Engine OEMs diverge on technology for next generation

March 7, 2017, © Leeham Co.: Representatives of the four major commercial engine

GE9X, the final engine in a decade-long engine renewal program for GE Aviation and CFM International

manufacturers have divergent views of the next round of engine development, either for the Middle of the Market/New Mid-range Airplane (NMA) or New Small Airplanes (NSA) coming in the next decade.

Officials of CFM, GE, Pratt & Whitney and Rolls-Royce appeared at the annual ISTAT conference in San Diego yesterday.

PW’s Rick Deurloo, SVP of Sales, Marketing Commercial Engines, had the added task of dealing with the highly-publicized teething issues surrounding its new Geared Turbo Fan engine on the Airbus A320neo.

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Boeing soft launch for 737 MAX 10

Boeing 737 MAX 8. The MAX 10 is a double-stretch of this baseline aircraft.

March 6, 2017, © Leeham Co.: Boeing effectively did a soft launch today of the 737-10 MAX at the ISTAT Americas conference in San Diego.

Randy Tinseth, VP-Marketing, revealed basic specifications for the MAX 10, the first time Boeing has done so in a public forum.

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Boeing Services expansion wise, necessary move

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Introduction

March 6, 2017, © Leeham Co.: Boeing CEO Dennis Muilenburg wants the company to participate in the aftermarket aircraft services business and set a goal of $50bn in revenue in the coming years.

He looks at Boeing’s current business, the former Boeing Commercial Aviation Services (CAS), and sees a single-digit market share in a worldwide trillion-dollar market potential. Muilenburg understandably wants a greater share of this.

But LNC believes there is an additional driver: the intensely competitive commercial airliner business faces even greater competition in the coming years. Prices are under pressure today. China is developing its own aerospace industry, which will eat into sales by Boeing (and Airbus) in the home market. Russia has ambitions to renew its home-market airliner industry.

Boeing’s new Global Services unit is a hedge against the prospect of falling profits at Boeing Commercial Airplanes as these factors converge.

Summary
  • Airbus, Boeing single-aisle prices under pressure.
  • A330/350 keeps 787 pricing down.
  • Boeing’s NMA business case may depend on after-delivery services contracts.

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Pontifications: Boeing 737-9 roll-out–Nothing Special in the Air

By Scott Hamilton

March 6, 2017, © Leeham Co.: Boeing rolls out its 737-9 MAX tomorrow.

Last week, I received a call from one of the network/cable news organizations asking, What’s special about this airplane?

The answer is: Nothing.

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Bjorn’s Corner: Aircraft engine maintenance, Part 1

By Bjorn Fehrm

March 3, 2017, ©. Leeham Co: We will now go through how airline turbofans are maintained. First, we will describe the typical work which is performed, then look into the markets for engine maintenance.

In the markets for engine maintenance, we will look at who the players are, how they are related to the engine OEMs and why the market dynamics are very different between engines for single-aisle aircraft and wide-bodies.

Figure 1. Principal picture of a direct drive turbofan. Source: GasTurb.

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Long-haul cost differences

By Bjorn Fehrm

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Introduction

March 2, 2017, © Leeham Co.: The single-aisle, long-haul operations are on the increase. The new re-engined Airbus A320neo and Boeing 737 MAX generations are good for destinations of up to 3,000 nm, after taking into account reserves, winds and alternates planning. The Airbus A321LR is good for up to 3,500nm sectors.

Last week, we showed the Bombardier CS300 is joining the crop of single-aisles capable of 3,000nm city pairs, the distance between London and New York.

We also wrote the cost level of the single-aisle aircraft is competitive with the next step up dual-aisle, the Boeing 787 and Airbus A330neo.

But how do the different cost areas pan out? Is fuel cheaper or more expensive for the dual-aisle? What about the single-aisle crew costs? For clarity, we engage our cost model.

Summary
  • The total costs are similar per seat mile for single and dual aisle, but the parts are not.
  • The fuel costs per seat are surprisingly similar; the differences are to find in other places.

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AirAsia X; the long route to profitability

By Bjorn Fehrm

March 1, 2017, ©. Leeham Co: AirAsia X, the long haul sister of Tony Fernandes’ AirAsia, finally turned a profit during 2016. The airline, which started operation in 2007, had a bumpy ride from the start.

Initial operations were when fuel prices was at the highest, and the aircraft chosen, the Airbus A330-200 and A340-300, weren’t the most economical.

After scaling back operations in 2012 and focusing the fleet on the more economical A330-300, the business gradually turned. The low fuel prices of 2015-2016 finally brought the airline profitability for the last fiscal year. Read more

Assessing ATR future

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Introductions

Feb. 27, 2017, © Leeham Co.: ATR today holds an almost monopolistic position in the large turbo-prop market with 87% of the backlog at YE2016. Bombardier, once the dominant turbo-prop manufacturer, has a mere 13%.

China and Russia are not included above.

ATR had a backlog of 212 aircraft vs Bombardier’s 31. In addition, ATR had options for more than 400 aircraft and LOIs for about 70 more. BBD had options for just 12 Q400s at the end of last year.

Summary
  • Low fuel prices favor regional jet, high fuel prices turbo-props.
  • No new, clean-sheet design to replace Q400 or ATR in foreseeable future.
  • Indian, Indonesia talk turbo-props but outcome unlikely.
  • China’s MA-60 feeds home market, but airplane has reliability issues.

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Pontifications: Boeing 777 production rates

By Scott Hamilton

Feb. 27, 2017, © Leeham Co.: When Boeing announced it will reduce 777 production to 5/mo, with actual deliveries of the 777 Classic to 3.5/mo beginning in 2018, the aerospace analyst at Goldman Sachs immediately concluded Boeing will have to reduce the rate to 2-2.5/mo.

Since then, and other analysts (whether publicly or privately) reached a similar conclusion.

On the 4Q/YE2016 earnings call in January and again last week at a Barclays conference, company executives said 90% of the positions in 2018 and 2019 are sold.

Shortly after the Barclays conference ended, one analyst called me to challenge the assertion by Greg Smith, Boeing’s CFO, about 2019. By his assessment, the analyst could only get to 60% in 2019. Did I see anything differently?

59% or 74%, but not 90%

At that point, I hadn’t looked. When I did later, I got to 59% based on firm orders. I could get to 74%, giving Boeing every benefit. But I couldn’t get to 90%.

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Bjorn’s Corner: Aircraft engines in operation, Part 6

By Bjorn Fehrm

February 24, 2017, ©. Leeham Co: After having analyzed how the engine gets stressed during different phases of flight, we now look into how engines are used. The de-rating of engines for takeoff is important, as not 100% thrust is needed for all takeoffs. If the aircraft is lightly loaded or is taking off from a long runway, with low temperatures or altitude, the engine can be thrust de-rated so that it experiences less stress.

Once in the air, the engine is run below maximum settings by use of cost-index. These actions will result in less fuel usage and also longer engine operation between overhauls. We will now finish the operations part of our engine clinic with how airlines keep the engines away from the workshops by swapping the engines between fleet aircraft.

Figure 1. Principal picture of a direct drive turbofan. Source: GasTurb.

A visit to the engine workshop costs in the millions of dollars, so the longer the engine can operate before a shop visit, the better. Read more