Leeham News and Analysis

There's more to real news than a news release.

There's more to real news than a news release.

Odds and Ends: Designing 737 MAX; RR & PW; CFM

737 MAX: Boeing Frontiers Magazine has a long article with lots of pictures describing the designing process of the Advanced Technology Winglets.

RR-PW on big engines: Aviation Week has this article speculating on the prospect of Rolls-Royce and Pratt & Whitney teaming to offer an engine for the Boeing 777X.

CFM says the use of advanced materials will reduce fuel consumption in the LEAP-1A (Airbus) engine by 1.5%, which happens to be the amount John Leahy of Airbus said that PW’s GTF has an advantage over LEAP.

 4 Comments

 Posted on July 16, 2012 by

 Boeing, CFM, Pratt & Whitney, Rolls-Royce

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Post-Farnborough thoughts: why so few orders, PR overkill and more

The Farnborough Air Show is over. Here are our thoughts:

For all the pre-show buzz about expected orders, with names and quantities identified, this show was a bust.

Airbus was said to be shooting for 250-300 orders; it finished with 115 (including orders, commitments, MOUs and so on). Just two of the talked-about orders would have brought Airbus close to the 250 mark. An A380 was also anticipated. But no-go.

Boeing also failed to meet pre-show expectations that revolved around converting about 75% of the then-remaining 550 737 MAX commitments to firm orders. In the end, only Air Lease Corp did so, for 75, while GECAS and Avolon were revealed as being among those Unidentified customers who “committed” to the MAX. We fully anticipate these, and the other MAX commitments, to convert but expectations were…expectations and in this, Boeing fell short. But the company was still the undisputed star of the show. Kuwait’s ALAFCO, a lessor, became a new MAX customer and so did United Airlines. United gave not only the MAX program in general a boost but the -9 MAX in particular a major shot in the arm with an order for 100. The airline also ordered 50 737-900ERs, a boost for this slow-selling airplane as well. Virgin Australian became another new MAX customer, albeit in the week preceding the show but this is a bit of a technicality.

Bombardier announced two new commitments for the CSeries, one from an Unidentified customer and one from Air Baltic. We view the Air Baltic order as significant, for this is the first time the CSeries competed against the A319neo and the 737-7 MAX. Previous competitions were vs the A319ceo, the A319neo and perhaps the 737–700.  BBD continues to make slow progress with the CSeries, with orders and options in the 10-20 range. This pace is similar to Embraer, Airbus and Boeing at this stage of the game (i.e., 18 months before EIS, six months before first flight) for the E-Jet, 737-700 and A319.

The news that BBD is talking with AirAsia about a 160-seat CS300 (28 inch pitch with new slim line seats) was a surprise. We’ll wait with great interest whether the airline’s CEO, Tony Fernandes will be enticed away from his exclusivity with Airbus for the A320/320neo. If Airbus’ John Leahy was motivated to “kill” the CSeries before, these talks are sure to start a war–and Leahy takes no prisoners.

Embraer, a star at the Paris Air Show, only announced a handful of orders.

ATR had a reasonable show with its turbo-prop. Bombardier brought up the rear with an order for six Q400s.

Pratt & Whitney bested CFM International in those A320 deals where they compete. CFM, of course, recorded far more orders since it is the exclusive supplier on the 737NG and MAX.

Mitubishi surprised everyone with an MOU for 100 MRJs from SkyWest Airlines of the USA. But commentary that this is a “blow” to Bombardier is over-stating.

Why so few orders?

Because the global economy still pretty much sucks. The backlogs are up to seven years out. Customers don’t want to pay escalation costs this far out. No need to hurry.

PR Overkill

A few years ago Boeing roundly criticized Airbus for announcing MOUs, LOIs and “commitments” while Boeing confined its announcements to firm orders. This changed at the Paris Air Show when Boeing announced commitments for 20 747-8Is from an unidentified customer. (It was the Hong Kong Airline Group.) Since then, all the airframe OEMs are busting their backs to throw every number they can out at an air show.

We roundly criticize this practice, whether it comes from Airbus, Boeing, Bombardier, Embraer or anyone else. An order isn’t an order until it is. The Hong Kong 748 “commitment” is still pending, and this was one of those anticipated to be firmed up at Farnborough. Instead, it became one of those no-gos. The same goes for other “commitments” from other OEMs. That’s why we have been so harsh on the practice. A commitment isn’t really worth the paper it’s written on. A commitment isn’t booked as an order on the tally sheet. This PR charade should be dropped. Of course, it won’t be.

The absence of product news (other than some detail of the 737 MAX and formalizing the A330-300 HGW), the failure to meet even low expectations in terms of orders and the crappy weather combined to make for a dull show from a news standpoint.

It was nice to see Boeing return to the aerial displays with the Qatar 787. Boeing certainly has a point: aerial displays haven’t sold an airplane (probably since Tex Johnston did the barrel role with the Dash 80). But it’s always been cool to see the A380, A340-600 or even the Lockheed Constellation do some aerobatics. We hope Boeing continues the practice.

 42 Comments

 Posted on July 12, 2012 by

 Airbus, Boeing, Bombardier, Embraer

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It’s official: United orders 150 firm Boeing jets (100 Max, 50 900ERs)

Press conference

Jeff Smisek, CEO United

  • 100 737 Max 9
  • 50 737-900ERs, replaces 757s flown domestically.

Jim McNerney, CEO The Boeing Co.

  • Thanks to UA for putting trust in us.
  • Boeing and United go back a long, long way. Once part of the same company.
  • Boeing has delivered more than 1,400 airplanes to United and Continental.
  • With today’s order, the 737 program has now surpassed 10,000 orders.

Boeing Photo.

Ray Conner, President Boeing Commercial Airplanes

  • The 737 MAX like the 787 will provide customers best solution in air transport.
  • Will provide greater value in fuel efficiency. MAX, like the NG, is perfect match for United.

Q&A:

Smisek:

  • $14bn value, NG delivery begins in 2013. (Where did Boeing come up with delivery positions next year?–Editor.)
  • -900ERs replace 757s domestically, 9 MAX will replace other, less fuel efficient aircraft including A320s. We have 152 Airbus airplanes today.
  • First 787 due in late September. McNerney has personally guaranteed this.
  • We had extensive discussions with Airbus and Boeing. Spent almost the past year in discussions with engine and airframe manufacturers.
  • We’ll finance aircraft as we get closer to delivery.
  • Deciding factors we negotiated what we believe to be the best airplane with the best engines at the best price.

 62 Comments

 Posted on July 12, 2012 by

 Airbus, Boeing, CFM

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Farnborough Day 4: wrapping up; big United deal

The Farnborough Air Show for the trade is over. Here are today’s final orders.

Airbus: Avolon signs MOU for 15 A320neos. Middle East Airlines 5+5 A320s/A321s. Russia’s UTAir 20 A321s. Synergy Aerospace firms up order for nine Airbus A330 Family aircraft. Ends show with 115 orders, MOUs, commitments.

Boeing: United’s announcement for the 737-9 MAX (100) and 737-900ER (50) originated in Chicago and was broadcast to the FAS. With this order, Boeing now has +1,200 orders and commitments for the MAX from 18 customers. Firm orders for 737 MAX now hit 649.

Bombardier: Chorus Aviation of Canada exercises options for six Q400s. AirAsia’s CEO Tony Fernandez confirms he’s talking about 100, 160-seat CS300s.

 5 Comments

 Posted on July 12, 2012 by

 Airbus, Boeing, Bombardier, CSeries

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Farnborough, Day 3: Even more dull than Day 2

Few little activity today.

Orders today

Airbus: CIT Aerospace, 10 A330 (five previously undisclosed); China Aircraft Leasing, 28 A320ceo, 8 A321ceo–MOU.

Boeing: Avolon (lessors), commitment for 20 737 MAX 8/9 and 10 737-800s. The MAXes are part of the previously announced 1,000 Orders and Commitments, so this portion is not new, but rather a public disclosure.

ATR: Nordic Aviation, one ATR 42-600; Air Lease Corp., two ATR 72-600s; LAO Airlines, two ATR 72-600s, TransAsia, six ATR 76-600s.

Mitsubishi: SkyWest Airlines, LOI for 100 MRJs

CFM: Juneyao Airlines (China), CFM56 for five A321s; Aviation Capital Group, LEAP-1A for 18 A320neo family.

Pratt & Whitney: Finalize previously announced engine selection for GTF for 40 A320neo.

Demand for A380 this year shrinks.

 49 Comments

 Posted on July 11, 2012 by

 Airbus, ATR, Boeing

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But what of the runway performance?

Dominic Gates of The Seattle Times has this story in which he has the following observation:

Wyse revealed that Boeing, through structural efficiencies, has also beefed up the allowed maximum take-off weights for the three MAX variants.

Each is 5,000 to 7,000 lbs heavier than the maximum take-off weights of the current 737s.

That means each 737 MAX model, even though heavier than the corresponding current model of the 737NG, can either carry a heavier payload or carry more fuel and so fly farther.

This is good. But we’re hearing from airlines that runway performance may be worse than the 737NG. The airplane is heavier but the wing is the same and the engine thrust is still somewhat of a mystery. CFM International, maker of the LEAP-1B that will power the MAX, lists thrust on its website of 20,000-28,000 lbs without identifying the sub-types and thrust to which the engines will be applied.

These thrust ratings are similar to those now on the NG, rather than being increased to compensate for the increased weight.

One airline tells us that runway performance for the -8 MAX and -9 MAX is longer than the -800 and -900. (The airline is not considering the -7 MAX and doesn’t have the -700.) This, the airline tells us, makes the airplanes problematic at some airports it serves.

This illustrates the dilemma Boeing and CFM have with the physically-constrained 737. CFM could build any engine it wants that would get the job done. It has, after all, two LEAP engines in development for the COMAC C919 and the Airbus A320neo. But the 737 presents special challenges and CFM is constrained unless Boeing lifts the entire airplane with new main gear. But this would mean a new wing box and associated structural changes, adding significantly to the cost. And Boeing won’t to this.

There’s still a lot about MAX we don’t know. And many customers are also waiting for the information.

 39 Comments

 Posted on July 10, 2012 by

 Airbus, Boeing, CFM, Comac

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Future materials: aluminum lithium, standard metals or composities

The Farnborough Air Show isn’t just about orders, though these get all the sex and headlines.

While we weren’t at the show, we had a telephone interview with a company called Constellium, previously known as Alcan. Constellium spoke at the February conference of the Pacific Northwest Aerospace Alliance, with which we are involved. We were particularly interested in talking with Constellium because it is a major supplier of Aluminum-Lithium, an alternative material to standard aluminum and a competing material to composites.

Constellium’s Al-Li combines other processes, including a design for recycling, and is named AirWare. Airbus, Boeing and Bombardier are among their key customers, and it is Constellium that is providing the materials for the CSeries. It’s also a supplier on the Airbus A350 (internal components, not the fuselage).

As Airbus and Boeing looked at the A320neo and 737 MAX, and as Boeing is looking at the 777X, we asked them about the prospect of using Al-Li. This is lighter than standard aluminum, more durable, less susceptible to corrosion and enabled 12 years between major maintenance overhauls compared with the 6-8 years now.

But Al-Li is more difficult to work with than standard aluminum. Boeing’s Mike Bair told us in an interview that Boeing considered Al-Li back in the 1990s when designing the 777 but it was too difficult and costly to manufacture. Since then, he praised the producers for strides. There are mixed reports what material will be used for the 777X fuselage: standard metal or Al-Li. The Seattle Times reported the airplane will have Al-Li. We’ve been told it won’t. But with the airplane still months and perhaps a year from launch, there is plenty of time to decide.

Airbus, in an interview at the Paris Air Show last year, said it was evaluating Al-Li for the A320neo. The A320ceo is heavier than the competing Boeing 737 and the re-engine adds about 4,000 lbs. Using Al-Li would mitigate some of this weight. We haven’t heard if Airbus might go ahead with Al-Li, but we’re leaning toward concluding that it won’t.

Boeing told us it will not switch to Al-Li for the MAX because the manufacturing process is just enough different that it would add complexity and cost to the current tooling and procedures.

Al-Li vs composites is a competition that will likely be fierce when it comes time for Airbus and Boeing to design the next clean-sheet airplanes, presumed to be the New Small Airplane, or replacement for the current 737/A320 class. (Boeing may have a new clean-sheet for the 757 class; it has a New Airplane Study underway for this, but the market may be too narrow when one considers the 737-9 MAX and A321neo will do 95% of what a 757 can do.)

Composites, selected for the 787 and A350 XWB fuselages and wings, offer advantages over standard metal fuselages that have been well documented and need not be repeated here. But Airbus and Boeing question the efficiency and benefits of down-scaling composites to 737/A320 category airplanes. Boeing apparently became convinced: Jim Albaugh, former CEO of Boeing Commercial Airplanes, said the New Small Airplane would have been composite, but the ability to produce it at a rate of 60 per month remained a challenge. Boeing went with the MAX instead.

Vistagy, a composite manufacturer near Boston, told us nearly two years ago, that the down-scaling challenges were met and that production rates were the issue. Autoclaves are very costly and so is the manufacturing process. There is actually less industrial waste than traditional aluminum manufacturing, but the materials are generally more hazardous—though there have been strides on this score.

This is the background that intrigued us when we had the opportunity to speak with Constellium’s Simon Laddychuk, VP of Manufacturing Global Aerospace and Director of Technology. Read more

 14 Comments

 Posted on July 10, 2012 by

 Airbus, Boeing, Bombardier, Comac, Embraer, Irkut

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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.


 23 Comments

 Posted on July 10, 2012 by

 AirInsight, Boeing, Bombardier, Sukhoi

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Farnborough, Day 1: Orders, Price Calculator and other stuff

McNerney rejects “price war.” A quote from a Financial Times story (see below).

He rejected suggestions that a price war had broken out between Airbus and Boeing over the A320 Neo and 737 Max but confirmed the US manufacturer would woo some airline customers of its European rival.

Courtesy of Aspire Aviation, here is a summary of orders through Day 1:

Airbus

Date

Customer

Quantity

Model

Remarks

9th July

Arkia Israel Airlines

4

A321neo

Agreement

Boeing

Date

Customer

Quantity

Model

Remarks

9th July

Air Lease Corp (ALC)

60

737 MAX 8

Reconfirmation rights for 25 more

9th July

Air Lease Corp (ALC)

15

737 MAX 9

Pratt & Whitney

Date

Customer

Quantity

Model

Remarks

9th July

IndiGo

300

PW1100G-JM

9th July

CIT

60

PW1100G-JM

9th July

Cebu Pacific

60

PW1100G-JM

For 30 firm A321neos

9th July

Norwegian Air Shuttle (NAS)

100

PW1100G-JM

MoU

CFM

Date

Customer

Quantity

Model

Remarks

9th July

Air Lease Corp (ALC)

150

CFM Leap-1B

Embraer

Date

Customer

Quantity

Model

Remarks

9th July

Hebei Airlines

5

E-190s

Booked in Q2 backlog

Reuters put together a handy-dandy thing to calculate airplane prices easily. These are list prices, of course.

Some stories of note:

Boeing lands the first blow

High-fliers at the show

United to announce big MAX order July 12

A330 “surgery”

AirInsight is posting daily news and videos.

The Financial Times of London has a piece with Boeing’s Jim McNerney. (Free but limited registration required.) Here’s a relevant quote.

Boeing announced the 737 Max in August last year and Mr McNerney said that “in retrospect” the US manufacturer should have made its decision to proceed with a revamped version of its narrow-body workhorse, rather than a brand new aircraft, “six to nine months” earlier.

 8 Comments

 Posted on July 9, 2012 by

 Airbus, Boeing, Bombardier, CFM, Embraer, Pratt & Whitney

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Farnborough underway with CFM press conference

Tweets from Saturday’s CFM press conference:

Bernie Baldwin ‏@BernieBaldwin

#FARN12 #FIA12 @CFM_engines Part commonality between LEAP-1A and LEAP-1B very little.

Jon Ostrower ‏@jonostrower

CFM: 737 Max Leap-1B engine core has 10-stage 22:1 pressure ratio in the HPC. 1st 5 stages are blisks. Plans 5-stage LPT. #FIA12

Bernie Baldwin ‏@BernieBaldwin

#FARN12 #FIA12 @CFM_engines doesn’t see a commercial use of open rotor technology in the thrust range where CFM sits now until about 2030.

Stephen Trimble ‏@FG_STrim

Another shot from @CFM_engines: Each Leap-powered A320neo will have $3-$4M net present value advantage on 15yr term against A320neo w/PW1200

Bernie Baldwin ‏@BernieBaldwin

#FARN12, #FIA12 @CFM_engines LEAP-1A/1C design freeze took place on 28 June 2012, drawings now being released. -1B freeze will be mid 2013.

Stephen Trimble ‏@FG_STrim

Interesting: @CFM_engines predicts Leap-1A will beat PW1200 on MX by 50h/yr on A320neo. Also 4 fewer “fill-ups”. #FARN12 #FIA12

Looks like @CFM_engines expects CFM56 production to phase out completely by 2019, meaning no more A320neos & 737NGs. #FIA12 #FARN12

Here is a full story from The Wall Street Journal. Author Jon Ostrower also posted the following image on his Facebook account:

 9 Comments

 Posted on July 7, 2012 by

 Airbus, Boeing, Bombardier, CFM, Comac, CSeries

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