Airlines Archives - Page 46 of 66 - Leeham News and Analysis

Bombardier’s Delta deal looking good, but don’t celebrate yet

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Introduction

Air Baltic will be the first operator of the Bombardier CS300. Source: Bombardier.

April 18, 2016, © Leeham Co.: Bombardier, if it didn’t dominate the news cycle in commercial aviation last week, must have come close. Consider:

The Wall Street Journal, and then Bloomberg, reported that BBD was near to winning a big order for 75+50 from Delta Air Lines for its C Series.
Reuters reported that BBD rejected demands from the Canadian federal government in Ottawa as conditions for investing US$1bn in the company. (Officials tried to walk this back some, saying talks continue.)
The head of corporate strategy for BBD came forward to forcefully argue for the investment as good for taxpayers, breaking what largely has been a cone of silence over the perceived merits of a deal
The US$1bn the Quebec provincial government agreed to invest last year remains unfunded.
BBD stock, which last year dropped to less than C$1, threatening the listings on the Canadian exchanges, jumped to C$1.75 at one point in anticipation of a Delta order.

While on balance, it seems likely Delta will order the C Series, Bombardier has been down this road before. Only a few months ago, the market and others were excited over the prospect that BBD was close to landing an order from United Airlines, only to see Boeing swoop in and grab the deal.

Summary

This is the second try at a major contract with Delta Air Lines.
The primary competition is against Embraer, not Airbus or Boeing.
We revisit our Skyline Risk Assessment, dormant for the extended period in which BBD had no sales of the C Series.

Inflight Internet

By Bjorn Fehrm

06 April 2016, ©. Leeham Co., Hamburg, Germany: On the second day of the Aircraft Interior eXpo, AIX 2016, we checked out the In-flight Internet situation. What interested us was why is there such lousy Internet performance on many airlines today and what will be done about it over the next few years. We got a good picture on why things are as they are and how this will change within quite a short time.

Rather than go through what a lot of vendors will do, we will try to describe the root problems involved and what is done by the industry to change that. We will also mention some of the key players that are attacking the subject.

But let’s start with the problem. Figure 1 shows where the world’s main airline routes are right now.

Figure 1. World air traffic taken from FlightRadar24 at 23.00 CET on 05.04.2016. Source: FR24. Click to see better.

As can be seen, the world air traffic is not very evenly distributed. One third of the world has intense traffic and two-thirds not so much or none at all. Read more

15 Comments

Posted on April 7, 2016 by Bjorn Fehrm

Airbus, Airlines, Boeing

GEE, GoGo, IFE, In-flight Internet, Inmarsat, Panasonic, Runway Girl Network, Thales, ViaSat

Alaska, Virgin confirm merger

April 4, 2016, (c) Leeham Co.: Alaska Air Group and Virgin America confirmed weekend reports that they reached a deal to merge.

The replay of the Alaska webcast/conference call, with slide show, is here.

Rationale includes what LNC outlined in our March 29 post: growth, access to more gates and slots. Alaska officials said Virgin’s presences in California, combined with Alaska, will give Alaska to #1 market share position on the US West Coast, passing Southwest Airlines’ 21% by one percent.

Here are some highlights from the conference call:

29 Comments

Posted on April 4, 2016 by Scott Hamilton

Airbus, Airlines, Alaska Airlines, Boeing

737, A320, Airbus, Alaska Air Group, Alaska Airlines, Boeing, Virgin America

Virgin America does have some attractive attributes

March 29, 2016, © Leeham Co.: A report that JetBlue and Alaska Airlines submitted bids to buy Virgin America spurs the thought: this isn’t as wacky as it appears on

Virgin America route map. Click on image to enlarge.

the surface.

When news emerged last week that VA was shopping itself after interest was expressed, many thought, quite naturally, why?

Dan Reed neatly summarizes this argument in his column at Forbes.

Virgin America has few tangible assets. It leases all but about seven of its 10 Airbus A319s and 50 A320s. It’s not dominant in any city or route it serves. The leases are probably, on a relative basis, rather costly.

It has few slots at the few slot-controlled airports it serves (Chicago O’Hare, New York La Guardia and JFK airports and Washington Reagan National Airport), and only a few gates at any given airport—hardly enough to really boost presence of either Alaska or JetBlue.

Why should either airline want Virgin America?

Here’s why.

29 Comments

Posted on March 29, 2016 by Scott Hamilton

Airlines, Alaska Airlines, American Airlines, CFM, Delta Air Lines, Pratt & Whitney, United Airlines

airlines, Alaska Airlines, American Airlines, CFM, Delta Air Lines, GTF, JetBlue, LEAP, Pratt & Whitney, Southwest Airlines, United Airlines, Virgin America

Sales slowing for larger, Airbus, Boeing twin-aisle jets

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Introduction

Boeing 777. Photo via Google images.

March 28, 2016, © Leeham Co.: A downturn in the order cycle, low fuel prices and backlogs extending to 2020 and beyond combine to reduce the likelihood of much in the way of wide-body orders this year, say commercial aviation officials.

A preference for smaller twin-aisle jets could also hurt sales of larger twin-aisle airplanes, according to observers.

These factors spell challenges for Airbus and Boeing for the A350-1000, the 777-300ER and the 777X.

Summary

“Nobody’s talking about the A350-1000 or the 777X,” says the president of a leading lessor.
Preference indicated for the smaller Boeing 787-9 over the larger 777-300ER for new routes.
Low fuel prices reduce the need for new technology jets.

2 Comments

Posted on March 28, 2016 by Scott Hamilton

Airbus, Airlines, Boeing, Emirates Airlines, Premium

777-200ER, 777-300ER, 777-8, 777-9, 777F, 777X, 787-10, 787-9, A330ceo, A330neo, A380, Airbus, All Nippon Airways, Boeing, Emirates Airlines, Etihad Airlines, Qatar Airways

MOMentum appears to be slowing for new Boeing airplane

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Introduction

Model design and paint by Camil Valiquette. Photo via Google.

March 10, 2016, © Leeham Co.: MOMentum for the Middle of the Market aircraft seems to be slowing from last year, as potential buyers and Boeing struggle to define an aircraft that would be affordable to build, affordable to buy and fulfill different mission requirements for capacity or range.

Meantime, Airbus is content to watch Boeing’s predicament, secure in what it believes is the winning strategy.

Summary

Attendees at the ISTAT conference last week had no consensus about what the airplane should be, when or even if Boeing should launch the airplane.
Some customers want range, others want capacity.
“757 replacement?” Not really.

Boeing says Airbus widebody strategy “is a mess,” A330neo “dead on arrival”

A330-800neo. Airbus rendering.

March 9, 2016, © Leeham Co.: The war of words between Airbus and Boeing at the ISTAT conference Feb. 29-March 1 wasn’t confined to which company sold more single-aisle airplanes. Widebody aircraft were involved, too.

A Boeing official on the sidelines of the conference called the Airbus A330neo “dead on arrival.” He says that by the time the 330neo enters service, there will be 1,000 787s and A350s in service and delivery slots will be closer in than they are today.

The airplane is nothing more than a resurrection of the original A350 concept that failed in the marketplace, this official said.

Rather than ask Airbus for what would be a predictable response, LNC asked lessor CIT Aerospace for its assessment. To be sure, CIT is not without vested interest: it was a launch customer for the A330neo and it’s a large customer for the A330ceo. Still, it provides a third-party assessment.

156 Comments

Posted on March 9, 2016 by Scott Hamilton

Airbus, Airlines, Boeing, ISTAT

777, 777-300ER, 777-9, 777X, 787, A330ceo, A330neo, A350, A350-1000 XL, A350-1100, A350-8000, Air Lease Corp., Airbus, Boeing, CIT Aerospace, ISTAT, Jeff Knittel, John Plueger, Steve Mason

Final flight for first Boeing 727

The first Boeing 727-100, sold to United Airlines (N7001U) made its first flight in 25 years March 2, 2016, from Paine Field in Everett (WA) to Boeing Field in Seattle. The 12 minute flight was also the airplane’s last. The aircraft, which flew for United for 27 years and carried three million passengers, will be permanently displayed at the Museum of Flight. This is painted in the original delivery colors for United. Note that then there were no outlines of the doors and emergency exits; this FAA requirement came years later.

20 Comments

Posted on March 2, 2016 by Scott Hamilton

Airlines, Boeing, United Airlines

727, Boeing, Boeing Field, first 727, Museum of Flight, N7001U, Paine Field, United Airlines

ISTAT Day 2: MOM business case remains a challenge

March 1, 2016, (c) Leeham Co.: The manufacturers and their customers remain unclear about the need and design of the so-called Middle of the Market aircraft, their representatives said at the ISTAT AGM today in Phoenix. The business case has yet to be proved.

Participants in the Middle of the Market Panel are:

Ron Baur, VP Fleet, United Airlines

Robert Lange, SVP Market and Product Strategy, Airbus

Randy Tinseth, VP-Marketing, Boeing

Bert van Leeuwen, Managing Director, DVB Bank

We’re at the 2016 ISTAT AGM in Phoenix and will be reporting on presentations and news from the sidelines.

Van Leeuwen, the banker, said financiers would need to see at least 1,000 MOMs in the market with a broad customer base to feel comfortable financing the airplanes.

57 Comments

Posted on March 1, 2016 by Scott Hamilton

Airbus, Airlines, Boeing, ISTAT, Middle of the Market, MOM, United Airlines

757, 757-300, 757W, Airbus, Bert van Leeuen, Boeing, DVB Bank, ISTAT, Middle of the Market aircraft, MOM, Randy Tinseth, Robert Lange, Ron Baur, United Airlines

ISTAT Day 1: There is uncertainty

Feb. 29, 2016 (c) Leeham Co.: “The world is changing very dramatically,” says Adam Pilarski, the economist for the consulting firm Avitas.

We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.

Adam Pilarski of Avitas always looks like a sad basset hound but is one of the most entertaining speakers at the ISTAT AGM.

“It is changing in a way Hollywood couldn’t imagine,” he said. There is uncertainty.

Pilarski, who peppers his speeches to ISTAT with irreverent humor, pointed to Trump, Carson, Cruz and Sanders as changing the rules of the game.

11 Comments

Posted on February 29, 2016 by Scott Hamilton

Airlines, ISTAT

Adam Pilarski, airlines, ISTAT, oil prices

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Leeham News and Analysis

There's more to real news than a news release.

Leeham News and Analysis

Bombardier’s Delta deal looking good, but don’t celebrate yet

Inflight Internet

Alaska, Virgin confirm merger

Virgin America does have some attractive attributes

Sales slowing for larger, Airbus, Boeing twin-aisle jets

MOMentum appears to be slowing for new Boeing airplane

Boeing says Airbus widebody strategy “is a mess,” A330neo “dead on arrival”

Final flight for first Boeing 727

ISTAT Day 2: MOM business case remains a challenge

ISTAT Day 1: There is uncertainty

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