The announcement of job cuts is never a pleasant message, but in the case of Bombardier, appear to be both a financial and economic necessity. Bombardier is facing numerous challenges across its multiple business lines, rail, business aircraft, and commercial aircraft. The latter, particularly the C Series, is the key to the company’s future.
The C Series began life with an sizable economic advantage over existing models, but is facing re-engined competition that has somewhat leveled the playing field. The competing A319neo, 737 MAX 7 and Embraer E2 jets are all existing models that have been upgraded. The cost of a re-engining program is much lower than an all new aircraft, providing these companies with an economic advantage in that they have lower development costs to amortize over the life of the aircraft.
With strong existing customer bases, selling a re-engined jet versus an all… Continue reading
Today Airbus delivered it’s 10,000 airplane. It is an A350-900 for Singapore Airlines making this is a big day for Airbus.
Airbus made its first delivery in 1974. It took a lot of confidence to create the company from a number of small European-based aerospace firms and cobble these parts into one group with one vision; break into an American dominated industry, In the process other EU-based aerospace firms that were not part of the Airbus combine were left to wither mercilessly – like Fokker and Dornier along with others – which was awkward because these brands were great and had been delivering credible aircraft. The nation-state shareholders had a vision and were not going to allow anything to get in the way of that.
Nation-state shareholders also came with baggage. Airbus also had to overcome the nationality-based “balance” between the Germans and French. … Continue reading
The Russian market just grew a bit more competitive. For aircraft in the 100-seat segment, the Sukhoi SuperJet has pretty much had the home advantage. But Embraer has seen the Embraer E-170 and E-175 awarded type certificates in Russia. Russian news outlet ATO reports that two Russian airlines are interested in the Embraer. S7 is said to be one the airlines.
Clearly the E-170/75 offers Russian airlines an option. Conveniently, there were 25 aircraft of these models parked at the end of the 2Q16. Exposure to the E-Jet gives Embraer a chance to find more customers to convert to the E2 when it enters service. Continue reading
Russia’s next big aircraft program after the SuperJet is the mid-sized MC-21. Seating up to 211, the MC-21 is seen as a competitor to the Airbus A320 and Boeing 737. Although a technically promising aircraft, market realities make the program hard to move forward.
It seems the development cost of the program is similar to that of western programs. But the reality of Russian/Western politics is making the financials a lot more difficult to work out. UAC, and its IRKUT subsidiary, are becoming creative.
Russian business daily Vedomosti reports that the Russian Ministry of Commerce and UAC, together with leasing companies, and the Russian Ministry of Economic Development are discussing government support for the MC-21 program. They would commit 20bn Rub ($320m at current rates) until 2020 according to three different sources. But this scheme depends on many variables such as the commercial plan and leasing… Continue reading
We now have the third quarter 2016 numbers, and taking the opportunity to review how things are going at Airbus and Boeing. It seems that the softening of sales is a reality. This seems awkward because the transition from current generation to next generation models is not going as smoothly as we had been led to believe. This means gaps and either white tails or production cutbacks. Take a look at the following charts for Boeing and Airbus. The ten-year super-cycle, with high order levels, has now wound down, with fewer orders on the horizon. Continue reading