BREAKING: US Secretary of State Kerry first to fly the A320neo

Apparently Airbus sped up the development effort for the A320neo. It appears that US Secretary of State John Kerry was among the first who were able to fly in the reengined european narowbody during a visit of the Philippines. Look here for details! No mentioning of who is the first customer of the A320neo - but in the end: could it be the US Government???

Boeing also having a "Fifth Season" this year?

After giving an outlook to Airbus' Fifth Season for this year yesterday, I want to look what we can expect from Boeing until the end of the year? Will it also be a record year? The last year was the year were Boeing took in a record number of orders, thanks largely to the B737MAX, which had it's first

Fifth Season Time in Toulouse

The end of the year is near and so it is fifth season time again for John Leahy. Tomorrow we will see if he can sell some 60-90 aircraft to Air Canada, believed to be A320neo and A321neo's (or B737MAX-8/-9 if his counterparts at Boeing succeed).
But there are quite some more sales to complete this year and chances are good that Leahy will top the old record from 2011, when the A320neo had it's first full year of sales.
So what can we expect apart from Air Canada? Another awaited order for narrowbodies could come from Monarch. Both Air Canada and Monarch could also put a CSeries order in their shopping cart,

Lufthansa in "panic mode"?

Today there is news (only in German as of now) that Lufthansa and Austrian Airlines are "downgrading" miles flown with Turkish Airlines in their frequent flyer program "Miles & More". Customers who fly with Turkish Airlines on will only get a quarter of the flown miles as status miles. Austrian has canceled the code sharing with THY altogether effective summer 2014. Also Lufthansa is thinking about reducing their code sharing with THY.
This looks a little bit like Lufthansa being in panic mode. In the last two years, there have been multiple opportunities for Lufthansa to set up a wide ranging partnership with THY to fend off the three large gulf carriers. But the Lufthansa management seemed to be confident to go their way without it. Now that Turkish Airlines expanded in Germany big way, flying to 14 destinations today and just announced another one (Kassel-Calden) and many customers including business class customers flying to the Far East prefer THY due to prices and service, Lufthansa reacts.
The only way this move makes sense is that LH has another big plan on the table. Last week there I saw there were news that Lufthansa and Emirates are talking to each other ... could there be another alliance a la Emirates/Qantas in the making?

The pending A320 production increase (announcement)...

John Leahy just today stated (not for the first time) that Airbus thinks about an increase in A320 production. I think an increase is out of question. The flydubai order for up to 100 B737MAX-8 could be the last trigger.
flydubai reportedly leaned pro Airbus for some time. But after Boeing decided to bring B737 production up to 47 in 2017 they were able to offer MAX slots in the second half of 2017. And these 60 extra slots per year could now trigger more sale campaign wins for Boeing and the B737MAX versus the A320neo. So Airbus has to react quickly and try to find delivery slots especially in 2017 and 2018.
On the other hand Boeing's increase raises the question how many more B737NG slots have to be filled until mid 2017, as one should guess that there is not a step change once the B737MAX starts delivery and the increase to 47 per month should create some more delivery slots in 2016 and 2017 for the B737NG, which is already short of orders in my calculation.

Dubai Air Show

The Dubai Air Show is approaching and according to the press conference schedule it will start with a busy Sunday. Boeing has occasionally blocked two conference rooms at once, so we can conclude that they expect to have some announcements. But many deals are made perfect in the last minute, so many the bookings could be tentative. Just think of how the story between Qatar and Airbus went two years ago when U-Turn Al accused Airbus of not knowing how to build airplanes just to order some dozens an hour later...

I think it is out of question that the B777X - or the B777-8/-9 how we can call it now - will be the big star of the show. I don't think that the negative vote of the IAM regarding the contract offer from Boeing will have any impact on the orders from Emirates, Etihad, Cathay, Qatar(???) and who else looks for this aircraft. And although there seems to be some discussions about the engine thrust needed (A350-1000 anyone?) I don't think that bothers these airlines to order now. But it could lead to some new discussions between Boeing and Lufthansa (and GE probably) as I guess Lufthansa can very well sort out what impact on seat costs for their typical routes a more powerful (and therefore heavier and thirstier) engine and a heavier aircraft has. It is fair to believe Lufthansa was already offered a very good price, being the first airline to officially order the aircraft. But a further price reduction, based on the cost impact the more powerful engine for, say, 12 years is in the cards.

That will not undermine the business case for the new B777 family, of course. In fact, I wonder if we will see the B777-8/-9 to sell even faster than the B787? With the expected block buster orders from the Gulf carriers to begin with that could very well be...

What else can we expect?

Some orders for the A320neo and the A350 for Etihad maybe. Spicejet is rumored to lean towards the A320neo. Jet Airways is also in the running for the next round of narrowbodies and according to rumors have already ordered the B737MAX as an unidentified customer but wants the A320neo for JetKonnect. flydubai also could order narrowbodies as well as Air Arabia. Monarch Airlines said some weeks ago they are close to make an order, but that does not have to be in sync with the Dubai Air Show.

We could also see some engine decisions regarding the A320neo. There are a few large orders pending. The decisions from American Airlines will probably take a while as they have come out of bankruptcy and to sort out the merger with US Airways first. But there is Lion Air (174 A/C), easyjet (100 A/C), the second batch of Lufthansa (70 A/C), the second 50 A/C from Norwegian, Turkish Airlines (57 A/C) and many others...

There are probably also some engine orders open for the B787 that could be announced.

With the expected orders for the new B777 this Air Show will probably set a new record for orders in terms of value!

A350 overweight?

Airbus quietly unveiled new payload-range data for the three A350 models on it's website.
The A350-900 now seats 315 (was 314), but flies 350nm less: 7,750nm.
The A350-800 now seats 276 (was 270), but flies 250nm less: 8,250nm
The A350-1000 now seats 369 (was 350), but flies 400nm less: 8,000nm

As this comes about 5 months after first flight I guess it has something to do with the initial performance of the aircraft. What it is exactly we cannot know. It could be:

• higher than anticipated SFC of the Trent XWB engines
• higher aircraft weight which now became clear cannot be brought down
• aerodynamic inefficiencies

What strikes my eyes that the one more passenger in the A350-900 (for whom we suggest a generous extra weight of 300lbs including seat etc.) costs more range than the six passengers more in the -800. And the 19 extra passengers cost only 50nm more than the one passenger in the -900. Although the -1000 is structural different than the -800 and the -900 and the engines are different too, this is not really conclusive.

I guess we can expect some argueing duels between John Leahy and Randy Tinseth over these new numbers in Dubai next week. Randy will not miss out to bash the A350 for ranges that are (nominally) again not meeting Emirates range expectations (DXB-LAX) whereas "his" B777-9 will do so (although I would expect Emirates to fly these long routes with a 3 class layout with less than 350 passengers in a A350-1000). And John Leahy will try and find a way to spin something positive around these numbers...

UPDATE: in fact these numbrs are NOT NEW and where already shown in 2011, long before the first flight and probably also the SFC of the certificated Trent XWB became clear.

Boeing B737NG order drain

Last week Boeing announced that production of the B737 will be ramped up from currently 38 copies per month to 42 next year (that was not new) and then 47 per month in 2017, when the B737MAX enters service. Boeing did not elaborate further if only MAX production will be higher from the start or if also the NG will see higher production meanwhile. But we can presume that a step of 5 more aircraft a month cannot be taken at once, so there should be a more or less gradual ramp up from 42 to 47 over a year or even more than that. That means that at least in the last year of full B737NG (before B737MAX enters service), Boeing has to sell even more B737NG's. I wonder how Boeing wants to manage this without substantial price cuts - even more substantial we are seeing today for

Dubai Air Show approaches: it's "U-Turn Al" Showtime again!

Every politician knows it: things can change! But there is no competition to as fast as things change in Doha at the headquarter of the 5 star airline Qatar.
Not long ago Qatar was seen as one of the launch customers for the Boeing B777-X. In fact it was the chief itself claiming that the airline wants to be the first customer for the new aircraft family - Aspire Aviation just yesterday published a long piece about the B777X and speculated about the first customers.
But now everything has changed - at least in the mind of "U-Turn Al" (it is about time that he gets an entry in wikipedia I guess). Suddenly Qatar Airways is "not interested" in ordering the B777X.
For now, we should add - or for just that event yesterday in Doha. Of course, things could change again. And Qatar might want to be the launch customer for...well - maybe the A350-1100, because John Leahy told him that this aircraft would be better? Just a very wild guess and I find it's more likely that Al will turn his stance again and order the B777X after Boeing gave him the right discount.

Discussion about the B757 replacement

Scott  Hamilton from Leeham has a post about the possible replacement of the B757.
 King5 then came out with it's own story, citing Scott.

I have to say I do not believe we will see a clean-sheet aircraft as a replacement for the B757 - at least not in the time frame Scott is mentioning. He sees a window for EIS opening in 2025, with Boeing probably being the first mover.
The reasons:

1. Business Case for B737MAX and A320neo. The A320neo will delivered from October 2015 onwards, the B737MAX roughly two years later (July 2017 as it looks right now). If a B757 replacement would be available in 2025, announced to the public by 2020, the B737MAX-9 would be dead by then. The B757 replacement aircraft (B757R) would be more economical on all missions - not just on the longer ones. In other words: if the -MAX9 would be more economical on shorter missions, there would be no justification for launching the B757R. In

Leahys latest order goal...

Today John Leahy said that Airbus now eyes 1,200 orders for this year. Until the end of September Airbus racked up orders for 1,112 aircraft. Taking into account 50 cancellations net orders stood at 1,062. Then today we learned about the JAL order for 31 A350, so we are at 1,093 net. Adding the latest announced orders for the A320 family (62 for Vietjet, 23 for Qingdao, 20 for Zhejiang and another 100 for Air Chian and Shenzen), Airbus would be well over 1,200. And then there is the Dubai Air Show where I would expect that Airbus will try to counter the expected order bonanza for the B777X with some announcements (there are rumours that flydubai could switch to Airbus...).
So an ambitious goal would be - say - 1,500 net orders. But maybe Leahy wants to have more time to go fishing rather than selling more aircraft...

Emirates asking for A380 engine enhancements

Emirates obviously wants some enhancements for their A380 engines - at least for the aircraft that should one day replace the first ninety. The last of these aircraft will be delivered in 2017 and by that time Airbus will have delivered around 240 A380 if all production slots are filled until that time. Well, obviously some of the ordered aircraft will be either delivered later as their deliveries are deferred (like for Virgin Atlantic) of won't be delivered at all (read: Kingfisher and probably Hong Kong Airlines as well as Air Austral).
Two engine manufactures share the A380 market: Rolls Royce and the Engine Alliance (50:50 JV between GE and P&W). Let's say both have around 50% of the market (actually, thanks to the large Emirates orderbook EA has a slight lead), then both manufacturers will have delivered 480 engines plus spares.
Now Emirates asks for a "propulsion technology crossover into the A380, in terms of what they’re doing on the 777X, the A320neo and the 737MAX”, says Emirates president Clark and claims that one of the EA partners will produce "wonders in propulsion technology" by 2020, when the A380 still should have GP7200 engines (and the Trent 900 of course as well). So he asks what the plans from GE and P&W are to improve propulsion efficiency of the GP7200.
my first question would be who of the two EA partners will produce these "wonders"?

• Does he refer to the GE9X? He should have a good knowledge about what GE is planning for this engine, although some questions arose around his comment that the engine would need water injection to be able to lift the B777X from Dubai year-round: read the first reaction from GE here, another one here. Clearly, the GE9X will be the state-of-the-art engine in it's class, encompassing the Trent XWB-97, as overall pressure ratio and bypass ratio will be higher and the use of CMC should save some cooling air, further elevating the core efficiency compared to the latest Trent engine.
• Or does he refer to the Geared Turbo Fan from P&W. From all what we know this engine defines the segment of the regional and  narrowbody engines for the years to come (closely followed by the LEAP engine family, of course).

Nevertheless which engine concept Clark has in mind, I wonder if the two partners in the EA are ready for a big improvement programme for the GP7200. Small improvements have already been made: today's GP7200 are better by 2% than original spec values. To improve the engine by any big (SFC percentage) number should be at least very costly, if not impossible without a change in architecture. But with only about 500 engines of the GP7200 sold by then there would be no hope for the engine program to ever produce a profit. So EA (as well as RR) will do whatever they can to avoid another large development investment in the engine. RR could on the other hand also offer a downrated Trent XWB, although this engine might be too heavy for the wing as it is today.
Last week , there was speculation in a german newspaper about what might be the A380 going forward plan from Airbus. Günter Butschek, Airbus COO speculated about "modifications" for the aircraft, Heinrich Großbongardt, a german aviation consultant, speculated about an A380neo. I guess in Hartford, Cincinnati and Derby this was not a fun-to-read...

Lufthansa Widebody Order

Not surprisingly, Lufthansa gave a "soft launch" (as the aicraft is not officially launched by Boeing) for the B777X today by announcing to order 34 of the B777-9(X). Including 7 options and purchase rights the order could be for up to 64 aircraft of the type.
Also, Lufthansa ordered 25 A350-900 with 15 more options and 20 purchase rights.
One thing that was mentioned during the press conference is that the A350-900 was considered the right aircraft in it's class due to it's range. This is a little but surprising as Lufthansa often argued that today's aircraft often offer too much range and therefore carry to much wing (and therefore weight), unnecessary loosing efficiency. The B787-10 with it's "limited" range of "only" around 7000nm range therefore was tipped to be Lufthansa's favourite for the A340-300 replacement. But Lufthansa decided in favor of the A350-900 and thus more flexibility.
The B777-9 order is of course a huge endorsement for Boeing. I guess we will see a raft of orders now following until the end of the year (mainly during the Dubai Air Show together with an official launch I guess) and I would not be surprised if the new B777 would break the record and sell even faster than the B787.



The B777-9 in LH colours (copyright by Lufthansa)

The A350-900 in LH colours (copyright by Lufthansa)

Lufthansa "launches" another aircraft

Remember? It was Lufthansa who launched the Bombardier CSeries with it's "Letter of Interest" on the eve of the Farnborough Air Show 2008. Now, just days after the CSeries conducted the first flight, it looks like Lufthansa will launch the B777-9 with it's long awaited widebody order due this week (Supervisory Board meets on Wednesday).
Lufthansa has a long history of being the launch customer for new aircraft. Most notably probably for the B737 (-100 and -300), but also for the B747-400, B747-8I, the A310, A340 and the A321.
Not all of these aircraft were (or are) as successful as the B737 and the A321, but from the sales of the current B777-300ER one can expect that the B777-9 (and -8) will eventually be best-sellers.
This week will not just be a first flight week, but also a first order week...

First Flight Days

Yesterday finally the first flight of the Bombardier CSeries CS100 happened, about nine months late. JUST nine months late, one has to say these days. Comparing to the delays of the latest aircraft from Airbus and Boeing nine months is not so bad...
Now we have to watch how quickly Bombardier can bring the following test aircraft up in the air. FTV2 should follow within a month, Bombardier previously said. If that really holds true, we might see a first delivery in 2014, otherwise I expect a slip into 2015.

Today another, considerably larger aircraft, will have it's first flight: the B787-9. Originally scheduled to enter airline service in 2010, the first delivery to Air New Zealand should now happen mid-2014. Of course, much of the delay is due to the delay of the original B787-8, but approximately another half year of delay came after the B787-8 flight test program was finished.
I expect the B787-9 to get more sales than the B787-8. And probably also the B787-10 will surpass the -8.

CSeries doing further taxi tests...

The CSeries FTV1 is just doing further taxi tests and reached 120mph during the third run of the day. Watch it live here:
http://planefinder.net/flight/BBD501

CSeries makes progress to first flight

Finally, the CSeries FTV1 just makes high speed taxi tests. For best up-to-the-minute coverage, please follow Sylvain Faust on Twitter (@sylvainfaust).
If these tests today are not showing any snags, the first flight will follow soon. Weather for Sunday is not too promising, but better for Monday, so whatch out for a first flight early next week...

Airbus overbooking A320ceo slots

With Delta Air Lines today announcing the plan to purchase 30 A321ceo (along with 10 A330-300) it becomes clear that all the remaining A320ceo slots are booked now and that it is very likely that Airbus overbooks the slots.
As of July31 there were 1.787 open orders for the A320ceo family in the orderbook. Now let us consider the following orders to get cancelled:

• Kinfisher/Kingfisher Red 67 aircraft
• United Airlines                 30 aircraft
• Alphastream                     15 aircraft
• Northwest Airlines             7 aircraft
• Croatia                                4 aircraft
• Hamburg International       2 aircraft

There are now some announced orders which are not yet in the Airbus O&D table:

• Delta Airlines                       30 aircraft
• Vueling                                30 aircraft
• CASC                                   42 aircraft
• Air China / Shenzen             40 aircraft

This is a net of 17 orders, so we get 1804 open orders as of July 31st.
With a production rate of 42 and 11.5 months of production per year another 1092 aircraft will have been delivered until the end of October, when the A320neo will enter airline service, leaving .
A320ceo production will ramp down from that point in time. Assume Airbus can hold the rate of 42 aircraft per month steady.
I read somewhere that 12 A320neo should leave the factories in 2015 and 100 in 2016. So from the 564 aircraft produced from November 2015 until December 2016 464 will be ceo's, leaving the ceo backlog at 374. For 2017 I guess that around 60% of all produced A320 will be neo's (289 from 483), so the ceo number delivered in 2017 would be 194 and the remaining backlog at the beginning of 2018 would be 180. Airbus said before that the A320neo should reach 100% share in early 2018, so it is clear that the A320ceo are overbooked at the moment. Maybe this is not unwise as one of the two neo engine suppliers could be late - who knows...

UPDATE: I forgot to mention the American Airlines order: the order for a combined 130 A319ceo and A321ceo is not part of the orderbook. The first two aircraft were delivered in July, then three in August and another one in early September. Airbus leases these aircraft directly to American and then sells them with the lease attached. Not all deliveries will follow that procedure: ILFC ordered 15 A321 recently to lease to AA, so these 15 A321 are part of the orderbook and we do not know how many aircraft from the recent order for 3 A319 and 5 A321 from CIT are destined for AA and how many aircraft will come from other already existing orders fom leasing companies. But Airbus already said that around 30 aircraft will follow the procedure of the first four A319, which were sold to Avolon. So we have another expansion of the orderbook and further overbooking of the A320ceo slots.
             

Race to First Flight

In early June the aviation world still wondered which aircraft would fly first: the Bombardier CSeries CS100 or the A350-900. Then, in the week before the Paris Air Show Airbus managed to get the A350 up in the air. During the Air Show Bombardier officials still stated that the CS100 would fly until the end of June, aka in the last week of June. Then First Flight was delayed until "by the end of July", due to an upgrade of the software. The end of July came and Bombardier once again delayed the first flight, now only saying that it would happen "in the coming weeks".
During that time Low Speed Taxi tests happened and Transport Canada recently awarded the Flight Test Permit.
During the Moscow Air Show two airlines announced that they would take five CS300 each from Ilyushin Finance Lease (VIM and UTAir Ukraine).
But we are still waiting for first flight and we haven't heard of any high speed taxi test and the RTO (rejected take off). And now we hear that Boeing is not too far away from getting the B787-9 in the air. So which aircraft will be first to get the landing gear up from the ground? Once again the (virtual) race is on. Of course none of the two manufacturer will rush just to be first - safety is always first! But it's time for Bombardier to prove that the CSeries is not a paper aircraft!

The long wait...

Two days, two announcements, two delays: yesterday Bombardier told the aviation public that the CSeries will not fly in July for the first time, but in „the coming weeks“.

Today Mitsubishi Aircraft announced that the MRJ will not fly this year, but until the end of 2014  - a full one year delay (again). This is of course disappointing. According to the article Mitsubishi still has problems how to document the design and the production of the parts to be compliant with certification rules (this is my interpretation, based on what was the reason for the last delay). At least, it seems, there seems nothing wrong with the design of the aircraft itself.

The same can be said for the CSeries – hopefully! It seems that the integration of the software takes more time than planned. The question is why until now the Bombardier executives always build up pressure by announcing exactly when first flight will happen. Airbus with the A350 was smarter by only saying first flight would happen in the second half of 2013 and the surprising the aviation world by beating that target by two weeks. At least Bombardier has learned now by being vague. On the other side that does not build up confidence, especially because fixed dates were given three times before (end of 2012, end of June 2013, in July 2013). So everyone who waits for this first all-new narrowbody since the A320 first flew in 26 years ago in 1987 should hope that “in the coming weeks” does mean in the “next low single digit number of weeks”.

Airbus raises order target

OK, John Leahy is a little bit late to acknowledge there are more orders to come this year (at least later than me) and he now expects more than 1000 orders, instead of more than 800 and the initial goal of more than 700. And as we know how John Leahy ticks, he never wants to under-deliver and we can be pretty sure that he already has the customers in mind which will make him reach that target.
At the end of June there were 758 orders. Then Easyjet got the OK from their shareholders to order 35 A320ceo and 100 A320neo. Then there is the MoU from Hong Kong Aviation for 60 A320neo and the MoU from Doric for 20 A380. Also there is an commitment for 2 more A380 from Lufthansa. The order from SAS for 8 A350-900 and 4 A330-300 needs to be firmed up also, as well as the order from Kuwait Airways for 25 aircraft. Here we are: 1012!
Then there are new orders still to be decided: Monarch, Vueling, Lufthansa (widebodies), flydubai, Air Canada and probably some others also.
Still room to lift the target once or twice...

Paris Air Show 2013 Recap

The Paris Air Show 2013 is history – and it wrote (at least a little bit) of aviation history:

Embraer

On the opening day it was Embraer to launch it’s highly anticipated EJet E2 family. Not surprisingly, the E195-E2 will be a stretch of the current E195. Also no surprise that the E170 will not be continued and that the E190-E2 will stay where it is, sizewise. The E175-E2 will be a little bit larger in capacity, stretching it’s fuselage by 0.62m or 24.4inches. The effect is that two more seats can be fitted and in a 1-class 31” layout there are now 88 seats compared to 86 seats in the current E175. This is exactly the figure that Mitsubishi gives for the MRJ90 – any questions? With the same engine as the MRJ will get, the same cabin capacity and a new wing (even larger now than the MRJ wing) the fuel efficiency of the two aircraft should be very close to each other. The MTOW of the E175-E2 is a little bit higher (44.33 t vs. 42.8t), but the Embraer has more range, too (1920nm vs. 1780nm).

Pre Paris Air Show tidbits

The Air Show is only three days away now and we have the first flight of the A350. So, no wonder that we see a lot of news stories coming out. Here are some of them:

1. Enders expects orders for "hundreds" of Airbus aicraft: As I wrote earlier I always thought that John Leahy and Tom Enders were overly pessimistic with their forecast of "only" 700 orders, later expecting 700-750 orders, later upping that number to more than 800. At the end of May there were 517 net and 493 net orders. Add 102 orders for Lufthansa (30 A320ceo, 70 A320neo and 2 A380), then add Air France for 25 A350-900, add 100 A320 for Air China and Shenzen, another 18 A330 and 42 A320 for CASC and you already have 804 net orders - all these orders are announced. Then add the "hundreds" we will see next week and Airbus will easily have more than 1,000 net orders for the year with the Dubai Air Show still to come...

2. Airbus is now (again) the front runner at easyjet. We will see how that campaign ends up. I guess it is not over yet and I do not expect the deal to be finished during the Paris Air Show. Profit margins for the winning manufacturers (aircraft and engines) will probably be dismal.

3. Not unexpected: Boeing will launch the B787-10 at PAS13. This was in the "rumour mill" for a long time now. Boeing will kick-start the B787-10 with a bunch of orders from Singapore Airlines (which already came forward), United, ALC and British Airways. I could imagine one or two other "surprise" customers.

4. Rany Tinseth thinks that this will be the Show of the Widebodies. Hmm, read that somewhere before I think. He should definitely be right about that!

Embraer EJets G2 launch at Paris Air Show

Embraer will host a press conference regarding commercial aviation during the Paris Air Show next week on Monday (see the press release here). My strong guess is that this is where we will see the official launch of the EJet G2 Series.

And I guess Embraer will not only announce the official go-ahead but also will announce one or more first customers for the three-member strong family.

A320neo engine orders at Paris Air Show

The ever-entertaining story about market share on the A320neo family goes into another round at the Paris Air Show. Two years ago CFM hit back hard at P&W during the Air Show. P&W had won the first round of orders back then with ILFC first committing to the PW1100G for 60 of their 100 aircraft strong A320neo order. Also Indigo choose the Geared Turbo Fan as well as Lufthansa.

Then CFM came back after redesigning the LEAP-1A with another (7th) stage of low pressure turbine and a slightly larger fan (78" instead of 75") to gain SFC. CFM then won SAS, Republic, Air Asia, GECAS (no surprise here), the remaining 40 aircraft from ILFC and Virgin America and was in a comfortable lead. During the last two years each of the two manufacturers won a deal here and there and the CFM consortium is still ahead with about 53% of the engine orders. So let's take a look at the A320neo orders which do not have an (announced) engine decision yet and how the picture could change after the Paris Air Show.

B737MAX vs. A320neo: Backlog Comparison

Boeing and TUI Travel today announced a commitment for 60 B737MAX (-8 and -9 versions) with an option for a further 90 aircraft. Boeing now has 1471 firm orders and commitments for the B737MAX. Airbus has, including the to-be-firmed order from Air China and Shenzen Airlines for a

Southwest launches the B737MAX-7

Yesterday Boeing and Southwest Airlines announced that SWA will be the launch customer of the B737MAX-7. The launch of the B737MAX-7 with an order for 30 aircraft of that type comes with

• a cancellation of 30 orders for the B737-700NG
• Southwest substituting 5 -700NG to the -800NG variant
• Southwest firming 5 options for the -800NG
• the cancellation of 5 options for NG aircraft

Paris Air Show 2013 - The Widebody Show

After the 2011 edition of the Paris Air Show was dominated by the A320neo, this year seems to be the show of the Widebodies. The usual suspects as Emirates and Qatar will surely play a major role here, as we can read here (as for Qatar) and here (as for Emirates). Although the B777X is not mentioned in the first article we can be sure that Qatar will also be one of the first customers for the then largest twin. Probably not only the B777X will get it's first orders but also the B787-10 will see a formal launch with a first wave of orders. Airbus, of course, will try not to stand by and have it's own order book filled, mainly that of the A350.
The future of the A380 could play a role in conjunction with the launch of the B777X as the seat costs of the double decker will come under pressure once the B777-9 will enter service. So we might hear what Airbus has on it's plate for 2020 and beyond, as also Ben Sandilands suggests - although he thinks that might need a little bit more time.

Geared Turbo Fan Backlog Secrets

The P&W press release revealing the selection of the PW1133G for the A321neo for Hawaiian Airlines states that the Geared Turbo Fan Family now has more than 3,500 announced and unannounced orders and options. I wondered how much unannounced orders there are and tried to do a breakdown of the announced orders.

PW1100G

Lion Air Accident

On Saturday a B737-800 crashed into the sea just before reaching the runway of Bali.
Some "analysts" and "experts" were quick to question Lion Air's safety in the light of the quick expansion and rapid growth of the airline. They did not care to wait for what the pilots had to say about the accident and what had caused it. As we can read here the pilot has about 15,000 flight hours and is a flight instructor and the co-pilot, who was in charge, has about 2,000 flight hours so I would rule out any reason relating to inexperience of the flight crew. It appears that the reason was weather related, heavy rain and a wind shear or a downdraft might have caused the crash.
As safe as today's aircraft are - there isn't any powerful force than mother nature. We should never forget this! Even the safest airline can't be "safe" enough not to be prone to the forces of nature.

Why is Leahy so pessimistic?

Airbus Salesman John Leahy seems not to be too optimistic about selling a lot of aircraft at this year's Paris Air Show. He still expects to sell around 750 aircraft this year. At the end of March there were sold 431 aircraft according to the published Excel Sheet on their website. Additionally, we know that Lufthansa will buy another 100 A320 and 2 A380, Turkish will buy 83 A320 and Mandala 18 A320 through Tiger Airways exercising options (although Mandala will probably then cancel their old order for 25 A320's).
Before cancellations this would be then 633 orders. Knowing that there are a lot of decisions still looming this year and that not only the Paris Air Show but also the Dubai Air Show is coming, I would be surprised if the orderbook for 2013 would only see 750 orders. But maybe Leahy was talking about net orders and he already knows that Kingfisher will cancel all their outstanding orders this year. Also, there are outstanding orders for United and Northwest (now Delta of course) for A320's and I do not expect them to be filled. Mexicana is now defunct and their 4 open orders will sooner or later also disappear.

Turkish Airlines orders more Narrowbodies

As I envisioned here, Turkish Airlines will not just rely on Airbus for their future narrowbody fleet. Today THY announced that they placed orders for 20 B737-800, 40 B737MAX-8 and 10 B737MAX-9. THY also placed 25 options. On March 15 Turkish Airlines announced to buy 20 A321, 4 A320neo and 53 A321neo and placed 35 options for further A321neo.

Airbus and Boeing Narrowbody Market Share

Scott Hamilton just posted an article comparing the narrowbody market share of Airbus and Boeing, also comparing the subtypes. One aspect that is always missing when the backlogs of the A320neo and the B737MAX are compared is that the neo will be on the market two years earlier and what that means for "early availability".
Airbus and Boeing will both produce about 42 narrowbody aircraft a month when the reengined aircraft come to market. That means both will produce roughly 480-500 narrowbodies a year. That being said and assumed that the ramp up from the first production model to full production of the new model will be at the same pace at both manufacturers means that Airbus has an (at least theoretical) "early availability" advantage for the A320neo as long as the backlog is not between 960-1000 aircraft larger than that of the B737MAX. In detail that depends on the exact delivery dates for the individual airline customers, of course.
Right now Airbus has 2,068 firm orders, but counting the orders from Turkish Airlines and Lufthansa, which will probably be firmed up in the next weeks, there will be 2,198 firm orders.
Boeing meanwhile counts 1,185 firm orders for the B737MAX, so the difference is just about two years of full production now and in theory there is no "early availability" advantage for Airbus anymore. Let's see where the difference is after the Paris Air Show in June.

More narrowbody orders

As forecasted, we have already seen quite impressive narrowbody orders this year, although the Paris Air Show is still ahead of us.

For example, there are already orders for 461 more A320neo family aircraft – remarkably most of the for the A321neo – this year. In 2012 we saw 478 firm orders, some of which had already been announced at the Paris Air Show in 2011.

The B737MAX had it’s big year in 2012, so we cannot expect that we see more than the 949 orders from 2012 in 2013 again. So far the B737MAX got 121 orders this year.

But I expect more big orders for both narrowbodies in 2013. I already wrote about China and the needs of the airlines there, but now it becomes clearer.  According to CAPA (Centre for Aviation) , the China Times writes that chinese airlines will order about 500 narrowbodies from both Airbus and Boeing in 2013. About half of these orders would be for the neo and MAX models. This would not only be a(nother) boost for both reengining programs, it would also fill further the remaining delivery slots for the current models.

Adam Pilarski from AVITAS still thinks that we see a bubble with all these narrowbody orders. He could be right – if we would see an economic crisis hitting South East Asia and China, a lot of these orders would quickly disappear. But as long as these economies are thriving, Airbus and Boeing (and in the long run probably also Bombardier and Embraer) have nothing to fear but not being able to quickly enough deliver the ordered aircraft.

The Boeing - Ryanair deal

It looks like Ryanair and Boeing will today announce their deal for (according to the latest information) 170 B737-800NG’s.

This deal will help both parties:

• Ryanair can grow further. They currently do not have any aircraft on order after the last was delivered in December 2012
• Boeing can fill a lot of open slots for the B737NG until the B737MAX arrives. I wrote about that earlier…

Rynair’s outspoken boss Michael O’Leary is (until today) not positive about the B737MAX, naming the aircraft a “dog’s dinner of a design”. Ordering new-built NG’s now means that Ryanair faces (for example) Norwegian as a competitor who then flies the B737MAX. The B737MAX is advertised by Boeing as burning 13% less fuel than the B737NG.

What does that mean? Knowing how Michael O’Leary likes to do deals one could imagine that he demands a purchasing price for the NG’s that is lower by the amount the NG’s are costing more in operating cost as they burn more fuel.

From the latest company presentation (Q3 2013) I got the following information:

-          Fuel is hedged at approx. $1000/ton

-          The $ is hedged at 1.32€

-          The cost per pax ex fuel is 27€

-          Revenue per pax is 51€

-          Load factor is 81%

For the average sector length I found several information (not directly from Ryanair) indicating it should be something like 1165km or 629nm.

Now  I calculated the fuel burn for a 629nm sector with 153pax (81%*189 seats). Fuel burn was calculated at 8,951lbs or 4,060kg. Fuel costs are then $4,060 or 3,075€ per flight. Per passenger this is $26.53 or 20.10€.

Total costs per passenger and flight is then (27€+20.10€)=47.10€. Ryanair therefore makes a profit of 3.90€ per passenger – not bad!

Now what would happen if Ryanair would switch to the B737MAX? Fuel burn would be 13% less, about 17.50€ per passenger in other words:  profit per passenger would be 2.60€ or nearly 53% higher! Here you have the answer why both the A320neo and the B737MAX are (and will be) so popular with Low Cost Carriers in particular.

If MOL wants to have the fuel burn difference as a lower purchase price upfront we simply multiply the number of passengers one aircraft carries over a year, multiply that with 2.60€ and with the number of years the aircraft stays in service with Ryanair typically. You can get answers here and I found out that seven years is a good number.

The summary of the Q3 2013 presentation says that with the current fleet of 305 B737-800NG Ryanair will carry about 79million passengers this year. Per aircraft this is 259,000 passengers. For seven years this is 4.713m.€ or $6.13m. worth of fuel costs versus a B737MAX. We can expect that this is the “extra discount” that MOL demanded from Boeing compared to the deal that Norwegian got for their B737MAX order last year – and we can expect that Norwegian already got a good deal as they have been the European launch customer for the B737MAX.

Good days for the A320!

What a week for Airbus! John Leahy predicted at the beginning of last week during his presentation at the ISTAT conference that until the end of March Airbus will have more than 2000 orders for the A320neo. While the number itself is technically just as good as 1900 or 2100, it justifies once more the decision to go ahead with the neo program in December 2010. Boeing, as it seems, was really caught by surprise, despite Airbus was talking about the possible launch for months before deciding to launch the neo program.

Lufthansa

The Lufthansa order was not a big surprise. I wrote about that in an earlier post. Nico Buchholz, VP

A new chance for the A330neo?

Qatar Airways ever communicating Akbar Al Baker yesterday told the press that Airbus would drop the A350-800. Airbus instantly denied, so nobody can tell for sure what is the fate of the smallest model of the A350 family.

Norwegian leases A340-300 to bridge the B787 gap

Norwegian will wet-lease two A340-300 from HiFly to bridge the gap until the B787-8 will arrive after the battery problem is solved. How will that impact their operations? Interestingly, the two A340 are from a batch originally flown by Singapore Airlines, then given back to Boeing in exchange for B777’s. Boeing sold them to BBAM and they leased the aircraft to Emirates. The two A340-300 are now due to arrive at HiFly. So in the end Boeing has to lease Airbus aircraft to airline customers to make up the problems with the B787.

Pricing pressure on the B737NG

Boeing for the first time acknowledged pricing pressure for the B737NG yesterday, when Ray Conner, CEO of Boeing Commercial Airplanes spoke at the JP Morgan Aerospace Conference. A synopsis can be found here at Leeham News and Comment. Read also the comment to get an insight of what readers think about how Boeing handles the battery problem of the B787.

Conner also said that there was (and is, I suppose) pricing pressure on the B737MAX, but this is normal for new aircraft entering the market.

Where the pricing pressure comes from gets clear when we look at the number of open orders and the orders Boeing has to fill until the B737MAX enters service in late 2017 and until the B737MAX

Good day for Bombardier CSeries!

It was a good day for the Bombardier CSeries yesterday (Feb. 20th).

The PW1500G, P&W’s first Geared Turbo Fan, was certified by Transport Canada. As the development of a complete new engine is always a risk, now one major risk on the whole CSeries program isn’t one anymore. It is also good news for Embraer, planning to use the same engine with slight changes to the externals  dubbed as PW1900G, for the upcoming and still-to-launch E190G2 and E195G2. Embraer can now bank on an engine that is proven in service for a few years when the G2 EJets enter service. That might have been one reason to choose the GTF over the NG34 and LEAP engines from GE and CFM.

But back to the Bombardier CSeries. The aircraft program got also a major commercial boost yesterday, when Ilyushin Finance signed a firm order for 32 CS300 plus 10 options. The original LoI called for 3 CS100 and 7 CS300 with ten options and ten purchase rights, so Ilyushin Finance upped their original commitment substantially.

Now the whole aerospace world is waiting for the first flight of the CSeries (and as well for the first flight of the A350 and London bookmakers are taking bets who is first).

Later today there will be  the conference call for results of the fourth quarter and fiscal year ended Dec. 31^st. Maybe we will hear more on the progress of the program.

ICAO's new noise and CO2 regulations a miss!

The International Civil Aviation Organization’s (ICAO’s) Committee on Aviation Environmental Protection (CAEP) proudly tells us that they achieved agreements  for future CO2  and noise regulations. Nothing particular is said about the CO2 standards, although they were already heavily criticized by Dimitro Simos, author of the Aircraft Performance Software PIANO when a draft of the plan was outlined in mid 2012.

Media hype about B787 test flights

The recent media hype about the test flight(s) now allowed for narrowing the cause of the two battery incidents of the Japan Air Lines and ANA B787 is quite funny in one way. On the other side, it is a little bit sad to see that so many articles are out there in the (written) press and in the Internet and that people find it important to twitter from starting the engines from landing (God thanks!) safely again - as if now every minute the aircraft could come down because every battery could fail every minute. This coverage is not just a little bit exaggerated - it's a hype. The same people could easily comment every minute that an A380 that did not get the wing fix yet is still up in the air...
The problem for Boeing is not to keep the B787 in the air during the test flights - the problem is how to come out of the dilemma: how do they want to make FAA 1000% certain that the aircraft and the battery is safe without changing the design of the battery and surroundings or changing to another battery type. At the end there are just those two options, I guess. And then there are the "How long will it take..." questions:

• How long will that take to get the new design or a new battery?
• How long will it take to get hardware to put it into one of the test aircraft?
• And how long will it take to recertify the aircraft with that?
• How long will it take to ramp up production for the new hardware?
• How long will it take to incorporate the change into the 50 aircraft that are delivered?
• How long will it take to change the aircraft that are now ready for delivery but are waiting for the fix?
• How long and how many aircraft on the production line have to wait to get the new hardware?

I think that from those questions it gets immediately clear that Boeing has a serious problem in getting the B787 to customers waiting for the aircraft - it won't be just a few weeks that deliveries will restart.

Narrowbody Outlook 2013

After Boeing and Airbus unveiled their final order and delivery numbers for 2012 it is now time to turn to what is ahead. What will 2013 bring us in the narrowbody segment?

Let’s begin with deliveries – this is quite easy:

·         Airbus stabilizes their output rate at 42/month and will deliver 480-485 A320 family aircraft (ca. 11.5*42 as we have to take the summer break into account)

·         Boeing will increase the delivery rate towards  38 B737NG’s per month and therefore deliver between 450-460 narrowbodies.

·         Bombardier will deliver the first CS100 in 2014, so A & B are (probably for the last time) alone.

Narrowbody Review 2012 Part 2

After the Airbus Press Conference is over we now have the long awaited numbers of orders and

B787 grounded...

It is not clear yet what the grounding by FAA and others means for the whole B787 program as nobody knows how long the grounding will last and what consequences will come out of the

Orders, orders, orders...

Starting early last week we see another MoU firmed up (MEA, Avolon), a new MoU (Hawaiian) or even a completely new order (Citilink) for the A320neo. An exception was last Friday, when Airbus and Singapore announced the order for 5 more A380 and 20 more A350-900.
I am now sure that John Leahy will tell the audience on Thursday that he now has (more than) 2000 orders and commitments for the A320neo. Maybe even 2000 or more firm orders.
Today's order came from BOC Aviation for 25 A320neo as well as 25 A320ceo, further filling the remaining delivery positions for the "ceo".
I wonder who is featured in Leahy's 5th season show tomorrow. And who is going to be the rabbit jumping out of Leahy's hat on Thursday.
That leads me to...Lion! They reportedly will order or have ordered more than 200 A320's. I believe it when I see it...Scott Hamilton reports also that they selected the GTF for this order - if this is all true, it would be a huge blow for both Boeing and CFM.
The firmation of the AA order is subject to cout approval now (as is the MAX and B787 order).

Embraers choice is the GTF

Embraer yesterday revealed that it has selected Pratt's GTF family for the yet to be officially launched EJet revamp, due to enter service in 2018.
The E175G2 will get the PW1700G, which is a derivative of the PW1200G, powering the Mitsubishi MRJ70 and MRJ90 (and eventually the MRJ100 now under consideration).
The E190G2 and E195G2 will be powered by the PW1900G, essentially a PW1500G, which powers

B737MAX reaches 1,000 firm order mark

Boeing announced a firm order from ACG for 50 60 B737MAX. The poll is therefore closed. The Airbus poll is open for another few days...