Outlook 2021: Russia and China

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By Bjorn Fehrm

Introduction

Jan. 14, 2021, © Leeham News: China and Russia are both developing a single-aisle domestic airliner in the A320/737 MAX class, a regional turboprop in the ATR 72 class, and is jointly working on an A330neo/787 widebody competing airliner.

While these are similar development programs, the countries are in very different positions in their markets and industries. China is a five times larger market for airliners than Russia, and its airlines are on the way back from COVID riddled passenger numbers. It has the fastest recovery from COVID-19 of any country and its civil airliner industry is on the rise.

Russia on the other hand has a stagnant market, still hit by COVID-19, and its market and industry have become introverted after a decade of flirting with Western markets and technology.

Summary
  • China and Russia drive almost identical civil airliner projects to replace Soviet-era and Western airliners.
  • While similar in their projects, they are different in their markets and state of industries.
  • China is on the way up (albeit from a low state) to eventually compete on the world market, whereas Russia is falling back to a Soviet-style all Russian state-controlled model.

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HOTR: With MAX nearing recertification, Boeing has bigger problem

By the Leeham News team

Oct. 27, 2020, © Leeham News: Boeing’s 737 MAX may be nearing recertification and airlines worry about passenger acceptance.

But Boeing’s larger MAX problem is its general product line-up.

LNA pointed out the poor sales of the 7 MAX in the past. We’ve also compared the lagging sales of the 9 MAX and 10 MAX compared with the A321neo.

As a result of the MAX grounding and now COVID-19’s disastrous financial impact on airlines around the world, more than 1,000 orders have been canceled or reclassified as iffy under the ASC 606 accounting rule.

Airbus doesn’t publicly reclassify the European equivalent of ASC 606. But LNA in July estimated how many A320s would be similarly classified. At that time, about 425 appeared to be similarly subject to ASC 606 if this accounting rule was applied to Airbus.

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Pontifications: Boeing’s latest forecast raises more doubt than hope

By Judson Rollins

Oct. 12, 2020, © Leeham News: Every year, like clockwork, when Boeing publishes its 20-year Current Market Outlook, there is always another upward revision in forecast demand for new aircraft.

So, when the Chicago-based OEM admits that demand has taken a long-term hit, you know the situation must be dire.

Last week, Boeing belatedly published its annual CMO forecast for global commercial jet production and services. The forecast was quite a comedown as it marked a 2% fall from Boeing’s previous expectations for aircraft demand, with a whopping 10% drop for widebodies and freighters.

Airbus has withheld its 2020 Global Market Forecast while it continues to assess the impact of COVID-19. Read more

A lost decade for aircraft manufacturers, suppliers

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By Judson Rollins, Bjorn Fehrm & Scott Hamilton

Sept. 21, 2020, © Leeham News: Commercial aviation is facing a lost decade due to COVID.

Yes, most forecasts target 2024-2025 as returning to 2019 passenger traffic and aircraft production levels.

However, LNA in July published its own analysis indicating full recovery may not occur until 2028. Breathless headlines notwithstanding, it will take years for vaccines to be widely available and considered safe by enough of the world’s population. Growing concern about vaccine production and distribution capacity through 2024 underscores this view. Even Southwest Airlines CEO Gary Kelly said earlier this month that business travel might not fully return for a decade.

Indeed, the 2020s may well be a lost decade for aircraft manufacturers and their supply chains.

Summary

  • Debt-laden airlines will have little money to order new airplanes
  • Interest in re-engined 787, A350 likely nil this decade
  • Airbus, Boeing, Embraer have little interest in launching new programs
  • Engine makers too financially stretched to develop new designs
  • Engineering talent, knowledge will be decimated by inevitable job reductions
  • OEMs must “play the long game” at short-term cost to safeguard their futures

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Pontifications: Assessing the impact of COVID-19: today’s take

By Scott Hamilton

April 6, 2020, © Leeham News: It’s going to be quite a while before there is a clear understanding how coronavirus will change commercial aviation.

LNA already touched on impacts to Airbus, Boeing and Embraer. None of it is good. For Boeing, burdened with the additional stress of the 737 MAX, is in the worst position. Even when the MAX is recertified, there won’t be many—or any—customers in a position to take delivery of the airplane.

Bearing in mind that what’s true today will change in a day, or even an hour, let’s take a rundown of where things seem to stand now.

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2020 Outlook for Airbus, Boeing, et al

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Introduction

By the  Leeham News team.

Jan. 2, 2020, © Leeham News: This will be a pivotal year for Boeing.

It will be a year of challenges for Airbus.

Embraer Commercial Aviation should disappear.

Mitsubishi Heavy Industries faces final decisions for the SpaceJet.

Overhanging international trade is the US presidential election.

These are just some of the headlines to look for in 2020.

Leeham News and Analysis provides its annual outlook as the new year, and the new decade, begins.

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Pontifications: MAX market share holding steady, so far

By Scott Hamilton

July 29, 2019, Leeham News: Despite threats and fears of cancellations for the Boeing 737 MAX following two fatal accidents of virtually brand new -8 MAXes, few order cancellations directly attributable to the crashes have occurred.

So far, there isn’t a discernible shift to Airbus, either, data shows.

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14 new airplanes and derivatives see EIS through 2027

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July 15, 2019, © Leeham News: There are 14 new and derivative aircraft scheduled for entry into service (EIS) through 2027. This rises to 16 if Boeing launches the New Midmarket Aircraft (NMA).

But there are plenty of uncertainties around precise EIS hanging over some of these.

LNA sees entry into service for the Boeing 777X slipping to the first quarter of 2021.

LNA sees the Boeing 777X EIS slipping into early 2021. China’s C919 is now slated for a 2021 EIS, but development has been tricky and delays have been common. Russia’s MC-21 flight testing has been slow and international sanctions hang over this aircraft.

Mitsubishi’s MRJ90, now called the M90, is slated to enter service next year. It, too, has been plagued by delays. The redesigned MRJ70, the M100, moves from a 2021 EIS to a planned 2023 EIS—but given the MRJ90’s history of delays, the company has to persuade the industry no more slippages are likely.

Here is a rundown by year and aircraft of the EIS dates.

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2019 Paris Air Show Preview

By Vincent Valery

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June 3, 2019, © Leeham News: The 2019 Paris Air Show kicks off in two weeks at the Le Bourget Exhibition Center.

In this preview, we will go over what to expect from commercial aircraft OEMs.

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Airbus holds 56% share of backlogs vs Boeing

Jan. 11, 2019, © Leeham News: Airbus trailed Boeing in net orders in 2018 but it still holds a commanding lead in backlog market share.

With the companies reporting their year-end tallies, Airbus has a 56% share of the backlog to Boeing’s 44%.

Airbus carries the day with narrowbody backlog. Its share is 58% to Boeing’s 42%.

Boeing wins the widebody backlog, 53% to 47%, driven by a broader product line, including strong 777F and KC-46A/767-300ERF backlogs.

When the emerging narrowbody airplane programs of China and Russia, and Embraer’s sole entry into the 100-150 seat sector (based on two-class seating), Boeing’s narrowbody share of the backlog drops from 42% to 40%.

Charts are below. Data is based on firm orders only.

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