Airbus year end Order Buzz

Every January there is a press conference in Toulouse where John Leahy presents the order and delivery figures for the past year. And every year he has some surprise orders which came in in December. Two years ago, for example, Richard Branson took center stage in the press conference when the first order for the A320neo for 30 aircraft where


Narrowbody Review 2012

Slowly, but inevitably, the year 2012 is coming to an end. Here are some thoughts about the current situation of the narrowbody market:

Boeing now has not yet fulfilled its own prophecy and has “only” 969 firm orders for the B737MAX in its books (with 819 orders in 2012), shy only 31 from the goal to have 1,000 by the end of 2012 and I guess that there will be another order (or more) in December to fill that gap..


"Mystery" A320 customer

Airbus revealed the November O&D spreadsheet today and there is an undisclosed customer for 100 A320 family aircraft in it.
Now there are - competing - two airlines which talked about a 100 aircraft strong A320 order or were rumoured to place an order soon: Airasia and Lionair.
So who is the "mystery" customer?
Airasia needs more aircraft soon - their growth strategy especially in Indonesia, where they want to give Lionair a hard fight, took a setback with the failed takeover of Batavia. So to keep or become competitive in Indonesia, they need more aircraft soon. Not just neo's but also ceo's.
Lionair on the other hand has an orderbook large enough to wait for the neo...
Let's take a look at the neo orders at the end of October: they stood at 1469.
We know that Transasia ordered another 6 and Interjet 40 neo's. This is 1515.
In a presentation at the EADS investors day last week John Leahy mentioned to have 1579 orders for the neo - a difference of 64 aircraft that can only be a part of the 100 aircraft strong order from the undisclosed customer.
So I have a very strong feeling that Airasia ordered another 64 A320neo and 36 A320ceo.
And now I wait eagerly for a reaction (read: counterorder) from Lionair...;-)


GE buying Avio?

There are reports that GE might buy Avio from private equity firm Cinven.
Avio is a supplier for the GEnx engines and for also CFM.
But what is maybe more important is that Avio is also a supplier for the PW1100G Fan Drive Gear System.
Avio has a long history in designing and building gear systems - the ADP (Advanced Ducted Prop, build from a PW2000 core), tested by P&W back in the early 90's, used a (then Fiat) Avio reduction gearbox.
So what is behind GE's move to acquire Avio? There are three possible motivations:
1. GE just wants to grow (and participate in some revenue from the PW1100G program)..
2. GE wants Avio to keep away from P&W in the future.
3. GE wants to get the intellectual property of the PW1000G Fan Drive Gear System to have a option to move to a gear architecture in the future - possibly for the next generation of narrowbodies, expected now for the late 20's/early 30's.

The Airbus vs. Boeing Ad-War

An „ad-war“ broke out, media says, when Airbus published an ad in several aerospace publications, accusing Boeing to lie when they compare performance of the B737MAX with the A320neo and the B747-8I with the A380.
A good summary can be found here. What I found amusing is that obviously the Pinocchio theme is a tit-for-tat response to spat over market share back in 1994...

One could see it a little bit differently: maybe the war was “broken” by Boeing when they began to publish their ads about B737MAX vs. A320neo and B747-8I vs. A380 performance?
But lets look at the facts:
Boeing always claimed that the B737-800NG has an 8% cost advantage versus the A320 an a per-seat basis and as the B737-800NG has a typical seating of 162 seats versus 150 seats in the A320 this means that the cost per flight are more or less equal, as the seat difference is exactly 8%.
Now Airbus claims that the A320neo needs 15% less fuel than the A320ceo. Boeing claims that the B737MAX needs 13% less fuel than the NG.
Let’s say fuel costs are 50% of overall (cash operating) costs.
Then the A320neo cost per flight is 92.5% of the A320ceo cost per flight (0.85*50% fuel costs + 50% other costs).
The B737MAX-8 cost per flight is 93.5% of the B737-800NG cost (0.87*50% fuel cost + 50% other costs).
So after reengining there is a slight advantage for the A320neo in terms of cost per flight.
On a per seat basis there is an advantage for the B737MAX-8 of 6.85%.

Of course, this is a very simplified view at the costs. Any change in maintenance costs of the airframe and the engines also play a role. But if you compare the LEAP-1A powered A320neo with the LEAP-1B powered B737MAX-8, the changes in engine maintenance costs should be comparable to the CFM56 powered A320ceo and B737-800NG.

The question is why Airbus and Boeing are “communicating” via ads? Airbus says that the Boeing ads might let “less sophisticated airlines” keep from talking to Airbus directly.
“Less sophisticated airlines”?
Of course, there are airlines which have a better aircraft performance analysis than other ones – the larger the airline, the better the capabilities, I guess. I know Lufthansa always does a very thorough analysis before buying any aircraft. Singapore Airlines also does very good work here as many others also. Air France probably as well does a good job here, although on the engine side thy seem to be always preferring a GE/CFM engine choice (if available), as the national player Snecma (Safran) is involved there.
But look at the recent comments from Estonian’s CEO about the CRJ900, calling the aircraft not competitive for markets with less than 80 seats (the CRJ900 has 88 seats at Estonian). So why, one could ask, did they choose an aircraft with more than 80 seats when they know they want to use it in markets with less than 80 seats?
Clearly, the department for aircraft performance analysis at Estonian – if there is one – lacks some competency, as well as all of the upper management, as they finally gave approval to buy the aircraft.
So Airbus in the end might have a point here in launching the counter-ad…


Pegasus Order

The turkish carrier Pegasus is about to announce their choice for the next 100 narrowbodies, ATWonline reports. The airline has already decided on which aircraft to take, ATW says and wants to announce it shortly. Obviously A320neo and the B737MAX are in the competition. As Pegasus has a fleet of 40 B737-800NG and two B737-400 right now I would rule out the CS300 as it would be a smaller aircraft than the ones currently in use.
One sentence in the article might give us a hint who will be the winner:
"The carrier expects to start receiving the new aircraft in around three years."

1. In 2015 only the A320neo is available, the B737MAX is coming to the market two years later. So one might think that the A320neo might be the aircraft of choice.
2. But as I laid out earlier, Boeing has about 1,000 B737NG positions to sell until the B737MAX will be the only B737 version produce by Boeing, which could happen in late 2019, about two years after EIS of the B737MAX.

So my guess is that Boeing made an irresistible offer to Pegasus. As Boeing is the provider of the current fleet, they have to loose more than Airbus anyway here.
But let's don't underestimate John Leahy - maybe he surprises us (well, at least me) one more time. But my bet is on Boeing here!


Boeing B737MAX orders gaining steam

This week Boeing firmed two orders for the B737MAX. On October 1st GOL signed for 75 B737MAX-8 and two days later GECAS for another 75 copies of the -8. Another unidentified customer signed for 22 B737MAX. Boeing has now 821 firm orders for the MAX.
What is maybe more important is that Boeing still has no order for the -7. Also the A319neo has only very few orders so far. There are two possible explanations for this:
1. Airlines are shifting to larger aircraft.
2. Other aircraft, especially the Bombardier CS300 is the better aircraft.
I discussed this also in an earlier post. Against the first assumption speaks that there are markets that do not support a 180 seater and a 150 or 130 seater is more economical.
But there are not really too much orders for the CSeries - yet. My guess is that once first flight happened (and went well) we will see some more orders, maybe also on a larger scale.

Another sidenote of the GECAS order is that there are "only" 10 orders for the B737-800NG included with 15 more options instead of the 25 firm orders originally announced. I also discussed this earlier: Boeing has to sell something like 500 more NG's to close the gap until the MAX enters service. And as a ramp up to full production will probably take another two years, Boeing needs to sell another 500 or so if they do not want to have an overall slowdown in B737 deliveries.


Lion Air - another Boeing-Airbus splitter?

In one of my recent posts I speculated about a large narrowbody order accompanying the launch of the low cost carrier from Lion Air and NADI, based in Kuala Lumpur and aimed to take on Air Asia. But Rusdi Kirana, owner of Lion Air, said that the aircraft will be B737-900ER and probably later on B737MAX-9 channeled through Lion Air's existing order book with Boeing.
Now there are news out, reporting that Kirana said that Lion Air needs more planes and Scott Hamilton predicts an order for 100 A320neo's to be knocking at John Leahy's door.
I remember (and found) a press article last year, a few weeks after the massive order from Lion Air for B737-900ER and B737MAX-9 was announced, in which John Leahy mentioned that Airbus and Lion Air already had a MoU in place, but then political pressure from the White House inhibited Lion Air from defecting from Boeing to Airbus. Who know - maybe the MoU is still valid?
It looks like there are two 100-aircraft-orders in the works in Toulouse. The other of course being for AirAsia. Reports last week said that this is not only for the A320neo - earlier reports suggested that the A320ceo is the aircraft to be ordered as Tony Fernandes said that AirAsia needs more planes "soon". I guess there will be also a nice number of A330-300 (presumably the new 240t version) and maybe more A350's in the deal. At last weeks ISTAT Europe the A330-300 was one of the most mentioned aircraft (in a positive way): Nico Buchholz, Lufthansa VP Fleet Strategy said that it is a "bloody profitable" aircraft for their North America destinations. But also AirAsia Co-Founder Conor McCarthy was very positive about the aircraft (but he also thanked god that AirAsiaX has just two A340-300 in the fleet).
The new (still to be announced) AirAsia order was public since Farnborough (or even earlier, I don't remember exactly). It will go to AirAsia's board in the coming days and then officially announced. I would guess the Lion Air order for A320neo's (if true) will be announced shortly thereafter.
As boring the summer was in terms of new aircraft orders (at least since Farnborough), as interesting might get the rest of the year...


ISTAT 2012 Europe Takeaways

Last weeks ISTAT meeting in Rome was very educational and interesting.
A few takeaways:

1. Economic Life of aircraft
Many people in the industry fear that with lowering lease rates (especially for the A319/A320) the economic life of aircraft are falling from 25 years as of today to something like 20 years. In fact - finding appropriate funding for older (> 8 years) aircraft can be a challenge. But a panel discussion between lessors found that most of them have no reason to expect that economic life of aircraft are falling in general. There are some exceptions were it can be found that a part-out of a relative young aircraft can be more valuable that trying to lease it (for older A319, B737-700 for example) - but these are exceptions.

2. Financing new aircraft
At last years conference there was the fear that especially french banks, which historically play a crucial role in new aircraft financing, could be forced out of that market. This year it was evident that all are still in the market, some not as much exposed than before. But there are banks from other parts of the world jumping in: japanese banks are back, middle eastern banks are entering the market and chinese banks as well.

3. B737MAX under pressure
Both Ryanair CFO Howard Millar and AirAsia Co-Founder and Director Conor McCarthy called the B737MAX not convincing. This is of course not surprising in the case of Air Asia as they could be called an "Airbus company" and also Michael O'Leary expressed his concern with the B737MAX more than once. But later on I talked to an airline manager who has been in talks with Boeing about the B737MAX and he said that the concept is still not frozen and he does not really know how the aircraft should look like.

4. Don't try to fool your customers
Boeing VP Marketing Randy Tinseth showed some fuel burn comparisons between Airbus and Boeing aircraft. To me it looked a little bit like comparing apples with oranges (for example he compared the B777-300ER with the A340-300). After the presentation there was a panel discussion and some Q&A time with the audience. A Virgin Atlantic fleet manager stood up there and called Randy's comparisons bullshit - not only the models which were compared but the numbers itself! I would think that he should know best how much fuelburn the different aircraft have. Although Virgin Atlantic only flies Airbus aircraft I would guess he also knows a thing or two about the B777-300ER at Virgin Australia.
Of course Tinseth also discredited the A320ceo/neo - market numbers talk a different language though: Airbus showed that the A320 now has 249 customers worldwide, the B737NG "only" 131. And the A320 has sold consistently better than the B737NG.
I really do not understand why Randy Tinseth is doing such obviously flawed comparisons at a conference like ISTAT, where the people in the room have very good knowledge of the market. I cannot believe that your potential customers appreciate such a behavior.

All in all, the worst in terms of the european financial crisis seems to be over - most people are optimistic about the future of aviation!


Lion Air vs. AirAsia

That just caught my eye: after AirAsia announced to buy Batavia Air, merges them with Indonesia AirAsia and thereby becomes a real competitor to Lion Air, now Lion Air (together with NADI) strikes back in AirAsia's home country.
Competition in Southeast Asia will get hard in the next few years. But the region is the one with the highest growth and everyone wants to get piece of the cake.
Will the new airline place a large narrowbody order? Or will they be fed from Lion Air's existing orderbook for B737-900ER/-MAX9? Next Tuesday could be interesting - and AirAsia already announced that they want to place an order for 50-100  more A320 (ceo I guess) at the Berlin Air Show (ILA), also next week.


Surprising engine choice

Last week Aviation Week came out with a story that Philippine Airlines opted for the V2500 and PW1100G for their ordered A321ceo/neo fleet and chose the Trent700 for their new A330-300 fleet.
As of today the whole PAL fleet is powered by either CFM or GE engines this would be a surprise if true - but also shows that PW gained market power through the buy of the RR share in the IAE consortium.
Looking at the A321 in particular though, the choice of the V2500 is not that surprising. From here I pulled all A320 deliveries from this year through August 31: about 84% of all delivered A321 have the V2500. In contrast, about 60% of the A319 and A320 were delivered with the CFM56. As the A320 counts for roughly 76.5% of all A320 family deliveries and the A319 for 7.5%, the CFM56 has the lead with 53.2% market share over the V2500. This is slightly down from 2011, when the CFM56 had a share of 56% for the whole year. In 2009 I found that the market share of the CFM56 was 61%. So with the shift to larger narrowbodies, like I described earlier, the market share in the narrowbody engine segment also changes.

Second birthday

Last Friday aeroturbopower held it's 2nd birthday. Thanks for all who read and commented. I know that my personal viewings do not please everyone, but this is life, isn't it? It would be boring if everyone agrees with everything. There have been 141,782 viewings in the past year, taking the overall number to 192,675.


Expected Airbus Order from China

As german chancellor Angela Merkel visits China this week, it is expected that China will order up to 100 Airbus narrowbodies. Looking at the delivery rate to chinese airlines and the backlog that chinese airlines have with Airbus, an order for 100 aircraft is not too much, even if the bulk of these would be for the ceo version. If I counted correctly there were 125 deliveries of A320 family aircraft between January 2011 and July 2012. The current backlog of chinese airlines is 186 aircraft - at the current delivery rate this is good for about 28 months. At the end of 2014 all the backlog would be gone.
There are an additional 42 orders from lessor ICBC and a MoU for 36 aircraft from CALC though, but these aircraft could also be placed outside China.  At best (here: when all aircraft are placed with chinese airlines) the backlog would be Zero at the end of 2015, just when the neo enters service but probably a long time before delivery slots would be available (although some chinese airlines or lessors may have reserved a limited number of slots in advance).
But before the A320neo will be available in larger numbers for chinese airlines (probably then coming from the chinese Airbus factory in Tianjin), Airbus can sell a bunch of ceo aircraft to chinese airlines meanwhile, thereby utilize also the Tianjin factory until the ramp up of the neo provides for a smooth transition there.

What is the situation at Boeing? There were 77 deliveries to chinese airlines from January 2011 until the end of July, a much slower pace than at Airbus. There are 212 open orders from China for the B737NG, good for 53 months of supply at the current delivery rate. This takes us into 2017 but well before the targeted MAX EIS and any open delivery slot for the reengined version of the B737. So another order for the B737NG from China is almost inevitable as well to satisfy the growing chinese aviation market.

A little unknown in the context of narrowbody aircraft supply to chinese airlines is the C919 and when this aircraft will enter into airline service. I do not know anybody who firmly believes that this aircraft will be on time (meaning a 2016 EIS). I would deem a 2018 EIS as a success, an even later date not to be a real surprise. And I would not expect a sudden ramp up to meet a significant part of the demand from chinese airlines.

The other unknown: the chinese economic activity. We are just seeing a considerable slowdown here. Highspeed Rail is another factor which could slow the growth in aviation. Boeing denied that possibility in their Current Market Outlook, but used numbers from 2009 in their presentation. Words from chinese airline managers sound different.

The chinese market is important for both Airbus and Boeing - 20% of all Airbus narrowbodies were delivered to China since January 2011 and 12.5% of all B737NG's went there. So a slowdown of economic activity in China is also of great risk for both manufacturers, in particular for Airbus.

UPDATE: About 30 minutes after I posted this entry, China Southern reported slumping profit due to the economic slowdown.


Narrowbody Market Shift

AirInsight last week published a report about the narrowbody market, especially about the 100-149 seat segment. What they found is that - in their opinion - the failure of aircraft in this segment was due to either weak OEM's (and I guess that this means that the OEM was undercapitalized) or due to the fact that the aircraft were no clean sheet designs optimized for that market segments but rather derivatives of (mostly) larger planes. As such a "shrink", an airplane carries a lot of weight that is not needed for it's role. For example the wings are too large and heavy, as they were designed for the original and larger aircraft.
The only aircraft that is currently in production and is a point design is the EMB190/195 family - where the EMB195 seems to be a bit underpowered in terms of takeoff length at MTOW, but the thrust is OK for typically flown routes below 1000nm.


Boeing wins a MAX customer from Airbus

SilkAir announced they signed a LoI with Boeing for 23 B737-800 and 31 B737MAX-8 with another 14 options. The orders can be converted to other versions.
This is significant as Silkair is the first customer Boeing catched from Airbus. Silkair currently operates a fleet of 21 A320 with 3 more on order.
Until now it was Airbus who draw customers away from Boeing, the first one being American Airlines - prompting Boeing to announce the (then yet unnamed) B737MAX.


COC and DOC Part V

This is the next part in a series of blog posts related to COC and DOC - the last one can be found here. As I referred to Allegiant in that last post I will continue with that particular airline here.
Yesterday Allegiant announced that they will introduce the A319 into their fleet. The company presentation includes an interesting comparison of COC and DOC costs per passenger between the MD80 and the


Payload Range Diagram

After my last post a debate started about the range of the B737MAX-8 and -9, precisely whether these ranges can only be achieved with an additional fuel tank. It seems like (and Scott Hamilton pointed us to that) that Boeing already said that the MAX-9 range of 3595nm is reached with an additional fuel tank. Boeing did not say anything about the MAX-8 fuel tank configuration to reach 3640nm of range, but it seems logical that this will also be only achievable with the additional fuel tank.
A further hint to that is the difference between the different OEW and MTOW gains, relative to the NG.


Fairchild Dornier 728Jet

Teal Market Forecaster Richard Aboulafia writes a monthly letter on his website. In his latest letter he asks about the fate of the Fairchild Dornier 728Jet Prototype. Well, here it is: it is inside a hangar of the german aerospace research agency  DLR in Goettingen.


Embraer could feel the heat...

Last week's Farnborough Airshow yielded not many surprises - maybe the surprise was that mayn anticipated orders did not happen.
  • Boeing does not have 1000 firm orders (or more) for the B737MAX (but Airbus did not either after the Paris Air Show last year.
  • There was no VLA order from Turkish Airlines (nor from any other).
  • There was no order for the A320neo or the B737MAX from Pegasus. Apparently Boeing trying all they can to keep Pegasus in the Boeing camp...
  • There was also no order from Aeromexico - but all points to an order for Seattle/Chicago here...
But wait - there was one order that was remarkable and that could mark the beginning of a shift in the regional aircraft market. Although this order was not quite a real - firm - order. But the "agreement in principle" between Skywest and MITAC shows that the MRJ gains some confidence in the marketplace despite the recent announced delay in the development schedule and subsequently the EIS.

A few days before Embraer announced their statistics for the second quarter of 2012. backlog is now at a 6 year low for the EJet Family. It fell from 476 aircraft at the end of 2007 to 200 at the end of the second quarter. There are a lot of options, but if these ever get firmed up is not a safe bet.
Embraer shares took a hot following the release of the backlog and analysts called the airshow to be "dismal" for Embraer.
Well, that may be a little bit overstated, as Embraer got a lot of orders at the last airshows, including orders from ALC and GECAS that showed confidence in the EJet Family also from the leasing community.

But in fact Embraer could feel a little bit pressure now to react. The 50 seater replacement cycle in the U.S. regional market just has begun. The MRJ won two rounds, at Trans States and now at Skywest. The direct competitor to the MRJ90 is the E175, but according to todays planning the E190 would get the reengining first. On the other hand Embraer recently announced that there would be an "aerodynamic cleaning up" including new winglets in the works for all the EJet family members that results in a 5% lower fuel burn for the E170 and E175. This could give Embraer some breathing room, but I doubt that this is enough to cope with the brand new design (aircraft & engine) of the MRJ.
Embraer currently plans with an EIS of the E190G2 in 2018, probably meaning that the E175G2 could come in 2019. It remains to be seen if Embraer now speeds up their plans, despite saying that the Skywest order does not change their strategy.


Farnborough Airshow Orders

Here I will try to track all orders and commitments coming in at the Farnborough Airshow (main manufacturers only - sorry).



Farnborough Preview

We are only days away from this years largest air show. There are quite a few previews out there, the most extensive I read comes from Scott Hamilton.
First at all - for me the SST mentioned in Scott's post is nothing more than a marketimg gag - at least for the flying public. The program could serve Boeing as a technology platform for military vehicles in the future, but I doubt that we will ever see a thing like that one shown in the post flying (in full scale at least).
But what about the rest?


CSeries in pricing pressure danger zone

In the last days there are again reports that Boeing and Airbus are accusing each other to start a price war in the narrowbody sector. Boeing argues (more or less between the lines) that Airbus started the row by selling the A320neo without a premium and by that gaining market share (at least in terms of sales) and that Boeing would not let Airbus gaining more than 50%, indirectly saying that they would fight back by cutting prices. Airbus argues that Boeing cuts their prices in campaigns where the B737NG stands (at least theoretically) against the A320neo (campaigns with deliveries between Q4 2015 and Q4 2017), as was the case in the Delta Airlines campaign last year.
In one of my last blog entries I wrote about the backlogs of the A320ceo and the B737NG and that Boeing needs to secure at least another 500 orders for the B737NG to bridge production between the -NG and the -MAX. In fact it is even more than 500 as there would be a gradual production ramp up of the -MAX and ramp down of the -NG. As these additional orders have to be won against the A320neo rather than the A320ceo (given that Airbus left some delivery slots open between EIS of the A320neo and EIS of the B737MAX, we have to expect a fierce pricing battle between Airbus and Boeing for orders with deliveries between these two dates. Boeing earlier said that the -NG would be produced for a long time together with the -MAX. This seems a little bit overoptimistic as of today.
Caught in the middle here is Bombardier with the CSeries. Production for 2013, 2014 and most of 2015 might be sold out, but what for the rest of 2015, 2016 and 2017. Bombardier can probably nothing better than taking part in that price war, hoping that delivery slots both at Airbus and Boeing are sold out until the end of 2017 as soon as possible. Bombardier in no way can win in that price war - they can only drive down margins for the big two where the campaigns are for the lower end of the narrowbody sector.


COC and DOC Part IV

Over at Leeham News where is a heated debate (once more) over if the A320(neo) or the B737(MAX) is the more efficient aircraft. As both aircraft were ordered and are flown in thousands both aircraft obviously cater their respective users - besides there are quite a few airlines operating both aircraft.
I tried to lay out how looking at DOC's or COC's or looking at costs per flight or per seat influences such a comparison in an earlier post.
Let's have another look at it. DOC or Direct Operating Costs are comprised of


A320 and B737 backlog burndown

He cites JP Morgan with an observation that not all of the delivery slots for A320ceo's are filled for 2015 (2014 is full) and therefore it would be a good decision not to boost output further.
Let's have a look at the current number of open orders for the A320ceo as well as those of the B737NG.
Here is how the backlog of A320ceo's develops if there would not be any new sale nor any cancellations. Of course there are some "risk positions" in the backlog: Kingfisher, the remaining Delta (Northwest) and United order and  Mandala come to mind...
As of May 1st, 2012, there were 2084 A320ceo and 1286 A320neo on firm order.


B737MAX - the next diameter!

UPDATE: Jon Ostrower reports that the exact diameter will be 69.4" and that the engine will also get smaller core size. I have not seen the article myself as I do not have a WSJ subscription, but Scott Hamilton has an update on the story, too.
Scott writes that a smaller core fits better under the wing. Well, yes and no - the core, meaning the HPC and HPT are physically smaller, but as the worksplit between the high and low spool changes, the LPT has to do more work now - and at the same time needs to run slower because of the larger fan. So the diameter of the LPT has to move out as described earlier. And there could really be a need for an additional LPT stage with the higher loading of the LPT. Only if the efficiency of the LPT can be kept constant the smaller core size and higher bypass ratio will do any good for SFC and  fuelburn. Temperatures in the core will rise anyway - what this means for maintenance costs customers will see only a few years after putting the engine in service.

It is becoming a real saga: the fan diameter of the B737MAX LEAP-1B engine. Now we are at 70", compared to the 61" of the CFM56-7BE and the last announced 68.4". Read the story at Leeham News here:
Sorry - but, but for me Boeing is loosing credit with every change that is announced (or, as in this case, reported by a credible source). For months Boeing now said "Bigger is not better", defending the B737MAX and the LEAP-1B against the A320neo and the LEAP-1A/PW1100G with their considerably larger fan sizes.
So, is the larger 70" fan just for optical reasons? Just a joke, of course...
A larger fan needs to run slower to keep the efficiency high - or in other words: the tip speed needs to be the same as it was before. But this means that the LPT also needs a larger diameter to keep it's efficiency - or the LPT needs an additional stage. If this is beneficial in the end? It looks like Boeing looks only at fuel burn now, not at overall operating costs in the first place. I eagerly wait for the next press release from Boeing regarding MAX.


A new (civil) engine OEM!

And now for something completely different! Well, not completely - at least, it is about aero engines. But smaller ones: Snecma and Cessna announced, that the new "Silvercrest" engine will power the Cessna Citation Longitude, a stretched version of the Latitude (both models share the same fuselage cross section). The Longitude will be the largest Cessna ever build. The choice of the "Silvercrest" comes with a little bit of surprise, as most Cessna models have P&WC engines. Also the shelved Columbus would have been powered by a P&WC engine, the PW810.
So here is Silvercrest - and with that engine (which will also power the next Dassault Falcon, the "SMS", as "rumours" know) we have a new civil engine OEM - until today, Snecma was "just" a military OEM. Of course, Snecma has a vast experience in the civil sector through CFM as a 50% shareholder. But the business aviation sector is a little bit different than the airlines business.
What strikes me is the claim that the engine will burn 15% less fuel than existing engines in the 10-12,000lbs class. I don't know any engine that is in that thrust class today - it is virtually a new thrust class, so the claim is a little bit misleading or at least difficult to understand.
But further looking into the configuration of that engine, I would say it should be a very efficient one: with a BPR of around 6 the propulsive efficiency is way better than engines we typically have in that arena. And with a 4 stage booster behind the fan and a 4 stage axial/1 stage radial  HPC the OPR should be also considerably higher than for a PW300 or HTF7000 or even the higher thrust BR710.
But I doubt that fuel burn is a decisive factor in that segment anyway. If you buy an aircraft for $26 million and spend (typically) some more million $ for the finishing inside, you do not really care about fuel burn. Business aircraft are only flying 400-500 hours a year.
So please welcome Snecma to the world of civil engine OEM's - and wish them good luck with Silvercrest.


The Superjet Crash

There are a lot of commentaries about the crash of the Superjet in Indonesia, killing all 45 people on board.
Almost all commentaries point out that future Superjet sales will take a hard hit because of the crash - not so fast, I would say: if the reason for the crash was a pilot error, then why should that hurt sales. In the end the Superjet is a modern design with all the latest western systems in it. Fuel burn could of course be better - the design of the SaM146 engine is, like the PW6000, build upon low maintenance costs, not on lowest fuel consumption.
Remember the crash of one of the earliest A320 in 1988 at Muehlhausen-Habsheim: a pilot error also, but many pilots pointed to the fly-by-wire system of the A320 as the root cause. Did it hurt A320 sales in the long run? Definitely not.
Also the crash of one of the A330 prototypes (due to a wrong autopilot input) did not hurt A330 sales.
So I would be careful to predict a slump in sales for the Superjet - it is too early to draw conclusions before we do not know what happened on board, especially in the cockpit.


B777-9 will (more than) challenge the A350-1000

UPDATE: Thank you for the comment! Of course I picked a wrong MTOW for the 777-300ER. I corrected it and the values coming out of it. The basic conclusion keeps the same, especially as the announced SFC reduction of the GE9X will be 10% rather than 7%.
Of course, even with the small increase in inner diameter of the B777-X a ten-abreast seating will be less comfortable than a 9 abreast-seating in the A350. And more capacity is always higher risk (for revenue vs. costs), but for all current B747-400 routes the B777-9 would be the ideal replacement. The A350-1000 will fly with lower costs per flight, so if you can fill the A350-1000 it will be a profit maker as well.
The proposed B777-X models, the larger B777-9 holding about 405 passengers and the B777-8 with about 350 seats, should slash fuel burn per seat by 15% (B777-9 vs. B777-300ER) and about 10% (B777-8 vs. B777-200LR).
Is that possible? Let's have a look by taking a very simple approach and concentrate on the comparison


LEAP leaps ahead...

After Qantas announced that that they choose the LEAP-1A for their 78 A320neo, the CFM engine has a clear lead in the neo engine race. The first A320neo to be delivered will be operated by lowcost subsidiary jetstar. This is a blow to P&W and it's allies, as jetstar is a current IAE V2500 customer. But obviously GE's and CFM's leverage was better - GE supplies the GEnx for Qantas B787 and CFM of course has it's stakes at Qantas on the current 64 aircraft strong B737 fleet. Also the A330 fleet is equipped with the CF6-80.
This deal shows again that despite of current rumours about the LEAP engine being up to 4% behind the GTF in fuel burn (and I personally doubt that the number is actually that high), there are always other considerations driving business decisions at airlines. Fuel burn might have become more important in these days, but there is more to consider for an airline...


Am I biased?

In the airliners.net forum there is a discussion about my last blog entry and that I am biased towards Airbus and the GTF and against Boeing and GE/CFM.

Am I? Well, yes and no! I am partially biased - but only by knowledge (where applicable). After all I am an engineer always looking for the best technical solution.
And I am not biased - I have absolutely nothing against the B737MAX itself. In fact, if you look at a posts from June 2011  you will see that I was sceptical that Boeing will do a NSA (New Small Aircraft) but was in favor of the reengining. I am very sure that Boeing will build a very capable aircraft. If the fuel burn improvement comes out as advertised by Boeing, the range capability of the B737MAX-8 will be for sure better than that of the A320 family. The article from Aspire Aviation points it out, although with the same payload as the A320 (150pax) the B737MAX-8 range will be boosted more than 405nm (as this is the range increase at max payload), so the advantage for the MAX is even larger than 3645nm vs. 3510nm.
I have just (and admittedly not just one time) offered my doubts about the LEAP-X concept, especially for the B737, where the fan diameter is restricted. You just can't argue against physics. And I have seen and read that I am not the only one who have doubts - also regarding the LEAP-1A for the A320neo. And in my last blog I just quoted what was stated in the article with some own comments. I will quote now the preamble of this article to underline that these statements are not my statements, but that they seem to be well researched and credible:

Before you read this article
In the course of its research Airline Economics has gained direct input from the signatories on both sides of agreements for the aircraft and engines in question, from airlines, original equipment manufacturers and lessors. We also have had input from people involved in deals and engineering input from those working on the programmes. Airline Economics is now aware how much was paid for what, what mistakes were made, and knows who is worried. See Airline Economics, issues one, two and three, 201, for background on these aircraft and their engines. Thank you to those that helped with this article.
(end quote)

Currently I am working on a comparison between the A350 family and the proposed B777-X. I am not done yet, but I can already say that the A350, especially the -1000 will not look too good. The -800 will be (if ever build, what seems to be doubtful) what Michael O'Leary would call a dogs dinner, but falls out of the comparison with the B777-X family anyway and does not look good against the B787 family.
Finally, I am a big fan of the GE90-115B fan - not to forget the rest of the engine!


Even more doubts about B737MAX

I obtained a very interesting article from "Airline Economics", a publication from Aviation News. As it is a subscriber only magazine, I cannot upload the full article, but I will quote some interesting statements of the story called "A question of circumstance":
  1. Regarding the engine competition on the A320neo between the GTF and the LEAP-1A: "The end result is that you've got a really big gap between a P&W Neo and a CFMi Neo." To clarify: the gap is in favor of the P&W GTF and Airline Economics is quoting an senior industry expert here, who expects the LEAP to have a 4% disadvantage (what in my eyes is maybe a little bit too much).
  2. Regarding engine competition in the marketplace: "Airline Economics learned early last year that


GTF for B737MAX?

Rumors are spilling over and over since the ISTAT Americas conference in March that Boeing is seriously looking at the P&W GTF as a second engine option in addition to the LEAP-1B for the B737MAX. Aspire Aviation has a long article about the ongoing optimisation of the MAX here and Scott Hamilton is quoted in an article by the New Mexico Business Weekly here. A reason for these rumors seems to be the lack of confirmed orders for the MAX so far. There are only three customers who have ordered the MAX, all others only delivered commitments to the Boeing Headquarter so far. Sure, the year is long, so there is enough time for Boeing to convert the commitments to firm and credible orders, especially as Boeing might be keen to make a similar splash with the MAX at Farnborough as Airbus did with the Neo at Le Bourget last year. But as now there are these rumors about a possible second engine, the committed customers might want to wait and see if there is some truth behind them. So firming up the commitments before there is a final word from Boeing (or P&WA) in either way might be a challenge.
Scott Hamilton expects a decision in the next months - that could also coincide with Farnborough...


Doubts about MAX

Last month I wrote a short entry about Ryanair's Michael O'Leary and what his thoughts are about the B737MAX. Well,  when he talks about aircraft, it barely has to do with physics and what the aircraft can or can not do - it always has more to do with the price for his next deal...
But when the "Godfather of Aircraft Leasing", Steven Udvar-Hazy


Definitive LEAP1-B fan diameter!(?)

Yesterday at the ISTAT Americas conference Mike Bair from Boeing revealed that the LEAP-1B fan diameter for the B737MAX now stands at 68.4". When Boeing and CFM for the first time officially announced a fan diameter for the LEAP1-B in November 2011 (Press Release), it was 68", 7" more than the fan diameter of the CFM56-7BE of the current B737NG.
In the meantime there were news in different but reliable media (LeehamNews, aspire aviation) that the diameter went up to 68 3/4" or 68.5". So now it is 68.4" - what does that tell us?
  1. Size matters - although Boeing denies that. Well, of course there is a sweet spot for every aircraft/engine combination, as Scott Hamilton writes in a recent column, so you can't go everywhere with fan size. But apparently CFM still tries to maximize the fan diameter of the LEAP-1B so it just fits under the wing and to get the best possible fuel burn for the aircraft. That means that 68" is not the sweet spot, but that is is somewhere higher.
  2. It means that the definition of the engine is probably still not finished yet. If the fan size changes, this potentially changes everything else - at least if you want to maximize efficiency of the whole engine. In turn that means that there is still a lot work for Boeing to define to pylon and the pylon/wing interface.
So stay tuned for the next MAX fan diameter...


Airbus A320Neo Engine Race

It is just another "intermediate result" in a race that could last for 20 years or maybe more (and we are just at the beginning): but now that the PW1100G-JM scored another two sales (TransAsia for six aicraft plus six options and GoAir for 72 aircraft), the Geared Turbo Fan is in the lead over the LEAP-1A again. The LEAP engine scored big during the Paris Air Show, taking the lead by a wide margin then after announcing a design change with a seventh LPT stage and a larger fan diameter. With these changes CFM claimed to be as good if not better than the GTF in fuel burn. That claim was dismissed by John Leahy last week when he said that the GTF would be about 1.5% better in fuel burn.
The GTF has now announced orders for 488 aircraft, the LEAP-1A has announced orders for 465 aircraft.

UPADTE:  CFM just annouced that ALAFCO choose the LEAP-1A for the 35 additional A320neo orders. So LEAP-1A is in the lead again:
LEAP-1A:         500
PW1100G-JM: 488


Airbus: GTF better than LEAP...

I obtained an interesting note from Forecast International, itself claiming to be the "Leading Provider of Aerospace, Defense, Electronics and Power Systems Intelligence. Here it is:


Ryanair and B737MAX

Not often I tend to agree with the outspoken Ryanair CEO Michael O´Leary, nicknamed by the twitter community with @MichaelOhReally. But when he recently talked about the B737 MAX, I had to agree with him. He said that he has been impressed by the fuel burn improvement the A320neo promises to deliver, but he is not impressed by the B737 MAX and said that the fuel born improvement is inferior.
Particularly he fears that the heavier CFM LEAP-1B engines and the subsequent heavier airframe will offset the better SFC, when compared to the CFM56-7B(E).
Meanwhile I had the opportunity to read the latest


Norwegian goes the American way...

That was a surprise this morning - it was long rumored that Norwegian is one of the airlines that already committed for the B737MAX (100 firm orders plus 100 purchase rights in addition to a follow-on order for 200 B737-800NG), in that case the -8 model. But that they also would order the A320neo (MoU for 100 aircraft plus 50 purchase rights) could not have been expected.
There are two possible explanations that come to my mind as reasons for that decisions to go away from a single-type fleet:
  1. They went the AA way (of negotiating), meaning they negotiated with both Airbus and Boeing until they got a deal from both they could not resist to close them both.
  2. Their anticipated growth is too large that one of the OEM's could deliver aircraft fast enough to satisfy that growth.
On the other hand it is a little bit discussable if a mixed fleet of B737-800NG and B737MAX-8 would be a single-fleet type anyway. The engines (CFM56-7BE and LEAP-1B) do not have anything in common and Boeing itself talks about 85% commonality between the NG and the MAX. So Norwegian would have had a two-type fleet anyway until the last -800NG would have been phased out. Now that Norwegian gets aircraft from both Airbus and Boeing the last -800NG will be phased out earlier so that the (at that scale) marginally higher costs through having a two-type fleet will be (probably) more than offset by the lower fuel costs.

The next interesting question will be the engine choice for the A320neo. Although the selection of the LEAP-1A to complement the LEAP-1B on the MAX-8 fleet would be the most logical choice, they maybe also go the AA way and buy from both engine manufacturers, like AA did it recently for their A319 (CFM56) and A321 (V2500). So the PW1100G could come into play - the factsheet that Norwegian provided with their press release shows the fan diameter of the PW1100G (81"), but that does not necessarily say anything...