Jan. 24, 2018, © Leeham Co.: Dublin, Ireland: Even as new airplane programs are winding down at the Big Four OEMs, 2018 will be a year of transformation for the commercial aerospace industry, LNC told an audience at the 2018 Airfinance Journal Conference in Dublin yesterday.
Airbus is wrapping up its A320neo family program. The last model, the A319neo, will enter service this year.
Boeing’s 737 MAX family is progressing. The MAX 9 enters service this year, followed by the MAX 7 next year. The MAX 200 EIS is also in 2019 and the MAX 10 EIS is in 2020.
The Boeing 787-10 was certified by the Federal Aviation Administration this week. It enters service this year, the last of the 787 models.
The 777X is two years away from EIS.
Bombardier’s C Series twins have entered service. Embraer’s E2 family enters service this year with the E190-E2 followed by the E195-E2 next year. The E175-E2’s future depends on relief of the US labor union Scope clauses; EIS is currently slated for 2021.
But there will be important transformations this year despite the dearth of new airplane programs.
Airbus and Bombardier are working toward closing the deal announced last year in which the former took a 50.01% stake in the C Series limited partnership BBD created during the bailout of the program.
The deal is undergoing anti-trust review through a host of regulators in a variety of countries. Approval is expected, though Brazil is one of the countries that must review the transaction. Given Brazil’s complaint with the World Trade Organization and the direct competitiveness of Embraer to the C Series, how Brazil views the deal will be of more than passing interest.
The assumption is that the transaction will close this year. This gives Airbus a solid product line from the 100-seat CS100 through the 800-seat A380.
The larger CS300 is the same size as the A319neo, but with better economics. Airbus sold only 55 A319neos and 19 of these went away last week when Frontier Airlines swapped them for the larger A319neo. If there is a future for the 319 in its present form, it’s only as an Airbus Corporate Jet.
The CS100 and the 130-seat CS300, cover a segment that Boeing does not.
Boeing and Embraer
The 737-7 MAX has an estimated 63 sales (or 58, if a report Jetlines of Canada cancelled). Its future as an airliner is in doubt.
Southwest Airlines, the largest customer with an order for 30, will take seven of the orders next year. But it deferred 23 until 2023-24, and an up-gauging to the larger 737-8 seems likely. The MAX 7’s future seems to be more with the BBJ and military than it does with airlines.
A proposed combination with Embraer will be a major transformation, if the Brazilian government approves. This will give Boeing the EJet family, but a gap still will remain between the 120-sest (two-class) E195-E2 and the 168-seat 737-8.
The important part of this combination seems less the airplanes and more the Embraer resources, mainly engineers and low-cost production facilities and know-how.
With a decision looming by Boeing whether to proceed with the New Midmarket Airplane (NMA), and more than 5,500 Boeing engineers and technicians reaching retirement age in the next 5-10 years, Embraer’s engineers will be idle with the wind-down of the E2 program. Their expertise on the NMA will be welcome.
As important as the consolidation among the Big Four OEMs is, the transformation in manufacturing is more so.
In addition to Boeing facing retirement of 5,500 engineers and techies, its touch-labor workforce is similarly aging. Automation, 3D printing, additive manufacturing and step-changes in manufacturing is required to replace the white- and blue-collar workers, meeting rising production targets and dramatically cut costs. In addition, price competition between Airbus and Boeing is as fierce as ever.
Some of these new manufacturing techniques are being implemented already by Boeing and increasing on the 777X. Industrial suppliers to Airbus and Boeing are moving toward these advanced techniques. Bombardier’s wing plant in Belfast is one of the most advanced in the world.
Airfinance Journal and LNC have organized a major conference June 25-27 in Mobile (AL) that will focus on this manufacturing transformation. Information may be found here.