Leeham News and Analysis
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Will rising fuel prices revitalize new aircraft sales? Part 2
By Bjorn Fehrm
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Introduction
August 9, 2018, © Leeham News.: We continue last week’s article about how changing fuel prizes affects fleet plans. Last week we studied how long-term rising fuel prices will favour new, more fuel-efficient single-aisle aircraft.
Now we make the analysis with Widebody aircraft in the segment 250 to 300 seats.
Summary:
- The crossover fuel price where a new generation Widebody is a good investment is slightly different than for the Narrowbody.
- As for the Narrowbody, the maintenance costs for a half-life Widebody and how these are handled influence the crossover fuel price.
777F, 747-8F orders help former’s bridge, solidify Boeing as freighter king
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Introduction
Aug. 6, 2018, © Leeham News: The surge of orders at the Farnborough Air Show for Boeing 777 and 747-8 freighters is welcome news for Boeing, which still had 
production gaps to bridge between the 777 Classic and the 777X.
The 747-8F orders, for five, helps breathe life into this struggling program.
The orders also add to Boeing’s virtual monopoly in new-build cargo aircraft backlogs.
Summary
- 777F orders and commitments now nearly double the remaining 777-300ER backlog.
- Three new-build freighter models swamp Airbus offering of just the A330-200F.
- Airbus pitching UPS for A330-800F.
Pontifications: Supply chain meltdown
By Scott Hamilton
Aug. 6, 2018 © Leeham News: It happened to Airbus. It sort of happened to Boeing. It was bound to happen in a much bigger way to Boeing, and it has.
Some 40 737s are now sitting around the Renton assembly plant in a major supply-chain meltdown.
This follows the highly publicized, two-year long supplier meltdown at Airbus as Pratt & Whitney and CFM fell down on engine deliveries and technical problems for their GTF and LEAP-1A engines, respectively.
Will increasing fuel prices revitalize new aircraft sales?
By Bjorn Fehrm
Subscription Required
Introduction
August 2, 2018, © Leeham News.: As outlined in our Monday article the changing fuel price is affecting fleet plans. With increasing cost of fuel one would expect the airlines to order more new fuel-efficient aircraft.
The reaction from some US carriers has been the opposite, deferral of deliveries of new aircraft. While this might be a short-term reaction, long-term rising fuel prices will favor new, fuel-efficient aircraft. The fuel price level when this happens is today’s subject.
Summary:
- There are more factors than fuel and capital costs which influence buy new or keep old fleet, but the fuel and capital costs are the key variables.
- We also explore if there is a difference in crossover fuel price between Narrowbody or Widebody fleets.
Pontifications: thyssenkrupp’s international expansion
By Scott Hamilton
July 30, 2018, © Leeham News: thyssenkrupp, the German supplier, is a mouthful to say.
Even its name is different, using the small “t” rather than a capital “T”.
Being from Chicago, I suitably butchered it when I met at the Farnborough Air Show with its CEO, American Laura Holmes.
I won’t even attempt to write how I mangled the name, but I didn’t feel too bad when I later discovered there is a 15 second YouTube video on its pronunciation: two-sen croup (in German) or tiss-in krup [as in pup] (in English).
Regardless, the company is in an expansion mode internationally—including in Africa.
The Southeast ramps up to challenge Washington State in aerospace
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Introduction
July 26, 2018, © Leeham News: The US Southeast continues its aggressive expansion in aerospace.
Washington State plots to win the assembly site for the prospective Boeing New Midmarket Aircraft and expand its space footprint.
In a way, it’s a defensive holding game for Washington, which faces competition from more than a half dozen states where the cost of doing business is cheaper and the regulatory environment is friendlier to business.
Summary
- Washington State doesn’t “get it,” say some suppliers and a trade group.
- Gearing up for NMA competition.
- Expanding the Southeast aerospace footprint.
Boeing cash flows generously, KC-46A snarfs up some of it
By Dan Catchpole
July 25, 2018, © Leeham News: The cash keeps flowing at Boeing. The aerospace giant posted free cash flow of $4.3bn for the second quarter of the year, despite recording $426m in costs related to its delay-ridden KC-46 tanker program.
Despite posting strong earnings, the charge rattled investors, who drove Boeing’s share price down in early trading Wednesday.
Boeing continues to work on closing the business case for its New Midsize Airplane (NMA), a business case unlike any the company has done before, Boeing chief executive Dennis Muilenburg said in a conference call with reporters and investment analysts.
Leahy, Kirby headline “Plane Truths” conference in Chicago Sept. 11-12
July 24, 2018, © Leeham News: John Leahy, who retired in January after 33 years at Airbus, and Scott Kirby, president of United Airlines, headline the Leeham Co. and Airfinance Journal conference, Plane Truths: The Next 12 Months, Sept. 11-12 in Chicago.
This will be Leahy’s first conference appearance since he retired from Airbus, where he was COO-Customers.
Plane Truths: The Next 12 Months focuses only on the key issues coming up in the next year. Click here for more information.
Officials of American Airlines, Cargolux, HiFly, Rolls-Royce, Skyworks Capital, Collateral Verifications, Embraer and Bombardier are among those who will participate.
More than 1,000 orders, commitments from Farnborough
July 23, 2018: More than 1,000 new orders and commitments were announced at the Farnborough Air Show last week, a final tally shows.
The value was more than $128bn.
Credit Suisse issued its post-air show note today with a complete listing.
Orders announced previously but were listed as Unidentified until the air show were not included.