Recently in Embraer Category

LONDON -- Good Morning America, Good Afternoon Europe! Before things really kick off in the next fews days I wanted to outline what may (or may not) happen at the show. As I peer into my magic eight-ball, here's what I've come up with.
 

*Fly Dubai not included

Airbus
The A350 XWB and A320 are likely to have a very good week. Asiana is very likely to settle their mid-size wide body order, which will probably be split between 787s and A350s. The A380/747 battle should be wrapped up by year's end, so likely nothing above 350 seats for Asiana on this go-round. The A350 XWB should see a new leasing customer as well.

Once again, we're looking at a heavily Gulf weighted orderbook for both Airbus and Boeing. Emirates is likely to book an order with Airbus. I doubt it's more A380, so filling the gap until the A350-900 arrives would point to A330s as an interim aircraft to go along with it's large fleet of 777-300ERs which were topped up at Dubai last November. Qatar and Airbus press conference planned and unless they're adding more A380s, this order could be on the other end of the capacity spectrum with A320s. Though, if the order is for narrow body aircraft, this could be a sizable blow for Bombardier which is hoping that Qatar will be a launch customer for CSeries. Other signs point to Etihad making a big narrow and wide body order which could be split between Airbus and Boeing. Gulfair will likely be a widebody order and they could probably get Airbus to give them an A340-600.

Boeing
777F will be part of Monday's events though not until late in the day with first flight coming late Monday in the UK. As far as 777 orders go at the show, British Airways might be the only major European airline to book an order if those 777-300ERs pan out.

With four orders to go until the 787 officially breaks the 900 mark, what are the chances of seeing 1000 this week? Boeing hasn't announced a 787 customer since April and they've always said they don't hold orders for big air shows unlike Airbus, but 1000 is a far sexier number than 900. Orders from Asiana, Etihad and ILFC could push it above 1000, though an order for 23 and 35 787s for unidentified customers could be one or two of those three airlines. At the very least, I'd put my money on being well into 900 by the end of next week.

Keep an eye out here on Monday and Tuesday morning for coverage of Scott Carson and Pat Shanahan's briefings respectively.

On the narrow-body side Boeing's order book has 296 unidentified orders for 737s with 10 orders greater than 10 with half of those above 30. If it hasn't already been booked, the new UAE low cost carrier Fly Dubai is likely kicking off with a massive narrow body order for 737s or A320s.

Permit me for a moment to stretch the imagination a bit here, but what if the BoCo surprises everyone with a new narrow body concept? Airlines have been screaming for a new aircraft in the 120-200 seat category, but Boeing has been pushing incremental improvements like lighter weight interiors on the 737 and keeping their cards close to their vest. Airbus, by contrast, has been quite out front with upgrades to the A320 family with the potential of a GTF engine and winglets.

Is this Boeing's chance to blast ahead in this market with a major surprise? The new 2008 Current Market Forecast calls for a transition to larger, more fuel efficient aircraft. With this in mind, wouldn't a 737-700 to 757-200 range/capacity market be ripe for the picking. It would snuff CSeries in its debut, though there are plenty of reasons why this isn't happening, but I'm musing.

If we assume for a moment that launching a product in the downside of a cycle is the way to be first out of the gate when the industry takes off again then Farnborough could be quite interesting.

Bombardier
The last big air show, Singapore, Bombardier used the last big show (Singapore) to receive authorization to offer the CSeries, the company could use Farnborough to launch the aircraft officially. Bombardier is clearly pushing ahead with design work and development of the new high and hot 130XT indicates that at least one customer is pushing for these requirements.

So who is the likely launch customer? Signs point to China Southern and Shanghai, who are rumored to be meeting the CAAC (Civil Aviation Administration of China) on July 14 to receive authorization to purchase the the type, however, of the four initially identified customers, only Qatar is in a financial position to make a big investment right now.

Also, Bombardier will select a final assembly location for CSeries by July 15 (Tuesday). Mirabel, outside of Montreal, is competing with Kansas City, Missouri for the CSeries final assembly facility.

As one last note on the CSeries (and MRJ) front, the GTF should be making its first flight on the 747SP test bed next week too.

Also, I would not be surprised in the slightest if we see the CRJ1000 fly this week as well.

Embraer
We should be seeing more about the Legacy 450 & 500. Which would fit in their overall strategy for biz jets. Of the entire B.A.B.E., Embraer may be in the most solid position with record backlog, orders and deliveries coming out of Sao Jose dos Campos. Though, questions of complacency could be fair game if CSeries goes live and Boeing and Airbus begin to add definition to replacement studies.

Is the airline crisis of 2008 worse than the economic aftermath of September 11, 2001?

Yes, absolutely.

9/11 was a crisis of confidence in the safety of air travel. Airlines simply couldn't fill their planes. The 2008 crisis is far more serious. The psychological injury of 9/11 has since healed and empty planes and cheap gas has given way to very full planes and the most expensive gas in US history.

The crisis cuts even deeper now because access to new sources of revenue aren't available when planes are already full. Instead we see higher ticket prices or new fees on first bags, second bags, legroom, food, curb-side check-in and soon seatbelt usage (snark). Eventually, the price of flying will become so prohibitively high that the bottom of the market may just fall out completely. The upper level of tolerance for ticket prices is not clear yet, but it will run out eventually, and when it does leisure travel is going to take a major hit, only further slowing the economy.

Just as 9/11 saw the retirement of 737-200s, 727s, 747-200s, DC-9s, 10s and L1011s, the crisis we find ourselves in today has 737 classics, the remaining DC-9s and soon MD-80s on the chopping block. Also, once the new generation of mid-size wide-body aircraft enter service at the end of next year, the older 767s will be retired.

So, as the fuel crisis for airlines only gets worse, the three options (the good, the bad and the ugly) merging, cutting capacity or declaring bankruptcy is the only way forward.

Struggling airlines invariably mean struggling manufacturers. Or does it?

The big four (Boeing, Airbus, Bombardier and Embraer) - B.A.B.E. - consider it coined - all have huge backlogs to fall back on if orders dry up.  However this crisis should give them all pause to ask themselves if their product lines are prepared for the painful market dynamics ahead. All would likely answer yes, but here's a few thoughts for the road ahead.

It feels like just yesterday she was powered on for the first time. They grow up so quickly.

March 10, 2008 - Power On

Image Credit Jon Ostrower

April 12, 2008 - Roll Out

April 29, 2008 - First Flight

During last week’s trip to Brazil, I was introduced to one of the lesser known members of the Embraer family: The EMB-202A Ipanema.

This awkward looking green-painted crop duster is a 40 year-old design with a 21st century fuel tank. Over 1000 of these aircraft have been built since 1973. What makes the Ipanema so special? It runs on hydrated ethyl alcohol fuel, better known as ethanol. Or as it’s known in Brazil as homegrown 100% Alcool.

The fuel, which is derived from natively grown sugar cane, is converted into alcohol. In a world where oil is well above the $100 barrel mark, sugar cane based ethanol is two to three times cheaper than 100 octane LL avgas. Ethanol, unlike 100LL, has a lower CO2 output and no lead content. The increased oxygen content of the fuel even gives a 7% horsepower boost.

There are downsides though. First, the 4% water content increases maintenance costs due to risk of corrosion in the fuel system. Also, the fuel has less energy content by volume so the useful range would be less on the same tank of 100 octane low lead avgas. Yet, even with the increased risk to the fuel system, according to Embraer, the Ipanema has delivered a 38% reduction in direct operating cost by running on ethanol.

Sao Jose dos Campos – The new light jet offering from Embraer, the Phenom 300, achieved power on for the first time on March the 4th.

The aircraft, serial number 801, is currently undergoing final assembly at the Gaviao Peixoto final assembly facility 200 miles outside of Sao Paolo. The aircraft is on jacks in its current position on the factory floor positioned behind the fourth test aircraft Phenom 100, Embraer’s new Very Light Jet.

Following yesterday’s successful power on, S/N 801 is undergoing further systems integration in preparation for the aircraft’s first flight expected later in the second quarter of this year.

The aircraft is awaiting installation of its winglets, tail assembly, wheels and movable control surfaces. The first wing to body join was completed within the last week.

Embraer assembled the forward, center and aft fuselage sections at its Botucatu facility, then shipped them by truck to Gaviao Peixoto for final assembly.

The Phenom 300 will seat up to seven plus two flight attendants and sport a range of up to 1,800 nm. The avionics package will be identical to the smaller Phenom 100 which sports a Garmin 1000 adapted flight deck marketed under the name Prodigy.

Flight testing and certification is targeted for Summer 2009, with first delivery coming shortly thereafter.

The aircraft was photographed earlier today by FlightBlogger and are the first pictures to show the current state of assembly of the first Phenom 300 aircraft. A walk around photo tour of the aircraft will be available soon.

Sao Jose Dos Campos -- I've arrived here in Brazil and I'll be heading to the Embraer factory within the hour and I've been pondering quite a bit on the state of the global economy.

This last week brought us the first new wide-body aircraft type (Delta's 777-200LR) introduced in the US since Northwest first added its A330s in 2003. The last five years have demonstrated a tectonic shift in the center of gravity of the global economy. Around the world new wide-body aircraft are being delivered to the Middle East and Asia. You need only look at the ramp in Everett to see how things have changed.

With the US economy teetering on the edge of recession, the rest of the world largely goes on without significant impact. The full extent of the credit crisis yet to be seen, however the damage resulting from a crisis originating in US is far more contained. Yet, if markets sneeze in China the US nearly flips on its head. Indeed a role reversal indicative of the new global economy.

With respect to business aviation, emerging markets are driving product development. Here in Brazil this shift is evident, as the business jet offerings from Embraer are designed with the growing Middle Eastern and Asian market in mind. Marketing materials tout range charts from Dubai and Beijing along side London and New York.

These products will further shrink an already flat world enabling infrastructure development along side blistering economic development. The new products are an outgrowth of an economic boom, yet, at some point the question becomes one of the chicken and the egg. Will these new business jets encourage growth or be the byproduct of it?

More from Sao Jose dos Campos later.

A programming note for FlightBlogger for the remainder of this week. I'll be heading to Sao Paolo, Brazil this evening to visit Embraer in advance of EBACE 2008. I'll be covering the Phenom, Legacy and Lineage business jet product lines, tour the factories and speak with executives.

If you're not familiar with the business jet offering from Embraer, here's some good reading to get you caught up.

Phenom 100
Phenom 300
Legacy 600
Lineage 1000

I'm sure we'll also be hearing quite a bit about the new Midsize Light Jet (MLJ) and Midsize Jet (MSJ) which were announced last September as well.

Also, this is a country that takes its aviation VERY seriously. Just look how the capitol city is laid out. You might recognize the shape:

View Larger Map

Lastly, I added a tour of the Legacy 600 from the Singapore Air Show. Listen to the
audio tour here.
Many high resolution cabin and flight deck pictures below the fold.

One largely unreported story from Dubai is beginning to gain a bit of clarity:

Green aircraft to replace 737
By Ivan Gale, Staff Reporter
Gulfnews.com

In the next 18 months, Boeing expects to arrive at a design template for the 737 replacement, with "notional entry into service" around the middle of the next decade.

"The technology to create an airplane that could economically obsolete the 737 and Airbus 320 class of airplanes looks to us to be around 2015, give or take," Boeing Commercial Airplanes chief executive Scott Carson told Gulf News.

So how much business is at stake over the next twenty years in the single aisle market? Both Airbus and Boeing agree that there is no less than $1 trillion available between now and 2026. If you average delivery forecast from both manufacturers you have more than 16,000 new single aisle aircraft rolling off the assembly lines in the next two decades.

DUBAI -- The Saudi Arabian low cost carrier NAS Air will purchase more than 15 Embraer E190/195 jets Monday at the 2007 Dubai Air Show, Flightblogger has exclusively learned.

When asked about the size of the order, Embraer spokesman say that the order is expected to be larger than the previous record holding Gulf customer, Saudi Arabian Airlines, which operates 15 E170 aircraft on domestic and regional routes. This order would make it the largest order by a Gulf customer.

In addition, the spokesman speculated that the order was to be on par with the Virgin Nigeria order for seven E170 and three E 190 and rights and options for an additional fourteen aircraft recorded Sunday.

The Brazillian E-Jets will join a fleet of Airbus A320 aircraft on its low cost operations out of Ryiadh. NAS Air signed a of a letter of intent June 22 at the 2007 Paris Air Show for up to 38 A320s.