Leeham News and Analysis
There's more to real news than a news release.
USAF moves up AF One replacement, reports Inside Defense
Dec. 7, 2014: The US Air Force is moving up the the Presidential Aircraft Replacement program to seek Requests for Proposals next year, according to the specialty newsletter Inside Defense.
The Boeing 747-8 is viewed as the certain selection to become the next Air Force One. Source: Flight Global.
An airframe purchase will occur in 2016, according to the newsletter. Delivery would be in 2018. Boeing, which supplied the two 747-200-based VC-25 aircraft that comprise today’s Air Force One fleet, already has assembled a team for the proposal, Inside Defense reports.
The USAF previously had talked about acquiring replacements in 2021.
Notably, Airbus–which previously said it won’t compete for a new AF One–hedged when asked by the newsletter. Read more
Boeing retains net order lead going into last month of year
Dec. 5, 2014: Boeing retains the lead in net orders going into the last month of this year, although the gap has narrowed considerably–and there are a couple of public campaigns and commitments Airbus has announced or talked about that could shift the year-end balance.
Boeing has been less open about pending campaigns, so it is harder to gauge potential orders this month.
Figure 1. Click image to enlarge.
Year to date, Airbus reports 1,031 net orders and 297 cancellations, including the 70 A350s canceled in June by Emirates Airlines. Boeing 1,274 orders net of 106 cancellations, for a net advantage of 234 orders over Airbus. Airbus previously announced a commitment from Indigo Airlines of India for 250 A320neos and it continues to press China for an order of 70-200 A330 Regionals. Airbus also said it expects an order before the end of the year for the A321neoLR, but the quantity has not been specified. Read more
At what price do used A380s make sense?
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Now open to all readers. (Feb. 15, 2015.)
Introduction
Dec. 3, 2014: It’s been seven years since the first Airbus A380 entered service with Emirates Airlines. Tim Clark, the carrier’s president and chief operating officer, told Leeham News and Comment in September that when the A380s reach age 12-15, the period assumed for a useful life in the Emirates business plan, he’ll just send the airplanes to the desert and cut them up.
Aside from cargo conversions, for which the A380 is a poor candidate, is there an alternative for the secondary passenger market?
Summary
- Secondary markets for Very Large Aircraft are problematic.
- Reconfiguration, overhaul costs add huge dollars to the acquisition cost.
- Is there a figure where a secondary market makes sense?
- The value of a 12 year old A380 is….
Air Canada: 787s have 29% lower costs than older 767s (before the latter’s reconfiguration)
Dec. 2, 2014: Air Canada says its new Boeing 787s will have 29% lower fuel, maintenance and per-seat costs than the old Boeing 767-300ERs being replaced.
Part of this is because the 787s seat more passengers.
But the airline has found new life in the 767s through increased density, shifting them to its low cost carrier, Rouge, which has lower labor costs and overhead. Rouge’s 767s have 30% lower CASM costs than the same airplane at mainline Air Canada. Read more
Oil heading toward $40? Economist still thinks so, with caveats; and: NTSB issues 787 battery report, Azul’s A320/CFM order
Dec. 1, 2014: Adam Pilarski, an economist for the consulting firm Avitas, predicted several years ago that the price of oil would drop to $40bbl. Few believed him.
Oil hit $66 this week, on a steady decline over the past months, and, according to an article by Bloomberg News, could be on its way to $40.
Pilarski, who originally made his prediction in 2011 at a conference organized by the International Society of Transport Aircraft Traders (ISTAT). He predicted this price by October 2018.
In an interview with Leeham News today, Pilarski concurs that oil may hit $40 soon, though he believes the low end will be in the $40-$50 range. The low price will not for the reasons he outlined in 2011 and neither will it stay at or near $40 for long.
MTU investors day: views of its engine programs, future airplane timelines; separately, Embraer COO interview
Figure 1. Technical milestones have been passed on PW GTF programs for the applications on Bombardier, Airbus, Mitsubishi and Irkut airplanes and are approaching for Embraer. Source: MTU Investors Day. Click to enlarge.
Nov. 30, 2014: MTU Investors Day: MTU is a major participant in engine development and supplies, participating on the GEnx, GTF and GEnx program. It’s also a member of the joint venture in International Aero Engines and it’s a major player in the aftermarket Maintenance, Repair and Overhaul (MRO) sector, providing a serious competitive alternative to the aftermarket contracts offered by the engine OEMs. Its held an investors day conference Nov. 25. Highlights included:
- Milestones have been passed on the Pratt & Whitney Geared Turbo Fanengine for the Bombardier CSeries, Airbus A320neo family, the Mitsubishi MRJ and Irkut MC-21; and are on schedule for the Embraer E-Jet E2.
- The success of the GTF is requiring huge production commitments.
- The large number of airplane/engine programs require a major ramp-up of production during the next few years.
- The major investment in new engines is largely over for now, leading to the expectation of long-term revenue from MRO.
Odds and Ends: Storm Warnings; Boeing photos now available to everyone; CSeries; Movin’ on up
Nov. 26, 2014:Storm Warnings: We’ve made references in recent posts about airlines on our “Storm Warning Flag” list.
Our 2013 Top Customers and Storm Warning Flag list for wide-body airplanes. The Red are Middle Eastern airlines, blue from Asia and black from the US and Europe. Only one airline for wide-body orders was on our Storm Warning Flag list: AirAsiaX. Expansion and ordering we considered too rapid landed the carrier on the list. Sources: Airbus, Boeing. Click to enlarge.
In 2013, we compiled the Top Customers for Single-Aisle and Twin-Aisle Airplanes for Airbus and Boeing. Here’s our 2013 Storm Warning Flag list. The name comes from the flag, which signals Storm Warnings. This list was compiled before the 777X orders announced at Dubai were firmed up, so the yellow boxes show what the Top 10 Boeing rankings would be had they been. We considered the quantity of orders, the current operations, financial status and other factors in placing a carrier on our Storm Warning Flag list. The Wide-body list also illustrates the growing importance of the Middle Eastern airlines (consider that this was a year ago). The wide-body list is pretty stable.
Odds and Ends: Korean tanker competition sounds like US rerun; About that blister on the top of airliners; JetBlue explains bags, seats
Korean tanker competition: South Korean is holding a competition for an aerial refueling tanker and in many respects, it sounds like a rerun of the USAF competition between Airbus and Boeing.
In the US contest, major debates happened over Bigger vs Smaller between the A330-200-based KC-330 MRTT and the 767-200ER-based Boeing tanker, which ultimately won and which was named the KC-46A.
This article neatly sums of this same issue in the Korean competition. It’s a matter of greater range, more fueling capacity, vs “enough” and better airport access; and global compatibility.
About that blister: Have you ever noticed the big “blister” in the top of airliner
The “blister” on top of the fuselage contains internet connectivity antennae. The power line appearing to come out of the top of the blister is not part of this. Source: AirlineReporter.com
fuselages? This is for Internet connectivity, an increasingly popular feature on airlines as passengers bring their own Nookbooks, iPads and the like to watch movies or cruise the Net. But aircraft lessors apparently don’t find these features all that desirable and are increasingly talking about having airlines take them out at the end of lease terms. Mary Kirby of Runway Girl Network has this story on the esoteric topic.
JetBlue explains bags, seats: JetBlue is reducing seat pitch and adding bag fees. CFO Mark Powers explains these moves in a Bloomberg News interview.