Leeham News and Analysis
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Leeham News and Analysis
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LNC is off to the Paris Air Show
June 15, 2017, © Leeham Co.: Leeham News and Comment is off to the Paris Air Show.
Coverage will begin Sunday, with several events in advance of the show’s official opening Monday. We’ll be there through Thursday, with the end-of-show press conference by Airbus.
We provided a full preview May 22 for our paywall customers.
Here’s an update, in an abbreviated version:
Airbus
There may be a major personnel announcement at the show. Or there may not. This one has done back-and-forth.
We’re expecting at least a couple of hundred orders to be announced, which will give Airbus a major boost in its year-to-date orders race with Boeing.
But first thing Monday morning….
Boeing
…Boeing is expected to launch the 737 MAX 10 with orders from Lion Air, Spice Jet, China’s CDB Leasing and perhaps one or two more. Except for CDB, the key question will be whether the orders are truly incremental to Boeing or conversions of existing orders.
The MAX 10 is what Boeing should have launched in 2011, instead of the MAX 9. But you can’t un-ring that bell.
No NMA launch.
Bombardier
Nothing of consequence. The CS300 will be at the show.
Embraer
YTD, EMB’s order book has been disappointing. We’re looking for some catch-up here. The E195-E2 will be at the show. So will the new KC-390 MRTT military airplane.
Others
Don’t expect the COMAC C919 or Irkut MC-21 at the show. The C919 hasn’t flown since its first test flight and the MC-21 only just completed its second.
1) May 22nd? 2) The KC390 debuted last year at Farnborough. 3) Why wouldn’t BA bring the 787-10 to the show? Disappointing!
The 787-10 will be at the show.
I pegged this plane to prevail against the A359 on many routes and it may. It would be nice to see it there.
Interestingly Air Carraibes use a 3-4-3 economy layout on the A359 which the 787-10 cant compete with.
With the impending launch of the MAX-10, what are the future prospects for the -9? How many of these ‘orders’ will actually be existing customers upgauging from the -9?
As for the Airbus update; John Leahy going out with a bang? 🙂
Have fun guys.
Be great to see the a380-plus [with winglets] if images of that are floating about.
Hong Kong based CALC has announced a 50 plane MAX order, but hasn’t indicated the mix. Flightglobal indicating ‘mostly’ max8’s but could some be 10s, I guess we’ll know next week.
Qatar signed the F15 deal.
http://hotair.com/headlines/archives/2017/06/15/qatar-buys-u-s-f-15s-days-after-trump-accuses-country-of-funding-terror/
Looking very much forward to reports from you, been there a couple of times as guest, – it’s an amazing place. You will be amazed about the number of limosines, bodyguards etc.
You can feel in the air that this is big business going on, – very big!
I hear persistant rumors that Ryanair is launch customer for MAX10 – to my surprise. We will see – but I believe so.
What i am wondering is the turn around times – I have once tried to have a seat on one the last rows on a 757-300 – and it took ages before I was out.
200 seat aircraft need twin aisles for de/boarding and circulation in flight. Just like Boeing, Airbus will be launching a new light twin aisle in due time.
So Boeings problem is everyones problem ? I know GE had made a black art of gettings its problems to be shared around but not Boeing.
For small twin aisles, theres a good reason all the 767-200s and A310s disappeared from service yet the venerable 757 soldiers on. The primary reason is airline makers charge by the seat capacity and totally new planes have a lot of overhead on top of production costs
Correct. Boeing’s 757-300 is a problem. If Airbus sinks billions in a new one, it will be their problem.
Too much cargo space on the 767 or A310. The light twin aisle will beat the economy of the 787, A330, or A350, which are essentially half freighters.
I predict a Boeing 2-2-2. Airbus will respond with a slightly bigger and modified Al wing on a stretch A322. Then as the light twin gold rush becomes apparent, in five years they will launch an all new 2-3-2.
The problem for 2-3-2 seating in economy will always be adding one row for just one seat. For more aircraft for just one seat.
A new aircraft will not be about an optimized fuselage. It will be about a more efficient propulsion system. An optimized fuselage will suck against a 20 % more fuel efficient propulsion system.
Hello Airboe and Ted,
The Bloomberg article at the link below reports that Ryanair Chief Marketing Officer Kenny Jacobs said the following on Wednesday 6-14-17 about a possible Ryanair order for the 737-MAX 10 at the Paris Airshow this year, and about Ryanair’s interest in twin aisle aircraft or a “varied fleet”.
“Ryanair Holdings Plc is evaluating ordering bigger versions of Boeing Co.’s 737 single-aisle workhorse in a move aimed at boosting capacity on its longest routes, which could put additional pressure on rivals.
Europe’s largest discount airline is examining the business case for both the 737 Max 9 and Max 10, Chief Marketing Officer Kenny Jacobs said in an interview Wednesday. Dublin-based Ryanair has previously ordered only the 737-800 and its successor, the Max 8.
Buying bigger planes would allow Ryanair to increase capacity on its longest routes, such as Glasgow-Lanzarote or services to Israel, where the flying time limits aircraft utilization, Jacobs said at Bloomberg’s European headquarters in London. There’s no prospect of the carrier ordering the jets at next week’s Paris Air Show, he added, saying such a move would be premature.
“We’re a good customer of Boeing, and we will always talk to them about different models, including the Max 9 and 10,” Jacobs said. “A bigger aircraft wouldn’t change our operating model. It’s just that you can get more people on it and enhance the cost per unit. We’re not interested in having a varied fleet.”
Ryanair holds firm orders for 100 Max 200s — the high-density version of the Max 8 — plus the same number of options. While a Max 9 or 10 purchase could in theory come from converting some of those existing commitments, the airline intends to firm up its options as stipulated when the time comes, so that buying bigger planes would almost certainly entail a wholly new deal, Jacobs said.”
“Boeing, seeking a model to match the biggest Airbus narrow-body, is expected to commit to building the Max 10 at the Paris expo, which starts Monday. The model will likely seat between 220 and 230 people in a single-class layout suitable for Ryanair, compared with 197 on the Max 200, Jacobs said.
Ryanair said last month that it plans to add at least 47 737s to its fleet by March 2018, a 12 percent expansion. It has 30 orders still outstanding for 737-800 planes. After retiring older models, the carrier will have a fleet of 595 jets by 2024, assuming it converts all order options.
Still, Ryanair is unlikely to be a customer for Boeing’s so-called middle-of-market plane, which is slated to feature two aisles in an oval-shaped cabin. “It’s probably not on our radar,” Jacobs said. “Single-aisle will always be what we do.”
Reuters reported Tuesday that Ryanair might place an order for the 737 Max 10, citing people with knowledge of the matter who didn’t identify.”
https://www.bloomberg.com/news/articles/2017-06-14/ryanair-evaluates-buying-the-biggest-versions-of-boeing-s-737
Can anyone tell me why a MAX200 off a -8 is preferable to -9 with dense seating?
I suspect 737-10 will sell well but at the expense of the -9. Where Boeing should have been from day one. A lot of 737 clients will be very happy to see it arrive. I suspect a fair few upgrades and unspecified models going to the -10. The A321 still has its own market slot with longer range etc. As usual in narrow body Boeing and Airbus never quite seem to want to fill the same slot as their competitor.
Hello TransWorld,
For a route, or a collection of routes, for which you couldn’t often sell the tickets to fill the approximately 20 additional seats on the high density version of the -9 at a price that generated much profit, when operating the route at the optimal or desired frequency, a high density version of the -8 might be the more profitable than the -9 for that route or collection of routes. On competitive routes, an airline may not feel free to reduce frequency and use a larger plane because they believe that customers looking for a flight at a particular time will fly with a competitor if they do not offer a flight at that time. Money spent on a larger and heavier plane and additional fuel to move the larger and heavier plane around your route network, goes to waste if you can’t fill the additional seats at a price that generates profit.
Below is a real world example from a route that I am familiar with. This example involves airlines that use multi-class rather than high density seating, but I think that it still illustrates the general issue.
Looking at Expedia for a 7-17-17, a month from when I am writing this, I found 30 distinct non-stop flights offered for sale that day from Seattle to San Francisco International Airport. I only counted once flights that were listed multiple times under various code sharing agreements, and assigned them to the airline that was actually operating the flight. Southwest does not list their flights on Expedia, so their flights on this route are not included in this tally.
Following is the list of aircraft that were used for these flights.
E175 (4 flights)
717-200 (1 flight)
A319 (2 flights)
A320 (5 flights)
737-800 (7 flights)
737-900 (11 flights)
Following is the breakdown of flights by airline.
Alaska (8)
Delta or Delta Connection (8)
United (9)
Virgin (5)
Breakdown of Equipment by Airline
Alaska
737-800 (2)
737-900 (6)
Delta and Delta Connection
E175 (4)
717 (1)
A319 (1)
737-800 (1)
737-900 (1)
United
737-800 (4)
737-900 (4)
Virgin
A319 (1)
A320 (4)
Alaska airlines has 70 737-900’s or 900ER’s in its fleet, United has 148 737-900’s or 90o ER’s, and Delta has 79 737-900ER’s in its fleet.
Why did Alaska and United use a mix of 737-800’s and 737-900’s on this route, instead of all 900’s if the 900’s have a lower CASM when all seats are filled. I would submit that it is because at the times of day that a 737-800 was used, Alaska and United felt that a 737-800 could accommodate all the passengers that they could sell a profitable ticket to, or there were other places that that one of their 737-900’s could generate more profit at that time of day. Why not reduce frequency and use fewer larger aircraft with lower CASM? My guess would be that Alaska and United think that on a route like this with multiple flights leaving every hour during the peak time of the day, someone looking for a flight at a particular time will fly with a competitor if they do not offer a flight close to that time. I know that is how I bought tickets when flying this route. I lived about 80 miles north of the Seattle airport. Often times, I wanted to get off work and then fly out of town, or fly our of town early on the next morning. I would figure out what time I wanted to leave my house, then what time I would get to the airport, and then pick a flight that left around my desired departure time from the many choices available.
Delta with 79 737-900 ER’s uses one only once on this route on this day, one flight gets a 737-800, and the remaining 6 flights get much smaller aircraft with much higher CASM. Why not use larger aircraft with lower CASM flying less frequently? I would submit that it is because Delta is battling Alaska and United for market share on this route, and Delta believes that any time that there is an Alaska or United flight leaving and they do not have a competing flight, they will be losing market share to Alaska and United. Your market share in a time slot in which you do not offer a flight is zero. Delta would rather take away a 737-900ER full of passengers (180 seats) from Alaska and United at a particular departure time, but taking away an E175 full of passengers is better than taking away none, or flying an A320, 737-800 or 900ER from SEA to SFO with only 76 people on board.
Southwest who has a business model more similar to Ryanair than those of the airlines I mentioed above, also seems to feel that the 737-800 or -8 is a better fit to its route network than a 900 or -9, since it has yet to order a single -9 or 900 but has 497 -700’s and 151 -800’s in service.
I keep reading on this website how horribly uncomfortable 737’s are compared to A32X’s due to their having seats that are something like a half an inch narrower than the A320X family. Somehow, this has not prevented airlines that fly 737’s from having the largest market shares on this route, much larger than Virgin (now acquired by Alaska) which exclusively flies A319’s and A320’s.
I you have some time left visit the Café inside Printemps at Bd Haussmann.
Why? Use Google and look at the pictures.
P.S.
Maybe a good place for a relaxed interview.