Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
Sizing up engine market share on the A320 family
While competition between Airbus and Boeing snares nearly all the headlines and all the “sex,” competition for engine orders is less sexy and receives less attention.
Part of this is because of the increasing trend toward sole-sourcing. The Boeing 737 has been sole-sourced by CFM International since the creation of what is now called the Classic series: the 737-300/400/500. Pratt & Whitney believed at the time Boeing was upgrading the 737-200 that airplanes were up-gauging and bet its future on the Boeing 757 size. It was one of the classic corporate blunders of all time.
Shut out of the 737, P&W joined with Rolls-Royce and MTU to build the International Aero Engine V2500 for the Airbus A320 family. IAE came to the table late, giving CFM a solid head start on the program with a variant of the CFM 56 that powers the 737 Classic and later the 737 NG.
IAE trails to this day, but has done a remarkable job of coming from behind. CFM tends to be favored on the A319 and A320 while IAE is the preferred engine on the larger A321. IAE offers more thrust and better economics on the A321 while the CFM has better economics for the smaller Airbuses. CFM’s reliability is legendary and tends to be better than the V2500.
The blog PDXlight has done a marvelous job of dissecting the engine market share of the A320 family for the New Engine Option. We asked PDXlight to do the same exclusively for us for the A320ceo family. The results are below the jump.
It’s official: Canada’s Porter selects CSeries for difficult Toronto City Airport
Bombardier Aerospace @Bombardier_Aero 41s
Warm welcome to #CSeries Canadian launch customer @porterairlines that signed a cond. agreement for up to 30 CS100 http://ow.ly/i/1Rx4e
The Toronto Star was quick to post this story.
Here is the Porter press release.
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Canada’s Porter Airlines was the unidentified “Americas” customer announced some months ago to have signed a Letter of Intent for 12+18 CSeries.
The companies revealed today that the customer is Porter Airlines, which chose the CS100 for operations at the highly restricted and difficult Toronto City Airport.
The airport is on a small island near downtown Toronto and currently is restricted to turbo-prop service. Porter operates Bombardier’s Q400.
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The runways are short; the longest, 8/26, is a mere 3,988 ft. Porter is asking authorities to extend the runway.
There are also noise restrictions, but Bombardier, Porter and Pratt & Whitney say the CSeries Geared Turbo Fan engine, combined with the airframe, won’t be a noise nuisance.
This is another win for the CSeries at noise-sensitive and difficult airports. Swedish airline Malmo ordered the CSeries for one of its difficult airports. An unidentified customer, believed to be but never confirmed as PrivatAir, was widely reported to have ordered the airplane for service to London City Airport, another short-field, noise-sensitive airport that also requires a steep glide slope due to surrounding buildings.
Here’s a story from The Province posted this morning in advance of Porter’s announcement.
The famed Airbus “5th Quarter”–huge LionAir buy reported
We talked about this a month of more ago: the prospect LionAir would order 100 Airbus A320 family aircraft. Today (or was it yesterday, in Asia?) comes this report that LionAir signed an order in December for as many as 220 A320neos (with PW GTF engines, we understand).
Through November Airbus recorded a net of 585 orders, compared with Boeing’s year-end total of 1,200. Reuters believes Airbus will end 2012 with around 900 orders.
LionAir has been exclusively a Boeing customer.
Update, Jan. 10: Avolon (a lessor) announced today it signed an order for 20 additional A320s in December.
Embraer selects PW GTF for E-Jet RE; concept clarity comes at last
It’s official: Embraer selected the PW GTF to re-engine the E-175, E-190 and E-195.
In doing so, it looks like the E-170 will be allowed to wither on the vine.
This is a huge win for PW and setbacks for Rolls-Royce, which sorely wanted to win the E-Jet RE for its Advance 2 RR development; and for GE, the incumbent supplier of the CF34 and which was developing the Next Generation variant for the E-Jet.
It’s yet another validation for the GTF. Versions of this engine will power the Mitsubishi MRJ, the Bombardier CSeries, the Irkut MS-21, the Airbus A320neo family and now the E-Jet RE.
It’s a huge comeback for PW, which made a major strategic error in not competing to power the Boeing 737 300/400/500. Boeing continues to use the GE/CFM LEAP engine as its sole-source supply for the 737 MAX, though Boeing seriously evaluated the GTF as well.
Below is EMB’s press release:
Embraer Selects Pratt & Whitney’s PurePower Engines for Second Generation of E-Jets
São José dos Campos, January 8, 2013 – Embraer SA (NYSE: ERJ; BM&FBOVESPA: EMBR3) announced today that Pratt & Whitney´s PurePower® Geared TurbofanTM engines have been selected for its future, second generation of E-Jets, with entry into service planned for 2018. The decision is an important milestone in the program, which is expected to be officially launched later this year.
The new engines – the PW1700G and PW1900G – range in thrust from 15,000 to 22,000 pounds. In combination with new aerodynamically advanced wings, state-of-the-art full fly-by-wire flight controls and other systems evolutions, they will result in double digit improvements in fuel burn, maintenance costs, emissions and external noise.
“We are very happy to expand our partnership with Pratt & Whitney, keeping the E-Jets family as the best solution for our customers, today and in the future”, said Frederico Fleury Curado, President & CEO of Embraer. “The PurePower GTF engines are a great fit to the next generation of our E-Jets and we look forward to another long lasting and successful program with Pratt & Whitney”.
“We are proud that Embraer has recognized the unmatched value of the PurePower engine, and we are committed to supporting a successful launch of the new E-Jet aircraft family,” said Pratt & Whitney President David Hess. “To date, Pratt & Whitney has completed more than 4,200 hours and 12,400 cycles of full engine testing for the PurePower engine family, demonstrating the benefits and reliability of the engine architecture.” Pratt & Whitney is a division of United Technologies Corp. (NYSE: UTX).
The second generation of E-Jets will be a significant step in Embraer´s commitment to continuously invest in this line of commercial jets, complementing a series of ongoing improvements currently being implemented in the existing family, with great benefits to its customers. Embraer´s objective is to offer the best product and maintain its leadership in the 70 to 120 seat market.
Odds and Ends: Boeing stock buyback; Charging suppliers for doing business; AA+US
Boeing Stock Buyback: Boeing announced a stock buyback of #3.6bn for next year. Wells Fargo has this to say in a research note issued today:
Boeing had more than $11B of cash on the balance sheet at the end of September, and after free cash flow of $5.7B in 2013 and more than $7B in 2014 (i.e., almost $10/share in free cash), we believe Boeing could have over $20B in cash available to return to shareholders over the next few years. This is why we see about a $130MM increase in dividends and a $1.5-2.0B buyback in 2013 as small steps in returning cash to shareholders.
We’re not a fan of buybacks, which serve to prop up stock prices. We believe stock should rise on its own merits, not because of some artificial prop-up. More to the point, however, is that Boeing has a hard time telling SPEEA it needs to cut costs when it is spending billions on buybacks that benefit (among others) Boeing’s largest shareholders–the McDonnell family, Harry Stonecipher and Jim McNerney.
SPEEA is preparing for a strike February 1. Talks resume January 9, but the gulf between the two sides is so great, SPEEA expects them to break down almost immediately.
With Wells Fargo estimating that Boeing might return $20bn to shareholders in the next few years, we somehow think this will be an issue when IAM contract negotiations come up in 2016 and Boeing pleads poverty again (as it inevitably will).
We’d much rather see the money invested in new airplane programs rather than derivatives like the 737 MAX and 777X.
Boeing charges royalties to suppliers: Mary Kirby has this interesting story about Boeing charging suppliers for the price of doing business with the company.
American and US Airways: The Ft. Worth Star-Telegram has this column discussing the case for a merger between American Airlines and US Airways.
Pegasus Buys Airbus: Turkey’s Pegasus Airlines ordered 75 A320neo family and optioned 25 more. The carrier was previously a Boeing 737 operator. Deliveries are from 2015, which means the Pratt & Whitney GTF has to be the engine choice, which is as yet unannounced. CFM’s LEAP-1A won’t be ready until later in 2016.
Before this order, Airbus had a 61% market share of the re-engine order race vs the 737 MAX (firm orders only).
Photo Montage: The Everett Herald has this photo montage of the Flying Heritage Museum’s aircraft. The Museum is owned by Microsoft co-founder Paul Allen.
Freighter Market Softens: Cargo Facts has this analysis of the freighter market.
Odds and Ends: Picking up an A380; testing the 787; VLA backlogs
Picking up an A380: No, it’s not about lifting one. It’s taking delivery of one. CNN International Travel has this story about the delivery process. It’s not what you’d think would be your usual story from a travel section.
Testing the 787: Since we started off with delivery of an Airbus, let’s continue with testing about the 787 with this piece from All Things 787.
A380, 747-8 backlogs soften: Well, Aviation Week says they are under siege. We wouldn’t quite go that far, but the article is more balancedthan the headline.
A320 GTF testing begins: Aviation Week has this story.
A350 first flight ‘not easy’: Fox News has this story in which Airbus acknowledges the first flight of the A350 by mid-2013 won’t be easy. Airbus is trying very hard, though: there’s a lot of pressure to have the airplane at the Paris Air Show.
A320neo vs 737 MAX: This story has a good summary of the battle between the two giant OEMs.
Boeing wants to outsource more work to Mexico; updated MAX v NEO orders
Boeing outsourcing: In an election where outsourcing is a major political campaign issue, The Seattle Times reports Boeing wants to outsource more work to Mexico. Here is Boeing’s letter, via The Times.
MAX v NEO: Here is an excellent set of tables updating the orders between the 737 MAX and the A320 NEO. According to the analysis, Airbus right now has a 63% market share for the airframe. On the NEO, where two engines are offered, CFM has a 41% share vs PW’s 39% share with the remainder undecided.