Trip report: flying the A350 to Airbus Group annual press conference

By Bjorn Fehrm

Introduction

Feb. 26, 2015: As part of the invitation to cover Airbus group press conference in Munich on Feb. 27 where the annual results are presented, Airbus offered the journalists joining from South of France to fly there in one of the A350 test aircraft, the cabin test specimen MSN002. They did not have to ask twice, Figure 1.

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Figure 1. Media entering MSN002 at Airbus flight test center in Toulouse. Source: Leeham Co.

The flight was done as a combined transportation of media from Toulouse and Paris to Munich and test flight for the cabin area. It was also the first time A350 landed on Charles De Gaulle (CDG) and Munich airports, which added to the excitement. The aircraft still carried full test equipment and there were measurement probes on windows and different parts of the cabin.

The crew was the normal test crew reinforced with Airbus cabin personnel who cared for the attending journalists. The advantage of this was there was plenty of time to talk to the test engineers and pilots both in flight and while waiting for joining media at CDG. Here the story of the development workday for test people where the actual aircraft has just entered service with the first customer. But first how it was to fly: Read more

Odds and Ends: CS300 first flight delayed; PW GTF; Boeing enters MidEast fray

Baby, it’s cold out there! Bombardier delayed the first flight of its CSeries due to the cold. Click on image to enlarge. Source: Sylvain Faust.

CS300 first flight delayed: When Bombardier says it’s too cold for the CS300 first flight, you know it’s cold up in Montreal. It’s -21C at Mirabel (-6F) and partly cloudy, but that was too cold for the guests, according to our man on the scene, Sylvain Faust. Canadians know how to dress for this cold but visitors don’t. A rescheduled time hasn’t been definitively announced.

Bombardier doesn’t have an open-faced tent and outdoor heaters set up, according to Faust.

PW GTF: Flight Global has a report about Pratt & Whitney’s “new aggressiveness” in competing with CFM International in the battle of the Pure Power Geared Turbo Fan vs the LEAP-1A. These engines power the Airbus A320neo family.

Boeing enters MidEast fray: American, Delta and United airlines want Open Skies revisited in order to curb competition by the Big Three Middle Eastern carriers. Boeing, FedEx and JetBlue, have entered the fray, opposing any such action. Here is the story.

787-3, “737-10” no replacement for 757

Feb. 25, 2015. c. Leeham Co. When Boeing CEO Jim McNerney last year suggested that a replacement for the 757 could be based on the 787 or the 737 MAX, the statement conjured up visions of resurrecting the 787-3 (the short-range version of the 787-8) or further developing the 737-9 into a larger “737-10.”

We were skeptical then and remain so now.

The idea of a 787-3 resurfacing into a 4,500nm airplane to replace the 757 is a dog that just won’t hunt. As Nico Buchholz, the fleet manager for Lufthansa Group, told us, the 787-3 is just “too much airplane.”

We couldn’t agree more, and the idea of a “787 Lite” is a simplistic suggestion that doesn’t fully think through all the issues.

Read more

Redefining the 757 replacement: Requirement for the 225/5000 Sector

By Bjorn Fehrm

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Introduction

25 Feb 2015: Speculation continues to ramp up during the last weeks and months about what Boeing is up to in the 180 to 250 seat sector and what might be Airbus’ response on top of the A321LR. The segment is not well covered today within production aircraft where 737-900ER and the forthcoming MAX 9 cover up to 210 seats and A321-200 and A321neo up to 220 seats. Both fly their passengers up to a realistic mission of 3000nm, i.e. transcontinental USA.

The next in production aircraft are 787-8 and A330-200 at 240 to 280 seats. These are  long range dual aisle aircraft with empty weights more than double of the former pair. The 787-8 and A330-200 per seat economics on shorter missions are therefore in another ball game.

The only aircraft that currently bridges this gap is the out-of-production Boeing 757 and there has been much debate how this shall be replaced. We have covered this question in a number or articles focusing on in turn:

We also covered the study work underway at Boeing to cover this segment. We will now dig deeper into this corner after Boeing has unequivocally stated it does not see a re-engine 757 covering this segment and any aircraft that the airlines want should be a bit larger than the 757.

Summary:

Over a series of articles we will cover:

  • The market segment and how it is covered today and tomorrow with existing our announced designs
  • What are design parameters that decide whether you go single or dual aisle?
  • 180 to 250 seats and 3000 to 5000nm, will it be covered by single or dual aisle or both? What’s the economics of these alternatives?

Read more

CS300 first flight Wednesday, direct challenge to 737-7 and A319neo

Feb. 25, 2015, c. Leeham Co. Bombardier’s direct challenge to the Big Two duopoly in the 125-149 seat sector is scheduled for its first flight Wednesday, weather and gremlins permitting.

CS300

Bombardier photo.

The CS300, challenger to the A319neo and 737-7, is to take to the skies as Bombardier’s flight testing program enters the final stretch. BBD still claims it will deliver the first CS100 by the end of this year, though most analysts (and we) believe it will slip into 1Q next year.

The CS300, 135 seats in two classes and 149 in standard one class, matches the 31-inch pitch configurations of the “baby” Airbus and Boeing products.

Bombardier claims large operating economic advantages over these competitors. Our analysis shows economics probably a bit closer than Bombardier would like.

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Order cycle may have peaked for mainline single-aisles, but smaller jet cycle booming

Feb 24, 2015: The mainline jet orders get the headlines, and the focus on the order cycle, but the smaller jets have yet to see their order cycle peak.

Goldman Sachs downgraded Boeing to a Sell this week, in part on the theory that orders for the single-aisle, mainline jets have peaked and an oversupply is developing in its competition with Airbus.

The oversupply—if it develops—will only get worse as Airbus and Boeing ramp up production. Airbus has announced plans to take A320 family production to 46/yr next year. It’s notified the supply chain to be ready to go to 54/mo in 2018.

Boeing has announced plans to go to a firm rate of 52 737s per month in 2018. It’s considering 58/mo in 2019 and 63/mo in 2020, according to supply chain sources. We expect Airbus to match.

Given the long backlogs for mainline jets, out to 2020 and even beyond, it’s natural to conclude the order cycle has peaked for the time being. At the Pacific Northwest Aerospace Alliance conference Feb. 11 in Lynnwood (WA), Boeing’s VP Marketing Randy Tinseth said the company sees the need for 4,000 more orders for the A320/737 class in the next five years. This averages 800 per year, or about 440 per year for the A320 and 360/yr for the 737 at the recent split of 55%/45% for the two airplanes. This is down dramatically from recent order history and well below the book:bill of the production rates.

If the mainline order cycle has peaked, it’s a different story for the smaller jets in the 70-130 seat sectors.

Read more

Odds and Ends: WTO and 777X tax breaks; US airlines vs Middle East; Goldman and Boeing; ExIm Bank

WTO to examine 777X tax breaks: Well, we predicted this in November 2013 when Washington State extended the Boeing 787 tax breaks to the 777X. And it’s happened. The World Trade Organization is going to take a look at that action. The 787 tax breaks were found by the WTO to be illegal. Washington didn’t change anything when it extended the tax breaks to the 777X.

US carriers vs Middle East airlines: Pretty much anyone who follows airlines has read about the war of words and politics between American, Delta and United airlines on the one hand and Emirates, Qatar and Etihad airlines on the other.

The blog Boarding Area has done perhaps the best independent analysis we’ve seen on the topic. You can find it here.

Goldman puts a Sell on Boeing: Goldman Sachs became the second firm to put a Sell rating on Boeing (after boutique Buckingham Research last year). Goldman believes the industry has had a strong run up and is now beginning to enter a period of over-supply, so it’s time to sell.

ExIm may get renewed: Maybe some Republicans are coming to their senses: there is a move in the House, controlled by the GOP, to renew the ExIm Bank for five years. The Tea Party still objects, calling it corporate welfare (mainly for Boeing), but as we’ve written many times, this is about global competition and domestic jobs. Boeing is able to sell airplanes to airlines that need help (although some deals are dubious to carriers that don’t seem to need it), which creates jobs putting these airplanes together and building all the parts for them. If ExIm was not reauthorized, Airbus would have a clear advantage. Let’s hope the more sane Republicans prevail

 

Boeing’s dedicated freighters views an improving market

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By Scott Hamilton and Bjorn Fehrm

Introduction

Feb. 22, 2015: An improving global freight market gives Boeing hope that air cargo demand will support the production of two new main-deck freighters a month for years to come. Boeing is struggling to sell 747-8Fs to keep the 747 line alive and needs to sell the 777F to support its goal of maintaining the current 777 production rate of 100/yr through the transition in 2020 to the new 777X.

Randy Tinseth, VP Marketing for Boeing included the projection as a passing reference in remarks Feb. 11 to the 14th Annual Conference of the Pacific Northwest Aerospace Alliance in Lynnwood (WA). The following week we spoke at length with Tom Crabtree, Boeing’s Regional Director, Airline Market Analysis, Marketing & Business Development, about the long-suffering global cargo market and Boeing’s forecast for recovery.

Summary

  • Increasing reliance on belly capacity doesn’t negate need for large main deck freighters, Boeing says.
  • Boeing sees need for two new-build, large freighters per month.
  • Accepting Boeing’s demand forecast, Leeham Co. sees another production rate cut for the 747-8.

Read more

Is next airliner a single or dual aisle?

By Bjorn Fehrm

19 Feb 2015: There has been much speculation over the last weeks and months what Boeing is up to in the segment 200 to 250 seats, also know as the “757 replacement market“. The speculations over Airbus response are also vivid. One of the reasons is that apart from this segment the landscape of which civil airliners will be produced over the next 10-15 years is pretty much settled; Cseries is on final stretch of development, A320neo is flying while 737 MAX flies next year. A330neo will fly 2017 as will 787-10. A350-1000 start testing in 2016 with deliveries in 2017 and 777-9X flies 2019 with deliveries 2020.

Apart from an announcement by Russia and China that they will design a 250-280 seat widebody there is only the “757 replacement” segment which can result in a clean sheet approach from the major OEMs. Around this questions has arisen a lot of speculation about possible short and long term solutions. Having done a lot of checking of these alternatives with our proprietary model, we have learned that:

  • The 757 has an attractive capacity but is around 25% less efficient than the new generation of single aisle, A321neo or 737 MAX9, on the routes they can fly.
  • Airbus could stretch the A321 into something we called A321neoLR and indeed Airbus was working on it, it is now in the market as A321LR.
  • While 737 MAX9 limitations prohibited a response from Boeing we compared Airbus A321neoLR to what Boeing might come up with in their clean sheet design studies NSA (New Single Aisle) and NLT (New Light Twin)
  • Subsequently a 757 MAX was proposed but Boeing immediately declared that it does not work for them and we explained why.
  • Based on Boeing’s statement that the market is looking for something “a little larger than a 757” we looked into a 767 MAX with 767-200 as the airframe (it would be readily available from the KC-46 program) with GEnx-2B engines (from 747-8, they would fit). Once again it does not pass the first check, efficiency would not be much better than 757.

Read more

Odds and Ends: Turkish tests A380; Boeing’s cash out; A400M milestone before Airbus Group results

18 Feb 2015: Turkish Airlines is contemplating testing A380 operations according to Blomberg by wet leasing two A380 from Malaysian Airlines. Turkish did the same when they tested the Boeing 777 before ordering it, then by wet leasing 777 from Jet Airways.

The deal would be good for both Turkish Airlines which could test the A380 to see if there is sufficient demand on their densest routes and for Malaysian Airlines as recent disasters has meant they no longer need the capacity of their six A380.

Probable destinations for Turkish would be London Heathrow and JFK. The two aircraft would be operated by Malaysian Airlines pilots and Malaysian would also furnish half the cabin crew during the first six months, the other half coming from Turkish. After the initial period there would be a dry lease phase where Turkish would continue with own crews. A third backup aircraft should be part of the deal.

Boeings CEO, Jim McNerney, has told investors at a Barclay’s investor conference that Boeing can use of to 80% of its free cash flow to pay back to investors without endangering planned R&D projects reports Reuters. Partly this comes from being able to keep the 777 production rates at around the current 100 aircraft per year in the bridge to the 777X. To entice airlines to continue buying the present 777, Boeing is working on improvements to the aircraft that will increase the efficiency by 2 %,  half of which will be coming from improved GE90 engines and half from airframe changes.

McNerney further said the higher than expected deferred 787 productions costs were due to investments in production methods and the labor costs not coming down as expected. He also commented on the work on a new aircraft for the market between the present 737 and 787, “the 757 market” where he said the only thing which is clear is that the airlines want a slightly larger aircraft and we don’t see the market needing a solution in the near to mid term.

Airbus Groups results will be announced in a press conference from Munich Friday next week and their Military aircraft division is working on the outstanding improvements they owe A440M customers. Timely before the press conference they have now demonstrated the A400M working as a combined logistical transporter and tanker. In a series of rendezvous over four flights they transferred a total of 27 tonnes of fuel to two Spanish Air Force F18.

A400M refuels F18

A400M filling up two F18 with fuel. Source: Airbus.

From the press release: “With a basic fuel capacity of 50.8 tonnes which can be increased by the use of extra cargo hold tanks, the A400M is the most capable tactical tanker in the market. The standard A400M aircraft has full provisions for air-to-air refuelling (AAR) operations already installed and only requires the rapid installation of the optional air-to-air refuelling kit to become a tanker.”

Our article shows that this is but one of the capabilities that should have been in delivered aircraft by now, Airbus is expected to announce further provisions for A400M development at the event.