Leeham News and Analysis
There's more to real news than a news release.
Airbus sees encouraging signs of wide-body demand recovery
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By Scott Hamilton
Oct. 25, 2021, © Leeham News: Airbus sees some “encouraging” signs wide-body demand is recovering from the global COVID-19 pandemic.
Christian Scherer. Source: Airbus.
Passenger demand is nearing-pre-pandemic levels in key areas of the world where single-aisle aircraft are used. Long-haul international demand remains suppressed, however. Some don’t forecast a return to normal for up to two more years. Others forecast a recovery on key routes next year.
Christian Scherer, the chief commercial officer for Airbus, is optimistic.
“I would say that on the wide-body market, you see encouraging signs,” he said during a press gaggle at the IATA AGM Oct. 3-5 in Boston. “Maybe that has to do with the fact that the ecosystem at large is realizing that the best thing they can do in the short- and medium-term, towards that whole global objective of sustainable air transportation is to equip themselves with the most fuel-efficient and therefore eco-friendly airplanes.
“I think that against that backdrop and the opening of more international corridors sees a regained interest on the wide-body side as well. Now it’s lagging the single arch really and there is no scoop here that rates in the long-range airplanes are going to change imminently, but the general sentiment is positive on the wide-bodies as well and that’s really good.”
Pontifications: Engines drive timing of new Embraer TPNG
The first report appeared Oct. 18, 2021.
By Scott Hamilton
Oct. 25, 2021, © Leeham News: Embraer appears marching toward launching a new turboprop aircraft next year with a targeted 2027 entry into service.
The timing will be determined by the engine. Pratt & Whitney, GE Aviation and Rolls-Royce have development programs. PW and GE are farthest along. PW is thought to have the best chance of winning Embraer’s business. (Pratt & Whitney supplies the engines for the E2 jet. GE supplied the engines for the E1.)
In an interview at the IATA AGM Oct. 3-5 in Boston, Arjan Meijer, the president of Embraer Commercial Aviation, said the competition remains open today.
Bjorn’s Corner: The challenges of airliner development. Part 26. Maintenance planning
By Bjorn Fehrm, Henry Tam, and Andrew Telesca.
October 22, 2021, ©. Leeham News: Last week, we looked into Continued Operational Safety and there specifically Safety Monitoring and Reporting. Now we look at the role Instructions for Continued Airworthiness (ICAs) play in preventing the air safety issues we talked about last week.
An important part of the Instructions for Continued Airworthiness, ICA, is how to maintain the aircraft in a continued airworthy state during its operational life. The aircraft is airworthy when it rolls out of the factory but it needs to keep this condition for its 25 years or longer productive life. How this is done is contained in the maintenance documents, but there is more to it than just producing a maintenance manual.
Figure 1. The Aircraft Maintenance Manual (AMM) for the Boeing 747, part of ICA for the 747. Source: Boeing.
Single or twin Aisle for cargo rich routes?
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By Vincent Valery
Introduction
Oct. 21, 2021, © Leeham News: LNA started the cargo-themed series by comparing factory and converted freighter aircraft performance. We followed with the comparison of cargo capacity for different passenger airliners with the same low number of passengers.
The latter showed that freight revenues alone could justify operating a larger variant despite lower passenger load factors. We now continue the cargo-themed series from a different angle.
Several countries, notably the United Kingdom, United States, and Singapore, re-opened quarantine-free travel for non-residents who received a COVID-19 vaccine. After more than 18 months of depressed passenger traffic, airlines are hopeful long-haul traffic will finally restart in earnest.
It will probably take a few more years until long-haul traffic fully recovers to pre-pandemic levels globally. With that in mind, airlines need to decide how to rebuild their long-haul networks gradually.
Launched a few months before the COVID-19 pandemic, the A321(X)LR seems an ideal aircraft to test the market before committing to larger aircraft. LNA has extensively written about the pre-COVID-19 long-haul market fragmentation with the smaller twin-aisle (A350 and 787) and higher-range single-aisle (737MAX and A321LR) aircraft.
However, is a long-range single-aisle aircraft always the best choice to rebuild a network when cargo prices are high? LNA will answer that question in the next part of the series.
Summary
- A pre-COVID19 fragmentation momentum;
- Pandemic turns long-haul business upside down;
- The appeal of long-range single-aisle aircraft assumes normal cargo prices;
- What a single-aisle airplane can’t provide.
Pontifications: Embraer’s strategy for the TPNG
By Scott Hamilton
Oct. 18, 2021, © Leeham News: It was October 2015 when Bjorn Fehrm and I first went to Sao Jose de Campos to visit Embraer’s headquarters. Among the topics discussed then was the prospect of developing a new turboprop airliner. The E2 program was well underway and one day, Embraer’s engineers would need something else to do.
At the time, officials weren’t enthusiastic about a turboprop. The cost to develop one was estimated to be about $2.5bn, about the same as the E2, they said. But the market was much smaller, only about 2,000-2,400 airplanes over 20 years.
Much has changed in six years. The E2 program is all but finished, with only the E175-E2 left. Periodic performance improvement packages will be developed. The proposed joint venture with Boeing, in which Embraer’s engineers were going to play a big role in two new airplane programs, is dead.
EcoAviation demands have risen to the forefront. Bombardier exited the Q400 turboprop business and the buyer, Longview Aviation Capital, “suspended” production during the COVID pandemic. Few believe it will be restarted. Airbus, which owns 50% of ATR, made hydrogen power a top priority. ATR may be the vehicle through which initial development is sold as a turboprop.
Air freight demand explosion: a long-term trend?
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By Judson Rollins
Introduction
October 18, 2021, © Leeham News: Much ink has been spilled over the surge in demand that has washed over every corner of the cargo world: air, sea, road, and rail.
Amazon Air’s first parcels being unloaded at Amazon.com’s new Cincinnati (US) sort hub. Source: Amazon.com.
Before the COVID-19 crisis, air transport was reserved primarily for items with high value and/or time sensitivity, such as laptop computers or express documents. And growing competition in the cargo market meant that average yield (revenue per ton-mile) was declining by more than 2% per year, according to past editions of Boeing’s World Air Cargo Forecast.
But now the cost of sea transport has exploded, shifting a significant chunk of cargo from ocean freighters to their airborne equivalents. This is driving some retailers to use air transport. Home Depot, an American home-improvement retailer, is resorting to air freight to bring in smaller, higher-value items like power tools that it needs to keep on the shelves at all times.
Even before COVID-19, a growing share of air freight has come from e-commerce — thereby shifting the volume-to-weight considerations relative to “traditional” freight.
Will these trends continue even beyond the COVID crisis? And what impact will it have on the market for factory-built freighters and passenger-to-freighter (P2F) conversions?
Summary
- Soaring sea freight yields mean small shipments are now more economic by air than sea.
- Volumetric capacity matters more than max gross weight.
- New freighter options will compete with a glut of conversion feedstock.
- Air freight yields will eventually revert to historical trendlines in most regions.
Bjorn’s Corner: The challenges of airliner development. Part 25. Safety monitoring and reporting
By Bjorn Fehrm, Henry Tam, and Andrew Telesca
October 15, 2021, ©. Leeham News: Last week, we introduced the activities around Continued Airworthiness that we have to do during development and flight testing of our aircraft.
As described, the majority of accidents for aircraft are attributed to failings in Continued Airworthiness and Operations rather than design. We listed Continued Operational Safety, Operational Preparedness, and Service Readiness as the three important areas for Continued Airworthiness.
We dive into Continued Operational Safety first, specifically Safety Monitoring and Reporting.
Figure 1. A graph showing how an OEM and FAA surveys the operation of an aircraft and takes action. Source: Boeing.
With high cargo prices, will airlines fly larger aircraft in their widebody fleets?
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By Bjorn Fehrm
Introduction
October 14, 2021, © Leeham News: Over the last weeks, we’ve seen that the present cargo crunch and high yields will influence what aircraft variants airlines purchase. Models that are too large passenger-wise for years to come will be paid for by a longer belly that can take more cargo.
This trend will remain as long as cargo prices are high. Will the high cargo yields also affect what aircraft to keep stored and which to fly of an existing fleet? We apply the analysis to an airline with a fleet of Boeing 777s.
Summary
- The increased yields for air cargo changes the fleet planning for the widebody fleet. The most suitable passenger models stay in the desert, and the longer siblings fly despite lower load factors.
The Regional Aircraft Fleet
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By Vincent Valery
Introduction
Oct. 11, 2021, © Leeham News: The regional aircraft market, defined as aircraft seating 100 or fewer passengers in standard configurations, has fewer OEM players than before.
Embraer’s E175-E2
The Bombardier CRJ, purchased by Mitsubishi Heavy Industries, ceased production earlier this year. De Havilland Canada will stop Q400 production later this year once it clears its backlog. Both programs might not start production again in the future.
The only latest-generation design, the E175-E2, does not have a single firm order. (There is a conditional order for 100 from the USA’s SkyWest Airlines.) MHI’s SpaceJet development has been “suspended,” but nobody believes it will be restarted.
Therefore, the only regional aircraft in production for the near future will be ATR’s 42 and 72 series, COMAC’s ARJ21, Embraer’s E175-E1, and UAC’s SSJ100.
The ARJ21 and SSJ100 are almost exclusively in service in their respective domestic markets. In practice, that leaves only the ATR42, ATR72, and E175-E1 as new regional aircraft in production for most operators from next year.
However, it is far from guaranteed that ATR and Embraer will enjoy near-monopoly status for the foreseeable future. Embraer has been pondering the launch of a turboprop program for years and is currently looking for an industrial partner.
One also must mention that potential jet fuel alternatives, notably hydrogen-powered aircraft, are likely to come to the regional market first. Therefore, the regional aircraft market could see some significant changes.
With the above in mind, LNA thought it relevant to look at the in-service regional aircraft, both for regional jets and turboprop aircraft.
Summary
- Segmenting the regional aircraft market;
- Regional jet and turboprop prevalence;
- Breakdown by OEM and operator region;
- Age of in-service fleet.
Pontifications: Biofuels, hydrogen, batteries are nice but far in the future. Solution exists now.
By Scott Hamilton
Oct. 11, 2021, © Leeham News: EcoAviation was the Number One topic at the Oct. 3-5 IATA AGM in Boston.
IATA, the International Air Transport Assn., set a number of lofty goals to remove carbon emissions from commercial aviation by 2050. Interim goals were also set.
Tim Clark, the president and COO of Emirates Airline, didn’t mince words about these goals.
“People are expecting us… by the end of this decade, to take out 40% of our emissions… We are in la la land if you think we are going to do this,” Flight Global reported.