Odds and Ends: Wrapping up 2014 in the news

Dec. 31, 2014, just under the wire: 2014 is over and there was some news unrelated to the loss of AirAsia flight 8501:

Bombardier: The company received a firm order for 24 CRJ900s from an unidentified customer (we believe it is a US regional airline). The National Post of Canada also has this look at how 2015 will be a “pivotal” year for the CSeries. BBD also announced an order from mega-lessor GECAS for five Q400s and options for 10 more.

ARJ-21 certified: The Chinese government certified the COMAC ARJ-21, the 70 seat regional jet that looks like the old Douglas DC-9-10. The airplane is now supposed to go into service in April or May, only eight years late.

Boeing declares victory: The year was really over yet but Boeing declared victory over Airbus in this Dec. 29 story in The Seattle Times. Yes, Boeing will deliver more airplanes than Airbus in 2014, but will it truly end with more orders? Airbus won’t reveal its full 2014 performance until its annual press conference Jan. 13, and it’s famous for announcing a whole bunch of orders to pull the proverbial rabbit out of the hat. So we’ll wait and see then who truly has the bragging rights for the full year.

Airbus and Boeing: For all of our extremely partisan Airbus and Boeing readers, choke on this one: Airbus and Boeing have teamed up to bid on a defense contract, reports Aviation Week.

Real-time tracking: It’s possible and it’s being done. See this Washington Post article.

Airbus/Boeing duopoly single-aisle is safe well into 2030 decade

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Introduction
Dec. 28, 2014: Two challenges to the duopoly of Airbus and Boeing in the 150-220 seat single-aisle sector move forward in development in 2015, but neither is in a position to be a threat for the balance of this decade, nor even in the next.

Both challenges, the COMAC C919 from China, and the Irkut MC-21 from Russia, will for various reasons fall short of the Airbus A320/321 and Boeing 737-8/9 and plans to design the next generation new single-aisle airplane.

Summary

  • The C919’s chief advantage was eliminated when Airbus and Boeing moved to reengine the A320 and 737 families.
  • C919 retains pricing advantage but won’t overcome duopoly dominance.
  • By the time the C919 enters service, Airbus and Boeing will have the second generation of LEAP and GTF engines available.
  • The MC-21 takes into account better passenger comfort through a wider fuselage, but engines will be no better than those used on Airbus and Boeing.
  • The MC-21 sales potential will be highly limited because Russia still hasn’t become a full trading partner due to political direction.

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World’s dud airliners

While we’re in the slow-news Holidays, we thought we’d have some irreverent fun. There have been many attempts at building airliners. There are the obvious successes but there have been many, many failures. Starting with the end of World War II, we’ve collected the following for our nominees for duds–sales or technological failures. We invite readers to make their own nominations. If you have photos, add them to your Comments.

This list is in no particular order. Next week we’ll construct a poll to see how the airplanes rank. Read more

New UTC CEO throws cold water on PW GTF growth

The new chief executive officer of United Technologies Corp., Gregory Hayes, threw cold water on hopes and dreams of Pratt & Whitney, a subsidiary, that the successful small- and medium-sized Geared Turbo Fan will grow into the wide-body market.

Aviation Week just published an article in which all three engine OEMs were reported to be looking at a 40,000 lb engine that would be needed to power a replacement in the category of the Boeing 757 and small 767. Hayes did not specifically rule out a 40,000 lb engine, leaving PW’s potential to compete for this business unclear.

Hayes has been CEO for two weeks. He was previously CFO. He made his remarks in a UTC investors event last night. The Hartford Courant has this report.

Hayes’ remarks were in response to a question from an analyst about research and development expenses. Here is his reply, from a transcript of the event:

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Assessment of Lessors in Airbus and Boeing backlogs, narrow- vs wide-body

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Introduction

Nov. 30, 2014: Airlines now lease about 50% of their aircraft under a variety of mechanisms: operating, finance, leveraged and Islamic leases, just to name a few.

There are operating leasing, special purpose and “house” companies. There are leasing units of investment banks, insurance companies and a host of others.

Ireland is a popular leasing venue because of favorable tax laws.

The Big Four airframe OEMs have long sold aircraft directly to lessors, and the emerging airframe OEMs, COMAC and Irkut, have seen orders placed by emerging lessors in their home countries. ATR, the turbo-prop OEM, also has received orders from lessors.

Today we look at the lessor relationships with Airbus and Boeing.

Summary

  • Lessors represent a significant, but still a minority, part of the Airbus and Boeing backlogs.
  • Widebody airplanes constitute a small portion of lessor orders.
  • Boeing has more widebody lessors orders than Airbus.
  • Airbus has a larger lessor order book than Boeing.

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Asian airline market: overheated, balanced or just some spot troubles?

The Zhuhai Air Show, underway this week, comes against the backdrop of rising concerns–and large orders announced in recent weeks–of an over-ordered Asian market.

We’ve expressed concern about the large number of orders at Lion Air and AirAsia Group and AirAsia X–these two airlines alone have about 1,000 orders of various Airbus and Boeing types–and the proliferation of low cost airlines for which a shake out is inevitable. We also have expressed concern about India.

Two reports were issued in recent weeks, one arguing Asia is not over-ordered and the other taking a much deeper dive into the entire Asian market.

Lessor CIT Aerospace concludes not only is Asia not over-ordered but China is vastly under-ordered.

The Centre for Asia-Pacific Aviation (CAPA) issued a 72 page study that examines Southeast Asia, India and China. CAPA concludes the LCC market is only in its infancy in China, India continues to be a financial disaster and Asian airlines are struggling for profitability.

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Zhuhai Airshow: China’s aircraft industry is gaining speed

The 10th Chinese airshow at Zhuhai opened today. It was a day with fewer announcements than expected from the usual suspects (Airbus, Boeing…) but the Chinese industry did not disappoint. China is now showing more and more of its coming might as a player on the aeronautics arena.

The most prominent displays at this show were on the military side, where China has two stealth aircraft projects flying (the large Chengdu canard J-20 and the smaller Shenyang J-31) while their canard Chengdu J-10 was flying the display circuits overhead (Figure 1).

J-31 Kopie

Figure 1. Chinas latest fighter developments; the J-31 and J-20 stealth fighters and the canard J-10. Source: China internet.

All aircraft are of latest structural and aerodynamic design if not in engines and systems. This is a big difference to previous shows where the Russian Sukhoi and MIG aircraft and their local copies did the flying display until 2008. Since then everything has changed and now China and USA are the only countries in the world with two different stealth designs flying. USA has one in operation (F-22) and one close to (F-35) whereas China still has many years to go until they have their new aircraft operational. But it is significant that the old aeronautical behemoths Europe and Russia have none respective one (PAK-50) stealth fighter in flight test.

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Zhuhai Airshow begins Tuesday: order announcements expected

The Zhuhai Air Show begins next Tuesday and a visit by President Obama to Beijing for a regional summit starts on the last day of the show, Nov. 16. Accordingly, we expect at least some orders to be announced during the show by Airbus, Boeing and perhaps the other airframe OEMs, including the home-grown COMAC, developer of the C919 and parent of AVIC, the developer of the ARJ21.

The Zhuhai Air Show has evolved into China’s premier show. While not on the international reputation and prestige of the long-established Farnborough, Paris and Singapore air shows, it’s become an important must-attend for OEMs and others wanting to do business in China.

Here is our forecast for next weeks’ event.

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Odds and Ends: C919 EIS in 2020, says consultant; Qantas goes on diet; BBD tables Russia; Swiss not Cseries launch operator

C919/ARJ21: Aviation Week reports that the COMAC C919 might fly be the end of next year and that EIS may be in 2018.

However, Michel Merluzeau, of G2 Solutions in Kirkland (WA), predicts the EIS won’t happen until 2020. Speaking last week before the British American Business Council-Pacific Northwest unit conference in Seattle, Merluzeau said that after a recent trip to Shanghai, where COMAC is, he now sees EIS in 2020, some four years late and 12 years after the program was launched. The C919 competes with the Airbus A320/321 and the Boeing 737-800/8 and 737-900ER/9.

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