Bjorn’s Corner: New aircraft technologies. Part 51. Wrap up

By Bjorn Fehrm

March 22, 2024, ©. Leeham News: Last week we did the first part of the Wrap-up of our 50 article series about the New Aircraft Technologies that can be used when replacing our present single-aisle airliners.

Now, we summarize the last 25 articles in the series, which covered how to develop, produce, and support a new airliner.

Figure 1. The Program Plan for a new airliner. Source: Leeham Co.

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When does a larger airliner pay off? Part 3

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By Bjorn Fehrm

March 21, 2024, © Leeham News: We are doing an article series about what drove the cross-over from Airbus A319 to A320 and then to A321. We started with the ceo range last week. We could see why the A320 was a better choice than an A319, with only a few more passengers per departure required to close the operating cost difference for a route, whereas the A321, being a larger jump in capacity, did not have the same per seat mile economics until traffic increased substantially.

Now we study the change to the neo generation and try to understand why the A319, a popular model as a ceo variant, did not sell at all as a neo.

Summary:

  • The A319ceo had a suitable capacity for routes before 2015.  It also had a passenger mile cost advantage over the A320 for thinner routes.
  • After 2016, when the A320neo entered the market, the A319neo didn’t sell at all, despite the continued existence of thin routes. We explain why.

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Embraer goes for growth after ‘solid’ 2023

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By Tom Batchelor

March 18, 2023, © Leeham News

A strengthening order backlog and an uptick in deliveries helped Embraer turn a profit last year.

In a call with investors as the company outlined its 2023 earnings results, Francisco Gomes Neto, president and CEO of Embraer, said commercial activity had “intensified” over the last 12 months, with “solid demand” across its markets.

Unsurprisingly, Embraer has felt the effects of supply chain delays buffeting the entire industry (though it said not as acutely as in 2022). The company still managed to deliver a total of 181 jets, up from 160 in 2022.

Of those, 64 were commercial aircraft, 115 were executive jets (74 light and 41 medium, helped by the strong performance of the Phenom 300) and two were military C-390s. E2 family deliveries more than doubled year-on-year, from 19 to 39 in 2023.

The recent firm order from American Airlines for 90 E175s, with purchase rights for 43 additional jets, had resulted in a “great start to 2024”, Neto added.

Revenues totaled $1.975bn in the fourth quarter and $5.269bn across 2023, which was 16% higher than in 2022 but at the lower end of the guidance range for the year.

In 2023 as a whole, the company reported adjusted EBIT of $350m, with adjusted EBIT and EBITDA margins of 6.6% and 10.7%. Adjusted EBIT stood at $181.7m in 4Q23, with adjusted EBIT and EBITDA margins of 9.2% and 12.8%, respectively.

Looking ahead to 2024, Embraer said total company revenues would sit in the $6 to $6.4bn range, with an adjusted EBIT margin of between 6.5% and 7.5%.

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Bjorn’s Corner: New aircraft technologies. Part 50. Wrap up.

By Bjorn Fehrm

March 15, 2024, ©. Leeham News: We started the series a year ago about the New Aircraft Technologies that can be used when replacing our present single-aisle airliners.

We have covered a lot, including the typical development phases, from initial studies to preparing for the aircraft’s in-service phase.

Let’s make a resume of what we have discussed.

Figure 1. Boeing’s Truss Braced Wing X-66A demonstrator based on the MD-90. Source: Boeing.

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When does a larger airliner pay off? Part 2

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By Bjorn Fehrm

March 14, 2024, © Leeham News: We are doing an article series about what drove the cross-over from Airbus A319 to A320 and then to A321. We start with the ceo range to understand at what passenger numbers did a route support the A319 versus the A320 and A321.

The same change in airliner size happened for the Boeing 737, but we will limit the investigation to the Airbus range as the modern variants, 737 MAX 7 and 10, are not yet in service.

We will use our Airliner Performance and Cost Model (APCM) to model typical sectors and see at what load factors the economics favor a switch.

Figure 1. The Airbus A320ceo with it’s characteristic wing fences. Source: Airbus.

Summary:
  • We develop the Passenger Mile Costs for the different A320ceo variants, A319, A320 and A321.
  • Then, we gradually lower the number of passengers transported on the A320 and A321 until we have the same Passenger Mile Costs for all variants. This shows how many more passengers a route must support to motivate a switch to a larger model.

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“If something requires us to cease production, we will do that:” FAA

By the Leeham News Team

March 13, 2024, © Leeham News: The Federal Aviation Administration (FAA) is considering whether to suspend the Production Certificate of Boeing Commercial Airplanes (BCA) if it’s not satisfied changes to its safety culture are sufficient, LNA has learned.

FAA Administrator Michael Whitaker. Credit: FAA

It’s the “nuclear option” LNA has written about on previous occasions following the Jan. 5 in-flight accident/explosive decompression of a Boeing 737-9 MAX operated by Alaska Airlines. Already under heightened scrutiny by the FAA, Boeing took yet another in a series of safety blows when a special panel of experts appointed by the FAA to independently review Boeing’s safety culture issued a scathing report on Feb. 26.

The FAA levied fines—and suspended some of them—for previous safety violations 36 times, according to a tracking website. And despite pledges and actions taken to improve safety following the 2018-2019 MAX crisis, Boeing still has fallen short.

Now, with an intensive FAA audit of the 737 production line, the FAA yet again found lapses. The FAA on Feb. 29 gave Boeing 90 days to come up with an actionable plan and shape up. It did not say what would happen if Boeing either fails to produce an acceptable plan or fails to implement it satisfactorily.

And, the National Transportation Safety Board (NTSB) chair complained Boeing is withholding information in the investigation into the Alaska Airlines MAX 9 accident.

The ultimate option is to suspend the Production Certificate that authorizes Boeing to build commercially-based airliners. Such a move would have huge political and economic implications, however.


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Pontifications: “Boards are invested in their C.E.O.s until they’re not.”

By Scott Hamilton

March 12, 2024, © Leeham News: Loss of confidence in Boeing’s leadership from its customers is growing, according to industry sources.

It’s not just with the leadership at Boeing Commercial Airplanes (BCA), where CEO Stan Deal is under increasing pressure to fix a growing number of problems. Leadership at the corporate level of The Boeing Co. is also losing confidence from airlines and lessors.

Some airlines and lessors, most of whom want to remain anonymous to speak freely, want the departure of David Calhoun in addition to Deal and others in top leadership. In the past, most fingers were pointed at Deal and the leadership of BCA.

An increasing number of customers want Calhoun, the CEO of The Boeing Co., and others in the corporate leadership, also gone.

Tim Clark, the president of Emirates Airline, publicly criticized Boeing leadership many times. But he’s always avoided naming names in the public domain.

Michael O’Leary, the CEO of Ryanair, was not so reticent. Many times, he’s criticized the leadership of “Seattle” (a thinly veiled reference to Deal and his key people). But O’Leary generally defended Calhoun.

The latest series of Boeing anomalies and delivery delays prompted more customers to privately call for sweeping changes.

And, the New York Times reported that the six-week audit by the Federal Aviation Administration (FAA) found Boeing failed to follow proper procedures 37% of the time.

What happened to all the pledges by Boeing to improve safety after the 2018-19 MAX crashes that killed 346 people?

The buck stops with the CEOs of Boeing Commercial Airplanes and The Boeing Co.

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Airbus and Boeing need each other for healthy supply chain

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By Dan Catchpole

March 11, 2024, © Leeham News: In the public arena, Boeing is flailing. It’s the subject of public rebukes by government officials, a new criminal investigation by the US Department of Justice, and a seemingly endless stream of scathing headlines.

However, executives at its European counterpart, Airbus, are not celebrating Boeing’s struggles.

“Airbus needs Boeing,” said Joe Marcheschi, director of flying parts procurement services for Airbus Americas. “Disruption, and turmoil in the supply chain hurts Airbus, too.”

The industry’s supply chain depends in large part on the two aerospace giants—which means, indirectly, Boeing and Airbus need each other.

Instability at the airplane makers may in some sense have furthered this interdependence by prompting many suppliers dependent on one OEM to diversify by supplying both companies and by looking outside commercial aerospace.

Summary:
  • Suppliers’ efforts to diversify beyond one OEM have deepened interdependence.
  • Labor, materials are among biggest supply chain challenges.
  • Airbus supporting suppliers to solve bottlenecks.

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Bjorn’ s Corner: New aircraft technologies. Part 49. Engine Maintenance

By Bjorn Fehrm

March 8, 2024, ©. Leeham News: We are discussing the different phases of a new airliner program. After covering the Design and Production, we now look at the Operational phase of a new airliner family.

For the operational phase, the airplane must pass scrutiny for Continued Airworthiness. The biggest item in a regulator’s Instructions for Continued Airworthiness is the required Maintenance program to keep an airliner airworthy. We discussed airframe maintenance in the last article. Now, we look at engine maintenance.

Figure 1. The CFM56-7 engine for the Boeing 737NG. Source: CFM.

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GKN Aerospace eyes further growth as earnings surge

By Tom Batchelor

Mar. 7, 2024, © Leeham News: Strengthening demand for airframe structures and engine components helped British supplier GKN Aerospace, a subsidiary of Melrose PLC, achieve higher profits and record margins in 2023.

GKN Aerospace has invested in its sustainable additive fabrication capability. Source: GKN

The company, whose supply contracts encompass all leading commercial narrowbody and widebody aircraft, as well as business jet and defence customers, announced full-year results on Thursday.

Melrose posted revenue of £3.35bn ($4.29bn), 17% growth over the previous year, and adjusted operating profit of £420m (up from £186m in 2022). Operating margin reached 12.5%, up from 6.3%.

The Birmingham, England-based group enjoyed growth within its engines division of 16%, and structures growth of 18%, largely from OEM deliveries ramping-up.

CEO Peter Dilnot told investors 2023 had been a “transformational” year with “profit more than doubling, ahead of expectations.”

He said order backlogs stretching nearly a decade across Airbus and Boeing lines, and a “significant gap” in time before next-generation platforms are likely to be introduced, had resulted in “something of a harvest period” for GKN.

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