Leeham News and Analysis
There's more to real news than a news release.
737-7 MAX future appears to be niche, BBJ and military
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Introduction
Jan. 11, 2018, © Leeham Co.: The decision last week by Southwest Airlines to defer for four years delivery of 23 of 30 Boeing 737-7 MAXes does not bode well for this sub-type.
Concurrently, Southwest exercised options for 40 of the larger 737-8.
One of only four identified customers for the 7 MAX, with the largest order of 30, LNC considers it highly likely that a good portion of the 23 remaining orders will be
Boeing 737-7.
converted to the 8 MAX.
With only 63 identified 7 MAX orders, the aircraft risks becoming a narrowly purchased niche aircraft.
Summary
- Despite Boeing claiming in a trade complaint the 737-7 has a good future if Bombardier’s C Series is subject to 292% in tariffs, the airplane seems destined to be no more than a niche airplane with airlines.
- The largest customer for the 7 MAX is up-gauging.
- The 7 MAX future appears to be with business jets and military transports.
Canada files WTO complaint vs US over Boeing C Series trade complaint
Jan. 10, 2018, © Leeham Co.: Canada upped the ante in the Boeing-Bombardier C Series trade complaint today by filing one of its own against the US with the World Trade Organization.
This filing comes on the eve of the US International Trade Commission (ITC) staff report, due Friday, on whether Boeing was “harmed” by Bombardier’s near-miss in
selling the CS100 to United Airlines and an order in 2016 by Delta Air Lines for 75+50 CS100s, with an option to covert some of the orders to the larger CS300.
- Canada’s complaint with the WTO is here: WTO Canada Filing 011018.
The US Commerce Department concluded Canada, the province of Quebec and the United Kingdom illegally subsidized the C Series program. Commerce also concluded BBD “dumped” the C Series in the US with the Delta order and attempted to do so with the United competition.
Commerce levied tariffs of about 292% for any C Series imported from Canada.
The Canadian complaint with the WTO challenges the DOC’s action and the pending decision, due next month, by the ITC. The move was expected, but generally thought would occur after the ITC ruled. ITC is expected to support Commerce’s conclusions.
Boeing says record 2017 deliveries will continue
By Bjorn Fehrm
January 09, 2018, ©. Leeham Co: Boeing announced record airliner deliveries for 2017 of 763 jets today, leading the industry for the 6th year running. Net orders of 912 aircraft gave a Book-to-Bill of 1.2. Airbus, which announces next week, is expected to have delivered 700 jets but to top Boeing for orders.
Randy Tinseth, Vice President Marketing for Boeing, expects the positive trend to continue. “The market was strong 2017 and we see no change for 2018. Our customers transported record passenger numbers, at record load factors and with record profits. We don’t see airliner demand weakening” said Tinseth in a call with media.
Boeing’s special needs in the next decade may be solved by Embraer
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Introduction
Jan. 8, 2018, © Leeham Co.: Key factors may play into the prospective business venture, however it’s defined, between Boeing and Embraer that have gotten little
notice.
Boeing’s need for engineering talent from Embraer has been touched on by many media, including LNC. But a detailed analysis hasn’t been forthcoming, that we’ve seen.
Not discussed yet is the fact that new airplane programs at Boeing and Embraer wind down in 2021-22, leaving both companies in danger of facing the next decade without new products at a time when competition will be emerging.
The lack of new airplane programs endangers the engineering talent pool. For Boeing, this is already going to be critical as more than 5,500 engineers and technicians reach age 65 in the next 10 years.
Boeing’s New Midmarket Airplane, if launched, will address part of the company’s new product requirement after 2020. On the other hand, Embraer has no new product, although officials have discussed potentially launching a turboprop program.
Summary
- Boeing’s 787 and 737 programs wind down this year and in 2020.
- Embraer’s EJet-E2 program winds down in 2021.
- Boeing faces talent drain as engineers and technicians age.
- Boeing NMA needs engineers and Embraer can supply them.
Pontifications: 2018 is a year of Transformations
By Scott Hamilton
Jan. 8, 2018, © Leeham Co.: This is going to be a year of transformations.
This might be viewed with puzzlement by some. After all, only minor-modification models will be entering service this year: the Airbus A350-1000, the Boeing 737-9, the Airbus A319neo and the Boeing 787-10. The first flight of the 737-7 should occur.
Flight testing continues for the Mitsubishi MRJ90, the COMAC C919 and Irkut MC-21.
The proposed deal between Airbus and Bombardier should receive government approvals this year. Talks between Boeing and Embraer may or may not result in a combination of some kind.
The Big Deal, however, resides in Everett (WA).
Bjorn’s Corner: Aircraft drag reduction, Part 11
By Bjorn Fehrm
January 05, 2018, ©. Leeham Co: In the last Corner we described a dominant drag component affecting the Wright Brothers’ Flyer, Form drag. The many wires and braces on the Flyer created separations and a high Form drag was the result.
At the time, Langley and others thought friction drag could be neglected. Now we describe how it was discovered one couldn’t and how it gradually made its way to the top of the drag contributors.
Figure 1. The Supermarine Spitfire with its elliptical lift distribution wing. Source: Google images.
Is the Airbus A321LR a better NMA stopgap than the 767-300?
By Bjorn Fehrm
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Introduction
January 04, 2016, © Leeham Co.: We have discussed if the Boeing 767-300ER could function as a stopgap until an NMA would be available. We then compared it with Boeing’s 787-8 and Airbus’ A330-800 as alternative stopgaps. We didn’t include any single-aisle alternatives at the time, like Airbus’ A321LR or Boeing’s 737 MAX 10.
These aircraft have limitations in passenger capacity and range compared with the 767. The least compromised aircraft in an NMA role is the A321LR, which comes within 1,500nm of the range of the 767-300ER. We, therefore, use it as our single-aisle alternative when we look at further stopgaps until an NMA arrives in 7-10 years.
Summary:
- The A321LR has 30% less passenger capacity than the 767-300ER when configured with comparable cabin standards.
- It also has 1,500nm less range than the 767-300ER.
- The operating costs on a trip and seat-mile basis are considerably lower, however.
- If the majority of planned routes are within the capability of the A321LR and other aircraft, with longer range, could complement it on the longest routes, it is a more economical alternative to a new 767, both on a Cash Operating Cost basis and when including capital costs.
- This assumes increased route frequency can compensate the higher capacity of the 767.
NMA market sector is small, Airbus’ Leahy says
This is a continuing series of articles derived from LNC’s “retirement” interview with John Leahy, COO-Customers of Airbus. Leahy retires this month.
Jan. 3, 2018, © Leeham Co.: This is the year many expect Boeing to decide whether to launch the New Midmarket Aircraft, also known as NMA or unofficially, the
John Leahy, COO-Customers of Airbus. Photo via Google images.
797, to serve the Middle of the Market.
The MOM sector is broadly defined as above the Boeing 737/Airbus A321 and below the Boeing 787/Airbus A330-200/800.
Others, including LNC define the market more broadly.
United Aircraft’s and COMAC’s eventful year
By Bjorn Fehrm
January 03, 2018, ©. Leeham Co: Both United Aircraft Corporation (UAC) and COMAC got their single-aisle airliner projects into flight test during 2017. The MC-21 and C919 had their first flights within less than a month of each other, with the Chinese C919 first at 5th of May, followed by the Irkut MC-21 on the 28th of May.
Superficially the aircraft and projects are similar. Both are 150-220 seat single aisle projects in the mold of Airbus’ A320neo and Boeing’s 737 MAX programs. Looking a bit closer, they are different. One is extending the state of the art in several areas; the other is playing safe.
Mitsubishi Aircraft Corporation’s tough 2017
By Bjorn Fehrm
January 02, 2018, ©. Leeham Co: The past year was difficult for Mitsubishi Aircraft Corporation (MAC) and its MRJ regional airliner. Although clear progress was made in the flight-testing of the MRJ, problems were found with the aircraft’s avionics and cabling redundancy.
The result is an avionics and cabling systems redesign which pushes out first delivery from 2018 to 2020. It’s the fifth and the longest delay of the program.
