Boeing’s tactical option for MOM sector

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Introduction

Aug. 14, 2017, © Leeham Co.: It’s not a done deal yet—the business for the so-called Boeing 797 remains a challenge. But the consensus is that Boeing will launch the program next year, for an entry-into-service around 2025.

Boeing 797 concept. Source: Boeing.

Yet there are airlines that say they don’t want to wait that long for a new airplane.

What are their choices?

  • Acquire the Airbus A330-200. It’s available now. Fuel is cheap and is expected to remain so well into the next decade.
  • Acquire the A330-800. It’s fairly cheap. It’s about 10% less expensive to operate on a per-trip basis than the A330-200. The new engines will serve as a hedge against rising fuel prices for an indefinite future.
  • Acquire the Boeing 787-8.
  • Airbus ponders an A321neo+.
  • There’s another option that is not readily apparent.

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Pontifications: Avolon sees strong sales for Boeing 737-10

By Scott Hamilton

Aug. 14, 2017, © Leeham Co.: Avolon, one of the world’s largest aircraft lessors following the acquisition of the CIT Aerospace portfolio, believes Boeing will see 2,000 of the 737-10—doubling the internal figure Boeing used to launch the program.

In a new white paper, which Avolon periodically issues, the lessor “projects that the MAX 10 will account for approximately 20% of all 737 MAX family deliveries, which would equate to around 2,000 aircraft. This compares to the A321neo, which is forecast to account for 40% of the A320neo family, with over 4,000 deliveries,” writes Steve Mason, Avolon’s SVP of Strategy.

Mason joined Avolon from CIT acquisition, where he held a similar position and likewise issued periodic white papers.

“The value proposition of the MAX 9 has been impacted by the launch of the MAX 10. It is unclear what role remains for the aircraft, but it is likely to have a limited future,” Mason writes.

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Mid-year production update at Airbus

July 27, 2017, © Leeham Co.: It’s mid-way through 2017 and LNC is taking its second look at production and delivery stream flows for the Big Four airframe manufacturers.

We examined Boeing Monday in advance of its earnings call Wednesday. Today we look at Airbus in advance of its earnings call today. We look at Bombardier and Embraer next Monday.

We use the Airfinance Journal Fleet Tracker as the basis for our exam.

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Mid-year production/delivery update for Boeing

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Introduction

July 24, 2017, © Leeham Co.: Boeing’s 2Q earnings call is Wednesday and analysts will be watching for information about the 787 deferred production costs, potential production rate changes for the 787 and for the 777 Classic.

We looked at the 787 costs last week.

It’s also mid-year and LNC is taking an updated look and production and delivery rate streams for Boeing, Airbus, Bombardier and Embraer. The Airfinance Journal Fleet Tracker is our resource for this report.

We begin with Boeing in advance of its earnings call.

Summary
  • A case can be made for taking 737 production rates to 60/mo.
  • 777 Classic rates still may need to come down.
  • 787 rate increase remains questionable.

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MAX 8 conversions to MAX 10 outweigh MAX 9

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Introduction

July 3, 2017, © Leeham Co.: There were conversions of 214 orders from other 737 MAX programs in favor of the 361 orders and commitments announced at the Paris Air Show for the launch of the 737 MAX 10.

Aside from the easily identifiable 100 MAX 9 orders from United Airlines, the other conversions weren’t readily apparent.

An analysis by LNC indicates that about half of the conversions came from the MAX 8.

Summary
  • The MAX 10 orders and commitments surpass the MAX 9 after PAS, becoming the second most in-demand of the MAX family.
  • LNC estimates that about 300 orders remain for the MAX 9, higher if Lion Air’s MAX order is allocated on a pro-rata basis.
  • A lot of MAX 8/9 series orders are TBD, with no immediate selection by the customer.

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Decision detailed (sort of) in Boeing-Bombardier price dumping case

June 27, 2017, © Leeham Co.: The US International Trade Commission (ITC) last week released its detailed decision to go forward with the Boeing complaint that Bombardier engaged in price dumping when it sold the CS100 to Delta Air Lines.

But for the outsider, the public document isn’t much help. It’s heavily redacted and left out all the good stuff that would allow an outsider to fully understand the reasoning the ITC voted 5-0 to send the case over to the US Commerce Department for further study and potential imposition of tariffs.

Delta Air Lines Bombardier CS100.

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Propelled by MAX 10, Boeing thumps Airbus at Paris Air Show

June 22, 2017, © Leeham Co.: The Boeing 737 MAX 10 received a rousing endorsement from lessors and airlines last week at the Paris Air Show.

There were 361 orders and commitments announced, blowing through Boeing’s own forecast Monday of 240 orders. Never mind that 214 are conversions from other MAX orders, a fact Airbus COO Customers John Leahy used to downplay the program launch: the performance is a dramatic contrast to the poor reception Boeing received only three months earlier, at the ISTAT conference in San Diego, when a soft launch was rolled out by Boeing.

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Pontifications: Boeing-Bombardier dispute’s big winner: Airbus

By Scott Hamilton

June 12, 2017, (c) Leeham Co.: Boeing won round one Friday in its price-dumping complaint against Bombardier over its sale of the CSeries to Delta Air Lines.

The US International Trade Commission (ITC) voted 5-0 to continue the investigation. It now goes to the US Department of Commerce to determine whether tariffs should be imposed on the deal, and how much. Delta Air Lines would have to pay the tariffs.

Boeing won this round but the big winner is likely to be Airbus.

 

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Boeing complaint “unprecedented overreach,” says Bombardier

May 30, 2017, © Leeham Co.: “Boeing’s petition…is unprecedented in its overreach. There have been no…imports and no domestic shipments during the period of investigation. There are no lost sales or revenues. Boeing does not even make a product that competes with the aircraft Bombardier offered in the United and Delta competitions….”

So begins Bombardier’s closing brief in the Boeing complaint before the US International Trade Commission (ITC).

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Bombardier “deliberately misleading” in price dumping case, says Boeing

Delta Air Lines CS100. Source: Delta.

May 29, 2017, © Leeham Co.: Boeing minced no words in its closing brief to the US International Trade Commission in its price dumping complaint against Bombardier.

“Bombardier’s intentional obfuscation simply proves that Bombardier has no credible answer to [the] allegations,” Boeing’s lawyers wrote in the second sentence.

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