Zhuhai Airshow begins Tuesday: order announcements expected

The Zhuhai Air Show begins next Tuesday and a visit by President Obama to Beijing for a regional summit starts on the last day of the show, Nov. 16. Accordingly, we expect at least some orders to be announced during the show by Airbus, Boeing and perhaps the other airframe OEMs, including the home-grown COMAC, developer of the C919 and parent of AVIC, the developer of the ARJ21.

The Zhuhai Air Show has evolved into China’s premier show. While not on the international reputation and prestige of the long-established Farnborough, Paris and Singapore air shows, it’s become an important must-attend for OEMs and others wanting to do business in China.

Here is our forecast for next weeks’ event.

Airbus: There are a couple of large A320 family orders that may be pending in China, including one for 100 that was leaked just last Friday. Other A320 deals that have been committed to this year might be firmed up into contract at the show, such as this one for 70. The latter deal was announced, but not as a firm contract, when Airbus agreed to build an A330 finishing center in China. The latter was previously tied to the prospect of an A330 Regional order for between 70-200 aircraft. The A330 Regional, announced at the Paris Air Show in June 2013, is a lighter weight, lower engine thrust variant intended for domestic use. No order was announced at the following Zhuhai or Singapore air shows the following November and February, nor at the Farnborough show last July. China often ties orders to political events or air shows, and for many months it refused to order any A330s because of disputes with the European Union of emissions regulations. These has been postponed, apparently clearing the way for A330 deals–if the Chinese are interested. The finishing center might be the final inducement.

Airbus needs orders for the A330ceo to full the production gaps from 2016-2018. The first A330neo is scheduled to be delivered in December 2017. Airbus announced a production rate reduction from 10 to nine per month beginning in 2016, but the current backlog doesn’t support even this lower rate. So perhaps that rate reduction was based on the knowledge of the long-hoped for Chinese order. We shall see.

Boeing: Boeing has been telling institutional investors it plans to announce orders  at or during the air show. Whether the announcements are held to the 16th when Obama is also in town or they come exclusively during the air show remains to be seen. But whatever deals are announced, carefully watch whether they come out of Boeing’s huge backlog of Unidentfied customers or whether these are new, incremental deals. Boeing has more than 900 737s listed under Unidentified. There are 25 777s in this category. We have seen large Chinese deals emerge from Unidentified in the past so we wouldn’t be surprised to see some buried in these today. The key program to watch will be the 777 Classic. If Boeing announces any orders for these, are they from Unidentified or are they incremental? If the former, it won’t help the production gap for the 777 Classic. If from the latter, there will likely be little impact. Although Boeing claims it “only” needs 40-60 777 orders a year to top off the production gap, this presupposes 100% conversion of existing options and letters of intent–a highly unlikely prospect. The backlog drops dramatically in 2017 and tapers off each year thereafter to 2020’s EIS of the 777X. We still expect Boeing to eventually announce a rate reduction, but not until next year or early 2016, effective in 2017.

Bombardier: It rarely does well at air shows. There might be some deals announced for the CSeries, CRJ or Q400, but don’t count on it.

Embraer: There might be some deals, but Zhuhai hasn’t traditionally been a big event from EMB.

COMAC: China’s indigenous new entrant OEM has typically announced C919 deals and occasionally some ARJ21 transactions. Look for C919 orders.

Flight Global last month published an update on the C919 program (cumbersome free registration required). Notable is how conventional the C919 has become. No composite wings, only 10% composite for the entire airplane.


7 Comments on “Zhuhai Airshow begins Tuesday: order announcements expected

  1. Airbus should shy away from claiming leadership in innovation, they are leaders in neo.
    They did a320neo while Boeing was thinking about a NSA, now they have a330neo, next is a380 neo. while boeing is thinking of cleansheet 757 replacement ab is thinking a321neoLR. Expect a350 neo in 2025. We may see a350 neo sooner if the GE9X engine beats the TrentXWB or if the Trent1000TEN makes the 787 family even leaner than they are now.

    • Airbus is just doing now what Boeing has been doing for 30 years.

      the NEOs are analogous to Boeing’s 737 “Classic” re-engine of the original 737, 737NG reengine of the “Classic”, 747-400, 767ER, 777 (2LR/3ER).

      Airbus is in the fortunate position that their baseline designs are 20-30 years newer, which allows them to follow Boeing’s strategy of the 80’s and 90’s.

      Boeing meanwhile is in the unfortunate position of needing true generational upgrades/replacements for all the 50’s (737, 757 based on 707 fuselage) and 60s (747) based designs.

      Boeing needs to get truly innovative, things that take advantage of all the recent materials (both CF and Al-Li) and aerodynamic advances such as side by side double bubble to get lifting body properties out of the fuselage, BWBs (the passenger acceptance arguments against this are specious, if people will put up with 28×17 seating transcon, they will get used to no windows when provided with video monitors in exchange).

      Either that or accept being #2 and falling (EMB and BBD would love to take their spot). Boeing needs to stop paying attention to Wall Street’s obsession with maximizing short term shareholder value and make the hard choices in order to be a world leader for the next 50 years.

      • If you visit this link http://en.wikipedia.org/wiki/Boeing_737 and compare the specification of all the 737 series, you will see that what you have said bout Boeing doing neo for 30 years is incorrect. the changes for each new 737 series from 737-100 to 737 NG were more than just a new engine.

    • One of Microsoft’s methods to fend off competition was to announce new products “just around the corner” boasting rather vague improvements that would when released instantly demote superior competing products available at the time to “further running”.
      This worked surprisingly well with a naive consumer base.

      Boeing loundly thought about a new product that they later conceded had zero chance to be produceable in a reasonable timeframe.

      Success of the NEO indicated that nobody really believed Boeing to be able to deliver and tactics had to be changed on the fly.
      The first MAX propositions seem to have been even more diffuse than that potential NSA product 😉

      • Uwe, that strategy (“fear, uncertainty and doubt”) was pioneered by IBM in the 1960s mainframe computer days …

        • Microsoft perfected it without ever having backup from a worthwhile product 😉

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