Spies and industrial spying

By Scott Hamilton

Scott Hamilton

March 27, 2018, © Leeham News, Bainbridge Island (WA): The unexpected US order to close the Russian Consulate in Seattle this week set off a media frenzy in this city because two reasons cited were the proximity of the consulate to Boeing and two US naval bases, Bremerton and Bangor.

There is a third, smaller one, in Everett, but this wasn’t mentioned.

Bremerton is a major repair-and-overhaul base for ships, ranging from aircraft carriers to submarines to frigates and support ships.

Bangor is home to Trident nuclear missile subs and the spy sub, USS Jimmy Carter.

I live on Bainbridge Island, a stone’s throw to Bangor (ground zero in a North Korean nuclear missile attack?) and a 45-minute drive to Bremerton. It’s 45 minutes from here to Boeing Field via ferry and car.

Boeing, of course, is the principal home to Boeing Commercial Airplanes. The commercially-based P8 Poseidon and the KC-46A tankers are built here.

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NMA focus needs to be on engines

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Introduction

March 19, 2018, © Leeham Co.: As the market awaits a decision by Boeing whether to launch the New Midrange Aircraft (NMA, or 797), focus has been on the aircraft’s definition and market demand.

It should be on the engines.

It doesn’t matter whether Boeing designs a fabulous airplane that’s the next best thing to sliced bread. What matters is whether the engines will be ready in time for Boeing’s suggested entry-into-service and if they are, whether they will be reliable out of the box.

The recent track record isn’t all that encouraging. Neither is Boeing’s preferred timing.

Summary
  • CFM, GE, Pratt & Whitney and Rolls-Royce each had problems with their new engines. All continue.
  • The Boeing NMA requires brand new engines, not derivatives.
  • Engine development and certification within the Boeing preferred timeline is sporty at best.

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Embraer ponders new, smaller jet

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Introduction

March 5, 2018, © Leeham Co.: News emerged last week that Embraer is considering a new jet family smaller than its current E2 line.

This would replace the E170, which Embraer decided not to upgrade to the E2. The E170 hasn’t sold wellin recent years, as the E175 became the preferred airplane in Embraer’s sub-90 seat market.

Embraer recognizes it needs a second family of airplanes to complement the E2. It’s been considering reentering the turboprop market, but demand is limited.

Restarting a sub-76-seat jet is not without risk, however.

Summary
  • Turboprop market is small over 20 years.
  • 60-99 seat market is a bit larger, but with competitors.
  • Business cases for each are challenging.

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Next Sukhoi Superjet is a 75 seater

By Bjorn Fehrm

February 7, 2018, ©. Leeham Co: The President of Sukhoi Civil AirCraft (SCAC), Alexander Rubtsov (who is also the Sales and Marketing Manager of the civil aircraft division of Russia’s United Aircraft, UAC), told Flight Global at the Singapore Air Show there has been a decision to develop a 75-seat version of Sukhoi SuperJet (SSJ).

Sukhoi and United Aircraft have studied whether to develop a larger or smaller version of the SSJ. A Russian order for 100 of the smaller model tipped the decision to the 75-seat model.

Figure 1. SSJ100/95 from Cityjet wetleased to Brussels Airlines. Source: SCAC.

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Pontifications: 2018 is a year of Transformations

By Scott Hamilton

Jan. 8, 2018, © Leeham Co.: This is going to be a year of transformations.

This might be viewed with puzzlement by some. After all, only minor-modification models will be entering service this year: the Airbus A350-1000, the Boeing 737-9, the Airbus A319neo and the Boeing 787-10. The first flight of the 737-7 should occur.

Flight testing continues for the Mitsubishi MRJ90, the COMAC C919 and Irkut MC-21.

The proposed deal between Airbus and Bombardier should receive government approvals this year. Talks between Boeing and Embraer may or may not result in a combination of some kind.

The Big Deal, however, resides in Everett (WA).

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Mitsubishi Aircraft Corporation’s tough 2017

By Bjorn Fehrm

January 02, 2018, ©. Leeham Co: The past year was difficult for Mitsubishi Aircraft Corporation (MAC) and its MRJ regional airliner. Although clear progress was made in the flight-testing of the MRJ, problems were found with the aircraft’s avionics and cabling redundancy.

The result is an avionics and cabling systems redesign which pushes out first delivery from 2018 to 2020. It’s the fifth and the longest delay of the program.

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Bombardier upbeat on CSeries deal, but Moody’s sees higher risk of debt default

Oct. 26, 2017, © Leeham Co.: Bombardier and Airbus put a positive face on the former’s acquisition of 50.01% of the CSeries program, but Moody’s credit rating service wasn’t impressed.

The agency downgraded Bombardier’s already poor credit rating and changed the outlook to Negative from Stable.

Moody’s changed the “Corporate Family rating (CFR) at B3 from B2, its probability of default rating to B3-PD from B2-PD, and its senior unsecured rating to Caa1 from B3. The company’s speculative grade liquidity rating is affirmed at SGL-2. Bombardier’s rating outlook has been changed to negative from stable,” it announced Tuesday.

“The downgrade reflects our expectation that Bombardier’s leverage will remain high through 2019 and its ability to generate positive cash flow in that year has headwinds related to the potential delay of C Series plane deliveries,” said Jamie Koutsoukis, Moody’s analyst.

The press release may be found here.

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Bombardier admits shortfall on Q400, CRJ, vows comeback

Sept. 13, 2017, © Leeham Co.: Bombardier wasn’t “fully at the top of its game for focus and messaging on the Q400 and CRJ,” a top official admitted Tuesday. But the company is “turning that around” and initial results were seen at last summer’s Paris Air Show with a spurt of orders for the turboprop airliner.

Colin Bole, SVP Commercial made the remarks at BBD’s media day at its Mirabel CSeries/CRJ production site.

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Pontifications: JADC 20-year forecast: VLA, NMA and other data

By Scott Hamilton

July 24, 2017, © Leeham Co.: The Japan Aircraft Development Corp (JADC) just published its 2017-2037 jet and turboprop forecast. JADC forecasts a demand for 33,336 jet airliners and some 2,000 turboprops.

JADC is partly owned by Mitsubishi, which is developing the MRJ70/90 and which is on several Boeing programs.

I like the JADC forecast because it segments the seating categories in more detail than Airbus and Boeing and somewhat differently than Bombardier and Embraer.

I also view JADC as having less of an axe to grind than the Big Four OEMs.

A couple of quick take-aways:

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Jet sales in 75-150 seat lag Airbus, Boeing

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Introduction

The Mitsubishi MRJ90 hasn’t recorded a sale in a year. Photo by Scott Hamilton.

July 13, 2017, © Leeham Co.: While analysts and reporters focus on the high-profile order competition between Airbus and Boeing, it’s time to look at Bombardier and Embraer, along with the 75-150 seat sector.

Boeing is doing better than expected this year, due largely to the launch of the 737 MAX 10. Airbus is struggling year-to-date, but received a big boost post-Paris Air Show with an agreement to sell 140 A320s and A350s to China. At this stage, it’s not a firm order, however.

How are Bombardier and Embraer doing in their core markets of 75-150 seats?

Just awful.

Sukhoi and Mitsubishi aren’t doing any better.

Summary
  • Few new sales in 2017 in the 75-150 seat sector.
  • Low fuel prices, Scope Clause and general order downturn converge.
  • Embraer’s Paris Air Show results boosted this OEM’s year-to-date performance.

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