A Commercial Aviation Consultancy

Airbus

Last year the first Airbus Market Survey in Latin America provided valuable insights on how airline executives in the region perceive market evolutions and fleet requirements.  Airbus has just launched their 2014 Airbus Market Survey in Latin America.

In the 2013 results Airbus discovered that:

  • Intra-regional connections was the top long term network development opportunity
  • The market has a “very optimistic near-term outlook”
  • Criteria for new aircraft is driven by fuel burn, revenue generation ability and fleet rationalization
  • Airlines need to see savings of 15% to transition to same generation and 25% to transition to next generation
  • Best age to replace aircraft is between 8-12 years or a 15-20% cost improvement

With that backdrop, let’s look at this market.  The table shows the regional fleet earlier this year.  Over 77% of the fleet is narrow body (single aisle).  This is why the intra-regional market shows up… Continue reading

Rumors about a Boeing 757 replacement from Airbus have been swirling for months.  Many industry followers have been discussing the Boeing 757 replacement “gap” – because the aircraft OEMs today tout as replacements, the A321neo and 737MAX9, don’t quite meet the bar.

The Boeing 757 is a special aircraft with unique payload/range capabilities.  The way the aircraft is used today is quite different than what was envisaged at EIS.  The capability to operate long thin routes enables it to develop new markets, connecting secondary cities in the US with the same in Europe or South America.

Airbus shared with us that their design concept and it consists of the following key data points:

  • True transatlantic range (100NM more range than 757-200w)
  • Similar seat count to 757 but with true long range comfort. Lie flat bed business class and 18″ wide economy comfort.
  • 25% lower cost per seat… Continue reading

In the business of buying airplanes, an airline will always seek the lowest cost.  Just as they do with every other production input – lowest cost wins every time.   So how is it that with the pending Azul order, “Boeing has not been given the opportunity to present a proposal for single-aisle airplanes“?

On the face of it, this looks like a selection that could not secure the lowest costs for Azul.  How does this make sense? As an Azul shareholder you would want to be certain your company secured the lowest cost option. Let’s go through some data points and thoughts to see if a pattern emerges.

Airbus wins the deal:

  • Creative marketing on the side of Airbus.
    • Driven by the fact the airline already committed to A330 and A350-900s
  • Which offers common flight-deck ratings
  • And, lets say it again, creative marketing. Volume… Continue reading

Data summarizing aircraft orders are in for the first 9 months of 2014, and show interesting results, as shown in the table below.  Unfortunately, Boeing does not break out orders among the three variants of the 737MAX, making it more difficult to compare performance of the largest -9 model with A321 and the smallest -7 model with A319neo, CS300, and E2-195. Nonetheless, Boeing has gained a significant advantage in wide-body orders this year. Continue reading

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