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
If Boeing builds MAX 10, will customers come?
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Introduction
March 7, 2017, © Leeham Co.: If Boeing builds the 737-10, which appears increasingly likely, will customers come?
This is always the multi-billion-dollar question for any aircraft and engine manufacturer.
For Boeing, launching the 737-10 is a low-risk, and in the eyes of many, futile effort to stem the bleeding of market share between the MAX 9 and its rival, the Airbus A321neo.
- “That’s the most absurd thing I’ve ever heard. What is he, flying downhill?” Airbus’ John Leahy reacting to claims by Boeing’s Randy Tinseth that the 737-10 has more range than the A321neo.
Depending on who’s counting and how the numbers are calculated, the A321 sales outpace the MAX 9 by a factor of four or five to one. LNC calculated last year that the ratio is more likely 3:1, identical to the market share split between the predecessor airplanes, the 737-900ER and the A321ceo.
Engine OEMs diverge on technology for next generation
March 7, 2017, © Leeham Co.: Representatives of the four major commercial engine
GE9X, the final engine in a decade-long engine renewal program for GE Aviation and CFM International
manufacturers have divergent views of the next round of engine development, either for the Middle of the Market/New Mid-range Airplane (NMA) or New Small Airplanes (NSA) coming in the next decade.
Officials of CFM, GE, Pratt & Whitney and Rolls-Royce appeared at the annual ISTAT conference in San Diego yesterday.
PW’s Rick Deurloo, SVP of Sales, Marketing Commercial Engines, had the added task of dealing with the highly-publicized teething issues surrounding its new Geared Turbo Fan engine on the Airbus A320neo.
Boeing soft launch for 737 MAX 10
Boeing 737 MAX 8. The MAX 10 is a double-stretch of this baseline aircraft.
March 6, 2017, © Leeham Co.: Boeing effectively did a soft launch today of the 737-10 MAX at the ISTAT Americas conference in San Diego.
Randy Tinseth, VP-Marketing, revealed basic specifications for the MAX 10, the first time Boeing has done so in a public forum.
“Scope clauses stop aircraft development”
By Bjorn Fehrm
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Introduction
October 16, 2016, ©. Leeham Co: “Scope clauses stop aircraft development.”
The words are those of Rodrigo de Souza, Marketing manager of Embraer Commercial Aircraft when we spoke at the sidelines of the recent ISTAT conference in Barcelona.
De Souza made the comment when we discussed how the new E-Jet E175-E2 would fit with US scope clauses. It doesn’t.
Figure 1. Embraer’s E175-E2, which gives an 11% improvement in fuel burn (the additional 5% is from 76 seats going to 80). Source: Embraer.
The problem is the limit on Maximum Take-Off Weight (MTOW).
“I can understand the other restrictions of a scope clause but not the Max Take-Off Weight restriction,” de Souza said. “It doesn’t make any sense; it just stops new and more efficient aircraft getting into the market. What relevance does it have in protecting mainline pilots from the regional operators taking over routes?”
Summary:
- The MTOW part of scope clauses hits all regional manufacturers.
- Embraer is not the worst hit; their present E175 is compliant and selling well.
- Mitsubishi is worse off. Its entire backlog of 240 MRJ90 is non-compliant. And some of its major customers fly for airlines with scope clauses.
- What is the solution? Why doesn’t scope clauses adapt to modern times?
Engine industry clamoring for road back
By Bjorn Fehrm
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Introduction
October 13, 2016, ©. Leeham Co: The airline engine industry is like a ticking bomb. Over the years, a business practice of selling the engines under manufacturing cost and planning to recover costs and make a profit on the aftermarket developed. This goes back decades.
The practice was fostered by fierce competition over the engine contracts for aircraft which offered alternative engines. The losses of the engine sales could be made up later by selling spare parts and services at high margins.
Figure 1. Trent 7000 from Rolls-Royce. Source: Rolls-Royce.
These “jam tomorrow” practices have several implications. The engine industry is now confronted with these and wonder how it could put itself in such a bind. How to handle these and what is the way back?
Summary:
- High competition in engine sales forced ultra high discounts for the up-front engine sale.
- Aftermarket schemes was created that should recover profits over spare parts and services.
- But these maintenance practices create all sorts of problems in the used engine market.
- The engine industry now wants to return to more normal business practices. But how do they find the way back?
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
747F demand will come back, says Boeing
Randy Tinseth, VP Marketing, Boeing Commercial Airplanes. Photo via Google Images.
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Update, July 22, 2016: Boeing yesterday announced it is taking an after tax charge of more than $800m against the 747-8 program. It also cancelled plans to increase production of the 747-8F from the current 0.5/mo to 1/mo in 2019 on the long-held belief demand for the 8F would recover as 747-400Fs age.
July 13, 2016, © Leeham Co., Farnborough Air Show: Boeing steadfastly believes the demand for its iconic 747 freighter will recover after years of slow orders and declining production rates.
Randy Tinseth, VP Marketing, told LNC years of missed targets for main deck freighter demand in its annual Current Market Outlook come down to the global softness in air cargo trading.
“It’s all about trade in air cargo,” says Tinseth. “The one thing we’ve seen in the last five years regarding growth and trade, if you look at 2010, it came back very strongly. We saw trade growth. In 11 and 12 and the first part of 13, we saw growth very quiet in terms of trade. Then in the back half of 13-14 and into 15, we saw trade grow at 5%. Guess what? The cargo market came back and grew at 5%.
ANA CEO opens ISTAT Asia 2016
By Bjorn Fehrm in Tokyo
May 18, 2016, ©. Leeham Co: The CEO of All Nippon Airways (ANA) Osamu Shinobe opened the 2016 International Society of Transport Aircraft Trading (ISTAT) conference in Tokyo today, in front of some 700 delegates. Shinobe presented an overview of the airline’s recent success and its future plans. This includes the plans for use of the three Airbus A380 that the airline bought in January this year.
ANA is Japan’s most successful carrier in recent years, leading the incumbent Japan Airlines in revenue and profits since 2010. The airline had its historical base in a large domestic market share but has been complementing that with an aggressive international expansion in recent years.
All Nippon Airways Boeing 787 in special Starwars livery. Source: ANA
Its landmark buy of Boeing 787 Dreamliners shall be seen in this context. The 787, for which ANA was the launch customer, is the kingpin in ANA’s expansion plans, where an expanding international network shall feed the established domestic network. Read more