Airbus needs more vertical integration, says official

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Introduction

John Leahy

John Leahy, chief operating officer-customers. Airbus photo.

March 3, 2016, © Leeham Co.: Airbus may well have avoided the supplier-driven delivery delays on its A350s had the company brought some key work in-house and become more vertically integrated, says its chief operating officer-customers.

Airbus has been bedeviled by delays in business class seat and galley deliveries from supplier Zodiac, resulting in delayed deliveries of the A350-900 to several airlines.

John Leahy, in an interview with LNC at the International Society for Aircraft Transport Trading (ISTAT) conference Feb. 29-March 1 in Phoenix (AZ), said Airbus shouldn’t be at the mercy of suppliers of interiors. His wide-ranging interview also touched on several other topics.

Summary

  • Airbus should have become more vertically integrated 10 years ago.
  • Basic supply chain solid.
  • Speaks about PW GTF, CFM LEAP
  • Airbus considering higher production rate on A320 than the announced 60/mo.

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ISTAT Day 1: Used 777 values depend on engines, leases

Feb. 29, 2016 (c) Leeham Co.: The Boeing 777-200ER is not worth $7.7m or even $10m, ISTAT-logo_no_tag-(2c)but $37m to $47m, according to four appraisers who appeared today at the ISTAT AGM.

  • We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.

Doug Kelly of the consulting/appraisal firm Avitas notes that the Rolls-Royce Trent-powered 777s are, indeed, the least desirable airplanes. GE or PW-powered airplanes commands a $7m premium, he said.

AerCap is selling 777-200ERs with leases attached for more than $50m, Kelly said.

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IRKUT MC-21 analysis, Part 3. The Russian engine alternative

By Bjorn Fehrm

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Introduction

Feb. 29, 2016, ©. Leeham Co: In two articles we have been looking at the new Russian single-aisle aircraft, Irkut MC-21from United Aircraft. Now it’s time to analyze the new Russian engine, PD-14, which is offered as an alternative to the base engine for the aircraft, the Pratt & Whitney PW1400G. PD-14 engine

Summary:

  • The PD-14 is a new engine designed by the Aviadvigatel company, a merger of the Soloviev design bureau with the Perm engine company.
  • PD-14 is a modern 31klbf design aimed at several Russian aircraft, the first being the MC-21.
  • The technology and performance of the PD-14 engine are approaching its Western counterparts, Pratt & Whitney PW1400G and LEAP-1A, but not quite reaching their level. We go through where it differs. Read more

Pictorial from Embraer E190-E2 rollout

Feb. 25, 2016: Embraer rolled out its E190-E2 to a series of fly-bys of EMB aircraft ranging from a crop duster to the KC-390, hundreds of invited guests and media and thousands of its employees.

Here are some photos from the rollout.

EMB E190-E2_1

E190-E2 No. 1, rolled out Feb. 25, 2016.

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Airbus Group 2015 results: A330 increase to seven per month

By Bjorn Fehrm

24 February 2016, ©. Leeham Co: Airbus will increase the production rate of the A330AirbusNew from six per month to seven beginning next year, it was announced today. The move comes after reducing the rate from 10 to nine and then to six per month as demand fell for the A330ceo ahead of the development of the A330neo.

Strong sales of the ceo resulted in the about-face to increase the rate.

The news came from the Airbus Group financial results for full year 2015 today in London.

In all other aspects it was a year of solid execution with revenue up 6% to €64.5bn. Profits stayed flat at €4bn despite record deliveries; the A350 and A400M ramp-ups are costly exercises.

Other highlights were;

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Rolls-Royce, short and long term outlook

By Bjorn Fehrm

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Introduction

Feb. 18, 2016, ©. Leeham Co: Rolls-Royce reported earnings for the full year results for 2015 Friday. The share price took a hike after more than one and a half years of being pressed down by bad news.

There was nothing really new that was presented last Friday, with revenue of £13.4bn and profits before tax of £1.4bn. Both results were within the market’s expectations. It was rather the lack of more bad news that made the stock soar to a new high.

We now go behind the scenes to analyze why the stock is depressed and if this is a long term state for Rolls-Royce.

Summary:

  • Rolls-Royce has delivered one bad news after the other since May 2014.
  • The causes behind the bad news have varied between challenges in its Marine business to more competition and lower deliveries for its best-selling Civil Aerospace engine, the Trent 700.
  • Rolls-Royce has also been criticized for boxing in of customers with its after-market TotalCare maintenance program. We describe what has changed and how this affects the situation.
  • The company is also facing some accounting standard changes with the introduction of IFRS 15 for 2018. We discuss what consequences this might have.

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Air Canada orders up to 75 C Series; announced with BBD 2015 financial results

Feb. 17, 2016: The long drought is over.

2000px-Air_Canada_LogoAir Canada has ordered up to 75 Bombardier C Series.The press conference is at 11am EST today. These will replace 25 Embraer E-190s. BBD now has orders and commitments for 678 C Series.

The announcement comes with the company’s fourth quarter and year-end financial results and a 90-seat version of its Q400 turboprop.

The Air Canada deal is a Letter of Intent for 45 CS300s and options for 30 more, including conversion rights to CS100s. Deliveries are from 2019.

The earnings call webcast summary is below the jump.

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PNAA Day 2: Cautionary note raised

  • Feb. 10, 2016: Today is the second of three days of conference meetings organized by PNAAthe Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.

Feb. 10, 2016: Large commercial aircraft deliveries hit just under $104bn in 2015, a 4.9% gain over 2014. Regional aircraft values, however, were just $7.1bn, a decline of 10.5% year-over-year, said Richard Aboulafia, a consultant with the Teal Group.

Deliveries of all aircraft types, including military, rotocraft, etc., saw only a 0.6% increase YOY. Jetliners account for 60% of the total values.

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Irkut MC-21, first analysis

By Bjorn Fehrm

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Introduction

Feb. 08, 2016, © Leeham Co: We recently covered China’s COMAC C919 and now the time has come to the other new narrow body aircraft from the old Communist bloc, the Russian MC-21.

The aircraft is called Irkut MC-21. Not many have heard of Irkut, so the first reaction is that this aircraft is made by a new Russian aircraft firm. The change is that United Aircraft (the Russian aircraft industry holding company) this time called the aircraft after its manufacturing company and not the design bureau, Yakovlev, that Irkut acquired in 2004. There are discussions to change back to the project’s original name Yakovlev 242 once certification is done.

When we looked at the first civil airliner that the Russian federation designed after the fall of Soviet Union, the Sukhoi Superjet 100, we found a well designed aircraft equipped with Western system. The MC-21 follows the same lines, but has more Russian technological development. It is therefore well worth a look.

Summary:

  • The MC-21 has its own profile. It is not a copy of a Western aircraft. It has a wider cabin than the A320, a wing which allows a higher cruise speed and a higher capacity in its base variant, the MC-21-300.
  • To make a meaningful comparison between the MC-21 and established aircraft, we have chosen to compare the MC-21-200 with the Airbus A320neo, as the MC-21-300 is larger than the A320neo but smaller than an A321neo. The MC-21-200 is closer in size to an A320neo. Read more

Analysis: Sukhoi’s regional jet Superjet 100

By Bjorn Fehrm

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Introduction

18 January 2016, © Leeham Co: Russian aircraft have never succeeded in penetrating the Western market. But then they never really tried, until now. They were designed for the Soviet Union captive market, including the partner states that historically participated in or were friendly to the communistic system. One comes to think of China, Egypt, Libya, Cuba and Nicaragua.Interjet SSJThe Sukhoi Civil Aircraft Company (SCAC) Superjet 100 (SSJ100) is the first Russian aircraft specifically designed from the outset to compete on a world market.

We analyse its basic design and performance in comparison to the market leader in 100 seat regional flying, Embraer’s E190.

Summary:

  • The SSJ100 is a half a generation younger design than the Embraer E190. It has modern aerodynamics, IMA-based modular avionics and an advanced Fly-By-Wire system.
  • The feedback-based Fly-By-Wire enables a tight aircraft design with low wetted areas.
  • The SSJ100 engines, SaM146, can best be described as a shrinked and cleaned up CFM56. They have the efficiency level of the E190’s CF34-10E.
  • The aerodynamics and engines combine to give the SSJ100 a single digit edge in fuel burn over the E190.

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