Leeham News and Analysis
There's more to real news than a news release.
Pontifications: A350 launch aid, Emirates and the A380, Bombardier and U-Turn Al
By Scott Hamilton
March 5, 2015: A350 Launch Aid: Boeing and the US Trade Representative got in a big twist around 2006 when Airbus said it would accept more than $1bn in launch aid from Germany for the A350. At that time, the US and European Union had recently launched the international trade complaints before the World Trade Organization (WTO), but the A350 came after the complaint was filed and the WTO refused the US request to add it to the proceedings.
Germany, in a political snit, later said it would withhold part of the launch aid because Airbus hadn’t promised the number of jobs in connection with the program to Germany that politicians wanted.
Odds and Ends: Turkish tests A380; Boeing’s cash out; A400M milestone before Airbus Group results
18 Feb 2015: Turkish Airlines is contemplating testing A380 operations according to Blomberg by wet leasing two A380 from Malaysian Airlines. Turkish did the same when they tested the Boeing 777 before ordering it, then by wet leasing 777 from Jet Airways.
The deal would be good for both Turkish Airlines which could test the A380 to see if there is sufficient demand on their densest routes and for Malaysian Airlines as recent disasters has meant they no longer need the capacity of their six A380.
Probable destinations for Turkish would be London Heathrow and JFK. The two aircraft would be operated by Malaysian Airlines pilots and Malaysian would also furnish half the cabin crew during the first six months, the other half coming from Turkish. After the initial period there would be a dry lease phase where Turkish would continue with own crews. A third backup aircraft should be part of the deal.
Boeings CEO, Jim McNerney, has told investors at a Barclay’s investor conference that Boeing can use of to 80% of its free cash flow to pay back to investors without endangering planned R&D projects reports Reuters. Partly this comes from being able to keep the 777 production rates at around the current 100 aircraft per year in the bridge to the 777X. To entice airlines to continue buying the present 777, Boeing is working on improvements to the aircraft that will increase the efficiency by 2 %, half of which will be coming from improved GE90 engines and half from airframe changes.
McNerney further said the higher than expected deferred 787 productions costs were due to investments in production methods and the labor costs not coming down as expected. He also commented on the work on a new aircraft for the market between the present 737 and 787, “the 757 market” where he said the only thing which is clear is that the airlines want a slightly larger aircraft and we don’t see the market needing a solution in the near to mid term.
Airbus Groups results will be announced in a press conference from Munich Friday next week and their Military aircraft division is working on the outstanding improvements they owe A440M customers. Timely before the press conference they have now demonstrated the A400M working as a combined logistical transporter and tanker. In a series of rendezvous over four flights they transferred a total of 27 tonnes of fuel to two Spanish Air Force F18.
A400M filling up two F18 with fuel. Source: Airbus.
From the press release: “With a basic fuel capacity of 50.8 tonnes which can be increased by the use of extra cargo hold tanks, the A400M is the most capable tactical tanker in the market. The standard A400M aircraft has full provisions for air-to-air refuelling (AAR) operations already installed and only requires the rapid installation of the optional air-to-air refuelling kit to become a tanker.”
Our article shows that this is but one of the capabilities that should have been in delivered aircraft by now, Airbus is expected to announce further provisions for A400M development at the event.
Boeing 757 MAX: why its operating economics does not work
By Bjorn Fehrm
Introduction
Feb 12, 2015: In a series of articles during the autumn we covered the replacement scenarios for Boeing’s 757-200 when used for long haul passenger operations. The series also included an interview with Boeing’s head of new airplane studies, Kourosh Hadi, director of product development at Boeing where he outlined what Boeing studied and why.
This week The Wall Street Journal published an article portraying that Boeing seriously considered launching a re-engined 757 as a response to Airbus A321LR. Boeing has since vehemently denied the story and we have given the reasons why it does not make sense for Boeing.
As a complement we show the operational economical analysis that we did at the time of our 757 articles, now updated to the exact modifications suggested by The WSJ, a new engine and new winglets paired with modern avionics.
Exclusive: Emirates Airlines gets pitch for 100 Boeing 747-8s
- Update, 3:30pm PST: For those who may not be adept at reading literally what was written, we did not say Boeing made the pitch.
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
Muilenburg’s challenges as Boeing CEO
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Introduction
Jan. 27, 2015: Dennis Muilenburg has been the No. 2 at The Boeing Co. for a little more than a year. He was named vice chairman, president and COO in December 2013.
Jim McNerney
His boss, Chairman and CEO Jim McNerney, turned 65 last August. Sixty-five is the mandatory retirement age, but this has been waived before and McNerney is widely understood to want to stick around through Boeing’s 100th Anniversary in 2016.
The industry is buzzing with reports that McNerney might move up soon to
Dennis Muilenburg
non-executive chairman, with Muilenburg assuming the CEO title.
If and when Muilenburg becomes CEO, he faces a laundry list of challenges.
Summary
- Strong competition from Airbus that is getting stronger;
- Continued cost cutting;
- Learning the Commercial Airplanes business;
- Declining defense business and revenues, putting pressure on profits and cash flow;
- Flight testing and development of the KC-46A;
- Development of the 737 MAX and 777X and proving that delivering new airplane programs on time and on budget can be achieved again;
- Selling enough 777 Classics to maintain production rates to the 2020 EIS of the 777X;
- Dealing with labor unrest with its Seattle area unions and a new attempt to organize the Charleston 787 plant; and
- Deciding whether to take that “moonshot” and launch new airplanes earlier than the 2030 EIS McNerney set as policy.
Fundamentals of airliner performance, Part 6; The engine
By Bjorn Fehrm
19 Jan 2015: There is a lot written about the fundamentals of how aircraft fly. It is something that fascinates people and it generates a high level of understanding of these fundamentals. The same is not true for the airline turbofan engines in use today; their detailed function remains a bit of black art.
To some extent this might be because what is exiting in the engines (the thrust) is generated behind closed doors. The only visible part of the process is a rotating fan face and sometimes a slight miss-colored exhaust out the other way. There is also at takeoff a funny buzzing sound interspersed with the general engine noise. Apart from that, the most that one sees is a round nacelle and that is it.
Airbus reveals record orders at annual press conference
By Bjorn Fehrm
Toulouse 13 Jan 2015: Airbus today held their annual press conference where they among other things revealed their final numbers for orders and deliveries. The press conference was hosted by Airbus CEO Fabrice Bregier accompanied by COO Customers John Leahy, new COO Tom Williams and new Head of Programs Didier Evrard.
Airbus in 2014
Bregier started with pointing out that 2014 was a very eventful year for Airbus. Airbus did their customary end of year sprint and passed Boeing for net orders with 24 aircraft netting 1456 commands, Figure 1.
Figure 1. Airbus orders for 2014. Source: Airbus.
On the delivery side Boeing is ahead with 723 deliveries versus Airbus 629, Figure 2.
Figure 2. Airbus deliveries for 2014. Source: Airbus.
Further Airbus certified the A350 and delivered the first aircraft to its launch customer, Qatar Airways. It also launched the A330neo and got 120 orders during the year. Finally they flew the A320neo first prototype.
Redefining the 757 replacement: Requirement for the 225/5000 Sector
By Bjorn Fehrm
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Introduction
25 Feb 2015: Speculation continues to ramp up during the last weeks and months about what Boeing is up to in the 180 to 250 seat sector and what might be Airbus’ response on top of the A321LR. The segment is not well covered today within production aircraft where 737-900ER and the forthcoming MAX 9 cover up to 210 seats and A321-200 and A321neo up to 220 seats. Both fly their passengers up to a realistic mission of 3000nm, i.e. transcontinental USA.
The next in production aircraft are 787-8 and A330-200 at 240 to 280 seats. These are long range dual aisle aircraft with empty weights more than double of the former pair. The 787-8 and A330-200 per seat economics on shorter missions are therefore in another ball game.
The only aircraft that currently bridges this gap is the out-of-production Boeing 757 and there has been much debate how this shall be replaced. We have covered this question in a number or articles focusing on in turn:
We also covered the study work underway at Boeing to cover this segment. We will now dig deeper into this corner after Boeing has unequivocally stated it does not see a re-engine 757 covering this segment and any aircraft that the airlines want should be a bit larger than the 757.
Summary:
Over a series of articles we will cover:
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Posted on February 25, 2015 by Bjorn Fehrm
Airbus, Airlines, American Airlines, Boeing, GE Aviation, Leeham News and Comment, Premium
737 MAX, 747-8, 757, 787, Airbus, Boeing, KC-767