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Looking ahead to 2013 in Commercial Aviation

Last year yielded a few surprises in an otherwise predictable year.

Jim Albaugh shocked the aviation world when he retired unexpectedly at age 62. He was expected to remain in his position as CEO of Boeing Commercial Airplanes until mandatory retirement at 65.

EADS CEO Tom Enders unleashed a surprise merger proposal with BAE Systems. The deal didn’t work due to German government opposition, but he ultimately accomplished a governance restructuring—a key objective of the merger—that will reduce government meddling in the future.

Those were about it. Boeing’s much-anticipated Authority to Offer the 777X didn’t happen. ATO for the 787-10 was stealthily granted. Airbus and Bombardier, to no surprise, delayed the A350 and CSeries by a few months. Boeing came roaring back to become sales leader for the first time in about a decade, on the strength of 737 MAX sales.

What’s ahead for 2013? Here’s what we see.

Overview

With the spurt of 737 MAX sales over, narrow-body sales competition between Airbus and Boeing should return to normalcy. Will twin-aisle sales become the next growth market because of the first flight of the A350 and the program launch of the 7870-10? Will ATO of the 777X evolve into a program launch as well? Will Bombardier’s first flight of the CSeries and subsequent testing validate its claims for the new technology airplane and finally spur a large number of sales of the “show me” crowd?

Here’s our OEM-by-OEM rundown.

Read more

 17 Comments

 Posted on January 2, 2013 by

 Airbus, ATR, Boeing, Bombardier, CFM, Comac, CSeries, EADS, Embrarer, Farnborough Air Show, Pratt & Whitney, Rolls-Royce, Sukhoi

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2012’s Most Momentous event: were readers correct?

A year ago we asked the following question and received the results. Now that 2012 is all but over, do you agree with your own forecasts?

What is the most momentous event you predict for 2012?

Answer Percent
Boeing doesn’ t ramp of 787 as expected 28%
Airbus slips its schedule for the A350 23%
Boeing meets ramp up expectations for the 787 12%
Airbus stays on schedule with the A350 11%
US Airways makes a bid for American Airlines 10%
Bombardier has first flight of CSeries by year end 9%
American Airlines tells US Airways to sniff its own exhaust 4%
Bombardier’s first flight for CSeries slips into 2013 2%

 18 Comments

 Posted on December 26, 2012 by

 Airbus, American Airlines, Boeing, Bombardier, CSeries, US Airways

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Odds and Ends: E-190 v Superjet v BBD in Russia; China’s aviation; WestJet’s speed dating; Crandall speaks

E-190 v Superjet v Bombardier: With the finding that the pilot of the demo flight of the Sukhoi SSJ 100 Superjet simply flew into a mountain in Indonesia, rather than there being a problem with the airplane, the cloud has been lifted from the aircraft. So the direct match-up of the SSJ vs the Embraer E-190 can now be compared and this article does so. Bombardier’s CRJ-900 and CRJ-1000 also compete.

China’s Aviation: Airbus and Boeing think China pose the greatest threat in the future, but this analyst is less enthusiastic.

WestJet of Canada: The low cost carrier took a bold step to order up to 45 Bombardier Q400s to feed itself. Now it’s using speed dating to decide where to fly the airplanes.

Crandall speaks on AA-US merger: Former American Airlines CEO Robert Crandall weighs in on the merger between American Airlines and US Airways.

 10 Comments

 Posted on December 26, 2012 by

 American Airlines, Bombardier, Comac, Embraer, Sukhoi, US Airways

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Odds and Ends: CSeries and London City Airport; new life for BAe-146; SPEEA’s next step

It’s Christmas Eve but there is some news despite this being a slow day.

CSeries and London City Airport: The downtown airport is a highly challenging one. Aircraft have a challenging approach. The runway is short. British Airways operates the Airbus A318 to New York with a refueling stop westbound. Bombardier says its CSeries can do the trip non-stop. This article provides some detail.

New Life for BAe-146: This airplane didn’t have much to recommend it. In its original 3×3 configuration, it was a cramped airplane. It had four engines. The original engines were unreliable. But here’s a new life for them.

SPEEA’s next step: The Boeing engineers’ union takes another step to prepare for a strike, beginning Feb. 1.

Ed Colodny on US Airways mergers: He headed Allegheny Airlines and US Air for years, guiding the carrier through four mergers–including Piedmont Airlines, which critics widely considered that he screwed up, and PSA, which US did screw up. The Street gets his thoughts on the potential American Airlines merger.

GEnx PIPs slip a bit: The Performance Improvement Package program for the GEnx engine that powers the Boeing 787 and 747-8 has slipped a bit, according to this article.

 11 Comments

 Posted on December 24, 2012 by

 Airbus, Boeing, Bombardier, CSeries

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Odds and Ends: CSeries picks up; Air Canada’s Rouge; A380 v 747-8; Allegiant Air

CSeries picks up: Bombardier is ending the year with some upbeat news for the CSeries. First was an LOI for up to 30 CS100s from an unidentified customer. Next the wings arrived to be assembled onto FTV1 (Flight Test Vehicle 1). Then today it converted the MOU for 10+10 CSeries from AirBaltic to a firm order. BBD now has more than 350 orders and commitments for the aircraft. Update: Aviation Week has this item comparing early CSeries orders and E-Jet orders. CSeries stacks up pretty well.

Air Canada’s Rouge: Aspire Aviation has this column on the future of Rouge and the creation of WestJet’s Encore airline, and the impact on Canada’s aviation.

A380 v 747-8: AirInsight has this analysis comparing the Airbus A380 and Boeing 747-8. We discussed portions of this earlier, when the ad wars broke out between Airbus and Boeing, but this is more expansive.

Allegiant Air Acquires A320s: Allegiant Air is on a shopping spree again, this time acquiring nine Airbus A320s from Iberia Airlines.

 9 Comments

 Posted on December 20, 2012 by

 Airbus, Boeing, Bombardier, CSeries

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Some retrospective thoughts of 2012

As the year winds down, we look back and view the year as somewhat anti-climatic.

We thought Boeing would make a decision on what to do about the 777X. Hasn’t happened.

We thought there would be a formal launch of the 787-10. This didn’t happen, either, though there has been a “soft” Authority to Offer.

Bombardier won’t fly its CSeries this month, which was no surprise.

Embraer still hasn’t decided about its re-engining of the E-Jet.

Airbus’ order book will be quite respectable but a new bar had been set last year and the company is well short of matching that. (Wags will suggest that the famed Airbus “fifth quarter” has yet to occur. This refers to the seeming ability of John Leahy, COO-Customers, to announce hundreds of orders in January.)

Farnborough was expected to be so boring that we didn’t bother to go. The only surprise was Mitsubishi’s left-field announcement of an MOU for 100 MRJs with SkyWest Airlines of the USA. (This deal was firmed up this week.) This truly gives the MRJ program the boost it needs.

Boeing did come roaring back with around 1,000 orders for the 737 MAX, but this was also expected. This will return Boeing to the No. 1 spot after years of trailing Airbus.

The 787 program still has its challenges, with rework now said to extend into 2015 and a couple of in-flight interruptions that are more embarrassing to Boeing than substantive issues.

Airbus announced another delay to the A350 and skepticism still swirls around the -800’s future. The A380 remains a financial drag.

Most entertaining, and entirely irrelevant, are the ad wars that broke out between Airbus and Boeing. The churlish bickering is beneath both companies, whose public claims of efficiency for the A380 v 747-8 and A320neo v 737 MAX don’t match the data they show the airlines. We’ve been reduced to cross-checking claims by both companies with customers for reality checks.

EADS-Airbus underwent one of its required changes in leadership. Government interference continued.

Jim Albaugh shocked the industry by stepping down as CEO of Boeing Commercial Airplanes with no advance notice.

Next year will be a lot more interesting. We’ll have our 2013 preview in a few weeks.

A story of interest today:

Airbus decentralizes.

 60 Comments

 Posted on December 14, 2012 by

 Airbus, Boeing, Bombardier, Embraer

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Odds and Ends: Bombardier lands Delta’s RJ deal; 787 events in perspective; Airbus/China; Enders victory

Delta Air Lines: Bombardier, in a welcome development, landed a major order with Delta for 40+30 CRJ900s, beating out Embraer’s E-Jet proposal. Delta has a large, installed base of CRJs and EMB wasn’t too optimistic, in management-analysts meetings last week, according to research notes. But BBD liked its odds, considering the CRJ is more fuel efficient than the E-Jet (being a small airplane), even if the E-Jet is far more comfortable.

For BBD, the order is important for two reasons. First, the CRJ backlog is shrinking. Deliveries begin 2H2013, and this illustrates the point. Second, with BBD sucking up cash in advance of CSeries first flight in 1H2013, the deposits, progress payments and delivery payments are welcome, indeed.

The next face-off between the two OEMs is American Airlines, where both have large installed RJ fleets of aging aircraft.

Boeing 787 events: Airworthiness Directive. “Emergency” landing. AirInsight puts things into perspective.

Airbus lands China orders: Hmm. EU suspends plans to impose ETS tax. Airbus lands orders for 60 A320s and 10 A330s. What do you make of that…

Enders now 1-1, sort of: Tom Enders, CEO of EADS, lost his bid to acquire BAE Systems due to German government interference. The merger would have reduced government meddling, balanced EADS commercial and military business, put EADS on a more equal footing with Boeing and positioned EADS better for US DOD contract bids. But Enders has now won a corporate governance restructuring that ends government meddling in daily operations. He still hasn’t achieved his other goals, but this one is so huge that we rate Enders’ won-lost record 1-1.

 11 Comments

 Posted on December 6, 2012 by

 AirInsight, Boeing, Bombardier, CSeries, EADS, Embraer

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Random thoughts about Airbus, Boeing and related issues

We’ve been traveling on business all week and naturally the conversation was all aviation. We spoke with lessors, aerospace analysts, hedge funds and private equity. In what amounts to a data dump, here is what is being discussed “out there.” This is in no particular order.

  • The new outbreak of ad wars between Airbus and Boeing is viewed largely with eye-rolling and disdain that two world-class companies are behaving like two year olds.
  • Nobody, but nobody we talked with believes the public numbers advanced by either Airbus or Boeing.
  • Boeing will have virtually a new airplane with the 737 MAX by the time it’s done, similar to the design creep of the 747-8 and the magnitude of change between the 737NG and the 737 Classic.
  • Airbus pulled a coup with the NEO, forcing Boeing to do the MAX….
  • But there is some sentiment that Airbus and Boeing should have resisted doing a re-engine and stuck with the the current airplanes. Airbus should have let Bombardier proceed with the CSeries for the niche 100-149 seat market unchallenged, having bigger fish to fry.
  • Bombardier doesn’t know how to effectively sell the CSeries and it is unwilling to cut deals that would sell the airplane.
  • Operating leasing is a ticking time-bomb, largely (but not entirely) due to book values of the aircraft on the balance sheet far exceeding current market values.
  • Boeing claims the 787-10 will “kill” the A330-300. The market agrees–but only by the middle of the 2020 decade. Boeing can’t deliver enough 787-10s to make a dent in the global fleet before then. By then, the A330 will be about 30 years old and broadly at the end of its natural life cycle anyway. So what’s the big deal?
  • Airbus is doing a good job enhancing the A330 to keep it competitive with the 787.
  • There remains skepticism that the LEAP engine development is proceeding well. The buzz on the street is CFM still has a lot of challenges with the development.
  • There is some feeling the MAX will be late–not because of any concrete knowledge, but because of Boeing’s performance on the 787 and 747-8 programs.

Unrelated to Airbus and Boeing, our colleague Addison Schonland has this first-hand account of Isreal’s Iron Dome.

 66 Comments

 Posted on November 30, 2012 by

 Airbus, Boeing, Bombardier, CFM, CSeries

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Odds and Ends: A320 Sharklet tests better than forecast; Emirates and A350-1000

Back to work:
Airbus flight tests reveal that its Sharklet is one-half percent better on long-range operations than had been forecast.
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The company revealed that the A320 Sharklet 4% better fuel burn than the current airplane on long-range flight tests, vs. the 3.5% forecast. EIS is next month.
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The company also had the maiden flight of the A319 Sharklet on November 23. EIS is second quarter 2013.
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Airbus Photo
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Emirates and A350-1000: Aviation Week has this piece about the A350-1000 and Emirates Airlines. We’ve also been told the aircraft is overweight at this stage and field performance is a concern, we’re confident Airbus will be able to address the issues. (We’d note that field performance for the Boeing 737 MAX has also been a concern, but we also believe Boeing will overcome this. The point is that weight and performance are also concerns of new airplane programs, including the Boeing 787 and 747-8.)
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EasyJet looks at Airbus, Boeing, Bombardier: easyJet is considering all three OEMs for its next round of aircraft, considering the A320, the 737 and the CSeries.

 15 Comments

 Posted on November 25, 2012 by

 Airbus, Boeing, Bombardier

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Odds and Ends: To fly or not to fly–CSeries; Qatar’s A350s; A320 production rates

CSeries: Bombardier’s sales chief says the CSeries might fly earlier than the six month delay announced on the earnings call. See this Reuters report from China’s Zhuhai Air Show.

Qatar’s A350: Flight Global’s David Kaminski-Morrow reports Qatar switched 20 A350-800s to the larger -900, via Twitter. He was on the delivery flight of the Boeing 787 from Seattle to Doha.

A320 Production Rates: Airbus gives this assessment to Reuters at the Zhuhai Air Show.

A350-What’s the Fuss? CNN International gives this review of the A350.

CNN Travel: We’ve now started contributing to CNN Travel. Here’s our first report, the Qatar Airways Boeing 787 delivery. This writing is different than what we do here–lighter, and being travel-oriented, will trend more toward consumer and general audiences than the aviation geek world served here.

 29 Comments

 Posted on November 14, 2012 by

 Airbus, Boeing, Bombardier, CSeries

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