Leeham News and Analysis
There's more to real news than a news release.
Bjorn’s Corner: Engine efficiency
18 September 2015, ©. Leeham Co: The debate around the market’s two single aisle combatants is quite heated, with fans of the one side saying “the limited space for a high bypass engine on the 737 MAX will cripple it forever” and the other side saying “the tighter design of the 737 will make it highly competitive against the A320neo, it is the A320 which has a weight and size problem”.
One of the arguments is that each inch of engine fan diameter brings 0.5% in increased propulsive efficiency. Therefore the A320 with up to 81 inches fans will win against the 737 MAX, which has a 69 inch fan. Having all the tools to check out if this is really the truth, I fed our airplane model with all the facts and looked at the result. It’s not so easy, guys…
A320 FAL “good for US aerospace,” says Airbus
Sept. 16, 2015, © Leeham Co., Mobile (AL): The opening of the Airbus A320 Final Assembly Line here
achieves a major set of goals set by the company 10 years ago for its own strategic purposes, but officials are also mindful of the larger impact on US aerospace.
David L. Williams, VP Procurement, Airbus Americas. Photo via Google images.
Top executives point out that the Mobile plant reestablished a second commercial aviation assembly site in the US since the last MD-11s and MD-95s rolled out of the former McDonnell Douglas plant in Long Beach (CA) after its acquisition by The Boeing Co in 1997. Boeing continued production of the MD-11 until the end of 2000 (with deliveries occurring in 1Q2001). The last MD-95, renamed the Boeing 717, was produced in 2006. There were 200 MD-11s and 156 717s produced.
With nearly 10 years elapsing between that last 717 and the first A321ceo coming out of Mobile, Airbus officials say the creation of the FAL is not only good for Airbus and Alabama, it’s good for US aerospace.
New single aisles on home stretch
By Bjorn Fehrm
16 Sep 2015, © Leeham Co.: Boeing released pictures yesterday of the first 737 MAX 8 being on the Renton Final Assembly Line (FAL) having completed the wing-to-body joins. With the Airbus A320neo now flying again with both Pratt & Whitney GTF and CFM LEAP test vehicles and Bombardier completing 85% on CSeries (having passed 2,400 hours of flight testing), one can say the new single aisles are on their home stretch.
737 MAX on the Final Assembly Line at Renton, Seattle. Source: Boeing.
Original planning had the CSeries entering service in December 2013, nearly two years before A320neo (October 2015) and four years before the 737 MAX (4Q2017). With the 737 MAX now on the FAL one can start to review the Entry into Service (EIS) for all three. It will be tighter than the companies have said.
Airbus Mobile FAL a victory for CEO Enders
Sept. 14, 2015, © Leeham Co., Mobile (AL): The opening of the Airbus Mobile (AL) A320 Final Assembly Line (FAL) is viewed by some close associates as a personal victory for Tom Enders, the chief executive officer of Airbus Group.
Enders began the quest of a US FAL 10 years ago, when EADS (then the name of Airbus’ parent, now Air Group) joined with Northrop Grumman to bid on the US Air Force Refueling Tanker, the KC-X. The Boeing Co. was the competition, and supplied tankers to the USAF since the end of World War II.
Embraer CEO interview: oil prices, Brazil’s economy, China
Paulo Cesar, president and CEO of Embraer’s commercial aviation unit. Photo via Google images.
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Introduction
Part 3
Sept. 14, 2015, © Leeham Co. It’s only been three months since the Paris Air Show and there have been some significant developments in the world that have impact on commercial aviation:
- Oil prices dropped from about $62/bbl to a low of $38 in mid-August and it’s climbed back to about $46 this week;
- China devalued the Yuan;
- The Brazilian economy has deteriorated and so has the domestic political situation; and
- Some LCC airlines in Asia are feeling the strain of growth and weakening currencies.
We talked with Paulo Cesar, president and CEO of Embraer at the Paris Air Show on some of these topics. We caught up with him Sept. 2 in Seattle, revisiting these topics and talking about more.
Pontifications: Boeing view of market conditions today
By Scott Hamilton
Sept. 14, 2015, © Leeham Co.: Randy Tinseth, Boeing’s VP Marketing, spoke with Bernstein Research last week on a variety of topics. In a note issued after the conversation, analyst Douglas Harned reported:
- “Boeing views the 140 orders to date as a good start, and that high demand for this model will come later when it is closer to being in service. Boeing is sold out for all models of the 787 through the decade, so there are few opportunities for near/medium term deliveries in any case. The company sees the 787-10 as a natural replacement for 767s, A330s and some 777s, and expects that these will drive strong replacement
Randy Tinseth. Photo: Boeing.
demand in the early 2020s.”
- “Airlines have been upgauging narrowbodies away from the 737-700 and A319. Boeing expects that the 737-900ER will gain share, but that the 737-800 (or soon the 737MAX-8) will remain its most popular narrowbody. Airlines have been moving to larger narrowbodies and using slimline seats to add capacity to existing airplanes. Boeing believes that, while this trend does exist, the market will be centered on the 737-800/A320-size airplanes, but with a larger share than in the past going to 737-900s/A321s. Boeing believes that its product set offers greater flexibility since the 737-800 and 737-900ER are closer together in size that are the A320 and A321.”
- “In terms of orders for the 777, the companyis sold out in 2016 and is over 60% sold out for 2017, with many campaigns in progress. Production of the 777X would start in 2018 and current 777 rates will be lowered to introduce the 777X in the final assembly line (consistent with our projections). There are some 737NG slots left in 2018 and 2019, but the first available slots for the 737MAX are now in 2021.”
Airbus FAL in Mobile (AL), Part 2
Sept. 13, 2015, (c) Leeham Co., Mobile (AL): The new Airbus Final Assembly Line (FAL) opening today here will serve the US market, a plan that follows the philosophy when the company opened an FAL in
Barry Eccleston, president and CEO of Airbus Americas. Photo via Google images.
Tianjin, China years ago.
Just as that plant is intended to serve the Chinese airlines and lessors, so is this one for the US market.
Barry Eccleston, president and COO of Airbus Americas, said there remains plenty of growth in the North American market, which is considered mature in the global airline industry.
Traffic is going to go up 40% over the next 20 years, he said. Ninety percent of this 40% will come from existing routes, says Eccleston. This means the airliner are buying larger airplanes. A major number of the orders are for the A321s, which can carry up to 240 passengers.
“Our original plan was to open the Mobile plant with A320s, but it is with A321s.”
Even at 4/mo, the Mobile facility isn’t filing the need for A320s in the North American market, Eccleston said. There is a demand for nearly 6,000 passenger and freighter aircraft in North America over 20 years: 4,730 single-aisles, 1,000 twin aisles and 170 A380s.
A321s in Airbus Mobile FAL
Sept, 13, 2015, (c) Leeham Co., Mobile (AL): The first two A321ceos are on the Final Assembly Line (FAL) at the new Airbus plant here in Mobile (AL).
JetBlue is scheduled to take the first delivery in the second quarter next year, followed by an A321ceo for American Airlines by the end of next year.
The slow pace reflects the need to certify every step of the assembly process, which begins nest week with an audit by Europe’s EASA, through the learning curve necessary for a new facility and training the hundreds of employees initially hired.
By the end of next year, Airbus plans to be assembling A320ceos at the rate of four per month, the initial target for this first manufacturing facility on US soil. The plant has the capacity to produce eight a month.
Bjorn’s Corner: Production costs.
By Bjorn Fehrm
11 September 2015, © Leeham Co: In connection with our articles, there a numerous reader discussions around the development and production costs of new aircraft families. It’s not easy to understand how these costs arise, how they are booked in the OEM’s accounting and how they can be compared. Time for a primer.
I will not duplicate a course in company accounting, but it can be worth the read to understand how costs are created, accounted for and what we as externals can observe via aircraft industry economic reports .
I will focus on Airbus and Boeing. These are good examples of the different ways of collecting and showing costs in the global aircraft industry.
Airbus ‘confident’ engine makers can ramp up production
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Introduction
CFM makes about 50% of the engines on the A320 Family and has about 50% of the backlog for the New
Tom Enders, CEO of Airbus Group. Airbus photo.
Engine Option version. Pratt & Whitney has about the same market share for the NEO, depending on what month it is, with a large number of orders for which no engine has been selected.
Airbus and Boeing are each studying whether to ramp up production of the A320 and 737 families above the record rates already planned.
In an interview Sunday with Leeham News and Comment in advance of the A320 Final Assembly Line opening here, Enders said studies continue whether to take A320 production rates to 60 a month. Boeing is studying rates of 60-63 a month.
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Posted on September 17, 2015 by Scott Hamilton
Airbus, Boeing, CFM, Leeham News and Comment, Pratt & Whitney, Premium
737 MAX, A320NEO, A380, A400M, air force tanker, Airbus, Airbus Group, Boeing, CFM, Fabrice Bregier, John Leahy, KC-46A, KC-X, Pratt & Whitney, SkyMark, Tom Enders, Transaero, USAF, Virgin Atlantic Airways