Assessing ATR future

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Introductions

Feb. 27, 2017, © Leeham Co.: ATR today holds an almost monopolistic position in the large turbo-prop market with 87% of the backlog at YE2016. Bombardier, once the dominant turbo-prop manufacturer, has a mere 13%.

China and Russia are not included above.

ATR had a backlog of 212 aircraft vs Bombardier’s 31. In addition, ATR had options for more than 400 aircraft and LOIs for about 70 more. BBD had options for just 12 Q400s at the end of last year.

Summary
  • Low fuel prices favor regional jet, high fuel prices turbo-props.
  • No new, clean-sheet design to replace Q400 or ATR in foreseeable future.
  • Indian, Indonesia talk turbo-props but outcome unlikely.
  • China’s MA-60 feeds home market, but airplane has reliability issues.

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Assessing Bombardier commercial programs

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Introduction

Jan. 30, 2017, © Leeham Co.: Bombardier hopes to land a major, blue-chip order for its CSeries this year but otherwise isn’t counting on significant orders for its flagship airliner.

Officials don’t have available delivery slots until 2020, bar a few here and there, to attract sizeable orders.

The future of the aging CRJ could get a boost from recalcitrant Us labor unions who refuse to alter the 86,000 lb aircraft weight limit under the Scope Clauses. These make the Embraer E175-E2 and Mitsubishi MRJ90 too heavy for the regional airlines providing contract flying for the US majors.

The future of the Q400 turboprop looks bleak.

Summary
  • The CSeries delivery stream appears sufficient to match production ramp up through 2019.
  • There is a big production gap in 2020 at the target rate of 10/mo.
  • More than 50 firm orders have indefinite deferred delivery dates.
  • The backlog for the CRJ “falls off the cliff” next year, as does the Q400.

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2017: the year ahead

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Introduction

Jan. 3, 2017, © Leeham Co.: The New Year is here and it doesn’t look like a good one for commercial aerospace, if measured against previous outstanding years.

There are some troubling signs ahead, piling on to a slowdown in orders from last year that didn’t even reach a 1:1 book:bill.

This year looks to be worse than last. Airbus and Boeing will give their 2017 guidance on the earnings calls this month and next. Bombardier and Embraer earnings calls are a ways off, when each will provide its guidance.

But LNC believes the Big Two in particular will be hard pressed to hit a 1:1 book:bill this year and may even struggle to match 2016 sales.

Boeing’s year-end order tally comes Thursday. Airbus’ comes on Jan. 11.

Summary
  • Wide-body sales remain weak.
  • Narrow-body backlogs and low oil prices continue to inhibit sales.
  • China, Middle East concerns emerging.
  • United Aircraft MC-21 and COMAC C919 begin flight testing.
  • Airbus A330neo, Boeing 787-10, Embraer E195-E2 and Mitsubishi Aircraft MRJ-70 roll-out and begin flight testing.
  • Airbus A321neo and Boeing 737 MAX 8 EIS.

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Pontifications: Hawaiian Air ponders A380

Hamilton ATR

By Scott Hamilton

Oct. 31, 2016, © Leeham Co.: Hawaiian Airlines continues to ponder the possibility of acquiring one or two Airbus A380s, its CEO said on the third quarter earnings call—something that raises eyebrows and a lot of questions with industry officials.

Mark Dunkerley, responding to a question on the call, said there are two or three routes that could support the giant A380.

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ISTAT Europe 2016: Regional aircraft market

By Bjorn Fehrm

September 26, 2016, ©. Leeham Co: We are reporting from ISTAT (International Society of Transport Aircraft Trading) 2016 in Barcelona. The regional aircraft panel, discussing the future for the regional aircraft market, featured Embraer, Bombardier, Mitsubishi Aircraft Corporation and Superjet International, presenting the strengths of their offerings and why they would have a good future share of the market.

Here’s what was presented: Read more

ATR targets Bombardier’s last stronghold: the USA

May 17, 2016, © Leeham Co.: ATR, the dominant manufacturer of turboprop airliners, last week undertook its first major marketing push in the USA in 10 years.
The US has been the exclusive domain for passenger turboprop service above 50 seats. (FedEx operates ATR cargo aircraft.)
But the time has come for ATR to return to the US for a number of reasons.

  • The Bombardier Q400 is aging in US service, and replacements will be needed soon.
  • The ATR 72-600 has been modernized with a new glass cockpit, larger overhead bins and other features.
  • The aircraft now has an optional forward boarding door, a desirable feature in the US, allowing jetbridge boarding.

Horizon Air, a subsidiary of Alaska Air Group, operates 52 Q400s, including 14 Next Gen models, according to the Ascend data base. These are all of them in the US. Horizon is returning 15 of the Q400s come off lease, replacing them with Embraer E175s.
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ATR begins US tour, part owner wants to divorce Airbus

ATR is making a push to sell its turbo-props in the US, which is the last exclusive domain of the Bombardier Q400. Note the new forward door on this ATR-72. The absence of this door, which the Q400 has, was a strike against the ATR in the US. The door now enables jetway boarding. Photo via Twitter.

May 3, 2016, © Leeham Co.: ATR, the maker of the ATR turbo-prop, is beginning a tour of its aircraft in the US, the last uncontested domain for the rival Bombardier Q400.

ATR won orders for its ATR-42/72 in the US decades ago, but largely ceded the market to Bombardier.  ATR-42s fly for FedEx, the express package carrier, but no

ATR-42 operated for FedEx. No passenger ATRs are operated in the USA. Photo via Google images.

passenger ATRs are in service in the USA.

As the tour gets underway, Finmeccania, a 50% owner of ATR with Airbus owning the other half, wants to assume the latter’s holdings if Airbus doesn’t change its mind over its refusal to green light development of a next generation turbo-prop.

Airbus has for several years refused to grant approval because ATR had between 80% and 90% of the backlog at any given time. Bombardier had the remaining market share backlog. Now that oil prices are low, Airbus doesn’t believe a business case can me made to justify a new development.

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PW Canada continues next-gen turboprop development despite airplane demand uncertainty

 

PWC_NGRT

Pratt & Whitney Canada’s next generation turboprop. Source: PWC. Click on image to enlarge.

March 24, 2016, © Leeham Co.: Pratt & Whitney Canada (PWC) continues development of the next generation turboprop engine, even as low oil prices reduce the attractiveness of turboprop airplanes.

Few believe oil prices won’t creep back up over time, once again making prop-jets attractive once again. The ancillary question is what’s next for this type airplane? An entirely new, clean-sheet design? A 90-100 seat turboprop airplane? Or retrofitting this next-gen engine on today’s turboprop airliners?

Summary

  • PWC’s new engine could be fitted to a new airplane design or retrofitted to today’s Bombardier Q400 and ATR series airplanes.
  • The 20-year market is small.
  • The 20-year market for a 90-seat turboprop is smaller still.
  • Embraer is evaluating whether to reenter the turboprop market, 15 years after the last mass-produced Brasilia rolled off the assembly line.
  • GE is developing a turboprop engine and at least three countries have interest in this sector.

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Nordic Aviation Capital completes second major acquistion

March 15, 2016: Nordic Aviation Capital yesterday announced it acquired regional aircraft lessor Jetscape Aviation Group. This is the second major acquisition since December. Then, NAC agreed to acquire 25 ATR turboprop aircraft from Air Lease Corp., which decided to focus entirely on jets, most of which are mainline aircraft. All but a handful of the ATRs were already leased, with the remaining still in production.

Nordic had nearly 250 aircraft from the ATR and Bombardier Dash and Q families, plus a small number of Bombardier CRJs, Airbus A320s and Boeing 737s. The Jetscape acquisition brings Embraer EJets to the Nordic portfolio.

“The deal will see Nordic Aviation Capital expand into the regional jet arena, bringing 28 owned Embraer E-Jets, commitments for 11 E-Jets and a further 18 of the type under management into its sizeable regional aircraft portfolio,” the company said in a press release.

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Bombardier earnings preview

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Introduction

Feb. 16, 2016, ©  Leeham Co.: Bombardier’s fourth quarter and full year 2015 financial results will be reportedBBD CS 100 Wednesday, and we don’t expect the situation to be pretty.

Yes, officials will highlight the recent closing of the sale of 30% of the Transportation (Rail) subsidiary.

Yes, the C Series is now on a world tour and appearing at the Singapore Air Show this week.

Yes, the CS100 will enter service in the second quarter.

Yes, the CS300 should be certified, delivered and enter service before the end of this year.

But missing will be any concrete information about new orders.

Summary

  • Still no C Series orders since September 2014.
  • Bombardier has its hand out for more government aid.
  • ATR is making a new push in China and North America, the latter a stronghold for the Q400.

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