Bjorn’s Corner: Keeping airliners operational. Part 1

By Bjorn Fehrm

April 20, 2017, ©. Leeham Co: We will start the series on keeping airliners operational by discussing how the structure is kept fit.

There are three areas that are more key to flight safety of an airliner than others. The aircraft’s structure, the engines (already discussed) and the flight control system. We will start with the structure.

Figure 1. The first modern maintenance program was formed around the Boeing 747. Source: Wikipedia.

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Aeroflot, the route to a modern airline. Part 3

By Bjorn Fehrm

April 26, 2017, ©. Leeham Co: In our third article about Aeroflot, we cover the period from 2010 to today. During this period, Aeroflot started a strategic change. The airline decided to grow to a global world leader.

To get there, the group needed a multi-brand strategy. The top brand, Aeroflot, should develop into a top tier premium airline. To understand the considerable changes Aeroflot needed to go trough for this strategy, we talked to Aeroflot’s Deputy CEO Strategy and Alliances, Giorgio Callegari, about the transformation.

Callegari took us through the journey to a Four-star airline and the ranking of Aeroflot as the world strongest airline brand in its area of operation. To validate the improved ratings, we contacted Skytrax and Brand Finance, the issuers of the ratings. Read more

Boeing’s BHAG: Is $50bn Service Revenue Goal Achievable?

 Special to Leeham News and Comment

By Kevin Michaels, Managing Director, AeroDynamic Advisory

Business gurus Jim Collins and Jerry Porras coined the phrase “Big Hairy Audacious Goal” (BHAG) to describe a business objective which is highly ambitious,

Kevin Michaels

galvanizes the organization, and is often met with skepticism from outside observers. Boeing recently created a BHAG that could transform aerospace MRO. Its goal is to triple its service revenue to $50bn within the next decade, and it is taking decisive action achieve its vision.

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A330 easier to re-lease than 777

This is the second of two Parts looking at the wide-body market

April 25, 2017, © Leeham Co.: When lessors face re-leasing wide-body airplanes as lease terms expire, they face a far narrower market than for single-aisle airplanes.

While there may be a thousand operators which can be targets for Airbus A320s and Boeing 737s, there may be only a hundred operators interested in the most popular wide-body aircraft. When you get to the Very Large Aircraft sector, the potential market declines to the figurative, and perhaps literal, handful.

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7M7 is key to Boeing’s future

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Introduction

An enthusiast’s concept of the Boeing 797. Image via Google.

April 24, 2017, © Leeham Co.: Boeing faces growing challenges this year as airplane sales slow, production of the 777 Classic declines, its new Global Services unit prepares to formally launch and a decision whether to authorize a sales offering for the New Midrange Airplane looms.

We’ve spent a lot of time covering slowing sales and declining 777 production. Tomorrow, we’ll have a special report on the ambitious Global Services strategy.

We’ve also spent a lot of time on the Boeing NMA. LNC’s Bjorn Fehrm last week presented number three in a paywall series on the NMA, looking at it from a technical viewpoint. We’ll take a look at it from a strategic point of view today.

Summary
  • There is a demand for the NMA that is commercially viable.
  • Middle of the Market sector is larger than typically defined.
  • 7M7 is key to Boeing’s future.

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AVi8 to be ‘clearing house’ for lessors, OEMs, airlines

April 24, 2017, © Leeham Co.: AVi8 Air Capital is a new lessor with a different business model.

Instead of the standard operating lease model, Avi8’s mission is to buy groups of airplanes from other lessors and later sell them. AVi8 intends to be a clearing house for other lessors.

The company, which pronounces its name with the long “A” (as in aviator), was formed last year and expects to conclude its first transaction this year.

“The difference between AVi8 and other leasing companies is as follows,” says Sisson. “When I was running AWAS, I was told by a number of investment banks that you get economies of scale by getting between $12bn and $18bn in assets. You can be bigger than that, but when you get between $12bn and $18bn, you capture real economies of scale – you’re buying enough new aircraft from OEMs, financing aircraft in bulk in capital markets/bank syndicates/Export Credit agencies, and leasing enough aircraft to airlines globally.”

This, among other things, was important to the rating agencies, Sisson said.

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Bjorn’s Corner: Keeping airliners operational

By Bjorn Fehrm

April 20, 2017, ©. Leeham Co: We expect our flights to depart on time and with 100% safety. At the same time, the aircraft is used up to 14 hours and flies up to 5-6 missions a day.

This means 1,800 flights a year. As airliners will last 25 years, we talk about 45,000 flights with 99.7% dispatch reliability and 100% safety.

It’s clear the aircraft must be cared for in a special way. We’ll discover how.

Figure 1. The first modern maintenance program was formed around the Boeing 747, here at the roll out in 1968. Source: Wikipedia.

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Aeroflot, the route to a modern airline, Part 2

By Bjorn Fehrm

April 19, 2017, ©. Leeham Co: In our second article about Aeroflot, the Soviet Union flag carrier that transformed to a modern airline, we will cover the period from the fall of the Soviet Union until 2010.

This was the difficult period for all participants. The old structures no longer existed and were replaced with… nothing, followed by uncertainty and a long struggle to get back to normal.

Figure 1. IL-96-300, a Soviet long range aircraft which stayed in the Aeroflot fleet until 2014. Source: Aeroflot.

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Asian airline shift portends big ramifications

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Introduction

April 17, 2017, © Leeham Co.: A shift is underway among Asian airlines that could have ramifications for the airframe and engine manufacturers and, by extension, their suppliers.

It doesn’t appear, however, that aerospace analysts in the US and Europe realize this shift. At least none has written about it that we’ve seen among the research notes we receive.

Summary
  • The creation of the Value Alliance of Low Cost Carriers brings together eight LCCs under one alliance.
  • AirAsia faces a competitive threat.
  • Full service carriers also face a threat, particularly those in Japan, concludes one aerospace analyst team in the region.
  • Airbus, Boeing have a backlog of more than 1,000 airplanes with the VALCC group and hundreds more with other airlines.
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Aeroflot, the route to a modern airline

By Bjorn Fehrm

April 12, 2017, ©. Leeham Co: Aeroflot, established as the Soviet Union’s flag carrier in 1923, transformed from a state enterprise to a modern airline group after the fall of the Soviet Union in 1991.

The airline is today Europe’s seventh largest airline, two-thirds the size of Turkish Airlines, but having the same fast growth since 2005. We will cover Aeroflot’s journey in a series of articles, starting with the group’s history.

Figure 1. Aeroflot Boeing 777-300ER. Source: Wikipedia.

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