Leeham News and Analysis
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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
Irkut MC-21-300 analysis, Part 3
By Bjorn Fehrm
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Introduction
August04, 2016, ©. Leeham Co: With the classification of the Irkut MC-21-300 done in terms of its size segment (it’s close to the Boeing 737 MAX 9 in size) and the key data of the aircraft analyzed, it’s now time to look at aircraft efficiency and payload-range performance.
Figure 1. MC-21-300 prototype on the final assembly line. Source: Irkut
We will do this with two cabin configurations for the aircraft. The first will be the nominal two class seating as proposed by the OEMs. For the second, we use a single class layout with 30-inch seat pitch.
Summary:
- The MC-21 has problems to compete with the re-engined 737 MAX 9 in terms of efficiency when using the standard two class cabins.
- When we switch to a single class high density layout, the fuel efficiency improves. The MC-21-300 exit concept is then more similar to the MAX 9, which affects efficiency in a positive way.
Boeing’s 2Q2016 results and the 787
By Bjorn Fehrm
August 03, 2016, ©. Leeham Co: Boeing released its 2Q 2016 results last week. This is always a good opportunity to look at information regarding its 787 Dreamliner project. Last week’s call did not disappoint even if the information leaves plenty of room for interpretation.
The first information was the production cost of the fourth and fifth Dreamliner that were produced. According to the stock market filing (10-Q), these cost over $500m per unit. The further information we got was the production cost for the 38 Dreamliners that were produced in the quarter and the relationship of the 787-8 costs to the 787-9.
As Boeing uses program accounting, these normally very hush-hush figures have to be shared with the public. Not so with other aircraft OEMs that use unit accounting for production. Read more
Boeing 787: Stable Rate, Hike Rate or Cut Rate
Aug. 2, 2016, © Leeham Co.: Boeing officials increasingly downplay the prospect of the 787 production rate increasing to 14/mo by the end of the decade from the current 12/mo, reflecting uncertainty over the strength of the wide-body market in the near-to-medium term.
Dennis Muilenburg, CEO of The Boeing Co., said during the company’s 2Q2016 earnings call July 27 that “we haven’t pinned down a specific decision point [on ramping up to 14/mo] yet because we’re going to keep a close eye on the market. The signals from our customers, we’ve got time to do our due diligence here.
Figure 1. Boeing 787 Orders and Deliveries. Click on image to enlarge.
“Our principle here is to keep wide body supply and demand in balance. And we’re confident in the 787 program across that span of scenarios, and we’re going to continue to work campaigns to fill out to the 14 a month rate step-up, and we’ll evaluate timelines and decisions around that. But you can be very confident that whatever we decide, we’re going to keep supply and demand in balance. We’re going to do it efficiently and productively, and all of this again is enveloped by our expectation of a year-over-year cash growth business.”
Boeing noted that the program is sold out in 2018 and has some slots available in 2019. At rate 12, the likelihood of these slots being filled may be challenging. Although the number itself isn’t great—27, according to Ascend—finding enough customers for delivery in 2019 could be challenging in the current soft environment, and with competition from a much lower priced Airbus A330, whether a CEO or NEO. The challenge becomes greater the farther out in the future.
If Boeing went to rate 14, this is another 24 airplanes per year that have to be sold. (Figure 1.)
Pontifications: A321LR actions put pressure on Boeing to launch 737-10
By Scott Hamilton
Aug. 1, 2016, © Leeham Co.: The order last week by JetBlue for 15 Airbus A321neos, with the option to convert these to A321LRs for potential trans-Atlantic service, comes within two weeks of Norwegian Air Shuttle converting orders for 30 A321neos to A321LRs. NAS is going to use the LRs for trans-Atlantic service.
We’re aware of at least two more campaigns for A321LRs with carriers that would use them for trans-Atlantic operations. There are undoubtedly more.
The A321LR is an option, allowing airlines that have already ordered the 321neo to switch before construction of the planes begins. The LR EIS is 2019.
To date, Air Lease Corp, TAP and NAS have ordered the LR. Astana is taking the LR on lease from ALC. The JetBlue and NAS deals up the pressure on Boeing to make decisions on whether to launch the stretch of the 737-9 MAX, to what’s commonly called the 737-10; and whether to launch the New Mid-Range Airplane (NMA) for the Middle of the Market (MOM) sector.
The NAS announcement is significant. NAS has a large order for the 737 MAX and A320neo families. The original intent was to use the MAX on longer routes and the A320neo on shorter routes. NAS is also acting as a lessor and leasing out the A320neo family. Now, with the selection of the A321LR, this is another airline that chose the A321LR over the MAX 9.
Irkut MC-21; we look at the MC-21-300, Part 2.
By Bjorn Fehrm
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Introduction
August 01, 2016, ©. Leeham Co: After having found the nearest competitor to the Irkut MC-21-300 as the Boeing 737 MAX 9 in our first article, we now go deeper in the comparison of the two aircraft.
Figure 1. MC-21-300 at the roll out in June 2016. Source: Irkut
In the first article, we found that the aircraft have almost identical cabin dimensions. Now we will look at other areas like airframe dimensions, weights and data which dictate overall performance.
Summary:
- The MC-21 has cabin dimensions which are very close to the 737 MAX 9.
- The nominal two class seating by Irkut is lower than the MAX 9. We have assumed that this will increase during the lifetime of the MC-21.
- We also compare other data between the MC-21-300 and the MAX 9, such as weights, wetted areas and effective wingspans to see if these are similar as well. In the end these dictate the aircraft’s efficiency together with the engines.
Bjorn’s Corner: Synthetic Vision
By Bjorn Fehrm
29July 2016, ©. Leeham Co: In last week’s Corner we discussed the power of the eye versus other senses of the human body. If one provides the eye with a convincing visual scenario, it can override many other senses that tell the brain another story.
When flying in bad weather, there is nothing in the human body that helps us to say which is up or down. Gravity should do it, you say, with the inner ears balance organ and the bums pressure situation telling us if we are up or down. Not so sure! It is very easy to slowly enter a yawing downward spiral which produces a perfect 1G force straight downwards in the aircraft, telling our brain we are doing just fine.
Birds can’t fly in clouds for the same reason we can’t, at least not without aids. The standard aid is the artificial horizon, Figure 1.
Figure 1. An aircraft’s artificial horizon. Source: Sensorworks Android phone app
I choose the picture because it shows the problem with an artificial horizon well. Tell me what is happening in the picture? The orange bits in the middle is the aircraft. Is the horizon leaning to the right or the aircraft to the left?
One can gradually intellectually understand that a horizon does not lean so the aircraft is rolling left. But it is not a very intuitive tool to understand what is happening. Let’s now see what happens when we make the horizon more real. Read more
IRKUT MC-21; we look at the MC21-300.
By Bjorn Fehrm
Subscription required.
Introduction
July 28, 2016, ©. Leeham Co: In February we did a first analysis of the new Irkut MC-21 single aisle aircraft that Russia is developing. We found that the aircraft has its own profile; it’s not a copy of a Western design. Irkut is the company within Russia’s United Aircraft group which is developing MC-21 (or rather, its design bureau, Yakovlev, is). Irkut has also gone its own way in sizing the aircraft.
Figure 1. MC-21-300 at the roll out in June 2016. Source: Irkut.
In our February analysis, we found that the first aircraft being developed, the MC-21-300, is larger than both the Airbus A320 and Boeing 737 MAX 8, the present top sellers in the single aisle market. At the time, we decided to analyze the aircraft which was closest to those two in size, MC-21-200, which is the second variant in development. We will now look at the larger MC-21-300 (Figure 1), the aircraft which rolled out in June and which will fly early next year.
Summary:
- The MC-21 has its own profile; it is not a copy of a Western aircraft. It has a wider cabin than the A320 and a higher capacity in its base variant, the MC-21-300.
- The MC-21-300 is smaller than an A321. It most closely resembles a Boeing 737 MAX 9 in size. We will therefore conduct the analysis of the MC-21-300 by comparing it to the largest Boeing MAX variant.
747 production may end: Boeing
July 27, 2016: For the first time in a Securities and Exchange Commission filing, Boeing said production of the iconic 747 may end.
In a 10Q quarterly filing today, concurrent with the 2Q2017 earnings release, Boeing said:
Boeing: program charges right course to de-risk finances
Dennis Muilenburg, CEO The Boeing Co.
July 27, 2016, © Leeham Co.: Boeing officials termed charges against the 787, 747-8 and KC-46A as the right course while reaffirming the underlying strength of the company.
CEO Dennis Muilenburg said the charge against the 787 was the right decision to reduce the financial risk going forward.
He also said the write down of the remaining deferred production costs of the 747 significantly de-risk the program. Boeing reaffirmed its belief in the future of the program, despite challenges with the cargo market.
Despite continued charges against the tanker, Boeing saw the first flight of the first production aircraft during the year.
Boeing posts loss on charges
July 27, 2016: Boeing posted a loss for the second quarter on more than $2bn in after tax charges, announced last week, and amounting to $3bn in before-tax charges.
The press release is here.
With advance warning last week, Boeing stock was up $2.95 in pre-market trading today an hour before its earnings call.
Boeing’s press release synopsis:
- Revenue increased to $24.8 billion on strong commercial deliveries and services growth
- Loss of $0.37 per share (GAAP) and core (non-GAAP)* loss of $0.44 per share reflect $3.23 per share impact related to previously announced 787 R&D reclassification and 747 & Tanker charges
- Strong operating cash flow of $3.2 billion; repurchased 15 million shares for $2.0 billion
- Backlog remains robust at $472 billion with nearly 5,700 commercial airplane orders
- Cash and marketable securities of $9.3 billion provide strong liquidity
- Reaffirmed cash & revenue guidance; EPS reflects reclassification, charges, solid performance & tax
Some initial analyst takes: