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Introduction
Airbus is poised to produce more medium twin-aisle airplanes than Boeing by the end of 2017 and maintain
the lead into the early 2020 decade, according to production rates that have been announced, unannounced and based on estimates according to production gaps; and other information, a Leeham News and Comment analysis shows.
The wide-body arena has traditionally been Boeing’s to dominate. Although Airbus has outsold Boeing in this sector in recent years, Boeing’s greater production capacity and earlier-to-market 787 vis-à-vis the A350, which will only deliver to its first operator next month, maintained the advantage for Boeing’s market share for years.
The A340 wasn’t a high-demand airplane, eclipsed as it was by emerging ETOPS authority and a highly desirable, very efficient 777 Series.
Airbus and Boeing each face challenges with their aging wide-bodies. The 777 Classic is now on its downward life cycle following the launch of the re-engined, re-winged 777X. Boeing claims it can maintain current production rates of the Classic, but the official line is about the only one that believes this.
Airbus’ A330 Classic, now called the ceo after the launch of the A330neo program, similarly was headed toward sharp declines in the production rates. Airbus quickly achieved 121 commitments for the neo, but first delivery isn’t planned until December 2017 (which probably means 1Q2018) and it still needs to bolster the backlog of the ceo, which drops sharply in 2016. Airbus has been far more transparent than Boeing about the risk to the production rate, and announced a reduction from 10/mo to 9/mo in 4Q2015. We don’t think this will be enough, and Airbus has talked about rates of 7-8/mo.
With this as a backdrop, we believe Airbus will begin out-producing Boeing in medium-wide-bodies within a few years. We leave out the Very Large Aircraft as highly niche. But inclusion would only make the case worse for Boeing. We expect the 747-8 production rate to be cut from 1.5/mo to 1/mo, with an announcement coming as early as next month. Airbus is currently producing the A380 at 2.5/mo.
Summary
- We forecast the crossover point in production favoring Airbus in 2017.
Airbus has notified the supply chain to plan for a higher-than-announced rate of 10/mo for the A350.
- We expect the A330ceo rate to be further reduced, offset by the ramp-up of the A330neo.
- We expect the 777 rate to begin falling in 2017 and continue to fall up to the EIS of the 777X in 2020.
- Ramp up of the 777X rate will take several years, providing Airbus a production rate advantage from 2017 through at least 2022.
- Airbus already has the advantage over Boeing in the single aisle sector. Gaining the advantage over Boeing in the twin aisle sector brackets Boeing in a way that has never been done before.
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Boeing 737 MAX 8 as a long and thin aircraft and how it fares in general versus Airbus A320neo.
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By Bjorn Fehrm
Introduction
Over the last weeks we have looked at Boeing’s 757 replacement possibilities on its long and thin network niche, including a ground breaking launch interview for the A321neoLR with Airbus Head of Strategy and
Marketing, Kiran Rao. In the series we have seen that the A321neo has the potential to replace the 757-200 on long and thin international routes. Boeing’s equivalent single aisle entry, 737 MAX 9, has problems to extend its range over 3,600nm. It is too limited in the weight increase necessary to cover the longer range.
Many have asked how the less- restricted Boeing 737 MAX 8 would fare, suitably equipped with the necessary extra tanks. This is the subject of this week’s sequel on the theme long and thin. At the same time we look at Airbus entry in this segment, the A320neo, to see how it stacks up to the 737 MAX 8, both in their normal 1,000 to 2,000nm operation and then also in a long and thin scenario.
Let’s first summarize what we found so far in our four articles around the Boeing 757 and its alternatives:
Summary
Figure 1. Boeing 737 MAX 8 overlaid with Airbus A320neo. Source: Leeham Co.
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4 Comments
Posted on November 9, 2014 by Bjorn Fehrm
Airbus, Airlines, Boeing, CFM, GE Aviation, Leeham Co., Leeham News and Comment, Pratt & Whitney, Premium, Rolls-Royce
737, 737 MAX, 737NG, A320, A320NEO, Airbus, Boeing, CFM, Pratt & Whitney, Rolls-Royce
Airbus, Boeing freighter demand forecasts optimistic, says P2F company
Special to Leeham News
By Cliff Duke
LCF Freighter Conversions
I have mapped out below the last five years of OEM forecasts (Boeing World Air Cargo Forecasts and Airbus Global Market Forecast data) on widebody conversions calibrated against the actual widebody aircraft conversions redelivered and the current respective order books. If this is half right, it suggests that if in 2010 you were a widebody aficionado and you set your stall out on the Boeing or Airbus 20 year forecasts published that year, you would, reading their 2014 forecasts, now be looking at a 46% reduction in that forecast and your 2010 business plan might be developing cracks.
In terms of performance to date, a quarter the way through the 20 year 2010 forecast (assuming an equal spread of conversions across the 20 years of the forecast) we are currently some 70 conversions behind the Boeing 2010 forecast, a 50% drop off from where we thought we would be. It looks unlikely that the variance can be recovered in the remaining 15 years of the 2010 forecast. In the meantime Boeing and Airbus have updated their 20 year forecasts, and the overall drop off forecast is significant.
One question is, have the OEMs now updated their outlooks enough? Could both forecasts still be too optimistic and could our 2010 investor be looking at a further 50% drop off when revisiting the OEM forecasts in five years’ time (2020)?
Figure 1. LCF Conversions says the Airbus and Boeing 20 year freighter demand forecast have been substantially over-optimistic. Click on image to enlarge for crisp image. Source: LCF
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4 Comments
Posted on November 6, 2014 by Scott Hamilton
Airbus, Boeing
747-400F, 777-200BCF, 777-200ER, 777-300, 777F, A330, A330-200F, Airbus, Boeing, FedEx, LCF Conversions, MD-11, P2F conversions, Passenger-to-freighter conversions, UPS
MD-11’s final pax flights contains lessons for McBoeing as NSA targets 2030
A retrospective of the McDonnell Douglas MD-11 and the last passenger flights for enthusiasts contains lessons for Boeing, or McBoeing as many still call the combined companies.
Despite its many technical advances, most notably on the flight deck, the MD-11 was handicapped from birth by its derivative dependence on the obsolete DC-10. Created on the eve of the era of the fuel-efficient big twin, the MD-11 emerged as a committed three-engined product too early to be redesigned around the new generation of big turbofans. Notoriously starved of serious investment by its ‘MD’ leadership, all attempts by the Douglas product development group to develop either twin-engined or larger stretched versions of the MD-11 sadly came to nothing. (Emphasis added.)
Boeing, burned mightily by the twin program development debacles of the 787 and 747-8, isn’t about to take any more “moonshots,” says CEO Jim McNerney. Yet Boeing is now at a crossroads where another moonshot is needed.
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69 Comments
Posted on November 5, 2014 by Scott Hamilton
Airbus, Boeing
737 MAX, 737-7, 737-8, 737-9, 747-8, 787, A320NEO, A321neoLR, Airbus, Boeing, Dennis Muilenburg, Jim McNerney
Airbus poised to overtake Boeing in wide-body sector, bracket Boeing at both ends
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Introduction
the lead into the early 2020 decade, according to production rates that have been announced, unannounced and based on estimates according to production gaps; and other information, a Leeham News and Comment analysis shows.
Airbus is poised to produce more medium twin-aisle airplanes than Boeing by the end of 2017 and maintain
The wide-body arena has traditionally been Boeing’s to dominate. Although Airbus has outsold Boeing in this sector in recent years, Boeing’s greater production capacity and earlier-to-market 787 vis-à-vis the A350, which will only deliver to its first operator next month, maintained the advantage for Boeing’s market share for years.
The A340 wasn’t a high-demand airplane, eclipsed as it was by emerging ETOPS authority and a highly desirable, very efficient 777 Series.
Airbus and Boeing each face challenges with their aging wide-bodies. The 777 Classic is now on its downward life cycle following the launch of the re-engined, re-winged 777X. Boeing claims it can maintain current production rates of the Classic, but the official line is about the only one that believes this.
Airbus’ A330 Classic, now called the ceo after the launch of the A330neo program, similarly was headed toward sharp declines in the production rates. Airbus quickly achieved 121 commitments for the neo, but first delivery isn’t planned until December 2017 (which probably means 1Q2018) and it still needs to bolster the backlog of the ceo, which drops sharply in 2016. Airbus has been far more transparent than Boeing about the risk to the production rate, and announced a reduction from 10/mo to 9/mo in 4Q2015. We don’t think this will be enough, and Airbus has talked about rates of 7-8/mo.
With this as a backdrop, we believe Airbus will begin out-producing Boeing in medium-wide-bodies within a few years. We leave out the Very Large Aircraft as highly niche. But inclusion would only make the case worse for Boeing. We expect the 747-8 production rate to be cut from 1.5/mo to 1/mo, with an announcement coming as early as next month. Airbus is currently producing the A380 at 2.5/mo.
Summary
Airbus has notified the supply chain to plan for a higher-than-announced rate of 10/mo for the A350.
Read more
4 Comments
Posted on November 5, 2014 by Scott Hamilton
Airbus, Boeing, Premium, Rolls-Royce
777-300ER, 777-8, 777-9, A330, A330neo, A350-1000, A350-1100, A380, A380neo, Airbus, Boeing
Fundamentals of airliner performance, Part 1
By Bjorn Fehrm
As part of our premium content we provide a briefer form of our airliner performance analysis than we provide to our consulting clients. As we present this material, we presume a lot of knowledge on the part of the reader on the definitions we use and how these are employed. We thought it would be appropriate to give an easy-to-digest clinic on some of these definitions and concepts that we are using. Aired at the same time when we run our analysis series, we thereby present the background to our different analysis steps and some of the key parameters that influence these.
We will fly this aircraft in the latest MAX 8 version on a typical short haul mission of 2.5 block hours covering a distance of 1,000 nautical miles. Starting from the cruise we will explain the factors that determine the performance of the aircraft and how we can estimate their influence. As we present the real values for the performance for the aircraft, we can also give the background to the different characteristics that contribute to the overall efficiency of the aircraft. Read more
10 Comments
Posted on November 4, 2014 by Bjorn Fehrm
Airbus, Airlines, Boeing, Leeham Co., Leeham News and Comment
737, 737 MAX, 777X, A320, A320NEO, Airbus, Boeing
Zhuhai Airshow begins Tuesday: order announcements expected
The Zhuhai Air Show begins next Tuesday and a visit by President Obama to Beijing for a regional summit starts on the last day of the show, Nov. 16. Accordingly, we expect at least some orders to be announced during the show by Airbus, Boeing and perhaps the other airframe OEMs, including the home-grown COMAC, developer of the C919 and parent of AVIC, the developer of the ARJ21.
The Zhuhai Air Show has evolved into China’s premier show. While not on the international reputation and prestige of the long-established Farnborough, Paris and Singapore air shows, it’s become an important must-attend for OEMs and others wanting to do business in China.
Here is our forecast for next weeks’ event.
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7 Comments
Posted on November 4, 2014 by Scott Hamilton
Airbus, Boeing, Bombardier, Comac, CSeries, Embraer
737, 777, A320, A330, Airbus, ARJ21, Boeing, Bombardier, C919, Comac, CSeries, Embraer, Zhuhai Air Show
Odds and Ends: C919 EIS in 2020, says consultant; Qantas goes on diet; BBD tables Russia; Swiss not Cseries launch operator
C919/ARJ21: Aviation Week reports that the COMAC C919 might fly be the end of next year and that EIS may be in 2018.
However, Michel Merluzeau, of G2 Solutions in Kirkland (WA), predicts the EIS won’t happen until 2020. Speaking last week before the British American Business Council-Pacific Northwest unit conference in Seattle, Merluzeau said that after a recent trip to Shanghai, where COMAC is, he now sees EIS in 2020, some four years late and 12 years after the program was launched. The C919 competes with the Airbus A320/321 and the Boeing 737-800/8 and 737-900ER/9.
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22 Comments
Posted on November 3, 2014 by Scott Hamilton
Airbus, Airlines, Boeing, Bombardier, CFM, Comac
airlines, ARJ21, Bombardier, C919, Comac, G2 Solutions, Michel Merluzeau, Q400, Qantas Airways
Boeing considers single, twin aisle, co-development 757/767 style for next new airplane
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Introduction
Boeing is looking at a number of scenarios for its New Airplane Study (NAS) that would replace the 757 and 737, have ranges from 4,000nm-5,000nm, and carry as few passengers as 130 or as many as 240.
Boeing faces some hard decisions in the coming years, as Airbus outflanks Boeing in the single-aisle sector with the A320neo family and its latest offering, the A321neoLR. Our analysis and sales figures show the 737 MAX falling further and further behind in market share as MAX 9 lags vis-à-vis the A321neo.
We spoke with Kourosh Hadi, director of product development at Boeing, during a break at a conference last week organized by the British American Business Council-Pacific Northwest, and covered this and a number of other topics.
Summary
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14 Comments
Posted on November 2, 2014 by Scott Hamilton
Airbus, Boeing, CFM, GE Aviation, Pratt & Whitney, Rolls-Royce
737 MAX, 737-9, 757, 757-200, 757-300, 767, 787, A320NEO, A321NEO, A321neoLR, Airbus, BABC-PNW, BACB, Boeing, British American Business Council, CFM, GE Aviation, GE9X, GTF, Kourosh Hadi, LEAP, NAS, New Airplane Study, New Light Twin, New Single Aisle, NLT, NSA, Pratt & Whitney, Rolls-Royce, Ultra Fan
Republic Air once again raises doubts about CSeries order, on eve of BBD’s 3Q earnings call
Republic Airways Holdings, a launch customer for the Bombardier CSeries with 40 orders and 40 options for the CS300–the order that prompted Airbus to proceed with the A320neo program, which itself forced Boeing into the 737 MAX–once again raised doubts about the future of its order.
In its 3Q2014 earnings call Oct. 29, on the eve of Bombardier’s own 3Q call on Oct. 30, Republic CEO Bryan Bedford said two carrier certificates would be needed for Republic to operate the CSeries. Republic is moving toward one certificate from multiple certificates to cut costs and simplify operations.
In a transcript of the earnings call prepared by Seeking Alpha, Bedford addressed the CSeries in response to an analyst question:
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10 Comments
Posted on October 30, 2014 by Scott Hamilton
Airbus, Boeing, Bombardier, CSeries
737 MAX, 787, A320NEO, A350, A380, Airbus, Boeing, Bombardier, Bryan Bedford, CS300, CSeries, Qatar Airways, Republic Airways, Republic Airways Holdings
Aircraft Values of end-of-life A320/737 families to neo/MAX
Special to Leeham News:
From Collateral Verifications
Gueric Dechavanne
Vice President – Commercial Aviation Services
305.908.8695
With the EIS of the Airbus A320NEO and Boeng 737MAX around the corner, we are always asked about our thoughts on the Last-Off-The-Line aircraft and how they will depreciate vs the existing fleet. Based on these requests, we have looked at a few aircraft to see how they depreciated over the last 10-15 years. CV compared a 1999 Boeing 737-400 vs a 1999 737-800 as well as a 2004 Boeing 757-200 vs a 2004 Airbus A321-200. We felt the 757 would be an interesting aircraft to review as there really has not been a direct replacement for the aircraft as of yet.
As you will see from the chart below, the last 737-400 depreciated at a much faster pace than the 737-800. For the 737-400, the average year over year depreciation rate was around 12%. For the 737-800, the year over year depreciate rate has been 5.5% which is more in line with normal deprecation expectations. For the 757-200, the average annual depreciation rate was around 8.5% vs 5.5% for the Airbus A321-200 over the last 10 years.
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6 Comments
Posted on October 29, 2014 by Scott Hamilton
Airbus, Boeing
737-400, 737-8, 737-800, 757-200, A320ceo, A321ceo, Airbus, Boeing, Collateral Verifications
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