Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Pontifications: Boeing NewCo exec, Slattery, faces challenges March 25, 2019
- Bjorn’s Corner: Why did Ethiopian Airlines ET302 and Lion Air JT610 crash? March 22, 2019
- Congestion costs billions, but airlines show little concern March 21, 2019
- Boeing didn’t want to re-engine the 737–but had design standing by March 20, 2019
- Pontifications: Fluid, dynamic events upend MAX story March 20, 2019
Cutting A220 costs is an ‘ongoing exercise’ for Airbus
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Introduction
March 14, 2019, © Leeham News: Airbus’ effort to slash supply costs for A220 production is “an ongoing exercise at this point,” Joe Marcheschi, Airbus’ head of procurement in North America, told LNA in an interview last month.
The A220-300 for JetBlue will be assembled at the Airbus plant in Mobile (AL). Airbus rendering.
“There are no specific, let’s say, achievements yet,” he said. “We are working closely with our supply chain.”
It takes time to squeeze cost out of the supply chain, he said. “We only took over July 1. That’s when we got full knowledge of the existing contracts.”
In January, Philippe Balducchi, head of the Airbus-led venture overseeing production, told journalists that the aerospace giant aims to realize “significant double-digit” percentage cost reduction. He indicated that most of the savings likely would come from the supply chain, according to news reports.
“Look, the airplane is absolutely fantastic—it just costs a lot of money,” Marcheschi said. “Now, we have to find a way to reduce the cost.”
Summary
- Airbus is working to slash supply chain costs on A220 program, but no announcements yet.
- The European plane maker wants to offer commercial MRO services in North America.
Pontifications: Delays, design creep, cost overruns–nope, it’s not an airplane program
By Scott Hamilton
March 11, 2019, © Leeham News: It’s late. There have been creeping delays. There’s been design creep. There were unknown unknowns. It’s way over budget.
No, it’s not a new airplane program, though the parallels are quite apparent.
It’s our new house.
After a three year process, including changing builders, going through the city twice, hitting expensive unknowns and facing rising costs, today is finally, finally, moving day.
It’s been a horrible experience I wouldn’t wish on anyone.
This will sound familiar to Airbus, Boeing, Bombardier, Mitsubishi, Rolls-Royce, Pratt & Whitney and, to a lesser extent, GE and CFM. Only Embraer can say it finished on time and on budget.
Pontifications: Doubts continue over Boeing NMA launch
March 4, 2019, © Leeham News: Another week, another NMA story.
For an airplane that doesn’t exist, the prospective Boeing NMA continues to dominate much of the aerospace news.
By Scott Hamilton
Last week’s announcement by Rolls-Royce that it withdrew—in December, as it turns out—from the competition to power the NMA prompted a flurry of stories in aerospace media, including LNA.
Some stories suggested RR’s withdrawal meant Boeing was getting closer to launching the airplane.
Boeing, in January, said Authority to Offer might come this year and program launch had moved from 2019 to 2020.
Two prominent consultants predicted at the Pacific Northwest Aerospace Alliance conference last month the odds were 60-40 or 65-35 Boeing would proceed.
Maybe, but I have to tell you that conversations I had last week in the wake of the Rolls announcement are not encouraging.
Transcript: RR told Boeing before end of 2018 it’s out of NMA competition
Feb. 28, 2019, © Leeham News: The announcement today by Rolls-Royce that it has withdrawn from the competition to provide an engine for the Boeing New Midmarket Airplane came as a surprise.
Warren East, CEO of Rolls-Royce. Source: Youtube.
This leaves CFM and Pratt & Whitney as the remaining competitors.
RR’s withdrawal wasn’t the only surprise.
CEO Warren East revealed Boeing had been notified shortly before the end of 2018.
Airbus appears poised to launch A321XLR
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Introduction
Feb. 25, 2019, © Leeham News: The longer Boeing dithers on launching the New Midmarket Airplane, the harder it is to close an already difficult 
business case.
News last week that Airbus finally, at long last, is appears about to launch its Xtra Long Range A321XLR this year is overdue. Doing so will make Boeing’s NMA business case more difficult to close.
The aircraft should have been launch in late 2017, an insider told LNA recently. But the corruption scandals enveloping Airbus disrupted plans and drove executives to indecision. Launching the A321XLR was put on hold.
Summary
- Killing the NMA.
- A321XLR details.
- Narrow market.
- Engine down select soon.
Pontifications: March is a critical month for engine OEMs
By Scott Hamilton
Feb. 25, 2019, © Leeham News: Even as Boeing put off a decision whether to launch the New Midmarket Aircraft until 2020, next month could be an important milestone—not only for the program but especially for the engine makers.
Unless delayed, engine down-select is supposed to be made in March.
This is a critical decision that could have huge implications to one of the engine OEMs—Rolls-Royce.
Key customers shrug off Boeing’s 2020 NMA launch date
Jan. 30, 2019, © Leeham News: Key customers and suppliers shrugged off Boeing’s announcement today that a program launch for the prospective New 
Midmarket Aircraft won’t come until 2020.
If Boeing goes ahead with the NMA, a decision yet to be made, an announcement was widely expected at the Paris Air Show in June.
Authority to Offer (ATO) the airplane for sale may still come as early as March or April.
Pontificatons: From the sidelines at the AFJ Dublin conference
By Scott Hamilton
Jan. 28, 2019, © Leeham News: Launch by Boeing of the New Midmarket Aircraft (NMA) is pretty much a given, despite a still undecided business case, say people on the sidelines of the Airfinance Journal’s Dublin 2019 conference.
Here is a potpourri of information picked up at the conference, which is attended by about 2,000 people.
Read more
Countdown to decision on Boeing’s NMA, Part 3: Engine selection
By Dan Catchpole
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Introduction
January 21 2019, © Leeham News: Boeing number crunchers are feverishly working through engine bids from Rolls-Royce, Pratt & Whitney and CFM International, the partnership of Safran and General Electric (GE), the three competitors vying to power Boeing’s New Midmarket Airplane (NMA). Boeing is expected to ask for a best and final offer by the end of January, with engine selection planned in February.
That gives Boeing enough time to get authority to offer from the board of directors, likely in March or April, and to launch the NMA (likely as the 797) at the Paris Air 
Show in June.
Boeing faces big challenges in closing the business case, though. The process has slogged on far longer than company leaders had expected. Even so, Boeing executives’ relentless optimism about the NMA business case stands in sharp contrast to the skepticism of many industry insiders. At least two of the engine makers, for example, think market demand is about half of Boeing’s public forecast.
Each of the three engine makers vying to get on the NMA have some significant liability. The industry insiders and analysts interviewed for this article say is the decision really comes down to Pratt and CFM. Given the pressures on NMA business case, many see a scaled-up CFM Leap as the front runner. It offers the least risk, even if it also has the least upside.
Summary:
- CFM: The LEAP has performed well since going into service, but GE’s financial troubles could weigh down its bid.
- Pratt & Whitney: PW’s GTF is a great fit for NMA requirements, but the engine maker has a full plate with the GTF on five new airplane programs.
- Rolls-Royce: The NMA would be an opportunity to launch Rolls’ UltraFan, but does Boeing want to bet on a completely new engine?
Airbus poised to out-deliver Boeing in 2019
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- LNC’s Corporate and Enterprise subscribers received this Jan. 3.
Jan. 8, 2019, © Leeham News: Airbus is positioned to out-deliver Boeing this year, boosted by the addition of the Bombardier CSeries acquisition last year.
LNC projects that Airbus will deliver nearly 950 airliners this compared, compared with Boeing’s projected deliveries of about 890 jets.
These are LNC forecasts, not those of the manufacturers. Guidance for the year should come on their respective year-end earnings calls: February for Airbus and Jan. 30 for Boeing.