Farnborough International Airshow News

The 787 departed Farnborough yesterday afternoon escorted by two Supermarine Spitfires. Photo: Geoffrey Thomas

McNerney: Boeing will defend its markets from encroachment

Boeing Chairman, President and CEO Jim McNerney said yesterday that Boeing will “defend its territory" in the narrowbody market space, which he defined as 110 seats and above and which he charged has become overcrowded with some government-subsidized ventures.

Bombardier has targeted the CSeries for the 110/150-seat market, arguing that neither Airbus nor Boeing has a strong candidate in the under-150-seat category, while both China's C919 and Russia's MC-21 are aimed at the market of up to 200 or so seats. Speaking here at a journalists' roundtable, McNerney also suggested that any template that emerges from the World Trade Organization investigations into government aid into Airbus and Boeing aircraft programs should be applied to all countries, not just the US and Europe.

Talking with ATW, McNerney predicted a long, slow recovery while acknowledging that the rate of orders at this year's Farnborough International Airshow has been robust. "There is some pent-up demand from leasing companies, with no major orders in the past two years," he suggested.

He also predicted that Boeing will surpass Airbus in terms of aircraft deliveries beginning in 2011 after trailing for several years. "If you do the math, we have a dominant share in the widebody segment and the 787 deliveries will put us in front," he explained. Addressing the issue of market demand for new aircraft in the 737 and 777 classes, he said he would "prefer not to do two all-new aircraft" at the same time. "That would be stressful and not the way I would want to do it. The key question in the narrowbody decision [is] when would you do it? If it was 2020 [to market] the case for the re-engine weakens but if it is 2025 the re-engine case strengthens." He believes 737 customers will wait for the right solution.

On Boeing’s next move, McNerney claimed the company has a significant technological and intellectual property advantage over its competitors with the 787 behind it and will keep its vast engineering talent employed. "We will not give up the design next time and will keep more work inside," he said.—By Geoffrey Thomas

Boeing's turn for Air Lease orders

Air Lease Corp., the new operating lessor created by International Lease Finance Corp. co-founder and former chairman and CEO Steven Udvar-Hazy continued its Farnborough buying spree yesterday, placing orders for 54 737NGs with six options worth a combined $4.6 billion.

It also ordered new regional jet and turboprop equipment from Embraer and ATR (see items below). On Monday Air Lease ordered 51 A320 family aircraft. Deliveries of the 737s will start in 2012 and continue through 2017. The order for CFM56-7B engines to power the jets has yet to be inked.

"We have selected the Boeing Next-Generation 737-800 as a cornerstone of our growing commercial aircraft lease fleet. The 737-800 represents an opportunity for our wide range of airline clients to operate this most economical, fuel efficient and versatile 150/189-passenger airplane on a wide variety of airline missions profitably," Udvar-Hazy said.—By Geoffrey Thomas

ATR reveals strong 2010 sales

After a very quiet first half, with disclosed orders for just six ATR 72-500s, ATR surprised the industry yesterday by announcing that it has sold 42 aircraft this year, with options for 30 more. The total means that it already has surpassed its 2010 target of "stabilizing the good results of 2009," when it had orders for 40 new aircraft plus 17 options.

The 36 new orders and 30 new options include a contract from David Neeleman's Azul Linhas Aereasfor 20 firm and 20 option ATR 72-600s and a contract from Steven Udvar-Hazy's Air Lease Corp. for10 72-600s and options for 10 more. Six firm orders remain undisclosed. The orders from Air Lease mark the first time in more than two decades that ATR has received a speculative order from an operating lessor, CEO Filippo Bagnato confirmed to this website.

Interestingly, Udvar-Hazy never ordered turboprops or regional jets during his nearly four decades running ILFC. He told ATW that Air Lease talked with some 16 different airlines that are interested in the -600 series, adding that “the primary emphasis [for placing the turboprops] will be outside the US." He expects most of the aircraft will configured in a single class.

Azul’s deal with ATR is worth $850 million including options, with deliveries commencing in late 2011. "We will add one ATR per month for the next four years," Neeleman said, noting that he founded four different airlines in his life but "this is the first time I ordered turboprops."

The ATR 72-600’s will enable Azul to serve "even more cities in the vast Brazilian territory, linking smaller communities with major cities with seamless connectivity between our jets and the new ATRs," the Azul chairman said. He confirmed to ATW that he looked at the Q400, but "the -600s have a 30% better fuel burn on the same stage length. We also don’t need the [Q400’s] extra seats or the higher speed on the short stage length of about 500 km. that we will operate the aircraft on."--By Cathy Buyck

Embraer 2010 commitments reach triple digits

Embraer also rebounded from a slow start to the year, announcing orders, options, purchase rights and letters of intent for up to 160 E-Jets from Flybe and Air Lease Corp.

Flybe signed a contract to purchase "up to 140” E-175 and E-family aircraft, comprising 35 firm CF34-8E-powered E-175s valued at $1.3 billion, 65 undesignated options and 40 undesignated purchase rights. Deliveries of the firm aircraft will begin in September 2011 with the final scheduled delivery in March 2017.

"This is a tremendously attractive deal," Chairman and CEO Jim French said, pointing out that Flybe is ordering at the bottom of the equipment cycle. "The E-Jets will allow us to export our business model into Continental Europe over the next decade," he added. The purchase follows the recent announcement of a "deep and long" commercial cooperation with Air France.

The aircraft will be used for growth or to replace part of the Q400 fleet, "depending on our needs," according to French, who explained, "I remain a firm believer in the turboprop and we still have a Q400 core business, but we have to have absolute flexibility in everything we do." The first Q400s come off lease in October 2011 but can be extended. Flybe's 175s will be configured with 88 seats.

The firm engine order was valued at more than $360 million at list prices. Flybe also signed a 10-year GE OnPoint solution services agreement valued at more than $100 million.

ALC signed an LOI for 15 E-190s plus five options. Five of the 15 orders are reconfirmable, the companies stated. "We have been following the growing market demand for the Embraer 190 for many years," Air Lease President and COO John Plueger said. "We are now absolutely convinced that it is the right aircraft for not only the regional jet marketplace but that its powerful and compelling economics, passenger appeal and reliability, position it to occupy a significant segment of mainline operations."--By Cathy Buyck

LAN signs MOU for 50 A320s; Hong Kong Airlines signs for A350s

LAN Airlines signed an MOU for 50 A320 family aircraft including 10 A321s, Airbus announced here. If consummated, the order will represent the largest single airline order for Airbus in Latin America and brings LAN’s total Airbus orders to 152 aircraft, the manufacturer said. Engine selection was not announced.

Separately, Hong Kong Airlines signed an MOU with Airbus to acquire 15 A350XWBs and 10 A330-200s. Order represents the conversion of 15 existing A330 orders to A350s plus an order for 10 A330s. Deliveries of the A330s will begin in 2012, with the first A350 XWB arriving in 2018.

Pratt nears FETT milestone on geared turbofan

Pratt & Whitney is on schedule to achieve the important First Engine to Test milestone for the PW1500G for the CSeries at its Palm Beach facility in Florida next month, P&W President David Hess said here yesterday. More than 260 hr. of testing on the new core has been completed and results are "spot on in terms of meeting engineering predictions," he said, while the fan gear system has been through more than 40,000 cycles of testing without a problem.

The company's aggressive stance that the PW1000G will offer a 20% reduction in MRO costs compared to today's engines despite the added complexity of a geared fan has drawn some skepticism from airlines, Hess acknowledged. "It's a big number. They wonder how are we going to do that…But as we take them through the data the skepticism kind of goes away. I think we've convinced Airbus, we've convinced Embraer and others that the number is real."

Earlier in the week, Qatar Airways CEO Akbar Al Baker said the carrier would have liked to announce an order for the CSeries at Farnborough but that "the engine manufacturer is the stumbling block" amid speculation that maintenance cost guarantee issues were behind the disagreement. Yesterday Hess said Pratt has had discussions with QR and Bombardier "to see if we can bring that order home." The PW1500G test program will run a total of eight test engines over the next 24 months with aircraft first flight and engine certification scheduled for 2012. Entry into service on the CS100 is scheduled for 2013.—By Perry Flint

GE Aviation tallies large engine orders

GE Aviation said Etihad Airways finalized the purchase of 78 GEnx-1B engines to power its order for 35 787s announced during the Paris Air Show in 2009. Total value of the order is $1.8 billion with deliveries beginning in 2015. Additionally, Etihad signed a 15-year OnPoint solutions agreement with GE Aviation covering MRO. GE Aviation said the agreement is worth more than $2.5 billion over the life of the contract.

Separately, GE Aviation valued the engine share of Emirates’ order for 30 GE90-115B-powered 777-300ERs announced Monday at $2 billion, The engine selection includes a 12-year OnPoint solution services agreement worth $1 billion, GE said.

IAE announces $1.3 billion in V2500 sales

Vietnam Airlines selected the IAE V2500 to power a new fleet of 36 A321s it has on order with deliveries scheduled to begin in April 2011. IAE valued the deal at more than $700 million. VN currently has 22 IAE-powered aircraft.

IAE also announced that China Southern Airlines selected the V2500 to power a fleet of 20 A320s it has on order with deliveries beginning in 2011. The contract includes a long-term Aftermarket Services Agreement. IAE valued the engine and support deal at in excess of $400 million.

Additionally, Yemen Airways ordered the V2500 Select One to power 10 A320s with deliveries beginning in 2011. IAE noted that this is the first time the Sana'a-based carrier has chosen the V2500 for the A320. "Fundamental to Yemenia’s decision was the engine’s superior performance and reliability in arduous hot and high conditions," IAE said. Including a long-term Aftermarket Services agreement, the deal is worth $200 million.

Busy Farnborough for CFM

CFM International said Air Chinaselected CFM56-5Bs to power 20 firm A320 aircraft scheduled to begin delivering in 2011. The agreement is valued at approximately $600 million including a long-term Rate Per Flight Hour maintenance agreement.

China Eastern Airlines also selected the CFM56-5B to power 30 new A320 family aircraft with deliveries beginning in March 2011 valued at approximately $600 million at list price. Like its sibling, it signed a long-term RPFH agreement.

Afriqiyah Airways signed a 10-year OnPoint solution agreement for the maintenance, repair and overhaul of its CFM56-5B engine fleet. The agreement is valued at more than $50 million over the life of the contract. Afriqiyah ordered 28 CFM56-5Bs to power its A320s with 14 engines in service.

Royal Jordanian yesterday signed an order for three 787-8s valued at approximately $500 million at average list prices, bringing its total commitments for the type to 11 including four aircraft that will be leased. Like previously ordered Dreamliners, the new aircraft will be powered by GEnx engines. The commitment was listed on Boeing's website as being from an unidentified customer. RJ President and CEO Hussein Dabbas explained that the airline had planned to lease the aircraft from LCAL, but when that company cancelled them RJ decided to take advantage of the opportunity to acquire the jets directly. The first 787s arrive in 2013 and all will have been delivered by 2016. They will be used to replace A310s and eventually A330s and also for growth opportunities made possible by the 787's longer range, Dabbas told ATW.

He said RJ remains committed to its model of connecting short-haul regional traffic to popular long-haul destinations via its hub in Amman. "We consider the Levantour catchment area," he explained, noting that the strategy of serving secondary destinations such as Aleppowith direct service to Ammanis working quite well. He drew a distinction between this model and the "long-haul to long-haul " strategy of Persian Gulfcarriers. "We consider ourselves a boutique airline, not a 1,000-room hotel," he joked.

Dublin-based leasing company Avolon announced it is the customer for 12 737-800s valued at $921 million that were posted to the Boeing website in December 2009 as being from an unidentified customer. Avolon CEO Domhnal Slattery said the order represents "a further step in the company’s goal of becoming a global leader in aircraft leasing. Having our own delivery stream of new aircraft is a natural complement to our sale and leaseback and other financing capabilities." Avolon launched in May 2010 with a successful capital raising of $1.4 billion and its three partners are Cinven, CVC Capital Partners and Oak Hill Capital Partners. The order for the CFM-56 engines is yet to be signed.

Sukhoi Civil Aircraft Co. and Orient Thai Airlines signed an LOI for 12 Superjet 100/95Bs and 12 options and indicated they target to finalize the purchase agreement before year end. Deliveries are scheduled for 2011-14. The privately held Thai carrier currently operates 11 MD-80s and four 747s.

Rolls-Royce said Air Transat signed up for extended TotalCare services and Trent700EP (Enhanced Performance) engine kits. Value of the deal was not announced. The new seven-year extended TotalCare services contract covers five Trent700-powered A330s, four of which were covered under previous TotalCare arrangements. The new EP kits will be incorporated into the airline’s Trent700 engines over the next two years.

CAE signed an agreement with Mitsubishi Aircraft Corp. "to develop and deliver a comprehensive training solution for the MRJ." The agreement includes a "10-year Exclusive Training Provider" program and establishment of two training centers initially in Japanand the USand the development of a CAE 7000 Series full-flight simulator for the MRJ as well as Simfinity integrated procedures trainers. CAE also will design curriculum and courseware and provide CAE training for pilots, maintenance technicians, cabin crew, dispatchers and ground support personnel. The simulators will be the world's first two MRJ FFSs and will be deployed by CAE at the two training centers established for MRJ training.

Mechtronix announced that ATR selected its FFT X advanced full flight trainer to support EIS of the ATR 42/72-600. The device will be used for the training of pilots--both conversion and transition courses--as well as maintenance personnel. It will be delivered by spring 2011 and will be deployed at the ATRTrainingCenterin Toulouse.

TAAG Angola Airlines signed a 10-year OnPoint solution services agreement for the maintenance, repair and overhaul of its 10 GE90 engines powering its 777-200ERs and -300ERs. The agreement is valued at more than $50 million over its life.

Goodrich Corp. will supply wheels and electrically actuated brakes to Qatar Airways for the carrier's 30 787s with deliveries beginning in 2011. Goodrich noted that it is the chosen supplier on nearly 80% of the 787 aircraft wheel and electric brake awards that have been announced to date.

Goodrich and Hawaiian Airlines signed an extension to their existing nacelle system Prime Solutions support agreement to cover four 717s added to the Hawaiian fleet in 2008. 

Pratt & Whitney announced the launch of "EcoFlight Solutions," which it said is "a comprehensive fuel conservation service that analyzes airline operations, identifies potential fuel savings, drives implementation and tracks results" It is being offered through the company's Global Service Partners network,.

Dunlop Aircraft Tyres, which is celebrating its centenary at this year’s Farnborough Airshow, yesterday announced it developed the radial main wheel and bias nosewheel tires for the ATR 42 and ATR 72, its first products for ATR aircraft. Chairman Ian Edmondson said the new products were developed "following demand from ATR operators who wanted to see an increased choice of tires for their fleets." He noted that owing to the opening of its new distribution and retreading facility in Chinain November 2009, the company is "well placed" to support ATR operators in the Asia/Pacific region "alongside our traditional markets of Europe, the Americasand Africa."

Farnborough news from July 20

Farnborough news from July 19