Leeham News and Analysis

There's more to real news than a news release.

There's more to real news than a news release.

Airbus may drop lithium batteries from A350; BCA CEO appeals to SPEEA members

Airbus may drop Lithium batteries: Bloomberg reports that Airbus may drop lithium ion batteries from the A350 in the wake of the problems encountered by Boeing. Reuters has this report.

A switch to standard batteries would delay the A350 program by a couple of months, reports Bloomberg–but another delay has been expected by customers anyway, who previously told us they believe the first delivery will be at the end of 2014 or early 2015 rather than the mid-2014 previously announced by Airbus.

Bombardier is using Nickel-Cadmium batteries for the CSeries.

Meantime, Boeing acknowledged the obvious: 787 deliveries will be delayed.

BCA CEO appeals to SPEEA: Ballots have gone out from SPEEA leaders to the membership recommending rejection of the Boeing contract offer and authorization for a strike. Boeing sent the following message to SPEEA members:

Read more

 51 Comments

 Posted on February 8, 2013 by

 Airbus, Boeing, Bombardier, CSeries

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Odds and Ends: Narrowing the cause on 787s; 30-120 days grounding?

Narrowing the Cause: Aviation Week has a good article with some behind-the-scenes snippets about the grounding of the Boeing 787. Toward the end are comments from Japan Air Lines about narrowing the cause of the battery problems.

The JAL comments support what we heard on Friday: that Boeing and investigators are indeed beginning to focus on what they think may be behind the battery incidents. Things are still too fluid and uncertain to provide details here–we don’t want to head people or media off in the wrong direction, even inadvertently–but we’re cautiously optimistic.

Aviation Week also has this story about failure mode testing and the 787 batteries.

Reuters has this story about the progress being made in the investigation.

What this means for grounding: So the continuing question remains, how long will the 787 be on the ground? Boeing wants to get the airplanes in the air this month. A source, citing conversations he’s had with the FAA, says the federal agency sees the 787 grounded a minimum of 30 days and a maximum of 120.

Lithium-ion Batteries OK to Fly: The Detroit News has an interesting story: while the 787 is grounded, lithium-ion batteries are continued to allow to fly in cargo holds.

Air Lease Orders 25 A350s: This is the long-overdue order (it was expected last November). Included are 20 A350-900s and five A350-1000s.

Regional aircraft trending up: Aviation Week reports that regional aircraft sizes are trending up.

CSeries v Airbus, Boeing: Something called the Wiglaf Journal (never heard of it) has an analysis of the Bombardier CSeries vs Airbus and Boeing.

 35 Comments

 Posted on February 4, 2013 by

 Airbus, Boeing, Bombardier, CSeries

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Odds and Ends: SPEEA talks; 787 Update; Bombardier raises $2bn

SPEEA Talks: Boeing and SPEEA both issued brief statements late yesterday that talks resumed and will reconvene today at 9 am PT. The absence of any rhetoric of any kind suggests the absence of tension in yesterday’s session–or any progress on the issues. But the absence of tension may be progress in and of itself. We’ll see how things continue. KPLU has Part 2 of its look back at the 2000 SPEEA strike.

787 Update: Boeing yesterday held a conference call with its chief engineer for the 787 program, expressing confidence in the airplane and the battery system design. Acknowledged were the hits to the reputation of the airplane. There have been several stories posted which are available via Google News. This one is a pretty good wrap of issues to date. This story focuses on the lithium ion battery and the use in automobiles.

Bombardier raises $2bn: The company had to withdraw a $1bn debt deal last year due to market conditions; it just raised $2bn, a welcome addition to liquidity given the cash drains for the development of the CSeries and the Global Express.

 25 Comments

 Posted on January 10, 2013 by

 Boeing, Bombardier, CSeries

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Embraer selects PW GTF for E-Jet RE; concept clarity comes at last

It’s official: Embraer selected the PW GTF to re-engine the E-175, E-190 and E-195.

In doing so, it looks like the E-170 will be allowed to wither on the vine.

This is a huge win for PW and setbacks for Rolls-Royce, which sorely wanted to win the E-Jet RE for its Advance 2 RR development; and for GE, the incumbent supplier of the CF34 and which was developing the Next Generation variant for the E-Jet.

EMB EJet RE

It’s yet another validation for the GTF. Versions of this engine will power the Mitsubishi MRJ, the Bombardier CSeries, the Irkut MS-21, the Airbus A320neo family and now the E-Jet RE.

It’s a huge comeback for PW, which made a major strategic error in not competing to power the Boeing 737 300/400/500. Boeing continues to use the GE/CFM LEAP engine as its sole-source supply for the 737 MAX, though Boeing seriously evaluated the GTF as well.

Below is EMB’s press release:

Embraer Selects Pratt & Whitney’s PurePower Engines for Second Generation of E-Jets

São José dos Campos, January 8, 2013 – Embraer SA (NYSE: ERJ; BM&FBOVESPA: EMBR3) announced today that Pratt & Whitney´s PurePower® Geared TurbofanTM engines have been selected for its future, second generation of E-Jets, with entry into service planned for 2018. The decision is an important milestone in the program, which is expected to be officially launched later this year.

The new engines – the PW1700G and PW1900G – range in thrust from 15,000 to 22,000 pounds. In combination with new aerodynamically advanced wings, state-of-the-art full fly-by-wire flight controls and other systems evolutions, they will result in double digit improvements in fuel burn, maintenance costs, emissions and external noise.

“We are very happy to expand our partnership with Pratt & Whitney, keeping the E-Jets family as the best solution for our customers, today and in the future”, said Frederico Fleury Curado, President & CEO of Embraer. “The PurePower GTF engines are a great fit to the next generation of our E-Jets and we look forward to another long lasting and successful program with Pratt & Whitney”.

“We are proud that Embraer has recognized the unmatched value of the PurePower engine, and we are committed to supporting a successful launch of the new E-Jet aircraft family,” said Pratt & Whitney President David Hess. “To date, Pratt & Whitney has completed more than 4,200 hours and 12,400 cycles of full engine testing for the PurePower engine family, demonstrating the benefits and reliability of the engine architecture.” Pratt & Whitney is a division of United Technologies Corp. (NYSE: UTX).

The second generation of E-Jets will be a significant step in Embraer´s commitment to continuously invest in this line of commercial jets, complementing a series of ongoing improvements currently being implemented in the existing family, with great benefits to its customers. Embraer´s objective is to offer the best product and maintain its leadership in the 70 to 120 seat market.

 23 Comments

 Posted on January 8, 2013 by

 Airbus, Boeing, Bombardier, CFM, CSeries, Embraer, Irkut, Pratt & Whitney

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Looking ahead to 2013 in Commercial Aviation

Last year yielded a few surprises in an otherwise predictable year.

Jim Albaugh shocked the aviation world when he retired unexpectedly at age 62. He was expected to remain in his position as CEO of Boeing Commercial Airplanes until mandatory retirement at 65.

EADS CEO Tom Enders unleashed a surprise merger proposal with BAE Systems. The deal didn’t work due to German government opposition, but he ultimately accomplished a governance restructuring—a key objective of the merger—that will reduce government meddling in the future.

Those were about it. Boeing’s much-anticipated Authority to Offer the 777X didn’t happen. ATO for the 787-10 was stealthily granted. Airbus and Bombardier, to no surprise, delayed the A350 and CSeries by a few months. Boeing came roaring back to become sales leader for the first time in about a decade, on the strength of 737 MAX sales.

What’s ahead for 2013? Here’s what we see.

Overview

With the spurt of 737 MAX sales over, narrow-body sales competition between Airbus and Boeing should return to normalcy. Will twin-aisle sales become the next growth market because of the first flight of the A350 and the program launch of the 7870-10? Will ATO of the 777X evolve into a program launch as well? Will Bombardier’s first flight of the CSeries and subsequent testing validate its claims for the new technology airplane and finally spur a large number of sales of the “show me” crowd?

Here’s our OEM-by-OEM rundown.

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 17 Comments

 Posted on January 2, 2013 by

 Airbus, ATR, Boeing, Bombardier, CFM, Comac, CSeries, EADS, Embrarer, Farnborough Air Show, Pratt & Whitney, Rolls-Royce, Sukhoi

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2012’s Most Momentous event: were readers correct?

A year ago we asked the following question and received the results. Now that 2012 is all but over, do you agree with your own forecasts?

What is the most momentous event you predict for 2012?

Answer Percent
Boeing doesn’ t ramp of 787 as expected 28%
Airbus slips its schedule for the A350 23%
Boeing meets ramp up expectations for the 787 12%
Airbus stays on schedule with the A350 11%
US Airways makes a bid for American Airlines 10%
Bombardier has first flight of CSeries by year end 9%
American Airlines tells US Airways to sniff its own exhaust 4%
Bombardier’s first flight for CSeries slips into 2013 2%

 18 Comments

 Posted on December 26, 2012 by

 Airbus, American Airlines, Boeing, Bombardier, CSeries, US Airways

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Odds and Ends: CSeries and London City Airport; new life for BAe-146; SPEEA’s next step

It’s Christmas Eve but there is some news despite this being a slow day.

CSeries and London City Airport: The downtown airport is a highly challenging one. Aircraft have a challenging approach. The runway is short. British Airways operates the Airbus A318 to New York with a refueling stop westbound. Bombardier says its CSeries can do the trip non-stop. This article provides some detail.

New Life for BAe-146: This airplane didn’t have much to recommend it. In its original 3×3 configuration, it was a cramped airplane. It had four engines. The original engines were unreliable. But here’s a new life for them.

SPEEA’s next step: The Boeing engineers’ union takes another step to prepare for a strike, beginning Feb. 1.

Ed Colodny on US Airways mergers: He headed Allegheny Airlines and US Air for years, guiding the carrier through four mergers–including Piedmont Airlines, which critics widely considered that he screwed up, and PSA, which US did screw up. The Street gets his thoughts on the potential American Airlines merger.

GEnx PIPs slip a bit: The Performance Improvement Package program for the GEnx engine that powers the Boeing 787 and 747-8 has slipped a bit, according to this article.

 11 Comments

 Posted on December 24, 2012 by

 Airbus, Boeing, Bombardier, CSeries

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Odds and Ends: CSeries picks up; Air Canada’s Rouge; A380 v 747-8; Allegiant Air

CSeries picks up: Bombardier is ending the year with some upbeat news for the CSeries. First was an LOI for up to 30 CS100s from an unidentified customer. Next the wings arrived to be assembled onto FTV1 (Flight Test Vehicle 1). Then today it converted the MOU for 10+10 CSeries from AirBaltic to a firm order. BBD now has more than 350 orders and commitments for the aircraft. Update: Aviation Week has this item comparing early CSeries orders and E-Jet orders. CSeries stacks up pretty well.

Air Canada’s Rouge: Aspire Aviation has this column on the future of Rouge and the creation of WestJet’s Encore airline, and the impact on Canada’s aviation.

A380 v 747-8: AirInsight has this analysis comparing the Airbus A380 and Boeing 747-8. We discussed portions of this earlier, when the ad wars broke out between Airbus and Boeing, but this is more expansive.

Allegiant Air Acquires A320s: Allegiant Air is on a shopping spree again, this time acquiring nine Airbus A320s from Iberia Airlines.

 9 Comments

 Posted on December 20, 2012 by

 Airbus, Boeing, Bombardier, CSeries

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Odds and Ends: Bombardier lands Delta’s RJ deal; 787 events in perspective; Airbus/China; Enders victory

Delta Air Lines: Bombardier, in a welcome development, landed a major order with Delta for 40+30 CRJ900s, beating out Embraer’s E-Jet proposal. Delta has a large, installed base of CRJs and EMB wasn’t too optimistic, in management-analysts meetings last week, according to research notes. But BBD liked its odds, considering the CRJ is more fuel efficient than the E-Jet (being a small airplane), even if the E-Jet is far more comfortable.

For BBD, the order is important for two reasons. First, the CRJ backlog is shrinking. Deliveries begin 2H2013, and this illustrates the point. Second, with BBD sucking up cash in advance of CSeries first flight in 1H2013, the deposits, progress payments and delivery payments are welcome, indeed.

The next face-off between the two OEMs is American Airlines, where both have large installed RJ fleets of aging aircraft.

Boeing 787 events: Airworthiness Directive. “Emergency” landing. AirInsight puts things into perspective.

Airbus lands China orders: Hmm. EU suspends plans to impose ETS tax. Airbus lands orders for 60 A320s and 10 A330s. What do you make of that…

Enders now 1-1, sort of: Tom Enders, CEO of EADS, lost his bid to acquire BAE Systems due to German government interference. The merger would have reduced government meddling, balanced EADS commercial and military business, put EADS on a more equal footing with Boeing and positioned EADS better for US DOD contract bids. But Enders has now won a corporate governance restructuring that ends government meddling in daily operations. He still hasn’t achieved his other goals, but this one is so huge that we rate Enders’ won-lost record 1-1.

 11 Comments

 Posted on December 6, 2012 by

 AirInsight, Boeing, Bombardier, CSeries, EADS, Embraer

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Random thoughts about Airbus, Boeing and related issues

We’ve been traveling on business all week and naturally the conversation was all aviation. We spoke with lessors, aerospace analysts, hedge funds and private equity. In what amounts to a data dump, here is what is being discussed “out there.” This is in no particular order.

  • The new outbreak of ad wars between Airbus and Boeing is viewed largely with eye-rolling and disdain that two world-class companies are behaving like two year olds.
  • Nobody, but nobody we talked with believes the public numbers advanced by either Airbus or Boeing.
  • Boeing will have virtually a new airplane with the 737 MAX by the time it’s done, similar to the design creep of the 747-8 and the magnitude of change between the 737NG and the 737 Classic.
  • Airbus pulled a coup with the NEO, forcing Boeing to do the MAX….
  • But there is some sentiment that Airbus and Boeing should have resisted doing a re-engine and stuck with the the current airplanes. Airbus should have let Bombardier proceed with the CSeries for the niche 100-149 seat market unchallenged, having bigger fish to fry.
  • Bombardier doesn’t know how to effectively sell the CSeries and it is unwilling to cut deals that would sell the airplane.
  • Operating leasing is a ticking time-bomb, largely (but not entirely) due to book values of the aircraft on the balance sheet far exceeding current market values.
  • Boeing claims the 787-10 will “kill” the A330-300. The market agrees–but only by the middle of the 2020 decade. Boeing can’t deliver enough 787-10s to make a dent in the global fleet before then. By then, the A330 will be about 30 years old and broadly at the end of its natural life cycle anyway. So what’s the big deal?
  • Airbus is doing a good job enhancing the A330 to keep it competitive with the 787.
  • There remains skepticism that the LEAP engine development is proceeding well. The buzz on the street is CFM still has a lot of challenges with the development.
  • There is some feeling the MAX will be late–not because of any concrete knowledge, but because of Boeing’s performance on the 787 and 747-8 programs.

Unrelated to Airbus and Boeing, our colleague Addison Schonland has this first-hand account of Isreal’s Iron Dome.

 66 Comments

 Posted on November 30, 2012 by

 Airbus, Boeing, Bombardier, CFM, CSeries

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