Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 21. May 9, 2025
- Does an A220-500 need a new wing and engines? Part 2. May 8, 2025
- Embraer downplays tariff impact on 2025 results May 6, 2025
- JetZero readies effort for private equity fund raising May 5, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 20. May 2, 2025
Odds and Ends: AA, US and DOJ have mediator; new C919 order; A380 break even
Movement on AA-US merger: Terry Maxon of The Dallas Morning News reports that American Airlines, US Airways and the Department of Justice have picked a mediator to sort out the DOJ’s lawsuit to block the AA-US merger. See also this Maxon report.
Maxon has a long piece, asking several pontificators (including yours truly) what they think the outcome will be.
Bloomberg reports that American CEO Tom Horton “sees a way” to a settlement but did not elaborate.
COMAC orders: COMAC says it received 20 more orders for the C919, but it once again is from a Chinese lessor, not an airline. A majority of orders for the C919 are from Chinese lessors, in stark contrast to standard practice among established lessors that they want to see a solid base (or a likely solid base) for a new aircraft type from airlines before signing up.
Although COMAC says this latest order brings the total up to 400, a data base shows only 275 so far (meaning the other 125 haven’t been converted to firm orders yet).
A380 Break Even: Airbus CEO Fabrice Bregier says hitting break even on the A380 program in 2015, which is the current plan, will be difficult if deliveries fall below the target of 30 per year. Airbus should deliver 25 this year, he said.
Busy decade ahead for new, derivative airplane EIS dates
The next decade will see an extraordinary number of new and derivative airplanes entering service, beginning next year with the Boeing 787-9 and ending in 2022 with what we believe will be a replacement for the Airbus A330.
Bombardier’s CS100 is currently planned to enter service in around September next year, 12 months after its first flight on September 16, 2013, but we think EIS will slip to early 2015. Bombardier seems to be laying the groundwork for this in statements that it will reassess the EIS date in a few months.
Beginning with the 787-9, there is a steady stream of EIS dates–and a couple of end-production dates of current generation airplanes.
This chart captures the airplanes and their dates. Most dates are based on firm announcements from the OEMs, but we’ve adjusted some based on market intelligence and our own estimates.
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The arrows to certain points within years are not necessarily representative of specific timelines within that year. OEMs generally are not too specific about and EIS date, preferring to say “first half” or “second half” or some derivative of ambiguity. The only specific that we’re aware of is Boeing’s revised EIS of the 737 MAX, from 4Q2017 to July 2017. Although the Ascend data base is quite specific, we’ve not attempted to be highly specific in this chart. (Have we been specific enough about all this?)
Readers will note that we have the ARJ21 arrow going to a question mark. This airplane is already seven years late, and supposedly it’s going to enter service next year, but we aren’t banking on this at all. COMAC/AVIC, producer of the ARJ21, has a dismal record of meeting target dates. Accordingly, although COMAC now says the EIS for the C919 is 2017, we’ve got this in 2018–and even this is likely generous.
China’s closed airspace hasn’t changed much in 20 years
China’s military continues to so control–and close airspace–in China that delays are rampant, this AP story reports. We’re reminded on the era when we were doing business in China, going there nine times in a 4 1/2 year period from December 1988-mid 1993.
Visiting a number of airlines there, one of which was operated by the military, along with CAAC, CASC and the McDonnell Douglas Shanghai factory, we were struck by the low aircraft utilization: only six or seven hours. Western standards were 10 or more. Even then, we were told, the military control of the skies was a key factor. The low utilization rate then clearly contributed to the need to buy more airplanes to meet traffic growth than was necessary. We haven’t seen any data on today’s utilization rate, but we have to believe this nexus remains.
Flying Chinese carriers then was pretty alarming at times. A ramp worker smoked while refueling a plane, with the refueling connection spraying fuel on the ramp. Carry-on baggage was in the aisle on take off. A person was in the lav on take off. We’ve read some stories in recent years that suggest not much has changed.
Back then, getting into China had limited options. We flew to Tokyo and pretty much had to take Air China into Beijing. A direct air route would go over Korea. We couldn’t go through North Korean air space and apparently flying over South Korean to China was then forbidden, so we had to route south around the Korean peninsula, adding a great deal of time to the flight.
The McDonnell Douglas Shanghai factory was primitive even by standards of the day then, well before robotics and moving production lines. The factory was producing one MD-80 a month and the planes were essentially hand-built. This antecedent might be why the MD-80-looking ARJ21 is having such difficulty. The factory drew so much power that parts of Shanghai went brown-out or black-out during the day, an issue presumably long-since overcome in the Shanghai power grid.
The MD-80 plant was supposed to be MDC’s “in” to gain market share. While selling something like 40 MD-80s/90s (if memory serves) to China via this plant, the venture clearly was a failure and the Chinese used the operation to learn a bit about commercial aviation. Embraer had an ERJ plant in China for the same purpose, and likewise came up short of its goal while the Chinese benefited more. The Airbus plant in Tianjin seems to have been more successful, but we don’t think it’s coincidence that the COMAC C919 looks a lot like the A320.
Odds and Ends: The risk on airborne fires; C919 delays; A380 v 747-8I
The Risk of Fire: FlightGlobal has this story about the risk of fires on board (free registration required). The news article is alarming about the risks of lithium-ion batteries, combined with the new composite technology.
The page for the original report is here.
The 70-page report is here.
Among the findings FlightGlobal reports is what we wrote about early this year: if you have a fire on the airplane, you have to get on the ground in a short period of time (15 minutes, according to an Airbus study, 18 minutes according to this new one).
The interaction between the batteries and composites is a concern.
COMAC C919: The Wall Street Journal has an article talking about the anticipated delays of the COMAC C919. This is via Google News, so it should be accessible to Readers. Here is also a short news item from China Daily and one from Bloomberg.
Airbus loses advertising complaint: Remember those Boeing ads promoting its 747-8 as 26% more economical than the A380? Airbus filed a complaint with a UK watchdog agency, which denied the complaint Tuesday. Aviation Week has this article. One of the things that strikes us from the regulator’s decision is its conclusion that customers would, essentially, see past Boeing’s claims.
Boeing’s use of seats counts–notably 467 for the 747-8–supports the math of the advertisement. But Airbus is right that in true airline configuration, the count would be 405 seats, which dramatically alters the Boeing claims.
Regardless, we have previously opined that the comparison is ridiculous. Given the large differences in the size of the airplanes, comparing the 748 with the A380 is like comparing the 737-700 with the A321. Boeing is cheeky to make the comparison and Airbus fell for it. This debate is hardly worthy of two world-class companies,
Rather than engaging in a debate over seat-based economics, Airbus has a clear upper hand in these numbers: airlines have purchased 262 A380s and only 40 747-8Is. These are the only numbers that count and with these, Airbus clearly has the better advertisement.
Update: AirInsight has some statistics to look at.