RIO DE JANEIRO (Reuters) – A left-wing political party on Wednesday filed a lawsuit to block the sale of 80% of Brazilian planemaker Embraer SA’s <ERJ> commercial jet division to Boeing Co <BA> for $4.2 billion (3.3 billion pounds), arguing it will harm Brazil’s sovereignty.
The deal, which would position Boeing to compete more directly with Airbus SE <EADSY> in the market for mid-sized passenger planes, has faced significant left-wing opposition largely because Embraer is seen as a strategic company for Brazil’s national security.
So far, a handful of lower court decisions temporarily blocking the deal have been overturned by appeals court judges. The government has authorized the deal and Embraer’s shareholders are all for it.
But the latest lawsuit, filed by Brazil’s Democratic Labor Party (PDT), underscores that there is still a political risk that could potentially unravel the agreements reached so far between Boeing and Embraer. The PDT’s leader, Ciro Gomes, has staunchly opposed the sale of Embraer’s commercial jet division to Boeing.
Embraer declined to comment on the lawsuit.
The proposed deal with Boeing was first announced in July 2018.
Boeing and Embraer are waiting for antitrust approval to finalise the deal, including intense scrutiny from European regulators. They expect that to happen in early 2020.
(Reporting by Rodrigo Viga Gaier in Rio de Janeiro; Editing by Matthew Lewis)
SAO JOSE DOS CAMPOS, Brazil (Reuters) – Embraer <ERJ> hopes to see more orders for its newest passenger plane by the end of the year, an executive said on Thursday, as Boeing <BA> readies to take over the Brazilian planemaker’s commercial jets division in what could mark the next phase of its rivalry with Airbus <EADSY>.
Manufacture of the E195-E2, as Embraer’s plane is known, will soon be controlled by Boeing, which needs regulatory approval to close on the deal to buy 80% of Embraer’s commercial jets division for $4.2 billion.
Embraer on Thursday delivered its first E195-E2 plane, which will seat about 140, to Brazil’s No. 3 airline Azul <AZUL> at its headquarters in Sao Paulo state. Embraer executives said the delivery should spur more orders, helping to fend off fresh competition from Airbus.
“I expect we will close more transactions, I’m hopeful … before the end of the year,” John Slattery, head of Embraer’s commercial plane division, told Reuters. “I’m not seeing a big wave of people that need to delay, or wish to delay because of the Boeing transaction.”
The new plane comes as the landscape for jets with under 150 seats is changing drastically. Airbus bought control of the Bombardier division competing directly with Embraer in 2018, followed by Boeing’s deal to take over Embraer’s commercial plane division.
The result would expand the global duopoly for jumbo jets into a smaller category, as Boeing and Airbus work to lure orders across a broader lineup of commercial aircraft.
Azul was founded by U.S. airline executive David Neeleman, who also founded JetBlue Airways <JBLU>, which was a launch customer and key customer for Embraer’s last generation of jets.
“We can have 18 more seats with this plane, with a travel cost that is 15% less,” Neeleman said of the improvements in the new generation. “If you have something that is 15% cheaper, you just want that thing, you don’t want anything else.”
STIFF COMPETITION
Embraer is banking on the fuel efficiency of this new generation, to the point it has marketed its E195-E2 to customers as the “profit hunter,” painting the jet with livery resembling a shark in the plane’s nose.
But for now, Embraer has struggled to compete directly with Airbus. Carriers and plane lessors had placed 551 orders for the Airbus A220 family as of June, but Embraer had racked up only 168 for its new family of E2 jets, down from 200 in 2014.
Part of Embraer’s struggles stem from its smaller E175-E2 plane, which has been a hard sell to U.S. regional airlines due to labor contract restrictions. Embraer dropped 100 of those planes from its order book after resistance from pilots made it unclear if buyer Skywest <SKYW> would be able to fly them.
“We didn’t design an aircraft just for the U.S. market,” Slattery said, adding that he hopes his company will secure an order from a customer somewhere else in the world this year. Currently they have none, although Slattery said Skywest remains committed, if pilots allow it.
JetBlue also dealt a blow to Embraer last year when it decided to replace its old Embraer fleet with Airbus A220s, a decade after Neeleman left the company.
JetBlue cited the advantages of A220’s longer range, as well as a broader package with Airbus including larger planes — the kind of arrangement that Boeing could offer with Embraer’s jets in its portfolio.
(Reporting my Marcelo Rochabrun in Sao Jose dos Campos, Brazil; Additional reporting by Allison Lampert in Montreal; Editing by Alistair Bell and Marguerita Choy)
An Airbus concept aircraft with a wing design inspired by nature, dubbed Bird of Prey, is displayed at the Royal International Air Tattoo at Raf Fairford, near Fairford
RAF FAIRFORD, England (Reuters) – Airbus <EADSY> on Friday unveiled a concept aircraft with splayed wingtips and a fanned tail inspired by the feathers of an eagle as it experiments with “biomimicry” technology that could eventually lead to quieter landings and less pollution.
The European planemaker’s UK subsidiary sought to capture the imagination of future engineers by showing off a model of the raptor-like airliner at a military air show in England.
The propeller-driven aircraft would have individually controlled “feathers” on the wingtips to provide what Airbus calls “active flight control” used by an eagle or a falcon.
Also evident is the absence of a traditional vertical tail, relying instead on a split, wedge-shaped tail to reduce drag.
The regional aircraft would carry as many as 80 passengers up to 1,500 kilometres (930 miles) and burn 30% to 50% less fuel than today’s equivalent planes, Airbus said.
Inaugurating the display to curious military chiefs and visitors to the Royal International Air Tattoo, Britain’s Trade Secretary Liam Fox said it highlighted Britain’s technical capability and its attractiveness as a place to invest.
Airbus said its concept plane would have a geodesic or curved fuselage in a throwback to the contours of the Wellington bomber designed by British aircraft designer Barnes Wallis.
That aircraft was built in Broughton in Wales from the 1930s to keep it beyond the range of German bombers.
Airbus now uses the same site to produce wings for over 800 jetliners a year. But it has warned the plant faces competition from European nations such as Germany, or others such as Korea, for future generations following Britain’s decision to leave the European Union. Brexit supporters are sceptical Airbus would take such a step given Britain’s experience with wingmaking.
SEATTLE, July 11 (Reuters) – Boeing’s 737 jet program manager, Eric Lindblad, will retire in a matter of weeks after roughly 12 months on the job, according to a company memo seen by Reuters on Thursday.
Lindblad’s departure, after a 34-year career at Boeing, comes as the world’s largest planemaker navigates one of the worst crises in its history. Boeing’s money-spinning 737 MAX jetliner has been grounded in the wake of two deadly crashes that killed nearly 350 people in the span of five months.
Taking Lindblad’s place as the lead of the 737 program and the Renton, Washington, factory will be Mark Jenks, who has been leading Boeing’s potential new mid-market airplane (NMA) project, Boeing Commercial Airplanes Chief Executive Kevin McAllister wrote in the memo to employees seen by Reuters.
Mike Sinnett, Boeing Commercial Airplanes vice president of product development and future airplane development, will assume the role of vice president for NMA in addition to his current role, the memo said. Sinnett, who originally led preliminary work on the NMA, has been seen a figurehead of the program.
“Let me be clear – the NMA team will continue to operate as a program, and I am looking forward to Mike’s leadership in this important effort,” McAllister said in the memo.
In naming Jenks and Sinnett to run marquee projects at such a crucial time, McAllister is choosing two of Boeing’s most high-profile engineers. Jenks has been credited with turning around the 787 Dreamliner program, and his appointment on the NMA was seen as key to putting the potential twin-aisle aircraft on a path to a rapid launch.
But industry sources say the launch of the NMA has been delayed by the 737 MAX crisis. The NMA program, if it goes ahead, will most likely not be launched before spring or summer of next year, the sources said.
(Reporting by Eric M. Johnson in Seattle and Tim Hepher in Paris; Editing by Leslie Adler)
Le Bourget, France, June 19 (Reuters) – Airbus unveiled an aircraft deal with Taiwan’s China Airlines on Wednesday, snatching the carrier’s medium-haul fleet renewal from Boeing a day after its U.S. rival made a shock entry into the single-aisle fleet of British Airways owner IAG.
The European planemaker said China Airlines had signed a preliminary deal to buy 11 A321neo aircraft, worth about $1.4 billion at list prices, while leasing another 14.
Although much smaller than the IAG letter of intent for 200 Boeing 737 MAX announced on Tuesday, the China Airlines deal signals intensified competition in Asia where Boeing this week predicted 40 percent of jets would be delivered over the next 20 years.
Airlines can rarely be persuaded to jump ship to rival suppliers because of the costs of training and parts, but this week’s Paris Airshow has witnessed two such announcements as sold-out planemakers mount incursions to continue their growth.
In a further competitive twist, Boeing announced on Monday it would take over the supply of spare parts for the remaining Airbus A320 fleet at British Airways.
China Airlines announced the leasing part of the deal in May and Reuters reported it would pave the way for the Taiwan carrier to switch its medium-haul fleet to the Airbus A320neo.
The rare deal to replace older 737s took years to complete and was drafted before the 737 MAX was engulfed by a crisis involving two crashes and a worldwide grounding, sources said.
PARIS (Reuters) – Airbus has broken records by launching the longest-range narrow-body jetliner at the Paris Airshow, but planemakers are having to rethink their mantra on comfort as they squeeze ever more miles out of jets designed for shorter trips.
Airbus and Boeing have been promoting new carbon-fibre long-haul aircraft such as the 787 Dreamliner and A350, which offer roomier cabins and help passengers avoid jet lag by providing a cabin pressure closer to that felt on the ground.
But they have also been adding more range and capacity to older and narrower models such as the A320neo family and the 737 MAX as airlines demand more flexibility with the advantages of highly efficient single-aisle planes, supporting low fares.
Airbus pushed that further on Monday by adding a longer stride to the A321neo with its new A321XLR, whose range of 4,700 nautical miles leapfrogs the out-of-production Boeing 757 and nudges it into the long-jump category enjoyed by wide-body jets.
It also eats into a range category targeted by a possible new mid-market twin-aisle jet, the NMA, under review by Boeing.
But there is a debate over whether passengers will enjoy flying longer distances in medium-haul planes, or at what price.
Airline bosses on the long-haul low-cost panel at the Paris Air Forum on Friday differed over whether extended-range narrow-body jets or wider twin-aisles were best suited for their growing industry.
In particular, the rise of the single-aisle long-distance jet involves revisiting years of industry marketing about the benefit of escaping jet lag and fatigue on long trips.
Aircraft cabins are pumped to a higher pressure than the ultra-thin outside air at cruising altitude. But the pressure is still lower than at sea level due to structural limitations.
That’s not a problem for shorter trips but travel experts say the higher altitude setting on older planes can contribute to jet lag on long flights, worsening the effect of time zones.
WELL BEING
Although Airbus stresses the 1980s-designed A320 fuselage is wider than the competing 737 MAX and therefore has roomier seats, it also has a lower cabin pressure than modern long-haul alternatives like the Boeing 787 Dreamliner or Airbus A350.
On those airplanes the cabin is pressurised at a level equivalent to 6,000 feet compared with 8,000 feet for the A320 and most other metal-built jets of all sizes.
For the Airbus A330neo wide-body jet the cabin altitude is above 7,000 feet but still below 8,000 feet.
“XLR cabin pressure could be an issue,” said an airline executive who has studied the plane, asking not to be named.
The company itself set out the disadvantages of flying with a high cabin altitude on long journeys when it launched the business-jet version of the A320neo family in 2015.
“A lower cabin altitude makes most sense on long flights, especially towards their end, when an aircraft is able to reach its highest cruising altitude,” Airbus said then on its website.
For the business jet version, Airbus was able to lower the cabin altitude below 6,400 feet. But it could only do so by reducing the maximum number of trips, which matters relatively little to luxury operators but is less attractive to airlines.
That said, cabin pressure is one of many factors influencing the feel of a cabin and is rarely marketed separately.
“Everyone is pushing the ‘well being’ trend … but an A321XLR will arguably be more comfortable than a 9-abreast Boeing 787,” passenger experience expert John Walton said, referring to denser seat configurations used by some airlines.
Placing the first order for the XLR, leasing magnate Steven Udvar-Hazy, executive chairman of Air Lease Corp, said: “We are working on a number of improvements in the cabin to accommodate long-haul operations”.
The A321XLR is expected to be able to fly around eight hours in most cases, linking U.S. eastern cities deep into Europe.
The head of International Airlines Group’s low-cost long-haul carrier Level, Vincent Hodder, told the Paris Air Forum the XLR could be configured to fly as long as 10 hours. Level and others are studying it, he said.
Airbus is chasing potential customers including American Airlines and JetBlue for the XLR and aims to grab up to 200 orders. It is expected to announce a deal with U.S. airline investor Indigo Partners later this week.
(Reporting by Tim Hepher, Editing by Louise Heavens and Mark Potter)
June 14 (Reuters) – Boeing Co on Friday said it would buy aerospace interiors company EnCore Group, the planemaker’s second foray into aircraft seats after it partnered with auto seats maker Adient last year.
The deal could help cut delays in the supply chain and improve profit margins for the planemaker, and is expected to close by the end of the second quarter of 2019.
California-based EnCore designs, certifies and produces airplane galleys and seats for airlines, and also supplies components to Boeing.
Last year, the planemaker moved into making aircraft seats with a joint venture with car seating leader Adient to reduce costly delays to deliveries.
Traditionally, aircraft seat makers sell seats to airlines, a process that can involve multiple customized designs and regulatory approvals and in turn lead to industrial delays.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shinjini Ganguli)
SEOUL (Reuters) – JetBlue Airways Corp is in discussions with Airbus SE about the European planemaker’s plans for a longer-range version of its A321neo family as it prepares to jump into the transatlantic market, Chief Executive Robin Hayes said on Monday.
The sixth-largest U.S. carrier has 85 A321neo aircraft on order, of which it has already decided to convert 13 into a longer-range version called the A321LR for its planned launch of daily flights from New York and Boston to London in 2021.
But if the low-cost carrier decides to fly to other European cities such as Brussels or Amsterdam, it will need a plane with more stamina. It is studying the A321XLR, which Airbus has been promoting ahead of a formal product announcement in June.
“London is the biggest opportunity because it has the highest fares, but there would be other opportunities if we had an airplane that had more range. The XLR gives us more range,” Hayes said on the sidelines of a global airlines meeting in Seoul.
“We’re still working through how many aircraft it would be (but) any XLRs would be linked to the planes we have on order today,” he told Reuters in an interview, adding any purchases would be converted from existing orders rather than generating completely new ones. No decision has yet been taken.
JetBlue is betting on its Mint business class product for narrowbody aircraft to succeed in the highly competitive premium transatlantic market. As of now, its U.S. customers have to fly to London on rival carriers where business class seats can cost as much as $12,000.
In the United States, JetBlue has argued that its Mint seats have driven a 50 percent decline in premium fares on some competing routes, and by sticking with narrowbody jets Hayes believes seats will be full.
U.S. carriers like American Airlines Group Inc and United Airlines service London with widebody aircraft that Hayes said can be tough to fill during off-peak travel.
“The transatlantic market is very seasonal. In the summer you tend to do very well but in the winter you’re flying a bunch of empty seats, so the LR helps us manage significantly the risk of the winter because we’re not flying such an expensive airplane.”
A handful of Europe-based budget carriers have tried to penetrate the transatlantic market in recent years, but only cash-strapped Norwegian Air is still standing.
Hayes said he expects to work on code-share agreements with partners that have a strong presence in Europe, where the airline wants to eventually build up its brand.
A number of JetBlue’s 50 airline partners have already reached out, he said.
(Reporting by Tracy Rucinski; Editing by Tim Hepher, Christopher Cushing)
PARIS (Reuters) – Airbus is in discussions to try to find solutions to a row with the German government over a ban on arms exports to Saudi Arabia that threatens a border security contract, Chief Executive Guillaume Faury said on Tuesday.
The planemaker has warned of legal action against Germany after taking financial charges over the long-delayed border contract between Airbus’s defence unit and the Gulf kingdom.
“We are not yet there,” Faury told reporters when asked about possible legal action.
“We are very much impacted by the situation which is now being extended and trying to find different solutions,” Faury said, adding that Airbus had been forced into a corner by the unexpected national export embargo.
Germany acted alone with a ban in October after the murder of Saudi journalist Jamal Khashoggi in Istanbul, irritating other European arms exporters including France, where Airbus is based. The measure was extended in March.
The row comes as France and Germany study a new combat jet, in which Airbus is the industrial partner on the German side.
Faury said Airbus remained committed to the manned and unmanned system, adding it could be eventually opened to other nations including Britain “as a more united Europe”.
The arms row also coincides with a separate spat with Germany over 600 million euros of development loans for the A380 passenger jet, which Airbus has said it will stop producing.
The Berlin government said in March it was in talks with Airbus about the outstanding loans, which also feature in a separate trade dispute about mutual claims of illegal aircraft subsidies between the European Union and the United States.
Faury said Airbus “would not be where it is” without its project to build the world’s largest airliner.
Asked at a media event whether the separate disputes with Germany could be settled in a single negotiation, Faury said “We just want to execute the contracts as they are and I will not say more.”
Airbus continues to have good relations with Germany and other founder Airbus nations, Faury said at the event, taking place as Airbus celebrates its 50th anniversary as a planemaker.
(Reporting by Tim Hepher; Editing by Susan Thomas)
PARIS (Reuters) – European missile maker MBDA’s chief executive is returning to Airbus as head of strategy as the planemaker seeks to modernise its factory system and explores future options in defence, two people familiar with the matter said.
Antoine Bouvier, 59, replaces Patrick de Castelbajac who becomes head of Airbus Asia-Pacific, the sources said. Castelbajac’s responsibility for Airbus international operations had already been transferred to sales chief Christian Scherer.
At Airbus, Bouvier will be embarking on a battle of wits with a new strategy head at arch-rival Boeing CO.
Chris Raymond, until recently head of Boeing’s Autonomous Systems business, recently became vice-president for enterprise strategy under finance director Greg Smith, sources said. Raymond’s appointment has not been officially announced.
Airbus and MBDA declined to comment on Bouvier’s appointment, which was first reported by AeroDefenseNews. It is the latest step in a management reshuffle accelerated by the recent official appointment of Guillaume Faury as Airbus CEO.
Bouvier, a former civil servant who narrowly missed out on running France’s DGA defence procurement agency two years ago, brings experience in forging defence partnerships to Airbus, which is embroiled in a row with Germany over arms controls.
He is expected to be replaced at MBDA by former OneWeb chief Eric Beranger.
Although there is fierce day-to-day competition, with Taiwan’s China Airlines opting last week to switch to Airbus, the European planemaker is not expected to exploit the grounding of Boeing’s 737 MAX jetliner for now, industry sources said.
NEXT GENERATION
The future of the Airbus A320neo and Boeing 737 MAX – the industry’s most successful models – is seen as strategically entwined and insiders say Airbus is also worried about the impact of the grounding on global certification..
But the planemakers are crafting crucial strategies for the next generation of single-aisle jets from about 2030 – both likely to define the aircraft industry well beyond mid-century.
Insiders say Faury wants Airbus to focus more on industrial strategy and closing a perceived gap with Boeing in production technology, as well as responding to the threat of increased environmental regulation of air travel, as well as new products.
Airbus must also assess how to respond to rising defence spending after its failure to merge with Britain’s BAE Systems in 2012 left it heavily skewed towards commercial markets that are now approaching the end of an extended upcycle.
It is involved on the German side of a nascent Franco-German fighter project along with French partner Dassault Aviation but faces competition for valuable systems work and a growing spat with the German government over export controls.
At MBDA, Bouvier helped forge an Anglo-French agreement on the use of shared missile technology.
Bouvier followed the classic path of a French mandarin from the prestigious Polytechnique engineering school to France’s ENA civil service academy. He had been linked with a number of top aerospace posts such as Safran and Thales.
“His appointment will be very credible with the French government,” a person familiar with the appointment said. France and Germany own 11 percent each of Airbus.
(Reporting by Tim Hepher; Editing by Luke Baker and Alexander Smith)
