Aug. 15, 2022, © Leeham News: Airbus now has nearly 800 orders for the A220, but the program is years from profitability and production faces supplier challenges like those facing the Airbus A320neo and Boeing 737 MAX.
Passenger experience easily exceeds the older design A320 and 737. The A220’s 2×3 seating, 18.5 inch window/aisle seats, 19-inch wide middle seat and wide aisle draw kudos. The windows are larger than the older airplanes. Economics are better than promised by Bombardier, which designed the airplane as the C Series.
Development costs, neglect of the Bombardier Q400 and CRJ programs and concurrent development of two new corporate jets nearly bankrupted Bombardier. To save itself, Bombardier exited commercial aviation and killed one of the two corporate jet developments. The Q400 program was sold to Longview Aviation, which rebranded the turboprop its original name, the Dash 8-400, and adopted the legacy company name, De Havilland Canada.
The CRJ program was sold to Mitsubishi Heavy Industries. MHI had little interest in the CRJ regional jet. Interest was in acquiring the CRJ global product support and MRO system as a groundwork for the M100 SpaceJet it was developing. (MHI later changed CEOs in its policy of rotating the leadership. The new leaders killed the SpaceJet program, the reason for buying the CRJ in the first place.) MHI last year seriously considered restarting production of the CRJ. This idea was abandoned only last month.
The C Series was sold to Airbus in 2017, the first of Bombardier’s commercial programs to go. The impetus was a complaint filed by Boeing with the US Department of Commerce in 2017. While Commerce was assessing the complaint, Bombardier agreed to sell 50.1% of the program to Airbus. BBD was committed to fund construction of an assembly plant at Airbus’ Mobile (AL) complex and cover up to $700m in losses. (Commerce eventually upheld Boeing’s complaint and levied a 292% tariff. But the required review by the Court of International Trade found Boeing suffered no harm in a deal with Delta Air Lines that triggered the complaint. The CIT’s finding killed the tariff.)
Bombardier was unable to fulfill its commitments to Airbus, which eventually bought out Bombardier’s remaining share of the program. (A Quebec, Canada, pension fund still retains about 25% ownership of the program.)
Airbus recognized that Bombardier’s cost to produce the C Series was a challenge. LNA in 2016 estimated Bombardier’s cost, including General and Administration (G&A) and other overhead, was about $33m. Airbus at the time concluded the cost of only the airplane was about $24m.
In its complaint alleging Bombardier price dumping with the Delta deal, Boeing calculated that before credits, the price to Delta was $24m and $19.6 after credits. Bombardier, which took a $500m “onerous contract charge” for the Delta and Air Canada sales, claimed the Boeing figure was millions of dollars too low. (Remember, G&A and other overhead costs are not included in the $24m cost.)
Market intelligence indicates that Airbus is having difficulty cutting costs. Raytheon Technologies units Pratt & Whitney and Collins Aerospace are said to be especially difficult. So, other intelligence indicates, Airbus is raising the sales price of the A220 to around $40m. This figure boosts the Direct Operating Costs to challenging levels for some operators.
Headlines and stories about delays encountered by Airbus and Boeing focus on the A320neo, 737 MAX and widebody lines. Supply chain problems also affect the A220. Recent deliveries were around six weeks late. Traveled work, due to missing supplier parts, are partly to blame.
Quality control issues are cited by at least one customer taking A220s from the new Mobile (AL) assembly plant, which opened in 2020. The Final Assembly Line is still young in the complex aerospace learning curve process. The first A220 in Mobile was assembled on a line shared with the A320/321neo line.
Airbus publicly stated that it needs to get the production rate up to 14/mo between the Montreal and Mobile plants as part of the efficiency and cost-cutting drive to reach profitability. How the $40m sales price may accelerate break even has not been calculated outside Airbus. However, when Bombardier still owned the C Series, an insider said it would take 1,200 sales to break even, given the $2bn in cost overruns at the time. A normal airplane program (of which there have been few in recent years) targets 400 sales for break even.
Bombardier designed a CS500 when it developed the C Series. The CS500 would be a direct competitor to the A320neo and 737-8. Under the Airbus brand, the airplane is known as the A220-500. Officials have been clear this model won’t be launched until after 2025, when profitability is achieved.
Category: Airbus
Tags: A220-300, A220-500, Boeing, Bombardier, Delta Air Lines
-> (A Quebec, Canada, pension fund still retains about 25% ownership of the program.)
Scott: I believe it’s the province of Quebec which invested in (then) Bombardier’s C Series program, not the province’s pension fund, Caisse de dépôt.
https://web.archive.org/web/20170929092025/https://www.thestar.com/business/2015/10/29/quebec-government-says-aerospace-industry-bombadier-cseries-too-important-to-give-up.html
More precisely, the shareholder is Investissement Québec, a Crown Corporation which is the “investment arm” of the Québec Government.
At $40 million a copy, over the life of the airframe I wonder if it is safe to say the A220-300 is a wiser purchase than the B737-7 and the A319Neo under most circumstances.,… This would take in acquisition costs, landing fees, CASM, RASM, passenger loyalty created, pollution concerns (penalties,) training, everything. If not, Airbus would hope to make money on the -500, but to do so, they may have to usurp it for the A319, and the A320, and that is a decision still down the road. It would be a shame if the program was killed prematurely.
> It would be a shame if the program was killed prematurely.
I don’t think there’s a danger of that happening, as the A220 is well-positioned.
placeholder.
Hello Bill7 – I’ve noticed you often post comments with nothing more that “placeholder.”. Do you have a script or some automated posting mechanism running amok? Is there any way to prevent these placeholder comments?
If I wish to read all comments as they come in and plan to respond to a post, but have nothing yet to say, I post that single word once per relevant thread.
I apologize if it’s a trouble.
It is a bit of noise in the channel. Why not just respond when you have something substantive to say?
I’m a little surprised that a one-word comment that’s *useful for the purposes I already described*: being fed to my email- elicits such strong feelings. Perhaps your true issue lies elsewhere?
“…Airbus is raising the sales price of the A220 to around $40m”
Is this before or after customary discounts?
The list price (before discounts) of the 737 MAX-7 is $99.7M — which would thus have to be discounted 60% to match the new A220 price.
The A220 was clearly a brilliant move by Airbus. They will get it dialed in on costs.
This airplane is a winner and the operators love it for its economics and customers love it for the cabin comfort.
It’s so ironic, in 2016 Boeing files a trade complaint against BBD for unfair practices on the sale of 100 C Series to Delta, saying they sold them at cost…… that’s not fair!
Then only for Airbus to swoop in for the kill and buyout the program and eventually build them in Mobile. Brilliant!
Meanwhile at the same time, Boeing was doing everything to hide the certification problems on the mad max.
Yet recently at Farnborough, Boeing has a big mad max sale to none other, Delta and we all know the sale was basically at cost.
This is what I mean about Boeing’s arrogance.
Where’s the trade complaint? Funny isn’t it, ethics be damned.
The more things change, the more they stay the same.
How the mighty have fallen.
Not just Delta: we also know that the MAXs sold to Southwest had unsustainable margins. And it’s a fair assumption that the same applies to Akasa and Ryanair, for example.
Farewell 5th Avenue…Hello Skid Row.
All these discounts are spread out over the coming years and are likely to be masked by boeing’s return to profitability. Only until all the production has achieved full swing will the full impact of all these discounts be visible.
At the moment, Boeing still claims poor performance due to the suspended deliveries of B787, delays of B777X and B737max still not running at 57 units/mth. All these are just good excuses to cover up the loss of profit margins due to heavy discounts.
Wonder how the market will react to boeing commercial raking in only one fifth of the profit it used to.
Vince:
For what its worth I saw a figure of 40 x 737 last month for Boeing. If interested I might be able to dig that link out.
I would not say Boeing is claiming but in fact is having poor performance and yes its due to the issues with all 3 of the current BCA models (737 is getting going).
But Boeing also wrote off a lot on the Defense side, worst was AF1. So in reality, its down across both sides of the company.
Boeing will begin to show some profit this year, but not the kind of profits that were in the heyday of dividends and stock buy back.
Long term the market will try to price Boeing stock where it should be. No question that there are blips and as Greenspan once said, excessive exuberance.
There are some upsides in all of it. The 737 clearly is going to return to profits (I will leave it to AP as to it ever recovering the losses). Same with the 787. Both are viable products. The 787 could easily run another 20 years.
KC-46A looks to get an extension and the T-7 program should make money once it gets going full rate (and lots of future sales).
The stock assessment I leave to the experts. All the machination involved in it make my head hurt. Go AP
BA delivered just 23 MAXs in July…
Any different from saying you’ll enjoy longevity as long as you don’t die?? 😂
Most contracts have cost increases built into them and with todays inflation it should kick in and increase prices for future deliveries. Boeing can play with aftermarket revenue with spare parts prices, still if they mismanage its remaining 737 customers will flee to Airbus for future orders.
What I don’t get is why Boeing have fallen into this situation. People (including their own engineers) have been saying for decades that they must ditch the 737 line and do a new product.
It must be a very special form of business myopia, drilled into MBAs in years and years of training…
Boeing has been behaving like British Leyland (the nationalised car industry of ill repute back in 1970’s UK). BL basically tarted up the same old models with the same old problems year in year out, never really making any technological advance of any real merit, whilst the Japanese came into the market with cars that started first time on a cold morning, never broke down, needed minimal servicing. Guess what happened to British Leyland…
[And if any BL enthusiast who has escaped the asylum and leaps to their defence, I’ll preempt that with “Triumph Acclaim”, and “Morris Marina” for good measure]
Boeing’s line for decades seems to have been that you can fly the aeronautical equivalent of a BL car in your airline’s fleet. Trouble is, everyone else (well, Airbus) are selling far better aircraft.
The comparison to British Leyland is perhaps aptly foreboding. Today, the amount of car building that happens in the UK is bigger than ever, but it’s all Japanese owned. Are we going to see in the USA an increase in airliner production, but with Airbus badges and hood ormanents?
First, the A120 is a masterpiece, I prefer it to either the 320 or the 37.
As to why the max was created, the customers wouldnt pay for a new 37 replacement. BA tried, but the customers told them no we want another derivative instead. Its sort of difficult to fault BA for building something their customers said they wanted……
BA is well able to ignore the market and force a decision upon its customers. Examples:
– Discontinue 767 — “you’ll just have to buy a 787 instead”.
– Discontinue 757 — “you’ll just have to buy a large 737 instead”
– 777X : Essentially a repeat of the 747-8 flop — “Full steam ahead and just ignore the icebergs”
At the end of the day, BA is now stuck with a dollar store dinosaur without FBW or EICAS — and nobody at BA saw that coming?
Bryce…. when you wrote “BA is well able to ignore the market and force a decision upon its customers”, you missed one small point. All the programs you listed were launxhed with a presold customer base. BA has never built a jet airliner ON SPEC. They all have had launch customers…. Your point that BA could have proceeded with a new airplane progtam on spec while remotely poasible, is such a huge brisk that it would.never happen in the real world
@ PNWGEEK
I didn’t refer to the *launch* of the 767 and 757 programs — I referred to their *termination*.
Termination is also a product decision.
You might want to look at 757 sales and passenger 767 sales in that era before you criticize Boeing for terminating the 757 and launching the 787.
Boeing announced cancellation of 757 in late 2003. In 2003 they had sold 7. In 2002 0. In 2001 37. In 2000 43. For comparison the 737 sold 173, 223, 290, and 280 planes each of those year respectively. Boeing didn’t have to tell airlines to go with the 737- they made that decision themselves.
The 787 has outsold the entire 767 program in like half the time. Hard to call it a bad product (it’s execution on the other hand…).
@ Whynot
In an article a few months ago, LNA pointed out that it would have made much more sense to keep (and broaden) the 757 program and instead dump the 737 — if BA had done that, it wouldn’t be in today’s bottomless pit.
@PnwGeek, I think that Boeing could have resisted that if they’d had some gumption. They may have lost a few customers to Airbus, but not that many; Airbus alone can’t even begin to hope to supply the entire market.
Even if Boeing had taken a few years long sales holiday to build something brand new, coming back to the market with a stronger, newer, better contender would have always been a sales success.
Mathew:
You really need to put it into tech perspective. Both the Brit cars and the cycles were in an era where there was a huge impact by Japan on both (care and cycles in the UK and more cars in the US).
Tech wise it was not all that new, what was new was quality wise (as well as the right size for the post oil debacle). Honda, Toyota etc used current tech and made it reliable.
But if you look at Aerodynamics, that saw an insane period of tech changes from inception to WWI and then while it was refined, another huge jump late 30 and on through WWII and the early cold war.
At that point you have to split off electronics and tech (jet engines). Between aerodynamic and jet engines maturing, the 737 can match the newer A320 and is only getting challenged at all by the A220 with the full engine and aerodynamics suite they have now (GTF and Composite wing).
Its an area Boeing could get away with and has even now. The MAX matches the A320 and in a truncated form range wise, the A321.
Even the A330NEO and the 787 are not all that far apart.
So unless there is some major leap in Aerodynamics its incremental and the older stuff (A320/737) is viable. While the GTF is ahead of the Leap engine its not that far.
The quality between Boeing and Airbus is about equal as near as I can determine (Boeing has had some meltdowns).
While electronics have been huge in cockpit changes (well other than the 737!) they have not gained efficiency though there is an argument for safety (something I wonder about, it seems to me its more less capable pilots until something goes wrong)
Menteur pilot did one on a 737-800 that due to major bad pilot decision wound up doing 7 approaches in India and on its last legs for fuel.
While the Menteur Pilot series is focused on improving safety, you see the same mistakes over and over and over again, just different airlines. Its like watching whack a mole.
You have to remember the race in computer speeds until they all realized that it was nonsense and the fastest chip was no better than the whole chip set and hard drive with incremental using solid state hard drives.
Now its really all about software. Sure you get larger and larger hard drives but they aren’t faster.
Once an area matures then its incremental gains unless there is a breakthrough. Aerodynamics just don’t have that breakthrough and I don’t see it on jet engine (refine GTF yes) and aerodynamics a lot is being experimented with but you have to get it into produion and that includes people buying into it (blended wing aircraft with windows far away though I don’t think that is the issue they claim)
In the end its let Boeing get away with it though they should have replaced the 737 two generations ago. The 767 is still a viable build freighter.
The 737 has been exempt from some safety rules since the 737 classic. Further iterations, NG and MAX, got the same exemptions.
Now there is a deadline for the end for one of this exemptions after 38 years. And what is Boeing doing, threaten to shut down the 737-10 if they do not get an exemption from EICAS for the 737-10 past the deadline.
One should also not discount the advantage of a complete fly by wire revolution. Fly by wire gives a fuel burn reduction by itself and is adaptable to new ideas.
The 737 can only match the A320 largely thanks to its ancient narrow fuselage (at the expense of comfort): 3.76m vs. 3.95m
jochum:
I don’t discount it and clearly its taken over LCA design and working down the chain to lower tiers all the time.
I really don’t like the 737 hand wheel elevator trim backup. They have proven its iffy under certain flight conditions and clearly its a huge distraction as well. Why that was not addressed in the revamp of the MAX I do not know (also all prior 737s, its a 50s design or solution that was ugly back then).
Yes electronic cockpit (not necessarily FBW) gets you some fuel economy improvements, they just are not huge.
The 737-10 changes don’t address the real issues in MAX (or NG) and they split the cockpit commonality for flying what is like one type but you have to react to a whole different system.
If the new alert system is that important safety wise, then it should ground the whole MAX types until its on them and the NG should be grounded as well.
@Pedro, Yes the difference in fuselage diameter helps the 737MAX with reduced mass and drag, the wing is up to date and its engines just a tad worse than the LEAP-1A, that combination keep it alive besides its reliability as good as the A320neo. The 737-10 will work fine US domestically and for EU charter/Ryanair operators. Still the A321neo is not standing still and will get better by time (now 34k engines are cerified giving a bit extra flexibility). Boeing did not want to kill its cash cow until the composite robotic production process is proven and they can make its fuselage cheaper than buying 737 fuselages from Spirit and hopefully be ready when GE/CFMI has a new engine with 15-20% better fuel economy. It will take time…
The BL comparison lacks.
The 737 product is not prone to break downs or in need of massive maintenance.
What it lacks is all the improvements introduced over time to achieve more benign crash behavior.
Crashes are rare. ( and even here we look at number of crashes and not at scope of damage )
I suppose customers would pay more for an up to date design that sufficiently outperforms the A320NEO.
Coming from the 737 Boeing would have to double the required improvements: compensate for loosing the grandfathering advantages AND distance the competing product.
“..Coming from the 737 Boeing would have to double the required improvements: compensate for loosing the grandfathering advantages AND distance the competing product.”
That is a very good point.
@Uwe, “Boeing would have to double the required improvements:”
That’s a reasonable thing to say in the short term. But Boeing has, for a very long time, been about nothing but the short term.
At some point Boeing are going to lose the grandfathering of the 737, either regionally (Europe, China) or globally (even the FAA call quits on it).
I don’t think many quite realise the implications of the actions of the global regulators to ground the MAX, independent of the FAA and the company. What that has cemented is that if a regulator decides they can no longer “trust” that an aircraft can be safely operated, they must / can / should act to safeguard their public, first and foremost. Global coordination and cooperation comes second. It also cements regulator liability; they are responsible. They can’t pick and choose when to intervene, to avoid upsetting another regulator.
Just accepting another regulator’s word for it is risky, especially for a 60 year old and out of date design relying on “grandfathering” which, rather than being fundamentally sound from a safety point of view, is very much a let-off in the interests of short term profitability. It is morally indefensible, and increasingly so.
Extend that out to Boeing seeking to get yet another 737 variant into the sky. Unless they’ve got a cast-iron guarantee from said regulators that they will accept grandfathering, Boeing are running a business risk of losing that market segment when the MAX’s time runs out. Of course, no regulator will ever give such a guarantee, and if asked is more likely to say “no” today than “yes”.
That would be devasting.
I’d argue (and I suspect many engineers would too) that a new design is a necessary thing. An up to date design built properly is guaranteed to be globally certifiable.
It would restore sales margins, which would come in handy. It’s pretty certain Boeing aren’t really making much on the 737 anymore, or anything else.
Uwe
The entire reason the NG, and later on, the MAX happened was that the operators of 737 did not wish to purchase the clean sheet non-derivative aircraft shopped to them. The major operators did not wish to expend the Capex to establish new fleets when they were making money without a fleet replacement investment. That is why Boeing is continuing to build derivatives of the 737, their customers demanded it. You cannot fault a company for building what their customers say they want. This is not a business where you build new aircraft on spec and then peddle them, the dollars involved are so large that risk needs to be minimized wherever practical. The nice thing about the end of narrowbody derivative aircraft is that everybody gets forced into the same mold, and the next generation of aircraft is probably on hold until powerplant technology makes sense for airframers to do the PD work and sell them…..
“Just accepting another regulator’s word for it is risky,….”
The grown over time hurdle is the partisanship of the US regulator. ( and about any other organization that could be leveraged into being lock-stepped to US interests. ( IMU this is nothing but fascism at the core.)
“The entire reason the NG, and later on, the MAX happened was that the operators of 737 did not wish to purchase the clean sheet non-derivative aircraft shopped to them.”
This is the regular American culture cop out:
We were made to do …
In the real world Boeing offered a diffuse product with no time line for creation and no path for realization.
I.e. the counter to the NEO was nothing but a FUD campaign. ( a dozen years later Boeing still lacks a focused image of where to go while floating BS words on how to get there.)
Obviously airlines want it cheap. To limit that desire entering a risky path certification requirements tend to be upgraded to fit state of the art knowledge. And the FAA was regularly busy to hold foreign manufacturers to that metric.
But Boeing invariably got the lenient eye.
Bryce
Spot on!
We both know that Michael O’Leary won’t buy a Boeing jet unless it’s at or below cost. And look how Boeing bows to developing a special one off derivative (mad max 8-200) for one customer… RYR. Just so the executives can continue to back slap. The costs of doing this are enormous. Who’s doing the cost benefit analysis at Boeing 🤷♂️
We don’t see Airbus doing these silly program. Their strength is the product line up. All FBW airplanes.
The development costs of slapping an extra pair of exits on to a Max 8 (which were already developed for -900ER/Max 9) are not enormous at all. It also has more than one customer- Vietjet, Akasa, IAG, Allegiant, and Arajet have all ordered the plane in addition to Ryanair.
It’s a strange criticism to make while ignoring that Airbus completely redid the A321neo exit configuration (after program launch) to better play to that aircraft’s strengths.
Whynot
The development costs of slapping an extra pair of exits on to a Max 8 (which were already developed for -900ER/Max 9) are not enormous at all. It also has more than one customer- Vietjet, Akasa, IAG, Allegiant, and Arajet have all ordered the plane in addition to Ryanair.
Absolutely correct. The process would be to substitute two new skin panel assemblies replacing the non-exit equipped skin panel assemblies, change the wiring bundles appropriately and make new cabin sidewalls. Easy to do with little expense.
Airdoc:
A380 and A340 ?
Even better example: A321ACF.
Stupid Boeing playing around with exits. Airbus would never! Because FBW.
TW
Really that’s all you have?
Ok so both didn’t make the market numbers, but technically they were certified and on time.
The A380 sold a heck of a lot more than the 747-8I.
Ask Emirates what they think of the A380.
You’re so frivolous.
@Airdoc:
The A380 was many things. On time and on budget are never words you should use to describe it though. Only the A400M rivals it as most screwed up Airbus development.
Man, that bit of sand under my big toe really gets annoying. Like listening to Louie Louie over and over again.
Airdoc:
Dang I was hoping to not be frivolous, just listing some disagreement on smooth sailing as it were.
The A380 was not on time. The A350 went through how many variation of A330 2.0 to 4.0 before they moved to the A350 (then to be resurrected)
The A340 was a failure (its worth looking at the sales agreements where Airbus buys them back if they don’t meet X conditions which was pegged to in service and revenue as I recall)
I would rather be Airbus than Boeing in the Commercial Airline aspect but I also like to keep history correct. The A350 was a 25 billion dollar loss.
A380F failed before takeoff, the 747-8F sold nicely (sorry to see its demise but sales were gone though there are some pretty new ones to be picked up someday)
Airbus wrote off the A380 and got on with life. Boeing has the 787 in production (again) but has not written off the losses. I think Airbus is vastly better way to go.
Every company makes mistakes (or worse) but its beyond a benefit to make those lessons learned (if possible) and get on with the world.
> We don’t see Airbus doing these silly program. Their strength is the product line up. <
That, and not sh!tting on their employees [some call them "workers") and suppliers..
IMU the dumping definition in the US is “special”.
(“below cost”)
Here (Germany) afaik dumping is selling below the pricing in other (i.e. manufacturer home ) markets.
Boeing cannot be accused of dumping the max because it an american company selling in the american market. So even if they sell the plane at $1 each it not dumping. Typical american double standard.
Typical American “Exceptionalism”. One set of rules for us and one for everyone else.
Bluedog:
The dumping provision was supposed to be a protection from external dumping, not internal.
Boeing is not going to sell a 737 for $1. they have shown Airbus they will cut margin for a deal (Hawaiian).
Perhaps the most famous dumping case was Harley Davidson who then used the grace period to improve their product dramatically (after a series of management debacles).
Japan was dumping cycles on the US market. Harley got back on its feet and is still going (hard times for cycles so who knows).
Harley took the dumping tariff off early in a nice PR move as they had most of what they needed at that point.
I don’t see it as a double standard though I do think it was a mis-application by Boeing as all aircraft mfgs sell at a loss and recover (or try to) the initial high costs over a production run.
While not the way it should have the system worked in the end as Boeing was ruled against.
Still it got us a production line in Alabama for the A220 and after loosing production for so many years overseas, kind of nice.
How is profitability meant by Airbus with regards to the 14/month number? Is this rate needed to achieve pure production cost>aircraft price or production&amortisation&developement cost per aircraft>aircraft price?
For if it is the first one, 2025 seems awfully late for not losing money with every produced aircraft anymore. The C-series has entered service in 2016 after all.
Remind me how “profitable” the 87 is right now?🙄
So “profitable” they couldn’t wait to restart production and deliveries!
Hahaha…
deliveries… exactly 4 until “deliveries come to a screeching halt again”
Everything for the stock value to be pumped up
Walter:
Good question but also it took the A220 off the table that Boeing needed far more than Airbus.
Now if Boeing had got it? At the time for sure they did not have Airbus long term outlook.
I love the A220.
But its also mixed in that it does not have a common cockpit and it may well be a wash true profits wise long term. Accounting has nothing to do with reality and all to do with what you can juggle.
It does give Airbus an efficient A320 replacement though many operators may not want to give up the A320/A321 duo.
For now its great to see the A220 in safe hands and production for the next 20 -30 years.
What does the profitability of the 787 line have anything to do with the A220’s profitability, or the comment you responded to which did not mention the 787 or Boeing at all?
Anyways to respond to Walter Faber it means pure production costs<aircraft price. Right now every time Airbus delivers a A220 they lose money. The A220 program technically has a long ways to go to pay back development costs but that really doesn’t matter to Airbus since they didn’t pay out those costs (BBD did).
Thank you for the explanation!
Off this topic that relates to 737 and engines (MAX), the question was asked before. Scott posted a fire walled write up. This is a quote from that report that cites Scott (lightly edited). Not intended as a discussion item but an explanation of a prior question. I will make no further comments on this.
” Boeing is free to swap engines as needed until then. Boeing also has taken seats from some aircraft to install on new production airplanes, LNA is told by multiple sources. Supply chain shortages prompt this action.”
BA insists the 87 is still cash positive. What’s not said is BA not able to cover the overhead plus R&D; eleven years after EIS.
The A220 is in the exact same boat, except it is taking ~9 years just to get cash positive-even the 787 didn’t take that long. 2025 is just when the A220 will start contributing to paying off its R&D costs. But like I mentioned that doesn’t matter much to Airbus since they didn’t pay (most of) the R&D costs.
And I want to remind (can’t edit post) that the deferred production cost “overhead” is purely and accounting exercise- Boeing paid them as they were incurred but did not include them in balance sheet. Boeing could write them all off today (and report a massive loss for the quarter and year) but that won’t suddenly make tomorrow’s 787s any cheaper or more expensive to build.
1) It’s a projection from AB. What happened pre-covid is not the same right now.
2) You have to go back and look up BA’s R&D during the 87 development. It’s tens of billions.
3) Not true. BA’s deferred production costs is a B/S item.
It’s simple a/c concept that many here failed to grasp!
4) BA had no other choice but to write off half of 87’s deferred costs (notwithstanding R&D spent is not included in deferred costs). It proves: the 87 program is a net money loser before recovering a penny of R&D spent, never mind the overheads.
Just because something is on the B/S doesn’t mean it is or should be included in production costs when determining if something is *cash* positive. Balance sheets include non cash items!
Obviously the 787 will likely never pay back all the money Boeing spent on it. But since time machines do not exist and Boeing can’t unspend the cash already paid out in R&D and deferred production costs achieving maximum cash positive rate is what Boeing should be doing.
-> “The A220 is in the exact same boat, except it is taking ~9 years just to get cash positive …”
False claim!
Clearly you confused profitability with cash flow.
Oh BTW “Balance sheets include non cash items!”
What the hack are you talking about??🙄
And clearly you do not understand Airbus’s comments about the A220 program and what they mean by profitability. The plane is not yet cash flow positive 😉
You clearly don’t understand the concept of money being already spent and not yet accounted for in balance sheet. Boeing does not owe suppliers/engineers/vendors money with the deferred production costs. When Boeing made recent charges to the 787 program they did not spend any money on the 787 program related to that that quarter. They spent that money years ago. Their cash flow position did not change as a result of that charge. The raw cash cost to build a 787 did not change.
You say that many here fail to grasp it…I think it’s pretty clear you are failing to grasp it and incorrectly think others are wrong.
Cash flow positive =/= profitable
As simple as that.
That’s why BA had to stressed the 87 is cash positive! 😂
@ Whynot
Even on a “from today onward” basis (ignoring losses booked in the past), I doubt that the 787 program will be cashflow positive. The sales margin that BA has on the remaining (and shrinking) order book is going to be seriously eroded by inventory storage & rework costs, ongoing customer compensation costs, and cancellation/refund costs. Also, don’t forget the coming development costs of 787F and 787HGW.
“Cash flow positive =/= profitable
As simple as that.”
Put it another way for those who don’t understand a/c like Whynot:
AB is talking about not profitable, but it *doesn’t mean the A220 program is cash negative* as of 22Q3.
As simple as that.
P.S. It’simportant to note that BA is talking about the 87 program *as a whole* cash positive, masked by PDP received in advance, not on an ind. jet basis.
Whynot:
Good clear explanations of the murky world of accounting.
I was working for a Financil Insiation 80s era in the Alaska version of the Preim Morae debacel (we avoided the PM blowout as state isnitaion did not want to see that bloodletting again).
The FI carried the losses on for a couple years and then they wrote all the loans in question off. The explanation was it got rid of the pain in one felse swoop and they could go on with financial life. And it was truly a drank morale draining cloud to be doing well otherwise and having that loses repeat each quarter.
They went onto recover some or parts of the loans but that was just a nice bonus to a good quarter and year if it happened.
While not remotely the Boeing magnitude it was a shocking loss but it was one and done and over and they did not repeat the lending errors that lead to it.
I thought it was a really well done.
What many here fail to understand is the unit cost per jet fluctuates inverse to production volume, because there’s a lack of understanding of manufacturing accounting.
Cash unit cost also doesn’t account for depr. & amortization.
You are correct that unit costs fluctuate with the inverse of production volume.
Things get a little trickier with the 787 though because while production volume has gone down (raising unit cost) Boeing has also closed a FAL and consolidated down to just CHS (which actually simplifies production and improves unit costs).
None of us really know how much the latter cancels out the former yet though. Only Boeing.
Not that long ago, BA was making five to seven 787 each mth from *each* plant in WA & SC. Now roughly 1-1/2 only. Fixed OH doesn’t change (on a per plant basis), direct labor has remained => Cost per jet ballooned.
Whynot:
In a way Boeing just shifted costs around by shifting all production to Charleston (given there is some inherent savings in all in one place)
They created a vacant line in Everett that has no production in it now and the overhead for the building and associated facilities built there not being used.
So the 787 mfg account benefits cost wise but Boeing overall and or the remaining production of 767 and 777CEO at Everett have to cover that cost.
Some flips aspects would be the Everett line was building better quality 787s.
Walter, another thing worth considering is strategy. Airbus has a market-share-by-any-means strategy, inspired by Leahy, and it’s really paying off. Boeing have made it easy for them in the single aisle market, 787 was good but then economically matched by A330neo, with the A350 being a very tough competitor too. 777 was truly excellent, but now…
Airbus misstepped with the A380, but apparently not to any long term damaging effect, which is a pretty powerful indicator all by itself. Skipping a generation of SA launch costs by buying the C-Series has helped too I’m sure.
The long term pay-off for Airbus is that they’re big enough to get really good economies of scale, and if they end up with an effective 100% of the market then they’re the ones taking all the profit. Keeeeerchinnngggg! It’s easy to be massively profitable with a global market unopposed.
What I think is interesting about this particular strategy is that all the laws and rules of monopoly probably won’t apply, or won’t be applied in the usual way. The United Nations doesn’t have an anti-trust department with any power to enforce orders, and individual governments will be differently motivated on coordinating action with another. There’s also the practical problem that, with a single company supplying such important product globally, one cannot really afford to damage it.
This all basically reflects the fact that, to build anything like this on such a vast scale of complexity, the launch costs are enormous and getting to the point where the market cannot bear those launch costs twice. It’s perfectly natural that the same thing will happen in the airliner market, and at this point in time one would probably bet on Airbus winning and Boeing dropping out.
This has happened in lots of other areas, such as semiconductors. Taiwan / TSMC are the only people who really know what they’re doing. For anyone else to match them is going to take generations whilst we regrow the same talents elsewhere, and a lot of money. Money cannot create expertise and know how out of thin air. It’s a non-reversible relationship; being even slightly parsimonious with money is a good way of guaranteeing that expertise disappears into thin air very quickly.
Lithography / ASML is another example of a worldwide monopoly.
Good points, thanks for the in detail answer.
Thanks for that comprehensive comment, Matthew.
The market nowadays is much bigger than ever before. I would excpect that to more than compensate for increasing launch costs. Or did those really rise so much?
And increased digitalisation should lower costs.
Well it is true that it is late. But then Airbus did not pay the 4 billion plus in total development cost. They have probably only spent in the area of 1.5 billion between acquisition and losses. So still bargain basement.
There are times when it is worthwhile to have a product line that is not profitable on a fully loaded basis but nevertheless increases the bottom line for the whole company.
This occurs when you have a fixed overhead that will be there whether or not you have the product line. Even if the product line doesn’t cover its full share it is better to have some contribution rather than none.
So you can be in a situation where the product line isn’t profitable on a fully loaded basis but is still beneficial to have.
I have no idea if this applies to the A220, but just to say that it can be good to have a product line that isn’t “profitable”.
Incidentally there are companies where the divisions spend all their time arguing about how much overhead should be allocated to them and neglect improving their product.
They say the A380 did not earn a profit. But in the long run, it was an effective strategy for Airbus to build it. 1) It was a step-up in technology that they applied to the later planes especially the A350; and 2) one could made the argument that it took enough years’ of sales from the B747 to ultimately cause Boeing to shut down what became an un-profitable production line.
Lipstick on a big white pig…
@SamW
Emirates still can’t get enough of the A380 — it keeps asking AB to do an updated version 😉
Then again — Emirates is a rather unique type of airline, isn’t it?
https://onemileatatime.com/news/emirates-airbus-design-new-a380/
Boeing thought about NEOs for the 757 and 767… But to NEO the A380 would mostlikely mean travel demand has doubled…
Not necessarily. Many airports (and the number is growing) have limited slots available at prime time.
It’s about time to rethink the business model of low cost flying.
Yes, there’s a lot of truth to that. Larger planes would solve many problems. An A380 contracted to three airlines (Delta, AA, UA let’s say) one gets the top, two board the main level from different doors could work. On cross country city pairs it could be effective. Hey, I’m going to patent this idea…
They can keep on asking all they like.!!!
If no other carrier shares that sentiment..
Mute point!!!
Even the all mighty Sit Tim, snubbed the so called “Neo” version..
AB never came with a neo of the A380.
It came with a “plus” version, which was contrary to the luxury image that Emirates likes to project.
****
Ironically, your comment also applies to the 777X — which is essentially a “one customer” plane. And that customer isn’t impressed by the certification process of that plane…
TC:
I am puzzled by TC snubbing the A380NEO. He was all in on it, it was the sort of updated CEO that he felt did not go far enough.
Granted he was badly let down by the RR Trent 900 upgrade that promised so much (at least in his mind) and delivered so little (well worse as he now has a split feet engine setup)
Paradoxically the A380 was designed as the 900 but was made as the 800 initially because it was as big as many wanted and the hope was once they got used to big, bigger was better.
Efficiency wise it would have been, but that assumes you could fill the seats. Emirates is one and BA is the other to a lessor extent (BA said they would buy more at the right price but even with used A380 on the market with the RR engine they have not)
But too planned was the F version that was never to be (also very limited appeal to UPS and FedEx) and ……………..
The 777X of course will have the same issues on a smaller scale, filling those seats. There looks to be an area there, but how big? That is the big question.
There is a reason Airbus has not gone onto the A350-1200.
Sam W:
In reality the A380 was an amazing application of existing tech but not really a step to anything else. The center wing box was composite but the wings were not
I don’t see any link between it and the A350.
Maybe I was quoting Faury or Enders – when they were shutting down the A380 program…
On another point to the “Boeing Detractors,” plane manufacturing in The World today is a duopoly. Consequently, you can make some pretty big blunders and still make money in the business. Both companies’ major stockholders let little insignificant men lead their efforts for too long – especially Boeing. But I know this about business, for the most part you don’t sell your products at a loss. Airbus’s production is sold out for what, 4 or 5 years? Boeing is not selling 737-10’s or 737MAX-200’s for a loss. And sure they blew-up the development costs on the 787, but there’s going to be a lot of money coming in over the transom now that they can deliver over 100 of these $100M+ widebodies. And with their accounting that money will go into R&D and like YOUKNOWWho, they won’t be paying much in Federal Taxes. We love to bash Boeing, but with the eyes of The World on them they appear to be making progress righting the “ship.”
“I don’t see any link between it and the A350.”
Obviously, you won’t (inaccessible 🙂
A380 wing skins are composite: multilayered AL 🙂
the A380 introduced the 2H2E actuator system design, EHA, EHBA actuator units, networked data acquisition, cmd , .. variable frequency generators .. ( much of the stuff that was advertised as absolute new on the 787 🙂
I think the A380 wiring debacle has been a great catalyst for organisational changes at airbus. The A350 protited greatly from the lessons learned there.
Hamburger:
That is true and clearly it was badly needed.
I think the A350 success also owes a debt to Boeing for being a poster child for how not to do an aircraft program.
Now if Boeing could just collect on that debt!
“Now if Boeing could just collect on that debt!”
Pfft, that was no investment. They carpet bombed the Dreamliner project. .. and additionally some blue on blue action against the 748 🙂
Essentially Boeing should have had their cortical pause after the Airbus intelligence report on 787 issues.
Always interesting to see a single issue misstep ( A380, wiring looms, cost in time and money was significant ) represented as equal to the full spectrum FUBAR of the Dreamliner gestation
where for a long time you could remove 3..4 issues and still didn’t change the progress speed.
Quoting Leeham News: « A Quebec, Canada, pension fund still retains about 25% ownership of the program. »
Scott, your statement is partly incorrect.
That pension fund you are talking about would be CDPQ (Caisse de dépôt et placement du Québec) but they never had anything to do with the C Series. However they did take a very large stake (1/3) in former Bombardier Transport, the train division which has seen been sold to Alstom.
This might explain the confusion, especially since this particular transaction (trains) happened in the context that Bombardier were restructuring at the time while trying to get rid of the C Series programme. It’s important to understand that the latter was handled by IQ while the former was taken care of by CDPQ.
The key point here is that the Québec government invested in the C Series programme with Airbus via its own investment arm called Investissement Québec, which is not a pension fund institutional investor like CDPQ is.
Regards, Normand
Quoting Wikipedia:
In July 2016, Investissement Québec took a stake in C Series Aircraft Limited Partnership (CSALP), a joint venture with Bombardier Aerospace to develop its CSeries aircraft. In October 2017, Airbus and Bombardier announced that Airbus would acquire a 50.01% majority stake in CSALP, with Bombardier keeping 31% and Investissement Québec 19%. This deal closed in July 2018, and the aircraft was rebranded as the Airbus A220. Bombardier exited the A220 programme in February 2020, selling its share to Airbus; Investissement Québec kept a 25% share. In February 2022, a further $1.2b investment in Airbus Canada was agreed ($900m from Airbus, $300m from Investissement Québec) to support an acceleration of the A220’s production rate.
Well, Airbus was able to renegotiate with suppliers for some 40 percent discount as well, which Bombardier couldn’t do. This is the power of being as large as Airbus
Plus:
It’s likely that some A320/A321 orders were “pushed over the finish line” by the concurrent offering of A220s.
Think AF/KLM and Qantas, for example.
Also Delta and JetBlue.
lul:
Can you post a link? Scott addresses a couple of the big ones that won’t negotiate.
BBD had to let lucrative contracts to get the product they needed for the C series. If I was the parts suppliers either stick to it or leverage it into other good contracts.
Bryce said, on August 15, 2022: “BA delivered just 23 MAXs in July…”
23 and 40 are almost the same number.
And to another commenter:
The 787 cannot “return” to profit, since
it has never made one, and almost certainly
never will. Of the 737MAX, I will say nothing.
A220 100/300 will never see huge numbers. It was the CS500/A220-500 that was going to be threat to 320/737 that both BA and AB saw and reacted.
CS500 would sit where a320neo is. While now a321 is becoming more popular the a320neo completes the family. A220-500 will not have much commonality with a320/321 family and most airlines will choose 320neo for crew/maintenance commonality.
MRJ and C series changed the land scape of narrow body market and it caused Mitsubishi and Bombardier dearly with nothing to show and a massive blow to Embraer who is struggling to sell the E2’s.
Tom:
Good synopsis on the A220. The commonality part is an interesting dilemma.
To get it common you would need to impose the Airbus system on the A220 (all those aircraft built and the model in production).
Upsets the apple cart to put the A220 system in place and some of the hardware would have to be changed on all the Airbus aircraft as well.
Ironic that Boeing could have picked this up and had a huge improvement and nothing in the 737 cockpit is common with the rest (in reality, PFD aside and that is an optics thing)
I think you need to put Mitsubishi and Embraer in the same bucket but the BBD was different as it was not a regional product. At 100+ seats the C series was always going to have to compete with the A320/737 as far as pilot costs.
Does Airbus re-wing the A321 and leave the A320 as is and let the airlines pick what mix works?
Its all down the road and interesting to watch but I am sure not making any bets.
I think Airbus has some options in the NB segment this decade. Based on the improved XLR wing, fuel system and 101t MTOW a very useful A322NEO, 250 seats, 3500NM seems feasible.
Also the A320 could be stretched. The A321 offers a nearly 7 meters/ 40 seats longer cabin than the A320. Something in between A320 & A321 would certainly be possible, a “perfect” 200 seat / 5 ca single class aircraft, a 3-4 row stretch.
An A220-500 is a question of “when” as Airbus says. The groundwork was done a long time ago in Canada.
https://groups.google.com/group/aviation_innovation/attach/57f1d448a2948/Airbus%20Future%20A320%20portfolio.jpg?part=0.1&view=1
Just look at all the options that an OEM has when it isn’t living from hand to mouth…
Bryce:
I believe the reality is that hand to mouth is not the issue.
Its the continued use of a 60s if not late 50s tech suite on the 737NG and MAX when they had the money to replace it but spent on stock buy backs and dividends that has them painted into a corner*
* the ref is from a Mark Twain book, aka Huckleberry Finn and Huck painting a floor but not paying attention to where the door was
Hand to mouth is very much the issue: BA is up to its teeth in debt, and revenue is only trickling in — not enough to prevent continued burn of available cash. There is no available funding for anything other than bare essentials.
The company is staring into the abyss.
> The quality between Boeing and Airbus is about equal as near as I can determine (Boeing has had some meltdowns). <
If one does not count the two Boeing 737MAX all-fatalities crashes and consequent two-year grounding; and the 787's halt to deliveries for QC and production issues for over a year and a half;
and the long-term certification problems for the 777-X and 737MAX-10..
"about equal as near as I can determine", eh? How can one say such a thing with a straight face?
Ask a pilot, you know someone that actually flies the planes unlike you.
Feel free to contact the pilots of the 2 crashed MAXs if you can — their opinion would be very relevant.
In the meantime, with regard to the revelations in the recent ABC article, it might be easier to contact the pilots of the MAXs that underwent 60 serious incidents / emergencies in the past 18 months.
While you’re doing all that, the rest of us can read what the *airlines* say on the matter…after all, they’re footing the bill.
Why don’t you ask the pilots of
Air France Flight 447!
Sorry to kill your joy over the MAX crashes.
Well, the MAX crashes were 11 years more recent — and there were 50% more fatalities…
***
Better still: all the pilots involved in the aforementioned 60 (!) ABC incidents, all involving the MAX. And don’t forget the 5 crashes recently discussed in the MITRE report commissioned by the FAA.
Your misanthropic lament ignores reality.
AF447 crashed after 20+ years of uneventful heavy use with hundreds of frames flying.
Though not for lack of trying: never could unmitigated dangerous defects be linked to Airbus FBW or even the all over design.
MAX crashes happened in close succession on a newly introduced type. The certification lead (FAA) had to be forced to act on the issues.
“Taking of the lid on the MAX internals” did not only expose the careless design of MCAS but quite a range of ancillary issues covering not just Boeing but also the assumed to be nonpartisan FAA and a range of other US institutions.
( MyOp: broken by design.)
Bjorn, you flew many aircraft, what do you think?
keejse:
I won’t speak for Bjorn but one of the MCAS write-ups he felt the main cause was the MCAS aspect.
I was a pilot. Our responsibility was to sort out things when they went wrong. And yes I had some things go wrong and I would not be here if I had not sorted them out.
My take at the time was the trigger was MCAS and then the pilots inability to sort it out. If MCAS had been implemented correctly it would never have happened.
Indonesian did have some real clues and did not understand it or were overwhelmed. Ethiopian got into the elevator lock up on the control wheel and that was the other failure that the Simulators had gone wrong on its characteristics. There is a failure there that has never been followed up on. It was in the 737 Sims at one time.
But the aspect of an aircraft that has a horrid bit of programming vs the quality of the aircraft itself is a whole different aspect.
Qatar that is notoriously picky has had no issues with accepting Boeing aircraft (nor Airbus until the recent blowup).
Boeing aircraft have not had quality issues in their function and ops.
The build quality has been in other areas (joints on the 787).
Aloha has been cited as a quality failure when in fact Hawaiian had been notified of the possible issues and had not dealt with it let alone operating a 737 in a nutty amount of cycles due to the short trips inter island .
> But the aspect of an aircraft that has a horrid bit of programming vs the quality of the aircraft itself is a whole different aspect. <
"Other than the defective, screwed-up, hidden parts (MCAS, amongst several other things), the 737MAX is an excellent plane".
oh.
“Qatar that is notoriously picky has had no issues with accepting Boeing aircraft”
Qatar very publicly refused to take 787s coming out of Charleston…
Yep, they did take them from Everett.
Have to see how they deal with Charleston as the production gets going again.
@Bill7
-> oh.
It’s imp. to note that ultimately, in the opinions of a few here, everything from BA is “just fine”!! Always look up to the sunny bright side [imagine one even if one can’t be found].
Doubt you have any first-hand experience.
You for sure are missing the AF447, TAM 3054, the demonstration flight in France in 88, some of the inadvertent pitch downs in the A330 family. All this tied to design issues.
Both OEMs have their own.
2009, 2007, 1988, respectively.
Got nothing more recent?
*****
Further: is quality only measured by crashes?
What about groundings? And FOD issues? And outdated cockpits?
False equivalence, I think. The last three all-fatalities crashes have all been Boeing 737s:
two MAXs, one NG. Boeing’s long term QC issues- which some airlines being unwilling to accept Charleston product- need no further comment.
When did AF447 crash?
Acquire information from the actual crash investigations ( understand the findings ) and then restart your post.
You don’t get good information from US TV-Series and breathless style reporting.
“The A350 was a 25 billion dollar loss.”
Is that an accurate statement? I don’t see how it could be, since the A350 is in its early years of production. The statement is in the past tense, implying… ?
“The A350 was a 25 billion dollar loss.”
As good as letting monkeys throw darts!
I believe he meant the 380. Read the comment for context. 350 was a typo.
Yes, that would be a better fit. Typical, though..
Dan F.
Spot on.
I prefer to go by what others *actually say*, rather than try to guess what they might be thinking: “you should have known..”
A novel approach for some, I guess.
As good as letting monkeys throw darts!
You thought that was so clever you felt the need to repeat it?
If you can’t see the reason why, isn’t it time to see an optometrist?
-> The 787 has outsold the entire 767 program in like half the time.
It doesn’t matter, does it?
It still saddled BA with $13 billion deferred cost with zero chance of full recovery.
-> What does the profitability of the 787 line have anything to do with the A220’s profitability, or the comment you responded to which did not mention the 787 or Boeing at all?
Clear demonstration of a lack of perspective:
How many 87 are sold?
What’s the average price of 87??
If BA still can’t make a buck from the 87 eleven years after EIS …
I recall BA and its shadow force were quick to sow FUD about the C series program after it filed trade complaint against it. That made many potential customers hesitate and reluctant to make commitments => new orders dried up.
Re: “Passenger experience easily exceeds the older design A320 and 737. The A220’s 2×3 seating, 18.5 inch window/aisle seats, 19-inch wide middle seat and wide aisle draw kudos.”
This may be true for economy class passengers; however, if you are Delta First Class Customer, the A220, as configured by Delta, offers a passenger experience inferior to Delta’s A32X’s, B737’s and B757’s.
Delta’s A220’s have the same number of seats abreast in First Class as do their A32X’s, B737’s, and B757’s (i.e. 4); however, the A220’s inside cabin width is 10 inches less than the B737 and B757, and 17 inches less than A32X’s.
Inside cabin widths according to the link below.
B717/MD80/MD90: 122.5 inches
A220: 129 inches.
B737 and B757: 139 inches
A32X’s: 146 inches.
https://en.wikipedia.org/wiki/Narrow-body_aircraft
First Class seat widths according to Delta’s website.
B717: 19.6 inches
A220: 20.5 inches
B737 and B757: 20.9 inches
A32X: 21 inches
https://www.delta.com/us/en/aircraft/overview
The difference in FC seat widths between a Delta A220 and a Delta A32X only accounts for (4 x 0.5 inches)=2 inches out of a 17 inch difference in cabin width. Assuming the aisles in both aircraft are about the same width, the difference will need to be made up mostly in the center console/armrests, i.e., each of the 2 center console/armrests on the A220 will likely be about 15 /2 = 7.5 inches narrower than on Delta’s A32X’s. Since one of the the main reasons I buy First Class seats is to be able to rest my arms comfortably and naturally at my sides while reading or typing without brushing against adjoining passengers, I probably won’t like Delta’s A220 First Class Cabin if the day comes when I can no longer avoid buying a ticket in it. I have flown in Delta’s 717 First Class cabins which cram 4 seats abreast into a cabin only 6.5 inches narrower than the A220’s, and know that I don’t consider it an acceptable product for anything longer than a one hour spoke to hub flight.
Delta is free to run their airline how they wish, but I have to wonder if cramming in more tightly the people who are willing and able to pay for more comfortable seats while giving more space to people who won’t pay more for more comfortable seats, is going to be a good business model for them. I know that in several cases it has caused my First Class ticket dollars to go to one of Delta’s competitors, instead of to Delta, because the competitor was offering a superior product (i.e., same number of seats abreast as in a Delta A220 but in a wider fuselage) for the same or lower price.
Re in my post above: “the difference will need to be made up mostly in the center console/armrests, i.e., each of the 2 center console/armrests on the A220 will likely be about 15 /2 = 7.5 inches narrower than on Delta’s A32X’s.”
On second thought, each pair of 2 seats has 2 side armrests and a center console/armrest, so the 15 inch difference in cabin width not accounted for by reduced seat cushion width will be spread over 4 side armrests and 2 center consoles, and the average difference per armrest or center console will have to be about 15 inches/ 6 = 2.5 inches narrower in the A220.
If you go First Class (domestic) on a 737 or A320, apart from seat rows you surrender 2 seats per row to get a First 2-2 configuration.
If you do the same on an A220 you loose 1 seat per row. In terms of revenue that’s a huge advantage.
It seems to me the A220 first class 2-2 is more than acceptable. Wide enough to stay away from you neighbor, knee space/recline, a clearly premium seat/ separate cabin. If the priority on the ground, lounge is ok, catering is good, crew is nice, I don’t foresee any problem on domestic/ regional flights.
http://lux-traveller.com/2018/Delta-A220-First-Class.jpg
Keesje
It’s a double edged sword, no?
Increased revenue – IF you can fill those seats. As far as costs go; smaller aircraft, lighter OEW, less cabin crew, cheaper pilots, better fuel economy = less operating costs.
Delta wouldn’t keep ordering more, if it was a dog.
Frank:
No its not close to a dog but it was interesting to see that area I will never see again (front) pointed out in the luxury end.
Why are dogs looked at so negatively as in that expression. Dogs can be really nice animals which make you happier (less depressed) and live longer. Let’s say it’s an Edsel or a trash heap or something. PS cats are good to unless you are allergic to them.
Dan F:
I loved our dogs and you are again correct (cats too and I am supposed to be allergic to them but not nearly as bad as other things)
One of those expressions. I have a number of them my wife won’t let me use! Basket case is one, hmm, she is an artist and weaves baskets and take umbrage.
Hello Keesje,
Re:”It seems to me the A220 first class 2-2 is more than acceptable. Wide enough to stay away from you neighbor, knee space/recline, a clearly premium seat/ separate cabin.”
Looking at the picture you linked to to, I strongly disagree. What I see are seats that fall far short of what Delta offers in First Class in its A32X’s, B737’s and B757’s. The main problem is inadequate shoulder to shoulder separation between the seats, and armrests that are only a fraction of the width of an average adult male arm. In First Class I expect to be able to put my arm on the armrest for my seat without brushing shoulders or arms with the adjacent passenger. “On the armrest” means resting on top of it, not leaning at an angle against it. I also expect to be able to type on a laptop, or eat a hot meal with utensils, using natural arm positions without brushing shoulders or arms with the adjacent passenger. It looks to me that this would not be possible in the seats in your picture, since the armrests are at best the width of a petite women’s or teenager’s arm. It looks a lot like what Delta advertises as First Class in its B717’s (falsely in my opinion), which I find unacceptable for any flight over one hour in length. It is not surprising that Delta’s A220 First Class looks like Delta’s B717 First Class, since the inside cabin width of the A220 is within 6.5 inches of that of the B717.
For those who don’t fly First Class, see the link below for some pictures of the standard of seating that Delta offers on its A32X’s. Notice in particular the picture in which the adult male model is sitting with his hands clasped comfortably on his lap (not in economy straight jacket position), in which his shoulders and arms do not extend past the center line of the center armrest/console.
https://thepointsguy.com/news/delta-air-lines-new-first-class-seat-tour/
Delta’s in service A32X, B737 and B757 First Class seats are not quite as nice as their new A321neo seats discussed in the link I gave above, but they are dimensionally similar to the new A321neo seats. See the link below which shows a picture of Delta 737-900ER First Class seats. To my eyes, although the 737’s cabin is narrower than that of a A32X, the center console and armrest is still obviously much wider than that in Keesje’s picture of Delta’s A220 First Class seating.
https://www.sanspotter.com/wp-content/uploads/2016/07/delta_737-900_atl_mco_trip_report_09.jpg
All this to say:
What really matters is what Delta customers think and what they are willing to pay for. Otherwise they will take their business elsewhere.
It seems Delta knows what it is doing, with it’s aircraft selection, seating & customer experience.
Frank:
Delta has made some interesting combinations work (717) they have to be through the roof with the A220.
They also are an oddity in mixed fleets and one more is not an issue as they dropped the 717 and its MD predecessors. Delta seems to do as good or better than the others that have missed types but are not flying the 130 seat class aircraft.
Maybe Delta is just willing to work at it?
” … if you are Delta First Class Customer, the A220, as configured by Delta, offers a passenger experience inferior to Delta’s A32X’s, B737’s …
All the reviews I read show Delta has more or less the *same* first class seats across its A220, B737. I fail to understand how commentator here can call it an inferior experience. What you missed is Delta has its latest tablet-based wireless IFE in the A220, *decade(s) ahead of its 737s*.
Hello Pedro,
Re: “All the reviews I read show Delta has more or less the *same* first class seats across its A220, B737. I fail to understand how commentator here can call it an inferior experience. ”
See the excerpt below from the “One Mile at A Time” A220 First Class Review and its comments section at the link after the excerpts.
“This doesn’t come as much of a surprise, but the cabin isn’t quite as wide as your typical A320 or 737. As a result, first class seats are on the tight side compared to flying a 737 or A320. For example, the armrest between first class seats is quite narrow. This isn’t a big deal at all, but it’s definitely less comfortable than your typical 737 or A320 first class. That’s fair enough, and not a big deal, but is something worth being aware of.”
Some of those who offered comments were less impressed than the reviewer.
“Absolutely horrible first class. There is little difference between seat and arm rest between comfort and first. Much, much tighter. If you are a frequent flyer in first, this plane will drive you nuts.”
“Agree. It sucks. The seat headrest forces your head forward in a weird uncomfortable position (unless you seriously recline), theres no space between the seats and if you’re the least bit large forget about using the tray table because it will be shoved into your stomach. Bleccch I hate First on this plane. Also, the display didn’t work at all and the wifi kept cutting out.”
“Just flew First class on a Delta A-220 , will never pay extra for first class skinny seats. Very tight and the seat in front of me came back into my face. Don’t waste you money.”
“I’m sorry, but I have flown the A220 now 4 times in the past 2 weeks between IAH-LGA and I think the plane is over-hyped.
The Entertainment system (when working – it was broken on 1 of my flights) and overhead storage is a plus and the seat cushions are better, but I would rather have the E175 back on this route. First Class is tight. The bulkhead is even tighter. Coach is an improvement for sure, but overall, I’m just not overly impressed.”
https://onemileatatime.com/delta-a220-first-class/
I’m sceptical. Given a reasonable seat pitch it is hard to imagine that 4 wide in the space allocated to 5 is not pretty comfortable on the stage lengths the A22o flies. An extra 18′ to play with should make it at least as comfortable as all the layouts where first is just the middle seat left empty.
I don’t subscribe to alt-reality.
1) In 2016, Delta placed a firm order for *75 Bombardier CS100* to *upgauge* its NB fleet.
https://news.delta.com/delta-orders-state-art-fuel-efficient-bombardier-c-series
Delta’s CEO: “Let’s be blunt about it: Bombardier created a better piece of technology than the other guys,”
https://www.usatoday.com/story/travel/flights/todayinthesky/2016/04/28/delta-gives-bombardier-big-order-new-c-series-jets/83638346/
2) Delta’s A220-100 has *109 seats only*.
-> “Delta did not consider any new 100- to 150-seat [aircraft] from Boeing because the 126-seat 737-700 and the 138-seat 737 Max 7 were unsuitable for the mission profile in question”.
3) Boeing *does not have* any valid alternate product to offer Delta.
4) All these comparisons of the much large 737 MAX/A320/757 are nothing but smoke screen to confuse others here.
5) There are many positive reviews:
https://runwaygirlnetwork.com/2019/02/delta-hits-a-home-run-with-airbus-a220-passenger-experience/
https://www.google.com/amp/s/thepointsguy.com/reviews/delta-a220-first-class/amp/
https://www.google.com/amp/s/www.forbes.com/sites/gabrielleigh/2019/10/14/delta-gets-it-right-with-the-a220/amp/
Those who so easily acquiesced to the manifestly disastrous COVID lockdowns have much to answer for. This, the most boneheaded policy decision in history has had such deep, profound consequences, some of the most minor of which we are seeing reported here in this editorial and so far reaching we are yet to see the true consequences.
With regards to the subject matter, I was closely involved in a comparative study of this class of aircraft last year and into this. The closest competitor, those that were certified aircraft, was in fact Sukhoi’s SSJ100. In quantitative and qualitative studies that aircraft (with the Pininfarina cabin) met or exceeded the Airbus (nee Bombardier) aircraft with comparable cabin capacities.
Where the SSJ was deficient, the proposed upgraded SSJ-NEW with a wing sharing the technology of Irkut’s MC-21 (far & away the best wing “flying” today) would have placed the SSJ in the lead in most respects. I am confident that UAC would have stretched this airframe to a 140PAX variant and they still might. The price of the airframes was not discussed but I do not think Airbus would have wanted to play.
For reasons not unrelated to and equalling the asinine lockdown policies, this aircraft is now unavailable to much of the world. We found the A220 a difficult aircraft to define, it is what my father would have called “a queer eel”.
Stepping up a class, during this process I was able to glean enough information on Irkut’s MC-21 to confidently say that it exceeds both the Airbus and Boeing offers in every respect – and by wide, wide margins. UAC simply lacked the ambition to mass produce it. This may change now.
I find the supply chain constraints mention here in many aspects of life; the start-up requiring the aircraft studied will not now go ahead. I want to build a house but am told lead times on critical materials exceed eight months at a minimum. So no house will be built. To console myself I went to buy a new Harley Davidson last week and found they had none to sell me; two were on the ocean and were already sold and I would be lucky to get the model I wanted by November – prime biking weather here in the UK. To all those who went along with the mass hysteria – look what you’ve done.
“To all those who went along with the mass hysteria – look what you’ve done.”
Is this a reference to those who voted in favor of Brexit? 😏
No. It is a direct condemnation of those who accepted the lies, the anti-science and misinformation justifying the COVID lockdowns, so readily and unquestioningly accepted their authoritarian nature and so viciously attacked those who disputed the justification behind them.
As for BREXIT, six years ago – yes, it really was six years ago I took time off and campaigned vigorously for BREXIT. I am proud to say that in my area we won in a wider region that voted REMAIN. The fact that we only got Brexit in Name Only (BRINO) was a sign of things to come (see above).
I agree the MC-21 scores quite good when I gathered & scored all info I could collect (big light wing). The weak point at this stage seems range but that might me related to certification of increasing MTOW’s and might improve over time. And of course engine, how reliable, efficient is the PD-14? Loosing the PW GTF won’t help the MC-21
https://groups.google.com/group/aviation_innovation/attach/58e8ea931803c/Flies%20scrapbook%20NB%201.5.jpg?part=0.1&view=1
In the “current situation”, one can assume that both Russia and China will urgently want to reduce/minimize dependency on western engines — there’s therefore a huge incentive/motivation to make the PD-14 a success.
The PD range is being scaled both up and down for the SSJ and the CR929. The PD-14 is already certified and flying.
Yes, it’s too early to say of course but as the PD is now the only engine on that wing the results will soon be in just as soon as it goes into service. The P&W like so many other engines has had it’s own teething troubles of course. The PD was being positioned as lower in capital and maintenance costs, academic now.
The “M” part of the MC-21 title “Магистральный” in russian means “trunk”. It was designed for trunk routes, by definition short routes. Just like the original B737 in fact!
Paradoxically, the current sanctions have provided a great boost for the Russian aerospace industry as the gmt has now provided it with unlimited resources for R&D, $14 billion was the last figure I heard not to mention factories running flat out to fulfil military orders. The people I know in the far east there have never had it so good.
In a newly bifurcated world, all those Chinese, Indian and other aircraft orders will be fulfilled not by western products but Sino-Russian kit. This is where I dispute the editors recent conclusion that China needs Boeing more than Boeing needs China. The new realpolitik says otherwise and now they have options.
This post is not about COVID.
Everyone: Do NOT begin a thread on COVID. I’ll shut down comments immediately.
Hamilton
@Scott
Let’s talk about Submarines, no?
🙂
Let’s not, Frank. This post isn’t about submarines, either.
Hamilton
Of course not. I’m just poking fun at how we sometimes get distracted. Subs, China and Covid seem to be the top 3 subjects that drive the topic off the cliff.
Mind you, being a dog owner, I do approve of the side track into man’s best friend. After all, they have their humans so well trained…
You’ve no idea how tough it is to get your butt off the couch at 8PM, in the middle of a Canadian winter and -30 outside, when it’s warm and cozy in front of the fireplace, because you get ‘the look’ from your 110lb Rottweiler.
I will cry buckets, mind you, when ‘that’ day comes…
That’s why we have a fenced backyard. Doggie gets “invited” out while we stay warm and cozy.
“Market intelligence indicates that Airbus is having difficulty cutting costs. Raytheon Technologies units Pratt & Whitney and Collins Aerospace are said to be especially difficult. So, other intelligence indicates, Airbus is raising the sales price of the A220 to around $40m.”
This might explain Airbus casually mentioning a possible second engine option for a possible A220-500..
https://twitter.com/jonostrower/status/1550192191968002050
Yup. A shot across the bow.
Well, I would call it a cork gun across the bow at best.
No one has a comparable engine. So good luck with that as P&W smirks and counts their coin.
P&W has to compete with GE on the A320 series, so why not make good money on the A220?
GE or RR going to come out with a competing engine? Nope.
GE had a lock on the market with the CFM on 737 and most of the market on the A320 series. Ditto for LEAP.
A Point to Ponder
I’ve touched on this before, but it bears mentioning again, in the context of the A220.
Imagine, if you will, the 20,000 ft view of the aircraft OEM battle. It’s two beasts slugging it out for sales and market share. One is currently in better shape, than the other.
Decisions are being made, not only out of necessity (we need to make money) but out of competition (we need to keep the other guy from making money).
How valuable to Airbus is keeping the 800 (with probably more to follow) orders out of the grubby hands of Boeing? What’s it worth, to them?
As well, it’s not like there is zero return on the money spent; with a plan towards making a profit in a few years, there is light at the end of the tunnel. There is a future for the program.
Everything is a risk, which is probably why we haven’t seen an original clean sheet launch from our beasts, in awhile.
As far as comparisons between the A220 & the 787, I might tend towards the point of view that this is an apples and oranges comparison;
1) The 787 line is over two thirds through it’s life cycle and is a mature product (which is scary for BA in it’s own way, because this should be the cash cow phase, but I digress) and the A220 is still a baby, barely 25% of the way through.
2) Boeing has had this baby since it’s inception – Airbus is the stepdad that didn’t do the sin, but is picking up the pieces and wiping away the tears. There is drama there (i.e. contracts) that Airbus didn’t negotiate and wasn’t around for.
3) Airbus didn’t pony up at the outset, to get things rolling. BA was writing checks all along. Airbus can throw more money at a situation, without thinking “Are we throwing good money after bad?”
4) The 787 has a direct competitor in it’s space, while the A220 sits alone, running along at it’s own pace. There’s no pressure to ‘beat the other guy’ in the niche.
5) The entity isn’t reliant on one, for survival. Worse case scenario: If Airbus can’t make the A220 work, their exposure to it isn’t huge. They can prune the branch, keep the best people out of the mess and move along. No big deal. What would happen if Boeing had to do the same thing with their program? It might very well kill them.
My two cents
Frank:
All good points.
I am not sure the keep revenue away from the other guy works but that does not mean its not in play (747-8 which we got at least a great freighter from and the 8I users seem to like it)
I don’t know that Airbus thought it through but realized if they did not Boeing might still (and would Boeing have then just killed it?)
For the 100/300 I don’t think there is any question.
Its the 500 that then brings things into, now what?
Competes with or replaces the A320, but loss of the cockpit commonality.
Numbers wise to South West it was worth a million dollars per aircraft.
You also loose common simulators.
Or will the 500 be co-produced with the A320 with a split between who takes what up based on their structure (big enough like Delta not to be a problem)
Keep your friends close, keep your enemies even closer
Airbus has followed this, to the letter. They bought the jet that essentially killed off their A319Neo (along with the Max 7 & the E2-195).
THEY control that niche. Control does have a price.
BA failed to fully recoup 747-8 program cost! The freighters were not selling well enough and BA had no choice but to reduce production rate => suffered significant forward losses.
– In early 2016 or so, BA took an $885m pre-tax charge ($569m after tax);
– later that same year, BA took another charge against the 747-8 program, $814 million after-tax charge this time.
In total, BA took over $2 billion (est.) pre-tax charge for the 747-8 program.
Interestingly, the CSeries 100 and 300 almost bankrupted BBD: they had to sell almost all their assets to get rid of the cost and debt ( they sold the Series for a symbolic $1 to Airbus – canadian dollar, so discount it another 25% LOL), their train division was sold to Alstom, their structures division was sold, and so on.
Mitsubishi Heavy Industries also killed the MRJ program after sustaining recurrent heavy losses without ever certifying the SpaceJet.
Embraer is still struggling to sell the E2 and the KC-390, and turning to a niche market to survive and eventually grow (Next Generation Turboprop, EVE vtol, Energia family of small regional planes, and so on).
Are Boeing and Airbus the only companies capable of absorbing the huge development cost and very late ROI of new airplane designs ?
You forgot COMAC…
> Mitsubishi Heavy Industries also killed the MRJ program after sustaining recurrent heavy losses without ever certifying the SpaceJet. <
There simply must be more to that story- an aircraft like that does not get simply terminated
so close to reaching fruition, esp by a powerful, deep-pockets entity like Mitsubishi.
It don't add up..
Bill7:
Yes it does. Its called the A380/747-8 syndrome. It does not have to make sense, people sit around and nod their heads yes and down that slippery slope you go.
And keep in mind, MHI thought they could leverage the 787 work to the MRJ, messed up the cert, kept changing their minds and in the meantime they got the contract to work on Japans next Gen fighter.
Lets see, competing in a dog eat dog area vs a nice easy government contract?
The only surprising aspect is they have not sold off CRJ (or thought they would start production again, amazing)
> Yes it does. Its called the A380/747-8 syndrome. It does not have to make sense, people sit around and nod their heads yes and down that slippery slope you go..<
Whatever any of that word-salad might mean..
No, it does not add up.
By the way, Trans: what’s the solid source of your assertion that the A350- an aircraft that’s in its early stages of production and service- “was a $25,000,000,000 loss?” TIA.
@Tw The only surprising aspect is they have not sold off CRJ (or thought they would start production again, amazing) Hummm …..to who I might ask ?
Bludog:
Good question. Comac and Longview are the only ones I can think of.
But they could just shut it down as well.
Longview might take it up if it was cheap enough (for the sustainment end and making money on parts)
Comac would need it for sales outside of China but the C919 is not certified and won’t be outside of China.
“…the C919 is not certified and won’t be outside of China.”
There are 194 countries “outside of China”. Only one of those is the USA….
@TransWorld
If C919 meets appropriate safety standards, it will be certified by EASA. And that will be good enough for most of the world.
@ TS
The C919 already has a leg up: it has EICAS, whereas a certain other dinosaur in the certification queue does not.
JS:
Bjorn has done a great write-up about certification (used a 19 seat aircraft).
Even for that class its a very complex process and you have to document everything as you go along.
If you follow the C919 (and the ARJ-21 before it) that is where it fell apart for the FAA. The documentation was messed up and Comac would not (or could not) go back and provide it.
What was happening was Comac was finding problems (nothing unusual in that) and then implementing fixes and not documenting them.
The FAA could not track it and after a gallant effort, gave up. EASA looked at it and gave up as well.
Its not what you have but how you got there and the documentation behind it. Ergo, if you don’t do it, you can’t go back and get it.
So no, Comac can’t just present a C919 to EASA or the FAA and say, here it is, certify it. Or as I used to say to my brothers when we got caught out, busted.
That does not mean the C919 is not safe, but you don’t have the documents with the engineering and math to support it. Certification is not taking someone’s word on it (which is a major factor in Boeing’s issues, most of it was there but not all (MCAS etc)
China will certify the C919 by their agency, but that agency is not recognized by anyone else. They in turn do not have the process and documentation in place that the C919 was supposed to establish (its the agency that has to have it but its the mfg that has to provide it).
Think of a computer file system that has no file structure and you are supposed to be able to grab you wing data file and prove all its particulars and you can’t find it. Uhh just take our word for it? Nope.
Its not an easy process even when you do have it. Its the issue with the 777X, Boeing said yes we did and do and the FAA said, no you don’t. The delay is not hardware, its going back and digging out the supporting documentation that needs to be presented.
No certification and Japan will not let you fly your C919 into their airspace. Maybe Indonesia will but you will have to dodge around countries that won’t.
The MAX can now fly in China, outside airlines can fly it into China. For whatever reasons, Chinese airlines have not applied to have it approved by them to fly it in China (test flight were done by all 3 of the big operators)
So yes, it can fly into those countries that accept it but that is limited. Which means it lacks flexibility on routes and efficiency of use.
Like the ARJ-21 they can and will fly it in China, the big Chinese airlines will take what they are told to (the Chinese government determines aircraft purchases and allocates them out).
That certificate complexity is the reason there are not more countries that can do it. Canada is amazing for a small country to have that capability on tap (or did). Japan tried and failed on the MRJ.
“without ever certifying the SpaceJet”
… to FAA specs, right?
they even moved the flight program to the US.
Afaics MRJ cert was “hung out to dry” by Boeing’s subdivision FAA. easy.
Canada has its own cert authority. So other means were needed to dull the CSeries prospects.
> Afaics MRJ cert was “hung out to dry” by Boeing’s subdivision FAA. easy. <
Something like that, I think. The made-for-TV version of the story does not hold up.
I think was a bit more than that. For example late in the MRJ development cycle it was discussed that there was not sufficient separation in routing between wiring and/or hydraulic runs requiring design changes. I don’t think that was an FAA specific requirement.
jbeeko:
My take was that Mitsubishi found it had problems, then it went back and fixed them and the documentation did not catch up and they could not prove it.
I believe that is why they moved to the US to get a new start with hired people that had experience in that area and that in turn lead to the FAA effort.
Then they ran into the Scope clause and assumptions that were not to be and started to move to a 76 seat variant which meant more re-work and the cost became prohibitive.
“Embraer is still struggling to sell the E2 and the KC-390, and turning to a niche market to survive and eventually grow (Next Generation Turboprop, EVE vtol, Energia family of small regional planes, and so on).”
The E2 will gain traction from this increase in price by Airbus. The E2 is already sold on profit, so the price will not increase and it will be the best cost benefit.
The 175E1 is the only jet in production which meets US Scope Clauses.
The TPNG has LOIs for more than 250 units.
KC-390 just sold some units to Netherlands, a NATO country.
The Praetors, which are 20m frames with very good margins, are with production sold for the next two years.
The Phenom 300 is the best selling business jet in its category for 10 years in a row.
So I cannot see how Embraer is doomed.
Max:
If Airbus wants to compete they will, ergo the price does not mean anything when you can have huge discounts to that price.
The E2 fits some slots the A220 does not but it also is not an A220.
As for the KC-390 (hmm, is it not a transport first?) it lost half its Brazil sales so it continues to be in arrears sales wise. It may well go the way the C-27 did, nice aircraft but its main buyer gone.
And the LOI should read Letters of Interest. They are in no way binding and when the competition is the pricing vs the ATR?
The E2-175 will never fly (sadly, nice bird)
Embraer may not be doomed but they sure are backed into a corner.
It is certainly worth noting Embraer has done stellar in the Biz Jet area.
Transworld,
The 175E2 will not fly. You are right. But the 175E1s will remain being offered for for the sub 76pax. So when it is time to replace CRJs or even E1s, more new E1s will be sold.
The 190/195E2 will begin selling more, and if it captures 20 to 30% marketshare, this is a number good enough for Embraer size. Embraer faced a no competition scenario for the 100 to 120 seats for almost 15 years since 2003, and now there is competition. Fierce competition from Airbus, but that is life. This is normal business.
Max:
I don’t know what sales Embraer needs to make on the 190/195 E2. The program was supposed to include a high selling E2-175. Kind of an ergh.
But, the ICAO 2027 deadline also looms for the E1-175.
Could Embraer figure out a way to loose enough weight on the E2-175 to slide it in under the Scope?
As much as I like prop jobs I don’t hold any hope out for an expensive and development has to be paid for new one vs the ATR.
One of those markets it looks to be one can make money to some degree but not room for two.
There is no ICAO restriction for 175E1. It will continue to be sold post 2027.
Max:
Its the engines not the airframe.
Same ICAO regs apply to the E1 as it does the 767 and 777.
Embraer has been losing money before covid …
Haven’t you heard of inflation? Have you checked how much cost of production has increased??
This is not true. Embraer has been cash positive for quite a while, and is being able to consistently reduce debts. Profitability is better than Airbus and Boeing. So I don’t know from where your info comes from.
August 2021: “Embraer ends two year run of quarterly losses with $88m profit”
https://www.flightglobal.com/airframers/embraer-ends-two-year-run-of-quarterly-losses-with-88m-profit/145075.article
“Embraer narrows net loss in first quarter 2022”
https://www.aerotime.aero/articles/30866-embraer-narrows-net-loss-q1-2022%3fv=amp
Oh, I don’t know – financials maybe?
https://seekingalpha.com/symbol/ERJ/income-statement
Earnings From Continuing Operations
272.4 (252.2) (322.0) (692.5) (48.0) (2.8)
Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021 TTM
(Helpful hint: Brackets around figures are NOT a good thing…)
“ Embraer ended 2Q22 with a net debt position of US$ 1.2 billion, compared to US$ 1.5 billion q-o-q and US$ 1.8 billion y-o-y. The decrease in the Company’s net debt position q-o-q is a result of cash usage and payment of all 2022 balance of Embraer’s bond and repurchase of 2025, 2027 and 2028 bonds.”
https://skiesmag.com/press-releases/embraer-releases-q2-earnings-results/?amp
Embraer is not posting profits because it is reducing debts. This indicates clearly cash positive scenario. With this debt reduction pace, Embraer might achieve investment grade by year end.
@Bryce
Jesus, another one….
@Max
Not very well versed in accounting, are you? Either that, or your trying to dazzle us with BS – failing to understand that some of us have done this for a living;
Profitability is found on the INCOME STATEMENT and covers a period of time. Cash is a balance sheet item and is at a point in time.
Profit is the surplus after all expenses are deducted from revenue. Profit is the overall picture of a business and the basis on which tax is calculated.
There are three major types of profit that analysts analyze: gross profit, operating profit, and net profit.
Cash is on the BALANCE SHEET. It even says so in the article you quoted:
BALANCE SHEET ACCOUNTS
DEBT & LIABILITY MANAGEMENT
What they did with CASH has nothing to do with PROFITABILITY. Here is the important part, you curiously omitted;
‘REVENUES AND GROSS MARGIN Consolidated revenues of US$ 1,018.9 million in 2Q22 represent a decrease of 9.9% y-o-y mostly driven by lower deliveries in Commercial and Defense & Security and partially offset by higher revenues in Services & Support.’
DEBT is a BALANCE SHEET item and is shown in the LIABILITY section.
BTW, here are the Airbus numbers for the same time periods:
https://seekingalpha.com/symbol/EADSY/income-statement
Net Income
2,832.6 3,498.7 (1,527.8) (1,384.1) 4,795.1 4,068.1
Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021 TTM
So no – EMB is not more profitable.
Do yourself a favour Max and stay in your lane. Numbers don’t lie.
Here’s a gift for you:
https://www.amazon.com/Reading-Financial-Reports-Dummies-Epstein/dp/1118761936
With some highlights:
Most businesses prepare at least two key financial reports, the balance sheet and the income statement, to show them to company outsiders, including the financial institutions from which the company borrows money and the company’s investors.
The balance sheet is a snapshot of your business’s financial health as of a particular date. The balance sheet should show that your company’s assets are equal to the value of your liabilities and your equity. It uses the formula Assets = Liabilities + Equity.
The income statement summarizes your company’s financial transactions for a particular time period, such as a month, quarter, or year. It starts with your revenues and then subtracts the costs of goods sold and any expenses incurred in operating the business. The bottom line of the income statement shows how much profit (or loss) the company made during the accounting period.
SUMMATION
EMB made $272 million in 2017.
It lost $252 million in 2018.
It lost $322 million in 2019.
It lost $692.5 million in 2020.
It lost $48 million in 2021.
So far, it has lost $2.8 million in 2022.
So Bryce and Pedro are correct in their assessments.
@Max (and for others who misunderstand cash vs profitability)
Bryce – feel free to jump in here, if I miss something.
I’m going to illustrate Cash vs Profitability using a generic example;
Let’s say Max, that you are the CEO of Max’s Jets – an OEM that makes aircraft for airlines.
You want to sell a jet to an airline and make your cash balance look good. This jet costs you $25 million to make. You work out a delivery schedule that has 40 jets being delivered as follows:
10 in 2023
10 in 2024
10 in 2025
10 in 2026
When you first rolled out the aircraft back in the day, you expected to make 20% average margin on it – selling it at $30 million. But it’s not selling. You need some money…
So you go to an airline and say “Hey – I’ll sell you these 40 jets for $800 million, but you gotta give me all the cash, up front”
It costs you $1 billion to make those 40 aircraft, but you’ll take $800 million, because you need the cash NOW and it makes the balance sheet look good.
So the journal entry is DEBIT ‘Cash’ for $800 million and CREDIT ‘Deposits and Unearned Revenue’ for $800 million.
Now you’re free to spend the cash on paying down debt, handing out bonuses to execs, making shareholders happy with dividends – because you’ve got the cash in your hot little hands.
What about 2023, 24, 25 & 26, when you’ll need that money to pay for the builds?
Meh – kick the can down the road, we’ll worry about that when it happens. We don’t disclose who gave what deposits on which aircraft and what portion has been spent where, so nobody will find out. Let’s throw a party!!!
What about 2023, 24, 25 & 26, when profitability is NEGATIVE because we’re selling jets for $20 million that cost us $25 million to make?
The amounts in deposits only get recognized into revenue when you hand over a jet, not before. 4 years from now – you may not even still be CEO! We’ll let the next guy worry about it…
Do you understand the difference between CASH and Profitability & how companies who want to manipulate things, to make a bad situation seem better – can do so, with some guys like me around to do their bidding? But I better get paid, too….
@ Frank
Excellent comments.
Nothing to add — except that there are also other ways to similarly “convert” future dollars into present dollars. For example, selling corporate real estate and then leasing it back — which dresses up today’s balance sheet (via large incidental income) by bleeding from future balance sheets (via increased recurring costs).
Selling the family silver so as to repair the roof.
@Bryce
Thanks.
Selling the family silver. Haven’t heard that in a while. Good analogy
Frank:
I took an accounting class on a whim. I dropped it, my brain was not designed for Accounting.
Its a good thing someone understands it!
Me? I liked hardware and made a decent living at it.
@Trans
Funny – I say the same thing about Engineering – physics, chemistry, calculus; all too theoretical for me. My mind works better with tangible things.
There is a certain logic to it. There is also a human element, where you look beyond the numbers, to the ‘how can this be manipulated’ factor.
Better said: If I was in charge and wanted to steal as much as I could, pull the wool over peoples eyes, profit as much as possible – before I jumped ship….what would I do?
I know it’s very cynical, but I find that by taking this mindset it keeps me closer to my money and less apt to be separated from it. Ergo – I don’t believe the BS
(A) Frank followup:
Cosmetically “nice” reports from Boeing were associated with moving up front payments left and payments due to subcontractors right into the future. ( customer of mine after an US centric take over wanted to move from 14 days to 90 days while still wanting “service, subito!”. Told them to f* off.)
In a continuous process these cosmetics only ever provide for a single quarters lipstick application 🙂
While agreeing with all the erudite accounting comments, there are another couple of things to remember.
Companies never go out of business just because they lose money. They go out of business when they run out of cash to pay their bills. A poster child for this would be the first 14 years of Amazon’s existence!
Cash is King.
That is not to say that losing money tends to make people reluctant to give you more cash! Suppliers no longer tolerate late payments and tend to refuse to ship anything until you are completely up to date, meaning you can’t “borrow” from then anymore.
You have to have a good story when you are losing money!
@RobertPhoenix
I will see your Amazon and will raise you an AMR Corp:
https://en.wikipedia.org/wiki/AMR_Corporation
‘AMR Corporation was an airline holding company based in Fort Worth, Texas,[2] which was the parent company of American Airlines, American Eagle Airlines, AmericanConnection and Executive Airlines. AMR filed for Chapter 11 bankruptcy protection in November 2011. ‘
Here’s the kicker:
‘On November 29, 2011, AMR Corporation filed for Chapter 11 reorganization bankruptcy[6] with $4 billion of cash.’
Sometimes, the debt load is so great, the hill is so hard to climb and the open door to salvation, a fresh start and a clean bill of health – is so beckoning…
….that $4 billion just isn’t going to cut it.
(You could also make the point that they did it because all of the others did, so they needed to level the playing field. The CEO Arpey had a run of 7 years in the top seat, got paid, pulled an 11 and got out.)
Food for thought. Thanks for your kind accounting words…
Frank:
Interesting take on reality. Granted Physics was not my forte at all, but mechanics and electrical (includes electronics) was.
Its the kind of logic that threads through our brains or does not and to me mechanics and electrical rules are rock solid and there is always an answer.
Accounting just did not thread through my brain. I can do basic cash flow in and out or our account but that is the limit.
Its good there are all types out there and maybe amazing as well the diversity of the human brain. Kind of a Swiss Army knife though scattered out through the population.
@Uwe
BA’s magic playbook of pulling cash forward (fake FCF)
https://www.seattletimes.com/business/boeing-aerospace/for-boeing-juggling-cash-flow-often-means-another-houdini-moment/
-> Three years ago, Sam Pearlstein, then a Wells Fargo analyst, told investors that in the final three months of 2014, “Boeing accelerated about $1.5 billion in advances from 2015.”
A company insider, who is familiar with the detailed strategies Boeing uses, said that if the defense side falls short of expectations by hundreds of millions of dollars in a quarter, the call goes out from its Chicago headquarters to the Puget Sound-based Boeing Commercial Airplanes unit with a specific target to close the cash-flow gap: Negotiate with airlines and suppliers to pull money forward, say from January into December, and delay outgoing payments the opposite way.
“We’re doing this so long, it’s routine. Pretty much every quarter,” said the insider, who asked for anonymity to protect employment. “Everyone realizes it’s not a good decision long term. But (Chicago) is afraid to have one bad quarter.”
… recently as much as 13 percent of airline customers’ advance payments — amounting to hundreds of millions of dollars — have been pulled-forward payments originally scheduled for future quarters.
-> A current Wall Street analyst, who asked for anonymity to maintain his access to Boeing management, said, “Boeing is able to manipulate Wall Street better than any company I’ve ever seen.”
He said pulling forward large amounts of cash to exceed market expectations is Boeing’s standard procedure. “It’s not like it’s a big secret.
We all know where it’s coming from,” the analyst said. “The problem is, when does Boeing run out of rabbits to pull out of the hat? The difficult thing is to work out when this cash flow out-performance will end.”
-> * Boeing negotiates with airlines to pull pre-delivery payments forward from the next quarter. Typically airlines pay about half the actual purchase price in such advance installments, with the other half due upon delivery. *Airlines are given some kind of future break in return for accelerating payment.*
* When a jet is finally delivered, the airline that ordered it often doesn’t take ownership, but instead a leasing company buys it and leases it back to the airline. In these increasingly common sale/lease-back arrangements, the lessor pays the full purchase price, which means Boeing must refund to the airline the pre-delivery payments it previously made. For the rush of deliveries at the end of a quarter, *Boeing withholds that repayment until after the quarter ends*.
* Upon delivery of an aircraft, various suppliers are owed a cut. For example, GE must be paid for the engines. Boeing negotiates with suppliers like GE, giving them a future break to take their cut of a delivery only after the quarter ends
-> Pearlstein, of Wells Fargo, wrote that Boeing pulled forward the $1.5 billion from 2015 into the final quarter of 2014 after the company’s third-quarter figures had disappointed Wall Street.
And he added that a similar trend emerged the following year as airlines United, Southwest and Alaska all *shifted pre-delivery payments worth hundreds of millions of dollars from 2016 into the final quarter of 2015*.
-> Scott Hamilton, founder of Bainbridge Island-based aviation-analysis firm Leeham.net, wrote that he knew of at least two lessors who also provided large advance payments in the final quarter of 2015.
We all know how this ended, why BA was so reluctant to slow down the MAX production even after delivery had halted.
Last but not the least
-> Boeing Chairman Dennis Muilenburg insists that airplane manufacturing’s worldwide *customer base is now so diverse that the business is no longer cyclical*. If he’s right, Boeing may be able to keep accelerating cash indefinitely.
Oops!
“they sold the Series for a symbolic $1 to Airbus – canadian dollar”
Well two years ago AB paid BBD *almost $600m, USD*, nevertheless, to increase its shareholding in the A220 program to 75%.
-> “Are Boeing and Airbus the only companies capable of absorbing the huge development cost and very late ROI of new airplane designs ?”
Haha facts say otherwise, BA had been toying with the MOM project aka 797 for like a decade. Reason? The top management was satisfied with milking the cows, rather than a billion dollar plus moonshot.
Edit:
” .. paid BBD *almost $600m, USD*, nonetheless
https://mobile.twitter.com/jmhdinger/status/1559634532923592704?cxt=HHwWgMC-pYXW96QrAAAA
-> Boeing has been pausing 737 wing production amid supply chain shortages
I doubt that is the reason when Airbus is comfortable producing gliders… and Boeing is taking out the engines on the depot for new MAX… Seems more like no one wants the MAX and they want to squeeze out the maximum margin possible these days.
lul:
Boeing has 140 Chinese obligated MAX that have not been taken up.
With an engine shortage, that makes sense to use those and any others that are stuck in limbo of not getting final payments.
If they are moving to new MAX production, that says they are being taken up.
And the other group sitting looks to be a factor of preferring new vs aircraft that have sat there for a couple years.
Boeing is just juggling the whole thing for their current reality. It makes sense.
Why they got there is a whole different story.
How do you know those engines don’t belong to airlines?? 🙄
LOL. Because Scott and Boeing say they do not?
Lul:
Figures I have is 290 MAX not delivered and 140 are for Chinese airlines.
Boeing would deliver the 140 to China asap if they were taken up.
But as of right now it looks like as long as no delivery or soon to be, Boeing can and will take the engines.
Its interesting that one report cites wing production problems and parts shortages. Maybe they can take the wings to?
“Boeing has 140 Chinese obligated MAX that have not been taken up.”
“taken up” sure is a comforting euphemism, innit ?
If China “needs” Boeing, then why don’t they accept/grovel-for those Boeing 737MAXes, posthaste?
I’m listening to Glenn Gould’s final 1981 recording of Bach’s Goldberg Variations (Var. 16) right now , and it sure speaks to this one’s condition..
I would say there are 2 areas causing Airbus issues. 1) the avionics are not in house so, they bleed money. 2) the composite wing is a questionable choice in this class of plane. It is a pricy piece that provides little benefit.
Mark:
The wing and the engines are what made the A220.
They put their money where they needed and got a significant competaive jump efficiency wise.
No one makes their own electronics.
Transworld.
You are absolutèly correct about the wings contribution to the A220s success. The fact of modern day aerodynanics is that metal can no longer be shaped into the contours necessary to create the shapes being spit out of the CFD programs. Were to the point today where the economics of the wing construction plays a very small second fiddle to aero performance. Runway performance and cruise drag are so critical today that I seriously doubt another metal wing will ever fly on a new build transport category airplane
Pnwgeek
My take as well. 777X is really all about the wing as well as the new engines. Fuselage was pretty much left as is.
I am sure they could save some weight but the big performance bennies are wings and engines.
That would be why Airbus has a new A320 or A321 wing waiting in the wings, they could compete with most of a new aircraft improvement in that alone.
Transworld…..
Di you know that some areas of the 747-8 lower wing skins in thebturbinebrotor burst windows are 1.12 inches thick and the only way to contour them was Laser Acoustic forming. You couldn’t shot peen them hard enough to move them to the shapes needed and all available stretch forming tools were completely inadequate for the task….
Pnwgeek:
I did not. That is truly amazing. Thank you. Its details like that which are all too often never available.
@Trans
If anybody knows, this guy does…
Frank:
Yea, you have to work that to get that kind of detail
I could write all day about Generators and Swithgear but the only people that care about the details are the ones fixing it. The rest want their power and rooms kept to spec temp and don’t care about the details. sigh
The 1200 airplanes to profitability figure was with the amortization of the development cost taken into account. Which shows how much Bombardier had to invest to design the C-Series and equip itself to build it.
Airbus took over the program, all future investments needed to ramp up production but also all the technology and none of the dev cost. Those remained with Bombardier which had to sell Transport and tons of other assets to erase, in part, its huge debt.
So allow me to be sceptical when Airbus claim the A220 is not profitable and they have difficulties making it profitable.
‘So allow me to be sceptical when Airbus claim the A220 is not profitable and they have difficulties making it profitable.’
Probably not a good idea to come out and tell everyone (especially your customers) how profitable a product line up is. Otherwise they’ll want to pay you less for it, than you can get.
Better to tell them you are losing money on it and you have to raise rates.
After all, Airbus has the goal of putting $10 billion in the bank, as a war chest. It’s gotta come from somewhere…
On the CSeries, Airbus took significant risk, reduced their free cash flow for years, compromised their new A319NEO, moved jobs out of EU, angered US DoC, pumped in billions with no ROI for 8-10 years, invested in Quebec & Mobile communities, confronted home share holders and won. Beating short term capitalism & protectionism.
@Keesje concering the A319NEO it was not selling way before they bought the CSeries from Bombardier. It was a dead weight from the get go.
If BBD/CSeries would have collapsed because of debts, lack of funding, that would have helped the A319NEO. And A320NEO. A few hundred at least.
Others tried to finish the CSeries: https://www.thedailybeast.com/how-boeing-tried-to-kill-a-great-airplaneand-got-outplayed
CSeries / A220 can be seen as final realization of the foundered AE316/AE317 design effort ( patched up with the A318 ) from the mid2late 90ties
see https://en.wikipedia.org/wiki/Airbus_A318#Background
@Keesje , I will give you that; if the CSeries went bust it would of help the A319NEO , but not because it a great plane, but just because it would have the market all to itself basically. Really nothing special about a shorten version of the A320. Like all shrink of any planes anyway.
The A220-300 has killed off the E2-195, the 737 Max 7 and the A319Neo;
E2-195 orders: 221
737 Max 7: 286
A319Neo: 87
Total for all 3: 594
3 different aircraft OEM’s got less than 600 orders in the niche.
A220-300: 670
The only aircraft that will get any future large orders, is the -300. The E2 may pick up a few, here and there – but it is essentially a 2×2 regional jet, not being ordered into mainline fleets. The Max 7’s only saving grace is the LUV order of 234 (if it gets certified by EOY 2022) and with that, it’ll only be in two different airlines.
The A220-300 is being ordered into mainline fleets around the world; Delta, KAL, Air France, Air Canada, Swiss, Qantas, JetBlue – it has 6 carriers in Africa alone
https://runwaygirlnetwork.com/2022/07/airbus-a220s-african-success/
‘Behind the Airbus A220’s six-operator African success’
and two LCC’s are making it their sole aircraft of choice with Breeze in the US and airBaltic in Europe.
It has been bandied about that the critical mass of operators is about 20 airlines, in order to reach the next level of operability.
As of July 2022, there were 221 A220 family aircraft in commercial service with 16 airlines, including 1 undisclosed operators. The five largest A220 operators are Delta Air Lines (56), airBaltic (36), Air Canada (31), Swiss Airlines (30) and JetBlue (12).
It’s all over, except for the shouting.
@ Frank
Great comment.
Regarding the 234 MAX-7s for LUV: I have a feeling that that order is (soon) going to transform into an order for MAX-8s instead — offered at super-enticing discounts. In the company’s current state, it’s not in BA’s interest to continue with the MAX-7 — too little RoI.
@Bryce
Yah…running the aircraft through the cert process and then, making them different on the production line, for less than 300 units, doesn’t make sense – does it.
Especially when getting bargain basement revenue on the model. It’s not like they’re making $10 million an airframe, on it…
I also think the A319 was of not much significance as a part of the bigger puzzle. As others have pointed out ad nauseam, aircraft shrinks are inefficient stopgaps.
How’s that Boeing MAX-7 thingie going, anyway?
blanket statement are dangerous.
At one time the A319 provided for 50% of A320 Family deliveries. ( and the A321 was “also running” )
Today it is going towards A321 50%+ and the now smallish A319 is demoted to single digit sales ( if any)
See my theory on “Magic Range” 🙂
Thanks for that additional A319 info.
The A225 would have been a serious threat to the A320 and 737-8 program. Now Airbus owns that threat.
Airbus will reap this investment for the next 30-40 years while Boeing will have trouble to even finance a new program.
In 20 years, people will point at the decision that led to Airbus given the A225 for free as the point where market share went from 60-40 to 80-20.
And Boeing could’ve had the A220 for close to nothing..
odd- or something.
😉
Ego
I am left wondering why airbus is seemingly so uncommitted. And also, do they have a more radical plan in mind , such as completely changing the production process for the wing of tomorrow?
> I am left wondering why airbus is seemingly so uncommitted.<
To what are Airbus "seemingly so uncommitted" ?
> I am left wondering why airbus is seemingly so uncommitted.
I don’t think that is the case at all. Does it get the same attention as the A320, no, but they continue to invest 100’s of millions executing on the plan as announced several years ago. Most recently completing a “pre-stuffing” centre in Mirabel which brings the manufacturing process for the A220 much closer to the one for the A320.
You do not want to make major and sudden changes to an aircraft, that is the way for things to go off the rails.
So Airbus is shaping the A220 for the future while making those changes its deemed the ones that return the most bang for the buck.
Boeing made the rear fuselage on the 787-8 common with the -9 and -10 a while back. There is a calculus that doing the rest of it does not pay with the number of -8 that will be built.
Airbus has scrambled on the A220 to start with, aka Alabama and a 2nd line and the deep dive into the program and what needs to be optimized.
As was noted, even for a free program its not cheap.
Everett is in fact being put to good use: re-working all the f’ed-up Charleston Boeing 787 product.
#winning #shouldbeFine
Bill7:
Good point though I do not know if both the wrap around line and the FAL are being used for that (6 per last report).
And how many 787 mechs can you find on the other birds to shift over may be a limiting factor.
My comment regarding Everett was satirical: it should not be at all necessary- nor is it cost-effective, nor is it a long-term plan- to rebuild Charleston 787 product in Everett.
#winning
I think that the COMAC C919 will be certified by countries other than China.
Bill7:
I should have said the countries that are cross recognized and amount to a world recognized certification.
While those include Japan, Brazil, Canada and the US/EU, the resources required for that mostly fall to the EU/US.
Canada of course has some cross certs under the belt including the now A220 and Brazil of course with the various commercial aircraft.
Russia formally had EU approval for example, they did not apply to Brazil or Canada.
In theory Zimbabwe could approve the C919 to fly (and some others) and maybe even “certify” it. No one else would do so since it would not have EU or US certification.
And yes some of that cross recognition is conditional per review. The EU rightfully so dug into the MAX cert and imposed additional requirements (subsequently the FAA agreed to them).
The FAA terminated its effort to certify the YC-21 and then the C919 and the EU either put it on hold or terminated it after looking at it as well.
Is it possible Lao and Myraimir could allow it ? Yes though no idea what the odds are. I have not seen that the ARJ-21 has made flights out of China though in inop airline in Indonesia has them on order (seems pretty amazing for what occurred with the MAX there).
Previously the MAX could not operate in China, now it can though the Chinese airlines are not flying it in passenger service.
“I should have said the countries that are cross recognized and amount to a world recognized certification.”
Exposure of the US via _Boeing subverting the FAA_ has maimed this globally accepted construct.
“Blowback is never unfair”
-> Previously the MAX could not operate in China, now it can …
Really? Doubtful. 😂
@ Bill7
I agree with you.
Starting with China’s direct neighbors, and then spreading to its friends in Central Asia and the Middle East.
There’s a growing list of countries that are completely unimpressed by the “western” way of doing things.
“..In July, Boeing said it had brought 737 production to 31 aircraft monthly, achieving a goal. But, executives warned, their challenge will be maintaining that rate.
“The programme reached a rate of 31 airplanes per month, though rollouts from the factory vary month-to-month based on factors such as timing of supply-chain deliveries,” Boeing says. “Our team continues to focus on driving stability across our operations.”
The 3 August email says the 737 wing manufacturing team “is still staffed for” a production rate of 31.5 737s monthly, with some workers on “loan” from the 747, 767 and 777 programmes.
However, the 737 final assembly lines are still bringing on more employees as Boeing seeks to raise single-aisle production to meet industry demand.
“The Final Assembly Team is working aggressively to staff up all three lines, of which two are already fully staffed and the third will be soon,” it says.
“Once Final Assembly regains their production health, they will be able to produce at current rate of 31.5, and exceed that throughput with relative ease.”
The email says Boeing has “a large quantity of wings that are being stored outside”. But, once fully staffed, “the reserves that are outside could quickly be consumed by final assembly”.
The source familiar with Boeing’s production also says the company has been working to address wing manufacturing quality issues, some involving miss-drilled holes that require rework.
The 3 August email says Boeing seeks to improve quality and prevent defects – noting a 2022 target to reduce defects by 50% – without detailing specific issues.
The memo also stresses the need to focus on quality, citing “problem-solving tools… to address chronic or high-impact defects”.
“We need to instill safety & quality into everything we do, and we need to restore [the] operational stability and health of our business,” it says..”
https://www.flightglobal.com/airframers/boeing-paused-737-wing-manufacturing-to-address-supply-shortages/149862.article
Regarding BA’s “competitor” to the A220: any news regarding the MAX-7 cert?
It’s only 19 weeks now to the Dec. 31 EICAS deadline.
It wouldn’t surprise me if the FAA is deliberately delaying the process, because it’s reluctant — in view of all that has happened in the past 3 years — to certify a plane that doesn’t meet modern standards: on Jan. 1, the ball then passes back to Congress.
Alternatively, BA is deliberately delaying the process, because it realizes that the MAX-7 is a commercial dud, and it’s not worth pumping more money into it: BA probably feels that LUV can be enticed to take MAX-8s instead.
One way or another, it shouldn’t be taking this long to certify a simple shrink.
The root cause of 737MAX problems, longitudinal stability, should be easier to fix for the 737-10 than for the shorter 737-7.
Apart from that, a solid credible crew alerting system is what the FAA/EASA want. Because the data to support the current systems safety track record (& changed product certification) seems a bit too smart, engineered & tailored to be real credible, objectively, after a renewed review. But authorities are complicit a bit here, for allowing, not intervening, that complicates things.
The 737-7 risk is a Southwest team flies to Mobile or Maribel, to have in-dept discussions on a just right A220 version. To replace a chunk of the huge, aging 737-700 fleet in service.
In these times of labour shortage – if what Bryce said about running out the clock is unfounded, and BA is really serious about trying to get the aircraft certified on time (I know, a big if) , it makes a heck of a lot of sense to get all hands on deck for the Max 10. It competes in the A321 niche, it has more orders and generates better margins (I’d bet my last dollar) than the Max 7, which is primarily for LUV – who gets great prices on their aircraft.
If you had to choose between getting one of them done in time…
Frank:
The problem is all hands stops everything else and its also a matter of resources.
The -7 is a looser, but South West has a lot of -8 ordered and those over the next 10 years will be the most.
Another aspect is the -7 is at the paperwork end and not the same people do that as the testing end.
A mad scramble would not get the -10 done and it would wreck the progress made.
I think Boeing is valid in the lack of improvement of a Alert System Kludged onto the existing 737 systems and would break the very important commonality (in this case you would be flying aircraft that look, feel and handle the same until an alert came up and you have to shift between system types to deal with, not a good thing)
If the goal is to just punish Boeing for revenge, hmmm.
I flew C150 and C172. Both were laid out identically though the C172 was by far a better performing aircraft. I could easily switch between the two.
The alert system would not have stopped the MAX crashes, if you did not know about MCAS even the alert on the panel would not have meant anything to you.
Boeing can’t accelerate the -10 and it really is up to a rational decision on a reg not intended to do what it is for that situation.
“.. Max 10. It competes in the A321 niche, it has more orders and generates better margins…”
There is a lot of outlay due before any -10 can be delivered to customers. ( and did they sell it on the MAX quip: “no transition training” ?)
And what I wrote earlier: the -10 MLG is convolute, heavy and expensive ( manufacture, mx )
In US management circles up front “investment” isn’t all too popular either.
BA is already approaching MAX-10 customers to see if they’d be interested in switching orders to the MAX-9 instead.
That’s what’s called “writing on the wall”…
keesje:
You should not that the A320 has loading issues and has had program problems with pitch.
Like speed trim, its all in the programing and that is not a core problem for the 737 MAX, its only a tad more evident at certain stall aspects.
MCAS tunes that out like any other program. It was a disaster implementation wise as to how it worked but the program itself is nothing new in keeping jets working across the low to high speed spectrum.
This is an example of Rockwell Collins work (yes its on the 787, I do not have a reference to the A220 and this is not intended as a diversion into 787). It does explain how great a part of the avionics system Rockwell Collins is and why the would not want to negotiate discounts as they put large up front costs into those systems in the first place.
https://www.aviationtoday.com/2022/08/19/national-aviation-day-looking-back-boeing-integrated-787s-avionics-systems/
The complexity is mind boggling and an A220 is not going to have any fewer or less in the flight end.
Lufthansa may be able, finally, to take delivery of its first 787 by the end of August, almost three months later than rumored.
I suspect that it will be D-ABPE, since that’s the only “new-build” 787 in the queue for Lufthansa (0.4 years old).
The other 4 frames in the queue for Lufthansa are all 2.9-3.1 years old –> heavier re-work.
https://www.planespotters.net/production-list/Boeing/787?sort=airline&p=15
Have a look at this:
https://www.planespotters.net/production-list/Boeing/787?sort=ln&p=23
This is the sort by line number. It’ll let you know, where the aircraft is coming from, in the pile or off the line.
This is the AAL 787 that BA delivered on Aug 10, 2022, after the restart, line number 1099:
https://www.planespotters.net/airframe/boeing-787-8-n880bj-american-airlines/r7wg0j
It flew straight into storage, in Victorville, according to Planespotters. For whatever reasons (staffing, demand etc) it seems that airlines aren’t gagging for them.
That must be disheartening for the people at BA;
You don’t deliver a 787 for quite a period of time. You finally work and work – get the product sorted and good to go…
…only to have it fly into parking.
UPDATE:
It seems that AAL has parked another recent delivery:
https://www.planespotters.net/airframe/boeing-787-8-n876al-american-airlines/e5ok9g
I haven’t really had a look at the BA financials from Q2, been kinda busy. But I was perusing an article about the situation there and this statement was part of their earnings call:
‘We now expect delivery to be closer to the low 400s for 2022, short of what we discussed earlier this year, as we drive stability and predictability. We ended the quarter with 290 MAX airplanes in inventory, of which roughly half are designated for customers in China. Given this uncertainty with our customers in China, we now expect more deliveries of airplanes from inventory to shift into 2024. (Boeing FQ2’22 earnings call)’
Jefferies Group has estimated that 12 – 787’s are going to be delivered in 2022. I ran some quick numbers on what was posted here, by our resident BA expert and came up with:
The 787 fix is a minimum of 3000 hours of additional work, if all goes well. That’s 375,000 hours of re-work, to clear the backlog.
If you had 100 re-work experts in a team, working a full 40 hour week – it would take you 94 weeks to do the work. If there are no hiccups.
So your looking at 2 years to get those aircraft fixed.
They need teams on the 737 Max fix. The 787 Dreamliner fix. The 777X re-design program.
It’s gonna be a tough couple of years
Which is why they need to prune “dead wood” out of the mix: MAX-7, MAX-10…777X.
Concentrate on the MAX-8, MAX-9 and 787. Introduce HGW and F versions of the 787.
Forget about clean-sheet programs until the debt situation improves drastically.
“…So your looking at 2 years to get those aircraft fixed…”
And while that’s going on, monthly compensation payments still have to be made to the customers who are waiting for their delayed frames…and/or full deposits have to be repaid on frames that customers decide to cancel without penalty.
Frank:
The MAX is fixed, so you can rule that out.
But also these are all different programs with different issues.
The possible cross between the 787 and the 777X would look to be quite different (as well as distant geographically)
I am not saying is all solved by any stretch but not for the reasons of people. The 777X does not have the spun fuselage so the engineering would be different.
I also believe the 777X is not the engineering but the validation of the certification.
Its more along the lines of the 787 battery that Boeing came up with stuff that had no basis for a connection to reality and presented it to the FAA like it did. That of course got revealed publicly, fortunately on the ground or incident near to ground.
The 777X did have a blow out issue, but the FAA statements indicated that the Boeing culture on the 777X had not got it and were trying to blow smoke and the FAA was not buying it (releasing a rare public statement in that regards) . More or less the FAA said Boeing had to quit blowing smoke and adhere to the certification process and it would not proceed until it did (with a notation that the culture was not adjusting to the new reality)
‘The MAX is fixed, so you can rule that out.’
The Max fix process is complete, now it 1) Has to be applied to each Max in inventory and 2) Each Max has to be spun up, tested and made airworthy.
The Max solution is there, now it must be applied to each aircraft. That is why there are still 300 aircraft in inventory…
‘I also believe the 777X is not the engineering but the validation of the certification.’
Shop talk from our expert is that the tail is too small and there is a high alpha problem, that BA was trying to fix with software. You can take that up with him.
But the numbers don’t lie. The DPB on the 777X has increased again, after a $6.5 billion write off. BA needs to sell more Max’s and 787’s to cover money spent. The backlog, as it stands – is not enough.
> The Max fix process is complete <
No, that's a provisional fix, that applies to the MAX-8 and MAX-9, for the short term only. Hence the foot-dragging by Boeing on the third-sensor solution (required by EASA), which must be applied to the earlier provisionally-certified aircraft, as well..
Those who claim the Boeing 737MAX is "fixed" are smoking some strong stuff. I won't mention its trim wheels, for now.
Indeed.
The long list of MAX incidents in that recent ABC article are food for thought.
Ditto for the findings in the recent MITRE report.
A sub-standard dinosaur with a band aid.
> The MAX is fixed, so you can rule that out. <
Oh? Are MAX-7 and MAX-10 "fixed", by any definition?
Some people just assume that the EICAS issue is going to get ironed out by Congress…
On the other hand, maybe “fixed” was precisely the right term from our good friend.
😉
[cough] third synthetic [cough] sensor..
“The MAX is fixed, so you can rule that out.”
MCAS is half fixed ( provisional solution, waiting for 3rd “any”sensor to get into the “acceptable” space.
Some other stuff got some scrutiny too.
Other issues like FOD accumulation in newbuilds got unintended visiblity.
Nothing really proven about other traps set up by decades of layering up design patches.
Some takeaways on a quiet Friday night
(No going out tonight, no clubbing or bars, just chilling with my doggo…)
Had a quick look at the Q2/2022 financials from Boeing;
https://s2.q4cdn.com/661678649/files/doc_financials/2022/q2/2Q22-Press-Release.pdf
One of the points we discussed was the debt load they are carrying. Net debt (cash and equiv less LTD) was a good measure.
For Q4/2021 Net Debt was $8,052+8,192-56,806= $40,562
For Q2/2022 it is $10,090+1,358-51,794= $40,346
Which makes it look like net debt hasn’t increased (although cash and equiv went down by $4,796 over the period) which is good.
However…
Check out Short-term debt and current portion of long-term debt.
It went from $1,296 as of Q4/2021 to $5,406 as of Q2/2022.
(Accounting helpful hint; When doing a quick analysis of a set of financials, take a quick look at the difference between the last periods numbers and the current periods number. If the difference is more than 10% or thereabouts, investigate further. Ask the question, why did this happen? In some companies case, like BA…a couple hundred million is not really significant)
A change of $4,110. As in $4 billion.
There is nothing in the press release about it, so you gotta go digging in the financials
https://s2.q4cdn.com/661678649/files/doc_financials/2022/q2/360ad74f-1271-4756-a26b-36341c049389.pdf
and find it in Liquidity Matters
‘ As a result, our cash and short-term investment balance was $11.4 billion at June 30, 2022, down from
$16.2 billion at December 31, 2021. Our debt balance of $57.2 billion at June 30, 2022 is down from $58.1 billion at December 31, 2021. Shortterm debt and the current portion of long-term debt increased to $5.4 billion at June 30, 2022 from $1.3 billion at December 31, 2021. The
current portion of long-term debt includes term notes of $0.3 billion maturing in the fourth quarter of 2022, $1.7 billion maturing in the first quarter of 2023, and $3.4 billion maturing in the second quarter of 2023’
SO the LTD got shifted into Short term debt, as it is coming due. But add that $4 billion increase in short term debt, which wasn’t around in Q4/2021, to the net debt amount and your Net Debt is up to over $44 billion, from $40 billion in Q4/2022.
Another thing:
Check out Advances and progress billings
When airlines order jets, they place deposits. Then as time goes by, they also have to make extra payments – until the final delivery payment is made and the complete amount of deposits made up until that point, for the delivered aircraft, is backed out of Advances and transferred to Sales (or Revenue) for the period in which it is delivered.
Advances and progress billings went from 52,980 in Q4/2021 to 52,066 in Q2/2022 – a drop of $914 million.
This means that more aircraft were delivered over the period, then deposits/payments for new orders were taken in.
Those final cash payments weren’t enough to cover their expenses. That was future monies they rec’d, which was spent on other stuff…
Inventory
Increased to 79,917 from 78,823, up $1,094. Over a billion.
Normally, that would mean that they spent cash to buy parts/labour to make aircraft, because more airlines ordered them and they have to get them together, yes?
Back to the fine print:
For the 737
‘At June 30, 2022 and December 31, 2021, commercial aircraft programs inventory included the following amounts related to the 737 program:
deferred production costs of $1,594 and $1,296 and unamortized tooling and other non-recurring costs of $649 and $617. At June 30, 2022,
$2,230 of 737 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in
the program accounting quantity that have firm orders and $13 is expected to be recovered from units included in the program accounting
quantity that represent expected future orders.’
————————————————————————-
Deferred production balance went up, on the Max program. That is the re-work being done, IMO. What I find interesting, is this:
“$13 is expected to be recovered from units included in the program accounting
quantity that represent expected future orders.”
As it stands today – if BA were to not get another Max order, the program would be a loss and would have a (small) write off.
============================================
777X
‘At June 30, 2022 and December 31, 2021, commercial aircraft programs inventory included the following amounts related to the 777X program:
deferred production costs of $1,194 and $652 and $3,625 and $3,521 of unamortized tooling and other non-recurring costs.’
—————————————————————————-
Again, DPB went up to $1194 from $652. They wrote off another $102 million during the quarter and add this:
‘The level of profitability on the 777X program will be subject to a
number of factors…(they list stuff) One or more of these factors
could result in additional reach-forward losses on the 777X program in future periods.’
They don’t even have an estimate on how many orders the need to break even
================================================
Poor old 787
‘At June 30, 2022 and December 31, 2021, commercial aircraft programs inventory included the following amounts related to the 787
program: deferred production costs of $12,056 and $11,693, $1,931 and $1,907 of supplier advances, and $1,822 and $1,815 of unamortized
tooling and other non-recurring costs. ‘
‘We expensed abnormal production costs of $595 during the six months ended June 30, 2022.’
—————————————————————–
The DPB went up another $400 million and they wrote off ~$600 million, since they wrote off $3.5 billion in Q4//2021.
===============================================
Not great
From the 2022 Q2 BS, if you add up long term debt + short term debt + accounts payable – accounts receivable…you get $63.79B in total. Not a nice sword to have hanging above your head.
@Bryce
A/R, in the context of BA – isn’t the same as A/R for you and me. A/R happens when a sale is executed and either goods or services have been rendered, to the buyer.
The seller, as part of the deal, offers payment terms to the seller. That’s why it’s an asset account, it’s supposed to be a loan, (if you will) to the buyer – until he pays you out, then the amount gets shifted from A/R to Cash.
But the amount in A/R is recorded, upon sale.
When BA completes a sale, it gets a deposit. You can consider it a partial payment. It get’s lumped with all the other deposits in a Liability account, because no service has been rendered upon sale, but money has changed hands.
The actual revenue is recognized upon delivery.
A/R would be used in Boeing’s case – let’s say some airline agreed to purchase an aircraft. $50 million, total price. They gave $20 million in deposits and PDP’s, leaving $30 million to be transferred on closing date.
So closing day comes. The guys from the airline are in Washington. The CFO is with them. He tells BA, “Guys, sorry – but we’re short cash this month. We haven’t got your $30 million for you. You need to give us some time to get it together”
So the guys at BA swear at the CFO, call him some names, calm down some and tell him he should have let them know earlier. He apologizes and asks what they want to do. They say OK – can you do $10 million a month, for the next 3 months?
CFO says ‘Yah, we can do that”
So he gives them $10 million, takes the aircraft. Boeing will account for the transaction something like this
Date sale _____/_____/_____
……………………….Debit………………….Credit
Revenue…………………………………50,000,000
Deposits………..$20,000,000
Cash………………$10,000,000
A/R………………..$20,000,000
So revenue is recognized for the full $50 million.
$20 million get’s backed out of Deposits (remember, that amount had already been added into CASH when the money was deposited when CASH was Debited for $20 million and Deposits were Credited for $20 million. The $20 million has been zeroed from the Deposits account and the only thing remaining is the money in the bank account)
$10 million gets debited to the bank account, as a partial payment.
$20 million Debited into A/R, which is an Asset account. It sits there, waiting for monies to come in. In a month, when a $10 million payment comes in, it will be Credit A/R for $10 million, Debit Cash for $10 million.
Some notes:
As noted in the financials by the small amount, Boeing really doesn’t offer A/R terms. If an airline doesn’t have the money to pay outright, BA usually sends them for financing. They have $3 billion in A/R. I don’t think it’s something they want to get into. Maybe it’s gov’t contracts?
When recording a journal entry, you usually show the Debit first. I showed the Credit first, so that it is understood that the entire Revenue is recognized at that date, regardless of payment terms. That’s all Deposits, Cash & A/R are – payment terms…
Thanks for the elucidation 👍
That’s A/R.
BA also had more than $9B A/P at the end of Q2…and that’s presumably owed to suppliers.
Question for PnwGeek
—————————-
Regarding the 787 repairs and aircraft is service, previously discussed;
You had mentioned how the fault was due to a software error in a measuring device for gap size (or something along those lines, please forgive my ignorance if it is wrong) and it occurred at a certain Line Number.
Boeing knows which line number it i and it only effects aircraft made from that line number onwards, correct?
Do you know which line number it is? I will elaborate as to why this is important.
This is page 20 in the Planespotters production list of the 787, sorted by line number.
https://www.planespotters.net/production-list/Boeing/787?sort=ln&p=20
Now – let’s go down the list, by line number – to see where deliveries stopped, because of the problem:
We can skip Norwegian 955 (financial reasons)
Another Norwegian #971 & 983
Here we go:
El Al 985
Air Europa 988
Qatar 991
China Eastern 990
(Chinese airlines did in fact take delivery of 787’s, as the list indicates)
This kind of looks like the window where deliveries were halted, in the Line Number progression.
Now check out
Vistara 993
Westjet 994
All Nippon 995
United 996
Go to page 21
https://www.planespotters.net/production-list/Boeing/787?sort=ln&p=21
AAL 999
Turkish 1001
EVA 1002
All Nippon 1003
United 1004
Ethiopian 1005
BA 1006
Turkish 1007
Westjet 1012
Air France 1013
Turkish 1017
United 1018
Turkish 1021
United 1022
Saudi 1024
AAL 1025
AAL 1029
United 1030
Etihad 1032
United 1038
United 1044
Air Premia 1047
United 1048
United 1054
Nippon 1056
JAL 1057
United 1058
JAL 1059
Nippon 1094
Nippon 1095
All of these were delivered to airlines, before the stoppage.
Now AAL 1061 was recently delivered, Aug 15 2022, so we can assume that it is one of the re-worked 787’s where the gaps were fixed.
Boeing delivered all the way to line number 1095 to Nippon, which is in the range of line numbers effected. All Nippon DIDN’T take 995 or United 996, when they took other line numbers later in the list.
I would propose that there are 787’s in service, that have gaps that are not to spec.
Would be good to know at what line number the problems started….
As previously countered to that assertion by @pnwgeek: an FAA memo from 9 months ago referred to *more than 1000 787s* with QC / gap issues, and also indicated that BA had no record of which frames were / were not affected.
https://www.adn.com/nation-world/2021/11/20/faa-memo-reveals-more-boeing-787-manufacturing-defects-including-contamination-of-carbon-fiber-composites/
Well, let’s post the exact comment from Dominic Gates:
The FAA memo, which lists safety conditions affecting airplanes currently in service worldwide, states that these tiny gap defects are thought to be present in more than 1,000 Dreamliners. These are not considered an immediate safety concern but could cause premature aging of the airframe.
“We’re looking at the undelivered airplanes nose to tail, and we have found areas where the manufacturing does not conform to the engineering specifications,” a Boeing spokesperson said Friday. “None of these issues is an immediate safety-of-flight issue.”
Those planes currently in service can be inspected and reworked later during routine maintenance, the spokesperson said.
However, complicating the process, the FAA memo states that Boeing doesn’t have the detailed configuration data on each plane to know which may have the defects.
and
Finally, the memo notes that the FAA is still evaluating Boeing’s proposal to use statistical sampling to determine which airplanes are affected by the lack of shims and tiny gaps at the joins.
The memo states that more than 1,000 airplanes currently flying are affected and that the FAA is concerned about the lack of detailed assembly data on every airplane. Boeing submitted its proposal for inspections and indicated that the process would not require FAA approval.
“Boeing submitted its proposal for inspections and indicated that the process would not require FAA approval.”
Fascinating hubris by BA.
Needless to say, the FAA didn’t share this stance — hence the further 9-month delay.
Don’t be distracted by diversions, there are multiple structural issues regarding the 787. One (only one, I believe) was a software problem.
From AirInsight
-> As we discussed in our story in April, the 787 has a number of quality issues. The first was found in August 2019 in the aft fuselage and included incorrect shimming between sections 47 and 48. This has been traced to a software issue that incorrectly read the size of the shims, which are tiny pieces of composites that fill up any gaps where the sections join. A year later, in August 2020, a skin flatness problem was found on the inner mold-line of the aft fuselage barrels. Although the imperfection was the size of a human hair, together with the shimming issue it formed a safety of flight issue. The extensive review not only identified quality issues in the aft sections but also on the center fuselage and the nose. As a result, Boeing paused 787 deliveries in October until March 26, when it thought it had traced the root cause of the problem and could restart deliveries after re-work on aircraft with any deficiencies. Then, in May, the FAA raised concerns about Boeing’s inspection methods. Deliveries were again suspended and continue to this day …
-> The August 2019 shimming issue and September 2020 skin flatness issue required rework on eight Dreamliners that had already been delivered to Singapore Airlines, ANA, Etihad, Air Europa, Norwegian, and Air Canada, *all produced in early 2019*.
https://airinsight.com/the-boeing-787-has-a-new-nose-issue/
I wonder of the A220 or the A320 would have alerted the crew they were asleep?
https://simpleflying.com/ethiopian-airlines-pilots-asleep/
That is said with tongue in cheeck (US for with humor), but sometimes the old systems are the best systems.
> sometimes the old systems are the best systems. <
Yep! Boeing's stone-age, grandfathered systems worked superbly well in the two all-fatalities Boeing 737MAX crashes (only 346 lives lost there), and the most recent all-fatalities Boeing 737NG crash, too..
#winning
There are repetitive assertions above that China has cleared the 737MAX to fly, but this is not accurate.
The CAAC set *three* conditions that had to be met before the MAX could return to service: the first and second conditions are relatively straightforward, but the third condition is (probably deliberately) so broad and vague that the CAAC can allow the grounding to drag on indefinitely, if desired.
“CAAC has set three principles for the jet to return to service in China – design changes need to be certified, pilots need to receive proper training and **effective improvements need to be made to address the specific findings of investigations into the two crashes**.”
For example, one of “the specific findings of the investigations into the two crashes” was that the MAX’s outdated CAS only served to confuse the pilots rather than aid them. Implementation of EICAS is an “effective improvement…to address” this finding — but the MAX doesn’t have EICAS. So, the Chinese can say:
“No EICAS, no re-cert”.
https://www.globaltimes.cn/page/202103/1216917.shtml
https://www.globaltimes.cn/page/202108/1230693.shtml
-> Oh, look, a fully capable RVS-equipped tanker (RAAF KC-30A MRTT nonetheless) takes care of a USAF B-2
https://mobile.twitter.com/CobraBall3/status/1561096821736280064?cxt=HHwWgMCo-bnSkKorAAAA
And it didn’t scratch the B2’s paint, either…
Bryce:
I am going to call your thoughts on the MAX in China wrong.
It is allowed to fly in China. The MAX met the FAA and EASA requirements to return to service.
China does not have to let the MAX return to service, they don’t need a reason. Or more accurately for reasons that are off allowance to post. China clearly was correct to ground the MAX, it needed desperately to be grounded and good for them in doing so and I applaud them for that.
If Boeing never gets the MAX flying in Chinese Airline service again, it only has itself to blame. China clearly can make any decisions it wants to and also clearly does or is in their choice of supplying aircraft to the Chinese airlines.
@ TW
Can you provide any flight tracking link that shows the MAXs that — according to you — are flying in/out of China for other airlines?
The CAAC makes its own rules — independent of what the FAA and EASA do. And, incidentally, the EASA re-cert is purely provisional — you must know that by now. Regulators are perfectly capable of going out on a limb.
> It is allowed to fly in China. The MAX met the FAA and EASA requirements to return to service. <
Perhaps this is- or should be- too obvious to state, but meeting FAA and EASA (provisional, in the latter case) requirements does not make the 737 flyable in China.
Maybe that commenter has a private meaning of "allowed to fly in China", of which I and perhaps others are unaware.
“Maybe that commenter has a private meaning of “allowed to fly in China”, of which I and perhaps others are unaware.”
I can’t help, from time to time, but wonder what that person was smoking.
smoking…
paychecks ?
https://www.google.com/amp/s/simpleflying.com/ethiopian-sleeping-pilots-suspended/amp/
Ethiopian’s Sleeping Boeing 737 Pilots Have Been Suspended By The Airline
-> The airline has opened an investigation into last week’s incident after two pilots fell asleep and missed their landing.
“Hackers” hacked into a Boeing 757. All legacy aircraft are vulnerable.
If FAA and other authorities (CAAC, EASA) would at this stage put out an AD that all 737MAX (incl. -8) do require to have a fully redundant (3 source AOA) modern (767/777 gen) EICAS within 15-18 months, Boeing could probably not survive by itself.
So IMO FAA is using the 737-10 drawing a line in the sand & could require an -8 upgrade later on.
It will be particularly interesting to see what the EASA does.
In its *provisional* re-cert documentation, the EASA said that — in addition to requiring retrofitting of a third AOA input to all MAX models — the MAX’s CAS would need re-evalvation before definitive re-cert could be achieved.
The Chinese may follow a similar path.
For BA, it has to fill about 100 empty slots *each year* if it ramps up the MAX production as planned.
Remind me how many orders it received in July.
Air New Zealand delays delivery of its 787-10s
It looks like it’s another case that BA can’t deliver jets as promised:
-> “Air New Zealand has orders for eight 787-10s that it does not expect before the year ending in June 2025. That represents a one-year delay from previous guidance based on what Thomson said is the airline’s “current view of likely delivery dates” after discussions with Boeing.”
Whether the 87s would arrive as rescheduled remains to be seen.
I wonder if any airlines are changing their orders to A330neos because of delays
of the 787s.
Ironically the pandemic saved BA, to a certain extent. Long-haul market has not fully recovered and airlines can charge more because constriction of more supply. *BA is paying good money to customers for compensation*, that may be why they haven’t bolted yet. But delays would make BA impossible to fulfill new orders for near term. Those would flow to its competitor.
https://onemileatatime.com/news/malaysia-airlines-airbus-a330neo-order/
-> In a survey, 14% of Boeing safety engineers who act for the FAA cited management interference and 24% fear retaliation.
Boeing sees progress, with more to be done.
Workers: Some progress evident.
FAA engineer: Boeing safety culture shift is too slow.
https://mobile.twitter.com/dominicgates/status/1562786886099165184?cxt=HHwWgICj2ZKZkbArAAAA
That doesn’t inspire much confidence, does it?
A new color lipstick on the same (reckless) old pig.
A little disconcerting. The Brain Trust probably felt that after they took out MCAS, everything was hunky dory. But at least Engineering felt comfortable to be honest in the survey. That’s encouraging.
SamW
You do know that MCAS is still on the airplane. The need for the nose down trim input to get compliant yoke forces in very high alpha is still there. What was changed was that the triggering input AofA value is now redundant, as it should have been from day 1
Yes sir. Got it.
-> Yikes.
A boom cable snaps on a Boeing KC-46 tanker carrying a Congressional delegation, forcing the jet to land at McGuire AFB in New Jersey with the multi-million dollar advanced boom dragging the runway. No one hurt.
https://mobile.twitter.com/dominicgates/status/1562592863112003584?cxt=HHwWgIDQ5cL7uK8rAAAA
> A boom cable snaps on a Boeing KC-46 tanker carrying a Congressional delegation, forcing the jet to land at McGuire AFB in New Jersey with the multi-million dollar advanced boom dragging the runway. <
#betterThanEver
Let’s remember, Airbus went through a period early in EIS for the MRTT in which the boom snapped off in flight.
Let’s cut Boeing a break here.
The MRTT has bombed the Med with more than boom….. It shouldnt matter that every now and again both birds suffer boom issues, it seems like an equal opportunoty failure, unless the AB guys were lucky enough to spear a protected whale or something of that ilk……
AFAIK the incident I’m aware of took place *before EIS*.
Major challenges continue, but why?
Costs. Delays. Unprofitable. Quality control. It’s all there.
Airbus took over the A220 four years ago.