March 27, 2017, (c) Leeham Co.: It wasn’t the kind of presentation usually given at the ISTAT general meeting earlier this month. Peter Warlick, vice president of finance for American Airlines, announced to nearly 2,000 people that he has ALS (Amyotrophic Lateral Sclerosis), more commonly known as Lou Gehrig’s disease.
ALS attacks the muscular system and is typically fatal within two-five years. There is no cure.
Warlick actually revealed his condition last year, but I missed the announcement in which American also pledged a $1m donation to ALS research.
Although Pete is only a casual business acquaintance, for me, Warlick’s ISTAT announcement hit home. In 2015, a very close friend and
colleague died of ALS several years after diagnosis. Stan Bump was a neighbor and I served with Stan on the planning commission in the Seattle suburb in which we lived.
March 16, 2017, © Leeham Co.: China’s evolving commercial aerospace and aviation industry has high-profile companies such as AVIC and COMAC, and its expanding supplier based, combined with joint ventures with Western companies is well known.
Less well known is the growth in the aircraft leasing business. Increasingly, Chinese lessors are showing up on the order lists of the Big Four aircraft manufacturers. Still, there remains a bit of a mystery about the lessors and dynamics within China.
LNC spoke with the newly appointed CEO of CDB Leasing during the ISTAT conference last week in San Diego.
Peter Chang has been in the Western leasing business for decades, employed in key positions with Aviation Capital Group, ILFC and Aircastle—usually with responsibility for China.
He was named CEO of CDB in December, a move that was announced during the January Dublin conferences of Airlines Economics and Airfinance Journal. More key personnel announcements were made during ISTAT.
In an exclusive interview, LNC asked Chang about the origins of CDB, other Chinese lessors, the current policy of restricting flow of Chinese cash outside the country, the Boeing 737-10 and the Bombardier CSeries.
Here is this interview.
March 14, 2017, © Leeham Co.: A new partnership, still in the Memorandum of Cooperation stage, between France and Japan aims to expand a relationship that could lead to joint development of advanced aircraft for Airbus.
The MOC was signed between the Ministry of Economy, Trade, and Industry of Japan (METI) and the Directorate General for Civil Aviation of the Ministry of Ecology, Sustainable Development and Energy (MEDDE) of the French Republic.
“An Airbus-Japan Ad Hoc Civil Aeronautical Industry Working Group will be established, and it will meet on a regular basis to discuss technology fields that could be considered for cooperation between Airbus and Japan such as material, aircraft system and equipment, or manufacturing technologies for the development of future Airbus aircraft,” Airbus said in a March 1 press statement announcing the MOC.
Airbus sales historically trailed Boeing badly in Japan, although the current backlog leans slightly in the European OEM’s favor: 87 to 74.
March 9, 2017, © Leeham Co.: Proceeding with a New Mid-range Airplane (NMA) is “an important step for Boeing,” says the CEO of one of the world’s preeminent leasing companies. On the other hand, Airbus probably is covered in the Middle of the Market sector.
John Plueger, CEO of Air Lease Corp, agrees with Airbus claims that it has the MOM sector covered.
“From Airbus’ perspective, I think that’s true,” he said in an interview with LNC during the ISTAT annual general meeting in San Diego this week. “I don’t think they feel they have a gap. They’re quite happy with the A321neo. The success of that airplane speaks for itself. They’ve got the A330neo. It would be very easy for them to just do a lighter weight version of the A330neo and whack $7m to $10m off the price of that airplane to compete.
“The question is whether operators will need the range of the neo in that equation,” he said.
“I also think…they are looking at modifying the wing for the A321 possibly even a new wing, which could increase the performance capability of that airplane significantly. For the Airbus product line, I would agree, I don’t think there is a need.”
March 8, 2017, © Leeham Co.: Bombardier CRJ-200s, rapidly being phased out of passenger service and consigned to the scrap yard, proved to be an unexpected success for freighter conversion company (Aeronautical Engineering Inc (AEI).
Converting the CRJ-200 from passenger to freighter as intended to be a bridge between the Boeing 737-400 and 737-800 P2F programs, Robert Convey, SVP Sales and Marketing, told LNC at the annual meeting of ISTAT in San Diego.
Rather than being a program for a handful of conversions, within three years, Convey landed 54 orders and counting.
March 7, 2017, © Leeham Co.: If Boeing builds the 737-10, which appears increasingly likely, will customers come?
This is always the multi-billion-dollar question for any aircraft and engine manufacturer.
For Boeing, launching the 737-10 is a low-risk, and in the eyes of many, futile effort to stem the bleeding of market share between the MAX 9 and its rival, the Airbus A321neo.
Depending on who’s counting and how the numbers are calculated, the A321 sales outpace the MAX 9 by a factor of four or five to one. LNC calculated last year that the ratio is more likely 3:1, identical to the market share split between the predecessor airplanes, the 737-900ER and the A321ceo.
March 7, 2017, © Leeham Co.: Representatives of the four major commercial engine
manufacturers have divergent views of the next round of engine development, either for the Middle of the Market/New Mid-range Airplane (NMA) or New Small Airplanes (NSA) coming in the next decade.
Officials of CFM, GE, Pratt & Whitney and Rolls-Royce appeared at the annual ISTAT conference in San Diego yesterday.
PW’s Rick Deurloo, SVP of Sales, Marketing Commercial Engines, had the added task of dealing with the highly-publicized teething issues surrounding its new Geared Turbo Fan engine on the Airbus A320neo.
March 6, 2017, © Leeham Co.: Boeing effectively did a soft launch today of the 737-10 MAX at the ISTAT Americas conference in San Diego.
Randy Tinseth, VP-Marketing, revealed basic specifications for the MAX 10, the first time Boeing has done so in a public forum.
By Bjorn Fehrm
October 16, 2016, ©. Leeham Co: “Scope clauses stop aircraft development.”
The words are those of Rodrigo de Souza, Marketing manager of Embraer Commercial Aircraft when we spoke at the sidelines of the recent ISTAT conference in Barcelona.
De Souza made the comment when we discussed how the new E-Jet E175-E2 would fit with US scope clauses. It doesn’t.
The problem is the limit on Maximum Take-Off Weight (MTOW).
“I can understand the other restrictions of a scope clause but not the Max Take-Off Weight restriction,” de Souza said. “It doesn’t make any sense; it just stops new and more efficient aircraft getting into the market. What relevance does it have in protecting mainline pilots from the regional operators taking over routes?”
By Bjorn Fehrm
October 13, 2016, ©. Leeham Co: The airline engine industry is like a ticking bomb. Over the years, a business practice of selling the engines under manufacturing cost and planning to recover costs and make a profit on the aftermarket developed. This goes back decades.
The practice was fostered by fierce competition over the engine contracts for aircraft which offered alternative engines. The losses of the engine sales could be made up later by selling spare parts and services at high margins.
These “jam tomorrow” practices have several implications. The engine industry is now confronted with these and wonder how it could put itself in such a bind. How to handle these and what is the way back?