By Bjorn Fehrm
January 15, 2018, ©. Leeham Co: Airbus announced record 2017 airliner deliveries of 718 aircraft today. It was the 15th consecutive year of increased production, this time with 30 aircraft over 2016. Fabrice Bregier, the Chief Operating Officer of Airbus, predicted Airbus would pass Boeing in deliveries by 2020.
The company also booked its third best year in orders, with 1,109 aircraft giving a Book-to-Bill of 1.5. The backlog is at a record 7,256 aircraft (Figure 1).
Airbus’s better than expected year
The market had Airbus just passing 700 delivered aircraft for 2017, with over 1,000 sales. The delivery of 718 aircraft was, therefore, an overachievement compared with expectations, as was net orders of 1,109 aircraft.
The driver for both numbers is the A320 series, with 588 total deliveries whereof 181 A320neo compared with a plan of 200. The shortfall could be compensated with deliveries of 377 A320ceo. Net orders for the type was a record 1054.
Historically, Airbus was leading the delivery race while Boeing ramped the 787 programs, Figure 2.
Once the 787 got running, Boeing’s combined single-aisle and widebody deliveries have left Airbus behind for the last five years. Bregier predicted this will change by 2020 when Airbus has ramped the A350 to 10 deliveries per month.
Orders have outpaced Boeing for nine of the last 10 years, Figure 3. Once again the A320 program makes the difference, with Airbus winning 53% of all orders during the period.
John Leahy, Airbus COO Customers, said Airbus’ single-aisle A320 has outsold Boeing’s 737 with 54% of total orders during this period, Figure 4.
Leahy rejected the notion Boeing has outsold Airbus on the widebody side. He said widebody sales go up and down over the years. Taken over the last 10 years, the widebody orders have been even, with Airbus outselling Boeing seven of the 10 years, Figure 5.
A320
Deliveries of 558 A320 have been possible, despite a shortage of engines for the A320neo. About 30 of the 60 parked A320neo “gliders” from 2016 could be equipped with engines and delivered. A321ceo and neo deliveries were 35% of the total A320 deliveries during 2017.
For 2018 Bregier predicted A320neos would be two-thirds of over 600 A320 deliveries. He gave the precaution, there must be no continued shortage of engines for this to happen.
A330
Last year was a transition year for A330, with the ceo version delivering 67 aircraft. The neo version starting flight test in October, about six months later than planned. Certification and first delivery to TAP Portugal of the A330-900 is planned for summer 2018.
A350
Airbus delivered 78 A350-900 which was about halfway to an expected 100 deliveries for 2018 (from 49 for 2016). Production rate shall have reached 10/month by end 2018. The A350-1000 was certified in December, but as expected the foreseen 2017 delivery of the first aircraft to Qatar Airways was pushed into 2018.
A380
Leahy and Bregier delivered a strong message to Emirates in the press conference. If there would be no new Emirates orders keeping the production rate over a minimum of six per year until 2030, Airbus would stop the program. From 2030 Airbus expect an expanding passenger market would need the A380.
Deliveries for 2017 was 15, with 12 planned for 2018 and eight for 2019.
“From 2020 it would be possible to keep the program running with an acceptable industrial result at a minimum rate of six aircraft per year,” said Bregier. “The orders for these aircraft would have to come from Emirates, as other airline orders would be marginal,” Breigier warned about giving cooperation talks with China around A380 too much weight.
It’s not really about the “race” to deliver … it’s building a quality product. Sometimes I think they forget this.
Who are “they”?
.
Are you implying that Airbus forget quality and Boeing do not in the race to deliver?
I see quite a few AD’s for Boeing where production was not in agreement with the defined process.
Jeff D: Pure nonsense
Dear @> “Jeff D” –
Apparently (1 year after your comment) 2 (TWO) NEW BOEING 737s CRASHED (347 dead passengers) and BOEING got “AD’d” which resulted in a WORLDWIDE FLIGHT BAN of the BOEING type, costing airlines huge amount of $$$$$ in inactive assets and lost revenue + costly employee confusion, not to mention PASSENGER TRAUMA. The worst is long-term loss of competitiveness for those airlines, which will stick to passengers for 20 years or throughout life.
*** “If its a BOEING – I’m NOT GOING” ***
There was always a HUGE difference between EU manufacturing standards/Employee awareness – and US-made (compare “MERCEDES and a FORD”)
Neglect of build quality is as important as the quality in build safety. I’m sure they both are taken seriously. Both company’s produce stunning super safe aircraft and I do enjoy watching the competition. Order book tallies don’t mean a lot its just safe jobs and safe flying. keep up the good work Boeing / Airbus its exciting.
Good news to see improvements with deliveries.
Backlog with the NEO’s increasing due to bumper year-end orders and still problems wiht PW-GTF’s.
CFM must also feel increasing pressure with big backlogs in MAX and NEO orders which made me think, is/was there not room for a third engine supplier if this was foreseen?
If the 322 happens and it is a significant departure from the 321 (110-115T Mtow for example) could RR coming into play with a larger fanned (85″-90″) UF-engine with median thrust around 40Klb (35-45Klb) for future large single aisles and smaller twin aisles?
The A322 depends on the hurry Airbus is in. Either go for a minor payload/range/pax/cargo increase with 4 more rows of pax and PW1135G and maybe a corresponding LEAP-1A35 Engines with new Composite wingbox and wing or wait for the Boeing 797 to be defined and its 40-50k Engines becomes available for the A323.
I would push PWA and CFMI hard for 35k demo Engines and run them really hard on A321neo flight test Aircrafts to verify it has the Required reliability, compability be be installed on the A321neo and life, then go ahead and launch the A322 with new composite wing, 4 rows more pax and A321ULR range with fuel in the wings instead of aux tanks. Increase selling price to get a suitable production volume until the 797 is starting to compete then lower price and increase the number of FAL’s producing it. By that time Airbus will know how the 797 will look and cost and can decide to design their response requiring a new RR Ultrafan 40-50k Engine knowing the A322 takes a good bite on the lower end of the MoM market. By Farnborogh we will see.
The A322 that you describe could, without a centre tank high, MTOW or pesky OBIGGS system, bite into and hold onto a large chunk of the short/medium range A321-Neo and 738-8/9/10 max markets.
With additional fuel in auxiliary tanks it could also eat further into the projected NMA market.
If you’re doing a composite wing, why not a composite fuselage?
Because it would be too heavy
I think cost, time and certification requirements makes a CFRP fuselage on a A322 not feasible, changing alloy to Al-Li might be doable if customers push for it (lighter, stronger, more corrosion resistant and fits friction stirr welding well avoiding a few thousands of rivets). Airbus got EU money to develop a new composite wingbox and that fits well a new optimized CFRP wing. The question is if a new 35k PW and CFMI engines are of similar mass or quite a bit heaver making installation onto the present A321neo a hassel assuming they fit under the present wing with one or two inches increased fan diameter.
Because it would then be a new aircraft with all the costs/risks that entails.
What risk? Sooner or later the Airbus narrowbody range is going to have to embrace more modern materials and construction methods. A new fuselage for an A322 would feed back to the current existing narrowbodies. Not necessarily true of a long range wing.
Developing a new wing for an A322 – lots of fuel, a new gear to increase clearance to make room for a new and wider engine – won’t(necessarily) feed back into the existing line up, and development costs cannot be spread across so many other aircraft.
So wouldn’t a better strategy be to develop a new fuselage for the A322 and all the other narrowbodies, and a new wing for the A322?
Getting bored repeating myself, can see the next stage in the 320-family as evolutionary with relatively low cost/risk with wing tweaks/mods of the current 320/321/LR and 2nd generation PW-GTF engines. This could theoretically improve range/fuel burn by 2-5%?
AB is at the cross roads with the “322” and in danger of falling in the “pig-with-lipstick, band-aid, panel beating”, potholes/traps.
Think most is in agreement it should be a 3m to 4m stretch (48m) of the 321 with CFRP wing increased, fuel capacity, etc.
But are airlines buying the 339 vs the 789? No. Why? Perception of an old design (“mutton dressed up like lamb”), and also seems the “lower price” is not a reality.
In the event 322 is a “band-aid” option airlines will go for the “797” except if it has significant Opex advantages and/or VERY significant Capex benefits.
So, the A322 should basically be a large NSA with Li-Al fuselage, CFRP wing, new nose section and cockpit (CS) with next generation engines.
And give it a new name, superstition about 360, 370 etc.
Maybe call the 321 stretch (“322”) the 325-1000, and smaller versions, 325-900/800/etc.
Was wondering what would have happened if the 330NEO’s was called the 335-800/900 for example. A total new perception?
Anton:
I think the A321 has one more good move in its quiver.
I don’t think it can compete head up with a NMA (if they can make that aircraft)
But as a move to pick at the lower end of NMA, I think it would work.
PIP II GTF of the same size, new wing, stretch a bit or not (ghat gets into a tech area I am not remotely qualified to assess) .
As we have seen with the far more dated 737 Architecture, there just has not been enough significant improvements in all the relevant fields ghat makes even that beloved but old dog put out to retirement.
Its going to take a real configurations leap to change that.
TBW and a major new GTF?
My feel is that the current 320/321/(LR)’s are worth a tweak. With a stretch, new wing, etc. cost could be escalating and you still sit with an perceived “old” aircraft.
Before the 320’s goes down that slippery slope build the “stretch” but make it an 32X NSA along the lines of the 777X formula. It should not cost an arm and a leg more than all that is involved with a stretch with new wing etc.
Give it a decent wing and fuel capacity to carry 200-220 pax 4500-5000Nm.
@Chris Lee: if you do a new wing, fueselage and engine, you do a new airplane.
So Airbus would built a new airplane in a niche they say is not big enough for NMA and pushing a 2nd program in? Doesn’t make sense.
Same for Cleas statement about A323.
NMA doen’t have a engine. 150kn for SA, 300kn for widebodies.
What a business case will a 4 row stretch and a new wings make?
Either Airbus is going for a real stretch, A321 + 5m (about 50m) to make a real plane with a new wing.
Or Airbus is just going for a minor stretch (4 rows, to maybe 47m) keeping the wing and do some minor twerks.
I don’t think Airbus want to do an A323 unless forced by the 797 cost/performance/size, alot of thing depends on its new engines performance.
An A322 stretch most likely match increased numbers of LD3’s of 60.4″ or 154cm length. Hence 2 rows, so one stretch fore and one after the wingbox with 4-wheel boogies with aft rotation point like the new 737-10 MLG. A new carbon wingbox can make room for a longer MLG giving higher rotating angle. A new carbon wing will be more efficient, carry more fuel and make space for 2″-4″ bigger engines. The APU might need a boost due increased pax, the skin thickness increased locally due higher moment loads, the tail and elevators might be chopped a little due to longer moment arm. It will look like a twin engine DC-8-63 from the 2000’s. The 797 will be of another generation, size, engines, cost and range.
Sash – “So Airbus would built a new airplane in a niche they say is not big enough for NMA and pushing a 2nd program in.”
You mis-understand – if the niche for the A322 is not big enough, then the development is de-risked if the work is applicable to the existing line up. The A322 wing won’t be applicable, but a new A322 fuselage could be.
If the A322 is a disaster, then the work on the fuselage would not have been wasted.
If the 797 is a narrowbody, then the A322 likely will be a disaster unless its a substantially new aeroplane. If the 797 is a widebody, then a substantially new A322 would likely kill it.
claes – IIRC, Indian early-model A320s had/have four-wheel bogies: is there already space for a longer MLG?
Anton: In reality there are something like 5 to 7 engine suppliers .
GE and Safran and the P&W has MTU and two or three Japanese engine maker contributors.
RR has orphaned itself from the market and is the only significant engine mfg in the world (sorry Russia and China) that is left un-involved ).
They seem to have enough problems with what they have right now.
I think RR made a careful selection. Do they want to compete head on against LEAP and PW1000G lowering prizes for everyone or focus on bigger engines after PW kind of shoot themselves in their feet. RR get higher margins on the widebodies both in sales and Total care agreements, still RR miss some high volume production and MRO on 25-33k engines but they have their hands full now to deliver Trent engines in higher speed as they are thru development efforts for T-XWB-97, T1000-TEN. I assume they are gung-ho to get onto the 797 with both BA and Virgin seeing government pressure to be launch customers and select RR engines.
“BA and Virgin seeing government pressure to be launch customers “??????
Stranger things have happened,I suppose.
There is no 797 yet and it would likely get a GE engine only as thats the way Boeing operates now.
I have to disagree.
I think Boeing has to offer two engines for the 797.
The new single aisle, maybe a single engine (and maybe even PW GTF .
@TW while anybody would think Boeing would like to offer two engines I have trouble seeing it based on recent history. We shall see.
Claes – do you think there is time for Airbus to “push PWA and CFMI hard for 35k demo Engines and run them really hard on A321neo flight test Aircraft” with a result that permits A322 “suitable production volume” before the ‘797’ is “starting to compete”?
The Pw1100G and Leap A are available for just under 35K now.
They always have a train of new/improved technologies in development which can be applied to existing or future engines.
It might be that PWA and CFMI has their hands full just gettting full life of the approx 33k Engines they deliver now to the A321neo. Maybe MTU with some German Goverment and local state supports will develop with PWA the 35k verison and ship it from the new assembly line in Munich and probably later another production line at its big MRO shop in Hannover to Airbus in HAM.
Deliveries for 2018 could be quite interesting.
As Airbus has a backlog of non deliver A320NEO to clear, if the engine mfg (P&W particularly ) can clean that up, there will be a burst of extra deliveries .
IF the numbers are right, Airbus us went nuts in deliveries in December though. Usually a hangover when you do that and people run down and ramp up in the new years may start sluggish.
And the usual last minute finalizing of sale to beat Boeing.
Just what they need, more a 320’s in the backlog.
No surprise here..,end of year flurry of orders to gain bragging rites from your rival
More pressing, where’s the widebody orders!!
Looks like they’ll take those 50 bogus a380 orders to the ground when the program finally ends.
We’ll see if Airbus can deliver 600 single aisles this year. Looks like about a 4% growth rate since 2000. 625 in 2019, 650 in 2020?
Am I the only one here who is amazed that year after year we see Airbus outselling and out-delivering Boeing and yet year after year Boeing’s Commercial Airplanes revenue is higher than Airbus’ Commercial aircraft revenue (Boeing 2016 revenue $65 billion versus 49 billion Euros = ~$59 billion for Airbus.
I would submit that revenue and profitability is the real story that Leeham should focus on.
@Bruce: We have several times in the past focused on Boeing’s profits, which are boosted by Program Accounting while Airbus must write off development expenses as they occur.
Correct – so factoring that out…
Err, its called kicking the can down the road.
Sort of like perpetual motion except it actually works.
Keep just enough aircraft development going you never have to pay the piper (or taxes)
Scott: But program accounting doesn’t impact revenue, does it?
I would think that in avoiding taxes they then turn that into share holder buy back.
We get the knee to the groin.
Airbus delivers more lower cost/margin NBs in its mix, than Boeing.
We hear this all the time.
Hic Rhodos. Hic Salta!
( i.e. produce proof asap.)
From what I’ve seen, Boeing consistently out-delivers Airbus in Commercial aircraft, at least in the past 5-6 years.
Respective revenue for 2016 is almost bang on proportional to numbers delivered. Boeing delivered 748 to Airbus’s 688. 8.72% higher deliveries resulted in 9.23% higher revenue.
So revenue from commercial divisions is pretty much equivalent. Another myth bites the dust? 🙂
the MOM/737/320 firing order will be interesting to see:
I expect
1. B proposing the MOM
2. A proposing a 320 1/2 to ruin the 737 completely and claim that the MOM is unnecessary…. but already working on the 322 – in secret.
3. B doing a super-max but losing market share via the 320. If MOM is selling well: Announcing the 322 will be as good and cheaper.
4. A launches the 322, most likely with a new wing that allows a ULR 322 and a prolonged 323.
At this moment, however, I can t see anybody wanting to pay so much more for a new winged 322 that it would be worth building it for A, especially as it would only eat into the closes alternative for such a plane, being the current 321neo.
Boeing can lower prices on the 737-8 and -10 and still make money forcing Airbus to take a loss on each A320. With filled order book they do not need to. Hence I think Airbus moves carefully on the A320.5 not to kill the Boeing 737-8 cash cow trigging a price war Boeing would win but annoy its shareholdes.
Could you elaborate why 737-8 and -10 are cheaper to produce than A32x, or why they bring more profit?
The 737 production in Witchia of a smaller diameter airframe with a bit older Technology fine tuned over decades to make a full fuselage is much quicker than Airbus and requires less metal. Airbus makes sections in different countries that are flown in and mated in different assembly halls to make the corresponding full fuselage. Boeing having one engine supplier making a smaller engine can get better prices than Airbus that is buying 50% of its A320-series Engines that are bigger from CFMI. The same for a smaller nacelle and thrust reverser of one type from one supplier. The landing gears are Boeing made and smaller. Adding capital costs for bits made waiting for assmebly I think Boeing in-house cost for a 737MAX8 is approx 63% of a corresponding A320neo. I could be wrong but Boeing cashflow and profits from commercial Aircraft bizness exceeds the corresponding Airbus numbers even after neutralizing program accounting etc.
I’m not sure about things in manufacturing, but I see some flaws in your arguments:
– Two suppliers vs one: with two you can set them up against each other, and get better price. And aren’t buyers negotiate with the engine manufactures for engine, not Airbus?
– For complex machines, material costs are insignificant compare to other production cost, so a few percents less metal should account for very small difference in final price.
– How many percentage of total works are outsourced? By outsourcing more, companies has to share profit to more supplier.
Just to summarize: The 737MAX has a smaller diameter fuselage making for thinner gauge aluminum and reduced mass, Witchita ships the full length fuselage ready assembled in addition pylons and nacelle at competetive price. Boeing makes landing gears in house. The 737 get 100% of Engines from one supplier giving volume agreement discounts when Boeing buys the engines and put on the QEC “Quick Engine change” kits that is of one model for Boeing. The rest is a similar mix of make/buy. I agree for a Customer competition is great but splitting volumes into 2 versions eats into the margins at Airbus. The time of ready built and stuffed Airbus modules in different countries until delivery ties up more capital than Boeings rolling assembly lines with just in time delivery of most expensive stuff. Airbus in theory should be able to “snap together” the stuffed modules to an Aircraft quicker and with more prcision than the Boeing rolling assmbly lines, but I don’t know if Airbus is quicker yet.
Apparently, final assembly of the 737 takes about 9 days — and Wichita only ship hollow fuselages.
–
https://www.youtube.com/watch?v=WTmFXPY0EGI
Lehman has report that Airbus has a lot less labor involved din their operation
Needs to be factored in.
And I have yet to see an high tech outsource do better than inside.
In that case, Spirit has to pay good wages and has to make a profit then Boeing if its going to make money has to add onto that.
Its why doing git in house acualy does pay a real return.
All that screaming by Boeing that its subs make more profit than they do shows you what being just an assembler does to the bottom line.
Add in that Boeing has had to put a lot more money into upgrades to the 737 to keep it viable.
Am I the only one here who is amazed that year after year we see Airbus outselling and out-delivering Boeing and yet year after year Boeing’s Commercial Airplanes revenue is higher than Airbus’ Commercial aircraft revenue (Boeing 2016 revenue $65 billion versus 49 billion Euros = ~$59 billion for Airbus.
Except in 2016, Boeing out-delivered Airbus, so it’s to be expected that Boeing’s revenue was higher that year.
Except that Boeing revenue was even higher in 2015 and Airbus’ was lower. In how many years has Airbus’ commercial aircraft business sales revenue exceeded Boeing’s? By the looks of it 2010 and 2011 and perhaps 2008.
Boeing is not out delivering Airbus by that much.
10% and shareho9lder buy backs of 18 billion ?
You can see why people voted for
Trump, if the game is rigged why not see if you can get some of the pie? (not that we will of course)
Orders don’t impact in-year revenue. Only deliveries count towards revenues, and for the past several years Boeing has delivered more than Airbus, both in total and specifically in wide body segment. So that explains Boeing revenues being higher.
As for profits, Scott’s point about Program accounting explains a lot of it. The rest is probably a mix of pricing, FX effects, write-offs, and other differences in accounting standards between GAAP and IFRS.
The only in which orders appear on financial statements is the deposits that make it to the balance sheet, but since those are small and offset by the deliveries, the net effect each year probably isn’t too significant
From 2030 Airbus expect an expanding passenger market would need the A380.
Oh, so when the A380 market finally develops it will be a 30-year old aircraft.
The 737MAX airframe is essentially a 50 year old aircraft. The fuselage is even of an older design. So, what’s your point?
If only carbon hadn’t come along in the meantime
So, you are saying that the A380 can’t get a carbon wing in 2030?
OV-99: The fuselage size is older, but the fuselage itself has been an ever evolving thing in motion to the point is lighter than an A320 fuselage (albeit also a bit longer in the 800/8)
I believe the A380 centerbox is carbon.
The real issue is the A380 is always 5 years ahead of its time but the 5 years keeps moving.
Something has changed (or looks to) at Emirates.
Maybe a realization that its fleet is too lopsided and not flexible (ergo 777-X and 787-10)
Ofcouse it could.But by then it would also need new engines, control systems, and cockpit.Because of its size its the one plane that would really benefit from a carbon fuselage already (even more so by 2030)
Not much worth saving.
@Grubbie
The A350 cockpit and the avionics, hydraulics and 2H/2E flight control system architecture (etc.) is based on the equivalent systems on the A380 (i.e. essentially the same).
So, what you are implying is that the A350 in 2030 also would need a new cockpit, flight control system and avionics. Interesting, then, that the A320neo is flying around with a 30 year old cockpit design. That shouldn’t be possible, should it — considering your “requirments” for a 2030 next generation A380.
Now, what you’d obviously want to save IMJ from the current A380 is, in fact, its systems.
The A350 looks, in fact, more like a composite single deck version of the A380:
— A350 metallic cockpit/nose design derived from the A380 metallic cockpit/nose design (i.e flat pressure bulkheads and unique unpressurised nose gear wells).
— Same 25-inch frame spacing in the fuselage
Hence, in 2030 you’d essentially want to be using the current A380 systems on a next generation version. What you’d want to swap out, though, is the current aluminium fuselage with a composite one.
@TransWorld
Yet, despite the lighter fuselage, the MAX is not able to maintain market parity. You know, sh*t happens when one attempts to put lipstick on a pig.
However, that was not really the point here. What we have here is some people who seem to be inferring that the A380 can’t possibly be upgraded by 2030 — because “it’s so dated” — while seemingly ignoring that the 777x at EIS will be 25 years old and the MAX was 50 years old at EIS.
Why would anyone put a carbon wing on a museum piece?
@TexBozz
You’re right, I never figured out why Boeing decided to put a carbon wing on the 777 museum piece.
Airplane development is more evolution than revolution. The 777X is 4th generation composite wing. Next up, NMA with 5th generation and next advances in production from the 777X.
As you know I am an armchair enthusiast, my view of A322/3 forward, 777X recipe.
Just did something “horrible” a few hours ago, booked one leg of flights with the family on a 787. For the love of flying and and family, eish!
@Scott Hamilton
Correct. As long as the OEMs are sticking with the tube and wing configuration and combustion engines, we’re going to see mostly evolutionary upgrades. That’s why a significantly upgraded A380, or a VLA derived from the A380, is eminently doable a decade hence.
OV-99:
While I more than agree the 737 should have been replaced (and I advotad two gernaiton ago)
Lipstick on a pig and S*&T is a poor way to put it.
The 737 still matches right up there with the A320 and by the reports is slightly more reliable (less electronics to deal with and those can be buggers to trace glitches – mechanical stuff just breaks or has obvious distress ) .
Its really back to a 50+ year old design can still be reliably and economically made viable with a newer design (and one that recognized fully that tube engines were not the future)
Sad state of Aerodynamics improvements.
@TransWorld
Again, the fact of the matter is that Boeing has gone from market parity with the 737NG to a near 40/60 split in favour of the A320neo vs. the 737MAX. Putting expensive “lipstick” on the 737MAX has lead to, among other things, a heavier airframe**. IMJ it was more akin to a Hail Mary pass on the part of Boeing. It will work in the short term. What is keeping the MAX in the game for now, is that Airbus have let Boeing keep a slight seating advantage for the 738MAX. Enter a slightly stretched A320neo and a possible increase in A32Xneo production output to 80-plus units per month, and you’ll see the MAX slipping ever further behind.
–
https://www.flightglobal.com/news/articles/boeing-disputes-737-max-development-cost-report-367504/
So if PW could have delivered the engines for the gliders…
Airbus: 718+30= 748
Boeing: 763
Not that far. A bare 15.
Still have a hard time believing Boeing will get out-delivered in the following years.
I believe Leeham has a cross over point where that will happen.
I forget what year, but maybe in the next year or two.
Once you get that close its really a non issue. You have to call it equal.
What would any new single aisle platform / architecture look like?
What would it be called — A360 family or A370?
What timing looks credible — EIS in 2030
Simple circular fuselage sized up to a MC-21 scale at 152” internal width to allow a bigger aisle up the back and a twin aisle business class section with 24” wide seats down the front?
New fuselage helps if they wanted to build a Super Sixty sized A366 / A375 to close out the lower half of the MoM gap.
Bean counter friendly project would just buy the company.
Then there is the future regarding twin aisles — bin the A380 or relaunch it as a larger “900” Model would generate space for a real 10 seat wide single decker with a 250” internal cabin width. 400T MTOW with 4 x 70K lb thrust engines would not be too difficult.
Bigger fuselage barrels on the existing A340 HD saddle and wing box would be a good place to start.
Finally there is the C Series and the CS500 model which exists in the CAD ether somewhere north of the 49th parallel. A319 no more and the A320 replacement aims for 200 real seats. If the moons align of course.
How would the AB vs BA fight look if you just added up the OEW weights?
Would it just highlight the BA lead in twin aisle aircraft?
I wouldn’t bet on it.
https://static.seekingalpha.com/uploads/2014/12/9932311_14186689180693_0.png
Interesting numbers.
However it is AB commenting on a BA product.
Consequently needs to be taken with a pinch of salt.
Wikipedia has the 7double7 300ER OEW at 168/9T so not sure about the 175T figure provided. Regarding the 9X it will need to be some bird.
As noted — longer / more complex / NG big fan engines / more passengers — with less power and the same MTOW compared to 7double7 Classic yet potentially with a higher OEW.
The laws of physics will come into play at some point.
Consequently BA will need to be at the top of their game.
Especially if it is sardines only up the back — 17.2” wide seats is the unacceptable b*m cheeks of Aviation capitalism.
So why is the Airbus bottom line not a lot better?
Maybe it is. The numbers are so different it is difficult to compare. It seems companies can fool their stakeholders into anything as long as short term results “free cash flow” look good. Try te free cash flow story on your wife for buying a Porsche 911..
Hello Keesje,
Focusing on free cash flow is actually a completely separate issue than whether program accounting is or is not used. The concept has much to do with US companies who managed to state impressive earnings but after paying interest on their leveraged buyouts loans and paying consulting fees to the private equity firms that organized their buyout, had little “free cash flow” that could be spent on expanding production, new products, or best of all for investors, on stock buy backs or increasing dividends.
A loose analogy would be two families with total income of $100,000, Family A has $4,000 dollars a year left over after making required payments on their mortgage, car loans, credit card bills, and other required payments, and family B has $50,000 a year left over after making the same payments. Families A and B have the same income, but family B has more “free cash flow”. Perhaps family B purchased a basic Toyota sedan for $30,000 in cash many years ago that is now worth only $5,ooo if sold as a used car. One way to look as this is that family “B” has lost $25,000 on their Toyota, but from a free cash perspective, it is much better to have an old Toyota that you owe nothing on than it is to have a new luxury car that is still worth 90% of its original value but that you paid for with a loan that requires you to pay $900 a month. The $30,000 spent on the Toyota many years ago is sunk money that is irrelevant to current year cash flow. Money gone is money gone.
The cash flow argument would actually work pretty well with my wife. She does not approve of taking out loans for things that you cannot afford to pay for in cash, other than houses, but is open to using a small percentage of savings from time to time to splurge on a luxury. This summer my wife bought herself, not a Porsche 911, but a used Mazda Miata convertible and paid cash. She thought this was OK because it used a small percentage of her free cash. A new Miata, or Porsche 911 of any vintage, would have used too much free cash and she would never, never, take out a car loan. She said something about my Volvo station wagon being way too boring and being done with ugly wagons and SUV’s now that the kids have moved out. I guess some people just cannot just appreciate the beauty of practical functionality.
Anyone who is not familiar with free cash flow, or not sure what the definition is, might be interested in the following excerpt from an Investopedia page on free cash flow. See the link after the excerpt for the full page.
BREAKING DOWN ‘Free Cash Flow – FCF’
FCF is an assessment of the amount of cash a company generates after accounting for all capital expenditures, such as buildings or property, plant and equipment. The excess cash is used to expand production, develop new products, make acquisitions, pay dividends and reduce debt. Specifically, FCF is calculated as:
EBIT (1-tax rate) + (depreciation) + (amortization) – (change in net working capital) – (capital expenditure).
FCF in Company Analysis
Some believe that Wall Street focuses only on earnings while ignoring the real cash that a firm generates. Earnings can often be adjusted by various accounting practices, but it’s tougher to fake cash flow. For this reason, some investors believe that FCF gives a much clearer view of a company’s ability to generate cash and profits.
https://www.investopedia.com/terms/f/freecashflow.asp
For those who believe that free cash flow is a useful measure of a companies health, Boeing’s recent FCF results have been impressive, and this has much to do with the run-up in Boeing’s stock price. Below are some excerpts from a 1-9-18 Reuters article at the link after the excerpts.
“After a resurgence in jet sales driven by a solid global economy and with most of its production issues behind it, Boeing has found itself flush with record free cash flow – a profitability measure widely watched by investors for industrial stocks.”
“The company has increased its free cash flow from $1.83 billion in 2010 to an estimated $10.5 billion in 2017. That figure would be an increase of 34 percent from 2016.
The surge in cash flow has energized the company’s shares, pushing up the stock price by more than 90 percent in 2017. Still, the stock trades at a slight discount to its aerospace peers.
Morgan Stanley analyst Rajeev Lalwani said if management executes on another year of growth, tax reform materializes and free cash flow multiples catch up with peers, one can expect “another +50 percent year.”
“Free cash flow points to a company’s ability to expand production, develop new products, make acquisitions, pay dividends and reduce debt.
Boeing last month raised its quarterly dividend by 20 percent and replaced its existing $14 billion share buyback plan with a new $18 billion authorization.”
“Fort Pitt’s Smith says Boeing’s management is doing well allocating capital between new projects, acquisitions and buybacks and predicts a return on shareholder equity of 17-18 percent that gives shares a “fair value” estimate for 2018 of $300 to $360.”
https://www.reuters.com/article/us-boeing-stocks/boeing-shares-have-more-room-to-fly-in-2018-analysts-idUSKBN1EY1Z6
I am sure that many here will disagree with the above analysis, but this is pretty much how Wall Street se Boeing’s recent financial; performance.
Been there, done that. Got the T-shirt: “Happiness is Positive Cash Flow!”
AP: Good analogy with the wife.
Fortunately I don’t suffer from that. Mine grew up on a farm/ranch.
When fuel prices went sky high (by our standards) we bought a station wagon.
Interest was 3% as I recall, for what it replaced it saved about 60% of the monthly payment.
ROI was 10 years. Now its a cash generating (or saving ) machine.
It also drives and handles far better than a UV (that it replaced) , has ooodles of air bag (safety)
Sounds like you at least have a practical wife for the aspiration of a good buy on a sports care.
My sort of mid life crisis.
I just realized that the equation for free cash flow (FCF) given in the excerpt from Investopedia that I posted above was for unlevered FCF from which mandatory debt payments are not subtracted; however, what I was making a loose analogy to was levered FCF, from which mandatory debt payments are subtracted. See below for a definition of levered FCF, from the link after the definition.
“What is the Levered Free Cash Flow Model?
While unlevered free cash flow looks at the funds that are available to all investors, levered free cash flow looks for the cash flow that is available to just equity investors. It is also thought of as cash flow after a firm has met its financial obligations. When performing a discounted cash flow with levered free cash flow – you will calculate the equity value.
Levered free cash flow is calculated as Net Income (which already captures interest expense) + Depreciation + Amortization – change in net working capital – capital expneditures – mandatory debt payments.
Even if a company is profitable from a net income perspective and positive from an unlevered free cash flow perspective, the company could still have negative levered free cash flow. This could mean that this is a dangerous equity investment since equity holders get paid last in the event of bankruptcy.”
https://www.wallstreetoasis.com/finance-dictionary/what-is-free-cash-flow-FCF
Turnover is vanity.
Profit is sanity
Cash is reality.
Commercial aero is a growth business.
Two main players plus a lot of wannabees.
SA is a cash cow for both.
Interesting to find out the profit profile of the whole value chain?
Airframers as above vs supply chain vs engine suppliers vs airlines?
If it follows the path of Big Auto then the well run portion of the supply chain provides the best long term returns / most consistent long term returns.
Everybody else has peaks and troughs to come extent.
Fat Bloke: “Apple turnover is delicious!”
Does higher free cash flow at Boeing translate directly into more new Boeing airplane projects? Perhaps not. The quote below is from the Reuters article that I gave a link to above.
“Chief Executive Officer Dennis Muilenburg recently confirmed that the company expects to grow operating cash flow annually through the end of the decade, adding that it remains committed to returning about 100 percent of free cash flow to investors.”
The free cashflow allows reduction of debt and increased dividends + stock buy backs making it cheaper to pay dividends as you cash in yourself on your own stock. Boeing depends alot on the 737 being a cash cow, the 777 used to be one and the 787 is working its way out of deferred costs that Boeing paid cash for thanks to its cashflow (some goverment and state support helped, lots of times you get prepayments for goverment contracts). Hence Boeing is massively cashflow positive for now. It will be a problem when Customer used to ERV195E2’s and C-series are looking for bigger Aircrafts and compare the 737 to the A320, they will complain that the A320neo is not as modern Aircraft as they are used to operate, The 737 will look something you grandpa worked on (like an aircraft equivalent of the UH-1) and its sales can then drop off a rock. But still it is holding on quite well from customers used to it.
Just how many shares does Boeing have left?
With all those billions in buy back are there 1000 share now?
Is it desirable to have a narrow investor base?
Or do they turn around and created more shares all he time?
I wonder what would be the cheapest and quickest waw to get a 30% larger wing on a A322. Maybe all composite takes too long..
Stitch an insert into the wing near the fuselage like they did with the A340, plus a wing extension.
You want to use the advantages of CFRP in designing the wings, hence they can be made more slender for the same mass thanks to the stiffness, strength and density of CFRP. For the fuselage you don’t get the same big benefit for a narrowbody where I suspect Al-Li and friction stirr welding is more economical, like the Falcon 9X rocket structures. For peak performace even smaller Aircrafts like fighters are made of CFRP and titanium Alloys. But for a narrowbody Aircrafts doing 12-15 cycles/day alu allows still rule in the fuselage.
I figured Leahy would win the order race with Boeing on his way out.
Boeing needs new sales blood in my humble opinion. The company is too insular. Hopefully the new CEO from GE brings in new leadership from the outside.
See comments like “pig with lipstick”, others like band-aid aircraft (like that one) jumps to mind.
While AB is at the top of the game with the single aisles they must stay there and focus on dominating the 100-220 seat market before going the above mentioned route/s.
During the next 5 years develop the CS1/3/5’s, 320+/321+/(LR)+ (wing tweaks, 2nd generation PW-GTF’s), and an NSA staring with the larger 220-240 seat “32X”.
The 32X NSA to follow the 777X “formula” of Al-Li fuselage and CFRP wing, EIS 2027.
First replacements of 787’s will start around 2035 by which time AB should have a new generation twin aisle readied with 230-300 seats?
Below an interesting list/table on the A350 production. There are a number of aircraft “locked-up” in France with compliments of Qatar that should hopefully be delivered in the not too distant future.
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjt3rGt9NvYAhUM7BQKHeqZCZAQFgglMAA&url=https%3A%2F%2Fsites.google.com%2Fsite%2Fa350xwbproduction%2Fproduction-list&usg=AOvVaw0D8yz9xU5r_8g2Zer6gaXH
I have been looking at this page quite often.
You’ll note the issue with Qatar. Suddenly about 5-7? months ago all deliveries went undated. And clearly things slipped pretty far sometimes it seems up to a year.
Difficult customer. But happened before the local political games.
QR leased 4 A359 frames from LAN, as far as I can tell LAN decided that they wanted them back and QR decided that the early A359s were pretty good after all.
for the 380 future, I expect Airbus trying to produce the current 380-800 for the next 6-10 years, just to keep the line alive and hope that the market has then evolved enough to support a 79,8m long 380-900neo.
This would solve a few problems:
– The 380-900 would be competitive vs the 777-9 on a seat mile basis (the 380-800 is not really), especially if you put 11 abreast on the main deck
– 380 would come to its full potential
– problem of limited cargo area is reduced
and have some significant advantages:
– this would be a simple stretch, just with new wingtips and engines
– this might be the first aircraft for deploying the RR ultra fan (which btw might at the beginning not be reliable enough to get enough ETOPS)
– if ultra fan comes, range would be more or less equal
– basically no production changes
– ideal replacement for those 380 bough in the 2000s that can really be filled.
Why would the cargo problem be solved? Surely the extra hold volume would be needed for the bags of the extra passengers?
You get much mor additional cargo space than is needed for the bags.
However the A380-800 is already quite big and while a A380-900neo would be a CASM monster, I don’t see it flying of the shelves actually.
The A380 is heavy overengineered with even a A380-1000 in mind and additionaly restricted by the 80 m span.
Hi! I said cargo problem reduced, not solved.
If you look a the blueprints/surface map, you will notice that a lot of space in the cargo area is taken up by the centre wing box. On the upper floors, where there is no wing-box, this area is occupied by passengers.
Now, if you stretch the plane, then the wing box remains the same and cargo grows more in relative terms than the passenger area.
What are AB’s plans going forward?
Keep it small scale and low cost regarding new models.
Unless BA do some radical regarding MoM then it is all hands to the pumps to try and catch up?
Wish AB would take the lead themselves.
Playing Ford to BA’s GM is not a great place to be.
I don’t think the A300, A320, A330, A340, A380, A400M, A350, A320NEO have been playing catch up to anything, have they?
A340 HD = missed opportunity.
A350 = market gave them a hard lesson.
A380 = ego trip now an open sore heading towards laughing stock.
A400M = could do better, a lot better.
Then there is their plans for the future.
I think they are waiting on BA making the first move.
They need to make their own decisions rather than play catch up.
I think the 320NEO caught Boeing with their pants down, the A350 is increasingly putting the 777 out of business.
The A400M & A380 weren’t responses to anything.
They made their own decisions rather than play catch up for as long as they exist & probably will continue doing so.
And did they not get A320 very right at the first attempt?
On the TA front there has been a huge amount of 250T MTOW action in the past 10 years — interesting to see how things pan out.
As you note the B7double7X might be one play too many for a platform that is up against two much more modern aircraft in the market when new and then there is the Wiki gossip that early build individual aircraft might only have a 20 year lifespan if they are lucky.
The A320neo is still benefitting from good decisions made 35 years ago and the fact that the B737 was a low rent parts bin special when it was launched 50 plus years ago.
The B727 got all the love.
The B737 got the value engineered basics.
As for the A380 — great to fly in but the economics based on its weights are shocking.
A400M — military programme doing what all military programmes do. Keeping the MIC in a job and costing the taxpayer a fortune.
“A350 = market gave them a hard lesson”
Would you care to elaborate?
A350 Mk1 = Warmed over A300/330 which became an object of derision
A350 Mk2 = Big step forward that was probably a 787 done right.
It has 9 real seats rather than the BA sardine spec units up the back.
Plus doing the A350 right left a space for the A330 Neo to exploit.
For the record the A320 has developed into a very capable architecture / platform / component set.
When AB takes a brave pill and introduces a Super Sixty sized A325 the MoM gap halves overnight.
A350Mk1: I don’t recall that it was ever an object of derision. Perhaps, its greatest problem was the “drug-like rush” of the 787 programme that was promising all sorts of things — hard to compete against that.
http://www.richardaboulafia.com/shownote.asp?id=295
Context is all.
The B787 had many roles.
It was a modernisation of BA’s TA offer.
It was their response to the A380 media circus. – – therefore all the point to point nonsense as an antidote.
No matter the BA sales machine got the market to buy into it all the way down to Europe holiday charter companies.
Consequently result.
What happens next will tell us how good the original plane was.
Finally your bloke needs to read up on naval history – – analysis by headline.
Well, I’d argue that Boeing’s response to the A380 launch on December 19, 2000, was the exceedingly hyped Sonic Cruiser that was announced on March 29, 2001. When Boeing succumbed to reality and finally abandoned the Sonic Cruiser in December 2002, they came up with the 7E7; something that just resembled a longer range A330. As it turned out, the better fuel efficiency was mainly due to the engines — despite all of the hoopla surrounding the 787.
As you indicated, the point-to-point nonsense was really nothing more than Boeing marketing going all out spreading FUD about the A380.
–
As for Richard Aboulafia; he does have a Masters degree in War Studies from King’s College, University of London.
As for the Battle of Jutland; Wikipedia is not that bad…. 🙂
https://en.wikipedia.org/wiki/Battle_of_Jutland
Regarding the Battle of Jutland — Wikipedia would seem to be his level.
However I digress.
The Sonic Cruiser was an interesting concept.
With the benefit of hindsight it was a dog that would win Crufts.
Completely bonkers by a management coming over all trendy vicar — doing different for the sake of doing different.
IMO, it was not even an interesting concept. Boeing had obviously created a ploy (i.e. A380 FUD) for the world’s media to cover its own faults.
Here’s a DLR analysis:
http://www.dlr.de/as/en/Portaldata/5/Resources/dokumente/abteilungen/abt_ke/vorentwurf/hepperle-sonic-cruiser-paper.pdf
–
Next, Bill Sweetman’s take on the “The Cult of the Sonic Cruiser” from 2015:
https://www.airspacemag.com/history-of-flight/cult-sonic-cruiser-180956241/
Was it not also Mulally that said Boeing was going to do a new plane in response to the A320neo?
Mulally was long gone by then. Jim Albaugh was CEO of BCA.