There are several items looking at the Paris Air Show outlook:
AirInsight had a live discussion Friday with Addison Schonland, Richard Aboulafia and Ernie Arvai hosting it. The transcript is here.
AirInsight also published a lengthy written preview of what to expect from all the major airframe and engine OEMs here.
Here’s a short-take on Airbus at the show.
AinInsight will host a live pre-Paris Air Show discussion Friday, with guest Richard Aboulafia of the Teal Group. Sign up to participate here.
Also look for AirInsight’s Paris Air Show preview next week. We historically have done air show previews here but this year we’re combining our thoughts with our partners, Ernie Arvai and Addison Schonland at AirInsight. AirInsight will go down the airframe and engine OEMs with our outlook for orders and announcements.
Addison and I will be at the air show, providing daily coverage. I’m also attending the Boeing pre-air show briefings this week (with news embargoed to June 19); and the EADS/Airbus media day June 18, at which there will be an A350 briefing that had been scheduled for May 31 but was postponed to the media day.
Just a hint of AirInsight’s preview next week: we’re expecting Airbus to announced and firm up several hundred orders for the A320neo and more A380 orders; Boeing may have some 747-8I orders ready to announce; Bombardier should have more CSeries orders; CFM will get its first LEAP-X orders on the neo (and these will be large numbers) while Pratt & Whitney will continue to add to the GTF book; Embraer won’t announce a new airplane and neither will Boeing; ATR (an EADS company) will have a nice turbo-prop order; and we expect a major announcement from Rolls-Royce.
Here are some more photos from our DC-7B trip. All photos by Scott Hamilton.
The decision is in on the appeal of the WTO panel decision in the Airbus and pending on the WTO’s panel findings on Boeing.
The “what’s next” is dispute resolution and, failing this, the prospect of imposing tariffs on Airbus and Boeing airplanes.
This won’t happen. Why? It’s simple: too much is at stake. Neither company wants a trade war.
We’re off hiatus, having completed several projects that now gives us some time to pay attention to this column.
It didn’t seem to get much pickup but on the Boeing 1Q earnings call, CEO Jim McNerney said something on the call that really perked up our ears.
First, some necessary context.
1. JP Morgan looks at Bombardier
Aerospace analyst Joe Nadol has an interesting take on Bombardier and the next 12 months. Nadol begins with, “We believe Bombardier may be better positioned now than at any time in the 10+ years we’ve followed the stock,” and continues:
Three Important BBD Drivers: 1) CSeries, 2) CSeries, 3) CSeries. With the business jet and train businesses both poised for solid earnings growth, the CSeries is now clearly set as the key likely driver of the stock. There are two primary issues here. The first is demand, and we believe the program needs to start racking up more orders this year, even by the Paris Air Show in June. We believe there is a high level of interest, and we are fairly confident Bombardier will sell more aircraft. The partnership with Comac that Bombardier announced last week seems to foreshadow meaningful Chinese orders. Bombardier also has nearly $12 bil in financing for CSeries aircraft available from Chinese sources. The second issue is execution. Management noted that Bombardier still expects to fly the aircraft next year and also highlighted some recently achieved milestones for the engine. However, Flight reported in recent weeks that the date for first flight may have slipped by a few months into next fall, so the program does appear to be experiencing at least the normal level of fits and starts. Thus far, the CSeries appears on track overall, but execution obviously remains a major overhang given the complexity of the program and the well-known problems the industry has had meeting cost and schedule targets in recent years.
Odds and Ends this week:
Note: this is unusually long, 11 pages when printed.
The new year is here and it is time for our annual look-ahead for the big OEMs.
On a macro level, 2011 should be a good year. Airline passenger and cargo traffic recovery should continue. The global economy also is recovering, but it is almost painfully slow to do so. Still, this is better than some of the alternatives.
Airlines and lessors are likely to continue their order stream that resumed in mid-2010 at the Farnborough Air Show. There could be some key orders that will influence the OEMs and their strategies going forward.
On the military front, we are much more limited in our tracking. We follow the KC-X tanker program because the offerings are based on commercial airliners. We slightly follow the P-8A Poseidon for the same reason, but Boeing pretty much has the monopoly for this type airplane, so there isn’t much to follow.
We do closely follow cybersecurity issues, if for no other reason than it is so important but also because key aerospace companies, including Boeing, have major efforts in this arena.
But by and large, we focus on the OEMs, the emerging competitors and the new engines.
So let’s get to it.
Update, Dec. 13: FlightGlobal has this interview with Ryanair and its critique of the NEO.
The (London) Financial Times has this interview with Boeing Commercial Airplanes CEO Jim Albaugh in which he says there is no compelling reason now to re-engine the 737.
Boeing believes the newly announced Airbus A320neo family merely brings the legacy A320 family to parity with the 737 or at most provides only a 3%-4% direct operating cost advantage to the NEO which can be matched by yet more refinements to the 737.
Airbus refutes Boeing’s conclusions but won’t release its own numbers, regarding them as proprietary. But in a new study, The Business Case for the Bombardier CSeries, by AirInsight, with which we are affiliated, AirInsight’s independent analysis concludes the NEO generally has at best a slight advantage over the 737-700 and 737-800–but nothing to shout about.