Leeham News and Analysis
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Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
- Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale April 23, 2025
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
Bjorn’s Corner: Air Transport’s route to 2050. Part 19.
By Bjorn Fehrm.
April 25, 2025, ©. Leeham News: We do a Corner series about the state of developments to improve the emission situation for Air Transport. We try to understand why development has been slow.
Over the last Corners, we examined the non-CO2 effects of Air Transport that contribute to global warming. Contrails had the largest effects, even larger than the CO2 emissions from Air Transport.
To complete the review of our progress with lower emission actions for Air Transport, we will examine the present situation with SAF, Sustainable Aviation Fuel.
Figure 1 The main production pathways to SAF. Source: Clean Skies for Tomorrow report. Click to enlarge.
How good is the C929? Part 2.
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By Bjorn Fehrm
April 24, 2025, © Leeham News: We started looking at the future COMAC C929 widebody 10 days ago. The C929 development has gone through a number of challenges, the first being how to structure the cooperation between China’s COMAC and Russia’s United Aircraft, with the latest being what engines to use for the aircraft.
The first problem was solved by COMAC deciding to go it alone, whereas the last problem around engines has no definite solution yet.
Figure 1. The C929, a new COMAC widebody that shall complement the C919. Source: COMAC.
Summary:
- The C929 airframe is taking form with detailed design having started, according to COMAC.
- The engine side is less settled. The likely engine is the Chinese CJ-2000, a 78,000lbf development of the CJ-1000A engine aimed at the C919.
- We apply the CJ-2000’s likely performance to the C929 airframe and use our Aircraft Performance and Cost Model (APCM) to predict the C929’s operational performance.
Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified”
By Karl Sinclair
April 23, 2025, © Leeham News: China represents 10% of Boeing’s commercial airliner backlog,
Boeing first quarter 2025 earnings report.
CFO Brian West clarified on the Boeing 1Q2025 earnings call. About 50 aircraft are scheduled to be delivered to China this year, but all are in limbo due to President Donald Trump’s trade war tariff fight, which began this month.
Previously thought to represent some 2% of the commercial backlog, with another 2%- 3% added for lessors, it was revealed that China represents 10% of the Boeing (BA) backlog. There are 130 Boeing jets identified in the backlog destined for China. With 6,319 Unidentified orders, about 500 are placed by China’s airlines and lessors.
“We have roughly 50 airplanes in our plan this year going into China, so we’re going to be pretty pragmatic with what we do here. For those airplanes that haven’t been built yet, we’ll be looking to maybe redirect those to other customers. For the airplanes that have been built, we call it re-marketing,” said Boeing CEO Kelly Ortberg on the CNBC financial network this morning.
Re-marketing, as Ortberg puts it, can be a costly endeavour.
At the end of FY2024, Boeing still had 50 aircraft in inventory (40 for China) it needed to “re-market.”
The 737 MAX program also incurred abnormal production costs and write-offs of ~$22bn since the grounding.
It was revealed that Boeing also had four 787s in production destined for China.
Holding onto inventory, especially commercial aircraft that need to be maintained, can be an expensive exercise.
Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale
By Karl Sinclair
Boeing first quarter 2025 earnings report.
April 23, 2025, © Leeham News: As aircraft destined for delivery for airlines in China were turned around and returned to the US, the Boeing Company (BA) released 1Q2025 results today. Results were better than expected, with the loss lower than forecast and Free Cash Flow better than analysts forecast.
Revenue in the quarter was $19.5bn, the loss per share before charges was 49 cents and free cash flow, while negative at $2.3bn, was well below analyst projections.
Boeing ended the quarter with $23.7bn in cash and marketable securities, down from $26.3bn on Dec. 31. Debt was $53.6bn, down slightly from the end of last year. Boeing has an untapped $10bn line of credit.
The company said it still expects to return to a new production rate on the 737 MAX line of 38/mo. Production for the 787, how at 5/mo, is forecast to go to 7/mo this year. Both figures are lower than previously targeted (42/mo and 10/mo, respectively).
Yesterday, Boeing announced that it had reached a deal with Thoma Bravo – a software investment firm, to spin-off parts of the company for $10.55bn in cash. The deal includes Jeppesen, ForeFlight, AerData and OzRunways assets, and is expected to close by the end of 2025.
RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs
By Chris Sloan
First quarter 2025 Earnings Report.
April 22, 2025, © Leeham News: The chorus of tariff-dominated earnings season calls continued as RTX took its turns at bat.
President and Chief Executive Christopher Calio aligned with other CEOs to demonstrate that aerospace is in sync with the presidential administration in correcting the trade deficit.
“We really believe that the aerospace and defense industry is really well positioned to meet what the administration’s north star in trade objectives are and that this industry has just been a shining example of that.” Calio cited RTX as a net exporter of goods exceeding imports by $12bn, offering a host of stats to build his case to reduce aerospace-related tariffs. “Our industrial base is largely located in the U S, including about 70% of our employees. On the supply chain side, about 65% of our product spend is with U.S. suppliers. Over the last five years, we’ve invested nearly $10 billion to enhance our domestic manufacturing footprint, with planned capabilities of $2 billion additional planned in 2025.”
Tariffs Tumult Takes Over GE Aerospace Q1 2025 Earnings Call
By Chris Sloan
GE Aerospace First Quarter 2025 earnings report.
April 22, 2025 © Leeham News: GE Aerospace’s above consensus beat for Q1 2025 earnings was overshadowed by the administration’s fluid reciprocal tariffs policy in its first earnings call.
“We support promoting free and fair trade that ensures the continued strength of the U.S. aerospace industry. As the U.S. administration engages in discussions with its trade partners, we’ll continue to advocate for an approach that reestablishes zero-for-zero tariffs in the aviation sector and ensures a level playing field for the U.S. aerospace industry,” said Larry Culp GE Aerospace CEO. “It’s easy to overlook the $75bn trade surplus the sector enjoys largely on the back of this terra-free regime that we’ve had since 1979,” adding that he has been in direct communication with senior people within the administration, including the president.
Boeing reports mixed results of latest employee survey, but middle management and officers remain key obstacles
By Scott Hamilton
Boeing CEO Kelly Ortberg is working to improve the company’s culture. Credit: Boeing.
April 22, 2025, © Leeham News: Boeing released an employee survey last week about safety, culture, and related items. Some areas recorded improvements, while others recorded declines.
But the survey data released did not address a serious problem Boeing has had for more than two decades and continues to have, despite efforts to improve safety, quality and culture: the “deep state” that exists within Boeing at the middle- and lower-officer levels that continue to practice intimidation and retaliation against some who attempt to point out problems in the areas listed above.
In interviews for LNA and my forthcoming book, The Rise and Fall of Boeing and the Way Back, it was clear that Boeing CEO Kelly Ortberg’s initial rounds of housecleaning at the executive and some lower levels haven’t scratched the surface of the root of the company’s problems that have brought this icon to its proverbial knees.
Rise and Fall is essentially a sequel to my first book, Air Wars, The Global Combat Between Airbus and Boeing, published in September 2021. Rise and Fall is in final copy editing, with a target publishing date in September, the fourth anniversary of Air Wars’ publication.
Boeing’s release of its recent survey last week presents a contrast in contradictions.
Hopes for 1Q financial progress turns into bumpy ride for Boeing
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By Karl Sinclair
At its peak, there were 140 Boeing 737 MAXes stored across Washington state destined for China. The number is now around 40, and with the tariff war, there is no telling when these will be delivered. Photo in March 2023 in Moses Lake (WA) by Scott Hamilton.
April 21, 2025, © Leeham News: Just when it looked like The Boeing Company (BA) had a sensible recovery plan and leadership that understood the tasks at hand, along came that pocket of turbulent air, which upset a smooth flight.
Boeing announces its 1Q2025 financial numbers on Wednesday. What had been hoped to be a positive report is now overshadowed by the impact of worldwide tariffs, announced by President Donald Trump on April 2.
The latest industry news, which seems to change daily, is that the Trump Administration has levied a 245% tariff on China, after China had retaliated against tariffs of 145%. Last week, Beijing reportedly told its airlines to refuse delivery of all Boeing products.
In the interim, Trump walked back exorbitant tariff rates applied to nearly 100 nations, calculated with a flawed theory, focusing instead on hitting China hard and retaining a blanket 10% rate on the rest of the world.
There was a further retreat as tariffs on electronics were removed on iPhones and tablets, as pressures in the bond market forced a move.
Nothing in the aviation industry operates in a vacuum, as corporations begin to circle the wagons.
Delta Air Lines will refuse to take any Airbus aircraft that are tariffed, according to CEO Ed Bastian. Ryanair’s CEO Michael O’Leary said the same, regarding Boeing aircraft.
Howmet Aerospace, a Tier 1 supplier, is preparing to use “force majeure,” a legal term referring to an unexpected event which prevents a party from fulfilling contractual obligations, to get out of delivering parts.
According to equity research firm Bernstein, other suppliers are expected to invoke the clause as needed.
This is only 17 days after Trump’s much-heralded “Liberation Day.”
Bjorn’s Corner: Air Transport’s route to 2050. Part 18.
By Bjorn Fehrm
April 18, 2025, ©. Leeham News: We do a Corner series about the state of developments to improve the emission situation for Air Transport. We try to understand why development has been slow.
We examine the non-CO2 effects of Air Transport that contribute to global warming. Over the last weeks, we have looked at contrails, which have the largest impact on global warming, larger than CO2, Figure 1.
NOx is a smaller contributor, but it contributes about 20% of the total to Global Warming.
Figure 1. A summary of the CO2 and non-CO2 Effective Radiative Forcing (ERF) contributions from Air Transport. Source: The report “The contribution of global aviation to anthropogenic climate forcing for 2000-2018” by Lee et al. (2021).
Natilus: Composite BWB, entry-into-service by 2029, 570 on order
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By Karl Sinclair
April 17, 2025, © Leeham News: California-based Natilus is on target to begin delivering its first aircraft for service in 2029, a Blended Wing Body (BWB) turboprop cargo aircraft, according to CEO Aleksey Matyushev.
The pusher-type cargo aircraft Kona will soon be followed by a larger turbofan passenger version, the Horizon, in the early 2030s.
Matyushev, an aeronautical engineer previously the lead aerodynamicist at Piper Aircraft, sat down with LNA to discuss timelines, aircraft production, engineering challenges, and the powerplant options that Natilus will use.
Natilus designed the BWB to fit within current airport gate footprints. Credit: Natilus.