Leeham News and Analysis

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

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

Norwegian Air splits order with Airbus, Boeing

In a surprise, Norwegian Air Shuttle split a large order between Airbus and Boeing for A320 and 737 families. The Airbus order is only for the NEO and 737 order is a mix of MAX and NGs.

We expected only the 737 order; we had previously reported NAS was one of the “commitments” for the MAX.

This represents the third all-Boeing customer Airbus has won for its NEO.

NEO deliveries will begin in 2016, equipped with the PW GTF. Engine selection for later deliveries remains open. The GTF enters service on NEO in 2015 and the NEO CFM Leap engine enters service a year later.

 39 Comments

 Posted on January 25, 2012 by

 Airbus, Boeing, CFM, Pratt & Whitney

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PNAA conference in Seattle Feb. 6-8

The Pacific Northwest Aerospace Alliance is hosting two conferences in the Seattle area in February and March.

PNAA’s 11th annual conference is Feb. 6-7-8 at the Lynnwood (WA) Convention Center, north of Seattle and south of Everett. Information may be found here. This 2 1/2 day conference is comprised of a Defense Focus Day on the afternoon of Feb. 6; a day-and-a-half of commercial aviation presentations and a Suppliers’ Fair on the afternoon of the 8th.

Airbus, Boeing, Bombardier, CFM, Pratt & Whitney, the Teal Group’s Richard Aboulafia, G2 Global Solutions’ Michel Merluzeau, Alcoa and Electroimpact are among the presenters on the commercial side.

Tayloe Washburn of Project Pegasus and the Washington Aerospace Partnership will discuss the issues surrounding the assembly site of the 737 MAX.

Boeing’s Insitu  EADS North America and Lockheed Martin are among the defense industry presenters.

More than 300 people attended the 2011 conference, which is now the largest in the Pacific Northwest and one of the largest on the West Coast. PNAA serves Washington, Oregon, Idaho, Montana, Alberta and British Columbia. It has arranged trade missions from Europe, Asia and Latin America visiting here to meet with Washington State suppliers. PNAA was also asked by the White House and the US Commerce Department to arrange a meeting of key CEOs in Seattle to discuss economic issues affecting aerospace.

The March event PNAA is organizing is a Suppliers Forecasting Symposium. This one day event on March 12 precedes the first USA-based Aerospace & Defense Supplier Summit organized by BCI Aerospace.

The Symposium is the first of its kind: a day-long event focused on forecasting the requirements in the supply chain that services Boeing, other OEMs and the Tier 1 suppliers. Boeing Commercial Airplanes and Boeing Defense, Space & Security will be presenters as well as two noted aerospace analysts from Wall Street, David Strauss of UBS and Robert Spingarn of Credit Suisse. They follow Boeing and the supply chain and have their views on forecasting the needs of the suppliers.

These are two important events sponsored by PNAA and the A&DSS summit by BCI Aerospace is equally important to the Washington aerospace supply chain. PNAA members get a discount to the A&DSS event.

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 Posted on January 3, 2012 by

 Airbus, Boeing, Bombardier, CFM, EADS, Embraer

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Southwest launches 737-8, bypasses 737-7 for now

Here is an article we did yesterday for Flightglobal Pro’s subscription service.

The Southwest Airlines order on 13 December launching the 737 Max programme is a launch of the -8 version. The carrier, which has substitution rights between the -7 and the -8, has chosen to bypass the -7 for now.

Brian Hirshman, SVP Technical Operations, told Flightglobal Pro on 15 December that the carrier is up-gauging its fleet, which it began doing this year with acquisition of the 737-800 for the first time. Southwest, throughout its history since is 1971 birth, has relied on the 737-200/300/500/700, preferring smaller sized aircraft and high frequency as its business model.

Read more

 16 Comments

 Posted on December 16, 2011 by

 Airbus, Boeing, Bombardier, CFM, CSeries, Pratt & Whitney

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Southwest press conference on 737 MAX order

Southwest Airlines held a web press conference (with written question submissions the staff can screen in advance–bad idea) on its new 737 MAX order. Here are highlights:

Gary Kelly, CEO

  • Only four 737 MAX delivered in 2017. Just 15 the following year. (From press release.)
  • Christmas came early to Southwest. [Last time Kelly said that was when he proposed moving from Sea-Tac to Boeing Field in Seattle. Got his head handed to him in the local opposition. Editor.]
  • We have seen tremendous advances with technology.
  • COO Mike Van der Ven led effort.
  • This is coming at just the right time. One of the main challenges we face are high fuel costs. We are very much in need of new technology to reduce the fuel burn and reduce environmental impact.
  • This supports our financial strategy.
  • Commonality major point.

Jim Albaugh, CEO of BCA.

  • [Albaugh looks a lot happier at this press conference than he did at the American Airlines one.]
  • Southwest is a special customer and we have a special relationship.
  • This is the first definitive agreement we signed. Southwest will get airplane #1 when it rolls off the line in Renton.
  • [With Southwest getting only 4 airplanes in 2017, this suggests a late 2017 EIS.–Editor]
  • 948 commitments now, projects 1,400-1,500 by the end of next year.
  • I don’t have the real thing but I have a model for you and a video.
  • [Video shows MAX will winglets, not the oft-speculated raked wingtips.]
  • This is largest order in Boeing’s history.

Kevin McAllister, VP Sales and Marketing for GE, representing CFM.

  • Southwest formally launches the LEAP-1B.

Mike Van der Ven, COO.

  • This allows us to accelerate the retirement of older airplanes.
  • Have 150 options to expand as well.
  • Our choice guarantees WN a single fleet type well into the next decade.
  • 16-18% fuel burn improvement over 737 Classics.
  • We’ve been in conversations with Boeing for several years.
  • Efficiency improvements allow up to improve without complexity.
  • Compared with A320neo and both did the job but 737 MAX was our choice.
  • Cost is $1.2bn for all outstanding orders (including those existing before today). Per year.
  • Airplanes still being defined.
  • 717s in leases 2017-2020+ and will work to see what the alternatives are but will operate through lease terms if we have to.
  • Primary factors of fleet commonality and gauge of 737-8 (more seats), lighter airplane vs A320.
  • We like the GTF technology but this comes as a package and CFM has millions of flight hours behind it. GE and CFM have been very good in past in delivering products on time and meeting specifications.

Brian Hirshman, SVP Technology, WN

  • We did extensive analysis vs A320neo and felt 737 MAX better suited.
  • Plane works better at Chicago Midway Airport, among other issues.
  • MAX would have to fly the same mission as NG and are satisfied it would do that.
  • We wanted as much commonality as we can.

John Hamilton, Boeing 737 chief engineer.

  • The airplane is fairly well defined. Will reach final configuration in 2013. It’s well enough known that WN and Boeing had confidence to go forward at this time.
  • MAX will have capability to have increased payload-range vs NG.
  • Airport performance was important, especially at key airports.
  • We will make sure we get Southwest what it wants.
  • We both would have liked a new airplane, but when you look at lessons learned [from 787] it was more challenging to bring to market in the timeframe customers wanted.

Chaker Chahrour, EVP CFM

  • Core is optimized for MAX for best overall fuel burn.
  • We believe we have much more credible technology than GTF. We have tremendous amount of confidence in our technology and at the end of the day it will be the most economical.

 41 Comments

 Posted on December 13, 2011 by

 Airbus, Boeing, CFM

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Odds and Ends: A380 cost, American’s engine order, ‘war on Boeing’

A380 cost: Flight Global reports that Air France–a launch customer of the Airbus A380–just concluded a lease deal for one of the giant airplanes for a rental of $1.8m per month.

For an airline of Air France’s credit, lease rates are typically on the 0.80% range and sometimes as low as 0.72%. This, then, infers a purchase price of $216m-$230.4m.

American Airlines: It was announced Monday AA split its engine order between CFM (for the Airbus A319) and IAE (for the A321). Given American’s large CFM-powered Boeing 737 fleet, some might think CFM should have won the entire engine deal. But the IAE V2500 is viewed as the better engine for the larger A321–more thrust and lower fuel burn–and American follows Lufthansa Airlines in splitting the engines for the smaller and larger Airbus family.

Aviation Week has an article that provides some other interesting information about the leases for the Airbuses.

Pratt & Whitney: Does the American deal mean PW has a good change of placing the GTF on the A320neo order by American? PW’s buyout of the Rolls-Royce share of IAE certainly gives PW the ability to do a “global” deal involving V2500 and GTF engines, something CFM has been able to do for CFM56 and LEAP engines from inception. While Rolls-Royce was involved in IAE, there was no incentive for RR to be flexible on V2500 sales that might lead to GTF transactions. Now PW can wheel and deal all it wants.

War on Boeing? Aviation Week has a speculative piece that US airlines have declared “war on Boeing.” This think-piece relates to the Air Transport Association suing the US Export-Import Bank over plans to finance 787s ordered by Air India, a financial and management basket-case.

While AvWeek raises some interesting points, we’re told this has more to do with a dispute between Delta Air Lines–instigator of the ATA action–and India. We think Boeing is merely getting mugged in the process and that this is not a “war on Boeing.”

Turboprops: Jets always draw the most attention but Aspire Aviation has a long piece about turboprops, specifically the Q400 vs the ATR series, that merits reading. Turboprops are slowly regaining favor in some quarters.

The Beauty of it: From Randy Tinseth’s blog, here is a photo that is just a beauty, from the Dubai Air Show:

 36 Comments

 Posted on November 22, 2011 by

 Airbus, Boeing, Bombardier, CFM

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Odds and Ends: A350, 737MAX, 787; ACG is #10; and more

Guessing Game: The mysterious nine customers for the 737 MAX continues to confound observers. Actually, there were nine before Aviation Capital Group signed up, so ACG was #10.

  • American Airlines
  • Lion Air
  • Aviation Capital Group
  • GECAS
  • COPA
  • GOL
  • Norwegian Air

Three more; we have three of the names but not confirmed.

Airbus A350 delay: Airbus announced a delay of six months; we think it prudent to add 3-6 more.

Aviation Week has a comprehensive table of neo vs MAX orders.

Boeing 787 Deliveries: All Things 787 reports there will be only two more deliveries this year and why.

Boeing 737 MAX: Note the wording in the Boeing press release about Aviation Capital Group’s commitment for the MAX: “ACG first leasing company to announce commitment for 737 MAX.” Not that ACG is the first lessor to commit; it is the first leasing company to announce its commitment. We understand two other lessors have committed. One is GECAS (no surprise, given the family-engine connection). We haven’t identified the other one with enough confidence to publish its name yet.

Bombardier: There remain three unidentified orders announced by BBD: one in Europe, two in the Middle East. The Middle Eastern ones should be revealed at the Bahrain Air Show. (This probably gives you a hint who they are and why they weren’t revealed at the rival Dubai show.)

Also, with some aerospace analysts increasingly speculating the CSeries entry-into-service will slip to 2014 (and, for the moment, BBD says ’tain’t so), we’ll remind everyone that the AirInsight CSeries Business Case report of December 2010 assumed a 2014 EIS.

Embraer: EMB has teamed with Alcoa to offerer advanced metals on the E-Jet RE, to lighten weights and reduce maintenance. EMB isn’t using composites (BBD’s CSeries has an aluminum-lithium fuselage and composite wings), but the E-Jets at 2×2 seating and 2,000 mile range are lighter than the CS-100 with which they will compete. Ninety percent of the US domestic flying is less than 2,000 miles (other areas of the world are likewise), so the operating costs vs the 2×3 seating, heavier CS100 will be interesting to watch.

YouTube: We’ve added a YouTube category in the right hand column, with links to OEM You Tube channels. So far we have Airbus, Boeing, Bombardier Aerospace, CFM and Embraer. As we find more, we’ll add them.

 38 Comments

 Posted on November 18, 2011 by

 Airbus, Boeing, Bombardier, CFM, Embraer, Embrarer, Pratt & Whitney

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It’s official: Lion Air revealed as a MAX customer; ACG announces MAX and NG

Update, 1:45pm: Aviation Capital Group announced a commitment for 35 MAXes and a firm order for 20 737-800NGs. ACG becomes the first lessor to commit to the MAX.

ACG announced a firm order for 30 Neos at the Dubai Air Show.

Update, 7:30 AM PST: Boeing says the signing will be for a “commitment” to the MAX. The photo shows it to be the 737-9.

Original Post:

It’s now official: Lion Air has been revealed it is a customer of the Boeing 737 MAX, joining American Airlines as the only two of nine disclosed customers.

We previously identified Lion Air as one of the original five airlines to announce commitments.

The revelation was made in connection with President Obama’s trip to Indonesia.

The type of MAX was not identified, but with a list price of of $21.7bn ($94m per unit), this suggests the planes could be the 737-9, the priciest of the 737 line.  There is a 201/29 split for MAX and -900ERs. Options for 150 have also been revealed.

Lion Air is the largest customer for the 737-900ER.

The news article described the deal as an “order.” A signing ceremony is planned for November 18 Indonesia time, so we’ll see if the commitment has been converted to a firm order. If so, it would be the first.

 42 Comments

 Posted on November 17, 2011 by

 Boeing, CFM

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Dubai Air Show review

The Dubai Air Show is over, with record orders being announced.

2 x B777F for Qatar

20 x A320neo for ACG

45 x A320neo/30 x A320  for Spirit (MoU)

50 x A320neo for Qatar with PW1100G-JM (+30 options)

5 x A380 for Qatar (+3 options)

ALAFCO announcing GTF for all A320neo

Emirates 50+20 777-300ERS

10 x CS300 for Atlasjet (LoI)

We took a bye on daily coverage because we weren’t there and the on-site reporters could do better than we could from afar. So we decided to do a post-show pontification.

Overview

Airbus and Boeing dominated the headline–no surprise there–but while Boeing had a blow-out order with 50+20 777-300ERs from Emirates Airlines, Airbus had another mind-xxxx from the mercurial Akbar “U-Turn” Al-Baker, CEO of Qatar Airways. Al-Baker is now the subject of a mocking Twitter account, @AkbarAlFaker, having a conversation with @MichaelOhReally.

This Bloomberg story gives a nice wrap.

Read more

 30 Comments

 Posted on November 16, 2011 by

 Airbus, Boeing, Bombardier, CFM, CSeries, Embraer, Pratt & Whitney, Rolls-Royce

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PNAA aerospace conferences in February, March in Seattle

The Pacific Northwest Aerospace Alliance is hosting two conferences in the Seattle area in February and March.

PNAA’s 11th annual conference is Feb. 6-7-8 at the Lynnwood (WA) Convention Center, north of Seattle and south of Everett. Information may be found here. This 2 1/2 day conference is comprised of a Defense Focus Day on the afternoon of Feb. 6; a day-and-a-half of commercial aviation presentations and a Suppliers’ Fair on the afternoon of the 8th.

Airbus, Boeing, Bombardier, CFM, Pratt & Whitney, the Teal Group’s Richard Aboulafia, G2 Global Solutions’ Michel Merluzeau, Alcoa and Electroimpact are among the presenters on the commercial side.

Tayloe Washburn of Project Pegasus and the Washington Aerospace Partnership will discuss the issues surrounding the assembly site of the 737 MAX.

Boeing’s Insitu  EADS North America and Lockheed Martin are among the defense industry presenters.

More than 300 people attended the 2011 conference, which is now the largest in the Pacific Northwest and one of the largest on the West Coast. PNAA serves Washington, Oregon, Idaho, Montana, Alberta and British Columbia. It has arranged trade missions from Europe, Asia and Latin America visiting here to meet with Washington State suppliers. PNAA was also asked by the White House and the US Commerce Department to arrange a meeting of key CEOs in Seattle to discuss economic issues affecting aerospace.

The March event PNAA is organizing is a Suppliers Forecasting Symposium. This one day event on March 12 precedes the first USA-based Aerospace & Defense Supplier Summit organized by BCI Aerospace.

The Symposium is the first of its kind: a day-long event focused on forecasting the requirements in the supply chain that services Boeing, other OEMs and the Tier 1 suppliers. Boeing Commercial Airplanes and Boeing Defense, Space & Security will be presenters as well as two noted aerospace analysts from Wall Street, David Strauss of UBS and Robert Spingarn of Credit Suisse. They follow Boeing and the supply chain and have their views on forecasting the needs of the suppliers.

These are two important events sponsored by PNAA and the A&DSS summit by BCI Aerospace is equally important to the Washington aerospace supply chain. PNAA members get a discount to the A&DSS event.

 1 Comment

 Posted on November 13, 2011 by

 Airbus, Boeing, Bombardier, CFM, EADS, Pratt & Whitney

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Embraer decides on re-engine, takes a pass on NSA

Embraer announced that it will take a pass on developing a New Small Airplane in the 130-155 seat class and instead re-engine the E-Jet series, possibly with stretch to 133 seats (smack in the middle of the Bombardier CSeries 100/300 size). Targeted entry-in-service (EIS) is 2018.

Aeroturbopower, which focuses on engine stuff, already has this back-of-the-envelope analysis.

As Aeroturbopower notes, EMB favors a one-stop, trans-continental airplane (2,000-2,200nm) over the full transcontinental range of the CSeries (although BBD offers a lighter-weight CSeries with 2,200nm range as well). About 90% of the US domestic flights are within this range but the E-Jet is 2×2 vs the CS 2×3 seating. Aeroturbopower concludes the E-Jet will have lower seat costs.

Aeroturbopower also compares the E-Jet with the Mitsubishi MRJ.

 6 Comments

 Posted on November 11, 2011 by

 Bombardier, CFM, CSeries, Embraer, Pratt & Whitney, Rolls-Royce

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