share of the cake, we want composites and high technology and so on."

He then declares, "My job was to save Airbus and give a future to Airbus … I saw a lot of people wanting the best share of the cake and the size of the cake was not important to them. I said it was most important that in 20 years we still have an Airbus."

The way the company is going, he will be very lucky indeed – although Gallois will have moved on much earlier, if he has any sense. Already, the writing is on the wall, with the last remaining customer for the A380 freighter, UPS, calling for its order to be postponed and then, finally, according to Reuters and others, cancelling it completely, joining rival FedEx which cancelled an identical order last year.

What now transpires is that the cancellation was unexpected. UPS did agree to a delay in taking deliveries of its 10 aircraft beyond 2010, but then EADS and Airbus confirmed a news leak that Airbus would temporarily stop work on the cargo version. UPS responded with a statement saying it had lost confidence that Airbus could fill its orders in a timely manner, and decided to walk away.

Nevertheless, Airbus is exuding confidence that it can start delivering the passenger version of the A380 in October, and it will probably make that happen by dint of pouring resources into making it happen – should the unions co-operate, and not go on strike.

Even now, the company is talking about even more outsourcing, contracting and then moving work to low-cost countries, plus the prospect of enforced redundancies, something it has avoided talking about before now.

Despite all this, though, the company is asserting that there will be no delays to deliveries of the A400M military airlifter. But this is from a company that denied that there would be any delays to the A380 – and look where we are now.

The sad thing is that the world actually needs Airbus. Even the most rabid Atlanticist will recognise that handing a near monopoly of civil aircraft building to Boeing is good for no one. Competition on a world scale is very necessary for suppliers of what is a global industry.

It says something, therefore, that the company and the European governments that effectively control Airbus, through their loans to meet start up costs of each model, have made such a mess of what once looked like a successful business.

But then, European governments messing up a joint enterprise… Definitely dog bites man.

UPDATE

Spiegel Online has an interesting commentary. It cites the "left-leaning daily" Berliner Zeitung, saying: "The case of the wobbly company Airbus shows just how widespread economic nationalism is. More than that, though, Airbus says a lot about Europe itself - about how the European Union functions and about where the limits to cooperation are ..."

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Labels: Airbus

As expected, Airbus Chief Executive Louis Gallois yesterday announced his much delayed "Power8" plans to restructure his ailing company, shedding 10,000 jobs in the process. The jobs comprise 5,000 directly employed staff and 5,000 workers contracted from other firms and redundancies will be phased over the next four years. Additionally, Airbus intends to sell all or part of six factories.

Most of all though, Gallois railed against the "nationalist infighting" that had dogged the company from its inception, a "poison" that threatened to destroy it. "We need to be interested in the future of Airbus and for that we need to be one integrated company," he said

Despite the unions having been fully involved, and a careful spread of the job cuts to ensure equity between plants (to the detriment of the overall restructuring), there were still protests at Airbus factories in France at Meaulte and St. Nazaire. Jean-Francois Knepper, chairman of the European works council warned that there would be strike calls. But, he said, "perhaps a strike is not enough,"

Britain is to lose 1500 jobs, but the plant in Filton, near Bristol, is being given extra work, making carbon fibre composites for the wing of the A350. Other deals include setting up the main plant in Toulouse, France, for sole assembly of the A350 while the Hamburg plant will build the smaller A320.

These, however, are only the headline issues. Gallois is also committed to slashing operating costs, targeting reductions of € 2.1 billion from 2010 onwards and additional € 5 billion of cumulative cash flow from 2007 to 2010. Although much of this will come from reducing the headcount, operational efficiencies are also needed.

Therein lie some of the risks, as Airbus is considered by some commentators to be light on engineering and development skills, and is hard pressed to manage the A380 remedial work, the A350 redesign and the ongoing development for the military airlifter, the A400M.

Some of the slack will be made up by outsourcing some of the structural development and manufacture to risk-sharing partners, which will roughly double, while "lean manufacturing" is planned in the remaining plants, bringing expected productivity increase of 16 percent by 2010.

Yet, despite Gallois wanting to leave national infighting behind, he has been forced to maintain inflexible national work-share arrangements, which suggests that he has not yet got a complete grip on the company with is dominated by Franco-German politics, so much so that both Merkel and Chirac had to be consulted over the job cuts

The proof of the effectiveness of the changes, however, will be in whether the company can claw back some of the business it is losing to Boeing, and make up time on some of its projects. Little can be expected of the A380 but, in the wings, serious decisions are awaited as to the fate of the A400M, which looks like coming in late, overweight and short on range and payload.

Far from being out of the woods, therefore, Airbus may be heading for even more stormy waters, with its troubles only just starting.

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Labels: Airbus

The Canadian government has announced that it is to buy four C-17 military transports from the Boeing Co. This follows the interim notice given to the company in July and the rejection in August of a plea by Airbus for its A400M to be considered.

Rather predictably, Airbus Military senior vice-president Richard Thompson is a seriously unhappy bunny. He had dismissed the C-17 and the C-130J – which the Canadian are also to buy - as obsolete "Cold War" designs, while pitching Airbus Military's A400M as a "21st Century aircraft" with better versatility, performance, crew protection and aircraft survivability.

Despite that, the Canadians were distinctly unimpressed and – rightly as it turned out – cast doubts on the ability of Airbus to deliver by 2010, when the aircraft are needed. But, to ensure the decision went the right way, the military also made some adjustments. Originally specifying a requirement for a lift of 19.5 metric tons, planners increased this to 39 metric tons.

By some strange coincidence, the maximum payload of the A400M is 37 metric tons.

In recognition of this heroic decision, we have made the C-17 our Sunday "toy". The photograph shows a C-17 Globemaster III aircraft, taken as preparations are made to offload wounded personnel from Balad Air Base, Iraq, at "an undisclosed location in Southwest Asia". This is an official USAF photo taken on 17 January 2007. The photo credit goes to Staff Sgt. Edward D. Holzapfel.

As before, click on the photo to enlarge.

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Labels: A400M, Airbus, C-17

Airbus chief executive Christian Streiff was warning in October that there might be delays, and there were strong hints in December.

Now it's official. Airbus, in the form of its executive vice president, Tom Williams, has formally warned customers of a "potential" three-month delay on its 20 billion euro ($26 billion) A400M military transport aircraft programme.

One again, therefore, a symbolic European programme is crumbling into the dust, demonstrating the inability of the "colleagues" even to get a fairly straightforward project like a military transport off the ground. This is more than fifty years after the US introduced the iconic C-130 Hercules into squadron service.

Under pressure from L’Escroc, Britain has ordered 25 of these machines at an expected cost of £2.4 billion, to replace its fleet of 51 US-built C-130 Hercules transports. For some long time it has been suffering a marked shortage of airlift capacity as it waits for Airbus to bring the A400M into production.

In December last, so critical had the situation become that the government was mooting buying another three Boeing C-17 Globemasters for a mere $660 million (about £337 million).

The trouble is that the bulk of the orders for the C-17 have been for the USAF and the orders, barring a few, are largely complete, leading Boeing to close down the production line. Although the Canadians are also interested in buying C-17s, their orders are not sufficient to keep the line open and, therefore, there is some doubt about whether the order could be fulfilled.

But, if this is problematic for the RAF, the Luftwaffe, which is struggling with a fleet of clapped-out Transalls which, even in pristine condition, do not have the range adequately to service German requirements.

More devastated will be the "colleagues" though. As with the troubled A-380, the A400M was always more than an aeroplane. It was a symbol of integration, in this case forming the nucleus of a joint Franco-German military air transport command, a precursor to a European airforce.

I am minded – showing my age somewhat - of the glorious "Telegoons" where Neddy (I am sure it was he), lacking a firearm, conspired to hold up a bank with a colour photograph of a gun. It looks as is the nearest the "colleagues" are going to get to their transport command in the foreseeable future is a colour photograph of an A400M - in the production of which Airbus seems to excel - which, presumably, they can frame and hang over their mantleshelves.

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Labels: Airbus

Given the disastrous recent history of the European Airbus project, you would think the company needs all the help it can get from the EU commission. But it is not getting much support from the fragrant Margot Wallström, vice president in charge of EU propaganda.

She tells us:

The Commission adopted yesterday a very important decision: to include the aviation sector in the European Emissions Trading system. This means that the EU will continue to lead on climate change issues – while at the same time acting in a multi-lateral context like the ICAO.

I am sure that this will not only boost the credibility of our policy on climate change, but will also help European airlines to develop a competitive advantage through investing in modern technology/methods like with the example of the new Boeing 787 Dreamliner, which will use 20 percent less fuel per passenger than similarly sized airplanes.

The plane is specifically designed for the environment with lower emissions and quieter takeoffs and landings. To date, 29 airlines have logged 393 orders worth more than $55 billion making the Dreamliner the most successful commercial airplane launch in history.

Rather helpfully, the Fragrant One has included a link to the Wikipedia entry on the Dreamliner. Boeing could not have wished for a better testimonial.

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Labels: Airbus, Boeing, Margot Wallström

The EU's €3.6 billion Galileo satellite navigation system is running into yet another spot of bother – several spots, actually, leaving transport commissioner Jacques "Wheel" Barrot (pictured) with more than a few headaches.

Firstly, despite earlier indications to the contrary, it seems that the EU commission is still waiting for €200m of the initial €1.5bn start-up costs that have been promised by member states.

Secondly, contract negotiations with the private sector operating consortium seem to have "stumbled" over who will pay for potential liability claims. The two sides cannot, for the moment, agreed on how potential lawsuits by users of the system, making third-party liability claims, would be handled.

The potential operating companies fear they could be sued if the technology malfunctioned, leaving them open to claims not sufficiently covered by insurance. Somewhat predictably, the companies involved are refusing to take on unlimited liability.

The original plans called for a deal with the private sector to be concluded by late 2005 yet, with it nearly a year behind schedule - and short of money - Barrot is still claiming that "the bulk of the project" remains on schedule. The second test satellite, he says, will be launched in 2007.

Then there is the little matter of a home for the commission's oversight body, the so-called Galileo Supervisory Authority, which will manage the system on behalf of the member states and provide a bridge between them and the operating companies.

Transport ministers were due to agree a location yesterday, with 11 cities in the running: Prague, Ljubljana, Munich, La Valetta, Brussels, Strasbourg, Barcelona, Cardiff, Noordwijk, Athens and Rome. Finnish Transport Minister Susanna Huovinen told journalists after chairing a meeting with her EU counterparts that "This was not the moment for the decision but we have made good progress".

Meanwhile, the commission has launched a four-month consultation, an exercise Barrot hopes will allow private and state players to "explore the full range of possible uses and debate the role of authorities in regulating Galileo, including meeting concerns over privacy." Details, if anyone is that interested, are set out in a Green Paper.

Interestingly and absolutely typical of the way the EU works, the crucial issue of military applications "does not fall within the scope" of the Green Paper. "Consultation on the use of this service for security applications is taking place with governmental and Community entities directly," it says.

Nevertheless, military use remains on the table even though some EU states do not support this option. But Barrot very definitely wants to "leave the door open". He first admitted to a military application this October, the French defence minister having already conceded this use in December 2004 - after we had asserted as much the previous July.

More and more this now looks as if it will not only be a major use, but also the only money-maker. In its discussion document the commission is now admitting (very much in the small print) that Galileo is "complementary and interoperable with the current GPS" (i.e., the US "Navstar" system). It also says that the combined use of the two systems will "significantly increase the reliability and availability of navigation and positioning services worldwide."

What it does not say it that very admission means that the cost recovery model for Galileo, aimed at charging users for access to the signal, is fundamentally flawed. With the US signal being free-to-user, it is hard to see how you can have a composite system where one component is free and the other is chargeable.

Underwriting the operating cost structure has already been a point of contention between the commission and the contractors and this coming issue should be the subject of earnest debate. Member states, in the final analysis, are going to have to fund any shortfall.

But the bizarre fantasy world of the commission is matched only by the myopia of the MSM, which has never seriously engaged with this project. We could, therefore, have in the not too distant future another "Airbus" on our hands – a vastly expensive technological white elephant, draining precious funds from member states, with no hope of repayment.

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Labels: Airbus, Barrot, EU, galileo

An interesting article on Airbus in the IHT. Here is a taster:

A much-lauded pan-European industrial process was in complete breakdown, an apt enough metaphor for the wider process of European integration that was collapsing at the same time with the rejection of a much-heralded proposed EU constitution.

It also says that Boeing's decision in 2002 to make a midsize long-range aircraft, the 787 Dreamliner, rather than attempt to build its version of an outsized plane now looks prescient. Funny that. We thought so too.

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Labels: Airbus

Any which way you look at it, the project is in trouble. We scented problems in October and now, no matter how carefully they word it, all the indications are that they are not going to make the 2009 deadline.

We are talking here about the Airbus A400M project, the military transport destined to replace ageing transport fleets in Europe. They say it is still "on track" but a review carried out in September has uncovered "significant" challenges for ensuring that initial deliveries are made in 2009 as planned.

These include the electrical harness design, a wiring problem that was also behind the latest delays to the A380 superjumbo project. Other "critical risk areas" for the A400M are engine modifications, the maturity of military mission systems, and the need for more work on the final assembly line, says manufacturer EADS.

The A400M is crucial for EU military ambitions. Germany has ordered 60 of the aircraft, to replace its ancient fleet, France wants 50, Spain 27 and Britain 25. Without that airlift capability, any idea of a European Rapid Reaction Force is a bigger joke than it already is.

But, if this post is about the A400M, why the picture of the Hercules at the top? Well, this is the oldest picture I could find, circa 1960, and it really puts the whole A400M project in context.

A year before the 50th birthday of the Treaty of Rome there was another 50th anniversary and, in its own way, one more important. That was December 1956 when the very first deliveries of Lockheed C-130 Hercules were made to the USAF, from a batch of 219 machines.

Yet still the "Europeans" cannot even get their act together. All they seem to be able to do is produce a series of increasingly elaborate computer-generated pics while, 50 years ago, the Americans were putting the real thing into service. And, having undergone massive transformations, it is still in service, currently as the "J" version. When you think about it, that tells you all you need to know about the European dream.

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Labels: Airbus

Dismissed by experts as "clumsy", few people had taken much notice of the highly localised Chinese "Beidou" satellite navigation system – until now. But, at the beginning of this month, the government news agency, Xinhua announced that China was to develop it into a fully-fledged satellite navigation system that will include up to 35 satellites.

It plans to have the system operational in the Asian region by 2008, gradually rolling it out to give global coverage with five geostationary earth orbit satellites and 30 medium earth orbit satellites. Navigation services open to commercial customers will initially provide users with positioning accuracy within 10 meters (33 feet), velocity accuracy within 0.2 meters per second and timing accuracy within 50 nanoseconds, the report said.

In fact, Taylor Dinerman was writing about this system in Space review in June last, pointing out that developments in this field were disturbing both the Europeans and the US. The Chinese, he wrote, were going to try to do to America and Europe what the Europeans, under French leadership, had tried to do to the US – using their system to neutralise the US military advantage.

The original plan was for the European Galileo signal frequency to be so close to the US M-code one that any attempt to jam their signal would interfere with the US system’s operation: a neat trick that was aimed at giving France a de facto veto over all US military operations. However, writes Dinerman, the rest of Europe didn’t care to follow France into a conflict of this kind with the US so they forced France to swallow an agreement on harmonising frequencies.

However, the Chinese are not likely to be anything like as "reasonable" and the spectre now emerges that the Chinese will be developing a system with frequencies so close to the US system that jamming becomes impossible without mutual degradation.

But what is also emerging is that China has benefited hugely from its participation in the Galileo programme, gaining the knowledge it needed to develop its own system. This may, in fact, have been the real reason why it joined in the first place, leaving the Europeans with egg on their face.

Although this drama has been totally missed by the MSM, it has belatedly been picked up by the magazine New Scientist. It ignores the military implications but notes that China's decision to expand the functionality of its satellite navigation network could undermine the economics of Galileo. By providing a free or commercially competitive service to customers provisionally staked out by the Galileo consortium, this could drastically reduces its ability to recoup the €2.5 billion cost.

According to New Scientist, the EU's official position is that it does not expect China's plan to impact on Galileo, but that is whistling in the dark. With the already free availability of the US Navstar system and the Russian intention to develop Glonass, the sky is now beginning to look very crowded indeed.

But the biggest threat to Galileo seems to be the ability of receiver manufacturers to integrate the signals from all the rival systems to provide a level of accuracy and reliability available to none of the systems operating independently.

Where we stand with the military implications, though, is as yet uncertain and whether this affects the Indian attitude remains to be seen. But what is increasingly certain is that the UK, is casting its lot in with Galileo, has put its money into another financial black hole.

Between the Airbus A380 and Galileo, we are looking at potential losses of well over £1 billion. And still the MSM sleeps.

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Labels: Airbus, China, galileo

The House of Commons Transport Committee yesterday produced a coruscating report, condemning the EU's European Aviation Safety Agency (EASA), calling it "accident waiting to happen", and advising the British government not to transfer more power to it.

This was picked up by Reuters, which reported: "UK lawmakers slam European air safety authority" (I do wish they would stop calling MPs "lawmakers") and by the BBC website, which had "EU airline safety agency attacked".

In the 367-page report, committee chairwoman Gwyneth Dunwoody says that EASA, which became operational in 2003, had failed to coordinate safety regulation across Europe and threatened air safety in the UK. EASA's "lamentable problems of governance, management and resources," the report adds, "must not be allowed to compromise aviation safety in the UK in any way".

I suppose we should be grateful that the committee has finally caught up, but we have been complaining about EASA virtually since its inception in 2003 over the Linstrand HiFlyers (illustrated), an issue we returned to, many times. And there have also been dark tales about other failures, centred around the Airbus A380.

Until EASA moved in on the territory, aviation safety in the UK had been regulated by the Civil Aviation Authority (CAA) – which had had a world-wide reputation for excellence. But it is being forced to divest its powers to an untried and clearly inadequate European agency.

Yet, such is the shift of power to Brussels from this our formerly independent nation state that Dunwoody's primary recommendation is that the EU commission "must examine closely the shambolic nature of the project to date, and apply the lessons learnt to future endeavours."

We are not the only ones to be concerned.

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Labels: Airbus

Launch customer for the troubled Airbus A380 freighter, the US freight giant FedEx, has decided to bail out – possibly the first of many.

It has cancelled its order for ten of the Superjumbo aircraft, ordering instead 15 new Boeing 777 Freighters, with options to purchase another 15.

However, we should not be at all triumphal. Two weeks ago, Ambrose Evans-Pritchard wrote that British taxpayers stood to lose up to £700m of launch investment unless Airbus succeeded in winning a new wave of orders for its flagship aircraft.

So far, the government has invested £530m of our money in the A380 and a further £250m in aid to Rolls-Royce for the Trent 600 and 900 engines. It said the funding would lead to 22,000 Airbus jobs in Britain, where the wings are built, and safeguard a further 62,000. In fact, Airbus now employs 13,000 people in the UK – and the number can only go down.

The way the system works is that a royalty is paid on every aircraft sold, but the taxpayer foots the bill if the jet proves to be a flop. With its 159 orders now reduced by ten, even the original, rather optimistic break-even of 270 aircraft looks unreachable, much less the current estimate of 420 – which means that we stand to lose our shirt on this European white elephant.

Without even the technical troubles though, I could have told you that this thing was a non-starter. In fact, I did … which, after his comments when the A380 visited London recently, makes chancellor – soon to become prime minister - Gordon Brown look a bit of a prat.

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Labels: Airbus, Gordon Brown

The shock waves from Airbus's incompetence continue to ripple through the system with The Times and others reporting that Rolls-Royce is suspending work on its Trent 900 engine used to power the A380.

The company, we are told, now expects to deliver only 28 of the £10 million engines this year and none next year. Rolls-Royce says it will be reviewing whether any job cuts will be necessary when further clarification on the A380 programme was given by Airbus.

Airbus Chief Executive Christian Streiff, however, does not have that luxury. He has announced the launch of an Airbus revival strategy called Power 8, which will involve a 30 percent cut in costs, primarily from job losses.

read more...

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Labels: Airbus

As troubles multiply for the European aerospace giant EADS, the Financial Times has been quoting Airbus Chief Executive Christian Streiff as saying that the revamp of the mid-size A350 XWB project could be at risk.

But more worrying are the implications for our defence capability as Streiff is also saying that the A400M – the military airlifter - could suffer cost overruns or delays. "The timetable is exactly on the edge. It is a tense situation with a number of suppliers and internally. We are exactly on track but without any reserves [of time]," Strieff says.

Britain has ordered 25 of these machines at an expected cost of £2.4 billion, to replace its fleet of 51 US-built C-130 Hercules transports and is suffering a marked shortage of airlift capacity as it waits for Airbus to bring the A400M into production.

read more...

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Labels: Airbus

You know something must be up when Spiegel begins to sound like EU Referendum.

Difficult though that might be to believe, try this for size:

The super-jumbo A380 was supposed to become a symbol for Airbus's superiority and Boeing's decline. But it hasn't turned out that way. Instead, the prestige project could turn in to a symbol for the Europeans' aerospace downfall.

It was beautiful - in an almost otherworldly way. Fairies and elves hovered above the trees as wisps of fog rose into the air. Everything was bathed in shimmering blue light. The 5,000 invited guests, the crème de la crème of the European business, political and cultural worlds were enchanted as they watched the world's largest passenger aircraft, the A380, being unveiled in the southwestern French city of Toulouse.

It was such a momentous event that the guest list even included four European heads of state. One of them, then German Chancellor Gerhard Schröder, seemed practically airborne himself when he said: "Perhaps we have reached for the stars, but when it comes to aviation, we have a significant number of them in our hands today."

That was January 18, 2005, a date almost everyone expected to go down in the history books in European aviation. With its €11 billion A380 project, Airbus planned to finally out-fly American competitor Boeing, long the leading force in this high-tech industry. Even at its unveiling, the A380 was more than just an airplane. It was also a symbol of what was to become Old Europe's victory over the United States.

Now, writes Spiegel, the fog has dissipated, the fairies have flown away (to join the Conservative Party?) and the world's largest passenger aircraft … has become a symbol. But not the one Europeans had been hoping for. Instead, the A380 has become emblematic of the European aviation industry's most severe economic crisis ever.

Couldn't have put it better ourselves. Now, what was that about hubris?

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Labels: Airbus

In the event that the Conservatives win the next election – the date of which could be anything from 2007 to 2010, depending on diverse factors – they could be in for a very nasty surprise.

According to the current edition of Aviation Week, the Ministry of Defence is looking down the nose of a huge shortfall in funding over the next procurement planning period – from 2011-21. This amounts to perhaps £11.6 billion, or even more, on top of the £6 billion or so spent each year on defence procurement.

The problem for the Conservatives is that purchasing decisions made during the Labour term of office – and even before – will come to fruition during this next planning period, when there is a possibility that there will be a new government.

Pojects that will have to be paid for include the acquisition of the Lockheed Martin F-35 Joint Strike Fighter – at an estimated £10 billion - the two proposed aircraft carriers (£4 billion) and the remaining tranches on the Eurofighter, tranche 2 alone estimated at £4.3 billion.

On top of that, there is the £2.4 billion order for 24 Airbus A400M military airlifters, the remainder of the Type 45 air defence destroyer, programmed for £6 billion – and more if a new Conservative government decided to increase the numbers - as well as the £14 billion Future Rapid Effects System. There is also a marked increase in guided-weapons spending in the period, including the £1.2 billion Meteor air-to-air missile for the Eurofighter, and there is the MARS fleet replenishment programme, the Future-Lynx, and the £3bn contract for 12 Nimrod MRA4 aircraft which was announced this week.

All this is money already committed and does not take into account the need for any new equipment for the Army – such as additional armoured vehicles to deal with the threat from IEDs in Iraq and Afghanistan. Nor does it include any provision for increasing helicopter airlift capability, already depleted with the MoD facing the prospect of scrapping eight Chinooks which have never flown operationally, at a cost of £259 million.

Apart from anything else, this "funding gap" raises important questions about the very nature of our democracy, arising from the lengthening period between ordering military hardware and taking delivery. We are getting to the situation where typical procurement cycles are longer than the length of several parliaments, so that one government can make huge spending commitments which may have to be met by a completely different government.

There is a certain irony here in that the Eurofighter project, which was approved by Heseltine in 1985, will revisit the Conservatives, who will have to find the money for tranche 2 and 3. The great Europhile casts a long shadow.

As importantly, whether intentional or not, the defence "funding gap" takes on the aspect of a "poison pill", potentially saddling the next government with huge commitments. This cannot but help but have an effect on other spending programmes and broader policies. A future Conservative chancellor may, for instance, find himself unable to implement manifesto commitments – if any are ever made – simply because he has to pay the debts incurred by the previous Labour government.

This possibility alone drags defence issues out of the specialist ghetto and into mainstream politics. It makes it all the more urgent that future defence policy is properly debated – not least in terms of the major spending programmes such as FRES, which will have an important effect on shaping our defence capabilities and options.

So far, Liam Fox has not risen to the challenge and David Cameron has yet to engage on the issue at all. But, unless this issue is confronted, a new Conservative government may find it has bitten off more than it can chew.

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Labels: Airbus, FRES, Liam Fox, Type 45 Destroyer

It somehow seems fitting that, with Airbus on the rocks, the future of the EU's Galileo satellite navigation system in question, and the Eurofighter sucking dry the British defence budget for no discernible benefit, that the Eurotunnel should also be on skid row.

According to the Evening Standard, so dire is the situation with this icon of European "togetherness" that the operators have placed the fate of the company in the hands of the French legal system today, filing for the French equivalent of Chapter 11.

This was done by executive chairman Jacques Gounon, who applied for a Procédure de Sauvegarde - similar to the US Chapter 11 bankruptcy protection - after talks with creditors on a massive restructuring of its £2.9bn debt failed. Judges at the Paris Commercial Court are expected to announce on 25 July whether they will approve the application, which will protect Eurotunnel from its creditors.

A panel of judges will decide whether to place Eurotunnel under court protection from creditors for up to 18 months and appoint a court official to supervise fresh attempts to achieve a restructuring deal.

Passenger, freight and shuttle trains through the tunnel were running normally and, if the company wins court protection, Eurotunnel will continue trading under the supervision of Gounon's board, while the court official oversees efforts to strike a deal with creditors.

Meanwhile, says the Standard, a war of words broke out between Eurotunnel and creditors' representatives, with Gounon saying he failed to understand why Deutsche Bank, a leading representative of the bondholders who blocked the deal, had not backed his proposals. Deutsche Bank rejected the charge while the committee of senior creditors, whose members signed the deal in May, blamed Eurotunnel for not making more time for bondholders to negotiate once they finally agreed to talks.

Eurotunnel's problems stem from cost overruns during construction and failure of traffic to hit forecasts. Although revenues are sufficient to cover operating costs and some interest payments, the company is scheduled to begin repaying its loans from January. It has no spare cash to do so. However, Gounon believes if creditors wrote off the bulk of the debt, it could become a viable concern.

Hey, wish I could get a deal like like. Write off my mortgage and I'd be quite well off.

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Labels: Airbus, galileo

It is a while since we heard anything interesting about the EU's Galileo satellite navigation system but, in the wake of the Airbus debacle, this story will warm the cockles of every Eurosceptics' heart.

At the centre of the story is the very nature of the Galileo system which, unlike the US GPS constellation – is not free to all end users. The EU intended to make only a very limited signal available free of charge, aiming to charge users for more accurate signals. This is had planned to do by encrypting the signals and then charging users for the key to the codes, so-called Pseudo Random Numbers (PRN) is tecchie-speak.

Now enter the members of Cornell's Global Positioning System (GPS) Laboratory, some very serious tecchies indeed. Irritated by the failure of the EU to provide, free of charge, some of the codes for the signal generated by Galileo's validation satellite, Giove-A, they set up a programme to crack the codes themselves.

From mid-January, it took them two months and, on 1 April published the codes in a GPS magazine. Two days later, NovAtel Inc., a Canadian-based major manufacturer of GPS receivers, downloaded the codes from the Web site in a few minutes and soon afterward began tracking Giove-A for the first time.

Galileo eventually published PRN codes in mid-April, but they weren't the codes currently used by the Giove-A satellite. Furthermore, the same publication labelled the open source codes as intellectual property, claiming a license was required for any commercial receiver.

Professor Mark Psiaki, a member of the Cornell team, was disturbed, fearing that cracking the code might have been copyright infringement. However, the university counsel decided that, while cracking the encryption of creative content, like music or a movie, was illegal, the encryption used by a navigation signal is fair game.

The upshot says Psiaki is that the Europeans cannot copyright basic data about the physical world, even if the data are coming from a satellite that they built. "Imagine someone builds a lighthouse," argued Psiaki. "And I've gone by and see how often the light flashes and measured where the coordinates are. Can the owner charge me a licensing fee for looking at the light? … No. How is looking at the Galileo satellite any different?"

What that means is free access for consumers who use Galileo navigation devices - including handheld receivers and systems installed in vehicles. What it also means is that The EU, in its plans to reap a financial bonanza from licensing its signals, is well and truly stuffed.

But there is a darker side. At the top end of the accuracy spectrum is the Public Regulated Signal (PRS). This is accurate enough to be used for targeting information by cruise missiles and smart bombs. But it was always the plan - or so it was claimed – that the codes for this signal would be restricted, preventing the likes of China using them for warlike purposes.

But, if the Cornell university team can crack the current code, China – as a paid-up member of the Galileo development team, with full knowledge of the systems architecture – should have no problem cracking PRS. If the EU thinks that Galileo is not going to be used by potentially hostile powers for its weapons and command and control systems, it is dreaming.

The question therefore remains as to whether the EU will agree to close down the system if any hostile power looks like using the signal in hostilities against America, or whether the US Air Force will have to shoot down the satellites.

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Labels: Airbus, China, galileo

In today's edition of The Business, on the eve of the Farnborough Air Show, you will find a 2,000-word update on Airbus, chronicling just quite how low the fortunes of this company have sunk.

This is well worth a read, and pointless me regurgitating here. But what it highly entertaining is the analysis of the company's decision to build the A380 "superjumbo". Says the paper:

The ambitious A380 super-jumbo, with a baseline 555 seats, was supposed to fill in the final gap in its range, leapfrogging Boeing’s venerable B747 jumbo, the plane that pioneered long-haul travel for the masses 30 years ago.

But with the A380, Airbus was building the wrong plane. Since the design of the A380 was approved, half a decade ago, the global aviation industry had entered a new phase. Thanks to improved technology, airlines no longer saw the need for giant planes flying long distances. And as hub airports become more crowded, and passenger numbers grow, customers can see the obvious advantage of flying "point-to-point" from regional airports close to home, to regional airports close to their destination.

This had been obvious to Boeing's crystal-gazers years ago. The Chicago-based aircraft maker began work on an all-new widebody twin-jet, offering from 250 to 300 seats, to capture this market. Its B787 Dreamliner, using composite materials and state-of-the-art technologies, will provide big fuel economies at a time of soaring oil prices, and will fit the shape of passenger demand when it comes into service in 2008. The proof is in the sales figures: airlines have ordered more than 350 Dreamliners, enough to offset the plane’s huge development costs.

Now, compare and contrast that analysis with this piece written in January last year (2005) at the time of the A380 launch:

For all that, the A380 is an aircraft that has never left the runway and its first flight is not due to take place until this spring. Commercial service is expected in 2006.

Interestingly, compared with Boeing's alternative, the 7E7 "Dreamliner", there is another "old Europe" aspect to this project. Boeing is going for a smaller aircraft, capable of servicing regional airports, transporting people directly from place to place. The idea is to give passengers a greater choice of starting points, routes and destinations, enabling them to avoid the inconvenience of travelling to the congested, high density "hubs".

Airbus, on the other hand, is going for massive centralisation, putting even more pressure on the central hubs, as its operating carriers will be forced to increase passenger traffic to meet their costs. That rather epitomises the very nature of "old Europe" – an inflexible, centralising construct, divorced from the needs of the people.

As well as the hardware, therefore, we are also seeing an ideological battle and competition between two opposing commercial concepts. My money is on the New World.

The source of that prescient piece? Why, little ol' EU Referendum of course. We mustn't do this too often, but I think we're entitled to feel a little bit smug.

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Labels: Airbus

For an update on this post, see here.

Today, there is a defence debate in the Lords. It will be the first opportunity for Lord Astor, the Conservative defence spokesman, to challenge Lord Drayson over his egregious lie about the British Army having used RG-31s before, and to question him on his claim that, "The RG-31 cannot access areas that Snatch Land Rovers can get to."

The relative size of the two vehicles has been something of a preoccupation with some contributors to the unofficial Army forum , where an extremely robust discussion has developed over the utility of the "Snatch" Land Rovers.

Given that the Land Rover weighs in at just under six feet and the RG-31 at just over eight, we were keen to know how many of the mean streets of Basra were actually so narrow that only a Land Rover could squeeze down them. Visiting the area, obviously, is out of the question – and even Lord Astor has not been permitted to go – but, thanks to the wonders of the internet, we have been able to take a "virtual tour" of the city and are able to present the results here.

That said, the first picture (top left), although it came up in a search for Basra, clearly is not a view of that city. The troops are obviously American and the vehicles in the background look very much like Strykers. The picture has a value though in that it shows the aftermath of a car bomb, with the crater in the foreground and the wreckage of the car in the near distance. It demonstrates that the terrorists by no means confine their activities to the narrow side-streets.

The next picture (right) most definitely is Basra though and the vehicle in the centre ground is a Saxon APC (now withdrawn from Basra). At just under an inch wider than the RG-31, you can see what a tight squeeze the RG-31 would have, hence the difficulty the "suicide donkey" (presumably) is having overtaking the vehicle.

Getting narrower is the next street (left) but, easily able to accommodate two cars with plenty of room to spare, it would no doubt permit passage of a Land Rover. In what looks like a one-way street (but you never know), we think and RG-31 might just be able to squeeze by, which seems to put Lord Drayson's claim rather to the test once more. The parking of the car on the left, incidentally, does not seem too brilliant.

About this cityscape (right) I am not certain it is Basra – it looks a bit like Baghdad to me. No doubt someone will correct me. In the foreground is what looks somewhat like a bomb crater, but it could be just disrepair. Again though, the Land Rover would have no difficulty traversing the road but it would be also very hard to imagine that the RG-31 could have a problem. We cannot vouch for the side streets though, as the views of them are not clear.

In this road scene (left), some sense of scale is given by the massive six-wheeler truck, giving the road-width – at a rough estimate – of something three times the width of the truck. Even allowing for the bicycle, we assume, therefore, that a Land Rover could squeeze past, but is this yet another of those "narrow" roads where an RG-31 would have difficulty getting down? Note again the parking technique – this does not seem to be the Iraqis' forte.

Here, we do not have to guess about the Land Rover (right) – a "Snatch" is parked centre picture, with its door open. This is the Coldstream Guards on patrol, doing their "hearts and minds" bit, and very good at it they seem, to judge from the crowd of children around and in front of it. The truck to one side and the car to the other (badly parked), and the spacing, however, does seem to suggest that an RG-31 could just about squeeze past. Whether the motorcyclist would have such an easy passage is anyone's guess.

This (left) is the best I can do for a view of a side-street. If there was an IED around, it could well be embedded in the trash-filled gutter – a favourite hiding place for the terrorists and totally invisible to any passing patrol. The street itself does look narrow but, in the distance, you can see what appears to be a parked car, giving some sense of scale. From the look of the approach, a Land Rover would have no problem. An RG-31 might have difficulty squeezing past the car, but would any mounted patrol really want to go down this road where there could so easily be an ambush?

The right-hand scene is for real, where a bomb has gone off. The van to the right has been caught in the blast and has been burnt out. The structure, however, looks relatively intact so a passing "Snatch" Land Rover might just have survived the blast. In an RG-31, however, that survival would have been more certain and, from the look of the spacing, it would have been able to have driven down the road without too much difficulty.

On the left, we have another Coldstream Guard patrol. You can see the "Snatch" on the left, behind the parked car, with the "top cover" – the Americans call them "sky guards" – aiming his weapon up the street, giving cover to the soldier on foot, the so-called "dismount".

Once again, the vehicles give a sense of scale, the road measuring at least four car-widths, but probably wider. Clearly, the Land Rover had no problems navigating the road and, once again it is very hard to see how an RG-31 would have had any difficulty. Another one for Lord Drayson to explain?

The photograph on the right, taken over the top of a parked car, shows a group of British soldiers, so this is obviously – at the time, at least – a patrolled area. There is no sign of a patrol vehicle, but the centre strip shows the road to be a dual carriageway and the truck parked off-road to the right suggests that large vehicles can navigate the road. One senses, therefore, that an RG-31 might not have too much difficulty.

I think I recognise the road (left) from scenes on television, and recall seeing a film of a convoy of "Snatch" Land Rovers led by a Warrior hammering down this road. Not in your wildest imagination could you argue that an RG-31 would have difficulty here, so this is yet another bit of road where Drayson's preference for Land Rovers does not seem to stand up. Down here, you could line up half the Army's complement of tank transporters.

And, on the right – if this really is Basra and not Heathrow airport or somewhere else - we could land a Jumbo Jet, or even an Airbus A380, and have room to spare. No doubt, someone will tell me if this is not Basra, but even then it is difficult to see where the "nasties" might hide an IED. But not even Drayson, I imagine, would try arguing that an RG-31 would have difficulties travelling down this road.

Another day, another patrol (left) – a convoy of "Snatch" Land Rovers, with a "dismount" in front and another "top guard" covering him. This is yet another dual carriageway and you can see from the way that the Land Rovers are staggered, rather than directly in line, that there is plenty of room on the road. Once again, therefore, we have a patrol area where an RG-31 would have little problem and if, as appears from the picture, there is a car tucked in between the Land Rovers, a potential suicide bomber, the troops would definitely be safer in the better-protected vehicle.

Another one, "for real" (right). This is another bomb explosion in a busy thoroughfare, with considerable damage evident to vehicles. One again these are civilian vehicles and the one on the left is not totally destroyed, again suggesting that the blast would have been survivable at that distance, more so in an RG-31 than a "Snatch". Despite the crowds of people, the width of the road is clearly evident and the snaking hoses suggest a fire engine in the near vicinity. An RG-31 would not have had any difficulties passing down this road.

We've used this photograph before (left) - an offical MoD photograph, showing "Snatch" Land Rovers on patrol. Clearly this is a main road and the volume of truck traffic, and the spacing between the Land Rovers and the trucks easily demonstrates that an RG-31 would have absolutely no problem navigating this road - yet another route knocked off Lord Drayson's list.

And finally... (right) this is the scene of the famous Basra riot, where the graphic scenes were flashed across the world of British soldiers spilling from a burning Warrior with their bodies wreathed in flames. You can see a "Snatch" to the left of the picture and a Warrior centre-right of picture. And, where a Warrior can go, an RG-31 at less than half the width, can easily follow. Note also, the youths are attacking the Warrior - the more aggressive-looking vehicle - and ignoring the "Snatch". Would they have attacked a convoy of RG-31s?

Anyhow, this is the best I could do with my "vitual tour". No doubt there are streets in Basra down which an RG-31 could not pass, but then would you want to drive a Land Rover down a potentially dangerous road where you have only one foot clearance down each side? But that apart, if there are such roads where only Land Rovers can travel, clearly there are many routes which are accessible to the larger vehicle. It would be absurd to suggest that, because some roads might be inaccessible, then only Land Rovers should be used for all of them. But that, effectively, seems to be what the Minister is saying.

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Labels: Airbus, basra, land rover, RG-31

On hearing the news that the prime minister had decided to invest our money in a private fleet of jets for his personal use, I had half expected them to be Airbusses from Enron Airliners – in a gesture of solidarity with the "colleagues".

According to The Times, though, the bigger of the two – to be used for long-haul flights – in what our own Anoneumouse has dubbed "Sleazy Jet" airlines – will be a modified Boeing 737. That never struck me as a long-haul machine, but what do I know?

Anyhow, at over £12 million a year, this is a serious PR gaff, which will no doubt rebound on the prime minister. But - whether intentionally or not – it is also going seriously to dischuff the "colleagues". Tact it ain't – when the Enron Airliner situation seems to be spiralling out of control.

According to the Australian press, Blair might have been able to get a better deal if he had bought "European" as buyers seem to be bailing out of Airbus faster than the Wehrmacht over Crete.

Los Angeles-based International Lease Finance, the world's biggest aircraft leasing company, is threatening to pull its order for 10 of the A380s, worth $3 billion, while Qantas, which has ordered 12 of the "superjumbos" has despatched senior executive John Borghetti to investigate the delay. He is keeping his company's options open.

With Singapore Airlines threatening to sue for damages and ordering $US4.52 billion worth of aircraft from rival Boeing in preference to the A350, things could not look less rosy and a little help from Blair would, no doubt have been appreciated.

Hilariously, the airline builder's problems are even spilling over into the French Assembly, where prime minister Dominique de Villepin sparked uproar yesterday when he accused the Socialist leader of cowardice in a debate over the crisis.

Socialist party members stormed out and the session had to be suspended, to the strains of Socialist grandee, Henri Emmanuelli, shouting, "He's mad". Apparently, parliamentary stewards had to stand guard around de Villepin as Socialist politicians advanced towards him chanting "resign."

Meanwhile, Bush has arrived in Vienna for a summit with European Union leaders, who seem to be spoiling for a fight over Guantanamo prison camp, Iran, the Iraqi war, trade relations and anything else they can think of. At least, though, Bush has the one consolation. When he sets out to go back home, there will be a pristine Jumbo jet out on the tarmac, a Boeing 747, that can actually fly.

I hope he has the sense to wait until the door of Air Force One has closed before he puts two fingers up to the "colleagues".

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Labels: Airbus