1. Design, Economic Competitiveness, and Profitability of a 2025 LNG Fueled Turboprop for the LNG Air Transportation System
J. Gibbs, B. Nagel

2. Contents What is LNG? Motivation & Previous Work Research Questions
Market Share/Profitability Assessment Process
Results
Conclusions

3. What is LNG? H H H C H H C C H C … H H H H H C C … H H H H H H
Liquefied version of natural gas, stored at cryogenic temperatures with cryogenic tanks
Less dense but also lighter than jet fuel (more energy containing, C-H bonds, fewer C-C bonds than encourage compactness)
Cheaper and fewer lifecycle emissions than Jet A for all GHG species
Fewer carbons per C-H bond  lower combustion CO2 per unit energy/unit of mechancial work
High combustion energy bond H H H C H H C C H C … H H H H H C C … H H H H H H

4. Motivation / Previous Work: 2009
Level 0 AC design and mission assessment
Level 1 price and emissions
Used average prices for production processes,
Used stoichiometric calculation for CO2 emissions,

5. Motivation / Previous Work: 2013
LNG Only
Jet A-1 Only
Full LNG Aircraft (New Aircraft)
Full Fuel Available Payload: 100%
LNG Fuel: % ?
NR Jet (Baseline)
2 Engine LNG (50% Retrofit)
Full Fuel Available Payload: 100%
LNG Fuel: 0%
Full Fuel Available Payload: 37%
LNG Fuel: 23%
Rigorous (level 2+) weight, cost, emissions and mission performance assessment
Establish relationships between design changes, ROI, emissions reduction per $ of investment
By accident, we found we can do this for an LNG aircraft without generating a new detailed design if a Jet A performance model is available

6. Motivation / Previous Work: 2013
LNG Only
Jet A-1 Only
Full LNG Aircraft (New Aircraft)
Full Fuel Available Payload: 100%
LNG Fuel: % ?
NR Jet (Baseline)
2 Engine LNG (50% Retrofit)
Full Fuel Available Payload: 100%
LNG Fuel: 0%
Full Fuel Available Payload: 37%
LNG Fuel: 23%

7. LNG Aircraft Design Changes
Almost no changes
Some changes (combustor retrofit)
Significant changes (composites rqd)

8. Research Questions
What are the likely manufacturer profitability and likely market share of an alternatively fueled new aircraft design?
What design sensitivities drive these numbers?
Mission Requirements
Design Goal (min Fuel burn or gross weight)
Generate Initial Geometry
Available Technology
Execute Design Loop
Conventional Design Process

9. Research Questions
What are the likely manufacturer profitability and likely market share of an alternatively fueled new aircraft design?
What design sensitivities drive these numbers?
Mission Requirements
Design Goal (min Fuel burn or gross weight)
Design Goal (max Market Share / IRR)
Generate Initial Geometry
Available Technology
Market Share/Profitability Assessment
Execute Design Loop
Design Process Modifications

10. Pre-Design Processes: Market Share/Profitability Assessment
Establish operating costs of competitors
2) Derive a market share assessment law (EIS, Opex)  examine the eco system
3) Take best guess for new aircraft (markish-model)
4) Determine pricing sensitivity and IRR scenarios

11. 1) Incumbents and Competitors
ATR 72 (31.96 orders / year), 68 seats, 275 knots, no stretch possible, EIS 1989 Average
Bombardier Q-400 (32.27 orders / year), seats, stretch possible, 360 knots, EIS 1999 44% better fuel max range, 24% higher acquisition cost,
Average 3 potential new entrants from India, China, South Korea

12. 2) Ecosystem

13. 3) Development Costs for new TP aircraft
New aircraft cost
Markish 777 Dev & MFG part cost breakdown
% Dev & MFG part effort
Raymer new aircraft R&D +
Boeing 777 share same cost part breakdown and non recurring costs per pound per part (no fixed cost)
Raymer/Dapca IV RTD&E Costs
(Does contain fixed costs)
Estimate Changes
LNG Aircraft Sub-system Development Effort Percentage of Jet A Subsystem Effort
LNG Turboprop Estimated Development Cost ($USD)
Baseline Jet A Turboprop development cost ($USD)
Wing
Empennage
Fuselage
Landing Gear
Installed Engine
Systems
Payloads
90%
100%
125%
25%
110%
$2,442,156,174
$2,081,008,647

14. 3) Manufacturing Cost Model
1st Unit Cost
Markish Learning Curve Assumptions
Nth Unit Cost

15. 3) Manufacturing Cost Model
1st Unit Cost
Markish Learning Curve Assumptions
Nth Unit Cost
Pick an average margin

16. 4) Pricing Sensitivity Customer break even
50-50 MFR/Customer split of econ benefits

17. 4) Pricing Sensitivity
5.7 % margin

18. Results for 5.7% mfr margin

19. Results: Operating cost differences vs. competitors
Operating Cost Reductions relative to Incumbent Turboprops (Q400 & ATR 72)
Older jet fueled turboprops with acquisition price discounts
New Q400 derivative Jet fuel Turboprop
New LNG Turboprop
5%-6%
5.1%
9%-15%
Operating Cost Advantages of a new LNG turboprop relative to future competitors
Older jet fueled turboprops with acquisition price discounts
New Q400 derivative Jet fuel Turboprop
Current Turboprops
3%-11%
4.9%-8.9%
9%-15%

20. Results: Profitability & Market Share Scenarios
Un-discounted profits
Manufacturing Profit Margin
Total # of Aircraft Built, Maximum Build Rates, Resulting Market Share
316 aircraft, 2.5 aircraft per month: 24% market share
630 aircraft, 5 aircraft per month,
47% market share
1005 aircraft, 8.3 aircraft per month, 75% market share
5.7% mfr margin (50-50 split of cost saving benefits between manufacturer and airline)
Not Profitable
$4,265,524,201.87
$7,818,669,957.21
20% mfr margin
$1,546,367,252.71
$7,729,047,300.75
$13,591,208,455.33
25% mfr margin (maximum for positive airline ROI)
$2,153,800,541.22
$8,940,069,363.29
$15,609,578,559.57
Actual market share depends on strength of actual competitive response
Market size allows for only 2-3 incumbents to all be profitable
Internal Rate of Return Grid
Manufacturing Profit Margin
Market Share, Total # of Aircraft Built & Maximum Build Rates
316 aircraft, 2.5 aircraft per month: 24% market share
630 aircraft, 5 aircraft per month,
47% market share
1005 aircraft, 8.3 aircraft per month, 75% market share
5.7% mfr margin (50-50 split of cost saving benefits between manufacturer and airline)
Not Profitable
9.3%
17.1%
20% mfr margin
4.5%
14.0%
21.8%
25% mfr margin (maximum for positive airline ROI)
5.9%
15.4%
23.2%

21. Results: Cashflow

22. Conclusions
What are the likely manufacturer profitability and likely market share of an alternatively fueled new aircraft design ?
What design sensitivities drive these numbers ?
With a 5.7% manufacturing margin, % IRR can be achieved vs. likely competitive responses
Lease financing is required
Infrastructure investment is 20% of required lease financing for to equip all commercial airports

23. Conclusions
What are the likely manufacturer profitability and likely market share of an alternatively fueled new aircraft design?
What design sensitivities drive these numbers?
Mission Requirements
Design Goal (min Fuel burn or gross weight)
Design Goal (max Market Share / IRR)
Generate Initial Geometry
Available Technology
Market Share/Profitability Assessment
Execute Design Loop
Can Generate Profitability Sensitivities for
Fuselage design
MFR margin
Infrastructure spend
Cruise speed …

24. Questions?

25. Backup Slides