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

Scott Hamilton has a few more details from the Airbus Innovation Days.

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.