Leeham News and Analysis
There's more to real news than a news release.
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.
Engine deliveries affects Airbus 1Q2018 results
By Bjorn Fehrm
April 27, 2018, ©. Leeham News: Airbus Group presented its 1Q2018 results this morning. It’s heavily influenced by A320neo engine delivery delays.
Only 30 A320neos were delivered during Q1 out of a year total of 400. This has left Airbus with 60 A320neo gliders parked at Toulouse and Hamburg, waiting for engines.
Read more
Suppliers confirm Airbus, Boeing rate hike studies to 70/mo for single-aisles
April 26, 2018, © Leeham News: Two suppliers publicly confirmed what’s been whispered for months: 
Airbus and Boeing are checking with the supply chain about taking production rates of the A320 and 737 families to 70/mo.
Representatives of Crane Aerospace and Esterline confirmed the studies at the I-90 Aerospace Corridor conference today in Spokane (WA).
Boeing to hike 767F production; may be only first of several
April 25, 2018, © Leeham News: Buried deep within Boeing’s first quarter earnings report is a single, seemingly innocuous sentence:
“Reflecting the strength of the cargo market, we now plan to increase the production rate on the 767 program from 2.5 to 3 per month beginning in 2020.”
There is more to this than meets the eye. It portends potentially big orders and this rate increase may be only the first to come.
AirAsia India looks to break-even, international flights
April 24, 2018, © Leeham News: AirAsia India is a newcomer to the Indian commercial aviation scene.
It began service in 2014 and, at Dec. 31, served just 17 cities with 14 Airbus A320s.
It had a 4.5% market share by the end of last year.
AirAsia Berhad holds a 49% stake in the airline. India’s Tata Sons holds 49% and the balance is held by Indian nationals which ties to Tata.
The AirAsia entities are tied to the AirAsia Group of Malaysia, the largest low-cost carrier in Southeast Asia.
Bangalore is AirAsia India’s headquarters.
Engine makers may face stiffer future ETOPS certification requirements
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Introduction
April 23, 2018, © Leeham News: Even before last week’s Southwest Airlines accident raised the focus on aircraft engines, industry officials were becoming worried that problems with engines powering the Boeing 747-8, 787, 737 MAX and Airbus A320neo may lead to stricter certification standards by regulatory authorities.
There is also emerging evidence that the issues with the Rolls-Royce Trent 1000 on the 787s may negatively impact Airbus’ sales efforts with the A350. The A350 is
powered by an entirely different RR engine, the Trent XWB, which by all accounts has had a virtually trouble-free entry into service.
But it’s a Rolls-Royce engine and airlines affected by or watching RR’s response to the Trent 1000 problems are skeptical about the Trent XWB, LNC is told.
Summary
- How long will it take for the FAA and EASE to restore full ETOPS for the 787?
- Concerns emerge that regulators may be more restrictive of ETOPS for new engines powering new planes, with the Boeing 777X next up.
- Impact seen on reception of Rolls-Royce engines on Airbus A330neo and A350.
- What do the engine problems mean for the Boeing NMA?