Developments in the aerospace industry are falling by the wayside because of the coronavirus outbreak’s huge impact on the sector: US planemaker Boeing has abandoned international joint venture plans while European rival Airbus has nixed a project aimed at producing electric-powered aircraft.
Boeing said on Saturday (25 April) it had cancelled plans to create a multi-billion dollar tie-up with Embraer, insisting that the Brazilian firm “did not satisfy the necessary conditions” by the 24 April deadline date.
The $4.2bn joint venture was meant to help Boeing tap into more of the small jet market and increase production capacity. Embraer had hoped to take the fight to its own market rival, Canada’s Bombardier, which recently joined forces with Airbus.
Boeing’s senior vice-president, Marc Allen, said in a statement that “it is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA [agreement] is not going to resolve the outstanding issues.”
Embraer immediately hit back with its own statement, insisting that Boeing had “wrongfully terminated” the deal and “manufactured false claims” in order to get out of paying the purchase price.
The Brazilian jet-maker also cited Boeing’s “financial condition” and hundreds of billions of dollars in lost revenues as a result of the MAX plane scandal, which involved two fatal crashes and a worldwide grounding of the stricken aircraft.
The Brazilian company said that it will “pursue all remedies” to recoup damages.
Coronavirus has slashed air travel demand and pushed several airlines to the brink of bankruptcy. That situation has reflected on the order books of every planemaker and put future deliveries in serious doubt.
Neither aerospace company explicitly mentioned the virus outbreak’s impact in their respective statements but industry analysts are in no doubt that the pandemic was the straw that broke the already-struggling firm’s back in this case.
According to Boeing, every regulatory authority apart from the European Commission had given its blessing to the Embraer merger, suggesting that the ongoing probe into its plans had played a part in its decision to cut the cord.
But EURACTIV understands that the competition services were still looking into the tie-up and that neither Boeing nor Embraer had officially notified the Commission of its cancellation.
The Wrong Brothers
Boeing’s European rival, Airbus, has also made a drastic change in course in order to adapt to the new virus-induced situation. On Friday (24 April), the firm said it would shelve a project aimed at powering aircraft engines by electricity.
The E-Fan X demonstrator plane was due to make its maiden flight next year and show that hybrid power is a realistic option for commercial jets, making a dent in aviation’s growing carbon footprint.
But Airbus and engine-maker Rolls-Royce said their joint decision to nix the programme was necessary in order for the plane-builder to “navigate the realities” created by coronavirus.
The aerospace giant has already cancelled plans to open a new assembly line for smaller aircraft at its Toulouse headquarters, while its ambitions of setting up a lucrative second-hand market for the A380 super-jumbo have also been dealt a blow.
Rolls-Royce, meanwhile, has been busy lending its manufacturing know-how to the UK’s efforts to increase the number of ventilators, after the British government called on its top firms to help boost healthcare capacity.
Chief technology officer Grazia Vittadini insisted that Airbus had learned a lot from the E-Fan X experience, including breakthroughs in battery development and overcoming regulatory barriers.
Rolls-Royce’s Paul Stein said industry interest in the endeavour is still encouraging but acknowledged that pushing forward with a maiden flight “is not critical at this time”.
“Although our programme with Airbus concludes, we are planning that our power-generation system ground testing will complete, allowing us to demonstrate the technology and capture all the lessons,” he concluded.
The move suggests that the aviation industry will use the virus-crisis as a reason to pursue even more-efficient plane designs and accelerate the development of cleaner fuels, rather than completely revolutionise how jets take to the skies.
[Edited by Zoran Radosavljevic]