Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
- Tariffs Tumult Takes Over GE Aerospace Q1 2025 Earnings Call April 22, 2025
- Boeing reports mixed results of latest employee survey, but middle management and officers remain key obstacles April 22, 2025
- Hopes for 1Q financial progress turns into bumpy ride for Boeing April 21, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 18. April 18, 2025
Mitsubishi ends 2019 with ~500 commitments for SpaceJet
By Scott Hamilton
Jan. 22, 2020, © Leeham News: Mitsubishi Aircraft Corp. (MITAC) ended 2019 with 495 commitments for the M100 SpaceJets from multiple continents, LNA learned.
All but 100 from US regional carrier Mesa Airlines are unidentified.
Mesa announced a commitment for 50 firm orders and 50 options in September at the US Regional Airline Assn. annual meeting in Nashville.
MITAC wouldn’t comment, but LNA understands that commitments come from North America and Europe. It’s unclear if additional commitments are from Asia.
Japan’s ANA and Japan Air Lines are launch customers for the M90 SpaceJet, previously called the MRJ90. This model was rebranded in June at the Paris Air Show when the M100 SpaceJet program was launched.
Air Canada inaugurates A220-300 service today
Jan. 16, 2020, © Leeham News: Air Canada inaugurates Airbus A220-300 service today, becoming the second North American carrier to operate the A220. Delta Air Lines was the first, with the A220-100 last year.
Air Canada A220-300. Photo by Scott Hamilton.
It is the first North American airline to operate the -300 model. The new service begins on the Montreal-Calgary route.
Airline and Airbus officials paid homage to Bombardier at a celebration yesterday in an Air Canada hanger down the block from Bombardier’s world headquarters on the edges of Montreal Dorval Airport.
Bombardier designed the aircraft, originally called C Series, in a bet-the-company challenge to Airbus and Boeing.
Air India’s Rupee bottomless pit
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By Vincent Valery
Introduction
Jan. 6, 2020, © Leeham News: Air India lost more than $1bn in the fiscal year 2018-19. After years of heavy financial losses, the Indian government is mulling another privatization attempt.
The current Air India is the result of the 2007 merger with another publicly owned airline, Indian Airlines. The Indian flag carrier owns several subsidiaries, including two operationally separate airlines, and a hotel chain.
One would a priori think that the sustained losses are mainly the results of a bloated cost structure. LNA went through Air India’s financial statements since the fiscal year 2007-08 to see whether that is the case.
The root causes of Air India’s chronic losses will make the latest privatization attempt challenging to execute for the current government.
Summary
- A complicated history and structure;
- Strategic decision and competition drag company down;
- Not only a cost problem;
- Lessons from a failed privatization attempt.
Aviation safety continues to improve in the US and Europe
By Judson Rollins
Introduction
Jan. 3, 2020, © Leeham News: Despite all the safety-related headlines surrounding the Boeing 737 MAX, 2019 was a mercifully quiet year with just six fatal airline accidents around the world.
Clifford Law Offices in Chicago recently released an analysis of aviation incidents and accidents reported to the US National Transportation Safety Board (NTSB) from 1982 to 2018. It highlighted several interesting patterns that are probably well known to pilots but perhaps not the rest of the aviation community. LNA also looked at accident data from the European Union Aviation Safety Agency (EASA) for 1970-2017 for comparison.
In 2018, the NTSB investigated 1,581 aviation accidents and incidents that left 847 people dead and another 768 people injured. The vast majority of these, not surprisingly, involved non-commercial general aviation aircraft. Seventy-nine percent of all US aircraft accidents and 72% of fatal accidents involved single-engine planes. In this article, LNA will focus primarily on commercial aircraft operations like the ones defined under US Federal Aviation Administration Part 121 rules.
Summary
- Air travel remains one of the safest modes of transportation;
- Accidents and fatalities have fallen dramatically over the past 40 years;
- The most accidents occur during takeoff and landing, but those during maneuvering and cruising are the most deadly.
Are AirAsia and AirAsia X outgrowing their key markets?
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By Judson Rollins
Introduction
Dec. 16, 2019, © Leeham News: AirAsia and long-haul sister AirAsia X have been growing at world-leading rates for much of the past two decades. AirAsia’s fleet growth in the 2000s was so rapid that it quickly became a top customer of Airbus’s A320 program; the airline is now second only to India’s IndiGo as an A320neo customer.
However, neither of the airlines nor their joint venture partners across Asia are producing solid financial returns–making it questionable whether they can economically fly all the aircraft they have on order.
Summary
- Mediocre financial results after lease expenses;
- Debt loads are above industry average, especially at AirAsia X;
- One of the world’s largest order books, especially for A320neos;
- Key bases in countries where capacity growth outstrips local economic trends.
Norwegian’s attempt to survive
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By Vincent Valery
Introduction
Dec. 12, 2019, © Leeham News: Norwegian Air Shuttle (NAS), struggling to survive after years of over-expansion, took major steps over the last few weeks to overhaul its finances and strategy.
Major strategic shifts included the sale of the Argentinian subsidiary, the end of trans-Atlantic narrowbody operations, and exit out of long-haul markets in two Scandinavian capitals.
The airline appointed Jacob Shram, a former McKinsey consultant and Statoil executive, as a new CEO. Former JetBlue Chief Commercial Officer Marty St. George is also joining the airline on an interim basis.
After years of breakneck expansion, the airline vowed a shift in focus on profitability and business efficiency. In this article, LNA analyzes the various announcements and assesses whether NAS has a chance to survive in the long term.
Summary
- (Finally) cutting the losses;
- No stones left unturned to raise cash;
- Drastically altered fleet plans;
- Chances of working out.
Several aircraft programs beset by engine woes
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By Judson Rollins
Nov. 25, 2019, © Leeham News: Nearly every manufacturer of jet engines is experiencing problems with various models, which is causing delays for several prominent Boeing and Airbus programs. The Airbus A220, A320neo, A330neo and Boeing 787, 777X are all experiencing engine-related setbacks.
Grounded 787s at London Heathrow. Source: Twitter / Alex Macheras.
Summary
- Pratt & Whitney geared turbofan (GTF) operational limitations on A220, A320neo.
- CFM LEAP said to be causing renewed A320neo delivery delays.
- Multiple new airworthiness directives on Trent 1000, 7000.
- GE9x component issues causing delays to first 777X test flight.
Pontifications: Good, and Bad, news from the Dubai Air Show
By Scott Hamilton
Nov. 25, 2019, © Leeham News: The Dubai Air Show proved to be a mixed bag for Airbus and Boeing.
Each company picked up important orders and commitments.
But each company saw some previously announced commitments reduced in the process, including, for Boeing, a reduction in the backlog for the slow-selling 777X.
A tangled web at the HNA Group
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Now open to all readers.
By Vincent Valery
Introduction
Nov. 18, 2019, © Leeham News: The HNA Group, a Chinese conglomerate with a heavy focus on aviation, has been in the spotlight for a few years as its financial condition deteriorated.
Its current state came from its debt-fueled global acquisition spree, then the challenges in deleveraging.
At some point, the group owned stakes in 20 airlines in Mainland China and abroad. Other notable acquisitions include lessor Avolon, Swissport, Servair, SR Technics, and stakes in two foreign airports.
The HNA Group does not publish accounts. LNA went through the financial statements of its flagship subsidiary Hainan Airlines, since 2000, with the goal of better understanding the group structure and assess the airline business profitability.
Summary
- HNA’s relentless growth;
- A buying spree bites back;
- Domestic and foreign airline ownership model;
- Hainan Airlines accounting.
Air France-KLM wants to simplify the fleet
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Nov. 7, 2019, © Leeham News: Air France-KLM will strive to greatly simplify its fleet by early next decade, the group outlined in an investors day presentation Nov. 5.
The Group includes Air France, KLM and Transavia. The low-cost carriers Joon and Hop! are discontinued.
Fleet simplification
KLM
The company wants to reduce today’s fleet types at KLM from six to four, dropping the Airbus A330 and Boeing 747s.
The Future Fleet concentrates around the Embraer E1 and E2 E-Jets; the Boeing 737 NG; the Boeing 787-9 and the Boeing 777 Classic.
At the moment, there are no Boeing 737 MAXes in the future fleet plans. KLM had none on order, even before the October 29, 2018, Lion Air accident.
The possibility of a Boeing 777X is also not shown in the rendering.