Leeham News and Analysis
There's more to real news than a news release.
Pontifications: Embraer twice became focus of US trade commission complaints
By Scott Hamilton
Jan. 20, 2018, © Leeham Co.: The US aircraft manufacturer claims the foreign company is unfairly subsidized, undercutting pricing in US sales and threatening its future. A trade complaint is filed.
A prominent politician lines up on behalf of its constituent industries, claiming unfair competition. He calls for a trade investigation.
No, it’s not Boeing vs. Airbus.
It’s not even Boeing vs. Bombardier.
The complaints were against Embraer, twice.
Once in 1982 and again in 2010. In both cases, the US International Trade Commission was involved.
The rhetoric is remarkably consistent with the Boeing-Bombardier trade case.
In both Embraer cases, the ITC dismissed the complaints.
Its decision in the Bombardier case will take a preliminary vote next week, absent a schedule change, and a final decision will be issued Feb. 9.
Chinese and Russian Widebody Project takes shape
By Bjorn Fehrm
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Introduction
January 15, 2018, © Leeham Co.: The Chinese and Russian Widebody program started in earnest over the last year. After signing a joint venture agreement in 2016, the project now has a joint management company, CRAIC, formed 22nd of May 2017, and standing for China-Russia Commercial Aircraft International Corporation.
The company will have final assembly and management located in Shanghai. The aircraft has also got its final name, CR929-600. It will hold 280 passengers in a three-class cabin with a range of 6,500nm, Figure 1.
Figure 1. The CRAIC CR929-600, the main aircraft in the Chinese-Russian widebody program. Source: CRAIC.
Summary:
- The Chinese and Russian widebody program has taken off after the joint company was established spring 2017.
- The organization of the company is set, with the Chinese taking the rudder by the power of a five times larger market and economy and a 10 times larger population.
- The joint company, CRAIC, issued its first vendor RFP to GE and Rolls-Royce before Christmas for the aircraft’s propulsion system.
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It’s time to unwind, get healthy, eat right and avoid jet lag, says Airbus’ Leahy
John Leahy has been with Airbus 33 years, holding his current position as COO-Customers for more than 20 of these. He retires this month. Jan. 15’s 2017 year-end Orders and Deliveries press conference will be his last. LNC interviewed Leahy about his tenure at Airbus. Parts 1, 2 and 3 appear here, here and here. Today is Part 4. LNC’s Scott Hamilton has known Leahy for nearly 30 of these 33 years.
Jan. 12, 2018, © Leeham Co.: “I want to unwind, get healthy, eat right and not be in a constant state of jet lag. At 44, 45, I didn’t mind it. Right now, the thought of
The end of an era. Airbus President Fabrice Bregier (L) and COO Customers John Leahy. Bregier leaves Airbus next month after more than two decades. Leahy retires this month after more than three decades. Photo via Google images.
doing trips to Australia, I’d be jet lagged for three days.”
These are John Leahy’s plans for the first year after he retires in a matter of days after 33 years at Airbus.
When he was younger—that age 45 he referenced above—he thought nothing of working in Toulouse, Airbus headquarters, on Monday, getting on a plane to fly to Southeast Asia and Australia and be back in Toulouse to put in a full day on Friday—working the clock to make the long, long round trip.
“It was sort of fun,” he recalls. “I did a lot.” But not now.
Bjorn’s Corner: Aircraft drag reduction, Part 12
By Bjorn Fehrm
January 12, 2018, ©. Leeham Co: In the last Corner, we described how the theory for the boundary layer was proposed by Ludwig Prandtl, and how this led to an understanding of the source of Friction drag for an aircraft.
We will now continue with describing how the role of Friction drag was researched and how aircraft designers learned how to reduce it.
Figure 1. Sopwith Camel fighter of the WW 1. Source: Google images.
737-7 MAX future appears to be niche, BBJ and military
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Introduction
Jan. 11, 2018, © Leeham Co.: The decision last week by Southwest Airlines to defer for four years delivery of 23 of 30 Boeing 737-7 MAXes does not bode well for this sub-type.
Concurrently, Southwest exercised options for 40 of the larger 737-8.
One of only four identified customers for the 7 MAX, with the largest order of 30, LNC considers it highly likely that a good portion of the 23 remaining orders will be
Boeing 737-7.
converted to the 8 MAX.
With only 63 identified 7 MAX orders, the aircraft risks becoming a narrowly purchased niche aircraft.
Summary
- Despite Boeing claiming in a trade complaint the 737-7 has a good future if Bombardier’s C Series is subject to 292% in tariffs, the airplane seems destined to be no more than a niche airplane with airlines.
- The largest customer for the 7 MAX is up-gauging.
- The 7 MAX future appears to be with business jets and military transports.
Canada files WTO complaint vs US over Boeing C Series trade complaint
Jan. 10, 2018, © Leeham Co.: Canada upped the ante in the Boeing-Bombardier C Series trade complaint today by filing one of its own against the US with the World Trade Organization.
This filing comes on the eve of the US International Trade Commission (ITC) staff report, due Friday, on whether Boeing was “harmed” by Bombardier’s near-miss in
selling the CS100 to United Airlines and an order in 2016 by Delta Air Lines for 75+50 CS100s, with an option to covert some of the orders to the larger CS300.
- Canada’s complaint with the WTO is here: WTO Canada Filing 011018.
The US Commerce Department concluded Canada, the province of Quebec and the United Kingdom illegally subsidized the C Series program. Commerce also concluded BBD “dumped” the C Series in the US with the Delta order and attempted to do so with the United competition.
Commerce levied tariffs of about 292% for any C Series imported from Canada.
The Canadian complaint with the WTO challenges the DOC’s action and the pending decision, due next month, by the ITC. The move was expected, but generally thought would occur after the ITC ruled. ITC is expected to support Commerce’s conclusions.
Boeing says record 2017 deliveries will continue
By Bjorn Fehrm
January 09, 2018, ©. Leeham Co: Boeing announced record airliner deliveries for 2017 of 763 jets today, leading the industry for the 6th year running. Net orders of 912 aircraft gave a Book-to-Bill of 1.2. Airbus, which announces next week, is expected to have delivered 700 jets but to top Boeing for orders.
Randy Tinseth, Vice President Marketing for Boeing, expects the positive trend to continue. “The market was strong 2017 and we see no change for 2018. Our customers transported record passenger numbers, at record load factors and with record profits. We don’t see airliner demand weakening” said Tinseth in a call with media.
Boeing’s special needs in the next decade may be solved by Embraer
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Introduction
Jan. 8, 2018, © Leeham Co.: Key factors may play into the prospective business venture, however it’s defined, between Boeing and Embraer that have gotten little
notice.
Boeing’s need for engineering talent from Embraer has been touched on by many media, including LNC. But a detailed analysis hasn’t been forthcoming, that we’ve seen.
Not discussed yet is the fact that new airplane programs at Boeing and Embraer wind down in 2021-22, leaving both companies in danger of facing the next decade without new products at a time when competition will be emerging.
The lack of new airplane programs endangers the engineering talent pool. For Boeing, this is already going to be critical as more than 5,500 engineers and technicians reach age 65 in the next 10 years.
Boeing’s New Midmarket Airplane, if launched, will address part of the company’s new product requirement after 2020. On the other hand, Embraer has no new product, although officials have discussed potentially launching a turboprop program.
Summary
- Boeing’s 787 and 737 programs wind down this year and in 2020.
- Embraer’s EJet-E2 program winds down in 2021.
- Boeing faces talent drain as engineers and technicians age.
- Boeing NMA needs engineers and Embraer can supply them.
Pontifications: 2018 is a year of Transformations
By Scott Hamilton
Jan. 8, 2018, © Leeham Co.: This is going to be a year of transformations.
This might be viewed with puzzlement by some. After all, only minor-modification models will be entering service this year: the Airbus A350-1000, the Boeing 737-9, the Airbus A319neo and the Boeing 787-10. The first flight of the 737-7 should occur.
Flight testing continues for the Mitsubishi MRJ90, the COMAC C919 and Irkut MC-21.
The proposed deal between Airbus and Bombardier should receive government approvals this year. Talks between Boeing and Embraer may or may not result in a combination of some kind.
The Big Deal, however, resides in Everett (WA).
Bjorn’s Corner: Aircraft drag reduction, Part 11
By Bjorn Fehrm
January 05, 2018, ©. Leeham Co: In the last Corner we described a dominant drag component affecting the Wright Brothers’ Flyer, Form drag. The many wires and braces on the Flyer created separations and a high Form drag was the result.
At the time, Langley and others thought friction drag could be neglected. Now we describe how it was discovered one couldn’t and how it gradually made its way to the top of the drag contributors.
Figure 1. The Supermarine Spitfire with its elliptical lift distribution wing. Source: Google images.