Evergreen International is now suing Boeing for canceling the Dreamlifter contract with bad faith and awarding it to Atlas Air, seeking damages for leaking proprietary information to the competitor and for lost revenue.

Link to the story:
http://www.newsregister.com/article/43814-evergreen+sues+boeing+federal+court

This is a continuation of the chain of events discussed in this thread:
Evergreen To Lose Dreamlifter Contract? posted by airtran737

[Edited 2010-04-04 08:09:22]

I think Evergreen has every right to seek compensation. It seems that Boeing did not act in good faith with Evergreen in respect to the Dreamlifter contract.

Good faith or not, I'm sure the contract as with all contracts had an established exit/termination clause which Boeing was free to exercise at its free will. As long as this was followed, Evergreen can pound sand.

So does Boeing own the dreamlifter? If so wouldnt it be cheaper for them to have their own flight crew to fly it?

Quoting KCMike (Reply 3): So does Boeing own the dreamlifter? If so wouldnt it be cheaper for them to have their own flight crew to fly it?

IIRC it's illegal in the US for a manufacturer to operate it's own carrier. Goes back to the 20's & 30's when Boeing owned Uniteds predecessor.

Quoting ZANL188 (Reply 4): IIRC it's illegal in the US for a manufacturer to operate it's own carrier. Goes back to the 20's & 30's when Boeing owned Uniteds predecessor.

Boeing was broken up through anti-trust laws into Boeing Aircraft, United Airlines, and United Aircraft, which later became United Technologies.

That said, Boeing could probably operate the plane for their own use, just as Airbus does with the Beluga, although according the Wikipedia, the A300-600ST is also available for charters. Either way, it probably is actually cheaper for a 'real' airline to operate the Dreamlifter than it is for Boeing to set up a dedicated operation.

Quoting BMI727 (Reply 5): That said, Boeing could probably operate the plane for their own use, just as Airbus does with the Beluga, although according the Wikipedia, the A300-600ST is also available for charters.

My understanding was that the FAA only certified the Dreamlifter to haul Boeing aircraft components and it cannot be used for any other purpose.

Quoting ZANL188 (Reply 4): IIRC it's illegal in the US for a manufacturer to operate it's own carrier. Goes back to the 20's & 30's when Boeing owned Uniteds predecessor.

But it's not a carrier. It's a manufacturer and that "carriage" is done for one customer. Can't the Dreamlifter be considered part of the manufacturing process?

Part of the equation that needs to be considered are flight crews ... Boeing has neither (other than flight test and for their corporate a/ps) and maintenance. While Boeing has huge spares stock and AOG repair capability, maintenance is not their field.

Atlas/Evergreen have both global crew positioning an maintenance facilities.
Evergreen did a satisfactory job, so there most be more to this, I believe previous threads covered the allegation that this was a payoff for the delay in the 747-8F... We can speculate all over the place and in the end that's all it will be - speculation.

A question might be will Evergreen lay off staff and will Atlas pick them up..

Quoting DocLightning (Reply 7): But it's not a carrier. It's a manufacturer and that "carriage" is done for one customer. Can't the Dreamlifter be considered part of the manufacturing process?

Essentially that's what occured. This from the LCF section of the 747 TCDS:

These airplanes are not approved for commercial freight hauling operations of material other than that
approved per Exemptions 8769 and 8769A. Only cargo that supports Boeing corporate lines of business is
allowed for carriage. The lower lobe cargo compartments are decommissioned and may not be used to
carry cargo.

Quoting LAXintl (Reply 2): Evergreen can pound sand

I love the term "go pound sand." I use it multiple times a week and the fact that you used it to express your opinion just made my day!

Quoting KCMike (Reply 3): So does Boeing own the dreamlifter?

Yes.

Quoting KCMike (Reply 3): If so wouldnt it be cheaper for them to have their own flight crew to fly it?

No.

Quoting ZANL188 (Reply 4): IIRC it's illegal in the US for a manufacturer to operate it's own carrier.

Generally true, but that breakup was aimed at commercial carriage, which this wouldn't be, so I suspect they'd be able to get it approved if they wanted to.

Quoting ZANL188 (Reply 6): My understanding was that the FAA only certified the Dreamlifter to haul Boeing aircraft components and it cannot be used for any other purpose.

It doesn't have to specifically be aircraft components, but it's highly restricted to only that stuff involved in doing Boeing business.

Quoting DocLightning (Reply 7): But it's not a carrier. It's a manufacturer and that "carriage" is done for one customer. Can't the Dreamlifter be considered part of the manufacturing process?

It still needs to be certified as something, and operated under some licence.

Quoting kanban (Reply 8): Boeing has neither (other than flight test and for their corporate a/ps) and maintenance.

Boeing has both non-flight test maintenance and flight crews. They're certainly capable of operating the Dreamlifter if they want to.

Tom.

Quoting tdscanuck (Reply 11): It doesn't have to specifically be aircraft components, but it's highly restricted to only that stuff involved in doing Boeing business.

See reply #9. I didn't research it further however FAA did list specific transportation and storage fixtures. Pretty safe bet that the TCDS, as it's written now, restricts the LCF to 787 components.

Quoting tdscanuck (Reply 11): It still needs to be certified as something, and operated under some licence.

Why? Unless there is a requirement specific to the LCF exemptions, all of the flights could be conducted under Part 91.

Now there are many reasons, as others have pointed out, that make it a better idea to have an established carrier operate it for you. Many companies do this with their business aircraft, it's called aircraft management.

Quoting tdscanuck (Reply 11): Boeing has both non-flight test maintenance and flight crews.

Yes they have a few which is insufficient to meet the flight needs of four of these birds supporting an accelerating production rate... I believe there is a loadmaster in each crew as well however I could be mistaken.. The point is Boeing is not staffed for this. There are times when contracting out is cheaper and this is one instance

Quoting kanban (Reply 14): Yes they have a few which is insufficient to meet the flight needs of four of these birds supporting an accelerating production rate... I believe there is a loadmaster in each crew as well however I could be mistaken.. The point is Boeing is not staffed for this.

At any given point, Boeing is flying and maintaining about 3 dozen aircraft of various types. Boeing Field has more than 150 maintenance staff alone. 4 Dreamlifters running at a relatively low flight rate is well within their capability. I agree with you that it's cheaper to outsource, but it's certainly not done because Boeing *can't* operate the Dreamlifters.

Tom.

Quoting tdscanuck (Reply 11): It still needs to be certified as something, and operated under some licence.

But Boeing flies aircraft all the time not on test flights and they have their own pilots, do they not?

Quoting DocLightning (Reply 16): But Boeing flies aircraft all the time not on test flights

Care to elaborate? Boeings flying is predominantly production flight test, with the occasional certification flight test program, and the darn near non-existent flight to an airshow or marketing effort.

Quoting BMI727 (Reply 5): That said, Boeing could probably operate the plane for their own use, just as Airbus does with the Beluga, although according the Wikipedia, the A300-600ST is also available for charters. Either way, it probably is actually cheaper for a 'real' airline to operate the Dreamlifter than it is for Boeing to set up a dedicated operation.

I suspect that Boeing feels that it works out cheaper for a cargo operator to operate the dreamlifters as a sideline than it would be for Boeing to have a dedicated operation. This is probably mostly due to the cost of flight crews; as (at least right now) the Dreamlifters are not busy enough to keep dedicated crews busy, and the cargo operators can utilize the crews flying other cargo during those times. But once 787 production gets in stride this may change. I'm not sure Boeing is right; they already own the planes, and if they really wanted to I'll bet they could operate them for less than Evergreen or Atlas would charge. I think they just don't want to be bothered.

Quoting tdscanuck (Reply 15): At any given point, Boeing is flying and maintaining about 3 dozen aircraft of various types. Boeing Field has more than 150 maintenance staff alone. 4 Dreamlifters running at a relatively low flight rate is well within their capability.

Keep in mind that everyone (flight crews, maintenance, etc.) is based in the Seattle area. If there were a problem anywhere else, there's no Boeing maintenance nearby, as a cargo operator would have (or a contract with a local maintenance service). Similarly, if a crew member can't make a flight for whatever reason, a cargo operator may have another nearby, whereas Boeing's are all in one location.

Quoting tdscanuck (Reply 15): Boeing is flying and maintaining about 3 dozen aircraft of various types. Boeing Field has more than 150 maintenance staff alone.

You are speaking of the delivery center... these are flight test crews and flight test mechanics supporting a/c deliveries and resolving flight squawks on new a/c. Those mechanics do not do major a/c maintenance. These crews are very busy today... so which customer does Boeing tell that there will be a delay in their delivery because the test crew is in Charleston and out of hours.

Boeing does not have idle manpower, yes we used to be called the "Lazy ", however those days are long gone.

Quoting airplanenut (Reply 19): Keep in mind that everyone (flight crews, maintenance, etc.) is based in the Seattle area. If there were a problem anywhere else, there's no Boeing maintenance nearby, as a cargo operator would have (or a contract with a local maintenance service).

No, they're not. Boeing has flight and maintenance people in Seattle, St. Louis, Wichita, Long Beach, Xiamen, and Chicago, to say nothing of the ~100 Boeing field service bases around the planet.

Quoting kanban (Reply 20): You are speaking of the delivery center... these are flight test crews and flight test mechanics supporting a/c deliveries and resolving flight squawks on new a/c. Those mechanics do not do major a/c maintenance.

When I said "Boeing Field," yes, I'm talking about the delivery center. However, the whole ton of the rest of them spread out around the planet do indeed do major aircraft maintenance. I've done on-site maintenance for customers more than once.

Tom.

Quoting ZANL188 (Reply 4): IIRC it's illegal in the US for a manufacturer to operate it's own carrier.

This is correct.
Boeing can operate their aircraft for test flights, ferry flights, delivery flights, etc.
They can repair the aircraft post test flight under the manufacturers certification.
Boeing AOG can repair and modify aircraft.
However none of this can be done in an air carrier role.
Evergreen had too and Atlas will have to acquire a New Aircraft Document Process from the FAA.
Atlas will have to add procedures to the manuals and also add the aircraft under a maintenance program.

Boeing does not have the capabilities as a manufacturer.
They are also barred from doing so under the law. The name alludes me at the moment - but it is something like the Air Postal Act of 1934.

Quoting nws2002 (Reply 13): Why? Unless there is a requirement specific to the LCF exemptions, all of the flights could be conducted under Part 91.

While Boeing could technically operate them under 91, and air carrier such as Evergreen or Atlas could not as that would be considered common carriage and require 121 rules.

Quoting 7673mech (Reply 22): However none of this can be done in an air carrier role. Evergreen had too and Atlas will have to acquire a New Aircraft Document Process from the FAA. Atlas will have to add procedures to the manuals and also add the aircraft under a maintenance program. Boeing does not have the capabilities as a manufacturer. They are also barred from doing so under the law. The name alludes me at the moment - but it is something like the Air Postal Act of 1934.

Evergreen nor Atlas has to go through the NAPD process since they already operate the 747. They are simply adding a derivative to their Op Spec so its not required. The NAPD process applies to adding a completely new aircraft type.

While I'm not familiar with the entire legal language of the what broke up Boeing, United Aircraft, and United Technologies in past history, I am fairly certain it was largely for anti-trust reasons for an aircraft manufacturer to also own a large air carrier. With that said, I would find it very surprised if the government would not let Boeing set-up a small 121 operation for the sole purpose of operating these aircraft if they chose to. I would also find it very hard to believe this would violate any anti-trust laws.

Quoting LAXintl (Reply 2): Good faith or not, I'm sure the contract as with all contracts had an established exit/termination clause which Boeing was free to exercise at its free will. As long as this was followed, Evergreen can pound sand.

This is exactly the case I am sure. I had to chuckle at the beginning of this thread as I am not surprised given what I know of Evergreen and their reputation. I'm sure Del Smith had a fit when he heard this, fired a few people to calm himself down, then adamantly demanded his lawyers initiate the suit whether they had a case or not.

Well, my friends, I read the complaint, because that, of course, defines the lawsuit.

Evergreen's basic story is: (1) the contract automatically renews after 5 years unless it is terminated for cause, for "convenience", force majeur or termination of the 787 program; (2) the contract actually contains a specific good faith provision, as well as an incorporation of Boeing's code of conduct, which has all sorts of happy language about being good to each other; (3) the contract has no provision requiring Evergreen to participate in any transition to a new operator; (4) the contract protects Evergreen's proprietary information and trade secrets; (5) Evergreen invested a lot of time and money setting up the system by which all the logistics happen, including training and procedures for the operation of all the specialized ground equipment; (6) Boeing asked for a lot of Pratt engine program and detail information under the guise of an "audit", which they then, apparently undisputedly, gave to Atlas, which doesn't have any Pratt engines in its fleet, thus handing over proprietary Evergreen stuff, and now has asked for more; (7) Boeing consistently told Evergreen that it was doing a great job; (8) Boeing admitted that it was not terminating for any contractually-specified reason, but instead that it was doing so because it had a billion in obligations to Atlas, and this was part of the settlement with Atlas; (8) it was a "done deal" and there was no way around it for Evergreen; (9) Evergeen only gets paid for hours flown, and expected to get back over subsequent years all the training and stuff that they had expended during the period when the production delays cheated them out of flying hours and now that things are finally ramping up they are being screwed.

It's a pretty good story, actually. We'll see what Boeing has to say.

Maybe inappropriate for this thread, but I was wondering:

Over the course of 787 production the next decades or so, will the Dreamlifters build enough hours to require in depth inspections like C or D checks? Does Evergreen or Atlas or whoever has the contract at the time they come due have the ability to do these checks? And how would it effect production if a plane is taken out of the cycle for any given length of time?

Quoting wjcandee (Reply 25): Well, my friends, I read the complaint, because that, of course, defines the lawsuit.

Thanks!

Quoting wjcandee (Reply 25): It's a pretty good story, actually. We'll see what Boeing has to say.

Very much agreed. This is going to be interesting!

PS I have a pdf of the Complaint if anyone wants to read it. Email or PM me.