Boeing 737 MAX 10

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By Bjorn Fehrm

Introduction

January 17, 2017, © Leeham Co.: Boeing has given its sales team the “authority to offer” the 737 MAX 10. The aircraft is a stretched version of the 737 MAX 9, designed to compete more successfully with Airbus A321neo.

Boeing worked on the variant for the last year. It started off as a more ambitious change over the 737 MAX 9, but it turned out too expensive and would have taken too long to get to market. The variant that Boeing now offers to airlines is a simple stretch of the 737 MAX 9.

The backing down to a stretched MAX 9 solves the cost and timing problem, but will it solve the competitiveness problem? We make a first analysis.

Summary:
  • The offered 737 MAX 10 is a longer fuselage MAX 9.
  • The longer fuselage closes the cabin dimensions gap to the A321neo.
  • The 737 MAX 10 is longer and heavier than the MAX 9, affecting performance.
  • To save field performance, a change to the main landing gear was necessary.

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Comparing 777 Classic, 787 Book:Bill in recent years

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Introduction

Jan. 11, 2017, (c) Leeham Co.: Future production rates of the Boeing 787 is a concern for LNC, which has been explained in detail here.

A little history provides some context.

Figure 1. Analysis from March 2014. Click on image to enlarge.

As far back as March 2014, we identified the growing production gap for the 777 Classic. In presentations in April and May 2014, we outlined this gap (Figure 1) and forecast that production rates would have to come down in the not-too-distant future.

The rest, as they say, is history.

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Aircraft list prices largely unchanged (Updated)

Update: Airbus Jan. 11 announced a 1% list price increase. The chart has been updated.

Jan. 10, 2017: Aircraft list prices are largely unchanged for 2017, the airline industry demand cools for new aircraft.

Sales in 2017 were down for the Big Two, Airbus and Boeing. Boeing announced orders for 688 aircraft, well off of last year, which also was a major decline from the year before.

Airbus announces tomorrow, with sales expected to be in a similar range.

Bombardier and Embraer announce later this month or next.

LNC compiled the current list prices from all the manufacturers, detailed in Figure 1 below.

Airbus and Boeing discounts typically range from 40% to 60%, depending on the customer, the airplane and the size of the order. BBD and EMB discounts may also be steep, depending on the campaign.

The balance of this article is for Subscribers only.

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Deferrals grow as airlines fight to keep bottom line

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Introduction

Jan. 09, 2017, © Leeham Co.: Airlines have deferred or are thinking about deferring more than 400 airplanes in the near term, a review of decisions and deliberations  that have been made during the last 12 months.

LNC tracked announcements last year of deferrals and statements by airlines that they are thinking about doing so.

We began identifying macro-level issues last week in our posts about emerging concerns for the 787 and LNC’s Outlook for 2017.

Reasons vary widely for the deferrals, these reports indicated. Low oil prices. Slowing economies. Declining financial results. Worries about two of the three top Middle Eastern carriers. A capital squeeze in China. Pressure on long-haul carriers from the emerging sector of low cost, long-haul airlines. Preserving capital expenditures to keep the bottom line in the black.

Today we detail the deferrals we tracked.

Summary
  • Deferrals of single aisle aircraft are less worrying than for wide-body aircraft
  • For wide-bodies, it depends on the program. For the Airbus A380, deferrals turns the program back into the red. For the A350, deferrals can help with delivery commitments.
  • For the Boeing 777, deferrals spells trouble, especially for the present generation.
  • The 787 is more resilient but the slow sales make the program sensitive longer term.

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Analyzing the Top Customers for Airbus and Boeing

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Introduction

Jan. 4, 2017, © Leeham Co.: The top 25 Airbus customers that are identified account for 63% for the current backlog, an analysis of the company’s order list shows.

For Boeing, its Top 25 customers account for 69% of its identified backlog.

Both companies have hundreds of Unidentified orders for which no customer is disclosed.

Summary
  • “China Inc.” is Boeing’s #1 identified customer and #3 for Airbus.
  • Two low cost carriers are the first and second top customer for Airbus.
  • Three low cost carriers follow “China Inc.” as Boeing’s Top Customers.
  • Boeing’s Top 3 wide-body customers are in the Middle East, where financial and traffic results are beginning to soften.
  • Three of Airbus’ Top 5 customers are also from the Middle East. The other two are from Asia.
  • Boeing has 54% of the market share among the Top wide-body customers. Airbus has a 54% market share in the narrow-body sector.

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Market, other factors emerging, creating Boeing 787 concern

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Introduction

Jan. 4, 2017, © Leeham Co.: Despite a rosy picture painted by Boeing about the future of the 787 and the ability to recover more than $29bn in deferred production

Boeing photo.

and tooling costs, there are signs that cause concerns over the next 3-5 years.

Summary
  • Near-term production outlook solid, weakness begins in 2020, big gap in 2021.
  • Boeing doesn’t see wide-body sales recovery until next decade.
  • Company foregoes increasing 787 accounting block; sales won’t support it.
  • Market talks about deferring 787s.

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2017: the year ahead

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Introduction

Jan. 3, 2017, © Leeham Co.: The New Year is here and it doesn’t look like a good one for commercial aerospace, if measured against previous outstanding years.

There are some troubling signs ahead, piling on to a slowdown in orders from last year that didn’t even reach a 1:1 book:bill.

This year looks to be worse than last. Airbus and Boeing will give their 2017 guidance on the earnings calls this month and next. Bombardier and Embraer earnings calls are a ways off, when each will provide its guidance.

But LNC believes the Big Two in particular will be hard pressed to hit a 1:1 book:bill this year and may even struggle to match 2016 sales.

Boeing’s year-end order tally comes Thursday. Airbus’ comes on Jan. 11.

Summary
  • Wide-body sales remain weak.
  • Narrow-body backlogs and low oil prices continue to inhibit sales.
  • China, Middle East concerns emerging.
  • United Aircraft MC-21 and COMAC C919 begin flight testing.
  • Airbus A330neo, Boeing 787-10, Embraer E195-E2 and Mitsubishi Aircraft MRJ-70 roll-out and begin flight testing.
  • Airbus A321neo and Boeing 737 MAX 8 EIS.

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Airbus, Boeing Top Customers mix of stable, risk and reward

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Introduction

Dec. 22, 2016, © Leeham Co.: When it comes to comparing backlogs of Airbus and Boeing, the latter likes to point to what it calls a better quality of customers.

The fact is, both companies have large orders with airlines that may be characterized as less than top quality, or which appear to have over-ordered.

Summary

  • Airbus is more risk-reward oriented than Boeing.
  • Airbus appears more aggressive in emerging markets.
  • Airbus and Boeing share risky and quality customers.
  • Many of the shared top customers are roughly balanced between Airbus and Boeing.

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The Boom SST engine challenges: Summary

By Bjorn Fehrm

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Introduction

December 19, 2016, ©. Leeham Co: It’s time to round off our article series around the engine for a Supersonic Transport Aircraft (SST). The series was triggered by Boom Technologies’ plans to launch a business class-only SST with Virgin Atlantic signing up to buy the aircraft if Boom succeeds.

Our initial articles described the problems involved in making a Mach 2 SST. We singled out the engine with nacelle as the most difficult challenge.

Figure 1. Boom Technologies’ Mach 2.2 airliner with 45 business seats. Source: Boom.

Subsequent articles focused how to select an engine for such an aircraft. The requirements are pretty unique and forces design choices which are contrary to a normal airliner engine.

Today, the words “low bypass ratio” and “low overall pressure ratio” are nonexistent in engine OEMs’ brochures. Yet this is what we need for our SST. Having covered the cruise phase in Part 4, we now close with take-off/landing and what else to think of when propelling an SST.

Summary:

  • An SST aircraft needs low bypass engines with a low overall pressure ratio. This is contrary to all normal airliners’ needs.
  • The engines need to be housed in nacelles with variable inlets and outlets.
  • As a consequence, a configuration with three engines is questionable. A two engine layout would be more optimal.

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The Boom SST engine problem, Part 4

By Bjorn Fehrm

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Introduction

December 15, 2016, ©. Leeham Co: In our article series around the engine for a Boom SST, we established the thrust requirements for the engines in Part 3.

To fulfill these requirements, we have now designed four different engines. Three are of the type that Boom says it is considering, an engine that is based on an existing core.

Figure 1. Boom Technologies Boom Mach 2.2 45 seat airliner. Source: Boom.

We based these around a military core with the right characteristics for a low-to-medium bypass SST engine. The fourth engine is a custom-designed straight turbojet, very similar to the engine that propelled the only operational SST, the Concorde.

We will use the reference turbojet to understand the difference to a turbofan in this application and why the selection of an engine for a SST follows different rules than for a normal airliner.

Summary:

  • Supersonic flight requires engines with low frontal areas and low mass flows.
  • Should the engine be designed as for a normal airliner, the inlet drag would be prohibitive.
  • The engine also must have a low pressure ratio core; otherwise the energy of the fuel is wasted on non-productive work.

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