Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- The BWB has a long way to go before flying passengers, freight May 12, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 21. May 9, 2025
- Does an A220-500 need a new wing and engines? Part 2. May 8, 2025
- Embraer downplays tariff impact on 2025 results May 6, 2025
- JetZero readies effort for private equity fund raising May 5, 2025
Embraer reports first-quarter losses but says production will increase
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By Bryan Corliss
May 5, 2023 © Leeham News – Embraer on Thursday reported a loss in what typically is a slow quarter for the Brazilian jet-maker.
However, executives talked up plans for production ramp-ups and ongoing sales campaigns as they pointed toward growth in future quarters.
“We are on track and we are going to get there,” CEO Francisco Gomes Neto said.
- Deliveries up year-over-year
- Supply chain ‘still challenging’
- 11 active campaigns involving 200 jets
Bjorn’s Corner: New aircraft technologies. Part 11. Airframe.
By Bjorn Fehrm
May 5, 2023, ©. Leeham News: In our series on the different technologies available when developing next-generation airliners, we have covered the fuselage configuration and engine options.
Now we turn to airframe technologies. We will look at different airframe architectures, their advantages, and disadvantages. To support the discussion, we will model the different variants in our Airliner Performance and Cost model to understand their characteristics.
Figure 1. The Boeing truss-braced wing is a candidate for the next Heart of the Market airliner. Source: Boeing.
Airbus 1Q2023 results: Supply chain problems persist
By Bjorn Fehrm
May 4, 2023, © Leeham News: Airbus has presented its results for the first quarter of 2023. The supply chain problems that lowered the 2022 production targets and that Airbus thought would subside in 2023 persist.
The company sticks to its 2023 guidance of delivering 720 commercial aircraft but now adds that the year will be more backloaded than thought. Guidance of EBIT adjusted of €6bn and Free cash flow of €3bn remains.
Airbus delivered 127 commercial aircraft in the quarter, compared with 140 last year. Net orders increased from 83 for 1Q2022 to 142 for the quarter.
The Small Airliner Problem, Part 3
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By Bjorn Fehrm
May 4, 2023, © Leeham News: In our series about the viability of the business plans for small airliners (nine to 50 seats), we have covered how energy and fuel consumption scales with the size of the airliner.
The cost factor we examine today is the maintenance cost for keeping an airliner fit for purpose and safe.
We use the Leeham aircraft performance and cost model to get the data for the maintenance costs for airliners going from nine to 200 seats.
Figure 1. The Cessna Sky Courier is a new 19-seat small airliner with conventional propulsion. Source: Textron Aviation.
Summary:
- The maintenance costs of an airliner scale differently from the energy and fuel consumption we studied last week.
- We discuss the scaling metrics for the airframe maintenance costs and how these differ from what drives engine maintenance costs.
UPDATE: Spirit says 737 manufacturing errors will disrupt deliveries through July
By Bryan Corliss
March 3, 2023 © Leeham News – The manufacturing errors its team made on Boeing 737 MAX fuselages will cost Spirit AeroSystems at least $31 million to fix, with work on the units still at the Wichita factory going on until the end of July, the company reported this morning.
But that’s just the start, Spirit executives warned.
“Additional costs are expected, including costs Boeing may assert to repair certain models of previously delivered units in their factory and warranty costs related to affected 737 units in service,” the company said in its quarterly earnings release.
The time and cost to make those repairs will have to be determined on “a unit-by-unit analysis,” Spirit said, adding that it “cannot reasonably estimate the remaining potential costs at this time.”
Repairs to the fuselages on hand in Wichita will cost $100,000 to $150,000 each, the company estimates. Spirit has revised its manufacturing process and implemented new quality controls, the company said.
Overall, Spirit reported an operating loss of $95 million for the quarter, which more than doubled its losses in the first quarter of 2022. The growing losses came even though Spirit increased revenues by 22% year-over-year, to $1.4 billion.
Spirit said that since the close of the quarter on March 30, it has received $230 million in cash advances from customers, of which $180 million has come from Boeing. It will receive another $50 million in advances later this year. Spirit is to repay those advances in 2024 and 2025.
- Some 750 737s to be inspected, may need rework
- Spirit to increase 737 rates in August, October
- Deliveries to Airbus to be down this year
- ‘Fragile’ supply chain remains an issue
- ‘Primary object is to reward our IAM colleagues’
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.