Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Does an A220-500 need a new wing and engines? Part 4. July 3, 2025
- GE testing of giant GE9X engine aims for maturity at entry into service June 30, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 28. June 27, 2025
- Parent agency, FAA often at odds as politics outweighs safety June 26, 2025
- Electric Flight and the Ugly Duckling June 25, 2025
UBS puts Sell rating on Embraer
Nov. 22, 2016: UBS resumed coverage on Embraer (NYSE: ERJ) today, rating the stock a Sell. It is the only Sell rating among seven analysts previously covering the 
company; six are Buys and one is Hold. UBS rated ERJ Neutral prior to suspending coverage.
Boeing aims to triple services unit; exec changes support goal
Kevin McAllister, the new CEO of Boeing Commercial Airplanes. Boeing photo.
Nov. 22, 2016, © Leeham Co.: Boeing hopes to triple its global services businesses from $15bn in revenues to nearly $50bn in the next five years. A corresponding increase is targeted in market share from today’s 7% in commercial aviation and 9% in defense.
Two moves in the executive ranks yesterday are clear signals of the increasing importance of services to The Boeing Co.’s business strategy, revenue growth and profits.
Boeing’s Conner steps down, successor named from GE Aviation
Kevin McAllister, the new president and CEO of Boeing Commercial Airplanes. Boeing photo.
Nov. 21, 2016: Boeing today announced that Ray Conner will retire as CEO of Boeing Commercial Airplanes well ahead of his Dec. 31, 2017, contract date.
Kevin McAllister of GE Aviation Services was named as his successor.
Boeing said Stan Deal was named president and CEO of Boeing Global Services, a new business unit “to be formed from the customer services groups within the company’s existing commercial airplanes and defense, space and security business units.”
Conner’s message to employees is below.
Pontifications: Airbus, Boeing still can sell planes to Iran Air
By Scott Hamilton
Nov. 21, 2016, © Leeham Co.: The vote last week by the US House of Representatives to block Airbus and Boeing from selling airplanes to Iran Air doesn’t do this, even if the US Senate goes along and if President Obama changed his mind to veto the legislation and signed the bill instead.
The House bill only prevents US-sourced financing.
Is a Boom SST good business for Virgin Atlantic?
By Bjorn Fehrm
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Introduction
November 21, 2016, ©. Leeham Co: The emergence of Boom Technology and Virgin Atlantic’s plans to offer supersonic business class passenger traffic over the Atlantic is intriguing.
Figure 1. Boom Technologies Boom Mach 2.2 airliner with 45 seater. Source: Boom
Enough of the business plans and data around the aircraft are known to enable us to do a first economic analysis.
There will have to be a lot of assumptions in such an analysis but having modeled around 100 different airliner types economics’, we have some data to base our assumptions on.
We think the accuracy will be enough to get a first feel if the Virgin Atlantic venture is tight on margin or a slam dunk (should it become reality).
Summary:
- The operating costs of a supersonic airliner will center on fuel and maintenance.
- These costs will be considerably higher than for a normal widebody airliner.
- The Virgin Atlantic venture targets the higher yield of a business passenger to cater for these costs.
- We check if this is true and if a SST venture is good use of invested capital.
Bjorn’s Corner: Turbofan engine challenges, Part 4
By Bjorn Fehrm
November 18, 2016, ©. Leeham Co: In our series on modern turbofan airliner engines, we will now go deeper into the compressor part. Last week, we covered the fundamentals of compressors. As compressors and turbines use the same principles, we also covered the fundamental working principles of turbines.
We also described that compressors are temperamental parts, which can protest to wrong handling with violent “burps” (burst stalls with the combustion gases going out the front of the engine) or end up in a rotating stall where it simply stops working.
Figure 1. Stylistic cross section of a two shaft turbofan with both axial and radial compressor. Source: GasTurb.
Turbines, on the other hand, are your robust companions. Aerodynamically they just work, albeit more or less efficiently dependent on what one asks them to do (mechanically it can be very different; we recently saw a turbine disintegrate with large consequences on an American Airlines Boeing 767 in Chicago). More on the turbines later.
In the GasTurb cross section of a two shaft turbofan in Figure 1, the engine has both an axial and a radial compressor. We will consider why engine designers combine these two for certain engine types. Read more
Airbus, Boeing deferrals may indicate slowing global economy
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Introduction
Boeing 737 flightline at Boeing Field: 737s awaiting delivery. Seattle Times photo via Google images.
Nov. 17, 2016, © Leeham Co.: The deferral by United Airlines of 65 Boeing 737-700s announced Tuesday caused some observers to conclude this has a negative impact on the manufacturer, but this may well overlook a larger issue.
UAL is the latest “quality” airline to announce deferrals to reschedule capital expenditures or because of not needing the aircraft now.
Softening yields, particularly among US airlines, indicate over-capacity despite load factors of 85% or more, say industry observers.
While the backlogs of Boeing and Airbus remain solid today, do the actions of several major airlines indicate the leading edge of a global economy that’s beginning to soften?
Summary
Will Boom succeed where Concorde failed?
By Bjorn Fehrm
November 17, 2016, ©. Leeham Co: Boom Technology plans to do a 45-seat airliner for supersonic passenger traffic with service entry by 2023. Richard Branson’s Virgin Atlantic has already placed an optional order for 10 units of the aircraft.
The idea is to fly 45 business class passengers between New York and London in 3 hours and 25 minutes. This means the Boom Super Sonic Transport shall be 10% faster than the Aerospatiale/BAC Concorde.
Figure 1. Boom Technologies Boom Mach 2.2 airliner with 45 seaters. Source: Boom.
What makes the Boom SST succeed where the Concorde failed?
We will look at the challenges that Concorde had and see how Boom SST plans to attack them. We will also discuss what the chances are that Boom SST can master these challenges. Read more
Boeing stock sell-off on United news appears misplaced
Nov. 16, 2016, © Leeham Co.: The market sell off yesterday of Boeing stock appeared on the surface to be a reaction to the news that United Airlines is deferring 61 737-700s and switching these to four larger 737-800s and the balance to either the 737-8 or 737-9.
Figure 1. Boeing stock traded down on news that United Airlines is deferring 65 737s. The price stayed flat through early today. But stock for Spirit Aerosystems, which makes the 737 fuselages, recovered after a short dip (Figure 2). This suggests the Boeing sell-off was for other reasons. Click on image to enlarge.
Boeing’s stock today remains flat-to-down slightly.
An odd thing happened concurrent to Boeing’s stock decline.
After a short dip, stock of Spirit Aerosystems recovered to the level before the UAL news and remained there through the time of this writing. Spirit makes the 737 fuselages. If Boeing’s stock was hit by the United decision, then logic suggests Spirit’s stock should have been, too.
This suggests the Boeing’s sell off has other reasons.