Leeham News and Analysis
There's more to real news than a news release.
2019 Outlook: COMAC’s slow but steady progress
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Introduction
Jan. 4, 2019, © Leeham News: This is not the year where China’s COMAC will have break-out progress for the C919, its challenge to the Airbus A320 and Boeing 737.
Flight testing is slow and entry into service (EIS) is now targeted for 2021—a slip of five years from the original schedule.
The C919 launch-to-EIS is approaching the eight years record of the ARJ21.
But these delays don’t mean COMAC isn’t making progress.
Summary
- Boeing’s JV with COMAC for a 737 completion center opened last month.
- Despite delays, the C919 progresses.
- Progress continues on the JV with Russia for the CR929.
2019 Outlook: Irkut leads Russia’s airliner industry
By Bjorn Fehrm
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Introduction
January 3, 2019, © Leeham News.: The last year was a quiet year for the airliner side of Irkut Corporation (Irkut). It continued testing its two MC-21 single-aisle airliners and rolled out the third test aircraft.
Behind the scenes, there were larger changes. Irkut was handed the shares of Sukhoi Civil Aircraft Company (SCAC), the designer and producer of the Superjet 100. The move is part of merging the Russian airliner industry into one company.
During 2018, United Aircraft Corporation (UAC), the parent of Irkut and SCAC, started the consolidation by moving all new airliner projects to Irkut, including the CR929 widebody project with China. The consolidation will continue 2019.
Summary:
- Consolidating the disparate airliner projects within UAC makes sense. The competition is International, not Irkut versus Sukhoi, Tupolev or Ilyushin.
- Will this improve the checkered fortunes of Russian airliner business? It’s the right move to get away from 70 years of Soviet isolation and rules of business. But it’s not the last change; more is needed.
- The coming year will be crucial for the SSJ100 to find its model for how to support Western airlines. Interjet went half OK but CityJet didn’t. Will Adria be better?
- It’s also an important flight test year for MC-21, which needs to pick up speed to certificate in 2020.
- The CR929 widebody is now an Irkut project. Will the change improve the chance of keeping the time plan?
2019 Outlook: A pivotal year for Embraer
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Introduction
Embraer E190 2.
Dec. 28, 2018, © Leeham News: If it cannot be said that 2019 will be a pivotal year for Boeing, this is not the case from Embraer.
It will indeed be a pivotal year.
Embraer Commercial Aviation is to become part of a new joint venture with Boeing.
This leaves some of Embraer’s military and all of its business aviation business remaining.
EMB’s KC-390 program will move to a second joint venture in which EMB owns 51% and Boeing owns 49%.
Summary
- Year-to-date Embraer sales, financials were below expectations.
- E175-E2 has no firm orders and the conditional sale has been removed from the backlog due to international accounting standards.
- Customer service follows Embraer Commercial Aviation.
2019 Outlook: Will Bombardier exit Commercial aircraft?
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Introduction
December 27, 2018, © Leeham News.: In July the CSeries changed from Bombardier to Airbus and in November the Q400 program was sold to Viking Air, the buyer of de Havilland Canada aircraft from Bombardier like the Twin Otter and the water bomber CL415.
When the Viking Air deal closes in the second half of 2019, only the CRJ regional jet will make up Bombardier Commercial Aircraft. Will the CRJ stay with Bombardier or go? And if so, why?
Summary:
- With other divisions increasing revenues amid healthy margins, the loss-making Commercial Aircraft’s time was up. It’s future hope, the CSeries, was digging an ever deeper cost hole with each delay. Only a market success could save it.
- The Boeing trade complaint in April 2017 made a success far-fetched, sealing the fate not only for the CSeries but for the Commercial Aircraft division.
- With the CSeries at Airbus and Q400 at Viking Air, why keep the CRJ? It makes no sense. The CRJ is presently dressed for sale. Now it’s more a question to whom and when.
2019 Outlook: Boeing’s decision on NMA is the headline to watch
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Introduction
Dec. 21, 2018, © Leeham News: It is a stretch to say 2019 is a pivotal year for Boeing.
There would have to be events of tsunami proportions to be pivotal for a company with revenues of more than $90bn.
But there is no doubt 2019 will be a very important year for Boeing.
Summary
- The headline to watch will be the widely anticipated launch of the New Midmarket Aircraft, also called the 797.
- The 777X begins flight testing next year. Sales are stalled for the newest airplane of the Boeing family.
- The proposed new joint venture between Boeing and Embraer is expected to be consummated by the end of the year.
2019 Outlook: leaving Airbus’ troubled year behind
By Bjorn Fehrm
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Introduction
December 19, 2018, © Leeham News.: Next year is a time when Airbus hopes to leave its troubled 2018 behind.
But 2018 was also when the company wanted to leave the troubles of 2017 behind it.
Not only did 2018 not improve. In a number of ways it turned worse.
Engineless A320neos at Toulouse Airport. Airbus hopes this is a thing of the past. Photo via Google images.
Turmoil in the management ranks brought back memories of the politically infested Airbus of 20 years ago. And there were other issues.
Production problems with the A320 continued. The A330neo was further delayed and the A380 order from Emirates to save the program took forever to materialize. The negotiations to fix the contracts for A400M couldn’t be brought to a close.
There were two bright lights in the year. The A350 was now out of its cabin supplier problems and delivering aircraft to plan. The other was the gift from Boeing’s suing Bombardier and its CSeries the year before. The top modern Bombardier CS100/300 became Airbus A220 on the first of July. Price tag; $1 for 50.01% of the program.
Summary
- Changes in executives are almost over.
- Pratt & Whitney’s engine delivery delays are caught up and CFM’s delays are diminishing.
- Production ramp ups are peaking (for now) and deliveries should be at a record rate next year.
- Airbus is waiting for Boeing to decide whether to launch the New Midmarket Aircraft.
Lion Air threatens to cancel MAX order; no impact to Boeing seen
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Introduction
Dec. 17, 2018, © Leeham News: Lion Air’s co-founder is threatening to cancel an order for more than 200 Boeing 737 MAXes following what he says is Boeing’s 
blaming the airline for the Oct. 29 crash of Flight 610.
All 189 people aboard the three month old 737-8 died when the plane plunged into the Java Sea 11 minutes after take-off from Jakarta.
Calling a Boeing statement issued Nov. 27 a “betrayal,” co-founder Rusdi Kirana Dec. 3 threatened to cancel to big Boeing order. He amplified his remarks Dec. 11.
Summary
- Lion Air has 229 MAXes scheduled for delivery between 2019-2026.
- The carrier has 148 A320neos scheduled for delivery, believed intended for its leasing company.
- Deliveries mostly overlap.
- Another source of A320neos is apparently available.
- Analysis of impact to Boeing
Has the A380 worse economics than the 777-9 or A350-1000?
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Introduction
December 13, 2018, © Leeham News.: Last week we checked if the claims in media the Airbus A380 is more expensive to operate than a Boeing 777-300ER has merit. As so often, media compared apples with oranges.
Comparing like-for-like, the A380 does just fine if you configure it with equal comfort cabins. And if you can fill it. Now we compare the A380 economics to more modern alternatives, Airbus’ A350-1000 and Boeing’s 777-9.
Summary:
- Configured to equal comfort standards the A380 is surprisingly competitive on seat mile costs to the A350-1000 and 777-9.
- We then lowered the A380 seat count from Airbus’ latest proposals, to find the cross-over point. It’s pretty close to Emirates two-class A380s.
Tanker wars may be back
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Introduction
Dec. 10, 2018, © Leeham News: The tanker wars may be back.
Airbus has teamed with Lockheed Martin to offer the Airbus A330-200MRTT to the Pentagon in a for-hire business model. The agreement also provides the prospect of “conceptualizing the tanker of the future.” (The press release is here.)
From 2001-2011, the US Air Force, Pentagon and even Congress were embroiled in controversy over recapitalization of the USAF aerial refueling tanker fleet.
The KC-135s, based on the Boeing 707, were aging, expensive to maintain and outdated.
After 9/11, Boeing proposed leasing 100 tankers based on the 767-200ER to the USAF. A scandal surrounding the USAF approval of this deal sent the air force’s procurement office and Boeing’s CFO to jail and resulted in the resignation of CEO Phil Condit. The lease deal was canceled.
Summary
- Three rounds of tanker procurement were filled with improprieties, bitter charges and counter charges.
- Boeing currently has a contract for 52 KC-46A tankers out of an initial procurement of 179.
- The air force sees a need for 100 more tankers on an accelerated timeline.
- Fee-based refueling is not unknown to the Pentagon.
Is the A380 less economical than a 777-300ER?
By Bjorn Fehrm
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Introduction
December 06, 2018, © Leeham News.: Our Monday article “A380 suffers new blow, future remains bleak” describes how Air France hands back five of their 10 Airbus A380-800 to their lessor with start next year.
The article details the reasons behind the returns. Other media writes the A380 are notably more expensive to run than a Boeing 777-300ER. As so often, this is a serious case of apples and oranges.
Summary:
- To compare aircraft like-for-like, they need to be compared with the same rules for cabins and operations.
- When this is done, the A380 is not more expensive to operate than a 777-300ER.
- The caveat is: if filled to the same load factor.