Pontifications: Good A220 endorsement, but Airbus still has cleaning up to do

By Scott Hamilton

Aug. 5, 2019, © Leeham News: Airbus last week won a big, validating commitment from Air France-KLM Group for 60 orders and more options for the A220-300.

The contract won’t be firm until later this year, but the AF Memorandum of Understanding (when converted) brings the A220 order book to 611. There are some other commitments that haven’t yet been converted to orders.

Through mid-July, there were 86 A220s in service. There were 465 Letters of Intent, MOUs and Options before the Air France deal was announced.

But of those firm orders, 110 of them aren’t so firm. In fact, some of them really shouldn’t even be on the books.

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Boeing MAX crisis overshadows other challenges

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July 29, 2019, © Leeham News: The 737 MAX crisis overshadows everything else right now at Boeing.

This includes forward orders, weak customers and production gaps on the 787 line, which right now is the cash flow cow at Boeing Commercial Airplanes.

Boeing’s production line for the 787 is filled through 2021, but after that, there are big gaps. Source: Leeham Co. Click on image for a crisp view.

Executives only briefly, and obliquely, touched on the 787 during the 2Q2019 earnings call last Wednesday.

This prompted LNA to examine the details of the backlog and production rates. The 787 is current being produced at a rate of 14/mo.

There are clear signs of challenges, both near- and medium-term for the 787.

Summary
  • Weak customers threaten to create deferred deliveries near-term.
  • There will be about 20 A330s and 777s coming off lease each year from 2021-2026 on top of retirements. Airbus and Boeing see these are replacement opportunities.
  • The production back delivery stream falls off the cliff in 2022.

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How much of an NMA market will the Airbus A321XLR capture? Part 2

By Bjorn Fehrm

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Introduction

July 25, 2019, © Leeham News: We continue our discussion from last week of what part of an NMA market the Airbus A321XLR would capture.

We started the study by comparing the aircraft with a common yardstick. It brought some revealing insights. Now we continue by looking at the airline routes these aircraft can cover and their economics when covering these routes.

Summary:
  • The NMAs and the A321XLR cover the same routes with small differences in range performance.
  • The major difference is in their passenger capacity, where they are complementary rather than competitors.

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Pontifications: Boeing can’t catch a break

By Scott Hamilton

July 15, 2019, © Leeham News: Boeing can’t catch a break.

Some may argue it doesn’t deserve one, given what’s come out about the 737 MAX development. And the sloppy production of the 787 at the Charleston (SC) plant. And the FOD issues with the KC-46A at the Everett (WA) plant.

To be sure, Boeing has gotten a lot of bad press it’s deserved. But last week, two pieces of news had connections to the MAX that were (1) overwrought and (2) unwarranted.

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Bjorn’s Corner: Kjos departure signals changes at Norwegian

By Bjorn Fehrm

July 12, 2019, ©. Leeham News: Norwegian Air Shuttles’ (Norwegian) founder and CEO for 17 years, Bjorn Kjos stepped down yesterday.  Over the last year the CFO, Board chairman and now the CEO have changed.

This signals a change in strategy for Norwegian. The new management is focused on halting growth and cutting costs. Norwegian must now consolidate itself to profitability.

Figure 1. Norwegians Intercontinental network spring 2019. Source: Norwegian.

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Predictive power of cargo volumes

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By Vincent Valery

July 8, 2019, © Leeham News: It has been said that the collapse of freight volumes in the second half of 2008 preceded the sharp drop in passenger traffic. Cargo also allegedly led the passenger recovery in the second half of 2009. We will verify with IATA data whether the data backs such claim.

We will also check whether cargo volumes still have as much predictive power in the post Great Recession world. The current context of increasing trade tensions and signs of economic slowdown make this analysis relevant. We will ponder whether the next global recession is around the corner.

Credit: Cathay Pacific.

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Lessors, airlines seek 1 year lease extensions in MAX groundings

June 26, 2019, © Leeham News: Airlines and lessors are making plans to extend leases by up to one year as the Boeing 737 MAX grounding drags on with no end in sight and carriers scramble to cover their routes, LNA is told.

Shortly after the MAX was grounded, on March 13, airlines began extending leases on airplanes that were to be replaced by the MAX up to six months.

This was until the September-October timeframe.

Now, with estimates that the Federal Aviation Administration may not be ready to lift its grounding order until then—and other regulators may come later—airlines see a need for another lease extension.

Lessors are not interested in another six month extension, however, LNA is told.

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The range of Airbus A321XLR

By Bjorn Fehrm

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Introduction

June 27, 2019, © Leeham News: Airbus launched the extended range A321XLR last week at the Paris Air Show.

The range of the aircraft was presented as 4,700nm with an “around 200 seat” cabin. This was 200nm more than the market expected.

We use our performance model to explain what is behind the 4,700nm figure.

Air Lease was the first presented customer for the A321XLR last week. Source: Airbus.

Summary:
  • The 4,700nm is with “around 200” passengers and with the Airbus short range rule set.
  • We calculate the range of the A321XLR with typical airline rules and with different cabin configurations, including a three class long-range cabin with lie-flat business seats.

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A321XLR: where airlines will fly the Airbus aircraft

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By Vincent Valery

June 24, 2019, © Leeham News: As widely expected Airbus officially launched the A321XLR on the first day of the Paris Air Show. First deliveries are expected in 2023.

With the Maximum Takeoff Weight increased to 101 metric tons the manufacturer claims a range of 4,700 nautical miles while carrying 200 passengers. This represents an extra 700 nautical miles compared to the LR variant.  Accounting for real world airline seating configurations and fuel reserves, the effective range will be lower.

Nevertheless, it will represent a significant improvement over the LR. Serial airline entrepreneur David Neeleman claims that the A321LR does not match the range of the Boeing 757-200. The XLR variant will have meaningfully more effective range than the out-of-production Boeing aircraft.

According to Airbus the A321XLR can fly direct between city pairs such as London – New Delhi and New York – Rome.

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Paris Air Show, Day 4: Closing orders, commitments

June 20, 2019, © Airfinance Journal: By day four of the Paris Air Show, most of the OEMs had already wrapped up their deal-making, but there was still time for Airbus to tempt another two airlines and another lessor towards the A321XLR and the A220-300 products.

Airbus and CFM are the manufacturers that will leave Paris the happiest, although ATR was keen to make its case, citing 75 “new orders” at the show. However, in line with the odd phrasing employed by most marketing departments this week, it was difficult to discern what those “orders” meant. ATR said they included “35 firm orders from NAC disclosed on June 18”, but its press release about that deal described only a “letter of intent for 35 firm ATR -600s, with options for a further 35 and purchase rights for another 35.”

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