Face off

‘This competition drives some not entirely rational behaviour.’

The behaviour also drives various ceremonies of formalisation, often including various dignitaries, attended by bevies of uniformed flight attendants being used as props in a manner that seems more and more distasteful, in numbers inverse to the contextual scale of the order, the independence from government interference of airline operations, and the overall health of the carrier.

Orders are therefore sometimes announced, re-confirmed, and finalised at three successive airshows. It’s usually more than a little bit self-congratulatory towards the more nebulous end, as airlines enjoy parading their plans in front of the world’s assembled aviation media, but this year the wider geopolitical context threw a spanner in the works.

Large capital investment-heavy industries like commercial aviation require a certain amount of predictability and certainty to make new investments make financial sense. With the behaviour of the US White House becoming increasingly capricious, irrational and erratic, the backdrop for investment announcements is not one of either predictability or certainty.

Indeed, while Boeing is to an extent reaping some rewards from its chief executive buttering up the administration, the prospect of trade wars is looming large. In essence, said Airbus’ chief commercial officer Eric Schulz, nobody knows what bizarre all-caps Twitter screed the world will wake up to, and that’s not an ideal business environment.

This unpredictability is, Schulz noted, what is driving the increase in “unidentified customer” orders at Airbus, as airlines and their governments cautiously avoid making announcements that might trigger an early-morning response. His Boeing counterpart, Ihssane Mounir, perhaps unsurprisingly does not see a significant change.

On the military side, geopolitics is driving the rather limited news from Farnborough as well. UK defence secretary Gavin Williamson unveiled Tempest, the UK’s concept for a next-generation fighter, at the BAE Systems stand and also including Rolls-Royce, Leonardo and MBDA.

Tempest is a twin-engined, relatively large fighter that largely resembles sixth-generation fighter concepts, and is designed to replace the Eurofighter Typhoon. Details are few, including whether it will contain a pilot, while weaponry is equally pie-in-the-sky, with swarming munitions and laser-directed energy weapons mooted.

Farnborough saw calls for collaboration between Tempest and a separate Franco-German project seemingly ignore the growing stormclouds of uncertainty around the 2019 planned exit of the UK from the European Union, which will have profound and wide-reaching effects on the aviation sector. where the UK has come in for strong criticism for a lack of planning or preparedness.

The UK government advertised for a “Head of Airspace Strategy/Head of Aviation EU Exit Negotations” less than a month before Farnborough, for which it said, rather astoundingly, “prior knowledge of airspace and the aviation sector is an advantage but not necessary”.

New technologies and the digital revolution showed some fascinating promise

If Rolls-Royce is to be believed, the future of aviation will involve robotic engine maintenance, with four new remote controlled and partially autonomous robots that link into the Internet of Things, the connected network of sensors promising better decisionmaking, more efficient maintenance and lower costs via networked data.

‘The future of aviation will involve robotic engine maintenance.’

Embedded within new engines are “Inspect”, which Rolls sums up as “a network of ‘periscopes’ permanently embedded within the engine, enabling it to inspect itself using the periscope cameras to spot and report any maintenance requirements. These pencil-sized robots are thermally protected from the extreme heat generated within an engine and the visual data they create would be used alongside the millions of data points already generated by today’s engines as part of their Engine Health Monitoring systems.”

Enginemakers were early creators of aviation applications of the Internet of Things before the IoT was even a thing, with Rolls’ Engine Health Monitoring a key example.

The next future robotic addition will see Rolls-Royce putting snakes on a plane, with a concept it is calling Flare, a series of wiggling robots that the enginemaker says “are flexible enough to travel through an engine, like an endoscope, before collaborating to carrying out patch repairs to damaged thermal barrier coatings.”

While making their way through the engine, the snake-like Flare will drop off Swarm, “a set of collaborative, miniature robots, each around 10mm in diameter which would be deposited in the centre of an engine via a ‘snake’ robot.”

Swarm, which in their much larger-than-production prototype version resemble beetles, are intended to scuttle through the assembly and visually inspect parts of the engine that prove difficult for humans to reach. With live video cameras on board, Swarm operators would be able to swiftly inspect areas of an engine without first needing to remove it from the aircraft.

Additive manufacturing, which is essentially 3D printing on an industrial scale, is also a key technology of the future, and the Defence Science and Technology Agency (DSTA) of Singapore is using it to take the first step in a partnership with Airbus to expand the use of new digital technologies.
This first step will print 3D spare parts for the Singaporean A330 MRTT (multi-role tanker transport) aircraft fleet, the certification of which will be supported by the Airbus Defence and Space division.

“It is absolutely clear that digitalisation represents the future of military aircraft services,” argued Head of Military Aircraft Services at Airbus Defence and Space Stephan Miegel. “We are now at a point where we can begin to explore the most promising techniques on operational fleets. We greatly appreciate the innovative approach of DSTA in going on this journey with us.”

“Following this first agreement on 3D-printing, we have further agreed to collaborate on data analytics for predictive maintenance,” Miegel noted.
At Farnborough, Airbus also launched SmartForce, a package of maintenance data analytics that assists operators to make the most of the substantial data they create: predicting maintenance required, planning demand for parts and other materiel, performing maintenance in the most optimal way, and improving troubleshooting.

The European aerospace giant also said it will expand its Skywise data analytics programme, together with established aerospace suppliers Liebherr, Thales and Premium Aerotec, as well as the controversial data analytics firm Palantir.

Working with Liebherr and easyJet in a pilot group, the Skywise Spotlight project aims to improve aircraft operability by figuring out the root causes of operational issues, collaborating securely in real time to resolve those issues, and improving predictive maintenance.

“The projects demonstrated that bringing together a wide range of data and conducting holistic analyses enable us to realise a much deeper and better understanding of the in-service behaviour of on-board systems and components, developed, manufactured, certified and serviced by Liebherr,” said Nicolas Bonleux, Managing Director and Chief Sales Officer at Liebherr Aerospace & Transportation.

Skywise Object Explorer, meanwhile, includes Thales in its pilot, and is intended to improve quality assurance of suppliers by “reducing the cost of non-quality incurred by both Airbus and suppliers, reducing the occurrence of quality shortfalls by identifying such trends early and by accelerating resolution”.

On the supply chain side, Airbus is working with Premium Aerotec on Skywise Dispatch, which aims to make the airframer more responsive to disruptions in the supply chain as well as increasing efficiency. “The application is designed to improve demand management, aircraft assembly configuration, and on-time delivery, notably to prevent line-stops,” Airbus’ briefing document explains. “The application aligns supplier production planning and Airbus’ demand to create a single ‘source of truth’. This enables fast and easy root-cause analysis of recurring missing parts and anticipation, notably through a better visibility into production status.”

‘This enables fast and easy root-cause analysis.’

In Asia-Pacific, changing order dynamics are a crystal ball for commercial aviation in the region

A few key orders from regional carriers provide some interesting data points on the map showing the future of aviation. With major and minor carriers based in Australia and New Zealand largely fixed in their fleet planning, it’s interesting to see what the competition may be offering.
Australian lessor Macquarie placed a firm order for twenty Airbus A320neos for its Macquarie AirFinance Group Limited subsidiary, its first for the re-engined narrowbody, with its existing fleet comprising 110 A320ceo and 9 A330 jets.

Vietnamese low-cost carrier VietJet spent big at the airshow, signalling a major expansion, signing for 100 Boeing 737 MAX jets and 50 Airbus A321neos.

On the Boeing side, VietJet already had a 2016 order for 100 737 MAX 8 aircraft, the equivalent to today’s 737-800s so familiar to Australian skies. It will add a further 20 of these to its fleet, as well as 80 of the double-stretched 737 MAX 10, launched last year at the Paris Air show and even longer than the 737-900 and -900ER fuselage lengths where today’s airframes max out.

VietJet’s A321neo order was a fascinating one, though, with 50 of the longest A320neo family narrowbody an eyebrow-raising choice in the context of the 80 737 MAX 10s. While capacity may be similar on the two aircraft, the more powerful engines of the A321neo mean that it has a substantially better range profile than the MAX, which may mean VietJet has plans to start flying further afield than its current regional focus.

That’s certainly the intention at Peach, where ANA’s low-cost carrier (which recently absorbed Vanilla Air, the former AirAsia Japan that is now confusingly replaced by a new AirAsia Japan) converted two of its A320neo aircraft to the longer range A321LR, which is based on the A321neo frame.
The LR version contains additional fuel tanks to give it a 4,000nm range, allowing Peach to reach a band of Australian destinations from northern WA to Queensland from its Osaka Kansai hub, or to offer flights to most of Australia with the exception of Tasmania from its hub at Naha Airport on the Okinawa island chain that lies to Japan’s southwest.

The A321LR also swaps doors 2 for two additional overwing exits via the Airbus Cabin-Flex option, enabling Peach either to offer a less dense premium cabin by deactivating those doors or to pack passengers in even more densely than previously by retaining them.

“The introduction of the A321LR in fiscal 2020 will be the next major step in the evolution of our business and will further accelerate Peach’s transformation into the leading LCC in Asia, said chief executive Shinichi Inoue, noting that Peach would “expand its role as a bridge between Japan and Asia and greatly stimulate inbound demand to Japan”. The Japanese government has set an annual goal of forty million overseas visitors in 2020 and sixty million ten years later.

Sichuan Airlines, the Chengdu-based carrier affiliated with longhaul carriers China Southern and China Southern, confirmed its earlier plans for Airbus A350 aircraft. Initial routes are expected to be to Europe and North America, with the airline operating existing flights to both Sydney and Melbourne.

Across the sea in Taiwan, a new startup airline launched by the former chair of EVA Air will take five A350-900 and twelve A350-1000 aircraft to start longhaul operations across the Pacific, adding to its existing order for ten A321neo narrowbodies.

In the Pacific, Hawaiian Airlines confirmed that it will buy ten Boeing 787-9 Dreamliners, with rights to purchase ten more, in a coup for Seattle given that Hawaiian had previously selected the A330-800neo.

And further west, Indian airline Vistara will start longhaul operations with its first widebody aircraft, having ordered six Boeing 787-9 aircraft, with four further options.

Regional jets and small airliners dominated the show, with key market opportunities emerging

The past decade has brought major changes in the section of the market between regional jets and small airliners. At the lower end, airframers have been focussing on upgauging their existing aircraft to take advantage of newer, larger and more efficient engines, and to carry more passengers.

This has left something of a gap in the market as, for example, Embraer’s popular 70-seater E170 jet (of the current generation, which the manufacturer is retroactively now calling the E1 generation) will not be replaced by a next-generation E2 equivalent, unlike the 75-seater E175, 90-seater E190 and 100-seater E195.

The E2, powered by the Pratt & Whitney geared turbofan PW1700G and PW1900G family of engines (which also power the Airbus A320neo, A220/former Bombardier C Series, Mitsubishi MRJ, and Irkut MC-21), made an impressive airshow passenger début at Farnborough in its E190-E2 form. During the hour-long media flight around the airshow, and subsequent 45-minute wait on the ground for appropriate stairs to be found, the benefits of the new aircraft were clear, even at reduced seat pitch, with Embraer showing off a range of pitches from 29” to 34” at the 18” seat width enabled by the relatively wide E-Jet cabin.

The biggest success in the segment at the show was from Embraer, which unveiled orders from six airlines for some three hundred frames of its E-Jet aircraft, both in the E1 and E2 generation models.

Embraer released this substantial mass of orders in a big bang press conference at Farnborough, where the largest order highlighted one of the issues to be resolved with the E2 generation. US regional airline Republic, the biggest E-Jet E1 operator, which flies missions for all three of the major US network carriers under their umbrella regional brands American Eagle, Delta Connection and United Express, ordered some two thirds of the total Embraer Farnborough sum, with 100 firm orders and 100 options.

The headline model was the E175, which it currently flies extensively. This aircraft complies with what are known as the “scope clauses”, agreements between the largest US airlines and their pilot unions. The clauses cover the number, maximum takeoff weight, and passenger capacity of what were previously thought of as regional jets, but which are now operated in two-class configurations alongside or in place of larger airliners on many routes. All three airlines are capped at 76 seats and a maximum takeoff weight of 39t or 86,000 lb (39,009 kg).

These scope clauses are relatively restrictive, and constrain the larger airlines from offloading flying onto their lower-cost subsidiary carriers and contractor airlines like Republic. One result has been that the E-Jets have been relatively spaciously outfitted in terms of extra-legroom rows and first class seating in a 1-2 layout, particularly given the lack of middle seats and the wider E-Jet fuselage.

The E175-E2, however, does not fit into the existing scope clauses (nor do the larger E-Jets of either generation) largely because of the extra weight from the PW1700G engines compared with the existing generation General Electric CF34-8E.

Republic’s agreement with Embraer, however, allows the airline to convert its E175-E1s into the more efficient E175-E2s if agreement can be made with the pilot unions. The smart money is not on this agreement being swiftly or easily secured.
Enter the Mitsubishi MRJ, where only the smaller 69-80-seater MRJ70 is currently compliant with the scope clauses, and the re-energised Bombardier CRJ-900.
Mitsubishi’s launch MRJ version, the larger 81-92-seater MRJ90, made its airshow début with a slick and workmanlike demonstration on the first trade day of the show, only to receive damage to the nose radome during ground movement by local handlers. Following a day off while damage was assessed and repairs made, the aircraft performed its demonstration again, but Mitsubishi Heavy Industries would have been hoping for a less dramatic way to demonstrate the robustness and ease of repair for its much-beleaguered, much-delayed jet.

In a presentation, the company took pains to highlight its ongoing reorganisation and efficiency drives, with deliveries planned to start by the middle of 2020.

At the other end of the regional jet market sits the former Bombardier C Series, freshly painted in its new livery as the Airbus A220 following the nominal sale of the programme to the European conglomerate, which was completed early this year. (This journalist does not mind admitting that seeing what he, and others, still think of as the C Series in the Airbus house livery was a source of no little cognitive dissonance.)

The A220 had momentum on its side on its way into Farnborough, having just pipped the Embraer E-Jet E2 family to the post for a replacement programme at US carrier JetBlue, which ordered sixty A220-300 jets, previously the Bombardier CS-300.

It didn’t stop there, with a further sixty A220-300s for what Airbus delicately called “a new US airline startup”, “backed up by a group of experienced investors led by David Neeleman, founder of JetBlue, investor in TAP in Portugal and controlling shareholder in Azul airlines in Brazil”.

Prior to the show, this airline had been nicknamed “Moxy”, although the Marriott hotel group’s hotel of the same name is expected to require the final moniker to be something else.

“After years of US airline consolidation, the conditions are improving for a new generation of US airline to emerge, focused on passenger service and satisfaction,” Neeleman noted when contextualising his plans. “The A220 will enable us to serve thinner routes in comfort without compromising cost, especially on longer-range missions. With deliveries starting in 2021, we will have ample time to assemble a world-class management team and another winning business model.”

Boeing, for its part, told noted aviation journalist Jon Ostrower’s new publication The Air Current that it is “done” raising challenges to the A220 at the United States International Trade Commission. The independent US body rejected Boeing’s claims that it lost sales to the A220, and reversed an earlier ruling by the US Commerce Department imposing deal-breaking levels of US duties, in February.

Embraer orders underline geographic diversity of the regional jet and small airliner markets

As regional jets grow and become more efficient for those airlines with the capacity and demand to operate them, the range of carriers that will be the future of this market segment was demonstrated by Embraer’s big bang set of orders at Farnborough.

In addition to the Republic order, Helvetic Airways of Switzerland placed an order for twelve E190-E2s alongside purchase rights for an additional twelve. Adding flexibility, Helvetic — which operates seven E190s alongside five Fokker 100s, of which four of the E-Jets are “in the long term service” of Swiss International Air Lines, as the carrier puts it — can select the E195-E2 if it so desires.

“Our existing Embraer fleet is performing with excellent dispatch rates and our Fokker 100s have been very productive in the last 12 years,” explained Helvetic chief executive officer Tobias Pogorevc. “However, with the new E2 family, Helvetic will consolidate its highly reliable operation with the quietest and most efficient next generation aircraft available. Furthermore, moving from the current E190 to the E2 fleet will be simple for our well-trained pilots, as only two and half days of ‘non-simulator’ transition training is needed.”

Brazilian airline and E195-E2 launch partner Azul also signed firm orders for 21 additional E195-E2s, on top of the 30 it had ordered three years ago. The first of the largest E2 family members will be delivered to the carrier next year, and will serve as growth for the Brazilian carrier. “We are very pleased with our current fleet transformation process, the main vector of margin expansion in the next few years,” chief executive officer John Rodgerson outlined. “Given that 50% of our E1s will be returned within the next five years, this new order ensures the replacement of these aircraft by fuel-efficient new generation aircraft, contributing to the continuous reduction of our unit costs.”

Wataniya Airways of Kuwait will launch the E2 in the Middle East, and will also launch the remarkable staggered business class seating, which provides extra space and privacy at a 51” pitch in an alternating 1-1 offset layout, compared with the approximately 38” of pitch in the classic 1-2 E-Jet business class.

“Wataniya will not only be the first E2 operator in the Middle East, but also the worldwide launch customer of our staggered seat business class, which will establish a new level of comfort in business class for crossover narrow-body jets,” said John Slattery, president and chief executive officer of Embraer Commercial Aviation.

For Wataniya, the airline’s chief executive Rakan al-Tuwaijri noted, “We have chosen the staggered seats to differentiate ourselves from the competition, offering a superior product with extra leg room and better privacy for our customers.” The airline, which also purchased Airbus A320neo aircraft, will use its E-Jets to open new markets and increase frequencies.

Rounding out the total for Embraer were three E190-E1s for regional aircraft specialty lessor Nordic Aviation, which already owns a further 134 E-Jets, as well as two E175-E1s for West African airline Mauritania Airways, which highlighted the importance of Africa’s growing but still long-and-thin aviation route profiles to the future of the regional jet market.

Production and bridge of widebodies

As with the generational shift from the E1 to the E2, both Airbus and Boeing have similar cases to grapple with as they seek to bridge the production gap between their current generation of widebody twinjets and their re-engined next-generation counterparts.

The gap stems from airlines’ desire to take next-generation aircraft rather than late-model examples of the current-generation, although savvy carriers with the right demand and capacity profiles can reap benefits of the ongoing in-service performance improvements that airframers have made since the earlier models of these aircraft.

LEVEL, the low-cost carrier from IAG (the parent company of British Airways, Iberia, Aer Lingus and LCC Vueling, previously long-haul low-cost but now recently expanded in the shorthaul market from Vienna), ordered two A330-200 airfraft at Farnborough. Lessors are also keen to snap up these jets on the cheap with Dubai-based Novus Aviation Capital picking “up to four” 777-300ER aircraft.

Boeing, for its part, seems to have the cargo market sewn up for its strategy. It offers the 777F, essentially a cargo version of the 777-200LR, with ongoing discussion about opportunities for turning existing passenger variants of its largest twinjet into Boeing Converted Freighters, as it has done with the 747 among other aircraft. A notional 777-300ER passenger-to-freight conversion could be attractive to cargo operators looking for more volume-focussed operations when compared with today’s smaller 777F option, which is more targetted towards serving more dense cargo missions.

‘Boeing, for its part, seems to have the cargo market sewn up.’

DHL Express announced plans to purchase 14 777Fs at Farnborough, while CargoLogicHolding, part of Russia’s Volga-Dnepr Group, agreed to purchase 29 Boeing 777F aircraft alongside five 747-8Fs for Volga-Dnepr itself. Qatar Airways, after a somewhat confusing press release that mentioned a 777-300ER freighter version, leading to speculation that it might have plans to convert passenger versions to freighters, corrected itself to state that it will purchase five 777Fs in their shorter -200LR fuselage size.

Alongside the 777F, having terminated passenger deliveries of its 1980s workhorse 767 largely to stimulate orders for the 787 Dreamliner, Boeing continues to offer a freighter version of the 767-300 length airframe, and recently announced plans to speed up production. Converting passenger versions to freighters is also big business, with significant demand for the latter driven by Amazon Air, formerly Amazon Prime Air, which operates nearly three dozen freighters on lease.

No news, however, was forthcoming on plans to restart passenger deliveries, with much-mooted customer United Airlines picking up an additional four 787-9 aircraft at Farnborough.

On the Airbus side of the Atlantic, it’s all about transitioning from the current-generation A330ceo to the re-engined A330neo, with relatively soft demand for the latter something of a concern in Toulouse. Prior to Farnborough, key customer Hawaiian Airlines had jumped ship on the A330neo in favour of the Boeing 787 Dreamliner in a major coup for the US airframer, and AirAsia was using the jittery nerves to its advantage in securing keen pricing for its 66-aircraft A330-900neo order.

As it happened, AirAsia cofounder and AirAsia X group chief executive officer Kamarudin Meranun and AirAsia X chair Rafidah Aziz turned up at the Airbus chalet after all, but without cofounder and co-group CEO Tony Fernandes, who said in a statement:
“Our decision not only to reconfirm our existing order for 66 A330neo, but to add 34 more, follows what is probably one of the most thorough aircraft evaluations the industry has ever seen. We have looked at every aspect of the A330neo from technical performance and reliability to passenger comfort and it is clearly the right aircraft for us to expand efficiently our fast-growing long haul network.”

Noted Fernandes, “We are a tough customer but we get behind a product we know is right.”

Meranun, for his part, teased worldwide expansion, explaining that “we lobbied hard for the A330neo after seeing the success of the A320neo, and working closely with Airbus, we have arrived at an aircraft that we are confident will allow us to expand our low fares offering beyond Asia Pacific to the rest of the world.”