Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
A380 cost improvements limited to seating, for now: Bregier
- MOM airplane doesn’t make sense.
- A new MOM should have new technology and it’s not available until 2030.
June 9, 2015, c. Leeham Co. Cost improvements for the A380 will be limited for now to
Fabrice Bregier, CEO of Airbus. Image from The Telegraphy via Google images.
increasing seating capacity, the president and chief executive office of Airbus told Leeham News and Comment in an interview today.
Aside from taking weight out of the airplane, which is already being done, Fabrice Bregier said Performance Improvement Packages (PIPs), such as aerodynamic improvements and adjustments to the wingtips, would wait until–or if–Airbus re-engines the airplane. And Bregier said Airbus is in no hurry to make a decision about this, despite pressure from the largest A380 customer, Emirates Airline, to launch the neo.
We want engine choice, say airlines at IATA
Willie Walsh, CEO of British Airways, says sole-sourcing the engine on the 747-8 cost Boeing an order. BA bought the Airbus A380 instead. Photo source: SI.WSJ.net via Google images.
June 9, 2015, c. Leeham Co. Airlines want engine choices, not sole-source on airplanes, airlines said at the International Air Transport Assn. (IATA) Annual General Meeting in Miami Beach (FL).
Sole-sourcing cost Boeing a major order for the slow-selling 747-8, said Willie Walsh, CEO of British Airways. Relations at the time between British and GE Aviation, the sole engine provider on the 747-8, were so poor BA decided instead to order the Airbus A380, where a choice between the Engine Alliance GP7200 and the Rolls-Royce Trent 900 was possible GE is a JV partner in Engine Alliance with Pratt & Whitney. BA bought Rolls.
MOM market depends on price, says Air Lease Corp
June 9, 2015, c. Leeham Co. The Middle of the Market (MOM) airplane seems next up on the development plate. Air Lease Corp (ALC) is a major player in the development of any new airplane, and president John Plueger said the size of the market will depend greatly on the price of the airplane.
During a short interview on the sidelines of the conference, Plueger didn’t name a price but said the more expensive the airplane, the market could be as few as 800. The less expensive, the market could be as much as 1,200-1,600 airplanes. Either market isn’t big enough for Airbus and Boeing to play in this space, but Boeing–lagging in the single-aisle sector with the 737 MAX 9 to the Airbus A321neo–has to do something, Plueger said.
Boeing still needs hundreds of 777 Classic orders to fill gap
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Introduction
June 9, 2015, c. Leeham Co. Boeing may acknowledge that it will cut the production rate of the 777 Classic by one per month in 2018 as production of the 777X begins, Officials may claim the 777X production is the same as maintaining a rate equivalent to 777 Classic. But a fresh analysis taking these factors into account shows Boeing has a steep hill to climb to maintain sales and cash flows.
We’ve updated our analysis from last February on the production gap facing Boeing to maintain production rates through the introduction of the 777X in 2020 and beyond until the X ramp-up is complete. We’ve taken into account the delivery dates of the 10 Classics ordered this spring by United Airlines. We’ve also taken into account information emerging from Boeing’s Paris Air Show briefings last week. This includes information that Boeing will cut the rate of the Classic by one per month in 2018 from the current 8.3/mo as the X is integrated into the production system.
Summary
Boeing’s initial claims that it will maintain the 777 Classic production rate through 777X EIS has been eroding for months.
When the estimated 777X production ramp-up is factored in, Boeing’s task of selling the Classic to maintain rates is daunting.
Boeing still has to sell hundreds of Classics to maintain production even at the lower rate, according to our analysis.
Even with the new information and Boeing’s revised messaging, we remain firmly convinced 777 production rates will have to come down much more than suggested last week.
Emirates A350/787 bake-off remains wide open
Tim Clark, president of Emirates Airline. Photo: Skift.com via Google images.
June 9, 2015, c. Leeham Co. Competition between Airbus and Boeing remains wide open between the A350-900 and the 787-10, says the president of Emirates Airline despite an Internet report that the carrier has tilted toward Boeing.
“No, I don’t know where that’s coming from,” Clark today told Leeham News and Comment on the sidelines of the International Air Transport Assn. Annual General Meeting in Miami Beach. “If anything, the 10 is not coming up with the thrust requirements that we need. We’re working with Boeing on that, whereas the A350-900 has got bags of thrust.
Bombardier ‘transformation initiative’ goes after costs across the enterprise, supply chain
June 8, 2015, c. Leeham Co. Bombardier suppliers, already squeezed by Airbus and Boeing to cut costs and prices,
Alain Bellemare, CEO of Bombardier.
will soon face a new effort from Bombardier to do the same.
The new chief executive officer, Alain Bellemare, last week announced a “transformation initiative,” of which going to the supply chain is but one part for cut costs across the enterprise.
Bellemare, who was named CEO in February, knows something about cost cutting. He was an executive at Pratt & Whitney, a unit of United Technologies, before coming to BBD, and has been on the giving and receiving end of demands to cut costs.
Bellemare was named with the charge to restructure Bombardier, after billions of dollars in losses, cost over-runs and delays in corporate and commercial aircraft programs, the highest profile of which is the CSeries. The CSeries is the bet-the-company leap into mainline jet aircraft which, at the lower end, compete directly with Airbus and Boeing.
In an interview with Bellemare at the International Air Transport Assn. Annual General Meeting Monday in Miami, Bellemare covered a wide range of subject about how BBD will be remade.
Pontifications: Boeing finally cracks on 777 production rates, but spin continues
By Scott Hamilton
June 8, 2015, c. Leeham Co. Boeing finally said it may reduce production rates on the 777 Classic, but only initially by one aircraft per month and only starting in 2018.
Dominic Gates of The Seattle Times reported Saturday that Elizabeth Lund, VP for the 777 program, acknowledged the rate may have to come down but in a continuation of the message offered by CEO Jim McNerney during the first quarter earnings call in April, “feathering” the 777X production into the 777 Classic rate is the equivalent of maintaining the current rate of 8.3/mo, or 100 per year.
Boeing’s message has been evolving for some months. Originally Boeing said the production rate of the Classic will maintain the current rates right up to entry-into-service of the X, slated for 2020. Over the past several months, this definitive declaration has softened to the point of the current messaging.
As I wrote shortly after the 1Q earnings call, McNerney’s messaging wasn’t being swallowed by Wall Street analysts, or by this journalist.
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A350 replacing A340-300 / 777-200ER, still on with lower fuel prices?
By Bjorn Fehrm
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Introduction
June 7, 2015, c. Leeham Co. We have just rounded off a series of articles around how A350 is to fly, its systems approach and lastly the conversion of Finnair’s A340/A330 pilots to A350. Finnair will replace the airlines A340-300 with the A350-900.
A question that comes up is how much more efficient is the A350 that is delivered to these airlines, and does the investment still make sense with today’s lower fuel prices? To get an answer we took the two customers that will get their A350 within the next months, Vietnam Airlines and Finnair, and we compared A350-900 to the aircraft that it will replace in their fleets, Boeing 777-200ER for Vietnam Air and Airbus A340-300 for Finnair.
We used our proprietary model to fly these aircraft over some typical routes for the airline’s, for Vietnam Airlines Saigon-London and for Finnair Helsinki-Shanghai.
Summary:
- The present aircraft are over 20% less efficient than A350 on these routes.
- For the A340 it is the engines which are the culprit, for the 777-200ER the wing.
- With a realistic fuel price for the planning period the differences in efficiency are large enough to motivate the switch.
IATA: Lufthansa welcomes US carriers to Mid-East dispute
Carsten Spohr, CEO of Lufthansa Group
June 7, 2015: The chief executive officer of Lutfhansa Airlines said he welcomes the Big Three US airliners to the dispute over whether the Big Three Middle Eastern carriers are unfairly competing against legacy airlines.
Carsten Spohr, CEO of Lufthansa Group, told a press conference on the opening day of the IATA Annual General Meeting that LH has long been complaining about Emirates Airline, Qatar Airways and Etihad Airways and their aggressive expansion, first in Europe and now the US.
American Airlines, Delta Air Lines and United Airlines are challenging open skies and subsidies to the ME3.
IATA AGM opens against mixed signals from industry
Miami Beach (FL), June 7, 2015: The International Air Transport Assn. (IATA) Annual General Meeting (AGM) opens against a backdrop of conflicting signals from the industry, including from the organization itself.
On the one hand, IATA said last week freight traffic declined in April after a robust start through the first three months of the year. Freight traffic is usually a harbinger of passenger traffic.
On the other hand, IATA said April passenger traffic was up higher than usual.
At the same time, Delta Air Lines warned its passenger revenue per available seat mile was falling on weaker short-term business bookings and Southwest Airlines continued a fare sale that, given typically strong load factors and going into the historically strong third quarter, indicates weaker traffic.