Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing’s 737 North Line and the Everett factory: in transition now June 9, 2025
- 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
Airbus: We should fly like geese to save fuel and CO2
By Bjorn Fehrm
November 19, 2019, ©. Leeham News: Airbus presented a real innovative idea yesterday at the Dubai Air Show to reduce the environmental footprint of civil air transport. In the future we should fly like geese, it saves both fuel and CO2 emissions.
The airframer is starting a program to explore how the geese reduce their energy consumption while flying long distances. They fly in each other’s up-wash. This is to date the most innovative idea in the airframer’s quest to reduce air transport’s environmental footprint. Is it the most unrealistic? Perhaps not.
Figure 1. An A350 follows an A380, flying like the geese to gain from the upwash of the A380. Source: Airbus.
A tangled web at the HNA Group
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Now open to all readers.
By Vincent Valery
Introduction
Nov. 18, 2019, © Leeham News: The HNA Group, a Chinese conglomerate with a heavy focus on aviation, has been in the spotlight for a few years as its financial condition deteriorated.
Its current state came from its debt-fueled global acquisition spree, then the challenges in deleveraging.
At some point, the group owned stakes in 20 airlines in Mainland China and abroad. Other notable acquisitions include lessor Avolon, Swissport, Servair, SR Technics, and stakes in two foreign airports.
The HNA Group does not publish accounts. LNA went through the financial statements of its flagship subsidiary Hainan Airlines, since 2000, with the goal of better understanding the group structure and assess the airline business profitability.
Summary
- HNA’s relentless growth;
- A buying spree bites back;
- Domestic and foreign airline ownership model;
- Hainan Airlines accounting.
Pontifications: A new setback for Boeing
By Scott Hamilton
Nov. 18, 2019, © Leeham News: Boeing suffered another setback last week, and this time it’s unrelated to the 737 MAX.
Boeing abandoned a robotic riveting/fastener system awkwardly called Fuselage Automatic Upright Build, or FAUB, intended to speed production.
Bloomberg first reported the abandonment. The Seattle Times has an extensive story detailing the history and objectives.
Doing these processes manually is incredibly labor intensive. FAUB, when it works, dramatically cuts the time, improves the accuracy and reduces injuries.
FAUB is but one element of a production transformation Boeing has been doing for years under the code name Black Diamond.
Converging technologies in NMA
Various automated and digital processes technologies have been in place on various 7-Series programs for years. FAUB, as The Seattle Times reported, was added to the 777 Classic line ab0ut six years ago. Part of the mission was to de-risk FAUB for application to the 777X.
Then, FAUB and the other processes were to converge for the first time on one Boeing Commercial Airplanes program with the New Midmarket Airplane, or NMA.
Boeing CEO Dennis Muilenburg said on several earnings calls that the NMA was as much about production as it was about a new airplane program (or words to this effect).
But Boeing couldn’t make FAUB work.
Why not?
This is a good question and one for which there isn’t a clear answer.
It works elsewhere
FAUB, or a system very similar, is used by Airbus and other aerospace companies. It works for them, says Jessica Kinman, a senior manager for Dassault Systemes.
Kinman spoke Friday at a seminar sponsored by the Pacific Northwest Aerospace Alliance (PNAA) at North Seattle College about advanced manufacturing and other transformative production processes. This was just two days after the Boeing FAUB news broke.
Among the processes illustrated: robotics working on an upright fuselage. In other words, FAUB—although this was not identified as Boeing’s FAUB.
With the NMA business plan relying in part on Black Diamond processes, of which FAUB is an element, losing FAUB isn’t going to help an already-struggling business case.
But, then, NMA is on hold at Boeing until the MAX returns to service and cash flow resumes. So, from this perspective, losing FAUB at this time isn’t especially critical.
Longer term
But longer term, Boeing needs to understand why it couldn’t make FAUB work whereas Airbus and others can.
It’s all part of the digital factory Dassault and its competitors consult on as aerospace (and other industries) transform in the future.
I’ll have more about this in a subsequent post.
Airlines look toward another peak season without the MAX
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Introduction
Nov. 11, 2019, © Leeham News: Airlines are beginning to make plans for another peak summer season either without the Boeing 737 MAX in their fleets, or a reduced number.
With the recertification of the MAX continually sliding, like an airline’s creeping delay at the airport, this is stating the obvious. Airlines keep shifting the true return to service (RTS) (not recertification) from 2019 into 1Q2020.
Source: Boeing.
American and Southwest airlines, the two carriers with more MAXes grounded than any other airline, now target RTS March 5 next year—just a week short of the global grounding of the airplane.
Boeing’s chairman, David Calhoun, acknowledged in an interview with CNBC Nov. 5 RTS will now fall into 2021.
This was two days before the Federal Aviation Administration and EASA rejected Boeing’s documentation that is required before recertification is granted. According to media reports, this could add an inconsequential number of days to the process or a significant number of weeks.
Concerns are beginning to emerge that recertification may not come until after the first of the year.
All this increases the uncertainty for the airlines.
Summary
- Creating Plan B—no MAX in the peak season.
- Stored MAXes may face a “calendar” deadline, requiring C Checks before RTS.
- Lessors offering new, year-long leases on A320s and 737 NGs.
Air France-KLM wants to simplify the fleet
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Nov. 7, 2019, © Leeham News: Air France-KLM will strive to greatly simplify its fleet by early next decade, the group outlined in an investors day presentation Nov. 5.
The Group includes Air France, KLM and Transavia. The low-cost carriers Joon and Hop! are discontinued.
Fleet simplification
KLM
The company wants to reduce today’s fleet types at KLM from six to four, dropping the Airbus A330 and Boeing 747s.
The Future Fleet concentrates around the Embraer E1 and E2 E-Jets; the Boeing 737 NG; the Boeing 787-9 and the Boeing 777 Classic.
At the moment, there are no Boeing 737 MAXes in the future fleet plans. KLM had none on order, even before the October 29, 2018, Lion Air accident.
The possibility of a Boeing 777X is also not shown in the rendering.
“It’s not easy to compare:” Airbus’ CEO Faury
- Guillaume Faury has been the chief executive officer of Airbus Group since April 1. In this exclusive interview, he looks back on his first six months and ahead for the future of the company. Part 1 appeared Oct. 30. This is the second of two parts.
Guillaume Faury
Nov. 6, 2019, © Leeham News: “It’s not easy to compare the performance of the two companies,” says Guillaume Faury, the CEO of Airbus, when the inevitable comparisons between his company and Boeing are made.
The context was talking about advanced manufacturing, discussed in Part 1 of this interview.
“I don’t think we are behind on digital. I think they might have gained more preparation on the future of production systems. We are catching up big time if not ahead in some important places. I think we will know who’s first when the next generation of airplanes is launched. These will be the first ones with digital design and manufacturing. There’s not a single plane today which is full DDMS.”
The issue is key to the next new airplane produced by Airbus or Boeing.
Aviation Forum Munich: Vertical integration on the way back
By Bjorn Fehrm
November 5, 2019, ©. Leeham News at Aviation Forum Munich: The Aviation Forum kicked off in Munich today, a yearly production and supply chain event started by the Hannover based Institute for Production Management nine years ago.
Today’s conference themes were How the OEMs benefit from Supplier Innovation, Additive Manufacturing trends and discussions around Outsourcing and Insourcing.
Read more
Big Three Gulf Carriers’ financials
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By Vincent Valery
Introduction
Nov. 4, 2019, © Leeham News: The rise of the Big Three Middle Eastern carriers since the mid-2000s has been nothing short of astounding.
They took full advantage of an advantageous geographical location: 85% of the world population is within a 10-hour flight from either Qatar or the UAE. Emirates and Qatar Airways connect all continents, except Antarctica.
This transformation i
nto super connectors did not come without controversies. The most vocal are the Big Three US legacy carriers, through the Partnership for Open and Fair Skies. They accuse the Gulf Carriers of benefiting from massive subsidies that allow them to underprice their competitors.
As part of a deal between Qatar, the UAE, and the USA, the Big Three Gulf Carrier started publishing audited financial statements. Emirates’ and Qatar Airways’ financial statements are publicly available on their websites since 1994 and 2015, respectively. Etihad Airways has been releasing some income statement information since 2010.
Ahead of the upcoming Dubai Air Show Nov. 18-19, LNA had a look at those financial statements. We outline our takeaways in this article.
Summary
- Very high growth at all three airlines;
- Funded by different means;
- Global slowdown and Geopolitical tensions force strategy rethink;
- Varying levels of earnings quality;
- An unsuspected (significant) source of revenues.
Is reengining the Boeing 767 a good idea? Part 3.
By Bjorn Fehrm
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Introduction
October 31, 2019, © Leeham News: We have looked into what a reengining of the 767 with GE GEnx engines would give over the last two weeks. FlightGlobal wrote Boeing considers reengining the 767-400ER with the GEnx engine to produce a new freighter and perhaps a replacement for the NMA project.
We analyzed the aircraft fundamentals in Part 1, then passenger and cargo capacities in Part 2 and now we finish with the economics of different possible variants compared with the standard 767 and a possible NMA.
Summary:
- The economic improvement of a GEnx reengined 767 is hampered by the new engine’s larger size and higher weight.
- After catering for the increased empty weight and drag of a reengined 767, the result puts the project in question.
- A reengined 767 is far from a replacement for the NMA.
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Airbus 2019 results hit by A320neo delivery delays
By Bjorn Fehrm
October 30, 2018, © Leeham News: Airbus announced 3Q 2019 results today. Revenue and profits for the first nine months were up from last year but the company is still wrestling with delivery problems for A320neos from its Hamburg factories. The delays during the first nine months cannot be caught up and the delivery guidance for 2019 is now 860 aircraft instead of 880-890.
Guided free cash flow will suffer as a result while profits for the year are guided unchanged as the first nine months delivered healthy profits.
