Leeham News and Analysis
There's more to real news than a news release.
Boeing program update at Paris Air Show 2015.
By Bjorn Fehrm
Introduction
June 16, 2015, Paris Air Show, c. Leeham Co: On the second day of the Paris Air show we visited several Boeing briefings. The first was Boeing Commercial Airplanes (BCA) update with BCA President and CEO Ray Conner. He elected to not do the usual slide show speech as all slides were available as handout. Instead the whole session was turned into a Q&A, which was good. All hot topics were discussed as questions from the audience. As many were also covered in Boeing’s next session, BCA development update, I will handle these there.
The topics that did not come up in the second briefing were Boeing’s Middle of the Market (MOM) studies for a new mid-range aircraft with 200-250 seats and Boeing’s view on the VLA market. Let’s take MOM first. Conner confirmed that Boeing now has identified that there is a market of around 1.000 aircraft over 10 years which is not served by a suitable aircraft. He dismissed this market being covered by Boeing’s 737 MAX 9 or the Airbus A321LR, both being too small and not having enough range. Range requirement from the many airlines they had visited over the last year was 4,500-5,000nm. The MAX 9 and A321LR have advertised ranges of 4,000nm or less.
Conner said the next step is now to study if Boeing can build an aircraft to serve this market at the price required by the market. “We are early in the studies and don’t expect any concrete decision soon.” He could also not answer if any MOM aircraft parts or technologies could be shared with an up-and-coming replacement for the 737 MAX.
Conner said the Very Large Aircraft (VLA) sector “is a small market. We don’t see that people really want to travel to a point for gathering, then go to the next hub together, only to start spreading out again. People want to go direct to their destination. We are happy with serving this market with our 747-8, especially as part of the small market is freighters.”
Dueling market forecasts for the VLA sector
June 16, 2015, Paris Air Show, c. Leeham Co. Dueling forecasts between 
Airbus and Boeing became a bit of a sideshow yesterday, with the differing projections for the Very Large Aircraft (VLA) market coming up at the Airbus Global Market Forecast press conference and in our interview with Kiran Rao, EVP Marketing and Strategy for Airbus.
John Leahy, chief operating officer for customers, continued to project a 20-year demand for the VLA-Passenger sector at 1,200. Boeing’s forecast for the VLA sector, including freighters, is 540.
Airbus on orders this year: You ain’t seen nothing yet
June 15, 2015, Paris Air Show, c. Leeham Co. Boeing predicts 1:1 book:bill (orders to deliveries) this year.
For Airbus, you ain’t seen nothing yet. And it’s not even super-salesman, super-optimist John Leahy doing the talking.
Kiran Rao, EVP Marketing and Strategy, said that after a slow first half of the year, Airbus will come on strong in the second half with a book:bill much greater than 1:1.
Kiran Rao, EVP-Market and Strategy for Airbus
Rao wouldn’t be drawn into a more definitive guidance, however.
Although sales by Airbus and Boeing have been modest this year, Rao scoffed at the suggestion the industry is entering an order trough.
“I’d start by saying you’re not seeing a decline yet. What you see is we have a nice, gentle start to the year and then we usually have a little bit of an uptick toward the end of the year. The year is not over yet, so don’t write anything off yet,” he said. “We’ve got some surprises in store before the end of the year. Not for the [Paris Air] show.”
Airbus COO faces production challenge vs bulging order book
Subscription required.
Now open to all Readers.
Introduction
June 15, 2015, Paris Air Show, c. Leeham Co. Airbus, like Boeing, is faced with an embarrassment of riches: too many 
orders for the A320 and A350 production rates that have been announced. There’s pressure from the top commercial officer to hike rates, but the president and chief operating officer says not so fast.
Tom Williams was elevated to the presidency only a few
months ago from his position as EVP-Programs, where he was in charge of production and the Airbus supply chain. Williams, a Scotsman and the first non-French or non-German to be president and COO of Airbus Commercial, ruefully observes he didn’t give up the production and supply chain duties with his new title.
Although Williams agrees with John Leahy, chief operating officer-customers, that demand indicates higher rates are needed for the A320 and A350, the demands on the supply chain for Airbus, as well as the other airframers, also demands caution.
- Summary
- Decision end of this year or early next on A380 production rates.
- A380neo launch aid reported—but it’s premature.
- No decision yet on greater than 50 A320 production rate per month.
- Pondering hike in A350 production rate beyond the 10/mo announced.
- Cabin suppliers a top concern.
Hot competition in Middle East, Airframe analysis.
By Bjorn Fehrm
Introduction
June 15, 2015, C. Leeham Co: We have previously written about the interview with Emirates Airline President and COO, Tim Clark, where he says that in the present competition for Emirates’ medium haul 330 seaters, one can see that the extreme hot conditions for Dubai International Airport can cause trouble for aircraft which are dimensioned for normal airport conditions. This will hit a dedicated medium-haul aircraft like the Boeing 787-10 harder than a long-haul aircraft turned medium-haul like the Airbus A350-900.
The latter is designed to take-off with higher weights and has therefore a larger wing and stronger engines; it has more margins in a medium-haul mission. We looked at how the engines react to hot conditions last week and will now look at the airframes.
Summary:
- The airframes have in principal three limitations for hot takeoffs:
- Balanced field length (includes the safety precautions for losing an engine)
- Brake energy absorption restrictions for an aborted take-off
- Tire speed restrictions
- The 787-10 is an optimized mid-range design. In the hot climate of Dubai it has less margins for a take-off with a large payload for a typical flight than a long range design like A350-900.
- We explore where those limits are and how they can affect daily operations.
“7M7” MOM means opportunities all around US
The prospect that Boeing may launch the so-called Middle of the Market (MOM) airplane seems to be gaining ground.
We’ve reported previously that our Market Intelligence suggests the MOM would be launched in 2017 or 2018 with an entry into service seven years later.
In an interview with Air Lease Corp president John Plueger, he outlined why Boeing has to proceed with the MOM–the response to the 737-9 MAX has been disappointing. We also reported in our interview with Airbus CEO Fabrice Bregier he doesn’t believe a MOM is needed, that the A321neo and A321LR fill the bill. Clearly he is looking at this from a different perspective than from Boeing’s current dilemma.
On the eve of the Paris Air Show, Jon Ostrower of The Wall Street Journal reported that Boeing sees a demand for MOM.
The prospect of a launch of what we’ll for now call the “7M7” (for MOM, obviously), presents opportunities all around the US. And potential anguish for Washington State and Boeing’s local unions.
Bjorn’s Corner: Hot competition in Middle east.
By Bjorn Fehrm
- Boeing needs hundreds of 777 orders to bridge the production gap is now open to all Readers.
By Bjorn Fehrm
Introduction
12 June 2015, C. Leeham Co: Earlier in the week we had an interesting interview with Sir Tim Clark, , president and COO of Emirates Airline. We discussed Emirates’ requirement for a twin aisle medium/long range complement to their Airbus A380 and Boeing 777 fleets. The competition is between Boeing’s 787-10 and Airbus’ A350-900. So far the assumptions have been that the 787-10 will be hard to beat on pure costs per seat for mid-range requirements in the 300-seat segment.
The 787-10 seats 323 passengers in Boeing’s old-fashioned IAC three class seating and 331 in our more modern, normalized two class seating with 60 inch angled lie flat in Business and 32 inch economy section. The A350-900 has so far seated 313 seats in the same normalized seating standard. Recent cabin changes by Airbus can now increase that to close to 330 seats. The configuration changes were originally conceived for A350-1000 but we believe Airbus will offer these to Emirates and they will make it into the -900 catalog.
The 787-10 is lighter and would therefore be more effective on fuel but the difference is small, given the A350-900’s more modern engines. So the overall discussion was that 787-10 had found its ideal customer, in need of many seats, a solid mid-range performance and lowest cost. That was until Monday’s interview with Clark.