Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- China bans Boeing, US parts imports in tariff war April 15, 2025
- Boeing welcomes COMAC competition as Asia-Pacific demand soars April 15, 2025
- How good is the C929? April 14, 2025
- 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
PNAA Conference Pt 3: Renewable biofuels
The future of bio-fuel is different from the bio-fuel today, says John Plaza, CEO of Imperium Renewables. He is speaking at the Pacific Northwest Aerospace Alliance conference in suburban Seattle. It will be drop-in fuel, potential to be cheaper, meet same specifications as petroleum, equivalent to civilian (JP-8) and military fleets (JP-10).
First generation of bio-fuel is bio-diesel. Second generation will be the drop-in described above. Bio-fuels have to become multiple products as in the petroleum industry.
- We’re seeing increasing density of bio-fuels, which increases BTUs and efficiency on long-haul flights.
- WA State has one of highest recycling programs in the country but still generates a lot of trash (much of which is trained to Oregon). Trash can contribute to bio-fuel.
- Bio-fuel without subsidy costs around $4/gal vs $3.25 or so for jet fuel, so there is still a price disparity.
- 200 million gallons of jet fuel within 100 mile radius of wood slash can be generated.
- Other feed stocks: Jatropha, Eucalyptus, mixed growth plots. Algae is interesting but requires more research.
PNAA Conference, Pt 2: Odds end Ends–Executive Director named; now largest conference in sector on West Coast
PNAA Executive Director: The Pacific Northwest Aerospace Alliance named its first Executive Director, Melanie Jordan. Jordan has been very active in Puget Sound aerospace matters for years and has been on the board of the Future of Flight Museum and the Historic Flight Foundation, both at Paine Field in Everett.
PNAA Growth: PNAA is 15 years old and has been holding its conference for 12 years. This year 400 are attending, a record. This has now become the largest conference of its kind on the West Coast. This is a mix of airlines, OEMs, suppliers, training institutions.
Aircraft interiors: Complexities of interiors are greater than seems obvious. Cockpit doors are example of conflicts: you want authorized and emergency access, but doors have to be able to withstand unauthorized access. Diaper changing tables need to weight no more than 2 pounds but be capable of withstanding 1,200 lbs of pressure and still be 3/4 in thick and three feet long. A light-weight door can be designed but the cost goes beyond the 12 month return on investment, so not favored despite long-term fuel savings. Airline Marketing wants a certain look and battles finance. Engineering has another opinion. Market conditions might suddenly change and make them rethink everything. Lower lobe crew rest takes away cargo space, impacting cargo revenue–but this can be offset by more passengers.
PNAA conference, Pt 1: Traffic data; AA-US merger thoughts, 787
Each airline region of the world is different and many going through transitions US went through previously, says Bob McAdoo, the airline analyst for Imperial Capital (a boutique investment banking company in California).
McAdoo is speaking at the Pacific Northwest Aerospace Alliance conference in suburban Seattle today. Highlights:
- IATA traffic data doesn’t make a lot of sense any more. I can always get traffic–all I have to do is charge $19. Without knowing the data behind the numbers, traffic data is meaningless. People say US isn’t a growth market, but it’s making money.
- American Airlines-US Airways: Turn back clock to 2005/6: America West took over US Airways and in less than a year had best profit margins in the industry. Boeing is on AA creditors committee and I think there will be MD-80s coming out sooner and these guys (Doug Parker) will run it like a business. These guys will look at a route structure and say what works and won’t work, not a route planning department that likes the look on a map. I think you will see a lot of markets shut down.
- These guys have been in the top one or two in profit margin. US carries more people out of Philly than AA does out of New to Europe.
- This is a non-growth world in many respects.
- McAdoo recalls when he was at Texas International and his job was to put Southwest out of business. “I wasn’t very good at that.”
- Allegiant and Spirit are, in effect, next Southwest. Tells a story of a friend who rode Spirit once and will never ride them again, “but I’ll buy their stock.”
- 737-400 rent $65,000, 737NG (older) $135,000.