Leeham News and Analysis
There's more to real news than a news release.
Odds and Ends: CSeries status; Airbus accident analysis; 737 rate increase; Kenya Air holds Boeing hostage
CSeries Status: Here is an interesting, detailed article from a blogger who follows the Bombardier CSeries more closely than anyone we can think of.
The article pretty well summarizes the issues, although we have this additional color: the fixes have been identified and are being installed and are still in Transport Canada review for approval and the green light to resume flight testing.
Airbus accident analysis: Airbus issued a study that looks at the causes of commercial accidents since 1958. The full report may be found here. The report is intentionally light on text and heavy on charts and graphics, so it’s easy to digest.
737 rate increase: Several media reported yesterday that Greg Smith, CFO of The Boeing Co., told an investors day Boeing is likely to decide this year on a production rate increase for the 737 line beyond the 47/mo previously announced to go into effect in 2017. Well, you read it here first–we reported more than a year ago Boeing was looking at a rate increase to 52/mo and even 60/mo. We’ve had in our estimates the 52/mo by 2018, 2019 or 2020, followed by 60 a year or two later.
Kenya Air: no more Boeings: We know some Airbus customers have long tied route authority to buying Airbus airplanes, and China is notorious for holding Airbus and Boeing orders hostage for political reasons. Kenya Airlines now says it won’t buy more Boeing aircraft unless it gets US route authority, according to this article.
Posted on August 15, 2014 by Scott Hamilton
Odds and Ends: Some FAS leftovers–a big CSeries order?; EMB lands 60; and more
Farnborough Air Show leftovers:
Big CSeries order coming? Flight Global reports that lessor Macquarie Airfinance is about ready to sign a deal for 50 Bombardier CSeries. If true, this would be a major departure for the lessor, which historically hasn’t placed speculative orders–and it would be a major boost for Bombardier. The Flight Global report doesn’t say if this would be 50 firm or a combination of firm and options. BBD and MAF didn’t comment for Flight. We reached out to MAF and received this response:
“The Flightglobal release was concocted on a rumour and we don’t comment on rumours. You know how it is with lessors. We’re constantly considering every aircraft type that could provide us with value-adding opportunities.”
Bombardier has been selling the CSeries in small numbers, often to second or third tier, and even start-up carriers, a path Boeing took in the early days of the 737-200 program. Airbus relied heavily on lessors for early A320 orders. Boutique lessor LCI was a launch customer for the airplane, and Falko Regional Aircraft Leasing became a customer at FAS.
BBD now has 513 orders and commitments for CSeries.
Posted on July 20, 2014 by Scott Hamilton
Farnborough Air Show, July 17: Orders summary, reflections of the show
Orders continued to trickle in as the Farnborough Air Show winds down (there could be others not listed here).
- Airbus: Transaero, LOI for 12 A330neos and eight A330ceos; Hong Kong Aviation Capital firms up an order for 40 A320neo and 30 A321neo aircraft, announced at the Paris Air Show last year. Here is the Airbus wrap up press release.
- Boeing: Summarizes its performance at FAS with this press release; 201 orders and commitments.
Items of interest:
- Emirates Airlines says it could order 60-80 A380s if Airbus proceeds with a neo.
Overall reflections:
Posted on July 17, 2014 by Scott Hamilton
Farnborough Air Show, July 16: MRJ program analysis
After a long drought of orders or even LOIs and MOUs, the Mitsubishi MRJ program saw some life at this Farnborough Air Show.
Sales of Japan’s first commercial airplane since the propeller-era’s YS-11 stalled with orders from SkyWest Airlines, Trans States Airlines and Japan’s ANA.
But at the FAS, Mitsubishi announced an MOU with Eastern Air Lines, a US start-up carrier, for up to 40 and a much smaller order for six from Air Mandalay.
The Eastern MOU can fairly come under scrutiny if for no other reason than the company is a start-up. Little is known about its financial fund raising and the business model–to begin as a charter airline and transition to a scheduled carrier in the highly competitive US Southeast–doesn’t instill a lot of confidence. EAL, named after the old trunk carrier that went out of business in 1991, has also ordered the Boeing 737-800 after initially announcing plans to begin service with the Airbus A320.
Posted on July 15, 2014 by Scott Hamilton
Farnborough Air Show, July 15: Orders summary
Here are the orders and commitments announced today that we saw–there could be others we haven’t seen:
- Airbus: Avolon (a lessor) ordered 15 A330neos; CIT Aerospace, MOU for 16 A330-900s, five A321neos; SMBC Aviation (lessor), 110 A320neo and five A320ceo aircraft; BOC Aviation, 36 Airbus A320ceo and seven A320neo family 17 of which will be fore the A321 family; AirAsiaX, MOU 50 A330-900s.
- ATR: Air Lease Corp. purchased seven ATR-72-600s.
- Boeing: Intrepid Aviation, 6+4 777-300ERs; Air Lease Corp, six 777-300ERs, 20 737-8s; CIT Aerospace, 10 787-9s.
- Bombardier: One Q400 from Horizon Air; revealed an unidentied customer, Abu Dhabi Aviation, for two Q400s; LOI from Falcon Aviation for five Q400s.
- CFM: Air Lease Corp. ordered the LEAP-1A for 20 A320neo family aircraft.
- Embraer: Azul Air, LOI for 30+20 E-195 E2 (and becomes launch customer for this sub-type); Fuji’s Dream Airlines, 3+3 E-175s, a previously unidentified customer.
- Mitsubishi: six MRJ90s from Air Mandalay.
- Pratt & Whitney: SaudiGulf Airlines orders the V2500 to power four A320ceos; Philippine Airlines executes a previous LOI to a firm order for the GTF for 10 A320neos; BOC Aviation, V2500 for eight of the A320ceo family listed above; International Airlines Group (Vueling Airlines), V2500 for 30 A320ceo family.
- Viking Air: Air Seychelles, two Twin Otters.
Items of note:
- Airbus’ John Leahy says he expects a total of 100 A330neo orders from FAS;
- BOC Aviation endorsed the launch of the A330neo but didn’t (yet) order any.
- Boeing said its new 777X will have a cabin altitude of 6,000 ft, the same as the 787, larger windows than its 777 Classic and the A350; features borrowed from the 787 and many that go beyond the 787 passenger experience; and lower noise.
- Bombardier launched its Q400 Combi, seating 50 passengers and carrying 8,200 lbs of cargo.
- Steven Udvar-Hazy, CEO of Air Lease Corp, which has a large order book for the ATR-72-600, says, the Q400 is a good aircraft, but “much more expensive to operate” vs ATR. [However, that’s at the Q400’s high cruising speed. If it’s throttled back, the operating costs are said by BBD to be comparable.–Editor.]
Posted on July 15, 2014 by Scott Hamilton
Airbus, ATR, Boeing, Bombardier, CFM, Embraer, Mitsubishi, Pratt & Whitney
737-8, 777-300ER, 777X, A320ceo, A320NEO, A321NEO, A330-900neo, A330neo, Airbus, ATR-72, Boeing, Bombardier, CFM, GTF, LEAP-1A, Leap-1B, Mitsubishi, Mitsubishi MRJ, MRJ90, Pratt & Whitney, Pratt & Whitney GTF, Q400, Q400 Combi, Twin Otter, Viking Aircraft
Farnborough Air Show, July 15: WA State and Mitsubishi; PW GTF issue revealed, finally;
The news that Mitsubishi will stage flight testing for its new MRJ 90-seat jet program at Moses Lake (WA) is, parochially, good news. And it is exactly the type of non-industrial aerospace business that we’ve been advocating for Washington since our consulting days to the State Department of Commerce in 2010, and during our tenure as a member of the Board of Directors for the Pacific Northwest Aerospace Alliance (PNAA) for three years (2010-2013).
Washington, understandably, has been married to, and focused on, industrial aerospace. Boeing is here, of course. The supply based the supports Boeing has a huge footprint in Washington. But industrial business is highly capital-intensive, and winning this business is highly competitive.
Posted on July 15, 2014 by Scott Hamilton
Airbus, Boeing, Bombardier, CSeries, Embraer, Farnborough Air Show, Mitsubishi, Pratt & Whitney
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Farnborough Air Show, July 15: VLA program analysis: A380, B747-8I, 777-9, [and the wishful thought of an A350-1100]
Fabrice Bregier, CEO of Airbus Commercial, threw cold water on the prospects of an A380neo and an A350-1100, the latter to compete with the Boeing 777-9.
Bregier’s position on the A350-1100 leaves Boeing with a monopoly at the 400-seat marker. Boeing doesn’t view the 777-9, which nominally seats 407 passengers, as part of the Very Large Aircraft sector which begins at 400 seats. Rather, Boeing lumps the -9 into the medium-twin aisle sector (300-400 seats).
While Airbus continues to struggle with sales for the A380, Boeing doesn’t much talk about the 747-8I anymore, focusing primarily on the future potential of the 747-8F. Boeing bravely talks about the prospect of four or five customer sales for the 747-8I this year, including a strong wishful-thinking of an order from Emirates Airlines (president Tim Clark says he’s not interested).
Posted on July 15, 2014 by Scott Hamilton
Farnborough Air Show, July 14: Orders Summary
Here are orders that were announced on the first official day of the Farnborough Air Show (at least the ones we’ve seen from Seattle–feel free to add to the list if we’ve missed any):
- Airbus: from Air Lease Corp: 25 A330neos and 60 A321neos. British Airways converts 20 A320neo options to firm orders; 20 A320neos from AerCap.
- ATR: NAC places firm order for 75 ATR 42-600s.
- Boeing: Announced what had been leaked before the show–30 737-8s from Monarch Airlines, an important “flip” from incumbent Airbus; six 737 MAX 8s and four Next-Generation 737-800s from Okay Airlines; six 787-9 Dreamliners and five additional 737 MAX 9 from lessor Avolon.
- Bombardier signed LOIs with: Chinese airline Loong Air for 20 CS100s; Petra Airlines of Jordon for two CS100s and two CS300s; and it converted a previously announced LOI for Falcon Air of Abu Dhabi for two CS300s to a firm order. BBD also revealed a previously unidentified follow-on order for three CS300s from Air Baltic. This was announced at the Singapore Air Show.
- CFM International won the large engine order from American Airlines to power its A319neo/A321neo fleet. We reported June 19 that this deal would come down to commercial terms, according to American CFO Derek Kerr. Given CFM’s position on the Boeing 737-800, 737-8 and Airbus A319ceo; and GE Aviation’s presence on AA’s widebody fleet, plus whatever maintenance agreements also exist, CFM/GE was in a position to offer commercial terms that Pratt & Whitney could not when offering the GTF. Also as previously noted, CFM won the easyJet A320neo family order for 270 engines.
- Embraer: 50 “reconfirmable” and 50 options for the E-175-E2 from Trans States Airlines of the USA.
- Mitsubishi: Eastern Airlines signed an MOU for 20 firm and 20 purchase rights for this MRJ90. Parenthetically, we’re happy that Mitsubishi also announced it will test the MRJ in Moses Lake (WA).
- Pratt & Whitney won the GTF order for VivaAerobus’s 40+40 A320 fleet and the V2500 for 12 A320ceos.
Things of note:
- Airbus predicts sales of 1,000 A330neos, plans two year overlap in production of A330ceo. EIS 4Q2017.
The sniping between Airbus and Boeing continues:
- “The only way a passenger will know he’s not on a 787 is that the seats will be bigger,” says John Leahy of the A330neo vs the Boeing 787. Leahy gives good quote.
- Ray Conner, CEO of Boeing Commercial Airplanes, calls the A330 an airplane of the 1980s. (Careful, Ray: the 737 MAX and the 747-8 are airplanes of the 1960s….)
Posted on July 14, 2014 by Scott Hamilton
Farnborough Air Show, July 13: CSeries program analysis
The unexpected pre-Farnborough Air Show announcement by Bombardier for letters of intent for up to 24 CS100s is welcome news for the company and the program.
Although an announcement by Falko Regional Aircraft Leasing of a firm order would have been more welcome, history shows that LOIs tend to be converted into firm orders eventually, whether these are from Airbus, Boeing, Embraer–or Bombardier. With the Falko LOI, BBD now has 471 firm orders and commitments for the CSeries.
Hand-wringing headlines and stories over May’s engine incident in which a Pratt & Whitney P1000G Geared Turbo Fan during a CSeries ground test and the assumed hugely negative impact on the program these stories and headlines suggest are way overblown.
Posted on July 13, 2014 by Scott Hamilton
GE analysis post Farnborough
Our wrap up of Farnborough would be incomplete without looking closer at the world’s leading engine supplier, GE Aviation, which together with partners (like SAFRAN in CFM joint venture) garnered more than $36 Billion in orders and commitments during the show. This figure was only significantly bettered by Airbus ($75 Billion) and it came close to Boeing’s $40 Billion. With such level of business the claim by GE Aviation CEO, David Joyce, that the Airbus A330neo engine business was not the right thing for GE as they have more business than then they know what to do with, was certainly no case of “sour grapes”. Read more
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Posted on July 28, 2014 by Bjorn Fehrm
Airbus, Airlines, Boeing, Bombardier, CFM, Comac, CSeries, Embraer, Farnborough Air Show, GE Aviation, Leeham News and Comment, Pratt & Whitney, Rolls-Royce, Uncategorized
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