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Monday, July 21, 2008

Farnborough Watch – ATR, BSRA, EMB, GE, Saab

In addition to the CSeries launch, Embraer, which emerged as the clear winner for those keeping score of orders, announced an E-jet order to Kun Peng, significant because it confirmed the airline, 44 percent owned by Mesa Air Group, no longer needed the 20 aircraft MAG had planned to place there. It also paved the way for Embraer’s EJets beyond the AVIC I ERJ 145, now being produced in China with a two-year backlog. Otherwise, little new news emanated from regional OEMs, save Bombardier’s launch of a Q400 freighter. More news came from engine manufacturers who were all touting the development of new, more fuel efficient, environmentally friendly offerings. In the lead, of course is Pratt & Whitney’s Geared Turbo Fan (GTF) which, while its gearbox has raised suspicions the engine will require increased maintenance costs, will head into service in 2013 aboard the Bombardier CSeries and, more important to regionals, the Mitsubishi MRJ.

ATR Continues to Study Next Aircraft, New Training Center
ATR said it is considering the development of a new turboprop aircraft and updated its order book touting the fact it expects to deliver its 1,000th ATR 42/72 by year. ATR CEO Stéphane Mayer confirmed the company is looking into a 90- to 100-seat next generation turboprop and updated progress on the ATR 72-600, scheduled to enter the marketplace in the second semester of 2010.
Mayer echoed other manufacturers in noting an industry-wide move toward larger aircraft to the point the company is considering development of a new aircraft, although he would give no details.
“While the first semester has been characterized by a slowing economy, high pressure on airlines’ costs and rocketing fuel prices, there is strong growth potential in the regional market, there is an expected demand for 2,900 turboprops in the next 20 years, and an estimated annual passenger traffic growth around eight percent,” said Mayer. “We strongly believe that the fundamental reasons of ATR’s success are long-term characteristics, and that our capacity to provide aircraft that feature the most updated technology, the lowest operating costs and the highest environmental-friendliness of the regional aviation will sustain our success.”
The manufacturer has delivered 31 aircraft this year an expects annual revenue to surpass $1.3 billion this year. Mayer noted that ATR tripled its backlog and achieved a five-fold increase in aircraft production over the past three years. “We are currently achieving a dramatic growth, in coordination with our suppliers, in order to respond to the market needs, consolidate our market position and maintain our market share between 50 and 60 percent the next 10 years,” he said.
“The trend is towards larger capacity aircraft, which ATR intends to address,” he said of evaluations of the 90- to 100-seat aircraft. “No final decision has been taken, but we are evaluating our future product strategy.”
Instead he focused on the deployment of the first ATR 72-600. “We are proud of having launched our ATR –600 series, which with its newest technologies being installed in the cockpit and its most modern engines, represents the most cost-effective and environmental-friendly regional aircraft of the next decade,” he said. “The development of this very last member of our aircraft family is going as scheduled, and we do confirm second semester 2010 as the year of the entrance into service of the first –600.” It will feature glass avionics, more powerful engines with the Pratt & Whitney PW 127M and greater payload and performance. The engines are already being incorporated on the -500 production line. The -600 will also have lower emissions, improved operating costs and better comfort

New Asian Training Center
ATR is partnering with Malaysia Airlines on a new training center in Kuala Lumpur. The center will be operated in cooperation with Malaysia Airlines’ subsidiary Firefly, and will be equipped with a Full Flight Simulator (FFS), developed by the Canada-based CAE.
The decision to open a new Asian Training Center was taken in view of the growth of the ATR fleet in Malaysia and its surrounding area. ATR entered the Malaysian market last year with sales to the Malaysia Airlines’ subsidiaries Firefly and MASwings, and to Berjaya Air.
The center, which is based at the Subang Airport, is available for all the ATR operators in the region and is already almost fully booked until the end of the year. This is the second training center of ATR in South East Asia, after the one set up in Bangkok.
“We decided to open this new Training Center in Kuala Lumpur because of our strong growth and our good perspectives in this part of Asia.” Said ATR CEO Stéphane Mayer. “In addition, the Bangkok Training Center, operated jointly with Thales, was reaching saturation with growing requests from Asian customers. Besides its training centers in South East Asia, ATR counts others in Bangalore, Houston, under an agreement with Flight Safety International) and Toulouse. ATR is currently evaluating the possibility to set up a new one in Brazil.

New Sales Campaign, Web Site Launched
ATR launch a new website – www.whyatr.com – as part of a new communications campaign launched at Farnborough. The campaign focuses on ATR’s main values and their impact on the success of the ATR aircraft in the regional operations worldwide. The web will join www.atraircraft.com as official website.

Porter Takes Two More Q400s
Porter Airlines placed a firm order for two Bombardier Q400 airliners, converting two of 10 options taken in 2006, when Porter ordered 10. Based on the list price for the Q400 aircraft, the value of the contract is approximately $52 million.
Porter now has firm orders for a total of 14, 70-seat Q400s, which includes its original order announced in February 2006, a subsequent transaction in March this year, and this order. Six Q400s have been delivered and are currently in service. Within one year, said the airline, the fleet will double in size to 12 aircraft and the full order of 20 is expected to be delivered in less than two years. Porter was recently recognized by Bombardier for achieving 99.59 per cent dispatch reliability, the highest in the world for all Q400 operators.
Total firms orders for the Q400 aircraft now stand at 308, with 200 delivered as of April 30, 2008.

Q400 Freighter Launched
Eskilstuna, Sweden-based Nord-Flyg will launch the Q400 PF (Package Freighter) with two previously owned aircraft re-configured by Cascade Aerospace of Abbotsford, British Columbia. Nord-Flyg said it had also signed a Letter of Intent to acquire three additional Q400 PF aircraft from a third party. The first aircraft is scheduled to be delivered to Nord-Flyg in the last quarter of 2008 for its overnight package delivery services in Europe.
"The Q400 PF aircraft will fill a gap because there is no other turboprop in the freight business that offers a 360-knot (667 km/h) speed and can comfortably fly more than the 700 nautical miles (1,296 km) required for our operations" said Ulf Darenius, president, Nord-Flyg. "Based on current fuel prices, the Q400 PF aircraft will save us approximately $1.8 million based on an annual utilization of 1,200 hours, compared to a jet of similar size. Air Navigation and weight-related charges are also anticipated to be 30 percent less than those faced by the jet."
As a Package Freighter, the Q400 PF aircraft will have a maximum payload of 19,800 pounds (8,981 kg). With an 18,519-pound (8,400 kg) payload, the Q400 PF aircraft can fly 1,120 nm (2,075 km) at long-range cruise speed.

Now we know why Embraer is so bullish on Mexico and the Middle East and China. Embraer just placed 27 aircraft to Kung Peng, Aeromexico and Saudi Arabia’s National Air Service in addition to Austrian’s NIKI. It certainly looks as if its arguments for right sizing are getting through. Related Story

Kun Peng Orders ERJ 190
We now know from whom Kun Peng will be sourcing its aircraft, after it was revealed it told 44 percent stakeholder Mesa Air Group that it would not need more than the five CRJ 200s already placed with the airline by the U.S. regional; a move which prompted MAG to move to sell off its share. Related Story  MAG counted on placing 20 CRJ 200s with the Chinese carrier.
Kun Peng Airlines Co, Ltd, and Embraer announced at Farnborough the acquisition of five firm Embraer ERJ 190s, fulfilling Embraer’s intimations that it will make greater headway into the burgeoning Chinese market despite the development of a home grown regional jet in the ARJ 21. Related Story www.aviationtoday.com/ran/categories/commercial/21242.html
The total value of this agreement is $187.5 million, at list price. The new ERJ190 of the Chinese airline will be configured with 98 seats in a dual-class layout, with first delivery scheduled for 2008.
"We are much honored to have Kun Peng Airlines as our new E-Jets family customer," said Mauro Kern, Embraer executive vice president, airline market. "We have always been confident in China's regional aviation market expansion, and this is an extremely positive sign in that direction."
Headquartered in Xi'an City, Kun Peng Airlines is a joint venture between China's Shen Zhen Airline and the Mesa Air Group. Since its start-up in September 2007, Kun Peng already has more than 20 routes in operation.

Recently, Embrear cited the high growth of the Mexican market which, last week, yielded a contract with Aeromexico to incorporate 12 ERJs into its fleet as part of the airline's modernization plan. The new aircraft will be flown by its Aeromexico Connect subsidiary, which already operates 28 ERJ 145 jets. Aeromexico Connect also has operating leases on four ERJ 190 jets from GE Commercial Aviation Services (GECAS), since November 2007. This operation is already included in Embraer's 2008 second quarter firm order backlog.
Aeromexico was Embraer's launch customer for both the ERJ 145 and the EJets families in Mexico, in 2003 and 2007, respectively. The airline's new ERJ 190s will have the same configuration as the first four at 99 seats in a dual-class layout.

Embraer and Saudi Arabia's National Air Services (NAS) Aviation confirmed options on five more ERJs 190 jets. The original contract, covering five firm orders and five options, was announced in November 2007, during the Dubai Airshow. The total value of the new agreement, at list price, is $187.5 million, and the airline also retains purchase rights for 12 more aircraft of the same model. This deal is already included in Embraer's 2008 second quarter firm order backlog as undisclosed.
The first delivery of the ERJ 190 to NAS is expected for 2010. The aircraft will be used by NAS Aviation group affiliates, and will complement the existing narrow-body fleet.

Embraer and Austria's NIKI Luftfhart GmbH signed a contract for five ERJ 190 jets. The agreement was announced and includes purchase rights for another five aircraft, which could be either the ERJ 190 or the ERJ 195. The total value of the deal comes to $187.5 million, and could double, if all options are confirmed for the ERJ 190. Deliveries are scheduled to begin in the first half of 2009. The ERJ 190 will serve NIKI's existing European network, operating from Vienna and Innsbruck, Austria. The airline also plans to fly the aircraft on new intra-European routes.
The low-cost carrier will be the first in Europe to combine two different aircraft sizes in its fleet: the 100-seat ERJ 190, optimized for mid-density routes, and conventional narrow-body aircraft seating 150 to 180. NIKI's aircraft will be configured with 112 seats, a layout made possible by the carrier's selection of new "slim seats", which are thinner, in terms of the amount of material used, than the seats usually installed on the E-Jets, but offer comparable comfort to passengers.

Felix Orders CF34-Powered Bombardier CRJ Aircraft
Felix Airways ordered eight Bombardier CRJ 700 aircraft, powered by CF34-8C engines. The engine order is valued at more than $90 million. Delivery will begin in September 2008.
Felix Airways is a new private share holding airline based in Yemen. The airline will operate domestic routes previously served by Yemen Airways and additional regional routes.
The CF34-8 family has more than 1,350 engines in service powering the Bombardier CRJ 700 with the CF34-8C1 and -8C5B1 engines (13,800 pounds of thrust), the CRJ 900 with the CF34-8C5 engine (14,500 pounds of thrust), and the Embraer ERJ 170/175 with the CF34-8E5 (14,500 pounds of thrust). The CF34-8C1 has incorporated technology from the -8C5 version to create a common engine for the CRJ7 00 and 900. To date, 95 percent of the CRJ 700 fleet is under contract for this upgrade. The CF34-8C5A2 variant (14,510 pounds of thrust) enters service on the CRJ 1000 in 2009.

Saab Aerotech
Hamilton Sundstrand signed an exclusive agreement with Saab Aerotech to supply spare parts to support repair and overhaul of Hamilton Sundstrand components installed on Saab commercial aircraft and others.
Over the course of the 10-year agreement, Saab Aerotech will receive material and technical support. Hamilton Sundstrand has similar agreements in place with 28 of the world's top 30 airlines.
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