Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Engine makers tout “Plan A” but have “Plan B” backups in R&D June 23, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 27. June 20, 2025
- Pontifications: A Personal Note June 19, 2025
- Airbus books 142 firm orders as Boeing retracts from the Paris Air Show June 19, 2025
- AIN Media Group Agrees to Acquire Leeham News & Analysis June 17, 2025
Used B777-200ER or A340-300?
Subscription required
By Bjorn Fehrm
Introduction
Nov. 26 2015, ©. Leeham Co: In recent articles we have latched on to the debate around the prices for used Boeing 777-200 aircraft. Contrary to the market appraising companies’ ideas about second hand values, our surveys show that not only the Airbus A340-300 is cheap in the market but the Boeing 777-200ER is also available at interesting prices.
This, coupled with sustained low fuel prices, makes for interesting opportunities. Charter destinations can be reached which were not possible with less competent aircraft and it is possible to lease or purchase these long range aircraft to backfill an expanding route network while awaiting or even postponing delivery of the latest technology aircraft.
We decided it was time to take a look at which of the two would be the better choice as a long hauler of 300 passengers to destinations of up to 5,000nm. We use our proprietary model to find out which one is the most suitable given different conditions, such as cabin makeover or not. We will also introduce aircraft deterioration to the calculations to map the reality of an older aircraft.
In this first article, we will establish the base values for the aircraft and find their cash operating costs. In a subsequent article, we will add capital costs where we will look at different purchase scenarios and refurbishing options and how these affect the overall direct operating costs.
Summary
- The 777-200ER and A340-300 are very close in most dimensions.
- The 777-200ER is the slightly larger and heavier aircraft. Thanks to more effective engines, it can compete on fuel costs.
- When the other costs are added to make up cash operating costs, the higher weight and more expensive engines start to eat up any fuel cost advantages the 777-200ER has.
State investment in Bombardier further mockery of WTO
Nov. 24, 2015, (c) Leeham Co. With the $1bn investment by the Province of Quebec in the Bombardier 
CSeries program, another example of government funding emerges in commercial aviation development.
Setting aside whether the investment might be challenged before the World Trade Organization—and whether this makes good business sense for Quebec—the move makes a mockery of the entire concept of avoiding government support.
The turbo-prop conundrum: small market, high costs
ATR Turbo-prop. Photo via Google images.
Subscription Required
Introduction
ATR and Bombardier are incumbents. China has a home-market offering.
Indonesia and India want to create a product.
It’s the 60-seat and up turbo-prop market.
It’s too many companies chasing too-small a market.
Summary
- The 20-year demand for 60-99 seat turbo-props is small.
- Developing a new, clean-sheet design is costly.
- There is a solid demand for an inexpensive 19-34 seat turbo-prop—but nobody is interested.
Pontifications: “I’m glad you’re not going far.”
By Scott Hamilton
Nov. 23, 2015, (c) Leeham Co. An Airbus A321 is blown out of the sky over Egypt.
Two Air France jumbo jets are diverted due to bomb threats.
ISIS stages multiple, simultaneous attacks in Paris. Additional attacks are thwarted. Police raids in Belgium take place.
ISIS is declared a clear and present danger in Europe and the US.
The worries on a global basis are obvious. Being far more parochial, given the focus of LNC, what is the impact and potential impact on commercial aviation?
Bjorn’s Corner: Production rates
By Bjorn Fehrm
20 November 2015, ©. Leeham Co: Emirates Airline CEO, Tim Clark, is quoted as having said “it takes them forever to get this thing up.” He was talking about the Airbus A350 production rate and his reasons for delaying Emirates’ decision on what to buy for the airlines medium range needs. Clark said Emirates wants more aircraft in operational use before they can evaluate the operational characteristics of the A350.
Emirates want to see at least 20 aircraft in operation and right now it is about seven to nine that fly every day. Actual deliveries stand at 10 with one month to go before the first anniversary when deliveries started (the first A350-900 was delivered to Qatar Airways on the 22 December 2014).
Looking at how many aircraft that are actually flying, one can agree with him. It seems actual production rate is more like one per month rather than the three to four a month that Airbus talked about at the first delivery ceremony.
So why is this? Is the production of A350 therefore in serious trouble? What is taking them so long? Has Emirates pointed to a weak part of the A350 program?
Europe’s airlines: LCC, the winning formula
By Bjorn Fehrm
Nov. 18 2015, ©. Leeham Co: Easyjet revealed record numbers yesterday with pretax profits now at 14.6% of a year turnover of £4,686m. The load-factors for their aircraft are at a record 91.5% on a 12 month basis, with an increase of 1.5% for the period. The return on employed capital has increased to a high 22.2% from 20.5%.
The LCC now transports 69m passenger per year and continues to increase its capacity and efficiency. Airbus yesterday announced that easyJet has signed a firm order for a further 36 A320 Family aircraft, taking its cumulative order for the type to 451. The agreement for six A320ceos and 30 A320neos makes easyJet one of the world’s biggest airline customers for the A320ceo Family with 321 ordered and also for the A320neo, with 130 on order.
Earlier in November Ryanair had announced their record results, further manifesting their investment grade rating. At the same time Europe’s largest airlines, Lufthansa and Air France-KLM, are engaged in difficult negotiations to reduce their personnel costs, a mission riddled with strikes and confrontation. The once reliable Lufthansa is no longer.
What is the reason for this divergence in the market? Read more
Emirates’ 615 seat A380, is it more economical?
By Bjorn Fehrm
Subscription required.
Introduction
Nov. 11, 2015, ©. Leeham Co: Emirates Airline showed off its newly delivered two class A380 at this week’s Dubai Air Show. With a record 615 seats, this is the densest A380 that has been delivered by Airbus.
Emirates have reached this record seat number by replacing the first class cabin (and showers) with economy seats. Part of the business area has gone as well. What remains on the Premium side are 58 of the well known lie-flat seats and the ubiquitous Emirates bar.
The aircraft is aimed at high density destinations which are reached within a 12 hours limit, therefore the aircraft has no crew rest facilities.
The question is, what improvements in seat-mile costs does this configuration bring and how does it stack up against a similarly configured Boeing 777-300ER or 777-9?
Will there be a change in the economical pecking order compared to the more classical long range configurations that we looked at December last year?
We used our proprietary performance model to find out.
Summary:
- To be fair to all aircraft, we equipped them with similar high density two class cabins.
- We also kept the ratio of business-to-economy seats the same for all cabins.
- The result is high capacity workhorses that are used for flying passengers and cargo at sector lengths of up to 12 hours. Consequently, none of the aircraft have crew rest facilities.
- We then looked at fuel efficiency, Cash Operating Costs and Direct Operating Costs for these long-haulers now given a mostly mid-haul work scope.
Emirates’ mid-range choice
By Bjorn Fehrm
Nov. 10 2015, ©. Leeham Co: The Dubai Air Show is on its second day and there are no mega orders. The one that should have been, the mid-range requirement for Emirates Airline, has been postponed, not only to “next year” but for “another year.”
What is the reason? Are we seeing a widebody oversupply fueled by used Boeing 777s/Airbus A330s being available in the market “for very low prices,” as suggested by Delta Air Lines CEO Richard Anderson? Are these the first signs of a damping of an order bonanza which has been going on for five years? Will things be more quiet (or should we say normal) going forward?
We don’t think so. Emirates just want to make the right choice and the equation has got more complicated as it has been working the problem. And it is in no hurry.