Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- AIN Media Group Agrees to Acquire Leeham News & Analysis June 17, 2025
- Five for Five: Air India crash points to systemic problems at Boeing that CEO Ortberg must fix June 15, 2025
- Airbus sees Boeing as medium-term competitor, with Comac next June 14, 2025
- Boeing bullish on 20-year forecast, despite short-term headwinds June 14, 2025
- Embraer’s 20-year market forecast under 150 seats: fewer turboprops, jets about the same June 14, 2025
Is Long-Haul LCC viable? Part 3
By Bjorn Fehrm
April 11, 2018, © Leeham News: In the second article if Long-Haul LCC is a viable business, we described the cost items which have to be part of a Revenue versus Cost analysis.
In a subsequent article, we used our performance model to develop the typical costs for the aircraft types we study. We now look at these typical costs, discuss their background and relative importance.
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American A330neo loss casts shadow over sales prospects
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Introduction
April 9, 2018, © Leeham News: Even as Airbus touted the new 251t A330-800 and optimism that aging A330-200s will kick start a replacement cycle in 2020-21, the
Airbus A330neo. Photo via Google images.
concurrent loss of a campaign to sell the model to American Airlines casts a shadow over the model and the entire program.
Airbus had just come off the cancellation of the only A330-800 order, by Hawaiian Airlines, which flipped to the Boeing 787-9. As the sole customer for six A330-800s, the cancellation was expected.
Airbus hoped that an American order, for 20 -800s, would prove to be the endorsement of the program that was needed to spur worldwide sales.
Boeing was just as adamant that, like Hawaiian, American order the 787. In this case, Boeing had the leg up: the 787 was already in AA’s fleet (37 of 42 previous orders were already delivered). American wanted to simplify its fleet, not add another type. And airline officials were skeptical of the -800 for the very reason Airbus was so in need of AA’s order.
Summary
- American’s order would have been the boost needed for the A330neo program.
- It would have been an endorsement of the A330-800.
- The 251t, 8,150nm version of the -800 makes a good, niche long-haul airplane.
India’s airlines order huge numbers of airplanes
April 5, 2018, © Leeham News: India is one of the fastest-growing aviation markets in the world, with airlines there ordering a massive number of airplanes for their size.
- Jet Airways announced a firm order for 75 Boeing 737 MAXes after this article was written.
Airbus and Boeing are selling hundreds of airplanes to India’s fast-growing airlines.
The most prominent airlines have nearly 1,000 airplanes on order. The leading, and most profitable, low-cost carrier, Indigo, is now considering ordering up to 50 twin-aisle aircraft for its first foray into long-haul, LCC service, in competition with the perennial loser, Air India.
It’s also one of the most challenging aviation environments. The government has policies that make it difficult for carriers to operate efficiently.
There have been a number of airline start-ups that make competition fierce. There have been a lot of airline failures.
Operational costs of a Long-Haul LCC
By Bjorn Fehrm
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Introduction
April 05, 2018, © Leeham News.: In an article yesterday we described the different costs types for a Long-Haul LCC. We also explained the different parts of the Operational costs for the airline’s aircraft operations.
We will look at the size of these Operational costs in Part 3 of the article series. In this article, we use our aircraft performance model to develop these costs for the LCC’s aircraft.
Summary:
- The smaller Boeing 737 MAX 8 is surprisingly cost competitive with the larger and more capable Airbus A321LR, A330-900 and Boeing 787-9 on our selected route.
- The low trip and seat costs of the MAX 8 can only be used on transatlantic routes like our New York – London route. Any further into the US or Europe and the MAX 8 runs out of range.
China proposes tariffs on Boeing planes, but it’s less than meets the eye
April 4, 2018, © Leeham News: The Trump Administration’s ill-conceived proposed tariffs on aircraft parts made and imported from China prompted what on the surface appears to be a hit back at Boeing, but which in reality seems more fluff than substance.
Jon Ostrower broke the news yesterday about the list of aircraft components Trump proposes tariffs on. Since Boeing uses China for some of its aircraft components, the tariffs would hurt Boeing.
China today proposed 25% tariffs on Boeing airplanes—but excludes the MAX 8 by weight. (The MAX 7 may be included, with between 10-20 announced ordered by two Chinese airlines).
According to Airfinance Journal Fleet Tracker, there are only 19 737-800s remaining on order for delivery this year through 2021. This doesn’t include any Unidentified orders.
Eight -800s are scheduled for delivery this year, six in 2019, two in 2020 and three in 2021.
US aerospace analysts are unimpressed. The following is a synopsis of their reaction.
Is Long-Haul LCC viable? Part 2
By Bjorn Fehrm
April 04, 2018, © Leeham News.: In the first article about Long-Haul LCC and if it’s a viable business, we looked at ticket pricing strategy used by airlines to maximize revenue on a route. Now we look at the cost side of the equation.
The cost level for a Long-Haul LCC is of utmost importance. A lower cost level than the Legacy carriers flying the same routes is the only way the company can compete. It’s seldom it offers origins or destinations not offered by other airlines. Its mission is to offer a popular air transport service at a lower cost.
Pontifications: The Airbus-Boeing chess game
By Scott Hamilton
April 2, 2018, © Leeham News.: While Boeing edges toward a decision whether to launch the New Midrange Aircraft, the NMA or 797 as it’s known, Airbus ponders how to respond—either pre-emptively or after Boeing’s move.
Responding with an A321neo Plus is widely known, but it’s also logical the Airbus would look at enhancements for the A320neo. Less likely but probably studied are also enhancements to the A319neo. Studies, after all, pre-date the agreement last fall with Bombardier to acquire 50.01% of the C Series program and Airbus clearly understood that the present A319neo is as unattractive as was the original design of the Boeing 737-7.
Embraer gears up for E2 delivery; a look at the 100-150 seat sector demand
March 31, 2018 © Leeham News: The first Embraer E2 jet will be delivered April 4, to Norway’s Wideroe Airlines.
The E190-E2 seats 114 passengers in one-class, 29-inch pitch and 106 at 31-inch pitch, putting it at the low end of the 100-150 seat sector that is often maligned as a Bermuda Triangle for airplanes of this size.
Wideroe of Norway takes delivery of the firzst Embraer 190-E2 April 4. Photo: Embraer
The E190-E2 competes with the Bombardier CS100, a 110-seat airplane in one-class. Neither Airbus nor Boeing have a competing product. Each offers a larger airplane in the 125-150 sector, the A319neo and 737-7 MAX respectively. Embraer and Bombardier offer the E195-E2 and CS300 in this sub-sector.
Is Airbus’ A330-800 the longest range widebody under 300 seats?
By Bjorn Fehrm
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Introduction
March 29, 2018, © Leeham News: Boeing’s 787-9 has opened new ultra-long routes such as Qantas’ first flight from Perth in Australia to London Heathrow last weekend (a 7,900nm, 17-hours flight). The 787-9 has been the undisputed long-haul star under 300 seats, with Airbus A350-900ULR underbidding the Boeing 777-200LR’s fuel burn for over 300 seats ultra-long haul flying.
But the competition for below 300 seat ULR alternatives will change in two years. Airbus A330-800 is then available in its 251t version. It will fly longer than the 787-9, according to Airbus.
The range of 7,635nm given by Boeing for the 787-9 and 8,150nm by Airbus for the A330-800 is not using the same seating and fuel reserve rules. We use our performance model to weed out the differences, to make an apples-to-apples comparison of the 787-9 and A330-800 as ULR aircraft.
Summary:
- The choice between the 787-9 or A330-800 for Ultra Long-haul Routes (ULR) will depend on the passenger loads which can be expected.
- For thin routes, the A330-800 will be the cheaper aircraft to operate.
- It will also fly longer on thin routes, as its large tanks mean passenger capacity can be traded for more fuel further than for a 787-9.
- When the 787-9 can be filled, it’s the choice with the better seat-mile cost, as it should; it’s the larger aircraft, spreading fixed costs over more paying passengers.
Spies and industrial spying
By Scott Hamilton
Scott Hamilton
March 27, 2018, © Leeham News, Bainbridge Island (WA): The unexpected US order to close the Russian Consulate in Seattle this week set off a media frenzy in this city because two reasons cited were the proximity of the consulate to Boeing and two US naval bases, Bremerton and Bangor.
There is a third, smaller one, in Everett, but this wasn’t mentioned.
Bremerton is a major repair-and-overhaul base for ships, ranging from aircraft carriers to submarines to frigates and support ships.
Bangor is home to Trident nuclear missile subs and the spy sub, USS Jimmy Carter.
I live on Bainbridge Island, a stone’s throw to Bangor (ground zero in a North Korean nuclear missile attack?) and a 45-minute drive to Bremerton. It’s 45 minutes from here to Boeing Field via ferry and car.
Boeing, of course, is the principal home to Boeing Commercial Airplanes. The commercially-based P8 Poseidon and the KC-46A tankers are built here.