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Introduction
Feb. 11, 2016, © Leeham Co. The news yesterday that Boeing is undertaking a new round
of cost-cutting has been buzzing around management and labor circles for months.
LNC last year began hearing management at Boeing Commercial Airplanes would likely face personnel cuts of 10% to 15%. Cuts were expected within the marketing/sales departments, in part due to struggling sales of the 7-Series airplanes, sources told LNC.
The leading labor unions, SPEEA (engineers) and IAM 751 (touch labor), each told LNC last year they expected workforce layoffs were in the future.
More ominously, a consultant who occasionally worked with Boeing, told LNC that the elevation of Dennis Muilenburg from president and chief operating office to president and CEO (and, eventually, chairman) would make former CEO Jim McNerney’s cost- cutting efforts pale by comparison.
Summary
- Major layoffs predicted at Boeing’s Share Services Group.
- Work continues to be shifted out of Washington State.
- Large number of retirements at IAM and SPEEA expected by year end.
- Airbus pricing pressure, 787 deferred production costs, commitments to shareholders and 777X squeeze cash flow.
- “Mac the knife.”
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Airbus needs more vertical integration, says official
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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.
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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
IRKUT MC-21 analysis, Part 3. The Russian engine alternative
By Bjorn Fehrm
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Introduction
Feb. 29, 2016, ©. Leeham Co: In two articles we have been looking at the new Russian single-aisle aircraft, Irkut MC-21from United Aircraft. Now it’s time to analyze the new Russian engine, PD-14, which is offered as an alternative to the base engine for the aircraft, the Pratt & Whitney PW1400G.
Summary:
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Posted on February 29, 2016 by Bjorn Fehrm
Irkut, Pratt & Whitney, Premium, United Aircraft, United Engine Corp., YAK
MC-21, PD-14, Pratt & Whitney, PW1100G, PW1400G
IRKUT MC-21 analysis, Part 2
By Bjorn Fehrm
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Introduction
Feb. 24, 2016, ©. Leeham Co: Two weeks ago we started our analysis of the new Russian single aisle aircraft, United Aircraft’s Irkut MC-21. We looked at key design features and compared these to the Airbus A320.
We also analyzed the passenger capacity where we found that the model which will start flight testing, the MC-21-300, has a capacity between the A320 and the A321. The closest aircraft in capacity and performance in the MC-21 lineup versus the competition would be the MC-21-200 and A320neo.
We have therefore decided to do our efficiency analysis between these variants.
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Posted on February 24, 2016 by Bjorn Fehrm
Airbus, Premium, United Aircraft, YAK
A320, Irkut, MC-21, United Aircraft
Welcome news for Bombardier, Mitsubishi
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Introduction
And the LOI from the US lessor, Aerolease, for 10+10 MRJ90s was welcome news for Mitsubishi.
We take a look at both announcements and what this means for the two programs.
Summary
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Posted on February 22, 2016 by Scott Hamilton
Airbus, Boeing, Bombardier, Embraer, Mitsubishi, Premium
Aerolease, Airbus, Alain Bellemare, Boeing, Bombardier, C Series, Mitsubishi, MRJ90
Rolls-Royce, short and long term outlook
By Bjorn Fehrm
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Introduction
Feb. 18, 2016, ©. Leeham Co: Rolls-Royce reported earnings for the full year results for 2015 Friday. The share price took a hike after more than one and a half years of being pressed down by bad news.
There was nothing really new that was presented last Friday, with revenue of £13.4bn and profits before tax of £1.4bn. Both results were within the market’s expectations. It was rather the lack of more bad news that made the stock soar to a new high.
We now go behind the scenes to analyze why the stock is depressed and if this is a long term state for Rolls-Royce.
Summary:
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Posted on February 18, 2016 by Bjorn Fehrm
Airbus, Airlines, Boeing, Bombardier, Emirates Airlines, Engine Alliance, GE Aviation, International Aero Engines, Pratt & Whitney, Premium, Rolls-Royce
787, A330, A330neo, A350, A380, Airbus, Boeing, Bombardier, CSeries, Emirates Airlines, Pratt & Whitney, Rolls-Royce
Bombardier earnings preview
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Introduction
Feb. 16, 2016, © Leeham Co.: Bombardier’s fourth quarter and full year 2015 financial results will be reported
Wednesday, and we don’t expect the situation to be pretty.
Yes, officials will highlight the recent closing of the sale of 30% of the Transportation (Rail) subsidiary.
Yes, the C Series is now on a world tour and appearing at the Singapore Air Show this week.
Yes, the CS100 will enter service in the second quarter.
Yes, the CS300 should be certified, delivered and enter service before the end of this year.
But missing will be any concrete information about new orders.
Summary
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Posted on February 15, 2016 by Scott Hamilton
Airbus, ATR, Boeing, Bombardier, Embraer, Premium
737, A319, Airbus, ATR, Boeing, Bombardier, C Series, Embraer, Q400, Singapore Air Show
Dissecting Boeing cost-cutting
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Introduction
Feb. 11, 2016, © Leeham Co. The news yesterday that Boeing is undertaking a new round
of cost-cutting has been buzzing around management and labor circles for months.
LNC last year began hearing management at Boeing Commercial Airplanes would likely face personnel cuts of 10% to 15%. Cuts were expected within the marketing/sales departments, in part due to struggling sales of the 7-Series airplanes, sources told LNC.
The leading labor unions, SPEEA (engineers) and IAM 751 (touch labor), each told LNC last year they expected workforce layoffs were in the future.
More ominously, a consultant who occasionally worked with Boeing, told LNC that the elevation of Dennis Muilenburg from president and chief operating office to president and CEO (and, eventually, chairman) would make former CEO Jim McNerney’s cost- cutting efforts pale by comparison.
Summary
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Posted on February 11, 2016 by Scott Hamilton
Airbus, Boeing, IAM 751, Leeham News and Comment, Premium, SPEEA
737-10, 757, 777X, A330, Airbus, Boeing, Dennis Muilenburg, IAM 751, Jim McNerney, KC-46A, Ray Conner. 787, SPEEA, Wall Street Journal
Can the 787 pay its debts?
By Bjorn Fehrm
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Introduction
04 February, 2015, © Leeham Co: Boeing has presented its results for the last quarter of 2015. It was a quarter for Boeing with solid performance in revenue ($96.1bn) and in cash generation ($9.4bn).
Despite that, Wall Street was not pleased. The 747-8 program is not selling well and the upcoming production bridges for 737NG to 737 MAX and 777 to 777X are no longer to be ignored.
The results presentation is also our chance to check our analysis around the 787 program; will it be able to pay its debts within the forecasted period by Boeing (in the program accounting block of 1,300 units)?
Summary:
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Posted on February 4, 2016 by Bjorn Fehrm
Boeing, Premium
787, 787-8, 787-9, Boeing
A380 order welcome, but may not add to Airbus backlog
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Introduction
The news of orders by Iran Air and ANA for 12 and three A380s respectively is good news for Airbus, but
these probably don’t do much to boost the backlog in practical terms.
These orders will likely replace some of those in the A380 backlog that are unlikely to be delivered.
In our annual examination of the backlogs of Airbus and Boeing, little has changed for the A380—until the Iran Air and ANA orders, there hasn’t been a sale of the A380 in more than two years.
Summary
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Posted on February 1, 2016 by Scott Hamilton
Airbus, Boeing, Premium
747-8F, 747-8I, A350-1000, A380, Air Austral, Airbus, ANA, Boeing, Hong Kong Airlines, Iran Air, Skymark Airlines, Virgin Atlantic
Worry over Boeing 737 production rate ramp up overblown
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Introduction
Jan. 27, 2016, © Leeham Co. As Airbus prepares to hike production rates of the A320 family to 60/mo by the end of the decade and Boeing mulls whether to boost 737
rates above the announced 57/mo announced today, some question whether the companies should do so.
The questions become more frequent as falling fuel prices make the need for the fuel efficient A320neo and 737 MAX appear to be less compelling. The economic turmoil in China adds to uncertainties.
Today we take a look at the 737 order book, based on Dec. 31 data, and extrapolate this to announced and potential future production rate hikes, and draw conclusions whether the rates announced and those under study make sense.
We will look at the A320 backlog in a future post.
Summary
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Posted on January 27, 2016 by Scott Hamilton
Airbus, Boeing, Premium
737 MAX, 737NG, A320, A320ceo, A320NEO, Airbus, Boeing
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