Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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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.
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.
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.
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.
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.
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.
In strategy shift, Boeing backs 7 MAX: sources
Feb. 22, 2016, (c) Leeham Co. In a shift in strategy, Boeing is now fully backing development of the 737-7 MAX instead of urging the only two customers that have ordered the airplane to up-gauge to the MAX 8, sources tell LNC.
Southwest Airlines and WestJet are the only two operating airlines for the 7 MAX. There is a third customer, a start-up in Canada that has yet to begin operations.
Sources have told LNC for months that Boeing really didn’t really want to build the 7 MAX, for which there are only 55 orders. But Southwest needs the airplane for short-runway airports like Chicago Midway and Burbank (CA) and has resisted suggestions to up-gauge, LNC is told.
All this changed when it looked like Bombardier might make a sale of its all-new CS100 to United Airlines, LNC is told.