Leeham News and Analysis
There's more to real news than a news release.
Bjorn’s Corner: The challenges of airliner development. Part 8. Transport category rulings.
By Bjorn Fehrm, Henry Tam, and Andrew Telesca
June 18, 2021, ©. Leeham News: We continue our discussion about the Transport Category (FAA Part 25) certification rules.
Last week we talked about how much tougher the birdstrike protection is for Part 25. Now we look at the fuel tanks and the inherent explosion risk in these.
Figure 1. The Boeing 747-100 N93119 that flew TWA flight 800. Source: Wikipedia.
Freighter conversion will absorb some excess widebody supply – but not all
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By Judson Rollins
Introduction
June 17, 2021, © Leeham News: A key question hanging over the used widebody market is what percentage of available aircraft could be converted into freighters.
Indeed, existing passenger-to-freighter (P2F) conversion providers are ramping up capacity and new ones are coming online. However, much of the P2F capacity growth is focused on converting used 737s and A320-family aircraft.
Airbus and Boeing foresee a market for 1,500-1,600 conversions over the next 20 years. While Boeing doesn’t break out its forecast between single-aisle and widebody aircraft, Airbus believes 670 of these will be widebodies.
Conversion work at Israel’s IAI on the first 777-300ER P2F. Source: IAI via Cargo Facts.
In this analysis, LNA explores the size of the market, key providers, conversion capacity, and likely buyers of converted aircraft.
Summary
- Nearly 2,000 widebodies are in storage or coming off lease by 2030.
- New-build freighters will go to more established operators, while P2Fs are preferred by operators wishing to minimize capital costs.
- At current production rates, up to 400 widebodies could be converted by 2030.
- Early-production 787s, A350s are less likely to be converted.
Airbus Commercial Programs update
By Bjorn Fehrm
June 15, 2021, ©. Leeham News: Airbus hosted an update on the Pandemic effects on its airliner business today.
It presented its view of the pandemic’s effects overall, how it affected the different aircraft programs, and how Airbus predicts the recovery ramp to look.
Figure 1. The loss of 25 years of growth in Air Transport due to COVID 19. Source: Airbus.
CFM announces the RISE engine program
June 14, 2021, © Leeham News: GE and SAFRAN took to the stage today to announce the extension of their CFM joint venture to 2050 and the CFM technology program RISE.
RISE stands for Revolutionary Innovation for Sustainable Engines, and it elevates previous work to new levels and introduces some news.
Figure 1. The RISE Open Rotor engine as presented by CFM. Source: CFM.
Airbus program update tomorrow: what will officials reveal?
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By Scott Hamilton
Introduction
June 14, 2021, © Leeham News: Airbus will provide a commercial program update tomorrow in Toulouse.
Will the Next Boeing Airplane be like the 757 with a composite new wing and new engines? Boeing photo.
But will officials announce Authority to Offer (ATO) an A350 freighter for sale?
Will they formally acknowledge development of an “A322”?
There is a plethora of articles, including LNA, in recent weeks discussed the prospect of Airbus launching an A350F this year. Potential customers have seen presentations from Airbus. Boeing’s overwhelming dominance in freighters is under threat.
If Airbus announces ATO tomorrow, Boeing may be forced to take its 777-8F concept out of mothballs. Boeing suspended development of the 777-8 and -8F during the 737 MAX and pandemic crises.
Then there is the prospect of the long-talked about “A322.”
This airplane, if launched, will have a new composite wing, more powerful engines and up to 24 more passengers. The wing is called the Wing of Tomorrow and has been under development for years.
If Airbus launches the A322, which also has a working name of A321 Plus Plus, Boeing will find it very tough to build a business case for its Next Boeing Airplane (NBA). The most recent iteration seems to be basically a reinvention of the 757-200/300: a metallic fuselage with a composite wing and new engines.
Summary
- Airbus now has the leadership role held by Boeing for decades, says the industry’s most influential executive.
- What does the Next Boeing Airplane look like?
- Airbus thinks it can match the NBA with an A322 for a lot less money to the customer.
- But will airlines want a 2025 technology or be satisfied with a makeover for an Airbus with roots in 1980s technology?
Boeing’s CEO says the next airplane won’t be a response to just the Airbus A321XLR. Airbus photo.
Pontification: It’s time to replace the 737, says industry leader
By Scott Hamilton
June 14, 2021, © Leeham News: One of commercial aviation’s most influential leaders said last week Boeing needs to replace the 737 with a new technology airplane.
Steven Udvar-Hazy, chairman of Air Lease Corp., said in a CNBC interview June 9 the 737 is a good airplane, but the time has come for a replacement.
“Boeing has to look at the future. What kind of airplanes that airlines will need with all the environmental challenges, regulatory challenges? What is the airplane type airlines will need 5, 10, 15, 20 years from now?” Hazy said.
“Boeing needs to invest. The 737 is a wonderful airplane, but it’s been in operation since 1967. We have an airplane that its basic design has been around for 54 years. It’s time for a new technology airplane that will give airlines and the public greater efficiency, better economics, better environmental footprint so the airlines can make money with it and yet meet the challenges that we’re facing on the environmental front.”
Bjorn’s Corner: The challenges of airliner development. Part 7. Transport Category Aircraft
By Bjorn Fehrm, Henry Tam, and Andrew Telesca
June 11, 2021, ©. Leeham News: Last week, we scaled a nine-seat aircraft to a 19-seat aircraft and examined some of the pros and cons of such a change. The aircraft are certified to the 14 CFR Part 23 rules in the US, labeled “Normal Category Aircraft“.
This week we scale the aircraft up one step further to understand product certification and operation rules for the larger Transport Category Aircraft (14 CFR Part 25) class.
The Bombardier Global 7500 is a Transport Category Aircraft (Part 25) as its gross weight is over 19,000lb. Source: Bombardier.
Cheap aluminum widebodies may finally enable long-haul LCC profitability
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By Judson Rollins
Introduction
June 10, 2021, © Leeham News: Residual values and lease rates have plummeted to record lows for previous-generation widebodies like the A330, 767, and 777. Inventories continue to build around the world, and prices appear set to fall even further.
At the same time, business travel ground to a near-halt in most regions. Even in countries where domestic leisure travel rebounded, like the US or China, average fares are down 20%-40%.
Southwest Airlines describes itself as a “low-fare carrier.” With business and premium-cabin traffic expected to take 3-4 years to return and be permanently impaired to some extent, every airline may be a low-fare carrier for years to come.
With higher-density seat configurations, more flexible scheduling – and, most importantly, the lower capital costs of used aircraft – new low-cost carriers (LCCs) could break even on long-haul routes with materially lower revenue than their predecessors.
This confluence of events has created a once-in-a-generation, perhaps once-in-a-lifetime, opportunity for new airlines to achieve a sustainable cost advantage over legacy carriers weighed down by capital-intensive aircraft, expensive crew contracts, and record-high debt service costs.
Summary
- Previous long-haul LCC startups failed due to insufficient capital, overextended operations, fares too low to cover costs.
- Ultra-low lease rates make used A330s cheaper to fly than new-technology aircraft.
- Lower costs, surgical route selection level the long-haul playing field.
- Legacy hub-and-spoke model will be weakened by “overflight” routes.
- Low capital costs mean used airplanes need only be flown when demand warrants.
Podcast: 10 Minutes About the United-Boom SST agreement
June 8, 2021, © Leeham News: United Airlines and the start-up company, Boom, last week announced an agreement by which UAL will acquire up to 50 Boom Overture SSTs.
T
here are some conditions Boom must meet before United will accept any airplanes. Furthermore, Boom must raise a lot of money to complete development.
In today’s episode of 10 Minutes About, LNA discusses the commercial agreement and just a few of the issues facing development of the Overture.
Related articles:
- Will Boom succeed where Concord failed?
- Is Boom good business for Virgin Atlantic?
- The Boom SST engine problem, Part 1
- The Boom SST engine problem, Part 2
- The Boom SST engine problem, Part 3
- The Boom SST engine problem, Part 4
- The Boom SST engine challenges, summary
- 15-Part Series on the proposed Supersonic revival
The impact of higher inflation on OEMs and Airlines
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By Vincent Valery
Introduction
June 7, 2021, © Leeham News: As the world economy recovers from its sharpest shock since World War II, an unwelcome side effect started appearing: higher inflation rates.
One Hundred Trillion Zimbabwean Dollars Note, issued during a period of hyperinflation in the country
The Consumer Price Index (CPI) in the USA increased by 4.2% year-over-year in April 2021. The leading causes of the increase are higher commodity prices and worker and material shortages in the US economy.
Aside from temporary commodity-induced spikes, inflation rates have stayed moderate over the last 30 years. However, numerous countries (including the USA and Europe) experienced persistently high inflation rates throughout the 1970s and early 1980s.
It is premature to say whether the latest spike is temporary or will persist. Should the latter happen, it would have profound consequences for the commercial aviation ecosystem. LNA analyzes the potential implications for OEMs, airlines, and lessors of such a scenario.
Summary
- Inflation 101;
- Winners and losers in high inflation environments;
- Consequences for OEMs;
- Impact on airlines and lessors.