Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Does an Airbus A220-500 need a new wing and engines? May 1, 2025
- Teamsters, Boeing have a new contract April 29, 2025
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
Filling the production gap for A330 and 777 Classic: huge challenge ahead
Two orders were announced this week for the Airbus A330 and Boeing 777-300ER, important for filling the production gaps of each airplane. In the aggregate, the current backlogs go through 2016, though in reality, they stream beyond that date. See our charts below.
Airbus announced an order for 27 A330s from China, but these were the airplanes long frozen in the push-back by China against Europe in the emissions trading scheme objected to by China and a number of other countries. China routinely freezes airplane orders (among other commercial deals) to express its political displeasure.
At current production rates for the A330 or 10/mo, this adds 2.7 months to the Airbus backlog, but offset with deliveries, the aggregate backlog (i.e., if all deliveries were bunched together) means the backlog ends in 2016. With the Chinese order, Airbus announced 31 sales year-to-date.
Large debris field spotted in MH370 search–is it from the airplane?
A large debris field has been spotted in the search for Malaysian Airlines flight MH370. A satellite from Airbus Defence and Space photographed 122 large and small pieces of something. Searchers are en route to eyeball and recover this to determine if the debris is from the plane.
We plotted the location and created this image to further illustrate the remoteness of the location. This is at the edge of the potential search zone we plotted shortly after the airplane disappeared.
We also added the reported and estimated flight paths, though we were unable on this scale to include the several reported turns within the Strait of Malacca area. There are distinct turns from the intended flight path (and several more within the Strait of Malacca that were reported) which, to us, indicates a pilot-in-command of some kind, rather than a “ghost” airplane.
As we linked yesterday, former pilot John Nance believes a criminal act took illegal command of the airplane and then once on the southward tract put the plane on auto-pilot and then depressurized the airplane, killing all on board. The Boeing 777 then flew south to fuel exhaustion.
Odds and Ends: MH370 tracking; Garuda rules out A380, 747-8; last 747-400 flight; E-Jet vs Turbo-props
MH370 tracking: With Britain’s Immarsat and the Air Accident Investigation Board key to determining the general location of Malaysian Airlines Flight MH370, The London Telegraph has one of the best narratives of of the behind-the-scenes story of how this came about. The London Independent also has a good story. And here is a story that explains the difficulties of searching in remote oceans.
- Update, 10:30am PDT: Aviation analyst and former pilot John Nance is profiled in this Puget Sound Business Journal account that includes’ Nance’s theory of MH370. It’s an intriguing theory. He believes this was a deliberate act–either terrorism or murder-suicide–and that once the flight settled out southbound from Malaysia, it was set on auto-pilot and all aboard, including the pilot, were killed by asphyxiation. The airplane flew until it ran out of fuel and crashed into the Indian Ocean; he even gives a speed and angle-of-attack estimate.
Garuda rules out A380, 747-8: The Australian reports that after planning to order either the Airbus A380 or Boeing 747-8 last year, officials have ruled this out.
Last 747-400 flight: Japan’s All Nippon Airlines plans to complete its last Boeing 747-400 flight this month, ending an iconic era in the country where 747s once ruled the skies.
E-Jet vs Turbo-Props: At the ISTAT conference last week, we reported that Embraer says its E-175 E2 is more efficient than similarly sized turbo props on missions of more than 250 miles. This story in The Economic Times of India follows through on this theme.
Odds and Ends: Change in Boeing’s supply chain management; the Ukraine; Bearish mood toward cargo P2F
Boeing supply chain: Stan Deal, VP and GM of Boeing Commercial’s Supply Chain management, has been appointed to SVP of Boeing Commercial Aviation Service, replacing Lou Mancini, who is retiring.
Boeing CAS serves customers with aircraft maintenance issues, aircraft-on-ground (AOG) situation and it was the entity that fanned out across the globe to install the battery fixes following the grounding of the 787 fleet. CAS is a significant revenue and profit contributor to Boeing’s bottom line.
The Ukraine: The turmoil in the Ukraine has ripple effects in aerospace. Bombardier, which last year signed an agreement (yet to be firmed up) to sell 100 Q400s to Russia and establish an assembly line there, has seen talks to conclude the deal slow. At the ISTAT conference this week, we were asked if we thought Airbus, Boeing and other OEMs would see sales of titanium slow; Russia is the largest supplier. (Our opinion was probably not, but with Russia, who knows?)
Bearish cargo market: Despite a slight uptick in cargo traffic in January and February, according to data compiled by IATA, the mood toward cargo airplane conversions was decidedly bearish at the ISTAT conference.
While single-aisle P2F conversions are holding up, widebody P2F conversions and new-build main deck sales remain anemic at best. Increasing reliance on the belly capacity of the Boeing 777-300ER, Airbus A330-300 and Boeing 787 cuts demand for dedicated freighters.
No stress on the order backlog, says Airbus at ISTAT
Airbus doesn’t see any “stress” in its aircraft order backlog, or “skyline,” says Andrew Shankland, senior vice president of leasing markets from the European manufacturer.
Shankland spoke with us at the annual meeting of the International Society of Transport Aircraft Trading, held Monday and Tuesday this week in San Diego.
Persistent concerns are expressed about an “order bubble,” including during the ISTAT conference. Shankland told us in an interview that “we don’t see any stress; we meet every two weeks” in a process Airbus calls its “watch tower” (Boeing calls its process the “war room”).
“As long as we can move things around, and we have a pretty rigorous process to be sure every plane has a home,” Airbus doesn’t see any issue with its skyline, Shankland said.
Steven Udvar-Hazy, CEO of lessor Air Lease Corp, sees Asia as a high risk region where huge orders have been placed by carriers such as AirAsia and Lion Air, both big A320 customers. AirAsia just announced deferral of 19 A320s this year and next. AirAsiaX also has large orders for the A330 and A350, recently deferring some A330s “until the time is right.” Shankland wouldn’t discuss any individual customer, and only generally noted that Airbus and Boeing have successfully “manipulated” the skyline in the past when deferrals or even cancellations occur.
Shankland isn’t involved in Airbus’ analysis of whether to proceed with the prospective A330neo, but acknowledged that the business case for the airplane “remains to be seen.”
Public pressure mounts on Airbus to launch A330neo
Public pressure is building on Airbus to launch a re-engining of its A330 medium-sector, twin-aisle, aging airplane as CIT Aerospace and Air Lease Corp. officials joined Delta Air Lines and AirAsia in their previous overt calls for development of an A330neo. Lufthansa Airlines is understood to be seeking a neo behind the scenes.
GE Aviation and Rolls-Royce are encouraging Airbus to proceed with a neo as a platform for their GEnx and Trent 1000 TEN engines. The GEnx is used on the Boeing 747-8 and the 787; the Trent 1000 TEN is used on the 787.
Lessors analyze market conditions in commercial aviation at ISTAT
The final presentation at ISTAT was the popular lessors’ panel, a free-wheeling discussion of commercial aviation issues. The reporting summarizes and paraphrases the comments.
The moderator is Jeff Knittel, president of CIT Aerospace.
The lessors are:
Angus Kelly, CEO of AerCap
Mark Lapidus, CEO of Amedeo
Norman Liu, CEO of GECAS
Raymond Sisson, CEO of AWAS
Steven Udvar-Hazy, CEO of Air Lease Corp
Knittle: when we were sitting here 10-15 years ago, the six lessors sitting here would largely represent the leasing industry. Now there are 20 or so in China, more elsewhere. The market is fragmentized.
Hazy: The newcomers don’t have the relationships or experience in buying in bulk even though they are capitalized but they have a long way to go.
Lapidus (a new lessor) says people are learning pretty quickly how to do business. (Amedeo is the former Doric Leasing, which finances Airbus A380s.)
Kelly: Although the names on the door have changed, the people running them really haven’t changed. New capital is coming in because there is greater return on capital than in other areas. They want to come in because they see this attraction but they want to do so on a smaller basis. The number of true global lessors hasn’t changed all that much.
Airbus and Boeing square off at ISTAT
Andy Shankland, senior vice president of leasing markets for Airbus, and Randy Tinseth, vice president of marketing for Boeing, were next up at the ISTAT annual meeting in San Diego today.
The following is a synopsis and paraphrasing of their presentations and free-wheeling discussion.
CIT Aerospace looks at A330 future
CIT Aerospace, one of the Top Tier lessors in the business, takes a look at the future options of the Airbus A330.
In a short paper released concurrent with the start of the AGM of ISTAT, the International Society of Transport Aircraft Traders, in San Diego today, CIT’s Steve Mason outlines what he sees as the options facing Airbus to improve sales.
The four page PDF may be found here.
We have production rates of 14 Boeing 787s a month (vs 16 in the CIT analysis) and 10 Boeing 777Xs a month (based on Boeing’s own information) vs eight in the CIT analysis, but otherwise the CIT analysis is very similar to the issues we’ve written about here previously, so we won’t repeat them. We presented yesterday to the ISTAT Appraisers Continuing Education meeting about the production gap facing Airbus, Boeing and Embraer between their current airplanes and future programs, a topic we’ve also discussed here previously. CIT and we concur that Airbus has a major dilemma with the A330 going forward; we believe Airbus should proceed with the A330neo, which should extend the life of the airplane by 10-15 years. Absent this, we believe Airbus will be at a major production rate disadvantage in the important 210-400 seat twin aisle sector.