AvTalk Episode 215: Ryanair goes all in on the 737-10 MAX

AVT 215 Transcript
EPISODE 215
[EPISODE]
[00:00:07] IP: Hello, and welcome to Episode 215 of AvTalk. I am Ian Petchenik, here, as
always with –
[00:00:15] JR: Jason Rabinowitz. How’s it going, Ian?
[00:00:18] IP: It's going well, Jason. How are you sir? You've been traveling?
[00:00:22] JR: Yes. Not a long week because of that. It was just leisure, travel out to Seattle
and back for a long weekend, which was nice.
[00:00:28] IP: But you got to enjoy the hospitality of the 737-900 ER, both ways.
[00:00:34] JR: Yes. Both ways, unexpectedly. I had booked a MAX on Alaska, on the way out. It
ended up being a 900 ER, which is exceptionally common on Alaska. Not all that out of the
ordinary. Then, 739 ER on the way back with Delta. Two very, very similar experiences, but
different enough to make it interesting, at least. The aircraft were only a year and a half apart
from each other, off the line, which is fun, but different enough where you definitely noticed the
age difference.
[00:01:06] IP: Eighteen months makes all the difference?
[00:01:09] JR: Well, yes. Weirdly enough, Delta's aircraft was a little bit older. Still had the
Boeing sky interior, but it did not have the nice new space bins. It had the older, much smaller
bins than Alaska 739 from a year and a half later. You wouldn't think it, but yes, it makes –
[00:01:24] IP: Those bins make a difference.
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AVT 215 Transcript
[00:01:27] JR: Yes. Makes big, big difference. I mean, it didn't matter for me since I wasn't in
basic economy, or whatever. So, there was room for me. But I'm sure the people at the end of
the boarding line cared exponentially more than I did.
[00:01:38] IP: Yes. About how many bags you can fit. That's true. I mean, thinking about the
ways airlines have segmented the boarding process, and it really comes down to is the plane
I'm getting on one with new bins or old bins, on how frustrating that process is going to be once
you finally get on a plane.
[00:01:58] JR: Yes. Pretty hard to predict and find your travel around that. But it didn't stop
Alaska from begging at the gate that it's a full flight. We need X number of people to surrender
their bags and exchange for a group C boarding, which at that point, I don't think it matters
when you board because you've already lost the incentive of the board early. So, whatever.
[00:02:19] IP: If you check your bag, you get to walk on last and then we leave right away. That
to me, would be like –
[00:02:25] JR: That sounds nice.
[00:02:26] IP: That, I'd be okay with.
We've got a great show this week. We got some big order news that we will get into in just a
moment, and a little bit later on in the show, Jenny Kavanagh is joining us. She is the Chief
Strategy Officer at Cranfield Aerospace Solutions. Cranfield recently announced its intention to
merge with Britten-Norman aircraft, which listeners may know from the Islander and Trislander
fame. We're going to talk about what their plans are for the next generation, or really first
generation of sub regional hydrogen powered aircraft. That'll be a little bit later in the show.
[00:03:02] JR: Whatever their plans are, if it results in more Trilanders out in the world, I am all
for it. But I don't think that's in the cards, is it?
[00:03:10] IP: We don't talk about that in the interview. But I think it's safe to say that that's not
in the cards at the moment. Though, you never know. You never know.
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AVT 215 Transcript
Let's talk about the big order news from this week. Ryanair bought a ton of 737 MAX 10 aircraft.
They've ordered 150 firm, and 150 options of the MAX 10 which is Boeing's largest MAX and
largest 737 to date.
[00:03:40] JR: Even just the 150 firm would be a blockbuster order, let alone 150 plus. You
know what, we might come back and take 150 more, even without that.
[00:03:50] IP: Yes, not even might, though. O'Leary did the announcement, basically said,
“We're taking the option because it's such a larger order, we need board approval for all of these
things. But we hope to exercise the 150 options soon.” The MAX 10 for Ryanair’s configuration
will feature 228 seats, which as Jason, I believe, noted earlier in the week is actually fewer than
Boeing has been able to certify on to the MAX 10.
[00:04:22] JR: Two whole seats for your dear passengers, your comfort. Ryanair is not going to
add those two extra seats. That’s where they’re going to keep the scratch cards.
[00:04:32] IP: There you go. It's true, though. Let's see, assuming certification of this aircraft
happens on it's –
[00:04:41] JR: One day.
[00:04:42] IP: I think we're in the fourth or fifth revision of the certification schedule. But
assuming that happens somewhere near the current timeframe of next year. Ryanair will begin
taking delivery of these aircraft in 2027. It hopes to have all of them delivered by 2033, so that it
can carry – and this number, I had to double check that this number was correct. By 2034,
Ryanair wants to carry 300 million people a year.
[00:05:10] JR: That's like the entirety of the population of the United States, give or take.
[00:05:16] IP: Yes.
[00:05:16] JR: That's a lot of people.
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[00:05:18] IP: Yes. That's a lot of people. Right now, they carry slightly more than half that. They
carry, I think, it's 169 million people a year. They want to grow at roughly 5% a year through
2034, to find 300 million passengers per year. Our friend of the show, Ned Russell, did some
digging into where they're going to find those people, and Michael O'Leary really hit it square on
the head when he discussed getting back into Ukraine.
They're looking to Eastern Europe for the largest growth. Western Europe, as far as Ryanair is
considered, is extremely saturated. I mean, find a secondary or tertiary airport in Western
Europe and Ryanair probably has flights to or from that airport. They're looking to go back into
Ukraine. They're looking to not only reenter Ukraine, as soon as the war is over, but they said
base aircraft there within 12 months of resuming flights. That was an interesting thing.
Elsewhere in Eastern Europe, they're looking for growth.
North America is out of the cards.
[00:06:27] JR: Oh, damn.
[00:06:28] IP: Not going to happen. When the order came through for the MAX 10, a number of
people suggested that, “Oh, they could start transatlantic flying.” But as O'Leary has said, and
as Ryanair has said, consistently, only idiots fly low-cost, long-haul flights.
[00:06:45] JR: Yes. I was going to add, it has not been a secret that Ryanair and the current
management there has no interest in flying transatlantic. Even suggesting that seems a bit silly.
[00:06:56] IP: No. I mean, the real bulk of the gross is going to come from more seats on the
same flights. You're taking a Ryanair 737-800, which seats, I think, 180 and change, if I'm not
mistaken, and going up to 228 on the same route. That immediately adds economies of scale
for the airline. More passenger volume on the same routes is really where you're going to see a
lot of the growth. Because they said in the order announcement 150 of the 300 aircraft are really
going to be used to replace 737 NG.
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The one thing that I saw, and I wish I had noted who said this, but there was an analyst that was
talking about –and if anyone caught their name, email us at [inaudible 00:07:46], and I'll link it
in next week's show notes so that we can credit this person. But they were talking about not
about what the 737-10 order will do for Ryanair, but what it'll do for the longevity of the 737 MAX
program. Because the analysis that they were giving was that the order from United Airlines,
which is extremely large, as far as 737-10 concerned, doesn't really matter to the wider world,
because United buys an aircraft and then it keeps it until the aircraft can no longer fly, and then
it goes and parks in the desert.
Whereas Ryanair takes an aircraft, brand new from Boeing, flies it for as long as they feel like,
and then renew the aircraft with something else. This huge 300 aircraft order for the MAX 10
creates by itself, a secondary market for the MAX 10. That leads to other opportunities outside
of Ryanair and Boeing skipping around joyfully for a while. This is one order but anytime
Ryanair orders aircraft, especially orders that many aircraft, it has implications outside of
Ryanair itself.
[00:09:02] JR: Yes. It creates a whole other little ecosystem. To be clear, Ryanair’s fleet is not
all that old. Its oldest 737-800 which is an overwhelming majority of the fleet right now. Its oldest
aircraft is only a little over 18 years old. I guess, by the time the MAX 10 gets around to being
delivered, these aircraft will be in their mid-20s. That's actually pretty decent in terms of Ryanair
keeping an aircraft, or anyone keeping an aircraft. That's pretty up there in age. Those older
aircraft might be retired sooner rather than later. Those might be replaced by the MAX 8 before
the MAX 10 comes. But it will be interesting for the MAX 10 to be introduced, because it'll be, by
far, their largest aircraft, since right now, they only operate the 800 and the MAX 8 which are
essentially the same aircraft or at least the same length.
This is going to be a significantly larger aircraft and some fleet, maybe not inconsistency, but it
will let you add some complexity where they can't just swap out like today, a MAX 8 for an 800,
or an 800 for a MAX 8. There's going to be a big seating difference between a MAX 10 and a
MAX 8. That's a complexity that Ryanair doesn't have to contend with right now,
[00:10:11] IP: Time to figure out some personal deboarding or something like that. Maybe,
some contest where you can get people to – maybe they can give him scratch offs?
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[00:10:20] JR: Yes. But it’ll be nice to see a different, again, another aircraft type from Boeing
with the built-in air stairs like the 800 and the, I believe, the MAX 8 have, which is completely
unique as far as I know, in the commercial passenger side to Ryanair. I don't know of any other
airline except airlines that have taken X Ryanair aircraft that –
[00:10:41] IP: You know what, that's a good question. If you know of any other airlines that have
taken initial delivery with the, I guess, internal air stairs, or the deployable air stairs from Boeing,
email us and let us know, because that's an interesting bit of trivia.
[00:10:56] JR: I think it's unique to Ryanair. I have never heard of another airline offering that. If
you're not aware of this very odd feature, basically, a feature plucked right out of the 737 BBJ,
the business jet, where they don't need air stairs or ground support, or heaven forbid, a jet
bridge at Ryanair. Their 737s come equipped with their own air stairs built right under the L1
door when they are ready to get people on or off the aircraft that deploys its own stairs, because
who needs to pay for ground equipment? That's just an unnecessary expense Ryanair will not
be paying for.
[00:11:33] IP: A lot of the reaction to the order was people saying, “Oh, there's just more people
on the plane and Ryanair this, and Ryanair that.” I've gotten to the point, and maybe it's
because we do this day in and day out, and we're extremely well versed in what the market
segmentation is on who's flying what. But to me, it's like, I don't share that opinion, and maybe I
did at some point. But certainly now, I'm like, “No, they know what they're about.” I feel like you
have to – you might not like it. But when you fly Ryanair, at least at this point, I feel you really
know what you're going to get.
[00:12:11] JR: There is nobody on the continent of Europe that does not know what Ryanair is
about, and where you will end up. You will not end up in de Gaulle or Heathrow. You'll end up
where you end up, and you will pay for bags, and you'll pay for every – nobody doesn't know
that. That's very different than passengers flying Allegiant or Spirit, who very well might not
know that you have to pay for literally everything. That is true. There can't be anyone in Europe
that doesn't know what Ryanair is all about and what that experience is, right? There can't be.
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[00:12:42] IP: If there are, I would be very surprised. But it never ceases to amaze me when
there are people. If you look at Ryanair’s Twitter account, which is a whole separate podcast
segment, because of what they do and how they do it. I tend to enjoy it. But some people find it
off-putting. But yes, I think that they know what they're about, and these aircraft are certainly
going to help them do that.
The one thing that I will mention, before we move on from this particular topic is that as part of
the delivery, or as part of the order announcement, there was a question and answer period,
and Michael O'Leary commented that toilets will indeed remain free on Ryanair flights.
[00:13:20] JR: That question just won't die.
[00:13:26] IP: Okay. Moving on. The bankruptcy proceedings that were initiated by Go First in
India a few weeks ago, have not reached a conclusion, but we've hit a milestone. The courts in
New Delhi have allowed Go First to go under bankruptcy protection. They've been granted
protection and the ability to restructure under some conditions. The owners of the airline have
had to inject a good bit of money into the airline, to provide it with fresh capital that needs to
remain a going concern. Flights are still grounded, well, until the 12th of May. By the time you're
listening to this podcast, it will either have been extended, and the airline will remain grounded,
or they will be flying next day. Right now, it seems more likely than not that the airline will remain
grounded, but that remains to be seen.
One of the interesting things that has happened over the past few weeks have been that lessors
have attempted to have the aircraft deregistered off the Indian registry by the Director General
of Civil Aviation in India, in order to repossess those aircraft. Those aircraft that was about three
dozen aircrafts split mostly into the A320neo and then some A320ceo family aircraft. Those
deregistrations did not, in fact, happen. Now, that Go First has been granted bankruptcy
protection or restructuring protection, that supersedes the claims by the lessors to have the
aircraft deregistered. Now, they can't get their aircraft back as easily as they were hoping. The
airlines still maintains possession of the aircraft, not that they're flying them at this point, but
they still have them.
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[00:15:14] JR: That's better than not having them. I still wish to Go First luck, or better luck than
they've been having. But this seems like a step in the right direction. It's just a real series of
unfortunate events unfolding for them.
[00:15:30] IP: Yes. It’s not great, what is happening. It will be very important how the next step
of the process goes, to how this airline either gets back on its feet, or we say goodbye. There
are other airlines that were in talks with lessors to take those aircraft already, and other airlines
including Air India, Indigo, and Akasa Air are interested in taking the slots and parking positions
of the Go First aircraft, that they're not being used right now, because airline is not flying. Every
step of this makes it more difficult to get back on their feet. But I hope that they're able to
restructure and they can get back on their feet.
One of the things that I did want to mention was the Go First has laid blame for all of their
problems at the feet of Pratt & Whitney. Pratt & Whitney sent a letter to Go First saying that
basically, we want to help, but we just don't have the engines. They said at this point, they have
295 spare leased engines, and they're all either spoken for, or unavailable because they're
undergoing maintenance or awaiting maintenance. This was the letter that was dated the 4th of
May. So, as of the 4th of May, 193 of the 295 spare leased engines are either under lease, so
spoken for, or in possession of customers and not possessed by Pratt & Whitney. Then, “The
remaining 102 spare leased engines are currently unserviceable or either undergoing or in
queue for maintenance.” That's a lot of engines.
[00:17:25] JR: That is a lot. I'm pretty sure Go First would also accept financial restitution here
rather than geared turbofan restitution. It doesn't seem like they're getting either at this point.
[00:17:39] IP: No. I mean, it doesn't seem like there's an easy solution or a quick solution to any
of this, because 102 engines undergoing or waiting for maintenance?
[00:17:50] JR: Yes. We don't even know how long that maintenance takes. It's got to be a few
days, maybe a few weeks a piece. This is quite the backlog that really is, should not exist.
[00:18:02] IP: Yes. It's just not a good situation. There are other airlines and other aircraft that
are certainly affected. Go First, formally GoAir still go – I think, legally so, GoAir. But anyway,
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this airline Go First, just happens to have like the perfect storm of A320neo aircraft, with Pratt &
Whitney geared turbofan engines, operating in conditions that are more conducive to increased
engine wear, and more maintenance needed.
[00:18:35] JR: You could say, Go First went first. Yikes. But you said, we've beaten this issue to
death. Go First is just the perfect storm of this incident. I believe, I read today that KLM’s
president or one of the very higher ups went to Brazil to talk to [inaudible 00:18:56] about the
issues they’re having with the E195-E2, because half of its entire E195-E2 fleet is grounded,
presumably due to the same geared turbofan issues. Initially, this isn't going to take down an
airline like KLM, but certainly looking like it might do that for Go First.
[00:19:14] IP: Yes. It's not good all around. Definitely not good. The Paris Air Show should be
interesting.
[00:19:20] JR: Yes. I'm going to be more careful about booking flights utilizing aircraft with Pratt
GTF engines in the near term. I know that's a hot take that a lot of people probably won't agree
with, but I'm going to look after myself right now and maybe stick to some classically powered
aircraft.
[00:19:38] IP: Good old CFM56.
[00:19:41] JR: Yes, can't beat it.
[00:19:42] IP: Okay. What happens if you do book a flight and the flight is canceled because
something within the airline's control, led to that cancellation? Jason, what happens in the US
these days?
[00:19:56] JR: Well, in the US, if you happen to be flying one of the airlines at has voluntary
protections, maybe you get something. Maybe you don't get anything. Because that airline
doesn't really need to give you anything. Very different than Europe, where if there's a
controllable delay, and your flight is delayed over three or four hours, depending on your state,
you are due compensation, and you are due a hotel, and you are due a meal. The US looks like
we might be jumping on the bandwagon and actually protecting airline customers in a way that
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isn't completely voluntarily follow through and not always actually given to passengers. That
sounds like a nice idea.
[00:20:36] IP: It sounds like something is coming. The Department of Transportation has
announced its plan for new rulemaking, which is to say that nothing's going to happen soon.
[00:20:45] JR: It's a plan to come up with a plan. There is a possibility that this could all
eventually lead to compensation for passengers, when an airline control, well, cancellation or
significant delay occurs. Things that are very similar to the EU 261 comp scheme would be
offered meal and meal voucher, overnight accommodations, transportation to and from a hotel,
and rebooking.
There's also the prospect of financial compensation based on cancellations or significant delays
the way there is in Europe. This one, I think, is interesting that they included this, but I think it's
very important. Timely customer service during and after periods of widespread flight
irregularities. Oh, and they’ll also going to define controllable cancellation or delay. An important
step, but certainly something that they'll want to do.
[00:21:42] JR: Yes, that would be nice.
[00:21:44] IP: We're long ways off from this ever, not ever becoming law. But we're long ways
off from this becoming law or regulation. It's nice to see them moving in this direction.
[00:21:54] JR: Yes. I can't imagine whatever the US DOT or whomever cooks up will be
anywhere near or are approaching or exceeding what the EU 261 benefits airline passengers
with. Because believe it or not, consumer protection is really not our thing here in the US. In
most industries, it's just not a thing. I really enjoyed IATA’s response to the DOT here. IATA is
the International Air Transport Association, basically, the airline industry's lobbying group, and
they had a lot of things to say about the –
[00:22:30] IP: There were some gnashing of teeth and stomping of feet?
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[00:22:33] JR: Yes. They are very upset about this, and they think all of their voluntary things
that they do today, it's perfectly sufficient, and it won't actually reduce delays. I don't think that
matters. I would like to be taken care of when there is a controllable delay. They basically tossed
in the kitchen sink here. They mentioned supply chains, and aircraft manufacturing, and part
shortage, and FAA or air traffic control issues, and all of this. It doesn't matter. At the end of the
day, if there's an airline controllable delay, a mechanical thing, pilot doesn't show up, flight
attendant got sick, it doesn't matter. They'll figure it out, just like the European airlines did.
Airline passengers will be taken care of. It works there. It'll work here.
The mere happenstance that flight delays, yes, they did rise in Europe. But the number of
controllable cancellations did not go down, to the end user, that doesn't matter. All that matters
is that passengers who are inconvenienced by a controllable delay or cancellation, which will be
defined, and they'll figure out how to define that, are taken care of. I mean, I understand that
IATA has to fight back on this position. Man, it's just a bad look, I think. Of course, it is, to fight
against regulation to compensate airline passengers in a more than completely voluntary way.
That's my take.
[00:23:57] IP: Yes. I get their position, and they're the airlines voice in this space, so they're
going to say what the airlines want. That's fine. But I do think that it's very interesting, the
amount of deflection in both IATA’s response to this and Airlines for America’s response to this, a
lot of what about-ism. Hopefully, these regulations go into place eventually.
[00:24:23] JR: Don't hold your breath.
[00:24:24] IP: Well, certainly won't be holding it for a Notice of Proposed Rulemaking.
Elsewhere, regulation that I'm also not holding my breath for, but which is, to me, actually much
more interesting, because it seems more real at this point is that the European Union Aviation
Safety Agency has published the first proposal for worldwide – this is the first worldwide
proposal anywhere for a schema for the assessment of the noise generated by eVTOL aircraft.
If you remember back to our conversation with Elan Head, who is now at The Air Current, and I'll
put a link to that episode in the show notes. One of the biggest stumbling blocks towards the
adoption of eVTOL aircraft that we talked about was the noise they make. This, to me is much
more interesting, that we're going to figure out a way to assess this noise and deal with it.
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[00:25:19] JR: That's nice. Just reading from release. They say the proposal addresses these
concerns, describing ways to measure the noise produced and setting limits to ensure that the
noise pollution is not excessive. It's important that they – just like we talked about in the last
thing, it's important that they figure out a way how to measure the noise and then take care of
the noise. Because if you can't agree on how to measure it, you can't really take solid action on
it. This is really getting at the problem from a fundamental level of how do you even measure
noise from these things, these things that don't even exist today?
[00:25:50] IP: Yes. The societal adoption of these aircraft is going to be predicated upon
accepting small, buzzing aircraft into neighborhoods. Eventually, they only make sense if they
become ubiquitous. Otherwise, they're just weird looking helicopters.
[00:26:13] JR: Yes. The release from EASA goes on to say, a good example here, as eVTOL
are expected to be quieter in certain phases of flight, there's a need to allow them to fly closer to
the microphone in certain flight phases to maintain a minimum signal to noise quality. That's
interesting that not even are they discussing noise measurements for these things. But they
have to figure out where and when do we even measure the noise for them, because they don't
exist today.
Helicopters, yes, we already know, they're stupidly noisy when they're taking off and landing and
hovering, and doing pretty much anything. I hate helicopters, by the way, living in New York. I
wish them nothing but the worst. Go away. I hope they're all replaced by eVTOLs. But it is very
interesting that we have to rethink how we even measure the volume of these things, because
they're different. They're just flat out different than helicopters.
[00:27:07] IP: Well, Jason, your wish that helicopters might all go away moved, I don't know,
one step, maybe? Half a step? Quarter of a step?
[00:27:17] JR: There is an exception. The Marine One flew over my place today. That was
interesting. I enjoy seeing that one.
[00:27:24] IP: That’s an interesting helicopter.
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[00:27:24] JR: The V Osprey, which I guess are not eVTOL. They’re VTOL aircraft, but man are
those things stupidly loud. But they get an exception. They can come and go as they please.
They're very nice looking.
[00:27:37] IP: Because they only come in every once in a while, and they're fun to look at. But
the FAA did release what it's calling an updated blueprint for airspace and procedure changes to
accommodate what they're calling air taxis. I hate that term. I'm going to stick with eVTOLs.
[00:27:52] JR: You can't hold down the air taxi. Come on.
[00:27:54] IP: Yes. The taxi thing bothers me. But eVTOLs or a more, I guess, catch all, urban
air mobility. These things that take off and land within a city. The FAA released its updated
blueprint to try and look at how they're going to integrate all of these new aircraft into the
National Airspace System. The FAA saying the complexity of the corridors could increase over
time, from single one-way paths, to route serving multiple flows of aircraft, flying in both
directions. Over time, these quarters could link an increasing number of routes between
vertiports.
Dealing with, where do you locate the takeoff and landing spaces? How do you transit the
aircraft? Are they on – is it a one way street? Do they have multiple flows at different altitudes?
Does that matter based on existing air traffic? Do you move air traffic? All of the things being
updated by the FAA and various industry stakeholders. If you're in for some light reading, you
can take a look at that updated blueprint, which is, it's not terribly long. It's less than 50 pages.
But it's dense and technical, but interesting nonetheless, I think, if you want to read it.
Let's take a break here, and when we come back, we'll come back with our conversation with
Jenny Kavanagh at Cranfield Aerospace Solutions, as we talk about other new things in
development and coming to market. We'll be back with our conversation with Jenny. Stay with
us. We'll be right back.
[MUSIC PLAYING]
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[00:29:30] IP: Welcome back. We are now joined by Jenny Kavanagh, who is the Chief
Strategy Officer for Cranfield Aerospace Solutions. She is here to join us to talk about the newly
announced merger between Cranfield and Britten-Norman of Islander aircraft fame. Jenny,
thank you so much for joining the program.
[00:29:50] JK: Not a problem. Thank you for having me.
[00:29:52] IP: This is big news in a big way, because we've been hearing about development of
zero carbon emissions aircraft. We've been hearing about development of zero carbon
emissions propulsions project. But this merger is something that kind of, you've decided to say,
“Okay, let's bring it all under one roof.”
[00:30:13] JK: That's right. Yes.
[00:30:14] IP: Tell us more about the thought process behind why a merger? Why not just a
partnership or along the other lines that we've seen so far?
[00:30:21] JK: That's a good question. You can achieve a lot through partnerships. I think the
difference between a general partnership and a working with – general collaboration versus
actually merging, is that in both situations, you tend to have mutual interests. But if you really
want to galvanize yourselves around a common goal, and really drive towards achieving what
you want to achieve, every part of both of those businesses have to be pointed in the same
direction. You can't do that unless you are all the same company.
I'm talking everything from the support of the current Islander operators, all the way through to
the sales proposition, and the flexibility of offering for the new hydrogen aircraft in years to
come. All the way through to the sustainability of the supply chain, the decarbonization of
operations. You want to build yourself to be a sustainable aviation company. You can't do that
just through collaboration. You have to get serious.
When you're bringing a new hydrogen propulsion technology to market, of course, you can
retrofit aircraft. But increasingly, we were seeing two things coming from people we’re speaking
to, operators and investors. One was, first of all, how can you guarantee that production ramp
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up when you're two separate companies? If we are as successful as we want to be, we see
some significant ramp up of production happening.
If we are, again, pointed in the same direction, we're focusing on as one company producing
more aircraft, what do we need to do to invest to produce more aircraft to achieve our common
goal? Again, you can't do that through collaboration. You can only do it when you're under one
roof.
The second thing was, increasingly, the number of operators we were talking to, loved the idea
of the hydrogen propulsion. They loved the idea of the zero emissions. But when it really got
down to the nuts and bolts, they started to pause when they started to realize that actually, if
you've got one company that's retrofitting, and the other one providing the aircraft, what if
something goes wrong? How guaranteed is this retrofit that you're talking about? Where's the
OEM in all of this? What we will now – we are no unique in this space. What we will offer is an
OEM backed hydrogen propulsion solution, based on an existing aircraft that's proven in the
field, but backed up with OEM guarantees, after sales support, and a production line. I mean,
it's a perfect solution for us.
[00:32:56] IP: Let's take a step back and talk about what this goal actually is. Cranfield is
bringing the hydrogen propulsion solution, the development of that. Britten-Norman has been
building the Islander for – I mean, it feels like 100 years, but not quite that long. It's a venerable
aircraft. It's a wonderful aircraft that I've flown in more than once. I don't think there's any way to
describe than it's a hardy aircraft. It feels like you can fly it to, basically, anywhere that's a little
more than rocky. As long as there's a kind of a runway there, you can land an Islander there.
The Britten-Norman side is bringing the aircraft. Your Cranfield side is bringing the hydrogen
propulsion solution, and you'll soon be one company. The goal is to have a hydrogen powered
Islander available for sale by 2026. Right?
[00:33:45] JK: That's the first step goal. If we just take a step back and just understand what
Cranfield Aerospace’s ambitions are, just, I suppose, as a separate company, right?
[00:33:54] IP: Yes, absolutely.
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[00:33:55] JK: We are currently developing a hydrogen propulsion solution. But our ultimate
ambition is to be an airframer. We are an aircraft company. We are not a propulsion company.
We have an ultimate ambition to design and manufacture clean sheet, zero carbon aircraft,
going into the regional size eventually. With that ambition, for us, merging with an existing OEM
accelerates our ability to do that.
In terms of the common goal, the common goal for Britten-Norman, I know, at least, in the short
to medium term is absolutely what you said. Step one of that larger ambition of going to clean
sheet aircraft based around zero carbon technology is to prove the propulsion system
technology, to prove the certification routes, and also to prove the infrastructure, the airport, and
airline operations. That's why we started with a small aircraft like the Islander.
That common goal between us and Britten-Norman is very much focused on getting that initial
product into market, kick it all off, and really knock down some of these major challenges that
are in front of us, and in front of the rest of the industry trying to do this. But also, we will then be
looking at what comes next? How do we move ourselves towards that much bigger ambition?
How can we use the existing Britten-Norman product range to enable that, right? Does that help
answer the question?
[00:35:28] IP: Certainly. Where's the market for the Islander now and where do you want to take
the market with a zero emissions version of it? Then, you said you wanted to scale to regional
aircraft. I mean, there are no aircraft. How do you develop that market? And where do you see it
going over the next 5, 10, 15 years?
[00:35:47] JK: Oh, wow. That's two massive questions. Okay. The first question –
[00:35:50] IP: It really is, I'm sorry. We can take it one at a time, by all means.
[00:35:54] JK: The first question about the Islander. We chose the Islander aircraft extremely
carefully when we started doing this. We knew, because we spent the past 30 years doing
complex modifications to aircraft. We understand when you modify aircraft, especially this
significantly, you're going to have an impact on its key performance criteria. We also knew that
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the Islander people love it, because if it’s all just all capabilities, it's really short takeoff and
landing, and we didn't want to mess with that, and we're not messing with that.
Something had to give. We knew the range would be reduced. What we needed to do is find an
aircraft, actually, whose normal operation is in short hops, which is exactly what the Islander
does. Now, it can fly 1,200 kilometers, but the vast majority of its operators don't fly it for that.
They will fly it anywhere between two minutes and an hour. Mainly, you're talking 15 to 35
minutes is your usual legs for an Islander. Of course, once you've reduced the range by
introducing this new heavier technology. You're not affecting the operations that much, because
they already fly short hops.
The initial market will be certain Islander operations that exists today. Coasts, between coasts
and islands, and between islands, and those short routes that are less than 200 kilometers. To
be clear, it's 200 kilometers plus diversion requirements, so the operational range is 200
kilometers. We also see potential where at that distance, you're only really going to compete
with road and rail, if the alternative is either really poor, or it's not there at all. Where there is no
road and rail, A, water, or where there is a very poor ground infrastructure, or it's highly
congested, this is where this little aircraft can really serve a market.
For example, in very highly congested cities, when you can – like Los Angeles, for example, you
could fly from one end to the other on one of these little things, and not spend three hours sitting
in a car. We see the current operations, but also a little super commuter as being the main
market.
[00:38:11] IP: Looking at those markets, the benefits of having a zero emissions aircraft
operating on those extremely high frequency, but low time routes between islands, from coast to
islands, and things like that. That sounds really good. But then, one of the questions that comes
up immediately in my mind is, this is going to require new infrastructure on the ground.
Oftentimes, that's the most difficult part of the puzzle. Is that something that you're working on
as well, coming from an OEM saying, “We're going to have to help airports or airfields develop
this.” Or is that something that you're hoping comes along with the proposition that the aircraft
itself breaks?
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[00:38:55] JK: Generally, in my world of strategy, hope is not a great strategy. You have to take
destiny into your own hands to some extent. Having said that, we are a small company, and we
understand the real value in focus, and that you can't do everything. However, we are working
very closely with certain airports and operators to understand what they will actually need on the
ground to be able to bring these aircraft into service. We're not trying to create, currently, a one
solution fits all thing for these operators just yet, until we have really understood what the
operators and airports need. Because what we're starting to learn actually differs depending on
where the operator is, what their ambition for investment is. Also, not every airport has the
appetite to become a fuel producer, which is essentially what you're asking them to do, if they
have to put an electrolyzer on their airport and produce the hydrogen themselves. That comes
with a whole load of liabilities that airports aren't usually used to dealing with.
Some are very happy to do that, and we are talking to two airports at the moment who actually
see this production of hydrogen and the use of renewable energy to produce that hydrogen in
and around their airport, as a great opportunity to become energy independent. Of course,
where these aircraft fly, more often than not, are awash with renewable energy, or at least the
opportunity to be so. Island communities, tidal wave, sun, wind.
Yes, we are currently focusing very much on those operators and airports, who are showing a
real interest in wanting to be the launch customers or one of the first, and really understanding
what help they need. But we're also working with the Civil Aviation Authority in the UK, the fuel
assurance institutions around the standards and regulations as well, because airports cannot
plan what they need, from an infrastructure point of view if the standards or regulations aren't in
place. They don't know what safety zones, they have to assume. They don't know the rules and
regs around handling hydrogen, for example. We are very much at the forefront of those
conversations and driving that activity forward.
[00:41:27] IP: That’s really interesting to me. Thinking about the concept of going from an
energy transfer center where you're not having to deal with anything more than really storage,
and transitioning to an energy generation concept is – a very interesting way to put it and
something that I hadn't quite considered an airport necessarily viewing itself that way. I think
that's really interesting, that you're working with, not only the operators, but the airports as well,
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to navigate that transition. From the nine-seat Islander up to the stated ambition of a regional
aircraft, where's the stepladder to get there?
[00:42:08] JK: We have a four-phase strategy at the moment. We're in phase one at the
moment. Phase two is increasing the performance of the aircraft, so increasing the size, the
range, and switching to liquid hydrogen. Because hydrogen is great as a starting point, but
because it has to be carried in very highly pressurized tanks, if you get much bigger than a 9 to
12-seater aircraft, you're going to struggle making it commercially viable with gaseous,
especially working around a current airframe, right?
Liquid hydrogen is most definitely the solution that's going to decarbonize aviation. It's the only
technology that can be zero emissions, or zero carbon, at least in the larger aircraft. We want to
understand that. That's phase two. It'll probably still be a CS-23 aircraft. Still 19 seats and
below. As I said, we've got to work through with Britten-Norman on what we can do in terms of
their existing product line, or whether we can base it on one of those. TBD. We'll see.
Then, moving on from there, that's where we want to go into CS-25, in a 20 to 50-seat type of
size. We got our aerospace doing their 30-seater, but it's that ATR 42 type size aircraft. That
would be phase three and that's the first clean sheet. That's when we really start designing the
airframe to deal with hydrogen, because hydrogen propulsion has such a significant impact on
airframe design. The retrofit working around kerosene-based aircraft is only going to get you so
far, if you want to be really competitive in the long term. Then, we move on to the larger
regionals like your ATR 72, Dash 8 type sized aircraft. That's the stepladder from a technology
perspective.
[00:44:02] IP: I know that this is certainly not an exact answer or an exact science, but what's
the thinking on the timeline for those phases?
[00:44:10] JK: Thinking on the timeline is a later this decade, we want to be on phase two,
getting that out there, and then we're moving into the 2030s for phase three, and then beyond
2035 for phase four.
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[00:44:24] IP: That seems to align with some of the other efforts in hydrogen propulsion,
coming from the likes of Heart, from Airbus, is looking at certain things. Do you see this
coalescing at this point? I mean, I would say two, maybe three years ago, this was all over the
map. Maybe it'll work. This could work. This might work. But it seems to me over the last year
and especially in the last six months, it feels like things are solidifying as far as the thinking
around where these technologies are going to fall into place?
[00:45:02] JK: Yes. I think pretty much anybody who works in this sustainable aviation space
would agree that liquid hydrogen is most definitely the long-term solution. For larger aircraft, it's
most likely it will be combusted up to 100 seats, depending on its use case. Its mission will
depend on whether it's fuel cells or combustion. But essentially, the storage will be liquid
hydrogen, and then the propulsion system, the thrust will be either from a fuel cell, or from
busting it directly in an engine.
I think everybody agrees on that, and I think everybody also agrees that SAF needs to play its
part as well, but that you do need both. I think it is coalescing. I think the timeframes of around
the 2035 is where we'll see a real explosion if it does a really bad word to use in this context.
But I see a real flourishing of the technology starting to come to market around that mid-2030s
timescale.
[00:46:08] IP: I'm certainly looking forward to seeing what comes of all of this and starting to fly
on hydrogen powered aircraft. I think it's a very exciting time and very excited to see how things
go here. We've been talking with Jenny Kavanagh, who is the Chief Strategy Officer at Cranfield
Aerospace Solutions on their recent or recently announced and still ongoing merger with Britten-
Norman Aircraft. Jenny, thank you so much for chatting with us today.
[00:46:34] JK: Absolute pleasure. Lovely to talk to you.
[MUSIC PLAYING]
[00:46:41] IP: Welcome back. The steps from a nine-seat hydrogen powered Islander to a 100-
seat proper regional aircraft that's powered by hydrogen, I think is going to be some of the most
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interesting developments in aerospace, and to be around for that, I'm excited, and it feels like
it's actually real now.
[00:47:08] JR: It feels a whole lot more real than any electric powered aircraft that we've seen,
just because the technology and the energy density is so much further along than electric. I'm
more excited about it than SAFs. Let's put it that way.
[00:47:24] IP: I think that goes without saying.
[00:47:25] JR: Yes, but it had to be said, because SAF is so boring and not a real solution, by
and large, for the most part. But hydrogen is exciting. Still looking forward to seeing Airbus
power an A380 with it one day.
[00:47:39] IP: One day.
[00:47:40] JR: Soon, soon.
[00:47:42] IP: Okay, let's close out the show with some other product announcements and
orders, and we'll end the show on what I'm terming a sad note. But we'll get there when we get
there.
First things first, Air New Zealand has finally announced a little bit more detail on what's going
on with the Skynest. Finally coming, not until next year. I'm a little salty about that still. But I am
going to wait and hopefully try this out because it's coming to Air New Zealand flights from
Auckland to Chicago and New York. So, 16 and a half, 17 hours. You will get four hours in the
rack. You can only book it for one sleeping period per flight, per person. You cannot sleep in
there with anyone else. You got to be in there by yourself. It's going to cost you between four
and 600 New Zealand dollars, so $250 to $400 in the US. There's going to be a 30-minute break
between sleeping arrangements so that the staff can change out all of the bedding and refresh
the area for you. You're going to have a USB port, a reading light, special relaxation lights.
[00:49:02] JR: And an air vent. They specifically mentioned an air vent.
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[00:49:05] IP: I was going to get there.
[00:49:06] JR: It's not in the show notes. I couldn't be sure.
[00:49:08] IP: Oh, sorry. I left it out because I wanted to like make you feel good about it.
[00:49:13] JR: Well, the last time you put the last bullet point says, “Pilots will do a barrel roll to
get you out of bed.” That's probably not true. But I am excited to get the air vents, which is true.
[00:49:22] IP: Did I get that wrong?
[00:49:23] JR: You might have gotten it. I think it’s actually an aileron roll. There’s big
difference.
[00:49:28] IP: My apologies.
[00:49:29] JR: Yes. You got to get that right. You will get called out for getting that wrong. But
this is exciting. Four hours is longer than I would have thought. I guess the purchase fee for it
anywhere from $250 to $400 is not outrageous. I would probably pay on the lower end of that
250 to 300, because four hours is a decent amount of time on a flight that – how long is it?
Sixteen hours? Fifteen hours?
[00:49:56] IP: Sixteen and a half, 17 hours? Yes, something like that.
[00:49:59] JR: It’s a long flight. You're looking at, there's six of the beds, three on each side.
You'll probably get about a little under maybe 20 passengers getting the chance to use this per
flight, give or take. That's definitely going to be a first come first serve basis. I'm sure this will be
a hot seller and some passengers will get shut out of it.
But, man, at some point, the upgrade here between economy and premium economies, or
Skynest is going to become real close. But even in premium economy, you don't get that full
lying down bed experience. I like it. I'm not sure the price is totally right, 400. A $100 an hour to
lie down on a flight. I don't know. I don't know if I'd pay that.
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[00:50:45] IP: It'll be interesting to see how it works out and the changes they make based on
that.
[00:50:51] JR: And how many walk-up passengers they get. How many passengers are going
to preemptively do this before booking? How many passengers, eight hours into this flight, will
be so desperate to lie down, they will just hand the flight attendant their credit card and say,
“Charge me. I don't care what it is. I want a bed.”
[00:51:07] IP: Whatever it is. Can I get the rack rate?
[00:51:10] JR: Whatever the cost.
[00:51:11] IP: Yes, that's a really good question. I assume Air New Zealand is hoping for the
latter, they'll make more money on it. Speaking of Air New Zealand, Air New Zealand has
brought their last 777 out of storage. Home from California. They flew it from California,
hopscotched it across the Pacific to Singapore, where it's been for a month undergoing a D
check. That is over it is back in Auckland. They have all of their 777s back and ready to go.
[00:51:37] JR: All right, good stuff.
[00:51:39] IP: Recovery. A couple other order announcements that are worth noting, Philippine
Airlines has ordered nine A350-1000s. That puts its longest flights, which are those to the east
coast of the US back in it sites. That'll be interesting to see what new routes come about,
because of that order. China Airlines has exercised its options for eight 787-9s, though those
are also can possibly be converted to 787-10s if they so choose, so that'll be interesting to see
which way they go there. But those options have been exercised. Then, Airbus released its
order figures for the previous month, and the only interesting thing is that someone, we don't
know who, but someone bought an A330-800neo.
[00:52:31] JR: A private customer. Not an undisclosed customer. There were some other
undisclosed 320neo deals. But an A380-800 to a private customer. That's a very interesting
aircraft to pick up.
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[00:52:41] IP: A330, not A380.
[00:52:46] JR: I even typed that mistake earlier today. A330-800. I make that mistake because
it's just such a rare aircraft.
[00:52:52] IP: That would be something.
[00:52:53] JR: Yes, that would be something. But an A330-800 for a private customer, very
interesting aircraft type to pick up for ACJ. I don't know who. I guess we'll find out eventually.
[00:53:03] IP: We'll find out when they paint it. I wish it was me. That would be great. We close
the show with – it's not sad news to anyone, but av geeks.
[00:53:13] JR: Inevitable news.
[00:53:14] IP: It's inevitable news, for sure. Canadian North has retired i's last 737-200 combi
with the gravel kit.
[00:53:25] JR: That plane, historically, could land just about anywhere.
[00:53:30] IP: It could land, take off, do whatever you needed it to do. It was just fun to watch.
But that is officially gone now. They retired at the end of last week. It first flew – this particular
aircraft, the registration was C-G-D-P-A, and it first flew with Dome Petroleum in 1980, and
spent its entire life, interestingly enough, same registration, and obviously operating throughout
Canada for multiple Canadian airlines finally ending up with Canadian North, and it's now been
retired from Canadian North. The aircraft is – they retired them, basically, because they said,
“Well, it's kind of hard to maintain a 43-year-old plane, especially in the condition we need it,
because we need it to be able to go to unimproved runways and things like that.” Not only was it
becoming very difficult to service the engines, they said it was also becoming difficult to service
the gravel kit which I thought was interesting.
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[00:54:34] JR: It is interesting. Like you pointed out, there cannot be many aircraft, if any out
there in the world, that are 43 years old and have never had a registration change. That is
exceptionally rare, and it's not like this aircraft didn't change hands. It started with Dome
Petroleum went to Pacific Western Airlines, and Canadian Airlines, and Air Canada, and Canada
North, and somehow maintain that one registration its entire life. That is exceptional.
[00:55:02] IP: I was impressed by that. I was impressed by that.
[00:55:05] JR: Now, you'll just have to suffice for the 7300. Not quite the same.
[00:55:12] IP: Yes. The 733 and the ATR that they're operating.
[00:55:16] JR: They've got other 73s. They’ve got the 400 and the 700s.
[00:55:20] IP: They do.
[00:55:20] JR: Yes. Those are not class.
[00:55:20] IP: For this particular mission. They're replacing this particular aircraft and the other
737-200s with the ATRs operating where you would see –
[00:55:31] JR: It’s just not the same.
[00:55:34] IP: There have been 18 737-200 in operation around the world in the last month, and
most of those are in Canada. Nearly all. There's a couple in the US and there's one in South
Africa.
[00:55:54] JR: Yeah, got to wonder what happens with these off the beaten path airlines in the
future, when they cannot operate any of these 73 classics or 320ceos, where at some point,
their only option will be the next generation, not NG, but the newer generation engine aircraft,
the MAXs and the NEOs that, seemingly these days, if you look at them the wrong way, they'll
break. But they don't build them like they used to. They don't make airplanes like this that can
go anywhere and do anything.
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Man, 20, 30 years from now, I don't know what airlines like this will have in their fleet to operate
missions like this, because there's really nothing out there to replace a 737-200 with the gravel
kit.
[00:56:38] IP: Well, maybe it's time we started building our own airplanes.
[00:56:41] JR: Powered by hydrogen? Maybe? Sure. Why not?
[00:56:45] IP: Could be. Maybe. We're going to go figure that out and we'll leave this episode
here for our dear listeners. This has been Episode 215 of AvTalk. I am Ian Petchenik, here, as
always with –
[00:57:00] JR: Jason Rabinowitz. Thanks for listening.
[END]
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