A330neo sales off to slow start: Air Lease Corp

May 16, 2018, © Leeham News: There is “intense” price competition between Airbus and Boeing on the A330neo and 787, says an industry leader.

Sales of the A330neo are “off to a slow start,” says Steven Udvar-Hazy, executive chairman of Air Lease Corp. Hazy expressed confidence in the neo, which ALC has ordered, seeing it as a “natural replacement” for the aging A330ceo, the Airbus A340 and the Boeing 767.

Hazy made his remarks at the 38th annual Airfinance Journal conference yesterday in Miami.

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Bombardier refocuses the CRJ

By Bjorn Fehrm

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Introduction

May 10, 2018, © Leeham News: American Airlines last week ordered 30 additional regional jets.  Of these, 15 were the Embraer E175. No surprise there. It’s the traveler’s favourite and the market leader among US regional jets. But American Airlines also ordered the same number of Bombardier CRJ900. Why? Isn’t it a bit dated?

There are good reasons for this order and Bombardier sees a new spring for the trusted regional. We use our performance model to understand why.

Summary:
  • The CRJ900 is still a good choice for the US Scope Clause regulated regional jet market.
  • Is strong economics makes it a favourite with the airline’s bean counters.
  • In addition, it has the longest cabin, enabling large First-class and Premium economy sections.
  • With programmed updates, it will be competitive for years to come.

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Pontifications: Uncontained engine failures are rare but not unknown

By Scott Hamilton

April 23, 2018, © Leeham News: Last week’s engine malfunction on a Southwest Airlines Boeing 737-700 was another in a rare, but not unknown, uncontained engine anomaly in recent years.

All recent similar failures didn’t cause a loss of life or serious injuries if the passengers were evacuated. Unfortunately, this accident caused one fatality and seven injuries.

Let’s put the context to this issue.

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Déjà vu all over again

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Introduction

April 16, 2018, © Leeham News: There’s high turnover in the executive ranks. Major delivery delays cause disruption and unhappy customers. Airlines are cancelling and switching orders. Product strategy is challenged. Your competitor is taking advantage and making significant inroads.

If this sounds familiar, it is.

It’s déjà vu all over again.

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Pontifications: Shooting yourself in your feet

By Scott Hamilton

April 16, 2018, © Leeham News: Airbus’ new top sales chief, Eric Schulz, was candid about losing American and Hawaiian airlines wide-body orders, according to a report from Flightglobal from the Airbus annual meeting.

In reference to Hawaiian’s switch of an A330-800 order to the 787-9, he admits: “Maybe we did not see the danger coming…we may have made the conclusion a bit too early that the best solution was to stick with us – which I think it was,” Flightglobal wrote.

American’s loss, Schulz told Flightglobal, was for a different reason: American was “already very heavily engaged” with the 787, adding: “I knew exactly where our competitors had to go in terms of pricing. I’m certain American did a good deal.”

I thought American and Hawaiian were predictable outcomes. But Airbus’ problem went beyond not seeing the “danger.”

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American A330neo loss casts shadow over sales prospects

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Introduction

April 9, 2018, © Leeham News: Even as Airbus touted the new 251t A330-800 and optimism that aging A330-200s will kick start a replacement cycle in 2020-21, the

Airbus A330neo. Photo via Google images.

concurrent loss of a campaign to sell the model to American Airlines casts a shadow over the model and the entire program.

Airbus had just come off the cancellation of the only A330-800 order, by Hawaiian Airlines, which flipped to the Boeing 787-9. As the sole customer for six A330-800s, the cancellation was expected.

Airbus hoped that an American order, for 20 -800s, would prove to be the endorsement of the program that was needed to spur worldwide sales.

Boeing was just as adamant that, like Hawaiian, American order the 787. In this case, Boeing had the leg up: the 787 was already in AA’s fleet (37 of 42 previous orders were already delivered). American wanted to simplify its fleet, not add another type. And airline officials were skeptical of the -800 for the very reason Airbus was so in need of AA’s order.

Summary

  • American’s order would have been the boost needed for the A330neo program.
  • It would have been an endorsement of the A330-800.
  • The 251t, 8,150nm version of the -800 makes a good, niche long-haul airplane.

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Pontifications: An old pro thinks long-haul LCC model is about who loses the most money

By Scott Hamilton

March 26, 2018, © Leeham News: Long-haul, low-cost carriers are likely here to stay but the impact will be limited.

This is the conclusion of Robert L. Crandall, former CEO of American Airlines, who faced the USA’s first ultra-low-cost carrier and won.

Crandall, 82, retired from American in 1998, He faced the emerging low-cost carriers in the US, all based in large part on the Southwest Airlines

Robert Crandall. Photo via Google images.

business model.

Despite painful skirmishes and in some cases, all-out wars, Crandall navigated American through the turbulent skies, making American the largest US airline and seeing nearly all of the upstarts cease operations.

PeoplExpress was the USA’s first ultra-low-cost carrier. Founded in 1981, over-expansion and aggressive response by the US majors—led in large part by Crandall’s strategy—PE collapsed in 1987. It merged into Continental Airlines, bankrupt in all but name.

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In new blow, Boeing defeats Airbus at American, sources say; AA says ‘no decision yet’

Boeing 787. Photo via Google images.

March 23, 2018, © Leeham News: In a new, albeit not unexpected, blow to Airbus, Boeing won a hotly contest competition at American Airlines between the A330neo and the 787, two sources say.

Bloomberg News reported Airbus lost the deal, earlier today.

LNC confirmed the decision with two sources. But Derek Kerr, EVP and CFO of American, told LNC no decision has been made, but an announcement could be coming by the first quarter earnings call if not before.

The competition originated with American’s long-publicized ambivalence over the legacy Airbus A350-900 order placed by US Airways long before the latter acquired American, a 787 customer of long-standing. With this deal, American will cancel the A350 order for 22 airplanes.

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Boeing displaces Airbus at Hawaiian, wins 787-9 deal; airline cancels A330-800 order

Feb. 20, 2018, © Leeham Co.: Boeing has displaced Airbus at Hawaiian Airlines, winning an order for 787-9s. Hawaiian canceled an order for six A330-800s, the only order on the books for this sub-type.

An announcement could come as early as this week.

The campaign has been underway for months and the outcome was expected. Airbus offered to cut the price on the -800 and also offered the A350-900. The latter always was considered too big by carrier executives.

Boeing’s effort to displace Airbus A330neo at Hawaiian is part of an all-out, hand-to-hand combat campaign by Boeing to kill the A330neo program in advance of the potential launch of the Boeing 797.

LNC detailed the battle here.

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Airbus, Boeing square off with A330neo, 787 in advance of NMA launch

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Introduction

Feb. 8, 2018, Leeham Co.: Boeing hasn’t launched the New Midrange Aircraft (NMA, aka 797) and may not until next year.

But the maneuvering to capture, solidify or preempt moves is already well underway by Airbus and Boeing.

Reuters synopsized this during its reporting at this week’s Singapore Air Show.

This is only the tip of the iceberg.

Summary
  • Boeing 787 production rate increase to 14/mo next year is, in part, a head-‘em-off-at-the-pass maneuver to prevent customers from buying the Airbus A330neo.
  • The 787-8 could see a new lease on life as interim airplane.
  • A330-800 has steep uphill slog.
  • Airbus, Boeing face off 787, A330neo.

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