By Philippe Poutissou
Special to Leeham News and Comment
Dec. 15, 2014: The market for turboprop aircraft has been strong for nearly a decade, yet there has been limited new product development in the segment. This has some regional airlines getting nervous about their future, in particular those who specialize in serving smaller markets with 30- to 50- seat turboprops built in the 1980s and 1990s. Which aircraft will replace the robust, but not indestructible, Bombardier DHC-8, Saab 340 and Embraer Brasilias?
Setting aside the technical challenges of developing and certifying a new aircraft type (of which there is ample evidence), the market challenge for smaller turboprops comes down to a question of limited revenue potential. Due to overall pressure on aircraft prices and demand that is highly fragmented, the business case for an aircraft OEM becomes risky and difficult to justify.
Nov. 30, 2014: Airlines now lease about 50% of their aircraft under a variety of mechanisms: operating, finance, leveraged and Islamic leases, just to name a few.
There are operating leasing, special purpose and “house” companies. There are leasing units of investment banks, insurance companies and a host of others.
Ireland is a popular leasing venue because of favorable tax laws.
The Big Four airframe OEMs have long sold aircraft directly to lessors, and the emerging airframe OEMs, COMAC and Irkut, have seen orders placed by emerging lessors in their home countries. ATR, the turbo-prop OEM, also has received orders from lessors.
Today we look at the lessor relationships with Airbus and Boeing.
Rescuing a polar bear cub: Long-time readers of this column know we’re fascinated with polar bears, so when we received the following press release, we couldn’t help but share the story with you.
Mi-26 saves polar bear cub
The crew of a Russian Mi-26 military helicopter from the Eastern Military District Army Aviation airbase saved a baby polar bear from starving to death in the Arctic, after the young bear became separated from its mother.
The Mi-26 was carrying out a routine transport flight in the Arctic zone, delivering goods from Anadyr to Wrangel Island, when one of the crew spotted a lone polar bear cub wandering along the Chukotka shore. The crew carried out several sweeps of the area, but there was no trace of the cub’s mother. The decision was therefore taken to pick up the polar bear cub.
Now open to all Readers. (Nov. 29, 2014)
Oct. 15, 2014: Embraer had the opportunity to design a clean-sheet airplane as a successor to the E-Jet to respond to the Bombardier CSeries, with the 100-110 seat CS100 a direct competitor to the E-190/195.
But after Airbus and Boeing launched the A320neo and 737 MAX families, including the small A319neo and 737-7 MAX, officials chose the more conservative play to re-engine the E-Jet at an estimated cost of $1.7bn. An entirely new airplane meant up-sizing to be directly competitive with the CS300 and the Baby Airbus and Boeing. This would have been a crowded field that didn’t make sense.
That said, this is an industry that requires long-term planning. Luis Carlos Affonso, SVP of Operations and COO Commercial Aviation, says Embraer needs more than one family of airplanes. The question is, what becomes the next family.
The news last week that Bombardier reorganized its business units, laid off another 1,800 employees and saw the retirement of Guy Hachey, president and CEO of the aerospace division, was viewed by some media and observers as an indictment of the CSeries program. While it’s certainly true that delays in the program weigh heavily on BBD, the problems don’t stop with CSeries.
Slow sales of the CRJ, Q400 and business jets–as well as program development issues with a new corporate jet–all combined to drag down financial performance and bleed cash. Bombardier doesn’t have the balance sheet strength of Boeing or Airbus, nor strong sales of other airplane family members, to weather the challenges of new airplane development programs.
Orders continued to trickle in as the Farnborough Air Show winds down (there could be others not listed here).
Items of interest:
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:
Items of interest:
Here are the orders and commitments announced today that we saw–there could be others we haven’t seen:
Items of note:
Here are orders that were announced on the first official day of the Farnborough Air Show (at least the ones we’ve seen from Seattle–feel free to add to the list if we’ve missed any):
Things of note:
The sniping between Airbus and Boeing continues:
No 90-seat ATR: Aviation Week reports that for now Airbus Group, which owns 50% of ATR, won’t green-light a 90-seat ATR turbo-prop due to the adverse impact a development program would have on profits.
Competing for 777X work: Electroimpact is based near Paine Field in Washington and it supplies Boeing and Airbus. It’s interested in participating in the Boeing 777X work. The Everett Herald has this story focusing on the company. Meanwhile, Reuters has this story about the pressures the Airbus and Boeing supply chains are under to cut costs.
JAL: A350 was ‘better:’ Japan Air Lines says its choice of the Airbus A350 was made because the airplane was just “better” than Boeing’s offering. CNBC reports.
No highway in the sky: Just on the ground. See this series of photos to see what we’re talking about.