Leeham News and Analysis
There's more to real news than a news release.
Pontifications: Airbus nears 800 sales for A220, but major challenges continue
Aug. 15, 2022, © Leeham News: Airbus now has nearly 800 orders for the A220, but the program is years from profitability and production faces supplier challenges like those facing the Airbus A320neo and Boeing 737 MAX.
Airbus A220-300. Credit: Leeham News.
Passenger experience easily exceeds the older design A320 and 737. The A220’s 2×3 seating, 18.5 inch window/aisle seats, 19-inch wide middle seat and wide aisle draw kudos. The windows are larger than the older airplanes. Economics are better than promised by Bombardier, which designed the airplane as the C Series.
Exiting Commercial Aviation
By Scott Hamilton
Development costs, neglect of the Bombardier Q400 and CRJ programs and concurrent development of two new corporate jets nearly bankrupted Bombardier. To save itself, Bombardier exited commercial aviation and killed one of the two corporate jet developments. The Q400 program was sold to Longview Aviation, which rebranded the turboprop its original name, the Dash 8-400, and adopted the legacy company name, De Havilland Canada.
The CRJ program was sold to Mitsubishi Heavy Industries. MHI had little interest in the CRJ regional jet. Interest was in acquiring the CRJ global product support and MRO system as a groundwork for the M100 SpaceJet it was developing. (MHI later changed CEOs in its policy of rotating the leadership. The new leaders killed the SpaceJet program, the reason for buying the CRJ in the first place.) MHI last year seriously considered restarting production of the CRJ. This idea was abandoned only last month.
The C Series was sold to Airbus in 2017, the first of Bombardier’s commercial programs to go. The impetus was a complaint filed by Boeing with the US Department of Commerce in 2017. While Commerce was assessing the complaint, Bombardier agreed to sell 50.1% of the program to Airbus. BBD was committed to fund construction of an assembly plant at Airbus’ Mobile (AL) complex and cover up to $700m in losses. (Commerce eventually upheld Boeing’s complaint and levied a 292% tariff. But the required review by the Court of International Trade found Boeing suffered no harm in a deal with Delta Air Lines that triggered the complaint. The CIT’s finding killed the tariff.)
Bombardier was unable to fulfill its commitments to Airbus, which eventually bought out Bombardier’s remaining share of the program. (A Quebec, Canada, pension fund still retains about 25% ownership of the program.)
Bjorn’s Corner: Sustainable Air Transport. Part 32. Mixed architectures, Part 2.
August 12, 2022, ©. Leeham News: Last week, we looked at two eVTOLs that don’t fit the terminology we use; Multicopters, Vectored thrust, or Lift and Cruise, the Vertical VX4, and the Archer Maker. We look at Airbus’ CityAirbus NG this week, a Lift and Cruise design like no other (Figure 1).
Figure 1. The Airbus CityAirbus NG. Source: Airbus.
The industries’ CASM trap
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By Bjorn Fehrm
Introduction
August 11, 2022, © Leeham News: The airliner world measures efficiency in CASM, Cost per Available Seat Mile, and RASM, Revenue per Available Seat Mile. An airliner with more seats then has lower CASM or RASM.
Looking at seat counts, we can see that the hottest selling single-aisle, the Airbus A321neo, is closing the gap to widebodies like Boeing’s 787-8 and Airbus’ A330-800.
So it’s CASM, and RASM should be phenomenal. Or is it? Are we comparing correctly, or are these Apples and Oranges comparisons? We use the cabin generator of our airliner performance model to understand it better.
Summary
- The measurement of economics per seat makes sense for internal airline work.
- When comparing different airliner types in the same size class or between types (single-aisle, widebody), it’s the wrong method.
Dual or Single Aisle for Long Haul, Part 3
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By Bjorn Fehrm
Introduction
August 4, 2022, © Leeham News: We’ve been analyzing whether flying long-haul is better with a single-aisle or with a widebody under identical conditions.
To have equal conditions, we fly between Milano and New York at the practical range limit for our single aisle, Airbus A321XLR. We finished the analysis of Cash Operating Costs; now, we look at passenger and cargo yields and the generated margins on the trips.
Summary
- The margins with identical conditions point the same way as the Cash Costs.
- Any cargo traffic on the route will favor the widebody.
Dual or Single Aisle for Long Haul, Part 2
Subscription Required
By Bjorn Fehrm
Introduction
July 28, 2022, © Leeham News: Two weeks ago, we started looking at the most economical way to fly long-haul. The single-aisle alternative or stay with the trusted widebody?
We laid out a route on the practical range limit for an Airbus A321XLR, Milano to New York. With typical headwinds (as we fly west), it’s close to 4,000nm for the aircraft. The first analysis was for fuel burn. Now we add other costs to form Cash Operating Costs.
Summary
- The fuel burn points one way, the Cash Operating Costs another.
- The background is different costs scale differently with size.
Farnborough Air Show winds up with post-pandemic slow pace
By Scott Hamilton
July 22, 2022, © Leeham News: The Farnborough Air Show produced little in the way of headline news. But Boeing comes away with some momentum. Airbus announced a big order on July 1, well ahead of the show, from China, leaving show orders in high double digits.
Boeing announced orders and commitments for 278 737 MAXes, including 100 firm and 30 options from Delta Air Lines. This order was the first from Delta in 11 years, ending a long-running behind-the-scenes streak of sour relations between the companies.
The order, for the 737-10 MAX, finally fulfills Boeing’s goal of getting the -10 into Delta. Boeing had counted on Delta being a launch customer of the airplane in 2017. As reported in my book, Air Wars, The Global Combat Between Airbus and Boeing, the bake-off between the MAX 10 and the Airbus A321neo came down in favor of the MAX 10. But CFM declined to grant Delta TechOps rights to perform maintenance, repair and overhaul for other airlines and lessors. Pratt & Whitney agreed, tipping the order to Airbus.
Also during the competition, Boeing was engaged in a trade complaint over Bombardier’s sale of the C Series to Delta. Boeing alleged Bombardier engaged in price-dumping, contrary to trade laws. Boeing won the trade complaint and a tariff of 292% was assessed on each C Series imported from Canada. However, the final review found no harm to Boeing, which hadn’t competed for the order, a required element to impose the tariff. Many observers thought Boeing’s timing concurrent with the MAX-neo campaign affected the decision. But as reported in Air Wars, Delta officials said this wasn’t a factor.
Airbus prepares contrail flight tests
July 21, 2022, © Leeham News at Farnborough Air Show: Airbus is converting two Arcus high-altitude gliders to check if the contrails produced by hydrogen combustion engines create an environmental problem.
The background is that experts can’t agree if the water vapor produced by hydrogen combustion (which merges hydrogen with oxygen to water) can cause global warming or not. The only way to resolve the dispute and gain fundamental knowledge is to fly and measure.
Figure 1. First flight with the Blue Condor program’s test aircraft. Source: Airbus.
Few orders at Farnborough Day 3
By Alex Derber
(c) Airfinance Journal, July 20, 2022
The Farnborough Air Show is all but over with a few orders announced on Day 3. Airbus executives have now left the show, with no more orders expected from them.
Airbus, Boeing, Embraer, ATR orders at Day Two of Farnborugh
By Alex Derber
(c) Airfinance Journal, July 19, 2022
Commercial aircraft
– Airline investor 777 Partners placed firm orders for 30 737 Max 8200 aircraft and agreed to a further 36 commitments for the high-density Max model. The aircraft have been earmarked for 777 Partners’ two airline investments: Flair Airlines in Canada and Bonza Airline in Australia.
– Porter Airlines exercised purchase rights and signed a firm order for 20 Embraer 195-E2 passenger aircraft, adding to its existing 30 orders. Porter’s first delivery is scheduled for the second half of 2022, when the Canadian carrier will become the North American launch customer for the E195-E2, while will be powered by Pratt & Whitney Geared Turbofan engines.
– Aercap ordered five additional 787-9s, taking its existing and on-order portfolio for the widebody family to 125 units.
– Aviation Capital Group ordered 12 additional 737 Max 8s, which have expanded the lessor’s Max order book to 34 aircraft.
– Delta Air Lines confirmed additional orders for 12 Airbus A220-300 aircraft. The US airline has now ordered 107 A220-family aircraft, the first of which it received in late 2018. The aircraft are powered by Pratt & Whitney Geared Turbofan engines.
Assessing future twin-aisle production rates
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By Vincent Valery
Introduction
July 18, 2022, © Leeham News: There were 98 twin-aisle passenger aircraft deliveries in 2021, the lowest number since 1987 (90). The 2021 tally was down 73% compared to the peak of 362 deliveries in 2015.
Credit: Boeing
The minimal number of Boeing 787 Dreamliner deliveries in 2021 explains why 2021 twin-aisle passenger deliveries fell so low. However, the twin-aisle passenger market slowed down before the Covid-19 pandemic. The travel restrictions imposed during the pandemic brought long-haul traffic to levels last seen in the 1950s at the start of the jet age.
With international travel restrictions progressively lifting, long-haul traffic is gradually recovering. However, the draconian travel restrictions imposed by China and the closure of the Russian airspace to numerous airlines have slowed down the return of demand.
Airbus and Boeing reduced passenger twin-aisle production rates to a minimal: five per month on the A350 and 787 (before the production issues) and two per month on the A330neo. Boeing stopped producing 777-300ERs, with one unit pending delivery to China Southern Airlines. The extensive 777X production delays led Boeing to halt its production.
In its 2021 Commercial Market Outlook (CMO), Boeing envisioned a market for 7,670 passenger twin-aisle deliveries over the 2021-2040 period.
LNA analyses the size of the passenger twin-aisle market, both for replacement and growth. The goal is to assess the range of possible twin-aisle production rates over the next two decades.
Summary
- Outlining the analysis hypothesis;
- Assessing production rates for replacements;
- An outsized impact of growth assumptions;
- Geopolitical and environmental considerations;
- A segment with more uncertainty.