Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- China bans Boeing, US parts imports in tariff war April 15, 2025
- Boeing welcomes COMAC competition as Asia-Pacific demand soars April 15, 2025
- How good is the C929? April 14, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 17. April 11, 2025
- Uncertainty plagues airline, aerospace, lessor industries over tariffs April 10, 2025
Eco-Aviation in the US
Eco-Aviation continues to gain ground in the US. Environmental forces in Europe have been targeting aviation for several years, and very aggressively. In the US, the issue has been much slower to catch on.
Airbus and Boeing have been working for years to reduce the environmental impact of their airplanes. The development of the A380, 787 and A350 are manifestations of this effort. In concert with the engine makers, GE/CFM, Rolls-Royce, Pratt & Whitney and International Aero Engines, the manufacturers have worked to reduce CO2 emissions.
We’ll be taking a more in-depth look at this issue next week on our corporate website bi-weekly update. In the meantime, Air Transport World and Leeham Co. have organized the USA’s first dedicated Eco-Aviation conference.
This conference has representation of the environmental community, US regulators, airframe and engine manufacturers and the airlines.
More information about the conference may be found here.
Hopscotching through Europe
We’re sometimes accused of having a warped sense of humor (guilty) that occasionally gets us in trouble with readers. But we simply can’t help ourselves.
We found something in the Boeing tanker protest that we could not help but chuckle at. Boeing has made a real issue over the inexperience of Northrop Grumman and EADS compared with Boeing on building tankers. Boeing also has criticized the production model of Northrop/EADS. The Airbus A330-200 on which the Northrop KC-30 is based in built in England, Spain, Germany and France and the fuselage components will be shipped to Alabama for assembly. (Not unlike the 787 and KC-767 production models, but that’s neither here nor there).
In the protest, Boeing had this gem:
“…The Northrop/EADS…production process…will hopscotch through Europe to produce some planes….”
Who says Boeing doesn’t have a corporate sense of humor?
Separately, Northrop said in a conference call that 50% of the revenue from the tanker will make its way to EADS, which then has to pay its suppliers. We took a stab at assessing this figure on our corporate website in a report. It looks like we were pretty close in our assessment.
When Hazy talks, people listen….
Steven Udvar-Hazy, the CEO of International Lease Finance Corp., carries enormous weight in the airline industry. His ILFC is the biggest customer of Airbus and Boeing. His public criticism of the A350 (Version 4.0) at the ISTAT conference two years ago (in response to a question we asked, BTW) set the stage for Airbus to redesign the aircraft.
Hazy once said he doesn’t think the A380 will sell more than 300-400 and he doesn’t think the 747-8I will sell well, either. Both predictions remain to be seen, but people listened.
While the world waits for Boeing to tell us about the latest delay for the 787, Hazy told the JP Morgan Aviation & Transportation conference today that he expects an all-in delay of 15-16 months from the original May 2008 delivery schedule, according to someone who was there. That means August or September of 2009 before the first delivery.
Hazy is usually extremely well clued in on these sorts of things. He told us of the third delay for the A380 before this became public, and we broke the news at the time.
It’s like the old EF Hutton slogan: When EF Hutton talks, people listen. EF Hutton is defunct, but this analogy isn’t to suggest that ILFC is headed that direction. It’s simply a great line.
VLA and the Airbus-Boeing forecasts
Boeing has had a long run in the spotlight, given the tanker award and protest and the Goldman Sachs report predicting another six month delay for the 787.
For a change, let’s take a look at the Airbus and the A380.
Airbus predicts a market of nearly 1,700 passenger and cargo airplanes in the Very Large Aircraft (VLA) category in its new forecast issued this year. Boeing forecasts 960 VLAs in its market outlook issued last year. Each prediction is for a 20-year period, or 2027 for Boeing and 2028 for Airbus.
The math is pretty simple: to achieve 1,700 VLA sales under the Airbus forecast (and it doesn’t matter whether it’s Boeing or Airbus, both the A380 and 747-8 are VLAs), this is an average of about 85 sales a year beginning this year.
To achieve the 960 figure from Boeing beginning last year, that means an average of 48 VLA sales a year.
Airbus predicts 30 sales for the A380 this year. Boeing hasn’t made a public prediction for the 747.
It’s pretty clear Airbus is just a tad short.
For comparison, Boeing has sold 1,522 747s since the first order in 1966, 42 years ago. That’s an average of 36 a year, and this started when the 747 had a monopoly for a few years as the world’s first jumbo jet–and maintained a monopoly on trans-ocean routes until the DC-10-30/40 and L-1011-500 began making serious inroads.
We’ve always thought Boeing’s forecast of only 300-400 sales of the A380 was woefully inadequate. But we’ve also thought the Airbus forecast of 1,700 VLAs in 20 years was wildly optimistic.
The math certainly suggests as much.