Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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Pontifications: “Sully” sullies NTSB
By Scott Hamilton
Sept. 12, 2016, © Leeham Co.: Sully, the movie about the miracle of the successful water landing of US Airways 1549 on the Hudson River in New York City, sullies the National Transportation Safety Board.
Apparently not content with the gripping drama of the flight’s emergency itself and the dramatic rescue of all 155 souls on board, the movie gins up an NTSB out to hang Capt. Chesley Sullenberger (Sully) and co-pilot Jeffrey Skiles.
Book review: Glory Lost and Found
Sept. 8, 2016: Glory Lost and Found: How Delta Climbed from Despair to Dominance in the Post-9/11 Era is a ponderous title for a ponderous book.
But this is not a criticism.
Glory Lost is one of the best books I’ve ever read about the turmoil in the airline industry. Authors Seth Kaplan and Jay Shabat, two journalists, put together a book of nearly 450 pages that goes beyond just the focus of how Delta Air Lines spiraled into bankruptcy following 9/11, emerged and suffered through more travails after the 2008 financial market meltdown.
Will United’s new president open door for Airbus?
Scott Kirby moves from president of American Airlines to president of United Airlines. Photo via Google images.
Aug. 30, 2016, © Leeham Co.: Will Scott Kirby’s move from president of American Airlines to the same position at United Airlines lead to a major shift in fleet acquisition at the Chicago-based carrier?
This is an intriguing question that may take some time to answer.
Kirby spent 20 years with American CEO Doug Parker through their careers at America West Airlines, US Airways and American.
Bombardier sees more C Series orders this year
Our coverage of the Farnborough Air Show begins today with an interview with Fred Comer, president of Bombardier Commercial Aircraft. There will be paywall and freewall posts throughout the FIA16 this week.
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Introduction
July 10, 2016, © Leeham Co., Farnborough Air Show: Winning major orders from Air
Fred Comer, president of Bombardier Commercial Aircraft.
Canada and Delta Air Lines earlier this year and the entry into service of the CS100 this Friday with launch customer Swiss International Air should give Bombardier’s bet-the-company gamble a boost for more orders this year.
This is the prediction by Fred Comer, president of Bombardier Commercial Aircraft.
During an interview with LNC on a media demo flight of the CS100 at the Farnborough Air Show, Comer said the smaller BBD can compete with the behemoths Airbus and Boeing for orders in the 125-150 seat sector.
Summary
Comer says:
- Boeing’s prospective 737-7.5 still won’t be competitive.
- The CS100 is better than the Embraer EJet-E2.
- Embraer’s complaints of unfair competition because of Canadian government investment are unfounded.
Read more
Pontifications: The crystal ball
By Scott Hamilton
May 30, 2016, © Leeham Co.: We at Leeham Co. and Leeham News and Comment take some risk when we make analyses, forecasts, projections and predictions. These often put us out on a limb, open us to criticism and even ridicule and as often as not really pisses off those companies that are the target of such predictions.
Some recent events and news stories caught my eye that validated something I predicted eleven years ago.
First, the set up.
Pontifications: Improbably, 787 surplus develops
By Scott Hamilton
May 16, 2016, © Leeham Co.: As improbable as it sounds, a short-term surplus of Boeing 787s has developed, say several market officials. Lease rates in some cases on 787-8s and 787-9s have dropped below $900,000/mo for 787-8s and somewhat above this figure for 787-9s as lessors compete with Boeing to place airplanes.
Analysts covering leasing companies, both publicly traded and privately owned, have also heard about falling lease rates for 787s.
“However, this all hinges on the cost and learning curve assumptions, which are difficult to get confident with considering we hear 787 lease rates are under pressure, and there are slots opening up, which can impact timing of future deliveries,” Canaccord wrote in a research note last week after the Boeing Investors Day in which officials outlined the plans to recover $29bn in deferred production costs. Other analysts also report hearing of lease pricing pressure on the 787s.
- Slow sales for the Boeing 787, reports Reuters.
Pontifications: Big sigh of relief at Bombardier
By Scott Hamilton
May 2, 2016, © Leeham Co.: To say that the order from Delta Air Lines last Thursday for 75+50 CS100s with conversion rights to the CS300s was welcome news for Bombardier is an understatement.
Bombardier has a superb airplane in the C Series. The passenger seats are the most comfortable coach seats of any manufacturers, better than the Airbus A320 and way more comfortable than the Boeing 737. With apologies to Embraer, the C Series is even marginally better than the Embraer E-Jet, which is very good. Read more
Bombardier wins breakthrough C Series order, from Delta
April 28, 2016, (c) Leeham Co.: At long last, after years of disappointment for that big, breakthrough order, Bombardier finally got it: a huge deal from a blue chip
Delta Air Lines ordered 75 CS100s and optioned 50 more. This is the breakthrough order Bombardier has been waiting years to receive. Source: Delta Air Lines.
airline, and one from North America: a firm order for 75 C30S100s and options for 50 more from Delta Air Lines.
Delta has conversion rights to the CS300. Bombardier now has more than 300 firm orders, although many of these are iffy, and commitments for up to 500 more.
This is the order that observers, analysts and aviation geeks have been waiting for during much of the development and production of the C Series.
The announcement came concurrently with highlights of BBD’s first quarter results.
Bombardier’s Delta deal looking good, but don’t celebrate yet
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Introduction
Air Baltic will be the first operator of the Bombardier CS300. Source: Bombardier.
April 18, 2016, © Leeham Co.: Bombardier, if it didn’t dominate the news cycle in commercial aviation last week, must have come close. Consider:
- The Wall Street Journal, and then Bloomberg, reported that BBD was near to winning a big order for 75+50 from Delta Air Lines for its C Series.
- Reuters reported that BBD rejected demands from the Canadian federal government in Ottawa as conditions for investing US$1bn in the company. (Officials tried to walk this back some, saying talks continue.)
- The head of corporate strategy for BBD came forward to forcefully argue for the investment as good for taxpayers, breaking what largely has been a cone of silence over the perceived merits of a deal
- The US$1bn the Quebec provincial government agreed to invest last year remains unfunded.
- BBD stock, which last year dropped to less than C$1, threatening the listings on the Canadian exchanges, jumped to C$1.75 at one point in anticipation of a Delta order.
While on balance, it seems likely Delta will order the C Series, Bombardier has been down this road before. Only a few months ago, the market and others were excited over the prospect that BBD was close to landing an order from United Airlines, only to see Boeing swoop in and grab the deal.
Summary
- This is the second try at a major contract with Delta Air Lines.
- The primary competition is against Embraer, not Airbus or Boeing.
- We revisit our Skyline Risk Assessment, dormant for the extended period in which BBD had no sales of the C Series.
737-7X, 737-10 studies illustrate Boeing weakness in single-aisle market
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The Wall Street Journal revealed last week that Boeing is planning the airplane, which is larger than the current 737-7 but smaller than the 737-8. Jon Ostrower, the reporter, dubbed the plane the 737-7.5. Internally, it’s called the 737-7X.
Summary
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Posted on April 27, 2016 by Scott Hamilton
Airbus, Boeing, Bombardier, CSeries, Delta Air Lines, Leeham News and Comment, United Airlines
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