Hydrogen, electric and hybrid alternatives not here yet

By Scott Hamilton

Sept. 25, 2020, © Leeham News: Commercial aviation has had 70 years to use jet fuel safely. It’s unclear how long it will take to reach the same level of safety with hydrogen, say Boeing.

In a briefing Tuesday, the day after Airbus revealed its hydrogen powered concepts for three potential airliners, the vice president and general manager of product development expressed caution about hydrogen as a fuel source.

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Sunset of the Quads, Part 8. The A380, 747-8i and 777-9 compared.

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By Bjorn Fehrm

Introduction  

September 24, 2020, © Leeham News: Airbus was disturbed for decades by Boeing’s rein of the Very Large Aircraft (VLA) airliner segment with the 747. It was determined Boeing used this dominance to outmaneuver Airbus in different situations.

Airbus needed an aircraft in this market segment, bigger and better than Boeing’s. The result was the A380, the world’s largest passenger aircraft. We know how this developed today, where the COVID pandemic finally killed the segment for Very Large Aircraft. But how good was it, and where were the weaknesses?

We compare the A380, 747-8i, and Boeing’s up and coming 777-9 to find out.

Summary
  • The A380 outclassed the Boeing 747-400 efficiency-wise, as it was a 30 years younger design.
  • The updated 747, the 747-8i narrowed the gap to the A380, but if both could be filled the A380 stayed ahead.
  • The 777-9 is 15 years younger in design than the A380, and it shows. It is significantly more economical in operation than the A380.
  • Throughout its career, the A380 had a graver problem than its efficiency. It was simply too big for a market that went for frequency instead of large departures.

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HOTR: Somewhat stabilizing twin-aisle lease rates

By the Leeham News Staff

Sept. 22, 2020, © Leeham News: Ishka, the UK-based appraisal and consultancy firm, Thursday published its update of values and rents for 5-year old, twin-aisle aircraft. After a significant reduction since the beginning of the year, lease rates seem to be stabilizing.

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A lost decade for aircraft manufacturers, suppliers

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By Judson Rollins, Bjorn Fehrm & Scott Hamilton

Sept. 21, 2020, © Leeham News: Commercial aviation is facing a lost decade due to COVID.

Yes, most forecasts target 2024-2025 as returning to 2019 passenger traffic and aircraft production levels.

However, LNA in July published its own analysis indicating full recovery may not occur until 2028. Breathless headlines notwithstanding, it will take years for vaccines to be widely available and considered safe by enough of the world’s population. Growing concern about vaccine production and distribution capacity through 2024 underscores this view. Even Southwest Airlines CEO Gary Kelly said earlier this month that business travel might not fully return for a decade.

Indeed, the 2020s may well be a lost decade for aircraft manufacturers and their supply chains.

Summary

  • Debt-laden airlines will have little money to order new airplanes
  • Interest in re-engined 787, A350 likely nil this decade
  • Airbus, Boeing, Embraer have little interest in launching new programs
  • Engine makers too financially stretched to develop new designs
  • Engineering talent, knowledge will be decimated by inevitable job reductions
  • OEMs must “play the long game” at short-term cost to safeguard their futures

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Sunset of the Quads, Part 7, The A380

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By Vincent Valery

Introduction  

All Nippon Airways’ Flying Honu A380 livery

Sep. 17th, 2020, © Leeham News: Last week, we compared the economics of the A340-600 and the 777-300ER on the Los Angeles to Shanghai route. We now turn our attention to the last major bet on a quad-engine aircraft, Airbus’ Superjumbo A380.

Summary
  • An extended market study to go after the Queen of the Skies;
  • Supersized launch and development;
  • A program on life support for several years;
  • What went wrong;
  • Analyzing two-stage Boeing response on a trunk route.

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HOTR: Adjusting Airbus and Boeing orderbooks

By the Leeham News Staff

Sept. 15, 2020, © Leeham News: Boeing has removed hundreds of 737 MAX orders from its order book. While some were direct cancellations from customers, most came through ASC 606 adjustments.

Airbus does not publish such order adjustments by aircraft program in its monthly order and deliveries report. The European OEM publishes a total outstanding amount of contracts for commercial aircraft in its annual reports. However, the figure does not have a breakdown by program.

As a result, Airbus and Boeing order books aren’t an apple to apple comparison. The COVID-induced traffic slump has had a significant impact on airlines’ financial situation. Therefore, adjusting order books is necessary to assess an aircraft program’s backlog situation.

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Pontifications: Boeing SC makes its case for 787 production consolidation—and it favors Everett

By Scott Hamilton

Sept. 14, 2020, © Leeham News:  Boeing’s South Carolina 787 final assembly plant has made its case whether to consolidate production in one location, or not.

The conclusion favors retaining dual assembly lines, retaining one in Everett.

This click-bait lead doesn’t mean Boeing SC management favors retaining dual assembly lines. Far from it.

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Sunset of the Quads, Part 6. The A340-600 versus the 777-300ER.

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By Bjorn Fehrm

Introduction  

September 10, 2020, © Leeham News: The Airbus A340-600 was designed to challenge Boeing’s hold of the large, long-haul jets. With a capacity 60 seats above the previous largest Airbus jet, the A340-300, and a 7,500nm range, it should put Airbus firmly on the long-haul map.

The A340-600 would be flying its 350 passengers as long and for a lower cost than the 20 seats larger Boeing 747-400, the then-largest long-haul Boeing jet. It would have worked hadn’t Boeing upgraded the 777-300 to the 777-300ER and surpassed the spec. How much better did that make the 777-300ER when it arrived in 2004?

Summary
  • The A340-600 could take almost as many passengers as the Boeing 747-400 and fly these to the same distance.
  • In addition, it loaded more LD3 cargo containers and burned only three-quarters of the fuel of a 747-400.
  • But the advantage of the A340-600 was shortlived. Only two years later Boeing responded with the 777-300ER which bettered the Airbus on almost all accounts.

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HOTR: Boeing bear case: $73bn revenue drop 2020-2025

By the Leeham News Staff

Sept. 9, 2020, © Leeham News: Morgan Stanley has a new aerospace analyst, Kristine Liwag, who initiated coverage on a half dozen companies over two days last week.

Among them, of course, was Boeing.

One of the conclusions in one of her notes:

“Assuming that some orders for growth and those ordered by lessors are cancelled in the 2020-2025 timeframe, we estimate that there is $73bn downside risk to Boeing’s revenue from 2020-2025. We note that our Bull case scenario assumes that the entire current order book converts to revenue.”

Liwag and her team also write, “there is an underappreciated risk that Boeing is particularly vulnerable to cancellations as the 737 MAX grounding (March 2019) opened up cancellation rights (without penalty) for aircraft deliveries that were delayed a year.”

But Morgan Stanley doesn’t let Airbus off the hook

“Boeing and Airbus manufacture aircraft to an order book. White tails, which are aircraft without owners, are uncommon and undesired. When demand is strong and the production skyline is sold out, as we have seen in the past few years, a new aircraft is a scarce commodity that airlines and lessors want. In times of uncertainty, a new aircraft, with a capital cost of $50mn-$200mn per unit, becomes a white elephant.”

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Pontifications: Boeing in Washington: Here We Go Again

By Bryan Corliss

Sept. 7, 2020, © Leeham News: Stop me if you’ve heard this one: the pundits are saying Boeing is going to leave Puget Sound, leaving behind the hollow husk of a company doomed to wither and die on the vine.

Bryan Corliss

Just like they did in 2003, in 2009, in 2013 and 2016.

Seattle-area political economist and author T.M. Sell, in fact, traces the company’s first threat to leave clear back to the 1920s, when company executives got into a fight with the Seattle City Council over building new roads to connect downtown with the airport we now call Boeing Field. 

Boeing said it would pack up and move to southern California, if Seattle didn’t cooperate. 

“Like rain in winter, this is a regular feature of the Puget Sound emotional landscape,” Sell opined back in 2009.

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