Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Assessing the 25 YOA aircraft factor
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Introduction
Click on image to enlarge.
Sept. 21, 2017 © Leeham Co.: Airbus and Boeing look ahead to 2021 and the next several years when wide-body aircraft begin turning 25 years old to spur orders for this sector.
Boeing specifically points to this period as one reason for the announcement last week that it will boost production of the 787 to 14/mo beginning in 2019.
Summary
- There already are 1.4 times more wide-body airplanes scheduled for delivery in 2021-2025 than there are aircraft turning 25 years old.
- The next surge in aging aircraft comes ~2030.
- Middle of the Market aircraft isn’t factored in.
Worries increase over Middle Eastern airlines
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Introduction
Aug. 28, 2017, © Leeham Co.: Market sources are increasingly pointing to weakness in the Middle East airline sphere as a threat to existing Airbus and Boeing
Emirates Airline holds the future of the Airbus A380 in its hand, so-to-speak. Source: Emirates.
orders.
Emirates Airline, Etihad Airways and Qatar Airways are the Top 3 of Boeing’s Top 10 wide-body customers.
These three also represent 73% of Boeing’s 777X order backlog.
Qatar and Etihad are the Nos. 2 and 3 wide-body customers at Airbus (after AirAsiaX); Emirates has slipped to No. 8.
The financial trouble at Etihad, exacerbated by its poor investments in the now-bankrupt Alitalia Airlines and AirBerlin, have been well documented.
Emirates’ profits have fallen dramatically and is facing over-capacity. Qatar Airways is now isolated by intra-geopolitical events.
Summary
- Emirates and Etihad already deferred Boeing orders.
- Lessors beginning to express concerns.
- Customer concentration for 777X worries some.
- A380 future rests largely with Emirates.
Mid-year production update at Airbus
July 27, 2017, © Leeham Co.: It’s mid-way through 2017 and LNC is taking its second look at production and delivery stream flows for the Big Four airframe manufacturers.
We examined Boeing Monday in advance of its earnings call Wednesday. Today we look at Airbus in advance of its earnings call today. We look at Bombardier and Embraer next Monday.
We use the Airfinance Journal Fleet Tracker as the basis for our exam.
Caution overhangs 777X program-(Update)
Update: This story is corrected.
July 21, 2017, © Leeham Co.: Lufthansa Airlines’ indications that it may reduce the order for 20 Boeing 777-9s underscores caution with which the program should be viewed.
Emirates Airline already rescheduled its first deliveries from 2020 to 2021.
The largest customer for the 777X, with 150 orders, EK is now pressured with falling profits, excess capacity and it’s one of three Gulf airlines under attack by the Big Three US carriers for alleged violations of Open Skies pacts.
Pontifications: 10 years after the Boeing 787 roll-out
By Scott Hamilton
July 10, 2017, © Leeham Co.: Saturday was the 10th anniversary of the roll-out of the Boeing 787. The date was 7/8/07, nicely coincided for the airplane’s name.
The event was an extravaganza never seen in commercial aviation, surpassing even that of the Boeing 707 in 1954.
Technology, of course, had a lot to do with the hyper-event 10 years ago. There was no Internet in 1954, no cable news networks, no laser light shows, etc.
There were also no orders for the 707 in 1954, compared with the hundreds for the 787 in 2007.
Pivotal year for A380
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Introduction
June 12, 2017, © Leeham Co.: This is a pivotal year for the Airbus A380.
Sales have dried up. Singapore Airlines is retiring five early versions of the airplane and there is no new home for them—these may headed for the scrap heap.
The Middle Eastern carriers, which are the largest users for the airplane, are in turmoil.
The backlog remains weak. Aside from Emirates Airline, which as noted is in turmoil, the other orders are with carriers that are unlikely to take delivery.
Summary
- The A380’s future rests with Emirates Airline.
- Any Performance Improvement Package is dependent upon Emirates placing a new order.
- Boeing’s new 20-year forecast eliminates the passenger 747-8 from the Very Large Aircraft sector. Airbus continues to forecast a need for 1,400 VLAs.
- Airbus to decide this year whether to reduce production rate below 1/mo in 2019.
Etihad Airways: where to now?
By Bjorn Fehrm
May 24, 2017, ©. Leeham Co: Etihad Airways appointed a new interim group CEO and CFO on 8th of May. The strategy of James Hogan, Etihad CEO since 2006, to grow the airline through partner alliances, coupled with minority investments, has hit trouble.
The latecomer to the Gulf carrier’s growth party is now set for a strategy review by an incoming CEO.
We describe the background to the problems and go through the options for Etihad’s future. Read more
Pontifications: Emirates profits drop 83%, MC-21 and more news last week
By Scott Hamilton
May 15, 2017, © Leeham Co.: It was a busy news week last week.
- Emirates Airline headlined its 29th consecutive year of profits, but downplayed an 83% decline.
- The Irkut MC-21 moved to the tarmac, an indication first flight may be coming shortly.
- Multiple media reports indicate that electronics flight ban from the Middle East may be extended in part to all of Europe.
- Boeing suspended test flights on the 737 MAX after CFM discovered some quality issues in some LEAP 1B engines.
Let’s look at these events.
Trump reverses self on ExIm Bank
April 13, 2017, © Leeham Co.: President Donald Trump reversed himself and now supports the US Export-Import Bank, according to news reports. He will appoint
Donald Trump suddenly discovered the US ExIm Bank was a “profit center” for the US Treasury. Photo via Google images.
two people to long-standing vacancies to allow ExIm to approve deals more than $10m.
ExIm, Trump now says, is a profit center for the US Treasurer.
His sudden understanding on this revelation is like his eye-opening realization that dealing with the North Korean situation isn’t easy.
Supporters of ExIm pointed out for years that the Bank returns money to the US Treasury.
Middle Eastern airline turmoil hits Boeing
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Introduction
April 10, 2017, © Leeham Co.: Tim Clark of Emirates Airline said the new breed of long-haul, low cost carriers are hurting EK’s load factors and yields.
Etihad Airlines’ business strategy of taking financial stakes in LCCs hasn’t produced the positive financial results desired.
Three big airlines, EK, EY and Qatar Airways, face over-capacity now compounded by electronic carry-on restrictions by the US and UK.
Figure 1. Click on image for a crisp view.
The thee carriers largely compete for the same connecting traffic through hubs only 72-235 miles apart (Figure 1). This is like having hubs in Milwaukee and Chicago (81 air miles apart) and Chicago-Detroit (237 air miles) with much, much smaller domestic catchment basins.
Summary
- Declining financial results for Emirates, Etihad.
- Deferring airplanes: 787s, 777X
- Long-haul LLC, Trump travel ban, poor investments hurt the airlines.