European airline struggles add risk to 15% of Airbus, Boeing orders

By Judson Rollins

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Introduction

Earlier this week, LNA examined the potential for a shakeout among European carriers as the coronavirus outbreak spreads to the continent.

Five European countries now rank among the ten hardest hit – travel demand is plummeting nearly as rapidly as after the September 11 attacks in the US.

On Thursday, UK-based Flybe went into bankruptcy after long-time financial struggles. The airline had 54 De Havilland Canada Dash-8-400s and nine Embraer E175-E1s in its fleet, more than half of which were leased from Nordic Aviation Capital and HEH Aviation Management.

LNA reviewed aircraft ownership data to understand top manufacturer and lessor exposure to European carriers, particularly those with known profitability issues and high debt loads.

Source: Twitter / @AirportWebcams

Summary
  • Airbus’s exposure to Europe is 16% on single-aisles and 19% on twin-aisles;
  • Boeing has just under 15% of its single- and twin-aisle orders from Europe;
  • Embraer’s E2 jet program has 27% exposure to the region;
  • ATR, De Havilland Canada, COMAC face little to no threat from European airline woes;
  • Norwegian, TAP, SAS, TUI are likely the most imminent threats to manufacturers and lessors.

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Asian airline troubles could affect up to 20% of Airbus, Boeing backlogs

By Judson Rollins
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In last week’s analysis, LNA examined which airlines in greater China and the rest of Asia may be in imminent risk of financial distress due to the growing coronavirus outbreak. We found that airlines from Malaysia to Japan have significant exposure to the Chinese market. Several have shaky balance sheets and were already losing money prior to the outbreak, most notably AirAsia, AirAsiaX, Thai Airways, Nok Air, Malaysia Airlines, and Asiana.

The coronavirus outbreak has now spread to Europe and the Middle East, but we are continuing our focus on Asia as it’s been most greatly affected so far. Additional analysis focusing on Europe will follow, with particular attention to the potential for further airline consolidation on the continent.

LNA reviewed ownership and operating data on aircraft to understand top manufacturer and lessor exposure to greater China, which includes Hong Kong and Macau, and the rest of East Asia.

Summary
  • Airbus has greater exposure to China and the rest of East Asia, especially in widebodies;
  • Boeing’s 787, 777X difficulties will be exacerbated by Asian airline troubles;
  • COMAC’s sales book is almost exclusively in China, but government support is likely;
  • ATR has material exposure to Southeast Asia; other regional aircraft OEMs are largely unaffected.

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ATR: We’re confident in the future of turboprops

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By Judson Rollins

Introduction

Executives from turboprop manufacturer ATR expressed optimism about their product range and the future of turboprops in general at last week’s Singapore Airshow.

According to industry databases, ATR has 52% of the market for 30+ seat turboprops in service and 63% of 70+ seaters. It competes primarily against De Havilland Canada’s DHC-8 family. The ATR-72 accounts for nearly two-thirds of ATR production. Both models are produced on a single assembly line.

However, ATR dominates the backlogs by a wider margin.

Summary

  • ATR touts advantages of the ATR-42 and -72 family;
  • Special performance capabilities of the ATR-42 are key for developing markets;
  • Adapting aircraft capabilities to stay ahead of revitalized DHC-8 competitor;
  • Not looking to compete with regional jets in the 70+ seat space.

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2020 Outlook for Airbus, Boeing, et al

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Introduction

By the  Leeham News team.

Jan. 2, 2020, © Leeham News: This will be a pivotal year for Boeing.

It will be a year of challenges for Airbus.

Embraer Commercial Aviation should disappear.

Mitsubishi Heavy Industries faces final decisions for the SpaceJet.

Overhanging international trade is the US presidential election.

These are just some of the headlines to look for in 2020.

Leeham News and Analysis provides its annual outlook as the new year, and the new decade, begins.

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Bjorn’s Corner: Why e in ePlane shall stand for environment, not electric. Part 1.

December 13, 2019, ©. Leeham News: The first all-electric commercial aircraft, a Harbor Air DHC-2 Beaver, flew over the Fraser River near Vancouver in the week (Figure 1). It was powered by a magniX electric engine fed with energy from batteries.

Despite this progress, this Corner series is about why the e in our future ePlanes should stand for environment and not electric.

Figure 1. Harbour Air seaplane flying with a magniX electric engine feed by batteries. Source: magniX.

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Can the DHC 8-400 compete with the CRJ550 for the 50 seat Scope Clause market? Part 2.

By Bjorn Fehrm

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Introduction

November 21, 2019, © Leeham News: Last week we started our analysis of the De Havilland Canada’s DHC 8-400 as a replacement for US Scope Clause 50 seat jets like the Bombardier CRJ200 or the Embraer ERJ-145.

We compared a newly produced and adapted DHC 8-400 with United’s CRJ-700 conversion to CRJ550, a 50-seater version of the larger jet. After looking at the airplane dimensions and cabin spaces last week we now go deeper into the configuration of the aircraft and their economics.

Summary:

    • The DHC 8-400 is offered as a 50 seater and 65 seater variant to fit the US Scope Clause market.
    • The Turboprop has a cost advantage over the jet at the cost of a 20% longer trip time.

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Can the DHC 8-400 compete with a CRJ550 for the 50 seat Scope Clause market?

By Bjorn Fehrm

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Introduction

November 14, 2019, © Leeham News: The US mainline airlines have large fleets of 50-seater regional jets that are getting old. The present Scope Clause limits on the number of aircraft with seating over 50 seats stop the mainlines from replacing these aircraft with larger aircraft. So there is a real need for an efficient 50 seater regional aircraft for the US market.

As there are no 50 seater jets in production, United is converting its 70 seater CRJ700s to 50 seaters to fill the gap and calls them the CRJ550. This is where de Havilland Canada sees a change for an adapted DHC 8-400 turboprop. It’s more efficient than a CRJ550 while offering the same comfort, says de Havilland. We check if this is correct and what chances a DHC 8-“550” have in this market.

Summary:

  • The US Scope Clauses allow the three mainlines to have more 1,000 50 seater jets, yet no new ones are available to replace the more than 600 in the market.
  • The in-production DHC 8-400 would be an alternative when looking at cabin size and dimensions.

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Europe’s Regional airlines meet in Antibes, Cotes d’Azur.

By Bjorn Fehrm 

October 9, 2018, ©. Leeham News, Antibes France: The European Airlines Association, ERA, gathered 44 of its 51 member airlines in Antibes France, today for the first day of its 2019 General Assembly meeting.

LNA participated in the event for the first time and we found an impressive gathering of airline and airport representatives, aircraft OEMs and support businesses discussing the challenges facing the European regional air transport market.

Norway’s Wideroe, the launch customer for Embraer’s E-Jet E2 is one of the airlines present.

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de Havilland Canada vows to revitalize Q400

Sept. 6, 2019, © Leeham News: Nashville—The new de Havilland Canada (DHC) vowed yesterday to revitalize the former Bombardier Dash 8-400 (Q400), the program DHC acquired effective June 1.

Bombardier is selling off and exiting the commercial aviation sector after a series of management miscalculations, cost overruns and thee new airplane programs in commercial and business aviation nearly bankrupted the company.

The Q400 was the first complete airplane program to go. The CRJ program sale is next. A majority interest in the C Series jetliner occurred in 2018.

DHC is a subsidiary of Canada’s Longview Aviation. Another subsidiary, Viking Air, acquired all previous Bombardier-de Havilland programs from the Dash 1 through Dash 7 and CL-Series aerial fire-fighting water bombers.

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