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Introduction
May 5, 2015: c. Leeham Co. The order for 10 Boeing 777-300ERs last month by United Airlines was a welcome addition to the backlog for the Classic line, but it remains a struggle for Boeing to obtain enough orders, or convert options and LOIs, to bridge the production gap to the entry-into-service for the 777-9, currently planned for 1H2020.
Boeing would like to advance the EIS to late 2019, but this may be challenging.
Boeing currently has a backlog of 271 Classic 777s (including the UA order). Through the end of 2019, Boeing needs to deliver 466 Classics if it is to maintain the current production rate of 100 per year. Boeing is sold out this year, largely sold out next year, half sold out in 2017 and some delivery slots are taken up in 2018, according to CEO Jim McNerney.
But the need for more Classic sales doesn’t end on 12/31/19 because of the normal production cut-over and ramp-up of a new airplane type.
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Introduction
April 28, 2015, c. Leeham Co. Goldman Sachs over the weekend issued a research note, Is the new aircraft supply/demand equation nearing a tipping point?
GS cited the recent United and American airlines actions involving the Boeing 787 and Boeing 777 and other fleet activity or inactivity at Lufthansa Airlines and Virgin Atlantic as harbingers for its thesis.
Goldman has a Sell rating on Boeing stock, based on its belief the demand is leveling off and announced production rate increases by Airbus and Boeing will lead to oversupply.
Summary
By Bjorn Fehrm
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26 April 2015, C. Leeham Co: With Emirates Airlines deciding for Rolls-Royce Trent 900 engines for its 50 new A380s and admitting that it would accept that this could be for all of them if Airbus does not proceed with an A380neo, the time has come to look at how much incremental improvements can be brought on the present A380.
Our proprietary aircraft model is particularly suited for such studies as we can change any parameter and read the result off the efficiency scale. We can also play with the aircraft’s configuration and see what effect it will have. Based on Emirates’ new configuration of A380s equipped with the Trent 900 engine, we have checked what incremental improvements are doable and what would they bring.
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April 22, 2015: c. Leeham Co. Boeing may have reported solid earnings for the first quarter, but aerospace analysts focused on free cash flow (FCF) and gave the company a raspberry.
Analysts have been increasingly pinpointing and asking questions about FCF since the third quarter call, when Boeing stock got pummeled over the issue. Boeing surprised Wall Street with the fourth quarter numbers in which FCF was sharply higher and greater than expected.
Last week, we reported UBS’ analysis of FCF and how it was driven up by more advanced (pre-delivery payments, or PDPs) than usual.
On the 1Q earnings call, Ron Epstein, the aerospace analyst doe Bank of America Merrill Lynch, honed in on the issue.
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April 19, 2015, c. Leeham Co. The withdrawal by the International Association of Machinists of the planned April 22 unionization vote at the Boeing 787 plant in Charleston (SC) appears to answer a question that was lingering ever since the January 2014 IAM 751 vote at Boeing’s Puget Sound operations:
Was there a quid-pro-quo between IAM International headquarters and Boeing for Boeing to stand by and allow unionization of BSC is exchange for the International to “sell out” for a Boeing contract package at Puget Sound?
It seems the answer is “no.”
The vote withdrawal also seems to answer another question: Has the IAM become increasingly impotent?
The answer to this seems to be “yes.”
Summary
By Bjorn Fehrm
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Introduction
12 April, 2015: In our study of the options for Boeing’s market study called Middle of the Market (MOM), we could conclude that the most likely aircraft to cover their 200-250 seat 4750nm range requirement would be a seven abreast twin aisle aircraft using their patented new oval construction, thereby saving weight and drag.
After finishing the series, Readers requested that we conclude the work by showing what market segment a family of such airliners would cover and how they would relate to the Boeing 787-8. As it is pretty straight forward to see with our aircraft performance model how much of a range of aircraft variants one can make from one base development of aircraft and engine, we decided to fulfill the wish from our Readers.
We have therefore looked at how far the concept MOM airliner could be stretched and what segment in the market would be covered by it. We also studied how much such a family would encroach on Boeing’s 787 Dreamliner market.
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April 2, 2015, c. Leeham Co.: Even as Pratt & Whitney prepares for the entry-into-service of its new
Alan Epstein, vice president of technology and environment, Pratt & Whitney
Geared Turbo Fan engine on the Airbus A320neo, it’s looking ahead to the most likely all new airplane that could be launched as early as 2018 with an EIS in 2025: the Middle of the Market (MOM) airplane, also most popularly known the as Boeing 757 replacement.
Except that this new airplane really isn’t a 757 replacement, but one that is more accurately a replacement for the Boeing 767-200 or the Airbus A300: a twin aisle, 250 passenger airplane with 4,000nm-5,000nm range.
Alan Epstein, vice president of technology and environment for Pratt & Whitney, believe a derivative of the GTF will be on this new airplane.
Summary