Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- NBA Single or Dual Aisle Airline preferences May 10, 2021
- Pontifications: A330-300 could be great deal ahead May 10, 2021
- Bjorn’s Corner: The challenges of airliner development. Part 2. Why Certification? May 7, 2021
- China’s air travel “recovery:” volume improving, but revenue still elusive May 6, 2021
- HOTR: Annual Reports give hint to MAX return in China May 4, 2021
(Updated) Airbus 1Q2021, a strong quarter in difficult times
April 29, 2021, © Leeham News: Airbus presented its results for the first quarter of 2021 today. It was a reassuring result when other aircraft manufacturers suffer.
The Airbus operations delivered an operational profit of €0.7bn with a net profit of €0.5bn, reflecting good progress in sizing the company for the new reality and a solid performance in operations. Commercial aircraft delivered 125 planes during the quarter against 122 last year. The outlook for 2021 from the 2020 results briefing in February was maintained.
Bjorn’s Corner: The challenges of hydrogen. Part 34. Series wrap-up
By Bjorn Fehrm
April 23, 2021, ©. Leeham News: I said last week we spend this final Corner on hydrogen-fueled air transport, describing projects outside the big ones, like Airbus.
But more important events took place in the week with implications for sustainable air transport. We wrap up by describing these and speculate where these take us.
“The thin blue layer that enables life on our rock planet.” Source: President Biden’s introduction to the climate summit.
Airbus 2020, prudent navigation of a challenging environment
February 18, 2021, © Leeham News: Airbus presented its results for 2020 today. The company reported a net loss of €0.5bn at revenues of €50bn (€70.5bn 2019). Airbus’ operations delivered a result of +€1.7bn; it was then reduced to a loss by charges of €2.2bn for the year.
Airliner deliveries reduced by 34% to 566 for the year (863), with net orders at 268 aircraft (768). A forecast for 2021 was given as same-level deliveries with operating profit at +€2bn and break-even Free Cash Flow.
Podcast: 10 Minutes About the A321XLR and Why Boeing Can’t Compete
Jan. 26, 2021: © Leeham News: Today’s episode is 10 Minutes About the A321XLR and Why Boeing Can’t Compete. LNA’s Judson Rollins worked 
for Boeing when the MAX was created. He brings an airline background as well, having worked for Air New Zealand and Continental.
A year of reckoning for Low-Cost Long-Haul
Subscription Required
By Vincent Valery
Introduction
Dec. 7, 2020, © Leeham News: Since the beginning of the COVID-19 outbreak, numerous carriers have either ceased operations or gone into court-supervised restructurings. Among those undergoing restructurings are the world’s two largest low-cost long-haul airlines, AirAsia X and Norwegian Air Shuttle.
Both carriers were in a precarious financial condition before the pandemic. Their troubles contrast with the financial solidity of some major low-cost airlines, including Ryanair and Wizz Air.
IAG closed its Level base in Paris Orly, while Lufthansa ceased SunExpress Deutschland’s operations. NokScoot, a joint venture between Singapore Airlines and Nok Air, also ceased operations after years of losses.
Before the COVID-19 outbreak, Primera Air ceased operations in 2018. Wow Air and XL Airways folded in 2019. Along with AirAsia X’s and Norwegian’s financial struggles, this raises questions about the viability of the low-cost long-haul business model.
LNA looks at the sequence of events that led to four major carriers’ failure and the viability of their business models.
Summary
- Low-cost long-haul isn’t new;
- Bringing no-frills to the next level;
- Undercapitalized for the level of risk;
- When going mainstream does not work;
- One certainty and a question mark on viability.
Bjorn’s Corner: The challenges of Hydrogen. Part 5. The Hydrogen tank.
By Bjorn Fehrm
August 21, 2020, ©. Leeham News: In our series on hydrogen as an energy store for airliners we start the design discussion of a hydrogen-fueled airliner by understanding the onboard storage of hydrogen better.
While there is present knowledge from for instance the space launcher industry, the storage demands for launchers are hours rather than days. Several implementations of longer storage aeronautical tanks have been done, among others by NASA/Boeing for high flying UAVs.
Airbus and the Russian aircraft industry were also active with research during the 1990s and Tupolev built a test aircraft that included a complete hydrogen fuel system (Figure 1).
Figure 1. The Tu-155 Hydrogen research aircraft. Source: Tupolev.
Embraer’s 2Q2020: Revenues more than halved, causing increasing losses
By Bjorn Fehrm
August 5, 2020, ©. Leeham News: Embraer presented its 2Q2020 results today. The revenue virtually halved for 1H2020 to $1.17bn (2.2bn 1H2019) and shrank 61% for the second quarter to $537m ($1,379m 2Q2019), after delivering only four E-Jets during the quarter (26).
Total losses were -$342m ($27m), whereof -$202 was non-operational charges. The COVID crisis hits commercial aircraft deliveries, but Embraer had no cancellation of E-Jet orders in the quarter.
The Executive jet segment is holding up comparatively well, as is Defense and Security.
Airbus cuts 15,000 positions in its “COVID-19 adaptation plan”
June 30, 2020, © Leeham News: Airbus held a press call with its CEO Guillaume Faury today, where he elaborated on Airbus announced “COVID-19 adaptation plan”. 
Over the next 12 months, Airbus needs to reduce its airliner business workforce with 15,000 positions worldwide. Other parts of the company like Helicopters and Defence and Space are not affected by this plan.
Redundancies are not ruled out, but Airbus will work with its social partners to limit these by using available social measures such as voluntary departures, early retirement, and long term partial unemployment schemes offered by governments.
France to invest 15 billion Euro in its aeronautical industry
By Bjorn Fehrm
June 10, 2020, ©. Leeham News: France presented a 15 billion Euro support plan for the French aeronautical industry yesterday, to help the industry overcome the effects of the COVID-19 pandemic.
The plan has three focus areas:
- safeguard the employment of the 300,000 employed in the French aero industry
- transform the supplier network to a more robust structure
- and perhaps most interesting, set the direction for the industries’ next aircraft projects
The French Finance Minister announces the plan. Source: France 24.
Embraer announces a first Quarter 2020 loss of $292 million
By Bjorn Fehrm
June 1, 2020, ©. Leeham News: Embraer presented its 1Q2020 results today. It lost $292m (vs. loss of $43m 1Q2019) on revenues of $634m ($823m).
The reason is the COVID-19 crisis and halting commercial jet production during January, to prepare for the Boeing Joint Venture. It halved the 1Q2020 revenue of Commercial aircraft to $141m versus $281m last year.
The Executive jet segment is recovering, however. Its 1Q2020 revenue was $130m versus 117m 1Q2019, an 11% increase despite delivering fewer jets. The reason is high-end deliveries are now strong after several years of slump.
The separation costs for the canceled Boeing Joint Venture during 1Q2020 was $22m. The 1Q2020 results include $55m of special items due to the impacts of COVID-19. Embraer lowered the fair value of its stake in Republic Airways Holdings with $22m and made bad debt provisions for weak airliner customers of $33m.
Arbitration proceedings with Boeing have started for the canceled Comercial airplanes Joint Venture agreement and the KC-390 Contribution agreement. Embraer said in the quarterly presentation call it would be open to new cooperation agreements but had nothing new to tell on the subject.
The Company has $2,501m of Cash exiting 1Q2020 with first debt maturing in 2022. Given the present crisis for Civil aviation, guidance for 2020 is suspended.
