Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
- SPEEA, Boeing at impasse over safety program, union says April 23, 2024
- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
737 MAX to roll out to Boeing product strategy challenges
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Introduction
The Boeing 737-8 rolls out tomorrow to challenges to Boeing’s product strategy. Image via Google images.
Dec. 7, 2015, © Leeham Co: Boeing rolls out its first 737 MAX tomorrow to no press fanfare. Today there is a limited press tour of the assembly line, but, according to reporters who were invited, there will be no press briefings.
It’s an inexplicably low-key event for what Boeing otherwise touts as a major evolution of the venerable 737 line.
As good as Boeing claims the airplane will be, and as much spin as Boeing’s marketing department tries to put on the rivalry vs the Airbus A320neo, the 737 MAX clearly is second fiddle—and it’s not going to get better.
Summary
- Airbus holds a commanding market share: 60% to 40% of the family comparisons.
- Airbus holds about a 55% share of the A320neo vs 737-8 comparison.
- The A321neo outsells the 737-9 by about 4:1.
- Boeing faces cash flow challenges in 2020 decade.
Embraer sees broadening market in North America
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Introduction
Nov. 17, 2015, © Leeham Co. The chief commercial officer of Embraer sees US mainline carriers adding
John Slattery, Chief Commercial Officer, Embraer. Photo via Google images.
aircraft in the 100-plus seat sector that will open new opportunities for the largest E-Jets hitherto a limited interest in this region.
First among high profile possibilities: United Airlines, which was identified as a major prospect for Bombardier and its CS100. According to multiple news reports, UA is holding out an order for the CS100 as an inducement for some pilot contract revisions. According to Market Intelligence, the potential order is for an equal number of orders and options, well below 50 orders but one which would be a crucial win for struggling Bombardier.
But Embraer isn’t going to let this order go without a stiff fight. Through United Express partners, EMB has a large installed base of E-175s operating for United. This is viewed as a major advantage by EMB’s CCO, John Slattery.
Summary
- United, JetBlue, Air Canada targets for CSeries sales.
- Embraer has large, installed fleet of E-Jets at these airlines.
- Broadened market potential seen with North American carriers for 100-plus seat airplanes.
A321s in Airbus Mobile FAL
Sept, 13, 2015, (c) Leeham Co., Mobile (AL): The first two A321ceos are on the Final Assembly Line (FAL)
at the new Airbus plant here in Mobile (AL).
JetBlue is scheduled to take the first delivery in the second quarter next year, followed by an A321ceo for American Airlines by the end of next year.
The slow pace reflects the need to certify every step of the assembly process, which begins nest week with an audit by Europe’s EASA, through the learning curve necessary for a new facility and training the hundreds of employees initially hired.
By the end of next year, Airbus plans to be assembling A320ceos at the rate of four per month, the initial target for this first manufacturing facility on US soil. The plant has the capacity to produce eight a month.
Pontifications: Make a Wish, AA responds
By Scott Hamilton
July 13, 2015: I’m traveling. Pontifications this week and next will be “grabs” from YouTube.
The first is a short video of a young boy with a heart condition who wishes to be a pilot for American Airlines, which is part of the Make a Wish foundation. When AA was informed, see what happened next.
Next, a short video about the Lockheed Constitution, a double-decker piston airplane designed during World War II. The military was the driver of the project but Pan American World Airways was also interested. Only two Constitutions were built.
Pontifications: Passenger experience and the WOW factor
By Scott Hamilton
June 29, 2015, © Leeham Co. Back on June 1, I wrote in this column I had yet to experience traveling on the Airbus A380, which entered service in 2007. The A380 doesn’t serve Seattle, where I live, and I really didn’t have a desire to add hours and a connection to my travels just to fly the A380 if I could go non-stop. Note that this is precisely the argument advanced by Boeing, but this is a coincidence. I have yet to fly on the Boeing 787, either, and it does fly into Seattle from Asia.
A reader Tweeted to me his incredulity that in all these years I hadn’t flown the A380. I replied, All in good time. I knew when I wrote that I would be returning from the Paris Air Show on an A380 via Los Angeles. The time had come for me to experience the airplane. (Interestingly, Dominic Gates of The Seattle Times, unbeknownst to either of us, wrote he’s doing the same thing via New York on Air France. I would be flying Air France. Friends warned me that the passenger experience on Air France, however, was hardly what the A380 is all about.
They weren’t kidding.
I had been on the test A380 during static displays before, but never in a passenger-configured model. At the PAS, Qatar Airways had its own little air show, displaying more airliners than any OEM: the A319, A320, A350 and A380 plus the 787. The A350 and A380 were open to the press. As with anyone in the industry, I had long-heard of how the Middle Eastern airlines went over the top on outfitting their cabins, but I wasn’t remotely prepared for the Qatar A380. Walking on board, into the first class section, was a jaw-dropping “wow” moment.
Embraer gains 125 orders at half-year
John Slattery, chief commercial officer, Embraer Commercial Aircraft. Photo via Google images.
June 17, 2015, Paris Air Show, c. Leeham Co. With focus, as always, on Airbus and Boeing, and an airplane that neither exists nor is about to any time in the near-term (the Middle of the Market aircraft), little attention was paid to Embraer, currently the third of the Big Four commercial aircraft companies.
Embraer finished the Air Show (which essentially ends June 18 for the industrial sector), with 50 orders for the E1 and E2 E-Jets.
John Slattery, the chief commercial officer, said the company is ending the first half of the year with 125 
firm orders for the two platforms. EMB now has 70 customers, headed for its target of 100 by 2017, and an important new customer joined the ranks, albeit through a used airplane transaction. Delta Air Lines will purchase 20 E-190s once a new pilot contract is ratified. The airplanes will be flown by Delta pilots for the mainline carrier, not one of its regional partners.
Pontifications: National policy, national security
By Scott Hamilton
June 15, 2015, c. Leeham Co. The battle between the the Big Three US carriers, American Airlines, Delta Air Lines and United Airlines, vs the Big Three Middle Eastern carriers, Emirates Airline, Etihad Airways and Qatar Airways, was a big over-hang at the 71st International Air Transportation Assn. Annual General Assembly last week.
The US3 charge that the ME3 have received around $42bn in subsidies and claim continued government support put them at a disadvantage. Loads of information has been reported, with claims and counter-claims going back and forth. But the IATA conference attendees, including members of the media, were looking for sparks to fly between Doug Parker, CEO of American Airlines, who was on a couple of panels and who was voted president of IATA for the next year, Tim Clark, president of Emirates and Akbar Al-Baker, CEO of Qatar.
IATA: Lufthansa welcomes US carriers to Mid-East dispute
Carsten Spohr, CEO of Lufthansa Group
June 7, 2015: The chief executive officer of Lutfhansa Airlines said he welcomes the Big Three US airliners to the dispute over whether the Big Three Middle Eastern carriers are unfairly competing against legacy airlines.
Carsten Spohr, CEO of Lufthansa Group, told a press conference on the opening day of the IATA Annual General Meeting that LH has long been complaining about Emirates Airline, Qatar Airways and Etihad Airways and their aggressive expansion, first in Europe and now the US.
American Airlines, Delta Air Lines and United Airlines are challenging open skies and subsidies to the ME3.
Pontifications: Fare and market share wars
By Scott Hamilton
May 25, 2015, c. Leeham Co. Airline stocks took a dive last week when it appeared fare wars and eroding capacity discipline is beginning among US carriers.
Southwest Airlines said it will be adding capacity at the rate of 6%-7% compared with recent increases of 2%-3% and American Airlines said it will begin matching the prices of Low Cost and Ultra Low Cost Carriers rather than see its market share erode.
And the markets went into a tizzy.
I’m old enough to remember when American aggressively matched the low fares of the emerging new entrant airlines after deregulation in the 1980s. The matching spread and the 1980s became a bloodbath. Read more