NMA must stand on its own business case

Dec. 6, 2018, © Leeham News: The prospective Boeing 797 (NMA) must stand on its own business case and not rely on aftermarket contracts for a profitable program, reports investment bank JP Morgan.

JPM’s aerospace analyst Seth Seifman met with Boeing CEO Dennis Muilenburg, CFO Greg Smith and Boeing Commercial Airplanes VP-marketing Randy Tinseth Dec. 4. In a research note issued yesterday, Seifman reported that the business case for the New Midmarket Aircraft still hasn’t closed—but “if Boeing launches the NMA, it will be with the intention of earning a return on the aircraft itself that is comparable to existing programs; it will not be a plan to accept lower margins on the aircraft and make it up in the aftermarket.” (Emphasis in original.) Read more

Pontifications: More hints NMA is a “go”

By Scott Hamilton

Dec. 3, 2018, © Leeham News: Safran, the French company that is a 50% partner in CFM International, believes Boeing will launch the New Midmarket Airplane next year.

Safran held its investors day last Thursday.

In sideline conversation, one of those attending reports that Safran met recently with Boeing and is convinced the NMA is a “go.”

(Others, elsewhere, remain skeptical.)

Engine company responses for proposals are due this month to Boeing. CFM, Rolls-Royce and Pratt & Whitney are competing for the engine selection.

It’s believed Boeing would like a dual source (certainly airlines do), but in all likelihood, the odds-on favorite is that the NMA will have a sole source engine. The betting is that it will be CFM. Read more

How useful is an NMA, Part 6

By Bjorn Fehrm

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Introduction

November 14, 2018, © Leeham News.: Last week we operated the future Boeing NMA from North American hubs. The aircraft would cover the North American market well but would have limitations when flying to South America. The coverage would be sensitive to where our hub would be, as would European coverage.

Now we finish the series by comparing the NMA to its main alternatives for range and operational economics.

Artists impression of the Boeing NMA. Source: The Air Current.

Summary:

  • When comparing the NMA with its competitors, the same cabin type and ruleset must be used for all aircraft.
  • Using a common ruleset and measuring over typical long range operation, the NMA will be the most economical aircraft of the compared types.

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How useful is an NMA, Part 5

By Bjorn Fehrm

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Introduction

November 8, 2018, © Leeham News.: Last week we flew a Boeing NMA from the Middle East. We found the aircraft would be well suited to serve this market.

Now we finish the coverage part of the series with checking how useful the NMA would be for North American based carriers.

Artists impression of the Boeing NMA. Source: The Air Current.

Summary:
  • The North American carriers will have a useful aircraft in the NMA. It will cover the domestic US and Canadian markets, including Alaska and Hawaii.
  • The smaller 797-6 will cover wide parts of South America and Europe dependent on the hub. The larger NMA has more of a coverage problem outside the North and Central American markets. Read more

How useful is an NMA, Part 4

By Bjorn Fehrm

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Introduction

November 1, 2018, © Leeham News.: Last week we looked at how a Boeing NMA would function as a medium range airliner in the Asia-Pacific.

We now continue with flying the two aircraft variants from Middle East locations, exploring how large an area in Asia, Europe and Africa the aircraft would cover.

Artists impression of the Boeing NMA. Source: The Air Current.

Summary:

  • The profile of an NMA fits well in a Middle East Carrier’s fleet. Dependent on location it covers all of Europe and most of Africa and Asia.
  • As the NMA is a lesser aircraft than the present long-range aircraft used on the routes it would have impressive economics for this type of operation.

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Pontifications: Market Intelligence from NY

By Scott Hamilton

Oct. 22, 2018, © Leeham News: I was in New York City last week for a series of meetings. Here’s what “the street” is talking about. I make no judgment calls about whether the thoughts are on target or not. Read more

How useful is an NMA, Part 2

By Bjorn Fehrm

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Introduction

October 18, 2018, © Leeham News.: Last week we started an article series which analyzes how useful a Boeing NMA will be for medium to long-haul flights in different markets.

We first went through all the factors which will change the OEM’s nominal range to an operational range. Now we fly the NMA in one of its main markets and look how it fairs.

Artists impression of the Boeing NMA. Source: The Air Current.

Summary:

  • The NMA is designed to compete on operational economics with Single Aisle aircraft, yet offer the comfort and turn-around times of a Twin Aisle.
  • To get to Single Aisle economics, the NMA can’t be too much aircraft. This shows when analyzing how NMA fares on trans-Atlantic routes.

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Pontifications: “We will develop and actionable plan to develop supply chain”

By Scott Hamilton

Oct. 15, 2018, © Leeham News: “With your help, we will develop actionable plans to develop the supply chain.”

This was the leading message from the 5th Annual South Carolina Aerospace Conference and Expo, held Tuesday and Wednesday last week in Columbia (SC).

Conference officials also said they are “exploring a national aerospace coalition.”

SAVE THE DATE

Second Annual Southeast Aerospace & Defence Conference

Organized by Leeham Co. and Airfinance Journal

April 14-16, 2019

Francis Marion Hotel

Charleston, SC

The South Carolina Council on Competitive/SC Aerospace already have a Letter of Intent with Washington State’s Aerospace Futures Alliance “for the purpose of advancing the aerospace industry across the US. The LOI will serve as the platform for exploring the creation of a national aerospace Coalition (Coalition) with the objective of strengthening and growing commercial aviation, space, and unmanned aerial systems in the US through a variety of activities.”

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Pontifications: “Enterprise P&L” key to NMA business case

By Scott Hamilton

Oct. 4, 2018, © Leeham News: A consensus appears to have developed among aerospace analysts that the business model for the prospective Boeing New Midmarket Aircraft is about much more than the profit-and-loss case for a stand-alone airplane program.

It’s something that Boeing CEO Dennis Muilenburg has alluded to many times on earnings calls and elsewhere.

But now, as Boeing moves toward a decision to launch the NMA program next year, the business model has fundamentally become defined.

Note that I say, “toward a decision,” not “if the program will be launched.” I’m convinced Boeing will greenlight the NMA.

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Pontifications: Workforce plan for NMA to be announced soon

By Scott Hamilton

Oct. 1, 2018, © Leeham Co.: The Choose Washington NMA task force said last week it will release this month recommendations for improving aerospace workforce activities in Washington.

It’s about time.

The task force was appointed by Gov. Jay Inslee to come up with a plan to persuade Boeing to choose Washington as the assembly site for its prospective New Midmarket Airplane, the NMA.

Two studies, one by the Teal Group and the other by Price Waterhouse Cooper, conclude Washington is the best aerospace cluster and location to build the NMA. The conclusions are unsurprising, given the maturity, size and scope of the cluster in Puget Sound (the greater Seattle area). No other place in the country has this level of aerospace activity.

But the reports failed to adequately address the top priority that Boeing has: the need for skilled workers and engineers.

At long last, the NMA council is getting there.

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