Airbus A320neo order speculations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CSeries impact

Last year I wrote an entry about what the Bombardier CSeries meant for aircraft development. Meanwhile Airbus announced the A320NEO programme on Dec 1st, 2010 and announced first customers. I expect more to come forward in the next weeks and months - by the time the Paris Air Show ends, Airbus could have 500+ orders (or at least MoU-like commitments) for the A320NEO in the books.
If you read how Southwest is now pushing Boeing to clarify it's plans for the B737, you can clearly see how the decision by Bombardier to lauch the CSeries affected the whole development cycle:
Virgin America, the launch customer of the A320NEO, looked very seriously to buy the CS300 - it was only when Airbus came forward with the NEO that Virgin decided to stay with Airbus. So, very clearly: without the CSeries there would not be a NEO to buy!
Boeing has to and will react - until lately I was not convinced that they would do a 737 successor. My thoughts were, like John Leahy, that they would announce a reengining of the 737 soon after a launch of the NEO. In the meantime I am a little bit more convinced that they could announce a new narrowbody. Scott Hamilton recently argued why. If Boeing is right to think that the A350-1000 will enter airline service not before 2019 is on another piece of paper - but if they are convinced, it would make sense to do the narrowbody first - well, if it is a narrowbody! It could also be the long-discussed small widebody, starting at around the capacity of todays 737-800 and going up to the capacity of the 757-300. They would leave the 150 seater market to Airbus and possibly Bombardier (CS500?) and maybe Embraer, but they would have another big market for themselves.
At the EADS press conference CEO Louis Gallois thought loudly about a tie-up between OEM's, as the market place gets increasingly crowded during the next decade. There were speculations then that Airbus could partner with Embraer and Boeing with Bombardier - I could also see some cooperations with the japanese Heavies, as I wrote earlier. All this will not happen this year, but the possibility - and good reasons - are there for it that it will happen sometime.

Rolls Royce faces technical and legal battles

What a bad time for Rolls Royce:

August 2: Uncontained Failure on a Trent 1000 in Darby

August 30: Uncontained Failure at a Qantas B747-400 powered by RB211’s

November 4: Uncontained Failure at a Qantas A380-842 powered by Trent 900’s

Not to mention the more minor problems two B747-400 had with a RB211 (apparently a contained failure) and with fuel hydraulics.

And now: Pratt sues Rolls on patent infringement regarding the Trent 900 and Trent 1000 fan blades.

Let us recall: not long ago, in August, Rolls Royce filed a lawsuit against Pratt & Whitney, claiming that P&W would infringe their patented design for swept fan blades with their fan blades on the GP7000 and the PW1000G (and others). This case is due to go before a jury in the US in the first half of 2011.

Pratt & Whitney apparently fights back now, filing also a complaint with the U.S. International Trade Commission (ITC), which could be very damaging for Rolls Royce, as if the ITC rules in Pratt’s favor, RR could get blocked to ship any more Trent 1000’s to Boeing. And if the UK courts come to the same conclusion, RR would also have a problem to ship the Trent 900 to Airbus.

But could that be Pratt’s real interest? Not only P&W and RR would be deadly enemies forever, also Airbus and Boeing would not be happy about P&W, as deliveries for the B787 and A380 to customers with Trent 900 and 1000 engines would be (further) delayed or in the worst case impossible. As a last consequence you could expect RR to go bankrupt.

So I doubt that this is what P&W is really looking for – even if Airbus goes ahead with the A320NEO and P&W developing a version of their PW1000G Geared Turbo Fan for it without Rolls Royce, the two companies will still be tied for centuries, as the V2500 will continue to be shipped until 2015 at least and aftermarket activities will continue  - say – twenty years plus.

So what could be the real goal behind the legal actions?

My guess: P&W wants RR to “cooperate” a little bit more on the narrowbody front:

RR officially states that reengining the current Boeing and Airbus narrowbodies does not make any sense. But it sounded a little bit different until RR was officially put out of the reengining game by Airbus. And as RR has no interest to participate as  a junior partner in the GTF, RR would be out of the narrowbody market at least until a clean sheet design either by Boeing or Airbus arrives. So one can imagine that RR will do everything (legal, of course) they can do to prevent the Airbus reengining by hindering and blocking P&W’s PW1000G to be one of the –NEO engines.

I do not know how the IAE contract between Pratt, RR and the other partners looks like, but maybe RR can block an engine offering for the A320NEO by P&W – or block order conversions from the V2500 to a PW1000G once the A320NEO is officially offered to costumers.

It will be interesting to see how RR will come out of these two battles:

-          the technical battle: RR has to regain confidence on the Trent 900/1000 – and maybe the XWB

-          the legal battle with P&W

Thinking about LEAP-X and TECH-X

Over the last week there was growing speculation about when the LEAP-X engine, one of the candidates for the A320NEO, would be ready for the planned EIS in late 2015. I briefly discussed that matter in my last post, referring to an article in the AviationWeek. Meanwhile, also Ernest Arvai from AirInsight posted a story, speculating what might be behind the A320NEO decision holdup.

So let us go back in history – well, it’s just two or three years anyway…:

In 2008 at the Farnborough Airshow, when CFM for the first time talked about the LEAP-X in public, a certification in 2016 was announced as possible.

This announcement meant a turning point for CFM, as with the LEAP-X CFM changed their engine architecture strategy from a core with a single stage HPT to a 2 stage HPT. Simultaneously, the HPC got an additional 2 stages, driving up the pressure ratio from 16 to about 22 and thus becoming (more or less) a scaled down GEnx HPC. Thus, by changing the core architecture, the LEAP56 became the LEAP-X.

The reason for this radical change was rising fuel prices, changing the balance between fuel costs and maintenance costs in the equation for determining the operating costs of an aircraft. Fuel became the No.1 in operating costs for many airlines, particularly in the U.S., by then exceeding labor costs.

But obviously the preparations for LEAP56 and tests for the single stage HPT core were too advanced to stop the whole effort. This core was now called the eCore1 and was tested in two campaigns starting in 2009. The eCore2 will be tested in mid 2011, a second build is foreseen for mid 2012. The first engine to test should spin in early 2013 with certification expected by CFM sometimes in 2014.

In 2008, the LEAP-X handout (thanks, Scott!) at Farnborough showed a similar timeline with the eCore2 testing at the end of 2011 and a “Full Engine Demo” in 2012.

So the core tests moved a little bit to the right, the FETT moved a year out, but certification is aimed two years earlier.

An here the speculation begins:

• CFM has dramatically accelerated their pace of technology development
• CFM ousted some technologies to be ready for a 2014 certification, sacrificing SFC and maybe adding these technologies in a second step

Then there is the TECH-X. Building on the same technologies, the same core, scaled down from the LEAP-X, this engine was chosen by Bombardier to power their new Global Family members (Global 7000 and Global 8000). The Global 7000 will hit the market in 2016. What does that mean for the engine? Take a look at the rival, the Gulfstream 650. First flight happened in November 2009, certification is planned for 2011, first deliveries to customers are slated for 2012. Flight tests thus take about 2 years. Even if we assume that Bombardier will hand over the first aircraft right after certification we can assume that the flight test will take about two years, so the TECH-X engine has to be certified in late 2014 to meet the (late) 2016 delivery target.

The GE press release sets the official timetable like this:

• eCore Demonstrator 2 in 2011
• first engine run in 2013

That would allow a certification in 2014 – so far, so good.

But then I stumbled across this article from Flightglobal’s John Croft, stating that building up the first engine would be in 2013 with the engine running in 2014. That would allow for a certification only in 2015. I am puzzled…

Now – the whole thing would not really be that important as there is no competing engine on the Global 7000/8000. But if one transfers that story over to the A320NEO, this could be the key to many answers surrounding the questions why the widely anticipated launch of the –NEO did not happen so far.

CFM did not react so far about the growing speculations that a late 2015 EIS LEAP-X for the A320NEO might be not the LEAP-X with the fuel burn vs. the current CFM56 (-15%) as advertised. The aero-geek-public is keen to know (at least I am), so let's wait for a clarification on this matter coming from Cincinnati or Villaroche.

737 sales inflation

Recent weeks saw an inflationary order boom of Boeing's 737. 30, 40, 50 at a time, Unidentified Customers mostly. Boeing has sold 446 of the 737 so far this year, with only 14 cancellations. Book-to-bill ratio is well above 1. If you take the already announced production rates into account, production now would run until mid 2016 without any further orders.
Airbus does not have this sales fortune with their A320 family so far this year - 221 sales is not bad, of course, but book-to-bill is clearly below 1. Still, without any further orders and with announced production rates, the last A320 family aircraft would leave the factory in mid 2016.
But what could be behind the recent sales success of the Boeing 737? Here is my (2 cents worth) theory:
Boeing tries to drive Airbus into the -NEO by selling the 737 at huge discounts and then outperforming the A320NEO with a new aircraft.
If you followed the conference call on Boeing's 3rd quarter results, you can guess that Boeing decided not to reengine and to develop a 737 successor for the 2020 time frame. Whether Airbus believes that this successor will be significantly better than the A320NEO will probably trigger the decision pro or contra the -NEO.
If Airbus believes that in the early 20's there is not much more technology out there than today, then Airbus will go forward with reengining (or is it reengineing?). But if Airbus fears an overwhelming superior competitor coming out of that development, then Airbus will forego the -NEO idea.
So what technology could be there ready for EIS in the early 2020's - meaning that it is available (TechnologyReadyLevel6 for techies) in 2016 at the latest? Enginewise: not much more than today I would say. Rereading an article from AviationWeek it is even questionable if all the engine technology for the -NEO would be there in 2016, as the article suggests that the LEAP-X1C for the C919 does not feature all the technology CFM officially claims it has on hands - if that is true, then this would also be true for the potential CFM offering for the A320NEO and the 737RE - and maybe that is the reason why Boeing kind of backs aways from the -RE story. Combined with the well-known problems for installing the larger engine under the wing of the 737, the LEAP-X would not get to the same SFC level than the larger fan-GTF (81", as Airbus revealed at the ISTAT conference) for the A320.
So, if the differentiation between a A320NEO can't come from the engine, it has to come from the aircraft itself. What is possible? A carbon-fibre fuselage, of course. Although, a recent posting from AirInsight suggests that maybe Aluminium-Lithium could be the material of choice for future high-cycle aircraft - just look at the Bombardier CSeries.
Anyway, significant weight savings could come from a new material. But then I guess everybody expects the fuselage to be wider than today's 737, at least matching the A320 in cabin comfort - meaning, that a portion of the weight savings is eaten up by the larger fuselage diameter.
A few years ago Boeing scrapped their 737RS studies. I talked to a Boeing Technical Fellow not long after that announcement and he told me that one of the reasons was that they did not found enough weight savings back then. As today's 737NG is still build upon the certification of the very first 737, Boeing did not have to take care for some (weight costly) security measures that you have to build into an airplane if you want to certify it today. The Boeing Fellow expected the extra weight you have to put into the aircraft at 10,000lbs, if I remember correctly. So Boeing would have to find 10,000lbs weight savings to be where they are today...
The wing is another area to improve the efficiency of an aircraft. Here chances to see carbon-fibre is better than for the fuselage. Lower weight and better aerodynamics could lead to a few percentage points in improvement.
Another way to improve efficiency is to enlarge the aircraft, as this article suggests (of course this works out for the airline only when they can fill the aircraft).
Undoubtly, the trend goes to larger aircraft and there is no replacement for the ca. 1000 757's on the horizon so far. So both next generation narrowbody families from Airbus and Boeing will cover the 757 - at least in passenger capacity, not necessarily in range.
So, what is my verdict on the -NEO question? Don't know, but we all should know by December 31.
Until then we can all have fun with speculating, just as I did here.