Leeham News and Analysis
There's more to real news than a news release.
Pontifications: Boeing-Bombardier complaint revisited
By Scott Hamilton
July 31, 2017, © Leeham Co.: It’s been in a quiet period in the trade complaint between Boeing and Bombardier.
The issue moved over to the US Department of Commerce (DOC) after the US International Trade Commission (ITC) concluded there were grounds to continue the probe. Then Boeing moved for a two-month delay, to September. There it sits. But as July moves into August and with the September decision date around the corner, it’s time to revisit the issue.
Embraer’s 2Q results: profits up, backlog declines
July 28, 2017, © Leeham Co.: Embraer reported first half net income of $101.6m after a $59.1m net profit for the second quarter.
Revenues for the half were $2.8bn and $1.77bn for the quarter.
EMB delivered 35 EJets during the quarter and 53 for the half.
Free cash flow for the quarter was $220m but just $20.7m for the half.
The company had $3.55bn in cash and securities at the end of the half.
The backlog of all civil, corporate and military programs declined from $19.2bn at March 31 to $18.5bn at June 30. A year ago, the backlog was $21.9bn.
Source: Embraer
The press release is here.
Bombardier 2Q results: Turn around on track as Business aircraft, Trains perform well
By Bjorn Fehrm
July 28, 2017, ©. Leeham Co: Bombardier presented its 2Q2017 results this morning. Performance followed guidance, with stronger than expected margins in business aircraft and trains. Overall the business tracks the turnaround plan, presented end 2015.
Because of constrained delivery of Pratt & Whitney GTF engines for 1H 2017, only seven CSeries got delivered. A full year delivery of around 30 CSeries is still the target.
Bjorn’s Corner: Electric aircraft, Part 5
By Bjorn Fehrm
July 28, 2017, ©. Leeham Co: In the last Corner, we looked at the mass of the propulsion components for a regional airliner.
Now we complete the mass estimations for the complete hybrid electric system.
We do that for our aircraft project, which is a regional jet airliner with 50 seats. It’s using a hybrid propulsion system with four electric propulsors fed by a Gas turbine driven generator. The system uses a battery as a redundant energy source.
Figure 1. Zunum aero regional airliners and a NASA boundary layer ingestion airliner. Source: Zunum aero.
Airbus group 2Q results: Engine deliveries decides 2017 results.
By Bjorn Fehrm
July 27, 2017, ©. Leeham Co: Airbus Group presented its 2Q2017 results this morning. The result for the first half and the full year of 2017 is decided by A320neo engine deliveries.
Out of a planned 200 A320neo deliveries for the year, Airbus could deliver 54 aircraft during the first half, with 35 completed aircraft waiting for engines on the Airbus tarmac.
How Boeing pays back the 787 debts
By Bjorn Fehrm
Subscription Required
Introduction
July 27, 2017, © Leeham Co.: Boeing held its 1H2017 call yesterday, giving further information on how the 787 deferred costs decline. The payback in 2Q2017 was $16m per aircraft.
Boeing needed to achieve a $36m per-plane reduction, based on our analysis, to not increase the payback amount per aircraft for the remaining aircraft in the current accounting block.
The $16m is still a low rate, although better than the $11m 1Q2017, given that the remaining $26.5bn deferred production costs must be amortized over the Program accounting’s remaining 735 units of a 1,300 units block.
The key to amortizing the costs is the different margins of the 787 variants. We compare costs and revenue of the 787-, -9 and -10 to understand the payback margins better.
Summary:
- Program accounting means deferred production costs shall be nil at the end of the accounting block.
- Right now, there is $26.5bn to amortize and not many aircraft left that can pay the sum.
- The key to a plausible payback scenario is the payback margins of the different 787s.
- We analyze the margins through modeling of net revenue and unit costs for the 787 variants.
Mid-year production update at Airbus
July 27, 2017, © Leeham Co.: It’s mid-way through 2017 and LNC is taking its second look at production and delivery stream flows for the Big Four airframe manufacturers.
We examined Boeing Monday in advance of its earnings call Wednesday. Today we look at Airbus in advance of its earnings call today. We look at Bombardier and Embraer next Monday.
We use the Airfinance Journal Fleet Tracker as the basis for our exam.
Boeing assumes 787 rate goes to 14/mo, but still working on it
Dennis Muilenburg. Photo via Google.
July 26, 2017, © Leeham Co.: Boeing posted strong earnings in the second quarter, with officials seeing continued strong demand, a recovering cargo market and strong commitment to returning cash to shareholders.
Financial guidance for the year was boosted. Boeing assumes that it will go to a production rate of 14/mo for the 787 program but there is still work to do to obtain the orders.
Boeing 2Q2017 earnings better than expected
July 26, 2017: Boeing reported better-than-expected 2Q2017 earnings today. Initial analyst reaction is below.
The press release is here.
The earnings call is at 10:30 am EDT. The link is here.