Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
- Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale April 23, 2025
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
How good is a used 767-300ER? Part 3
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By Bjorn Fehrm
Introduction
Jan. 4 2016, ©. Leeham Co: Before Christmas we started our Boeing 767-300ER article series around acquiring used twin-aisle 767 aircraft to upgrade Boeing 757-based long haul services. We compared the aircraft’s base characteristics in Part One and then their Cash Operating Cost (COC) in Part Two.
Now we continue by analyzing the Direct Operating Cost (DOC) of the aircraft. This adds capital costs to the other operating costs for the aircraft. As the reason for our renewed interest in the 767-300ER is the attractive prices on the used market combined with low fuel prices, the capital costs are an important part of the overall understanding of the costs for the aircraft.
In our assumptions, the 767 is bought as a 10 year old aircraft and then refurbished. It is then operated on a six year financial lease, as is our 757 that we replace. Our benchmark aircraft, the Airbus A330-200 flying in a mainline airline, was bought new in 2009 and is operated on a 10 year financial lease.
Summary
- The low capital costs of the 767-300ER makes it cost competitive in the fuel scenarios that are likely within its six year lease period.
- The 757-200W has fractionally lower direct seat mile costs than the 767, but it has lower capacity and its more limited range reduce its operational usefulness.
- The A330-200 has the best operational flexibility but its higher capital costs makes it the most expensive aircraft to operate in the period of interest.
- In a final article, we will add the revenue capability of the aircraft. This is where the A330-200 gets the chance to show if it can cover its higher direct costs with its higher earnings capability, thereby generating more value for the airline.
CS100 certified; We review CS100’s birth with VP CSeries, Rob Dewar
Introduction
By Bjorn Fehrm
21 December 2015, ©. Leeham Co: Bombardier (BBD) received certification of the smaller CSeries, the CS100, by Transport Canada Thursday. Rob Dewar, vice president of CSeries, reflected on the journey to certification in an exclusive interview with LNC.
CSeries VP Rob Dewar with CS100 Certificate. Source: Bombardier.
The interview was done against a backdrop of more than two years of delays, which in turn drained the coffers of BBD. To save the project and let it prove its game-changing character, management sold 49.50% of the CSeries program to the Province of Quebec for $1bn and 30% of its train division to Caisse de dépôt et placement du Québec, for an additional $1.5bn.
Dewar has managed the project from the program launch in 2008. The transcript of the interview follows.
How good is a used 767-300ER, Part 2
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Introduction
By Bjorn Fehrm
Dec. 21 2015, ©. Leeham Co: Last week we started our Boeing 767-300ER article series around acquiring used twin-aisle 767 aircraft to upgrade 757-based long haul services, like Canada’s WestJet has done. We compared the aircraft and looked at the base data for the aircraft in article one.
Now we continue by analyzing the Cash Operating Cost (COC) of the aircraft in a typical long haul configuration, using our normalized seating. We are assuming that the 767 and the 757 are a half-life state between overhauls of engines and airframe.
Our benchmark aircraft is an Airbus A330-200 which is flying in a mainline airline. Here we assume that it is 25% deteriorated since new for engines and airframe.
Summary
- The 767-300ER and A330-200 differ in fuel and crew costs per seat mile but are close in most other cost items for COC.
- The 757-200W has lower fuel operating and crew costs than a 767 for the sectors it can perform. It is more expensive in maintenance and landing/underway fees on a per-seat basis.
- Overall the 767 is sufficiently within range of the A330-200 for cash operating costs so that when we add capital costs, it could be close to a draw.
- Finally, we will look at the earnings capabilities of the aircraft by adding standard yields for the payloads the aircraft can carry.
How good is a used 767-300ER?
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By Bjorn Fehrm
Introduction
Dec. 16 2015, ©. Leeham Co: Fuel prices at a record low changes a lot of short- and mid-term planning scenarios for airlines. An introduction of a used aircraft with higher fuel burn for a typical lease period of five to six years is possible without endangering the airline’s economics.
The risk of oil prices going sky high in such a period is low, hence the attractiveness of complementing ones fleet with leased older aircraft like Canada’s WestJet has done. It will introduce ex. Qantas 767-300ERs on several traditional 757 destinations like Hawaii and presumably West Europe.
We therefore expand our in dept look of the deployment of used aircraft with a look at the WestJet choice; Boeing’s 767-300ER and compare it to a more contemporary twin, Airbus A330-200.
Summary:
⦁ The 767-300ER is around 25 seats smaller than our benchmark aircraft, the more modern A330-200.
⦁ The A330-200 previously put the 767 under pressure and Boeing responded with the 787-8. We will check if this is still the case when oil is below $40 a barrel and leasing cost for a used 767 is below $300,000.
⦁ We will also check what load-factors an airline like WestJet has to attain on the 767 to reach the same seat-mile costs as for the 757 that the route was up-gauged from.
⦁ We will follow the scheme of the 777-200ER vs. A340-300E comparison, Part 1 compares the aircraft, Part 2 the costs and Part 3 the revenue and margin performance of the aircraft.
4-engine single-aisle airplanes could make comeback, says technology VP
Dec. 15, 2015, © Leeham Co: LNC’s Bjorn Fehrm started a firestorm of discussion last Friday with his Corner about twins-vs-quads column. His focus was on the Very
Could a four-engine, single-aisle airliner make a comeback? It’s something that might be possible. Photo via Google images.
Large Aircraft sector. Overlooked in all of the discussion was a piece of information LNC wrote April 6 from an interview with Alan Epstein, VP of technology and environment of Pratt & Whitney, in which he mused that quads could make a comeback—on smaller airplanes.
The original article was behind our Paywall, but the Summary with this reference was in the freewall portion. We’ve now opened the article to full freewall and it may be found here.
Bjorn’s Corner: Twins or quads?
By Bjorn Fehrm
11 December 2015, ©. Leeham Co: The debate over two or four engines for long range aircraft is as old as the jet airliner. A number of myths have been pedaled over the years over the virtues of the one over the other. The myths have even been presented by airline CEOs as “facts that are known in the industry.”
Having done several in-depth comparisons of two-vs-four engined long range aircraft, we can’t find the patterns that these myths propel: that a quad is less efficient than a twin and should have higher maintenance costs. What we see is that it is all dependent on what one compares and to what technology generation the one or the other aircraft belong.
When we didn’t get the same results as the myths on a number of areas, we started to wonder what could have created the myths in the first place. Looking at what four engined airliners could have been the source of the rumours, we started to see a pattern. It was a pattern of apple-and-oranges being compared and wide ranging conclusions being drawn.
Here is what we found. Read more
The turbo-prop conundrum: small market, high costs
ATR Turbo-prop. Photo via Google images.
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Introduction
ATR and Bombardier are incumbents. China has a home-market offering.
Indonesia and India want to create a product.
It’s the 60-seat and up turbo-prop market.
It’s too many companies chasing too-small a market.
Summary
- The 20-year demand for 60-99 seat turbo-props is small.
- Developing a new, clean-sheet design is costly.
- There is a solid demand for an inexpensive 19-34 seat turbo-prop—but nobody is interested.
Bjorn’s Corner: MRJ90 first flight
By Bjorn Fehrm
13 November 2015, ©. Leeham Co: Mitsubishi flew their MRJ for the first time this week. I could have added “finally” because it is two years late compared to the original time plan. But who cares when the aircraft is finally ready to fly and everything goes well? (Well, the customers do, actually.)
It was a big moment for Japan, a nation with a sizable aeronautical industry. Japan has been a major partner to Boeing in their larger airplane programs over the 757/767 to the 777 and 787. For the Dreamliner, they even designed and made the hottest item, the high-tech Carbon Fibre Reinforced Plastic (CFRP) wing.
Despite having such a capable aeronautical industry, Japan has not built an own civil aircraft since it closed the production line for the YS-11 twin engined turboprop in 1973. Since then it has acted as sub-supplier and has worked on certain military programs like the Mitsubishi F-2 fighter, based on the Lockheed Martin F16.
The Mitsubishi corporation flew the MRJ90 for the first time Wednesday from the Nagoya Airport in Japan (screenshot from video from Mitsubishi). Most of the flight testing will be done in Moses Lake (WA), USA, where four test airplanes will be based.
Moses Lake is blessed with open skies, little air traffic, a long runway and good weather. It has a long history of flight testing, serving as a test-base for Japan Air Lines 747 pilot training for decades. Boeing also uses Moses Lake for flight testing.
We analyzed the MRJ90 and its main competitor the Embraer E175 in a subscriber article the 25th of January. We will revisit the main characteristics and then comment on what could be seen from the first flight. Read more