Leeham News and Analysis
There's more to real news than a news release.
Welcome news for Bombardier, Mitsubishi
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Introduction
Feb. 22, 2016, © Leeham Co.: The large order (Letter of Intent) last week by Air Canada for 45 firm and 30 option CS300s was welcome news for Bombardier.
And the LOI from the US lessor, Aerolease, for 10+10 MRJ90s was welcome news for Mitsubishi.
We take a look at both announcements and what this means for the two programs.
Summary
- The Air Canada order breaks the long drought in C Series orders, but it’s not enough for smooth sailing (to mix metaphors) for the aerospace company.
- Continuing the mixed metaphor, Bombardier still has a long hill to climb.
- MRJ order, by little known lessor, helps diversify customer base.
Air Canada orders up to 75 C Series; announced with BBD 2015 financial results
Feb. 17, 2016: The long drought is over.
Air Canada has ordered up to 75 Bombardier C Series.The press conference is at 11am EST today. These will replace 25 Embraer E-190s. BBD now has orders and commitments for 678 C Series.
The announcement comes with the company’s fourth quarter and year-end financial results and a 90-seat version of its Q400 turboprop.
The Air Canada deal is a Letter of Intent for 45 CS300s and options for 30 more, including conversion rights to CS100s. Deliveries are from 2019.
- BBD to cut 7,000 jobs: Bloomberg News. The cut includes 2,000 contractors.
The earnings call webcast summary is below the jump.
Bombardier earnings preview
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Introduction
Feb. 16, 2016, © Leeham Co.: Bombardier’s fourth quarter and full year 2015 financial results will be reported
Wednesday, and we don’t expect the situation to be pretty.
Yes, officials will highlight the recent closing of the sale of 30% of the Transportation (Rail) subsidiary.
Yes, the C Series is now on a world tour and appearing at the Singapore Air Show this week.
Yes, the CS100 will enter service in the second quarter.
Yes, the CS300 should be certified, delivered and enter service before the end of this year.
But missing will be any concrete information about new orders.
Summary
- Still no C Series orders since September 2014.
- Bombardier has its hand out for more government aid.
- ATR is making a new push in China and North America, the latter a stronghold for the Q400.
PNAA Day 2: Cautionary note raised
- Feb. 10, 2016: Today is the second of three days of conference meetings organized by
the Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.
Feb. 10, 2016: Large commercial aircraft deliveries hit just under $104bn in 2015, a 4.9% gain over 2014. Regional aircraft values, however, were just $7.1bn, a decline of 10.5% year-over-year, said Richard Aboulafia, a consultant with the Teal Group.
Deliveries of all aircraft types, including military, rotocraft, etc., saw only a 0.6% increase YOY. Jetliners account for 60% of the total values.
PNAA Conference Day 1: Aerospace Clusters
- Feb. 9, 2016: Today is the first of three days of conference meetings organized by the Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.
Aerospace clusters are evolving throughout the world, said Kevin Michael, vice president of ICF International.
California is on the decline. Two new clusters on the rise are Mexico and the Southeastern US. The Netherlands and Singapore are successful, long-term clusters.
California was the premier aerospace cluster for decades, but its demise began when Lockheed chose Georgia as the location to build the C-130. The founding of Airbus was not good news for SoCal, and neither was the end of the Cold War. The acquisition of McDonnell Douglas by Boeing in 1997 further precipitated the decline of SoCal.
Pontifications: Bad week for aerospace stocks
Feb. 1, 2016, © Leeham Co. Ouch.
By Scott Hamilton
Boeing stock tanked about 10% last Wednesday when the company surprised analysts with unexpected news and below expectations 2016 guidance.
Bombardier became a penny stock.
What the heck happened?
Bjorn’s Corner: Exciting 2016
By Bjorn Fehrm
29 January 2016, ©. Leeham Co: In the corner of two weeks ago we did a retrospective of 2015. Time for looking ahead. The year of 2016 will be quite interesting. We had entry into service of the first re-engine single aisle aircraft this week, the Airbus A320neo, the same week as we expect first flight from its main competitor, Boeing’s 737 MAX 8. We will also see first flight of the Embraer E190E2 and A350-1000 before the year is over.
The Mitsubishi MRJ shall go test flying in earnest and Bombardier’s CSeries 100 and 300 shall enter service. On top of that, the COMAC 919 will probably start ground roll tests this year and we should see roll out of Irkut’s MC-21. I would say 2016 is a busy year for civil aviation.
In the 2015 corner we talked a lot about engine technology as a key driver to further efficiency of air transportation. Now will dissect the airframe technology that all these new projects will bring us. Read more
Pontifications: Shifting focus to Embraer
By Scott Hamilton
Jan. 25, 2016, © Leeham Co. Embraer announced last week it had cut metal on its first E195 E2, more than a month before the roll-out of the first E190 E2, scheduled for Feb. 25, at is Sao Jose, Brazil, plant.
The aggressive manufacturer of small(er) passenger jets is moving forward full speed toward its next generation of aircraft even as Airbus, Mitsubishi, COMAC and Irkut encounter one delay after another.
Analysis: Sukhoi’s regional jet SSJ100, Part 2
By Bjorn Fehrm
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Introduction
21 January 2016, ©. Leeham Co: The first part of our analysis, published Monday, looked at Russia’s first effort to design and aircraft to penetrate the Western airplane market, Sukhoi Superjet (SSJ100). We concluded that the SSJ100 regional airliner was a good effort.
The aircraft was essentially a Russian airframe with Franco-Russian engines, Western systems and Western avionics. For aircraft that are delivered to Western airlines, it also has an Italian-designed/produced interior.
The aircraft has been in successful deployment with Interjet of Mexico and has now been ordered by CityJet of Dublin. After having looked at base characteristics of the aircraft/engine and also analysed the fuel consumption, we now continue with developing the Cash and Direct Operating Costs of the SSJ100. We compare it with the market leader in the 100 seats regional market, Embraer’s E190.
Summary:
- The SSJ100 is competitive on fuel costs compared to the E190.
- Maintenance costs for SSJ100 is still hard to predict as there is still too limited operational experience.
- Capital costs are lower for the SSJ100. This means that Direct Operating Costs, DOC, are attractive for the SSJ100.
Analysis: Sukhoi’s regional jet Superjet 100
By Bjorn Fehrm
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Introduction
18 January 2016, © Leeham Co: Russian aircraft have never succeeded in penetrating the Western market. But then they never really tried, until now. They were designed for the Soviet Union captive market, including the partner states that historically participated in or were friendly to the communistic system. One comes to think of China, Egypt, Libya, Cuba and Nicaragua.
The Sukhoi Civil Aircraft Company (SCAC) Superjet 100 (SSJ100) is the first Russian aircraft specifically designed from the outset to compete on a world market.
We analyse its basic design and performance in comparison to the market leader in 100 seat regional flying, Embraer’s E190.
Summary:
- The SSJ100 is a half a generation younger design than the Embraer E190. It has modern aerodynamics, IMA-based modular avionics and an advanced Fly-By-Wire system.
- The feedback-based Fly-By-Wire enables a tight aircraft design with low wetted areas.
- The SSJ100 engines, SaM146, can best be described as a shrinked and cleaned up CFM56. They have the efficiency level of the E190’s CF34-10E.
- The aerodynamics and engines combine to give the SSJ100 a single digit edge in fuel burn over the E190.