Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Embraer downplays tariff impact on 2025 results May 6, 2025
- JetZero readies effort for private equity fund raising May 5, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 20. May 2, 2025
- Supplier Howmet exceeds expectations despite tariffs May 1, 2025
- Airbus 1Q2025 results: So far, so good, but US tariffs make future results unpredictable May 1, 2025
HOTR: Values, rents leveling off for 5-year old aircraft
By the Leeham News staff
Aug. 25, 2020, © Leeham News: Lease rates and aircraft values on narrowbody, mainline jets appear to be leveling off, except for the Boeing 
737-700.
Ishka, the UK-based appraisal company, revised its tracking presentation in last week’s update. Moving from text to a graphic, it’s visually apparent that values for the A320, 737-700, Boeing 737-800 and -900ER began to level off in May. Values for the Airbus A321 began to level off in June.
Lease rates for all airplanes except the 737-700 began to level off in June. Rates for the -700 continue to decline.
These are for off-lease, half-life aircraft that are five years old.
Half-life means an airplane half-way through its maintenance cycle.
R&D spending at Boeing plunges; Airbus yet to kick in
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By Scott Hamilton
Introduction
Aug. 24, 2020, © Leeham News: Research and development spending at Boeing Commercial Airplanes declined 21% in the first half this year compared with 2019.
From 2017 through 2019, BCA’s R&D spending declined 13%.
During the first half this year, Airbus Commercial airplanes R&D spending declined 1%. From 2017-2019, R&D spending increased 31%.
Boeing’s decline in 2019 vs 2018 and the first half of 2020 vs 2019 clearly reflects the grounding of the 737 MAX.
The flat spending in 2017-2018 reflects Boeing’s corporate approach of keeping R&D spending level while returning 100% of free cash flow to shareholders.
Airbus, on the other hand, was aggressively pursuing green aviation R&D, driven by a European Union that is more dedicated to green aviation than the USA is.
Summary
- COVID-19 related R&D spending cuts may not be fully seen until the third quarter.
- Boeing suspended R&D spending on the New Midmarket Airplane in January. Coupled with MAX grounding pressure, Boeing’s spending was already depressed.
- Airbus said it was suspending all R&D except for the A321XLR after the global COVID devastation on air passenger demand.
- Airbus historically outspends Boeing in R&D.
Bjorn’s Corner: The challenges of Hydrogen. Part 5. The Hydrogen tank.
By Bjorn Fehrm
August 21, 2020, ©. Leeham News: In our series on hydrogen as an energy store for airliners we start the design discussion of a hydrogen-fueled airliner by understanding the onboard storage of hydrogen better.
While there is present knowledge from for instance the space launcher industry, the storage demands for launchers are hours rather than days. Several implementations of longer storage aeronautical tanks have been done, among others by NASA/Boeing for high flying UAVs.
Airbus and the Russian aircraft industry were also active with research during the 1990s and Tupolev built a test aircraft that included a complete hydrogen fuel system (Figure 1).
Figure 1. The Tu-155 Hydrogen research aircraft. Source: Tupolev.
Sunset of the Quads, Part 3
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By Vincent Valery
Introduction
Aug. 20, 2020, © Leeham News: Last week, we compared the economics of the 747-400 and the A380 on the Los Angeles to Sydney route. We now turn our attention to Airbus’ first long-range aircraft, the A340-300, on a Europe to US West Coast mission.
Summary
- A340 launch and development;
- Competing aircraft;
- Satisfactory commercial success;
- A thin long-haul route.
No surge in new-build freighters from COVID expected
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By Scott Hamilton
Introduction
Aug. 17, 2020, © Leeham News: Coronavirus caused a spike in freight demand. But don’t look for Airbus or Boeing to see a spike in demand for new build freighters.
Boeing hoped to advance the timeline for the launch of the 777-8F. The original plan for the 777X family was entry-into-service of the -9 in late 2019 or early 2020. The 777-8 passenger model (8P) would follow by two years. The -8F would follow two years after that.
As the -9 EIS slipped to late 2020 and the 737 MAX grounding took its toll, -8 development was suspended. The -8P EIS was unofficially reset to 2024.
Now, the 777-9 EIS is rescheduled to 2022. Production of the 777 line is going to 2/mo. With freight demand spiking due to COVID and widebody passenger production not expected to recover until 2025, Boeing thought advancing the -8F launch could boost the X line.
It’s not to be.
Summary
- Boeing hoped to launch the 777-8F with 2024 EIS.
- No market interest scotched the plan.
- P2F conversions of 777-300ER gain interest.
- Airbus hopes for A330-900F are dashed.
Pontifications: A330neo future bleak from COVID impact
Aug. 17, 2020, © Leeham News: At least half the Airbus A330-900 skyline is with airlines that are in administration, technically insolvent or with a politically sanctioned carrier.
By Scott Hamilton
These could be characterized as in Red Alert.
The COVID-19 crisis places the remaining orders in Yellow Alert.
Airbus, as of its July website tally, has 226 A330-900s in backlog. One hundred fourteen of these, or 50.44%, are in Red Alert.
Sunset of the Quads, Part 2
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By Bjorn Fehrm
Introduction
August 12, 2020, © Leeham News: We deepen our look at the Queen of the Skies and it’s best selling version, the 747-400.
We go through what made it the great aircraft it was and why Qantas replaced it on its trunk routes to the US West coast.
We pick Los Angeles to Sydney as the benchmark route, a route on the range limit for the 747-400, and check how it stacks up economically versus the A380, its replacement.
Summary
- The 747-400 reigned the skies for 15 years, combining a trans-Pacific range with a good passenger and cargo capacity.
- Once Boeing introduced the 777-300ER and Airbus the A380, the 747-400’s ruling of the skies was over. It trailed in both capacity and efficiency.
- It continued in operation until today with many airlines, still a useful aircraft for long and dense routes as long as the fuel prices stayed low.
Boeing’s Renton plant may close from 2033: Analysis
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Introduction
Aug. 10, 2020, © Leeham News: With Boeing likely to consolidate 787 production in Charleston (SC), reflecting a rate of 6/mo, the future of assembly in Puget Sound rears its head again.
LNA outlined Aug. 3 why Everett is the ideal location to assemble the Next Boeing Airplane (NBA).
Boeing’s product line also requires a new airplane in the 100-150 seat sector. Airbus’ A220-100/300 and, nominally, the A320neo (but not the A319neo) fill this sector. (The A320neo was originally designed as a 150-seat airplane. It now is commonly configured in the 150-180 seat size.)
Airbus has a design for an A220-500, which could replace the A320.
Boeing’s Renton (WA) 737/757 plant footprint in 1990. Source: Google Earth.
Boeing needs an efficient competitor to the current A220 plus a replacement for the 737-7 and, eventually, the -8.
And it probably won’t be assembled at the Boeing 737 plant in Renton.
Summary
- Boeing-Embraer JV was to focus on 100-150 seat airplane.
- Canceled deal could be revived.
- Or Boeing could choose a new partner.
- Moonshot would be two roughly concurrent new airplane programs.
Boeing’s big opportunity
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By Scott Hamilton
Analysis
Introduction
Aug. 3, 2020, © Leeham News: Boeing has one of the biggest opportunities in decades.
This is counter-intuitive, given the disaster it faces with the COVID-19 crisis.
But in chaos, there are opportunities.
There are some key assumptions that must be made. But these are not outlandish.
Summary
Assume:
- Boeing survives the virus crisis.
- Boeing consolidates 787 in Charleston.
- 787 demand doesn’t return, reactivating Everett line.
- Sharp gains in production efficiency.
- These lead to the Big Opportunity.
Bjorn’s Corner: The challenges of Hydrogen. Part 2. Ecosystem.
By Bjorn Fehrm
July 31, 2020, ©. Leeham News: In our series on Hydrogen as an energy store for airliner use we begin by looking at the needed ecosystem that can produce and distribute Hydrogen.
When I was skeptical about hydrogen as a means to propel our airliners three years ago, the main problem was the lack of this ecosystem. That year, in 2017, 13 transport and energy companies formed the Hydrogen Council, to create this ecosystem. Today the council has 81 members, with 22 joining in the last year, Figure 1. The list reads as Who’s Who in the transport and energy sector.
Figure 1. Members of the Hydrogen Council. Source: Hydrogen Council.