OEMs ready product lines for return to growth

 - October 27, 2010, 6:48 AM

As airline traffic continues to recover from the global recession, airframe and engine manufacturers continue to develop new models and consider follow-on products. Several companies provided updates at the European Regions Airline Association assembly in Barcelona in late September.

Embraer, for one, said it could decide between possible re-engining of its E-Jet series and initiation of an all-new project by the middle of next year, according to airline-market executive vice president Paulo Cesar de Souza e Silva. He said the manufacturer is considering the alternatives and what the competition might do. “We could decide in the next six to nine months,” he said.

The Brazilian company remains uncertain of airlines’ appetite for a new design: the question will be whether a potential 4- to 6-percent reduction in fuel burn is sufficiently attractive to balance the investment. Embraer concedes that its hand might be forced if Airbus offers an additional powerplant choice for its A320 series. “The most evident option, if [Airbus or Boeing] re-engine, is to re-engine the E-Jet[s] to remain competitive,” said the Embraer executive. “We know our market well, and there is a lot of activity in our segment. We cannot afford to make a mistake.”

Asked about a possible return to the regional-turboprop market, Souza e Silva replied, “Never say never,” but he confirmed that Embraer’s focus remains on RJs. “We did look at the turboprop opportunity [in light of] oil-price and economy [trends, but] the market is not big; it is narrow and there are two good, well established manufacturers,” he said.

100-seaters for LCCs
Regarding current products, Embraer sees a possible emerging market for 100-seat RJs among low-cost carriers (LCCs) and lessors. Souza e Silva acknowledged that the global economy needs to improve to provide cash flow for operators, but he said that many airlines are not filling their single-aisle equipment. “More than half the aircraft on [single-aisle] routes could be 100-seaters,” he noted.

He suggested that LCCs might begin to address “thinner” routes, for which their strategy might require smaller aircraft. “There could be a new business model: LCCs operating at 100 seats,” he added. The lease industry represents a further aspect of Embraer’s strategy to develop sales of its E-Jet. “We see new players in the market, for which lessors are 40 percent,” Souza e Silva concluded.

Another manufacturer considering both lease and LCC market opportunities is SuperJet International, which promotes Russia’s Sukhoi SuperJet SSJ100 in many regions of the world. SuperJet International chief executive Alessandro Franzoni expects the aircraft to receive Russian type certification in the coming weeks, in
time for the SuperJet’s entry into service with Aeroflot in January.

The company holds firm orders from Aeroflot for 30 SSJ100s and options on a further 15, while Armenian national airline Armavia has ordered two and taken options on another two. Franzoni said Aeroflot wants high, “[Airbus] A320-standard” technical dispatch reliability.

SuperJet International has started to consider LCCs among its sales targets and has increased its focus on Africa and Latin America since the recession has blunted demand in Europe. Initially, LCCs were not considered because they generally wanted larger aircraft and preferred single-type fleets, but–like those at Embraer–SSJ marketers now perceive LCC interest in smaller equipment.

The aircraft last month flew evaluation flights for major carrier Alitalia, which is interested in at least 20 aircraft (with options on five) for lease to replace or augment 10 owned Bombardier CRJ900s, six leased Embraer E170s and Avro RJ70s now in service. SuperJet International has secured an attractive open-ended lease, according to Franzoni. “We also offered attractive support [since Alitalia might] be the first major Western customer,” he said. The airline is also considering Bombardier and Embraer equipment.

PowerJet Production Continues
SuperJet engine provider PowerJet is increasing production of the SaM146, of which it expects to have delivered 12 examples this year, said chief executive Jean-Paul Ebanga. Next year it will ship between 30 and 50 engines. Initial production will include a number of spare units to accommodate any attrition in the early days of commercial service. Ebanga said some also were required to establish an engine-lease pool, while others were destined to serve as spare engines (or parts sources) for operators.

After initial certification and establishment of production, PowerJet is now completing customer-support preparation, which comprises three stages. First, maintenance considerations account for the SaM146’s reduced number of parts (typically 20 percent less than in comparable engines). Next, PowerJet organized a support infrastructure that already boasts some 80 field representatives and two distribution centers. Finally, the company has established customer-support agreements covering spares distribution, training and service (including power-by-the-hour on-condition maintenance).

Bombardier remains optimistic that further orders for its new C Series jetliner will come, but resists any temptation to predict the likely timing. Bombardier Commercial Aircraft president Gary Scott is talking to “dozens” of potential customers from “all quarters of the world.” He said orders for 10 or more aircraft represent customers’ typical requirements.

The project has entered the “complete product definition phase” and the program’s reality “is starting to show in bricks and mortar.” Recent investment includes an $850 million 600,000-sq-ft composites wing facility in Belfast and an 860,000-sq-ft plant near Montreal.

Bombardier expects to deliver its first 100-seat CRJ1000 around the turn of the year to Air Nostrum, one of two European regional launch operators–the other is Brit Air–that together expect to acquire 49 CRJ1000s. The Canadian manufacturer is preparing to deliver the 1,000th example of the Dash 8/Q Series regional turboprop design before year-end.

Studies of a possible 90- to 100-passenger “Q400X” development continue. According to Scott, there is “too much potential interest” in the project to think that Bombardier “would not go ahead.” However, a decision on whether or not to proceed likely won’t happen before “mid-decade, or a little later.” Scott even holds out the prospect of a subsequent regional turboprop design. “Some day, some time, we’ll probably build a new aircraft,” he said.

A candidate engine for future turboprop regional airliners could come from General Electric, which estimates a new powerplant could enter service in the second half of this decade. Small commercial engines general manager Chuck Nugent sees a “steady and growing market,” which GE is studying “actively.”

The company envisions a GE38-turboshaft-based 6,000-shp engine, already dubbed CPX38. It has invested “significant” sums and is talking to airframe manufacturers about new aircraft to succeed current Dash 8 and ATR designs. “We anticipate around 1,800 turboprop deliveries over the next 20 years. It is a strategy that might work well,” concluded Nugent. –