Lufthansa in "panic mode"?

Today there is news (only in German as of now) that Lufthansa and Austrian Airlines are "downgrading" miles flown with Turkish Airlines in their frequent flyer program "Miles & More". Customers who fly with Turkish Airlines on will only get a quarter of the flown miles as status miles. Austrian has canceled the code sharing with THY altogether effective summer 2014. Also Lufthansa is thinking about reducing their code sharing with THY.
This looks a little bit like Lufthansa being in panic mode. In the last two years, there have been multiple opportunities for Lufthansa to set up a wide ranging partnership with THY to fend off the three large gulf carriers. But the Lufthansa management seemed to be confident to go their way without it. Now that Turkish Airlines expanded in Germany big way, flying to 14 destinations today and just announced another one (Kassel-Calden) and many customers including business class customers flying to the Far East prefer THY due to prices and service, Lufthansa reacts.
The only way this move makes sense is that LH has another big plan on the table. Last week there I saw there were news that Lufthansa and Emirates are talking to each other ... could there be another alliance a la Emirates/Qantas in the making?

The pending A320 production increase (announcement)...

John Leahy just today stated (not for the first time) that Airbus thinks about an increase in A320 production. I think an increase is out of question. The flydubai order for up to 100 B737MAX-8 could be the last trigger.
flydubai reportedly leaned pro Airbus for some time. But after Boeing decided to bring B737 production up to 47 in 2017 they were able to offer MAX slots in the second half of 2017. And these 60 extra slots per year could now trigger more sale campaign wins for Boeing and the B737MAX versus the A320neo. So Airbus has to react quickly and try to find delivery slots especially in 2017 and 2018.
On the other hand Boeing's increase raises the question how many more B737NG slots have to be filled until mid 2017, as one should guess that there is not a step change once the B737MAX starts delivery and the increase to 47 per month should create some more delivery slots in 2016 and 2017 for the B737NG, which is already short of orders in my calculation.

Dubai Air Show

The Dubai Air Show is approaching and according to the press conference schedule it will start with a busy Sunday. Boeing has occasionally blocked two conference rooms at once, so we can conclude that they expect to have some announcements. But many deals are made perfect in the last minute, so many the bookings could be tentative. Just think of how the story between Qatar and Airbus went two years ago when U-Turn Al accused Airbus of not knowing how to build airplanes just to order some dozens an hour later...

I think it is out of question that the B777X - or the B777-8/-9 how we can call it now - will be the big star of the show. I don't think that the negative vote of the IAM regarding the contract offer from Boeing will have any impact on the orders from Emirates, Etihad, Cathay, Qatar(???) and who else looks for this aircraft. And although there seems to be some discussions about the engine thrust needed (A350-1000 anyone?) I don't think that bothers these airlines to order now. But it could lead to some new discussions between Boeing and Lufthansa (and GE probably) as I guess Lufthansa can very well sort out what impact on seat costs for their typical routes a more powerful (and therefore heavier and thirstier) engine and a heavier aircraft has. It is fair to believe Lufthansa was already offered a very good price, being the first airline to officially order the aircraft. But a further price reduction, based on the cost impact the more powerful engine for, say, 12 years is in the cards.

That will not undermine the business case for the new B777 family, of course. In fact, I wonder if we will see the B777-8/-9 to sell even faster than the B787? With the expected block buster orders from the Gulf carriers to begin with that could very well be...

What else can we expect?

Some orders for the A320neo and the A350 for Etihad maybe. Spicejet is rumored to lean towards the A320neo. Jet Airways is also in the running for the next round of narrowbodies and according to rumors have already ordered the B737MAX as an unidentified customer but wants the A320neo for JetKonnect. flydubai also could order narrowbodies as well as Air Arabia. Monarch Airlines said some weeks ago they are close to make an order, but that does not have to be in sync with the Dubai Air Show.

We could also see some engine decisions regarding the A320neo. There are a few large orders pending. The decisions from American Airlines will probably take a while as they have come out of bankruptcy and to sort out the merger with US Airways first. But there is Lion Air (174 A/C), easyjet (100 A/C), the second batch of Lufthansa (70 A/C), the second 50 A/C from Norwegian, Turkish Airlines (57 A/C) and many others...

There are probably also some engine orders open for the B787 that could be announced.

With the expected orders for the new B777 this Air Show will probably set a new record for orders in terms of value!

A350 overweight?

Airbus quietly unveiled new payload-range data for the three A350 models on it's website.
The A350-900 now seats 315 (was 314), but flies 350nm less: 7,750nm.
The A350-800 now seats 276 (was 270), but flies 250nm less: 8,250nm
The A350-1000 now seats 369 (was 350), but flies 400nm less: 8,000nm

As this comes about 5 months after first flight I guess it has something to do with the initial performance of the aircraft. What it is exactly we cannot know. It could be:

• higher than anticipated SFC of the Trent XWB engines
• higher aircraft weight which now became clear cannot be brought down
• aerodynamic inefficiencies

What strikes my eyes that the one more passenger in the A350-900 (for whom we suggest a generous extra weight of 300lbs including seat etc.) costs more range than the six passengers more in the -800. And the 19 extra passengers cost only 50nm more than the one passenger in the -900. Although the -1000 is structural different than the -800 and the -900 and the engines are different too, this is not really conclusive.

I guess we can expect some argueing duels between John Leahy and Randy Tinseth over these new numbers in Dubai next week. Randy will not miss out to bash the A350 for ranges that are (nominally) again not meeting Emirates range expectations (DXB-LAX) whereas "his" B777-9 will do so (although I would expect Emirates to fly these long routes with a 3 class layout with less than 350 passengers in a A350-1000). And John Leahy will try and find a way to spin something positive around these numbers...

UPDATE: in fact these numbrs are NOT NEW and where already shown in 2011, long before the first flight and probably also the SFC of the certificated Trent XWB became clear.

Boeing B737NG order drain

Last week Boeing announced that production of the B737 will be ramped up from currently 38 copies per month to 42 next year (that was not new) and then 47 per month in 2017, when the B737MAX enters service. Boeing did not elaborate further if only MAX production will be higher from the start or if also the NG will see higher production meanwhile. But we can presume that a step of 5 more aircraft a month cannot be taken at once, so there should be a more or less gradual ramp up from 42 to 47 over a year or even more than that. That means that at least in the last year of full B737NG (before B737MAX enters service), Boeing has to sell even more B737NG's. I wonder how Boeing wants to manage this without substantial price cuts - even more substantial we are seeing today for