Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 5. Turbofan design problems April 26, 2024
- Airbus 1Q2024 results: Airbus CEO: “A350 in-service experience drives positive reputation and orders” April 25, 2024
- A350-1000 or 777-9? Part 3 April 25, 2024
- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
Pontifications: A little math for 777X, 737 MAX
By Scott Hamilton
Aug. 22, 2023, © Leeham News: We have a follow up to our Aug. 9 post about Boeing revealing the sub-type orders for the first time for the 737 MAX and 777X.
Boeing every month updates its website data for gross orders, cancellations and orders classified under an accounting rule called ASC 606. ASC 606 means orders are “iffy” for contractual or financial reasons with the customer.
The difference between gross orders and net orders represents cancellations, for whatever reason. The airline or lessor may have decided to cancel outright. Some orders might have been swapped within the family (for example, from a 737-8 to a 737-10). Some orders may have been swapped (cancelled) between models—for example, from the MAX to the 787. Boeing’s cumulative statistics haven’t revealed the difference between gross and net orders—until now.
ASC 606-classified order adjustments are excluded from the gross/net tally, Boeing tells me. In other words, for purposes of the tallies, the ASC 606 orders remain included in the gross numbers. They’re still orders at this stage, even if iffy. Airbus, operating under European accounting rules, doesn’t have to identify its iffy orders; LNA has made its best estimate for years of Airbus “iffy” orders, however, in an effort to level the publicly reported playing field. There are times when discussing orders and backlogs that we ignore Boeing’s ASC 606 classification when comparing with the Airbus orders.
With this as background, let’s get to the follow up to the Aug. 9 post.
Cancellations and Order Swaps
For starters, Boeing only confirmed that ASC 606 data is not included in its first-ever sub-type reveal. But a Boeing spokesperson also said she would not comment on the math displayed below. The math is simple. We took the gross orders and subtracted the sum of the stated backlogs and deliveries to arrive at how many cancellations, including order swaps, have been recorded for each family member.
Boeing doesn’t break out the swaps or the aggregate cancellations. But it is public knowledge that, for example, Southwest Airlines swapped some 737-7 orders for the larger 737-8. We also know that when the 737-10 program was launched in 2013, United Airlines swapped 737-8 and 737-9 orders for the 737-10. During the extended, 21-month grounding of the MAX, we know that Air Lease Corp. swapped some MAX orders for 787s.
We know that during the COVID pandemic, some airlines ceased operations, leaving Boeing with an inventory of MAXes that were built and a hole in the order book.
For the 777X, some 777-8 passenger models were swapped for the 777-8F by Qatar Airways and by Emirates Airline for the 777-9. The future of the 777-8P relies on the future of the 777-8F, in our estimation. Both airplanes dimensionally are now the same. But with only eight firm orders today for the -8P, production seems unlikely absent new orders for this highly niche, super-long range airplane.
Hello Scott,
Thank you for those numbers
But i think you wanted to write 2017 for the launch of the 737MAX-10 and not 2013.
—
…”We also know that when the 737-10 program was launched in 2013.”..
Cordialy
The Max 10 was being talked about internally for quite a while before I retired in 2014. Studies that probe what might be doable and at what cost are a constant, although any cost or possible schedule projections have lost credibility in recent decades. The board authorized something in 2016, but it’s not clear that even they knew what they were saying yes to. The sales guys are always out telling customers that they they can have whatever they want so long as they will place an order for it. This does occasionally cause some problems. Net, net, putting a fixed date on the “launch” of a particular sub-model subsequent to the -800 may end up being a bit like throwing some darts at a calendar. In my book, given the track record since the merger, nothing is real until the first revenue flight occurs.
Thanks for this informative comment.
Thanks for the analysis Scott,
I’ve always wondered why factory freighters are almost always based on the shorter variant. Is there a particular reason ?
(weight of cargo + aircraft + fuel)/mission length
the longer variants eat up proportionally more of the MTOW in structural weight and so have an inherently lower mass fraction available for cargo and fuel.
unless the cargo is very low density or the mission very short, you will hit your cargo weight limit (for desired mission range) before you hit your cargo volume limit in a stretch. this means that the stretch versions are (generally) limited to shorter missions and/or low density cargo.
I think its more confused than that.
The A330F based on the -200, it sold poorly.
Flip is the -300 as a conversion is much more popular.
The 777-200 was the basis for the 777F, but the 7778-F is more like a -300.
A case might be made for the 777F not competing with the 747-8F at the time.
A lot of complexity into all of it and the factors that go into the choice and then none of them is ideal for a given need, just the closest they can get and of course you can’t build specific lengths for specific freight ops.
Maybe the biggest U turn would be FedEx and the A380F that never was to turn around and go with the 777F that is pretty much a match for the MD-11F (a 777F can short itself cargo and make up fuel and get longer range but I only know of one flight FedEx used that for.
UPS has gone with the 747-8F though both are serious MD-11 users as well as 767F and 757F.
Makes one wonder if all those A380s could be converted to be freight haulers. They should have a low acquisition cost. They could easily haul BOTH Weight and Volume…
This was looked at years ago when working with FDX and UPS but the upper deck floor structure needed some major reinforcement.
Sam W:
The info I got was it was the volume that FedEx and UPS were after.
An A380F can’t haul the density of cargo someone like Atlas runs so it was a waste.
The only A380F orders were FedEx, UPS and on leaser had 5. It did not work for anyone else. Not many bulk out before weigh out (DHL would be the other one)
For FedEx I knew Fred was reported to hate 4 engine jets (based on the Tigers pickup but Tigers ran a squirrel operation so I suspect a lot of stuff was in arrears or badly done. Ergo, even a 747-8F had no appeal and maybe not enough volume.
The MD-11s did work well at the time (they are on the way out but they have had a long run). UPS fleet is mostly new build but they did buy the MD-11 second had well after FedEx and can only assume it suits their routes well (no including what UPS is going to do about keeping them or not)
You want density then a C5 or a C17 or an A400 would be the answer!
The question remains
Who would want this weight and volume?
How would you use the 2nd level? Sure UPS and Fedex had that figured out or they would not have ordered the A380F. But would they buy such expensive hardware now. Especially since Fedex is keen on imitating UPS and moving air freight on the ground when possible. Trying to lower their costs by lessening their flying.
All:
The point is the A380F was going to work in very limited circumstances.
So, no A380F conversions, FedEx and UPS had 10 each (with some options) one leasor who probably was going to lease to DHL had 5 (also some options) and no one else.
Its why Airbus dropped it, unlike the 747-8F, it had no future
FedEx spent a huge amount of money on infrastructure for it, ironically the two gates they build in ANC fit the 777F just fine and they always used those first (some gates were latter restriped for 777 but some remained MD-11F max size only.
Equally funny was they put in electronic ground carts for power, and the 777F required two feeds that the A380 carts had been ordered for. Gate mechanics loved them as they were quiet.
Also funny was that only one cable drew power of any degree, the other one only had the roller system hooked in and you could barely see current.
Boeing does not allow use of splitters so FedEx had to use TWO Ground Powered Units (engine) when the electronic GPU were down (not uncommon, fiddly European Electronic thing that blew up capacitors every 4000 to 9000 hours.
Gate mechanics were not normally friendly but they sure liked me (well the GPU I fixed)
The usual air cargo volumetric weight and typical mission favor shorter widebody variants if I understand well.
Thanks Bilbo
Regarding p2f conversions, do you have any idea why those vendors (IAI and Mamoth) are focusing on the 773 variant? Is it an exception to the general rule?
I suspect that the 773 is being marketed as a P2F is that the 777F factory freighter based on the 772 is freely available. If you want something bigger you have to go for the 773 especially as the 747 is now out of production (and 744 feedstock is pretty limited).
Range is a factor for what works financially the best.
Freight OPS are based on shorter flight distance and carrying as much cargo as they can.
Ergo, someplace like Anchorage is better to land, re-fuel or even change crews.
Passenger ops are better off with as few landings or straight through if its not a significant passenger destination. Ergo you have those 18+ hour flights.
Its ironic that a Passenger aircraft can get cargo to someplace quicker than a Package operation like UPS/DHL.
Of course you have to get it to the aircraft and then from the aircraft into a delivery system so it might not be true but the actually time in transit on the aircraft would be shorter.
Some commentators said 747-400 freighter is expensive to maintain and operate. Any truth to that?
4 engines vs 2 for a 777F (or any other freighter). Same reason that the A340, A380 struggled (amongst others).
A 747 can still carry more cargo and has the nose loader so there are offsets there and all the 747F types have sold nicely.
And you get rid of all the stuff inside like galley, lav and air conditioners and that is a bonus carry wise and reliability wise.
They were still using 747-200F not long ago.
Kallita operated some which was amazing.
Pedro:
All aircraft are expensive to operate.
747-400F was state of the art at the time, all were better than the early 747s.
The 747-400F us still the mainstay of large cargo ops, in future years the 747-8F is going to be like gold.
Not all need that, but UPS and FedEx show two different aspects where FedEx uses 777F and UPS has a lot of 747-400F (and two converted combi units, one to replace the one lost in Persian Gulf area.)
IF needed the nose opening is invaluable for long cargo.
I think I saw UPS use their once up here.
How does marketshare of the 737 MAX 10 compare with the A321?
Scott listed that a week or so back.
16.3% vs 83.7%?? Quite abysmal.
Remarkable that 16% can still be quite a lot of aircraft
810 per BA.
And 16% is better than o%
There’s a cost, debit on the ledger, too. Furthermore, there’s still a gap between the largest NB and smallest WB unfilled.
Pierre
Difficult to compare.
One has been streched for almost 3 decades and the other has been streched for only 6 years.
Before that there was the 737-900/-900ER/MAX-9 which had little order in my opinion due to a lack of diversification with the 737-800/MAX-8.
The gap between the two variants is too small. This was due to the short landing gear and the lack of ground clearance which in my opinion played a lot on the orders. With the MAX-10 the gap has been slightly accentuated even if the gap between the A320neo and A321neo is slightly larger and makes it a truly diversified product (A321neo/-LR/-XLR).
Naturally with the MAX-7/-8/-8200 and -10, the MAX family remains a competitive product and is used differently than the A32Xneo family.
We have seen Air Canada for example abandon the A32Xceo in favor of the 737MAX and not order an A32Xneo since its launch in 2010.
I think that when the 737MAX is delivered and on track, we should perhaps stop producing the MAX-9 because it is between the MAX-8 and MAX-10 and represents only a small difference.
Finally, if we total the number of MAX-9 (137) and MAX-10 (810) which are almost the same since the MAX-10 comes to correct the MAX-9 being possible to have a significantly larger size thanks to train retractable landing pad that makes this small growth possible.
So we get 947 MAX-9’s and -10’s
A321neo (+LR) in Service
MAX10 no in Service
The XLR will be approved and in service with airlines before the MAX10. The MAX9 is not in the same segment. She has no business here.
Airbus dominates the market of 200+ passengers. With a market share of 84 percent, it can sell off any A321neo at a high price. Every MAX10 is discounted. It’s another economic disaster for Boeing.
According to the current trend, Airbus will get another 3,000 to 5,000 A321neo orders by 2034. The MAX10 will hardly see 2,000 in total. This is no longer a competition in this segment.
Sam:
A lot of orders have shifted to the MAX-10.
I don’t see it as an economic disaster and it should me mentioned the XLR is still not approved at least on the US side and it will be interesting to see which one gets into service first.
The -10 just needs its paperwork done so its not tech stuff to deal with.
The Irony as someone pointed out is that the -7 was used as the proving flights for the upgraded -8/9 systems but itself has to get its paperwork cleared (and some upgrades added)
” … it will be interesting to see which one gets into service first.”
Hope springs eternal?
What I know is UA would probably get its A321neo ahead of the MAX 10. 😂
https://boeing.mediaroom.com/2017-06-20-Boeing-United-Airlines-Announce-Order-for-100-737-MAX-10s
FWIW it compares the MAX 10 with the A321neo on backlog only (i.e. excludes orders fulfilled).
If you knew the answer what is your point?
Boeing 737 damaged on rough landing
https://onemileatatime.com/news/alaska-boeing-737-damaged-rough-landing/
I have seen them continue to land in Anchorage despite horrid conditions when they could divert.
There really should be rules on that, its just plane (pun intended) nuts.
A 767 landed hard this last week (Texas?) and the nose gear hit really
When you do that (or a gear into the wing) you are a controlled crash.
If you’re referring to the United plane, it probably won’t fly again…
Yes it was and agreed, you can buy a good used one that is not bent up for less than repair.
Is AS going to rehabilitate the aircraft?
Call them and fine out for us!
You know they made a decision?
https://twitter.com/jetconsultant1/status/1693858133934841862
little nitpick:
ASC606 ( and IFRS 15 ) are about expectable loss of revenue.
i.e. future cancellations or customers going belly up ( and their orders thus down the drain ) or just readjustment of orders : to many, too few .
Airbus does not, however, list aircraft orders under IFRS 15.
Both reporting metrics are about estimating probable loss of revenue in the future.
By way of reporting that as a number of frames Boeing is already hiding information as REAL per frame value is not public.
Boeing looks more open here but that is a mirage.
to Checklist:
I am sorry but you are wrong. Air Canada has ordered 30 Airbus A321XLR’s in 2022. Ten less than their entire MAX fleet.
https://www.airbus.com/en/newsroom/press-releases/2022-03-air-canada-orders-six-airbus-a321xlr-to-sustainably-support-network
https://onemileatatime.com/news/air-canada-airbus-a321xlr/
‘Deliveries are to begin in the first quarter of 2024 with the final aircraft to arrive in the first quarter of 2027. Fifteen of the aircraft will be leased from Air Lease Corporation, five will be leased from AerCap and six are being acquired under a purchase agreement with Airbus S.A.S. that includes purchase rights to acquire an additional 14 of the aircraft between 2027 and 2030.’
https://media.aircanada.com/2022-03-22-Air-Canada-Announces-the-Acquisition-of-26-Airbus-A321neo-Extra-Long-Range-Aircraft
Plus options for 14 more.
Right now, AC is expecting two 787-9’s, 27 more A220’s to go with the 33 already flying and 30 – A321XLR’s (and some electric planes….?)
‘In September 2022, Air Canada acquired a CA$5 million equity stake in Heart as part of a purchase agreement for 30 ES-30 aircraft, which are expected to enter service in 2028.’
IMO, AC has bought into the Airbus A220 from the bottom and A321Neo from the top, mentality. Max 8’s are in the middle.
Rouge – it’s LCC, is getting all the old Airbus aircraft to operate.
https://en.wikipedia.org/wiki/Air_Canada_Rouge
There was a time Air Canada committed to 100+ 737 MAX to replace their entire Airbus NB fleet. And it was celebrated as such.
https://leehamnews.com/2013/12/11/air-canada-snubs-airbus-orders-737s-keeps-some-of-embraer-portion-open/
PS. In this 2013 post, you can also see Scott asking Ferpe’s e-mail 🙂
IIRC, in exchange, AC dumped its E-190s to BCC.
It’s fun to re-read old thread with hindsight
Leeham: Boeing Has Lost Neo/MAX Battle
https://www.airliners.net/forum/viewtopic.php?t=604655
Yes- good older link; thank you.
Have gotten better for Boing during the interim?
(no further comment.)
Boeing has begun a major cost-cutting drive, citing stiff price competition from Airbus. Yet the financial stresses come not just from its European archrival, and some of them are self-inflicted, analysts say.
When Boeing Commercial Airplanes chief Ray Conner in February warned employees that jobs would be cut this year — anywhere from 4,000 to 8,000, as it turns out — he cited intense pricing pressure from Airbus. Yet the financial stresses come not just from the European archrival, and some of them are self-inflicted, analysts say. Boeing has “a lot of challenges on a lot of fronts,” said Bank of America aerospace-industry analyst Ron Epstein.
https://www.seattletimes.com/business/boeing-aerospace/price-war-plane-transitions-put-financial-crunch-on-boeing/
In the February employee address announcing the cost-cutting drive, Conner gave an unusually candid account of specific sales campaigns when Boeing was forced to lower its prices.
He recounted how the chairman of EVA Airways of Taiwan told him last year that Airbus was offering EVA its A350-900 at a price “significantly lower” than Boeing’s 787-10.
“The chairman told me, ‘Look, this is too big a price gap,’ ” Conner said, according to an official transcript of his address to employees, “and they started to go down that path of actually going to buy the A350-900.”
To head off the prospect of losing a loyal all-Boeing customer, Conner lowered the price to win the order. […]
Conner also told employees that Boeing had lowered its price dramatically to win an order in January from United for 40 current-generation 737s against “aggressive” competition from the new Bombardier CSeries jet.
Conner said Boeing did so specifically to block Bombardier’s new plane.
He recalled how Boeing had lost similar sales battles in the 1990s to the Airbus A320, allowing that jet to gain traction against the 737.
If Bombardier, which has had trouble securing customers for the CSeries, had won the United order, “that would’ve been a validation of this CSeries in the marketplace, I think. So very important for us to win that.”
Industry insiders believe United got its 737-700s, which have a list price of $80 million, for between $22 million and $24 million each.
“Ultimately we won, but I’m going to tell you, we got pushed to the wall,” Conner told his employees.
In the March issue of Boeing’s in-house magazine Frontiers, Conner acknowledged that Airbus has improved the performance of its airplanes relative to Boeing’s.
“Airlines once paid a premium for the value of Boeing airplanes,” Conner wrote. “That dynamic has changed … Purchase decisions increasingly hinge on price. Sales campaigns are tougher. Airbus has narrowed the value gap.”
Boeing’s new reality is that the A320neo is firmly established as the preferred single-aisle jet family, with sales outpacing those of the 737 MAX by more than 1,400 airplanes. And on the widebody side, Airbus now for the first time offers real competition for the 777 with its new A350.
“Boeing had all the tail winds at its back over the last 10 or so years. Now it would appear Airbus does,” said Strauss. “It’s going to be tougher for Boeing to sell airplanes with the same level of profitability they’ve had.” […]
Teal Group’s Aboulafia said he’s baffled by the divergence in tone between Conner’s internal speech to employees and the confidence in its market position that Boeing proclaims in public.
@ Pedro
Thanks for that quote:
“To head off the prospect of losing a loyal all-Boeing customer, Conner lowered the price to win the order. […]
Conner also told employees that Boeing had lowered its price dramatically to win an order in January from United for 40 current-generation 737s against “aggressive” competition from the new Bombardier CSeries jet.”
Further evidence (on top of the growing stack) that BA is giving discounts that it can’t afford.
Okay thanks,
That’s a recent fact that I didn’t know. We agree that it is because the 737MAX does not offer “MAX-ULR derivative” without this, the 737MAX had won for a long time.
(!)It’s a quite comprehensive subtlety
Lets not forget that odd MAX-8 aka 200 variant that Ryanair is getting, werid model stuff as it first no where.
TransWorld
What do you call strange a denser version 200 pax with 2 additional doors to meet safety standards?
Franck P and Keesje
Ok thanks
Note indeed that there is no equivalent of A321XLR at Boeing. Maybe AC waited too long for the NMA, but without saying that the market is important.
It’s an important subtlety
Don’t fall into the trap…
Uwe
..”By way of reporting that as a number of frames Boeing is already hiding information as REAL per frame value is not public.
Boeing looks more open here but that is a mirage..”
—
Please prove your pretty funny guess?
Thks
not a guess and nothing to prove.
FACT.
You are known to have issues with such constellations. 🙂
I am known to silence those who say anything without proof or source and even less FACTS…👍
Oopsie
https://twitter.com/flightradar24/status/1694400665290756219
What did you have in the betting pool? See below…
Events in this life are more and more resembling Theatre each day;
perhaps that’s not an accident.
“Trust, but verify.”
🙄
https://twitter.com/ByERussell/status/1694323066120106140
On an aircraft side note:
An Embraer went down today
https://www.bbc.com/news/world-europe-66599733
Some guy named Yevgeny Prigozhin was on board, apparently.
(OK – who had ‘Plane Crash’ in the betting pool? Time to settle up. Those who had ‘Poisoned Tea/drink’ or ‘Fall from window/building’ are the big losers. ‘Committed suicide by hanging while handcuffed’ and ‘drowned while wearing a chain life preserver’ only have to kick in 50%, owning to the difficulty level…)
More Trent 1000 Troubles.
https://www.aerotime.aero/articles/easa-boeing-787-lpt-blade-ad
Surprise! Surprise! Anyone mentioned Qantas?
Qantas orders 12 Airbus A350-1000s and 12 Boeing 787s (4 -9s and 8 -10s). The planes will be used for growth, and replacement of its A330s and A380s once deliveries begin in FY27
https://twitter.com/ByERussell/status/1694488453172400431
So where does that leave the 330 n..??
On the outside looking in !!
Another disappointing loss !
As many were hoping for a major order from the longtime ceo operator !!
Even more exclamation marks, please.
Can’t win them all. Airbus will have to do with Qantas ordering the A220, the A321XLR, the A350 – 73 aircraft, including 24 widebodies on order. Out go the A330, 737-800’s and eventually the A380’s.
Boeing gets an order for 12.
https://en.wikipedia.org/wiki/Qantas_fleet
Looks like Qantas intends to keep its A380s for another 9 years — with retirements starting in FY2032. The airline plans on replacing those A380s by yet a further batch of A350s:
https://www.aerotime.aero/articles/qantas-fy2023
First to the knackery will be the oldest A330s, while younger jets scheduled to leave the fleet towards the end of the replacement program will “undergo a cabin refurbishment” beginning in 2025-2026, including new economy seats and a refresh and modernisation of the interiors …
https://www.executivetraveller.com/news/qantas-a330-replacement
Makes good business sense. You need to keep some leverage against Airbus in negotiations, so include some Boeing aircraft in your fleet. Especially if you can get a good deal on ’em.
You can, however, see where the trend is going. The A220 can take up all of inter-Australia flights, including a few close int’l destinations. The A321XLR will do well on long and thin routes and well as some higher density domestics. The A350 are their long haul queens, including Sunrise, while the 787’s will replace the 330Ceo’s. 4 aircraft types for the fleet.
The Qantas 787’s seem the right aircraft for replacing the high cycle A330’s, specially the 787-10s for domestic and Asian flights and standardization. Maybe more to come.
The A350-1000 will probably be for something else, international growth, US flights and eventually A380 replacement when the time is right.
QF now has 24 A350-1000s on order, I wonder how much they will be standardized in terms of MTOW, configuration for the ULH operations.
Another defect, another delay.
BA down over 2% after market.
Snowmen? 🙂
https://twitter.com/jonostrower/status/1694469065136635920
Time to further ramp up production??
Quality is Job One at Boing.
Mis-drilled holes?
Isn’t it odd that Airbus- also supplied by Spirit- doesn’t have ongoing issues with that supplier?
Hmm..
Vincent:
No one knew about the A350 paint issue until Qatar made it public. Then like popcorn a bunch of operators had the problem and had for several years.
Airbus is given a pass while Boeing is scrutinized endlessly.
Quite interesting.
@ TW
What does Spirit have to do with the paint job on (some) A350s?
Vincent’s point: how come Spirit doesn’t screw up its work for AB…but seems to regularly screw up its work for BA? Or are you suggesting that Spirit *does* screw up on AB parts, but that there’s some sort of magical cover up?
Vincent: might have something to do with the fact that most of Spirit’s work for AB comes from factories outside the US…
How about BA’s 787 paint issue?? 🤔
“Airbus is given a pass while Boeing is scrutinized endlessly. ”
some posters strongly reflect the form of the bottle they grew up in.
@Vincent
Evidently, Your spelling is too !!
Perhaps “Spirit” never got your memo either!!!! Is that better ????????
He deliberately and consistently refers to BA as “Boing” (as in the cheap rubber toy going boing, boing, boing,…) — hadn’t noticed previously?
Very amusing…
🥱🥱..
Those 737s have a nasty recent habit of doing that; hence..
That’s why he deliberately doesn’t take it out on Rolls Royce. Ah yes, I forgot, seen as an ally of Airbus and Europe.
How stupid am I…
(!) RR tried to get out of his trap
Same old story, different day…
Some here claim the Boing MAX-10 “just needs to get its paperwork done”.
So that takes 2-3 plus years?
And *of course* the A321XLR will enter service
before the MAX-10.. anyone who claims otherwise is being less than honest/
muddying the waters.
I’d be happy to place a modest wager on it..
Vincent
…”I’d be happy to place a modest wager on it..”
—
Pious wishes !
I’m not sure that I place much value on your wagering, it seems to be based on impaired judgement:
Checklist
August 3, 2023
@Mike
Given the culture inherited from Airbus minimalism since they realized that the A340’s and A380 despite a more than mediocre A350-1000 for already +15 years do not sell despite the efforts made to attack Boieng in vain in the widebody.
Another 12 added to the Qantas order book today and a strong possibility of more to come at the Dubai Air Show? Seems to me that the airlines disagree and this model is just starting to sell strongly.
No Roger not strongly. Desperately.
It’s been 18 years since the A350-1000 was launched. It is still below the 200 orders mark.
Airbus should have only launch a New-All-CFRP A390X turning to the GE9X engine arguing from the 2019 that Boeing would be behind in deliveries.
GE mostly sees money.
(!)Learn that only that $$$ matters!!
Checklist – “It’s been 18 years since the A350-1000 was launched. It is still below the 200 orders mark.”
Again, you need to check your facts are up to date. As of 31st July orders were at 224. This month we’ll presumably have the Qantas order added to that.
Before you say that it’s still a low number allow me to point out 2023 has been the best year yet for -1000 orders, even ignoring the Qatar orders that were reinstated after being cancelled last year.
https://theaircurrent.com/aircraft-production/boeing-spirit-737-max-aft-pressure-bulkhead-drilling/
who are the suppliers to Spirit Aero for aft pressure bulkhead?
I’ve tried to look through the excess emotional hype of the last 5 years, but with this incident on top of the MAX and 787 problems in 2023, plus reports that a study of Boeing’s financial future has been initiated by the Secretary of the Air Force, one has to start thinking about the long-term viability of Boeing.
A lot of us have been pondering that for a lot of years.
Financially they are in a bad spot but its amazing how Corporation can bounce back.
Qantas looked to be spiraling the drain 10 years back and they pulled out of it.
No I am not making predictions but Boeing is not close to Bankrupt.
I could see Boeing working its way out of Commercial Aircraft, keeping in mind Boeing defense is a big part of the company.
> Financially they are in a bad spot but its amazing how Corporation can bounce back. <
Especially when they are able to shed their responsibilities (pensions
and health care funding, as a start) in Bankruptcy Court "restructuring". Lots of "little people" get harmed in that process,
but hey! this is America..
‘Financially they are in a bad spot but its amazing how Corporation can bounce back. Qantas looked to be spiraling the drain 10 years back and they pulled out of it.’
The comparison doesn’t really work.
An airline, any airline – can generate more income almost overnight. They can also change their level of service, cut costs easier, switch out aircraft on underperforming roots and a host of other things, including seat sales. Sometimes a catchy ad campaign can make all the difference in the world, to the flying public. The flying public is funny like that.
What can Boeing do?
How do they sell more aircraft when the primary consideration of their customers is CASK/M, maintenance costs & capital expenditures? Airlines can park a few aircraft and trim staff quicker and with less effect then Boeing can assess which of their 4000 touch labour and engineering staff they can lay off, while still getting the work done.
The aircraft Boeing have to sell, is the aircraft they have to sell.
Any new product is a capital expense injection/regulatory nightmare costing billions.
Which would have a greater impact on sales to either company:
An airline all of a sudden saying “All adult customers can now enjoy one alcoholic beverage on us, during your 2+ hour flight” (or some such thing)
versus
Boeing offering some similar inconsequentially costing item to it’s airline customers. (not that a beer/shot of non-premium alcohol isn’t free, but on a flight with 200 pax, you can probably get everyone to have a drink for $100. Perhaps you even make a profit by people buying a second over-priced $10 drink)
Yeah, “could” see Boeing working its way out of Commercial Aircraft, without any major investment in R&D, following the current path to generate FCF to reward shareholders. 😂 As easy as walking on water.
At this moment, BCA is still mired in another episode of “quality escape”, another pause of delivery. Why all these production issues have not been noticed earlier? Asleep at the wheel? What would happen if FAA has not taken the authority to issue AW certificates away from BA?? 🙄
Cirium Ascend Consultancy has completed a review of @Airbus #A320ceo family Market Values, resulting in increases across several variants, depending on vintage etc
https://twitter.com/MaxK_J/status/1688832367194947585
https://www.bnnbloomberg.ca/rolls-royce-s-new-profit-mantra-hampers-airbus-sales-campaigns-1.1962956
Rolls-Royce’s New Profit Mantra Hampers Airbus Sales Campaigns
From the article
For now, Airbus doesn’t have much of a choice on wide-body aircraft. The A380 super-jumbo that came with two options is no longer in production, and Rolls-Royce extended its exclusive status in 2021 on the smaller A350-900 model until 2030.
William
Extended on the A350-900 but not the -1000.
See how events play out and how my argument on a new 400 seater All-CFRP A390-X with the GE9X taking advantage of the 777-X setbacks since 2019, hardened!!
And I repeat it like a Mantra 👍
Thks
I seem to remember GE refused to be a supplier for the A350
And with RR coming up with new designs will GE still be more efficient?
BCA could learn from this RR narrative: sacrificing profitability in order to gain/maintain market share is a luxury that eventually runs out of road.
BCA has delivered more than 1000 aircraft in the past 5 years — but it hasn’t made a penny profit on them.
4 years, 6 months, from 2019
Year……..Profit………Deliveries
2023……..-998…………..266
2022…….-2370…………..480
2021……..-6475………….340
2020……..-13847…………157
2019……..-6657………….380
$30.347 billion in losses……..1,623 aircraft delivered….almost $19 million loss per delivery.
5 years previous
2018…….7879…….806
20117……5432…….763
2016…….1995…….748
2015…….4284…….762
2014…….6411…….723
$26.01 billion in profit. 3,802 aircraft delivered. Almost $7 million profit per aircraft.
Boeing has a tough road ahead….
IMO it looks like they need some 700 deliveries a year and if they continue to average $7 million in margin (from those 5 previous years), it works out to ~4,300 aircraft (at that margin) to wipe out the $30 billion owed. At some 700 a year, that more than 6 years production.
(Check my figures Bryce – I didn’t use a spreadsheet and used the calculator on my pc.)
They need to get production humming again…
(Food for thought: The entire backlog, after ASC adjustments, is ~4,900 airframes)
“They need to get production humming again…”
They do — but even that won’t save them if their recent (marquee) sales have overly thin margins due to excessive discounting.
Look at this quote that @Pedro posted above, from an employee address given by Ray Conner at Boeing:
“To head off the prospect of losing a loyal all-Boeing customer, Conner lowered the price to win the order. […]
Conner also told employees that Boeing had lowered its price dramatically to win an order in January from United for 40 current-generation 737s against “aggressive” competition from the new Bombardier CSeries jet.”
Over-discounting to seal the deal at any cost
Agreed.
As I’ve always maintained, there is a production number out there, or a production range number, that BA has at which point all BCA variable & fixed costs are covered when the division can turn a profit. I’m sure Airbus has one, as well.
Look at 2020 for Airbus when production dropped to 566 aircraft, they only made € 618 (and yes, there were some covid added costs in there) but I think that if they were to drop to around 500 airframes, given the large size of the operation – their margins would start to turn negative.
I think that number is closer to 600 for Boeing.
(Once interest expense is added in, it’s gets even higher, but we’re talking strictly operating margin)
…and for a little perspective/comparison
Airbus Commercial , past 4 years, 6 months
2023………€ 2,256………316
2022………€ 4,600………661
2021……….€ 3,570……….611
2020………€ 618…………..566
2019………..€ 5,947……….863
Adjusted EBIT of € 16.991 billion (USD $ 18.340 billion at todays rate).
3,017 aircraft delivered, averaging just over $6 million EBIT per aircraft.
“TransNusa Praises COMAC ARJ21 And Eyes Future C919 Operations”
“Speaking on a media call on Wednesday, Francis said the China-made regional jet has “outperformed itself” in its first few months of service.”
“The ARJ21 has risen to the test, achieving an on-time performance (OTP) of 90% or above in the past three months. Load factors on the jet have been steadily increasing too, rising from 87% in May to 92% in July, demonstrating customer confidence.”
“CEO Francis added TransNusa would be open to becoming the first international operator of COMAC’s C919, given its satisfaction with the ARJ21. ”
https://simpleflying.com/transnusa-praise-comac-arj121-future-c919-operator/
TransWorld
…I could see Boeing working its way out of Commercial Aircraft, keeping in mind Boeing defense is a big part of the company”…
—–
Could see? …
Impossible, the commercial sector of Boeing (BCA) is one of the first exporters of the USA.
This mixmixture of sarcasm and wishful thinking will be extremely difficult to achieve…
It does not matter, the US will sometimes intervene with a bail out but that comes at a cost, ie you need to repay that.
Try to make Boeing build a new aircraft? It is not happening.
Current trajectory is against a long term Boeing Commercial Aircraft. Boeing management has seen to that throwing away the future.
They really only have two viable programs, the 737 is horribly dated and the 787 has a lot of life. The 777X will be limited.
Unless management take a different direction, even if they become profitable again, revert to stock buy back and dividends and nothing to product development (other than lip service) and its a long wind down.
Frank P, and Keesje
It seems to me that the first 787-9 ‘s ordered in 2015-2016 was also part of the “Sunrise Project”.
This means that the 787-9 and -10 range cover a fairly wide spectrum at Qantas.
The choice of the A350-1000 for the replacement of the A380 is strange because there is a much too big GAP here.
How is it that the seats have melted so much?
It’s strange to historically go from the 747 to the A380 to end up on something quite small and thin whith thé A350-1000.
(!)The 777-9 would have been the most logical and reasonable choice but I can understand their choice probably a cockpit community or even engine.
And indeed, interesting question. What are the engines of the 787 ordered since 2015?
This can easily reveal the reason that the sole GE propulsion of the 777-X (GE9X) was not retained.
Re Qantas 787 and A350 order
(!) After verification,
Qantas 787s are indeed powered by GE’s GEnX…
My only speculation is the community/simplification
policy cockpit
(Airbus A380/A330 pilot pole -> A350 passing in a few days)
Looking at specifications, oew, payload-range, sfc, program track record and competition, I won’t be very surprized to see many more A350-1000 orders in the coming years.
It seems the best, most efficient long haul machine around.
Uwe
…”not a guess and nothing to prove.
FACT.
You are known to have issues with such constellations…”
—++
I am known to silence those who say anything without proof or source and even less FACTS…👍
(!)For the last time,
where are your evidence and your sources?
Thai Airways is accepting bids for their A380 fleet.. Again !!!
Down payment of $50k requested !!
Everyone must go..in “as is ” … condition..
You might as well just say make me an offer ..😂😂
https://www.aerotime.aero/articles/thai-six-a380s-for-sale
You know things are bad across the street when the competition has to bring up aircraft that have not been produced since 2021 (A380) and 2012 (A340).
You could make the case that the A330Neo hasn’t sold as well as it’s predecessor, however if the program is at a break even position (by all accounts) and the 787 is down some $7 billion, than it’s mission accomplished and job well done in keeping BCA honest on pricing.
I would encourage you to reflect upon the figures of the past 4.5 years (in the post above) and how the two OEM’s have fared through the pandemic years:
BCA: $30.347 billion in losses……..1,623 aircraft delivered….almost $19 million loss per delivery.
Airbus Commercial: Adjusted EBIT of € 16.991 billion (USD $ 18.340 billion at todays rate). 3,017 aircraft delivered, averaging just over $6 million EBIT per aircraft.
But hey, I guess you have to take your victories wherever you can. You are right – the A380 & the A340 were commercial and financial failures, with 251 and 377 deliveries.
Those programs musta really hurt the Airbus Group and put them in a financial hole, huh?
Airbus Group Annual EBITDA
(Millions of US $)
2022 $8,395
2021 $8,469
2020 $3,992
2019 $4,423
2018 $6,589
2017 $5,266
2016 $2,064
2015 $5,781
2014 $6,773
2013 $5,653
2012 $5,121
2011 $4,412
https://www.macrotrends.net/stocks/charts/EADSY/airbus-group/ebitda
(But lemme guess, Airbus is a Euro jobs program company that is subsidized by government money, while poor BA never gets any funding and has to struggle and pull itself up by it’s bootstraps, right?)
https://subsidytracker.goodjobsfirst.org/parent/boeing
While your at it.. Honorable AB failures must go out to the 330f, 319neo, 3308, and here I’m giving you a break…no 3309 YET !!! 🥱🥱
Yeah , the 330 n is it at a break even position by all accounts…
Meaning you and Byrce !!😂..
The AB faithful always tout what a bargain it was to develop the 330n..
Totally agree, and it’s beginning to show all, you get what you pay for..
Clearly AB hasn’t done near enough to compete with the 787 ..
Another potential valuable customer lost, thank goodness; Qantas made the right decision..
Don’t fret ,you still have Delta to bail you out of the 330n doldrums !!
Ribert.L
Great post. Funny but pathetic to hear that the A330neo is an excellent deal because the 787 has exceeded the costs.
Damn the A330neo does almost a little better than the A380 or the A350-1000, or even the A340…
What’s worse is that Airbus has increased its turnover like never before. I fear that the Bean counters mentality will be born at home because Boeing still sees the future with the development of products such as the TTBW, WIZZ, and the 777-X for the moment
‘Yeah , the 330 n is it at a break even position by all accounts…
Meaning you and Byrce ‘
Take it up with Flight Global
‘ it is clear that the airframer does not have to sell too many aircraft to break-even.’
https://www.flightglobal.com/analysis/analysis-is-first-delivery-a-new-dawn-for-a330neo/130428.article
Scott as well:
‘Rao added that the prime reason Airbus launched the A330neo was to put price pressure on the new, much more expensive-to-buy Boeing 787. The A330 was fully amortized except for the new engine, wing and other upgrades. ‘
https://leehamnews.com/2023/06/27/pontifications-a330neo-still-struggling-nears-300-sales/
But hey – if you don’t like the message, shoot the messenger, right?
(BTW – I don’t think you used enough exclamation marks…)
FrankP.
….”You could make the case that the A330Neo hasn’t sold as well as it’s predecessor, however if the program is at a break even position (by all accounts) and the 787 is down some $7 billion, than it’s mission accomplished and job well done in keeping BCA honest on pricing…”
—-
You therefore find it normal that Airbus is launching an aircraft (A330neo) once again which is selling poorly and which is taking advantage of its competitor’s setbacks to show off.
I’m sorry, that’s the most insane argument I’ve ever heard…
Is that the image of Airbus in 2023?
@Checkliist
They’re all a bit triggered today ..as usual..when the neo gets shutout of an order….
Remember when Scott wrote the 330n wasn’t selling , and overwhelming response he received ..like almost 400 comments..😂😂
How dare he say anything negative about our beloved company !!!
Nothing new !!
@ Frank
Which would you prefer?
(A) To have had 2 financial failures in the past — but to currently have a well-oiled operation that’s raking in profit?
or
(B) To have had a well-oiled operation in the past — but to currently have 3 financial failures that have mired you in a pit of debt?
Tough choice, isn’t it? 😉
You forgot (C) Get out of it slowly but surely because 2023 will be better than 2022, better than 2021 etc. So 2026, better than 2025, better than 2024 etc. Because you don’t get out of debt the year after or in 3 years
The A330neo argument remains ridiculous
If you don’t innovate, you will disappear…
I find it interesting that they have to break it down to individual aircraft to find the one model that is not selling.
The A319Neo? OK sure – it’s not selling. Neither is the still uncertified Max 7.
I guess when you’re desperate, you throw anything up against the wall to see what will stick.
@ Frank
Don’t forget the stellar *eight* orders for the 777-8P 🙈
@Bryce
When the story is written about BCA and the Boeing Corporation it’s going to boil down to the money that was wasted and how they either plan their way out of the mess that they created or they stumble along from financial crisis to crisis.
As our friends are keen to point out, Airbus has had it share of less than stellar performers – so then it begs the question;
Given that they both get government aid, why is it that Airbus seems able to overcome setbacks and move forward, stealing market share from the competition and returning positive financial results while BA fumbles around taking one step forward and two back?
I know, I know…it’s the massive aid from European governments, the unfair FAA, reactionary congress, bribery scandals, foreign pilots and poorly run airlines…poor Boeing. It’s so unfair to them.
@Frank P,
The mission of BA is to reward shareholders and push stock price higher. Market shares, competitiveness, future of the company in the long run etc, all else are secondary.
@ Frank
Your smug and condescending posts are so entertaining.
To answer your question regarding why Boeing is in this position its easily comes down to a few missteps. Major missteps. And Arrogance.
1.Boeing decision in the 90s to arrogantly turn away biz from low fare startups and then “third world” economies. Airbus put the A320 into these customers hands and earned their loyalty. The Indigos, Spirit, Frontier and other then new low fare carriers. Airbus’s John Leary had vision and ate Boeing’s lunch, because Boeing at the time had no one with said vision. Vision to be have 50 percent of the market from being #3. Airbus was hungry and Boeing was fat.
2. Fighting, at the time, struggling Blue Chip customer Delta when it reached out to Boeing for help during its BK proceedings in the early 2000s. It got nasty. 20 years later, still feeling the repercussions of that one.
3. Horrible job managing the 787 project. Get that reasonably right, the 737 replacement is flying now, a bigger CF plane would be getting ready to debut in place of a 777 with a new wing. Leaving Boeing with an impressive product mix. To the chagrin of some here the, stock buybacks would still be happening who know what the stock price would be. Causing even more envy from across the pond.
Three BIG missteps of many that has put the Boeing where it is now.
Does not excuse all the shenanigans Airbus has done over the decade, yall complain about Boeing’s Uniteed 737-7 deal being below cost, Still trying figure out how the walk away leases AA got for their A300s were legal. Wish my last car lease was so generous. The Eastern deal for A300s were even more generous. Or the sweet heart deal CEO Wolf at USAirways got to switch his fleet over to Airbus to become at one time the largest Airbus operator. Again, a struggling small major airline Boeing took for granted. Not mad at USAirways, I would have taken the deal too. And who did US eventually merge with? AA, And who now has the largest Airbus fleet? AA. Kudos to Airbus on that one. And why for the love of……….did Airbus have to resort bribery when they had the strongest product line of the two OEMs? Airbus is fortunate that when the test pilot stalled its new generation A320 NB product at the 1988 airshow and crashed into the trees there were now social media, smart phones, three 24 hour news channels and internet discussion forums to talk about it ad nauseum.
Neither side is perfect, and the fact that Airbus pulled it off (though showing signs of getting a little fat itself) is impressive. If you think that is worthy of being smug………well……Have at it.
@Williams
‘Your smug and condescending posts are so entertaining.’
Blessing from the Pope.
‘ yall complain about Boeing’s Uniteed 737-7 deal being below cost, ‘
Quite the contrary, sir. I approve highly of said deal. In fact I think that BCA should sell more aircraft, as many as they can, at below cost. It’s a sure recipe for success, just like the 787.
But don’t get salty when the financials come out, margins are negative and it is said “Well, they sold the 737-7’s to United for below cost to secure the deal. What did you expect? Now they have to pay the price for that.”
This is what you are being faced with, yet when it is brought up, it becomes every excuse under the sun.
——————————————————–
When Boeing has negative margins, they are…
…selling aircraft below cost.
Thank you for understanding that. It seems you said the quiet part out loud.
When someone mentions how great the 787 is because it’s moved over 1,000 units, is dominating the A330 niche, has some 600 in the backlog, but it costs BCA over $7 billion to do so…
…it has been sold below cost.
It seems, mind you, that the entity most concerned with OEM’s selling aircraft below cost, is Boeing – when they filed a complaint against Bombardier and the C-Series.
——————————————–
Once again, thank you for finally understanding the financial aspect of what is trying to be explained, here.
Selling below cost is not a sustainable long term strategy yet it seems that this will continue on for the rest of the year, making it 5 straight years.
@William,
May be BA bet the wrong horses??
“A major driver of this Asia gap is Boeing backing the wrong horses in India. It thought SpiceJet and Jet Airways would be the big winners, while IndiGo was dismissed as a too-cheap, slow-growth player. Jet Airways collapsed, removing its capacity from the Current Fleet—and its orders from the backlog.”
https://leehamnews.com/2021/08/09/pontifications-a-deeper-hole-for-the-boeing-737-max-market-share/
@ Frank
The BA Back Office consistently gets highly annoyed by the subject of over-discounting. The reason is simple: over-discounting is 100% BA’s own choice and fault — which makes it more difficult to hide behind other scapegoats such as launch aid, foreign pilots, CoViD and trade wars, for example.
What I’d really like to know is:
– Was the BA sales department unaware that it was over-discounting, because it wasn’t adequately aware of program cost data?
…or…
– Did the BA sales department just have a cavalier attitude of “full steam ahead and f*ck the icebergs !”? After all, there were fat bonuses to be made when sales targets were met…
@Bryce
The message from the top is simple: win the order at any cost, we’ll figure out the rest later (including financial engineering thru’ the magic black box).
@Bryce
“Was the BA sales department unaware that it was over-discounting, because it wasn’t adequately aware of program cost data?
…or…
– Did the BA sales department just have a cavalier attitude of “full steam ahead and f*ck the icebergs !”? After all, there were fat bonuses to be made when sales targets were met”
I’m going to take this answer to a new post. It’s getting long.
I see many are not old enough to be around when Airbus got started. Jobs program? Subsidies?
Shame Google does a poor job of retaining pertinent old news articles.
Did you perhaps miss the subsidies page that was posted on the massive aid given to BA?
But go ahead and keep beating that drum – I’m sure that airlines will finally come to realize how poor Boeing is being treated so unfairly and shift all their orders back to BA.
I’m sure if you keep throwing stuff up against the wall, you might get lucky. Meanwhile, in the real world Q3 will be coming to and end in just over 30 days.
Any predictions?
@ Frank
Regarding Q3: the analyst consensus for EPS has been downgraded (yet again):
“Zacks Research analyst A. Dutta now expects that the aircraft producer will earn ($0.56) per share for the quarter, down from their previous forecast of ($0.08). The consensus estimate for Boeing’s current full-year earnings is ($1.98) per share.”
https://www.americanbankingnews.com/2023/08/16/the-boeing-company-nyseba-expected-to-post-q3-2023-earnings-of-0-56-per-share.html
***
p.s. For those who are clueless as regards finances: figures between parentheses represent *losses*.
If the organization is a “jobs program” is there really a hole to fall into?
Kudos to Airbus from transitioning from a “jobs program” and transitioning to a profitable corporation with strong products. Sure wish that ugly American John Leahy had worked for Boeing instead Airbus. Then again, Boeing would not have listened to him anyway and probably fired him. Moot point.
Airbus was never intended a jobs programme.
Airbus was instantiated to provide e asynergetic shell for the buquet of national aerospace assets.
To persist as a super sales person you need to have something to work with.
Boeing just couldn’t provide.
Boeing’s product line was stellar at the time, its management may not have been.
IMHO, Airbus should have launched in 2000, an All-CFRP Tri Engine (x3 GE90).
It would have carried 11-Abreast 2-class 450 seats ~ 13,000 km design range would have been just a gauge slightly above the 777-300ER.
-> 76 meters of lenght.
A Freighter version of 66 meters of lenght (10 meters less than the passenger with the same fuel load ~ 203,000 Liters) would have been an excellent replacement for the 747-400F.
That’s not all,
Like the A330/A340 joint development a decade earlier,
An all-CFRP Twin Engine version (x2 GE90), would have carried 2-class 380 seats ~13,000 km design range and 175,000 L of usable fuel
thanks to a proxy 777 classic CFRP wing of 65 meters wingspan
11 abreast cabin, it would be shorter than the 777-300ER (66.20m vs 73.7m)
But how is this possible? Ha ha!!! Fairy dust that I would never divulge!…
It is a “me-too aircraft” of the 777-300ER but with the advantage of boxing it with the streched 3-engine and a Freighter.
We have already seen the impact of a family boxing an alone aircraft.
Sales perspective of the 3 versions -> 2000-2019 = 850 aircraft since it would have the entire A380 market and a little more then
-> ~1/3 of the 777-300ER and
-> ~250 Freighter ordered since its launch.
Not finished
Airbus launch the A350-900 in 2006 and certainly collect another 850 orders to total 1,700 aircraft sold in 2019 for widebody Airbus.
-> I already explained the missed opportunity to have launched an all new CFRP 400-seater Twin Engine as early as 2019 by turning to GE and the GE9X ($$$) arguing the beginning of the problems of the 777-X.
Imagine all the 777-X canceled from 2021…
Qatar Airways CEO AAB would have certantly said this,
,..”The technological design of the AiRrbus A390 is innovative, and impRressive…”
And,
…”I’m not going to sit here and sit idly by for the 777-X to be certified. I cancel and I buy as many Ultra efficient A390 + 30 more..”👍
—
Emirates CEO T. Clark would have certantly said this,
“…The Ultra efficient All CFRP A390 is the best alternative if not better than the A380.
The Al Maktoums canceled then ordered with as many Ultra efficient A390 GE9X powered and 50 more…”
👍
But Airbus does NOT have the appetite to do anything in the widebody, letting Boeing reign over its kingdom!
Thks
@ Checklist
If the A380 were designed later, it may have been a tri engine aircraft with killer and untouchable CASMs. Airbus and John Leahy was fixated on the 747. Airbus wanted the same high margins Boeing used to earn on the 747 when it was the plane that had range. Whats funny, Airbus should have been fixated on the 777. Airbus spent over a decade watching the A340 get boat raced in sales campaigns against the 777. Airbus finally got some religion when they released A350 part 2.
William
But the A380 was never a TriJet.
Anyway even Twin Engine it was too big.
I don’t know what were the circumstances of this gigantism when they decided its size in 1997 either the desire for Emirates, or the desire for Emirates coupled with the fear that Boeing would come up with something bigger later ?
Anyway, it is clear that no market research has been established.
That’s the difference with Airbus and Boeing.
One studies and aims at a market (Boeing) and the other shoots before aiming (Airbus).
I agree they were obsessed with the 747, plus they underestimated the 777.
John Leahy even admitted that they believed 7E7 (787) was a smokescreen.
Lots of ego, that’s the image of Airbus.
Thanks you very much
Williams:
The term a few major mistakes does not apply to Boeing.
There have been a significant number of screw ups in regards to production as well as strategic stupidity (787) you could get something for nothing (risk sharing, partners not suppliers) as well as doing a huge tech change (spun composites) and a outsourcing at the same time.
While you could debate at the time on corporate ops, its been clear for a long time that share buy backs and dividends with no product is a dead end. Its called Pillaging, the 30 years war comes to mind.
That was a deliberate decision and each subsequent CEO got out with all their money before things came crashing down. Not caring what mess you leave behind is not a mistake, its deliberate .
People wonder why Airbus has survived its failures, behind it is always that Airbus is a jobs creator and while you can convince yourself something like the A380 is the way to go, they did not sink the company doing so.
Not dealing with your tech problems (Boeing) comes back to bite you as there is no free lunch.
“Brand new Boeing 747 scrapped after 16 flights”
https://www.cnn.com/travel/article/boeing-747-vip-jet-scrapped/index.html
New article about JetZero,
The return of Mcdonnell Douglas without the Suite-C and all the agility of a StartUp!
(I have already explained why)
“JetZero looks beyond Pentagon to airlines with radical jet”
“We’re beginning conversations with all of the airlines and finding out what their appetite is for aircraft in the middle market,”
CEO Tom O’Leary to Reuters
https://www.reuters.com/business/aerospace-defense/jetzero-looks-beyond-pentagon-airlines-with-radical-jet-2023-08-18/?taid=64dfc213f243fd000147ea8a&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter
God bless America and the US industries -*-
JetZero has only 46 employees…with no testing or production facilities.
Boom 2.0
It’s a startup.
Northrop Grumann will build the first prototype.
I understand that it can annoy anti-Americans. Because it’s neither China nor Europe that will do it 👍
God bless America -*-
Plenty of startups in other countries — but with far less unrealistic hype.
90% of US startups go belly-up within 15 years.
Just look at all the failing “dreams” in the eVTOL and BEV arenas.
WeWork…ahem.
So NG is building this then and not JetZero. As Bryce stated, JetZero does not have the means to carry this out. So what does NG get out of this? JetZero’s IP?
What IP?
Various countries/companies have been studying BWB designs since 1924.
NASA and Airbus have had flying prototypes for years, and the Chinese have now also joined the club.
What’s left to patent, other than loose change?
I don’t know, just trying to figure out why JetZero is involved or it is a backdoor way for NG just be involved since they have flying wing experience.
williams:
My take as well, this is some weird stuff, NG does not need the idea for the BWB.
I have no clue as to what and why JetO exists, I do know the USAF is very dysfunctional at the top, the F-35 program was their idea.
Concurrent production does not work and they know that as well as a failure to allocate normal spare parts.
NG is not going to risk their $$$.
Boeing flew a prototype BWB with a 21 ft wingspan for 7 years:
https://en.wikipedia.org/wiki/Boeing_X-48
@ sPh
That’s the interesting bit here, isn’t it?
Rather than showing interest in BA’s BWB program, the USAF instead threw $250M at a 46-man start-up that needs to lean on NG in order to get anything done.
Says a lot about all parties involved.
@Bryce
NASA has to pay like 50% more for the TTBW demonstrator built on a 25 year old airframe.
@ Pedro
It’s going to be really interesting to see what BA/NASA end up doing to that old Mad Dog.
For example:
– Will the engines be left at the back? Or will some attempt be made to hang engines under the wings?
– Where will fuel be stored?
– What roll tolerance will it have during landing? What’s the risk of a wingtip striking the ground?
Makes no difference to NASA — they’re just having geeky fun.
For BA, there’s somewhat more on the line.
Re: Boeing X-48
“Boeing once toyed with a blended wing-body, a sort of flying wing, to produce dramatically better aerodynamics and fuel efficiency. […] But tests with a mock-up produced such a negative reaction that the company dropped the technology, except for military refuelling aircraft.”
First flight in 2023 still on target??
“The programme is already delayed, with NASA in 2020 previously aiming to have the aircraft flying in 2021.”
https://www.flightglobal.com/airframers/flight-control-issue-prompts-nasa-and-lockheed-to-move-x-59-back-inside-for-troubleshooting/154719.article
> Boom 2.0 <
Yeah, verily; at least until *clearly* shown otherwise.. smoke n' mirrors:
it's [now] the American Way, with the Financial Engineering tail wagging the Manufacturing / Engineering dog.
https://www.flightglobal.com/aerospace/ehang-completes-testing-for-eh216-passenger-evtol/154636.article
A Chinese thing copied from whom please?
Lol!
More PR fluff to detract attention from the reality on the ground at BA:
“NASA partners with Boeing on Mach 4 passenger aircraft”
https://www.aerospacetestinginternational.com/news/nasa-partners-with-boeing-on-mach-4-passenger-aircraft.html
This may or may not be true, however it is not sustainable programs such as JetZero’s BWB or Boeing’s TTBW that will set new standards for the next 60-70 years.
(2095-2105)
And it is neither the Chinese nor the Europeans who are going to do it unfortunately.
(!) Keep in mind that Airbus is not able to beat Boeing if it doesn’t come 20 years later like the A320 vs 737, right?…
👎
Does Tim Clark know this? Is British Airways still looking for used aircraft?
Want An Airbus A380? Thai Airways Is Selling 6!
https://simpleflying.com/thai-airways-selling-6-airbus-a380s/
Global airlines might be interested: they recently snapped up four A380s for a new, premium airline that they’re planning.
Mind you, that airline has an uphill climb — but one can never know what will come out of the hat.
https://simpleflying.com/global-airlines-agreement-three-airbus-a380-june-2023/
Thank you for that link, read a rumor there was someone willing to flush millions…….errrrr……….. a startup airline with a business plan involving the A380.
British Airways stated they were in the market for used A380s in good condition. Smart move since the aircraft is tailored made for them. Not sure how well Malaysia took care of theirs, theirs should have low cycles. Malaysia is no Singapore.
Airbus will support the A380 well into the 2030s, but parts may start to get expensive just as it did with the MD80/90 and 757.
I have grave doubts about the viability of Global Airlines.
That having been said: Starlux is a premium-heavy airline in Taiwan, and it runs a sizeable fleet of brand new A321neos, A330neos and A350s. So there’s evidently a market for next-level luxe in the aviation world.
It will be interesting to see the interior of the first Global Airlines A380s when they’re ready.
I think BA’s statement that they would like – and make good use of – more A380s was made some years ago. I cannot see them buying more in the climate of today.
BA indicated at the time that the cost of re-fitting the interiors of secondhand A380s was prohibitive.
It’s curious that Global airlines doesn’t appear to have this problem.
It’s also curious that operators such as Qantas, Etihad, Lufthansa, etc., didn’t have a problem spending huge sums of money de-mothballing their A380s after CoViD-related storage.
BA’s story doesn’t seem to add up…
Bryce, Bryce Bryce…
you and your french friend
(I specify, european, in other words anti American) seem not to be informed (or UNDERSTAND) that Northrop Grumann soon will build a scale, a true prototype.
I repeat,
Soon will build a scale, a true prototype!!
This is a first in the entire history of aeronautics.
I repeat
This is a FIRST in the entire HISTORY of aeronautics.
Repeat After me!
That’s why I told you, it’s neither the Chinese nor the Europeans who did it.
So thank you for relaxing a bit and enjoying its flight soon.👍
Repeat After me !…
-*-God bless America and God bless US industry -*-
Checklist – I have to say that your garbled and unintelligible messages do not mark you out as someone with American roots either – rather, you seem to be someone with a deep hatred of Europe and Airbus in particular – how dare they have the hubris to compete i a market that is rightfully Boeing’s to command and dominate! Which doesn’t make for making your posts rational. understandable or meaningful. A lot fewer of them would be very welcome – less is more!
Thanks for this comment. I’m pretty sure it’s not human, though there appears to be occasional human input in its output. 😉
Yah – anytime there is a comment from that name, I just don’t even bother reading it anymore.
I’m presently deleting its posts (unopened) when they appear in my
email inbox. No substantive content = no loss. Easy, and fun. 😉
I now also just skip its posts without reading them.
Utterly devoid of any content.
@Vincent & Bryce
I wonder what happened to Duke?
@ Frank
I’ve asked myself the same question: Duke’s comments stopped weeks ago.
Remember commenters Leon, Pablo and Gerrard White? Also disappeared without a trace.
And we haven’t seen anything from Richard Davenport in a long time, either.
Richard Davenport here … I haven’t been able to do much of anything for quite a bit. I’ve had some serious medical issues to deal with. Hospital / Rehab etc. Hope you all are keeping up the good analysis and discussions.
Others
(!)
In reaction to the stupid article published around 2011 where the former CEO of BCA Ray Conner addressing the employees.
The context is to prepare, as we have seen almost a decade ago and on several occasions, a preparation for layoffs
under Boeing CEO Jim Mc Nerney
who was one of the important players to bring Boeing to where it was in 2019-2020!
It’s a CLASSIC MANAGEMENT technique that I KNOW.
The 737MAX8 costs more than the A320neo due to its positioning being a little larger.
Just like the 787-10 Dreamliner facing the A350-900 with a fairly substantial difference of 30 SEATS in 2-class!
-> Just like the 787-9 cheaper than -10 but more expensive than -8…
…Not difficult to understand…
It’s a completely normal thing and I think journalists just like to cause a stir you know the hype.
As a result, the prices set by Boeing are always unknown, confidential and do not necessarily constitute substantial discounts and cannot be admissible even more so a decade later.
-> No proof
-> No source
Thks
How often have we heard this before?
“Boeing Readies 737 Max Deliveries to China After 4-Year Hiatus”
“The initial handovers are expected to take place within weeks, said the people, who asked not to be named discussing confidential matters.
“This month, Boeing moved two of the single-aisle jets originally built for Chinese airlines out of storage. However, it wasn’t clear until now if those planes were destined for their original buyers, since Boeing has diverted some planes from inventory to alternate customers.
“China Southern Airlines Co., the country’s largest carrier, is poised to take the first 737 Max from Boeing, according to one of the people. Officials for China Southern didn’t response to requests for comment. ”
https://www.bloomberg.com/news/articles/2023-08-25/boeing-readies-737-max-deliveries-to-china-after-4-year-hiatus
***
Next question: how many Chinese MAXs are still out in storage? Several have already been re-sold/delivered to other carriers, and lessor CALC jetissoned its 64-unit order last week.
Boeing has moved on from China. GeoPolitics will not change for a LONNNNNNNNG time. Besides the 500 unit orders seem to be coming from India, not China.
> Boeing has moved on from China <
As though they presto-changeo can.. can you say "sunk costs"?
#shouldbefine
They don’t have a choice. Maybe Skynews have not announced it yet in the EU but China and the US are in GeoPolitical struggle. Whether one agrees with it or not it is what it is.
But you know this already.
> Boeing has moved on from China <
Must be at crawling speed: BA still has ~220 MAX in inventory lately.
‘Boeing has moved on from China.’
That’s one way to look at it, I suppose.
Another would be that since China is the customer and is the one who ponies up to the bar with it’s cash, you might also say that China has moved on from Boeing and taken their money elsewhere.
@ william
Reference to “GeoPolitical struggle” is unnecessarily obfuscating: it’s just a good old-fashioned trade war, started by someone who didn’t understand how tariffs work.
The same someone also started a trade war with the EU, and imposed new sanctions on Iran and Venezuela.
All of those actions have backfired.
@Bryce
‘started by someone who didn’t understand how tariffs work.’
I would have a slightly different take on this;
While there were undoubtedly people surrounding the individual in question who told him to go ahead with this, there are others who also undeniably told him what would happen. There is historical precedence here, isn’t there?
He just didn’t care.
It was jingoistic, whip up the base, rhetoric and he didn’t care who it hurt. Look at the farmers, who vote overwhelmingly in that direction and how they got hammered. He had to give them billions in aid to make ends meet.
Thing is, they don’t care. The vote against their own interests, because it more important to ‘own the other side’.
Pure hatred over common sense.
adding to Frank P:
The issue comes up when you think your projecting power is omnipotent
85 maxs’ left in storage from Chinese carriers.
https://finance.yahoo.com/news/boeing-readies-737-max-deliveries-171458099.html#:~:text=Boeing-,Readies,-737%20Max%20Deliveries
“we’re almost on a glidepath to an offramp to a pre-delivery delivery countdown for *finally* delivering those old, mothballed MAXs to China!”
Sure, sure.. *show me*, don’t tell me; because Boing almost never in fact does what they say they’re gonna do.
“… Sure, sure.. *show me*, don’t tell me; because Boing almost never in fact does what they say they’re gonna do”
And they never do things for the reasoning they present to the outside.
Arguing for reason B they were regularly forced by some A mishap.
Good point. Also, if China does in fact accept a few MAXes it will be for their own strategic reasons, and will (likely) convey no useful
information about what they’ll do the future.
“What do you mean you don’t want all of them?” One commenter here claims it’s because China “can’t afford them” [chuckles].
“Commerce Secretary Gina Raimondo is set to visit China on Sunday to promote US business interests.”
NYTimes:
Raimondo Heads to China to Both Promote Trade, and Restrict It
It could be worse…a lot worse:
Trump Courts a Global Trade War
He promises a new 10% border tax on anything made abroad.
https://www.wsj.com/articles/donald-trump-10-percent-tariffs-trade-war-benjamin-harrison-69ba4c2a
I guess because it worked so well last time…
Perhaps she now realizes what Gallium and Germanium are… 😉
From that Yahoo Finance link:
“Boeing has 85 undelivered 737 Max jets designated for China in storage, and has found buyers for another 55 aircraft that were originally built for Chinese customers”
The latter part of that sentence is commensurate with what LNA recently reported (55 ex-China frames promised to Air India).
Add in the various ex-China frames that have already gone to other airlines (Akasa, UA, AA,…) and it would seem that the current China backlog is a mere shadow of what it once was.
What happened to this 737 MAX?? Any idea?
https://www.reuters.com/business/aerospace-defense/boeing-737-max-jet-headed-toward-china-completion-plant-source-2022-03-15/
Good question.
Seems to have fallen into a black hole 🙈
I can’t help but smile reading this blog. There are so many “talented” people here that know just how Airbus and Boeing should or should not have designed their airplanes. I hope Airbus and Boeing are looking here for new talent.
Looking forward to those third-quarter Financials..
“they’ll make it up in volume.” 😉
> Boeing still has ~220 MAX in inventory <
Make it up in volume- by selling each of them at a loss. Simples!
Even if they make a dime vs original production cost …
The post production extra cost ( fixing things, storage, loss of value ) are killing them.
Wouldn’t it be great if one could get a true accounting of what the final cost
of those MAXes is for Boing?
Mr. Godot will bring that ledger .. eventually.
Here’s a peek:
Commercial Aircraft Programs
‘Commercial aircraft programs inventory includes approximately 220 737 aircraft and 85 787 aircraft at June 30, 2023 as compared with approximately 250 737 aircraft and 100 787 aircraft at December 31, 2022.
At June 30, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 737 program: deferred production costs of $4,739 and $2,955 and unamortized tooling and other non-recurring costs of $591 and $626. At June 30, 2023, $5,297 of 737 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $33 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.’
———————————————————————-
Whatever it is, it went up by ~$1.7 billion over the past 6 months. They also need more orders to cover the last little $33 million as 3,839 deliveries will not be enough to cover the DPB.
Using program accounting relies heavily on estimates. Those numbers work out to $1,234,436.05 per airframe. The question(s) I often wonder about is:
1) Does BA also estimate a profit in each delivery, to be added to it’s margin, for each delivery – or has that been zeroed?
2) If so, how much have they allocated as profit?
3) If Boeing get’s Max production up to 500 a year, it’ll take over 7.5 years at that rate to zero the DPB
—————————————————
Something Interesting:
This is what was said about Inventory and the 737 Max program, just 3 months earlier:
‘Commercial aircraft programs inventory includes approximately 225 737 aircraft and 95 787 aircraft at March 31, 2023 as compared with approximately 250 737 MAX aircraft and 100 787 aircraft at December 31, 2022.
At March 31, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 737 program: deferred production costs of $3,913 and $2,955 and unamortized tooling and other non-recurring costs of $606 and $626. At March 31, 2023, $4,493 of 737 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $26 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.’
Two things:
In 3 months, they moved 5 Maxes out of Inventory
and:
What happened in June 2023? The Paris Air Show, where BA booked more orders, right?
Well, those orders are included in the Q2 financials – but what happened in Inventory?
BA needed additional orders to cover $26 million in the DPB at the end of Q1. They went to Paris, got more orders – now they need MORE future orders to cover $33 million, as of the end of Q2.
$26 million——–> Got more orders———->$33 million
Aren’t more orders supposed to bring that number down?
Thanks for this comprehensive comment on the MAXes, Frank;
it’ll take some time for me (not a numbers guy) to fully parse it.
@Vincent
In a nutshell;
The Deferred Production Balance (DPB) is a place where Boeing can stash expenses until they decide to parse them out slowly against sales, lessening the impact they have in the quarter.
The DPB for the 737 Max grew (not a good thing) from $2,955 to $4,739 in 6 months (that’s $4.739 billion).
Boeing then estimates when all those expenses will get removed from the DPB and used in the financials as an expense.
Before the Paris Air Show, they estimated that almost everything would be expensed by the Max orders they currently have on the books, plus expected future orders of $26 million.
After the Paris Air Show (when they got more orders) they said they now need expected future orders to cover $33 million.
But you got more orders at Paris…
Boeing 737 MAX
296
Avolon Air Algerie Air India Luxair Akasa Air
https://simpleflying.com/boeing-vs-airbus-paris-air-show-2023/
That number of expected future orders needed to cover the remaining DPB is supposed to go down with 296 added orders, not up.
Bryce
…”Don’t forget the stellar *eight* orders for the 777-8P…”
—
The program is now centered on the 777-9 and 777-8F, which is more than enough when you know that Boeing has complete and diversified products well above its competitor Airbus,
with the 777X and the 787 ( Dreamliner…
My question is,
What could Airbus do for its next development that could complement the A350?
(!)Instead we had such an ambitious vision to reengineer the A330 to a “neo”, based on an airframe over 36 years old and an A350 launched 18 years ago…
Wow!
Vincent
No obligation to sell them at a loss if not your wishful thinking
They can be sold decently but in return be available for an airline that does not want to queue and wait until 2028 for example.
Your “strawman” argument is pretty weak.
“No obligation to sell them at a loss ”
The alternative is keeping them and builidng a museaum around them.
Uwe
..”The alternative is keeping them and builidng a museaum around them….”
—
The Qatar Airways A350 would have been a fine specimen to visit in a museum as well. A bit like old paintings when the paint wrinkles…
It’s not cheap to maintain those hundreds of 737 MAX in top shape.
museum not a joy ride center 🙂
https://twitter.com/salisbot/status/1694714413071421544
Absolute numbers aren’t all that conclusive.
relation to overall commercial activity is more informative.
Please, I strongly suggest that you develop your opinion a little more explicitly.
History to gauge your knowledge. All of these were successful startups.
Without America they will not exist…-*-
If you lack comprehension on some post or other you should not answer.
Uwe
That’s why I asked you to clarify
The last part,
“Without America they will not exist…-*-”
Is not specifically addressed to you personally.
I hope it’s not the USA that annoys you?
> If you lack comprehension on some post or other you should not answer. <
if only..
Can you understand that…?
https://twitter.com/Boeing/status/1692206726919893177?t=iKVhGcUgcWizIC58UCDvEA&s=19
The beauty of America…
-*-
https://twitter.com/SpaceX/status/1695337464024707506?t=2xcUx13-Rpu496AhdPytQQ&s=19
-> SpaceX Blast Left Officials in Disbelief Over Environmental Damage
https://twitter.com/JCOviedo6/status/1695147127746298227
ESA postpones Ariane 6 hot-fire test again
“The European Space Agency says a test-firing of an Ariane 6 core stage has been postponed again…”
“ESA acknowledged earlier in the month that the inaugural launch had slipped to some time in 2024, but has not provided a more specific date.”
https://spacenews.com/esa-postpones-ariane-6-hot-fire-test-again
A full 6 days delay…🙈
I guess all those 1 week delays add up, because the first launch is 4 YEARS late.🤣
IndiGo Adds Delhi – Hong Kong Service From Oct 2023
https://twitter.com/aeroroutes/status/1695108831246787060
Wasn’t someone here confidently saying that India was Boing’s future?
https://leehamnews.com/2021/08/09/pontifications-a-deeper-hole-for-the-boeing-737-max-market-share/
Tx Pedro..
Always opportunities for scraps.
Jeez,
Comments were relating to China and how they were just about ready to start taking Max’s from BA. That was over 2 years ago.
“Boeing CEO David Calhoun says at the top of the company’s earnings’s call that remaining global regulators (read: China) are expected to approve the 737 Max for return in the first half of 2021.”
They got an eventual return to service of the Max’s they had there, but not taking any new ones…
2 years ago…
Any day now, Frank.. hope springs eternal. 😉
Article from 2 years ago..
It’s the wishful thinking that drags on…
Further evidence of a severe downturn in the air freight sector — this time, from Turkish Airlines:
“Turkish Airlines has No Interest in New Boeing 777-8F”
“Notably, the airline’s cargo revenues sustained a 44% decline during the second quarter of 2023 compared to the same period in 2022. Simultaneously, their contribution to the overall company revenues diminished from 26.9% to 12.5%.
“This decline, primarily attributed to a worldwide excess supply and the prolonged effects of seismic events on their operations, which necessitated the reassignment of cargo capacity for humanitarian relief efforts, has been compounded by an augmented availability of maritime vessels.
“Reduced containerized cargo prices further exacerbate the mismatch between supply and demand.
“As a result, the competitive edge of air cargo in relation to maritime transport is becoming less pronounced, and the shift from sea to air that gained momentum during the pandemic has slowed considerably, as Murat Seker revealed in a recent investor conference call.”
“The airline also noted a 35% dip in cargo yields for the present year. However, they anticipate a moderation of this decline to approximately 25-30% during the latter half of the year. ”
https://aviationa2z.com/index.php/2023/08/27/turkish-airlines-no-interest-in-boeing-777-8f/
They also have lost interest in the 330f..
Becoming a 777f only freight carrier ..
So much for being the world’s largest 330f operator.https://www.ch-aviation.com/portal/news/130965-turkish-airlines-touts-b777-200f-as-only-freighter-type
Always interesting to see how comprehensive reading skills continue to deteriorate… 🙈
Notice the difference between your lead in and mine Einstein !!
Love the way you emphasize no 778f and omit the no 330f part as well !!
Are you triggered again because your beloved a330f has absolutely no value whatsoever..
Or are you fuming because they’re becoming an all 777f operator !!🤭😂
Looks like someone *still* hasn’t been able to properly read the story…🙈
Looks like someone still hasn’t accepted the fact AB couldn’t deliver a freighter the masses wanted ,. No wait, the converted freighter is selling like “Hotcakes” is term I recall..
Memo to Byrce 📝
All freighter conversations are selling like HOTCAKES .!!
Even your latest offering is comfortably outsold by the 8f..
Touché…
I so know you don’t give up easily..
👶..
Just like a child ,you must get in the last word..
The floor is yours !!
And, yes, ladies and gentlemen: someone *still* hasn’t been able to properly read the story…🙈
that one’s up there with checkbot- though the clear winner with exclamations. Convinces me every time.
Here’s an interesting little sum regarding widebodies.
Families recently retired or currently being retired:
BA:
747: 1230
767: 1000
Total : 2230
AB:
A300: 500
A310: 200
A380: 30
Total: 730
Currently on the order books (new frames):
BA: 2190 (787 + 777X + 767F)
AB: 1340 (A350 + A330neo)
So:
2230 old BAs gone but 2190 newly ordered BAs coming.
730 old ABs gone but 1340 newly ordered ABs coming.
Legacy families currently flying:
B777: 1713
A330 ceo + A380: 1486 + 220 = 1686
Notice anything?
Forgot the A340: 170 of those have been retired, with 200 still flying.
So, for AB this gives:
900 old ABs gone but 1340 newly ordered ABs coming.
Another delay in the 737 deliveries
https://vigourtimes.com/airplane-deliveries-to-be-delayed-due-to-newly-discovered-flaw-in-boeings-737-max/
Airplane Deliveries to be Delayed due to Newly Discovered Flaw in Boeing’s 737 Max
This story was already initiated above by @Pedro.
It seems that BA is still trying to assess the extent of the screw-up on delivery planning.
I wonder how many MAXes delivered YTD. Will they hit 350 for the year (each likely at a net loss)?
So I just had a conversation with someone in the know;
Apparently it traces back to Spirit and one of their suppliers.
Thanks for that info on Spirit and their subs. I’ll take a shot and predict 340 MAXes delivered in 2023, against Boing’s claim- which they have not modified, through their unending travails- of 400 to 450.
Net profit? No comment.
hmmm…maybe AVIC SAC or Aerospace Dynamics for aft bulkhead? mostly manually drilled, not automatic fastening
https://www.airframer.com/aircraft_detail.html?model=B737#38
Spirit carries $640 million of forward loss provisions on its balance sheet thanks to labor and supply-chain inflation.
I doubt it’s sustainable in the long run without a “rescue”.
https://www.washingtonpost.com/business/2023/08/24/latest-boeing-glitch-shows-aviation-supply-chain-has-too-many-weak-links/59e6d7ae-42ac-11ee-9677-53cc50eb3f77_story.html
@ Pedro
Who can rescue it? And who’d want to rescue it, seeing as it’s caught in a trap of increasing costs and paper-thin margins on contracts?
Its current market cap is $2.17B (was $11.7B in Jan. 2018).
BA can’t cough up that kind of money — and, even if it could, such a rescue would never clear antitrust oversight, in view of Spirit’s work for other OEMs. Same applies, in reverse, to a rescue by AB (in addition to nationalistic concerns).
@Bryce
My guess is the cash has to come from somewhere, if not Spirit, then BA has to pony up. Are there other alternatives??
Rob’t L reminds me a little of ol’ Duke..
😉
Bryce
‘Was the BA sales department unaware that it was over-discounting, because it wasn’t adequately aware of program cost data?
…or…
– Did the BA sales department just have a cavalier attitude of “full steam ahead and f*ck the icebergs !”? After all, there were fat bonuses to be made when sales targets were met…’
There is a 3rd;
When you are at the top, you can cut margins so thin that any misstep can be costly, with no cushion. They wanted to remain at the summit and figured they had control of the situation, with regulators, suppliers & customers all falling into line.
They squeezed and squeezed and got caught, big time
Something else of interest to you: BA has arranged two new revolving credits, to replace two old ones (that were expiring).
“Boeing opens up two credit facilities for up to $3.8 billion”
https://www.aerotime.aero/articles/boeing-credit-facilities
From that article:
‘Out of the total $19.8 billion revenue Boeing earned in Q2 2023, $8.8 billion was from Boeing Commercial Airplanes, as the division delivered 136 aircraft during the three-month period, 103 of which were of the 737 MAX/P-8 Poseidon programs.’
…and that’s the problem right there. 8.8 billion is 44% of revenues across the company. In 2018, BCA accounted for 60% of revenues and 66% of profit.
The other two divisions are strong enough to carry the company
“When Boeing Commercial Airplanes chief Ray Conner in February warned employees that jobs would be cut this year — anywhere from 4,000 to 8,000, as it turns out — he cited intense pricing pressure from Airbus. ”
The Airbus aircraft at this moment, have engine choice (NB) can carry containers (NB), fly further (A350/XLR), have wider seats, burn less (A350), have few quality issues and are build in Europe, Asia and America.
“intense pricing pressure from Airbus” sounds/ feels much better though, to explain market preference, specially when you need government.
AB’s product line-up also currently has less certification uncertainty (A321XLR + A350F versus 737-7, 737-10, B777-9, B777-8, B-7778F).
Where that’s concerned, ask Southwest about buyer’s remorse…and don’t forget a chat with Tim Clark 😉
It seems logical to go forward w/ the A220-500 about the time the A321XLR has its EIS. Pincer movement, you say? 😉
“intense pricing pressure from Airbus”
For those aircraft that have production slots which have been sold out for the near future, some say all the way to 2029? That pricing pressure?
Weren’t the decks clear to gobble up every order because AB had no available slots for customers and they were the only game in town?
Now don’t go making sense here Frank, and posing pertinent questions..
😉
Here’s another one:
The problem at BA, isn’t orders, it’s seems to be getting the aircraft delivered (and certified), yes?
‘Total workforce level at December 31, 2018 was approximately 153,000.’
https://s2.q4cdn.com/661678649/files/doc_financials/annual/2019/Boeing-2018AR-Final.pdf
‘As of December 31, 2022 and 2021, Boeing’s total workforce was approximately 156,000’
https://s2.q4cdn.com/661678649/files/doc_financials/2022/q4/c93682a4-8b3c-4251-a2ed-97c4e474a214.pdf
3,000 more heads and they can’t do what they were doing in 2018?
What – did they hire 3,000 more MBA’s? Or maybe 3,000 more social media people to go out there and tell everyone how BA is in great shape…
“3,000 more heads and they can’t do what they were doing in 2018?”
When you pushed[/ kicked] those with the most experienced out the door …
> What – did they hire 3,000 more MBA’s? Or maybe 3,000 more social media people to go out there and tell everyone how BA is in great shape… <
Hey, how else can you get rid of your best employees, and offshore
yet more jobs to India? I no longer think of Boing as an American
company, and see no reason to support their endeavors. Hell, AB
have created more new American jobs than Clueless and Co. ..
The picture it painted is not pretty.
https://www.nytimes.com/2019/12/09/business/boeing-737-max-whistleblower.html
Seems to me that Boing must buy back Spirit *if* they’re going to be a competitor to AB. Boing has said they will not do that, though. Hmm.
‘Boeing is our largest customer, and Airbus is our second-largest customer. For the twelve months ended December 31, 2022, approximately 60% and 22% of our net revenues were generated from sales to Boeing and Airbus, respectively.’
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001364885/4e23cf59-ecfa-4da2-9dde-150f09705879.html
Spirit financials. What does BA do with the 22% of work Spirit does for Airbus? And the other 18%?
Would regulators even allow a merger to happen?
Ah, thanks. More financial “wizardry” gone awry for Boing, then.
“foot, meet bullet.”
Over the most recent three years, SPR has bled ~$2 billion. Is it a “job” program?
WaPo: 5,000 pilots suspected of hiding major health issues. Most are still flying.
https://twitter.com/ByERussell/status/1696166682740289635
Weren’t we told after the MAX crashes that US pilots/airlines did things to a much higher standard?
Well, to a certain extent …
“Federal authorities have been investigating nearly 5,000 pilots suspected of *falsifying their medical records* to conceal that they were receiving benefits for mental health disorders and other serious conditions that could make them unfit to fly”
I see this reporting a little differently: If airlines can dump these pilots,
they can hire [more] cheap replacements. I’d bet said disabilities do
not affect their flight safety / health a bit.
“Always be Closing..” -Glengarry Glenross
Put that coffee down! Coffee….is for closers!
– The guy who Mitch sent
Heh!- great line, huh Frank?
Wasn’t the 1500 hours proficiency rule added to aid these pilots into civil life?
Forget America…
https://m.economictimes.com/industry/transportation/airlines-/-aviation/dgca-audit-finds-air-india-forged-report-of-spot-checks-in-13-instances/articleshow/103109358.cms
Looks like Boeing stock jumped +3.65 (Boing!) 🙏
And the worries of the 737MAX seem are not a big problem much to the chagrin of haters…
What’s going on as new false prophets announce Armageddon?
Predictions for a good announcement within 24, or 38 hours for Boeing?
Boeing
NYSE: BA
$227.06 +3.65 (1.63%)
I struggled to make sense of the reduction of 55 737 MAX aircraft in inventory:
“The Air India was finalized at the June Paris Air Show. When Boeing announced its second quarter financial results the following month, the MAX inventory accumulated during the 21 month grounding of the type was reduced by 55 aircraft.”
According to BA’s SEC filing:
737 MAX inventory
Sep 30, 2022 – 270
Dec 31, 2022 – 250
Mar 31, 2023 – 225
June 30, 2023 – 220
I think it’s more like this:
‘Boeing has 85 undelivered 737 Max jets designated for China in storage, and has found buyers for another 55 aircraft that were originally built for Chinese customers, Calhoun said during a July earnings call.’
https://finance.yahoo.com/news/boeing-readies-737-max-deliveries-171458099.html#:~:text=Boeing-,Readies,-737%20Max%20Deliveries
So the deliveries of those 55 didn’t happen during Q2, but they have found someone to take them on (of the original ~130 aircraft). Calhoun was talking in July, which is Q3, upcoming – so inventory should be reduced to 165, if they can get those 55 delivered by the end of Sept.
We shall see…
Does this mean that Boing’s 3Q Financials *could*
prove interesting?
McB’s quarterly results are always interesting, in that they give us a window onto an ongoing, slow-motion train wreck.
We know from experience that deliveries from inventory don’t generate (much of) a profit. They do, however, generate some cashflow, which will help (a little) to keep the wolf from the door, by helping to pay some bills.
I posted a comment on this in this morning’s new Pontifications article.