Leeham News and Analysis
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Evaluating airliner performance, Part 2
By Bjorn Fehrm
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Introduction
Sep. 24 2015, ©. Leeham Co: In the second part of our series about comparing and evaluating economic and operational performance of airliners, we look at the parts beyond fuel that make up the Cash Operating Costs (COC) for an airliner.
While fuel consumption, crew costs and aircraft maintenance costs can be evaluated in a way which closely resembles reality, other costs in the COC are too complex to model in their true form.
This is the case for underway or airway fees, landing fees and station fees. Here, just about every country/airport in the world has taken the liberty to invent its own charging principles and formulas. With several hundred different formulae for these charges, the way out is to use industry-accepted approximation for these costs.
Summary:
- We establish how crew cost are modeled for our evaluation missions, taking into account the complex world of work time regulations for pilots and cabin crew.
- We also describe how we handle airframe and engine maintenance costs and how these get allocated to our missions.
- Finally, we describe how the complex underway and landing/station costs are modeled with the accepted approximations these require.
Boeing announces big China order–but how big is it, really?
Sept. 24, 2015, (c) Leeham Co. Boeing yesterday announced a deal pegged at $38bn for 300 jets for China, timing the announcement with the State visit to Seattle of Chinese President Xi Jinping.
Orders and Commitments for Boeing Commercial Airplanes
Boeing and China Aviation Supplies Holding Company (CASC) have signed a General Terms Agreement related to the purchase of 300 airplanes. The package has a value of approximately $38 billion at list prices.
Aircraft orders and commitments include:
(240) airplanes for Chinese airlines, including (190) 737s and 50 widebody aircraft
(60) 737s for leasing companies ICBC and CDB Leasing
“Boeing airplanes have played an important role in supporting the development of China’s aviation transportation for the past 40 years,” said Li Hai, president of China Aviation Supplies Holding Company. “These additional airplanes will further help connect the people in China and around the world.”
“China is a critical international market for commercial airplanes,” said Conner. “We thank our Chinese customers for selecting fuel-efficient Boeing airplanes to meet their fleet growth and expansion.”
But the information above is remarkably vague on detail. Questions immediately arose on Wall Street over just how big this deal truly is.
Bjorn’s Corner: USAF Tanker program
By Bjorn Fehrm
25 September 2015, ©. Leeham Co: When Scott Hamilton asked me to give my view on his article “Pontifications: Duelling refuelling tankers” I accepted. I was not involved in the project and was only following it casually over the years.
I will also not give my view on what would have been the most suitable tanker for the US Air Force. I simply don’t have the relevant military competence for that, having never operated my fighters with aerial tanking nor been in an aerial tanker aircraft.
Where I have relevant competence is in writing military specifications for important aircraft procurements and the excerpts I have seen from the tanker RFQ on key specification points don’t impress. Let me explain.
Muilenburg’s opportunity with Boeing unions
Dennis Muilenburg, president and CEO of The Boeing Co. Seattle Times photo via Google images.
Sept. 23, 2015, © Leeham Co. The plan to open a 737 Completion Center in China is an opportunity for Boeing Commercial Airplanes (BCA). It’s also an opportunity for Dennis Muilenburg, who was named chief executive officer of The Boeing Co. only last June.
Ray Conner, CEO of BCA, wrote employees in Washington State, where the 747 is assembled, that no jobs will be lost to the Completion Center.
Leadership and members of Boeing’s touch labor under, IAM 751, are understandably skeptical. As noted in yesterday’s post on this, 751 leadership expressed its concern even before Chinese President Xi landed at Paine Field in Everett, where Boeing’s wide-bodies are produced.
Chinese 737 Completion Center makes tactical, strategic sense
Sept. 22, 2015, © Leeham Co. The expected announcement by Boeing and Chinese President Xi during
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President Xi of China. Photo via Google images.
his state visit to Seattle this week that Boeing will develop a Completion Center for the 737 in China is a significant event that may one day lead to an assembly line there.
Boeing’s touch labor union, the IAM 751, was predictably critical. In a post on the 751 website last week, the union said, “In a previous meeting with Renton’s 737 leadership we saw a brief presentation outlining Boeing’s perceived market conditions regarding sales of single aisle aircraft and the company’s desire to collaborate with China. We have asked the Company for details of what is intended with “collaboration” and have not received ANY information on “collaboration” or confirming or disputing the media reports. While we don’t know specifics of any such proposal, ANY shift of aerospace jobs from our bargaining unit or Washington State causes grave concern.”
Pontifications: Dueling refueling tankers
By Scott Hamilton
Sept. 21, 2015, © Leeham Co.: This Friday, Sept. 25, is the date that at long last, Boeing and the US Air Force expect the first flight of the KC-46A that is equipped with the fueling system.
A “bare” KC-46A made its first flight last December. Then it spent the next six months or so on the ground. First flight of the second KC-46A, the one with the fueling system, has been delayed several times. All the program margin is gone and it’s going to be a challenge for Boeing to stay on schedule to deliver 18 combat-ready KC-46As to the USAF by 2017–two short years away. To try and stay on schedule, Boeing started production of the the airplane concurrent with the flight test aircraft, a risky proposition that could result in major rework or other difficulties if Murphy’s Law comes into play.
The KC-46A is the successor to the KC-767 International tanker program, which was an industrial disaster. Only eight airplanes were produced, four for Italy and four
Boeing KC-46A makes its first flight Sept. 25, 2015. Photo via Google images.
for Japan. It ran years late and hundreds of millions of dollars over budget. There were flutter and design issues. These problems became part of the risk assessment by the USAF in the KC-X competition evaluation between Boeing and Northrop Grumman/EADS–and one of the reasons why the Air Force selected the Northrop KC-330 offering (later named the KC-30).
Boeing successfully challenged the contract award and won the next round with what became known as the KC-46A. Boeing claimed it benefited from lessons learned from the KC-767 International program.
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…
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.
Summary
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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