Archive For The “UEC” Category

Aeroflot places $5bn order for 50 MC-21s

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Aeroflot ordered 50 MC-21s today from IRKUT.  Aeroflot will receive the first jet in the first quarter of 2020, with the full delivery to be completed by 2026.  Under the terms of the order, Rostec, the leasing subsidiary of Aviacapital-Service, will supply the 50 MC-21-300s. These aircraft are to be leased for a term of 12 years, with the option of two-year extensions on the lease no more than three times.

RT reports that the first 25 MC-21s delivered to Aeroflot will have Pratt & Whitney PW1400G engines.  At this stage, we do not know if the remaining aircraft will be equipped with the PD-14 engines, due to be certified later this year.

Aeroflot plans to use the MC-21s to replace its remaining Soviet-era Yakovlev Yak-42, Tupolev Tu-134, Tupolev Tu-154, and Tupolev Tu-204/214 aircraft.  Aeroflot configurations are to carry 169 passengers, with 16 business-class and 153 economy-class seats.  The airline will be using the aircraft on domestic and international routes.

From discussions with IRKUT, we expect to see the MC-21 to offer operating costs around 6-7% lower than its competitors.  Which is a very interesting and exciting data point, numbers which we are in the process of verifying.  Every OEM that has deployed the GTF has seen fuel burn lower than expected and a consequent increase in range.  We expect the same to happen with MC-21.

Vitaly Saveliev, Aeroflot CEO, said: “The signing of a firm order for 50 MC-21 aircraft is a landmark event not just for our two companies, but for our country. Russian manufacturers have created the first next-generation passenger aircraft, marking Russia’s return as a global leader in the aviation industry.  In today’s geopolitical context we believe it is essential that there is competitive Russian-made technology, and that it is of the highest quality and competitively priced.  For this reason, our partnership with Rostec, our largest partner and a shareholder of Aeroflot, is of critical importance.”

Sergey Chemezov, Rostec CEO, said: “This agreement underscores that Russia’s civil aviation industry is making a comeback and taking its place among leading global manufacturers. The MC-21 represents a genuine breakthrough achievement for the aviation industry.  The aircraft uses cutting-edge materials and the latest generation of systems, created by leading Russian companies. Elements of the MC-21 that Rostec produces include titanium and composite parts, onboard electronics, chassis components, other systems, and the ‘heart’ of the aircraft – the PD-14 engine.  We believe that this engine will be selected by Aeroflot as the primary power plant for the MC-21.”

This is a program to watch.  Hopefully, we will see the flight test aircraft Farnborough this year.

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Turboprop review through 3Q17

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Turboprops have had a good year in 2017.  We take a look at the market and provide some insights to be found in the data.

The turboprop market is big but not as exciting, perhaps, as the single-aisle market.  We can see that the number of parked aircraft has risen from about 9% of the fleet to over 16%.  Does this indicate something odd going on?

Reviewing the parked aircraft we find that they average over 20 years old.  Because of OEM changes, there is another pattern: parked aircraft reflect the state of the OEM’s fleet.  BAe, Embraer, Fairchild/Dornier,  Fokker, and SAAB are all out of this market. Moreover, the number of parked aircraft vary by world region.

Looking at the more recent history, we can see how the departure from the market has impacted the in-service fleet.  Turboprops, despite being workhorses, don’t die easily.  In 2015 the in-service fleet average age was  19.7 years and as of 3Q17, the in-service fleet averaged 19 years.

Taking a look at the in-service fleet as of 3Q17, we find the following.

Asia/Pacific and the EU are the primary markets for turboprops.  North America (combining Canada and the USA) creates the third biggest market. The CIS and the Middle East do not look like promising places to trade.   (Which begs a question about the GE and UEC deal, doesn’t it?) Africa and Latin America look promising though.

These could be exciting times for OEMs though.  The table lists in-service aircraft.  The light blue columns show models no longer in production.  Eventually, even these need to be parked and replaced.

Is there any surprise that Embraer is pondering a comeback?  Looking at the wide range of aircraft sizes that fall into this market, it would seem the focus on 90-seaters may not be the best place to look.  There are literally hundreds (about 43% of the market) of 30-50 seaters that need replacing, and you do not need to make as tough a business case as you do with 90-seaters.

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Rostec and AECC CAE agree on development of an engine for a long-range wide-body aircraft (LRWBA/C929)

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Rostec reports today: “The United Engine Corporation (UEC, part of Rostec State Corporation), as part of Aviation Expo China 2017, has signed a memorandum with the Chinese company AECC Commercial Aircraft Engine Co., Ltd. (AECC CAE). The Memorandum determines the objectives and main principles of interaction in the joint development of a gas turbine engine for a prospective long range wide-body aircraft (LRWBA/C929).

Under the Memorandum, the primary objectives of the program for creating an engine for the LRWBA will include engaging in joint research and competitive analysis, defining the potential customers’ requirements to the engine, forming the appearance of the engine, and determining its basic technical parameters.”

UEC previously started to develop a high-thrust civil engine (PD-35) for prospective wide-body long-haul aircraft. There is currently research and development groundwork under way under the PD-35 program in order to bring the degree of its development up to level 6 that will allow implementing research and development work as a whole with minimal technical risk. During the implementation of the PD-35 project, the scientific and technical groundwork carried out during the development of the new Russian PD-14 engine for aircraft MS-21-300 will be widely used.

AECC CAE is part of the Aero Engine Corporation of China, created in 2016, and is engaged in the development, manufacture and maintenance of civil gas turbine engines.

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Frigate Ecojet swims upstream

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In a world moving towards big twins, Russia’s Frigate has decided to move to quad power.   As Alexader Klimov, Frigate project leader, suggests, speed to market is the prime mover in the decision.  He says there are no engines of the size he wants to keep the aircraft a twin.  The thrust he requires ranges from 40K to 50K.

Here is a rendering of what the quad Ecojet might look like.

Intriguingly, Klimov’s vision of the aircraft closely resembles the purported 797.   The Ecojet is going to be a contender for the MoM.  Which means a high-risk profile for Frigate.  Currently, Airbus is cleaning up in this segment, without a real competitor.  Boeing is still mulling its next move in this segment, which it originally identified and then owned with the 757 and 767.

Perhaps it is time for Frigate to look east?  China wants to reduce dependence on western OEMs and is funding a number of projects with Russian origins.

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The Aero Engine Market

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In a quick review of the market, we can see how the engine market has grown in sympathy with the demand for commercial aircraft.  In the first chart, we show the national origin of the engines.  The numbers for Canada jump in 2009 because our data source added turboprops from that period.  The overall market grew from nearly 14,000 engines in 2000 to close to 27,000 engines by 2016 – a growth of over 92%.

If we break down the engine data by each engine maker we get the following busy chart.  By far the most impressive growth has come from CFM, which went from ~3,600 engines to ~10,750.  The chart is busy because many OEMs share projects or have subsidiaries.

Cleaning up and categorizing the data into specific OEMs, we get the following cleaner chart.  Here we show market share.  The CFM performance now stands out and demonstrates just how big its role in the industry has become.  Supplying the A320 family and being exclusive on the 737 has provided tremendous benefits.   Compared to this, look at UTC which had well over a third of the market in 2000 and now has shrunk to just over a quarter.  This offers a guide as to how crucial the GTF is to the future of the company.  It is no wonder that UTC is deploying so much of its aero engine capital to ensure the success of that program.  Fortunately, it has some superb products, like the PT-6 and PW800, to provide such support.

Rolls-Royce also saw a market share shrink, but a much smaller one.  Tying itself to the A330 and A350 program should ensure growth again.  But with a focus on widebody aircraft, Rolls-Royce missed out on the explosive growth in the single-aisle segment.  On the other hand, GE focused on Boeing’s 777 and 787 programs, which saw high growth over the period.  Being a partner in CFM has obviously helped, too.  It will be interesting to see if the 777X sells anything like the earlier models.  If it does not, GE will need to revisit its strategy.  But with a pending 797 to come, GE does have an advantage of being selected as an engine option given its close relationship with Boeing.  P&W and Rolls-Royce will likely battle to be the other option.

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MC-21 production drives engine investment

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United Engine Corporation, part of Russia’s Rostec State Corporation, announced plans to upgrade its production facilities between 2017-2025 to prepare for mass production of PD-14 engine. The company intends to invest 21.9 billion rubles. Rostec reports one of the upgrade program pieces is defined as “re-equipment of production with modern machinery” — essentially universal machining centers intended for manufacturing complex parts. For this, 4.6 billion rubles was allocated; funding is made via a corporate bonded loan.

Another 14.3 billion rubles will be spent on the creation of an after-sales service system: including the establishment of repair facilities, training center, spare parts distribution network and maintenance and repair centers. The project will be implemented using funds from the Russian federal budget.  A production line designed to produce at least 50 engines per year will be organized for PD-14 assembly. During 2017-2025, 2.95 billion rubles of own and borrowed funds of UEC will be invested in the project.

United Engine Corporation expects to complete the upgrade of the aircraft engines testing stand this year. The launch of the new stand is planned for the third quarter of 2017. Investment in the project is estimated at 96.2 million rubles.  The total cost of work on preparation for the PD-14 engine for serial production in 2017-2025 will be 21.9 billion rubles.  The PD-14 engine is created in the framework of a development program for a family of engines with 12.5 to 18 tonnes (26k pounds to 40k pounds) thrust for passenger and cargo aircraft, for the MS-21 airliner developed by Irkut Corporation.

In 2017, UEC plans to register an bonds exchange program. Currently, four issues of UEC classic bonds for a total amount of 33.213 billion rubles are in flotation.

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