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 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
- Does an Airbus A220-500 need a new wing and engines? May 1, 2025
- Teamsters, Boeing have a new contract April 29, 2025
Air India, the struggling flag carrier
By Bjorn Fehrm
May 16, 2018, ©. Leeham Co: Air India was started by the famous Entrepreneur and Pilot, JDR Tata, in 1932 as Tata Airlines. After WW2, it was renamed Air India and was made the flag carrier for India. In 1953 it was nationalized and a domestic carrier, Indian Airlines, was spun off.
Air India and Indian Airlines were both profitable before re-merging in 2007. Since the merger, the combined airline has been unprofitable as deregulation has increased the competitive pressure both Internationally and Domestically.
WTO issues ruling on EU appeal in Airbus-Boeing complaint
May 15, 2018, © Leeham News: The World Trade Organization today issued its ruling on the European Union appeal of WTO findings that Airbus received illegal subsidies for its commercial airplane programs.
The WTO appeal decision affirmed that the A380 and A350 received improper subsidies. However, all previous Airbus aircraft have repaid subsidies or cured improperly low interest rates, according to a lawyer who has seen the decision.
A summary of the WTO decision is here.
A Seattle Times report is here.
“The A350 got included on an acceleration factor based on low interest rates,” the lawyer told LNC.
Airbus could have proceeded with the A350 without launch aid, he said the WTO concluded.
Airbus claimed 94% of the Boeing complaints were rejected on appeal or through the process, said the lawyer. Six percent of the claims were upheld, involving the A350 and A380. LNC has not done an independent calculation on these figures.
“Boeing is left with a real thin victory,” the lawyer said.
Engines “huge” question for Boeing NMA, says top industry official
May 15, 2018, © Leeham News: The engine problems at all four OEMs mean a later entry-into-service for the prospective Boeing New Midrange Aircraft (797), says an influential figure in commercial aviation.
And the longer Boeing puts off a decision to launch the NMA, the more Airbus A321neos will be in service and the more difficult an already challenging business case for the NMA becomes, says Steven Udvar-Hazy, executive chairman of Air Lease Corp.
Hazy made his remarks at the 38th annual Airfinance Journal conference today in Miami.
Wide-body production rates show mix of strength, weakness
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Introduction
May 14, 2018, © Leeham News: Wide-body production rates by Airbus and Boeing are expected to go up modestly during the next three year, with a jump in 2022—if Boeing 777X production rates head for 7/mo in late 2022, as the company projects.
The supply chain was asked last year by Boeing for a Rate Readiness Assessment that suggests a rate of 5/mo in late 2021 and rate 7/mo a year later.
Airbus is expected to boost production of the A350 to 13/mo as early as late next year. Meanwhile, the A330 production rate is coming down due to soft demand.
These rates omit impacts of the US withdrawing from the Iran Nuclear Deal, in which some 100 Airbus orders, mostly wide-body, and some three-score wide-body Boeing orders disappear with the action.
Summary
- Production rate hikes driven by A350, 767, 787.
- A380, A330, 747, 777 remain weak.
- Is entire twin-aisle market continuing a down-gauging?
Scott Hamilton will discuss production rates at the Southeast Aerospace & Defence Conference next month in Mobile (AL). Click here for more information.
Pontifications: Engine problems are getting worse
By Scott Hamilton
May 14, 2018, © Leeham News: The engine problems are getting worse.
These have moved beyond the technical issues with the Rolls-Royce Trent 1000, GE Aviation GEnx, Pratt & Whitney GTF and CFM56.
The problems are trickling down to the maintenance, repair and overhaul shops.
LNC previously touched on the back-up in MRO shops due to the RR Trent 1000 problems, affecting even Trent 700 (Airbus A330) MRO scheduling. We’ve also reported the knock-on effect of the GTF MRO on other engine shop visits.
The mandated-inspections of CFM56 fan blades in the wake of the Southwest Airlines accident last month inundated MRO shops with unexpected visits.
Now, a European appraisal company forecasts that the “bow wave” of CFM56 shop visits will create a crisis for spare engines and parts.
Etihad faces complex issues in fleet restructuring
May 9, 2018, © Leeham News: Etihad Airways faces a complex series of decisions to make as it ponders how to restructure and stem huge losses.
Market intelligence revealed last year that the airline has been pursuing a path to dispose of five Boeing 777LRs, 22 Airbus A330s, all its A340s and only a few A320 family members.
The company also wants to cancel or defer a variety of Airbus and Boeing aircraft on order.
The 777LRs are going back to its lessor. Bids from multiple parties came in for the A330s. The A340s were simply grounded.
But over-financing, credits for new airplanes on order used against newly delivered airplanes and return conditions complicate fleet restructuring plans, ballooning costs of some moves to a point where officials are having second thoughts about how to proceed.
In January, Etihad named a new chief financial officer, Mark Powers, whose long career includes stints at Frank Lorenzo’s Continental Airlines and Northwest Airlines, where bankruptcies and financial restructurings were part of Powers’ portfolio.
Powers retired from JetBlue in 2016. He has his work cut out for him.
Pontifications: Boeing case against Airbus at WTO: appeal decision due this month
By Scott Hamilton
May 7, 2018, © Leeham News: The World Trade Organization resumes action in the European Union appeal of an adverse ruling in the Airbus illegal subsidies case filed by the US years ago, at Boeing’s behest.
This column appears at the start of the business day in Europe, before the WTO opens its hearing today. By the time the US wakes up in New York for business, today’s hearing will be over. The WTO announced today’s hearing a week ago and initially a decision on the appeal was expected, but it may not come until later this week or next.
Based on history, the WTO will probably affirm earlier decisions that Airbus benefited from illegal subsidies and hasn’t yet cured the violations (ie, repaid the subsidies). Just how sweeping this will be is a matter of speculation.
Throughout the long-running dispute, now in its 14th year, Airbus has been on the losing end of the US complaint at least on some level. The European company has won on some issues and lost on others, but the WTO found that Airbus received subsidies from EU states that violate WTO rules.
The spin from Airbus and Boeing will be along historically predictable lines.
Demand supports rate 70/mo for A320, 737
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Introduction
May 3, 2018, © Leeham Co.: With the supply chain confirming last Thursday that Airbus and Boeing are exploring single-aisle production rates of 70/mo, Airbus confirmed it was doing so during its Friday earnings call.
Boeing continues to be ambiguous, saying only there is “upward pressure” on its 737 production rates.
The supply chain, notably the engine OEMs, already has heartburn over the current rate of 60/mo and 52/mo for the A320 and 737 families respectively.
Summary
- Engine makers CFM and Pratt & Whitney continue to have technical and production issues.
- Airbus and Boeing each have “gliders,” though Boeing’s is a handful vs the dozens at Airbus.
- CFM’s partner, Safran, cautions against rate 70.
Production rates will be among the topics at the Southeast Aerospace & Defence Conference next month in Mobile (AL). Click here for more information.
India’s Spicejet big turnaround
Boeing 737-8. Boeing photo.
May 2, 2018, © Leeham News: Spicejet, the Indian low-cost airline, in its 2016-2017 Annual Report (to March 31) didn’t mince words or try to parse over its troubled history:
“Back after near shutdown. Restoring confidence. Organisational restructuring. Rising crude prices.Stiff competition. Legacy issues. We were determined to transform.”
These words are on the first page of the Annual Report.
Name another airline that is so up-front, open and candid about its past turmoil.