Assessing A320 production rate interest in >70/mo

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Introduction

Sept. 17, 2018, © Leeham News: With the supply chain under major stress and Airbus and Boeing trying to recover from scores of “gliders” sidelined at airports without engines, each company nevertheless continues to study production rate increases for the A320 and 737 families.

Airbus publicly has said it’s looking at rate 70/mo. Boeing publicly acknowledges it’s looking at rate 63/mo.

Supply chain sources tell LNC Airbus is studying an even higher rate, into the “70s,” at early as 2020—a date that most consider out of the question.

Boeing is known to be considering a rate of 70/mo for its most profitable program.

Today, LNC looks at the A320 scenario. A future post will examine the 737.

Summary
  • Airbus is scheduled to deliver more A320 members in 2019 than production capacity. Some of these may be parked backlog airplanes.
  • 2020-2021 sold out at rate 60/mo, 2022-2023 nearly so.
  • Rate increase to 70/mo opens opportunities for Airbus, pressure on Boeing.

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Pontifications: Musical chairs at Airbus

By Scott Hamilton

Sept. 17, 2018, © Leeham News: The surprise resignation last week by Eric Schulz as Chief Commercial Officer for Airbus re-opened the door for the man who should have been named in the first place, Christian Scherer.

Scherer spent the last two years as CEO of ATR, which is 50% owned by Airbus, but his lineage is pure Airbus.

His father, Gunter, was one of the original Airbus pioneers. He was a flight engineer on the early A300B2 test flights when Airbus was formed. Gunter died in May.

Christian joined Airbus in 1984. Since then, he was Head of Contracts, Leasing Markets and Deputy Head of Sales as well as Head of Strategy and Future Programmes. At Airbus Defence and Space, he headed Marketing & Sales. He was named CEO of ATR in October 2016.

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Hazy expects 797 decision middle next year

Steven Udvar-Hazy, Executive Chairman, Air Lease Corp. Photo via Google images.

Sept. 13, 2018, (c) Airfinance Journal: Air Lease’s executive chairman Steven Udvar-Hazy says that Boeing could make a decision on whether or not launch the 797 model mid-year 2019.

If so, the timing could coincide with the Paris Air Show.

“In the NMA market, whether Boeing will launch the 797 is a ‘multi-billion dollars question’, he says, adding that right now the US manufacturer is assessing the engine availability.

“There are two potential engines applications. They are all derivative engines,” he says at the UK Aviation Club Lunch on 13 September.

“We all know the problems that Airbus and Boeing have been going through with the new engines on the Max and the Neo as well as the 787s,” he adds.

And for him Boeing is very ‘cautious’ on a decision. “They are trying to understand what is the real market demand for this aircraft and all indications points out to a decision sometimes in the middle of next year,” he says.

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The Muddle of the Market aircraft (No, this isn’t a typo)

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Introduction

Aug. 30, 2018, © Leeham News: As time goes by, the Middle of the Market airplane appears to have become the Muddle of the Market.

Boeing can’t seem to close the business case on its Middle of the Market airplane, the New Midmarket Aircraft, or NMA.

And Airbus continues to stir the pot with talk of an A321XLR and the ever-present A321neo Plus.

Summary
  • Boeing’s been talking about the MOM for six years—an extraordinarily long time.
  • The aircraft evolved from a 757 replacement to a 767 replacement—something the 787 was billed to be.
  • The business case remains unclear.
  • The Airplane definition is still a matter of debate.
  • The MOM was defined by Boeing as above the 737-9 and below the 787-8—but now there’s the 737-10 at the small end, for capacity, and renewed interest in the 787-8 at the upper end.
  • Airbus is pushing the A321LR and nearing a decision whether to proceed with the A321XLR.
  • Engine makers remain cool to the NMA.
  • The supply chain is unenthused about the NMA because Boeing wants to capture the aftermarket and hold the intellectual property rights.
  • The supply chain is in melt-down.

Other than this, everything is fine.

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Can an Airbus A321XLR kill NMA’s business case? Part 2

By Bjorn Fehrm

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Introduction

August 23, 2018, © Leeham News.: Last week we examined the areas which limit the capabilities of the Airbus A321LR from addressing a larger part of what is called the Middle of the Market or the NMA segment.

We now discuss the changes Airbus can do which would make an A321XLR cover more of an NMA space.

Summary:

  • The A321LR needs more fuel tankage to fly longer.
  • Installing Additional Center Tanks, (ACTs) takes away critical luggage space and increases the aircraft’s empty weight.
  • We explore other ways around the problem and what these bring.

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Some suppliers consider sitting out Boeing’s NMA program

By Dan Catchpole

August 15, 2018, © Leeham News: If Boeing launches its New Midsize Airplane (NMA or 797), it is expected to use the cleansheet program to force new contract terms on suppliers. And that has some suppliers wondering if it is worth participating in the program at all.

Speaking on background, executives from several suppliers told LNC in recent months that they might not bid on NMA work if it means greater price concessions up front, as well as surrendering lucrative aftermarket sales to Boeing.

Bidding will depend, in part, on whether suppliers can pass cost cuts down to their own suppliers,  and if Boeing takes on more risk and development costs to offset lost aftermarket revenue. One exec wondered what it could mean for the company’s engineering capabilities if they have to bid for essentially procurement orders with Boeing holding onto the IP.

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The Southeast ramps up to challenge Washington State in aerospace

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Introduction

July 26, 2018, © Leeham News: The US Southeast continues its aggressive expansion in aerospace.

Washington State plots to win the assembly site for the prospective Boeing New Midmarket Aircraft and expand its space footprint.

In a way, it’s a defensive holding game for Washington, which faces competition from more than a half dozen states where the cost of doing business is cheaper and the regulatory environment is friendlier to business.

Summary
  • Washington State doesn’t “get it,” say some suppliers and a trade group.
  • Gearing up for NMA competition.
  • Expanding the Southeast aerospace footprint.

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Boeing cash flows generously, KC-46A snarfs up some of it

By Dan Catchpole

 July 25, 2018, © Leeham News: The cash keeps flowing at Boeing. The aerospace giant posted free cash flow of $4.3bn for the second quarter of the year, despite recording $426m in costs related to its delay-ridden KC-46 tanker program.

Despite posting strong earnings, the charge rattled investors, who drove Boeing’s share price down in early trading Wednesday.

Boeing continues to work on closing the business case for its New Midsize Airplane (NMA), a business case unlike any the company has done before, Boeing chief executive Dennis Muilenburg said in a conference call with reporters and investment analysts.

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Leahy, Kirby headline “Plane Truths” conference in Chicago Sept. 11-12

July 24, 2018, © Leeham News: John Leahy, who retired in January after 33 years at Airbus, and Scott Kirby, president of United Airlines, headline the Leeham Co. and Airfinance Journal conference, Plane Truths: The Next 12 Months, Sept. 11-12 in Chicago.

This will be Leahy’s first conference appearance since he retired from Airbus, where he was COO-Customers.

Plane Truths: The Next 12 Months focuses only on the key issues coming up in the next year. Click here for more information.

Officials of American Airlines, Cargolux, HiFly, Rolls-Royce, Skyworks Capital, Collateral Verifications, Embraer and Bombardier are among those who will participate.

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First mover or not, that is the question: A321XLR vs NMA

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Introduction

July 23, 2018, © Leeham News: First mover or not first mover, that is the question.

In a pre-Farnborough Air Show interview with another publication, Airbus Group CEO Tom Enders said Airbus had the advantage of being the “first mover” by acquiring majority control of the Bombardier C Series program.

But when it comes to responding to the prospective Boeing New Midmarket Airplane (NMA, or 797), Airbus officials say they are content to wait and watch, willing to let Boeing make the first move.

At the same time, Airbus is proceeding with studies to further extend the range of the A321neo, in the form of the A321XLR. The airplane would have a range of 4,500nm, up from 4,100nm, according to information widely leaked at the air show.

Summary
  • Airbus looks to squeeze Boeing from the bottom of the NMA market with A321neo improvements.
  • Boeing sales chief dismisses A321XLR as a sub-set of a sub-set.
  • But others see the basic A321 design as more flexible than the 737 MAX.
  • Airbus CEO Guillaume Faury

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