ATW Daily News

Farnborough Airshow News

Tuesday July 15, 2008

Etihad Airways orders 100 aircraft from Boeing, Airbus worth combined $21 billion
Startup LCC FlyDubai orders 50 737-800s, plans mid-2009 launch
Saudi Arabian Airlines orders eight A330-300s
Boeing's Carson remains confident despite fuel cost crisis
Russia's United Aircraft Corp. seeks to become player in civil aircraft sector
Boeing 'delighted' at new engine activity for 737 successor
Austria's Niki orders five E-190s
ATR unveils new orders, confident of strong full-year performance
Singapore Technologies inks technical support pacts with CFM, GE
Pratt rebrands GTF as part of PurePower engine family
Additional stories

Farnborough News from July 14.

Boeing Chairman, President and CEO Jim McNerney and FlyDubai Chairman Ahmed bin Saeed Al-Maktoum announce that the new Dubai-based low-fare airline has ordered 50 737NGs.

Etihad Airways orders 100 aircraft from Boeing, Airbus worth combined $21 billion

Etihad Airways announced a blockbuster fleet modernization and expansion program with firm orders with both Boeing and Airbus for a combined 100 aircraft valued at $21 billion plus options and purchase rights for another 105. If all options and purchase rights with both manufacturers are realized, the total value of the deals is $43 billion.

The Boeing deal includes a firm order for 35 787s and 10 777-300ERs worth $9 billion at list prices plus options for another 25 787s and 10 777s and purchase rights for 10 more Dreamliners and five 777s. Deliveries will begin in 2011 and be completed in 2020. Deliveries of the 777s will start in 2011 and deliveries of the 787s in 2015. The 777s will be powered by GE90s while negotiations are still ongoing for the engines of the 787s.

The Airbus deal is for 20 A320s, 25 A350 XWBs and 10 A380s plus options for five more A320s, 10 additional A350s and another five A380s. The firm orders are valued at $12 billion. The A350s will be powered by Rolls-Royce Trent XWB engines while powerplant decisions have yet to be made on the A320s and A380s. The Abu Dhabi-based carrier also took purchase rights for a further 15 A320s, 15 A350s and five A380s. Deliveries of the Airbus aircraft will stretch from 2011 to 2020.

"This is a momentous day for Etihad Airways and Abu Dhabi," CEO James Hogan said. "It reflects the strength and pace of economic growth in the Emirate and the integral role Etihad will play in Abu Dhabi's future." He said negotiations with Boeing had been "hard but fair" and talks with Airbus were "tough."

Hogan said the orders were placed despite rising fuel costs and economic uncertainty because of strong confidence in Abu Dhabi's growth potential and its "very fortunate location" that could allow it to serve as a gateway for air traffic connecting through the Middle East. "The size [of the orders] mirrors the rising prominence of the Middle East and its increasing emergence as a new focal point of global aviation," he said. "The Gulf is a natural air bridge between East and West offering the fastest air links for travelers and freight forwarders."

Etihad, the national airline of the United Arab Emirates, was established in July 2003 and currently flies 38 aircraft to 45 destinations worldwide. It expects to carry 6 million passengers this year.
by Cathy Buyck and Aaron Karp

Startup LCC FlyDubai orders 50 737-800s, plans mid-2009 launch

FlyDubai, a startup LCC owned by the Dubai government that plans to launch service in mid-2009, yesterday placed a firm order for 50 737-800s valued at $3.74 billion.

The carrier also will lease four -800s from Babcock & Brown. First delivery is scheduled for May 2009 and final delivery for 2015. CEO Ghaith Al Ghaith, formerly Emirates executive VP-commercial operations worldwide, said the carrier plans to operate an all-economy 737-800 fleet with each aircraft configured for 189 seats, though it does have the right to convert some of the -800s to -900ERs.

While not announcing a network, he told reporters at the Farnborough Airshow that the LCC will serve "a four-and-a-half-hour radius from Dubai." It will operate out of the new Al Maktoum International at Jebel Ali. "The [first] runway is finished now and we expect [the airport] will be in operation by the middle of next year," Al Ghaith said, noting that FlyDubai would be the first passenger carrier to operate there following cargo flights slated to begin in the 2009 second quarter.

The carrier will have a "pure low-cost model," according to a fact sheet distributed to reporters. "Passengers will be given the option to pay for additional services such as food, checked and excess baggage, and ticket flexibility."

A FlyDubai spokesperson told ATWOnline that "Emirates is helping [the LCC] get started but there will be a split before the launch. . .[and] operations will be entirely separate from Emirates." EK Chairman Sheikh Ahmed bin Saeed Al Maktoum will serve as chairman of both carriers. He predicted that the new airline's fleet will be "much larger" than the 54 737-800s by 2015. "Traffic in the Middle East will remain very strong," he said, adding that there will be "enough traffic for all" of the area's growing group of LCCs.

Al Ghaith said, "Of course fuel price is an immediate concern for all of the airlines, but we are looking. . .long-term and we believe there will be adequate demand."

Separately, CFM valued the engine order for the 737-800s at nearly $700 million at list prices.
by Aaron Karp

Saudi Arabian Airlines orders eight A330-300s

Saudi Arabian Airlines signed a firm order for eight A330-300s. The contract follows one for 22 A320s signed at the end of 2007, which was the first agreement between the carrier and Airbus in 26 years.

"The Airbus A330-300 is the right aircraft for our ambitious fleet renewal plans," DG Khalid al Molhem said. "The aircraft combines operational efficiency as well as cabin comfort."

Saudi Arabian chose CFM56-5Bs to power the A320s. CFM valued the order at approximately $300 million at list prices.
by ATWOnline staff

Boeing's Carson remains confident despite fuel cost crisis

Boeing Commercial Airplanes President and CEO Scott Carson said the manufacturer's robust aircraft order backlog and airlines' need to increase operational efficiency will mitigate its exposure to the fuel cost crisis shaking the global air transport industry.

"Clearly, economic growth is slow across the developed world," he told reporters here. "And we're seeing increasing risk in developing markets. . . What we have seen to date is a handful of customers that have asked to defer [aircraft deliveries] for a year or two. We have had no cancellations."

Soaring fuel costs are a "double-edged sword" for Boeing, Carson said, explaining that while airlines are struggling financially they also are eager to replace older aircraft with more fuel efficient next-generation types. Its backlog of more than 3,600 aircraft valued at $271 billion "is as balanced as our backlog has ever been," he said. Orders are spread across regions and aircraft types. "This provides us with a degree of flexibility in dealing with the market."

He pointed out that commercial air transport "has had a tremendous [environmental] track record over the 50-year history of the jet aircraft," noting the dramatic reduction in aircraft noise over the period. "The next challenge is clearly reducing our carbon footprint," he said, adding, "we are going to rely on technology" including development of alternative fuels. "We're going to [test] fly generation-two [alternative] fuel later this year and generation-three is not far behind. We want to demonstrate that alternative fuel has a future in this business."

Carson said there has been no erosion in airlines' ability to finance aircraft purchases but conceded that could change. "Do I think we'll have to step back into the financing market? I'd say there is a likelihood" given economic realities.
by Aaron Karp

Russia's United Aircraft Corp. seeks to become player in civil aircraft sector

The Russian government consolidated all of the nation's aerospace manufacturing companies under one umbrella last year when it established United Aircraft Corp., which now is pursuing an aggressive civil aircraft growth strategy that will include development of commercial transports of various sizes, according to DG Alexei Fyodorov.

Briefing reporters at the Farnborough Airshow, he said defense-oriented UAC generates only 10% of its revenue from civil products currently but plans to grow the commercial sector to 20% of its business by 2015 and 50% by 2025. "The civil aircraft market is five to six times bigger than military," he explained. "We have to grow it very fast."

The "first real UAC product" will be the MS-21, a 150/210-seat midrange aircraft that will cost more than RUB150 billion ($6.5 billion) to produce, with about half the funding coming from Moscow, Fyodorov said. "For the MS-21, we will use all of our capabilities, all of our resources," he commented, noting that Russian aerospace firms Ilyushin, Sukhoi, Irkut and Yakovlev will be involved in its development and production. First flight is targeted for 2013 with entry into service expected in the 2015-17 timeframe.

The aircraft will be targeted "to be in the global market but we understand it will be tough to compete against Boeing and Airbus," he said. Regarding the engine and systems, "we invite all global players" to be suppliers.

The MS-21 follows the Sukhoi SuperJet100, the regional aircraft that made its first flight last month. However, it was revealed last week that it will not be delivered to launch customer Aeroflot until late 2009, one year late. Fyodorov blamed the delay on "technical" issues, explaining, "It's our first experience to integrate so many different systems. It's a very complicated process. But we are [now] moving very fast." He said once first delivery is made, "we plan to press our production schedule" and deliver 250 SSJ100s by the end of 2012. Currently there are 73 firm orders.

UAC also has ambitions to develop and produce a "short/medium-range widebody passenger aircraft," Fyodorov said. "We understand that the long-range [widebody market] will be split between Boeing and Airbus, but in the medium-range niche we think there is a place for us."

In addition, the company is developing an upgraded version of the IL-76 freighter that will have all-new avionics, a new wing and be "much better" in terms of fuel efficiency, he said. It is slated for first flight in 2010.
by Aaron Karp

Boeing 'delighted' at new engine activity for 737 successor

Boeing Commercial Airplanes President and CEO Scott Carson expressed strong support for CFM's newly launched LEAP-X engine as well as ongoing efforts by Pratt & Whitney and Rolls-Royce to develop new-technology engines for a successor to the 737 and A320 families. "We're just absolutely delighted that the three engine manufacturers are pursuing this so aggressively," he told media here.

Commenting specifically on the LEAP-X program, which CFM says could be certified in 2016, Carson said, "The timeframe is consistent with what we've been talking about, around 2017-18. And the pacing on that schedule was the availability of an engine that was enough better and the availability of systems in the aircraft that were enough better to give the airlines the kind of operating cost reductions that they were demanding."

On Sunday, CFM officials said the engine would achieve a 16% fuel saving compared to today's narrowbody engines. Asked whether he felt that improvement represented a sufficient benefit to airlines to spur a new airframe, he responded "That [16%] is a very attractive number to us."

Carson also downplayed the potential impact Bombardier's newly launched CSeries could have on the 737 market and that of a possible successor. Noting that Boeing's 737 production line is largely filled until 2014, he said current and foreseeable airport capacity limits are causing the manufacturer to look at slightly larger aircraft than today's 737NG family.

"When you look at landing constraints as one vehicle to reduce congestion the way [the US Dept. of Transportation] imposed it on the Eastern Corridor of the US, that tends to argue for less frequencies and slightly larger airplanes. We think that tends to argue away from certainly the 70/90-seat airplane and the question mark remains what does it mean in the 100/125-seat [class]? Right now our thinking is we probably upscale something on the order of 10-15 seats in each one of the models and if that remains true then our interest in the 125-seat airplane is not as high as it was in the past."
by Perry Flint

Austria's Niki orders five E-190s

Austrian LCC Niki placed a firm order for five E-190s plus options for another five. The deal is valued at $187.5 million but could double if all options are confirmed. Deliveries are set to begin in May-June 2010. Founder and President Niki Lauda said the aircraft would be used to add frequencies and "break into new destinations." They will be configured in a single class with 112 "slim seats" that are thinner and use less material than those usually installed on E-Jets.

Niki carried 2.5 million passengers in 2007 with its fleet of nine A319s/A320s. Lauda said it made a $3.5 million profit last year. Air Berlin holds a 24% stake in the airline, which was founded in 2004. Lauda is the former owner of Lauda Air, which was sold to Austrian Airlines.

Embraer also confirmed that Aeromexico ordered 12 E-190s. The new aircraft will be operated by regional subsidiary Aeromexico Connect, which currently flies 28 ERJ-145s and holds operating leases on four E-190s.

In addition, Embraer said Saudi Arabia's National Air Services Aviation confirmed options on five E-190s. The original contract for five firm orders with five options was announced in November 2007 at the Dubai Air Show.
by Sandra Arnoult

ATR unveils new orders, confident of strong full-year performance

ATR unveiled an additional four orders here yesterday comprising one ATR 42-500 to Air Saint-Pierre, one ATR 42-500 to Capitaneria di Porto and two ATR 72-500s to an identified customer, bringing its orders for the first half of 2008 to eight.

Despite the slow first half, the EADS/Finmeccanica JV is confident it will have a strong full year. "Ongoing negotiations allow us to maintain our goal to reach the 1,000th aircraft sold [in total] by the end of the year," CEO Stephane Mayer said. That would mean announcing 42 new orders between now and year end; the turboprop manufacturer ended 2007 with a cumulative total of 950 orders. "We expect revenue to be over $1.3 billion and deliveries to be over 60 aircraft [this year]," Mayer told reporters at the Farnborough Airshow.

He added that development of the -600 series is on schedule "and we do confirm 2010 as the year of the entrance into service of the first -600." Regarding launch of a 91/100-seat aircraft, he confirmed that there is a demand from customers for a "larger-capacity aircraft, which ATR intends to address. No final decision has been taken, but we are evaluating our future product strategy." The company has excluded developing a stretch version, Mayer told ATWOnline. "If we decide to meet that demand [for a 91/100-seat ATR], we intend to develop a total new aircraft which incorporates the latest new technologies."
by Cathy Buyck

Singapore Technologies inks technical support pacts with CFM, GE

Singapore Technologies Aerospace and CFM International signed a series of agreements valued at $1.5 billion by CFM under which the engine-maker will support ST Aerospace's CFM56-3, -5B and -7B maintenance, repair and overhaul operations.

The pact includes a 10-year material services agreement that encompasses component repairs and provision of new and used serviceable materials to ST Aerospace. CFM also will establish a spares logistics center in Singapore. Additionally, the companies signed an Engine Overhaul Support Agreement granting ST Aerospace access to OEM technical support and data.

The agreement "will help both companies compete effectively," CFM President and CEO Eric Bachelet said here. "We believe this cooperation will be very good for us, CFM and our customers," ST Aerospace President Tay Kok Khiang said, adding, "We want to make sure we have access to OEM-backed solutions." He told media that ST Aerospace will participate in CFM's newly launched TRUEngine program to track engines that have been maintained using only OEM-approved parts and repairs.

Separately, ST Aerospace and GE Aviation said they will cooperate on engine MRO including on-wing support, engine material services, aircraft total support solutions and engine parts and accessory repairs. Under terms of the agreement signed yesterday, GE will provide "technical assistance and OEM support" to help the MRO company "develop efficient and cost effective solutions for GE engine operators."
by Perry Flint

Pratt rebrands GTF as part of PurePower engine family

Pratt & Whitney yesterday announced creation of a new engine family, "PurePower Engines," and redesignated the Geared Turbofan as the PurePower PW1000G. The PW800 small turbofan for the business jet market becomes the PurePower PW800.

Pratt also said the PW1000G demonstrator engine made its first flight on July 11 on the company's 747SP flying testbed. It performed "flawlessly" on two flights, according to VP-Next Generation Product Family Bob Saia. Testing will take place in two phases. The first will run for approximately 40 hr. on Pratt's testbed. In the second phase, set to begin in the fourth quarter, the engine will be installed on an Airbus-owned A340 and flown for approximately 75 hr.

The PW1000G has been selected as the exclusive powerplant for the Mitsubishi Regional Jet and the CSeries, which Bombardier launched Sunday with a letter of interest from Lufthansa for 30 firm and 30 options.
by Perry Flint

CFM International said China Southern Airlines chose CFM56-5Bs to power 20 A320s on order. Agreement includes a long-term material services agreement.

Snecma Services announced an exclusive three-year engine maintenance contract with Bahrain Air, a new private low-cost carrier based in Bahrain. The time and material contract covers all CFM56-5As operated by the LCC. The companies also signed an Engine Line Operation Support contract covering services such as engineering and LRU support.

Pratt & Whitney said Asiana Airlines selected PW4000-112s to power three recently ordered 777-200ERs in a deal valued at more than $135 million. Contract includes installed engines and a long-term service agreement. CIT Aerospace chose PW4000-100s to power an A330-200 on order. Pratt valued the deal at more than $40 million at list prices with engine deliveries in the fourth quarter of 2009.

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