Leeham News and Analysis
There's more to real news than a news release.
Reducing one’s carbon footprint through flying choices
Subscription Required
By Vincent Valery
Introduction
Jan. 20, 2022, © Leeham News: Discussions about reducing commercial aviation’s carbon emissions have become more prominent over the last few years.
Many projects claim that electric(-hybrid) and hydrogen aircraft will be available in the not-too-distant future to make net-zero emissions flying a reality. Sustainable Aviation Fuels (SAFs) will also drastically reduce lifecycle carbon emissions with only minor changes to the current aircraft.
The IATA committed to a net-zero carbon emissions target by 2050. While all those long-term aspirations are well, significant challenges remain.
LNA has highlighted that the low energy density of batteries means that electric aircraft can at best work on small planes for short flights. Developing a medium-haul hydrogen-powered aircraft will require numerous innovations that suggest an entry into service before 2035 is not realistic. The challenges in increasing SAFs supply affordably to meaningful levels are monumental.
We have pointed out that all the above are far into the future. To meaningfully reduce emissions over the next decade, the introduction of more fuel-efficient gas turbines and turboprops is the only realistic and impactful lever.
Another lever has not been mentioned so far to reduce one’s carbon emissions. Other than not flying at all, how we fly from A to B can have significantly different carbon footprint levels.
This series will highlight the different levels of carbon emissions depending on how one flies on different routes.
Summary
- Setting the problem out;
- Challenges in defining unit emissions;
- Factors outside one’s control;
- Introducing a few examples.
2022 Forecast: C919 EIS unlikely before 2023-24
Subscription Required
By Scott Hamilton
Introduction
Jan. 17, 2022, © Leeham News: COMAC, the Chinese aerospace company developing the C919, suffered yet another setback last year.
It hoped to deliver the first aircraft, designed to compete with the Airbus A320 and Boeing 737-800/8, to China Eastern Airlines by year end. Not only didn’t this delivery take place, but the program is also only about 15% through the certification flight testing.
COMAC C919. Source: China Factor.
At this rate, certification, and delivery this year is questionable. LNA’s forecast for EIS is in 2023 or 2024.
COMAC’s other airplane, the regional jet ARJ21, landed its first order outside China (other than from lessor GECAS years ago).
Summary
- C919 is overweight, shortening range, and adversely affecting fuel economy.
- Commercial success of the C919 won’t be possible.
- ARJ21 lands first foreign operator, but it’s not an arm’s length deal.
Air freight growth: one-hit wonder or long-term trend?
Subscription Required
By Judson Rollins
Introduction
January 13, 2022, © Leeham News: COVID-19 has upended the freight world, with air delivery now becoming relatively economical versus the high premium they previously commanded over sea freight. While air freight yields on most trade lanes are 2-3x their pre-pandemic levels, sea freight yields are 8-10x their 2019 levels in lanes like Asia to North America and Asia to Europe.
Sea freight schedule reliability has fallen sharply over the past 18 months driven by a spectrum of port, labor, and container availability issues. Shippers are increasingly frustrated by the large and growing number of “blank sailings,” the industry’s term for canceled departures.
To offer customers backup options – and increase their value capture – ocean freight carriers are starting to buy their own aircraft. Maersk announced its purchase of two Boeing 777Fs in November, while CMA CGM Group said in December that it would order four Airbus A350Fs to complement its existing fleet of five Airbus A330Fs.
As the COVID crisis extends into its third year, will air freight demand prove sustainable at today’s levels? To what extent will capacity increase to match?
Summary
- Sea freight capacity will remain tight for the foreseeable future.
- New-build freighter availability is limited at present.
- Today’s air freight demand spike is unlikely to last beyond mid-decade.
Forecast 2022: Embraer
Subscription Required
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
Subscription Required
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
Subscription Required
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
Subscription Required
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.
Subscription Required
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
Subscription Required
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.
Subscription Required
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.