Fifteen years ago, the aviation industry gathered in Oberpfaffenhofen, Germany, to witness the unveiling of the first all-new large regional jet in a generation, the Fairchild Dornier 728.
Despite serious programme funding issues, Fairchild progressed as far as roll-out and Lufthansa CityLine was fully committed as launch customer. So there were going to be the usual bumps in the road, but surely the programme had reached the point of no return?
Wrong. That was the last anyone saw of the little twinjet – including Lufthansa, which then had to scramble around to restructure its fleet plan.
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What this modern-day catastrophe illustrated is that the aerospace industry is high-risk and nothing can be guaranteed – either for the OEMs or those early adopters who gamble on being launch customers. Indeed, recent history shows that even the programmes from established players that make it to adulthood can give their stakeholders some sleepless nights. Witness the delays that have afflicted the Airbus A380, Boeing’s 787 and the Bombardier CSeries.
But it is Mitsubishi that is probably suffering the most pain for its courage at the moment. Having taken the bold decision back in 2008 to launch an all-new 100-seater powered by an all-new and unproven engine – Pratt & Whitney’s geared turbofan – the Japanese company has been forced to repeatedly push back the MRJ’s planned service debut and is now facing what amounts to seven-year delay over the original schedule.
Mitsubishi has commitments for 427 aircraft, including 233 firm orders, and the MRJ has progressed way beyond where the 728 programme was when it collapsed. Four MRJs are in flight testing, but development issues mean the programme has reverted to the preliminary design stage, forcing first deliveries back another two years to mid-2020.
For airlines, it is always a calculated gamble whether to become a launch customer. The opportunity for a hugely attractive deal along with being the first to benefit from the technical advances and operating efficiencies of a new breed must be weighed against the potential – likely – disruption to service-entry planning. And of course there is the likelihood of further disruption from early teething problems once their new machines arrive.
For the OEMs – both airframe and engine makers alike – the stakes are even higher. Pratt’s determination to make good on its ambition to return to the narrowbody market saw it invest in its game-changing geared turbofan and its salesmen knocking hard on customers’ doors. The strategy has been hugely successful already – at least from a market-penetration perspective. As our engine analysis in this issue highlights, having been chosen as sole supplier on four programmes, the engine maker is also giving incumbent CFM International a run for its money on the Airbus A320.
But is P&W in danger of becoming a victim of its own success? It is battling ongoing teething problems and trying to keep pace with demand, which in turn is frustrating its airframe partners in their own efforts to ramp up. And at least one customer has been forthright about the disruption this has caused.
A key challenge for any OEM before committing huge investment to a new programme is in backing its ability to ultimately make money. As Airbus and Boeing are finding with their two recent “game-changers”, the A380 and 787, this is easier said than done – particularly as the only certainty with long-term forecasts, be they demand- or cost-related, is that they are probably wrong.
Boeing is evaluating whether to develop a “797X” to address the so-called “middle of the market” (MoM), which is likely to be an all-new airframe powered by an all-new powerplant.
Seattle won’t need reminding how difficult it is to control nonrecurring costs and that new technology can bite back hard. So Boeing had better be absolutely sure about the level of demand for MoM, before investing billions of dollars into creating its next “Seven”.
Source: Airline Business
