Odds and Ends at the Paris Air Show, Day 2
Airbus owned the day again with a bunch of orders, including capturing a Boeing 737 operator, Garuda Indonesia. For the A320neo (In this context, we’re not counting SAS, which already operates A320s.) Up to now, Boeing has been dismissing the sales of the neo as being only to A320 airlines, as well as winning deals on price and asserting the neo only brings the airplane to “parity” with the 737-800. Airbus’ John Leahy, COO-customers, counters that airlines aren’t buying Boeing’s line and are buying the neo because it is more efficient than the 737-800. So, it would seem, lessors are also convinced. ILFC previously ordered the aircraft. Air Lease Corp, CIT Aerospace and GECAS also placed orders.
The ALC order could be considered particularly significant. Its CEO, Steven Udvar-Hazy, previously was cool to the neo and now placed a bet for 50 of them.
Expectations for Boeing had generally been low, since Boeing seems to go out of its way to say it doesn’t “save up” orders for air shows (though in reality, neither does Airbus). But Boeing made a big splash yesterday with 17 orders for the slow-selling 747-8. It added two more today from GECAS, along with a mixture of 777s and 737s. The Wall Street Journal has a good summary of Tuesday’s orders, and a general recap of Monday’s, here.
Bombardier The Canadian company announced an order for 10+10 CS300s from Korean Airlines, with purchase rights for another 10. With four new orders announced within the last three weeks, is this the momentum the market has been looking for? The actual numbers are still modest. The four orders aggregated to 33 firm ones plus options, bringing the tally to 123 firm. While some may consider the number small vs. Airbus (and it is) and Boeing, BBD’s Gary Scott said that his sales team is seeking a variety of customers to have a broad base by the time the airplane enters service in 2013. He previously predicted there will be orders for e300 by EIS.
At a press briefing by Pratt & Whitney president David Hess, Hess remarked that BBD’s production slots are no sold out until 2015. PW provides the GTF engine for the airplane. BBD eventually plans to ramp up production to 20/mo, but plans to go slow initially.
As we forecast on AirInsight, CFM landed its first orders and a lot of them. This provides robust competition to PW, which already has planned upgrades to the GTF to improve fuel efficiency at the rate of about 1% per year. PW forecasts that it will have 1m hours of operating experience by the time A320neo enters service in October 2015.
CFM rejigged its engine with a larger fan and a seventh LPT stage to improve fuel efficiency, which fell short of the GTF. Competition between the two OEMs will be particularly intense for many of the neo orders announced today by Airbus.
Pratt & Whitney
See CFM. Through Tuesday, PW edged out CFM in the engine order race.
CFM was selected for 172 aircraft (135 LEAP, 37 CFM56. PW powers the CSeries, NEO and MRJ, for which 180 orders were placed plus five aircraft powered by the PW4074D. We expect that to change with one or more anticipated big orders that will be powered by LEAP. TBD A large number of NEO orders did not include a selection.