Leeham News and Analysis

There's more to real news than a news release.

There's more to real news than a news release.

Vote for the Top Commercial Aviation stories of 2013

This is self-explanatory. We’ll publish the results December 31.

Feel free to nominate other stories in Reader Comments.

 38 Comments

 Posted on December 23, 2013 by

 Airbus, Airlines, American Airlines, Boeing, Bombardier, CSeries, Embraer, IAM 751, International Association of Machinists, US Airways

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Odds and End: COMAC’s C919; IAM-Boeing, continued; CRJ future (Update with Ray Conner letter)

Update: Ray Conner, CEO of Boeing Commercial Airplanes, issued a letter to employees today. It is reprinted in full below the jump.

Original Post:

COMAC’s C919: This is China’s entry to compete with Airbus and Boeing in the 150-175 seat market sector. Aviation Week has a long report about the difficulties COMAC will likely have getting certified in the West and suggests that the airplane will largely be confined to flying by Chinese airlines.

IAM-Boeing, continued: In what has become a daily ritual, here is more news about the ongoing IAM-Boeing saga.

The case for the CRJ: Aviation Week has an interview with Bombardier’s Guy Hachey about the future of the CRJ. Flight Global has this story about the anticipated prospects of the CSeries in China.

Read more

 20 Comments

 Posted on December 17, 2013 by

 Airbus, Boeing, Bombardier, Comac, CSeries

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Odds and Ends: EMB, BBD split AA order; WTO on Airbus subsidies; IAM, Boeing bargaining; KC-46A

EMB, BBD split American order: Embraer took the lion’s share of the long-awaited order from American Airlines for regional jets. EMB won 60 firm orders and 90 options for the E-175 and Bombardier won 30+40 CRJ-900s. Flight Global points out that none seem to be going to American Eagle.

The order is welcome by both OEMs, which had gaps in their respective production lines.

WTO on Airbus subsidies: Bloomberg News reports that the World Trade Organization won’t rule until the end of next year on a US complaint that Airbus failed to comply with WTO findings that it received illegal subsidies. (No link available).

Bloomberg writes, The EU says it had secured repayment of some $2.3 billion in launch-aid loans and terminated the launch-aid loan agreements in question, while also addressing subsidies given in the form of capital contributions, infrastructure support and regional aid.(Emphasis added.)

     The U.S. counters that the largest launch-aid subsidies—for the A380, Airbus’s super jumbo jet—remain in place and that the actions the EU claims to have taken with respect to earlier subsidies “appear to do nothing to withdraw them, or to remove their adverse effects.”

As we’ve written, Boeing is now requesting essentially the same thing in its Request for Proposals for the 777X site selection.

IAM, Boeing bargaining: It’s a relief to see Boeing and the International Association of Machinists District 751 bargaining for a new contract amendment for the 777X site selection, but no deal is imminent. The Seattle Times reports things could move quickly, however.

First KC-46A airframe, wings joined: Aviation Week has this story about the progress of Boeing’s KC-46A tanker program.

 7 Comments

 Posted on December 12, 2013 by

 air force tanker, Airbus, American Airlines, Boeing, Bombardier, Embraer

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Assessing the Air Canada 737 order: factors that likely played a role

How did Boeing win the Air Canada mainline 150-200 seat jet order when only a couple of weeks ago Flight Global reported the Airbus won the deal?

We, too, heard that Airbus seemed to be the favorite, but the information was soft. We’re not rapping Flight Global—undoubtedly it was confident in its sourcing, but this just shows that a situation can change dramatically and quickly.

We’ve been following the competition for months, behind the scenes, and here are factors we understood that were involved.

Read more

 31 Comments

 Posted on December 11, 2013 by

 Airbus, Boeing, Bombardier, CSeries, Embraer, GE Aviation, Pratt & Whitney

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Air Canada snubs Airbus, orders 737s; keeps some of Embraer portion open

Air Canada snubbed Airbus with its mainline jet fleet renewal and ordered up to 109 Boeing 737 MAXes. The initial order is for the 8 and 8 MAX, with the ability to swap for the 7 MAX. The deal includes the provision for Boeing to purchase up to 20 Embraer E-190s, which would be replaced by the 7 MAX, apparently.

But Air Canada is keeping open the prospect of replacing the other 25 E-190s with a new jet or to keep operating them. Bombardier hopes to win this segment of the order.

This is a big win for Boeing and one of the rare times Boeing has displaced Airbus in the MAX v NEO competition of an incumbent Airbus operator.

The Air Canada press release is below the jump.

Read more

 39 Comments

 Posted on December 11, 2013 by

 Airbus, Boeing, Bombardier, CSeries, Embraer

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Odds and Ends: From EADS’ Investors’ Day; Illinois and 777X; Air Canada; LOT gets $33m from Boeing

From EADS’ Investors Day 1: Airbus parent EADS is having two days worth of briefings for aerospace analysts. Here’s initial news coverage from Day 1:

Reuters: EADS strategy stresses Airbus

Reuters: EADS IDs new dividend policy, A350 target

Illinois and 777X: Add the Prairie State to those submitting bids to Boeing for the 777X assembly site. Illinois was previously not included in any list that we saw.

Air Canada: The airline’s Board of Directors meets today to ratify staff recommendations to replace the Airbus A319/320/321 fleet. Airbus and Boeing are competing with their A320neo and 737 MAX families. This competition is said to be only for the 150-200 seat sector. A separate decision for the 100-149 seat sector is expected to come next year. Bombardier hopes to win that part of the deal.

Update, 10:30 PST: The Wall Street Journal says Air Canada and Boeing are negotiating a deal for 50 737 MAXes.

Update, 11:15am PST:

LOT gets $33m from Boeing: Reuters reports that LOT Polish Airlines will receive $33m from Boeing for the 787 problems. Payments will be in cash, the news agency says.

 5 Comments

 Posted on December 11, 2013 by

 Airbus, Airlines, Bombardier, CSeries, EADS, Embraer

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Key events Dec. 10-12: Boeing, EADS, Air Canada

There are some key events to follow today through Thursday:

December 10: The Requests for Proposals for the site selection of the 777X are due into Boeing today. Media will be trying to find details, but Boeing certainly won’t be talking. Nor do we expect states to be doing much talking, either.

Boeing says there will be a decision early next year; we are hearing the end of January, but this information is very soft.

December 11: EADS, parent of Airbus, begins two days of its Global Investors Day briefings.

Air Canada’s Board of Directors is to meet to decide on replacing its large, aging fleet of Airbus A320/321s. Airbus and Boeing are bidding. Flight Global earlier reported staff had selected the Airbus, but Air Canada denied a decision had been made. But, as with all denials, this could be carefully crafted: the Board hadn’t approved a deal, so no “decision” had been made.

We understand, but are not 100% certain, that the fleet renewal for the 100-149 seat sector remains open. This means Bombardier and its CSeries could still win a deal–or Air Canada may decide to retain its Embraer E-190 fleet.

December 12: EADS’ investors day continues, with guidance and information about the next 12 months and beyond for Airbus.

Doug Harned of Bernstein Research issued a note Monday listing a series of questions for EADS’ officials; we couldn’t sum it up better:

  1. What is the A350 development and production outlook?
  2. How large are A350 losses likely to be in 2015? [NB: EADS/Airbus writes off development costs in the year incurred, unlike Boeing which uses program accounting to spread costs. Editor.]
  3. Will Airbus hit its goal of 10% margins, ex-A350, in 2015?
  4. Can Airbus grow and sustain the A380 production?
  5. When will Airbus take up rates on the A320neo?
  6. What is the outlook for A330 deliveries?

 11 Comments

 Posted on December 10, 2013 by

 Airbus, Boeing, Bombardier, CSeries, Embraer

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Odds and Ends: Alaska strikes back; boost for Q400; Airbus CEO speaks; Groveling

Alaska strikes back: Alaska Airlines has finally struck back at Delta Air Lines, which has been announcing loads of new service into Alaska’s Seattle hub. Alaska announced this morning:

Alaska Airlines will begin daily nonstop service between Salt Lake City and Portland, Ore., Los Angeles, San Diego and San Jose, Calif., starting June 9, and will add a third nonstop flight to its existing service between Salt Lake City and Seattle. Sale fares on the new flights will be available for booking Tuesday, Dec. 10.

Salt Lake City is a major Delta hub.

Boost for Q400: Bombardier inked a Letter of Intent for 30 firm orders for the Q400 turbo-props with Nantong Tongzhou Bay Aviation Industry Co., Ltd. Nantong plans to launch commercial airline service in China through a new carrier called Sutong Airlines.

Airbus CEO speaks: Arabian Business has a long interview with Airbus CEO Fabrice Bregier. Once you get past the fluff, there is some interesting information.

Groveling: This story via ABC has nothing new but we love the headline. Add Georgia to the list of grovelers.

This article discusses the prospects of Huntsville (AL) in the competition for Boeing’s 777X assembly site.

The IAM 837 union head at Boeing’s plant in St. Louis has reversed course (and declared a news blackout). More goofiness from the International Association of Machinists.

 24 Comments

 Posted on December 6, 2013 by

 Airbus, Airlines, Alaska Airlines, Boeing, Bombardier

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Odds and Ends: Attempts to bring Boeing, IAM together; Bombardier changes gears;

Boeing/IAM attempts: Efforts are underway to bring Boeing and IAM 751 back to the table, reports The Everett Herald. The news is not unexpected; we wrote upon the IAM’s rejection of the Boeing contract offer in connection with the 777X site location that efforts were sure to come. The Herald reports who is trying to bring the parties back to the table, and has some details about the attempt.

But as yet, Boeing is not coming back, although 751 leaders are willing to return, The Herald reports. Notably in the article, Alex Pietsch, director of Washington  State’s aerospace department, is “not optimistic,” but only “hopeful.”

Efforts by other states to win Boeing’s business are accelerating. Bloomberg neatly summarizes this part of the story.

Bombardier changes gears: Bombardier changed gears yesterday when it pushed Chet Fuller out as head of sales for CSeries and replaced him with the head of its business aircraft division. The Montreal Gazette has a series of reactions to the move.

Meanwhile, a conditional order for up to 30 CS100s may be in jeopardy. The Toronto City Council appears ready to reject a request for an early decision on whether to extend the runway at the downtown Billy Bishop Airport and alter restrictions to commercial jet traffic, reports the Toronto Globe and Mail. Porter Airlines, the dominate carrier at the airport, made the request and placed the order, conditional on Toronto and the federal government agreeing to changes at the airport and its regulatory controls.

Aviation Week reports on why CSeries has flown fewer flights than other test programs, as well as the timing to reevaluate the entry-into-service.

 5 Comments

 Posted on December 4, 2013 by

 Boeing, Bombardier, CSeries

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Odds and Ends: Pilot’s view of Dreamlifter event; Ethiopian 787 repair; more on IAM; Billy Bishop Airport

A pilot’s look at Dreamlifter incident: A pilot provides some perspective how the Atlas Air crew may have landed the 747 Dreamlifter at the wrong airport in Wichita (KS) last week.

Ethiopian 787 repair: Aviation Week reports that Boeing is about 60% complete with the repair of the Ethiopian Airlines 787 damaged by fire earlier this year.

More on IAM: A Tacoma News Tribune columnist takes an analytical look at the IAM 751 vote rejecting the Boeing 777X contract.

The Missouri Times reports that IAM District 837, which represents workers at Boeing’s St. Louis plant, is maybe considering the same labor pact IAM 751 (Seattle) rejected.

Toronto may delay City Airport decision: The Toronto City Council may delay approving the Porter Airlines request to extend the runway at Billy Bishop Airport, aka City Airport. There are several reasons, including the fact that the Bombardier CSeries flight testing is still in its early stages. Porter has a conditional order for up to 30 CS100s, but the condition is that Toronto change its rules to allow commercial jets at the airport and extend the runway. The CS100’sa noise footprint is a critical issue, and this won’t be certified until at least May, according to The National Post. The deputy mayor of Toronto nonetheless urges a vote next month.

Humpback Whale: It’s not aviation, but this YouTube video of an encounter (not ours) of a humpback whale is extraordinary.

[youtube=http://www.youtube.com/watch?v=SQBxGQKYqkE&w=560&h=315]

 10 Comments

 Posted on November 28, 2013 by

 Boeing, Bombardier, CSeries

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