Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- At long last, Boeing appears near certification and EIS for 777X
- Air India Flight 171 Preliminary Crash Report Is Unclear Regarding Pilot Actions
- Bjorn’s Corner: Air Transport’s route to 2050. Part 30.
- It’s official: MTU’s engine leader named CEO of Airbus Commercial from Jan. 1; future of Open Fan and A220-500 shifts to him
- Embraer E2: Where will the orders come from?
Odds and Ends: Airbus-Mobile, con’t; final Farnborough update
Airbus in Mobile: We doubt Boeing is really Sleepless in Seattle but this piece is pretty amusing.
Take that, Part 1: Boeing continues to whine about WTO.
Take that, Part 2: So’s your Old Man.
Here are a few final thoughts in advance of the Farnborough Air Show:
- It will still be Boeing’s show, with MAX orders or MOUs or Commitments or Love Letters amounting to the hundreds. Look for Air Lease Corp, GECAS, Aeromexico, perhaps some Chinese companies and others to announce.
- Airbus’ John Leahy has been tamping down expectations all year but Mr. Showman doesn’t like to be left standing on the sidelines. While you’re watching Boeing’s left hand, don’t be surprised if Leahy pulls a rabbit out of the hat with Airbus’ right hand and ends the show with several hundred orders of his own.
- Yes, we predict the Airbus-Boeing sniping will continue. And the sun will rise in the East and set in the West.
- Embraer isn’t even holding a press briefing. So we don’t expect much out of them this year.
- Bombardier may or may not have CSeries orders to announce. The market doesn’t expect (m)any, concluding that the countdown to first flight is what will begin bringing in orders.
- No new program announcements from Boeing (ie, nothing new on 787-10 or 777X). No announcement from Airbus, either, on A350 program developments or the prospect of a long-range, upgraded A330-300 (we think this could come at FAS but just as likely could be later in the year).
- No 90-seat turbo-prop from anyone.
- This is now Ray Conner’s coming out party as the new (and unexpected) CEO of Boeing Commercial Airplanes. Based on our limited contact with Conner, he’s not as affable as the departed Jim Albaugh. It will be interesting to see how aggressively engaging he is with Boeing’s nemesis, Leahy.
Posted on July 4, 2012 by Scott Hamilton
Airbus, ATR, Boeing, Bombardier, CSeries, Embraer
777X, 787-10, 90-seat turbo-prop, A330-300, A350, Airbus, ATR, Boeing, Bombardier, Embraer, John Leahy, Ray Conner
Farnborough Air Show preview
Overview
This is really expected to be a boring show from the perspective of orders. Airbus has been downplaying expectations following last year’s Paris Air Show blow-out of more than 1,200 A320neo orders. How can you match that? The answer is, Airbus can’t.
Boeing will certainly firm up hundreds of 737 MAX commitments, so this will be Boeing’s show. And there is the buzz that Boeing is partnering with Lockheed Martin and NASA (oh, another government subsidy?) to produce a 2,500 mph SST, with details supposed to come at the Air Show. Then there is the leak that the 787 will fly there, the first time in 28 years Boeing has an aerial flying display.
We’ve talked with several journalists and industry personnel who are skipping the Air Show this year. So are we, and we’ve been at the Farnborough and Paris air shows since 2008. We just don’t expect enough news this year that we can’t get from the press releases.
So here are our expectations for the show:
Posted on June 26, 2012 by Scott Hamilton
Odds and Ends: China trojans; China is the biggest threat; EADS ponders own bank
China trojans: we’re not talking about condoms, either. This item from Defense Tech is pretty alarming. And while this piece is also pretty alarming, though it isn’t about China. Or maybe it is. The chips are made by the same company, sourcing them in China.
China is the biggest threat: So says Jim Albaugh, CEO of Boeing Commercial Airplanes. Aviation Week has this article about an Albaugh appearance in the UK.
EADS ponders its own bank: This would give it access to low-cost funds and protect against the Euro, officials say. Here’s an article. Our first thought: since the WTO ruled Airbus launch aid was illegally structured because of below market rates (but did not rule the aid itself illegal), this returns EADS/Airbus to the low-cost funding access. Clever. Wonder what Boeing thinks about this?
Posted on June 1, 2012 by Scott Hamilton
ISTAT Part 3: Lessors Panel: GECAS, ILFC, AWAS, Air Lease Corp
The final panel at the ISTAT meeting is the much-anticipated lessors’ panel consisting of:
Jeff Knittle, president of CIT Aerospace, moderator;
Henri Courpron, Chairman of ILFC;
Ray Sisson, CEO of AWAS;
Norman Liu, CEO of GECAS; and
Steve Udvar-Hazy, CEO of Air Lease Corp.
Paraphrasing:
Posted on March 20, 2012 by Scott Hamilton
ISTAT Part 2: BBD, EMB, Sukhoi, ATR
Chet Fuller, SVP Commercial, Bombardier
Luiz Chiessi, Director of Marketing Strategy of Embraer
Mark Neeley, VP-Marketing, ATR
John Buckley, VP Business Development, Sukhoi Superjet International
Fuller
- CSeries weight validated and will be on spec at EIS.
- Aluminum Lithium is better on fatigue than normal aluminum, much better on corrosion. Combine with composites, D check goes to 15 years. C check improved by 15%.
- 787 first airplane with All-digital architecture, CSeries is second.
- Last all-new narrowbody was A320 family.
- Only aircraft with a 12:1 by-pass ratio; A320neo is 10:1, not sure what ratio Boeing will wind up with on MAX.
- CSeries has better trip costs than E190, with seat costs of A3320neo. There is no magic here, there is just physics.
- BBD has on order: 66 CS100, 72 CS300; 124 options, 10 purchase rights, 45 LOIs.
Chiessi
- Mid-long-haul flights for 70-90 seats increasing in US and elsewhere.
- 48% of EJet deployment is right-sizing by airlines. 26% for new market development.
- Will maintain leadership in 70-120 seat segment, not enter into arena of Airbus and Boeing.
Buckley
- SuperJet International responsible for world product support of Sukhoi for SSJ100.
- Delivered seven aircraft, another in two weeks.
- Expect to deliver 23 this year, 42 next year, 60 in 2014, 75-80 total current capacity but can be increased.
- SSJ100 is only regional aircraft with 2×3, 5 in wider than MD80.
- 10% less fuel consumption than direct competitor.
Neeley
- ATR top turbo prop pick in Airfinance Journal investors poll.
- We’re still making a 50-seat product. We have a family of airplanes.
- Says ATR 72 has same fuel burn per passengers as A320.
- One third of all passengers fly under 300 miles.
Posted on March 19, 2012 by Scott Hamilton
Republic’s Bryan Bedford emulates U-Turn Al
The CEO of Republic Airways Holdings seems to be vying to be America’s version of U-Turn Al, Akbar Al-Baker, the CEO of Qatar Airways.
Bedford appears to be engaged in a campaign to raise questions about the Bombardier CSeries, for which he has orders and options for 80 CS300s, much the same way U-Turn Al alternatively praises then complains about the Airbus A350, Boeing 747-8F (ordered by Cargolux, in which Qatar owns a third) and the Boeing 787. U-Turn Al has also alternative praised, condemned then praised the Airbus A320neo, Bombardier CSeries and the Pratt & Whitney GTF.
Keeping up with U-Turn Al’s about-faces has been a dizzying prospect.
Bedford praised the CSeries when ordering it but has become increasingly skeptical of the program once he ordered the A319neo (with CFM LEAP engines) in what was a financial bailout of his ailing company being dragged down by Frontier Airlines. The Airbus order raised questions whether Bedford would cancel the CSeries since the A319neo competes with the CS300. Bedford initially said the order would stand. More recently, he appears to be doing everything to cast a shadow over the program.
Posted on March 15, 2012 by Scott Hamilton
Airbus, Boeing, Bombardier, CFM, CSeries, Embraer, Pratt & Whitney
737-700, 747-8F, 787, A319, A319neo, A320NEO, A350, Airbus, Boeing, Bombardier, Bryan Bedford, Cargolux, CFM, CSeries, E-190, E-195, Embraer, GTF, LEAP, Pratt & Whitney, Qatar Airways, Republic Airways, U-Turn Al
Another example of a toothless WTO
As long-time readers of this column know, we have utter disdain for the World Trade Organization and its review of international competitive practices, such as the cases of Airbus and Boeing subsidies.
Here is another example of why we have disdain. As noted in this example, the WTO found China to be in violation of WTO rules on raw materials export rules but China did not remove the restrictions.
We’ve previously noted that the WTO found Brazil and Canada to be in violation of export support for Embraer and Bombardier airplanes–and nothing happened.
We’ve previously noted that the WTO has no power to enforce its own decisions and that the trade rules allow the winning country to impose tariffs on industries not involved in the original dispute. Thus, with respect to the Airbus and Boeing cases, the US could impose tariffs on French wine and the European Union could impose tariffs on Washington State wine or apples–or any other industries.
We find this completely ridiculous.
While the US has asked the WTO authority to impose tariffs with respect to the Airbus case, we would be shocked if it followed through (assuming, of course, the WTO authorized action) and tax Airbus imports into the US. The EU would retaliate by placing tariffs on Boeing. Nobody would win.
Posted on March 13, 2012 by Scott Hamilton
Lessor worries about Airbus, Boeing production rates
Here is an expanded version of a story we did last week for Flight Global Pro.
The refrain that Airbus and Boeing are over-producing the core-A320 and 737 programmes resurfaced with lessor AerCap in an interview with The Wall Street Journal.
Aengus Kelly, CEO, chastised the Big Two OEMs for production plans announced so far. Airbus will go to a rate of 42 per month by the end of this year and is considering 44. Boeing plans to hit rate 42 by 2014. Both companies are considering rates as high as 60 per month.
Airbus produces airplanes only 11 months of the year while Boeing is on a 12 month production schedule.
In its 2011 20-year forecast, Boeing predicts there is a need for 23,370 single aisle aircraft in the 90-210 seat category. Airbus predicts 19,165 in the 100-210 seat market.
Based on the announced production rates, and assuming no changes through the 2030 forecast period in production—or for adjustments in the forecasts—Airbus and Boeing will produce 18,551 single-aisle airplanes.
If both OEMs go to rate 60 by 2016, their combined production exceeds their own single-aisle forecasts.
Posted on February 27, 2012 by Scott Hamilton
Airbus, Boeing, Bombardier, Comac, Embraer
AerCap, Airbus, Boeing, Bombardier, Comac, Embraer, Irkut, Mitsubishi
More Odds and Ends: Aircraft list prices, airline break-even
Aircraft List Prices: It took some doing, but we’ve collected the list prices of all the major commercial airplanes. The comparisons are interesting. We’ve tabulated these into seat categories.
List prices, of course, have no relationship to what customers actually pay. Discounts of 25%-30% are common and really good customers–like Southwest Airlines for Boeing–have been known to get discounts of up to 60%.
There are several notables in this list:
- Compare the pricing of the C919 and the MS-21 to the Airbus and Boeing products;
- Compare the Q400NG to the ATR-72-600;
- Compare Airbus to Boeing; and
- Compare CSeries to 737-600/700 and there isn’t that much difference; the gap is wider compared with Airbus.
Is there any particular point to this? Not really–it’s just one of those facts that intrigue us and a host of aviation geeks.
Posted on February 14, 2012 by Scott Hamilton
Malev, Spanair shutdowns add to parked aircraft
Today’s shutdown of Hungary’s Malev Airlines and the recent cessation by Spain’s Spanair adds to the number of parked aircraft and will make it just a little bit more challenging to remarket Boeing 737s and Airbus A320s.
As we noted in a recent post, India’s Kingfisher Airlines is teetering as well.
Malev operated six 737-600s, seven -700s and five -800s. It has operated four Bombardier Q400s and two Embraer 120s.
There is virtually no demand for the -600s and even the -700s have been falling out of favor as fuel prices climb. The EMB-120s have little demand.
Spanair’s failure puts 10 Airbus A320s and five A321s on the market. These are equipped with V2500 engines. As we wrote last month, A320s with V2500s are a bit more challenging to remarket than those equipped with CFM56s.
Posted on February 3, 2012 by Scott Hamilton