CSeries edges closer to first flight, as payoff for gambles await Bombardier and Pratt & Whitney

The Montreal Gazette did a little digging with Canadian regulators and came up with this interesting piece, deducing the first flight of the Bombardier CSeries will come within the “next 11 days” (the story was dated Aug. 19).

The Gazette also reported that the CSeries test program will extend to May 2015. Bombardier says this includes the CS300, which has an entry-into-service timeline roughly 12 months after the CS100. On Aug. 19, several Canadian media reported a new analyst note concluding that EIS of the CS100 will slip into early 2015, something we also suggested in an earlier post. The Gazette also quotes from the analyst note.

Bombardier has completed slow speed taxi tests (noted in our morning post of Aug. 19). Bombardier’s dedicated CSeries website is here and a number of YouTube videos are here.

The first flight, of course, while a major milestone is only the beginning of a testing program that BBD says will take a year and some believe will take longer. Since this is the first clean-sheet design in the 100-149 seat category (or even up to 200 seats) since the development of the A320 in the early 1980s, and it is the first airplane with the Pratt & Whitney Geared Turbo Fan engine, there are enormous stakes riding on the program. The CSeries is a huge gamble for Bombardier, its bet to move from the regional jet era it invented to mainline jets, into a sector largely abandoned by Airbus and Boeing but which has drawn fierce reaction from Airbus with aggressive pricing for the larger A320.

For Pratt & Whitney, the CSeries flight test and subsequent EIS is the culmination of a research-and-development gamble of more than 20 years to regain its once-dominant place in single-aisle aircraft power supply.

Since CFM retained the exclusive supplier agreement for Boeing on the 737 MAX, and because CFM so far has won about half the orders for engines on the A320neo, PW won’t reclaim the dominant position it had in the early years of the jet age. But With the A320neo, PW has half the orders, a vast improvement in market share from its IAE V2500 engine on the A320ceo family. But PW’s GTF gamble with CSeries led to the selection by Airbus for the neo, and along with the Mitsubishi MRJ sole-source engine supplier followed by a shared source on the Irkut MS-21 and more recently the sole source on the Embraer E-Jet E2, PW is clearly back as a major player.

Bombardier’s flight tests will validate (one presumes) the promises made by BBD and PW for the engine-airframe combination: the quietest engine, the most fuel efficient engine, the most economical engine-airframe combination.

The Boeing 787, for all its difficulties, brought a new level of excitement to aviation with its ground-breaking technologies. The A350 XWB didn’t have the same panache, coming behind the 787 as it did. If the CSeries lives up to its promises in flight testing, we believe the orders will start coming. The aviation industry has become the State of Missouri motto, “Show Me,” as a result of the program delays at Airbus, Boeing and now BBD. We look forward to a program that goes smoothly after first flight.

Key leaders hit back at Boeing “exodus” assertions; CSeries competition for the Big Two; A380 uses; Boeing hikes prices

Boeing’s WA ‘exodus’: Three key leaders in Washington State responded to the drumbeat from State. Sen. Mike Hewitt (R-Walla Walla) that Boeing is in an “exodus” from Washington. Read the article here.

We agree that the use of the term “exodus” is overblow, as we wrote in previous articles here, here and here. We also believe that the greatest threat to Washington’s future in aerospace is when Boeing designs clean-sheet replacements for the 777 and 737, as which point we think there is a real chance these new designs will be built at Boeing’s growing Charleston (SC) complex.

But this bickering between Hewitt, on behalf of the the State’s Republican party, and the Democrats gets Washington nowhere.

At least the Democratic gubernatorial administration has come up with a plan for Washington’s aerospace, although we’ve noted we think it falls short of being bold and innovative. Hewitt and the Republicans haven’t come up with anything except criticism.

The State is undertaking two more studies (on top of at least four we can remember) to come up with ideas about what needs to be done. There are several industry organizations and experts that could be tapped to provide ideas, which the state is not using: the Pacific Northwest Aerospace Alliance, the Pacific Northwest Defense Coalition and INWAC in Eastern Washington, just to name three. The state-appointed Washington Aerospace Partnership doesn’t have a single industry representative on it, which is astounding, but it could come up with suggestions for economic development since the membership is overly weighted with these organizations.

Let’s stop the bickering, roll up the sleeves and get to work coming up with a forward-thinking, bi-partisan aerospace plan for Washington.

CSeries Competition: The Puget Sound Business Journal has this article looking at the competition the Bombardier CSeries will give the incumbents.

Meanwhile, Bombardier has undertaken low-speed taxi tests for the CSeries. This is, of course, a prelude to first flight.

A380 deployments: This article goes down the list of Airbus A380 operators and how the aircraft are deployed and configured.

Boeing raises prices: Boeing hiked the list prices slightly of its commercial airplanes. Here is a report comparing Boeing’s new prices with Airbus.

Odds and Ends: Lorenzo weighs in support AA-US merger; lawsuit could delay AA RJ replacement; 93% airport concentration

Lorenzo supports AA-US merger: In a radio interview with Bloomberg news, Frank Lorenzo supports mergers in the US airline industry and the proposed one between American Airlines and US Airways. Lorenzo is the former CEO of Texas Air Corp, and Continental Airlines. Lorenzo said labor, shareholders and stakeholders would lose if the Department of Justice prevails in its effort to block the merger.

DOJ lawsuit might impact Bombardier: An analyst for a Canadian investment bank thinks the DOJ lawsuit could delay an order by American to replace some of its regional jet fleet. The Scotia Capital analyst covers Bombardier, so his focus is on the impact to this company but Embraer is competing for the business, too.

93% Airport Concentration: While DOJ whines about the prospect of the New American Airlines controlling 69% of the slots at Washington Reagan National Airport, the Dallas Morning News cites a report that 93% of the airport traffic at three airports is controlled by the combined Southwest Airlines-AirTran company.

Our own Milestone: Today we surpassed one million views in a single year, running about 55% YTD ahead of last year.

China short on re-engine orders, but nearly 400 C919 “commitments”

The Chinese government and airlines have very few orders for the re-engined Airbus A320neo family and Boeing 737 MAX. There are no identified Boeing 737 MAX orders in China and just 19 A320neos.

There are 197 Unidentified MAX orders, some of them rather large. China in the past has placed large Unidentified orders with Boeing that remained so categorized for years, but there is no way to tell if this is the case right now.

Nor has China placed any orders for the Bombardier CSeries despite growing commercial ventures between Bombardier and the C919 developer, COMAC.

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CSeries first flight: late August or September (analysis)

We believe the first flight of the Bombardier CSeries is planned for late August or early September, based on the coming flight “in weeks” statements from BBD. We note this is “weeks” rather than “days,” and it is not as ambiguous as “the third [or fourth] quarter.”

BBD said it can’t “pinpoint” a date for first flight, in response to a reporter’s question about the first flight at the end of August or in September.

  • BBD’s second quarter slide presentation is here.

CEO Pierre Beaudoin said on the earnings call that the integration of the APU and engines is running smoothly and software upgrades are being upgraded but is taking longer than anticipated. He said first flight is to be in “coming weeks.”

During the Q&A, BBD said “nothing has changed as far as entry into service” despite previous statements that the flight test program would take 12 months, and this timeframe was reiterated. So this certainly suggests EIS slips from mid-2014 to late third quarter at the earliest. (Some analysts yesterday slipped the EIS to early 2015 and we tend to agree.)

BBD would not comment on the possible impact the delays will have on compensation coming.

The company also said that the “earned value” of tests were not quite as anticipated, citing an example of wiring being stalled upside down that requires up to two days to fix rather than a half-day for the anticipated testing.

“The test for the first Flight Test Vehicle is much more intense than for the next FTVs, so it takes a lot more time,” BBD said. “This is the first time…we’re learning.”

The flight test program will have five CS100s and two CS300s and additional tests with the first couple of production airplanes.

“We’ll adjust as we need to adjust [the flight test schedule of 12 months” depending on what emerges.

Embraer’s E2 program begins in the regional arena and comes up into the CSeries arena, and EIS is from 2018 and it is a derivative, Bombardier noted.

“We have two very good products in a unique market. The airlines say they have a need for a smaller airplane with seat costs for the larger airplanes, and the A319 and 737 [700/7] do not do,” the company said.

Bombardier CSeries first flight target: still in “coming weeks”

Bombardier announced its second quarter financial results today and repeated in its press release the first flight of its CSeries will be in “the coming weeks.”

News articles are here and here.

An earnings call is at 10 am EDT today.

A Bombardier official yesterday said the entry-into-service, slated for mid-2014, will be “reassessed” after first flight. BBD in the past had pretty much planned one year for EIS after first flight. We’re going to predict this will slip to early 2015 now.

  • Separately, Bloomberg News has a story about how Bombardier is facing pricing pressure from Embraer. This puts BBD in a squeeze between EMB at the bottom and Airbus above; we’ve written several posts about the Airbus pricing in A319/A320 competition against CSeries.

Odds and Ends: CSeries first flight delayed into August; Boeing 2Q profit; 787 future; LHR fire solution

CSeries First Flight: Bombardier announced today that the first flight of the CSeries has slipped into August. Here is the press release.

Boeing 2Q profit: Boeing reported a solid profit in the second quarter, with increased cash flow as 787s deliver. Impact of 787 grounding (primarily a first quarter event) minimal. Here is the press release.

787 future: Bloomberg News takes a look at the history of bad PR surrounding the Boeing 787 and the future reputation of the airplane.

London Heathrow fire solution: Investigators appear to have solved the cause of the London Heathrow fire on the Ethiopian 787: shoddy installation of the Electronic Locator Beacon. The Seattle Times has this update. Bloomberg earlier reported the investigation was focusing on pinched wires. Reuters was the first to report the pinched wire theory. This is good news for Boeing: it wasn’t the plane’s fault.

Svalbard Trip Report 1, and other random thoughts

We’ve finished our Svalbard trip, the first leg of a multi-stop venture. We’ve taken nearly 300 photos and it will take some time to sort through these. Below are some we took with our handy dandy Blackberry.

Before getting to those, we have some random thoughts about the scores of emails awaiting us when we got back into signal.

  • We saw an article in which Airbus’ John Leahy remarked he has an A350 in the works with derated engines to more closely compete with the Boeing 787-10 on economics and range. We’d been hearing since March about another version of the A350, but hadn’t nailed down information. Now that it is out there, we’ll tackle this when we are back.
  • Boeing briefed the 777-8X and 9X at the Paris Air Show, but only talked about an 8X with a 9,400nm range. We have on tape comments from Mike Bair that Boeing will offer a lighter weight 8X with an 8,400nm range to more closely compete with the A350-1000. We’ll follow up with this when we are back.
  • Bombardier delayed first flight of the CSeries to late July. We got tipped about this just before we left from one of our more astute readers but couldn’t confirm it. Another one for follow-up.

We’re back July 10 but probably won’t post anything of substance for a few days later.

Now to some early Svalbard photos.

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Washington State boosts efforts for global supply chain

 Washington State is ratcheting up its efforts to expand its supply chain work beyond Boeing, state and federal officials said in their final Paris Air Show conference call.

 “Don’t underestimate the European companies that want to do business in the US because they want to do business in US dollars,” said US Rep. Rick Larsen, who led the State’s air show delegation, filling in for Gov. Jay Inslee who stayed home to deal with budget issues. “They want to get into Boeing.” Larsen said an experienced workforce is the #1 issue. Companies want “to start today rather than wait for other states. This is one of the distinguishing factors for Washington.”

“We want to go after supply chain for the entire industry,” Inslee said, noting that European suppliers want to come to the US for dollar-based work.

“One of the things that is becoming more and  more apparent to us is we have great opportunities in the entire supply chain,” Inslee said. “Thirty-five percent of jobs [in Washington] are in supply chain. We can be very competitive because of their desire to deal in dollars. We need to make sure we build on that opportunity and this is one reason we want to have the budget to build on training.

“We have to think expansively to think of these opportunities.”

Inslee said that 75% of suppliers here do business with Boeing, 40% work with Airbus, 39% with Bombardier and 25% with Embraer.

“The supply chain has flown under the radar,” Inslee said. “We really haven’t given it enough attention on our economic strategy. This is a supply chain that can service all the manufacturers. We don’t live in a single company world any more. We have to serve all of it.”

Inslee said he’s still working on retaining the Governor’s Office of Aerospace in the yet-to-be written budget. The Democratic version retained and increased funding for the office. The Republican version eliminated funding. There was an impasse in the regular session of the Legislature to agree to a state budget and the special session so far has not seen an agreement. If a budget isn’t approved by July 1, the state government starts shutting down.

Inslee proposed budgets for more workforce training and for transportation improvements to make it easier for goods to ship to Boeing and the supply chain. These, too, are stalled in the budget impasse.

It’s official: Boeing launches 787-10 with 102 orders, commitments

Here’s the Boeing press release.

Boeing expects the 787-10 to perhaps be the best selling model of the family over time. With a range of 7,000nm, it will have the ability to do most airline missions; 8,000nm-8,500nm range airplanes (let alone the proposed 9,400nm range of the 777X) is really more than most carriers need. We expect the orders to double by the end of the year.

In other Paris Air Show news, easyJet chose to stay with Airbus for its fleet renewal ordering a combination of 35 A320ceos and 100 neos. This was hard-fought competition. Boeing thought it won the deal on price, and Bombardier was ready to go with its own contract when Airbus came in at the last minute with a low price of its own, blowing both competitors out of the water.

Bombardier: This story explains in part why Bombardier has been challenged in selling the CSeries. The US Scope Clause inhibits sales to regional airlines; and lessors want to see a broader customer base. This is in addition to Airbus under-pricing Bombardier in key campaigns to block sales.

ATR landed an order for up to 90 ATR-72-600s.

Boeing will market the Embraer KC-390 to the Pentagon. After all the Boeing campaign about the Pentagon buying a foreign airplane for a tanker, this really takes the cake.