Feb. 10, 2016 © Leeham Co. Boeing has a product gap that Airbus is filling with its airplanes, says Simon Pickup, strategic marketing director.
Pickup said Boeing has a gap in its product line between the 737-8 and the 787-9. The 737-9 and 787-8 aren’t selling, creating a hole in the market for Boeing that is filled by Airbus.
Feb. 10, 2016: Today is the second of three days of conference meetings organized by the Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.
The A321 and the smaller A330 fill this gap, says Pickup, who noted the A321neo outsold the 737-9 by 9:1 in the last two years and the A330-200/800 dramatically outsold the 787-8 during the same period.
Posted on February 10, 2016 by Scott Hamilton
Feb. 10, 2016: Large commercial aircraft deliveries hit just under $104bn in 2015, a 4.9% gain over 2014. Regional aircraft values, however, were just $7.1bn, a decline of 10.5% year-over-year, said Richard Aboulafia, a consultant with the Teal Group.
Deliveries of all aircraft types, including military, rotocraft, etc., saw only a 0.6% increase YOY. Jetliners account for 60% of the total values.
Posted on February 10, 2016 by Scott Hamilton
Randy Tinseth, VP-Marketing for Boeing, said forecasts predict oil as low as $7/bbl and as high as $80/bbl–as always, “giving themselves a lot of leeway.”
Asia remains the top growth market, adding 100m passengers every year (the size of Atlanta’s international airport, the world’s busiest, which served 100m passengers lasgt year.
The cargo market has been challenged over the last six years, and it comes and goes, but it will come back when trade comes back, Tinseth said.
The single-aisle market represents 70% of the market and half the value, including Airbus and all other competitors.
“We as an industry and we as a company have to focus on doing the right things…and build at the right cost” to be successful, Tinseth said.
He said that given the total forecast of 35,000 airplanes from regional jet to Very Large Aircraft, there is a need for 60% of the sales still to be made.
Tinseth said the company will deliver fewer 737s this year because the supply chain can’t keep up as the transition between the NG and MAX takes place.
Update: This email was received later from Boeing’s Corporate Communications department:
I wanted to touch base on this bullet in your coverage of Randy’s PNAA presentation.
After talking to Randy, I believe his response was lost in translation.
He was making the point that the transition to MAX is the reason we’ll deliver fewer 737s—because we’re producing several MAX airplanes this year that won’t deliver until 2017.
On a follow up question about separate production lines, he was simply making the point that the NG and MAX share a common supply chain.
So the supply chain is delivering precisely to our 42 per month rate. We’re producing 42 per month, but won’t be able to deliver to that rate this year due to MAX certification.
His point was the opposite of “can’t keep up.” Our suppliers are doing exactly what we need them to do. We can’t expect them to deliver at a rate higher than 42 right now just so we can build more NGs to make up for the MAXs that won’t deliver this year. And of course, that would go against our own rate hike schedule.
China’s market has slowed, but the government is restructuring the economy but “we see robust, double-digit growth” for the future, he said.
Despite the fluctuation of oil prices, “we haven’t seen a change in the replacement pattern,” Tinseth said. Aircraft reach maintenance requirements, interior upgrades and certain ages that simply need replacement.
Posted on February 9, 2016 by Scott Hamilton
Aerospace clusters are evolving throughout the world, said Kevin Michael, vice president of ICF International.
California is on the decline. Two new clusters on the rise are Mexico and the Southeastern US. The Netherlands and Singapore are successful, long-term clusters.
California was the premier aerospace cluster for decades, but its demise began when Lockheed chose Georgia as the location to build the C-130. The founding of Airbus was not good news for SoCal, and neither was the end of the Cold War. The acquisition of McDonnell Douglas by Boeing in 1997 further precipitated the decline of SoCal.
Posted on February 9, 2016 by Scott Hamilton
By Bjorn Fehrm
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Introduction
Feb. 08, 2016, © Leeham Co: We recently covered China’s COMAC C919 and now the time has come to the other new narrow body aircraft from the old Communist bloc, the Russian MC-21.
The aircraft is called Irkut MC-21. Not many have heard of Irkut, so the first reaction is that this aircraft is made by a new Russian aircraft firm. The change is that United Aircraft (the Russian aircraft industry holding company) this time called the aircraft after its manufacturing company and not the design bureau, Yakovlev, that Irkut acquired in 2004. There are discussions to change back to the project’s original name Yakovlev 242 once certification is done.
When we looked at the first civil airliner that the Russian federation designed after the fall of Soviet Union, the Sukhoi Superjet 100, we found a well designed aircraft equipped with Western system. The MC-21 follows the same lines, but has more Russian technological development. It is therefore well worth a look.
Summary:
Posted on February 8, 2016 by Bjorn Fehrm
By Bjorn Fehrm
2 February 2016, ©. Leeham Co: The Boeing 737 MAX flew for the first time Friday. On Saturday it was in the air again. Boeing has communicated they will deliver the first aircraft to Southwest next year in the third quarter. We doubt it.
It will be earlier, barring a major problem cropping up (and the chances are good there will be none).
Delivery of aircraft projects ahead of time is almost unheard of. And when it is Boeing that looks like being early, people start to think about the Dreamliner debacle. It was over three years late.
We would say: absolutely be skeptical, but in this case, there is reason for optimism.
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Introduction
The news of orders by Iran Air and ANA for 12 and three A380s respectively is good news for Airbus, but these probably don’t do much to boost the backlog in practical terms.
These orders will likely replace some of those in the A380 backlog that are unlikely to be delivered.
In our annual examination of the backlogs of Airbus and Boeing, little has changed for the A380—until the Iran Air and ANA orders, there hasn’t been a sale of the A380 in more than two years.
Summary
Posted on February 1, 2016 by Scott Hamilton
29 January 2016, ©. Leeham Co: In the corner of two weeks ago we did a retrospective of 2015. Time for looking ahead. The year of 2016 will be quite interesting. We had entry into service of the first re-engine single aisle aircraft this week, the Airbus A320neo, the same week as we expect first flight from its main competitor, Boeing’s 737 MAX 8. We will also see first flight of the Embraer E190E2 and A350-1000 before the year is over.
The Mitsubishi MRJ shall go test flying in earnest and Bombardier’s CSeries 100 and 300 shall enter service. On top of that, the COMAC 919 will probably start ground roll tests this year and we should see roll out of Irkut’s MC-21. I would say 2016 is a busy year for civil aviation.
In the 2015 corner we talked a lot about engine technology as a key driver to further efficiency of air transportation. Now will dissect the airframe technology that all these new projects will bring us. Read more
Posted on January 29, 2016 by Bjorn Fehrm
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Introduction
Jan. 27, 2016, © Leeham Co. As Airbus prepares to hike production rates of the A320 family to 60/mo by the end of the decade and Boeing mulls whether to boost 737 rates above the announced 57/mo announced today, some question whether the companies should do so.
The questions become more frequent as falling fuel prices make the need for the fuel efficient A320neo and 737 MAX appear to be less compelling. The economic turmoil in China adds to uncertainties.
Today we take a look at the 737 order book, based on Dec. 31 data, and extrapolate this to announced and potential future production rate hikes, and draw conclusions whether the rates announced and those under study make sense.
We will look at the A320 backlog in a future post.
Summary
Jan. 27, 2016: Boeing’s outlook for 2016 disappointed Wall Street for lower-than-expected revenue, earnings per share and delivery projections, spurring a sell-off in the stock by almost 10% in the first hour of trading before the earnings call.
Because of a late Tuesday night story in The Seattle Times that a production rate cut in the 777 Classic line was coming, analysts expected this news. Boeing made it official: the 777 rate to 7/mo in 2017, a figure that was telegraphed in pre-Paris Air Show briefings last year. Boeing says it is confident of maintaining this production rate until entry-into-service of the 777X in 2020.
The production of the 737 will increase to 57/mo in 2019, which was forecast by LNC last year.
Posted on January 27, 2016 by Scott Hamilton