Leeham News and Analysis
There's more to real news than a news release.
Merry Christmas and Happy New Year
Barring breaking news of importance, your LNA team is taking the holidays off. LNA resumes Jan. 3.
“Air Wars” tops Puget Sound Business Journal Christmas List of Books
Air Wars is available here.
Dec. 24, 2021, (c) Leeham News: The those late shoppers looking for last-minute gifts, the Puget Sound Business Journal (Seattle area) on Tuesday listed 11 aerospace books for the aviation geeks. Air Wars, The Global Combat Between Airbus and Boeing was at the top of the list. Air Wars is by LNA’s Scott Hamilton. It was published in August.
Christmas may be almost over, but the PSBJ gives plenty of options for post-holiday reading nevertheless.
“Air Wars” makes Top 10 book list of Royal Aeronautical Society
Dec. 22, 2021, © Leeham News: Air Wars, The Global Combat Between Airbus and Boeing, by LNA’s Scott Hamilton, yesterday was placed on the Top 10 Aerospace book choices for Christmas 2021 by the Royal Aeronautical Society. The Society is one of the world’s most prestigious aerospace organizations.
While second in the listing, the Society doesn’t rank the books.
Air Wars is currently rated No. 1 of the 15 Best New Aerospace eBooks To Read In 2022 by Book Authority.
The book is available here.
P&W, Embraer pause E175-E2 engine; MTU writes off investment, sees no revenue in future for SpaceJet engine
By Scott Hamilton
Exclusive: Dec. 21, 2021, © Leeham News: Pratt & Whitney and Embraer agreed to suspend further development and production of the PW1700G for three years, LNA learned.
Another airplane without an engine.
PW and Embraer did not respond to inquiries. Separately, the aerospace company MTU reported earlier this year that it wrote off its entire investment in the PW1200G and expects no revenue from the program in the future.
Update: P&W provided this statement Dec. 22: “As already informed to the market, Embraer and P&W are evaluating E175-E2 program timing given market conditions and scope clause.“
The engine was developed for the Mitsubishi MRJ. Development of the MRJ90 and follow-on MRJ70 were refined to the M100 SpaceJet when analysis concluded the MRJ90 wasn’t economically competitive with the E190-E2. A myriad of technical flaws also was discovered in the flight test vehicles that rendered the original design uncertifiable.
Mitsubishi Heavy Industries indefinitely suspended the SpaceJet program in 2020. Embraer rescheduled the entry-into-service of the E175-E2 from 2021 twice, now targeting EIS for 2025. This depends on US pilot unions relaxing an airplane weight restriction in the labor contracts. The E175-E2 weight exceeds that allowed in the contracts.
HOTR: Restarting M100 SpaceJet program is a very, very long runway
By the Leeham News Team
Dec. 21, 2021, © Leeham News: Speculation that Mitsubishi Heavy Industries (MHI) may restart the M100 SpaceJet program seems
unrealistic.
The consulting firm Avascent on Dec. 8 reported that MHI and the Japanese government may complete the M90 SpaceJet (formerly the MRJ90) airplanes. This could lead to restarting the M100 SpaceJet.
LNA believes the former might happen. It doubts the latter will. Here’s why.
Forecast 2022: Boeing hopes for the best on pandemic, 787, MAX
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By Scott Hamilton
Introduction
Dec. 20, 2021, © Leeham News: To say that last two years have been challenging for Boeing is an understatement.
But for the first time in a long time, officials appear optimistic that the worst is behind them. This is not to say that 2022 will be a cakewalk.
- Boeing is slowly clearing the inventory of 450 737 MAXes produced during the grounding. New airplane production rates are slowing ramping up.
- China’s recertification of the MAX appears around the corner.
- Deliveries of the 787 to restart in a few months.
- Widebody recovery still a challenge.
Pontifications: EADS went ahead with tanker bid despite long odds against winning
Third in a Series
By Scott Hamilton
Dec. 20, 2021, © Leeham News: When EADS, then the name of the parent of Airbus, decided to go it alone and bid for the US Air Force contract for the KC-X aerial refueling tanker, officials knew it was an uphill battle.
Despite winning the contract in Round Two, with Northrop Grumman as the lead, the parameters of the competition changed. No longer would the A330-200-based tanker get credit for its greater capabilities that won it the contract in Round Two. Now, the ancient Boeing KC-135 was the baseline to meet. Any bidders—Boeing and EADS—would receive only a pass-fail rating for meeting the baseline.
If the bid price was within 1% of each other, then EADS would receive credit for the extra capacity afforded the A330 tanker over Boeing’s KC-767 offer.
The pass-fail approach caused Northrop to take one look at decide to withdraw from the competition. EADS officials made the decision to proceed anyway, knowing now that winning was unlikely.
Bjorn’s Corner: The challenges of airliner development. Part 34. Wrap-up.
By Bjorn Fehrm, Henry Tam, and Andrew Telesca.
December 17, 2021, ©. Leeham News: As we wrap up the series where we look at the monumental work you have to do to get a new aircraft type certified, we will discuss how we need several aircraft variants, addressing different markets, if we shall survive as an aircraft manufacturer.
All successful aircraft manufacturers produce and market a family of aircraft. If you stay with only one variant, you will find it hard to keep good people as the development work ends.
Figure 1. Beech 1900, a 19 seater aircraft developed from the Super King Air 200 with 9 seats. Source: Textron Aviation.
HOTR: Dropping Embraer comes back to bite Boeing
By the Leeham News Staff
Updated with details of Air France – KLM order
Dec. 16, 2021, © Leeham News: When Boeing decided to drop its joint venture plan with Embraer, there were good business reasons to do so.
The grounding of the 737 MAX was dragging on much longer than anyone ever expected, and there was no end in sight. The coronavirus infections exploded into a global pandemic the month before. Air transportation plunged as much as 95%. Airlines were grounding fleets and some, at that 
point, looked certain to go bankrupt or go out of business. Boeing was bleeding cash and debt exploded by more than $20bn. The company was in survival mode.
Embraer faced the same industrial and customer challenges Boeing did. And while none of its airplanes were grounded, the E175-E2 turned out to be an airplane with no customers because the US market for which it was designed disappeared. Restrictions in pilot contracts limiting the weight of airlines in regional operations killed the airplane.
Finally, Embraer’s market value at the time the joint venture was agreed was set at $4.5bn. By April 2020, it had fallen to $1.25bn. Given the business environment and the drop in value, why pay the higher price?
With Qantas Airways abandoning Boeing, we now know why going through with the deal may have been smart.
One A380 departure of two 777-200ER alternatively 787-9? Part 3.
Subscription Required
By Bjorn Fehrm
Introduction
December 16, 2021, © Leeham News: Last week, we discussed the economics for an airline that dispatches one A380 instead of two smaller widebodies on a trunk route with heavy traffic.
Our example modeled British Airways, which uses the A380 on its highest volume Heathrow departures. Now we finish the series by going deeper into the analysis, examining all cost and revenue aspects, including looking at slot values on congested airports.
Summary
- The ultimate decision to fly one departure or two per departure wave on slot-constrained airports is the value of using one slot or two to transport x passengers on an airport like London Heathrow.
- We develop the revenue and costs factors and discuss the airline’s intangible values around this dilemma.