Rolls-Royce, in a major upset, won the Emirates Airlines order to power 50 Airbus A380s ordered in November 2013. The win displaces Engine Alliance, which to now has been the sole-source provider for EK’s A380s.
Two sources confirmed the RR win. RR and Airbus did not comment on the win. EK and RR have not made any announcement. EA also did not comment.
According to one source, EK determined the RR Trent 900 was determined to be up to 4% more efficient than EA. But it’s unclear if there were other factors involved. Read more
By Bjorn Fehrm
April 7, 2015: There is not a month going by without a strike at some of the European airlines, big or small. The strikes are the tip of an iceberg, which is called “restructuring”; “restructuring for profitability,” “for survival” and for “having a future.”
European airlines are the most unprofitable next to African airlines, according to International Civil Aviation Organization (ICAO). The collected profits from all European airlines are less than one third of the profits in North America. The strikes are called from unions that are fighting managements as these try to change the fundamental cost structure of the airline to be able to compete, not only with Europe internal competitions from LCCs eating away on domestic traffic but now also from Gulf carriers taking away international traffic at an alarming rate. Read more
Feb. 4, 2015: In a pitch designed to save the Boeing 747-8 and simultaneously kill the prospect of an Airbus A380neo, Emirates Airlines has received a pitch for 100 of the slow-selling Boeing, two sources familiar with the situation tell Leeham News and Comment (LNC). This is isn’t yet a formal proposal, as far as we know.
Tim Clark, president of Emirates, said he would buy 100 A380s if Airbus re-engined and launched the neo. The neo would use the new Rolls-Royce Advance engine, according to two different sources. Neither Pratt & Whitney nor GE Aviation, which dominate the current A380 engine market share with its joint venture Engine Alliance GP7200, are interested in developing a new engine for the prospective A380neo, according to public statements by both companies. PW doesn’t offer an engine alone that could be adapted to the size required for the A380neo. GE’s GEnx engine, used on the Boeing 787, is in the thrust and size bracket but would only improve the efficiency with 4-5%, thus not worth the change effort. The smaller version of the GEnx is on the 747-8. Read more
Now open to all readers (Fe. 15, 2015)
By Bjorn Fehrm
Jan 14 2015: In our deep analysis of the Airbus A380, we concluded that there is nothing wrong with the basic economics of the giant airplane. In fact, with today’s fuel prices, the aircraft’s Direct Operating Costs (DOC) are 20% below its alternatives in the market. Yet the aircraft is experiencing its worst sales drought since its launch, despite adding a leasing alternative during 2014 and efforts by Airbus.
To understand why and what Airbus plans to do about it we arranged for an exclusive interview with Airbus Chief Operating Officer-Customers, John Leahy, at the sidelines of Airbus annual press conference.
Dec. 30, 2014: This was a highly active news year. Airbus launched the A330neo and A321neoLR. Boeing firmed up more than 200 orders for the 777X. Emirates canceled 70 A350 orders, a record cancellation when no customer collapse was involved. Boeing and its principal union, the IAM 751, faced off in a bitter contract vote. And on the truly dark side, Malaysian Airlines lost MH370 and MH17.
The Top 10 stories read on Leeham News included all of the above but MH17. Others made the Top 10 list. Here it is:
By Bjorn Fehrm
Dec. 21, 2014: Last week we did a deep analysis of A380 and its competition. It has been windy weeks for the aircraft since the Airbus Global Investor Forum and it was time to bring some needed facts on the table. These facts showed there is a clear difference between the hype being perpetuated in the media and the reality. As we cleared the situation around the A380, we also touched on the large twins that could fulfill at least parts of its missions.
There has been a lot of discussion around these aircraft as well as they form the battle of titans one level down from A380, the large, long-haul market today dominated by Boeing’s 777-300ER (the A380 does not have a real competitor–the 748i is clearly smaller, in fact so much smaller that it will be engulfed by the 777-9X).
By Bjorn Fehrm
Dec. 18, 2014: In our Monday article we go behind the scenes of the doubts that were spread over the A380 by Airbus last week. To complete the picture we now update our competitive analysis that we did in February this year. We then compared the A380 to Boeing’s 747-8i, the 777-300ER and the forthcoming 777-9X. We also included Airbus closest aircraft, the A350-1000.
A lot has happened since then. Airbus has done a lot of work on the passenger area of the A380 to offer increased passenger densities and the pictures of the emerging Boeing 777-9X and Airbus A350-1000 is now clearer.
Sales efforts of the A380 has also progressed, with meager results despite adding a leasing proposition what should make the hurdles of operating a small sub-fleet of A380s lower. To understand why, we interviewed Mark Lapidus, the CEO of Amedeo, the leasing company which specializes in financing and leasing of A380s. We wanted specifically to talk to Lapidus about the reactions of the airlines to the A380 and what problems he saw in selling an aircraft of this type.
In preparing the article we also gathered additional info from Airbus and Boeing, from the former around their work on the cabin configurations and densities, from the latter the maintenance costs for the up and coming 777-9X.
As we did this deeper study, a more nuanced and different picture emerged from the one seen in February. The results busts a number of deeply engraved myths, one being that four engines are more expensive to fly and maintain than two.
Update, 0530 PST Dec. 15: Aviation Week posted an article that indicates Airbus and Rolls-Royce are closing in on an engine deal that will lead to the A380neo and a stretch.
Last week’s Airbus Global Investors Forum proved to be a debacle due to a rogue customer and two miscues by management.
First, Group CFO Harald Wilhelm indicated Airbus may decide in 2018 to terminate the A380 program, causing consternation from Tim Clark, president of Emirates Airlines, which has 44% of the order book. Airbus Commercial management spent a good part of the next day in damage control.
Second, with little forewarning, Airbus told analysts that production rates for the A330ceo would come down in advance of introduction of the A330neo. This news shouldn’t have come as a surprise, but for some it did. If they had closely followed sales efforts for the A330ceo, the lack of success and the production gap, news that Airbus will bring rates down more than the 1/mo decline previously announced shouldn’t have surprised. Still, Airbus had not previously sent strong enough warning signals.
Third, profit and free cash flow warnings weren’t well received.
Finally, Akbar Al-Baker, the prickly CEO of Qatar Airways, chose the first day of GIF to announce he wasn’t going accept delivery of the first A350-900 three days later.
The result: the stock price plunged 10% on Day 1 of GIF and another 4.3% on Day 2.