Leeham News and Analysis
There's more to real news than a news release.
Embraer weighs in against Honeywell-UTC merger
Fred Curado, CEO of Embraer
March 1, 2016, © Leeham Co. Embraer joined Airbus and Boeing in opposing the potential acquisition by Honeywell of United Technologies Corp.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting on presentations and news from the sidelines.
- Update, 0800 MST: Honeywell withdrew its $90bn bid for United Technologies, it was announced this morning.
UTC rejected the merger—which came to light last week—but it is unclear if Honeywell will continue to pursue the idea.
ISTAT Day 1: Engine updates for CFM, GE, RR and PW
Feb. 29, 2016, (c) Leeham Co.: The LEAP engine, for the Boeing 737 MAX, Airbus 
A320neo and COMAC C919 is the fastest-selling engine in history, says Jean-Paul Ebanga, the president of CFM International. More than 10,000 have been sold.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.
“It’s on-time and on-spec,” Ebanga said. It’s either been on the date set four years ago or ahead of schedule. The engines delivered to Airbus for the A320neo are on spec, he said. It’s been certified for the neo and will be certified soon for the MAX, with 90% of the information submitted.
ISTAT Day 1: Leahy’s biggest fear: producing enough planes to meet demand
Feb. 29, 2016, (c) Leeham Co: Aircraft lessors financed 48% of the Airbus deliveries in 2015, with direct sales and sale-leasebacks, says John Leahy, chief operating officer customers for Airbus.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.
“Lessors are a key and integral part of our strategy,” Leahy said. Airbus only financed 2% of its own products last year. Export Credit Agencies financed only half the numbers of Boeing, he said.
Leahy does not see a downturn any time soon.
ISTAT Day 1: Boeing developmental airplanes progressing
Feb. 29, 2016 (c) Leeham Co.: The Boeing 737 MAX rolled out on time, the 787-10 is in production and the 777-9 is in firm configuration, says Randy Tinseth, VP-Marketing for Boeing Commercial Airplanes.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.
Boeing is watching oil prices, the global economy, geopolitical hot-spots, cargo demand and several other factors for the near-and long-term.
ISTAT Day 1: Used 777 values depend on engines, leases
Feb. 29, 2016 (c) Leeham Co.: The Boeing 777-200ER is not worth $7.7m or even $10m, but $37m to $47m, according to four appraisers who appeared today at the ISTAT AGM.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.
Doug Kelly of the consulting/appraisal firm Avitas notes that the Rolls-Royce Trent-powered 777s are, indeed, the least desirable airplanes. GE or PW-powered airplanes commands a $7m premium, he said.
AerCap is selling 777-200ERs with leases attached for more than $50m, Kelly said.
Pontifications: Boeing sued over program accounting
By Scott Hamilton
Feb. 29, 2016, (c) Leeham Co.: It was inevitable: a class action lawsuit was filed last week against The Boeing Co., its top officers and directors over the investigation by the US Securities and Exchange Commission of the company’s program accounting.
The lawsuit was filed last Wednesday.
The lawsuit alleges “among other things, that defendants issued materially false and misleading statements and/or failed to disclose that: (i) Boeing’s use of program accounting for its 787 Dreamliner and/or 747 jumbo aircrafts relied on inflated sales forecasts; (ii) Boeing’s use of program accounting for its 787 Dreamliner and/or 747 jumbo aircrafts relied on understated estimates of production costs; and (iii) as a result of the foregoing, Boeing’s public statements were materially false and misleading….”
Bjorn’s Corner: Flight tests
By Bjorn Fehrm
19 February 2016, ©. Leeham Co: Last week I described how Mitsubishi Aircraft Corporation (MAC) issued a press release on Christmas day communicating MAC would be doing structural reinforcements on their test airframes before continuing flight testing. MAC was perhaps overzealous when informing the world that they would do minor reinforcements to two ribs and a few stub spars in order to pass Ultimate strength tests for the aircraft.
I rightfully thought this is the Japanese culture at play; there must not be a big problem behind it.
There was one more area of that press release that intrigued me. Here what it said: “The first flight and the subsequent flight tests have confirmed the basic characteristics to be satisfactory. However, we also have recognized several issues as we attempt to accelerate our development.”
Time to decrypt this as well and compare to what has become standard industry practice.
Airbus Group 2015 results: A330 increase to seven per month
By Bjorn Fehrm
24 February 2016, ©. Leeham Co: Airbus will increase the production rate of the A330
from six per month to seven beginning next year, it was announced today. The move comes after reducing the rate from 10 to nine and then to six per month as demand fell for the A330ceo ahead of the development of the A330neo.
Strong sales of the ceo resulted in the about-face to increase the rate.
The news came from the Airbus Group financial results for full year 2015 today in London.
In all other aspects it was a year of solid execution with revenue up 6% to €64.5bn. Profits stayed flat at €4bn despite record deliveries; the A350 and A400M ramp-ups are costly exercises.
Other highlights were;
IRKUT MC-21 analysis, Part 2
By Bjorn Fehrm
Subscription required.
Introduction
Feb. 24, 2016, ©. Leeham Co: Two weeks ago we started our analysis of the new Russian single aisle aircraft, United Aircraft’s Irkut MC-21. We looked at key design features and compared these to the Airbus A320.
We also analyzed the passenger capacity where we found that the model which will start flight testing, the MC-21-300, has a capacity between the A320 and the A321. The closest aircraft in capacity and performance in the MC-21 lineup versus the competition would be the MC-21-200 and A320neo.
We have therefore decided to do our efficiency analysis between these variants.
Summary:
- The MC-21 has a wider fuselage than the A320. This is a positive as it allows passengers to pass each other in the aisle of the cabin.
- The drawback of the wider fuselage is a bit higher aircraft drag.
- Coupled with a lower wing aspect ratio, the lighter MC-21 cannot open a fuel consumption advantage over the A320neo, despite being a more modern design.