The year 2012 in Aviation

The year 2011 is almost over and 2012 is ahead of us. So what did the year tell us in terms of aviation? And what does that mean for 2012? Well, here is an an excerpt of what I wrote one year ago: 
...
Maybe the first orders for the -NEO will be announced in January, as Scott Hamilton predicts.
Maybe we see some orders for the CSeries complete until the end of January, when the financial year of Bombardier ends.
If there is indeed a flush of orders for those aircraft, we should hear something out of Seattle (aka Chicago) regarding the future of the B737 soon. Southwest seems to prefer a reengining as they do not believe that Boeing will be able to pull out a successor around 2020...
...


There was certainly not a flush of orders for the CSeries - I expected some more (or at least larger - orders than what we have seen.
But the orders for the A320neo clearly made the B737MAX becoming a reality (eventually), so  Southwest gets what it wants.
In the light of the financial uncertainties surrounding the so-called Euro crisis, 2012 will be completely unpredictable in terms of new aircraft orders. But the future market is the narrowbody sector is clear: Airbus and Boeing are focusing on reengining, Embraer will follow after the B737MAX enters airline service. The only all-new aircraft of the western hemisphere will be the Bombardier CSeries and once the aircraft flies it should benefit from that fact.
The chinese C919 as well as the russian MS-21 could become good aircraft - both will have a lot of western technology built in. But if they will become true contenders is dubious. One just has to look how difficult it is for a well-known western OEM like Bombardier to break into the Airbus-Boeing duopoly.
Airbus has to show a lot of progress in the A350 programme to build confidence. The last few weeks showed first fuselage sections coming together, but at this point in time the B787 was on track as well...
Boeing has to deliver  - the B787 namely. Until today they lost against every delivery target they set themselves.
Bombardier has to show the same progress as Airbus for the A350 with their CSeries - a first flight towards the end of the year would be good for them.
Embraer said they want to decide about the engine for their reengined EJets until the end of 2012 -  the race is on between a LEAP derivative, a GTF (maybe PW1524G derivative) and maybe also an offer from Rolls Royce.
Tomorrow that new year (not just in aviation) starts - have fun everyone!

Technology Credibility

During the SWA web press conference about their B737MAX order, the CFM EVP Chaker Chahrour made an interesting statement. Leeham News and Comments has the quote here: "We believe we have much more credible technology than GTF."
Well, apart from that this might have been only some PR talking, I think we should shed some light on the credibility of the quote itself.

First B737MAX firm order

Southwest today firmly ordered 150 B737MAX and thus became the launch customer. Southwest also has 150 options for the MAX. The airline can accept both the -7 and the -8.
Southwest also ordered another 58 B737NG and changed all of their delivieries in 2012 and 2013 from the -700NG to the -800NG.
I think we can expect now some more firm orders for the B737MAX until the end of the year...

B787-8 analysis

Lissys, the software firm providing the PIANO software, did an analysis for early-built B787's and compared the fuel burn for a 5000nm mission carrying 22 metric tonnes of payload with the B767-300ERW (where W is for winglets). The analysis showed that the B787 with it's "near EIS" performance would burn only marginal less fuel than the B767 (50.1t vs. 50.7t, a difference of 1.18%).
But as the author says, the B787 cruises at Ma0.85, where the normal cruise speed of the B767 is Ma0.8. If one lets the B767 fly at Ma0.85, that would result in a fuelburn of 62.7t, so the difference at same speed is 20%. Of course this is not the oríginal claim from Boeing (well, at least I hope so...).

But let us look further into the model of the B787 and why the fuelburn is so high relative to what one should expect from that brand-new aircraft with state-of-the-art engines.
Lissys also provides a baseline model of the B787 from 2008, where the original performance Boeing designed the aicraft for is implemented.
We can now take this baseline model and do a "Point Performance" (click this option in the "Output" box)comparison: say, at 35.000ft, Ma0.85 and a weight of 180 metric tonnes.
Here is an excerpt of the output for the baseline model:
...
 Overall Lift / Drag Ratio = 20.25
 =================================
 Total Lift Force     1765206. newtons
 Total Drag Force       87169. newtons (43584.newtons per engine)
 Engine / Airframe Performance:
 ------------------------------
 Total Fuel Flow at Thrust=Drag:       4791. kg/hr
 Specific Fuel Consumption (SFC)       0.5390 kg/hr/kgf
 Specific Air Range (SAR)              .10226 nm/kg
 Emissions Index, NOx                  11.79 g/kg.
...

And here is the same output for the "near EIS" model:
...
 Overall Lift / Drag Ratio = 19.39
 =================================
 Total Lift Force     1765206. newtons
 Total Drag Force       91049. newtons (45525.newtons per engine)
 Engine / Airframe Performance:
 ------------------------------
 Total Fuel Flow at Thrust=Drag:       5116. kg/hr
 Specific Fuel Consumption (SFC)       0.5511 kg/hr/kgf
 Specific Air Range (SAR)              .09576 nm/kg
 Emissions Index, NOx                  12.03 g/kg.
...

What do we see?

1. Lift/Drag Ratio decreased from 20.25 to 19.39. This is about 4.24%. In other words, the aircraft needs 4.24% more thrust to hold that speed (Ma0.85) with that weight (180 t) at that height (35kft).
2. Specific Fuel Consumption is 0.5511kg/hr/kgf for the near EIS model, where it was 0.539kg/hr/kgf for the 4.24% lower thrust. This is an increase of 2.2%
3. Accordingly, fuel burn per hour is almost 6.8% higher for the near EIS variant.

From all what we know about the Trent1000 and the GEnx engines, the 2.2% miss in SFC is probably a good guess for the early build B787's.
What I do not understand is the 4.24% decrease in Lift/Drag ratio. That would mean that the wings of the B787 have an aerodynamic problem. If I remember correctly, Boeing onces stated that the wing of the B747-8 (which was designed in the same timeframe) is aerodynamically better than expected, so I would guess that the B787 wing is at least as good as it was planned to be.
So I have my doubts about that part of the analysis.

On the other hand:
If we compare the baseline B787 model and the B767-300ERW, the difference in fuel burn for the 5000nm mission is about 9.5% - significant, of course, but far from being 20% as Boeing always claimed.
Even if we add 4% fuel burn for the "non-wingletted" B767-300ER, we are not near the 20%.

So there is the old wisdom, that you need the right aircraft for the right mission...

NEO and MAX

In the last few days we saw a few more orders and commitments for the A320neo and B737 MAX. Here is a list:

A320neo:

50 Qatar (+30 options)

50 ALAFCO (+30 options)

30 ACG

45 Spirit Airlines

30 Volaris

B737 MAX:

201 Lion Air (+150 options)

35 ACG

So we now know three committed customers for the B737 MAX out of the nine customers that committed for 700 aircraft - the third one of course being American Airlines, triggering the launch of the B737 MAX with their rejection of the also proposed Boeing NSA and their commitment to take 100 B737 MAX and an option for another 60.

The Lion Air commitment is significant:

Dubai Air Show

If an article published by Reuters is correct, we will see a major order for more B777-300ER's from Emirates at the Dubai Air Show, which opens on Sunday. Rumors are, that Emirates will order another 30-50 of the long-range twin. They still have 41 B777-300ER on order. At the recent order pace that would be good for another 3.5 years. By then the first A350-900 aircraft should arrive. Ordering more B777-300ER could have the following rationalities then:

• Just more growth...well, it is Emirates!
• Dumping the A350-900/-1000 order altogether - unlikely!
• These will in fact be orders for a B777-8 or B777-9 - not too likely at this point, but not completely impossible!

Also, who knows - rumor is that Emirates will also order 30 more A380 - maybe they will announce to be the launch customer for the A380-900...

Embraer decides in favor of EJet's

Embraer decided to abandon plans for a new 5 abreast aircraft for now and instead opted to reengine to EJet's in the latter half of the decade - EIS could be in 2018. Given that Embraer could not do both at the same time - financially, but also due to manpower restrictions, as the KC-390 is in development also, this seems to be a wise decision.

Let us look at the timeline: in 2018 all new engines currently under development for the MRJ, CSeries, the A320neo, the B737MAX, the C919 and the MS-21 will be in service. Of course one could ask at least in case of the latter two if the EIS dates for these will stay where they are now. But Embraer will have a good idea how the engines - two versions of the LEAP (the C919 LEAP-1C will have the same turbo machinery as the A320neo LEAP-1A) and three types of the GTF (MRJ, CSeries and A320neo/MS-21) - are doing during development. An EIS in 2018 would probably mean an engine selection about 5 years earlier, around 2013, maybe 2014. By that time the PW1200G and PW1500G are flying at least on the respective aircraft prototypes and the first PW1100G engine should run on ground (the LEAP-1A seems to be a bit behind).

News about MAX

Jon Ostrower (Flightblogger)  and Scott Hamilton both are reporting about a presentation given by Boeing Commercial Airplanes CEO Jim Albaugh at Goldman Sachs.

New blog on the bloglist

I added a new blog on the right side: "The Blog by Javier" - I highly recommend his entry about the break-even of the Boeing B787 programme!

The first Thousand

With the brazilian airline TAM firming up their MoU for 32 A320 family aircraft including 22 A320neo, Airbus now reached more than 1000 firm orders for the reengined version of the aircraft. Truely remarkable, as this comes less than 11 months after Airbus officially launched the project on Dec 1st., 2010. The neo portion of the A320 backlog reaches 1/3 with that. John Leahy originally expected to sell about 4000 A320neo over the programe life - this seems to be a conservative number now...
Of course, Airbus talked with a lot of (potential) customers before launching the A320neo, so they could be sure that it will be a success - but Airbus obviously was caught by surprise by the amount of orders that came in, especially during the Paris Air Show. And so was Boeing - we are still waiting for a specification of the B737 MAX. The B737 MAX will probably see a similar flow-in of orders, as Boeing already announced that they have 496 commitments for the reengined aircraft.

Changing the engine landscape

That was really a big surprise for everyone, I guess! Not so much the fact, that PW bought  RR out of the IAE – that was considered by UTC for about two years. The real surprise is the Joint Venture to tackle the market of next generation single aisle aircraft – in particular, of course, the Airbus A30X and the Boeing NSA/B797.

At first glance, this is a technical win for Pratt & Whitney, as, at least in the near term, development will focus on the Geared Turbo Fan technology. The Open Rotor concept, advanced geared technology and “other advanced configurations” will also be pursued, but it seems that the GTF has won for now.

RR rationale 

But what is the reason for Rolls Royce to “give up” their own plans (at least for the nearer future) for next generation engines in that market? So far Rolls Royce planned with three options: Advance2, a two spool advanced turbo fan, Advance3, a three spool configuration and the open Rotor option as the answer for beyond 2025. Work on these concepts will continue, RR President  Mark King says, but to what extent is unclear. King also says that the formation of the joint venture should not be seen as a shift in strategy, but as a natural extension of their strategy and an elegant solution. Well, this is at least a discussable point of view…

The JV does not include the PW1217G and the PW1524G for the Mitsubishi MRJ and the Bombardier CSeries. An interesting question would be if Rolls Royce will compete with an own engine for the reengining of the EJets or the clean-sheet narrowbody CSeries competitor. P&W logically would offer versions of the PW1200 and PW1500 (maybe with added technology, depending on the EIS). Rolls Royce could become a risk sharing partner in these engines, but this seems unlikely.

A little bit in contrary to what RR officially said, they were also in the running to power the A320neo, but lost to CFM and P&W. Inside the IAE there were no agreement about the architecture of an offer for the A320neo, so both major IAE partners took their offer to Airbus. As RR had difficulties to scale the three spool concept down to the size of the neo thrust requirement (the most inner spool had such a small diameter that it could not withstand the torque).

The consequence was that Rolls Royce would have been out of the new narrowbody business once the last A320 with V2500 engines were delivered. Of course the aftermarket business for the V2500 would have been a long cash-in program for Rolls Royce, but without at least a participation in a running program it would have been very difficult to get back into the business once an A30X or a Boeing NSA where on the table. The fate of Pratt & Whitney after they lost their B737 business with the JT8D is a good example what Rolls Royce is about to avoid with the new JV and their “modest financial investment” in the PW1100G-JM.

PW rationale

So there is a good reason for RR to start the JV with P&W. But what about P&W? What is their rationale? Maybe it’s like that:

With a unbeatable customer base, CFM seems to be a set candidate for the Airbus A30X as well as the Boeing NSA. It is unlikely that one of the aircraft OEM’s will offer three engine options, so one of either P&W and RR would have lost. Maybe each of them would have gotten one application – but with both joining forces, this CFM antagonist can be seen as an almost sure second choice for both aircraft, without competing against each other and spending a lot of money to win against the other. So it is a win-win situation for both OEM. Not so much necessarily for the existing partners in the PW1100G-JM, JAEC and MTU. Their shares in the next generation engine program could be lower than it is in the PW1100G-JM now. On the other hand  they now have the possibility to enlarge their share in the V2500 and at least MTU already submitted a statement that they intend to do so.

IAE exit

Why does Rolls Royce exit the IAE consortium?

First, this is good news for P&W and the PW1100G-JM. Marketing the GTF engine becomes easier, as the owner of IAE and the partners in the PW110G-JM are the same now. Campaigns were airlines take both the classic version and the neo version of the A320 (like American Airlines and LAN) are now easier to handle. Also existing V2500 customers who order the A320neo can be given cross concessions easier (look what CFM/GECAS did for Frontier to get the A320neo business).

For Rolls Royce it means they get $1.5bn in cash immediately and a steady stream of cash flow in the next 15 years without any cash out (winning new campaigns usually means a cash out) and saving own IAE personnel, as they are “just” a supplier now).

Now - does Rolls Royce need cash? If one looks at the balance sheets of the last years: not immediately. But with the Trent1000 three years behind (cash-in) schedule, at least two of the A350 models delayed, further development costs for the A350-1000 TrentXWB engine, there could be a cash problem approaching Rolls Royce in the next couple of years, so the deal with P&W to exit the IAE could ease that.

ISTAT Europe 2011

For the second time I had the pleasure to join the european ISTAT (International Society for Transport Aircraft Trading) meeting, this time taking place in Barcelona, a wonderful city! Here are some thoughts about the conference...

A320neo
Last year the conference was "overshadowed"

GE Widebody engine SFC comparison

There is a great article at Asprire Aviation about how the B777 could evolve. There is one part which could cause misunderstandings: the fuel burn comparison between the GE90-115B on the B777-330ER/777-200ER/B777F and the GEnx that is on the B787 (GEnx-1B) and the B748-8I/F (GEnx-2B).
Daniel Tsang suggests that the GE90-115B is more efficient than the GEnx and gives SFC numbers. Now, first of all, these numbers are for Seal Level Static (MN=0) Takoff. The relevant number for long-range

Dreamliner ready to fly and "kill"

After getting FAA and EASA approval last week, yesterday also the Japanese Civil Aviation Bureau gave it's "thumbs up" for the B787-8. Launch customer All Nippon Airways can now go forward with it's plan to place the B787 into service.
After more than three long years of delays, the Dreamliner now becomes reality. And despite the first batch of aircraft will be overweight (one heard many different numbers) and the two competing engines obviously are in terms of SFC not where they should be, we can expect there now is an aircraft available that will bring economics never seen before.
The first international route ANA will fly with the B787 is Tokyo-Frankfurt.

One year aeroturbopower...

I can’t believe it, but it has been already a year, since the EIS of aeroturbopower. I never expected to get that much of readership and attention, but in that first year the blog got more than 50,000 hits - in fact it just reached 50,000 today. In the last month alone there were more than 12,000 visits, thanks to extraordinary traffic directed from a threat about the B737 reengining at airliners.net.

There was much to talk about in that year - Airbus launched the A320neo in December of 2010, at least in part due to the launch of the CSeries and first customers "defecting" from Airbus to Bombardier. And then, in July, after an extraordinary succesful sales run of the A320neo, Boeing was forced into what they (at leat officially) never wanted: to reengine the B737, now called the B737MAX. Now we wait eagerly to learn what Embraer will do...

Thank you very much for your readership – and thanks for all comments, all of these are welcome, no matter if you agree with my opinions/analysis or not. I have not eaten the truth, so I always appreciate objective and fair criticism.

Take aways from Boeing press conference

Boeing's press conference regarding the launch of the B737MAX-7,-8,-9 gave me some thoughts. Aspire Aviation has some excerpts:

1. “We think that this programme is going to be a terrific one for us, and we think it is going to be a terrific one for the customers and the one that continues the legacy of the 737 which started back in 1965.” -  “We believe very strongly that this is an airplane that is going to allow us not to just maintain market share, but one to allow us to grow our market share.” (Boeing CEO Jim Albaugh) - This is in stark contrast to what Boeing told us for two years - that airlines do not really want a reengined airplane, that the additional weight to due the haevier engines wil eat up most of the better SFC of the engines and so on.
2.  “The engine that we are going to put on would be a LEAP engine from CFM, right now we’re looking at 2 different sizes: the 68 and the 66 inch fan blade. In either case we remain very confident that this is not going to require a lot of modifications to the gear; certainly with the 66 no modification; and even with the 68 a very low probability to have to touch the front gear.” - “There’re some advantages in the 66 that we like and there’re some advantages in the 68 that we like and we’re doing the final trade right now and we will make the decision in the next several weeks.”  - “We’re going to make this the simplest re-engine as possible.” (Boeing CEO Jim Albaugh) - What we can take away here is that Boeing will opt for the 68" fan, if they can find a way to attach the engine to the wing so that they do not have to touch the landing gear. If they can't find a way with the 68" fan, they will take the 66" fan.
3. “Obviously we have contracts in place but at the same time we want to make sure our customers are getting what they need. And right now, they need airplanes in the 737NG it is available and it is available in great number through 2017 maybe even longer. I think most of our customers will stay with the NG.” - “There maybe some in the out years that they may want to take a hard look at the MAX and clearly we’ll sit down and do just that.” (Boeing CEO Jim Albaugh) - Now this is dangerous. Giving airlines a right to switch existing orders from the NG to the MAX could lead to a low number of NG's delivered in 2016 at least, maybe starting in 2015. Airbus so far avoided to let customers switch from today's A320 to the A320neo and their order book with the "classic" A320 is filled until well into 2016 today.

But now to something different. Boeing's CEO Jim Albaugh might be a good PR man, but mental arithmetic is obviously not one of his strongest personal strengths. He revealed that surprisingly, most of the five launch customers are from outside of the U.S. Precisely, Albaugh stated that 85% of the backlog are from non U.S. airlines. But wait - we know that AA with their provisional order for 100 aircraft is included in that - and 100 out of 496 is just over 20%, so we can consider AA to be 25% "non-U.S."...
On the other hand it means that Southwest is not one of the five launch customers. But I guess they will jump on board soon, so that the order book will swell soon...

Boeing launched the B737MAX

Today Boeing launched the B737NEMAX-7,-8 and -9, with order commitments from five airlines for a total of 496 aircraft!!! Whow, that's a start! Entry into service will be in 2017!
Who are these five airlines? There is only one we know for sure so far and that is American Airlines. My guess for the other four:

1. Southwest Airlines
2. Alaska Airlines
3. UA/CO (?)
4. WestJet (?)

Any suggestions?

B737MAX

Boeing claims a 4% fuel burn advantage versus the A320neo family. Currently the B737NG-800 has an advantage of 8% in fuel burn per seat - so the current gap would be smaller after both manufacturers reengined their aircraft.

A detailed analysis cannot be made at this point as there is no detailed data given by Boeing.

The statement given by CFM suggests that there is no final definition of the engine as of today...

Is Delta Air Lines competitive with the B737-900ER?

Yesterday came the press release confirming Delta's order for 100 B737-900ER.

These will delivered between 2013 and 2018 and there is no mentioning of a possibility to switch to the reengined variant.
In the press release Delta stresses a fuel burn advantage of 15-20% against the B757, B767 and the A320. If fuel is responsible for about 40% of your cash operating costs, this is big and results in 6-8% lower COC's. But to be competitive, Delta has to look what the competitors will do, especially the low cost carriers, which have lower COC's to begin with.
Virgin America and jetblue have ordered the A320neo

Delta's 737-900ER order

Yesterday came the news that Delta Air Lines will purchase 100 B737-900ER to begin the replacement cycle of it's narrowbody fleet. Until there is an official press release from the airline, it is rumours, but let us assume that the information is accurate.
Scott Hamilton is certain that Delta will have conversion rights to switch to the reengined version (the B737-9 as it stands now). If true, this little detail could hurt Boeing

A320 vs. B737-800 Fuel Burn

There is the never-ending "war of words" between Airbus and Boeing of which aircraft is the more fuel efficient one, and, since the launch of the A320neo, if the A320neo would be more fuel efficient and if yes, by what margin. Further complicating, Boeing meanwhile claims, that it's yet-to-be-named reengined B737 would have the same advantage in terms of fuel efficiency as the current generations of these two narrowbodies have. And as even Boeing does not seem to know how the exact configuration of the reengined B737 looks like, this claim seems (at least) a little bit premature.
As I tried to lay out in an earlier posting, much depends on what you want to compare:  fuel burn per trip of fuel burn per passenger.
The official documents provided by the manufacturers

Shifting center of gravity

Looking at the regional distribution of A320neo sales we get aware of the change in aviation.
South and Southeast Asia is where the coming aviation markets are - almost 550 A320neo are ordered for these markets when we count the 78 for Jetstar also for that region. And there should be more to come: China did not order the A320neo so far, but I guess we can bet on an order sooner or later.
Next in the regional distribution

Embraer 2000nm 5 abreast

It is no secret that Embraer looks into building a CSeries rival with an own 5 abreast aircraft. But as Bombardier's CSeries will offer a maximum range of 2950nm and the wing is designed for that range, Embraer reportedly is looking for a range closer to 2000nm, but thinks about a little larger aircraft. Scott Hamilton wondered in a recent blog entry how Embraer could achieve to build a lighter aircraft, as Ronald Epstein, the BoA analyst suggested. Here is a quick explanation:

B737RE Early Fuel Burn Analysis

Scott Hamilton picked up a few interesting details from the Boeing Quarterly Earnings Call regarding the B737RE. The most important question regarding this program remains the fan diameter. It looks like it will settle around 66 inches, so that Boeing can go forward without touching the nose gear.
But what does that mean for fuel efficiency?

The 130 seater market

The launch of the CSeries in July 2008 initiated many discussions about the market those two aircraft are placed: the 110-130 seater market.
Let's have a quick look in the 130 seater market,

B737RE Fan Diameter

The efficiency (SFC) of the LEAP engine for the B737RE (I call it the LEAP-2B as I think it needs a different, aka smaller core) very much depends on the fan diameter, as with a larger fan you can have a higher bypass ratio, enabling a smaller Fan Pressure Ratio (FPR), which translates in a higher propulsive efficiency.
For now there are four fan sizes in discussion, reportedly ranging from 63" to 70". The lower end represents

B737RE!

So we have another reengining programme! American Airlines just announced to purchase up to 300 B737 aircraft (as well as up to 625(!) A320neo). The more inportant detail of this message is that 100 (+60 options) of the B737NG's will be powered by the LEAP-X, unofficially launching the reengining program of the B737NG, as this needs confirmation by the Boeing board.
What does that tell us?

Boeing B737 whatever...???

I pledged to not write another part of the "...successor" story, so I named it differently. Scott Hamilton once again broke the news: Boeing is now leaning towards reengining. If that would really happen, this would be what John Leahy always expected (and so did I).
If we recap all what has been said before it becomes clear, why a reengining would be the best possible action for Boeing. Of course, a new airplane could be better by about 10% in operating costs, but at what cost and risk for Boeing? Just look at another story published yesterday by Scott Hamilton about the latest round in B787 delivery delays! It will take a few years for Boeing to get in a position where they earn some money with the B787. And with the refined A350-1000 Boeing might now feel the pressure to do something with the B777 earlier than planned before. The Y3(B777 successor) was currently planned around 2025, but with the A350-1000 arriving in 2017/2018, that could move to somewhere around 2020. That moves the Y1 (B737 successor) to the second half of the 2020's - and meanwhile, say in 2017 a reengined B737 could appear. Capital requirements for that, if true what Hamilton writes, should be in the same $1-1.5bn range as the A320neo program - probably a little less than Airbus's costs, as we can assume  that we will only see one engine on the B737RE - a LEAP-2B, how I would call it for now: with a smaller, scaled down core, a fan with the maximum possible diameter to fit under the wing without nose gear extension.
The technical risk is minimal, compared to the risk of a new airplane a la B787. Additionally, Boeing will see if the LEAP engine will work as anticipated when entering service on the A320neo.

CFM power

Scott Hamilton has a piece about how GE and CFM are able to win so many engine competitions and for that went deep into the Republic deal for 40 A319neo and 40 A320neo, to be equipped with the LEAP-1A.

After reading the story I went on and looked at a few public databases, where you can check out which airlines owns which aircraft, with which engines they are equipped and who is (eventually) the lessor of the aircraft.

I was interested in the airlines which already ordered the A320neo, but did not commit to an engine so far. Here are my findings and what they tell me:

1. GoAir: they have a firm order for 72 A320neo

Current fleet: 10 A320 powered by CFM56. They firmed up 10 options for the A320 (classic), no information which engine they choose for these, but I would guess CFM56.

GECAS leases 4 of these aircraft to GoAir.

So both CFM and GECAS have leverage for a deal to sell the LEAP-1A to GoAir. CFM could reduce spare parts pricing for the existing CFM56 and GECAS could lower lease rates.

Now GoAir is reportedly also interested in the CSeries and could announce a deal in July or August.

That gives P&W a leverage to struck a combined deal here, as the PW1524G is the sole engine for the CSeries.

Conclusion: Tie! Everything is possible!

2. Jetblue: Jetblue has a MoU for 40 A320neo

Current fleet: 118 A320 with V2500, 49 E190 with CF34-10E

GECAS leases 13 A320 as well as 35 E190 to Jetblue

At first glance, P&W should have better cards, if one just looks at the A320 engines, but GECAS tries to get a hold here with more leases.

MTU does the MRO for the engines on a power-by-the-hour basis, so they could be involved in a deal for placing the PW1133G on the A320neo's for Jetblue.

Conclusion: It's P&W's to loose - and that's the chance of CFM!

3. Avianca TACA: they have a MoU for 33 A320neo

Current fleet: 42 A320 powered by CFM (mostly Avianca), 30 A320 powered by V2500 (+20 on order)

GECAS leases 14 aircraft to Avianca TACA.

GE has a dedicated MRO shop for the CFM56-5 in Brasil.

Conclusion: CFM's to loose. They have clearly more to throw into that deal.

4. LAN/TAM: 20 firm oders (LAN) + MoU for 22 (TAM)

The airlines are in a merger process.

Current fleet: Large A320 family fleet, powered both by the V2500 and the CFM56 - LAN selected the CFM56 last year for a further 50 A320.

GECAS leases 23 aircraft, mostly to TAM.

MTU is providing MRO for the V2500 at TAM.

Conclusion: Close call! CFM and GECAS have slightly more leverage...

5. Garuda Indonesia/Citilink: MoU for 10 A320neo + 25 Options

Current fleet: 78 B737 (Classics and NG) with CFM56

GECAS leases 40 B737 to Garuda.

Conclusion: CFM can hardly loose this one!

6. Transasia: 6 A321neo on firm order

Current fleet: 2 A320 and 5 A321 powered by V2500, 7 ATR powered by PW127

Conclusion: P&W can hardly loose here!

And now look at some prospective customers:

1. Delta Air Lines

Current fleet:

• GE engines are on 105 aircraft
• CFM engines are on 209 aircraft
• GECAS leases14 aircraft to Delta
• PW engines are on 355 aircraft
• IAE engines are on 27 aircraft with 13 more to come (MD-90)

Most PW engines will go away with the replacement (the last DC-9's and the MD-80's), so the P&W leverage is not that big as it looks.

Conclusion: a deciding factor could be the engine commonality with a possible CSeries order!

2. American Airlines

Current fleet:

• GE engines are on 73 aircraft and will be on the 6 ordered B777-300ER
• CFM engines are on 154 aircraft and 54 more ordered B737-800
• GECAS leases 61 aircraft to AA
• PW engines are on the 229 MD-80's, which will then disappear

Conclusion: never heard so far that AA is interested in the CSeries, so this is CFM's to loose.

3. Air France/KLM

Current fleet:

• GE engines are on 146 aircraft
• CFM engine are on 210 aircraft
• GECAS leases just one aircraft to AF/KLM (is that right?)

Conclusion: hopeless for P&W, M. Sarkozy will never let AirFrance order an engine without french content if there is one available.

Paris Air Show 2011

That was quite an event! I will focus on just some of the most important topics here, the most important of course being

A320NEO

1029 order and commitments! (plus a few more options) - Never ever in history there was an aircraft selling so fast. Of course, a comparison to the B737NG is unfair, as 15 years ago we did not have such big and emerging markets in China, India and all over Asia (more than 460 A320neos are ordered by Asian airlines so far). Also I am sure that a reengined B737NG or a NSA/B797 would sell as good as the A320NEO (or in the case of the – hypothetical – B797 even better). But let us roll back one year: there were many skeptics of the A320neo, saying that demand for such a “warmed-up” aircraft would just not be there. Others said that Airbus might be forced to convert many of the orders for the current A320 to the –neo model. Both are proved wrong today. Even Air Asia boss Tony Fernandes did not manage to convince John Leahy to convert some of the old orders to the –neo.

Now if American Airlines would really decide to order 100 A320neo (probably they are most interested in the A321neo) this summer, there would be lots of activities starting in Chicago and Seattle.

The A320neo brings us right away to the next big topic at this year’s Airshow.

LEAP-1A vs. PW1100G

Before I get started, please read what Addison Schonland wrote in his piece on AirInsight. As I laid out before I have my doubts about the performance claims of the LEAP-1A. And as I heard, CFM did more PW1100G-bashing at his media briefing just ahead of the Airshow than talking about their own product and it’s merits. A rock solid confidence looks different…

Nevertheless, CFM managed to get large deals at the Airshow. The largest, of course, was the order for 400+ engines for the 200 aircraft deal of AirAsia. But this was CFM’s to loose, as they are providing the CFM56 for the current 175 aircraft order from AirAsia, GE won with the CF6-80 for AirAsia’s A330-200 just recently and GE became a sponsor of Tony Fernandes F1 Lotus Team.

I did a prediction about A320neo orders and the respective engine choices just a week before the Airshow opened. I was wrong at SAS and Republic – both choose the LEAP-1A over the PW1100G. As it appears, I underestimated the market power of CFM, GE and GECAS.

I also expressed before that I think there could be an alliance between Airbus and CFM to keep potential CSeries customers away from ordering the Bombardier aircraft by giving them deals they cannot deny. This strategy can work with airlines which have business with CFM, GE and/or GECAS today.

Look at Republic: the whole Frontier fleet is powered by the CFM56 today - about half of the A319 fleet from Frontier is leased through GECAS.

Republic has the largest Embraer EJet fleet in the world, all powered by the CF34-8/-10. Most of the E170 in the fleet of Republic Airlines, one of Republics subsidiaries, is leased from GECAS.

So GECAS, CFM and GE have all possibilities to sweeten the LEAP-1A deal with discounts on spare parts and leasing rates – one thing that Pratt&Whitney can not do.

SAS on the other hand is a large B737NG customer and they also have a CRJ900 fleet powered by the CF34-8. They choose 2^nd hand B737-700 over the CSeries earlier this year. This decision was probably more cash driven, as leasing rates for used aircraft are of course cheaper than for new ones and SAS is going through a tough time right now. SAS has also A319 and A321’s in their fleet, powered by the IAE V2500. But firstly the V2500 powered fleet is much smaller than the B737NG fleet, and secondly, PW always has to deal with Rolls Royce on the V2500 business. And as RR has no stakes at all in the –neo business, they have no interest in building a bridge for PW at all.

One A320neo deal that did not materialize in Paris was the anticipated order for 50 aircraft from Qatar (as well as the “deferred” CSeries order). The A320neo will come one day of the other, just as U-Turn Al’s mood allows, but I guess the chances for the PW1100G are better here.  Although GE can throw their GGE90-115B business on the B777-300ER/-200LR fleet here (Qatar just ordered 6 more of them in Paris) and CFM powers 4 A340-300 in Qatar’s fleet, the A320 fleet is powered by the V2500 and PW might to persuade Qatar by making good deals on both the CSeries and the A320neo.

CSeries

John Leahy still thinks that Bombardier should scrap the CSeries program. As an Airbus employee he has to say that, regardless of what he thinks.

But as in the weeks before and at the Airshow there were five new customers announced (three of them unnamed so far), I think it became clear  that a growing number of airlines got convinced that in this market segment an optimized aircraft is better suited than, say an A319neo. Surprisingly, the CS100 got the biggest chunk of the new orders – maybe something to think about at Embraer…

I guess we will see a few other orders for the CSeries until the end of the year:

- Delta Air Lines

- Qatar (finally)

- GoAir, which just ordered 72 A320neo, hinted for a “raft” of CSeries soon to order

Boeing

Boeing did not raise the bar very high in the run-up of the Airshow, but did extremely well with orders, especially on the widebody front. It remains to be seen, if the revised A350-1000 can break the monopoly the B777-300ER enjoys in their segment. A stretched A350-1100X was denied by Airbus officials, but we will see…if the Rolls Royce managers are wise, they build in another 5% thrust margin above the 97klbf in their revised Trent XWB nacelle lines to cover for growth.

Scott Hamilton further explains Boeing’s success – I suggest to read his entry for more.

Other stuff

There was lots of other stuff to talk about – but I won’t, at least for today…

LEAP-X core temperatures

I saw this article about the latest design changes to the CFM LEAP engine. I described what I think about the seventh LPT stage and the larger fan diameter in my last blog entry. New to me in this article is, that CFM claims that the LEAP core would run at the same temperatures  - at least turbine entry temperatures - than the CFM56.
Hmm, let's start with pure physics. The LEAP engine will have an OPR of 50 at top of climb. The CFM56-5B has an OPR of 35.5 at the highest (33klbf) thrust setting.
Make it easy and consider the Fan, the LPC and the HPC as one big compressor. The formula to get the compressor exit (or burner entry) temperature is:
T2=(1/etac)*(T1*(P2/P1)^(0.4/1.4)) with P2/P1 being the OPR in this case and etac being the compressor efficiency.

CFM says that the turbine entry/burner exit temperature stays the same, they do not say anything about the burner entry temperature. But to get the highest efficiency, the burner exit temperature (T3) should be
T3=(T2^2/T1), thus being independent from the OPR.
So let's consider that the ratio of T3/T2 should be about the same. Then T2 should be the same, too.
What does that mean for the compressor efficiencies? Well, if T2LEAP and T2CFM56 should be the same, then from the first formula can conclude that:
((OPRLEAP)^(0.4/1.4))/((OPRCFM56)^(0.4/1.4))=etac(LEAP)/etac(CFM56)

Computed, you will see, that the compressor efficiency of the LEAP engine should be 10% higher than that of the CFM56.
Now, the GE90 compressor, on of the predecessors of the LEAP compressor, is thought to have an efficiency of 91%. Let's assume, the LEAP compressor, although considerably smaller, has the same efficiency (which is hard as the relative clearances are larger in a smaller compressor). Then the efficiency of the CFM56-5 compressor should stand at 90%*91%= 82% - if true, the engine would be a disaster.
So, something does not add up here. An engine with a pressure ratio of 50 can't run at the same core temperature as an engine with a 29% lower OPR  - or you did something wrong in your basic layout of the engine.

LEAP-X striking back?

CFM said over the weekend that they have four announcements on every of the first four days of this years Paris Airshow regarding LEAP-X customers. It is not clear, whether these are all for the A320neo or some of them will also be for the C919, but apparently CFM is strongly coming back from behind and it remains to be seen if the PurePower GTF engine can hold it's No.1 position on the A320neo.

According to a Bloomberg report, SAS will order the LEAP-X for their 30 A320neo. A few days ago I expected them they will go with the GTF - apparently I was wrong and I will speculate about the reasons a little bit later.
But let us look at the possible reasons of this comeback: if you read the blog entry behind the first link of this, article, there are two interesting things to note: CFM just lately changed the design of the LEAP-X engine:
1. The fan diameter got larger, from 75" before to 78" now.
2. The LPT got an additional stage - now it has seven, just as the GEnx-1B for the B787.

Both changes are good for about 1% in SFC - each. Additionally, I guess CFM changed to size of the core and made it smaller, what could yield in another 0.5% in SFC.
On the other hand, the engine gets larger, produces more drag, gets added weight and the added LPT stage produces extra maintenance costs.
Because of the added drag and added weight, the fuel burn benefit will end up in the range of 1.5-2%. Operating costs could end up being somewhere between 1-1.5% better.
If you study this site, CFM now claims a 1% better fuel burn against the GTF. Is this credible: a few weeks ago, before the design changes were made official, Bernstein, AirInsight and others said (with obviously good knowledge about the situation), that LEAP-X would trail the GTF by about 3%.
So if CFM now claims to be better by 1%, then they probably project their best possible SFC without regarding any development risk. This is not engineering practice, but as it seems, CFM can convince quite a number of customers with that strategy.

Now to the story about SAS and why they might have turned to CFM:
First, they are a flying a lot of  B737NG, thus having a number of CFM56 in their fleet and possibly a good relationship to CFM. A few weeks back they dedided to lease 2nd hand B737-700 and with that opting against the CSeries.
Easy question: who is most interested in CSeries failing in the marketplace:
1. Airbus
2. CFM
For that reason, I could see a campaign to fight all possible CSeries deals in a joint effort from Airbus und CFM. The litmus test for this thesis will be the CSeries' fate at Republic: if Republic now orders the A320neo with the LEAP-X and (sooner or later) cancels the CSeries, I would see this thesis is "proven". Also watch for Qatar...
The thriller just starts here!

Boeing 737 successor Part V

I swear that this is the last piece in that series - before the Paris Air Show!
A recent piece in Flightglobal as well as a blog entry from Scott Hamilton this week shows that inside Boeing there are diverging blocks: one wants a new airplane, the other wants to reengine the B737NG and it seems like a "put them all in one boat"-solution to do it both. With a A320neo family arriving from 2015 onwards and a hypothetic new model from Boeing arriving in 2019 or 2020, with the CSeries entering the market in late 2013 and probably another 5 abreast aircraft from Embraer arriving at the end of the decade, who then needs a reengined B737NG? And if the backlog is so big that there are filled delivery positions even in 2018 today with todays B737NG, a reengined B737NG would only get a handful of orders from customers which did not get a delivery slot from Airbus, Bombardier or Embraer before the Boeing NSA is available.
So doing both makes no sense if the NSA is really slated for around 2020 - but a later arrival, around 2025 could make sense, as the differentiation against the A320neo in terms of engine and aircraft technology and thus operating costs could be larger then. That thinking should behind when Albaugh (quote Flightglobal) "questioned whether such an aircraft would be "good enough with rising fuel costs and emerging environmental regulations" and whether it could stay in service for 50 years." (quote end)
In the meantime, a reengining would make sense and would give that reengined B737NG a life expectation of at least ten years. At last years european ISTAT conference I spoke with some appraisers about the (the not yet launched) A320neo and they said that it would need a production run of at least ten years - the same should be true for a 737NGneo.
A "mild" reengining, maybe even avoiding changes to the front landing gear, should not bind too many engineering resources and should put Boeing in the position to counter Airbus if they should announce any changes to the A350-1000 that would make that aircraft to a better competitor to the B777-300ER than before.

Some airlines can't wait for Paris

The official opening of the Paris Air Show is still four days away, but there are a few airlines who can't wait to announce their (A32Xneo) orders.

Cebu Pacific and GoAir both placed orders today.

Cebu Pacific (I did not even have that on my list yesterday) placed an MoU for 30 A321neo. They also firmed up options for 7 A320 (Classic). Cebu stated that with the A321neo they will be able to fly to destinations which cannot be reached with the A320 today, namely Northern Japan, Australia and India. They will outfit their A321neo's with 220 seats - I have not heard of any airline with such a dense seating in a A321. Air Berlin has 210 seats, Air France in the domestic market version 206 seats.

And then there is GoAir - for 72 A320neo. I had them on my list for Paris, but for a maximum of 70 - well, not too far off. GoAir is owned by the Wadia Group, a powerful conglomerate, and got a new CEO just a few days ago, the former Chief Revenue Officer from Air One (Giorgio De Roni), which was (more or less) forced to merge with the old Alitalia.
GoAir has 10 A320 in the fleet, with 10 more to come in the next two years. By then, with a fleet of 20 aircraft and after 5 years of operation, they can fly internationally.

Both airlines fleets are powered by the CFM56 today and both airlines gave no indication of engine selection yet. It remains to be seen if my assumption that the PW1100G has the better cards in the indian market. At least the planned first delivery date (2015) for GoAir's A320neo seems to indicate a GTF selection here.

Airbus A320neo order speculations

We are just days away from the Paris Air Show 2011 and every day there are more speculations about who will order how many aircraft at the show – and which ones.

The one thing that seems to be clear though is that the A320neo will get the bulk of orders.

So let me take part in the speculation game and start with the “Star” of the show:

Here is my guessing about who will order how many and the engine choice:

AirAsia	150-200	LEAP-X
Republic	40-80	PW1100G
Qatar	30-50	PW1100G
GECAS	50-100	LEAP-X
ALC	25-50	LEAP-X/PW1100G
CIT	20-30	LEAP-X/PW1100G
GoAir	50-70	PW1100G
SAS	30	PW1100G

In total we could see more than 600 orders/commitments for the A320neo family, with both engine makers getting their share of the market.

As for the LEAP-X it is crucial to get orders – GE seems to invest heavily in the AirAsia order, with GE becoming a sponsor of Tony Fernandes’ Formula 1 Lotus Team. Even if GE says that those two deals are complete separate…

As the CFM56 is AirAsia’s current engine choice, CFM was in the front runner position anyway. It remains to be seen, if Fernandes managed Leahy to convince him that a conversion of orders for the A320 ”Classic” can be transformed into A320neo orders and how many. And we will also see if this deal will be even larger than the yet-to-be-finalised order of 180 aircraft by Indigo.

Republic already placed a deposit in Toulouse, so we can expect an announcement about a fleet rollover for Frontier soon. As they already ordered the CSeries, they probably lean towards the GTF. But it remains to be seen, if the CSeries order stays intact. The financial troubles at Republic could mean that Airbus buys Republic out of the CSeries deal.

If Qatar finally decides to order the CSeries, they should decide for the GTF on their up to 50 neo's, too. But who knows what U-Turn Al will decide when he wakes up on the day of the planned signing ceremony. If he had a bad dream, all hid plans can change in a minute...

GECAS of course is the most natural LEAP-X customer. Nothing to add here...

After opposing the A320neo from the start, even Steven Udvar-Hazy seems to jump on the bandwagon now, as was reported earlier. I expect a split between LEAP-X and the PW1100G here, as well as from CIT.

GoAir obviously is in the market also for at least 50 A320neo. That seems a lot for an airline that has just 10 aircraft by now, but the fast growing Indian market is hungry for aircraft. The V2500 has a large customer base in India today and the PW1100G made the race at IndiGo, so PW might have the upper hand here.

SAS is looking for the A320neo, too, and I think this is the airline that is speculated to be the first neo-customer currently flying the B737NG. They have looked into the CSeries also, but decided to preserve cash by leasing 2^nd hand B737-700. SAS did not rule out to order the CSeries later, so they could lean towards the PW1100G on the A320neo to have engine commonality (sort of), if they ever decide to order the CSeries.

There might be others to come forward and order more A320neo – who know. John Leahy understands how to do good marketing and always pull out a rabbit out of the hat…