US Airways’ 757 problem

Notation: Lan Chile has canceled Boeing 787 flights through June.

US Airways has a large fleet of aging Boeing 757s it needs to replace. The problem is, a carrier official says, neither the Airbus A321neo nor the Boeing 737-9 MAX can do what needs to be done: Phoenix-Hawaii non-stop in both directions with maximum payload under all conditions.

The distance is 2,910 miles, well within the advertised range of 4,200 miles for the A321neo and 4,137 for the 9 MAX. But Derek Kerr, executive vice president and chief financial officer says fleet planners have yet to be convinced either plane can replace the 757W, which is uniquely able to handle the hot, summer conditions at Phoenix, where temperatures often soar to 110F degrees or more.

US Airways is one of only two legacy airlines in the US that has yet to order the MAX or the NEO (Delta Air Lines is the other). A year ago, US Airways CEO Doug Parker told us that the value proposition of ordering the neo still was unconvincing given the price premium sought by Airbus. Kerr told us last week that the large, outstanding order for the current generation A320 family as replacements for the oldest jets–and the lack of a true replacement for the 757–meant the airline wasn’t in a hurry to place an order for re-engined aircraft.

Boeing wants to outsource more work to Mexico; updated MAX v NEO orders

Boeing outsourcing: In an election where outsourcing is a major political campaign issue, The Seattle Times reports Boeing wants to outsource more work to Mexico. Here is Boeing’s letter, via The Times.

MAX v NEO: Here is an excellent set of tables updating the orders between the 737 MAX and the A320 NEO. According to the analysis, Airbus right now has a 63% market share for the airframe. On the NEO, where two engines are offered, CFM has a 41% share vs PW’s 39% share with the remainder undecided.

Reports from ISTAT

We were at the ISTAT conference Monday and Tuesday, where 1,250 industry officials attended.

We wrote several stories for Commercial Aviation Online. These are below:

Lessors, banks in blistering critique of Airbus NEO

Our colleagues at Commercial Aviation Online put together the story below on lessor and banker reaction to the Airbus A320neo announcement December 1.

We knew–and previously referenced here–reluctance on the part of these groups to the NEO concept, but even we were stunned by the blistering response toward Airbus.

This is reprinted with permission.

Lessor and banks react to Airbus neo programme

Date:	06/12/2010 11:35
Source:	Commercial Aviation Online
Location:	London

The launch of the Airbus neo programme on 1 December with plans for a 2016 entry into service for the initial model has generated a lot of talk in the aviation finance community, particularly concerning the impact on residual values.

CAO spoke to lessors and bankers about the move and here’s what they had to say:

Airbus NEO won’t kill CSeries: New study

Airbus’ A320 NEO won’t kill the Bombardier CSeries, a new study concludes, issued today by AirInsight.

The study, “The Business Case for the Bombardier CSeries,” which we co-authored, is discussed on the AirInsight blog.

The study began as an update to AirInsight’s report in December 2009 on the prospect of re-engining the Airbus A320 and Boeing 737 families. As Airbus COO-Customers John Leahy repeatedly asserted that to re-engine the A320 would kill the business case for the CSeries, AirInsight broadened its update into a full, in-depth study. AirInsight concluded that the business case for the CSeries is sound.