Leeham News and Analysis

There's more to real news than a news release.

There's more to real news than a news release.

Southwest launches 737-8, bypasses 737-7 for now

Here is an article we did yesterday for Flightglobal Pro’s subscription service.

The Southwest Airlines order on 13 December launching the 737 Max programme is a launch of the -8 version. The carrier, which has substitution rights between the -7 and the -8, has chosen to bypass the -7 for now.

Brian Hirshman, SVP Technical Operations, told Flightglobal Pro on 15 December that the carrier is up-gauging its fleet, which it began doing this year with acquisition of the 737-800 for the first time. Southwest, throughout its history since is 1971 birth, has relied on the 737-200/300/500/700, preferring smaller sized aircraft and high frequency as its business model.

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 16 Comments

 Posted on December 16, 2011 by

 Airbus, Boeing, Bombardier, CFM, CSeries, Pratt & Whitney

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Odds and Ends: TSA, 787 endurance and Frontier, again

This just in:

Busted. We’re a big fan of the Discovery Channel’s Mythbusters. In the warped sense of humor department, we found this to be pretty amusing, since nobody got hurt.

Original Post:

TSA: Anyone who has flown in the US knows that the airport experience is probably the worst part of traveling. It’s worse than the abominable on-board service now provided by most US airlines. It’s worse than the crowded airplanes and the cramped legroom. TSA’s use of body x-ray machines is invasive. The 3-1-1 rule about liquids is absurd and the requirement to remove shoes before going through magnometers is silly.

In Europe, the body x-ray machines we’ve been through (and we had no choice for an alternative method) are less objectionable. The particular machine at Delta’s Amsterdam connecting gate was a stick figure, not an x-ray of the body itself. The stick figure shows dots where “something” appears and the security person did a quick pat-down of these locations. Much less invasive than the TSA. And the shoes stayed on. This actually was the first body scanner we went through since they were introduced and because it was a stick figure, we had no objection.

Business Week has this article talking about the TSA and its silly policies.

Boeing spent billions designing the 787 (we’re thinking only of the standard expense here, not the overruns) to dramatically improve the passenger experience, and it did a very good job. And Boeing is spending lots of money to aid airlines in training, to reduce in-flight fuel expenses and to improve the air traffic management systems.

Too bad it can’t control what the airlines do with the interior, but even that isn’t the real challenge: it’s the airport experience.

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 4 Comments

 Posted on December 7, 2011 by

 Airbus, Boeing, Bombardier, Embraer, Frontier Airlines

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Odds and Ends: Frontier Airlines, first 737 at rate 35, Embraer

Frontier Airlines: At the Paris Air Show, Republic Airways Holdings ordered 80 A319/320neos with CFM LEAP engines, and the order was touted as the death knell by some for the Bombardier CSeries–also ordered by Republic for Frontier (40+40). As we wrote at the time, the Airbus/CFM deal was clearly a financial bail out for Frontier, which leased Airbuses from GECAS and had maintenance agreements with CFM. The leases and maintenance agreements were restructured for the ailing airline, and Airbus agreed to contribute a modest amount of cash to the airline.

We were of the opinion then–and are more convinced now–that Frontier won’t survive t0 take delivery of either the Airbus or Bombardier orders. It’s squeezed between United and Southwest airlines at Denver and between Southwest and Delta at Milwaukee. This article in the Denver Post neatly summarizes the current situation.

Will Frontier’s likely demise kill off the CSeries? Not hardly. We would be willing to bet BBD is double-booking these order positions. Doing so against weak airline orders is common practice among the OEMs.

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 4 Comments

 Posted on December 6, 2011 by

 Airbus, Boeing, Bombardier, CSeries, Embraer

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Odds and Ends: Sharklets, CAPA analyzes the Middle East

A320 Sharklet: Jon Ostrower has a detailed piece about the wing work needed to retrofit the A320 with sharklets and some thoughts about what this means for the neo.

Dubai Air Show: The Center for Asia-Pacific Aerospace (CAPA) does an analysis on the orders placed at the Dubai Air Show and what these mean. CAPA has a couple more links within the article that are worth clicking. One link is about Bombardier and its CSeries progress.

Middle East: More on the region: Bloomberg has this report in which Emirates Airlines is considered a safer investment than the sovereign risk of Dubai.

Bernstein Research, meanwhile, issued a note today (Nov. 28) on the Middle East. It writes:

Long term strategies at Boeing and Airbus for long haul aircraft need a special focus on Middle East airlines. We see growth at the big three Middle Eastern airlines (Emirates, Qatar, Etihad) as a trend that will not end any time soon and will come heavily at the expense of European and Asia-Pacific airlines (e.g. Lufthansa, Air France, British Airways, Thai, Singapore, Qantas). The big three airlines are all now among the fifteen largest long haul airlines in the world in terms of widebody fleet plus backlog (Emirates is the world’s largest and Qatar the third). Compared to other regions, the Middle East is an outlier in that planned fleet growth is much larger than could be justified by the region’s GDP growth alone. But, this fleet growth is all about acting as a “sixth freedom” hub for long haul traffic, particularly connecting the Asia-Pacific region with Europe and Africa.

Pratt & Whitney: Time magazine named the GTF one of the top 50 inventions in 2011. The Montreal Gazette has this take on the Time honor. (We’d link directly to Time’s article, but it is for paid subscribers only at this point.)

Air India: The airline is now apparently planning to sell its new Boeing 787s and lease them back, thus neatly avoiding the controversy over export financing.

Boeing Wichita: News broke last week that Boeing is studying closing its Wichita operation, which is dedicated to military business. With the defense budget under attack, Boeing is finding it hard-pressed to keep Wichita open, according to news reports. The news sent Kansas politicians scurrying and set off some irate comments because Boeing promised Kansas 7,500 jobs in the KC-X tanker competition if it won (as it did). The politicians say Boeing promised Wichita the tanker finishing business and it better keep its promise. The Wichita Eagle has this latest article, which also has some interesting history of Wichita’s role in aerospace.

KC-46A Tanker: Speaking of the tanker, DOD Buzz and Bloomberg News have reports that Boeing is likely to lose money on its initial contract with the tanker. This is not particularly new; this was first reported earlier this year. But the amount has grown from a $300m loss to $500m on a $4.8bn contract.

 9 Comments

 Posted on November 28, 2011 by

 air force tanker, Airbus, Boeing, Bombardier, Pratt & Whitney

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Odds and Ends: A380 cost, American’s engine order, ‘war on Boeing’

A380 cost: Flight Global reports that Air France–a launch customer of the Airbus A380–just concluded a lease deal for one of the giant airplanes for a rental of $1.8m per month.

For an airline of Air France’s credit, lease rates are typically on the 0.80% range and sometimes as low as 0.72%. This, then, infers a purchase price of $216m-$230.4m.

American Airlines: It was announced Monday AA split its engine order between CFM (for the Airbus A319) and IAE (for the A321). Given American’s large CFM-powered Boeing 737 fleet, some might think CFM should have won the entire engine deal. But the IAE V2500 is viewed as the better engine for the larger A321–more thrust and lower fuel burn–and American follows Lufthansa Airlines in splitting the engines for the smaller and larger Airbus family.

Aviation Week has an article that provides some other interesting information about the leases for the Airbuses.

Pratt & Whitney: Does the American deal mean PW has a good change of placing the GTF on the A320neo order by American? PW’s buyout of the Rolls-Royce share of IAE certainly gives PW the ability to do a “global” deal involving V2500 and GTF engines, something CFM has been able to do for CFM56 and LEAP engines from inception. While Rolls-Royce was involved in IAE, there was no incentive for RR to be flexible on V2500 sales that might lead to GTF transactions. Now PW can wheel and deal all it wants.

War on Boeing? Aviation Week has a speculative piece that US airlines have declared “war on Boeing.” This think-piece relates to the Air Transport Association suing the US Export-Import Bank over plans to finance 787s ordered by Air India, a financial and management basket-case.

While AvWeek raises some interesting points, we’re told this has more to do with a dispute between Delta Air Lines–instigator of the ATA action–and India. We think Boeing is merely getting mugged in the process and that this is not a “war on Boeing.”

Turboprops: Jets always draw the most attention but Aspire Aviation has a long piece about turboprops, specifically the Q400 vs the ATR series, that merits reading. Turboprops are slowly regaining favor in some quarters.

The Beauty of it: From Randy Tinseth’s blog, here is a photo that is just a beauty, from the Dubai Air Show:

 36 Comments

 Posted on November 22, 2011 by

 Airbus, Boeing, Bombardier, CFM

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Odds and Ends: A350, 737MAX, 787; ACG is #10; and more

Guessing Game: The mysterious nine customers for the 737 MAX continues to confound observers. Actually, there were nine before Aviation Capital Group signed up, so ACG was #10.

  • American Airlines
  • Lion Air
  • Aviation Capital Group
  • GECAS
  • COPA
  • GOL
  • Norwegian Air

Three more; we have three of the names but not confirmed.

Airbus A350 delay: Airbus announced a delay of six months; we think it prudent to add 3-6 more.

Aviation Week has a comprehensive table of neo vs MAX orders.

Boeing 787 Deliveries: All Things 787 reports there will be only two more deliveries this year and why.

Boeing 737 MAX: Note the wording in the Boeing press release about Aviation Capital Group’s commitment for the MAX: “ACG first leasing company to announce commitment for 737 MAX.” Not that ACG is the first lessor to commit; it is the first leasing company to announce its commitment. We understand two other lessors have committed. One is GECAS (no surprise, given the family-engine connection). We haven’t identified the other one with enough confidence to publish its name yet.

Bombardier: There remain three unidentified orders announced by BBD: one in Europe, two in the Middle East. The Middle Eastern ones should be revealed at the Bahrain Air Show. (This probably gives you a hint who they are and why they weren’t revealed at the rival Dubai show.)

Also, with some aerospace analysts increasingly speculating the CSeries entry-into-service will slip to 2014 (and, for the moment, BBD says ’tain’t so), we’ll remind everyone that the AirInsight CSeries Business Case report of December 2010 assumed a 2014 EIS.

Embraer: EMB has teamed with Alcoa to offerer advanced metals on the E-Jet RE, to lighten weights and reduce maintenance. EMB isn’t using composites (BBD’s CSeries has an aluminum-lithium fuselage and composite wings), but the E-Jets at 2×2 seating and 2,000 mile range are lighter than the CS-100 with which they will compete. Ninety percent of the US domestic flying is less than 2,000 miles (other areas of the world are likewise), so the operating costs vs the 2×3 seating, heavier CS100 will be interesting to watch.

YouTube: We’ve added a YouTube category in the right hand column, with links to OEM You Tube channels. So far we have Airbus, Boeing, Bombardier Aerospace, CFM and Embraer. As we find more, we’ll add them.

 38 Comments

 Posted on November 18, 2011 by

 Airbus, Boeing, Bombardier, CFM, Embraer, Embrarer, Pratt & Whitney

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Dubai Air Show review

The Dubai Air Show is over, with record orders being announced.

2 x B777F for Qatar

20 x A320neo for ACG

45 x A320neo/30 x A320  for Spirit (MoU)

50 x A320neo for Qatar with PW1100G-JM (+30 options)

5 x A380 for Qatar (+3 options)

ALAFCO announcing GTF for all A320neo

Emirates 50+20 777-300ERS

10 x CS300 for Atlasjet (LoI)

We took a bye on daily coverage because we weren’t there and the on-site reporters could do better than we could from afar. So we decided to do a post-show pontification.

Overview

Airbus and Boeing dominated the headline–no surprise there–but while Boeing had a blow-out order with 50+20 777-300ERs from Emirates Airlines, Airbus had another mind-xxxx from the mercurial Akbar “U-Turn” Al-Baker, CEO of Qatar Airways. Al-Baker is now the subject of a mocking Twitter account, @AkbarAlFaker, having a conversation with @MichaelOhReally.

This Bloomberg story gives a nice wrap.

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 30 Comments

 Posted on November 16, 2011 by

 Airbus, Boeing, Bombardier, CFM, CSeries, Embraer, Pratt & Whitney, Rolls-Royce

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PNAA aerospace conferences in February, March in Seattle

The Pacific Northwest Aerospace Alliance is hosting two conferences in the Seattle area in February and March.

PNAA’s 11th annual conference is Feb. 6-7-8 at the Lynnwood (WA) Convention Center, north of Seattle and south of Everett. Information may be found here. This 2 1/2 day conference is comprised of a Defense Focus Day on the afternoon of Feb. 6; a day-and-a-half of commercial aviation presentations and a Suppliers’ Fair on the afternoon of the 8th.

Airbus, Boeing, Bombardier, CFM, Pratt & Whitney, the Teal Group’s Richard Aboulafia, G2 Global Solutions’ Michel Merluzeau, Alcoa and Electroimpact are among the presenters on the commercial side.

Tayloe Washburn of Project Pegasus and the Washington Aerospace Partnership will discuss the issues surrounding the assembly site of the 737 MAX.

Boeing’s Insitu  EADS North America and Lockheed Martin are among the defense industry presenters.

More than 300 people attended the 2011 conference, which is now the largest in the Pacific Northwest and one of the largest on the West Coast. PNAA serves Washington, Oregon, Idaho, Montana, Alberta and British Columbia. It has arranged trade missions from Europe, Asia and Latin America visiting here to meet with Washington State suppliers. PNAA was also asked by the White House and the US Commerce Department to arrange a meeting of key CEOs in Seattle to discuss economic issues affecting aerospace.

The March event PNAA is organizing is a Suppliers Forecasting Symposium. This one day event on March 12 precedes the first USA-based Aerospace & Defense Supplier Summit organized by BCI Aerospace.

The Symposium is the first of its kind: a day-long event focused on forecasting the requirements in the supply chain that services Boeing, other OEMs and the Tier 1 suppliers. Boeing Commercial Airplanes and Boeing Defense, Space & Security will be presenters as well as two noted aerospace analysts from Wall Street, David Strauss of UBS and Robert Spingarn of Credit Suisse. They follow Boeing and the supply chain and have their views on forecasting the needs of the suppliers.

These are two important events sponsored by PNAA and the A&DSS summit by BCI Aerospace is equally important to the Washington aerospace supply chain. PNAA members get a discount to the A&DSS event.

 1 Comment

 Posted on November 13, 2011 by

 Airbus, Boeing, Bombardier, CFM, EADS, Pratt & Whitney

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Embraer decides on re-engine, takes a pass on NSA

Embraer announced that it will take a pass on developing a New Small Airplane in the 130-155 seat class and instead re-engine the E-Jet series, possibly with stretch to 133 seats (smack in the middle of the Bombardier CSeries 100/300 size). Targeted entry-in-service (EIS) is 2018.

Aeroturbopower, which focuses on engine stuff, already has this back-of-the-envelope analysis.

As Aeroturbopower notes, EMB favors a one-stop, trans-continental airplane (2,000-2,200nm) over the full transcontinental range of the CSeries (although BBD offers a lighter-weight CSeries with 2,200nm range as well). About 90% of the US domestic flights are within this range but the E-Jet is 2×2 vs the CS 2×3 seating. Aeroturbopower concludes the E-Jet will have lower seat costs.

Aeroturbopower also compares the E-Jet with the Mitsubishi MRJ.

 6 Comments

 Posted on November 11, 2011 by

 Bombardier, CFM, CSeries, Embraer, Pratt & Whitney, Rolls-Royce

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Airbus chief bemoans slow pace of change: Aviation Week

Robert Wall has this short article that raises an interesting point. Tom Enders, the CEO of Airbus, “bemoans” the slow pace of change in aviation. He is quoted as saying that the aviation industry has forgotten how to “take risks and manage” them properly.

There’s a lot to be said for that. Airbus had its own issues with the A380 production management and the A400M program design. It remains to be seen how challenging the A350 production becomes, but there is ample evidence that the challenges are just beginning.

Bombarier says its CSeries program is on time but margins are largely gone.

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 19 Comments

 Posted on October 19, 2011 by

 Airbus, Boeing, Bombardier

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