Pontifications: Planes nobody wants

By Scott Hamilton

Jan. 16, 2017, © Leeham Co.: Airbus and Boeing continue to offer planes that nobody wants.

Well, almost nobody.

The aircraft remain on the published price lists of both companies, for reasons that passeth understanding. Nobody ordered the aircraft for years.

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Boeing 737 MAX 10

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By Bjorn Fehrm

Introduction

January 17, 2017, © Leeham Co.: Boeing has given its sales team the “authority to offer” the 737 MAX 10. The aircraft is a stretched version of the 737 MAX 9, designed to compete more successfully with Airbus A321neo.

Boeing worked on the variant for the last year. It started off as a more ambitious change over the 737 MAX 9, but it turned out too expensive and would have taken too long to get to market. The variant that Boeing now offers to airlines is a simple stretch of the 737 MAX 9.

The backing down to a stretched MAX 9 solves the cost and timing problem, but will it solve the competitiveness problem? We make a first analysis.

Summary:
  • The offered 737 MAX 10 is a longer fuselage MAX 9.
  • The longer fuselage closes the cabin dimensions gap to the A321neo.
  • The 737 MAX 10 is longer and heavier than the MAX 9, affecting performance.
  • To save field performance, a change to the main landing gear was necessary.

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Bjorn’s Corner: Geared turbofans

By Bjorn Fehrm

January 13, 2017, ©. Leeham Co: The time has come to go through the reasons why some turbofan engines are designed with a gearbox between the fan and the low pressure shaft.

The principle design is shown in Figure 1. It’s a graphical representation of a geared turbofan from the engine analysis software GasTurb.

Figure 1. GasTurb principal representation of a geared turbofan. Source: GasTurb.

The base idea is to have the low pressure spool of the engine to run at a considerably higher RPM than the fan. Read more

Is Emirates in trouble?

Introduction

Jan. 12, 2017, © Leeham Co.: There are a growing number of articles around the Emirates airline that points to recent weaknesses in the airline’s operating model. Here are just two:

We decided it was time for a deeper look at this locomotive from the Arab Emirates. Is Emirates in trouble? How solid is it?

We studied the economics for the last decade and took a deep look at the fleet needs, including, has  Emirates committed to too many aircraft being delivered over the next several years?

They have just deferred Airbus A380’s for the first time. Used to be they could not get them fast enough?

Summary:
  • Emirates has been profitable since start 1985.
  • Its unprecedented growth in revenue and passengers has slowed down.
  • The low fuel price has kept profits up for now, but yield and load factors are down.
  • With a flexible fleet structure and a strong balance sheet Emirates has a strong position to weather any storm going forward.

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Airbus sets new delivery record for 2016

By Bjorn Fehrm

January 11, 2017, ©. Leeham Co: Airbus Commercial Aircraft presented a new record in yearly deliveries at its Press Briefing in Toulouse today.  The division of an integrated Airbus (therefore Airbus Commercial Aircraft, ACA) delivered 688 aircraft during 2016, thereby beating its target of 650 aircraft for the year.

Airbus A321neo with Pratt&Whitney engines was certified end 2016. Source: Airbus.

Orders were also higher than expectations at 731 net orders, giving a Book to Bill of 1.06. The market, including LNC, widely expected Airbus to fall somewhat short of a 1:1 book:bill.

There were no formal forecasts given for 2017. ACA President Fabrice Bregier stated that he expects it to be over 700 deliveries but full details will given at the Airbus Group’s financial press briefing in February.

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Aircraft list prices largely unchanged (Updated)

Update: Airbus Jan. 11 announced a 1% list price increase. The chart has been updated.

Jan. 10, 2017: Aircraft list prices are largely unchanged for 2017, the airline industry demand cools for new aircraft.

Sales in 2017 were down for the Big Two, Airbus and Boeing. Boeing announced orders for 688 aircraft, well off of last year, which also was a major decline from the year before.

Airbus announces tomorrow, with sales expected to be in a similar range.

Bombardier and Embraer announce later this month or next.

LNC compiled the current list prices from all the manufacturers, detailed in Figure 1 below.

Airbus and Boeing discounts typically range from 40% to 60%, depending on the customer, the airplane and the size of the order. BBD and EMB discounts may also be steep, depending on the campaign.

The balance of this article is for Subscribers only.

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Deferrals grow as airlines fight to keep bottom line

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Introduction

Jan. 09, 2017, © Leeham Co.: Airlines have deferred or are thinking about deferring more than 400 airplanes in the near term, a review of decisions and deliberations  that have been made during the last 12 months.

LNC tracked announcements last year of deferrals and statements by airlines that they are thinking about doing so.

We began identifying macro-level issues last week in our posts about emerging concerns for the 787 and LNC’s Outlook for 2017.

Reasons vary widely for the deferrals, these reports indicated. Low oil prices. Slowing economies. Declining financial results. Worries about two of the three top Middle Eastern carriers. A capital squeeze in China. Pressure on long-haul carriers from the emerging sector of low cost, long-haul airlines. Preserving capital expenditures to keep the bottom line in the black.

Today we detail the deferrals we tracked.

Summary
  • Deferrals of single aisle aircraft are less worrying than for wide-body aircraft
  • For wide-bodies, it depends on the program. For the Airbus A380, deferrals turns the program back into the red. For the A350, deferrals can help with delivery commitments.
  • For the Boeing 777, deferrals spells trouble, especially for the present generation.
  • The 787 is more resilient but the slow sales make the program sensitive longer term.

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Pontifications: Boeing’s book:bill shortfall draws market ho-hum

By Scott Hamilton

Jan. 9, 2017, © Leeham Co.: Boeing’s falling a little short of a 1:1 book:bill last year was expected and drew a ho-hum from the market.

The stock was up fractionally for the rest of the day after Boeing announced the year-end data at 11 am Eastern time, closing at $159.10.

Airbus announces its full year orders and deliveries Wednesday in a press conference (Boeing only issued a press release).

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Bjorn’s Corner: Turbofan developments in 2017

By Bjorn Fehrm

January 06, 2017, ©. Leeham Co: Before we finish of our series on airliner turbofan technology, let’s spend this Corner on what will happen on the airliner engine front during 2017.

While there is no totally new engine that comes into the market during 2017 there are a number of new variants of existing engine families that will be introduced.

Figure 1. GasTurb principal representation of a three shaft turbofan like our reference Rolls-Royce Trent XWB. Source: GasTurb.

 

If we start with the engines for regional/single aisle aircraft and then climb the thrust scale, we will cover the engines in climbing thrust class.

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Analyzing the Top Customers for Airbus and Boeing

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Introduction

Jan. 4, 2017, © Leeham Co.: The top 25 Airbus customers that are identified account for 63% for the current backlog, an analysis of the company’s order list shows.

For Boeing, its Top 25 customers account for 69% of its identified backlog.

Both companies have hundreds of Unidentified orders for which no customer is disclosed.

Summary
  • “China Inc.” is Boeing’s #1 identified customer and #3 for Airbus.
  • Two low cost carriers are the first and second top customer for Airbus.
  • Three low cost carriers follow “China Inc.” as Boeing’s Top Customers.
  • Boeing’s Top 3 wide-body customers are in the Middle East, where financial and traffic results are beginning to soften.
  • Three of Airbus’ Top 5 customers are also from the Middle East. The other two are from Asia.
  • Boeing has 54% of the market share among the Top wide-body customers. Airbus has a 54% market share in the narrow-body sector.

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