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Monday, June 13, 2005

Supply Side

Embraer

Flybe, a British-based regional airline, has ordered 14 Embraer [ERJ] 195s in a deal worth $470 million. Flybe has an option to buy an additional 12 Embraer 195s, worth another $400 million. The first plane is to be delivered next August and the order is expected to be completed by November 2007. The plane will be configured to seat 118 passengers for the low-fare airline. Flybe will be replacing its current fleet of BAe 146s with the new aircraft. Both Airbus and Boeing [BA] had been competing for the contract. Once the BAe 146s are retired, Flybe will only be flying the Embraer 195s and Bombardier's [BBD] Q400s.

The Embraer 190 recently completed 5,000 flight cycles in its fatigue test. A minimum of 5,000 flight cycles are needed before Embraer can begin the commercial certification of the aircraft. The testing remains on schedule for a full certification of the new aircraft in the third quarter. Launch customer JetBlue [JBLU] is expecting to take delivery of the first of 100 Embraer 190s later this year.

Bombardier

Jeju Air, a South Korean carrier, has ordered five Q400s configured to seat 74 passengers. The airline has an option to buy three more of the advance turboprops. The firm deal is worth $120 million and the total contract could be worth $196 million. Formed earlier this year, Jeju will provide low-fare service between Jeju Island and several South Korean mainland destinations. It expects to begin service next summer. The Q400 will be the first regional aircraft of any kind to be flown in South Korea.

It will be fall, not next week in Paris, that Bombardier will launch it new C-Series jetliner. The company announced at its recent shareholders meeting that a launch decision will now be made in the fall. It has earlier predicted it would announce launch customers for the 110-seat and 130-seat models at the Paris Air Show. Bombardier is still trying to convince an engine maker to build a new more energy efficient engine for the plane rather than modifying an existing jet engine line.

M7 Aerospace

M7 Aerospace recently began work on converting its 20th ATR-42 from passenger service to a freighter. The work has been handled by its maintenance repair and overhaul facility in San Antonio. M7 is currently developing a proprietary supplement type certificate to handle similar conversions of the ATR-72s. It expects to receive approval for the work in the coming weeks from the Federal Aviation Administration (FAA). While the company will not disclose the client, FedEx [FDX] has convert 27 ATR-42s and two ATR-72s into freighters.

BAe

BAe Regional Aircraft is consider new freight conversion plans for its BAe 146 and Jetstream 41 models. The company is currently assessing eight engineering/conversion firms to develop a possible conversion kit for used BAe 146. The company has earmarked 10 aircraft that may be converted into freighters with the earliest conversion to be next year. A decision on the potential partner in the conversion process will be made by year's end. BAe had previously converted 30 146s directly as they came off the assembly line. A similar feasibility study is underway to determine if there is a market for J41 with a 8,000-pound capacity. BAe expects a number of J41s to be returned from leases this year.

Raytheon

Raytheon Canada won an order to provide an air traffic control training simulator to India's Civil Aviation Training College. Raytheon is providing the Firstplus trainer to SES Systems, the primary contractor on the project.

Siemens

Siemens recently completed the upgrading of the inline baggage security system at Denver International Airport. The $88 million project is the largest U.S. 100 percent inline screening project with more than eight miles of conveyor belts. There are 32 explosive detection system machines integrated into the project, which took 20 months to complete. The system can be expanded to handle more than 50 detection devices.

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