Jan. 09, 2017, © Leeham Co.: Airlines have deferred or are thinking about deferring more than 400 airplanes in the near term, a review of decisions and deliberations that have been made during the last 12 months.
LNC tracked announcements last year of deferrals and statements by airlines that they are thinking about doing so.
Reasons vary widely for the deferrals, these reports indicated. Low oil prices. Slowing economies. Declining financial results. Worries about two of the three top Middle Eastern carriers. A capital squeeze in China. Pressure on long-haul carriers from the emerging sector of low cost, long-haul airlines. Preserving capital expenditures to keep the bottom line in the black.
Today we detail the deferrals we tracked.
Jan. 4, 2017, © Leeham Co.: The top 25 Airbus customers that are identified account for 63% for the current backlog, an analysis of the company’s order list shows.
For Boeing, its Top 25 customers account for 69% of its identified backlog.
Both companies have hundreds of Unidentified orders for which no customer is disclosed.
Editor’s note: We don’t typically do “trip reports;” this isn’t the scope of LNC. But occasionally one crosses our desk that we find of interest. One of our readers, William Bain, provided the following to us and we thought it interesting to share.
By William Bain
I flew Singapore Airlines’ Airbus A350 service from Singapore to Amsterdam. The outbound flight was operated by 9V SMD and the inbound flight by 9V SME. I was seated in the premium economy cabin.
By way of starting, I think people spend too much time say this or that model is better, as such, than that model. There’s been a fair bit of that in relation to the A350 and Boeing 787. But in my view much, if not most, of the comfort factor is down to the configuration used by specific airlines. For example, I was underwhelmed by the Qatar Airways 787 but very much liked the ANA 787.
Note: Nov. 24 and 25 are Thanksgiving Holidays in the US. Our next post will be Monday.
By Bjorn Fehrm
23 November 2016, ©. Leeham Co: Emirates Airline president Tim Clark says the carrier “has to change its approach to long-haul pricing to combat increasing competition” after presenting a half year 2016 profit which plunged 64% on 9 November.
The reason is that traditional mainline carriers are entering the low-cost, long-haul market in addition to the established LCC entrants: Norwegian Air Shuttle, AirAsiaX and Wow Air.
Emirates will add new low-cost fares to keep its growing fleet of Airbus A380 and Boeing 777 filled. Clark states this is necessary and that the airline will not back down on its plans for additional aircraft. It will be a period “of fierce competition as more and more international network carriers are entering low-cost, long-haul,” declares the COO.
What has changed? Isn’t Emirates the Kings of competitive long-haul travel? Read more
Oct. 18, 2016, © Leeham Co.: It’s only a Letter of Intent, the agreement between Boeing and Qatar Airways for up to 60 737-8s.
Qatar announced the LOI two weeks ago because its CEO, the notoriously fickle Akbar Al-Baker, is royally pissed at Airbus over delays for the A320neo. Qatar was the launch customer for the airplane, ordering 50. Citing issues and delays with the Pratt & Whitney GTF engines, and other unspecified problems, Al-Baker refused to take delivery of four of the first aircraft.
He repeatedly threatened to drop the A320 order altogether, but then at the press conference announcing the LOI (along with other Boeing orders), he said he doesn’t walk from contracts.
Forget for the moment the contradiction.
Here’s how Boeing is working to convert the LOI into a firm order.
Oct. 10, 2016, © Leeham Co.: Qatar Airways announced an expected order Friday for Boeing 777s and 787s, but surprised with the addition of a Letter of Intent for up to 60 Boeing 737-8s.
The latter was characterized as a “blow” to Airbus, which has been the target of high profile, public attacks by Qatar’s CEO, Akbar Al-Baker, over issues related to the
A320neo and A350-900. Qatar is a launch customer for each, and each has been delayed due to supplier issues from Pratt & Whitney and Zodiac, respectively.
What Al-Baker expects Airbus to do about PW and Zodiac has never been made clear, but it’s the Airbus name on the airplane, so it’s Airbus that is the target of Al-Baker’s well-known wrath.
Al-Baker refused delivery of the first couple of A320neos due to the engine issues and threatened to turn to the Boeing 737 MAX in retaliation.
The announcement Friday was viewed by some media and aerospace analysts as following through on that threat and delivering a “blow” to Airbus.
But an LOI is the lowest form of a “commitment” to an airplane and one that doesn’t typically even involve deposits.
Let’s look at Friday’s announcement in detail.
Oct. 10, 2016, © Leeham Co.: Last week ended with an order from Qatar Airways for 30 Boeing 787-9s and 10 777-300ERs. Qatar also signed a letter of intent (LOI) for 60 737-8 MAXes.
But that wasn’t the only news in what turned out to be a busy week.
The British American Business Council Pacific Northwest chapter’s annual conference was Tuesday. Airbus Americas president Barry Eccleston discussed the company’s reorganization and recent WTO loss in an exclusive interview with LNC. This was initially behind our paywall; we’ve now opened it to all readers.
He also discussed product development. This post is coming later this week.
Consultant Michel Merluzeau provided his forecast for the next 15 years at the same event.
The Aerospace Futures Alliance held its annual conference two days later. Boeing’s Mike Sinnett, VP of Product Development, gave a rare look into Boeing’s future product thinking. This post is also coming later this week.
Also on Friday, I toured the Boeing 737 factory in Renton with a group of suppliers. I’ll shortly be writing about this as well.
Let’s visit the Qatar order and the WTO issue.
Aug. 15, 2016, © Leeham Co.: Boeing says it may discontinue the 747 program.
Airbus put the A380neo on indefinite hold. Qantas Airways says it doesn’t want its last eight orders. The OEM will reduce the production to 12/yr in 2018.
There haven’t been any Boeing 777X sales since June 2015. There are only six identified customers and there has been a new, identified customer added since July
2014, when ANA ordered the X.
Sales have dried up for the 365 passenger Boeing 777-300ER and only a smattering of orders have come in for its competitor, the Airbus A350-1000.
What’s happened to the Very Large Aircraft sector? What’s happened to the large, medium twin aircraft sector?
A380 and investors meeting: The Airbus A380 has been a sensitive topic for investors. Historically stock prices took a major hit when negative news about the A380 emerged. During an investors day in December 2014, one of the executives slipped that the program could be terminated. The stock took an immediate dive and other executives had to clean up the first one’s comments.
Airbus also holds an investors day during the Paris and Farnborough air shows. The latter’s was scheduled on Wednesday. The night before, the French newspaper La Tribune broke news that the production rate of the A380 will be reduced from 20/yr in 2017 to just 12/yr in 2018. Airbus scrambled to catch up to the story Tuesday night in advance of the Wednesday investors day.
The production breaks even at 20 but not at 12. Yet the stock opened down slightly and remained flat during the rest of the day before closing up slightly.
The jinx may be over, but perhaps Airbus either has to fix the A380 program or cancel its investors days.
June 20, 2016, © Leeham Co.: Recent suggestions and threats that delays at Airbus for the A320neo and A350 means angry customers will flock to Boeing are naïve and grandstanding under the circumstances existing today.
The delays are measured in months, not years. For this reason, Boeing has no ability to fill the immediate needs of any competing airplane to the A320neo and A350.