Leeham News and Analysis
There's more to real news than a news release.
Etihad clears the decks
By Bjorn Fehrm
August 2, 2017, ©. Leeham Co: “Etihad, where to now?” was our headline on our May review of the Gulf airline. The 2016 revenue and earnings were not clear at the time.
Etihad group has now released the results, with a group loss of $1.9bn on revenues of $8.4bn. This is a shortfall of almost a quarter of the turnover, a dramatic change from a profit of $259m the year before.
. Read more
Pontifications: Boeing-Bombardier complaint revisited
By Scott Hamilton
July 31, 2017, © Leeham Co.: It’s been in a quiet period in the trade complaint between Boeing and Bombardier.
The issue moved over to the US Department of Commerce (DOC) after the US International Trade Commission (ITC) concluded there were grounds to continue the probe. Then Boeing moved for a two-month delay, to September. There it sits. But as July moves into August and with the September decision date around the corner, it’s time to revisit the issue.
Airbus group 2Q results: Engine deliveries decides 2017 results.
By Bjorn Fehrm
July 27, 2017, ©. Leeham Co: Airbus Group presented its 2Q2017 results this morning. The result for the first half and the full year of 2017 is decided by A320neo engine deliveries.
Out of a planned 200 A320neo deliveries for the year, Airbus could deliver 54 aircraft during the first half, with 35 completed aircraft waiting for engines on the Airbus tarmac.
Mid-year production update at Airbus
July 27, 2017, © Leeham Co.: It’s mid-way through 2017 and LNC is taking its second look at production and delivery stream flows for the Big Four airframe manufacturers.
We examined Boeing Monday in advance of its earnings call Wednesday. Today we look at Airbus in advance of its earnings call today. We look at Bombardier and Embraer next Monday.
We use the Airfinance Journal Fleet Tracker as the basis for our exam.
Pontifications: JADC 20-year forecast: VLA, NMA and other data
By Scott Hamilton
July 24, 2017, © Leeham Co.: The Japan Aircraft Development Corp (JADC) just published its 2017-2037 jet and turboprop forecast. JADC forecasts a demand for 33,336 jet airliners and some 2,000 turboprops.
JADC is partly owned by Mitsubishi, which is developing the MRJ70/90 and which is on several Boeing programs.
I like the JADC forecast because it segments the seating categories in more detail than Airbus and Boeing and somewhat differently than Bombardier and Embraer.
I also view JADC as having less of an axe to grind than the Big Four OEMs.
A couple of quick take-aways:
Caution overhangs 777X program-(Update)
Update: This story is corrected.
July 21, 2017, © Leeham Co.: Lufthansa Airlines’ indications that it may reduce the order for 20 Boeing 777-9s underscores caution with which the program should be viewed.
Emirates Airline already rescheduled its first deliveries from 2020 to 2021.
The largest customer for the 777X, with 150 orders, EK is now pressured with falling profits, excess capacity and it’s one of three Gulf airlines under attack by the Big Three US carriers for alleged violations of Open Skies pacts.
Boeing 787 payback gap widens
By Bjorn Fehrm
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Introduction
July 20, 2017, © Leeham Co.: The 787 Dreamliner is now on its sixth delivery year, well past half calendar time in the program’s 1,300 unit accounting block (for the explanation of accounting block and program accounting read here).
Within two quarters we also reach half time for deliveries at 650 aircraft. Production cost improvements must now create a margin, so that the $30b deferred costs to date can be amortized by remaining units. Is the margin created? Not so far.
We will know more in a week’s time. Boeing has its 2Q2017 call next week, where the production cost improvements can be monitored through the decline of the $30bn deferred costs. Right now, the decline is at a slow pace.
Summary:
- Program accounting means deferred production costs shall be nil at the end of the accounting block.
- Right now, there is $30bn to amortize and not too many aircraft left that can pay the sum.
- We explore the payback margins necessary to reach a black nil at 1300 units.
Is Norwegian in trouble? Part 2
By Bjorn Fehrm
July 19, 2017, © Leeham Co.: Last week we raised the question if Norwegian Air Shuttle was in trouble. The CFO, Frode Foss, left a few days earlier. Analysts were worried and the stock dived 8%.
Last Friday, the airline presented its 2Q2017 result. An optimistic report. New destinations, increasing revenue and a profit of NOK 861m ($107m). But the stock tanked further, now down 11%. What’s behind the increased worry?
Business case for NMA remains uncertain
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Introduction
July 17, 2017, © Leeham Co.: We’re half way through 2017. Boeing reported orders through July 11, a week ago. Airbus won’t update its July orders until the end of the month.
Through July 11, Boeing reported 116 net wide-body orders: 15 for the 767, 33 for the 777 and 75 for the 787. Net cancellations of -7 for the 747 are included in the net 116 figure.
The 15 767s were not commercial models, however, but 767-2C tankers for the USAF.
Over at Airbus, none of China’s 40 commitments announced July 5 for 40 A350s are in the June summary, and won’t be in the Orders tally until the commitments turn into firm orders. Through June, airbus had net 26 widebody orders: three A330-200s and 29 A350-900. There were cancellations of four A330-800s and two A380s.
If the 40 China A350s were included, this would bring Airbus to 66 widebody orders, still well short of Boeing’s YTD figure.
Summary
- Airbus product gap widens as A330-200/800 stalls.
- Boeing 787 strength comes from 787-9; 787-8 remains minor player.
- Middle of the Market business case still unproved.
Pontifications: Mississippi’s aerospace footprint
By Scott Hamilton
July 17, 2017, © Leeham Co.: Living in the Seattle area, the highest profile, dominant industry is the commercial aerospace sector.
Boeing, of course, headlines just about everything when it comes to aviation.
Boeing’s competition is principally Airbus—or at least it used to be until Boeing claimed teeny tiny Bombardier, a company one-sixth the size of Boeing’s revenues, is poised to put Boeing out of business with BBD’s CSeries.