June 7, 2021, © Leeham News: It’s been a busy couple of weeks in commercial aviation, with several reports last week alone.
Some of these reports were new and interesting Others were over-hyped and fluff.
Let’s run them down.
Qatar Airways CEO Akbar Al Baker said last week in an interview that he’s interested in a Boeing 777-8F or Airbus A350F. The media outlet hyped this as an “Exclusive.”
Well, not so fast. Al Baker said the same thing in a Simple Flying webcast the week before.
The news report said Boeing was showing the 777-8F concept around. This isn’t new, either. Despite putting development of the 777-8 and -8F on hold as cash flow cratered during the MAX and COVID crises, salesmen continued to chat with the market about the 777-8F. Boeing better be doing so.
We reported way back on April 6 that Boeing’s dominance in freighters, dating to the 707 in the 1960s, is under real threat for the first time. Airbus produced an OK freighter in the A300-600RF and a mediocre Combi in the A310. It foul-tipped on the A330F, although the A330-based KC-330 MRTT is a winner. Airbus completely dropped the ball on an A380F. Airbus also is showing a concept of the A350F and industry reaction is this time, Airbus could actually get it right. It’s a real threat to Boeing.
Furthermore, the Boeing 767-300ERF and 777-200LRF don’t meet ICAO’s 2027 CO2 standards. These airplanes can’t be produced from 2028. With the production of the 747-8F ending next year, Boeing must bring the 777-8F to market.
The term “commercial agreement” in the context of an aircraft transaction is a new one.
Boeing and Airbus used to jab each other over announcing Letters of Intent or Memorandums of Understanding (except when it suited their own purposes) instead of a firm order.
Then, “Conditional Order” entered the lexicon. Bombardier and Porter Airlines made a big deal over the announced order, which was “conditioned” on Porter receiving government approval to operate jets out of its hub at Toronto City Airport. Approval never came. The “order,” now held by Airbus, never was firmed up.
Sources told Airfinance Journal and LNA Embraer’s firm order for 30 E-195 E2s, to an unidentified customer, are in fact heading for Porter. Porter denies it placed the order or signed a lease deal. But there are ways around that to enable deniability while the aircraft still are going to Porter in the end.
LNA outlined the scenario May 19. While Porter denied to AFJ and other media that it placed the order or signed for a lease deal, Porter issued a non-denial denial to LNA.
So, what has all this to do with the “commercial agreement” between United and Boom?
The agreement includes cooperation on a “sustainability initiative.” It also includes some big caveats.
“United will purchase 15 of Boom’s ‘Overture’ airliners, once Overture meets United’s demanding safety, operating and sustainability requirements, with an option for an additional 35 aircraft. The companies will work together on meeting those requirements before delivery,” the airline said in its press release. (Emphasis added.)
There seems to a lot less to this than meets the eye.
Boom has major technical details to work out and a lot of funding needed. LNA will do a 10 Minutes About podcast later this week to talk about these.
Reuters reported that Boeing has a $15bn dilemma in what to do about its next airplane. The article, written by ace reporters Eric Johnson and Tim Hepher, describes what amounts to the reinvention of the Boeing 757-200 and 757-300. The airplane would be 10% more economical than the Airbus A321neo, they write.
Well, if that’s the path Boeing is going to go down, good luck with that.
For $15bn, airlines get pitched an airplane with a $100m sales price that continues Boeing’s cramped single-aisle cross section and only 10% better fuel costs? And the entry into service isn’t until 2029 or 2030?
Even if Boeing widens the cross-section, it must surpass the roomier A321—perhaps matching the still-wider United Aircraft Corp. MC-21.
Which brings us to…
Airbus can respond to a reinvention of the 757 with its long-touted “A322,” also known with the code name A321 Plus Plus. This concept adds 12-24 seats, a new composite wing and engines to match anything Boeing selects.
All for maybe $4bn to $5bn vs $15bn Boeing must invest.
LNA looked in detail at the Wing for Tomorrow and Boeing’s product strategy dilemma May 31.
Aerion’s decision May 21 to close up shop and cease development of a small SST that would have competed with Boom is sad news. This was the most realistic concept of the three small SST business cases.
At various points, Lockheed Martin, Airbus, Boeing and Spirit Aerosystems were key investors and R&D partners. The first three withdrew for various reasons and Spirit, at least publicly, hung in until the end. GE/CFM was working on the engine.
If Aerion with all this credibility couldn’t make a go of it, what does this say about the two other programs?