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.