Leeham News and Analysis
There's more to real news than a news release.
Washington State to roll out 777X retention plan; here’s what needs to be done
Washington Gov. Jay Inslee will announce today his plan to keep the Boeing 777X assembly here, at the Everett plant where the current 777 series is built.
Inslee previously has said the State needs to pass some additional gas taxes to improve the highway transportation infrastructure. We expect him to talk about this further.
Improving STEM (Science, Technology, Engineering and Math) education has been a goal of Inslee and before him Gov. Christine Gregoire, so we expect more of this.
Tax breaks will likely be a part of his plan. One tax in particular has to go: a 1.9% tax on goods being imported into the Port of Everett; South Carolina doesn’t have this (and, we will guess, neither does Alabama, but we don’t know if it does or doesn’t.)
More of the same.
Beyond these three general areas, we have no idea what Inslee will offer. But we know what is needed for Washington, and these are things that won’t happen.
How Boeing planned installing 787 fix in the field-a worldwide exclusive for CNN
Boeing held at least three press conferences to explain the battery system fix for its 787 and it dropped hints here and there about the teams going into the field to install the fix over a five day period per airplane, but officials never revealed the planning that went into the world-wide effort.
Until now.
We sat down with Boeing Commercial Aviation Services (CAS) last week for a world-wide exclusive on assignment for CNN International to get the story about the planning, the logistics, the mobilization not only of the teams of 300 that deployed into the field but for the first time learned of how Boeing drew from across the enterprise–the “One Boeing–” in greater detail than has been previously revealed.
Sizing up the 777X vs Airbus–and Boeing
It was no surprise that Boeing’s Board of Directors authorized the sales force to begin showing the 777X to customers for sale, as opposed to the concepts. As we’ve reported (and as did others), this move was expected this week. Entry-into-Service (EIS) is slated for late 2019, and will be driven in part by development of the GE9X engine.
The 777X replaces the 777-200LR and 777-300ER, with the 777-9X at nominally 406 passengers giving Boeing a monopoly position similar to that currently enjoyed by the -300ER. The 8X/8LX is 353 passengers.
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The 777-9X falls just within the Very Large Airplane category of +400 passengers. We believe this will sound the death knell for the struggling 747-8I. The 747-8 nominally carries 467 passengers but Lufthansa, the only operator so far, configures the airplane for 362-386. The 777-9X will likely be far fewer than 406 in Lufthansa’s configuration but plane mile costs should be far superior to the 748. In high density configuration, the 9X will be solidly in VLA territory.
Update, 900am PDT: Boeing dropped five orders for the 747-8F from ailing lessor Dubai Aerospace. The 8F backlog is now down to 33, plus 26 for the 8I.
Sizing up engine market share on the A320 family
While competition between Airbus and Boeing snares nearly all the headlines and all the “sex,” competition for engine orders is less sexy and receives less attention.
Part of this is because of the increasing trend toward sole-sourcing. The Boeing 737 has been sole-sourced by CFM International since the creation of what is now called the Classic series: the 737-300/400/500. Pratt & Whitney believed at the time Boeing was upgrading the 737-200 that airplanes were up-gauging and bet its future on the Boeing 757 size. It was one of the classic corporate blunders of all time.
Shut out of the 737, P&W joined with Rolls-Royce and MTU to build the International Aero Engine V2500 for the Airbus A320 family. IAE came to the table late, giving CFM a solid head start on the program with a variant of the CFM 56 that powers the 737 Classic and later the 737 NG.
IAE trails to this day, but has done a remarkable job of coming from behind. CFM tends to be favored on the A319 and A320 while IAE is the preferred engine on the larger A321. IAE offers more thrust and better economics on the A321 while the CFM has better economics for the smaller Airbuses. CFM’s reliability is legendary and tends to be better than the V2500.
The blog PDXlight has done a marvelous job of dissecting the engine market share of the A320 family for the New Engine Option. We asked PDXlight to do the same exclusively for us for the A320ceo family. The results are below the jump.
Boeing Board OKs offering 777X
It’s been the worst kept secret of the past few weeks: the Boeing Board of Directors has authorized offering the 777X to airlines. Dominic Gates has this story, and more are coming from The Wall Street Journal, The New York Times and others.
Update, 6pm PDT:
Here’s the WSJ article (subscription may be required).
Here’s the NYT article (we got this off Google News so it should be readily available to anyone).
Update, 7pm PDT: Dominic Gates has more information, including where the 777X might be built
Odds and Ends: 747-400 crash on tape; Repairing the 787 brand; Another 747 doom-and-gloom story
This is dramatic video on the National Air Cargo Boeing 747-400F crash at a US AFB in Afghanistan.
Repairing the 787 brand: We’ve noted previously the brand damage Boeing has to deal with following the 787 issues. This article reports that Boeing has taken out full page ads to repair the brand.
747 Doom and Gloom: We recently linked the post to the Puget Sound Business Journal story casting a dim picture for the future of the Boeing 747-8. The Wall Street Journal follows up with this equally doom-and-gloom piece.
Odds and Ends: Change fees; Two ex-NTSB members rap Boeing, FAA, current NTSB
About those change fees: Last week we reported from the US Airways Media Day and among the topics was that of change fees. US Airways matched United Airlines to charge $200 if you change your ticket. Here’s an article about how to deal with these fees.
Here’s another article about change fees, and how they’ve soared in recent times. If you think fees in the US are bad, look at the table and note in particular Ryanair’s fees–this carrier is notorious for charge for everything, and at steep prices, something subject to this funny video:
[youtube http://www.youtube.com/watch?v=ZAg0lUYHHFc&w=560&h=315]
Why are fees becoming so prevalent? Because this is where airlines are largely making their profits. US Airways said last week it expects to earn $600m from fees this year. This is more than its entire profit from 2012. This means airline operations lose money and profits come from the fees.
Also on US Airways: we also reported last week about some outstanding labor issues between the IAM at US Air and the TWU and American Airlines. An agreement over the weekend was reached about merging these two workforces under one union banner, according to Terry Maxon at the Dallas Morning News.
Ex-Members Rap FAA, NTSB: We bet they won’t be invited to a reunion. James Hall and John Goglia, former members of the National Transportation Safety Board, had harsh words to say about the FAA, Boeing and the NTSB over the certification of the Boeing 787 and the subsequent fix. Hall said the FAA needed to recertify the airplane, not just the battery.
Ethiopian Airlines resumed service with the 787 over the weekend, while Japan’s ANA engaged in a proving flight. This Wall Street Journal article (via Google News, so everyone should be able to read it) references additional measures required by Japan.