Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 20. May 2, 2025
- Supplier Howmet exceeds expectations despite tariffs May 1, 2025
- Airbus 1Q2025 results: So far, so good, but US tariffs make future results unpredictable May 1, 2025
- Does an Airbus A220-500 need a new wing and engines? May 1, 2025
- Teamsters, Boeing have a new contract April 29, 2025
USAF inserts plan for AF One replacement into future
The current Air Force One (all two of them) entered service in 1990 and 1991 and are based on the Boeing 747-200. The time appears nearing for a replacement.
Defense News reports that the USAF has added replacements in its future planning.
Given the long history of the Secret Service demanding more than two engines, a replacement would almost certainly be the Boeing 747-8I.
Here are a couple of links to the history of Air Force One here and here.
Boeing reveals some MAX details, at last
Boeing has, at long last, revealed some details about the 737 MAX, most of which have long been talked about in various media. Boeing is further testing new wingtip designs–with or without winglets? And while readers cite this articlein our previous post linking AirInsight about winglets in an effort to discredit the conclusions, the last paragraph is noteworthy:
For the forward-fit market, LaMoria sees a “very healthy” business for Boeing 737s for the “next 5-6 years”, but there is no guarantee the company will select APB blended winglets for the GE Leap-1B-powered 737 Max, set for entry into service 2017. “We have a lot of long-lead future-oriented plans in place in hopes of working with Boeing for many years to come,” says LaMoria. “But Max is still an open question.”
Separately, see this Aeroturbopower article.
Odds and Ends: ExIm Bank, 777X, Winglets, 737 MAX
ExIm Bank: The fight between Delta Air Lines and the ExIm Bank continues.
As readers know, Delta is behind the move to block ExIm Bank financings of wide-body airplanes to international customers. We’ve a link to a Wall Street Journal article that gives another take on the controversy, so we won’t repeat the details here (which we’ve written about on several occasions).
Then last week, ExIm approved a guarantee with the Brazilian airline GOL for CFM 56 engines on Boeing 737NGs, with a proviso that GOL send the engines to Delta TechOps (a subsidiary of DAL) for maintenance. This caused quite the kerfuffle, as noted in the Politico article (also linked below).
Finally (actually not, but it is for today’s post), there is an editorial in the Washington Post that Delta really likes and sent on to us. That link is also below.
- ExIm Bank: WSJ Article. Politico article. Washington Post Editorial.
Readers know that we think the effort to block the ExIm Bank is stupid. Delta takes pains to say it is not against the Bank, only against funding international wide-body sales that compete with US international air carriers (and most specifically, Delta).
We understand Delta’s position but largely disagree with it. Delta does have a point when healthy carriers like Emirates Airlines use below-market rate ExIm funding. But Delta is off the mark when it comes to objecting to the concept that ExIm supports funding to foreign companies that are financially unable to commercial lending without the government guarantee. This is precisely why ExIm was created in 1934–to boost US sales to these companies.
Nearly $12bn in Boeing airplane sales (most equipped with GE Engines) were backed by ExIm guarantees last year and it will probably be a similar number this year. It’s anybody’s guess how many of these sales would not have happened had ExIm not stepped up.
We fully concur that it makes little sense for carriers like Emirates to qualify for ExIm. And international parties agreed last year to set market rates for ExIm services (replacing below-market rates), beginning January 2013. Delta remains skeptical that this solves the problem and that it will take years to see the results. It’s correct on the latter point and cynical on the former.
Odds and Ends: FAA’s NextGen, B-52 at 50
FAA’s NextGen: This short piece analyzes the benefits of the FAA’s NextGen air traffic management system. A 36-page report is available here.A Washington (DC) think tank called Eno has a lot of stuff about NextGen, including a recent synopsis of a debate about the program and a You Tube link within the synopsis of the debate.
This is a much more balanced view of the benefits and shortfalls in FAA policy than one consultant who revels in criticism but offers no solutions. We recommend the constructive approach.
Alaska Airlines has implemented a piece of NextGen. Here is a New York Times article describing the effort.
B-52 turns 50: And that’s just the youngest one. DOD Buzz has this story about America’s venerable bomber.
Odds and Ends: 777-9X will create new class of airplane
Boeing 777X: The 777-8X, said to be a replacement for the 777-200, is really sized closer to the 777-300 and the 777-9X is a new class of airplane. See this story for details.
A330neo: It’s a story that won’t die: talk of re-engining the A330. But does it make sense? AirInsight completed a short report in which economics of the A330, the A330neo, the A350, the 787 and the 777 are evaluated. The results indicate that while the A330neo will have a major gain in fuel performance, and in fact will be almost equal to the 787-8 with substantially more seats for revenue opportunities, it still falls short of the 787-9 and the A350.
The A330neo, suggested by AirAsia, would mimic the minimum-change A320neo and thus be different in scope than the original A350 proposal, which was a re-engined, new-wing, new system version of the A330 (much as the 777X will be compared with the 777). Airbus says it’s not interested in the A330neo “for now” but consultant Michel Merluzeau predicted at a conference organized by the Pacific Northwest Aerospace Alliance that Airbus will eventually proceed with the airplane.
But are the gains good enough to make sense to proceed with the project? The report is offered for sale for a modest $99.
WTO, Airbus and Boeing: It’s another story that won’t die (and do we wish it would): The US vs the EU on the illegal subsidies to Airbus. The US has stepped up its pressure to have the EU decide that the assertions by the EU that it has complied with the WTO findings are inadequate. The US wants to impose $7bn-$10bn in sanctions annually. The EU says the US is full of it.
MAX v NEO: Guy Norris at Aviation Week did his own analysis of the fluff Airbus and Boeing put out about the MAX and NEO fuel efficiency. Just goes to show you can’t believe either party. That’s why we like to rely on the analysis of the customer. Lufthansa has analyzed the MAX and NEO and told us last year (and again at ISTAT last month) it concludes there is only a two percent difference (in Boeing’s favor) between MAX and NEO, which LH said both times simply retains today’s status quo between the two OEMs. (This also throws cold water on Boeing’s claim that the NG is 8% more efficient than today’s A320.)
Missing Bob Crandall
The link to a video of Bob Crandall on the Charlie Rose show speaking to airline industry issues, and the bankruptcy at American Airlines, spurred some comments from our readers. The most interesting comment came from a Doug Stephan, whose comment is reproduced at the end of this post.
When we co-owned Commercial Aviation Report (until recently called Commercial Aviation Online by Flight Global, which became the fourth owner of the company), we resided in Dallas in Bob Crandall’s backyard at American.
Naturally the proximity gave us many Crandall stories. Stephan’s comment spurred us to remember some. We share a few with readers today.
Odds and Ends: 737 cost (not price); Bob Crandall
737 Cost, Not Pricing: Wells Fargo has this item about what American Airlines actually paid for the Boeing 737-800, as opposed to the list price: more than a 50% discount from $84.4m. Note that AerCap (AER) appears to have paid $40m per aircraft in a purchase-leaseback. One assumes American didn’t resell the aircraft for the price paid from Boeing but marked them up at least a little bit. We’ve heard AA’s cost was in the range of $35m but this is unconfirmed.
~$40MM Per 737, It Appears. Based on the change in YTD flight equipment additions, AER added $80MM in planes in Q4; since the only Q4 additions were two new 737-800s leased back to American Airlines, the 20-F implies a $40MM unit price. Also, based on changes in purchase commitments from 9/30/11, we believe the average 737-800 purchase price (over the remaining 33 planes as of year end) is ~$41MM. A new 737-800 typically appraises for ~$45MM.
Bob Crandall: The former CEO of American Airlines provides his usual candid views of the airline industry, of today’s American Airlines, and his greatest failure as CEO in this 30 minute video on the Charlie Rose program.
WN vs AA: A personal story
I am going to depart not only from my usual approach to this blog but also shift from the editorial “we” to a personal “I” for this story. The point of the story is not my personal family issue but an illustrative point about Southwest Airlines and American Airlines.
As readers know, I live in Seattle. I have family in the Chicago area. My family had a developing situation that required that I go to Chicago to deal with it. The plan had been to attend the ISTAT meeting and US Airways media day in Phoenix earlier this week, fly back to Seattle for a day and then on to Chicago Friday. I had booked Southwest for the SEA-PHX-SEA trip and American Airlines for the SEA-ORD-SEA trip.
I truly don’t like flying Southwest because of the boarding process and the lack of an assigned seat. I’m a lifetime Gold Advantage member of American, with all the perks that implies.
I chose WN for the PHX trip because my business partner was joining me and she had to check a bag–and bags fly free on WN. I chose AA for Chicago because of the aforementioned Gold status and perks.
On Tuesday evening–the end of the ISTAT meeting but before the US Airways event–I received a call from my brother indicating the family situation had become critical; I need to fly to Chicago directly from PHX on Wednesday. WN changed the ticket (charging for the fare difference). I called AA to cancel my Friday reservation. The ticket was, as I knew, non-refundable but I also knew I could apply it for a future trip. For the fare difference and, as I also knew (regrettably), a $150 change fee. (Besides which AA also charges for the baggage check, which wasn’t applicable in this case but nonetheless contrasts ith WN’s policy.)
The situation in Chicago has now stablized for now but for the near term, I will buy WN to Chicago for family follow-up for the flexibility of being able to change tickets without a change fee. Tom Horton, take note: a lifetime Gold member is on your rival for now. I might be able to claim mileage to exotic places on AA and oneWorld compared with Lubbock and Little Rock on WN, but this doesn’t matter. Gary Kelly, also take note: good policies in place in these circumstance–even if I still despise your damn open seating.