Aug. 12, 2019, © Leeham News: Boeing CEO Dennis Muilenburg so far is sticking to a previously timeline in which the company expects to turn over to the Federal Aviation Administration next month the software fixes for the 737 MAX.
He continues to hope that this results in the lifting of the FAA’s grounding order and return to service (RTS) in the early fourth quarter.
He also sticks to the long-offered entry-into-service timeline of 2025 (though previously indicated there could be some slippage) if Boeing proceeds with the New Midmarket Aircraft, for which the business case still hasn’t closed.
And finally, he reaffirmed that first flight of the 777X will slip to early next year.
He made the remarks Aug. 7 during an appearance of a Jeffries Co. investors conference.
None of this was news, actually. All had been discussed on the July 27 2Q2019 earnings call. But this all served as a reaffirmation for the MAX information, where things are so fluid that new information sometimes emerges day after day.
While Muilenburg reaffirmed the timeline of software handover and hoped-for RTS for the MAX, an FAA official after the earnings call said the agency is not wedded to the timing outlined by Boeing.
“Early fourth quarter” RTS is a subjective term, but by my definition, this would mean October. November would be mid-fourth quarter and December late fourth quarter.
People I’ve talked to think it will take the FAA 6-8 weeks to flight test and review Boeing’s software fixes. The clock starts ticking when Boeing hands over the software. So, when in September this handover occurs dictates when to start the calendar.
And, as Muilenburg acknowledged, there are no guarantees about the outlined timeline.
Furthermore, the FAA’s action lifting the grounding order may or may not immediately be followed by other regulators.
US carriers said it will take them 45-60 days to return the grounded airplanes to service. Produced but stored MAXes, like the grounded airplanes, have to be “unpickled” and software installed before delivery.
Newly produced MAXes presumably would come off the assembly line with the software installed, ready for immediate delivery. Then it’s just a matter of pilot training before these go into service.
I see a scenario where the newly produced MAXes could be the first ones back in service.
Muilenburg, as throughout the MAX crisis, told the Jeffries conference that NMA is on the back burner while focus is on MAX.
Nevertheless, “We do have a dedicated team on NMA, ongoing discussions, still working on 2025 EIS to protect schedule while work business case. If it makes sense, we’ll go, if not we have other business investments we can make,” he said. He didn’t explain what “other business investments” means.
LNA has been and remains convinced Boeing has to proceed with the NMA for the strategic future of the company.
As for the 777X, Muilenburg essentially repeated what was said on the July 27 earnings call.
Boeing is working through two paths to get the 777X ready for flight: system integration tests and engines. Component durability issues with the engines delayed the first flight until early next year.
Originally, first flight had been expected about April, so early next year suggests a delay of at least nine months. Muilenburg said first delivery is planned for the end of next year. Our market intelligence indicates Boeing told the first customers December is the target delivery date. (I think it won’t be until January.)
How can this be achieved with the long delay in flight testing?
Boeing is using the test airplanes produced to reduce risk by doing all the ground testing it can now.
But Muilenburg acknowledged lots of flight test “schedule pressure.”