Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing’s 737 North Line and the Everett factory: in transition now June 9, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 25. June 6, 2025
- New RISE powerplant benefits from decades of GE research and development June 5, 2025
- Engine makers emphasizing durability, reliability June 4, 2025
- Boeing CEO: Lessons learned are key to certification of 737-7/10 and 777X June 2, 2025
Bjorn’s Corner: The challenges of hydrogen. Part 33. Wrap-up: The Eco-system
By Bjorn Fehrm
April 16, 2021, ©. Leeham News: Last week, we wrapped up the operational part of sustainable air transport using hydrogen as an energy source.
Now we look at where we are with the all-important Eco-system. It has many moving parts and risks a chicken and egg stalemate.
Figure 1. The prospective conversion of the European gas pipeline network to hydrogen. Source: EU.
Aviation Writers Bloc: Calhoun’s Countdown
April 15, 2021, © Leeham News: Boeing CEO David Calhoun turns 64 on April 18. This means he is in his final year on Boeing’s Board of Directors and as an employee, unless the Board extends his contract beyond the mandatory retirement age of 65.
In a new feature, the Aviation Writers Bloc, LNA’s panel discusses Calhoun’s legacy, whether he’ll launch a new airplane program and whether Boeing Commercial Airplanes will remain headquartered in Puget Sound.
Investors’ bull case on aircraft OEMs has gaps
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By Judson Rollins
Introduction
April 15, 2021, © Leeham News: Late last month, the aerospace and defense analysis team at Credit Suisse (CS) published its view on the future of the Airbus-Boeing duopoly, as well as an introduction to COMAC’s market position and future.
CS’s main thesis struck a decidedly upbeat note: “As a result of excess retirements due to [COVID-19], significant [sustainability investor] pressure on decarbonization, and the appeal of new warrantied aircraft, we might actually expect a period of solid new aircraft demand in a year or two.”
In terms of specific manufacturers, the team was unsurprisingly more bullish on Airbus than Boeing. They cited Airbus’s “strong market positions in narrowbodies” and their expectation that Boeing’s “recovery will be encumbered by the realities of its product portfolio.” CS did see room for longer-term optimism on Boeing, arguing that while spend on new product development “would pressure numbers this decade, it could also shift the competitive pendulum back … helping anchor a higher terminal [share] value.”
However, CS’s view seems to be more optimistic than that reflected in the two manufacturers’ equity prices. Airbus and Boeing shares are down 23% and 26% from their respective early-2020 highs.
A deeper look into their analysis raises several questions about the future trajectory for commercial aircraft sales.
Summary
- Aircraft retirements aren’t the overreaction they appear to be.
- Sustainability is already a priority for airlines and manufacturers; new regulations will only dampen commercial aircraft demand.
- The appeal of new aircraft, while boosted by low interest rates, must be balanced against the wide availability of used ones.
- A slow recovery in business travel will dampen yields, crimping investment in new aircraft.
Today’s 737 MAX, A320neo values vs 2019
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By Scott Hamilton
Introduction
April 12, 2021, © Leeham News: The Boeing 737 MAX reentered service in December after a 20 month grounding.
Determining values post-grounding and during the COVID-19 pandemic was complicated. The question over values is further confused by steep discounts given by Boeing as part of its need to compensate customers for the grounding.
There have been few “free market” MAX transactions to establish a solid current market value (CMV). The appraisal firm Aviation Specialists Group (ASG) last week issued its April Guide, listing values of virtually every jet airplane in service—and some that aren’t, yet. (ASG lists the Boeing 737-10 MAX, which is not even in flight testing, but not the 737-7 MAX, which was the lead test airplane for recertification.)
Summary
- MAX values this month compared with April 2019 are double-digit lower on a percentage basis, except for the MAX 10.
- A320neo values softened in the pandemic environment, but are better than the MAX.
- A321neo values went up slightly last month compared with 2019.
Pontifications: More of the same expected at Boeing’s annual meeting
By Scott Hamilton
April 12, 2021, © Leeham News: Boeing’s annual shareholders’ meeting is April 20.
The entire Board of Directors is up for election. Boeing sets terms for one year. In theory, this prevents entrenchment. In Boeing’s case, Board members historically are reelected year after year after year.
There are several members who were appointed after the 737 MAX crisis. Still, there are major gaps in the Board’s makeup.
Bjorn’s Corner: The challenges of hydrogen. Part 32. Wrap-up: Going forward
By Bjorn Fehrm
April 9, 2021, ©. Leeham News: Last week we made a summary of the history of initiatives for sustainable aviation, now we look at the likely developments over the next 10 years.
What is the likely development for different classes of airliners and what technologies will be popular?
Analyzing the trades between a single- and twin-aisle NMA
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By the Leeham News Team
Introduction
April 8, 2021, © Leeham News: Some people believe Boeing should launch a new single-aisle airplane about the size of the 757-200/300 to compete with the Airbus 321neo.
Others believe the new airplane should be a twin-aisle aircraft. A few, including LNA, believe the new airplane must be a three-member family and must be a twin-aisle.
The largest member of a single-aisle Boeing NMA would be longer than the Boeing 757-300. Photo: Delta Air Lines.
Whatever the new airplane is, the general specifications are aircraft up to 250 passengers in two classes and a range of up to 5,000nm.
There is also agreement the airplane must start across from the A321neo. Configurations vary widely, but 190-200 seats in two classes are common.
Boeing CEO David Calhoun said on an earnings call that the next new airplane will compete with the A321 and cover the Middle of the Market.
Summary
- A single-aisle, 250-passenger airplane would be longer than the 757-300.
- Technical build challenges, while not insurmountable, exist with long, thin airplane.
- Gate and ramp space constraints accompany a long airplane.
- Other trades exist for a twin-aisle design.
Boeing’s freighter dominance threatened
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By Scott Hamilton
April 6, 2021, © Leeham News: As if Boeing didn’t have enough challenges these days, its near-exclusive dominance for new-build freighter may be threatened.
Boeing continues to see the 767-300ERF, which proved to be a popular freighter. Photo: FedEx.
Airbus is showing airlines and lessors a freight version of the A350 that is midway in length between the -900 and -1000 passenger versions. If enough orders are lined up—50 is said to be the magic number—Airbus could launch the program as early as this year.
Reuters first reported the effort.
But the Airbus threat isn’t the only one to Boeing’s decades’ long leadership in new-build freighters.
International regulations that take effect in 2027 mean the 777-200LRF and 767-300ERF that Boeing builds today can no longer be produced from 2027. The two aircraft won’t meet new, strict noise and emissions regulations. The engine designs and technology on the 777F date to the 1990s. Those on the 767s date to the 1980s.
The 777-8F was to be Boeing’s next generation freighter. However, program delays, financial pressures, and certification challenges cast doubts whether the -8F will be launched.
Diverging financial fortunes for Airlines and Lessors
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By Vincent Valery
Introduction
Air Lease Corporation A321 XLR Rendering Credit: Airbus
April 5, 2021, © Leeham News: Most airlines and lessors that publish their financial results publicly have done so for 2020. The COVID-19 pandemic harmed all stakeholders’ financials in the commercial aviation industry. However, the impact varies significantly from one group to another. There are also significant differences between companies within a group.
LNA collected financial information on airlines and lessors to assess the pandemic’s economic damage. The differences in financial impact have altered the balance of power within the commercial aviation ecosystem. The varying fortunes will impact each stakeholder’s say in current and future aircraft programs.
Summary
- A financial bloodbath for airlines;
- Financial outliers;
- Lessors mostly ok for now;
- Impact on future OEM programs.
Pontifications: Southwest didn’t invite Airbus to bid
By Scott Hamilton
April 5, 2021, © Leeham News: Southwest Airlines didn’t ask Airbus to submit a commercial bid for the A220-300, three knowledgeable sources tell Leeham News.
Southwest conducted an internal technical analysis of the A220-300 vs. the 737-7 MAX. The A220-300 offered better economics. But this competed against the costs of retaining a common 737 fleet.
“Southwest acknowledged the merits of the A220, but there was no competition” for a commercially-based bid, LNA is told.
The airline placed an order on March 29 for 100 737-7s. Southwest said the order was an outgrowth of talks with Boeing for compensation due to the 20-month grounding of the MAX.