Top 10 Leeham News stories of 2016

 Dec. 15, 2016, © Leeham Co.: The story about a Boeing official who asserted that the Airbus widebody strategy is a “mess” proved to be LNC’s most read story of 2016.

Our second most-read story is why the 787-8 is no longer favored by Boeing.

We list our Top 10 posts each year as we head for a wrap. LNC plans to finish 2016 on Dec. 23, returning Jan. 3, unless there is major, breaking news.

Here are the Top 10 LNC posts in 2016:

Number 1

Boeing says Airbus widebody strategy is “a mess.

Dead on arrival? That’s what a Boeing official said about the Airbus A330neo. Airbus photo via Google images.

The Boeing official, who remained anonymous in our post, declared the Airbus widebody strategy is a “mess” and the A330neo is “dead on arrival.

The basis of his opinion is that the A330ceo is obsolete, the A330neo is not competitive with the 787, the A350-800 is dead, the A350-1000 is insufficiently competitive and the new 777X will have its sector all to itself.

Lessor CIT Aerospace, which ordered the A330neo, disputed the Boeing official. Read the story for full details. (Click on the headline in this, and all the other posts, for the link.)

Number 2

Why the 787-8 is no longer favored by Boeing.

The Boeing 787 broke new ground, but it’s no longer the favored airplane at the company. Photo via Google images.

In March, LNC editor Scott Hamilton Pontificated that Boeing no longer wanted to sell the 787-8. The hypothesis was simple: officials on earnings calls weren’t shy about saying the push was for the 787-9 and 787-10, which are more profitable, have more commonality and cheaper to build (on a relative basis) than the 787-8.

It was also a simple thing to see that the backlog for the -9/10 was growing and the -8 was shrinking. Except for Delta Air Lines, which probably will never take the 787-8, there are virtually no deliveries scheduled after 2020.

Boeing pushed back. Ted Reed, one of the writers for TheStreet.com, devoted a column to this subject after LNC published. Boeing called the 787-8 a “key component” to the 787 program.

Read both columns and look at the orders/deliveries. Then decide for yourself.

Number 3

Airbus’ new edginess.

When it came to conference blitzes and PR marketing, Boeing for years beat Airbus hands down. Aside from the perpetual barbs proffered by John Leahy, COO Customers for Airbus, and the occasional jab by Airbus execs Tom Enders and Fabrice Bregier, Boeing’s no-holds barred, aggressive attacks and spin clearly won the war of words.

In March, Airbus used some of Boeing’s own tactics to turn the tables, and it did so quite effectively.

Number 4

Airbus v Boeing on widebodies.

There wasn’t much to this post, but it ranked Number 4 last year in readership. We provided an illustrated look at the Boeing and Airbus wide-body product lines, along with some commentary.

Through November, Boeing captured 63% of the wide-body sales this year. (Neither the Boeing nor Airbus Iran Air deals are booked as firm contracts yet.) We’ve excluded 19 767-based KC-46A USAF tankers because, while on a commercial platform, this is a military airplane. If these are included, Boeing has a 67% sales share through November.

Number 5

IAG looking at leasing used A380s.

Few stories get more attention than any story involving the Airbus A380. It’s an airplane passengers love but which is forlorn by the world’s airlines.

It’s too big. It’s too expensive. But with the first A380s about to come off lease, maybe a used A380 leased in at a cheap price makes sense.

At least this is what Willie Walsh, CEO of the IAG Group (British Airways, Iberia, others) suggests.

Perhaps.

But so far there is no commitment.

Number 6

Middle of the Market or Mirage: Boeing’s lose-lose situation.

The Middle of the Market airplane (or MOMA, as we like to call it, and no, so far there isn’t a DADA), is a controversial concept. Basically, it’s a new 767-200ER/300ER. But is there a big enough market for it?

Good question, and Boeing is still struggling to figure this one out.

While LNC believes Boeing should do the airplane, due to its own product gap that extends to the 787-9 (not, as Boeing claims, the 787-8), there remains a lot of skepticism on “the street.”

Aerospace analysts don’t like the idea of Boeing committing $15bn to a new airplane. They want higher and higher dividends and larger and larger stock buybacks.

This article looks at what analysts said.

Number 7

Airbus A350 cockpit compared with the A320/A330.

LNC’s Bjorn Fehrm, a former fighter pilot, was invited to fly the Airbus A350. This post details his prep work, filled with pilot observations and technical detail.

He later repeated the process to fly the Bombardier CS300.

Number 8

Boeing has lost the neo/MAX battle; time to refocus goals.

This post, in April, really got the attention of Boeing employees in Longacres. And Airbus employees in Toulouse.

Airbus has a constant 55%-60% market share of the A320neo family vs the 737 MAX. The A321neo is just whipping Boeing’s 737-9, big time.

This post explains why Boeing should concede the market share battle and move on to designing a replacement for the 737 sooner rather than later.

Number 9

Boeing is back.

This post, in July, on the other hand, opined that “Boeing is back.”

How could there be two such seemingly divergent views within a space of three months?

Boeing was studying the MAX 10, the MOMA, the 777X and peeking into the prospect of a 777-10X.

It also revised the 737-7, a sales dud, to have 12 more seats, thus a more attractive airplane. (So far, this hasn’t prompted more than a handful of orders, however.)

The 787-10 was then just months away from going into assembly at the Charleston plant.

The 787 production problems were behind it. The MAX production was going smoothly. Except for the 787 deferred production and tooling costs, a lot of things were coming up roses.

Number 10

Airbus exploring higher capacity A350.

If the Airbus wide-body strategy was a mess, the company was considering doing something about it. A stretch of the A350-1000, by now called the -2000, was in active study. About the same size as the 777-9, Airbus isn’t (or wasn’t then) convinced there is a market big enough to justify a launch. Whether this program proceeds remains to be seen.

 

27 Comments on “Top 10 Leeham News stories of 2016

  1. No doubt Boeing still leading the effort / exploring the market and doing the hard work, however Airbus cleverly making use of their outcome by introducing new models / version on the right time.

    • yup. Airbus is nothing but a magic cauldron where you start with a Boeing four-color glossie, add some wringings from a juicy socialist jobs programme, give it a short simmer and then you can ladle out some competitive new type on demand.
      Just like that. :-())

    • I would agree that despite all the work Boeing is accomplishing on their LCA portfolio, it must nevertheless be hard being Boeing these days as they’re clearly behind the eight ball.

  2. “Boeing says Airbus widebody strategy is “a mess.””

    Airbus had this comment coming 😀

    Earlier A & B were lambasting each other portfolio’s, skewed seat cost graph’s, painful portfolio gaps and Leahy’s Singapore “Dog’s breakfast”.

  3. This one to me is right to the heart of the Industry:

    “Aerospace analysts don’t like the idea of Boeing committing $15bn to a new airplane. They want higher and higher dividends and larger and larger stock buybacks.”

    And just how in the blue blazes do they think someone got into the position to pay all those lucrative dividends and buy back? ”

    Obviously they don’t care, but what an insane short term outlook, and that is what drives them.

    • The stockholder always comes first. That’s why warmed over old airliners are popular, quick return to pacify the share holders.
      Boeing took a big step years ago in bringing the 787 to market. First new plane in years but production errors and very late EIS has them scared to bring a new model on line.
      Still waiting for an airliner with a speed of 750 mph and short field performance. It would signal truly the next generation airliner.

      • Guess how that worked out for the British. The Comet flew higher and faster than the later 707, oh and had better short field performance. Again with the VC10, better short field performance, the Concorde had advances too numerous to mention plus an upgrade which was ready to go into production which did away with afterburners.

        • That was then, this is now. Engine advancements have come a long way since then. The speed of all airliners is just about the same and has been for decades. Higher cruise speeds should be the next logical innovation.It should be possible to have a higher speed just under the speed of sound and what a selling point that would be for both airlines and passengers. Airlines would be able to fly more legs in a day and passengers would have to endure tight coach seating for a shorter time, some things will never change.

          • Steve you are talking about the Sonic Cruiser and the airlines weren’t interested.

          • last chance to order the 747-8I, the speed queen of the sky, any one?

          • not interested either. 🙂

            There are so many items fixable with higher effectivity before you gain from higher cruise speeds.
            A 30 minute taxi? What a hoot.
            Delays from congestion?
            direct path ATC.
            Fix dysfunctional airport infrastructure.
            Optimize commute to airports.

          • The sonic cruiser proposal was 15 years ago. I find it hard to believe that a 650mph airliner is out of reach. Most new models are warmed over old models as OEM’s fear venturing into new designs. The last new design that was a departure from the run of the mill frame was the 787, it ushered in using new materials and upgraded engine design. It also cost Boeing dearly by failing to execute the plan on time, so it seems OEM’s don’t have the moxie to build outside the box.
            After decades of jet travel, the speed stays the same. Kind of sad.

          • IMHO the 787 “newness” is mostly about introducing consumer style PR and homesteading existing technologies as “brand new … in a plastic airplane” into the professional/industrial domain.
            Very well executed ( again IMHO ).
            Every generation of new designs brought its innovations and some got additional innovations on the way. Only not with the observed amount of fanfare. 🙂

          • “Uwe”, ATC problems will continue to exist as long as the hub and spoke airports are with us. A higher cruise speed has nothing to do with airport congestion. Higher cruise speeds should be more easily attainable than the overhaul of the nations large hub airports.
            The reason airliners have been locked in the same speed for decades is partially due to OEM’s not wanting to go beyond current designs. If Boeing or Airbus embarked on a higher speed airliner, it would be the catalyst for change as the 787 forced Airbus to keep pace with the A350.

    • I expect the first flight of the A330-900 mess.

      I don’t expect any decisions soon about the A350-2000+ mess. Nice idea to keep costumers pondering instead of ordering 777X.

      The real fuel burn rate of the A330-900 might be a mess for another aircraft.

  4. The centre of Analysts’ focus in 2016 to my appraisal has been Leahy’s wondercraft, the A321LR NEO. This type is coming close to 7 hours flight time range capability or nearing 4,000 nm … What is missing out in the A321LR NEO praise buzz IMO is the impact of Crew Rest regulations upon aircraft outfitting. If arranged on MainDeck, an onboard CrewRest facility will confiscate three full rows or 18 Y-class seats. If arranged by way of two adjacent AKH containers, then the A321 will end up with only zero AKH containers to accomodate payfreight, as the full ten AKH are used as follows : 3 ACT + 2 CRC + 5 CIL. This leaves the aft bulk compartment as a remedy. Its volume is 208 cuft, but the accessing staircase from main deck confiscates two seatrows or 12 seats, a heavy penalty … Operators need to be aware that the A321LR offers no satisfactory solution to the Crew Rest dilemma arising from the otherwise successful LR capability

    • Did the 767 and A330 have crew rest areas for 7 hr flights ?
      You do know that the A350 flight crew rest area was an avionics bay area under the cockpit, so it doesnt have to take up hold areas.

      • 60 that have been made public afaics.
        ==
        30 Air Lease ( coming out for the LR )
        30 Norwegian ( conversions from their existing A320NEO order )

        Which type and if A321 LR or not can be a very late decision for customers.

    • I’m reverting to the topic of Crew Rest onboard a type A321LR narrowbody, whereof the payload-range characteristics makes it marginally eligible for the Chinese puzzle of lodging a Crew Rest area somewhere, preferably without impairing the revenue generation capability of the aircraft. One solution, as said earlier, could be to resort to the aft (bulk) hold, so as to leave main deck and the two container holds undisturbed if feasible … here the Designer shows a possible Crew Rest accomodation in the sister (concept) type, the H21QR’s bulk hold, featuring two bunks plus a couple of fauteuils, with a stair-case leading to main deck (impact = loss of two triples = 6 seats) :

      https://www.dropbox.com/home?preview=H21QR_bulk_CR_comp_alternative6_pers.ppt

  5. Re: article #2. I don’t think the LNC and TheStreet articles are necessarily contradictory.

    It’s definitely true that Boeing is de-emphasizing 787-8 sales for now. It’s a much less profitable plane to sell then the 787-9 (let alone the -10). If a lot of 787-8s made it into the 1,300 unit accounting block, it would probably force Boeing to take a reach-forward loss. By concentrating on delivering a nice mix of -9s and -10s over the next six years, Boeing should be able to work through the deferred production balance (or at least most of it). It has enough of a backlog that finding enough orders for those two models shouldn’t be a problem.

    Looking out past 2022, I think Boeing will become a lot more interested in selling the 787-8 again. Production costs will have come down by a lot and Boeing will need orders to keep the line going, even if they are not nearly as profitable as -9 or -10 orders.

    Anyway, that’s my theory about what’s been going on.

    • There is nothing bringing down 788 production cost.
      788 and 789/10 are 85+% of parts apart.
      ( Then I doubt that there are “787 size quantum leaps” i.e. even small steps available in further cost reductions. leaning on suppliers is probably the most effective path open. But for a heavy handed bunch that could turn into a dangerous proposition.)

    • I was just reading that WSJ piece a few minutes ago. Hope this isn’t more than a minor wobble!

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