Leeham News and Analysis
There's more to real news than a news release.
JP Morgan aerospace analyst Joe Nadol dies in train-car collision
It is shocking and very sad news that the aerospace analyst for JP Morgan, Joe Nadol, died in that horrific Metro North-SUV crash Tuesday north of New York City.
I knew Joe professionally, though casually, and regarded him as one of the better aerospace analysts. He covered Boeing and was the first analyst to predict the 787 would be late.
All of us who knew Joe must be stunned by this news. I know I am.
Nadol was just 42. He is survived by his widow and three young children.
By Scott Hamilton
Exclusive: Emirates Airlines gets pitch for 100 Boeing 747-8s
- Update, 3:30pm PST: For those who may not be adept at reading literally what was written, we did not say Boeing made the pitch.
Feb. 4, 2015: In a pitch designed to save the Boeing 747-8 and simultaneously kill the prospect of an Airbus A380neo, Emirates Airlines has received a pitch for 100 of the slow-selling Boeing, two sources familiar with the situation tell Leeham News and Comment (LNC). This is isn’t yet a formal proposal, as far as we know.
Tim Clark, president of Emirates, said he would buy 100 A380s if Airbus re-engined and launched the neo. The neo would use the new Rolls-Royce Advance engine, according to two different sources. Neither Pratt & Whitney nor GE Aviation, which dominate the current A380 engine market share with its joint venture Engine Alliance GP7200, are interested in developing a new engine for the prospective A380neo, according to public statements by both companies. PW doesn’t offer an engine alone that could be adapted to the size required for the A380neo. GE’s GEnx engine, used on the Boeing 787, is in the thrust and size bracket but would only improve the efficiency with 4-5%, thus not worth the change effort. The smaller version of the GEnx is on the 747-8. Read more
Airbus/Boeing production rates forecast through 2020
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Introduction
Feb. 3, 2015: Boeing out-delivered Airbus in 2014, for the second year in a row, as the 787 program improved in delivery rates and before the A350 made its first delivery in December.
Topping Airbus in deliveries allowed Boeing to claim it is the world’s leading 
commercial airplane manufacturer. By the delivery metric, Boeing is. By orders, Airbus came in first again, maintaining a decade-long lead.
The A350 ramps up its production this year even as the A330ceo rate begins to come down at the end of the year and further next year. Boeing vows to maintain the current production rate of the 777 Classic at 100/yr. The 747-8 rate is declining. And both companies are ramping up rates of the single-aisle airplanes.
The production wars continue.
Summary
- Airbus is forecast to out-produce Boeing by 2018.
- Boeing’s ramp-up of the 737 line will drive the delivery stream.
- The 737 rate may hit 63/mo by 2020.
- Airbus will likely match.
Triumph Group loss on 747-8 gives more clues on program status
Triumph Group revealed an unexpectedly large forward loss related to the ailing Boeing 747-8 program on its fiscal third quarter financial results last week.
The forward loss was triggered by Boeing’s decision in December to reduce the production rate from 1.5/mo to 1.3/mo from September this year.
Investment bank Canaccord had this to say in its note following Triumph’s earnings call:
Airbus A400M; how good and how late?
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By Bjorn Fehrm
Introduction
01 Feb 2015: Six years ago Tom Enders, then-CEO for Airbus (when the parent was named EADS), threatened to stop the A400M project. He then played hardball to get eight European states to understand they had to pay 5bn Euro more or get no plane. Airbus existence could be threatened by a project that its management when the program was launch (CEO Jean Pierson) did not want but that the politicians convinced Pierson’s successor, Noel Forgeard, to do.
Airbus A400M Atlas landing at Farnborough Airshow. Source: Wikipedia.
Now Tom Enders is CEO of Airbus Group and has to apologize to the same governments that he struck a deal with then to finish the project if Airbus got the money and a consent to three years of delays. Now Airbus can no longer fulfill the terms and the airplane is still falling short of performance specifications. Deliveries have been delayed further and promised capabilities will be delivered later than said. Like then, heads are rolling at Airbus and tighter control is being applied.
Summary
- The A400M rests between the Lockheed Martin C-130 and the Boeing C-17.
- European countries need an airlifter for military and humanitarian missions.
- Dirt airstrip capability is needed.
- The program will take longer to complete and this time Airbus has to pay.
A350-1000 gets upgrade to 387 seats; we analyse the consequences
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By Bjorn Fehrm
Introduction
28 Jan 2015: Exactly one week after the first Airbus A350 started regular service between Doha and Frankfurt with Qatar Airways (on 15th of January), upgrades to the A350 capacity was announced by Airbus in a presentation to German investors. The forthcoming upgrade was hinted to media at Airbus annual press conference two weeks ago by Didier Evrard, Airbus head of programs, but no details were given at the time.
The changes were now spelled out more in detail, including pictures of the changed sections of the cabin. Having known about these changes for some time, we can now present the goals of these changes and make a first assessment of how they affect the competitive positioning of the A350.
Summary:
- The improvement program brings the Cabin-Flex lavatories to the A350 interior catalog, enabling smaller lavatory footprint and thereby increased seating densities.
- Airbus has also reworked galleys around the third and fourth door pairs, thereby freeing up galley area in other parts of the cabin.
- Taken together, Airbus claims an 18 seat improvement for the A350-1000, making it a 387 seater in a two class configuration.
- We apply the changes in our cabin model and examines how this will change the competitive landscape between Airbus A350 models and Boeing’s 787 and 777 families.
USAF picks 747-8 for new AF One, first delivery in 2018; end of program likely
The US Air Force has picked the Boeing 747-8 as the replacement for the 747-200-based Air Force One, reports Bloomberg News. The decision comes as absolutely no surprise.
The USAF selected the Boeing 747-8 as the next Air Force One, replacing the Boeing 747-200Bs used since the Bush 41 Administration.
The first of two 747-8s will be delivered in 2018, Bloomberg reports. The new airplanes won’t enter service until 2023. There are just 36 unfilled orders for the 747-8: 24 for the passenger model and 12 for the freighter. At the current rate of 18/yr, this is two years of backlog. At the reduced rate of 16/yr, this is 2 yrs 3 mos. Read more
Boeing earnings conference call: We’re in better and stronger position than ever, says McNerney
- See here for initial analyst reaction before the earnings call.
Boeing is entering 2015 better and stronger than at any time in recent history, said CEO Jim McNerney at the start of the Boeing earnings call today on 2014 financial results.
“We’ve completed a comprehensive refresh” of the product line with the 737 MAX, 777X, 787-10 and 737 MAX 200, he said. McNerney said that from lessons learned, the company has de-risked product strategy going forward. Boeing has also obtained long-term labor contract stability.
“We are equally committed to breaking the cost curve” on new airplane development programs, McNerney said.
McNerney said the outlook for the commercial aviation business environment remains positive. Boeing now has an eight year backlog as present rates.
Despite today’s fuel price environment, McNerney sees a continued positive outlook for deliveries and new orders. A combination of growth and replacement will continue to drive orders. He continues to see 40-60 777 Classic orders per year to successfully fill the production gap to EIS of the 777X.