Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing’s 737 North Line and the Everett factory: in transition now June 9, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 25. June 6, 2025
- New RISE powerplant benefits from decades of GE research and development June 5, 2025
- Engine makers emphasizing durability, reliability June 4, 2025
- Boeing CEO: Lessons learned are key to certification of 737-7/10 and 777X June 2, 2025
American, US Airways respond to DOJ complaint
American Airlines and US Airways filed their responses to the DOJ lawsuit seeking to block the merger. The Dallas Morning News has this synopsis. The full, 50-page US Airways response is here.
There’s one element that particularly caught our eye, and that is market share. While DOJ points out that the New American, along with Delta Air Lines and United Airlines, would control some 80% of the available seat miles (a statistically correct figure), AA and US point out that in terms of domestic market share, Southwest Airlines, other LCCs plus Alaska Airlines and Hawaiian Airlines control 40% of all domestic passengers.
The Complaint’s focus on legacy airlines causes it to ignore the most meaningful competitive development in the airline industry since deregulation: the emergence of low cost carriers. Southwest, which in 1978 was an oddity limited to intrastate flying in Texas, is now the country’s largest domestic airline, carrying more passengers last year than any legacy carrier and more than US Airways and American combined. Other low cost carriers, including JetBlue, Spirit Airlines, Virgin America, Sun Country, and Allegiant, are expanding at dramatic rates. These carriers, together with Southwest and regional competitors Alaska Airlines and Hawaiian Airlines, now transport over 40% of all domestic passengers, and that share continues to grow. The demonstrable success of low cost carriers is a market driven response to consumer demand, but the Complaint inexplicably ignores their profound and permanent effect on industry competition.
In fact, Southwest has for many years carried more domestic passengers than any other airline–which begs the question, why didn’t DOJ block the Southwest-AirTran merger, which would only increase and consolidate this concentration?
The court should find for AA and US. This lawsuit is an embarrassment to DOJ for its political motivations, poor research and lack of understanding of the airline industry.
Who needs a 747-8I? Air Canada puts 458 seats in 777-300ER
Holy crammed-in-coach, Batman!
Air Canada has configured its latest Boeing 777-300ER with 458 seats, in three classes. How in the world? Airline Reporter tells how, and we wouldn’t want to be stuck in coach.
We’ve been writing for some time the Boeing 747-8I is squeezed from the bottom by the -300ER and from the top by the Airbus A380, but this configuration on the -300ER is pretty extreme. Boeing claims seating of 467 for its 747-8I when it compares its Very Large Aircraft with the A380 (a configuration that is unrealistic–it should be 405 in typically airline layout).
Seatguru.com has this illustration of Air Canada’s -300ER seating.
Airline Reporter doesn’t say who makes Air Canada’s new coach seats. Recaro seems to be a popular supplier, providing its slimline seats to Qatar and Alaska Airlines, among others. We’ve been in Alaska’s Recaro-equipped coach class and while AS touts these as state-of-the-art comfort, we were less impressed. There was little lower back support unless sitting firmly in the seat, and the recline isn’t enough unless you slouch. The headrest is in the wrong position for good neck support (for a 6-footer). We also sat in Qatar’s Recaro coach seat when the airline showed its first Boeing 787 off to media and invitees, and we weren’t impressed then, either. Slimline design notwithstanding, it was still cramped. On the other hand, Qatar uses BE Aerospace-designed fancy business class seats and these were the first we’d seen where you don’t have to be an engineer to figure out the controls, figuratively speaking.
Since we started out with a Hollywood saying, we’ll end with one. Coach class on international flights, especially considering 17 inch wide seats and narrow seat pitch: as Danny Glover’s character in Lethal Weapon said, “I’m too old for this [stuff].”
Odds and Ends: 787 fulfilling dream; Weather worsens for CSeries; Painting out logos; plane vs car
787 Opens New Routes: The Boeing 787 is still getting some negative headlines about dispatch reliability, but the plane is proving Boeing’s underlying message about opening new, “thin” routes. The Tacoma News-Tribune has this story detailing how the 787 is fulfilling the dream (so-to-speak).
CSeries First Flight: The weather forecast in Montreal deteriorated further overnight. Now rain is predicted through Saturday, making first flight unlikely until at least Sunday.
Guess Whose Airplane? You’d never know from the titles and logo painted out, would you?
NBC News Photo
CNN has this story on the matter. This is the first accident in 12 years, according to Wikipedia when a crew member was killed in a fire that destroyed a Boeing 737 on the ground. The last accident involving passengers was in 1998, according to Wiki.
Speaking of Accidents: Here’s an unusual one: A Delta Air Lines commuter plane struck a car parked on the tarmac while the plane was being towed.
ClickonDetroit photo.
Let’s see the owner of the car explain this one to his insurance company.
Odds and Ends: S&P; C-17; AA-US merger (again); 777X wing work; WA aerospace future
S&P says don’t pay attention to our ratings: On the same day Delta Air Lines was named to the S&P 500, The Los Angeles Times had this article commenting on Standard & Poor’s legal defense of its investment grade credit ratings of companies involved in the 2008 financial collapse in the US that led to the global recession in 2008, affects of which are still felt today.
S&P’s defense included the argument that nobody should pay attention to its ratings, according to the article.
The ratings issue is important because airlines, lessors (and, of course, others outside aviation) covet investment grade ratings for the capital-intensive aerospace industry. Airlines and lessors need “cheap” money to buy airplanes. Air Lease Corp recently obtained its first investment grade rating, for example, something for which it issued a press release. Delta gained headlines for its return to investment grade status. Airlines have long used S&P, Moody’s and Fitch for rating equipment trust certificates used to finance airplanes.
The columnist for the LA Times is incredulous that S&P’s legal defense in the federal lawsuit is, essentially, nobody should pay attention to its ratings. It is indeed remarkable.
Final C-17 for US Military: Boeing’s C-17 program has been struggling to stay alive for the past several years and the challenge will get worse when Boeing hands over the final order to the USAF. The airplane’s survival depends now entirely on non-US sales, and these come few and far between. It’s also the last program of McDonnell Douglas; Boeing killed the MD-11, MD-80, MD-90 and MD-95 lines not that long after the two firms merged, though it did keep the MD-95 alive for a short time, renamed the Boeing 717.
The Long Beach Press-Telegram has a couple of additional stories here and here.
Why States opposes AA-US merger: Micheline Maynard writes in Forbes why she thinks states have joined the US Department of Justice lawsuit to block the merger between American Airlines and US Airways. The actions have nothing to do with consumer protection, the alleged motive of the DOJ, she opines. Rather, the states’ interests are far more parochial.
ElectroImpact competes for 777X work: ElectroImpact makes wings for the Airbus A380 and A350 XWB and it’s headquartered in Boeing’s back yard at Everett (WA). Now it’s hoping to build wings for the 777X. This Seattle Times report tells the story.
Washington State’s future in aerospace: The Pacific Northwest Aerospace Alliance hosts its second annual series of luncheons with members of the Washington State Legislature to talk about what needs to be done for the future of aerospace in this state. The first lunch is in Bellevue (WA) September 24 and the second is September 26 in Spokane, the other major aerospace cluster in the state.
Confirmed Bellevue Panelists
• Sen. Nick Harper (D), District 38 – Everett
• Sen. Paull Shin (D), District 21 – Lynnwood
• Rep. Mike Sells (D), District 38 – Everett
• Rep. Bruce Chandler (R), District 1 – Yakima
• Rep. Larry Springer (D), District 45 – Kirkland
Confirmed Spokane Panelists
• Sen. Michael Baumgartner (R), District 6 – Spokane
• Rep. Timm Ormsby (D), District 3 – Spokane
• Rep. Kevin Parker (R), District 6 – Spokane
• Rep. Mark Schoesler (R), District 9 – Ritzville
Information and registration for Bellevue is here.
information and registration for Spokane is here.
Clever headline: The Street.com column has a clever headline this morning in a post written by Ted Reed concerning the on-going sales battles between Airbus and Boeing.
FedEx takes first 767-300ERF; sources say readies 767-2CF order
FedEx took delivery of its first Boeing 767-300ERF yesterday.
Boeing Photo
As we reported way back on June 16, our market intelligence tells us FDX is lined up to become the first commercial customers of the 767-2C, the new platform on which the KC-46A tanker is based. The 767-2C is about six feet longer (165 ft 6 in) than the 767-200ER (159 ft 2 in) on which the 2C is based but shorter than the -300ER.
Boeing rendering
Separately:
- Aspire Aviation has a long analysis of the DOJ lawsuit against the American Airlines-US Airways merger that further decimates the heart of the case.