Leeham News and Analysis

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There's more to real news than a news release.

PNAA aerospace conferences in February, March in Seattle

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.

 1 Comment

 Posted on November 13, 2011 by

 Airbus, Boeing, Bombardier, CFM, EADS, Pratt & Whitney

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Embraer decides on re-engine, takes a pass on NSA

Embraer announced that it will take a pass on developing a New Small Airplane in the 130-155 seat class and instead re-engine the E-Jet series, possibly with stretch to 133 seats (smack in the middle of the Bombardier CSeries 100/300 size). Targeted entry-in-service (EIS) is 2018.

Aeroturbopower, which focuses on engine stuff, already has this back-of-the-envelope analysis.

As Aeroturbopower notes, EMB favors a one-stop, trans-continental airplane (2,000-2,200nm) over the full transcontinental range of the CSeries (although BBD offers a lighter-weight CSeries with 2,200nm range as well). About 90% of the US domestic flights are within this range but the E-Jet is 2×2 vs the CS 2×3 seating. Aeroturbopower concludes the E-Jet will have lower seat costs.

Aeroturbopower also compares the E-Jet with the Mitsubishi MRJ.

 6 Comments

 Posted on November 11, 2011 by

 Bombardier, CFM, CSeries, Embraer, Pratt & Whitney, Rolls-Royce

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Airbus chief bemoans slow pace of change: Aviation Week

Robert Wall has this short article that raises an interesting point. Tom Enders, the CEO of Airbus, “bemoans” the slow pace of change in aviation. He is quoted as saying that the aviation industry has forgotten how to “take risks and manage” them properly.

There’s a lot to be said for that. Airbus had its own issues with the A380 production management and the A400M program design. It remains to be seen how challenging the A350 production becomes, but there is ample evidence that the challenges are just beginning.

Bombarier says its CSeries program is on time but margins are largely gone.

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 19 Comments

 Posted on October 19, 2011 by

 Airbus, Boeing, Bombardier

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Boeing claims 737MAX better than each NEO

Here is a very clever photo shop of the Boeing MAX colors.

Here is an expanded version of a story we did for Commercial Aviation Online:

Boeing launched its 737 re-engined airplane Tuesday, calling it the MAX (for “maximum” performance, capability, economics, etc) with the -700/800/900 renamed the -7/8/9 and claimed that each model is better than its corresponding Airbus A320neo competition.

Boeing’s press release and press conference focused on the 737 MAX-8 vs the A320neo, “the heart of the market,” according to Nicole Piasecki, VP of Business Development and Strategic Integration. Boeing claims the 737-8 “will have the lowest operating costs in the single-aisle segment with a 7% advantage over the competition. The airplane’s fuel burn is expected to be 16 percent lower than our competitor’s current offering and 4% lower than their future offering,” the company said.

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 74 Comments

 Posted on September 1, 2011 by

 Airbus, Boeing, Bombardier, CSeries

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Replacing 757s; Bombardier’s Scott and Delta; pricing engines

AirInsight, in a burst of prolific writing, posted three pieces of note today:

 32 Comments

 Posted on August 25, 2011 by

 Airbus, AirInsight, Boeing, Bombardier, CFM, CSeries, Pratt & Whitney

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Odds and Ends: Delta’s small jet deferral and other things

  • Delta Air Lines deferred the highly anticipated order for the 100-150 seat airplane due to worries about taking on too much debt in the current economic environment. Multiple sources say Bombardier’s CSeries had been favored over the Embraer E-195.
  • Delta’s RFP from Boeing didn’t include the re-engined airplane because at the time of the RFP, the 737RE didn’t exist. But we are 99% certain conversion rights will be in the final contract.
  • The Airbus A321neo does have its promised EIS until 2017, and Airbus was unlikely to be able to offer production slots for this model until 2019. Delta wants all aircraft delivered by 2018 and Airbus couldn’t meet this with the A321 Legacy, either. Plus the price was higher.
  • At 10:50am PDT our readership YTD exceeded all of 2010.

 13 Comments

 Posted on August 22, 2011 by

 Airbus, Boeing, Bombardier, Embraer

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Delta to order 737-900s, small airplane order deferred

Bloomberg News just tweeted Delta Air Lines is to order 100 Boeing 737-900s. WE have three sources saying the same, though without the number.

Boeing won the deal over the Airbus A320/320neo due to earlier delivery positions and price, we are told.

Update, 9:50am PDT: We heard last week that Delta may defer ordering the 100-150 seat airplane and while we’ve been working to confirm this, Flightblogger beat us to it.

UPDATE 12:46 PM ET: CONFIRMED – Delta will order 100 737-900ER aircraft, the largest single order for the type. Further, industry sources confirm that a selection of a smaller narrowbody that pitted the CSeries against the Embraer E-195 has been delayed, as the airline does not see the same level of urgency to replace its 757s starting in 2013. The airline’s aircraft evaluations excluded consideration of the re-engined narrowbodies from Airbus and Boeing. FULL STORY SHORTLY

 29 Comments

 Posted on August 22, 2011 by

 Airbus, Boeing, Bombardier, Embraer

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Embraer ponders new, 2,000nm airplane

 

 

Embraer is pondering a new, 2,000nm airplane in the 130-150 seat class. Here is the Flight Global story.

The interesting thing about this is that Bank of America’s Ronald Epstein characterizes the CSeries as having too much range with 2,950nm, which gives it US trans-continental operations. In fact, Bombardier offers two versions: the 2,950nm range XT and the 2,200nm standard.

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 9 Comments

 Posted on August 8, 2011 by

 Airbus, Boeing, Bombardier, CSeries, Embraer

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Analysts opine on Embraer, Bombardier

Goldman Sachs and JP Morgan issued notes this week that give some opinions on rivals Embraer and Bombardier:

Goldman Sachs: Embraer

July 31: We believe Embraer remains the best, yet most ignored, story in our commercial aerospace coverage. We highlight the following key incremental takeaways from the EPS report and conference call: (1) 2H regional jet new orders could equal or surpass 1H (even though 1H was a record) which would mean full-year 2011 book-to- bill would surpass 2.0X. We think demand for the E-190 right now is stronger relative to current supply than any aircraft in the world. (2) Tone on business jet was noticeably more positive for the first time in a while, with particular strength noted on the Phenom 300. We think ERJ can close to triple its business jet revenue between now and 2015. (3) Defense opportunities are occurring faster than expected. We continue to see very large upside potential in ERJ’s Defense segment given initiatives around the World Cup and Olympics and how large the KC-390 program will be. (4) Management sounds confident it can continue to expand margins despite the Real, and possibly meaningfully if the Real were to reverse. (5) Next-gen product   strategy decisions are likely made by year-end, and it sounds like one of either a clean sheet or E-195 stretch / re-engine will occur (we believe the case for the latter increasingly makes sense).

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 4 Comments

 Posted on August 2, 2011 by

 Bombardier, Embraer

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American is the launch customer for 737RE–but not the launch operator

American Airlines is the launch customer for the Boeing 737 re-engine, but it’s not the launch operator.

As American’s 10Q SEC filing revealed the day the order was announced, AA won’t take delivery of the first 737RE until 2018. EIS is planned for 2016 or 2017.

We asked American about this. Sean Collins, director of financial communications for the airline, confirmed American doesn’t want to be the first operator of the aircraft.’

“We don’t like to be the first in line for a new airplane,” he said. “There is a learning curve to be worked out. We like to let that process work its way out. That’s the approach we’ve taken.”

American’s status as the launch customer but not the launch operator is somewhat ironic. Bombardier came under a great deal of criticism for having launch customers but not launch operators for its CSeries (a point rectified at the Paris Air Show, with an unidentified network carrier placing an order to become the launch operator). In fact, Boeing’s Nicole Piasecki, VP of Business Development and Strategic Integration, made the same criticism toward BBD in Boeing’s pre-Paris Air Show press briefing.

While BBD’s critics point to the facts that the CSeries is an entirely new airplane, using new materials, production techniques and suppliers, the 737RE is intended to be a reasonable straight-forward derivative of a well-established airplane. That American is sufficiently wary of being the launch operator is a statement of some kind.

We’ll leave it to analysts and observers to make their own interpretations.

But American’s decision leaves Boeing in the position of being able to offer initial delivery slots to Southwest Airlines and Delta Air Lines. Southwest launched 737 derivatives -300, -500 and -700 and has been agitating for two years or more for Boeing to upgrade the 737 or, preferably, proceed with a new airplane. Delta is currently deciding on the 757 replacement, evaluating the 737-900ER and the A321neo. A re-engined -900ER should change the dynamics of this competition a bit.

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 9 Comments

 Posted on July 27, 2011 by

 Airbus, Boeing, Bombardier, CSeries

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