Feb 18 2014

Odds and Ends: LEAP vs GTF; CSeries flight testing; MRJ FAL

LEAP vs GTF: Reuters has a story looking at the intense competition between CFM and Pratt & Whitney for the market dominance of the LEAP vs Geared Turbo Fan engines.

The only airplane where there is competition is on the Airbus A320neo family; CFM is exclusive on the Boeing 737 MAX and COMAC C919 and PW is exclusive on the Bombardier CSeries, Embraer E-Jet E2 and Mitsubishi MRJ. PW shares the platform of the Irkut MC-21 with a Russian engine. PW says it has sold more than 5,000 GTFs across the platforms. CFM has sold more than 6,000 across the three models it powers.

On the A320neo family, the competition is 50-50 at this point, with a large number of customers yet to decide on an engine choice. However, 60 A320neos (120 engines) ordered by lessor GECAS never were in contested (GECAS buys exclusively from CFM) and 80 A319/320neos from Republic Airways Holdings (160 engines) were part of a financial rescue package for then-ailing Frontier Airlines.

PW’s joint venture partner, International Aero Engines, shares the A320ceo family platform with CFM. Late to the market, IAE caught up to CFM in recent years.

On platforms where they compete, the sales figures so far show a neck-and-neck competition between CFM and PW.

Update, 12:30: The link has been fixed. Update, 9:30 am PST: Flight Global has this story reporting that PW plans a Performance Improvement Package on the GTF that will further cut fuel consumption by 3%.

CSeries flight testing: Bombardier’s CSeries flight testing has been slow to this point, but it’s beginning to ramp up. Aviation Week reports that FTV 3 should be in the air by the end of this month and FTV 4 should follow in April. FTV 3 is the avionics airplane and FTV 4 focuses on GTF engine testing.

Mitsubishi MRJ: Aviation Week also reports that the Mitsubishi MRJ airplane #1 is nearing final assembly.

Feb 16 2014

Boeing’s Partnership for Success strains supplier relationship

Boeing officials reaffirmed the company’s drive for Partnership for Success, or PFS, during two appearances at conferences this month, adding that its supply chain was mostly on board, though some companies are now on a “no-fly list.”

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CEO James McNerney spoke at a Cowen Co. conference and in subsequent interviews, noting that some suppliers have greater margins than Boeing, which he termed “out of kilter.”

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Stan Deal, VP and GM for Supply Chain Management and Operations for Boeing Commercial Airplanes, told the Pacific Northwest Aerospace Alliance conference in Seattle last week that PFS is proceeding well, with cooperation of most suppliers.

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Feb 16 2014

Odds and Ends: 777X wing to Everett; Boeing discounts; A330, A380neos; A350 debugging; 787 bonuses; CSeries costs up $1bn

777X wing to Everett: Dominic Gates of The Seattle Times reports that Everett (WA) at Paine Field has been selected for the production site of the 777X wing. The plant will be adjacent the huge  Boeing factory at Paine Field.

Boeing’s facility in Pierce County 65 miles away was another possibility, as was a site on the west side of Paine Field.

Boeing discounts: The Blog by Javier figures the average Boeing pricing discount for its 7-Series airplanes last year was 45%. Note that this is “average.” We’re aware of some campaigns that comfortably exceeded 50%. The same can be said for Airbus.

A330, A380neos: Aviation Week has a good interview with Tom Williams, EVP of programmes for Airbus, over the prospect of A330 and A380 neos. Although the AvWeek article includes the Pratt & Whitney Geared Turbo Fan as a possibility for the A330neo, we’ve previously reported that the timeline being discussed–a 2018 EIS–precludes the possibility because PW can’t develop a Big Engine GTF before 2020.

A350 debugging: Bloomberg has a long article about the “debugging” process for the A350.

787 bonuses: Boeing has offered its Charleston employees bonuses if they meet production targets for the 787: three 787s a month by this summer, a good six months later than had been targeted (year-end 2013). The report comes from the Charleston Post and Courier via The Everett Herald.

CSeries costs up $1bn: Bombardier announced its year-end earnings Thursday and bumped the program cost of the CSeries by $1bn. Reaction among analysts was not kind. See stories here, here and here.

Feb 13 2014

Odds and Ends: A350 state loan; Bridging 777 Classic sales; Embraer nabs E2 order; IAM chief speaks out

A350 Loan: The Wall Street Journal reports that Airbus and Germany ended talks about a state loan for the A350 program. Good. Airbus doesn’t need the loan and “divorcing” from state aid frees Airbus to make decisions for the production based on commercial considerations and not politically-driven jobs requirements.

Airbus is considering a second A350 production line to open up slots for the -1000 model. Germany made no secret that this line had to be in Hamburg in exchange for the loan. Our Market Intelligence indicates Airbus may want to locate the line outside Germany and perhaps outside Europe. Ridding itself of continue German meddling is a good thing for Airbus; now it “only” has the unions to deal with.

  • In a Guest Column in Aviation Week, Richard Aboulafia continues his A380-bashing, but what he has to say about challenges facing Airbus in the twin-aisle, heart-of-the-market sector bears reading.

Bridging 777s: Jon Ostrower at The Wall Street Journal published this story today about Boeing’s plans to support the 777 Classic sales in advance of the 777X. He reports that Boeing will try to pair 777 Classic orders with the 777X (something we forecast months ago). Boeing is also going to launch a 777 P2F program, persuading airlines to sell their older 777s to cargo carriers and replace them with new 777 Classic orders. This is a challenge because of the continuing softness in the cargo market and plenty of 747-400s available for conversion and 747-400Fs parked in the desert. Such a plan will make it increasingly difficult to support sales of the new-build 747-8F as well.

Although Boeing said it won’t shave the price on the 777 Classic to stimulate sales, we think it will (as it has on the 737 NG).

Embraer nabs E2 customer: Embraer today announced it won an order from an Indian airline for 50 E190 E2s and 50 E195 E2s with options for 50 each. The airline, Air Costa, is a current E1 customer. This is the first E2 order since the launch of the program at the Paris Air Show last June.

Reuters has an article from the Singapore Air Show quoting the Air Costa CEO. The article takes a look at the “small” aircraft market.

IAM chief speaks out: The president of the International Association of Machinists, Tom Buffenbarger, called the Puget Sound Business Journal to talk about the controversial Boeing 777X contract vote.

Why would Buffenbarger do this? He’s facing his first contested election since 1961 and his opponent is from IAM District 751 right here in Seattle. The article makes fascinating reading.

MC-21 profile: A Russian newspaper provides a profile of the Irkut MC-21 (or MS-21 or Yak-242). Talk about confused branding.

Feb 12 2014

Repost: Pratt & Whitney GTF program update at PNAA conference, plus Q&A PW, RR and GE

Due to technical issues we don’t begin to understand, the PW GTF engine program update didn’t display the videos, only the links. We are re-posting to correct the situation because we couldn’t fix it within the original post.

Bob Saia, VP of Next Generation Engine development at Pratt & Whitney, provides a program update of the Geared Turbo Fan engine and its prospect of growing into a “Big Engine” serving the twin-aisle market. He appeared at the Pacific Northwest Aerospace Alliance 2014 conference in the Seattle area last week.

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Questions and Answers

The following videos are questions and answers of the representatives of the Big Three engine manufacturers. Sound is soft on these two videos; best to use headphones.

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Feb 12 2014

Odds and Ends: A350 EIS; A330neo; more on 757RS

A350 EIS: Bloomberg reports that the first Airbus A350 XWB could be delivered to launch customer Qatar Airways “before the December deadline.” According to the Ascend data base, the first delivery had been planned for July and then slipped to September and then October. Airbus later said November or December. Based on this movement and market intelligence, we had slipped EIS to early 2015. In the end, we’ll see where the date lands.

A330neo: Aspire Aviation reports that Hawaiian Airlines could be an early customer for the A330neo. The prospect makes sense: HA is a hold-out for converting its A350-800 order to the larger A350-900, preferring the capacity of the smaller airplane.

757 Replacement: News out of the Singapore Air Show about the prospect of a 757 replacement continues to pick up steam. This story in the Puget Sound Business Journal is as complete as any (besides which, it also quotes us and our stories).

Competing in Asia: CNN has a profile of the competition between Airbus and Boeing in Asia for the low cost carriers.

Feb 12 2014

Guest column: envisioning the next round of airplanes

By James N. Krebs

Leeham News recently forecast that the next all new Boeing airplane will be a 757 successor with an entry-into-service around 2025, followed by a smaller NSA (New Small Airplane), a 737 MAX/A320 neo successor, in maybe 2027. I believe it will be clear in the next few years that the technology is and can be available here to build a reasonable-risk NSA with 20% fuel savings over the MAXes/ neos (at same seats) for initial service by 2025 (which will demand perhaps 40 more than 162 seats for even better economics). Its production would ramp up over ~5 years or so.

I hope this would be mainly a “Made in the USA” Boeing NSA: American engineering, American manufacturing, American jobs and American competitive edge. If that takes some helpful brainpower and/or investments from NASA, Northrop Grumman, Lockheed Martin, etc, good.

Boeing and Airbus might love to build a combined 100/mo. MAXes and neos “forever,” but technology and market forces aren’t likely to permit this. The companies won’t want to whet any appetites soon but I hope Boeing’s advanced design people are already at work–I’d be disappointed if they aren’t.

Airbus could certainly put an A320neo successor in service 10 years after their 2015 neo. A reengined A330 and a possible A350-1100 aren’t the only new projects they are capable of in the next decade.  The market response to their A320neo family completely surprised Boeing a couple years ago. What’s next?

Continue reading →

Feb 11 2014

Odds and Ends: CNBC reporter says Boeing’s McNerney among top 25 CEOs; 757 replacement; BBD earnings; Spirit Air

CNBC and Boeing’s McNerney: CNBC reporter Phil LeBeau, who covers aerospace and automobiles among other topics, thinks Boeing CEO Jim McNerney deserves a place in CNBC’s Top 25 CEO list. Here’s why. Aaron Karp at Air Transport World has his own take on Boeing’s position in the market today.

757 replacement: Airchive has an analysis on the need fora Boeing 757 replacement that is well worth reading. Our analysis was last October. Richard Aboulafia of The Teal Group said last week he also believes a 757 replacement is on its way (with a launch in 2018, as we previously suggested). Bloomberg has this article from the Singapore Air Show on the topic.

Bombardier earnings call: BBD reports its fourth quarter and year-end financial results Thursday. It will be interesting to hear of the impact of the latest CSERiesdelay, of 9-15 months. Here is a report in the Toronto Globe and Mail on what analysts thought in advance of the call.

Spirit Air CEO profile: The Associated Press has an entertaining profile of the CEO of Spirit Airlines, the notoriously unfriendly US airline that rivals Ireland’s Ryanair for fees and an apparent dedication for pissing passengers off.

Feb 10 2014

Rolls-Royce Trent engines program update at PNAA conference

Bill Boyd, senior vice president of Rolls-Royce, provided a program update of its Trent engines that are being developed for the Airbus A350 XWB. He appeared on a panel with GE Aviation and Pratt & Whitney. He appeared at the 2014 Pacific Northwest Aerospace Alliance conference last week in the Seattle area.

Sound is soft; use of headphones is recommended.

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Feb 10 2014

A350 XWB program update at the PNAA conference

Daniel Wenninger, senior director of the Airbus A350 XWB program out if the Airbus Americas office, appeared at the 2014 Pacific Northwest Aerospace Alliance conference last week in the Seattle area.

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Simon Pickup of Airbus Americas joins Wenninger for questions and answers.