Sizing up engine market share on the A320 family

While competition between Airbus and Boeing snares nearly all the headlines and all the “sex,” competition for engine orders is less sexy and receives less attention.

Part of this is because of the increasing trend toward sole-sourcing. The Boeing 737 has been sole-sourced by CFM International since the creation of what is now called the Classic series: the 737-300/400/500. Pratt & Whitney believed at the time Boeing was upgrading the 737-200 that airplanes were up-gauging and bet its future on the Boeing 757 size. It was one of the classic corporate blunders of all time.

Shut out of the 737, P&W joined with Rolls-Royce and MTU to build the International Aero Engine V2500 for the Airbus A320 family. IAE came to the table late, giving CFM a solid head start on the program with a variant of the CFM 56 that powers the 737 Classic and later the 737 NG.

IAE trails to this day, but has done a remarkable job of coming from behind. CFM tends to be favored on the A319 and A320 while IAE is the preferred engine on the larger A321. IAE offers more thrust and better economics on the A321 while the CFM has better economics for the smaller Airbuses. CFM’s reliability is legendary and tends to be better than the V2500.

The blog PDXlight has done a marvelous job of dissecting the engine market share of the A320 family for the New Engine Option. We asked PDXlight to do the same exclusively for us for the A320ceo family. The results are below the jump.

Gov vows to keep 777X in Washington

Gov. Jay Inslee vows to keep assembly of the 777X in Washington State, a development that gained even higher profile this week with the announcement by Boeing Tuesday that it will spend $1bn to expand its Charleston (SC) facility.

In a press gaggle last week following Boeing’s opening of the Everett Delivery Center at Paine Field, where the current generation 777 is assembled, Inslee repeated his vow to win assembly of the successor airplane for Everett.

“Boeing management understands we’re the jewel of aircraft manufacturing in the world,” Inslee said. “We have to understand that every single model from here on, including the 777X, is going to be competed. We need to do our job to be competitive, to improve the skills training from machinists and engineers, to improve the transportation system so that we can move products and Boeing can move their engines back and forth. If we can do these things, we’re always going to be on top and I intend to do that.”

We asked Inslee about Washington’s strict environmental regulations compared with Southern states, including South Carolina, where regulations are much more lax compared with here. Inslee, a strong environmentalist during his tenure in Congress and who has a strong “green” agenda as governor, replied:

“I am firmly of the conviction that we can have a sound environment and a booming economy, including aerospace. What we can do is maintain our standards but I do hope we can find a way to expedite our permitting decision-making. I think we can make these on a more timely basis and I am working with my regulatory agencies to do that. I believe Boeing values the environment as we do in Washington, and we’re going to have both.”

The press gaggle then shifted over to Pat Shanahan, VP of Aircraft Programs, who was the ranking Boeing representative at the Delivery Center’s opening. In his position, he is also keenly involved in new aircraft development.

Given the now-paranoid nature of Washington politicians and media over Boeing’s future here, Shanahan was asked if the new Delivery Center had any bearing on Boeing’s commitment to Puget Sound.

“We wouldn’t build a facility like this if we weren’t committed to it,” he said. We then asked if the Everett facility has enough room to seamlessly integrate the 777X, or whether an expansion would be required, or whether another airplane program would have to be discontinued to make way. We noted that the Renton facility had to displace some staging areas for parts and equipment currently serving the 737NG production to make way for the 737 MAX line start-up.

“We have a lot of options,” replied. “You saw in Renton we had a lot of options. Over the course doing any kind of development, or laying out a program, you go through every one of those as well as what kind of investments are required and what kind of business case you need to make. We’re in the midst of the 777X doing lots of studies.”

Shanahan declined to answer a question from a reporter whether the 777X will kill the stagnant 747-8I.

Separately:

• Here are some video interviews on the Porter Airlines/CSeries announcement.

Single-Aisle backlog market share between the Big Two

The rivalry between Airbus and Boeing intensified in recent weeks with Airbus landing another major order from a previously exclusive Boeing customer, LionAir. Boeing announced another major order just a day later, Ryanair, retaining exclusivity with this customer.

The market share battle between Airbus and Boeing was fierce and prolonged. The introduction of the A320neo family placed more pressure on Boeing, particularly when it became clear Airbus was going to land American Airlines as a major customer for Current Engine Option and the New Engine Option. Boeing, which had been dismissing the neo as a viable option and dithering about whether to proceed with a new design to replace the 737 NG, found its hand forced. Having no other choice, Boeing launched the MAX, a re-engined version of the 737 NG.

With all the recent orders, we’ve done the math and determined market share for the current generation and re-engined types and sub-types. This data is through March 31 and only includes orders that have been listed as firm contracts, not those that have been announced but not yet firmed up.

Sources are Airbus, Boeing and Ascend Worldwide.

McNerney on unions and other stuff; where will 777X be built?

Note to Readers wishing to comment: See this article and our Comment #35 and be forewarned.

Boeing CEO Jim McNerney is cited in the Puget Sound Business Journal on labor unions, China and other stuff from his appearance at an aerospace summit.

In the article, McNerney tries to take a moderate stance on unions. But just this week Boeing announced it is moving SPEEA and other union jobs out of Puget Sound, here and here. The moves resulted in a blast from Seattle Times columnist Jon Talton here, and our response here.

Production is booming in Seattle’s Puget Sound, but it’s clear to us that Boeing is engaged in a long-term strategy to build up Charleston as a major, second production plant–not just a 787 production line. We see Charleston-as-to-Seattle as Hamburg-is-to-Toulouse some day. We don’t see Everett shutting down (at least not in our lifetime) because there is too much there. We think Renton is more at risk, once there is a New Small Airplane finally designed to replace the 737–but this is well into the next decade.

The question over where the 777X will be be built is, to us, a little more vexing. Logic says build it here, given the similarities between the baseline 777 and the derivative 777X. This is no different in principal than the 737NG and the 737 MAX–it would have been silly to build it elsewhere.

But McNerney’s comments about labor in the Business Journal notwithstanding, the anti-union sentiment at Boeing Corporate is obvious for all to see.

The future of the 747-8 is in jeopardy. Boeing said as much in its 2012 10K:

Odds and Ends: Second SPEEA vote results tomorrow night; Big LionAir-Airbus order finally ready

SPEEA vote tomorrow night: Update: Tomorrow is now today; the SPEEA vote results will be counted tonight (Monday).

The revote by SPEEA technical workers will be counted Monday night. Technical workers rejected the best and final offer from Boeing last month and authorized a strike. The professional engineers accepted the contract but authorized a vote, a technical maneuver that became moot with contract acceptance.

The issue leading to rejection was Boeing’s desire to shift from a defined pension plan to a defined contribution for new employees.

Boeing refused to improve its offer. Without the backing of the professionals, we think the technical workers will vote to approve the contract this time.

Vote results will be well into the evening.

Big Airbus-LionAir Order: At long last, the huge order we first referred to September 24 last year appears ready to be announced Monday, Paris time. Reuters, The Wall Street Journal and French papers are reporting the deal will be announced tomorrow. It’s for A320s (neos, maybe some ceos) and breaks Boeing’s monopoly with LionAir and the 737/737MAX. This is a huge win for Airbus.