Odds and Ends: Composites in future airplanes; Boeing and Hillary Clinton; 757 MAX; AA swaps A321neo orders; Delta RFP

Composites in future airplanes: Composites World has a post about the use of composites in the future, with a good graphic detailing the increasing use of this material in airliners.

Boeing and Hillary Clinton: The Washington Post has a long story about the relationship between Boeing and Hillary Clinton, while she was US Secretary of State. While the story raises some interesting issues with respect to the prospective presidential candidate in 2016, the points focusing on her advocating for Boeing aircraft purchases doesn’t bother us a bit: that’s what politicians do on behalf of Airbus. As far as we’re concerned, our government should be supporting our industries, too.

757 MAX: The Motley Fool raises the prospect of a Boeing “757 MAX,” which is a restart of the 757 line but with a composite wing and new engines–something along the lines of the 777X in concept.  We’ve been hearing rumblings about this, too.

American swaps A321neo orders: American Airlines swapped 30 A321neo firm orders into options, leaving 100 firm orders for this sub-type left. The deliveries were for 2021/22. American told us it retained this flexibility in the original contract and the new management elected to do so in order “to maintain flexibility.”

Delta’s RFP: Airchive has a good analysis of the Delta Air Lines Request for Proposals to replace its wide-body fleet. We were especially interested in the cost analysis of the 787 vs the A330, which is close to our own numbers (there was no collaboration between Airchive and Leeham).

More A350-800 orders vanish

Twelve more Airbus A350-800 orders vanished as Aircraft Purchase Fleet canceled, according to the latest tally from Airbus. APF is the special purpose company set up for Alitalia Airlines, which is a financial basket case and probably couldn’t finance a Piper Cub, let alone an A350. In this case, the -800s were not upgraded to -900s or -1000s, according to the monthly Airbus Orders and Deliveries tally. There are now just 34 A358s in backlog.

The shrinking backlog further suggests the need for a refresh of the A330 with a re-engine, in our view. Without the A350-800, Airbus won’t have a competitor in the 250 seat sector that has any current technology. An A330neo with new engines would at least fill some of this void.

Meantime, Delta Air Lines issued a Request for Proposals for 50 wide-body aircraft to replace its aging Boeing 747-400s and some 767-300ERs. Delta’s CEO has said he could be interested in the A330neo. Delta eschews new technology, preferring “proven” technology, which could work against the Boeing 777X powered by an entirely new engine. By the time Delta would be ready to take delivery of its order, the A350XWB and its new technology will have been in service for many years. Delta has a deferred order for the Boeing 787-8 it inherited from Northwest Airlines, and this technology will be mature by the time Delta would be able to take delivery, so the 787 family could be in the mix. So could an A330neo, which would most likely be powered by one of the 787′s engine options, the GEnx or the Rolls-Royce Trent 1000 TEN. Market intelligence tells us Delta is pushing the GEnx, given its strong relationship with GE.

Filling the production gap for A330 and 777 Classic: huge challenge ahead

Two orders were announced this week for the Airbus A330 and Boeing 777-300ER, important for filling the production gaps of each airplane. In the aggregate, the current backlogs go through 2016, though in reality, they stream beyond that date. See our charts below.

Airbus announced an order for 27 A330s from China, but these were the airplanes long frozen in the push-back by China against Europe in the emissions trading scheme objected to by China and a number of other countries. China routinely freezes airplane orders (among other commercial deals) to express its political displeasure.

At current production rates for the A330 or 10/mo, this adds 2.7 months to the Airbus backlog, but offset with deliveries, the aggregate backlog (i.e., if all deliveries were bunched together) means the backlog ends in 2016. With the Chinese order, Airbus announced 31 sales year-to-date.

 

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No stress on the order backlog, says Airbus at ISTAT

Airbus doesn’t see any “stress” in its aircraft order backlog, or “skyline,” says Andrew Shankland, senior vice president of leasing markets from the European manufacturer.

Shankland spoke with us at the annual meeting of the International Society of Transport Aircraft Trading, held Monday and Tuesday this week in San Diego.

Persistent concerns are expressed about an “order bubble,” including during the ISTAT conference. Shankland told us in an interview that “we don’t see any stress; we meet every two weeks” in a process Airbus calls its “watch tower” (Boeing calls its process the “war room”).

“As long as we can move things around, and we have a pretty rigorous process to be sure every plane has a home,” Airbus doesn’t see any issue with its skyline, Shankland said.

Steven Udvar-Hazy, CEO of lessor Air Lease Corp, sees Asia as a high risk region where huge orders have been placed by carriers such as AirAsia and Lion Air, both big A320 customers. AirAsia just announced deferral of 19 A320s this year and next. AirAsiaX also has large orders for the A330 and A350, recently deferring some A330s “until the time is right.” Shankland wouldn’t discuss any individual customer, and only generally noted that Airbus and Boeing have successfully “manipulated” the skyline in the past when deferrals or even cancellations occur.

Shankland isn’t involved in Airbus’ analysis of whether to proceed with the prospective A330neo, but acknowledged that the business case for the airplane “remains to be seen.”

Public pressure mounts on Airbus to launch A330neo

Public pressure is building on Airbus to launch a re-engining of its A330 medium-sector, twin-aisle, aging airplane as CIT Aerospace and Air Lease Corp. officials joined Delta Air Lines and AirAsia in their previous overt calls for development of an A330neo. Lufthansa Airlines is understood to be seeking a neo behind the scenes.

GE Aviation and Rolls-Royce are encouraging Airbus to proceed with a neo as a platform for their GEnx and Trent 1000 TEN engines. The GEnx is used on the Boeing 747-8 and the 787; the Trent 1000 TEN is used on the 787.

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Airbus and Boeing square off at ISTAT

Andy Shankland, senior vice president of leasing markets for Airbus, and Randy Tinseth, vice president of marketing for Boeing, were next up at the ISTAT annual meeting in San Diego today.

The following is a synopsis and paraphrasing of their presentations and free-wheeling discussion.

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CIT Aerospace looks at A330 future

CIT Aerospace, one of the Top Tier lessors in the business, takes a look at the future options of the Airbus A330.

In a short paper released concurrent with the start of the AGM of ISTAT, the International Society of Transport Aircraft Traders, in San Diego today, CIT’s Steve Mason outlines what he sees as the options facing Airbus to improve sales.

The four page PDF may be found here.

We have production rates of 14 Boeing 787s a month (vs 16 in the CIT analysis) and 10 Boeing 777Xs a month (based on Boeing’s own information) vs eight in the CIT analysis, but otherwise the   CIT analysis is very similar to the issues we’ve written about here previously, so we won’t repeat them. We presented yesterday to the ISTAT Appraisers Continuing Education meeting about the production gap facing Airbus, Boeing and Embraer between their current airplanes and future programs, a topic we’ve also discussed here previously.  CIT and we concur that Airbus has a major dilemma with the A330 going forward; we believe Airbus should proceed with the A330neo, which should extend the life of the airplane by 10-15 years. Absent this, we believe Airbus will be at a major production rate disadvantage in the important 210-400 seat twin aisle sector.

Odds and Ends: MH370, Day 5; Delta’s RFP

MH370, Day 5: Yesterday brought another round of frenzied media coverage when the Chinese government released satellite images of what might be pieces of the Malaysian 777 in the water, 140 miles west of the last known contact position of flight MH370.

These images were identified as being up to 72 feet long and 52 feet wide. The images were taken Sunday, after the Friday night/Saturday morning disappearance.

We’re skeptical that these things are part of the airplane. They are huge to be floating on the water. Most likely something this big would have sunk.

Further, we simply cannot get past the fact that no debris field of any kind has been seen anywhere along the intended flight path or within broad proximity. Seat cushions, aircraft insulation, light-weight parts, papers, and even bodies should have been found in broad proximity to the “crash” site–and these haven’t been.

Certainly this would be a breakthrough if these objects turn out to be part of the plane, for you then could mathematically take into account the currents and winds and backtrack to the point of origin. But we aren’t going to count on it.

And in a dramatic development, The Wall Street Journal reports that signals from the plane’s engines indicate the flight flew on for four hours after the transponder stopped sending signals. This theory has been denied by Malaysia.

Delta’s RFP: Aviation Week has a short story that’s filled with news about the Delta Air Lines request for proposals to replace its Boeing 747-400 and Boeing 767-300ER fleets. The story also contains some information about the need for a plane the size of the Bombardier CSeries. Delta wants the Airbus A330neo, the A330 Classic, the A350 or the Boeing 787 (it has left-over, deferred orders from Northwest Airlines on the latter), and it needs a plane with around 5,000nm-6,000nm range (which fits the A330-300/300neo). It also says the Boeing 737-700 isn’t economical and the 737-800 is too big. While not naming the A319 and A320, the Boeing equivalents, we believe the same is true for these aircraft. This suggests the CSeries. Delta also likes the Pratt & Whitney Geared Turbo Fan.

Rolls-Royce plans for new single-aisle, twin-aisle airplane engines

Rolls-Royce may not be at a cross road but it’s certainly at a fork in the road.

RR sought to be a dual-source supplier for the Boeing 777X, competing with GE Aviation for the privilege; it was generally a given that GE would be a provider. The question was whether it would be the sole supplier or share the platform with another. Pratt & Whitney withdrew, concluding the business case wasn’t there for its proposed big Geared Turbo Fan. RR stayed in the competition, assured by Boeing that it wasn’t a stalking horse to GE.

But GE won the position as exclusive supplier, much to RR’s consternation.

Next, the future of the Airbus A350-800, powered exclusively by RR, is in serious doubt. The backlog is now down to a mere 46 as customer after customer, encouraged by Airbus, up-gauged to the A350-900 and -1000 sub-types. While RR is also the exclusive supplier on each of these models, and the engines are largely common, there has been substantial investment by Rolls on the -800’s application. If the -800 is canceled (as many industry observers believe it will be), RR’s investment is largely down the drain. How does Airbus “make good” to RR for this?

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Investigative focus on MAS MH370

The following will be areas of focus for the investigation of the Malaysian Airlines MH370 crash, involving a Boeing 777-200ER equipped with Rolls-Royce engines. These are standard areas of investigation and at this point, listing them here doesn’t imply or suggest any one area is more prevalent than another.

  • Catastrophic structural failure of the airframe and/or engines. We consider this highly unlikely, given the sterling history of the 777, but investigators will look at this possibility.
  • Dual engine flame out and immediate loss of control. The RR engines have had a history of icing that cut fuel flow. This was the cause of the British Airways 777-200ER crash landing at London Heathrow. A fix was undertaken, but this possibility will undoubtedly be considered. Even if this happened, unless there was an immediate loss of control,  there would have been glide time and the ability of the crew to radio an emergency. The Ram Air Turbine (RAT) would have supplied basic power and instrumentation.
  • Control upset caused by clear air turbulence. Apparently weather was good but CAT is not unusual in the Pacific. CAT would have to be awfully extreme to cause an upset of such magnitude as to permit the airplane to dive into the ocean in so short a period of time as to preclude a radio call. But remember that Air France 447 descended from cruising altitude to impact without a radio call in a very short period of time.
  • Cockpit penetration and incapacitation of the crew, followed by deliberate destruction of the airplane.
  • A bomb.
  • Any prospect of an accidental shoot-down by a military missile.
  • Pilot suicide. As inflammatory as this possibility is, this has been the cause of at least two crashes into water. The history of the pilots will be studied and any information from the black boxes will help on this point,