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Jan. 7, 2016, (c) Leeham Co. New aircraft programs used to be on time and a source of pride for the Original Equipment Manufactures (OEMs).
No longer. Delays are the norm, and despite “lessons learned,” there is little record so far that much has changed.
Boeing strives to turn this around with the 737 MAX. When the program was launched in July 2011, with a hasty decision to counter the Airbus A320neo order at American Airlines, Boeing forecast the first delivery would be in the fourth quarter of 2017 (October was the more specific target date). Within a year, Boeing revised this forecast to the third quarter, with July being the new target.
With the roll-out last month of the 737-8, Boeing so far appears to be on schedule for the new target. The plane hasn’t made its first flight yet, and plenty could still theoretically go wrong, but at least for now, things appear to be on track.
Embraer announced last month that the roll-out of its first E-190 E2 will be Feb. 25. The company has been tight-lipped about its timeline to date, other than a 1H2018 delivery target, but Market Intelligence indicates the roll-out is likely about a month sooner than had been planned. Suggestions by some that the MAX program is the “only” one on time are simply off the mark.
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Dissecting Boeing cost-cutting
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Introduction
Feb. 11, 2016, © Leeham Co. The news yesterday that Boeing is undertaking a new round
of cost-cutting has been buzzing around management and labor circles for months.
LNC last year began hearing management at Boeing Commercial Airplanes would likely face personnel cuts of 10% to 15%. Cuts were expected within the marketing/sales departments, in part due to struggling sales of the 7-Series airplanes, sources told LNC.
The leading labor unions, SPEEA (engineers) and IAM 751 (touch labor), each told LNC last year they expected workforce layoffs were in the future.
More ominously, a consultant who occasionally worked with Boeing, told LNC that the elevation of Dennis Muilenburg from president and chief operating office to president and CEO (and, eventually, chairman) would make former CEO Jim McNerney’s cost- cutting efforts pale by comparison.
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Posted on February 11, 2016 by Scott Hamilton
Airbus, Boeing, IAM 751, Leeham News and Comment, Premium, SPEEA
737-10, 757, 777X, A330, Airbus, Boeing, Dennis Muilenburg, IAM 751, Jim McNerney, KC-46A, Ray Conner. 787, SPEEA, Wall Street Journal
Can the 787 pay its debts?
By Bjorn Fehrm
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Introduction
04 February, 2015, © Leeham Co: Boeing has presented its results for the last quarter of 2015. It was a quarter for Boeing with solid performance in revenue ($96.1bn) and in cash generation ($9.4bn).
Despite that, Wall Street was not pleased. The 747-8 program is not selling well and the upcoming production bridges for 737NG to 737 MAX and 777 to 777X are no longer to be ignored.
The results presentation is also our chance to check our analysis around the 787 program; will it be able to pay its debts within the forecasted period by Boeing (in the program accounting block of 1,300 units)?
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Posted on February 4, 2016 by Bjorn Fehrm
Boeing, Premium
787, 787-8, 787-9, Boeing
A380 order welcome, but may not add to Airbus backlog
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Introduction
The news of orders by Iran Air and ANA for 12 and three A380s respectively is good news for Airbus, but
these probably don’t do much to boost the backlog in practical terms.
These orders will likely replace some of those in the A380 backlog that are unlikely to be delivered.
In our annual examination of the backlogs of Airbus and Boeing, little has changed for the A380—until the Iran Air and ANA orders, there hasn’t been a sale of the A380 in more than two years.
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Posted on February 1, 2016 by Scott Hamilton
Airbus, Boeing, Premium
747-8F, 747-8I, A350-1000, A380, Air Austral, Airbus, ANA, Boeing, Hong Kong Airlines, Iran Air, Skymark Airlines, Virgin Atlantic
Worry over Boeing 737 production rate ramp up overblown
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Introduction
Jan. 27, 2016, © Leeham Co. As Airbus prepares to hike production rates of the A320 family to 60/mo by the end of the decade and Boeing mulls whether to boost 737
rates above the announced 57/mo announced today, some question whether the companies should do so.
The questions become more frequent as falling fuel prices make the need for the fuel efficient A320neo and 737 MAX appear to be less compelling. The economic turmoil in China adds to uncertainties.
Today we take a look at the 737 order book, based on Dec. 31 data, and extrapolate this to announced and potential future production rate hikes, and draw conclusions whether the rates announced and those under study make sense.
We will look at the A320 backlog in a future post.
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Posted on January 27, 2016 by Scott Hamilton
Airbus, Boeing, Premium
737 MAX, 737NG, A320, A320ceo, A320NEO, Airbus, Boeing
Minuscule demand for Boeing 747-8F
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Introduction
One of Boeing’s white tail 747-8Fs. This, and another that has been stored, was painted in the livery of the Seattle Seahawks. Boeing photo.
Jan. 25, 2016, © Leeham Co. Boeing’s decision to cut the production rate on the 747-8 is not a surprise. It’s only a surprise that it took officials so long to do so.
The company continues to cling to the hope of a recovery in the global air cargo market to sustain the program. This is unlikely, however.
The business case for the 747-8F is minuscule.
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Posted on January 25, 2016 by Scott Hamilton
Airbus, Boeing, Douglas Aircraft Co, McDonnell Douglas, Premium
747-400BCF, 747-400F, 747-400P, 747-8F, 777-300ER, 787, A300-600F, A330-300, A330F, A380, Airbus, Aviation Specialists, Boeing, DC-10, DC-8, DC-9, Douglas Aircraft Co, Israeli Aircraft Industries, McDonnell Douglas, MD-11
Analysis: Sukhoi’s regional jet SSJ100, Part 2
By Bjorn Fehrm
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Introduction
21 January 2016, ©. Leeham Co: The first part of our analysis, published Monday, looked at Russia’s first effort to design and aircraft to penetrate the Western airplane market, Sukhoi Superjet (SSJ100). We concluded that the SSJ100 regional airliner was a good effort.
The aircraft was essentially a Russian airframe with Franco-Russian engines, Western systems and Western avionics. For aircraft that are delivered to Western airlines, it also has an Italian-designed/produced interior.
The aircraft has been in successful deployment with Interjet of Mexico and has now been ordered by CityJet of Dublin. After having looked at base characteristics of the aircraft/engine and also analysed the fuel consumption, we now continue with developing the Cash and Direct Operating Costs of the SSJ100. We compare it with the market leader in the 100 seats regional market, Embraer’s E190.
Summary:
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Posted on January 21, 2016 by Bjorn Fehrm
Embraer, GE Aviation, Premium, Sukhoi, United Aircraft
E-Jet, E190, Sukhoi, Superjet, Superjet 100, Superjet International
Analysis: Sukhoi’s regional jet Superjet 100
By Bjorn Fehrm
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Introduction
18 January 2016, © Leeham Co: Russian aircraft have never succeeded in penetrating the Western market. But then they never really tried, until now. They were designed for the Soviet Union captive market, including the partner states that historically participated in or were friendly to the communistic system. One comes to think of China, Egypt, Libya, Cuba and Nicaragua.
The Sukhoi Civil Aircraft Company (SCAC) Superjet 100 (SSJ100) is the first Russian aircraft specifically designed from the outset to compete on a world market.
We analyse its basic design and performance in comparison to the market leader in 100 seat regional flying, Embraer’s E190.
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Posted on January 18, 2016 by Bjorn Fehrm
Boeing, CFM, E-Jet, Embraer, GE Aviation, Pratt & Whitney, Premium, Sukhoi, United Aircraft, YAK
CF34, E-Jet, E190, E190 E2, SaM146, SSJ100, Sukhoi, Superjet, Superjet International
Exclusive Interview: Airbus COO Tom Williams about changing times for Airbus.
By Bjorn Fehrm
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Introduction
13 January 2016, ©. Leeham Co: Airbus COO Tom Williams has a goal of reducing development expenses by 50% and streamlining the production to “best in class.”
Williams is in charge of the areas at Airbus with the greatest headwinds as Airbus goes from a development driven company to a production driven one.
It’s a daunting task to manage development, production and sourcing for a company with a product range where each delivered unit is made up of four million parts. It does not get easier by having to shrink the development activities from 30,000 employees and contractlors to 20,000.
We spoke to Williams about these challenges at the sidelines of Airbus 2016 annual press conference that recapped 2015 orders and deliveries.
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Posted on January 13, 2016 by Bjorn Fehrm
Airbus, Boeing, Premium, Qatar Airways
A320NEO, A330neo, A350-1000, Airbus
LNC’s annual production forecast for Airbus, Boeing
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Introduction
In our annual production rate forecast for the Big Two OEMs, we combine announced production rate plans, Market Intelligence indicators—largely from the supply chains that serve the Big Two—and our own analysis of where we believe rates should be based on backlog, market
conditions and ramp-up of the 777X and A350 production.
Our forecasts may well run contrary to what the Big Two will say publicly, and even privately, but our assessment is what it is.
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Posted on January 11, 2016 by Scott Hamilton
Airbus, Boeing, Leeham News and Comment, Premium
737 MAX, 747-8, 767, 777, 787, A320, A330, A350, A380, Airbus, Airbus and Boeing production forecast, Boeing, Leeham Co.
New aircraft programs’ sorry record of delay
Subscription Required.
Jan. 7, 2016, (c) Leeham Co. New aircraft programs used to be on time and a source of pride for the Original Equipment Manufactures (OEMs).
No longer. Delays are the norm, and despite “lessons learned,” there is little record so far that much has changed.
Boeing strives to turn this around with the 737 MAX. When the program was launched in July 2011, with a hasty decision to counter the Airbus A320neo order at American Airlines, Boeing forecast the first delivery would be in the fourth quarter of 2017 (October was the more specific target date). Within a year, Boeing revised this forecast to the third quarter, with July being the new target.
With the roll-out last month of the 737-8, Boeing so far appears to be on schedule for the new target. The plane hasn’t made its first flight yet, and plenty could still theoretically go wrong, but at least for now, things appear to be on track.
Embraer announced last month that the roll-out of its first E-190 E2 will be Feb. 25. The company has been tight-lipped about its timeline to date, other than a 1H2018 delivery target, but Market Intelligence indicates the roll-out is likely about a month sooner than had been planned. Suggestions by some that the MAX program is the “only” one on time are simply off the mark.
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2 Comments
Posted on January 7, 2016 by Scott Hamilton
Airbus, American Airlines, Boeing, Bombardier, Comac, CSeries, Embraer, Irkut, Mitsubishi, Premium
737 MAX, 737-8, 777-200LR, 777-300ER, 777F, 777X, A320, A320NEO, A350, A380, Airbus, American Airlines, ARJ21, Boeing, Bombardier, C919, Comac, CS100, CSeries, E-190 E1, E-195 E2, E-Jet E2, Emrbaer E-190 E2, Irkut, MC-21, Mitsubishi, MRJ90
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