December 2009
Sukhoi (Russia) is rescheduling deliveries of the Superjet 100 indefinitely because of engine development problems.
Superjet 100 was scheduled for flight test in 2007, then in 2008 and now has no date certain for flight-testing.
Superjet 100 is the first civilian aircraft launched in Russia after the collapse of the Soviet Union.
Superjet 100 is priced in the $28M range and has an estimated 150 firm orders and 80 options.
Superjet 100 is designed to compete with Embraer E-Jets and the Bombardier CRJ and is priced in the $28M range.
Superjet 100: Aeroflot is a major buyer and was due to receive the first production units in the first half of 2010.
Sukhoi is in talks with existing buyers about new timeframes for the delivery of the aircraft already ordered.
Superjet 100 is a new, fly-by-wire regional jet (75 to 95 passengers) fitted with two turbofan engine surpassing ICAO noise and emissions requirements.
Aircraft Main System Suppliers: Thales, Messier Dowty, B/E Aerospace, Honeywell, Parker, Hamilton Sundstrand, & BF Goodrich.
Engine: The new PowerJet SaM146 engine (14,000 to 17,500 lb thrust) being certified to European, U.S., and Russian standards.
Engine JV: PowerJet is a development JV between Snecma/Safran (France) and NPO Saturn (Russia).
Engine design: Most of the engine design is based on CFM’s CFM56, jointly developed by Snecma (Sub of SAFRAN, France), and General Electric.
PowerJet is building the PowerJet SaM146 engine that was to be certified by May/June 2010.
Sukhoi’s civil aviation division is building the Superjet 100 airframe. Sukhoi is a subsidiary of United Aviation Corporation (UAC).
UAC was created in 2006, is state-owned, consolidated companies that manufacture, design, and sell military, civilian, transport, and unmanned aircraft.
UAC is projecting revenues of $4B for 2009, $5B in 2010, & is restructuring $2.4B of debt.
NPO Saturn claims that the PowerJet SaM146 is going through the process of receiving necessary documentation and testing.
UAC claims the engine makers shifted to an unspecified timetable for certification because they are not ready.
Pratt & Whitney (P&W) PW100G engine makes headway against the CFM56. www.aviationregister.biz
PW100G allows new airframe manufacturers to enter the commercial jet market and take market share from Airbus and Boeing. www.aviationregister.biz
PW100G poses a threat to the GE/SNECMA strategy of incremental changes to the design of the CFM56 as fitted on the A320 and B737 families. www.aviationregister.biz
PW100G will now be fitted to the Bombardier C-Series, the Mitsubishi Regional Jet (MRJ) and the Russian MS-21.
PW1000G high-bypass turbofan engine was formerly referred to as the Geared Turbofan(TM) engine.
Irkut (Russian manufacturer) selects P&Ws PW1000G for its MS-21 medium range commercial jet due for first delivery in 2015.
MS-21 – Other suppliers: Avionika (Russian) & Rockwell Collins (USA) will provide the avionics systems to be assembled by Irkut.
MS-21 is an $8B project developed by Russia's major manufacturers Ilyushin, Tupolev, and Yakovlev & it will be built by Irkut.
MS-21 will replace the aging Tu-154, which accounts for some 80% of Russia's passenger and freight traffic.
TU-154 replacement: The TU-154 has been exported & operated by about 17 non-Russian airlines and air forces, and about 214 are in service.
MS-21 is also set to compete with the A-320 and B737 aircraft both fitted with the GE/Snecma CFM56 engine.
MS-21 represents a market for more than 200 replacement TU-154s and could easily lock in the Russian market from 2016.
Threat to the future of the CFM56: Add the MS-21 to the C Series and the MRJ, the potential order book could breach 1,000 aircraft.
Threat to the future of the CFM56: If yes, that would be a deathblow for the “future” development of the CFM56.
Threat to the Airbus/Boeing product line: The PW100G undermines Airbus & Boeing orders for 2,378 A320 family and 2,100 B737s worth about $225B!
Airbus & Boeing have the option to add the PW100G engine to any A320/B737 replacement design and as a retrofit to replace the CFM56.
November 2009
Friday 27th November 2009
Dubai, in default, has total government debt estimated at $80B & about 65% of that is held by local investors.
Airbus, Boeing, GE/Pratt, & Rolls-Royce have commitments from Dubai Aerospace and Emirates Airlines for orders valued in excess of $87B.
Airbus and Boeing production lines for the A320, A350, A380, B737NG, B777, and B747 have slots allocated to Dubai Aerospace and Emirates Airlines.
Dubai decision to restructure Dubai World debt affects aerospace banks: Barclays, HSBC, RSBC, Deutsche Bank and ING Group.
Dubai Aerospace subsidiary DAE Capital has an aircraft portfolio comprising 37 single aisle and wide-body aircraft.
DAE Capital has 24 aircraft delivery commitments of which 15 are being purchased for lease back to existing operators.
DAE Capital has committed to invest $27B that will include 100 A320s and A350 XWBs, 100 B737NGs and wide-bodies for delivery from 2010.
Emirates Group is owned by the Government of Dubai via the Investment Corporation of Dubai.
Emirates Group is headquartered in Dubai and is a public international travel and tourism conglomerate holding company.
Emirates Group has 50 business units and employs about 48,000 people.
Emirates Group owns Emirates Airline, the national airline of Dubai and the largest airline in the Middle East.
Emirates, (Est. ’85 with two leased aircraft) has 137 aircraft, flies to 100 cities, carries 25M passengers, $12B revenues, & $265M profits.
Emirates has invested heavily since 2000 in a state-of-the-art fleet.
Emirates operates four wide-body types: A330, A340, A380, and the B777.
2008(July): Emirates received its first A380-800 and in August 2008, it became the second airline to fly the A380-800.
Emirates has firm orders for 163 aircraft, and options for 70 more, 134 aircraft from Airbus and 39 Boeing aircraft; value $60B.
2000 (April): Emirates was a launch customer for the A380, and ordered five A380-800s and two A380-800Fs.
2001: Announced the largest order in aviation history for 58 Airbus and Boeing aircraft valued at $15B including 15 more A380-800s.
2003: Ordered 21 A380-800s.
2005: Announced the largest-ever order for 42 B777 family of aircraft valued at $9.7B.
2006 (April): Ordered two more A380-800s & cancelled the A380 freighter orders.
2006: Signed a Heads of Agreement for 10 B747-8Fs fitted with GE’s GEnx engines, and valued at $3.3B.
2007: Announced a historic civil aviation aircraft order for 120 A350s, 11 A380s, and 12 B777-300ERs, valued at $34.9B.
2007, Emirates A380-800 order book now stood at 58.
2007 Order: Comprises firm orders for 50 A350-900s and 20 A350-1000s, plus 50 options for the A350-900s, delivered begin in 2014.
2007 Order: Emirates brought its total firm order for the A380s to 58.
2009: With the new order for 12 777-300ERs, valued at $3.2B, Emirates has 48 pending delivery and is set to become the world’s largest B777 operator.
Gulf International Bank (Saudi owned) postponed a bond auction scheduled for next week.
Dubai World is the main investment vehicle owned by the government of Dubai.
Dubai World is unable to redeem $3.5B of Islamic bonds (sukuk) in December and will not be able to pay it until at least May 2010.
Dubai World Islamic bond issue was one of the largest ever issued.
United Arab Emirates government failure to support Dubai undermined the assumption that the
Emirates would stand behind the debt of state owned companies.
Dubai rating: Standard & Poor’s has downgraded Dubai based banks with exposure to state owned companies.
Credit insurance: The cost of insuring Dubai’s debt has increased 400% since the Dubai World default was announced.
November 2009
Bombardier is to cut the regional jet (CRJ) and Bombardier amphibious aircraft production rates and layoffs of approximately 715 workers.
Bombardier says that the economic and airline industry environment makes it difficult to win orders for the CRJ aircraft family.
Gulfstream Aerospace Gulfstream G650: This ultra-large-cabin, ultra-long-range business jet has completed its first flight.
G650 rolled out in September, first flight in November 2009, remains on schedule for type certification by 2011, followed by entry-into-service in 2012.
October 2009
Airbus is not cutting cut back the production of commercial aircraft because airlines continue to finance deliveries.
Boeing reports no cancellations of aircraft orders from Chinese airlines noting deliveries have been adjusted in response to weak demand.
Deliveries: Chinese airlines have been negotiating with Boeing to delay the delivery of B787 orders.
Deliveries: The Chinese government encouraged airlines to cancel or delay aircraft orders air
travel growth fell to single digits in 2008.
Whitetails: New commercial aircraft delivered off the production line and placed in storage by the manufacture due to a lack of buyers.
White tail risk: A cash crunch over the winter months may force buyers to cancel aircraft already on the production line forcing them to be parked.
Hawker Beechcraft Corporation (HBC) sold 24 of its new Beechcraft T-6C trainer aircraft ($185.3M) to the Royal Moroccan Air Force.
HBC: This is the first sale of the all-new T-6C trainer. It also marks the company's third contract awarded this year for a Foreign Military Sale.
HBC: The contract is from the U.S. Government and is a government-to-government deal between Morocco and the U.S.
HBC: The T-6C will replace the Government of Morocco's current T-34 basic trainer and Cessna T-37 jet trainers.
U.S. Air Force took delivery of the first of 23 King Air 350ER twin turboprop aircraft in April under a $171M contract as part of Project Liberty.
King Air 350ER features additional nacelle fuel tanks for extended range & a heavier landing gear that raises the gross weight by 1,500 pounds to 16,500 MTOW.
King Air ER can fly for more than eight hours and cruise at 300 knots at 35,000 feet. Dow Jones industrial average rose by 144.80 points, closing above 10,000 for the first time in more than a year.
UAV (unmanned aerial vehicles) market will reach the upper teens in billions of dollars worth of procurement through 2018.
UAV market: The US is the driving force behind this market says Forecast International.
UAV market: US-based companies will account for more than 60% of the market's value."
UAV market trends: Two contracts now in competition will define key roles for unmanned aircraft systems operated by US forces for possibly decades to come.
Airbus intends to complete first flight of its A400M military aircraft program by the end of 2009.
Boeing and Airbus may consider upgrades for the A320 and B737 families using engines other than GE/SNECMA’s (GE) CFM56.
Airbus and Boeing acknowledge that is feasible to modify the design of the A320 and B737 to accommodate engines other than the CFM56.
GE argues that the best solution is not to switch out of the CFM56 but to meet noise and emissions standards by upgrading its technology in increments.
Pratt & Whitney already has an engine design in the field that would be competitive with the CFM56 and wants to outpace GE using technology that is more advanced.
GE hopes that nothing will happen before 2016 because profits from the CFM56 can be generated for years to come.
Airbus sold two aircraft and four orders were cancelled in September as net new orders fell from 125 to 123 aircraft.
Boeing won 170 new orders through September but net orders stand at 79 because of B787 cancellations.
Airbus has delivered 358 jets year to date with a goal to deliver 483 aircraft in 2009.
Embraer delivered 153 regional and business jets year to date and has a firm order backlog of $18.6B.
AirAsia (Malaysian) a low cost carrier postponed delivery of eight of 24 A320-200s aircraft orders from 2011 to 2014.
B747-8 is a loss making program because of lower than projected production rates.
B747-8 production costs increased as market conditions deteriorated and as a result, Boeing plans a $1Bn pre-tax charge in Q3.
B747-8 delays in engineering design resulted in re-work and disruption leading to higher supplier costs, the primary cost drivers.
B747-8 program is costing $640M more to complete than budgeted at both Boeing and its suppliers.
B747-8: Maintaining the B747-8 production rate at 1.5 aircraft rather than 2 per month is costing $360M.
B747-8: Holding the production rate at 1.5 instead of two per month is in response to weak market conditions.
B747-8 lower production rate results in the allocation of fixed costs and supplier volume-based penalties across fewer aircraft, leading to a higher cost per aircraft.
B747-8F: First flight will take place by early 2010 with first delivery in the fourth quarter of 2010.
B747-8 Intercontinental: First delivery of this passenger variant is scheduled for Q4 2011.
Mitsubishi Aircraft Corporation of Japan won an order for 50 plus 50 optioned new MRJ regional jets from Trans State Holdings.
MRJ (Mitsubishi Regional Jet) is a next next-generation regional jet manufactured by Mitsubishi Aircraft Corporation of Japan.
Trans State Holdings (St. Louis) owns Trans State Airlines and GoJet Airlines and operates regional feeder services for United Airlines and US Airways.
Mitsubishi says that many routes in the USA are operated with 50- to 90-seat regional jets, the market that this new technology aircraft is targeting.
Pratt & Whitney Canada (P&WC) is cutting its global workforce by approximately 410 due to a decline in customer demand and weakness in the global aerospace market with no signs of a recovery in 2010.
September 2009
EADS (Airbus) & Boeing stocks are cyclical stocks exposed to the global economy that increased by more than 60% in the last six months in anticipation of an upswing in the business cycle.
Cycle investors believe that consumers will start flying again as countries emerge from recession, then airlines will accept delivery of new aircraft and order more.
Airbus is projecting that global air traffic will grow by up to 4% in 2010 and over 6% in 2011.
Boeing believes global air traffic will fall in 2009, grow by 4% in 2010, and grow 6% in 2011
Airlines may be structurally unprofitable, because fuel prices will rise as the economy recovers leading to long-term losses, surplus capacity and fewer aircraft orders.
Five Year Lag: Based on the historical trend from every single previous cycle, aircraft deliveries bottom out around the point where GDP and traffic growth peak. (Evolution Securities).
Aerospace lag: The aerospace "lag" comes from the five-year gap between ordering an aircraft and having it delivered. (Nick Cunningham, an analyst with Evolution Securities) WTO decision on A380/A320 subsidies could push the $35Bn US Air Force aerial refueling tanker contract towards Boeing.
Airbus and Boeing are also disputing A350 subsidies. So far, $4Bn in subsidized funding has been provided to enable the aircraft to compete with the B787.
Airbus will have to refinance the subsidized loans at commercial rates. Repayments are currently made as A380s are delivered to customers.
A380 reimbursable investment loans were not found to be prohibited in their totality.
Airbus through the European Union has a counter claim that is being reviewed by a separate WTO panel and a decision is due by mid-2010.
A380 ($13Bn), A320 ($8Bn) launch aid subsidies abused global trade rules according to the World Trade Organization (WTO).
WTO decision on A380/A320 subsidies could push the $35Bn US Air Force aerial refueling tanker contract towards Boeing.
Airbus and Boeing are also disputing A350 subsidies. So far, $4Bn in subsidized funding has been provided to enable the aircraft to compete with the B787.
Airbus will have to refinance the subsidized loans at commercial rates. Repayments are currently made as A380s are delivered to customers.
A380 reimbursable investment loans were not found to be prohibited in their totality.
Airbus through the European Union has a counter claim that is being reviewed by a separate WTO panel and a decision is due by mid-2010.
A380 ($13Bn), A320 ($8Bn) launch aid subsidies abused global trade rules according to the World Trade Organization (WTO).
Losses: From 2001 through 2008, U.S. passenger and cargo airlines reported a cumulative deficit of $55 billion, add on 2009 projections and the loss reaches $65BnGulfstream has limited the effects of a global recession by diversifying its customers, adding clients outside the U.S., and moving from public corporations to more private companies and individuals.
More than half of new Gulfstream jet orders are coming from outside North America, and the company’s jet backlog of orders is almost $20Bn.
The company will get a lift as it begins shipping new models, the G250 and G650, in 2011 & 2012.
Gulfstream will see margin growth, increased sales & order book that is going to be ever more robust as the industry comes out of the challenges it’s got right now
General Dynamics, had total sales of $29.3Bn in 2008, including $5.5Bn from the aerospace unit that makes Gulfstream jets.
General Dynamics shares dropped 37% in the past 12 months.
August 2009
The U.S. Navy for anti-submarine warfare, intelligence gathering, reconnaissance, and patrol will use Boeing’s P-8A Poseidon.
CAE: A 27.5% rise in revenue from military orders mostly offset a 19.9% drop from the civil market.
CAE, the flight simulator and aviation training company, had a backlog of $3 Bn at the end of June 2009. Military orders made up $2 Bn of that.
Cessna &Business Jet Cancellations: Cessna’s cancellations continued to soar as revenues fell by $630M or 42% in Q2 of 2009.
Cancellations topped 240 including the 74 orders for the now defunct Citation Columbus. Other cancellations included 59 aircraft orders from large fleet operators, 58 from authorized sales representatives, & 52 from the rest of the customers.
Cessna delivered 84 business jets in Q2 2009, down from 117 in the same period in 2008.
Cessna profits fell by $214M to $48M due to lower sales volume, higher write-downs of its used aircraft inventory & unabsorbed overhead costs from lowered production levels and temporary plant shutdowns.
Cessna removed doubtful orders from the books in Q2, particularly from customers asking for delivery in 2012 and beyond.
Cessna has 277 jets sold for 2009 and should deliver about 275 jets for the full year. Any other cancellations or deferrals could be offset by new orders.
Cessna reports it booked three gross orders a month on average through the 1st 5 months of 2009. That number increased to seven in June.
Cessna used aircraft sales: For the first time in over a year used Citation transactions increased as the availability of used Citations dropped slightly from 17.6% in May to 17.3% in June
Cessna market predictions: Cessna is predicting lower deliveries in 2010 than they did for 2009 but it is too early to call volumes for 2010.
Bell Helicopter profit increased $4M due to improved performance as revenues fell $28M in Q2 due to an unfavorable commercial product mix & program cancellation. Higher commercial pricing helped offset the decreases.
Embraer reported that Q2 earnings fell 49.5% to $68M on 10.9% less revenues of $1.46 Bn vs. $134M in the year-ago period largely owing to fewer higher-value commercial aircraft deliveries.
Embraer reported that Q2 total deliveries numbered 56 aircraft, up from 52 in the year-ago period as E-Jet deliveries declined from 41 to 33. 15 Phenom 100 microjets were delivered.
Embraer reported that Q2 revenue from commercial aircraft sales dropped 14.1% to $972M represented 66.7% of total company revenues.
Embraer reported that the firm commercial backlog numbered 340 aircraft including 328 E-Jets As of June 30, 2009.
Embraer reported that its total backlog including commercial, defense and business aviation was $19.8 Bn compared to $20.7 Bn in the year-ago period.
GE Honda HF1202 engine will reach several milestones in 2009 including its 1st complete engine firing and its 1st flight before the end of 2009.
GE Honda plans to build 13 production quality HF1202 engines by the end of December 2009.
GE Honda HF120Is being prepared for its 1st flight on a Citation CJ1 test bed & certification in late 2010.
Rolls-Royce reported a $2.6 Bn profit in the first half of 2009 vs. a $566M profit in the same period a year-ago largely due to profits from financing
Rolls-Royce: Civil aerospace division reported an underlying profit before financing of $430M down 5.5% year-over-year as revenue rose 8.5% to $3.8 Bn.
Rolls-Royce delivered 424 engines in the first half of 2009 vs. 462 in the year ago period.
Rolls-Royce expects engine deliveries to fall in 2009.
Rolls-Royce: The civil aerospace order book grew by $5.4 Bn in the first half of 2009 to $78 Bn.
JULY 2009
Airbus reported a 20% increase in Q1 revenue to $11.6Bn. Earnings rose $620M vs. $108M the same period a year ago.
Boeing reported Q2 earnings of $998M, a 17% increase over the same period a year ago.
Airbus delivered 254 aircraft to customers in the first half of 2009 vs. 245 in the first half of 2008. Boeing delivered 246 aircraft.
Airbus booked 90 gross orders & 22 cancellations in the first half of 2009 & is expecting 300 orders for the full year.
Airbus has been providing some financial help to a few buyers but this is not proving to be a big drain on the $11.8Bn cash on hand.
Boeing reported that 2009 second quarter profits rose over last year. Despite weak demand, Boeing delivered 124 commercial aircraft, down by one aircraft compared with the same period a year ago.
Boeing reported a 17% rise in second quarter profits as the company continues to assess the financial impact of the latest delay of its new B787. Boeing reiterated its 2009 forecast.
Boeing’s performance is being overshadowed by the continuing uncertainty about the B787 flight schedule.
A revised B787 flight test schedule is expected in the third quarter.
Boeing says that the B787 program is profitable though the company may have to take a charge in the coming quarters once the cost of the B787 delays are known.
Boeing CEO James McNerney says Boeing is making solid progress toward fixing a structural weakness on the B787. McNerney acknowledged that trying to build an aircraft with mostly composite materials had been harder than anticipated.
Macquarie Capital analyst Rob Stallard noted that, "The lack of a new timetable raises the serious possibility that there will be no B787 deliveries in 2010."
Some analysts claim that the B787 program will make a loss in its initial stages and may not make a profit for at least two years after its first delivery.
Click on to the Aircraft page for more B787 information
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Headline News was last updated: December 29, 2009
Service
Guide.
M
Wednesday September 10, 2008
Airbus
May Discuss
New
Restructuring Plans
French newspaper Les Echos reported in September 2008 that Airbus would outline EUR1 billion euros (USD$1.41 billion) of extra cost cuts under its Power 8 Plus plan on top of its USD2.1 billion original Power 8 restructuring plan which runs from 2007 to 2010.
Company officials have said they were looking for around EUR1 billion of extra savings between 2010 and 2012 but that the easiest savings have already been achieved.
The aircraft manufacturer has been forced to revive its restructuring plans after the dollar fell below USD$1.35 to the euro targeted in the original Power 8 plan. Airbus said earlier in 2008 that it now assumed a euro worth USD$1.45 at the end of the program.
The euro is currently worth USD$1.41.
Airbus parent EADS said every 1 cent movement in the currency rate represents a difference of USD100 million at the operating income level.
October 9th 2008.
ARJ21-700
deliveries
pushed back into 2010
by Chineese manufacturer
China's state-run Xinhua news agency reports tha Commercial Aircraft Corporation of China is delaying the the maiden flight of the ARJ21 to late November 2008. Its subsidiary, AVIC I Commercial Aircraft (ACAC) is developing this regiona jet aircraft.
The ARJ21 program has experienced numerous delays and was planning the first flight for late October.
ACAC advises it will take 18 months for the ARJ21 to win Chinese certification.
First delivery to Shandong Airlines wilkl take place in May 2010.
The FAA is cooperating with the Civil Aviation Administration of China to develop a shadow certification program in the expectation that the Chinese certification process will comply with FAA requirements..
Boeing expects to deliver up to 485 jets in 2009 vs. 375 in 2008
October 23rd 2009. Fitch Ratings expects to assign "A+" ratings to upcoming Boeing Capital Corporation (BCC) debt notes as Moody's Investors Service affirms Boeing's A2 debt ratings, while changing the company's rating outlook from stable to negative. Fitch said Boeing could possibly have break-even or negative free cash flow next year, depending on when it can deliver the B787 and other factors, such as pension contributions.
Fitch considers Boeing's credit metrics to be weak for an 'A+' rating. Fitch’s BCC rating reflects the potential adverse effects of the recession and challenging credit market conditions on commercial aircraft demand, lease rates and aircraft values. The A+ ratings apply to new senior unsecured notes that Boeing Capital Corporation issues.
Fitch changed Boeing Corp.'s outlook from stable to negative in April, due to increased concern about the global recession's impact on the commercial aerospace industry, increasing pressure on defense budgets, the health of the aircraft finance market, the risk of further delays in the B787 program and a reduction in the company's liquidity due to its inventory buildup in 2008. Fitch said delays in the B787 and B747-8 programs negatively affected Boeing's credit quality, while cash flow pressures would persist through 2010 due to inventory build-up, delayed advance payments, and higher development expenditures. The B787 developments have eroded the margin of safety at the current rating level according to Fitch.
