Odds and Ends: Bombardier lands Delta’s RJ deal; 787 events in perspective; Airbus/China; Enders victory

Delta Air Lines: Bombardier, in a welcome development, landed a major order with Delta for 40+30 CRJ900s, beating out Embraer’s E-Jet proposal. Delta has a large, installed base of CRJs and EMB wasn’t too optimistic, in management-analysts meetings last week, according to research notes. But BBD liked its odds, considering the CRJ is more fuel efficient than the E-Jet (being a small airplane), even if the E-Jet is far more comfortable.

For BBD, the order is important for two reasons. First, the CRJ backlog is shrinking. Deliveries begin 2H2013, and this illustrates the point. Second, with BBD sucking up cash in advance of CSeries first flight in 1H2013, the deposits, progress payments and delivery payments are welcome, indeed.

The next face-off between the two OEMs is American Airlines, where both have large installed RJ fleets of aging aircraft.

Boeing 787 events: Airworthiness Directive. “Emergency” landing. AirInsight puts things into perspective.

Airbus lands China orders: Hmm. EU suspends plans to impose ETS tax. Airbus lands orders for 60 A320s and 10 A330s. What do you make of that…

Enders now 1-1, sort of: Tom Enders, CEO of EADS, lost his bid to acquire BAE Systems due to German government interference. The merger would have reduced government meddling, balanced EADS commercial and military business, put EADS on a more equal footing with Boeing and positioned EADS better for US DOD contract bids. But Enders has now won a corporate governance restructuring that ends government meddling in daily operations. He still hasn’t achieved his other goals, but this one is so huge that we rate Enders’ won-lost record 1-1.

Comparing the 747-8I and the A380 after the advertising battle commenced

Notation: Aeroturbopower weighs in on the controversy with his usual data-driven analysis.

With the commencement of the advertising battle between Boeing and Airbus, it is useful to make some additional comparisons prepared by AirInsight.

Here is the offending Boeing ad that set off the ad wars. It’s a two-page spread and sorry, we couldn’t scan it into one advert. Click each image to englarge.

From AirInsight:

The 747-8I and A380 are quite different aircraft, and while some view them as direct competitors, they are more properly lone players in different segments of the VLA market. Nonetheless, an airline will likely evaluate both aircraft as it maps its growth strategy, and two carriers, Lufthansa and Korean Air, have chosen to fly both aircraft types for different route structures.  Each of those airlines have indicated that the 747-8I fills a gap between their 300 seat aircraft and 525 seat A380 aircraft, and will deploy the aircraft appropriately to traffic demand and traffic growth in different markets.

While the two aircraft are quite different, they are still compared to each other and both aircraft mile and seat mile economics.  Of course, in comparing these aircraft, seating configurations make quite a difference, and the two aircraft manufacturers utilize markedly different assumptions in that regard.  Boeing indicates that standard 3-class seating configuration for its 747-8I is 467 seats, but Lufthansa is currently using 362 in its aircraft, compared with 334 in a 747-400, and 526 for its A380.  Each of these layouts is oriented heavily towards premium class seating, an essential element for many carriers these days.

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New battle emerging in Asia

Our AirInsight affiliate has published a short report in its e-newsletter (subscription only) about a new battle emerging among LCCs in Asia.

An excerpt:

A new head-to-head battle appears to be shaping up in Asia.

Indonesia’s LionAir announced plans to create a new LCC, Malindo, which will be based in Malaysia and take on AirAsia.

AirAsia previously announced plans to acquire Indonesia’s Batavia Air—a deal that’s under regulator review and which may or may not consummate—in a bid to further penetrate the Indonesian market against LionAir.

AirAsia and LionAir are the two behemoths in the region, excluding flag carriers. AirAsia operates 100 Airbus A320s and has 272 more on order. It is poised to place an order for up to 100 more any day now. AirAsia was a launch customer for the A320neo and has been urging Airbus to proceed with a re-engining of the A330 to produce an A330neo—a move Airbus has so far resisted.

LionAir operates about 70 Boeing 737NGs and has an astounding 337 on order. It is the launch customer for the 737-9 MAX and was the first customer to sign a firm contract for the airplane. LionAir is poised to order 100 Airbus A320/A321 neos, presumably for the new venture.

Odds and Ends: Airbus & Boeing White Elephants; BABC conference; CSeries stalking horse

White Elephants: Bloomberg News doesn’t pull any punches in this article.

747 No. 1 needs help: The Seattle Times has this long story about the first 747-100 that needs restoration.

BABC Conference: The British American Business Council has a conference Sept. 27 in Seattle, with focus on the Middle East. (Go figure.) Here is the link. Tim Clark, CEO of Emirates Airlines, is a key speaker.

CSeries Customers: Here’s a complete listing from Bombardier, the most detailed we’ve seen: The CSeries aircraft order book includes firm orders for 138 CSeries airliners from Braathens Aviation (five CS100 and five CS300 aircraft), Deutsche Lufthansa AG (30 CS100 aircraft), Korean Air (10 CS300 aircraft), Lease Corporation International Group (17 CS300 and three CS100 aircraft), PrivatAir (five CS100 aircraft), Republic Airways (40 CS300 aircraft), an unidentified major network carrier (10 CS100 aircraft), an unidentified European customer (10 CS100 aircraft) and a well-established, unidentified airline (three CS100 aircraft). The CSeries aircraft program has also booked options for 124 aircraft and purchase rights for 10 aircraft from these customers. In addition, the CSeries aircraft program has also achieved a conditional order placed by an unidentified customer for five CS100 and 10 CS300 airliners, as well as three letters of intent: for up to 30 CSeries aircraft from Ilyushin Finance Co; for up to 15 CS300 aircraft from Atlasjet; and for up to 20 CS300 aircraft from airBaltic.

AirAsia and CSeries: CAPA (Centre for Asia Pacific Aerospace) writes what we also figured: the buzz from the Farnborough Air Show about AirAsia and the CSeries seems to be more a ploy than a serious effort. Setting that aside, the CAPA piece is a pretty good analysis of the CSeries potential for low cost carriers.

The Sporty Game: AirInsight has an analysis on Boeing’s product strategy.

Odds and Ends: Crummy DOT data and why we’re skeptical; 787 deliveries; PAL and A321 deliveries

Crummy DOT Data: We’ve previously written that we, and AirInsight, are skeptical about airline data filed with the US Department of Transportation. AirInsight doesn’t rely on it at all when doing aircraft economic analysis. We are openly skeptical of Boeing’s reliance on DOT 41 data when comparing maintenance costs of the 737 vs the Airbus A320.

Aviation Week has this item that illustrates precisely why we think DOT 41 data has to be viewed with great skepticism.

Airbus Mobile and Washington State: This Op-Ed in, of all places, The Seattle Times, explains how Washington State will benefit from Airbus’ new Mobile (AL) plant. Says what we’ve been saying for a long time. Misses the fact that WA is the No 1 or No 2 supplier to Airbus in the US by company count and No. 6 by dollar volume.

787 Deliveries: 17 and counting, with Air India, Qatar and others to deliver shortly. We are feeling more and more confident Boeing will hit its target of 40 deliveries this year, with just four months and a few days left.

PAL’s Big Airbus Order: This has been written up a lot, so it’s no surprise. What caught our eye was Aviation Week’s report that says Airbus found A321 delivery slots next year. Who deferred or who cancelled to find these slots in a production line that’s supposed to be sold out to mid-to-late this decade?

A350 Supply Chain Challenge: Aviation Week has this article about changes to the A350 supply chain and change incorporation.

Odds and Ends: Dire outlook for airlines; 787 Deliveries; American-USAirways

Dire Outlook: This article is nothing to cheer about. The author predicts a low growth in global GDP, and this is what Airbus and Boeing rely upon for their growth and production forecasts. It says airlines are emitting much more pollution than generally thought, and if true, this means more costs (especially in Europe) in fees. Also buried in the article is the revelation from Air New Zealand that it costs the airline $1.25m to operate a Boeing 777-300ER round trip from NZ to London, with more than 50% of the cost being in fuel. No wonder the prospect of the Boeing 787 and Airbus A350, with 20% lower fuel costs and 25%-30% lower trip costs, is so important.

787 Deliveries: They are still slow but they are picking up, and it will be about 1 1/2 years before the backlog of airplanes parked at Paine Field in Everett is cleaned out. But it’s progress.

American-US Airways: AirInsight has a podcast discussing the disruptive impact of a merger here.

Odds and Ends: More on 100-149 seat jet market; aircraft op cost comparisons; Super Guppy

100-149 Seat Market: AirInsight has more on its study of the 100-149 Seat Market analysis and why it will be turbulent in the next five years.

Cost Comparisons: Aspire Aviation has a long article on the Cathay Pacific Airways earnings but to us the most interesting parts are the operating cost comparisons between various CX fleet types. It’s all buried in the article.

Super-Guppy: The Puget Sound Business Journal has a video from inside the NASA Boeing Super Guppy. Based on the old Boeing Stratocruiser, the Super Guppy is a specialty airplane originally designed to transport Atlas rockets. Later, Airbus used them to transport fuselage sections around Europe to final assembly in Toulouse. This is probably the last operating variant of any B-377/C-97/KC-97. It’s the last of the Super Guppies. With the retirement of the NASA Shuttle fleet, we wonder what will become of this airplane.

100-149 seat market isn’t ‘Bermuda Triangle’ for the right airplanes

A new study released today by AirInsight concludes the oft-maligned 100-149 seat market is viable, and not a ‘Bermuda Triangle,’ if the right airplane is developed to compete within it.

We’re a co-author of the study, Market Analysis of the 100-149 Seat Segment.

Some aerospace consultants, analysts and observers–as well as Boeing’s Randy Tinseth, VP-Marketing–term the segment a Bermuda Triangle because of airplane “failures” in the market. But the fact is that except for Embraer’s E-Jet, the poorly-conceived British Aerospace/Avro Jets and Bombardier’s pending CSeries, there hasn’t been a clean-sheet design since the 1960s. All other aircraft have been derivatives of older designs and offerings of weak and dying manufacturers.

We need to add the Sukhoi Superjet SSJ100 to the clean-sheet design list, but this falls into the weak OEM category.

Today there are six aircraft types and 15 sub-types from five OEMs. (There were seven and 16 until Tuesday, when Boeing finally dropped the 737-600.)

AirInsight has an analysis of the future of the A319/A319neo and 737-700/737-7 Max here.

Here is a run-down.

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Farnborough, Day 2: Dullsville; 737 MAX weights, ranges

Update, 8:30 PDT: If anyone thought Airbus’ John Leahy doesn’t have some orders up his sleeve, get a gander at this from Reuters:

Airbus sales chief John Leahy was in typically combative and upbeat form: “The party’s over?. Why, it’s only the second day of the show, for heavens’ sake,” he said of suggestions orders were drying up. “We’ll have some important announcements.

Original Post:

Another reason we’re glad we didn’t waste our time and money going this year: a dearth of activity.

  • Bombardier: Air Baltic signs LOI fo 10+10 CS300s, replacing its Boeing 737 Classic fleet. Delivery from 1Q15. This delivery date is interesting; BBD had said the line was sold out to 2016.
  • Airbus: Cathay Pacific ordered 10 A350-1000s and converted 16 A350-900s to -1000s. It still has 20 A350-900s on order from a previous deal. Airbus also booked one order for an A319/Sharklets from Drukair of Bhutan.
  • Boeing: Widely anticipated, GECAS announced that it is committed to 75 737-8 MAXs plus 25 -800s. The deal has to be confirmed into an order. This sort of falls into the so-what category; GECAS was one of the 1,000 “orders and commitments” and this is simply a public announcement of its previous “commitment.” This is not a firm order. Since sister company CFM makes the engines, a deal from GECAS was an eventual certainty. ALAFCO announced a “commitment” to 20 MAX 8s. We believe this is a new commitment, not part of the previously announced 1,000, but we’re not sure. It appears so since Boeing now lists the customers at 17.
  • Pratt & Whitney: BOC Aviation selected the IAE V2500 for more A320 family members. JetStar selected the IAE V2500 for 32 A320s.
  • Superjet: Interjet orders fives more SSJ100s.

Perhaps the biggest news: Boeing finally has released the weights and ranges of the MAX. From the Boeing press release:

Comparative* maximum take off weights and range limits for the Next-Generation 737 and 737 MAX:

MTOW (lb) Range (nmi) Two-class seating
737-700 154,400 3,400 126
737 MAX 7 159,400 3,800 126
737-800 174,200 3,080 162
737 MAX 8 181,200 3,620 162
737-900ER 187,700 3,055 180
737 MAX 9 194,700 3,595 180

*Next-Generation 737 values are calculated with Blended Winglets. Typical mission rules, two-class seating applies.

AirInsight has exclusive detail about MRJ delay

Mitsubishi last month announced a delay of more than one year for the MRJ, but was rather vague about the reason.

AirInsight has the detail, following an interview at the Pratt & Whitney media day attended by officials of the Japanese company in town for the first flight of the MRJ’s PW GTF engine.