Leeham News and Analysis
There's more to real news than a news release.
How useful is an NMA?
By Bjorn Fehrm
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Introduction
October 11, 2018, © Leeham News.: The Boeing NMA is by now reasonably well defined. The passenger capacity is set at 225 seats for the smaller version and 265 seats for the larger. The nominal range is 5,000nm for the smaller version and 4,750nm for the larger NMA.
This is all nominal data. In practice, there will be different operational realities which will decrease these figures. How much and how useful will the final operational NMA be? What will be the economic advantage over the direct competition?
Artists impression of the Boeing NMA. Source: The Air Current.
To find out, we will pit the NMA against its direct competition in a series of articles.
Summary:
- The NMA as defined is configured according to Boeing’s STANDARD rule set. Using these rules, the smaller variant is classified as a 225 seat airliner with a range of 5,000nm. The larger as a 265 seat aircraft with a 4,500nm range.
- In practice, operational realities and cabins changes compared with the ones used in the STANDARD ruleset will decrease the seating capacity of the aircraft and its range. How much and why is discussed in this, the first article in the series.
Huge surge of A320 orders greatly exceed near-, mid-term A320 retirements
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Introduction
Oct. 4, 2018, © Leeham News: The huge surge of orders for the Airbus A320 family far outstrips the aging aircraft statistics, an analysis shows.
Airbus has a backlog of more than 6,000 A320 family members, with more than 1,700 sales potential just for retirements.
There is a backlog of more than 6,000 A320neo family members, with the near- and mid-term delivery schedule far exceeding A320 retirements. Photo credit: Airbus.
There are more than 4,300 A320s scheduled for delivery from 2019 through 2025.
There are just 765 A320s that hit 25 years old during the same period.
The surge in A320-family aging aircraft begins in 2030, just as the bulk of the current backlog ends, according to data bases maintained by Ascend and Airfinance Journal’s Fleet Tracker.
Summary
- Useful lives of A320s in passenger service historically have been 25 years. Till now, no P2F programs existed to extend the useful lives.
- But, some passenger airlines are returning A320s off lease in 12 years or less—accounting for some of the surge in orders vs aging aircraft.
- Supply-demand imbalance in the secondary markets could emerge.
How Boeing’s T-X and NMA are connected
By Bjorn Fehrm
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Introduction
October 1, 2018, © Leeham News.: Boeing and its partner SAAB Thursday won a $9.2bn U.S. Air Force T-X Pilot Training contract. It was a win for its Defense, Space & Security division, yet it will have major implications for Boeing’s Commercial Airplane (BCA) division and the NMA.
The NMA will change the way Boeing develops, produces and supports airliners. The T-X is the pilot for this change.
Loose concept of the Boeing NMA. Source: The Air Current.
Summary:
- The focus of Boeing for the NMA is faster and lower cost development, cheaper production and an extended support offering.
- The Military T-X program pilots the work practices needed to make this possible.
What costs dominate an airliner’s operation? Part 4
By Bjorn Fehrm
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Introduction
September 27, 2018, © Leeham News.: Over the last week’s we have looked at the costs for a typical Mainline and LCC airline operating in the US, Europe and Asian markets. The costs have been Direct Operating Costs (DOC) for the average routes operated by these airlines.
Now we finish the series with a look at the seat-mile costs so the Narrowbody and Widebody aircraft economics can be compared on routes both can serve.
Summary:
- When comparing seat-mile operating costs between Narrowbody and Widebody aircraft one must use the same cabin standards.
- Doing so will show the apples to apples operating costs of the two types when operating on sectors out to the maximum practical range of the Narrowbodies.
Assessing 737 production rate interest to 70/mo
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Introduction
Sept. 27, 2018, © Leeham News: Boeing hasn’t gone to a production rate of 57/mo for its 737 and studies have long been underway looking at a rate of not only
63/mo but also 70/mo, supply chain sources tell LNC.
Rate 57, up from 52, is scheduled for next July. Sixty-three has long been considered the maximum allowed for the current Renton (WA) factory, the sole location where commercial 737s are assembled.
But Boeing, in yet another step in its drive for more efficiencies, is analyzing how to push 70 airplanes a month through the same facility.
Summary
- MAX 8 remains the staple of the 737 family.
- MAX 10 helps family, stems bleeding, but A321 still outsells 737-9/10 by about 2:5:1.
- 9/10 MAX represent 17% of MAX backlog. A321neo is 34% of neo backlog.
- Boeing has more sales replacement potential than Airbus.
What costs dominate an airliner’s operation? Part 3
By Bjorn Fehrm
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Introduction
September 13, 2018, © Leeham News.: Last week we looking at the costs for a typical Mainline airline in our series about the airliner cost equation. We discussed the operating costs of Mainline airlines and how these would be affected by the operating area.
Now we calculated the different costs for a Low-Cost Carrier (LCC) operating either in the US, West Europe or Asia.
Summary:
- Fuel costs are the dominant costs for an LCC, regardless of geography.
- Airport fees and crew costs are other costs which differ between LCCs, Legacy carriers and Geographies.
Assessing A320 production rate interest in >70/mo
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Introduction
Sept. 17, 2018, © Leeham News: With the supply chain under major stress and Airbus and Boeing trying to recover from scores of “gliders” sidelined at airports without engines, each company nevertheless continues to study production rate increases for the A320 and 737 families.
Airbus publicly has said it’s looking at rate 70/mo. Boeing publicly acknowledges it’s looking at rate 63/mo.
Supply chain sources tell LNC Airbus is studying an even higher rate, into the “70s,” at early as 2020—a date that most consider out of the question.
Boeing is known to be considering a rate of 70/mo for its most profitable program.
Today, LNC looks at the A320 scenario. A future post will examine the 737.
Summary
- Airbus is scheduled to deliver more A320 members in 2019 than production capacity. Some of these may be parked backlog airplanes.
- 2020-2021 sold out at rate 60/mo, 2022-2023 nearly so.
- Rate increase to 70/mo opens opportunities for Airbus, pressure on Boeing.
What costs dominate an airliner’s operation? Part 2
By Bjorn Fehrm
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Introduction
September 13, 2018, © Leeham News.: Last week we began an article series looking at the cost equation for an airliner. We discussed the different costs and how these would be affected by airline type and operating area.
Now we calculated the different costs for a Legacy airline operating either in the US, West Europe or Asia.
Summary:
- The Narrowbody operated by a legacy carrier has high Aiport costs as it frequently take-offs and lands on major airports.
- For the Widebody operation, the fuel and capital costs are higher than Navigation and Airport fees. The differences in how the US, Europe and Asia handle en route navigation fees creates a large Navigation cost difference between the geographies.
With a month to elections, Embraer bolsters backlog
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Introduction
Sept. 10, 2018, © Leeham News: With the Brazilian elections less than a month away, the outcome of the presidential race will determine whether the proposed joint venture between Embraer and Boeing will be approved.
Embraer is Brazil’s most visible and prestigious international company. The government has a “golden share,” giving it veto power over certain transactions, including the Boeing deal. Boeing will own 80% of the new JV that will be for EMB’s commercial business only. Embraer will own 20%.
The incumbent government says it will approve the joint venture; the opposition party says it will veto the deal.
Summary
Including orders, options and LOIs:
- Production slots are oversold through 2023.
- The skyline quality has some challenges.
- Only three dozen firm orders were announced at Farnborough; the balance has to be firmed up.
What costs dominate an airliner’s operation?
By Bjorn Fehrm
Subscription Required
Introduction
September 6, 2018, © Leeham News.: Last month we put the question if rising fuel prices will revitalize new aircraft sales. We now continue the analysis of an airliner’s costs by looking at other parts of the cost equation.
Is fuel the dominant operational cost also in the future? What’s the difference in the different costs between a legacy carrier and an LCC? We use our aircraft cost model to gain more insights.
Summary:
- To compare costs for an airliner’s operation we must distinguish between carrier types and geographies
- While keeping the modelling relatively simple, it will be possible to single out the cost drivers beside fuel and understand their importance