Odds and Ends: CSeries status; Airbus accident analysis; 737 rate increase; Kenya Air holds Boeing hostage

CSeries Status: Here is an interesting, detailed article from a blogger who follows the Bombardier CSeries more closely than anyone we can think of.

The article pretty well summarizes the issues, although we have this additional color: the fixes have been identified and are being installed and are still in Transport Canada review for approval and the green light to resume flight testing.

Airbus accident analysis: Airbus issued a study that looks at the causes of commercial accidents since 1958. The full report may be found here. The report is intentionally light on text and heavy on charts and graphics, so it’s easy to digest.

737 rate increase: Several media reported yesterday that Greg Smith, CFO of The Boeing Co., told an investors day Boeing is likely to decide this year on a production rate increase for the 737 line beyond the 47/mo previously announced to go into effect in 2017. Well, you read it here first–we reported more than a year ago Boeing was looking at a rate increase to 52/mo and even 60/mo. We’ve had in our estimates the 52/mo by 2018, 2019 or 2020, followed by 60 a year or two later.

Kenya Air: no more Boeings: We know some Airbus customers have long tied route authority to buying Airbus airplanes, and China is notorious for holding Airbus and Boeing orders hostage for political reasons. Kenya Airlines now says it won’t buy more Boeing aircraft unless it gets US route authority, according to this article.

20 Comments on “Odds and Ends: CSeries status; Airbus accident analysis; 737 rate increase; Kenya Air holds Boeing hostage

  1. 60 B737 a month? That is crazy. This is one reason I don’t believe that Airbus will maintain any quantifiable market share with its A320 over the B737 as some reader have suggested judging by the sales figure of the A320-NEO over the B737-MAX.
    The advantage in sales of one over the other will pretty much equalize over the next five years.

    • There is no doubt on the 737 orders from “unidentified customers” which stand at 869 for a total backlog of 3952 that is a uge 22% … does one know if this include all the MOU’s, commitments and other LOI’s … I do not have the same info from Airbus … is the percentage as high ???

  2. Scott, thanks for the update (blog) on the C-Series, I sincerely want the C-Series programme to succeed and I believe it will, given time.

    In my view, it’s in the best interests of a healthy aerospace industry and the flyng public to keep another option to the Airbus/Boeing duopoly to stem innovation, competitiveness and interest.

    Pour tous à Mirabel: Continue comme ça!

    • I too would like to see the C series succeed. All sentimentality aside, I think its a good aircraft with a good market area to work in with cutting edge engines.

      Its twisted to see Airbus laud how green they are and then try to force too big and heavy aircraft into routes so they can kill competition.

      I think it really will take off once they get through the startup issues.

  3. It seems the Airbus accident analysis is slanted widely in favor of what they define as Gen 4 aircraft, which they sell a lot of. Gen 4 aircraft have not been in service as long, or as many aircraft, as Gen 3 aircraft, which is more representative of the true accident rate. Gen 1 and many Gen 2 aircraft suffered from training difficulties of training pilots who flew piston powered aircraft to the much faster jet aircraft.
    But the accident rate for Gen 4 aircraft will only increase over time as their service and numbers begin to match Gen 3 aircraft. The next generation of commercial aircraft will be much safer than even today’s aircraft, but will suffer from the biggest accident cause that has plagued Gen 1 through 4, that is the human factor, pilot errors.

    • There is nothing slanted to see in that report.
      Do you have difficulties with what normalised numbers represent ;-?

    • The thing I find VERY strange is that there’s no airplane model made in Russia mentioned in that analysis where the different generation planes are mentioned – only western ones. How ridiculous is that?

  4. 737:
    If you don’t have the better aircraft, then you can try to out-produce the other guy and make your less capable machine more available.

    Its not like I-pads, open up another factor and make as many as the market wants.

    A bird in the air making revenue (or at leas the trying) is better than one 2 years down the line in a production que.

    I do wonder if the single aisle and the mid size twin aisle are not into too much capacity.

    Airbus will of course respond on the A320 series (if they can, the word seemed to be they were having supplier issues for a bit).

    120 potential single aisle a month?

    Adding up the 787/A330 and A350 we are looking at over 30 a month capaiblity.

    And natural gas is creeping in under the oil price floor and at some point there may be an oil crash as well which in turn……

    • ahem, that would be the argument for the A330NEO just as with the 737Max, correct?

      • “…ahem, that would be the argument for the A330NEO just as with the 737Max, correct?”

        Actually, that argument may not hold. No one is arguing that the specs of a 787-8 will not exceed those of a A330-800. But, the value of commercial Jetliners are not about “Specs” or “Gee-Whiz” high-tech Gee-Gaws: it is abut how much profit these Jetliners can help make for those who operate them. And, as far as “Profit” is concerned, there is reason to believe that the Airbus A330neo is more capable than the 787 of making a profit for its owners – and, hence, more desirable.

        Regardless, as a result of the introduction of the A330neo, the Boeing 787 will probably be under great pricing pressure, thus increasing the number that Boeing will have to build in order to break-even on production – and there are Billion$ and Billion$ for which Boeing must eventually claw back – if they can. Lockheed never “Clawed Back” what they lost on the L-1011, so I wouldn’t be a bit surprised that the same would be true for Boeing 787 since it is admitted that 1300 787 Deliveries ain’t gonna’ do the job as far as “Breakin’-Even” is concerned..

        On the other hand, the A320 is more desirable than the 737 – that’s a fact. Boeing has lost this battle so they may as well salvage what they can. But Airbus can also play the increased production game, too, and they can command a higher price as they do so. So…maybe there is another reason for Boeing to increase 737 Production to such high rates. Could it be that Boeing senses that decreased 777 deliveries are going to cause a cash-flow deficiency in the coming years? Does Boeing see the 787 Production costing them even more than they realized? Or Both?

        • Jimmy,

          The 787’s flying at the moment are saving airlines money thus increasing their profit. Pricing and availability are Boeing’s biggest problem with the the A330-800/900. Both of which it can’t do anything about. If your statement about the A330-800/900 were true, the 787 program would not have garnered any new orders at the FAS this summer. But since more 787’s were ordered and will continue to be ordered http://alkhaleej.ae/economics/page/36eb09ab-d609-4a6b-a1f9-58e68d194fed then your claims hold zero value.

          There is going to be no cash flow deficiency for the 777. That line is paid for and has been producing a steady cash flow for Boeing for a while. The deliveries might take a hit from 8.3 to 5.0 per month but nothing in terms of doom and gloom you’re referring to.

        • I think the point on the 777 is that if they go to 5 or 3 a month, then they loose the profits of the +4 or 5 more they had before and will not get now.

          Also a disruption factor on the assembly line as they transition gearing up for the 777X production. We saw how Boeing handled that in Charleston and the problems it cause. While no one gets held accountable, that too affect profits.

          There is no doubt that the 787 will produce profits some day. Its how far down the road and the impact on the 737RS. Between sales and the various options on the 787 its probably up past 1500. I know you can’t count the options but they do reflect what the future need looks to be.

          Of course just breaking even is not the goal and that keeps moving to the right.

          How they did the 787 reminds me of that Dallas (Miami?) game years back where they coined the term “they managed to snatch defeat from the jaws of victory”

        • There actually is no pricing pressure on 787 over the next couple of years.

          At the time of sale these frames already had been “lowballed” to achieve marketshare.
          Order to delivery started out at around 8 years and is, due to successfull early sales, still rising. ( with accumulated deliveries to end of 2014 Boeing wont have worked through the 2005 orderbook yet. )

  5. I reluctantly flew several times recently with Kenya Airways on what appeared to be well maintained 777’s on the LHR-NBO routing. Other than indiscernible deep African accent flight deck announcements that I imagine ATC would struggle with I was pleasantly surprised, the airline does well on cuisine, cabin service & punctuality stakes, successfully throwing off its third world image. The wheels fall off the operation immediately you arrive at NBO which is a full blown third world experience, but then that’s Africa.

    Kenya & Kenya Airways fortunately don’t hold much clout, holding Boeing & the US hostage with route demands likely won’t work. The question here is where do you draw the line, if the US caves in on this one the rest of Africa will worryingly follow with less capable operators than Kenya Airways.

  6. Are your refering to Kenya Airways in the article? You might need to correct the reference to ‘Kenya Airlines.’ Negotiations over direct flights between Kenya and the US are ongoing and a TSA team was in Nairobi recently to assess airport security.

    • Godfrey, I consider that Scott’s comments & the associated link article refers to Kenya airways & nothing similar.

  7. What I find puzzling, even troubling, is that according to FliegerFaust FTV1 has apparently not been repaired yet after three months!

  8. Interesting topic. If the we, the west, demand some guarantees in areas we feel are important or protecting our national interests, before granting export licenses, are we then sensible and responsible or taking other countries hostage? How objective are we really, judging others?

  9. Kenya Airways is tied to Boeing for the next 10-15 years with B777 and B787 as their large fleet. They are unlikely to be able to buy from Airbus until then.

    US flights are done via KLM (who own 26% ok KQ) at Amsterdam and that’s a bigger hurdle to clear, than an empty threat to Boeing

Leave a Reply

Your email address will not be published. Required fields are marked *