Pontifications: Read the fine print

By Scott Hamilton

June 26, 2017, © Leeham Co.:

Are the widebodies orders seeing some earlier-than-expected recovery?

Airbus and Boeing said they don’t expect to see a renewed demand for wide-bodied aircraft until around 2022, +/-. But Boeing certainly had stronger-than-expected orders at last week’s Paris Air Show.

  • Read the decision in the Boeing-Bombardier complaint. The document is at the end of this column.

The company received orders and commitments for 50 787s and six 777s.

Boeing said it expects new 777 Classic and 777X orders this year.

Read the fine print

While the numbers appear nice, it’s always important to read the fine print.

Three of the 787s were from a 2015 announcement/commitment from El Al Airlines.

Poor Airbus showing

Airbus, on the other hand, announced a new order for just two A330-200s, a commitment for eight A330-900s. It also announced an order for 10 A350-900s that previously had been posted under Unidentified customers.

Boeing bests Airbus

As we reported at the PAS last week, Boeing, propelled by the launch of the 737 MAX 10, handily won the orders race and headlines.

Read the fine print, again

As noted above, it’s always necessary to read the fine print.

Below are the respective Airbus and Boeing charts from the Air Show.

The Ethiopian Airlines A350-900 was a reveal of a previously Unidentified order. CDB Leasing converted 15 A320ceos to A321neos. Source: Airbus.

Click on image for a crisp view. Source: Boeing,

Boeing-Bombardier decision details

The US International Trade Commission last week issued the findings of its decision in favor of Boeing in its complaint Bombardier engaged in dumping the CSeries in its sale to Delta Air Lines.

The Paris Air Show overshadowed the decision. The 140-page document may be downloaded here: Boeing BBD decision June 2017.

54 Comments on “Pontifications: Read the fine print

  1. Many orders from leasing companies. Do they know something other don’t know, or do they inflate the asset bubble?

  2. Airlines response to the MAX10 is better that I anticipated. Where Airbus had an advantage with the A320/1 package the MAX8/10 combination seems to be much more competitive now.

    With Boeing’s capability to increase production this may result in them gaining significant ground over Airbus and also build the MoM.

    With the A330, where Airbus have “spare” production capacity, airlines and leasing companies appears to have lost interest?

    Looking at A330 fleet ages, of the 1300 delivered (very much rounded numbers), only ~200 is older than 15 years and 900 are 10 years old and newer. So replacements only really required from beyond 2025.

    If Boeing’s Mom is available from 2025 many of the these replacements could go the way of the MoM and/or 787 if Airbus does not “do something” other than the current A330NEO’s?

    B767 replacements are also likely to go the 787 way for airlines that need it before the MoM is available.

    • It was quite a surprise for everybody when the delays of the 787 triggered massive orders for the A330.
      Airlines are keeping their old 767s flying while they are waiting for the 797. When they learn that it will be available not before 2025 (all new engines, CFRP body and wings) and cost more than the A330-800 it is not unprobably that a similar scenario will unfold.

      • Personally I see more upside for an A330-200/800 size aircraft than the A330-900 which effectively competes with 787-9 and A350-900, it has however price on its side.

        For the A330-200/800 and can see potential with some of the following;
        1)A330-200 with new wing and current GE engines, low price.
        2)A33-800HGW, 245-250T MTOW with range of 8000+Nm and,
        3)A330-“200-Lite”, new wing, wing box, 50-60K-Lb GTF engines, 5000Nm.

          • While I don’t always get it, there is something about old tech that airlines don’t like. I am not sure its any whiz bang thing as most people have no clue what they are flying in, it has two engines (mostly) and it goes from A to B.

            A330-800NEO is dead, no interest other than Hawaiian Air.

            There is little interest being shown by other than the core customers on the A330-NEO (Delta and the shaky Air Asia)

            If Boeing had executed the 787 program the A330 would be gone and the A350, maybe a different aircraft .

            And oddly, the MAX-8 and MAX-10 look to be at least an equally competitive option with the A320 and A321 NEO.

            Still interested to see where the bellwether AK Airlines goes with the A321.

          • Previously the major difference between the A330-200 and -300 (apart from fuselage length)was the smaller model could use the centre wing box for fuel while the -300 couldnt.

            Now thats changed and newer model -300 HGW uses the extra fuel capacity( when required)

            When you are thinking ahead for the next 20 years, the extra passenger capacity is a no brainer and to me thats behind the lack of orders for the -200 and its neo brother the -800

        • The 787-10 is designed to kill the A330, we’ll see how well it works this time. Airbus is working on increasing MTOW on the A330-900 and I assume looking at a rewinged A330-300 Lite (Sport Leicht) with updated present Engine options that are lighter and cheaper than the Trent7000 hence making a MoM-MAX.

          • I am a big fan of the A330 from a passenger point if view, Airbus would also like to keep the production line going.

            Would rather focus efforts using the 350 fuselage. A weight reduced 350-900 with smaller/lighter wing, 7000Nm range with 70-75K-Lb ultra-fans will be in the long run a better investment for Airbus. It could compete with both the 787-9 (seat mile cost) and -10 (sector cost).

            In the environment I am in we call it WAP (walk away point), at some point you should stop “throwing good money after bad money”. Think the 330 is not far of that point as its actually coming from the A300 design which was launched at the PAS in 1969 with 1st aircraft delivered in 1974.

          • I actual have a “funny feel in my bones” that Airbus is waiting for Boeing to launch the MoM and within a year launch an ultra-modern NSA that could come into production after the current 320/1 Neo backlogs runs out?

            After that they will most likely launch the 330 replacement that will be more advanced that the 787 and even the “797”. At that point the 787 will already be >20 years old.

          • Thailand Airlines indicated they are planning to do a 30 aircraft order. Looks like they have older 777-200’s and -300’s and operating a relatively young fleet of 777-300ER’s and not so old 330-300’s.

            Looking at there routes many do not require very long ranges but capacity.

            This could be an interesting one, could see few extra -300ER’s, they have 350-900’s, 787-8&9’s or they are on order.

            If Airbus can’t sell 330-900’s to them and if Air Malaysia don’t take 330Neo’s the message will be clear on the 330Neo.

            I suspect that both airlines are looking hard at the B787-10 were range is not a big issue and won’t be surprized if it go the-10’s way?

            This is an example where my “new pet aircraft” (350-900 Lite/-“500”) would have stood a good chance, as is with Delta’s wide body order review, etc…

  3. Nothing wrong with being a proud American, indeed I commend it.

    But the A350 order book is full and the A320 order book is full. You can’t sell the goods if there are no goods to sell. Equally airlines can’t stop flying so they do need to buy something.

    The 737 is well past its sellby date. The 777X is timid and wrong. The 787-9 will sell on merit, but not the other versions.

    The 797 would restore Boeing’s reputation for best in class. What Boeing have said is bold and innovative. But they must follow through with what they have said. Best of luck to them, but expect Airbus to respond!

    • Yet the 737 keeps on selling and if the other 787s aren´t selling on merit what are they selling on? Blackmail, theats of violence?

      • Please, detail for us the wonderful recent sales figures of the 787-8 and 787-10. Please feel free to include a listing of all the recent 777x orders while you are at it.

      • @Geo

        As I said the A350 and A320 order book is full. The airlines can’t stop flying so they need to buy something.

        If Boeing launch the 797 the shoe will be on the other foot. Indeed Airbus could be subject to a wave of cancellations for the A321 putting a large hole in their order book. The A330neo won’t sell many anyway. The A321/A330neo is a second or third rate solution to the MOM market and Boeing know it. The 797 would kilI both. So as I said, best of luck to Boeing.

        • That conclusion is a little premature. We know so little of the cost and performance of the 797 that a prediction by how much it will outperform the A330NEO is very risky at best.
          1) the 797 will be significantly more expensive (in production, but probably also in its selling price)
          2) it will carry only narrow-body cargo, maybe half that of the -800
          3) it will have shorter reach (some airlines can make very good use of the versatility of the -800)
          So it boils down to the question how much lower the trip cost on these medium sized city-pair-routes really are compared to the NEO. They will certainly by a lot higher than the A321NEO on the thin routes.
          So we can speculate a lot now, but we will not know all this for the next 5 years or so.

          • This is a real “Cat-and-Mouse” situation. Seems Boeing is aiming the 797 as a peoples carrier with the city pair model and LCC’s concept in mind with very little emphasis on cargo. At some point the skies and airports are going to get very crowded.

            My loyalty leans towards Airbus but if I have to put on a Boeing cap I would consider to built a much lighter 787-X somewhere in size between the -8 and-9 with new wing, engines etc, range ~5000Nm. AND an NSA starting with the largest of a possible new family (~210/230seats). The MAX8 should be good for may years to come.

          • It certainly is, Anton. And this is just as it is supposed to be: Competitors developing different products that are in indirect competition. This gives the airlines the opportunity to pick the ones that suits their demand and try different and new strategies. It can only be good for the entire industry.
            I absolutely like the idea of the 797 and thing Boeing should go ahead with it, but you must know that no product comes with a built-in-warranty for big success.
            When I’m in charge of product management I hope to acchieve a rate of 50% of all new products to be a big success. If the other 50% cover their cost, that’s just fine. But you just can’t expect that every bullet hits the bull’s eye.

          • Lets be clear, the 787 has sold something like 1200 firm orders.

            It is no where near the end of its life.

            Unlike the A330 versions, its still selling. What A330 there is, based purely on low price.

            A bit question is where are all the 767s going? I seem them on a regular basis form ANA. So there is a low cost competitor for the A330. Talk about a bargain.

            Boeing issue was the hole in the 737 lineup and they plugged that amazingly enough.

            And people keep talking about the 797 and its high costs.

            If it works, its a relatively low cost and lower than an A330.

            That is the premise of the design.

            And airlines have no need to drop the 767s if the MOM is on the way. Low fuel prices ensure its viable.

            That does not mean its smooth sailing for Boeing, but right now with the new 737 mix, its opened up the 797 while holding their own in the 737 class.

            That in turn should free up Boeing management to make a launch decision.

            So the worm turned, Airbus is struggling with the A320NEO P&W engine launch and the A350 is not on track, The A330 NEO is way behind.

        • Hey philip – I find this comment interesting, because you proved what Geo said? Maybe I missed something?

          • First things 1st. Boeing needs to launch the “797” first, but which model/variant first?

            By 2025 all 757 produced will be older than 20 years and more than 80% percent of 767’s older than 20 years. Is the Mom not 5 years or so late?

            Will it be the smaller ~230 seats or ~270 seats or both at the same time? Is it going to have one wing and engine thrust for both?

            A significant portion of the 757 replacements have already been accounted for by the 321/MAX9-10.

            Can see Boeing is trying to engineer a MoM market, but its is a risk.

      • I’ll do another prediction. The 787-9 is 20-25% better than the 767. The 797 will be 40% than the 767.

        Boeing do need to do what they suggested at PAS and reported by the medi (FlightGlobal, Aviation Week, LNC etc.), but if they do then the A321/A330 won’t come close.

        What did Boeing say at PAS? Second generation carbon fuselage and wings. Not clear, but a carbon centre wing box – first time for anybody and a real weight saver, noting that both Boeing and Airbus have stated they have developed the technology. New wing and fuselage aerodynamics. New engines. Put it all together then at least 15% better than the 787-9, and likely more

        May be smoke and mirrors, but I don’t think so. Boeing want their reputation back, a reputation for innovation. Looking forward to seeing what really happens!

        • Hi

          Where. Will this massive improvement come from? Take away the engines (compare the A330neo to the B789 with Trent 1000 Ten) and the difference is relatively small. That is comparing CFRP to an aluminium airframe from over twenty years ago.

          So we gain 5% for the engine (0.5% per annum) and the balance will be coming from where? They may shave a bit of weight and improve some on the aerodynamics but there are limits IMHO

          • The first generation carbon designs are very conservative. An indication of that is Airbus increasing the MTW of the A350 to 280 tonnes without blinking. In contrast, they jumped through hoops increasing the MTW of the A330 to 242 tonnes, and they are having a nightmare with the regulators to increase it again to 245 tonnes. So weight wise, carbon airframes are in their infancy. It isn’t unreasonable to expect a further 5% to 10% reduction in weight relative to the 787.

            Then we come to high aspect ratio wings. Again, building them is in its infancy. It isn’t unreasonable to expect a 3-5% reduction in drag relative to the 787.

            Engines, RR are saying 10% not 5%

          • The center wing box on the 787 and A350s are Carbon

        • 767 is dead, dead, dead. Outdated allover.
          .. and the 787 is a bigger plane anyway bringing advantage of size.

          You really have to compare to current models.
          A330NEO is 0..2% behind the 789. It can be massively cheaper. A359 seems to have use cases with less fuel consumed for the same payload.

          ( So much for Boeing’s “wide spectrum advanced superframe” 🙂 What beyond engine improvements will bring major efficiency advances?
          Boeing only managed few ( and smallish) on the 787.

    • You seem overly zealous for a new plane. The 797 should be a 757-2X imo.
      The 777X will work on a robust proven platform with all new wings and engines amongst other things. The 787-10 and the 777-X both have reasonable order numbers given the poor overall demand for widebodies. The absense of a ln NMA to replace the 757/767 is not a reflection of widebody demand. And it wont be imo as I believe the NMA will be a 757 sized aircraft with significantly longer wingspan.

  4. Ah, Scott, were you planning to fill in the “Firm Order” and “Commitment” totals in the Airbus table above?

  5. “CDB Leasing converted 15 A320ceos to A321neos…” In fact, I think the table is correct: they had been A320Neos before conversion.

  6. Scott, hopefully you are going to summarise the BBD dumping complaint at some point? My blue collar brain finds the report extremely heavy going. An awful lot of gymnastics surrounding the scope, a direct threat to Airbus and words of comfort for the Chinese are the highlights I noticed.

    • No need to bother too much , Im sure Bombardier will appeal to whoever does these things and the first thing the judge will do is a ‘stay’ .

      Adding more to the methods they used was these paragraphs
      ” For this reason, it is not possible or instructive simply to compare the sales price of subject imported 100- to 150-seat LCA to the sales price of comparable domestically produced 100- to 150-seat LCA.
      Instead, we base our analysis of the likely price effects of subject imports on two sales campaigns that concluded during the period of investigation, in which Boeing and Bombardier participated”

      seems to be the United and Delta campaigns only.
      What is unusual is they arent just comparing the sticker prices in these 2 campaigns but the usual method of NPV which includes fuel
      & maintenance costs ( Which Bombardier would allways win on !)

      “Due to the complexity of 100- to 150-seat LCA and the numerous non-price factors that influence purchasing decisions, however, purchasers typically do not compare the up-front cost of acquiring competing aircraft but rather the NPV of competing offers from aircraft suppliers, which includes non-price factors such as fuel efficiency and maintenance costs.”

      A simple comparison is that in my home town there was a supermarket ‘bread war’, where a basic loaf of cut bread was offered at $1. Which is all good, but the immediate affect was that the higher priced loaves had big sales drops and the prices on those came down dramatically.

      Boeing is saying the low prices competing for big orders in US market is cutting its price for similar big orders _ I could imagine that Ryanair would be expecting the same cheap prices and O’Leary has been bashing Tinseath’s ear about it.

  7. ”The US International Trade Commission last week issued the findings of its decision in favor of Boeing in its complaint Bombardier engaged in dumping the CSeries in its sale to Delta Air Lines.”
    This is another reason to don’t like Trump Gouvernement. How much money Boeing receive from the US Gouvernement in military order? How many years Boeing didn’t pay taxes as Gouvernement help?
    Daddy Trump’s presence is devastating for future US economy.

    • While I agree its an abomination that Boeing pays no taxes, so far Trump has not sunk the economy.

      Mostly as a result of the resiliency of the American Institutions.

      Trump thought he was voted in King not President.

      If we are lucky, 4 years of being hog tied by his mistakes and we can do a reset.

      • The 330’s are under some real pressure. If they build something good at around 280 seats it could cannibalize A350 orders. Can’t see the A330NEO selling much beyond 500 units?

        Yes, and one of my stuck gramaphone views, they should have gone with the original A350-800. Maybe the new RR (“demonstrator”) engine could be the trigger for it, then the 787-9 will have real competition.

        Airbus must be working on something (I hope), a big surprize could be if the A321++ (322) is an all new single aisle to be build at Toulose?

        Keesje’s “Greenliner” comes to mind (1-2-1 in the front and 3-3 with wider aisle at the back). Around 220-240 seats with 40K-lb engines, medium haul (3000+Nm) leaving the ~200 seat and <3000Nm routes to the 321?

      • And then someone like Clinton will replace him and bring in industry crippling environmental regulations that will deter innovation and growth in the aviation sector. Cant wait. If she hasnt kicked the bucket by then..

        • Anton: The A350-800 was a simple shrink.

          As such it was heavy for the application.

          Ergo, not competitive.

          Market not there to make an A350-800 light.

          Ergo, fill in with A330NEO of which now there will not be an 800 either.

          • Hi Transworld. As far as I could make out the “original” A350-800 would have had its own centre section, wing, landing gear, etc.

          • The reason for cancelling the A350-800 can be found in the order books. Sales of the -900 were filling it real fast and the -1000 is also much sought after by airlines. So why build a less profitable -800 when all you can build can be sold at a higher price?
            The second reason was that it was a chance to make and sell the A330NEO. That is such a sweet cash-cow with all the production equipment long paid for and only minimal development cost for hanging a pair of (extremely well known) Trents.
            If some day the cash-cow dies and the production of the -900 and -1000 is running smooth, they can still return to the -800.

          • Airbus needs something new/competitive between the 321 and 350-900 and I am sad to say it is not the 330NEO in its current form.

            But I am really impressed with the 350-900/1000’s.

          • See Airbus had 182 orders for the 350-800 in 2008, then convinced customers to go for the -900, obviously intending to focus on the-1000 because of the 777X.

            Giving chance for the 787-9 to make inroads in the market, the 330Neo strategy seems not be successful.

            With an 797 on the horizon Airbus will have to do something in the 220-280 seat market, the A322 is low risk and relative low cost and will cover the lower end of this market.

            But they will have do something to take on the larger of the 797’s and 787-9, maybe two birds with one stone, but they should not wait for to long and it have to be something really good.

          • My understanding was it was a shorter -900 with no changes.

            Originally it may have been proposed as a lower weight with mods but in the end Airbus presented it as just a shrink.

            I do think I have that right.

          • You right Transworld, the “final” 350-800 was just a simple shrink, guess production line similarities the driver?

            I believe that the “787-9 market size” is big enough to build an aircraft specific for that especially with major 330 replacements starting to kick in from around 2025.

            Its just that the market perception of the 330Neo seems not to be good, I have numerous (mostly useless) ideas but Airbus needs something that at least can equal the 787-9.

            End of the day I think Airbus needs something between a 270 seat MoM and 290 seat 787-9. Range 6000-7500Nm?

            Ideally it should be something “new”, the 330’s fuselage section of 2-4-2 is near ideal and could be the basis. Maybe Al-Li alloy fuselage (777x-like), CFRP wing, GTF engines, call it the A335-200/300/X but not 330Neo.

          • Anton:

            All I can say is sometimes I am totally mystified by what seems obvious to me and decisions go another way and I wind up scratching my head (much less hair after so much of it)

            I don’t get the big orders on the Max-10. Is the A321 Range really not that important and getting more pax in the deal breaker and it did that?

            I saw the thing on how high price was in consideration. I would have it as mid to mid low. You get the price low, but you have to pay for fuel for the aircraft life, maint, support as long as you own it. Supposedly the main driver for the A330 and NEO.

            Last cart I got, Price was a factor and we got the base package, but it was the economics that was the main driver and the fact it tended to 300k+ miles without falling apart.

            I agree the MOM/797/A330 Market is really the high volume area.

            So it goes and I still scratch my head

          • Transworld my head scratching led me to a new pet aircraft. Basically a lighter, shorter range A350-900 (“350-500”) with new smaller wing and other weight savings, ultra-fan engines, sitting between the 787-9 and -10, to replace 330-300’s. Believe this is a realistic aircraft that could be commercially (very) viable enhancing the 350 family. Below a summary.

            Aircraft/Seating /OEW/MTOW/Wing Area/Range/Engines
            B787-9/ 290 /128 /255 /360 /8000 /71
            A330-900/300 /122 /242 /360 /6500 /72
            A350-900/315 /140 /280 /440 /9000 /84
            A350-500/320/ 125 /255 /380 /7000 /75

    • Talk about legislating from the bench. What new build plane from the ground up has not been highly discounted? This could have great repercussions through out the whole aerospace industry; or absolutely none at all…
      As an aside, T-The P-OTUS, ran on stopping the dumping of foreign steel into the United States, and essentially NOTHING has been done on that front.

      • This has been hashed plenty before, its not discounting a new plane ( which everyone does) but selling it for less in US than they are in home market

        • A market exists when two parties agree a price for supply of a product or service; if ‘no one is buying’ then obviously ‘no one is selling’. Was it not Adam Smith who observed that as soon as there are alternative sources, pretty soon the suppliers are in the coffee shop agreeing prices? Buyers should do the same. This is called freedom.
          Cost, price, value, and worth have different meanings. If Customer A in one country agrees to pay more than does Customer B in another country that is hardly the OEM’s fault, is it? Anyway, what’s Canadian for ‘America first, America only’? Or, as Flight International once asked many years ago, ‘What is American for “fait a l’etranger”?’

  8. TransWorld:
    “Lets be clear, the 787 has sold something like 1200 firm orders.
    It is no where near the end of its life.
    Unlike the A330 versions, its still selling. What A330 there is, based purely on low price. ”

    Let’s be clear: The first 787 were sold at very close to, if not at a loss. That leaves only 413 that have been sold at something resembling a reasonable money making price, unless one factors in the A330 NEO pricing pressure.

    • Ahh, fair and good point!

      But then don’t all mfgs sell at under cost to get the program going?

      What’ is particularly ironic is Boeing giving 787s away like hotcake initially (internationally not just locally^) and then accrusing BBD of dumping!

      Talk about Chutzpah.

      But there is a difference in early launching and mature and Airbus has admitted it can’t compete with the 787 on performance, so they are doing it on price.

      When price and performance collide, performance wins.

      Fuels saving keep on giving, price is a one time thing.

        • Hey Keesje, TransWorld and Scott:

          AM I READING now what I told you good folks a few years ago??? Just because you can do something does not mean you should, and now after a few billion being spent Airbus can now understand that the A330NEO was the worst thing they could have done to the entire industry. This ploy put Rolls in a world of hurt, and now there are issues with the 7000 engine. Meanwhile on the other side of the ocean, 787-8 004 has been flying for some time with the 1000s on its wings? And now the 787-10 is flying without any issue.

          By the way the 787-10 actually carries more passengers than the A350-900 but not as far.

          Your comparison also does not show where the A330 completion center in China is included?

          I’m going one step further, the 787-10 will have an ER in the 2025 range. When that hits the market, those customers currently flying the 787-9 will be looking to add the -10 for their route growth. So in 5-10 years you will see the next round of major 787 orders and that’s when the -10 will be the major winner. Airbus made a major error with the A330NEO because the program could not lead anywhere. Airlines are buying for a long term strategy and the A330 was DOA. Do you remember your baby the A321? It became important when route demand required addtional seats.

          Airbus do yourself a favor and kill the A330 program sooner rather than later.

          • As mentioned the n-th time the 330-200 is one of my favourites.

            But also somewhere today I said something similar to your comment/s. The 330 is at the Walk Away decision Point (WAP), don’t throw good money after bad money.

            Build the Airbus wide body short to medium term future around the 350 fuselage, have something smaller and lighter than the 350-900 ready (280 seats?) when the Ultra-Fan is available.

            Use Toulose to build the 322.

Leave a Reply

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