Feb. 12, 2018, © Leeham Co.: The Singapore Air Show last week produced little in the way of new orders from the Big Four airframe OEMs. ATR announced a few deals and Embraer announced a letter of intent for the KC-390 multi-role tanker-transport.
The headline news revolved around the what-ifs: Boeing and the New Midrange Aircraft and Boeing and the link-up with Embraer.
Let’s look at the NMA first.
Boeing’s not ready to launch the NMA program, officials acknowledged. The business case hasn’t been closed.
Boeing is still evaluating engines from CFM/GE, Pratt & Whitney and Rolls-Royce.
GE says it won’t pursue a geared turbo fan design for the NMA, according to press reports from the air show. PW and RR apparently didn’t make any comment. An engine in the 50,000 lb thrust class is needed, up from 42,000-45,000. This suggest the airplane is already taking on weight and, perhaps, mission-creep.
CFM, the joint venture between GE and France’s Safran, can only go up to 50,000 lbs by the JV agreement. The reporting says this cap would be waived, however.
Boeing officials also said the NMA economic improvement target is 30% over the Boeing 757/767—a figure that LNC has heard previously through its own market intelligence. Now it’s official, more-or-less.
The message is coming from the top and it’s being repeated over and over right down the line: the NMA business case rests in part on new production processes that will eventually be applied across the entire Boeing product line.
This is accelerating a transformation that began, albeit with lots of pain and agony, with the 787. The 777X is the next big step, with wing production and upright fuselage automated and robotic processes.
Boeing also began automatic wing production segments for the 737 as it ramps up to 52 airplanes a month this year and 57 next year.
These are only the start. The supply chain, already under stress from cost-cutting at Airbus and Boeing (as well as Bombardier, Embraer and industrial partners to them), must prepare for this transformation.
The Pacific Northwest Aerospace Alliance (PNAA) annual conference begins tomorrow in Lynnwood (WA), north of Seattle. Production transformation is a key theme. I’ll be at the conference, reporting throughout the week.
It’s also the theme of the Airfinance Journal-Leeham Co. Southeast Aerospace & Defense Conference June 25-27 in Mobile (AL).
Although the proposed tie-up between Boeing and Embraer wasn’t relevant to the Singapore Air Show per se, with both companies present, questions inevitably came up. The news, however, really came from elsewhere.
It now appears, as widely speculated, that a joint venture (whether it’s legally structured as such) including Embraer commercial and business operations will be created. Media reports suggest the new business will be 80%-90% owned by Boeing, with the rest in Brazil. The company would be based in Chicago, reports indicate.
Embraer’s defense unit will remain in Brazil, with local ownership.
The companies aren’t confirming these reports.
If this scenario plays out, then it’s my view Embraer Commercial Airplanes president and CEO John Slattery should be the president and COO of the new commercial/biz jet company. I assume Boeing will name the CEO and chairman.
I think Slattery probably knows the 100-150 seat market better than Boeing and I think he certainly knows competing with Bombardier better than Boeing.
The feisty Irishman, with the heft of Boeing behind him, would be an extremely formidable competitor to Airbus-Bombardier in this segment.