Leeham News and Analysis
There's more to real news than a news release.
What’s happened to the VLA sector?
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Introduction
Aug. 15, 2016, © Leeham Co.: Boeing says it may discontinue the 747 program.
Airbus put the A380neo on indefinite hold. Qantas Airways says it doesn’t want its last eight orders. The OEM will reduce the production to 12/yr in 2018.
There haven’t been any Boeing 777X sales since June 2015. There are only six identified customers and there has been a new, identified customer added since July
Boeing is considering a larger 777-10, which will carry 50 more passengers than the 777-9. But is there a market? Boeing photo via Google images.
2014, when ANA ordered the X.
Sales have dried up for the 365 passenger Boeing 777-300ER and only a smattering of orders have come in for its competitor, the Airbus A350-1000.
What’s happened to the Very Large Aircraft sector? What’s happened to the large, medium twin aircraft sector?
Summary
- The VLA market pioneered by Boeing and pursued by Airbus is virtually nonexistent.
- Yet there are those in Boeing who want to launch a 450-passenger 777-10 into a dubious market demand.
- 777 Classic sales dried up, but A350-1000 isn’t doing great, either. Are these too big, too?
Pontifications: Mitsubishi ramping up flight testing for MRJ
By Scott Hamilton
Aug. 15, 2016, © Leeham Co.: Mitsubishi Aircraft Corp. (MAC) is about to dramatically ramp up its flight testing of the MRJ-90.
Media has been alerted to an all-day event next month, complete with a tour of the Moses Lake (WA) facility, where test airplanes will be based.
The program is two years behind schedule for the brand new design, the first commercial airliner produced by Japan since the YS-11 turboprop more than 50 years ago.
Boeing KC-46A cleared for production
Click on image to enlarge. Image via Google.
Aug. 14, 2016: The Pentagon cleared Boeing’s KC-46A aerial refueling tanker for Low Rate Initial Production (LRIP) after the aircraft completed Milestone C refueling tests.
All that remains now is for the US Air Force and Boeing to execute the contracts.
This is welcome news for Boeing and the USAF.
Boeing lays ground to cut 777 rates again
Greg Smith, CFO of The Boeing Co.
Aug. 11, 2016, © Leeham Co.: Boeing is laying the groundwork to further reduce the production rate on the 777 Classic and scrap a planned rate increase for the 787 from 12 to 14/mo.
Greg Smith, CFO of The Boeing Co., reiterated a message from CEO Dennis Muilenburg during the 2Q2016 earnings call that these rate adjustments may be forthcoming.
Smith made his remarks at an investors day conference sponsored by Jefferies & Co.
Boeing slightly leads Airbus in YTD orders
Aug. 8, 2016, © Leeham Co.: Boeing continues to lead Airbus in the race for orders post-Farnborough Air Show (FIA), but there are key orders announced there that haven’t been booked on the two OEMs order books.
Boeing hasn’t booked most of the firm orders yet from Volga Dnepr/Air Bridge Cargo announced at the show for 747-8Fs. Airbus hasn’t booked the 100 announced orders for A320s from AirAsia. Boeing also announced some 737 MAX orders that need to be firmed up into contracts before booking to its website.
The AirBridge orders will be closely watched. Boeing said at Farnborough that the MOU for 20 747-8Fs announced at the Paris Air Show a year earlier were now a firm contract, over six years. But Boeing and AirBridge did not say how many were firm orders, other than to identify four aircraft that were previously delivered under leases as part of the 20.
Reuters believes that 13 of the 20 are firm. Those four previous deliveries appear to be part of the 13, but this is unclear. Airfinance Journal reported that seven of the 20 will be taken by Boeing Capital Corp and leased to AirBridge. If true, this adds about $1bn to the Boeing balance sheet for customer financing.
This detail is important because AirBridge is very possibly the last customer that will order the 747-8. Boeing said it now has a backlog to 2019, but because the Airbridge transaction remains murky at best, the details are equally murky.
Drilling down into details of the orders placed through July:
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Pontifications: Twelve new designs in 10 years spurred orders
By Scott Hamilton
Aug. 8, 2016, © Leeham Co.: The book:bill for Airbus and Boeing this year will be hard-pressed to reach one. Airbus has a better shot, given lower production rates. But the recent years of record-setting orders are over for now.
Unlike some, this doesn’t represent a bursting bubble to LNC. Rather, it’s a natural progression of the cycles that are historically seen.
It’s necessary to put some context into the recent years of these unprecedented number of orders.
State officials need to act now, ahead of lean times coming at Boeing Everett
August 4, 2016 (c) Leeham Co.: With the news that Boeing may terminate the 747-8 program, effective around 2019 when the current backlog expires, the obvious
Washington Gov. Jay Inslee (D) is running for reelection. He needs to think about the coming lean times at the Boeing Everett plant in less than three years. So does his challenger and all the incumbents and candidates for Legislature. USA today photo via Google images.
question arises: what happens to the assembly line space now occupied by the massive airplane?
Given that the State of Washington elected and appointed officials generally view Boeing in a reactive rather than a proactive mode, an open letter to them seems appropriate.
It’s imperative that Washington officials begin planning now for some lean times ahead for the Everett plant. Waiting until 2019 is too little, too late.
Irkut MC-21-300 analysis, Part 3
By Bjorn Fehrm
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Introduction
August04, 2016, ©. Leeham Co: With the classification of the Irkut MC-21-300 done in terms of its size segment (it’s close to the Boeing 737 MAX 9 in size) and the key data of the aircraft analyzed, it’s now time to look at aircraft efficiency and payload-range performance.
Figure 1. MC-21-300 prototype on the final assembly line. Source: Irkut
We will do this with two cabin configurations for the aircraft. The first will be the nominal two class seating as proposed by the OEMs. For the second, we use a single class layout with 30-inch seat pitch.
Summary:
- The MC-21 has problems to compete with the re-engined 737 MAX 9 in terms of efficiency when using the standard two class cabins.
- When we switch to a single class high density layout, the fuel efficiency improves. The MC-21-300 exit concept is then more similar to the MAX 9, which affects efficiency in a positive way.
Boeing’s 2Q2016 results and the 787
By Bjorn Fehrm
August 03, 2016, ©. Leeham Co: Boeing released its 2Q 2016 results last week. This is always a good opportunity to look at information regarding its 787 Dreamliner project. Last week’s call did not disappoint even if the information leaves plenty of room for interpretation.
The first information was the production cost of the fourth and fifth Dreamliner that were produced. According to the stock market filing (10-Q), these cost over $500m per unit. The further information we got was the production cost for the 38 Dreamliners that were produced in the quarter and the relationship of the 787-8 costs to the 787-9.
As Boeing uses program accounting, these normally very hush-hush figures have to be shared with the public. Not so with other aircraft OEMs that use unit accounting for production. Read more
Air Lease sounds caution note for Airbus, Boeing
Air Lease Corp. made the predictions on its 2Q2016 earnings call Friday.
ALC also predicted Boeing will further lower the production rate of the 777 Classic from the announced 5.5/mo in 2018. ALC did not specify a rate, but some aerospace analysts believe a rate of 4/mo is coming.
They also believe neither Boeing nor Airbus will increase production rates of the 737 to 57/mo or A320s to 60/mo. Boeing announced previously that it is considering increasing the 737 rate from the announced 52/mo, effective 2018, to 57/mo. Airbus previously announced it will increase the production rate of the A320 to 60/mo and is considering a rate of 63/mo.
Airbus is bringing the rate up from 44/mo to 60 by 2018.
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22 Comments
Posted on August 10, 2016 by Scott Hamilton
Airbus, Boeing, Leeham News and Comment
737, 777 Classic, 787, A320, Air Lease Corp., Airbus, Boeing, John Plueger