With a month to elections, Embraer bolsters backlog

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Introduction

Sept. 10, 2018, © Leeham News: With the Brazilian elections less than a month away, the outcome of the presidential race will determine whether the proposed joint venture between Embraer and Boeing will be approved.

Embraer is Brazil’s most visible and prestigious international company. The government has a “golden share,” giving it veto power over certain transactions, including the Boeing deal. Boeing will own 80% of the new JV that will be for EMB’s commercial business only. Embraer will own 20%.

The incumbent government says it will approve the joint venture; the opposition party says it will veto the deal.

Summary

Including orders, options and LOIs:

  • Production slots are oversold through 2023.
  • The skyline quality has some challenges.
  • Only three dozen firm orders were announced at Farnborough; the balance has to be firmed up.

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Pontifications: Boeing aid to Jet Airways uncommon but not unusual

By Scott Hamilton

Aug. 27, 2018, © Leeham News: Boeing is giving financial help to India’s Jet Airways, according to a news report.

This doesn’t come as a surprise.

Jet Airways has 225 737 MAXes on order (50 direct, the rest listed via lessors). It’s also in what appears to be dire financial straits.

Media reports indicated the airline was possibly going to be out of business in 60 days and it deferred releasing its financial results “indefinitely.” The government is going to probe the airline, according to a press report.

The Boeing aid is not common but it’s not unknown, either.

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Analysis: Bombardier continues to improve Q400 model

By Olivier Bonnassies

Aug. 21, 2018, © Airfinance Journal: Bombardier Commercial Aircraft is gradually introducing more features in its Q400 turboprop aircraft as the Canadian manufacturer continues to see appetite in the 70-90-seat market.

Improvements under development include a 2,000lb increase in payload capacity. The model’s current maximum payload is 18,716lb, while maximum take-off weight varies between 61,700lb and 67,200lb.

Other changes the manufacturer is introducing include the extension of A-check and C-check intervals from 600/6,000 to 800/8,000 flight hours, giving a 20% direct maintenance cost saving.

Bombardier Q400. Source: Bombardier.

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Pontifications: Workforce shortage hurts entire supply chain

By Scott Hamilton

Aug. 20, 2018, © Leeham News: A growing shortage of workers is exacerbating pressure on suppliers as they struggle to meet current aircraft production rates, even as Airbus and Boeing want to raise them even more.

Add to this the thousands of retirements facing the OEMs in the next 5-10 years, and you can see the strain facing Airbus, Boeing, the engine makers and the suppliers feeding into them.

It also partly explains the shifting trend toward automation. Setting aside the obvious benefits of automation—quality control, accuracy, boring repetitive work, etc—the supply chain in simply facing a growing shortage of workers for which there is no easy answer.

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Stopping airliner theft

By Bjorn Fehrm

August 15, 2018, © Leeham News.: The theft of the Horizon Air Bombardier Q400 Friday brings the question how easy airliners are to steal and what can be made about it.

Having never flown an airliner before, I recently learned how to start one from cold and get it into the air. Here’s my take on how easy (or not) it is to get an airliner in the air by a novice and what can be done to make it harder.

The Dash 8 Q400 involved in the Friday incident. Source: Wikipedia.

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Pontifications: Horizon Q400 theft spurs thoughts about solo pilot idea

By Scott Hamilton

Aug. 13, 2018, © Leeham News: The bizarre theft of a Horizon Airlines Bombardier Q400 at Sea-Tac Airport Friday night by a 29-year old employee will take some time for investigators to unravel.

The employee, a ramp agent, appeared to have no other motive in mind other than a last joy ride before ending his life.

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Pontifications: Supply chain meltdown

By Scott Hamilton

Aug. 6, 2018 © Leeham News: It happened to Airbus. It sort of happened to Boeing. It was bound to happen in a much bigger way to Boeing, and it has.

Some 40 737s are now sitting around the Renton assembly plant in a major supply-chain meltdown.

This follows the highly publicized, two-year long supplier meltdown at Airbus as Pratt & Whitney and CFM fell down on engine deliveries and technical problems for their GTF and LEAP-1A engines, respectively.

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Rising fuel prices hit earnings, but there’s a silver lining for OEMs

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Introduction

July 30, 2018, © Leeham Co.: Fuel prices are spiking and it’s already causing airlines to adjust growth and fleet plans.

But rising fuel prices could mean orders for slow-selling aircraft might pick up. Still, there are mixed signals on this front.

Summary
  • American and Southwest airlines are curbing growth and American is deferring airplanes due to rising fuel prices.
  • Alaska Airlines reported fuel prices were up 10 consecutive quarters, adding $850m to expenses.
  • Fuel prices were just under $80bbl on the US spot market last Thursday.
  • The inflection point between keeping current generation planes and ordering new ones with more efficient engines is fast approaching.
  • This could be a boost to the slow-selling Airbus A330neo and accelerate demand for the Embraer EJet-E2 and the Airbus A220 (nee Bombardier C Series).

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Pontifications: thyssenkrupp’s international expansion

By Scott Hamilton

July 30, 2018, © Leeham News: thyssenkrupp, the German supplier, is a mouthful to say.

Even its name is different, using the small “t” rather than a capital “T”.

Being from Chicago, I suitably butchered it when I met at the Farnborough Air Show with its CEO, American Laura Holmes.

I won’t even attempt to write how I mangled the name, but I didn’t feel too bad when I later discovered there is a 15 second YouTube video on its pronunciation: two-sen croup (in German) or tiss-in krup [as in pup] (in English).

Regardless, the company is in an expansion mode internationally—including in Africa.

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Airbus posts strong earnings; ‘hell of a ride’ ahead, says CEO

By Dan Catchpole

July 26, 2018, © Leeham News: Airbus posted strong earnings for the year’s second quarter, thanks to better profitability on its A350 and A320 programs. Investors rewarded the news by pushing Airbus share prices to a 52-week high Thursday morning.

However, Airbus lowered its earnings for the full year due to its takeover of Bombardier’s troubled C Series program, since renamed the A220. Airbus plans to deliver 18 of the single-aisle jetliners this year.

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