Delta Tech Ops 5-year goal to double revenues

#MROAM

Ed Bastian, Delta Air Lines CEO.

April 9, 2019, © Leeham News: Delta Air Lines has the third largest third-party MRO company in North America and aggressively seeks to grow, in sharp contrast to its competitors.

While American and United airlines have limited their own maintenance, repair and overhaul, let alone seek third party business, Delta Tech Ops is a business unit and profit center. Delta CEO Ed Bastian said today that Tech Ops will achieve $1bn in revenues this year and has a goal of $2bn within five years.

Bastian was the lead-off speaker at the Aviation Week MRO Americas conference in Atlanta this week.

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Impact to Boeing for MAX grounding assessed

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Introduction

March 19, 2019, © Leeham News: The impact of the grounding of the 737 MAX to Boeing will hurt, but the effect likely will be short term.

The most recent grounding of an airliner was the 2013 grounding of the 787. This cost Boeing an estimated $500m over the course of the three month grounding. A hardware fix had to be designed to contain battery fires. Installation in the field for 50 aircraft was required. Compensation to operators was necessary.

There are more than 370 MAXes grounded. Norwegian Airlines and Spice Jet already publicly said they will demand compensation. Deliveries are suspended.

This grounding should be much shorter than was the 787.

Summary
  • MAX fix was already in the works.
  • Some say US government shutdown delayed software fix at least five weeks.
  • Implementing software upgrade will be quick.
  • Grounding estimated by LNA to be six weeks max.
  • MAX grounding cost estimated $550m over several years.
  • Short term revenue shift $11bn to later in the year.

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Airbus appears poised to launch A321XLR

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Introduction

Feb. 25, 2019, © Leeham News: The longer Boeing dithers on launching the New Midmarket Airplane, the harder it is to close an already difficult business case.

News last week that Airbus finally, at long last, is appears about to launch its Xtra Long Range A321XLR this year is overdue. Doing so will make Boeing’s NMA business case more difficult to close.

The aircraft should have been launch in late 2017, an insider told LNA recently. But the corruption scandals enveloping Airbus disrupted plans and drove executives to indecision. Launching the A321XLR was put on hold.

Summary
  • Killing the NMA.
  • A321XLR details.
  • Narrow market.
  • Engine down select soon.

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Pontifications: March is a critical month for engine OEMs

By Scott Hamilton

Feb. 25, 2019, © Leeham News: Even as Boeing put off a decision whether to launch the New Midmarket Aircraft until 2020, next month could be an important milestone—not only for the program but especially for the engine makers.

Unless delayed, engine down-select is supposed to be made in March.

This is a critical decision that could have huge implications to one of the engine OEMs—Rolls-Royce.

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Pontifications: The 747 revolutionized air travel

By Scott Hamilton

Feb. 11, 2019, © Leeham News: Few airplanes truly can be called revolutionary. Most are evolutionary.

The Boeing 747 was one of those that falls into the former category.

Just as the Boeing 707 revolutionized air travel, so did the 747.

The spaciousness and, after a period of engine difficulties, the economics put the 747 into a class by itself.

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Countdown to NMA decision, Part 4: Time out

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Feb. 4, 2019, © Leeham News: It’s time for Airbus to launch the A321XLR.

Boeing last week announced a program launch for the New Midmarket Airplane won’t come until 2020 at the earliest.

Authority to Offer (ATO) may come as early as March or April. It had been widely expected a program launch would be announced at the Paris Air Show in June.

Airbus has been mulling the XLR launch since 2017. Inside information says a November 2017 launch was planned when all the distractions over the corruption scandals, coupled with key executive retirements, overwhelmed events.

Fifteen months later, Airbus dithers while Boeing vacillates.

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Key customers shrug off Boeing’s 2020 NMA launch date

Jan. 30, 2019, © Leeham News: Key customers and suppliers shrugged off Boeing’s announcement today that a program launch for the prospective New Midmarket Aircraft won’t come until 2020.

If Boeing goes ahead with the NMA, a decision yet to be made, an announcement was widely expected at the Paris Air Show in June.

Authority to Offer (ATO) the airplane for sale may still come as early as March or April.

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Pontificatons: From the sidelines at the AFJ Dublin conference

 

By Scott Hamilton

Jan. 28, 2019, © Leeham News: Launch by Boeing of the New Midmarket Aircraft (NMA) is pretty much a given, despite a still undecided business case, say people on the sidelines of the Airfinance Journal’s Dublin 2019 conference.

Here is a potpourri of information picked up at the conference, which is attended by about 2,000 people.

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Rolls-Royces sees NMA “addressable” market as 4,000-5,000, same as Boeing

Jan. 22, 2019, © Leeham News: Rolls-Royce sees an “addressable” market for the Middle of the Market Aircraft at between 4,000 and 5,000 over 20 years—the same size Boeing sees.

But at the Airfinance Journal annual conference today in Dublin, an executive declined to be specific about the details of this assessment.

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Countdown to decision on Boeing’s NMA, Part 3: Engine selection

By Dan Catchpole

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Introduction

January 21 2019, © Leeham News: Boeing number crunchers are feverishly working through engine bids from Rolls-Royce, Pratt & Whitney and CFM International, the partnership of Safran and General Electric (GE), the three competitors vying to power Boeing’s New Midmarket Airplane (NMA). Boeing is expected to ask for a best and final offer by the end of January, with engine selection planned in February.

That gives Boeing enough time to get authority to offer from the board of directors, likely in March or April, and to launch the NMA (likely as the 797) at the Paris Air Show in June.

Boeing faces big challenges in closing the business case, though. The process has slogged on far longer than company leaders had expected. Even so, Boeing executives’ relentless optimism about the NMA business case stands in sharp contrast to the skepticism of many industry insiders. At least two of the engine makers, for example, think market demand is about half of Boeing’s public forecast.

Each of the three engine makers vying to get on the NMA have some significant liability. The industry insiders and analysts interviewed for this article say is the decision really comes down to Pratt and CFM. Given the pressures on NMA business case, many see a scaled-up CFM Leap as the front runner. It offers the least risk, even if it also has the least upside.

Summary:
  • CFM: The LEAP has performed well since going into service, but GE’s financial troubles could weigh down its bid.
  • Pratt & Whitney: PW’s GTF is a great fit for NMA requirements, but the engine maker has a full plate with the GTF on five new airplane programs.
  • Rolls-Royce: The NMA would be an opportunity to launch Rolls’ UltraFan, but does Boeing want to bet on a completely new engine?

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