Leeham News and Analysis

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

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

GE analysis post Farnborough

Our wrap up of Farnborough would be incomplete without looking closer at the world’s leading engine supplier, GE Aviation, which together with partners (like SAFRAN in CFM joint venture) garnered more than $36 Billion in orders and commitments during the show. This figure was only significantly bettered by Airbus ($75 Billion) and it came close to Boeing’s $40 Billion. With such level of business the claim by GE Aviation CEO, David Joyce, that the Airbus A330neo engine business was not the right thing for GE as they have more business than then they know what to do with, was certainly no case of “sour grapes”. Read more

 68 Comments

 Posted on July 28, 2014 by

 Airbus, Airlines, Boeing, Bombardier, CFM, Comac, CSeries, Embraer, Farnborough Air Show, GE Aviation, Leeham News and Comment, Pratt & Whitney, Rolls-Royce, Uncategorized

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Farnborough Air Show, July 17: Orders summary, reflections of the show

Orders continued to trickle in as the Farnborough Air Show winds down (there could be others not listed here).

  • Airbus: Transaero, LOI for 12 A330neos and eight A330ceos; Hong Kong Aviation Capital firms up an order for 40 A320neo and 30 A321neo aircraft, announced at the Paris Air Show last year. Here is the Airbus wrap up press release.
  • Boeing: Summarizes its performance at FAS with this press release; 201 orders and commitments.

Items of interest:

Overall reflections:

Read more

 18 Comments

 Posted on July 17, 2014 by

 Airbus, ATR, Boeing, Bombardier, CFM, CSeries, Embraer, Farnborough Air Show, Mitsubishi, Pratt & Whitney

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Farnborough Air Show, July 16: Orders Summary

Here are the orders we’ve seen for today (there could be more); this should pretty well do it for the show, though it does continue through Friday and there probably will be a few more deals:

  • Airbus: Air Mauritius, MOU for four A350-900s.
  • ATR: Myanma Airways, six ATR 72-600s with options for six.
  • Boeing: After saying he was in no hurry to finalize the 777X orders, U-Turn Al (Akbar Al-Baker) did just that–Qatar Airways signed the contract for the 50 announced at the Dubai Air Show last November, with 50 options; Qatar also orders and options eight (4+4) 777Fs; Hainan Airlines, MOU for 50 737-8s; MG Aviation Limited, two 787-9s; Air Algerie, two 737-700Cs.
  • Bombardier: Nok Air converted two previously held options to firm orders for the Q400; Unidentified commitment from an existing customer for five CSeries; Unidentified order for seven CS300s and added six options; now at 513 orders and commitments.
  • CFM: 80 LEAP-1A engines (for A320neo) from Mexico’s Interjet.

Items of interest:

  • Ready for a 12 hour flight in the Bombardier Q400 turbo-prop? It will soon be available. Marshall Aerospace sent us this press release:
    Auxiliary fuel tanks for Bombardier Q400: Marshall Aerospace and Defence Group and Bombardier Aerospace are developing an External Auxiliary Fuel System solution for the Bombardier Q400 turboprop aircraft.The solution, which will be available as an official Bombardier option, will provide up to an additional 10,000lb of fuel in two external pannier tanks allowing the aircraft to fulfill a whole range of missions requiring additional range and endurance, allowing this turboprop platform to be able to sustain operations of up to 12 hours.
  • Although Airbus CEO Farbice Bregier said “no” to an A380neo, reported in The Seattle Times and linked by us earlier, today Aviation Week quotes Airbus COO-Customers John Leahy as saying a decision on the A380neo will come next year–which supports our commentary that we didn’t believe the A380neo issue is dead. Airchive reports that A350 chief Didier Evard hasn’t ruled out an A350-1100, either, just as we also noted in our commentary.
  • GE wanted to be the sole source on the A330neo, reports Aviation Week, which also explains why Airbus chose Rolls-Royce.
  • Flight Global has this story explaining how Airbus plans to be “weight neutral” for the A330neo vs the A330ceo.

 21 Comments

 Posted on July 16, 2014 by

 Airbus, ATR, Boeing, Bombardier, CFM, CSeries, GE Aviation, Rolls-Royce

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Farnborough Air Show, July 15: Orders summary

Here are the orders and commitments announced today that we saw–there could be others we haven’t seen:

  • Airbus: Avolon (a lessor) ordered 15 A330neos; CIT Aerospace, MOU for 16 A330-900s, five A321neos; SMBC Aviation (lessor), 110 A320neo and five A320ceo aircraft; BOC Aviation, 36 Airbus A320ceo and seven A320neo family 17 of which will be fore the A321 family; AirAsiaX, MOU 50 A330-900s.
  • ATR: Air Lease Corp. purchased seven ATR-72-600s.
  • Boeing: Intrepid Aviation, 6+4 777-300ERs; Air Lease Corp, six 777-300ERs, 20 737-8s; CIT Aerospace, 10 787-9s.
  • Bombardier: One Q400 from Horizon Air; revealed an unidentied customer, Abu Dhabi Aviation, for two Q400s; LOI from Falcon Aviation for five Q400s.
  • CFM: Air Lease Corp. ordered the LEAP-1A for 20 A320neo family aircraft.
  • Embraer: Azul Air, LOI for 30+20 E-195 E2 (and becomes launch customer for this sub-type); Fuji’s Dream Airlines, 3+3 E-175s, a previously unidentified customer.
  • Mitsubishi: six MRJ90s from Air Mandalay.
  • Pratt & Whitney: SaudiGulf Airlines orders the V2500 to power four A320ceos; Philippine Airlines executes a previous LOI to a firm order for the GTF for 10 A320neos; BOC Aviation, V2500 for eight of the A320ceo family listed above; International Airlines Group (Vueling Airlines), V2500 for 30 A320ceo family.
  • Viking Air: Air Seychelles, two Twin Otters.

Items of note:

  • Airbus’ John Leahy says he expects a total of 100 A330neo orders from FAS;
  • BOC Aviation endorsed the launch of the A330neo but didn’t (yet) order any.
  • Boeing said its new 777X will have a cabin altitude of 6,000 ft, the same as the 787, larger windows than its 777 Classic and the A350; features borrowed from the 787 and many that go beyond the 787 passenger experience; and lower noise.
  • Bombardier launched its Q400 Combi, seating 50 passengers and carrying 8,200 lbs of cargo.
  • Steven Udvar-Hazy, CEO of Air Lease Corp, which has a large order book for the ATR-72-600, says, the Q400 is a good aircraft, but “much more expensive to operate” vs ATR. [However, that’s at the Q400’s high cruising speed. If it’s throttled back, the operating costs are said by BBD to be comparable.–Editor.]

 11 Comments

 Posted on July 15, 2014 by

 Airbus, ATR, Boeing, Bombardier, CFM, Embraer, Mitsubishi, Pratt & Whitney

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Farnborough Air Show, July 14: Orders Summary

Here are orders that were announced on the first official day of the Farnborough Air Show (at least the ones we’ve seen from Seattle–feel free to add to the list if we’ve missed any):

  • Airbus: from Air Lease Corp: 25 A330neos and 60 A321neos. British Airways converts 20 A320neo options to firm orders; 20 A320neos from AerCap.
  • ATR: NAC places firm order for 75 ATR 42-600s.
  • Boeing: Announced what had been leaked before the show–30 737-8s from Monarch Airlines, an important “flip” from incumbent Airbus; six 737 MAX 8s and four Next-Generation 737-800s from Okay Airlines; six 787-9 Dreamliners and five additional 737 MAX 9 from lessor Avolon.
  • Bombardier signed LOIs with: Chinese airline Loong Air for 20 CS100s; Petra Airlines of Jordon for two CS100s and two CS300s; and it converted a previously announced LOI for Falcon Air of Abu Dhabi for two CS300s to a firm order. BBD also revealed a previously unidentified follow-on order for three CS300s from Air Baltic. This was announced at the Singapore Air Show.
  • CFM International won the large engine order from American Airlines to power its A319neo/A321neo fleet. We reported June 19 that this deal would come down to commercial terms, according to American CFO Derek Kerr. Given CFM’s position on the Boeing 737-800, 737-8 and Airbus A319ceo; and GE Aviation’s presence on AA’s widebody fleet, plus whatever maintenance agreements also exist, CFM/GE was in a position to offer commercial terms that Pratt & Whitney could not when offering the GTF. Also as previously noted, CFM won the easyJet A320neo family order for 270 engines.
  • Embraer: 50 “reconfirmable” and 50 options for the E-175-E2 from Trans States Airlines of the USA.
  • Mitsubishi: Eastern Airlines signed an MOU for 20 firm and 20 purchase rights for this MRJ90. Parenthetically, we’re happy that Mitsubishi also announced it will test the MRJ in Moses Lake (WA).
  • Pratt & Whitney won the GTF order for VivaAerobus’s 40+40 A320 fleet and the V2500 for 12 A320ceos.

Things of note:

  • Airbus predicts sales of 1,000 A330neos, plans two year overlap in production of A330ceo. EIS 4Q2017.

The sniping between Airbus and Boeing continues:

  • “The only way a passenger will know he’s not on a 787 is that the seats will be bigger,” says John Leahy of the A330neo vs the Boeing 787. Leahy gives good quote.
  • Ray Conner, CEO of Boeing Commercial Airplanes, calls the A330 an airplane of the 1980s. (Careful, Ray: the 737 MAX and the 747-8 are airplanes of the 1960s….)

 12 Comments

 Posted on July 14, 2014 by

 Airbus, American Airlines, ATR, Boeing, Bombardier, CFM, CSeries, Embraer, GE Aviation, Mitsubishi, Pratt & Whitney

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Farnborough Air Show preview

The Farnborough Air Show is just around the corner, and we don’t expect the event to be especially newsworthy.

Here are our expectations for the show:

Airbus
Market expectations are that Airbus will launch the A330neo at the air show, and we know John Leahy, COO of Customers, would like to do so at this event. His bosses, Fabrice Bregier and Tom Enders, have been less than encouraging that this announcement could come at the show.

Although news stories last week indicated Airbus’ board may green light the program in advance of the FAS, it was nonetheless reported that a formal public launch may not be made at the show. So what might happen? An “Authority to Offer,” or ATO, might be how Airbus proceeds. We don’t think there will be firm orders ready to go when the FAS begins July 14—although certainly Airbus could also take Boeing’s 777X approach and announce “commitments” as was done at the Dubai Air Show.

We are skeptical whether there might be any A330 Classic orders announced, as customers await the neo. We certainly expect the usual orders for the A320 Family. We expect A350 orders. We’re doubtful of A380 orders.

Read more

 14 Comments

 Posted on July 7, 2014 by

 Airbus, Boeing, Bombardier, CFM, Comac, Embraer, GE Aviation, Irkut, Mitsubishi, Pratt & Whitney, Rolls-Royce

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American easing away from continuous hubbing, returning to peak banking

American Airlines will ease away from the continuous hubbing that smooths operations at key airports, increases aircraft utilization and cuts costs as it returns to the peak-and-valley hub-and-spoke system adopted decades ago under former CEO Robert Crandall.

Although this will mean higher costs and big gaps in airport activity, the increased revenue potential–called the power of the hub under Crandall–will offset the increased costs, says Derek Kerr, CFO of American.

We were at American’s Leadership Council meeting for 1,500 employees yesterday. The meeting itself was off the record but we talked with Kerr afterwards on the record.

Kerr, CFO at US Airways prior to the merger between AA and US, said that the continuous hub can’t connect as many passengers as the traditional hub, leaving revenue on the table. Continuous hubbing allowed a 45 minute ground time, which is too short–an hour is needed to maximize connections.

Re-hubbing will occur this year at Chicago, Miami and Dallas.

Southwest Airlines was a pioneer in continuous hubbing, though it wasn’t called this until perhaps a decade ago. Southwest essentially rolls the airplanes up, deplanes, enplanes and departs. At its origin, long before carry on bags, bag fees, security issues and other factors arose, Southwest “turned” its planes in as little as 10 minutes. Today turns are 30 minutes or longer, in part as planes get larger and carry-on bags slow the enplaning process. Still, Southwest eschews the term hubbing and indeed its connection percentage is far lower than American and other traditional airlines.

The de-hubbing is just one step the US Airways management team is taking to remake American following its emergence from bankruptcy last year and the merger in December.

Read more

 9 Comments

 Posted on June 19, 2014 by

 American Airlines, CFM, Pratt & Whitney

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Airbus Innovation Days, Part 3: the A320neo

Klaus Roewe, SVP of the A320neo Family:

There are 2,700 A320neos in the backlog. Roewe provided a program update during the Airbus Innovation Days. Here is a paraphrased synopsis.

  • The first flight remains on target for 3Q2014. Final assembly began in the spring.
  • No further modification will be required to meet the target of 15% fuel burn improvement.
  • The GTF has been delivered to Toulouse; the LEAP-1A is in testing at the CFM factory.
  • Production rate is shown at 46/mo from mid-2016 through 2019.  We are investigating rate 50 and above.
  • Within the supply chain, the first NEO components are 70% better than target. More than 2,000 lessons learned from the A380 and A350 are incorporated into the NEO program. We are already testing control laws for the neo, a lesson learned from previous programs.
  • Airbus has discussed with regulators to determine that evacuation of the A320 for up to 200 passengers is possible but a configuration of 189 passengers is more feasible.
  • Maximum capacity A321neo (240 pax) reduces per-seat fuel cost by 6%.
  • Slim line seats at 28 inches feels like 30 inch seat pitch.
  • A321neo could carry 25 more passengers on a 2,500nm route departing Phoenix or Las Vegas, two hot airports that were challenging for the A321ceo (based on the CFM56 engine).
  • We are “well below” weight targets.
  • Meeting 95% commonality target.
  • There has been an increase of airlines configuring the A321 with more than 200 seats from 5% to 40%, which drove the larger-capacity design of the A321neo.
  • Flap extension will go up from 27 degrees to 34 degrees, and some changes to spoilers will be incorporated into the neo.

 8 Comments

 Posted on June 12, 2014 by

 Airbus, CFM, Pratt & Whitney

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PW Media Day 2: GTF gets 35,000 lb thrust rating

Pratt & Whitney today confirmed that it will offer a Pure Power Geared Turbo Fan engine with 35,000 lbs of thrust, an increase of two thousand pounds from the previously announced model that powers the Airbus A321neo.

Officials declined to confirm our previously reported thrust bump for the Bombardier CSeries GTF, continuing to stick with its prepared statement.

Thrust bumps are largely considered for hot-and-high operations, where the extra boost is needed to get off the runway with maximum payload. In most operations, the extra thrust isn’t needed. The trade for the extra thrust is higher maintenance costs.

Airlines, according to one engineer, tell engine OEMs that they don’t want the extra thrust as the engine is being designed because of the associated extra costs, but then invariably later say they do.

Market Intelligence tells us CFM is going to provide a 35,000 lb model of the LEAP that powers the A321neo and the Boeing 737-9 MAX.

Separately, PW announced:

  • Six prototype V2500 engines built by affiliate International Aero Engines were shipped to Embraer for its KC-390 MRTT tanker. Flight testing will begin this year and certification is expected in the third quarter.
  • PW is “significantly” increasing capacity in advance of increased engine production demands for the civil and military markets.
  • PW signed $10bn in long-term supplier agreements with 90 companies globally for civil and military engines.

 18 Comments

 Posted on May 20, 2014 by

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

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PW Media Day 1: next gen GTF to cut fuel costs 10%-15% over today’s GTF

We’re at the Pratt & Whitney media days today and tomorrow. This is the Technology at PW panel. Participants are:

Alan Epstein, engineer and moderator. (AE)

Michael Winter, chief technologists (MW)

Graham Webb, MRJ, CSeries and EJet engines. (GW)

Jimmy Kenyon, advanced military programs. (JK)

All information is paraphrased.

GW: At $4/gal, over 60% of cost to an airline is for fuel. Engines must cut these costs. A380 and 787 consume less than 3 liters per passenger, about that of a compact car.

GTF is certified [on CSeries]. GTF now on five airframes with 12 sub-types. The engine reduces fuel and maintenance costs, reduced emissions. Fuel savings now demonstrated at 16% less than today’s engines.

Next generation of GTF will further reduce fuel burn by 10%-15%.

MW: The noise footprint will stay predominately within the airport boundaries, using 2,000 fewer foils, about half of our competitor’s engine. Emissions are about 50% below current regulations and working with NASA toward 88% below current levels.

Current bypass ratio about 13:1 and currently testing with NASA 15:1 and 18:1.

375% improvement in efficiency since the days of the Whittle jet engine.

We have the most advanced cooling system in the industry and we are exploring inserting advanced materials into the engines when there is real benefit to the customer.

JK: We’re seen similar trends to improve efficiency in military as with commercial. The Department of Defense is the biggest user of energy in the country, with about 80% in engines.

The military has seen really tight budgets in recent years. There is more than just a cost issue, it’s also an energy security issue (Iraq, Afghanistan challenges). There is a real interest in cutting energy usage and aviation being such a large part, it is a natural place to look.

The strategy considers places where you have to fly farther and/or stay on station longer. We’re working on technology to provide fuel management and efficiency to reduce costs, fly father and stay on station longer.

We’re working with USAF to obtain 25% improvement in fuel efficiency on next engines, and with Navy to also improve efficiency, and leveraging work in the commercial arena to improve thermal efficiency.

AE: Are you a one-trick pony? What have you got besides the gear?

GW: We have advanced fan module, bringing forward light weight fan cases, the next generation combustor, advanced core, state-of-the-art high pressure turbine and high speed low pressure turbine, all of which designed for the very high speeds. There are control system enhancements, working on next gen of the fan-drive gear system, short inlets for enhanced efficiency.

Read more

 16 Comments

 Posted on May 19, 2014 by

 CFM, Pratt & Whitney, Rolls-Royce

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