Leeham News and Analysis
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Boeing’s strategy to de-risk design, production
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Introduction
April 2, 2018, © Leeham News: Boeing’s painful experience the with the development, design, production and grounding of the 787—costing billions of dollars in overruns and penalties with a delay of nearly four years—led to a major effort to de-risk future airplane development.
The 787 experience led to a pause that resulted in pursuing derivatives of the 737 MAX and 777X instead of developing new airplanes to replace these aging platforms and leap ahead of Airbus.
Now, poised to launch its first all-new airplane program in 15 years, Boeing continues to de-risk its production.
Summary
- De-risking production means diversifying supplier base, bringing work in-house.
- De-risking is changing the fundamental design-production nexus.
- De-risking is innovating and cutting costs to meet new competition.
The Southeast Aerospace and Defence Conference will examine the transformation in production. Click here for more information.
Pontifications: The Airbus-Boeing chess game
By Scott Hamilton
April 2, 2018, © Leeham News.: While Boeing edges toward a decision whether to launch the New Midrange Aircraft, the NMA or 797 as it’s known, Airbus ponders how to respond—either pre-emptively or after Boeing’s move.
Responding with an A321neo Plus is widely known, but it’s also logical the Airbus would look at enhancements for the A320neo. Less likely but probably studied are also enhancements to the A319neo. Studies, after all, pre-date the agreement last fall with Bombardier to acquire 50.01% of the C Series program and Airbus clearly understood that the present A319neo is as unattractive as was the original design of the Boeing 737-7.
Embraer gears up for E2 delivery; a look at the 100-150 seat sector demand
March 31, 2018 © Leeham News: The first Embraer E2 jet will be delivered April 4, to Norway’s Wideroe Airlines.
The E190-E2 seats 114 passengers in one-class, 29-inch pitch and 106 at 31-inch pitch, putting it at the low end of the 100-150 seat sector that is often maligned as a Bermuda Triangle for airplanes of this size.
Wideroe of Norway takes delivery of the firzst Embraer 190-E2 April 4. Photo: Embraer
The E190-E2 competes with the Bombardier CS100, a 110-seat airplane in one-class. Neither Airbus nor Boeing have a competing product. Each offers a larger airplane in the 125-150 sector, the A319neo and 737-7 MAX respectively. Embraer and Bombardier offer the E195-E2 and CS300 in this sub-sector.
Is Airbus’ A330-800 the longest range widebody under 300 seats?
By Bjorn Fehrm
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Introduction
March 29, 2018, © Leeham News: Boeing’s 787-9 has opened new ultra-long routes such as Qantas’ first flight from Perth in Australia to London Heathrow last weekend (a 7,900nm, 17-hours flight). The 787-9 has been the undisputed long-haul star under 300 seats, with Airbus A350-900ULR underbidding the Boeing 777-200LR’s fuel burn for over 300 seats ultra-long haul flying.
But the competition for below 300 seat ULR alternatives will change in two years. Airbus A330-800 is then available in its 251t version. It will fly longer than the 787-9, according to Airbus.
The range of 7,635nm given by Boeing for the 787-9 and 8,150nm by Airbus for the A330-800 is not using the same seating and fuel reserve rules. We use our performance model to weed out the differences, to make an apples-to-apples comparison of the 787-9 and A330-800 as ULR aircraft.
Summary:
- The choice between the 787-9 or A330-800 for Ultra Long-haul Routes (ULR) will depend on the passenger loads which can be expected.
- For thin routes, the A330-800 will be the cheaper aircraft to operate.
- It will also fly longer on thin routes, as its large tanks mean passenger capacity can be traded for more fuel further than for a 787-9.
- When the 787-9 can be filled, it’s the choice with the better seat-mile cost, as it should; it’s the larger aircraft, spreading fixed costs over more paying passengers.
Spies and industrial spying
By Scott Hamilton
Scott Hamilton
March 27, 2018, © Leeham News, Bainbridge Island (WA): The unexpected US order to close the Russian Consulate in Seattle this week set off a media frenzy in this city because two reasons cited were the proximity of the consulate to Boeing and two US naval bases, Bremerton and Bangor.
There is a third, smaller one, in Everett, but this wasn’t mentioned.
Bremerton is a major repair-and-overhaul base for ships, ranging from aircraft carriers to submarines to frigates and support ships.
Bangor is home to Trident nuclear missile subs and the spy sub, USS Jimmy Carter.
I live on Bainbridge Island, a stone’s throw to Bangor (ground zero in a North Korean nuclear missile attack?) and a 45-minute drive to Bremerton. It’s 45 minutes from here to Boeing Field via ferry and car.
Boeing, of course, is the principal home to Boeing Commercial Airplanes. The commercially-based P8 Poseidon and the KC-46A tankers are built here.
Supply chain stress, number of variants challenge 737 production rate hike
March 27, 2018, © Leeham News: Current production rates and complexity in the transition between the Boeing 737 NG and 737 MAX is straining the supply chain 
feeding Spirit Aerosystems, its CEO told a JP Morgan conference March 14.
The supply chain stress makes it challenging to increase production rates. Spirit, which builds the 737 fuselage for Boeing, deployed SWAT teams to key suppliers that are struggling.
Tom Gentile, Spirit’s CEO, did not name the suppliers.
Boeing is going to a production rate of 52/mo this year and 57/mo next year. The company is studying rate hikes up to 70/mo.
The supply chain and production will be among the topics at the Southeast Aerospace & Defence Conference June 25-27 in Mobile (AL).
After Boeing yields, what’s next for Bombardier CSeries?
Analysis
March 26, 2018, © Leeham News: With the decision by Boeing to let last week’s deadline go by without filing an appeal in the Bombardier trade complaint, eyes turn to “what’s next” for the CSeries.
Source: Bombardier.
LNC broke the news on Twitter that Boeing would not appeal the 4-0 decision finding it suffered no harm in the 2016 BBD-Delta Air Lines order for 75 CS100s and options for 50 more, with conversion rights to the CS300.
Read more
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.
Boeing’s NMA decision entering final stretch, Part 2
By Bjorn Fehrm
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Introduction
March 26, 2018, © Leeham News: Boeing’s NMA or 797 is taking final form ahead of a decision to essentially launch the program with an Authority to Offer (ATO), widely believed to be later this year.
In the first article, we looked at the key characteristics of the design. We also looked at the engine situation in a couple of articles.
Now we round up the series with analyzing the potential economics of the aircraft.
Figure 1. The first sketch of the smaller 797-6X with 224 seats. Source: JonOstrower.com
Summary:
- The projected 797 would have competitive Cash Operating Costs compared with a modern Single Aisle aircraft like the Airbus A321LR.
- The challenge is the capital costs. The A320/A321 and Boeing’s 737 MAX models are produced in numbers passing 10,000. An NMA would be successful if produced in 1,000 units. This leads to higher production costs for the numerically smaller series.
- The focus from Boeing is therefore on lowering Production costs and on finding Services revenue which can help the 797 business case.
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.