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Introduction
Dec. 14, 2015, © Leeham Co. There are just 49 orders for the Airbus A319neo. There are only 55 orders for the Boeing 737-7 MAX.
The A319neo has been ordered by Avianca (19), Frontier Airlines (18) and there are 12 orders from Undisclosed customers.
The 737-7 has been ordered by Southwest Airlines (30), WestJet (25) and Canadian start-up Jetlines (5).
Bombardier’s CS300 is a direct competitor. There are 190 orders, but a fair number of these are soft, such as Iraqi Airways, Republic Airways Holdings and lessor LCI.
Embraer’s E-195 E2 has 90 orders through September, the most recently reported period by the OEM. While it is not a direct competitor when configured to the same standards—it carries slightly fewer people—EMB is effectively competing the 195 E2 as a replacement for the 737-700 and A319ceo in “right sizing” operations.
Summary
Posted on December 14, 2015 by Scott Hamilton
Dec. 14, 2015, (c) Leeham Co: Aircraft valuations came to the forefront following comments by Richard Anderson, CEO of Delta Air Lines, over just how much a 10-year old Boeing 777-200ER was worth. He claimed the airplane was only valued at $10m. Boeing’s investor relations department immediately pushed back against this low price, circulating to the aerospace analyst community that a number of appraisers placed the value in the $50m-$60m range.
Anderson later was quoted as saying Boeing Capital Corp. offered Delta the aircraft for that price. BCC didn’t comment.
LNC wrote at the time, and later, that Anderson was correct. We noted, however, there are a lot of caveats that come with the $10m, rooted in the fundamental fact that this price had to be for a “run out” model that would require expensive airframe and engine maintenance, repair and overhaul, and interior reconfiguration. This could add as much as $30m to the price, or $40m all-in–still substantially less than the appraised figures for a “half-life” example.
Appraisals are an inexact exercise that not only depend on the maintenance condition of the airplanes, whether they are “desk-top” or inspection appraisals and the methodology of the various appraisal companies, backed by market intelligence data.
Posted on December 14, 2015 by Scott Hamilton
Dec. 8, 2015: Boeing Capital Corp. sees a robust financing market next year for an estimated $127bn in new airplane deliveries.
The forecast is for the global picture, and not just Boeing Commercial Airplanes (BCA) deliveries.
In its new Current Aircraft Finance Market Outlook 2016, BCC paints a picture of financing that is the most optimistic in years. In its annual Green/Yellow/Red assessment of various financing sources, there are no Reds for the first time since 2011, although there are two Yellows—the Export financing credit agencies and the aircraft and engine OEMs themselves, which don’t like to do direct financing. All other sources are Green (Figure 1).
Posted on December 8, 2015 by Scott Hamilton
Nov. 30, 2015, © Leeham Co.: One month to go to the end of 2015. What’s left to come?
Posted on November 30, 2015 by Scott Hamilton
By Bjorn Fehrm
Nov. 25 2015, ©. Leeham Co: Bombardier (BBD) has not had an easy year. The stock plunged from just over $4 at the beginning of the year to a low of just over $1 today on the continuing of a cash crisis and what to do with the CSeries program.
The stock market wasn’t reassured by the annual investors day yesterday in New York City, even though some analysts were more positive. Robert Spingarn of Credit Suisse wrote:
“In addition to offering some level of financial forecast and visibility for the next 5 years, the most important thing BBD’s new management did at today’s investor event in NYC was to clearly demonstrate a much welcomed sense of leadership, organizational structure and accountability.”
We tend to agree with him and it was a leadership that described a plausible roadmap to a future. Bombardier could before the event relegate the question of the company’s immediate survival to the past, thanks to La Caisse de dépôt et placement du Québec (CDPQ) taking a 30% stake in the BBD Train unit.
This will inject US$1.5bn to the company cash in addition to the $1bn that the Province of Quebec previously agreed to inject in the CSeries program. Both investments are scheduled to close in the first quarter. The conference could therefore be focused on a presentation on how to transform the company for 6% annual compound growth and acceptable profitability in all its business units until 2020. Read more
Posted on November 25, 2015 by Bjorn Fehrm
Nov. 24, 2015, (c) Leeham Co. With the $1bn investment by the Province of Quebec in the Bombardier CSeries program, another example of government funding emerges in commercial aviation development.
Setting aside whether the investment might be challenged before the World Trade Organization—and whether this makes good business sense for Quebec—the move makes a mockery of the entire concept of avoiding government support.
Posted on November 24, 2015 by Scott Hamilton
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Introduction
ATR and Bombardier are incumbents. China has a home-market offering.
Indonesia and India want to create a product.
It’s the 60-seat and up turbo-prop market.
It’s too many companies chasing too-small a market.
Summary
Posted on November 23, 2015 by Scott Hamilton
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Introduction
Nov. 17, 2015, © Leeham Co. The chief commercial officer of Embraer sees US mainline carriers adding
aircraft in the 100-plus seat sector that will open new opportunities for the largest E-Jets hitherto a limited interest in this region.
First among high profile possibilities: United Airlines, which was identified as a major prospect for Bombardier and its CS100. According to multiple news reports, UA is holding out an order for the CS100 as an inducement for some pilot contract revisions. According to Market Intelligence, the potential order is for an equal number of orders and options, well below 50 orders but one which would be a crucial win for struggling Bombardier.
But Embraer isn’t going to let this order go without a stiff fight. Through United Express partners, EMB has a large installed base of E-175s operating for United. This is viewed as a major advantage by EMB’s CCO, John Slattery.
Summary
Posted on November 17, 2015 by Scott Hamilton
Airlines, American Airlines, Bombardier, CSeries, E-Jet, Embraer, Premium, United Airlines, US Airways
737-7 A319, 737-700, Air Canada, Airbus, airlines, American Airlines, Boeing, Bombardier, CS100, CS300, CSeries, E-175, E-190, E-190 E2, E-195, E-195 E2, E175 E2, Embraer, JetBlue, John Slattery, United Airlines, United Express, US Airways, World Trade Organization, WTO
13 November 2015, ©. Leeham Co: Mitsubishi flew their MRJ for the first time this week. I could have added “finally” because it is two years late compared to the original time plan. But who cares when the aircraft is finally ready to fly and everything goes well? (Well, the customers do, actually.)
It was a big moment for Japan, a nation with a sizable aeronautical industry. Japan has been a major partner to Boeing in their larger airplane programs over the 757/767 to the 777 and 787. For the Dreamliner, they even designed and made the hottest item, the high-tech Carbon Fibre Reinforced Plastic (CFRP) wing.
Despite having such a capable aeronautical industry, Japan has not built an own civil aircraft since it closed the production line for the YS-11 twin engined turboprop in 1973. Since then it has acted as sub-supplier and has worked on certain military programs like the Mitsubishi F-2 fighter, based on the Lockheed Martin F16.The Mitsubishi corporation flew the MRJ90 for the first time Wednesday from the Nagoya Airport in Japan (screenshot from video from Mitsubishi). Most of the flight testing will be done in Moses Lake (WA), USA, where four test airplanes will be based.
Moses Lake is blessed with open skies, little air traffic, a long runway and good weather. It has a long history of flight testing, serving as a test-base for Japan Air Lines 747 pilot training for decades. Boeing also uses Moses Lake for flight testing.
We analyzed the MRJ90 and its main competitor the Embraer E175 in a subscriber article the 25th of January. We will revisit the main characteristics and then comment on what could be seen from the first flight. Read more
Posted on November 13, 2015 by Bjorn Fehrm
Bjorn's Corner, Bombardier, CSeries, E-Jet, Embraer, Mitsubishi, Pratt & Whitney
737, 757, 767, 777, 787, A320, Bombardier, Embraer, Mitsubishi, MRJ-90
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Introduction
With the first Embraer E-Jet E2 under assembly, we take a look at the E1 and E2 programs in the run-up to roll-out of the E-190 E2 next year and projected Entry Into Service (EIS) in 2018.
Summary
Posted on November 9, 2015 by Scott Hamilton