“I’m sure glad 2020 is in the rear view mirror.”–David Calhoun, Boeing CEO

By Scott Hamilton

David Calhoun, Boeing CEO. Source: CNBC.

Jan. 27, 2021, © Leeham News: “I’m sure glad 2020 is in the rear view mirror.”

This was Boeing CEO David Calhoun’s opening statement in his appearance today on CNBC’s Squawk Box.

Calhoun appeared on the financial news network following the release of its 2020 full year financial results.

“The one big charge was for the 777X program,” Calhoun said. Boeing took a forward pre-tax charge of $6.5bn for the program. Carter Copeland of Melius Research noted in a video this morning that this probably was related to an adjustment in the accounting block. Calhoun said on CNBC that Boeing adjusted the accounting block, which has not been publicly announced, as part of the charge.

“Based on everything we learned in the 737 MAX recertification effort, we put more time into the 777X effort. It’s going to be a little more costly and take more time to certify,” he said.

Calhoun expects the 777X will be a big money maker in the future.

Widebody recovery

He said Boeing hasn’t extended its forecast that the widebody travel will recover by 2023. The COVID pandemic hit international travel especially hard. Just this month, Germany, Israel, Holland, the US and the UK initiated additional international travel restrictions. Some countries banned it entirely.

With the 737 MAX now returning to service, Calhoun is optimistic about its future.

“Nobody is reticent to fly the MAX,” Calhoun said, without providing evidence.

“We’ve been progressing quite well” with recertifying the MAX in China, he said. Important trade issues must be resolved, he said.

Calhoun said Boeing has sufficient liquidity for 2021. “So far, so good. I think we are beginning to feel better than we did.” The 87 will begin delivering this year, adding to liquidity.

Here is the initial take on Boeing’s earnings by some Wall Street analysts.

Credit Suisse

This was a messy quarter for Boeing as the company appears to have decided to get all the bad news out in 2020, including the long awaited 777X reach-forward loss. There certainly does not appear to be any “good” news, though to the extent an investor wanted to paint a rosier picture they might say it was the kitchen-sink quarter the stock needed, helping to setup a cleaner story of more consistent improvement from here. While perhaps true from a narrative standpoint, there does not appear to be much here that can support upward estimate revisions or a true renewal of investor confidence that would warrant a higher multiple.

Goldman Sachs

While end-market conditions remain challenged and cash generation remains pressured, currently, there are increasing signs of stabilization in both the aerospace end-market and BA financials. Boeing held production rates steady, MAX deliveries are ramping up and the aircraft just this morning received EASA recertification. Free cash flow usage improved sequentially. 787 deliveries do not appear to have resumed yet and the 777X has been pushed out, but neither of these are likely to have a material impact on mid-cycle / normalized free cash flow generation potential.

JP Morgan

We do not believe investors saw the Q4 earnings report as an “all clear” for Boeing – despite the restart of MAX deliveries – and the release reinforces that, highlighting 777X as another challenge for the company with a $6.5b forward loss charge.

Boeing had ~$11bn of inventory on the balance sheet for the 777X as of 3Q20, and we will seek to better understand what this means for the program. With a low-single-digit margin on 787 and a future charge possible, this charge highlights the degree to which the 737 MAX will be almost the sole contributor to GAAP EBIT at BCA.

Melius research

We expected ugly and we got it.

The Triple 7X charge is more about future accounting.

 

186 Comments on ““I’m sure glad 2020 is in the rear view mirror.”–David Calhoun, Boeing CEO

  1. ““We’ve been progressing quite well” with recertifying the MAX in China, he said. Important trade issues must be resolved, he said. ”

    Hot air / wishful thinking / understatement generators are on overdrive, it seems.

    • He’s saying the obstacles are mainly political, which is accurate. The rest of the world will have certified the MAX on a technical basis. So that hurdle is cleared. China will be lagging behind.

      China has said the ET302 final report must be released before they will certify. When that occurs, they may or may not make a statement on further conditions. But in the meantime, Boeing has worked to remove the technical obstacles.

      • @ Pedro, https://www.theatlantic.com/notes/2019/03/jump-seat-pilot-and-boeing-737-max/585301/

        Excerpt from article, “”The Bloomberg story says:
        As the Lion Air crew fought to control their diving Boeing Co. 737 Max 8, they got help from an unexpected source: an off-duty pilot who happened to be riding in the cockpit.

        That extra pilot, who was seated in the cockpit jumpseat, correctly diagnosed the problem and told the crew how to disable a malfunctioning flight-control system and save the plane, according to two people familiar with Indonesia’s investigation.
        If true, this detail would shed light on what I suggested earlier was the crucial question about the fatal Lion Air flight: whether its pilots did not know how to override or offset a failing system, or whether they knew what to do but could not achieve it, because the command systems failed to respond or stop the descent.””

        • The third pilot in the JT043 jump seat correctly remembered the memory recall checklist for runaway trim. If the problem recurs after correction with electric trim, turn off the stabilizer power switches. He so reminded the pilots, and they did.

        • Thanks @Steve.

          From Bloomberg:
          -> “After the Lion Air crash, two U.S. pilots’ unions said the potential risks of the system, known as the Maneuvering Characteristics Augmentation System, or MCAS, hadn’t been sufficiently spelled out in their manuals or training. None of the documentation for the Max aircraft included an explanation, the union leaders said.

          “We don’t like that we weren’t notified,’’ Jon Weaks, president of the Southwest Airlines Pilots Association, said in November. “It makes us question, ‘Is that everything, guys?’ I would hope there are no more surprises out there.’’

          The Allied Pilots Association union at American Airlines Group Inc. also said details about the system weren’t included in the documentation about the plane.

          Following the Lion Air crash, the FAA required Boeing to notify airlines about the system and Boeing sent a bulletin to all customers flying the Max reminding them how to disable it in an emergency.”

          More fundamentally, Boeing overestimated pilots’ ability to handle misfires on 737 Max, according to NTSB.

          -> Federal safety investigators on Thursday said Boeing overestimated how well pilots could handle a flurry of alerts when things go wrong on its 737 Max planes, which have been grounded since March after two fatal crashes killed a total of 346 people.

          The National Transportation Safety Board issued a series of recommendations for aircraft safety assessments, including factoring in human responses when things go awry, the first formal guidelines since the crashes.

          A flight-control system designed to prevent the planes from stalling misfired on both crashed flights: a Lion Air 737 Max in Indonesia last October and an Ethiopian Airlines plane of the same type in March.

          We saw in these two accidents that the crews did not react in the ways Boeing and the FAA assumed they would,” said NTSB Chairman Robert Sumwalt. “Those assumptions were used in the design of the airplane and we have found a gap between the assumptions used to certify the MAX and the real-world experiences of these crews, where pilots were faced with multiple alarms and alerts at the same time.”

          Those multiple alerts can increase pilot workloads, the NTSB warned.

          Boeing based its safety assessment of the planes, which the Federal Aviation Administration approved, on those fast response times, the NTSB says.

          The agency said Boeing should be required to factor in the effect of all flight deck alerts in its safety assessment of the 737 Max, and to include design changes or pilot training and procedures to minimize potential safety risks if pilots take actions inconsistent with what Boeing expects.

          Boeing and the FAA are facing several investigations into the design and certification of the jets, Boeing’s best-selling aircraft ever.

          https://www.cnbc.com/2019/09/26/ntsb-boeing-overestimated-pilots-ability-to-handle-737-max-misfires.html

          • World regulators worked together to create remedial training, that emphasizes recovery from runaway trim. All MAX pilots are required to undergo this training and demonstrate proficiency in checklists and recovery, before resuming flight. This was done because the accident pilots were unable to recover from runaway trim. In JT043, the jump seat pilot remembered the checklist.

          • World regulators (except in China) have compromised heavily to create remedial training, that emphasizes recovery from runaway trim (a very prevalent problem in the archaic MAX). All MAX pilots are required to undergo this training and demonstrate abnormal physical strength and proficiency in memorizing huge checklists, before resuming flight. This was done because the accident pilots were unable to recover from the complete MCAS-caused chaos in their cockpit. In JT043, the jump seat pilot was an extra set of hands and eyes to help the flight crew with this chaos.

          • This narrative is common here and elsewhere, but not reflected in the reality of the findings and training. Plots will have to demonstrate the recovery skills that were absent in the accident flights. That is the purpose of the training. It wouldn’t be needed otherwise. Again, reality supersedes false narratives.

          • This narrative is common here and elsewhere, but not reflected in the reality “on the shop floor”. Pilots will have to demonstrate that a two-pilot crew can somehow overcome the chaos resulting from an out-of-control failure as present in the accident flights. That is the far-fetched purpose of the training. It wouldn’t be needed if the MAX weren’t an archaic, over-compromised airframe from the 50s. Again, reality supersedes false narratives.

    • Just like Trump saying ” the virus is going away” or ” We will build the border wall and Mexico is going to pay for it”. All CEO’s put a feel good message out there. And last, Martin Shugrue of Eastern airlines saying we are in it for the long haul, a few months later in January 1991, the store closed.

      • Steve:

        The best way to deal with Rob is to simply not respond.

        Like the proverbial skipping record (though I am dating myself into Scotts age which sadly is true (for me not him) ) there is no fixing the problem.

        But you can ignore it. Unplug it and it stops.

        • Analysis of this discussed below. A wrong conclusion, but it doesn’t impact the reality, as Boeing understands. $3.8B contract for 27 aircraft issued just this month.

          • No you dont ‘know’
            This years production costs badly affected by Covid stoppages through the supply chain as well.
            Further issues arise from looking at financials from the defence business not using the program accounting method ( to better hide its internal costs from its competitors, major suppliers and customers).
            It seems to be a accounts hybrid with clearly defense costs like the refueling system being expensed immediately but the airframe itself done under long term program accounting.

            A new USAF tanker requirement beyond the 179 pencilled in for the KC-46 also creates issues as thats a ‘ existing in production’ plane , no development required. The Airbus
            Does Boeing really want to be building the 767-2c for another 15 years ?

  2. “Nobody is reticent to fly the MAX,” Calhoun said, without providing evidence.

    What bubble or echo chamber is he living in? Wow.

    Not saying they are right, but there’s certainly no shortage of people posting online that they won’t fly on MAX.

    • The travel numbers haven’t reflected a significant reduction, the reports of this are on-line. Neither in the US nor in Brazil. So just depends on whether you follow the data or the hype.

      The use of the term “nobody” is an exaggeration. Certainly there are people who are concerned or will refuse. They just aren’t the majority.

    • Indeed!
      If the passengers sitting in the cabin with their sandwiches and coffee were adequately aware of the archaic equipment in the cockpit — e.g. the primitive manual trim wheels that can require the strength of both pilots to turn them, or the lack of a backup if there is an AOA sensor disagreement — it might cause considerable heartburn. The EASA-revised action lists for dealing with runaway stabilizer scenarios are as long as Tolstoy’s War and Peace! And pilots are supposed to remember and enact all that when a goose has just come through the front windshield?

      • Here is action list of runaway stabilizer…4 paragraphs for 4 items not War and Peace…why do people say these things that are entirely false ?
        http://www.b737.org.uk/runawaystab.htm#ad2020

        And heres the EASA version
        “If uncommanded stabilizer movement occurs continuously or in a manner not appropriate for flight conditions:
        Recall:
        Firmly hold control column.
        Disengage autopilot if engaged.
        Disengage autothrottle if engaged.
        Use the control column and thrust levers to control airplane pitch attitude and airspeed.
        Use main electric stabilizer trim to reduce control column forces.
        If the runaway stops after autopilot is disengaged, do not re-engage autopilot or autothrottle; end of procedure.

        If the runaway continues after autopilot is disengaged, place both STAB TRIM cutout switches to CUTOUT.
        If the runaway continues, grasp and hold stabilizer trim wheel.
        https://ad.easa.europa.eu/blob/EASA_PAD_20_184.pdf/PAD_20-184_1

        • Some people like to be dramatic. They also seemed to imply EASA, TC, and FAA rubber stamped RTS. Fear mongering seems to also be in play

        • You forgot to quote the second half of that EASA paragraph, regarding the manual trim procedure.
          You also forgot to quote the separate (but related) paragraph on “Stabilizer Trim Inoperative” (section 5).
          You also forgot to quote the separate (but related) paragraph on “Stabilizer out of trim” (section 7).

          That’s 6 times as much text as you chose to quote. Any particular reason for that selectiveness?

          • Dukeofurl quoted the recall items (minimum immediate action items) for runaway stabilizer, seems like fair selectiveness in response to “action lists for dealing with runaway stabilizer scenarios”.

        • Indeed, Frank!
          Captain Sullenberger has astutely described it as “not up to modern standards”.
          A (barely) flying steam engine — complete with cables, pulleys and trim wheels that may require more than one person to turn them. It should be in the Smithsonian in DC, along with other relics of bygone eras.

    • While Calhoun may well be exaggerating, your sample of potential pax is not a representative survey – it is heavily skewed toward people expressing concern.

  3. Just saw a video interview between Calhoun and CNBC’s Phil LeBeau.
    Would somebody please tell Calhoun that the world had has HD webcams for quite some time now, and that it might be worthwhile investing in one? Also a proper stand for the webcam…there really is no excuse for the fact that Calhoun’s image was constantly vibrating.

    The man stuttered and fudged a lot. Is that his normal behavior, or is he just having difficulty dealing with today’s heated questions from investment and industry analysts?

    Is there anybody awake at the Boeing PR Dept.?

  4. “Based on everything we learned in the 737 MAX recertification effort, we put more time into the 777X effort. It’s going to be a little more costly and take more time to certify,” he said.”

    Some dismissed / underestimated the impact of 737/777X Changed Product Rule approach 2011-2017 as “paperwork”.

    What went wrong on the 737MAX, is only child’s play compared to the impact on the 777X Changed Product Rule approach. Result: 4 years of recertification efforts

    https://www.skybrary.aero/index.php/The_Joint_Authorities_Technical_Review_(JATR)_-_Boeing_737_MAX_Flight_Control_System

  5. Totally agree with Bryce and JP Morgan’s Assessments on Calhoun/Boeing’s opinions. I do be believe, that the B777X will be a White Elephant beyond 2025, when Airbus, Chinese/Russian aircraft MFG., would by then have produced much more competitive aircrafts, especially for ASIA, ME, AFRICA, LATIN AMERICAN Countries.

    • While I am no fan of Boeing management, I fail to see China and Russian producing aircraft that are anywhere competitive.

      We have seen China MO, that is to force a non certified aircraft on the airlines it owns, controls (State Owned not private in any way shape or form)

      The C919 is nothign more than a copy of Airbus (give them credit for not cop the 773!) The ARJ is a copy of an MD. Not even state of the art but a generation of the art ago

      929? Two dictators dukeing it out for control of the project with diametrically opposed goals. Again nothing state of the art, and expecting to clashing entities to successfully integrate and build it?

      By the time it sees the light of day (if ever) Boeing will have come out with a new aircraft!

      • Transworld,

        I disagree with you about the ARJ-21 and the C919 not being competitive aircraft. They are very competitive aircraft. I mean, the Chinese Government says the ARJ-21 and C919 are Competitive Aircraft, so it must be true – and all the orders from the Chinese Airlines prove it.

        In time, the Chinese Government will tell the governments of other countries that the ARJ-21 and the C919 are competitive – and the airlines of those those countries will then buy ARJ-21’s and C919’s. Eventually, the skies of Asia will be chock full of Chinese Jetliners happily flying passengers to their destinations.

        And all of this ARJ-21 and C919 demand will be driven by the application of the “Golden Rule of Economics”: i.e., He who has the gold makes the rules.

        • Jimmy:

          Your logic tends to the irrefutable.

          I have to figure out what Asian countries wold not allow a jet that was not certified by a recogined authority to be able to fly in their airspace.

          As I understand it, Alaska and the West Coast are future additions to Asia per the our junk sailed by it concept (granted the evidence is not well fabricated for Alaska or the US West Coast – yet)

          • I guess both Indonesians and Ethiopians are pretty happy that their 737 MAX were certified by a “recognised” authority which many would agree was asleep at the switch.

          • Pedro:

            What you just listed was known as a false equivalency. If X the of course Y. Boeing is bad (agreed) China is good (based on what?)

            Regardless of Boeing and the FAA, rules and regulation have been enacted throughout the world based on them working right (and for the most part that is true)

            We could also do the same for AF447. If there was not a bust of both Western mfg and pilot issues that was clearly it.

            But there is a system in place, it does have its scrutiny and corrections.

            Do you honestly contend that China would not be far worse when their Communist Dictator pet project crashed? Yea Democracy sucks at times but dictators suck a lot worse.

            We can’t even investigate the Covd outbreak which is killing people all over the world. In the US (some of which is directly related to previous administration but no where near all) we have exceeded our total WWII deaths. No I do not blame China directly but they are covering it up and now claim it did not originate there as well as Western Vaccines are not safe.

            The US has checks and balances that work to a major degree, sometimes better sometimes worse.

            China has a dictator and people simply disappear (or whole populations) . Russian openly poisons people who disagree.

          • @TW: The FAA you mentioned existed is the past, only in history book now. The U.S. regulator has soiled its reputation irreparably.

            Ask Lion Air’s CEO how he felt when his pilots were blamed by Corp. Boeing’s stealth PR effort in order to shift attention away from the jet’s deficiency.

            Put down your rose-colored glasses and look at reality: on what basis should the 737 MAX have the same type approval as the 737 NG? Is the 777X is new jet or another variant of 777??

          • Pedro:

            It helps to be older in assessing the events

            The FAA soiled itself on the DC-10, the 737 Rudder issue.

            Its simply that many people don’t read history that they think this is all new.

            For the first time I have even see though congress has taken action.

            While I don’t think they went far enough, they did make some major changes.

            With an administration that stresses safety I have hope progress will be made.

            While Dickson paid lip service to safety, Butegrieg does not and Dickson will soon be on the ash heap of history.

            The world is ever changing, at times its worse and at times progress is made. Stay tuned.

        • @Jimmy

          It seems China believes that airlines/airplanes are essential infrastructure, like roads and trains

          So upgrades are required and invested in, on the principle that it may take a while but they’ll throw money at it until : so far China roads and especially trains are successful and such are exported/built up into the region and beyond – freight trains to EU particularly successful – looks like they are building high speed maglev 600k per hour

          The same may not be said about US transport infrastructure : as per ASCE Infrastructure reports, urgently required investment of as far as I remember $2 trillion to shore up delapidated under invested overdue upgrades

          Aviation scored a D on their report card

          Perhaps the new President will do ‘something’

          • Many of us are hoping so!

            Arguably you could not do any worse than prior.

        • Jimmy, you forgot the /sarc tag. :-o)

          Communist China is working at airliners but struggling, not that others have not (Eclipse had great difficulty with avionics).

          I’m ROFL that the great collective of each-for-all tyranny has silos: “They haven’t really come to grips with some of the issues because everybody is working in a vacuum. They can’t integrate the plane because no one is talking to each other,” he told AIN. “Everyone wants to act as a soloist and get all the glory, but you can’t have a bunch of soloists and build an airplane.”
          https://www.ainonline.com/aviation-news/air-transport/2019-06-14/flight-deck-woes-still-hampering-c919
          Of course collectives are always like that behind the scenes, an elite always rises.

          Of course collaboration but recognition of reality and solid values is key, lacking in CC, but handled by a very successful US bank: https://bbt.mediaroom.com/our-culture

        • Ah no..
          “this bilateral agreement will simplify “the process of gaining product approvals”
          It could be a considerable time before the C919 gets its approval….and may reveal its true design origins when the specifics are revealed.
          China will see a ‘simplified process’ as merely agreeing with them.

          Previous manufactures have tried production in China…for many reasons that didnt pan out. …ERJ145 ..MD82

          The Shanghai partner’s niggling disputes were a constant. Douglas executives organized regular “speak bitterness” complaint sessions.
          One recurrent theme: Douglas’s regimental ways stifled Chinese creativity, a form of American imperialism.
          Mistakes were invariably Douglas’s problem: When a Chinese crane operator accidentally dropped a $1 million nose section, destroying it, the partners blamed Douglas for a “packaging” mistake that rendered the section lopsided.

          https://www.wsj.com/articles/SB832727883654550000

          Bombardier had problems with the Chinese built centre fuselage barrel for the Cseries- and no orders from China for their trouble.
          https://www.flightglobal.com/farnborough-bombardier-dual-sources-early-cseries-centre-fuselage-barrels/106064.article

          • I’m ROFL at ‘Chinese creativity’, try having a different religion, try advocating freedom, etc.

            That’s Communist China of course, not Taiwan which CC will take over if not stopped. Just as it has taken over societies in the Himalayas and is now encroaching into India.

            While I expect efficiencies could be improved in Douglas’ ways, to get into production copying what works in Long Beach is a reasonable way to get going. Reduces training hurdle, which can be huge. Look at Volvo’s attempt to build cars in one of the Atlantic Canada provinces – local workers were not good enough, despite years of effort by Volvo. (One person suggested a lack of family experience, whereas in Detroit workers were descendants of workers so had heard many learning-opportunity stories. OTOH, overseas makers did well in the US near south with greenfield plants. Perhaps someone has chronicled how Detroit trained the many workers who came up from the Deep South in the 1950s, I do not know, Detroit quality was variable. (Trivia: those workers fomented the music industry exemplified by Motown record company.)

          • Speaking about falsehood, from FG linked above:

            “Although Shenyang’s work is being at least dual-sourced initially, Bombardier’s chief concern about the CSeries project has never been about the aircraft’s structures. Instead, the company has been applying pressure on Parker Hannifin and subcontractor BAE Systems to deliver the fly-by-wire flight controls for the CSeries on time.”

            I question if the poster read what’s in the article it links before posting???

        • FG Sep 18, 2019
          “One unique selling proposition of the A220, adds Xu, is that a notable portion of it is made in China with Shenyang Aircraft Corporation manufacturing large fuselage sections.”

          Fear monger presents “alternate fact”, truth says otherwise.

        • FG Sept 6 2019
          “Airbus is to deepen its co-operation with Chinese airframer AVIC for its single-aisle aircraft production.

          A new agreement, signed during German chancellor Angela Merkel’s visit to Beijing, will see enhancements to A319 and A320 fuselage-equipping works.

          These are currently carried out at the final assembly line at Airbus’s Tianjin facility, which also contains an A330 completion and delivery centre.”

        • Even if EASA and the FAA never certified any COMAC aircraft, why should that be of any concern to the Chinese?
          Servicing the Chinese market alone represents 40% of worldwide demand for new aircraft. And, in addition to that, there are plenty of countries around China that would probably also certify and use COMAC aircraft — such as Indonesia, Cambodia, Myanmar, Laos, and Russia. They can happily use the planes within and between their own territories without ever having to extend to a country in which certification has not occurred.

          And apart from that:
          – What does FAA certification mean any more? The FAA certified the MAX, didn’t it?
          – Is the Boeing 737 (an archaic 1950s design with cables, pulleys and trim wheels) any better than the COMAC product offering? The ARJ21 and C919 are FBW.

          • Bryce:

            Those countries you list are certainly world shakers and movers in the Aircraft business. Note no Vietnam!

            First you miss Certification’s for the Chinese is not about safety, its about image and that is their overriding imperative, image.

            So yes you can fly internal China all day long with you 919

            But, its route limited. How much that affects thing? Take and AP Roberts type dive there.

            Anyone can make a car or a train. Its a two dimension operation (really one for a train) .

            Making and OPERATING a safe aircraft, whole new ballgame let alone supporting.

            What you wind up with is AeroMexico with lots of spare Super Jets so they have spares (at best)

            And you learn nothing from competition because you compete against not one (are not allowed to)

            I saw the junk VCRs that came out of Korea, you could not keep the SAMS up to date, they changed monthly if not more often.

            As my brother told a lady, no I won’t even quote a repair. You not only can’t afford me you won’t. Send it back, throw it away, keep buying them until you get one that works, you got it for $80 for a reason.

          • @TW: “So yes you can fly internal China all day long with you 919”

            WN flies domestic only, right? How many aircraft it has and how many it has on order? Ryanair and Easyjet fly mainly within the European market (and U.K.), right?

            How many a320/B737 are flying within European or U.S. domestic market? I know you tend to look towards to past, but it won’t hurt to look ahead from time to time, right?

          • Pedro:

            I am totally ignorant of China roue structure.

            I do many flights go to Korea, Japan, Singapore.

            If you are setup like South West is, it can work. But I don’t know that Chinese Airlines are (the big 3 control by the commies)

            No question they can make it work, what we called a force fit at work.

            No competition means poor response and if China wants to operte on the world stage, then its exposed to the world stage.

            Not that they can’t do a Hermit Kingdom, but that is not their MO right now.

      • Um, TW, doesn’t the ARJ21 have an aerodynamically new wing?

        I don’t know its structure (recall Boeing changed aerodynamics of the 737’s wing to make the NG, but same structure including main part between spars).

        The DC-9/MD-80 fuselage served for decades. I was impressed with the DC-10’s fuselage construction and nose shape (the concept for which Boeing copied on the 767).

    • Aircraft of what size?

      The 777X is a big widebody airliner.

      It’s future will depend on passenger demand and airline routings. The A380 was considered too large so is going out of production.

      As for Communist China and the tyrannical state of Russia producing aircraft to compete with the 777X, why would they? Perhaps Communist China has the potential traffic volume internally, I doubt Russia has.

      For actually producing a reliable airliner of any size, Russia comes closest but is politically unstable.

      • May not have helped that the A380 went into service just before the recession of 2008.

        Note that half of orders for it are from one airline, in a volatile area of the world.

  6. I am deeply suspicious about the 777X, I think there might be a problem. Were they intending to certify it the wrong way?

    • So – a friend of mine who has intimate knowledge has mentioned to me that the shop talk is that there is a high alpha problem. He postulated that maybe the tail might be too small, but it might be fixable with the flight control ‘puter.

      • Unfounded speculation again, as with the MAX. Same story as then, and that was argued over uselessly and needlessly here for months. No substance to it at all.

      • Boeing came out today with a notify that they expect to sell 50 fewer (now 350)

        As I recall they had 300 orders so the orders vs the we think is rapidly closing.

        • “notify that they expect to sell 50 fewer (now 350)”
          Accounting blocks arent an expectation on sales, its an escalator which goes up…and down.
          Or as Boeing puts it.
          “program accounting determines cost of sales based on the average profitability over the airplane program accounting quantity. “

          • Duke:

            When did you ever see a Boeing accounting block go down?

          • In order words, program accounting is the black box the corporate can use to generate a better looking picture like banks on WS before the GFC.

          • Hmmm, its more like the tax scam that allows them to spend tens of billions on shre buy back as well as dividends that corporate structure is supposed to not do when you are taking massive losses.

            In other words, just like the subsidies Boeing claimed against Airbus that distorts the market place, they do even more and worse.

            At this point the hypocrite is not strong enough.

            Balled faced liars as close as I can come.

          • “When did you ever see a Boeing accounting block go down?”

            Hasnt the the 777X accounting block just been reduced ?

            And you were the one that said it ! You are just like Wall St you despise by be short and long on Boeing …at the same time, but not a way to make money.
            Im also sure the 737 max accounting block number has come down as well

        • November 17, 2013 Lufthansa[a] 20
          November 17, 2013 Etihad Airways 25
          December 20, 2013 Cathay Pacific 21
          July 8, 2014 Emirates 115
          July 16, 2014 Qatar Airways 60
          July 31, 2014 All Nippon Airways 20
          June 4, 2015 Unidentified customer(s) 10
          June 19, 2017 Singapore Airlines 20
          March 22, 2019 British Airways 18
          Total 309

          Not for nothing but there are also these tidbits:

          On February 14, 2019, it was reported that Etihad would take only six of the 25 777X airliners it had originally ordered.

          On November 7, Lufthansa stated it had converted 14 orders into options, leaving six firm commitments, after having negotiated a change as part of its order for 20 787s

          With Lufthansa and Etihad down to 6 each, BA is looking at orders for 274.

      • @ Frank
        Wow…that would be spectacular.
        You’d think that a company proficient in CAD and numerical modeling would catch a gremlin like this at a much earlier stage. But, then again, Boeing has lost all technical proficiency.

        So, will the tail redesign be done using a sliderule?

          • Well Duke, my guy – who worked there and has been in the industry for decades, explained the whole shebang to me in his typically detailed and highly technical way. Apparently this only surfaced after testing – you know, kinda like the blown out cargo door did under the stress test?

            We also recently talked about the common type rating BA is trying to score with this aircraft (after I pointed out to him that it will be a full decade from launch to entry into service) and his response was:

            “You know, everyone thinks this is a derivative but there is very little in common between the original and the X line. New plastic wing, folding tips, biggest engines ever…maybe ~10% is common”

            I’ll go with his assessment of the high alpha issue (which he heard through the grapevine) and pretty much all other things BA. As we know, they aren’t the most forthcoming organisation, are they?

          • @ Frank
            Thanks for this great insider report!
            This type of info doesn’t sit well with a few denialists here…you’ll figure out pretty quickly who they are 😉

          • Rumor and speculation. As also occurred with the MAX, and proved unfounded. There would be no cause to believe this without evidence, There is none at present.

          • More “evidence” that the 777X should be certified as a new jet, not a variant.

      • Unfounded speculation??

        Boeing CEO: actuator-control electronics on the 777X have to be redesigned

    • Keep in mind that ‘certification’ will be more thorough, by FAA and others.

      (You can see the scrutiny in Transport Canada’ AD on the 737MAX, by their claim they found things the FAA did not. For example, a trim mode that is disabled by stick shaker.

      And note you don’t know if Boeing is taking the lull in demand to make improvements in the 737 MAX, even if small.

      I read that the 777X has some kind of ‘laminar flow’ method on the tail, which sounds like blowing air tangentially across the airfoil, rather than holes in the surface that can get clogged. But I have not checked with other sources.

      Laminar flow has of course been researched for decades if not longer. (Just looked at a photo of the Dash80 from above, a loong row of vortex generators is visible. (Boeing may well have improved the wing from the Dash80 prototype, to make the KC-135 and 707.))

      Speaking of research I hidden corners, and secret airplanes like the Cessna Mustang VLJ, note that Boeing referred to the prototype as 367-80 to camouflage work somewhat, 367 being a propeller airline with no resemblance.

  7. Its a tragedy that Boeing management is not in our rear view mirror, that would be cause for joy.

  8. $38 billion in net debt. And counting. Will Q1/21 be the quarter where it starts to go down? Inquiring minds want to know…

    • Inspection of 787 to start at Everett after production ceased. Seems pretty extensive as interior has to be ripped up.

      • @DoU

        You are comparing apples to nuts

        Ford is living off it’s ample assets, for the while: AT&T has a very large free cash flow: Apple is the biggest company in the world by most measures whose free cash flow exceeds BA turnover

        Debt does matter, as do assets, free cash flow, sales, profit margins

        BA struggles to pay interest on debt, neg cash flow of ? nearly $20B for 2020? , selling assets (737s and 787s) at a loss, future sales ditto, nothing in the pipeline except occasional DoD subsidies

        WS will support AMZN through many years of losing money, as China will support long term infra investment, but no one will support BA

          • @DoU is incapable to distinguish a co. with AAA credit rating like Apple ( which happens to be higher than U.S.A.) and a company on the brink of being degraded to junk like Boeing.

            Oh BTW in a recent Bloomberg piece, Boeing is being called out, among others like Carnival, a “zombie” company (reminds me those from Japan three decades ago):

            -> They were once America’s corporate titans. Beloved household names. Case studies in success.

            But now, they’re increasingly looking like something else — zombies. And their numbers are swelling.

            From Boeing Co., Carnival Corp. and Delta Air Lines Inc. to Exxon Mobil Corp. and Macy’s Inc., many of the nation’s most iconic companies aren’t earning enough to cover their interest expenses (a key criterion, as most market experts define it, for zombie status).”

            -> “Nearer term, because zombie firms exhaust value, credit-recovery assumptions should go lower, which arguably should send spreads higher to compensate.”

            -> “new research from the Bank for International Settlements shows that zombies may be even more damaging to an economy than previously thought.

            Not only are firms staying in a zombie state for longer than in years past, but of the roughly 60% of firms that do manage to ultimately exit zombie status, many nonetheless experience prolonged weakness in productivity, profitability and growth, leading to long-term underperformance.”

          • @ Pedro
            Thanks for that Bloomberg analysis. “Zombie” is an excellent descriptor for a debt-laden has-been like Boeing 👍

          • Also worthy of note, Gerrard – is that many of those in debt did so to acquire other companies – specifically from that list AT&T, Verizon, Comcast, etc.

            Apple is borrowing money for 2 reasons; 1) it is cheap, they are paying 3% on it & 2) it funds buybacks and dividends so they don’e have to bring money back from overseas.

            Boeing spent their money on buybacks and dividends, but don’t have billions sitting in another account, just in case they need it.

          • @ Frank
            Were you a regular commentator on SimpleFlying back in 2019, at the start of the MAX crisis? Your (very pleasant) commenting style rings a bell…

      • Thanks to years of share repurchases … and losses suffered in last two years, Boeing shareholders’ deficit reaches $20 bilion at y.e., a record for the company??

      • Apple may have $90 billion in debt, they also have $195 billion cash on hand. The main reason they have debt is because they want to pay dividends in North America but can’t repatriate non-US income without a large tax bill. So they borrow money and pay dividends that way. If/when there is a tax holiday for repatriation of funds they will do that and pay down the debt. In the mean time borrowing is so cheap it works.

      • Duke, let’s look at it another way.

        Boeing, in it’s biggest banner year of 2018, sold over 900 jets, had over $100 billion in sales and profited $12 billion on that, across the whole company. Commercial was 60% of sales and 66% of profit ($8 out of the $12 billion)

        To almost ZERO the $38 billion in net debt it owes, they need 3 straight years of those numbers, without incurring any additional losses, to make it up. Is that happening any time soon?

        They could also sell shares and put the funds directly against the debt, but that would dilute equity and that’s a no-no.

  9. Let us speak about 787…
    no deferred cost depreciation??? with profits “on single digits” and production volume really low, how many décades will they need to recover these costs???
    and when will they depreciate the Everett production line? there are probably a few dimes of Equipment that will be scrapped…..
    and no comment on the quality issues, and what they will cost ….
    confidence in the dreamliner will be a nightmare, if they do not find a reliable solution …

    • GS’s take: “787 deliveries do not appear to have resumed yet and the 777X has been pushed out, but neither of these are likely to have a material impact on mid-cycle / normalized free cash flow generation potential.”

      GS believes 787 will not generate any cash in the near future??

      • Their statement means that those will be delivered and there will not be a meaningful change in the mid term to their ability to sell units which is more dependent on the market conditions than a shim/assembly issue happening now. “Non material” means non issue in that time horizon. Also deferred costs mean nothing because valuation is based on cash flow generation but that’s been explained ad nauseum.

      • “when will they depreciate the Everett production line?”
        Its only a final assembly line which took only around 17 days, the structures are built elsewhere and flown in or road delivery from the Boeing plant south of Seattle. Those ‘production’ facilities continue to send their output to Charleston.
        The Everett line will only have ‘leftover’ jig for barrel join process…which could be moved to Charleston to support a faster or higher production rate.

  10. “Calhoun said on CNBC that Boeing adjusted the accounting block, which has not been publicly announced, as part of the charge.”
    Inquiring minds want to know. 400 down to 200?

    • If that is the 777X its 400 down to 350 now.

      As it comes from a corporate blurb we can trust it is no lie.

      • If they had a development cost of 12B, 12B/400 is 30M per unit to pay it off. 50 lost units x 30 is 1.5 B. A three year delay to pay off 12B would be 1B financial cost of money. That’s 2.5B which is still a long way from 6.5B.

    • are you sure 787 accounting block is 200?
      that looks tiny even if at 5/month that extends till 2024, quite a few years after EIS.!
      defferred accounts are in the $15B range..
      profits are less than $15m/frame
      that means that 3bn can be recovered, and 12bn have to be depreciated
      plus Everett line value (post amortization)
      next year???

      • In reference to the 777x accounting block. As per the quote, “has not been publicly announced” So what is a best guess? TW says new information is a decrease in the 777x accounting block of 50, but previous block is still a guess I assume. I guessed 400.

      • Its 777X not 787, context is important.
        Why focus on an artificial financial concept like ‘accounting block’ its not a floor or ceiling its more like an escalator. It doesnt have wings !

        • Programe accounting block is defined by Boeing
          ” A program consists of the estimated number of units (accounting quantity) of a product to be produced in a continuing, long-term production effort for delivery under existing and anticipated contracts. ”
          https://www.annualreports.com/HostedData/AnnualReportArchive/b/NYSE_BA_2002.pdf
          Back in 2002 when the first 777-300ER was rolled out the 777 production block was 600. Total deliveries around then were 420.
          Actual production of 777’s of all types by end of 2020 was 1650, which is say 2.75 x that of the production block back in 2002.

          • IMU accounting block is more or equal the up to now produced frames. inside a project changes to the cost spread across the full accounting block.
            Does this then change the accounting for already produced frames?

            OT sideeffect is that Boeing has high interest in pushing as much cost into production accounting as possible.
            IMU the reason why the terrible teens where not scrapped but reworked at humongous cost
            and all prototypes were intended to be merchandisable. Ups, $1B pushed into program cost per proto frame ( well at least that was intended).

    • REPOST:

      Boeing’s unfilled orders for 777 (including 777X and 777 freighter), after ASC606 adj. is 232 only.

      777X block size is 350?

  11. Global 777 operators going A350 doesn’t support a high accounting block.
    DL, UA, BA, AF, LH, SQ, CX, SIN, JAL, EK, QR..

    • Lufthansa doesnt operate 777 with pax, United doesnt have A350 and just had some unwanted orders from Continental which have been pushed out a decade.
      UA is unlikely to go for 777X for 15 yrs anyway as they have just taken on more 777-300ER
      Your point is ?

      • EK reduced its original order for the 777X by 24 aircraft, Lufthansa also cut 14 777X orders.

        Imp. to watch: EK also would further reduce its 777X once Boeing firms up delivery date.

      • My point is the bigger 777 operators committed to the A350. While only a few hundred -1000s have been sold, most airlines have conversion rights/ options to upgrade from -900s when the market requires, eating away 777x opportunities. Almost all 777x customers have those -1000 options.

    • Just have to do the math here. Initiating contract was $4.9B for acquisition of 179 airframes. This month, $3.8B contract issued for 27 airframes, with associated service, maintenance and support.

      The KC-46 program will do fine over i’s lifetime, as Calhoun truthfully said. Initial acquisition loss which is unfortunate, but doesn’t threaten the program overall.

      The next major question is the KC-Y program, which will be much larger. Boeing will have an advantage if the aircraft is performing well and the USAF is happy. That’s why they are more focused on pleasing the customer, than on cost.

      • Is aquistition cost the same as design cost? Does it matter to Boeing if they contract for 100 or 200 in the long run if it is a fixed design price and fixed build price for each batch?

        • It’s like any product revenue model. When I deliver a custom software package, the initial development cost more than the price, but each deployment builds future revenue through service and support.

          Each deployment also has progressively lower cost, but same price, so total future profit is multiplied by deployments. With a sufficient number, revenue and profit become dominated by support. That is what will happen for the KC-46.

      • Rob, is ‘KC-Y’ a second tranche of tankers to replace KC-135Rs, or the KC-10 replacement?

        Size matters for refuelling B-52s, that’s why the KC-10. Won’t Airbus pitch its bigger tanker? (I don’t know its size compared to DC-10, it is in operation with some military around the world.)

        • Keith, the USAF has a relatively small number of KC-10 tankers. They were to be retired after the KC-X program. Some are, but some are being retained due to the delays with the KC-46.

          KC-Y was to be a larger replacement program for the KC-135, but limited to existing tanker aircraft (KC-46 and MRTT).

          There are voices in & out of the defense community that want the KC-10 capability retained. The KC-46 was meant to be an in-between solution for both KC-135 and KC-10.

          So it all depends on what the USAF determines their needs are. If they want the big tanker, the MRTT is a better match than the KC-46. That will all be in the specs for KC-Y.

          I suspect for smaller forces that need only a few tankers to operate with a limited-diversity fleet, mostly in their own skies, the MRTT may be the best choice. For the US which has very large established infrastructure around the world, and must handle every military aircraft in the NATO inventory, anywhere in the world, the KC-46 was viewed as the better choice. But we will see what happens with KC-Y.

    • That contract was for only 18 planes plus development, the full requirement is for around 10x that.

    • Thanks Dave. USAF initial contract for the KC-46 program had a ceiling of $4.9 billion, with Boeing responsible for the excess.

      Boeing has now charged-off about $5 billion to its P&L from 2014 to 2020

  12. I’m not a Boeing apologist, but they’re digging out. The coronavirus has totally upended the airline industry – their main customer. Fragmentation is a trend. But at some point a plane holding 350 people in three classes will be needed. Lots of 777-300ERs will need to be replaced. Calhoun is probably not the best guy for rebuilding the product line, but he’s probably doing what most would at this point. The 737Max has a fair number of orders in the -800.

    • @sam

      Airbus has reacted with greater efficiency to the current crisis and has, by general opinion, the better product

      Sales for 2020 were better maintained than BA sales, especially in vital Asian market, from which it may be Boeing is excluded by way of US sanctions against China : Asia is seen to account for 40% global market, whereas BA’s preferred US is at approx 17%

      https://www.capital.fr/entreprises-marches/airbus-met-a-jour-ses-cadences-de-production-davions-1391565

      When an industry heavyweight like Tim Clark speaks of Boeing in such a negative way as recently it is evident that he does so to reflect a significant shift away from BA amongst key global institutional and Gvmt decision makers

      If there appears a demand for the plane you describe it is more likely that this plane will be bought from Airbus than from Boeing

    • @ Sam
      “But at some point a plane holding 350 people in three classes will be needed”

      Not necessarily. Even before CoViD, airlines seemed to be preferring use of a smaller airframe at a higher frequency.
      As other commentators here have said: a problem with the 777X is that Boeing tailored it to the needs of the ME3, and neglected to heed what other airlines wanted. The result is an aircraft that had (at the height of its order tally) 60% of its orders coming out of the Gulf. A bit like the A380 in that regard.

      Apart from routes to/from the Gulf, how many routes consistently operate 777-300ERs with a high load factor?

      • I think as a whole it is fairly easy to discount and trash BA. And they deserve it. But they will sell maybe 4000 MAX-8s, and from what I’ve read, the 787 situation is going to be Ok. As been noted, The Feds are not going to let the largest exporter, and the second to fourth largest defense contractor disappear, especially being one of the most widely held stocks in the country. Mostly what they need is a degreed aerospace engineer at the helm: with orders from the board to make this the premier airplane manufacturer in the World. It could, should happen. I like many in the populace have skin in this game…

        • @ Sam
          “I like many in the populace have skin in this game…”

          I can very much imagine that many 401(k) / pension portfolios contain Boeing stock. But they also contained Enron stock, for example. It’s one thing to hope that a company returns to health, but it’s quite another thing to create a denialist parallel reality in order to avoid looking ugly reality in the face. You may not be a proponent of such behavior, but I can think of a few others who most definitely are.

          p.s. Sales don’t save a company, because sales may not have enough margin to cover costs. A company needs actual net earnings after deduction of costs, and it needs a healthy balance sheet…but Boeing has neither.

        • Sam:

          Keep in mind we are trashing Boeing Management (laughable as the term management is) not Boeing. Most if not all of us care about Boeing.

          That said, you can go with the school or Rob that thinks all failures deserve an ice cream cone. Granted its been a norm to give the team that came in last a participation trophy. Boeing was not built on getting ice cream cones for failure.

          Boeing will clunk along, the issue is that the board is is reinforcing failure.

          Boeing did try an engineer but as you noted, that position needs the board support but its not just an engineer, its a clean sweep.

          Ford did that with Mullaly.

          Boeing boards is in Chaoots with Calhoun so it will not happen.

          How long the wounded beast flounders is hard to say, far longer than logic says. But sans a U turn, no product and constant product failure means a demise.

          You have to come out with new stuff to kick the accounting can down the road and Boeing has absolutely nothing. If know one buys the 737NEX, your accounting goes into the toiler.

          In Aviation its called a death spiral. Many mfgs have gone that course.

        • @Sam: Just watch what happened to GE, once a great industrial co. of America, in the last decade.

          The MAX have to go back to a production rate of 50 plus a month in order to generate the kind of cash in previous years, impossible now!!

          The company also have 60 billion debt to repay!! What Boeing need in addition to replacing the board and CEO is a large raise in equity to right the ship. Not happening anytime soon.

    • 2016:

      The two largest customers (Emirates with 114 and Cathay with 53) account for 27% of in-service 777-300ERs. The next five largest operators (Air France, Qatar, Singapore Airlines, Etihad Airways and Turkish Airlines) operate a further 23%.

      Cathay and the ME big three are not growing for awhile, many also have A350 order for better F.E.

  13. Boeing The View from Paris

    Le Monde

    Measured but pessimisitc

    https://www.lemonde.fr/economie/article/2021/01/27/apres-une-annee-de-pertes-abyssales-boeing-espere-se-relancer-en-2021

    Ky will be obliged carefully to monitor the Max : China unlikely to re cert the plane : EU market un promising

    Le Capital

    Very pessimistic

    https://www.capital.fr/entreprises-marches/retard-du-777x-desastre-du-737-max-covid-19-boeing-accuse-une-perte-gigantesque

    Les Echos
    https://www.lesechos.fr/industrie-services/air-defense/boeing-a-touche-le-fond-en-2020

    BA hits bottom : lack of forecast for 2021 ominous

  14. We can now safely assume that the new delay and charge will make the 777X program loss making just like the 747-8.
    BCA should really change course and stop going down the derivative road. They need clean sheet programs developed in house to avoid repeating the 787 debacle that ended up costing them twice as predicted to develop and put into production.

  15. “No one is reticent to fly the MAX”
    How can anyone tell? When the MAX 200 finally arrives at Ryanair, I shall do all I can to avoid it owing to cramped seats and the hell of disembarkation.It will be almost impossible for anyone to know why I didn’t book with the airline.

    • Exactly.
      All that current operators can see is that (according to them) insignificant (extra) numbers of passengers are cancelling a MAX flight — passengers who don’t book a MAX flight in the first place are off the radar.
      I too will be avoiding Ryanair, after being a satisfied customer for 20 years: the seat pitch in the MAX200 is unacceptable, in addition to Sully’s declaration that the plane is “not up to modern standards”.

      • Bryce:

        You are taking a data point of 1 in 100s of millions and then contending you are representative.

        Ak Airliens now flies the MAX and I will fly it if its on the schedule when I fly. That makes me a data sample of 1 as well.

        As Dr. Fauchi says, lets get the data and see what it says.

        Past pax performance says it makes no difference. We had the DC-10 crashes and people still flew it as they did the MD-11.

        I was one of them, I did not like it, but it was the bird going where I was ticketed on to where I was going.

        • Can you point out where, in my short comment, I “contended that I was representative”?

        • Would you get on a MAX 200, TW? I’m not saying that I won’t, but I will fight to avoid it.

          • I think the bigger avoid is avoiding Ryanair, not the MAX 200….

        • Um, TW, did you really have to fly on the DC-10?

          After one DC10 crash the airline’s traffic dropped 7%, which is a big hit on profit given fixed costs.

          People do make choices, based on alternatives. After PW314 crashed, some people took the bus for 12 hours over winter roads to get to Vancouver BC but most considered the airline’s record and the alternative so continued to fly.

          (At that time it was not clear that the cause was ATC botched arrival time and Aeradio information station acted as a control tower which it was not authorized to do.)

  16. China Update

    https://www.globaltimes.cn/page/202101/1213703.shtml?source

    « The long-range wide-body aircraft, CR929, to be jointly developed by China and Russia, will kick off its manufacturing in 2021, said Yang Zhigang, general engineer of Commercial Aircraft Corporation of China Ltd (COMAC). «
    « China’s domestically-developed large passenger aircraft C919 is undergoing frequent flight testing in different areas of China. On 16 January, C919 completed its first low-temperature 23-day-flight test in Hulunbuir of North China’s Inner Mongolia Autonomous Region.

    “The C919 aircraft is scheduled for delivery to the first client at the end of 2021,” said Yang.”

    • Further evidence that the mRNA vaccines are significantly less effective against the South African COVID variant. There are now several studies that confirm this:

      “A study released on Wednesday ahead of peer review found the South African variant reduced neutralizing antibodies 8.6-fold for the Moderna vaccine and by 6.5-fold for the Pfizer/BioNTech shot”

      https://www.reuters.com/article/us-health-coronavirus-vaccines-variant-f/racing-the-virus-why-tweaking-the-vaccines-wont-be-simple-idUSKBN29X1DI

      • For the study released on Wednesday that found reduced response of isolated antibodies, scientists have noted it was conducted on a pseudo-virus with similar characteristics, rather than on the actual coronavirus as used in the study released today, and in the others which indicated only slight reduced effectiveness.

        Additionally the current study was based on blood samples of people vaccinated with the mRNA vaccine. Together these factors produce a much closer approximation of the actual conditions in the population.

        The study authors are working on engineering a full replica of the South African variant for testing. Those results are about 2 weeks away. They should be definitive and put an end to the speculation.

        Lastly, the broad consensus of the scientific community is that there will not be vaccine escape for any of the known variants, although there may be reduced effectiveness. Panel discussions of experts have been in agreement on that. And there is work ongoing to tweak the mRNA vaccines, which will address any reductions that occur, if needed.

        I have yet to see any authority say otherwise. Even the studies that show greater loss of effectiveness, don’t claim otherwise. Although of course there is always misinformation and scaremongering, here and elsewhere. You can look at the number of times those sources have been proven wrong, they have almost a 100% error rate. The correlation is so strong, that their advocation of any issue is an indication of falsehood.

        • For the study described in the links posted by Rob, scientists performed this on a pseudo-virus with synthetic characteristics, rather than on the actual coronavirus — please actually read links before concocting falsehoods about them.

          Additionally the vaccine-busting study in the heavily-cited BioXRiv article from last week was based on blood samples of people vaccinated with the mRNA vaccine. Together these factors produce a much closer approximation of the actual conditions in the population.

          The study in said BioXRiv article is definitive and has put an end to the speculation.

          Lastly, the broad consensus of the scientific community is that there will be a worrying degree of vaccine escape for several of the known variants. Panel discussions of experts have been in agreement on that. That’s why there is work ongoing to tweak the mRNA vaccines, with the aim of addressing this issue.

          I have yet to see any authority say otherwise. Even the studies from the pharma companies themselves don’t claim otherwise (if you dig into the small letters). Although of course there is always misinformation and scaremongering, here and elsewhere. You can look at the number of times those sources have been proven wrong, they have almost a 100% error rate. The correlation is so strong, that their advocation of any issue is an indication of falsehood.

          • Bryce, your comments are in error. Please read the articles again.

            “The results are more encouraging than another non-peer-reviewed study from scientists at Columbia University earlier on Wednesday, which used a slightly different method and showed antibodies generated by the shots were significantly less effective against the South Africa variant.”

            “One possible reason for the difference could be that the Pfizer findings are based on an engineered coronavirus, and the Columbia study used a pseudo-virus based on the vesicular stomatitis virus, a different type of virus, UTMB’s Shi said. He said he believes that finding in pseudo-viruses should be validated using the real virus.”

            I realize you don’t want to accept this outcome, as you have not accepted other similar outcomes. But these are the truthful results, and my characterization of them was also truthful. It does no good to claim otherwise, you can’t change the reality with false claims.

          • Bryce,
            I recommend you read Derek Lowe’s blog post of January 27th on this topic. His summary of the scientific data is more optimistic than those you cite; one key factor is that the mRNA vaccines induced a stronger immune system response than the base COVID virus itself so a reduced response can still be strong enough. It does point to the need to get above 70% population vaccinated as fast as possible though.

            (Lowe’s blog is hosted by a well-known science publication)

          • Rob, your comments are in error. Please read the articles again.

            The BioXRiv article to which I referred was not posted by authors from “Columbia University” but by scientists from The National Institute of Communicable Diseases in South Africa.

            In the preprint you site, the authors “engineered three SARS-CoV-2 viruses”. The NBC article you site explicitly states that “its findings are limited because it does not look at the full set of mutations found in the new South African variant.”

            I realize you don’t want to accept this outcome, as you have not accepted other similar outcomes. But these are the truthful results, and my characterization of them was also truthful. It does no good to claim otherwise, you can’t change the reality with false claims.

          • @ sPh
            I’m not looking for “optimism” — I’m looking for realism.
            It’s better to read sources yourself rather than consulting “feel good” blogs.

            Yet another example, fresh from the press today:
            Novavax has just revealed that its vaccine is “more than 89% effective”. However, “a separate phase two study in South Africa showed that the vaccine isn’t nearly as effective against a new strain ravaging that country….with an efficacy rate of just 49.4%, the company said.”
            It should be noted that 49.4% is below the acceptability threshold defined by the WHO.

            https://www.cnbc.com/2021/01/28/covid-vaccine-novavax-says-covid-vaccine-is-more-than-89percent-effective.html

        • Bryce, repeating my posts back to me is childish and yet another example of the false equivalencies being practiced here. Unsurprising and unconvincing.

          Here is the current official assessment of vaccine effectiveness, which supports all of my statements:

          “Will vaccines stop the variant?

          Anthony Fauci, MD, director of the National Institute of Allergy and Infectious Diseases, said current COVID-19 vaccines may not be as effective against new coronavirus variants, but they should be strong enough to still be beneficial.

          The vaccines from Pfizer-BioNTech and Moderna have such high efficacy rates that it creates a “cushion effect,” Fauci said, meaning that new variants will likely only diminish vaccine efficacy slightly.

          DHEC noted that “experts agree” that existing approved vaccines work against the variant “even if we don’t know precisely how effective they are.”

          Moderna says it is now investigating whether a third dose of its vaccine will better prevent the spread of the South African variant.”

          It’s notable that Novavax, which is a killed virus vaccine, has reported a drop in efficacy from 90% to 50% in South African trials. That refutes the notion that vaccines based on the actual virus, induce a broader response than the mRNA vaccines.

          Moderna sees the potential of their rapidly tweaked mRNA vaccine to become a booster shot if needed for other vaccines that may lose effectiveness against variants. Novavax has also said they can tweak their vaccine to provide a booster that could be administered at the same time as the original shot, eventually replacing the original.

          The studies which raise concerns and show limited effectiveness, are from blood plasma sera, which isolate the contained antibodies from the body’s full immune response. More research on that is needed, but the body has other responses that are not contained in the sera.

          We will see how the various vaccines perform as the virus evolves, and as they are approved. But there is not cause for alarm just yet. Nor any plans to alter the present course of action, to get people vaccinated as soon as possible.

          • Rob, repeating your [Edited] posts back at you is a very effective medium against your false equivalencies being practiced here. Unsurprising and unconvincing.

            Here is the current official assessment of vaccine effectiveness, which supports all of my statements:

            National Health Laboratory Service (NHLS) in Johannesburg: “The speed and scope of 501Y.V2 mediated immune escape from pre-existing neutralizing antibodies highlight the urgent requirement for rapidly adaptable vaccine design platforms, and the need to identify less mutable viral targets for incorporation into future immunogens. The findings have important implications regarding the effectiveness of certain vaccines and therapeutic strategies that are undergoing development.”

            Moderna is currently in the process of developing a modified vaccine to better prevent the spread of the South African variant.

            It’s notable that Novavax, which is a killed virus vaccine, has reported a drop in efficacy from 90% to 50% in South African trials. That reinforces the data that vaccines are less effective against the SA (and Brazilian) variant.

            Moderna sees a need to rapidly develop a tweaked mRNA vaccine to become a booster shot for their own vaccine that has already been shown to lose effectiveness against variants (sixfold lower antibody titer, in Moderna’s own press release). Novavax has also said they may tweak their vaccine to provide a booster that could be administered at the same time as the original shot.

            The studies which raise concerns and show limited effectiveness, are from blood plasma sera, which isolate the contained antibodies from the body’s full immune response. The body does not have other adaptive responses that are not contained in the sera.

            We will see how the various vaccines underperform as the virus evolves, and as they are approved. But there is understandably widespread alarm at this juncture, and tentative plans to alter the present course of action to get people vaccinated with modified vaccines as soon as possible.

  17. Covid, even as it applies to air travel, has become a boring topic. I would be very pleased never to see anything about Covid (and all the associated sub-topics – vaccines, mitigations, spread vectors, origin etc etc.) except in threads where Covid is the direct topic.

    Is it just me? Anyone else have Covid fatigue?

    • It’s one topic of the propaganda that is now regularly posted here, by a small group. I’ve tried ignoring it in hopes the authors would stop, but they don’t, it just gives them a freer hand. Correcting it only results in a further storm of increasingly irrational posts. So there is no good solution.

      The posts and behavior by that group now echo the shadier elements of Reddit, Parler, and 4chan. Also now dominate the threads, comprising well beyond 50% of the content. I can’t imagine that’s what Scott wants to happen here. I’ve seen other forums be overrun by similar groups.

      I’d be fine with banning those topics, but I suspect that won’t be enough. The response of this group to Scott’s efforts is key. If you put a thief in jail, there are two possible outcomes. One is that the person learns that thieving is wrong. They return to productive society. The other is that the person becomes a better thief, learning to avoid discipline, but continuing their practice. There can be no doubt that this group is in the latter category.

      What to do about this, I don’t know. Banning subjects would be a start. Ultimately it’s up to Scott.

    • @ Jbeeko
      In the hilarious post just above this, Rob forgets that the current discussion was caused by *HIS* sudden interjection of a CoViD-related post in the middle of a discussion of something totally different. He has been tending to do that of late: for example, in the middle of another discussion last week (on Hydrogen aircraft), he placed a sudden interjection in which he started pilot-blaming the pilots of the MAX crashes, prompting a rebuke from another commentator.
      It’s possible/probable that he does this when the narrative isn’t going in a direction that he would like…as an attempt to create a distraction.

      • Bryce, in this article the subject of COVID was referenced in the article itself. Then by Duke, then by Pedro, then by you, then by Gerrard, then by me.

        The link I posted in the hydrogen article was a first-hand account of the MAX training by an experienced 737 pilot and author. Informative and timely given the commentary here on MCAS and trim wheels, as it explained the experience with both in detail.

        The fundamental driver for your vaccine comments is the same as from the beginning, that vaccines ultimately won’t be effective. You’ve been wrong about that, but won’t let it go. And so we are treated to your continuous insistence that you are somehow right.

        The variants give you another avenue by which to sustain this argument, but ultimately you will be wrong again. Vaccines can and will be adapted as the virus evolves, and remain effective even with variants.

        The world is not going to throw up its hands and say “Well, Bryce was right, he sure told us, never should have trusted those foolish vaccines”. I hope you are honest and tell us when you get your vaccine shots.

        • Rob, fabricating falsehoods is not going to absolve you from culpability.
          You started the current thread with the following post:
          “Rob
          January 28, 2021
          Further evidence that the mRNA vaccines are effective against the South African COVID variant. There are now several studies that confirm this:”

          The link you posted in the hydrogen article was a contorted account of the MAX training by a biased 737 pilot and author. Totally irrelevant to the subject of hydrogen propulsion.

          The fundamental driver for your vaccine comments is the same as from the beginning, that vaccines are an infallible silver bullet solution. You’ve been wrong about that, but won’t let it go. And so we are treated to your continuous insistence that you are somehow right.

          Your misinterpretation of data concerning the variants gives you another avenue by which to sustain this argument, but ultimately you will be wrong again. Vaccines must and are already being adapted as the virus evolves, since they suffer severe reductions in efficacy with variants.

          The world is not going to throw up its hands and say “Well, Rob was right, he sure told us, never should have trusted those foolish scientific articles from experts”. I hope you are honest and tell us when you get your modified vaccine shots.

          • Here is an excellent NYT summary of the testing results for the mRNA vaccines against the variants. Note that it follows closely what I have posted here.

            https://www.nytimes.com/2021/01/25/health/coronavirus-moderna-vaccine-variant.html

            “Experts also cautioned against assuming that a decrease in neutralizing ability meant the vaccines were powerless against the new variants. Neutralizing antibodies are just one component of the body’s immune defense, noted Akiko Iwasaki, an immunologist at Yale University.”

            “In real life, there’s also T cells and memory B cells and non-neutralizing antibodies and all these other effectors that are going to be induced by the vaccine,” Dr. Iwasaki said. Neutralizing power is “very important, but it’s not the only thing that’s going to protect someone.”

            “This is the beauty of the mRNA vaccines — they’re very versatile,” Dr. Iwasaki said. But a new formulation may not even be necessary, she added. A third dose of the current vaccine may be enough to boost levels of antibodies.”

            “So long as the authorized vaccines continue to work against the variants, the challenge will be to inoculate as many people as possible and to prevent the coronavirus from evolving into more impervious forms. “That for me is still the highest priority,” said Dr. Sahin, of BioNTech.”

            Slightly more recent but equivalent WSJ summary:

            https://www.wsj.com/articles/pfizer-covid-19-vaccine-works-against-mutations-found-in-u-k-south-africa-variants-lab-study-finds-11611802559

            “Yet these and other results suggest that the impact of the variants on the shots will be “relatively modest, which is good news for the vaccines,” said Jason McLellan, a structural biologist at the University of Texas at Austin who has studied how coronavirus proteins interact with antibodies and wasn’t involved in the Pfizer study.

            “Pfizer said the “findings do not indicate the need for a new vaccine to address the emerging variants.” The company said, however, that it and partner BioNTech were prepared to respond to a vaccine-resistant version of the virus.”

            Development time for modified mRNA vaccines is 30 to 40 days. They should not require the full clinical trial process.

          • Here is an excellent medical summary of the testing results for the response of the SA variant to antibodies of different origins, both from recovered patients and from several synthetic monoclonal antibody medicaments:

            https://www.nytimes.com/2021/01/25/health/coronavirus-moderna-vaccine-variant.html

            “Researchers in South Africa have conducted a study showing that the novel 501Y.V2 variant of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) that has emerged in the country is able to escape the neutralizing antibodies that are elicited by previously circulating strains of the virus.”

            “The study found that the 501Y.V2 lineage also conferred complete escape from three classes of therapeutic monoclonal antibodies.”

            “Crucially, it is from these same public antibody responses that many therapeutic strategies currently under development have been derived,” writes Moore and the team. “The overwhelming majority of monoclonal antibodies already on the path to licensure target residues K417 or E484 and will therefore be ineffective against 501Y.V2.”

            “This deletion predominates among 501Y.V2 variants and occurs either alone or with an R246I substitution that has also been shown to abrogate neutralization by several NTD-directed neutralizing antibodies,” says the team.

            More recent (today): yet another disappointing vaccine reaction to the SA variant — this time from J&J:

            https://www.cnbc.com/2021/01/29/covid-vaccine-jjs-one-shot-drug-is-72percent-in-the-us-but-less-effective-elsewhere.html

            “J&J says its Covid vaccine is 66% effective, but the single shot may fall short against variants”

            “The level of protection varied by region, J&J said, with the vaccine demonstrating 66% effectiveness overall, 72% in the United States, 66% in Latin America and 57% in South Africa after four weeks.”

            “The new data also comes as U.S. health officials, including Fauci, are concerned that the Covid-19 vaccines currently on the market may not be as effective in guarding against new, more contagious strains of the coronavirus. Moderna said Monday it is working on a booster shot to guard against the South Africa strain. Pfizer and Novavax, a few days after Moderna, also said they will test modified vaccines.”

          • My comments and posted articles were with regard to the approved mRNA vaccines. Those results may not be valid for other vaccines that depend on killed or weakened virus, for which the response is not as broad.

            Also as mentioned many times now, and as indicated in the articles, the antibody response does not represent the full immune response. It’s important for the blood plasma treatments because that transfers only antibody protection.

            mRNA vaccines are known to induce a broader response, including T-cells and B-cells. You may recall the absence of these was an earlier claim about mRNA that proved to be false. Also the reason that efficacies of those vaccines are so high, and why Dr. Fauci is on record that they are expected to remain effective against the SA variant.

            We seem to agree at least that modified vaccines are a potential solution for any loss of effectiveness that does occur. This may mean that mRNA will be allowed as boosters for other vaccines that have lesser effectiveness.

            In the meantime, vaccination programs will continue with the approved mRNA vaccines, as that is the best course of action. I will be receiving the Pfizer vaccine, as the provider I assist has been allocated that vaccine. There are no plans at present to require a booster or modified vaccine.

        • @Rob
          Your statement is not correct

          Your’s was the first post to raise the virus – ‘Further evidence.. ’

          Subsequently Bryce and sPH responded – – Jbeeko then said let’s stop discussion of this, with which I concurred

          Please get your ducks aligned : and please cease to engage sterile arguments, war on everyone is futile

        • @Rob: My post about covid is a response to your covid post. Please stick with facts, not your “alterate reality”!

  18. @ Jbeeko

    With respect the virus is dominant and unavoidable – like the french in paris in 1942 one may perform the basics but hard to discuss plans politics society or even Gabin or Montaigne without reference to the occupation – you know you’re a slave when there’s only one subject to discuss

    It is ‘The’ enemy, and ‘we’ (the people the nation and so on) are fighting a War, etc etc

    Except the virus is not ; moreover has on all accounts won, in the sense it is omni present, and settling in, in the way coronas do, with the intent of winding up much like influenza

    Virus is much more successful than human, been around longer, is very many magnitudes more intelligent and more numerous, can adapt to any form of life, circumstance and living condition

    War, as on drugs, terror and everything else for that matter, only delays a solution or destroys those fighting

    What is pertinent is not this’ war’, already lost, but to take view of the society and ruling class which have performed so uselessly to so much damage : uncover and reform the conditions of production of the virus, to reform health and health ‘care’

    In this way related to ‘climate change’ – waging war on nature is not a long term strategy nor one which will culminate

    Yes, ‘boring’ because there is much ado about very little of any use or purpose : mere scolding, middle class manners, ‘wear your mask Properly ! little boy’, high density urban industrial societies pretending to be old fashioned rural via ‘social distancing’, and everybody spending their every waking hour trying to avoid reality while ordering takeouts

    • Completely wrong ….. the Spainsig flu is a prime example.. smae techniques used at the time ..isolation/ social distancing was really the only one they had.

      Polio was another which had minor epidemics which were contained for long periods till a vaccine.
      Smallpox was eliminated by vaccination about 40 years ago.

      Even flu vaccination has reduced yearly deaths from a normal year to a tiny amount , but plenty dont take a yearly shot…guess what the increased hand washing and mask wearing likely has reduced flu deaths to 1/10 to 1/20 of their recent numbers. Also helping is the message ‘if you feel unwell- STAY AT HOME’

      • @DoU

        Apples and nuts comparing again

        World pop 1920 approx 4 times smaller than today; world largely rural

        Social distancing may be practiced by a small rich % in rich countries, the poor everywhere can not

        smallpox other diseases and plagues are irrelevant – discussion is of coronas

        • Please remind @DoU what’s the state of civilian aviation around 1919-1920.

          In those good old days, a variant from South Africa would probably take months to reach North America and more time to spread around across the U.S. Not anymore.

    • @jbeeko

      I think Coronas, the originals, are still banned due to the old ideological spats – but I may be wrong

  19. Everyone: Let’s end the debate on COVID. Nobody is going to change anyone’s minds and the debate is redundant, over and over and over and over. Just stop.

    Hamilton

        • Goal is not censorship, only avoidance of ceaseless argument between opposing narratives. The truth of vaccines will be determined by usage in reality. There’s never a need to oppose the truth, by either side. Nor can either side alter the truth.

          • Look to yourself first.
            Pursuant to Scott’s recent “ire”, Gerrard and I have refrained for the past weeks from initiating threads on this topic [hadn’t you noticed that?], though we (and others) do comment when the thread is initiated by another. So start with yourself and keep any new “insights” on the vaccine to yourself…other readers here can obtain more than enough accurate vaccine information from medical journals and the general press, without a sugar coating.

          • Scott didn’t admonish me, Bryce. He may have admonished you & Gerrard privately. I had every right to post that link, whether you like it or not. You didn’t like it, and so you attacked. But as I said, the truth of the issue remains, and is unaffected by the attack. As has been reliably the case on this issue.

          • @ Rob
            Scott didn’t “admonish” individuals: he made a generic statement a few weeks ago that a particular article was not about vaccines, and shut comments down rather irately. The undertone/intention was clear to any and all. My comment above reflected Scott’s position — not mine. I’m quite capable of countering any of your vaccine “insights” ad infinitum: just as “truth” isn’t affected by “attack”, neither is it affected by alternate realities. Reading tip for this weekend: do some research on how your new friends (mRNA triggered T-cells) don’t engage if they’re confronted by a protein spike that they don’t recognize 😉

            And I didn’t “attack” anyone: I deliberately used your own words, modified to reveal other widely available data. So, if you interpret that as an “attack”, then you also automatically put the same label on your own posts.

            Doubtless you’ll now rebuff with some jaded, predictable narrative. However, so as to prevent a new litany, I’ll just devote my attention to the other articles here. Have fun!

  20. @Rob

    There are zero warranted calls for censorship – there are infinite bad, foolish, tota….etc

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