13 April 2017

Airbus CEO says “he is not close to retirement”

Succession planning is proof that Airbus is a changed company

In a Reuters interview after the Airbus AGM yesterday CEO Tom Enders said he has no intention of retiring when his current term ends in 2019 and that “it is up to the board and shareholders to decide” if they want him to stay. Mr Enders’ comments yesterday are the first insight to what is likely to be fascinating succession planning at Airbus. It is interesting for two reasons; firstly the company’s history of the management team being chosen by the French and German governments and secondly what the future holds for Fabrice Bregier who currently runs Airbus Commercial Aircraft and has recently been appointed Chief Operating Officer of the newly integrated Airbus SE.

Read more...
23 March 2017

Comac C919 aircraft to fly next month, three years late

Challenges remain though to establish a Chinese aerospace manufacturing industry

The first Chinese narrowbody aircraft, the Comac C919 looks set to make its first flight next month. This is a significant milestone which will attract the attention of the aerospace industry across the globe and the event will no doubt be lauded by the Chinese government. However, this maiden flight will be nearly three years late. When the programme was launched in 2008 the target for first flight was June 2014, with the first delivery due in 2016.

Read more...
23 February 2017

All eyes on the Geared Turbofan

2017 is a make or break year for Pratt & Whitney’s beleaguered engine programme

The Geared Turbofan (GTF) engine is proof that innovating in aerospace is never an easy task. When Airbus and Boeing first introduced the concept of their new re-engined narrowbodies (A320neo and 737MAX) they were quick to reassure airlines and investors that this was a simple development proposition - a design modification rather than a clean sheet aircraft. I remember noting at the time that Airbus and Boeing were cleverly transferring the majority of engineering risk to the engine original equipment manufacturers (OEMs), and it has proved to be ever thus.

Read more...
19 January 2017

2017…the year of the rooster, Trump and flying cars

What does the year have in store for Aerospace & Defence stocks?

The Aerospace & Defence sector has two distinct sides to it, with civil aerospace and defence often proffering very different investment narratives. Historically, terrorism and political instability have tended to cause the two sides of the sector to diverge, with defence valuations surging and civil valuations falling. This happened most notably after 9/11 in 2001. At the end of 2016 though, a year defined by terror attacks and political turmoil, the situation was quite different. Defence stocks were the stand out performers during last year, driven initially by the fact global defence spending is now growing, having been in decline from 2011 – 2015, and more latterly by Donald Trump’s US election victory. However, civil stocks have also performed well. Although there have been a high number of terror attacks during 2016, improved airport security measures have forced terrorists to seek new targets and so aerospace stocks have been largely unaffected, and in fact have continued to benefit from the structural growth of passengers numbers which continues to drive output growth. So what does 2017 have in store for aerospace and defence?

Read more...
12 January 2017

Airbus does it again

Record breaking 2016 for Airbus as it exceeds delivery target

At yesterday’s annual New Year press conference, Fabrice Bregier (Airbus Commercial CEO) triumphantly announced that Airbus delivered 688 aircraft last year, exceeding its target of 670. 

Read more...
14 December 2016

Airbus is cutting it fine

Record breaking December needed to meet guidance

I highlighted last month that Airbus had its work cut out to meet its 2016 delivery target of 670 aircraft, needing to deliver 154 in two months. Well the latest statistics show 61 aircraft were delivered in November, leaving 94 to be delivered in December. I previously said that “I am not generally predisposed to bet against Airbus when it comes to them achieving delivery targets” and I think I still feel the same as their track record is strong, but it feels as though the risk is increasing of Airbus not meeting FY16 guidance.

Read more...
Andy Chambers
6 December 2016

Who’s the daddy?

Airbus, Boeing, the WTO or the lawyers

As the latest round of chest beating by Boeing and Airbus dies away until the next round of appeals, I really start to wonder why the finger pointing and name calling persists. It seems to me that only one group of people are directly benefiting from the “discussion”, and I do not mean Joe public.

Read more...
9 November 2016

Busy festive season at Airbus

154 aircraft due for delivery in 2 months

In my blog ‘August deliveries at Airbus’ I noted that during September and October we would be looking for demonstrable progress towards the 2016 annual delivery target of more than 670, given that at the end of August only 400 aircraft had been delivered.

Read more...
Andy Chambers
1 November 2016

It pays to be civil in the long run

Backlog execution should enable improved investor returns

By the end of September, Boeing and Airbus had surpassed an aggregate of 1,000 aircraft deliveries as previously announced product introductions and rate increases continue to drive up demand across the aerospace supply chain. By the year end the two companies are expected to deliver an aggregate of around 1425 aircraft, slightly higher than in 2015.

Read more...
11 October 2016

Heathrow vs. Gatwick?

The airport expansion debate rages on

Are we finally about to get an answer to the Heathrow vs. Gatwick airport expansion question? MPs are scheduled to debate the question of UK airport capacity next Tuesday (18 October) as the Prime Minister has indicated a desire to finally make a decision on an issue the Conservative Government has thus far managed to sweep under the carpet. Interestingly, the debate will be set against the backdrop of new research which shows that it is the road traffic in and around the airport that is the main contributor to emissions, not the aircraft themselves.

Read more...
17 September 2016

The debate about the A380 rages on

Singapore Airlines will not extend lease on first A380

The A380 programme has taken another blow with the news that Singapore Airlines (SIA) – the aircraft’s first buyer and currently its second largest customer - will not renew the lease for its first A380. My 19 July blog ‘The end of the road for the A380’ highlighted that the future of the aircraft looks uncertain, with one of the issues being the unknown shape of the market for second hand A380s. The end of this first lease marks a new chapter for the aircraft and so far the outlook does not look that positive. 

Read more...
13 September 2016

August deliveries at Airbus

Slow progress on A320neo

In my blog on 4 September I said I would be watching Airbus’ August delivery numbers with interest. Well they were released last week and despite Airbus CEO Fabrice Bregier saying that staff on the A320neo programme have been working overtime to catch up on deliveries, not much progress appears to have been made so far.

Read more...
4 September 2016

Busy summer at Airbus

Record breaking number of deliveries in August

In last week’s blog I highlighted that Boeing and Lockheed Martin had been busy over the traditionally quiet month of August. A recent Reuters interview with Airbus CEO Fabrice Bregier suggest that engineers in Toulouse have also been unusually industrious this summer. Airbus has not yet published official orders and deliveries data for August, but Bregier said “I can already tell you is that it will be the best month of August in Airbus’s history, in terms of the numbers of planes delivered”.

Read more...
31 August 2016

Boeing struggling to meet 2016 orders target

Is the 777 going the way of the A330?

Aviation Week last week published data that suggest Boeing will struggle to meet its widebody order target in 2016. It appears the American aircraft manufacture is suffering from the same phenomenon as its European rival Airbus where sales of the legacy A330 dropped sharply once the newer and more fuel efficient A330neo was an option. Boeing has only booked 8 orders for the classic 777 in 2016, due in part to the re-engined 777X which is due to enter service in December 2019. So what is happening and is this cause for concern?

Read more...
11 August 2016

Geared Turbofan engine too hot to handle?

Teething problems for Pratt & Whitney's new narrowbody engine

Pratt & Whitney’s struggles to deliver correctly functioning Geared Turbofan engines for Airbus A320neo aircraft is a reminder that aircraft development is always fraught with risks. Airbus clearly signposted in January that 2016 neo deliveries would be back loaded into the second half of the year. It is targeting 56 aircraft this year but as of the end of July has only delivered 11, so it has its work cut out in Toulouse. Where has it gone wrong?

Read more...
27 July 2016

The summer of hate

The impact of terrorism on the Aerospace & Defence sector

An article in the press today described the summer of 2016 as the “summer of hate”.  The relentless pace of the attacks has invoked terror into the minds of ordinary people and politicians have been forced to make frequent declarations of their determination to protect their citizens.  It therefore seems logical to me that the summer of 2016 will be one which shapes the near term future for Aerospace and Defence companies.

Read more...
19 July 2016

The end of the road for the A380?

A look at why the business case for the A380 has gone wrong

Airbus launched the A3XX aircraft (which would become the A380) in 1997 based on winning 650 orders over the next twenty years. It claimed to be in consultation with 20 leading airlines about their requirements for a new double-decker aircraft. Nineteen years on, the A380 has won just 319 orders from 18 airlines. So where has it all gone so wrong for what is Airbus’ flagship aircraft? In addition, with the announcement last week at the Farnborough Air Show that the production rate has been cut to twelve per year, what does the future hold for the programme?

Read more...