Pontifications: Long road ahead, but Boeing will recover

By Scott Hamilton

May 3, 2021, © Leeham News: Cowen Co. called the Boeing 1Q21 financial results “messy” with questions unanswered.

Credit Suisse characterized a “challenging 1Q, though recovery should begin to accelerate.”

My take falls in line with Credit Suisse. It was a challenging first quarter and lots of variables overhang Boeing going forward. But I was struck by the confidence displayed by CEO David Calhoun and CFO Greg Smith going forward. And I’m not one to drink the Kool-Aid by any stretch.

To be sure, many challenges lie ahead for Boeing. Returning the 737 MAX to service has been anything but smooth. New issues popped up that resulted in Boeing (not the regulators) grounding the airplane again. Deliveries were suspended once more.

After 10 years of production, Boeing suspended deliveries of the 787. The KC-46 tanker still isn’t performing as required after nearly two years of delivery delay and limited operations with the US Air Force.

This is not The Boeing Co. of decades past.

Calhoun’s mission

Calhoun’s job is hardly finished, which is obviously why he got another five years approved beyond the mandatory retirement age of 65 next year.

Making over Boeing is a daunting task. Calhoun got off to a very rough start in his first 60 days as CEO, beset by foot-in-mouth disease. Is he hitting his stride now?

It might be a little soon to say he is, but Calhoun is certainly making the right noises.

His closing comments on the earnings call outlining the future engineering and production path is the clearest indication yet how Boeing plans future airplane programs. This part has been hinted at for years, dating to the McNerny era. LNA was the first media to understand this direction after a corporate communications professional told me the Middle of the Market airplane (as it was then known) would be as much about production as it would be about the aircraft. LNA dug into this oblique comment to discover what Boeing’s “Black Diamond” approach was all about.

We take a dive into Calhoun’s closing comment in today’s paywall post.

Not your father’s Boeing

Writing about Boeing during the last 14 years has been painful. Ever since Boeing began to screw up the 787 program—the details emerged in advance of the July 8, 2007, roll out of 787 No. 1—it’s been one bad story after another. Nothing encapsulates this more than one question on the 1Q21 earnings call.

Questions from analysts are generally rather benign. (Once again, Boeing did not allow media questions.) One exception to the benign questions is Ron Epstein of Bank of America. Epstein has been banned from earnings call questions in the past for his pointed probing. In advance of this earnings call, he published a note ripping the governance at the Board level and executive suite.

His question on the 1Q earnings call was just as pointed. It’s reprinted here in its entirety from the earnings call transcript.

What’s the end state?

“You’ve talked a lot about business transformation. What’s the end state? And ultimately, how does engineering fit into that vision? Because to be fair, the 737 [MAX] had issues, the 787 had issues, the 777X has issues, the 747-8 had issues, the KC-46 has issues, Air Force One now has issues and the Starliner has issues. So, how does business transformation fix that?” Epstein asked.

“Well, I’ll remind everybody that the A380, the A350, the A330, the A3…,” Calhoun began.

We’re not talking about Airbus. We’re talking about Boeing,” Epstein interrupted.

But I just want to remind everybody, that they had a little trouble as well. These programs are big and they’re complicated. So, the idea that we fix everything, I’m not sure I can sign up for that. The idea that we’re going to be a whole lot better, I can sign up for it,” Calhoun said. “And the work we’ve done to align our engineering function broadly, everybody inside the company has signed up for that endeavor and feels great about it. The work we’ve done with respect to the safety management system that surrounds that engineering function and which they lead into half of the company. It avails itself to new data to a faster cycle time with respect to how our company processes that data and ultimately make decisions around that data.

“And a reinvestment in the fundamental design practices of the company that will instill disciplines that we just need to get better and better at. Everybody in the company signed up to do this and we’re making real investments in that process. So, I feel very, very, very good about all of that. It does not mean that in a flight test, somewhere along the way, we don’t run into an issue that needs to get resolved. It is the nature of our industry to do big things and do them very well,” Calhoun said.

“Transformation efforts are significant”

“I’m confident that these transformation efforts are significant. I’m also confident on this production stability, which goes hand-in-hand with engineering. We’ve taken actions over this — really hard actions over this course of this year to stop things when we see an issue and get them fixed once and for all. The 787 in Q1 was a glaring example of that.

“These fit and finish issues with respect to the joints in our fuselages were just nagging difficult problems. We applied real engineering talent and expertise to that, [with] new process controls and new lines of communication with our supply side so that we’re not surprised by that stuff anymore and we can eliminate rework loops that ultimately travel with the product.”

Would Boeing and the market expect to see the next product development and introduction go smoother? Epstein asked.

Yes,” Calhoun replied. “Yes, and I expect the next product to get differentiated probably in a significant way on the basis of the way it’s engineered and built and less dependent on the propulsion package that goes with it.”

Airbus did have issues—but no groundings

Calhoun is right, of course, that Airbus had its issues with the A380/350/330/320neo. But none of these airplanes was grounded due to safety concerns. The 787 was grounding for 90 days due to fires. The MAX was grounded by regulators for 20 months and by Boeing over electrical issues.

Problems with the Pratt & Whitney GTF engines and delivery delays from CFM prevented deliveries of the A320neo. Delays from interior suppliers affected the A350 and 787 deliveries at one point.

But apart from Qatar Airways, which is famously persnickety and refused delivery of Airbus and Boeing aircraft at times, no customer declined Airbus deliveries like those on Charleston-built 787s or by the US Air Force and the KC-46 tanker over quality control issues.

So, while Calhoun tried to deflect Epstein’s question, the analyst’s probing was spot on.

Long recovery ahead

There is no question Boeing still has a long recovery ahead. The continuing effects of the COVID-19 pandemic will slow it. Boeing has a huge inventory of undelivered MAXes (400) and 787s (100) to work through. Fixes remain for both airplanes to be implemented. Billions of dollars in debt must be paid down. And a new airplane program must be launched to fix the weakness in the MAX product line.

But I’m confident Boeing will get there, absent any other market disasters beyond its control.

80 Comments on “Pontifications: Long road ahead, but Boeing will recover

  1. “Would Boeing and the market expect to see the next product development and introduction go smoother? Epstein asked.

    “Yes,” Calhoun replied. “Yes, and I expect the next product to get differentiated probably in a significant way on the basis of the way it’s engineered and built and less dependent on the propulsion package that goes with it.” ”

    Smoother than what? MAX, 787 or 777x? This was a really low bar to clear…

    • @Jones

      “Just a follow-up question on that, Mr. Calhoun, please. If you say that engineering is going to be the dominant dependency going forward, why did you cut so deeply into the engineering ranks at Boeing recently?”

      • Thank you, Frank.
        Follow-up questions from people with a functioning cortex are usually very conducive to getting at the truth. Persistent follow-up questions are the best way to expose corporate hot air for what it is. No wonder media aren’t allowed to ask questions on Boeing calls — much too confronting for the fluff generators at the other side of the microphone.

        • The issue is not that things happen on aircraft programs, they do.

          But, there is a whole suite of tools out there that tells you how to avoid the obvious problems.

          Its not that the shift from rivets for grounding to fasteners is wrong, in fact, a rivet is the last thing I would use to ground anything. Its how you could do a ground and find coating in the way. Here in the US a collage course that is actual High School is a 080 level (Senior Collage would be 400 level) .

          In their case what they did was -0400. Its just plain stupid, bad engineer, bad industrial, bad process.

          Equally so he tires to divert on the 787. Its not the fact that those levels of variance with the weaving of fuselage process is going to happen, they know it.

          Its the fact that they did not check it, nor did they have a confirmation that their shims to correct it were right. How is that even possible?

          You change a tire and you go around the whole bolt pattern one last time sequentially (not cross tightening) to ensure you did not miss one.

          • @Trans

            How is that even possible?

            It’s possible because the whiz-bang MBA kids are convinced that they are only making ‘widgets’ at Boeing – generic products like any other company. They think any kid off the street can put together an aircraft and are only concerned with keeping costs as low as possible.

            You get what you pay for.

    • And the scab production line stays open…despite it being the source of the airplanes customers refused. Good thinking…

  2. I’m guessing that they mean black diamond instead of black aluminium.
    Sounds a bit moonshoty. Or maybe just learnings from the 787.

  3. There’s a difference between just stating an intent and actually having the means/ability to achieve that intent. Lots of CEOs formulate headliner goals and then don’t deliver. The more recent technical issues at BA have been caused by very basic and fundamental engineering errors — the type of errors that you wouldn’t even expect from an undergraduate engineering student. Evidently, the engineering prowess at BA has been diluted beyond belief. I don’t see how such problems can easily be fixed in a company that has already dumped 25% of engineering staff, and has a sizable wave of upcoming retirements, and isn’t known for offering particularly attractive remuneration to its non-management staff.
    When it comes to BA, it might be prudent to maintain an attitude of “believe it when you see it”.

    • What you see about Boeing loosing people to the suppliers is true.

      They get a better offer and treated like human beings.

      Let alone the constant shifting and moving, fire in Everett and then say you will ire them back someplace else at a lower salary.

      • >What you see about Boeing loosing people to the suppliers is true.
        They get a better offer and treated like human beings. <

        This.

        What Calhoun seems to be talking about is some
        moonshot-level engineering program- aimed, I'm guessing, at cheapening further the product- after mcB have decimated and demoralized those who actually do that work.

        Hmm, we'll see.

      • @Trans

        You know, my Dad was a machinist. He worked 30 years for an airline and before that he did 10 years for an OEM. He would often relate stories to me about how things got done and I was astounded at how fine the tolerances are in the aviation industry. You are NOT making washing machines, bicycles (or as an MBA efficiency expert once told Boeing people) – widgets.

        Things must fit perfectly and it takes very skilled people to notice the difference between right and wrong.

        Back in the day, visiting the shop wasn’t a big deal. You went with your parent, said hi to the security guard and were allowed pretty much anywhere you wanted and fellow employees were only too happy to explain what they were doing. No appointment or authorizations needed. Different times.

        So much of what he did was a ‘feel’ thing – if that makes any sense. It took years to develop the skill and any new guy fresh from trade school was only allowed to watch and learn, until he developed a touch. Often, he would be called over to different stations/machines, where a veteran would point out something to him:

        “You see this? You see how it’s not fitting? Put your finger there. You feel that? That wasn’t plated properly and it won’t work properly. We don’t pass it through – it has to go back to get re-plated. NEVER send this along, you understand? I don’t care if they need it right away, it isn’t up to snuff. We don’t do shoddy workmanship here.”

        But if you get rid of the old hands, or if they get a better compensation package elsewhere (and trust me – other manufacturers tried to get my father away, I remember the family discussions as a young lad we had on moving) – you lose all that know how that needs to be passed down.

        It is so very short-sighted.

        • Frank:

          I do get the old school and how it worked. But that also is not how its done today (or should not be)

          By feel is too subjective now.

          What you want to do is have a quality control process that is 100%. It can be done by pure high quality (Toyota ) or inspections (which means coming up with a method for instrumentation to confirm)

          But you never put something into a critical process until you checked, measure, confirmed and came up with a system of cross checks.

          Cast Iron boilers are old school but good, you just make it so thick that the quality of the casting is not in question.

          Or like emissions systems, they are so good they rarely fail a test, often pass tests by 50% or better. The overkill approach but better that than so close to the edge that a miner shift will put you over the edge and a huge recall.

          How you deal with any given part or build process is an assessment of what works best in that case.

          Having none, the failure to do so continues to be mind boggling.

          The tool are there, its not using them that is the issue.

  4. Further research indicates that “black diamond” goes back at least 12 years.
    Which programs did Boeing implement it on? Apparently they think that they can deliver NMA in 4 years time. Development must already be well underway.I am nervous about boarding the end result.

    • How far along Boeing is to design a carbon passager aircraft built by robots is a very interesting question. We know how hard it is to teach robots how to build aircraft structures not designed from the beginning for robots. But starting today after a pretty well running T-7A program and evoling the boxes of the 787 to gen 3 to be cheaper, lighter, smarter Boeing most likely have iron birds running with 797 systems and prototype hardware bits and sections for the 797.
      Proving that speed of manuf, quality and cost are optimized to make the managers sure that when the numbers looks right to press the button to ask UAL to pop over and have a look and have a seat in the 797 1:st class mockup and take a flight in a 797 Full flight simulator with its cheif pilots taking a tour each in rang order and give feedback.

  5. “But I’m confident Boeing will get there, absent any other market disasters beyond its control.”

    Would continued exclusion from the Chinese market qualify as such a “market disaster”?
    This link (South China Morning Post, Dec. 2020) suggests that Boeing Defense sales to Taiwan may be driving an exclusion of Boeing Commercial from the Chinese market.

    https://sg.news.yahoo.com/boeing-jet-sales-china-highly-123013514.html

    • @Bryce: I was thinking more of another pandemic, terrorism, wars, that sort of thing. With China developing its own aerospace industry, over time, both Airbus and Boeing will lose market share in China. It’s true Boeing is being held hostage for political reasons by China and this will continue until the trade war and other issues are sorted out.

      • Scott:

        I don’t see it getting sorted out.

        Sadly, China may be hold Boeing hostage for political reasons, but they have a solid basis for doing so.

        Its always best not to shoot yourself in the foot, let alone take a Uzi and ream your foot off.

    • When Americans started a trade war, have they thought of where, when and how to end it??

      • When China stops trying to claim the South China sea off ist neighbours and when China stops its covert stealing of other countries IP. They can take it up with Russia over the stealing of their military aircraft to create shanzhai versions.

        • @Scott: Time to stop posters from dragging discussion away from aviation into politics unnecessarily! Thanks.

        • China and trade wars is relevant.

          China and the South China Sea and IP theft is not.

          Get back on topic.

          Hamilton

  6. Personally, I’m delighted that the industry and the regulator worked through the thermal issues of battery safety, and developed de facto codified standards for battery safety. The work was prompted by the 787 electrical architecture advances, obviously, and it will pay huge dividends (figuratively) for the industry as more and more electrical systems, including propulsion, is gradually being implemented in small and large aircraft.

    I’m 100% confident Boeing will emerge stronger as they work through their various issues. Accidents of various kinds happen in aviation, and they bring about positive change.

    • John B:

      Boeing was forced to accept turning the battery issue over to the RTC, if you want to read a gruesome report I may be able to find that gross incompetence on what they were doing mfg wise (you could not even call it quality control, something out of a Vincent Price horror movie)

      Boeing should never have been allowed to set specs for that battery, the RTC should have been given it from the start.

      And, there are not such things as accidents. Screw up, failures, but anything reported to be an “accident” is negligence at best and often deliberate actions that lead to failures.

  7. Let’s not forget that all 787 with RR engines have had long periods where they have been parked.

    The 737 MAX is still grounded in most parts of the world? It is ungrounded in North-America, Brazil, EU and a few other countries. It is still grounded in Russia, China, India etc.

    • I get China and Russia, I wold be interested in more in depth from India.

  8. New developments in aircraft design and production technology go through their TRL’s with research organisations and suppliers. When technology is ready for implementation, it’s added as modifications for existing programs or combined for new programs. All in a gradual and careful way. This continuous improvement process ensures acceptable risk and investment.

    We usually see the “game changer” mode appear when investment, subsidy and support is required, with all the promising and flag waving that come with it. But I think it doesn’t change the process. Calhoun making clear he doesn’t expect to be able to get new wash bang engines seems to confirm.

    If Boeing is able to build a 150-220 seat NB, 7-10% lighter than NEO’s, with AKH options and able to fit 85-88 inch LEAP and PW GTF improved versions that’s a way ahead.

    Cheaper production might include significant work in e.g. Mexico or Asia.
    A220, NEO, XWB, Trumpism, FAA Streamlining and greed have made Boeing vulnerable.

    • @keesje

      More Headwinds to come?

      Ted Cruz recently published a WSJ op-ed, commenting about corporations who should just donate to (his) political causes, but remain silent on social issues.

      “This is the point in the drama when Republicans usually shrug their shoulders, call these companies “job creators,” and start to cut their taxes. Not this time. This time, we won’t look the other way on Coca-Cola’s $12 billion in back taxes owed. This time, when Major League Baseball lobbies to preserve its multibillion-dollar antitrust exception, we’ll say no thank you. This time, when Boeing asks for billions in corporate welfare, we’ll simply let the Export-Import Bank expire.”

      Aside from the obvious pay-for-play implications he just outed, has he just made life a little more difficult for Boeing who desperately needs every bit of good fortune moving forward and help with funding airlines to make massive capex decisions to purchase Boeing aircraft?

      Boeing is the largest exporter in the US, who is already facing difficulties getting the Max back into service in markets that are huge for them. I’m sure this is not welcome news from the home front.

  9. “Yes,” Calhoun replied. “Yes, and I expect the next product to get differentiated probably in a significant way on the basis of the way it’s engineered and built and less dependent on the propulsion package that goes with it.”

    how much of this is management fluff and buzz, and how much is related to the real-world ? How much of a differentiation can it actually provide against Airbus ?
    Or is this again lots of Boeing PR about techno-gadgets that are announced as “game-changing” but turn out to be an incremental evolution of a far smaller magnitude ?

    To be clear, I don’t challenge the existence of benefits from better info sharing and closer collaboration etc.., but I’m just wondering
    – what is the order of magnitude of the gain vs existing methods which have been continuously optimized for decades ?
    – what proportion of these gains requires an all-new development program, vs what can be retro-applied to existing programs by updating the aircraft and/or its production systems ?

  10. On the subject of innovation in aviation:

    “Lufthansa and BASF Mimic Shark Skin to Improve Fuel Efficiency and Reduce Emissions”

    “Lufthansa Group announced that it will deploy AeroSHARK, a new surface film technology, on Lufthansa Cargo’s entire freighter fleet, resulting in fuel savings and emission reductions.
    AeroSHARK was developed by aviation maintenance, repair and overhaul (MRO) provider Lufthansa Technik and chemicals and materials company BASF. The surface film mimics the fine structure of a shark’s skin, with a structure consisting of riblets measuring around 50 micrometers, resulting in optimized aerodynamics on flow-related parts of the aircraft.

    According to Lufthansa Technik, the drag reduction from the new surface film will result in estimated annual savings of around 3,700 tons of kerosene and just under 11,700 tons of CO2 emissions when deployed on Lufthansa Cargo’s Boeing 777F freighter fleet.”

    https://www.esgtoday.com/lufthansa-and-basf-mimic-shark-skin-to-improve-fuel-efficiency-and-reduce-emissions/

    This sharkskin technology had previously been deployed in swimsuits for competitive swimmers.

    Next question: why didn’t this innovation come from an aircraft OEM rather than from an airline?

    • @Bryce

      I’m sure Lufthansa Technik and BASF would be happy to license the process to other airlines (for a fee, of course) or would be willing to add this skin to other airlines aircraft (for a small charge, you do understand).

      I’m guessing that like the plethora of funky designs we have seen in the past from so many different aviation companies (a lot of which never worked), there are just some things that get over looked.

      Who would have considered looking into swimwear to use in the aviation industry?

    • They’ve been working on so-called laminar flow technology for a very long time. It works in principle, but in practice a significant difficulty is surface contaminants such as bug splatter. I believe the 787 horizontal stabilizer has a vacuum system that ingests the boundary layer in some ingenious fashion. Airbus has tried manufacturing wing surfaces without extruding fasteners, which also promotes laminar flow.

      I’m happy Lufthansa is trying this surface treatment, and I hope it will work!

      • As I recall, Connor used a shark coating on his America’s Cup boat to win off Freemantal, Australia .

        Never used again.

        I think Boeing gave up on the laminar flow stab as it plugged up with bugs and crud.

        I doubt that a coating is going to work in the real world.

        Sometimes a very specific and high cost applications where the upkeep is worth the costs work, but day in day out, no.

    • LH-Technik is not an airline.
      They are MRO. And actually rather good at it.

  11. So Calhoun has said how the future improvements on aircraft are going to be design related focused, as opposed to engine performance gains.

    Does this mean that the much talked about open rotor concept engines are being put on the back burner? Is it too far a leap for the likes of BA and AB to add into their designs?

    • Open rotor is not going to fly because each installation is both heavier to mount than a pylon engine and its aircraft specific (you are stuck with the choice)

      In the lab where weight is no object it looks great.

      Back to real world, its downsides are much higher and they add cost not save it.

      The GTF is not anywhere near the end of its development. P&W could build and all new engine with what they have learned from the conservative approach they took (rightfully so) .

      There are aerodynamic approaches out there that are possible, they will never be the main driver, its the engines that continue.

      But who is going to buy a Truss Braced Aircraft? You can offer the best but a conservative flying public and airline industry may not buy it.

  12. @Scott,

    I wish I could share your optimism.

    But Boeing under Calhoun (and all the CEOs since the merger) have been “Milk the Cow you have” types, rather than “Breed a Better Cow”.

    Their goals have been, seemingly without exception: minimize investment into R&D, declare war on labor, divest core manufacturing capacity and expertise, artificially inflate stock price and get the hell out of dodge before it all comes crashing down.

    They have put Boeing on the same death spiral that McD-D was on, except there is no sucker out there for them to buy with the sucker’s own money this time.

    • You get what you pay for. Black Diamond sounds a little 787 manufacturing-like. It still feels like the MBAs are in charge. But in a little defense of the OEMs, I do think they they’re waiting for the next big technology change to be foisted upon the industry… That’s in opposition to creating it. Boeing and Airbus did not like Bombardier building the C-Series because they felt it was to incremental. Boeing needs to suck it up and build a 10-15% better NMA and / or NSA. I hope Calhoun joins McNerny on his boat before 6 years.

      • My same issue.

        I don’t believe Calhoun is capable of NOT being a bean counter.

        A Super tank takes 20 miles to make a turn and his mentality is that slow.

        Micro managing BCA has come at a cost as has all the negative actions he and Smith took.

        Once you screw something up it takes much longer to correct it.

        • Especially if you have a cash problem, and that explains the major focus on getting the MAX going strong. And per the previous post, Boeing bought McDon., so this time around Boeing could be bought/merged/SPACed/ by a few going concerns but it may be too early to speculate. I tend to think somehow they are going to do something relevant. That’s why they wanted a Duopoly – you can put off taking the competition seriously till absolutely necessary. I bet there’s a course in business school titled that, or, “Maximizing Profits at the Expense of Engineering and Product Development.”

          • to be clear, McD bought Boeing with Boeing’s own money.

            they then pushed nearly all senior Boeing mgt out the door with a golden parachute, started milking the cow 3 times a day instead of 2 and sold the bull to a slaughterhouse. .

  13. What CEO Calhoun said in response to Epstein’s questions sounds like more
    gobbledegook / corporateSpeak to me. I would like to hear some plain talk for a change, myself.

    As for Boeing being on the way back up, actions at this point speak much louder
    that words. Not seeing it so far.

    • Opus pointed out that there has been a change. The 787 production was stopped and the handling of the MAX wiring/groud9ing issue was handled the way it should be (given it should never have occurred)

      We are not seeing the BS, spin, denial. That is a change. Boeing simply recommended that the airlines ground the MAX that had the wiring issues.

      How far that extends? Only time will tell.

      I don’t have any confidence in Calhoun being able to see how an engineering endeavor has to be assembled (or maintained) to be successful.

      So much has been dumped, lost and beaten out of the employees.

      Rebuilding that and getting a new aircraft out the door while fixing the issues that has lead to the 787, MAX, KC-46 and the Space Capsule failures is a full time job for someone who understands more than bean counting.

      It does not have to be an engineer, but it has to be someone other than a bean counter who can lead not tear down.

      BCA needs a president who has independence not under the thumb of Chicago.

  14. For Boeing it’s more about money than about production. Boeing doesn’t have money.
    I want to see one supplier who wants to sign a cheap contract with Boeing after all the trouble they got with Boeing. So a new plane can’t be cheap and who will pay a premium for Boeing quality.

  15. The T-7A and the MQ-25 are supposed to be the first use of the full digital engineering and mfg process.

    Unfortunately, it takes several years for any issues to get into the public domain so you really don’t know how its doing . The F-35 is a prime example where people are giving up on it as its always next year all he problems are soled (one gets solved, 6 more come up)

    Equally how deep is the bench that can do it even if it is successful?

    Clearly in more conventional build, Boeing is failing.

    The suspicion has to be its BS due to the track record.

  16. It’s not just Russia, India and China.

    AFAIK Singapore’s regulator CAAS is still “working towards lifting its suspension”

    “We will need to be assured that all aspects of the safety of Boeing 737 MAX operations have been addressed.” Tay Tiang Guan CAAS Deputy Director General

    “We will factor in compliance with the airworthiness directive and any additional requirements that we may impose, before we lift the suspension on Boeing 737 MAX operations.”

    Apparently they are not in a rush.

    • In Asia Pacific, it’s easier to list the few countries that *have* ungrounded the MAX — namely Japan and Australia. Vietnam and India only allow over-fly, and New Zealand will decide on a “per-airline-request” basis.

  17. Lufthansa has bought 5 (bargain) whitetail 787-9s, and also ordered 5 A350-900s. It already has A350s in its fleet (total order is now 45), but has zero 787s in its fleet up to now. I suspect that this may forbode a future conversion of its 777X order to 787s.

    https://www.reuters.com/business/aerospace-defense/lufthansa-purchase-10-long-haul-aircraft-modernize-fleet-2021-05-03/

    https://www.luchtvaartnieuws.nl/nieuws/categorie/2/airlines/lufthansa-koopt-extra-boeing-787s-en-airbus-a350s

    • Thats Lufthansa ‘group’ airlines ( inc swiss, Austrian, Brussels), may not be in Lufthansa colours

      Theres is no way an 777X can be replaced by a 787 , maybe an A350K, unless Lufthansa is downsizing its long haul planes like US airlines did 20 years ago.

      • Duke:

        I know a 787 replacing a 747 is absurd but that is what many airlines are claiming is happening.

        I think its more a change of structure but you can’t admit it for some reason so you are replacing it.

        • >I know a 787 replacing a 747 is absurd but that is what many airlines are claiming is happening.<

          Guessing that the PTB are expecting/creating much less international travel, in particular, post -"pandemic".

        • “787 replacing a 747 is absurd but that is what many airlines are claiming is happening.”
          Which ones ?
          for Lufthansa is more like Swiss will take the 787 to replace their A340s

          United was late buyer of the 777-300ER , to replace its 747s. Thats what they also did in my neck of the woods. British Airways is getting some more as we speak as the 747 fleet was rushed into retirement. They may even bring the 777-9 into service quicker as the A380 cant work in JFK with the terminal they use.

          • Of course it’s possible to replace (any) larger plane by (any) smaller plane: you simply increase the flight frequency.
            Leeham had a whole podcast on this subject a few weeks ago — detailing how smaller planes generate better average seat mile costs because they can be filled without having to offer discounted prices in order to get the load factor up.

            Most 777 operators don’t have anything near 100% load factor, even with discounted seats. If a 777-300ER has less than 76% load factor, then the same number of passengers can fit in a 787-9.

          • Load factor means different things . Lufthansa and British airways use a lot of space for premium passengers, no need to fill up with cheap seats. You need a big plane to do that.

          • SIA flies an extremely premium-heavy A350-900ULR between Singapore and NY/LA: two thirds of the floor area of the plane is business class, and the rest is premium economy. If demand increases, they’ll just put on extra flights — thus making customers even more happy, because they’ll have a choice of times.

      • Deutsche Lufthansa AG (LHAG.DE) on Monday said it would purchase five long-haul aircraft each from Airbus (AIR.PA) and Boeing (BA.N) to replace older Airbus A340 planes and increase its fleet’s fuel efficiency.

        • Lufthansa’s A340-600s carry more passengers (380) than a B777-300ER (365).
          So, it is indeed possible for an airline to consider a 787-9 to be a replacement for a 777/747-sized plane.

          This recent article on SF makes it clear that Lufthansa is delighted with the delay of the 777X, because the airline estimates that the plane will be too big for estimated traffic until 2024. Also, remember that Lufthansa has already reduced its original order of 35 777Xs to the current 20, “for cost reasons”.

          https://simpleflying.com/lufthansa-boeing-777x-delivery-delay/

    • LH CEO Spohr has stated in public they will take all it’s B779 orders.
      “«Wir stehen zu unseren Boeing-777X-Orders» ”
      https://www.aerotelegraph.com/wir-stehen-zu-unseren-boeing-777x-orders

      They have plenty of A380s and B744s and even B748s to replace and they have high demand routes from FRA to fill those 400 pax planes.

      I have no doubt LH will take all its B779 orders.

      LH group has a huge demand in the 250-280 Pax sector, where B789 fits nicely. All their brands with WB planes – Austrian, Swiss, Brussels, Eurowings and LH itself will be able to operate B789s.
      They actually would need more than 50 B789s to replace all the A330, A343, B767, B772 planes their brands are operating now.
      I guess this was not the last order we have seen from LH group for B789s.

      • You are sure there’re more B789 “white tails” suitable for LH at rock bottom price??

      • Carsten Spohr, like every other airline CEO, will have to adjust his spending pattern to suit his post-CoViD finances. Lufthansa is heavily indebted. 787-9s (especially whitetails) are a lot cheaper than 777Xs.

        • Ask the car companies about ‘adjusting orders’- they would cut back the chips and other parts and then found they were end of the line when the decided to wind production up again.
          Rental companies in US ( and likely elsewhere) are buying USED cars as they dont have enough vehicles in their fleet …and cant get new supply as they are at the end of the car manufacturers ( limited) supply line.

          Airlines are cutting their noses to spite their faces over future orders. I guess LCC ones like Southwest cant believe their luck

          • @Duke

            Let’s say that you’re right. Within a year, all the airlines CEO’s were off base and ALL travel returns to pre-2019 levels. International, domestic, business – everything.

            What’s the worse thing airlines would have to do?

            Go into storage and grab all those aircraft that they parked in the desert and drag them out. Call up laid off pilots and get them up to speed.

            Oh….and raise prices. Supply and demand, you see. Southwest doesn’t fly everywhere, do they and at last count, they had 117 – 737’s parked.

  18. The interesting thing that was said was: “Yes, and I expect the next product to get differentiated probably in a significant way on the basis of the way it’s engineered and built and less dependent on the propulsion package that goes with it.”

    So, what he’s basically said is that the next Boeing isn’t going to be benefitting from any cutting-edge engine improvements. Meanwhile, there’s every sign that RR will get Ultrafan on to the next Airbus (or as a NEO on something already flying). H2 is being carefully considered too.

    In this day and age, fuel burn is becoming increasingly important, and it seems Calhoun hasn’t got the ambition to be the best at it.

    That leaves Boeing’s future products vulnerable to market-altering tax policies related to emissions. The cheaper build price Calhoun is apparently aiming for might be rendered not quite so significant to airlines buying aircraft if there’s politicians aiming to meet green targets.

    Ok, Boeing might simply be restricted in ambition by what GE can or cannot do, or by not being #1 in RR’s priority list, or something. But that’s a huge problem if that’s the case.

    • I am not tracking the point.

      Aircraft are dependent on propulsion. Neither Airbus nor Boeing makes engines.

      The Ultra Fan is just a different mfg doing what P&W did, a GTF.

      If you can bring build price down and maintain the specs, there is nothign wrong with that.

      The Ultrafan is subject to those same tax polices, P&W is farther along on understanding GTF as they have real world engines. They have designs ready to be tested. They are not going to build an engine until there is something to build it for.

      The question of Calhoun the being guy to make a transformation is certainly well deserved doubt.

      • You arent going to have what ‘someone else did on gearbox’ with a 50 MW and 140 in diameter fan.
        The GTF was in common use before Pratt did one, after some difficult years, because everything changes when you scale up.

      • Ultrafan is a bit more than just upscaling P&W’s excellent engine. Thin CF fan blades are a pretty significant thing in their own right; lighter than Ti, not obstructive to core flow (a very important point), and aerodynamically far easier to optimise than Ti (more freedom to shape blades just so). I think RR are headed to a much bigger engine than P&W’s modern range, so they’re going to need a pretty impressive gearbox.

        Agreed, the same tax regime will apply, but my guess is it’s likely scaled according to emissions, rather than averaged out per passenger mile regardless of aircraft type. Optimising everything would then be important, which is what RR are doing with Ultrafan. Saving weight elsewhere in the airframe is another way of achieving that, but that likely requires CF fuselage and wings. I don’t have Boeing pegged as being up for that at the moment, but I may be wrong.

        WRT Boeing’s future, I guess all that everyone is talking about really boils down to the following; does the USA want a manufacturer of civil airliners with modern designs competing across the board, or not? If yes, an awful lot needs to be changed than simply a few optimistic words in a company call.

        • One thing that is not talked about much wrt a GTF is safety in the case of a blade out incident. GTF blades have much less energy in them. By a factor of *weight reduction)*(speed reduction)^2. Since the GTF fan runs at about 2/3 slower the energy in the blades is less than half that of the un-geared version. This should make it much easier to create a containment system for them.

          • jbeeko, that’s a pretty nice relationship! Easier, lighter, and so on.

            Does the slower rotational speed translate into a deeper root chord for the blades? That’d mean that the axial load is more easily carried, which could result in a weight saving and aerodynamic improvement too.

            I’d love to see some FEA load modelling for blades. There must be some complex relationships between axial and radial loads…

  19. This comment section can never bring any new material to a Boeing article. Please let Calhoun do his work, everybody is an expert on strategy and transformation from the outside.

    • >This comment section can never bring any new material to a Boeing article. Please let Calhoun do his work, everybody is an expert on strategy and transformation from the outside. <

      How has letting Calhoun's ilk "do their [MBA] work" been working out for failing-by-all-appearances mcBoeing for the last fifteen-plus years; for that company's workforce (my particular issue); and for most of us down in the 90% ?

      Sounds like another discourse-policer to me: "

      • The big difference? They had nothing to prove. Now they have everything to prove. Human beings are very interesting characters. Calhoun may not have given a damn as a board member and I am inclined to believe so. Calhoun as CEO has much different reprecautions for his legacy especially at a time like this when Boeing needs to be refocused. Do you think he doesn’t know what needs to be done? Of course he does. Will he do ALL of it? I don’t know. But he will at least do some of it. The worst thing of McBoeing like you call them, happened. And now In as much as people go on about aerospace engineer as CEOs. That doesn’t do crap for anybody. While Dennis and Greg were stock buying. Tom Enders (not an aerospace engineer by any stretch of imagination) gave Airbus the 320neo and pushed the 350 market share. At a time like this you need strong decisive leadership, leadership that will listen to necessary stakeholders and make tough decisions. Let’s not forget Boeing is facing both their own crap AND economic downturn. Trans has said he doesn’t believe in Calhoun and that makes 100% sense. He’s an MBA, PE & GE guy. That’s Boeing’s “disaster” mix, yes until they were laid bare on their ass. Thing about it is, those same guys can be very good at turning companies around. And from me you can see the leadership quality difference between Dennis and Calhoun. Like night & day.

        Now let me not drink too much kool-aid. He might be like the other guys. But from what I’ve seen and the way he’s handle issues. He knows HE cannot afford to be, Boeing cannot afford to be either. So quite frankly, I resonate with Scott in saying they will bounce back, they know what they need to do. Their manufacturing transformation will be a tremendous achieemenr if they can get it done relatively smoothly, but even if not. It’s essential for aviation. Propulsion efficiency step changes are not as wild as before, with increased efficiency comes reduced durability so aircraft manufacturers now have to focus on the frame. Engine manufacturers are tired. So we will just have to see

        • Let’s hope. Biden is also past retirement, is in his last job, isn’t in the media all day looking vital, but seems to be making necessary changes. Ignoring the dogs barking in the distance.

  20. Rolls royce can be call the no 3 engine builder at the moment. Ultra fan is a gtf. Only Pratt have a gtf in service.

    • RR and GE are the only two manufacturers in the world that make big widebody turbofan engines, P&W are not in that market, so technically, RR is at No.2. RR is absent in narrow body market.

      GTF is not new concept and P&W definitely did not invent it. There are other manufacturers that made and sold (and in-service) GTF engines prior to P&W (Lycoming ALF 502/LF 507 and Garrett TFE731). Additionally, RR and P&W jointly developed the GTF for a period of time before P&W went on to doing it themselves. P&W has an advantage over RR that they have engines flying in real word providing real time data.

      • Also RR is so far as anyone knows the only manufacturer of large engines looking to bring two or three significant innovations to large engine design.

        GE seem stuck on simply making things run fractionally hotter. If they’ve got a large R&D programme running they seem curiously successful about keeping it quiet. I know they bought P&W’s gearbox manufacturer fairly recently, but to no apparent R&D purpose.

        RR have *thin* CF blades and are aiming to make it a GTF too. The third thing they have looked at is variable pitch blades. Any one of these will help set them apart from GE, two in the same engine would be significant.

        RR seem content to spend big to win the future. GE less so. GE may surprise us all but they’re leaving it pretty late

      • P&W did not develop GTF with RR. They were partners on the V2500. They refuse to share their tech with RR. Rolls decided to sell their shares of V2500 to Pratt. The single aisle engines is 80-85 percents of civil aircraft engines. Pratt is the maker of PW4062 which is a wide body engine.

  21. Synoptic of aircraft design I stumbled over a few days ago, nostalgia..

    https://media-exp1.licdn.com/dms/image/C4D22AQFA2GQNCGELJA/feedshare-shrink_800/0/1619376880111?e=1623283200&v=beta&t=hqV9ct1HMr8nINpzIzXY1bwJBTzTjuDIKH5gLil9XLE

    What I like to do myself is collect lots of aircraft data in excels, to do some basic calculations and discover correlations & use those to do predictions. Kind of harvesting the hard fought optimizations of specialists all over the world 😀

    You notice there are few game changers, it’s an evolutionary business.

    • Realistically there are seldom if ever any true game changes.

      Maybe the Transistor.

      Most changes that look to be sudden are things evolving and then someone finally getting it right or putting several together.

      The Model T comes to mind.

      Aircraft have always been features used part here part there then are finally combined into a success (DC-3) that sets a pattern.

      707 would be another one. B-29/B-47/B-52 and combined features into a commercial success.

      787 was an adaptation of CRFP into the existing aircraft hull form.

      There may be hull forms that can be made to work with CRFP but the pylon mounted engine looks to be a given for some time.

  22. Into the category of airplanes that flew but not far is the Falcon 30.

    An enlarged Falcon 20 aimed at airlines. https://www.airliners.net/photo/Dassault/Dassault-Falcon-Mystere-30/1895746

    I’ve mentioned Dassault’s Mercure airliner, a flop because its small range limited versatility, it was just an enlarged 737 in concept. Apparently a good design in detail, Air Inter flew 11 in regular service for many years. (That’s all 11 that went into service, no more built beyond them and the two prototypes.)

    Earlier the government owned Nord Aviation produced 110 of a high wing turboprop in 30-seat class. which is about DC-3 capacity. The Nord 262 was a nice little machine it seemed to me when I was close to it being worked on at Pacific Western Airline, BC Airlines used it over the mountains of BC (pressurized design). Allegany Airlines flew a version with P&WC engines instead of the Bastan VI (which required special knowledge), called the Mohawk 298. May still be some 262s in military/SAR service in Europe.

    The Nord 262 got publicity when one landed in a strawberry field near Vancouver BC airport after its remaining engine quit. It turned back from way east, on a positioning leg, when one engine became troubled, when the other engine quit pilots aimed for a dark area between lights of houses at Christmas. Skidded to a stop in the not-huge field, beyond which was raised Number 1 Road. Jacked up, gear extended, and towed out to a road. I forget how it was transported through the city to the airport (perhaps towed over a north dike and barged). I forget the cause of engine problems.

    Around the time of the Falcon 20 was the government owed Sud/Nord cum Aerospatiale Corvette, akin to the Cessna Citation 500, only 40 built. Market acceptance was harmed by crash of the prototype in stall testing.

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