Leeham News and Analysis
There's more to real news than a news release.
Farnborough, Day 1: Boeing jumps to orders lead; De Havilland puts new life into the Dash 8-400
July 22, 2024, © Leeham News: Boeing was the clear winner in the orders announcements today at the Farnborough Air Show.
The beleaguered company announced orders, options, and commitments for 78 aircraft (see chart). Rival Airbus announced a Memorandum of Understanding for just five airplanes.
Tiny De Havilland of Canada announced firm orders and commitments for 11 “Certified Refurbished” Dash 8-400s.
The Certified Refurbishment Program is a multi-step process to rework used Dash 8-400s “to keep the fleet flying.” DHC terminated production of new -400s during the COVID pandemic when the old Bombardier factory at Downsview, Toronto, was closed. The airport there is being redeveloped. DHC is building a new plant in Calgary in Western Canada. It’s unclear if production of new -400s will resume. When the factory is complete.
“DHC has actively been acquiring aircraft in the marketplace and has begun upgrading these aircraft for delivery to customers looking to expand their fleets or become Dash 8 customers for the first time,” the company said in a statement.
DHC says refurbishments include:
- Aircraft configuration to match the customer’s existing fleet
- Completion of overdue maintenance, integration of Airworthiness Directives, and Service Bulletin upgrades
- Airframe life extensions through our ESP (Extended Service Plan) to extend the lives of Dash 8-100/200/300 to 120,000 cycles, or the ESP+ which can take the Dash 8-100 to 160,000 cycles
- Freighter conversions, including the introduction of the new Dash 8-400 Large Cargo Door and Quick Change between cargo and passenger missions
- Avionics upgrades
DHC has acquired 28 -400s for the program so far.
Boeing sees traffic recovery from pandemic, growth for future in latest forecast
By Scott Hamilton
July 19, 2024, © Leeham News: Boeing sees airline traffic recovery to near-pre-COVID pandemic levels in its latest 20-year forecast for aircraft demand.
It also sees growth through 2043 along similar lines announced by Airbus last week in its 20-year forecast. The numbers between Airbus and Boeing are inconsequentially different. Boeing includes regional jets in the 70-90 seat sector; Airbus doesn’t forecast the RJ market. Over the next 20 years, Boeing forecasts deliveries of just over 1,500 RJs—a market that has been shrinking for years.
Embraer, the sole manufacturer outside of China and Russia of RJs, hasn’t announced its 2024 forecast (this usually comes during the international air shows—Farnborough is next week). Nor does it break out the RJs in its forecast, which is for single-aisle jets up to 150 seats.
In its 2024 20-year forecast released last month, the Japan Aircraft Development Corp. (JADC) forecasts deliveries of 1,584 new RJs in the 61-100 seat sector—very close to the Boeing number for RJs and the Boeing and Airbus numbers overall. The JADC forecast is the only one to provide details for sub-sectors within the RJ, single-aisle, and twin-aisle markets.
Aircraft Certification: How the Max crashes changed everything
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By the Leeham News Team
The Airbus A321XLR got caught up in the new aircraft certification environment created by the Boeing 737 MAX crisis. Source: Airbus.
July 18, 2024, © Leeham News: Much of the attention in the airline industry has recently been focused on the production issues faced by both major OEMs, Airbus (AB) and Boeing (BA). Supply chains are snarled, airlines had to re-jig their fleets, keeping less efficient aircraft in service longer than they planned and financial performance suffered.
LNA recently drilled down and detailed the long-term effects on Southwest Airlines, which is dealing with jet certification delays and must make do with a less-than-ideal fleet mix.
One of the overlooked aspects are the consequences of the Boeing 737 Max 8 accidents and subsequent Alaska Airlines 737 Max 9 door plug blowout is the effect it is having on getting new, more efficient variants certified into service to replace older aircraft.
Both OEMs have been affected. Airbus had to push back the introduction of its A321XLR by about a year, but a detailed inspection by LNA reveals that Boeing is suffering more from the increased scrutiny of the FAA and Congress.
Airbus sees 3.8% growth in new aircraft deliveries through 2043 vs last year’s forecast
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By Scott Hamilton
July 15, 2024, © Leeham News: Airbus boosted its 20 year forecast for new aircraft deliveries by 3.8% compared with last year’s Global Market Forecast (GMF).
Single aisle mainline aircraft (ie, no regional jets) deliveries edge up by 880 aircraft in the new forecast. Widebody passenger and freighter deliveries also edge up, by 700 aircraft.
GMF forecast 2024-2043
Airbus summarizes:
- Initial average traffic growth rate of 8.4% CAGR until 2027 as it recovers growth lost during the pandemic;
- Long term trend: average annual passenger traffic growth of 3.6% per year from 2027 to 2043, and 3.1% for freight;
- China and India, and more generally Asia-Pacific as a whole, will power growth, further shifting aviation’s center of gravity’ towards Asia;
- The projected 2043 world Fleet-In-Service will be 48,230 in 2043 vs. 24,240 beginning of 2024.
Demand for 42,430 new passenger and freighter deliveries (vs. 40,850 GMF2023) in the 2024-2043 period;
- Of these: 33,510 Single aisle (v 32,630 GMF2023); 8,920 Widebodies (v 8,220 GMF2023);
- This is 1,580 more (v GMF23) reflecting one extra year of growth
- Freighter demand: 2,470 deliveries of which 940 are new-build, the rest coming from P2F conversion; and
- Growth primarily driven by GDP increase (+2.6% 2023-2043), middle class expansion, first time fliers, and growing trade (+3.1% 2023-2043 CAGR vs. +2.9 % GMF23).
Airbus does not specify sub-categories of the single- and twin-aisle sectors. It’s not possible to delineate sub-sectors such as 100-150 seats or 151-240 seats or similar designations within the twin-aisle sector with the information available.
But in the first half of 2024, the A321neo accounts for 93% of the A320 family orders. The A320neo won 6.5% (there was one order for the A319neo.) There were no orders for the A220.
To what extent can the A321XLR replace the Boeing 757, Part 3
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By Bjorn Fehrm
July 11, 2024, © Leeham News: We are comparing the Airbus a321XLR to the Boeing 757 to understand to what extent it can replace the 757 on the longer routes it operates for major airlines like United, American, and Delta.
We have looked at the development and operational history of the aircraft, their Apples-to-Apples capacity and range. Now, we use Leeham’s Aircraft Performance and Cost Model (APCM) to compare the operational costs of the aircraft.
Summary:
- The Boeing 757-200 has the same passenger capacity as the A321LR/XLR and a larger cargo capacity.
- Its range can compete with the A321LR but not the XLR. Both beat the 757 on operational economics.
To what extent can the A321XLR replace the Boeing 757, Part 2
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By Bjorn Fehrm
July 4, 2024, © Leeham News: We are comparing the Airbus A321XLR to the Boeing 757 to understand to what extent it can replace the 757 on the longer routes it operates for major airlines like United, American, and Delta.
After Boeing didn’t do the obvious 757 replacement, the NMA and Airbus gradually eked out more range and seats on the A321; the A321LR/XLR is the only game in town to replace the 757, especially as the Boeing 737-10 availability continuously slips to the right.
Summary:
- The A321LR/XLR has the same passenger capacity as the 757-200.
- The 757-200 has the range of the A321LR but can’t match the A321XLR.
Boeing is fighting fire with fire in reacquiring Spirit Aero (Updated)
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By Dan Catchpole
Analysis
July 1, 2024, © Leeham News: This is an analysis of Boeing’s reported $4.7 billion purchase Spirit AeroSystems, as Reuters reported Sunday.
First, let’s set the frame.
Boeing seems incapable of doing anything right these days. Even a pre-Farnborough Airshow media briefing by the aerospace giant last week resulted in a reprimand from the National Transportation Safety Board for sharing information about its investigation into the panel blowout on an Alaska Airlines flight on Jan. 5.
The company is bleeding money in its commercial and defense divisions. Boeing could turn around its balance sheet if it could straighten out production for its cash cows—the 737 and 787. Yet somehow, both programs are still struggling.
Boeing’s pissed off the Federal Aviation Administration, the NTSB, key members of Congress, some of its biggest customers, and the Machinists union in Washington and Oregon, among others. Its current CEO is a lame duck who helped create the crises overwhelming the company. Potential successors have said they don’t want the job. Among the front-runners to succeed David Calhoun is BCA’s new CEO Stephanie Pope, who has no production or product development experience and has had few public appearances since she took over BCA in March. There are plenty more problems, but you get the point.
Spirit AeroSystems has been floundering since the COVID-19 pandemic threw the aviation industry into chaos. Since 2020, it has recorded $3.2 billion in net losses, including $617 million posted in the first quarter of this year. Boeing has helped keep the company afloat with financing and price changes.
In short: Boeing is fighting countless fires, and it just bought another one.
Can Boeing fight fire with fire?
To what extent can the A321XLR replace the Boeing 757, Part 1.
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By Bjorn Fehrm
June 27, 2024, © Leeham News: The Airbus A321XLR, the extra-long-range version of the A321neo, will start operational service with IBERIA on the Madrid-Boston trans-Atlantic route later this year. It’s the type of thin, long-range route the Boeing 757 has served to date.
We will use our Aircraft Performance and Cost model (APCM) to examine to what extent the A321XLR can replace the 757 on world routes. What is the difference in capacity and range, and what improvement in operational economics can be expected?
Summary:
- The Boeing 757 was the original MOM/NMA (Middle-Of-the-Market / New-Midmarket-Airplane).
- It had unique characteristics, which Boeing would have followed up with the NMA project.
- Boeing hesitated, and Airbus developed the A321XLR to fill this role. Has it succeeded?
Airbus lowers 2024 guidance amid A320/A321 supply chain and space system challenges
Bjorn Fehrm
June 24, 2024, © Leeham News: Airbus issued a press release today where it lowered guidance for 2024.
The release highlighted two areas as the drivers for the update:
- Larger-than-expected supply chain issues for the single-aisle segment (A320/A321), where delivery ramp problems in engines, aerostructures, and cabin equipment mean that the guidance for 2024 goes from 800 aircraft in total to 770. Because of this, the ramp to 75 A320/A321 deliveries per month has been moved out a year to 2027 instead of as previously forecasted 2026.
- The Defence and Space Systems management has, after an extensive review, found schedule, workload, and sourcing challenges for certain Space telecommunications, navigation, and observation programs. Airbus has decided to record charges of around € 0.9bn in the H1 2024 report to cover the problems in these programs.
As a result, Airbus has decided to update the 2024 guidance ahead of its 1H2024 results release, which is on 30 July:
- Around 770 commercial aircraft deliveries (was 800).
- EBIT Adjusted of around € 5.5 billion (was €6.5bn to €7bn).
- Free Cash Flow before Customer Financing of around € 3.5 billion (was € 4bn).
Airbus adds the usual caveats to the guidance:
The Company assumes no additional disruptions to the world economy, air traffic, the supply chain, the Company’s internal operations, and its ability to deliver products and services. The Company’s 2024 guidance is before M&A.
Aircraft production woes stretch far beyond Boeing
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By Judson Rollins
June 17, 2024, ©. Leeham News: Estimating airplane delivery rates isn’t much more than a guessing game nowadays.
While many headlines point fingers at beleaguered Boeing and Spirit AeroSystems, aviation’s production woes are much more complex. Even in 2024, the labor shortage legacy of COVID-19 and raw material shortages exacerbated by the Russia-Ukraine war loom large over the industry.
Airbus struggles to deliver airplanes on time, and engine makers also see their deliveries constrained by supply chain issues.
Source: AFP via Aviation Week Network.
Summary
- Boeing commercial production is far below advertised rates.
- Airbus deliveries suffer from shortages of seats, other parts.
- Embraer says deliveries would be higher without supply chain issues.
- COMAC’s disruption opportunity is dampened by likely trade conflict.
- Pratt and GE Aerospace slowly ramp up delivery of redesigned components.