Leeham News and Analysis
There's more to real news than a news release.
Pontifications: Countdown to Delta’s single-aisle decision
By Scott Hamilton
Dec. 11, 2017, © Leeham Co.: Eyes will watch Atlanta (GA) this week, when the Delta Air Lines Board of Directors decides to award a big order for the re-engined Airbus and Boeing single aisle airplanes.
The Board meeting is believed to be Thursday. At stake: 100 orders and 100 options for either the Airbus A320neo or Boeing 737 MAX families.
I wrote about this last week. Here’s an update.
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Embraer’s improved E-Jet E2
By Bjorn Fehrm
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Introduction
December 07, 2017, © Leeham Co.: Embraer is four months from first service introduction of the new generation E-Jet, the E190-E2, with Norway’s Wideroe. Following the smooth E190-E2 program will be the larger E195-E2 in 2019.
Embraer’s E2 update of the E-Jet is more elaborate than the Airbus A320neo and Boeing 737 MAX updates. In addition to new engines, the aircraft’s wings and systems are changed. In addition, the fuselages are stretched on two of the three models for increased passenger capacity.
We analyze the areas of change from the original E-Jets and what these mean for the operations and economics of the aircraft.
Summary:
- The E-Jet E2 keeps the strong point of the original E-Jet, its comfortable cabin, and improves other areas to keep the family competitive after 2020.
- As the only aircraft family in the market (regional or mainline), the E2 models E175, E190 and E195 all get their own optimized wings. The result is good field and range performance paired with low fuel consumption.
- The E2 family introduces advanced Digital Fly-By-Wire to allow reduced static stability and by it trim drag. This improves the fuel consumption further.
- Other system changes focus lower maintenance costs. The new single-aisle generation (A320neo, 737 MAX) lowers maintenance costs per seat. The regional OEMs must respond.
Airbus’ strategy for the A330-800
By Scott Hamilton
Dec. 6, 2017, © Leeham Co.: The A330-800 entered the final assembly line last week at the Airbus production plant in Toulouse, France, amid doubts in the industry that the airplane will be produced beyond the prototype.
The first A330-800 is on the Final Assembly Line at Airbus. Source: Airbus.
There is only one order for the sub-type, six from Hawaiian Airlines—and Hawaiian is expected to cancel the order. The airline is running a competition between the Airbus A350-900 and the Boeing 787-8/9, according to market intelligence.
Pontifications: Delta’s decision on neo vs MAX near
By Scott Hamilton
Dec. 4, 2017, © Leeham Co.: The Delta Air Lines management decision for an order for 100 Airbus A321neos or Boeing 737 MAXes, plus an equal number of options, is expected this week. A decision by the Board of Directors is expected next week.
Competition between the two companies was heated. Commercial terms were aggressive. Airbus and Boeing each want this deal badly. An Airbus win speaks for itself. For Boeing, a MAX order would give a boost to the MAX 10. A blocking move on Airbus is desired. For Boeing, a win would be especially meaningful.
Relations between Boeing and Delta are notoriously strained. These were exacerbated by Boeing’s complaint with the US government over the Bombardier C Series order, in which Boeing alleged price dumping and illegal subsidies. To no surprise, the Trump-led Department of Commerce found in favor of Boeing on both.
Would a 767 stopgap make sense while waiting for NMA?
By Bjorn Fehrm
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Now open to all readers.
Introduction
November 30, 2017, © Leeham Co.: We have covered Boeing’s deliberations whether to restart 767-300ER passenger version production here and here.
To understand how good a stopgap the 767-300ER would be for an airline needing to replace ageing 767s, and the Boeing 797 not being there in time, we check its economics versus the alternatives.
Should an airline buy additional 767-300ERs (if offered) or the overqualified and therefore more expensive 787-8? Or is defecting to the Airbus A330-200/-800 a better option?
Summary:
- The 767-300ER takes about 30 fewer passengers than the 787-8 or A330-200/-800.
- It’s lighter than the longer range 787 and A330s; therefore landing fees will be lower.
- Its lower weight and smaller size also lowers crew costs.
- The lower costs for fees and crew can’t fully compensate for higher fuel and maintenance costs per passenger.
- It will be up to aggressive pricing to close the gap to the more capable and lower cost 787-8 or A330-200/-800, should Boeing restart the passenger 767 line.
Airbus, Rolls-Royce and Siemens develops Hybrid-Electric demonstrator
By Bjorn Fehrm
November 29, 2017, © Leeham Co.: Airbus, Rolls-Royce and Siemens yesterday announced they will fly a hybrid-electric demonstrator by 2020, E-Fan X (Figure 1).
The aircraft, a BAe 146 four engine regional jet, will have one if its turbofans replaced by a Rolls-Royce/Siemens electric fan propulsor. The demonstrator is part of a technology program exploring the challenges around electric flight.
Figure 1. BAe 146 based hybrid electric demonstrator with electric propulsor. Source: Airbus
Leahy reflects on 33 years at Airbus
John Leahy will retire in January and stay for a short transition to help his successor, Eric Schulz, who was named EVP, Chief of Sales, Marketing and Contracts. Leahy is Chief Operating Officer-Customers. During his three-decade long tenure at Airbus, the company moved from a single-digit market share to surpassing Boeing for more than a decade in sales. Leahy spoke with LNC about his retirement.
John Leahy, right, with William Franke, CEO of Indigo Partners at a history-making deal for 430 A320neos, announced at the Dubai Air Show. Photo via Google images.
Nov. 28, 2017, © Leeham Co.: John Leahy was a salesman at Piper Aircraft, a small general aviation aircraft producer when he received a call from a headhunter to join Airbus North America as its top salesman.
Leahy was head of marketing at Piper. With a pilot’s license, he would take various Piper aircraft to conventions or air shows and on sales calls for demonstration.
“It was great fun,” he said. “It was really an enjoyable job.” Leahy said Piper was consolidating everything in Vero Beach (FL) and he wasn’t sure he wanted to move there. He wanted a more direct sales role and accepted a position with Piper in Geneva, Switzerland, as Director of the Eastern Hemisphere. “I felt that was pretty cool.”
Before moving, the headhunter called.
Eric Schulz new Airbus Commercial Aircraft sales manager
By Bjorn Fehrm
November 28, 2017, ©. Leeham Co: Eric Schulz, President of the Civil Aerospace division at Rolls-Royce, has been appointed as the successor of John Leahy, COO-Customers, at Airbus.
Schulz will join Airbus as EVP, Head of Sales, Marketing & Contracts for the Commercial Aircraft business end of January 2018.
Leahy, also called Mr. Airbus by his customers, is retiring after having sold 16,000 aircraft over 33 years at Airbus. Leahy will stay on until early spring 2018 to help the transition to Schulz.
Schulz has been heading Civil Aerospace at Rolls-Royce since January 2016. He joined Rolls Royce in February 2010 as Chief Operating Officer of Gas Turbine Services and ran the Civil Large engines business from 2013.
I met Schulz at the Airbus A330neo first flight a month ago, where he headed the Rolls-Royce group. He is a very approachable and I got a good impression after only 10 minutes of discussion, while waiting for the A330neo to taxi in after its first flight.
Schulz is of French origin but speaks perfect English after 10 years in the US. He worked as president for EADS’ and Northrop Grumman’s EADS Aeroframe company (who successfully sold the Airbus A330 for the US Air Force tanker program, which was overturned on appeal by Boeing) and then president of Goodrich Actuation Systems until joining Rolls-Royce in 2010.
Schulz is now going full circle, as his first job after Masters Degrees at the Ecole d’Ingenieurs of Geneva and ESTA Engineering and Technology School (Paris), was at Airbus (then Aerospatiale).
Boeing’s good year for wide-body orders
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Introduction
Nov. 27, 2017, © Leeham Co.: Officials from Airbus and Boeing each said this year that wide-body orders, languishing for the past couple of years, should pick up by the turn of the decade as the in-service fleet reaches 20-25 years old.
Aerolineas Argentinas plans a wide-body competition for deliveries around 2020-2021. Photo via Google images.
But Boeing has had an exemplary year through Nov. 21, the most recent update of its Orders and Deliveries website. The company reported 160 net orders for the 767, 777 and 787, with 88 for the latter. Commitments for 40 more at the Dubai Air Show are not included, as these have not yet been firmed up.
Airbus hasn’t done nearly as well: just 56 net orders for the A330 and A350 families through October, its most recently reported data.
Have Boeing’s results indicated a sooner-than-expected uptick in orders?
Summary
- Not enough data to draw definitive conclusions, but uptick may be arriving early.
- Aerolineas Argentinas and Thai Airways are looking at wide-body aircraft orders. See the stories here and here.
- Early this year, 5-year slump was seen. By August, strong market seen.
Pontifications: Scrutiny of HNA intensifies
By Scott Hamilton
Nov. 27, 2017, © Leeham Co.: Time for some catch-up in the world of commercial aviation.
Scrutiny of HNA Group is intensifying as regulators in Switzerland claim the Chinese company provided false information in the takeover of a Swiss aerospace company.
Additionally, Airfinance Journal reports that at least five lessors have seen delayed lease payments from HNA Group airlines ”as HNA pumps cash from those carriers into other areas of the highly leveraged conglomerate.”
And HNA’s Hong Kong Express low-cost carrier has been barred from further expansion until it fixes problems identified by the Chinese government.
LNC reported in September that HNA was coming under credit pressure due to its high leverage.
In addition to a plethora of airline investments, HNA owns one of the world’s largest aircraft leasing companies, Avolon.