Pontifications: 30-40 MAXes potentially delayed by software issue: Jefferies

By Scott Hamilton

March 7, 2023, © Leeham News: About 30-40 Boeing 737 MAXes potentially will be delivery-delayed by the Option Section Software reconfiguration issue, the investment bank Jefferies Co. reported yesterday. Jefferies followed up on our report published Monday by Airfinance Journal and LNA.

Boeing didn’t much like our story about the new software issue delaying some deliveries of the 737 MAX. The story was joint reporting by AFJ and LNA.

“This has no impact on our [2023] delivery outlook,” a corporate communications representative emailed yesterday, specifically putting this on the record. The statement addresses a point the story didn’t raise.

“Today’s Leeham News article looks misleading in that the software issue it describes as ‘new’ has been known for over a year and isn’t expected to cause incremental delays in 737 MAX or 787 deliveries,” wrote the aerospace analyst at TD Cowen Co. “BA indicates this issue has been known for well over a year, isn’t new, was well understood at the time of their investor day and won’t cause any incremental impact to BA’s projected deliveries.”

AFJ/LNA was told by customers that the issue was discovered last Autumn, which is what we reported. One of the questions posted to Boeing included the Autumn timing. Boeing did not react to the timing outlined.

Delivery guidance wiggle room

Whether Boeing knew about this issue for a year is somewhat beside the point. AFJ/LNA are told that representations were made to lessors that reconfiguration of airplanes they bought would take a matter of weeks or at most a couple of months. Now, the lessors have been told the process could take up to a year. This was news to them. (IE, it was “new.”)

We didn’t suggest the projected deliveries for 2023 were impacted. What we wrote was that some deliveries would be delayed. Furthermore, Boeing’s guidance gives a broad range of 400-450 737 for 2023. Lots of wiggle room. The 737 NG-based P-8A Naval aircraft is included; the production rate is about one per month.

“The potential impact could be delays for 30-40 aircraft. There is no change to delivery guidance for the year,” Jefferies’ aerospace analyst wrote. There it is: “delays.”

As noted in yesterday’s article, Boeing did not answer specific questions posed, instead providing a response that is uninformative. This is a perfect example of why it’s important for companies to be forthcoming. Now Boeing is playing catch up, addressing issues that the report didn’t suggest.

358 Comments on “Pontifications: 30-40 MAXes potentially delayed by software issue: Jefferies

  1. “Boeing didn’t much like our story”

    Of course not: it caused the stock price to go down.
    That’s all that matters when a big portion of one’s compensation package is in stock.

    • Well, of course it is. Serving the best interests of the stockholders is the whole reason a publicly traded corporation exists and when the majority of the compensation of top people is based on the stock price, of course that’s what they keep in mind.

      A publicly traded corporation is not a non-profit and its leaders aren’t social justice warriors.

      • There is, however, a difference between:
        (1) Short-term pumping up of the stock price, using smoke and mirrors; versus
        (2) Long-term appreciation of the stock price, resulting from a healthy and properly-run company.

        “Certain boards” are only interested in (1)…can you think of one? 😏

      • Stockholders are owners. Owners have responsibilities to their employees, and their customers, and a need to maintain the overall health of the company. Owners should not focus solely on what they can get for the company on the auction block today.
        The owner’s best interests include building a strong healthy company that will be around for the long term.
        Managers work for the owners and must support these all these interests and responsibilities.
        There is much that affects the stock price and it is a mistake for managers to focus excessively on it.
        In fact, Boeing’s present situation is the poster child for manager’s making that mistake.

        • Jan:

          Most of us are not owners. Often its in a mix of a managed portfolio and those are managed by the Fund Managers not the people in the fund.

          Further why would a stockholder care or even know about responsibilities? Even individual stockholder have no control (other than dump it)

          And lastly, its not a mistake. Its a deliberate policy to gut Boeing and not leave anything for the future. Calhoun got 22 million for his failures.

          He should get nothing if not outright fired.

          • “Most of us are not owners”

            Anybody with a pension fund will be an owner of BA: almost every pension fund on the planet includes some amount in US Index ETFs (in addition to some EU, Asian and Emerging Market ETFs) and, since BA is in all three major US indices (Dow 30, S&P500 and Nasdaq Composite), that holding — however small — will include BA.

        • Jan’s description of how a company’s owners should behave is quite reminiscent of how Japanese companies are often set up; for a good standing in society, it’s important for Japanese companies to be socially useful, profits come second (which is still very important).

          The trouble with the way a lot of US (and British? I doubt we’re immune) companies are run is that the owners want to have at all times the option of selling up and ceasing to be an owner at a moment’s notice, for a profit.

          But it’s lazy, and self defeating. Work with a company, get in a good board, get it humming, and you can take out good profits more or less indefinitely, instead of very high profits for just one or two years. It takes real self-awareness to put “lost opportunity costs” into one’s investment numbers; not many fund managers are obliged to do that, and few are held to account for it.

          Lost opportunity cost is a figure that Boeing doesn’t seem to have been counting either. Whilst it was enjoying profits, it was not counting the cost of losing market share…

          • I posted this once before, but it looks like we have more folks here now. Stockholders are owners, but what is it that they own, and are they the exclusive owners of whatever that is?

            Stockholders have an ownership slice of the assets which is limited to those assets that are on the balance sheet. In turn, those are limited to those things that can be measured using some generally accepted accounting methodology, which when applied by two independent teams of accountants, similar values can be expected. Stockholders do not own a share of the assets that are outside of the balance sheet, or at least they do not as a result of being a shareholder. They might if they have a stake in the off-balance sheet assets.

            Currently, the holders of Boeing stock do not own anything, but rather are in a deficit position relative to the assets. Even using Boeing’s non-GAAP reporting method, this has been the situation since 2018. That said, due to a structural flaw in American business law that is rather outrageous, the shareholder debtors are still allowed to exercise governing control through their proxy votes.

            And, the incentive packages in place for the Boeing board and C-suite strongly incentivize them to not do the obvious right thing, which is to put the company in a court administered receivership. The incentive of course, is the continued liquidation of the company to generate cash to pay their salaries and bonuses.

            Because of the several structural flaws in the law regarding corporate governance, arguably the only person who has potential standing to put an end to this is Kathy Jennings, the AG of the state of Delaware. Another option would be for Congress to act and pass some legislation seizing the company using the argument that it is too important of a resource to the country to let this pillaging continue.

            But for now, it goes on. The wealth of the company is being reduced to generate cash to continue the draining away of what once was.

          • RTF, program accounting IS GAAP allowed . But Boeing gives unit and program accounting numbers as notes to its FY reports for those who care to look. Since 2015 or so its broken it down by quarters too

            What the shareholders own is the income stream to $400 bill on orders incl an extra $40 bill this year

            Plus with a current market cap of only $127 bill is is about 2x that of the $55 bill of customers deposits/ pre payments Boeing has on its books for planes not yet delivered !!
            Its listed as a liability but its free money for them to use and likely ‘unsecured advance’

            The only problem is the Market cap is ridiculously low- swings and roundabouts of over doing the share buybacks for the 2010-2020 decade

          • ” … Boeing gives unit and program accounting numbers as notes to its FY reports … ”

            Did you give out any link to BA’s “FY reports” when @Frank asked for a link? No. It’s absurd to repeat such false claim that BA gives out unit accounting in its “FY reports”.

          • @Dukeofurl No, program accounting is not GAAP. Specifically, booking R&D costs beyond a single annual reporting cycle is not allowed under GAAP. The rationale is simple if you get to a white board and draw the T accounts. If you book an asset (a debit), then you need to book a corresponding something on the right side (a credit). OK, so what is that? Is it a liability or an equity? How do you increase the equity section when no income statement transaction has occurred?

            My favorite accounting professor, Dave Boyd put it this way: “No good ever came from booking goodwill.”

            You can disguise goodwill credit items by giving them other names, but it’s still the same thing. There are perfectly good reasons for disclosing things in the footnotes that would indicate the existence of material things that can be viewed as supplements to all three major areas of a balance sheet.

            OK, if it is wrong, why did Boeing start doing it back in the 1950s? Remember that was in the APB era before FASB and PCAOB and the problems that led to each change in the ownership of the accounting principles pronouncement process.

            The 707/717 program cost about 25% of the company’s net worth at the time. And, making a dent in the Douglas grip on the commercial airplane market was seen as a dubious proposition. American was still ticked off about the 247, and the 377 was an economic disaster on the commercial side. There did seem to be a lock on the jet tanker business thanks to LeMay, but that might have only been a break-even proposition.

            So Boeing decided to ignore the rules, which was easier to do under the APB fairly loose approach to principles governance, and book the R&D costs and then write them off over the first 400 planes. It was a fairly safe bet that the Air Force would order at least that many. It worked and the company made a lot of money on it. Enough so, that it could grow the engineering workforce and have about six major R&D programs going at once (Minuteman, Saturn and Saturn V, 727, 7027, and Dyna-Soar).

            So no, booking R&D isn’t GAAP, and never was. But, Boeing did it with a wink and a nod because it worked out until the 787 program. But once the decision was made to not fund the supplier management engineering part of the 20xx program, upon which the 787 was critically dependent, the justification for booking R&D for an “accounting block” stopped being ok, and this was for exactly the reason why it wasn’t GAAP in the first place. Which gets us right back to that first question. If we book an asset for the R&D (deferred development costs or whatever you want to call it), what is the other side of the journal entry (i.e. the credit entry)?

            Now if you tell me that you would like to just write it off (the GAAP thing to do) and credit the asset to zero, and then debit the equity section by a like amount, I’ll go along with that. But, you just increased the amount that the stockholders are in debt to the company, which seems fair to me.

            So what should it be?

          • @ DoU

            “What the shareholders own is the income stream to $400 bill on orders incl an extra $40 bill this year”

            And what the shareholders have to PROVIDE are the COSTS TO MANUFACTURE that order book.
            What remains is the margin on the order book — which is only $45B.

            $45B isn’t enough to cover current debt, not to mind scheduled interest payments.

          • Actually, the shareholders do not own anything. From an accounting perspective, they are debtors, but the corporate charter may shield them from liability for their debt. If it wasn’t for the structure of the pay packages of the C-suite folks, the shareholders would have been zeroed out in a chapter 11.

            The legal problem we have, is what it takes to establish standing in court to force the issue. Normally, in companies where the leadership is more concerned with the survival of the company as opposed to continuing to liquidate it, they will be the ones to file for chapter 11. In a harvesting situation, there really isn’t any established way to prevent it by the non-accounting stakeholders. That said, a novel approach would be for the AG of the state in which the corporation is chartered to challenge the behavior. They clearly have standing since the charter is something their client (i.e. their state) has granted.

            In some ways, this is a hangover from the challenges Franklin was struggling with at the original constitutional convention. Slavery in the southern states combined with the significant differences in the size and populations of the states, tainted everything. It was all he could do to get a compromise on representation. If he had tried to lay a foundation for business law as well, the convention would have never gotten to the finish line. So we ended up with the states taking over the the role that the colonial governors had as the King’s representative when it came to issuing corporate charters.

            It’s a horribly broken system that instantly created a race to the bottom. The 1886 mess created by Morrison Waite and Bancroft Davis only made things worse.

          • GAAP R&D and deferred cost basket.

            My understanding is that R&D cost is immediate.
            But cost for the prototype frames and massive rework were associated to production cost, deferred, as those frames were tagged as merchandiseable.

            Scrapping some early frame immediately rang up a loss of $1.5++b.

          • @DoU

            No no no. That’s not what you said: “Boeing gives unit and program accounting numbers as notes to its FY reports”. Where can I find this mysterious FY report from BA that shows *both* “unit and program accounting numbers as notes”? Give me the link, I’m still waiting.

          • As a poster kept repeating this false narrative that BA shows both “unit and program accounting numbers as notes to its FY reports”, let me show this poster what happens if what this poster said comes true:

            First of all, BA’s inventory would drop by say $23 billion by zeroing out deferred production cost etc
            737 program ~$3.6 billion
            777X ~$5.1 billion
            787 ~$14.4 billion

            So by decreasing the value of assets carried on the B/S what happens to the other side?

            The answer is: the shareholders’ deficit would jump from $16 billion to roughly $40 billion.

            If BA’s auditors accept BA to adopt program accounting as conforming to GAAP, there’s no way they would let BA to put unit accounting in its audited account. Period. I hope this ends the endless repeat of this false narrative once and for all, unless this poster is able to give us a link showing BA put both “unit and program accounting numbers as notes to its FY reports”!!

          • One can also look at the bigger picture, as a way to navigate through the minutae of accounting practice. Boeing has high debt, shrinking market share and woefully severe technical issues. They are in bad shape.

            If they’re managing to dress up the accounts to look good, then they’re not being as forthcoming about their future as they could be.

    • The Truth exposed, hurt these Stockmarket Traders rather than Aircraft Manufacturer. Lob well done, Scott!

      • A couple % change ( up or down or both) in a day is normal for a $200 stock like Boeing
        this is today
        Day’s Range 207.77 – 213.18
        52 Week Range 113.02 – 221.33
        Volume 4,611,985
        Avg. Volume 6,420,355

        ‘According to forms filed with the Securities and Exchange Commission on Friday, Boeing CEO David Calhoun earned $22.5 million in his role for 2022 but did not receive the $7 million bonus that was conditional on certain goals: including getting the new 777X planes running by the end of 2023.’
        Yahoo finance

        • BA still 40% down in the past 5-year period.
          Airbus up 26% in the same period.

          Nothing to be concerned about.

          • And that’s the key, isn’t it?

            It’s a 2 horse race and one of the horses has weathered the pandemic and is overcoming it’s supply chain issues.

            The other hasn’t.

            The comparisons are easy to make

          • @Williams:

            You mean it’s going up or down?? 🤔

          • Airbus monthly deliveries only half of the guidance – for 3 months running

            Northing to be concerned about…unless the wrong people are getting bribed to achieve sales numbers too

          • “Half the guidance”??

            When did airframers start to give out month by month delivery guidance? Who’s kidding here? 🤣

          • @ DoU
            Pedro referred to month-by-month *guidance* — not month-by-month *deliveries*…

  2. Boeing’s B737Max, right from Day 01 of real-life operations, is a Defected Baby.

    The entire IT Sector must be ashamed that ANY Software like (original Version 1) MCAS could even be Written/Coded, let alone being inserted as a Migrant/Imposter S/W into the erstwhile fully reliable and proven FCC of B7XX series.

    The Original MCAS never followed any Software Engineering Standards (let alone the fact that it was part of a Real-Time S/W requiring special Engineering Standards)

    The accompanying documents never revealed nor reflected the true nature of MCAS. These were FAKED and the American body FAA were too eager and elated to certify them w/o any proper procedures followed for QA. I understand FAA delegated its powers to Boeing for issuing the stamps of certifications.

    The current Updated and Modified MCAS still being used in B737Maxes, is almost TOOTHLESS to force a NOSE-DOWN suicidal dash to the ground.

    But it retains ALL the utter nonsense attributes of its predecessors.

    In fact, the current version of MCAS is TOTALLY REDUNDANT and can be stripped of the FCC.

    The BS of Stall problem due to the IMPLANTED new fuel-efficient Engines of B737Max is TOTAL (MCAS was Implanted/Smuggled into the FCC with excuse to counter-act this so-called Stall).

    Any half-baked Pilot with some background knowledge of stall (and vigorous shaking of the Stick) will know of any on setting Stall and take appropriate measures (during the takeoff).

    My last line.

    Get RID of all versions of MCAS from the FCC of the B737Max, don’t continue with the DEFECTIVE BABY!

    • Again, because I think it bears repeating, they have got to keep software in-house. This farming out code to the lowest bidder in LCCs, has to stop. Take the cost out of those &%$#@ CEOs exorbitant compensations!

      Additionally, it might be time to get a different CEO and board of directors.

      • Software in house ?
        if its cockpit systems , Boeing hasnt made avionics in 50 years, its suppliers who specialise and they write and install their own software.

        Its just a fact of the modern world that software writing relies on contractors and the workforce prefers to move from contract to contract in many many cases.
        There even maybe a software supplier which provides a tailored solution from their own core software.

        Many years I worked for a US software company who provided a software solution for hospitals that was based on a database that was originally used in the defence aerospace sector.
        The hospitals didnt write it and my employer just adapted it for detailed costs for patients in a medical setting.

        • There should be a detailed spec what the software should do, how to test it, to certify it to certain specifications and its backup logic if input signals are corrupted. All specified by the buyer to the software company. It might have been done mostly this way but the procedures to allow the modifications that followed after it failed flight tests at low speeds was the main problem. The later review discovered required modifications in its instrumentation and logic with 3rd synthetic angle of attack to be implemented in the future starting with the 737-10.

          • No No No! There should be a detailed spec for what the SYSTEM has to do. The next step is to layout a system architecture that is highly focused on complexity management and fail-safe requirements. Once that is done, the electronic components (the ones with chips – which will be all of them), need to have data sources identified that comply with the fail-safe requirements. The design should then be submitted to what we used to call a Red Team, to pick it apart and see if they can find anything wrong. Red Teams must be composed of the best and the brightest.

            Once a system design is approved by the red team, then build the software.

            Finally, before you build the prototype for testing, take a scope to the boards and see if the signaling coming out of the boxes actually complies with the functionality intended in the system design.

            One of the main problems in the current situation is that there is way too much focus on the code and not enough on functional reality. We’ve seen this in the MCAS, the RVS and several other things the company has been working on.

            The first thing that happens after something goes wrong is for a bunch of folks to start looking at the code involved, and not the overall system concept and design. There is a complete unwillingness to even look at the real issues. Playing with the code, and talking about the code have become addictive behaviors . It’s completely insane. Gee the RVS doesn’t work, let’s go play with the code. Version 2.0 is sure to be better.

            Well, what is one to expect when the finance weenies have reduced your engineering staffing to least cost engineers?

        • AB also uses software from external suppliers — and, yet, it evidently isn’t experiencing this problem.
          Gosh, I wonder why?

          • AI has historically had their own software problems. Testing specification and logic when sensors fail or become intermittent is a key contributor. Just having a bus bar error could on an aircraft has in some cases made the whole cockpit blinking.

          • Sorry Guys, Nothing stated has swayed me from my earlier statement that software should be developed in-house. MCAS alone should be argument enough. If not in-house, then with a hands on approach among the contractor, Boeing, and an energized FAA.

          • @ Claes
            AB certainly has had some monumental software screwups!
            But — apparently — not the one that BA is currently experiencing.

            One bitten, twice shy?

    • Manab: I was a good pilot and have always followed aviation seriously and I find many of your statements way off base.

      Firstly MCAS 1.0 was criminal.

      What you miss is all aircraft of that type have speed control software, including Airbus. Its a way to smooth out forces and control ops so you do not have sudden handling changes (when you operate from 0 mph to Mach .75 its not the same as a C-152 that does 0 to 135 (if pushed hard)

      Its called Speed Trim.

      MCAS inception was the FAA who felt the handling went over an allowable limit at a high speed stall. Regardless of what I think, I don’t have the data to say it was an issue or not, but it is in the regs for consistent handling.

      MCAS 1.0 started out as a response to that. Once its mandated its close to if not impossible to go back. Due to the engine change of placement on the MAX there is some additional pitch up. I have been told that there are significant pitch changes with full throttle on and off in a 737 (that is from a 737 pilot).

      Any pilot who has flown a SEL aircraft knows that there are pitch changes and flaps being a huge one, you just trim it out. No big deal.

      But Boeing initially adhered to the FAA and the first series of Criminality or Negligence was being allowed to use a Single AOA to invoke it. It was not lethal but it was grossly stupid at best. Boeing cherry picked the AOA failure data to down rate the criticality (that is criminal in my view)

      Then it was a slippery slope that they used it for low speed stall as stall avoidance and dramatically increased the authority and it became truly lethal.

      The issue for the 777X was not MAX software, it was using cut and paste of 787 software (which is not a problem if you tune it right and tuning software with PID statements is a whole area most people are ignorant of)

      Suffice to say, nothing wrong with re-use of software, but it has to be adjusted for all 3 parameters of a PID statement or it acts badly at best.

      Boeing can no more get rid of MCAS than I can fix the deficit, its been mandated and they have tuned it to work with many backups so it will not do what it did ever again and pilots are trained on it with procedures for MCAS not a different condition like runaway trim.

  3. Cai von Rumohr has set his target price of $230 a share for BA. How is that going to happen if news like this keeps getting out? Some people are just so insensitive to the needs of others.

    Scott is definitely off the christmas card mailing list.

    • I suspect that BA will be giving us another miserable earnings report in Q1 2023: low deliveries, low margins, cash drain due to debt repayment,…

      That certainly won’t help the stock price.

  4. ‘Boeing’s guidance gives a broad range of 400-450 737 for 2023.’

    This is not enough aircraft.

    BCA delivered 387 NB’s out of 480 total in 2022. 2023 is starting to look very similar to 2022. Fixed costs are high and margin isn’t covering them.

    • Plus:
      There’s $5.2B in debt due within a few weeks — the biggest debt repayment that BA has had to face in (more than) 2 years.
      Seeing as the company isn’t generating positive EBIT, that repayment is going to have to come out of cash.
      That will put a nasty dent in FCF.

      p.s. Pre-emptive note to Duke: No Duke, the $5.2B hasn’t been paid yet — it’s merely been moved from long-term debt to short-term debt. That happened almost a year ago, so it’s due within weeks.

      • Talking about that debt, Bryce:

        Scheduled principal payments for debt

        ………..2023… 2024… 2025… 2026… 2027
        Debt $5,128 $5,081 $4,306 $7,966 $3,300

        (off their 10-Q)

        In 2023 , BA has to repay $5,197 plus $2,266 in interest. About $7.5 billion.

        Every year, for the next 5-6 years, they are on the hook for ~$7 billion in principle and interest. (2027’s gonna be real fun, when they are on schedule to pay off $8 billion plus interest)

        Every year, unless they refinance things, LTD will fall into the current period, to the tune of ~$5 billion.

        $27. 678 billion over the next 5 years.

        There’s a chunk of change

        • Oh dear!
          I see debt rollovers coming down the line — at even higher interest rates than the ones currently being paid.

          Enyering rating downgrade territory…

          • Boeing publishes its debt owing in the repayment period bands ( out t0 2040 or so) and the interest rate ranges of each band.

            The rating agencies – real experts- seem happy with their ability to pay debt as they come due.

            So its a mystery where you are getting your dumpster news, can only conclude its complete falsehoods….. duh.

            Because of the amount of debt its just below investment grade but the order book, the income stream from deposits and the final payments means the bond holders are fine.

          • @ DoU

            “The rating agencies – real experts- seem happy with their ability to pay debt as they come due.”

            There’s a discussion below about how “expert” the rating agencies are — SVB being a nice counterexample.

            Re “dumpster news”:
            Still violating @Scott’s request to stop the vitriol, are you?
            You somehow don’t think that that applies to you?

        • And how much debt has Boeing repaid over the last few years ?

          FY23 long term debt is $5 bill below that for FY22: 51,811 56,806

          Lets ignore the facebook-feed analysts and listen to the experts
          Feb 2023
          “Cash of $17 billion provides a strong cushion for Boeing to retire the $5.1 billion of debt coming due in 2023. Reduction of 737 MAX and 787 inventory and incremental improvements in the supply chain will allow for at least $2.6 billion of free cash flow this year and material growth in free cash flow in 2024,”

          • “Reduction of 737 MAX and 787 inventory and incremental improvements in the supply chain…”

            Mmhh…looks like things have changed since that was written…

          • @Duke

            Well, let’s go to the financials to see;

            From the 2021 – 10Q:


            pg 47

            (Dollars in millions) Current Long-term Total
            Long-term debt (including current portion) $1,300 $57,389 $58,689
            Interest on debt 2,365 33,658 36,023

            So in 2022, the current portion of LTD was $1.3 billion.
            Interest was $2.365
            In 2020, they had this (pg 49):

            (Dollars in millions) Total Less than 1 year
            Long-term debt (including current portion) $63,963 $1,630
            Interest on debt 37,614 2,271



            Interestingly – they moved around the debt. In 2020, this was the debt repayment schedule:

            …………2021 …2022 ….2023… 2024 …2025
            Debt $1,630 $14,976 $3,776 $2,001 $4,301
            Interest on debt 37,614 2,271

            They obviously didn’t repay ~$15 billion in 2022. Maybe they thought that things would be rosier, back then – and they’d have money to make that huge balloon payment.


            Hey Duke! Page 47! Look at this…huge amounts of money:

            Financing Activities Cash provided by financing activities was $35.0 billion during 2020, compared with cash provided by financing activities of $5.7 billion in 2019


            So to summarize; No. Debt repayment was kicked down the road, hoping that things would get better in a couple of years. Repayment schedule for $1.3 and $1.6 billion.

          • More on debt:

            From the financials:

            Net cash used by financing activities (1,266) (5,600)

            Boeing re-paid $1.31 billion in 2022, after re-jigging their debt and paying down $5.6 billion in 2020 (they borrowed 9,795 and retired (15,371), probably moving it to a lower interest rate)

            Why the drop in payments from 2021 to 2022? To keep the cash in-house and make FCF look good?

            All you do is kick the can down the road. Eventually that money has to be re-paid.


            Here’s a little of their history:

            Net cash provided/(used) by financing activities

            2017 – (11,350)
            2018 – (11,722)
            2019 – 5,739
            2020 – 34,955
            2021 – (5,600)
            2022 – (1,266)

            In 2018, $9 billion of that was stock buybacks. $3,946 was dividends.

            In 2017, $9,236 billion of that was stock buybacks. $3,417 was dividends.

            What a waste…

          • Frank, I included the long term debt for FY21and its $5 bill reduction by FY22
            Are you saying Mooney, last month got it wrong and your analysis is better . ROFL

          • Getting back to airplanes, Mooney makes a really good airplane!

          • Duke

            You cannot be this dense, can you? You are just doing this on purpose, right?

            Imma go slow, this time. Step by step. Tyr to keep up.

            Here is the 10Q from 2021:


            Go to page 49.

            You see Capital Resources?

            Take a look at the table there. Look at the first line:

            Long-term debt (including current portion)

            See that? That’s all the debt that is owed. Let’s see the amounts:

            $1,300 $57,389 $58,689

            The final number, is everything that BA owes. So at the end of 2021, Boeing owed $58.589 billion in Debt.


            You with me so far? Good.

            Now let’s do the same for 2022. Here is the 10Q:


            Go to page 43 on this one. You see Capital Resources, again? Look again at the first line:

            Long-term debt (including current portion)

            and let’s see what the numbers are:

            $5,197 $52,338 $57,535

            So at the end of 2022, Boeing owed $57.535 billion in debt.


            Now here comes the tricky part, so pay close attention:

            The difference between the two numbers, is how much Boeing paid down their debt in 2022.

            $1.154 billion.


            If at the beginning of the year, you owed to lenders $58.569 billion, then a year later your debt is $57.535, you only paid off $1.154 billion.

            Were you able to follow that? I really can’t go any slower than this – if you want to keep up, I think you should enroll in some accounting classes.

            Probably a good idea to refrain from commenting on accounting matters until you have a better grasp of the subject. This is fairly simple stuff and if you can’t understand the matter, better to not waste time here.

            Now go have some milk and cookies – then have a little lie down. There’s a good boy…

          • @Frank @Duke: Knock it off. Each of you is getting personal.


          • @Scott

            Yessir. Not usually my style, but occasionally you have to take out the hammer, when evidence is ignored.

          • Frank:

            It really does no good to bring out the hammer, people that won’t deal with facts are like the living dead of the fiction stuff. No matter what you do part of it just keeps repeating things.

            You can just present it as these are the facts and someone who has the ability and interest in learning will get it. Closed minds are a lost cause.

            You and I may disagree on how the facts apply and not disagree on the facts themselves.

            In reality I am not a serious financial guy. I took a financial class one year, I quit it. Made my head hurt.

            I can keep a checkbook balanced, my own finances good but business, argh.

            What we can say is Boeing has problems with MAX deliveries from the stored one and 787s as well as another delay due to bulkhead and that is NOT a well managed company.

          • The trouble with this financial analysis is long term debt in Boeings book is the amounts listed. so far so good
            But thats ‘all’ long term debt

            the long term debt that is *current* ( ie needing repayment this year) is listed separately (with short term debt)

            Simple answer is the conclusion are invalid, you need to look at ‘all debt’ and even Boeing say the principal of all debt thast needs to be repaid or rolled over in next 3 years is $14.5 bill

            the actual NETT debt reduction ( all types will be around the $5 bill figure as it was $5 bill NETT in 2021 .

            A credit agency says Boeing has $13 bill ‘in cash’ and that which is ‘free’ is plenty to pay off debt so that NETT debt is reduced

          • Wrong again, Duke.
            Net debt = gross debt minus cash.
            So, when you use cash to pay off gross debt, nothing at all happens to net debt.

            Yellow Brick Road…

          • Thats not how financial statements count these things Mr Bryce

            They count debt instruments as short term and current and long term
            this is what is being discussed here
            ‘cash’ is an accounting term too in this context . Some is in securities as well and not ‘cash in the draw’
            Our friend Mr Frank also misunderstands the difference between long term and current debt ( less than a year)
            He seems to think you should be paying off some long term debt within next 12 months ….. but thats already moved to the short term and current debt account.

          • @DoU
            “This is what is being discussed here”

            No, this is not what is being discussed here. Your previous post made multiple references to “NETT debt” — so stop trying to change the subject.

            And forget trying to deride Frank: he’s trained in accounting, and knows EXACTLY what he’s talking about.

            So, getting back to your post above: explain how using cash to pay off debt leads to a reduction in NETT debt.

            Hint: a-b = (a-x) – (b-x)…

  5. Keep telling it the way it is, we need quality journalists like you to keep companies like Boeing honest; although that’s a big ask given their uncontrolled greed.

  6. Boeing really are the Keystone Kops these days, aren’t they? Yet the CEO gets a $5.3 million bonus for doing
    such a “great” job..

    • Vincent

      …”Yet the CEO gets a $5.3 million bonus for doing
      such a “great” job….”


      I agree. I usually don’t mind bonuses as long as there’s merit.
      It’s indecent!!

      How to generate cash flow if the aircraft are not delivered?

      But here I have to say:

      “Hey! what did Calhoun do so special for Boeing?”
      Bringing back the culture of safety is an unconditional thing. It’s not a feat.
      And the CEO receives 5 million bonus with the approval of the shareholders!

      Is that why a new aircraft launch has been postponed/cancelled until 2035, in the name of the C-suite salary??

      We do see Mc Donnell Douglas buying Boeing with Boeing’s money.

      This turn smells very bad.
      How to kick all this Suite C to the buttocks.and eject them from Boeing?

  7. Bit of an emerging pattern here:
    First, a news outlet reports a story…and only then does BA issue an admission:

    “Boeing confirms 767 and KC-46 ‘quality’ problem”

    “Boeing confirms it has identified a “quality issue” affecting production of 767s and 767-based KC-46 military tankers, saying the issue requires it make fixes to production aircraft.

    ““Through Boeing’s standard process, a quality issue was identified on some 767/KC-46 Tanker components,” the aircraft manufacturer said on 7 March. “We are continuing to work through our process with our supplier, regulator and customers to resolve the issue.””


    • Seems to be at odds with Dave’s previous promise of more transparency, back in 2020:

      “Rebuild trust: Many of our stakeholders are rightly disappointed in us, and it’s our job to repair these vital relationships. We’ll do so through a recommitment to transparency and by meeting and exceeding their expectations. We will listen, seek feedback, and respond — appropriately, urgently and respectfully.”


    • this was a case of their subcontractor dropping the ball, not specifically Boeing.

      Triumph didn’t follow the specified surface cleaning and priming procedures when coating the center wing box fuel tank section.

      unfortunately since it is the center wing box fuel tank that is messed up, the fix is invasive, difficult and slow (they basically need to strip the entire interior of the center fuel tank down to bare metal, re-prep and re-coat it.)

      massive safety of flight implications, potentially sheets of peeling paint ending up blocking fuel lines….

      • Perhaps BA provided faulty specs and/or didn’t have adequate inspection procedures in place?

        • Or perhaps, by putting so much supremacy on Every member of the management team “hitting their numbers” that many things that should get attention never make into status reporting and visibility. But hey, if we’re on budget then what else matters?

          • As there were no issues previously, we can remove the perhaps stuff and simply say, something changed.

            By pure facts, it has nothing to do with specs (that would be pure conjecture though often it would be described in terms of terms of emissions from one end of a Male Cow)

      • @bilbo

        You’re wrong. Boeing has the ultimate responsibility for supplier oversight and routinely accomplishes audits to ensure these suppliers follow the procedures and specifications of Boeing drawings.
        This is a breakdown in every aspect.

        But you’re right on the safety of flight implications.

        • Airdoc:

          Yes Boeing has the responsibility. But a supplier can fake the paperwork as to the mix or curing time.

          Or they fire the people that did the job and new people don’t know how to do it. It can look fine, fail when you put fuel into it.

          When a machine quits working you don’t get the report and say, well its the main contactor. You go look, you investigate and then you trace down to the actual fault.

          Boeing does not stand over every process by a sub contractor nor do they do it for their own mfg. They get test results and process reports and if its passing the specifications there is no need.

          Something went badly wrong. Boeing is responsible. That does not mean they are the ones at fault.

  8. Just urge D. Calhoun and Suite C to leave by depositing the 5 million back into the cashbox. Bringing A. Mullaly back as CEO of Boeing and apologizing to him for instigating him to leave to become CEO at Ford,
    He left Boeing in 2005,

    Boeing will be able to relive…

    • Which 5 million? He did not get his bonus for the 777X (clearly he is vastly over paid but that is another aspect of the topic)

      Now why you give people a bonus for doing their job? Let alone pay someone that much that has that much chaos in the organization ? Those are good questions in my opinion.

  9. Off-topic, but this subject featured in many LNA articles last year:

    “U.S. Air Force Ends KC-Y, Considers AoA on Next-Generation Air-Refueling System”

    “The U.S. Air Force has decided to end the KC-Y program for buying 150 commercial tankers as a bridge to a future Next-Generation Air-Refueling System (NGAS) tanker–the formerly known KC-Z–and may end up buying 75 more Boeing [BA] KC-46As instead, as the service considers an Analysis of Alternatives (AoA) on NGAS.”


    • hopefully their AoA says build a crap ton of unmanned stealthy refuelers of various sizes.

      start with a B-21 variant with all the human and weapons system stuff stripped out and replaced with fuel and an automated boom for the pacific theater and strategic.

      then an MQ-25 variant with a boom pod and more fuel capacity for the european theater.

      • Well going with last first, you can’t put a boom on an MQ-25. Its bigger than the MQ-25 all by itself.

        The MQ-25 itself does not have that much fuel either. Its also not designed as stealthy.

        And how do you keep stealth when you have a boom hanging out in the air?

        How much is this going to cost?

        Maybe we need more range for our fighters.

        • Egads, really? How do you put a boom out in the air and remain stealthy? How do you add more range to a fighter? It would be nice to have at least a tiny bit of understanding about aerial refueling missions and how the various equipment configurations work. The totality of the cluelessness of these two comments is just that – 100%.

          First, whatever we field has to work for our most difficult and dangerous missions. If we can support those, then the rest is actually fairly easy. So let’s describe our most dangerous missions. Oh, and as a footnote the stuff they are trying to fix on the KC-46 RVS has nothing to do with the most dangerous missions. They are still trying to make it work in problematic low contrast daylight situations, which are trivial compared to the dangerous stuff.

          For a typical dangerous mission profile, we send a plane into hostile territory undetected. Typically, this is done at night with a stealthy plane, and often a very long way from the nearest friendly base that can support the mission. These are missions that one never reads about. They are basically never unclassified.

          All such planes that can do this sort of thing (I know of three, but there are rumors of a 4th) have their refueling port under a little protective door behind the canopy. The pilot cannot see it. All he or she can do is open the port. It’s on the boom operator to fly the boom into that port and not miss, so that after the job is done and the door is closed, the stealth coatings have not been compromised.

          The refueling mission profile involves a rendezvous someplace just outside the hostile airspace, and the trick is to not allow the thirsty plane to be visible even then. So it has to be done quickly in case someone is sent up to take a look at the tanker. Also, there may be two such refueling rendezvous, one just before going in, and one coming out. OK, that’s the mission profile.

          In terms of some of the stealth technology involved, about the only thing I can say here is that this stuff is highly classified and we do not offer it as an export option even to allies. For example, the export version of the F-35 has given up a significant chunk of the space in the forward part of the fuse where we normally house imaging and other related mission avionics. That space is instead given over to a pop-out refueling boom on the right side of the plane for use with the basket and drogue refueling system. There is no export version of the F-22. Then there is the third plane, and the rumored 4th.

          • A: yes really, obviously not as stealthy as with the boom retracted, but it would be pretty trivial to be more stealthy than a freaking 767 with no attempt at any signature reduction.

            a stealth shaped aircraft with _some_ RAM and a boom with stealth shaping and RAM would not be a difficult thing and would greatly reduce the detection range. not enough to penetrate, but enough to reduce the standoff range by a large amount.

            Airbus has demonstrated fully autonomous boom refuelling, Boeing has demonstrated autonomous hose and drogue.

          • @bilbo “not as stealthy..:

            When we ask one of our people to do a job that is super difficult and dangerous, it is our job to give them the very best tools we can. Crap rolls down hill, and it is always the person whose life is on the line that ends up on the receiving end.

          • RTF:

            It is interesting when someone proves that they truly do not understand what they are portending.

            The fuel thingy you refer to is part of a Probe and Drogue system. It is the standard for the US Navy (and by extension the Marine Corp). It is also used by many allies as its the better system for a fighter.

            Simply put, a boom system benefits larger aircraft (B-52 and the like) and that is where it originated for the US Bomber fleets.

            For fighters the predominate system is hose and drogue and all tankers are equipped with it (KD-135R has the ability to attach to the boom and the KC-46A is built in, all US Navy refuelers have that system and no boom.

            The UK does not use booms at all, none of their tanks have it.

            All modern US Air force fighters have the pop open door if stealth and a link up port if not.

            The reason any fuel port folds in or has covers on a stealth aircraft is you have to hide the signature lines.

            A boom by definition sticks out like a sore thumb. There are no stealth booms.

            You really need to read up on how the real world fuel missions work vs pulling stuff out of your imagination.

          • Here’s a link to a video of KC-135 refueling one of our USAF F-35s.


            Again, the reason that it’s configured this way is because of a combination of the mission avionics package and the concerns about the stealthyness of the pop-out boom.

        • I guess you didn’t read “variant with more fuel capacity”

          and a podded boom designed only to service fighters from a roughly fighter sized tanker would not need to be as big as the booms hanging off commercial airline sized tankers that have to refuel commercial airplanes.

          it also doesn’t need F-22 levels of stealth, but reducing RCS from the size of 3 football fields to the size of a large bird greatly reduces the range at which it can be tracked.

          people who don’t understand stealth think it is absolute or something. there are degrees of stealth, all are useful. some are good enough for deep penetration, others good enough to allow you to shrink the enemy’s detection range. either way, it is beneficial.

      • I am not an expert on the topic, but the notion of unmanned, autonomous, “stealth”
        refueling tankers seems absurd on its face… when Boeing can’t get an old-style
        tanker (KC-46A) fully operational after how many ? years?

        It depends on the goal, though: for shoveling yet more endless money upward to the MIC in yet another Rube Goldberg scheme, that one should do nicely: Mission Impossible, but so very, very lucrative for the Few..

        “autonomous stealth tanker..” heh. 😉

        • well, Airbus has demonstrated autonomous boom refueling with their MRTT.

          slapping some RAM and shaping on a boom to reduce its (deployed) RCS is pretty trivial.

          designing the system so the boom retracts inside the aircraft when not in use, or into a body cavity isn’t hard.

          not even remotely suggesting that Boeing ought to be the contractor.

          • That’s for the drogue and boom system. It works well, and it’s what we use for refueling helicopters. However, it is totally incompatible with our large transports and small stealth aircraft.

            The drogue and boom system is also very promising for drone to drone refueling, provided the mission profile of the thirsty drone is compatible with the system requirements.

  10. About free cash flow

    (this was buried in another post, so I thought it might be good to give it it’s own thread)

    This is a schedule of net cash from financing:

    Net cash provided/(used) by financing activities

    2017 – (11,350)
    2018 – (11,722)
    2019 – 5,739
    2020 – 34,955
    2021 – (5,600)
    2022 – (1,266)

    In 2018, $9 billion of that was stock buybacks. $3,946 was dividends.

    In 2017, $9,236 billion of that was stock buybacks. $3,417 was dividends.

    Right off their financials


    You can see how they were hurt in 2019 and 2020 and had to borrow over $40 billion.

    In 2020, they had scheduled some $15 billion to be repaid in debt, which is straight off of their 10-Q

    …………2021 …2022 ….2023… 2024 …2025
    Debt $1,630 $14,976 $3,776 $2,001 $4,301

    They re-paid $1.3 billion.



    1) I guess they thought in 2020, that things would fixed by 2022
    2) They dropped over $5 billion on debt in 2021, but that slipped to $1.3 billion in 2022.

    But here they are, touting how good their FCF is. Sure – you were planning to spend $15 billion on debt, the year before you spent some $5.6 billion on it, but then only spend $1.3 billion on it.

    Thanks for pointing us in the right direction Duke.

    • Wrong again…and again.. [have you taken in the unit accounting numbers now that you didnt think existed- also showing the falsehoods from the birdbath twitterers and the facebook feeders]

      The big change after 2019 came because of the Max debacle and the effects of 787 problems and Covid almost breaking the travel industry.
      How now cares what the share buy backs by previous management ( when they had colossal FCF) do now.

      After all whats left in the business really is shareholders money and for various reasons its the “US way of giving money back to their investors’. if you were an actual investor of any sort you would know it leads to investors buying more shares

      • Duke

        Nothing. To. Do. With. Unit. Accounting.

        This has to do with repayment of debts and your favorite subject; Cash.

        $7.5 billion in 2023 in interest and principle.

        Once again, here is the principle repayment schedule from 2022

        ………..2023… 2024… 2025… 2026… 2027
        Debt $5,128 $5,081 $4,306 $7,966 $3,300

        This is what it was in 2020

        …………2021 …2022 ….2023… 2024 …2025
        Debt $1,630 $14,976 $3,776 $2,001 $4,301

        Stop calling people names. Stop trying to muddy the waters. I’m not on twitter and don’t check up on facebook. This is all me…

        How’re those share buybacks working out for BA, huh? When they were spending cash on stock at $350+ a share and they’re worth how much, now?

        Good bit of business, that…for the shorts.

        • “$7.5 billion in 2023 in interest and principle.”

          PLUS: seeing as the illusory FCF in Q4 2022 was generated at the expense of accounts payable (plus $1B) and accrued liabilities (plus $3B), at least some of those deferred costs will have to be paid this year — which will also take a nice, extra chunk out of available cash.
          It may be short-term advantageous for BA to push supplier payments out to 120 days — but, when those 120 days are up, the money starts to fly out the door.
          At the end of Q4 last year, accounts payable stood at $10.2B and accrued liabilities at $21.5B.

      • I’m hoping commenter DoU wii show us very soon just where Frank’s Boeing-derived numbers are mistaken.

        • Easy .
          Its spelt M.O.O.D.Y.

          “Moody’s total number of employees in 2022 was 14,426, a 7.18% increase from 2021.”
          credit ratings and analysis covering more than 130 countries, 11,000 corporate issuers, and 21,000 public finance issuers.

          Then there is another ratings agency Fitch
          “Positive FCF Forecasted: Fitch projects BA’s FCF to gradually improve towards a level consistent with the high ‘BBB’ category over the next few years. Fitch forecasts BA will generate between $1 billion and $2 billion of FCF in 2022, between $5 billion and $7 billion in 2023, and low double-digit billions in 2024

          We cant take seriously- as McEnroe used to say- any car boot accountants with no credibility who are so obviously at variance from real world experts

          • How much of BA’s so called “FCF” came from postponing payments to its suppliers??

          • @ DoU
            Someone needs to tell the rating agencies that their models are using outdated assumptions for BCA margins.

            That’s the crux here: they assume that BA’s unit margins are the same as those of other industry players — when they clearly are not.

            Ron Epstein at BOA is starting to see this, but his counterparts elsewhere are still in hibernation…

          • Did Moody’s or Fitch (or S&P as a matter of fact) raise red flags or any concerns about the false-labeded “AAA” CDOs before 2008?? They are still paid by the debt issuers for God’s sake.

          • Pedro are you the new bond analyst for hire ?

            Whats your company name , if you havent got business cards printed yet , heres a suggestion

            I think there an ‘under employed’ self described aviation accountant who could join you
            ROFL Partners

          • @DoU

            Did you read what @Scott said below?? 🙄

      • ‘ After all whats left in the business really is shareholders money and for various reasons its the “US way of giving money back to their investors’. ‘

        Appears our poster pays little to no attention to BA’s BS – it has a multi-billion dollar shareholders’ deficit! There’s nothing left in the business that rightly belongs to shareholders, BA is literally running on fumes!!

        • History my friend when Boeings FCF was in the tens of billions.

          When was the last share buyback ?

          But course you do know that Airbus has been buying back shares …. of course you dont. You only know about Airbus returning money to customers with bribes

          • DoU sure is prolific with its insults of other commenters here- while providing no facts to support its claims at all.


          • facts support my claims .
            Its well known Airbus is doing share buybacks and they were caught paying bribes to airlines and fined heavily

            its been discussed here repeatedly .
            I might add they are also on trial in Paris court for involuntary manslaughter for 228 deaths

          • How much did AB buy back its shares in the last decade? 🤔 How does it compare with BA?? 🤭

          • The sad thing about those buy-back figures is that even by Boeing’s non-GAAP balance sheet, it was bankrupt with a negative equity section for the last five of those years, and if you convert to GAAP, it was bankrupt for all ten. The money for those buy-backs came from the liquidation of company wealth that had been built-up over the previous century. But that doesn’t even tell the full story because the non-accounting assets were also being liquidated at the same time.

    • @ Frank
      Always great to have you expound the figures, but don’t waste your time banging your head against a wall: remember that some people just *don’t want* to accept the facts.

      The poor wrethches at Moody’s are evidently somehow still under the impression that BCA’s deliveries can generate enough margin to start producing positive earnings. They’ve been wrong for 12 quarters straight, but the penny still hasn’t dropped. They evidently don’t read LNA. Let them off: let’s see their reaction in April when BCA generates yet another $600M operating loss.

      Apart from playing with payment/receipt dates (which runs out of steam very quickly) the only way for BA to generate cash now is to sell assets, such as real estate. They currently have $13B in cash, and half of that will go this year when they repay that $5.3B debt and the loan interest for 2023. Halving available cash should make WS sit up and pay attention.

      • ‘the only way for BA to generate cash now is to sell assets, such as real estate.’

        Or stock.

        They do have about $17.2 billion in cash and investments, but it looks like they’ll be forking out some $7 billion each year, over the next few years.

        Short term liabilities creeped up from $81,992 to $90,052, as you pointed out above – an increase of over $8 billion. By definition, that’s everything that’s due in the coming year.

        Short term debt in 2021 was $1.3 billion and jumps to $5.2 billion in 2022, an increase of $3.894 billion. Take that off the ~$8 billion increase in STL and…

        ….there’s an increase of $4.166 in short term liabilities (outside of debt) from 2021.

        And no Duke – it isn’t unearned revenue (deposits):

        Advances and progress billings 53,081 52,980

        That only went up $101 million.

        • You tell me what a company does with $50 bill of *free money* in the form of customer advances
          You havent explained why Airbus doesnt seem to have as much free money from its bigger order book.
          Reality is you cant .
          Just like you cant explain why a credit rating agency like Moodys has such a positive outlook – something they do for a living.
          Your credentials are ? have you even worked for a Fortune 500 company , doesnt sound like you could even claim that

          An amateur like me will believe reputable financial experts over a ….. who knows ?

          • You’ve already been told what has happened to those advances…they’ve bern spent.

          • I just realized something;

            You don’t read any responses, do you? If you did, you would remember how I told you that Airbus works on percentage of completion.

            Then you repeat the same old lines, over and over again – even if they have no bearing on the subject.

            Then you run people down, when you don’t like the answer you are given, without even trying to rebut it.

            I’m done with you Duke – you add nothing but aggravation.

          • @ Frank
            As I told you already, some people *don’t want* to accept reality — there are quite a few of them here.

            Let them off: they’ll get a hard landing sooner or later 😏

          • Sounds like an ill-informed (i.e. badly trained) Chatbot, acts like an ill-informed Chatbot whose sole purpose is to repeat propaganda.

  11. From Planespotters this morning:
    737 MAX deliveries for Q1 so far stand at 78.
    8 were delivered in the first 8 days of March, of which 3 were from inventory (a similar fraction applies to Jan and Feb). Extrapolating at this rate, MAX deliveries for the whole of Q1 will be 101.
    Add in 5 787s delivered so far and the total goes up to 106. 787 deliveries are now paused.
    There appears to be just one 777F delivery — which brings us up to 107.
    767 deliveries are also paused.

    154 deliveries in Q4 2022 yielded more than $600M loss for BCA.
    A similar loss was recorded in Q3 2022 with 112 deliveries.
    So, any wagers as to what loss Q1 2023 will yield?

      • Cool — thank you 😎

        Planespotters is still a great site for nitty gritty details per frame. For example, some of whitetails had more than one NTU prior to delivery…

          • Well, one OEM is living from hand to mouth, is drowning in debt, needs every dollar it can get, and just can’t seem to return a profit.

            The other OEM has none of these problems.

            So, which OEM do you think is more dependent on the minutae of delivery numbers?

          • The accounts prove they arent drowning , its being paid off on schedule. Its only the shareholders who miss out so you should be * loving it*

            back to the Airbus deliveries snafu , instead of your big diversion ….

          • Can our resident “expert” of aircraft delivery remind us how many aircraft BA/AB delivered back in February 2019?? 🤫

          • @ DoU
            $57B in loans and more than $2B in interest per year = drowning.

            First big repayment coming up — and no earnings to cover it, so it has to come out of cash.

            But do continue to skip along the Yellow Brick Road 😄

          • @Resident “expert” of aircraft delivery:

            Did you forget both BA and AB delivered exactly *46* aircraft in February *2019*, the same number of aircraft AB delivered last month? How many aircraft AB managed to deliver for the year 2019? 🤔

            Selective memory lapses??

          • Pedro , surely you arent ignoring the LNA request to tone it down, which you quick to point out to others.

            any way , we have had 2 *complete* months so far of this year ( last year is been and gone) and Airbus is only a bit over half *their* average monthly delivery promises already.

            Airbus customers dont give a hoot about what Boeing is doing theres 30 planes not delivered , I can imagine the Airbus accountants have their hair on fire too over the cash flow shortage

          • Let me remind you how many AB managed to deliver in 2019 (their February delivery of that year was also 46, the same as in 2023).

            Don’t forget missing hundred and more aircraft deliveries year after year is a bigger mess for BA, esp. when their cash is tight!

    • Just another “documentation” problem!

      BA calls its latest 737 MAX software issue: “largely a process compliance [documentation] activity that we have been closing out for several months”.

      • It looks like BA considers the 737 MAX is delivered to the lessor[s]!?!
        It’s only the lessor[s]’ problem??

        -> ‘Boeing said Tuesday that “this work is primarily related to *post-delivery reconfiguration*” with no impact on its deliveries from the Boeing assembly plant and “no impact to our delivery outlook.’

        • Looks like someone at BA forgot about all those whitetails that are still out in the parking lot…

          • So how many are ‘whitetails’ and not being taken up by the airline they were made for.
            Surely you know how many….. or do you ?

          • @ DoU
            You evidently don’t pay adequate attention to LNA — which regularly gives data on this subject (most recently just last week)…

          • I knew that of course .
            Theres something like 20-30, just expecting you to quantify rather than ‘all those’ waffle

            Anyway Boeing is still ahead of Airbus in deliveries so far this year , who seem to be having * issues* none of the facebook feeders want to talk about

          • Apparently AB delivered 46 aircraft in one month, over 50% more than its major competitor which suffers from *multiple issues*!! Hehe 🙃

          • Airbus has been miles ahead in deliveries until this year – and last month of last year.
            The projection is 720 for this year , which gives an average of 60 pm

            Well behind …again, looks like the delivery failure last year is on track to be repeated as they are only just over half the monthly average after 2 months. ( numbers to end of Feb, which is 69 !, when projected was 120 )

            Boeing can tell you that once you get behind theres no chance of catching up. Yet Airbus had the higher production rate infrastructure in place

          • Let me guess which one delivers more aircraft this year ….
            @DoU would you bet for BA?? 🙂

          • @ DoU

            “Theres something like 20-30”

            Looks like someone is forgetting the large number of ex-China frames that are still on the tarmac…

          • Chinese airlines planes dont need reconfiguration do they

            Once there was a whiff they could go to India seems a change of heart in China…bless them

    • Regarding 767/KC-46 tanker manufacturing error:

      -> For the affected planes, Boeing said its mechanics in the factory will have to defuel the tanks, then inspect, clean, and apply new primer inside — a painstaking and slow job.

      • -> “In addition to undelivered jets, the planes affected also include some cargo planes and Air Force tankers already in service, Boeing said.

        The supplier of the center fuel tank, Triumph Aerostructures — now a unit of French aerospace conglomerate Daher — disclosed to Boeing that the proper cleaning and painting process had not been followed for some of the fuel tank interiors.

        Boeing then notified the Pentagon’s Defense Contract Management Agency *on January 17* of the paint primer adhesion issue on the tanker aircraft.

        • “The supplier of the center fuel tank, T..”

          IS that tank integral to the Center Wing Box or a separate item?

          I’d assume integral?

          • Yes it is . Originally it was made by Northrop , but when they became NG the aero structures were sold to Triumph, who are now owned by Dahler

            this from when the 767F was announced
            ‘Canadair manufactures the rear fuselage. Fuji is responsible for the construction of the wing and body fairings and the main landing gear doors. Kawasaki manufactures the forward and central sections of the fuselage, the exit hatches and wing ribs. Mitsubishi is subcontracted to manufacture the rear section body panels and rear doors.
            Northrop Grumman manufactures the wing centre sections, the lower centre fuselage and the fuselage bulkheads. Vought Aircraft is responsible for the manufacture of the horizontal tail section. ”

          • Every structure in a plane has multiple functions. The primary fuel tanks are the two wings, usually out about 2/3 of the way from the fuse, but that varies from model to model. The center wing box was initially though of as an optional tank, but it’s now pretty much standard. Optional additional tanks can be installed fore and aft of the center structure, but it’s a trade-off with other payload options.

            During assembly, the center wingbox is typically first mated to the structure right behind it that also serves as the main landing gear bay. A slice through the whole fuse as the wingbox in section 44 and the main gear area in 45. The lower fairings which typically have the scoops and part of the ducting to provide air all the way to the tail for the APU are section 49. In the assembly process, starting to build up that part of the plane essentially happens in parallel with the loading of the spars into the wing majors tooling. But we typically only talk about the loading of wing majors in contracts, as that event typically triggers one of the progress payments from the customer.

            I’m not going to say it can’t be done, but replacing a center wingbox is something you wouldn’t do. The amount of stuff you would have remove is staggering, and on top of that you would have to find a way to temporarily support everything that is dependent on it.

            Airplanes are monocoque structures. They get their support from the sum of all of their parts and their combined shapes. Imagine replacing the firewall in a modern sedan and you would have a much simplified version of the same problem.

          • Not going to replace a wing center box.
            Its just a painting issue so they have apertures to go inside- how else could it be painted inspected during the construction and maintained afterwards.

  12. “US Aviation Regulator Boosting Boeing Oversight”

    “The U.S. Federal Aviation Administration (FAA) is ramping up oversight of Boeing and plans to add nearly 300 employees to its safety office following two fatal 737 MAX crashes in recent years, the agency’s acting head said on Wednesday.”

    “The FAA currently has 107 full-time staff members providing regulatory oversight on Boeing, up from 82 just a couple of years ago, Nolen said.

    “Additionally, he said the FAA has augmented its Boeing oversight team with the equivalent of 35 full-time employees from across the agency to support oversight activities.

    “Boeing declined to comment.”


    • ‘The FAA has closely scrutinized Boeing’s quality and other issues in recent years. The FAA continues to inspect each 737 MAX and 787 aircraft before an “airworthiness certificate is issued and cleared for delivery.” Typically the FAA delegates airplane ticketing authority to the manufacturer.

      During the hearing, Republican Senator J.D. Vance raised questions about two recent Boeing 737 MAX flights and asked whether the 737 MAX was actually safe after the FAA mandated safety and software updates before lifting a 20-month grounding in late 2020.’

      Which two incidents is he referencing?

        • Thanks for links to the recent 737MAX incidents.
          Stab Trim on the AA flight; I don’t like the sound of that.

          • The crew subsequently declared emergency advising they had no autopilot trim and no electrical trim system on their brand new aircraft and needed to trim the aircraft manually

            The aircraft had arrived in Phoenix on its delivery flight from Boeing Field the day before.

          • @Frank/@Vincent
            With regard to the archaic manual trim wheel in the MAX, I recall how “a certain commenter from the past” told us here just a few weeks ago that the whole discussion of the manual trim wheel was moot because “any 737 pilot worth his salt wouldn’t allow the plane to get out of trim in the first place”.

            Well, well — and it happened to the crew of a brand new **American** plane…fancy that.

            I wonder how much force they had to use to turn the trim wheel…was manual input from both pilots needed?

            “Most scrutinized plane in history”

  13. This is factual information on what went wrong with the 767/KC-46 fuel tanks.

    “A supplier making the center fuel tank for both aircraft informed Boeing that it did not follow procedures for primer and paint adhesion testing of these tanks, before delivery. This means that Boeing now has to strip the paint and primer from the interior of these tanks, reapply it and test it.”

    • Trans…..
      It is a leap in logic to say that the lack of testing means the product is bad. It means that it is UNTESTED. I suspect. That the MRB action here would be to either run the tests on the existing coupons if they still exist, or to run an adhesion test on the article itself. Stripping and repaint and reseal is not yet indicated as there is a question of the actual condition of the untested surfaces. There is a very high probability that there is no rework needed and the test escape is limited to the test itself, but a test review will be necessary to ascertain the actual article condition……

      • It appears BA has to “clean, and apply new primer inside” the fuel tank at the minimum, at least that’s what BA said publicly.

        • Pedro.
          Actually, BA hasnt said what is required to be done yet, They said they were getting to the bottom of it. What IS actually known, is that the testing required to validate the paint application process is not there.
          There may be a way to test it now, there may not be a test path forward. What we are missing is “the reat of the story” and stating as fact that a strip and reseal is NECESSARY is a statement not supported by facts in evidence today. It very well may need to be done, or not, bjt saying it is needed as a fact today is not intellectually honest given the actual news being reported.

        • @Geek

          -> “For the affected planes, *Boeing said* its mechanics in the factory will have to defuel the tanks, then inspect, clean, and apply new primer inside …

  14. “Boeing is suffering a new rash of airplane problems.

    A supplier’s manufacturing quality mistake has prompted Boeing to delay deliveries of 767 freighter aircraft and 767-based KC-46 refueling tankers for the U.S. Air Force, the company confirmed Tuesday.

    Boeing is investigating the extent of the problem to determine which aircraft will need a lengthy fix.

    Separately, inadequate tracking of the software used to customize cockpit displays for each airline is causing delays to lessors who need to switch delivery from the airline that originally ordered the jets to a different one.

    These fresh problems follow on the heels of a renewed halt to 787 Dreamliner deliveries last month after discovering an error in the structural analysis of the jet’s forward pressure bulkhead conducted by supplier Spirit AeroSystems during the certification of a 787 model years earlier. Deliveries of the 787 have not resumed.

    And so far this year, Boeing has not delivered a single 767 freighter or tanker because of this new problem: the interior of some center fuel tanks had not been properly cleaned nor the primer paint adhesion tested before the tanks were shipped to Boeing..”


    • Shouldn’t BA have embedded QA/QC in its supply chain (especially critical/major suppliers)? How is it possible that this “lapse” has gone on for so long without BA knowing?? Asleep at the switch??? 😴

      • Its like Airbus senior executives who bribed people to get sales ….they lie to their superiors

        • BA had two aircraft fell from the sky and killed almost 400. Which one is worse, may I ask?🤔

        • Obviously the US is on a much higher service level in that domain. POTOUS brings the bribes
          ( and/or whip as may be 🙂

          other post:
          I don’t get the Japanese affinity to masochism in respect to US interaction.

    • Wow! A potential order for 20 737 MAXs from an airline that already operates 43 737 NGs — stunning news. Thanks for drawing it to our attention!

      Do the sources say what discount JAL will get?
      – If it’s 60% — like the recent Greater Bay Airlines deal — then BA will make ca. $100M on the deal. That’s enough to pay about 2.5 weeks of loan interest!
      – If it’s 65% — like the recent SW deal — then BA will make ca. zero on the deal.
      – If it’s 69/70% — like the recent Ryanair/United deals — then BA will lose ca. $100M on the deal.

      One way or another: great news for the balance sheet 😉

  15. People familiar with the matter say JAL was interested in A32Xneos and eventually opted for 737MAX-8s and 737MAX-10s

    https://ca.finance.yahoo.com/news/boeing-said-nearing-737-max- 093009825.html
    Impressive how the 737MAX has come back stronger than ever after going through a two year slump. My takeaway is that the MAX-10 will truly expand the 737MAX family to be more competitive and comprehensive than ever.

    (!) For those who remember what I’ve been saying about this for months!

    (!!) Not wishful thinking here just an analysis that arose after Boeing canceled all aircraft development before 2030 announced end of 2022…

    (Cash-flow on the table to begin with)

    • I guess some entities trusr anonymous (“persons familiar with the matter”) sources.

      Funny ol’ world, these days.

  16. I tried to explain the seriousness of the software problem last night, but the WiFi in the hotel kept failing. Let me try to clear up some misunderstandings on this topic, which BTW, I don’t think hardly anyone in senior management at Boeing understands, including Mike Sinnett from what I’ve seen of his approach to things. He has had more than enough time to do the right things with the tanker RVS and the MCAS, and hasn’t.

    Software is in almost everything that uses electricity – often in surprising ways, and in places where a rational view would say it shouldn’t be. This has to a lot to do with the way EE’s are trained.

    Starting back in the 1970s, the lab benches where prospective EEs would work on their projects started to change. Initially, a station would occasionally be cleared off of its soldering tools and chip programming equipment would be gotten out of the cabinets and setup to support projects involving early PROMs (programmable read only memory). Two things transformed this over the next two decades. One was Moore’s Law and the other was the invention of the commercially viable FPGA (field programmable gate array). By the late 1990s it had become possible at some of your lower-end schools to get your EE degree without having ever picked up a soldering iron or gun. This has had profound impacts on products.

    Your typical least cost engineer doesn’t know how to design a circuit without using a least cost chip. For products as simple as a flashlight with a strobe on one ehd, if you take it apart what you will find inside is tiny circuit card with a chip on it. OK, so what does it take to make a strobe blink? A- one capacitor. So how many IC components are in a least cost chip? A – billions and billions.

    You will often hear me talk about the serious problem of the management of complexity and how it has gotten away from us in many situations. Designers use software when they should not. People trying to fix a problem will often start playing with code, when what they should be doing is looking at the total system architecture and design concept. But quite often, in the problem diagnosis process it never occurs to anyone to stop playing with the code and take a look at the totality of the situation.

    When you do really dumb things in an attempt to drive costs out of product engineering where mistakes can have catastrophic results, often what you are doing is committing to having those catastrophic results. The only question is at what rate your are going to reap those results and how many people are you going to maim or kill with each event.

    The LA Times was the first place in the media where I saw someone make the connection. They did that in an investigative series on the crash of the shuttle Columbia. But sadly, not enough people in legislative and regulatory roles understand just how bad things have gotten.

    • I’d go with a major part of what you write.
      ( I’d dissent on some of the chips and FGPA things )

      Major lack today is
      * systemic understanding.
      * the trend to bury simple functionality
      under a large heap of spaghetti coding.
      * quick and dirty solutions that trespass on defined interfaces.

      I started using programmable chips ( (E)PLD, GAL,FPGA, .. in the mid 80ties. it enable to separate conectivity from functionality. It allowed to bind simple function modules together to a functional whole.

      funnies: bathroom infrared heater I bought doesn’t have switch. just a handheld remote.

      • OK, I don’t have a problem with that. I should have also acknowledged that the education quality decline has not impacted the better schools.

        • RTF:

          You remind me of an electrical guy who wanted to understand how the entire sequence of operation worked on Transfer Switches (all relay logic)

          He never understood how I fixed them. You just take a meter that you don’t understand how it works and start trouble shooting. Simple matter of what it did. That puts it in the emergency side or the utility power side.

          How far did it get, full transfer or mid transfer, that cuts the area down by another 50%.

          Go to the mid point and is there power there? If yes, keep going down the chain. If not, go back up the chain.

          If you are going to work with stuff you have to accept software works for it and has been tested. The days of Neville Schute and working calculating by slide rule are like way over.

          Anyone that tried to get into the detail weeds wold be older than Mathesula by the time they had it figured out.

          • Actually, you are touching on a key point here TW, and I don’t think we are that far apart, at least on this point. It is ultimately about trust in each component in the stack of any system. Well done, a system’s architectural design reinforces trust, as opposed to calling it into question. If system complexity is not managed, then that trust reinforcing process is lost.

    • @RetiredTechFellow

      There is a big problem where engineering disciplines intersect. Electrical engineers have a poor understanding of software and software engineers have a poor understanding of electronics and especially the systems which they try to control with software. I have seen electrical engineers blaming “the software is acting funny” when the design was missing a pull-up resistor and which caused an input pin to be at undefined state during power up. I have been asked to do a short circuit protection in software and the electrical engineer did not understand software latencies and the fact that software protection is too slow in the real world for 100% of the cases (but it works on the bench when I tried it…!).

      It is going to get much worse in the future. Machine Learning makes a lot of new systems possible, but the way it is implemented is in general atrocious. I have seen safety critical implementations of LIDAR and image processing where the designer has a PhD from a top university, knows how to “make the tools work”, but the actual implementation is sub-standard and fails all safety cases. But it works on the bench and the investors need to see a quick return so out it goes anyway. In this case, the company closed shop last December so that problem has been fixed.
      I am trying to mandate some ML processes as pushed by EASA but nobody seems to understand why that is needed because safety is not taught in universities and following engineering processes “add unnecessary costs” (CMU Software Engineering Institute has proven for decades that it saves costs – and lives).

      • Agreed – your points are good ones. I really enjoyed the dynamic involved in bringing multiple disciplines together. It often requires a thick skin on the part of the participants, and it always requires a commitment to safety, a quality product, and the customer’s mission requirements on the part of the leadership team. The weak leadership issue has driven many good people away from Boeing. Many process pieces had to fail for something like the MCS design to actually make it into delivered planes.

  17. 🤔

    Southwest CEO says airline not counting on deploying Boeing MAX 7 jets in 2023

    • Did you see LNA’s reaction to this news on its Twitter feed?

      “How in the world Boeing was unable to certify the MAX 7 in 2023 is just astounding”

      Presumably those SSA’s are still not up to scratch.

      One wonders how the MAX-10 is coming along…

      • Boeing has planned the Max 7 for 2023
        The Max 10 for 2024
        The 777X for 2025
        Three years of continual certification.

        The 787 needs resources to get through the myriad of problem.

        The Max 8/9 backlog is taking longer to clear.

        Then there is the supply chain issues that seems to have handcuffed everyone in the industry.

        30k people were let go in 2020. More took retirement with the recent pension timing thing.

        There are an awful lot of tasks to be competed and just not enough heads to get them all done, in a timely fashion.

        • See @SPEEA’s tweet thread below.

          It should be a reply to my earlier post. Oops! 😬

        • @ Frank

          Per @Pedro’s Tweet link below: don’t worry, Indian engineers to the rescue!

          • #shouldbefine

            Too bad about those now-unemployed US engineers, but hey, that’s progress.


        • So does this mean that Boeing will *not* clear the MAX
          7 and 8 backlog by the end of 2022, as they had claimed
          at one time?

          BTW, the KUOW link provided by Bryce is a good one,
          at least for the evidence-based community.

          • Late 2024 now, according to the article below.

          • @Frank
            Actually, the referenced KUOW article says that “most” of the inventory will be cleared by 2024 — so it’s actually going to stretch into 2025.

            No hurry…”Because We’re Worth It”™

          • I don’t believe there is any MAX7 backlog.

            MAX 8 and 9 yes.

    • BA planned to deliver 114 planes to WN in 2022, but could only deliver 69 (a 40% miss). This year BA says 100 for 2023, pushing more into 2024. No wonder BA’s available future production slots are “disappearing” fast!

      • And how is Airbus going to compensate its customers delays when its delivery guidance in Jan was 60 pm averaged over year , yet its was only 69 for whole of first 2 months by end of Feb.

        I think the A321XLR (nee A322) will be punted further into future for EIS so as to be able to make up for existing missed orders who were delayed. they can blame EASA or engine upgrade delays etc

        • When does aircraft delivery spread out evenly during the year?? Roll eyes!! Are you new here???

        • By your logic, how much compensation BA has to dole out in 2022 & 2021 for missing its own delivery guidance? 🤭

  18. …”Airbus has told customers they will face longer waits for its latest jet — the long-range A321XLR — as the manufacturer contends with production snarls and regulatory checks on the model’s new fuel-tank design”…

    https://ca.finance.yahoo.com/news/boeing-said-nearing-737-max- 093009825.html
    For only 1 year delay of the A321X certification that JAL would not want it and opted for 737MAX-8 and -10?

    It’s hardly believable.

    – Either the journalist wanted to make “article sensation”,

    – Or Airbus would announce an potential delay soon?

    Anyway it’s a bit strange

  19. Regarding the 737 MAX inventory (and its S L O W clearance):
    Further to the info / photo’s that LNA gave us last week, we now have this interesting article:

    “Stockpile of Boeing 737 MAX jets assures Moses Lake years of work”

    “A Boeing spokesperson said the company is consolidating its undelivered 737 inventory in Seattle and Moses Lake and doing the needed rework on the single-aisle jets in Central Washington. Port of Moses Lake Airport Director Rich Mueller said Boeing has had between 100 and 140 MAX jets parked around the airfield lately.”

    ““We expect most inventoried airplanes will be delivered by the end of 2024,” a Boeing spokesperson wrote in a follow-up email Tuesday.”

    “West identified several limitations that could constrain a ramp up in deliveries of the stored aircraft. Those included competing demands on Boeing’s skilled workforce and uncertainty whether some foreign airline customers still want all of the aircraft they ordered before the grounding, which was closely followed by the pandemic-era travel slowdown.

    “Well over half of the remaining 737s in storage were built for Chinese or Russian airlines. The Russian ones can’t be delivered now because of sanctions. It’s unclear how soon Chinese airlines will resume taking deliveries amid rising tensions between the U.S. and China.
    caption: The majority of Boeing 737 MAX jets remaining in long-term storage in Moses Lake were ordered by Chinese airlines years ago. Some of them may no longer be wanted.”


  20. Bryce

    …”Wow! A potential order for 20 737 MAXs from an airline that already operates 43 737 NGs — stunning news…”
    Come on, be objective.

    Owning 737NGs is not enough. The symbolism here is that Airbus lost.

    Certainly the reason why you did not share this link for lack of objectivity.
    I had to do it for you unfortunately…

    • Perhaps one should wait until the order is actually placed?
      You are aware that the order still hasn’t been placed, aren’t you? French does contain a conditional future tense…

      Here’s some emphasis for you:
      “Bloomberg is reporting on 8 March 2023 that Japan Airlines is *close to* an order for B737MAXs. According to the news outlet, JAL is *expected to* order up to twenty MAXs, which will *likely be* a combination of MAX8s and MAX10s.”

      It’s good advice to avoid counting chickens until they’ve actually hatched 😉

      • Lol!

        Your “conditional” argument does not take away strictly from the fact that you did not share D. Gates’ link concerning the upcoming order of 737MAX-8 and -10 from JAL.
        Which proves that you were convinced of the order in favor of Boeing!
        And now you’re bouncing back with the “conditional” argument.

        If so, you should have shared the link 48 hours ago and suggested that Airbus still had a chance.
        We could have discussed it in a civil way, but no…

        In truth you know that Boeing won so why “conditional” now?

        You’re just trying to bounce back
        because I’ve caught you red-handed on several occasions regarding your obvious lack of objectivity.
        And you know it…

        • Another demonstration of the old saying:
          “Truth is stranger than fiction”

          • Bryce, where is your defense for this? Lol a monkey hiding his face like a smiley? Only this ? Alright…

          • Sadly Bryce is not in it for discussion and interest in aviation.

            When proven wrong he deflects or goes silent.

          • Sadly TW is not in it for discussion and interest in aviation.

            He just wants to expound (excruciating and irrelevant) details of his various escapades as a mechanic.

      • To be fair, Bryce – JAL has been a staunch Boeing supporter over the years. This is their fleet:


        The only order Airbus ever got was the current A350 order they are delivering to them.

        Check out the historic fleet. Boeing all over the place. The A300’s that they flew, they got in a merger.

        (Which is why, IIRC correctly – that A350 order was a shock to the BA system)

        I’d be really surprised if they went Airbus. Just the way it is.

        • @Frank,
          I completely expect this order to go to JAL, seeing as they are already a 737 operator — I even alluded to this fact in my post above.

          I was responding to the weird/otherworldly rubbish about why the story wasn’t posted here yet: instead of “lack of objectivity”, I suspect it was just “lack of firmness”…don’t you think?

          If every pre-order negotiation in the aviation world were to be posted here, there’d be no room for anything else.
          Do you remember how many times we were told that the recent Air India order was “imminent”?

          Why not just wait a few days until the order is announced, at which stage we’ll know the exact numbers and mix…and maybe even an estimate of the sale price?

          • Remember the recent AI mass “order” is letter of intent. 🙃

          • You are not objective Bryce,

            JAL is one of the only airlines that does not yet have new NB’s NEO’s or MAX’s

            It has already been 12 and 13 years since these very efficient aircraft were launched.

            They still have 737NG’s that will still fly for 4-6 years, it’s too long
            This order will most likely be firm!
            Why do you want to cast doubt on that?

            Because it’s Boeing??

          • Checklist

            Not exactly:


            Those NG’s are 13 years old. They also sat during the pandemic (3 are still parked) and what matters alongside fuel efficiency is when their last heavy check was.

            They are also the 3rd oldest (or 3rd youngest) of all aircraft in their fleet, which has an average age of~ 11 years.

            Their 777’s are almost 17 years old and their 767’s are almost 16 years old.


            Checking out their financials, JAL has this to say:

            Depreciation and useful life
            Depreciation is calculated on depreciable value mainly by the straight-line method over the estimated useful life of each component.

            Flight equipment: 8 to 20 years

            Of the NG’s that they have, 47 are owned and 17 are leased.

            (on a side note; I find pretty extraordinary that of their fleet of 227 aircraft they have, 202 are owned….only 25 on lease.)

            So it also all depends when those 17 on lease are due to go back.

            But all signs would normally point to a Boeing order, here. It’s theirs to lose…

  21. People (there are about 4 or 5 of you): Knock off the person biting. I’ve told you over and over. Next step is to close comments for everyone.


    • The comments always contain important news and information. That would make her side worse. Clearly.

    • Re: “Next step is to close comments for everyone.”

      Would it make more sense to close off comments only for the 4 or 5 who are engaging in the “person biting”? Why punish everyone for the actions of a small group of people who turn the comments section of almost every post that is open to comments into a never ending debate on their off-topic pet issues laced with personal insults? When I did some elementary through high school teaching a long time ago, if a few students in the class got in a fight, used unacceptable language, or engaged in other unacceptable behavior, I assigned detention to, and/or sent to office, only students directly involved, and that worked well for me. I did not assign detention to the whole class or send the whole class to the office. It made no sense to me to punish those who had behaved according to my expectations for their grade level, for the below grade level behaviors of others that they had not been involved in.

      Personally, I used to enjoy reading the comments here, and exchanging information and viewpoints with others with an interest in aviation, but I now rarely bother to read the comments because they have turned into never ending mean spirited debate between, and sermonizing by, 3 or 4 people about their pet issues, no matter whether the post they are replying to had anything to do with their pet issues, and I find this to be incredibly boring.

      • Alternatively, how about making a distinction between “proactive” and “reactive” person biting, and dealing with the “proactive” culprits? That then automatically removes the need for the “reactive” response.

        Cause and effect.

  22. As I have already said before.
    I think the reason that D. Calhoun canceled the development of a brand new aircraft at BCA is the computer tools.

    It would seem that there was still some hope in the middle of 2022 in the design offices.
    Boeing still wanted to dispense with having a brand new efficient engine but I strongly believe that the CEO was still betting on computer tools to design and assemble a brand new aircraft that would actually be launched around 2025.


    Something negative must have happened that was beyond them.

    The tools were apparently no longer enough. So they are now waiting for 2030-2032 to launch a brand new aircraft which includes the mature tools for design, assembly and brand new engines…

    • Cklst
      It was all down to ghe inability to staff to the timeliness needed. If you go back through the LNA archives and see the very specific engineering needs they were seeking, you would understand. Thise bodies aren’t there and without them, you can’t launch new programs.

    • You don’t buy a software suite , press the DWIM button and then just start getting a super design.

      These things develope. The SW progresses and the competence in use must progress too.

      This is massively synergistic.

      Afaics : Airbus seems to have progressed nicely in the domain of parametric design and universal system simulation/testing. and they seem to use clearly defined interfaces 🙂

  23. GE is working to fix LEAP engines. I’m waiting eagerly to hear from AAB.

    -> “The problems with LEAP engines, which power Airbus and Boeing jets, is occurring in regions like the Middle-East.

    Sheldon said changes are being made to the engine’s turbine blades and nozzles, which are getting affected by hot and harsh conditions.

    “Hotter engines running in hotter environment is driving this issue,” he said on the sidelines of GE’s investor conference.

  24. Let’s face it the NEO with the GTF is a mess.

    Airbus squandered a golden opportunity to run away with the single aisle market.

  25. OK, so now we know what BA is giving India in return for the recent order from Air India:

    “Boeing Co will set up a facility in India to convert 737 passenger planes into dedicated freighters to tap into regional and global demand for the service, the company said on Friday. The deal adds to Boeing’s $1 billion supply chain sourcing from India.”


    AB is already committed to manufacturing a large batch of C-295s in India — let’s see if it adds anything else…

    • C-295 a nice little TP .
      Its 16 flyaway from Seville and only a final assembly plant in by Tata in Vadodara, from Modis home state of Gujarat, for the remaining 40.
      Replaces the Avro 748

  26. NB deliveries from both OEMs are sluggish so far in March (Planespotters):

    AB: 13 (6 A320, 7 A321)
    BA: 9 (3 of which from inventory)

  27. -> ” … the first major diplomatic example of a post-America Middle East.

  28. With regard to the discussion above about MOODY’s positive outlook for BA, it’s interesting to note that the same agency most recently had a credit rating of A1 for SVB, and Baa1 for its subsidiary Silicon Valley Bank.
    The latter collapsed this afternoon — the second biggest bank collapse in US history.
    Looks like MOODY’s is somewhat behind the curve…(again)

    • And out of 31 major brokerages that covered SIVB, only one had Sell on it. I kid you not. 🤭

          • One wonders if BA had any of its cash deposited at SVB?
            Deposits are only guaranteed up to $250k — after that, depositors are at the mercy of what can be recovered by the administrator/liquidator.

          • Boeings “bank” is well known to be Ex-Im Bank !

            That is a complete corporate welfare , for this deal just last year
            ‘The Export-Import Bank of the United States (EXIM) on Friday said its board of directors approved an $811 million loan guarantee to help finance the sale of Boeing wide-body aircraft to French-Dutch airline Air France-KLM SA’- Reuters

            as for deposits/borrowings etc , Boeing Treasury HQ was until recently in Chicago and now Washington DC and would deal with the very biggest nationwide banks. It probably has a continuing relationship with a Seattle area bank over decades too

            They probably hadnt even heard of that San Francisco area based bank who focussed on Silicon valley players

          • @ DoU

            Wrong again, Duke.
            The ExIm (Export-Import) bank is a federal institution that gives loan guarantees in order to facilitate transfer of title during export/import activities. It does so for corporations that are unable to secure those loan guarantees elsewhere, e.g. due to weak finances.

            It’s mockingly called “Boeing’s bank” because Boeing needs to make such frequent use of it — but it’s not where Boeing does its commercial banking.


          • ” Ex-Im Bank ”

            creation objective was isolating commercial risk from political vagaries.

            Similar see “Hermes credits”

            obviously the use case has changed.

          • @Bryce You have this exactly right. A deeper exploration of the ExIm Bank is would require digging into the nature of money and monetary policy which is way beyond the scope of this discussion.

            I actually have a great deal of sympathy for folks that get this wrong. There is so much mythology surrounding then nature of money and monetary policy that has been accepted as fact and even taught as so at the secondary education level that it is asking a lot for someone who hasn’t had at least a couple years of economics to have shake off the myths.

          • Mr Bryce , I know what Ex-Im bank does . It was a play on the words ‘Boeings bank’
            Ive previously highlighted Ex-Ims soft touch and dodgy accounting that essentially means unpaid interest is capitalised to avoid a customer default. The last few years must mean Ex-Im is under water on its airline loans but will have covered it up

            Strange that Airfrance-KLM is thought to be a credit risk and requires a government agency to insure that risk. Its corporate welfare of course meant for small medium US exporters but the vast majority goes to major companies like Boeing Caterpillar and other mega industrials

            let the impecunious french -dutch pay higher interest rates for their prolificacy

          • “let the impecunious french -dutch pay higher interest rates for their prolificacy”


            financing is integral to an Airframers offer.
            Following your advice
            Boeing’s offer may have been dropped
            and the “nicer” Airbus offer taken up
            Same financing cost, but better product. 🙂

          • @Uwe

            Not only a better product, but a more certain delivery schedule that’s not *conditional* on the approval of EASA 🤭

      • Different problem.
        It had invested in US Treasuries which are ‘gold plated’ hence the ratings. But the US bonds issued at the much lower interest rates have a ‘current market value’ below par. It needed the money in last 3 months so it sold at market value not par.

        Boeing has major debt not major investments

        • Sigh. So these “real” experts failed to see what’s coming in addition to failing to raise any red flags when there are serious issues like SIVB was sitting on over $15 billion unrealized losses on its HTM securities at last year end? Do you know how much unrealized losses the whole banking sector is sitting on right now??

          You think there’s no impact on BA? Hah. 🙄

          • > Do you know how much unrealized losses the whole banking sector is sitting on right now?? <

            I do love a well-posed question, even if the "banking™" sector does not.

            #shouldbefine [just like 2008]

      • The rating agencies have been weaponized a long time ago by the US (capital, politics). Whole countries have been raised or squashed on the whim of interested US centric parties.

        There are few neutral institutions left that have not been subverted to aid partisan purposes.

    • ‘ In particular, the bank put a large share of customer deposits into long-dated Treasury bonds and mortgage bonds which promised modest, steady returns when interest rates were low.’- NY times
      Its customer base with Silicon valley startups needed their money back and to do so it onsold its investments for a hefty loss ($2 bill) as they were bought when ( fixed) interest rates were low.

      • You really polluted the thread with your numbers.
        Seriously ! There are still some who think that Boeing will repay its debt within 2 years? It will certainly be years before that and aims at least for a return of cash flow on the table by 2026.

        What else ?

        • No one has said Boeing will repay ALL its debt in 2 years.
          just that its capable of repaying its debt as it comes due- as it did this year

          Free Cash flow was already positive for part FY 22 and should be for all FY23 ($3-4 bill)

          Fine if you dont agree with their forecasts , but enough with the falsehoods about the FY just past.

          • Explain to the world, please, the mechanism by which BA is going to generate FCF without generating earnings.

            Remember that earnings = revenue minus costs, and that BA hasn’t had positive earnings for the past 4 years now.

            We wait with bated breath.

          • FCF is the “earnings” that sophisticated investors use.

            For some reason you are worried by the earnings that are available for distribution to stockholders, that your ‘formula’ implies.

            We all know there isnt any left over in that fund, [its going first to bondholders instead] and they have to suffer the pain now for the previous decade of management malaise – while showering the stockholders with money. So Boo hoo to the stockholders that you strangely are ‘concerned’ for.

          • @ DoU
            Thanks for wonderfully demonstrating that you don’t know what you’re talking about.

            Once again:
            (a) Earnings = revenue minus costs.
            (b) Cashflow = cash in minus cash out.

            Now, explain to to us the mechanism that BA will use to generate (b) without having (a).

      • “Its customer base with Silicon valley startups needed their money back…”

        In other words, you’re saying that its Tier 1 capital ratio wasn’t in order.
        Rating agencies should be aware of major shortcomings like that…

        • The Treasury secretary says it was a liquidity problem not capital
          The ratings agencies cover the risk to securities issued by a bank not to the depositors funds
          When its wound up as seems to be the case , first dibs goes to bond holders , last in time is the uninsured depositors
          Who with any sense would claim Boeing had money deposited ?

          So we can discard your theories…once more

          • Not a capital problem? Reality is SIVB sold its AFS debt securities and resulted in over $2b losses IIRC, in addition to sitting on over $15 billion unrealized losses on HTM securities, they more than wiped out tangible common equity. The rest is history.

            Don’t listen to what you’re being told, do an independent analysis as long as you are capable of doing.

          • BTW was Yellen referring to SIVB specifically? Highly doubtful.


          • Many more banks are crashing … can our poster explain to us what’s the reason??

    • Scott and a couple other analysts do an outstanding job of covering Boeing, but this is very hard work. Boeing is a sprawling company with dozens of VPs that have significant budget authority. Even though they have great visibility for their particular part of the company, it was not at all uncommon during my 31 years on the inside to hear a VP say something about another part of the company that just wasn’t so. And, as hard as it is for someone on the inside, it is even harder for someone on the outside. Those that do it well have a lot of connections into various parts of the company. That’s not Cramer and it’s not most of the investment house analysts.

      As an investor, you have to know that the efficient market theory was proven wrong quite a few decades ago. The work of Kahneman and Tversky slammed down whatever fig leaf that theory had left back in the 1970s. So the smart thing as an investor is to just assume that all of the buying and selling is just noise and that most valuations are wild guesses with a healthy percentage of them not being even remotely close to what five years of future earnings discounted to PV would suggest a fair price should be.

      So the answer is to figure out a Malkiel distribution (the sectors change over time) and just accept that any churning that is going on in the funds you hold is a necessary cost for evolving the sector distribution. It’s blind, but it works out over time. So, an average return after management fees should work out to about 7.1% or so over a twenty year period. After that, trying to be super prescient about any one company, even from the inside, can be a fools errand unless you are trading on material inside information that is inside the disclosure windows when it’s illegal to do that.

      • A realistic look at BA’s balance sheet and recent earnings reports is all that’s needed.
        With emphasis on “realistic”.

  29. BA discloses the delivery schedule of the two VC-25B has slipped again, on a Friday when attentions are distracted by a bank collapse. Smells like additional charges are coming.

    • Helpful information Mr Pedro

      Now tell us how many Airbus planes have missed delivery in last two months , and just weeks after the full year guidance was released

      That would be useful info too

      • AB isn’t drowning in debt and making a consistent loss.
        BA is, so it needs every delivery it can get.

        Futhermore, delays usually entail more expenditure — something BA can’t afford.

        This isn’t about “Team A vs Team B”. This is about a sinking ship and whether or not it can be saved.

        • Bryce,

          Is a strawman argument.

          Duckeofurl raises a visibly embarrassing point for Airbus which is also embarrassing for Boeing, but the scale is greater because Airbus must deliver 7,000 A32Xneos.

          For Airbus it’s something that comes like a hair in the soup.

          The Airbus CEO G. Faury has already sounded the alarm a few weeks ago Boeing’s debt does not change anything, even if it is unfortunately only increasing,
          (may be bad for you)
          Boeing is too big to fail.

          I only see wishful thinking collapsing


          • Nothing is “too big to fail”.
            Any entity that becomes insolvent has already failed. Whether or not it is bailed out by someone else does not change the fact that it has failed.

          • Weren’t GM/Chrysler good examples of so called too big to fail??

      • Dukeofurl

        Absolutely it would have been useful if he had also announced the recovery of the 787s. But here again Pedro’s lack of objectivity hit hard👍

        • I am not convinced, not a multinational like Boeing can disappear.

          Too established in the world. The stakes are too high for the US, both because Boeing is the most important exporter and is a major player in terms of supplier of military equipment.

          To believe in such a thing is delusion emanating from obvious wishful thinking.

          The case of Mc Donnel Douglas was a different context because it was weak in terms of civilian aircraft portfolio which is a larger part than the military,… for both Boeing and Airbus, as it was for Mc Donnel Douglas different from Boeing today with renowned products such as the 737MAX, 787 Dreamliner, Freighters well established in the market, distinguished from the level of MCD…

          Sadly, Boeing is indeed content with a relatively comfortable duopoly to be (only) a good number 2.
          It is conceded…

          Ironically, Boeing executives play on that. It’s a bit arrogant, but that’$ their rule of the game and I don’t think that’s going to change.

          • This was said of the Roman Empire. Every institution that humans build can and probably will disappear eventually, including Kongo Gumi, although at 1544 years since its founding, it is still going strong. Boeing is well into its death throes. As measured by its talent base, the company today is barely a shadow of what it was 30 years ago. As measured financially, it has qualified for a Chapter 11 restructure since at least 2018, and probably since 2011.

            The major American corporations that once seemed omnipotent but are now either gone or only a tiny fraction of what they once were is painful. International Harvester was once the world’s largest industrial organization. One of the large retailers from before 1960 still exist in anything close to what they once were. Chrysler is now just a brand owned by Stellantis. Going back a bit further there there was Pullman, and Carnegie Steel. Go to any American City that has a bunch of 20th century skyscrapers, and see how many of them still bear their original names, which were once household brand names. In fact, an argument can be made that except for banks and insurance companies, any company that builds itself a skyscraper is already well into its death throes due to the hubris of its leadership, and even the banks and insurance companies are far from immune to that disease.

            As the Greeks said” “Hubris is that gift which the gods bestow upon those whom they are about to destroy.” The Greeks also saw hubris as a kind of evil, which is why , Evagrius Ponticus included it in his list of eight evil thoughts, which evolved to become the seven deadly sins. The oldest known source is a line from Antigone by Sophocles: “Evil appears as good in the minds if those whom the gods lead to destruction.”

            All great companies have leaders that are tempted by the folly of hubris. The lucky company has leaders that understand this and work to offset the disastrous effects it guarantees. Prior to the merger Boeing had such leaders. This is not to say they were saints – most decidedly they were not. But, they recognized the issue and worked on it.

            Similar follies can be found in the investment community. Unbridled greed, as expressed in the foolish notion that the first duty of corporate governance is to make money for the shareholders is another good example of one of the seven deadlies in action. Money is but a measure of success, not the point of an endeavor. As a metric it is critically important. As the substance of all effort it is vacuous.

          • @ RTF
            “As measured financially, it has qualified for a Chapter 11 restructure since at least 2018”

            It’s in a metastable state financially, which will end when a “nucleation event” takes place — such as a failed payment or ratings downgrade, for example.

            Add up the liquid assets and the earnings value of the order book and they don’t come anywhere close to covering outstanding loans, scheduled loan interest, accrued liabilities and accounts payable.

            The *revenue* value of the order book is $330B but the *earnings* value of the order book (after subtraction of manufacturing costs) is only about $45B.

            What’s Uncle Sam waiting for?

          • @Bryce Again, I agree with this comment too.

            Here is where I think one has to make some inferences about what Ken Duberstein’s role has been and why he was one of the MD 4 on the reconstituted board after the merger.

            He never says anything, and you can never find his fingerprints on anything, and yet he is hugely rewarded. One has to assume that he is the fixer who has worked his magic to keep the government at bay and keep the pork rolling in.

          • @Bryce

            ***The *revenue* value of the order book is $330B but the *earnings* value of the order book (after subtraction of manufacturing costs) is only about $45B.***

            That’s at 2018 margin numbers. Seems a long time ago. I wonder when BCA gets back to that 13%?

          • @ Frank
            I was being generous.
            I forgot to use the qualifier “nominal”, but I think the message is clear.

      • @DoU

        Now tell *us* how many aircraft BA missed delivery from *2019 to present* and how much compensation it has to dole out, thanks

  30. On the discussion about Boeing disclosing numbers, I’m not sure that the company does this in a way that is easy to sort out. But, Dhiren Bechai does a pretty good job of wading through one can only assume is the deliberately obscure data that is available, and presents some of the numbers. So maybe that’s where the difference in perceptions being expressed here lies. But even Dhiren is much too easy on the company in my book. Let me cite just one example, which is relevant to the discussion as to just how far in the hole Boeing is.

    The idea of booking R&D as an asset once a commercial airplane program is formally begun by getting the board to approve offering the proposed new plane for sale (categorized as deferred costs) is typically referenced in terms of the “accounting block.” That is the number of planes over which those costs will be recognized or written off as opposed to the GAAP requirement that they be recognized as incurred.

    Prior to the 777 program, the standard accounting block was 400 planes. For 777 it was increased to 600, which made a lot of people nervous, but we easily sold more than that, which seemed to justify the pulling forward of the earnings. We weren’t building white tails to make it happen. This was quite a contrast to the way GE was not only over producing powerplant sized generators that were obsolete and for which there was no market, and then on top of that, pulling forward revenue that would be generated by maintenance contracts once they were sold, even though they knew those sales were not going to happen. Boeing was selling planes and white tails were fairly rare. Also, burning down the accumulated accounting block was done as a part of every sale, starting with the first delivery.

    Then along came 787 and McNerney. The program was so bad that under him, not only did the accounting block rise to 1600, in addition to the deferred expense, they started deferring the commencement of recognition of it. Planes were delivered with no burn down of the accumulated deferred expense happening. This provided cover to his war on the unions and building the North Charleston assembly building, and that did result in the production of white tails – well they were painted with customer liveries, but they weren’t deliverable.

    So in a sense, I think all parties to this discussion have had a point that is valid. Yes the data is available. But, but no it is not at all easy to sort out and read. Doing it is a full time job, and that job is not being done by Boeing, but rather by an external analyst. And, that makes sense. If you worked in Boeing’s corporate finance department would you want this stuff to be easy to access? These folks have pushed the disclosure requirements to the limit and arguably well beyond the limit. There are penalties for doing that, so they are in the fig leaf business.

    • In fairness to McNerney, whom I’m not really defending, he inherited what Harry Stonecipher left him on the 787 program industrial outsourcing.

      • In fairness to McNerney: would he have changed anything given a chance?

        The “risk sharing partners” model pushed the majority of outlay for developement and setting up production to those RSP. ( who then pulled in massive amounts of subsidy from their respective governments. 787 is said to be the most subsidized plane ever while Boeing could sit pretty : see : no US subsidies.)
        That cost then was smeared over “parts to be delivered” and allowed Boeing to push that into the deferred basket.

    • Why keep saying program accounting isnt accepted as a GAAP by the FASB when it is
      “The method is recognized under generally accepted accounting principles (GAAP), and accountants have justified it by arguing that the upfront costs have a future “learning curve” benefit that should be reflected somehow.”-Reuters
      Some like Lockheed, use percent- of -completion method , closely related to program accounting

      Theres rules to using program accounting and Boeing follows them, indeed its reach forward losses are when it makes changes to a particular program to meet the rules.

      Im really baffled by some claims about Boeing accounting based on ‘hot air’, which even a rank amateur like me can find out whats happening

      • OK, so let’s go through it again, but add a little more this time. Let’s start with the reason that American and International accounting are not yet perfectly in agreement. The difference, described coarsely, is that American accounting is rules based and international is principles based. In other words, if an American public company can find a rules based excuse to violate a basic principle, it might slide by, but only until the SEC screams loud enough. Also, we should note that every time we have had to replace our accounting rules making authority with a new one, it’s been because the rules approach has led to reporting distortions resulting in what should have been an avoidable disaster. That said, one advantage of rules is that they can lead to more consistency, provided they are not abused. But one thing that accounting rules and principles cannot fix is the legal mess that corporate chartering and governance are in. That one is on the lawyers and politicians, not the accountants.

        Boeing’s program accounting began because a single program (i.e. the 707/717 development) was so huge, that it was argued successfully that it should be thought of as a startup. With that in mind, the spending on it up front it was argued, should be treated the same as paid in capital for a wholly independent new company. The argument was accepted because the Air Force part of the program (i.e. the 717, better known by the customer designation of KC-135) guaranteed its success. Also, the APB was basically too slow moving and powerless say no.

        If we go by Pacioli’s equation of A = L + E, the left side was everything that was being paid for, and the right side was a contra-equity, not a liability. That worked because there was a huge positive balance to the equity, and if for some reason it didn’t work out, it could be written off without creating an arbitrary balancing number, such as goodwill. This was done at a time when the AICPA sponsored the governing body, which was the Accounting Principles Board. But, the APB had huge problems beyond being slow and unduly influenced by vested interests in what was at that time the Big 8 accounting firms. So the APB refused to publish anything useful as the financial industry started inventing ways to hide risk, which caused it to totally lose its credibility. So in 1973 FASB was created.

        So let’s be clear, program accounting was developed and allowed under under a governing process that fell into disrepute.

        Now let’s look at the principle involved and why any justification for it totally disappeared with the 787 program.

        Booking R&D costs is not allowed because of the right side of the journal entry. There is no principle that justifies its classification as anything other than a reduction of something on the asset side of Pacioli’s equation. The first thing we have to decide is which journal are we working in. Are we ignoring the income statement journals and only making entries directly to the balance sheet?

        Booking the expense as an asset puts us on the balance sheet. Booking it for what it is, an expense, puts us on the income statement. Now hold that.

        Let’s look at the statement of sources and uses of funds, sometimes called the cash flow statement. In the days of the APB there was no such thing. This was viewed as a problem for several reasons, one of which was that it made it easier to hide large potential liabilities. But setting that aside, if we look at the entries from the point of view of the cash flow statement, what we see is that the source of the expense is not retained earnings, which was the whole justification for creating this system in the first place. It can’t be any more, because there are no retained earnings. Boeing’s equity section is red ink.

        Also, the source of the cash is not revenue coming in from customers. That doesn’t even cover the cost of the inventory that had been booked for what is being delivered. This by the way is why the cash coming in from deliveries is in the face of huge losses.
        In effect, with each delivery, the inventory is being revalued, which is the equivalent of going from serialized specifically identified assets that are being carried at cost, and writing them down to lower of cost or market. Of course, waiting for a delivery transaction to this violates yet more principles, but why spoil the fun of dragging it out? Anyway, the debit side of the implied journal entry for carrying deferred expense on the books is a combination of debt and liquidation of other assets. Again, it can’t be a debit to the equities because there aren’t any.

        So now we can see that the entry is a debit to program expense and a credit to cash. It is not a debit to some made-up thing in the equity section such as a reserve account, or goodwill or anything else. Boeing’s equity section is just a negative number plug figure to satisfy Pacioli’s equation. All of the sources of funds have nothing to do with the equity section. If that’s not bad enough it gets worse – much worse.

        Let’s set aside the problems on the Statement of Sources and Uses of Funds and look at the accounting block concept. The idea is that the expense will be recognized as the initial planes are delivered. The starting assumption was that this would be done over the first 400 planes. OK, so how many 787-8s have been delivered? Answer -386, which is less than the original accounting block, but only by 14, so all but 3.5% of the development costs have been written off as expense already – right? No, of course not. In fact, virtually none of it has been burned down, plus the accounting block was increased with each reporting cycle until it got up to 1600 planes. OK, but we were rolling in the added costs for developing the -9 and -10 and 580 and 74 of those have been delivered respectively. That gives us a total of 1040 deliveries, which means that 1040/1600 or 65% of the costs have been recognized as expense so far, right? No of course not. They are still carrying virtually the entire amount.

        The entire Boeing balance sheet is just a bunch of made-up nonsense as a result of these kinds of shenanigans. I think even Jack Welch would blush at this stuff.

        So, any justification that they had under the dubious APB regime has been totally ignored. Equally, there is nothing in the way of a FASB or PCAOB that justifies carrying it as an equivalent to real estate (i.e. a permanent asset). Expenses are not like that.

        Still not convinced?

        Let’s look at it yet another way. Let’s say that Boeing corporate were to sell the 787 program and all of its associated assets to Lockheed, would Lockheed be willing to pay anything for the R&D costs that are on the books as a deferred expense?

        Coarsely, the way valuation starts is to project five years of net profits discounted by a suitable present value factor, and then adjust up and down for any assets or liabilities that are part of the deal. It’s ok to factor in synergies and other intangibles that might make it worth more or less to both parties. Would Lockheed be likely to be more impressed by the deferred expenses that Boeing says are assets, or the systems design and production quality risks? Would they pay so much as a dime for the deferred expenses?

        OK, so let’s go back to the notion that the deferred expenses are some kind of permanent asset for which there is no accounting principle to support at all. But ignoring that, let’s adjust their book value for purposes of the sale and taking them onto Lockheed’s books to the lower of cost or market valuation calculation which must be applied to all assets being transferred in such a transaction. What’s the LCM value of the asset?

        There is no way out of this using any accounting principle you can find. There is an interesting historical parallel from Pacioli’s time by the way, and it explains perfectly why all of the great merchant banks of the Italian Renaissance failed. They too were carrying assets on their books that were fictitious. Those assets were loans to royalty who were constantly making war on each other. But, those “loans” were known to be uncollectible as the funds were being advanced. Giovanni di Bicci de’ Medici counseled his heirs on these risks, and Cosimo more or less paid attention. Alas, Lorenzo the Magnificent did not. But hey, if someone on this discussion thread wants to invest their hard earned money in equity debt to Boeing that is “backed” by deferred expense, go right ahead. It can’t be any worse than Bitcoin or SVB stock.

    • The 787 accounting block started much lower , as you would expect .
      At the infamous ‘rollout’ they already had nearly 700 orders so after 2013 there were 1000 orders and 1500 ny 2019.
      It was reasonable to have much higher possible orders over the moving 10 year block

      As those who looked at the unit-program accounting comparison , the peak profit year FY 2018 unit accounting would have increased profits than the method Boeing uses.
      This is obvious effect of a profit smoothing method like program accounting. less of a roller coaster.

      • “Less of a roller coaster” only because it does not reflect
        what’s happening financially in real time.

        Cui bono?

      • If it wasn’t helping to hide the precipitous decline in the equity balance that would have been ok.

        One should pay less attention to what Boeing’s C-suite people say and more on the impact of what they do. Then, looking at the impact one has a simple choice. Are they smart people who intended the result or are they not so smart? I think Harry and Prince Jim were very smart.

      • Duke et All
        The accounting block is actually less related to program accounting than you are giving it credit. The accounting block is a budgeting tool and authorization system that allows long lead items to be timed and purchased.

        Program accounting exists because reporting results from each program quarterly provides a layer of financial reporting complexity that masks a lot of the individual unit costs from the customer base. This is important because as the customers become more able to decipher individual unit costs, their negotiating position becomes stronger, and this data if fully transparent would severely erode margins.

        The deferred production balance is another item completely. It is NOT a direct component of program accounting inasmuch as it is an artifact of a novel product with exceptionally high startup costs using accounting rules created for the Mining and Petroleum industry where literally years of capital investments are routinely made with the expectation of decades of returns. That’s not quite the same as the aircraft industry, but the genie is out of the bottle. There are very solid arguments that the DPB is not a legitimate accounting practice, but the entire process of non GAAP performance reporting give BA cover for its continued use.

        • Read what Reuters says
          Program accounting IS allowed by GAAP

          Im baffled by your utterly false claim of ‘non GAAP reporting’ in this context

          Anyway for the less financially literate like almost all of the readers of LNA, Boeing gives the unit and program accounting numbers side by side – with the recent historical included.
          Both calculated by GAAP rules
          Wheres the problem

          Boeing and Airbus report orders under different rules , its well known that Airbus has dodgy numbers there as the US accounting rule is stricter. I recall LNA provides a background for its subscribers which weeds out Airbus ‘unreliable’ orders.

          I have also noted that Boeing appears to have a much larger sum in its liabilities for paid customer deposits and progress payments[ Free money of around $50 bill] than Airbus does ( not that I understand Airbus method completely there).
          If they are compatible that would blow complete holes in Airbus actual orders ( deposits and progress payments made) rather than the
          blue sky numbers used by many to some how claim this or that plane is ‘superior’

          • That is a lot of bull you wrote there.

            The US had a lot of input on new IFRS Bookkeping metrics. Then stayed with GAAP.
            GAAP is an industry selfdesigned toolset. It allows much nicer books. comparable to Boeing’s subversion of the FAA.

            From that document:
            IFRS 15 is the complement to ASC 606:

            FRS 15 Estimate Disclaimer:
            The actual IFRS 15 impacts may differ from the estimates when adopting the standard as of 1st January 2018. The Company has not finalised the re-run of the IFRS
            15 changes on IT systems. The new accounting policies are subject to change until the Company presents its first consolidated financial statements that include the
            date of initial application.

            counter to Boeing linking ASC606 to “frame numbers” IFRS accounting presents as a reduction in expected revenue. AFAIU.

          • Geek
            Read again what I said
            You are using ‘non gaap’ in the *context* of program accounting
            Spare us the capital letters ….. hate to think you were triggered

            ‘your utterly false claim of ‘non GAAP reporting’ in this context
            virtually every company gives PR stories for media that are non GAAP figures
            eg https://seekingalpha.com/news/3928017-tesla-non-gaap-eps-of-1_19-beats-0_08-revenue-of-24_32b-in-line
            Who cares about the puffery

            This thread was about program accounting

          • “The US had a lot of input on new IFRS Bookkeping metrics. Then stayed with GAAP.” says uwe

            And why is that relevant to Boeings books or the way it counts ‘real’ orders ?

            Unlike Boeing, Airbus *isn’t subject to an accounting rule* like the ASC 606 adjustments at a program level. Therefore, the European OEM does not break down the orders at risk of cancellation by the program. Airbus only discloses the nominal value of its total adjusted order book in its annual report.
            LNA analyzed July 2020, November 2020, August 2021, February 2022, and August 2022 Airbus’ and Boeing’s order books to identify orders at risk and come up with an apples-to-apples comparison. “


            LNA , unlike yourself doesnt do falsehoods

          • @Dukeofurl, March 12, 2023

            You really have a thing for ad hominem attacks and diffuse nonsensical answers.

          • A chatbot that fails reading exercise and whose sole purpose is to spread propaganda.

        • DUKE


          I made no comment that program accounting was non GAAP.

          I DID SAY that NON GAAP reporting gives Boeing Cover to continue to use the DPB as they do.

          Boeings auditor agrees with me and gos so far as to make reconcilliation explainations of GAAP vs NON GAAP reporting on page 135 of the Latest annual report.

          I could care less about what reuters said because it doesnt address my very specific statements and your attempt to defuse facts by obfuscation are offensive.

          • There is no page 135 in the 10K or annual report of Boeing for FY 2022

            We can assume you arent on the right page then !

            Regarding non GAAP amounts they use , they are followed by the GAAP numbers
            eg losses from operations page 23

            Boeing also says
            ‘Our Consolidated Financial Statements are prepared in accordance with GAAP which we supplement with certain non-GAAP financial
            information. These non-GAAP measures *should not be considered in isolation* or as a substitute for the related GAAP measures’ pg45

            Where is the evidence program accounting isnt allowed by GAAP

            Your extraneous claims are all gobbledygook and easily refuted …page by page

          • DUKE WROTE……. There is no page 135 in the 10K or annual report of Boeing for FY 2022.


            Heres the link https://www.boeing.com/resources/boeingdotcom/company/annual-report/2022/Boeing-2022-Annual-Report.pdf

            Heres the copy paste of PG 135

            Non-GAAP Measures
            Reconciliation of GAAP Measures
            to Non-GAAP Measures
            The table below reconciles the non-GAAP
            financial measures of core operating (loss)/
            earnings, core operating margin and core
            (loss)/earnings per share with the most
            directly comparable GAAP financial measures
            of (loss)/earnings from operations, operating
            margins and diluted (loss)/earnings per share.
            See pages 45–47 of Form 10-K.
            2022 2021 2020 2019 2018
            Revenues 66,608 62,286 58,158 76,559 101,127
            (Loss)/earnings from operations, as reported (3,547) (2,902) (12,767) (1,975) 11,987
            Operating margins (5.3%) (4.7%) (22.0%) (2.6%) 11.9%
            Pension FAS/CAS service cost adjustment (849) (882) (1,024) (1,071) (1,005)
            Post-retirement FAS/CAS service cost adjustment (294) (291) (359) (344) (322)
            FAS/CAS service cost adjustment (1,143) (1,173) (1,383) (1,415) (1,327)
            Core operating (loss)/earnings (non-GAAP) (4,690) (4,075) (14,150) (3,390) 10,660
            Core operating margins (non-GAAP) (7.0%) (6.5%) (24.3%) (4.4%) 10.5%
            Diluted (loss)/earnings per share, as reported (8.30) (7.15) (20.88) (1.12) 17.85
            Pension FAS/CAS service cost adjustment (1.43) (1.50) (1.80) (1.89) (1.71)
            Post-retirement FAS/CAS service cost adjustment (0.49) (0.49) (0.63) (0.61) (0.55)
            Nonoperating pension (income)/expense (1.47) (0.91) (0.60) (0.66) (0.24)
            Nonoperating post-retirement expense (0.10) – 0.03 0.19 0.17
            Provision for deferred income taxes on adjustments 0.73 0.61 0.63 0.62 0.49
            Core (loss)/earnings per share (non-GAAP) (11.06) (9.44) (23.25) (3.47) 16.01
            Weighted average diluted shares (in millions) 595.2 588.0 569.0 566.0 586.2

            PG 135

          • DUKE
            I never said Program accounting was NON GAAP. Show me where I said that. I DID say that BAs use of non GAAP practices provides them cover. Thats far different.

            I copy pasted the NON EXISTANT PG 135 and sent you the link.
            I suggest an apology is in order,

        • BTW, that reciliation to GAAP seems to be missing its footnotes and supporting calculations. It also is limited to operations, so there may be some non-GAAP stuff still on the balance sheet even though they restate going back several years.

          I’m going to guess that expenses for fixing the 737, 777, and 787 in those periods, which would have been rolled into deferred expense the way things worked when I was on the inside, are what is being adjusted, but not the deferred expense that is still on the balance sheet from 2001 through 2015. Also, the text of the report suggests that they extended the practice of carrying R&D costs as an asset to some defense programs as well – notably the tanker and Air Force 1 messes. But, those should be within the scope of the adjustments being shown.

          One of the realities of audit work is that disclosures are negotiated with management, and large firms are loathe to lose large lucrative clients. Invariably, when things are bad in a published audit report, in reality they are actually worse than the disclosures indicate. It’s just a reality that comes from the fact that we live in an imperfect world.

  31. Yes that’s true.

    They were both part of GE while the financial engineering based on long life cycle products was being developed under Welch. According to Mann and Gryta, Immelt claimed he knew nothing about what was going on with the generators and maintenance contracts. I don’t think Welch has ever answered any direct questions on the topic. And, I’m sure that Stonecipher and McNerney would make the same claim of ignorance, and insist that gutting the company to provide enough money for the stock buy-backs, which in turn provided cover for engineering the board to pump up their own pay and retirement packages was not their intent. Both would insist that it just worked out that way. But, the similarity between 787 and GE Power is too great to ignore. The long life cycle was enough to give Welch cover well into his retirement, and effectively that’s what has happened at Boeing as well with respect to his two trainees.

    It would be impossible to prove that it was all part of their plan to eviscerate the company and be gone before the resulting house of cards collapsed, but that standard only applies in criminal law. What justice requires here is for someone with standing to craft a good tort case. Then the standard of proof would be the preponderance of the evidence.

    An interesting question remains as to the intent of Kellner and Calhoun as they continue to run a bankrupt company while they bleed it of its remaining wealth.

    Yet another interesting bit of speculation is why Immelt was chosen to succeed Welch. Maybe his having been the most removed from the shenanigans with the generators and maintenance contracts was why he was chosen. His lack of familiarity with what was going on would have maximized the amount of time that would lapse between Welch’s departure and the discovery of what the problem was. The others knew more about big ticket long life cycle product manufacturing and accounting products than what Immelt would have learned dealing with plastics, appliances, and healthcare equipment.

    I prefer to think like Agatha Christie’s Jane Marple. As she said in They Do It With Mirrors: “The worst is so often true.” But of course that is merely fiction – isn’t it?

    • “Yet another interesting bit of speculation is why Immelt was chosen to succeed Welch.”

      He was chosen over McNerney and Nardelli.

      Immelt was a blue blood. His father was a top executive at GE. Also, Immelt had the “right” East Coast establishment pedigree – Ivy League education including Harvard Business School.

      Many current Boeing top executives are sons and daughters of former Boeing executives. Management runs the place like a country club as I have no doubt you are aware.

      • Yes. One of my engineering and tech fellowship friends was required to wine and dine their children instead of doing the work that needed to be done. He was quite disgusted by demands that he do things like taking them on expensive skiing vacations on the company dole. He finally had enough and left so he could work on things that fly.

    • I think a few of us here may be talking past each other. So let’s backup and define some terms.

      Program Accounting is really just treating a single commercial airplane program as if it was a separate business unit, and then consolidating its results in two steps, first into the whole of BCA, and then into Boeing corporate. There is nothing wrong with segmenting a business for accounting purposes in any way that makes sense. So in that sense, there is nothing wrong with program accounting. It’s not an issue as to whether it is GAAP or not.

      Within BCA’s approach to segmenting its books since the 1950s is a non-GAAP treatment of product development costs. That treatment does not have any impact at all on the segmentation approach. Saying that program accounting is ok under GAAP is ok, but not as an argument to refute the reality that carrying R&D expense isn’t. It’s like countering an observation that apples are good with banana peels are annoying. It’s a non sequitur.

      That said, GAAP isn’t always right. This is where the rules versus principles issue comes in. Boeing’s argument that writing off the R&D costs of a new plane over the first few hundred units made a lot of sense as a principle. But, there were some huge provisos to that. They had to be written off in a brisk orderly manner, and there had to be a sufficient equity balance to off-set them on the balance sheet. Both of these requirements were easily met from 707/717 through 777. They were both violated on 787, and that removed the principles based justification for the departure from GAAP.

      There is a way that this approach to accounting for super costly product development could go forward again, and not be all that controversial. It’s quite similar to what Clayton Christensen proposed as “the innovator’s solution.” I’m not referencing his book of that title here, but rather the observations he made in the latter parts of “The Innovator’s Dilemma.” His second book is problematic at best. Christensen observed that when a new product had to be developed using a different business model that was incompatible with the one already in use, that the right way around it was to set it up as its own separate company. That way there wouldn’t be any cultural issues stemming from the need for the parent organization and the new product team to be focused on very different metrics.

      A recapitalized Boeing could do the same thing. It could setup new programs as separately capitalized entities with the equivalent of paid-in capital constituting an adequate equity section with a positive balance, then there would be nothing wrong with that, at last not until the program went into failure mode as the 787 program did. Then an interesting choice would be on the table – sell, liquidate, or inject more capital.

      What one would never want to do is pretend that a business is healthy when it is barely on life-support. And that’s really the problem here. The old BCA Finance team, which is now long gone, could not conceive of a situation in which a new airplane program would be managed so poorly.

      • There are some keys to program accounting, that tripped BA up:

        1) It requires accurate estimations of revenues, expenses, dev costs. That hasn’t happened. Perhaps if mgmt didn’t tell engineering “You have $8 billion – make it for that much….”

        2) Margins are supposed to increase, over time – as efficiencies kick in. That hasn’t happened. They’re on their 1,000th 787….and are having to declare ‘abnormal production costs’. This is bad. This is supposed to be gravy train time.

        3) Kicking the can down the road. They threw everything they could, into the DPB, when stuff like the battery delay happened. Technically – it is correct, it cost them more money to develop the aircraft. How they could keep taking profits out of the program…is not right.


        Boeing is in a pickle. After all the math is done (removing tooling and the deferred production balance), they have $44 billion in commercial inventory. They have another $17 billion in cash.

        They’ve taken in $53 billion in deposits (as well – some of that may be defense). They also took in another more than $40 billion in debt. Call it $90 billion, just to be really nice.

        $61 billion in cash and inventory.

          • Yessir – there she is. Eyesight is still good, I’m happy to report. Brain functions seem intact, as well.

            Now if we could just fix that taste in football and hockey teams, everything would be A-OK. (I jest, I like Pete Carroll.)

            I’ve given up responding to him. Doesn’t matter what you say, it’s always “But there is $50 bil on deposits and $400 bil in orders”

            He’s just trolling us…

          • The question was intended for me, but I would like to make an observation that is less about the question than the comment about telling engineering what their budget is and then managing to that. Simply put, one cannot successfully design a plane with that approach.

            You can make a good estimate of what it will cost to do something, but the degree of uncertainty will depend on how different it is from what has been done before by the same people, especially those in technical leadership roles. The way to control costs is to manage schedules and deliverables. Replace the idea of managing to a fixed budget with one of continually updating your estimates of what it is going to cost to get to the finish line. Doing it any other way is a certain recipe for failure and massive cost overruns.

          • Frank said…..
            I’ve given up responding to him. Doesn’t matter what you say, it’s always “But there is $50 bil on deposits and $400 bil in orders”

            He’s just trolling us…

            He is also completely wrong about the deposit amounts. 50 billion is laughable. Heres why……. when you order an airplane from BA,
            there is a small fee due to place an order and less so for an option.
            The real money is placed into BAs hands in 3 points in the assembly process. 1st is at LSO freeze date of the first loaded control code. LSO freeze dates are the last date that changes can be made to the assembly process without causing out of position rework. LSO freeze is a back off from the control code load dates and is tightly scheduled and linked to the MRP system. The second major funding point is usually set up to be wing body join. The 3rd place is at the completion of the last scheduled C flight. Usually C2 as there are not a lot of birds that need a C3 or higher flight. For Duke to maintain that 50 billion has been deposited flys in the face of the understood common process for progress payments at Boeing.

          • hello Mr geek
            this is from Boeings 10K
            Advances and progress billings FY 2022 53,081 FY2021 52,980

            So thats $53 bill in customer advances and progress payments ( out of $400 bill of orders

            You seriously need help if you think thats either small change or not very useful free money for Boeing as it does the actual build of its customers planes. Some say only 50% is left to pay upon actual delivery

            hehehehe, chortles from downing another unsophisticated commenter with actual facts …they hate it when you do that

          • Duke
            Lets stay on point.
            Have you found page 135 yet?
            Get back to me when you find it.

          • @PNWg
            I just read Frank’s comments above.
            He’s right about “ignoring the troll” — I’m going to join him.
            You can cite all the sources you want — it won’t have any effect on a troll.

          • @Retired Tech Fellow

            Wasn’t really a question – but yes, you are absolutely correct. It goes to the BA ‘squeeze every last drop of blood’ mentality.

            To this point of yours:

            ‘The way to control costs is to manage schedules and deliverables.’

            They seem to have blown that, as well. It would almost seem intentional, given that as costs were rising due to the delays, they dumped the kitchen sink into the DPB and still claimed profits off the program.


            (To another point of yours, from a previous post)

            In your very well written statement on Program Accounting, you added this:

            ‘There is no way out of this using any accounting principle you can find.’

            There is. They could simply zero the production balance and break out tooling from inventory, into it’s own asset class, to give an accurate picture of assets.


            Expense what is there, take the hit and moving forward, keep it clean.

            Share price will take a beating but you would have clarity moving forward. They could even switch to % of completion and recognize all those deposits they have sitting in Unearned Revenue, to lessen the blow.


            Just saying…

          • @Frank : Program Accounting

            IMU programme accounting is a “planned economy” style method. (how faint under a market is everything doctrine )

            What it fails over is plan failure ( traditionally on the cost side )
            solution could be to book “over plan” outlay as direct losses.

          • @Frank
            Point taken. BTW, in Boeing specialized production buildings were carried on the books as tools when I was there. This allowed them to be depreciated as a component of development costs. The way the company thought about such things, was that all major investments were “hung” on new programs. One effect of this was to accumulate quite a bit of asset wealth over time that was not on the books. They have been liquidating this stuff as fast as possible to generate cash.

            This is why measuring an aerospace company’s performance using the generation of free cash flow is just plain wrongheaded. That approach could work in an industry that has virtually no physical assets. This is yet one more example why the quip that some poorly trained investment analysts that “all companies are alike” is just so horribly wrong. Sure, from the point of view of portfolio ROI one line item is not that much different from another, but in terms of how reliable each line item is, it is an utterly false concept.

          • I was referring to the 10K ‘annual report’ , the official one
            you seem to have found a different version. Please quote me correctly or not at all
            Any way they have the same data

            Hows the deposits and advance payments data hunt going

  32. Retired Tech Fellow,

    Your “Chrysler” example is irrelevant, and adding that it owns a skyscraper alluding to Boeing’s in Chicago is a bad analogy.

    Because the automotive industry is not the same environment as the aeronautical industry, which is only a duopoly for the latter, there is less pressure and no threat of disappearing from the market.

    Moreover you forgot that Boeing is the first exporter of the USA and is a major actor of the armament of the United States.

    Also Boeing is a multinational too well established in the world for decades

    I explained that Mc Donnel Douglas had gone bankrupt, was not in the same position as Boeing today, no longer having popular and competitive products in the face of an emerging Airbus, and Boeing until its merger in 1997 with the latter . MDD was no more than jam to eat, while Boeing still has a catalog of popular and competitive civil aircraft products while enjoying (only) a duopoly which leaves a certain comfort indeed which pushed Boeing is its leaders to be opportunistic on how to produce a fabulous salary

    Boeing going bankrupt is not conceivable given the comfortable (insolent) situation they enjoy whith Airbus.


      • Bankruptcy does not mean “disappear”. I know many cherish this wishful thinking.

        Boeing has been issuing debt for years. Where is she today?

        • paying it back as it comes due.

          They have the FCF to do so
          The $40 bill on new orders last year helps a lot on top of the $400 bill existing orders- that cumulatively provides $50 bill of ‘free money’ as deposits advance payments too
          Would airlines pay it forward for a shaky business ? I dont think so

          Im would be far more worried about another manufacturer who is falling behind massively in deliveries for last 3 months at least. Dec Jan Feb
          Around 40% of planned deliveries arent been made on time .

          • 1. Study proves past results don’t predict future performances. Oops.

            2. What’s a shaky business? SIVB was considered healthy until it disclosed it’s actually an Emperor without clothes which led to a bank run.

          • “..They have the FCF to do so
            The $40 bill on new orders last year helps a lot on top of the $400 bill existing orders- that cumulatively provides $50 bill of ‘free money’ as deposits advance payments too..”

            Maybe someone can confidently parse this, but the dialect is an unfamiliar one to me. More hand-waving from that commenter, perhaps? DoU’s great, though; my favorite commenter here.

          • Customers are required to make deposits and advance payments
            on orders which total around $50 bill for Boeing so far
            They wouldnt do so if those amounts could be at risk, especially the amounts due in the last few years before delivery.

            Its nice for once to read a comment where the author admits his
            total ignorance.

          • How much customers deposit SIVB has? What does it prove?? Is it creditworthy, or not??

            May be this poster has to take account of what happened recently before further embarrassing themselves.

          • Boeing isnt a bank is it Mr pedro

            The customer advances arent on demand or similar to bank accounts in any way.
            But of course ignorance about the differences between a major industrial company and a midsize regional US bank could confuse the unsophisticated commentators.

          • @DoU
            Customer advances most certainly ARE on demand in the event of a penalty-free cancellation. You’ll note that most of the 737, 787 and 777X backlog can be cancelled penalty free, if the customer so choses — a downside (for BA) of delivery delays.

      • > I didn’t know McDonnell Douglas went bankrupt… <

        Neither does it, since it's a bot: checkbot.
        "It" doesn't mind us knowing that.
        It probably has a sentient handler for "special" cases/examples though, as we have seen.

      • MD did not. Douglas did after a series of missteps in the 1960s and early 70s. to retain control. McDonnell’s take over of Douglas was “arranged.”

        MD was not bankrupt nor insolvent, but they also had no product future after they got kicked out of the ATF competition. So they went looking for a merger while they still had value. They had some nice cash generating assets, particularly in their spare parts business, which still includes support for the DC-3 and its variants.

        It’s also worth noting that the whole industry was going through a consolidation process in the decades after the war in SE Asia.

        • ‘It’s also worth noting that the whole industry was going through a consolidation process in the decades after the war in SE Asia.’

          I think that the biggest factor was the collapse of the Soviet Union, which removed the need for everyone to arm to the teeth, back in the good-old, bad-old days.

          Northrop Grumman – 1994
          Lockheed Martin – 1995
          McDonnell Douglas Boeing – 1997

          That, and stock buybacks went ballistic.

          In the late 20th and the early 21st century, there was a sharp rise in the volume of share repurchases in the United States: US$5 billion in 1980 rose to US$349 billion in 2005.

          Companies stopped pouring cash back into the business and sent it to wall st.


          In April 2022, after Starbucks brought back Howard Schultz as interim CEO, he suspended its stock repurchasing program, and said “This decision will allow us to invest more into our people and our stores — the only way to create long-term value for all stakeholders.”[19]

          Worked out pretty well for them huh?


          • Indeed. The Greeks figured out more than 2500 years ago that short term greed is not a virtue. We seem to have a need to relearn that lesson over and over again.

            My contention all along has been that the motivation for the stock repurchases by Boeing was to provide cover for the reworking of the board so the C-Suite folks could engineer obscene pay and benefit packages for themselves. Artificially pump up the share price so the proxy holders don’t care how much is being skimmed.

            I once heard John McDonnell say, and this is an exact quote: “The smartest thing I ever did was hire Harry Stonecipher.” But then it was obvious long before the merger that he wasn’t very smart, and certainly not the leader his father had been. Mr. Mac may have been legendary for being cheap, but he knew how to nurture a healthy company.

  33. FT: Silicon Valley Bank is a very American mess

    -> “The fact that large domestic banks in the US are apparently allowed to run such sizable funding mismatches (and indeed, to hang around with massive unrealised losses on hold-to-maturity securities portfolios, which is perhaps a regulatory bedtime story for another day) is likely to be a source of embarrassment to the US authorities next time they visit the big Swiss tower

    • Have you not been keeping up with the chinese financial sectors ….. this isnt the place to go into that rats nest of problems, but you could be well placed to keep us all up to date ?

      Heard of HNA group which seemed to be involved in *everything* including a substantial airline ?

  34. Referring to the new Embraer article on LNA this morning, it’s wonderful — and impressive — to see that Embraer has returned to health / growth / profit.

    I bet the company is glad that it isn’t embroiled in the present BA mess.

    Now a very ripe target for a Chinese takeover.

    • How did that turn out for Comac when they became interested in Cseries line

      China has its own regional jet anyway, a different model line is no use to them thats full of western equipment and built mostly from other western airframe assembly’s

  35. There is no current mess (at Boeing), just a mess of the past…

    If things are going better for Embraer (and that’s very good) why then would they let themselves be bought by the Chinese if things are going better? Not all that relevant…

  36. Regarding the vaunted-by-some-here Moody’s:

    > According to Wolf Richter both credit rating agencies, Moody’s and S&P Global Ratings, had given SVB investment grade ratings right up to the end. <

    Standard Operating Procedure, just as in the lead-up the the Great Financial Crisis of 2008.

    "The Strong do as they can, while the weak suffer as they must." -attributed to Thucydides. Or: Here We Go Again..

  37. I think a 10 abreast A350-1000 would fill the same role as a 777-300ER. For Air Indigo /Turkish Airlines code sharing is not broken as Turkish owns A350’s IMHO.


    Speculation is open

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