C919 gains but loses advantages

Here is an article we did for FlightGlobal Pro.

After a slow and disappointing start compared with expectations that had been set in advance of the Zhuhai Air Show in November 2010, Commercial Aircraft Corporation of China’s (Comac) C919 has picked up steam.

Prior to Zhuhai, Chinese authorities forecast “hundreds” of orders would be announced for China’s first indigenously built mainline jet since the reverse-engineered Boeing 707 copy that never entered commercial service. Instead, a disappointing 55 firm orders and 50 options were announced.

Since then, there are about 250 orders and options now on the books. According to Flightglobal’s Ascend Online database, 160 of these are firm orders from nine Chinese customers, including four lessors. China’s “big three” airlines, Air China, China Eastern and China Southern, ordered a disappointing five aircraft each. Hainan ordered 20. Some of the announced orders have yet to be firmed up as contracts.

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PNAA conference in Seattle Feb. 6-8

The Pacific Northwest Aerospace Alliance is hosting two conferences in the Seattle area in February and March.

PNAA’s 11th annual conference is Feb. 6-7-8 at the Lynnwood (WA) Convention Center, north of Seattle and south of Everett. Information may be found here. This 2 1/2 day conference is comprised of a Defense Focus Day on the afternoon of Feb. 6; a day-and-a-half of commercial aviation presentations and a Suppliers’ Fair on the afternoon of the 8th.

Airbus, Boeing, Bombardier, CFM, Pratt & Whitney, the Teal Group’s Richard Aboulafia, G2 Global Solutions’ Michel Merluzeau, Alcoa and Electroimpact are among the presenters on the commercial side.

Tayloe Washburn of Project Pegasus and the Washington Aerospace Partnership will discuss the issues surrounding the assembly site of the 737 MAX.

Boeing’s Insitu  EADS North America and Lockheed Martin are among the defense industry presenters.

More than 300 people attended the 2011 conference, which is now the largest in the Pacific Northwest and one of the largest on the West Coast. PNAA serves Washington, Oregon, Idaho, Montana, Alberta and British Columbia. It has arranged trade missions from Europe, Asia and Latin America visiting here to meet with Washington State suppliers. PNAA was also asked by the White House and the US Commerce Department to arrange a meeting of key CEOs in Seattle to discuss economic issues affecting aerospace.

The March event PNAA is organizing is a Suppliers Forecasting Symposium. This one day event on March 12 precedes the first USA-based Aerospace & Defense Supplier Summit organized by BCI Aerospace.

The Symposium is the first of its kind: a day-long event focused on forecasting the requirements in the supply chain that services Boeing, other OEMs and the Tier 1 suppliers. Boeing Commercial Airplanes and Boeing Defense, Space & Security will be presenters as well as two noted aerospace analysts from Wall Street, David Strauss of UBS and Robert Spingarn of Credit Suisse. They follow Boeing and the supply chain and have their views on forecasting the needs of the suppliers.

These are two important events sponsored by PNAA and the A&DSS summit by BCI Aerospace is equally important to the Washington aerospace supply chain. PNAA members get a discount to the A&DSS event.

Caution flags waving as we enter 2012

As 2012 opens, we are concerned about the increasing signs global cargo traffic is softening.

Cargo traffic is typically a leading indicator of passenger traffic, both on the decline and subsequent rise. Cargo traffic fell 25% globally at the start of the Great Recession and passenger traffic soon followed. Cargo traffic began to recover before passenger traffic as the world edged out of recession.

But now, there are several indicators cargo traffic is softening again. IATA figures show traffic is on the decline. Additionally, there have been several developments at individual airlines.

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Our choice for momentous event: IAM-Boeing contract

Note: Highs and Lows for 2011: see AirInsight.

In our previous post, we gave readers a choice of the most momentous event for 2011 for Airbus and Boeing; and who was the most influential person for the year and what would be the predictive momentous event for 2012.

We agree with three of the four readers’ choice but disagree for the momentous vote for Boeing. We think it was the IAM-Boeing contract agreed to nearly a year ahead of the amendable date of September 2012. This agreement extended a new contract for four years and is heralding a new era of cooperation between the union and the company.

Here’s why we think this agreement beats out the 787, the readers’ choice, as Boeing’s most momentous event in 2011.

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Readers’ vote: What’s the most momentous event of 2011?

What do you think was the most momentous event for the following companies in 2011? And what do you predict for 2012?

Merry Christmas

Boeing aims to help airlines reduce fuel burn in flight

Here is a story we did for FlightGlobal Pro 20 Dec.

A little known programme offered by Boeing since October 2010 called InFlight Optimization Services offers airlines the ability to get up-to-date, en route weather and wind information that is more detailed than that offered by one’s own airline in order to reduce fuel consumption.

The programme is so new that only five airlines have subscribed to the service so far. Only two, Alaska Airlines and KLM, have authorised disclosure. Three are for Winds Updates and two for Direct Routes services.

The services are not limited to airlines operating exclusively Boeing aircraft. Alaska flies only Boeing 737s but KLM operates a mixed fleet of Airbuses and Boeings. While Direct Routes is available to any aircraft equipment with ACARS, the Winds Update currently is offered only to Airbus and Boeing aircraft, said Derek Gefroh, programme manager of InFlight. Emrbaer and Bombardier aircraft could come later.

Part of the emphasis on Airbus and Boeing aircraft revolves around the stage length operated. The longer the length, the more the benefit. Short block times typically have recent wind forecasts while the longer the block time, the older the forecast, particularly on overseas flights.

Airlines also want total fleet solutions, hence Boeing’s offering the service on Airbus and Boeing aircraft.

InFlight is designed to maximise fuel and flight efficiency through continuous real-time air, traffic, weather and aircraft data to find post-departure opportunities to reduce flight time and fuel costs. Boeing monitors the flight and sends real-time updates to the flight deck or the airline’s operations centre.

According to Boeing, citing studies, operations generally use about 10% more fuel than necessary. While KLM said the savings is as little as 0.1% per flight, cumulatively over a fleet and the course of a year, the savings can be significant.

The wind updates are, for now, focused on descent operations rather than en route winds. The wind updates combine with continuous descent and RNP (Required Navigation Procedure) to shave the time off the descents.

Gefroh said that wind data could be as much as 12 hours old when pilots prepare their flight plans. Real-time, en route information permits real-time adjustments as pilots prepare to descend from cruising altitude, typically about 20 minutes from landing.

As for direct routes, airlines for years have worked with Air Traffic Control to bypass waypoints under what is called a “Direct to” system. But Gefroh said that sometimes adverse winds could actually add time to a direct routing.

“For medium size operator, like an Alaska or one a bit larger, direct routes can provide them 40,000 minutes of annual flight time saved,” said Gefroh. This equates to 300 fuel-free flights per year. “The question is, how valuable is a minute?” Boeing estimates this at $25 for regional, $125 for a very large carrier or cargo airline, $50 minute for a carrier like Southwest Airlines and $100 for a US legacy airline.

These efforts are an outgrowth of a five-year research-and-development programme by Boeing to find efficiencies in the Air Traffic Management system. But improving ATM is a federal and international effort. The US plan, NextGen, could be as much as 20 years to fully implement. Airlines need savings now.

Looking ahead to 2012 by AirInsight

In what is the first of a series of OEM podcasts looking ahead at 2012, AirInsight kicks off with Randy Tinseth, VP Marketing of Boeing Commercial Aircraft.

Separately, Aspire Aviation takes a long look at the Boeing 737 MAX.

Odds and Ends: MAX prices, Albaugh on MAX, BBD on CSeries

737 MAX: Boeing has ann0unced the prices for the MAX and Reuters has this story comparing the competition with NEO:

Airplane Families 2011 $ in Millions Average
737 Family
737-600 59.4
737-700 70.9
737-800 84.4
737-900ER 89.6
737 MAX 7 77.7 (+6.8)
737 MAX 8 95.2 (+10.8)
737 MAX 9 101.7 (+12.1)
747 Family
747-8 332.9
747-8 Freighter 333.5
767 Family
767-200ER 151.5
767-300ER 173.1
767-300 Freighter 175.4
767-400ER 190.2
777 Family
777-200ER 244.7
777-200LR 275.8
777-300ER 298.3
777 Freighter 280.1
787 Family
787-8 193.5
787-9 227.8

What’s interesting of the MAX prices vs NG is the price premium of up to $12m, nearly twice that announced by Airbus for the NEO. Recall, too, that Boeing dissed the Airbus plans to charge a premium for the NEO; Boeing used the NEO premium as a talking point to promote the value proposition of the 737NG.

Boeing: Jim Albaugh, appearing at a Reuters event, says Boeing expects to begin converting the 948 commitments to firm orders very soon. Who are the commitments? Only four are announced out of 13 customers.

We’ve listed most of them before. We now understand that there are five top lessors who have committed (only one has announced). We’ve previously identified GECAS (no surprise here). We knew of another but did not have the name. ILFC, ALC and CIT are obvious candidates but we don’t have definitive information that these are the others.

Announced firm order

  • Southwest Airlines

Announced commitments

  • American
  • Lionair*
  • Aviation Capital Group

Lionair says theirs is more than a commitment while at the same time saying it won’t be “firmed” until January. The announcement was in November and it is not on the Boeing order list yet.

Unannounced but we’re comfortable these have committed:

  • GECAS
  • Three other lessors
  • COPA
  • GOL
  • Norwegian Air Shuttle

That’s 11 of the 13. We have heard the names of the other two but aren’t sure enough of them to publish them.

Bombardier: Pierre Beaudoin, president of the Canadian manufacturer, gave an interview to the Montreal Gazette on the challenges facing the company on the new CSeries. Hints of a six month delay are becoming more frequent.

Southwest Airlines: For those still wondering, it’s now official: Boeing and Southwest agreed to transfer AirTran’s outstanding order for 53 737s to Southwest, according to an SEC filing. Southwest also canceled purchase rights of its own for 20 737s as part of the order for 58 737-800s announced at the same time the MAX order was announced.

Softening Freighter Market: In another worrying sign about the global economy, Cathy Pacific has deferred to Boeing 747-8Fs to 2013 from 2012, according to AirWise. Global cargo demand is often a leading indicator of passenger demand.

Embraer forecasts a “crisis” in the Brazilian economy next year but an increase in commercial aircraft sales nonetheless.

Southwest launches 737-8, bypasses 737-7 for now

Here is an article we did yesterday for Flightglobal Pro’s subscription service.

The Southwest Airlines order on 13 December launching the 737 Max programme is a launch of the -8 version. The carrier, which has substitution rights between the -7 and the -8, has chosen to bypass the -7 for now.

Brian Hirshman, SVP Technical Operations, told Flightglobal Pro on 15 December that the carrier is up-gauging its fleet, which it began doing this year with acquisition of the 737-800 for the first time. Southwest, throughout its history since is 1971 birth, has relied on the 737-200/300/500/700, preferring smaller sized aircraft and high frequency as its business model.

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