Pontifications: Transitions, clearing the decks and turmoil at Airbus

By Scott Hamilton

Nov. 26, 2018, © Leeham News: With the naming of CFO and COO officers-in-waiting, Airbus Group has completed the extreme makeover of its executive ranks.

The full transition won’t be complete until April. It’s widely been reported that these changes, including retirements and pushing out people who were not yet near retirement age, was a necessary step to settle fraud and corruption investigations undertaken by England, France, Germany and even the United States.

The latest appointments, announced last week, are for the successors of CFO Harald Wilhelm and Airbus Commercial COO Tom Williams. Dominik Asam, 49, replaces the 52 year old Wilhelm in April. Michael Schöllhorn, 53, replaces the 66 year old Williams Feb. 1. Read more

Delta orders more A330-900, pushes out A350-900

By Bjorn Fehrm

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Introduction

November 22, 2018, © Leeham News.: Delta and Airbus announced Friday; Delta will increase its A330-900 order from 25 to 35 aircraft and push out 10 ordered A350-900 five years, to 2025-2026.

Why this change for Delta? Can the 10 added A330-900 replace the planned A350-900? If so, will other airlines do the same?Summary:

  • Delta is a large operator of A330. With the new order, it will grow to 60 aircraft in the next five years. Through its Delta TechOps operation, it has achieved low operating costs for the A330.
  • In its 251t version available from 2020, the A330-900 can cover most of Delta’s Asian destinations.
  • The A350-900 is now a sub-fleet of 15 aircraft until 2025. It will be reserved for Delta’s longest Asian destinations and where higher capacity is needed.

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Automation reduces foreign advantages over US

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Introduction

Nov. 19, 2018, © Leeham News: The move toward increasing automation makes US more competitive than moving work to other countries, an expert in industrial efficiencies said last week at a meeting sponsored by the Pacific Northwest Aerospace Alliance.

The same is true when it comes to states competing against other states, he said—something that is especially relevant as Washington State girds for expected competition from Southern states, and especially South Carolina, for the prospective Boeing New Midmarket Airplane.

Summary
  • Automation reduces US labor costs.
  • 60% of Boeing’s workforce is eligible for retirement in the next six years.
  • Optimizing the manufacturing value chain based on finite resources.
  • Pressure for speedy decisions is greater than ever.

Read more

Airbus fights delivery challenges on several fronts

By Bjorn Fehrm

October 31, 2018, ©. Leeham Co: Airbus announced 3Q 2018 results today. The company is wrestling with delivery problems for several of its aircraft programs. Its inventory of finished aircraft which can’t be delivered has increased by €5bn as a result.

On the positive side is a smooth running A350 program and that the A220 program, which is consolidated into Airbus for the first time, seems void of unpleasant surprises.

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Airbus’ disadvantages in widebody campaigns

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Introduction

Oct. 29, 2018, © Leeham Co.: Airbus faces a key disadvantage when it comes to winning current wide-body campaigns against Boeing.

The disadvantage is entirely out of its control.

It’s not about whether the A330neo or A350 vs the 787 economics are out of kilter. They’re not.

It’s about the engines, LNC is told by multiple market sources. Specifically Rolls-Royce engines, which exclusively power the Airbus wide-bodies.

Summary
  • Airlines affected by Rolls-Royce-powered 787 problems are hopping mad.
  • The negative halo effect puts questions over the Trent 7000-powered A330neo.
  • While less affected, there is a negative halo effect over the Trent XWB-powered A350.
  • Airlines considering follow-on ordered of 787s are ready to jump from RR to GE.

Read more

Pontifications: Engines, engines, engines

By Scott Hamilton

Oct. 29, 2018, © Leeham Co.: Engines, engines, engines.

News emerged last week that Rolls-Royce admitted its continuing problems with the Trent 1000 that powers the Boeing 787 now bled over to the Trent 7000.

RR will fall short of delivering the number of engines need to Airbus for the A330neo, meaning fewer deliveries of the airplane this year.

Boeing said it is clearing its inventory of 737 MAXes, but CFM LEAP engines are still late, slowing the effort.

Pratt & Whitney’s GTF engine deliveries to Airbus are caught up, but technical issues still plague in-service engines. CFM still has technical issues as well, though not as severe or persistent as with GTF, with its LEAP engines. Read more

Pontifications: Market Intelligence from NY

By Scott Hamilton

Oct. 22, 2018, © Leeham News: I was in New York City last week for a series of meetings. Here’s what “the street” is talking about. I make no judgment calls about whether the thoughts are on target or not. Read more

Assessing A320 production rate interest in >70/mo

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Introduction

Sept. 17, 2018, © Leeham News: With the supply chain under major stress and Airbus and Boeing trying to recover from scores of “gliders” sidelined at airports without engines, each company nevertheless continues to study production rate increases for the A320 and 737 families.

Airbus publicly has said it’s looking at rate 70/mo. Boeing publicly acknowledges it’s looking at rate 63/mo.

Supply chain sources tell LNC Airbus is studying an even higher rate, into the “70s,” at early as 2020—a date that most consider out of the question.

Boeing is known to be considering a rate of 70/mo for its most profitable program.

Today, LNC looks at the A320 scenario. A future post will examine the 737.

Summary
  • Airbus is scheduled to deliver more A320 members in 2019 than production capacity. Some of these may be parked backlog airplanes.
  • 2020-2021 sold out at rate 60/mo, 2022-2023 nearly so.
  • Rate increase to 70/mo opens opportunities for Airbus, pressure on Boeing.

Read more

Hazy expects 797 decision middle next year

Steven Udvar-Hazy, Executive Chairman, Air Lease Corp. Photo via Google images.

Sept. 13, 2018, (c) Airfinance Journal: Air Lease’s executive chairman Steven Udvar-Hazy says that Boeing could make a decision on whether or not launch the 797 model mid-year 2019.

If so, the timing could coincide with the Paris Air Show.

“In the NMA market, whether Boeing will launch the 797 is a ‘multi-billion dollars question’, he says, adding that right now the US manufacturer is assessing the engine availability.

“There are two potential engines applications. They are all derivative engines,” he says at the UK Aviation Club Lunch on 13 September.

“We all know the problems that Airbus and Boeing have been going through with the new engines on the Max and the Neo as well as the 787s,” he adds.

And for him Boeing is very ‘cautious’ on a decision. “They are trying to understand what is the real market demand for this aircraft and all indications points out to a decision sometimes in the middle of next year,” he says.

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Pontifications: Boeing wins certification of KC-46A; B-52 MRO model may be key to profits

By Scott Hamilton

Sept. 10, 2018, © Leeham News: While Boeing Commercial Aircraft grapples with more than four dozen unfinished 737s clogging the space at Renton Airport and Boeing Field, Boeing Defense had some good news last week:

The KC-46A received certification from the US Federal Aviation Administration and the first delivery is due for late October.

Final military certification is still to come and the wing-pod drogues need certifying, but at long last, Boeing can move forward.

Read more