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 27. June 20, 2025
- Pontifications: A Personal Note June 19, 2025
- Airbus books 142 firm orders as Boeing retracts from the Paris Air Show June 19, 2025
- AIN Media Group Agrees to Acquire Leeham News & Analysis June 17, 2025
- Five for Five: Air India crash points to systemic problems at Boeing that CEO Ortberg must fix June 15, 2025
Odds and Ends: Turkish tests A380; Boeing’s cash out; A400M milestone before Airbus Group results
18 Feb 2015: Turkish Airlines is contemplating testing A380 operations according to Blomberg by wet leasing two A380 from Malaysian Airlines. Turkish did the same when they tested the Boeing 777 before ordering it, then by wet leasing 777 from Jet Airways.
The deal would be good for both Turkish Airlines which could test the A380 to see if there is sufficient demand on their densest routes and for Malaysian Airlines as recent disasters has meant they no longer need the capacity of their six A380.
Probable destinations for Turkish would be London Heathrow and JFK. The two aircraft would be operated by Malaysian Airlines pilots and Malaysian would also furnish half the cabin crew during the first six months, the other half coming from Turkish. After the initial period there would be a dry lease phase where Turkish would continue with own crews. A third backup aircraft should be part of the deal.
Boeings CEO, Jim McNerney, has told investors at a Barclay’s investor conference that Boeing can use of to 80% of its free cash flow to pay back to investors without endangering planned R&D projects reports Reuters. Partly this comes from being able to keep the 777 production rates at around the current 100 aircraft per year in the bridge to the 777X. To entice airlines to continue buying the present 777, Boeing is working on improvements to the aircraft that will increase the efficiency by 2 %, half of which will be coming from improved GE90 engines and half from airframe changes.
McNerney further said the higher than expected deferred 787 productions costs were due to investments in production methods and the labor costs not coming down as expected. He also commented on the work on a new aircraft for the market between the present 737 and 787, “the 757 market” where he said the only thing which is clear is that the airlines want a slightly larger aircraft and we don’t see the market needing a solution in the near to mid term.
Airbus Groups results will be announced in a press conference from Munich Friday next week and their Military aircraft division is working on the outstanding improvements they owe A440M customers. Timely before the press conference they have now demonstrated the A400M working as a combined logistical transporter and tanker. In a series of rendezvous over four flights they transferred a total of 27 tonnes of fuel to two Spanish Air Force F18.
A400M filling up two F18 with fuel. Source: Airbus.
From the press release: “With a basic fuel capacity of 50.8 tonnes which can be increased by the use of extra cargo hold tanks, the A400M is the most capable tactical tanker in the market. The standard A400M aircraft has full provisions for air-to-air refuelling (AAR) operations already installed and only requires the rapid installation of the optional air-to-air refuelling kit to become a tanker.”
Our article shows that this is but one of the capabilities that should have been in delivered aircraft by now, Airbus is expected to announce further provisions for A400M development at the event.
Bombardier’s crisis of confidence perhaps the biggest challenge for CSeries
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Introduction
Feb. 18, 2015, c. Leeham Co.: Alain Bellemare, Bombardier’s new president and chief executive officer, has his work cut out for him.
Figure 1. The CSeries was supposed to enter service in late 2013, two full years ahead of the Airbus A320neo. This market advantage has been lost with repeated delays. BBD is sticking to its public statement that EIS is now the second half of this year (most put EIS in the fourth quarter), but there is growing belief EIS will slip to the first or even the second quarter of next year–after the A320neo EIS. Source: Bombardier, Airbus, Leeham Co. Click on image to enlarge into a crisp view.
We outlined the corporate and market perception challenges ahead of him in our Feb. 13 post. Investor and media reception to the CEO leadership change was mixed. Although Bellemare’s appointment was seen as a positive, stock traded down and Bombardier took a pounding in the press (see some reaction at the bottom of this post).
He also has challenges with a changing market place, driven by two years worth of delays in the CSeries program and exacerbated by a changing global political environment.
Summary
- Bombardier faces a crisis in confidence from customers that has to be fixed.
- The CSeries has lost its entry-into-service advantage over the Airbus A320neo and has reduced its advantage over the A319neo, the Boeing 737-8/7 and Embraer E-190/195 E2 EIS due to delays.
- A changing global political environment poses additional risks to the CSeries skyline.
Odds and Ends: Tax breaks and job guarantees; New airline analysis blog
Feb. 17, 2015: Tax breaks and job guarantees: Boeing’s two largest unions in Washington State appear to be making headway this legislative session to get a bill on the floor for a vote that would retroactively tie 2013 tax breaks to a guarantee of jobs.
It’s less likely that the legislation will include a minimum wage component.
The tax breaks, hastily approved by the Legislature in November 2013, provided for $8.7bn in tax breaks to 2040 in return for Boeing locating the 777X assembly line and wing production in Everett (WA). The tax breaks are not only for Boeing, but available across the supply chain.
But there were no job guarantees, SPEEA and the IAM 751 warned legislators, and without them in the bill, they predicted Boeing would move jobs out of state.
That’s exactly what happened.
Playing number games with the A380
Feb. 15, 2015: Orders for the Airbus A380 have been slow, almost glacial, since the program was launched in 2000. Despite a 20-year forecast then and every year since by Airbus that suggests there is a need for 1,200-1,700 Very Large Aircraft (including freighters), sales of the A380 and Boeing’s 747-400/8 have never reached a point that support the forecast.
Airbus’ latest forecast now is for around 1,500 VLAs, including freighters.
Slow sales hang over the prospect of developing an A380neo. We concluded last year that Airbus had to proceed with the neo in order to spur sales. The commercial viability is a matter of great debate, but Airbus Commercial CEO Fabrice Bregier said last month Airbus will produce a neo, and even stretch the airplane.
Aviation consultant Richard Aboulafia, a critic of the A380 from the get-go, thinks Airbus would be nuts to launch a neo. At the Pacific Northwest Aerospace Alliance conference last week in Lynnwood (WA), in the heart of Boeing country, Aboulafia renewed his decades-long criticism of the airplane.
PNAA Conference: Airbus says A320 cancellations not as bad as numbers suggest
Feb. 12, 2015: Simon Pickup, Strategic Marketing Director, Airbus, took issue (no surprise there) with Boeing’s Randy Tinseth, VP Marketing, at the Pacific Northwest Aerospace Alliance conference today in Lynnwood (WA), and Tinseth’s barb that Airbus had a record year of 340 cancellations.
One hundred fifty of the A320ceo cancellations were swaps to A320neo orders, so the numbers weren’t as bad as numbers appeared, Pickup says. Read more
Boeing 757 MAX: why its operating economics does not work
By Bjorn Fehrm
Introduction
Feb 12, 2015: In a series of articles during the autumn we covered the replacement scenarios for Boeing’s 757-200 when used for long haul passenger operations. The series also included an interview with Boeing’s head of new airplane studies, Kourosh Hadi, director of product development at Boeing where he outlined what Boeing studied and why.
This week The Wall Street Journal published an article portraying that Boeing seriously considered launching a re-engined 757 as a response to Airbus A321LR. Boeing has since vehemently denied the story and we have given the reasons why it does not make sense for Boeing.
As a complement we show the operational economical analysis that we did at the time of our 757 articles, now updated to the exact modifications suggested by The WSJ, a new engine and new winglets paired with modern avionics.
PNAA Conference: Boeing’s Tinseth dismisses Aboulafia forecast of Airbus A320 dominance; firm ” no” on 757RE
Quotations are paraphrased.
Feb. 11, 2015: I don’t see a 60% market share for our competition (Airbus, single-aisle airplanes), says Randy Tinseth, VP Marketing, Boeing Commercial Airplanes, in his presentation today before the Pacific Northwest Aerospace Alliance in Lynnwood (WA).
Tinseth instead points to the 50/50 deliveries of the A320 v the 737 in 2014.
He was referring to Richard Aboulafia’s prediction that Airbus will have a 60% single-aisle market share through 2024.