Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- How good is the COMAC C919? March 20, 2025
- Boeing CFO Brian West: OK on tariffs for now, backlogs and inventories help March 20, 2025
- Pontifications: Southwest’s core problems are not solved by business model changes-yet March 19, 2025
- Boeing 2024 Proxy Statement: Executive Compensation includes retirement gifts for Calhoun, Deal; housing support for Ortberg, Pope, and other stuff March 17, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 13. March 14, 2025
How good is the COMAC C919?
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By Bjorn Fehrm
March 20, 2025, © Leeham News: The COMAC C919 is finding its first customers outside China, with an order from the Brunei-based GallopAir upstart being first with an order for 30 C919 in September 2023. These aircraft cannot be delivered until the Brunei regulator has approved the C919 Chinese certification, which was issued by the Chinese regulator in September 2022.
Deliveries to Chinese airliners began in December 2022, with 2023 mostly spent on route proving with China Eastern Airlines first delivered aircraft. China Eastern took delivery of a further two C919s during 2023. COMAC delivered 13 C919s in 2024 to China Eastern Airlines (8), Air China (2), and China Southern Airlines (3).
The second Air China C919 was the first C919ER version, featuring a 3,000nm nominal range, whereas the others were the standard 2,200nm version.
With deliveries now at around one aircraft per month and the start of marketing to airlines outside China, it’s time to examine the C919 more closely and compare it to the Airbus A320neo and Boeing 737 MAX.
Figure 1. The first C919 delivered to China Eastern Airlines in December 2022. Source: COMAC.
Summary:
- The C919 has now reached series delivery, with 13 aircraft delivered during 2024.
- The first sales campaigns outside China have started.
- How significant a threat will the C919 pose to Airbus and Boeing?
Boeing CFO Brian West: OK on tariffs for now, backlogs and inventories help
By Karl Sinclair
Brian West, CFO of Boeing.
March 20, 2025, © Leeham News: Boeing (BA) Executive Vice President and Chief Financial Officer (CFO) Brian West, was optimistic about Boeing’s path for recovery and appeared unworried about any near-term impacts of tariffs imposed by President Trump on aluminum and steel during an appearance yesterday at the Bank of America Global Industrials Conference.
West was optimistic that in the short-term, Boeing would face little trouble in dealing with the turmoil caused by the tariff war started by President Trump.
“On the supply side, we don’t see material impact (from the tariffs)”, said West.
According to him, the aluminum that Boeing uses is nearly all domestically sourced and makes up 1% to 2% of the average cost of an aircraft.
As well, 80% of all parts and materials used at BCA and 90% at BDS, are from domestic suppliers.
West also pointed to the large buffer in inventory, purchased pre-tariffs, which mitigates any short-term pain the company may face.
“We think we’ve got that pretty well managed”, West summed up, but concerns still exist.
“We do worry about parts availability, due to the supply chain”, he said.
While Boeing may be protected in the near-term, many suppliers in the chain do not have the financial capability to stockpile inventory and could be sourcing raw materials from tariffed nations.
There was no mention of who would be on the hook, for any price increases, in that regard.
Pontifications: Southwest’s core problems are not solved by business model changes-yet
By Scott Hamilton
March 19, 2025, © Leeham News: I’ve been reading hand-wringing opinion pieces in recent weeks—especially last week—about the changes at Southwest Airlines.
Beginning with its first layoffs in its 50+ years of 1,700 headquarters staff through last week’s announcement of a series of changes that makes Southwest like just about every other US airline, the woeful crying bemoans the fact that Southwest is, essentially, no longer “Southwest.”
Readers of LNA would have seen nearly a year ago a series of article focusing on the underlying core problems at Southwest. Coincidentally, these appeared before Elliott Management Co. announced it had taken an 11% stake in Southwest, demanding changes in management and its business model to boost profits and stock prices. These and related articles are below.
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LNA’s analysis by Judson Rollins hit on just about everything Elliott and recent writers and observers complained about, including the sacred cow: Bags Fly Free. Rollins eviscerated the business sense of this benefit in this analysis. Rollins analyzed Southwest’s revenue challenges—and, more importantly, it’s out-of-control costs.
After Southwest’s epic operational meltdown over Christmas in December 2022, I wrote a review of the airline’s long march to this disaster that was decades in the making. I gave up flying Southwest 20 years before that mess for reasons outlined in my review. My column is of special relevance.
I have no sympathy for how the airline got into its predicament, nor for those hand-wringers today.
Boeing 2024 Proxy Statement: Executive Compensation includes retirement gifts for Calhoun, Deal; housing support for Ortberg, Pope, and other stuff
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By Karl Sinclair
March 17, 2025, © Leeham News: Boeing’s top executives on average earn 81 times more money than the average company employee, the 2024 Proxy Statement reveals.
And in addition to the usual perks that top executives received, the exit packages for former corporate CEO David Calhoun and the CEO of Boeing Commercial Airplanes, Stan Deal, included unidentified retirement gifts. Deal, 61, received outplacement and unspecified transitional compensation.
Boeing filed its annual proxy statement with the Securities and Exchange Commission (SEC) on March 7, announcing the annual meeting of Boeing shareholders to be held via a virtual meeting on April 24.
In the SEC filing, Boeing detailed the compensation paid to executive officers during 2024.
(BCA: Boeing Commercial Aircraft, BDS: Boeing Defense, Space & Security, BGS: Boeing Global Services). Source: Boeing.
In 2024, more than $69m was spent compensating executives, with $55.4m paid in stock awards and options.
Bjorn’s Corner: Air Transport’s route to 2050. Part 13.
By Bjorn Fehrm.
March 14, 2025, ©. Leeham News: We do a Corner series about the state of developments to replace or improve hydrocarbon propulsion concepts for Air Transport. We try to understand why development has been slow.
Last week, we summarized the well-to-use efficiency gain of the Pratt & Whitney HySIITE engine process, which was announced in January. We found that with an expected 35% increase in engine efficiency, the liquid hydrogen chain, from the splitting of water into hydrogen and oxygen through liquefaction to burning it in the engine, used less renewable energy than if we used the same method to make Power to Liquid (PtL) SAF.
Pratt & Whitney was very clear in the presentation that the evolution of a HySIITE engine is a long-term project, with its possible use on the other side of 2040. There are just too many new components (heat exchangers, evaporators, etc.) that need development and maturation to think this is a near-term engine opportunity.
MTU’s similar WET engine concept, Figure 1, uses the same process ideas but with a different target. Here, the focus has been reducing emissions, like NOx and water content in the exhaust, to reduce contrail risk. This shall be achieved when burning jet fuel, SAF, and hydrogen.
Figure 1. An MTU WET engine with its straight core. Source: MTU.
Rolls-Royce’s remarkable turnaround
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By Karl Sinclair
March 13, 2025, © Leeham News: Boeing should take note. In fairly short order, engine OEM Rolls-Royce (RR), under the stewardship of CEO Tufan Erginbilgic, has turned the corner. The company put a very rough stretch of road behind it.
Once described as a “burning platform” by the CEO, it has been turned into a cash-making machine. The company is now planning a £1bn share buyback purchase in 2025.
LNA looks at the factors responsible for this remarkable turnaround and where the corporation is headed.
Related Article:
NASA hit by DOGE layoffs, office closures; Boeing’s X-66A R&D continues for now
By Scott Hamilton
March 11, 2025, © Leeham News: The National Aeronautics and Space Administration (NASA) is the latest federal government agency to come into Elon Musk’s sights for major cost cutting, and a union representing about 1,000 probationary employees is worried about the impact that massive layoffs on the agency might have on aerospace research and development.
Musk is a special representative of President Donald Trump. He heads the Department of Government Efficiency (DOGE), which has wreaked havoc throughout federal government departments, slashing jobs and programs. NASA (which contracts with Musk’s SpaceX and Boeing, a Musk competitor) announced that it is cutting the Office of Technology, Policy, and Strategy, the Office of the Chief Scientist, and the Diversity, Equity, Inclusion, and Accessibility branch in the Office of Diversity and Equal Opportunity.
NASA provides funding and research support to Boeing and other aerospace companies in the commercial aviation, defense, and space sectors. Airbus, Boeing’s prime competitor, has also benefited from NASA research.
Currently, Boeing’s highest-profile projects with NASA are its SLS space booster, the Starliner crew capsule, and the X-66A Transonic Trussed Brace Wing (TTBW) research project for a new commercial airliner.
The SLS and Starliner projects are years behind schedule, billions of dollars over budget and fraught with technical problems. SpaceX competes with both space projects. Boeing previously warned that about 400 employees associated with the SLS could lose their jobs if NASA cancels this program.
Boeing is proceeding with the X-66A research, the company says. Whether NASA continues its funding remains to be seen.
Boeing faces three labor contracts expiring this year
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By Scott Hamilton
March 10, 2025, © Leeham News: Boeing endured a costly 53-day strike last fall by its largest and most powerful union, the IAM 751. The November settlement provided a 43% wage hike, added benefits to its 401(k) retirement program for employees, cash bonuses, and a commitment to assemble the next new airplane in the greater Seattle area.
The strike cost Boeing around $10bn in lost revenue and other costs. Boeing nearly exhausted its entire cash reserve, which had been depleted after years of crises. Only by raising $25bn in the equity and debt markets did Boeing avoid draining its bank accounts.
However, settling the strike doesn’t mean its labor issues are over. Three more contracts expire this year, including one with a different IAM district.
The next contract expiring this year is with a Teamsters local in Puget Sound (Seattle). It expires next month.
Here is the lineup of expiring contracts:
- April 2025: Boeing drivers (Teamsters Local 174) in Puget Sound. They haul wing components from Auburn and Frederickson north to Renton and Everett. A strike there would seriously impact Boeing production.
- July 2025: IAM 837 assembly workers in St. Louis. (Building T-7s, F-15s and F-18s.)
- October 2025: Boeing welders in Puget Sound. Small group — a few hundred — represented by the International Union of Operating Engineers Local 302. There’s a pretty serious shortage of welders both nationwide and regionally, so they have more leverage than their numbers would indicate. Needed more for plant operations than for production.
- January 2026: SPEEA Wichita Technical and Professional Unit. About 1,600 people are now working for Spirit.
- October 2026: SPEEA Northwest Professional Unit and Technical Unit. Two separate but connected bargaining agreements currently cover slightly more than 17,000 workers in Washington, Oregon, California and Utah.
Bjorn’s Corner: Air Transport’s route to 2050. Part 12.
By Bjorn Fehrm
March 7, 2025, ©. Leeham News: We do a Corner series about the state of developments to replace or improve hydrocarbon propulsion concepts for Air Transport. We try to understand why the development has been slow.
Last week, we wrote about Pratt & Whitney’s announcement in January: their trials with critical components of their HySIITE engine, Figure 1, showed that they could increase the efficiency of a hydrogen burn engine by 35%!
It does this by intelligently using the water released when hydrogen oxidizes with the air’s oxygen. The water separated from the exhaust is reheated into steam and entered into the engine’s combustion, reducing NOx by 99.3% and increasing the engine efficiency by 35%.
Figure 1. A HySIITE engine with its backflow core part. Source: Pratt & Whitney.
Melrose sets ambitious profit targets, eyes defense boost
By Leeham News Team
Mar 6, 2025, © Leeham News: Melrose Industries, the parent company of GKN Aerospace, has unveiled ambitious financial targets, setting its sights on approximately £5 billion ($6.4 billion) in revenue and £1.2 billion in adjusted operating profit by 2029 after achieving profit last year at the top end of expectations despite industry-wide supply chain issues.
In its latest, full-year earnings report released Thursday, the company reported a 42% year-over-year increase in adjusted operating profit for 2024, to £540 million.
The UK-based aerospace company’s revenue also saw an 11% boost, reaching £3.47 billion, led by the engines division and its “buoyant aftermarket.”
Speaking to analysts, CEO Peter Dilnot said there was “good momentum for 2025” despite a “difficult time for the industry with supply chain challenges.”
“We will see another step up in profit and margins [this year] and complete our extensive restructuring program,” he added. Read more