Odds and Ends: ATR presses parent Airbus for 90 seat go-ahead; Stratoliner; 777 model

ATR presses Airbus: ATR, the world’s leading maker of turbo-prop airliners, is pressing Airbus Group to green-light its proposed 90-seat, clearn-sheet turbo-prop, Bloomberg News reports.

Airbus Group owns 50% of ATR; Alenia owns the other 50%. ATR’s CEO wants to change this legal structure, reports The Wall Street Journal.

According to the news reports, Airbus is concerned about the diversion of engineering resources. Maybe this is why. Airbus is studying a “mega-twin” concept, reports Aviation Week. Of particular note is the reference that Airbus doesn’t plan to launch a new airplane in the next 10 years. We think these plans are going to have to change when Boeing launches a replacement for the 757, followed by the 737RS, which we have for the end of this decade.

But let’s get back to ATR.

Bombardier, the world’s #2 turbo-prop airliner producer, launched a high-density, 86-seat version of its venerable Q400 last year. China is going forward with a 90-seat turbo-prop and India is also interested in joining the fray.

ATR currently holds a 59% share of the future orders, options and Letters of Intents backlog.

Q400 v ATR

Bombardier made some significant progress last year, signing large LOIs with Russia for 100 and with China. These should be converted to firm orders this year, but even so, ATR has a lopsided market lead.

Boeing Stratoliner: Boeing has a short profile of the B307 Stratoliner, the first pressurized airliner. It’s the 75th anniversary of this important airliner. The last surviving example is on display at the Steven Udvar-Hazy Museum at Washington Dulles Airport.

Boeing 777 model: It’s been over the Internet already but in case you’ve missed this, a 1/60th, highly detailed model of the Boeing 777 was carved out of manila folders. This is an amazing piece of artistry.

Looking ahead to 2014

Here’s what to look for in 2014 in commercial aviation.

Airbus

A350 XWB: The high-profile A350 XWB program continues flight testing this year. Entry-into-service has been a sliding target. The program is running about 18 months behind original plan and EIS was intended for mid-year following initial delays. Even this has slipped, first to September and then to “the fourth quarter.” Currently first delivery is scheduled in October to launch customer Qatar Airways, which is slated to get four A350-900s this year. Emirates Airlines is listed as getting two of the total of six scheduled for delivery.

A320neo: Lost in the shadow of the A350 program is the A320neo. Final assembly of the first aircraft is to begin in the spring and first flight, followed by testing, is scheduled for this fall. The Pratt & Whitney Geared Turbo Fan is the initial variant. First delivery is scheduled in the fall of 2015.

Others: Airbus continues to evaluate whether to proceed with developing an A330neo. Based on our Market Intelligence, we expect a decision to proceed will come this year. Concurrently with this, we expect most if not all of the remaining 61 orders for the A350-800 to be upgraded to the A350-900 and the -800 program to be officially rescheduled if not dropped. The -800 is currently supposed to enter service in 2016, followed by the A350-1000 in 2017. But recall that as delays mounted on the A350-900, Airbus shifted engineers to the -900 and the -1000 at the expense of the -800. Salesmen have consistently shifted orders from the -800 to the larger models. We long ago anticipated the -800’s EIS would be rescheduled to 2018, following the -1000. The -800’s economics aren’t compelling enough just justify the expensive list price. So we expect Airbus to upgrade the A330 to a new engine option, using either or both of the Trent 1000 TEN and GEnx with PIPs (Performance Improvement Packages) or with some modifications. EIS would be about 2018. This precludes Pratt & Whitney from offering a large version of the Geared Turbo Fan, which wouldn’t be ready by then.

We also expect Airbus and the engine makers to look at re-engining the A380, driven by desires of Emirates Airlines to see a 10% economic improvement. Emirates announced an order for 50 A380s at the Dubai Air Show but instead of ordering the incumbent engine from Engine Alliance for these, Emirates left the engine choice open. This leaves open the possibility the A330neo and the “A380RE” could share an engine choice.

Boeing

After many years of turmoil, 2014 should be quiet for Boeing (now that the IAM issues have been resolved—see below).

787: Barring any untoward and unexpected issues, Boeing seems at long last to be on an upward trajectory with this program—but we’ve said this before. There are still nagging dispatch and fleet reliability issues on the 787-8 fleet to resolve, but flight testing of the 787-9 appears to be going well. Certification and first delivery should come without trouble this year, to launch customer Air New Zealand.

737: Nothing to report on the Next Generation program except ramp-up to a production rate of 42/mo is to take effect this year. Development continues on the 737 MAX.

Others: The 777 Classic is humming along. Now that the 777X is launched, we’ll be closely watching sales for the Classic; Boeing has a three year backlog but six years to 777X’s EIS. How is Boeing going to fill this gap, and what kind of price cuts will be offered to do so?

The 747-8 continues to struggle, barely holding on. Boeing says it thinks the cargo market will recover this year, boosting sales of the 747-8F. We’re dubious.

The 767 commercial program continues to wind down. The 767-based KC-46A program ramps up.

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Outsourcing focus of Boeing report, but misses bigger picture; IAM vote aftermath; Boeing’s 2013

A long article (10 pages when printed) discusses the pitfalls Boeing had by outsourcing so much work on the 787. This much is not new. The point the article raises–transferring technology and the potential decline of US aerospace dominance–isn’t especially new, either; we’ve written about this in the past.

What the article, however, overlooks is that Boeing isn’t alone in doing this. To certain degrees, Airbus, Bombardier and Embraer also are guilty–as are a number of other OEMs and suppliers. CFM International, for example entered into a joint venture with the Chinese that would help them develop an modern commercial jet engine. Fortunately, CFM pulled back on this over concerns of technology transfer.

Airbus has an A320 assembly line in Tianjin, China, and Embraer had an ERJ-145 assembly line in the PRC. McDonnell Douglas had an MD-80/MD-90 line in Shanghai.

Bombardier contracts with Chinese companies to produce the Q400 and CSeries fuselages, the latter with the advanced aluminum-lithium metals.

The airframe OEMs will tell you that final assembly represents a small portion of the airplane and the risk of technology transfer is minimal. But it’s probably no coincidence that the COMAC/AVIC ARJ21 looks the the MD-80 (but sized like the DC-9-10) or that the C919 looks an awfully lot like the A320.

The article points out that Mitsubishi, which builds the wings for the Boeing 787, is now using this experience to design and build the MRJ-90. True enough, though it should be noted that having experience the composite wing issues associated with the 787, Mitsubishi abandoned plans for a composite wing for the MRJ and is proceeding with metal instead.

Suppliers are basically extorted by China: if you want to sell us your goods, you have to be prepared to transfer technology. Suppliers can’t ignore this huge market, but try to mitigate the blackmail by transferring “yesterday’s” technology or at least developing tomorrow’s technology today while transferring today’s technology to China.

It doesn’t stop with China, of course. Boeing and Airbus have Russian ties with engineers. Bombardier is planning a Q400 assembly line in Russia. Indian engineers work on Airbus and Boeing airplanes and now plan their own turbo-prop.

The days of the Big Two Duopoly are numbered. And it’s not just Boeing that is guilty of aiding and abetting the new competition.

Boeing’s Good Year in 2013

Set aside the disruptive and embarrassing ground of the 787 in January through April, Boeing had a very good year in 2013. It posted a record rate of deliveries, besting Airbus for the second year in a row. It’s order book was the best since 9/11. Here is the press release.

Airbus announces its 2013 production and delivery results on January 13.

Boeing-IAM vote: After-thoughts

We can’t go by this week without a short commentary on the Boeing-IAM vote on Friday, but we’re not going to spend a lot of time on this—we’ve analyzed this issue a number of times and there is little more to say except this:

It was a very tough vote for the union members of IAM 751. Giving up benefits won in previous hard-fought battles is always tough. But the Boeing 777X will be assembled in Washington State, and the composite wings will be built in Washington, too. Our view is that having 80% of something (benefits) is better than 100% of nothing (the 777X).

Boeing, of course, will return to the State and the union for more tax breaks and concessions when the 757 and 737 replacements are designed and a decision is needed about where to build these airplanes. Boeing is now in a position to seem more concessions from labor during a contract that’s in place to September 2024, and the union can’t strike. It’s been significantly weakened, losing leverage ion addition to benefits as a result of Friday’s contract vote.

But this enables Boeing to tell customers the threat of delivery disruptions from strikes is gone, and this will reassure them, which may or may not help sales—thus providing more work for IAM members.

Boeing faces a huge morale problem for the members who feel they’ve been had in this process. IAM members have long, long memories. Although there is no option to strike, members can “work to the rules” or find other ways to decrease productivity. Boeing has some real fence-mending to do. We’ll see whether it makes any effort to do so.

Labor isn’t content with the narrow yes vote, however. Some are calling for a third vote, arguing the January 3 election date was set to deliberately disenfranchise a large number of union members who likely would have voted No. Turnout last week was lower than the November 13 vote because many members were still on vacation from the Christmas and New Year’s holidays.

Odds and Ends: Alaska strikes back; boost for Q400; Airbus CEO speaks; Groveling

Alaska strikes back: Alaska Airlines has finally struck back at Delta Air Lines, which has been announcing loads of new service into Alaska’s Seattle hub. Alaska announced this morning:

Alaska Airlines will begin daily nonstop service between Salt Lake City and Portland, Ore., Los Angeles, San Diego and San Jose, Calif., starting June 9, and will add a third nonstop flight to its existing service between Salt Lake City and Seattle. Sale fares on the new flights will be available for booking Tuesday, Dec. 10.

Salt Lake City is a major Delta hub.

Boost for Q400: Bombardier inked a Letter of Intent for 30 firm orders for the Q400 turbo-props with Nantong Tongzhou Bay Aviation Industry Co., Ltd. Nantong plans to launch commercial airline service in China through a new carrier called Sutong Airlines.

Airbus CEO speaks: Arabian Business has a long interview with Airbus CEO Fabrice Bregier. Once you get past the fluff, there is some interesting information.

Groveling: This story via ABC has nothing new but we love the headline. Add Georgia to the list of grovelers.

This article discusses the prospects of Huntsville (AL) in the competition for Boeing’s 777X assembly site.

The IAM 837 union head at Boeing’s plant in St. Louis has reversed course (and declared a news blackout). More goofiness from the International Association of Machinists.

DXB13 Day 3: Bombardier, Boeing, Airbus announce small orders

Bombardier, Boeing and Airbus each snared some orders at Day 3 of the Dubai Air Show:

Bombardier

  • A Letter of Intent from Iraqi Airways for 5+11 CS300s;
  • Abu Dhabi Aviation ordered two Q400ss; and
  • Nok Air of Thailand announced orders, options and purchase rights for 2+2+4 Q400s.

Boeing nabbed an order from TUI Travel for two 787s. Turkish Airlines firmed options for three 777-300ERs.

Airbus announced that Air Serbia ordered 10 A320s and Air Algerie signed an MOU for three A330-200s.

Other headlines from the show:

Airbus considers boosting A320 production

Engine Alliance ponders A380 engine improvements

Bombardier launches high density Q400

Watch out, US airlines, the Arabs are coming

Emirates to compete engine supplier for 50 A380s

DXB13, Day 2: A350 Regional; New Libyan airline; 777X production timeline; More on IAM-777X issue

It looks like the big news of the Dubai Air Show has already come-and-gone. There was little order activity on the second day.

A350 Regional: Etihad Airlines’ order for Airbus A350s include a regional version, with lighter weight, lower range and lower thrust. Aviation Week has details.

Libyan start-up orders Airbus: A new airline in Libya has placed an order for Airbus A350s and A320s.

Boeing produced this slick video to introduce the 777-8/9. As you might expect, the quality is top rate. Boeing has some subtle digs toward the A350, cleverly done as they were.

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Headlines from the air show:

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Bombardier may take the CSeries to Wichita (KS), where it has a facility, for flight testing if weather in Canada is poor.

Other News:

IAM 751-777X Vote

In Dominic Gates’ Seattle Times article taking a behind-the-scenes look at the IAM 777X contract fiasco,  Gates wrote:

Buffenbarger also raised a concern about the vote outcome. He said that the final vote tally Wednesday showed that 5,000 members hadn’t voted.

While he said he’s not alleging vote fraud, he said the absence of those votes leaves the outcome “questionable.”

“To have that big a number that didn’t vote stands out,” he said.

Buffenbarger needs to check his math. With 31,000 machinists, 5,000 “not voting” means 26,000 did. Sixty-seven percent rejected the contract, or 17,420, and 33% voted to approve it, or 8,580–a difference of 8,900. Even if all 5,000 had voted for the contract (a highly dubious prospect), it still would have lost by nearly3,900 votes. Buffenbarger’s comments to Gates (and we assume accurate reporting) further illustrates to buffoonery of IAM International in this entire mess.

Countdown to 777X site selection: Bloomberg News reports that Boeing will decide within three months where to build the 777X. This doesn’t leave a lot of time for the IAM to get its act together.

Odds and Ends: Air France may cut A380 orders; Boeing Everett history; BBD, EMB miss targets

Air France May Drop A380s: Bloomberg reports that Air France may cut back its orders for the Airbus A380s. This continues the challenge of Very Large Aircraft sector sales. Boeing has cut production rates twice for its 747-8. The Los Angeles Times has this story about the eventual demise of the 747-8.

Boeing Everett History: Airchive has Part 3 of its history of Boeing’s Everett plant here. This covers the 777 and what especially caught our eye was the photo of the model of the 777-200 with folding wings, a concept that didn’t go into production. The new 777X will have folding wings. The difference is that the 777-200 concept included the outboard control surfaces, which highly complicated the matter. The 777X folding wings are beyond the control surfaces.

BBD, EMB miss targets: Bombardier missed its earnings estimates on fewer deliveries than analysts expected for the third quarter. Here is the press release.

On the Bombardier earnings call, officials didn’t address whether there will be a delay in the entry-into-service, planned for about 12 months after the September 16 first flight. Only four test flights have occurred, and UBS aerospace analyst David Strauss estimates that the program needs to fly an average of 1.8 hours a day to meet this timeline. Flight Test Vehicle #2 is “weeks away” from entering service.

Pierre Beaudoin, president and CEO, says that some customers are considering swapping the CS100 for the larger CS300, which could influence EIS. He added that discussions with customers about schedules, and the pace of ramp-up of production, are factors to be considered for EIS. “We will answer this question in the next few months.”

He said the flight test results so far are “exactly” as planned, but data won’t be shared with customers for some time. Beaudoin said that the pace of the flight tests are also as planned, and that there hasn’t been a delay despite the perception.

Embraer also missed its 3Q targets and likewise reported lower earnings. Here is its press release.

Odds and Ends: Bombardier and American; C919 EIS; Europe blinks

Bombardier and American Airlines: Bloomberg has an analysis of the campaign at American Airlines for a large regional jet order, and how vital it is to Bombardier to win the deal. Embraer won three previous important orders from the US major airlines, leaving American the last remaining prize in the near-term.

C919 Entry-into-Service: Reuters has an analysis about the Chinese effort to challenge Airbus and Boeing with the COMAC C919, and the continued challenges to do so. EIS is now figured for 2018.

Europe blinks on emissions: The European Union blinked on its long-running effort to force all airlines to pay a fine if they don’t meet emission standards. The effort met with international resistance, with China leading the way. Chinese orders for Airbus A320s and A330s had been held up. The Chinese earlier ordered the A320s, but still blocked A330 purchases by its airlines. We’ll see how quickly these orders come through.

Bombardier scores huge deal at Russian air show

Bombardier scored a huge deal at the Russian air show, MAKS, with a letter of intent for an order for up to 100 Q400 turbo-props.

The Q400 has been trailing rival ATR, which is half owned by Airbus parent EADS, for the ATR-72 turbo-prop, by a wide margin in recent sales. ATR recently obtained third-world, gravel runway certification for its airplane.

The BBD deal includes the potential of establishing a second Q400 assembly line in Russia. The BBD deal is for 50+50 and isn’t expected to be completed until next year.

Bombardier has been making a major effort in Russia, placing used CRJ regional jets there, previous orders for the Q400 and an order for 32 CSeries. It’s also signed an agreement to explore customer support services for the Irkut MC-21 150-212 seat mainline jet.

Other MAKS news:

  • Russia’s own Sukhoi announced orders for the Superjet, with 100 going to home-grown lessor Ilyushin Finance Corp.
  • Russia’s VEB Leasing converted an MOU for 20 MC-21s to a firm order. These are for lease to UTAir and Transaero.
  • Airbus, Boeing and Embraer have yet to announce any deals.
  • This is the first air show since the Soviet Union collapsed.

Odds and Ends: Airbus will “win” the Air Show; AvWeek’s McNerney interview; 747-8 vs 747-400

Airbus will “win” the air show: We did this preview for CNN International.

Jim McNerney Interview: Aviation Week has this long one.

Dominic Gates of The Seattle Times will be blogging from the Paris Air Show. You can follow him here. He has several reports worth reading.

Meantime, he reports that the Boeing 787-10 may be built in South Carolina, not Boeing’s main plant at Everett.

NYC Aviation has an interesting pilot perspective on flying the Boeing 747-400F and the 747-8F.