March 22, 2021, © Leeham News: Embraer wants to become a big player in China.
“We see a huge market potential there,” said Arjan Meijer, CEO of Embraer Commercial Aviation, in an interview with Nikkei Asia. The news outlet continued, “The company expects worldwide demand for 5,500 jets with up to 150 seats over the next 10 years. A third of that will come from Asia, with a large part of it from China, Meijer added.”
However, China presents risks and few rewards to companies wishing to gain a significant foothold. This is especially true for commercial aviation companies. China has high ambitions for the commercial aviation industry. Partnering with China in this sector produced more heartbreak than success.
Posted on March 22, 2021 by Scott Hamilton
By Bjorn Fehrm
March 19, 2021, ©. Leeham News: Embraer presented its full-year 2020 results today. Revenue for 2020 was down 31% at $3,771m versus $5,463m in 2019. The resulting loss was $323m, compared with $77m 2019.
The company managed to stay cash neutral with $2.8bn at exit 2020, the same as when exiting 2019. Due to the uncertainty of how COVID-19 develops during 2021, there was no 2021 guidance.
Posted on March 19, 2021 by Bjorn Fehrm
March 19, 2021, ©. Leeham News: This week we look deeper into the gains we can have for a hydrogen gas turbine-propelled airliner.
The ideas stem from the work of Chalmers Professor T. Grönstedt’s team in different EU research projects.
Posted on March 19, 2021 by Bjorn Fehrm
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By Vincent Valery
Introduction
Mar. 18, 2021, © Leeham News: After assessing the performance of the A350-1000 against the 777-300ER on a trans-Pacific route, we turn our attention to a dedicated A350 variant developed for Qantas’ Project Sunrise.
Posted on March 18, 2021 by Vincent Valery
By the Leeham News Team
March 16, 2021, © Leeham News: OEMs delivered 743 jet-powered passenger aircraft to airlines last year, compared with 1,684 at this cycle’s peak in 2018. The below chart shows the total for all OEMs as well as Airbus and Boeing (including McDonnell-Douglas).
Posted on March 16, 2021 by Vincent Valery
March 15, 2021, © Leeham News: GE Corp.’s decision to sell its mega-leasing unit, GECAS, to AerCap represents a huge shift in commercial aviation.
For decades, GECAS was the largest lessor in the world. One of GE’s best profit centers, GECAS was a major source of financing to airlines. The lessor purchases and leases back airliners, as do most lessors, as well as initiating leases with orders received directly from the OEMs. GECAS’ scale was a magnitude or two larger than most competitors.
The closest competitor was International Lease Finance Corp., a unit of insurance giant AIG. ILFC’s leadership liked to boast the asset value of ILFC’s smaller fleet was greater than GECAS, which while larger had more older airplanes in its portfolio.
Posted on March 15, 2021 by Scott Hamilton
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By Judson Rollins
March 15, 2021, © Leeham News: A flood of media coverage has centered on Chinese airlines’ supposed recovery from COVID-19.
The Chinese “big three,” Air China, China Eastern, and China Southern, made headlines with their rapid restoration of flights and even the announcement of new routes. Industry commentators and industry group IATA trumpeted the “recovery to pre-crisis levels” in China.
New routes garner headlines in normal times, but even more so now. And there is other good news: the US Transportation Security Administration last week processed the highest number of passengers since the pandemic all but shut down traffic a year ago.
But yield quality of such traffic in most markets is problematic. Cheap fares draw leisure travelers, yet business traffic remains a fraction of pre-pandemic levels and there are few signs of near-term recovery. Executives at Lufthansa Group, where business travelers deliver nearly 60% of revenue, said earlier this month they believe such travel will ultimately only return to 80-90% of pre-pandemic levels – and not until mid-decade.
If market analysts want to examine China’s recovery, they have to look at the whole picture. China may be leading the way in capacity restoration, but it’s not the “good” news touted.
The positive trends in China are in mainland domestic flights and seats, not passenger traffic or revenue — and not at all for regional (Hong Kong, Macau) or international routes. Scant attention has been paid to operational data from the country’s airlines – and even its national aviation regulator – showing passenger traffic even on domestic routes is still well below pre-COVID levels.
The “big three’s” third-quarter 2020 financial reports – when the domestic market was supposedly beginning to hit its stride – showed revenue losses far greater than the airlines’ pre-crisis share of revenue from international service. Even those disastrous results included a strong tailwind from increased cargo revenue, as the airlines don’t break out their revenue by business segment outside of annual reports.
LNA dug into the reports of China’s three state-owned airlines, privately held Hainan Airlines, low-cost carrier Spring Airlines, and monthly data releases from the Civil Aviation Administration of China (CAAC). Much of this data is only published in Mandarin, or in English only after long delays, so we enlisted translation help to build a more complete picture.
Posted on March 15, 2021 by Judson Rollins
March 12, 2021, ©. Leeham News: I had the chance to talk about Sustainable Air Transport with Airbus VP Zero Emission Aircraft, Glenn Llewellyn, in the week.
The discussion centered around Airbus’ overall direction and the targets with their ZEROe project.
Posted on March 12, 2021 by Bjorn Fehrm
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By Bjorn Fehrm
March 11, 2021, © Leeham News: Last week, we started analyzing the Airbus A350-1000 and compared it with the Boeing 777-300ER.
We now fly the airplanes on a demanding route, close to their maximum range, the LAX to Hong Kong sector. How much better is the 14 years younger A350-1000?
Posted on March 11, 2021 by Bjorn Fehrm
By the Leeham News Team
March 10, 2021, © Leeham News: Boeing’s recovery will be long, slow and painful.
But Boeing has been through long, slow and painful periods before.
Investors appear optimistic. The stock price has been rising since lows hit immediately after and throughout the pandemic.
The stock price is far off its high of $440 on March 1, 2019. March 1 was after the October 2018 Lion Air 737 MAX accident but nine days before the March 10, 2019, Ethiopian Airlines MAX crash. The price closed yesterday at $231, abut equal to where it was a year ago today.
Posted on March 10, 2021 by Scott Hamilton