By Vincent Valery
Dec. 12, 2019, © Leeham News: Norwegian Air Shuttle (NAS), struggling to survive after years of over-expansion, took major steps over the last few weeks to overhaul its finances and strategy.
The airline appointed Jacob Shram, a former McKinsey consultant and Statoil executive, as a new CEO. Former JetBlue Chief Commercial Officer Marty St. George is also joining the airline on an interim basis.
After years of breakneck expansion, the airline vowed a shift in focus on profitability and business efficiency. In this article, LNA analyzes the various announcements and assesses whether NAS has a chance to survive in the long term.
By Vincent Valery
Dec. 2, 2019, © Leeham News: Rolls-Royce continues to be in the spotlight for the Trent 1000 durability issues, with no end in sight. The engine manufacturer recently increased the total disruption cost estimate to £2.4bn.
The engine-related charges and substantial research and development expenditures have raised questions about Rolls-Royce’s financial health. As of the end of 2018, the company had a net negative £1bn equity on its balance sheet.
However, the company has a market capitalization of around £14bn and holds a credit rating comfortably in Investment Grade territory.
This article analyzes the reasons for the disconnect between the company book value and market capitalization. Accounting differences between the USA’s GAAP and Europe’s IFRS play a significant role.
Rolls-Royce’s strategic choices in the early 2010s will have ramifications for engine development on future commercial aircraft programs.
By Judson Rollins
Nov. 25, 2019, © Leeham News: Nearly every manufacturer of jet engines is experiencing problems with various models, which is causing delays for several prominent Boeing and Airbus programs. The Airbus A220, A320neo, A330neo and Boeing 787, 777X are all experiencing engine-related setbacks.
By Bjorn Fehrm
October 17, 2019, © Leeham News: FlightGlobal writes Boeing is investigating re-engining the 767-400ER with GE GEnx engines to produce a new freighter and perhaps a passenger aircraft as a replacement for the NMA project. Development costs would be lower and it would be easier to get a business plan which closes for the upgraded 767 than for the NMA.
We commented on the idea earlier in the week and here follows a technical analysis of what re-engining the 767 would bring.
By Vincent Valery
Sep. 30, 2019, © Leeham News: It hasn’t been an easy year for the Airbus A380 program since the end of production was announced in February.
Lufthansa announced in March that Airbus would buy back six A380s in 2022/2023 as part of a follow up order for 20 A350-900s. Air France intends to retire its Superjumbo fleet by 2022. Emirates retired two aircraft that were less than seven years old.
A number of factors are leading airlines to prematurely retire their A380s.
By Bjorn Fehrm
September 5, 2019, ©. Leeham News: Last week, we examined how a longer-range model of Boeing’s 787-10 would look like. We designed a 787-10ER version (ER for Extended Range) by increasing the Maximum TakeOff Weight of the aircraft. We also did some other adjustments to accommodate the increased weight.
We now compare the resulting aircraft with its nearest competitor, the Airbus A350-900. How would a 787-10ER stack up against an A350-900?
June 3, 2019, © Leeham News: Airbus and Embraer are 50 years old this year.
Airbus broke out the party hats last Wednesday. It arranged a formation flying of all its in-production aircraft, including the Beluga XL. It launched a website microsite with its history. A new book, Airbus, The First 50 Years, has been issued. A celebration is planned for the Paris Air Show.
Embraer’s anniversary is Aug. 19, so at this point, its party plans haven’t been solidified, but there will likely be something at the Paris Air Show. Embraer plans to have its new specially painted E195-E2 at the air show.
May 2, 2019, © Leeham News: There was indication last week Boeing’s decision on whether to approve the New Midmarket Airplane program will slide.
CEO Dennis Muilenburg said on the company’s first quarter earnings call the focus is returning the grounded 737 MAX to service.
A decision on authorizing the sales force to offer the NMA for sale is ambiguous. For the first time, targeting 2025 for entry into service appears to be acknowledged as iffy.
The statements confirm LNA’s analysis and our reports that the 2025 EIS is unlike.
April 22, 2019, © Leeham News: If there remains any doubt that Boeing’s prospective New Midmarket Airplane (NMA) won’t be ready for entry into service (EIS) by 2025, it should be dispelled by now.
The Board of Directors is unlikely to approve Authority to Offer (ATO) the NMA for sale as long as the cash flow for the MAX is outgoing and not in-coming.
Although this has its own impact on the NMA timing, it’s not the critical factor.
Last week, it was revealed that the CFM LEAP engine on the MAX (and the Airbus A321neo) has a problem called coking, which led to the contained engine failure of a Southwest Airlines MAX being ferried from Orlando (FL) to Victorville (CA) for the grounding of the Boeing airplane (see here and here). It’s the latest in a long line of engine maker problems with their current generation of powerplants.
This issue is unrelated to the MAX MCAS grounding. It also affects some engines on the A320neo family.
April 9, 2019, © Leeham News: Delta Air Lines has the third largest third-party MRO company in North America and aggressively seeks to grow, in sharp contrast to its competitors.
While American and United airlines have limited their own maintenance, repair and overhaul, let alone seek third party business, Delta Tech Ops is a business unit and profit center. Delta CEO Ed Bastian said today that Tech Ops will achieve $1bn in revenues this year and has a goal of $2bn within five years.
Bastian was the lead-off speaker at the Aviation Week MRO Americas conference in Atlanta this week.