SINGAPORE AIRSHOW DAY 2: Forecasts, small deals and a question of trust for Boeing

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Boeing officials at a media briefing at the 2020 Singapore Airshow. (PHOTO: Matt Driskill)

The second day of the 2020 Singapore Airshow played much as the first, minus the rain, as global plane makers, engine makers and others touted small deals and rolled out forecasts for the Asia-Pacific region showing strong demand remains for the entire aviation sector. That demand is however, tempered by the current state of affairs with a trade war still simmering between China and the US that has affected plane sales there and a global virus outbreak that will severely dent the revenues of air carriers that rely on China flights that have since been cancelled.

Ihssane Mounir, Boeing’s senior vice president for commercial sales. (PHOTO: Boeing)

Boeing, which has seen its fortunes fall since two crashes that killed more than 340 people grounded its best-selling 737 MAX, rolled out the big guns to talk about its plane and service market forecast for the region and also held a media briefing where the issue of “why should anyone trust what Boeing says” came up when Asian Aviation asked top officials that exact question. Ihssane Mounir, Boeing’s senior vice president for commercial sales and marketing, appeared to wince when he heard the question, but gamely took it on and responded by saying “that’s a fair question…I would say that we have a century of history” of good work “but we know that trust is earned and we need to get that back.”

The question is fair because Boeing’s new CEO, David Calhoun, himself brought up the issue of trust when he took over in January. But rebuilding trust in Boeing takes second place to getting the 737 MAX back in the air and earning money for Boeing, which is what the entire company is focused on doing to stem the outflow of cash that is hurting the company. Sadly, at Wednesday’s media briefing, not one word was said about the 346 victims killed when the two Boeing planes crashed and not one word was said about their families.

Earlier, Boeing reiterated its market forecast for Southeast Asia, saying the region will need 4,500 new airplanes over the next 20 years, valued at US$710 billion at list prices. Single-aisle airplanes continue to be the main driver of capacity growth in Southeast Asia. This growth helps to stimulate the demand for commercial aviation services, which are forecasted to be worth US$785 billion between 2019 and 2038.

“Three countries from Southeast Asia – Vietnam, Thailand, and Indonesia – made the top 10 list of countries that added the most airline seat capacity since 2010. Vietnam has experienced the strongest growth out of the three at nearly 15 percent per year, followed by Thailand and Indonesia at approximately 10 percent respectively,” said Randy Tinseth, vice president of commercial marketing at Boeing. “With an expanding middle-class, in a market that continues to liberalise, coupled with a strong domestic, regional and international tourism sector, Southeast Asia has become one of the world’s largest aviation markets.”

Boeing said Southeast Asia will also require a “significant amount of widebody airplanes…with demand driven by airlines adapting to the evolving business environment and new long-haul expansion opportunities. Widebody airplanes will make up 19 percent of new airplane deliveries, enabling carriers in the region to serve new international long-range city pairs”.

Aviation growth in the region is expected to drive the need for 182,000 commercial pilots, cabin crew, and aviation technicians to fly and to maintain the airplane fleet across Southeast Asia. This demand is projected based on a mix of new airplane deliveries, annual aircraft utilisation rates, crewing requirements by region and regulatory requirements. In the air cargo sector, after declines in 2019, global freight volumes are projected to recover in 2020 due in large part to solid industrial production and world trade. Over the long-term, air cargo is projected to grow 4.2 percent through the forecast period. Freighters will remain the backbone of the cargo industry with the need for 1040 new and 1780 converted freighters over the next 20 years. Worldwide, Boeing projects the need for 44,040 new commercial airplanes valued at US$6.8 trillion and the demand for aftermarket services totalled at US$9.1 trillion over the next 20 years.

Singapore Airshow News in Brief

US-Bangla Airlines adds 2 ATR 72-600 aircraft:  ATR announce that Singapore-based lessor Avation has converted two purchase rights into firm orders for two ATR 72-600 aircraft. The aircraft will be leased to Bangladeshi airline US-Bangla, the biggest private airline in Bangladesh, and will support the expansion of the airline’s turboprop fleet by increasing the number of ATR aircraft from six to eight. In addition, Avation has further acquired an additional two ATR 72-600 purchase rights to replace those that were exercised. Mohammed Abdullah al Mamun, managing director of US-Bangla said: “Regional connectivity is essential in Bangladesh and the region. We are delighted that we can offer our passengers the chance to access new opportunities throughout the country. Operating the ATR 72-600 makes total sense in Bangladesh, we have received very good feedback from passengers and are very satisfied with the reliability and comfort of these aircraft.

Airbus and Singapore’s CAAS collaborate on urban air mobility: Airbus and the Civil Aviation Authority of Singapore (CAAS) have signed a memorandum of understanding (MOU) to enable urban air mobility (UAM) in Singapore. The collaboration aims to bring UAM services and platforms to reality in Singapore’s urban environment, with the target to enhance industry productivity and improve the country’s regional connectivity.  As part of the agreement, Airbus and CAAS will collaborate to define and develop an initial UAM service with an Unmanned Aircraft System (UAS). The parties will specifically work together to realise the Unmanned Traffic Management (UTM) system and services to support the initial use-case. This MOU advances a longstanding partnership between Airbus and CAAS. An earlier collaboration was first established in 2016 for UAS proof-of-concept trials (Skyways). Airbus and CAAS subsequently signed an agreement with the European Union Aviation Safety Agency to share and advance the development of operational and safety standards for UAS in urban environments.

Boeing finalises deals for supply chain solutions: Boeing announced supply chain agreements at the Singapore Airshow with multiple airlines and operators. The agreements will enable Asia-Pacific carriers to leverage Boeing’s global supply chain to streamline maintenance, repair, and operations. Recent supply chain services agreements include: All Nippon Airways, the largest airline in Japan, has expanded an agreement for consumable and expendable services to their entire fleet; Cathay Pacific, the home carrier of Hong Kong, renewed a multiyear agreement for consumable and expendable services building on a long-standing partnership for spare parts inventory management; Evergreen Aviation Technologies Corporation (EGAT), an MRO with a long-standing partnership between EVA Air and General Electric, reached a multiyear Tailored Parts Package agreement. The customised agreement provides comprehensive part coverage from Boeing’s network of global distribution centres to support EGAT’s maintenance, repair, and overhaul operations to a host of global airlines in its service portfolio; HAECO, a leading MRO, has reached an expanded agreement for consumables and expendables parts support to include additional supply chain solutions; Xiamen Airlines has reached a three-year agreement for a Tailored Parts Package to support their full fleet of Boeing Next Generation 737 and 787 Dreamliner airplanes; KAEMS signed agreement with Boeing for its first integrated inventory management solution for consumables and expendables parts in support of their growing MRO capability.

Boeing signs customers for digital solutions: Boeing announced orders and agreements that will enable growth for multiple Asia-Pacific airlines in a rapidly developing region. These digital solutions lower costs across fleets for regional and international operators, enhance airline crew situational awareness and increase operational efficiency. New digital solutions orders and agreements include: Vistara has signed an agreement for multiple services to support their entry into service of new 787-9 aircraft, including Boeing Maintenance Performance Toolbox and Airplane Health Management tools. Powered by Boeing AnalytX, these tools provide real-time, custom alerting, fleet data to enhance maintenance capabilities. Vistara has signed a new five-year agreement to receive Jeppesen Crew Rostering and Boeing Alertness Model tools to improve operational efficiency and crew planning capabilities; Air Tahiti Nui joins more than 100 international customers using Boeing Airplane Health Management by signing a multiyear agreement to access real-time maintenance and engineering data and support to enhance maintenance and operational decisions for their 787 fleet. Bamboo Airways will integrate several digital solutions to support their new 787 fleet, with new agreements finalized for Jeppesen FliteDeck Pro electronic flight bag (EFB), Electronic Document Browser and Onboard Performance Tool capabilities. These digital tools enable flight crews to perform real-time weight and balance and takeoff and landing calculations to reduce maintenance costs, optimize payload capacity and streamline cockpit operations; Sichuan Airlines has agreed to a multi-year contract for Jeppesen JetPlanner Pro services to enhance flight planning capabilities. The tool generates optimised routes and efficient flight plans in complex airspace to achieve lower operating costs, using the industry leading flight planning engine; Virgin Australia Group has signed a seven-year agreement for Jeppesen FliteDeck Pro electronic flight bag (EFB) and digital navigation chart services, to increase operational efficiency. The agreement extends a long-term relationship between the airline and Boeing for Jeppesen navigation services that provide increased flight deck efficiency.

Tigerair Taiwan selects Pratt & Whitney GTF: Pratt & Whitney, a division of United Technologies, and Tigerair Taiwan announced the selection of the Pratt & Whitney GTF  engine to power an order of 15 A320neo aircraft, which includes a combination of new aircraft purchases from Airbus and leased aircraft from ICBC’s SPV, Sky High Leasing Company. This order follows China Airline’s selection of the GTF engine to power up to 30 A321neo aircraft announced in December 2019. Pratt & Whitney will provide Tigerair Taiwan with engine maintenance through a long-term EngineWise Comprehensive service agreement. Tigerair Taiwan, a low-cost carrier established in 2014 and headquartered in Taiwan, is a subsidiary of China Airlines and currently operates 11 A320ceo aircraft powered by the V2500 engine.

Eagle Air Services Asia (ESA), Pratt & Whitney’s Singapore engine centre, has inducted its first PW 1100G-JM engine for overhaul.Pratt & Whitney announces 3D printing for component: Pratt & Whitney revealed the industrialisation of the use of 3D-printing for an aero-engine component – a first in the maintenance, repair and overhaul (MRO) of commercial engines. The 3D-printed part is projected to be part of the repair process by mid-2020 at Pratt & Whitney’s repair specialist in Singapore, Component Aerospace Singapore. The 3D-printed aero-engine component taps the production-level 3D capabilities at ST Engineering and strong domain knowledge in metal printing via a controlled process operationalised by Pratt & Whitney. This 3D printed part will first be used in a fuel system component on one of Pratt & Whitney’s engine models. The alternative material solution offers an added advantage of reducing dependency on current material supply from conventional fabrication processes such as forging and casting.

ST Engineering signs MRO deals: ST Engineering announced that its aerospace arm has secured two multi-year MRO contracts from South Korean airline T’way Air that will extend an ongoing partnership in component and engine MRO between the two companies. Both contracts will take effect from March 2020. Under the component contract, ST Engineering will continue to provide comprehensive component Maintenance-By-the-Hour (MBHTM) services to the airline’s entire fleet of 28 Boeing 737-800s. The group will also support the 25 Boeing 737 MAX aircraft that the airline plans to add to its growing fleet. Under the engine contract, ST Engineering will continue to provide an integrated suite of CFM56-7B engine MRO solutions that include off-wing maintenance support, on-wing services, engine health monitoring and technical support to the airline’s Boeing 737-800 fleet. ST Engineering also announced it has signed an agreement with CFM International to provide MRO support for its LEAP-1B engine. Through the agreement, ST Engineering will have the rights to the use technical data to perform MRO work on LEAP-1B, the exclusive powerplant for Boeing 737 MAX.

Honeywell business jet forecast: The business jet industry is expected to see strong growth in the short to medium term, supported by several new airplane models coming to the market, according to Honeywell’s annual Global Business Aviation Outlook. First released in October 2019, the Global Business Aviation Outlook forecasts up to 7,600 new business jet deliveries worth US$248 billion from 2020 to 2029, down 1 to 2 percentage points from the 2018 10-year forecast. Specifically in the Asia-Pacific region, the outlook projects that despite geopolitical and commercial tensions, purchase plans are higher in the region, up by 3 percentage points from last year. Operators in Asia-Pacific report new jet acquisition plans for 15 percent of their fleet over the next five years. Based on the expressed level of purchase plans, Asia-Pacific would represent a 10 percent share of global new jet demand over the next five years. About 40 percent of respondents in Asia-Pacific plan to schedule their new purchases within the first two years of the five-year horizon, the highest proportion of all the regions.

Japan Airlines expands 787 maintenance agreement with Collins: Collins Aerospace Systems announced it has signed a five-year tailored FlightSense agreement, valued at approximately US$200 million, to service air management and electric power components for Japan Airlines’ (JAL) growing fleet of Boeing 787 aircraft. The agreement with JAL, which builds on a 14-year relationship between the two organisations, now includes a total of 51 aircraft through 2025. In addition, Collins Aerospace will continue to support JAL’s in-house repair capabilities including test equipment, technical support, and personalised reliability enhancement programs.

airbus-newsAirbus on services: The other member of the commercial aviation duopoly, Airbus, was highlighting its service sector and plans for the future. Remi Maillard, the company’s senior vice president for the service sector, released a forecast that showed worldwide commercial services would be worth US$4.9 trillion over the next 20 years with US$2.4 trillion spent on aircraft availability, US$1.4 trillion on flight operations, and US$1.1 trillion on the passenger experience. The Asia-Pacific market specifically will be worth about US$1.8 trillion over that same period. Airbus said it was growing its Asian capabilities to have about 1,900 Airbus employees to service 3,900 aircraft for 139 customers. The company also said the region will need 220,000 pilots over the next 20 years and 260,000 technicians.

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