Leeham News and Analysis
There's more to real news than a news release.
Bjorn’s Corner: Aircraft engine maintenance, Part 3
By Bjorn Fehrm
March 17, 2017, ©. Leeham Co: In the last Corner, we showed graphs of the yearly flight hours for engines on single-aisle aircraft. Now we will deduce the market for engine overhauls from these graphs.
These will show which engines generate a maintenance volume that is interesting for engine overhaul companies and which engines are niche.
Figure 1. Principal picture of a direct drive turbofan. Source: GasTurb.
Based on the market size, we will then go through how an engine is maintained when new, mature and at end-of-life.
CDB Leasing aims for 500-600 aircraft portfolio
Subscription Required
Introduction
March 16, 2017, © Leeham Co.: China’s evolving commercial aerospace and aviation industry has high-profile companies such as AVIC and COMAC, and its expanding supplier based, combined with joint ventures with Western companies is well known.
Less well known is the growth in the aircraft leasing business. Increasingly, Chinese lessors are showing up on the order lists of the Big Four aircraft manufacturers. Still, there remains a bit of a mystery about the lessors and dynamics within China.
LNC spoke with the newly appointed CEO of CDB Leasing during the ISTAT conference last week in San Diego.
Peter Chang has been in the Western leasing business for decades, employed in key positions with Aviation Capital Group, ILFC and Aircastle—usually with responsibility for China.
He was named CEO of CDB in December, a move that was announced during the January Dublin conferences of Airlines Economics and Airfinance Journal. More key personnel announcements were made during ISTAT.
In an exclusive interview, LNC asked Chang about the origins of CDB, other Chinese lessors, the current policy of restricting flow of Chinese cash outside the country, the Boeing 737-10 and the Bombardier CSeries.
Here is this interview.
New Airbus-Japan venture aims for new aircraft
March 14, 2017, © Leeham Co.: A new partnership, still in the Memorandum of Cooperation stage, between France and Japan aims to expand a relationship that could lead to joint development of advanced aircraft for Airbus.
The MOC was signed between the Ministry of Economy, Trade, and Industry of Japan (METI) and the Directorate General for Civil Aviation of the Ministry of Ecology, Sustainable Development and Energy (MEDDE) of the French Republic.
“An Airbus-Japan Ad Hoc Civil Aeronautical Industry Working Group will be established, and it will meet on a regular basis to discuss technology fields that could be considered for cooperation between Airbus and Japan such as material, aircraft system and equipment, or manufacturing technologies for the development of future Airbus aircraft,” Airbus said in a March 1 press statement announcing the MOC.
Airbus sales historically trailed Boeing badly in Japan, although the current backlog leans slightly in the European OEM’s favor: 87 to 74.
If Boeing builds MAX 10, will customers come?
Subscription Required
Introduction
March 7, 2017, © Leeham Co.: If Boeing builds the 737-10, which appears increasingly likely, will customers come?
This is always the multi-billion-dollar question for any aircraft and engine manufacturer.
For Boeing, launching the 737-10 is a low-risk, and in the eyes of many, futile effort to stem the bleeding of market share between the MAX 9 and its rival, the Airbus A321neo.
- “That’s the most absurd thing I’ve ever heard. What is he, flying downhill?” Airbus’ John Leahy reacting to claims by Boeing’s Randy Tinseth that the 737-10 has more range than the A321neo.
Depending on who’s counting and how the numbers are calculated, the A321 sales outpace the MAX 9 by a factor of four or five to one. LNC calculated last year that the ratio is more likely 3:1, identical to the market share split between the predecessor airplanes, the 737-900ER and the A321ceo.
Long-haul cost differences
By Bjorn Fehrm
Subscription Required
Introduction
March 2, 2017, © Leeham Co.: The single-aisle, long-haul operations are on the increase. The new re-engined Airbus A320neo and Boeing 737 MAX generations are good for destinations of up to 3,000 nm, after taking into account reserves, winds and alternates planning. The Airbus A321LR is good for up to 3,500nm sectors.
Last week, we showed the Bombardier CS300 is joining the crop of single-aisles capable of 3,000nm city pairs, the distance between London and New York.
We also wrote the cost level of the single-aisle aircraft is competitive with the next step up dual-aisle, the Boeing 787 and Airbus A330neo.
But how do the different cost areas pan out? Is fuel cheaper or more expensive for the dual-aisle? What about the single-aisle crew costs? For clarity, we engage our cost model.
Summary
- The total costs are similar per seat mile for single and dual aisle, but the parts are not.
- The fuel costs per seat are surprisingly similar; the differences are to find in other places.
AirAsia X; the long route to profitability
By Bjorn Fehrm
March 1, 2017, ©. Leeham Co: AirAsia X, the long haul sister of Tony Fernandes’ AirAsia, finally turned a profit during 2016. The airline, which started operation in 2007, had a bumpy ride from the start.
Initial operations were when fuel prices was at the highest, and the aircraft chosen, the Airbus A330-200 and A340-300, weren’t the most economical.
After scaling back operations in 2012 and focusing the fleet on the more economical A330-300, the business gradually turned. The low fuel prices of 2015-2016 finally brought the airline profitability for the last fiscal year. Read more
Pontifications: Boeing 777 production rates
By Scott Hamilton
Feb. 27, 2017, © Leeham Co.: When Boeing announced it will reduce 777 production to 5/mo, with actual deliveries of the 777 Classic to 3.5/mo beginning in 2018, the aerospace analyst at Goldman Sachs immediately concluded Boeing will have to reduce the rate to 2-2.5/mo.
Since then, and other analysts (whether publicly or privately) reached a similar conclusion.
On the 4Q/YE2016 earnings call in January and again last week at a Barclays conference, company executives said 90% of the positions in 2018 and 2019 are sold.
Shortly after the Barclays conference ended, one analyst called me to challenge the assertion by Greg Smith, Boeing’s CFO, about 2019. By his assessment, the analyst could only get to 60% in 2019. Did I see anything differently?
59% or 74%, but not 90%
At that point, I hadn’t looked. When I did later, I got to 59% based on firm orders. I could get to 74%, giving Boeing every benefit. But I couldn’t get to 90%.
CSeries trans-Atlantic capability
By Bjorn Fehrm
Subscription Required
Introduction
February 23, 2017, © Leeham Co.: We previously described how new generation engines make the Boeing 737 MAX 8 a trans-Atlantic aircraft. The MAX 8 is smaller than the Airbus A321LR, but not the smallest single-aisle with trans-Atlantic capability. This distinction goes to the Bombardier CSeries.
We wrote about the CS100 capability to cross the Atlantic from London City Airport last year. After the article, we received new and improved data from Bombardier. The CS100 can now fly directly to US East Coast on the difficult westward leg with a business cabin of 42 seats. The updated article is here.
When we look at the improved capabilities of the CS300 (announced at Farnborough Air show last summer), this aircraft can also cross the Atlantic with a full cabin of 130 passengers.
Bombardier arranged so we could discuss this deeper with the VP CSeries program, Rob Dewar.
Summary:
- We use our aircraft performance model to compare the CS300’s suitability for long-haul to the Airbus and Boeing competition.
- The aircraft have similar range and seat mile costs. The smaller aircraft have lower trip costs.
- With Rob Dewar, we explored the potential for additional capability for the CS300.
Ryanair: cheapest and most profitable airline in Europe
By Bjorn Fehrm
February 22, 2017, ©. Leeham Co: Ryanair is Europe’s airline with the lowest fares. And it’s the most profitable, despite growing faster than even the Middle East carriers (growth needs money).
It’s time to dive deep in this locomotive. I even flew their business class before writing the report, to understand what is going on. Read more
Singapore 777-9 order pressures, but does not kill A380
Feb. 16, 2017, © Leeham Co.: Last week’s order by Singapore Airlines for 20 Boeing 777-9s and 19 Boeing 787-10s immediately was viewed by some as the death
Boeing 777-9.
knell for the Airbus A380.
The 777-9 order would start the final spiral down for the A380, some contend.
This overstates the case and misunderstands the nature of the order.
The A380 is in trouble, there no doubt about that. The 777-9 is putting pressure on the A380. There’s no doubt about this, either. But the contention the Singapore 777-9 order sends the A380 on a death spiral is wild fantasy.
An Airbus official appears today at the annual conference of the Pacific Northwest Aerospace Alliance (PNAA) in Lynnwood (WA). Undoubtedly, he will maintain the party line that the future of the A380 is solid. This, too, overstates the case. There can be a future for the airplane, but some major decisions must be made.