Leeham News and Analysis
There's more to real news than a news release.
Key Airbus, Boeing supplier sees recovery in 2022
By Scott Hamilton
Oct. 28, 2020, © Leeham News: A key supplier to Airbus and Boeing believes there will be a “significant upturn” in passenger traffic and aircraft demand in 2022, well before consensus.
Hexcel provides composites and other materials for the Airbus A320 and A350 and Boeing 737 MAX.
And Raytheon Technologies sees passenger traffic returning to pre-COVID levels in 2023, depending on widespread use of vaccines.
Consensus is a return to pre-COVID levels in 2024.
In its 3Q2020 earnings press release Oct. 20, Hexcel’s CEO, Nick Stanage said, “The overall long-term demand for aircraft and our advanced composites technology remains robust, and the potential for a significant upturn in 2022 and beyond looks positive.”
The actions we are taking will ensure that Hexcel emerges from the effects of this pandemic stronger than ever. As we do, our liquidity will have been strengthened, our cost structure will be reset, and we will be well positioned to deliver strong shareholder returns.”
Quizzed on the earnings call, Stanage elaborated:
HOTR: With MAX nearing recertification, Boeing has bigger problem
By the Leeham News team
Oct. 27, 2020, © Leeham News: Boeing’s 737 MAX may be nearing recertification and airlines worry about passenger acceptance.
But Boeing’s larger MAX problem is its general product line-up.
LNA pointed out the poor sales of the 7 MAX in the past. We’ve also compared the lagging sales of the 9 MAX and 10 MAX compared with the A321neo.
As a result of the MAX grounding and now COVID-19’s disastrous financial impact on airlines around the world, more than 1,000 orders have been canceled or reclassified as iffy under the ASC 606 accounting rule.
Airbus doesn’t publicly reclassify the European equivalent of ASC 606. But LNA in July estimated how many A320s would be similarly classified. At that time, about 425 appeared to be similarly subject to ASC 606 if this accounting rule was applied to Airbus.
Public data doesn’t support Airbus A320 production rate hike
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Introduction
By Scott Hamilton
Oct. 26, 2020, © Leeham News: Airbus’ 3Q2020 earnings call is Wednesday. News emerged last week the OEM is notifying supplies that they should be prepared to increase production of the A320 from 40/mo to 47/mo in the second half of next year.
It is worthwhile looking at the delivery skyline as it currently exists.
Summary
- Forecasted delivery stream doesn’t support rat 47/mo until 2024.
- Airbus appears to be banking on faster recovery from COVID—or
- Picking up market share from Boeing.
Pontifications: Earnings previews Airbus, Boeing; Watching Mitsubishi
By Scott Hamilton
Oct. 26, 2020, © Leeham News: It’s earnings call week for Boeing and Airbus.
And Mitsubishi Heavy Industries is said to plan an announcement “freezing” development of the SpaceJet.
Let’s preview these events.
Bjorn’s Corner: The challenges of Hydrogen. Part 12. Safety
By Bjorn Fehrm
October 23, 2020, ©. Leeham News: In our series on Hydrogen as an energy store for airliners we look deeper at the safety of a hydrogen airliner.
Do the safety rules for the aircraft or the airport need to be written new or can the existing ones be used with changes?
Enhancing the Dreamliner, Part 3: 787-9
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By Vincent Valery
Introduction
Oct. 22, 2020, © Leeham News: After analyzing the 787-8, we now turn our attention to the following Dreamliner variant that entered into service, the -9.
Summary
- Lessons learned from 787-8 mishaps;
- A resounding commercial success;
- Some in-service drawbacks;
- Competition limits pricing power;
- An ultra-long-haul route.
Twin Aisle Deliveries: The Good, the Bad, and the Ugly
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By Vincent Valery
Introduction
Oct. 19, 2020, © Leeham News: LNA published last week an update on the latest 737 MAX production and delivery plans. This week, we turn our attention to the twin-aisle programs at Airbus and Boeing.
Both OEMs announced significant monthly production rate reductions earlier this year: the Dreamliner will go to six next year. The Airbus A350 is at five per month, while the A330 and Boeing 777 are at two. Airbus and Boeing will publish their third-quarter earnings later this month, which could include updated production rates.
LNA investigates the implications of the updated production and delivery plans for twin-aisle programs at Airbus and Boeing.
Summary
- Two programs in acceptable shape;
- Awaiting an elusive return to favor later this decade;
- A lack of healthy customers make the situation critical;
- Summing it all up with one metric.
Pontifications; Does the pandemic change the airliner market dynamics?
By Bjorn Fehrm
October 19, 2020, ©. Leeham News: Airbus and Boeing have dominated the world’s airliner market over the last 30 years. In the next 30 years, will this change?
Before the COVID-19 pandemic, the answer was no. The only viable competitor, the Chinese aircraft industry, would need more time to catch up. But the pandemic has changed the dynamics in the world.
For China COVID-19 is history. For the rest of the World not. China’s society and most noteworthy its travel industry are back to normal. September’s domestic flights were 103.5% of 2019 levels and passenger numbers were at 98% while the rest of the world is busy throttling back network plans from already low levels. We know that airlines in China are stimulating traffic with discounted fares, taking losses in the process. However, they have the backing of the government and it is traffic that ultimately drives demand for aircraft.
The Chinese system handles the crisis magnitudes better than the free world. Will the newfound Chinese self-confidence spread to bootstrapping the in-house air transport industry even further to capture the increased airliner demand?
Bjorn’s Corner: Do I get COVID in airline cabins? Part 13. DOD tests confirm OEM results.
By Bjorn Fehrm
October 15, 2020, ©. Leeham News: Yesterday the USTRANSCOM and its US Air Force Air Mobility Command (AMC) published the results of extensive airliner COVID infection risk tests. The tests, which were made to check the risks for DOD personnel using commercial flights, were made on United 777-200 and 767-300 aircraft in cooperation with United.
The tests checked aerosol dispersion of the virus in the cabins for both simulated flights and real flights. The result was you need to sit next to an infectious person for 54 hours to inhale a viral load that could make you sick (worst case).
Figure 1. DOD tests in the cabin of United aircraft. Source: DOD.
Enhancing the Dreamliner, Part 2: The 787-8 analyzed
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By Bjorn Fehrm
Introduction
October 15, 2020, © Leeham News: We look deeper at the 787-8, the smallest member of the Dreamliner family. After selling well initially, it has fallen out of favor with the airlines.
We analyze why by comparing it with its more successful sister, the 787-9. The 787-8 and -9 were conceived together, with the -8 as the first birth to be quickly followed by a longer version, the 787-9.
With the troubles of the program, it took three years before the longer 787 was ready. By then it was in many ways a different aircraft than the 787-8.
Summary
- The 787-8, as the first aircraft in the 787 Dreamliner series had to crack the brunt of the program’s many problems.
- As a result, it ended up with first try solutions in many areas where the latter 787-9 could gain from the experience and use improved designs.
- We analyze what this means for the economy for the 787-8, both from an operational and manufacturing standpoint.