The competitive spirit that Airbus engages in, particularly at air shows, always both impresses me and kind of repulses me.  I admire the gusto in which they present themselves and the entreprenurial spirit with which they approach their brand management with.  I dislike the bravado and somewhat cheap order tactics as well.

After this Paris Airshow, a few things occur to me when it comes to Airbus.

First, it is time to stop behaving like a teenager in this rivalry that exists with Boeing.  Despite all the bravado, what we know is that both aircraft manufacturers pretty much compete evenly in the marketplace.  Some years Airbus delivers more aircraft or sells more orders, other years it is Boeing that does so.  The bravado always seems a little distasteful when you consider how Airbus got where it was and, at the same time, I’m glad for Airbus’ presence because it’s clear that it does motivate Boeing to do better.

That said, I also think Airbus is a bit reactive when it comes to competing.  I don’t always sense that they’re defending the right things in the marketplace but, rather, defending their image against all comers.  Reacting isn’t always good.  Take the Bombardier CSeries vs Airbus A319NEO scenario that is unfolding.  Airbus COO John Leahy has actually come out and called for Bombardier to cancel the airplane.  Airbus has pitted its A319NEO against the CS300 as the better aircraft and I’d like to point something out.   It’s a mainliner by any definition and one based on a design that is 20+ years old.   Boeing/McDonnel Douglas pitted the 717 against the Embraer 170/190 and got its hat handed to them. 

Picking your fights is an art.  Some do it well, some don’t.  Boeing has done pretty good until recently although I think the influx of McDonnel Douglas execs hurt them.  McDonnel Douglas execs never could decide when to fight so ended up hardly ever fighting.  Airbus execus fight like bulldogs even when someone just happens to walk nearby. 

Airbus needs to understand that it isn’t going to compete everywhere all of the time.  Fighting off Bombardier and Embraer just expends money on low return investments. 

That said, Airbus also just racked up 700+ firm orders for the A320NEO and, that, my friends, is very healthy competition.  Say what you want (like it doesn’t include any US network carriers or Boeing customers), they put it up there in 6 months and they did it much like Boeing did the 787 orders. 

This is what you politely call a tap on the head for Boeing.

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Last Thursday, there were a number of reports (mostly based on a Bloomberg report) that said that American Airlines was in discussions with Airbus to buy 100 A320 class airliners. 

As you can imagine, this spurred quite a bit of speculation.

Many have the incorrect idea that AA is contractually committed to buying Boeing only.  They are not.  There is a gentleman’s agreement that has been followed since the 1990’s that has had AA getting preferred aircraft pricing and early slots  in return for remaining an all Boeing customer.  There is no financial penalty for walking away from this except what AA might not get in preferred positions and pricing.

And I’m not even sure that exists.  The truth is, AA is big enough to get preferred pricing and early slots regardless.  They wield enough buying power to make any aircraft manufacturer sit up and pay attention.  So it doesn’t hurt for AA to talk to Airbus.

Is the Airbus A320/A321 the right aircraft?  Quite possibly.  The A321 will do a better job of fitting AA’s requirements for a Boeing 757 replacement compared to the equivalent 737-900ER.  It will fit almost all of the missions the 757 is currently serving (except for trans-Atlantic flights) and it will do it with pretty good efficiency compared to what Boeing is offering right now.

Are they serious?  Well, I wouldn’t be surprised if this was both a warning shot over the bow to Boeing as well as a serious discussion.  American Airlines really does need a better fleet going forward and it cannot afford to wait until 2019/2020 to get started.  The 737-800 is a good fit as a MD-80 replacement but not as a 757 replacement.  Boeing’s 737-900ER has worked well for Continental but I don’t think it would work too well for American because of range and payload.

American needs better seat mile costs on its routes and it can achieve those because it can fill its aircraft with business passengers.  Diversifying between manufacturers isn’t a bad idea anyway as it makes things just a bit more competitive and the airlines probably gains from that.

This may well be the “major network carrier” that Airbus COO John Leahy has spoken of with respect to the A320NEO.  If it is and if there is an order, it will be a major blow to Boeing.  Not because Airbus invaded the United States (they’ve already done that) but because AA would be regarded as one of Boeing’s most solid customers.

I wouldn’t say this is a done deal but I would say that we now have reason 998 why Boeing should, you know, get with the program.

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Ryanair has signed a design agreement with COMAC to participate in design discussions on the COMAC 919 airliner.  Ryanair has been searching for a way to either A) bully Boeing into offering more 737-800 aircraft for below profitable prices or B) replace their Boeings with a rock bottom priced aircraft.

Is this the path forward?  I don’t really think so.

This is Ryanair trying to shoot another shot across Boeing’s bow.  The COMAC 919 is highly unlikely to be a competitive airliner even at deep discounts.  It would be a far greater threat if Bombardier had a CSeries aircraft planned that fit Ryanair’s needs.  They don’t, Airbus won’t play the threat game and Boeing has no interest in selling 737-800s so cheaply that airlines can sell them at a profit.

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On the one hand, Airbus COO John Leahy gets to make good on his prediction of 500+ committments to the A320NEO by the Paris Air Show.  He even gets to land a traditional Boeing customer (Garuda International) but at the risk of sounding anti-Airbus and pro-Boeing, there is a bit more to this story in my opinion.

First, Garuda is hardly a critical Boeing network carrier.  It stings a bit for Boeing but . . . when you have a competitive environment, customers change from time to time.  That said, we aren’t hearing about Airbus customers switching to Boeing either. 

Second, Airbus landed committments for 500+ aircraft.  Not firm orders.  Some of these committments are Memorandums of Understanding, some are Letters of Intent and some are orders.  Boeing plays a bit more fair in this area in that it doesn’t “count” something as a committment until it is a firm order. 

Third, when you look at who these committments come from, it isn’t game changing.  They are almost all from existing Airbus customers and from customers in areas where Airbus and France have heavy influence.  There is no radical shift in the landscape.   If you’re an Airbus customer and you need a single aisle airliner, you’re pretty much going to order the NEO.  That’s what has happened so far.

All of that said, Boeing is in danger of becoming a bit too secretive of its plans.  It’s clear that major Boeing customers want to see something on the table.  Moreover, I suspect that they would like to be let in on the discussions about what an airline *wants* in a new single aisle airliner / 737 replacement / 737 re-engine.  If I were a Boeing customer, I would imagine that my attitude towards Boeing at this point would be quite similar to SWA’s CEO Gary Kelly’s.  In a word:  terse.

With the announcement made on the A350-1000 (which would appear to more or less bring that aircraft into competitive range of the 777-300ER but not exceed its capability), it’s time for Boeing to bet again.  They have a firm handle on the 787-9 development and I think they’ll find it within themselves to repeat that on the 787-10.  (Although one does wonder if they’re considering enough range / payload for the 787-10 given that airlines clearly enjoy the performance of late model 777-200ER/LR aircraft. 

Boeing can’t afford to dither around much longer.  It’s time for a decision and enough time has passed to make that decision.  If they’re confident they can make a new airliner that is 20%+ better, make the bet and get going on it.

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Lufthansa had to divert an A340 and an A330 had to divert to Calgary, Canada on the same day last week.  The A340 for a possible indicated hydraulic problem and the A330 because of a possible problem with a backup power supply. 

Still another flight had to divert to Goose Bay, Labrador after a warning of smoke in the cabin last week as well.

Are there problems with Lufthansa’s Airbus aircraft?  No, these things do happen and the more flights you have the more often it happens.  It’s unusual to have three incidents like this in quick succession but not unheard of.

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Am I the only one somewhat caught off guard by the fact that Airbus has now delivered 50 A380 aircraft?

Congratulations Airbus!

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French parliamentarians went a bit crazy and became furious with Air France’s decision to accept bids from both Boeing and Airbus for 100 mid-sized widebody jets.

Boeing’s 787 and Airbus’ A350 are in the running and Air France officials have said that it is likely to be a split purchase.

France continues to own a stake in Air France and is also one of two major stakeholders in Airbus.

I find this ironic since Air France has found it very economical to use Boeing’s 777-200/300 aircraft and owns 60 at present.  The 787 fits nicely into their plans since the transition from a 777 to a 787 is short and easily accomplished.  The transition from an A340/330 aircraft to the A350 is sure to be similarly easy. 

Politics in the airline world inside France is always nationalistic but this move is just a bit too overt for our taste.

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Airbus has committed itself to the A320NEO series recently and Boeing continues to decide to not decide on what it will do with the 737.  All the while hinting at a new aircraft development for a 737 replacement to enter into service around 2019/2020.   Except that Boeing has also hinted from time to time that a re-engine might be in order while also saying that customers don’t want a re-engine. 

In addition, Airbus will be releasing its configuration for the A350-1000 aka 777 killer in the next few weeks.  Boeing doesn’t believe it quite meets the mark without a new wing and Airbus has said nothing about a new wing.  Right now, on paper, the 777-300ER still beats the A350-1000.  Unless Airbus releases a configuration that causes people to pause and gasp, Boeing will most likely not feel too threatened by Airbus for the time being.

And that’s why I say watch Airbus to see what Boeing does.   Boeing knows it can probably win against Airbus with a 737 replacement in the time frame it is talking about while managing to keep customers interested in the current 737 through incremental improvements that should keep the two aircraft competitive.  I’ve felt that Boeing wants to know what Airbus’ move is on the A350-1000 so it knows where to commit its resources.  If the configuration and definition for the A350-1000 moves it into competitive territory with the 777, Boeing knows it needs to get to work on improving the 777 (an exceptional moneymaker for Boeing presently) in order to not lose those customers for the next 2 decades. 

Boeing likely believes it can cover the 777-200ER territory with a 787-10 (and perhaps an incremental improvement to the -10 as an ER model later).  This leaves it free to preserve the 777-300 in its current configuration or find improvements to the existing design or even design a new aircraft family to fit above 787-10 and finish alongside the 747-8i. 

But what Boeing doesn’t want to do is commit to launching 2 new airplane programs simultaneously.  Boeing already knows what will likely happen if it does that.   

With all of that into consideration, I think that once we know the firm definition for the A350-1000, Boeing will know how to sequence its next airplane programs.  It will be either a 737RS first with a 777 replacement kicked off 3 to 4 years later or a 777 replacement first with a 737 re-engine done simulataneously and a 737 replacement coming 10 to 12 years after the re-engine. 

I strongly believe that Boeing wants to do the former sequence (737 replacement / 777 replacement) because it puts Airbus into a corner.  With this strategy, Boeing probably has an all new line of aircraft using the latest technology spanning from 150 seats to 450 seats while Airbus has the A320NEO and A350 series but with a gap between the A320NEO and A350 being filled by what will be quite the aging aircraft:  the A330.   In fact, there already is a gap, although minor, between the A320 series and the A330 series.  And make no mistake:  The A330 will begin to die in another 2 years or so as a result of the A350 and 787 developments. 

My prediction?  I think Airbus will announce nothing that threatens Boeing’s competitiveness in the 777 models.  Sometime late in the fall or early in the winter while riding on an uptick with the deliveries of the 787 and 747-8i to customers, Boeing will announce a 737 replacement program with a big airline order.  Sometime around 2017 or 2018, we’ll see Boeing announce a replacement for the 777 sized  above the 787-10 and right up alongside the 747-8i.

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The US Export-Import bank has announced it will begin backing narrow body aircraft purchases with low cost loans for US domestic airlines. This means domestic airlines purchasing Boeing 737 can now access the same low cost loans that foreign airlines have been getting. Why?

Because the equivalent Canadian institution has decided to do the same for the Bombardier C-Series.

This is good news for airlines, particularly in the United States, because I think we’re going to see a storm of low cost loans made by various governments to support the purchase of new aircraft. No doubt the European governments will do the same to support Airbus. The gloves are off.

I don’t know if this is good for the airline industry, however. Newer, more efficient aircraft in the fleets is good but this kind of loan storm, if it happens, could also have the effect of encouraging airlines to stretch their finances to take advantage of this and airlines do not need to be stretching right now.

In addition, these kinds of loans can distort the aircraft marketplace long term. A buying binge can result in a drought later. I’ll take stability over a flurry of purchases any time. Droughts can stymie aircraft development and I would far rather see a new Boeing narrowbody rather than another 1000 Boeing 737s sold. It’s better for everyone all the way around.

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China has told Airbus directly that there will be potentially severe consequences if Europe goes ahead in requiring China to participate in the Emissions Trading Scheme next January first.   The scheme requires airlines to buy carbon credits to offset pollution created by flights to and from European countries.

China’s response is somewhat loud and even hysterical but it isn’t poorly targeted.   By threatening Airbus directly, they send a very direct message to France and Germany and even the United Kingdom.  All countries who benefit considerably from sales of Airbus aircraft.  Airbus is to France and Germany’s economy as Boeing is to the United States.  And the United Kingdom’s aerospace industries do a healthy business with Airbus as well.

Already Germany and the UK are working to find an alternative to requiring China to participate in this and this is bad business.  Permitting a threat like this to inspire such a reaction puts you in the position to be not treating all trading partners the same and it puts you in a weak position when it comes to your future business in that country.

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By now, most have heard of the successful data capture of the flight data and voice recorders on the Air France A330 that crashed into the Atlantic Ocean in 2009.  What has disappointed me most in this is the near instantaneous (for crash analysis) pronouncement that was leaked to the press stating that there was no obvious airframe fault. 

Disappointing because it is all too common that the press neglects to mention a few things.  First, both Airbus and Air France have manslaughter charges pending against them as a result of this crash.  France’s practice of doing this, in my opinion, severely clouds the issues that need to be settled and puts a highly charged political context to the investigation.  It’s notable that the French government has a huge stake in Airbus and still retains a take in Air France. 

If it is a fault with the aircraft, Airbus will potentially suffer marketplace setbacks and if Airbus experiences that on what is their most successful widebody, the nation of France will feel it too.  It’s a conflict of interest, plain and simple.   It’s easy to see who gets thrown under the bus in this:  the pilots.  If it is pilot error, Air Frances suffers but doesn’t suffer a lot and Airbus is vindicated.  If it is a maintenance problem, France’s flag airline suffers a lot and Airbus suffers a bit as well.  If it is Airbus’ fault with design, France’s shining monument to aerospace suffers a lot and Air France suffers a little bit, too.  Pilot error is the desired judgement in this.

While there have been attempts at politicizing air disasters in the United States, we also have so far maintained mechanisms to avoid that as much as possible.  As a result, there is a great deal of credibility on the part of the NTSB when a ruling is finally made. 

Not so in France who has already managed to spend 10+ years managing its image with respect to the Concorde by making Continental Airlines and a DC-10 the whipping boy in that disaster.  The not so distant crash of an A320 on a test flight in France also managed to taint the pilots as the source of most of the problem as well.   In fact, I would say that if you are a pilot in France and you’re flying for a French airline and/or a French built aircraft, your reputation is quite likely to suffer in the post crash analysis. 

The truth is that pilot error is very frequently a contributing factor in disasters.  People are human and pilots are people and human do make mistakes.  Particularly in a fast moving crisis.  Today’s pilots are almost always not where such things start, however.  Even when we discover pilot error, it almost always starts with poor airline procedures or training. 

I find the reporting that has already occured on this disaster (the Air France A330) in the French media highly suspect and a signal that we’re already finding a reason to not find blame in French industry.  No one should be making any pronouncements about any data within the first 48 hours of analysis.  I would wager that any NTSB investigator would blanche at such an idea. 

This is a huge dissservice to the airline industry and public safety.  Maybe it *is* pilot error and if it is, then we do a disservice by clouding it with acts that appear political.  If it is a fault in the airframe, we need to know about it and we need to most specifically avoid missing that conversation as a function of blaming a pilot.  If it is a fault with the airline and its procedures, the airline needs to fix those procedures and a public discussion on what happened will help other airlines fix their procedures as well. 

Allowing blame to creep into this so early and so loudly only negates the value of a crash analysis.

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Airbus has been in existence in one form or another for roughly 40 years. It’s first aircraft was the A300 which was designed as a large capacity, short haul aircraft. It was well designed for European routes but US airlines regarded it as a bit undersized and too short ranged for their uses. At that time, US airlines were using Douglas DC-10s and Lockheed L-1011s for those needs.

Finally, Airbus got a toehold here in the US with one major US trunk airline. Can you name the airline and the CEO who agreed to give the A300 a try? The answer is after the fold:

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Airbus was the first commercial airliner manufacturer to introduce full authority fly-by-wire into its aircraft.  The A320 was the first with the A330/A340 following it.  Airbus aircraft use a sidestick controller which resembles a computer game joystick to control its aircraft instead of a “yoke”.

Can you name the next commercial airliner manufacturer to introduce fly-by-wire technology?

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One has to hand it to the Airbus PR machine and COO John Leahy.  Those guys could spin a strike as an innovative development for their aircraft line. 

One of  the latest claims from these fine folks is that the A320NEO is already the best selling commercial aircraft ever.   Not so fast.  While the NEO has racked up some good orders, much of what Airbus is counting as orders are actually just memorandums of understanding.   They are not firm orders in the sense of what Boeing would count as an order.  But it does have some good momentum and that’s great for that product.  It’s getting the kind of updates it really needs and that’s good for anyone operating the A320 series aircraft.

Yes, there is rampant speculation that the NEO could have 600 orders by this summer’s airshow in Paris but let’s see if that develops first before we proclaim world domination.

Mr. Leahy also puts forth the idea that because the NEO has the potential to last until 2030, Boeing will ultimately have to decide to do a 737 re-engine itself.  He also has decided that technology won’t be advanced enough for a new aircraft (Boeing or Airbus) until far past 2020, the date Boeing says it could come up with something to replace the 737.

Coming up with a better, more efficient airliner is a matter of engineering, not developing unknown technologies.  If there is a business case that funds the new aircraft development, then the aircraft can be built.  If anything, Airbus’ decision to do the NEO actually advances Boeing’s business case for doing a new development.  Why?  Because Airbus’ adoption of the CFM LEAP 56 and Pratt & Whitney GTF engines will encourage those companies to mature their products faster, not slower.  The faster those engines mature, the more ready they are for a newly developed 737 replacement.

Mr. Leahy thinks Boeing will re-engine.  I think Boeing will do a new development.  In fact, I think as the case for a new development gets stronger, Boeing may well pull in its date that it could be done by to as early as 2018 or just 7 years from now.  I think John Leahy desperately wants Boeing to keep the 737 because it allows the Airbus to remain competitive.  Most independent observers feel the Airbus A320NEO only manages to deliver trip costs that are equal to Boeing’s current 737, not exceed them.   If Boeing can deliver a 20%+ improvement on trip costs with a new family of aircraft in a timely manner, it clobbers Airbus’ product line right out of the door and Boeing won’t promise what it can’t deliver.

There is one thing about Airbus that really annoys me and, in my opinion, causes trouble in the aviation world and that is its bombastic claims.  I get rather tired of tossing cold water at a company that is actually producing a great, competitive product simply because they cannot be content to be a world player in the aviation world and desire to continually proclaim themselves the World’s Greatest Ever.

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Pratty & Whitney has done pretty well this week.  First off, they’ve won the IndiGo order for the Airbus A320NEO and that is a big order over time.   150 aircraft is nothing to sneeze at.  P&W already is in development on this engine for Bombardier (CSeries) and Mitsubishi’s regional jet.  In addition, COMAC has now expressed interest in this engine for its 919 developement. 

At first glance, P&W appears to be getting interest from the little knowns but that’s simply because they’re the ones with new aircraft in development.  The Airbus A320NEO adds legitimacy and the order for IndiGo’s A320NEOs solidifies it.

It does strike me that airline industry appears attracted to the perceived greater promise of the GTF.  When does the GE/Snecma CFM LEAP 56 engine start gaining interest?  It’s noticeably silent in that area so far.

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Southwest Airlines CEO, Gary Kelly, continues to speak loudly at his doubts about Boeing providing a replacement that is 10 or more years down the line in lieu of a re-engine.  At the J.P. Morgan Aviation, Transportation and Defense Conference, Kelly spoke of this dilemma for Southwest and just how unsatisfying it is. 

Southwest wants more fuel effiency sooner than what Boeing is publicly talking about.   Kelly believes that Southwest needs to advance its talks with Boeing on this subject.   Kelly also believes they can manage more than one type of aircraft in their fleet and believes the Boeing 717 will offer many possibilities for Southwest going forward.  Finally, he also believes they can source their next mainline aircraft from several manufacturers, not just Boeing and he includes Airbus and Bombardier (CS Series) in that statement.

There isn’t anything new being said here.  However, its the fact that Kelly has taken to saying it in virtually every public forum that is significant.  Southwest wants Boeing to pay attention and the fact that Kelly continues to speak indicates that Boeing isn’t doing a very good job of listening so far.  Is it hubris, dysfunctionality or a short wait before they hope to wow Southwest?

I actually lean towards hubris in this case.  I believe Boeing thinks that Southwest will wait.  I believe that Southwest is not the same Southwest Airlines that existed in the mid 1990’s and if Boeing expects to keep them as a mainline customer, it’s time for some transparent talks on what these airlines need.

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A local friend made a comment to me about Delta Airlines and their mish-mash of a fleet vs Southwest Airlines and their one aircraft type fleet.  His comment was aimed at the success difference between the two.

Well, not so fast.  When you consider airlines 30 years ago and airlines of today, there is one thing that stands out.  Fleet size.  Today’s airlines such as Airtran and JetBlue would be behemoths in the market place in 1980 with 138 and 163 aircraft respectively. 

Let’s take a look at what truly large airlines have in fleet size.  Southwest Airlines, the 800lbs gorilla of LCC carriers, has 547 aircraft of which all are 737s, yes, but which is actually comprised of the 122 passenger -500 and the 137 passenger -300/-700. 

United Airlines and Delta Airlines both have over 700 aircraft and American Airlines presently has about 620 aircraft.  Each of those three carriers have a broad range of aircraft types, seating capacities and range capabilities.

A one type fleet works well for the smaller airlines because, yes, it does allow them to save money on maintenance and it keeps things simple when negotiating with unions about how much one is paid to fly what type for what distance.

But as you grow larger, it really is better to have some flexibility.  Even Southwest acknowledges that the Boeing 717 aircraft they’ll gain from Airtran (number over 80) should help quite a bit in matching the right aircraft to the right route.  They’ve gone farther than that, though, by ordering the 737-800, a larger aircraft than they’ve ever operated before. 

If Southwest expects to continue to grow, they’ll have to move into both larger and smaller markets than they have customarily entered in the first 40 years of their life.  The fleet types aren’t what will make their lives complex when it comes to the cost(s) of maintaining them.  What they will have to contend with is the idea that a pilot of a smaller aircraft should earn less than the pilot of a larger aircraft.  They’ll have to deal with scheduling flight attendant crews of two different sizes and that’s something they’ve never had to do before.  Fortunately, the range in size between the 717 and the 737-800 is not so great that they can’t argue that all their pilots should be paid the same (and I would agree.)  The truth is, while their fleet may be different, the missions aren’t that different in terms of distance, turnaround, etc. 

Delta is succeeding with a broad range of aircraft in ways not seen before.  Yes, they have added complexity but an airline big enough to operate more than 700 aircraft should be complex.  Could they simplify?  Certainly.  Should they?  I’m not so sure.  There can be disadvantages to dealing with one aircraft manufacturer instead of two in terms of the bulk of a fleet. 

Neither Boeing nor Airbus can really supply enough aircraft to Delta on a timeline that would make sense to replace, for instance, Delta’s 563 single aisle aircraft.   It would take 40 aircraft a year to replace that fleet over nearly 15 years.  Those manufacturers have to supply a number of other airlines as well. 

Boeing and Airbus can deliver about 32 to 38 aircraft a year in their 737/A320 families.  A Delta replacement order would conceivably consume more than one month’s production capacity in a calendar year and there are a whole lot more airlines out there of size than just Delta. 

By using both manufacturers, Delta would get more flexibility in deliveries and more reliability as well.  This is true for any airline of size.  In addition, by making each manufacturer compete for those orders, the airline is liable to receive a better price on each aircraft and when you are talking about 500+ aircraft, that could well mean savings reaching into the hundreds of millions of dollars.

The days of ordering “just Boeing” or “just Airbus” may well be over for any airline of significant size.  This may be true even for Southwest in the distant future.  Boeing and Airbus are unlikely to remain in the 100 to 130 seat category and will probably cede that to the next generation manufacturers such as Embraer and Bombardier.  That doesn’t mean an airline, even an LCC doesn’t need those aircraft, it does. 

It’s notable that JetBlue already has a two fleet strategy as well as Airtran and Frontier.  Southwest effectively has a two fleet strategy and probably needs 3 different sizes to work with going forward. 

Flexibility is the key.  Routes change over time.  Some routes yield more and more passengers while others are best demoted to smaller aircraft over time.   Southwest wouldn’t be flying 737s to places like Lubbock, Texas if it didn’t need a one-stop location to continue that flight to a larger city from the Dallas area.  Southwest flights to Lubbock and El Paso on 737s continue on to other cities such as Las Vegas, Phoenix and Los Angeles. 

But when the Wright Amendment goes away, the need to fly those one-stop flights goes away.  I actually look for Southwest to start evaluating aircraft such as the Embraer E170/190 series or Bombardier C900/1000 or CS Series in the next 5 to 8 years. 

You’ll find that the one fleet strategy is effective today only for airlines requiring a fleet to fly between mainline destinations.  Once they enter into smaller markets and larger markets, two or more types are not only required but justified.

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It has always surprised me that Lufthansa didn’t embrace the 777.  Yes, they’re a German airline and, yes, the German government, who is a stakeholder in Airbus, does want its airlines buying local but they’re not nearly so insistent on it as France might be.  Frankly, the A320 series fits the Lufthansa mission in Europe better, in my opinion.   And the A330 is a good aircraft for Lufthansa as well. 

But I never understood holding on to the A340s and I never understood holding onto the 747-400s.  To me, the 777 family was the solution for these aircraft and a much more fuel efficient one at that.   Now, strangely, Lufthansa is buying some 777s.  They’re buying them as freighters. 

Huh?  Those 747-400s will make fine freighters.  Seriously great freighters.  But I fail to see how a 777-200 Freighter is sensible for Lufthansa when it comes to cargo and the 777-200LR/-300ER isn’t sensible when it comes to its long haul passenger missions.   Lufthansa is in the enviable position of being located such that they don’t really require 4 Engines 4 Long Haul and the 777 would satisfy their needs with respect to every true long haul destination they have. 

With fuel consumption being a prime driver in fleets these days, one would think that the older A340-300s as well as the A340-600s would have been been better replaced by now with the 777.  The only good reason not to is the fact that there just isn’t much of a market for used A340 aircraft and as frugal as this airline is, that does make sense. 

Even their main competitor, Air France, has found the 777 to be the right aircraft for the very same missions.  So it leaves me wondering what their next choice in long haul will be.  The 777 or are they awaiting the A350-1000 definition to make that choice?  It’s notable that neither Air France nor Lufthansa currently hold orders for that aircraft. 

So, is the 777 Freighter an anomaly for Lufthansa or a try-out?

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The Airbus A320 aircraft family is just as popular as the Boeing 737 family and there are a number of huge operators throughout the world.  But the big domain of this aircraft is clearly Europe where several airlines operate big fleets.

Two Questions:

Can you name the largest European operator of this aircraft family and the largest operator of the A320 family in the world?

Find out the answer after the fold:

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The perceived momentum that the A320NEO has is the subject of  a lot of speculation for the past month.  One comment getting repeated early and often by Airbus is that airlines don’t necessarily have a right to convert existing orders for 1st generation A320 class aircraft over to the A320NEO targeted for delivery sometime in 2016. 

Indeed, the orders it has garnered so far has been part of a larger orders for a mix between the 1st generation and NEO versions.   There are a few things worth remembering here.  First of all, 2016 is far enough in the future that airlines are only just approaching the time in which they would consider such purchases in most cases.  Second, Airbus’ really firm order for this aircraft is, so far, only from Virgin America.  Other orders are under a Memorandum of Understanding (MoU) which can remain quite fluid in terms of details.

Airbus needs the NEO to be successful right out of the gate.  Their stumbling around on the A350 is still firm in the minds of many airlines and what they’re proposing in the NEO is actually quite similar in approach to their first proposals for the A350.  If they garner enough orders, legitimacy ensues and they avoid criticism.  They also don’t want to kill their momentum on the A320 either.  The development for that 1st generation of aircraft is paid for and every aircraft they push out the door and into the hands of a customer embodies a lot of profit. 

It’s a delicate dance they have to perform for the next 12 to 18 months and keeping customers entrenched in the 1st generation A320 allows them to earn profit to pay for their other programs in development such as the A400 and A350 as well as keep face over the A380 which, at this point, appears doomed to be an unprofitable airliner. 

Speaking of the A380, one of those recent A320NEO orders includes the cancellation of 10 A380 aircraft as well.  ILFC has decided to pass on that airliner and stock up on A320 aircraft instead.  That is a smart decision for the lessor. 

If anyone believes that airlines will be forced into making new orders if they want the NEO version, they’re kidding themselves.  Airlines transfer orders from one aircraft type to another all of the time and neither Airbus nor Boeing would ever want to appear to not being cooperative with the airlines.  Keeping airlines in their camp is extremely important and not being flexibile is one way to encourage a customer to look at a competitors offerings.

John Leahy of Airbus predicts as many as 500 firm orders by this year’s Paris air show.  It is possible but I think we’ll see maybe orders for 200 to 300 aircraft and perhaps less than firm orders for another 300 by that time.  500 firm orders would be pretty impressive and I suspect it would drive Boeing crazy as well.

Filed under: Airline Fleets, Airline News by ajax
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