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Paris Air Show - The Show Goes On

July 21, 2017



The Paris Air Show 2017 was a tremendous success for the big aircraft manufacturers, with a few African airlines also entering the limelight.




The check-in process this year was chaotic and it was extremely hot, but that did little to detract from the event.

The big OEMs provided strong evidence that the commercial aircraft market remains healthy. “Once all the firm MoUs and options are taken into account, the 2017 show was very successful – with a total of 1,258 orders,” says Dr Stuart Hatcher, Chief Intelligence Officer at aviation consultancy IBA. “OEMs may argue that the number is closer to 1,481, but that would include the conversions from existing orders, so these need to be removed from the equation.”

Not since 2012 have we seen Boeing take the lead in orders (firm plus MoUs) at either Paris or Farnborough. In 2012, the reason was the launch of the 737 Max, 11 months previously; this time the winner was also the 737 Max, mainly for the Max 8, but also for the 737 Max 10.

As expected, the narrowbody aircraft segment dominated the order split, obtaining 84% of market share with the likes of Boeing 737 MAX and Airbus A320neo aircraft, according to IBA figures. This was followed by the widebody segment with 787-8/9s and the A330 and A350 taking 7% of orders. Embraer’s regional jets scooped 4% of orders, and turboprops from Bombardier and ATR obtained the remaining 5%.

In an overall order metric, Boeing led the order tally with just over 59%, followed by Airbus with 32%.

The lessors were most bullish with their orders; the recent poor sale leaseback performance looks to be the driver. “It will be interesting to see how these speculative orders will be priced closer to delivery. Airlines will always give a steady stream of orders, because there is the added bonus of a new model launch and the discounts that come with it,” notes Hatcher.

Interestingly, all 737 Max models got a mention this year on the order list, including the Max 7 and Max 8 200, but with the notable exception of the Max 9 which, ironically, was the version physically present at the show.

Closer scrutiny of Max 10 orders does highlight some interest from the lessors, although the bulk came from 10 operators led by United and Lion Air. However, the majority of these are conversions from previous Max orders.

Airbus managed a total of 277 firm orders and MoUs for the A320neo family, and a further 49 orders for the current engine option. “Whether this is simply because of fuel price, last minute last off-the-line slots, or the need for operators to be assured that the GTF engine has got rid of its teething problems is up to the individual, but it does push the last off-the-line effect further to the right,” says Hatcher.

Airbus also launched the A380plus as a potential option to enhance the seat mile costs of the double-decker airliner with a higher MTOW, larger seat capacity and new winglet. Despite the physical presence of the A380 and its new winglet at the show, no further orders were placed, and it has been four years since an order for the type has been placed at either Paris or Farnborough.

ATR and Bombardier also managed to get in on the action this year, with a total of 54 orders (firm and letters of intent – LOI). Bombardier is moving ahead with a large LOI from Spicejet for 25 Q400s with options for another 25; a significantly better performance than the previous Paris Air Show, when only four orders were placed for the Q400. “Bombardier was unable to gain any more traction in the regional jet space, as Embraer once again took the lead by being the only OEM to secure any orders in that market segment. Interestingly, eight orders were placed for current generation E1 aircraft, with 30 orders secured for the new E2, along with options for 20 more. No announcements were made by Sukhoi, Comac or MRJ to gain any further market traction in the regional space,” Hatcher observes.

Notable for ATR, was the signing ceremony with start-up airline Air Senegal for two 72-600s, which jointly hold an estimated value of approximately €50 million at catalogue price. The new Senegalese national airline will relaunch the country’s air services later this year.

The contract was formalised in Paris in the presence of Maimouna Ndoye Seck, Senegal’s Minister for Tourism and Air Transport, and Elisabeth Borne, French Minister for Transport.

Delivery of these two turboprop aircraft, which will constitute the initial fleet of the airline, will be made in November 2017. Air Senegal’s inauguration ceremony will be held on 7 December 2017, in conjunction with the inauguration of the new Blaise Diagne International Airport in Diass, located approximately 50 kilometres from Dakar.

The reinstatement of a national airline is part of the wider scope of a government plan called Plan for an Emerging Senegal (PES), aimed at establishing new economic and social policies in the medium to long term, to revitalise the economic growth of the country and to improve the quality of life of its inhabitants.

“Since the liquidation of Senegal Airlines, domestic air services have been disrupted within the country,” says Mamadou Lamine Sow, Chief Executive Officer of Air Senegal. “Our ambition is for this new airline to play a major role in Senegal, and in all of West Africa. After a year of assessment, conducted by a team of experts assisted by a consulting firm, and on the basis of the airline’s business plan, the choice of the initial fleet focused on the ATR 72-600s. It is Air Senegal’s wish to offer its passengers a pleasant and affordable experience aboard a modern aircraft. We are confident that ATR is the best choice to meet the requirements of the market.”

Christian Scherer, ATR’s Chief Executive Officer, added: “We are delighted to welcome both a new airline and a new country into the ATR family. According to our market forecasts, Africa and the Middle East should need 300 turboprop aircraft by 2035, and 400 new routes should be created. With the ATRs, Senegalese passengers will benefit from a transport offer that will generate many business opportunities, thereby helping to boost the local economy.”

As part of its development, Air Senegal next plans to acquire single-aisle jet aircraft, followed by high-capacity aircraft, which should enable it to operate the Paris-Dakar route.

Embraer also strengthened its ties with South African regional carrier Airlink by signing a flight hour pool programme in Paris to support the 13 E-Jets they have ordered – the first E190 was delivered at the end of April and went into service in June. The pool agreement, for up to ten years, will cover more than 300 part numbers and aircraft components. More than 60% of the global E-Jet fleet is now supported by the Embraer pool service.

Airlink is the first airline in South Africa to operate E-Jets. Their E-Jet fleet will include three E170s and 10 E190s. Already a significant Embraer operator, Airlink will soon operate 30 ERJs of all three types: ERJ 135, ERJ 140 and the ERJ 145.

“As an aircraft manufacturer, our responsibility to our customers does not finish when the aircraft leaves our factory. We need to ensure our aircraft are available for our customers to earn revenue and keep their passengers on schedule. Our new division, Embraer Services and Support, was created to give this area even more focus,” said Johann Bordais, President and CEO, Embraer Services and Support. “Soon Airlink will have a fleet of 43 Embraer jets, all of which are supported by our pool programme. It’s pleasing to offer a service proving so valuable that the customer expands the scope of our contract twice in less than six months.”

Embraer aircraft have been operating in Africa since 1978, when the first Bandeirante turboprop arrived on the continent. Currently, there are 127 Embraer aircraft in operation with 39 airlines in 19 African countries.

Embraer estimates its supported commercial fleet to be in excess of 2,400 aircraft from a customer base of 205 operators globally. Speaking to journalists at a press gathering in Paris, Bordias said Services and Support was an integrated solution it was offering customers.

“This is the fourth business solution that we have created. We believe that the OEM is the ultimate integrator. We are selling the airplane, but we are also selling the services,” Bordais says.

He admits that, like other manufacturers, it takes time to develop any aftersales services in the industry, and that the previous strategy of putting service and support on different sides of the business was the wrong decision.

Service and support activities are now a US$1 billion business, Bordais says, making up 15% of what Embraer generates as revenue yearly.

Commenting on why it has taken so long to enter the aftermarket, Bordias says that the time just wasn’t right. “We knew that before you do this type of thing, you need to be number one in customer satisfaction and that’s what we have been doing for the past 15 years.”

In terms of Maintenance, Repair and Overhaul (MRO), the Brazilian OEM is developing its capacity with distribution centres around the world and Embraer-owned service centres. Bordais recalls that 15 years ago, MRO was not on the manufacturer’s radar. “So this work would be done by the airlines, or the independents – the approved service centres.”

Embraer has developed a significant authorised service network, totalling 77 factories, for service and support, in addition to its 10 owned MRO facilities. Embraer audits those authorised service facilities every year to make sure they maintain Embraer’s quality standards.

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