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 27. June 20, 2025
- Pontifications: A Personal Note June 19, 2025
- Airbus books 142 firm orders as Boeing retracts from the Paris Air Show June 19, 2025
- AIN Media Group Agrees to Acquire Leeham News & Analysis June 17, 2025
- Five for Five: Air India crash points to systemic problems at Boeing that CEO Ortberg must fix June 15, 2025
Silly argument by jilted Kansas
Politicians in Kansas have asked for a review on national security grounds of the Boeing decision to close its defense operations in Wichita, according to this news report.
This is just silly.
Boeing has plenty of security clearances and secure facilities in Puget Sound, San Antonio and Oklahoma City, where the Wichita work is going.
This is a desperate move by Kansas. The Secretary of the Air Force should reject this effort as a complete waste of everybody’s time.
Odds and Ends: 737 MAX development cost; another range boost for A330
737 MAX: We did this story last week on the development cost of the Boeing 737 MAX.
A330: Airbus is going to boost the range of the A330 to make it more closely match that of the Boeing 777 and 787, according to this story.
Fill ‘er up: Here’s a scary story about a goof in aerial refueling of a Boeing 707-based JSTARS.
CFM aftermarket drives Safran revenues, profits
A recent report by Bernstein Research takes an in-depth look at Safran, the French company that is the parent of Snecma, a joint venture partner with GE to form CFM International.
CFM, of course, is the sole-source engine provider on the Boeing 737 and has about half the market share on the Airbus A320 family.
In the January 17 note, Bernstein looks at the after-market engine business of Safran, which is dominated by the CFM56. There are nearly 17,000 CFM 56 engines in service today, mostly what Bernstein calls the second generation.
Bernstein’s report illustrates what we have occasionally written: the importance of after-market parts sales and MRO (maintenance, repair and overhaul) is to the engine market.
We’ve noted previously that the after-market is more important than the sale price of the engine where there is competition for a power plant.
As we’ve previously noted, it is not unknown for engine makers to deeply discount engine prices even more than the airframers discount their airplanes. In the lawsuit between Pratt & Whitney and Rolls-Royce over patent claims for the engines powering the Airbus A380, court documents revealed discounts as steep at 80% or more.
Norwegian Air splits order with Airbus, Boeing
In a surprise, Norwegian Air Shuttle split a large order between Airbus and Boeing for A320 and 737 families. The Airbus order is only for the NEO and 737 order is a mix of MAX and NGs.
We expected only the 737 order; we had previously reported NAS was one of the “commitments” for the MAX.
This represents the third all-Boeing customer Airbus has won for its NEO.
NEO deliveries will begin in 2016, equipped with the PW GTF. Engine selection for later deliveries remains open. The GTF enters service on NEO in 2015 and the NEO CFM Leap engine enters service a year later.
Boeing reports 2011 earnings, estimates for 2012: just 35-44 787 deliveries
Boeing reported its earnings for 2011 and its estimates for 2012, including delivery estimates for the 787–which were surprisingly low.
Boeing forecast 70-85 787/747 deliveries this year, with half (35-44) being 787s. This is will below Wall Street consensus, though David Strauss at UBS predicted 40. We find this a stunningly low number that doesn’t reflect well on either production ramp up or fixing the rework necessary for the more than three dozen 787s at Everett.
Boeing’s own Z24 production plan for this year had a production rate of 45 787s.
We are, as the Brits say, gobsmacked by this information. (Update, 0800 PST: In Q&A, McNerney says 787 deliveries affected by large number of change incorporation required.)
From the conference call:
Airbus, ATR big losers in Kingfisher turmoil
This is an expanded version of a story we did for Flight Global.
Airbus will be hit hard if Kingfisher Airlines of India fails. ATR has already lopped its entire order of turbo-props from its books due to Kingfisher’s financial travails.
Airbus is a wholly owned subsidiary of EADS and EADS owns half of ATR.
DVB Aviation Finance is planning to repossess two Airbus A320 family aircraft, if it hasn’t already, and some lessors are also taking back aircraft.
According to the Ascend data base, Kingfisher operates 31 A320 family with V2500 engines and 25 ATR-72-500s. It has 68 A320s and 38 ATR-72-600s on order. Kingfisher also has A330s, A350s and A380s on order and holds options for a variety of aircraft.
Understanding appraisers in aircraft values
There has been an active discussion in the comment section on the “Rate 35” post and the relative merits of appraisals and appraisers with respect to the Airbus A320 and Boeing 737NG.
We’ve been involved in the airline business since 1979 and from 1990, when we co-owned Commercial Aviation Report (CAR), have followed the appraisal business. Given the discussion in “comments,” we think a dedicated post is worthwhile.
CAR created the industry’s first commercial appraisal conference in 1990. ISTAT–the International Society of Transport Aircraft Traders–at that time was still largely a small, professional organization, far difference than what it is today.
CAR’s first conference brought together nearly every appraisal company then in existence in the US to compare and discuss appraisals of what was called Enhanced Equipment Trust Certificates (EETCs) and appraisals published by the firms.
Punching through the hysteria about closing Boeing Wichita
Mike Mecham of Aviation Week has a thorough analysis of what’s behind the decision to close Boeing Wichita.
Contrast Mike’s story with this ridiculous analysis. It’s very, very rare that we call out someone else but this one is so far off the wall that we can’t help ourselves. (It should be noted Loren Thompson was paid by Boeing to do a report about the Airbus subsidies and the tanker competition.)
George Talbot of The Mobile Press-Register weighed in with this story.