Here’s a visualization of events to look for in commercial aviation in 2015.
Posted on December 26, 2014 by Scott Hamilton
Airbus, Boeing, Bombardier, CFM, China, Comac, CSeries, Embraer, GE Aviation, Mitsubishi, Paris Air Show, Pratt & Whitney, Rolls-Royce
767-2C, A320NEO, A350-1000, A350-900, A380neo, air force tanker, Airbus, Boeing, Bombardier, CFM, CSeries, E-Jet E2, Embraer, GTF, KC-46A, LEAP, MC-21, Mitsubishi, MRJ, Pratt & Whitney, Qatar Airways, Rolls-Royce, Trent XWB
Posted on December 24, 2014 by Scott Hamilton
While we’re in the slow-news Holidays, we thought we’d have some irreverent fun. There have been many attempts at building airliners. There are the obvious successes but there have been many, many failures. Starting with the end of World War II, we’ve collected the following for our nominees for duds–sales or technological failures. We invite readers to make their own nominations. If you have photos, add them to your Comments.
This list is in no particular order. Next week we’ll construct a poll to see how the airplanes rank. Read more
Posted on December 23, 2014 by Scott Hamilton
Airbus, Airlines, American Airlines, Boeing, China, Comac, Douglas Aircraft Co
707, 727, 880, 990, Airbus, Airlift, American Airlines, ARJ21, AVIC, BEA, BOAC, Boeing, Braniff Airlines, Bristol, Britannia, British European Airlines, Budd, Canadair, CL-44, Comac, Comet, Constoga, Convair, Dassualt, DC-4 M2, DC-8, de Havilland, Electra, Flying Tiger, Fokker-VFW, Fokker-VFW 614, Howard Hughes, Lockheed, Lockheed Electra, Loftleider, Martin, Martin 202, Martin 303, Martin 404, Mercure, Seaboard World, Stratocruiser, Trident, TWA, United Airlines
By Bjorn Fehrm
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Introduction
Dec. 21, 2014: Last week we did a deep analysis of A380 and its competition. It has been windy weeks for the aircraft since the Airbus Global Investor Forum and it was time to bring some needed facts on the table. These facts showed there is a clear difference between the hype being perpetuated in the media and the reality. As we cleared the situation around the A380, we also touched on the large twins that could fulfill at least parts of its missions.
There has been a lot of discussion around these aircraft as well as they form the battle of titans one level down from A380, the large, long-haul market today dominated by Boeing’s 777-300ER (the A380 does not have a real competitor–the 748i is clearly smaller, in fact so much smaller that it will be engulfed by the 777-9X).
Summary
Posted on December 21, 2014 by Bjorn Fehrm
Dec. 21, 2014
Qatar gets first A350-900: Unless U-Turn Al U-Turns again, Qatar Airways
Source: USA Today.
will take delivery of the world’s first Airbus A350-900 on Dec. 22. Reuters has a retrospective of the airplane’s development.
WTO Airbus-Boeing fight, continued: It never ends. As we reported Friday, the European Union filed a complaint with the World Trade Organization over Washington State tax breaks extended to Boeing for the 777X. Long-time readers of this column know how we feel about the WTO generally and the trade dispute between Europe (Airbus) and the US (Boeing) specifically. We consider it all a waste of time and money.
Now that the EU has officially complained about the 777X tax breaks, we fully expect the US Trade Representative to officially file a counter-action against allegations Airbus is receiving illegal subsidies for the A350. During the height of the previous complaints, USTR and Boeing complained about launch aid provided for the A350. The EU said this aid complied with the findings and compliance requirements of the previous dispute. The USTR tried to wrap the A350 aid into the then-ongoing complaint, which was rejected by the WTO for procedural reasons.
Posted on December 21, 2014 by Scott Hamilton
The European Union has filed a complaint with the World Trade Organization over $8.7bn in tax breaks offered by Washington State to Boeing in exchange for locating the 777X assembly site and wing production plant in the state.
Reuters has this report.
We raised concerns at the time the breaks were offered that these were illegal. These were extensions of the state tax breaks provided in 2003 for the Boeing 787 program, which were ruled illegal in 2012 under a separate EU complaint to the WTO.
Our stories are here and here. Boeing recently issued a card talking about the tax breaks. This may be found here.
Reuters reported earlier that the 777X complaint might be filed.
Update, 1:00pm: Boeing provided this statement in response:
“The EU already failed to make these claims as part of the current proceedings.
“The EU’s effort to again raise this issue is a mere diversion from the fact that European governments have provided, and continue to provide, massive amounts of illegal launch aid to Airbus for every airplane development program. It is an effort to further delay EU compliance with the WTO’s 2011 ruling that launch aid is an illegal, market-distorting subsidy.
“The tax measures the EU challenges today are not market-distorting subsidies. They are available to all aerospace companies, including Airbus and its suppliers.”
Posted on December 19, 2014 by Scott Hamilton
Dec. 18, 2014: Air France-KLM said today that it will defer delivery of 10 Boeing 777-300ERs scheduled for delivery in 2015/16 due to lower than expected financial results and because the current fuel price environment makes taking the airplanes less compelling.
This is the first high-profile deferral that we know of citing the thesis we’ve been talking about: that the current fuel price environmental threatens the Classic wide-body airplanes (as opposed to the next generation of re-engined, new technology aircraft).
Bloomberg News has this report. The key passage:
The carrier had earlier planned to take about 10 Boeing 777s in 2015 and 2016 and will now look to postpone those deliveries, the CFO said. One reason the airline can afford not to take the new planes is that the lower oil price reduces any gains from having more fuel-efficient aircraft.
Posted on December 18, 2014 by Scott Hamilton
By Bjorn Fehrm
Subscription required.
Introduction
Dec. 18, 2014: In our Monday article we go behind the scenes of the doubts that were spread over the A380 by Airbus last week. To complete the picture we now update our competitive analysis that we did in February this year. We then compared the A380 to Boeing’s 747-8i, the 777-300ER and the forthcoming 777-9X. We also included Airbus closest aircraft, the A350-1000.
A lot has happened since then. Airbus has done a lot of work on the passenger area of the A380 to offer increased passenger densities and the pictures of the emerging Boeing 777-9X and Airbus A350-1000 is now clearer.
Sales efforts of the A380 has also progressed, with meager results despite adding a leasing proposition what should make the hurdles of operating a small sub-fleet of A380s lower. To understand why, we interviewed Mark Lapidus, the CEO of Amedeo, the leasing company which specializes in financing and leasing of A380s. We wanted specifically to talk to Lapidus about the reactions of the airlines to the A380 and what problems he saw in selling an aircraft of this type.
In preparing the article we also gathered additional info from Airbus and Boeing, from the former around their work on the cabin configurations and densities, from the latter the maintenance costs for the up and coming 777-9X.
Summary
As we did this deeper study, a more nuanced and different picture emerged from the one seen in February. The results busts a number of deeply engraved myths, one being that four engines are more expensive to fly and maintain than two.
Posted on December 17, 2014 by Bjorn Fehrm
Dec. 17, 2014: There is a production gap for single-aisle Airbus and Boeing airplanes that could be exacerbated by the current dramatic drop in oil prices, writes the aerospace analyst for the investment bank UBS in a research note issued today.
Heretofore, focus has been on the production gaps for the Airbus A330ceo and the Boeing 777 Classic, with analyst consensus of those reports we have seen pointing to gaps they believe are insurmountable, and which will demand a rate cut.
Figure 1. UBS Graphic, modified by Leeham Co. Airbus announced Rate 9 for the A330 and indicated a lower rate. Boeing hasn’t announced any rate reduction for the 777 but analysts suggest the lower rates illustrated (left). Click on image to enlarge.
Airbus has formally announced the rate on the A330 will decline from 10/mo to 9/mo in 4Q2015. At its Global Investors Forum last week, Airbus displayed a graphic that shows a further rate decline. Although officials did not place a number on the rate, our interview with an analyst present said Airbus later indicated a “floor” of 6/mo is anticipated.
Boeing continues to insist it will be able to maintain the current production rates of 8.3/mo for the 777 Classic to the introduction of the 777X in 2020, but analysts predict rate cuts to seven then five and perhaps even four by the time 2020 rolls around.
Posted on December 17, 2014 by Scott Hamilton
Indian airline Spicejet, which has been struggling financially, was grounded today when credit was withheld to buy fuel. The airline has eight Boeing 737-800s and 42 737-8s on order. The -800s are scheduled to be delivered next year; the MAXes are scheduled for delivery in 2018-2023 on a roughly even number per year in the earlier years.
There have been a number of stories hand-wringing over the adverse impact to Boeing. While no OEM likes to lose an order of this size, should Spicejet cease operations permanently, we don’t view this as having any impact on Boeing. The company is already strained to find delivery slots for the MAX, so this gives Boeing slots to resell. The eight -800s scheduled for delivery next year, being close-in, could be more problematic, but we have no doubt homes can be found for these airplanes without too much trouble.
The hand-wringing is unnecessary.
We view the airline’s difficulty as another example of the problematic Indian marketplace. The blog Flying Engineer follows the Indian market closely and checking out a number of its posts will paint a comprehensive picture of the Indian market. We view this market as highly risky, with Airbus having a much greater exposure than Boeing. AirAsia, a carrier on our Storm Warning Flag list, recently expanded to add a new subsidiary service in India, a move we question given an environment that is essentially hostile to airline operations.
Posted on December 17, 2014 by Scott Hamilton