Leeham News and Analysis
There's more to real news than a news release.
Bankruptcy fears swirl again around American Airlines
With bankruptcy fears swirling again around American Airlines, some questions arise what happens to the orders AA has with Airbus and Boeing if the carrier goes into Chapter 11.
This hand-wringing piece paints a dire picture for Boeing. There is a lot to argue with over this particular writing, but the piece’s headline is particularly off-the-mark. (Note that the writer of the piece and the headline writer may not be the same person.)
Odds and Ends: A380 cost, American’s engine order, ‘war on Boeing’
A380 cost: Flight Global reports that Air France–a launch customer of the Airbus A380–just concluded a lease deal for one of the giant airplanes for a rental of $1.8m per month.
For an airline of Air France’s credit, lease rates are typically on the 0.80% range and sometimes as low as 0.72%. This, then, infers a purchase price of $216m-$230.4m.
American Airlines: It was announced Monday AA split its engine order between CFM (for the Airbus A319) and IAE (for the A321). Given American’s large CFM-powered Boeing 737 fleet, some might think CFM should have won the entire engine deal. But the IAE V2500 is viewed as the better engine for the larger A321–more thrust and lower fuel burn–and American follows Lufthansa Airlines in splitting the engines for the smaller and larger Airbus family.
Aviation Week has an article that provides some other interesting information about the leases for the Airbuses.
Pratt & Whitney: Does the American deal mean PW has a good change of placing the GTF on the A320neo order by American? PW’s buyout of the Rolls-Royce share of IAE certainly gives PW the ability to do a “global” deal involving V2500 and GTF engines, something CFM has been able to do for CFM56 and LEAP engines from inception. While Rolls-Royce was involved in IAE, there was no incentive for RR to be flexible on V2500 sales that might lead to GTF transactions. Now PW can wheel and deal all it wants.
War on Boeing? Aviation Week has a speculative piece that US airlines have declared “war on Boeing.” This think-piece relates to the Air Transport Association suing the US Export-Import Bank over plans to finance 787s ordered by Air India, a financial and management basket-case.
While AvWeek raises some interesting points, we’re told this has more to do with a dispute between Delta Air Lines–instigator of the ATA action–and India. We think Boeing is merely getting mugged in the process and that this is not a “war on Boeing.”
Turboprops: Jets always draw the most attention but Aspire Aviation has a long piece about turboprops, specifically the Q400 vs the ATR series, that merits reading. Turboprops are slowly regaining favor in some quarters.
The Beauty of it: From Randy Tinseth’s blog, here is a photo that is just a beauty, from the Dubai Air Show:
Do airframers listen to customers?
Aviation Week has an interesting story asking whether airframers truly listen to customers when designing airplanes.
The question is not an idle one. Airbus and Boeing constantly say they do, but Airbus is getting loads of flak from Qatar Airways and Emirates Airlines (both of whom like to negotiate in the press) over the revamped A350-1000 announced at the Paris Air Show. Qatar says the changes came as a surprise (we were told otherwise at the time by Airbus).
Airbus CEO Tom Enders since said Airbus won’t keep changing the A350’s design in response to customer comments. One can appreciate how he might be tired of this. The A350 went through five or six iterations in response to customer comments, a somewhat awkward display.
More on MAX: Aspire Aviation does long analysis
Aspire Aviation in Hong Kong has done a long analysis on the Boeing 737 MAX, capturing what Boeing has said recently along with original information and data from other sources. This article may be found here.
Meantime, the image below is from Randy Tinseth’s blog and neatly illustrates points made by John Hamilton, the chief 737 program engineer, during his recent conference call with media.
Airbus has a different view, as we extensively reported here.
The MAX is still being defined, as Boeing will readily admit, but it is showing customers specifications. Boeing is not yet ready to write performance guarantees because the specifications aren’t firmed up yet. Jim Albaugh, CEO of Boeing Commercial Airplanes, was quoted at the Dubai Air Show saying he hopes to firm up the first contract perhaps by year end or early into the new year. We believe this would likely be American Airlines, the first customer for the MAX (but not the launch operator).
A350 EIS delayed from 2H2013 to 1H2014
EADS announced today (Thursday in France, Wednesday night in Seattle) what many of us have been expecting for some time: the entry-into-service (EIS) of the A350-900 will slip into 2014 from late 2013.
“Maturity of the A350 XWB main components at Final Assembly start remains one of the Group’s top priorities. Start of Final Assembly is now scheduled for Q1 2012 and Entry-into-Service is now scheduled for H1 2014,” EADS said in its earnings release. As a result of the delay, EADS is taking a 200m Euro charge.
The program has had several creeping delays, slipping from an EIS of the first half of 2013 to the second half of the year, with very few deliveries listed in the Ascend data base–just five, starting with launch customer Qatar Airways.
We previously opined that we thought the first delivery would slip into the first half of 2014.
Each delay of the A350 program and the individual models allows Boeing to recover some breathing room on the 787 program and to develop the 787-9. The delay of the A350-1000 greatly benefits Boeing as it decides what to do with the future of the 777, through minor or major enhancements, at a time when cash flow continues to be constrained by the 787 and 747-8 programs and development of the 737 MAX.
The news comes just in advance of the Dubai Air Show, where Boeing is expected to announce a number of 777 orders from Emirates Airlines and possibly other carriers. Assembly of the 1,000th 777–for Emirates–began November 9 in Everett (WA).
Airbus also terminated the A340 program, it was announced in the EADS earnings release.
AirInsight takes a close look at the GTF, CFM LEAP
AirInsight’s Ernie Arvai has a long analysis of the Pratt & Whitney Geared Turbo Fan and CFM LEAP engine.
It is very detailed, and involves information obtained from both companies.