Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Little known, most unknown in Air India 171 crash June 13, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 26. June 13, 2025
- Airbus forecasts that almost three times more aircraft needs to be produced by year 2044 June 12, 2025
- Paris Air Show preview: Don’t look for big news June 11, 2025
- P&W: the troubled GTF will be the best engine for the next single-aisle airplane June 11, 2025
Twin-aisle leasing market challenges
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By Vincent Valery
Introduction
Sep. 7, 2020, © Leeham News: The timeline for a passenger traffic recovery remains uncertain. The IATA does not expect passenger traffic to return to pre-COVID-19 levels until 2024. Leeham Co. predicts that it will take four to eight years before traffic returns to pre-COVID-19 levels.
Long-haul markets, where airlines almost exclusively operate twin-aisle aircraft, witnessed the sharpest drop in passenger traffic. As outlined in a previous article, airlines already retired significant numbers of older aircraft. Due to lingering travel restrictions, those markets should be the slowest to recover to pre-pandemic levels.
Ishka, the UK-based appraisal company, outlined the sharp drop in aircraft lease and purchase prices since the beginning of the pandemic. Unsurprisingly, twin-aisle aircraft are among the worst affected. There are virtually no takers for second-hand widebody passenger aircraft now.
Separately, Airbus and Boeing decreased their passenger twin-aisle production rates from a combined 28 to 15 per month from next year: 787 at six, A350 at five, 777 and A330 at two each.
Given the extent and expected duration of the drop in long-haul passenger traffic, LNA analyzes the factors that will influence leasing rates in the twin-aisle market this decade.
Summary
- Current in-service widebody fleet;
- Lease expiration timelines;
- Some models more exposed than others;
- The rationale for current twin-aisle production rates;
- Major factors outside airlines’ and lessor’s control.
Pontifications: Boeing in Washington: Here We Go Again
By Bryan Corliss
Sept. 7, 2020, © Leeham News: Stop me if you’ve heard this one: the pundits are saying Boeing is going to leave Puget Sound, leaving behind the hollow husk of a company doomed to wither and die on the vine.
Bryan Corliss
Just like they did in 2003, in 2009, in 2013 and 2016.
Seattle-area political economist and author T.M. Sell, in fact, traces the company’s first threat to leave clear back to the 1920s, when company executives got into a fight with the Seattle City Council over building new roads to connect downtown with the airport we now call Boeing Field.
Boeing said it would pack up and move to southern California, if Seattle didn’t cooperate.
“Like rain in winter, this is a regular feature of the Puget Sound emotional landscape,” Sell opined back in 2009.
Bjorn’s Corner: The challenges of Hydrogen. Part 7. The fuel system.
September 4, 2020, ©. Leeham News: In our series on Hydrogen as an energy store for airliners we look at the rest of the fuel system after we looked at the hydrogen tanks over the last weeks.
The cryogenic state of the liquid hydrogen (cryogenic=very low temperatures, -253°C) creates some new challenges when designing the fuel system.
Figure 1. The Tu-155 Hydrogen research aircraft with its aft fuselage tank and fuel system. Source: Tupolev.
Airbus integrates the last pieces of the CSeries from Bombardier
September 3, 2020, © Leeham News: Airbus and its subsidiary Satair announced today it has integrated one of the last pieces of Bombardier’s engagement with the A220, the spare parts distribution.
Airbus acquired Bombardier’s part of the A220 aircraft program in January, but Bombardier continued to purchase, stock, sell and distribute the A220 spare parts. From the 1st of July, this is handled by Satair, part of the Airbus group, to give airlines with Airbus aircraft a single point of contact for spares part services.
Sunset of the Quads, Part 5
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By Vincent Valery
Introduction
Sep. 3rd, 2020, © Leeham News: Last week, we compared the economics of the A340-300 and the 777-200ER on the Paris to San Francisco route. We now turn our attention to Airbus’ larger long-range aircraft, the A340-600.
Credit: Virgin Atlantic Airways
The 30% larger A340-600 was developed in the last year of the 1990s to compete with Boeing’s 777-300ER, then in development.
Summary
- Offering airlines a full product suite;
- A340-600 launch and development;
- Quad vs. twin-engine long-range operations;
- Disappointing commercial performance;
- A long-haul trunk route.
Boeing seeks to cut production costs of 787-8 to boost sales
By Scott Hamilton
Sept. 2, 2020, © Leeham News: Boeing is considering production changes to the slow-selling 787-8 to lower costs and boost sales.
The effort comes at a time when global passenger traffic is at record lows and recovery of international traffic is forecast to take four or five years.
Boeing photo.
As airline traffic recovers, carriers appear to be favoring smaller aircraft in restarting suspended routes.
In recent years, Boeing discouraged sales of the 787-8 because it is a low margin airplane with high production costs. This is a legacy of the program and development difficulties from 2004-2011, when it finally entered service.
The 787-9 and 787-10 are high margin aircraft Boeing counted on to reduce the billions of dollars in deferred production and tooling costs. At one time, this exceeded $32bn.
The early program difficulties resulted in the production and parts of the -8 to be substantially different than the -9/10, which have 95% commonality. The -8 was only 30% common.
HOTR: Five more airlines under court restructuring or ceasing operations
By the Leeham News Staff
Aug. 31, 2020, © Leeham News: The Smartwings Group is the latest airline to file for a court restructuring.
LNA’s monthly tracking of failed carriers adds Virgin Atlantic, EasyFly, Go2Sky, ExpressJet, and the Smartwings Group to the list of carriers in bankruptcy or court-supervised restructuring since COVID collapsed the global airline industry beginning in mid-March.
Among those five, Go2Sky and ExpressJet announced that they would cease operations. Virgin Atlantic won the support of its creditor for a court-supervised restructuring.
European Regionals Face Hostile Operating Environment
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By Kathryn B. Creedy
Third in a Series. Previous articles:
- The future of regional jets is limited by choices, Scope Clause
- US Regional Consolidation Began Before Covid
Introduction
Aug. 31, 2020, (c) Leeham News: European regionals face far greater challenges than Covid and, sadly, much of what is happening to the industry is beyond its control. The result is similar to failures seen in the U.S. Flybe’s recent loss resulted from pre-Covid problems which also led to the pre-Covid failures of such airlines as Flybmi and Cobalt.
The failures illustrate, however, the three reasons why European regionals are so fragile – low-cost competition, geography, and challenging government policy.
Flybe is just the latest of many regionals to cease operations owing to harsh conditions in Europe.
Summary
- Government Policies Hardest on Regionals
- LCC Competition Challenging
- Consumer Protections Crushing
- Turboprops Have Large Role
Pontifications: WA State frets about Boeing brain drain, but it’s already happening
By Scott Hamilton
Aug. 31, 2020, © Leeham News: Elected officials and others in Washington State worry about the “brain drain” as Boeing considers whether to consolidate 787 production from Everett to Charleston.
These people are asleep at the switch and have been for some time. The brain drain is already just around the corner.
Nearly half of the membership of SPEEA, the engineers and technicians union at Boeing, are 50 years or older right now.
Almost two thirds of these are within 55-64 years old. In other words, ready for retirement right now or soon to be.
Bjorn’s Corner: The challenges of Hydrogen. Part 6. Tank placement.
August 28, 2020, ©. Leeham News: In our series on Hydrogen as an energy store for airliners we look at the challenge of placing the hydrogen tanks efficiently.
Different from carbon fuels, liquid hydrogen needs specially shaped and bulky tanks. It can’t be stored in the wingbox as today’s Jet-A1.
Figure 1. The Tu-155 Hydrogen research aircraft with its aft fuselage tank. Source: Tupolev.