Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- 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
- Digital twin is a key to JetZero’s hopes for Blended Wing Body entry June 2, 2025
Pontifications: Turbulence is not just something in the air
By Scott Hamilton
July 20, 2020, © Leeham News: The timing is coincidental. If you think the airline industry is in a wind shear now, don’t be fooled.
The industry has been in perpetual turbulence for 50 years.
At least that’s the theme of an airline executive’s new book, Turbulence.
David Banmiller began his career as a ticket agent, when hand-writing the coupons at the airport as common practice.
He retired three years ago after a career that saw him in executive positions at AirCal, American Airlines and other carriers.
He became a bankruptcy reorganization specialist as well.
Careers
Banmiller weaved through American, TWA, AirCal, the second Pan Am, Aloha and Air Jamaica. He was CEO of AirCal when it was sold to American, where he became an executive under legendary CEO Bob Crandall. Banmiller went on to become CEO of Aloha, Pan Am and Air Jamaica. He took the first two through bankruptcy reorganization and restructured Air Jamaica outside of the courts. He also served as CEO of Sun Country Airlines.
Throughout his careers, Banmiller experienced many of the downturns of the airline industry: oil price wars, 9/11, the SARS pandemic and now, from his retirement, COVID-19.
Bjorn’s Corner: Do I get COVID in airline cabins? Part 11. Wrapup.
By Bjorn Fehrm
July 18, 2020, ©. Leeham News: It’s time to wrap our Corner series about flying during the COVID-19 pandemic.
We started the series on the 8th of May. A lot of knowledge has been gained since, about COVID-19 in general and when taking a scheduled flight.
Figure 1. The difference of coughing without and with a mask. Source: Simulations by Florida Atlantic University, composited and annotated by LNA.
Restoring capacity with the A330ceo or A330neo, Part 5
Subscription Required
By Vincent Valery
Introduction
June 18, 2020, © Leeham News: In the previous articles, we outlined Economic factors that determine whether the older A330ceo or newer A330neo is a better choice for airlines. We summarize those findings and broaden the discussion.
Summary
- Economic summary;
- The case for keeping older aircraft;
- And purchasing newer ones;
- A further factor in favor of more modern airplanes;
- Potential A330neo enhancements.
Looking ahead for 2020 and 2030 decades: UAC
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Fifth in a series.
By Bjorn Fehrm
Introduction
July 15, 2020, © Leeham News: UAC stands for United Aircraft Corporation, and is the name of the group owning the Russian aircraft industry.
After the fall of the Soviet Union, the multitude of individual companies and design bureaus could no longer survive on their own. The Russian state, therefore, gathered them all in UAC to introduce necessary consolidation and reform.
While UAC has done much with the support of the Ministries of Industry and Defense, the changing political situation for Russia has made it harder for the Civilian aircraft side to achieve sales outside captive Russian markets for its jets.
Summary
- UAC is the holding company of the Russian aircraft industry since 2006. The UAC management has stopped pointless infighting and consolidated the industry, latest to a civilian and military side.
- But it’s ambitions on the civil side outside Russia is at mercy to state politics and the Kremlin has shown that world politics is more important than the development of its industries.
- This, and the rise of arch-rival and cooperation partner China, clouds the future for UAC civil aircraft.
HOTR: American’s threat to Boeing: no MAXes without financing
By the Leeham News staff
July 14, 2020, © Leeham News: Last week’s news that American Airlines told Boeing it won’t take delivery of 17 new 737 MAX-8s unless it can get financing isn’t a surprise for those in the know.
This could be a bit of negotiating in the press.
When MAX was grounded, AA had lined up Japanese financing for its next round of deliveries. The lease rate was said to be in the vicinity of 0.52%, a number that is unconfirmed. But it was a very inexpensive lease rate. Over the course of the balance of 2019, the financing expired.
An economic crisis on top of a medical one: Why airline traffic won’t fully recover until the mid-late 2020s
Open To All Readers
By Judson Rollins
Introduction
July 13, 2020, © Leeham News: As the world waits for the COVID-19 storm to abate, questions are growing over the duration of a demand downturn for airlines.
Many journalists and industry observers have been obsessively searching for “green shoots” indicating the beginning of a recovery, but much of this commentary misses the mark. For instance, much attention has been focused on capacity restoration in the US and China. However, little is known about the percentage of seats filled by Chinese carriers – and last week United Airlines told employees in an internal presentation that while US carrier capacity in July is back to 47% of 2019’s level, it believes industry traffic has only reached 28% and revenue just 19%.
Last month, investment research firm Bernstein published an analysis calling for narrowbody traffic to recover by 2023 and widebody traffic by 2025. This is consistent with most public forecasts from airlines, banks, and industry observers. The firm’s analysts said that single-aisle concentration in short-haul and domestic routes should see them returned to 2019 utilization sooner than twin-aisles due to reduced long-haul demand and lower demand in short-haul markets previously served by widebodies (e.g., in most of Asia).
LNA believes that 2024 is the earliest possible date for a return to 2019 global passenger traffic – and it could conceivably take until 2028. Many obstacles lie between the present situation and a full recovery: deployment of a successful vaccine (or vaccines), rollback of border restrictions, passenger confidence in the medical safety of air travel, and most importantly, restored willingness to pay by business and leisure travelers. Specific countries or regions – especially those with local vaccine production – may recover sooner, but a global recovery to pre-COVID traffic levels requires all these to happen at a global scale.
To be clear, LNA’s definition of “herd immunity” is that of the global medical community: population-level resistance to virus transmission that occurs because a large majority have been vaccinated or previously infected. This differs from an increasingly popular usage of the term in reference to the passive infection-oriented virus management approach taken by Sweden and other countries.
Summary
- Widespread uncertainty means downturn likely to outstrip previous ones in duration, magnitude
- Vaccine development may be expedited; global distribution will take longer
- Herd immunity to COVID-19 is a prerequisite to confidence in travel safety, reopening of borders
- Open borders, restored economic activity are keys to any rebound in business travel
- Consumer travel requires confidence in personal income, availability of lower fares
Pontifications: 2Q earnings reports begin this month
By Scott Hamilton
July 13, 2020, © Leeham News: Earnings season calls for the second quarter begin this month.
For our readers, Airbus and Boeing are the big ones.
Boeing’s earnings call is July 29. Airbus follows the next day.
A few early analyst previews were issued last week for Boeing.
HOTR: Second hand 787-8 market to be tested
By the Leeham News Staff
July 10, 2020, (c) 2020, Leeham News: A few months ago, Qantas announced that it intended to sell three Jetstar-operated Boeing 787-8s that would become surplus once the airline received its first A321-LRs. In the aftermath of the COVID-19 outbreak, Avianca rejected one 787-8 lease and Royal Air Maroc intends to sell four of them.
Four 787-8 operators (Aeromexico, Avianca, Latam Airlines, and Thai Airways) with a total of 38 aircraft in service filed for Chapter 11 or are in administration. This represents around 11% of the 374 787-8s delivered so far.
After years of high 787-8 production rates, Boeing is reluctant to sell the type. It has less production commonality than the 787-9 and 787-10 have between them and sales margins are lower. As a result, airlines do not place many new orders for the variant because they think other aircraft are more attractive investments.
Bjorn’s Corner: Do I get COVID in airline cabins? Part 10. Trans-Atlantic trip.
By Vincent Valery
July 10th, 2020, © Leeham News: In our Corner series about flying during the COVID-19 pandemic, we look at a trip undertaken last week by a member of the LNA team, Vincent Valery. Vincent, who flew from New York to visit family in France close to Geneva, writes this post.
On the flight over the Atlantic in Economy. Source: All photos LNA.
Restoring capacity with the A330ceo or A330neo, Part 4
Subscription Required
By Bjorn Fehrm
Introduction
July 9, 2020, © Leeham News: Last week, we started the analysis of restoring capacity with the Airbus A330-300 or the A330-900 when reopening international traffic after the COVID-19 lockdown.
As we did with the A330-200 versus the A330-800, we fly them side by side between Paris Charles de Gaulle and Sao Polo’s Guarulhos airports. It’s a 13-hour flight with maximum freight in the cargo bays to gain revenue in addition to our part full cabin.
Will the payload-range of the A330-300 or A330-900 be sufficient to load the aircraft for maximum revenue on the route? We use our airliner performance model to find out.
Summary
- The A330-300 has gradually got more range as the Maximum TakeOff Weight (MTOW) has grown. The example highlights the limitations that still exits in this model of the A330.
- The A330-900 adds another nine tonnes MTOW over the highest MTOW A330-300. To what extent does it fix the A330-300 limitations on this route?