Airbus cut production rates by a third

By Scott Hamilton

Production of the A320 and A220 in Mobile is paused. Airbus hasn’t decided what to do about A220 rates, yet.

April 8, 2020, © Leeham News: Airbus today said it will cut production of the A320, A330, and A350 lines due to COVID-19.

The new rates are:

  • A320 to rate 40 per month (from 60-63);
  • A330 to rate 2 per month (from 3.5)
  • A350 to rate 6 per month (from 10)

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HOTR: American sees virtually no travel for up to 7 months

By the Leeham News staff

April 7, 2020, © Leeham News: “Nobody’s traveling in the next 30 or 60 days,” said Vasu Raja, American Airlines Group Inc.’s senior vice president for network strategy. “But nobody is really making any plans to go travel in the next 90 to 150 days, either.

So reported the Wall Street Journal Sunday.

That basically takes you through the end of the year.

Singapore will suspend its Changi Airport Terminal 2 for 18 months from May 1. (Associated Press.)

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Pontifications: Assessing the impact of COVID-19: today’s take

By Scott Hamilton

April 6, 2020, © Leeham News: It’s going to be quite a while before there is a clear understanding how coronavirus will change commercial aviation.

LNA already touched on impacts to Airbus, Boeing and Embraer. None of it is good. For Boeing, burdened with the additional stress of the 737 MAX, is in the worst position. Even when the MAX is recertified, there won’t be many—or any—customers in a position to take delivery of the airplane.

Bearing in mind that what’s true today will change in a day, or even an hour, let’s take a rundown of where things seem to stand now.

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Shall passenger airliners run as freighters during the COVID-19 crisis?

By Bjorn Fehrm

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Introduction

April 6, 2020, © Leeham News: With the COVID-19 pandemic, the passenger traffic has ground to a halt in many countries. The airliners are parked and their crews sit idle.

At the same time, the air freight market booms. From a decline in demand in the first months of the year, there isn’t enough freighter capacity right now. The freight that traveled in the bellies of the passenger jets had to find new ways and as this was almost half the world’s air cargo, the dedicated freighters can’t absorb the volumes.

Is it time to fly passenger airliners as substitute freighters? Some airlines are doing this on a spot basis. Apart from injecting capacity for needed medical supply freight, does it make economic sense? We run a series of articles on the subject.

Figure 1. Delta flies an A350-900 as a belly freighter between Shanghai and Chicago three times a week from March 30. Source: Delta.

Summary:
  • Freight prices soar as capacity collapses when airlines ground passenger jets.
  • For the airlines, the cost equation changes with an abundance of free capacity at remaining fixed costs.
  • Does it make economic sense to run passenger airliners as freighters in this situation?

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Engine maker, lessor see Boeing’s next airplane as a single-aisle design

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By Scott Hamilton

“The NMA is gone. Long live the NMA.”–lessor CEO. Photo: Leeham Co.

April 2, 2020, © Leeham News: Boeing’s New Midmarket Airplane, or a new concept, is the last thing on the plate right now.

But Boeing’s future product strategy nevertheless requires long-term thinking even as the short- to medium-term is in chaos.

Interviews were conducted March 2 at a major aerospace conference in Austin (TX), just days before the coronavirus crisis exploded exponentially across the globe.

The CEO of the major lessor, Avolon, declared the NMA dead and predicted a new single-aisle airplane will be Boeing’s next project.

An executive of Pratt & Whitney offered a similar view.

Summary
  • “The NMA is gone. Long live the NMA. That moment has passed.
  • Back to the 757 replacement concept and, now, A321XLR competitor.
  • Single-aisle vs light twin-aisle is part of the challenge.
  • New airplane must be “dramatically” more efficient than MAX, neo.
  • 2030 decade is the quickest this dramatic improvement can be achieved.

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Pratt & Whitney committed to advanced GTF for Airbus

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By Scott Hamilton

March 30, 2020, © Leeham News: Pratt & Whitney is concurrently developing what might be termed the next generation GTF. This is an advancement over the current engine, but with more thrust and better fuel economics.

Deurloo eschews the usual Performance Improvement Package (PIP) moniker, however.

“We have been discussing with Airbus for some time, an improvement to the current configuration or our expected configuration,” Deurloo said. “I think that’s a testament to the geared architecture. It’s given us some runway to do a little bit more on that engine.

PW has been in conversation with Airbus for the last few years about an engine that will take  configuration at the end of this year, and put in an improvement.

Summary
  • New name, better economics, better durability.
  • Designed for the A321XLR, but greater flexibility.
  • Fixing current issues.

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Pontifications: Critical step in Boeing MAX recertification target: May

By Scott Hamilton

March 30, 2020, © Leeham News: Barring further issues, the FAA Type Inspection Authorization for the MAX is targeted for the second half of May, LNA learned.

This is a critical step in recertifying the airplane.

Also barring more unexpected events in a year filled with them, Boeing should resume production of the 737 MAX in May, LNA confirmed.

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Can the A321XLR fly trans-Oceanic routes, Part 2?

By Bjorn Fehrm

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Introduction

March 26, 2020, © Leeham News: We are checking if the Airbus A321XLR is usable for trans-Oceanic routes. It’s a credible trans-Atlantic aircraft, but can it be used effectively over the Pacific Ocean as well?

Last week we found a one-stop routing that worked. Now we compare the economics of flying the A321XLR on a one-stop route versus a longer-range aircraft like the Airbus A330-900 non-stop.

Summary:
  • The A330-900 covers our US West Coast to Japan trip in almost half the time of our single-aisle route over Honolulu.
  • Will it also have a lower per-seat cost? We find out using our airliner operating cost model.

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HOTR: Boeing has options to federal bailout, CEO says

By the Leeham News Staff

March 25, 2020: First, Boeing CEO David Calhoun said he wasn’t an insider (after 10 years on the Board of Directors, and as lead director for many of them). No, he merely had a front row seat in the movie theatre.

Then he trashed his predecessor, Dennis Muilenburg, for stock buyback and dividend policies (that the Board approved).

Next, Boeing said it needs a portion of the $60bn in federal aid it requested for the aerospace industry.

Now, Calhoun appears to have put his foot in his mouth again. Or did he?

When asked about the possibility of the government taking an equity position in Boeing as a condition to a bailout, Calhoun said Boeing has options to federal money.

The Wall Street Journal wrote yesterday, “I don’t have a need for an equity stake,” Boeing CEO Calhoun said Tuesday on Fox Business Network. “If they forced it, we’d just look at all the other options, and we have got plenty.”

There’s a very practical reason for Boeing to object to government taking an equity stake. It would effectively shut down bidding on some key defense contracts.

But wait a minute: if you’ve got all these other options, why ask for a federal bailout for Boeing?

Or was this a message to the street that Boeing is OK?

Still, on CNBC’s Squawk Box, Calhoun said if the credit markets stayed closed for eight months, it would be tough for Boeing to remain healthy.

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Boeing suspends production of wide-bodies

March 23, 2020, (c) Leeham News: Boeing today announced it will suspend production of its wide-bodies for 14 days, beginning Wednesday.

Production slowdown begins today.

The move is in response to the COVID-19 crisis. Boeing is the last of the Big Three aircraft manufacturers to do so. Airbus last week suspended production in France and Germany, restarting slowly today. Embraer suspended production last week.

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