By Bjorn Fehrm
Subscription required
Introduction
April 14, 2016, ©. Leeham Co: Bombardier is working hard to get additional mainline airline customers for its C Series project. The latest discussion is whether Delta Air Lines would replace its fleet of Boeing MD-88s with the C Series.
In this context, it’s also discussed if the largest model, the CS300, Figure 1, is large enough for Delta. This aircraft seats 135 passengers in a two class configuration and up to 160 passengers in an all economy high density version.
The question is whether this is sufficient for Delta and other mainline customers, or if a still larger version is needed in the program, the oft-discussed CS500. We decided to use our proprietary aircraft model to see if a CS500 would be straight forward for Bombardier to develop, should Delta or any other customer ask for a three model C Series program.
Summary
Posted on April 14, 2016 by Bjorn Fehrm
Airbus, Boeing, Bombardier, Comac, CSeries, Delta Air Lines, E-Jet, Embraer, Irkut, Pratt & Whitney, Premium
737, 737 MAX, A320, A320NEO, Airbus, Boeing, Bombardier, C919, Comac, CSeries, E-Jet E2, Embraer, MC-21, Pratt & Whitney
Subscription Required
Introduction
April 11, 2016, © Leeham Co.: Boeing has $29bn in deferred production costs and another $3bn in deferred tooling costs for its 787. The accounting block, for its program accounting, is a record 1,300 aircraft. Many Wall Street analysts are skeptical whether Boeing will ever recover the huge deferred numbers.
Boeing insists it will.
Still, taking a charge of some number—as it has done twice for the 747-8 and twice for the 767-based KC-46A—is something Boeing repeatedly insists it doesn’t need to do.
Why not?
There are a few key reasons, say Wall Street analysts who follow Boeing: revenue, cash flow and the stock price.
Summary
Posted on April 11, 2016 by Scott Hamilton
air force tanker, Airbus, Boeing, Bombardier, CSeries, Pacific Northwest Aerospace Alliance, Premium
747-8, 787, A330ceo, A330neo, A350-900, Airbus, Bank of America Merrill Lynch, Boeing, Credit Suisse, Dennis Muilenburg, Jim McNerney, KC-46A, Pacific Northwest Aerospace Alliance, Ray Conner, Richard Aboulafia, Rob Spingarn, Ron Epstein, Teal Group, The Seattle Times
Subscription Required
Introduction
April 4, 2016, © Leeham Co.: Boeing should forget about competing with Airbus for market share.
Airbus already has won the neo/MAX battle. This is a battleground Boeing will not retake for the lives of these airplanes.
Airbus has led Boeing in wide-body, passenger airplane sales for most of the past several years. (Boeing smashes Airbus in wide-body cargo aircraft sales.) This sector will remain competitive.
Instead, Boeing should concentrate on profit margin and roll the dice on a clean-sheet, new single-aisle airplane as its best hope of recovering the dominance it long held over Airbus.
Summary
Posted on April 4, 2016 by Scott Hamilton
By Bjorn Fehrm
Subscription required.
Introduction
31 March, 2016, ©. Leeham Co: Boeing will present its first quarter 2016 results in about three weeks. One area which will be carefully scrutinized by the aerospace analysts will be the progress of the 787 program towards making money instead of consuming it.
Boeing gives the detailed information about the health of the 787 program in the comments by Boeing’s CFO, Greg Smith during the quarterly conference call. In the last call, he puzzled the analysts (and us) by saying that the 787 program was cash positive in 4Q2015 yet the program increased its deferred production and tooling costs by $191m. This means it still pushed about $5m per aircraft into the balance sheet as production loss.
At the time we assumed that the 787-9 was cash positive whereas the 787-8 was negative. This was most probably correct but not the whole picture. With some further poking around we think we are the elusive loss making cash positive on its tracks.
It has to do with the peculiarities of program accounting.
Summary:
Posted on March 31, 2016 by Bjorn Fehrm
Subscription Required
Introduction
March 28, 2016, © Leeham Co.: A downturn in the order cycle, low fuel prices and backlogs extending to 2020 and beyond combine to reduce the likelihood of much in the way of wide-body orders this year, say commercial aviation officials.
A preference for smaller twin-aisle jets could also hurt sales of larger twin-aisle airplanes, according to observers.
These factors spell challenges for Airbus and Boeing for the A350-1000, the 777-300ER and the 777X.
Summary
Posted on March 28, 2016 by Scott Hamilton
By Bjorn Fehrm
Subscription required.
Introduction
March. 21, 2016, ©. Leeham Co: There is quite a lot of talk about what a new aircraft program like Boeing’s Middle of the Market (MOM) would cost the airframe OEM to develop. Typical quotes are “it would cost them at least $10bn.” When saying this, the person implies this is the program’s load on the company’s liquidity for that aircraft program.
This is not correct and we will now go through why. It might be true that the development of the aircraft cost $10bn. But the trouble is, this is not the only cost that will hit the OEM for this aircraft program.
Cost that one normally does not think about when talking about new aircraft programs can double the cash burden on the OEM. Here’s why.
Summary:
Posted on March 21, 2016 by Bjorn Fehrm
By Bjorn Fehrm
Subscription required.
Introduction
March. 14, 2016, ©. Leeham Co: In three articles we have been looking at the new Russian single aisle aircraft, Irkut MC-21, from United Aircraft and the new Russian engine that is being developed for the aircraft, the PD-14.
The PD-14, which is offered as an alternative to the base engine for the aircraft, the Pratt & Whtiney PW1400G, was analysed in our Part 3 article. We now mount the engine on the MC-21 and explore the difference in performance compared to the base engine.
Summary:
Posted on March 14, 2016 by Bjorn Fehrm
Subscription required
Introduction
March 10, 2016, © Leeham Co.: MOMentum for the Middle of the Market aircraft seems to be slowing from last year, as potential buyers and Boeing struggle to define an aircraft that would be affordable to build, affordable to buy and fulfill different mission requirements for capacity or range.
Meantime, Airbus is content to watch Boeing’s predicament, secure in what it believes is the winning strategy.
Summary
Posted on March 10, 2016 by Scott Hamilton
Airbus, Airlines, American Airlines, Boeing, Delta Air Lines, ISTAT, MOM, Pratt & Whitney, Premium, United Aircraft
737-10, 737-8, 737-9, 737-900ER, 757, 787-3, A320NEO, A321ceo, A321LR, A321NEO, A330-200, A330-300, A330-800, A330-900, Air Lease Corp., Airbus, American Airlines, Boeing, CIT Aerospace, Delta Air Lines, Jeff Knittel, John Leahy, John Plueger, Middle of the Market, MOM, Steve Mason, Tony Diaz, United Airlines
By Bjorn Fehrm
Subscription required.
Introduction
March 7, 2016, ©. Leeham Co: Airbus signed an MOU with Philippine Airlines for six A350-900 with options for six more at Singapore Air Show. The deal is significant because the airline’s President & COO, Jaime J. Bautista, said that the aircraft’s range played an important role in the selection process.
The A350-900 was not designed as an especially long range aircraft, not more so than its main alternative, the Boeing 787-9. Yet in two recent selections, for Singapore Airlines and now Philippine Airlines, the range of the A350-900 has won the deal for Airbus. We explain why.
Summary:
Posted on March 7, 2016 by Bjorn Fehrm
Airbus needs more vertical integration, says official
Subscription Required
Introduction
John Leahy, chief operating officer-customers. Airbus photo.
March 3, 2016, © Leeham Co.: Airbus may well have avoided the supplier-driven delivery delays on its A350s had the company brought some key work in-house and become more vertically integrated, says its chief operating officer-customers.
Airbus has been bedeviled by delays in business class seat and galley deliveries from supplier Zodiac, resulting in delayed deliveries of the A350-900 to several airlines.
John Leahy, in an interview with LNC at the International Society for Aircraft Transport Trading (ISTAT) conference Feb. 29-March 1 in Phoenix (AZ), said Airbus shouldn’t be at the mercy of suppliers of interiors. His wide-ranging interview also touched on several other topics.
Summary
Read more
3 Comments
Posted on March 3, 2016 by Scott Hamilton
Airbus, Boeing, Bombardier, CFM, CSeries, ISTAT, Leeham News and Comment, Pratt & Whitney, Premium
737-7, 737-700, 787, A319, A320NEO, A330-900, A350, Airbus, Boeing, CFM, GTF, ISTAT, John Leahy, LEAP, Pratt & Whitney, Zodiac