The turbo-prop conundrum: small market, high costs

ATR Turbo-prop. Photo via Google images.

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Introduction

ATR and Bombardier are incumbents. China has a home-market offering.

Indonesia and India want to create a product.

It’s the 60-seat and up turbo-prop market.

It’s too many companies chasing too-small a market.

Summary

  • The 20-year demand for 60-99 seat turbo-props is small.
  • Developing a new, clean-sheet design is costly.
  • There is a solid demand for an inexpensive 19-34 seat turbo-prop—but nobody is interested.

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Bjorn’s Corner: MRJ90 first flight

By Bjorn Fehrm

By Bjorn Fehrm

13 November 2015, ©. Leeham Co: Mitsubishi flew their MRJ for the first time this week. I could have added “finally” because it is two years late compared to the original time plan. But who cares when the aircraft is finally ready to fly and everything goes well? (Well, the customers do, actually.)

It was a big moment for Japan, a nation with a sizable aeronautical industry. Japan has been a major partner to Boeing in their larger airplane programs over the 757/767 to the 777 and 787. For the Dreamliner, they even designed and made the hottest item, the high-tech Carbon Fibre Reinforced Plastic (CFRP) wing.

Despite having such a capable aeronautical industry, Japan has not built an own civil aircraft since it closed the production line for the YS-11 twin engined turboprop in 1973. Since then it has acted as sub-supplier and has worked on certain military programs like the Mitsubishi F-2 fighter, based on the Lockheed Martin F16.MRJ first flightThe Mitsubishi corporation flew the MRJ90 for the first time Wednesday from the Nagoya Airport in Japan (screenshot from video from Mitsubishi). Most of the flight testing will be done in Moses Lake (WA), USA, where four test airplanes will be based.

Moses Lake is blessed with open skies, little air traffic, a long runway and good weather. It has a long history of flight testing, serving as a test-base for Japan Air Lines 747 pilot training for decades. Boeing also uses Moses Lake for flight testing.

We analyzed the MRJ90 and its main competitor the Embraer E175 in a subscriber article the 25th of January. We will revisit the main characteristics and then comment on what could be seen from the first flight. Read more

What’s the trouble with Bombardier and the CSeries, Part2?

By Bjorn Fehrm

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Introduction

Nov. 02, 2015, ©. Leeham Co: Bombardier (BBD) held its 3Q 2015 call last week and gave further information around the cash needed to bring the CSeries program to market. We now take the chance to compare our forecast of the program’s costs with the information that could be gleaned from the 3Q report and analyst call.

Overall, it can be said that OEM’s don’t want market analysts to have to detailed information. The answers on the analysts’ questions are as general as possible and one has to collect bits and pieces to build a picture. When doing this, it helps that one has modeled the whole problem beforehand. The OEM’s sparse data points can then be fitted like puzzle pieces into the larger picture and one can see if there is a fit or not.

Here is what we found.

Summary:

  • Overall, the communicated 3Q results and needs of the CSeries program fit well with our forecast.
  • BBD’s CEO, Alain Bellemare, said, however, on Canadian TV that Leeham’s forecast of a loss of $32m per aircraft for the first 50 “is not correct”.
  • With the data that was communicated we have to be close. There is a plausible explanation why we and Bellemare could both be correct; we explain why.

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Bjorn’s Corner: Engine rubbing

By Bjorn Fehrm09 October 2015, ©. Leeham Co: Last week an Airbus A320neo prototype with Pratt & Whitney’s (PW) GTF had a problem while testing hot and high conditions at Al-Ain airport in Abu Dhabi. The engine suffered a rubbing problem and PW and Airbus decided to replace the engine before returning the A320neo to Toulouse.

I had the opportunity to discuss what happened with PW people at ISTAT this week and decided it makes for a good follow up to our two other engine Corners to write about what happened and how serious it was.

The problem was compressor blades rubbing against the compressors stator wall. PW knew that this engine individual could have that problem. They saw when assembling the engine it was a bit tight in the compressor area. PW said they told Airbus there was a risk with this particular unit, and sure enough, there was rubbing to be seen when they boroscope checked the engine after the test.

Here what it was all about and what to do about it. Read more

Evaluating airliner performance, Part 2

By Bjorn Fehrm

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Introduction

Sep. 24 2015, ©. Leeham Co: In the second part of our series about comparing and evaluating economic and operational performance of airliners, we look at the parts beyond fuel that make up the Cash Operating Costs (COC) for an airliner.

While fuel consumption, crew costs and aircraft maintenance costs can be evaluated in a way which closely resembles reality, other costs in the COC are too complex to model in their true form.

This is the case for underway or airway fees, landing fees and station fees. Here, just about every country/airport in the world has taken the liberty to invent its own charging principles and formulas.  With several hundred different formulae for these charges, the way out is to use industry-accepted approximation for these costs.

Summary:

  • We establish how crew cost are modeled for our evaluation missions, taking into account the complex world of work time regulations for pilots and cabin crew.
  • We also describe how we handle airframe and engine maintenance costs and how these get allocated to our missions.
  • Finally, we describe how the complex underway and landing/station costs are modeled with the accepted approximations these require.

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Bjorn’s Corner: USAF Tanker program

By Bjorn Fehrm

By Bjorn Fehrm25 September 2015, ©. Leeham Co: When Scott Hamilton asked me to give my view on his article “Pontifications: Duelling refuelling tankers” I accepted. I was not involved in the project and was only following it casually over the years.

I will also not give my view on what would have been the most suitable tanker for the US Air Force. I simply don’t have the relevant military competence for that, having never operated my fighters with aerial tanking nor been in an aerial tanker aircraft.

Where I have relevant competence is in writing military specifications for important aircraft procurements and the excerpts I have seen from the tanker RFQ on key specification points don’t impress. Let me explain.

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Evaluating airliner performance, part 1.

By Bjorn Fehrm

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Introduction

Sep. 21 2015, ©. Leeham Co: Comparing and evaluating operational and economic performance of competing airliners is a complex task that requires analysis of thousands of parameters.

It’s not unknown for smaller airlines to have limited capability to undertake these difficult analyses. Accordingly, they often rely on the Original Equipment Manufacturers (OEMs) for their analysis on behalf of the potential customer.

Unfortunately, the OEM’s have little incentive to provide an unbiased view of either their products nor those of their competitors.

Thorough evaluations require quite some preparations. If these preparations are not carried out correctly, the result can be biased to the extent that the evaluation method dictates which’s the best aircraft and not the most suitability aircraft for the task. We will in a series of articles cover how aircraft evaluations are done and how evaluation pitfalls can be avoided.

Summary:

  • Aircraft evaluations are made for all direct operating costs that can be linked directly to the operation of the airliner.
  • The costs can be divided in Cash Operating Costs (COC), which covers the operation of the aircraft and capital costs. Combined these costs constitute the Direct Operating Costs, DOC.
  • The OEMs produce data for all COC cost items, but they do that in their own way. To make the costs comparable one need to know and understand their assumptions and neutralize these through independent modeling of the costs.
  • We describe what these assumptions are and how to neutralize them.

 

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Bjorn’s Corner: Engine efficiency

By Bjorn Fehrm18 September 2015, ©. Leeham Co: The debate around the market’s two single aisle combatants is quite heated, with fans of the one side saying “the limited space for a high bypass engine on the 737 MAX will cripple it forever” and the other side saying “the tighter design of the 737 will make it highly competitive against the A320neo, it is the A320 which has a weight and size problem”.

One of the arguments is that each inch of engine fan diameter brings 0.5% in increased propulsive efficiency. Therefore the A320 with up to 81 inches fans will win against the 737 MAX, which has a 69 inch fan. Having all the tools to check out if this is really the truth, I fed our airplane model with all the facts and looked at the result. It’s not so easy, guys…

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Airbus ‘confident’ engine makers can ramp up production

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Introduction

Sept. 17, 2015, © Leeham Co., Mobile (AL): Tom Enders, the chairman and CEO of Airbus Group, is “confident” engine makers can accommodate single-aisle airplane production ramp-ups being considered by Airbus and Boeing.

CFM makes about 50% of the engines on the A320 Family and has about 50% of the backlog for the New

Tom Enders, CEO of Airbus Group. Airbus photo.

Engine Option version. Pratt & Whitney has about the same market share for the NEO, depending on what month it is, with a large number of orders for which no engine has been selected.

Airbus and Boeing are each studying whether to ramp up production of the A320 and 737 families above the record rates already planned.

In an interview Sunday with Leeham News and Comment in advance of the A320 Final Assembly Line opening here, Enders said studies continue whether to take A320 production rates to 60 a month. Boeing is studying rates of 60-63 a month.

Summary

  • Decision whether to go to rate 60/mo should come by year end.
  • Suppliers, engine “partner” key to decision.
  • A380 sales “struggling,” but confidence remains.
  • More export sales for A400M program expected.

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A320 FAL “good for US aerospace,” says Airbus

 

Sept. 16, 2015, © Leeham Co., Mobile (AL): The opening of the Airbus A320 Final Assembly Line here achieves a major set of goals set by the company 10 years ago for its own strategic purposes, but officials are also mindful of the larger impact on US aerospace.

David L. Williams, VP Procurement, Airbus Americas. Photo via Google images.

Top executives point out that the Mobile plant reestablished a second commercial aviation assembly site in the US since the last MD-11s and MD-95s rolled out of the former McDonnell Douglas plant in Long Beach (CA) after its acquisition by The Boeing Co in 1997. Boeing continued production of the MD-11 until the end of 2000 (with deliveries occurring in 1Q2001). The last MD-95, renamed the Boeing 717, was produced in 2006. There were 200 MD-11s and 156 717s produced.

With nearly 10 years elapsing between that last 717 and the first A321ceo coming out of Mobile, Airbus officials say the creation of the FAL is not only good for Airbus and Alabama, it’s good for US aerospace.

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