Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Bjorn’s Corner: Air Transport’s route to 2050. Part 17. April 11, 2025
- Uncertainty plagues airline, aerospace, lessor industries over tariffs April 10, 2025
Mitsubishi moves would make a lot of sense
By Bryan Corliss
Analysis
June 11, 2019, © Leeham News: © — A deal by Mitsubishi Heavy Industries to acquire the CRJ program from Bombardier would make abundant sense for Mitsubishi Aircraft Corp – taking a struggling competitor off the board, acquiring hard-to-find human capital assets, and taking over an established North American American supplier network and a global product support system.
And recent unconfirmed reports that MITAC also is considering a North American final assembly site would make a lot of sense for a company that’s looking to cut production costs – and get closer to some likely key customers.
Yet while everyone in the industry is talking about the potential links between MITAC and the Montreal-based CRJ, nobody’s saying much about the company’s future in Moses Lake (WA). But overlooking Mitsubishi’s growth over the past two years there would be a mistake, because the company certainly is acting like it intends to plant roots there in the Eastern Washington farm country.
- A North American assembly site would bring significant savings;
- Mitsubishi and Bombardier already have close ties; and
- Signs point to MITAC settling in at Moses Lake for the long haul.
Cutting A220 costs is an ‘ongoing exercise’ for Airbus
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Introduction
March 14, 2019, © Leeham News: Airbus’ effort to slash supply costs for A220 production is “an ongoing exercise at this point,” Joe Marcheschi, Airbus’ head of procurement in North America, told LNA in an interview last month.
The A220-300 for JetBlue will be assembled at the Airbus plant in Mobile (AL). Airbus rendering.
“There are no specific, let’s say, achievements yet,” he said. “We are working closely with our supply chain.”
It takes time to squeeze cost out of the supply chain, he said. “We only took over July 1. That’s when we got full knowledge of the existing contracts.”
In January, Philippe Balducchi, head of the Airbus-led venture overseeing production, told journalists that the aerospace giant aims to realize “significant double-digit” percentage cost reduction. He indicated that most of the savings likely would come from the supply chain, according to news reports.
“Look, the airplane is absolutely fantastic—it just costs a lot of money,” Marcheschi said. “Now, we have to find a way to reduce the cost.”
Summary
- Airbus is working to slash supply chain costs on A220 program, but no announcements yet.
- The European plane maker wants to offer commercial MRO services in North America.
Pontifications: Doubts continue over Boeing NMA launch
March 4, 2019, © Leeham News: Another week, another NMA story.
For an airplane that doesn’t exist, the prospective Boeing NMA continues to dominate much of the aerospace news.
By Scott Hamilton
Last week’s announcement by Rolls-Royce that it withdrew—in December, as it turns out—from the competition to power the NMA prompted a flurry of stories in aerospace media, including LNA.
Some stories suggested RR’s withdrawal meant Boeing was getting closer to launching the airplane.
Boeing, in January, said Authority to Offer might come this year and program launch had moved from 2019 to 2020.
Two prominent consultants predicted at the Pacific Northwest Aerospace Alliance conference last month the odds were 60-40 or 65-35 Boeing would proceed.
Maybe, but I have to tell you that conversations I had last week in the wake of the Rolls announcement are not encouraging.
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.
Launching the NMA could mean new business model for Boeing
By Dan Catchpole
Feb. 14, 2019, © Leeham News: Commercial aerospace’s super cycle is alive and well—and looks to keep going through the foreseeable future. Major suppliers and OEMs, and industry analysts at the Pacific Northwest Aerospace Alliance annual conference are all optimistic about the industry demand. Analysts noted potential concerns, such as a trade war with China, a catastrophic terrorist attack, or an economic shock. However, even the often bubble-bursting Richard Aboulafia, an aerospace analyst and vice president at the Teal Group, said the party likely will keep rolling on for several years more.
Amid such a sunny forecast, Boeing is weighing whether to overhaul its commercial aerospace business model, said Kevin Michaels, a co-founder of AeroDynamic Advisory.
The company is working to close the business case on a new midmarket airplane (NMA), already dubbed the 797 by industry watchers. The NMA—or, if Boeing does not launch it, then its next single aisle airplane—likely will usher in “the next evolution of the jetliner business model,” Michaels said.
The new model, he said, has four key aspects:
- Greater vertical integration and in-sourcing work;
- Targeted, yet aggressive expansion of services;
- Redefining supplier relationships to capture more aftermarket revenue; and
- Introducing model-based systems engineering.
Airbus ends the A380 program
Feb. 13, 2019, © Leeham News: Airbus announced today (Seattle time, Feb. 14 in 
Toulouse) that it is terminating the A380 program.
The last airplane will roll off the assembly line in 2021, for Emirates Airlines.
Emirates cancelled an order for 39 A380s. In its place, the carrier ordered 30 A350s and 40 A330neos.
The Emirates and Airbus press release is here.
Read more
Automation reduces foreign advantages over US
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Introduction
Nov. 19, 2018, © Leeham News: The move toward increasing automation makes US more competitive than moving work to other countries, an expert in industrial 
efficiencies said last week at a meeting sponsored by the Pacific Northwest Aerospace Alliance.
The same is true when it comes to states competing against other states, he said—something that is especially relevant as Washington State girds for expected competition from Southern states, and especially South Carolina, for the prospective Boeing New Midmarket Airplane.
Summary
- Automation reduces US labor costs.
- 60% of Boeing’s workforce is eligible for retirement in the next six years.
- Optimizing the manufacturing value chain based on finite resources.
- Pressure for speedy decisions is greater than ever.
Pontifications: Fine balance needed by Boeing in aftermarket services drive
By Scott Hamilton
April 30, 2018, © Leeham News: The Wall Street Journal Friday reported Boeing was poised to purchase a supplier; a deal could be announced as early as today.
The acquisition, if it happens, will be a major step toward increasing the business at Boeing Global Services (BGS).
It will be another step in the vertical integration that recommenced under Boeing CEO Dennis Muilenburg, an outgrowth of too much outsourcing with the 787.
Coincidentally, the day before, Wendi Folkert, director for Supply Chain Propulsion Strategy for The Boeing Co., acknowledged that the growing BGS has to balance against competing with Boeing’s own suppliers.
Folkert made her remarks at the I-90 Aerospace Corridor Conference in Spokane (WA).
Phil Krull of Embraer Executive Jets will present at the Southeast Aerospace and Defence Conference in Mobile (AL) in June. Airbus, NASA, Pratt & Whitney, Bombardier, Southeastern state governments and suppliers will also present.Go here for Agenda and Registration information.
Pontifications: Small suppliers prepare for production transformation
By Scott Hamilton
March 12, 2018 © Leeham Co.: When it comes to preparing for increasing automation, robotics and transforming the way airliners will be built in the future, focus rests primarily on the big OEMs and suppliers.
The small suppliers also must prepare for this transformation.
Tool Gauge of Tacoma (WA) is one such company. I sat down with Jim Lee, manager of sales and marketing, at the Pacific Northwest Aerospace Alliance conference last month in Lynnwood (WA) to talk about transformation.
The Southeast Aerospace & Defence Conference looks at the Transformation in production and building for the future. It’s June 25-27 in Mobile (AL).
Professionals see two types for Middle of the Market sector
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Introduction
March 1, 2018, © Leeham Co. Three industry professionals raised the question whether the Middle of the Market sector requires one aircraft type or two.
One raised the prospect Boeing might have to undertake concurrent aircraft development, as it did with the 757 and 767.
Richard Aboulafia, a consultant with The Teal Group, Ron Epstein, aerospace analyst for Bank of America Merrill Lynch and Kevin Michaels, president of AeroDynamic Advisory, made their remarks at the annual conference of the Pacific Northwest Aerospace Alliance last month in Lynnwood (WA).
Summary
- Low-cost Embraer engineers may play a role in Boeing’s development of the NMA.
- One consultant sees two distinct NMA aircraft.
- Boeing’s vertical integration of the supply chain may make sense only with two concurrent of consecutive airplane programs.