Thursday, January 20, 2005

Lookout Above The Clouds

Heck, I return for one post... [One sentence added 22/01]

For Airbus, after three decades of rise from obscurity, it's the time of basking in glory: most planes delivered, most planes ordered, highest income, greatest plane of them all[*] presented to the public. However, in the following decades, the ruler might be overthrown again. I direct your attention across the Atlantic - no, not until the Pacific shores up there, but the warmer regions down there.

Embraer is a Brazilian aerospace company. Altough its sales were hit even harder by the post-2000 recession than Boeing's, it stayed profitable. On the market of jets with a few dozen passengers, including medium-sized business jets, it is a competitor at the heels of Bombardier Aerospace. However, recently, it started to expand its product palette upwards, to just below and above 100 seats. This year, Embraer's E190 and E195 models will get certification (their smaller sisters E170/E175 got certified last year and are in delivery).

As these jets offer advanced technology at much lower prices, the Embraer E190/E195 (94 and 106 seats typical) just ate up the market in which Boeing's and Airbus's smallest planes competed: the A318 (107 seats typical) and the B717 (106 seats typical). While the A318 received a mere 4 new orders last year, and a conversion of 22 planes reduced the backlog to just 42, Boeing even decided to end B717 production - after receiving 8 orders last year with 32 planes remaining in the order backlog. At the same time, the E190/E195 received 45 orders in 2004, with 170 in the backlog.

Now, as Boeing and Airbus are preoccupied with battling it out in the medium-sized long-range jets category (B7E7 vs. A350) in the next five years, Embraer even has a window of opportunity to climb another category - and attack the older A320 and B737NG. So I can imagine a Third World Strikes Back scenario in the coming decades, with Embraer unseating Airbus like it did Boeing.

On the other hand, all the high-flying aerospace corporate dreams might soon be grounded by the realities of post-Peak-Oil economy, and/or the economic crises accompanying a runaway greenhouse effect they helped to cause...

[*] Some qualifications for this 'largest ever'. The measure is maximum takeoff weight (MTOW), where the A380-800 comes in at 560 tons (A380-800F two years later will weigh in at 590 tons). The Antonov An-225 cargo plane has in theory a MTOW of 600 tons (it also has a wingspan 8 m wider and is 10 m longer), but the highest value documented in its short active history was only 508.2 tons. The largest Soviet ekranoplane (WIG), the then top secret "KM" prototype of 1966, dubbed "Caspian Sea Monster", had an MTOW of 540 tons (and a length changing in the range 92-106 m due to modifications). The hydroplane featured in Martin Scorsese's latest film "Aviator", the H-4/HK-1 "Spruce Goose", has a record wingspan of 97.2 m, but a shorter body and a MTOW of only 180 tons.