Assessing the MC-21 future

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Introduction

Feb. 9, 2017, © Leeham Co.: Russia’s Irkut designed a mainline jet to compete with the Airbus A320 and Boeing 737 families that, from a passenger experience

Irkut MC-21 at roll-out. Photo via Google images.

viewpoint, is the best in class.

The MC-21 has a wider fuselage than the A320 (which is wider than the 737). Seats and the aisle are the widest in the class. The overhead bin space is plentiful.

But the airplane is hampered by its environment: Russia itself.

Summary
  • EIS planned for next year, but first flight hasn’t happened yet.
  • Few orders, small customer base.
  • Russia itself presents an overhang to the MC-21 program.
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Aircraft list prices largely unchanged (Updated)

Update: Airbus Jan. 11 announced a 1% list price increase. The chart has been updated.

Jan. 10, 2017: Aircraft list prices are largely unchanged for 2017, the airline industry demand cools for new aircraft.

Sales in 2017 were down for the Big Two, Airbus and Boeing. Boeing announced orders for 688 aircraft, well off of last year, which also was a major decline from the year before.

Airbus announces tomorrow, with sales expected to be in a similar range.

Bombardier and Embraer announce later this month or next.

LNC compiled the current list prices from all the manufacturers, detailed in Figure 1 below.

Airbus and Boeing discounts typically range from 40% to 60%, depending on the customer, the airplane and the size of the order. BBD and EMB discounts may also be steep, depending on the campaign.

The balance of this article is for Subscribers only.

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Bjorn’s Corner: Turbofan developments in 2017

By Bjorn Fehrm

January 06, 2017, ©. Leeham Co: Before we finish of our series on airliner turbofan technology, let’s spend this Corner on what will happen on the airliner engine front during 2017.

While there is no totally new engine that comes into the market during 2017 there are a number of new variants of existing engine families that will be introduced.

Figure 1. GasTurb principal representation of a three shaft turbofan like our reference Rolls-Royce Trent XWB. Source: GasTurb.

 

If we start with the engines for regional/single aisle aircraft and then climb the thrust scale, we will cover the engines in climbing thrust class.

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2017: the year ahead

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Introduction

Jan. 3, 2017, © Leeham Co.: The New Year is here and it doesn’t look like a good one for commercial aerospace, if measured against previous outstanding years.

There are some troubling signs ahead, piling on to a slowdown in orders from last year that didn’t even reach a 1:1 book:bill.

This year looks to be worse than last. Airbus and Boeing will give their 2017 guidance on the earnings calls this month and next. Bombardier and Embraer earnings calls are a ways off, when each will provide its guidance.

But LNC believes the Big Two in particular will be hard pressed to hit a 1:1 book:bill this year and may even struggle to match 2016 sales.

Boeing’s year-end order tally comes Thursday. Airbus’ comes on Jan. 11.

Summary
  • Wide-body sales remain weak.
  • Narrow-body backlogs and low oil prices continue to inhibit sales.
  • China, Middle East concerns emerging.
  • United Aircraft MC-21 and COMAC C919 begin flight testing.
  • Airbus A330neo, Boeing 787-10, Embraer E195-E2 and Mitsubishi Aircraft MRJ-70 roll-out and begin flight testing.
  • Airbus A321neo and Boeing 737 MAX 8 EIS.

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US, EU ignore Chinese, Russian subsidies

Nov. 15, 2016, © Leeham Co.: Government subsidies to commercial aircraft companies appear to be increasing despite the 12-year disputes before the World Trade Organization between Europe and the US over Airbus and Boeing aid.

Yet the US and Europeans appear to be doing little to try and curb the subsidies to new competitors.

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Clouds overhang Bombardier ahead of earnings call

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Introduction

Nov. 9, 2016, © Leeham Co.: Bombardier reports its 3Q2016 and nine month earnings Thursday and as the year prepares to enter its last 45 days, disappointment hangs over the company and the stock.

Summary
  • Despite winning firm orders for the CSeries from Air Canada and Delta Air Lines early in the year, no other new orders have been announced.
  • Deliveries of the CSeries will only be about half those projected, due to engine delivery delays from Pratt & Whitney.
  • The $1bn investment from the federal Canadian government hasn’t been achieved, but an announcement may come as early as next week that an agreement has been reached.
  • Boeing revised the design of the 737-7 to sit “right on top of” the CS300.
  • Embraer (Brazil) is taking the government bailout of CSeries to the World Trade Organization (WTO) in inquiries, with the USA lending support.

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Less desirable aircraft for lessors

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Introduction

Part 3: Oct. 24, 2016, © Leeham Co.: Lessors select aircraft to add to their portfolios based on several basic criteria:

  • Is it a good airplane?
  • How are the economics?
  • Is there, or will there be, a broad customer base?
  • How “liquid” is the airplane?
  • How broad is the customer base?
  • Reconfiguration costs.
  • Commercial terms of the acquisition.

Lessors often conclude that while an airplane may be good technically and perfectly acceptable for airline use, failure to meet their specialized key criteria—notably liquidity and customer base—they may pass on the aircraft.

Summary

  • A surprising number of in-production jets and those in development don’t make a lessor’s list of desirable leasing assets.
  • The planes all are technically good aircraft.
  • Markets may evolve for some of the aircraft on the list.

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Seventeen new, derivative aircraft to see EIS through 2020

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Introduction

Delivery of the first Bombardier CS300, to AirBaltic, next week kicks off entry-into-service for 17 airplanes through 2020. Bombardier photo.

Delivery of the first Bombardier CS300, to AirBaltic, next week kicks off entry-into-service for 17 airplanes through 2020. Bombardier photo.

Oct. 20, 2016, © Leeham Co.: The past decade was a hive of activity as the Big Four OEMs launched new airplane programs and put the aircraft into service.

Airbus launched the A320neo, A330neo and A350 families. The A330neo is under production; the other two entered service early this year.

Boeing launched the 787 in late 2003 (outside the decade mark), rolled it out in 2007 and entered service with it in 2013. The 737 MAX was launched in 2011 and is in flight testing. The 777X was launched in 2013; components are in production.

Bombardier launched the CSeries in 2008; it entered service this year, after three years of delays.

Embraer launched the E-Jet E2 om 2013. Flight testing began this year.

New Entrants

These were supplemented by new entrants into commercial aviation: COMAC with its C919; Irkut with the MC-21; and Mitsubishi with the MRJ90. Of these, only the MRJ90 is flying. After more than two years of delays and several false starts, flight testing began in earnest this week at Moses Lake (WA) with FTA-1 (Flight Test Aircraft 1).

Development and new program launches have slowed, but the next decade is hardly going to be idle.

Summary

  • Seventeen new aircraft or derivatives are scheduled to enter service through 2020.
  • Five potential derivatives might see EIS through the same period.
  • Three to five new or potential derivative aircraft might see EIS 2021-2025.

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Russian-Chinese wide-body: Program responsibilities

By Bjorn Fehrm

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Introduction

September 29, 2016, ©. Leeham Co: We will now finish our series about the Russian-Chinese wide-body with looking at who will have what role in the program.

Russian-Chinese widebody

Figure 1. Concept for new wide-body airliner. Source: United Aircraft.

As we described in the initial article, “Background and outlook,” Russia and China have vastly different competencies when it comes to making a state of the art wide-body aircraft.

Russia has made airliners since the 1930s, including wide-body jets. China did not design its own jet aircraft (military or civil) until the mid-1980s. Most of the aircraft produced still today in China have their origin in Russian designs.

At the same time, we saw in the article about the market demand for the aircraft that the Chinese market is 90% of the home market. This makes for China demanding important parts of the aircraft’s production, and China has the money to invest in production facilities.

All this will influence how different parts of the project will be shared between Russia’s United Aircraft Corporation (UAC) and Commercial Aircraft Corporation of China (COMAC).

Summary:

  • Russia and China enter the wide-body project with widely different knowledge bases.
  • Russia has long time knowledge on how to develop and produce aircraft and their engines.
  • China on the other hand has the market for the aircraft.
  • China also know a lot about serial production and have money to invest. Read more

Pontifications: Hypocrisy and illegal subsidies at the WTO

Hamilton ATR

By Scott Hamilton

Sept. 26, 2016, © Leeham Co.: There are two airplanes under development that are in the 150-220 passenger space.

Both are under development by companies that get state aid and make no bones about it. The aid would likely be found in violation of World Trade Organization (WTO) rules.

But the most vociferous opponent to illegal subsidies hasn’t said a peep about it.

Neither has the opponent’s rival—although this company publicly recognizes the irony of it all.

I call it hypocrisy.

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