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Sukhoi SSJ-100

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Two of Europe’s biggest regional airlines, Air Nostrum and CityJet aim for closer cooperation , with a combined fleet of 88 aircraft and up to Euro 700 million in revenue from wet lease and franchise contracts they are out to conquer the regional market in Europe? Yet they are both over dependent on 1 major customer each for their survival, CityJet on SAS and Air Nostrum on Iberia Regional, they both have a large fleet of what I call “loser” aircraft programs as CityJet has 7 (+8 on order) of the 95 passenger Russian Sukhoi SSJ100’s, the ONLY operator in Western Europe, and only the 2nd western airline to operate it commercially (after Mexico’s Interjet), its cheap and it is about to get the boot from LH’s Brussels Airlines for poor dispatch reliability! Air Nostrum has 27 of the 60 delivered (just 68 ordered in 8 years of production) 100 passenger CRJ1000’s (a 18.2 meter stretch of the 1970’s CL-600 Challenger business jet), that airlines just don’t want or need, it is a very long tube from the back, and noone is buying it, airlines know best as to what is good and bad, it is why aircraft orders say novels about any aircraft no matter what an OEM says or thinks!

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     July 17, 2018   100 passenger CRJ1000 of Air Nostrum (Spain)   95 passenger Sukhoi SSJ100-95 of CityJet (Ireland)       Tomas’ Comment:   Interesting development, but no surprise, CityJet has been looking to buy other other operators as it looks for M&A … Continue reading

UPDATE: The French national airline, Air France is actually talking to Irish carrier CityJet (owned by Intro Aviation) about wet leasing it’s soon to arrive Russian made United Aircraft Corporation’s (UAC) Sukhoi SSJ-100-95 SuperJet, UAC is under EU/US sanctions as part of Russia’s military industrial complex. The strange thing is that after making headlines with it’s risky move to operate 25 x SSJ-100’s, CityJet will conveniently be sold before the first Sukhoi ever arrives, convenient for the seller and risky as hell for the buyer, this surely raises many “RED” flags ! This should create and outrage by many Europeans, as it benefits Russia’s emerging commercial aviation industry which seeks to compete with Airbus, and at a time when Russia and NATO relations are at their worst, and many EU nationals are suffering from the economic sanctions against Russia, as Moscow has retaliated back, especially against EU agricultural products. To have sanctions in place against Russia, while NATO is increasing it’s military budget and preparedness is a slap in the face for all EU nationals. The Dutch lost 189 nationals in the downing of MH17 in 2014, and the criminal investigation will be completed soon, and all evidence points to a Russian fired BUK within territory held by Russian supported separatist. This will require further sanctions, that must include the Russian commercial aviation industry. The Dutch and all other peace loving Europeans need to boycott and protest against Russian airliners in service with CityJet, Air France, Sky Greenland, VLM Airlines and any other western European operator. The SSJ100 is Putin’s ‘baby’ to crack open the western market for the Russian civilian aerospace industry, which till now had NOTHING to offer the west (except very good helicopters). The success of the new Irkut MC-21 greatly depends on how well the SSJ-100 opens up the western market, so far it is a disaster, +5 years 101 produced, 64 in service, 37 ‘white tails’ waiting for a home, 45 were to be built in 2015, only 17 were built, 56 were to be built in 2016 but only 20 will now be built yet 31 will be delivered (“white tails”). It is very cheap, they can’t move their product so they heavily discount it in price and state supported leases, but life cycle costs are more than just capital costs. So desperate for sales, that Russian airlines are ‘asked”Finmeccanica (Italy) through it’s Alenia Aermacchi subsidiary is obviously not happy with its 51% stake in SuperJet International the JV with Sukhoi as profitability outlook looks very bleak indeed. Time for Europeans to stand up to Russia, the annexation of Crimea was it’s 4th occupation of another sovereign state, eastern Ukraine is a mess, and short of war we need to send a message to Russia we don’t like it’s aggression, and time to say NYET to Russian products like the Sukhoi SSJ100.

Air France is negotiating with CityJet (Ireland) to wet lease several Russian Sukhoi SSJ-100’s come this summer, I find this totally unacceptable, and so should all citizens of the EU, I would urge Air France NOT to wet lease Sukhoi SSJ-100s from CityJet as it is part of the Russian Military Industrial Complex, that sees … Continue reading

UPDATE: Bombardier stock (TSX:BBD.B) hit a low of $1.19 on Wednesday (today it “rallied” and closed at $1.29) as it continues its spiral towards becoming a penny stock, if it was listed on the NYSE (New York Stock Exchange), it would mean possible de-listing of the stock, as Vancouver’s CHC Group (global helicopter company) is now facing for its NYSE:HELI stock that is now hovering at around $0.30 a share (-90% YTD). After my many warnings about the many questionable and poor quality of airline orders for its CSeries, investors and aviation experts are now finally starting to take notice that after 7 years of sales the current minuscule 243 CS100/300 ‘firm’ orders are in fact a whole lot smaller, with many questionable airline orders possibly as low as 130 ‘real’ orders (53% of what is on the books today). Bombardier desperately needs a NEW CS100/300 brand name airline order in the next 30-45 days to prevent the slide of its stock below $C 1.00, as that is the only way in the short term it can gain some investor confidence to stop the stock’s downward spiral. The CS100 is going to be certified in the next 3-5 months, but by then the stock will be a penny stock if no quality new order or some new un-predicted good news is forthcoming soon from Bombardier. The planned IPO of Transportation division in 4th Quarter will raise up to $US 2.5 billion for a 49% sale, but it will most likely impact BBD.B stock negatively, as the trains are 50% of Bombardier’s business, these are desperate times at Bombardier and most Canadians want to see a bright future for this promising company. With 54% of the special voting shares in the hands of the Beaudoin family, new investors are reluctant to be subordinated and a possible hostile takeover is not yet possible. But with the company at a historic crossroad, the possibility of “Combardier” (China’s Comac buying Bombardier), is a real possibility in the next 18-24 months, as this is the only major aircraft OEM the Chinese can possibly buy today, to help them achieve their global aerospace ambitions of being #3 behind Airbus and Boeing, and they are surely watching events in Montreal with great interest.

A week ago (August 14, 2015) I wrote my last blog on Bombardier when its stock price (TSX:BBD.B) was at $C1.46, since then it has dropped to $1.19 on August 19th, followed by a jump to $1.27 in a flurry of 8.17 million trades, as investors were thinking it has reached its bottom, yet without … Continue reading

SUMMARY: Paris Air Show 2015 is done, the winners were again the duopoly of Airbus and Boeing with 752 orders ($US 107.2 billion at “list price”) out of a total of 958 orders. The BIG loser was surely Bombardier which finally after 7 years from its launch, made its debut with both the CS100 and CS300 airliners, but left the show with 0 (zero) in new orders for their CSeries, Q400 and CRJ’s brands, which should be worrying, but after the show Bombardier said it was “absolutely satisfied”, with what ? The fact it had to choose the little known, barely profitable, Latvian government owned airBaltic as its launch customer for the CS300 (13 x CS300’s on order and 7 options) says novels about the poor quality of its order book. The airline’s order has a “list price” value of $US 1.44 billion, yet this airline has made a profit of only $US 11 million in the past 5 years on revenues of $US 688 million (1.6% net profit margin) ? unfortunately they have no “better” airline for such an important role. Meanwhile Bombardier now seriously talks of a stretched 160-180 seat CS500 to challenge Boeing and Airbus ? really ? it’s stock price keeps dropping, (TSE:BBD/B) is at $C 2.25 today down 45.8% YTD (year to date) and the corresponding drop in market capitalization to only $US 5.11 billion, investors are worried and Bombardier wants to spend more money on a CS500 to take on the big duopoly of Boeing and Airbus head on in the most lucrative market, the single-aisle/narrow-body segment ? Individual losers were the A380, A350-1000 and the MRJ, with no new orders, while little known Viking Air of Canada announces 50 “orders” from China for its pricey $US +7.5 million Series 400 Twin Otter even though the Chinese have a similar, good performing, FAA certified and cheaper Y-12E ? Embraer celebrated its 2 year anniversary at Paris of its E2 launch, booked 25 E2 orders at the show and now has 325 firm orders, while the CSeries is now 7 years past its launch (July 18, 2008) with only 243 firm orders, but realistically it is only 130 orders at best. ATR books 46 orders and 35 options at the show, as it solidifies its market dominance in the large turboprop market segment after 160 firm orders in 2014. Sukhoi’s SSJ-100/95 gets an order for 3 as shamefully up to 33 “white tails” (out of 85 delivered, or 39% of delivered aircraft) await customers even with price discounts of 56%, while the program struggles with production, sales, marketing, corporate governance and politics, as 51% partner Finmeccanica (Italy) is restructuring and understandably contemplating its exit from the Italian-Russian joint venture and surprisingly it also has doubts on its future with the very successful ATR program where its fully owned subsidiary Alenia-Aermacchi is a 50% partner with Airbus Group. Airbus and Boeing want to increase production of single aisle/narrow-body airliners (B737Max now has 2,773 orders and A320neo has 3,854 orders) to a possible 115 per month (Boeing to 52, Airbus to 63) by 2018 ! is that over optimism in this unprecedented period of growth ? can the already over extended supply chain even handle the extra work ? With an average monthly delivery of 112 aircraft in 2014 of all sized aircraft by both OEM’s (1,349 units), the latest Boeing 20 year forecast of 35,560 aircraft would translate to an average of 148 aircraft per month for all sized aircraft by both OEM’s, an increase of 32% on 2014 delivery numbers, with new orders in 1st half of 2015 already down on 2014 ? What role do speculative orders play in this order frenzy ? Deals at Paris are always quoted in List Prices but who is getting a good deal ? are you getting a good deal ? how do you know you got a good deal when almost everyone gets a discount, no one pays List Price and it is all so secretive, so how low can Boeing and Airbus go ? how about 64% off on big orders ? yup, enough to make sure that new competitors like the CS500, C919 and MC-21 do not win orders based on price. Lastly, Russia’s aggressive stand against NATO is seriously raising tensions in European countries on the Russian border, since 2008 Russia has annexed and integrated 4 Russian speaking enclaves/territories from 3 of its neighbors (Georgia, Moldova and Ukraine), now open conflict is a real possibility, and Russia’s military thinks a small tactical nuclear response today is possible without triggering a WW III ! in this political environment it is time for tough economic sanctions on Russia and especially its aerospace industry, the Sukhoi SSJ-100 is getting lots of financial support from President Putin, as it is the only Russian commercial aircraft ever built with any western appeal. It is time to stop buying Russian aircraft and stop ALL support for Russia’s aerospace industry, as any military conflict with Russia will make corporate profits absolutely irrelevant anyway !

With the 2015 Paris Air Show now behind us, it is worth to look at the final results of the big aerospace event and analyze the winners and the losers as it gives a pulse on which OEM’s are on top of their game and those that are not. —————————————————————————————————————————————————————————————– The battle in the narrowbody … Continue reading

ABSTRACT: Bombardier Aerospace is changing its top management for the better and hopefully mediocrity within it’s ranks is on its way out at all levels, new CEO Alain Bellemare has ditched his President of Commercial Aircraft, Mike Arcamone and replaced him with Fred Cromer (ex-President of ILFC) while Swiss Global Air Lines will be the CSeries launch customer in 3Q/2016. The CSeries still has many issues ahead, flight testing schedule will change, entry into service (EIS), deep price discounting by Boeing and Airbus (40% to +50%). A major slow down in demand for business jets in China and Russia spells trouble for the Global brand, while Russia’s IFC is reviewing its order for 32 CS300’s and another 75 orders are highly questionable (in fact 44% of orders are questionable), just as more CSeries orders are badly needed, especially a BIG North American customer. Future of Learjet is up in the air, as some big changes are a must for restructuring the company, as stock price languishes below CAD$ 3.00 since February 10th and compared against it’s peers Bombardier financial performance is very poor, how long will it remain the world’s only manufacturer of trains and planes ? The good news is that there is change, and with that comes hope for everyone, new people bring new ideas, new enthusiasm and new energy, Bombardier for too long did the same things over and over again, expecting different results and off course failed to produce different results, now I see a some light at the end of the dark tunnel for Bombardier Aerospace, in the end success in business is ALL about having the right people in the right positions !

For the regular readers of my Blog, you know that I have been very critical of Bombardier Aerospace for some time, and I do take pride in the fact that I believe I was spot on for calling for BIG changes at the top. Back on January 20, 2015, I was the first to call … Continue reading

ABSTRACT: Sukhoi’s 93 seat, $35 million SSJ-100 has received 30 orders this year already (Aeroflot x 20, Interjet x 10) and is looking to a new stretched version by 2018, is this aircraft a real competitor to Embraer, Bombardier and Mitsubishi ? or just a ‘niche’ aircraft mainly for the Russian Federation ? it’s Snecma SaM146 engine is a CFM56 derivative which is being phased out in the industry as new generation engines come on line on the Boeing MAX, CSeries, MRJ Embraer E2’s and Airbus neo aircraft, with published SSJ fleet aircraft utilization at 8 operators between a low 93 to 166 hours per month this has to be worrying for any operator, is there a problem with support ? reliability ? or the operators ? delivery to its first Western European customer, VLM Airlines of Belgium is delayed until 3Q/2016 due to cerification, as well the aircraft’s future international success depends on Russia’s foreign policy, if new sanctions have to be added they will target the Russian aerospace industry, crushing Russia’s dream of being a serious international commercial aircraft player with the SSJ-100 and future Irkut MC-21, without international orders, no company can be a major player in this industry, no matter how big its domestic market is.

The SuperJet International SpA (a joint venture between Alenia 51%, Sukhoi 49% on the Sukhoi SSJ-100 SuperJet) with 182 orders, has received a follow on order from Mexico’s Interjet for 10 more of the aircraft for a list price of $US 350 million, though no one pays list price for commercial aircraft today, not at … Continue reading

ABSTRACT: MAYDAY ! Russian Ruble (RUB) half its value of a year ago and oil prices at a 6 year low of $US 48/barrel while Russia needs the Brent oil price at $US 105/barrel to balance its budget and EU/US sanctions in place with more to come, the Russian airline industry is feeling the pain, Transaero Airlines asks for and gets State Aid while UTAir is also in line for a bail out, will national flag carrier Aeroflot and others be next ? how will the commercial aircraft industry move forward with the Sukhoi SSJ-100 and Irkut MC-21 under these harsh economic times in Russia ?

The deteriorating economic situation in Russia and the political tensions from its annexation of the Crimea and support for separatist rebels in Eastern Ukraine is causing huge problems for the Russian aviation industry, and Russia is no busy bailing out its airlines, 2nd largest Russian airline Transaero Airlines and smaller UTAir are getting state aid … Continue reading