Leeham News and Analysis
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Leeham News and Analysis
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- 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: IAM 751 gearing up for Boeing contract talks in 2024
By Scott Hamilton
Sept. 19, 2023, © Leeham News: It’s September 2023, one year ahead of the expirations of the current labor contracts between Boeing and its touch labor union, IAM 751. (The contract with the engineers union, SPEEA, expires in 2026.)
The IAM district, whose members assemble all Boeing airplanes in Washington State, fired a warning shot across Boeing’s bow last week. It wasn’t the first.
751 urged its members to begin saving money in anticipation of a strike in September 2024. That was three years ago.
The strike fund information appeared in the 751’s March 2020 newsletter, Aero Mechanic. The same issue had commentary about the new pandemic. At that point, nobody thought the pandemic would last two years.
Boeing was already in trouble then. The 737 MAX had been grounded since March 2019. There was no end in sight when the grounding would end. Suspension of the 787 deliveries, for what became 20 months, was still another half-year away.
Poor financial picture in 2020, not great today
Boeing’s financial picture deteriorated dramatically. The company took on billions of dollars in new debt to survive. At the end of the second quarter, Boeing had $47.7bn in long-term debt. It had $14.9bn in long-term debt on June 30, 2019; the MAX had been grounded for 3 ½ months and COVID wasn’t even a gleam in the eye then. Boeing had $4.6bn in short-term liabilities, including the current portion of long-term debt, at the end of the second quarter this year.
Consistent profits are still elusive, and officials warned that another quarterly loss will be forthcoming in the current, third quarter.
How could 751 advocate in March 2020 that members begin building their own strike fund, given Boeing’s position then? How can 751 be telegraphing an aggressive position now, when Boeing’s financial position, production, deliveries, and profitability are still far from returning to normal?
In 2022, I asked Jon Holden, the president of the 751 District, this very question in an interview I did for a new book I’m writing about Boeing.
It’s unclear when negotiations will begin with 751 (or, for that matter, with SPEEA). The IAM has provisions in its contract that call for sending notifications to open up the agreement and begin bargaining. The old one will expire and the new one will be negotiated.
Given Boeing’s current financial position and the realities of production, deliveries, and erratic profits, one might expect Boeing to plead it’s in no position to be generous.
Additionally, even though there is no timetable set for a new airplane program, it’s pretty clear that one must be announced as early as 2027 if entry-into-service is to be achieved by the middle of the next decade. This is the EIS target pronounced by Boeing CEO David Calhoun.
Holding a New Airplane Hostage
I’ve no doubt that Boeing will hold a new airplane hostage to a new contract executives consider favorable to the company. This is as sure, in my mind, as the sun rising in the East and setting in the West.
In 2009, when Boeing realized it needed a second assembly line for the 787, officials vowed to establish the line in Charleston (SC) if 751 didn’t make amendments to a contract that was already in place. The district made several offers, which Boeing rejected. (Looking back, it was clear that the decision to put line 2 in Charleston was already made and nothing 751 could offer would change this.) Washington State was also manipulated in the process. Politicians were told the second line’s location was contingent on the unions. So Washington didn’t offer new incentives. South Carolina ponied up nearly $1bn in incentives. Washington State politicians were blunt in feeling that Boeing executives lied to them.
In 2011, when Boeing launched the MAX program, then-CEO Jim McNerney threatened to establish the MAX line in a location other than Renton (WA), where the 737 had been assembled for nearly 43 years. (Initially, the 737 was assembled at Boeing Field before being moved to Renton.) Establishing a greenfield final assembly line made no sense at the time. This time, 751 granted acceptable concessions.
A hostage too many
In 2013, with the launch of the 777X, Boeing was at it again. Executives began soliciting other states to build a new 777 factory. Some at 751 thought Boeing was bluffing, because—as with the 737—it made little sense to create a greenfield site. And, they noted, Boeing was already working on the site preparation for what was to become the Composite Wing Factory next door to the current widebody assembly plant in Everett (WA).
The 751 membership voted down controversial contract concessions. Boeing execs then went over the local district’s head to the parent “International” IAM, which could overrule any local at its own discretion. A second vote, in January 2014, was scheduled the day after the Christmas and New Year holidays. The timing was, in the view of some 751 members, intended to suppress voting as members trickled back from vacation. By the narrowest of margins, the contract concessions were approved.
Now, 2024 is viewed as recovery time. And Boeing will almost certainly hold the new airplane out as it has in the past. Vote our way and you get the airplane. Don’t and you won’t.
751’s outlook
Holden, in my interview in October 2022, said he knew nothing about the timing of a new aircraft. But it’s obvious that any program launch will come during the next contract.
“I know that when we get into bargaining, the next airplane programs will certainly be part of the discussions. We will make it part of the discussions,” Holden said in our interview.
As for the 2020 message to members to begin building their own cash cushion in advance of 2024 negotiations, Holden explained, “The message is really about in order to be successful in contract negotiations, our members have to be financially secure. It’s important that they save for contract exploration.
“There’s a whole lot of great things that happen when a family can save a little bit of money and be prepared and stand on principle. When you’re making a decision on whether you should give up reasonable things that a company is overreaching to take away, your financial stability at that time is very critical. Our goal is to reach a contract without having to strike. It is not our goal to be on strike. The livelihoods of 28-29,000 families are in the balance at that time and in a strike,” Holden said.
Boeing’s outlook
Although Boeing today is a shadow of itself at the end of 2018 when (to mix a metaphor) it was humming along on all cylinders, executives are optimistic. Calhoun and the CFO, Brian West, guide Wall Street and shareholders that it will be back reasonably close to normal in the 2025-2026 timeframe. They forecast free cash flow of $10bn. This figure is well below the 2018 cash flow. But Wall Street was giddy with the Nov. 2, 2022, projection and lost no time in boosting the stock by 18% in the following week.
These optimistic projections are hardly lost on the 751 leadership—or its membership.
“The reasonable things that we’re asking for will bring stability. Asking for more concessions on top of an overreach from 2014 [the 777X vote] doesn’t bring stability. If that’s the direction they go, then I know that it’s going to be a rough patch, rougher than it already is,” Holden said.
“There’s still a lot of anger over the loss of the pension, the defined benefit pension from 2014,” Holden continued. “The economics that the company won in that agreement should be able to carry the company through profitability in the future and it should be the reason that they place the next airplane programs here. They need to maximize the infrastructure we have here.”
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As LNA wrote recently, history is repeating itself in the airline industry. The United Auto Workers union wants to recover its defined pension benefits in the next contract with Ford, Stellantis (owner of Chrysler and Jeep), and GM. The Yellow trucking company filed for bankruptcy after its unions threatened to strike. Boeing supplier Spirit AeroSystems suffered a one-week strike when workers rejected the agreement negotiated by its leaders, who recommended approval.
I will be following the negotiations between IAM751 and Boeing
with interest.
@Vincent
I would pay close attention to UAW Fain’s unorthodox approach. What a breath of fresh air after the previous corrupt leadership.
https://www.bnnbloomberg.ca/how-auto-executives-misread-the-uaw-and-ignited-a-historic-strike-1.1972633
If Boeing is in no position to substantially raise pay and benefits for it’s production workers it is, logically, in no position to so grossly overpay its top executives. The same issue is a backdrop to the current UAW negotiations with the (former) “big three”.
But Detroit is making big money now. They can at least afford it. Boeing? They should give a good percentage of their stock to their employees.
751 transparency has never been that great, so saying something with confidence about their strategic thinking is risky. But maybe they have decided to force the issue of Boeing’s existence under its current charter, leadership, and so-called owners (the shareholders who actually owe the company those deficit billions on the balance sheet)? That’s really more of a question.
For a long time I’ve been trying to come up with another example of an American corporation that racked up such a huge net negative number in the equity section of its balance sheet and which did not either cease operations, be taken over by another entity, or the government. I have been unable to come up with a single example.
Now it is true that about 5% of the S&P 500 do not have a P/E ratio, so running a little bit into the red for a while isn’t that uncommon. But $15.8 billion non-GAAP with another $13.8 billion in so-called deferred costs on the 787 program? All coupled with an inability to assemble even one plane, tanker, or spacecraft such that it works per spec as it comes off the line?
Certainly one of the discussions the leadership of 751 had to have is how in the heck to they get rid of Boeing’s leadership team?
There is a not unrelated discussion one could have which is the legal enablement of such malfeasance in American corporate leadership. I like to call it the “Delaware problem.”
When Ben Franklin was sitting in his back yard entertaining delegates to the constitutional convention and trying to broker a compromise that would get us to a starting point for a federal government, the list of issues he was helping folks sort through was so contentious that he didn’t dare add laying a foundation for business law to the mix. The result was a corporate chartering process that remained with the states, which then started a race to the bottom in the chase for those chartering fees. Delaware won and essentially laid the foundation for what that state has evolved into, which is basically doing a land office business enabling every sort of criminal activity on the planet one can think of, ranging from money laundering for cartels to oligarchs stealing their country’s wealth. Even the most modest codification of some sort of ethical oversight is totally missing from the way they run things. Thus a cabal like these GE idiots running Boeing can continue to strip a publicly traded company of its wealth and run up debt without any apparent repercussions. Couple that with the dearth of basic ethics in the investment community that was unmasked in the 2008/09 CDO financial crisis and my we have an awful mess. So what is 751 to do if they want to have a chance at saving any of what is left?
Certainly they had to consider a move that would simply force the issue. Maybe this is it.
RTF:
I had somewhat in depth experience with two unions and a more detached of a third.
Of the two I had first hand knowledge, both were corrupt.
A bit like Ms. Baerbock and the German A350, politicians of any stripe (corporate types, union or otherwise) are suspect at best.
Hopefully this gets resolved to the benefit of both sides, we need a healthy Boeing operation (Calhoun and his ilk aside) and a understanding that its the Company and its employees that are the most important. Someone that can loose tens of billions of bucks is easy to come by (just ask me, I will volunteer to be the CEO for a year!)
So how about we throw how they pay the Boeing management, golden parachutes for complete failures (at least 3 previous Boeing CEO) and share buy backs?
note: I never got into any in depth so I don’t know about the 3ed Union, they did a good job of negotiating contract terms.
I beg to differ. BA spent over $43 billion in stock buyback after asking for concessions from workers repeatedly.
Don’t tell the workers BA is broke (because of mismanagement and mis-allocation of financial resources for stock buyback etc) when Dave refuses to relocate his residence, commutes by corporate private jets (over 400 trips!); BA spends over $100k a year to lease a satellite office for its incoming Treasurer.
In December 2018, almost two months after Lion Air flight 610 crashed, BA’s board authorized “a record US$20 billion share buyback program and boosted the company’s dividend [by] 20 per cent”.
Also note the last time Boeing stock split. Used to be when stock reached about 50 to 80/share there would be a 1.5 to 2 for one split. Last split was June 1997.
But that was before stonecipher and the plethora of GEwelch types invaded and before Phil Condit announced he had great admiration of the ‘ GE’ methods.
Now count if you can the number of successful programs since.
Exponential notation not necessary ;))
Thanks for pointing out Boeing’s post-MAX crash stock buybacks and dividend increases, Pedro.
OTOH
Secretary Pete mostly travels on commercial flights, in economy class.
https://twitter.com/davidshepardson/status/1704582934684963278
Secretary Pete should at least point out even if it isn’t part of his job description the crisis on board a/c with unruly passengers. There’s been zero “noise” from anyone on the federal level about this. Sorry, I know that I’m off topic.
Boeing has gotten rid of Engineers, QAIs, QEs and other employees who have stood up to senior management to say no! This is BS, dangerous, and people will die. I am one of them. Profit and Stock price over passenger safety and quality
I think passenger quality is up to the passengers to vote on but safety should not be compromised.
In the early 2000’s ( forget the exact year approx 2004-5 ) the ‘national IAM ‘ leadership got bought out by Boeing and overrode the local 751. That was the beginning of the takeaways. Speea had its own problems with corruption and a few inept ‘ leaders’-So the negotiations became more of a joke. Thus the McNearney ‘ employees cowering ‘ comment in 2014 was only partly right- IMHO it was the National ‘leadership’ of the
IAM that was cowering.
And the rest is history :-(((
A bright spot in the sky, amongst all the clouds:
https://aviationweek.com/air-transport/airlines-lessors/airbaltic-sees-imminent-return-normal-a220-engine-maintenance
AirBaltic Sees Imminent Return To Normal A220 Engine Maintenance
AirBaltic’s problems with maintenance delays on the Pratt & Whitney engines that power its fleet of Airbus A220s are easing, and the situation is expected to return to normal by November.
The carrier expects a further three A220s to arrive this year and three more next year, completing the 50 aircraft it has on firm order from Airbus.
Looking beyond those latest arrivals, the carrier is already in discussions with Airbus over the exercise of options for 30 more A220s as well as further aircraft beyond those options, Gauss said, as AirBaltic moves ahead with its long-term growth plan for a minimum fleet of 80 aircraft in 2030.
Frank P:
That would indeed be great news and sooner than I had been expecting it.
It would be fantastic news to see P&W get the GTF back on track.
The race to reduce the cost of labor has cost Boeing dearly and put the viability of the company at risk. Recruiting and retaining employees, especially mechanics, is an issue impeding quality & delivery commitments.
Boeing management had better look hard at the cost cutting strategy it has employed vis-a-vis labor and the results it wrought and make adjustments.
Or, you know, just keep doing the same thing and expect different results.
Two United Airlines 737NGs Found With Parts From AOG Technics
“United Airlines is replacing engines on two Boeing 737NGs after finding parts from AOG Technics …
“Virgin Australia Airlines and Southwest Airlines have also been identified as carriers to have found parts traced to broker AOG Technics.”
https://aviationweek.com/air-transport/airlines-lessors/two-united-airlines-737ngs-found-parts-aog-technics
What does a third party who also provided these parts to A320s have to do with production?
> Now, 2024 is viewed as recovery time. And Boeing will almost certainly hold the new airplane out as it has in the past. Vote our way and you get the airplane. Don’t and you won’t. <
Is it only IAM 751 who needs a new Boeing airplane? And if the voting / hostage-taking is a forgone conclusion, why hold a vote?
“At 3,975 mi. (3,454 nm), Montreal-Lima will be the farthest Airbus A321LR route in the carrier’s network. Both new routes will utilize A321LR aircraft with capacity for 199 passengers in a two-class configuration.”
https://aviationweek.com/air-transport/airports-networks/air-transat-serve-peru-a321lrs
Peru?
Off to Maccu Piccu and the Incas!
(better go to Tremblant a few times and get used to the altitude, first…)
Hey, the Boing MAX-10 will be able to do exactly the same thing- if one disregards its range shortfall; its hot and high limitations; and most importantly, its lack of certification, certification, certification (2027-8 EIS, maybe?).
Holden, in my interview in October 2022, said he knew nothing about the timing of a new aircraft. But it’s obvious that any program launch will come during the next contract.
“I know that when we get into bargaining, the next airplane programs will certainly be part of the discussions. We will make it part of the discussions,” Holden said in our interview.
—————————————————
So…
If I’m part of the Union and they came to me to ask what I thought about this, the first thing I would ask is: With What Money?
5 straight years of losses. $40 billion+ in net debt. $2.5 billion in annual interest payments. Production issues up the wazoo, especially with your Tier 1 supplier you sold us out of….
Where are you getting this magical $15 billion + needed to launch a new aircraft?
(Personally, I think it’s more of the MMA/797 bit and switch, all over again. Tell them a new aircraft is going to come, look serious about it, but when pushed, tell everyone it isn’t just the right time, yet…)
> (Personally, I think it’s more of the MMA/797 bit and switch, all over again. Tell them a new aircraft is going to come, look serious about it, but when pushed, tell everyone it isn’t just the right time, yet…) <
This.. the Real Story is not yet being told. I do not expect a new aircraft from Boing in the next dozen-plus years (i.e., essentially never). Boeing'll do much more PR-dancing, though.. it's what they're best at, now.
We seem to have some good accountants commenting here. I wonder if anyone has calculated how much labor costs are as a percentage of Boeing’s total costs?
Bonus points for any split by division, the amount for 751 members, the split between direct wages and other associated costs like health care etc.
This might answer the question of how any increase will affect the prices that Boeing must sell to break even etc
I’ll take a slightly oblique approach and note that *the far more successful member of the Duopoly* is not engaged in the continuing destruction and offshoring of its essential workforce..
Who would you put money on a dozen years from now: Boing, or Airbus?
https://s2.q4cdn.com/661678649/files/doc_financials/2022/q4/c93682a4-8b3c-4251-a2ed-97c4e474a214.pdf
Human Capital
As of December 31, 2022 and 2021, Boeing’s total workforce was approximately 156,000 and 142,000 with 13% and 12% located outside of the U.S.
As of December 31, 2022, our workforce included approximately 50,000 union members. Our principal collective bargaining agreements and their current status are summarized in the following table:
The International Association of Machinists and Aerospace Workers (IAM)
20%
We have two major agreements; one expiring in September 2024 and one in July 2025
The Society of Professional Engineering Employees in Aerospace (SPEEA)
10%
We have two major agreements expiring in October 2026.
The United Automobile, Aerospace and Agricultural Implement Workers of America (UAW)
1%
We have one major agreement expiring in April 2027.
————————————————————–
Everyone likes bonus points, but BA gives out as few details as possible. I’ll take another look and see what I can find for you
On Boeing pricing:
‘We enter into firm fixed-price aircraft sales contracts with indexed price escalation clauses, which could subject us to losses if we have cost
overruns or if increases in our costs exceed the applicable escalation rate. Commercial aircraft sales contracts are often entered into years
before the aircraft are delivered. In order to help account for economic fluctuations between the contract date and delivery date, aircraft pricing
generally consists of a fixed amount as modified by price escalation formulas derived from labor, commodity and other price indices. Our
revenue estimates are based on current expectations with respect to these escalation formulas, but the actual escalation amounts are outside of our control. Escalation factors can fluctuate significantly from period to period. Changes in escalation amounts can significantly impact revenues
and operating margins in our Commercial Airplanes business.’
“Escalation clauses based on labor indices”
Will Boeing management be rooting for the UAW in their present dispute?
That depends on which index and what is included I suppose
‘That depends on which index and what is included I suppose’
My business law & ethics hat says that any lawyer worth his salt won’t 1) leave that open to interpretation and 2) won’t let it be decided by only taking into account those employed at BA.
It would probably be a national number but might be a formula derived in the industry.
Boeing is IMO purposefully murky about their costs and this is represented in different ways. They lay out the Results From Operations:
Loss From Operations
The following table summarizes Loss from operations:
(Dollars in millions)
Years ended December 31, 2022 2021 2020
Commercial Airplanes ($2,370) ($6,475) ($13,847)
Defense, Space & Security (3,544) 1,544 1,539
Global Services 2,727 2,017 450
Boeing Capital 29 106 63
Segment operating loss (3,158) (2,808) (11,795)
Pension FAS/CAS service cost adjustment 849 882 1,024
Postretirement FAS/CAS service cost adjustment 294 291 359
Unallocated items, eliminations and other (1,532) (1,267) (2,355)
Loss from operations (GAAP) ($3,547) ($2,902) ($12,767)
FAS/CAS service cost adjustment * (1,143) (1,173) (1,383)
Core operating loss (Non-GAAP) ** ($4,690) ($4,075) ($14,150)
and
Total Costs and Expenses (“Cost of Sales”)
Cost of sales, for both products and services, consists primarily of raw materials, parts, sub-assemblies, labor, overhead and subcontracting
costs. Our BCA segment predominantly uses program accounting to account for cost of sales. Under program accounting, cost of sales for each
commercial aircraft program equals the product of (i) revenue recognized in connection with customer deliveries and (ii) the estimated cost of
sales percentage applicable to the total remaining program. For long-term contracts, the amount reported as cost of sales is recognized as
incurred. Substantially all contracts at our BDS segment and certain contracts at our BGS segment are long-term contracts with the U.S.
government and other customers that generally extend over several years. Cost of sales for commercial spare parts is recorded at average cost.
Which as you note includes Labour, but it given as a total number, including suppliers.
The following table summarizes cost of sales:
(Dollars in millions)
Years ended December 31 2022 2021 Change 2021 2020 Change
Cost of sales $63,106 $59,269 $3,837 $59,269 $63,843 ($4,574)
Cost of sales as a % of Revenues 94.7 % 95.2 % (0.5)% 95.2 % 109.8 % (14.6)%
—————————————————–
They do give a breakdown of sorts:
Loss From Operations
BCA loss from operations was $2,370 million in 2022 compared with $6,475 million in 2021 reflecting higher 737 deliveries and lower abnormal
production costs, partially offset by higher research and development spending, charges related to the war in Ukraine and other period
expenses. The 2021 loss also reflects a reach-forward loss on the 787 program of $3,460 million. Abnormal production costs in 2022 were
$1,753 million, including $1,240 million related to the 787 program, $325 million related to the 777X program, and $188 million related to the 737
program.
BCA loss from operations was $6,475 million in 2021 compared with $13,847 million in 2020. The 2021 loss reflects the reach-forward loss on
the 787 program of $3,460 million, abnormal production costs related to the 737 program of $1,887 million, and abnormal production costs
related to the 787 program of $468 million resulting from continued production issues, inspections and rework, partially offset by higher 737 MAX deliveries. The 2020 loss reflects the reach-forward loss on the 777X program of $6,493 million, lower deliveries and lower program margins
resulting from the COVID-19 pandemic, $2,567 million of abnormal production costs related to the 737 program, $623 million of severance cost, $498 million of 737 MAX customer considerations, $336 million related to 737NG frame fitting component repair costs and $270 million of abnormal production costs in the first half of 2020 from the temporary suspension of operations in response to COVID-19, partially offset by lower research and development spending. Lower 787 margins reflecting a reduction in the accounting quantity in the first quarter of 2020 also contributed to lower earnings.
———————————————————
Then in their The Boeing Company and Subsidiaries Consolidated Statements of Operations is:
General and administrative expense (4,187)
(coding for everyone in the office)
————————————————————-
But the thing that BA does is roll some expenses into the Deferred Production Balance (DPB). Like on the 737 Max program over the past 6 months:
‘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.’
So production costs for which cash was paid out went up some $1.7 billion, but did not make it’s way onto the financial statements, in the way of results of operations.
What was labour? What was supplier cost? Who knows? It’ll sit there until BA slowly expenses it out over time or until they do a big chunk write off, like on the 777X & the 787 programs.
This was also an increase over the previous year:
‘At December 31, 2022 and 2021, commercial aircraft programs inventory included the following amounts related to the 737 program: deferred
production costs of $2,955 and $1,296 and unamortized tooling and other non-recurring costs of $626 and $617.’
So in the past 18 months, the 737 Max DPB went from $1.296 billion to $4.739 billion.
Almost $3.5 billion increase.
I would hazard a guess that it is a great deal of labour cost for Max re-work…
——————————————————
Internally, I’m sure they know – but they aren’t going to tell us.
Fran P:
Once again you make my head spin. I always was good at handling my own finances, cash slow, expenses and try to keep as much cash in and costs as low as possible out.
The summations of Boeing or others is good enough for me, clearly right now Boeing is having its issues and if they ever get it corrected you will see that in profits (I know that is simplistic).
Or maybe when Boeing goes back to share buy backs we will know they have recovered!
“Or maybe when Boeing goes back to share buy backs we will know they have recovered!”
I must have missed the SARC note.
The prime reason for share buybacks is to gold or platinum plate the executive chutes.
The regular shareholders just the “mine” option- a deeper shaft
Share buyback must still be the “gold” standard of measuring the financial health of a listed co. – I kid you not, in 2023 after all the damages done by share buyback: from deferring R&D like a new clean sheet aircraft program year after year, to weakening the co.’s financial health as demonstrated after the pandemic and MCAS debacle.
It’s sarcasm.
Looks as though Boeing have been thrown another lifeline!
“The FAA on 19 September approved an exemption relating to lightning and radiation rules, allowing Boeing to proceed with the Max 7’s certification without first addressing non-compliance of the type’s “stall management yaw damper” (SMYD) system.”
(https://www.flightglobal.com/airframers/faa-exempts-max-7-from-lightning-rules-but-requires-wider-max-fleet-updates-by-2027/155032.article)
Maybe a 2027 EIS, then? Boing pointedly digs their own grave, while always proclaiming “we’re Nummber Won!”
We’ll see how it goes for that financialized entity:
(MAX-7 and -10; 777-X, KC-46, T-7A..).
Oh, I forgot the ongoing 787 reworks. Boeing’ll make it up in valium, though.
Government shutdown in ten days. Place your bet now.
Roger:
I would call it a realistic allowance based on past performance of the system(s) involved.
The reality is that the AHJs do that day in day out with AHD and some of those should be mandatory not whenever we get to it.
All it really is would be time to get the paperwork backing in order that proves what already is a fact and that its not an issue.
The A320 controls upgrade some years back that was quite serious that took a non standard work around that they gave them 5-7 years to fix.
Or letting the 787s operate with two iffy engines (Norwegian had a blowout on one out of Rome and limped back on the 2nd iffy engine that had higher time on it).
“Boeing and Airbus diverge on long-term China market expectation”
https://twitter.com/jonostrower/status/1704576602938687894
With its Global Market Forecast, Airbus said it expects China to need 9,440 new aircraft between now and 2042, 23% of its total expectation. That marked a major increase of 12% over its expectation a year ago …
https://theaircurrent.com/feed/dispatches/boeing-and-airbus-diverge-on-long-term-china-market-expectation/
I get the feelings Unions see the future and its bleak with automation making strides. Get your members the most now, because the union flee will not be able to stop the automation freight train.
Boeing now, Airbus next. VW is facing resistance from its unions as it tries to right size. It is and will be a world wide issue.
[F]irst United #A321neo on its first flight today at Airbus Hamburg, will be N44501. United has a total order of 120 A321 aircraft of which 70 will be A321neo and 50 will be A321XLR. First flight is scheduled for Dec. 14th from Chicago (ORD) to Phoenix (PHX)…
https://twitter.com/digro65/status/1704868935978340728
epi.org
CEO pay has skyrocketed 1,460% since 1978: CEOs were paid 399 times as much as a typical worker in…
https://t.co/PVooDICDRN
Flightradar24 joined Airbus onboard an A321XLR for a proving run up to the North Pole and back
https://twitter.com/ByERussell/status/1705371765172813942
Starlink lost over 200 satellites in two months – tracker data
https://cybernews.com/news/starlink-lost-200-satellites/
There are two issues that always seem to be forgotten.
1) The politcal weight in Washington State is increasingly [Edited, violation of Reader Comment Rules] and hates Boeing and any profit-making business. This is going to get worse over time as Baby Boomers and Gen Xers are replaced by Millenials and Gen Zers.
They are bent on making life as difficult as possible for Boeing with taxes and countless regulations.
As the 737 line eventually winds down, you can het your bottom dollar the “797” won’t be built there and gradually narrow body production will move to a right-to-work state.
The [Edited as violation of Reader Comment Rules] in Washington politics, who have never actually been union people themselves, see no problem in injecting the state in union-management issues and overriding union contracts, something that used to be unthinkable.
2) China.
China would like nothing more than to see Boeing saddled with high costs so they can gradually make their nascent airliners more attractive to third-tier airlines. What they might not be able to offer, say, Ethiopian, in tech and support, they can make up on price. A dozen planes here, a dozen there, and suddenly Boeing will wonder why no one wants their 1970 Chevy Nova and everyone wants a 1970 Honda Civic.
China’s aircraft industry has the backing of the government ans government plays the long game.
Yes, I saw this. I’m very curious about what happened.
Now, for some perspective, SpaceX launched their Starlink v1.5 birds 50 or more at a time, and now launch their v2.0-mini’s 20 or 21 at a time. So, 200 represents between 4 and 10 launches depending on what birds were lost. That might be a lot of launches for Europe, Russia, or China, but not for SpaceX. At their current cadence, that only represents between 2 and 4 weeks of launches.
There never was any doubt the 787 program would eventually all be in Charleston once Boeing bought the operation from the Italians.
Having the program depend on 4 747 Dreamlifters was nuts.
Moreover, Boeing figured by now the widebody 797 would be in production at Everett, replacing the 767 and along side a booming 777X line.
https://www.thestar.com/business/air-canada-buying-18-boeing-787-10-dreamliner-aircraft/article_1dce0e26-d788-5630-ac8e-33f4447bc87e.html
Air Canada buying 18 Boeing 787-10 Dreamliner aircraft
Air Canada buying 18 Boeing 787-10 aircraft
Nice to see the 787-10 getting some love…
A slew of recent orders !
AC cancels Boeing 777 freighters.
-> “The Port of Seattle and Seattle city and County governments wrangle with Boeing over the cost of cleaning up a Superfund site, a river that runs by Boeing Field and the company’s shuttered WWII aircraft plants.”
https://twitter.com/dominicgates/status/1706038225578721735
-> Summary GE/Safran/CFM court briefing confirms AOG Technics has falsified at least 86 documents linked to thousands of CFM56 and CF6 parts it sold. (One approval “tag” can cover multiple parts.) Broker must turn over purchase, sales records w/in 2 weeks.
https://twitter.com/AvWeekSean/status/1704595338164674910
-> The FAA has approved Boeing’s plan to retrofit 737NG nacelles. Deadline is July 31, 2028. Service bulletins must be out by the end of 2024, paving the way for work to start. If mandated globally, ~6000 aircraft could be affected, depending on retirements.
https://twitter.com/AvWeekSean/status/1704312480921489894
Wow unexpected!
-> The AirFranceKLM Group will place an order for 50 Airbus A350 family aircraft with purchase rights for 40 additional aircraft to accelerate the renewal of its long-haul fleet. https://bit.ly/3PS5TzB
https://twitter.com/AirFranceKLM/status/1706356493216366656
They’ve been talking about it for weeks..
What’s so surprising about that ?
What surprise? Was expecting this to go to the A350. Only the delusional diehard 787 fans on Anet thought the 787 was a lock. This leads to Fleet simplification and the A350 is a versatile aircraft. There will be either an add on order of A350s or a 787 order to replace the rest of the 777s.
Doesn’t anyone want to know the hometown discount AFKL got?
https://www.bloomberg.com/news/videos/2023-09-26/airbus-beats-boeing-in-air-france-widebody-order-video
Airbus was more aggressive on price and had better delivery times. Hometown discount.
This is going to make the group the largest A350 operator in the world.
“So overall, when you look at price and you look at availability, you look at the range capability and you put that in together, that’s what the mixture of all that is what drove us to selecting the A350 as as our choice.”
More A220 news:
JetBlue Seeks More Routes For A220 Fleet
https://aviationweek.com/special-topics/crossover-narrowbody-jets/jetblue-seeks-more-routes-a220-fleet
The aircraft is replacing Embraer 190s: “With a range of up to 3,350 nautical miles and a 40% lower fuel burn per seat than [our] E190 aircraft, the favorable economics open the door to new markets and routes that would have been unprofitable with our previous fleet,” a JetBlue spokesperson said.
“The A220 covers a wide mix of new and existing market possibilities with excellent economics on short, medium and even potentially transcontinental markets. This will allow for better overall aircraft utilization and provide a competitive advantage for JetBlue in short-haul markets.”