September 11, 2020, ©. Leeham News: In our series on Hydrogen as an energy store for airliners we look at whether we use an LH2 burning Turbofan as propulsion or as the EU study proposed, a Parallel Hybrid feed by a fuel cell, Figure 1.
By Bjorn Fehrm
September 10, 2020, © Leeham News: The Airbus A340-600 was designed to challenge Boeing’s hold of the large, long-haul jets. With a capacity 60 seats above the previous largest Airbus jet, the A340-300, and a 7,500nm range, it should put Airbus firmly on the long-haul map.
The A340-600 would be flying its 350 passengers as long and for a lower cost than the 20 seats larger Boeing 747-400, the then-largest long-haul Boeing jet. It would have worked hadn’t Boeing upgraded the 777-300 to the 777-300ER and surpassed the spec. How much better did that make the 777-300ER when it arrived in 2004?
By the Leeham News Staff
Sept. 9, 2020, © Leeham News: Morgan Stanley has a new aerospace analyst, Kristine Liwag, who initiated coverage on a half dozen companies over two days last week.
One of the conclusions in one of her notes:
“Assuming that some orders for growth and those ordered by lessors are cancelled in the 2020-2025 timeframe, we estimate that there is $73bn downside risk to Boeing’s revenue from 2020-2025. We note that our Bull case scenario assumes that the entire current order book converts to revenue.”
Liwag and her team also write, “there is an underappreciated risk that Boeing is particularly vulnerable to cancellations as the 737 MAX grounding (March 2019) opened up cancellation rights (without penalty) for aircraft deliveries that were delayed a year.”
But Morgan Stanley doesn’t let Airbus off the hook
“Boeing and Airbus manufacture aircraft to an order book. White tails, which are aircraft without owners, are uncommon and undesired. When demand is strong and the production skyline is sold out, as we have seen in the past few years, a new aircraft is a scarce commodity that airlines and lessors want. In times of uncertainty, a new aircraft, with a capital cost of $50mn-$200mn per unit, becomes a white elephant.”
By Vincent Valery
Sep. 7, 2020, © Leeham News: The timeline for a passenger traffic recovery remains uncertain. The IATA does not expect passenger traffic to return to pre-COVID-19 levels until 2024. Leeham Co. predicts that it will take four to eight years before traffic returns to pre-COVID-19 levels.
Long-haul markets, where airlines almost exclusively operate twin-aisle aircraft, witnessed the sharpest drop in passenger traffic. As outlined in a previous article, airlines already retired significant numbers of older aircraft. Due to lingering travel restrictions, those markets should be the slowest to recover to pre-pandemic levels.
Ishka, the UK-based appraisal company, outlined the sharp drop in aircraft lease and purchase prices since the beginning of the pandemic. Unsurprisingly, twin-aisle aircraft are among the worst affected. There are virtually no takers for second-hand widebody passenger aircraft now.
Separately, Airbus and Boeing decreased their passenger twin-aisle production rates from a combined 28 to 15 per month from next year: 787 at six, A350 at five, 777 and A330 at two each.
Given the extent and expected duration of the drop in long-haul passenger traffic, LNA analyzes the factors that will influence leasing rates in the twin-aisle market this decade.
By Bryan Corliss
Sept. 7, 2020, © Leeham News: Stop me if you’ve heard this one: the pundits are saying Boeing is going to leave Puget Sound, leaving behind the hollow husk of a company doomed to wither and die on the vine.
Just like they did in 2003, in 2009, in 2013 and 2016.
Seattle-area political economist and author T.M. Sell, in fact, traces the company’s first threat to leave clear back to the 1920s, when company executives got into a fight with the Seattle City Council over building new roads to connect downtown with the airport we now call Boeing Field.
Boeing said it would pack up and move to southern California, if Seattle didn’t cooperate.
“Like rain in winter, this is a regular feature of the Puget Sound emotional landscape,” Sell opined back in 2009.
September 4, 2020, ©. Leeham News: In our series on Hydrogen as an energy store for airliners we look at the rest of the fuel system after we looked at the hydrogen tanks over the last weeks.
The cryogenic state of the liquid hydrogen (cryogenic=very low temperatures, -253°C) creates some new challenges when designing the fuel system.
September 3, 2020, © Leeham News: Airbus and its subsidiary Satair announced today it has integrated one of the last pieces of Bombardier’s engagement with the A220, the spare parts distribution.
Airbus acquired Bombardier’s part of the A220 aircraft program in January, but Bombardier continued to purchase, stock, sell and distribute the A220 spare parts. From the 1st of July, this is handled by Satair, part of the Airbus group, to give airlines with Airbus aircraft a single point of contact for spares part services.
By Vincent Valery
Sep. 3rd, 2020, © Leeham News: Last week, we compared the economics of the A340-300 and the 777-200ER on the Paris to San Francisco route. We now turn our attention to Airbus’ larger long-range aircraft, the A340-600.
The 30% larger A340-600 was developed in the last year of the 1990s to compete with Boeing’s 777-300ER, then in development.
By Scott Hamilton
Sept. 2, 2020, © Leeham News: Boeing is considering production changes to the slow-selling 787-8 to lower costs and boost sales.
The effort comes at a time when global passenger traffic is at record lows and recovery of international traffic is forecast to take four or five years.
As airline traffic recovers, carriers appear to be favoring smaller aircraft in restarting suspended routes.
In recent years, Boeing discouraged sales of the 787-8 because it is a low margin airplane with high production costs. This is a legacy of the program and development difficulties from 2004-2011, when it finally entered service.
The 787-9 and 787-10 are high margin aircraft Boeing counted on to reduce the billions of dollars in deferred production and tooling costs. At one time, this exceeded $32bn.
The early program difficulties resulted in the production and parts of the -8 to be substantially different than the -9/10, which have 95% commonality. The -8 was only 30% common.
By the Leeham News Staff
LNA’s monthly tracking of failed carriers adds Virgin Atlantic, EasyFly, Go2Sky, ExpressJet, and the Smartwings Group to the list of carriers in bankruptcy or court-supervised restructuring since COVID collapsed the global airline industry beginning in mid-March.
Among those five, Go2Sky and ExpressJet announced that they would cease operations. Virgin Atlantic won the support of its creditor for a court-supervised restructuring.