Date: 21 Sep 98 00:31:33 From: Chuanga@cris.com (H Andrew Chuang) Organization: Concentric Internet Services
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The past 18 months have not been kind to Boeing, and Airbus's newly gained prowess has once again overshadowed Boeing at the Farnborough Air Show. OTOH, Boeing had accumulated a sizable backlog over the past years. Thus, if one looks at future deliveries, Boeing should still be able to maintain the 60% market share as long as they can turn the tide around, soon. At the air show, Airbus announced its intent to launch the A318 with Pratt & Whitney's new PW6000 engine. However, I think the Airbus 100-seater will only be launched if they can secure an order from Northwest. IMHO, the A318 only makes sense to two large carriers with a need of 100-seater, namely Northwest and Air Canada, because both carriers are also operating the A320 family of aircraft. Northwest appears to have established a solid relationship with Airbus, I think Airbus is quite optimistic of NW launching the A318. Nevertheless, IMHO, the B717 is already an oversized regional aircraft, the A318 is even worse. I seriously doubt it will sell well. For Boeing, they have failed to secure further B717 orders before the air show. I find a recent rumor of TWA possibly ordering the B717 to be quite interesting. Earlier this year, TWA ordered 24 MD-80s. Hence, the B717 might actually be a sensible choice for TWA. The hot-selling A330-200 appears to have cooled down a little bit. Only an order for one plane by Emirates was unveiled at the air show. However, Airbus has gained additional A340-500/600 sales for a total of 11 units of firm order and an additional of 15 options (ILFC ordered 5+5 and Emirates 6+10). EVA Air has officially withdrawn its previous committment to buy up to 12 A340-500/600s due the Asian financial crisis. Including Singapore Air's order (of which the contract has not been signed), Airbus has a total of 16 -500s and 34 -600s on firm order. Boeing is supposed to refine the B767-400ER to better match the A330-200 capabilities. I think this is the reason why the B767-400ER backlog has stalled for a while, but GE Capital did order three -400s at Farnborough. On the B777X front, I finally read something (in this week's Flight International, 16-22 Sept) that makes sense: GE might offer a 112K lb-thrust GE90 for the B777X. My impression (which has been confirmed by various reports and Boeing's proposal to use the APU for additional takeoff thrust) that a B777X with two 102K engines will be seriously underpowered and will have very poor takeoff performance. IMHO, the "unexpected" appearance of the US$3b A340-500/600 has forced Boeing to go a step further in order to be competitive. GE did not see a big market for a 102K engine and decided to withdraw its earlier offer. I guess GE was right; and Airbus has been snatching away potential B777X launch customers. If the engine requirement does go up to the 110K range, the GE90 might have a big advantage over the competition. I seriously doubt the PW4000 can go much beyond its latest 98K engine. the Trent 800 can probably be grown beyond 100K with some work. With the monopoly on the A340-500/600, it won't hurt R-R too badly even if they can't grow the engine. Since I am talking about engines, I might as well make a few comments on the engine companies. Rolls-Royce had a tremendous showing at Farnborough. R-R and its American subsidiary, R-R Allison, have garnered most of the engine orders at Farnborough. GE made a respectable showing, but two of the three big orders it "received" at the air show were from (surprise, surprise) GE Captial Aviation Services for 30 A320s and 12 B767s, and the other big order was from Varig, from whom GE Engine Serices acquired 95% of Varig's engine overhaul operation. Nevertheless, GE is going after the aftermarket business in a big way. It has projected US$5b revenue this year from its aftermarket opeartion or nearly 50% of GE Aircraft Engines' sales! (Rolls and P&W combined aftermarket sales are about 50% of GE's.) Other than the announcement of PW6000 being selected for the A318, Pratt & Whitney left Farnborough nearly empty-handed!