Leeham News and Analysis
There's more to real news than a news release.
Boeing’s approach in creating the passenger experience
- The Puget Sound Journal has this story from a Boeing briefing last week detailing how Boeing will try and replicate at least some of the 787 cabin features into the forthcoming 777X.
- In what could be one of the smartest advances in aircraft seating, this design could end the elbow wars.
- Etihad Airlines created “apartments” for its first class section on the Airbus A380.
Passenger experience continues to become more and more of a focus for the Original Equipment Manufacturers, who try to create an atmosphere that’s appealing even as airlines cram more and more seats into airplanes to gain revenue in an environment where ancillary fees often mean the difference between profit and loss.
Cabin ambiance for mainline, and especially intercontinental, jets is a battle that hasn’t gotten much attention until the advent of the Boeing 787. The creation of the Boeing 747, of course, provided unprecedented space and ambiance and the “wide-body” was followed quickly by the McDonnell Douglas DC-10 and Lockheed L-1011. Creating the wide-body look for the single aisle airplanes followed, with improvements subsequently in overhead bins and the look of the ceiling. But it wasn’t until the 787 that there was a dramatic change in the cabin interior look and feel. Boeing expanded this look to the 747-8 and the 737.
Logical conclusions: Airbus wide-body decisions
A330 programme. The long range programme presents no new challenges. However, managing the order book beyond 2016 becomes more challenging due to competition from A350 XWB and Boeing 787.
—From the Airbus Group 2013 Annual Report
We have written previously that Airbus faced a production gap, a major drop in backlog orders from 2016, with no orders at all from 2020 (excluding the 27 orders placed in March by China, for which we don’t currently have delivery data yet). Back on December 29, we noted that the prospect of the A330neo was gaining traction–and it’s even more so today.
Market Intelligence from multiple sources indicate that Airbus will announce at the Farnborough Air Show that it will proceed with re-engining the A330 into a new engine option configuration, including sharklets similar to that on the A320 family.
This will give a needed boost to the A330 line. There have been a dearth of orders, in part, no doubt, to the industry waiting to see whether Airbus will proceed with the A330neo. Recall that there had been a drop in A320 family orders in the run-up to the launch of the A320neo.
We have now completed a comprehensive study about the business case for the A330neo and how competitive it would be vs. the Boeing 787-8 and -9, and what price Airbus has to offer to help make the airplane competitive. This proprietary study is based on our proprietary economic modeling which, along with our own Market analysis, concludes that there is a business case to proceed with the A330neo. We concurrently believe Airbus will discontinue offering the A350-800, although this announcement may not come for some time. Among the reasons: Hawaiian Airlines wants the A350-800 as offering the passenger capacity and the range it desires. The A350-900 is too big, officials currently believe. But an A330-300neo won’t offer the range Hawaiian wants (it will fall about 1,500nm short, according to our estimates). If Airbus discontinues the A350-800, Hawaiian may well re-issue its Request for Proposals that will give Boeing a shot at getting the 787-9 into Hawaiian. Given the planned production boost to the 787 line (12/mo in 2016, 14/m0 in 2018 or 2019), Boeing now has delivery slots to offer to match that of the A350-800 schedule.
But we don’t think Airbus is done once it launches the A330neo. We believe Airbus continues to look at the prospect of re-engining the A380, c.2020, given additional impetus from the large customer for the A380, Tim Clark of Emirates Airlines. This article in The Wall Street Journal is the latest on this topic.
Odds and Ends: Yields vs growth; 757RS continued; 787 wind tests; airport vs environment
Yields vs growth: AirAsiaX, the long-haul, low cost unit of AirAsia Group, faces that perpetual problem: yields vs growth. Reuters has this story about the conundrum of sacrificing profits now for a long-term growth strategy. It’s always a risky bet. AirAsiaX relies on the Airbus A330 today and has the A350 on order.
757RS, continued: Aeroturbopower has now weighed in on the Boeing 757 replacement discussion.
787 wind tests: We’ve all seen cross-wind landing videos, but where does Boeing go to test landing in high wind conditions for its new 787-9? Lubbock (TX), of all places. This local TV report explains why but unfortunately the TV station muffed showing the landing itself.
Airport vs environment: It’s an age-old story, but this one has a bit of a different twist. The New York Times reports about the conflict between the Westchester County (White Plaines) Airport in New York vs trees on an adjacent property.
Passenger Experience: As nice as it is to have lie-flat seats in Business Class (we haven’t had the pleasure of First Class), this photo from the Boeing Stratocruiser days makes even today’s upper-grade passenger experience seem like it falls short.
757 replacement not in the cards any time soon
The unexpected attention earlier this month on the prospect of a Boeing 757 replacement, possibly in the form of a 777X-style concept of composite wings and wingbox, new engines and some system upgrades, brings into focus the Boeing 737-9 and the Airbus A321neo.
- Aspire Aviation has its analysis of the next New Small Airplane here.
Boeing quickly denied, in an unusually firm manner, that it was planning on a “757 MAX” and reiterated it doesn’t currently plan to bring another new airplane to market until the middle of the next decade. We’ve previously reported that based on our information, Boeing will wait until the 777X enters flight testing, estimated for 2018, before launching a new family of airplanes to replace the 757 and 737 MAX—with entry-into-service of the 757 replacement around 2025 and the MAX replacement about two years later.
Odds and Ends: Airbus ponders PIPs for A320neo, says AvWeek; Boeing moves more jobs; MH370 search
A320neo Plus: Airbus is pondering a Performance Improvement Package (PIP) for the A320neo family even before the airplane enters service, according to Aviation Week. The improvements would include an upgraded interior and several systems, designed at providing more carry-on cargo space, more seats and better economy. This fits with a desire to focus on product improvements rather than launching another new airplane program. The prospect of launching the much-discussed A330neo is also referenced in the AvWeek article.
Boeing moves more jobs: The Seattle Times reports that Boeing is moving more jobs out of Seattle, this time also to Southern California. This time these are defense jobs. Boeing has been migrating defense jobs out of Seattle for many years.
Separately, Boeing named its Suppliers of the Year for 2013. These companies are profiled in short videos here.
MH370 search: The Wall Street Journal has a good update of the search for Malaysian Airlines MH370 using the Bluefin 21 unmanned submarine.
Airline food: Here’s an irreverent look at why airline food is bad.
Odds and Ends: Composites in future airplanes; Boeing and Hillary Clinton; 757 MAX; AA swaps A321neo orders; Delta RFP
Composites in future airplanes: Composites World has a post about the use of composites in the future, with a good graphic detailing the increasing use of this material in airliners.
Boeing and Hillary Clinton: The Washington Post has a long story about the relationship between Boeing and Hillary Clinton, while she was US Secretary of State. While the story raises some interesting issues with respect to the prospective presidential candidate in 2016, the points focusing on her advocating for Boeing aircraft purchases doesn’t bother us a bit: that’s what politicians do on behalf of Airbus. As far as we’re concerned, our government should be supporting our industries, too.
757 MAX: The Motley Fool raises the prospect of a Boeing “757 MAX,” which is a restart of the 757 line but with a composite wing and new engines–something along the lines of the 777X in concept. We’ve been hearing rumblings about this, too.
American swaps A321neo orders: American Airlines swapped 30 A321neo firm orders into options, leaving 100 firm orders for this sub-type left. The deliveries were for 2021/22. American told us it retained this flexibility in the original contract and the new management elected to do so in order “to maintain flexibility.”
Delta’s RFP: Airchive has a good analysis of the Delta Air Lines Request for Proposals to replace its wide-body fleet. We were especially interested in the cost analysis of the 787 vs the A330, which is close to our own numbers (there was no collaboration between Airchive and Leeham).