Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Little known, most unknown in Air India 171 crash June 13, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 26. June 13, 2025
- Airbus forecasts that almost three times more aircraft needs to be produced by year 2044 June 12, 2025
- Paris Air Show preview: Don’t look for big news June 11, 2025
- P&W: the troubled GTF will be the best engine for the next single-aisle airplane June 11, 2025
United: the road back
By Bjorn Fehrm
Introduction
February 1, 2017, ©. Leeham Co: A headline from one year ago read: “UNITED’S QUEST TO BE LESS AWFUL: A bungled merger. A corruption scandal. Three CEOs in a year. But hey, at least the snacks are free again.” (Bloomberg 14 January 2016).
“Things have changed, but not everything is fixed yet,” said Gary Laderman, United’s SVP Finance, Procurement and Treasurer, at the Airline Economics Growth Frontiers conference in Dublin last week.
Figure 1. United’s new Boeing 777-300ER. Source: Chris Edwards/Woodys Aeroimages.
Laderman then candidly went through the history, the fixes and why there is more to come. Read more
Pontifications: No rate increase on Boeing 787 predicted
Jan. 30, 2017, © Leeham Co.: Boeing will decide this year whether to boost 787 production to 14/mo from 12/mo by the end of the decade.
I don’t see how this can happen. Neither do several aerospace analysts.
Book:bill sales were just 0.36 in 2014, 0.53 in 2015 and 0.42 in 2016. The last three years saw a book:bill rate average of just 0.43, or an average of 57 airplanes per year.
Boeing is burning off the backlog, not adding to it. At this rate, Boeing won’t be able to sustain rate 12 beyond 2020, let alone boost the rate in 2019.
Not unless there is a plethora of sales this year. This doesn’t seem likely.
Two “Boeing countries” on Trump’s no-fly list
Jan. 30, 2017, © Leeham Co.: Two of the seven countries on President Trump’s own “no-fly” list of travelers coming to the United States committed to 108 Boeing airplanes.
One of the governments is an ally of the United States: Iraq.
Iraq remains on the US government list of a terrorist state. Iran, Sudan, Somalia, Libya Yemen and Syria were targeted in Trump’s Executive Order Friday as presenting terrorist threats to the US.
Airline flight crews who come from these countries, even if flying for airlines not of these nations, are affected, said the International Air Transport Assn. (IATA), an industry trade group.
Assessing A330, A350 production futures
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Introduction
Jan. 26, 2017, © Leeham Co.: Airbus A350 production rates are solid at 10/mo through 2022 but can’t support increasing them to the oft-discussed 13/mo, based on LNC’s analysis of the current backlog.
Airbus A330-900 and A350-900. Source: Airbus.
The backlog currently falls off sharply in 2023. At six years out, there is plenty of time to fill the production gap—in theory. The dearth of wide-body orders through the end of the decade could make this challenging.
The A330 is a near-term challenge.
According to an analysis of its backlog, only three-quarters of the delivery slots are filled in 2019 and fewer in 2020. The backlog begins to fall sharply in 2021.
Summary
- A350, like Boeing 787, is not achieving 1:1 book:bill.
- Like the 787, the A350 production is currently living off the backlog.
- A330neo sales are focus at Airbus this year. Delivery schedule falls off in 2019.
Boeing to decide this year 787 production rate of 14/mo
Dennis Muilenburg, Boeing CEO
Jan. 25, 2017: Boeing today reported slightly lower revenues for 2016 vs. 2015.
Revenues were down 2% to $94.6bn vs $96.1bn.
Net profit was down 5% year-over-year, reflecting the lower revenues and after charges on the KC-46A tanker and 747-8 programs. Operating profit was $5.8bn vs $7.4bn.
Net profit under GAAP accounting was $4.4bn vs $5.2bn.
Boeing took a pre-tax $312m charge on the KC-46A in the fourth quarter. Charges are now approaching $2bn.
The full press release is here.
Note that officials will make a decision this year whether to increase 787 production to 14/mo by the end of the decade (see Highlights).
Pontifications: Airbus, Boeing single-aisle production rates solid
By Scott Hamilton
Jan. 23, 2017, © Leeham Co.: The global economy is softening and airlines are deferring airplanes, but we don’t see Airbus or Boeing trimming aircraft production for their single-aisle airplanes.
Over-sales and rising fuel prices support today’s A320 and 737 production rates and the increased rates previously announced by Airbus and Boeing.
While oil prices are low compared with the pre-Great Recession levels, Embraer’s John Slattery noted that fuel costs went up more than 48% last year alone. Fuel now costs more than $50/bbl. West Texas Intermediate Crude was selling at $51.08 Thursday, off $1.40. There will be ups and downs, but the trend is up.
Slattery, the president of Embraer Commercial airplanes, believes “fuel efficient fleets will become more critical in the coming years,” he wrote in a Tweet Jan. 7.
A380 cost analysis
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Introduction
Jan. 23, 2017, © Leeham Co.: In a sister article, we will describe how Airbus A380 might change from a flagship aircraft for legacy carriers to a competitive tool for long-range LCCs.
This change of the A380’s profile is based on bringing cabin densities to the levels of other long haul aircraft. We have historically made detailed operating costs studies of the A380 versus other large long-haul aircraft.
With the possible change in the aircraft’s operating profile, we decided to update the study with the A380ceo pitted against its main competitors, Boeing’s 777-300ER and 777-9. Different from the previous study, we now compared all aircraft in a higher density, two-class seating.
Summary:
- The A380neo is pushed out in time for now. Airbus has instead started a cabin density program.
- We update the study of A380 versus its main competitors to see if the cabin changes goes far enough.
- In the last study, the A380 had lower seat mile cost than 777-300ER but was beaten by the 777-9.
- We check if a denser cabin makes the A380 competitive with the 777-9
Bjorn’s Corner: Aircraft engines in operation
By Bjorn Fehrm
January 20, 2017, ©. Leeham Co: We have now covered the technology around airliner turbofans. Now it’s time for the real stuff: their operational life. Most decisions that an engine designer does is about how the engine shall function in practice.
To understand a typical cycle of an airliner engine and the stresses it endures, we will follow an engine during a typical mission.
Figure 1. A principal picutre of a direct drive turbofan. Source: GasTurb.
We chose a single aisle mission because most flights are with single aisle aircraft and the cycle these fly is the most stressful for an engine. Read more
Filling the Middle Of the Market gap
By Bjorn Fehrm
January 17, 2017, ©. Leeham Co: Airbus and Boeing had completely different views about the product strategy for the “Middle of the Market” sector (MOM), both for today and the future.
Officials presented their views on how to fill the “Middle of the Market gap” at the Air Finance Journal conference in Dublin.
The Airbus view is: “We got it all covered”.
Boeing’s view is: “Not so fast, there is more to it than meets the eye.” Read more
The aircraft market will double in 20 years
By Bjorn Fehrm
January 17, 2017, ©. Leeham Co: The market for passenger aircraft will double over the next 20 years, says Angus Kelly, the CEO of the world’s largest aircraft lessor, AERCAP. He forecast this growth, which is in sync with those from Airbus and Boeing, in his keynote speech at the Airline Economics Growth Frontiers 2017 conference in Dublin.
Kelly linked the growth with the increase in Global air travel. He started by showing what happened in the air travel industry during 2016, Figure 1.
Figure 1. Air transport market 2016 key facts. Source: AERCAP. Click to enlarge.
Passenger travel grew with 5.6% and airlines were more profitable. Negative news was a slowing GDP in China and a widebody market that had a continued slowdown.