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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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.

Farborough Air Show, July 16: Snipe hunts in an era of model improvements

  • Upate, 5:30am PDT: The Wall Street Journal has an article that is more or less on point to the theme of this post.

It doesn’t matter what the competition does, it’s always inferior–until you do it yourself.

The continued, and tiring, war of words between Airbus and Boeing throughout the decades is monotonous and self-serving. If you step back, it’s also amusing.

Consider:

  • Boeing constantly dissed the Airbus concept of fly-by-wire–until ultimately adopting FBW in its airplanes.
  • Airbus dismissed twin-engine ETOPS of the 777 while promoting four-engine safety of its A340–until evolving the A330 into a highly capable ETOPS in its own right.
  • Airbus put-down the 777X, saying the only way Boeing could make it economical was by adding seats…which Airbus has now done for the A330-900 to help its economics.
  • Boeing ridiculed the idea of a re-engined A320, but then had to follow with a re-engined 737 MAX due to the runaway success of the A320neo.
  • Boeing ridicules the A330neo as an old, 1980s airplane–neatly ignoring the fact that the 737 and 747 are 1960s airplanes.
  • Airbus still calls the 777/777X/787 a “dog’s breakfast,” though we know some dogs who eat pretty well.

And so it goes.

The fact of the matter is, however, that minor and major makeovers of existing airplanes have long been a fact of life, maximizing investment and keeping research and development costs under control. The Douglas DC-1 was the prototype for the DC-2, which begot the DC-3. The DC-4 (C-54) begot the DC-6, DC-6B and DC-7 series. The Lockheed Contellation was reworked from the original L-049 through the 647/749/1049 (in various versions) and finally the 1649.

Then came the jet age, with vastly more expense, and model upgrades became the norm. The sniping today between Airbus and Boeing goes unabated in an era of historical model improvements.

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Airbus A330-800 and -900neo, first analysis part 2: engines and maintenance costs

Further to our initial analysis of the launched Airbus A330neo, here is our follow up diving deeper into engine matters and maintenance costs.

The A330neo engine

We met with Rolls Royce Vice President Customer Marketing Richard Goodhead to talk about the Trent T7000 for the A330neo and to straighten some misconceptions around the engine. First the base facts as presented by Airbus and Rolls Royce Monday: Continue reading

Farnborough Air Show, July 15: Orders summary

Here are the orders and commitments announced today that we saw–there could be others we haven’t seen:

  • Airbus: Avolon (a lessor) ordered 15 A330neos; CIT Aerospace, MOU for 16 A330-900s, five A321neos; SMBC Aviation (lessor), 110 A320neo and five A320ceo aircraft; BOC Aviation, 36 Airbus A320ceo and seven A320neo family 17 of which will be fore the A321 family; AirAsiaX, MOU 50 A330-900s.
  • ATR: Air Lease Corp. purchased seven ATR-72-600s.
  • Boeing: Intrepid Aviation, 6+4 777-300ERs; Air Lease Corp, six 777-300ERs, 20 737-8s; CIT Aerospace, 10 787-9s.
  • Bombardier: One Q400 from Horizon Air; revealed an unidentied customer, Abu Dhabi Aviation, for two Q400s; LOI from Falcon Aviation for five Q400s.
  • CFM: Air Lease Corp. ordered the LEAP-1A for 20 A320neo family aircraft.
  • Embraer: Azul Air, LOI for 30+20 E-195 E2 (and becomes launch customer for this sub-type); Fuji’s Dream Airlines, 3+3 E-175s, a previously unidentified customer.
  • Mitsubishi: six MRJ90s from Air Mandalay.
  • Pratt & Whitney: SaudiGulf Airlines orders the V2500 to power four A320ceos; Philippine Airlines executes a previous LOI to a firm order for the GTF for 10 A320neos; BOC Aviation, V2500 for eight of the A320ceo family listed above; International Airlines Group (Vueling Airlines), V2500 for 30 A320ceo family.
  • Viking Air: Air Seychelles, two Twin Otters.

Items of note:

  • Airbus’ John Leahy says he expects a total of 100 A330neo orders from FAS;
  • BOC Aviation endorsed the launch of the A330neo but didn’t (yet) order any.
  • Boeing said its new 777X will have a cabin altitude of 6,000 ft, the same as the 787, larger windows than its 777 Classic and the A350; features borrowed from the 787 and many that go beyond the 787 passenger experience; and lower noise.
  • Bombardier launched its Q400 Combi, seating 50 passengers and carrying 8,200 lbs of cargo.
  • Steven Udvar-Hazy, CEO of Air Lease Corp, which has a large order book for the ATR-72-600, says, the Q400 is a good aircraft, but “much more expensive to operate” vs ATR. [However, that's at the Q400's high cruising speed. If it's throttled back, the operating costs are said by BBD to be comparable.--Editor.]

Farnborough Air Show, July 15: WA State and Mitsubishi; PW GTF issue revealed, finally;

The news that Mitsubishi will stage flight testing for its new MRJ 90-seat jet program at Moses Lake (WA) is, parochially, good news. And it is exactly the type of non-industrial aerospace business that we’ve been advocating for Washington since our consulting days to the State Department of Commerce in 2010, and during our tenure as a member of the Board of Directors for the Pacific Northwest Aerospace Alliance (PNAA) for three years (2010-2013).

Washington, understandably, has been married to, and focused on, industrial aerospace. Boeing is here, of course. The supply based the supports Boeing has a huge footprint in Washington. But industrial business is highly capital-intensive, and winning this business is highly competitive.

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