HOTR: United likely can cancel A350 order with little penalty

By the Leeham News Team

Dec. 5, 2022, © Leeham News: United Airlines appears on the cusp of ordering as many as 100 Boeing 787s, multiple news outlets report. Airbus hopes to sell more A350s to United to supplement the 45 already on order.

But these 45 A350-900s are an order that has been viewed as iffy since United merged with Continental Airlines. Although ostensibly United was the surviving carrier, in reality, Continental was the survivor. The latter’s management displaced United’s old management. The livery retained was Continental’s.

The A350 order was placed by the old United management. The new executives added to the United order, but Continental had been an exclusive buyer of Boeing aircraft and executives were predisposed toward Boeing. UAL now has 120 Airbus A321XLRs on order. But this came after Boeing couldn’t decide whether to launch the New Midmarket Airplane after years of dithering. With a large fleet of Boeing 757s aging and in need of eventual replacement, United could no longer wait for Boeing to make a decision.

United already has a large fleet of 787s. Adding the A350s will provide an extra range that the 787s don’t have. But how many routes need the extra range to justify another fleet type?

LNA believes that United can cancel the orders for 45 A350s at little cost. The deposits may easily be applied to orders for more A321s, but cancellation penalties are believed to be de minimis. Based on 2018 list prices—the last ones published by Airbus—United could get about 110 more A321s in exchange for the A350s. (The number is probably a little less since the XLRs are more expensive than the A321neo “standard;” the list price makes no distinction between the sub-types.)

LNA expects United to cancel the A350s sooner than later and add to the A321 order.

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HOTR: Eviation claims “almost” 300 orders worth more than $2bn; Boeing vs Airbus

By the Leeham News Team

 Nov. 10, 2022, © Leeham News: Eviation, the developer of the all-electric airplane Alice, today added another 20 commitments to its tally for the aircraft. The latest is from Australia’s Northern Territory Air Services. The commitments are in a Letter of Intent.

A short time before this latest commitment, Eviation issued a press release stating it had “almost” 300 orders (not “commitments and orders”).

“Our order book passing the US$ 2 billion mark is a significant commercial milestone,” said Gregory Davis, President and CEO of Eviation.

“With almost 300 aircraft now on order, the Alice is receiving strong customer endorsement,” Eviation VP Eddie Jaisaree said.

The press release is a little ambiguous on figures: “almost” 300 airplanes and “passing $2bn.”

Using 300 and $2bn for the math, this means the airplanes are $6.67m each. That’s $741k per seat. This compares with $506k per seat for a 787-9 (296 seats, $150m true sales price) and $309k per seat for a 737-9 (178 seats, $50m true sales price). The ATR-42, with 48 seats and a sales price as low as $12m, is $250,000 per seat.

The capital cost of the Alice is awfully pricey and makes the economics challenging, not even counting the maintenance costs of replacing the batteries after a short period of time.

When asked about these facts, Eviation’s PR firm provided this response from the company.

“Our cost is competitive with aircraft in the same class as Alice, and customers will see significant cost savings in operating and maintenance costs. For example, Alice will reduce operating costs by two-thirds when compared to traditional aircraft.”

LNA’s Bjorn Fehrm has analyzed the operating cost of electric, hybrid, and hydrogen-powered aircraft in a series of articles. His conclusions are that these methods are a lot more costly than promoted.

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HOTR: Trump’s 757 return

Oct. 26, 2022, (c) Leeham News: There was a bit of a splash on the Internet when the VIP-configured Boeing 757 owned by Donald Trump was delivered to Palm Beach (FL) after undergoing refurbishment and maintenance. The airplane had been in storage since Trump assumed the presidency in 2017.

Trump critics and cynics claimed the airplane has a range of 4,400 statute miles and speculated that Trump might flee to Saudi Arabia or Moscow now that he has his 757 back.

LNA’s Aircraft Performance Model (APM) was put to use to analyze just how far the 757 can go. For this exercise, we ignored winds, hold times, and alternates—focusing only on the advertised range. Passenger-configured 757-200s (Trump’s model, with Rolls-Royce engines) can seat up to 200 people. Trump’s VIP-configured airplane can carry 25 or one—it’s up to Trump. VIP configuration weighs a lot, so this is taken into account in our analysis.

Distance from West Palm Beach (FL) and Bangor, Maine, to Moscow. Analysis by Leeham News Aircraft Performance Model. Graphic from Great Circle Mapper.

The APM analysis concludes that with the maximum allowable extra fuel tanks, the aircraft can go up to 5,000nm when flown with 25 passengers of equivalent weight. Without the extra fuel tanks, the range is 4,000nm. As a general rule, winds, hold time and alternates reduce the range by up to 20%, depending on the flight’s direction.

Ranges from Bangor, Maine, via Leeham News Aircraft Performance Model. Graphic Great Circle Mapper.

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HOTR: Amazon to add A330 P2F to Prime Air fleet

Oct. 21, 2022, © Leeham News: Amazon’s Prime Air will add 10 Airbus A330-300 freighters to its fleet from 2023. The aircraft will be converted by EFW, in which Airbus is a partner, and leased from Altavair of Issaquah (WA).

Source: Airbus.

These are the first A330 freighters that will be operated under the Prime Air brand. Hawaiian Airlines, an A330 operator, will operate the planes. Prime Air largely contracts out flight operations. Atlas Air flies Boeing 767-300ERFs and Sun Country fly Boeing 737Fs for Prime Air.

EFW now has orders for more than 100 A330 conversions, nearly all for the -300 model.

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HOTR: China-US relations continue to dive

By the Leeham News team

Oct. 17, 2022, © Leeham News: The G-7 meeting among the leaders of world’s top countries is next month. There were hopes that the USA’s President Biden and China’s President Xi would meet privately to work out some of the differences between the two countries. Resolving key differences is viewed as key to Boeing’s relationship with China.

The private meeting now is questionable. Biden last week imposed additional sanctions on the microchip industry. China is dominate in this sector. Beijing is now stonewalling setting an agenda for the Biden-Xi meeting.

Easing tensions between the US and China is crucial for Boeing. China historically accounted for between one quarter and one third of Boeing’s deliveries, depending on the year. There are more than 100 737 MAXes in storage built for Chinese airlines and lessors. (At one point, the number was 140. But lessors are allowed to accept deliveries, provided the lessee is not in China.)

Although China’s regulator, CAAC, recertified the MAX nearly a year ago, there were conditions required before the planes could return to service. Compliance has been slow. There were 97 MAXes in service in China in 2019, when CAAC became the first regulator to ground the fleet after the second MAX crash within a five-month period.

Boeing publicly decried the geopolitics between the US and China at one point as a roadblock that must be cleared.  Domestically, China’s passenger traffic remains suppressed in part because of the zero tolerance to COVID infections. Returning the MAXes to service isn’t prompted by the need for the aircraft. Still, there are signs the MAX may return to service soon. However, new deliveries remain in doubt and Boeing is now beginning to remarket the stored aircraft to other operators.

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HOTR: MAX 7 and 10 certification; ecoAviation and the missing life cycles

By the Leeham News Team

Sept. 18, 2022, © Leeham News: LNA last week attended the US Chamber of Commerce’s Aerospace Summit in Washington (DC). We’ll have a series of full reports in the coming weeks. Here are things picked up on the sidelines.

  • The Federal Aviation Administration remains “pissed” at Boeing.
  • Boeing CEO David Calhoun said certification of the 737 MAX 10 could come this year, but it might not. He expects certification of the MAX 7 to come this year.
  • Separately, LNA is told that the MAX 10 probably won’t be certified until next summer, and certification of the MAX 7 could come as early as next month.
  • Calhoun said that Boeing is now pausing the 737 production line when parts don’t come in from suppliers. Doing so prevents traveled work. “We’re going to stay here until these lines move. Steadily, steadily, steadily when we’re not getting defects and we’re not getting shortages.”
  • Calhoun said the stored airplanes aren’t facing shortages. But getting them delivered is a matter of going through the “conformance” steps. “They sat for a couple of years. There were a lot of deferred actions that were incorporated into the new certification. Every one of those actions must be taken on these return-to-service airplanes. It requires almost as many hours to do that as it did to build one in the first place.”
  • Boeing is probably going to be frozen out of China for one-two years, principally in retaliation for the visits by House Speaker Nancy Pelosi and a Congressional committee as well as defense product sales to Taiwan.

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HOTR: Could airport caps lead to 777X success?

Sept. 6, 2022, © Leeham News: Will Europe’s airport passenger caps ultimately save the Boeing 777X?

Sometimes it’s more important to be lucky than it is to be good.

It may be purely speculative, but Boeing may well be on the verge of being lucky.

Amsterdam and London Heathrow imposed daily caps of 67,000 and 100,000 passengers, respectively. Other airports considered following suit. The caps were imposed because airport operations were melting down. Short staffing across several professions, including passport control, was blamed.

The short-staffing no doubt will be rectified eventually. But some industry observers speculate that the European Union may decide to impose flight capacity restrictions as one way to reduce aviation emissions. This, some think, might result in a sales boost for the slow-selling 777X.

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HOTR: Boeing resumes 787 deliveries after long hiatus

By the Leeham News Team

Aug. 10, 2022, © Leeham News: Deliveries of the Boeing 787 are slated to resume today after a pause of nearly two years. American Airlines is set to receive a 787-8. The Federal Aviation Administration announced Monday that it approved Boeing’s plans to fix a production flaw that resulted in a paper-thin gap where certain sections of the fuselage are mated.

Rework of up to 120 787s in inventory has been underway for some time, both in Charleston (SC), where the airplane is assembled and in Everett (WA), where the former Line 1 Final Assembly Line was located. Plane spotters occasionally noted 787s being flown into Everett from stored locations.

Some estimates indicate that the 120 airplanes were sold for an average of $129m each. (The split between the 787-8, 787-9 and 787-10 is not detailed.) This places the inventory value at an estimated $15.5bn. But don’t assume this is the amount of cash that will be coming to Boeing as inventory is cleared into 2024. About 40% of the sales price is typically paid via deposits and progress payments by the time of delivery. This means that Boeing may look for an estimated $9bn in cash.

However, customer compensation for the delivery delays could reduce this some. Boeing prefers to compensate customers via discounts on future airplanes or via services and parts. How much—or how little—cash compensation is provided is known only to Boeing.

During the fourth quarter last year, Boeing took a forward loss on the 787 program of $3.46bn.

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HOTR: Hexcel gives glimpse at 2030 airplane

By the Leeham News Team

July 28, 2022, © Leeham News: Hexcel, a major supplier of composites to Airbus and Boeing, gave a hint of things to come when the next generation narrowbody airplane is developed for late this decade or early next decade.

In its 2Q2022 earnings call, Hexcel forecast that the next-gen airplane may be comprised of more than 60% of composites and thermoplastics. (Figure 1.) This compares with about 50% for the Airbus A350 and Boeing 787. It compares with about 5% of the narrow- and widebody airplanes of the 1970s and 1980s.

Upping composite content in single-aisle airplanes and achieving economic operating gains is more difficult than the gains for widebody aircraft. The weight savings and stage lengths simply don’t match the benefits achieved on widebodies.

Nevertheless, Hexcel’s presentation presents an intriguing look into the future.

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HOTR: Embraer gets launch customer for E-Freighter, Boeing adds Lufthansa for 777-8F

By the Leeham News Team

May 10, 2022, © Leeham News: Embraer yesterday received its launch order for the E-Jet E1 P2F conversions from lessor Nordic Aviation Capital (NAC).

NAC reach “an agreement in principle” to convert 10 E190/195-E1s into freighters. The first deliveries are in 2024. The aircraft are in NAC’s current fleet.

Embraer E190F for lessor Nordic Aviation Capital. Source: Embraer.

The E-Freighters have 50% more volume capacity and three times the range of turboprop freighters (read: ATR) and up to 30% lower operating costs than narrowbodies (read: Boeing 737s), Embraer says. The aircraft will be converted by Embraer at its Brazilian operations. The conversion “includes the main deck front cargo door; cargo handling system; floor reinforcement; Rigid Cargo Barrier (RCB) – 9G Barrier with access door; cargo smoke detection system, including class “E” extinguishers in upper cargo compartment; Air Management System changes (cooling, pressurization, etc.); interior removal and provisions for hazardous material transportation,” Embraer says. “The E190F can handle a payload of 23,600lb (10,700kg) while the E195F a payload of 27,100 lb (12,300 kg).”

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