Shall passenger airliners run as freighters during the COVID-19 crisis?

By Bjorn Fehrm

Subscription Required

Introduction

April 6, 2020, © Leeham News: With the COVID-19 pandemic, the passenger traffic has ground to a halt in many countries. The airliners are parked and their crews sit idle.

At the same time, the air freight market booms. From a decline in demand in the first months of the year, there isn’t enough freighter capacity right now. The freight that traveled in the bellies of the passenger jets had to find new ways and as this was almost half the world’s air cargo, the dedicated freighters can’t absorb the volumes.

Is it time to fly passenger airliners as substitute freighters? Some airlines are doing this on a spot basis. Apart from injecting capacity for needed medical supply freight, does it make economic sense? We run a series of articles on the subject.

Figure 1. Delta flies an A350-900 as a belly freighter between Shanghai and Chicago three times a week from March 30. Source: Delta.

Summary:
  • Freight prices soar as capacity collapses when airlines ground passenger jets.
  • For the airlines, the cost equation changes with an abundance of free capacity at remaining fixed costs.
  • Does it make economic sense to run passenger airliners as freighters in this situation?

Read more

Engine maker, lessor see Boeing’s next airplane as a single-aisle design

Subscription Required

By Scott Hamilton

“The NMA is gone. Long live the NMA.”–lessor CEO. Photo: Leeham Co.

April 2, 2020, © Leeham News: Boeing’s New Midmarket Airplane, or a new concept, is the last thing on the plate right now.

But Boeing’s future product strategy nevertheless requires long-term thinking even as the short- to medium-term is in chaos.

Interviews were conducted March 2 at a major aerospace conference in Austin (TX), just days before the coronavirus crisis exploded exponentially across the globe.

The CEO of the major lessor, Avolon, declared the NMA dead and predicted a new single-aisle airplane will be Boeing’s next project.

An executive of Pratt & Whitney offered a similar view.

Summary
  • “The NMA is gone. Long live the NMA. That moment has passed.
  • Back to the 757 replacement concept and, now, A321XLR competitor.
  • Single-aisle vs light twin-aisle is part of the challenge.
  • New airplane must be “dramatically” more efficient than MAX, neo.
  • 2030 decade is the quickest this dramatic improvement can be achieved.

Read more

Pratt & Whitney committed to advanced GTF for Airbus

Subscription Required

By Scott Hamilton

March 30, 2020, © Leeham News: Pratt & Whitney is concurrently developing what might be termed the next generation GTF. This is an advancement over the current engine, but with more thrust and better fuel economics.

Deurloo eschews the usual Performance Improvement Package (PIP) moniker, however.

“We have been discussing with Airbus for some time, an improvement to the current configuration or our expected configuration,” Deurloo said. “I think that’s a testament to the geared architecture. It’s given us some runway to do a little bit more on that engine.

PW has been in conversation with Airbus for the last few years about an engine that will take  configuration at the end of this year, and put in an improvement.

Summary
  • New name, better economics, better durability.
  • Designed for the A321XLR, but greater flexibility.
  • Fixing current issues.

Read more

Can the A321XLR fly trans-Oceanic routes, Part 2?

By Bjorn Fehrm

Subscription Required

Introduction

March 26, 2020, © Leeham News: We are checking if the Airbus A321XLR is usable for trans-Oceanic routes. It’s a credible trans-Atlantic aircraft, but can it be used effectively over the Pacific Ocean as well?

Last week we found a one-stop routing that worked. Now we compare the economics of flying the A321XLR on a one-stop route versus a longer-range aircraft like the Airbus A330-900 non-stop.

Summary:
  • The A330-900 covers our US West Coast to Japan trip in almost half the time of our single-aisle route over Honolulu.
  • Will it also have a lower per-seat cost? We find out using our airliner operating cost model.

Read more

The meaning and consequences of frozen credit markets

Subscription Required

By Vincent Valery

Introduction  

March 26, 2020, © Leeham News: Credit markets are effectively frozen for many businesses, Boeing said this week.

That’s why the company asked Congress for $60bn in federal aid for itself and the aerospace industry as part of the $2 trillion emergency stimulus package. Although the bill, which at this writing is awaiting Congressional approval, doesn’t name Boeing specifically, The Washington Post indicated $17bn is for Boeing.

Related article

  • See this article discussing Boeing CEO David Calhoun’s comments on the company’s liquidity and ability to raise debt in the current environment. Calhoun pointed out that credit markets aren’t open now. Boeing CFO Greg Smith made a similar comment later in the day
  • The current market stress has similarities but fundamentally different origins from 2008. LNA analyses its causes and consequences for airlines and OEMs.
Summary
  • A different economic shock from 2008 freezes credit markets;
  • Significant consequences for nonfinancial corporations;
  • Airlines and OEMs at the forefront of turmoil;
  • Programs to re-open credit markets;
  • Long-term consequences.

Read more

Coronavirus upends Airbus, Embraer in addition to Boeing woes

Subscription Required

By Scott Hamilton

Introduction

March 23, 2020, © Leeham News: The dramatically and continuously worsening impact of coronavirus worldwide is upending Boeing—more than it has been—and Airbus.

Boeing is considering shutting the wide-body production lines, The Seattle Times reported. It also wants US government aid.

Source: CDC.

Airbus shut its assembly lines in France and Spain for four days in response to federal restrictions.

LNA previously wrote about the impact it sees on Boeing and, to a degree, on Airbus.

These analyses are updated to the latest circumstances.

We also add a look at Embraer delivery stream for March-December.

Summary
  • Even if Boeing recertifies the 737 MAX by mid-year, deliveries now in doubt.
  • Customers can cancel MAXes without penalty.
  • Airbus faces massive deferrals under the circumstances. Penalties apply.
  • Embraer’s customer concentration is in USA.

Read more

Can the Airbus A321XLR fly trans-Oceanic routes?

By Bjorn Fehrm

Subscription Required

Introduction

March 19, 2020, © Leeham News: Over the last weeks, we compared the Airbus A330-900 to the A350-900 when flying the long routes over the Pacific Ocean. Now we pose the question: To what extent is an A321XLR a possible alternative or complement to these long-rangers for Oceanic routes?

The A31XLR has the range to be a credible trans-Atlantic aircraft since its 700nm range hike over the A321LR. But can it be used over the Pacific Ocean as well? We check it out.

Summary:
  • Direct routing US West Coast to East Asia is too long for the A321XLR.
  • But there are interesting US to Asia routings where the A321XLR is the enabler for the route structure.

Read more

Coronavirus impact to Boeing still unfolding

By Judson Rollins

Subscription Required

March 16, 2020, © Leeham News: Boeing stock sold off 28% last week on news that the company would draw down the remainder of a $13.8bn loan it arranged in February to cover ongoing expenses related to the 737 MAX.

In addition to MAX-related charges, the company is also hoping to close its joint venture with Embraer and has looming debt maturities later this year. But the company’s airplane sales prospects are an increasing source of worry for investors.

The coronavirus and its impacts – which are still unfolding – put up significant obstacles to Boeing’s recovery, even as it hopes to finally see the MAX recertified within a few months. Read more

“We’re sick and tired of new technologies:” Avolon CEO

Subscription Required

Introduction

By Scott Hamilton

March 16, 2020, © Leeham News: “I can tell you from our perspective, we’re kind of sick and tired of new, new technology. It’s not proven to be the home run.”

This blunt assessment comes from the chief executive officer of the big aircraft lessor, Avolon.

Domhnal Slattery

Domhnal Slattery, the CEO, was giving his critique of whether Boeing should launch a new airplane once the 737 MAX crisis is over.

Boeing was on a path to decide whether to launch the New Midmarket Airplane when the MAX was grounded one year ago this month.

Airbus was waiting for Boeing to move before deciding how to respond.

Summary
  • Airbus and Boeing should “stick to their knitting.”
  • Focus on incremental improvements for now.
  • 2030s to 2050s will be the next big advance in technologies.

Read more

Does the new weight bump turn the A330-900 to a trans-Pacific aircraft? Part 2

By Bjorn Fehrm

Subscription Required

Introduction

March 12, 2020, © Leeham News: We continue last week’s theme and compare Airbus’ new 251t variant of the A330-900 to the A350-900 in this article.

We saw in the first article the A330-900 251t is now a credible long-range aircraft, including the long hop over the Pacific ocean. When to use the A330-900 or the A350-900? We analyze their economics and where one is to prefer to the other for long-range operations.

Summary:
  • The Airbus A330-900 in its 251t version can serve many US to Asia routes that were reserved for the A350-900 before.
  • We check if the economics support replacing the A350-900 with the A330-900 for these routes.

Read more