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
Howmet: Supplier still cautious about rate increases at Airbus, Boeing
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By Bryan Corliss
March 3, 2023 © Leeham News – Executives at Howmet Aerospace – who got burned in 2022 when expected production rate increases at aircraft OEMs didn’t materialize – said Tuesday they’re still taking a cautious approach to ramping up their operations
However, the company – which casts fasteners and engine components for aerospace and other industries – does see signs of growth ahead.
“We remain cautious about commercial aircraft build in the second half (of this year), until we see clear evidence of consistent production rate increases,” Howmet CEO and Executive Chairman John Plant said.
Production rates at Airbus and Boeing “will be controlled by the efficiency of both the aircraft assembly lines and the supplier parts, which leads to the final production being set by the weakest link in all of the supply chain,” he added.
Howmet reported strong growth for the quarter, with revenue up 29% year-over-year, driven by sales of engine components, aerostructures and fasteners.
The company reported profits of $148 million for the quarter, which was up 13% from the same quarter last year.
- Howmet laid off workers at end of 2022
- Company hiring to support rate increases
- Howmet projects growth this year
Alaska Airlines announces hydrogen-electric partnership with ZeroAvia
VIPs were on hand Monday at a hangar on Paine Field as Alaska Airlines and ZeroAvia announced that the airline had donated one of its recently retired de Havilland Dash 8 Q400 aircraft to be a testbed for ZeroAvia’s new hydrogen-electric propulsion systems./Bryan Corliss photo
By Bryan Corliss
May 2, 2023 © Leeham News – Two-and-a-half years ago, a hydrogen-powered regional aircraft for Alaska Airlines was a caffeine-fueled brainstorm, the airline’s head of development said.
Two-and-a-half years from today, the flight of this kind of plane may be close to becoming reality.
That’s how fast the technology is evolving, said Pasha Saleh, who manages Alaska Air Group’s Star Ventures investment fund.
The fund is one of the investors in ZeroAvia’s effort to develop a hydrogen-electric turboprop motor strong enough to power regional aircraft. On Monday, ZeroAvia and Alaska unveiled the de Havilland Dash 8 Q400 that will be the testbed for the project.
VIPs touted the Alaska-ZeroAvia partnership for building the “world’s largest hydrogen-powered commercial aircraft.”
The goal is to have small aircraft with hydrogen-electric motors flying as soon as two years from now, said ZeroAvia CEO Valery Miftakov. “It’s quite aggressive targets that we have, but it can work.”
- ZeroAvia gives 1.8 MW engine a spin
- Alaska sees hydrogen as an option on regional routes
- ZeroAvia envisions producing green hydrogen at airports
- VIPs laud progress on hydrogen flight
- WA Gov. confirms retirement, hints at future
Pontifications: Engine makers’ business model needs overhaul
By Scott Hamilton
May 2, 2023, © Leeham News: The business models for engine makers for decades have been simple: deeply, deeply discount the engines on the sale and make up the revenue and profits on the maintenance, overhaul, and repair (MRO) contracts.
It’s a model that’s served engine makers and customers alike well. Customers save millions of dollars on the upfront purchase of airplanes. The engine companies win market share.
There are downsides for the Original Equipment Manufacturers (OEMs), though. The discounts typically are steeper than those offered by Airbus and Boeing (and Embraer and ATR). LNA has seen deals with discounts as steep as 80% on the sales price. We’ve even seen one deal in which the OEM gave (as in free) the engines in exchange for the MRO contract.
The big downside to this is that it can take 10-12 years, or more, for the OEMs to recover their research and development and production ramp/learning curve costs. Then as the CFM 56 matured into perhaps the most reliable jet engine ever, with more than 25,000 hours on-wing, followed by the IAE V2500, MRO services contracts didn’t return the revenue and profits as quickly as before.
Open Skies in Africa: a jump start to post-covid recovery?
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By Judson Rollins
May 1, 2023, © Leeham News: Could Africa’s first real “open skies” implementation boost its aviation recovery? So far, the continent’s rebound from covid has been anemic as food and energy crises, surging inflation, and debt tightening have battered consumers and producers alike.
Source: Wikipedia.
A December report from the International Air Transport Association (IATA) showed Africa’s post-covid traffic recovery on a trajectory like Europe or Latin America, with 2019 passenger volumes not expected to return until 2025. Industry economists believe the average African airline profit margin this year will be -1.7%. The US dollar’s continued strength hasn’t helped, given its impact on most non-labor airline costs, and looms as an even greater threat to profitability in coming years.
Summary
- African aircraft order books are relatively thin
- Flag carrier troubles, limited affordability continue to dampen growth
- Single African Air Transport Market: a new chapter?
Bjorn’s Corner: New aircraft technologies. Part 10. Engine choice
By Bjorn Fehrm.
April 28, 2023, ©. Leeham News: This is a summary of the article New aircraft technologies. Part 10P. Engine choice. The article discusses the engine architecture choices that must be made when developing the next-generation airliners.
Figure 1. The Pratt & Whitney high bypass geared turbofan technologies. Source: Pratt & Whitney.
The Small Airliner problem, Part 2
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By Bjorn Fehrm
April 27, 2023, © Leeham News: We started a series about the viability of the business plans for small airliners (nine to 50 seats) last week in the light of a continuing decline of regional airlines in the US and Europe.
To understand whether fundamentals are stacked against small airliners, we look at operational cost factors and how these scale with aircraft size. Then we add the revenue and yield and discuss the conditions for viable business plans for different size aircraft.
This week we use the Leeham airliner performance and cost model to compare the airframe energy and fuel consumptions for airliners spanning nine to 200 seats.
Figure 1. Eviation Alice is a battery-based nine-seat electric aircraft. Source: Eviation.
Summary:
- On an airframe energy level, a smaller airliner consumes more energy per transported passenger than a larger one.
- If we change the metric to propulsion energy consumption, the trend is augmented as small propulsion solutions are less efficient than larger ones.
UPDATED: Boeing says it still will deliver up to 450 737s this year
Boeing Co. photo
By Bryan Corliss
April 26, 2023, © Leeham News — Boeing says it will increase rates on the 737 line in Renton to 38 a month to maintain its plan to deliver between 400 and 450 737 MAX jets to airlines this year.
That was the first line of the company’s first-quarter earnings release, which showed Boeing lost $149 million on the quarter, on revenues of $17.9 billion.
Boeing had optimistically aimed for jumping MAX rates from the current 31 a month, as soon as June. However plans for the 737 line had been in question, after recent revelations that manufacturing problems and a software issue would cause delays in deliveries.
- ‘Gnarly’ 737 defect to take weeks to fix
- Boeing commits to MAX increases
- Improving numbers at BCA
- Supply chain issues continue, Boeing says
UPDATE: GE reports double-digit growth for first quarter
By Bryan Corliss
April 25, 2023, © Leeham News – GE reported generating its first free cash flow in a decade, along with double-digit growth in orders, revenue, and operating profit, amid what it called a “robust” market for commercial aircraft engines and services.
The company reported a profit of $1.3 billion from its GE Aerospace segment in the first quarter, up 46% from the same quarter last year.
The highlight of the quarter was the sale of some 800 LEAP engines to Air India, which will power the airline’s new Airbus and Boeing jets. The engines will be built by CFM, the joint venture between GE and Safran.
In addition, GE won the orders for the engines powering the 30 Boeing 777X and 787 jets Air India ordered, making it arguably the biggest winner in the year’s biggest aircraft deal.
- GE CEO sees supply chain stabilizing
- Services generate more revenue
- How long will good times last?
UPDATE: Raytheon reports 10% sales growth and record backlog
By Bryan Corliss
April 25, 2023, © Leeham News – Raytheon reported a 10% increase in first-quarter sales and a record backlog of $180 billion in orders, amid what Chairman and CEO Greg Hayes called “continued global airline travel and defense systems demand.”
Among its commercial aircraft segments, Collins Aerospace had first-quarter sales of nearly $5.6 billion, up 16%. That was driven by a 24% increase in commercial aftermarket sales and a 12% increase in commercial original equipment sales.
Collins’ operating profit was up 80% from the first quarter of 2022, Raytheon said.
Meanwhile, Pratt & Whitney had first-quarter sales of $5.2 billion, up 15%, with a 27% increase in original equipment orders and a 14% increase in commercial aftermarket sales.
Pratt& Whitney’s first quarter profit of $415 million was up 175% compared to the first quarter of 2022.
- ‘Constant contact’ with OEMs on rates
- Parts of supply chain stabilizing, COO says
- Commercial aircraft sales lead growth