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Saudi airline cancels $6B Boeing order in favor of Airbus (nbcnews.com)
148 points by thomas on July 10, 2019 | hide | past | favorite | 103 comments

Foreign aircraft purchases are highly politicized and this decision probably has nothing to do with product quality, safety, or price. More likely it's a signal from the Saudi royal family to the US Congress that they ought to stop being so critical over minor issues like the murder of a US resident or bombing civilian targets in Yemen.

It's say it's more likely related to a recent sale of arms and planes to Qatar, who are in their bad books https://mobile.abc.net.au/news/2019-07-10/qatar-donald-trump...

Or maybe they just don't want to buy aircrafts that crash.

The Paris air show wasn't good for Boeing either.

Boeing crashed at the Paris air show?

Metaphorically. On the first day airbus got about 100 orders and Boeing got none.

I assume all those orders are pre-planned though.

IE. Potential customers are asked to announce their orders at the air show for prestige of both the buyer and seller

While I don't doubt that could have had some impact, somehow if Boeing's 737Max had no ongoing safety investigations I don't think this deal would have been canceled.

Exactly. My first thought, "OK, so can we whine and bash Airbus now for doing business with Saudi Arabia like we'd been doing to other companies?"

If they're civilian planes, what's the problem?

Is EU any less critical of Saudis?

UK/EU tend not to criticise the Saudis because we sell them billions of GBP of arms+support on a regular basis. They also have us by the balls with oil, and they're buying up a lot of London. That means we're not really in a position to criticise.

The fact that they buy up a lot of London creates leverage for the UK over the Saudis, not vice versa

Do explain...

Any kind of freezing foreign assets would cause a plummet in foreign buyers, a plummet in house prices, and possibly a recession...

A plummet in house prices may be exactly what London needs

Saudi government isn't a monolith.

There are people with delegated authorities that function outside the branding of their country. What a concept

this seems completely false. it is a monolith. in fact a monarchy. do you have any support for your claim?

what support would you like?

an English copy of a law where power is explicitly delegated to the minister of finance? rule of law isn't that strong or consistently applied there, but it is a distributed system just like federal or confederated relationships with regional governments. There are 13 semi-autonomous states in Saudi Arabia with appointed governors, with a mix of appointed and elected representatives.

The royal family is consulted for laws, but the royal family is 7,000+ people. The King doesn't have to do anything, and just can make executive choices over any matter whenever he wants if things diverge from their brand, their society and their interpretation of the Quran.

Didn't MBS lock up a bunch of "tribal leaders" (for lack of a better word) in this luxury hotel and made them kowtow to him? Not sure I would characterize that as a federation of peers being consulted.

> like the murder of a US resident

When was the last time the murder of a US resident on foreign soil investigated and/or prosecuted by the US?

When was the last time one was murdered in an embassy?

i think the point he's making is "resident" not "citizen".

In the US embassy? Never, I would hope.

That product quality, safety and price are all superior with Airbus right now is a bonus.

Just how connected to the royal family is "Flyadeal"? This doesn't look like a very large airline, it's a smaller low-cost one, and this order was for only 30 planes. The article even says one big reason they were able to make this move is because of the small size of the order.

It is owned by Saudia, which is owned by the government.

Really? Or was it about the recent sales to UAE?

That might have also been a factor. They'll never openly state the real reason so we can only guess.

Boeing deserves to get pushback like this. They really let everyone down, but most problematic was not having public safety foremost in their design of this airframe. That is inexcusable.

It’s too bad there isn’t a better whistleblowing mechanism for these kinds of questionable design decisions for critical infrastructure.

I can only hope the certification process will become more rigorous and require the approval of multiple aviation regulators before it’s declared airworthy.

The way MCAS handled its two sensor inputs is basically malpractice. It's mind boggling to me that someone developing that system thought it was an acceptable mode of operation.

Hopefully someone is successful in suing for discovery. It might not have been 'mind boggling' it might have been deliberate action by management to cut costs, reduce MTBF (because 2 sensors fails more often), or the fact that 'Boeing' didn't design the system so much as an amalgamation of cut-rate 3rd party contractors with a 'yes-person' 'project manager' at the helm vs an actual engineer.

>deliberate action by management to ... MTBF (because 2 sensors fails more often)

if that happens to be real case, it may become the textbook case of perverted metrics/cobra effect.

It’s actually an interesting concept. As a naive buyer I might think that lower MTBF is better and represents and improvement in product specs. However in this case it clearly comes at a cost of reduced reliability, since there is no backup. However “reliability” seems the same as “MTBF” to my naive brain, so I’m struggling to resolve this apparent paradox.

The main culprit is the FAA. Private companies should be expected to take shortcuts for short-term gain. That's why there is government regulation and oversight. It's the oversight part that failed here. Yes, Boeing also failed, but that's less worrying.

I think you're expecting too much of the government regulator in this case if you consider them to be the main culprit. They are a culprit but not the main one. They would need to have engineers and managers from the FAA in every meeting at Boeing from the beginning of the project to be considered a main culprit. In theory they should be overseeing and understanding every detail but if you work in any place where any sort of system is designed you know that a third party never knows as much as the makers do.

I don't think that is the case. Given the types of failure we are talking about, this would be documented as part of the design process.

All it takes is someone from the FAA to read it and think about it and act on it. That is the role of the FAA.

Now, if it wasn't on the design, then you may say Boeing is mainly to blame. If it was documented, but not rejected, then the FAA is mainly at fault.

Ultimately though, the FAA has the responsibility.

Airbus make a superior product anyway. They've gotten FbW down to a science and were the first to use it, as well as glass cockpits. The pilots generally like Airbus planes better. They have better safety controls, more room for the pilots, and more comfortable for pilots and passengers. Boeing seems almost last century in comparison.

> Airbus make a superior product anyway

Except that their controls also allow faulty AOA sensor data to drive incorrect automated actions:


The really unbelievable part of this one is that, unlike the 737 MAX, Airbus aircraft actually have 3 AOA sensors, so it would be simple for them to use the obvious "two out of three rule" to detect and ignore faulty sensor data. But instead they allow one faulty AOA sensor to trigger uncommanded pitch down events.

> pilots generally like Airbus planes better

Do you have a citation for that? I've heard anecdotal stuff in both directions.

He made it up. I flagged his comment as misinformation.

Made it up? Hardly. Watch YT videos with pilots themselves claiming this.

It’s more about personal preference. Some pilots hate the airbus as the flight controls are not linked up so they can’t see or feel what the person flying the aircraft is doing when they are in the other seat. Others much prefer the airbus design for example during assent they can simply let the aircraft deal with the specifics to avoid a stall and just go all out on the controls.

Really it’s not just different aircraft but also different design philosophies.

"I prefer Airbus" is an entirely valid personal preference. I suspect you'll find some pilots who prefer Boeings.

"Pilots prefer Airbus" is a pretty big assertion, and not one that can be proven by "some pilots on YouTube say so".

That impossible to gauge, because pilots don't cross-train. Airbus pilots don't fly Boeings and vice versa.

The new A320ies are nicer at base setup, than 737. Though not by much. A320 has a larger range of offerings(A321 and A319). And there's no comparison for a passenger when flying 4+ hours, because 737 is just too small. (I get annoyed even remembering my flight from NY to Belfast on 737)

There's one aspect that instructors note - 737 is more manual and thus can be pushed closer to the edge, as a result the landing can be shorter on 737. Airbus is much more automated, making landings much gentler abeit slightly longer.

Yeah I remember sitting next to a VA pilot on a flight once and he was gushing about the new AirBus 321s. And he was right. Their take offs feel like magic carpet rides compared to boeing 737s.

Hm my experience has been different. I'm always delighted to see that 37 nose at my gate.

I can't speak for pilots but as a passenger, I've been in an a319 that had enough pressure issues to give me sharp pain in my ears that lingered for a day, and annecdotally they feel more prone to turbulence with their big wings.

I'm too tall for either of their seats, so perhaps that's why I don't notice the comfort you speak of.

Note that seats are installed by the airline and can vary substantially even within the same model of plane.

Pressure issues can happen on any plane, not limited to airbus. Pilots are aware of the pressure inside the plane and they make judgement whether to continue or not. Your beef is with the pilots.

As a passenger: Airbus planes tend to be more silent within the cabin (as compared to similar-sized Boeing ones), too.

It's actually more of a pragmatic decision than it is one of safety for Flyadeal.

They were slated to take the 737MAX deliveries starting in 2021 and with deliveries currently halted, there is no way that will happen (especially if the airplane isn't cleared soon). Flyadeal is trying to grow and they need planes to do it. Airbus can deliver on the 2021 date without issue and Flyadeal was likely given a slight discount to pick up some empty production slots.

It's important to keep a good competition between Airbus and Boeing. I hope Boeing can get up and fix their crap. (And I'm European)

I'd rather see Boeing go out of business at this point; they've proven they can't be trusted. What we need is more competition from other manufacturers, such as Mitsubishi in Japan. If Boeing goes under, some other, more trustworthy company could buy up their assets and start building better-engineered planes.

I disagree. Besides, it's not very realistic as an outcome. I think the HN revenge fantasy thing going on about Boeing right now has taken a turn for the comical. Post after post on the front page with comments about the desire for Boeing to die. It's a bit much at this point.

HN's record on such predictions is notorious anyway.

Facebook didn't fail, despite all the HN predictions and bad outcome fantasy posts. Quite the opposite. Its user base keeps expanding, its sales keep climbing, its power keeps growing. Users did not abandon it en masse. None of what was commonly predicted on HN occurred.

Intel - another common target of bad outcome fantasies - isn't failing, their profits are at all-time highs. That's despite the constant HN posts for years about that being inevitable. AMD is due to crush them any minute now, Intel is toast.

Boeing is a $200 billion valuation company - which earned $10b in profit last year - that is strategically critical to the world's largest economy and sole superpower (the one that also happens to have a $750 billion military that depends on Boeing). It's a company with one of the grandest, longest and most positive histories in all of aviation. The notion that two crashes should end that is absurd.

Boeing isn't going anywhere, not under any circumstances most likely. As things actually are, over many decades it has earned its place. If any company deserves an opportunity to re-earn trust, Boeing would qualify.

> that is strategically critical to the world's largest economy and sole superpower (the one that also happens to have a $750 billion military that depends on Boeing)

This part is really all that matters. Boeing isn't a company as much as it's an organ of the state. Regardless of how inferior their engineering is, they won't be allowed to fail.

The US government can prop up the military side of Boeing, but they can't force foreign airlines to keep buying their planes, especially when the flying public doesn't want to risk their lives on them.

Flying public will forget fast enough. Besides 777 is the safest airliner in history.

The 777 is a rather old plane at this point, and was made before the current management era at Boeing. The 787 is the one to worry about; there's been lots of reports of production issues with it.

That would make Airbus a monopolist. So please NO!

What I would prefer, is that Boeing's stock got hit harder for this screwup. It's been down a very small amount. A stop in share price would hit the management hard enough to get their safety inspections up to the task.

I'd rather fly in a plane made by an Airbus monopoly than a Boeing run by its current management. Modern American management has proven itself completely untrustworthy for doing anything where human lives are at stake. Airbus is an European company, so they're inherently more trustworthy. They've also proven themselves far more competent at modern aircraft design (they're not sticking with a circa-1967 design) and electronics (they've been doing fly-by-wire for a long time now, and haven't done anything as blatantly stupid as using a single sensor for controlling flight surfaces).

That's like trying to send Jeffery Epstein to prison, when you are that well connected you are untouchable.

Completely unrealistic.

IDK perhaps one can serve long distance (787 is absolute winner) and another short distance flights (a320). Perhaps even collaborate and not compete...

There are other vendors. Also China just started to produce planes that directly compete with Boeing, Airbus and the rest.

Do you trust the Chinese manufacturers to put out anything with a remotely similar quality and safety as Airbus and Boeing?

Yes, I do. Otherwise they

- go bankrupt faster than anything

- EU won't let them operate within the EU

- The USA won't let them operate within the USA

Wouldn't fly on anything Chinese, but I adore flying on Bombardier Dash 8/Q series planes. Something magic about turboprops. Always loved flying on C-130s (20+ flights) when I was in the military, too. My other favorite was the venerable old C-141.

Events like this really put into focus the value of engineering. Imagine that management had hired an elite team of 50 safety focused individuals and paid them a billion dollars. They would still be profitable!

Totally reminds me of exploding Samsung phones in terms of the small incremental investment that would have saved billions.

Agreed, but that may not hold true at scale. It's like saying a $50 taxi ride is cheaper than a DUI. That only holds true for around 20-200 rides, and I've seen estimates that most people do more than that before they get caught (of course there's other ethical and practical reasons not to).

If I was to guess, there's a ton of this kind of stuff going on, and most of the time nothing happens. Not all boneheaded or sketchy engineering decisions cause catastrophe (or get caught). Also, my understanding is that this was a deliberate choice by Boeing, so more "safety engineers" wouldn't necessarily help. This is frequently the case with engineering disasters. The problems are with politics, management, even communication.

Boeing's MAX order backlog is 8 years long still.

I don't understand this backlog for airplanes (Boeing and Airbus): Is this kind of backlog normal in industrial scale? Is it not viable to scale up production with the massive tail of suppliers that would all need to scale up?

The issue lies in viewing it as a backlog. It's not since it implies someone's behind schedule.

It's more like long range planning with commitments as defined by airlines 10 year plans. They __don't__ want the planes now like a backlog would imply, they want them in 2021.

Also, schedules tend to align with the cycle of the industry. New planes take time to develop etc. So everything happens on a year(s) schedule, incl delivery schedules.

>Is it not viable to scale up production

And then what are you gonna do with all that infrastructure sitting idle for 8 years in between your aircraft generations? Sometimes slow is the profitable approach

Then in that case, does that mean that Boeing won't lose any money provided that they keep their backlog full for the duration of the aircraft's life cycle? (maybe 20 years). Seems like they have many years to fill the hole made by Saudi Arabia at no real loss.

>Boeing won't lose any money provided that they keep their backlog full for the duration of the aircraft's life cycle?

The 737 (all variants) is/was/will be massively popular so I'd imagine as a project it's probably still profitable.

The danger here is reputation. Boeing has in the space of a year ruined a multi-decade reputation. I mentioned this before, but all these articles scream underlying institutional culture problems. Remember the one a month or so ago about a Boeing engineer saying he's uncomfortable letting family fly on a Boeing plane? Forget a lost order, that's existential crisis territory for an organization.

> They __don't__ want the planes now like a backlog would imply, they want them in 2021.

Well, that's not 100% accurate.

Airlines always want the most fuel-efficient plane now, but will settle for ASAP. With leasing, they can dump their old planes and lease new models.

That's why the Singapore A380s were chopped up this year - they were heavy and thus not fuel efficient.

The DC-1/DC-2 was developed for TWA because Boeing promised their entire 247 production run to United.

Adding an additional line is a large capital expense for the manufacturer itself and probably most of its suppliers; and once you make it through the backlog, you would likely need to idle it.

It's better for Boeing to sell 400 737s a year every year for ten years, than 800 a year for two years, then 300 a year for the next eight years.

No. Airplane manufacturing is extremely complex and has dozens of subcontractors who all work at their own rate.

Boeing is not integrated like SpaceX

Which is honestly part of their problem. They have discovered that integration and testing costs scale with the multiple of the number of subcontractors you use. The money you save on upfront development costs ends up being burned on extended integration testing and general inefficiencies (time zone/language/culture differences).

Granted, the -MAX8's problem seems to stem from the need to race Airbus to the market and not having the time to do proper integration tests, but the difficulty with testing is directly related to complications in this development model.

Also, Boeing is way overdue for a proper 737 replacement. A 737 sized bird using 787 design principles/technology and built to properly handle the massive engines that modern customers crave.

> A 737 sized bird using 787 design principles/technology and built to properly handle the massive engines that modern customers crave.

They should definitely make that! They could call it the...737 MAXIMUM SIZE. Or maybe the 7373 MAX for short?

For context, Boeing is making about 50 of these planes per month to the point that when they were grounded but production continued they had Tetris'd unpainted planes across the site including in staff parking areas. I hadn't seen much news on production slowing but they have massive orders to fill at designated times.

Apparently they did that in the 90s and wound up stepping on their own feet. It turned out that it's more profitable to make the buyers wait. Plus there's a healthy negotiating chip: pay us more and jump the queue.

From how these contracts were explained to me, this is a win for Boeing (probably).

Most of these contracts have an initial deposit then payment on delivery however if the order is cancelled, Boeing keeps any deposit and possibly some or all of the full payment (as a cancellation fee like with most cell phone contracts).

Now Bowing already has the initial cost of manufacturing partially or fully covered AND gets to sell the plane or simply not manufacture it for pure profit.

These contracts aren't exactly cookie cutter privacy policy agreements.

Boeing isn't going to profit off these cancellations in any case.

There's a lot of money in support as well.

In the early days of the 340 (one of the first commercial FBW aircraft) I held back for a couple of years but it's turned out to be great.

Now I'm suspicious of all 737/787 flights. Thank goodness it's easy these days to figure out what kind of aircraft you're booking.

I wonder when sites like Kayak will add a toggle so you can include/exclude certain models of aircraft from your itinerary.

I can imagine airliners have their entire maintenance "street" completely tailored to maintain their Boeing aircraft, so unless you already happen to have Airbus, a switch is not likely it seems. Can anyone shed some light on that?

The rest of Saudi airline's fleet is all Airbus so it makes sense for them.

Very few serious airlines are running exclusively Boeing or Airbus

really? I always thought that a lot of the low cost domestic airlines in the US managed costs by maintaining a fleet of a single type of plane. Southwest Airlines for example is entirely Boeing 737 (according to wikipedia, 513 737-700, 207 737-800, and 34 737 MAX 8--presumable grounded.)

Ryanair is another. But “very few” doesn’t mean “no”. I wonder if (but doubt) there are any airlines who also fly big planes (and have more than a handful of planes) that are single manufacturer only.

Ryanair is a CC of Southwest.

That's usually because of age (at some point in history they got a deal, or one manufacturer didn't have a model etc), or because of mergers.

What's certain is that all airlines dream of having only one manufacturer. If they have multiple, they often try to make one hub service one type of plane, e.g. fly all their Airbuses past one airport and all their Boeings past another (For competing models such as A320 vs 737)

This incident should show why only having one manufacturer supply your planes is a bad idea.

Most that have multiple providers probably have e.g. Airbus widebody jets and boeing narrowbody jets etc. Most airlines don't have an equal spread of A320/737's for example.

A good idea even when all planes are the same manufacturer is probably to not have all planes being the same model so they all get grounded in case of a discovery (An NG 737 is not the same as an older one which is not the same as a MAX etc)

Who here would fly on a Max 8? If not, why should Saudi buy them?

I have flown them many times and I'll fly them again as soon as authorities consider them safe to fly. I'm not going to be happy about the flight being operated with a MAX (as I was the last time) - but I also would never start trying to avoid MAX flights by buying more expensive tickets or flying more miles to reach my destination while avoiding a certain aircraft.

If anything, what I'll try to avoid is dodgy airlines, not dodgy planes (at least not ones from Boeing and Airbus). Most of the airlines I'll keep avoiding operate in places I likely won't fly anyway - such as some domestic russian flights.

I sure don't want to fly on one, and any company that buys Airbus planes instead of Boeing planes is more likely to get my business. As the article shows, numerous polls show I'm not alone in this sentiment.

Only if I had no other choice. When choosing my flights, I'd actively avoid the Max and if my flight was changed to use a Max, I'd look around for an alternative date or time.

I would fly on one. However since I fly mostly on delta its not likely that I will send up doing so.

It would be irrational not to. You're far more likely to die in a car accident.

"Saudi airline gives Boeing the chop"

this is the first instance of an airline publicly switching an aircraft order away from Boeing ... Airbus doesn’t have the production capacity to take much market share away from Boeing ... If this plane doesn’t start flying again before Christmas ...

It's not likely Boeing is going out of business. Is the purpose of articles like this to effect a wall street trader? Not into that personally, just wondering. Why is NBC putting pressure on Boeing? For the clicks?

> Why is NBC putting pressure on Boeing? For the clicks?

It's one of the cases where screwing up your product has consequences, even for a huge nation-state-backed duopolist. That happens so rarely it's newsworthy.

Well.... DUH! The stock hasn't been affected enough for the top management to feel the pain.

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