Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
Boeing has MOM sector “crisis,” says Leahy
June 5, 2017, © Leeham Co.: Boeing has a “crisis” in the Middle of the Market airplane sector, declared Airbus’ top salesman.
John Leahy, COO Customers, Airbus.
Development of the 737 MAX 10, which is expected to be launched at the Paris Air Show in two weeks, won’t solve it, either.
John Leahy, COO Customers for Airbus, made the remarks today during a small press event at the Annual General Meeting of IATA in Cancun, Mexico.
ISTAT 2016: Air transport market at cross-roads
By Bjorn Fehrm
September 29, 2016, ©. Leeham Co: We visited ISTAT (International Society of Transport Aircraft Trading) 2016 conference in Barcelona this week. The most interesting part of the conference was the economists panel with discussions between the economist: Brian Pierce, chief economist of IATA; Peter Morris, chief economist at Ascend; and Adam Pilarski, SVP and Head of Consulting, AVITAS.
The economists agreed that the air transport market is at a cross-roads, but not which route it will take.
Let’s start with the market facts presented by IATA’s Pierce: Read more
IATA, Lufthansa cargo reports are discouraging
July 6, 2016, © Leeham Co.: Going into the Farnborough Air Show (#FIA16 on Twitter) next week, ominous signs continue to emerge about the health of the air cargo
Photo via Google images.
industry.
The International Air Transport Assn. (IATA) Wednesday said yields and traffic remain under pressure. Freight tonne kilometers fell 0.9% year-over-year, IATA reported.
“Yields remained pressured as freight capacity measured in available freight tonne kilometers (AFTKs) increased by 4.9% year-on-year,” IATA said. “reight demand decreased or flat lined in May across all regions with the exception of Europe and the Middle East. These regions recorded growth in air cargo volumes of 4.5% and 3.2%, respectively, in May, compared to the same period last year.”
Lufthansa Cargo saw yields in a “landside” drop, according to a Bloomberg report.
Brexit special: analyst reaction
Source unknown. Via Twitter.
June 27, 2016: Aerospace and airline analysts are reacting to Thursday’s vote in Britain to leave the European Union. Below is a synopsis of some of the analyst notes we receive.
Credit Suisse
We are forwarding the analysis our European Transports team put out this morning on Brexit and have a few observations as it relates to US Airlines.
- GBP Exposure: For the US network carriers (UAL, DAL, AAL), GBP exposure averages ~2-3% of total revenues with overall UK exposed revenues ranging 4-6%.
- Impact to High Yield Transatlantic Traffic Primary Concern: For US network carriers, we see the primary concerns post-Brexit on the demand implications on the Transatlantic. Last week IAG issued a profit warning which worries us on corporate demand weakness. Given scheduled seat growth in the Transatlantic continues to outpace demand (H2 seat growth US-EU scheduled at 8.6%), capacity cuts are needed to stabilize pricing particularly since UK GDP is likely to slow even further. We look to Q2 earnings calls next month for additional color from carriers.
- AAL Viewed Most at Risk Given Partnership with IAG, but Our Team Believes IAG is Least at Risk [among EU airlines] from Future UK-EU Air Service Negotiations: Our European analyst believes IAG’s airlines would see limited effect from the UK exiting the EU Open Skies agreement as long as renegotiated UK-EU bilaterals do not limit service levels. This suggests that AAL’s relative underperformance was overdone on Friday; however, we expect Brexit-related uncertainty to continue to weigh on network carriers, and reiterate our confidence in domestic carriers (Outperform on LUV & SAVE).
Slowing economies begin to impact Airbus, Boeing
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Introduction
LatAm Airbus A350. LatAm may defer some A350s and/or Boeing 787s. Photo: Flickr via Google images.
June 13, 2016, © Leeham Co.: Signs are becoming more frequent that airlines are facing slowing economies around the globe, with impacts on existing orders in the backlog.
Last week JetBlue said it is trimming growth on rising fuel costs and softening revenue. LatAm also said last week that it plans to trim some Airbus A350 and Boeing 787 orders amid slumping traffic in Brazil. Delta Air Lines previously said it will defer four A350s and trimming growth due to slowing economy.
Summary
- Wide-body sales slowing this year.
- 787 Surplus developed.
- A330neo sales stall.
- A350-2000 on hold.
- 777 Classic sales stall.
- Cargo demand still anemic, says IATA.
IATA on air safety
By Bjorn Fehrm in Dublin
Introduction
June 1, 2016, ©. Leeham Co: We report from the International Air Transport Association’s (IATA) Annual General Meeting running in Dublin Thursday and Friday this week, where all the world’s airlines meet to report on a number of initiatives and decide on things to do going forward.
The first briefing from IATA was on the level of safety in the air for 2015, measured through the IATA Operational Safety Audit, IOSA. 2015 was a good year, not quite to the level of 2014 which was the safest year in history, but close at 0.32 jet hull losses per one million flights instead of 0.27 recorded for 2014, Figure 1.
Figure 1. Jet hull losses during 2015 per million flight hours. Source: IATA.
As a reference, the the 2013 rate was 0.41 hull losses over one million flights. The 2015 rate was a 30% improvement over the average rate of the years 2010-2014. The turboprop level was worse at 1.29 hull losses per million flights but it was a large improvement compared to previous years at 3.13 and 3.95. It shall be cautioned that the sample size for Turboprops is much smaller than for Jets, therefore one hull loss will affect the statistics quite a lot. Read more
Air freight continues to lag, IATA says
March 18, 2016: The air cargo market continues to struggle, according to data compiled by the International Air Transport Assn. (IATA) in its first quarter report for information primarily in the fourth quarter and full year of 2015.
Freight capacity in the bellies of passenger airliners far outstripped main-deck cargo capacity, IATA reports. Load factors for main deck freighters continue to hover in the low 40% range, IATA data shows, extending a long trend. But capacity was also added during the period as freighters emerged from storage, adding to global capacity.