CSeries trans-Atlantic capability

By Bjorn Fehrm

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Introduction

February 23, 2017, © Leeham Co.: We previously described how new generation engines make the Boeing 737 MAX 8 a trans-Atlantic aircraft. The MAX 8 is smaller than the Airbus A321LR, but not the smallest single-aisle with trans-Atlantic capability. This distinction goes to the Bombardier CSeries.

We wrote about the CS100 capability to cross the Atlantic from London City Airport last year. After the article, we received new and improved data from Bombardier. The CS100 can now fly directly to US East Coast on the difficult westward leg with a business cabin of 42 seats. The updated article is here.

When we look at the improved capabilities of the CS300 (announced at Farnborough Air show last summer), this aircraft can also cross the Atlantic with a full cabin of 130 passengers.

Bombardier arranged so we could discuss this deeper with the VP CSeries program, Rob Dewar.

Summary:
  • We use our aircraft performance model to compare the CS300’s suitability for long-haul to the Airbus and Boeing competition.
  • The aircraft have similar range and seat mile costs. The smaller aircraft have lower trip costs.
  • With Rob Dewar, we explored the potential for additional capability for the CS300.

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Bombardier YE2016 results better than expected

Alain Bellemare, CEO of Bombardier.

Feb. 16, 2017: Bombardier today posted better than expected results (even on lower revenue) for the fourth quarter and full year.

Goldman Sachs was first out with reaction among the analyst reports LNC receives:

Bombardier (Neutral) reported stronger-than-expected 4Q16 operating results. Revenue is below consensus and our expectations, but adjusted EBIT is well ahead of our estimate on better operating margins. Free cash flow is a larger source of cash than we expected. 2017 guidance is unchanged. Post the quarter end, Bombardier announced the Government of Canada will provide the company $283mn over four years in repayable contributions related to the Global 7000 and 8000, and the C Series. This investment will be repaid through royalties upon aircraft delivery.

BBD’s press release is here. The financial presentation from today’s earnings call is here.

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Singapore 777-9 order pressures, but does not kill A380

Feb. 16, 2017, © Leeham Co.: Last week’s order by Singapore Airlines for 20 Boeing 777-9s and 19 Boeing 787-10s immediately was viewed by some as the death

Boeing 777-9.

knell for the Airbus A380.

The 777-9 order would start the final spiral down for the A380, some contend.

This overstates the case and misunderstands the nature of the order.

The A380 is in trouble, there no doubt about that. The 777-9 is putting pressure on the A380. There’s no doubt about this, either. But the contention the Singapore 777-9 order sends the A380 on a death spiral is wild fantasy.

An Airbus official appears today at the annual conference of the Pacific Northwest Aerospace Alliance (PNAA) in Lynnwood (WA). Undoubtedly, he will maintain the party line that the future of the A380 is solid. This, too, overstates the case. There can be a future for the airplane, but some major decisions must be made.

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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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Bjorn’s Corner: Aircraft engines in operation, Part 3

By Bjorn Fehrm

February 3, 2017, ©. Leeham Co: In the last Corner, we went through how our airliner engine reacts to the different phases of flight, including what happens when we operate in a hot environment.

We also showed how engine manufacturers make a series of engines with different thrust ratings by de-rating the strongest version through the engine control computer.

Figure 1. Principal picture of a direct drive turbofan. Source: GasTurb.

We will now look deeper at how engines are controlled and why so-called flat-rating is important. Read more

MRJ regional jet delayed until mid-2020

By Bjorn Fehrm

January 23, 2017, ©. Leeham Co: Mitsubishi announced a further two years delay of the MRJ regional jet project in a press conference in Tokyo today.

The 90-seater variant of the aircraft will be delivered to the first customer, All Nippon Airways (ANA), mid-2020.

The previous scheduled Entry Into Service (EIS) of mid 2018, was announced December 2015. In total, the MRJ program has announced five delays, totaling seven years. Read more

The regional market and scope clauses

By Bjorn Fehrm

January 17, 2017, ©. Leeham Co: Union contract Scope Clauses–the provision limiting the weight, capacity or number of aircraft operated by airlines for major carriers–are unlikely to be modified any time soon, panelists at the Air Finance Journal conference in Dublin said.

The restrictive Scope Clauses are predominate in the US. These limit the ability of small airplane manufacturers to sell aircraft in the US. Most affected are Embraer, Bombardier and newcomer Mitsubishi.

Contract negotiations in December, concluded before Christmas, resulted in no changes, surprising some. This will impact planned purchases of aircraft.We sat with Bombardier’s Ross Mitchell, vice president of commercial operations, to understand why the scope clauses are so important and why they did not change. Read more

Bjorn’s Corner: Geared turbofans

By Bjorn Fehrm

January 13, 2017, ©. Leeham Co: The time has come to go through the reasons why some turbofan engines are designed with a gearbox between the fan and the low pressure shaft.

The principle design is shown in Figure 1. It’s a graphical representation of a geared turbofan from the engine analysis software GasTurb.

Figure 1. GasTurb principal representation of a geared turbofan. Source: GasTurb.

The base idea is to have the low pressure spool of the engine to run at a considerably higher RPM than the fan. Read more

Airbus sets new delivery record for 2016

By Bjorn Fehrm

January 11, 2017, ©. Leeham Co: Airbus Commercial Aircraft presented a new record in yearly deliveries at its Press Briefing in Toulouse today.  The division of an integrated Airbus (therefore Airbus Commercial Aircraft, ACA) delivered 688 aircraft during 2016, thereby beating its target of 650 aircraft for the year.

Airbus A321neo with Pratt&Whitney engines was certified end 2016. Source: Airbus.

Orders were also higher than expectations at 731 net orders, giving a Book to Bill of 1.06. The market, including LNC, widely expected Airbus to fall somewhat short of a 1:1 book:bill.

There were no formal forecasts given for 2017. ACA President Fabrice Bregier stated that he expects it to be over 700 deliveries but full details will given at the Airbus Group’s financial press briefing in February.

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Deferrals grow as airlines fight to keep bottom line

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Introduction

Jan. 09, 2017, © Leeham Co.: Airlines have deferred or are thinking about deferring more than 400 airplanes in the near term, a review of decisions and deliberations  that have been made during the last 12 months.

LNC tracked announcements last year of deferrals and statements by airlines that they are thinking about doing so.

We began identifying macro-level issues last week in our posts about emerging concerns for the 787 and LNC’s Outlook for 2017.

Reasons vary widely for the deferrals, these reports indicated. Low oil prices. Slowing economies. Declining financial results. Worries about two of the three top Middle Eastern carriers. A capital squeeze in China. Pressure on long-haul carriers from the emerging sector of low cost, long-haul airlines. Preserving capital expenditures to keep the bottom line in the black.

Today we detail the deferrals we tracked.

Summary
  • Deferrals of single aisle aircraft are less worrying than for wide-body aircraft
  • For wide-bodies, it depends on the program. For the Airbus A380, deferrals turns the program back into the red. For the A350, deferrals can help with delivery commitments.
  • For the Boeing 777, deferrals spells trouble, especially for the present generation.
  • The 787 is more resilient but the slow sales make the program sensitive longer term.

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