Restoring capacity with the A330ceo or A330neo, Part 2

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By Bjorn Fehrm

Introduction  

June 25, 2020, © Leeham News: Last week, we started looking at the Airbus A330-200 market and whether to hold on to one’s A330-200 or restoring capacity after the COVID-19 shut-down with the newer A330-800.

We looked at the history of the A330-200, the reasons it sold 642 units to date, and why the sequel, the A330-800, is not selling well.

We dig deeper into the replacement question today. In a post-pandemic world, is holding on to or even leasing an A330-200 for long-range operations the better alternative, or should we take delivery of a new A330-800?

Summary
  • The A330-200 was Airbus’ best aircraft for long and thin routes.
  • As the A330-300 and later A330-900 grew its range, the A330-200 and A330-800 market shrunk.
  • For long and thin routes, is keeping/leasing an A330-200 or taking delivery of an A330-800 the better alternative?

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Looking ahead for 2020 and 2030 decades: Airbus

First in a series of reports.

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By Scott Hamilton and Vincent Valery

June 17, 2020, © Leeham News: Airbus was riding high in February.

The A321XLR was a clear winner. An important order was won from United Airlines, up to then an exclusive Boeing narrowbody customer. American Airlines selected the XLR. An order was expected from Delta Air Lines.

Each order was another that made it impossible for Boeing to launch the New Midmarket Airplane (NMA).

In one of his first actions, Boeing CEO David Calhoun, taking office Jan. 13, put the NMA on indefinite hold, pending a complete review of Boeing’s product strategy.

The Boeing 737 MAX remained grounded by regulators, with no return to service in sight.

The Airbus A321XLR. This 9-hour capable airplane helps fragment routes–and soften demand for widebody aircraft. Source: Airbus.

Things couldn’t be going better for Airbus.

And then in mid-March, the COVID crisis became a global pandemic. Air transportation fell up to 95%. Airlines required government bailouts. Airbus CEO Guillaume Faury said the very existence of Airbus was threatened.

Summary
  • COVID’s impact.
  • A320 family ‘s commanding lead over Boeing.
  • A220 commands low-end of single-aisle sector.
  • A330neo is the weak link.
  • Looking ahead in product strategy.

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Embraer’s Slattery named CEO of GE Aviation

By Scott Hamilton

June 15, 2020, © Leeham News: John Slattery, the CEO of Embraer Commercial Aviation, was named CEO of GE Aviation, it was announced today.

John Slattery

Arjan Meijer is the new President and CEO succeeding Slattery. Slattery succeeds David Joyce, who is retiring. Slattery’s appointment is effective July 13.

Slattery devoted much of the last year trying to win approval of the proposed Boeing-Embraer joint venture, Boeing Brasil-Commercial. Boeing terminated the agreement April 25, claiming Embraer failed to meet all required terms and conditions. Embraer claims it met the conditions. Both took the dispute to arbitration.

Slattery had been designated CEO of Boeing Brasil. After the deal’s collapse, his departure from Embraer was expected.

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Pontifications: bleak near- to mid-term future for Rolls-Royce engine unit

By Scott Hamilton

June 15, 2020, © Leeham News: The jet engine division of Rolls-Royce faces an uncertain future because of its own problems, exacerbated by the impact of COVID-19 on commercial airlines.

Beset by problems with its Trent 1000, Boeing 787 engine, hampered by a huge error in judgment to withdraw from a joint venture with Pratt & Whitney, beset by the premature termination of the Airbus A380 program and now facing a long-term impact of the coronavirus crisis, Rolls is an engine maker with few opportunities.

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Better to bring capacity back with a 777-9 or 787-10 if we fly 777-300ER today?

By Bjorn Fehrm

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Introduction

May 21, 2020, © Leeham News: We looked at the economics of extending the lease of a Boeing 777-300ER or taking an ordered 777-9 here.

If traffic post-COVID-19 on the routes we fly stays down for long, should we change the order to a 787-10? What are the trades between staying with the 777-300ER, taking the 777-9, or stepping down to a 787-10?

We use our airliner economic model to find out.

 

Summary:

  • The 787-10 is the safe choice if the fill level for our routes will stay below its passenger capacity for a longer period.
  • This choice is valid for a JFK to Heathrow route. The 787-10 has a shorter range than the 777-300ER and 777-9, so a 787-10 alternative is only possible for routes within its capacity.

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Engine OEMs forecast big hit to aftermarket revenue

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Now open to all readers.

By Scott Hamilton

May 5, 2020, © Leeham News: The COVID crisis will damage the aerospace aftermarket in ways that are only beginning to be understood.

As key companies report 1Q earnings, it’s clear that engine aftermarket revenue is going to take a major hit for years to come.

Engine companies like CFM, GE Aviation, Pratt & Whitney and Rolls-Royce, rely on aftermarket sales as the key component of their business plans.

The research and development money that goes into an engine consumes such huge amounts of cash that the OEMs don’t recoup their costs for 10-20 years. The aftermarket for parts, maintenance, repair and overhaul is where they make their profits in the meantime.

But this is seriously threatened by the virus crisis.

“The aftermarket for key programs took 4+ years to return to 2008 levels out of the Great Financial Crisis, and that was with traffic decline at a fraction of the declines today,” Bernstein Research wrote in a May 4 note to clients.

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Bjorn’s Corner: Why e in ePlane shall stand for environment, Part 20.

May 1, 2020, ©. Leeham News: We now wrap the series about technologies that can help reduce air transport’s environmental footprint.

I wrote in the first article, December 13: We have lost our way in our search for a lower carbon footprint air transport system by heading down the electric lane. I will argue why it’s not the best route as it’s not the route that leads to tangible results any time soon, despite huge investments.

In 19 Corners to date, we discussed why. It’s time to summarize what we learned.

Figure 1. The Gartner hype cycle. Source: Wikipedia.

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“We’re sick and tired of new technologies:” Avolon CEO

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Introduction

By Scott Hamilton

March 16, 2020, © Leeham News: “I can tell you from our perspective, we’re kind of sick and tired of new, new technology. It’s not proven to be the home run.”

This blunt assessment comes from the chief executive officer of the big aircraft lessor, Avolon.

Domhnal Slattery

Domhnal Slattery, the CEO, was giving his critique of whether Boeing should launch a new airplane once the 737 MAX crisis is over.

Boeing was on a path to decide whether to launch the New Midmarket Airplane when the MAX was grounded one year ago this month.

Airbus was waiting for Boeing to move before deciding how to respond.

Summary
  • Airbus and Boeing should “stick to their knitting.”
  • Focus on incremental improvements for now.
  • 2030s to 2050s will be the next big advance in technologies.

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Does the new weight bump turn the A330-900 to a trans-Pacific aircraft? Part 2

By Bjorn Fehrm

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Introduction

March 12, 2020, © Leeham News: We continue last week’s theme and compare Airbus’ new 251t variant of the A330-900 to the A350-900 in this article.

We saw in the first article the A330-900 251t is now a credible long-range aircraft, including the long hop over the Pacific ocean. When to use the A330-900 or the A350-900? We analyze their economics and where one is to prefer to the other for long-range operations.

Summary:
  • The Airbus A330-900 in its 251t version can serve many US to Asia routes that were reserved for the A350-900 before.
  • We check if the economics support replacing the A350-900 with the A330-900 for these routes.

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Does the new weight bump turn the A330-900 to a trans-Pacific aircraft?

By Bjorn Fehrm

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Introduction

March 5, 2020, © Leeham News: Airbus gave an update on their new 251t variant of the A330-900 this week. With a 251t Maximum Take Off Weight (MTOW), the former mid-ranger is mutating to an able long-hauler.

The true long-haul aircraft in the Airbus lineup is the A350, the go-to aircraft from Airbus for Pacific-Ocean crossings. But with a nominal 7,200nm range, the A330-900 is no longer the trans-Atlantic aircraft it was. It will be an alternative to the A350 for many trans-Pacific routes.

Summary:
  • The A330 started as a mid-range aircraft with less than 4,000nm range. At the time, the A340-300 was positioned as the long-ranger.
  • With the A340 out of the way and to compete with Boeing’s 787, the A330 grew its range 85%. Is it now an alternative to the A350?

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