Pontifications is off this week.
March 20, 2017, © Leeham Co.: There are some major fleet decisions that will probably come down the pike this year at American, Delta and United airlines. Not all of them are going to be viewed positively by Airbus and Boeing.
Part 2. Part 1 may be found here.
Oct. 10, 2016, © Leeham Co.: Regional aircraft are much riskier assets for lessors than mainline aircraft.
Until recently, Bombardier and Embraer were the only two regional jet Original Equipment Manufacturers (OEMs).
Today, the Sukhoi SSJ100 and the Mitsubishi MRJ90 join BBD and EMB in this arena.
Sept. 12, 2016, © Leeham Co.: Sully, the movie about the miracle of the successful water landing of US Airways 1549 on the Hudson River in New York City, sullies the National Transportation Safety Board.
Apparently not content with the gripping drama of the flight’s emergency itself and the dramatic rescue of all 155 souls on board, the movie gins up an NTSB out to hang Capt. Chesley Sullenberger (Sully) and co-pilot Jeffrey Skiles.
Sept. 8, 2016: Glory Lost and Found: How Delta Climbed from Despair to Dominance in the Post-9/11 Era is a ponderous title for a ponderous book.
But this is not a criticism.
Glory Lost is one of the best books I’ve ever read about the turmoil in the airline industry. Authors Seth Kaplan and Jay Shabat, two journalists, put together a book of nearly 450 pages that goes beyond just the focus of how Delta Air Lines spiraled into bankruptcy following 9/11, emerged and suffered through more travails after the 2008 financial market meltdown.
Aug. 30, 2016, © Leeham Co.: Will Scott Kirby’s move from president of American Airlines to the same position at United Airlines lead to a major shift in fleet acquisition at the Chicago-based carrier?
This is an intriguing question that may take some time to answer.
Kirby spent 20 years with American CEO Doug Parker through their careers at America West Airlines, US Airways and American.
Nov. 17, 2015, © Leeham Co. The chief commercial officer of Embraer sees US mainline carriers adding
aircraft in the 100-plus seat sector that will open new opportunities for the largest E-Jets hitherto a limited interest in this region.
First among high profile possibilities: United Airlines, which was identified as a major prospect for Bombardier and its CS100. According to multiple news reports, UA is holding out an order for the CS100 as an inducement for some pilot contract revisions. According to Market Intelligence, the potential order is for an equal number of orders and options, well below 50 orders but one which would be a crucial win for struggling Bombardier.
But Embraer isn’t going to let this order go without a stiff fight. Through United Express partners, EMB has a large installed base of E-175s operating for United. This is viewed as a major advantage by EMB’s CCO, John Slattery.
May 25, 2015, c. Leeham Co. Airline stocks took a dive last week when it appeared fare wars and eroding capacity discipline is beginning among US carriers.
Southwest Airlines said it will be adding capacity at the rate of 6%-7% compared with recent increases of 2%-3% and American Airlines said it will begin matching the prices of Low Cost and Ultra Low Cost Carriers rather than see its market share erode.
And the markets went into a tizzy.
I’m old enough to remember when American aggressively matched the low fares of the emerging new entrant airlines after deregulation in the 1980s. The matching spread and the 1980s became a bloodbath. Read more
By Bjorn Fehrm
Part 1 of 3
The Boeing 757 was developed in the late 1970s as a replacement for Boeing’s popular 727 mid-range single aisle aircraft. Starting from the smaller 727, it ultimately grew to 180 to 230 seat capacity and US transcontinental range. With initial orders from Eastern Airlines and British Airways, the aircraft nonetheless had poor sales through most of the 1980s, picking up with a surge of orders in 1988-1990 when major deals were announced from American, Delta and United airlines.
Following the 1991 Persian Gulf War and recession, orders plunged until the mid-decade with a respectable resurgence. After 9/11, sales dried up and Boeing terminated the program.
Airbus Group beat expectations for its first quarter profit. Continuing research and development costs weighed on earnings before one-time charges. Earnings before interest and the charges were actually down slightly vs 2013 but were better than expectations.
Group still expects the A350 to enter service with Qatar Airways late this year. According to Ascend, there will be one airplane delivered in December (at one time we thought it would slip to January, so we may not be far off). Group continues to call the A350 program “challenging” and notes there could be more charges against earnings. Under European rules, Airbus writes off charges as they occur rather than using Boeing’s program accounting method that spreads charges across hundreds of airplanes.
Cash declined nearly 1bn euros year-over-year to 13.1bn euros.
Links to the PPT presentation and financial statements may be found here.
Update, 0800 PDT:
This is self-explanatory. We’ll publish the results December 31.
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