Leeham News and Analysis
There's more to real news than a news release.
Shareholders OK Boeing-Embraer JV; court, anti-trust approvals next
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Introduction
Feb. 28, 2019, © Leeham News: Embraer’s shareholders this week approved the joint venture between their company and Boeing, moving another step closer to completion expected by the end of this year.
Boeing will own 80% of the new company and have governance control; Embraer will own 20%.
The shareholders’ action comes after a Brazilian court for the fourth or fifth time enjoined the companies from proceeding with negotiations. Higher courts overturned each previous injunction and will likely do so again.
Global regulatory anti-trust reviews are the step. All decisions are expected by year end.
The KC-390 is the largest plane designed and produced by Embraer. Source: Embraer.
John Slattery, CEO of Embraer Commercial Aviation, gave this take on the pending joint venture in his column on LinkedIn.
Summary
- “NewCo” will be based in Brazil and be responsible for Boeing’s commercial airplanes up to 150 seats.
- A second joint venture is planned for military development.
- The KC-390 is a focus of the second JV.
Pontifications: Which airplanes are revolutionary or evolutionary?
By Scott Hamilton
Feb. 18, 2019, © Leeham News: Last week’s column about the revolutionary Boeing 747 prompted some Twitter interaction asking what other commercial airplanes might be considered “revolutionary.”
I have my views. Let’s ask readers.
There are also three polls below the jump in addition to the usual comment section. Polling is open for one week.
Embraer delivers 90 EJets, finishes 2018 with 368 backlog
Feb. 11, 2019, © Leeham News: Embraer delivered 90 EJets last year, comprised of 67 E175 E1s, 13 E190-E1s, five E195-E1s, one E170 and four 
E190-E2s.
It finished the year with a book:bill of 2.3:1 and a backlog of 368 airliners.
With CSeries, Airbus commands 78% of 100-150 seat sector
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Introduction
Feb. 11, 2019, © Leeham News: Airbus acquired 50.01% of the Bombardier CSeries program last year.
Boeing and Embraer Commercial Aviation received Brazilian government approval last month and now await a nearly-year long regulatory approval process from around the globe.
Based on the announced orders at Jan. 1, Airbus has a 78% share of the 100-150 seat sector following the combinations.
Embraer sold more airplanes in this sector than Boeing: 95 E195-E2s to 70 737-7s.
The former CSeries has 526 orders to 55 for the A319neo.
Summary
- 14% of the A220 orders are classified as “Red” in LNA’s judgment—orders that either should be removed from the backlog or, in one case, is highly questionable due to customer statements.
- Another 11% of the A220 orders are classified as “Yellow,” primarily due to region risk.
- Synergies between A220 and A320 are greater than E2 and 737.
Bombardier, United launch CRJ550
Feb. 6, 2019, © Leeham News: Bombardier’s new approach to replacing aging 50-seat CRJ200s and address persistent complaints about carry-on baggage issues for the CRJ family follows an example set last year by Embraer.
Bombardier’s CRJ550 is a reconfigured version of the CRJ700, with reduced seating, on-board carry-on baggage storage areas and extra legroom.
Initially, these will be reconfigured CRJ700s. Bombardier will offer new-build CRJ700s.
Embarer last year created the 70-seat E175 SC (special cabin), reducing seating from the 76-seat E175 to a 70-seat E170-sized airplane. Embraer no longer offers the E170. More legroom and greater opportunities for premium class seating come with the SC configuration.
Pontificatons: From the sidelines at the AFJ Dublin conference
By Scott Hamilton
Jan. 28, 2019, © Leeham News: Launch by Boeing of the New Midmarket Aircraft (NMA) is pretty much a given, despite a still undecided business case, say people on the sidelines of the Airfinance Journal’s Dublin 2019 conference.
Here is a potpourri of information picked up at the conference, which is attended by about 2,000 people.
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Look at entire portfolio when investing in sub-types, Airbus and Boeing say
Jan. 23, 2019, © Leeham News, Dublin: Investors and lessors should take into account the entire product line offered by Airbus and Boeing when considering sub-types that may 
have few sales to date, officials of the two companies said at the annual conference in Dublin organized by Airfinance Journal.
Tim Myers, president of Boeing Capital Corp., and Mark Pearman-Wright, Head of Leasing & Investor Marketing for Airbus, said the 737-7, 737-9, 737-10, A319neo, A321LR, A330-800 and the new 777X should be looked at in context of the entire 737, A320, A330 and 777 lines when making investment decisions.
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Airbus holds 56% share of backlogs vs Boeing
Jan. 11, 2019, © Leeham News: Airbus trailed Boeing in net orders in 2018 but it still holds a commanding lead in backlog market share.
With the companies reporting their year-end tallies, Airbus has a 56% share of the backlog to Boeing’s 44%.
Airbus carries the day with narrowbody backlog. Its share is 58% to Boeing’s 42%.
Boeing wins the widebody backlog, 53% to 47%, driven by a broader product line, including strong 777F and KC-46A/767-300ERF backlogs.
When the emerging narrowbody airplane programs of China and Russia, and Embraer’s sole entry into the 100-150 seat sector (based on two-class seating), Boeing’s narrowbody share of the backlog drops from 42% to 40%.
Charts are below. Data is based on firm orders only.
Brazil OKs Boeing, Embraer JV
Breaking News: Boeing just announced the Brazilian government approved the proposed “strategic partnership” between Boeing and Embraer.
The deal now begins to make the rounds among global governments for anti-trust approvals.
Officials hope the transaction will gain all approvals by the fourth quarter this year.
The press release is below the jump.
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Airbus poised to out-deliver Boeing in 2019
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- LNC’s Corporate and Enterprise subscribers received this Jan. 3.
Jan. 8, 2019, © Leeham News: Airbus is positioned to out-deliver Boeing this year, boosted by the addition of the Bombardier CSeries acquisition last year.
LNC projects that Airbus will deliver nearly 950 airliners this compared, compared with Boeing’s projected deliveries of about 890 jets.
These are LNC forecasts, not those of the manufacturers. Guidance for the year should come on their respective year-end earnings calls: February for Airbus and Jan. 30 for Boeing.