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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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
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Posted on April 24, 2017 by Scott Hamilton
Airbus, Airlines, Boeing, Leeham News and Comment, Middle of the Market, MOM, Premium
737-10, 737-9, 747-8, 787, 787-8, 787-9, 7M7, A321LR, A321NEO, A330-200, A330-800, A380, A400M, Airbus, Boeing
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 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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6 Comments
Posted on April 24, 2017 by Scott Hamilton
Airbus, Airlines, Boeing, Lessors
Airbus, airlines, Avi8, AWAS, Boeing, Lessors, Ray Sisson
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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11 Comments
Posted on April 21, 2017 by Bjorn Fehrm
Airlines, Bjorn's Corner, Boeing
747, Boeing, MRO, Pratt & Whitney
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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Posted on April 19, 2017 by Bjorn Fehrm
Airlines, Antonov, Boeing, CFM, Irkut, Sukhoi, United Aircraft, United Engine Corp., YAK
737, 767, 777, A320, A330, A350, Aeroflot, Airbus, Boeing, Ilyushin, Tupolev, Yakolev
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.
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Posted on April 17, 2017 by Scott Hamilton
AirAsia, Airbus, Airlines, Boeing, CFM, Lessors, Pratt & Whitney, Premium, Rolls-Royce
AirAsia, AirAsiaX, Airbus, airines, Boeing, CebuPacific, CFM, Goldman Sachs, Jeju Air, LionAir, Pratt & Whitney, Rolls-Royce
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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8 Comments
Posted on April 12, 2017 by Bjorn Fehrm
Airlines, Antonov, Boeing, Douglas Aircraft Co, YAK
Aeroflot, AN-10, AN-2, Antonov, Il-14, Il-18, Il-62, Ilyushin, Tu-104, Tu-114, Tu-154, Tupolev
United’s new advertisement after passenger incident
April 11, 2017: United Airlines is in the midst of a public relations nightmare following Sunday night’s incident in which a passenger was dragged off a flight at Chicago O’Hare International Airport.
A new commercial was immediately launched, debuting on the Jimmy Kimmel show. Kimmel had his own caustic remarks.
United also recognized that it needed a new training procedure following the incident. The following is a video for its customer service training.
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90 Comments
Posted on April 11, 2017 by Scott Hamilton
Airlines, United Airlines
Ellen Degeneres, Jimmy Kimmel, United Airlines
Middle Eastern airline turmoil hits Boeing
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Introduction
April 10, 2017, © Leeham Co.: Tim Clark of Emirates Airline said the new breed of long-haul, low cost carriers are hurting EK’s load factors and yields.
Etihad Airlines’ business strategy of taking financial stakes in LCCs hasn’t produced the positive financial results desired.
Three big airlines, EK, EY and Qatar Airways, face over-capacity now compounded by electronic carry-on restrictions by the US and UK.
Figure 1. Click on image for a crisp view.
The thee carriers largely compete for the same connecting traffic through hubs only 72-235 miles apart (Figure 1). This is like having hubs in Milwaukee and Chicago (81 air miles apart) and Chicago-Detroit (237 air miles) with much, much smaller domestic catchment basins.
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Posted on April 10, 2017 by Scott Hamilton
Airbus, Airlines, Boeing, Emirates Airlines, Etihad Airways, Premium, Qatar Airways
777 Classic, 777X, 787, Airbus, airlines, Boeing, Emirates Airline, Etihad Airways, Jim Hogan, Qatar Airways, Tim Clark
Bjorn’s Corner: Aircraft engine maintenance, Part 6
By Bjorn Fehrm
April 7, 2017, ©. Leeham Co: Last week’s Corner developed the overhaul shop visits per year for wide-body engines. We will now look at how the market develops around these overhaul opportunities.
How does the shop structure develop over a popular engine’s life-cycle? How much choice has an operator and when?
Figure 1. Principal picture of a three-shaft wide-body turbofan with station numbers. Source: GasTurb.
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7 Comments
Posted on April 7, 2017 by Bjorn Fehrm
Airbus, Airlines, Bjorn's Corner, Boeing, CFM, Engine Alliance, GE Aviation, McDonnell Douglas, MTU, Pratt & Whitney, Rolls-Royce
Airbus, Boeing, CFM, GE Aviation, Pratt & Whitney, Rolls-Royce
Things get worse before better at Cathay
April 6, 2017, © Leeham Co.: Cathay Pacific Airways faces a loss this year after posting its first loss in eight years last year.
Analysts following the Hong Kong-based airline see another loss, with declining revenues and pricing pressure from competition.
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11 Comments
Posted on April 6, 2017 by Scott Hamilton
Airbus, Airlines, Boeing
777-9, A350-1000, A350-900, Airbus, airlines, Boeing, Cathay Pacific Airways, Daiwa Capital Markets, HSBC Global Research, Morningstar
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