Bombardier-Delta deal can put Boeing out of business, company claims

May 25, 2017, © Leeham Co.: Boeing says its very future, and that of US aerospace industry, is at risk if Bombardier’s deal with Delta Air Lines for 75 CS100s and 50 options is not fined for price dumping.

That’s the claim company officials made in testimony before the US International Trade Commission May 18.

Boeing filed a complaint with the ITC and the US Department of Commerce April 27, charging that Bombardier sold the CSeries to Delta for $19.6m, a price so far below production costs that it constitutes “dumping” under legal definitions.

Bombardier and Delta deny the price and Bombardier denies the over-arching dumping claims.

LNC reviewed the 290-page transcript of the May 18 hearing.

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Qantas’ ultra-long haul dream

By Bjorn Fehrm

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May 25, 2017, © Leeham Co.: The headline is taken from a Reuter’s article by Jamie Freed from April . We helped Freed to check if the Airbus A350-900ULR and Boeing 777-8 could fly the coveted Sydney-London distance direct.

The article says it’s possible, if it’s not too windy. Here we go a bit deeper into what’s involved.

Figure 1. Airbus photo of A350-900 test aircraft in formation.

The question is not if it’s possible. It’s about how many passengers can be carried for the two jets and if it’s economic at the seat count. We use our aircraft model to take a deeper look.

  • The direct distance Sydney-London is 9,200nm the shortest way.
  • On a windy day, this will extend to over 10,000nm air distance when going West.
  • Both the A350-900URL and 777-8 can trade passengers for fuel to fly longer.
  • We look at where the corner points are and where the trade stops giving us more range.

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Etihad Airways: where to now?

By Bjorn Fehrm

May 24, 2017, ©. Leeham Co: Etihad Airways appointed a new interim group CEO and CFO on 8th of May. The strategy of James Hogan, Etihad CEO since 2006, to grow the airline through partner alliances, coupled with minority investments, has hit trouble.

The latecomer to the Gulf carrier’s growth party is now set for a strategy review by an incoming CEO.We describe the background to the problems and go through the options for Etihad’s future. Read more

Delta shoots down Boeing’s CSeries dumping claim

May 23, 2017, © Leeham Co.: Delta Air Lines shot down Boeing’s claim that Bombardier “dumped” the CSeries order, in testimony last week before the US International Trade Commission.

Boeing filed a complaint April 27 that Bombardier sold the CS100 to Delta for $19.6m, well below its production cost, a price that constitutes “dumping.”

Bombardier CS100.

Boeing seeks tariffs of nearly 80% on the importation of the airplanes to Delta.

Boeing’s complaint is that the Delta deal made it impossible for Boeing to offer the 737-700 at a competitive price.

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Paris Air Show Preview

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May 22, 2017, © Leeham Co. The Paris Air Show begins June 17, and few in the industry expect much in the way of orders this year.

The order cycle is on the downward side of the bell curve. Sustaining the 2,000, 3,000 or nearly 4,000 gross orders announced 2011-2013 simply couldn’t be achieved. The “order bubble” had to break, and it did. Last year, Airbus and Boeing reported some 1,400 orders between them.

Airbus guides that it will tough to achieve a 1:1 book:bill this year. Boeing is running about 1:1 book:bill so far but it also guides conservatively. Still, LNC thinks Boeing might surprise this year–and some of this could be at the Paris Air Show.

Leeham Co.’s new publication, Commercial Aviation Report, provides a Focus Report on the Air Show. This encompasses the expectations for Airbus, Boeing, Bombardier, Embraer, COMAC, Irkut, Mitsubishi, CFM, GE Aviation, Pratt & Whitney and Rolls-Royce into one easy-to-read package.

The pre-airshow press briefings by the OEMs begin next week. We don’t expect any earth-shattering news from these and we wanted to get our views out ahead of these briefings.

  • Boeing wants to launch the 737-10 MAX at the Paris Air Show. This could spur a group of orders that would give Boeing a rare win in the headlines vs Airbus on the latter’s home ground.
  • Mitsubishi plans to have its MRJ90 at the Air Show. One airplane entered the paint shop for ANA colors–this might be the one making the appearance.
  • Embraer expects to have its KC-390 there. Will the E195-E2 also make an appearance?

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Pontifications: The pricing jigsaw puzzle

By Scott Hamilton

May 22, 2017, © Leeham Co.: The prices airlines and lessors pay for their airplane purchases have long been of intense interest to just about everybody associated with the airline industry.

The manufacturers want to know what their competitors are selling the planes for.

The airlines want to know what their competitors pay for their airplanes. The same is true for lessors and their competitors.

(Airlines are less interested in what the lessors pay; they are only interested in what they must pay the lessors to lease the airplanes, and aren’t really concerned about the lessors’ costs.)

Appraisers want to know the prices of new aircraft, and prices on the secondary market, to have a basis for predicting base and current market values today and 25 years in the future.

The credit rating agencies want to know that values of the airplanes to rate financing deals.

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Bjorn’s Corner: Keeping airliners operational. Part 5

By Bjorn Fehrm

May 19, 2017, ©. Leeham Co: Last week we described the different working groups and review committees and boards involved in defining a new airliner’s maintenance requirements.

We now continue with describing a practical maintenance task from the maintenance plan for a common aircraft, the Airbus A320.

Figure 1. The first modern maintenance program was formed around the Boeing 747. Source: Wikipedia.

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Regional aircraft for US Scope clause operations. Part 3.

By Bjorn Fehrm

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May 18, 2017, © Leeham Co.: In the second article about the US regional aircraft market, we looked at the cabins for the regional aircraft we examine. We started with looking at the typical classes and their seat ratios for the mainline aircraft the regional aircraft are feeding to/from. Then we mimicked that on the regional aircraft.

We filled the cabin with domestic First-class seats, then Premium economy and finally Economy until we got 76 seats or the cabin said stop.

Now we complete the picture by comparing the economics of the aircraft after which we summarize our findings.


  • The benchmark aircraft for the US scope clauses is the E175 from Embraer. It was designed for the scope clause market.
  • It’s larger dimensions means the operating costs are slightly higher than the CRJ900.
  • A scope clause-bound operator can compensate the Bombardier CRJ900’s tighter cabin with more seat pitch. It has the longest cabin of all compared aircraft.
  • The MRJ70 and CRJ700 are too short for scope clause flying with 76 seat cabins and the MRJ90 is too heavy for the 86,000lb maximum weight limit.

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Is Bombardier a stalking horse in Boeing complaint?


May 17, 2017 © Leeham Co.: Is Boeing’s complaint against Bombardier over the Delta

Delta Air Lines CS100.

Air Lines CSeries deal merely a stalking horse for future action against Airbus?

This is the theory of one person LNC spoke with on the sidelines Tuesday at the annual Airfinance Journal Conference in New York.

Testimony in the Bombardier case begins this week.

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Air industry uncertain about Trump policies

Adam Pilarski

May 17, 2017, © Leeham Co.: The US airline industry remains uncertain where the Trump Administration is going, said Adam Pilarski, chief economist of Avitas Aviation, at the annual Airfinance Journal conference in New York.

“There are huge differences  between candidate Trump and President Trump,” he said. China was  not declared a currency manipulator. There is no border wall. The US embassy has not been moved to Jerusalem.  Trump now supports ExIm Bank and NATO.

“Let’s not get too involved in what he said, because he didn’t mean it,” said Pilarski.

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