State of the airframers: Boeing delivers, Airbus delays and new models wait on fringe

It has been an exceptionally busy year for aircraft manufacturers. Boeing delivered its first B787 and B747-8F and launched the B737 MAX, setting its narrowbody strategy for the next decade at least. Airbus went ahead with the A320neo late in 2010 and has been amply rewarded with an avalanche of orders, but has been forced to delay the A350 XWB.

Of the smaller manufacturers, Bombardier is plugging away doggedly with CSeries, trying to break the Airbus/Boeing monopoly. Embraer has just announced that it will stick with the regional jet market, offering a re-engined version of its existing E-jets family instead of venturing into the intensely competitive narrowbody market. Coming soon are COMAC's C919 and Irkut's MS-21.

Narrowbody battle: neo and MAX

The story of the year in the narrowbody market has undoubtedly been the success of Airbus A320neo and the competitive response from Boeing, in the form of the B737 MAX. Airbus now has 1058 firm orders for its re-worked narrowbody aircraft and there are more MoUs waiting to be finalised.

Boeing has around 700 “commitments” for the B737 MAX from at least eight customers, up from just under 500 commitments from five customers last month. However, the US manufacturer is in no hurry to firm up its B737 MAX orders and is still talking to customers about the aircraft. Boeing will not have a firm configuration for the aircraft until around 2013.

Boeing recently selected the 68-inch fan diameter for the LEAP-1B engines for the aircraft, the larger of the two fan sizes it was considering. Boeing is going for minimum change with the MAX. It will feature a longer nose landing gear, some aerodynamic clean ups, reportedly including a B787 style tail-cone, structural strengthening and some minor systems revisions. Targeted entry into service is 2017, although Boeing is hoping for something earlier to combat the A320neo.

Airbus’ A320neo will feature a 78-inch fan for the LEAP-1A and an 81-inch fan diameter for the PW1500G engine option. Like Boeing, Airbus is expected to keep things simple with the A320neo, with minimal structural change. Meanwhile, Airbus and Boeing sales and marketing executives are engaged in a somewhat friendly running battle over which of the re-worked aircraft will be the more efficient – of course, for a given measure of “efficient”.

B787 and B747-8F delivered, A350 delayed, A340 terminated

Boeing must have heaved a sigh of relief on 26-Oct-2011, when the first All Nippon Airways B787 took off on its maiden commercial service, a charter flight to Hong Kong. With an estimated USD32 billion lavished on development and manufacturing for the programme and three years of delays still bleeding over into actual production and penalty payments, it is understandable that Boeing CEO Jim McNerney believes the company will not see a profit from the B787 “for some time” – the end of the decade.

Boeing has 821 orders for the B787, a reduction of about 120 aircraft from a few years ago. Nevertheless, the production backlog still stretches all the way into 2019, provided that Boeing meets its own delivery targets. The order cancellations can work in Boeing's favour as many early B787s were sold at under-valued prices, allowing Boeing to give the slot to a higher-paying customer or advance delivery of aircraft to other customers and in the process reduce delivery penalty payments.

Boeing has said production costs will be spread over 1100 aircraft. To put that into perspective, the manufacturer recently began assembly of its 1000th B777, after 16 years of production, but the B787s will roll out on a faster basis with improved techniques and a second final assembly line in Charleston, South Carolina. Boeing expects B787s to be profitable on a unit basis from late 2014 or early 2015, once production has stabilised at about 10 aircraft per month, bringing the costs per aircraft down. 

The initial delivery of the B747-8 was somewhat less enjoyable than that of the B787. There had been something of a race between the two aircraft production teams as to who would get their aircraft to customers first, with the B747-8 looking like it was going to be the winner.

However, launch customer Cargolux knocked back its first two B747-8Fs, apparently at the urging of Qatar Airways’ CEO, Akbar Al Baker. The Middle East carrier acquired a 35% stake in the carrier just a week earlier. The situation was disappointing for Boeing, not to mention somewhat embarrassing, given the three days of delivery celebration planned. A deal was struck two weeks later, after negotiations due to “performance considerations”, with Mr Al Baker and Cargolux CEO, Frank Reimen, involved in the negotiations.

Airbus had its own embarrassing admission this week, pushing the A350 XWB delivery timeframe back from late 2013 into sometime in 1H2014. After a solid 12 months of admitting the programme had eaten into its time margins but would still be on schedule, the manufacturer was forced to admit the inevitable. Initial assembly has also been pushed back from late 2011 to 1Q2012.

The delay will cost Airbus about EUR200 million, mostly in compensation to customers. The A350 XWB launch customer is Qatar Airways, and Mr Al Baker is famously tough and vocal when it comes to negotiations and aircraft development, and at the Dubai airshow he spared no words for Airbus. Qatar Airways has 80 A350s on order.

Also bowing to the inevitable is AirbusA340 programme, which the manufacturer has finally ended. After almost two years with no sales, the four-engined aircraft was effectively orphaned, with only four aircraft left on Airbus’ books (two for Kingfisher Airlines and two for VIP customers, with the likelihood of them being produced unclear). The aircraft fell victim to the high price of oil and the appearance of longer-ranged, more efficient twin-jets, notably the B777-200ER, -200LR and -300ER but also Airbus’ own A330-200. With the B787 now entering service and the A350 XWB not too far off the horizon, the A340 will slip into history as a minor success, with 379 orders, but far eclipsed by the successful A330, which the A340 shares a common fuselage with. The newer variants of the A340, the -500 and -600, will go down as niche aircraft, like the B737-600 and B767-400.

Bombardier sticks to targets and Embraer shys away from the big-leagues

While Airbus has delayed the A350, Bombardier is sticking to its 2013 delivery target for the CSeries. This will be something of a challenge, with the company’s VP of marketing Philippe Poutissou admitting meeting the delivery target is “not going to be easy”. Bombardier said the company will be required to revisit plans in some cases but can meet its target.

Mr Poutissou also said the company expects to meet its target of 300 orders before the aircraft commences commercial deliveries. Bombardier has snagged orders for 48 CSeries from six customers this year, taking total orders to 133. The Dubai Airshow may see more orders to come, with Gulf Air and Oman Air reportedly lined up for orders.

While Bombardier is progressing with the all-new CSeries, Embraer has taken a step back from entering the bigger end of the market. Reports are emerging that the company will go ahead with a plan to improve its E-170/E-190 regional jet family. Embraer believes Airbus and Boeing are “defending the narrowbody segment very, very, very strongly”, so it make more sense for the company to stay in the regional jet market.

The reworked regional jets will feature new wings and new engines in a USD2-3 billion development programme. Delivery timeframe is around 2018, with the aircraft potentially stretched out to 132 seats.

The regional jet market is very crowded at the moment, with the E-jet family competing with Bombardier’s CRJ family and new offerings from Russia, in the shape of the Sukhoi Superjet, and Ukraine, with the An-148/158. There is also China’s ARJ-21, although the aircraft is primarily targeted at the Chinese domestic market, and Mitsubishi’s MRJ, the first commercial passenger aircraft made in Japan since 1974.

Still, Embraer thinks that the best business case is to stay in the regional jet market, where is has decades of experience and a solid, successful product and customer base from which to build. It will re-engine some members of its E-jet family – re-enging of niche models like the E-175 have not been determined – and stay out of the 180-seat size narrowbody market, but is contemplating a slightly larger aircraft than the E-190 to capture the 100-seat plus market.