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Heard on the Street: They Don't Build Jets Like They Used to

Anyone who has walked into a used-car dealership knows about the risks of being sold a lemon. When it comes to aircraft, however, it is the newer models that seem more likely to leave owners stranded.

The price tag for a 10-year-old Airbus A320-200—the backbone of the world’s short-haul fleet—has risen 10% since August, according to appraisal data from aviation-analytics firm Ishka. The popularity of trusty clunkers is rising because of issues affecting the newer version of the plane, the A320neo, introduced in 2016.

And it isn't an isolated case: The rival engine to the GTF is also suffering from durability issues. Ever since Boeing botched the development of the 787 Dreamliner in the 2000s, aerospace firms have been battling to rectify defects. As engineering more fuel-efficient jets keeps getting harder, future models may become even less reliable upon introduction.

The implication is that midlife jets may have a permanently higher “residual values,” which is good for lessors like AerCap and Air Lease Corporation, as well as aircraft asset-backed securities.

Excerpt from WSJ
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Airbus to Push Ahead With Production Increases as Boeing Lags

Plane maker reports rise in quarterly profit as it delivers more jets despite supply-chain snags

An increase in orders for narrow-body jets including the A321 helped boost Airbus’s third-quarter income. 
Airbus SE plans to ramp up production over the course of next year, despite persistent supply-chain disruption, as the European plane maker extends its lead over rival Boeing Co. BA 0.34%increase; green up pointing triangle in the crucial market for smaller jets.

The Toulouse, France-based company on Friday confirmed plans to lift production of its A320 aircraft to 65 a month by early 2024 from about 50 a month at the end of this year, one of the fastest increases in the company’s history. The move comes as demand for Airbus’s family of A320 narrow-body aircraft outstrips that for Boeing’s rival 737 MAX but also as both plane makers grapple with continuing supply-chain issues.

Airbus has been gaining market share over Boeing since the grounding of the 737 MAX, with the split between the two most popular narrow-body programs at 61-39 in favor of the A320neo as at the end of September, according to an analysis of both companies’ backlogs by research firm Agency Partners.

The market-share split is a closely watched measure in the aerospace duopoly. As Airbus extends its lead, the company is able to produce more aircraft, enabling it to push for better pricing with suppliers that it can use to either boost profitability or undercut pricing from Boeing.

Excerpt from WSJ
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Boeing’s 737 MAX Output Falls to Lowest Level in Two Years

Deliveries and production of the company’s bestselling jet slowed in September amid snafus at one of its key suppliers

Boeing said it delivered 15 new 737 jets to the world’s airlines in September. Deliveries of Boeing’s 737 MAX jets to customers fell in September to the lowest level in more than two years, laying bare how one of the U.S.’s largest manufacturers is struggling to churn out enough jets to fill the skies.

The company’s operations have been disrupted this year by a series of snafus at one of its key suppliers. The latest problem, discovered in August, is misdrilled holes on the fuselage of its bestselling 737s. As a result, production of the more than $100 million jet—which accounts for the bulk of Boeing’s output— is running at about half the company’s target.

Boeing executives have said that deliveries would slow but that they still expected to meet their targets for the full year. Boeing said earlier this year that it was moving to complete an average of 38 new 737s a month. It made 22 in September, according to data from Aero Analysis Partners/AIR, a research firm.

Excerpt from WSJ
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Airlines, Regulators Weigh More Cockpit Safety Alerts After Close Calls on Runways

Regulators refocus on alerts that are often unused or still under development, as pilots try to avoid close calls

An Airbus system warns pilots with a screen alert that a runway is too short. PHOTO: AIRBUS
Technology to alert pilots of potential runway crashes is widely available. Audible warnings and text alerts to help avert catastrophe on the tarmac are often standard features on new aircraft.

In many cases those features aren’t turned on.

Regulators have been reluctant to require their use. Some pilot groups have pushed for airlines to adopt such features, but carriers have had doubts about their safety benefits and costs.

“There are solutions right now,” Capt. Steve Jangelis, a top union official in the Air Line Pilots Association, said at a runway-safety forum earlier this year.

The U.S. hasn’t had a major fatal passenger airline crash in 14 years, but runway-safety alerts for pilots are getting renewed attention after a spate of serious close calls at American airports. Industry officials have debated whether inexperienced or fatigued pilots are a factor, or distraction among short-staffed air-traffic controllers.

U.S. air-safety and some industry officials are weighing whether to add more cockpit protections as pilot and air-traffic controller workforces navigate a surge in postpandemic flying, while airlines ramp up reminders to pilots about existing procedures.

Excerpt from WSJ
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