Atlas underbids Evergreen for future dreamlifter operation

[B-HKD]

Rumor is that the contract comes due every couple of years and Atlas underbid Evergreen this time round. Atlas 747 dreamlifter ops. to start this summer.

I thought Evergreen owns the now 4 dreamlifters?

anybody with some info. on this?

[NZCHOOVERBOY]

Boeing owns them all. According to Wikipedia: "The LCF is not a Boeing production model and will not be sold to any customers or see any airliner operation, and will be for Boeing's exclusive use.

[WhaleDriver]

Rumor is that the contract comes due every couple of years and Atlas underbid Evergreen this time round. Atlas 747 dreamlifter ops. to start this summer.

Interesting that you assume it was underbid by Atlas. MANY factors involved, like Del Smiths age, the financial stability of Evergreen, the fact that Boeing is in a bind with the -8's being late. That's just the things we see on the surface, no telling what could be going on behind the scenes at Evergreen that made this happen, if it is indeed, true.

[Zoner]

Evergreen has been underbid on the LCF contract. It has not been announced by whom, only that we have been underbid. As WhaleDriver said many factors were involved but the big one usually is money. It is interesting to note that Evergreen was the only subcontractor on the 787 program to be up and running on time and staying on time for the last three years. We are being told that our performance was exemplary and did not contribute to losing the contract.

[sidman]

I don't think it has anything to do with Smiths age..There are alot of things going on and we will see what the real reason is in the next few months. I hear Smith is going to chat with Boeing in the coming weeks. And in 5 years the contract is up for review again.

[Po Boy]

Atlas underbid Evergreen, you got to be kidding :}

I think Atlas' overhead and crew costs are way more than Evergreen's, I believe it might have something to do with the -8's

There is still no official announcement yet, so it is still only a rumour :cool:

[GG747]

I really can't believe ATLAS or anyone else underbid Evergreen. Evergreen's costs are lower than most cargo operators. I think the real reasons could be complicated and most likely are tied to the B747-8.

[WhaleDriver]

I hear Smith is going to chat with Boeing in the coming weeks.

If I were Boeing and Del showed up, my first question would be " And Mr. Smith, just how many $100 Million airplanes have you bought from us and how many -8's can we sign you up for?"

[Deltabravowhiskey]

If I were Boeing and Del showed up, my first question would be " And Mr. Smith, just how many $100 Million airplanes have you bought from us and how many -8's can we sign you up for?"

Not likely to be the case but don't think for a second that Boeing does not appreciate the 24 orders on the books worth $7.8 Billion in new aircraft.

Privately held companies can't offer the stability and resources those companies like Atlas can. Atlas has a crew force rated and trained on the -400/-8 ready to go. Integrating (4) more -400s to the Atlas operation under a "CMI" contract in the greater scheme of things actually reduces the operating costs of Atlas thru greater economies of scale.

What it comes down to is that Atlas can staff a -400 for about the same price as staffing a corporate G-IV.

[shittykitty]

there's a big difference in ordering airplanes and paying for them. Evergreen has its problems but we have never went into bankruptcy and stiffed all our creditors. that's not to say we don't stiff our ventures, i'm sure we do.
when was it that Atlas got out of bankruptcy? i heard atlas owes Boeing a ton of money and this contract is part of the pay off

[WhaleDriver]

Integrating (4) more -400s to the Atlas operation under a "CMI" contract in the greater scheme of things actually reduces the operating costs of Atlas thru greater economies of scale.

This applies if Atlas can convince Boeing to drop the requirement for dedicated crews. You are correct, if the crew can climb down from a -400 at CHS and the next day fly the LCF.

[Zoner]

Dedicated crews are the tip of the problem. Boeing wants true 24 hour reserve crews so they can do last minute scheduling. Trips are scheduled when the the product is ready and they usually don't know until the last minute. Unless Boeing backs off that requirement I doubt there is any way to integrate LCF flying with line flying.

[TimeOnTarget]

Atlas as usual is a last minute jump through hoops kind of operation. They will eat that up with a big spoon!!!

[Po Boy]

Any Evergreen guys here can tell me the normal schedule for the LCF's, how many are currently flying and what destinations?

[sidman]

There are 4 LCF's PAE/NGO/CHS/TAR...They also tech stop in PIK and ANC from time to time.

[Po Boy]

Sidman............Thanks! :ok:

[Intruder]

Dedicated crews are the tip of the problem. Boeing wants true 24 hour reserve crews so they can do last minute scheduling. Trips are scheduled when the the product is ready and they usually don't know until the last minute. Unless Boeing backs off that requirement I doubt there is any way to integrate LCF flying with line flying.
I see no reason NOT to integrate them!

With a -400 qualified crew force of a sufficient size, the reserve requirement can be met just like any other reserves. We do it seasonally for FedEx and/or UPS contracts as well as routinely for normal ops.

I suspect Atlas has enough pilots living around PAE and CHS to sit "ready reserve" without breaking a sweat. International reserve is well known to many of us as well...

[GG747]

The Dreamlifter and the total operation is a whole new animal. If you guys get the Dreamlifter you will see what I am talking about. For now I will keep my mouth shut about the other aspects to getting this Giant moving.

More to the story than just having -400 pilots ready to fly! Good luck and I hope the learning curve will be fast. :ugh:

[Po Boy]

Something big is happening, company just announced recalls and hiring! :ok:

[Uncle Wiggily]

Hi,

If there are any Atlas pilots reading this thread, can you please send me PM. I desperately need to ask a quick question. Don't worry, I'm not looking to get into some ridiculous discussion about contracts. I would sincerely appreciate it. Thanks!:ok:

[Sleeping Freight Dog]

Its official now, here is the link on Market watch:

http://www.marketwatch.com/story/boe...am-2010-03-04?reflink=MW_news_stmp

[Zoner]

Thursday, March 4, 2010 - Page updated at 05:16 PM

Boeing switches operators for its Dreamlifter fleet

By Dominic Gates
Seattle Times aerospace reporter
Boeing is transferring the contract to operate its four Dreamlifter super-freighters from Oregon-based Evergreen International to New York-based Atlas Air.

The contract switch is a blow to Evergreen, which employs about 75 pilots, mechanics and ground crew directly operating the Dreamlifters. It employs a further 200 people in support positions on the program, about half of those at its maintenance base in Arizona and the other half at its headquarters in McMinnville, Ore.

Atlas is an important air cargo customer for Boeing, with a dozen of new 747-8 freighters on order.

The Dreamlifters, giant air transports used to ferry large sections of the 787 around the globe, are used 747s that are modified for Boeing in Taiwan. The upper fuselage is replaced by a bulbous crown to accommodate the 787 fuselage sections that must fit inside.

Evergreen was selected to operate the Dreamlifters for Boeing in 2005, with a contract renewable every five years. Since the first one flew in 2006, it has provided flight crews and maintenance for the jets.

But Atlas announced Thursday that it will take over the operation of the Dreamlifters in a new nine-year contract that begins in September.

Tim Wahlberg, chairman of holding company Evergreen International Aviation, said his company was formally informed of the contract loss Wednesday.

"We're very disappointed," said Wahlberg. "We ran a perfect operation. We're very price competitive. We believe (the switch) was unrelated to our operation."

Wahlberg said Boeing told Evergreen the contract was being switched after a review of "best value." But he said Evergreen was never given the chance to rebid the contract against Atlas.

The switch may involve Atlas's pending order with Boeing for twelve new 747-8 cargo planes. Because of a severe contraction in the air cargo market over the last couple of years, Boeing has been negotiating intensely with the initial customers, including Atlas, to reschedule deliveries.

Under the agreement with Atlas, Boeing retains ownership of the four Dreamlifters and will pay fuel costs for the 787 transportation trips.

Wahlberg said taking over the operation means Atlas will have to train pilots on the ungainly Dreamlifter's flight characteristics, and bring ground-handling and maintenance crews up to speed on its unique configuration.

Dominic Gates: 206-464-2963 or [email protected]

Copyright © The Seattle Times Company

[Zoner]

Boeing yanks big Evergreen contract
Business | Sat, 03/06/2010 - 12:05 pm | Read 1120 | Commented 4 | Emailed 0

By Nicole Montesano

McMinnville’s Evergreen International Aviation has lost a large, lucrative and prestigious piece of business to arch-rival Atlas Air — its long-term contract with Boeing to fly 787 aircraft assemblies across the ocean for final assembly domestically in a fleet of Dreamlifter super freighters.

Boeing has informed Evergreen that it plans to shift the Dreamlifter contract to New York-based Atlas when Evergreen’s five-year deal expires in September. Chairman Tim Wahlberg said Evergreen was given no reason, no prior notice and no opportunity to submit a rival bid.

Wahlberg said Evergreen had “bent over backwards to make sure there was not one flaw in this program,” which was still in test mode, due to repeated slippage in Boeing’s 787 production schedule.

“We have eaten costs as a result of that,” he said. “We’ll continue to run a perfect program, but, yeah, it just doesn’t go down real well.”

Wahlberg said the job was expected to run about 35 years. He said the contract was subject to renewal every five years, but Evergreen had been given no reason to think the review would be anything but routine.

Loss of the contract puts a number of jobs at risk, he said. Some 75 pilots, mechanics and ground handlers are assigned directly to the Boeing program, he said, and another 200 or so have some level of supporting involvement.

According to the Seattle Times, Atlas may have enjoyed a piece of special leverage in wresting the contract away from Evergreen — its pending order with Boeing for 12 new 747-8 cargo carriers. The Times reported: ”Because of a severe contraction in the air cargo market over the last couple of years, Boeing has been negotiating intensely with the initial customers, including Atlas, to reschedule 747-8 deliveries.”

Boeing has fitted four 747 cargo carriers with greatly enlarged fuselages. That enabled the planes, which it has dubbed Dreamlifters, to ferry large pieces of its next-generation 787 airliner from initial assembly plants in Italy and Japan to final assembly plants in the U.S.

Evergreen was elated when it submitted the winning bid for the business in 2005. It has been working closely with Boeing on the project ever since — and very successfully, by its account.

Wahlberg said Boeing had regularly praised Evergreen for the job it was doing. He said there were no reports of problems.
“We were on time all the time,” he said. “We ran a perfect operation.”

In November, he said, Boeing notified Evergreen that it was undertaking an evaluation of the operation that was just standard procedure, thus nothing to worry about.

“Then, about a month ago, they said were looking more seriously at how to reduce cost, how to get best value, and they were possibly looking at some sales, or going to a third party, or possibly using Evergreen,” Wahlberg said. “So then we’re starting to get a little shaky.

“We said, ‘Wait a minute. Make sure you give us ample notice to bid on renewing the contract.’”

Instead, he said, “Last week, we got a call from this gentleman from Boeing,“ terminating the deal. “That leads us to believe the award was totally unrelated to the operation that we’re running.

“We don’t know the facts. We thought would be nice if Boeing would have explained the facts to us. I don’t know what to say.”

Wahlberg said it was too early to say whether Evergreen would be able to find new work for affected employees or have to resort to layoffs.

“The job continues until the end of September, so we don’t have to figure that out today,” he said. “I hope we can further employ these people doing something else.”

But he said, “It really puts us in a bad position. So to say we’re disappointed, absolutely.

“And we’re really disappointed that Boeing hasn’t come clean on what the deal is. It kind of hurts our reputation.”

However, Wahlberg denied an anonymously sourced report in the Times that Evergreen was trying to sell the airline and aircraft maintenance arms of its business to reduce debt. He also challenged a December analysis in which Standard & Poor’s urged that kind of action.

The bond-rating agency concluded Evergreen’s “extremely limited liquidity position” left it “highly vulnerable to unexpected profit pressures.” For that reason, it recommended the company sell off assets to trim its debt load.

Wahlberg countered, “Evergreen is really in an excellent position.”

It is not planning to sell off assets. In fact, it is laying aggressive plans to acquire new ones, he said.
“S&P, they don’t really understand our business,” Wahlberg said.

Unlike other air cargo companies, many of which are experiencing financial troubles, Evergreen is doing well because it is able to make its flights do double duty. It is able to pick up a paycheck both coming and going, he said.

“We take military freight outbound, to the Middle East primarily, to Iraq and Afghanistan, and then position ourselves into China,” he said. “We bring cargo from China to the U.S., primarily to Chicago and the New York area.”

Wahlberg said the company’s airline “has got more work than we have aircraft to provide services for.” In fact, it is planning to pick up a used 747-400 freighter in Singapore next month, and to add three Air France BCFs to its cargo fleet later this year.

He said Evergreen’s helicopter division is also poised for expansion. “Our plan is to grow 15 percent a year, in spite of what goes on,” he said.