Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- 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
- Boeing’s future depends on FAA approvals May 26, 2025
HOTR: Boeing could further cut 787 production rate—JP Morgan
By the Leeham News Staff
Jan. 20, 2021, © Leeham News: There is risk of another production rate cut for the 787, JP Morgan wrote in a Jan. 12 note.
Boeing already is reducing the rate to 5/mo this year. There are an estimated 60 787s in inventory due to production and quality control issues discovered last year that halted deliveries in November-December.
Boeing 787 family. Source: Boeing.
Outlook 2021: Embraer faces recovery from failed JV, COVID
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By Bjorn Fehrm and Vincent Valery
Introduction
Jan. 7, 2021, © Leeham News: Embraer faces the twin challenges this year: recovering from the aborted Boeing joint venture and COVID.
Neither is going to be easy.
Embraer reintegrated the Commercial Aviation and 60% of its services unit back into the parent company.
Recovering from COVID depends on how soon and widespread vaccinations are accepted worldwide.
And, the E-Jet product line with its latest E2 variant has challenges.
Summary
- Overcoming the failed Boeing tie-up.
- Abating competition.
- Positive market outlook.
- E1 customers in one market…
- And E2 customers in the others.
Pontifications: Outlook 2021 Series begins today
By Scott Hamilton
Jan. 4, 2021, © Leeham News: Beginning today through next week, Leeham News presents its annual Outlook series for the coming year.
We’ve been doing this for years. In recent years, the Outlook reflected continued growth in commercial aviation. The industry had the longest upward tick in the more than three decades I’ve been involved in the sector.
Not this year. As I wrote before the Christmas-New Year’s holiday period, 2020 was the worst year for commercial aviation I’ve ever seen in 41 years.
This year is the beginning of the end of the COVID crisis. Yes, the vaccines began distribution in December, but large spikes in COVID cases began simultaneously and are predicted to climb higher through the first quarter.
Over the coming days, as LNA provides its Outlook for 2021, readers will see what we believe will happen.
Pontifications: 2020 Retrospective–the worst ever seen
By Scott Hamilton
Dec. 21, 2020, © Leeham News: This is my last Pontification of 2020. I’ll be off between the Christmas and New Year’s holidays.
It’s only fitting to look back at what is the worst year in commercial aviation—ever.
I’ve just completed my 41st year in this industry. I’ve seen two Gulf Wars, SARS, 9/11, the Great Recession and several economic cycles.
Lockheed and McDonnell Douglas exited the commercial airliner business.
I’ve seen three groundings: the McDonnell Douglas DC-10, Boeing 787 and 737 MAX. I’ve been on site of two significant crashes: the American Airlines DC-10 in Chicago and Delta Air Lines’ 727 in Dallas. I flew over a third, a Delta L-1011 in Dallas the day after it happened.
I worked for the first new airline certified by the Civil Aeronautics Board in 40 years, the first Midway. I also went through one bankruptcy and one merger, each part of the deregulation shake-out.
As a reporter, I covered some of the business giants, including Bob Crandall, Herb Kelleher, John Leahy and others.
It’s been a great four decades.
But nothing compares to the global industry disaster of 2020.
Podcast: 10 Minutes About Embraer’s Turboprop
Dec. 7, 2020, (c) Leeham News: Embraer studies whether to develop a new generation turboprop to compete with and replace the ATR-72 and De
Havilland Canada Dash 8-400. Both of these airplanes were designed in the 1980-90s, although each went through updates and modernization.
Developing a new turboprop has lots of challenges. Not the least is the size of the market.
Embraer’s preliminary concept for a new generation turboprop airliners. Source: Embraer.
LNA’s Scott Hamilton and Bjorn Fehrm discuss the Embraer “E3” concept in the next installment of the “10 Minutes About” series of podcasts.
Exclusive: Embraer turns attention to cargo market, reports Airfinance Journal
By Olivier Bonnassies
Dec. 1, 2020, (c) Airfinance Journal: Embraer is studying the cargo market with a view to launching a freighter conversion programme, sources tell Airfinance Journal.
The Brazilian manufacturer aims to develop a secondary market for converted models in parallel to E2 jet sales and is set to make a decision on a potential Embraer E-Jet freighter conversion in December.
Embraer is weighing P2F conversions for the E195 and E190 E1 jets. The E175 doesn’t have room for a cargo door forward of the engines. Embraer photo.
Embraer was unavailable for comment.
The larger E195 model was involved in Azul Linhas Aereas cargo transportation flights earlier this summer after Brazil’s civil aviation authority granted an exemption for the carriage of additional freight on Embraer passenger aircraft.
“The E190 conversion project is independent from Azul cargo flights,” says one source with knowledge of the manufacturer’s plans. “The idea behind the conversion programme is to get a long-term OEM solution for those fleets,” the source adds.
The Embraer E-Jet freighter conversion will focus on the E190 and E195 models as they fill a gap between the Boeing 737-300 and ATR72 models.
The E190 model is the second-most successful aircraft in Embraer’s product line after the E175. As of 30 September, Embraer had delivered 565 E190s and had a backlog of three units.
Embraer is not studying potential conversion for the smaller members of its fleet because they would lack clearance between the main deck cargo door and the engine, Airfinance Journal understands.
Potential feedstock of E170/175 aircraft is another consideration, although the Brazilian manufacturer continues to sell the E175 model and had a backlog of 153 aircraft and 261 options at the end of the third quarter.
Embraer’s 3Q2020: Embraer announces net loss of $148m
By Bjorn Fehrm
November 10, 2020, ©. Leeham News: Embraer presented its 3Q2020 results today. The revenue was down 35% compared to 3Q2019 at $759m ($1,176m 3Q2019) at deliveries of seven E-Jets (17 3Q2019).
Net loss was -$148m (-$48m 3Q2019), which does not include special charges. Liquidity remains adequate at $2.2bn after issuing new credit facilities during the quarter.
HOTR: With MAX nearing recertification, Boeing has bigger problem
By the Leeham News team
Oct. 27, 2020, © Leeham News: Boeing’s 737 MAX may be nearing recertification and airlines worry about passenger acceptance.
But Boeing’s larger MAX problem is its general product line-up.
LNA pointed out the poor sales of the 7 MAX in the past. We’ve also compared the lagging sales of the 9 MAX and 10 MAX compared with the A321neo.
As a result of the MAX grounding and now COVID-19’s disastrous financial impact on airlines around the world, more than 1,000 orders have been canceled or reclassified as iffy under the ASC 606 accounting rule.
Airbus doesn’t publicly reclassify the European equivalent of ASC 606. But LNA in July estimated how many A320s would be similarly classified. At that time, about 425 appeared to be similarly subject to ASC 606 if this accounting rule was applied to Airbus.
Lessors to Take Growing Share of Fleeting the Future
By Kathryn B. Creedy
Air Lease Executive Chair Steven Udvar Hazy expects lessors to play a larger role in aircraft fleeting in the future, according to comments made during yesterday’s Aviation Week Fireside Chat with the lessor.
“I don’t see lessors going below 40%,” he told Air Transport World Editor Karen Walker. “I see it creeping up to perhaps 50% or 55% and that includes operating leases and various other exotic mechanisms.”
Udvar Hazy pointed to the poor financial shape of the world’s airlines which have used all their current levers to increase liquidity to ride out the Covid 19 crisis.
Pontifications: Boeing’s latest forecast raises more doubt than hope
By Judson Rollins
Oct. 12, 2020, © Leeham News: Every year, like clockwork, when Boeing publishes its 20-year Current Market Outlook, there is always another upward revision in forecast demand for new aircraft.
So, when the Chicago-based OEM admits that demand has taken a long-term hit, you know the situation must be dire.
Last week, Boeing belatedly published its annual CMO forecast for global commercial jet production and services. The forecast was quite a comedown as it marked a 2% fall from Boeing’s previous expectations for aircraft demand, with a whopping 10% drop for widebodies and freighters.
Airbus has withheld its 2020 Global Market Forecast while it continues to assess the impact of COVID-19. Read more