Leeham News and Analysis
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Leeham News and Analysis
- Rolls-Royces sees NMA “addressable” market as 4,000-5,000, same as Boeing January 22, 2019
- Rolls sees end of Trent 1000 issues, but a spike in 787 AOG possible January 22, 2019
- Additive manufacturing explained January 22, 2019
- Leeham News and Comment is now Leeham News and Analysis January 21, 2019
- Celebrating 20 years for Leeham Co. January 21, 2019
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.
Pontifications: AFA holds aerospace job fair that WA state should have done
By Scott Hamilton
Jan. 7, 2019, © Leeham News: The first dedicated aerospace job fair in Washington State may draw more than 1,500 people today, says the president of the organizer, Aerospace Futures Alliance.
Kelly Maloney, AFA president, opened the fair day-long today citing 1,100 pre-opening registrations by job seekers. She told me later that another 500 walk-ins may show up.
Thirty-eight companies, ranging from the Seattle area’s giant, Boeing, to Tier 3 and Tier 4 suppliers, were present to receive the hopefuls, who ranged from new entrants into the job market to upper-middle aged people.
2019 Outlook: leaving Airbus’ troubled year behind
By Bjorn Fehrm
Subscription Only
Introduction
December 19, 2018, © Leeham News.: Next year is a time when Airbus hopes to leave its troubled 2018 behind.
But 2018 was also when the company wanted to leave the troubles of 2017 behind it.
Not only did 2018 not improve. In a number of ways it turned worse.
Engineless A320neos at Toulouse Airport. Airbus hopes this is a thing of the past. Photo via Google images.
Turmoil in the management ranks brought back memories of the politically infested Airbus of 20 years ago. And there were other issues.
Production problems with the A320 continued. The A330neo was further delayed and the A380 order from Emirates to save the program took forever to materialize. The negotiations to fix the contracts for A400M couldn’t be brought to a close.
There were two bright lights in the year. The A350 was now out of its cabin supplier problems and delivering aircraft to plan. The other was the gift from Boeing’s suing Bombardier and its CSeries the year before. The top modern Bombardier CS100/300 became Airbus A220 on the first of July. Price tag; $1 for 50.01% of the program.
Summary
- Changes in executives are almost over.
- Pratt & Whitney’s engine delivery delays are caught up and CFM’s delays are diminishing.
- Production ramp ups are peaking (for now) and deliveries should be at a record rate next year.
- Airbus is waiting for Boeing to decide whether to launch the New Midmarket Aircraft.
NMA must stand on its own business case
Dec. 6, 2018, © Leeham News: The prospective Boeing 797 (NMA) must stand on its own business case and not rely on aftermarket contracts for a profitable
program, reports investment bank JP Morgan.
JPM’s aerospace analyst Seth Seifman met with Boeing CEO Dennis Muilenburg, CFO Greg Smith and Boeing Commercial Airplanes VP-marketing Randy Tinseth Dec. 4. In a research note issued yesterday, Seifman reported that the business case for the New Midmarket Aircraft still hasn’t closed—but “if Boeing launches the NMA, it will be with the intention of earning a return on the aircraft itself that is comparable to existing programs; it will not be a plan to accept lower margins on the aircraft and make it up in the aftermarket.” (Emphasis in original.) Read more
Pontifications: More hints NMA is a “go”
By Scott Hamilton
Dec. 3, 2018, © Leeham News: Safran, the French company that is a 50% partner in CFM International, believes Boeing will launch the New Midmarket Airplane next year.
Safran held its investors day last Thursday.
In sideline conversation, one of those attending reports that Safran met recently with Boeing and is convinced the NMA is a “go.”
(Others, elsewhere, remain skeptical.)
Engine company responses for proposals are due this month to Boeing. CFM, Rolls-Royce and Pratt & Whitney are competing for the engine selection.
It’s believed Boeing would like a dual source (certainly airlines do), but in all likelihood, the odds-on favorite is that the NMA will have a sole source engine. The betting is that it will be CFM. Read more
Areas of inquiry in Lion Air crash
Oct. 29, 2018, (c) Leeham News: A three month old Boeing 737-8 MAX crashed into the sea yesterday.
There are scant clues.
A technical fault was reported the day before the flight, which was unspecified in the news reports LNC has seen. It was said to have been corrected.
Flight tracking showed a rapid descent into the water. One news story reported the pilot radioed he wanted to return due to something, but this is vague and unconfirmed.
It is far too early to speculate what happened to the airplane. There is just too much we don’t know, other than FlightTracker showed what appeared to be a rapid descent into the water.
Here’s what investigations will consider—all as a matter of the normal course of any investigation. This is not listed in priority.
Pontifications: Engines, engines, engines
By Scott Hamilton
Oct. 29, 2018, © Leeham Co.: Engines, engines, engines.
News emerged last week that Rolls-Royce admitted its continuing problems with the Trent 1000 that powers the Boeing 787 now bled over to the Trent 7000.
RR will fall short of delivering the number of engines need to Airbus for the A330neo, meaning fewer deliveries of the airplane this year.
Boeing said it is clearing its inventory of 737 MAXes, but CFM LEAP engines are still late, slowing the effort.
Pratt & Whitney’s GTF engine deliveries to Airbus are caught up, but technical issues still plague in-service engines. CFM still has technical issues as well, though not as severe or persistent as with GTF, with its LEAP engines. Read more
Pontifications: Market Intelligence from NY
By Scott Hamilton
Oct. 22, 2018, © Leeham News: I was in New York City last week for a series of meetings. Here’s what “the street” is talking about. I make no judgment calls about whether the thoughts are on target or not. Read more
Assessing A320 production rate interest in >70/mo
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Introduction
Sept. 17, 2018, © Leeham News: With the supply chain under major stress and Airbus and Boeing trying to recover from scores of “gliders” sidelined at airports without engines, each company nevertheless continues to study production rate increases for the A320 and 737 families.
Airbus publicly has said it’s looking at rate 70/mo. Boeing publicly acknowledges it’s looking at rate 63/mo.
Supply chain sources tell LNC Airbus is studying an even higher rate, into the “70s,” at early as 2020—a date that most consider out of the question.
Boeing is known to be considering a rate of 70/mo for its most profitable program.
Today, LNC looks at the A320 scenario. A future post will examine the 737.
Summary
- Airbus is scheduled to deliver more A320 members in 2019 than production capacity. Some of these may be parked backlog airplanes.
- 2020-2021 sold out at rate 60/mo, 2022-2023 nearly so.
- Rate increase to 70/mo opens opportunities for Airbus, pressure on Boeing.