ISTAT Becoming America’s Air Show
Last week’s International Society of Transport Aircraft Trading (ISTAT) conference in Scottsdale, Ariz., set another new record this year by drawing some 1,300 attendees. As incoming president Joe Ozimek noted, ISTAT has become America’s airshow–minus any equipment parked on an airport ramp and fighter jets flying overhead at ear-shattering altitudes. Unfortunately, the presentations proved rather pedestrian and Airbus COO for customers John Leahy had to return to Toulouse to attend to some “pressing business,” leaving plenty of room for speculation, particularly about the single-aisle market.
On Monday, Bombardier Commercial Aircraft president Gary Scott perhaps made the news of the show with a guarantee that Bombardier would sell as many C Series airplanes by the end of 2013–the target for its FAA certification–as Airbus sold A320s by the time that airplane entered service. That would mean 300 airplanes by late 2013. The company has so far drawn orders for 90, leading to the obvious question, from where will the rest come over the next two or three years?
“Gary Scott’s a dear friend, I love him, but if I were him I wouldn’t be at this conference, I’d be out selling the airplane,” quipped Air Lease Corporation chairman and CEO Steven Udvar Hazy. “They’ve got to get some sales, they’ve got to get some airline sales, they’ve got to establish themselves, and going around saying you’ve got a great airplane is one thing…but now its time to get out there and get some airplanes sold.”
Scott intends to do just that, starting this year, he said.
Notwithstanding much speculation about the number of sales Airbus’s A320neo has already captured from customers who might otherwise have opted for the C Series, Scott insisted that the C Series does not compete against the A320neo or even the Boeing 737NG. Even though the C Series’ seating range capacity extends into the lower end of the Boeing and Airbus models–at a maximum of 149 seats–Dr. Adam Pilarski of Avitas appeared to agree with Scott, opining that Boeing and Airbus would gravitate toward higher-capacity narrowbodies.
During his Monday morning presentation, Pilarski predicted that oil prices would return to $40 a barrel by the time the A320neo reached the market, in 2016. “If I’m wrong, I’ll buy you all a beer,” he joked. Pilarski also predicted that they could rise to $250 a barrel if the unrest in the Middle East spreads to Saudi Arabia. In the medium-term, however, he said “it doesn’t matter who is taking over…there will be no shortage of people selling oil.”
Speaking in place of Leahy, Airbus vice president of marketing Andy Shankland said he sees no end to the A320neo’s production run, notwithstanding the inevitable presence of a replacement aircraft by the middle of the next decade. In fact, Shankland presented a graph that showed the A320 line running until 2028.
Later, Boeing Commercial Airplanes CEO Jim Albaugh said Boeing would take a “hard look” at raising production of the 737 to 42 a month, because, as he admitted, telling a blue-chip customer to come back in five or six or seven years for an airplane, “that’s not the right answer.” Finally, Albaugh in a sense unofficially “launched” the 787-10 at ISTAT, calling it a project in which he has “great interest” and one in which the economics will prove “eye watering.” Yet Albaugh acknowledged that the 787-8 won’t meet its early weight and range goals. “There are a lot of things we’re going to do to clean the airplanes up, a lot of things we’ll do with the engine manufacturers,” he said. Albaugh wouldn’t venture a guess when the airplane would meet its 8,000-nm-range guarantee, however.
Thoughts then turned to the earthquake in Japan, where, of course, a number of Boeing suppliers reside. Albaugh reported no serious affect on its big suppliers in the country, namely Mitsubishi, Kawasaki and Fuji Heavy Industries. “I can tell you that our suppliers came out of the earthquake in pretty good shape,” said Albaugh.