Residual Research

What the Strategy and Marketing Organisation Did to the CSeries

Tue, 31 Mar 2026 00:00:00 +0000

This was not a normal market contest. Bombardier got one engine because nobody else believed the CSeries would sell. Airbus then used the same engine family on the A320neo, produced the demand Bombardier could not prove, kept a second engine as fallback, and left Bombardier to fight for the residual supply. The unit that ran that campaign also ran the largest corporate bribery scheme in European history.

In late 2007, Bombardier selected the Pratt & Whitney PW1500G geared turbofan as the sole engine for a clean-sheet narrowbody called the CSeries.¹ CFM and IAE had both declined to bid.² Bombardier did not choose between two credible engine ecosystems. It got the only one the market would give it.

What the Record Rests On: Q1 2026

Fri, 27 Mar 2026 00:00:00 +0000

End-of-quarter synthesis. Q1 2026.

On February 19, Guillaume Faury called 2025 “a landmark year.” Revenue hit €73.4 billion. EBIT Adjusted rose 33% to €7,128 million. The backlog grew to 8,754 aircraft.

Thirty-seven days later, Iranian drones struck four Gulf airports. Three maritime chokepoints closed simultaneously. The aluminium smelter that feeds Airbus’s fuselage supply entered shutdown. Oil hit $119. Jet fuel crack spreads exceeded the levels that preceded the 2005 airline bankruptcies. The 2026 guidance, published nine days before the strikes, assumed “no additional disruptions to global trade or the world economy, air traffic, the supply chain.”

The Backlog as Barrier

Tue, 24 Mar 2026 00:00:00 +0000

Finnair needed narrowbodies by 2027. Airbus had slots in 2032. So Finnair bought Embraers and used Airbuses from the secondary market. Airbus got neither order.

On March 23, 2026, Finnair announced its largest fleet investment in a century: 18 firm Embraer E195-E2s, with options for 16 more and purchase rights on 12 beyond that, for a potential fleet of 46.¹ Separately, the airline issued an RFP for up to 12 used A320 and A321ceo aircraft from the secondary market.² Total investment through 2029: approximately two billion euros.¹ CEO Turkka Kuusisto called it “one of the largest investments in Finnair’s 102-year-old history."¹

The Encryption Layer

Mon, 23 Mar 2026 00:00:00 +0000

The company buying sovereign encryption hardware for the UK’s military satellite network had a subsidiary convicted of fabricating evidence on MOD contracts four years ago.

Airbus announced on March 23, 2026, the acquisition of Ultra Cyber Ltd from Advent International.¹ Ultra Cyber employs approximately 200 people in Maidenhead. It makes NCSC-approved C3 encryption, Multi Link Encryptors for NATO tactical data links, and TEMPEST products for electromagnetic emissions security.¹ The price was not disclosed. Advent acquired Ultra Electronics for £2.6 billion in 2021 as part of its Cobham portfolio and has since divested more than $7 billion in assets.² Based on comparable transactions, the price is likely in the range of €200–400 million.³

The Flap Failure Airbus Calls a Maintenance Issue

Thu, 19 Mar 2026 00:00:00 +0000

A Swiss A340 landed flapless twice in four days. The same pattern has appeared on six airframes, at six airlines, across three EASA airworthiness directives targeting the flap system’s design.

On March 10, 2026, Swiss flight LX283 from Johannesburg approached Zurich with its flaps frozen at position zero. The crew of HB-JMA, an Airbus A340-300, executed a high-speed, high-pitch landing without flap extension or trailing-edge deceleration surfaces, touching down well above normal approach speed on a widebody carrying a full long-haul load.¹

Minor Comfort Issue

Wed, 18 Mar 2026 00:00:00 +0000

The A320 family is one-fifth of the American narrowbody fleet. It generates four-fifths of reported cabin fume events.

Between 2018 and 2023, the FAA’s Service Difficulty Reporting system recorded fume events across the US commercial fleet. The A320 family (A318 through A321) accounted for 20% of registered narrowbody aircraft and 80% of fume event reports. The Boeing 737 family accounted for 27% of the fleet and 3% of reports.¹

The fleet-adjusted ratio is approximately 36 to 1. Reporting culture inflates it. Southwest, an all-737 operator, files SDRs only for confirmed mechanical defects; JetBlue, all-A320, documents aggressively through environmental standards committees.¹ The true engineering-driven differential is lower than 36, but not by enough to matter.

The A321XLR That Airlines Keep Rejecting

Tue, 17 Mar 2026 00:00:00 +0000

JetBlue’s CFO called them “a costly orphan fleet” and sold them. Aegean bought them for India and walked away eight months later. The same two aircraft, rejected twice, on Airbus’s highest-margin programme with zero competition.

I. The chain of custody

JetBlue had thirteen A321XLRs on order, part of a 2019 commitment for transatlantic expansion. In mid-2024, the airline began deferring aircraft deliveries worth roughly $3 billion. By mid-2025, all XLRs had been pushed to 2030 as part of a fleet consolidation to just two families, A220 and A320. CFO Ursula Hurley was direct: “These XLR deliveries would result in a costly orphan fleet of two aircraft for the remainder of the decade."¹

What 8,754 Aircraft Actually Means

Mon, 16 Mar 2026 00:00:00 +0000

Atlas Air ordered 20 A350F freighters today. Twenty aircraft against a backlog of 8,754. What the other 8,734 rest on is the more interesting question.

On February 19, 2026, Airbus reported a record backlog of 8,754 aircraft valued at €619 billion.¹ Guillaume Faury called 2025 “a landmark year."² At the current delivery rate of 793 aircraft per year, the backlog would take eleven years to clear. CAPA’s benchmark for a healthy backlog is five to eight years of production.³ Airbus’s is 1.4 to 2.2 times longer.

What the CEO of Airbus Signed

Sat, 14 Mar 2026 00:00:00 +0000

What the CEO of Airbus declared, and what the record contains.

Guillaume Faury signed declarations to the government of Kuwait stating “none” regarding commissions on a contract worth approximately €1 billion for thirty Caracal military helicopters.¹ In November 2020, an International Chamber of Commerce arbitration tribunal awarded the intermediary on the deal, Farid Abdelnour, €12 million, finding that Airbus had “carried out business as usual."¹ In January 2024, the Kuwaiti parliament found Airbus had engaged in “fraud and deception” on the contract and that €349 million in public funds had been wasted.² In May 2024, the Emir dissolved parliament for up to four years. The investigation was halted.³

What a $2 Million Bribe Did to Five Airlines

Fri, 13 Mar 2026 00:00:00 +0000

What a $2 million bribe did to a $2 billion airline.

On March 12, 2026, Sri Lanka arrested Kapila Chandrasena, the former CEO of SriLankan Airlines, on charges involving a $2 million payment from Airbus SE.¹ That payment secured a $2.3 billion fleet order. The order generated over $117 million in cancellation penalties when the wrong aircraft were unwound. The airline’s accumulated losses now exceed Sri Lanka’s annual health budget by 54%.

The Engine That Frees COMAC

Thu, 12 Mar 2026 00:00:00 +0000

The same engine programme that loosens Airbus’s near-term constraint removes the chokepoint that kept COMAC bottlenecked.

COMAC delivered fifteen C919 narrowbodies in 2025. The target was seventy-five. Beijing’s response, published today in the 15th Five-Year Plan, was to accelerate the CJ-1000A, the domestic engine that eliminates the C919’s dependence on Western suppliers.¹

For Airbus, the implications fork. Near-term, every CJ-1000A that replaces a LEAP-1C frees an engine for CFM’s other customers, including the A320neo. Long-term, a COMAC that no longer needs US export licences is a COMAC whose production ceiling is set by Chinese industrial capacity, not American trade policy. The engine pool that was already binding loosens. The competitor unshackles.

The Oil Shortfall Aviation Cannot Hedge

Mon, 09 Mar 2026 00:00:00 +0000

A companion to Three Chokepoints, Frozen Pots, and More Passengers, Less Profit

Updated March 10 with price data, diplomatic developments, and corrections. the-tianjin-trap.md

G7 finance ministers met this afternoon to discuss a coordinated release from strategic petroleum reserves. The number under discussion was 300 to 400 million barrels. They declined. French Finance Minister Roland Lescure, chairing the session, told reporters: “We are not there yet."¹ Energy ministers will reconvene Tuesday. Brent crude hit $119.50 this morning, while WTI posted the largest weekly gain in the history of the futures contract.³⁴ The price pulled back to approximately $103 after President Macron called the reserves “an envisaged option."² ⁸²

More Passengers, Less Profit

Fri, 06 Mar 2026 00:00:00 +0000

SWISS’s operating margin fell from 13.5% to 9.1% in two years. The same pattern is visible across every major carrier.

A companion to Six Percent and The Margin Trap

SWISS reported FY2025 results today: revenue fell 2.5% to CHF 5.50 billion, adjusted EBIT fell 26.6% to CHF 502 million, and the operating margin compressed from 12.1% to 9.1%.¹

Two years ago, SWISS posted a record CHF 718.5 million EBIT at a 13.5% margin.² The airline has since grown passengers from 16.5 million to 18.1 million, added over 13,000 annual flights, and expanded available seat-kilometres by 12%.¹ ² Every operational metric expanded except profit.

Why Aluminium Smelters Don't Restart

Thu, 05 Mar 2026 00:00:00 +0000

The market prices aluminium as a commodity. The physics prices it as a commitment.

On March 3, QatarEnergy halted production at the Ras Laffan industrial complex after Iranian drone strikes destroyed the gas supply infrastructure.¹ Norsk Hydro’s Qatalum smelter, a 636,000-tonne-per-year aluminium facility and a 50/50 joint venture with QatarEnergy, initiated a controlled shutdown expected to complete by end of March.² Hydro issued force majeure to all customers.

This is the first major Middle Eastern aluminium smelter shutdown in history. The region’s advantage has always been cheap, abundant natural gas for captive power generation. That foundation cracked on February 28.

1,400 Orders, Zero Deliveries: The MAX 10

Wed, 04 Mar 2026 00:00:00 +0000

1,400 firm orders. Zero deliveries. The market has priced in a type certificate that does not exist.

No aircraft in commercial aviation history has accumulated this order book without a type certificate. The Boeing 737 MAX 10 has more than 1,400 firm orders from airlines on five continents and has delivered none of them.¹ The FAA cleared Boeing for Phase 2 flight testing before Christmas 2025, the first forward movement in more than three years.² Two problems remain before the FAA can issue the certificate: a nacelle anti-ice redesign that Boeing completed and the FAA has not accepted, and a set of congressionally mandated safety enhancements the FAA began reviewing on December 12.³ Airlines have committed billions on the assumption both will be resolved. The assumption is unverified.

When Boeing Starts Delivering Again

Tue, 03 Mar 2026 00:00:00 +0000

Shared constraints get worse when the competitor starts executing.

Boeing delivered 46 aircraft in January 2026. Airbus delivered 19.¹ It was the lowest January for Airbus since the pandemic, following a December in which 136 aircraft were contractually delivered, 17.2% of the annual total, and physically ferried to operators throughout January.² The 136-to-19 pair is one event split across a calendar boundary, and January alone overstates the gap.

February was less distorted. Boeing delivered an estimated 52, anchored by 43 737 MAXs. Airbus delivered an estimated 33, led by 23 A320neo-family narrowbodies.³ Through two months: an estimated 98 to 52. Boeing also led net orders in January (103 to 49), its first monthly lead since at least early 2019.⁴

How the Iran War Correlates Every Airbus Risk

Sun, 01 Mar 2026 00:00:00 +0000

The war doesn’t create new risks. It correlates existing ones.

Airbus set its 2026 guidance on February 19: roughly 870 deliveries, €7.5 billion in EBIT Adjusted, €4.5 billion in free cash flow.¹ The guidance assumed “no additional disruptions to global trade or the world economy, air traffic, the supply chain."²

Nine days later, Iranian drones struck Dubai International Airport, Abu Dhabi’s Zayed International, Kuwait International, and Bahrain International.³ Emirates grounded all 260 aircraft,⁴ eight countries closed their airspace, and 868 flights were cancelled on the first day.⁵ Supreme Leader Khamenei was confirmed killed on March 1.⁶³

The Carry-On Rule and the Backlog

Fri, 27 Feb 2026 00:00:00 +0000

What a carry-on baggage rule reveals about a half-trillion-euro order book.

On January 21, 2026, the European Parliament voted 632–15 to mandate a free cabin bag in the base ticket price.¹ An estimated €1.7–2.5 billion in annual ancillary revenue is at risk across Ryanair, easyJet, and Wizz Air.²

One week later, Airbus reported record results: a backlog of 8,754 aircraft valued at €540 billion.³ The question is how much of that backlog is exposed to a regulation that threatens the financial capacity of the carriers behind it.

The 6% of Seats That Generate 30% of Revenue

Thu, 26 Feb 2026 00:00:00 +0000

Premium seats occupy 6% of global capacity but generate 30% of passenger revenue.¹ The entire aerospace supply chain is being restructured around this 6%: increasing per-unit labor, thinning margins, and locking OEMs into irreversible commitments. All of it built on four years of post-pandemic data with no recession precedent.

A companion to Thirty-Three Percent and The Margin Trap

I. The Reconfiguration

The top 10% of U.S. households now account for nearly 50% of all consumer spending.² Airlines are following the money through labor costs and seat economics, not pricing algorithms.

Three Loss-Making Ramps at Once

Thu, 26 Feb 2026 00:00:00 +0000

Three loss-making ramps, one structural paradox.

Part II of III, following The Tianjin Trap

On February 19, 2026, Airbus reported record results, with revenue rising 6% to €73.4 billion and EBIT Adjusted reaching €7,128 million, up 33%.¹

The market saw what the headline obscured. As detailed previously, seventy-seven percent of the group’s EBIT improvement came from Defence & Space normalising from its 2024 loss rather than from commercial aircraft expanding margins.¹ On a reported basis, commercial aircraft EBIT declined 11.3%, from €5,133 million to €4,555 million, even as the company delivered 27 more aircraft.¹

The Fraud Case Boeing Cannot Settle

Tue, 24 Feb 2026 00:00:00 +0000

The Supreme Court declined Boeing’s appeal in a pilot union fraud case. The claims survive, the merits remain untested, and the story underneath is about a single commercial proposition and what happened when it collapsed.

On February 23, 2026, the U.S. Supreme Court denied Boeing’s petition for certiorari in The Boeing Company v. Southwest Airlines Pilots Association.¹ The order made final a 7-2 ruling from the Texas Supreme Court that SWAPA’s fraud and misrepresentation claims against Boeing can proceed to trial.²

The $7 Billion Order With No Delivery Date

Fri, 20 Feb 2026 00:00:00 +0000

How a single engine dispute can vaporize a $7–8 billion order.

On February 13, 2026, United Airlines disclosed in its annual SEC filing that it has effectively removed the Airbus A350-900 from its fleet plans.¹

These forty-five aircraft, first ordered in 2009, converted from A350-900 to A350-1000 in 2013, converted back to A350-900 in 2017, deferred from 2022 to 2027, and then pushed past 2027, are now shown with no expected delivery date at all.¹

Airbus FY2025 Annual Press Conference Transcript

Thu, 19 Feb 2026 00:00:00 +0000

Full transcript of Airbus’s annual press conference, Toulouse, February 19, 2026. Speakers: Guillaume Faury (CEO), Thomas Toepfer (CFO), Guillaume Steuer (Head of External Communications). For our analysis, see Thirty-Three Percent.

Video Voiceover: Humankind is made to explore, to share, to dream. Make the impossible possible. Delivering what’s needed, enriching our everyday lives, taking us home. Airbus makes the connection. We reach further to satisfy our curiosity, looking beyond horizons. We innovate to make a better tomorrow, to improve what is and to build what’s next and to progress. Our world must be safe. When it matters most, Airbus is there. To unite, to connect, to protect. This is our purpose: to Pioneer sustainable Aerospace for a safe and United world. Airbus, made to matter.

Where Airbus's +33% Came From

Thu, 19 Feb 2026 00:00:00 +0000

Airbus reported record EBIT of 7.1 billion. On a reported basis, the commercial aircraft business that generates nearly 72% of revenue earned less than it did a year ago.

Airbus reported full-year 2025 results this morning from Toulouse. Revenue hit 73.4 billion, EBIT Adjusted rose 33% to 7,128 million and the backlog grew to 8,754 aircraft.¹ Guillaume Faury called 2025 “a landmark year”², and yet the The composition of the +33% explains the gap between the headline result and the underlying commercial-aircraft picture.

How Airbus Built Its Competitor's Supply Chain

Wed, 18 Feb 2026 00:00:00 +0000

How Airbus built its competitor’s supply chain, and why the risk doesn’t appear in any annual report

On December 30 and 31, 2025, five Chinese companies ordered 148 Airbus A320-family aircraft in 48 hours.¹ Every one will be assembled at a facility co-owned with the same state enterprise whose subsidiaries build China’s rival narrowbody. The orders were placed by airlines that have simultaneously committed to 300 of that competitor’s jets, in a country whose published industrial policy is to replace Airbus entirely.

How to Read Anything

Tue, 17 Feb 2026 00:00:00 +0000

Ignore the presentation. Find the structure. Check whether the structure supports what is built on top of it.

Most people read conclusions. The conclusion is the least important part of any document.

A study’s conclusion tells you what the authors want you to believe. A regulator’s summary tells you what the agency decided. An earnings transcript tells you what management wants priced in. A news article tells you what the journalist understood, filtered through what the editor approved, shaped by what the audience expects.

Five Claims on Every LEAP Engine

Mon, 16 Feb 2026 00:00:00 +0000

Safran delivered a record 1,802 LEAP engines in 2025. Five different stakeholders claim the same pool. The math does not close.

Safran reported FY 2025 results on February 13. LEAP engine deliveries hit 1,802, up 28% year-over-year, with a 49% acceleration in Q4.¹ Free cash flow reached €3.92 billion. Guidance was raised across the board.

Sell-side notes treated Safran’s results as an input into Airbus’s upcoming guidance.² UBS modeled 900 deliveries as Airbus’s likely 2026 guidance.³ External expectations settled between 880 and 900, with outliers at 1,000.⁴

Leopold Aschenbrenner's $5.5 Billion Portfolio

Fri, 13 Feb 2026 00:00:00 +0000

Inside Situational Awareness LP’s Q4 2025 13F

On February 11, 2026, a fund that didn’t exist two years ago filed a 13F disclosing $5.52 billion in public-market positions.¹

Situational Awareness LP was founded in mid-2024 by Leopold Aschenbrenner, a 24-year-old former member of OpenAI’s superalignment team who was fired in April of that year, and Carl Shulman, previously a researcher at a Thiel-affiliated macro fund.² The team is four people. Their backers include Patrick and John Collison, Nat Friedman, and Daniel Gross, alongside family offices, endowments, and institutional LPs.² Aschenbrenner has reportedly invested nearly all his personal net worth.²

Five Airworthiness Directives in Eight Months

Thu, 12 Feb 2026 00:00:00 +0000

What AirInsight didn’t tell you about Air Canada’s “safe choice”

AirInsight published a piece today calling the A350-1000 “a safe choice of a mature and very capable widebody.” Richard Schuurman’s fleet logic is perfectly competent. The 777-300ER needs replacing. The 777X timeline is blurred. The A350-1000 has the range. On the Air Canada side of the equation, the analysis holds up.

The article does not examine the Airbus side.

Somewhere between the press quotes and the seat-count arithmetic, the filing cabinet stayed closed. The FAA’s, EASA’s, and Airbus’s own financial statements were left unread. Open them and “safe choice of a mature widebody” starts to read differently.

Disclaimer

Mon, 01 Jan 0001 00:00:00 +0000

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Scope

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