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:: Comments to Bloomberg on Sonic Cruiser ::

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Boeing's Fast Jet May Be `Artificial, Calculated,' Says Analyst
2001-04-03 13:40 (New York)

Washington, April 3 (Bloomberg) -- Boeing Co.'s proposed fast
jet may be an ``artificial and calculated attempt'' to hurt sales
of Airbus Industrie's new 550-seat plane, said an analyst, who
questioned Boeing's ability to build the new aircraft.
The Seattle planemaker last week shelved plans to offer a
larger 747 to challenge Airbus's A380 so it could focus on
developing a twin-engine aircraft that could fly at speeds of up
to 700 miles per hour, 20 percent faster than current jets.
Richard Aboulafia, director of aviation at the Teal Group, a
consulting company in Fairfax, Virginia, said that costs increase
``geometrically, not incrementally,'' as airplanes approach
supersonic speed, and questioned whether Boeing has developed
technologies to let it build a fast plane at reasonable costs.
``Boeing claims that it has identified several technologies
that will allow the new planes to be only slightly more expensive
to build and operate than the current generation of subsonic
planes,'' he wrote in a monthly letter to clients. ``But when did
they identify these technologies?''
Boeing's research and development spending has declined in
recent years, and it's difficult to believe that the company has
had ``groundbreaking research,'' Aboulafia said.
A Boeing spokeswoman said Aboulafia's opinions were his own.
``We have been working on ways to improve our design and
manufacturing process,'' said Boeing spokeswoman Susan Bradley,
adding that the company is confident it has developed the
requisite technologies for the plane.

New Engines

Aboulafia said a key to the new plane is its engines and he
questioned whether current turbofan technology is adequate for
high-speed, high-altitude flight.
Engine makers, including General Electric Co. and United
Technologies Corp.'s Pratt & Whitney unit, have been working with
Boeing, though it's too early to tell what the requirements for an
engine for the new plane will be before starting an engine design,
they said.
``Pratt & Whitney, along with other engine manufacturers,
have been in discussions on the Sonic Cruiser concept,'' said
Pratt spokesman Mark Sullivan. ``But it's very early in the design
process, so all the requirements are not clearly defined at this
point.''
General Electric spokesman Rick Kennedy said the biggest jet-
engine maker needs to assess the requirements, including range,
weight, noise and emissions.
Rolls-Royce Plc spokesman Martin Brodie said the company
considered it ``very early days'' on the proposed fast jet.
Last month, Airbus executives said that aircraft flying at
close to supersonic speeds would burn up between 40 percent and 50
percent more fuel per flight than current commercial aircraft,
which fly at around 0.86 Mach, or 86 percent the speed of sound.

Development Costs

Some analysts estimated the cost of developing such a plane
at around $10 billion.
Airbus and partners are spending around $11 billion to
develop the 550-seat A380, which begins service in 2006. Airbus
has 62 orders for the plane. Boeing talked to airlines about a
possible, larger version of its 420-seat 747-400, though it failed
to attract any customers.
``This whole effort could easily be a calculated and
artificial effort to hurt the A380,'' said Aboulafia. ``Boeing's
announcements, disingenuous or not, could be devastating to
Airbus. Even if there's only a 10% chance that these planes will
materialize, that's an unpleasant level of risk for anyone
involved in building, financing, or buying the A380. It is now
incumbent upon Boeing to show us proof of its research.''
European Aerospace Defense and Space Company owns 80 percent
of Airbus. BAE Systems Plc owns 20 percent.
EADS shares fell 38 euro cents, or 1.8 percent, to 20.41
euros in Paris. BAE shares fell 5.5 pence, or 1.7 percent, to
322.5p in London, while Boeing fell 17 cents, or 0.3 percent, to
$54.85 in New York.

--Andrea Rothman in Toulouse, France (33 5 6365 7668) or
arothman@bloomberg.net and Rachel Layne in Boston through the
Frankfurt newsroom with reporting from Jonathan Berr in Princeton
/djs
 

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