OEM implications from UA-CO merger

This is our quick take because we’re really busy.

  • Don’t assume Airbus or Boeing will be the long-term exclusive supplier to the new United. Even though Continental’s Jeff Smisek is the new CEO and he’s from the Continental-exclusive-Boeing-customer company, the new United is to have a balanced mix of officers and United has been a major Airbus customer.
  • United’s order for the Airbus A350 remains intact and the Continental crowd inherits this.
  • There remains a United order for about 42 Airbus A320s, though UAL has repeatedly said it didn’t expect to take delivery of this order. We’ve never followed the logic, fully expecting UAL to renegotiate the purchase price at some point as part of a new order.

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Bombardier lays foundation for Chinese CSeries order

Bombardier has positioned itself for a major CSeries order in China with the announcement on March 30 of a $3.85bn financing deal with a Chinese financial institution.

CDB will provide the financing for Bombardier’s Q400 turboprop, the CRJ and the new CSeries. Bombardier already contracts with the growing Chinese aerospace industry for major fuselage sections and other components for all three of these airplanes.

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Don’t assume A320, 737 RE programs

Geneva, Switzerland: Here is a report we did for Commercial Aviation Online from the Aircraft Finance and Commercial Aviation conference, followed by some additional commentary and reporting exclusive to this column concerning the prospect of re-engining the Airbus A320 and Boeing 737. Our additional commentary includes a discussion of the Bombardier CSeries and the PW GTF engine.

Here is a podcast we did today on the topic.

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WTO Airbus ruling due Tuesday

Update, March 24, 10:15PM Central European Time:

The reaction to the WTO Final Report at the Aircraft Finance Conference is a Big Yawn, even among Americans here in the Geneva, Switz, venue. As one person with close ties to Boeing put it, “Nobody cares.”

At a briefing we attended Tuesday night about the final report, we didn’t hear anything that meaningfully changed our commentary below.

Original Post:

The Final Report on the US complaint about illegal subsidies to Airbus is due tomorrow (March 23), but it will remain confidential until sometime in April before a public version is released for all to see.

Partisans on both sides of the dispute are already lining up in pre-issuing statements and, in the US case, an orchestrated media campaign touting how dastardly Airbus has been.

Yeah, well, whatever.

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A320, 737 Re-engine picks up steam

This story has suddenly picked up speed as both Airbus and Boeing discuss re-engine options for their single aisle airplanes. Scott Hamilton and Jon Ostrower discuss the nuances facing both firms – the engine options, the competitor moves and of course, the CSeries which seems to be driving a lot more of the discussion than many would give it credit for. The stakes are huge for Airbus and Boeing as their biggest money makers are faced with being leapfrogged by new engine technologies that enable a CSeries to take away crucial orders. Republic’s recent order was more influential than many think – and the chance to win at United is quite real for the CSeries. Consequently a lot of time is being spent at Airbus and Boeing talking, designing and considering options. This is a fascinating story unfolding before us.

Here is a 28 minute podcast by Innovation Analysis Group on this subject. It could have been longer….

CSeries unites Airbus, Boeing

Airbus and Boeing are bitter rivals when it comes to government support for their respective airplane programs but they are united when it comes to the proposed funding for Bombardier’s CSeries, according to this article in The Wall Street Journal.

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The Coming Aerospace Squeeze: Emerging Competitors

AirInsight has released a report entitled “The Coming Aerospace Squeeze – a review of commercial aircraft programs in Brazil, Canada, China, Japan and Russia.”  This report summarizes current and planned aircraft programs in each of these countries and the potential impact of those programs on the commercial aerospace market.

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Embraer fires warning over CSeries launch aid

Here we go, the first fall-out of the Airbus-Boeing trade Interim Report. Brazil (Embraer) complained to the European Union about launch aid by Canada to Bombardier for the CSeries and asked the EU to force Canada to cancel the package. Predictably, Canada invited Brazil to…do…something.

Here is the story.

Paris Air Show preview

The Paris Air Show begins on June 15 and we’ll be there.

We’re attending the EADS media day on the 13th and will extend our stay through Tuesday (the show runs through Friday). We don’t expect much in the way of orders. The biggest anticipation will be whether Boeing will fly the 787 before or during (not “at”) the show.

Here are things as we understand them going into the show:

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China’s Western aviation recuitment alarming

The news that China’s AVIC is recruiting Western executive talent for its aerospace subsidiaries is alarming.

Long-time readers of this column and our main website know that we’re concerned about Western technology transfer by Airbus, Boeing, Bombardier and Embraer to China, Japan and Russia as the Big Four pursue outsourcing. We’ve seen each of these countries produce regional airliners and China and Japan announce plans for a 150-seat jet.

None of the regional airliners are likely to be commercial successes, but we think China’s ARJ-21 and Japan’s MRJ are probably proving grounds for the larger jets. Japan’s Heavy Industry that are industrial partners to Boeing’s 787 program openly said they are using 787 wing technology they developed for the MRJ and the planned 150-seat jet.

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