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 21. May 9, 2025
- Does an A220-500 need a new wing and engines? Part 2. May 8, 2025
- Embraer downplays tariff impact on 2025 results May 6, 2025
- JetZero readies effort for private equity fund raising May 5, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 20. May 2, 2025
Fuel prices going forward
By Bjorn Fehrm
Source: Google images.
January 16, 2017, ©. Leeham Co: Oil has now doubled in price since the lowest point a year ago, with a present level of $50-$60/barrel. What is the trend going forward?
We are at the Growth Frontiers 2017 conference in Dublin, where Paul Horsnell, Head of Commodities research at Standard Chartered and Mike Corley, Mercatus Energy Adviser, gave their view on the future of oil prices.
The air transport market has seen a worldwide passenger and profitability growth over the last 12 months. The driving factors are increased appetite for air travel, especially in Asia, and cheap fuel.
Pontifications: Planes nobody wants
By Scott Hamilton
Jan. 16, 2017, © Leeham Co.: Airbus and Boeing continue to offer planes that nobody wants.
Well, almost nobody.
The aircraft remain on the published price lists of both companies, for reasons that passeth understanding. Nobody ordered the aircraft for years.
Boeing 737 MAX 10
Subscription Required
By Bjorn Fehrm
Introduction
January 17, 2017, © Leeham Co.: Boeing has given its sales team the “authority to offer” the 737 MAX 10. The aircraft is a stretched version of the 737 MAX 9, designed to compete more successfully with Airbus A321neo.
Boeing worked on the variant for the last year. It started off as a more ambitious change over the 737 MAX 9, but it turned out too expensive and would have taken too long to get to market. The variant that Boeing now offers to airlines is a simple stretch of the 737 MAX 9.
The backing down to a stretched MAX 9 solves the cost and timing problem, but will it solve the competitiveness problem? We make a first analysis.
Summary:
- The offered 737 MAX 10 is a longer fuselage MAX 9.
- The longer fuselage closes the cabin dimensions gap to the A321neo.
- The 737 MAX 10 is longer and heavier than the MAX 9, affecting performance.
- To save field performance, a change to the main landing gear was necessary.
Bjorn’s Corner: Geared turbofans
By Bjorn Fehrm
January 13, 2017, ©. Leeham Co: The time has come to go through the reasons why some turbofan engines are designed with a gearbox between the fan and the low pressure shaft.
The principle design is shown in Figure 1. It’s a graphical representation of a geared turbofan from the engine analysis software GasTurb.
Figure 1. GasTurb principal representation of a geared turbofan. Source: GasTurb.
The base idea is to have the low pressure spool of the engine to run at a considerably higher RPM than the fan. Read more
Is Emirates in trouble?
Introduction
Jan. 12, 2017, © Leeham Co.: There are a growing number of articles around the Emirates airline that points to recent weaknesses in the airline’s operating model. Here are just two:
- “Is Emirates Airline running out of sky” asks Bloomberg?
- Is the Emirates Airline Growth Story at An End? writes Forbes.
We decided it was time for a deeper look at this locomotive from the Arab Emirates. Is Emirates in trouble? How solid is it?
We studied the economics for the last decade and took a deep look at the fleet needs, including, has Emirates committed to too many aircraft being delivered over the next several years?
They have just deferred Airbus A380’s for the first time. Used to be they could not get them fast enough?
Summary:
- Emirates has been profitable since start 1985.
- Its unprecedented growth in revenue and passengers has slowed down.
- The low fuel price has kept profits up for now, but yield and load factors are down.
- With a flexible fleet structure and a strong balance sheet Emirates has a strong position to weather any storm going forward.
Airbus sets new delivery record for 2016
By Bjorn Fehrm
January 11, 2017, ©. Leeham Co: Airbus Commercial Aircraft presented a new record in yearly deliveries at its Press Briefing in Toulouse today. The division of an integrated Airbus (therefore Airbus Commercial Aircraft, ACA) delivered 688 aircraft during 2016, thereby beating its target of 650 aircraft for the year.
Airbus A321neo with Pratt&Whitney engines was certified end 2016. Source: Airbus.
Orders were also higher than expectations at 731 net orders, giving a Book to Bill of 1.06. The market, including LNC, widely expected Airbus to fall somewhat short of a 1:1 book:bill.
There were no formal forecasts given for 2017. ACA President Fabrice Bregier stated that he expects it to be over 700 deliveries but full details will given at the Airbus Group’s financial press briefing in February.
Comparing 777 Classic, 787 Book:Bill in recent years
Subscription required.
Introduction
Jan. 11, 2017, (c) Leeham Co.: Future production rates of the Boeing 787 is a concern for LNC, which has been explained in detail here.
A little history provides some context.
Figure 1. Analysis from March 2014. Click on image to enlarge.
As far back as March 2014, we identified the growing production gap for the 777 Classic. In presentations in April and May 2014, we outlined this gap (Figure 1) and forecast that production rates would have to come down in the not-too-distant future.
The rest, as they say, is history.
Pontifications: Boeing’s book:bill shortfall draws market ho-hum
By Scott Hamilton
Jan. 9, 2017, © Leeham Co.: Boeing’s falling a little short of a 1:1 book:bill last year was expected and drew a ho-hum from the market.
The stock was up fractionally for the rest of the day after Boeing announced the year-end data at 11 am Eastern time, closing at $159.10.
Airbus announces its full year orders and deliveries Wednesday in a press conference (Boeing only issued a press release).
Deferrals grow as airlines fight to keep bottom line
Subscription Required
Introduction
Jan. 09, 2017, © Leeham Co.: Airlines have deferred or are thinking about deferring more than 400 airplanes in the near term, a review of decisions and deliberations that have been made during the last 12 months.
LNC tracked announcements last year of deferrals and statements by airlines that they are thinking about doing so.
We began identifying macro-level issues last week in our posts about emerging concerns for the 787 and LNC’s Outlook for 2017.
Reasons vary widely for the deferrals, these reports indicated. Low oil prices. Slowing economies. Declining financial results. Worries about two of the three top Middle Eastern carriers. A capital squeeze in China. Pressure on long-haul carriers from the emerging sector of low cost, long-haul airlines. Preserving capital expenditures to keep the bottom line in the black.
Today we detail the deferrals we tracked.
Summary
Read more
1 Comment
Posted on January 9, 2017 by Scott Hamilton
Airbus, Airlines, Boeing, Bombardier, Delta Air Lines, Leeham News and Comment, Pratt & Whitney, Premium, Qatar Airways, Rolls-Royce
777 Classic, 787, A380, Airbus, airlines, Boeing, Bombardier, Emirates Airlines, Goldman Sachs, Qatar Airways