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A Commercial Aviation Consultancy

A320 NEO

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

The most brutal area of commercial aerospace is the single aisle market. Competition between Airbus and Boeing is fierce.  So fierce that new entrants rightly fear the news these giants are going to increase production.  The pool may be growing bigger, but it is also getting tougher to enter as the two OEMs swamp the market with aircraft.  Between them, Airbus and Boeing are heading into a situation that sees them delivering over 100 single aisle aircraft every month.

Take a look at the situation from another angle.  Airbus and Boeing are doing very well selling single aisle aircraft.  The chart illustrates the state of play.  Even at ~100 aircraft deliveries per month, with no new orders, the two OEMs have over five years of production in backlog. (Note how much better Airbus is doing in the largest size. )

2014-09-18_9-03-18Now consider this. … Continue reading

The two big OEMs tell us they have a ”natural” replacement for the 757 — the A321neo and 737-9MAX. Unfortunately, neither option appears optimal, as both fall short on range, payload, and runway performance.  Is there a market for a true 757 replacement, and should this be the next airplane developed by Boeing or Airbus?  Let’s take a look at the 757 market, operators and outlook.

The current status of 757 fleet is that 1,049 were delivered, and 986 are still flying. The following table lists the active fleet by the largest 757 operators. A total of 63 aircraft, or 6.4% of the fleet is parked and more than half of those aircraft are currently parked by the largest operators. Continue reading

NOT WITH GAME CHANGING AIRCRAFT AND ENGINE TECHNOLOGY

The introduction of the Bombardier CSeries in 2014 will bring the first application of the next generation of engines for narrow-body aircraft, the Pratt & Whitney PurePower 1000G geared turbofan.  The combination of a new engine and an advanced high technology airframe will generate a very substantial change in the environmental impact of airplanes, the largest we’ve seen since the first generation noisy cigar tube engines were replaced by high bypass engines in the 1980s.  Continue reading

The battle between Airbus and Boeing is especially intense in the single-aisle market, for which more than new 20,000 aircraft are required over the next 20 years.

In the 100-210 seat market, examining the Big Two OEMs only, Airbus currently has roughly a 60% market share of the backlog for the A320ceo/neo. Boeing’s 737NG and 737 MAX has the rest. (China’s COMAC C919, Russia’s Irkut MS-21 and Bombardier’s CSeries, for purposes of this post, are excluded.)

Airbus scored a coup when it announced the long-expected order for more than 200 ceos and neos from LionAir, up to now an exclusive Boeing customer. This follows inroads into former exclusive Boeing customers, notably Norwegian Air Shuttle and American Airlines, each for large numbers. Boeing, to be sure, sold the 737 MAX to each of these carriers, but losing exclusivity is a blow to Boeing prestige.

Boeing scored with a large order for… Continue reading