Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 20. May 2, 2025
- Supplier Howmet exceeds expectations despite tariffs May 1, 2025
- Airbus 1Q2025 results: So far, so good, but US tariffs make future results unpredictable May 1, 2025
- Does an Airbus A220-500 need a new wing and engines? May 1, 2025
- Teamsters, Boeing have a new contract April 29, 2025
Boeing wins first day with big order at Dubai Air Show
Nov. 12, 2017, © Leeham Co.: In a stinging defeat for Airbus, Boeing won an order for 40 787-10s from Emirates Airline.
Airbus competed for the deal with the A350-900. Emirates previously canceled an order for 50 A350-900s and 20 A350-1000s, an embarrassment at the time. Losing this order was largely expected, but based on comments from airline officials earlier this year, it seemed that the order would be put off until next year.
Bloomberg News has this devastating report.
Unreported from this order is that it seems to indicate a changing strategy for Emirates.
Airbus’ A330 or Boeing’s 787 for LCC long haul?
By Bjorn Fehrm
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Introduction
November 09, 2017, © Leeham Co.: International Airlines Group’s (IAG) CEO, Willy Walsh, said in an Investor presentation last week “LEVEL (the group’s Long Haul LCC) is as well off with the Airbus A330-200 as with a Boeing 787.” He said the lower capital costs of the A330 compensates for the Dreamliner’s lower fuel burn.
As a proof, Walsh said IAG had run flight plans with their LEVEL A330 flying the same mission as a Norwegian 787 and configured as the Norwegian aircraft. The difference in fuel burn Barcelona-Los Angeles would be 6t. But this is easily compensated by the difference in capital costs.
Going forward, LEVEL has the possibility to switch to the 787, said Walsh. Our reaction is; why not include the A330neo in this discussion?
We decided to verify Walsh statements and also check why an A330neo wouldn’t be more appropriate than a 787.
Summary:
- The statement by Walsh about the difference in fuel burn between the A330 and the Dreamliner is correct.
- However, fuel cost is no longer the dominant cost in airline operations.
- We compare the total Cash Operating Costs (COCs) of the aircraft, then we view whether the COC difference between the types can be compensated with capital cost differences.
New mission focus seen for NMA
Nov. 8, 2017, © Leeham Co.: A revised mission focus for the the prospective Boeing New Midmarket Aircraft (NMA) is seen by a New York research firm.
Bernstein Research sees the NMA being redefined as a larger aircraft serving the Airbus A320/Boeing737 market rather than a replacement for the Boeing 757/767 “Middle of the Market” sector.
Bernstein has been cool to the prospect of a 4,500nm-5,000nm airplane. The analyst, Doug Harned, likes the proposed size—220-270 passengers in a 2x3x2 ovoid
Concept of the Boeing 797 New Midmarket Aircraft. Source: fs2000.org.
composite fuselage configuration. But he sees a stronger market serving ranges of 1,000nm to 4,500nm.
So far, there is no market intelligence LNC knows of to support any inference Boeing has refocused the mission statement of the NMA, also known as the Boeing 797, though Harned is firm in his view: “The focus is now on the NMA category, which we see as the right positioning,” he writes in a Nov. 6 research note.
Airlines LNC checked with yesterday reaffirm Boeing’s focus at this time to be 4,500nm-5,000nm.
Analyst: Airbus could eventually terminate CSeries program
Nov. 7, 2017, © Leeham Co.: The Bombardier CSeries may go the way of the McDonnell Douglas MD-95, a Wall Street aerospace analyst suggests: that is, the
Doug Harned, the analyst for Bernstein Research, draws a parallel between Airbus’ acquisition of a majority stake in the CSeries program and Boeing’s 1997 acquisition of McDonnell Douglas in which the MD-95 joined the Boeing family of airplanes.
The 110-seat MD-95 was renamed the Boeing 717. Boeing attempted to market the airplane, without success. Production was terminated after 156 airplanes were built.
CSeries effect on Airbus, Boeing product strategies
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Introduction
Nov. 6, 2017, © Leeham Co.: Boeing took a pass on assuming ownership of the Bombardier CSeries, according to a report in the Toronto Globe and Mail—the same deal rival Airbus took.
In doing so, Boeing passed on acquiring a new airplane program at pretty much zero risk, no cash investment and no research-and-development cost. The market demand ranges from 4,000 to 6,000, depending on whose study you believe.
Rival Airbus wouldn’t have a response and, given its current turmoil, would have been unlikely to pursue a response.
Instead, Boeing may embark on a risky, high-cost development of the New Midrange Aircraft for which market demand remains a controversy, suppliers are reluctant to take risk-sharing positions and which will almost certainly provoke a response from Airbus.
Artist concept of Boeing 797-7. Source: fs2000.org.
Summary
- Boeing says it’s not worried about Airbus stake in CSeries program; it remains satisfied with its product strategy.
- But 100-160 seat sector won’t be covered by a 737 replacement. Airbus has this covered with CSeries.
- New Midmarket Airplane figures into CSeries impact.
Pontifications: Small Mississippi airport plays key role in state’s aerospace industry
By Scott Hamilton
Nov. 6, 2017, © Leeham Co.: One of my stops during my October visit along the I-10 corridor from Mobile (AL) to New Orleans, through Mississippi, visiting aerospace interests was the Stennis International Airport.
The airport is in Hancock County, an hour’s drive east of New Orleans.
This is on the eastern edge of the Stennis Space Center I wrote about last week and it benefits from being in the Space Center’s shadow. The Space Center is exempt from noise regulations. So is the airport, which enables this one-runway field to be a way point for noisy military jets and trainers and a training location for helicopter-based special forces. These are all noisy aircraft that locals view as routine, says Kevin Carlisle, director of the airport.
50% increase in CSeries sales forecast–but what does this mean?
Nov. 1, 2017, © Leeham Co.: For years, Bombardier forecast the 20-year market demand in the 100-150 seat sector as between 6,000 and 7,200, depending on the 
year of the forecast.
Airbus in 2014, the last year the OEM segmented the sector in its 20-year forecast, predicted a demand of 4,363 aircraft.
Boeing, which hasn’t publicly segmented the sector, is believed to have forecast a demand between 4,185 and 6,275 in 2013, based on information revealed during various executive presentations. The mid-point was 5,230.
In announcing the acquisition by Airbus of 50.01% of the CSeries program, Airbus CEO Tom Enders cited a 20-year demand of 6,000 aircraft.
Bombardier consistently claimed it would capture 50% of the demand it saw, or 3,000 to 3,600 aircraft, over 20 years.
But the numbers don’t match up.
Suppliers conference in Mobile focuses on US aerospace sector in Southeast
Click on image for an enlarged, crisp view.
Oct. 31, 2017: A new event, the Southeast Aerospace and Defence Conference (SADC) scheduled for June 25-27 in Mobile (AL), will examine the commercial, defense, space and corporate aerospace sectors in the US Southeast.
The conference is organized by Airfinance Journal and Leeham Co., the first joint venture between the two companies.
The US Southeast is a growing aerospace center. Defense and space clusters have decades-long histories in the Southeast. Corporate and commercial clusters are more recent developments, albeit in some cases now well within a second decade.
Airbus’ A320 family Final Assembly Line in Mobile opened in September 2015. The FAL is producing 3.5 A320s per month and will reach its initial target of 4/mo by year end, slightly ahead of schedule. There is land capacity to expand to 8/mo.
Earlier this month, Airbus and Bombardier announced that their new venture will establish an FAL in Mobile.
Aviation journalist Ben Sandilands passes
Ben Sandilands
Oct. 31, 2017: Ben Sandilands, the cranky, crusty curmudgeonly writer of Australia’s Plane Talking (Crikey), died Friday after a long illness. He was 73. Cancer was the cause of death.
We only met Sandilands on a couple of occasions but avidly followed his blog for years.
He was controversial in Australia. Sandilands was a long-time critic of the Australian Transportation Safety Board and of Alan Joyce, CEO of Qantas Airways. His persistent criticism won him no friends in officialdom.
But having writing aviation for 60 years, Sandilands had sources through Australian aviation and often wrote penetrating pieces about whatever topic he happened to be pursuing at the time.
Bombardier’s “fatal error” in trade dispute
Oct. 30, 2017, © Leeham Co.: Bombardier made a fatal error in the Boeing/US trade dispute that almost certainly precludes a negotiated settlement and which the Airbus-CSeries joint venture is highly unlikely to cure, an expert trade lawyer says.
William Perry, of the Seattle law firm Harris Bricken, focuses on anti-dumping and countervailing duty cases, the two issues at the heart of the Bombardier CSeries
William Perry. Photo via Google.
case. He previously worked for the US Department of Commerce on trade cases.
He also was an attorney for the US International Trade Commission, where Commerce’s decision to impose tariffs of 219% on the CVD element and 79% in the anti-dumping case goes for judgment.
Perry says flatly, Bombardier will lose at ITC.
Why?