Leeham News and Analysis
There's more to real news than a news release.
Pontifications: The crystal ball
By Scott Hamilton
May 30, 2016, © Leeham Co.: We at Leeham Co. and Leeham News and Comment take some risk when we make analyses, forecasts, projections and predictions. These often put us out on a limb, open us to criticism and even ridicule and as often as not really pisses off those companies that are the target of such predictions.
Some recent events and news stories caught my eye that validated something I predicted eleven years ago.
First, the set up.
Bjorn’s Corner: Transponders, the kingpin of safe air navigation, Part 2
By Bjorn Fehrm
May 27, 2016, ©. Leeham Co: In last week’s Corner, I started to describe how the aircraft Transponder grew out of the military IFF and how it gradually became a very important part of current Air Traffic Management (ATM).
We will now dwell deeper on the most capable transponder type, the mode S type. We will describe how this is available in versions which give Air Traffic Controllers (ATC) info on what the airliner is doing and how it’s further developed from an aid for air navigation to be the kingpin for all future air navigation.
Figure 1. A classical transponder for general aviation aircraft. Source: Garmin.
Figure 1 shows a classical transponder how most General Aviation and Commuter aircraft pilots know them, a narrow panel in the avionics stack. In airliners they are more integrated into the overall cockpit concept but their functionality is the same.
How the transponder developed to be the primary tool for safe air traffic is a bit involved, but we will take it in steps.
Dissecting Wide-Body deliveries through 2030
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Introduction
May 26, 2016, © Leeham Co.: A softening of trans-Atlantic air traffic, with declining yields and passenger demand, raises anew concerns that there is an oversupply and over-ordering of twin-aisle aircraft.
Air Lease Corp. addressed this concern at its May 19 investors day, arguing that growth plus retirements over the next 25 years more than supports the orders.
ALC, which is headed by Steve Udvar-Hazy and John Plueger, considered two of the leaders of the lessor industry, note that there is an average of about 150 wide-bodies approaching 25 years in age each year for the next 20 years. Coupled with long-haul traffic growth, ALC—which has a modest number of wide-body orders—is comfortable with the future supply-demand.
We’ve dissected the known delivery dates of wide-bodies at Airbus and Boeing, using the Ascend data base as of January. Wide-body orders have been announced subsequently, but not all have been firmed up and the total number won’t materially affect the trend lines.
Figure 1. Source: Air Lease Corp. Click on image to enlarge.
Summary
- We look at announced production rates by 2020 of Airbus and Boeing. We don’t include our own forecasts.
- We look at the defined delivery dates of the A330, A350, A380, 747-8, 777 and 787. These are all models, including ceo/neo and Classic/X.
- We look at factors that indicate a softening of wide-body demand across the Atlantic.
Finnair exanding Far East faster than planned
By Bjorn Fehrm
May 26, 2016, ©. Leeham Co: Finnair could tell the participants on its Capital Markets Day yesterday that its Asia expansion plans are going better than planned. Being the Finnish national flag carrier, Finnair has had its slew of legacy airline problems, fighting the up-and-coming LCCs on its European network.
Figure 1. Finnair’s Airbus A350-900 taking off from Toulouse. Source: Airbus
After a restructuring period 2008 to 2012 to adjust costs, things have turned for the better. The company announced a revised strategic plan 2014, which would build on the strategic position of its hub, the Helsinki Vaanta airport, for traffic to the Far East.
Finnair CEO, Pekka Vauramo, could yesterday announce that this strategy is working better than planned.
Pontifications: ICAO continues to drag feet on real-time data transmission
By Scott Hamilton
May 23, 2016, © Leeham Co.: Malaysia Airlines MH370. Air Asia 8501. Egyptair 804.
Three passenger flights lost over the oceans. One, MH370, remains undiscovered to this day. Air Asia took a couple of weeks to locate. Egyptair debris took about 36 hours. The black boxes are still missing from MH370. Once the Air Asia wreckage was discovered, the boxes were recovered fairly quickly. According to media reports, the black boxes of 804 have been “generally” located, but Egypt has dispatched a submarine to more precisely locate them.
The absence of real-time data transmission from the Flight Data Recorders contributed to the mysteries of what happened to these aircraft and spurred wild theories and conspiracies. ACARS, which does transmit data from airborne aircraft, does so at intervals–not real-time. Real-time data streaming from on board transmissions could provide immediate answers to what happened to an airliner.
How good is a MAX 7X and why would it replace the original? Part 4
By Bjorn Fehrm
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Introduction
May 23, 2016, ©. Leeham Co:In Part 1 to Part 3 of this article series,we looked into the reasons behind that Boeing is considering changing the 737-7 MAX into a slightly larger 737-7X.
Figure 1. Boeing’s 737 MAX 7. Source: Boeing.
When an aircraft gets larger, its operating costs increase, everything else being equal. At the same time, it can take more passengers. This will increase the aircraft’s revenue generating capability, assuming the network can generate the traffic level needed.
To understand the difference in revenue capability for the 7 and 7X we will now develop their Direct Operating Cost (DOC) and compare these with the revenue generation capability of the aircraft. This gives the margin capability and one can establish where the cross over point would be between 737-7 and 7X with respect to margin for the airline.
Summary
- We develop the Direct Operating Costs (DOC) for the 737-7 and -7X.
- We also develop the revenue streams of the aircraft over typical missions.
- When compared, the margin of the aircraft will result and it will be possible to define the extra passenger count needed for the 7X to deliver the same margin as the presently defined 7 MAX.
- We then can establish the revenue upside potential for a 737-7X over the 7.
Bjorn’s Corner: Transponders, the kingpin of safe air navigation
By Bjorn Fehrm
May 19, 2016, ©. Leeham Co: In my recent Corners, I have been describing how a modern airliner navigates using a Flight Management System, (FMS or Computer, FMC) to navigate along the flight plan and how it finally uses an instrument landing system to safely land the aircraft even in bad weather.
When looking into instrument landing systems, we have described the legacy systems which require large ground installations (such as ILS) and how these can be replaced in the future with smarter concepts using GPS based procedures.
I will now continue on this path and describe some of the additional cornerstone technologies needed to implement a modernized Air Traffic Control (ATC) system, which can replace today’s systems that have their roots in World War 2 (WW2) technology.
We will start today with how aircraft can be seen from the ground or other aircraft without visual sight or Radar contact. Read more
Areas of inquiry in Egyptair 804 crash
May 19, 2016: (c) Leeham Co.: Investigators will look into many areas of interest, all a
An Airbus A320 like this one operated by Egyptair disappeared last night in what is already suspected terrorism. Photo via Google images.
matter of routine, into the disappearance and crash of Egyptair 804.
According to media reports, debris and bodies have been found in the Mediterranean Sea. The Airbus A320 disappeared on a flight from Paris to Cairo. There have been several media reports of in-flight fire observed in the sky and maneuvers of the aircraft. Russian officials and others say terrorism is likely.
LNC urges caution in drawing conclusions, however.
The following are areas of investigation:
How good is a MAX 7X and why would it replace the original? Part 3
By Bjorn Fehrm
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Introduction
May 16, 2016, ©. Leeham Co: In Part 1 and Part 2 of the article series we have described the rational for Boeing to change the definition of the 737-7 MAX into something that has the working name of 737-7X. This is a 737-7 variant that is based on a shortened 737-8.
Figure 1. Boeing’s 737 MAX 7. Source: Boeing
In the previous articles we defined a probable size for such a cut down 737-8. The size is determined by economical criteria where the second most dominant cost in an airlines operation, the crewing cost, is the sizing criteria. These costs have a step increase if the aircraft’s seating go beyond 150 seats.
We sized the 737-7X cabin size (and therefore fuselage length) to avoid such cost increases. In this article, we will compare the resulting main data for a 7X to the original 7 and compare their fuel efficiencies.
Summary
- A 737-7X will be a larger and heavier aircraft than the original MAX 7.
- As such it will consume more fuel per mission; its aircraft fuel mile costs will be higher.
- The key comparison for an airline is the fuel consumption per seat mile for its missions. It would be vital that this is lower for a 7X than the presently defined 7.
- We check if this is the case with our proprietary performance model.