Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 25. June 6, 2025
- New RISE powerplant benefits from decades of GE research and development June 5, 2025
- Engine makers emphasizing durability, reliability June 4, 2025
- Boeing CEO: Lessons learned are key to certification of 737-7/10 and 777X June 2, 2025
- Digital twin is a key to JetZero’s hopes for Blended Wing Body entry June 2, 2025
Restoring capacity with the A330ceo or A330neo, Part 5
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By Vincent Valery
Introduction
June 18, 2020, © Leeham News: In the previous articles, we outlined Economic factors that determine whether the older A330ceo or newer A330neo is a better choice for airlines. We summarize those findings and broaden the discussion.
Summary
- Economic summary;
- The case for keeping older aircraft;
- And purchasing newer ones;
- A further factor in favor of more modern airplanes;
- Potential A330neo enhancements.
HOTR: American’s threat to Boeing: no MAXes without financing
By the Leeham News staff
July 14, 2020, © Leeham News: Last week’s news that American Airlines told Boeing it won’t take delivery of 17 new 737 MAX-8s unless it can get financing isn’t a surprise for those in the know.
This could be a bit of negotiating in the press.
When MAX was grounded, AA had lined up Japanese financing for its next round of deliveries. The lease rate was said to be in the vicinity of 0.52%, a number that is unconfirmed. But it was a very inexpensive lease rate. Over the course of the balance of 2019, the financing expired.
Pontifications: 2Q earnings reports begin this month
By Scott Hamilton
July 13, 2020, © Leeham News: Earnings season calls for the second quarter begin this month.
For our readers, Airbus and Boeing are the big ones.
Boeing’s earnings call is July 29. Airbus follows the next day.
A few early analyst previews were issued last week for Boeing.
HOTR: Second hand 787-8 market to be tested
By the Leeham News Staff
July 10, 2020, (c) 2020, Leeham News: A few months ago, Qantas announced that it intended to sell three Jetstar-operated Boeing 787-8s that would become surplus once the airline received its first A321-LRs. In the aftermath of the COVID-19 outbreak, Avianca rejected one 787-8 lease and Royal Air Maroc intends to sell four of them.
Four 787-8 operators (Aeromexico, Avianca, Latam Airlines, and Thai Airways) with a total of 38 aircraft in service filed for Chapter 11 or are in administration. This represents around 11% of the 374 787-8s delivered so far.
After years of high 787-8 production rates, Boeing is reluctant to sell the type. It has less production commonality than the 787-9 and 787-10 have between them and sales margins are lower. As a result, airlines do not place many new orders for the variant because they think other aircraft are more attractive investments.
Restoring capacity with the A330ceo or A330neo, Part 4
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By Bjorn Fehrm
Introduction
July 9, 2020, © Leeham News: Last week, we started the analysis of restoring capacity with the Airbus A330-300 or the A330-900 when reopening international traffic after the COVID-19 lockdown.
As we did with the A330-200 versus the A330-800, we fly them side by side between Paris Charles de Gaulle and Sao Polo’s Guarulhos airports. It’s a 13-hour flight with maximum freight in the cargo bays to gain revenue in addition to our part full cabin.
Will the payload-range of the A330-300 or A330-900 be sufficient to load the aircraft for maximum revenue on the route? We use our airliner performance model to find out.
Summary
- The A330-300 has gradually got more range as the Maximum TakeOff Weight (MTOW) has grown. The example highlights the limitations that still exits in this model of the A330.
- The A330-900 adds another nine tonnes MTOW over the highest MTOW A330-300. To what extent does it fix the A330-300 limitations on this route?
Looking ahead for 2020 and 2030 decades: Embraer
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Fourth in a series.
By Bjorn Fehrm
Introduction
July 8, 2020, © Leeham News: All airliner OEMs have a disastrous 2020, but for Embraer, the year has been even worse. After spending a year and over $200m to carve out the Commercial Aviation division to merge it into Boeing, the Joint Venture Agreement (JV) was stopped by Boeing at the last moment.
The Executive Jets and Defense side were not affected, but now Embraer was organized as two companies instead of one. The company must now re-merge the organizations to save costs in a COVID-19 environment where limiting cash outflow, and lowering costs are necessary for survival. At the same time, it’s arch-rival on the world market, Airbus A220 has gone from strength to strength through basket selling with the popular A320.
How does Embraer come back from the Boeing pass up and regroup in a regional market that is no longer a fight of equals? Embraer competes with Airbus that in 2019 was 11 times larger in airliner deliveries and 29 times in airliner revenue.
Only in the below 100 seat market is it saved from the giant, who doesn’t have a model in the segment. And it seems the below 100 seat competitor, Mitsubishi, might fold its entry.
Summary
- The botched JV with Boeing came at the worst possible moment for Embraer, just when the COVID-19 pandemic stopped airliner deliveries.
- The planned JV had held back sales and deliveries, waiting for the JV to complete.
- In addition, it cost Embraer $200m, pushing it into the red for 2019.
- Embraer must now find another fix to the Airbus problem while wrestling with a worldwide COVID crisis.
Read more
Restoring capacity with the A330ceo or A330neo, Part 3
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By Vincent Valery
Introduction
July 2nd, 2020, © Leeham News: In the previous section, we saw that low lease rates on Airbus A330-200s could hurt demand for the newer and more fuel-efficient A330-800. Sell-lease back transactions can counterweight this at times as this gives the airline a cash injection during these difficult times.
We will now turn our attention to the other variants of the A330 family, the -300 and -900.
Summary
- From barely trans-Atlantic;
- To fully-fledged long-haul aircraft;
- Mixed A330-900neo commercial success;
- A330neo succeeding on one aspect;
- A330-900 versability.
HOTR: Aircraft lease rates, values continue to plunge in virus environment
By the Leeham News Staff
June 30, 2020, © Leeham News: Fifteen year old aircraft values and leases plunged compared with six month ago, according to the latest analysis by Ishka.
Ishka is an aircraft appraisal and consultancy.
The aircraft are assumed off lease and immediately available. Mid-life maintenance status is also assumed. Rates and values will continue to decline, Ishka believes. Aircraft on-lease have higher values and lease rates.
How much life is left in the Boeing 737 MAX after recertification?
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By Scott Hamilton
Introduction
June 29, 2020, © Leeham News: As Boeing narrows in on recertification of the 737 MAX, one of the questions that is unanswered, but forward-reaching is, how much life is left in the airplane?
In this context, the question is not about “useful life.” This is the length of time an airplane can economically be in service before passenger carriers retire the aircraft. Then there is the potential as a cargo conversion airplane. The useful life may equal or exceed the useful life as a passenger airplane.
How much life is left in the MAX in this context means how long will it be before Boeing pursues a replacement design—and how long will MAX remain in production?
Summary
- 737NG program launched in November 1993. EIS: December 1997. Production ended late 2019.
- 737 MAX program launch, July 2011. EIS: May 2017. Boeing contract with Spirit Aerosystems for fuselages extends to 2033.
- A321XLR, MAX grounding killed NMA.
Pontifications: Recertification flights for Boeing 737 MAX appear close
By Scott Hamilton
June 29, 2020, © Leeham News: Boeing may be set to begin recertification flights of the 737 MAX as early as today, The Seattle Times reported last week.
Testing will take three days, if all goes well. But Boeing still has a lot of work to do to fully satisfy regulators.
According to The Times, Transport Canada and Europe’s EASA require additional modifications to enhance safety on the MAX. The additional changes may not be required for certification but must be done within a year, the paper reports. The MAX 10 must have the changes before it is certified.