Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
- Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale April 23, 2025
Farnborough redefines the MOM sector
July 19, 2016, © Leeham Co.: If anything came out of the otherwise dull Farnborough Air Show, it was that the Middle of the Market airplane debate is as muddled as ever.
Boeing didn’t launch, or even say much, about the prospective 737-10, a slightly larger version of the MAX 9 intended to close the gap between the 9 and the Airbus A321neo. Boeing illustrates the 737-8-based MAX 200 as a separate model in its product line up. The 737-10 will slot in above the MAX 200, if built.
Boeing increased the demand in its 20-year Current Market Outlook for the small, twin-aisle airplane by 5%–a move Airbus claims is aimed at the Boeing Board of Directors to entice it to approve launch of the New Mid-range Aircraft, or NMA as Boeing now calls the MOM aircraft.
Airbus said the MOM sector ends at 240 seats (single class) and only a single-aisle airplane makes sense. This is a shift from long-standing messaging that the A321neo covers the lower end of the MOM sector and the A330-200/800 covers the upper end. This message was advanced as recently as the Airbus Innovation Days at the end of May.
With the rhetoric changing a bit, is it time to redefine the MOM sector?
Airbus’ Leahy shifts a bit on MOM aircraft
Introduction
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John Leahy, Airbus COO-Customers. Airbus photo.
July 14, 2016, © Leeham Co., Farnborough Air Show: Basking on an order for 30 A321LRs on the final day of the Farnborough Air Show, Airbus’ top salesman said the Middle of the Market sector stops at 240 passengers and it’s best served by a single-aisle aircraft.
John Leahy, Chief Operating Officer-Customers, said twin-aisle aircraft down to 240 or even 220 passengers don’t work economically against a single aisle. The A321LR (Long Range) seats a maximum of 240 passengers and it is single-aisle. Even though Airbus has a 250-seat A330-200R (Regional) and an A330-800 (7,200nm-plus range), Leahy didn’t attempt make a case that these aircraft are suitable for the MOM sector.
Summary
- A 767-200/A310 size replacement isn’t viable.
- Boeing’s 20-year market forecast for the mid-sized twin-aisle is for consumption for the Board of Directors.
- The A330-200R and A330-800 aren’t good MOM aircraft.
Pontifications: Airbus faces conundrum
By Scott Hamilton
July 18, 2016, © Leeham Co.: It wasn’t the dominating headline out of the Farnborough Air Show that Airbus would have preferred: a dramatic production rate cut for the slow-selling A380 from 20/yr to 12/yr from 2018.
A leak to the Paris newspaper La Tribune last Tuesday evening forced Airbus to announce the rate cut minutes later, ahead of prepping its employee work force. It was also ahead of an investors analyst breakfast meeting the following day in London. The event’s headlines would have been Tuesday’s unexpectedly strong number of Airbus orders after a dismal Monday for Airbus and Boeing. Instead, the rate cut dominated analysts’ thinking ahead of the breakfast.
Airbus stock closed at 52.53 Euros on the Paris stock exchange Tuesday before La Tribune’s story posted at 7pm. The stock was essentially flat the next day upon opening.
The A380 investors day jinx
- July 15, 2016, © Leeham Co., Farnborough Air Show: At an event like this, we pick up all sorts of snippets that don’t fit into any given story. So here’s a compilation of our Odds and Ends to wrap up our dedicated coverage of the 2016 Farnborough Air Show.
A380 and investors meeting: The Airbus A380 has been a sensitive topic for investors. Historically stock prices took a major hit when negative news about the A380 emerged. During an investors day in December 2014, one of the executives slipped that the program could be terminated. The stock took an immediate dive and other executives had to clean up the first one’s comments.
Airbus also holds an investors day during the Paris and Farnborough air shows. The latter’s was scheduled on Wednesday. The night before, the French newspaper La Tribune broke news that the production rate of the A380 will be reduced from 20/yr in 2017 to just 12/yr in 2018. Airbus scrambled to catch up to the story Tuesday night in advance of the Wednesday investors day.
The production breaks even at 20 but not at 12. Yet the stock opened down slightly and remained flat during the rest of the day before closing up slightly.
The jinx may be over, but perhaps Airbus either has to fix the A380 program or cancel its investors days.
Bjorn’s corner: Farnborough week
By Bjorn Fehrm
July 15, 2016, ©. Leeham Co, Farnborough Air Show: We have been at Farnborough Air Show this week, the highlight of the year for an aircraft geek like me. This year there were several interesting aircraft that visited the show for the first time.
Embraer brought over the brand new first prototype of the E-jet 190-E2 and the prototype of their military transporter, the KC-390. Bombardier had their first customer/production CS100 from Swiss to visit the show in addition to their Flight Test Vehicle (FTV) no 5. And Lockheed Martin had the F35B, the vertical landing version, come and hover over the airfield the days that were reasonably rain free in the afternoon.
One thing is clear with the new generation of Single Aisle aircraft: their high bypass engines dominate the visual appearance. Figure 1 shows the 73 inch version of the Pratt & Whitney GTF on the E190-E2 prototype. Huge diameter engine on a not so huge diameter aircraft.
Figure 1. The prototype E190-E2 with its Pratt & Whitney GTF engine on the Farnborough apron. LNC photo.
747F demand will come back, says Boeing
Randy Tinseth, VP Marketing, Boeing Commercial Airplanes. Photo via Google Images.
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Update, July 22, 2016: Boeing yesterday announced it is taking an after tax charge of more than $800m against the 747-8 program. It also cancelled plans to increase production of the 747-8F from the current 0.5/mo to 1/mo in 2019 on the long-held belief demand for the 8F would recover as 747-400Fs age.
July 13, 2016, © Leeham Co., Farnborough Air Show: Boeing steadfastly believes the demand for its iconic 747 freighter will recover after years of slow orders and declining production rates.
Randy Tinseth, VP Marketing, told LNC years of missed targets for main deck freighter demand in its annual Current Market Outlook come down to the global softness in air cargo trading.
“It’s all about trade in air cargo,” says Tinseth. “The one thing we’ve seen in the last five years regarding growth and trade, if you look at 2010, it came back very strongly. We saw trade growth. In 11 and 12 and the first part of 13, we saw growth very quiet in terms of trade. Then in the back half of 13-14 and into 15, we saw trade grow at 5%. Guess what? The cargo market came back and grew at 5%.
Boeing: Our 737 MAX product range will come to market as planned despite changes
By Bjorn Fehrm
Mike Delaney. Source: Boeing
July 13, 2016, ©. Leeham Co, Farnborough Air Show: Mike Delaney, Boeing’s Vice president and General manager for Aircraft development in the Commercial Airplane division, promises unchanged delivery times despite late changes to the company’s 737 MAX line-up.
Delaney went through the changes for the MAX program as part of a larger presentation, outlining the status for all ongoing aircraft developments within Boeing at the ongoing Farnborough Air Show.
The original 737 MAX 7 seen in the picture has just grown 12 seats. Source: Boeing
Airbus cuts A380 production to 1/mo (Update)
July 12, 2016, © Leeham Co., Farnborough Air Show: Airbus will lower the production rate of the giant A380 from 18/yr to 12/yr, effective in 2018, the company confirmed after the French newspaper La Tribune first reported the news Tuesday evening Paris Time.
In January, LNC in its annual production rate forecast projected the A380 rate coming down to 12/yr by 2020. More recently Leeham Co. LLC told clients Airbus needed to figure out how to achieve a break-even at one a month (12/yr) and bring rates down sooner.
Leeham News made this production forecast in January, predicting the A380 production rate would have to come down to 1/mo by 2020 The competing 747-8 rate was forecast to come down to 6/yr by 2018. Both rates are coming down two years earlier than forecast.
All this was based on the current backlog and customer quality.
Pontifications: New war of words erupts
By Scott Hamilton
July 11, 2016, © Leeham Co., Farnborough Air Show: The war of words between Airbus and Boeing is legendary, and it continued unabated today, the first day of the Farnborough Air Show.
- See my column in Forbes for a rundown of the first day’s orders at the Farnborough Air Show.
Boeing continue its refrain during its press briefing that its airplanes are better than Airbus. Airbus returned fire moments later in its own press conference that followed Boeing’s.
But the more interesting war that is emerging is between Embraer and Bombardier.
Bombardier sees more C Series orders this year
Our coverage of the Farnborough Air Show begins today with an interview with Fred Comer, president of Bombardier Commercial Aircraft. There will be paywall and freewall posts throughout the FIA16 this week.
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Introduction
July 10, 2016, © Leeham Co., Farnborough Air Show: Winning major orders from Air
Fred Comer, president of Bombardier Commercial Aircraft.
Canada and Delta Air Lines earlier this year and the entry into service of the CS100 this Friday with launch customer Swiss International Air should give Bombardier’s bet-the-company gamble a boost for more orders this year.
This is the prediction by Fred Comer, president of Bombardier Commercial Aircraft.
During an interview with LNC on a media demo flight of the CS100 at the Farnborough Air Show, Comer said the smaller BBD can compete with the behemoths Airbus and Boeing for orders in the 125-150 seat sector.
Summary
Comer says:
- Boeing’s prospective 737-7.5 still won’t be competitive.
- The CS100 is better than the Embraer EJet-E2.
- Embraer’s complaints of unfair competition because of Canadian government investment are unfounded.