1/21/2011

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.

1/17/2011

Another "first" A320NEO customer

After the Airbus year end press conference there was the announcement that Virgin America would purchase - and already signed a firm order - for 30 A320NEO's along with 30 "classic" A320's.
Although this order seems insignificant in size compared to the IndiGo deal last week for 150 A320NEO's, it is indeed significant as it is a firm order, in contrast to the MoU signed by IndiGo.
Virgin America made no engine choice so far, but hopes to decide on the engine by May. This could be the first order for a NEO engine then and could give us some hints. Virgin now operates CFM56 on their A320's.
Expect more orders to flow in for the A320NEO in the next weeks!

The "order battle"

Today Airbus did their yearly press conference to review the past year. The media does get over-hyped days before it and writes about the "order battle" between Airbus and Boeing and speculates about who won the "order race" - as if it would matter if one or the other got a few more orders than the other. For years now the number of orders are close at the end of the year, showing that there is some kind of natural balance in the civil aircraft duopoly. If there were not a balance, there would not be a duopoly.
That brings us to the future, there were will be no more a duopoly: Bombardier will  be the first to break into the territory with the CSeries - I still believe we will see one or two orders until the BBD financial year ends at January 31.
Then the next one could be Embraer, if they decide to build an aircraft similar in size  to the CSeries - or probably a little bit larger to undercut seat mile costs.
The chinese will take a little bit longer to make a difference, I think. Even if they would be able to bring their C919 to market in 2016 - and I doubt that - it would be limited either in numbers, as initial production numbers will be low in comparison to the A320(NEO) and B737 and geographically as I do not think that western operators will take that aircraft until reliability is proven and an acceptable maintenance network is in place.
The russian MS-21 will face the same problems - EIS in 2016 is an amitious goal and Irkut will have to work hard to sell aircraft outside the russian area of  influence. I wonder to whom the first firm customer, Crecom Burj, a new leasing company in Indonesia, will lease their 50 aircraft. Reportedly they want to serve the whole southeast asia market...
So at least in the narrowbody segment there is an end of the duopoly in sight. For the widebody sector the end is far further out. One day the chinese will do a C929 or C939 or whatever it will be called, but I would expect they will go through a second round with their C919 first, trying to make it really competitive to the (then) established products from Airbus, Boeing, Bombardier and Embraer.

1/12/2011

IndiGo launches the A320NEO

Well, here he is: IndiGo, the first customer for the A320NEO. A massive 150 aircraft order means a good start for the programme. Expect more big orders to come soon...
Coincidentally, Scott Hamilton talked about the prediction by Buckingham Research that Boeing will come out with two new models to replace the B717, B737 and B757 by 2018 and will launch this effort officially by late 2011 or 2012.
While Scott (or Buckingham) does not go into details, I guess this would be a single aisle aircraft for the re├╝placement of the B717 and the lower end of the B737 and the "New Light Twin", which was briefly mentioned by Scott at the end of last year for the upper end of the B737 and the B757.
While it would be a good strategy in principle to replace three aircraft (families) with two new ones, I doubt that it will be that fast. How good can these aircraft be - or, in other words, how much better than the NEO? Engines for a 2018 EIS can only be slightly better than for the NEO with EIS 2016. And both CFM and PW have their hands full with developing the engines for the C919 and NEO (CFM) as well as the MRJ, CSeries, MS21 and NEO (PW). So one should not expect a completely new engine by the two manufacturers by 2018 but just minor improvements, which could also be sold to Airbus. And I do not expect RR to catch up in the 30k engine market by then - they lost the NEO competition and they have their hands full with their Trent programmes.
So the advantage has to come from the airframe. As of today, it is not clear if the A320/B737 successors will be build from carbonfibres. Bombardier opted for AlLi, apparently for good reasons.
To be clear, a new aircraft frame  by Boeing by 2018 would of course be better than the A320 frame, there would be 30 years between them. But would it be enough? - I doubt it!
The other question of course: does Boeing have the money to do it and the backing from their shareholders? Developing two aircraft takes a lot of ressources - manpower and money. If they do it, I expect the japanese to take over large parts of the responsibility for the smaller aircraft.
Another fascinating year in aviation just started!