Leeham News and Analysis
There's more to real news than a news release.
Pontifications: Embraer counts on Boeing heft for E2 sales boost
By Scott Hamilton
July 22, 2019, © Leeham News: Embraer still appears to be in a bit of a holding pattern following the Paris Air Show in which it announced orders and commitments for only 76 EJets. Two additional orders announced at the show were previously under the Unidentified category.
This seems to be following a pattern set with the Bombardier C Series, in which sales were slow while the market waited for the deal to close in which Airbus acquired 50.01% of the C Series program.
Analysts react to Boeing’s 2Q charge, cost and RTS announcement
July 19, 2019, © Leeham News: Boeing yesterday announced a $4.9bn charge connected to customer compensation for the 737 MAX
grounding. It also announced a $1.7bn additional cost associated with the accounting block and forecast a 4q2019 return to service.
Wall Street analysts overall were positive with the new. Aftermarket stock trading was up; pre-market trading today is slightly down from the aftermarket high.
Below are excerpts of research notes issued last night and this morning.
Bjorn’s Corner: Airbus’ A321neo has a pitch-up issue (now with a second update)
By Bjorn Fehrm
July 19, 2019, ©. Leeham News: The European Aviation Safety Agency EASA has issued an Air Worthiness Directive (AD) to instruct operators of the Airbus A321neo of a Pitch instability issue.
EASA writes “excessive pitch attitude can occur in certain conditions and during specific manoeuvres. This condition, if not corrected, could result in reduced control of the aeroplane.”
We analyze how this is similar or different to the Boeing 737 MAX pitch instability issues.
NOTE 2: We have got a further update from Airbus, see below.
Boeing to record >$4bn charge in 2Q
July 18, 2019: Boeing just issued this press release:
Boeing [NYSE: BA] announced today it will recognize an impact to earnings when it releases second-quarter 2019 results on July 24.
Boeing will record an after-tax charge of $4.9 billion ($8.74 per share) in connection with an estimate of potential concessions and other considerations to customers for disruptions related to the 737 MAX grounding and associated delivery delays. This charge will result in a $5.6 billion reduction of revenue and pre-tax earnings in the quarter.
While the entire estimated amount will be recognized as a charge in the second quarter, the company expects any potential concessions or other considerations to be provided over a number of years and take various forms of economic value.
How much of an NMA market will the Airbus A321XLR capture?
By Bjorn Fehrm
Subscription Required
Introduction
July 18, 2019, © Leeham News: Airbus’ new A321XLR is labeled as an Boeing NMA killer. It shall, with its capability to fly the same routes as the NMA, nibble away on its market space.
This discussion takes the Airbus passenger and range data for the A321XLR and compares it with the announced capabilities of the NMA. As we will see, it’s not that simple.
Summary:
- To understand how the A321XLR will compete with the NMA, we first need to compare them with the same yardstick.
- Putting them on the same cabin and operational rule set reveals interesting differences. The A321XLR and the NMA are complementary rather than competitors.
14 new airplanes and derivatives see EIS through 2027
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July 15, 2019, © Leeham News: There are 14 new and derivative aircraft scheduled for entry into service (EIS) through 2027. This rises to 16 if Boeing launches the New Midmarket Aircraft (NMA).
But there are plenty of uncertainties around precise EIS hanging over some of these.
LNA sees entry into service for the Boeing 777X slipping to the first quarter of 2021.
LNA sees the Boeing 777X EIS slipping into early 2021. China’s C919 is now slated for a 2021 EIS, but development has been tricky and delays have been common. Russia’s MC-21 flight testing has been slow and international sanctions hang over this aircraft.
Mitsubishi’s MRJ90, now called the M90, is slated to enter service next year. It, too, has been plagued by delays. The redesigned MRJ70, the M100, moves from a 2021 EIS to a planned 2023 EIS—but given the MRJ90’s history of delays, the company has to persuade the industry no more slippages are likely.
Here is a rundown by year and aircraft of the EIS dates.
Pontifications: Boeing can’t catch a break
By Scott Hamilton
July 15, 2019, © Leeham News: Boeing can’t catch a break.
Some may argue it doesn’t deserve one, given what’s come out about the 737 MAX development. And the sloppy production of the 787 at the Charleston (SC) plant. And the FOD issues with the KC-46A at the Everett (WA) plant.
To be sure, Boeing has gotten a lot of bad press it’s deserved. But last week, two pieces of news had connections to the MAX that were (1) overwrought and (2) unwarranted.
Bjorn’s Corner: Kjos departure signals changes at Norwegian
By Bjorn Fehrm
July 12, 2019, ©. Leeham News: Norwegian Air Shuttles’ (Norwegian) founder and CEO for 17 years, Bjorn Kjos stepped down yesterday. Over the last year the CFO, Board chairman and now the CEO have changed.
This signals a change in strategy for Norwegian. The new management is focused on halting growth and cutting costs. Norwegian must now consolidate itself to profitability.
Figure 1. Norwegians Intercontinental network spring 2019. Source: Norwegian.
Will the NMA-7 finally kill the A330?
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By Judson Rollins
July 11, 2019, © Leeham News: Boeing is expected to proceed with the New Midmarket Airplane (NMA) once the 737 MAX gets clearance to return to service. News from the Paris Air Show indicates Boeing may launch the larger model, the NMA-7, first.
The 270-passenger version of the NMA is viewed by some—including Boeing—as the airplane that would effectively kill the A330neo.
Twelve years ago, the 787 was supposed to finally kill the A330 once and for all … and we saw how that turned out. But this time may well be different.
Rendering of Boeing NMA-7. Source: Leeham Co.
Pontifications: Airbus-the First 50 Years
Book Review
By Scott Hamilton
July 8, 2019, © Leeham News: When a company authorizes or sponsors a book about some major event, the book is usually a puff piece meant for the coffee table in reception.
Airbus authorized the book, Airbus: The First 50 Years, but it’s no puff piece. It’s an honest, candid accounting of how the company came to be, navigating through country and corporate politics, face offs with rival Boeing, reporting the insider trading allegations and ending with the as-yet unfinished corruption scandal investigations.
Nicola Clark, the aerospace reporter for the International Herald Tribune, did a superb job up to her usual reporting standards while avoiding the puff pieces that usually come with an authorized book.