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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Odds and Ends: E-190 v Superjet v BBD in Russia; China’s aviation; WestJet’s speed dating; Crandall speaks

E-190 v Superjet v Bombardier: With the finding that the pilot of the demo flight of the Sukhoi SSJ 100 Superjet simply flew into a mountain in Indonesia, rather than there being a problem with the airplane, the cloud has been lifted from the aircraft. So the direct match-up of the SSJ vs the Embraer E-190 can now be compared and this article does so. Bombardier’s CRJ-900 and CRJ-1000 also compete.

China’s Aviation: Airbus and Boeing think China pose the greatest threat in the future, but this analyst is less enthusiastic.

WestJet of Canada: The low cost carrier took a bold step to order up to 45 Bombardier Q400s to feed itself. Now it’s using speed dating to decide where to fly the airplanes.

Crandall speaks on AA-US merger: Former American Airlines CEO Robert Crandall weighs in on the merger between American Airlines and US Airways.

Odds and Ends: Why aircraft are late; catching up to Boeing

Why Aircraft Are Late: Boeing 747-8, 787, Airbus A380, A400M, A350, Mitsubishi MRJ, Comac ARJ-21, Sukhoi Superjet and probably Comac C919, Bombardier CSeries and Irkut MS-21–all late. It’s the new normal. Ernie Arvai at AirInsight takes a look at why.

Catching Boeing: Airbus may well have trailed Boeing through the Farnborough Air Show in terms of orders, but it may also be on the way toward catching up. The big PAL order for 54 aircraft was announced this week. A 100-airplane order out of China is due to be announced shortly. Another 100 airplane order from AirAsia appears to be pending. Year-to-date, Boeing has 701 net orders and Airbus has 270 net orders. These three orders still leaves Airbus well short of Boeing, and Boeing has more 737 MAX commitments to convert this year. We expect Boeing to finish the year in first place. It will be interesting to see how close Airbus can come.

NEO firm order wrap: Aviation Week has this detailed recap of NEO firm orders. We expect some of the A320neos to be converted to A321neos as time goes on, just as we expect 737-8 MAX orders to be swapped with 737-9 MAX positions.

Farnborough, Day 2: Dullsville; 737 MAX weights, ranges

Update, 8:30 PDT: If anyone thought Airbus’ John Leahy doesn’t have some orders up his sleeve, get a gander at this from Reuters:

Airbus sales chief John Leahy was in typically combative and upbeat form: “The party’s over?. Why, it’s only the second day of the show, for heavens’ sake,” he said of suggestions orders were drying up. “We’ll have some important announcements.

Original Post:

Another reason we’re glad we didn’t waste our time and money going this year: a dearth of activity.

  • Bombardier: Air Baltic signs LOI fo 10+10 CS300s, replacing its Boeing 737 Classic fleet. Delivery from 1Q15. This delivery date is interesting; BBD had said the line was sold out to 2016.
  • Airbus: Cathay Pacific ordered 10 A350-1000s and converted 16 A350-900s to -1000s. It still has 20 A350-900s on order from a previous deal. Airbus also booked one order for an A319/Sharklets from Drukair of Bhutan.
  • Boeing: Widely anticipated, GECAS announced that it is committed to 75 737-8 MAXs plus 25 -800s. The deal has to be confirmed into an order. This sort of falls into the so-what category; GECAS was one of the 1,000 “orders and commitments” and this is simply a public announcement of its previous “commitment.” This is not a firm order. Since sister company CFM makes the engines, a deal from GECAS was an eventual certainty. ALAFCO announced a “commitment” to 20 MAX 8s. We believe this is a new commitment, not part of the previously announced 1,000, but we’re not sure. It appears so since Boeing now lists the customers at 17.
  • Pratt & Whitney: BOC Aviation selected the IAE V2500 for more A320 family members. JetStar selected the IAE V2500 for 32 A320s.
  • Superjet: Interjet orders fives more SSJ100s.


Perhaps the biggest news: Boeing finally has released the weights and ranges of the MAX. From the Boeing press release:

Comparative* maximum take off weights and range limits for the Next-Generation 737 and 737 MAX:

MTOW (lb) Range (nmi) Two-class seating
737-700 154,400 3,400 126
737 MAX 7 159,400 3,800 126
737-800 174,200 3,080 162
737 MAX 8 181,200 3,620 162
737-900ER 187,700 3,055 180
737 MAX 9 194,700 3,595 180

*Next-Generation 737 values are calculated with Blended Winglets. Typical mission rules, two-class seating applies.


Assessing the Superjet crash

It’s always dangerous jumping to conclusions about an airliner crash within hours or days after an accident, but the speculation began very quickly after the Sukhoi Superjet went missing yesterday in Indonesia.

Despite the demographic of the passengers on board, Russia floated the possibility the aircraft had been hijacked. This seemed an incredible possibility given the passengers were made up of airline executives, journalists and members of the Indonesian aerospace industry.

The facts, though sparse, seemed to parallel other accidents throughout aviation industry over the decades. The captain of the flight asked for clearance to descend to 6,000 ft from 10,000 ft in a mountainous area where peaks were 6,200 to 7,000 ft (reports varied). It wasn’t clear what the weather was at the time the airplane disappeared, but searches were suspended later in part because of fog.

Descending to an altitude below the mountain tops suggests that CFIT (and pilot error) might be involved. CFIT stands for Controlled Flight Into Terrain.

But the altitude of the crash site was reported to be around 5,800 feet, slightly below the clearance. Does this suggest equipment malfunction? Or did the pilot “break” altitude, a not unknown occurrence.

If weather was a factor, might there have been wind shears at play?

What does this accident do to Sukhoi’s reputation? This column concludes it is destroyed. We aren’t ready to agree with that.(Update, 9:30am PDT: The headline on the column has been changed to suggest there is now an “operational risk” to the program as opposed to the program being “destroyed.”) (Update, 3:30pm PDT: Now the headline is about “reputational risk….”)

If this turns out to be pilot error or a weather-driven accident, why should the plane’s reputation suffer? If it is an equipment failure, a lot of Western equipment is on the aircraft and perhaps the fault might lie there.

What do readers think?

ISTAT Part 2: BBD, EMB, Sukhoi, ATR

Chet Fuller, SVP Commercial, Bombardier

Luiz Chiessi, Director of Marketing Strategy of Embraer

Mark Neeley, VP-Marketing, ATR

John Buckley, VP Business Development, Sukhoi Superjet International

Fuller

  • CSeries weight validated and will be on spec at EIS.
  • Aluminum Lithium is better on fatigue than normal aluminum, much better on corrosion. Combine with composites, D check goes to 15 years. C check improved by 15%.
  • 787 first airplane with All-digital architecture, CSeries is second.
  • Last all-new narrowbody was A320 family.
  • Only aircraft with a 12:1 by-pass ratio; A320neo is 10:1, not sure what ratio Boeing will wind up with on MAX.
  • CSeries has better trip costs than E190, with seat costs of A3320neo. There is no magic here, there is just physics.
  • BBD has on order: 66 CS100, 72 CS300; 124 options, 10 purchase rights, 45 LOIs.

Chiessi

  • Mid-long-haul flights for 70-90 seats increasing in US and elsewhere.
  • 48% of EJet deployment is right-sizing by airlines. 26% for new market development.
  • Will maintain leadership in 70-120 seat segment, not enter into arena of Airbus and Boeing.

Buckley

  • SuperJet International responsible for world product support of Sukhoi for SSJ100.
  • Delivered seven aircraft, another in two weeks.
  • Expect to deliver 23 this year, 42 next year, 60 in 2014, 75-80 total current capacity but can be increased.
  • SSJ100 is only regional aircraft with 2×3, 5 in wider than MD80.
  • 10% less fuel consumption than direct competitor.

Neeley

  • ATR top turbo prop pick in Airfinance Journal investors poll.
  • We’re still making a 50-seat product. We have a family of airplanes.
  • Says ATR 72 has same fuel burn per passengers as A320.
  • One third of all passengers fly under 300 miles.

The Coming Aerospace Squeeze: Emerging Competitors

AirInsight has released a report entitled “The Coming Aerospace Squeeze – a review of commercial aircraft programs in Brazil, Canada, China, Japan and Russia.”  This report summarizes current and planned aircraft programs in each of these countries and the potential impact of those programs on the commercial aerospace market.

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