McNerney’s interesting comments on the new airplane

We’re off hiatus, having completed several projects that now gives us some time to pay attention to this column.

It didn’t seem to get much pickup but on the Boeing 1Q earnings call, CEO Jim McNerney said something on the call that really perked up our ears.

First, some necessary context.

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IAM 751 vs Boeing on 787 Line 2

Dashing off a quick note here, since we’re still on hiatus.

IAM 751 successfully achieved a complaint and hearing from the National Labor Relations Board filed a year ago against Boeing, alleging that the October 2009 decision to establish 787 production line 2 in Charleston (SC) was retaliation for the 58-day strike in August-September 2008. Boeing, in October 2009, was clear that it wanted stability and a long-term contract to keep Line 2 in Seattle, but that the union made unacceptable demands in the form of a guarantee of future airplane work in Seattle; and Boeing neutrality in all IAM efforts to organize labor at any Boeing plant nationwide. Boeing wouldn’t agree to either demand.

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The WSJ on Steve Hazy

We’re still on hiatus, but we could not resist this piece of art from the Wall Street Journal illustrating Steven Udvar-Hazy’s return to the public stock market today for his Air Lease Corp.

The Wall Street Journal article is, at the moment, for paid subscribers only but here is an LA Times article that gives some background.

Separately, Aspire Aviation has a good analysis of the COMAC C919 and its competitive threat to Boeing and Airbus.

Boeing shelved 737RE–new airplane appears to be shelved for now, too

It’s stunning news: Boeing may be shelving, at least for now, the prospect of a new airplane widely anticipated to be announced at the Paris Air Show.

Boeing previously shelved the prospective 737RE (Re-Engine).

Buckingham Research, a boutique New York investment bank with a good track record of forecasting Boeing moves, issued a note today in which it said Boeing is rethinking the new airplane. Buckingham writes:

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Boeing’s message changes on 737NG v A320neo

Here’s an article we did on changing messaging at Boeing about the 737 and the A320neo.

Date: 11/04/2011 10:07
Source: Commercial Aviation Online
Location: Seattle
By: Scott Hamilton

Boeing’s messaging on the 737 against the Airbus A320neo has changed subtly in recent weeks. Does this signal a slight shift in Boeing’s intentions whether to proceed with a new airplane in the 737/757 class?

Boeing dismisses the business case for the A320neo, until recently saying the 737-800NG has only a 2-3% cash operating cost deficit today versus the projected NEO economics. By the time the A320neo entered service what was originally announced as Spring 2016, Boeing officials were confident that they could improve the economics of the 737-800 by at least that amount, retaining a fleet advantage of one engine type and a lighter airplane.

But Boeing’s message has shifted slightly.

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Southwest fatigue failure likely to have little effect on 737 values

Here’s an article on values we did for Commercial Aviation Online:

Date: 11/04/2011 08:04
Source: Commercial Aviation Online
Location: Seattle
By: Scott Hamilton

The in-flight fuselage rupture caused by metal fatigue is, in the end, likely to have little affect on Boeing 737 Classic values, predicts Fred Klein, president of Aviation Specialists.

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Odds and Ends: Entertaining recap on Leahy and NEO

1. Entertaining look at Leahy and A320neo

Max Kingsley-Jones, editor of Airline Business, has this amusing take on Airbus COO John Leahy and Leahy’s view of his latest toy, the A320neo.

Last week we received a couple of inquiries and comments about the investment Airbus has made in the NEO and whether this will be worth it. Figures publicly issued by Airbus were that the investment in NEO is about $1.5bn.

What is not discussed but which is widely known within insider circles is that the engine makers, Pratt & Whitney and CFM, are footing most of the bill. We don’t know the split between the engine OEMs and Airbus, but we understand the engine share is not insignificant. Thus, the actual financial risk to Airbus is, by R&D standards, pretty small. We remarked to one who inquired that NEO will probably have one of the best ROIs for Airbus of any program.

Aviation Week’s Robert Wall has this story about the NEO, emerging from the Airbus 320neo briefing last week.

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Reports from the Airbus neo event

Our partner at AirInsight, Addison Schonland, has posted additional reports from his attendance to the Airbus neo event April 5.

Tom Williams, EVP briefing.

John Leahy’s briefing. This is different than the one-on-one interview Addison had.

Keeping the A320 in production to 2030 decade.