Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
New air cargo operators to drive freighter demand, Boeing says
By Bryan Corliss
Nov. 9, 2022, © Leeham News: The Boeing Co. projects the world’s air cargo fleet will grow by 80% in the next 20 years, as new operators rush to meet demand caused by a global boom in e-commerce.
This will translate into orders for nearly 2,800 new and converted freighters by 2041, said Darren Hulst, Boeing’s vice president of commercial marketing.
Boeing 747-8F jets at Boeing Field, Seattle, during initial flight testing in 2011. Bryan Corliss photo.
As many as 40 new companies are getting into the air cargo market, ranging from start-ups to traditional shippers diversifying into the air cargo market, Hulst said.
“Cargo has been, relatively, the bright spot in aviation since the beginning of the pandemic,” he said during a briefing with reporters prior to today’s International Air Cargo Association forum in Miami..
SUMMARY
- Cargo market hanging on to most pandemic gains
- Demand strong for dedicated cargo jets
- Boeing doesn’t see need to replace 747-8F until ‘mid-century’
Air cargo market hanging on to gains made during pandemic
Air cargo revenues – driven by a surge in e-commerce – skyrocketed during the pandemic, Hulst said. “Revenues were 70% higher on air cargo in 2021 than they were in 2019, and (they) should roughly maintain those levels in 2022.”
The value of air cargoes shipped grew to $170 billion last year, and should stay close to $160 billion this year. “Not only record levels of cargo revenue, but unprecedented levels,” he said. “You’re still seeing significantly higher average yields, which is providing a revenue environment that is still remarkably stronger than what existed in pre-pandemic times.”
As a result, Hulst said, cargo carriers grew their fleets by roughly 15%, adding nearly 300 freighters to their fleets, with “the vast majority, all but maybe 30 of these,” being Boeing jets, either new-built freighters or conversions.
More growth is coming, he said.
Boeing projects global demand for air freight will grow by about 4% a year. “These e-commerce networks continue to expand and it’s not just the mature operators,” Hulst said, adding that there is “significant activity in the startup space or new logistic markets and networks that are being created, especially in emerging parts of the world.”
Right now the market is seeing “big e-commerce names joining with airlines or creating airlines to create their own networks to satisfy the tremendous demand that exists in the e-commerce space,” he said. “This is something that sustains demand.”
In addition, “there’s a significant amount of pent up, large freighter replacement demand,” Hulst said. “Over half of the fleet is at least 20 years old, and while there’s a significant amount of 777 and 747-8 freighters … that are new and efficient and capable, there’s a tremendous amount – almost 400 or over 350 aircraft – that do need replacement.”
That also is “a very stable base of demand as we look at the next 10 and 20 years,” he said.
Demand has been strong for dedicated freighters
Very little cargo is carried in the bellies of jets operated by passenger airlines, Hulst said.
“Ninety percent of air cargo is flown by carriers that either only operated dedicated freighters or at least have dedicated freighters in their fleet as part of their total fleet,” he said.
That means cargo carriers will need new freighters so that they’ll have enough planes to replace those nearing the ends of their lifespans, and to accommodate for future growth, Hulst said.
Boeing’s projections break down like this:
- The global air cargo fleet will grow to 3,600 jets by 2041, even as more than 1,300 older planes drop out of service
- That will require some 2,800 additional freighters.
- Boeing projects that roughly a third of them will be new-built widebody jets (767 and 777 size).
- The rest will be conversions, including all of the 1,300 narrowbody freighters that Boeing projcts will be added to the fleet.
Last year, Boeing delivered 35 dedicated cargo jets; 19 767-300Fs and 16 777Fs. Going forward, the company sees demand for 515 new 777-size freighters and 425 767-size cargo jets.
To meet that projected demand, Boeing would have to deliver 47 cargo jets a year. Its order book suggests that may be feasible, in the short run: The company booked a record 204 freighter orders, including 95 737-800 freighter conversions.
Boeing is doing 737 conversions at sites around the world, in China, Costa Rica, Canada and the United Kingdom.
This year’s sales are running close to last year’s, Hulst said. That includes orders for more than 50 777-8Fs, which Boeing began to offer in January. Those planes are scheduled for delivery starting in 2027.
Current 747-8Fs won’t be replaced soon
Boeing last year also sold the last four new built 747-8Fs, which are going to Atlas Air.
Hulst says those planes, with their unique size and nose-door loading feature will fly “well into the middle of this century.”
But for now, Boeing projects more carriers will be interested in the new 777-8F, which has payload capacity that’s “slightly higher than 747-400 payload capacity that existed in freighters, you know, for the last almost 30 years,” he said. |
Boeing expects cargo carriers to “focus on efficiency and capability and the range and capability of the 777 and 777-8 freighters,” Hulst said, predicting they will “provide the standard for what the market needs going forward.”
He said Boeing will continue to support the 747 cargo jets in service that will serve “the unique parts of the market, outsized and large.”
And when those are closer to retirement, “then we’ll see what happens beyond that,” Hulst said. “But it’s a long time away.”
Reality is boom followed by bust. Cargo is a cyclical business.
The cargo volumes is likely to maintain. But will the price also maintain? Boeing seems to think so, although many analysts cautioned about the price maintaining at such high levels. (but it seems like the high inflation is helping to masked all these).
Boeing also seems confident that they will maintain the 80%-90% market dominance in Freighter despite the large amount of A330ceo & A321 P2F happening alongside the B777 P2F. Boeing does seems complacent and i do think airbus might get a big chunk out of the freighter market. My guess, we may be looking at a 50-50 situation 20yrs down the road.
Its higher than ‘just’ 80-90% for Boeing. The Airbus new builds are negligible and the conversions still low numbers.
The traditional 737 P2F numbers are ahead of the A321 recent entrant
‘Airbus and Elbe Flugzeugwerke (EFW). A converted A321 offers up to 27 tonnes of payload, with up to 14 full container positions on the main deck, plus what Airbus called the “unique A320 family container” with up to ten container positions and pallet loading capability on the lower deck.
According to data from ch-aviation, eight units have been converted thus far”
8 units converted at EFW from 2015 to 2022. There maybe other small conversions line too, but this is the ‘official’ one
There are 15 737 P2F conversion lines running
https://simpleflying.com/vietnam-airlines-acquire-airbus-a321-freighter-conversions/
FedEx has parked aircraft and had a huge loss the last quarter (750 million?)
So yes, Air Cargo is booming and will account for 80% of new build aircraft gong forward. Just remember, you read it here first!
Oh, and the Pax carriers are not going to use one square foot of the excess space to carry cargo.
What huge loss , cash was fine. Net income for the quarter was $800-900 mill
your claims at are complete odds from this years results
https://investors.fedex.com/financial-information/quarterly-results/default.aspx
Bloomberg: FedEx Corp. lost $11 billion in market value, wiping out two years of stock gains, after withdrawing its earnings forecast
CNN: FedEx’s earnings are expected to plunge more than 40%.
Lots of companies have lost big from the sharemarket downturn.
Meta is down 24%. It’s the end of the asset price bubble
Not the same as actually losing money on their operations and it’s still a profitable company
FedEx financial results:
“A drop in volumes and economic volatility “adversely impacted” FedEx’s results for the fiscal first quarter ended August 31, prompting the transport company to implement cost reduction initiatives.
“The company expects business conditions to weaken further in the second quarter.
“While revenue figures were up on last year, the company said they fell below forecasts and it was this shortfall that meant the company needed to take action.
“FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500m relative to company forecasts.
“FedEx Ground revenue was approximately $300m below company forecasts.”
https://www.aircargonews.net/airlines/freighter-operator/fedex-scales-back-operations-following-disappointing-q1-2022-results/
It sounds as we won’t see 777XF in service until early 2030s and we’ll never see 787F.
I doubt that we’ll ever see a 777X in any form — passenger or cargo.
Why so pessimistic about the 787F?
It doesn’t qualify as “clean sheet”, and can be realized with relatively little hassle.
It is not that easy to design and certify a composite 787F, the 777XF has probably been designed for an F version from the beginning and looks like a 747F replacement. Airbus might have a marginally easier job with their composite A350F as the panel on aluframe design is easier to convert but is no walk in the park.
On the other hand: BA recently said that the 787 had been designed from the outset with an F-version in mind…
BA *talked* about 31/mth production rate since the start of the year;
BA *talked* about clearing its 737 MAX inventory in *1-1/2 year*.
https://leehamnews.com/2020/01/29/boeing-max-production-will-restart-build-slowly/
BA is good at talking …
Freighters have an easier time in certification than passenger jest. Its basically only a structural consideration and usual cargo only mods
Except for the 777XF…which has a MAJOR certification headache…
Sure 787F easy-peasy guy.
The 777-9 is stuck near the final hurdles for cert as thats a major change from the older model, new cockpits, new wings, new tail section.
Once that clears it will be plain sailing for an XF derivative , but likely same gross weight.
Hows that A350F going and the XLR
I’m not aware BA has received TIA for its 777X.
Final hurdle??? Thanks for spinning. 🤣 BA’s back office should take some cut back and redirect resources (i.e. $$$) to more productive use!!!
-> “Boeing continues to work through design issues of [777X] …
@ Pedro
At least Duke did use the word “stuck” — which is a very operative word in the current situation.
@Bryce
Based on recent certification “slips” of the MAX 7 and MAX 10 (FAA letter of Sept etc), do you think we have seen the last delay of 777X?? How likely there’s more to come?
Claes:
Airbus is building a composite A350F.
Until recently it was boldly stated that the 787 would be a hard one to convert but then it came out (?) that it had been designed for an F mod all along (which makes sense as the people in charge of BCA at the time were fully aware of the history of an F model.)
The question is what weird stuff is ricocheting in Calhoun’s mind that he spends 450 million on an autonomous project but is trying to kill a common sense one?
@TW: “it was boldly stated that the 787 would be a hard one to convert but then it came out (?) that it had been designed for an F”
Ummm…LNA was the first to write this bit of information….
Hamilton
The future will show how easy it will be to build and certify the 787F. I am sure it can be done, but how long it will take and to what cost is unknown to me. Cutting a big hole and reinforce for a cargo door into the one piece carbon barrel section might result in designing a custom special fiber wound cargo door fuselage section in Wichita. The A350F has a simpler task of replacing one 90degree fuselage panel section with one with a cargo door hole and reinforcement. Still both face the same certification work.
Cutting a very large hole (cargo door) in 787 filament winding fuselage is certainly not as simple as designing a special cargo door panel in 350 composite panel fuselage.
With filament winding, you need to reinforce the complete fuselage….
The 787 composite barrels ( skins and stringers) are reinforced by closely spaced fuselage ring frames …. exactly as are Airbus 4 composite panels ( including stringers) when they are stitched into a barrel shape.
All thats different between the manufacturers is the *skin* fabrication is panels or barrels. The internal reinforcing is still necessary for the semi-monocoque construction.
Flyng Frog…….
Respectfully, the creation of the skin with the opening for a door can be wound on the same tool currently used on the passenger airplane. You program the machine to omit tape where the door opening is needed and add backup structure layups to create the doorframe. Its not hard at all.
The risk of letting Boeing’s VP of commercial marketing tells his story, without questions asked, is that you get what you can expect. In terms of completeness, objectivity and balance.
“Ninety percent of air cargo is flown by carriers that either only operated dedicated freighters or at least have dedicated freighters in their fleet as part of their total fleet,” he said.
Read very carefully. Carriers that have a few cargo aircraft, but do the vast majority of their cargo lower deck are in this 90%.. In reality lower deck cargo has been booming at the cost of dedicated cargo aircraft.
https://theloadstar.com/air-cargo-capacity-is-back-as-bellies-return-but-freighter-use-remains-high/
“As a result, Hulst said, cargo carriers grew their fleets by roughly 15%, adding nearly 300 freighters to their fleets, with “the vast majority, all but maybe 30 of these,” being Boeing jets, either new-built freighters or conversions. More growth is coming, he said.”
History based perception management, while everything changed.
Boeings 767F & 772F will be forbidden in a few yrs. The 777-9 based 777XF certification is a challenge to say the least. With a a 109t optimized A350Fs being offered (& selling) to the 50 A350 customers, A321F, A330 conversions selling like hotcakes, what could possibly go wrong, looking back?
Yeap. Boeing does seems complacent about maintaining their 80%-90% market dominance in the Freighter market. I do think airbus might get a big chunk out of the freighter market in the coming years and we may be looking at a 50-50 situation not far in the future.
Hey, thats all part of the decline into oblivion isnt it? First no clean sheet, now complacency.
Complete fact free claims
almost all new deliveries are Boeings. Only a small number of A321 conversion lines compared those pumping out 737
Almost all PRESENT deliveries are Boeings.
But that’s in the process of changing…
Focus on rear-view mirror and nothing else. Full steam ahead TitanicBoeing 😂
Where are the conversion lines and their capacity for the A321 P2F ( the only one worth doing) and the A330 P2F ?
projects projects projects …. as we know in aviation, ‘projects are just a step lower than dreams’
The qualified production staff to take on these new ‘projects’ must be as rare as hens teeth.
Squawk
Dukeofurl wrote
November 9, 2022
Where are the conversion lines and their capacity for the A321 P2F ( the only one worth doing) and the A330 P2F ?
Duke…..
All you need to convert passenger planes to freighters are a sufficient number of standard jacks, jackpads and wooden fuselage cradles to support the airplane while you chop it up. Add scaffolding and overhead crane or even mobile lift and you have everything not found in well equipped toolboxes to make it happen. Remember all the NGs that were cut up in Victorville to replace pickle fittings. Flat floor, overhead lift, jacks and cradles and the job got under way…… Try not to make facilities an issue where it coearly isnt……
“Going forward, the company sees demand for 515 new 777-size freighters and 425 767-size cargo jets.
To meet that projected demand, Boeing would have to deliver 47 cargo jets a year.”
Hmmm. If true, then Boeing is counting on 100 % market share. Today they are close to that, but the A350F is coming, and we might see an A321F as well. If Boeing is able to maintain a market share of 67 % over the next 20 years, that would be 31 cargo jets a year, not 47.
Well, they might if they continue to give away B777F at steep discounts for widebodies delays on the B777-9 and B787. It effectively stops airlines from purchasing the A350F. Emirates recent order for more B777F are just tell tale signs of whats going on. On the other hand, the A350F lesser commonality with the smaller A350-900 passenger variant might prove to be a big deterrent for many airlines. There are only a handful of airlines taking up the A350-1000. CX, QF and BA are potential candidates for the A350F as the extra range may prove useful for them.
On the lower end, Boeing seems dead set on pressing for a waiver on the B767F. But in the meantime, they are churning out as many B767F as they can filling up the market upfront.
The demand is now in the Cargo market..
Currently , Airbus isn’t a part of that !!
Leaving Boeing to completely dominate the segment ..
Such as the cyclical demands of Cargo..
Boom or bust…
No doubt AB missing out on that lucrative market..
You want a factory fresh freighter;
Line up ..
Only one option …
Why would they offer huge discounts.. Boeing can pretty much name the price..
Evidence by the stong sales across the board…
“Currently , Airbus isn’t a part of that !!”
Looks like you’re overlooking the various (hugely successful) AB P2F projects.
Airbus owns 45% of EFW.
Name them and the numbers converted….oh “projects”
How many existing 737 ‘conversion lines’ , thats right 15
The premier site at ERW has only done 15 since 2015 , maybe they are also busy doing A330 conversions ?….. thats not too busy either
https://aircraft.airbus.com/en/aircraft/freighters/a330p2f#collaboration
Im sure it could pick up eventually as the A321 fleet age out
@DoU: EFW has a backlog of more than 100 A330 and A321 P2F orders each.
That’s good . But where are all the other conversion lines, it seems to be by EFW affiliates in China and San Antonia
But the main site in Dresden isn’t running so well
https://www.cargoforwarder.eu/2022/10/09/aircraft-converter-group-hit-by-supply-shortages/
“The sad story is that they can only be processed at a snail’s pace. Why? Because there is a shortage of components, and suppliers are not keeping up with contractually promised deliveries of aircraft parts. There is little hope that this will change for the better soon.”
Sad story indeed . Goodbye 25 perbyear conversions
@DoU
EFW has conversion lines in Dresden, Singapore and Mobile, AL, and is now opening a further two — in Turkey and China.
https://cargofacts.com/allposts/conversions/efw-to-open-second-a330p2f-conversion-line-in-china/
New sites you are talking about
EFW main site is Dresden
Theres a affiliate in San Antonio Tx ‘opening up’, they also do heavy maintenance for United there. Just as well experienced staff arent a problem…..hehehehe
This is only days old about the new *projects*….hehehehe
https://www.stengg.com/en/newsroom/news-releases/efw-and-ameco-to-collaborate-on-a330p2f-conversions/
Confusion marketing in play . Earlier this year it was Dresden, Mobile and Shanghai…opening up by the end of year !!
https://www.aircargonews.net/services/freighter-conversions-mro/cdb-aviation-orders-a330-p2fs-and-secures-a330-300-p2f-leases/
More recently its also Turkey and Texas .
let us know about the start dates for sites outside Dresden
-> By the middle of 2022 … aircraft converted simultaneously at three locations – in Dresden, Shanghai, and Mobile.
Reading comprehension is not one poster’s strong suit.
-> China’s Ameco Beijing and German conversion specialist Elbe Flugzeugwerke (EFW) are partnering on an Airbus A330 passenger-to-freighter (P2F) program. Announced at Zhuhai Airshow in China on Nov. 8, the pact will see an A330 conversion line added at Ameco’s facility in Chengu, China.
We have poster who doesn’t know how to look up for what happened recently?? Wow, wow. 🙄
60 conversion slots from EFW.
Suggest you re-read my comment..
It’s not rocket science Bryce.
New factory fresh builds..you got it !!
How hard is that to comprehend.
Knew you fall back on conversions..
Like what airframe isn’t being converted to freighters nowadays..
Narrow
..and widebody !!!
You didn’t use the qualifier “factory fresh builds” when you said that “Currently , Airbus isn’t a part of that !!”
Suggest you learn how to accurately express yourself 😉
(as well as learning how to place a nested reply)
A bit touchy today Bryce.
Not surprising..
When you and your “cronies” have to take a break from your proverbial Boeing bashing for a day..
Pity….come tomorrow everything will be ok..and you can pick up where you left off.
In the meantime;. My point stands…
You want a FACTORY FRESH NEW BUILT FREIGHTER..
Not 5 years from now..
Only one manufacturer can currently supply that.!!!
Carry on!!!
“A bit touchy today Bryce.”
Just holding up a mirror 😉
Of course, from 2025, where will carriers go for an ICAO-compliant freighter? It looks like it won’t be BA… 😉
Until that time I bet ..it justs breaks your heart for every new 777f order that erodes into every potential a350f order
BTW.. Bryce…
That’ entry into service is late ‘2025 , early ’26 at the absolute earliest..!!
Plenty of time to add more orders for the current 777f.
Which is exactly what will happen.
Ohh yeah ,since you love talking about conversions.your mighty 350f will also have to go up against 777-300 ER’ converted freighters slated to come into service next year ,
with several major carriers already signed up for that variant..!!..
Food for thought !!
Why would the relative success of the 777 freighter “break my heart”?
And isn’t AB’s heart more relevant? I don’t think that heart is broken: after all, AB P2Fs are selling like hot cakes, there’s no 787F announcement yet, and the 777XF is based on an uncertified (and, perhaps, uncertifiable) frame. AB’s cargo ambitions have never looked better 😏
Careful with your wording, TC. Borderline.
Hamilton
Yes Scott .Sorry
Deliveries for October:
– BA: 35 (16 fewer than Sep)
– AB: 60 (5 more than Sep)
https://www.aerotime.aero/articles/32608-airbus-boeing-order-deliveries-october-2022
This is off topic.
Not sure why you carry on like this is your private platform. Try being considerate of other readers for a change.
Is it off-topic?
Deliveries determine revenue, and revenue/earnings determines the ability of an OEM to finance new projects — such as a 787F or 777XF, for example.
Maybe you should put a little more effort into connecting the dots.
These Market Outlooks are essentially just curve-fitting past trends. Personally, I don’t see it happening because past trends do not reflect a low-carbon world, which is where we know we are heading.
US oil production increased in 2010-2012 due to the advent of fracking technology. US production went from roughly 5 million barrels per day to well over 13 barrels per day in 2021. A change of this magnitude was unprecedented and kept oil prices low worldwide and allowed economies to recover after the 2008 financial crisis. Boeing’s market analysis reflects this.
What we know now though is while this was great for consumers, it was really bad for those who invested in the companies. Tight oil fields need constant rework to keep producing with production falling off dramatically by year 3. Loans were made based upon the most optimistic projections from the best oil fields. Marginal fields never paid back investors. So don’t expect this trend of high production and low cost to continue.
Furthermore, the past decade has had historically low interest rates thus lowering the cost of ownership for those leasing airplanes.
Going forward, we don’t expect to see low fuel costs to continue due to both reduced oil production and demands to reduce CO2 emissions. We also should not see the really cheap financing available that can hide a lot of sins.
In a low carbon world where Sustainable Aviation Fuels are mandated, I don’t see how one justifies air freight of cut flowers from Kenya to Amsterdam or from Colombia to the United States.
Furthermore, US business is taking a close look at supply chains where Xi in China might be doing real harm to his economy by creating uncertainty in the reliability of Chinese manufacturing.
Jeff:
Some good background. The reality is that we read all the time about sound business decisions. But a hard look after the Spin is, there are companies that get in first and then the middle and then the end. The ones at the end die, they talk themselves into the same mantra, well its going to keep on that curve up.
Add in an ever iffy world economy for the two main drivers (China and Ukraine) and the iffy part is huge. No one knows where its going.
In a weird world though, something like shipping flowers may well flourish. If you got the money someone fills the void.
Say the EU declares Hydrogen Only aircraft. Airbus falls off the map as someone will make non H aircraft. And they will just fly stuff to the periphery of Europe and truck it in (maybe using Hydrogen Trucks?)
And if Boeing can’t make 767/777F, then they just make pax hulls more attractive to convert down the road.
But all the people jumping into Pax to F conversions there will be loosers just like Fracking saw.
I agree more or less but COAL is the fossil fuel that needs most to be reduced. Heck, you can reduce CO2 emissions by fully half by burning oil in a dual cycle power plant rather than coal in a steam plant. Of course gas is the fuel of choice to replace coal but the point about oil stands.
The whole turmoil about CO2 from aviation is not such a big deal as it is 2% of global CO2 while coal remains about 50% with a LOT of conventional pollutants mixed in.
Keep making aircraft more efficient and eliminate the delux classes that use a lot of floorspace as much as possible. Hydrogen and more so electric aircraft are of tiny significance. If one makes plant based or other “green’ synthetic fuels it makes no difference where they are used in terms of CO2 reduction. These products (especially plant based fuels) must be considered carefully in terms of their environmental impacts beyond CO2. They are far from benign.
-> ICAO reports GHG emissions from international aviation could *increase by a factor of two to four* times 2015 levels by 2050.
The impact of aviation to global warming is greater than just the CO2 emissions. Aviation also releases Nitrogen Oxides (NOx) which is also a greenhouse gas, which in the short term is equally as potent as CO2, however in the long term will somewhat offset by chemical reaction with atmospheric methane, another greenhouse gas.
Contrail formation could be 2x the effect on global temperature as the CO2 is released. There is substantial uncertainty here, but it is safe to say that contrails and their ability to trap radiation from escaping back to space are equal to that of the CO2 emitted. There is beginning to be substantial research here. Of note, the less soot and particulates that are released in the burning of fuel will reduce contrail formation as there are fewer particles for nucleation of water vapor. This could be a major benefit of Sustainable Aviation Fuels as there would be less impurities.
Here is a summary from a paper in 2020:
“CO2-warming-equivalent emissions based on global warming potentials (GWP* method) indicate that aviation emissions are currently warming the climate at approximately three times the rate of that associated with aviation CO2 emissions alone. CO2 and NOx aviation emissions and cloud effects remain a continued focus of anthropogenic climate change research and policy discussions.”
–D.S. Lee, Atmospheric Environment, https://doi.org/10.1016/j.atmosenv.2020.117834
With the international global community taking action on climate change, I don’t see a scenario where they will accept one industry to continue growing its CO2 footprint while other sectors would be struggling reducing their footprint. For passenger travel, especially international travel, there is no alternative to aviation. For the airfreight market though that is a different story all together as much of what is currently air freight might be offloaded to less carbon-intensive modes, whether that is electric vehicle, rail or ship.
Freight sent by air tends to be in a hurry…
Umm Bryce… .all converted freighters are selling like “Hotcakes”…now . nothing unusual there..
Obviously if AB did their homework back when they could have had an actual factory freighter that a customer would actually purchase… you’d actually have some merit and add something to the conversation instead of your constant p2f jabbering.
Untill ,that happens , keep dreaming .., and hope they don’t repeat that disaster in the future..
The past is always less important than the future 😏
Everyone knows past performance =/= future result. Except those Boeing guys. Sad. They are still so terribly afraid of facing the reality!!
“The past is always less important than the future ”
Well that is a take but “Those who forget their history are doomed to repeat it”
This has all happened many times in the past and like the Prime Mortgage debacle that was presaged by the Savings and loans debacle that was presaged by the Great Depression will be repeated.
Or the Great Tulip bust from your area.
What lessons has BA learned? @TW can you list a couple to enlighten us??
I think Boeing will do everything possible to obtain a waiver to continue delivering the 767F and 777F for as long as possible alongside the 777-XF. They don’t seem to have the appetite to launch the 787F because they want from Calhoun’s comments to focus on cash flow after 3+ years of slump
A waiver won’t be of any help outside the US…
Thanks for the clarification though, it looks like the only customers for the 767F at this point are DHL, FedEx and UPS. They would only lose the german DHL visibly…
Keep in mind that the phase out is a US only mandate.
Unless or until others adapt it, it makes no difference.
And then unless you put the kabosh on conversions, you still accomplish nothing.
Trans……
With respect to conversions being frowned uponp, perhaps not. Most fly less than 1/2 the hours a passenger airplane does AND Fedex and UPS dont fly wkends
@ Checklist
DHL, FedEx and UPS fly cargo aircraft all over the world.
They’ll be very limited in their operations if their fleets can’t leave the US.
Also it seems the market is too small to justify launching an illusory NMA-F or an illusory 767 MAX-ed-F (GEnX)
Checklist:
Boeing has publicly ruled out a 767NEO. Someone at Boeing will have run the numbers and no idea of what the results are.
But a new aircraft based on an F model is doomed. The 747-8F sold well but it did not have the Pax base to sustain it (and ironically it would be compliant!)
LNA analyzed a “767 MAX” years ago. Doesn’t work.
The 787F won’t be cheap enough to entice those couriers.
@Pedro
I don’t understand your point. What couriers you talking about please ?
I thing Boeing don’t want to have a cheaper option to the 777XF until it’s in production.
Also the A350XF will crowd the top end of the market
“I thing Boeing don’t want to have a cheaper option to the 777XF until it’s in production.”
They’ll burn themselves with that approach if/when the plug gets pulled on the 777X.
At least the passenger-version A350 has been certified and flying for years. The passenger-version 777X is stuck in a TIA-less certification limbo, and it has a fix-it price tag that may be a “bridge too far” for BA.
A 787F would obviously be in a different class compared to the 118T 777XF. We are looking at about 80-90 tonnes payload for a potential 787F, placing it in a somewhat unique position. Could be a great offering to complement, and take over from the 102T 777F beyond 2027-28. There is absolutely no problem developing both the 777XF and 787F at the same time.
Even if some sales were lost to the cheaper 787F it is definitely better than losing sales to a potential a330neof if it is ever built
@ ben
“There is absolutely no problem developing both the 777XF and 787F at the same time.”
There is a problem, actually — funding.
Who said it wont be cheap enough? Are you just assuming? Same way people assume the a330-900 is cheaper than the 787-9 yet its not?
Well, that depends on the concept of “cheap”, doesn’t it?
BA can sell its aircraft as cheaply as it wants — but low-margin sales are killing the company. BCA still couldn’t make a profit in Q3, despite 112 aircraft deliveries. Why do you think that is? Answer: sub-optimal margins.
Same with its military projects: lower the price to get the contract, then bleed money when trying to deliver.
Those guys are looking for a 767F replacement, nothing more IMO, bear that in mind.
Checklist…..
The size of the market has less to do with the freighter first concept than speed to market. You dont even need to sell a ton of them. An NMAF, would be far easier to cert since all the people stuff gets left out of the cert plan. No escape doors, passenger oxygen, windows, seat tracks environmental ducting, stow bins and mounts, cabin sidewalls and all that kinf of stuff. Imagine a 2 step process where the freighter certs first, gets into production as a product far simpler than the passenger airplanes. You have revenue showing up sooner, the simpler airplane gos down the learning curve and the passenger tooling moves to the right slowing peak program financing needs. IF,big if you do this correctly, the revenue from the first freighters really helps you move forward ……..
Two items that I don’t see any mention of:
1) what does sustainability mean for future growth ?
2) how will the decoupling with China impact the growth rate?
Who’s “decoupling with China”?
And to what extent?
The West.
Just like Russia.
Actually, US imports from China are increasing:
https://www.statista.com/statistics/277428/value-of-us-imports-from-china/#:~:text=In%20July%202022%2C%20the%20value%20of%20the%20U.S.,2020%20to%20July%202022%20%28in%20billion%20U.S.%20dollars%29
Similar trend for the EU.
As regards Russia: 176 countries are still doing “business as usual” with it, and several countries are actually increasing their trade with it — such as China, India and Saudi Arabia.
Less trade, perpetuates cost inflation. From free trade to the eternal hell of vicious inflation. Welcome to the reality these policymakers painted themselves into.
I see an article titled: “How Boeing can Launch a New Airplane Before the Decade of 2030”.
Without reading the article (behind paywall), I would say the tenor of the headline misses the point: Boeing (executive management) does not want to launch a new plane and is NOT interested in a way to make it happen!! The only way it would happen is a complete replacement of executive management.
Apart from such considerations, BA simply doesn’t have the funding for a clean sheet program.
@John: I don’t disagree, but the point of this article was to show that Boeing can design an airplane today getting to 20% without a step change engine. Dealing with management philosophy is another topic.
@Scott
20% over the current NB offerings…no.
I’m thinking it would be possible to get better than 20% savings in the 767 market, with what is currently out there, no?
This is more an engineering question, but with those jets designed in the late 70’s and launched in the 80’s, they should be able to get those gains in that niche.
Business case is another matter. But you would think…
@Frank: I was talking about 767-size airplane, ie NMA-F (or NBA-F, if you prefer), eg.
@Scott
That’s astounding. I’m not doubting your knowledge, but holy smokes. Kudo’s to Boeing then – for designing and updating an aircraft like the 767, that is still that efficient, all these years later.
Frank….
From what I see behind the curtain, a 20% narowbody gain is there, it just needs a customer to step up and buy it…….
War creates chaos, chaos creates airfreight. Good times ahead for cargo aircraft owners.
Story says there could be a way to get the required performance gains that Boeing is looking for.
Insiders may know more than your assumptions.
Im sceptical as it could require a lot more money to develop
Leeham was told in Sept. certification of MAX 7 may happen as soon as Oct.
Couch couch!!
Don’t you learn a lesson or two from BA?? What could possibly go wrong …
So, in view of the success of the A330-300 P2F, does AB have any plans for an A330 neo F?
Similar question for an A321 neo F.
This would give the company 2-3 ICAO-compliant freighters (in addition to the A350 F).
The A330ceo-F was a commercial flop. What more would the A330neo-F bring?
The A330ceo-F was based on the A330-200.
The A330 P2F is based on the A330-300. It also has a nifty automated loading track. An A330neo-F could capitalize on these lessons learned.
Next question.
How one can explain the A330P2F are flying off the shelf like hot cakes???
heheheh.
The actual production rate is ‘snails pace’ as starting new conversion line or increasing the rate is ‘challenging’ in these times
Who knew ?
From the same guy who didn’t know how many conversion lines there are … 😁
proposed lines.
One story is less that a week old about the ‘proposals’
Wheres your facts , which lines are converting how many planes *right now*
Give us the beef
Well if you think it’s going to change anything, let’s wait for Airbus to launch it to see the result.
They should have launched a 737 replacement 10 years ago. As you told us, they distributed $62 billion to shareholders over a decade. At the time Boeing was brewing money. Instead, the consequences of poor management by leaders are the consequences, among other things, of 3 years of slump at Boeing (2019-2022).
They lost ~45 billion USD during the 737MAX grounding. Consequence of their negligence and greed. Now
while they have to recover some cash flow for 3-4 years. The only window of opportunity, the launch of the replacement for the 737 can obviously only take place around 2028 for an EIS in 2035-2036 with the promise of -25% fuel consumption during this period. They won’t launch anything under Calhoun’s presidency. Changing CEO will not change much that is why
launching an aircraft in 2023-2024 simply doesn’t make sense
Breaking !!!!
Boeing just received an order for the 7778f. from Silkway West Airlines.
Not bad for an aircraft some claim will never be built
. Nice boost for the program !!!!
Now, now — be consistent (in view of your past lectures to others) 😉
This isn’t a new order:
“The order was previously listed as unidentified on Boeing’s Orders & Deliveries website.”
https://www.prnewswire.com/news-releases/boeing-silk-way-west-airlines-announce-order-for-777-8-freighters-301674379.html
Oops. 😬
Announced …order ..shame on me..still great news for the program..
Still claiming the 777x won’t be built…????
Hmmm..ok..
Alot of legacy carriers beg to differ..!!
“A lot of legacy carriers beg to differ..!!”
Just because those legacy carriers haven’t canceled — YET — doesn’t mean that they “beg to differ”.
Emirates has already trimmed its 777X order substantially, n’est-ce pas?
How many orders does the BOOM supersonic concept have?
United has an “order” for 50 of them…but does that imply that the plane will be built? 😉
To paraphrase Richard III:
“A TIA! A TIA! My Kingdom for a TIA!”
What if BA has successfully cleared its 737 MAX inventory in 1-1/2 year as Calhoun said?? What if both the MAX 7 and MAX 10 are certified by year end?? What if the 777X has no design issues to work through, which caused the repeated EIS slips??
What if BA was smart enough to at least break even from those low ball defense contracts? BTW how many big defense OEM lost money in recent years? Is BA the sore thumb that stands out?
What if the current CEOs at BA/BCA are capable to execute what they said? Or at least honest enough to tell us what reality is and not just kick the can down the road repeatedly?
Too many here have missed BA’s self-harm caused by the C-suite’s hubris and mis-placed maximizing financial return to shareholders at all costs.
The losses in recent years are not totally the result of external events out of BA’s control as many here want to believe!
Both LNA and the Seattle Times had write-ups in 2017. Time rewind.
I didn’t know that, it’s a good news for the 777X program, who goes to the 400 orders (if my memory is correct?)
Congrats Boeing.
Brice
“Emirates has already trimmed its 777X order substantially, n’est-ce pas?”
—-
“substantially” is an overkill word.
EK will also remain for a long time, certainly the customer who will order 777-X because there is not more than this choice above the -400 seaters.
Also let’s remember the (substancial?) x 70 A350 cancelation by Emirates in 2014 before reordering in 2019.
This one always seems to be in motion (orders, pending orders, cancellations, reorders and switch orders) IMHO…
Thks
Your fighting a losing battle here checklist…say something positive about Boeing,be prepared for verbal assault and lengthy rebuttal!!
Learned that a long time ago..
Point well taken though.!!
Well TC/Checklist – let’s take a look at some numbers, before we pass judgement – shall we?
———————————————————————–
This is the orderbook for the 777 – all variants:
https://en.wikipedia.org/wiki/Boeing_777#Orders_and_deliveries
777-300ER 6
777F 86
777X 353
Total 445
———————————————————–
This matches up nicely with what Boeing has on their website:
https://www.boeing.com/commercial/#/orders-deliveries
Boeing also has to report, under ASC 606 – orders not likely to be taken. In this case they have to remove 127 units, leaving a backlog of 318.
—————————————————————-
China Southern, according to Planespotters, has one -300ER (N874BA) on order and in production:
https://www.planespotters.net/production-list/Boeing/777/777-300ER?p=16
———————————————————————-
So now, we gotta read a little bit of the tea leaves – and please, feel free to jump in give us your opinion;
Here’s the question you need to ask;
Where are those 127 ASC 606’s? Are they in the 5 yet to be produced -300ER’s? Are they in the 86 – 777F’s? Or are they in the 777X program?
Well, Boeing is trumpeting how well freighters and cargo are doing, so I’m guessing that they aren’t there.
If that’s the case, then there are a total of 226 777X’s in the order book. 231 if those 5 -300ER’s are not taken.
—————————————————————-
So who is not taking theirs:
November 17, 2013 Lufthansa[a] 27
November 17, 2013 Etihad Airways 25
December 20, 2013 Cathay Pacific 21
July 8, 2014 Emirates 115
July 16, 2014 Qatar Airways 74
July 31, 2014 All Nippon Airways 20
June 4, 2015 Unidentified customer(s) 10
June 19, 2017 Singapore Airlines 31
March 22, 2019 British Airways 18
(reading tea leaves again, but isn’t funny that the ASC 606 number is 127 and Lufthansa has 27 on order? Could be a coincidence.)
From BA’s recent 10Q:
-> China is a significant market for the 787 program, and if the program is unable to obtain additional orders from China in future quarters, we may be required to further adjust production rate assumptions. If we are required to further reduce the accounting quantity and/or production rates, experience further delivery delays or experience other factors that result in lower margins, the program could record additional losses and higher abnormal production costs in future periods.
From the Seattle Times:
-> No profits on the 787
The 787 Dreamliner charges included a $3.5 billion write-off to *cover what Boeing will have to pay as compensation to airlines for the delivery delays that it says extend further than previously anticipated*.
In addition, Boeing is absorbing *another $2 billion in abnormal 787 manufacturing costs resulting from the low production rate and the rework on previously completed airplanes*.
@ Pedro
What a surprise! 😏
Well, the Emirates 777X order has shrunk by 16% (so far).
If you got a 16% pay cut in the morning, would you find that “substantial”?
And the 350 order shrunk by 28% so far !!!!!!
Your point being.!!!🙄
Countering your point (above) that “a lot of legacy carriers beg to differ”.
Try to keep up with your own posts 😏
Don’t let those guys pull the wool over your eyes
-> ” …. give away B777F at steep discounts for widebodies delays on the B777-9 and B787″
Perhaps you should tell Pedro to do the same..since you two seemed to be joined at the hip .
Guess a 28% reduction in pay suits you better than a 16% one..
You wanna keep talking Boeing smack all the time,..go ahead..just remember what goes around comes around.
I’m certainly not backing down from you.!!.
This message appears to be addressed to the author of the article — strange to accuse Scott of writing “Boeing smack”…
@Pedro
” …. give away B777F at steep discounts for widebodies delays on the B777-9 and B787″.
—-
No doubt they can,
The 777-200/-ER/-300 program, then -200LR/-300ER/-F program were Boeing’s cash cows, which brought a lot of money to the table. And this aircraft, unfortunately, continues to be an obstacle for the A350-1000 and A350-F until 2027 and ans maybe beyond, whith the upcoming 777-XF…
Sigh!
Cash cow? At current production rate?? 🤣
Not aware many, other than a couple bottom feeders, picked the old 777 over the A350. When was the last order of those old 777 from EK, SQ and CX??
Bye.
Next generation freighter sales..
7778F / A350F
(55) vs. (31)
Maybe AB should find some bottom feeders of their own.!!😂😂
Sure Jane.
The 778F *is* such a cash cow? Or the whole B777X looks more and more like a bottomless money pit ATM?? 🤣
..Whith the 777-X and -XF…
Cough cough!!
Actual backlog for the 777X is more like less than 300. 🤣
See above…
@Pedro
Maybe or maybe not… With proof it’s even better isn’t it? Specifically, we can also see the Iran Air order disappearing in view of the political conflicts in the region. (nothing is firm) We have also seen A350s at United Airlines that have not been delivered for 12 years (2010).
If you laugh, I share your laugh…👍
Checklist.. Believe me ..For Ab to remove a bogus order…is as likely as them restarting the 330f production line .
Which is slim to none!!!
You see ,they don’t have abide by the same accounting standards as Boeing does .for that reason ,Bogus orders can linger for years.
Good example it took the collapse of the a380 program to finally remove all those bogus orders lingering , which never had a chance of being delivered…
They still had defunct Kingfisher Airlines orders still on the books 5 years after the collapse of the carrier..😂😂..
So obviously,to wipe 52 AB wide-bodies off the books from the Iran Air order ain’t happening any time soon.!!
The “United” orders for A350 were made by Continental before its merger with United.
Epsilon aviation newsletter says that Uniteds 100 plus widebody order currently in play may go 2 ways to both United and Airbus- with the A350-900 getting the very long haul component and the 787-10 most of the rest.
United has fairly new B777-300ER in service so that side is OK
But who knows as Boeing will fight hard to have an exclusive- well the sales people will, dont know if the board will Ok a sweetheart deal
@Pedro
This source clearly stated otherwise about your allegations. If you suggest another source to support yours, then please send them to me.
Thanks
https://en.m.wikipedia.org/wiki/Boeing_777X#:~:text=The%20Boeing%20777X%20is%20the,technologies%20from%20the%20Boeing%20787.
Sigh. These posters are such a joke.
Last reply:
https://leehamnews.com/2020/08/05/hotr-boeing-warns-of-forward-losses-on-787-777x-programs/
https://airinsight.com/boeing-takes-3-5-billion-787-charge-and-offers-777x-freighter/
-> Abnormal costs for the Dreamliner increased by $285 million in Q4 and total approximately $2.0 billion, with most being incurred by the end of 2023 [i.e. in 2022 & 2023]
@Franc
Good work👏
You are free to think that there is a cancellation of 127,777-X. As there would remain 2 747-8F to be delivered while the last one was assembled a few days ago…
Would there still be 111 767-Fs left to deliver? Not sure. Neither I nor you knew how to interpret accounting rule ASC606. Already even that Airbus does not apply it. We return to orange to apple comparison? What use is that to you in the end?
@Checklist
Thank you so very much.
Focusing on the 777X, I guess the best thing then, would be to check out what Boeing has to say about it. From their latest 10-Q on pg 43:
As of 12/31/2021
Undelivered units under firm orders
777: 58
777X: 253
As of 9/30/2022
Undelivered units under firm orders
777: 70
777X: 244
————————————————————
From pg 11
‘A number of customers have requested to defer deliveries or to cancel orders. We are currently remarketing certain aircraft and may have to
remarket additional aircraft in future periods. If we are unable to successfully remarket the aircraft, determine further production rate reductions are necessary, and/or contract the program accounting quantities, future earnings may be reduced and/or additional reach-forward losses may have to be recorded.’
——————————————————-
“You are free to think…”
It’s not me ‘thinking’ anything; Boeing has stated they have 244 orders for the 777X that are firm. In 9 months they dropped from 253 to 244. In those same 9 months, the legacy 777 program went from 58 to 70 firm orders.
The accounting block for the 777X program – the total amount of aircraft they expect to sell over the life of the program – is 350.
I’m not deflecting to Airbus, oranges, 767’s or 747’s. This is about the 777 & the 777X programs.
@Pedro
—-
This is an open secret, not new. Not new about the additional costs of the 787/777X programs…
But you’re beside the point.
Where is your evidence that the 777X had substantial cancellations back to -300 orders?
Thanks
@Pedro
“Sigh!
Cash cow? At current production rate?? 🤣
Not aware many, other than a couple bottom feeders, picked the old 777 over the A350. When was the last order of those old 777 from EK, SQ and CX??”…
———
How.. You seem to ignore that between 2006, launch date of the A350-1000 and 2015 there were +/- 500 777-300ERs sold to the detriment of the first.
Moreover, a Chinese airline and United Airlines, which should reveal its choice for a hundred widebody orders, ordered the 777-300ER later.
United, which would have ordered the A350 12 years ago, has not taken any deliveries, already even all of the A350-1000’s switched to thé -900, in favour of the 777-300ER.
I remind you that even the -900 has never been delivered until now
The 777 was a cash cow
Please, a little humility, and come back down to earth
@Pedro
“Those guys are looking for a 767F replacement, nothing more IMO, bear that in mind”…
—-
As the other would say… There are only 3 customers for the replacement 767-F. FedEx, UPS, and DHL. In short, no market there IMHO
Thks
@CT
“They still had defunct Kingfisher Airlines orders still on the books 5 years after the collapse of the carrier..😂😂..
So obviously,to wipe 52 AB wide-bodies off the books from the Iran Air order ain’t happening any time soon.!!”
_____
Airbus has a way of doing things that is not transparent enough. I really like when they mix the A22X orders with the A32X orders
People who don’t know and visit the official Airbus website will probably think that thousands of A220’s are sold…
If they applied the ASC606 accounting rule like Boeing by transparency, it would be funny in their interpretation
I don’t think I have enough expertise to interpret this accounting rule
I really have the feeling that wanting to count the 777-X has less than 300 orders is a pious wish of our “dear friends”…
(or a situation that suits them or something like that…)
Thks
@Franc
Ok no problem.
That seems pretty clear to me !
Again, we had no transparency as to the orders from Airbus which does not apply this rule. There is no doubt today that widebody of +350 seats are suffering.
But as I said EK might be a good customer for the 777-X in the future now that the 777-X stands alone in this -400 seater class, that was my point all along
Thanks a lot 👍
“…now that the 777-X stands alone in this -400 seater class,…”
The new interior configuration of the A350-1000 allows at least 406 passengers to be carried, in multiple classes.
And the A350 is certified and available today.
Now if you can convince the airlines to actually buy it .
You may have something there!!
133 total orders 16 years on since
Launch…
Splendid numbers For your trusty a350 1. !!!!😜
We’ll see what Tim Clark thinks of it 😏
“Again, we had no transparency as to the orders from Airbus which does not apply this rule.”
Airbus applies IFRS15, which is the EU equivalent of ASC606. IFRS15 splits according to revenue as opposed to model.
-> @DOTInspectorGen is opening a new audit into @FAANews oversight of key features on the Boeing 737 MAX
https://mobile.twitter.com/davidshepardson/status/1590803747474735105?cxt=HHwWgoC8uY7l1ZMsAAAA
-> Aviation Week editors are skeptical of CEO Dave Calhoun’s new commercial airliner timeline.
https://mobile.twitter.com/AviationWeek/status/1590796513155944460?cxt=HHwWmMC4yYLA0pMsAAAA
More on that first story:
“The Transportation Department’s Office of Inspector General (OIG) said Thursday it will audit the FAA’s oversight of the inclusion of MCAS, a key airplane software feature in the 737 MAX design, that was cited as a contributing factor in two fatal MAX crashes in Indonesia and Ethiopia that killed 346 people.
“OIG will also review FAA oversight of the inoperability of Angle of Attack (AOA) disagree alerts on the majority of the MAX fleet in 2019. Boeing in 2017 identified that not all 737 MAX 8 aircraft were equipped with an AOA disagree alerts but did not directly notify FAA of the issue.”
https://money.usnews.com/investing/news/articles/2022-11-10/u-s-watchdog-will-review-faa-oversight-of-key-boeing-737-max-features
-> Is Boeing frittering away its future in the commercial airliner business? That question is being asked after CEO Dave Calhoun firmly quashed any notion that the company will develop an all- new model before the 2030s. Boeing hasn’t launched a new clean sheet airliner since the 787, nearly 19 years ago. Last summer, Calhoun’s said the launch of a new airplane, was at least quote, “a couple of years off.” But he appears to have moved the goalposts, and now says that Boeing will need at least a 20% gain in fuel efficiency before it moves ahead with its next model. That target is nowhere in sight. And if Boeing takes a pause, will Airbus also sit pat? That would effectively usher in an air of stagnation in the commercial aircraft industry and open the door wider to new entrants.
-> Jens Flottau:
Yeah, I just think that it is not sustainable for Boeing. Look, if you look at the backlogs, the firm order backlogs for Boeing and Airbus in the narrowbody market, Boeing’s market share is currently at 38%, so it’s already down a lot. It will go down further with the arrival of the long-range versions of the A321 neo, the XLR, and as the neo in general proliferates the 321 neo, so I mean one could argue it’s a big market, 38% is not bad, you can survive, but that’s actually not true for several reasons. One, suppliers. Suppliers will charge you more when you produce smaller volumes than your competitor. So, Boeing will be at a permanent competitive disadvantage vis a vis Airbus if that spread becomes too wide.
Secondly, incumbency is huge. It’s highly important for an aircraft OEM to be the incumbent manufacturer at a given airline. And if you’re looking at a market spread of two-thirds for Airbus, one third for Boeing, it’ll be extremely hard for Boeing to claim that back. It’ll be impossible with the current generation of aircraft, but it will also be very, very hard with the next generation. So, it’s in their own interest to come up with something quick just to start off a higher market share base.
And one thing Boeing completely forgets is its customers, the airlines. The airlines are under huge pressure to come up with a more sustainable way of flying. They’ve set their own environmental parts for as soon as 2030. If you look over here in Europe, Air France, Lufthansa, they come up with absolute reductions in carbon dioxide emissions of like 12% for Air France-KLM, for example. They can only achieve that with more efficient aircraft that will replace the current fleets. But it seems that Boeing isn’t taking that into account at all.
One thing I’d like to highlight: that 20%, My understanding of how things have traditionally played out is that half of that is engine, and if you ask around the engine manufacturers, then they’re saying that they could well develop an engine based on the current technology that is about 10% better within that timeframe, until about 2030 or so. And then I just don’t believe that it is not possible for Boeing to build a new air frame, new wings that are 10% better than a design that’s been developed in the ’60s. It’s 50 years. Come on guys, you got to be being better than that.
-> McDonnell Douglas had a huge lead on Airbus. Airbus was a distant third in this market, and then McDonnell Douglas seemed to focus on shareholders and stopped investing in the future. By 1997 it was gone. Just gone.
-> … that’s exactly what happened. McDonnell Douglas really stopped investing in all new designs and it withered on the vine. Airbus came in, an aggressive competitor, and it was able to bite away mostly at McDonnell Douglas’s market share before of course it became a duopoly.
-> … a shifting of the supply base toward Airbus in big ways and small ways. *Airbus will be able to set the terms strategically. They’ll be able to demand priority. You’re going to supply Airbus first. You’re going to go for the R&D projects that Airbus wants*. If you’re a U.S. supplier, especially down in the tier two, tier three, you’re going to start having to allocate some major money to try to get on Airbus programs.
When the Titanic started to go down, at first, nothing seemed to happened. Everything looked as if it’s normal, no one, or at least not many even aware what’s really happened. It started slowly, really slowly, then it quickened and accelerated …
-> “What is the magic number for Boeing leadership to say, ‘yes it’s time to pull that rabbit out of a hat?’ & is that number arbitrary fundamentally and how do you get to that number? And what do you lose along the way waiting so long to get to that number?”
https://mobile.twitter.com/jonostrower/status/1591487766411759616?cxt=HHwWgMDS1aDsjJYsAAAA
Yes I read Guy Norris’ article. Basically, they’re ranting about Boeing’s situation, which is no more different than the launch of the 737NG. Nothing new in all this, Boeing, should have launched a replacement a long time ago. The other occasion would have been in 2011. Giving in to pressure from American Airlines is just a pretext, surely they wanted the fastest cash flow through the 737MAX, the consequences are that they spent +/- 45 trillion USD for the two-year grounding. Now they find themselves stuck at the “mid-life” of the 737MAX. They are both late and ahead if 8ls launches the 737 replacement this decade.
@DOTInspectorGen is opening a new audit into @FAANews oversight of key features on the Boeing 737 MAX
——-
With De Fazio, it’s an eternal step back. I’m hurry that he is going to retire.
Damn, what more could this bring? The complicity between Boeing and the FAA has been denounced. The FAA feels betrayed today has become completely “paranoid” in view of the horribly slow certifications for the MAX-7/-10, 777X…
I’m just saying “sarcasm” and “renown” are the two things that me come to mind whenever i see an action by De Fazio somewhere…
When there are rats under the carpet, you can’t just ignore them and carry on as normal — because the problem will just fester.
De Fazio is a rat catcher — bless him!
If BA had its act together, the FAA wouldn’t have to spend so much time checking for shortcuts.
More serious than that? It becomes a bulimia to put too much icing on a cake…
..shortcuts?
That time is over and you know it. 737MAX10 certification far in 2024, 777-X will be IMHO in 2026… I don’t believe there is FAA negligence in there. And my opinion on De Fazio won’t change anyway
The repeated “slips” reflect more the negligence during the MAX 8 development (now they have to play catch-up and forget their usual Jedi mind tricks) and impotence of one airframer.
“That time is over and you know it.”
That time is far from over.
That’s why the FAA is still not delegating (MAX and 787) sign-off authority to BA.
> That’s why the FAA is >>still not delegating (MAX and 787) sign-off authority<< to BA.
.
The 737’s infamous autothrottle rears its ugly head again:
https://www.seattletimes.com/business/boeing-aerospace/faulty-system-combined-with-pilot-error-led-to-boeing-737-crash-in-2021/
Pretty much sums it up the issue here
https://mobile.twitter.com/jonostrower/status/1591121494373171200?cxt=HHwWgIDQqbWk5pQsAAAA
-> Anthony Marsh, an attorney with Seattle’s Herrman Law Group, which has filed suit against Boeing over the Sriwijaya crash, said via email that the repeated issues with the autothrottle system are “troubling.”
“Though Boeing has been dealing with this issue on its aircraft for some time, it looks like it still hasn’t found a sustainable solution that keeps the autothrottle system from causing problems,” Marsh wrote.
Hopefully Mr. De Fazio will get involved in this.
@Bryce
“That’s why the FAA is still not delegating (MAX and 787) sign-off authority to BA”…
—-
That’s my point too. The FAA is watching Boeing closely… So why so much posturing from De Fazio?
Because not all the rats under the carpet have been dealt with — and there’s no room for complacency 😏
@Bryce
How can Boeing be complacent when you know that its 737MAX7 served as the basis for the certification of the MAX-8 returned to service and that the first is still lying around? That the MAX-10 certification slipped for 2023 and the 777-X for 2025, but which in my opinion could even slip until 2026. Is this enough to say “complacency”?
I would rather say, “frustration”.?..
Who said I was referring to complacency by Boeing?
Events at Boeing are still a good fit to my unusual hypothesis; Mr. Calhoun’s pointed
“I doubt we’ll even get to the drawing board (!)
in this decade” being the latest one of note.
Wouldn’t vagueness on that point been a more typical approach for the CEO of a VLC? And the stock price, as a result, goes.. up? Interesting.
We’ll see how it goes, and I will try to avoid confirmation bias, as well.
I believe the stock is still down more than a third from recent pop.
@Bill7
Unfortunately, as Guy Norris of Aviation Week says, being a naïve young aviation journalist at the time to defend Mc Donnel Douglas,
He claims that at the time the cancellation of the Double-Decker MD-12 increased the stock price…
Pretty scary, and I saw it going up at Boeing a couple of days ago skyrocketing (believe me)
But it’s true that Boeing’s position in 2022 is different from that of McDD in 1992 through its portfolio and a “secure” duopoly …
“There are only 3 customers for the replacement 767-F. FedEx, UPS, and DHL. In short, no market there IMHO”
https://leehamnews.com/2022/09/20/boeing-shows-fedex-concepts-for-787f-and-nma-f/
Oops a vaporware in your opinion??
Calhoun has a couple more years as CEO tops.
He should just say no new airplane programs near term and leave it at that.
It is presumptuous of him to speak for what his more capable successor may do.
His successor will inherit the present debt problem.
@Bryce and Bentwing
Cash flow is needed at the moment. 2023-2026 period and beyond.
Will there is a lot of work to do for certification.
They are will be busy at least until the end of the decade, with 737MAX-7/-10, 787HGW, /-9XF, 777-9/-8F/-8 certification
…”Unfortunately”, Calhoun was honest
May be what Calhoun & his co. know the truth of BA is much worse than what appears on the outside after their financial dress up.
@Bryce and Bentwing
Cash flow is needed at the moment. 2023-2026 period and beyond.
Will there is a lot of work to do for certification.
They are will be busy at least until the end of the decade, with 737MAX-7/-10, 787HGW, /-9XF, 777-9/-8F/-8 certification
…”Unfortunately”, Calhoun was honest
They won’t be doing much/any of that if they don’t start making substantial quarterly profits.
And there’s not much chance of that — due to low delivery rates, low margins, and high interest payments.
Boeing seems to be blaming their low delivery rates on their suppliers.
1) The other guys don’t seem to be having the same problem; not to the same degree, anyway.
2) I wonder if the two companies’ repective relations with suppliers might be having an effect on item 1. I won’t mention issues related to getting paid in a timely manner.
3) Boeing mgmt seem utterly unconcerned about any of it,
and their stock price has gone *up* since Mister Calhoun
said “we won’t even get to the drawing board [for a new aircraft] in this decade”.
Maybe, just maybe, there’s something else going on.
The entire stock market went up last Thu/Fri, due to a positive CPI report on slowing/peaking inflation in the US.
-> There will be a price to pay for believing the pandemic e-commerce trend could last forever.
https://mobile.twitter.com/R_Wall/status/1590735272676728833?cxt=HHwWgoClua3TtpMsAAAA
@Pedro
“Oops a vaporware in your opinion??…”
That’s why I said “IMHO”. My point was that a 1:1 767-Freighter replacement, does not go beyond customers like DHL, UPS and FedEx, IMHO…
@Pedro
May be what Calhoun & his co. know the truth of BA is much worse than what appears on the outside after their financial dress up.
——
“After their financial dress up?”
They didn’t hide anything at all. They rather revealed a loss of 3b USD right?…
They tried to detract from the Q3 loss by touting positive “operating” cashflow (which, in fact, was purely due to fortuitous, spurious cash receipts).
It didn’t work.
Abandon program accounting and PFS etc and let the truth out.
In your opinion…,
if not to please shareholders and investors, what does that concern us, the general public? After all aren’t they “too big to fall”?
To whom is this comment directed?
Some commenters here seem to have consistent difficulty with in-thread replying…
Brice,
This is for whoever wants it…
@Bill7
“3) Boeing mgmt seem utterly unconcerned about any of it,
and their stock price has gone *up* since Mister Calhoun
said “we won’t even get to the drawing board [for a new aircraft] in this decade”…
——-
Maybe it’s Mc Donnel Douglas legacy? The same thing happened when the California aircraft manufacturer canceled its MD12 project in 1992… Stocks soared overnight just after the announcement.
Strange isn’t it? IMHO they have good competitive products with the 787, and the forthcoming HGW 787, the 737MAX-10 and the freshly launched 777-XF.
My question is, Did they plan a plan B if the MAX-10 was not certified?…
https://mobile.twitter.com/Satcom_Guru/status/1590811908491587584?cxt=HHwWgMDR4ZLA2ZMsAAAA
After the ftx debacle, cz:
“FTX aside, avoid businesses/exchanges/projects that:
– are *not profitable (musical chairs)* …
FTX was illegally using customer deposits — backed by fictitious collateral — to execute trades in a sister-company (Alameda). Different to Bernie Madoff, but yet similar in a way. Another example of what can happen when greed combines with lack of oversight/regulation…sound familiar? 🤔
Hopefully, this will prompt investors to look beyond the hype and hot air and to more carefully scrutinize their investments.