The A350, Part 11: Can a standard A350-1000 fly the project Sunrise route?

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By Bjorn Fehrm

Introduction  

March 25, 2021, © Leeham News: When Qantas announced the Airbus A350-1000 as the winner for project Sunrise over Boeing’s 777-8 December 2019, we did articles about the choice. We found that the A350-1000 could fly the toughest route, Sydney to London but with modifications.

Airbus has since told the press they can now do it with an improved standard A350-1000. We revisit the case to see how “standard” such an A350-1000 is.

A350-1000. Source: QANTAS

Summary
  • The A350-1000 can fly the most challenging project Sunrise route, Sydney to London if it uses QANTAS special ultra long haul flight routings.
  • Airbus has gradually improved the A350-1000 so that it can now fly the route with modest adaptations.

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Did Airbus miss opportunities with Alaska, Southwest?

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By Scott Hamilton

Introduction

March 22, 2021, © Leeham News: Airbus lost an order from Alaska Airlines, which means the carrier will essentially revert to an all-Boeing fleet.

Alaska Airlines ordered more Boeing 737 MAXes instead of Airbus A321neos. Southwest Airlines appears ready to order the 737-7 MAX instead of Airbus A220-300s. Were these real opportunities? Photo by Boeing.

And despite the apparent high-profile loss of a potential order from Boeing loyalist Southwest Airlines, Airbus is holding its ground in the USA.

Did Airbus miss opportunities to gain ground?

It all depends on how you look at it.

Summary
  • Alaska Airlines chose to eliminate the Airbus A319s and A320s inherited with the 2016 acquisition of Virgin America. It’s not going to retain the orders for A320neos. And it passed on ordering more A321neos when it recently placed a follow-on order for Boeing 737-9s.
  • It looks all but sure Southwest Airlines will pass on ordering the Airbus A220-300 for its sub-150-seat fleet requirement. Boeing looks poised to win a big order from Southwest for the slow-selling 737-7 MAX.
  • Neither outcome, however, was unexpected.

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The A350, Part 10 Project Sunrise Intro

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By Vincent Valery

Introduction  

Mar. 18, 2021, © Leeham News: After assessing the performance of the A350-1000 against the 777-300ER on a trans-Pacific route, we turn our attention to a dedicated A350 variant developed for Qantas’ Project Sunrise.

Summary
  • The holy grail of ultra-long-haul routes;
  • A limited market;
  • A350-1000 “ULR” against 777-8;
  • Reasons for Qantas’ choice.

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China’s hollow airline “recovery”: capacity without revenue

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By Judson Rollins

Introduction 

March 15, 2021, © Leeham News: A flood of media coverage has centered on Chinese airlines’ supposed recovery from COVID-19.

The Chinese “big three,” Air China, China Eastern, and China Southern, made headlines with their rapid restoration of flights and even the announcement of new routes. Industry commentators and industry group IATA trumpeted the “recovery to pre-crisis levels” in China.

New routes garner headlines in normal times, but even more so now. And there is other good news: the US Transportation Security Administration last week processed the highest number of passengers since the pandemic all but shut down traffic a year ago.

But yield quality of such traffic in most markets is problematic. Cheap fares draw leisure travelers, yet business traffic remains a fraction of pre-pandemic levels and there are few signs of near-term recovery. Executives at Lufthansa Group, where business travelers deliver nearly 60% of revenue, said earlier this month they believe such travel will ultimately only return to 80-90% of pre-pandemic levels – and not until mid-decade.

If market analysts want to examine China’s recovery, they have to look at the whole picture. China may be leading the way in capacity restoration, but it’s not the “good” news touted.

The positive trends in China are in mainland domestic flights and seats, not passenger traffic or revenue — and not at all for regional (Hong Kong, Macau) or international routes. Scant attention has been paid to operational data from the country’s airlines – and even its national aviation regulator – showing passenger traffic even on domestic routes is still well below pre-COVID levels.

The “big three’s” third-quarter 2020 financial reports – when the domestic market was supposedly beginning to hit its stride – showed revenue losses far greater than the airlines’ pre-crisis share of revenue from international service. Even those disastrous results included a strong tailwind from increased cargo revenue, as the airlines don’t break out their revenue by business segment outside of annual reports.

LNA dug into the reports of China’s three state-owned airlines, privately held Hainan Airlines, low-cost carrier Spring Airlines, and monthly data releases from the Civil Aviation Administration of China (CAAC). Much of this data is only published in Mandarin, or in English only after long delays, so we enlisted translation help to build a more complete picture.

Summary
  • Capacity is (mostly) back, but passenger volumes haven’t followed.
  • Desperate sales promotions are widespread among Chinese carriers.
  • Third quarter 2020 financial reports show grave revenue losses.
  • Fourth quarter traffic isn’t materially better – and early 2021 is worse.
  • Continued excess capacity appears to be driven by politics, not demand.

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The A350, Part 9: The A350-1000 versus 777-300ER

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By Bjorn Fehrm

Introduction  

March 11, 2021, © Leeham News: Last week, we started analyzing the Airbus A350-1000 and compared it with the Boeing 777-300ER.

We now fly the airplanes on a demanding route, close to their maximum range, the LAX to Hong Kong sector. How much better is the 14 years younger A350-1000?

Summary
  • The A350-1000 is the logical replacement for a 777-300ER if a same capacity replacement is sought.
  • The carbon-fiber structure, a more advanced wing, and newer engines give the A350-1000 convincing arguments for the change.

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Suppliers remain hunkered down as pandemic recovery may stall

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By Scott Hamilton

Introduction

March 8, 2021, © Leeham News: Aerospace suppliers continue to struggle even as passenger airlines begin to gingerly place new aircraft orders and Boeing resumes production of the 737 MAX.

Airbus continues to produce the A320, A330 and A350 at lower production rates than the pre-pandemic era. Boeing is at low-rate production for the 737 MAX, after a 20-month grounding. The 777 is down to 2/mo and the 787 goes to 5/mo this month. At least two aerospace analysts on Wall Street think the 787 rate could come down further.

Airbus and Boeing each received a handful of orders so far this year.

But suppliers continue to struggle.

Summary
  • Airbus, Boeing continue to extend payments.
  • Smaller suppliers seek bankruptcies.
  • Larger suppliers remain in “hunker down” mode.

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The A350, Part 8 A350-1000 Intro

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By Vincent Valery

Introduction  

Mar. 4, 2021, © Leeham News: After assessing the performance of the A350-900 and its ULR variant, we now turn our attention to the largest A350 variant, the -1000. It entered service in 2018, a little more than three years after the -900.

Summary
  • Stretching the aircraft by different means than the 777-300ER;
  • A change of plan costs a significant order;
  • Moderate sales and limited prospects in a changing market;
  • An aircraft for trunk routes.

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Boeing’s Ability to Finance the Next Airliner

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By Vincent Valery

Introduction  

March 1, 2021, © Leeham News: The combination of the 737 MAX crisis and the COVID-19 pandemic led Boeing to lose $12.5bn over the 2019-2020 period. Boeing Commercial Aviation (BCA) lost $20.5bn during those two years, compared with a $7.8bn operating profit in 2018. Revenues at the division fell from $60.7bn in 2018 to $16.2bn in 2020.

The severe difficulties at BCA led Boeing to issue record amounts of debt. Net debt (subtracting cash and short-term investments) increased from $5.2bn to $38bn between the end of 2018 and 2020. Boeing issued another $9bn in debt in early February to refinance a portion of this debt.

As the commercial aviation ecosystem recovers from the COVID-19 pandemic, Boeing’s financial situation should improve. However, the OEM will have to deal with the sizable debt load accumulated during the twin 737 MAX and COVID-19 pandemic crisis.

LNA analyzes Boeing’s financial situation, including the OEM’s ability to finance a future aircraft program.

Summary
  • A strained balance sheet;
  • Two healthy products and a weak one;
  • Post COVID-19 recovery prospects for BCA;
  • Hard choices to finance a new aircraft program.

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The A350, Part 7: The A350-900ULR versus 777-200LR/A340-500

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By Bjorn Fehrm

Introduction  

February 25, 2021, © Leeham News: Last week, we started analyzing the long rangers of the Airbus A350, Boeing 777, and Airbus A340 families.

The A340-500 and the 777-200LR are a generation older than the A350-900ULR. We compare their performance on the world’s most challenging route, Singapore to New York, to find out how much Singapore Airlines gains by changing from the A340-500 to the A350-900ULR.

Summary
  • The A350-900ULR is unique among the Ultra Long Range aircraft by being a lightly changed variant of the standard A350-900.
  • By adopting the A350-1000 tank filling levels, the aircraft has enough fuel to fly up to 20 hours with a long-range payload.
  • Should the airline change its mind, the A350-900ULR can convert back to a standard A350-900.
  • With modern technology, it outclasses the economics of the 777-200LR and A340-500.

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Differentiation in the marketplace and the time for the open rotor

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By the Leeham News Team

Introduction

Feb. 22, 2021, © Leeham News: Airliners are now so efficient, one challenge facing Airbus and Boeing in competing is overcoming the laws of diminishing returns.

The time may finally have come for an Open Rotor airliner. Source: Safran.

LNA described this challenge Feb. 8. Additionally, airport infrastructure erects a vast number of design roadblocks.

We focused on the creation of the 737 replacement and how difficult it will be to make meaningful performance upgrades to the economics of the vehicle. We outlined the next battle in product differentiation most likely will occur in optimizing non-flying time operations, focusing on ground operations as the next efficiency battleground. Since then, it was reported that Boeing indicated that a new aircraft sized between the 737 and the 767/NMA was a front runner in their future planning.

Summary
  • NMA Lite needed for 737-9/10 to 787-8 sector.
  • Replacement for 737-7 and 737-8 best suited for Open Rotor design.
  • What an Open Rotor plane might look like

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