March 13, 2015: More Notes from the sidelines at the ISTAT conference this week in Phoenix.
Boeing 777 production rates and advancing schedule
Randy Tinseth, Boeing VP-Marketing, predictably stuck to Boeing messaging Monday at the ISTAT conference when I asked him about the change in tone I described in my post Monday morning about the 777 Classic production rate to the entry-into-service of the 777X.
Waving a copy of my post in the Q&A session of Tinseth’s market update and saying I had transcripts of every Boeing earnings call and investors presentation in which the “bridge” question was posed since the 777X program was launched, I cited Boeing CFO Greg Smith’s response to orders in the March 5 JP Morgan investors’ day and asked Tinseth about it.
Posted on March 13, 2015 by Scott Hamilton
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.
Posted on February 24, 2015 by Scott Hamilton
Airbus, Boeing, Bombardier, CSeries, Embraer, Mitsubishi, Sukhoi
Airbus, Boeing, Bombardier, CRJ, CSeries, E-Jet, Embarer, ERJ, Mitsubishi, SSJ, Sukhoi
Feb. 12, 2015, c. 2015 Leeham News and Comment: Boeing appeared to put to bed once and for all any prospect of reviving the 757 to fill a product gap between the 737-9 and the 787-8.
Randy Tinseth, vice president of marketing, refuted a published report that said Boeing was studying resurrecting the plane, last delivered in 2005, with new engines and winglets. Tinseth made the remarks Feb. 11 at the Pacific Northwest Aerospace Alliance conference in Lynnwood (WA).
While Boeing studied the prospect at one or more points, we didn’t view this as particularly significant; Boeing looks at virtually all options when studying product development.
Our economic analysis, performed after the published report, is one reason why we didn’t believe Boeing would proceed with a “757 MAX.” The economics simply fall short of the competing Airbus A321LR by double digits.
Posted on February 12, 2015 by Scott Hamilton
Airbus, Boeing, CFM, Embraer, GE Aviation, Mitsubishi, Pacific Northwest Aerospace Alliance, Pratt & Whitney, Rolls-Royce
737 MAX, 737NG, 747-8, 757, 757 MAX, A320NEO, A321LR, Airbus, Boeing, Bombardier, CFM, CSeries, E-Jet E2, Embraer, GE Aviation, Irkut, MC-21, Mitsu, MRJ90, Pratt & Whitney, Randy Tinseth, Rolls-Royce, United Technologies
CSeries: Bombardier provided a short update from program head Rob Dewar in advance of its 2014 earnings call Thursday. The flutter test has been completed, CS300 is moving toward joining the flight test fleet and the fleet has completed 900 hours of the 2,400 required toward certification.
MRJ90: The Mitsubishi MRJ is Japan’s first commercial airliner since the YS-11 turboprop in the last century. It’s a bold project intended to break into a highly competitive market sector. Air&Space magazine of the Smithsonian Institute profiles the MRJ.
Air France: Aviation Week has a dark opinion of the future of Air France. It’s worth a read.
Saving airlines: While Aviation Week has a dim view on the future of Air France, The Wall Street Journal has a piece about how private equity saved airlines. (Subscription may be required).
Posted on February 9, 2015 by Scott Hamilton
By Bjorn Fehrm
Subscription required
Introduction
08 Feb 2015: Passenger traffic is growing the world over on a regional, domestic and international level. For domestic and international airlines the choice of mainline transport aircraft is clear today: there are only two vendors, Boeing and Airbus, and they produce similar products.
For regional transportation there is more choice. First of all, one can chose type of aircraft, turboprop or jet. Within jet, there are several OEMs that are active. The choice in turboprop is more restricted. In practice, the choice stands between the classical turboprop with ATR and a faster type from Bombardier, the Q400 “Prop-Jet” as it is called, as its speed lands between the classical turboprop and regional jet.
The question is, what are the real differences between them in terms of design, passenger comfort and economics and what is the right choice for a market segment? We will take a deeper look into this by analyzing the ATR72 as the classical turboprop, the Bombardier Q400 as the Prop-Jet and CRJ700 as the regional jet.
Summary:
Posted on February 8, 2015 by Bjorn Fehrm
Subscription required
By Bjorn Fehrm
Introduction
25 Jan 2015: Japan has not produced a commercial aircraft since 1973, when the last YS-11 twin engined turboprop rolled off the assembly line. The YS-11 was developed by a consortium of Japanese “heavies,” where two are also active in the creation of the MRJ, Mitsubishi Heavy Industries and Fuji Heavy Industries. This time Mitsubishi Heavy Industries is very much in command as they own 64% of the company set up to develop, assemble and market the aircraft, Mitsubishi Aircraft Corporation, Fuji Heavy Industries are working as design consultants this time.
Figure 1. Mitsubishi MRJ90 starting its Pratt & Whitney GTF engines for the first time. Source: Mitsubishi.
The first MRJ prototype has run its engines 10 days ago and is preparing for first flight later in the spring. It is therefore time to take a closer look at the first model, MRJ90, and compare it to its direct competitor, Embraer 175 E2.
Summary:
Posted on January 25, 2015 by Bjorn Fehrm
Subscription Required
Introduction
Jan. 7, 2015: Embraer, the world’s #3 commercial airplane manufacturer, enters 2015 viewing this as a year of execution, says its chief commercial officer, John S. Slattery.
There are three pillars:
Summary
Posted on January 7, 2015 by Scott Hamilton
Here’s a visualization of events to look for in commercial aviation in 2015.
Posted on December 26, 2014 by Scott Hamilton
Airbus, Boeing, Bombardier, CFM, China, Comac, CSeries, Embraer, GE Aviation, Mitsubishi, Paris Air Show, Pratt & Whitney, Rolls-Royce
767-2C, A320NEO, A350-1000, A350-900, A380neo, air force tanker, Airbus, Boeing, Bombardier, CFM, CSeries, E-Jet E2, Embraer, GTF, KC-46A, LEAP, MC-21, Mitsubishi, MRJ, Pratt & Whitney, Qatar Airways, Rolls-Royce, Trent XWB
Subscription Required.
Introduction
Dec. 16, 2014: There have been record aircraft orders year after year, swelling the backlogs of Airbus and Boeing to seven years on some product lines, Bombardier’s CSeries is sold out through 2016, Embraer has a good backlog and the engine makers are swamped with new development programs.
So it is with some irony that several Original Equipment Manufacturers (OEMs) are warning of cash flow squeezes in the coming years.
Summary
Posted on December 16, 2014 by Scott Hamilton
Airbus, Boeing, Bombardier, CFM, CSeries, Embraer, GE Aviation, Irkut, Mitsubishi, MTU, Premium, Rolls-Royce
787-10, A320NEO, A330neo, A350, A380, A380-900, A380neo, A400M, air force tanker, Airbus, Boeing, Bombardier, C-17, CFM, Comac, E-Jet E2, Embraer, GE Aviation, GE9X, GTF, Irkut, KC-390, KC-46A, LEAP, Mitsubishi, MTU, Pratt & Whitney, Rolls-Royce
The new chief executive officer of United Technologies Corp., Gregory Hayes, threw cold water on hopes and dreams of Pratt & Whitney, a subsidiary, that the successful small- and medium-sized Geared Turbo Fan will grow into the wide-body market.
Aviation Week just published an article in which all three engine OEMs were reported to be looking at a 40,000 lb engine that would be needed to power a replacement in the category of the Boeing 757 and small 767. Hayes did not specifically rule out a 40,000 lb engine, leaving PW’s potential to compete for this business unclear.
Hayes has been CEO for two weeks. He was previously CFO. He made his remarks in a UTC investors event last night. The Hartford Courant has this report.
Hayes’ remarks were in response to a question from an analyst about research and development expenses. Here is his reply, from a transcript of the event:
Posted on December 12, 2014 by Scott Hamilton
Boeing, Bombardier, CFM, Comac, CSeries, Embraer, Irkut, Mitsubishi, Pratt & Whitney, Rolls-Royce
737 MAX, 757, 757 replacement, 767, 767 replacement, A320NEO, Alain M. Bellemare, Bombardier, C919, CFM, Comac, CSeries, E-Jet E2, Embraer, GE Aviation, Gregory Hayes, GTF, Irkut, MC-21, Mitsubishi, MRJ, Pratt & Whitney, United Technologies