When you think of air shows, you probably think of a warm summer day, some cool flying demonstrations to show off military might, and a few static displays of airplanes to walk through. That’s the core of any air show, but for the premier airshows in the world, that’s more of a side distraction than anything else. This week is the biennial Paris Air Show, and what you see happening in the air and on the ground is just fluff. This show is all about doing deals behind the scenes.

Paris and Farnborough (in the UK) take turns being the premier air show every other year. This year, it’s Paris. There are definitely some very cool flying demos, including the A380 (despite yet another wingtip mishap that almost scrubbed the flight) and a bunch of military flights as well. Why do they bother? They’re trying to get sales. Some airlines, aircraft manufacturers, and suppliers like to hold out to make a big splash at an air show with a big order.

This has never made sense to me. If I were ordering some airplanes, I’d rather tell the manufacturer to save all that wasted money thrown into air show displays and pass the savings along to me. But that’s not how it works. Instead, everyone goes and hangs out in the individual company “chalets” and has a grand old time. During leaner years, the smiles are few and far between, but so far we’re off to a hot start in Paris with almost 300 aircraft orders on the first day alone.

Take a look at some of the aircraft orders that have been announced so far. These are just aircraft orders. There are plenty of other deals with suppliers for a variety of other things as well.

• Air Lease, the new big aircraft lessor started by former ILFC chief Steven Udvar-Hazy signed up for 50 of the next generation Airbus A320neos with options for 11 more down the road. The company also ordered 20 Boeing 737-800s with 4 options, 11 Airbus A330s, 5 Boeing 777-300ERs, 5 Embraer 190s, 4 Boeing 787-9s, 1 lonely Airbus A321, and a partridge in a pear tree. All of these will be leased out to different airlines.
• Aircraft lessor GECAS ordered 60 of the Airbus A320neos. It also picked up 15 ATR 72 turboprops with 15 options along with 2 Embraer 190s. Rumor has it we can expect 2 Boeing 747-8 freighters to be ordered today. As with Air Lease, these will all be leased out.
• SAS out of Scandinavia ordered 30 of the Airbus A320neos and kept 11 options. SAS has struggled a lot lately, so hopefully they’re still around when it comes time to take delivery. These will replace the older MD-80s.
• Sriwijaya Air (say that three times fast) ordered 20 Embraer 190s to fly around Indonesia along with another 10 purchase rights. What’s the difference between a purchase right and an option? I have no clue.
• Kenya Airways ordered 10 Embraer 190s with options for 10 more.
• Bombardier picked up an order for 10 of its new C-Series airplanes with 6 options from a mystery buyer. This will be a launch customer. So who is it? We don’t know, but we do know that Bombardier says it’s a “major network carrier.” I’m eagerly awaiting news of who that might be, but I can’t imagine it’s a US-based airline.
• Boeing received one order for 15 of its 747-8s and another for two of the big birds. Who ordered them? It’s a secret. Again. While it wouldn’t surprise me if the two were for private owners, those 15 have to be for a major airline.
• Qatar Airways picked up 6 777-300ERs. It loves making noise at air shows.
• Saudi Arabian beefed up its A330 orderbook with four more.
• Almost lost in the shuffle, Air Astana out of Kazakhstan ordered 2 Embraer 190s with 2 options.

If you’re at Paris this week, enjoy all that drinking and schmoozing. If you’re here at home and you’re interested in this kind of stuff, I would recommend following Flightglobal. Those guys have put together some great coverage on what really is a pretty mundane subject for anyone outside the industry.

[Original photo via Flickr user slasher-fun/CC 2.0]

Let’s say you want to buy a single aisle airplane between 100 and 150 seats. Where do you go? If you’re that rich, you probably have someone take care of it for you, so where does that person go?

Right now, your choices are Boeing or Airbus. That’s it. And they’ve done a good job of competing against each other, but they continue to hem and haw on a replacement for their current offerings, which are getting a bit long in the tooth. That opens the door for another competitor to come in, assuming that they can actually pull off a meaningful improvement in efficiency. Bombardier’s C Series may have the best shot.

We’ve talked about the C Series here before, but after listening to Bombardier yesterday at the Regional Airline Association (RAA) 2010 convention in Milwaukee, I thought it was worth revisiting.

Chances are that you’ve been on a Bombardier airplane. They make the CRJ 50 seat jet, CRJ-700, and CRJ-900. They also make the Q400 turboprop. Now, they’re going upmarket again and looking at the 100-149 seat market, competing against Boeing and Airbus.

The plan right now is for two models. The CS100 will seat 100 people in a two class configuration while the CS300 will seat 120 in the same configuration (or 138 in the all coach configuration that Frontier will have). This will compete with Boeing’s 737-600/700 and the Airbus A318/A319. But why would someone stray from Boeing or Airbus to fill this need when they have to stick with them for the bigger narrowbodies?

Well, the Boeing and Airbus entries aren’t particularly compelling in this area. The A318 and 737-600 are slow sellers, primarily because when you shrink a plane, the economics just aren’t there. So Bombardier is going to tackle this segment head-on.

But the most compelling reason that this can work? If the numbers as promised hold up, then this plane will be a rock star. The airplane uses the Pratt & Whitney geared turbofan engine, something that they continue to claim will deliver a 20% reduction in fuel burn and 15% decrease in cash operating costs. That’s huge.

The plane will also be very comfortable as a passenger. Seats will be in a 2-3 across configuration and each seat will be about a half inch wider than on an Airbus and more than an inch wider than a 737. The overhead bins will be big enough to accommodate roller bags for 90% of the passengers onboard, which is ample room.

Sounds great, right? And with a first delivery in 2013, this plane will be years ahead of whatever Boeing and Airbus decide to do.

So why wouldn’t this be a complete rock star? Two reasons.

1) It needs to live up to its promises. Geared turbofans are complicated and it’s not clear that they’ll be able to reach the level of reliability that needs to be delivered. Also, we don’t know if the savings will be exactly as advertised, and we won’t know until the plane takes to the skies.

2) Who will fly it? This smaller airplane is undoubtedly something that legacy airlines would like to hand off to their regional partners, but there’s no union that’s going to allow that. This is a mainline airplane, but can they come to an agreement on who should fly it and for how much? Admittedly, this is less of an issue in my eyes, but it’s still an issue.

So far, the only order in the US is Republic (Frontier), which is fitting since they don’t have to worry about number two above. My guess is that if this plane performs as advertised, it’s going to be a strong seller. We’ll have to wait a couple of years before we know if it’s going to live up to its promises.

Republic, overlord of Frontier, Midwest, and a bunch of regional flying, made headlines last week by placing an order for 40 CS300 airplanes. These are the “C-Series” airplanes that Bombardier has been putting together to compete with the Boeing and Airbus narrowbodies. If it actually works as advertised, then that’s great news. But there’s a big “if” here. This order shows some confidence in the airplane, but more importantly, it also gives us some insight as to where Republic is taking its branded product.

For Republic, this was probably a pretty easy decision to make. The order for 40 planes with 138 seats each is worth $3.1 billion at list prices, but that means they probably paid $29.95. Like Airbus when it first tried to break into the US market, Bombardier must have been willing to give a sweetheart deal to anyone who would take a chance.

The C-Series is the first non-Boeing/Airbus airplane in the 100-150 seat category to get an order in the US since Douglas back in the day. So maybe it’s fitting that the interior of the cabin looks remarkably like the MD-80. Try to ignore the hilarious rainbow of colors strategically placed by Bombardier in this shot (Asian, black, white, Indian, young, old, bald, gray hair, blah, blah, blah) and you’ll see that it actually looks like a vast improvement over the MD-80:

The seating is 2×3 across, just as in the MD airplanes, but you can see that the windows are nice and big, and, most importantly, so are the overhead bins. They show roller bags being placed wheels-in, so these should be just like what you’ll find on a new 737 or A320, just with only one middle seat per row instead of two.

The other thing that isn’t like the MD-80 is that the engines are slung under the wings, so you won’t be stuck in row 32 staring at an engine casing. The engines are really what have the chance to make this thing succeed. After heading toward the junk heap of formerly important aviation-related companies, Pratt & Whitney has decided to make a comeback with its Geared Turbofan. This is a complex engine that has never been able to be produced reliably for commercial operations before. (They can do it for military.) Pratt thinks it will make it work, and that means a 20% reduction in fuel burn. If it works, that’s huge, and this airplane will fly long before Boeing or Airbus even get close with their next generation airplane. If not, well, this plane may not fly at all.

So what will Republic do with this? Well, the plan is to put them into service in the branded operation – that means Frontier and Midwest. They don’t have much of a choice here. If any airline decided to outsource its 138-seat flying requirements, then there would be an absolute revolt from the front lines. Most airlines don’t have the ability to do it now anyway.

In the branded world, they won’t say if it’s going to be a Frontier or a Midwest product, but let’s be honest. By the time these things show up in 2015, I’ll put money down there’s really only one brand left (if any, I suppose). But there are some clues in the press release about where they’re taking their product.

The airplane will be configured with 138 seats. The first five rows will be in STRETCH configuration with a few inches more legroom and nothing else. That tells me that Midwest’s Signature Service days are numbered. They’ll end up standardizing with STRETCH as the premium option.

Will these airplanes end up replacing the Airbus fleet? It wouldn’t surprise me if that happens one day, but the C-Series can’t really offer the A320-size capacity that Frontier might want to continue to have at the upper end. For what it’s worth, Republic says that no retirements are planned because of this. Well yeah, it’s still 5 years away.

To sum it up, the planes must have been really cheap, and they won’t be delivered for 5 years. Might as well get in on the action now with the hope that this thing works as advertised. If it doesn’t, then I’m sure they can just walk away. If not, then they’ll be in a good place.

If you think back 15 years ago, the 50 seat regional jet was the hot commodity. People seemed to be willing to pay for jet comfort over a turboprop, and airlines raced to add as many as they could. It’s pretty much been all downhill from there. United is the latest to shed more 50 seaters as it failed to renew a contract with Mesa for the 26 CRJs that they operate in United colors. It’s just going to keep getting worse, and the regional carriers are really going to suffer.

South Park fans know that while you can collect as many underpants as you want, it’s the magical second phase that leads to the third phase of profitability. We’ve now learned that buying 50 seat jets is not the second phase:

Independence Air learned the hard way that those little guys couldn’t just magically make money for them. ExpressJet also had troubles flying under their own name. Now it’s not that every 50 seater is unprofitable. It’s just that there are too many of them out there, so they end up flying in really dumb markets where they don’t make any money. That’s why airlines are racing to get rid of them as fast as they can.

Most passengers are glad to see those things go. While travelers hate the cramped sardine can that they encounter on the 50 seaters, they forget that they were complaining about props just before that. Now, props have become much more comfortable with the Q400 and the newest ATRs. And the 70 seat jets are much more spacious as well. Even the CRJ-700 has a bigger cabin with better aligned windows than the 50 seat version, so it’s a more pleasant flying experience.

Of course, the airlines aren’t too concerned about your flying experience but rather that these things burn money. So why not just ditch them? Well they all signed deals with regional carriers to fly them, and they’re just champing at the bit to get out of those deals.

Last week, SkyWest agreed to fly 50 seaters for AirTran, so it seems like someone is interested in these things right? Not really. Instead of AirTran taking all the risk as they would under a regular regional agreement, SkyWest is doing the flying at its own risk. AirTran simply gets to enjoy the benefits of shared revenue. That’s how bad the 50 seat market is. SkyWest, a fairly well run regional, has to resort to these types of deals just to get them in the air.

And now Mesa will be in the same boat since it will have 26 CRJs that used to fly for United sitting on the ground with nothing to do. Sucks to be them. Actually, it REALLY sucks to be Mesa. Little Mesa is currently sporting a $23 million market cap. That’s right. Sell a brand new 737, buy an entire airline. The airline already agreed with United to pull 10 Dash-8 turboprops out of the United system, so these combined reductions mean about a 25% reduction in aircraft flying and an 18% reduction in revenues. In fact, they say this in their Q2 2009 quarterly statement regarding the possible termination of United’s Dash-8 and CRJ leases:

In the absence of obtaining additional capital to fund our operations through equity or debt financings, asset sales, consensual restructuring of the aircraft leases, extend United CRJ-200 and Dash-8 flying, or placing the aircraft with another carrier pursuant to a revenue guarantee contract, our cash flows from operations and available working capital will be insufficient to meet our future capital requirements.

In other words, if we can’t find anyone to take these planes, it we can’t renegotiate with lessors, or if we can’t raise more cash, we’re in trouble. As if that’s not enough, they’ve also been trying to fight off Delta’s attempts to pull out airplanes for quite awhile now as well. Things are not looking rosy for Mesa at all.

This is just going to get worse for the 50 seat operators, and Mesa appears to be feeling it worse than anyone else right now.

Bombardier Kicks Off Farnborough by Launching the C-Series
Bombardier has talked about it for years, and now it’s official. The 110 to 130 seat C-Series has launched, and it’s promising massive fuel savings.

ExpressJet Ending Branded Service with Full Planes
ExpressJet may have announced the end of branded service, but those flights are flying full this summer, showing this may work one day with lower fuel costs.

Is US Airways “Intimidating” Its Pilots?
US Airways wants to use less fuel, so the airline is training its pilots to do just that. Is this stepping over the line?

Farnborough Order Counts
Farnborough Air Show is more than halfway through. That means it’s a good time to step back and see where the aircraft orders are coming from.

Delta To Keep Pinnacle Flying
Delaying entry into service of a handful of planes may have convinced Delta not to drop Pinnacle’s contract, but the reliability question still hangs in the air.