Sukhoi Builds on Initial Success

by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.

Sukhoi Superjet 100

As the primary foundation upon which Russia’s United Aircraft Corp has been built, Sukhoi remains the strongest of the Russian manufacturers.  The company’s success is due to two programs: one civil aircraft, the Sukhoi Superjet 100; and one military, the Su-35 fighter. Continue reading

The Effect of 2016’s Presidential Election on Worldwide Aerospace and Defense Markets Part 1/2

By Matthew Beres, Forecast International.

election-2016

Welcome to the Forecast Roundtable Podcast. Forecast Roundtable brings together expert analysts, industry professionals, and government officials to discuss the latest issues in the aerospace and defense markets. Produced at the Forecast International headquarters, Forecast Roundtable offers unique and in depth insight and discussion on any range of topics from geopolitics to aerospace and defense markets. Topic suggestions are welcome. Continue reading

Kaman Seeks Balance as K-MAX Begins Production Anew

by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.

Kaman Unmanned K-Max helicopter

Kaman Unmanned K-Max helicopter

In spite of a market slowdown, Kaman expects aerospace and defense to be its key revenue drivers going forward.  Aerospace revenues will be steady as airframers deal with massive order backlogs. The ongoing conflicts in the Middle East will continue to drive sales for fuzing products in defense.

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Russia’s UAC Dreams of Civil, Banks on Military

By Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.

Sukhoi Superjet 100

Sukhoi Superjet 100.  Source: Superjet International

United Aircraft Corporation is ever so slowly coming into its own.  Following its formation, the firm struggled to combine the disparate entities and Russia’s aerospace industry into a cohesive whole.  While the firm still has a way to go, it has made substantial progress.

With the conflict in Ukraine, UAC has pulled back on its international defense marketing to a degree – at least to new customers.  Instead, the company is focusing on its nascent commercial programs, the Sukhoi Superjet 100 and the under-development Irkut MC-21.

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China’s AVIC Moves Closer to World Stage with Rollout of C919

By Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.

C919 Rollout Cermony. (COMAC)

C919 Rollout Cermony. (COMAC)

China’s dream of becoming a major aerospace power took a step closer to becoming reality with the long-awaited rollout of the C919.  This all-new narrowbody airliner is designed to compete directly against Airbus’ A320 family and Boeing’s 737.

Led by AVIC’s COMAC subsidiary, the program is now entering the difficult phase of testing, certification and delivery. It’s true that AVIC may have gained experience through the long-delayed ARJ21 regional jet program, but even Airbus, Boeing, and Bombardier have trouble keeping to aggressive schedules with all-new aircraft.  Testing and certificating the C919 is going to be a long, drawn-out process, and service entry in the Chinese market is unlikely to occur until 2018 or later. Continue reading

Bombardier Looks to Put Its Troubles Behind

By Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.

Bombardier CSeries CS100

Bombardier CSeries CS100

The turmoil that has roiled Bombardier over the past few years came to a head in 2015 when top management was dramatically reshuffled.

In February, Alain Bellemare was named to replace CEO Pierre Beaudoin. In April, Fred Cromer was selected to lead Bombardier Commercial Aircraft. In June, David M. Coleal was named president of Bombardier Business Aircraft. Finally, in August, a new chief financial officer, John Di Bert, was named to replace the retiring Pierre Alary.

The new management team has its work cut out for it as it seeks to deal with a litany of woes in the CSeries, Global 7000/8000, and Learjet 85 programs.

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Antonov Becomes Key Player in Ukraine’s Aviation Industry

By Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.

Antonov An-178 (Credit: Vasiliy Koba)

Antonov An-178 (Credit: Vasiliy Koba)

Following its consolidation with Ukraine’s state-owned defense conglomerate Ukroboronprom earlier this year, Antonov is now expected to become the focal point of the country’s aviation industry. In addition, Antonov will expand its maintenance, repair, and operations services under Ukroboronprom’s aegis. Continue reading

Rolls-Royce’s New CEO Faces Challenges

By Richard Pettibone, Aerospace & Defense Companies AnalystForecast International

Warren East, New CEO of Rolls-Royce

Warren East, New CEO of Rolls-Royce

While the backlog of engine production will drive profits for years, Rolls-Royce is looking to adapt its operations for a new era – and a change in leadership is on the way. Effective this July, tech industry veteran Warren East will replace CEO John Rishton at the helm.
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Sikorsky Management Shake-Up May Presage Spinoff

by Ray Jaworowski, Forecast International.

Robert Leduc Named President at Sikorksy

Robert Leduc Named President at Sikorsky

In a move that could set the stage for a corporate divestiture, United Technologies Corp (UTC) has appointed a new president to head its Sikorsky Aircraft subsidiary.  Effective immediately, former UTC executive Robert Leduc has been named president of the global helicopter manufacturer, succeeding Mick Maurer.

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Boeing Holds Delivery Title Again in 2014 While Defense Declines

By Richard Pettibone, Forecast International

The 2014 tallies are now in, and Boeing has held onto its lead in deliveries with 723 aircraft completed, compared to Airbus’ 629. However, for the third year in a row, Airbus sold more aircraft, garnering 1,456 net orders compared to 1,432 for Boeing. But if you are a Boeing fan, you can crow that the value of Boeing’s orders, estimated at $233 billion at list prices, is much higher than Airbus’ sales, which were valued at $175 billion.

Boeing Tops Airbus in 2015

Boeing Tops Airbus in 2014

For 2014, Boeing reported record sales of $90.8 billion, up 5 percent from sales of $86.6 billion in 2013. Net income for the year was $5.4 billion, up 19 percent from $4.6 billion in 2013.

The continued growth in commercial aviation remains fueled by cheap money. Many airlines are taking advantage of the low-cost financing still available around the world to replace older models with newer, more fuel-efficient aircraft. As a result, Boeing’s backlog continues to grow – rising to $487 billion in 2014 from $423 billion at the end of 2013. The key for the company now is to continue its studied increases in production rates to meet customer demand.

While commercial aviation continues its wild ride, defense is preparing for interesting times. Early in 2013, a bitterly divided Congress allowed sequestration to take effect, initiating some $500 billion in across-the-board budget cuts. With the mandated draconian cuts now eliminated in the near term, the company’s defense operations can breathe a bit easier, as the downturn will not be as drastic as once anticipated.

But that doesn’t make the cuts any easier.

Boeing’s defense business, which accounts for around 40 percent of its top line, has suffered of late due to the government’s defense budget cuts. In response, the company has begun consolidating its defense operations. In a major shift, Boeing has decided to move its defense services and support work out of the high-cost Seattle area to the lower cost regions of St. Louis and Oklahoma City. With many of Boeing’s defense programs such as the C-17, F-15 and F/A-18 winding down, the move was necessary.

C-17 Globemaster

C-17 Globemaster Production Winding Down

Current defense programs will not be able to make up the lost revenue. The KC-46 tanker has razor-thin margins and is being impacted by cost overruns that Boeing must bear. Meanwhile, the P-8A maritime patrol aircraft has seen its fiscal 2015 procurement cut as the Navy delays the procurement of six aircraft.

Like many other defense contractors, Boeing is looking abroad for more sales. Roughly 30 percent of Boeing’s defense sales are international, up from 7 percent five years ago. But competition will be fierce as every other defense contractor around the world executes the same play.

Despite the difficulties, Boeing remains in a strong position thanks to a robust backlog and the fact that even with reduced spending, defense remains a solid – albeit shrinking – market.