Leeham News and Analysis
There's more to real news than a news release.
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.
Bjorn’s Corner: The challenges of hydrogen. Part 31. Wrap-up: Where we stand
By Bjorn Fehrm
April 2, 2021, ©. Leeham News: It’s time to wrap up our series on the hydrogen airliner alternative for Sustainable Commercial Aviation.
We review the status for sustainable aviation as of today, then look at the future next week.
Figure 1. The first certified electric aircraft, the Pipistrel Velis Electro. Source: Pipistrel.
The A350, Part 12 Wrap Up
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By Bjorn Fehrm and Vincent Valery
Introduction
Apr. 1, 2021, © Leeham News: After extensively discussing the A350 family and comparing it with its main competitors, it is now time to wrap up the series.
Summary
- Success after a few false starts;
- Equal share in the twin-aisle market within reach;
- Lineup strengths and weaknesses;
- Looking ahead.
HOTR: Compensation wins Southwest order for MAX
By the Leeham News Team
March 29, 2021, © Leeham News: Southwest Airlines today announced an order for 100 Boeing 737-7 MAXes.
The order was expected. The carrier also considered the Airbus A220-300. But any prospect of diverging from the 50-year relationship with Boeing was at best a crapshoot.
Despite the flowering language in the press release, the key reasons are buried.