Leeham News and Analysis
There's more to real news than a news release.
Odds and Ends: Hawaiian commits to A321neo; Emirates A380; JAL 787
Hawaiian commits to A321neo: Hawaiian Airlines has committed to the Airbus A321neo, contingent on new employees contracts setting rates for staffing the aircraft. The A321neos will be used on Hawaii-mainland services. This validates Airbus’ design of the 321neo to give it better range than the 321ceo for just such service. Bloomberg has this story. Since this order is contingent, we wonder if it will be included in the final Airbus tally for orders, to be announced January 17.
Emirates could use 30 more A380s: It’s not especially new news but here’s a story about Emirates Airlines saying it could use 30 more A380s. Airbus’ John Leahy said there was a significant order for A380s pending. We wonder if this is it, to be announced January 17.
Japan Air Lines 787: A JAL 787 parked at Boston Logan Airport has an smoke/fire related incident today. The plane had completed a flight from Tokyo and had disembarked all passengers. Here is a detailed story.
Odds and Ends: PNAA Aviation Conference; AA-US merger review; UAVs in USA; SPEEA-Boeing; 2013, Part 2
PNAA Conference: The Pacific Northwest Aerospace Alliance holds its annual conference Feb. 12-14 in Lynnwood (WA), north of Seattle. This event is now the largest of its kind in the Pacific Northwest and the first or second largest of its kind on the West Coast. The top airframe manufacturers present, along with key aerospace analysts (including the ever-entertaining Richard Aboulafia) and key suppliers. There is a Suppliers Fair and this year for the first time a focus day on the airline industry. Follow PNAA @pnaalliance on Twitter.
American-US Airways merger review: This should be concluded within weeks, says AMR CEO Tom Horton.
UAVs in USA: Rules on the use of UAVs within the US are emerging and vary widely throughout the world.
SPEEA and Boeing: A reminder that SPEEA contract negotiations resume with Boeing next week on January 9. Based on conversations with SPEEA, we don’t expect things to go well. SPEEA told us–and pretty much anyone else–that it believes the gap between it and Boeing is so wide that it expects talks to break off quickly. A strike vote will follow and a target date for a strike is February 1. SPEEA filed another Unfair Labor Practice complaint this week over Boeing taking pictures of SPEEA marchers at the Everett plant.
The year ahead, Part 2: Earlier we posted our Leeham.net look at 2013. Here’s what we did for CNN.com, in a somewhat broader look.
Odds and Ends: Asia’s LCCs; Fiscal Cliff Deal; Boeing v Airbus; Desert Airplanes
Asia’s LCCs: Aviation Week has this lengthy piece about Asia’s Low Cost Carriers. Update: Financial Times has this in-depth look at AirAsia vs Lion Air. (Free registration required.)
Fiscal Cliff Deal: The can was kicked down the road and Wells Fargo has this assessment on the affect on the Defense Department:
Sequestration Postponed. The bill passed does not prevent the sequestration procedure from automatically reducing defense spending by $500B over the next ten years, including $50-55B of potential reductions from FY2013. Instead, it postpones the deadline for an agreement from January 2, 2013, to March 1, 2013,–a two-month extension. At that time, the DoD will have three weeks to determine how the sequestration will be implemented, with the reductions kicking in on March 27, 2013, rather than on the same day under the original sequestration legislation. The lack of planning time for the sequestration contributed to the uncertainty of its impact, which the new legislation appears to resolve.
Boeing v Airbus: It certainly looks like Boeing sold more airplanes in 2012 than Airbus, but the annual Airbus press conference is January 17 and you never know what last minute orders John Leahy has up his sleeve. We doubt Boeing is celebrating just yet.
Desert Airplanes: It’s an old story for those of us who follow this sort of thing but the photos are always interesting. CNN has this story, with pictures, of where airplanes go to die.
American to decide on merger Jan. 9, Bloomberg says
American Airlines’ Board of Directors will meet on Jan. 9 to decide whether to merge with US Airways, according to this report by Bloomberg News.
The outcome, of course, has ramifications beyond those employees of both airlines. These include, in no particular order:
- A shift in the oneworld and Star Alliances. US Airways is part of the Star Alliance, though its route system is hardly a key part. Since US says it will adopt the AA name, look for US to move into the oneworld alliance. An AA-US merger strengthens AA’s East Coast reach, but other than this we’ve not seen a great deal of routes that US brings to AA. On the other hand, AA brings a lot more to US.
- Airports will see revisions to facilities as both airlines consolidate.
- Some cities will see reductions in service as duplications are eliminated.
- If the US management is the one that emerges in charge (as we hope), then this will be a major plus for the future of the new American Airlines. If AA’s management is the survivor, we’re much less sanguine about AA’s future.
- Airbus and Boeing should both benefit. Before bankruptcy, American placed orders for hundreds of current generation A320s and 737NGs as well as the re-engined models. US has a large order for A320ceos and A330s, but no A320neos. American’s fleet replacement need is so large that it probably needs both single-aisle OEMs. We could see some adjustment in the orders, which never were firmed up, and taking into account the US outstanding orders. But we’d be surprised if the new AA were to cancel entirely American’s Airbus or Boeing orders.
- Nor do we see US canceling its A350 orders in favor of AA’s outstanding 777 order. US is one of the remaining A350-800 customers and this might be upgraded to the A350-900. But we think there was a fair chance of this happening anyway.