Pontifications: Delays, design creep, cost overruns–nope, it’s not an airplane program

By Scott Hamilton

March 11, 2019, © Leeham News: It’s late. There have been creeping delays. There’s been design creep. There were unknown unknowns. It’s way over budget.

No, it’s not a new airplane program, though the parallels are quite apparent.

It’s our new house.

After a three year process, including changing builders, going through the city twice, hitting expensive unknowns and facing rising costs, today is finally, finally, moving day.

It’s been a horrible experience I wouldn’t wish on anyone.

This will sound familiar to Airbus, Boeing, Bombardier, Mitsubishi, Rolls-Royce, Pratt & Whitney and, to a lesser extent, GE and CFM. Only Embraer can say it finished on time and on budget.

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Pontifications: Which airplanes are revolutionary or evolutionary?

By Scott Hamilton

Feb. 18, 2019, © Leeham News: Last week’s column about the revolutionary Boeing 747 prompted some Twitter interaction asking what other commercial airplanes might be considered “revolutionary.”

I have my views. Let’s ask readers.

There are also three polls below the jump in addition to the usual comment section. Polling is open for one week.

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UTC-Collins merger creates super-supplier

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By Bryan Corliss

Jan. 28, 2019, © Leeham News: You might have missed it over the holidays, but something happened about the time you polished off the last of your Thanksgiving leftovers that just might have changed the balance of power between the major players in our industry.

That something was the closing of the merger between United Technologies Corp. and Rockwell Collins.

The deal, which formally closed on Nov. 26, created a new super-supplier that rivals Boeing’s Commercial Airplane division in size, outstrips it in terms of profitability and has the potential to upset the multi-tiered supply chain pyramid the industry has grown used to over the past few decades.

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2019 Outlook: A critical year for Mitsubishi’s MRJ regional jet

By Bjorn Fehrm

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Introduction

January 8, 2019, © Leeham News.: Mitsubishi Aircraft’s MRJ should originally have entered service 2013. Now the plan is 2020, a record seven years of delay. But 2020 can be the last delay. On December 21, the program got “Type Inspection Authorization” from its Certification office, the JCAB (Japan’s Civil Aviation Bureau).

The brunt of Certification flying should be finished in 2019. Then follows the paperwork and the preparation for service entry with ANA. The year will be critical for how the MRJ project will enter service and ramp serial production.

Summary:
  • The MRJ has seen more delayed years than its original schedule. But the last declared delay might be the final one.
  • The project got a declaration of health just before Christmas. Its oversight authority, JDAC, supported by the FAA, said it was ready to start Certification flights with the aircraft.
  • It’s now for Mitsubishi to succeed with these flight so ANA can get the first aircraft by 2020.
  • Work on capacity improvements for the smaller variant, the MRJ70, is also ongoing to make it more suitable for the US Scope Clause market.

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Pontifications: AFA holds aerospace job fair that WA state should have done

By Scott Hamilton

Jan. 7, 2019, © Leeham News: The first dedicated aerospace job fair in Washington State may draw more than 1,500 people today, says the president of the organizer, Aerospace Futures Alliance.

Kelly Maloney, AFA president, opened the fair day-long today citing 1,100 pre-opening registrations by job seekers. She told me later that another 500 walk-ins may show up.

Thirty-eight companies, ranging from the Seattle area’s giant, Boeing, to Tier 3 and Tier 4 suppliers, were present to receive the hopefuls, who ranged from new entrants into the job market to upper-middle aged people.

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2019 Outlook: Will Bombardier exit Commercial aircraft?

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Introduction

December 27, 2018, © Leeham News.: In July the CSeries changed from Bombardier to Airbus and in November the Q400 program was sold to Viking Air, the buyer of de Havilland Canada aircraft from Bombardier like the Twin Otter and the water bomber CL415.

When the Viking Air deal closes in the second half of 2019, only the CRJ regional jet will make up Bombardier Commercial Aircraft. Will the CRJ stay with Bombardier or go? And if so, why?

Summary:
  • With other divisions increasing revenues amid healthy margins, the loss-making Commercial Aircraft’s time was up. It’s future hope, the CSeries, was digging an ever deeper cost hole with each delay. Only a market success could save it.
  • The Boeing trade complaint in April 2017 made a success far-fetched, sealing the fate not only for the CSeries but for the Commercial Aircraft division.
  • With the CSeries at Airbus and Q400 at Viking Air, why keep the CRJ? It makes no sense. The CRJ is presently dressed for sale. Now it’s more a question to whom and when.

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Pontifications: Writing had been on the wall for years for Q400 sale; CRJ is next

By Scott Hamilton

Nov. 12, 2018, © Leeham News: The writing had really been on the wall for the past few years, regardless what the corporate line was: Bombardier was one day going to sell the Q400 program or shut it down.

Better to sell it and get at least some money out of it, no matter how small.

Bombardier agreed to sell the program to British Columbia-based Viking Air for a mere $300m–$250m, net of fees.

Ditto the CRJ program. It’s on life support. It’s a design dating to the 1980s, the passenger experience has long been eclipsed by the Embraer E-Jet and it will be also by Mitsubishi’s MRJ when this jet finally comes on line in 2020. Read more

Bombardier announces sale of Q400 program, exploring options for CRJ

Nov. 8, 2018, © Leeham News: Bombardier today announced the sale of its slow-selling, aging Q400 turboprop program to Canada’s Viking Air.

  • The press release from Viking’s parent company is here.

Viking previously purchased out-of-production Bombardier/de Havilland aircraft programs, including the Twin Otter, Beaver and CL-415 firefighting bomber.

Viking Air previously purchased the Bombardier de Havilland Twin Otter program and restarted production. Now, it’s buying the slow-selling Q400 program for a mere $300m. Photo via Google images.

Twin Otter production was restarted. The Beaver was not an is not in the cards to be restarted. The CL-415 was limping along, and no longer a contributor to Bombardier’s cash flow and profits.

“The Company entered into definitive agreements for the sale of the Q Series aircraft program and de Havilland trademark to a wholly owned subsidiary of Longview Aviation Capital Corp. for approximately $300m,” Bombardier said in a press release. It also announced the sale of other assets for $800m. The two deals are expected to close in the second half of 2019.

The low price reflects the struggles the Q400 has had for years. Bombardier lost money on the Q400 in recent years.

Bombardier also said it is considering its options for the aging, struggling CRJ program. Read more

Bombardier squeezed by ATR, Embraer, Mitsubishi

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Now open to all Readers.
Introduction

Oct. 22, 2018, © Leeham News: Bombardier has a firm backlog of 67 Q400 turboprops. ATR has a backlog of 256 through Oct. 20, according to the Airfinance Journal Fleet Tracker.

This is an 80% market share for ATR.

Bombardier has 83 CRJ jets of all models in backlog. Embraer has 442 orders for all E-Jet models. Mitsubishi has 213 firm orders for its MRJ70/90.

This is just an 11% market share for the CRJ.

These figures illustrate why the market doubts Bombardier’s long-term future in commercial aerospace.

Summary
  • The Q400 and CRJ are aging aircraft designs.
  • Minor enhancements don’t address the underlying issues.
  • New competition is squeezing BBD.

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Pontifications: Market Intelligence from NY

By Scott Hamilton

Oct. 22, 2018, © Leeham News: I was in New York City last week for a series of meetings. Here’s what “the street” is talking about. I make no judgment calls about whether the thoughts are on target or not. Read more