Ranting About Boeing

So I need to state before you get any further, that this is going to be a bit of a rant, but I’m extremely frustrated with Boeing right now and this is my platform to vent.

But seriously Boeing, how can you act like the way that you are acting right now and think that it’s acceptable behaviour? With the recent announcement of the machinists voting to pass their new contract by 51% states that something isn’t right. So basically what has happened is Boeing said, either you vote in favour of what we are proposing or we’ll be moving to another state to begin production of our next aircraft, the 777X. Feel free to vote no, but when the production of the current 777 aircraft’s have been completed, you’ll be out of a job.  Oh by the way, we don’t exactly have a firm timeline of the current 777 production schedule either.  That’s roughly translated into, we’re going to make sure that we do everything in our power to close up shop as quickly as we can.

The Seattle Times is reporting that the vote passed by only 600 votes, 51 percent to 49 percent. In earlier versions of the contract, Boeing tried sweetening the deal by adding bonus’ and other elements to the contract.  However, most of these sweets wouldn’t be rewarded for 5 to 7 years, so roughly 2019-2021. Sweet deal? More like a sour deal because when these discussions were happening, Boeing was stating that there was work on the books for approximately ten years on the new 737 MAX and 777X.

So if the machinists accepted the contract the first time around, they would have received their “bonuses” about the same time they would be entering into contract negotiations again because at the time this was all being discussed, work was projected to be good for ten years. The machinists said no, so Boeing sweetened the deal again.  However, this is when they also added the catch that they are starting to look into other locations throughout the country to build a new plant and start aircraft productions elsewhere.

Fast forward to this last week when the machinists accepted their contract, because it was either that or they were out jobs. That’s really the gist of it all and that’s extremely unprofessional and selfish of Boeing.  I know that there are many other large corporations that are playing the same games, but I firmly believe this one tops the cake right now. Hey machinists, do what we say, not what we do. All while Boeing’s CEO, Mr. W. James McNerney, Jr., will be making close to $20 million once all is said and done.

Lets look at things a little deeper and we’ll find one of the reasons that Boeing is doing what they are doing.  It’s called the 787-8 aircraft.  This aircraft was going to be the next aircraft of aircraft’s.  It was going to make companies like Airbus cry because it was stated to be so awesome.  Well, things didn’t exactly go as planned and time and time again the aircraft was further delayed for delivery.  Then, when the aircraft finally does actually get off the ground, countless other problems follow it. The project has lost billions of dollars and instead of really owning up to many of the issues, Boeing releases the newest member of the family, the 787-9.  Hey… look over here, shiny new aircraft with very few problems.  Don’t mind that aircraft over there, it’s just a big pile of never ending issues. Boeing continues to lose money on the 787-8 because they are still so far behind on the deliveries that selected airlines have just given up and cancelled their orders.

So in reality, what I believe is really happening here is that Boeing needed to find a cash cow because they have lost so much money on the 787 that they wanted to recover it somewhere. Instead of the upper levels of Boeing taking a little less in their paychecks, they are using their own version of the trickle down effect. We’ll count the money that we are losing and then those loses will trickle all the way down to the bottom.

In the end, it’s a game of smoke and mirrors and sadly the machinists are the ones getting the short end of the stick. I just hope that from here forward, Boeing is able to get their act together and move forward.  While the 787 program is a bit of a mess, let’s hope that future programs such as the 737 MAX and 777X work so that ten years from now, we aren’t in the same place again feeling a little day sha voo.

 

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Keeping Travelers Entertained

Whether you travel by air all the time or not-so-often, we are all used to the safety demonstration that is given by the flight attendants prior to departure. Some airlines perform these demos “old-school” with the flight attendants doing the demonstrations themselves, while other airlines take advantage of the video equipment available on board to show a video demo.

That being said, over the last number of years, we’ve seen a handful of unique and creative video demonstrations from airlines like Virgin Atlantic, Delta Air Lines and Virgin America. Perhaps one of the most famous videos was made by Delta a few years back that included, the now famous, finger wave. Over the last couple of days, we’ve had the chance to see two new safety videos released by Delta Air Lines and today, Virgin America.

Delta has released a few new versions of the last couple of months and the one that was released this last week was for the holiday season. Now, in true Virgin America fashion, they released their brand new safety demonstration and as you can watch below, it’s exactly that Virgin America feeling that we’ve come to know and love. What makes the Virgin America demo even more spectacular is that it was produced by Virgin Productions, so it truly is a Virgin produced product.

Thanks Delta and Virgin America for keeping the traveling public entertained, even if it just for a couple minutes. One last thing, thanks Virgin for your catchy little tune.

Delta Increases West Coast Service

New routes support expansion of International offerings from Sea-Tac International Airport

Delta 737-900ER

The Boeing 737-900ER in Delta colors (Photo Credit: Boeing Corp.)

Delta Air Lines will offer new daily nonstop service to Seattle-Tacoma International Airport from San Francisco International Airport as well as increased service fromLas Vegas’ McCarran International Airport and Los Angeles International Airport, beginning next year. The new service is designed to provide customers access to the airline’s growing trans-Atlantic and trans-Pacific network from its global gateway in Seattle.

Details of Delta’s new and expanded Seattle service include:

  • Six new daily nonstop flights from San Francisco beginning March 29, 2014, increasing to seven daily flights on June 5, 2014.
  • Two additional flights from Las Vegas for a total of three daily nonstop flights beginning Jan. 6, 2014, increasing to five daily nonstop flights on April 1, 2014.
  • Two additional flights from Los Angeles for a total of seven daily nonstop flights beginning June 5, 2014.

“San Francisco, Las Vegas and Los Angeles are the three largest West Coast-to-Asia markets in the United States,” said Mike Medeiros, Delta’s vice president – Seattle. “Their addition into this local market will bolster domestic service as well as continue to help support our growing international portfolio in Seattle.”

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Boeing 777-300ER

A new look coming to American Airlines?

Recently there has been speculation that American Airlines is planning on launching a new brand or at least an updated brand.  That rumor continued to be fueled when one of American’s newest Boeing 777-300ER aircraft rolled around Boeing’s plant in Washington in only silver without any markings.  With these ideas floating around, designs and rendering that individuals have started to put together are showing up on the web.  So of these designs are pretty cool looking, while others, need a bit more fine tuning.  Enough of these rumors and speculations have been floating around that the NBC station in Dallas questioned American on it.  

American Airlines Remains Mum on New Livery

AA advises those curious about livery changes to “stay tuned”

With the purchase of hundreds of new aircraft from Boeing and Airbus, American Airlines is being forced to update their look.

The new planes have a composite skin, not aluminum, so the unpainted, polished silver look is likely on its way out.

As far as what the new look will be, however, AA isn’t saying yet.

“We know that we will be taking delivery of composite aircraft, starting with the Airbus deliveries and later the 787 Dreamliner. And we¹ve known since we placed those orders that those aircraft cannot be polished as we do today. With that in mind, and with our focus on building a new American, we are evaluating how the exteriors of our aircraft will need to be modernized in lock step with our plans for the interior customer experience,” said Andrea Huguely, with American Airlines. “Obviously with the delivery of composite aircraft, there are a lot of opinions regarding what our new livery should look like. At this point in time, all we can say is stay tuned.”

Huguely parroted AA CEO Tom Horton’s statements made in October to the Star-Telgram’s Sky Talk Blog.  In that interview, Horton said that he wouldn’t say when we would see the new livery, only that people will just have to wait and see.

The mystery over the livery change, the first for the airline in more than 40 years, has prompted aviation enthusiasts to create their own renderings.

From the NY Times: For United, Big Problems at Biggest Airline

My thoughts: I couldn’t agree with this article more.  Many, including myself, figured the “new” United would have many of the issues that it is still currently having.  The leadership of United isn’t as strong as it needs to be and that comes into play when you merge two strong headed companies (in any industry).  United needs to strive to make themselves a better company and it starts with the leadership.  My first suggestion for many of the leadership team… stop collecting bonus money for jobs well done, such as the change over of the reservation systems. While United is stating that most of the “growing pains” have shrunk, I think that the opposite could happen and things might even get worse than they already are.  American Airlines is currently going through strong labor issues (among other things) and United could soon find themselves in the same situation.

United Airlines Boeing 787 Dreamliner

United Airlines Boeing 787 Dreamliner poses at Boeing’s plant.

Anyway… here’s the article from the NY Times:

By Jad Mouawad; Published: November 28, 2012

CHICAGO — It was supposed to be a moment for celebration: United Airlines observing the delivery of its second Boeing 787 Dreamliner with a flight from Seattle to Chicago earlier this month for a select group of employees, while senior officers, including Jeffery A. Smisek, United’s hard-charging chief executive, served Champagne and took lunch orders.

But before the flight took off that morning, a computer glitch in one of the airline’s computer systems delayed 250 flights around the world for two hours.

So it goes at United these days. The world’s biggest airline, created after United merged with Continental Airlines in 2010, promised an unparalleled global network, with eight major hubs and 5,500 daily flights serving nearly 400 destinations. As an added benefit, the new airline would be led by Mr. Smisek of Continental, which was known for its attention to customer service.

But two years on, United still grapples with myriad problems in integrating the two airlines. The result has been hobbled operations, angry passengers and soured relations with employees.

The list of United’s troubles this year has been long. Its reservation system failed twice, shutting its Web site, disabling airport kiosks and stranding passengers as flights were delayed or canceled. The day of the 787 flight, another system, which records the aircraft’s weight once passengers and bags are loaded, shut down because of a programming error.

United has the worst operational record among the nation’s top 15 airlines. Its on-time arrival rate in the 12 months through September was just 77.5 percent — six percentage points below the industry average and 10 percentage points lower than Delta Air Lines. It had the highest rate of regularly delayed flights this summer, and generated more customer complaints than all other airlines combined in July, according to the Transportation Department.

The airline even angered the mayor of Houston, Continental’s longtime home and still the carrier’s biggest hub, when it unsuccessfully sought to block Southwest Airlines’ bid to bring international flights to the city’s smaller airport, Hobby. 

The United-Continental merger is weighing on the company’s finances. It took a $60 million charge in the third quarter for merger-related expenses, including repainting planes. It also took a $454 million charge to cover a future cash payment to pilots under a tentative deal reached in August.

While most large airlines reported profits this year, United has lost $103 million in the first three quarters of 2012, with revenue up just 1 percent to $28.5 billion. Its shares are up 7 percent this year compared with a 12 percent gain for the Standard & Poor’s 500-stock index and a 24 percent gain for Delta.

“United remains at a challenging point,” analysts from Barclays wrote last month, and they forecast that the carrier would not begin to see the benefits of its merger until late in 2013 and into 2014. Still, while airlines initially struggle, mergers increase revenue eventually, as the example of Delta’s acquisition of Northwest Airlines demonstrated two years ago.

Mr. Smisek, taking a break from serving coffee halfway through the maiden 787 flight, acknowledged that things were not going as fast as expected, particularly given the aggressive targets he set two years ago. Back then, Mr. Smisek said the merger would be wrapped up in 12 to 18 months. He has since learned to be patient, he said.

“It is still a work in progress,” he said. “The integration of two airlines takes years. It’s very complex. If you look at where we were two years ago, we’ve come a long way.”

Admittedly, the process is complicated. Airline mergers mean combining different technologies, often old computer systems, as well as thousands of procedures used by pilots and flight dispatchers, gate agents, flight attendants and ground crew.

Setbacks are common. Like United, US Airways experienced a breakdown in its booking technology after its combination with America West in 2005. Delta’s on-time performance fell sharply in the year after its purchase of Northwest.

But today, Delta is a leader among big airlines in on-time performance. US Airways had a record third-quarter profit even though it still lacks common work rules for its pilots seven years after its merger.

United has completed many of its merger tasks, particularly as far as passengers are concerned. It has received its single operating certificate from the Federal Aviation Administration, allowing it to run a combined fleet. Despite all the problems this summer, it claims to have finally merged the reservation and technology systems.

Mr. Smisek said passengers would see the benefits of the combination by next year as United introduces new features on its planes, including satellite-based Wi-Fi, flatbed seats in business class and bigger overhead bins on its fleet of Airbus narrow-body planes.

One of the remaining sticking points, however, is getting employees of the two merged carriers to agree to a single contract. Pilot unions signed a tentative agreement with the company in August, after months of bitter negotiations. Talks are continuing for agreements with unions representing flight attendants and mechanics.

“There always seems to be some bump in the road,” said Ray Neidl, a senior aerospace and airline analyst with the Maxim Group. He said much of the merger’s benefits would kick in after the airline got its collective agreements with its work force. “Once they get these challenges out of the way, United will be a powerhouse.”

For many analysts, United’s real challenge lies in combining different work groups with different cultures, values and ways of doing things.

That is particularly true for United, which had a history of sour labor relations, and Continental, long considered one of the nation’s best-run airlines.

“You know, the cultural change takes time,” Mr. Smisek said. “And people resist change. People are sort of set in their ways.”

He added the airline was now intent on providing better operational performance and consistently good customer service. “And there are people who don’t like that,” he said. “I understand that. What I want is those people to either change or leave.”

There are few lasting advantages in the airline business. Airlines can easily match what rivals are doing, whether by lowering fares, buying new planes or installing new features on their aircraft. But United insists that its network remains its most resilient strength and will help it attract more passengers.

The carrier’s dominant market share at Newark Liberty International Airport, for instance, appears unassailable and provides a formidable gateway to the New York and East Coast markets. United’s Houston hub is a major jumping point to Latin America. And United is the biggest carrier in San Francisco, giving it an advantage in the Pacific, where it is the biggest American carrier.

United is counting on new planes to make a difference in coming years. It has made a big bet by ordering 270 planes over the next decade, including 50 Boeing 787s and 25 Airbus A350s.

The 787’s long-range ability and relatively smaller size will allow United to add new direct service between cities that did not have enough traffic to justify bigger planes like the Boeing 777. Its 787s will fly between Houston and Lagos, Nigeria, starting in January, followed by service from Denver to Tokyo’s Narita airport in March, and from Los Angeles to Tokyo and Shanghai.

United is betting that passengers will be drawn by those new services as well as by the 787’s carbon-fiber technology, which allows higher levels of humidity and oxygen in the cabin and can, Boeing claims, help reduce jet lag-related fatigue.

The airline moved its headquarters to the Willis Tower in Chicago last year. In June, it set up a new Network Operations Center, occupying a full floor in the tower in a vast open space previously used as a trading floor. From here, managers run daily operations, overseeing flight schedules, crew availability, weather forecasts and any delays throughout the system.

After the summer’s mishaps and poor performance, United has improved its on-time record. In particular, it said, arrivals on-time this month were 85 percent.

“We think we’re in a good spot given where we are in the merger,” said Peter D. McDonald, United’s chief operations officer.

Still, perceptions may be tough to fight, particularly online and in frequent-flier forums, where criticism of United’s service and performance has been particularly bitter. One critic, who goes by @FakeUnitedJeff, parodies Mr. Smisek on Twitter. One post last month read: “It’s raining in Newark. I wish we’d bought waterproof aircraft. Cancel, cancel, cancel.”