Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Interview with John Leahy: A380 sales strategy going forward
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Now open to all readers (Fe. 15, 2015)
By Bjorn Fehrm
Introduction
Jan 14 2015: In our deep analysis of the Airbus A380, we concluded that there is nothing wrong with the basic economics of the giant airplane. In fact, with today’s fuel prices, the aircraft’s Direct Operating Costs (DOC) are 20% below
its alternatives in the market. Yet the aircraft is experiencing its worst sales drought since its launch, despite adding a leasing alternative during 2014 and efforts by Airbus.
To understand why and what Airbus plans to do about it we arranged for an exclusive interview with Airbus Chief Operating Officer-Customers, John Leahy, at the sidelines of Airbus annual press conference.
Summary
- Our assessment of A380’s cost of operation
- Operating airlines experience with the A380
- Airbus sales strategy to date and changes going forward
A380neo decision likely this year, triggering the next widebody engine project
Subscription required
By Bjorn Fehrm
Introduction
Jan. 12, 2015: One of the subjects which is sure to come up on Airbus annual press conference on Tuesday the 13th in Toulouse will be when and how Airbus will re-engine the A380.
Airbus Commercial CEO Fabrice Bregier vowed during the Airbus Group Global Investors Day last month that an A380neo is coming.
There is much speculation around this subject as the business case of re-engineering an aircraft that is selling at such low numbers is difficult to get to close. The business case is difficult to make work for Airbus (such a project will cost in the order of $2 billion) but it will be equally hard for the engine manufacturers to offer engines that have enough efficiency gain to make the overall project feasible from an efficiency improvement perspective.
Summary
- A380 Classic equals Boeing 777-300ER seat fuel costs.
- Boeing 777-9 beats A380 on CASM, an A380neo regains the advantage.
- Engine makers face hard choices to retain dominance or to broaden market penetration.
AirAsia 8501: two weeks later, still looking for the voice recorder
Jan. 11, 2015: It’s now been two weeks and two days (local time) since AirAsia Flight 8501 crashed into the Java Sea. It took nearly two weeks just to locate the tail section of the airplane, which was raised. The flight data recorder was recovered Jan. 12 local time but the cockpit voice recorder is still missing.
Greg Feith, a former crash investigator for the US National Transportation Safety Board, wrote Sunday on his Facebook page, “ADS-B data was used to narrow the search area for the main wreckage. Info from both black boxes will finally provide a factual foundation that the airplane likely ended up in a high speed descent, probably a spiral descent, and impacted the water in an out-of-control situation and not an attempted emergency landing. With the main wreckage scattered, the airplane likely broke-up and skipped across the surface. We should know soon as the info is developed and provided by the NTSC.”
AirAsia update, Dec. 30: Key questions in the investigation
Dec. 30, 2014: With the apparent discovery of the main wreckage of AirAsia Flt 8501 in about 100 ft of water, recovery of the airplane and its black boxes should be a relatively straight-forward operation.
Our previous posts have outlined general areas of inquiry. With this post, we drill down into some of the flight and airplane questions that will be part of the inquiry. We talked with an Airbus A320 captain for a major US airline in forming these issues. This captain has been flying for US carriers for 30 years and is rated on Boeing 737s, the McDonnell Douglas DC-10 and the A320.
Key points:
AirAsia update: debris from flight confirmed; airline was implementing real-time tracking
Dec. 30, 2014: Debris and bodies have been found and confirmed coming from AirAsia Flight QZ8501, bringing closure for the families and friends of the flight that disappeared on Sunday local time.
Reports of shadows that could be a wing or fuselage in water about 30 meters deep have also been seen.
Some debris and bodies have already been recovered.
If the main body of the wreckage has also been spotted, recovery of the all-important flight data and cockpit voice recorders could come rather quickly.
Odds and Ends: Why radar tracking is insufficient; 787 and batteries; 777 Classic sales
Radar tracking: This story from the Financial Post in Canada explains why radar tracking of airliners is insufficient and a better way is necessary. This also explains why better, more accurate coverage can save the airline industry gobs of money.
Gosh–instead of making a safety argument and lives saved, maybe focusing on money saved will spur some action….
787 and batteries: Aspire Aviation takes a deep look at the 787 battery report from Japan’s investigative agency
777 Classic Sales: Boeing ends 2014 with around 60 orders for the 777 Classic, at the top end of the 40-60 annual sales officials say is needed to maintain production rates at the current level of 100/yr. Dan Catchpole of The Everett Herald has an interview with Randy Tinseth, VP-Marketing of Boeing, who discusses the prospects of maintaining this pace until 2020, when the successor 777X enters service.
Regulators dither on real-time tracking as another airplane goes missing
Air France 447.
Malaysia Airlines MH370.
AirAsia QZ8501.
Dec. 28, 2014: Each flight disappeared over water. Search parties had a general idea where to look for AF447, but it still took five days before wreckage was spotted in the water and two years before the flight recorder and cockpit voice recorder were recovered.
Searchers think they know generally–very generally–where to look for MH370, but no wreckage at all has been spotted.
And now there’s AirAsia QZ8501. Searchers have a general idea where to look, but not precisely.
Aviation regulators are infamous for their “tombstone” mentality–not requiring safety changes until people die.
How many people have to die before regulators finally mandate real-time flight tracking?
ICAO, the international organization that overseas safety and regulatory issues, has been dithering since MH370 about mandating real-time flight tracking. But the issue has been around since the 2009 Air France crash. There has been no action.
AirAsia demonstrates that real-time tracking is not just trans-ocean flights that need tracking. MH370 also showed this–the flight was a relatively short, intra-Asia flight with an even shorter over-water portion when contact was lost.
It’s time for ICAO to make a decision, and if it doesn’t then individual country regulators need to step up and require real-time tracking. This won’t save the lives lost but recovering wreckage and the black boxes in a timely manner could lead to safety and operational changes that will save lives in the future.
We don’t need more tombstones.
AirAsia A320 disappears en route in bad weather, but weather won’t be only area of investigative focus
Dec. 28, 2014: Weather will be a prime area of focus by investigators of the disappearance of AirAsia flight QZ8501. The flight, an Airbus A320-200 manufactured in 2008 and powered by CFM 56 engines, deviated from its intended flight path due to weather conditions, according to reports from officials in Indonesia.
It’s presumed the airplane’s disappearance is an accident.
With these reports, investigators will put weather conditions at the top of their list of areas to probe. They will attempt to determine whether there was a high altitude upset due to turbulence that caused the plane to lose control; whether the plane was intact when it presumably crashed into the sea or whether it came apart in flight, and if so whether this possibility was caused by stresses beyond design limits. Investigators will attempt to determine whether the plane was struck by lightning, causing a chain of events leading to a crash.
Air France-KLM defers 2015/16 777s, cites poor financial results, low fuel prices
Dec. 18, 2014: Air France-KLM said today that it will defer delivery of 10 Boeing 777-300ERs scheduled for delivery in 2015/16 due to lower than expected financial results and because the current fuel price environment makes taking the airplanes less compelling.
This is the first high-profile deferral that we know of citing the thesis we’ve been talking about: that the current fuel price environmental threatens the Classic wide-body airplanes (as opposed to the next generation of re-engined, new technology aircraft).
Bloomberg News has this report. The key passage:
The carrier had earlier planned to take about 10 Boeing 777s in 2015 and 2016 and will now look to postpone those deliveries, the CFO said. One reason the airline can afford not to take the new planes is that the lower oil price reduces any gains from having more fuel-efficient aircraft.