A350 delay

Airbus has just announced, at the half year earnings briefing, that another three months of delay for the A350-900 EIS will be added to the schedule, not affecting the first flight as the problem is due to a blockage in the drilling station for the wings. It is clear that OEMs are having further issues with their schedules as before with A380 and B787. Airplane development is a highly complicated program on which many small projects are really being done for the very first time, making it very difficult to estimate the actual dates.


If experienced OEMs are having issues with their plannings, the planning for C919 shall be affected, for sure, by this problems in a higher level, I'm expecting news about this in 2013.


I will update the calendar (notice that was started not using the original plannings):

Q4 2012:                    A320 Sharklet EIS
December 2012:         CS100 first flight
H1 2013:                    A350-900 first flight
end 2013:                   CS100 EIS
H1 H2 2014:               A350-900 EIS
2014:                          C919 first flight
October 2015:            A320NEO EIS
mid 2016:                   A350-800 EIS
2016:                          C919 first flight
2017:                          A350-1000 EIS
2017:                          B737 MAX EIS

Fanborough orders

Airshow has finished with relative low airplane sales compared to other years (one argument could be that we have been getting used to a high demand period). Having NEO and MAX launched last year concentrating most part of their sales by then, both giants have been unable to get further big commitments. NEO's backlog is 1500 airplanes and only 37 airplanes were sold at the airshow, meanwhile, MAX made it up to 175 airplanes (removing 75 that were a conversion to firm orders and also releases of previous customers already accounted) raising the total orders to 655.

Although Boeing is seen as the "winner" of the week, my impression is that they are taking advantage of an earlier delivery of airplanes compared to abig backlog at Airbus, industry seems to have in their mind "you are now late for NEOs". My opinion is that the manufacturer that really made a good job was Bombardier, from 138 orders before the airshow, a total of 35 new orders were acquired. 25%  of their sells (similar to Boeing increase) but for a newcomer on the segment. That makes 2012 one of the best years of Bombardier CSeries. Europe and USA should move their eyes to Canada and forget for a moment about China.

Aircraft Schedule

I have tried to compile the upcoming schedule for the different aircraft developments projects. Notice that Bombardier expects only one year of flight tests for ensuring entry into service of CS100, the same time that Airbus (as experienced manufactured on wing mounted engines):

Q4 2012:                    A320 Sharklet EIS
December 2012:         CS100 first flight
H1 2013:                    A350-900 first flight
end 2013:                   CS100 EIS
H1 2014:                    A350-900 EIS
2014:                          C919 first flight
October 2015:            A320NEO EIS
mid 2016:                   A350-800 EIS
2016:                          C919 first flight
2017:                          A350-1000 EIS
2017:                          B737 MAX EIS

Further comments on Aircraft Demand forecast

Yes, another article about market forecast, after Boeing's recent release a lot of traffic about this topic is appearing in internet, so I will keep on with the tendency.

Reading Leehman forecast analysis I have notice several important strategic decisiones made by the airplane manufactures companies. Part of this decisions can be understood from their market forecast. I would like to base the analysis in the following information that can be extracted from the different documents:

• Boeing (following Leehman) analyzes the regional market (70-90 seats) just one segment below their B737-600.
• Airbus analysis considers the peak of demand on the segment 150-175 which matches with the current demand of A320 and B737-800. However Bombardier declares a similar demand size in the smaller segment (100-150) segment already covered, and with the market experience from Airbus (A319) and Boeing (B737-700) doesn't seem to be the biggest market.
• Bombardier stops at that segment, up to 149 seats.

Analyzing just this information, my reflections are not very possitive for Bombardier. Boeing and Airbus seem to have a better market forecast experience at this aircraft size segment which has been mastered by them in the last decades. However, a newcomer moves the forecasted market peak to smaller aircrafts, segment already covered by both airplane manufacturers having already available data. Probably, Bombardier has performed their business analysis based on a market share on a bigger cake that actual one, finally giving them an important amount of airplanes sold to satisfy the business case of a new airplane development in the segment. If the market forecast is wrong, have they made the wrong movement? Risking to create a completely new airplane configuration (first time Bombardier develops a wing-mounted airplane), why don't reach the biggest cake?

Is interesting to see as well, that Boeing is taking care at the regional segment. Is this a forecast intended to understand potential movements of regional manufactures or reflects an intention from the company?

Boeing's 2012 Current Marke Outlook

Thanks to Leeham News I've read about the recent update made by Boeing about its market forecast for the next 20 years. The outlook is not very detailed, but the big headlines are quite interesting. The full debrief will be available by 5th July, but I will provide as well my very first view after having a glance of what's available:

• Focus is China and Asia market. Asia Pacific will be covering 35% of the market (it is not clear if we are talking about 2031 market of 2012-2031 market). What's the outlook from Boeing for capturing such market with COMAC in the game?
• Fleet will be around 40000 airplanes at 2031, that means 21000 of them coming from market grow which is seen as 60% of demand. So total demand will be close to 35000. Which is 20% more optimistic than Airbus' previous year outlook.
• Boeing's view is that the current product market sharing is heading in higher frequency and smaller size. Taking from Airbus and Boeing historical deliveries and orders we can see that the market share (former deliveries) of SA is close to 47%, and the current orders in the backlog show a market share of 71%. From the product demand in the last years I think it is confirmed that smaller aircraft demand is growing. The comment about low level of demand of very large aircraft seems to be sensitive, and from my point of view, very large aircraft was a fashion in the early days of B747, shrinking now down. This raises a question to me, were B787 and A350XWB an early move instead of a new SA?
• Mobile, the hot topic of the week, the concern from Boeing is the efficiency in having 4 final assembly lines. However, this statement is not confirmed with data, if each FAL is producing 40 airplanes per month, where is the efficiency limit, is it 20 or 100?, has Boeing performed such analysis and share the data? Moreover, how your measure efficiency, at the moment Airbus is having 3 final assembly lines for SA for one in Boeing, but the backlog of Airbus orders is 3300 airplanes and Boeing's is 2600, so Airbus product is more competitive, that includes airplane performance, cost and political advantage for very similar products. Who is more efficient? (ok, next step is knowing the margin of the airplane but in terms of marketing Airbus is on top)

Via: Leeham News

Sobre el valor de Bankia

Bueno, como dije en la introducción alguna de las entradas la haré en español, dependerá un poco del público objetivo de lo que escriba.

Ayer mismo se publicó la evaluación de Bankia por parte de diferentes auditores externos contratados por el Gobierno, la evaluación arrojó un valor negativo de más de 13000 millones de euros, sin embargo las acciones de Bankia no han bajado significativamente desde los 0.91 euros de inicio.

Básicamente, el gobierno ha pedido la evaluación para saber el precio de Bankia, lo cual indicará qué porcentaje de la entidad se quedará si hace una ampliación de capital. Si el valor es negativo entonces, cualquier euro que introduzca será el 100% del capital. Es decir, si yo como particular introduzco 1 euro, me debería convertir en el mayor accionista de la entidad, ya que he introducido más de lo que vale la misma.

Sin embargo, el mercado no está de acuerdo, mientras escribo esta entrada la acción sube desde el valor mínimo de esta mañana de 0.875 euros por acción hasta 0.896. Es decir, el mercado no acepta la evaluación y sigue pensando que la entidad tiene un valor positivo aunque bajo.

Al final, cuando se hace una valoración de una empresa se tienen en cuenta varias cosas, y una de las más importantes es como se espera que evolucione en un futuro la entidad, en función de esa expectativa surgirá un valor u otro.

La pregunta que hago es, ¿quién paga el trabajo de los tasadores? ¿cuáles son sus incentivos? Es Bankia quien paga su trabajo, el Estado o Europa. El mensaje actual para los inversores que acudieron a la ampliación de capital es que todo lo que han invertido se pierde.

Via: Finanzas.com

A320 at Mobile?

A post from FlightBlogger published today (28th June) declares some rumors about a new Airbus assembly line at Mobile, Alabama. Expectation from FlightBlogger is that the production will grow to 60 aircrafts per month, while current production up to May 2012 at Airbus is around 36 per month. As per market forecast of Airbus there will be in the next 20 years a demand for 19165 airplanes and 23370 as per Boeing expectations.

Typical ramp-up for a new assembly line will take close to 2 or 3 years for fully operational capacity at a level of 60 aircrafts (still will be interesting to see if a new transport system will be implace instead of Beluga, or a number increase of these old aircrafts)

Depending of how you make this forecast, we will end in a total production during the next 20 years of 13400 aircrafts. Based on previous forecasts Airbus is targetting between 57-70% of market share in that segment. Knowing that Bombardier and COMAC are potentially new comers to this business segment, the strategy of Airbus is very aggresive.

In parallel, Boeing is having a lack of experience in working outside USA, any subsidiary of Boeing is focused in a very single skill or it's part of the supply chain. What will be so the answer of Boeing if Mobile's plant is finally built? My expectation will be that Boeing will react in a similar way, in line with their bigger market grow expectation, but expanding their plants at USA and not going abroad.