Leeham News and Analysis
There's more to real news than a news release.
Odds and Ends: Three drivers for Bombardier; PW GTF gains momentum
1. JP Morgan looks at Bombardier
Aerospace analyst Joe Nadol has an interesting take on Bombardier and the next 12 months. Nadol begins with, “We believe Bombardier may be better positioned now than at any time in the 10+ years we’ve followed the stock,” and continues:
Three Important BBD Drivers: 1) CSeries, 2) CSeries, 3) CSeries. With the business jet and train businesses both poised for solid earnings growth, the CSeries is now clearly set as the key likely driver of the stock. There are two primary issues here. The first is demand, and we believe the program needs to start racking up more orders this year, even by the Paris Air Show in June. We believe there is a high level of interest, and we are fairly confident Bombardier will sell more aircraft. The partnership with Comac that Bombardier announced last week seems to foreshadow meaningful Chinese orders. Bombardier also has nearly $12 bil in financing for CSeries aircraft available from Chinese sources. The second issue is execution. Management noted that Bombardier still expects to fly the aircraft next year and also highlighted some recently achieved milestones for the engine. However, Flight reported in recent weeks that the date for first flight may have slipped by a few months into next fall, so the program does appear to be experiencing at least the normal level of fits and starts. Thus far, the CSeries appears on track overall, but execution obviously remains a major overhang given the complexity of the program and the well-known problems the industry has had meeting cost and schedule targets in recent years.
Indigo selected PW GTF for NEO
Indigo Airlines of India selected the PW P1000G Geared Turbo Fan for its order of 150 Airbus A320neos.
We’re at the PW Media Day and will be filing additional reports today. Up to this point, most of the activities have been associated with military and space programs, which we don’t follow closely.
We did confirm that PW is providing the PW 4000 for the KC-46A tanker. There had been some minor speculation that the secretive Boeing bid might have included plans for a 767-sized GTF; this isn’t the case.
Rolls-Royce, PW may be feuding but extend IAE to 2045
The feud between Rolls-Royce and Pratt & Whitney over patent infringements is nasty and in court, and the Rolls-Royce view that it doesn’t think much of the PW Geared Turbo Fan technology is well known, but speculation that this would lead to the dissolution of International Aero Engines in which both are partners can now be put to rest.
Odds and Ends: Boeing to compete production site for new 737-class airplane
Odds and Ends begins below the photo.
We’re not big on photos but every once in a while we find one that we’ve very impressed with–like this (via Airliners.net) at LAX:
Odds and Ends: 777 future may slip to 2020 decade
Update, Feb. 2: Flight Global has this very good analysis about the WTO fight between Airbus and Boeing.
Original Post:
In this issue of Odds and Ends, we talk about the 777, a CNN interview with Jim Albaugh and a variety of other things.
- The future of the 777 may slip to the next decade, according to information. Boeing believes the A350-1000 will become a new airplane rather than a derivative of the baseline A350, delaying entry-into-service until late this decade. Accordingly, a move to enhance or replace the 777 currently is being thought as a project for the early 2020 decade.
- Boeing seems increasingly likely to go with a replacement for the 737 with a 2019 EIS.
- Boeing Commercial Airplanes CEO Jim Albaugh gives a short video interview with CNN in which he returns to his recurring theme that Boeing “over-stretched” on the 787. He talks about some of the reasons, and he is candid about the shortfalls over its pushing technology, the shortage of engineers and other issues. Read more
Odds and ends: More Airbus NEO orders soon, engine selections shortly; tanker slips again
Odds and ends:
- More Airbus NEO orders are likely within the next few weeks, including from the US and Asia;
- Indigo is expected to make its engine selection for its A320neo within the next month or so, and it’s a real competition between GE/CFM and PW for the LEAP-X and Geared Turbo Fan;
- A major German bank may shun financing the A320neo, according to Bloomberg;
- Boeing is now saying there is only a 2%-3% direct operating cost difference between the 737NG enhanced model and the A320neo, a gap Boeing figures it can close by the time NEO enters service in 2016;
- Boeing thinks the A350-1000 will require enough changes compared with the -800/900 models that the -1000 will slip to 2019 EIS; Read more