Leeham News and Analysis
There's more to real news than a news release.
Long-haul cost differences
By Bjorn Fehrm
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Introduction
March 2, 2017, © Leeham Co.: The single-aisle, long-haul operations are on the increase. The new re-engined Airbus A320neo and Boeing 737 MAX generations are good for destinations of up to 3,000 nm, after taking into account reserves, winds and alternates planning. The Airbus A321LR is good for up to 3,500nm sectors.
Last week, we showed the Bombardier CS300 is joining the crop of single-aisles capable of 3,000nm city pairs, the distance between London and New York.
We also wrote the cost level of the single-aisle aircraft is competitive with the next step up dual-aisle, the Boeing 787 and Airbus A330neo.
But how do the different cost areas pan out? Is fuel cheaper or more expensive for the dual-aisle? What about the single-aisle crew costs? For clarity, we engage our cost model.
Summary
- The total costs are similar per seat mile for single and dual aisle, but the parts are not.
- The fuel costs per seat are surprisingly similar; the differences are to find in other places.
CSeries trans-Atlantic capability
By Bjorn Fehrm
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Introduction
February 23, 2017, © Leeham Co.: We previously described how new generation engines make the Boeing 737 MAX 8 a trans-Atlantic aircraft. The MAX 8 is smaller than the Airbus A321LR, but not the smallest single-aisle with trans-Atlantic capability. This distinction goes to the Bombardier CSeries.
We wrote about the CS100 capability to cross the Atlantic from London City Airport last year. After the article, we received new and improved data from Bombardier. The CS100 can now fly directly to US East Coast on the difficult westward leg with a business cabin of 42 seats. The updated article is here.
When we look at the improved capabilities of the CS300 (announced at Farnborough Air show last summer), this aircraft can also cross the Atlantic with a full cabin of 130 passengers.
Bombardier arranged so we could discuss this deeper with the VP CSeries program, Rob Dewar.
Summary:
- We use our aircraft performance model to compare the CS300’s suitability for long-haul to the Airbus and Boeing competition.
- The aircraft have similar range and seat mile costs. The smaller aircraft have lower trip costs.
- With Rob Dewar, we explored the potential for additional capability for the CS300.
Assessing the SSJ100 future
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Introduction
Feb. 20, 2017, © Leeham Co.: Sukhoi is Russia’s attempt at reentering the commercial airliner business. The SSJ100 regional jet is, by most accounts, an attractive
SSJ100 in CityJet colors. CityJet is one of two Western operators for the Russian-made airplane. Photo: Superjet International.
and efficient aircraft.
But it’s hampered by erratic production and questionable product support (largely due to the overhang of the Putin politics).
The aircraft was grounded briefly in December when a fatigue issue was found in the tail section during a routine inspection.
Summary
- Nearly 100 SSJ100s are in service.
- Two key Western customers.
- Small customers base.
- Captive Russian customers.
Norwegian’s risky fleet expansion
By Bjorn Fehrm
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Introduction
February 15, 2017, © Leeham Co.: In our review of Norwegian Air Shuttle last week (Norwegian from now on), we pointed out the company’s relatively weak balance sheet. It’s considerably weaker than its direct competitors.
At the same time, Norwegians’ fleet expansion is the most aggressive outside of boom markets like India or Indonesia.
Norwegian ordered 200 narrow body aircraft in 2012. It ordered 100 Boeing 737 MAX 8s in January and 100 Airbus A320neos in June. This compares to a narrow body fleet of 70 at the time and a fleet of 100 today (mainly 737-800s). In addition, Norwegian has 30 Boeing 787 long haul aircraft on order on top of the 12 it operates today.
How much risk do these 230 incoming aircraft pose to Norwegian?
Summary:
- Presently, Norwegian absorbs 50% of incoming single aisle aircraft for own needs (Boeing 737-800 and later MAX 8).
- The other 50% (deliveries of Airbus A320neo) are leased to external operators.
- The financing need for incoming aircraft, be it for own or other’s use, is $15bn over the coming years.
- With a balance sheet of of only twice that size and 10% own equity, the going can get rough if the market weakens.
Trans-Atlantic for $75, does it work?
By Bjorn Fehrm
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Introduction
February 9, 2017, © Leeham Co.: Norwegian will start trans-Atlantic flying between Edinburgh and New England for $75 one-way in late spring when it gets its Boeing 737 MAX 8.
The introductory price will be $69. CEO Bjorn Kjos says the operating costs of the 737 MAX 8, “which is very low,” will make this level of ticket pricing possible.
We were the first to point out (November 2014 in this article) the re-engined MAX 8 would be a trans-Atlantic enabler at a new cost level. We didn’t put the passenger ticket at $75 at the time. Time to check if it’s possible to make money with such fare prices.
Summary:
- We use our aircraft performance model to generate the operating costs between Scotland and New England/upstate New York.
- We then compare the total costs for the trip versus revenue. What is the average ticket price to break even?
- We use an aggressive cabin, the same as for the European traffic.
- Is it OK to travel at that comfort level for the seven hours over the Atlantic?
- For $75, you bet it is.
Assessing the future of COMAC programs
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Introduction
Feb. 6, 2017, © Leeham Co.: China’s effort to become a viable commercial aerospace alternative was filled with rocky fits and starts for its two signature airliner programs, the AVIC ARJ-21 and the COMAC C919.
COMAC, a spin off from AVIC and yet another government-controlled entity, is already casting eyes on a 250-seat, twin-aisle design, the C929—ostensibly in a joint venture with Russia’s United Aircraft Corp.
The ARJ-21 regional jet finally entered service after delays of eight years. The C919 target EIS is now 2019, six years after the original date. The first flight hasn’t even taken place.
Chinese officials set a target EIS for the C929 of 2026.
A rough road remains ahead for each program.
Summary
- Exceedingly slow delivery ramp up for the ARJ-21.
- First flight of the C919 planned this year.
- Wide-body C929 will challenge the Airbus A330 and Boeing 787.
Assessing Embraer’s EJet future
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Introduction
Feb. 2, 2017, © Leeham Co.: Embraer’s new E2 jet faces a major challenge: the US pilot Scope Clause that limits the number, seats and weight of aircraft that can by operated by regional airlines on behalf of the US legacy carriers.
The E175 E2 exceeds the 86,000 lb weight limit in the Scope Clause. Unions declined last year to adjust this limit upward. The next round of contract talks begins in 2019.
Summary
- Trans States Airlines has options and letters of intent for 50+50 E175 E2s.
- Skywest is listed by EMB with “firm” orders for 100 E175-E2s and options—but in reality, these are conditional orders.
- Embraer professes confidence in building the bridge between the E1 and E2.
Assessing the MC-21 future
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Introduction
Feb. 9, 2017, © Leeham Co.: Russia’s Irkut designed a mainline jet to compete with the Airbus A320 and Boeing 737 families that, from a passenger experience
Irkut MC-21 at roll-out. Photo via Google images.
viewpoint, is the best in class.
The MC-21 has a wider fuselage than the A320 (which is wider than the 737). Seats and the aisle are the widest in the class. The overhead bin space is plentiful.
But the airplane is hampered by its environment: Russia itself.
Summary
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Posted on February 13, 2017 by Scott Hamilton
Airbus, Boeing, China, Comac, Irkut, Leeham News and Comment, Pratt & Whitney, Premium, United Aircraft
737, A320, Airbus, ARJ-21, Boeing, C919, C929, Irkut, MC-21