Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Engine makers emphasizing durability, reliability June 4, 2025
- Boeing CEO: Lessons learned are key to certification of 737-7/10 and 777X June 2, 2025
- Digital twin is a key to JetZero’s hopes for Blended Wing Body entry June 2, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 24. May 30, 2025
- Does an A220-500 need a new wing and engines? Part 3. May 29, 2025
Pontifications: Writing had been on the wall for years for Q400 sale; CRJ is next
By Scott Hamilton
Nov. 12, 2018, © Leeham News: The writing had really been on the wall for the past few years, regardless what the corporate line was: Bombardier was one day going to sell the Q400 program or shut it down.
Better to sell it and get at least some money out of it, no matter how small.
Bombardier agreed to sell the program to British Columbia-based Viking Air for a mere $300m–$250m, net of fees.
Ditto the CRJ program. It’s on life support. It’s a design dating to the 1980s, the passenger experience has long been eclipsed by the Embraer E-Jet and it will be also by Mitsubishi’s MRJ when this jet finally comes on line in 2020. Read more
Bombardier announces sale of Q400 program, exploring options for CRJ
Nov. 8, 2018, © Leeham News: Bombardier today announced the sale of its slow-selling, aging Q400 turboprop program to Canada’s Viking Air.
- The press release from Viking’s parent company is here.
Viking previously purchased out-of-production Bombardier/de Havilland aircraft programs, including the Twin Otter, Beaver and CL-415 firefighting bomber.
Viking Air previously purchased the Bombardier de Havilland Twin Otter program and restarted production. Now, it’s buying the slow-selling Q400 program for a mere $300m. Photo via Google images.
Twin Otter production was restarted. The Beaver was not an is not in the cards to be restarted. The CL-415 was limping along, and no longer a contributor to Bombardier’s cash flow and profits.
“The Company entered into definitive agreements for the sale of the Q Series aircraft program and de Havilland trademark to a wholly owned subsidiary of Longview Aviation Capital Corp. for approximately $300m,” Bombardier said in a press release. It also announced the sale of other assets for $800m. The two deals are expected to close in the second half of 2019.
The low price reflects the struggles the Q400 has had for years. Bombardier lost money on the Q400 in recent years.
Bombardier also said it is considering its options for the aging, struggling CRJ program. Read more
Accounting Standards Call Out Airplane Orders with Questionable Credit
By Dan Catchpole
Danieljcatchpole[at]gmail[dot]com
Nov. 6, 2018, © Leeham News: Like countless other businesses, Boeing this year adopted new accounting standards, known by the acronym ASC 606. The new rules did not significantly affect the company’s balance sheet. However, it did result in some noticeable changes to its orders and deliveries page.
Boeing added a line—dubbed ASC 606 Adjustment—to its total order table. It also moved some orders around within the order book, shifting them from the operators to Boeing Capital Corp., the aerospace giant’s financing arm.
Bombardier squeezed by ATR, Embraer, Mitsubishi
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Introduction
Oct. 22, 2018, © Leeham News: Bombardier has a firm backlog of 67 Q400 turboprops. ATR has a backlog of 256 through Oct. 20, according to the Airfinance Journal Fleet Tracker.
This is an 80% market share for ATR.
Bombardier has 83 CRJ jets of all models in backlog. Embraer has 442 orders for all E-Jet models. Mitsubishi has 213 firm orders for its MRJ70/90.
This is just an 11% market share for the CRJ.
These figures illustrate why the market doubts Bombardier’s long-term future in commercial aerospace.
Summary
- The Q400 and CRJ are aging aircraft designs.
- Minor enhancements don’t address the underlying issues.
- New competition is squeezing BBD.
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
Pontifications: Workforce plan for NMA to be announced soon
By Scott Hamilton
Oct. 1, 2018, © Leeham Co.: The Choose Washington NMA task force said last week it will release this month recommendations for improving aerospace workforce activities in Washington.
It’s about time.
The task force was appointed by Gov. Jay Inslee to come up with a plan to persuade Boeing to choose Washington as the assembly site for its prospective New Midmarket Airplane, the NMA.
Two studies, one by the Teal Group and the other by Price Waterhouse Cooper, conclude Washington is the best aerospace cluster and location to build the NMA. The conclusions are unsurprising, given the maturity, size and scope of the cluster in Puget Sound (the greater Seattle area). No other place in the country has this level of aerospace activity.
But the reports failed to adequately address the top priority that Boeing has: the need for skilled workers and engineers.
At long last, the NMA council is getting there.
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.
With a month to elections, Embraer bolsters backlog
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Introduction
Sept. 10, 2018, © Leeham News: With the Brazilian elections less than a month away, the outcome of the presidential race will determine whether the proposed joint venture between Embraer and Boeing will be approved.
Embraer is Brazil’s most visible and prestigious international company. The government has a “golden share,” giving it veto power over certain transactions, including the Boeing deal. Boeing will own 80% of the new JV that will be for EMB’s commercial business only. Embraer will own 20%.
The incumbent government says it will approve the joint venture; the opposition party says it will veto the deal.
Summary
Including orders, options and LOIs:
- Production slots are oversold through 2023.
- The skyline quality has some challenges.
- Only three dozen firm orders were announced at Farnborough; the balance has to be firmed up.
Pontifications: Supply chain melt down to get worse, says manufacturer
By Scott Hamilton
Sept. 3, 2018, © Leeham News: There is more evidence the aerospace supply chain is in meltdown—and it’s going to get worse, a manufacturer tells LNC.
The OEM requested anonymity to speak frankly.
As aerospace analysts gather this week in Seattle for their annual investors day at Boeing, based on the research notes I see, there’s little indication they recognize the magnitude of the evolving problems with the supply chain.
Although the focus recently has been on Boeing and analysts will visit Boeing Wednesday, the issues affect all the OEMs.
I wrote about this 30 days ago. Since then, another Boeing supplier last month acknowledged late deliveries of key parts, reports the Puget Sound Business Journal.
This was followed by a Bloomberg report that Lufthansa Airlines continues to have shortages from Pratt & Whitney for the GTF engines powering the A320neo.
Since then, I’ve had my own additional conversations with the supply chain. The production ramp ups that already have been announced and those being contemplated are in peril and all manufacturers are being affected.
Pontifications: Boeing aid to Jet Airways uncommon but not unusual
By Scott Hamilton
Aug. 27, 2018, © Leeham News: Boeing is giving financial help to India’s Jet Airways, according to a news report.
This doesn’t come as a surprise.
Jet Airways has 225 737 MAXes on order (50 direct, the rest listed via lessors). It’s also in what appears to be dire financial straits.
Media reports indicated the airline was possibly going to be out of business in 60 days and it deferred releasing its financial results “indefinitely.” The government is going to probe the airline, according to a press report.
The Boeing aid is not common but it’s not unknown, either.