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
Congressman from Boeing to retire
Norm Dicks, the prominent Congressman from Boeing who made winning the KC-X contract for Boeing the “highlight” of his career, announced today he is retiring.
Dicks has one of the safest Democratic seats in the State of Washington. His retirement will be a big loss for Boeing in Congress.
Odds and Ends: Airworthiness Directives and sloppy headline writing
Airworthiness Directives: The New York Times has a good piece about ADs that should put many general assignment reporters to shame. The rhubarb over the ADs applied to the Airbus A380 spurred Nicola Clark’s reporting. This is a must-read not only for the general public to actually understand what’s going on in the world of aviation, it’s a must-read for the hysterical headline-writers who seem more interested in page hits than in facts.
787 Surge Line starts in June: Boeing’s 787 Surge Line begins operation in June. This is the line in Everett that is being created as risk mitigation for the new line in Charleston as the workforce there comes up on the learning curve. The two lines are intended to have a capacity of three per month, while Line 1 in Everett has a capacity of seven per month.
The Surge Line is supposed to terminate in May 2014, according to internal Boeing documents obtained by the IAM 751 in the now-defunct NLRB case. But we hope, and believe, the Surge Line could become a long-term line as Boeing considers ways to go beyond the 10/mo production rate goal by the end of 2013. We believe Boeing has to significantly go beyond this rate to catch up from delays that are hitting four years for some customers, as well as to open up slots for demand.
Rolls-Royce and the Trent XWB: Flight Global has a long article about RR’s engine development for the Airbus A350.
Dark Clouds over Asia: Aspire Aviation has a long piece about Asian airlines that are struggling. Asia has been a bright spot for Boeing and Airbus orders. Perhaps the bubble is about to burst.
WTO Appeal of EU v Boeing issued, in secrecy
The dual appeal of the WTO Panel Findings in the European Union’s complaint against illegal subsidies provided Boeing for its commercial airplanes program has been issued, but it remains under wraps until March 12 to allow the parties to review it and request commercial sensitive information be deleted from the public version.
The WTO Panel found Boeing received more than $5bn in illegal subsidies. The key ones are grants from NASA and the Department of Defense, but tax breaks provided by the State of Washington–amounting to $3.2bn over 20 years–also were found to be illegal.
The EU and the US Trade Representative each appealed the Panel findings. The EU wanted to start the clock on the countdown to Boeing compliance as well as seeking reconsideration of complaints rejected by the Panel. The US appealed some of the findings of the Panel that found Boeing received illegal subsidies.
Leaks from both sides are expected in advance of the March 12 public release.
We expect the core of the Panel’s findings–that grants to Boeing are illegal–to be upheld. We also expect that the tax breaks granted by Washington State (as well as Kansas) will also continue to be held as illegal.
Stories by AFP and Reuters were first off the mark.
Boeing had contended throughout the process that Airbus had received more than $200bn in illegal aid, a figure Boeing claimed includes interest expenses. The WTO found only $18bn in aid was provided Airbus. The original WTO panel found $5bn in illegal aid to Boeing. The Appeals panel could lower or raise the Boeing figure. The Reuters article has some detail on the disputed amounts in the Boeing appeal.
Top Airbus, Boeing shift to LCCs, away from legacy carriers
Here is a story we did last week for Flight Global Pro.
With huge orders last year for the Airbus A320neo family and this year for the Boeing 737 Max, the top customers for the Big Two OEMs continue the shift from the traditional “blue chip” airlines, but upstart low-cost carriers and Middle East airlines.
Air Asia and Indigo, two LCCs, are now the top two customers in terms of backlog for Airbus, with Qatar Airways and Emirates Airlines having the fourth and fifth largest unfilled orders. Only Qantas Airways of the legacy carriers hits the Top 5 for Airbus. After this flag carrier, the next legacy carrier—US Airways—comes in at only #14. Lessors, other LCCs and Latin America’s TAM (founded in 1961) and Lan (1929) are the top customers for Airbus.
Boeing is a slightly different story, driven by its long dominance of the US market. American Airlines, Delta Air Lines and Continental Airlines are legacy carriers that are in the Top 10. But Upstarts Lion Air and Norwegian Air Shuttle are Boeing’s first and third top customers with legacy LCC Southwest Airlines ranked second.
Aengus Kelly, CEO of AerCap, worried in an interview with The Wall Street Journal that the large orders placed by the newer airlines won’t be filled, and that the orders contribute to over-production by Airbus and Boeing. He specifically identified Lion Air and Norwegian Air Shuttle as having ordered to many airplanes for their future needs. Norwegian’s recent order for Boeing 737s is reflected in the Boeing customer list but not yet reflected in the Airbus list. NAS announced an order for 100 A320neos, which would thrust it to a Top 15 position with Airbus.
MAX could arrive early, says Southwest; it will be late, says AerCap
This is one of the more odd items we’ve seen in a while.
Southwest Airlines, the launch customer for the 737 MAX, believes that entry-into-service could be earlier than the current target of 4Q2017. Boeing would like to shift EIS sharply to the left, as early as 2016, but this will depend entirely on the engine development of the CFM LEAP-1B.
But lessor AerCap told The Wall Street Journal the MAX may not arrive until 2019.
We find AerCap’s prediction to be incredibly pessimistic, even allowing for the history of the recent Boeing programs.
Nothing we’ve heard yet suggests AerCap might be correct. We believe it way too soon to draw any conclusions that the MAX will be early or late. AerCap has not ordered the airplane.
Odds and Ends: Revisiting a 757 crash; Boeing-WTO appeal due this week
Boeing 757 Crash: In 1996 a Birgenair Boeing 757 crashed into the sea, following discrepancies with the pitot tubes speed indications. This story revisits the circumstances.
Boeing WTO appeal: The appeal of the WTO panel findings that Boeing received illegal subsidies is due Wednesday. The EU filed a technical appeal to start the clock while the US Trade Representative filed a substantive appeal. Both sides will claim victory, in yet another round of what we consider to be a meaningless load of [stuff]. Our disdain for the WTO is well known to readers of this column.
Rolls-Royce: Flight Global has an interesting piece on Rolls-Royce’s product strategy.
90-Seat Turbo-Props: Flight Global also has an article on the engine development for the prospective 90-seat turbo-props.
COMAC C919: China’s aerospace authority, CAAC, has taken a hands-off approach to the design of the COMAC C919–a development that isn’t exactly a ringing endorsement of the project.
Southwest Airlines: A blog item from Terry Maxon of the Dallas Morning News lists Southwest operations at hub cities–and what’s interesting is that Chicago Midway Airport is one of WN”s least efficient city from an asset utilization standpoint. Look at the number of gates-to-flights in the charts.
Airbus Neo vs Boeing MAX: customer split
Bernstein Research has a good illustration of the competition of the Airbus Neo vs the Boeing MAX. It shows which Boeing customers selected Neo
PW GTF-CFM LEAP market share
AirInsight has an interesting analysis of the market share of the GTF vs the LEAP on the A320neo family. This was completed while the Singapore Air Show was underway and orders still being announced.
The analysis only covers the neo family, where there is competition between CFM International and Pratt & Whitney. CFM is exclusive on the Boeing 737 and COMAC C919 and PW is exclusive on the Mitsubishi MRJ and the Bombardier CSeries. PW shares the engine supply position on the Irkut MS21 with a Russian powerplant.
Thus, the neo family competition provides a better snapshot of how the two engines stack up in the view of customers.
A couple of points of note for the AirInsight analysis: GECAS buys only GE engines, so PW had no chance in this exclusive-supplier scenario; and Republic’s CFM selection was part of a financial rescue package involving GECAS (which leases A319s and A320s with CFM engines to Republic subsidiary Frontier Airlines) and CFM (which restructured CFM maintenance agreements). We detailed the Republic order at the time. We also wrote this piece about how the GE powerhouse combines to win deals. The family deal with GECAS and the rescue package for Republic account for 280 of the 533 LEAP engines ordered to-date.
Separately, we’ve been provided some diagrams by CFM for publication about the LEAP and how its architecture and technology benefit from the GE90 and GEnx. These illustrations are below the jump.