What’s the A330NEO got that others don’t?

September 16, 2014 on 8:41 am | In Aircraft Development, Airline Fleets | 1 Comment

Price and that’s about it.

It’s got more than the old A330 in the sense that every vehicle enjoys a new, modern engine.  The A330 is positioned as being a still young aircraft when, in fact, it’s pretty old these days.  The technology that the A330/A340 airplanes got was solidly from the 1980′s and wasn’t that innovative even then.  Remember that it was designed to replace Airbus’ A300/A310 aircraft (partly) and designed to compete against the 767 and DC-10.

Airbus didn’t have its sights on the 777 which was a couple of years behind it in development.  In fact, the 777 was more a response to the A330/A340 and MD-11.

So the point I would make is this:  There is a reason why the 767 isn’t selling anymore.  Same for the 757.

There was also reason why Airbus wanted to sell an A330 Tanker to the US Air Force:  It would keep a production line running for a while.

If the A330NEO was as good as the 787, it wouldn’t be immediately advertised for considerably less money.  And for certain, if that kind of performance was what all airlines were looking for, Airbus wouldn’t have been strong armed into making the A350.  In fact, it’s notable that the original A350 was a lot more an A330NEO than anything else.

The A330NEO is a response to a few airlines who would like to have more A330 airplanes but with a little bit better price.  Delta, for instance, wants some.  A few other airlines will order them as well and if the A330NEO is done right, it might even be profitable for Airbus.

But it’s not a revolution.  It’s barely an evolution.  I strongly suspect it will be a 767-400 for Airbus which means that it will keep some customers happy and in the Airbus camp but let’s put away this talk that 1000 Airbus A330NEOs will be sold.  Only 1100 A330 airplanes have been delivered to date so far.

This is a bridge airplane to keep some people happy for a while so Airbus can figure out what to do with its product line gaps.  Presently, the A350 isn’t a 777 (new or old) and the smallest variant, the A350-800 is highly unattractive to customers because it offers no benefit over the A350-900.  Airbus has nothing new to fill the gap between the A321NEO and the A350-900 and that’s a big gap.

So, for now, the A330NEO will fill that gap.  Sort of.  Kind of.

 

 

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Emirates leaves Airbus with a black eye

June 13, 2014 on 12:51 pm | In Aircraft Development, Airline Fleets | No Comments

Emirates has cancelled its order for (70) Airbus A350 aircraft and that has left Airbus with a black eye.  It’s not a body blow to the program but it is an unhappy moment for Airbus and Airbus’ COO John Leahy whose best spin on the subject was that the 787 has had more cancellations over its program.  (The 787 has also been a program for years longer and has considerably more orders overall.)

The blow comes from the fact that Emirates is a good Airbus customer and it would appear that Emirates is rejecting the premise that the A350 is a solution for high density, long haul carriage.  The underlining of this conclusion would be Emirates’ large order for the 777-X.

The A350 clearly fits a need among airlines but as a product line, I continue to wonder if it hits the right mark.  When Airbus has to consider an A330NEO to slot underneath its A350, that isn’t good.  The A350 was originally supposed to be a kind of A330NEO.

The 787 has its product range in the 787-8, -787-9 and 787-10 and it joins that product range with the new 777-8 and -777-9 which sees Boeing providing a combined product family that spans 5 aircraft and a seat count ranging from 240 (3-class) to about 405 (3-class).  Pilots can transition between the two aircraft family in a single handful of days and that amounts to great flexibility for an airline.

Those 2 families also offer state of the art fuel efficiency and engines.  They are the advanced leap that airlines look for.

Airbus has the A330 (getting old no matter what Airbus thinks) and the A350 which will span a seat count from 270 (3 class) to 350 (3 class) and that’s pretty narrow and leaves a large gap for widebody long haul between 220 seats and 270 seats.  It also leaves a 60 seat gap at the upper end and Airbus’ only other answer is the mammoth A380 which already has at least one customer (Emirates) asking for a NEO.

It’s a black eye and the appropriate action on Airbus’ part is to better consider how it meets airlines needs for long and thin routes as well as long and thick at the upper end but below the A380.  Unfortunately, the A350 is already fixed in specifications and that leaves little maneuvering room.

Which leaves me thinking that the A350 was never well thought out from a strategic point of view.  First, it was going to be an A330NEO, then it was going to be an A350 and then it morphed into the A350XWB aimed at the 777 but without quite the revenue capabilities of a 777.

Hint:  Make sure you make money for your customers.  When the 777 is the darling of the party, give them a 777 or better, not a compromise.

It’s a black eye and one that other customers, particularly those in the Middle East who are voraciously ordering aircraft, will pay attention to.  It doesn’t “end” the A350 but it highlights Airbus’ diminished ability to serve its customers in the twin engine, widebody class.

And we need Airbus to do better than that.  Without Airbus, there really is no Boeing and vice versa.

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Airbus says to make the seats wider

October 28, 2013 on 1:00 am | In Aircraft Development, Airline Fleets, Airline Seating | 1 Comment

Airbus has gone on record saying that there should be a minimum standard for seat width on international flights and that width should be 18″.

Notice that Airbus has no opinion on seat pitch (think legroom) whatsoever.

The reason Airbus wants an 18″ standard is that it downgrades Boeing aircraft without impacting Airbus aircraft.  Airbus tends to build its airplanes a touch wider than Boeing but not wide enough for another seat row.  This means that Airbus is perceived as being a little bit more comfortable.

This comes at a cost, however.  Airbus aircraft is typically heavier and has more drag on a per seat basis than Boeing aircraft which are really designed around a 17″ to 17.5″ seat width.

Boeing can claim a 10 abreast seating configuration for its 777 airplanes whereas Airbus has just a 9 abreast configuration for its A350 aircraft.  If 18″ is the new standard, Airbus will remain 9 abreast but Boeing would have to downgrade its claims to 9 abreast.

The truth is that many airlines do operate the 777 in a 9 abreast configuration today.  Some have gone to a 10 abreast configuration (and are largely despised for it.)

I can’t say that I disagree that an 18″ wide seat is far more appropriate for an international flight.  Hey, let’s go whole hog and ask for 18″ wide seats with a minimum seat pitch of 32″ for an international flight.

It’s all academic anyway because there is zero enforcement authority for this anywhere.

It’s Airbus being an upstart and getting attention again.  Positive attention that cost them not a single penny.

 

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Boeing loses startups

October 24, 2013 on 1:00 am | In Airline Fleets | 1 Comment

It often bothers me that Boeing never seems willing to buy into a start up airline.  Airbus has had to make it its business to go to these startups in hopes that they’ll gain market share incrementally.

But Boeing always seems to want to see a strong balance sheet and a track record before truly making a good deal to an airline.  On the surface, this seems smart but in reality, I think Boeing is slowly ceding sales to more and more airlines as a result.

A leveraged business, particularly in the airline industry, is a very common thing these days.

Most recently, VivaAerobus has been operating a fleet of 737-300 aircraft (20) and it just inked a deal with Airbus to buy A320 aircraft to replace those 737s and to expand with.

How do you let an airline operating your airliner successfully get away like that?

You treat them the way Boeing does.  They’re not big, they’re not the best financed and they’re the upstart in a highly regulated country.  But Airbus has the sale and Boeing doesn’t despite the fact that Boeing should have actually had the performance advantage on this sale.

It’s my belief that Boeing has trended towards being discriminating with its sales to only larger companies in general.  And I believe this will hurt Boeing more and more in the commercial landscape in the years to come.

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Another moment on the JAL Airbus order

October 10, 2013 on 1:00 am | In Aircraft Development, Airline Fleets | No Comments

Richard Aboulafia has written a scathing criticism of Boeing’s loss in his October newsletter which finds that Boeing’s management lost a contest which was entirely Boeing’s to lose and that’s not nothing.

Particularly when it comes from Aboulafia.

Aboulafia criticizes Boeing for much the same things I did just 2 days ago and the only notable part of that is that it is easy to make that criticism at this point.  The evidence has become obvious.

Next up is what will Boeing do to keep ANA in the Boeing fold?  If this were Boeing in even the early 2000′s, I would bet on them finding a way to keep ANA in the 777-X.  A deal would be made and a crisis averted.

I think the fight for ANA business will be epic and I think Airbus’ John Leahy will be smirking at Boeing in a very justified way.  Leahy and his team have spent 3 years taking a par product and a company that is simply executing in an acceptable manner and parlayed that into big wins.

There used to be one thing I would identify as the key to Southwest Airlines’ success.  They did exactly what they said they would do.  They didn’t promise sunshine and roses and the world’s greatest experience onboard their airplanes.  They simply promised to try hard to be nice to you, try hard to get you where you are going on time and to do it at a price that struck most as reasonable.

Southwest made no extraordinary achievements in winning its very loyal customer base.  It performed no superhuman tricks to beat its competitors.  It didn’t even promise a reserved seat and it still won.

That’s what Airbus is doing.  They’re winning with a management that is merely setting reasonable schedules, designing reasonable aircraft and doing it all with no great promise of huge advancement.  They doing what they say they are going to do and the airlines are noticing.

The question is . . . has Boeing noticed that?

 

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Airbus wins JAL order

October 8, 2013 on 12:43 pm | In Aircraft Development, Airline Fleets, Airline News | No Comments

Airbus has managed to land an order from JAL for (18) A350-900s, (13) A350-1000s and another 25 options for the A350.

This from an airline which operates the 787-8 and 777 and which has a decades long relationship with Boeing.  This isn’t a shot across Boeing’s bow.  This is a cannonball going through the hull with water spilling into the engine compartment.

JAL is burned by the 787 and is under the control of entrepreneurs who want operational success more than a good deal from Boeing.  Boeing has had years to take care of JAL as a customer.  Even looking in from the outside, JAL appears to not have been given any more consideration than the average Boeing customer.

And the 787 is a pain in the ass to its operators.  Yes, some operators are being overly dramatic but let’s not ignore the fact that not a single operator is publicly singing the praises of the 787 yet.  Not a one.

If there was such a thing as a safe Boeing customer, it was JAL.  This is the signal moment where everyone realizes that Boeing is not only vulnerable in the marketplace, it’s declining.

Boeing had a chance to kill Airbus with the 787 and lost that chance to a 4 year production delay.  Even if you consider all the old-time Boeing people cautioning that the airplane needed to be birthed in its own time, 4 years is one hell of a long delay for a company that, you know, is supposed to know how to build aircraft.

Boeing had a chance to throw Airbus onto the ropes of the ring by announcing an all new 737 replacement family that would cover from 737-700 to 757-200 seating options.  Instead, Airbus won the hearts and minds of airlines with a warmed over redesign of the A320 aircraft.  Boeing had to respond with an aircraft that doesn’t win many hearts and minds of any airline.

Boeing even had a chance to badly hurt the A350′s sales by announcing a 777 upgrade or replacement and, instead, dithered along until that was a bit late as well.

Boeing chose to build the 747-8i on the idea that Boeing had customers that would buy Boeing no matter what.   They built an aircraft that in the hearts and minds of customers was 40 years old.  That was refreshed some but which really didn’t fit a need.  They followed the idea that Boeing customers will buy Boeing and since the 747-8 is a Boeing product, it will work out OK.  Billions of dollars have been wasted on that aircraft as well as the time and energy of good engineers.  Imagine what would have happened to Airbus if Boeing had focused those resources on a full 737 replacement instead.

Boeing is losing this game.  It’s losing the game to Airbus and it is going to start losing its game to Bombardier.  Warmed over designs and delay in taking the next bold step is killing that company in ways that will be painful to watch.  This is the legacy of McDonnell Douglas and this is exactly how McD lost the game against Boeing and Airbus.  Exactly how it was lost.  There are no real differences here.

Apologize for Boeing if you want but before you do . . . name one strong decision that yielded immediate and positive results for Boeing in the last 8 years.  Just name one.

 

I’ll wait.

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Delta buys Airbus

September 6, 2013 on 1:00 am | In Airline Fleets, Airline News | 4 Comments

Delta Airlines has announced an order for some Airbus aircraft and before anyone signals that this is the end of days moment for Boeing . . . relax.

Delta today is comprised of Delta yesterday and Northwest Airlines of yesterday as well.  Northwest Airlines was a big user of Airbus aircraft.  The organization does have a great deal of experience operating Airbus aircraft now.

Furthermore, no airline of Delta’s size can afford to continue to buy from one single supplier and be responsible to both their company as well as their shareholders.

And who says Airbus builds a bad product?  I sure don’t.  Delta has learned that the A330 works very well for them sitting between their 777-200 and 747-400 aircraft.  Part of this order is a “top up” of the A330-300 type to the tune of 10 additional aircraft.  Delta has (10) Airbus A330-200s and (20) Airbus A330-300s already and an additional (10) A330-300 aircraft sounds, to me, like Airbus is growing some capacity at the top end of their fleet.

The A330-300 is their second largest aircraft seating-wise, believe it or not.

And Delta ordered (30) A321 aircraft as well.  This is an airplane that arguably most US based airlines will be buying as it has been identified as a 757 replacement on certain missions.  Given that just 30 of them have been ordered, I suspect that the A321 offers a better replacement than the 737-900ER  in certain missions likely requiring more density rather than range.

No airline can afford to skip Airbus at this point.  Likewise, no airline should skip Boeing either.  Each manufacturer has viable products that can meet needs.  Aircraft manufacturers can no longer offer delivery positions that make it possible to stay in one product family.  Well, not easily anyway.

 

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New Aircraft May Spell New Competition

June 25, 2013 on 12:27 pm | In Airline Fleets | No Comments

Around the world, airlines are making record setting orders for new narrowbody aircraft.  We airlines in Southeast Asia and Europe being particularly aggressive while here in the United States airlines are far less so (even American Airlines who desperately needed a new fleet.)

In the United States, most of these orders are being made to replace modest portions of fleets that are nearing the outer limits of age.  100 737s for Delta Airlines just means that old aircraft get replaced with new aircraft.  No real change in fleet size.

Now, many US airlines are modestly upgauging their fleets with slightly larger aircraft.  An A319 buyer is going to the A320.  A 737-700 user goes with a 737-800.  This capacity growth amounts to just meeting organic growth in a modest economy such as the United States.

However, in Europe and Southeast Asia, I suspect something else is going 0n.  Some airlines will use some portion of their order to replace their oldest aircraft (Ryanair and easyJet) but I think the vast portion of their orders are going to go towards growth.

In Europe, I think we will see another fare bloodbath before things settle.  This won’t be just between Ryanair and Easyjet either.  Expect all the other low cost European carriers to be involved.  Norwegian, Germanwings, Air Berlin and Monarch all come to mind as airlines that are likely to be affected by a battle.

In Southeast Asia, the competition is already massive with prices already about as low as they should go with airlines planning double digit growth for multiple years.  Someone and something has to give here.  Yes, low cost carriers in this region are revolutionizing travel but they’re also often operating at a loss for marketshare.  Does this sound familiar?

I expect we will see one or more airlines in this region go bankrupt and I have in mind one particular entity:  Lion Air.

Economic growth in Southeast Asia doesn’t occur at all societal levels and that kind of airline growth isn’t sustainable in that region.  Someone will go out of business or will go bankrupt.  Bet on it.

 

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The Paris Air Show Order Games

June 18, 2013 on 12:58 pm | In Airline Fleets | No Comments

The order games have begun at the Paris Air Show and there is one takeaway you should absolutely get from it:

It means absolutely nothing.  For at least this year.

Both Boeing and Airbus will land orders, cry out in joy that they won this customer or that but the status quo will largely be maintained.

Airbus will engage in its silly and, in fact, already has by announcing an order for 20 A380 aircraft by Doric Leasing.  Until proven otherwise, this feels like a silly order by a company who isn’t a “name” in aircraft leasing and who perhaps doesn’t understand just how limited the use of the A380 is for most airlines.  Without a few airlines named as taking up these aircraft, I’m not sure I believe the order.

Boeing has announced its easiest order ever for this year:  GECAS is ordering 10 787-10 aircraft.

Also notable is EasyJet who has ordered 135 A320 aircraft (35 CEO aircraft and 100 NEO aircraft) and it’s notable because I think Boeing might have been able to win this on price.  Yet it appears Boeing wasn’t even trying to contend.

And Boeing has officially launched its 787-10 with United Airlines being the US launch partner with an order for 20 of the aircraft.  Other “launch partners” are British Airways (an order for 10) and Singapore Airlines (an order for 10).

This won’t be a year of shock and awe and I suspect many will be glad for it as the industry has had enough shock and awe over the past few years to last quite a while.

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Who has it? Boeing or Airbus

February 20, 2013 on 10:20 am | In Aircraft Development | 2 Comments

Aviation and airline consultant, Richard Aboulafia, has written about re-thinking his position about Boeing after many years of seeing Boeing as a stronger company.  This is no small thing, in my opinion.

Aboulafia makes several good points about how each company has evolved over the past decade or more.  Airbus has built a stronger and stronger company both on profits but also on making the right business case.  While I think Airbus has gaps in its products, I also think that Airbus has also been the leader in arguments for and against aircraft for the past 15 years.

Boeing has been been reacting to Airbus on many different levels since the mid-1990′s.  The last leadership Boeing has displayed on aircraft is the 777 and, let’s face it, that aircraft had the benefit of being last to market in the contest between Boeing, McDonnell Douglas and Airbus.

Boeing created the 737 Next Generation aircraft line in response to the Airbus A320 series line and while Boeing made a business case for its 737NG, it was based essentially on being a legacy aircraft that was cheaper to operate.  It wasn’t based on being the better aircraft.  There is a reason why Airbus has made so many inroads in the United States over the past 15 years and it isn’t because they have an inferior, more costly product for operation.

Not only did Airbus suck demand away from the Boeing 767 line, it managed to eat away at 777-200 sales as well and did it all with the A330-200/300 series aircraft.   The A330 not only was a better response to the 767, it also was more “right sized” for almost all of the routes being served by 777-200 aircraft.  It offers excellent fuel economy, excellent operating economics and continues to not feel old or dated.  That’s no small achievement in a business where you get to create a new product for a demand maybe every 20 years or so.

While I think the A380 is an ego project with a future that is far more limited than what Airbus / Emirates believes, they’ve got the aircraft flying and doing so very reliably.  They also killed most of the remaining demand for the Boeing 747.  The 747-8i is not going to be more than an ultra-niche aircraft.  It might be a little more in demand than the 747-SP and it might attract cargo companies for a few more years but it very, very clear that the A380 killed the 747 pretty effectively.  If nothing else, Boeing no longer has the massive profit generator that the 747 once was and that’s significant.

What has Boeing done in the last 15 years or so?  It got the 717 and killed it in the hopes that it could sell more of the 737-600.  That didn’t work out so good and it’s notable that the 717 continued to be a very effective money-maker for those who have owned it.

It’s provided winglets and PIPs (performance improvement package) to the 737 series which have kept it in the game against the A320 but only just so.  And when Airbus defined the airlines needs with the A320NEO, Boeing stumbled around for a year and gave us the 737MAX when it could have forced Airbus to abandon the NEO by announcing an all new 737 replacement.

The 767 is sold in tiny quantities still but mostly it was kept around to win the KC-46 tanker program.  Boeing is selling the United States a bargain tanker replacement but one that is based on an airframe that is about 30 years old.  Think about that.  Now think about how long the Air Force kept the KC-135 tankers so far.

The 787 . . . well, this aircraft has plagued Boeing with some pretty bad PR to date.  It’s yielded some good PR, too, but it’s really exposed Boeing for what it has become:  A committee managing an aircraft business on the basis of extracting the last bit of value possible from tired products.   The committee decided it could let everyone else do its job and design its next airplane and that hasn’t worked out so well.

The 747-8i?  Niche aircraft, old design, not attractive to most airlines and compared to the 777-300ER, just not up to the job as much as airlines seem to want.

The 777-200/300 is 20 years old and the Boeing Committee’s plan is to push away doing anything with it for another 7 years.  This despite the fact that airlines have directly and positively responded to a refreshed, stretched design.  Airlines are entirely willing to have a re-winged, stretched airframe with enhanced engines.  Not only willing but nearly clamoring for it.  Boeing’s response?  Yeah, yeah.  When we get to it.

The 787-9 is being built now but too slowly.  The 787-10 hasn’t really been aggressively pursued despite the clear encroachment of the A350 series into this territory.

My point is that Boeing is slowly and methodically ceding strengths to Airbus.  While Airbus may not be the best governed, best run aircraft manufacturer, it is at least making every effort to to execute with excellence.  That excellence is embodied by good engineering, good value and modern technology.

So, yeah, I agree.  Boeing just isn’t the company that it was and should be.  It lacks visionary leadership.  It lacks engineering leadership and it lacks self-honesty at this point.  It can continue as a company for many years to come but it isn’t going to be the Boeing we remember.  It isn’t going to be the Boeing we keep willing it to be.  It’s going to be that company that makes things but which slowly lets its lifeblood ooze out to others.  Or at least that’s where I think it will go if it doesn’t acknowledge the need for improved leadership and more risk taking.

Some would say that Boeing took too much risk with the 787.  I would respond that they farmed out all their big risk to others and looked to cash in with everyone else sharing that burden.  They now have realized a great deal of risk, yes but how much of that could have been avoided altogether if Boeing had just built the damn thing as it had with previous airframes?   And how hard would it be to answer tough questions about a battery and charging system if you had designed the thing yourself?

And how many more times is James McNerney (chairman and CEO of Boeing) going to declare publicly that his company is a great company and his 787 is a great airplane without acknowledging the very real problems that sit on his doorstep?

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Hawaiian Airlines and the A321NEO

January 14, 2013 on 1:00 am | In Airline Service | No Comments

Hawaiian Airlines has made an order for the A321NEO which, I think, causes trouble for Boeing.  It’s a validation of the A321 as a 757 replacement that, I think, Boeing didn’t need showing up given its desire to sell the 737MAX-9.  It is increasingly clear that the new A321 isn’t going to be the dog that the current A321 has been.  Good on Airbus.

Hawaiian is clearly going to make trouble for a couple of airlines with this purchase.  The first is Alaska Airlines.  When Hawaiian takes delivery, it can start to compete with Alaska on the smaller routes such as Bellingham to Hawaii.  Hawaiian succeeds quite well in this area when it goes up against other airlines with its Airbus A330 and Boeing 767 aircraft.  It knows how to attract the right passengers at the right fares.

The other airline that, I think, will be a surprise to some is Southwest.  It’s clear that Southwest has been eyeing the Hawaiian markets for some time and it has even talked about its need to gain ETOPS experience in order to do this.  I think Hawaiian is responding to this threat by bringing its games to the kinds of markets Southwest might be tempted to enter.

And that brings me to a criticism I have for Southwest:  This airline isn’t responding in a very agile way to opening up new markets and opportunities.  By the time it studies and prepares for new flying outside its comfort zone, the opportunity is often gone.  Witness its vaunted codeshare deal with WestJet and Volaris as more evidence.  Southwest could have been flying those Hawaiian routes as soon as this year but the conventional wisdom is that Southwest won’t have itself ready for this challenge until 2015 or about 2 or more years from now.

2 years is an eternity in the airline business.

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United Studies A350-1000 to replace jumbo jets

November 1, 2012 on 1:48 pm | In Airline Fleets | No Comments

United Airlines is in discussions with Airbus about the A350-1000 as a replacement for aging 747 and 777 aircraft in the United fleet.  A significant portion of the United 777 fleet is comprised of very early build 777 aircraft (-200 series) and their 747s are particularly old as well.

United already has 787 aircraft on order (both on the Continental and United airlines sides of the house) as well as the A350-900.  While Continental executives are largely in charge of the airline today, I would suggest that Boeing pay attention.

It would be tempting to say that this is United rattling Boeing’s cage to get going on the 777-X.  I would agree that it has the secondary purpose of that but I also think United wants to know what it can get its hands on fairly quickly to replace a fleet of fuel inefficient aircraft that will begin to cripple profitability in a few years.

We’re not talking about replacing already old aircraft today, we are talking about replacing them in the 2018 to 2022 time period.  By then, these aircraft will be extremely fuel inefficient compared to other US fleets and time is of the essence.

When your capital costs for such an airliner are greater than $200 million for a single aircraft in that class, you want to buy the very most efficient aircraft you can get.  You want the best technologies because 20 years later, that is what you’ll be stuck with.

Whether Boeing thinks the current 777 lineup is still competitive on a spreadsheet, it is ignoring that it isn’t competitive in perception.  I’ll put it simply:

A350-1000:  New, efficient, modern, new

777-300ER:  Older, somewhat efficient, somewhat modern, not new.

Boeing needs the 777-X and it needs it today and airlines are signaling to Boeing that if Boeing doesn’t build it, they’ll buy it from someone else.

Curiously, Boeing already got this message handed to them over the A320NEO.  You would think that they had learned their lesson (again) and would be paying attention to airlines over the jumbo issue.  US Airlines can’t afford to be just loyal to Boeing anymore.  They must buy the best of the best and Airbus is the equal of Boeing in all categories.

If Boeing wants to sell some aircraft, it’s time to get authorization to offer and build a new range of 777 aircraft for its customers.  Customers who’ve plainly said “If you build it, we’ll buy it.  If you don’t, we’ll buy it from someone else.”

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Singapore gets 19

September 10, 2012 on 10:44 am | In Airline Fleets | No Comments

Curiously, I find myself  a bit impressed to learn that Singapore Airlines has received its 19th and final Airbus A380 now.  Singapore Airlines was one of the first airlines to order the A380 and other than Emirates, has the largest fleet of A380s for now.   I’m impressed because it does seem that Airbus has reached a bit of a milestone when it’s filled all existing orders for the A380 to an airline.

By all accounts, Singapore Airlines is very happy with its A380 aircraft and doesn’t miss the 747 whatsoever.  The 747-400 was largely replaced by the A380 and the 777-300ER.

The only other airline with a quantity of A380s similar to that is Emirates and it has 90 A380s on order rather than the 19 that Singapore Airlines has.

QANTAS has taken delivery of 12 A380s and won’t take delivery of 2 more until 2014 and after that the remaining 6 won’t be delivered until 2018.

Lufthansa now has 10 of 17 ordered and will receive the remaining 7 between now and 2015.

It is curious to me that no airline other than Emirates has more than 20 of these aircraft ordered.  Most orders are actually in the single digits or the very low double digits.   The top 5 orders for the A380 are:

  • Emirates:  90 ordered, 23 delivered
  • QANTAS:  20 ordered, 12 delivered
  • Singapore:  19 ordered, 19 delivered
  • Lufthansa:  17 ordered, 10 delivered
  • Air France: 12 ordered, 8 delivered
  • British Airways:  12 ordered, 0 delivered

The bottom 5 orders for the A380 are:

  • China Southern:  5 ordered, 3 delivered (with a small amount of doubt about the remaining 2 to be delivered)
  • Kingfisher:  5 ordered, 0 delivered (and no expectation that this order will ever be fulfilled)
  • Transaero: 4 ordered, 0 delivered
  • Air Austral: 2 ordered,
  • Kingdom Holding Company:  1 ordered

One begins to wonder if the production rate for the A380 isn’t a bit aggressive if it only supports a tiny handful of prime customers and really only one “huge” customer (Emirates).

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Airbus in the US

July 5, 2012 on 11:45 am | In Uncategorized | No Comments

There has been quite  a lot of publicity over Airbus’ decision to build an A320 final assembly plant in Mobile, Alabama, the same location it planned to use for an A330 tanker conversion site.  Pro Boeing people decry the decision as silly and pro Airbus people see it as Airbus gaining on Boeing.

I see it as neither.  Airbus building A320s in the United States isn’t going to help it sell aircraft from the “made in the USA” perspective.  Airlines are businesses and its customers here in the US long since gave up caring whether or not they were on an Airbus or Boeing with aviation fans being the incredibly tiny exception.

It might help a tiny bit in that Airbus may be able to open some production slots for airlines that want aircraft sooner than later.  However, that could just as easily be realized from one or two airlines deferring or cancelling orders over the next year.

It does help Airbus with profits as these aircraft will be dollar denominated aircraft but we’re only talking about an initial production rate of 4 aircraft per month . . . not a lot to realize here.  And should Airbus need to slow production, guess who is likely to be the first to shut down?  Yes, Alabama.  Labor laws in that state will make it far easier for Airbus to shut down a US based plan than one in Europe.  Their plant in China is politically driven and therefore likely to stick around despite the fact that it, at best, operates at a break even point rather than as a profitable enterprise.

Is it treading on Boeing turf?  No, not really.  Boeing needs to focus on its customers and keep its eye on the ball when it comes to delivering aircraft on time.  Reacting to this move by Airbus is just silly.

Does Boeing need to build elsewhere?  Again, no, not really.  They have their production figured out and while it may prove to be smart one day to move some production off-shore, they have a handle on their needs at present and there is no driving need to search elsewhere.  Besides, they have moved their production “off shore”.  They started an assembly line in South Carolina.

I don’t think Airbus has made a mistake but I also don’t see this as giving them any real advantage in the marketplace and only a tiny lift on profits which Airbus could stand to realize.

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China’s threat to Boeing and Airbus

June 13, 2012 on 1:00 am | In Aircraft Development | No Comments

Periodically it’s fun for mainstream media to hype the Chinese threat to Boeing and Airbus in the coming years. Irresponsible people point to the homegrown aircraft the ARJ-21 and the coming Comac C919 as evidence of this.

There are a few problems with this. First, the ARJ-21 really isn’t quite 100% homegrown. It is a regional jet based on tooling that China had from its assembly of the MD-90 aircraft. It’s wing was designed by Antonov and it’s cabin cross section, nose and tail are identifical to the DC-9 series.

Second, this aircraft hasn’t proven all that ready for real use. The wing designed failed stress testing thus limiting flight test envelopes at the direction of the Chinese Civil Aviation Authority. There are some reports that this jet is not particularly light for the mission conceived of for it and it isn’t being designed to be exactly a leap ahead of existing regional jets that not only do the job as well or better but which have far superior support in the world (Embraer E Jets and Bombardier C-700/900/1000).

It’s likely that the ARJ-21 will enter into service and find itself wholly irrelevant.

The same fate is likely for the Comac 919. This is a paper aircraft conceived as a competitor to the Airbus A320 series and Boeing 737 series aircraft. The C919 will use a CFM LeapX engine and is targeted to have a range that is significantly less than current Airbus and Boeing models have much less the new A320NEO and 737MAX aircraft. I already smell trouble here.

Comac is using technologies from avionics companies and engine manufacturers but lacks experience at integration and production that make such an airliner possible on a commercial basis. In many respects, for such an airliner to gain credibility in the marketplace, it almost has to be better than A320NEO and 737MAX offerings and it isn’t. Not on paper and certainly not in real world performance. It’s sub-par in every way.

The belief that a superior price will win over airlines is wrong. That superior price is unlikely to be less than what aircraft manufacturers are already offering airlines making large orders and price is only one component of acquisition. Other things involved are its cost to operate, cost to maintain and support from the manufacturer. The Comac 919 is not going to meet or beat either Airbus or Boeing in these areas.

So why would any airline buy such an aircraft? Because the Chinese government told them to, that’s why. It has orders but they come from Chinese airlines and in exceptionally small quantities.

Until China takes on a project that it can achieve integration and competitive operating economics on, it won’t learn how to build a major airliner. The idea that a chinese competitor arrives in the market place even in 2020 is silly. At this point, one could use a crystal ball and guess. My guess is that it is 2030 or beyond and by that point we’ll see Boeing and Airbus offering hyper-efficient new airliners that raise the stakes even higher. 2030 seems a long way off but it is only 18 years away. Look how long it took Airbus to gain marketplace traction with its product line under what were arguably far superior conditions compared to Comac’s. When you do, even 2030 seems awfully optimistic. It could happen but I, personally, wouldn’t bet money on it.

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Airbus vs Boeing: Widebody Aircraft

May 17, 2012 on 1:00 am | In Airline Fleets | No Comments

We could spend tens of posts evangelizing for one manufacturer over another in the Airbus vs Boeing wars.  I spent some time wondering how it is each overcame the other at various times and decided to chart their respective aircraft on seating, range, speed and engine count.  It’s not hard to see why the 767 got trumped by the A330.  The A330 was the logical growth aircraft.  It had the right seating, range and speed.

Similarly, it’s not hard to see how the 787 is trumping the A330 and 767.  It hits the sweet spot in seating (not too large, not too small) while killing competitors on range and speed.  The same is true between the 777 and the A340 (and I’ve thrown in the MD-11 for comparison).  Again, the 777 trumps its competitors soundly in all three categories.

But most remarkable of all is seeing just how the 777 stacks up in present form against the A350.  Now I understand why Boeing continues to be the preferred aircraft so far.  The A350 competes and even competes reasonably well but it still doesn’t really trump the 777 and in some cases, it doesn’t get close to beating the 777.

See the results below:

Airliner Comparison

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QANTAS defers A380 deliveries

May 10, 2012 on 1:00 am | In Airline Fleets | No Comments

QANTAS is deferring delivery of 2 Airbus A380 aircraft until the 2016 and forward time period in an effort to lower costs in order to compete more successfully with Virgin Australia.

It’s a bit of a blow to the A380 program in some ways and it adds to the pain of cancelled orders from China for the A380 as well.  However, Airbus will be able to deliver the aircraft to other airlines at present.   I suspect that airlines with a substantial A380 fleet are finding the aircraft quite successful on the routes it can be deployed on and I know that Lufthansa regards it as having lower seat mile costs.

However, I continue to believe that there are only so many routes it can be deployed on to earn regular profit.  QANTAS would take delivery of these if there was enough demand as they are replacing aging 747-400 aircraft.  Lower seat mile costs are great but only if you can fill the aircraft regularly all year round.

I’m not sure all airlines are doing a very good job with that and Lufthansa’s choice in having both the 747-8i and A380 kind of speaks to the fact that while seat mile  costs are important in the equation, filling the aircraft is just as important.  A full 747-8i earns more money than an A380 at 85% load factor.

The A380 will continue to sell . . . slowly.  It will continue to be delivered and it will continue to get deployed on various routes but it remains a niche aircraft at best.  That’s OK, so is the 747-8i.  The real profit earners going forward are going to be the 777 series from Boeing and the A350 from Airbus.

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Boeing wants AA to work it out alone

April 26, 2012 on 1:00 am | In Airline News | No Comments

Boeing CEO James McNerney expressed his and Boeing’s viewpoint that they support American Airlines having an opportunity to exit their bankruptcy as a stand alone company.  McNerney acknowledges that US Airways hasn’t bought Boeing in a some time and sees AA as a loyal Boeing customer as well.

Is this support for AA an attempt to preserve the AA orders for Boeing 737MAX aircraft?  At least a little bit, yes.  In addition, Boeing has and continues to support AA’s purchases for aircraft in a variety of ways.  They’re a good customer.  Is that support founded on sheer love for the airline?  I suspect not.

In fact, any worry about the 737MAX is kind of silly.  The merged airline would, upon conclusion, have far more Boeing aircraft and far more resources to service and operate Boeing aircraft than Airbus aircraft.  Furthermore, both airlines have orders for Airbus A320NEO aircraft already.  Airlines of that size can no longer afford to be an exclusive customer of one manufacturer or another.  Their size (and the size of several competitors) demand manufacturing positions that can’t be serviced exclusively by one manufacturer.

I suspect that if Doug Parker is able to re-assure Boeing over its existing AA orders, Boeing will go neutral or even supportive of such a merger.  At the end of the day, it’s about having a customer and earning money.  Furthermore, it even gives Boeing an “in” with the US Airways executive team that it has not had for some time.

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Spot the Problem

April 12, 2012 on 9:22 am | In Trivia | 4 Comments

Would anyone care to guess at the problem with this takeoff?  (Video found on Sulako’s Blog)

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737MAX is getting real

April 11, 2012 on 9:02 pm | In Aircraft Development | No Comments

Boeing has revealed more details on its definition for the 737MAX now and one significant revelation is the decision to add 8 inches to the nose gear.  This was the tough choice engineering wise.

A new pylon and strut for engines will be used in the style of the 787 and the rear tail cone will be extended and the area above the elevator thickened to improve aerodynamics.  Electronic bleed air will be added to improve cabin pressurization (which is much like how the A350 will use bleed air)and better means more efficient fuel burn.

Airbus boxed Boeing into this aircraft by introducing the A320NEO.  I firmly believe that Boeing was leaning towards a new aircraft but also needed time and space to get where it needed to be with that aircraft.  Airbus’ introduction of the NEO made it much more imperative to deliver more efficiency now rather than a decade later.

But with the decision made, I also have to credit Boeing for appearing to have decided to go all in.  They are working very, very hard to bring as much advantage as possible to the single aisle wars with Airbus.

Some perceive that Boeing has been slow to release details and I understand that perception but the truth is that American Airlines’ order last summer forced their hand into a premature announcement.  Had they not had to make that announcement, these new details would seem very much on time.

Most believe that the status quo between the two manufacturers will be maintained.  It is thought that Boeing will have a slight advantage that, according to many, will remain about 2% better than Airbus.

I have a feeling that Boeing might be aiming higher.  I don’t think the decisions they are now announcing about this aircraft reflect a company that is struggling to maintain the status quo in the marketplace.  They appear to be working very hard to make every gain possible against their competitors to bring even more to the table.

Why do I think so?  Because these changes add more risk to their ability to deliver this aircraft in 2017.   If there is one thing Boeing knows, it’s that they cannot afford to damage their credibility with airlines further with a late arrival of the 737MAX.  This is not an all new aircraft with all new materials and airlines will expect it on time or early.

This won’t be revealed a la One Big Announcement John Leahy Style.  Boeing will simply add more and more substantiation to their claims as they continue discussions with airlines.  At the end of the day, most airlines prefer to see results over having a grand announcement.

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