The A380 investors day jinx

 

  • July 15, 2016, © Leeham Co., Farnborough Air Show: At an event like this, we pick up all sorts of snippets that don’t fit into any given story. So here’s a compilation of our Odds and Ends to wrap up our dedicated coverage of the 2016 Farnborough Air Show.

A380 and investors meeting: The Airbus A380 has been a sensitive topic for investors. Historically stock prices took a major hit when negative news about the A380 emerged. During an investors day in December 2014, one of the executives slipped that the program could be terminated. The stock took an immediate dive and other executives had to clean up the first one’s comments.

Airbus also holds an investors day during the Paris and Farnborough air shows. The latter’s was scheduled on Wednesday. The night before, the French newspaper La Tribune broke news that the production rate of the A380 will be reduced from 20/yr in 2017 to just 12/yr in 2018. Airbus scrambled to catch up to the story Tuesday night in advance of the Wednesday investors day.

The production breaks even at 20 but not at 12. Yet the stock opened down slightly and remained flat during the rest of the day before closing up slightly.

The jinx may be over, but perhaps Airbus either has to fix the A380 program or cancel its investors days.

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Bjorn’s corner: Farnborough week

By Bjorn Fehrm

By Bjorn Fehrm

July 15, 2016, ©. Leeham Co, Farnborough Air Show: We have been at Farnborough Air Show this week, the highlight of the year for an aircraft geek like me. This year there were several interesting aircraft that visited the show for the first time.

Embraer brought over the brand new first prototype of the E-jet 190-E2 and the prototype of their military transporter, the KC-390. Bombardier had their first customer/production CS100 from Swiss to visit the show in addition to their Flight Test Vehicle (FTV) no 5. And Lockheed Martin had the F35B, the vertical landing version, come and hover over the airfield the days that were reasonably rain free in the afternoon.

One thing is clear with the new generation of Single Aisle aircraft: their high bypass engines dominate the visual appearance. Figure 1 shows the 73 inch version of the Pratt & Whitney GTF on the E190-E2 prototype. Huge diameter engine on a not so huge diameter aircraft.

IMG_2020

Figure 1. The prototype E190-E2 with its Pratt & Whitney GTF engine on the Farnborough apron. LNC photo.

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Antonov betting on Western technology

By Bjorn Fehrm

July 14, 2016, ©. Leeham Co, Farnborough Air Show: The company Antonov is world renowned for its rugged transport aircraft. The recent An-124 Ruslan and An-225 Mriya super-heavy transporters are the world’s largest transport aircraft. Both fly daily for the Antonov companies own airline, transporting outsize cargo for companies like Boeing, Airbus, GE, Rolls-Royce and others.

LAJES FIELD, AZORES -- Portuguese and American workers tend to the Antonov An-225 Mriya, or "Dream," April 28 on the flightline at Lajes Field. The "Cossack," as it is known by NATO, landed here to refuel and get service. Currently the world's largest aircraft, the An-225 was designed mainly to transport the Russian space shuttle "Buran" and its components from a service area to a launch site, to Jane's Aircraft Recognition Guide, second edition . It is the only aircraft of its type known to be in existence, according to Jane's. (Photo by Tech. Sgt. Jason Tudor)

The worlds largest aircraft, the heavy air-lifter An-225 Mriya. Source: Antonov.

The air freighter company is what keeps Antonov afloat, for it has been hit hard by the fall of the Soviet Union and Ukraine’s decision to split with the Russian Federation and orient itself to the West.  Read more

Airbus cuts A380 production to 1/mo (Update)

July 12, 2016, © Leeham Co., Farnborough Air Show: Airbus will lower the production rate of the giant A380 from 18/yr to 12/yr, effective in 2018, the company confirmed after the French newspaper La Tribune first reported the news Tuesday evening Paris Time.

In January, LNC in its annual production rate forecast projected the A380 rate coming down to 12/yr by 2020. More recently Leeham Co. LLC told clients Airbus needed to figure out how to achieve a break-even at one a month (12/yr) and bring rates down sooner.

Leeham News made this production forecast in January, predicting the A380 production rate would have to come down to 1/mo by 2020 The competing 747-8 rate was forecast to come down to 6/yr by 2018. Both rates are coming down two years earlier than forecast.

All this was based on the current backlog and customer quality.

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Pontifications: New war of words erupts

Hamilton ATR

By Scott Hamilton

July 11, 2016, © Leeham Co., Farnborough Air Show: The war of words between Airbus and Boeing is legendary, and it continued unabated today, the first day of the Farnborough Air Show.

  • See my column in Forbes for a rundown of the first day’s orders at the Farnborough Air Show.

Boeing continue its refrain during its press briefing that its airplanes are better than Airbus. Airbus returned fire moments later in its own press conference that followed Boeing’s.

But the more interesting war that is emerging is between Embraer and Bombardier.

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Bombardier sees more C Series orders this year

Our coverage of the Farnborough Air Show begins today with an interview with Fred Comer, president of Bombardier Commercial Aircraft. There will be paywall and freewall posts throughout the FIA16 this week.

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Introduction

July 10, 2016, © Leeham Co., Farnborough Air Show: Winning major orders from Air

Fred Comer, president of Bombardier Commercial Aircraft.

Canada and Delta Air Lines earlier this year and the entry into service of the CS100 this Friday with launch customer Swiss International Air should give Bombardier’s bet-the-company gamble a boost for more orders this year.

This is the prediction by Fred Comer, president of Bombardier Commercial Aircraft.

During an interview with LNC on a media demo flight of the CS100 at the Farnborough Air Show, Comer said the smaller BBD can compete with the behemoths Airbus and Boeing for orders in the 125-150 seat sector.

Summary

Comer says:

  • Boeing’s prospective 737-7.5 still won’t be competitive.
  • The CS100 is better than the Embraer EJet-E2.
  • Embraer’s complaints of unfair competition because of Canadian government investment are unfounded.
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Bombardier’s CS100 media flight demonstrates quiet

July 10, 2016, (c) Leeham Co.: Our coverage of the Farnborough Air Show (#FIA16 on Twitter) begins today, with a media flight on the Bombardier CS100. The day was rainy and somewhat turbulent until the flight got above the clouds. Some videos are jumpy as a result.

There are several videos about the flight and some with interviews following the page break.

Quiet taxi

The first video is intended to demonstrate the quiet Pratt & Whitney engines during taxi.

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Boeing MAX program progresses well

Our coverage of the Farnborough Air Show begins today with an interview with Keith Leverkuhn, VP and GM of the Boeing 737 program. There will be a combination of paywall and freewall posts.

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Introduction

July 10, 2016, © Leeham Co.: Farnborough Air Show: The Boeing 737 MAX flight test

Keith Leverkuhn, VP and GM of the Boeing 737 program. AIN Online photo via Google Images.

program is going well, with the company looking for ways to add improvements to the airplane even before it enters service next year.

Improvements, which include airplane and engine components, are intended to provide dispatch reliability close to the 99.98% of the 737 NG and extend on-wing time for the reliable CFM56 engine that has powered the 737 since introduction of the 737-300 in 1984, says Keith Leverkuhn, VP and GM of the 737 program.

Summary
  • Many of the major tests are completed.
  • Boeing, CFM see opportunities to insert components into the LEAP-1B during flight testing to extend on-wing time from entry-into-service.
  • MAX 7X (or “7.5”) can be done within the “confines” of the current MAX program.
  • A larger MAX isn’t ready to go yet.

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IATA, Lufthansa cargo reports are discouraging

July 6, 2016, © Leeham Co.: Going into the Farnborough Air Show (#FIA16 on Twitter) next week, ominous signs continue to emerge about the health of the air cargo

Photo via Google images.

industry.

The International Air Transport Assn. (IATA) Wednesday said yields and traffic remain under pressure. Freight tonne kilometers fell 0.9% year-over-year, IATA reported.

“Yields remained pressured as freight capacity measured in available freight tonne kilometers (AFTKs) increased by 4.9% year-on-year,” IATA said. “reight demand decreased or flat lined in May across all regions with the exception of Europe and the Middle East. These regions recorded growth in air cargo volumes of 4.5% and 3.2%, respectively, in May, compared to the same period last year.”

Lufthansa Cargo saw yields in a “landside” drop, according to a Bloomberg report.

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Farnborough Preview #3: Analysts weigh in

July 6, 2017: The industrial portion of the Farnborough Air Show (#FIA16 on Twitter) officially begins Monday and runs through Thursday. There are also some special events Sunday. LNC will be reporting from the Show throughout the week.

Below are a few final previews from aerospace analysts, followed by other analyst reports for the last week. There will be no Weekly Analyst Synopsis next week because of the Show.

Highlights below:

  • Expectations for orders modest-to-slow. (Credit Suisse, JP Morgan).
  • Southwest MAX deferral (Credit Suisse).
  • Airlines face softer environment. (JP Morgan.)
  • MOM Aircraft and 777X. (Buckingham Research.)
  • Spirit Aerosystems looks to A350 charge.

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