Leeham News and Analysis
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Leeham News and Analysis
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Chinese 737 Completion Center makes tactical, strategic sense
Sept. 22, 2015, © Leeham Co. The expected announcement by Boeing and Chinese President Xi during
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President Xi of China. Photo via Google images.
his state visit to Seattle this week that Boeing will develop a Completion Center for the 737 in China is a significant event that may one day lead to an assembly line there.
Boeing’s touch labor union, the IAM 751, was predictably critical. In a post on the 751 website last week, the union said, “In a previous meeting with Renton’s 737 leadership we saw a brief presentation outlining Boeing’s perceived market conditions regarding sales of single aisle aircraft and the company’s desire to collaborate with China. We have asked the Company for details of what is intended with “collaboration” and have not received ANY information on “collaboration” or confirming or disputing the media reports. While we don’t know specifics of any such proposal, ANY shift of aerospace jobs from our bargaining unit or Washington State causes grave concern.”
Pontifications: Dueling refueling tankers
By Scott Hamilton
Sept. 21, 2015, © Leeham Co.: This Friday, Sept. 25, is the date that at long last, Boeing and the US Air Force expect the first flight of the KC-46A that is equipped with the fueling system.
A “bare” KC-46A made its first flight last December. Then it spent the next six months or so on the ground. First flight of the second KC-46A, the one with the fueling system, has been delayed several times. All the program margin is gone and it’s going to be a challenge for Boeing to stay on schedule to deliver 18 combat-ready KC-46As to the USAF by 2017–two short years away. To try and stay on schedule, Boeing started production of the the airplane concurrent with the flight test aircraft, a risky proposition that could result in major rework or other difficulties if Murphy’s Law comes into play.
The KC-46A is the successor to the KC-767 International tanker program, which was an industrial disaster. Only eight airplanes were produced, four for Italy and four
Boeing KC-46A makes its first flight Sept. 25, 2015. Photo via Google images.
for Japan. It ran years late and hundreds of millions of dollars over budget. There were flutter and design issues. These problems became part of the risk assessment by the USAF in the KC-X competition evaluation between Boeing and Northrop Grumman/EADS–and one of the reasons why the Air Force selected the Northrop KC-330 offering (later named the KC-30).
Boeing successfully challenged the contract award and won the next round with what became known as the KC-46A. Boeing claimed it benefited from lessons learned from the KC-767 International program.
Bjorn’s Corner: Engine efficiency
18 September 2015, ©. Leeham Co: The debate around the market’s two single aisle combatants is quite heated, with fans of the one side saying “the limited space for a high bypass engine on the 737 MAX will cripple it forever” and the other side saying “the tighter design of the 737 will make it highly competitive against the A320neo, it is the A320 which has a weight and size problem”.
One of the arguments is that each inch of engine fan diameter brings 0.5% in increased propulsive efficiency. Therefore the A320 with up to 81 inches fans will win against the 737 MAX, which has a 69 inch fan. Having all the tools to check out if this is really the truth, I fed our airplane model with all the facts and looked at the result. It’s not so easy, guys…
A320 FAL “good for US aerospace,” says Airbus
Sept. 16, 2015, © Leeham Co., Mobile (AL): The opening of the Airbus A320 Final Assembly Line here
achieves a major set of goals set by the company 10 years ago for its own strategic purposes, but officials are also mindful of the larger impact on US aerospace.
David L. Williams, VP Procurement, Airbus Americas. Photo via Google images.
Top executives point out that the Mobile plant reestablished a second commercial aviation assembly site in the US since the last MD-11s and MD-95s rolled out of the former McDonnell Douglas plant in Long Beach (CA) after its acquisition by The Boeing Co in 1997. Boeing continued production of the MD-11 until the end of 2000 (with deliveries occurring in 1Q2001). The last MD-95, renamed the Boeing 717, was produced in 2006. There were 200 MD-11s and 156 717s produced.
With nearly 10 years elapsing between that last 717 and the first A321ceo coming out of Mobile, Airbus officials say the creation of the FAL is not only good for Airbus and Alabama, it’s good for US aerospace.
New single aisles on home stretch
By Bjorn Fehrm
16 Sep 2015, © Leeham Co.: Boeing released pictures yesterday of the first 737 MAX 8 being on the Renton Final Assembly Line (FAL) having completed the wing-to-body joins. With the Airbus A320neo now flying again with both Pratt & Whitney GTF and CFM LEAP test vehicles and Bombardier completing 85% on CSeries (having passed 2,400 hours of flight testing), one can say the new single aisles are on their home stretch.
737 MAX on the Final Assembly Line at Renton, Seattle. Source: Boeing.
Original planning had the CSeries entering service in December 2013, nearly two years before A320neo (October 2015) and four years before the 737 MAX (4Q2017). With the 737 MAX now on the FAL one can start to review the Entry into Service (EIS) for all three. It will be tighter than the companies have said.
Airbus Mobile FAL a victory for CEO Enders
Sept. 14, 2015, © Leeham Co., Mobile (AL): The opening of the Airbus Mobile (AL) A320 Final Assembly Line (FAL) is viewed by some close associates as a personal victory for Tom Enders, the chief executive officer of Airbus Group.
Enders began the quest of a US FAL 10 years ago, when EADS (then the name of Airbus’ parent, now Air Group) joined with Northrop Grumman to bid on the US Air Force Refueling Tanker, the KC-X. The Boeing Co. was the competition, and supplied tankers to the USAF since the end of World War II.
Pontifications: Boeing view of market conditions today
By Scott Hamilton
Sept. 14, 2015, © Leeham Co.: Randy Tinseth, Boeing’s VP Marketing, spoke with Bernstein Research last week on a variety of topics. In a note issued after the conversation, analyst Douglas Harned reported:
- “Boeing views the 140 orders to date as a good start, and that high demand for this model will come later when it is closer to being in service. Boeing is sold out for all models of the 787 through the decade, so there are few opportunities for near/medium term deliveries in any case. The company sees the 787-10 as a natural replacement for 767s, A330s and some 777s, and expects that these will drive strong replacement
Randy Tinseth. Photo: Boeing.
demand in the early 2020s.”
- “Airlines have been upgauging narrowbodies away from the 737-700 and A319. Boeing expects that the 737-900ER will gain share, but that the 737-800 (or soon the 737MAX-8) will remain its most popular narrowbody. Airlines have been moving to larger narrowbodies and using slimline seats to add capacity to existing airplanes. Boeing believes that, while this trend does exist, the market will be centered on the 737-800/A320-size airplanes, but with a larger share than in the past going to 737-900s/A321s. Boeing believes that its product set offers greater flexibility since the 737-800 and 737-900ER are closer together in size that are the A320 and A321.”
- “In terms of orders for the 777, the companyis sold out in 2016 and is over 60% sold out for 2017, with many campaigns in progress. Production of the 777X would start in 2018 and current 777 rates will be lowered to introduce the 777X in the final assembly line (consistent with our projections). There are some 737NG slots left in 2018 and 2019, but the first available slots for the 737MAX are now in 2021.”
Airbus FAL in Mobile (AL), Part 2
Sept. 13, 2015, (c) Leeham Co., Mobile (AL): The new Airbus Final Assembly Line (FAL) opening today here will serve the US market, a plan that follows the philosophy when the company opened an FAL in
Barry Eccleston, president and CEO of Airbus Americas. Photo via Google images.
Tianjin, China years ago.
Just as that plant is intended to serve the Chinese airlines and lessors, so is this one for the US market.
Barry Eccleston, president and COO of Airbus Americas, said there remains plenty of growth in the North American market, which is considered mature in the global airline industry.
Traffic is going to go up 40% over the next 20 years, he said. Ninety percent of this 40% will come from existing routes, says Eccleston. This means the airliner are buying larger airplanes. A major number of the orders are for the A321s, which can carry up to 240 passengers.
“Our original plan was to open the Mobile plant with A320s, but it is with A321s.”
Even at 4/mo, the Mobile facility isn’t filing the need for A320s in the North American market, Eccleston said. There is a demand for nearly 6,000 passenger and freighter aircraft in North America over 20 years: 4,730 single-aisles, 1,000 twin aisles and 170 A380s.
Airbus ‘confident’ engine makers can ramp up production
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Introduction
CFM makes about 50% of the engines on the A320 Family and has about 50% of the backlog for the New
Tom Enders, CEO of Airbus Group. Airbus photo.
Engine Option version. Pratt & Whitney has about the same market share for the NEO, depending on what month it is, with a large number of orders for which no engine has been selected.
Airbus and Boeing are each studying whether to ramp up production of the A320 and 737 families above the record rates already planned.
In an interview Sunday with Leeham News and Comment in advance of the A320 Final Assembly Line opening here, Enders said studies continue whether to take A320 production rates to 60 a month. Boeing is studying rates of 60-63 a month.
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Posted on September 17, 2015 by Scott Hamilton
Airbus, Boeing, CFM, Leeham News and Comment, Pratt & Whitney, Premium
737 MAX, A320NEO, A380, A400M, air force tanker, Airbus, Airbus Group, Boeing, CFM, Fabrice Bregier, John Leahy, KC-46A, KC-X, Pratt & Whitney, SkyMark, Tom Enders, Transaero, USAF, Virgin Atlantic Airways