Trump decertifies Iran nuke deal, throws Airbus, Boeing orders in doubt

Subscription Required

Introduction

Oct. 16, 2017, © Leeham Co.: President Donald Trump announced Friday he will decertify the Iran nuclear deal, throwing into doubt a host of related commercial deals, including huge aircraft orders.

Iran Air Airbus A330. Photo via Google.

Trump hasn’t gone so far as to withdraw from the pact, but he still threatens to do so unless Congress makes changes he wants.

Here in the US, focus is, of course, on the commitment by Iran for Boeing aircraft—none of which are firm contracts, but “commitments” to order.

Of less focus here, if any, is on the outstanding orders placed by Iran for Airbus and ATR aircraft, which are subject to US licensing.

Summary
  • 30 Boeing 777s, including 15 Classics are at stake.
  • 50 Boeing 737 MAXes to Iran Air and 30 to Iran Asesman are also at stake.
  • ATR has 11 aircraft scheduled for delivery in 2018.
  • Airbus sold 114 A320s/321s, A330s and A350s to Iran Air. A few white tails already have been delivered.

Read more

Pontifications: Playing catch-up

Oct. 9, 2017, © Leeham Co.: Recent weeks have been dominated by the news of the Boeing-Bombardier trade complaint. More is to come before and after the end of the year.

It’s time to catch up on some other news.

Read more

Bjorn’s Corner: Aircraft drag reduction

By Bjorn Fehrm

October 06, 2017, ©. Leeham Co: In the last several Corners, we wrote about research around laminar flow for aircraft. It’s research to lower the aircraft’s drag. Why is this important? How large are the different drag types and what can be done about them?

To find out, we will spend some Corners looking into the drag of an aircraft and what is done to optimize the drag for different aircraft types.

Figure 1. The “Blade” equipped A340-300, researching into lower drag for an airliner. Source: Airbus.

Read more

To Kill a Better Bird

Subscription Required

Introduction

Oct. 12, 2017, © Leeham Co.: Boeing’s brash and controversial move to file the trade complaint with the US Department of Commerce is a bold gamble designed to kill the Bombardier CSeries entirely, not just block it from the US market, people familiar with the strategy tell LNC.

The threat Boeing fears from the CSeries is not really about the 737-700 or 7 MAX, they say, but truly about the future of the 737-800 and 8 MAX.

While Boeing as clear in its filings with the US International Trade Commission (ITC) and Department of Commerce (DOC) about the alleged threats, some insight to Boeing’s thinking explained by people familiar with the situation was provided.

Summary
  • Boeing hopes blocking the CSeries out of the US market will have a ricochet effect on Bombardier’s pricing strategy elsewhere.
  • With a higher price, Boeing believes it can successfully compete head-to-head in acquisition campaigns.
  • Boeing’s fear is really about the CS300 dragging down the price against the 7 MAX, which will have a cascading effect on the 8 MAX.

Read more

Shakeout for Europe’s low-cost airlines

By Bjorn Fehrm

October 11, 2016, ©. Leeham Co: Alitalia, Air Berlin and now Monarch have all filed for insolvency since the start of 2017. These are all airlines with an emphasis on low cost flying, with an important leisure part. Alitalia and Air Berlin had histories as network carriers, which hasn’t helped.

What happened in summary; When the European low-cost market got rough, their cost levels weren’t tough enough.

Read more

US declared Bombardier impeded trade probe, uncooperative and found dumping as a result

Oct. 10, 2017: The US Department of Commerce concluded Bombardier was uncooperative, didn’t answer its questions and impeded the trade investigation in the Boeing complaint.

Accordingly, under US law, Commerce could draw negative conclusions toward Bombardier and found it “guilty” (our word) of violating anti-dumping laws in its sale of the CS100 to Delta Air Lines.

Read more

Boeing’s Bold Ambition, Part 2

Subscription Required

Introduction

Oct. 9, 2017, © Leeham Co.: When Boeing launched the 787 program in 2003, an after-market maintenance program called Gold Care followed.

It wasn’t successful. Few customers signed up for it.

Stan Deal, CEO of Boeing Global Services.

But the lessons learned are important for Boeing’s drive to vastly expand its presence in the global commercial airplane after-market business.

Boeing Commercial Airplanes and Boeing Defense, Space & Security (and the latter’s predecessor, Integrated Defense Systems) provided services to the airlines, lessors and government customers, but now there is a dedicated business unit.

Boeing Global Services was announced nearly one year ago, on Nov. 21. When Boeing reports its third quarter earnings at the end of this month, for the first time revenues and profits for BGS and its predecessors will be a line-item in the earnings statements.

Stan Deal, the CEO of BGS, acknowledged the poor start of Gold Care in an interview with LNC. But from this unhappy experience, Boeing learned what officials hope lays the foundation of a new, robust business.

Summary
  • 787 Gold Care didn’t start out well.
  • Gold Care is rejigged and rebranded.
  • BGS services Airbus aircraft, too.

Read more

Pontifications: The view from 51,000 feet

Oct. 9, 2017, © Leeham Co., Montreal: The National Business Aviation Assn. (NBAA) annual exhibition begins tomorrow in Las Vegas.

LNC doesn’t ordinarily follow business aircraft, but when I was in Montreal last month visiting Pratt & Whitney Canada, I had the opportunity to meet with leaders of the PW800 team.

This new engine powers the new Gulfstream 500/600, a corporate aircraft undergoing testing.

Admittedly, not being conversant with the G500/600 or the PW800, details of which may be not new to some others, I was taken by a fewer pointers shared by PWC.

Read more

US finds “dumping,” adds 80% tariff to CSeries

Here it is, the press release from the US. The tariff is what Boeing originally asked for, 79.82%. A far higher one was expected, following last week’s subsidy determination.

Read more

Bjorn’s Corner: Laminar flow aircraft, Part 2.

October 06, 2017, ©. Leeham Co: We introduced the Airbus “Blade” laminar flow research program in the last Corner. Now we continue to look into what this research is all about.

We will explain the difference between laminar and turbulent flow (really, laminar and turbulent “boundary layer” flow) and discuss some of the work that has been done with laminar flow structures.

Figure 1. The “Blade” equipped A340-300. Source: Airbus.

Read more