Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing, IAM reach tentative agreement on new contract September 8, 2024
- Bjorn’s Corner: New engine development. Part 23. Development risks. September 6, 2024
- If a strike occurs, here’s what Boeing can do September 5, 2024
- China banks on C919, but numbers say it still needs Boeing September 2, 2024
- Bjorn’s Corner: New engine development. Part 22. High Turbine technologies. August 30, 2024
To what extent can the A321XLR replace the Boeing 757, Part 3
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By Bjorn Fehrm
July 11, 2024, © Leeham News: We are comparing the Airbus a321XLR to the Boeing 757 to understand to what extent it can replace the 757 on the longer routes it operates for major airlines like United, American, and Delta.
We have looked at the development and operational history of the aircraft, their Apples-to-Apples capacity and range. Now, we use Leeham’s Aircraft Performance and Cost Model (APCM) to compare the operational costs of the aircraft.
Summary:
- The Boeing 757-200 has the same passenger capacity as the A321LR/XLR and a larger cargo capacity.
- Its range can compete with the A321LR but not the XLR. Both beat the 757 on operational economics.
Embraer’s outlook improves as supply chain stabilizes, near-term availability drives demand
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By Judson Rollins
Introduction
July 8, 2024, © Leeham News: Embraer is on track for a relatively upbeat Farnborough Airshow later this month, having been spared most of the supply chain headwinds plaguing Airbus and Boeing.
It is expected to reveal updates to its E-Jet family at Farnborough, including lower maintenance costs, cabin upgrades, and more.
Source: Embraer.
In May, the Brazilian OEM reaffirmed its target of 72-80 commercial deliveries this year, citing the stabilization of its global supply chain. It doesn’t disclose its commercial production rate. But its peak production reached 96 E-Jets per year pre-COVID.
Embraer’s reported backlog as of March 31 was the highest in company history: 187 E175s, 12 E190-E2s, and 178 E195-E2s. The company has since taken orders for 10 more E190-E2s and 13 E195-E2s, and has delivered approximately 18 E2s overall, according to Planespotters.net.
Most previous-generation E175s are being built for major US airlines subject to pilot “scope clause” or regional airlines operating on their behalf. Scope clause restricts how many aircraft can be flown below a certain number of seats (generally 76-80) or 86,000 lbs MTOW to protect mainline pilots from having their work outsourced to lower-paying regional airlines.
Summary
- E2 delivery slot availability is a key advantage.
- E195-E2 economics favor smaller markets, while the A220 is better suited to longer routes.
To what extent can the A321XLR replace the Boeing 757, Part 2
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By Bjorn Fehrm
July 4, 2024, © Leeham News: We are comparing the Airbus A321XLR to the Boeing 757 to understand to what extent it can replace the 757 on the longer routes it operates for major airlines like United, American, and Delta.
After Boeing didn’t do the obvious 757 replacement, the NMA and Airbus gradually eked out more range and seats on the A321; the A321LR/XLR is the only game in town to replace the 757, especially as the Boeing 737-10 availability continuously slips to the right.
Summary:
- The A321LR/XLR has the same passenger capacity as the 757-200.
- The 757-200 has the range of the A321LR but can’t match the A321XLR.
Boeing is fighting fire with fire in reacquiring Spirit Aero (Updated)
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By Dan Catchpole
Analysis
July 1, 2024, © Leeham News: This is an analysis of Boeing’s reported $4.7 billion purchase Spirit AeroSystems, as Reuters reported Sunday.
First, let’s set the frame.
Boeing seems incapable of doing anything right these days. Even a pre-Farnborough Airshow media briefing by the aerospace giant last week resulted in a reprimand from the National Transportation Safety Board for sharing information about its investigation into the panel blowout on an Alaska Airlines flight on Jan. 5.
The company is bleeding money in its commercial and defense divisions. Boeing could turn around its balance sheet if it could straighten out production for its cash cows—the 737 and 787. Yet somehow, both programs are still struggling.
Boeing’s pissed off the Federal Aviation Administration, the NTSB, key members of Congress, some of its biggest customers, and the Machinists union in Washington and Oregon, among others. Its current CEO is a lame duck who helped create the crises overwhelming the company. Potential successors have said they don’t want the job. Among the front-runners to succeed David Calhoun is BCA’s new CEO Stephanie Pope, who has no production or product development experience and has had few public appearances since she took over BCA in March. There are plenty more problems, but you get the point.
Spirit AeroSystems has been floundering since the COVID-19 pandemic threw the aviation industry into chaos. Since 2020, it has recorded $3.2 billion in net losses, including $617 million posted in the first quarter of this year. Boeing has helped keep the company afloat with financing and price changes.
In short: Boeing is fighting countless fires, and it just bought another one.
Can Boeing fight fire with fire?
To what extent can the A321XLR replace the Boeing 757, Part 1.
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By Bjorn Fehrm
June 27, 2024, © Leeham News: The Airbus A321XLR, the extra-long-range version of the A321neo, will start operational service with IBERIA on the Madrid-Boston trans-Atlantic route later this year. It’s the type of thin, long-range route the Boeing 757 has served to date.
We will use our Aircraft Performance and Cost model (APCM) to examine to what extent the A321XLR can replace the 757 on world routes. What is the difference in capacity and range, and what improvement in operational economics can be expected?
Summary:
- The Boeing 757 was the original MOM/NMA (Middle-Of-the-Market / New-Midmarket-Airplane).
- It had unique characteristics, which Boeing would have followed up with the NMA project.
- Boeing hesitated, and Airbus developed the A321XLR to fill this role. Has it succeeded?
Trent 7000 reliability under the spotlight
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By the Leeham News Team
June 24, 2024, ©. Leeham News: The Rolls-Royce Trent 7000 is the exclusive engine for the A330neo and the seventh in Rolls Royce’s Trent series.
Having entered into service in early 2019, the engine has already surpassed one million flying hours.
The powerplant – which is the Trent 1000 but with bleed air features vs the electrically-based Trent 1000 – features efficient hollow Titanium fan blades enabling a fuel burn improvement of 14% per seat compared to previous iterations of the A330.
Launched by Airbus in July 2014, the A330-900 Neo is powered exclusively by Trent 7000 engines. Credit: Airbus
However, there have been issues relating to the reliability of the Trent 7000 which have complicated the A330neo’s early years of service.
Industry insiders have told LNA that operators of the A330neo faced lower than expected time-on-wing for the powerplants, as well as a lack of spares that has impacted maintenance and return to service.
Experts say the protective coatings on the engine’s turbine blades have reportedly been a factor.
But RR strongly denies there have been any reliability issues with the engine.
A RR spokeswoman said: “Our fleet of Trent 7000 engines is performing exceptionally well, and has delivered industry-leading levels of reliability to our customers over the last 18 months.” Read more
The all-important cabin. Part 4
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By Bjorn Fehrm
June 20, 2024, © Leeham News: We do an article series about the all-important cabin for an airliner. We have looked at different airliners and their cabins and how the seating differs widely depending on what market and customer segments the aircraft addresses.
If an aircraft is configured for the domestic market the seating increases by almost 50% compared with an international long-range aircraft.
We now look at what cabins to use for aircraft economic evaluations. These are not necessarily the same cabins that an airline would later use after selecting an airliner type.
Summary:
- The evaluation cabin must not be the same as the cabins the airline plans to use.
- Evaluation cabins are designed to minimize the skew that OEMs can introduce by making cabin rules fit “their” candidate especially well.
Aircraft production woes stretch far beyond Boeing
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By Judson Rollins
June 17, 2024, ©. Leeham News: Estimating airplane delivery rates isn’t much more than a guessing game nowadays.
While many headlines point fingers at beleaguered Boeing and Spirit AeroSystems, aviation’s production woes are much more complex. Even in 2024, the labor shortage legacy of COVID-19 and raw material shortages exacerbated by the Russia-Ukraine war loom large over the industry.
Airbus struggles to deliver airplanes on time, and engine makers also see their deliveries constrained by supply chain issues.
Source: AFP via Aviation Week Network.
Summary
- Boeing commercial production is far below advertised rates.
- Airbus deliveries suffer from shortages of seats, other parts.
- Embraer says deliveries would be higher without supply chain issues.
- COMAC’s disruption opportunity is dampened by likely trade conflict.
- Pratt and GE Aerospace slowly ramp up delivery of redesigned components.
Elliott’s plan for Southwest: new governance, curbed costs, monetize passengers
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By Judson Rollins
June 13, 2024, © Leeham News: Elliott Investment Management announced an activist shareholder campaign against Southwest Airlines’ board and management earlier this week.
The airline’s share price has declined 50 percent in three years and sits near its April 2020 value, one month into the COVID-19 pandemic. Elliott says this is due to poor board governance and day-to-day management.
Source: Elliott Investment Management.
“Southwest’s [board] has failed to hold management accountable for poor execution and has been unable to catalyze (or permit) the necessary strategic evolution,” Elliott wrote in a letter to the Southwest board.
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“Instead, the [board] has reinforced an insular culture and outdated thinking in the face of indisputable evidence that change is required.”
To gain a deeper insight into Elliott’s proposed ‘Stronger Southwest’ plan, LNA studied the firm’s letter and accompanying presentation and spoke with sources familiar with the situation.
Summary
- Elliott blames subpar returns on insular, stagnant board and management.
- Keys to restored profitability include curbing cost growth, passenger monetization.
- New board, CEO with industry experience would drive business change.
- Employee resistance is a likely headwind; will improved profit sharing help?
Freighter market faces turmoil while passenger sector gets the headlines
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By Scott Hamilton
June 10, 2024, © Leeham News: Delivery delays of widebody airplanes are causing disruptions in freighter conversion plans as feedstock is retained for passenger operations.
IAI Bedek Boeing 777-300ER P2F. Photo: IAI Bedek.
Demand for passenger airplanes also is slowing Airbus’ plans for the A350 freighter, according to market intelligence.
Softening of the cargo market since the end of the COVID-19 pandemic also impacts the immediate need for converting airliners to freighters, sources say.
Although Boeing’s delays with the 787 and 777X get most of the blame, Airbus also gets some credit for the A350 program. Already, say potential cargo airplane buyers, the A350 freighter is looking at a delay beyond the 2026 entry into service (EIS) date. Uncertainties among Middle Eastern carriers Etihad and Emirates over the A350-1000 Rolls-Royce engine durability are also causing officials to rethink retaining Boeing 777-200LRs and 777-300ERs in service.
Certification of the IAI Bedek 777-300ER freighter conversion program is taking longer than expected. The reason: the negative halo effect dating to the Federal Aviation Administration (FAA) certification crisis with the Boeing 737 MAX.
It took Boeing 21 months to recertify the MAX after its grounding began in March 2019. The MAX 7 and MAX 10 still aren’t certified and aren’t expected to be until sometime next year.
Certification of the 777X, also affected by the negative halo effect of the MAX crisis, isn’t certified. EIS was intended to be in 1Q2020. Boeing has yet to receive Type Inspection Authorization (TIA) from the FAA, one of the final steps required before certification. Boeing officially hopes certification will occur next year. But quietly some within Boeing now don’t think TIA will come until 1Q2025. Emirates and Lufthansa Airlines, the first scheduled operators of the airplane, openly say they don’t expect deliveries until 2026.
The upshot: feedstock of the 777-300ERs for conversion companies is drying up.