Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
- Tariffs Tumult Takes Over GE Aerospace Q1 2025 Earnings Call April 22, 2025
- Boeing reports mixed results of latest employee survey, but middle management and officers remain key obstacles April 22, 2025
- Hopes for 1Q financial progress turns into bumpy ride for Boeing April 21, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 18. April 18, 2025
CSeries dilemma: a saga of missed opportunities, bad decisions, stiff competition
By Scott Hamilton
Oct. 12, 2015, © Leeham Co.: The news agencies, stock markets and aerospace analysts last week went wild when Reuters reported there were talks going on between Bombardier and Airbus whereby the latter would take a majority stake in the CSeries program.
Within hours, both companies said talks had ended. As could be expected, the stock went into another tailspin.
Then United Airlines said it wants pilots to approve a contract, and is dangling a 100-seat airplane order for mainline operations as an incentive. The CS100 fits into this category, as does the Embraer E195 E2.
It is worth recapturing reasons BBD finds itself in its current predicament.
Embraer CEO interview: oil prices, Brazil’s economy, China
Paulo Cesar, president and CEO of Embraer’s commercial aviation unit. Photo via Google images.
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Introduction
Part 3
Sept. 14, 2015, © Leeham Co. It’s only been three months since the Paris Air Show and there have been some significant developments in the world that have impact on commercial aviation:
- Oil prices dropped from about $62/bbl to a low of $38 in mid-August and it’s climbed back to about $46 this week;
- China devalued the Yuan;
- The Brazilian economy has deteriorated and so has the domestic political situation; and
- Some LCC airlines in Asia are feeling the strain of growth and weakening currencies.
We talked with Paulo Cesar, president and CEO of Embraer at the Paris Air Show on some of these topics. We caught up with him Sept. 2 in Seattle, revisiting these topics and talking about more.
C Series: challenges ahead
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Introduction
Bombardier CS300 (L) and CS100 (R). Click on image to enlarge. Photo via Google images.
Aug. 10, 2015, (c) Leeham Co. Bombardier came away from the Paris Air Show with positive reviews after finally displaying its new C Series. The CS100 was present in launch operator Swiss International colors and the spacious interior installed. The larger CS300, in house colors, was also on display and performed flying maneuvers, impressing the crowd with the quiet of the Pratt & Whitney P1000G Geared Turbo Fan engines, also a new product. Once airborne and circling around the runway, the engines could not be heard over the loud speakers of the show’s announcer.
BBD officials came away encouraged by response to the airplanes and they said potential customers were stopping by the chalet with new and renewed interest in the program.
But there remain formidable challenges ahead for the program. There were no sales announced at the Air Show, although BBD officials were clear in advance none was expected. None has been announced in the six weeks since the Air Show. Whether there will be any of substance by year end, and to whom, remains to be seen.
Focus is on execution: getting the aircraft certified by year end and preparing for delivery to Swiss in the first half of next year.
But the customer base remains of iffy quality and a number of the deliveries scheduled 2016-2018 fall into Leeham Co.’s Yellow and Risk Risk Assessment.
Summary
- Of nearly 200 deliveries scheduled 2106-1018, more than half fall within our Yellow-Red risk assessment.
- Country and region risk are concerns.
- A major customer has a changing business plan that puts deliveries into a Risk Assessment.
Bombardier reports lower 2Q2015 income
July 30, 2015: Bombardier reported lower net income on slightly higher revenues for the second quarter.
The press release is here. The earnings call presentation is here. Bombardier-Q2-2015-Presentation-20150730-en
“Overall, the second quarter was in line with plan in terms of revenues, EBIT and deliveries, and our liquidity stands at $4.4 billion,” said Alain Bellemare, President 
and Chief Executive Officer. “After five months on the job, I have a better understanding of our challenges and opportunities. We are taking specific action, including the launch of our Bombardier transformation plan, a disciplined approach to cash management, and the strengthening of our leadership team to reshape the company and ensure our long-term success.”
Bombardier said it completed 2,000 of the 2,400 hours required for certification of the C Series, which will be delivered during the first half of 2016 to launch operator Swiss International.
During the earnings call, Bellemare outlined more details of the Transformation Plan designed to turn BBD around from its financial strains.
Boeing 777X heading towards design freeze a bit heavier than planned.
By Bjorn Fehrm
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Introduction
July 12, 2015, © Leeham Co. As we reported from Boeing’s Paris Air Show briefing, Boeing’s 777X project is progressing to a design freeze later in 2015. At the briefing everything was presented as being on track with no changes of key data. There have been signs that this in not fully the case. The 777X program is suffering the same disease that hits other aircraft programs, weight gain flu.
To understand it better, we compiled the many indications that points to weight increase and ran them through our proprietary model to understand why and see what it means for the aircraft’s performance.
Summary:
- Weight increase is an evil that all aircraft programs battle with. Our analysis shows that 777X is no different.
- Engine thrust is one of the areas which will be increased to mitigate increased weight. We give the latest status of GE9X thrust development, now beyond 105,000 lb.
- A number of airframe changes have been made. We analyze their consequences and make predictions for future maximum weight increases.
Airbus, Boeing YTD orders assessed (Update)
Figure 1. Click on image to enlarge.
Update, July 8: In our original post, we omitted 44 Boeing 737NGs from the YTD firm orders. The charts and text have been updated to reflect this information.
July 7, 2015, © Leeham Co. Airbus pulled ahead of Boeing in firm orders through June, and both companies have a number of commitments that were announced at the Paris Air Show that aren’t included in the year-to-date tally.
Airbus leads with single-aisle orders and Boeing leads with widebody orders, but at the half-way point of the year, the contest is far from over. The leads could shift or increase, depending on how the balance of the year goes.
Pontifications: Passenger experience and the WOW factor
By Scott Hamilton
June 29, 2015, © Leeham Co. Back on June 1, I wrote in this column I had yet to experience traveling on the Airbus A380, which entered service in 2007. The A380 doesn’t serve Seattle, where I live, and I really didn’t have a desire to add hours and a connection to my travels just to fly the A380 if I could go non-stop. Note that this is precisely the argument advanced by Boeing, but this is a coincidence. I have yet to fly on the Boeing 787, either, and it does fly into Seattle from Asia.
A reader Tweeted to me his incredulity that in all these years I hadn’t flown the A380. I replied, All in good time. I knew when I wrote that I would be returning from the Paris Air Show on an A380 via Los Angeles. The time had come for me to experience the airplane. (Interestingly, Dominic Gates of The Seattle Times, unbeknownst to either of us, wrote he’s doing the same thing via New York on Air France. I would be flying Air France. Friends warned me that the passenger experience on Air France, however, was hardly what the A380 is all about.
They weren’t kidding.
I had been on the test A380 during static displays before, but never in a passenger-configured model. At the PAS, Qatar Airways had its own little air show, displaying more airliners than any OEM: the A319, A320, A350 and A380 plus the 787. The A350 and A380 were open to the press. As with anyone in the industry, I had long-heard of how the Middle Eastern airlines went over the top on outfitting their cabins, but I wasn’t remotely prepared for the Qatar A380. Walking on board, into the first class section, was a jaw-dropping “wow” moment.
Bjorn’s Corner: What Paris Air Show taught us about East and West.
By Bjorn Fehrm
25 June 2015, © Leeham Co: With a few days in the office one can look back at Paris Air Show with a bit of perspective. So what are the impressions?
It was surprising how many orders Airbus and Boeing landed. Both had played down the expectations, telling that it will be a decent show but nothing close to record. Yet both were booking orders or commitments which were better than expected going into the PAS. Read more