Leeham News and Analysis
There's more to real news than a news release.
Forecast 2022: Embraer
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By Bjorn Fehrm
Introduction
January 10, 2022, © Leeham News: Embraer is the dominant regional jet aircraft supplier with a worldwide footprint and faces little competition to its products below 100 seats.
Between 100 to 150 seats, the situation is another after Bombardier “sold” its CSeries project to Airbus. Airbus’ might as aircraft OEM rekindled the CSeries as Airbus A220, and it’s now a vivid competitor to Embraer over 100 seats.
With a market it dominates and another where competition increases, we look at what’s in store for Embraer for 2022 as it hopes to exit the COVID pandemic for better times.
Embraer’s revised Turboprop. Source: Embraer.
Summary
- Embraer is a complete supplier with capable development, production, and worldwide support for its regional jets.
- Everything would be good had Bombardier, a player the size of Embraer, slugged it out with CSeries. The hand-over of the modern aircraft to Airbus changed the competitive landscape.
Estimating the A330neo replacement market
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By Vincent Valery
Introduction
Jan. 6, 2022, © Leeham News: Boeing 787 Dreamliner deliveries have been halted for 15 months, except for about a dozen early last year. There is still no clarity on when deliveries will resume, other than it may be in April.
When Boeing encountered severe Dreamliner delays in 2008, Airbus capitalized with a surge in A330ceo orders and deliveries. While long-haul traffic is far less buoyant than in the aftermath of the financial crisis, sustainability concerns mean that airlines will need to renew their twin-aisle fleets in future years.
Before the COVID-19 pandemic, the A330neo program faced slow sales. With a significant portion of its order book with airlines in precarious financial conditions, Airbus had to slow production on the A330 line to two per month last year.
To LNA’s surprise, Airbus announced plans to increase A330 production to three per month later this year. The recent A330neo orders by Condor and ITA Airways could give Airbus confidence it can gather more fleet replacement orders next year.
In light of the Dreamliner production problems, LNA assesses the size of the replacement market for the A330neo to capitalize on Boeing’s production problems.
Summary
- Estimating the addressable replacement market;
- Ruling out some potential customers;
- Highlighting possible but unlikely customers;
- A reduced list for plausible near-term orders;
- Program sales potential.
Forecast 2022: Airbus
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By Bjorn Fehrm
Introduction
January 3, 2022, © Leeham News: When the COVID-19 Pandemic started, it was tough to predict its impact on world air travel and how long the downturn would last.
The aircraft OEMs are at the top of a supplier pyramid of hundreds of companies and millions of parts. The prediction of airliner output at the end of this chain is critical for all, but most for suppliers. The suppliers have strained their liquidity to expand the production at the demand of the OEM.
A downturn in deliveries means less money, which forces sensitive suppliers into a liquidity crisis. Brake moderately, and the suppliers can handle it. Brake hard, and they can’t, or brake a bit and then harder, and it’s as bad.
Airbus managed the reductions well, and with an intact supplier chain, 2022 will be about how hard to step on the throttle as the Pandemic isn’t done yet.
Summary
- With a competitive product range and an intact supplier base, 2021 is about the correct level of increase in deliveries, with the Pandemic a bigger worry than the main competition.
- With Airbus’ in perhaps its relative strongest position ever, how much this shifts the market is more a supply issue than anything else.
Forecast 2022: Boeing hopes for the best on pandemic, 787, MAX
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By Scott Hamilton
Introduction
Dec. 20, 2021, © Leeham News: To say that last two years have been challenging for Boeing is an understatement.
But for the first time in a long time, officials appear optimistic that the worst is behind them. This is not to say that 2022 will be a cakewalk.
- Boeing is slowly clearing the inventory of 450 737 MAXes produced during the grounding. New airplane production rates are slowing ramping up.
- China’s recertification of the MAX appears around the corner.
- Deliveries of the 787 to restart in a few months.
- Widebody recovery still a challenge.
One A380 departure of two 777-200ER alternatively 787-9? Part 3.
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By Bjorn Fehrm
Introduction
December 16, 2021, © Leeham News: Last week, we discussed the economics for an airline that dispatches one A380 instead of two smaller widebodies on a trunk route with heavy traffic.
Our example modeled British Airways, which uses the A380 on its highest volume Heathrow departures. Now we finish the series by going deeper into the analysis, examining all cost and revenue aspects, including looking at slot values on congested airports.
Summary
- The ultimate decision to fly one departure or two per departure wave on slot-constrained airports is the value of using one slot or two to transport x passengers on an airport like London Heathrow.
- We develop the revenue and costs factors and discuss the airline’s intangible values around this dilemma.
2022 Outlook depends largely on pandemic, Boeing recovery
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By the Leeham News Team
Dec. 13, 2021, © Leeham News: Attempting a forecast for the new year historically has been reasonably easy. One just started with the stability of the current years, and maybe the previous one or two years, and looked forward to next year.
Until the Boeing 737 MAX grounding, COVID-19 pandemic, and the Boeing 787 suspension of deliveries.
These events upended everything. Boeing’s outlook for 2020 depended on what happened to return the MAX to service. The grounding, initially expected by many to be measured in months, ultimately was measured in years.
The 2020 outlook for the rest of the aircraft manufacturers blew up that March with the global pandemic.
Then, in October 2020, Boeing suspended deliveries of the 787, exacerbating its cash flow crunch.
Commercial aviation began to recover some in late 2020. Airbus, which reduced but didn’t suspend deliveries throughout 2020, saw signs of hope for the narrowbody market—less so for widebody airplanes.
There is a lot of uncertainty, however, that makes looking even one year ahead challenging.
One A380 departure or two 777-200ER alternatively 787-9? Part 2.
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By Bjorn Fehrm
Introduction
December 9, 2021, © Leeham News: Last week, we checked the economics for an airline that dispatches one A380 instead of two smaller widebodies on a trunk route with heavy traffic.
Our example was modeled after British Airways, which uses the A380 on its highest volume Heathrow departures. We modeled flights where we only considered the passenger payload and looked at operating costs. Now, we add cargo to the mix and look at the generated on the flights.
Summary
- The A380 was surprisingly competitive against the compared aircraft when we looked at passenger traffic.
- As expected, when cargo is added, the A380 competitiveness declines. It’s now a matter of what a slot more costs on the departure and destinations airports.
A short history of production system development
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By the Leeham News Team
Dec. 6, 2021, © Leeham News: Long ago, aircraft were simple, made of steel tubing, wood, and fabric. Engineering staffs were small, and the craftsmen building them had little need for specific production planning instructions because they were very simple. This was the work environment
Boeing Model 40 at the Museum of Flight, Seattle.
when CAM4B and CAM 18, the Civil Aeronautics Board Manual 4b and 18, described how aircraft were designed, certified, built, and maintained. Think of Ford Trimotors, Fokker F10, Boeing Model 40s and 80s, and Lockheed Vegas. It was the golden age of air transport.
One A380 departure or two 777-200ER alternatively 787-9?
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By Bjorn Fehrm
Introduction
December 2, 2021, © Leeham News: With the last Airbus A380 rolling of the production line in days, we started looking at why the A380 didn’t sell last week. Now we check its economics for an airline that can fill it. We fly one A380 versus two departures of smaller aircraft on a typical trunk route.
Our analysis takes British Airways as an example and whether it shall use an A380 on Heathrow to LAX at peak traffic or rather two departures with its Boeing 777-200ER or 787-9.
Summary
- When you can fill the A380, it’s surprisingly competitive even against a more modern aircraft like the 787-9.
- This is when we focus on passengers and cost.
- We change the analysis angle next week when we add cargo and look at margins rather than cost.
It’s time for a reality check on ecoAviation
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By Scott Hamilton
Introduction
Nov. 29, 2021, © Leeham News: The goals are admirable and lofty: cut carbon emissions dramatically.
Boeing wants to have its 7-Series airplanes be 100% compatible with Sustainable Aviation Fuel (SAF) by 2030. Whatever Boeing can do, so can Airbus.
Airbus wants to produce the first hydrogen-powered airliner, probably in the 70-seat sector, by 2035.
IATA, the International Air Transport Assn. industry trade group, set 2050 at the target for net-zero emissions.
All great ideas. Industry officials understand the challenges and realities. Tim Clark, president of Emirates Airline, minced no words at the IATA AGM in October: Don’t make promises you can’t keep.
For the pie-in-the-sky crowd, the sheer numbers don’t add up. Replacing the thousands of Airbus A320ceos, A330ceos, Boeing 737 NGs, 757s, 767s, 777 Classics, Mitsubishi CRJs, and Embraer E1 jets with their successors—let alone, the successors to the successors—will take decades.
And this doesn’t even count replacement of today’s turboprops with a successor that doesn’t exist, followed by their successors.
Summary
- 20-year Forecast to 2040 shows about 4,000 single-aisle, mainline jets will remain in service by 2040. The majority of these flying today are older generation aircraft.
- There will be about 1,000 twin-aisle jets flying today that will be flying in 2040. These can be expected to be Boeing 787s, Airbus A350s and a small number of A330neos. Each is more environmentally friendly than previous generations.
- There will be a handful of four-engine jets flying by 2040, most likely cargo aircraft.
- Of the sub-100 seat category, there will be fewer than 300 jets flying in 2040 that are flying today. Some of these will likely be end-of-line CRJs plus late-model, older generation E175-E1s. Deliveries of the latter continue well into this decade because the future of the Embraer E175-E2 is uncertain.