Leeham News and Analysis
There's more to real news than a news release.
CNAC reunion features surviving WW II pilot, C-47/DC-3
This past weekend we attended a reunion of two of the living pilots, descendents, friends and interested public of the China National Aviation Corp. at the San Francisco International Airport.
We did a detailed write-up for CNN.com. This story and some photos are here.
There was a lot that didn’t fit into the CNN article, for space and for the thrust of the article. In a departure from our usual aviation coverage, we’re sharing the experience below.
Final A330neo analysis; cabin improvements gives the A330neo gains over today’s A330
When we did our analysis of the A330neo after the Farnborough launch we limited our checks to trip fuel efficiency as we did not have enough clarity of the cabin improvements that Airbus announced. After a meeting in Toulouse last week with Airbus cabin experts we know have the missing information.
Airbus gives the A330 cabin an interesting update for the A330neo. It comprises A330 ideas (improved crew rests), A350 ideas (improved lighting and IFE) and finally ideas tried out on the A320 (SpaceFlex and SmartLav lavatories). Combined they give the A330neo cabin a better passenger experience and improved utilization of cabin space. Read more
Throwback to the 1930s
This weekend we’re heading to San Francisco in style–1930s style. We will be on the Historic Flight Foundation’s Douglas DC-3 from Everett Paine Field to SFO for a reunion of the China National Aviation Corp., CNAC, including a 100-year old veteran of the airline.
We’ll be on HFF’s DC-3, the only surviving CNAC plane, which is today painted in the colors of Pan American World Airways from the era. PAA owned a piece of CNAC before World War II.
This Douglas DC-3, owned by the Historic Flight Foundation, was operated at one time by China’s CNAC and later as an executive aircraft. It still has the executive interior and panoramic windows of the executive configuration. Photo by Gail Twelves.
The plane eventually became an executive transport and the executive interior is still in it.
The flight will be about four hours each way. This will be the third time we’ve taken a ride on the aircraft, and this will be the longest. Previous rides were an hour long.
Look for our report from the trip on CNN.com, International, Travel next week as well as some additional information here.
Odds and Ends: Boeing leads net orders YTD; A320neo; ExIm Bank; Frontier Air
Airbus vs Boeing orders: Airbus reported its order tally through August and while it surpassed 1,000 gross orders, it’s net orders trail Boeing significantly. This article sums things up nicely, though it doesn’t include Boeing’s last four days of August. Boeing reports weekly and the latest report is due out today. Through August 26, Boeing trails Airbus slightly in gross orders but leads in net orders.
Update: Boeing just posted its weekly order tally: 1,004 gross orders (to Airbus’ 1,001) and 941 net orders, still well ahead of Airbus’ net orders.
A320neo first flight: Airbus will launch the first flight of the A320neo this month for the airborne test program. This is powered by the Pratt & Whitney GTF; the CFM LEAP A320neo is supposed to follow by about six months. Entry-into-service for the GTF neo is planned for October 2015.
ExIm Bank: Members of Congress are looking at a short-term extension of the ExIm Bank‘s authority (read: until after the November election).
Frontier Airlines: This carrier is rapidly converting to an Ultra Low Cost Carrier business model, a process begun several years ago and accelerated last year. Aviation Week has an article that takes a look.
Go Seahawks: The NFL season opens tonight with the 2014 Superbowl champs Seattle Seahawks hosting the Green Bay Packers. Go Hawks!
Buckingham lowers Boeing to Underperform (sell), others increasingly bearish
Update: 24/7 Wall Street just published this gloomy outlook about Boeing.
Buckingham Research Group today lowered its call on The Boeing Co. from Neutral to Underperform, the equivalent of Hold to Sell. As far as we can tell, this is the first research analyst to put a sell on Boeing in recent years.
According to Thompson/First Call, 10 analysts rate Boeing as a Strong Buy, nine as a Buy and seven as a Hold. None rated Boeing as an Underperform or a Sell (Thompson separates the two ratings; Buckingham’s Underperform is a Sell). According to Thompson/First Call tallies on Yahoo Finance, there hasn’t been a downgrade to sell since 2008, when the 787 program problems were ramping up.
Buckingham has become increasingly pessimistic in recent months about Boeing, so the new rating isn’t necessarily a surprise, and Buckingham isn’t alone. Bank of America Merrill Lynch recently downgraded Boeing to Neutral and in June RBC Capital Markets downgraded Boeing to Sector Perform from Outperform. Wells Fargo and Credit Suisse analysts have been raising concerns in recent notes but haven’t downgraded Boeing, and UBS has been bearish for some time.
Buckingham cited anticipated worsening free cash flow as its principal reason for the downgrade, driven by BRG’s forecast of lower 777 production rates and higher than Boeing’s forecasted $25bn in deferred production costs for the 787. BRG also cited about 1,500 737s not yet added to the accounting block it believes have been sold at steeper discounts than historically.