Leeham News and Analysis
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Countdown to decision on Boeing’s NMA, Part 3: Engine selection
By Dan Catchpole
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Introduction
January 21 2019, © Leeham News: Boeing number crunchers are feverishly working through engine bids from Rolls-Royce, Pratt & Whitney and CFM International, the partnership of Safran and General Electric (GE), the three competitors vying to power Boeing’s New Midmarket Airplane (NMA). Boeing is expected to ask for a best and final offer by the end of January, with engine selection planned in February.
That gives Boeing enough time to get authority to offer from the board of directors, likely in March or April, and to launch the NMA (likely as the 797) at the Paris Air 
Show in June.
Boeing faces big challenges in closing the business case, though. The process has slogged on far longer than company leaders had expected. Even so, Boeing executives’ relentless optimism about the NMA business case stands in sharp contrast to the skepticism of many industry insiders. At least two of the engine makers, for example, think market demand is about half of Boeing’s public forecast.
Each of the three engine makers vying to get on the NMA have some significant liability. The industry insiders and analysts interviewed for this article say is the decision really comes down to Pratt and CFM. Given the pressures on NMA business case, many see a scaled-up CFM Leap as the front runner. It offers the least risk, even if it also has the least upside.
Summary:
- CFM: The LEAP has performed well since going into service, but GE’s financial troubles could weigh down its bid.
- Pratt & Whitney: PW’s GTF is a great fit for NMA requirements, but the engine maker has a full plate with the GTF on five new airplane programs.
- Rolls-Royce: The NMA would be an opportunity to launch Rolls’ UltraFan, but does Boeing want to bet on a completely new engine?
Airbus new A220 is more of a match for the A320neo than Airbus says
By Bjorn Fehrm
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Introduction
January 17, 2019, © Leeham News: It’s all about the new Airbus A220 on the North America press tour Airbus is hosting this week. Airbus got this top modern aircraft as a windfall after Boeing tried to block its sale on the US Market in 2017.
While the tour presents the A220 in the best of lights, it can’t shine brighter than Airbus’ own A320neo. The graph from the tour which positions them in capacity and range shows a clear little brother-large brother relationship. The reality, when comparing apples to apples, is another.
Figure 1. Airbus payload-range chart with the new A220-100 and -300 placed as shorter ranged than the A320neo and A321neo.
Summary:
- The ideal positioning of the A220 and A320 is when the larger models are higher in capacity and flies further. They cost more and shall, therefore, be better.
- But the comparison is not made with the same yardsticks. Use the same rules and the result is another.
- The more modern A220-300 can then give the A320neo a match both in range and fuel consumption per passenger.
Airbus poised to out-deliver Boeing in 2019
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- LNC’s Corporate and Enterprise subscribers received this Jan. 3.
Jan. 8, 2019, © Leeham News: Airbus is positioned to out-deliver Boeing this year, boosted by the addition of the Bombardier CSeries acquisition last year.
LNC projects that Airbus will deliver nearly 950 airliners this compared, compared with Boeing’s projected deliveries of about 890 jets.
These are LNC forecasts, not those of the manufacturers. Guidance for the year should come on their respective year-end earnings calls: February for Airbus and Jan. 30 for Boeing.
2019 Outlook: A critical year for Mitsubishi’s MRJ regional jet
By Bjorn Fehrm
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Introduction
January 8, 2019, © Leeham News.: Mitsubishi Aircraft’s MRJ should originally have entered service 2013. Now the plan is 2020, a record seven years of delay. But 2020 can be the last delay. On December 21, the program got “Type Inspection Authorization” from its Certification office, the JCAB (Japan’s Civil Aviation Bureau).
The brunt of Certification flying should be finished in 2019. Then follows the paperwork and the preparation for service entry with ANA. The year will be critical for how the MRJ project will enter service and ramp serial production.
Summary:
- The MRJ has seen more delayed years than its original schedule. But the last declared delay might be the final one.
- The project got a declaration of health just before Christmas. Its oversight authority, JDAC, supported by the FAA, said it was ready to start Certification flights with the aircraft.
- It’s now for Mitsubishi to succeed with these flight so ANA can get the first aircraft by 2020.
- Work on capacity improvements for the smaller variant, the MRJ70, is also ongoing to make it more suitable for the US Scope Clause market.
2019 Outlook: ATR begins year in commanding position
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Introduction
Jan. 7, 2019, © Leeham News: ATR, the turboprop airliner OEM, enters 2019 in a commanding position.
Year-end 2018 order numbers for ATR and rival Bombardier aren’t in yet.
Through October, ATR held 74% of the backlog. Bombardier, buoyed by a large order for 25 Q400s from India’s SpiceJet (the 2027 deliveries in the Chart below), had 26% of the backlog.
Bombardier contracted to sell its Q400 program to Longview Capital Partners, parent of Viking Air. The Canadian company previously purchased all legacy de Havilland programs, including the Beaver, Twin Otter and aerial firefighting aircraft.
Viking restarted production of the Twin Otter and is gearing up to restart the Beaver.
Its plans for the Q400, Q300 and previous Dash 8 programs hasn’t been announced.
Summary
- Bombardier neglected the Q400.
- Small market over 20 years.
- ATR would like new program.
2019 Outlook: COMAC’s slow but steady progress
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Introduction
Jan. 4, 2019, © Leeham News: This is not the year where China’s COMAC will have break-out progress for the C919, its challenge to the Airbus A320 and Boeing 737.
Flight testing is slow and entry into service (EIS) is now targeted for 2021—a slip of five years from the original schedule.
The C919 launch-to-EIS is approaching the eight years record of the ARJ21.
But these delays don’t mean COMAC isn’t making progress.
Summary
- Boeing’s JV with COMAC for a 737 completion center opened last month.
- Despite delays, the C919 progresses.
- Progress continues on the JV with Russia for the CR929.
2019 Outlook: Irkut leads Russia’s airliner industry
By Bjorn Fehrm
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Introduction
January 3, 2019, © Leeham News.: The last year was a quiet year for the airliner side of Irkut Corporation (Irkut). It continued testing its two MC-21 single-aisle airliners and rolled out the third test aircraft.
Behind the scenes, there were larger changes. Irkut was handed the shares of Sukhoi Civil Aircraft Company (SCAC), the designer and producer of the Superjet 100. The move is part of merging the Russian airliner industry into one company.
During 2018, United Aircraft Corporation (UAC), the parent of Irkut and SCAC, started the consolidation by moving all new airliner projects to Irkut, including the CR929 widebody project with China. The consolidation will continue 2019.
Summary:
- Consolidating the disparate airliner projects within UAC makes sense. The competition is International, not Irkut versus Sukhoi, Tupolev or Ilyushin.
- Will this improve the checkered fortunes of Russian airliner business? It’s the right move to get away from 70 years of Soviet isolation and rules of business. But it’s not the last change; more is needed.
- The coming year will be crucial for the SSJ100 to find its model for how to support Western airlines. Interjet went half OK but CityJet didn’t. Will Adria be better?
- It’s also an important flight test year for MC-21, which needs to pick up speed to certificate in 2020.
- The CR929 widebody is now an Irkut project. Will the change improve the chance of keeping the time plan?
2019 Outlook: A pivotal year for Embraer
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Introduction
Embraer E190 2.
Dec. 28, 2018, © Leeham News: If it cannot be said that 2019 will be a pivotal year for Boeing, this is not the case from Embraer.
It will indeed be a pivotal year.
Embraer Commercial Aviation is to become part of a new joint venture with Boeing.
This leaves some of Embraer’s military and all of its business aviation business remaining.
EMB’s KC-390 program will move to a second joint venture in which EMB owns 51% and Boeing owns 49%.
Summary
- Year-to-date Embraer sales, financials were below expectations.
- E175-E2 has no firm orders and the conditional sale has been removed from the backlog due to international accounting standards.
- Customer service follows Embraer Commercial Aviation.
2019 Outlook: Will Bombardier exit Commercial aircraft?
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Introduction
December 27, 2018, © Leeham News.: In July the CSeries changed from Bombardier to Airbus and in November the Q400 program was sold to Viking Air, the buyer of de Havilland Canada aircraft from Bombardier like the Twin Otter and the water bomber CL415.
When the Viking Air deal closes in the second half of 2019, only the CRJ regional jet will make up Bombardier Commercial Aircraft. Will the CRJ stay with Bombardier or go? And if so, why?
Summary:
- With other divisions increasing revenues amid healthy margins, the loss-making Commercial Aircraft’s time was up. It’s future hope, the CSeries, was digging an ever deeper cost hole with each delay. Only a market success could save it.
- The Boeing trade complaint in April 2017 made a success far-fetched, sealing the fate not only for the CSeries but for the Commercial Aircraft division.
- With the CSeries at Airbus and Q400 at Viking Air, why keep the CRJ? It makes no sense. The CRJ is presently dressed for sale. Now it’s more a question to whom and when.
2019 Outlook: Boeing’s decision on NMA is the headline to watch
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Introduction
Dec. 21, 2018, © Leeham News: It is a stretch to say 2019 is a pivotal year for Boeing.
There would have to be events of tsunami proportions to be pivotal for a company with revenues of more than $90bn.
But there is no doubt 2019 will be a very important year for Boeing.
Summary
- The headline to watch will be the widely anticipated launch of the New Midmarket Aircraft, also called the 797.
- The 777X begins flight testing next year. Sales are stalled for the newest airplane of the Boeing family.
- The proposed new joint venture between Boeing and Embraer is expected to be consummated by the end of the year.