Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New aircraft technologies. Part 31. Detailed design -3 September 22, 2023
- The Airliner Production Problem, Part 2 September 21, 2023
- Pontifications: IAM 751 gearing up for Boeing contract talks in 2024 September 19, 2023
- Analysis: Labor issues continue to challenge aerospace industry September 18, 2023
- GE Aero sees growth through 2026, despite supply chain snags September 15, 2023
KMC’s “low risk” 777 P2F approach struggles to get traction
Subscription Required
By Judson Rollins
August 21, 2023, © Leeham News: Converting Boeing 777-300ER passenger aircraft to freighters has been fraught with challenges. One need only ask longtime P2F provider IAI, whose debut -300ER freighter has flown only once – nearly five months ago. Even Boeing shelved its own P2F plans for lack of a viable business case.
Photo credit: KMC.
Kansas Modification Center (KMC), launched just two years ago, believes it offers a P2F concept with a smoother path to certification. KMC says its competitive edge is a forward cargo door, requiring less structural reinforcement and thus significant weight savings versus an aft door.
KMC believes it will receive FAA type certification by December 2024, with European regulator EASA expected to follow in early 2025.
LNA received a program briefing from Jorge Della Costa, KMC’s CEO, and Eric Kivett, program manager at contractor National Institute for Aviation Research (NIAR) WERX. NIAR WERX, a unit of Wichita State University, provides engineering and modification services for KMC’s forthcoming 777-300ERCF.
Summary
- Front loading door saves weight but may add loading challenges.
- Lead engineering partner brings prior conversion experience.
- Local partnerships, short supply chain reduce production risk.
- Certification risk mitigated by human factors planning, not modifying software.
- Lack of sales, capital are open questions.
P2F conversion constrained by feedstock, certification issues
Subscription Required
By Judson Rollins
July 3, 2023, © Leeham News: As the supply chain chaos of the past two years finally winds down, the air cargo industry is trying to prepare for future growth.
IAI’s first 777 converted freighter, intended for Kalitta Air, has not flown since its initial testing flight on March 24. Source: IAI.
However, in an ironic twist, the industry’s near-to-intermediate term runway is constrained by some forces that propelled its supernormal profitability during the pandemic and recovery.
Thanks to growth in e-commerce, many industry observers revised their long-term growth forecasts upward. Cargo traffic growth estimates vary widely, from Cirium’s conservative 20-year expectation of 3.0% per year to Boeing’s optimistic call for 4.1% annually through 2042.
This year’s demand environment is less rosy as global trade falters, seaport backlogs have mostly cleared, shippers of high-value industrial goods suffer from microchip and other key commodity shortages, and recovering passenger airline service drives a glut of lower-deck “belly” capacity on most trade lanes.
The International Air Transport Association (IATA) recently said it expects air cargo demand to fall by 3.8% and revenues to contract by one-third for the full year. Cargo volumes were already down 5.3% year-over-year through April, said IATA.
Summary
- Express carriers are most exposed to short-term pain, but long-run prospects are brighter.
- Non-express carriers continue to be hard hit by excess capacity.
- Freighter conversion feedstock supply is tight.
- 777 P2F conversion slowed by possible certification issues; Boeing poised to sell more 777Fs?
Repost: Exclusive Interview with Joe Sutter’s grandson as Last Boeing 747 leaves Everett factory
Update, Jan. 30, 2023: The last Boeing 747 will be delivered to Atlas Air tomorrow. Below is the story LNA posted on Dec. 6, 2022, when the airplane was ready to roll out of the Everett factory. In it, we exclusively interviewed the grandson of Joe Sutter, the lead engineer of the 747 design.
Cargo carrier Atlas Air is taking the final 747-8Fs, the last of a legendary line of Boeing jumbo jets./Atlas Air photo
By Bryan Corliss
Dec. 6, 2022, © Leeham News: The final Boeing 747, line No. 1,574, rolls out of Boeing’s Everett factory tonight. The plane was built for Atlas Air, which is scheduled to take delivery in early 2023 – almost 52 years after the first 747 entered service with Pan Am in January 1970.
“It’s kind of a sad occasion,” said Jon Sutter, the grandson of legendary Boeing aircraft designer Joe Sutter, the father of the 747.
Jon Sutter – who now works at Boeing in the same Boeing Field building where his grandfather designed the Queen of the Skies – hadn’t been born when the first 747 flew.
And his grandfather, who passed away in 2016, didn’t live to see the end of the program he’s most closely associated with.
However, even with the end of the 747 program, Joe Sutter’s legacy lives on, his grandson said.
“His baby, Boeing, is still going,” Jon Sutter said in a recent interview with LNA. “You can see his influence in every other plane out there.”
SUMMARY:
- First-flight pilots called it a “two-finger” airplane
- 747 was Plan B after SST was canceled
- Last 747s sport special decal honoring Sutter
- 747 survived the Boeing Bust
- 747-8 was final iteration
- ‘Hard to imagine the world without it’
Read more
New air cargo operators to drive freighter demand, Boeing says
By Bryan Corliss
Nov. 9, 2022, © Leeham News: The Boeing Co. projects the world’s air cargo fleet will grow by 80% in the next 20 years, as new operators rush to meet demand caused by a global boom in e-commerce.
This will translate into orders for nearly 2,800 new and converted freighters by 2041, said Darren Hulst, Boeing’s vice president of commercial marketing.
Boeing 747-8F jets at Boeing Field, Seattle, during initial flight testing in 2011. Bryan Corliss photo.
As many as 40 new companies are getting into the air cargo market, ranging from start-ups to traditional shippers diversifying into the air cargo market, Hulst said.
“Cargo has been, relatively, the bright spot in aviation since the beginning of the pandemic,” he said during a briefing with reporters prior to today’s International Air Cargo Association forum in Miami..
SUMMARY
- Cargo market hanging on to most pandemic gains
- Demand strong for dedicated cargo jets
- Boeing doesn’t see need to replace 747-8F until ‘mid-century’
Read more
Dual or Single Aisle for Long Haul, Part 3
Subscription Required
By Bjorn Fehrm
Introduction
August 4, 2022, © Leeham News: We’ve been analyzing whether flying long-haul is better with a single-aisle or with a widebody under identical conditions.
To have equal conditions, we fly between Milano and New York at the practical range limit for our single aisle, Airbus A321XLR. We finished the analysis of Cash Operating Costs; now, we look at passenger and cargo yields and the generated margins on the trips.
Summary
- The margins with identical conditions point the same way as the Cash Costs.
- Any cargo traffic on the route will favor the widebody.
Boeing sees long-term demand bouncing back after pandemic
July 16, 2022, © Leeham News: After years of market turmoil, Boeing and Airbus see brighter skies–and bigger order backlogs–ahead. Both companies maintained confidence that demand for aircraft would bounce back as the COVID-19 pandemic ebbed. Passenger traffic and aircraft utilization seem to back up their optimism. Traffic is bouncing back despite short-term economic concerns, a pandemic that is still smoldering and Russia’s invasion of Ukraine.
Boeing projects demand for 39,050 new commercial aircraft, excluding regional jets, over the next two decades, according to its Current Market Outlook, which it released Saturday. The company’s forecast is in line with Airbus’ forecast of demand for 39,500 aircraft. Single-aisle aircraft make up three-quarters of demand in both companies’ outlooks. Boeing is slightly more bullish on passenger widebody demand.
Sustainability is an increasingly important factor in Boeing’s market outlook. It is also a relatively new variable, and how much it will shape market demand and in what ways is not very clear.
Best business; Under-floor Cargo or Dedicated Freighter. Part 4.
Subscription Required
By Bjorn Fehrm
Introduction
July 7, 2022, © Leeham News: What is the best business? To transport cargo below the floor in passenger airliners or dedicated freighter aircraft?
We dug deeper into the cost of flying air freight from Shanghai to Denver last week, forwarded as a below-floor pallet on a passenger jet or via a dedicated freighter.
The cost advantage changed from passenger jet to freighter when we looked deeper into the allocatable cost. Now we finish by analyzing why cargo airlines are consistently more profitable than passenger airlines.
Summary
- Freight airlines generate lower margins from operations than passenger airlines.
- Still, they are more profitable. We explain how.
Best business; Under-floor Cargo or Dedicated Freighter. Part 3.
Subscription Required
By Bjorn Fehrm
Introduction
June 30, 2022, © Leeham News: What is the best business? To transport cargo below the floor in passenger airliners or dedicated freighter aircraft?
We analyzed the cost of flying air freight from Shanghai to Denver last week. It was forwarded as a below-floor pallet or on a dedicated freighter.
We found the allocatable fuel costs were lower when piggybacking on passenger aircraft, but it’s not the whole story. Now we go a level deeper.
Summary
- For fuel costs, the belly cargo alternative was the lower-cost alternative.
- This changed when we added other operational costs.
Best business; Under-floor Cargo or Dedicated Freighter. Part 2.
Subscription Required
By Bjorn Fehrm
Introduction
June 23, 2022, © Leeham News: What is the best business: to transport cargo below the floor in passenger airliners or with dedicated freighter aircraft?
We could see in last week’s article that air freight companies have generally been more profitable over the last decade than passenger airlines. Why?
We continue the analysis by looking at the cost of flying cargo in passenger airliner bellies versus dedicated freighters.
Summary
- At today’s high fuel prices, transporting cargo in a passenger aircraft’s belly is cheaper than on freighters when we do a first-level analysis.
- Does this change when we go deeper?
Best business; Under-floor Cargo or Dedicated Freighter?
Subscription Required
By Bjorn Fehrm
Introduction
June 16, 2022, © Leeham News: What is the best business; to transport cargo below the floor in passenger airliners or dedicated freighter aircraft?
The market clearly says both, as this is the state of affairs. Market economy says a business will find its optimal form, and it’s about fifty-fifty now. But what are the plus and minuses of these two very different ways of transporting cargo, and why do we have the present situation?
We search for answers by looking at the transport fundamentals and comparing costs with revenues.
Summary
- About half of the world’s cargo flies in the bellies of passenger aircraft, and the other half flies on dedicated freighters.
- What are the factors that have created this division, and will it change?