Update 2: Boeing pauses remarketing China’s airplanes, outlines prerequisite for a new airplane program. Update 1: Calhoun feels good despite earnings miss; Boeing reports 4Q, full year loss but financial progress continues

Jan. 25, 2023, © Leeham News: The Boeing Co. recorded a net loss in 4Q022 and for the full year while reporting positive cash flow. There were no one-time charges, the first time in many quarters—a key metric some Wall Street analysts were watching for. Long-term debt declined by 10% as current debt increased. Negative stock equity increased. Cash and marketable securities increased slightly.

  • Cash increased to $14.6bn from $8bn year over year. Marketable securities decreased to $2.6bn from $8.2bn.
  • Advances and progress billings (deposits and progress payments) were essentially flat: $53.1bn vs $52.98bn.
  • Short-term debt (that is due within 12 months) increased to $5.2bn from $1.3bn.
  • Long-term debt declined from %51.8bn from $56.8bn.
  • The shareholders’ deficit increased to $15.88bn from $15bn.
  • Free cash flow was $3.1bn for the quarter and $2.3bn for the year.
  • Revenues for the quarter were $19.98bn vs $14.79bn and $66.6bn vs $62.286bn for the year.
  • Operating loss was $353m vs a loss of $4.2bn for the quarter and $3.5bn vs $2.9bn for the year.
  • Net loss was $663m vs a loss of $4.16bn for the quarter and $5bn vs $4.3bn for the year.

The full press release is here.

CEO Dave Calhoun said challenges remain to achieve production stability and within the supply chain.

Goals to improve

“This will be another important year for us as we look to steadily increase our production rates, further improve performance, progress in our development programs and deliver on our commitments,” Calhoun said in a message to employees.

The earnings call webcast is at 10:30am EST today. The earnings presentation is here.

Initial reaction to the results was negative. The free cash flow was in line with expectations, but the profit and loss for the corporation and the divisions were below expectation. The stock price fell in pre-opening trading.

Robert Stallard of Vertical Research wrote:

P&L still a mess, FCF in line – Revenues of $20bn were up 35% YoY, but 7% below our forecast. All three major divisions missed our estimates, with the largest variance being in the Commercial Aircraft division. BCA also lost money in the quarter (again), with a negative margin of -6.8%. Boeing noted that the 737 production rate “is stabilizing” at 31/month, while the 787 “continues at a low production rate”. The Defense division was at least positive this quarter with a 1.8% margin, though it saw the “continued operational impact of labor instability and supply chain disruption.” As noted above, FCF was in line with our forecast, and Boeing was able to reduce its net debt by ~$3bn sequentially, leaving a year-end balance of ~$40bn.

Credit Suisse wrote:

Bottom Line: We view this as a somewhat negative-leaning report. Positives include FCF coming in ahead of Street ($3.1b vs. guide $2.5b, Street $2.9b, CSe $3.0b) and reaffirmation of 2023 commercial delivery and FCF guidance. Downside is that both of these elements were expected, whereas Q4 P&L results were disappointing, with EBIT missing across the segments. That said, FCF matters most and Q4 FCF outperformance and reiteration of ’23 FCF target of $3-5b will likely protect against downside.

Update 1: Calhoun on CNBC

On CNBC, Calhoun said Boeing nevertheless feels “very good” about the quarter despite the earnings miss. Deliveries exceeded expectations, he said. Financial margins will bounce around this year as Boeing works to deliver 737s and 787s from inventory. He says long-term growth and Boeing is competing for orders for delivery by the end of the decade.

The industry is concerned about supply chain constraints, Calhoun said. In the US, Calhoun pointed to its sales success vis-à-vis Airbus and competitive elsewhere in the world, except in China, where Boeing is still frozen out. The 737 MAX just returned to service in China with a handful of flights by China Southern. There were 97 MAXes in service in China when the regulator, CAAC, grounded the airplane in March 2019. CAAC is the last major regulator to authorize a return to service. Calhoun said Boeing has about 100 MAXes in storage that were produced during the grounding.

Update 2: Earnings call Q&A

During the earnings call, Calhoun announced a pause in remarketing the 138 737 MAXes that are in inventory since 2019 that were ordered by Chinese airlines. Beijing refused to authorize the delivery of these airplanes for COVID policy and geopolitical reasons. The first of the 97 MAXes that were in service in China when CAAC grounded the fleet returned to service this month. About 60 flights are scheduled this month and about 260 next month.

Calhoun said the focus today is returning airplanes in China to service. There’s a reason to be optimistic about clearance to delivery from inventory, but Boeing won’t predict the resumption date. Boeing today is only “partially” remarketing the Chinese airplanes. “We’re on pause with that until we understand what China wants to do,” he said.

New airplane program

Separately, Calhoun said there are essentially three major requirements before Boeing proceeds with a new commercial airplane program. One is truss wing development. Boeing has worked on this concept for years. Last week, NASA granted a contract to Boeing to build a demonstrator out of a converted MD-80/90. Calhoun said that the design must be put through tests before the design can be incorporated into a new airplane. He doubts it will apply to a Middle of the Market aircraft or a widebody airplane but said it can apply to a single-aisle aircraft.

LNA revealed in November that Boeing’s commercial product development was working on a truss wing design, one of three then under research and development.

The second prerequisite is digital design for modeling the concepts, for production, and for servicing. Calhoun said Boeing is “cutting its teeth” on this in its defense programs. Maturity is required before application on the commercial side.

Finally, propulsion used to drive new airplane designs. Calhoun believes propulsion now will be a contributor. The truss wing will open options for a bigger engine and the position on the wing. Although he didn’t say so, this is an allusion to the Open Fan engine being developed by GR, Safran, and CFM in the form of the Open Rise engine. The industry needs 25% to 30% better economics for a 50-year airplane program and Calhoun says these prerequisites are needed to get there.

 

232 Comments on “Update 2: Boeing pauses remarketing China’s airplanes, outlines prerequisite for a new airplane program. Update 1: Calhoun feels good despite earnings miss; Boeing reports 4Q, full year loss but financial progress continues

  1. Makes me wonder why Boeing’s market cap exceeds that if Airbus.

    What is the market seeing that I’m missing?

    • Which OEM has returned more cash to the stockholder? There is part of your answer.

      • BA has 596M shares in circulation.
        With a gross debt of $57B, that means that each share in BA carries a debt of $95.64 — which is 45% of the current stock price.

        That’s an impressive “cash return” for shareholders 😉

        • @ Bryce

          Over the last decade Boeing has made my 401K a lot of money. Fact. And imagine a lot of 401Ks decent money in the last decade. That might have something to do with Boeing’s stock price.

          And all of your posting twitter links and sarcastic rants do not change that fact.

          • I’m as disappointed as anyone about how Boeing has declined over the past 20 years. At this point they look like a company with a limited future. But the owners (the shareholders) don’t mind, since they continue to be paid. It’s their company, they are the owners, and they get to decide whether to invest in the future or take the money now. It’ll take a few decades to run Boeing into the ground and the shares become worthless, but in the meantime the owners are getting fantastic returns.

          • @williams
            I don’t post Twitter links — you’re confusing me with someone else.

            It’s nice that you’re happy with your BA stock performance — though it puts you in a minority 😉

      • Sure, when $$$ > safety/lives
        especially those in the third world worth only peanuts, in the eyes of some people.

    • @ Bruce Levitt
      If you watch CNBC, you’ll see regular discussions on why US stock markets have recently been faring more poorly than stock markets in Europe, Asia and emerging markets.
      Main reason: US stocks were (and still are) heavily overvalued — an asset bubble resulting from easy money. That bubble is deflating now.

      Market cap doesn’t say much: how many members does the trillion-dollar market cap club still have? The companies haven’t changed — but the bubble is deflating.

  2. What exactly is the financial progress? All numbers seem to have gotten worse, so what kind of progress is there?

    • If the numbers have got worse at a slightly slower rate than previously, then there’s some sort of positive influence in play, I guess.

      It’s a bit like a tug boat pushing an oil super tanker around, trying to stop it hitting the rocks. Question is, is there a big enough tug boat to actually be able to turn Boeing around?

      I noted the fact that the market was looking for “one-off charges” to stop happening. How bad do things have to be when an improvement is marked by a long series of one-off issues coming to an end?

      In my books, a series of one-off issues is symptomatic of a wider problem. Calling them “one-offs” is hiding that wider issue.

      • This is progress!!?

        -> In 2022, Boeing aimed to resume Max shipments to China, bring 737 production to 31 jets monthly, deliver 500 737s, achieve the Max 7’s certification, and resume 787 deliveries …

        -> With the exception of resuming 787 deliveries in August, none of that has yet happened.

        -> Though the company has in 2022 resumed 787 deliveries, it has also taken billions in losses on troubled military programmes, delayed several commercial aircraft certification timelines and failed to hit 737 output targets.

  3. “Marketable securities decreased to $2.6bn from $8.2bn.”

    Robbing the piggy bank to repay debt again? Oh no. 🤔

    • More probably moving from securities to cash as the stock market dropped a lot

      • It would be unusual for a company to invest its marketable securities in the stock market (aside from pension plans obviously). Companies usually invest in money market funds or corporate bonds.

        • Not sure I see the difference of that or buying back the stock you sold previously!

          We see how well that worked out.

    • Free cash flow for Q4 was $3 bill. For the full year it was $2.3 bill

      Thats what counts …
      Net orders for the full year was 774 .

      To imagine some were saying , yes you, that they were near bankrupt !
      Dont let your crystal ball whack you ……. on the way out
      Wrong on the Max on China , wrong on the M7 and M10 waiver, wrong on Boeings financial recovery.

      • > Free cash flow for Q4 was $3 bill. For the full year it was $2.3 bill
        Thats what counts … <

        Commenter DoU and Boeing multi-millionaire CEO Calhoun appear to be in agreement on that point. I'm also impressed- though not postitively- by how
        the phrase "cash gusher" WRT Boeing has gained such currency in the various media.

      • -> “[an] analyst with Vertical Research Partners, wrote in a note to investors after the results posted that he’s “not entirely comfortable” with Boeing showcasing the strong cash flow and ignoring yet another quarterly loss.

        He wrote that cash flow will naturally be strong as Boeing clears its “bloated inventory” of parked planes built much earlier but only now being delivered. Yet brushing off the loss won’t sit well with investors, he said.

        ======================

        Oh well, remind us who proudly stated (repeatedly) that those 737 MAXs stored are “as good as” cash?? 🙄

      • Looks like at least one commenter here was fooled by the cash flow ruze 😉

        • Forecast is $10-12 bill cash flow annually by 2025
          Some ruse. maybe if they used unit accounting like Airbus the numbers would be even higher

          • > Forecast is $10-12 bill cash flow annually by 2025 <

            And we know that Boeing *always*
            meets or beats their forecasts.
            Maybe mcBoeing should concern
            themselves with learning how to
            make a new aircraft, rather than
            becoming a "cash gusher™"; the latter I think will not end well.

            😉

            And we know that Boeing

          • “Forecast is $10-12 bill cash flow annually by 2025”

            Whose forecast? Yours??
            IIRC BA’s number is *only* $10 billion, and 2025-2026-ish. Are you paying $2 billion out of *your* own pocket?

    • That’s $28M per plane.
      According to an item on CNBC 3 weeks ago, BA *nominally* makes $10M on a 787-9 at a normal industry discount of 50%.
      10-28 = -18…so BA will be making a loss of $18M per 787 delivered from inventory…

      And: the 1200 in-service 787s still have to be inspected/repaired, at BA’s expense…

      • Any link for the the 1200 787s repairs ?
        the flaws are only on more recent planes after the software flaws on the checking scanners

        But we can guess its just more of your crystal ball gazing presented as a truth.

        Hows those chinese airspace Max flights going , found them yet. Phuket is such a lovely place

        • DoU said: “..the flaws are only on more recent planes after the software flaws on the checking scanners..”

          From Composites World 12/2020:

          “..A software notification designed to alert when a shim exceeded the maximum thickness per engineering specifications was not being used, which led to shims being produced that may not have fully met engineering requirements. The Boeing spokesperson says the improperly sized shims did not affect the structural integrity of the join and did not pose a threat to flight safety.

          Boeing says the aircraft affected by the shim sizing issue were all >> manufactured earlier in 2019 << and that the automated shim production system was immediately corrected in production.

          Then, in August 2020, as part of its quality assurance program, Boeing discovered the IML disconformity in Sections 47 and 48. Further, says the Boeing spokesperson, Boeing determined that an IML anomaly coincident with the earlier shim issue created an unacceptable violation of design criteria that could, under certain load conditions, lead to structural failure. Eight 787s were identified to have the IML anomaly and improperly sized shims between Sections 47 and 48. These eight aircraft were taken out of service for repair. Boeing’s spokesperson says a majority of those eight aircraft have returned to service.

          The discovery of the IML anomaly in Sections 47 and 48 prompted Boeing to expand its assessment of IML conformance to other fuselage sections, which led to the most recent decision to expand inspections of all undelivered aircraft. The U.S. Federal Aviation Admin. (FAA) is aware of the IML issue and Boeing is working closely with the agency on the inspection program. Boeing’s spokesperson says the company’s assessment following the current inspections will guide decision-making regarding what, if any, action might be required for in-service aircraft.."

          https://www.compositesworld.com/news/boeing-conducts-inspections-of-787-composite-inner-fuselage-skin

          More recent links better illustratiing
          the Boeing 787 fuselage situation are welcomed. Right now, it appears Boeing are manufacturing all of *one*
          787 per month.

          • no regression testing.
            It’s at the core of all these upcoming issues.

            That would indicate a rich fount of still hidden but nonetheless existing issues of unknown gravity.

        • Dear poster,

          Many here read like hundred(s) articles a week. Have you tried your best to catch up? 🤔

          Have you tried the Seattle Times? 🤭

        • @ DoU

          Some commenters here have a very short memory — or a very selective one 😉

          “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.”

          “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.”

          https://www.adn.com/nation-world/2021/11/20/faa-memo-reveals-more-boeing-787-manufacturing-defects-including-contamination-of-carbon-fiber-composites/

      • 787 deffered costs still increasing
        in Q4 plus $1Bn
        Will be written off sooner or later

    • From the Seattle Times:
      -> “Along with a $3.5 billion charge for the 787 delivery halt in the fourth quarter of 2021, that brings the running total cost of the 787 problems to $6.3 billion

  4. Despite BA’s attempt to use free cash flow as a distraction (more on that later on below), these results are anything but positive.
    Some highlights:
    – Analysts expected a Q4 profit; instead, they got a Q4 loss.
    – 12th straight quarterly loss in a row.
    – The loss for 2022 (whole year) is even bigger than that for 2021: $5.1B vs $4.3B.
    – Despite 154 deliveries, BCA *again* made a loss of more than $600M — further evidence that BA is selling at unsustainable discounts.

    And now the free cash flow farce:
    Just as for Q3, BA tells us that the Q4 positive cash flow was actually a fluke: see the text just above Table 3 in its earnings report, where it states (emphasis added):
    “Operating cash flow improved to $3.5 billion in the quarter, reflecting higher commercial deliveries ** and timing of receipts and expenditures ** (Table 2).

    Looking at the balance sheet, we see the evidence of this fortuitous juggling with receipts and expenditures. The following items increased in 2022, by the indicated amounts:
    – Accounts payable: increased by $939M
    – Accrued liabilities*: increased by $3.126B
    The sum of these two: $4.065B.

    * Examples of accrued liabilities typically include such things as future wages, future interest payments, future tax payments, future lease payments, etc.

    https://boeing.mediaroom.com/2023-01-25-Boeing-Reports-Fourth-Quarter-Results

      • Well, somebody doesn’t seem to want us to realize that, if you’re consistently generating a loss, any positive cash flow that you’re reporting must be coming from one-offs — by definition.
        And the problem with one-offs is that they’re ultimately unsustainable.

        • Lets see if I have this right.

          I get $5000 in cash but I gamble online and loose $10,000 and my free cash flow is lovely and ignore I am sunk to the tune of $5000?\\

          And of course we want to Privatize the FAA because of a problem (well SouthWest had a problem too and we are not going to have the government take it over. Right Mel

    • Calhoun cautions that there may be another loss for the current quarter?? 🤔

      From CNN:
      -> “But digging deeper into the financial results highlights a potential problem: It appears Boeing received lower prices on some of its planes than analysts had expected.

      That’s because the company’s revenue fell short of forecasts, coming in at just below $20 billion. While it was Boeing’s highest revenue figure since the start of the pandemic, it was about $360 million less than analysts’ consensus estimate. The combination of better-than-expected deliveries but worse-than-forecast revenue suggests that weaker pricing.

      • Well, certain LNA commenters have known that for a long time…haven’t we?

        Under such circumstances, the EC could probably successfully charge BA with dumping…

          • And it will only get worse: frames sold since RTS in Nov. 2020 have had even larger discounts applied…

        • ,, and the ‘analysts’ continue to be
          “surprised” that that company’s
          number’s never add up. 😉

          Theatre.. cui bono?

          • Apologies for the unneeded apostrophe; I do try to write
            clearly, and the edit button
            is not appearing.

    • When I was working in Delphi, the same nonsense was happening: delay paying suppliers, convert software R&D costs (expense at year incurred) into assets (depreciated over 5 years) and when that was not enough, create a fictitious company in the Bahamas and sell your inventory to it and book that as sales. At the same time purchase of capital equipment (mainly needed for manufacturing lines) was limited to 2 weeks every quarter on a first-come-first-serve basis as the funding available was dependent on the quarterly forecast to Wall Street (the forecast came first and then they would work backwards from there to see how much money was available for each part of the business). One year we laid off lots of engineers in October to save money to meet the forecast which left more than 50 customer committed projects with hard deadlines completely unstaffed (0 FTE per project) and then tried to hire the same people back in January (with a $25k sign-on bonus) to clean up the mess. That was ok because the last financial year Wall Street forecast had been met and new games would be invented for the next financial year.

      The end result: you run out of games to play one day and enter bankruptcy (and in Delphi’s case, people went to jail). “timing of receipts and expenditures” works in the short term, but in the long term makes the mess only bigger. My last day at Delphi was the same they the informed the SEC that their accounts from the previous years needed to be restated as the reported cash flow contained “accounting errors”.

      • “People went to jail”? That must have been a while ago. We gave up prosecuting white collar crime recently.

        • There were always exceptions, besides those too-big-to-fail domestic big corps:
          Madoff;
          Martin Shkreli etc

          No doubt it’s more like selective justice.

  5. “Calhoun announced a pause in remarketing the 138 737 MAXes that are in inventory since 2019 that were ordered by Chinese airlines.”

    Does that mean that Air India has missed the boat on those 50 China Southern whitetails that it had been offered?

    • This is amusing, from Air Insight:

      “But there are indications that some 220 MAX flights are scheduled for February. This could be a major shift and an indication that Chinese airlines that have taken delivery of MAX 8s before the grounding in 2019 are willing to resume services.

      ““These numbers are in the range with my numbers”, said Calhoun. “The opening up of China (after Covid) is going to be a major event in aviation.”

      https://airinsight.com/boeing-more-optimistic-about-max-chances-in-china/

      Dear Dave:
      220 flights in Feb corresponds to 7.85 flights per day. That’s a perfectly reasonable number for the *three* MAXs that are currently flying in China — corresponding to just 2.62 flights per frame per day.
      It’s not a sign of extra MAXs being returned to service…

      • I wonder if Mister Calhoun et al have
        considered that they might appear..
        desperate.

        Just a thought.

    • It’s funny how media report described the airframer offers “immediate” delivery of remarketed MAXs. Watching those 787 and 737 MAX trickled out in the last two years.

      Now West said it would take an additional two years to clear them? It seems the best BA can do is always *in two years”, had been hearing this from early 2020 or so, and listeners still take their word as face value?? Wow.

      • I’m wondering if Dave’s announcement that he’s halting re-marketing of the ex-Chinese MAXs might be because nobody actually wants them?

        Akasa is still taking some, as is United, but it looks as if Air India may have run into trouble with the engine makers for the whitetails, who are not willing to renegotiate service terms. And, apart from those carriers, who has expressed interest in these frames?

        Poor, unloved, corroded, insect-infested, mossy, 4-year-old whitetails looking for a new home…

  6. “Short-term debt (that is due within 12 months) increased to $5.2bn from $1.3bn”

    This increase actually happened in Q1 — so this debt now has to be repaid within about 3 months at this stage. That will reduce currently available cash from $17B to ca. $12B.

    BA appears to have repaid just $1.1B in debt in 2022.

  7. Great job, Bryce with your realistic analysis. I just call it more smoke and mirrors for this band of fools called Boeing executives.
    Not mentioned here, but the Seattle Times article was much more comprehensive and talked about Calhoun saying the FAA needs to be privatized. This man is an idiot. Yeah let’s privatize the FAA and have Boeing run it….. too funny if not pathetic.

    And now our government, via NASA, is helping bail out this company with a contract for an aircraft that probably Embraer would be better at. Really we are going back to a strutted wing?

    Meanwhile, Airbus is developing an enhanced flight vision system for increasing safety of flight.
    https://www.aviationtoday.com/2021/09/17/airbus-is-developing-a-new-enhanced-flight-vision-system-option-for-a320s/

    Airbus is leading the way. They put there money where their mouth is.

  8. Great job, Bryce with your realistic analysis. I just call it more smoke and mirrors for this band of fools called Boeing executives.
    Not mentioned here, but the Seattle Times article was much more comprehensive and talked about Calhoun saying the FAA needs to be privatized. This man is an idiot. Yeah let’s privatize the FAA and have Boeing run it….. too funny if not pathetic.

    And now our government, via NASA, is helping bail out this company with a contract for an aircraft that probably Embraer would be better at. Really we are going back to a strutted wing?

    Meanwhile, Airbus is developing an enhanced flight vision system for increasing safety of flight.
    https://www.aviationtoday.com/2021/09/17/airbus-is-developing-a-new-enhanced-flight-vision-system-option-for-a320s/

    Airbus is leading the way. They put there money where their mouth is.

    Gee folks take solace that ‘Calhoun feels good’ wouldn’t you if you’re going to be receiving a multi million dollar bonus?

    • Good comment; thank you. See what (in the early stages of) being done to the National Health Service in the UK, and- especially- who’s got their fingers in *that*
      very large pie.

    • Apologies for the repeat comment. Must have hit the button twice. Just like they do on 737 stab trim.

      • Airdoc:

        Boeing issues aside, a TBW has been out there for a while and its a method that might change the aerodynamics equation for something better.

        Its a shame you miss the tech aspects of this that is a possible difference maker in making fun of the concept (vs Boeing)

        Do you think NASA is stupid? (well given their track record). Nelson is a political pro, he sure as blazes is not going to hire Embraer to do a TBW.

        Europe works the same way and has for some time. Clean Skies anyone?

        If the TBW advances aviation I am all for it and if Boeing as a company benefits, I have no issues with that either.

        • Why exactly should Boeing be paid by NASA to do research that will be used
          for private gain?

          • “Why exactly should Boeing be paid by NASA to do research that will be used
            for private gain?”

            American Capitalism? Socialize the downside risks, privatize the upside benefits. BA is busy touting its current & future FCF to please/reward its shareholders. How often did the U.S./BA criticize the European subsidies??

        • “Do you think NASA is stupid?”

          Do you think @Airdoc is out of his depth?? I don’t think so, unlike some others here.

    • Mmh enhanced flight vision system?

      Sounds like copy and paste from what dozens of business jets have had for years. I would not be amused if the lot of you call a giant leap in innovation

      Hurray to Airbus who are just taking advantage of already existing tech and screw Boeing who are working on a unique wing design that could reduce fuel burn by a substantial amount. Haha

  9. Actually this was the Airbus technology improvement I was eluding too in my previous comment, the other one is a couple of years old:

    https://airinsight.com/airbus-tests-autonomous-assistance-with-dragonfly/

    Airbus has been testing new technologies that will assist pilots during operations in the air and on the ground. Called DragonFly, the system can alleviate the task of pilots during taxiing at airports but also automatically guide the aircraft to an airport and land it safely in case a pilot gets incapacitated. Airbus tests autonomous assistance with DragonFly.

    Airbus leads the way. Safety first

    • Maybe they could invent a system that doesnt switch off FBW envelope assistance so the pilots arent fooled into thinking they cant stall at high or low altitude.
      Its not incapacitated pilots thats a problem its the absolute reliance on technology without knowing when its not working fully.
      Air France over the South Atlantic, XL Airways/Air NZ over the Med, Air Canada using automated landing ( came in short) at Halifax. ALL crashed

      Maybe someone could include warnings on alpha numeric messaging on a cockpit display…whats the name of it again ?

      • “Its not incapacitated pilots thats a problem its the absolute reliance on technology without knowing when its not working fully.”

        737 MCAS comes to mind (2 recent crashes).
        737 autothrottle comes to mind (multiple crashes).
        737 cockpit alerting system comes to mind (at least 5 crashes).
        737 (classic) rudder malfunctions come to mind (multiple crashes).
        737 cabin pressure system comes to mind (recent AD, and at least one crash).

  10. Airdoc,

    “…And now our government, via NASA, is helping bail out this company with a contract for an aircraft that probably Embraer WOULD be BETTER at. Really we are going back to a strutted wing?…”
    ——
    Certainly mind-blowing commentary from a perfect troll. Who are you to know which concept/project is better than the other?
    Be serious…

    • @checklist

      It’s easy isn’t to make fun of commentators. You don’t know my background. You little man (or woman).

  11. Airdoc

    “…Called DragonFly, the system can alleviate the task of pilots during taxiing at airports but also automatically guide the aircraft to an airport and land it safely in case a pilot gets incapacitated. Airbus tests autonomous assistance with DragonFly….”
    —-
    Useless gadget, you are excited to see a system that is absolutely useless because it’s Airbus but you criticize NASA and Boeing… How many pilots in the world are incapacitated?…

    Lol…

    • Nothing wrong with experimenting, but keep in mind that Airbus still uses winglets and Boeing long ago went to the crank wing tip with its superior wing design division.

      The only thing in Boeing lineup using winglets ironically is the MAX.

      • TransWorld

        I didn’t say it’s bad to experiment, it’s just hilarious to see that there are people who go into raptures over little things because it’s Airbus. Insulting Boeing for its concept comes from a certain envy / visible jealousy… Lol!

        Thanks Boeing which advances aeronautics. Airbus will certainly come with a copy, as always but will not match Boeing. If the A320 is so competitive it is because it has a gap of 25 years compared to the 737. If Boeing launches this aircraft I will just be jubilant…

        • “Thanks Boeing which advances aeronautics. Airbus will certainly come with a copy, as always but will not match Boeing”

          The NASA/BA TBW concept borrows from a 1948 French design (Hurel-Dubois) — see below.

    • @checklist

      I appreciate your sarcasm’s, but there’s data out there on incapacitated pilots. Just research that if you know how.

      I’ll ask you, what price safety?

      Boeing MCAS is a useless gadget that killed hundreds.
      You’re the troll.

      • On the subject of “useless gadgets that kill hundreds”, let’s not forget the illustrious 737 autothrottle…

      • Thousands of 737 MAXs on order, hundreds of them in service, so MCAS is here to stay, like it or not .

        I don’t get your need, to compare a high school project like dragon fly to a revolutionary wing design like the Truss Braced wing.

        The cirrus vision jet is able to autonomously land at a nearby airport and we have vision systems like the falcon eye already in operation.

        So I don’t get the hype behind dragobfly, great development thou.

        Even if what airbus is developing is a more evolved vision system it is still leveraging already existing tech that has been available for years.

        At the end of the day Boeing is Boeing and Airbus is Airbus, so to each it’s own

        • On a similar note: the truss braced wind has been around since 1953 (actually, 1948)…thanks to French manufacturer Hurel-Dubois…

          Aviation Week: “Gallery: A Timeline Of The Truss-Braced Wing”

          https://aviationweek.com/TBWTimeline

          To paraphrase you:
          “Even if what Boeing is developing is a more evolved TBW it is still leveraging already existing tech that has been available for years.”

          • Could a truss based wing with open rotors be the next big thing?

          • @ Frank
            Of course it might — or it might not.
            But where will BA find the money for such a new program?
            That having been said: we are talking about the 2035 timeframe here…

        • Funny, braced wings go back to the dawn of aviation.

          Many truss braced mono planes. Cessna most famous these days. A low cost solution for wings for lower cost aircraft.

          You have to understand the tech issues to understand TBW.

          We are not talking about speeds under 200 mph. We are talking about higher sub sonic. And then flutter rears its ugly head and has since early age in aviation.

          Aerodynamic have reached a plateau, a MAX is as efficient as an A320. Because the MAX has a newer wing (fuselages are tubes). There is a reason a car has 4 tires and front engines.

          Ergo, TBW lets you have a long thing light wing at high speeds. Just because it looks like an old strut does not mean it is. New application for older tech.

          Those long thing wings on 787/A350/777X come at a price of engineering and having to restrict them from ideal due to flutter (and the original jet wings had to design around that).

          Give credit to Airbus for the first steps into longer thinner wings, Boeing ran with it with CRFP and Airbus followed Boeing (BBD gets credit recognizing the benefits. )

          If it works there is nothing wrong with a TBW. Check your prejudices at the door, in engineering its what works that counts.

          • ” … a MAX is as efficient as an A320.”

            Let me remind you how much of it is because the 737 fuselage from the 60s design can’t meet the same 16g body crashworthiness requirement as its competitors

  12. Airdoc

    Bear the consequences of your serious remarques.
    What world do you live in? lol!

    Dare to say that Boeing’s TBW is little by calling it ineffective in the face of a concept that would be Embraer has consequences.

    Studies have been going on for a decade and several rounds in wind tunnels have been carried out by NASA…

    Who’s the troll and who ises sarcasm ?
    —–
    Airdoc,

    “…but there’s data out there on incapacitated pilots. Just research that if you know how…”
    —-
    Lol!

    Gadgets have no mpact on the civil aviation market.

  13. Let’s not forget: after yesterday’s miserable financial results, BA gets arraigned in a Texas courtroom today!

    On that subject, Dave says:
    “My reaction to the families is always the same. Just nothing but heartbreak. I think we all can imagine how tough and difficult that would be. Any and every hearing they want to express those views is ok with me,” said Calhoun. “And it’s a good reminder to our whole Boeing franchise, our company, our industry, how important safety is for all of us and to continue to get ahead of it. And that’s how we think about it. With respect to the legal proceeding itself that’s not a subject I’m qualified to talk about.”

    Yes, Dave must be truly heartbroken, seeing as he was heavily involved in the MAX program prior to the accidents. And I imagine that heartbreak isn’t the only emotion he’s experiencing, now that the heat is being turned up again.

    https://www.nbcdfw.com/news/local/boeing-to-be-arraigned-on-federal-crime-charges-in-fort-worth-thursday/3178993/

    • More on this subject:

      Fortune: “The families of Boeing crash victims are going to court seeking justice for ‘the deadliest corporate crime in U.S. history’”

      “In a brief filed Wednesday, lawyers for the families accused Boeing of committing “the deadliest corporate crime in U.S. history.”

      “The family members were never consulted before Boeing cut a deal with the U.S. Justice Department to avoid prosecution on a felony charge of fraud. Up to a dozen or so people from several countries are expected to testify about how the loss of loved ones has affected them.

      “There will be two main phases to the arraignment: Boeing will enter a plea, and then relatives of the passengers will ask the court to impose conditions on Boeing much as it would on any criminal defendant.

      “The families said in a filing Wednesday those conditions should include a court-picked monitor to evaluate whether Boeing is creating a culture of safety and ethics — as it promised the government — and that its steps to do so be made public.”

      “U.S. District Judge Reed O’Connor ordered Boeing to be arraigned after finding that the Justice Department violated a victims-rights law by not telling the families about secret negotiations with Boeing. He has not ruled on a separate issue of whether Boeing should lose its immunity from prosecution.

      “Paul Cassell, a lawyer representing the families, said he hopes Thursday’s testimony by relatives will convince the Justice Department to throw out the settlement.”

      https://fortune.com/2023/01/26/boeing-arraignment-737-max-families-victims-deadliest-corporate-crime-history/

  14. Regarding the planned 737 production rate:

    FG:
    “Boeing expects to deliver between 30 and 40 737s monthly in 2023 – and where it falls in that range will depend largely on its ability to fix supply and labour issues.”

    On the other hand:
    “CFO Brian West said on the call that Boeing still has about 250 previously grounded Maxes in inventory, of which 138 are for Chinese customers. He said he expects most of those will be delivered by the end of next year.”

    Depending on what’s meant by “most”, this means that BA expects to deliver about 20 MAXs per month from inventory — which thus leaves only about 10-20 planes per month from the line.
    And we know that BA makes basically no money on inventory deliveries — so 2023 is going to be a very meager year in terms of 737 earnings.

    https://www.flightglobal.com/airframers/boeing-still-coping-with-unstable-737-delivery-pace/151794.article

    https://www.kentucky.com/news/business/article271660057.html

      • Some commenters confuse past en future…what applied last year doesn’t have to apply this year 😉

        You think that 3 MAXs can’t do 260 flights in a month? That’s less than 3 flights per frame per day…Ryanair does more than that per 737.

        • Whats wrong with 3 longer flights per day .

          China is a big country didnt you know.

          Ryan is a shorthaul business , very short mostly

          • Nothing wrong with 3 flights per day. My point was that your “260 flights in a month” can easily be done with the 3 MAXs currently flying within China…surely you grasped that?

            Ryanair does almost 3 THOUSAND flights per day with its 570 planes.

          • Bryce:

            Thank you for the laugh. There are close to 100 MAX in China and as they pull them out of storage and the updates are done, wallah, they too can fly like a flock of birds.

            We are well past the Solar system revolves around the sun, the Earth is flat and you will fall off the edge.

          • CNY has passed. Any evidence that airlines in China has reactivated more than three MAXs? 🤔

            What do those flight tracking sites say???

        • I wonder how much BA’s gush of FCF comes from PDP of aircraft that are behind delivery/production schedule

          -> “Southwest was short 46 737 Maxes of its contractual deliveries from Boeing in 2022, CFO Tammy Romo says.

          The airline does not expect Boeing to catch up on Max deliveries in 2023 (ie, another year short on deliveries), she added.
          https://mobile.twitter.com/ByERussell/status/1618670065137684483

      • Just checked Planespotters again for you, dear: still only 3 MAXs active within China (China Southern) — every other MAX in China is currently labelled as being “parked”.

        P.s. Ryanair does an average of 4.94 flights per day with each of its 737s.

        • You will be eating your words again soon enough throughout the year, just like last year…Enjoy

          your quick response shows Im still living rent free inside your head

          • On the contrary, I was looking at some other excellent comments here — when I noticed your chaff among the wheat 🙈

            On the subject of eating words: how’s that ABC retraction coming along?

        • From the earnings call, there were 60 revenue flights in January, and 220 scheduled for February. Boeing is postured to facilitate complete RTS in China, as they are the last airlines to comply. But as always, the rate depends on the Chinese. That aspect has never been a Boeing issue.

          • > Boeing is postured to facilitate complete RTS in China, as they are the last airlines to comply. <

            Interesting phrasing. I especially enjoyed "comply" in that context:
            to whom are the Chinese "complying", in that commenter's estimation, and by what authority?

            We'll see how it all goes in the fullness of time.

          • Wow! 60 revenue flights in January!

            Ryanair does 2850 revenue flights per day!
            But, then again: it’s utilizing more than 3 aircraft…😉

          • @Rob

            Lufthansa’s first reactivated A380 has flown out of Frankfurt for maintenance to be ready for passenger service *in the summer*.

            This is how long it takes. Any idea how many 737 MAX’S has gotten out of storage in China?

  15. For new aircraft development, it seems Boeing is first setting targets, requirements, that they know are unrealistic or uncertain, and then hide behind them. For years.

    A strong leadership would look honestly at the current portfolio, set a point on the horizon and accept uncertainty with open arms. Because they know their people & supply chain will pick up the challenges, excel & solve.

    Boeing should burry “first fully understanding what the market needs”, “deliberately evaluating before..” and “happy with where we stand today” perception management.

    And then kill the executive bonussystem that indirectly rewards “giving back” free cash flow and avoiding investment. It drains the company.

    • keesje:

      I agree with you but Calhoun clearly wields the future possibles as a fig leaf to avoid doing anything.

      But he is gone in the near future and then we have to see what Boeing does for a CEO and the future.

      A good question is if Boeing came out with a modern single aisle (composite wing and the best fuselage they could come up with) Airbus counters with a composite wing and matches Boeing.

      Boeing should have done at least an updated single aisle two generations ago, now?

      The only space I see Boeing would have a clear advantage is a 767 replacement. But I also do not know if there is enough market there for a 12 Billion Plus cost.

      Boeing nailed the 787 market, I don’t know if they have that same ability now.

      As they say over here, Painted into a corner (aka from Tom Sawyer/ Mark Twain).

      Some of this is ramp up speed. Can Boeing ramp up faster than Airbus?

      While the sales market share in single aisle has shifted, the flying part favors Airbus slightly (55-45?).

      Airbus can only take market with production (if they ramp up to 70 and Boeing is at 50, then yes)

      Boeing has the MAX 10 and while its got some issues with performance hot and high, it meets most of the A321 market segment. I believe that factored into Alaska Airline decision to divest of the A321. For their ops they can get a MAX that slots in.

      There is reported progress on the 777X front. Not its not an full answer but getting the 3 programs working finally is a step.

      If I was CEO with the mess Boeing is in, I am not sure I would come out with a new product now. That does not mean Calhoun is fit to clean a chicken coop let alone lead Boeing.

    • Yep, the usual, I predicted that. Mad scramble, all hands on deck, all hands get exhausted and things slowly resume.

      • No, it’s due to supply chain issues, as well as the holiday break. Boeing has transferred around 30 787 aircraft from storage to the rework lines, since the beginning of December.

        Also they have been setting up for another rework line after the last 747 was delivered.

        Calhoun said they are moving people around between the lines, as work permits. Same thing on the 737, which also now has a separate line for RTS.

        • None of which changes the fact that only 2 787s have been delivered so far this year.

  16. Boeing is sitting on a gold mine. The problem is that the price of its gold has decreased below production cost. In other words its margin on most aircraft sold is thin or non existent, when not negative. There are two reasons fort that:

    1- Many aircraft were sold with a very substantial discount because Boeing wanted to retain its share of the market during a difficult period.

    2- Productivity is quite low at the moment for a number of reasons and that means its costs are going up at the same time its revenues are going down.

    Still, because it is in a duopoly Boeing will survive this over the long term when its business model will have found a new equilibrium. However, before this happens its share of the market will likely have diminished considerably compared to what it is today, and that is especially true for the narrowbody market.

    • In fact, Boeing stated in the earnings call that they have positive margins on both 737 and 787. And that these will increase over time as overhead pressures subside. Calhoun stressed that there had been pricing discipline from both Airbus and Boeing during the last several years, which has held the line on profitability.

      • “In fact, Boeing stated in the earnings call that they have positive margins on both 737 and 787. ”

        https://s2.q4cdn.com/661678649/files/doc_financials/2022/q4/4Q22-Press-Release.pdf

        Ok – I’ll play.

        Above are the BA financials. In Q4/22 they delivered 152 aircraft. (Pg 11)

        737 – 110
        747 – 2
        767 – 12
        777 – 6
        787 – 22

        Back up to page 3 – Segment results:

        Revenues $9,224
        Loss from Operations ($626)
        Operating Margin (6.8) %

        So you’re telling me, that since BA has positive margins on the 737 & 787, that those 20 other aircraft they delivered – caused them to lose $626 million? Including the 6 gravy train legacy 777’s? They averaged a $31.3 million loss on each?

        Also – wouldn’t the 12 – 767’s (I’m guessing that most were tankers for the military) fall under the Defense segment numbers, because they cut the deal and get the revenue for them.

        If not and they were freighters, they should also be pure gravy.

        I’m not sure I’m buying that…

        • You are presuming as always, that your analysis is correct while the Boeing analysis is incorrect.

          But over time, your analysis and predictions have been reliably incorrect while the Boeing guidance has been fairly accurate.

          The truth is, you can massage the numbers to get whatever result you wish. I’ve pointed how dozens of times here, that this is the method being used. You begin with the outcome you want, and then build the numerical case for it.

          But that is not how the real world works, just the comment section at Leeham. There’s a reason why most if the predictions here end up being wrong.

          • Tranalation: you can’t read/understand the numbers, so you just believe the PR instead.

          • ‘You are presuming as always, that your analysis is correct while the Boeing analysis is incorrect.’

            Boeing would never lie, would they?

            Instead of attacking the messenger – could you please answer the question, no matter how unpalatable it may be to you.

            You made the claim that BCA had positive margins on the 737 & 787 programs. If so, this means that those other 3 programs dragged Commercial into an operating loss to the tune of $626 million.

            I’m sorry you don’t like question.

          • @Frank

            Two days further now and still no reply from Robbie…
            He evidently found your question either unpalatable or too complicated…or both 😉

          • @Bryce

            ” …. while the Boeing guidance has been fairly accurate.”

            Didn’t BA openly say they can deliver *500* NB passenger aircraft at the beginning of 2022??

            Must be a fairly loose definition of accurate, how low can our poster go further?
            No wonder BA pushed FAA to resume 787 delivery based on inspections of three recently completed aircraft; 🤣 how hard BA’s PR pushed the narrative how “tiny” the manufacturing defects around the fuselage joints are and,
            the repeated failures of its moon rocket engines.

            Makes me think there’s no wrong answer from BA, in the eyes of our poster above.

        • And that was without one-off writedowns.
          Remember: lots of people will believe hype before they’ll pore through an earnings release.

          • The 10-Q is not up on the BA website yet. This is the doc to pour through, as you know.

    • Normand:

      The 787 is a mature program. They are well past the super discounts.

      The single aisle always has been dog eat dog.

      I don’t buy it.

      You are as blazes do not want to fail like Boeing management has in program execution let alone the tragedy of the two crashes of the MAX.

      Obviously the failure in the MAX and 787 are bad and costly.

      How many airlines were happy to defer 787 delivery during the Covid debacle? How many MAX customers were happy.

      Of course now everyone wants aircraft (well until they don’t)

      There is a reason Boeing has not sold the Chinese MAX aircraft.

      • Calhoun said in the earnings call that not all Chinese stored MAX remarketing are paused, they already have deals in the works for some of them. Boeing will move them if the Chinese don’t take them.

        • “Boeing will move them if the Chinese don’t take them.”

          Sure they will — but at a loss 😉
          And only to bargain hunters / bottom feeders.
          And not very quickly, either.

  17. Tintin,

    …”Revolutionary wing design that was used on a French aircraft 70 years ago you mean?…”
    —-

    Very debatable, the Boeing model has an CFRP ultra- long and thin wing compared to that of Hurel-Dubois and the empennages are very different from each other.

    The CFRP ultra-long and thin wing is a bias of Boeing,
    see the 777-X CFRP long and folding wing.

    As for the fuselage, it would borrow something more modern like a 737 or MD80/90 cross section…

    And,

    Bryce,

    To paraphrase you:
    “Even if what Boeing is developing is a more evolved TBW it is still leveraging already existing tech that has been available for years.”
    —–
    And no, you are confusing
    “configuration”, “material”, and
    “technology”

    Three completely different things that go hand in hand.

    In terms of configuration, it’s quite similar, while the empennages and the fuselages are different.

    The CFRP material makes the wing much thinner from the wing-fuselage joint.

    In addition Boeing alludes to the open rotor engine as an easily integrated engine option.

    There was a lot of work out there…

    • HD.31 had an aspect ratio of 20.2 to 1 , so was ultra thin over a nearly 150 ft wing span. Its was quite a low speed plane with cruise speed 150 kts while the Boeing will be normal airliner speed ( hopefully)

      Some say (AW) ,the Boeing TTBW demonstrator will be around AR 19.6 and a span of 170 ft

      • > while the Boeing [Truss-Braced Wing] will be normal airliner speed ( hopefully) <

        I'm quite curious about that. At first glance, a TBW would seem to require a much lower
        cruising speed, lessening its net improvement in efficiency. And then there's Jevon's Paradox..
        I am not an engineer, though.

        • The extra T in TTBW is for transonic which is the normal airliner speed range.
          That’s what’s really different to the HD.31 and is the hard part of the development . Carbon fiber can do many things but it’s not a miracle when it comes to wings

  18. Just in passing, here is an article on the statement from the NTSB Chair on the ET302 accident report. EAIB engaged in an unprecedented violation of ICAO rules for international accident investigations.

    This is what triggered the NTSB and BEA to release separate public statements highlighting the falsehoods and omissions in the report.

    NTSB also issued a second round of corrections after further scrutiny of the report. It falsely claimed that the airline did not know of the flaps requirement for MCSA activation. On fact Boeing had alerted the airline within a week of the Lion Air accident.

    And falsely claimed that the Boeing, FAA, and NTSB had withheld information on the “Invalid Air Data” fault tree. In fact. EAIB disagreed with that data and ignored it, but it was substantiated by the FAA as compliant with certification standards.

    https://www.reuters.com/world/us/us-safety-board-chair-rebukes-ethiopia-over-boeing-737-max-report-2023-01-25/

    • Rob:

      Its a complex story and you ignore the lack of realistic manual trim that was in the NG Simulators.

      If MCAS was not so messed up, none of this would have happened.

      Failure or deliberate, Boeing and the FAA let the MCAS portion become lethal.

      A written warning is not what it takes to deal with something like MCAS.

      There clearly was failures in not getting a full stop, programing the simulators to at least mimic MCAS if not the full MAX cockpit layout.

      There was more than enough there to ground the MAX until training and simulators were ready for it.

      Yes there were factors that Ethiopia glossed over, but the simple fact is, without MCAS 1.0 there would not have been those two crashes. Pilots should not have to overcome the failures of people to design and implement safe control systems.

      Sometimes they do, but you roll the dice and in two cases the dice camp up the wrong way and you don’t mess with peoples lives that way (the rest of the world is bad enough to deal with)

      • None of that was disputed by the NTSB or the BEA. The point was that without an examination of the pilot contributions to the accident, the accident risk is not mitigated.

        These pilots failed at the most basic elements of airmanship, and the airlines failed the pilots by not providing them with sufficient training, or ensuring they understood the JT610 accident.

        Remember there is a reason why the report goes out of it’s way to misrepresent facts about the accident sequence and the information available. The purpose of that is to avoid any responsibility or accountability on the part of the Ethiopians. That is what creates future risk.

        NTSB and BEA are correct and perfectly justified in pointing that out.

        • Rob:

          I am not disagreeing with that. But the fact is, sans MCAS 1.0, there would not have been THOSE two crashes.

          The pilots failed not a basic flying, they failed because they were not trained for what happened. You don’t get Sully on each flight.

          I fully agree Indonesian and Ethiopian training standards and the first officer slot are really really bad.

          You clearly have no idea what happens to your mind when an aircraft no longer does what you were trained for. Your mind locks up.

          If you are lucky like I am, your mind recovers and comes up with the right answer.

          You do not and should not expect pilots to make up for fatal setup on an aircraft.

          You also ignore the other issue in that the Trim Wheel response was all wrong. So you tell me, what do you do if you step on your brakes and there is nothing there?

          In fact I trained my wife on exactly that and she did as she was instructed. She is unusual , she grew up on a farm operating equipment and she understood what I was telling her.

          The system failed the pilots, the pilots did not fail as they were undermined.

          Pilot training needs to be improved in the rest of the world like it is in the US.

          Asiana 777 crash in SFO proved more than amply a group of well trained pilots can also fail as have many other crashes and incidents.

          There is a cover up of why the Flight Simulators of the NG era had the real response of the Manual Trim wheel under load eliminated.

          All of them. Source of flight data is from Boeing for all of them.

          • Equally true, sans pilot error, there would not have been those two crashes.

            Acknowledging both is essential to dealing with the problem and reducing future risk.

            It doesn’t matter how much this is denied or by whom. The risk still remains, which is why NTSB and BEA are involved.

          • @ Rob

            There was no “pilot error”: BA has officially declared so.

        • ‘ not providing them with sufficient training”

          Boeing even didnt know the full details of how the MCAS system worked in practice , avoided telling the airlines lesser detail and didnt give the pilots anything but a passing reference that the system even existed.

          It was not an *airline training failure * , and all accidents involve some pilot slip ups as they are people not robots

          • Boeing did provide information to Ethiopian about MCAS, after the Lion Air accident. That is documented in the NTSB corrections.

            According to both NTSB and BEA, Ethiopian pilots had the mandatory bulletins pushed to their notebook devices, but no means of verification as to whether they had been read. There is nothing in the record to indicate the pilots identified the issue when it began. This was a failure of the airline.

            Then the pilot response to the issues was incorrect from the very first action. Even without MCAS being a factor, there are serious concerns about CRM, training and procedures.

            Ethiopia has done it’s best to sweep this under the rug, but it remains a significant risk. Which is why NTSB and BEA have spoken up.

          • @ Rob

            “Then the pilot response to the issues was incorrect from the very first action”

            BA has officially declared that the pilots were without blame…

          • No, Bryce, this another of your false equivalences. Boeing agreed to make no claim against Ethiopian, so ad to consolidate the cases.

            There would be no need for such an agreement if Ethiopian had no liability. It was only necessary because they did.

            This is further substantiated by the NTSB and BEA responses, which were necessary due to the false statements and omissions in the Ethiopian report.

            But you go on selecting only the facts that support your falsehoods. It wouldn’t be Leeham without you doing that.

          • No, Rob.
            Boeing officially declared that the pilots were blameless — in an official, published court document.

            Just because it’s inconvenient for your damage-control narrative doesn’t mean that it isn’t true.

            Try harder 😉

          • The facts are what they are. You can twist them to make a false point, but outside a small group participating in the alternate reality here, it has no meaning in the wider world.

            If you want to argue with NTSB and BEA based on your reasoning, be my guest.

          • The facts are what they are. You can twist them to make a false point, but outside a small group participating in the alternate reality here, it has no meaning in the wider world.

            If you want to argue with Boeing’s formal declaration based on your reasoning, be my guest.

  19. Interesting that Calhoun pushed back on the argument on prices, from one of the analysts. In essence both OEMs were holding a little firmer on prices post COVID.

    • Number don’t lie

      Loss from Operations ($626) on 152 aircraft delivered.

      They even explain it in black and white, just underneath it:

      ‘Commercial Airplanes fourth-quarter revenue increased to $9.2 billion driven by higher 737 and 787 deliveries, partially offset by 787 customer considerations. Operating margin of (6.8) percent also reflects
      abnormal costs and period expenses, including research and development.’

      Customer considerations…

  20. Looks like only half of the mega Air India order will be finalized tomorrow …
    According to Reuters ,the Boeing part of the deal will be announced tomorrow, while AB will have to wait a few weeks..!!!

    • @TC

      Interesting, rumor was the Boeing part was held up because of CFM playing hardball.

      So Tata has a price in mind and Airbus has not matched it yet. Good for Tata, Airbus is not going to walk away and Tata knows it.

    • What happened to your “crystal ball”?? 🙄 Did I miss the big announcement? Where have all the journalists gone???

      • Two days have now passed…and no order announced.
        It seems the rumor started because a flight tracker caught a BA corporate BBJ flying to a destination in India — this was then “interpreted” as an indication of an impending order announcement.
        Seems more likely to be a BA official going to discuss pricing/terms — and/or to tell TATA that the ex-China Southern whitetails are now off the table. Who knows?

  21. He’s back out of the woodwork, so things must be desperate again!
    No wonder: miserable earnings report (again) plus arraignment in Texas = major damage control necessary.

    Step 1: resort to pilot-blaming.
    Step 2: deny the content of the earnings report.

    Same old tune…

    • Settling yourself up to get wacked by your crystal ball again ?
      It’s so sad

      • On the subject of “setting yourself up”:
        The world is still waiting for that ABC retraction that you so fervently promised us — it’s been 7 months now. Still no sign of it? 😉

        ***

        On the subject of reading comprehension:
        Since no part of my comment above relates to the future, why is it relevant to talk about crystal balls? Temporal confusion?

        ***

        Nothing substantive to say?
        Go on — give it a try! Try reading BA’s financial results and see if you can make one or more correct statements about them 😉

    • Arraignment hearing in Texas was to resolve the families complaint, that the DoJ submitted the Boeing indictment and DPA at the same time, thus precluding the hearing where the families would be able to speak.

      Thus Judge O’Connor granted the hearing and the families spoke, which is their due. They also requested greater access and oversight of Boeing compliance with the DPA, which the judge may grant.

      But that is the extent of what will happen. So your crystal ball will be broken yet again.

      • Arraignment hearing was to arraign Boeing.
        That’s why it’s called an arraignment.

        • And Boeing plead not guilty, which standard procedure at an arraignment, and is consistent with the DPA.

          The hearing doesn’t alter the DPA. The families told their stories, but presented no new evidence.

          In their court filings, the families only requested increased oversight. So that is the most that can happen.

          • The plea doesn’t change the charge: Boeing was formally charged with a federal felony.

            The judge has yet to rule on binning the DPA.

            There’s LOTS that can still happen — even though that would be very inconvenient to the damage-control narrative 😉

          • Ok, the faulty crystal ball at work again. I’ll wait to see the outcome, thanks.

            The judge cannot overrun the DPA without evidence, and even if he did, that wouldn’t survive an appeal, by both Boeing and the DoJ.

          • No crystal ball, Robbie — just stating simple, straightforward facts.

            Very inconvenient to your damage control narrative — but you’ll just have to live with that.

          • The judicial process runs its course.

            Just like this other criminal arraignment just 3 months back !

            “The Paris Criminal Court this week started hearing a potential landmark case in which *Airbus* and *Air France* stand accused of *involuntary manslaughter* for the deaths of 228 passengers and crew aboard an A330 that crashed into the Atlantic Ocean en route from Rio de Janeiro to the French capital on June 1, 2009…”
            https://www.ainonline.com/aviation-news/air-transport/2022-10-11/airbus-and-air-france-deny-criminal-manslaughter-charges

            What say you now , car boot lawyer ?

          • @ DoU
            Why are you suddenly calling Rob a “car boot lawyer” in your reply to his post?
            Aren’t you two (supposed to be) chummy?

          • Its you, Bryce who were the self proclaimed legal ( and financial) expert

            And what about the* criminal trial* for manslaughter for Airbus over a plane crash- with those amazing technologies such as FBW and EICAS.
            Its an actual trial underway , not some ‘arraignment’ – which could go nowhere
            “No individual executives or managers are standing trial, but Guillaume Faury, the chief executive for Airbus, and Anne Rigail, the chief executive for Air France — neither of whom were in their current positions at the time of the crash — *stood still on the stand* on Monday as the presiding judge read the names of the 228 passengers and crew members, one by one.’
            https://www.nytimes.com/2022/10/10/world/europe/airbus-france-plane-crash-trial.html
            In the dock !

            Was the development rushed on the A330 and some thing missed . Is 3 AOA sensors enough , why not 5

            If this was the ‘other manufacturer’ in a live trail for manslaughter you would have been flapping your wings and running round the henhouse for months , but are strangely silent
            What say you now car boot lawyer

      • Rob,

        “…But that is the extent of what will happen. So your crystal ball will be broken yet again….”
        —-
        I call it “wishful thinking”…

  22. So I’m waiting for Boeing to release the 10-Q to have a look-see into the details of the last quarter, but here is an observation;

    These are the press releases for the past few years, with results from 2017 to 2022 among them:

    https://s2.q4cdn.com/661678649/files/doc_financials/2022/q4/4Q22-Press-Release.pdf

    https://s2.q4cdn.com/661678649/files/doc_financials/2020/q4/4Q20-Press-Release.pdf

    https://s2.q4cdn.com/661678649/files/doc_financials/quarterly/2018/q4/4Q18-Earnings-Release.pdf

    (you can get the current and previous years info on one release)

    Here are the delivery numbers and associated earnings from operations at BCA for each year:

    2018 2017

    806 763

    $7,879 $5,452

    ————————

    2020 2019

    157 380

    ($13,847) ($6,657)

    —————————-

    2022 2021

    480 340

    ($2,370) ($6,475)

    ————————-

    Keeping in mind that, as a whole, BA has been saddled with an extra ~$2.5 billion in interest payments (actually a bit less, as they paid $360 and $475 million in 2017 & 2018 in interest expense) so call it about an extra $2 billion in interest;

    How many deliveries does BCA need to make to get back into the black?

    600? 700?

    • Such matters/questions are inconvenient to those who have convinced themselves that all is well at BA: they don’t want to know about reality — nice, warm, comforting PR is much more palitable.

      “Prosperity is just around the corner”

      • “It’s difficult to get a man to understand something when his
        salary depends on his not understanding it.”
        -Upton Sinclair

        It is interesting that that gentleman is back to Explain Things
        just now. #sponsoredcontent

    • As they have repeatedly stated, they will have abnormal costs until the 787 and 737 inventories are cleared, at the end of 2024. But they have positive margins on both, based on production costs.

      As well as steady orders flowing in for both models. As well as both the MAX-7 and MAX-10 entering service by then. As well as the 777x entering service the year after.

      As I mentioned, you can consider only those facts which make your case, or you can consider the facts in total. The former is a staple of the comment section here, which is why the predictions turn out wrong so often

      • Maybe Rob can remind us how many 737MAXes Boing claimed
        they would deliver in 2022, v actual deliveries of same.

        • Well, that commenter also “predicted” back in summer 2020 that MAX re-cert in China was impending — because some BA officials had been spotted at a hotel near the CAAC.
          Gosh, that one was accurate 😉

          Some people can’t deconvolute the concepts of “prognosis” and “desire”…

      • “But they have positive margins on both, based on production costs.”

        Nope that’s not what it’s said. Re-read the transcript!

      • “But they have positive margins on both, based on production costs. ”

        If even that.
        Probably production cost as planned with zero hickups
        and all the Alice in Wonderland hidden nooks employed. “Bizarre” seems to be a well fitting descriptive tag for Boeing accounting in general.

        Your rhetoric style reminds me of a select German judge some 80 years ago. In a way a precursor to Judge Dredd.

        • I think I know which German judge you may be referring to.
          Very apt comparison 😉

          From Vocabulary.com
          “Grandiloquence is a type of talk that is pompous and bombastic, full of pretty-sounding words and elegant turns of phrase that add up to nothing. Politicians who say nothing but make it sound important are masters of grandiloquence.”

      • Time rewind
        March 2022 ALC chairman Udvar-Hazy:
        – Boeing did not “fully understand” that airlines were migrating to larger average-size aircraft;
        – The 737 Max 10 is not as effective in “its overall versatility, performance capacity and passenger appeal as the A321. That’s just the bottom line.”
        – The writing is on the wall
        – called a summer resumption of [787] deliveries “optimistic”

    • @ Frank

      I’ll give your question an answer.
      From various sources, we now know that the *nominal* unit margin on a 737 or 787 is of the order of $10M … which assumes a “standard” industry discount of 50%, but also assumes a good production rate. On that basis, BA would need to deliver 260 frames just to cover interest repayments — other costs still have to be covered.

      However, when discounts get higher — as they have been doing of late — then a much higher number of frames is needed to break even. In an extreme case, when discounts reach 65% — as they have been doing recently — unit margin essentially goes to zero; under such circumstances, no number of deliveries will cover costs.

      The situation worsens even further when you factor in the sub-optimal line rates for both the 737 and 787, and also the proportion of (loss-making) inventory frames in the mix.

      In Q4, 154 deliveries resulted in a loss of $620M — that corresponds to 616 deliveries on an annual basis. So, even with more than 600 deliveries in 2023, BCA will *still* make a loss — and a hefty one at that.

      • This, as always, is asking that a simplistic assessment based on partial facts and flawed reasoning, be accepted over the properly vetted and professional Boeing analysis. Which has been scrutinized by expert analysts all over the world, without arriving at your conclusion.

        I’d say you can’t be serious, but unfortunately from long experience, I know you are.

        • This, as always, is asking that a detailed assessment based on published facts and sound reasoning, be accepted over the cooked and manipulated Boeing analysis. Which is being scrutinized by expert analysts all over the world, who are arriving at my conclusion.

          I’d say you can’t be serious, but unfortunately from long experience, I know you are.

  23. Rob,

    …”Equally true, sans pilot error, there would not have been those two crashes….”
    ——
    Absolutly right!
    Solid point
    Thanks for the link👍

    • Except that there was no pilot error — Boeing explicitly conceded that 😏

      “Solid point”

  24. Rob

    …” As they have repeatedly stated, they will have abnormal costs until the 787 and 737 inventories are cleared, at the end of 2024. But they have positive margins on both, based on production costs…”
    —-

    This is true, moreover I have said several times that 2022 would be better than 2021, and 2023 better than 2022… There was certainly a cash flow as expected and it should continue. No one here said that Boeing will be debt free. They will be for years to come. But some here like controversy and blacken the picture of Boeing …

    • “I have said several times that 2022 would be better than 2021”

      BA’s loss in 2022 ($5.1B) was larger than its loss in 2021 ($4.3B).
      Strange definition of “better” 😏

  25. Brice,

    …”Except that there was no pilot error — Boeing explicitly conceded that 😏”…

    It might also be time for the pilots to ADMIT their mistakes TOO… But should they also be made to confess?… 😏

  26. Bit difficult for dead pilots to admit to something…or do you foresee them rising from the grave?

    • Like the China 787-800 crash, its on on the DRs

      In the case of the MAX that has been released, in the case of the -800, its is not being released.

      • The CVR is unreadable — forgotten that again?
        The rumors regarding the FDR data are inconclusive as regards ultimate cause.
        But you raise a valid point: more dead 737 pilots…becoming somewhat of a pattern.

        • …This does not mean either that “de facto” there are more deaths on the 737. If the CVR is not readable for all that…

          Another bias?

  27. Bryce

    …”BA’s loss in 2022 ($5.1B) was larger than its loss in 2021 ($4.3B).
    Strange definition of “better” 😏

    —-+

    One better year than the other in terms of cash flow. Yet I repeated that like a Mantra…

    Cash flow should solve everything…

    Also expect that Airbus would have expenses for the difficulties in the program of Bombardier A220 ex CSeries …

    • Cashflow from one-off juggling of expenditures and receipts — catches up with you at a later date (e.g. Q1 2023) 😏

      @NdB’s comment above explains the concept for you.

      • Not when your cash flow is positive and growing quarter by quarter. was If it doesnt happen you *could* be right.
        2022 Q1 -$2.5 mill Q2 -$182 mill Q3 +2.9 bill Q4 +$3.1 bill

        But I wont , so I suggest you duck when your crystal ball of doom smacks you in the face again and again.

        • But how much is BA’s forecast for this year’s FCF? Where’s the “growth”?? Tricks and gimmicks can’t sustain more “growth”?? 🤣

        • @ DoU
          Instead of talking about crystal balls, you might instead take the time to examine and understand the *origin* of the cash flow to which you’re constantly alluding.
          Here’s a hint: BA itself told you what the origin is…does that help?

          • @Bryce

            I found it interesting that our poster is either incompetent or blatantly fudging the numbers:

            BA 2022
            Q1 FCF *outflow* $3.6 billion

          • @Pedro: Watch it. Reader Comment rules do not allow insulting other posters.

            Hamilton

    • yes checklist
      The ‘crew’ never mention Airbus/Air France current criminal trial under way for last 3 months or so in Paris
      the CEO’s had to stand in the dock at start of trial even though they arent charged personally and werent in charge at time of the crash

      Who knew that planes with FBW and EICAS could have serious faults and/or pilot training was inadequate

      And this sounds familiar
      ‘Prosecutors initially dropped charges against the companies in 2019 in a decision that infuriated victims’ families at the time.
      A Paris appeals court overturned this decision in 2021 and ordered the trial to go ahead. ‘

  28. Bryce,

    …”Bit difficult for dead pilots to admit to something…or do you foresee them rising from the grave?…”
    —–
    No more difficult to ask the pilot of the A320 of Air Inter or that of India in 1990 and 1992… Or the crash of the A330 in Toulouse during the tests in 1993.

    That’s a lot of pilots don’t you think? 😏

    • Bryce,

      …”Cashflow from one-off juggling of expenditures and receipts — catches up with you at a later date (e.g. Q1 2023) …”
      —-
      Lol! How is that noticeable? Where are your proofs?
      Hilarious !…

      • It’s discussed at length above.
        And it’s even explicitly stated in the Boeing earnings release — which you evidently haven’t actually read 😉

        Surely your machine translator can provide a copy in French for you?

    • Who’s “trying to make you believe” anything?
      You can believe what you want — and you certainly won’t be alone, because there are several others here with their heads firmly in the sand 😉

      The discussion is simply too advanced for some 😉

      • I have no doubt
        -> “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

  29. FG: “Airbus long-haul activity picked up slightly in the closing weeks of last year, with the airframer recording an order for four A350 freighters from an undisclosed customer. It also booked 10 A330neos from lessor Avolon and a pair of A350-900s from a client identified simply as ‘financial institutions’ during December

  30. Some interesting analysis of BCA’s results:
    Q3 2022: 112 deliveries and $643M loss.
    Q4 2022: 152 deliveries and $626M loss.

    So, 40 extra deliveries generated only $17M extra in earnings — that’s just $425,000 per frame.

    Similar pattern in 2021:
    Q3 2021: 85 deliveries generated $693M loss.
    Comparing to Q3 2022: 27 extra deliveries generated only $50M extra in earnings — that’s just $1.85M per frame.

    These margins are only a fraction of the $10M per-frame figure that analysts use as a nominal value…

    • Bryce,

      …”Airbus is hiring 30% more — 13,000 😉…”
      —-
      Which is pretty logical.

      The A220 is also encountering difficulties, while the 777-X and 737MAX10 are not yet produced,
      so there will still be jobs to be expected in the next 3 years.

      The 747-8/-8F program finished, the machinists should certainly go to other assembly lines.
      There are already workers on the 767F and 777F assembly lines.

      Boeing sells more widebody than Airbus, these aircraft do not have a production rate as fast as the narrowbody…

  31. Bryce,

    …”Airbus is hiring 30% more — 13,000 😉…”
    —-
    Which is pretty logical.

    The A220 is also encountering difficulties, while the 777-X and 737MAX10 are not yet produced,
    so there will still be jobs to be expected in the next 3 years.

    The 747-8/-8F program finished, the machinists should certainly go to other assembly lines.
    There are already workers on the 767F and 777F assembly lines.

    Boeing sells more widebody than Airbus, these aircraft do not have a production rate as fast as the narrowbody…

    • Nope. Don’t you know BA has made a bunch of MAX 10s??
      Doesn’t BA’s MAX also encounters “difficulties” to ramp up production?
      Don’t you know last year, BA has to paused the wing production due to “flaws” discovered??

    • “.. The A220 is _also_ encountering difficulties..”
      ROFL
      Looking at those indicates that a comparison is out of the question. Different scope, quality, quantity and cause ( internal , external )

  32. Maybe it was a very short-term contract, this time.
    I’d add “peremptory” and “supercilious”.

    • Vincent

      “…I’d add “peremptory” and “supercilious….”
      —–
      Yet some saw a more than bleak future for Boeing.
      The Boeing CEO’s announcement a few months ago after having buried any prospect of an all-new development drawing board before 2030,
      reportedly would have informed us that cash flow would be gradually returning year after year until 2026

      I repeated it like a Mantra. We had seen 2021 better than 2020, 2022, better than 2021. We will see 2023 better than 2022 and it will continue…

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