The Airbus and Boeing market outlooks, Part 1

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By Vincent Valery

Introduction  

Sept.  12, 2022, © Leeham News: Airbus and Boeing published their updated 2022-2041 commercial aircraft outlooks ahead of the July Farnborough Air Show. Unsurprisingly, both OEMs saw robust demand for the next two decades despite recent economic headwinds that lowered long-term fleet growth forecasts.

Credit: Leeham Company LLC, 2022

Airbus and Boeing see a market for delivering 38,600 and 38,110 single-aisle and twin-aisle passenger aircraft over the period. A 1.3% difference over 20 years is well below the margin of error of such long-term forecasts.

However, despite such minor overall differences in long-term delivery forecasts, both OEMs use different assumptions to come up with those numbers.

Also, the recent challenges with increasing production rates on single-aisle aircraft raise the question of whether there is enough capacity to meet the optimistic demand outlook.

The first part of this two-article series highlights the main assumption differences between the Airbus and Boeing market outlooks. The second will translate those assumptions into production rates and assess whether OEMs can meet that demand, notably over the next 10 years.

We will focus on the single-aisle (100 passengers and above) and twin-aisle passenger markets.

Summary
  • One OEM is more optimistic about fleet growth;
  • Another on replacement rates;
  • A (maybe not) surprising up-gauging assumption for one OEM;
  • Higher growth rates than meet the eye.

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Pontifications: BOC Aviation sees widebody recovery next year

By Scott Hamilton

Sept. 12, 2022, © Leeham News: Widebody aircraft demand cratered during the COVID-19 pandemic. It’s still depressed.

But the chief executive officer of lessor BOC Aviation sees recovery in the works.

“We’re beginning to see quite a big pickup in demand for widebody aircraft,” Robert Martin told LNA in an interview late last month. “Not now but starting next year. What’s prompting that is people are beginning to realize that China will probably open in the fourth quarter this year for international traffic. Just to give you some statistics, if you go back to 2019, China outbound was more than 70 million passengers. Last year was 1.5 million, and so the amount of uplift is quite full.”

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Engine Development. Part 4. Turbofans go mainstream.

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By Bjorn Fehrm

Introduction

September 8, 2022, © Leeham News: Last week, we analyzed the change from turbojets to turbofans for civil air transport. The jet engine was developed for high-speed military fighters and was not ideal for subsonic airliner use.

We also dwelled on why the three major engine OEMs came to different solutions for the first-generation turbofans. Now we look at the engine that made turbofans mainstream, the Pratt & Whitney JT8.

Figure 1. The Boeing 727-100 with Pratt & Whitney JT8 engines. Source: Wikipedia.

Summary

  • The JT8 competed with the more developed Rolls-Royce Spey to engine the first US domestic jet airliner, the Boeing 727.
  • After it captured the Boeing 727, it went on to engine all US short and median haul jets of the 1960s.

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HOTR: Could airport caps lead to 777X success?

Sept. 6, 2022, © Leeham News: Will Europe’s airport passenger caps ultimately save the Boeing 777X?

Sometimes it’s more important to be lucky than it is to be good.

It may be purely speculative, but Boeing may well be on the verge of being lucky.

Amsterdam and London Heathrow imposed daily caps of 67,000 and 100,000 passengers, respectively. Other airports considered following suit. The caps were imposed because airport operations were melting down. Short staffing across several professions, including passport control, was blamed.

The short-staffing no doubt will be rectified eventually. But some industry observers speculate that the European Union may decide to impose flight capacity restrictions as one way to reduce aviation emissions. This, some think, might result in a sales boost for the slow-selling 777X.

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Pontifications: Some customers face 3 month delays in current 737 MAX delivery stream

By Scott Hamilton

Sept. 5, 2022, © Leeham News: Boeing has been delivering 737s from its stored inventory and its new production line more slowly than desired. Some customers face a three-month delay, even as Boeing tries to return to normalcy following the 21-month grounding of the MAX and the impact of the two-year pandemic.

The supply chain is a key culprit. Reconfiguring stored airplanes for lessees or buys after a change from the original operator is another. Engine shortages are still another.

BOC Aviation, a lessor headquartered in Singapore, faces three months delays, Robert Martin, the CEO, said in an interview with LNA.

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Engine Development. Part 3. The early turbofans.

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By Bjorn Fehrm

Introduction

September 1, 2022, © Leeham News: Last week, we looked at the motivation to change from propeller engines to jet engines as higher cruising speeds were sought for airliners.

We learned the straight jet engine, while good for military jets, wasn’t well suited for civil airliners. It was noisy and fuel-thirsty. It was why the subsequent engine development, the turbofan, was quickly accepted by the airlines.

Figure 1. A Boeing 707 with Pratt & Whitney JT3D turbofan engines. Source: Wikipedia.

Summary
  • The first turbofans from Rolls-Royce, Pratt & Whitney, and GE had different designs.
  • The advantages of the turbofan over the straight jet were quickly recognized. The turbofan has been the choice for airliners since the late 1950s.

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Retrospective: 2011 pros and cons of composite airplanes as Boeing, Airbus look to next 20 years

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By Scott Hamilton

What will the Future Small Airplane look like? Composites, metal, or a combination? Concept Credit: Leeham News.

Aug. 29, 2022, ©Leeham News: Airbus and Qatar Airways are in a nasty court battle over composite degradation on the A350. Lightning strike protection is a major concern in the Qatar lawsuit. Paint begins to strip off composite materials on the A350 and Boeing 787. Building composite airplanes is expensive.

Composites have been on airplanes since the days of the Boeing 727 when the wing-to-body fairings were made of composites. Airbus put composite vertical fins on the A310 and A300-600R. Private airplanes used composites.

But it was the Boeing 787 that became a ground-breaking airliner with its composite wings and composite fuselage. Boeing’s launch of the 787 in December 2003 was what would later be described as a moonshot. It was the first “all” composite airplane. (About 52% by weight was composite.)

It was the first “all-electric” aircraft, meaning all systems were powered by electric energy. Boeing intended that this would be a “snap-together” airplane. Fuselage sections were to be “stuffed” when delivered to the final assembly line in Everett (WA) and “snapped” together, like a prefabricated house. Outsourcing to industrial partners was taken to unprecedented levels at Boeing. (Airbus already largely practiced this for its aircraft.)

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Pontifications: Signs point to China OK soon for Boeing deliveries, orders

By Scott Hamilton

Aug. 29, 2022, © Leeham News: The Chinese government appears on a path toward authorizing Boeing to resume deliveries to airlines by or early in the fourth quarter, China watchers tell LNA.

China hasn’t placed new orders for Boeing aircraft, with few exceptions, since then-President Donald Trump initiated a trade war with China shortly after taking office in 2017.

Nor has China taken delivery of more than single-digit numbers since 2019, following the grounding of the 737 MAX in March that year. China’s regulator, CAAC, was the first to ground the domestic MAX fleet following the second accident of the type in March 2019, five months after the first accident.

China was the last major regulator to recertify the MAX, in December 2021, following the FAA’s recertification in November 2020. But CAAC has not authorized deliveries. It appeared on the cusp of doing so when last May a China Eastern Airlines 737-800 nose-dived from cruising altitude into the ground, killing all aboard. CAAC ordered China Eastern and its affiliated airlines to ground all 737-800s, a move widely believed to be unwarranted given the circumstances of the crash that tentatively pointed to a cockpit-controlled dive. Later investigation largely confirmed this, though no accident report has been released yet.

Because of the crash, CAAC withheld authorization for Boeing to resume deliveries of the MAX. Geopolitical considerations also are believed to have played a role as tensions between the Washington and Beijing continued over the unresolved trade war, China’s straddling sides in the Russian-Ukraine War, and visits by members of the US Congress visited Taiwan. China regards Taiwan as a renegade province and objects to political visits by other countries.

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Orders at Risk: Summer 2022 Snapshot

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By Vincent Valery

Introduction  

Aug. 22, 2022, © Leeham News: The ink has now dried on the orders signed at the 2022 Farnborough Air Show. Boeing announced more orders than Airbus, mainly because of a sold-out A320 production line well into the future. Airbus also announced orders shortly before and after the Air Show.

Credit: Airbus

Airbus and Boeing also disclosed their second quarter of 2022 earnings and July orders and deliveries, the first post-Farnborough update. OEMs are more likely to reassess the quality of their order books before disclosing future earnings.

Airbus and Boeing have outstanding orders with airlines where there is a material probability some orders won’t translate into deliveries. Most were the result of airlines encountering financial difficulties, but some were related to contractual disputes. Boeing flags such orders as subject to an ASC 606 accounting rule adjustment.

Unlike Boeing, Airbus isn’t subject to an accounting rule like the ASC 606 adjustments. Therefore, the European OEM does not break down the orders at risk of cancellation by the program. Airbus only discloses the nominal value of its total adjusted order book in its annual report.

LNA analyzed July 2020, November 2020, August 2021, and February 2022 Airbus’ and Boeing’s order books to identify orders at risk and come up with an apples-to-apples comparison. We update this analysis with the latest order books from both OEMs. The above links explain our methodology and its differences with Boeing’s ASC 606 adjustments.

Summary
  • Lingering order book cleanup for older programs;
  • The Boeing-China factor;
  • A healthier single-aisle Boeing order book;
  • Updates on the A330neo and large twin-aisle aircraft order books;
  • One aircraft variant stands out.

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Boeing prepares to swap engines from MAX inventory to new production

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By Scott Hamilton

Aug. 15, 2022, © Leeham News: Boeing CEO David Calhoun says the company won’t build 737 gliders. That’s what airplanes are called as they exit final assembly without engines. The mitigation ironically comes from a circumstance that bedeviled Boeing since March 2019.

Planning is underway to take engines from the large inventory of stored 737 MAX aircraft to install on new production airplanes, LNA confirmed.

Engineless Boeing 737 MAXes in 2018. Boeing is making counterweights to hang on the new-production airplanes if CFM can’t deliver engines on time. Credit: Woody’s Images.

Boeing is producing 20-30 ship sets of counterweights, LNA is told. The counterweights are yellow blocks hung from the pylons to which engines are attached. The weights are needed to prevent the airplanes from sitting on their tails without the heavy engines installed. The counterweights will be installed on the stored airplanes when the CFM LEAP-1B engines are removed to install on new production aircraft as they roll off the final assembly line in Renton (WA).

In 2018, some MAXes rolled off the final assembly line without engines when CFM deliveries couldn’t match the production rate then.

Airbus has upward of 30 A320 gliders because CFM and Pratt & Whitney can’t deliver engines on time due to supply chain issues. Boeing, struggling to return to the 2019 737 production rate of 52/mo following the 21-month grounding of the MAX and a slow recovery from the COVID pandemic, hasn’t produced gliders yet. CFM is the exclusive engine supplier for the MAX.

 

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