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
To what extent can the A321XLR replace the Boeing 757, Part 4
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By Bjorn Fehrm
August 1, 2024, © Leeham News: We are comparing the Airbus a321XLR to the Boeing 757 to understand to what extent it can replace the 757 on the longer routes it operates for major airlines like United, American, and Delta.
We have examined the aircraft’s development and operational history, their Apples-to-Apples capacity and range, and their operational costs for a typical domestic configuration. Now, we equip the A321XLR with a long-range, lie-flat cabin and look at what long-range routes it can fly in this configuration.
Summary:
- The A321LR/XLR can fly up to 10-hour routes in a long-range configuration, flying from mid-USA to mid-Europe.
- With its passenger capacity, range, and operational economics, it covers most of what Boeing set out to cover in its MOM and later NMA studies.
Boeing names new CEO; losses widen, negative cash flow again. Update 1, reaction.
July 31, 2024, © Leeham News: The Boeing Co. today named Kelly Ortberg president and CEO, effective Aug. 8. He succeeds David Calhoun, who retires then. Calhoun was named president and CEO of Boeing in January 2020.
Boeing also announced 2Q2024 and 1H2024 earnings. The company reported 15% lower revenues for the second quarter compared with 2023, a net loss of $1.4bn vs a net loss of $149m last year, and negative operating cash flow of $3.9bn vs positive cash flow of $2.875bn in 2Q2023.
For the half, revenues were $33.4bn vs $37.67bn last year. The net loss was $1.794bn vs a loss of $574m. There was a negative operating cash for the first half this year of $7.285bn vs a positive flow of $2.557bn last year.
Ortberg is 64 years old, much older than previous CEOs when named. He’s been in aerospace for 35 years, most recently as CEO of Rockwell Collins. He led the integration of Rockwell’s merger with United Technologies (now RTX), retiring in 2021. Ortberg began his career as an engineer with Texas Instruments and served as a program manager during his ascent up the corporate ladder.
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Airbus 1H2024 results: Space business problems lower results
July 30, 2024, © Leeham News: Airbus has presented its results for the second quarter of 2024. The results were impacted by a thorough review of its Space business, which resulted in a quarterly write-off of almost €1bn.
The rest of the group is performing as expected after adjusting for Airbus’ announcement in June that the year’s deliveries of A320/A321 aircraft fell short by 30 units to 770 total, as the supply chain can’t ramp from last year’s 730 to the anticipated 800.
The company announced a 1H2024 profit of 733m€ (1,452m€ 1H2023), on revenue of 28.8bn€ (27.7bn€).
Boeing, Embraer differ on the future of upgauging
By Judson Rollins
Introduction
July 30, 2024, © Leeham News: Embraer’s new 20-year Market Outlook, released during the Farnborough Air Show, forecasted the demand for jets with more than 150 seats for the first time. This comes as market observers speculate the Brazilian jet maker is mulling a move into aircraft larger than its current flagship E2 family.
However, the Brazilian jet maker delivered temperate commentary on the future of upgauging, citing one-time developments it believes are unlikely to repeat. It said, “The market environment that led to [an] increase in average aircraft size will not be the same in the future. Consequently, the growth trend likely will not continue.”
For instance, a typical two-class Boeing 737-800 Layout of Passenger Accommodations (LOPA) in the mid-2000s comprised approximately 150 seats. By the late 2010s, this shifted to 160-166 seats. A similar Airbus A320 LOPA went from 140 to 150 seats.
Source: Embraer Market Outlook (data from Sabre).
Will the pre-COVID upgauging trend continue, and what are its implications for future aircraft selection? Boeing and Embraer have decidedly different views, and the latter’s view will drive its decision whether to enter the market for 150+ seaters.
Summary
- Boeing says upgauging will continue, driven equally by cabin densification and aircraft size selection.
- Embraer believes upgauging is largely over.
- Both OEMs’ views have key flaws.
- The upshot: “Bigger” doesn’t always equate to “more profitable.”
Boeing Estimates: How accurate and clear are the predictions?
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By the Leeham News Team
Analysis
July 29, 2024, © Leeham News: Annual projections for the upcoming year are an important piece of information released to the world at large for any publicly traded corporation, on what can be expected for the near and extended future.
Boeing (BA) reports its 2Q2024 earnings this Wednesday. An update of its guidance may be forthcoming as Boeing continues to work through additional costs following the Jan. 5 accident involving a 737-9 MAX with Alaska Airlines.
Boeing relies heavily on the use of estimates when filing its annual report and this information is crucial to investors when considering whether to invest, hold, sell or short stock in the company. Not only are estimates used in its financial reporting system, generally known as Program Accounting, but each year BA puts out an expected value of revenue to be generated in the future.
This prognostication is based on converting a percentage of the backlog for the following year and for a total period of four years to come. The 2023 projection is as follows:
“Our total backlog includes contracts that we and our customers are committed to perform. The value in backlog represents the estimated transaction prices on performance obligations to our customers for which work remains to be performed. Backlog is converted into revenue, primarily based on the cost incurred at delivery and acceptance of products, depending on the applicable revenue recognition model. Our backlog at December 31, 2023 was $520,195 [million]. We expect approximately 16% to be converted to revenue through 2024 and approximately 62% through 2027, with the remainder thereafter,” Boeing wrote.
There is also a caveat:
“There is significant uncertainty regarding the timing of when the backlog will convert into revenue due to timing of 737 and 787 deliveries from inventory and timing of entry into service of the 777X, 737-7 and/or 737-10,” Boeing writes in its 2023 annual report.
Bjorn’s Corner: New engine development. Part 17. Combustion.
By Bjorn Fehrm
July 26, 2024, ©. Leeham News: We do an article series about engine development. The aim is to understand why engine development now has longer timelines than airframe development and carries larger risks of product maturity problems.
To understand why engine development has become a challenging task, we need to understand engine fundamentals and the technologies used for these fundamentals.
We have covered the compression in the compressor (Figure 1) and now go on to combustion in the combustor.
Figure 1. The gas turbine cycle and its parts. Source: Rolls-Royce: The Jet Engine.
Farnborough, Day 4: Airbus comes from behind to win order contest
July 25, 2024, © Leeham News: Airbus came from behind today with a big order from flyNAS, a Saudi Arabian low cost carrier, for 75 A320neo family members and its first widebody order, for 15 A330-900s.
The announcement is a Memorandum of Understanding.
Airbus ends the show with 139 orders and commitments. Boeing ends the show with 118 orders and commitments.
ATR announced its only order for the show yesterday, for four ATR-72s from Air Tahiti.
De Havilland Canada ended the show with 22 orders and commitments for the Twin Otter and Certified Refurbished Dash 8-400s.
Embraer didn’t announce any commercial orders, but added nine C-390s to its order book.
New Boeing plea deal filed with court
By Scott Hamilton
July 25, 2024, © Leeham News: The new, second plea agreement between Boeing and the US Department of Justice (DOJ) has been filed with the US federal court in Northern Texas. Boeing agreed to plead guilty to criminal charges. The DOJ proposes a criminal penalty of $243.6m and requires Boeing to spend $455m on internal safety protocols.
The criminal penalty matches the amount in the first plea agreement of January 2021. Under the terms of that agreement, Boeing had three years to shape up, or the DOJ could pursue criminal charges. The three-year monitoring period was due to expire two days after the Jan. 5, 2024, door plug blowout of an Alaska Airlines Boeing 737-9 MAX on climb out from the Portland (OR) airport. This incident occurred at 16,000 ft. Nobody died but there were minor injuries.
The airplane was damaged throughout the cabin and into the cockpit with the sudden depressurization. Boeing bought the airplane back from the airline.
The 2021 fine and the proposed current fine have been roundly criticized as inadequate.
Rolls-Royce aims to shorten hydrogen program pace
By the Leeham News Team
July 25, 2024, © Leeham News, Farnborough Air Show: Rolls-Royce is calling in data specialists Tata Consultancy Services (TCS) to help speed up the development of its hydrogen program, with the help of quantum computing and generative artificial intelligence.
Rolls-Royce hydrogen testing at DLR, Cologne. Credit: Rolls-Royce
The partnership – announced this week at the Farnborough International Airshow – aims to significantly shorten the design time for new hydrogen-powered propulsion systems under development at Rolls-Royce facilities.
The environmental benefits of hydrogen are gaining increased attention and have been front and centre at this year’s airshow. Hydrogen forms a central plank of the Rolls-Royce alternative fuels program.
Anupam Singhal, president of the TCS manufacturing division, told LNA the rationale for the collaboration with the engine manufacturer was bringing proven hydrogen-powered engine designs to market as quickly as possible.
“We have to look at all the tools and technologies available to us to make the entire ecosystem more sustainable,” he said. “Can we cut short the whole engine design time? Can we have this engine on the wing as quickly as possible?”
Under the expanded partnership, TCS will provide engineering skills and support for system design, component design, supply chain support, and program management to Rolls-Royce as it addresses three key challenges related to hydrogen: fuel combustion, fuel delivery, and fuel systems integration with an engine.
TCS has been working with Rolls-Royce for more than a decade, including testing to demonstrate the integration of technologies required for 100% hydrogen fuel operation on a modified Pearl 15 engine. However, this new partnership is not tied to any one product and aims to streamline the Rolls-Royce development program across its various hydrogen research projects. Read more
Customer interest in Open Fan increasing, says GE
By Scott Hamilton
July 25, 2024, © Leeham News: GE Aerospace advances testing and market information with its RISE Open Fan engine, which officials say is the best hope for reducing carbon footprints in the next decade.
RISE includes Open Fan, compact core, hybrid-electric systems, and alternative fuels technologies and research.
During GE’s 2Q2024 earnings call on July 23, CEO Larry Culp said GE continues to mature these technologies. “[We’re] moving from component-level evaluations to more module-level tests. For example, with our partner Safran, we’ve demonstrated the aerodynamic and acoustic performance of the Open Fan design with more than 200 hours of wind tunnel tests.
“Additionally, we’ve announced a new agreement with the US Department of Energy to expand supercomputing capabilities, which will further advance Open Fan design,” he said. “The Open Fan is the most promising engine technology to help the industry reduce emissions designed to meet or exceed customer expectations for durability and deliver a step change in fuel efficiency.”
GE held its earnings call during the bi-annual Farnborough Air Show. The timing was awkward; due to Securities and Exchange Commission regulations about sharing information in the 30 days before a call for analysts and shareholders, GE skipped the usual press briefing in advance of the show.