Farnborough International Report 2012
Unseasonably bad weather at the 2012 Farnborough International airshow required exhibitors and visitors alike to dig deep into the reserves of resilience and flexibility that they have had to draw on in business conditions that remain uncomfortably unpredictable. But despite the near-relentless British rain, the event delivered no small amount of encouragement for the aerospace sector (primarily on the commercial side of the fence) and plenty of points of interest for industry watchers.
Assessing the precise value of new business generated by airshows is always a hazardous enterprise, but even approximate figures from the leading airframers give clear indications that airliner backlogs are continuing to grow at rates that seem to defy the challenging competitive environment faced by airlines. Despite the short-term battle to remain profitable, long-term fleet renewal aimed at driving down operating costs seems to be dominating the strategic thinking at many carriers.
Approximate calculations by AIN, in some cases based on nominal list prices, suggest that about $86 billion in new commercial aircraft business was announced at the Farnborough show. This would represent a sizable increase on the $47 billion logged at the previous event in 2010.
Orders and commitments logged by Boeing during Farnborough show week totaled just short of $35 billion. Without exception the new business was for the U.S. airframer’s new 737 Max narrowbody or for versions of the existing 737 NG series intended in many cases as stopgap capacity until the re-engined aircraft is ready to enter service in 2017.
The strong Boeing Commercial Airplanes presence at the Farnborough show was led by new CEO Ray Conner, who had unexpectedly taken the reins in the wake of the sudden retirement of Jim Albaugh. The company’s profile at the event was further raised by the appearance in the daily flying display of an in-service 787 Dreamliner operated by Qatar Airways.
Boeing’s tally was dominated by a $14.7 billion deal with United Airlines for one hundred 737 Max 9s and fifty 737-900ERs. The airframer also landed new orders and commitments for another 185 Max-series 737s from leasing group Gecas, Alafco, Avolon and Air Lease.
Unlike Boeing, which appeared to play down timescale expectations for the anticipated launch of the new -10 version of its 787 widebody and the 777X, Airbus used the Farnborough show as the occasion for some product renewal. On the first day of the event it announced plans to offer a new version of the A330 with increased range and payload.
The new version of the A330-300 twinjet will deliver a maximum takeoff weight of approximately 529,200 pounds. The extra weight will take the range of an aircraft carrying 300 passengers to 5,950 nm. This is only an increase of around 400 nm but it gives greater reach to customers such as Malaysia Airlines to operate services from Kuala Lumpur to Paris.
The increased mtow will also be made available for A330-200 and A330-200F (freighter) versions. This will increase range by around 270 nm and allow for about 5,510 pounds more payload.
In total, Airbus–under the leadership of new CEO Fabrice Bregier–booked orders and commitments for 115 new aircraft during Farnborough week. The European airframer did not disclose pricing for all of these deals but, using list prices, they come to approximately $16.9 billion.
New business for Airbus included the launch order for the new heavier A330, with leasing group CIT Aerospace agreeing to take 10 of the new variant. This contract includes the five previously undisclosed orders for the existing A330, which are now to be switched for the upgrade.
Another highly significant contract for Airbus came when Cathay Pacific Airlines agreed to buy 10 A350-1000s and convert an existing order for 16 of the smaller -900 model to the larger variant. The new aircraft will replace the Hong Kong-based carrier’s long-standing Boeing 747 fleet.
Other new bookings for Airbus included orders and commitments for 29 A320neos from three separate airlines, plus orders and commitments for 57 of the existing A320 model (which the manufacturer now refers to as the A320ceo, standing for current engine option).
In fact, Airbus came close to securing what could have been its biggest deal at the show for between 50 and 100 A320s. AirAsia CEO Tony Fernandes disclosed on the last full business day of Farnborough 2012 that he had been unable to conclude negotiations with Airbus in time to announce an order that would boost its narrowbody capacity while it awaits the arrival of its A320neos beginning in 2016.
The existing A320’s new Sharklet winglets were on display on an aircraft for the first time at the Farnborough show. A Malaysia Airlines A380, which was reportedly shuttling in from London Heathrow Airport each day after a commercial flight from its Kuala Lumpur base, also impressed the crowds.
The still-rising tide of new airliner orders also raised engine makers. CFM International–the joint venture between General Electric and Safran–benefitted greatly from the continued surge in orders for the re-engined A320neo and 737 Max, which are both powered by its new Leap line of turbofans. It also won engine supply covering existing orders for Comac’s new C919 twinjet in Farnborough business totaling some $12.6 billion.
Pratt & Whitney has also been the beneficiary of strong demand for the A320neo program, for which it provides its PurePower PW1100G-JM turbofan. During the Farnborough show, it announced orders for some 620 of the new engines, with an undisclosed combined value. The U.S. engine manufacturer also was boosted by SkyWest’s 100-ship MRJ order, for which it will provide the PW1200G. It also landed a $90 million contract to supply PW4000-94 engines for up to four 767-300ERs being bought by Air Astana.
Meanwhile, the Engine Alliance–in which Pratt & Whitney is partnered with General Electric–has announced a series of performance and durability enhancements for the GP7200 for the A380. The refinements are being offered for release into production over the next 18 months and will incorporate upgrades to engine clearances and sealing, an improved turbine blade and a slight weight reduction. The GP7200 recently surpassed one million flight hours in service and Airbus has just announced a demonstrated fuel consumption performance improvement for the engine.
Rolls-Royce unveiled the latest Trent variant, to boost performance for the existing Boeing 787-8 and -9 as well as serving the larger -10X model that Boeing is expected to launch. The Trent 1000-Ten (Thrust Efficiency New Technology) will be rated for up to 78,000 pounds of thrust and will deliver a 3-percent efficiency gain compared with the current “Package B” production Trent 1000s. It is due to enter service in the first half of 2016.
The UK engine maker logged roughly $3.5 billion in new business at the Farnborough show. In addition to Trent XWB-1000s to power Cathay Pacific’s new A350-1000s, this also included three sets of Trent 700s for the A330. Rolls also announced performance enhancements to the Trent 700 to power improved versions of the A330.
Continued Regional Growth
The largest deal in the regional airliner sector was the commitment made by U.S. carrier SkyWest to take 100 of Mitsubishi’s in-development MRJ90 (see article on page XX). With deliveries due to start in 2017, the orders (if firmed up) would be worth around $4.2 billion at list prices and give the Japanese market entrant a significant boost in terms of program credibility.
Existing regional player Bombardier went home from Farnborough with about $3.27 billion worth of new sales and commitments. On the eve of the show, an undisclosed customer placed what was described as a conditional order for five CSeries 100s and five of the larger CSeries 300. Also just ahead of the event, China Express concluded a $264 million deal to buy six CRJ900 NextGen twinjets.
More support for the CSeries came from Latvian carrier Air Baltic, which signed agreements for up to 20 CSeries aircraft (with 10 covered by a letter of intent and 10 by purchase rights). Initially the deal is worth around $764 million, but this could increase to around $1.57 billion. The Riga-based carrier already operates eight NextGen Q400s.
Bombardier notched up more sales for the Q400 NextGen when Chorus Aviation, the Nova Scotia-based parent group of Canadian airline Jazz Aviation, ordered six of the twin turboprops. The $189 million deal involves the firming up of previously announced options. Jazz also signed for a nine-year SmartParts program to provide support for what will be a 15-strong fleet of Q400s.
The Canadian airframer also announced the opening of what will be its 10th regional support office outside North America. The new operation at Farnborough Airport will provide support for operators of both its regional airliners and business aircraft.
Rival twin turboprop manufacturer ATR benefitted to the tune of almost $600 million from new sales closed at the Farnborough show. Taiwan’s TransAsia signed for eight ATR72-600s. Air Lease and Lao Airlines each ordered a pair of the aircraft.
Danish leasing group Nordic Aviation Capital placed a separate order for a single example of the smaller ATR42-600. ATR expects to deliver the first example of the newly certified type to an undisclosed Middle Eastern operator in September.
Embraer announced new sales to China’s Hebei Airlines, which has ordered five more Embraer E190s. The 100-seaters are due to join two existing examples of the type by the end of next year based on a contract worth $223 million at list prices.
The Brazilian airframer also released a new 20-year market forecast at the Farnborough show. The report envisions a market for 6,795 new aircraft with between 30 and 120 seats. Valued collectively at $315 billion, this anticipated new business would reflect a 5-percent annual increase in world demand for air transport in terms of revenue passenger miles.
Russia-based Superjet International announced a new contract worth approximately $175 million under which Mexico’s Interjet has converted options into firm orders for five of its new Superjet 100 (SSJ100). Under a related deal, Interjet’s facility at Mexico City’s Toluca Airport is to become an authorized service center for the SSJ100.
Leasing group Ilyushin Finance (IFC) signed a $420 million agreement to buy 15 aircraft from the Antonov An-148/158 line of regional airliners. Russia-based IFC in turn will resell the jets to its new Panama-based partner, South American Aircraft Leasing.