Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 23. Development risks. September 6, 2024
- If a strike occurs, here’s what Boeing can do September 5, 2024
- China banks on C919, but numbers say it still needs Boeing September 2, 2024
- Bjorn’s Corner: New engine development. Part 22. High Turbine technologies. August 30, 2024
- The A330 for medium haul or twice the frequency with A321XLR? Part 1 August 29, 2024
Dubai Air Show review
The Dubai Air Show is over, with record orders being announced.
2 x B777F for Qatar
20 x A320neo for ACG
45 x A320neo/30 x A320 for Spirit (MoU)
50 x A320neo for Qatar with PW1100G-JM (+30 options)
5 x A380 for Qatar (+3 options)
ALAFCO announcing GTF for all A320neo
Emirates 50+20 777-300ERS
10 x CS300 for Atlasjet (LoI)
We took a bye on daily coverage because we weren’t there and the on-site reporters could do better than we could from afar. So we decided to do a post-show pontification.
Overview
Airbus and Boeing dominated the headline–no surprise there–but while Boeing had a blow-out order with 50+20 777-300ERs from Emirates Airlines, Airbus had another mind-xxxx from the mercurial Akbar “U-Turn” Al-Baker, CEO of Qatar Airways. Al-Baker is now the subject of a mocking Twitter account, @AkbarAlFaker, having a conversation with @MichaelOhReally.
This Bloomberg story gives a nice wrap.
Airbus
Al-Baker’s performance at the Dubai Air Show outdid his shenanigans at the Paris Air Show. There, he canceled an Airbus press conference by being a no-show. The neos and A380s ultimately announced at Dubai were supposed to be announced at Paris. Although there he claimed he was stuck in traffic (entirely plausible but entirely disbelieved), he threw a snit directly at Airbus for changing the A350-1000 specifications without telling him (or so he claimed). This snit continued at Dubai.
Al-Baker canceled a press conference moments before he was to sign and announce the order for neos and the A380s, threw another public snit directed toward Airbus and then reversed course again within three hours and signed the deal. Thus, U-Turn Al set his own record by two about faces within three hours.
The rest of the Air Show for Airbus was pretty good, with 211 orders and commitments though few for wide bodies. The record-setting (for orders, that is) went to Boeing.
Boeing
Emirates ordered 50+20 777-300ERs in a record by value that was by any standard a blow-out order. It is also a tremendous validation for the airplane. Coupled with the rescheduling of the A350-1000 and the delay on EIS for the -900, it looks like any need to proceed with an update will slide. Having said that, Emirates CEO Tim Clark is pressing Boeing to go forth with an improved version of the 777 with better economics and slightly more range.
Boeing announced there are now more than 700 commitments for the 737 MAX. Oman Airways took over a small 787 order from a lessor.
Bombardier
BBD announced an order for 10-5 CSeries from a new customer, AtlasAir of Turkey. A small order for the CRJ-900 was also announced at the show.
Embraer
Not much news.
CFM International
CFM added some orders to its LEAP A320neo book.
Engine Alliance
EA was expected to win the order for Qatar’s A380s but in all the Airbus chaos we’re not sure what happened.
GE Engines
Qatar was expected to announce it had selected the GEnx for its 787 order but in all the Airbus chaos we’re not sure what happened.
Pratt & Whitney
Qatar did announce it selected the PW GTF for its A320neo order, after an agonizing two years in which Al-Baker tortured PW publicly.
PW’s JV International Aero Engines also won some A320 Legacy orders. And, of course, PW powers the CSeries order referenced above.
Rolls-Royce
Rolls announced a couple of minor deals on Airbus A330s.
Overall it was really a show for the B-777 and the A-320NEO. It also seems to have been good to P&W. Like you Scott, I have no idea what engine QR is wanting for either their A-380s or their B-787s.
By my count Scott, there were a total of 211 airplanes (not including options, or the CRJ-900 order), from all OEMs ordered, not 211 just for Airbus. By my figures Airbus got 150 new orders, Boeing got 52 new orders, and BBD got 10, not counting options, or the “small” order for the CRJ-900.
Just how many CRJ-900s wer ordered, and by whom?
Could Boeing be offering rather cheap 777 to saturate the market
in /against the? advance of the A350-1000 ?
i.e. what is known/guessed about actual prices?
Only Boeing and EK know the price but discounts of up to 40% are pretty common, up to 50% not unknown.
Of course they could. But in the current environment why should they and what is there to indicate that is what is happening.
Could the same question be asked of Airbus and the A-320NEO?
Tim placed the largest order for A-380s in history (90?) just a few years ago. Do we know what he is paying for those airplanes? My guess is he got substantial discounts from Airbus for the A-380s and equilly substantial discounts from Boeing for the B-777s. But, I doubt either OEM made those sales at a loss.
Were the results in line with expectations? Were there any surprises outside of the Qatar drama ? I do note a news release today indicating that Airbus is looking into the possibility of A330 conversions from passenger models to freight. Shouldn’t this be considered an aftereffect of the Show?
Can St AERO make the conversions sufficiently economical to compete with B 767 conversions?
Quatar drama unexpected ?? 😉
A330 P2F seems to be an already incubating programme ( predominantly for -300 )
http://www.flightglobal.com/news/articles/singapore-2010-airbus-might-launch-a330-300-p2f-conversion-this-year-337844/
The A320 P2F programm was canceled this year due to unavailability of used acceptably priced airframes ( and maybe some unspecific nonpublic hassle )
Thus (Airbus) EFW Dresden is said to have the capacity available.
posted 2 years ago, A330-300 P2F offered:
http://www.flightglobal.com/news/articles/cargo-conversions-hope-springs-eternal-334021/
I suspect Uwe’s point about the A320 conversion program also applies to the A330: there is a lack of quality candidates for the conversion. As a rather less attractive passenger plane, there will be more suitable 767s available. So Mr Al Baker may actually be better off converting 767s anyway, in spite of his rant.
Incidently, Qatar stated it was looking for 15 A330 conversions. Would this be enough in number for St AERO to open this as a new line.
I do believe there are several other reliable companies that are in this line of business but the news release indicated specific negotiations with St AERO.
There would be many more B767 available and at cheaper prices
The whole subject of converting older passenger models into cargo planes must have a range of benefits and disadvantages. I would guess that if the carrier is using its own planes, there is a large benefit because the planes have already been substantially amortized.
Do some models lend themselves to easier conversions than others. Can one extend the life of the plane for substantial periods of time.
Perhaps some one with knowledge can make some general overview comments.
The Atlasjet order for ten (15) CSeries came as a surprise to me. Instead I expected Gulf Air to confirm their previous commitment as an “anonymous buyer”.
The orders for the CSeries are still small and far between, but nevertheless the program is doing well, if not spectacularly well, and they seem to have a great future in front of them.
In the meantime what I would like to see is a detailed progress report that would give us a better idea where they are with design, testing and production.That way Bombardier could demonstrate that they are still on track, or announce a delay. One way or another it would lift the cloud of uncertainty that surrounds the program at the moment.
Might happen at the Bahrain air show instead. In January.
Industrial secrets, strategic move with the Neo +Max projets and design, low profile from the French Canadian culture guys of Bombardier, and you obtain this kind of story:
http://www.ainonline.com/?q=aviation-news/dubai-air-show/2011-11-12/cseries-track-first-flight-second-half-2012
Enjoy !
That’s the kind of progress report I was looking for. Thanks for the link!
This is the count of the Boomberg report
Very Interesting question, we will never know, but a solid analysis can be seen here:
http://theblogbyjavier.com/2011/10/15/what-is-the-price-of-an-a380/
And more here:
http://theblogbyjavier.com/2011/01/30/boeing-commercial-aircraft-discount-update-for-2010/
Years ago when Ryanair bought the last big batch of 738 it is widely believed they got “more than average” discounts – but at that time airlines deferred orders, and Boeing (and Airbus as well) was fighting to keep production lines running and needed the cash flow.
The situation today is the opposite, and why should they give their products away – I can’t mention one valid reason that could justify it in a period when airlines every morning can be seen in a long line at the front door begging for delivery slots.
My interpretation ( that will probably be met with derision ) is that under that cool facade Boeing is real frightened. Not just now but for quite some time already. Year after year
more ingenuity goes into kooking the books to appease shareholder but not much gain in the real world.
Thus they tried to change market mechanics by offering a “super duper plane” at “bargain sale” prices. Not to actually produce that plane in the announced timeframe but to drain the
available market into their order book, bind customers to avoid defection and to dry up airline resources available to order from Airbus.
This worked quite well ( to Airbus absolute surprise ) .
What did not work out as planned was the financial crash (a premeditated thing) and the way it had impact on Boeing in one way and Airbus a bit differently. Overall the slump had more impact on Boeing and was shorter than expected. The Dreamliner was not ready for the reactivating markets and the A330 started to sell rather well.
With the MAX we currently see a similar approach to create an overhyped product.
777NG gets some testing limelight but imho the believable timeframe is just too long.
So my guess : Just like the 737 last year the 777 is sold at prices one cannot turn away from.
What “cooking of books” are you referring to specifically? What evidence do you have?
Uwe, if you know the books at Boeing are being “kooked”, then you should notify the IRS and FEC. In the US, people go to jail for that sort of thing.
The B-787 was a feassco of biblical proportions for Boeing, but now the airplane is finally in service and deliveries have begun.
Steen Foldager Pedersen just posted blogs of the Airbus and Boeing sales discounts. It seems the A-380 discounts run about 38% (probable the same for all Airbus products), while the Boeing discounts run about 39%. The Boeing blog says the average sales price for a Boeing is just over $1,000 per kg of airplane weight, at the discounted prices. I wonder what Airbus’s average would be using that scale?
You are entitled to your guess, but that is all it is, a guess. It is no more valid or invalid than a guess at pricing I have.
The MAX is no more overhyped than the NEO is.
I don’t think Boeing is frightened about anything Airbus is doing. Boeing does not answer to the EU like Airbus has to. Boeing answers to the US and its sharholders. Their modives are profit driven, not by airplane sales count. In Dubai, Boeing sold about $18 BILLION worth of airplanes to Airbus’s $17.6 Billion (both at list prices), even though Airbus sold 3 X the number of units Boeing did.
Interesting article on “Why 777” :
http://atwonline.com/aircraft-engines-components/news/emirates-777-order-was-insurance-against-a350-delays-urges-a380-str
Just hedging A350 delays !?
“Just hedging A350 delays !?”
Hedging involves betting ones own money on what they believe to be a viable outcome. They bet 777 with their $16B wallet… What does that say about this management team?
They actually are “managing” their airline.
( compares favorable to some other fasttalkers like one Mr. Joyce )
.. and it is an indication on what parts of the market think will happen.
Things will stay interesting.
I understood that QR intended to convert their existing fleet of 330’s so suitable frames should not be an issue.
Five years hence, as the 787 deliveries pick up, there could be lots of suitable conversion candidates.
I suspect is is simply a matter of engineering resources causing Airbus the headache.
Why launch something for which only QR, currently, has use for? Lucky them, they have their A330s to convert immediately but other airlines will struggle to find suitable frames at an attractive enough price + the conversion costs to have their freighter fleet. Several times Airbus said that they had reshuffled the production slots to pump out more pax frames than the freighters as there is a huge demand for them.
“I suspect is is simply a matter of engineering resources causing Airbus the headache.”
That’s the reason for having ST Aerospace on board.
“Five years hence, as the 787 deliveries pick up”
I suspect there is a big question mark around the production and ramp up achievable by Boeing.
Airbus will eventually launch this programme but it won’t be because @AkbarAlFaker says so. There is bigger fish to fry, than QR, when it comes to the P2F market.
If an airline wants a substantial number of big twin before say 2018, there really isn’t alternative to the 777-300ER. 50 + 30 of them is enormous, far bigger then the other other during the show.
As acknowledged by Leahy himself…
“… if you need lift now, you are going to buy a 777. It is what it is”
http://www.aviationweek.com/aw/generic/story_generic.jsp?topicName=dubai_2011&id=news/awx/2011/11/14/awx_11_14_2011_p0-393898.xml&headline=Airbus:%20No%20Intention%20To%20Cancel%20A350-800
Another interesting takeaway from that is that A358 will not be cancelled. I guess this puts to bed the A330neo.
Indeed. From ATW:
“Emirates (EK) president Tim Clark confirmed to ATW that its order for up to 70 Boeing777-300ERs was an insurance against late deliveries of the Airbus A350 (ATW Daily News, Nov. 15). “We do not want to be caught out with a capacity shortfall,” he said.”
http://atwonline.com/news/other-headlines/
Look for a discussion on Boeing accounting, inventory and a look at international versus US bookkeeping on this site ~september.
KC135TopBoom noted that “In Dubai, Boeing sold about $18 BILLION worth of airplanes to Airbus’s $17.6 Billion (both at list prices).” From what I have read it seems U-turn’s antics where largely about price. Guess who isn’t discounting so much any more? With the NEO’s backlog don’t think Airbus need to do much. I guess real value of Airbus’s Dubai orders will be much more than Boeings