Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Airbus sees Boeing as medium-term competitor, with Comac next June 14, 2025
- Boeing bullish on 20-year forecast, despite short-term headwinds June 14, 2025
- Embraer’s 20-year market forecast under 150 seats: fewer turboprops, jets about the same June 14, 2025
- Airbus Canada CEO: Airbus is here to stay in Canada June 14, 2025
- Little known, most unknown in Air India 171 crash June 13, 2025
Eco-Aviation Conference May 26
Air Transport World and Leeham Co. have organized the second USA Eco-Aviation Conference in Washington DC. More information may be found here.
Boeing production cut?
FlightGlobal reported yesterday (May 7) that supplier GKN’s CEO predicted Boeing will cut production next year of the 737 to 21 a month. This would be 32%, roughly in line with a forecast made in January by Steven Udvar-Hazy, CEO of mega-lessor ILFC. He also forecast Airbus will have to do likewise.
Most people scoffed at Hazy’s prediction, including many in Boeing and Airbus, who said Hazy was talking out of self-interest. Whether he was or wasn’t, Hazy has an uncanny knack of accurately predicting things. He also predicted that cancellations and deferrals will outpace orders and so far, he’s correct about that at Boeing and pretty close at Airbus.
25 more 787s canceled
Boeing’s weekly orders update shows another 25 787s have been canceled, bringing the total net cancellations for this aircraft to 57 so far this year.
The latest customer is not identified.
Update, May 8: Our colleagues at FlightGlobal have the story of who the customer is (which is why we could not say, because of our affiliation with Flight’s Commercial Aviation Online, and we could not break the news ahead of them). We expect them to publish as early as today but more likely next week. Watch their website (or their premium affiliates or Flightblogger–we’re not sure just which entity will break the news).
As for us, we’ll be at Airbus in Europe next week getting briefings and talking with executives. Watch for periodic postings next week on no particular timetable.
Update, 9:25 AM: Flightblogger just posted.
Moving toward 787 first flight
A bit of a controversy arose this week when Bernstein Research published a report following the media briefing on the 787 program in which Bernstein predicted a delay for entry-into-service (EIS) from 1Q10 to 2Q10; a six month delay in going to production of 10 787s a month (from YE2012 to mid-year 2013); and a discussion that based on its interviews with customers and Tier 1 suppliers that early 787s will be 8% overweight (about 20,000 lbs) and 10%-15% short in range (about 6,900nm vs. 8,000nm).
Boeing disputed the overweight and range conclusions, saying that it was making progress in getting weight down and that range ought to be closer to 8,000nm than to the project 6,900nm.
We obtained a copy of the report and after a thorough reading conclude that the controversy is pretty much a tempest in a teapot. None of this is new news and furthermore, by the way Bernstein worded the report, there is plenty of room for interpretation.
‘Office Pool’ on 787 first flight
Well, not really an office pool. Internet gambling is illegal in Washington State (another example of misplaced priorities, but we won’t start up again). So we’ll just do a poll.
More embarrassing non-action by WA
Update, May 5:
Seattle’s Technical Alliance said Washington State is dead last among 10 states it ranks for graduate programs in science and engineering. Check out this article in The Seattle Times. Even Utah ranks higher.
As we said in our EDC speech, that Washington ranks so poorly in an epicenter that include Boeing and Microsoft is simply pathetic.
Original Post:
We blasted Washington’s governor and Legislature in our speech to the Economic Development Council of Snohomish County for inaction over the past several decades to promote aerospace here and to get off the dime on education.
Well, guess what? The Legislature ended its session April 26 and–no action. See this story in The Everett Herald.
Now the governor says she will take action into her own hands. We were totally unimpressed with her first cut. We’ll see how she does with the second.
Boeing refreshes 737
Here are our stories from Commercial Aviation Online about the Boeing 737 refresh.
The stories speak for themselves, and one of them gives the reaction of Southwest Airlines, Boeing’s biggest 737 customer.
Our personal observations: the new interior, with 787 features, is a major improvement over those in today’s 737s (and Airbus A320s) from a passenger perspective. Boeing wasn’t able to increase passenger shoulder width comfort because the fuselage width is what it is, but there is more headroom space with the redesigned bins and the lighting is much more pleasant.
The 737’s aerodynamics were pretty clean to begin with, so getting a 1% airframe gain in fuel burn was probably about as good as could be expected. CFM likewise has a pretty efficient CFM 56, so another 1% was probably as good as it gets, too.
This illustrates the challenges Boeing has in tweaking the 737 without a re-engining before going to an all-new airplane. Airbus is hoping for up to 5% fuel burn improvements for the A320 Enhancements, but Boeing told us some time ago these would only at best match the 737 and not better it (Airbus probably would take a different view).
Anyway, here are the stories we did for CAO.
Tankers: to split or not to split
Update, May 4: Veto threat over split tanker effort: read all about it.
Update, May 3:
US Rep. John Murtha (D-PA), chair of a House appropriations committee, has dropped (for the moment) his effort to insert into the FY2010 budget language requiring a split buy between Boeing and Northrop for the KC-X tanker. See this story.
Original Post:
Well, blow us down. Loren Thompson, the defense analyst, now favors a split buy.
He’s been all over the map on this procurement. A big defender of the Boeing KC-767 lease deal when that was on the table. For the KC-767 vs. the Northrop KC-30. Defending the KC-30 award after it was given. Supporting the Boeing protest. Now this.
Followers (including this column) of Thompson, who is quoted frequently as a defense expert, respect his thinking but can’t help be a little baffled on this program.
Thompson’s rationale is what we’ve been advocating since we began following the competition several years ago: split the buy for operational reasons. The two tankers are differently sized: some missions are better suited for the KC-767 and some are better suited for the KC-30. Double the procurement, retire the old KC-135s more quickly.
On the other hand, US Rep. Norm Dicks (D-Boeing/WA), claims he was quoted out of context by KIRO TV a while back, which reported Dicks could “live with” a split buy. Now Dicks is back on his sole-source band wagon (for Boeing), even though Boeing now is fine with the idea.
And now, a plug for our Eco-Aviation conference. More information may be found here.
Replacing the A320, 737
We attended the joint anouncement April 28 by Boeing and CFM International for the enhancements to the 737NG, something we had forecast in an article for Aviation and the Environment magazine way back in December. Except for the possibility of re-engining the 737 with the Pratt & Whitney Geared Turbo Fan (a prospect that was only evaluated and not forecast in our AE piece), we were right on the money.
Production assessment, Round 3
Some interesting items came out of the Boeings 1Q09 earnings call yesterday (April 22) with regard to production and deferrals.
Oversales of the 737 have been a key element in Boeing being able to maintain current production levels of 31/mo, despite the global recession. As was previously acknowledged by Boeing, 2009 737 oversales were about 100. On the year-end 2008 earnings call in January, CEO Jim McNerney acknowledged that oversales for 2009 had been reduced to about 15% over the production (which mathematically equated to about 55-56 737s).