Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
2017, a tougher year for European airlines?
By Bjorn Fehrm
January 5, 2017, ©. Leeham Co: The last two years have seen increased profits for the airline industry. Lower priced fuel gave the industry time to breath and to finally earn a reasonable Return on Invested Capital (ROIC).
Earnings as a percent of revenue for the industry has been increasing from 5% on a worldwide basis in 2014 to around 10% for 2016, Figure 1.
Figure 1. Airline industry profits. Source; IATA presentation October 2016.
The US and European airlines have been topping the earnings with 18% on revenue for the third quarter of 2016. There are many signs this will not continue in 2017, especially for European airlines. Read more
Analyzing the Top Customers for Airbus and Boeing
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Introduction
Jan. 4, 2017, © Leeham Co.: The top 25 Airbus customers that are identified account for 63% for the current backlog, an analysis of the company’s order list shows.
For Boeing, its Top 25 customers account for 69% of its identified backlog.
Both companies have hundreds of Unidentified orders for which no customer is disclosed.
Summary
- “China Inc.” is Boeing’s #1 identified customer and #3 for Airbus.
- Two low cost carriers are the first and second top customer for Airbus.
- Three low cost carriers follow “China Inc.” as Boeing’s Top Customers.
- Boeing’s Top 3 wide-body customers are in the Middle East, where financial and traffic results are beginning to soften.
- Three of Airbus’ Top 5 customers are also from the Middle East. The other two are from Asia.
- Boeing has 54% of the market share among the Top wide-body customers. Airbus has a 54% market share in the narrow-body sector.
Pontifications: Embraer, contrary to others, looks to momentum in 2017
By Scott Hamilton
Jan. 3, 2017, © Leeham Co.: Airbus, Boeing and Bombardier look toward 2017 as a bit of a punk year, as detailed in our Look Ahead for subscribers only. Not so by Embraer.
In an exclusive interview, John Slattery, the president of Embraer Commercial, said EMB will gain “momentum” this year. This is at a time where sales at the other three of the Big Four OEMs are expected to slow off an already slow 2016.
Airbus, Boeing Top Customers mix of stable, risk and reward
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Introduction
Dec. 22, 2016, © Leeham Co.: When it comes to comparing backlogs of Airbus and Boeing, the latter likes to point to what it calls a better quality of customers.
The fact is, both companies have large orders with airlines that may be characterized as less than top quality, or which appear to have over-ordered.
Summary
- Airbus is more risk-reward oriented than Boeing.
- Airbus appears more aggressive in emerging markets.
- Airbus and Boeing share risky and quality customers.
- Many of the shared top customers are roughly balanced between Airbus and Boeing.
Boeing announces 2017 job cuts
Dec. 20, 2016: Boeing yesterday announced a new round of job cuts, hoping that these will come from retirements voluntary buyouts–but it did not rule out involuntary layoffs.
No number was given by Boeing for the workforce reduction.
Just a week ago, LNC predicted more job cuts would be coming at Boeing–and at Airbus.
Boeing’s message to employees is below.
Pontifications: Leeham News’ approach to the news
- Leeham News and Comment will be on holiday Dec. 24, 2016, through Jan. 2, 2017, barring major breaking news. Merry Christmas and Happy New Year.
By Scott Hamilton
Dec. 19, 2016, © Leeham Co. Two thousand sixteen is almost over. This will be my last Pontifications of the year.
We approach our job with a little different perspective than the daily newspapers and aviation trades. They have greater resources than we do and have a greater ability to report the news. So LNC tries to bring news with perspective that those outlets don’t.
Analysis, economics, forecasts
We provide analysis of events and of aircraft economics and performance. Not even the trades do the latter. We also make our own forecasts of trends and production rates. Sometimes it takes a few years to be proved right or wrong. So far, we have a good track record of being right.
We’re also not afraid to take on controversy—and be controversial. And we don’t hesitate to call bullshit when we see it.
This gets often us into hot water with the subjects of the controversy.
This is what sets LNC apart.
US appeals WTO ruling over prohibited subsidies
Dec. 16, 2016: The US filed a notice of appeal today of the WTO ruling that Washington State tax breaks granted to entice Boeing to locate a wing plant for the 777X and assemble the airplane at Everett ((WA) was a prohibited subsidy.
The move was expected.
At issue were $8.7bn in tax breaks.
Market, other factors emerging, creating Boeing 787 concern
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Introduction
Jan. 4, 2017, © Leeham Co.: Despite a rosy picture painted by Boeing about the future of the 787 and the ability to recover more than $29bn in deferred production
Boeing photo.
and tooling costs, there are signs that cause concerns over the next 3-5 years.
Summary
Read more
2 Comments
Posted on January 4, 2017 by Scott Hamilton
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