June 22, 2020, © Leeham News: Although more passengers are flowing through airports and airlines are adding back service, airplane order deferrals continue.
Airline bankruptcies do, too.
LEVEL’s short haul operation went into bankruptcy last week. LATAM Argentina ceased operations. Lufthansa said it may seek administration if shareholders don’t agree to the government bailout negotiated by the airline.
New orders dried up. And, so far, there is no telling when there might be some placed.
Boeing announced just a handful of new orders last month. Airbus didn’t announce any orders in May.
June 19, 2020, ©. Leeham News: In our Corner series about flying during the COVID-19 pandemic, we look at opening up traveling and how re-emerging infection clusters can be handled.
With a four-month pandemic history, several studies now detail what effects different prevention actions have. Once the general spreading of the virus is under control in a country, authorities can then use these tools to engage in point actions rather than general lockdowns.
First in a series of reports.
By Scott Hamilton and Vincent Valery
June 17, 2020, © Leeham News: Airbus was riding high in February.
The A321XLR was a clear winner. An important order was won from United Airlines, up to then an exclusive Boeing narrowbody customer. American Airlines selected the XLR. An order was expected from Delta Air Lines.
In one of his first actions, Boeing CEO David Calhoun, taking office Jan. 13, put the NMA on indefinite hold, pending a complete review of Boeing’s product strategy.
The Boeing 737 MAX remained grounded by regulators, with no return to service in sight.
Things couldn’t be going better for Airbus.
And then in mid-March, the COVID crisis became a global pandemic. Air transportation fell up to 95%. Airlines required government bailouts. Airbus CEO Guillaume Faury said the very existence of Airbus was threatened.
June 12, 2020, ©. Leeham News: In our Corner series about flying during the COVID-19 pandemic, we now look at how different worldwide organizations are engaged to understand the COVID-19 pandemic and how to handle it in an air transport context.
Based on input from the industry stakeholders, the organizations have in the last weeks issued plans for the rebuild of the global air transport system.
By Bjorn Fehrm
June 11, 2020, © Leeham News: As international passenger traffic slowly recovers, how much of the cost of flying passengers on the international routes can be paid by the freight under the floor?
We discussed the base parameters to answer this question in last week’s article. Now we calculate the revenues from passengers traffic and Cargo and compare them with the operational costs.
By Bjorn Fehrm
June 10, 2020, ©. Leeham News: France presented a 15 billion Euro support plan for the French aeronautical industry yesterday, to help the industry overcome the effects of the COVID-19 pandemic.
The plan has three focus areas:
By Bjorn Fehrm
June 4, 2020, © Leeham News: Air cargo prices are at an all-time high. The air cargo demand is down 28% compared with the same time last year, but the capacity has disappeared faster. Half of the world’s cargo was flying in the bellies of passenger aircraft, and as these were grounded, 50% of the world-wide cargo capacity went missing.
Airlines have taken the seats out of passenger jets and now fly them as belly freighters with light pandemic protective gear cargo in the cabins on special authorization from the authorities. This has alleviated the capacity crunch somewhat but demand and capacity still don’t match. As a result, cargo prices stay high.
As international passenger traffic slowly recovers, how much of the cost of flying passengers on the international routes can be paid by high priced freight in the bellies of the aircraft?
By Scott Hamilton
June 3, 2020, © Leeham News: The conventional wisdom is there is no future for the Airbus A380 after front-line carriers remove the airplane from their fleets.
Singapore Airlines retired the first of five A380s a few years ago as 10-12 year leases expired. Only one found a new home, with ACMI operator HiFly. Others went to the scrap heap.
The virus crisis prompted several airlines to ground entire A380 fleets—perhaps permanently. Emirates Airline, with 115 in operation before COVID-19 essentially shut down world travel, said it would ground a big portion of its A380s. It took about a week before President Tim Clark said eventually these will return to service.
The A380 doesn’t make a good belly freighter airplane, like the Boeing 747. The lower cargo hold isn’t spacious. The elaborate landing gear takes space away from cargo. The upper deck is positioned a few inches too high to accommodate common containers. Loading cargo onto the upper deck is a logistical challenge.
Yet there is a P2F (passenger to freighter) option that is feasible and affordable. And it is being explored.
By Bjorn Fehrm
June 1, 2020, ©. Leeham News: Embraer presented its 1Q2020 results today. It lost $292m (vs. loss of $43m 1Q2019) on revenues of $634m ($823m).
The reason is the COVID-19 crisis and halting commercial jet production during January, to prepare for the Boeing Joint Venture. It halved the 1Q2020 revenue of Commercial aircraft to $141m versus $281m last year.
The Executive jet segment is recovering, however. Its 1Q2020 revenue was $130m versus 117m 1Q2019, an 11% increase despite delivering fewer jets. The reason is high-end deliveries are now strong after several years of slump.
The separation costs for the canceled Boeing Joint Venture during 1Q2020 was $22m. The 1Q2020 results include $55m of special items due to the impacts of COVID-19. Embraer lowered the fair value of its stake in Republic Airways Holdings with $22m and made bad debt provisions for weak airliner customers of $33m.
Arbitration proceedings with Boeing have started for the canceled Comercial airplanes Joint Venture agreement and the KC-390 Contribution agreement. Embraer said in the quarterly presentation call it would be open to new cooperation agreements but had nothing new to tell on the subject.
The Company has $2,501m of Cash exiting 1Q2020 with first debt maturing in 2022. Given the present crisis for Civil aviation, guidance for 2020 is suspended.
June 1, 2020, © Leeham News: The new chief executive officer for GE Aviation (GEA) will face huge challenges when he or she succeeds David Joyce when he retires this year, say industry sources. Joyce was named CEO in 2008.
Like other sectors of commercial aviation, the COVID-19 crisis hit GEA hard.
Initially, the workforce was cut by 10% in March. This was deepened to 25% in May. Non-essential spending was cut. A hiring freeze was implemented and other cost-cutting measures were put in place.