The GE Powerhouse and how it wins deals

Those of us who are intimately familiar with commercial aviation will find this as no news. For those who don’t deal in this business every day, this will provide a better understanding of how deals are won in aviation.

This is the story of the GE Powerhouse and how family ties combine to enable GE Aviation and CFM International to win deals that might otherwise go to competing engines.

None of what we’re about to tell you is to suggest that the GE/CFM engines are inferior (though, obviously, some might dispute this), because they are superb engines. But a telling comment came from CFM’s Sandrine Lacorre, product marketing director, who said at a UBM Aviation conference, “What we can’t do technically, we will do commercially.”

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Odds and Ends, Post-Paris Air Show 2011

Here are our closing views of the PAS:

Boeing

Boeing did very well at the show. We know the headlines almost universally say Boeing had a bad show (which it didn’t) and was trounced by Airbus (which it was), but people easily overlook comparing Boeing’s performance vs. previous air shows.

Boeing announced more than 140 orders worth some $22bn–about equal to the 2009 Paris Air Show. By anyone’s standards, this ain’t shabby. Boeing often announces low numbers at air shows, claiming it doesn’t hold orders for the shows and Airbus does. We regard this as so much poppycock, because we know customers drive announcements and both Airbus and Boeing hold announcements for air shows at customer requests.

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Leahy to Boeing: you’re “whistling past the graveyard”

This is a story we provided KIRO TV in Seattle, for which we provided reports during the air show.

Airbus A320neo success far exceeds expectations

Special to KIRO TV

Airbus ended the primary portion of the Paris Air Show Thursday with 700 new, firm orders for the A320neo (New Engine Option) and a total of 1,029 firm orders and commitments year-to-date. There possibly could be a few more orders before the show officially ends Sunday, but the trade show portion ended Thursday.

The results surprised even Airbus super-salesman John Leahy, who said at the company’s closing press briefing that some deals came together unexpectedly during the show.

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Odds and Ends at the Paris Air Show, Day 4

Our final Odds and Ends as we head back to Seattle Friday.

  • Marc Birtel, one of the corp-com guys at Boeing, asked us what we were impressed by at the Air Show (this was Tuesday, before the Airbus landslide of NEO orders). We must be getting too jaded or too familiar with Air Shows, because we said, “nothing comes to mind.” On reflection, these impressed us: Boeing’s display of technology in the form of the two 747-8s, a 787, a 737-700 with the Sky Interior; the ever-impressive A380 flying display; the Breitling Constellation; the Bombardier “igloo” Pavilion (well, its contents, actually) was way-cool; and of course the impressive number of NEO orders.
  • We were also impressed by the laid-back, almost shoulder-shrugging at attitude of Airbus CEO Thomas Enders. We interviewed him shortly after the press conference summarizing the best Airbus Air Show ever and the historic AirAsia order, the largest ever in commercial aviation. He seemed suitably excited in the press conference but afterward he could have been ordering a cup of coffee. (He did consent to a glass of champagne). The orders were all well and good, he said, but now Airbus had to produce and deliver them. Today’s news was already yesterday, for Enders; there were other things to be concerned about.
  • We opined over at AirInsight about the increasing nasty battle shaping up between Airbus and Bombardier.
  • See this story about John Leahy dancing to seal the AirAsia deal. CEO Tony Fernandes was very funny when telling it and words can’t do it justice. But Leahy dancing is not a vision we want to have. But it’s better than the story of his old boss, Jean Pierson, dropping his pants to seal a deal. Now that’s not a vision to go to bed with.
  • The saying is “Paris in the springtime.” We can say, “Paris in June sucks.” It rained (sometimes heavily) for three of the four days at the air show. In 2009, it was two out of four.

Odds and Ends at the Paris Air Show, Day 3

Odds and Ends at the Paris Air Show, Day 3

  • John Leahy, COO-Customers for Airbus, says that after CFM re-jigged the LEAP engine with a larger fan and the seventh LPT stage, has brought the engine to parity with the Pratt & Whitney GTF in fuel burn. The LEAP initially was up to 4% lower in fuel burn, leading to PW’s early lead in sales.
  • “We don’t buy deals,” CFM told our associate, Addison Schonland of AirInsight Wednesday during his visit with them at the Paris Air Show. He’s going to have a special post about the War of Words between PW and CFM soon on AirInsight. Read more

CSeries order intact, says Republic; CFM offered “great incentives” for engine deal

Bombardier’s CSeries order with Republic Airways Holdings, announced today at the Paris Air Show, is intact, says the company spokesman.

Peter Kowalchuk told us late Wednesday (Paris time) that there is no change in the CSeries order, despite the Airbus one announced today for 40 A320neos and 40 A319neos. First delivery, of the A319neo, is in 2016.

The first CSeries is scheduled for delivery in 2015.

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U-Turn Al does it again

Airbus scheduled a 10am press conference to announce an order with Qatar for A320neos and the A380. The room was filling when an Airbus spokesman said the press conference would be delayed. The reason: CEO Akbar Al-Baker was stuck in traffic. Given the notorious traffic, confounded by rain, this was entirely plausible.

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1,000 NEOs and “parity” is all it is

Airbus may have booked close to 900 orders for the A320neo family by the time the air show ends tomorrow, a plane that  Boeing says merely reaches “parity” with the 737-800.

Airbus, of course, hotly disputes Boeing’s computations and says if the A320 were so deficient to the 737-800, why would airlines and lessors buy so many of them?

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Odds and Ends at the Paris Air Show, Day 2

Odds and Ends at the Paris Air Show, Day 2

Airbus

Airbus owned the day again with a bunch of orders, including capturing a Boeing 737 operator, Garuda Indonesia. For the A320neo (In this context, we’re not counting SAS, which already operates A320s.) Up to now, Boeing has been dismissing the sales of the neo as being only to A320 airlines, as well as winning deals on price and asserting the neo only brings the airplane to “parity” with the 737-800. Airbus’ John Leahy, COO-customers, counters that airlines aren’t buying Boeing’s line and are buying the neo because it is more efficient than the 737-800. So, it would seem, lessors are also convinced. ILFC previously ordered the aircraft. Air Lease Corp, CIT Aerospace and GECAS also placed orders.

The ALC order could be considered particularly significant. Its CEO, Steven Udvar-Hazy, previously was cool to the neo and now placed a bet for 50 of them.

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