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 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
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
ISTAT Day 1: Leahy’s biggest fear: producing enough planes to meet demand
Feb. 29, 2016, (c) Leeham Co: Aircraft lessors financed 48% of the Airbus deliveries in 
2015, with direct sales and sale-leasebacks, says John Leahy, chief operating officer customers for Airbus.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.
“Lessors are a key and integral part of our strategy,” Leahy said. Airbus only financed 2% of its own products last year. Export Credit Agencies financed only half the numbers of Boeing, he said.
Leahy does not see a downturn any time soon.
ISTAT Day 1: Boeing developmental airplanes progressing
Feb. 29, 2016 (c) Leeham Co.: The Boeing 737 MAX rolled out on time, the 787-10 is in production and the 777-9 is in firm configuration, says Randy Tinseth, VP-Marketing for Boeing Commercial Airplanes.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.
Boeing is watching oil prices, the global economy, geopolitical hot-spots, cargo demand and several other factors for the near-and long-term.
ISTAT Day 1: Used 777 values depend on engines, leases
Feb. 29, 2016 (c) Leeham Co.: The Boeing 777-200ER is not worth $7.7m or even $10m, but $37m to $47m, according to four appraisers who appeared today at the ISTAT AGM.
- We’re at the 2016 ISTAT AGM in Phoenix and will be reporting today and tomorrow on presentations and news from the sidelines.
Doug Kelly of the consulting/appraisal firm Avitas notes that the Rolls-Royce Trent-powered 777s are, indeed, the least desirable airplanes. GE or PW-powered airplanes commands a $7m premium, he said.
AerCap is selling 777-200ERs with leases attached for more than $50m, Kelly said.
Pontifications: Boeing sued over program accounting
By Scott Hamilton
Feb. 29, 2016, (c) Leeham Co.: It was inevitable: a class action lawsuit was filed last week against The Boeing Co., its top officers and directors over the investigation by the US Securities and Exchange Commission of the company’s program accounting.
The lawsuit was filed last Wednesday.
The lawsuit alleges “among other things, that defendants issued materially false and misleading statements and/or failed to disclose that: (i) Boeing’s use of program accounting for its 787 Dreamliner and/or 747 jumbo aircrafts relied on inflated sales forecasts; (ii) Boeing’s use of program accounting for its 787 Dreamliner and/or 747 jumbo aircrafts relied on understated estimates of production costs; and (iii) as a result of the foregoing, Boeing’s public statements were materially false and misleading….”
Bjorn’s Corner: Flight tests
By Bjorn Fehrm
19 February 2016, ©. Leeham Co: Last week I described how Mitsubishi Aircraft Corporation (MAC) issued a press release on Christmas day communicating MAC would be doing structural reinforcements on their test airframes before continuing flight testing. MAC was perhaps overzealous when informing the world that they would do minor reinforcements to two ribs and a few stub spars in order to pass Ultimate strength tests for the aircraft.
I rightfully thought this is the Japanese culture at play; there must not be a big problem behind it.
There was one more area of that press release that intrigued me. Here what it said: “The first flight and the subsequent flight tests have confirmed the basic characteristics to be satisfactory. However, we also have recognized several issues as we attempt to accelerate our development.”
Time to decrypt this as well and compare to what has become standard industry practice.
Singapore Air Show pictorial
Feb. 2123, 2016: The Singapore Air Show ended last week with a dearth of news. William Bain, associate professor and co-editor of International Relations, provided LNC with these photos.
In strategy shift, Boeing backs 7 MAX: sources
Feb. 22, 2016, (c) Leeham Co. In a shift in strategy, Boeing is now fully backing development of the 737-7 MAX instead of urging the only two customers that have ordered the airplane to up-gauge to the MAX 8, sources tell LNC.
Southwest Airlines and WestJet are the only two operating airlines for the 7 MAX. There is a third customer, a start-up in Canada that has yet to begin operations.
Sources have told LNC for months that Boeing really didn’t really want to build the 7 MAX, for which there are only 55 orders. But Southwest needs the airplane for short-runway airports like Chicago Midway and Burbank (CA) and has resisted suggestions to up-gauge, LNC is told.
All this changed when it looked like Bombardier might make a sale of its all-new CS100 to United Airlines, LNC is told.
Transition from McNerney to Muilenburg complete
Dennis Muilenburg, Chairman and CEO of The Boeing Co. Boeing photo.
Feb. 22, 2016, (c) Leeham Co.: The transition from the controversial and divisive Jim McNerney to the leadership of Dennis Muilenburg at The Boeing Co. is now complete.
Boeing announced today that McNerney stepped down as chairman and also stepped off the Board of Directors. Muilenburg, who succeeded McNerney as CEO last summer, now also assumes the chairman’s title.
It’s a welcome change.
Welcome news for Bombardier, Mitsubishi
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Introduction
Feb. 22, 2016, © Leeham Co.: The large order (Letter of Intent) last week by Air Canada for 45 firm and 30 option CS300s was welcome news for Bombardier.
And the LOI from the US lessor, Aerolease, for 10+10 MRJ90s was welcome news for Mitsubishi.
We take a look at both announcements and what this means for the two programs.
Summary
- The Air Canada order breaks the long drought in C Series orders, but it’s not enough for smooth sailing (to mix metaphors) for the aerospace company.
- Continuing the mixed metaphor, Bombardier still has a long hill to climb.
- MRJ order, by little known lessor, helps diversify customer base.