Farnborough does little to relieve 777 Classic, A330ceo production gap issues

The orders and commitments announced by Airbus and Boeing at the Farnborough Air Show last week for the A330ceo, the A330neo, the Boeing 777-200LRF and the 777-300ER will help fill the looming production gaps for the two airplanes, but work by both OEMs still needs to be done.

See the production gaps, before the orders and commitments were announced, by clicking the following links:

Airbus A330 delivery schedule, 2015-2020

Boeing 777 delivery schedule 2015-2020

A330/777 backlog comparisons

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Odds and Ends: CSeries schedule; BBD and Russia; MH370

CSeries schedule: An intriguing news item came out of Russia this week concerning the Bombardier CSeries. Lessor Ilyushin Finance Co., which has more orders for the CSeries than any other customer except Republic Airways, claims (according to the article) that BBD sweetened the terms of the final contract following the engine incident in May that results in a grounding of the test flight during the investigation and fix.

The issue was tracked to a faulty oil seal. The fix, according to our sourcing, is relatively easy and straight-forward, but Transport Canada hasn’t green-lighted a return of the test fleet to service yet, and it still may be a few more weeks before it does, we’re told.

BBD maintains that it still plans first delivery in the second half of 2015, but we’re also told all the schedule margin is now gone. And here’s where we get to the heart of the IFC news report.

According to Russian Aviation, IFC has rescheduled deliveries from November 2015 to April 2016, a five month shift to the right. There is no indication, although it is inferred, if this is reflective of a new program delay–or whether this is a rescheduling at IFC’s preference.

  • Bombardier announced a reorganization that saw the retirement of Guy Hachey, president and COO of the Aerospace division. Another 1,800 employees have been laid off as well. BBD continues to burn through cash as delays in the CSeries program mount up.
  • A source familiar with the CSeries flight testing program thinks the flight testing should resume in August.

Bombardier and Russia: More from Russia: The Toronto Globe and Mail reports that Bombardier’s plan to open a Q400 assembly line in Russia has stalled over the crisis in Ukraine.

Boeing and Russia: Boeing has close ties to Russia for its commercial aircraft division, relying on Russia as a large supplier of titanium. The Ukrainian fighting was already affecting the supply chain. The Puget Sound Business Journal has this explanation.

MH370: While the world is focused on Malaysia Airlines flight MH17, Runway Girl Network has an intriguing piece about MH370, the Boeing 777 that disappeared five months ago. She has a video about access to the electronics bay on the 777, a topic that we discussed at the height of MH370′s disappearance. RGN’s article explains the concern as well.

Regional Airline pilot sickout: A campaign is underway to have a US pilot sick-out Sept. 1-5 for regional airlines.

Analysts split on Boeing 2Q earnings

Aerospace analysts split in their reaction to Boeing’s second quarter earnings. Many were upbeat on the commercial aircraft results, while others didn’t like the higher-than-expected, continued deferred expenses for the 787 program and a big charge on the KC-46A program.

Bloomberg News was quick to point to the KC-46A program charge and the implications that this is yet another costly new airplane program for Boeing.

Traders didn’t like the news, either, with stock falling more than $3 despite higher profits for the period and higher profit guidance going forward.

The Bloomberg article cites several analysts who didn’t like elements of the earnings report.

Here are initial notes, pre-earnings call, based on the press release:

 

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Odds and Ends: Hawaiian orders A330-800, drops A350-800; A330neo market potential; Engines and Airbus

Hawaiian Air’s A350-800s: Hawaiian Airlines July 22 ordered six Airbus A330-800s and simultaneously dropped its order for six A350-800s. HA also took six purchase rights for the A338. Deliveries begin in 2019.

The A338 is slightly smaller, nominally at 252 seats, and has somewhat less range at  7,600nm than the 276-seat, 8,250nm A358, but only Hawaiian knows how much it needed the extra range. Losing the extra seats does give HA a hit to revenue potential, however. For wide-body airplanes, Airbus says each seat has the revenue potential of $2m/yr.

Offsetting the revenue loss is a far lower capital cost for the A338 vs the A358. Our economic analysis, based on technical specifications estimated before the Farnborough Air Show and before Airbus revealed data for the A338, showed the A338 pretty close to the A358 on a pure operating cost basis, not including adjustments for capital cost.

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Odds and Ends: Some FAS leftovers–a big CSeries order?; EMB lands 60; and more

Farnborough Air Show leftovers:

Big CSeries order coming? Flight Global reports that lessor Macquarie Airfinance is about ready to sign a deal for 50 Bombardier CSeries. If true, this would be a major departure for the lessor, which historically hasn’t placed speculative orders–and it would be a major boost for Bombardier. The Flight Global report doesn’t say if this would be 50 firm or a combination of firm and options. BBD and MAF didn’t comment for Flight. We reached out to MAF and received this response:

“The Flightglobal release was concocted on a rumour and we don’t comment on rumours. You know how it is with lessors. We’re constantly considering every aircraft type that could provide us with value-adding opportunities.”

Bombardier has been selling the CSeries in small numbers, often to second or third tier, and even start-up carriers, a path Boeing took in the early days of the 737-200 program. Airbus relied heavily on lessors for early A320 orders. Boutique lessor LCI was a launch customer for the airplane, and Falko Regional Aircraft Leasing became a customer at FAS.

BBD now has 513 orders and commitments for CSeries.

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Airbus A330-800 and -900neo, first analysis, part 3: performance

In our first two parts of the analysis of the Airbus A330neo launch at the Farnborough Air Show, we have gone through the information provided by Airbus and Rolls Royce and provided comments on what these really mean from a practical point of view.

Areas we wanted to verify with our independent model have been how the A330neo would perform versus the A330ceo, especially on shorter ranges, than the Airbus example of 4,000nm and how it would stack up against the Boeing 787.

We give the first answer to these questions with data from our proprietary, independent model. This is first-cut data and we bring it forward in time as there is some confusion on what Airbus has said about the shorter range performance of the A330neo. Continue reading

Ukraine claims Malaysian airliner shot down over air space–(Update)

Update, 1:10pm PDT: Jon Ostrower of The Wall Street Journal Tweeted that US intelligence officials confirm a SAM was fired at MH17; details to follow at The WSJ.

Photo via CNN, apparently showing MH17 falling from the sky.

Malaysian Airlines Boeing 777 (flight MH17) has crashed in Ukraine and government officials claim the airplane was shot down. As yet, this appears to be unconfirmed.

We’ve already been asked for our reaction. Here’s our statement.

“It’s hard to have a reaction within minutes of the first reporting. Reports claim the airplane was shot down, but has this been confirmed? Reports say the airplane was at 10,000 meters (roughly 33,000 ft), and cruising altitude, in-flight break-ups due to something wrong with the airplane are highly, highly unlikely, certainly suggesting an “outside force” may have been involved. But until a shoot-down is confirmed, the only reaction can and should be prayers for the victims.”

Here’s what will happen next, aside from the emergency response to the crash site:

  • Given the allegation of a shoot-down, efforts will be made to confirm this as soon as possible.
  • Flights may be rerouted as a precautionary measure until the shoot-down is affirmed or discounted.
  • Investigators will consider (in no particular order):
  1. Shoot down;
  2. Sabotage;
  3. In-flight break up due to structural issues;
  4. Mechanical issues;
  5. Weather conditions; and
  6. Crew condition, among other things.

These are, except for #1, standard areas of investigation.

 

Farnborough Air Show, July 17: Orders summary, reflections of the show

Orders continued to trickle in as the Farnborough Air Show winds down (there could be others not listed here).

  • Airbus: Transaero, LOI for 12 A330neos and eight A330ceos; Hong Kong Aviation Capital firms up an order for 40 A320neo and 30 A321neo aircraft, announced at the Paris Air Show last year. Here is the Airbus wrap up press release.
  • Boeing: Summarizes its performance at FAS with this press release; 201 orders and commitments.

Items of interest:

Overall reflections:

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Farnborough Air Show, July 16: Orders Summary

Here are the orders we’ve seen for today (there could be more); this should pretty well do it for the show, though it does continue through Friday and there probably will be a few more deals:

  • Airbus: Air Mauritius, MOU for four A350-900s.
  • ATR: Myanma Airways, six ATR 72-600s with options for six.
  • Boeing: After saying he was in no hurry to finalize the 777X orders, U-Turn Al (Akbar Al-Baker) did just that–Qatar Airways signed the contract for the 50 announced at the Dubai Air Show last November, with 50 options; Qatar also orders and options eight (4+4) 777Fs; Hainan Airlines, MOU for 50 737-8s; MG Aviation Limited, two 787-9s; Air Algerie, two 737-700Cs.
  • Bombardier: Nok Air converted two previously held options to firm orders for the Q400; Unidentified commitment from an existing customer for five CSeries; Unidentified order for seven CS300s and added six options; now at 513 orders and commitments.
  • CFM: 80 LEAP-1A engines (for A320neo) from Mexico’s Interjet.

Items of interest:

  • Ready for a 12 hour flight in the Bombardier Q400 turbo-prop? It will soon be available. Marshall Aerospace sent us this press release:
    Auxiliary fuel tanks for Bombardier Q400: Marshall Aerospace and Defence Group and Bombardier Aerospace are developing an External Auxiliary Fuel System solution for the Bombardier Q400 turboprop aircraft.The solution, which will be available as an official Bombardier option, will provide up to an additional 10,000lb of fuel in two external pannier tanks allowing the aircraft to fulfill a whole range of missions requiring additional range and endurance, allowing this turboprop platform to be able to sustain operations of up to 12 hours.
  • Although Airbus CEO Farbice Bregier said “no” to an A380neo, reported in The Seattle Times and linked by us earlier, today Aviation Week quotes Airbus COO-Customers John Leahy as saying a decision on the A380neo will come next year–which supports our commentary that we didn’t believe the A380neo issue is dead. Airchive reports that A350 chief Didier Evard hasn’t ruled out an A350-1100, either, just as we also noted in our commentary.
  • GE wanted to be the sole source on the A330neo, reports Aviation Week, which also explains why Airbus chose Rolls-Royce.
  • Flight Global has this story explaining how Airbus plans to be “weight neutral” for the A330neo vs the A330ceo.

Farnborough Air Show, July 16: MRJ program analysis

After a long drought of orders or even LOIs and MOUs, the Mitsubishi MRJ program saw some life at this Farnborough Air Show.

Sales of Japan’s first commercial airplane since the propeller-era’s YS-11 stalled with orders from SkyWest Airlines, Trans States Airlines and Japan’s ANA.

But at the FAS, Mitsubishi announced an MOU with Eastern Air Lines, a US start-up carrier, for up to 40 and a much smaller order for six from Air Mandalay.

The Eastern MOU can fairly come under scrutiny if for no other reason than the company is a start-up. Little is known about its financial fund raising and the business model–to begin as a charter airline and transition to a scheduled carrier in the highly competitive US Southeast–doesn’t instill a lot of confidence. EAL, named after the old trunk carrier that went out of business in 1991, has also ordered the Boeing 737-800 after initially announcing plans to begin service with the Airbus A320.

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