Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- HOTR: LATAM files bankruptcy, latest COVID airline casualty; 1,100 aircraft involved May 26, 2020
- Mitsubishi SpaceJet retreat is the best news for Embraer in months May 25, 2020
- Pontifications: Aircraft values, lease rates plummet May 25, 2020
- Bjorn’s Corner: Do I get COVID in airline cabins? Part 3. May 22, 2020
- Better to bring capacity back with a 777-9 or 787-10 if we fly 777-300ER today? May 21, 2020
Is reengining the Boeing 767 a good idea? Part 2.
By Bjorn Fehrm
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Introduction
October 24, 2019, © Leeham News: According to FlightGlobal, Boeing is investigating reengining the 767-400ER with GE GEnx engines to produce a new freighter and perhaps a replacement for the NMA project.
We started an analysis of what this would look like last week where we analyzed the aircraft fundamentals. Now, we continue with the capacities of passenger and cargo variants.
Summary:
- The 767-400ER is one size larger than the largest NMA. It would be a competitor to the Boeing 787-8. This makes the variant doubtful as an NMA replacement.
- As a cargo variant, it adds less than 20% of cargo volume on top of the present freighter, the 767-300F. Is this attracitve enough to motivate a reengine for a freighter?
Is re-engining the Boeing 767 a good idea?
By Bjorn Fehrm
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Introduction
October 17, 2019, © Leeham News: FlightGlobal writes Boeing is investigating re-engining the 767-400ER with GE GEnx engines to produce a new freighter and perhaps a passenger aircraft as a replacement for the NMA project. Development costs would be lower and it would be easier to get a business plan which closes for the upgraded 767 than for the NMA.
We commented on the idea earlier in the week and here follows a technical analysis of what re-engining the 767 would bring.
Summary:
- The 767 is 40 years old in its base design. We look at the fundamentals to understand the trades involved in extending its life with new engines.
- We also compare the 767 technologies with those for the NMA to understand the compromises of an updated 767RE compared with a clean sheet NMA.
Opportunity and challenges of a 787-10ER
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By Vincent Valery
Introduction
Aug. 22, 2019, © Leeham News: By 2024 the 777-300ER will have been in service for 20 years and the 777-200ER 27 years.
United Airlines 787-10. Credit: United Airlines.
LNA was the first to report the 777-8 entry-into-service will slip by at least two years. Boeing confirmed a delay in the 777-8 development, but not the timeline. Further delays (or an outright cancellation) for the passenger 777-8 are a real possibility. Boeing faces the prospect of not having a latest generation offering in the 330-370 seat market at a time demand for such aircraft is expected to pick up.
As part of the Air New Zealand commitment to purchase eight Boeing 787-10s, Boeing and General Electric are increasing the maximum takeoff weight to add more range.
In a similar fashion to the 777-300ER 20 years ago, Boeing might improve the 787-10 further to turn it into a fully-fledged ER variant. We will analyze the rationale for launching such variant and the challenges Boeing needs to overcome.
Summary
- Remediate a product gap
- Opportunities arising from surging 777 retirements
- A mixed track record of previous stretches and range improvements
- Target range for the 787-10
- Challenges associated with achieving those targets
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Boeing’s Long Term Cash Flows
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By Vincent Valery
Introduction
Aug. 19, 2019, © Leeham News:Boeing’s long-time priorities, adopted after the 787 program finally was past its troubles, is shareholder value.
Boeing has spent tens of billions of dollars over the years in stock buybacks. It has regularly increased dividend payments.
In the context of a global aviation boom, the Commercial Airplanes division has generated the bulk of cash flow growth in recent years for the company. The creation of Boeing Global Services is a move toward achieving mid-teen margins for The Boeing Co.
Just like any aircraft OEM, the ability to generate cash flows rests on having an up-to-date and desirable product line up for customers.
Before the Ethiopian Airlines Boeing 737 MAX crash, things were looking good for Boeing. Assuming a successful resolution of the 737 MAX crisis, Boeing should return to generating strong operating cash flows afterward.
However, how long is the current product line up expected to sustain those cash flows and what could Boeing do about it?
Summary
- Dreamliner: from costly delays to cash flow machine
- Boeing 777 provided strong cash flows at critical time and 737 rode global aviation boom until grounding
- Significant production gaps on 737, 777 and 787 appear from mid 2020s, potentially threatening cash flow generation
- New variants, derivatives and clean sheet design would sustain cash flows longer.
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How much of an NMA market will the Airbus A321XLR capture, Part 3?
By Bjorn Fehrm
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Introduction
August 1, 2019, © Leeham News: We wrap up our study of what part of an NMA market the Airbus A321XLR could capture with looking at the difference in available engine technology between the A231XLR and the NMA generation of airliners.
Summary:
- The generational improvement in fuel efficiency of airliner turbofans has been over 10% in the last decades.
- We examine if these improvements will still be the case for the NMA generation of aircraft.
How much of an NMA market will the Airbus A321XLR capture? Part 2
By Bjorn Fehrm
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Introduction
July 25, 2019, © Leeham News: We continue our discussion from last week of what part of an NMA market the Airbus A321XLR would capture.
We started the study by comparing the aircraft with a common yardstick. It brought some revealing insights. Now we continue by looking at the airline routes these aircraft can cover and their economics when covering these routes.
Summary:
- The NMAs and the A321XLR cover the same routes with small differences in range performance.
- The major difference is in their passenger capacity, where they are complementary rather than competitors.
Trans-Atlantic market fragmentation hurts big widebodies
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By Vincent Valery
July 22, 2019, © Leeham News: Development of single-aisle aircraft that now have ranges of plus-or-minus 4,000 nautical miles are fragmenting hub markets needed to fill large twin-aisle aircraft.
Just as twin-engine widebodies began fragmenting routes needed to fill the Boeing 747 and later the Airbus A380, the Boeing 737-8 and Airbus A321LR/XLR appear to be contributing to weak demand for the Boeing 777X and Airbus A350-1000.
With launch of the Airbus A321XLR last month and expected New Midsize Airplane once the MAX crisis is over, some markets might have structures dramatically altered in the second half of next decade. The prime candidate is the US East Coast–Europe market. We will investigate through historical examples how things might turn out.
Rendering of Boeing NMA-7. Source: Leeham Co.
How much of an NMA market will the Airbus A321XLR capture?
By Bjorn Fehrm
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Introduction
July 18, 2019, © Leeham News: Airbus’ new A321XLR is labeled as an Boeing NMA killer. It shall, with its capability to fly the same routes as the NMA, nibble away on its market space.
This discussion takes the Airbus passenger and range data for the A321XLR and compares it with the announced capabilities of the NMA. As we will see, it’s not that simple.
Summary:
- To understand how the A321XLR will compete with the NMA, we first need to compare them with the same yardstick.
- Putting them on the same cabin and operational rule set reveals interesting differences. The A321XLR and the NMA are complementary rather than competitors.
Will the NMA-7 finally kill the A330?
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By Judson Rollins
July 11, 2019, © Leeham News: Boeing is expected to proceed with the New Midmarket Airplane (NMA) once the 737 MAX gets clearance to return to service. News from the Paris Air Show indicates Boeing may launch the larger model, the NMA-7, first.
The 270-passenger version of the NMA is viewed by some—including Boeing—as the airplane that would effectively kill the A330neo.
Twelve years ago, the 787 was supposed to finally kill the A330 once and for all … and we saw how that turned out. But this time may well be different.
Rendering of Boeing NMA-7. Source: Leeham Co.
SAP and advanced manufacturing cut costs for current, new airplanes
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July 1, 2019, © Leeham News: Improving supply chain management is one of the many, many key factors in making the business case for the prospective Boeing New Midmarket Airplane.
The prospective Boeing NMA needs SAP and advanced manufacturing processes to help close the business case. Source: Leeham Co.
The highly complex task of managing a supply chain with millions of parts across many product lines can break down quickly with any weak link, be it from a supplier or in the management system itself.
Quality control, security, misrouting, package integrity in shipping are among the key issues. The sheer magnitude of tracking inventory is huge.
Boeing uses Enterprise Resource Planning and is shifting the system to a new, expanded one called Systems Applications Projects. SAP is the next generation of ERP. Even though ERP has been in use for decades, last year there was a breakdown in deliveries that contributed to production interruptions of the 737 NG (late deliveries of the CFM 56 were a bigger problem).
Boeing’s transition from ERP to SAP is taking longer than anticipated, with a 2021-ish target.
Related articles:
With the NMA business case continuing to be difficult to close, Boeing’s need to attack every cost is clear.