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LCCCurrentNewsCommercialAircraft

Sampling of Current LCC Issues/Improvements in the NewsCommercial Airliner Aircraft  –  (Recent News Briefs in AIAA Morning Launch)· Boeing Plans to Cut Up to 8000 jobs from Commercial Aircraft Division· Boeing 737 Accelerated Assembly Automation· Boeing Changing Supplier Terms Amid Cost Cutting Efforts· Low Oil Prices Improving Airline Revenue Outlook· American Airline Tops Profit Estimates, Defers Aircraft Deliveries· Southwest Airline Delays Delivery of Boeing 737-Max Aircraft· Boeing 737-Max & 777X 2018 Status· Bombardier Delivers First C Series Jetliner – Challenge to Boeing & Airbus· Airbus Cuts Production Rate of A380 Super Jumbo Airliners· Airbus $1.5 Billion Loss From A350  & A400M Development IssuesBoeing plans to cut up to 8,000 airplane jobs: sources | Reuterswww.reuters.com/article/us-boeing-redundancies-idUSKCN0WW0AFMar 30, 2016 -BoeingCo plans to cut up to 8000 jobs this year at its commercial … about 1,600 through voluntarylayoffsand 2,400 by leaving open positions…Boeing Rolling Out Accelerated Assembly Automation At 737 Factory.Reuters(6/17) reported that Boeing is debuting the Spar Assembly Line (SAL) at its 737 manufacturing plant in Renlon, Washington, “adding a new robotic system to drill holes in the main beams inside each wing known as spars, industry sources said.” According to the article, the roll out of the new systems bolsters Boeing’s headway into automation “as it prepares to boost output of its best-selling airliner, while also preparing the ground work for future aircraft that will be designed with radical new manufacturing methods in mind.” The aircraft manufacturer “says greater automation will cut the amount of ‘rework’ caused by production glitches, reduce injuries and support sharp increases in output at factories.”Boeing Changes Payment, Inventory Terms With Suppliers Amid Cost Cutting Efforts.Reuters(7/7) reports that Boeing has ramped up its efforts to “conserve cash, cut costs in its supply chain and trim inventory of parts in its factories,” informing suppliers that it will take up to 120 days to pay for its expenses, “rather than 30 days as in the past.” According to sources close to the matter, Boeing is introducing the new payment scheme this year. In addition, the source said that the company is also decreasing its overall factory inventory and is relying on suppliers to store parts and equipment. Confirming the reported changes in a statement to Reuters, Boeing spokeswoman Jessica Kowal said that in order to stay competitive, “we are in the process of adjusting the payment terms of our large suppliers,” adding that “our new payment terms are in line with their payment schedules to their own suppliers.”Low Oil Prices Fueling Airline Revenue Outlook, IATA Says.USA Today(6/2) reports that according to new data released on Thursday by the International Air Transport Association (IATA), carriers worldwide are expected to generate a total of $39.4 billion in profits in 2016, an increase of more than 11% compared to 2015. The article explains that the positive growth outlook is based on steeply lower projected oil prices, with IATA forecasting “an average of $45 per barrel in 2016, compared with $53.90 per barrel in 2015.” In addition, fuel expenses are anticipated to account for only about 20% of the airline sector’s total costs this year, which is down from a recent peak of 33% in 2012 and 2013. IATA CEO Tony Tyler said, “Load factors are at record levels. New value streams are increasing ancillary revenues. And joint ventures and other forms of cooperation are improving efficiency and increasing consumer choice while fostering robust competition.”American Airlines Tops Profit Estimates, Defers Aircraft Deliveries.Reuters(7/22) reported that on Thursday, American Airlines Group posted stronger-than-expected earnings in the second quarter based on declining fuel costs. For the period, the carrier’s net income fell by 44 percent “as provisions for income tax surged to $543 million from $15 million.” Still, the airline’s profit of $1.77 per share topped the average analyst earnings forecast of $1.68. The carrier also “said it would defer taking the delivery of the A350 aircraft from Airbus Group to late 2018 through 2022,” with an average deferral period of 26 months.Bloomberg News(7/22) reports that Agency Partners analyst Sash Tusa said that the deferral is “an indication that airlines are almost certainly going into a cyclical downturn,” adding, “U.S. airlines have been by far the most profitable part of the global airline market, and if U.S. airlines are now starting to defer capacity, that doesn’t send a positive signal across the rest of the industry.”American Airlines Retires 20 MD-80 Aircraft In Single Day Amid Fleet Renewal Effort.Bloomberg News(8/23) reports that American Airlines is stepping up the pace at which it transforms its fleet, announcing that it would retire 20 McDonnell Douglas MD-80-family aircrafton Tuesdayin “one of the largest single-day aircraft retirements in airline history.” In a statement, the world’s largest carrier said, “Summer is the busiest time of the year for airlines, and with summer flying winding down, we can go ahead and park these aircraft.” According to the article, the jetliners being sent to the Roswell International Air Center in New Mexico average 28 years in age, “about five years older than the carrier’s overall MD-80 fleet.” The article adds that the airline plans to retire an additional 45 MD-80s in 2016, “most of them in the third quarter, and be rid of all of them by the end of 2017 as part of a fleet renewal project.”USA Today(8/23) reports that American spokesman Josh Freed told Today in the Sky that the timing of the 20 retirements does “not indicate an acceleration of MD-80 retirements,” adding, “It’s just that we have a long-term MD-80 retirement plan and with the busy summer flying season winding down, today was a good day to take care of these.” According to the article, the pending phase-out of the MD-80, “long the backbone of American’s domestic fleet,” will mark the end of an era for the carrier. The retired aircraft will be replaced by new Boeing 737 and Airbus A320 jetliners as the carrier looks to upgrade its fleet aggressively.Southwest Airlines Delays Delivery Of 67 Boeing Aircraft.Reuters(6/23) reports that Southwest Airlines said on Thursday that it is delaying the delivery of 67 Boeing 737 MAX 8 jetliners by up to six years, postponing $1.9 billion in expenditures. The low-cost carrier “said it postponed the new deliveries to the 2023-25 timeframe to manage its capital spending,” while adding that the revenue climate remains “challenging.” Shares of both Southwest and Boeing slipped following the announcement, “which raised concern among investors about how long planemakers such as the Chicago-based planemaker can sustain demand for new jets, following years of orders that have created a sizeable production backlog.Boeing, GOL Sign Order for 30 737 MAX 10 Airplanes, 15 MAX 8s – Jul …https://boeing.mediaroom.com/2018-07-16-Boeing-GOL-Sign-Order-for-30-737-MA…Jul 16, 2018 -“Increased seat capacity per aircraft not only reduces thecostsof … GOL took delivery of its first737 MAXairplane last month, kicking off a fleet…737 MAX: ONE YEAR OF SERVICE AROUND THE GLOBE | Boeing …https://randy.newairplane.com/2018/05/22/737-max-a-year-of-serving-the-globe/May 22, 2018 -One year ago the737 MAXentered into service. … for the MAX has made it the most cost-saving type of any 737 model and the best fit for flights…Boeing 777X Vs Boeing 747 – Which Plane Is Best? – Simple Flyinghttps://simpleflying.com/the-boeing-777x-vs-the-boeing-747-what-plane-is-best/Nov 7, 2018 -TheBoeing 777xis a twin-engine large-capacity plane, that is fuel efficient, …. Boeing states the total operatingcostis closer to $13,450.00 per…True Cost of Building the Boeing 777X Includes Cheap Laborhttps://www.travelcodex.com/a-component-of-boeings-strategy-for-the-777x-cheap-la…Jan 2, 2019 -Boeingwants incentives from both its home state and its employees for its just announced777Xproject. Due to workers not agreeing to cuts in…Bombardier Delivers First C Series Jetliner To Swiss Air Lines In Challenge To Boeing, Airbus.TheWall Street Journal(6/29, Subscription Publication) reports that Bombardier delivered its first C Series jetliner, the CS100, to Swiss International Air Lines on Wednesday, marking a milestone in the aircraft manufacturer’s bid to become a direct competitor to industry giants Boeing and Airbus in the narrow-body jet market. The article notes that the development of the C Series ran two-and-a-half years beyond schedule and required billions more than the program’s initial $3.4 billion budget, hampering Bombardier’s stock performance and spurring a wide-ranging change in its leadership.Airbus To Cut Production Rate Of A380 Super Jumbos Drastically.TheWall Street Journal(7/12, Subscription Publication) reports that Airbus disclosedon Tuesdaythat it is cutting the production rate of its A380 superjumbo jet from 27 units per year in 2015 to just 12 per year starting in 2018 as airline demand for large-sized double-decker aircraft is dwindling. The article explains that while Airbus launched the aircraft to compete against Boeing in the market for super-sized jets, the A380 proved costly and technically difficult to manufacture, causing significant delays and budget overruns. TheNew York Times(7/13, Subscription Publication) adds that “the A380 has failed to generate interest from more than a dozen airlines.” The Times adds that the heavy, four-engine jet has been “a tough sell with airlines that have become increasingly concerned with fuel economy.” Teal Group Aerospace Analyst Richard L. Aboulafia, who has long been critical of the A380, said, “This has been a one-way trip to death,” adding, “The market doesn’t want a 500-plus seat jet. It doesn’t want four engines. And there are plenty of alternatives that do international routes much better.” While the company scaled back its ambitions, Airbus “said it expected to be able to achieve break-even at a production rate of 20 aircraft next year and would seek additional cost cuts in subsequent years as output slows further.”Bloomberg News(7/12) notes that Airbus CEO Fabrice Brйgier has previously acknowledged that the initial development and launch of the A380 may have been premature, “as air traffic around the world has yet to reach a level of congestion that makes it the obvious choice.”Airbus Posts Earnings Increase In First Half Of 2016, Suffers $1.5 Billion Hit Due To Troop Aircraft, A350 Issues.TheAP(7/27) reports that on Wednesday, Airbus posted earnings of 1.76 billion euros ($1.94 billion) for the first half of 2016, up from 1.52 billion euros a year prior, based on the sale of its ownership stake in Dassault Aviation and the formation of joint venture Airbus Safran Launchers. Additionally, the France-based aircraft manufacturer earned 28.8 billion euros in revenue during the period, “compared with 28.9 billion last year,” as total orders declined despite a bevy of orders announced at the recent Farnborough Air Show.Reuters(7/27) reports that Airbus also disclosed expenses of 1.03 billion euros for its A400M military aircraft, due to gearbox issues and fuselage cracks, and 385 million euros for its A350 jetliner, “whose deliveries have been held up by shortages of seats and, most recently, botched toilet doors.” Despite mounting concerns regarding the A400M, which is designed to provide Europe with “independent heavy-transport capability,” Airbus CEO Tom Enders “said the aircraft could already do the bulk of what it was designed to and that he was confident of finding a ‘reasonable’ deal in talks with buyers over a new schedule.”

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