Boeing 737 MAX Engine Testing Begins in France

CFM International has begun ground testing of its first LEAP-1B aircraft engine that will power the Boeing 737 MAX. CFM is conducting ground-based engine testing at a Safran facility in Villaroche, France. According to Boeing, the engine testing began three days ahead of schedule, and has completed a series of break-in runs, as well as reaching full take-off thrust. 

 

"We are really excited to have this engine on test. Now that we are running at full power, we can really see what it is capable of," said Cédric Goubet, executive vice president for CFM. "All of the testing we have done to date has validated the technology choices we made. The LEAP-1B engine will deliver everything we have promised and more."

 

Boeing's 737 MAX is projected to be 14 percent more fuel efficient than the current in-service Next-Generation 737s. First delivery of the 737 MAX is scheduled for 2017. 

 

Along with the update on LEAP-1B progress, Boeing also issued the following statement about the 737 MAX's projected efficiency against the competing Airbus A320neo, powered by the PurePower PW1100G-JM engine from Pratt & Whitney. 

 

The LEAP-1B engine, installed in a test cell at Snecma (Safran) facilities in Villaroche, France, successfully completed a series of break-in runs before reaching full take-off thrust. Photo, courtesy of Boeing.

"The 737 is more fuel efficient than the A320 today and will be more fuel efficient than the A320neo tomorrow. Airlines operating the 737 MAX will see an 8 percent operating cost per seat advantage over the A320neo," the company said.  

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Boeing's 747s Are Failing To Take Off As Demand For Large Commercial Jets Remains Depressed

Sustained weakness in global cargo markets and lower than anticipated demand for large commercial airplanes is weighing on sales of Boeing‘s largest commercial airplane – the 747-8. The passenger version of this airplane, 747-8 Intercontinental, which seats 467 passengers in a three-class seating configuration, has received no orders from airlines so far this year. While its freighter version, 747-8F, has received order for just one airplane this year through the first week of May.

In our view, the depressed order volume for 747′s passenger version is reflective of the fact that currently there isn’t healthy growth in the number of routes worldwide where such large aircraft can be deployed by airlines. These airplanes were initially conceived with the anticipation that sustained growth in demand for air travel and constraints in airport infrastructure will compel airlines to increasingly adopt larger airplanes. That anticipation hasn’t been realized uptill now as airlines see few routes globally where they can fill over 450 seats on every departure. At the same time, sustained weakness in global air cargo markets has weighed on orders for 747′s freighter version. We figure these low order volumes for Boeing BA -0.34%’s 747s will in the near term weigh on its growth from its better performing airplane models like the 737 and 787 Dreamliner.

We currently have a stock price estimate of $142 for Boeing, around 5% ahead of its current market price.

Boeing Lowered Its 747 Production Rate Due To Weak Order Volumes

Since their launch, Boeing has received orders for 120, 747-8s. 69 of these have been for its freighter version while the remaining 51 have been for its passenger version. The company has delivered 69 747-8s against these orders through April, so it currently has a backlog of around 51 747-8s. Additionally, many airlines which ordered these airplanes do not have their deliveries scheduled in the near future. As a result, Boeing has many unsold 747 production positions on its hands. Faced with manufacturing and stocking unsold airplanes, the company in February, lowered its 747 production rate to 1.5 airplanes per month from 2 airplanes per month.Additionally, it plans to maintain these lowered production rates through 2015 and has indicated that it is working to get additional orders for the 747. However, we figure the pressure to generate higher order volumes for the 747 will likely create pricing pressure which will weigh on the company’s margins under the 747 program. In addition, priced at approximately $355 million a piece, the cost impact from manufacturing and stocking an unsold 747 will be significant.

In comparison, Boeing has received strong orders for its relatively smaller airplane models such as the narrow body 737, which seats 110-180 passengers in a two-class cabin configuration, and 787 Dreamliner, which seats around 240-320 passengers in a three-class seating arrangement. Driven by strong order volumes for these two airplanes, the company has over the last few years posted strong growth in its results. Looking ahead, for the foreseeable future we figure Boeing’s 747 program will temper its growth from the 737 and 787 programs.

777X Could Impact A Portion Of 747′s Demand

Another factor we figure is likely weighing on demand for the 747 is Boeing’s 777X airplane which is scheduled to enter service with airlines around the end of this decade. The larger version of the 777X – 777-9X – is being designed to seat around 410 passengers in a three-class seating arrangement. We figure in a two-class seating arrangement this plane could like the current generation 777-300ER seat up to 450 passengers. It will thus seat nearly as many passengers as the 747 seats in a three-class seating arrangement. Coupled with much higher fuel efficiency and a similar range, it is possible that the larger 777X is cannibalizing a portion of 747 sales. Having said this we figure demand for the 747 freighter version will remain due to its distinctive cargo loading and unloading through the airplane nose door, which allows for transport of oddly-shaped, large-sized items.

Orders For Airbus A380 Have Also Remained Below Expectations

The weak global demand for large commercial airplanes has also weighed on sales of Airbus A380, which is the largest commercial airplane in the world. This airplane, which seats around 550 passengers in a three-class seating arrangement, has received orders for 20 airplanes through April this year. It has done better than Boeing’s 747 in terms of orders, but even its order volumes are below expectations. However, despite the weak order volumes for these large commercial airplanes we do not write-off the Boeing 747-8 and Airbus A380 as airplane model successes are determined over many years.

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F-35 and A350 among highlights of a new-look Farnborough air show

Most of the serious aerospace business at Farnborough goes on behind closed doors, but it is in the skies and static display that the world’s attention will be focused at this year’s show, with treats for fans of both latest-generation airliners and fighters.

The Lockheed Martin F-35 Joint Strike Fighter will follow its international debut at the Royal International Air Tattoo in Fairford on 11-13 July with an arrival at Farnborough – a few minutes' flying time distant for a supersonic warplane.

On the commercial side, Qatar Airways will be making the biggest splash, with no fewer than four types on display, including the first Farnborough appearance of the Airbus A350-900 in a hybrid colour scheme featuring the liveries of both the Gulf carrier and the airframer.

Qatar will also show its first Airbus A380 after taking delivery in June of the first three of 10 superjumbos it has on order (it has options for three more), as well as a sharklet-equipped A320 and a Boeing 787-8.

The appearance of the F-35B short take-off and landing variant – 138 of which will be operated by the UK Royal Air Force and Royal Navy – is a major coup for the biennial show, which takes place during the week of 14 July.

Full-scale development of the fighter began 13 years ago, and UK suppliers are heavily involved in the programme, as a first-tier participant with a 15% share. They include BAE Systems which makes the aft fuselage assembly.

The country invested $2 billion in the system development and demonstration phase in the early 2000s, making the UK second only behind the USA among the eight national partners involved from the beginning.

The UK debuts will be the first time the JSF has crossed an ocean, seven years and 15,200 flight hours after taking to the air for the first time in December 2006. However, on 25 February , an F-35A and F-35B completed a 5.7h mission in the USA.

In a neat loop of aviation history, also appearing at this year’s show will be the original vertical take-off and landing jet, the British Aerospace Sea Harrier, a veteran of UK military campaigns such as the Falklands war.

The other major airliner that is due to enter service this year is the Bombardier CSeries. However – although it would be an enormous marketing fillip for a type still struggling for orders – it appears unlikely that the CS100 will appear at Farnborough.

The issue for the Canadian manufacturer is that while its sales team would love the opportunity to show off the narrowbody at the year’s biggest air show, the type is bogged down in a delayed and highly-complex flight test programme.

Recent Farnboroughs have seen mega-orders, but whether this year’s show will see a similar bonanza is hard to predict, as airlines and manufacturers tend to keep cards close to chests. Boeing, in fact, refuses to play the “orders race” by “storing” announcements for the week.

However, it would be surprising if at least one of the blue-chip airlines did not declare their hand. Leasing companies could also be at the fore, and manufacturers of smaller jets, including Embraerand Sukhoi/Superjet International, will be keen to make a mark.

Speculation is growing, meanwhile, that Airbus may declare its hand with the A330neo. Toulouse has been hinting for weeks that it will take a decision on whether to launch a re-engined version of its smallest widebody in the middle of the year.

With the smallest version of the A350, the -800, shedding orders, a refreshed variant of the twinjet might help Airbus win over existing A330 customers or those tempted by the 787 but unwilling to take their place in a long queue.

Farnborough air show regulars may also this year notice something more enduring about the show site that, for one week every two years, transforms part of a Hampshire airfield into a bustling marketplace of the global aerospace industry.

The traditional prefabricated A-row chalets – the ones facing the flightline – are being replaced with permanent hospitality suites, allowing exhibitors to hire them for several years and leave contents in place, saving the cost of fitting out the chalet each show.

It is part of a longer-term vision by organiser Farnborough International to create the world’s best air show facility as well as a venue that attracts clients outside the Farnborough cycle. Also on the wish list is a permanent convention centre on the site of the temporary hall One.

Farnborough International already has a smaller permanent exhibition space – Five – which is well used throughout the year. Although it has to get its plans approved by both its landlord TAG – which runs the neighbouring business aviation airport – and the local authority, it is confident they will gain favour.

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Airbus and Boeing agree commercial market is robust

It is rare for Airbus and Boeing to speak in unison, but during a panel discussion at the ISTAT 2014 Americas conference in San Diego, Airbus SVP-leasing markets Andrew Shankland and Boeing VP-marketing Randy Tinseth both identified

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