Here’s what to look for in 2014 in commercial aviation.
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.
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.
Observers note that there have been remarkably fewer test flights for the CSeries compared with the A350 and 787-9 programs. Flight Test Vehicle 2 only took to the skies for the first time just days ago (it was supposed to fly in November). Bombardier says this is all to plan. Observers are not convinced.
We expect Bombardier to announce a new delay for EIS during its year-end earnings call next month. Aerospace analysts already have EIS in the first quarter of 2015 and we long ago concurred. We won’t be surprised if it is longer.
The industry will be watching closely 2014 sales for the CSeries: how many commitments are converted to firm orders and whether Bombardier will win two key campaigns, Air Canada and Monarch Airlines.
Bombardier also needs to convert some of the several hundred commitments for the Q400 to firm orders. The current firm backlog is in the low double digits.
CRJ continues to hold on with meager sales. Bombardier is planning a set of PIPs to refresh this series.
This is a year of more-or-less status quo. Development of the E-Jet E2 continues. PIPs are underway for the E-Jet E1. Sales of the E1 are needed to bridge the gap between the current airplane and the 2018 EIS of the E2. Embraer will make a pitch for the Air Canada business, challenging Bombardier.
COMAC is making progress, sort of. It’s still trying to get the ARJ-21 regional airliner certified. The C919 “iron bird” has been launched. But programs are running years behind. The ARJ-21 was obsolete when it was designed. The C919’s economic advantage will be gone by the time it enters service, competing with the 737 MAX and the A320neo, which didn’t exist when C919 was conceived. The ARJ and C919 may as well be considered two massive R&D projects. Commercial hopes are non-existent.
Mitsubishi is years late with its MRJ and it still has only three customers for the MRJ90. This program is in trouble.
The Irkut MC-21, which will be renamed the YAK 242 by EIS, continues in development. It competes with the A320/A321 and 737-800/8-900ER/9 on paper but that’s about it. Suggestions that this will be the replacement airplane for the Boeing 757 are laughable.
Superjet SSJ100 remains a troubled, niche airplane.
GE Aviation and Rolls-Royce continue to undertake PIPs for the 787’s GEnx (which is also on the 747-8) and Trent 1000 engines. GE/CFM continues development of the LEAP engine. Rolls-Royce is designing a new engine that could well be a basis for the 757 replacement Boeing is planning. Pratt & Whitney is involved in the CSeries flight test program and gearing up for the A320neo flight testing. It’s also looking at larger engines.