Pontifications: Airbus’ new edginess

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By Scott Hamilton

March 14, 2016, © Leeham Co.: Airbus is presenting a new edginess in the long-running war of words with Boeing, adopting a tactic Boeing has used for years to make its case.

The European manufacturer has never been shy about getting in its digs at Boeing, but generally Boeing’s messaging—years in the making and steadfastly adhered to—has had more sticking power than Airbus’.

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Pontifications: There are numbers, and there are numbers

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By Scott Hamilton

March 7, 2016, © Leeham Co.: The public relations battle between Airbus and Boeing was on full display at the annual conference last week of the International Society of Transport Aircraft Trading (ISTAT) in Phoenix (AZ).

As usual, the respective officials of the two companies used numbers to make the case that their airplanes sold more than the other guy.

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Bjorn’s Corner: Engine architectures

By Bjorn Fehrm4 March 2016, ©. Leeham Co: There is a saying, “There’s more than one way to skin a cat.” The same goes for making successful Turbofans to commercial aircraft.

At the recent Pacific Northwest Aerospace Alliance 2016 sub-supplier conference in Seattle, GE, Rolls-Royce and Pratt & Whitney all talked about their latest engine projects and the technology development that was critical to their success.

The engines they talked about, the GE9x, Rolls-Royce Advance and Pratt & Whitney’s Geared Turbofan, can all be characterised as the best of breed for their intended use but they could not be more different in how their level of excellence is achieved.

It made for interesting listening. Here’s the gist of what was told.

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PNAA Day 3: Boeing bought $40bn of stuff from suppliers in 2015

Feb. 11, 2016, © Leeham Co. “We bought more than $40bn worth of stuff from suppliers last year. We delivered 762 airplanes last year and we could not have done that without the suppliers.

  • Feb. 11, 2016: Today is the last of three days of conference meetings organized by PNAAthe Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’ve provided live reporting throughout the three days.

“We’re going through a shift…and through a global dogfight,” Kent Fisher, VP-GM of Supplier Management or Boeing, told the Pacific Northwest Aerospace Alliance (PNAA) conference today.

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PNAA Day 2: Cautionary note raised

  • Feb. 10, 2016: Today is the second of three days of conference meetings organized by PNAAthe Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.

Feb. 10, 2016: Large commercial aircraft deliveries hit just under $104bn in 2015, a 4.9% gain over 2014. Regional aircraft values, however, were just $7.1bn, a decline of 10.5% year-over-year, said Richard Aboulafia, a consultant with the Teal Group.

Deliveries of all aircraft types, including military, rotocraft, etc., saw only a 0.6% increase YOY. Jetliners account for 60% of the total values.

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PNAA Day 1: Boeing’s view of the global market

  • Feb. 9, 2016: Today is the first of three days of conference meetings organized by PNAAthe Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.

Randy Tinseth, VP-Marketing for Boeing, said forecasts predict oil as low as $7/bbl and as high as $80/bbl–as always, “giving themselves a lot of leeway.”

Asia remains the top growth market, adding 100m passengers every year (the size of Atlanta’s international airport, the world’s busiest, which served 100m passengers lasgt year.

The cargo market has been challenged over the last six years, and it comes and goes, but it will come back when trade comes back, Tinseth said.

  • Tinseth compared the 787-10 with the A330-900 to show a claimed 165nm range advantage–but the A350-900 (new generation-to-new generation) was omitted. The A350-900 has a much longer range than the 787-10. (Updated to correct the A330-800 to the A330-900.)

The single-aisle market represents 70% of the market and half the value, including Airbus and all other competitors.

“We as an industry and we as a company have to focus on doing the right things…and build at the right cost” to be successful, Tinseth said.

He said that given the total forecast of 35,000 airplanes from regional jet to Very Large Aircraft, there is a need for 60% of the sales still to be made.

Tinseth said the company will deliver fewer 737s this year because the supply chain can’t keep up as the transition between the NG and MAX takes place.

Update: This email was received later from Boeing’s Corporate Communications department:

I wanted to touch base on this bullet in your coverage of Randy’s PNAA presentation.

After talking to Randy, I believe his response was lost in translation.

He was making the point that the transition to MAX is the reason we’ll deliver fewer 737s—because we’re producing several MAX airplanes this year that won’t deliver until 2017.

On a follow up question about separate production lines, he was simply making the point that the NG and MAX share a common supply chain.

So the supply chain is delivering precisely to our 42 per month rate. We’re producing 42 per month, but won’t be able to deliver to that rate this year due to MAX certification.

His point was the opposite of “can’t keep up.” Our suppliers are doing exactly what we need them to do. We can’t expect  them to deliver at a rate higher than 42 right now just so we can build more NGs to make up for the MAXs that won’t deliver this year. And of course, that would go against our own rate hike schedule.

China’s market has slowed,  but the government is restructuring the economy but “we see robust, double-digit growth” for the future, he said.

Despite the fluctuation of oil prices, “we haven’t seen a change in the replacement pattern,” Tinseth said. Aircraft reach maintenance requirements, interior upgrades and certain ages that simply need replacement.

 

 

PNAA Conference Day 1: Aerospace Clusters

  • Feb. 9, 2016: Today is the first of three days of conference meetings organized by PNAAthe Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.

Aerospace clusters are evolving throughout the world, said Kevin Michael, vice president of ICF International.

California is on the decline. Two new clusters on the rise are Mexico and the Southeastern US. The Netherlands and Singapore are successful, long-term clusters.

California was the premier aerospace cluster for decades, but its demise began when Lockheed chose Georgia as the location to build the C-130. The founding of Airbus was not good news for SoCal, and neither was the end of the Cold War. The acquisition of McDonnell Douglas by Boeing in 1997 further precipitated the decline of SoCal.

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A320 FAL “good for US aerospace,” says Airbus

 

Sept. 16, 2015, © Leeham Co., Mobile (AL): The opening of the Airbus A320 Final Assembly Line here achieves a major set of goals set by the company 10 years ago for its own strategic purposes, but officials are also mindful of the larger impact on US aerospace.

David L. Williams, VP Procurement, Airbus Americas. Photo via Google images.

Top executives point out that the Mobile plant reestablished a second commercial aviation assembly site in the US since the last MD-11s and MD-95s rolled out of the former McDonnell Douglas plant in Long Beach (CA) after its acquisition by The Boeing Co in 1997. Boeing continued production of the MD-11 until the end of 2000 (with deliveries occurring in 1Q2001). The last MD-95, renamed the Boeing 717, was produced in 2006. There were 200 MD-11s and 156 717s produced.

With nearly 10 years elapsing between that last 717 and the first A321ceo coming out of Mobile, Airbus officials say the creation of the FAL is not only good for Airbus and Alabama, it’s good for US aerospace.

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Boeing’s dedicated freighters views an improving market

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By Scott Hamilton and Bjorn Fehrm

Introduction

Feb. 22, 2015: An improving global freight market gives Boeing hope that air cargo demand will support the production of two new main-deck freighters a month for years to come. Boeing is struggling to sell 747-8Fs to keep the 747 line alive and needs to sell the 777F to support its goal of maintaining the current 777 production rate of 100/yr through the transition in 2020 to the new 777X.

Randy Tinseth, VP Marketing for Boeing included the projection as a passing reference in remarks Feb. 11 to the 14th Annual Conference of the Pacific Northwest Aerospace Alliance in Lynnwood (WA). The following week we spoke at length with Tom Crabtree, Boeing’s Regional Director, Airline Market Analysis, Marketing & Business Development, about the long-suffering global cargo market and Boeing’s forecast for recovery.

Summary

  • Increasing reliance on belly capacity doesn’t negate need for large main deck freighters, Boeing says.
  • Boeing sees need for two new-build, large freighters per month.
  • Accepting Boeing’s demand forecast, Leeham Co. sees another production rate cut for the 747-8.

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Here’s why Boeing won’t do a “757 MAX”

Feb. 12, 2015, c. 2015 Leeham News and Comment: Boeing appeared to put to bed once and for all any prospect of reviving the 757 to fill a product gap between the 737-9 and the 787-8.

Randy Tinseth, vice president of marketing, refuted a published report that said Boeing was studying resurrecting the plane, last delivered in 2005, with new engines and winglets. Tinseth made the remarks Feb. 11 at the Pacific Northwest Aerospace Alliance conference in Lynnwood (WA).

While Boeing studied the prospect at one or more points, we didn’t view this as particularly significant; Boeing looks at virtually all options when studying product development.

Our economic analysis, performed after the published report, is one reason why we didn’t believe Boeing would proceed with a “757 MAX.” The economics simply fall short of the competing Airbus A321LR by double digits.

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