Leeham News and Analysis
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Leeham News and Analysis
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
- Tariffs Tumult Takes Over GE Aerospace Q1 2025 Earnings Call April 22, 2025
- Boeing reports mixed results of latest employee survey, but middle management and officers remain key obstacles April 22, 2025
- Hopes for 1Q financial progress turns into bumpy ride for Boeing April 21, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 18. April 18, 2025
China bans Boeing, US parts imports in tariff war
April 15, 2025, © Leeham News: It was inevitable: China has banned its airlines from accepting deliveries of Boeing airplanes.
The move is in retaliation against President Donald Trump’s boosting tariffs on Chinese goods to 145%. Beijing placed retaliatory tariffs on US goods to 125%. During the first Trump administration, the president placed tariffs of 25% on Chinese goods imported to the US. Beijing has allowed delivery of very few Boeing jets since then.
Illustration of many of the systems and components COMAC sources for its C919 jet. The smaller C909 regional jet is similarly sourced. Credit: Airframer.com.
The move once more blocks Boeing from the world’s second biggest aviation trade market. Additionally, Beijing blocked the import of US-made parts, according to Bloomberg News, which first reported the actions.
Uncertainty plagues airline, aerospace, lessor industries over tariffs
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By Scott Hamilton
April 10, 2025, © Leeham News, Seattle: The airline and aerospace industries are plagued by uncertainty over the global tariffs announced by US President Donald Trump on April 2. The 90-day pause on nearly all tariffs announced yesterday doesn’t resolve the uncertainties. For the moment, they are only postponed.
Airbus’s A320 production plant in Hamburg, Germany. Credit: Leeham News.
Airframe and engine manufacturers, suppliers of components feeding them, and Buyer Furnished Equipment (BFE) directly to the airlines, lessors, aftermarket maintenance companies, and freighter conversion firms have many questions and no answers in chaos following Trump’s global tariff scheme.
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Consider the unknowns:
- Will Trump tax the entire value of airplanes, engines, and components imported into the United States or just the foreign content? There is no guidance yet.
- Will other jurisdictions, notably the European Union, announce reciprocal tariffs? This is unknown because the Trump Administration hasn’t clarified what will be taxed.
- How will aircraft leased by non-US lessors be treated when US airlines are the customers? How will US lessors leasing to non-US airlines be treated? No answers.
- Contracts between lessors, airlines, Boeing, and Airbus don’t specifically address tariffs. Some airlines say they won’t pay tariffs because the contracts are silent. However, Boeing thinks there is a way to pass tariffs along. Airbus probably does, too.
- Over the last weekend, US-based supplier Howmet informed its customers it reserves the right to exercise the force majeure clause in its contracts to give it flexibility to suspend deliveries because of the tariffs. Other suppliers, including some engine companies, are following suit.
- At least one supplier has already billed some customers for delivered goods, including a tariff tax line item on the invoice.
- How will various jurisdictions treat aircraft converted into freighters with a mix of US and foreign content? There is no answer.
The US-based law firm Vedder Price issued its opinion and guidance on Tuesday on some issues.
Boeing at far greater risk of tariff impacts than Airbus
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By Scott Hamilton
April 7, 2025, © Leeham News: Tariffs against the rest of the world announced by US President Donald Trump last week threaten retaliatory tariffs against Boeing at a far greater level than Airbus faces, an analysis by LNA shows.
Trump exempted no part of the world from tariffs where Boeing isn’t at risk for retaliatory tariffs. Airbus faces tariffs only in the US. Critics note that North Korea and Russia aren’t on the list; these two countries already are under steep economic sanctions. Nevertheless, the US had more than $3bn in Russian imports last year. Even Boeing’s domestic US deliveries potentially could be hit with tariffs on foreign-sourced parts, components and engines.
The situation is still fluid, and it is still unknown precisely how US tariffs will be applied to the aerospace industry. This will affect how retaliatory tariffs are applied to Boeing and Airbus, which sources much of its aircraft content (notably engines) from the US.
Accordingly, LNA’s analysis is necessarily highly preliminary. It’s also possible that more airplanes may be listed as at risk to tariffs than the final analysis would conclude.
Boeing potentially has three times more aircraft subject to retaliatory tariffs than Airbus has exposure in the US with its European and Canadian sales to US customers.
How good is the C919? Part 3.
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By Bjorn Fehrm
April 3, 2025, © Leeham News: The COMAC C919 is finding its first customers outside China, which gives us a reason to examine the aircraft.
Last week, we estimated its efficiency versus its Western “look-a-like,” the Airbus A320neo. Now, we look at new variants that have been announced and how competitive these would be.
Figure 1. The C919 and its variants are analyzed by the Leeham Aircraft Performance and Cost Model, APCM. Source: Leeham Co.
Summary:
- The C919, sized like an A320neo, is the first variant in a family of aircraft.
- The next C919 variant is a shorter model for hot and high airfield operation.
- The following variant is an A321neo-sized aircraft.
Airbus launches Book and Claim SAF scheme
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By Scott Hamilton
March 31, 2025, © Leeham News: Airbus last week announced a program to boost Sustainable Aviation Fuel (SAF) called Book and Claim. Its purpose is to buy SAF credits in one location and take credit for them in another.
The buyer can then claim in its corporate reports that it is meeting environmental goals, at least in part.
“This initiative aims to boost both supply and demand for SAF worldwide, providing a flexible and scalable solution to accelerate SAF adoption,” Airbus said at its annual environmental Aviation Summit.
“In simple terms, the book and claim approach allows a buyer to ‘book’ a certain amount of SAF and ‘claim’ the corresponding emission reduction, even if the fuel is used elsewhere. Through a pilot program running throughout 2025, Airbus will leverage this system to improve SAF accessibility for potential customers, particularly those with limited volumes and far from supply points,” the company said.
It’s an admirable effort for an industry that has so far fallen dramatically short of the SAF goals outlined by the International Air Transport Association (IATA) at its 2021 Annual General Meeting in Boston (MA).
However, LNA is skeptical about the effort. Carbon credits, which appear to be a variation, failed when airlines tried them. United Airlines CEO Scott Kirby called carbon offsets a “fig leaf” and “mostly a fraud.”
In land use regulations, Book and Claim sounds suspiciously like wetland mitigation programs. This is where a wetland is filled in for development and a new one may be created miles away, offsetting the environmental damage in the original location. At least this is the theory, and it’s essentially pencil-whipping. Nature doesn’t work this way for wetlands. LNA isn’t convinced it works this way for carbon, either.
How good is the C919? Part 2.
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By Bjorn Fehrm
March 27, 2025, © Leeham News: The COMAC C919 is finding its first customers outside China, which gives us reason to examine it and estimate how efficient it would be operating a typical mission compared to its Western competitors.
We will compare the C919ER version with a 3,000nm maximum range to “its look-a-like”, the A320neo, which served as the C919 design template.
Figure 1. The C919ER is analyzed using the Leeham Aircraft Performance and Cost Model (APCM). Source: Leeham Co.
Summary:
- The C919 consumes more fuel as the airframe is larger for the same seating capacity as the A320neo.
- Due to a lack of airframe maturity, the maintenance costs will also be higher.
- The big unknown will be the capital costs as the pricing or leasing strategy of a state-owned COMAC is hard to predict.
Airbus still struggles to deliver planes on time
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By Scott Hamilton
March 24, 2025, © Leeham News: Airbus continues to struggle to deliver commercial airliners to customers on time, with the A320neo and A350 families now sold out into the early 2030s.
Customers complain that they can’t get their aircraft on time and often can’t get definitive information about delivery times.
Airbus blames the supply chain, including engine delays from CFM and seats from multiple companies. LNA is told quality control issues at the European assembly plants are also problems.
How good is the COMAC C919?
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By Bjorn Fehrm
March 20, 2025, © Leeham News: The COMAC C919 is finding its first customers outside China, with an order from the Brunei-based GallopAir upstart being first with an order for 30 C919 in September 2023. These aircraft cannot be delivered until the Brunei regulator has approved the C919 Chinese certification, which was issued by the Chinese regulator in September 2022.
Deliveries to Chinese airliners began in December 2022, with 2023 mostly spent on route proving with China Eastern Airlines first delivered aircraft. China Eastern took delivery of a further two C919s during 2023. COMAC delivered 13 C919s in 2024 to China Eastern Airlines (8), Air China (2), and China Southern Airlines (3).
The second Air China C919 was the first C919ER version, featuring a 3,000nm nominal range, whereas the others were the standard 2,200nm version.
With deliveries now at around one aircraft per month and the start of marketing to airlines outside China, it’s time to examine the C919 more closely and compare it to the Airbus A320neo and Boeing 737 MAX.
Figure 1. The first C919 delivered to China Eastern Airlines in December 2022. Source: COMAC.
Summary:
- The C919 has now reached series delivery, with 13 aircraft delivered during 2024.
- The first sales campaigns outside China have started.
- How significant a threat will the C919 pose to Airbus and Boeing?
Boeing and Airbus: A financial comparison
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By Karl Sinclair
March 3, 2025, © Leeham News: “It was the best of times, it was the worst of times,” famously wrote Charles Dickens in the opening of A Tale of Two Cities.
Boeing 737 MAX. Credit: Boeing.
Indeed, the financial results may indicate that neither Airbus (AB) nor Boeing (BA) are going through the best of times. However, one corporation clearly weathered 2024 better than the other.
While Airbus (with Helicopters, and Defense and Space) and Boeing (with Defense and Space, and Global Services) have other business segments, make no mistake: these are the undercards that make up the heavyweight title fight.
Airbus and Boeing will both go as their respective commercial aircraft divisions do.
Airbus A320neo. Credit: Airbus.
Both OEMs have released 20-year commercial aircraft market projections, forecasting that more than 40,000 new aircraft are needed, worth trillions of euros and dollars. This is the huge prize Airbus and Boeing are grappling with.
Summary
- About 10 years for Boeing’s financial recovery.
- Boeing could deliver its entire backlog, and its debt will still be greater than pre-crisis levels.
- A400M continues to be a drag on Airbus financials.
- Spirit AeroSystems will add to Boeing’s debt.
GE sees 2,500 LEAP engine deliveries by 2028, enough for more than 1,000 A320neos and 737 MAXes
Larry Culp, CEO of GE Aerospace. Credit: GE Aerospace.
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By Scott Hamilton
Feb. 24, 2025, © Leeham News: CFM International plans to deliver 2,500 LEAP engines by 2028, enough to power more than 1,000 Airbus A320neos and Boeing 737 MAXes plus spare engines in a single year.
CFM is the 50-50 joint venture between GE Aerospace and Safran. The 737 exclusively uses the LEAP. The A320neo family splits its powerplant business between CFM and Pratt & Whitney’s Geared Turbo Fan engines. Between the MAX and a portion of the A320neo engines, CFM has a solid majority of the market share for the mainline single-aisle aircraft sector.
CFM is the brand for the CFM56 and LEAP, but GE and Safran benefit from the aftermarket business. Between the two engines, the maintenance, repair, and overhaul business is big and profitable.
Larry Culp, CEO of GE Aerospace, spoke at the Barclays investors conference on Feb. 20.
“There’s no question that from an aftermarket perspective, LEAP on top of CFM56 is going to keep us very busy,” Culp said. “We haven’t been particularly good at calling the outlook here because we’ve undershot the reality with the CFM56 the last couple of years.”
Culp said that GE continues to believe that it’s got several years of growth ahead. “We probably don’t see an apex until probably the 2027, 28-ish time period, and then we’ll see a gradual fade with the CFM56.
“I think we’re still talking about 2,000 shop visits at the end of the decade. We’ll see if we’re right or wrong on that, but that’s our current view. I think our partners at Safran have in effect echoed that recently at their own earnings call.”