By the Leeham News Team
May 5, 2022, © Leeham News: Boeing is moving the corporate headquarters from Chicago to Arlington (VA) (a Washington (DC) suburb), the Wall Street Journal reported. The signs were there for all to see if you were looking.
Boeing closed its headquarters in Chicago as the COVID pandemic expanded. The Illinois/Chicago tax breaks expired. Key corporate communications people relocated already from Seattle to Washington, including Bernard Choi—whose duties expanded from oversight of Boeing Commercial Airplanes communications to the corporate level. There is an under-utilized Boeing building in Arlington.
Already under financial pressure because of the 737 MAX grounding in March 2019, the pandemic made things much, much worse. With no orders flowing into Boeing Commercial and few deliveries after the pandemic grew across the globe, Boeing’s cash flow took a huge hit. Then 787 deliveries were suspended in October 2020 and have yet to resume.
The Department of Defense began awarding a lot of contracts to Boeing. LNA doesn’t follow Defense closely, but optically, it seemed like one contract after another was flowing Boeing’s way. Relief was granted this week by the Air Force and funding fixes to the remote vision system on the KC-46A tanker, a Category 1 (the highest level of concern) item on Boeing’s troubled tanker program. The Air Force secretary made it clear a few weeks ago he prefers to award Boeing a sole-source, directed contract for up to 160 more refueling tankers rather than open it to competition with Lockheed Martin-Airbus.
These moves seem designed to fund Boeing to keep it afloat while Boeing Commercial still sorts itself out from its disastrous era, which will take several more years before BCA returns to pre-MAX crisis levels. And more DOD contracts are expected soon.
Being down the block, so-to-speak, from the Pentagon, and across the river from the Hill (Congress) makes all the sense from a corporate perspective. As for impacts on BCA: Boeing hasn’t been a Seattle-based company since 2001, so this move should have no impact.
But what the greater Puget Sound area does need to watch is what happens to the next Boeing airplane (NBA), whatever design it takes. There is a lot of free space in Everett now that the first 787 assembly line is history. The 747 assembly line closes for good this year. These bays, next to each other, offer lots of space for a final assembly line for the NBA. But there is no guarantee that the airplane will be built here. The Everett plant is heavily unionized, Washington State is an expensive place to do business and Puget Sound is the priciest in the State. Union contracts are up in late 2024. One assumes Boeing will leverage the NBA for more concessions from labor. It’s a recipe for locating the NBA in another state.
Boeing is headed for a permanent single-aisle market share of 43% against Airbus in the heart-of-the-market A320neo vs 737 MAX sector.
Even as Boeing works to recover from a 21-month grounding of the 737, future production rates announced by both companies and information from the supply chain demonstrate Boeing’s disadvantage.
Both OEMs face challenges with the supply chain ramp-up. Boeing has the added headaches of slow certification of the 737-7 and 737-10. Airbus is going to run behind for certification of the A321XLR.
When the A220-300, which competes with the 737-7, is added into the mix, Airbus gains another point in the single-aisle market sector.
Certification of the MAX 10 by year-end, a Congressional mandate for certain types of authorization including the MAX 10, is in doubt. Boeing reportedly is seeking Congressional action to extend the deadline for the MAX 10. Boeing wants to deliver the MAX 10 to customers next year. If the airplane gets caught in a certification loop, there’s no telling when it could be delivered; 2024 is as good a guess as any.
And speaking of certification loops, this appears to be what’s happening to the MAX 7. Certification of this airplane was expected months ago. Delays, for reasons neither Boeing nor the FAA has identified, have been so long that Southwest Airlines swapped 40 orders to the MAX 8.
HOTR is told that the FAA is essentially reviewing “everything” that was done previously and through the flight testing while the global MAX fleet was grounded. There is no hint when certification might be forthcoming.
Airbus announced Wednesday that certification of the 4,700nm range A321XLR will slip from 2023 to 2024. This confirms what had been circulating in aviation circles for months.
The new, integrated fuel tank, which replaces up to four auxiliary fuel tanks, is designed in such a way that Europe’s regulator, EASA, has concerns about fire in the event of a crash. The FAA expressed similar concerns. Airbus’ redesign will add the empty weight of the airplane, which reduces range. Airbus is working to regain the lost range. The redesign adds to the certification timeline.
A bunch of interesting news today; thank you.
That new DC location for Boeing should prove convenient. 😉
This is a very good write up on NATO. Relevance is Boeing is inexorably tied up with its defense business and unless it or BCA is spun off, it will continue to be.
Even a spin off and the E-7, P-8 and KC-46A still links them.
@TW Interesting article. So much in the News these days has such complexity that the mainstream media has neither the initiative or inclination to fully inform the public past the sound bite or headline.
I think we should all follow- and carefully!- sites like the neoliberal, ruling-class-owned Guardian.
We’ll certainly “see how it goes..”
I think we all should take well written material and evaluate it on its merits.
I follow right leaning publications as well. I may not agree with their view, but that does not mean that people do not feel that way.
I diverge at Q Anon and election conspiracy theories. I have a brain, I used it to make a living for 55 years or so.
I can sort through material as to how soundly its based on and if there are variances that do not track.
We should all do that.
Boeing defense is losing money and likely will continue till the current contracts are run off. Keep this in mind.
Boeing defense is loosing money on KC-46A and the T-7A (for now)
They are making good money on P-8, E-7, AH-64, F-15, F/A-18 and a number of munitions supply (all top grade kit)
KC-46A looks to extend another 15 years, T-7A has huge upside and as I keep telling you guys, US procurement allows a contract to be extended if its at the same or better price.
And if Boeing BCA is to be saved, digital design aka T-7A and MQ-25 will be a huge part of that.
-> “US procurement allows a contract to be extended if its at the same or better price.”
Lol. Do you know how much material/labour price has jumped since BA’s bidding???
Have you looked out the window?
Strangely missing from your money losers list:
-> The write-offs for the tanker, T-7, MQ-25, and Air Force One suggest a bottomless pit.
Why don’t you look at the big picture??
Scott, always appreciate your insight and deeper level analysis of Boeing (aka McDonald-Douglas) than is usually depicted in other news outlets. Is there any discussion/consideration to Boeing being better off if broken up or whole divisions being spun-off to unlock greater shareholder value? We see delay after delay, year after year; especially in the commercial division. Management appears inept with a product line-up that is in disarray. With no solution coming from the inside, perhaps another company could clean things up and fund a better line-up.
There has been speculation among Wall Street analysts and Richard Aboulafia of splitting up Boeing. Depending how you look at it, this would either be spinning off Defense or spinning off Commercial.
> There has been speculation among Wall Street analysts and Richard Aboulafia of splitting up Boeing..”
That’s a juicy tidbit, there..
Don’t read too much into it. Boeing is weighing selling off another line of business before Defense, Commercial or Services, but nothing may come of this.
Well Calhoun messed up BCA, he messed up defense so its all worthless (well lets not forget the Capsule and rocket)
I think he should retire and then he can only mess up golf courses
Calhoun is from the GE-Welch school of management which seems enamored with the conglomerate business model.
Aboulafia pointed out that GE is being broken up, but GE brought in a CEO from outside, no one from within would have done this.
In the case of Boeing, Calhoun is more of an agent of continuity than change.
More Calhoun is the school of slash and burn.
Perhaps Boeing should spin off Space, maybe someone else could do a better job on Starliner?
Not that long ago it was looking like Starliner would beat Crew Dragon into space with a crewed launch … then in 2020 Crew Dragon demo-2 launched, followed by four operational crewed missions so far to the ISS and two other crewed missions for SpaceX. Still waiting on Starliner.
Boe-OFT 2 may happen this month, that appears to be the plan, will it actually launch this time, how many new issues will be found?
How big a role do Boeing play in SLS? SLS also due to lunch this year (August), let’s see how many issues turn up when it does launch.
It’s not 1960 anymore, there are much better ways to get to space (no let’s throw most of the rocket into the ocean every launch, s***w the environment & cost). SLS is a Black Hole of a money pit.
If you want to build a Moon base, you can’t do it at 5 to 10 tons a launch (Dynetics/BO) and with each launch being over a Billion Dollars, if you’re throwing away the launch vehicle each time, you can’t produce SLS at a rate that allows you to build a Moon base in any sensible length of time.
SLS is about employment and money, it’s not actually very good as a vehicle for space exploration IMHO.
“Here’s to the crazy ones … because the ones who are crazy enough to think that they can change the world, are the ones who do.” – Steve Jobs.
The fully reusable SpaceX Starship should do its first orbital test flight in May 2022 and should be capable of placing 100-150 tons into low earth orbit. The disposable SLS should perform is first orbital flight in August 2022 and is to be capable of 95 tons. SpaceX has been getting up to 9 uses out of each Falcon9 booster. In the case of Starship the entire spacecraft (the super heavy booster and the Starship final stage itself are reusable.
Hello Mr. Hamilton,
Re”The Department of Defense began awarding a lot of contracts to Boeing. LNA doesn’t follow Defense closely, but optically, it seemed like one contract after another was flowing Boeing’s way. ”
One you did not mention is the E-7 being selected as the AWACS replacement aircraft. See the excerpt below from the 4-26-22 Defense News Article at the link after thee excerpt.
“WASHINGTON — The Air Force announced Tuesday it will replace part of the E-3 Sentry, or Airborne Warning and Control System, fleet with Boeing E-7 Wedgetails.
In a release, the service said the decision to go with the Wedgetail was based on market research and that it is “the only platform” that could meet all of the Defense Department’s requirements for tactical battle management, command and control, and target tracking in time to replace the aging E-3, which dates back to the 1970s.”
There are a lot of programs and contracts I didn’t specifically name. E-7 is just one of them.
I do follow defense closely and some things are clear.
KC-46A: When it was a level playing field, Boeing won the contract by 10%. Contractors call it leaving money on the table, usually its a few percentage, 5% is considered we want it at all costs. 10% is a bargain, You get an extra tanker for every 10.
You can guess that the USAF offered Boeing a carrot, give us all we want on the Vision system (vs the spec) and you get another 160 tanker order. That is a win for both sides.
KC-Y: I have told people repeatedly, contracts can be extended if you get the same terms or better. Ergo, the A330MRT LMX was not going to see the light of day before 2030 at best and more likely 2032.
The KC-46A can have added tanks, more of them, less offload. But its a proven lower cost tanker. LM argument was it had so much better that it was worth that cost. A military adage is perfect is the enemy of good enough which is what the KC-46A will be.
The USAF changes its mind more often than I change my underwear (ehhhh) which is once a day.
All the posters that bought into the hype of the LMX just don’t know the USAF or US procurement (god knows I try to educate them)
T-7A: Again Boeing was low cost by a huge amount (30 at lest and close to 50% I believe).
I have posted this as well, the T-7 is a sandbag. Its thrust gives it at lest Mach 1.5 and maybe 1.7 (depends on the aerodynamics).
Why does that matter? It turns it into a Light Attack and or Light Fighter (Brazil would be way ahead with a T-7 vs a contested airspace Grippen E they never will need (well unless they ship a squadron to Ukraine)
USAF needs an adversary for training that is 5th Gen. The T-7 fits that slot as well. Also a cheap 5th Gen aerial trainer for the squadrons, it fits that bill wonderfully.
I know people think I am nuts, but they flew T-33 in Alaska until 10 years ago just for that purpose. It also kept people out of the cockpit that you did not want in a F-15 etc but needed to maintain some proficiency. You can put a safety pilot in the rear and keep the General out of trouble.
E-7: It suffered severe issues, but like the A330MRT, those were worked out.
The AWACs is old tech and they are having to keep two for them to be sure one is available.
No one makes an E-7 equall. There are some less capable types out there, but the E-7 is the only viable option as the USAF painted itself (and the taxpayer) in a corner with not keeping the AWACs viable (Japan uses the 767 and updated variant of the radar system)
You will note that Boeing did not get the F-35 contract nor the B-21 bomber. There is some picking and choosing to keep viable contractors for big projects. Its the price you pay.
Boeing did a service with the T-7 as it keeps them in the military aircraft business and able to bid which keeps costs down.
Otherwise you have an A400 that cost as much as a C-17 and can’t do half the missions the C-17 can. Germany has a Mobile 155 mm SPA that has all sorts of issues (the US SPA aka the Paladin is half the weight and works fantastically). the Pzkw 2000 is an automated wonder that has issues.
A Paladin that works is worth a dozen Pzkw 2000 that does not.
None of this is going to change with Boeing in Washington. So is LM and Grumman. Chicago is frankly a stupid place for a aerospace Giant to be (so is Washington but its warmer!)
Germany is buying P-8 (no one makes an equal) and the F-35 (and Chinooks). Because its good stuff that does the mission.
The US needs to maintain an industrial base (ship building is a real issue for military hulls). So keeping Boeing viable while benefiting that need is not a bad thing. Its not a commercial thing.
The flip side is the worst case of Germany that has an inept and run down military that can’t get out of its way. Those decisions have consequences and you don’t ramp up a capability in under 10 years.
No one knows when Australia gets its Nuke boats, its 10 years away as it insists on local production and service.
Flip is they can buy C-17 (could) and M1 tanks and have the latest greatest capability now (E-7 as well).
Theres been further update on the earlier DOD release about whos paying for RVS 2.0. Its seems its the Pentagon
AFair 10+% cheaper was the threshold were no further product comparison woujld be done.
Good points all.IMHO its the Gillette( razor)method of sales,
Provide the razor at cost -or less- make the big bucks on future parts and service and upgrades for the next 50 years or so.
Well that is all Boeing can count on now (well and it has another 170 tankers to defer the expenses across so it may work out)
An update to this and so our EU freidn can understand it.
Under a fixed price contract, the USAF has to pay for something they specfried that was wrong. The boom was one of those items. The recoil (shock aborsing) spec was wrong. Boeing built it to the USAF specifation and the USAF found it was too hard. They paid for that fix (or are paying for it.
The Vission system has two aspects.
1. The boom visual system itself, Boeing screwed that up and they are paying for that part.
2. Panoramic part that picks up the surrounding area outside the aircraft being fueled (situational awareness item). The USAF specified the equipment and they got it wrong.
Boeing will supply the sensors and wiring, the USAF has to pay for the higher quality panoramic displays that can utilized the sensors (sensors are better than the specified screens)
If Boeing was not loosing money they might just take care of it, but as they are loosing money they by contract have a right to have the USAF pay for its screwups just as Boeing has to pay for its screwups.
That is just the nature of the beat.
Airbus is having to pay for the A350 paint and grid issues, as well as fixes to A350 software that looses elevator control (can you say MCAS) or the A320 software that dumps the nose in some go around configurations (can you say MCAS?)
Not defending the MCAS, it was a horrid and criminal aspect, but the reality is that there are those types of issues all the time that they get away with and only time proves its a problem and what do they do? They have a work around until they fix it (sound familiar)
The AHJs paly with peoples lives by gambling pilots can deal with it.
So we have a safe 787 that is grounded (if the shim and fuselage problem are not both there) but a software problem that can cause a crash gets a waiver until they get around to fix it.
The A320 had one that they had 5 years to fix (my wife flew one in that time period and no I was not happy)
Anything that has a possibility of safety of flight should be grounded until its fixed, period no matter who it is.
All 787s with RR engine should have new of fully overhauled engines on both side before they were allowed to fly.
-> we have a safe 787 that is grounded
That’s alternate reality.
The 787 are grounded because BA has to prove (to FAA’s satisfaction) that the 787s are up to what’s in the spec sent for certification and are safe to fly.
European’s have no problem to make A330 MRTT works by not following Americans’ trial and error methodology.
No wonder American’s defense spending is sky HIGH!!
That would be wrong on how safe the 787 is. Currently they are allowed to fly with a shim issue or a fuselage issue but not both.
If they are safe then Boeing was far to specific about the tolerances and those could be relaxed.
The wing is over build as well, it did not break at (155%?) and they saw no benefit to going further (whether the risk of shrapnel damage to equipment was valid or not, it would be good to know so you could reduce the strength of the wing, save material and weight and still meet the 150%)
So its not s safety issue its a build cert issue. Boeing could re-apply for a lower spec on the build, but that would take years. Easier to comply.
Quality vs quantity.
There is a judicious amount of fiction in your post.
How does B handle their on occasion massive paint issues on the 787? they have press protection but nonetheless …
( rather strange pics “787 in mummy wrap” have been traded here )
“All 787s with RR engine should have new of fully overhauled engines on both side before they were allowed to fly.”
And GE engines for 787 and 747 should have been grounded after the NTSB investigation
One rule for ‘them’ another rule for ‘us’
Sadly you take things out of context, first that is a 2012 article and it calls for inspections, nothing wrong wit that.
RR quickly found the issue on the Trent 900, put a fix in and it was a done deal and I am good with that.
RR had repeatedly made predictions on their failing Trent 1000 engine and they had two known bad engines on wing.
That is not acceptable and its a whole different ballgame.
You and Bryce should get together and have a session for out of context comments.
Sadly at one time you have good comments and while I disagreed with many, they had support and reasoning behind them.
-> “Currently they are allowed to fly with a shim issue or a fuselage issue but not both.”
1. BA’s production records are sketchy at best (per FAA);
2. there are no inspections, so how can anyone claim that those flying can’t have both?? The best is no 787 crashes before inspections are due. All hang on a thread …. to be continued.
P.S. Remember that BA kept boasting its 737 had the best safety record until the shxt hits the fan.
Continued USAF support for the KC-46A fits into a pattern that has clearly manifested itself in recent years: throw good money after bad…and hope that, if flogged enough, the dead horse will eventually stand up and run.
Comanche, Littoral, Zumwalt, F35, KC-46,…
At least throwing good money after bad help inflate military spending and ensures it meets 2% min. spending. Setting a perfect example of what not to do.
Can you say NH-90?
How about the hugely over priced and under capable A400?
GL to the poster who says new sub built in Australia would only be 10 years AWAY.
That’s even sooner than what they signed up with the French. Hahaha.
US or UK will sell or lease one of the retiring LA or (whatever class the UK runs).
Reality is the US should build the boats and setup the service in the meantime. If Aussies need (and they do, Chineese are in Solomons now) then they need to get with the program.
What is the price of an A330MRT and why did Australia take 5 years to get FOC for theirs?
More KC-46A flying than A330MRT at this point.
If Australia wanted to get subs quickly, they could have settled with an existing conventional design from Germany or an existing nuclear design from France. Choosing France to develop a completely new design was not exactly a clever move.
But the joke clearly is on France. They used their intelligence agency to win the contract. Karma. Germany had quite the laugh about the development.
“More KC-46A flying than A330MRT at this point.”
busy with goalposts, I see.
Fully usable as tankers? I think not.
Look at the delays the 767 tanker customers Italy and Japan experienced “some time” ago.
KC-46 delays seem to be a continuation of those manufacturer intrinsic vagaries.
-> “More KC-46A flying than A330MRT at this point.”
More alternate reality spinning.
How many issues are still outstanding for KC-46A vs A330MRT??
When will KC-46A finally declared fully operational??
Won’t it be better if the USAF has 10 functional A330MRT that works than 30 KC-46A lying around??
Stop your mindless spinning.
Recycling retired submarines would be perfect, especially if the Aussies are tricked to pay for them. Perfect to inflate Australian’s defense budget.
You guys are a hoot.
De-Nial is a River in Egypt!
FYI: Australia already has diesel electric subs. You don’t get the vast distances of the Pacific, clearly you are into Med thinking which is a small pond South of Europe.
They could slip in an Independent Propulsion System. But you use that up in a week or two.
A retired US Sub is like a retired KC-135R, perfectly maintained.
They are better than anything Chinese or Soviet.
Diesel Electric are sneakier but they don’t have the speed a nuke boat has (25+ knots under water)
So buying a short range boat from Germany would be stupid.
Buying a boat from France that costs as much as a nuke boat is also stupid as you get far less capability.
You want to know who the Aussies went to when the Collins class CIS failed so miserably ? Yep, the US.
We have our problems, but we also have some really first class boats (and other war machines) and we maintain them!T
They are retired because they need costly and time-consuming overhauls.
Mark my word.
Put down your rosy glasses.
“Heading for Permanent #2” has a ring of complacency. Years ago, Boeing engineering executive Walt Gillette said Boeing and Airbus would have a [permanent] duopoly because of the “1/n distribution,” as if market share followed a natural law. The 1/n distribution has absolutely nothing to do with market share in commercial aircraft.
Moving headquarters to DC has a sort of logic to it, if you have no vision other than saving on rent and getting life support from the Department of Defense.
I’m not sure the “permanent 43% market share” for Boeing
in the NB segment is well-supported.
Let’s see how it goes over time- recent BCA history, and recent Boeing PR, is does not promise much.
This old quote keeps coming to mind, WRT Boeing and so many other entities, these days:
“Don’t listen to what they say; watch what they do.”
Yep, but they have a sound base, they just need good management.
Eventually they will get it, all those losses get the CEO the stink eye.
$60B in debt, severely diluted revenue, and continuing unexpected costs is not “a sound base”…
Sure it is. The US is 4 or 5 trillion in debt and we are going strong!
The US is 28.5 trillion in debt.
When interest rates were low, 17% of all federal income was spend on loan interest. Now that rates are rising, the loan burden is becoming insupportable.
Long term bonds pay out at a fixed (and low) rate right now.
Got my numbers mixed up , rounded it off to 30 trillion.
The US government issues new bonds every week as older ones expire. Billions of dollars worth. 2 year, 5 year, 10 year, 30 year. All at higher interest rates than the past.
Wait till the interest rate goes up.
That’s why the U.S. is so eager to freeze Russian bank accounts.
Deepwater Horizon litigation
printing money and buying tangibles abroad.
all designed to bring extra money into the US domain.
After Elon finishes buying Twitter, he then can privatize Boeing
Why would Elon want to buy BA?
He’s not interested in “old world stuff” — especially not when it’s on its knees.
Boeing fired many or most of their seasoned engineers, I think. Have you read Scott H’s
‘Air Wars’ yet?
I don’t see Boeing as presently having a “sound base”, myself. That company has
been financialized and accordingly hollowed-out, as far as I can see.
Adding: TW’s avuncular-but-clueless™ bit is wearing a little thin, I think.
Boeing has a “sound base”? On what planet?
“Prosperity is just around the corner.”
Not clueless, just a reality check for others venting without basis of fact.
737 and 787 are either successful or will be down the road. Yea a lot of money gone and they may just break even, but its money spent and if you get revenue, that is good.
777X, yea that is open. All they need is some vision and a new aircraft and they are good again (something down around an A321)
767 is going strong.
Military they have the F-15, FA-18, AH-64, Chinook, V-22, KC-46 (can you say 160 more? sure you can) , T-7 (500 to 1000 before that program is done) , MQ-25 . E-7, P-8 and a host of munitions (munitions are currently in top demand)
They have a nice satellite operation. They may even get the Capsule up and going soon!
No disagreement they need good management cut that is just a CEO cut away.
Our usual Half -full suspect vs. half empty analysts
In next couple of quarters, we’ll see if more charges are forthcoming, who has the insight, who ignores the writing on the wall.
-> “1. $7.9 billion in defense charges so far; not the end yet
Boeing’s defense business has racked up $7.9 billion in losses thus far. And although the company has recent wins in securing contracts for aircraft like the KC-46, VC-25B, T-7A, and MQ25, supply chain issues, an inflationary environment, and a tight labor market may continue to put pressure on costs and defense programs
5 years ago I would have agreed with you about a solid base, but their response to the many and varied crises have been, at best, underwelming. To me it appears they have pared their engineering resources beyond the bone.
Boeing themselves recognized this. Their main motivation for the purchase of Embraer was their young and innovative engineering workforce located in a low cost country.
They have the core programs to start recovery, they just don’t have the management with the brass ones to do it.
BA doesn’t have the money or the image to be able to attract new, talented recruits.
Boeing has all the money they need and its just a matter of policy change to attract good recruits or bring back old ones.
My company changed management and I got a big raise, they did not want to loose their best people.
Clearly you don’t know how it works.
Proof that bad news travel very slowly and hasn’t reached AK.
Just a couple years behind the curve
I’m going to talk about market segment by production in a minute, but in reference to this:
“When the A220-300, which competes with the 737-7, is added into the mix, Airbus gains another point in the single-aisle market sector.”
The ramp up for the A220 is going to be 14 a year by 2025. Last month they delivered 8, and while these production ramp up are projections, if we go by the numbers:
75+57+14=146 aircraft produced by both OEM’s.
57 of that = 39%.
Making the A220 program worth 4 points of the NB production market for AB.
@Frank, eliminate the A220-100 from this calculation. It doesn’t compete with the 737-7; it’s too small.
Well – you are talking about narrow body production, by OEM. Should we remove the A321LR & XLR because Boeing has nothing to compete with it in that segment? Is that Airbuses fault?
Secondly, the A220-100 has orders for a grand total of a whopping 102 aircraft. 55 of those have already been delivered. So, 47 aircraft is gonna skew the production 3 points towards Boeing in 2025?
Thirdly, Qantas has ordered the A220-300. They have options to flip in and out of the 100/300 variants as they see fit. Delta did it. Right now they have 20 -300’s on order. You can’t drop a model from a line because the competition doesn’t have a competing product. The airlines view it as interchangeable, according to their needs.
Airbus is going to make it. They’ll either make or lose money on it. It’s part of the calculation…
The MAX 10 competes with the A321neo. False narrative to segment the sub-types within the 321 model.
Is the -100 not a sub type of the A220 line?
To your point:
They are all variants:
737 MAX 7
737 MAX 8
737 MAX 200
737 MAX 9
737 MAX 10
The BBJ MAX 8 and BBJ MAX 9 are proposed business jet variants of the 737 MAX 8 and 9
Two Airbus Corporate Jets variants are offered: the ACJ319neo, and the ACJ320neo
It’s all part and parcel. Just because Boeing doesn’t have a product there, doesn’t mean Airbus get’s penalized in your calculations – nor does it mean that they won’t profit off of it.
But even if it did…it’s a .5% of a drop, with a 3.5% gain in the production numbers…
We had that discussion when you said the -900/-9 competed with the A321.
It does not. The now -9/-10 are adjunct to the -8, not an A321 competitor. Boeing has no A3212 competitor.
Do the -9 and -10 work for some customers? Sure. AK is a good example.
But if you want an A321 class aircraft full time, the -9/-10 do not cut it.
So yes the A220 is an adder to the same single aisle class that the MAX and NEO are.
Equally they take market share as much as the A321 does for single LCA.
Single Aisle LCA is all one class aircraft and the A220 and the A321 count in total numbers be it flying or production.
‘They have options to flip in and out of the 100/300 variants as they see fit.’
Qantas doesnt have options to flip in or out of A220 variants.
They are buying the 300 version.
“Combines with the existing order of 109 A320s (plus purchase rights) for Jetstar into a single Qantas Group narrow body order of 299 aircraft (half of which are firm orders and half are purchase right options), with the flexibility to draw down on that order by choosing any variant from the A320 and A220 families.”
But – to that end, I ran the numbers anyways;
Total: A220 orders 740
Ratio: 86% -300 variant = 12/14 produced per month.
57 is 39.5%
If the orders for the -100 variant stay at the same rate as the -300 variant, in the future, when the ramp up to 14 happens. I’m gonna go out on a limb here and say that a -500 variant get’s announced in 2025 and the -100 get’s dropped into obscurity and it’s all -300 & -500 from then on.
Probably some 100s just like some 787-8 (and more of those if they had full commonality with the -9/-10)
But yes the vast majority will be 300 and the 500 whenever that comes out.
When looking at the market share of a business, I tend to give much more weight to what the business is actually delivering now, than to what they delivered in the past, or claim that they they will deliver in the future. Here is what I get for market share by deliveries for full year 2021 and first quarter 2022 for currently in production narrow body mainline aircraft. I use the US major’s definition of a mainline vs. regional aircraft, thus CRJ’s and and E175’s are excluded. Deliveries for Airbus and Boeing are from Wikipedia. Embraer deliveries are form Bjorn Fehrm’s 4-5-22 post on this blog, and from the following link.
First Quarter 2022: 203 deliveries for all types.
A32Xneo: 109 deliveries. Market share = 109/203 =0.537 or 53.7%
737 MAX: 81 deliveries. Market share = 81/203 = 0.399 or 39.9%
A220: 11 deliveries. Market share = 11/203 = .054 or 5.4%.
E-190-E2 and E-195-E2: 2 deliveries. Market share = 2/203 = .010 or 1.0%.
Full Year 2021: 775 deliveries of all types.
A32Xneo: 459 deliveries. Market share = 459/775 =0.592 or 59.2%
737 MAX: 245 deliveries. Market share = 245/775 = 0.316 or 31.6%
A220: 50 deliveries. Market share = 50/775 = .065 or 6.5%.
E-190-E2 and E-195-E2: 21 deliveries. Market share = 21/775 = .027 or 2.7%.
That seems reasonable, what you’ve done there (but your Neo number seems a little light – AB reports 483 delivered in 2021).
I have always maintained that the benchmark year for performance for Boeing is going to be 2018. It was the last full year before covid and before the groundings. It gave the true picture of where their strength’s were and what the company was about; ~$101 billion in total revenue; $61 billion BCA, $23 billion Defense, $17 billion Services. ~$12 billion in earnings; $8 billion BCA, $1.6 billion defense, $2.5 billion Services.
BCA delivered 806 aircraft, 580 NB aircraft in 2018.
In 2021, Airbus had delivered:
A total of 611 commercial aircraft were
delivered (2020: 566 aircraft) to 88 customers.
By aircraft type, deliveries comprised 50 A220
Family, 483 A320 Family, 18 A330
55 A350 Family and 5 A380s.
533 Narrow-bodies, which is just ~50 short of the best year BA ever had.
Boeing had better get moving…and I don’t mean to DC, either.
Re:”That seems reasonable, what you’ve done there (but your Neo number seems a little light – AB reports 483 delivered in 2021).”
The difference between the figure of 483 A32X deliveries in 2021 that you cite, and the figure of 459 that I used, is due to my excluding the last 24 A32Xceo’s that were delivered in 2021 per the following scope qualification that I stated in my post: “market share by deliveries for full year 2021 and first quarter 2022 for currently in production narrow body mainline aircraft.” I also excluded 18 737 NG’s that were delivered in 2021, i.e. 2 737-800 BBJ’s and 16 737-800A’s for P-8 conversion, even though the 737-800A is still in production. Note that in my list of market shares I specified “A32Xneo”, thus specifically excluding A32Xceo’s. The market shares for 2021 are not much changed if one throws in the A32Xceo’s and 737 NG’s. See below.
Full Year 2021 including A321ceo’s and 737 NG’s: 817 deliveries of all types.
A32X ceo and neo: 483 deliveries. Market share = 483/817 =0.591 or 59.1%
737 NG and MAX: 263 deliveries. Market share = 263/817 = 0.322 or 32.2%
A220: 50 deliveries. Market share = 50/817 = .061 or 6.1%.
E-190-E2 and E-195-E2: 21 deliveries. Market share = 21/817 = .026 or 2.6%.
Ahhhhhhhhhh – OK, I see what you did. Yah, that works as well. I’m of the mindset that an airframe produced and sold, is a counted plane – so I wouldn’t necessarily drop those 737’s for the military, or the NG/BBJ variants. Commercial is still running it through Spirit and all the regular suppliers and at the end of the day, it’s gaining revenue for the company – which is really what this all translates to.
Those airframes that are end of production models, even the 777’s that are still being made as freighters or pax variants, still get allocated some fixed costs that contribute to lowering the overall expenses for the time period and help the company.
So you’ve mentioned you’re an engineer. For the OEM in question? In any case, a query;
How is the talent pool at Boeing? Are they short airplane guys? Some have postulated that letting go of Embraer was a mistake and that BA would have had access to less expensive but talented resources to shoulder the load of what needs to be done.
Furthermore, I’ve also been told that being down there would have opened up another certification route (I couldn’t speak to that, how it would work, the logistics of it) to get aircraft certified and into service.
What’s your take on that?
Back to deliveries for a second;
If you pull back the view a bit and look at an overall company/industry perspective – it’s obvious that it’s a 2 horse race. And in that race, it’s not only booking wins, IMO – but also limiting losses. Losses weaken the company and remove resources that can be used to further products and increase future market share.
A couple of examples;
I don’t follow defense as closely as commercial, but the 767 tanker program, which BA won out, over AB; Boeing has had trouble with. They have had to write off losses on the program. Each aircraft that has been delivered, cost Boeing money, which is almost like saying Airbus is in a better position by not winning the contract (assuming that Airbus would not make as much money on the contract, as Boeing had lost).
Same thing with the A380. Airbus lost their shirt and was weakened by making that aircraft. Yes – there are engineering intangibles you gain by running a program like that, but only if you can exploit those gains in the future.
Same thing with the 787. If at the end of the day, when the 787 program is done and Boeing has produced 1,500 aircraft (the estimated accounting block) but it has cost the company $10 billion (entirely possible since they’ve already written off $3.5 billion, with another billion to come and $13.5 billion in the DPB yet to be allocated) – it’s a pyrrhic victory.
You have 1,500 aircraft flying with your name on them, but it cost you $20 billion to make $10 billion. If the A330Neo program breaks even with 300 deliveries, it’s mission accomplished for Airbus.
As an engineer, you may sit here and tell me that Boeing has gained valuable skills and knowledge in carbon fiber produced aircraft, which is very true. The flip side, is that if the resources to utilize and exploit that knowledge aren’t there and experienced people are let go/leave because you can’t retain them, or you move production to SC to cut costs and they don’t follow – or it you just don’t have the needed $15-20 billion to launch a new, clean sheet design (in whatever market segment) to profit off of that…
…what good is it? To that point:
What good is producing a backlog of aircraft and claiming X percentage of market share, if you have to pay money to do it? Every quarter that goes by, that Boeing cannot operate in the black, is one less quarter that Airbus has to worry about the coming up with a new aircraft to challenge them.
(Sorry about the diatribe, and I’m not trying to extoll the virtues of being a bean counter – quite the opposite; The powers that be should have asked the airplane guys ‘what is the going to cost to do it right, the first time?’ rather than trying to tell engineering how much money they have to make do with…)
“As an engineer, you may sit here and tell me that Boeing has gained valuable skills and knowledge in carbon fiber produced aircraft, which is very true.”
Is this true?
IMU production wise they are still sitting on the same issues apparent with the first frames.
Additionally I don’t think that B will ever do a new design using cylindrical _monolithic_ barrel sections.
Airbus back then offered that barrels are an intrinsically bad solution. whatever you learn: application of gained competence would produce superior panels (vs barrel sections) all the time.
another issue: Who “really” learned something. Boeing or the unlinked Subs?
Buy a “quality one stop designer and producer” (Embraer’s competence )
Boeing does the PR and marketing ( their forte )
Excellent point on experience. I was requested (ordered) to attend a controls presentation by Johnson Controls (their newest software system was supposed to integrate/interface easily with the older one). The head guy (like number 2 in the JCI group) was nattering on about they had 10 billion square feet under contract yadi yadi etc and they had experts in all areas.
We were trying to integrate the new stuff with the older system and despite a brilliant tech, failing. We just needed to see it and adjust parameters and do overrides, not change programs )
So I put my hand up, ok, you guys have these experts, but the one expert we need to talk to has thousands of people vying for his time and we can’t talk to him to sort out how to get the link up into the old system you say all it takes is an integrator interface.
So what good does the 10 billion sq feet and those experts do us if we can’t access them? And that is your tech, they won’t even talk to us at all. One tech in each areas is a totally swamped tech and its all nonsense.
Clearly Boeing put the F Troop on the KC-46A as they deemed it was now theirs and no issues (wrong)
Equally they had good success with the P-8, but that was moving over the P-3 systems to start with and then Spiral Development improvement/upgrades at a slow and steady pace which is much easier and your B team can handle that.
E-7 was all new and had huge issues (great success now just like the KC-46A will be)
My take is they put the A team on the T-7 (MQ-25 seems to be going well but they have not ramped up)
What they need is more A teams and B teams and they do not need the F troop.
That is nothing more than good management and policies and Boeing has the horsepower to do that. Calhoun is from the gut and run school and that means no progress until he is gone and is replaced by someone who understands Boeing has to be built back up before you can have dividends (and there should NEVER be share buy back)
With the move to DC, last week’s Loren Thompson article on federal aid for BA falls into place.
From the FAA’s proposed “Special Conditions” for the A321 XLR.
“This proposed design was not envisaged by the FAA’s regulatory requirements for insulation installations on transport category airplanes. 14 CFR 25.856(b) requires all thermal/acoustic insulation in the lower half of the airplane fuselage and their installation to comply with the flame penetration resistance test of Appendix F Part VII. The FAA adopted § 25.856(b) to raise the level of post-crash fire safety on transport category airplanes. Part VII of Appendix F requires a stringent test method for all thermal/acoustic insulation proposed for installation in the lower half of the fuselage. The FAA’s intent in imposing this requirement was to ensure that this insulation provides an additional barrier between the occupants and an external post-crash fire, especially a fire resulting from a pool of spilled aviation fuel. This barrier extends the time available for evacuation.
While the rule applies to the thermal/acoustic insulation that an applicant proposes as part of their design, it does not require applicants to install such insulation. Since the fuselage skins of the lower half of transport category airplanes are generally insulated, and were at the time these standards were developed, the FAA considered this approach to be sufficient to ensure safety. The rulemaking also noted, however, that if applicants began to propose designs that omitted this thermal/acoustic insulation, the FAA would revisit the need for a specific fuselage burnthrough standard.
Thus, since this proposed design will lack thermal/acoustic insulation under the fuselage skin in the area of the fuel tank, current FAA regulations do not ensure that it will provide a continuous flame penetration (burnthrough) resistant barrier between the passengers and an external fire, nor that it will provide enough protection, against an external post-crash fire, to allow time for passengers to evacuate.
According to Airbus, its proposed design does not allow for compliant thermal/acoustic insulation to be placed beneath the cabin floor. This large volume of unheated liquid (fuel), directly below the floor of the passenger cabin, would, without mitigation, create a `cold feet’ effect for the passengers above it. Therefore, Airbus plans to install insulation panels between the fuel tank and the cabin floor, for comfort reasons. These insulation panels would normally be required to meet § 25.856(b). However, Airbus states that it is technically not feasible to install thermal/acoustic insulation that complies with § 25.856(b), due to the lack of space in this area, and the need to keep nearby decompression panels free of blockages and ensure adequate ventilation.
To address the assumption in the FAA’s current flammability standards that proposed airplane designs would include thermal/acoustic insulation in the lower fuselage, and to ensure that this proposed design does not reduce the time available for passenger evacuation in the case of a post-crash external fire, special conditions are needed. Specifically, the FAA proposes to require that the lower half of the airplane fuselage, spanning the longitudinal area of the tank, be resistant to fire penetration. “Resistant to fire penetration” would, for this special condition, mean that this area provides fire penetration resistance equivalent to the resistance which would be provided if the fuselage were lined with thermal/acoustic insulation that meets the flame penetration resistance test requirements of part VII of Appendix F. The applicant’s method of compliance may, but is not required to, be based upon any inherent flame penetration resistance capability provided by the construction of the fuel tank and/or other surrounding features.
The proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.”
I wonder how the time it takes for an understaffed FAA to certify a new model that varies from a previous model mainly by addition of an enlarged rear emergency exit doors (MAX 8-200), or by shortening of the fuselage (MAX-7), will compare to the time it takes for it to certify an aircraft that differs from a previously certified model mainly by a new type of center fuel tank design?
Is this actually the FAA in their technical role ( flight safety ) or in their political role ( furthering US aerospace interests : here by hampering the competition.) ?
Which part of the FAA’s proposed special condition is not essentially the same as those proposed by the EASA in January 2021 (see below), and which part do you think does not make complete and obvious sense from an engineering and safety standpoint? Do you think that the EASA
is part of a political conspiracy furthering US aerospace interests?Should aircraft using the fuselage wall as a fuel tank wall not have fire safety equivalent to present designs in which sufficient insulation is required between the fuselage wall and the fuel tank to prevent a fuel pool fire from burning through the tank for 5 minutes, to allow 5 minutes for passengers to evacuate before the fire burns through to the center tank, causing an explosion that probably kills every passenger still on board if there is any fuel or fuel vapor in the center tank? Someone in Airbus marketing or management must have wanted to have the A321XLR to have a certain amount of range pretty bad to get the Airbus engineers to acquiesce to the present design, which is obviously much less safe than designs which adhere to the historical practice and requirement of providing insulation between the fuselage wall and the fuel tank that can withstand a fuel pool fire for 5 minutes before burn through to the center tank occurs. It only took the understaffed and overwhelmed FAA about one year and 2 months to get around to responding to the same obvious safety deficiency that the EASA responded to in January 2021. They are speeding up!
I see a lot of comments in websites that misunderstand the insulation issue, stating something like “why is is it the EASA’s concern whether the passengers feet are too cold?”. The outside air temperature at airliner cruising altitudes of 30,000 to 35,000 feet is typically minus 60 to minus 70 degrees Fahrenheit. Passenger’s feet would freeze, not just be cold, if insulation was not provided between the fuel tank and the cabin floor. The regulatory issue arose because Airbus applied for an exemption to the fire burn through regulations because the fuel tank of the capacity they proposed would not provide for enough space for this insulation to meet the existing fire burn through safety regulations.
See below for an excerpt from EASA SC-D25.856-01, issued January 18, 2021.
“IDENTIFICATION OF ISSUE:
EASA received an application for a major change to type design on a large aeroplane. The design change includes the following features that require a Special Condition to be raised by EASA.
1) An integral (structural) rear centre tank (RCT) located behind the wheel bay is introduced to the aeroplane in the lower section of the fuselage, partially replacing the aft cargo compartment.
The RCT creates a ‘cold feet’ effect for the passengers located above it, and insulation panels will have to be installed between the RCT and the cabin floor for comfort reasons. As per CS 25.856(b), these panels
will have to be compliant with the burnthrough specifications. The aircraft manufacturer studied this strategy and concluded that, for the proposed design, compliance with CS 25.856(b) is technically not
feasible due to the following reasons:
a. It is not possible to install insulation panels between the RCT and the cabin floor that would be compliant with the installation requirements as expressed in FAA AC 25.856 2A, due to the lack of space.
b. Burnthrough protection of the cabin floor would leave the decompression panels located on each side of the fuselage unprotected, as they cannot be blocked by any insulation panels. The total area of
discontinuities above the RCT in terms of burnthrough protection would be around 10 %.
c. Due to the Fire, Explosion and Smoke Risk Assessment (FESRA) conclusions around the RCT, a certain level of ventilation must always be ensured, and any attempt to install burnthrough-compliant material
would jeopardize this ventilation.
2) The integration of a fuselage integral fuel tank located behind the wheel bay, under the passenger cabin, brings additional risks (explosion, penetration by fire, vapor migration, etc) if it is exposed to an external
fire. While the other risks are addressed separately, this proposed Special Condition intend to address the risk of penetration by fire only.
Even though paragraph 25.856(b) focuses on the insulation material, the intent of the rule is to provide enough time for the occupants to evacuate the aircraft in case of an external pool fire. An integral fuselage
fuel tank exposed to an external fire, if not adequately protected, may not provide enough time for the passengers to safely evacuate the aircraft.
From a fuel tank fire protection perspective, aluminium alloys are indeed recognised to have fire resistant properties, when of a thickness that is appropriate to the function to be performed. This minimum thickness is, unfortunately, not specified. Moreover, from a fuselage burnthrough point of view, it is also acknowledged that an aluminium skin provides very limited protection, hence the fire protection function is mainly provided by the insulation material.
Considering all the above, the following Special Condition is proposed:
Passenger Protection from External Fire
In order to protect the cabin occupants from an external pool fire, the lower half of the fuselage in the longitudinal location of the rear centre tank shall be resistant to fire penetration.
Means of Compliance to Special Condition SC-D25.856-01
The associated Means of Compliance is published for awareness only and is not subject to public consultation.
In showing compliance to SC-E25.856-01 the following may be considered:
1. The strategy for protection of the fuselage against external pool fire effects for a fuselage structural centre tank installation may be demonstrated to be at least as safe as the previous design of the basic aircraft, for which the burnthrough protection was found compliant with CS 25.856(b).
2. The demonstration can be achieved either through the design features of the RCT itself, or through additional design features.
3. The demonstration can be based on tests, analysis supported by test evidence, or design similarity.
4. When flame penetration testing is performed on materials other than insulation blankets that would be compliant to 25.856(b), the test should be carried out in accordance with the test conditions prescribed in
Appendix F Part VII with regards to the fire threat with an exposure time of 5 minutes to the flame. There should be no flame penetration during these 5 minutes.
Excellent write up of the details and logic of the issue. Once again I tip my hat to you.
Shades of Boeing using the fuselage of the KC-46A as an antennae, great idea, very hard to implement.
I am assuming wherever they plan to mount this extra tank also doesn’t interfere with evacuation points? I can’t imagine if it’s ruptured or leaking you’d want passengers exiting door 3 or over wing exits down the back of the wing into a pool of fuel? Or would this be taken care of by longer evacuation times?
IMU you have the same issue with center wing box, wing attachment structures … in about the same place.
( XLR tank, ( center ) wing box tank, are outside the pressure hull.
This is more of a crash worthiness design thing.
And you make the point. Its been designed in and used since the dawn of the jet age.
No one has used the fuselage as a fuel tank side.
Whole different ball game and needs a very considered approach.
And this is the same bunch that berates Boeing (rightly ) for MCAS but excuses bad software and an unproven design by Airbus?
Me smells enormous amounts of, ahem Hypocrisy
FedEx Flight 910, Fort Lauderdale on 10-28-16. Time from the aircraft coming to a stop to left wing tank explosions triggered by a fuel pool fire is about 1 minute and 20 seconds. The DC-10’s wing tanks have the same type of integral wall construction that Airbus proposes for the A321 XLR. By the time that the airport fire truck’s foam spray hits the aircraft about 1 minute and 40 seconds after it has come to a stop, the aluminum structure of the left wing has been largely incinerated. Because there was burn through to the left wing fuel tanks, the left wing was incinerated in less than 2 minutes. Because there was no burn through to a fuel containing fuselage tank, the flight crew walked off the plane and was not incinerated.
This is what fuel pool fires do to aluminum aircraft structures. British Airway 2276 at Las Vegas on 9-8-15.
Here is what a fuel pool fire lasting 2 to 3 minutes did the left wing of FedEx 910. Burn through or explosion trigger of a non-ruptured tank appears to have occurred at about 1 minutes and 20 seconds after the aircraft came to a stop (per my inspection of the video, not per official investigation documents).
The design metric forced by this is to prohibit
_fuel pool creation_ at all cost.
Wing tanks are more or less armored by the surrounding wing structure.
Today there seem to be very few “short timeframe consumed by fire” crashes.
Quoting LNA: “The Air Force secretary made it clear a few weeks ago he prefers to award Boeing a sole-source, directed contract for up to 160 more refueling tankers rather than open it to competition with Lockheed Martin-Airbus.”
It’s ironic that the same Boeing company that was accusing its competitors of illegal subsidies, while at the same time itself benefitting from various forms of aid, is now relying on its government to stay in business.
That being said, although Chicago is one of my favorite city in the USA, I never thought it had been a sound decision. But this move to Washington makes perfect sense in the context where Boeing would eventually have to split its civilian and military activities as part of a possible restructuring. And if this were to ever happen I could see Boeing Commercial going back to Seattle and regroup there.
One way or another Boeing needs to reinvent itself. In the meantime it looks like a company that lost its soul.
‘One way or another Boeing needs to reinvent itself. In the meantime it looks like a company that lost its soul.’
NOPE The ‘ leaders ‘ sold its soul toMcDonnel Douglas , Harry stonecipher, and a host of Jack Welch wannabees.
Sold is a good description but they do need to fix that.
You can only gut a company for so long and then you see the train wreck (Pen Central anyone?)
Boeing has the core to do so, it just needs the management with a will do make it happen.
They may well never challenge Airbus for number 1 in Single Aisle but they can do so in wide body and with the new aircraft if they ever release it.
The USAF is noted for changing its mind from minute to minute.
That said, I don’t see the KC-46A as a bail out. Its a sound decision for a tanker in production that will save the USAF big bucks and get more tankers for the same investment (not to mention huge fuel saving over the A330MRT over its life)
Clearly you do not follow other US procurement. Oshkosh has had vehicle supply extended a number of times. The Army got a hell of a deal, they still need the same trucks and they simply extended the contract.
If you get a good deal and it works, there is all the reason in the world to take advantage of it. If we opened contract each time for everything we would have nothing but a total non common mess.
Lockheed has an exclusive on the F-35 and NG has an exclusive on the B-21.
Boeing will sell a hell of a lot more T-7s over the years as well as MQ-25 as those are bargains that do exactly what is required and in the case of the T-7, can fulfill a number of other roles.
The USAF is short of fighters (as is the USN) and Boeing can make both as the F-35 is still not in full rate production.
Boeing can fill that gap with good aircraft.
The KC-46A for KC-y will be a bail out. Maybe justifiable, necessary, but still a bail out. With both KC46A and LMXT specifications, track records known, it would be hard to steer requirements / selection criteria to make Boeing win, without a political perspective.
Everybody seems to see the writing on the wall, even USAF. So better skip such inglorious circus and keep the factories running.
At the heart of the current dire situation I see the previous decade’s abuse of FAA Modernization and Reform Act of 2012 (certification Streamlining) and Boeing Program Accounting / Free Cash Flow Consumption (FCFC).
Free market capitalism / WTO / exceptionalism will be parked for a while. But don’t worry, expensive communications experts will create a feel good environment around this & train us to see / remember all this from different perspectives.
Thanks for that perceptive comment.
And the no competition of the A400/Typhoon/Leopard II /NH-90 Tiger Helicopter and all those A330MRT sold to European governments is what?
Can you say bail out? Sure you can. Can you say subside foreign sales, sure you can.
Oshkosh has produced tens of thousands of vehicle under the same auspices but you hear not word one about that from the EU types.
The KC-46A is a good deal, it will get fixed and it will save vast amounts of money for the US Taxpayer (not often we get that)
400 KC-135R is a nice thing and so will 340 KC-46A
And if we need some spot longer range fueling, we have our allies with the A330MRT, though sadly that is only 50 total and we can’t access all of those unlike the the US making its tanker fleet available to the EU when called on (Yugoslavia, Kosovo, Libya, Afghanistan – NATO contribution and many other assets to help our allies out despite them not keeping up their NATO forces or the 2% MINIMUM commitment to NATO that has certain parties convinced that it would all fall apart with an invasion of a non NATO country, danged if that did not work in Georgia, Crimea, Syria etc)
TW is back in the misrepresentation domain.
direct order with no competition. OK.
order from competition, fairly done OK.
Hold a competition and manipulate the result to have the local corp win. NOT OK.
Morals. you have them nor not.
It’s just so interesting to see that a country that likes to lecture others on the state of their defense forces…is now purchasing hundreds of units of a problem-plagued tanker that won’t be up to spec for at least another 4 years (if ever).
It seems that Boeing isn’t the only institution that has lost the way.
Add that funneling gigantic amounts of weaponry into Ukraine to frustrate RU runs into resupply issues locally or to satisfy customers:
Sorry, three strikes and you are out. Go back to the dugout and think about your swing.
The whole idea for a KC-Y is allow for more fuel to be delivered at longer ranges – think Pacific and be a KC-10 replacement
That doesnt come free and the KC-46 was designed the same fuel load as the KC-135
In addition the larger plane can have a belly cargo and main deck cargo capability. The military is like the civilian world its air logistics chain largely runs on pallets.
Aero medical is another requirement which currently uses the C-17 which isnt ideal as its outsize cargo capability is wasted. The reason is the range capability basically non stop flight
Maybe the actual requirement for KC-10 replacement is met by much more KC-46. or they go for a split buy which is some more KC-46 and the rest of LMXT
But thats unknown until you have a competition and compare in rigorous way, as Congress wants
As usual these days you are mixing up apples and oranges and pineapples.
The first premise always was wrong that 170 x KC-X would replace 400 KC-135R (and we don’t have enough tankers as it is)
The next one is to acualy attribute logic to the USAF, all you have to do is look at their statements and its one flaky change of policy after another (F-35 to be truncated for a pie in the sky Next Gen Dominate platform that is now going to cost 100s of millions each, phew) – Said F-35 is finally getting its feet under itself and has won every contest it has been in the last few years. Note its not perfect but its getting close to being what it was supposed to be.
Then there is the fact that the USAF issued an RFI (note that is INFORMATION, not and RFP.
We still need to replace all those KC-135R’s. We are 60 short and we are told that is not enough.
And when would we actually get an A330MRT that MET USAF specs? It does not exist, the assembly plant does not exist nor the tech ability to put one together. 2035?
In the meantime, Boeing can ramp up production of the KC-46A if requested and we can get 50 a year and in 10 years 500.
Some KC-135R have been upgraded but some are being retired.
This is from the USAF that says we don’t have enough and the KC-46A can’t freely fuel all aircraft yet.
But, the USAF can extend the contract past the 160 for the so called KC-Y program. KC-46A can also do a spiral development if its deemed needed (auto fuel)
Airbus and Boeing are collaboration on the Chinook for Germany, they could do so on tanker work as well. And that could go both ways with Boeing helping out on the common need for air battle management end that Airbus does not have.
But KC-46A in the air is far more valuable and a deterrent than a KC-Y that is years away.
While the EU has its crisis going on, China as a threat is not going away though we can hope Covid sets them back a long ways (and thinking about 100+ miles of sea on top of land fighting)
If NATO was fully robust we might well have not had Ukraine which the situation has shades of Nazi Germany in 1939. A capable armed force has a deterrent value even if its never used.
Boeing can ramp up production of the KC-46 ? really
I thought it was just a continuation contract for them once the existing contract is complete. Thus is many years away which allows a new FAL to be set up for the airframe using their supply chain fly in process and an existing Marietta plant for its military tanker fit out.
Your obsession about a few secure communication radios that the MRRT doesnt currently use . Dont know all the details but Nato allies still get all the good stuff- interoperability remember. And its not as it they are going to drop a B81 nuke out the cargo door that it needs that level of new hardware-software
whatever the nuances a competition allows all the pluses , minuses and the USAF actual requirements to be spelt out in fine detail. Even better it allows Boeing to earn a new contract if they win.
More detail on those ‘communications’
While the Air Force has not issued specific requirements for KC-Y yet, both competitors expect command, control and communications capabilities aligned with the Air Force’s Advanced Battle Management System and agile combat employment concepts will be emphasized.
Hafer said the KC-46 is the first Air Mobility Command aircraft to host ABMS capability, integrating command, control and communications into an aerial refueling pod carried on a wing station that will be complemented by the Pegasus advanced communications suite.
Lockheed Martin will take command, control and communications a step further, using LMXT’s upper deck to host a joint all-domain command and control suite with the ability “to accommodate air battle managers if the Air Force decides to go that way and manage the entire battlespace rather than just be a relay station in the sky,” according to the company.
A ‘wing pod’ wouldnt be any more issue for LMXT than it would be for KC-46
You now have thrown Chinese Tea into the Apples, Oranges and Pineapples.
Boeing is making 767 hulls in Everett. They have endless room to expand though they can crank up the line with no issue and make more. Some of those are 767F and some are the soon to be KC-46A though the Aircraft is sent to Boeing field to be converted.
So no, they don’t have to open up a new line, they just have to ramp up suppliers and they can crank out more 767s if the USAF requests it.
Boeing in turn may ask for money to do so, its legitimate as far as contacts go. Or Boeing may elect to just crank them out.
The key here is the USAF is retiring KC-135R. If they had a tanker shortfall like they said they did, then they need more KC-46A.
If they are lying? Then the current production rate will do.
Its actually to Boeing benefit to maintain lower rates over longer time as Everett will soon be producing only 767 and 777 (lots of empty space)
But the USAF and Boeing can work out any deal they want and the line is not moving anywhere. Only LM had to build a whole new line and shift A330MRT work to the US. More money and argue all day long but 85% capable in the hand is worth 120% capable not being made.
The EU types can argue all day long, but there is no A330MRT that meets the USAF specifications. Along with built in there is the capability of adding features as needed.
Read the reports of pilots who have moved from KC-135R to the KC-46A. From steam age to modern (and the 767 is not as modern as the A330 but it has the 787 systems that put it beyond the A330 as far as display and controls information which is all but an FBW upgrade (UPS and FedEx etc are still getting the old 767 with the steam gauge display and happy with it)
The KC-46A is leaps and bounds beyond the KC-135R and it will continue to get better.
And just as the US has used French, UK air fueling assets in other areas, we can use the A330MRT in the Pacific if needed.
And that is the reality of the situation no matter how much foaming of the mouth and frothing.
EU is far from perfect in its defense and its the entity that has made itself severely dependent on Russian gas (and oil).
The US has argued against that as well as the need to spend on defense.
That means EU spending, not US contracts.
Its stunning how entitled the EU types are that we owe them contracts when they don’t even spend what is needed and put themselves into black mail with the Soviets.
Look in the mirror folks, you will not like what you see if you are honest.
And not, the Kit
I’m not sure that I’d be comfortable with saying projected production rate of X number is an accurate representation of market share.
The Max and the A320Neo family entered service about a little over year apart, close enough so they can be compared side by side. May 2017 for the Max, Jan 2016 for the A320Neo.
The reported number of orders, ignoring any ASC606 reductions is 4.878 for the Max and 7,986 for the Neo.
If Boeing, because of the grounding and production problems – was able to magically snap their fingers and use the 787/747 Washington space and get it’s supply chain to make 100 Max’s a month to play catch-up, would one say that they have a commanding market share lead?
There is the after market service component.
Even though you may buy a car from a dealer and can take that auto to any mechanic, the dealer makes huge numbers on having you back in to service the thing. I’m guessing it’s like that in the aircraft industry, as well.
Boeing, in 2018, got $17 billion in revenue from Global Services, which was about 17% of all company revenue. They also got a margin of almost 15% from it.
Defense margin? 7%
The more aircraft you have sold, produced, delivered and are in service – the greater the chance that your service revenue will increase. The greater your margin will be. The stronger your company is.
If we start looking far out, at the global market – both Boeing and Airbus have come out and said they expect the narrow body market for the next 20 years to be about 20,000 aircraft, give or take. The A320Ceo & NG/Classic market was a touch under at 19,000.
The race to 20,000 for the current offerings is at about 13,500. That’s about two-thirds of the way through. 10,000 each is a dead heat. Airbus is at 8,700 with the A220 included.
Increasing production rate (without increasing your capital costs) does do other things, mind you – it lowers your unit cost by increasing the number of units fixed costs are spread over. You will also open up additional delivery slots for future sales.
But BA is further behind then 43%
Orders are not deliveries. So the count should be deliveries.
As great a position as Airbus is in, how many years at 50 a month does it take to actually change the in the air numbers?
Where Airbus does have the numbers is the A321.
All those orders are 4-6 years out. A lot can change in that time (it changes by the day right now)
We have Covid and we have Ukraine (or more accurately the Soviet have a part of Ukraine ). None of which we know how its going to fall out other than it is going to have an impact. China is due for a nationwide breakout (depending on the ineffective Sinovac was a dumb move)
No one knows how this falls out, the Dow dropped 1100 points yesterday. US could go into a recession. Europe is going to be hit hard and will have a recession.
The smaller 787 could fit nicely into that (or maybe nothign will)
Until the world settles out to a new normal its all a coin flip
“Orders are not deliveries.”
A company’s performance (especially the aircraft industry, where very long lead times are the norm) is always judged on future earnings – or potential. You always hear the expression “The market is forward looking”
If we looked at Boeing today and said “Well, what are they today?” people would run from them.
From the last report:
Advances and progress billings 52,458 52,980
BA has received over $52 BILLION in advances. You want to tell me how orders don’t matter?
“So the count should be deliveries.”
But let’s play it your way – Deliveries:
Boeing has delivered 740 Max’s
Airbus has delivered 2,185 Neo’s
Airbus has delivered 208 – A220’s
3,133 aircraft of which 740 are Max’s or….
Sounds about right.
The right metric would be how many 737s (all types) are flying vs how many A220/A320/A321?
The current mfg does skew the number to Airbus (correctly) but its not the whole picture.
Equally, with the world volatility Airbus going to 75 a month (A320 type) vs the MAX 40 or 50, could be a huge mistake.
Things could and likely will flip back to a freeze on orders and delays on deliveries.
Boeing could be at an advantage in its 30 something a month MAX currently as they would not have to rack back. Yes it would be ironic.
I fully agree with you that for LCA single aisle, A220 types count and the A321 Types count.
I would also count a twin aisle 737RS if it ever came out in that category as its defined by characteristics not the aisle type.
An MOM would be a hard one to define and might need a new cateory.
“Equally, with the world volatility Airbus going to 75 a month (A320 type) vs the MAX 40 or 50, could be a huge mistake.
Things could and likely will flip back to a freeze on orders and delays on deliveries.”
You could be right. I have a feeling though, if it goes Russia v Nato, we’re all going to be in a lot of trouble. Coming here to debate BA v AB is going to be the least of our worries…
“Boeing could be at an advantage in its 30 something a month MAX currently as they would not have to rack back. ”
I believe that BA cannot make money at that rate. It’s fixed costs are made for a higher production rate.
“The right metric would be how many 737s (all types) are flying vs how many A220/A320/A321?”
For current revenue (or potential revenue) for Parts & Service, sure. IMO existing aircraft flying don’t effect demand, as long as newer/more efficient aircraft are sought.
“I would also count a twin aisle 737RS if it ever came out in that category as its defined by characteristics not the aisle type.”
Could you see a twin aisle, which needs to punch a bigger hole in the air, being as efficient as a NB?
>Equally, with the world volatility Airbus going to 75 a month
>(A320 type) vs the MAX 40 or 50, could be a huge mistake.
Well the volatility also means high fuel costs which may drive an accelerated replacement cycle.
Hard to know but I think the gamble is worth taking.
It won’t come to Soviets against NATO, if no other reason than they have trashed their Army and seriously damaged their Air Force badly already. Neither is ever a threat again. Reality was it never was a threat to NATO as it can’t even beat Ukrainian Army that is not the resources of NATO (no Air Force to speak of and NATO artillery is leaps and bounds ahead of Ukraine let alone Soviets).
But the sanctions are not coming off and the gas and oil issue is only going to get worse for EU. That means a recession at least there, maybe spill over to the US. China is just beginning its Covid disaster (and supply chains more disrupted) – ripple from Shanghai lock-down and the vast majority of Chinese cities have lock-down of some type (so they are going into recession as well)
75 a month is nuts.
I am not predicting a twin aisle in that single aisle category, but it was contemplated and you have to assume they figured out to make it work. What I am saying is the form does not matter, its the area of service. Clearly the heavy wide bodies don’t compete in that short to medium category though United flies 787 across the US.
Equally, Renton is paid for and its overhead is fixed and Boeing will make money on 30 a month if that is all that the world economy can afford.
But once recessions hit and oil demand drops, then need for uber efficient aircraft drops to.
I would be ultra cautious in this environment and while Boeing is there for a whole different reason, with the coming mess, Airbus can’t begin to maintain production. Their good news is that the wide body is throttled back.
And if you saw the numbers, the 787 kept flying through the last few years as it was the most efficient low cost option.
It’s amusing/charming to see that TW thinks that Russia has deployed its full forces to Ukraine.
The Russian navy is larger than the US navy, and Russia also has the world’s largest stockpile of nukes…including ones that can be delivered hypersonically.
Or perhaps he was really talking about the Soviets instead of the Russians?
I grew up during the cold war, with the whole Red Menace/Iron Curtain thing. One of the things we heard about, was that the military might thing was a sham and it was all puffery to keep the military industrial complex going. Stories of Soviet officers having their men paint the grass under their tanks green, as if the vehicles had moved and were in good working order, so they appeared strong – were trickling out.
It appears as if the stories were true and it looks like things haven’t changed much. The Russians have shown a stunning lack of:
1) Combined arms warfare
2) Equipment survivability
3) Military intel
4) Ability to use high tech
5) Qualified military commanders
Tiny, underfunded, untrained Ukraine is sinking the Black Sea fleet. Blasting the tops off of tanks and other military vehicles. Successfully targeting and killing commanders. Blasting aircraft from the sky.
Sure, they’ve gotten aid from the West – but it’s aid with one hand tied behind their backs, as the West is trying not to push Putin over the edge.
An attack against one Nato member, is an attack against all; the gloves come off. An attack against Ukraine, a non-Nato member, has galvanized the membership to a united front, exactly what Putin didn’t want. There’s no way that, even if Trump by some miracle wins in 2024, that the US pulls out of Nato and it falls apart. The plan is out in the open, now.
To mention nukes is kind of a red herring. If things go that way, we’re all done for and you and I will never be able to communicate like this, ever again. Those remaining, if there are any, will be getting out the cans & string – it’s back to the stone age.
Agree with you on the Russian threat. They’ve been exposed.
There’s a great video here on why oil and gas prices are so high now, by Sam over at Wendover:
In a nutshell, it’s the oil producers that are reining in supply, below demand levels – to keep the prices high. There are over 9,000 authorized and unused drilling permits in the US that oil companies are not exploiting.
If demand falls, as it would during a recession – what do you think OPEC and the oil guys will do? It’s not coming out of their pockets, they’ll reduce production.
On production of 75 a month;
So both OEM’s have come out and said they estimate some 20,000 NB aircraft over the next 20 years will be needed. Recession or not, take a look at 2001/2008-09 production numbers for the A320Ceo, back in the day. 2002-05 it dropped by about 30 a year (100 aircraft total) and after the crash of ’07-08, deliveries actually increased!
So let’s just say that the BA/AB projection is going to be close to being accurate, for the next 20 years. 1,000 aircraft a year. That’s 83 a month.
The next part requires that you step back from any personal preference and look objectively at what the market is telling you and what the airlines are doing:
Airlines are not happy with the 737Max and except for the Max 8 – the aircraft doesn’t measure up against what Airbus has to offer. Boeing has to give discounts to get airlines to take the plane and Airbus has such a backlog, they can cancel an order for 50 from a troublesome customer. It’s a 2 to 1 market share.
Post covid, Airbus is slowly but surely building up a war chest. Going forward, what would that allow them to do? Well, they could issue juicy dividends to shareholders. They could invest in new super duper aircraft for the future. The could increase production capability.
They could also accept less of a margin on future orders, relative to what the other guy has to make, because they have huge debt servicing and minimal production requirements to cover fixed costs.
83 a month is the demand. If everyone who wanted an Airbus aircraft, could get an Airbus aircraft, because they are producing 75 a month, airlines would order them.
Spirit, CFM, P&W and a host of other suppliers ship to both Airbus and Boeing, right? If one customers is asking you to slow down, or stop producing your product for a bit and send it to us later, or store some product by your plant for a bit – and the other guy is saying ‘give us all you got’, what are you going to do?
You gonna ship to whoever is asking for your goods.
Airbus will offer airlines as many aircraft as they can take, from the entire market share. That’s 75 and 14 a month (A320 & A220) and get the 20,000 market cycle delivered as soon as possible.
While you support your logic (unlike some others) we really do not know.
But I disagree on CFM. US builds the 737 (and they get all the MAX orders) and Safran build them for the A320.
GE is not going to drop Boeing. Unless Airbus is willing to pay in advance they won’t even shift parts to Europe (and the two engines are different enough they do not share parts)
But if a recession hits and the airlines have all the Single aisles they need they will defer.
Airbus forced airlines to take aircraft during this last go around (Boeing could not of course)
And airlines are not unhappy with thge MAX. The A321 offers some capabilities that Boeing cannot match so that is a bonus for Airbus (big one)
Boeing can now deliver and Airbus can’t (delivery is years out)
Its clear the Ukraine situation will drag out for years, its at a stalemate now and the Soviets have forced the issue trying to declare some kind of victory before May 9.
Ukraine is getting badly needed modern Artillery (both towed and SPA) and that is what is going to determine the ball game as far as a stalemate goes and eventually force a cease fire.
But the gas and oil issues is going to predominate. What Putin does in his desperation I won’t try to guess.
But this goes on for years.
And keep in mind Putin has sunk huge money into the Arctic and now needs to spend huge money on armaments, munitions and subsidizing the Soviet economy.
In the meantime NATO re-arms, Finland and Sweden join NATO and…………………
But Boeing can ramp up to 50+ a month if needed and Airbus hates to drop off so the money end could flip.
Airbus would have to put money up to suppliers to get the ramp up, they are not going to trust it.
Boeing can be cautious and suppliers don’t have to spend money until they get a Boeing commitment.
I think Airbus would be wise to hold with what they have.
“While you support your logic (unlike some others) we really do not know.”
Thanks – you too. I hope you don’t find the reading tedious.
It’s not a case of dropping them. If 2 customers come to you, one says “I’ll order X number” the other says “I’ll order 2X”, who gets the advantage? Who takes precedence? Who get’s the best Cust Serv reps? Who gets to go play golf/taken out, more often?
“But if a recession hits and the airlines have all the Single aisles they need they will defer.”
In ’08, ’09, ’10 – Airbus deliveries increased.
“Boeing can now deliver and Airbus can’t (delivery is years out)”
Just the problem a gradual bump to 75 & 14 would fix. On a side note: I’d rather be in AB’s position, than BA’s. It’s nice to be wanted. It’s not so nice to have 350 of anything in inventory and not moving, when the other guy’s stock is literally flying off the shelf and customers have to take a number to wait. ‘Come to my store, look – I have stock! I have openings!’ Customer: ‘Thanks – we’ll wait here and take our turn when it comes up’
“But Boeing can ramp up to 50+ a month if needed and Airbus hates to drop off so the money end could flip.
Airbus would have to put money up to suppliers to get the ramp up, they are not going to trust it.”
So you’re saying that Boeing would be trusted MORE (going to 50) than Airbus (going to 75), by suppliers, after getting fcuked by them, the last 3 years with their stop and start bullsh!t? The way they got squeezed by them in “Partnering For Success?” With the way their certification process has gone on with the Max 7, Max 10, 777X program, which has now stopped production. With 350 Max’s still sitting in inventory? 115 – 787’s?
You really think that?
“the money end could flip”
Is there a $60 billion PowerBall lottery somewhere in the states I don’t know about? Has BA got the winning ticket?
“Boeing can be cautious and suppliers don’t have to spend money until they get a Boeing commitment. I think Airbus would be wise to hold with what they have.”
Sure – BA can be cautious. Nothing would make Airbus happier than them having losing quarter after quarter. Airlines can read financial statements, too. They know who the stronger player is today, who’s aircraft is in demand, who can’t seem to stop sticking their crank in the fan.
IMO – this is very telling, sums it all up;
When you can thumb your nose at about a $3 billion order for 50 aircraft and tell the airline to go fcuk himself – go get aircraft from the other guy… you know who’s in the drivers seat.
Reality check, what happened when BA claimed to build 52 737 a month — planes were going out of FAL with no engines.
I fully agree I would rather be Airbus in the LCA sector than Boeing.
Boeing is going to be a Number 2 for the foreseeable future, maybe forever at this point. More so in Single Aisle but it only has one viable future wide body right now (787). 777X if iffy.
What I am saying is single aisle produion wise Boeing could be in the right place for the wrong reasons.
Airbus can try to take advantage of Boeing but their deliveries are still years out for most operators. Boeing is not and if you need a MAX 8 or 9, you can get them.
Europe is going to get hit hard economy wise, its already predicted to shrink with the gas issues as well as the cutoff of trade with Russia where they shipped a lot of equipment.
But, Boeing also has the defense side and that is going to do nothing but ramp up and they have viable aircart and munitions that are in production.
Airbus does not have the defense base.
I am not going to predict anything, but I can see a lot of volatility and upset in the world economies right now.
The Soviet Union is huge, but China is also looming huge as they never really dealt with Covid and its going to bite them (is). We keep getting new more infectious strains (if not lethal). The US has taken its hits (sadly too many) but also is moving to living with it as its not going away.
Our most vulnerable by enlarge have died or are fairly well protected. China is not and they have a hugely inferior vaccine. All we know is its going to bite them and that in turn means the supply chains get hit again. China will suffer the most but other economies will get hit hard until they can replace China (nothing they make can’t be duplicated, it just takes time)
Airbus had not made a sale in China for some time. Right now and for the next 2-5 years, they don’t need any more capacity (they are not using what they have as they have lock downs of various types in so many cities.
So we can just wait and see how this all plays out.
Maybe Putin gets disposed and some semblance of normality return but the EU will (or should) never go back to that kind of dependence on an unstable country that is not a democracy and may never be one.
Same goes for China and the US.
TBH I’ll take any time schedule from BA with a huge grain of salt, from the MAX’s return to service, MAX 7/10 certification to 787 delivery re-start and the infamous 777X program.
A lot depends on how fast FAA can inspect and certify each and every one of them.
There are many uncertainties: from would U.S. congress open the back door for the MAX 10 to slip past, to how many orders BA can gather and at what price.
TBH I would take BA’s skyline numbers with a huge grain of salt.
Too many past examples of BA failures, MAX 8 RTS, MAX 7/10 certification timeline, 787 delivery re-start and 777X progress and delivery.
Second corporate move in less than twenty years… things are desperate and when desperate people do desperate things.
Being in WDC area to be closer for payoff of the FAA and/or congress.
Or not. Chicago was a stupid place, Washington is as well. Dallas might be a good place.
Frankly it depends on the administration and the execs could stay in Washington as much as they wanted. I hear there is a lot of room in a Hotel there! Great rates.
After all, they sold BCA headquarters and you don’t need a fixed office, you just setup shop in the closest and good to go.
Only 700 people were in Chicago HO/Illinois.
Thats a tiny number , much less than Boeing locations elsewhere in states
I think it was chosen for the time Zone thing to allow best use of executive time in contacting the businesses across the country
theres already 3000 employees in Virginia/Maryland
The biggies are the 12,000 in California, 15000 in Missouri and 70,000 in Washington
Chicago was chosen because it was not Seattle and they got a big break on rent that was never enforced.
Its not like they get any real management out of Calhoun anyway. Put him in Washington and he has 4 hours a day less to annoy Seattle (well Everett and Renton)
A few floors of a high rise rent doesnt matter for a $100 bill pa revenue company
22,799 SF each high rise floor
That Chicago was a major airport hub for US and global flights mattered more than a $10 psft saving
Dulles is a major hub for the US and the World and Reagan is hub for regional.
Makes no difference. You can Zoom easily.
Boeing was supposed to employ 500 people in Chicago and never did.
Ergo, hollow halls.
They just move into the existing Washing Boeing Defense headquarter (already there) and life goes on. No big deal
So defense is there already to twist arms as it were, but so is NG and LM etc.
Its pretty much a nothing deal as Chicago was never personed anyway.
I am a former employee; someone in charge; needs to clean house. Airplane people and engineers are not running the company anymore and we are seeing the results. Boeing has also had a Toxic culture for years that needs to go the FBI system Fathers Brothers Influences. Because of those incompetent and unqualified mangers, at all levels productivity and morale are severely impacted. Boeing is a horrible company for women, there is a long history of cases of sexual harassment. Read the book I helped write with Polly Read Meyers Capitalist Family Values. Boeing also is impacted by managers who are afraid to discipline minority workers because they are afraid of those people playing the RACE Card. I saw two men who came ro work opened their tools box at the end of the day they closed it, and never did one minute of work on the airplane. I am one of a number of people who could have prevented the 737 Max-8 tragedy. Boeing management got rid of us. I was a Quality Investigator; I have friends who were engineers who sent home and still drawing a paycheck because they cared.Very sad; the first 787 fatal accident that is going to happen will involve a 787-8.
Yup, I won’t be surprised.
And I worked in a horrid toxic culture as well (not sex based) and it keeps clunking along.
Nope, there was no morale. I cut back my production by 75% for two years and no one noticed (as long as I went woof when the fingers were snapped, I was good)
We had people that did no work as well. They got more raises then I did (before mt 75% reduction they did not notice)
That said, I could have cleaned it up within a week. I took on the foreman job (they canned me) and I had the most useless guy in the world working.
None of the non workers was a minority.
If management works at it you can change it pretty quickly. Or it can limp along and or get worse
It is also worth mentioning that the FAA HQ is also located in Washington DC. Boeing has been steadily increasing the number of regulatory-capture execs (e.g. what they call “regulatory strategy”) on the commercial side in the DC area since 2016.
The FAA is a sprawling bureaucracy with many divisions.
The various airport and ATC functions take the most people
The FAA part ( AVS) that handles airliner certification is located in Seattle
The FAA has districts so the Midwest handles Kansas and while there are not LCA built there, there are a major number of biz jets, Caravan types etc.
Equally the district that encompasses Florida covers Beech (?) and Embraer.
That is an issue as they all have their own little fiefdoms and it should be uniform across all districts for build as well as repair.
Its one of the ugly aspects of the FAA not addressed, currently Washington has take over the N.W. districts direction as well as Charleston and you can bet your bottom dollar part of the issue is the annoyance of those districts at not being independent currently.
> The FAA is a sprawling bureaucracy”
Duke is right: we should just let the aircraft
manufacturers handle all that pesky certification themselves. Save money, avoid “bureaucracy”, and kill 346 people in two separate Boeing 737MAX all-fatalities crashes all at the same time.. what’s not to like?
That was as bad a statement as there ever was.
The aircraft cert (and maint) part of the FAA is much smaller and it can be and is workign right now.
ATC is a mess that should be spun off.
If we just quit, yea, it gets worse than the MAX tragedy as bad as that was. 787 escaped by the hair of its battery whiskers.
That said, EASA etc have let things slide and we all are a software problem away from a disaster, let alone a RR mechanical debacle.
Just another level on the House of Cards built by the BA Bored of Directionless.
When bA hq moved from Seattle to Chicago was the beginning of the downfall of Boeing.
When BA moved the annual meeting from Seattle to Huntsville years ago, Phil said he was impressed with Jack Welch, and the die was cast. Wuz there.
In Chicago-Boeing had to use armed guards inside the auditorium to protect the Bored members from any shareholder who might want to harass the Board. And that was in the early 2000s. I know that for a fact since I had two such sitting in front of me. One armed, and one built like the proverbial brick outhouse or ex linebacker who gave the appearance of only able to understand or respond to a few commands such as ‘ go-do- kill ‘ .
Ditto for the same type duo who sat across the isle in the same row. And that was AFTER the check of briefcase and purses in the auditorium lobby and after passing thru the checkpoInts at the bottom of the stairs going up to the auditorium.
Well they have good reason to be scarred.
I believe Northrup Grumman has its Headquarter in Washington as well.
If it makes Calhoun feel better maybe he will ok a new aircraft!
NOC moving HQ from L.A.
It’s a corp. disease spreading in America non-stop.
Much easier and cheaper to schedule long lunches, arrange escorts, etc and casual drop ins in mall across from Pentagon
I think on EADS ave ??
Boeing Defense has headquarter there already and the CEO is not going to make ankh difference
They also have to listen directly to the hits for screwing things up, better off in Chicago with a bit of spacing.
The General just drops in and chews out the CEO at 9 am each day! They will be sorry.
> Continued USAF support for the KC-46A fits into a pattern that has clearly manifested itself in recent years: throw good money after bad…and hope that, if flogged enough, the dead horse will eventually stand up and run.
Comanche, Littoral, Zumwalt, F35, KC-46,…
I think that those programs functioned *precisely* as designed: shoveling money hand-over-fist to the MIC.
So what if the “weapons” don’t work! It’s all cost-plus,
Dudes.. (note the new “fine print” on the KC-46™ vision system, for one superb example).
Of course that is why German, Finland and the Swiss (latest) are buying F-35 from the US. And C-130, Chinooks , P-8s, C-17 etc. The M-4 worked, the German G-36 quit working in the Sand box because it could not handle the heat. hmmm.
Issues yes, but we sort them out and its world class stuff.
I would rather be the US than the Soviets with the tank turrets blown off (aka Jack in the box) because the put the ammo in the turret (which we knew not to do in WWII by 1942 or 43)
Trained tankers are even harder to replace than tanks, turret goes boom the whole crew dies.
Problems and issues do not mean the baby goes out with the bath water.
Bryce just has sour grapes on the KC-46A, Aussies took 5 years to get their working.
The USAF played part of the role in the KC-X specs. Not all but some, and they agreed to all the Boeing designs.
We need A330MRT? Just borrow them from the Aussies, Koreans and the UK (ooops, forgot, the UK has no booms, sad, very sad)
UK doesnt have much need for booms outside a few planes bought from US
Germany is buying a small number of F-35 because its the only existing option that is certified to drop american nukes. And its useful for interoperability to have the same plane as our allies. The Eurofighter will remain the mainstay for Deutsche Luftwaffe. And if the french dont mess up the project with further political misgivings, FCARS will replace it.
Mounting nuclear weapons on the problem-plagued, *single-engined* F-35 seems like a really bad idea to me.
They dont use live nukes anymore unless its Defcon 1 or 2
And in any case they have command locks and codes to prevent even unauthorised use let alone an accident
US hinting indicated that qualifying any other (non US) airframe would take quite some time and/or founder.
“UK doesnt have much need for booms outside a few planes bought from US”
Its called allies and the UK cannot support us if needed with the aircraft the USAF has that require a boom.
That does not sit well on this side of the pond. It takes an asset and turns it into a liability.
“They dont use live nukes anymore unless its Defcon 1 or 2”
Is there such a thing as a dead Nuke?
Germany also gets a very good battle management aircraft.
The Typhoon has zero EW capability and now they are talking about making it an EW. That is why the Growler is so valuable, its developed. So the F-35 is also a filler for EW as well (now good it is remains a secret).
-> They dont use live nukes anymore unless its Defcon 1 or 2
Who know? I heard it’s the *new* Cold War, isn’t it?
-> And in any case they have command locks and codes to prevent even unauthorised use let alone an accident
Too many incidents …
1968 Thule Air Base B-52 crash
On 21 January 1968, an aircraft accident, sometimes known as the Thule affair or Thule accident (/ˈtuːli/; Danish: Thuleulykken), involving a United States Air Force (USAF) B-52 bomber occurred near Thule Air Base in the Danish territory of Greenland. The aircraft was carrying four B28FI thermonuclear bombs on a Cold War “Chrome Dome” alert mission over Baffin Bay when a cabin fire forced the crew to abandon the aircraft before they could carry out an emergency landing at Thule Air Base. Six crew members ejected safely, but one who did not have an ejection seat was killed while trying to bail out. The bomber crashed onto sea ice in North Star Bay,[a] Greenland, causing the conventional explosives aboard to detonate and the *nuclear payload to rupture and disperse, resulting in radioactive contamination of the area*.
Palomares Anniversary: That Time the US Dropped 4 Nukes on Spain
A half century ago, “fire and metal” rained on Spanish town after accident.
By LEE FERRAN
January 17, 2016, 1:01 PM
• 14 min read
On the morning of Jan. 17, 1966, an American B-52 bomber was flying a secret mission over Cold War Europe when it collided with a refueling tanker. Seven airmen involved, including all four members of the refueling tanker’s crew, were killed. But American officials feared much worse when they learned that the bomber’s payload, four B28 hydrogen bombs, had broken free in the collision and tumbled down towards the small Mediterranean beach town of Palomares, Spain.
And at least one nuke was dropped on/in U.Sby accident
Did not go critical but as I recall 2 of 3 locks tripped.
TW:”German G-36 quit working in the Sand box because it could not handle the heat. ”
G-36 performed to spec. AFAIR none of the other users thinks the G-36 is a dud.
IMU this was political chicanery by Poison Viper v.d. Leyen and her transatlantic entourage.
> IMU this was political chicanery by Poison Viper v.d. Leyen and her transatlantic entourage. <
Nicely said. Her background makes for some "interesting" reading.
-> “I think it’s fair to say that Boeing has lost its way,” Slattery told the Airfinance Journal conference in Dublin, a gathering of the world’s aircraft lessors who together own most of the world’s passenger jets.
“Boeing has to fundamentally re-imagine its strategic relevance in the marketplace,” he said, adding that this would require “fresh vision, maybe fresh leadership.”
-> Shares of Boeing fell to a nearly 1-1/2 year low last week after the U.S. planemaker posted a quarterly loss, unveiled $2.7 billion in charges and added costs and expressed doubts over hitting 737 MAX delivery targets. read more
Boeing also announced it was halting 777X production through 2023 and failed to specify when it would resume deliveries of its key twin-aisle 787 Dreamliner model after a year-long halt.
“They are *burning cash at an unprecedented level*. They’re probably going to *get downgraded*,” Slattery said.
“Boeing has a storied history…They build great airplanes. But it’s said that culture eats strategy for breakfast and that is what has happened at Boeing,” Slattery said.
A succession of crises from fatal crashes that led to a two-year grounding of the 737 MAX, to external regulatory pressures that interrupted 787 deliveries and delayed the 777X, have left America’s biggest exporter badly shaken, another top buyer said.
Maybe the move to DC reflects a management reappraisal of the company’s core competancy: lobbying.
To put it another way:
Cost of growing sales by developing next commercial airplane – $15 billion.
Cost of growing sales by lobbying to win more DOD handouts – have no idea, but has to be way less than $15 billion.
Records of Boeing lobby cost are in the 13 to 15 Million range. Note I said RECORDS. Boeing has a few dozen ‘ related ‘ companies.
If you want the best-buy the best .
” Cost of growing sales by lobbying to win more DOD handouts – have no idea, but has to be way less than $15 billion.”
Closer to 15 MILION per public records.
“Being down the block, so-to-speak, from the Pentagon, and across the river from the Hill (Congress) makes all the sense from a corporate perspective.”
AKA: The Cantillion Effect!
Northrop Grumman Corporation. 2980 Fairview Park Drive Falls Church, VA
Lockheed Martin 6801 Rockledge Dr, Bethesda, MD
BAE Sytems ( US HQ) 2941 Fairview Dr Falls Church VA
Airbus USA 2550 Wasser Terrace #9100, Herndon, VA
All suburbs of Washington DC
Told you soT
Thats not what Cantillion effect is which is related to money supply
Cantillon had a theory in which the beneficiaries of the state creating the currency (i.e. Keynesian money printers) is based on the institutional setup of that state. This essentially means, “he who was close to the king and the wealthy”, likely benefited from the distributional choices of currency through the system.
Consider first that 80% of all US Dollars in Existence Have Been Printed in Just the Last Two Years.
The effect states that those who benefit from the expansion of the money supply are the ones who receive the newly created money earliest since they have the advantage to purchase assets before inflation is realized by the market. Once the newly created supply makes its way fully into the market, the prices of assets have risen driving them further out of reach for the poorer class.
Any of the above sound familiar, say if you want to buy a car, a house, a gallon of gas, even a stack of 4×2? During this period we have had an unprecedented assault by the state on our civil liberties and now yet another of America’s “forever wars” in eastern Europe. A modest 3% increase in US interest rates would add $3.5 trillion in additional interest payments on outstanding debt, a figure greater than the entire US corporate profits for one year. Boeing is on the ropes, itself dependent on pursuing a rent seeking model to survive.
Side by side with chronic poverty and deprivation, D.C. and it environs has the greatest concentration of “Cantillonaires” than any other point in the entire US. Perhaps the planet. None of these things us unconnected. None.
“Any of the above sound familiar, say if you want to buy a car, a house, a gallon of gas, even a stack of 4×2?”
Fastship, I’m calling BS on you. A stack of 2×4’s?
I heard Elon Musk was thinking of buying a stack of them, looked at his finances and figured he didn’t have enough, so he went and bought some social media firm, instead. Nobody has that much money…
Dollars in circulation is a very different thing to the Fed Reserves creating US bonds and buying bonds of large corporates. They would largely be just electronic entries in accounts not even bod certificates these days
Bonds arent dollars in circulation
$2 trillion 2008-2010, $0.5 trill 2010-2014 2020-2022 $2 trill
-> To execute quantitative easing, central banks (i.e. the Fed) increase the supply of money by buying government bonds and other securities
Look up how central banks create money/increase money supply.
Money supply is a number of factors , actual currency in circulation is only a small part of it.
$20 trillion … The currency in circulation is maybe $50 bill
The general form of a Cantillon effect is that there is increased money coming into an economy from somewhere..
Excellent roundabout way of describing a Coreleone insurance policy
Economy has 5 sides- somewhere is not over the rainbow and clouds of money dont drift by but often rain in dry places
-> An honor to discuss #TeamBoeing’s *commitment* to India!
-> Calhoun highlighted our continuing efforts to strengthen India’s growing aerospace and defense industry through our investments in engineering, manufacturing and research, and the work to improve skills and grow our supplier-partner network across India and on a global scale
=> A foreign private company “committing” to make INDIA self reliant, oho
And now Boeing CEO will be handy to chew on for all his screw ups.
He is going to rue the day he moved to Washington!
We should buy that stuff why? (they will of course but its always fun to beat up on someone in person and twist their arm to cut you better deals for what they have messed up)
Same with NASA. Your rocket does not work why?
I suspect your comments are getting a bit tiresome and seem to be designed to stop/close this thread and discussion
Please stop with the ad hominem
I’m not sure that this is the real Bill7. I think someone maybe someone is using the handle. It seems a little too much for Bill. I guess Scott will sort it…
I am stoked beyond belief to have engaged, astute, and articulate commenters like Tranny,
and Duke of Fascism, to guide me in my own confused thinking. They are true Guiding Lights.
even if they arise, and depart, from and to Nowhere in Particular. Tha’s the Amerikan Way..
dukie/tranny, I thank you again for your services (though not yours to me, Friends.)
I really think that this will go down in [trivial] history as our Alaskan correspondent’s finest
“All ‘[Boeing] needs is a new airplane”
[Edited as violation of Reader Comment rules.]
Mods, once again this commenter is resorting to extreme abuse
For what its worth it does not bother me.
I was abused by experts for many years. Quoting from the Holy Grail, its merely a flesh wound.
And when people resort to name calling or the falsehoods and illogical and unsupported argument we have seen then you know they have been shot down in flames discussion wise.
I did that for many years with our narcissistic manager. I just had to wait while he did it in front of the client and down in flames he went. Fun stuff in a bad situation.
Scott on the other hand has a need to maintain decency on his Blog, so whatever he decides I agree its his blog and he can deal with it as he wants.
Sometimes I disagree with him, but I do not disagree with his right to handle his blog how he sees fit. I may say what I feel on the disagreement but not his decisions.
Scott displays a lot of patience & forgivingness, which is to be respected. I guess it comes with the years.
I’m pleased to hear esteemed commenter Bubba2’s opinion.
Perhaps we should take a moment to consider the different subsidy models in Europe and the US. Boeing moves about for tax breaks to the detriment of the business and the benefits are just spent on share buy backs
At least when Airbus receives launch aid in the form of loans, it is spent on the product. The royalties returned to the governments on the A320 and A330 had to be relaxed because they were making too much profit.
Don’t get me wrong, both corporations are engaged in dirty tax payer rape and I am massively simplifying it, but one model seems to be a much better idea.
“At least when Airbus receives launch aid in the form of loans, it is spent on the product. The royalties returned to the governments”
reason why that (rather productiv) RLI instrument must be killed at all cost. :: 20 years of frivolous litigation.
I agree with that for Airbus. I don’t know its worked well past Airbus though.
US Corporate greed and the public trough thing is capitalism run wild. That can indeed destroy the US as a democracy as it enable the extreme right wing in its endeavors.
Flip is the EU insanity in becoming severely dependent on Soviet Gas and Oil.
Both sides have issues that are bad for democracy. Both sides have some very good end results. If we cold combine them into best practices we would have a promising future for both sides of the pond.
The F-35™ continues to do God’s Work: shoveling even more money to the Rich:
> WASHINGTON — Under current estimates, the U.S. Air Force will reach a tipping point where projected F-35 sustainment costs become too expensive, forcing the service to either cut its planned buy of the Lockheed Martin-made jet or drastically reduce flying hours, the Government Accountability Office found in a new report.”
Peace on earth ✌
“We lose money on every single plane (Boeing KC-46A), but we’ll make it up in volume.”
Or support contracts. As long as Boeing breaks even we are to the better for the defense of the US and our allies.
We can’t change stupid decision that lead to the F-35 issues not the KC-46A issues. We should be able to fix them.
Clearly Finland made a decision based on a very independent entity that they feel is the best option. They had no investment in the F-35 and they are one of man countries that feel its the best of what they face.
In light of the Soviet Air Force failures its looking pretty damned good.