Note: The CSeries resumed airborne flight tests Sept. 7.
The announcement two weeks ago by Sweden’s Malmo Aviation that it won’t be the first operator of Bombardier’s CSeries is an unneeded image hit for the program, but not one we’re particularly concerned about. We think there are other early operators who potentially raise more concern.
Malmo was scheduled to receive its first CS100 in the second half of next year. The program’s entry-into-service will possibly slip into 1Q2016 as a result of the May 29 engine failure with a Pratt & Whitney P1000G on CS100 Flight Test Vehicle 1. Engines are being redelivered and we expect the first of the FTVs to return to the air very soon.
Posted on September 7, 2014 by Scott Hamilton
When we did our analysis of the A330neo after the Farnborough launch we limited our checks to trip fuel efficiency as we did not have enough clarity of the cabin improvements that Airbus announced. After a meeting in Toulouse last week with Airbus cabin experts we know have the missing information.
Airbus gives the A330 cabin an interesting update for the A330neo. It comprises A330 ideas (improved crew rests), A350 ideas (improved lighting and IFE) and finally ideas tried out on the A320 (SpaceFlex and SmartLav lavatories). Combined they give the A330neo cabin a better passenger experience and improved utilization of cabin space. Read more
Posted on September 6, 2014 by Bjorn Fehrm
This weekend we’re heading to San Francisco in style–1930s style. We will be on the Historic Flight Foundation’s Douglas DC-3 from Everett Paine Field to SFO for a reunion of the China National Aviation Corp., CNAC, including a 100-year old veteran of the airline.
We’ll be on HFF’s DC-3, the only surviving CNAC plane, which is today painted in the colors of Pan American World Airways from the era. PAA owned a piece of CNAC before World War II.
This Douglas DC-3, owned by the Historic Flight Foundation, was operated at one time by China’s CNAC and later as an executive aircraft. It still has the executive interior and panoramic windows of the executive configuration. Photo by Gail Twelves.
The plane eventually became an executive transport and the executive interior is still in it.
The flight will be about four hours each way. This will be the third time we’ve taken a ride on the aircraft, and this will be the longest. Previous rides were an hour long.
Look for our report from the trip on CNN.com, International, Travel next week as well as some additional information here.
Posted on September 4, 2014 by Scott Hamilton
Airbus vs Boeing orders: Airbus reported its order tally through August and while it surpassed 1,000 gross orders, it’s net orders trail Boeing significantly. This article sums things up nicely, though it doesn’t include Boeing’s last four days of August. Boeing reports weekly and the latest report is due out today. Through August 26, Boeing trails Airbus slightly in gross orders but leads in net orders.
Update: Boeing just posted its weekly order tally: 1,004 gross orders (to Airbus’ 1,001) and 941 net orders, still well ahead of Airbus’ net orders.
A320neo first flight: Airbus will launch the first flight of the A320neo this month for the airborne test program. This is powered by the Pratt & Whitney GTF; the CFM LEAP A320neo is supposed to follow by about six months. Entry-into-service for the GTF neo is planned for October 2015.
ExIm Bank: Members of Congress are looking at a short-term extension of the ExIm Bank‘s authority (read: until after the November election).
Frontier Airlines: This carrier is rapidly converting to an Ultra Low Cost Carrier business model, a process begun several years ago and accelerated last year. Aviation Week has an article that takes a look.
Go Seahawks: The NFL season opens tonight with the 2014 Superbowl champs Seattle Seahawks hosting the Green Bay Packers. Go Hawks!
Posted on September 4, 2014 by Scott Hamilton
Update: 24/7 Wall Street just published this gloomy outlook about Boeing.
Buckingham Research Group today lowered its call on The Boeing Co. from Neutral to Underperform, the equivalent of Hold to Sell. As far as we can tell, this is the first research analyst to put a sell on Boeing in recent years.
According to Thompson/First Call, 10 analysts rate Boeing as a Strong Buy, nine as a Buy and seven as a Hold. None rated Boeing as an Underperform or a Sell (Thompson separates the two ratings; Buckingham’s Underperform is a Sell). According to Thompson/First Call tallies on Yahoo Finance, there hasn’t been a downgrade to sell since 2008, when the 787 program problems were ramping up.
Buckingham has become increasingly pessimistic in recent months about Boeing, so the new rating isn’t necessarily a surprise, and Buckingham isn’t alone. Bank of America Merrill Lynch recently downgraded Boeing to Neutral and in June RBC Capital Markets downgraded Boeing to Sector Perform from Outperform. Wells Fargo and Credit Suisse analysts have been raising concerns in recent notes but haven’t downgraded Boeing, and UBS has been bearish for some time.
Buckingham cited anticipated worsening free cash flow as its principal reason for the downgrade, driven by BRG’s forecast of lower 777 production rates and higher than Boeing’s forecasted $25bn in deferred production costs for the 787. BRG also cited about 1,500 737s not yet added to the accounting block it believes have been sold at steeper discounts than historically.
Posted on September 2, 2014 by Scott Hamilton
A third incident of “recline wars” has been reported, this time on a Delta Air Lines flight in which a dispute broke out between a passenger who reclined his seat and the passenger behind him who didn’t like it.
The New York Times has an article on the entire issue.
While the focus and debate has, so far, centered around who has rights–the passenger to recline or the passenger claiming reclining violates his space–the real issue, and blame, ought to rest with the airlines squeezing down legroom to a seat pitch of 28 inches (in the case of Spirit Airlines and Allegiant Air) to an increasingly common 30 inches on legacy carriers.
Posted on September 2, 2014 by Scott Hamilton
Malmo and CSeries: Malmo Airlines, a small carrier in Sweden that is a subsidiary of Braathens, last week said it withdrew as the launch operator of the Bombardier CSeries. Malmo has five CS100s and five CS300s on order.
First delivery was scheduled for the second half of next year. The oil line failure in a Pratt & Whitney GTF engine on May 29 has set the flight testing back, although BBD hasn’t said by how much. We believe it will likely be a day-for-day setback and it’s possible that EIS will actually slip to 1Q2016.
The flight test fleet is expected to return to the air this month.
According to the Ascend data base, Lufthansa Group’s Swiss Airlines subsidiary was to be the second operator, also in 2015. We don’t expect Swiss to change its planned delivery schedule.
Posted on September 1, 2014 by Scott Hamilton
This report has been updated since it was issued to our E-subscribers last Monday to reflect our new estimate of the return to airborne status for the flight test program.
Bombardier two weeks ago made more executive changes to the CSeries program, replacing the vice president of marketing and other officials. The company said additional changes might be forthcoming—a clear signal that something more is afoot.
Bombardier has been stuck on 203 firm orders for the CSeries for the better part of this year, although the number of orders and commitments has swelled to 513 with a much better than expected Farnborough Air Show. Still, MOUs and LOIs aren’t firm orders with deposits and progress payments, and poor sales of the CRJ, Q400 and business jet divisions combine with the R&D costs of the CSeries to put a huge financial squeeze on the company. Layoffs and cost cutting, along with the management changes, add to the perception that BBD is a company in trouble.
Posted on August 31, 2014 by Scott Hamilton
What order bubble, Revisited: We recently asked the question, What order bubble?
The orders don’t stop coming. Boeing landed a big fish with a large order from BOC Aviation, bringing net orders to 918–easily on the path to 1,000. Airbus lags at just over 800 net orders through July (it only reports monthly, not weekly as does Boeing), but we see Airbus hitting 1,000 this year, too. There were 121 MOUs announced at the Farnborough Air Show for the A330neo and we expect most of these to firm up, if not all. (There will likely be some swaps by Air Asia from the A330ceo to the neo, however.) We expect more A320 orders as well.
Boeing’s BOCA order was the lessor’s largest ever and included two 777-300ERs. Boeing is attempting to combine -300ER orders with 737 and 777X deals in order to bridge the production gap between the 777 Classic and the 777X.
GE Aviation and GE Engines naturally benefited from the 737 and 777 BOCA deal, since they are the sole-source engine providers on the airplanes.
MRJ lands JAL: Japan Air Lines ordered 32 Mitsubishi MRJ90s for delivery from 2021. This is the fourth customer for MRJ. JAL’s rival, All Nippon Airways, was the launch customer for the MRJ90. JAL also ordered up to 27 Embraer E-Jets.
MH370: New information emerged this week on the flight path of Malaysian Airlines MH370, which disappeared on a flight from Kuala Lumpur to Beijing and is believed to have crashed in the south Indian Ocean.
We’ve been asked by local media if MAS can survive. We believe it can, given the government backing. It’s the flag carrier and we don’t think Malaysia will allow the airline to go out of business. Korean Air Lines survived following a series of crashes and the Soviet shootdown of KAL 007 during the 1980s. MAS may become a very different airline, but we think it will continue.
Posted on August 28, 2014 by Scott Hamilton
Financially ailing Qantas Airways has deferred some of its order for Boeing 787s, a move that ordinarily would be seen as a negative to Boeing. But in this case, it comes at an opportune time that will actually help Boeing respond to the Airbus A330neo.
Qantas’ deferral is from 2016 to 2017 and only for a few airlines. But having posted a record loss and previously canceled and deferred aircraft, we wouldn’t be surprised if this happens again.
The A330neo is planned to enter service in 4Q2017. Airbus is counting on near-term availability to help sales.
Posted on August 28, 2014 by Scott Hamilton