Leeham News and Analysis
There's more to real news than a news release.
Did Airbus miss opportunities with Alaska, Southwest?
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By Scott Hamilton
Introduction
March 22, 2021, © Leeham News: Airbus lost an order from Alaska Airlines, which means the carrier will essentially revert to an all-Boeing fleet.
Alaska Airlines ordered more Boeing 737 MAXes instead of Airbus A321neos. Southwest Airlines appears ready to order the 737-7 MAX instead of Airbus A220-300s. Were these real opportunities? Photo by Boeing.
And despite the apparent high-profile loss of a potential order from Boeing loyalist Southwest Airlines, Airbus is holding its ground in the USA.
Did Airbus miss opportunities to gain ground?
It all depends on how you look at it.
Summary
- Alaska Airlines chose to eliminate the Airbus A319s and A320s inherited with the 2016 acquisition of Virgin America. It’s not going to retain the orders for A320neos. And it passed on ordering more A321neos when it recently placed a follow-on order for Boeing 737-9s.
- It looks all but sure Southwest Airlines will pass on ordering the Airbus A220-300 for its sub-150-seat fleet requirement. Boeing looks poised to win a big order from Southwest for the slow-selling 737-7 MAX.
- Neither outcome, however, was unexpected.
Pontifications: Embraer’s China ambitions
March 22, 2021, © Leeham News: Embraer wants to become a big player in China.
By Scott Hamilton
“We see a huge market potential there,” said Arjan Meijer, CEO of Embraer Commercial Aviation, in an interview with Nikkei Asia. The news outlet continued, “The company expects worldwide demand for 5,500 jets with up to 150 seats over the next 10 years. A third of that will come from Asia, with a large part of it from China, Meijer added.”
However, China presents risks and few rewards to companies wishing to gain a significant foothold. This is especially true for commercial aviation companies. China has high ambitions for the commercial aviation industry. Partnering with China in this sector produced more heartbreak than success.
The A350, Part 10 Project Sunrise Intro
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By Vincent Valery
Introduction
Mar. 18, 2021, © Leeham News: After assessing the performance of the A350-1000 against the 777-300ER on a trans-Pacific route, we turn our attention to a dedicated A350 variant developed for Qantas’ Project Sunrise.
Summary
- The holy grail of ultra-long-haul routes;
- A limited market;
- A350-1000 “ULR” against 777-8;
- Reasons for Qantas’ choice.
Pontifications: AerCap and GECAS to combine — assessing the impact
By Scott Hamilton
March 15, 2021, © Leeham News: GE Corp.’s decision to sell its mega-leasing unit, GECAS, to AerCap represents a huge shift in commercial aviation.
For decades, GECAS was the largest lessor in the world. One of GE’s best profit centers, GECAS was a major source of financing to airlines. The lessor purchases and leases back airliners, as do most lessors, as well as initiating leases with orders received directly from the OEMs. GECAS’ scale was a magnitude or two larger than most competitors.
The closest competitor was International Lease Finance Corp., a unit of insurance giant AIG. ILFC’s leadership liked to boast the asset value of ILFC’s smaller fleet was greater than GECAS, which while larger had more older airplanes in its portfolio.
Bjorn’s Corner: The challenges of hydrogen. Part 28. Airbus priorities
March 12, 2021, ©. Leeham News: I had the chance to talk about Sustainable Air Transport with Airbus VP Zero Emission Aircraft, Glenn Llewellyn, in the week.
The discussion centered around Airbus’ overall direction and the targets with their ZEROe project.
Figure 1. Airbus ZEROe airliner concepts. Source: Airbus.
The A350, Part 9: The A350-1000 versus 777-300ER
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By Bjorn Fehrm
Introduction
March 11, 2021, © Leeham News: Last week, we started analyzing the Airbus A350-1000 and compared it with the Boeing 777-300ER.
We now fly the airplanes on a demanding route, close to their maximum range, the LAX to Hong Kong sector. How much better is the 14 years younger A350-1000?
Summary
- The A350-1000 is the logical replacement for a 777-300ER if a same capacity replacement is sought.
- The carbon-fiber structure, a more advanced wing, and newer engines give the A350-1000 convincing arguments for the change.
HOTR: Investors optimistic for Boeing. Are they too optimistic?
By the Leeham News Team
March 10, 2021, © Leeham News: Boeing’s recovery will be long, slow and painful.
But Boeing has been through long, slow and painful periods before.
Investors appear optimistic. The stock price has been rising since lows hit immediately after and throughout the pandemic.
The stock price is far off its high of $440 on March 1, 2019. March 1 was after the October 2018 Lion Air 737 MAX accident but nine days before the March 10, 2019, Ethiopian Airlines MAX crash. The price closed yesterday at $231, abut equal to where it was a year ago today.
Suppliers remain hunkered down as pandemic recovery may stall
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By Scott Hamilton
Introduction
March 8, 2021, © Leeham News: Aerospace suppliers continue to struggle even as passenger airlines begin to gingerly place new aircraft orders and 
Boeing resumes production of the 737 MAX.
Airbus continues to produce the A320, A330 and A350 at lower production rates than the pre-pandemic era. Boeing is at low-rate production for the 737 MAX, after a 20-month grounding. The 777 is down to 2/mo and the 787 goes to 5/mo this month. At least two aerospace analysts on Wall Street think the 787 rate could come down further.
Airbus and Boeing each received a handful of orders so far this year.
But suppliers continue to struggle.
Summary
- Airbus, Boeing continue to extend payments.
- Smaller suppliers seek bankruptcies.
- Larger suppliers remain in “hunker down” mode.
Bjorn’s Corner: The challenges of hydrogen. Part 27. Fuel cell APU gains
By Bjorn Fehrm
March 5, 2021, ©. Leeham News: We have discussed different auxiliary power generation principles for a hydrogen aircraft over the last weeks. We found a fuel cell auxiliary power system has many attractions, one being the possibility of making an elegant more-electric aircraft system architecture.
With or without such an architecture, the fuel cell alternative will save hydrogen consumption and cost compared to a hydrogen-converted APU alternative. What’s the value of the saving?
Figure 1. The Ballard/Audi FCgen-HPS fuel cell stack for cars and other mobility applications. Source: Ballard Power Systems Inc.
The A350, Part 8 A350-1000 Intro
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By Vincent Valery
Introduction
Mar. 4, 2021, © Leeham News: After assessing the performance of the A350-900 and its ULR variant, we now turn our attention to the largest A350 variant, the -1000. It entered service in 2018, a little more than three years after the -900.
Summary
- Stretching the aircraft by different means than the 777-300ER;
- A change of plan costs a significant order;
- Moderate sales and limited prospects in a changing market;
- An aircraft for trunk routes.