Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Teamsters, Boeing have a new contract April 29, 2025
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
HOTR: Compensation wins Southwest order for MAX
By the Leeham News Team
March 29, 2021, © Leeham News: Southwest Airlines today announced an order for 100 Boeing 737-7 MAXes.
The order was expected. The carrier also considered the Airbus A220-300. But any prospect of diverging from the 50-year relationship with Boeing was at best a crapshoot.
Despite the flowering language in the press release, the key reasons are buried.
Airbus trails Boeing in US in-service airplanes but leads with backlog
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By Scott Hamilton
Introduction
March 29, 2021, © Leeham News: As airlines across the global struggle to recover from the COVID-19 pandemic, Airbus faces a weakened Boeing.
Some might argue Airbus has the advantage over Boeing, which is beset by a huge inventory of 737 MAXes and a growing number of undelivered 787s.
Others might argue that Boeing, desperate for cash, faced with billions of dollars of customer compensation claims and MAX whitetails, is willing to cut prices below levels Airbus will match.
There is anecdotal evidence Boeing is slashing MAX prices. Two high-profile campaigns in the US are illustrative. Last week, LNA examined bake-offs between Airbus and Boeing for Alaska Airlines and Southwest Airlines. United Airlines appeared to place an opportunistic order for 25 MAX 9 whitetails.
This week, LNA takes a deep dive into the competitive situation between Airbus and Boeing in the US.
Summary
- Adjusting for pre-pandemic in-service fleets, Airbus trails Boeing in the US but not by much for in the narrowbody sector.
- However, Boeing overwhelms Airbus in the widebody sector.
- Airbus currently has a lopsided lead in backlog orders for narrowbodies, but this lead is unlikely to hold.
- Airbus also currently leads in backlog orders for widebodies, but one large order is squishy.
The A350, Part 11: Can a standard A350-1000 fly the project Sunrise route?
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By Bjorn Fehrm
Introduction
March 25, 2021, © Leeham News: When Qantas announced the Airbus A350-1000 as the winner for project Sunrise over Boeing’s 777-8 December 2019, we did articles about the choice. We found that the A350-1000 could fly the toughest route, Sydney to London but with modifications.
Airbus has since told the press they can now do it with an improved standard A350-1000. We revisit the case to see how “standard” such an A350-1000 is.
A350-1000. Source: QANTAS
Summary
- The A350-1000 can fly the most challenging project Sunrise route, Sydney to London if it uses QANTAS special ultra long haul flight routings.
- Airbus has gradually improved the A350-1000 so that it can now fly the route with modest adaptations.
Did Airbus miss opportunities with Alaska, Southwest?
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By Scott Hamilton
Introduction
March 22, 2021, © Leeham News: Airbus lost an order from Alaska Airlines, which means the carrier will essentially revert to an all-Boeing fleet.
Alaska Airlines ordered more Boeing 737 MAXes instead of Airbus A321neos. Southwest Airlines appears ready to order the 737-7 MAX instead of Airbus A220-300s. Were these real opportunities? Photo by Boeing.
And despite the apparent high-profile loss of a potential order from Boeing loyalist Southwest Airlines, Airbus is holding its ground in the USA.
Did Airbus miss opportunities to gain ground?
It all depends on how you look at it.
Summary
- Alaska Airlines chose to eliminate the Airbus A319s and A320s inherited with the 2016 acquisition of Virgin America. It’s not going to retain the orders for A320neos. And it passed on ordering more A321neos when it recently placed a follow-on order for Boeing 737-9s.
- It looks all but sure Southwest Airlines will pass on ordering the Airbus A220-300 for its sub-150-seat fleet requirement. Boeing looks poised to win a big order from Southwest for the slow-selling 737-7 MAX.
- Neither outcome, however, was unexpected.
Pontifications: Embraer’s China ambitions
March 22, 2021, © Leeham News: Embraer wants to become a big player in China.
By Scott Hamilton
“We see a huge market potential there,” said Arjan Meijer, CEO of Embraer Commercial Aviation, in an interview with Nikkei Asia. The news outlet continued, “The company expects worldwide demand for 5,500 jets with up to 150 seats over the next 10 years. A third of that will come from Asia, with a large part of it from China, Meijer added.”
However, China presents risks and few rewards to companies wishing to gain a significant foothold. This is especially true for commercial aviation companies. China has high ambitions for the commercial aviation industry. Partnering with China in this sector produced more heartbreak than success.
Pontifications: AerCap and GECAS to combine — assessing the impact
By Scott Hamilton
March 15, 2021, © Leeham News: GE Corp.’s decision to sell its mega-leasing unit, GECAS, to AerCap represents a huge shift in commercial aviation.
For decades, GECAS was the largest lessor in the world. One of GE’s best profit centers, GECAS was a major source of financing to airlines. The lessor purchases and leases back airliners, as do most lessors, as well as initiating leases with orders received directly from the OEMs. GECAS’ scale was a magnitude or two larger than most competitors.
The closest competitor was International Lease Finance Corp., a unit of insurance giant AIG. ILFC’s leadership liked to boast the asset value of ILFC’s smaller fleet was greater than GECAS, which while larger had more older airplanes in its portfolio.
The A350, Part 9: The A350-1000 versus 777-300ER
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By Bjorn Fehrm
Introduction
March 11, 2021, © Leeham News: Last week, we started analyzing the Airbus A350-1000 and compared it with the Boeing 777-300ER.
We now fly the airplanes on a demanding route, close to their maximum range, the LAX to Hong Kong sector. How much better is the 14 years younger A350-1000?
Summary
- The A350-1000 is the logical replacement for a 777-300ER if a same capacity replacement is sought.
- The carbon-fiber structure, a more advanced wing, and newer engines give the A350-1000 convincing arguments for the change.
HOTR: Investors optimistic for Boeing. Are they too optimistic?
By the Leeham News Team
March 10, 2021, © Leeham News: Boeing’s recovery will be long, slow and painful.
But Boeing has been through long, slow and painful periods before.
Investors appear optimistic. The stock price has been rising since lows hit immediately after and throughout the pandemic.
The stock price is far off its high of $440 on March 1, 2019. March 1 was after the October 2018 Lion Air 737 MAX accident but nine days before the March 10, 2019, Ethiopian Airlines MAX crash. The price closed yesterday at $231, abut equal to where it was a year ago today.
Suppliers remain hunkered down as pandemic recovery may stall
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By Scott Hamilton
Introduction
March 8, 2021, © Leeham News: Aerospace suppliers continue to struggle even as passenger airlines begin to gingerly place new aircraft orders and Boeing resumes production of the 737 MAX.
Airbus continues to produce the A320, A330 and A350 at lower production rates than the pre-pandemic era. Boeing is at low-rate production for the 737 MAX, after a 20-month grounding. The 777 is down to 2/mo and the 787 goes to 5/mo this month. At least two aerospace analysts on Wall Street think the 787 rate could come down further.
Airbus and Boeing each received a handful of orders so far this year.
But suppliers continue to struggle.
Summary
- Airbus, Boeing continue to extend payments.
- Smaller suppliers seek bankruptcies.
- Larger suppliers remain in “hunker down” mode.
HOTR: Alaska begins service with 737 MAX
- Alaska likely to cancel A320neo order. Details below.
By the Leeham News Team
March 1, 2021, © Leeham News: Alaska Airlines today launched its first service with the 737 MAX.
The carrier’s first flight was flight AS 482 from Seattle to San Diego, operated with a 737-9.
Alaska is the fourth US airline to operate the MAX. It is the third to use it in service since the type was recertified in November by the Federal Aviation Administration. American and United airlines returned their MAXes to service earlier. Southwest Airlines followed later this month. The Seattle-based airline hadn’t taken delivery of the MAX before the March 13, 2019 grounding.
Alaska is the second carrier to place a follow-on order for the MAX, after Ryanair, following recertification by the FAA. The MAX 9 will replace Alaska’s remaining Airbus A319/320ceos by 2024. Alaska continues to operate 10 Airbus A321neos and still has 30 A320neos on order, all from its acquisition of Virgin America in December 2016. In its annual 10K filing, Feb. 26, with the Securities and Exchange Commission, Alaska said, “At this time, we do not expect to take delivery of these 30 Airbus aircraft.” Alaska disclosed that $15m in deposits for the A320neo order, made by Virgin America, are “not likely to be recoverable.”
Alaska Airlines Boeing 737-9. Source: Woody’s Aeroimages.
The carrier originally ordered the 737-8. Officials later swapped these orders for the larger MAX 9. Alaska’s 737-900ERs are configured with 178 seats compared with the 737-800’s 159 seats. The advertised range of the MAX 9 is 3,550 statute miles with one auxiliary fuel tank. The tank adds about 270 miles to the range of the base specification.
Boeing doesn’t break out the sales of the MAX sub-types. There are an estimated 250-300 orders for the MAX 9, a “tweener” airplane between the MAX 8 and MAX 10.