Cutting A220 costs is an ‘ongoing exercise’ for Airbus

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Introduction

March 14, 2019, © Leeham News: Airbus’ effort to slash supply costs for A220 production is “an ongoing exercise at this point,” Joe Marcheschi, Airbus’ head of procurement in North America, told LNA in an interview last month.

The A220-300 for JetBlue will be assembled at the Airbus plant in Mobile (AL). Airbus rendering.

“There are no specific, let’s say, achievements yet,” he said. “We are working closely with our supply chain.”

It takes time to squeeze cost out of the supply chain, he said. “We only took over July 1. That’s when we got full knowledge of the existing contracts.”

In January, Philippe Balducchi, head of the Airbus-led venture overseeing production, told journalists that the aerospace giant aims to realize “significant double-digit” percentage cost reduction. He indicated that most of the savings likely would come from the supply chain, according to news reports.

“Look, the airplane is absolutely fantastic—it just costs a lot of money,” Marcheschi said. “Now, we have to find a way to reduce the cost.”

Summary
  • Airbus is working to slash supply chain costs on A220 program, but no announcements yet.
  • The European plane maker wants to offer commercial MRO services in North America.

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Airbus ends the A380 program

Feb. 13, 2019, © Leeham News: Airbus announced today (Seattle time, Feb. 14 in Toulouse) that it is terminating the A380 program.

The last airplane will roll off the assembly line in 2021, for Emirates Airlines.

Emirates cancelled an order for 39 A380s. In its place, the carrier ordered 30 A350s and 40 A330neos.

The Emirates and Airbus press release is here.

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A380 program termination expected tomorrow

Feb. 13, 2019, © Leeham News: Airbus is expected to announce tomorrow the termination of the A380 program, a move that had been rumored for weeks.

Tomorrow is Airbus’ annual press conference for 2018 results. Its Board of Directors meets today.

Word emerged last month that Emirates Airline was considering cancelling its 2017 order for the giant airplane, swapping the 20 (plus 17 options) for the A350 or the A330neo.

Last week, Qantas Airways, as long expected, canceled its remaining order for eight A380s. This week, Qatar Airways said it will begin retiring its A380s when the first reaches age 10.

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KKR invests $1bn in small lessor

Jan. 3, 2019, © Leeham News: The US private equity fund KKR agreed to invest $1bn in boutique lessor Altavair, a deal that includes taking a 50% stake in the company.

KKR may supplement the investment with additional commitments, the companies said.

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LNC’s Top 10 stories in 2018

Jan. 2, 2019, © Leeham News: Boeing dominated the Top 10 news stories last year, as measured by views.

Displacing Airbus at Hawaiian Airlines, which ordered the 787-9 and canceled the A330-800, led the readership.

Boeing’s flip of the Hawaiian Airlines order for the A330-800 to the 787-9 was the most read story of 2018. Photo: Hawaiian Airlines.

Airbus’ launch of the A350-900ULR came in second.

Here are the Top 10 stories on Leeham News for 2018: Read more

2019 Outlook: Boeing’s decision on NMA is the headline to watch

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Introduction

Dec. 21, 2018, © Leeham News: It is a stretch to say 2019 is a pivotal year for Boeing.

There would have to be events of tsunami proportions to be pivotal for a company with revenues of more than $90bn.

But there is no doubt 2019 will be a very important year for Boeing.

Summary
  • The headline to watch will be the widely anticipated launch of the New Midmarket Aircraft, also called the 797.
  • The 777X begins flight testing next year. Sales are stalled for the newest airplane of the Boeing family.
  • The proposed new joint venture between Boeing and Embraer is expected to be consummated by the end of the year.

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How useful is an NMA, Part 4

By Bjorn Fehrm

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Introduction

November 1, 2018, © Leeham News.: Last week we looked at how a Boeing NMA would function as a medium range airliner in the Asia-Pacific.

We now continue with flying the two aircraft variants from Middle East locations, exploring how large an area in Asia, Europe and Africa the aircraft would cover.

Artists impression of the Boeing NMA. Source: The Air Current.

Summary:

  • The profile of an NMA fits well in a Middle East Carrier’s fleet. Dependent on location it covers all of Europe and most of Africa and Asia.
  • As the NMA is a lesser aircraft than the present long-range aircraft used on the routes it would have impressive economics for this type of operation.

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777F, 747-8F orders help former’s bridge, solidify Boeing as freighter king

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Introduction

Aug. 6, 2018, © Leeham News: The surge of orders at the Farnborough Air Show for Boeing 777 and 747-8 freighters is welcome news for Boeing, which still had production gaps to bridge between the 777 Classic and the 777X.

The 747-8F orders, for five, helps breathe life into this struggling program.

The orders also add to Boeing’s virtual monopoly in new-build cargo aircraft backlogs.

Summary
  • 777F orders and commitments now nearly double the remaining 777-300ER backlog.
  • Three new-build freighter models swamp Airbus offering of just the A330-200F.
  • Airbus pitching UPS for A330-800F.

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Pontifications: Supply chain meltdown

By Scott Hamilton

Aug. 6, 2018 © Leeham News: It happened to Airbus. It sort of happened to Boeing. It was bound to happen in a much bigger way to Boeing, and it has.

Some 40 737s are now sitting around the Renton assembly plant in a major supply-chain meltdown.

This follows the highly publicized, two-year long supplier meltdown at Airbus as Pratt & Whitney and CFM fell down on engine deliveries and technical problems for their GTF and LEAP-1A engines, respectively.

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Boeing 777-9 or Airbus A350-1000 for the Gulf carriers?

By Bjorn Fehrm

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Introduction

May 17, 2018, © Leeham News: The recent agreement between the US and the Gulf carriers limits the expansion of the carriers on the US market. As the premier long-range destination area from the Gulf is the US market, this will influence the lift needed by the three.

All three carriers, Emirates, Qatar Airways (Qatar) and Etihad, have decided on the 777-9 as the mainstay for their long-haul needs. With the change, the question arises, will Qatar increase the buy of the A350-1000 instead of taking the 777-9 and will any of the others reconsider?

To understand what’s involved we compare the capacity and the costs of the 777-9 and A350-1000. How large is the difference? Is the A350 the better choice if the extreme long-haul capacity needs decline?

 Summary:
  • The maximum range and per seat costs of the 777-9 and A350-1000 are close when compared apples to apples.
  • The advantage for the 777-9 at full aircraft disappears quickly as load factors decline.
  • If the needed capacity of the long-haul US routes declines, the 777-9 can be too much aircraft for the Gulf carriers.
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