Leeham News and Analysis

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

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

Farnborough, Day 1: Orders, Price Calculator and other stuff

McNerney rejects “price war.” A quote from a Financial Times story (see below).

He rejected suggestions that a price war had broken out between Airbus and Boeing over the A320 Neo and 737 Max but confirmed the US manufacturer would woo some airline customers of its European rival.

Courtesy of Aspire Aviation, here is a summary of orders through Day 1:

Airbus

Date

Customer

Quantity

Model

Remarks

9th July

Arkia Israel Airlines

4

A321neo

Agreement

Boeing

Date

Customer

Quantity

Model

Remarks

9th July

Air Lease Corp (ALC)

60

737 MAX 8

Reconfirmation rights for 25 more

9th July

Air Lease Corp (ALC)

15

737 MAX 9

Pratt & Whitney

Date

Customer

Quantity

Model

Remarks

9th July

IndiGo

300

PW1100G-JM

9th July

CIT

60

PW1100G-JM

9th July

Cebu Pacific

60

PW1100G-JM

For 30 firm A321neos

9th July

Norwegian Air Shuttle (NAS)

100

PW1100G-JM

MoU

CFM

Date

Customer

Quantity

Model

Remarks

9th July

Air Lease Corp (ALC)

150

CFM Leap-1B

Embraer

Date

Customer

Quantity

Model

Remarks

9th July

Hebei Airlines

5

E-190s

Booked in Q2 backlog

Reuters put together a handy-dandy thing to calculate airplane prices easily. These are list prices, of course.

Some stories of note:

Boeing lands the first blow

High-fliers at the show

United to announce big MAX order July 12

A330 “surgery”

AirInsight is posting daily news and videos.

The Financial Times of London has a piece with Boeing’s Jim McNerney. (Free but limited registration required.) Here’s a relevant quote.

Boeing announced the 737 Max in August last year and Mr McNerney said that “in retrospect” the US manufacturer should have made its decision to proceed with a revamped version of its narrow-body workhorse, rather than a brand new aircraft, “six to nine months” earlier.

 8 Comments

 Posted on July 9, 2012 by

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

     , , , , , , , ,

Odds and Ends: Airbus-Mobile, con’t; final Farnborough update

Airbus in Mobile: We doubt Boeing is really Sleepless in Seattle but this piece is pretty amusing.

Take that, Part 1: Boeing continues to whine about WTO.

Take that, Part 2: So’s your Old Man.

Here are a few final thoughts in advance of the Farnborough Air Show:

  1. It will still be Boeing’s show, with MAX orders or MOUs or Commitments or Love Letters amounting to the hundreds. Look for Air Lease Corp, GECAS, Aeromexico, perhaps some Chinese companies and others to announce.
  2. Airbus’ John Leahy has been tamping down expectations all year but Mr. Showman doesn’t like to be left standing on the sidelines. While you’re watching Boeing’s left hand, don’t be surprised if Leahy pulls a rabbit out of the hat with Airbus’ right hand and ends the show with several hundred orders of his own.
  3. Yes, we predict the Airbus-Boeing sniping will continue. And the sun will rise in the East and set in the West.
  4. Embraer isn’t even holding a press briefing. So we don’t expect much out of them this year.
  5. Bombardier may or may not have CSeries orders to announce. The market doesn’t expect (m)any, concluding that the countdown to first flight is what will begin bringing in orders.
  6. No new program announcements from Boeing (ie, nothing new on 787-10 or 777X). No announcement from Airbus, either, on A350 program developments or the prospect of a long-range, upgraded A330-300 (we think this could come at FAS but just as likely could be later in the year).
  7. No 90-seat turbo-prop from anyone.
  8. This is now Ray Conner’s coming out party as the new (and unexpected) CEO of Boeing Commercial Airplanes. Based on our limited contact with Conner, he’s not as affable as the departed Jim Albaugh. It will be interesting to see how aggressively engaging he is with Boeing’s nemesis, Leahy.

 15 Comments

 Posted on July 4, 2012 by

 Airbus, ATR, Boeing, Bombardier, CSeries, Embraer

     , , , , , , , , , , ,

Farnborough Air Show preview

Overview

This is really expected to be a boring show from the perspective of orders. Airbus has been downplaying expectations following last year’s Paris Air Show blow-out of more than 1,200 A320neo orders. How can you match that? The answer is, Airbus can’t.

Boeing will certainly firm up hundreds of 737 MAX commitments, so this will be Boeing’s show. And there is the buzz that Boeing is partnering with Lockheed Martin and NASA (oh, another government subsidy?) to produce a 2,500 mph SST, with details supposed to come at the Air Show. Then there is the leak that the 787 will fly there, the first time in 28 years Boeing has an aerial flying display.

We’ve talked with several journalists and industry personnel who are skipping the Air Show this year. So are we, and we’ve been at the Farnborough and Paris air shows since 2008. We just don’t expect enough news this year that we can’t get from the press releases.

So here are our expectations for the show:

Read more

 16 Comments

 Posted on June 26, 2012 by

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

     , , , , , , , , ,

Odds and Ends: China trojans; China is the biggest threat; EADS ponders own bank

China trojans: we’re not talking about condoms, either. This item from Defense Tech is pretty alarming. And while this piece is also pretty alarming, though it isn’t about China. Or maybe it is. The chips are made by the same company, sourcing them in China.

China is the biggest threat: So says Jim Albaugh, CEO of Boeing Commercial Airplanes. Aviation Week has this article about an Albaugh appearance in the UK.

EADS ponders its own bank: This would give it access to low-cost funds and protect against the Euro, officials say. Here’s an article. Our first thought: since the WTO ruled Airbus launch aid was illegally structured because of below market rates (but did not rule the aid itself illegal), this returns EADS/Airbus to the low-cost funding access. Clever. Wonder what Boeing thinks about this?

 25 Comments

 Posted on June 1, 2012 by

 Airbus, Boeing, Bombardier, Comac, CSeries, EADS, Embraer

     , , , , , , , , , ,

ISTAT Part 3: Lessors Panel: GECAS, ILFC, AWAS, Air Lease Corp

The final panel at the ISTAT meeting is the much-anticipated lessors’ panel consisting of:

Jeff Knittle, president of CIT Aerospace, moderator;

Henri Courpron, Chairman of ILFC;

Ray Sisson, CEO of AWAS;

Norman Liu, CEO of GECAS; and

Steve Udvar-Hazy, CEO of Air Lease Corp.

Paraphrasing:

HC: All hell broke loose in Europe and upended aviation. Looking at consolidation in Europe. America now had a lot of stability and discipline, and we’ll see that happen in Europe. More fuel efficient aircraft will be required in Europe. I see a lot of opportunity and challenges to come in Europe.
NL: Asia has been by far our most active market, with 70% of our airplanes going there. You have to look at different parts of Asia–you can’t generalize. LCCs in Japan. Always something going on in China. SE Asia, good organic growth. Philippines and Indonesia very interesting. South Asia has had travails.
SUH: North America is going through an interesting time. Canada is a duopoly situation with new Asian and Middle Eastern carriers entering the market. The US is very mature having gone through a lot of trial and tribulation, more disciplined [than before]. After 9/11 there was a slow-down in US carriers taking new airplanes. We have a bow wave of a requirement for new fleeting.
RS: Latin America is under-appreciated. We see rapid growth there. By 2015 may be 17%, 20% of our fleet. There is a remarkable amount of demand and opportunities for lessors.

 15 Comments

 Posted on March 20, 2012 by

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

     , , , , , , , , , , ,

ISTAT Part 2: BBD, EMB, Sukhoi, ATR

Chet Fuller, SVP Commercial, Bombardier

Luiz Chiessi, Director of Marketing Strategy of Embraer

Mark Neeley, VP-Marketing, ATR

John Buckley, VP Business Development, Sukhoi Superjet International

Fuller

  • CSeries weight validated and will be on spec at EIS.
  • Aluminum Lithium is better on fatigue than normal aluminum, much better on corrosion. Combine with composites, D check goes to 15 years. C check improved by 15%.
  • 787 first airplane with All-digital architecture, CSeries is second.
  • Last all-new narrowbody was A320 family.
  • Only aircraft with a 12:1 by-pass ratio; A320neo is 10:1, not sure what ratio Boeing will wind up with on MAX.
  • CSeries has better trip costs than E190, with seat costs of A3320neo. There is no magic here, there is just physics.
  • BBD has on order: 66 CS100, 72 CS300; 124 options, 10 purchase rights, 45 LOIs.

Chiessi

  • Mid-long-haul flights for 70-90 seats increasing in US and elsewhere.
  • 48% of EJet deployment is right-sizing by airlines. 26% for new market development.
  • Will maintain leadership in 70-120 seat segment, not enter into arena of Airbus and Boeing.

Buckley

  • SuperJet International responsible for world product support of Sukhoi for SSJ100.
  • Delivered seven aircraft, another in two weeks.
  • Expect to deliver 23 this year, 42 next year, 60 in 2014, 75-80 total current capacity but can be increased.
  • SSJ100 is only regional aircraft with 2×3, 5 in wider than MD80.
  • 10% less fuel consumption than direct competitor.

Neeley

  • ATR top turbo prop pick in Airfinance Journal investors poll.
  • We’re still making a 50-seat product. We have a family of airplanes.
  • Says ATR 72 has same fuel burn per passengers as A320.
  • One third of all passengers fly under 300 miles.

 26 Comments

 Posted on March 19, 2012 by

 ATR, Bombardier, Embraer

     , , , , , ,

Republic’s Bryan Bedford emulates U-Turn Al

The CEO of Republic Airways Holdings seems to be vying to be America’s version of U-Turn Al, Akbar Al-Baker, the CEO of Qatar Airways.

Bedford appears to be engaged in a campaign to raise questions about the Bombardier CSeries, for which he has orders and options for 80 CS300s, much the same way U-Turn Al alternatively praises then complains about the Airbus A350, Boeing 747-8F (ordered by Cargolux, in which Qatar owns a third) and the Boeing 787. U-Turn Al has also alternative praised, condemned then praised the Airbus A320neo, Bombardier CSeries and the Pratt & Whitney GTF.

Keeping up with U-Turn Al’s about-faces has been a dizzying prospect.

Bedford praised the CSeries when ordering it but has become increasingly skeptical of the program once he ordered the A319neo (with CFM LEAP engines) in what was a financial bailout of his ailing company being dragged down by Frontier Airlines. The Airbus order raised questions whether Bedford would cancel the CSeries since the A319neo competes with the CS300. Bedford initially said the order would stand. More recently, he appears to be doing everything to cast a shadow over the program.

Read more

 10 Comments

 Posted on March 15, 2012 by

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

     , , , , , , , , , , , , , , , , , , , , , ,

Another example of a toothless WTO

As long-time readers of this column know, we have utter disdain for the World Trade Organization and its review of international competitive practices, such as the cases of Airbus and Boeing subsidies.

Here is another example of why we have disdain. As noted in this example, the WTO found China to be in violation of WTO rules on raw materials export rules but China did not remove the restrictions.

We’ve previously noted that the WTO found Brazil and Canada to be in violation of export support for Embraer and Bombardier airplanes–and nothing happened.

We’ve previously noted that the WTO has no power to enforce its own decisions and that the trade rules allow the winning country to impose tariffs on industries not involved in the original dispute. Thus, with respect to the Airbus and Boeing cases, the US could impose tariffs on French wine and the European Union could impose tariffs on Washington State wine or apples–or any other industries.

We find this completely ridiculous.

While the US has asked the WTO authority to impose tariffs with respect to the Airbus case, we would be shocked if it followed through (assuming, of course, the WTO authorized action) and tax Airbus imports into the US. The EU would retaliate by placing tariffs on Boeing. Nobody would win.

 5 Comments

 Posted on March 13, 2012 by

 Airbus, Boeing, Bombardier, Embraer

     , , , , ,

Lessor worries about Airbus, Boeing production rates

Here is an expanded version of a story we did last week for Flight Global Pro.

The refrain that Airbus and Boeing are over-producing the core-A320 and 737 programmes resurfaced with lessor AerCap in an interview with The Wall Street Journal.

Aengus Kelly, CEO, chastised the Big Two OEMs for production plans announced so far. Airbus will go to a rate of 42 per month by the end of this year and is considering 44. Boeing plans to hit rate 42 by 2014. Both companies are considering rates as high as 60 per month.

Airbus produces airplanes only 11 months of the year while Boeing is on a 12 month production schedule.

In its 2011 20-year forecast, Boeing predicts there is a need for 23,370 single aisle aircraft in the 90-210 seat category. Airbus predicts 19,165 in the 100-210 seat market.

Based on the announced production rates, and assuming no changes through the 2030 forecast period in production—or for adjustments in the forecasts—Airbus and Boeing will produce 18,551 single-aisle airplanes.

If both OEMs go to rate 60 by 2016, their combined production exceeds their own single-aisle forecasts.

Read more

 12 Comments

 Posted on February 27, 2012 by

 Airbus, Boeing, Bombardier, Comac, Embraer

     , , , , , , ,

More Odds and Ends: Aircraft list prices, airline break-even

Aircraft List Prices: It took some doing, but we’ve collected the list prices of all the major commercial airplanes. The comparisons are interesting. We’ve tabulated these into seat categories.

List prices, of course, have no relationship to what customers actually pay. Discounts of 25%-30% are common and really good customers–like Southwest Airlines for Boeing–have been known to get discounts of up to 60%.

There are several notables in this list:

  • Compare the pricing of the C919 and the MS-21 to the Airbus and Boeing products;
  • Compare the Q400NG to the ATR-72-600;
  • Compare Airbus to Boeing; and
  • Compare CSeries to 737-600/700 and there isn’t that much difference; the gap is wider compared with Airbus.

Is there any particular point to this? Not really–it’s just one of those facts that intrigue us and a host of aviation geeks.

Read more

 34 Comments

 Posted on February 14, 2012 by

 Airbus, Airlines, ATR, Boeing, Bombardier, Comac, Embraer

     , , , , , , , , , , ,

Email Subscription

Click to subscribe to this blog and receive notifications of new posts by email.

Twitter Updates
Archives

Copyright © 2025 · All Rights Reserved · Leeham News and Analysis

Sitemap · RSS Feed · Log in