Mitsubishi Regional Jet, MRJ, compared with second generation regional jets, Part 2.

By Bjorn Fehrm

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Introduction

04 Aug 2015, © Leeham Co.: Yesterday we started our deeper look at Mitsubishi Aircraft Corporation’s new MRJ90 and compared it with one of the aircraft that it aspires to replace, Bombardier’s (BBD) CRJ900. We outlined similarities and differences in architecture, dimensions, weights and payload capabilities.

We will now finish the analysis with a study of the fuel consumption performance of the two aircraft on a typical regional route network. Finally, we will discuss at what net price a MRJ90 would be motivated against the incumbent regional aircraft CRJ900 from BBD.

Summary:

  • The MRJ’s more efficient engines and more modern wing gives it a lower fuel burn than CRJ900.
  • A lower fuel cost can be compensated with a lower purchase price. We check at what value the per seat mile operating cost of the aircraft would be the same.

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Mitsubishi opens Seattle Engineering Center ahead of MRJ90 first flight

MRJ90 Timeline

The MRJ90 testing and entry into service timeline. Source: Mitsubishi. Click on image to enlarge.

August 3, 2015, © Leeham Co.: Mitsubishi Aircraft Corp. today opened its Seattle Engineering Center jointly with local company AeroTEC in advance of the first flight of the MRJ90 in September or October. During the second quarter of next year, four of five MRJ Flight Test Vehicles will be domiciled in Moses Lake in Central Washington for the bulk of the flight testing over the following year. Entry into service is planned for 2Q2017 with launch customer All Nippon Airways.

The engineering center represents the first in Washington State for an aircraft OEM other than Boeing. Mitsubishi will assign 50 engineers from Japan to the new SEC, in South Seattle a short distance from Boeing Field. One hundred engineers will be hired locally.

AeroTEC and Mitsubishi began discussing working together only last January, said president Lee Human, who added that the seven months from January to the opening of the SEC today was remarkable for the speed in which negotiations, contracts, permits and hiring was achieved.

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Pontifications: Mitsubishi nears first flight for MRJ-90

By Scott Hamiltn

By Scott Hamilton

Aug. 3, 2015, © Leeham Co. Mitsubishi is just a few months away from beginning flight testing on the first commercial airplane designed and built in

Japan’s first commercial airliner after World War II was the YS-11 turbo-prop. Photo via Google images.

Japan since the NAMC YS-11 in the 1960s.

The 60 passenger turbo prop had its first flight in 1962 and entered service three years later with ANA. Only 182 were built, and it had a surprisingly wide customer base in the primary and secondary markets. Google images has a nice montage of the operators, which spanned the globe.

Japan’s first commercial airliner since the YS-11 is the MRJ-90 by Mitsubishi. Photo via Google images.

The Mitsubishi MRJ 90 as yet doesn’t have wide acceptance. There are about 200 firm orders and about an equal number of options, but the customer base is thin: 100 of the orders and 100 of the options come from the USA’s SkyWest Airlines and 50+50 are from the USA’s Trans States Airlines. All Nippon Airlines orders 15 and Japan Air Lines ordered 32. Air Mandalay ordered six and the new Eastern Airlines, a start-up carrier, ordered 20.

And that’s it.

The MRJ is a 2×2 passenger cabin configuration with comfortable 18-inch wide seats. The passenger experience should be similar to the Embraer E-Jet that’s been in service since 2004 and better than the Bombardier CRJ Series, which is a cramped cabin.

The MRJ is two years late. The first flight is now scheduled for October and entry-into-service in 2017. But with the vast majority of the orders coming from US regional airlines that contract for US majors, there’s just one problem: the MRJ-90 exceeds the allowable airplane weight in the pilot contracts permitting regional flying on behalf of the majors. This is under what’s called the Scope Clause.

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Mitsubishi Regional Jet, MRJ, compared with second generation regional jets.

By Bjorn Fehrm

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Introduction

03 Aug 2015, © Leeham Co.: Mitsubishi Aircraft Corporation, the company behind Japan’s new regional aircraft, is inaugurating an engineering center in Seattle today and presenting their testing facility at Moses Lake (WA) Grant County International Airport tomorrow. Against this backdrop we decided to look a bit deeper into the MRJ after having done a first comparison on our January article, MRJ90 vs. Embraer’s up and coming E-Jet 175 E2.

Now we compare the 90 seat version, MRJ90, to the aircraft that it aims to ultimately replace, the most efficient regional jet of the present generation, Bombardier’s CRJ900. With lower fuel prices, will the advantages of a new aircraft still be strong enough to create a compelling business case against the CRJ900?

We start with the examination of the two aircraft and will finish in Part 2 with an efficiency comparison over typical regional routes.

Summary:

  • The MRJ90 and CRJ900 are the same size, around 90 seats single class or 80 seats dual class
  • The CRJ900 has an advantage in that it fits in the present Scope Clause for 76 seats regional operations for mainline carriers. The MRJ is too heavy.
  • The MRJ has by virtue of more efficient engines and a more modern wing a lower fuel burn. With today’s lower fuel price, will the difference be large enough to motivate a higher acquisition cost?

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Airbus fills in production gap for A330.

 

By Bjorn Fehrm

Introduction

Aug 3, 2015, © Leeham Co. Airbus successfully filled its production gap for the A330ceo for the transition to the A330neo, officials said Friday during the 1H2015 earnings call.

Production rate for the A330ceo can be maintained at the previously announced reduced rate of 6/mo, said CFO Harald Wilhelm.

Airbus Group reported solid progress in all areas where we previously described it had outstanding challenges. Cleaned from one time effects (among them a Dassualt share sale income of € 748m), sales and profit where 6% higher than 1H2014 at € 28.9bn and € 1.88bn respectively.  Free Cash flow consumption was now € 1bn instead of € 2.3bn last year. Airbus expects to be Cash Flow neutral on a full year basis.

Rather than going through all figures of the results, we will now go through each major program in Airbus Group and try to understand whether it is a contributor to profits or a consumer of company cash.

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Bjorn’s Corner: After weight or fuel limited we examine weight or volume limited

By Bjorn Fehrm

By Bjorn Fehrm

31 July 2015, ©. Leeham Co: Last week we explained what fuel limited meant and how that differs from an aircraft that has big enough fuel tanks so it can operate weight limited for its missions.

This was for fuel and it dictates to a large degree how the aircraft will behave on long range missions. When we block off seats to fly further, is it to allow more fuel in our tanks or is it to make the aircraft lighter to fly further with tanks already filled to the brim.

A similar phenomenon appears when we load the aircraft with its payload; an aircraft can take-off volume or weight limited.  Here is how it works.

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Rolls-Royce and Safran, major European engine OEMs with different fortunes.

By Bjorn Fehrm

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July 30, 2015 © Leeham Co. Rolls-Royce and Safran, the parent company of CFM partner Snecma, released their Q2 and first half 2015 earnings today. It is interesting to compare these companies as they are in different strategic situations in their dominant business segments, civil turbofan engines.

Civil turbofans constitute 52% of Rolls-Royce total business whereas it makes 54% of Safran’s turn over. Rolls-Royce’s focus has been widebody engines to the point where it exited its part of International Aero Engines, which makes the single aisle V2500 engine, three years ago. Safran on the other hand is heavily invested in the single aisle market through its 50% part in CFM through its Snecma subsidiary.

The present situation and the future outlook for these two companies are intimately aligned with this strategic difference. We look at why and how this will affect their immediate future.

Summary:

  • Rolls-Royce is experiencing migration problems in its widebody turbofan business. Its bread and butter Trent 700 engine is on its way out and it takes until 2018 for the replacement, Trent 7000, to kick in.
  • Other programs are only growing slowly: the Trent 1000 for Boeing’s 787 or Trent XWB for the Airbus A350.
  • Safran civil turbofan business Snecma is enjoying record sales and deliveries through its CFM joint venture with GE.
  • Despite sharing its revenue 50:50 with GE, the business turnover is the size of Rolls-Royce turbofan business today and larger tomorrow. Profit margins are three times higher.

 

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Fancher takes on KC-46A; FAA investigating Allegiant Air

July 30, 2015: Scott Fancher, regarded as the person to come in and take over troubled programs at Boeing, has been named to take over the KC-46A program.

Scott Fancher. Source: Boeing.

Fancher originally came to Boeing Commercial Airplanes from the Boeing defense unit to take over the 787 program at a time when development and design issues were rampant and the plane had yet to be delivered to a single customer.

After that was straightened out, Fancher took over new airplane programs and then moved to oversee development of the 777X, which is Boeing’s response to the Airbus A350 XWB. Although the 777X is a derivative, Boeing’s 747-8 derivative was two years late (in no small part due to the knock-on effects of the 787 program problems). Fancher’s charge with 777X was to be sure it comes in on time and on budget.

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Embraer delays KC-390 one year in 2Q2015 earnings announcement

July 30, 2015: Embraer reset entry into service for its KC-390 tanker/transport will be in 2018 vs 2017 when it reported its 2Q2015 earnings today.

The press release is here.

The KC-390 is Embraer’s largest aircraft, with a fuselage the size of a Boeing 767 width and the length of a Boeing 737. The airplane is being developed with government backing, intended to serve the remote regions of Brazil. Embraer also plans to market the airplane for export. Government funding has been squeezed with Brazil’s latest economic decline. Embraer has $390m in accounts receivable from the government.

The financial numbers were somewhat mixed, with a decline in revenue forecast for its defense unit, lower EBIT margins but solid commercial aircraft backlogs.

Embraer’s revised guidance is here. EMB’s 2Q2015 earnings presentation is here: EMBRAER_2Q15_Results

Goldman Sachs has this initial reaction:

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Bombardier reports lower 2Q2015 income

July 30, 2015: Bombardier reported lower net income on slightly higher revenues for the second quarter.

The press release is here. The earnings call presentation is here. Bombardier-Q2-2015-Presentation-20150730-en

“Overall, the second quarter was in line with plan in terms of revenues, EBIT and deliveries, and our liquidity stands at $4.4 billion,” said Alain Bellemare, President and Chief Executive Officer. “After five months on the job, I have a better understanding of our challenges and opportunities. We are taking specific action, including the launch of our Bombardier transformation plan, a disciplined approach to cash management, and the strengthening of our leadership team to reshape the company and ensure our long-term success.”

Bombardier said it completed 2,000 of the 2,400 hours required for certification of the C Series, which will be delivered during the first half of 2016 to launch operator Swiss International.

During the earnings call, Bellemare outlined more details of the Transformation Plan designed to turn BBD around from its financial strains.

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