Leeham News and Analysis
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Leeham News and Analysis
- Boeing 3Q deliveries up despite strike October 8, 2024
- Strike slows Boeing’s march toward improving safety culture October 7, 2024
- Aerospace supply chain still ailing; Sustainable Aviation Fuel isn’t the answer to go green October 4, 2024
- Bjorn’s Corner: New engine development. Part 27. Long developments October 4, 2024
- Longshoreman strike adds to Airbus, Boeing woes October 1, 2024
Elliott takes 11% share in Southwest, demands leadership overhaul
By Judson Rollins
June 10, 2024, © Leeham News: Hedge fund Elliott Investment Management announced yesterday that it has a $1.9bn position in Southwest Airlines, comprising 11% of the company’s shares. It issued a letter to the airline’s board, calling for new directors, a new CEO, more executives from outside, and a comprehensive business review.
In its letter, Elliott wrote, “While Southwest has a proud history, that history is not an argument for supporting poor leadership and sticking with a strategy that no longer succeeds in the modern airline industry.”
Source: Elliott Investment Management.
The announcement came as Southwest’s stock price remains near its April 2020 value, and management faces growing questions about excessive costs and middling unit revenue.
Elliott included with its letter a 51-slide presentation laying out its case for overhauling Southwest. One slide features a 2014 quote from founder and former CEO Herb Kelleher: “If things change faster outside your company than they change inside your company, you’ve got something to worry about.”
LNA has written extensively about Southwest’s fleet, customer, revenue, and cost issues:
Ryanair, Southwest, United take biggest hit from FAA cap on 737 MAX production
Southwest could solve its MAX 7 woes … by buying Breeze?
Southwest, the “legacy LCC,” part 1: Not keeping up with industry standards crimps unit revenue
Southwest, the “legacy LCC,” part 2: Bloated labor expense, difficult fleet strategy result in uncompetitive cost structure
The LNA team is in contact with Elliott and expects to publish a deeper analysis after speaking with the fund’s investment team.
Ah – RIP Southwest Airlines once that hedge fund have their way.
I have not followed the stock of Southwest Airlines, but there’s no way it’s been as bad as Boeing. Just wondering why SW has activist investors driving change and Boeing has only passivist investors happy to ride the status quo to the bottom.
Taken over the past 3 years, the drop in stock price at LUV (ca. 50%) has exceded that at BA (ca. 25%)…
https://www.marketwatch.com/investing/stock/luv
https://www.marketwatch.com/investing/stock/ba
Try 5 years, starting in Feb 2019
I think the smart money knows it’s easier to turn LUV around, than it is BA.
My guess is BA is quite a bit bigger than LUV:
market cap (today)
LUV $17.8 b
BA $116.7 b
Elliott disclosed it has a $1.9 b stake in LUV.
Elliott: “… we are convinced that Southwest represents the most compelling airline turnaround opportunity in the last two decades.”
Mgmt response can be to postpone some capex like new aircraft and use the fund to buy back shares to appease the activist investor.
Putting all its money on an undeliverable (and controversy-plagued) Boeing model has been a large contributor to Southwest’s (recent) woes.
One wonders if the move by Elliott will precipitate some sort of fleet diversification. Forget the standard fleet commonality argument — being constricted by a paper-only fleet is worse.
Good point on fleet diversification……..maybe add A220 and A321XLR But can they find aircraft available? Since American and United are looking to encroach into Southwest routes, Southwest needs to expand into their markets
They can always put in orders, and hope that slot availability will improve with time if other airlines defer/cancel (e.g. due to a market downturn and/or glut).
All their MAX orders can be canceled without penalty at this stage…might as well face up to the possibility that they’re never going to be delivered.
Another good point about “never to be delivered” Its about time Sir TC of the Emirates come to same conclusion on the 777x He keeps blaming Boeing but he doesn’t do anything different. So let’s refurnish old 777s and A380s…..so let’s fast forward 5 years….still no 777x..so refurbishment round 2 or do something different today and order some A350-1000s (“stupid is as stupid does”)
At least TC has a foot in the door with his existing orders for 65 A350-900s…which he can (partially) upgrade to -1000s if/when he manages to get over his reticence regarding the RR XWB 97*. He can then cancel a huge portion of his 777X orders, without penalty.
In contrast, Southwest has no foot in any other door.
—
*Which is puzzling: he seems to have no reticence regarding the durability of the GE9X, despite a complete lack of real-world data for that engine.
@Abalone
Wild idea but if 777X gets cancelled could GE drop the GE9X on the the A350-1000?
@Casey, some customers would like engine option on A350-1000 but it would be a legal mountain to climb to make it happen. Maybe if Airbus made a stretch with a brand new wing A350-1200, still RR would fight to be single source.
Abalone clearly over states the case into outright wrong.
SW is getting jets delivered. Clearly at a lower rate than expected as are all MAX customers right now.
They are not getting the MAX-7 they want.
Clearly South West shot themselves in the foot with not diversifying the fleet. They could get Embraer E2 190/195 if nothing else. Certainly better economy wise than the MAX-7 which is heavy for the mission (shrunk -8)
All airlines will get deliveries, at some point they will ramp up to 38 and then 50. Not nearly as fast as Boeing assumed in Calhouns gross stupidity.
Longer term Boeing has issues. But they are not going under for the next 10 years. What its future looks like is not predicable.
Southwest is getting planes that it didn’t originally order (conversions through lack of other options).
Of the planes that it originally ordered, none are being delivered (still).
Customers like to receive the products that they order — nobody likes to have incomparable substitutions forced upon them at a later date.
Yea that is fair. More in service -8 than ordered.
Long term SW may have ordered more -8 but they clearly wanted the -7 and in numbers.
They had a window to split the fleet as well. Bad call on their part.
While the A220 has a lot of appeal, the E2 190 and more likely the 195 would have been a great option
You would have to parse the numbers of Pax and pitch to see what they could get though I believe SW is fairly dense packed and only one class of seating.
PSA: 195 E2 does not compete with A220-300 or the MAX 7 😭
@Pedro
The MAX7 is more related to the 737-800 than the -700 Southwest wanted to replace. E195-E2’s range is slightly less compared to a 737-700 but should be sufficient for the US without Alaska.
How many passengers you can squeeze in the E195 at LUV’s 32″ seat pitch??
140 at a guess.
They run E175s all over the place. Alaska is only 1500 air miles from Seattle.
Why do you need range in a point to point operation? Figure out what stop you need to throw in some fuel and good to go.
Perfect is the enemy of good enough.
Haha. Porter’s E195 has 132 seats (30″ to 36″ seat pitch). I check with their seat map (from Porter), WN can squeeze in 128 passengers at best (or 124 passengers). Why would anyone think this is a good substitute for the MAX 7??
Because you can fill it and its got very good economics.
It has a modern wing and engine. Its lighter as its a bespoke production not a compromise like the MAX -7 which is heavy as its a cut down -8
Do some planning for fuel load and you can operate a lot lighter.
And the landing fees are less.
Funny to have someone who is against the MAX argue for the -7!
What you need to do is run the route profiles and assess use vs non use based on that.
As it can do pretty close to Trans Con range, the only mission it could not do would be NY to LA.
Is SW planning on doing that route with a -7?
Yup flying like five-sixth paying customers with the same crew cost is a winning formula. I don’t realize you moonlight as a comedian here at LNA. After reading your posts, WN’s (and other LCC) C-suite must be beating their chests why they didn’t order the magical E195-E2. 🙂
A321XLR ?
Thats fantasy talk for an airline that doesnt need a transatlantic capability- not having those routes
They dont even have a need for a 200 seater Boeing on its US only routes – plus a few south of the border to resorts
The whining about an aircraft shortage is total BS based on Slide 36 in the Elliott presentation. I strongly suggest you read the presentation at strongersouthwest.com. Southwest has plenty of aircraft, but for some inexplicable reason they have chosen to not abandon lousy routes and redeploy the aircraft to more profitable routes. A full 12% of Southwest’s routes have a load factor below 70%, vs. 3% at American and 1% at United and Delta. My bet is even if they cut half of these low load factor routes and redeployed the aircraft, it would generate significant extra RASM. I really hope some analysts grill Southwest management on the next conference call as to why they are clinging to lousey money bleeding routes while whining about lack of aircraft? As a Southwest shareholder I fully support Elliott’s attempt to fix the airline.
“Southwest Airlines said Tuesday that it will have to trim its capacity plans and reevaluate its financial forecasts for the year, citing delivery delays from Boeing, its sole supplier of airplanes”
Old aircraft cost a *lot* of money when kept longer than originally planned, because:
– They require extended leases; or
– They require expensive maintenance (D checks, or extra C checks); and/or
– They require interior refurbishment, to keep them up to a level expected by customers on the basis of what competitors are offering.
https://www.cnbc.com/2024/03/12/southwest-airlines-reevaluating-2024-guidance-because-of-boeing-problems-shares-sink.html
Good laugh as the competitors are selling leg room, upgrades, luggage fees and I won’t know what else.
So yea, older airplanes cost but so do new airplanes and no airplanes?
It ain’t the airplane its the stuck in the mud we are not going to change because we are SW and it must be perfect because we did it first.
Your cost structure is now the same as a so called Sr or full service airline and you think you can do what you did before why?
The world keeps moving and you need to move with it or get left on the scrap heap of history. And better you see the issues coming and do something about them.
Your point about cancelling a huge portion of his 777x orders without penalty From a 50,000 ft view, Sir TC would do Emirates, Boeing (777x program) and industry (focus on the next generation single aisle replacements) to cancel his 777x aircraft
On the subject of cancellations…what about the related subject of conversions?
Southwest has already been forced to convert many of its MAX-7 orders to MAX-8s. Seeing as Southwest is essentially the only customer for the MAX-7, I can imagine that Boeing would be *thrilled* if all remaining MAX-7 orders were converted to MAX-8s…even at the same price! That way, at least, the company could stop pretending that the -7 is ever going to be certified…
Another wild and odd jump of illogical.
South West will get their -8s at -7 prices ( better) if that is what occurs.
Or they can take -8s now and more -7s when it gets certified (sadly plenty of lead time)
The bigger question is South West diversifying and getting better aircraft for the -7 mission.
That of course means loss of commonality but the option is there and Embraer would be happy to sell them E2s. So you loose on one area but more efficient aircraft day in day out for the mission.
“Embraer’s E2 backlog sits at 194 units, divided between 179 E195-E2s and 15 E190-E2s” (April 2024)
“American Airlines’ new order for the E175 accounts for more than half the firm order backlog for the type. Together with AA, Republic Airlines (YX), Skywest (OO) and Horizon Air (QX) represent the bulk of the E175s backlog, totalling 176 out of 187 units to be delivered to the US”
https://www.airwaysmag.com/new-post/embraer-order-backlog
I can’t see why Southwest would move to 20 plus year old airframe that’s been upgraded with a small backlog
Time to go big or go home. Airbus products in fleet strategy
David P:
Sometimes reality rears its ugly head and an upgraded aircraft (aka MAX) is better than long lead delivery times and swap over.
Depending on the route, an E2 195 could well be more economical than an A220-300.
But top call a E series dated? That is pretty odd
New wings (each version has its own wing which makes up for not having a composite wing that fits all the A220) , FBW, new engines and you keep the tube that adds nothing?
You should note that BBD did not do anything other than a standard aluminum fuselage.
“Or they can take -8s now”
Srsly?? How many 737 MAX BA delivered last month? They are falling further and further behind their schedule. Earlier this year, BA promised to deliver 79 MAX to WN, the latest est. sits at 20 right now. 🙄
Isn’t time to face the reality’s ugly head?? 😂
They had a great opportunity to buy A220 -300 and scorned the aircraft. I thought at the time are you sure? As an outsider it seems a giant error.
Not as big of error as Boeing not buying it…
SamW:
Airbus is having a tough time with the A220 despite getting it for nothing.
Nothing is not cheap. Huge amounts invested to fix the production and attempting to fix the contracts that BBD wrote.
Now throw in Calhoun and the chaos he has caused at Boeing.
The program would go down the drain. Boeing could not handle it and Airbus can.
Possibly… But on the other side of the coin, Boeing would maybe been more compelled to take the Plane and make it a replacement for the MAX. The MAX was grounded for two years. Boeing could have devoted their great resources to the -500/-700, and possibly had great success. But, I agree this is speculation…
Southwest needs the additional range of the MAX 7 compared to the MAX 8 and for this the MAX 7 can start from shorter Runways. Also, the fees should be slightly cheaper.
All things Southwest needs according to their concept.
A switch to MAX 8 is therefore associated with route problems. Only an A223LR version helps.
tristan:
You have to get deep into routes to see if its SW Spin or not, but an E2-195 would work as it has trans-con range. Not by a lot but I don’t see the -7 as being a Trans Con either. Smaller markets jump to jump with shorter distances.
I am puzzled as to why this has jumped to the 777X. South West Airlines has no 777X on order.
topic…hanging on to orders that will not be fulfilled and not taking action to correct the problem
No, the topic is South West, a buy in by a Hedge fund.
Its all purely South West Airlines focus.
are you the “official” monitor of this discussion group? So let’s go off topic again………what will Boeing replace the current 737 model with?
Mainstream thoughts…all composite single aisle? But looking at weight and costs for single aisle aircraft production doesn’t make sense (e.g. C Series composite wing is still not cost effective)
The cost of some type of composite wing (autoclave or not) the capital equipment/space needed for 75 a month rate would be in the tens of billions
The cost and weight of composite fuselage …..you can’t descale composite thickness (hence not reduce weight) As a note, the same size 767 and 787, the 767 weights less.
My guess…Boeing already has “decided” on a metallic wing for the 737 replacement…..that’s why they are currently investing over $100 million for new wing riveters at Renton to replace the vintage 1960 WRS (which they still could maintain/operate for another 10 years)
The topic is what effect the hedge fund can have on the Southwest business model…and that includes the question of fleet renewal/diversification.
@ DP
You might be interested to know that I’ve read *two* articles in the past week in which it was suggested that the A330neo might be a next choice for customers who are frustrated by lack of NB slots. Not for everyone, of course, but not unworkable on high-demand routes. Already being done in Asia.
David P:
No I am no monitor.
Annoying to see a topic spiral into something else that has both had discussion on it and will again.
Feel free to post about life on Mars or whatever.
Some people seem to think going off topic is great stuff, I do not, of which I can express my opinion.
I wonder who’s the one that often went off topic onto China, SCS uncontrollably? 😁
Do they have an Embraer order? Someone seemed to have no problem bringing them up…
Frank P:
Trying to take a cheap shot and making yourself look foolish.
So why not question those on the A220 wagon?
The discussion is about South West and why they are being raided.
Their current fleet is part of the discussion and most relevant to this forum as it is about aviation.
Clearly SW business practices have a major bearing and the attempted outing of SW uppers is part of that (as rotten as Elliotts goals may be, it does not mean its not true in the data)
So part of fixing SW has relevancy in the E2 with the MAX -7 delay and on hold on PART of the fix for SW. E2 and A220 are clearly options for that part of the issue.
People jump on the A220 and no disagreement its a better than -7 bird overall. But is it needed for SW and can an E2 substitute in for the maybe never to be -7?
Its not the only aircraft and a smart organization looks at its options
You should be aware of Mentour Pilot and his presentation on a possible merger with Breeze. While a lot of it has to do with the A220 options they have , Breeze runs E 190/195
Porter Airlines has gone with E2 195 and they route all over US from Candada.
SW can do a bit of seat pitch change and get the -7 number is those are magic of some kind. Keeping in mind the -7 was supposed to be a specific build originally not just a shorter -8 it is now.
SW has compromised on that point.
Its more than fair to ask what else may be on the table (or should be). All options should be. Then its what you can get when and how that works into the network and the needs.
El Al Will Buy 30 Boeing 737 MAXs
“Fleet commonality. Israel operates an all-Boeing fleet today, including 737s. Introducing Airbus narrowbodies would have added complexity and cost.”
https://viewfromthewing.com/el-al-will-buy-30-boeing-737-maxs/
another one that just drinks the Boeing Kool aid for all Boeing fleet strategy
So, you don’t think El Al reads the reports and knows what is going on?
Regardless of you approving or not, they made an informed decision. They know all the issues and uncertainty.
There has been a huge morph that the MAX is a crap aircraft. Boeing build process is the issue, not the aircraft nor its mfg certification. What is being delivered is being cleaned up (and no I don’t pretend to believe that all Boeing issues are anywhere close to being corrected – that will take years)
Basically what people that jump on that bandwagon are saying is the airline people are stupid. None of us is running an airline by the way.
No wool is being pulled over anyone’s eyes. They made the decision in what they feel is their interests balancing out the factors.
“No wool is being pulled over anyone’s eyes” (just need another set of new CEO eyes) So its in Southwest “best” interest to just keep the 737 aircraft as their only model in the fleet?
David P:
SW made their decision with the information they had. That was years back now.
El All made their decision knowing what the status is.
SW may not have regrets but they also have other issues.
Comparing two era of info is an attempt to skew reality (facts) that are not the same.
@ DP
Politics at work here.
Orders in return for US defense support.
Airbus is out of the question…even more so in view of the stance of various EU countries regarding “a certain matter”.
This was always going to be a Boeing order.
yes on geopolitics…
And France, Germany and the UK buying A330MRT is not?
Not even a pretend open bid process
Pull the other one
Yet, you do not have a problem when EasyJet does it?
Explain to us what you think that Easyjet is “doing”…
Israel get huge “credit notes” to buy American every year from Uncle Sam, so they are more like a fully funded part of US DoD.
I don’t believe that El Al has any involvement in FMS
They may do it to assist an important relationship as Europe does not support them (and I am not saying one way or the other which is right)
Anyone think they would do different?
Everyone is focusing on the 737Max, but LUV gets its aircraft at rock-bottom prices (late though they may be). If you are trying to unpack where LUV is going wrong, start with labor costs that are no longer industry competitive.
Also bear in mind (been a while), but LUV’s strategy of fuel hedging played out a long time ago. They no longer have that baked in advantage. And LUV is also the only airline that does not charge for luggage. That is not an insignificant income stream either.
Although Ryanair says that it based its model on Southwest, there’s one important difference: secondary airports are the backbone of Ryanair’s network.
If Ryanair were in the US, it would be serving airports like Fresno (CA), Saint George (UT) and Flagstaff (AZ) with regular services at low prices; as it is, such airports have very sub-standard connections, and no (or very little) LCC business. Maybe LUV could take a page from that playbook?
@Abslone
Now you are describing Breeze and Avelo operations.
And, from what I’ve heard, Breeze is doing just fine. Then again, Breeze isn’t relying on BA, is it?
Avelo is relying on Boeing 737-700/800.
They are almost like two different airlines flying a west coast and east coast circuit…but flying out of airports that have low commercial usage otherwise (New Haven is now a major hub)
Ryanair Holding is the parent company for Lauda Europa with 27 A320-200 leased until 2028.
Read the Elliott Presentation, slide 36! For some inexplicable reason Southwest is clinging to low load factor routes that their competitors don’t. A full 12% of Southwest’s routes have a load factor below 70%, vs. 3% at American and 1% at United and Delta.
https://www.southwestairlinesinvestorrelations.com/~/media/Files/S/Southwest-IR/2023-annual-report.pdf
Southwest flew 14.7% more seat miles year-over-year.
load factor fell from 83% to 80%
12.2% increase in employee expense.
The load factor issue might have something to do with the fact that LUV is being forced to accept (larger) 737-8s instead of the (smaller) 737-7s that it ordered.
It’s easier to fill a smaller plane.
Like a A220?
That’s certainly the case…though it’s not what I meant above (as regards -8 versus -7).
Ryanair would have done well to order a batch of A220s years ago: O’Leary has lots of potential routes that have loyal usage…though not at a level sufficient to fill his 737-8s.
What I find shocking is that as an airline, you can’t be profitable at 80% LF.
@Frank
Riddle me this…if LUV is at 80% LF then why do they care about missed deliveries?
@Casey
WN has a cost structure built to fly more aircraft than they have, i.e. the crew, ground workers etc, all trained and ready to go but new aircraft delivery this year has fallen sharply from 79 to 20 (the latest est.) So staff are asked to take leave and halted hiring since March.
How does Q1 LF compared with last year? The remainder of the year is when there’s higher demand and airlines make most of their profits.
SW retires about 40 planes per year, especially the 737-700, many of those werent originally to SW and were bought secondhand
Nett extra planes isnt so much as 79
https://x.com/Brad_Setser/status/1800291807194185776
The estimate in that link is very rosy indeed: Mr. Epstein seems to believe that BA will soon be able to function in a somewhat nominal manner — very wishful thinking!
Besides: BA doesn’t have the money for such adventures.
“Boeing woes weigh on credit rating as spectre of junk status looms”
“Investors noted that Boeing’s bonds are already trading between the bottom of the investment-grade world and the top of the high-yield ladder, in a sign of its challenges to date and the changes made to its credit rating.”
https://www.irishtimes.com/business/2024/06/10/boeing-woes-weigh-on-credit-rating-as-spectre-of-junk-status-looms/
So, unless Uncle Sugar comes forth with a big bag of money, I think we can forget the notion of any new programs.
It’s about softening the ground for a soft landing or government “assistance”, one way or another.
BA’s mgmt has successfully levered up BA, making itself unappetizing for activist investors.
From your article:
‘“A balance sheet that size would have a lot of challenges financing itself in the high-yield market”, making it “a really difficult transition to high-yield”, said one asset manager who holds Boeing bonds. […]
Investors noted that Boeing’s bonds are already trading between the bottom of the investment-grade world and the top of the high-yield ladder, in a sign of its challenges to date and the changes made to its credit rating. Among Boeing’s larger and more liquid bonds, one issued in 2020 and maturing in 2050 currently yields roughly 6.5 per cent. Another maturing in 2030 yields just under 6 per cent, while a bond maturing in 2025 yields just over 6 per cent.
Six years ago, before the first 737 Max crash off the coast of Indonesia in October 2018, Boeing was rated “A” or “A2″– four notches above junk – by all three ratings agencies.
“activist investor” == shareholder value vulture.
kiss whatever it was that made LUV flyers insanely loyal goodbye.
welcome to the race to the bottom LUV.
So fleet commonality with Airbus is good.
Fleet commonality with Boeing is bad.
The hypocrisy is deafening.
The religious fervor to have SWA operate Airbus aircraft is laughable. Please forgive me for interrupting the services, please resume.
SWA biggest problem is the same one they have been criticized for the last two decades. Its technology platform is ancient and should have been updated decades ago. Do a search over on Anet, there was a good thread on why SWA is married to its ancient software. To debut a new system will mean a rethink in operations, scheduling and reservations. But it must be done, it should have been done.
As regards the Elliot Group, if he does not have the unions on his side, it’s a moot point but he will make noise and maybe get a few board seats.
JP Morgan should do better research and see which major did not file for BK after 9/11. Evolving the least?
“Fleet commonality with Boeing is bad.”
Yes, it is — when you’re not receiving the BA planes that you ordered.
Better a competitor’s plane than no plane.
BA is bad, bad in execution, bad in empty promises. Promised to deliver the MAX 7 to WN in 2021! Will be five years late, or more.
Mar 2024 Bloomberg:
“Southwest said it doesn’t expect to receive any of its long-awaited 737 Max 7 aircraft this year, and that deliveries of other Boeing models will come in at just 46 units, down from the 79 previously anticipated.”
Apr 2024 Bloomberg:
“Southwest Airlines Co. is slowing growth, ending service at four airports and offering voluntary leaves to address *“significant challenges” stemming in part from reduced deliveries* of Boeing Co. planes. Southwest is now set to get 20 Boeing 737 Max 8 planes in 2024, down from 46 previously…”
You forgot to mention “bad in certification”.
2026? Sounds optimistic to me.
Meanwhile, the debt pit keeps getting deeper…so, in what form will BA still exist (if at all) in 2026?
😂
Ending service at 4 airports , which were minor and maybe newish destinations that clearly didnt meet traffic forecasts.
Bellingham WA just before the Canadian border , Im looking at you.
I would say Southwest drops destinations all the time , and a slowing economy even more
Funny. Other carriers seem to be able to make significant profits during a ‘slowing’ economy.
Williams:
You hit the nail on the head.
Of course people ignore the fatal crashes that Airbus has incurred with its fool proof computer only FBW system.
They should have been grounded a number of times and if you actually watch how some of those systems work its mind boggling.
A log of it is not instinctive, its just someones idea of what should be done, they clearly did not get an average group of pilots together to critique it.
Its why the 737 and the A320 have a close spot equally crash record. Sometimes pilots get in trouble with the Airbus system and sometimes its with the Boeing system.
And its an ugly truth, the two MAX crashes do not change the overall data. Horribly tragic for the people who died and their families, friends, loved ones.
The horror that was MCAS 1.0 needed to be stopped and was. But one bit of software in an aircraft that works fine?
And Airbus is all software and people have paid a price for some of that bodged software as well.
And yes AHJs gave them years to fix some of it when it should have been ASAP.
“Boeing Gets No Orders for the 737 Max for the Second Straight Month”
“Boeing received orders for only four new planes in May — and for the second straight month, none for its best-selling 737 Max, as fallout continues from the blowout of a side panel on a Max during a flight in January.
“The results released Tuesday compared unfavorably with Europe’s Airbus, which reported orders for 27 new planes in May.
“Boeing also saw Aerolineas Argentinas cancel an order for a single Max jet, bringing its net sales for the month to three.
“The dismal results followed poor figures for April, when Boeing reported seven sales — none of them for the Max.”
https://www.designdevelopmenttoday.com/industries/aerospace/news/22912278/boeing-gets-no-orders-for-the-737-max-for-the-second-straight-month
***
Zero MAX orders, two months in a row.
Gosh, I wonder why?
Maybe LUV has an opinion on this 🤔
———
Deliveries were also poor:
“(Bloomberg) — Boeing Co. delivered 24 commercial jets in May, including 19 of its 737 family aircraft, as parts shortages and fresh scrutiny by China’s regulators complicated efforts to recover from a crisis engulfing its most popular aircraft.
“While rival Airbus SE handed over 53 aircraft last month, the US planemaker matched its total for April, the lowest monthly tally in more than two years. Boeing also recorded four gross jet orders against one cancellation for the month.”
https://www.bloomberg.com/news/articles/2024-06-11/boeing-delivers-24-jets-in-may-as-china-compounds-737-max-woes
Boeing’s board of directors can’t wait to the end of the year to replace Calhoun….the votes are coming in from the airline carriers…essentially no orders
It will be very interesting to see if there’s much/any order activity for BCA at Farnborough.
Although various airlines have said that they’re shopping, I suspect that BCA will be getting more window shopping than actual orders…
Its worth noting that keeping Calhoun on to sign a new contract will then have him gone giving the next CEO space.
Interesting thought. If so Boeing will sign as soon as they can so they can dump Calhoun.
Of course the next CEO still has to have a commitment to Boeing and that may or may not be true. Calhoun has weird support and clearly a faction of shareholders that are out of their minds.
Interesting that people are bringing up Ryanair and Michael O Leary.Rocket profits and share price have earned him a $108 million bonus.Everything seems to be fine so far,although he is visibly starting to sweat a little bit about the MAX situation.
Ryanair is doing well…but it could be doing even better.
It’s cutting routes/frequencies (due to delayed deliveries)…while its competitors are adding new ones (with their shiny new A321neos).
Wizzair has even announced that it may use its A321XLRs for direct Europe-India flights.
https://simpleflying.com/wizz-air-airbus-a321xlr-nonstop-flights-europe-india/
Ryanair is slowly missing the bus…
Ryanair is a airline colossus compared to tiny Wizz.
of course they are adjusting routes all the time. The recession conditions are probably a greater effect than possible new Boeing deliveries.
Many forget Ryanair is a frequent seller of its planes after 6-7 years – at a profit.
The new orders also upscale its planes from the 737-800 type , keeping them in service for weaker demand is a good thing for the bottom line and
avoids higher interest costs on new larger capacity purchases
“The new orders also upscale its planes from the 737-800 type , keeping them in service for weaker demand is a good thing for the bottom line and
avoids higher interest costs on new larger capacity purchases”
If that’s true, why doesn’t Ryanair stop taking aircraft delivery for a year or two and see what happens? No doubt MOL knows better. 😉
https://www.planespotters.net/airline/Ryanair
Well, they’ve hung onto their -800’s, 205 of them, with an average age of 14.7 years. 99 Max’s at 1.8 years old.
Total fleet average of 10.5 years old
One could the same about EasyJet, the one that flies shiny A321s.
Related — another LCC suffering from its bet on the wrong horse:
“Allegiant slashes 19 routes due to Boeing delivery delays”
“Allegiant expected to receive six Boeing 737 MAX aircraft before July, but it now expects them later this year (at the earliest). Because of these delays, Allegiant has “incurred significant expenses,” president Greg Anderson said on the company’s most recent earnings call. These costs include pilot training for aircraft that aren’t yet in the fleet, as well as “loss of pilot productivity awaiting delivery of the 737 MAX aircraft.”
“Another cost associated with the delivery delays is this big network downsizing. In fact, with these cuts, Allegiant is projected to fly nearly 10% fewer flights in November 2024 compared to the previous year, Cirium data shows.
“”Reduced Boeing delivery expectations will impact our anticipated fourth quarter capacity and in turn our full-year guidance,” Drew Wells, Allegiant’s chief revenue officer, said in May.”
https://thepointsguy.com/news/allegiant-boeing-delays-cuts-19-routes/
Looks like the cheap candy thrown around after re-cert…is turning out to have a very sour aftertaste.
Click bait headline. The real cause is falling revenue and stronger competition for value passengers across the board not just from LCC
If anything they couldnt have the cash flow to pay the higher interest rates for any new deliveries.
Management deboarding their own culpability onto ‘other reasons’
SWA seems to have let costs climb and not invested in modern systems, hence they have got FAA remarks for some planes maintenance records. So they got a bit fat and happy as time passed by in the old system. Now it is time to modernize and be more productive, but that is an investment and if doing it right, the payoff will come in a few years time.
All caused by Boeing? Not sure…
In this article:
https://leehamnews.com/2024/05/20/southwest-the-legacy-lcc-part-2-bloated-labor-expense-difficult-fleet-outlook-put-unit-cost-well-above-other-lccs/
Leeham has a table with the 2023 financial results. Jetblue, Frontier & Spirit all have negative results, along with a .8% operating margin for SWA.
Alaska – an all BA fleet, seems to have no problems with their older 737’s as they posted an 11.2% margin.
The Big 3 all have positive margins and all have Boeing Max’s on order.
Does having to fly older aircraft for a longer period of time mess with your fleet strategy and cost you more? Sure.
But a well run airline can handle the ups & downs and perhaps it’s just time to accept that SWA is no longer a well run airline, like it used to be.
“The Big 3 all have positive margins and all have Boeing Max’s on order.”
For each carrier, what’s the number of late MAX deliveries, expressed as a percentage of the total NB fleet for that carrier?
Then, calculate the same number for Southwest…which has a total fleet size of 821, has 691 MAXs on order…with only 204 of them delivered.
That’s a lot of math, but your point in the big 3 is well taken.
How about:
https://en.wikipedia.org/wiki/Alaska_Airlines_fleet
133 Max’s to be delivered, into a fleet of 324
Yes, I had already seen the MAX data for Alaska. However, how many of those MAXs are currently *late* (as opposed to just undelivered)?
A huge portion of Southwest’s undelivered MAX orderbook is *late*…which, as discussed above, causes major financial, staffing, and maintenance issues.
I’m not asking you to sift through the data and do accurate math…but you get the gist here: Southwest is hit particularly badly by Boeing delivery delays. That having been said, you’re correct in pointing out that Southwest is a badly run airline, which convolutes the discussion.
It’s a combination of many things, isn’t it? Kinda like Boeing, a lot of fires to put out.
How much weight you would put to each issue, is a good conversation. There’s not a whole bunch SWA can do with the Boeing problem – it’s pretty much out of their hands. The Max 7 will get certified when it does. Production kinks will get sorted when they do. The FAA mess with oversight will eventually be fixed (I think). Supply chain has nothing to do with them.
They missed the boat in 2019, when the Max was grounded, to order the A220 and diversify the fleet. They’d have some in the fleet working today and probably would have gotten a good price from Airbus.
They also dropped the ball on investing in infrastructure and paid the price.
A really good question would be about load factor;
Why? Are customers not happy with them?
@All
WN also is still somewhat of an airline that targets leisure travelers which is never going to generate the same kind of revenue as the traditional operators. Literally got an email advertirsing 50% off base rates during the back end of the year…not a good sign.
@ Casey
Ryanair also targets leisure travelers, and it has surpassed all the traditional operators in Europe.
Nothing wrong with targeting leisure travelers — but you then have to keep fares low, and you do that by keeping costs low. Southwest can start by improving its turnaround time (use two doors for boarding/de-planing) and introducing basic fares (with surcharges for all add-ons), for example. Not sure what the situation is where you live, but passengers on shorthaul flights in Europe now predominantly rely on carry-ons — not to save money, but to save time and hassle…so what’s the point in giving them a “free” checkin baggage allowance at a higher fare level?
Southwest could also consider moving away from the big airports and toward smaller ones: for example, 4 million people visit the Grand Canyon per year…but the service to the nearest “normal” airport (Flagstaff, AZ) is almost zero. Ryanair would fly into Flagstaff, and make alot of money doing so.
You guys are missing the point that SW could pick up the E2 195.
Embraer is not swamped though it has some backlog.
Clearly the A220 is the premier option, but long lead times.
A svelte E2 195 is better than a Fat Max -7.
Perfect is the enemy of good enough.
All the situation in regards to the aircraft for SW does is reveal the management is stuck in the past. They continue to think their model works when its does not for a variety of reasons.
One part is they are now a “mature” airline with higher costs that they did not have lo many years ago.
If it ain’t working, fix it.
Wow. WN “could” pick up the E2 195 but didn’t. Why? Why WN wants to downsize its aircraft? WN is forced to take the MAX 8 when they really need the MAX 7. The issue is WN bet the farm and chose the MAX 7 & 8, not aware BA under Calhoun was in such a bad shape!
How many major airlines pick the E2 195 to replace their 737 NG?
OMG 😲 !!
This will be very interesting to watch unfold. If I were betting on this, I would think they start charging for baggage, slowly add class seats, add pre-boarding seat assignments and possibly a few other options.
I’d think they’d try to continue sole sourcing their planes from Boeing.
But if they truly wish to stay in business, they should run from that after-thought of a airplane – the 737MAX-7 – and replace it with some of the above suggestions.
Sam W:
You hit the nail on the head. Other LCC (or ULCC) have copied SW and then added their own revenue twists over time.
SW has not followed. So yea, they are missing revenue and sticking to their old operation type.
Its not working for them and the MAX delays are not the prime cause.
A fat Heavy MAX -7 is not going to turn that around.
It’s so interesting watching these CEOs be it Boeing, SW or wherever. They get paid 10s of millions of dollars and they are scared $_&+ less to mess with The Brand. It has taken an act of God at SW to even think about doing things differently. Boeing’s leadership couldn’t – wouldn’t replace a airframe designed in the ’50s. That was quite a fake job by the out going Boeing CEO in front of the Senate Committee yesterday. All he could think about was his $34,000,000. He didn’t even have to act contrite. He threw that in for free.
Cebu Pacific (Asia’s first LCC) looks to be heading toward a 150+ order from Airbus:
“(Bloomberg) — Airbus SE is closing in on a large single-aisle jet order from Cebu Pacific Air, with the carrier planning to sign up for as many as 150 A320neo aircraft that would more than double the Asian airline’s fleet size.
“A deal would include about 50 optional purchases, according to people familiar with the negotiations. Philippines-based Cebu and Airbus may announce the accord at the Farnborough Air Show later next month, said one of the people, who asked not to be identified because the discussions are confidential.”
“Boeing had been looking to win over a loyal Airbus customer as it seeks to expand the customer base for its 737 Max jet in Southeast Asia. Cebu Pacific, the largest airline in the Philippines, has a fleet of about 85 Airbus and some smaller ATR turboprop aircraft, and an existing order book of more than 30 planes from the European manufacturer
“In leaning toward Airbus, Cebu Pacific appears to have kept its faith with the European planemaker despite delivery delays. The budget carrier is managing problems with Pratt & Whitney engines on some grounded jets in its fleet, forcing it to bring in additional leased planes to backfill the shortfall.”
https://www.bloomberg.com/news/articles/2024-06-12/cebu-pacific-set-to-favor-airbus-in-deal-for-as-many-as-150-jets
Looks like the (supposed) lack of slots at Airbus is not spawning much interest in ordering from BA…
Airbus is overbooked (as is Boeing but not nearly as much)
So, they know aircraft are going to be dropped, shifted delivery or slots sold.
Airlines may over order to have slots to sell.
Airbus will reserve its efforts for bigger fleets to get the most bang for the buck.
How much that costs is anyone’s guess as they are not going to publish that.
Looks like we can expect low delivery rates from BCA for quite some time…which is bad news for Southwest:
“FAA to maintain increased in-person oversight of Boeing for ‘foreseeable future'”
“FAA Administrator Mike Whitaker will tell senators the agency’s decision to boost inspections after the Jan. 5 Alaska Airlines Boeing 737 MAX 9 in-flight emergency is now permanent, according to a copy of his written testimony seen by Reuters. Whitaker will say the FAA has added “additional inspections at critical points of the production process.”
“Whitaker will also say that, following lessons from the Jan. 5 incident, “the FAA changed its oversight approach and those changes are permanent. We have now supplemented our audits with more active, in-person oversight — the ‘audit plus inspection’ approach.””
https://www.investing.com/news/stock-market-news/faa-to-maintain-increased-inperson-oversight-of-boeing-for-foreseeable-future-3481916
*** Another incident with a MAX in the US ***
“Southwest Airlines 737 MAX Suffers Dutch Roll at 32,000 Feet”
“In the case of WN746, this was caused due to a damaged Power Control Unit (PCU), which weakened the directional stability of the aircraft.
“The PCU controls the vertical rudder of the aircraft, which would ultimately explain why the Dutch Roll happened in the first time.”
“Following the incident, the aircraft was grounded until June 6, just last week.
“Rather than re-entering commercial service, the Southwest Airlines 737 MAX headed to the Boeing facility in Everett from Oakland.”
“The issue must be of significant concern if the aircraft has been sent to the Everett factory.
“Furthermore, it will also be interesting to see whether Boeing will provide a statement on this accident.”
https://aviationsourcenews.com/incident/southwest-airlines-737-max-suffers-dutch-roll-at-32000-feet/
—–
“Most scrutinized plane in history”
I guess the MAX order drought will be continuing for a while…
FAA investigating Boeing 737 ‘Dutch roll’ incident, ‘substantial’ damage
Authorities said the damage to the jet is “substantial.”
The Aviation Herald, which was first to report of the Dutch roll, said the affected 737 has been “ferried” to Boeing’s plant in Everett, Wash., for repairs
https://globalnews.ca/news/10566655/boeing-dutch-roll-southwest-airlines-737-investigation/
Two ribs are damaged! What happened??
Yes, substantial damage…impressive.
Must have been harrowing for those on board.
I sense more passenger lawsuits coming.
Judson did a good job with an analysis of the Elliott plan in another article and it struck me:
You compare SWA and Ryanair, who squeezes in pax like sardines and who nickel & dimes customers for everything:
Month Passengers Load Factor
May 2024 18.9m 95%
Apr 2024 17.3m 92%
Mar 2024 13.6m 93%
Feb 2024 11.1m 92%
Jan 2024 12.2m 89%
Dec 2023 12.5m 91%
Nov 2023 11.7m 92%
Oct 2023 17.1m 93%
Sep 2023 17.4m 94%
Aug 2023 18.9m 96%
July 2023 18.7m 96%
June 2023 17.4m 95%
May 2023 17.0m 94%
Apr 2023 16.0m 94%
Mar 2023 12.6m 93%
Feb 2023 10.6m 92%
Jan 2023 11.8m 91%
https://corporate.ryanair.com/facts-figures/key-stats/
89% is a bad LF month for them, while SWA falls to 80%, with more comfortable service AND 2 free checked bags.
————————————–
As a comparable, both fly the 737-800. SWA puts in 175 pax while Ryanair has 189 – 14 more available seats to generate revenue.
Ryanair flew in 2023 with an ~average LF of over 93%.
SWA had an average of 140 pax flying (80% of 175 seats) in their -800s.
Ryanair had an average of 175 pax flying (93% of 189 seats) in their -800s.
We haven’t even compared the cost side of things….
Your point being?
That Southwest needs to tweak its model to be more like Ryanair?
The idea of including 2x free checked bags is archaic…Southwest definitely needs to scrap that.
Also important in this discussion: turnaround time. Ryanair turns a plane around in 25-30 minutes. So does Wizz. Do does Air Asia. I bet that figure is closer to 90 minutes over at Southwest…which is probably still using jetways instead of stairs…?
P.s. With slimline seats, Ryanair doesn’t feel cramped at all. However, frames with regular seats feel very cramped. Not sure how many of the latter are left in the fleet.
More like Ryanair? Maybe.
The first question I would want answered, is why the LF is so low? Even by SWA standards…
There’s perhaps another angle to this story;
The C-Suite at SWA considers itself to be one of the Big 4 of airlines in the US. When airlines are mentioned in the states, it’s American, United, Delta & SWA.
Changing their model to mimic the other LCC’s/ULCC’s puts them in a class with those ‘other’ guys. Not just the 2 checked bags but routes, jetways, sardine seating et al.
I think they like being grouped with the legacy carriers and want to stay away from comparisons with Ryanair.
Ryanair has cattle call…we have Guests.
Note:
On the jetway thing – can that work in the US? Are airports just too jetway centric? IIRC the Ryanair aircraft have their own stairs, yes? Not so on the SWA fleet. Do any of the LCC’s/ULCC in the US use outside boarding?
Would SWA fear that they would shrink their LF even more, if they went that route?
I know the puddle jumpers load outside, even the Embraers. I can’t recall ever seeing outside boarding from a full size NB in a US airport, even the small ones. And I’ve flown out of places like Burlington, Vermont.
People do like their creature comforts…
On jetways: you’re right…they seem to be the norm in the US. That’s a pity, because boarding/de-planing then occurs via just the front door (on narrowbodies), which slows things down.
Ryanair 737s have an in-built front stairs only; for the rear door, push-up trolley stairs are used. Wizzair’s Airbus aircraft don’t have in-built stairs, so they use 2x push-up trolley stairs.
A bit more on the jetway thing;
The US has (especially during winter) a more diverse weather system.
Someone flies from the aforementioned Burlington, Vt to Fort Lauderdale, FL in Jan. It could be minus 25 in BTV and many people who make that trip leave the winter coats and boots in the car. You get into the terminal and you’re warm until you return back from FLL.
Loading and getting off outside in FLL isn’t a problem, but I’ll fly the carrier with jetway loading in BTV, every time.
As far as flying regional, like a Dash 8 or RJ, in winter – you always dress for the cold. You’re loading in the cold, your destination is cold, you dress warm.
You don’t drag your winter gear with you, down south.
@ Frank P
I don’t buy the climate difference argument.
There’s lots of North-South air traffic in Europe in winter, from freezing Scandinavia (-20C) to balmy Las Palmas (+20C). The Scandinavians wear winter clothes when they get on the plane, and they just take off their jackets when on board.
I suspect that the real reason for the jetway thing in the US may be an American aversion to using stairs…
Of course its got nothing to do with efficiency!
Or the ability to allow handi caped people to make trips.
Nope, its those dag gumb mericans again.
Granted we had to set the example for Europe to clean its air up.
If you thought LA was bad in the 70s, phew, seen pictures of Vienna (well a brown clo0ud)
Of course we should not bring up the Feeding of the Bear over there. Be downright UN-neighborlay even.
And yea, Frank-P is right, we take people to the airport, send em off to Hawaii (etc) and we take their heavy coats home to bring out when they get back.
‘The planned average turnaround times for the US majors ranged from 52 minutes in the case of Southwest to 68 minutes for United Airlines, with all six airlines reporting average actual turnaround times of between 59 minutes (Southwest) and 77 in the case of Delta Air Lines.’
https://www.oag.com/blog/science-aircraft-turnarounds#:~:text=The%20planned%20average%20turnaround%20times,case%20of%20Delta%20Air%20Lines.
Those are probably turnaround times at the *gate*. Getting to/from the gate at large airports incurs even more delay (long taxiing, takeoff queues)…thus pointing to yet another advantage of smaller airports.
The Ryanair turnaround times at most airports are 25 mins plus about 5 mins away from the gate (each way).
Boeing investigates quality problem on undelivered 787s, Reuters sources say
“Boeing is investigating a new quality problem with its 787 Dreamliner after discovering that hundreds of fasteners have been incorrectly installed on the fuselages of some undelivered 787 Dreamliner jets, two people familiar with the matter said.”
https://www.cnbc.com/2024/06/13/boeing-investigates-quality-problem-on-undelivered-787s-reuters-sources-say.html
‘The sources said the fasteners – which attach the carbon-composite skin to skeletal supports inside the fuselage called longerons – had been torqued from the wrong side.’
How many delivered and in service jets have the same issue?
But here comes the rider:
‘There is no immediate concern about flight safety but Boeing is working to understand what caused the problem…’
Immediate (def):
occurring or done at once; instant.
Add up all the currently-known defects in the 787 fleet and the concept of “immediate flight safety risk” is cast in a very different light.
Probabilities stack multiplicatively…not additively.
And unit probability takes on a very different meaning when considered across a base size as large as the 787 fleet.
Just another week for BA.
“Airlines are concerned about existing delivery delays, with some buyers estimating average delays of several months.”
What’s the impact on resale value?
As a vote of confidence, isn’t it time for members the board & C-suite of BA to abandon flying in private jets and switch to taking nothing but Boeing 737 MAX and 787.
One ray of hope: every week that goes by results in a steadily increasing number of MAXs/787s sliding into the window of penalty-free cancellation…so airlines have increasing possibilities to dump controversy-ridden lemons from their order books.
@Abalone
But they’re not (by and large). And do you know why? Do you know why someone like United will wait to take on it’s 787’s to replace it’s 767’s (maybe accumulating a few ‘Boeing compensation bucks’ along the way)?
Because they’re dirt cheap.
“Flying where? I’m taking the boat out today. You can Zoom me between 13:05 and 13:15. I’ll bring an iPad.”
– Deep Sea Dave
What caused the problem?
How about all the douchebag executives like Calhoun who know only finance and nothing of aerospace.
But I suppose they are not interested in the root cause, only the superficial one.
for the sake of variety
Diplomats visit Chinese aviation firms in Shanghai, seek closer cooperation
“About 40 diplomats from 28 countries visited the Commercial Aircraft Corp of China (COMAC) in Shanghai on Wednesday to learn about the latest progress that China has made in advanced manufacturing”
“I hope that COMAC will be interested in cooperating with Morocco by thinking about having production sites in Morocco,” Ambassador of Morocco to China Abdelkader El Ansari told the Global Times”
https://www.globaltimes.cn/page/202406/1314027.shtml
Somewhat related — Thailand has just applied to join BRICS.
And:
“Turkish Foreign Minister Hakan Fidan reaffirmed Ankara’s desire to join Brics during his trip to China last week.”
https://www.scmp.com/news/china/diplomacy/article/3265213/china-backed-brics-mulls-thailand-membership-could-more-countries-soon-join-club
With Embraer, COMAC, AVIC and Irkut/Yakovlev in its ranks, BRICS has the potential to leave a growing footprint on the world aviation stage…particularly now that BA is becoming increasingly irrelevant.
“COMAC ARJ21 Operates First Commercial Flight in Central Asia”
So, Tajikistan becomes the 4th country to certify the ARJ21 outside of China.
https://aviationsourcenews.com/airline/comac-arj21-operates-first-commercial-flight-in-central-asia/
China’s ARJ21 Jet Makes First Commercial Flight, Starting Regular Cargo Service to Uzbekistan
“The plane carried e-commerce goods, including consumer electronics and accessories. It will bring local specialties from Central Asia back to China.”
https://www.yicaiglobal.com/news/chinas-first-arj21-cargo-jet-makes-maiden-flight-to-uzbekistan
A certain commenter here assured us that COMAC products would never venture outside of China, due to lack of FAA certification.
* ROFL *
Already serving Indonesia, Malaysia, Tajikistan and Uzbekistan.
Truly ROFL when someone tries to distort another persons statement.
For the rest, I stated that COMAC would not break into modern markets that adhere to certification requirements of which CAC does not have ant recognition. Those certifications are based on mutually recognized standards. So its EASA, Brazil, Candada and the US that make some form of larger commercial aircraft. CAC is not. COMAC has failed twice to achieve a system that adheres to those standards. No one says they have to. They can supply their own market (well the one the Government controls entirely) or any country that allows it. Japan will not, none of Europe will (unless EASA gives them cert) UK will not, India will not, Kenya and Ethiopia probably will not. Etc. Saudi’s might if they cook up a deal with China, politics being what it is.
The other hoot is supposedly COMAC has hundred of sales of the C919, all to China Airlines, China owned or Chinese controlled companies and in other countries.
With an amazing 6 of the C919 delivered already, the wait list for one is something around 2050?
But then for what looks like a foreign sale, one would be available of course.
But then there is the poison in the chalice that China gives deals and then forecloses and takes over an operation.
The Indonesian operation is Chinese controlled though how closely tied to the Chinese government no one outside the inner circles knows.
China has two pie in the sky programs going (on a spin basis) in the 929 and the 939. Eventually they will develop the tech to do them.
For those even if they ever came to see the light of day, its all international flights.
Cherry picking things does not make them true.
@Abalone
I believe I said East Asia orbit.
Call me when Korea or Japan or Singapore signs on…let alone anyone in Europe or the Americas
Some people are interested in Aviation, where its come from and where its going.
Some have an agenda to try to propagate.
I don’t support Boeing because of the likes of Calhoun, I do for the people in the company that do their best and trying to earn a decent living as well as an industry that is good for the United States.
Airbus has turned out well for Europe (so far). Sadly due to the GE Pillage scheme, Boeing has not since the MD takeover.
Russia will never sell an aircraft as a private venture again though they did have the certification to do so at one time.
Correct me if I’m wrong, didn’t you say: “… outside* of the east Asian orbit”?
From our expert of EASA certification: “They would not even do what was required to get EASA or FAA recognized certification”; “EASA requires the system in place to prove it, not take China word that we did it all right. If you think Boeing has issues with EASA cert, COMAC will spend the next 30 years trying to pull the wool.”
30 years!?! Lol.
@Pedro
To be very specific there are certainly international sales that Comac can access.
Countries that end in “stan” Bangladesh, North Korea, Myanmar and the like. Forget certifications, there is the matter of merely setting up an international support system for what is not only a Chinese aircraft but also containing mostly Chinese Tier 1 and 2 suppliers. Then there is the matter of whether any lessor not based in China will sign and whether there is a Tier 2 market.
I can go on
“Oh Candada”
“Our home and native land”
The National Anthem
(TW edit)
What’s the chance the aircraft is certified by EASA? Zero? Lol.
…”modern” market …
The modern market of the world has to import parts and supplies from less/non-modern market.
The modern market does not allow the MAX 7/10 to certified due to overheating of anti-icing system, however the MAX 8/9 with the same anti-icing system are certified and not grounded. ROFL
ROFL.
> to be* certified
@Frank P
“Times have changed,
Our kids are getting worse!
They won’t obey their parents,
They just want to fart and curse!
Should we blame the government?
Or blame society?
Or should we blame the images on TV?
No, blame Candada!
Blame Candada!
With all their beady little eyes,
And flapping heads so full of lies!
Blame Candada!
Blame Candada!
@ Frank P, @ Pedro
Look on the bright side: Candada is better than Candida, isn’t it? 😅
Regarding the ARJ21, it’s interesting to note that there are now almost 150 of them in service.
Average production rate is now up to 3 per month…although there were 6 first flights in May. As with Airbus, the time between first flight and delivery is now measured in days rather than weeks.
Of course, the Achilles Heel is the GE engine, which we can expect to be sanctioned soon…but, no doubt, the Chinese/Russians have a non-Western replacement in the pipeline.
Yea we keep hearing you spout that but its not happened yet has it?
Kind of like an Oracle that has their seat turned backwards.
So the wondrous ARJ is making 36 a year all delivered into China that dictates via the government who takes what aircraft.
You take 2, you take 2 and you take 2. Nice even playing field when Embraer can’t sell jets there because the Communist Government does not approve Embraer aircraft sales into China.
My grandmother could build more aircraft a month than that (and she did in WWII!)
Lol. During WW II, US built thousands of ships. How many were built last year?? A handful?
They’re for-profit corporations. Lol.
https://www.flightglobal.com/airlines/chinas-big-three-to-see-record-profits-in-2024-hsbc/155632.article
“Ferguson’s Law states that any great power that spends more on debt service (interest payments on the national debt) than on defense will not stay great for very long. True of Hapsburg Spain, true of ancien régime France, true of the Ottoman Empire, true of the British Empire.
BI: The true cost of America’s war machines
https://m.youtube.com/watch?v=_iwW5PQcdGw
“The HH-100, a new large cargo drone built by Aviation Industry Corp of China, the country’s leading aircraft manufacturer, made its maiden flight on Wednesday, AVIC said in a news release.”
“Dong Jianhong, the HH-100’s chief designer, said the drone features many advantages such as low costs in procurement, operations and maintenance, as well as a high payload capacity. All of its components are domestically made, he said.”
https://www.chinadaily.com.cn/a/202406/13/WS666a42d1a31082fc043cc303.html
Shilling for the Chinese air companies are we?
No, merely stating fact. The duopoly may have a valid threat coming…..c’mon Embraer, show’em what you can provide to the free world.
I previously thought that Embraer and COMAC would enter into a JV, but I now think that an Embraer JV with India is more likely.
Still within BRICS, naturally.
And, by the way: I think that Chinese cargo drone is nifty.
They need funder(s) to back them.
Interesting, BRICs without the I.
Brokes?
Something about someone invading their border (well a couple of someones)
Oh, its now all Chinese owned. So sorry.
Turkey, UAE, the Saudi have joined. Malaysia and Thailand will follow. 🙂
The Economist: China has become a scientific superpower
“Tsinghua is now the #1 science and technology university in the world,” says Simon Marginson, professor of higher education at Oxford.
“Students in China don’t think about America as some scientific Mecca in the same way their advisers did”
China’s homegrown C919 starts 4th regular passenger route from Shanghai to Guangzhou
https://www.globaltimes.cn/page/202406/1314135.shtml
Be still my beating route!
From the professor who popularized the Thucydides’s Trap about the G7 meeting, ‘it is worth rereading Martin Wolf’s article on last year’s G7 meeting in Hiroshima titled “The G7 must accept that it cannot run the world.”‘
‘Between 2000 and 2023, the G7’s share in global output (at purchasing power) will have fallen from 44% to 30%’
‘Since 2000, “China’s share will have risen from 7% to 19%. For some emerging and developing countries, China is a more important economic partner than the G7: Brazil is one example.”
“19 countries have applied to join the BRICS. Clearly, what brings its members together is the desire not to be dependent on the whims of the US and its close allies, who have dominated the world for the past two centuries.”
“How long, after all, can (or, for that matter, should) the G7, with 10% of the world’s population, continue to do so?”
On an increasingly multi-polar, multi-lateral, multi-aligned chessboard, the growing recognition that “no one is in control” reflects the underlying dispersion of power—and requires a new level of statecraft.’
https://x.com/GrahamTAllison/status/1801660723254141297
Time to leave the zero-sum mentality aside.
Another week…another round of US sanctions.
This time against China, the UAE and Turkey.
“Under the latest measures, Washington will also broaden its definition of “military-industrial base” to apply so-called secondary sanctions to foreign financial institutions that do business with any sanctioned entities.”
https://www.aljazeera.com/economy/2024/6/13/us-expands-russia-sanctions-targeting-entities-in-china-uae-and-turkey
No wonder there’s so much international interest in COMAC.
BRICS is expanding which is of concern.
Here’s a (related) bombshell for you:
“U.S.-Saudi Petrodollar Pact Ends after 50 Years” (expired last Sunday)
https://www.nasdaq.com/articles/us-saudi-petrodollar-pact-ends-after-50-years
Will ultimately also affect aviation.
Failure was not an option.
From a good source, here’s the backstory on the Petrodollar. 50 years ago Kissinger and Treasury Secretary Bill Simon made a secret death threat to King Faisal and threatened to occupy the oil fields if he didn’t recycle dollars into Treasuries to fund US deficits. That’s how they secured the Saudi “partnership”.
Funny I read the EU was going after Chinese electric cars being dumped onto the continent .
What is an organization supposed to do?
I heard Biden is so scared he is hiding behind a tariff wall!
News Flash:
The Pentagon runs psyop against China
This is a good summation of Elliot. It could apply to Boeing as well though “chocking the golden goose ” would have been the board and execs.
https://crankyflier.com/2024/06/13/elliott-doesnt-know-how-to-fix-southwest-nor-does-it-likely-care/
I don’t think its a question that Southwest needs to change but not under a pillage scheme.
I thought this was about SW and the hedge fund. Seems there is a mollusk on this thread who is a particularly obsessed AB fan. May I suggest you find a more appropriate forum in order to let us address the topic on hand without constantly being sidetracked by your agenda?
As far as Elliott investing into SW it brings back memories of Carl Icahn getting into TW, stripping it of it’s assets and therefore contributing to the demise of this historic carrier. Nothing good will come out of this deal either as the only beneficiary will be Elliott.
Sam D:
Spot on.
NBC: Boeing and Airbus may have used ‘counterfeit’ titanium in planes
“The news adds to a troubled period for Boeing, which is the subject of ongoing federal investigations for alleged safety problems.”
https://www.nbcnews.com/business/business-news/boeing-airbus-may-used-counterfeit-titanium-planes-faa-investigating-rcna157160
In the case of Airbus, the sub-spec titanium comes from Spirit Aero, and was used in (part of) the engine pylon on A220s:
“The faux titanium has been used in both Boeing 737 Max and Airbus A220’s heat shield that protects a component that connects a jet’s engine to its frame, according to Spirit AeroSystem officials.
“Boeing’s 787 Dreamliner has used the material in its passenger entry door, cargo doors and a component that connects the engines to the plane’s airframe.”
https://www.independent.co.uk/news/world/americas/boeing-airbus-holes-titanium-faa-b2562757.html
More (compensation) costs for Spirit…
And, on the subject of Spirit: any sign yet of a green light for that “accelerated” (partial) takeover by BA?
NOPE!
Spirit also makes some stuff for the A350. Is that program touched?
I guess Airbus can count themselves lucky if that’s the only program and only parts that are effected.
Thus far, it seems to be limited to A220 pylons, MAX pylons and 787 pylons/doors.
Looks like Spirit tried to acquire materials “el cheapo”.
Penny wise…pound foolish.
I wonder if they found it on Alibaba’s website or did they do it the old fashion way of vetting the supplier first with a site visit?
https://www.alibaba.com/trade/search?spm=a2700.galleryofferlist.the-new-header_fy23_pc_search_bar.searchButton&tab=all&SearchText=aerospace+titanium+plate
@ David Pritchard
Brilliant!
You’ve solved the riddle!
I wonder what other stuff Spirit/Boeing have sourced from Alibaba (or Amazon) 🤔
Metal fasteners come to mind…
Funny how those cheap materials came out of a company in China who forged the documents that piggy back another Chinese company that supplies legitimate and documented forgings.
If you can’t trust China who can you trust?
Funny that these “cheap” materials the “modern” market can’t supply itself. Why?? 🙄 Ossified?
Why would anyone buy from an unknown source? The whole supply chain is broke?? 😭
Both Boeing and Airbus vouched after thousands tests, the material/parts meet their requirements. How does the NYTimes story add up?
F.A.A. Investigating How Counterfeit Titanium Got Into Boeing and Airbus Jets
“The material, which was purchased from a little-known Chinese company, was sold with falsified documents and used in parts that went into jets from both manufacturers.”
“First reported by the New York Times, the problem came to light after a parts supplier found tiny holes from corrosion in the titanium, according to the newspaper.”
https://www.nytimes.com/2024/06/14/us/politics/boeing-airbus-titanium-faa.html
According to the NBC report above:
> Spirit added that “more than 1,000 tests have been completed to confirm the mechanical and metallurgical properties of the affected material to ensure continued airworthiness.”
> “Boeing reported a voluntary disclosure to the FAA regarding procurement of material through a distributor* who may have falsified or provided incorrect records,”
> Boeing said in an emailed statement: “This industry-wide issue affects some shipments of titanium received by a limited set of suppliers, and tests performed to date have indicated that the correct titanium alloy was used.”
> Airbus statement: “Numerous tests have been performed on parts coming from the same source of supply,” the statement said. “They show that (aircraft) airworthiness remains intact. The safety and quality of our aircraft are our most important priorities and we are working in close collaboration with our supplier.
Boeing just can’t stay out of the news, can they?
The titanium
Astronauts at the ISS
787 rivets
737 Dutch Roll
So many fires to put out.
That company is irrepairably broken…period.
thanks in part to the Boeing’s “Partnership for Poverty” which forces continuous supplier pricing reduction
As for 787 rivets, one needs to ask, would that have happened if in the 787 FAL stayed in Everett?
Indeed: if you pay peanuts (to suppliers), you get monkeys 🦧
Why all of a sudden there are a number of incidents from WN??
Report from Bloomberg
A @SouthwestAir flight plunged to within 400ft of the ocean after an aborted landing in Lihue.
The “first officer ‘inadvertently’ pushed forward on the control column, then cut the speed causing the airplane to descend.”
https://x.com/ByERussell/status/1801684223927193765
The incident took place back in April, but news came out today??
…weren’t we told after the MAX crashes that US flight crews were much better than those in other countries…?
The two largest shareholders in Boeing are Blackstone and Vanguard, and they probably have a lot to do with Calhoun being reelected to the board.
Calhoun himself is a Blackstone guy,. He was senior managing director and head of portfolio operations from 2014 till around when he ascended to the throne of Boeing.
He was also on the board of Boeing during this time, which sounds like a bit of an incestuous conflict of interest.
Anyhow, in view of the marionette-like control of the board exerted by the largest investors. and how the most powerful strings are pulled by Blackstone and Vanguard, how about changing the name of the company from “Boeing” to “Blackguard”?
To me the name rings true.
All Southwest needs is to bring some of that GE-Blackstone-Boeing magic to its board of directors. Then they’ll figure out how to outsource all the jobs and cut payroll by 75%. Hire pilots and attendants based in Tijuana and Monterey. So what if your flight attendant doesn’t speak English? When somebody asks you a question while pushing a cart full of drinks chances are it’s nothing to do with the weather.
Actually, I suppose the regs require the attendants to speak English for all that emergency stuff, though I think “Get the hell off the burning plane now” would likely be understood in any language.
Besides, most educated foreigners speak great English.
“Boeing Whistleblower Tips to FAA Soar Since Door Panel Blowout”
“(Bloomberg) — The Federal Aviation Administration received more than 11 times as many Boeing Co. whistleblower reports in the first five months of this year compared to all of 2023, according to data the agency shared with Bloomberg News.
“From Jan. 5 through May, 126 tips were reported to the regulator, compared to 11 in all of 2023, the FAA said in a statement Friday. ”
“FAA Administrator Michael Whitaker said during a Senate hearing on Thursday that the FAA had “multiple active investigations” into the aircraft manufacturer, coinciding with a rise in reports coming from whistleblowers and through the agency’s safety hotline.”
https://www.bloomberg.com/news/articles/2024-06-15/boeing-whistleblower-tips-to-faa-soar-since-door-panel-blowout
Very late Friday story: the first flight of Boeing’s new Air Force One has slipped to March 2026. Boeing has lost over $2B to date on the troubled program.
https://x.com/michaeldmarrow/status/1801760380575957211
Yes…BA needs another 2 years to find all the tequila bottles hidden in the airframe 🍸
From Reuters.
> Boeing tells suppliers it is slowing 737 output goal by 3 months, sources say
https://x.com/jonostrower/status/1801849750645576048
A whopping 19 Max delivered in May. And I can’t find anywhere how many of those were delivered out of the shutdown inventory
I wonder how much the top suppliers are pushing on Boeing for progress payments where inventory is building
Planespotters will tell you.
Search the 737 Max production list. Sort by Line Number. Scroll down and check Delivery dates. Older line numbers mean it came out of the pile. You may have to go back a few pages.
For instance:
https://www.planespotters.net/airframe/boeing-737-max-8-9v-mbm-singapore-airlines/e2wz2g
Singapore Airlines took delivery of this aircraft on May 31, 2024.
It was originally built for Silk Air and it’s first flight was Nov 2019 in Renton.
It is 4.6 years old.
I’m betting they didn’t get full whack for it…
———————–
Here’s another
https://www.planespotters.net/airframe/boeing-737-max-8-vt-bxv-air-india-express/e2w0qg
You can read the details near the bottom, of who was originally taking the plane.
This one went to Air India Express after Shandong refused to take it. 4.7 years old.
They’ve been taking a lot of the refused Chinese aircraft.
———————–
Another May delivery
https://www.planespotters.net/airframe/boeing-737-max-8-vt-bxu-air-india-express/rqjljm
————————
Another one to Argentina
https://www.planespotters.net/airframe/boeing-737-max-8-lv-kit-aerolineas-argentinas/r7wyjj
5.3 years old
The 2nd and 3rd frame that you detail above are listed as “stored”, whereas the other two are listed as “active”.
Imagine that: 5 years old, just recently delivered, and *still* not in service.
Undergoing local cabin fit?
Not needed, but at a price you just couldn’t refuse?
@Frank
As mad as many customers may be with Boeing, it’s hard to turn down aircraft when they are as cheap as they are probably getting them. That goes across the board. As angry as WN or Emirates or any other operator may be, there is a limit to which Boeing may simply just let these sales go. They will not get a better deal with Airbus, and if that involves getting in a very long line then are you really better off?
Five year old NB & 787’s still in inventory.
If I were BA, I’d just want these things off my lot already. They also have those 777X’s that are that old, as well.
A recent video by Mentour said that the Max 7 is now looking like it’ll slip into 2026 EIS.
Now we know why BA borrowed another $10 billion. It’s going to be awhile.
@Casey
Both WN and UA are at the front of the line, but still can’t get their hands on what they really want. 🤫
Are they going to be any wiser next time when they place an order??
What if AF/KLM ordered the MAX??
“The 1st @Airbus A321neo for @KLM is taking shape in Hamburg.
https://x.com/rschuur_aero/status/1801716667883655296
Conversely, the Lufthansa group is trying to decide what to do with its (ill-advised) order of 40 MAX-8s from last year.
Looks as if they’re going to be (partially) deployed at Austrian Airlines:
https://simpleflying.com/austrian-airlines-boeing-737-max-8-airbus-a320-replacement/
Conversely: Lufthansa can just wait until the late delivery clauses kick in (a virtual certainty), and then cancel without penalty. After all, the order was placed before the Alaska door blowout (+ nacelle heating + wiring issues + faked documentation + whistleblower drama + Dutch roll) gained attention.
> “Atlas Air Boeing 747-400F (N429MC, built 1990) sustained multiple tire bursts of the left maingear during departure from runway 16L at Seoul-Incheon Intl (RKSI), S-Korea. Flight #GTI8692 to Anchorage discontinued its climb at 10000 ft and returned to land about 50 min later. Same aircraft experienced tire damage at Los Angeles on JUN 6th.
https://x.com/JacdecNew/status/1800930401419964463
> “Update: The 747 became stuck on the runway after landing. On 2024-06-10 N429MC diverted to Seoul-ICN on a flight from Hong Kong to Anchorage (same flight #GTI8692) for reasons still unknown.
More bad news:
> Hong Kong International Airport is operating on only one runway Monday morning after an Atlas Air cargo plane reported a malfunction after take-off, returned to HKIA at 4.09am, and blew a tire on landing
Sign up here for the Daily Aircraft Rant!
https://x.com/nfergus/status/1803008721175322826
Bad news for Southwest (and Ryanair, Alaska, etc.):
“Half of travelers are avoiding Boeing planes in wake of safety incidents”
“As many as half of passengers are deliberately avoiding flying on Boeing planes this summer, and turning to digital tools to avoid buying tickets on Boeing flights.”
“DailyMail.com spoke to multiple travel-sector experts who said that up to half of customers are now shunning Boeing planes in the wake of a series of safety issues.”
“Aaron Sutherland, founder of travel company Jetsetter Lifestyle, said that there has been a ‘notable’ shift in customer sentiment around Boeing aircraft.
“Sutherland said: ‘In recent months, almost 50 percent of our clientele have explicitly requested to avoid Boeing planes for both domestic and international travel.”
https://www.dailymail.co.uk/sciencetech/article-13526083/Half-travelers-avoiding-Boeing-planes-wake-safety-incidents.html
You gotta hand it to the Daily Mail as a reputable Tabloid!
Right next to TASS in its integrity.
As if we needed more proof;
Airbus NB orderbook is getting kind of full.
737Max line can’t deliver over 38 (they can’t get to that number, right now)
You’d think that Embraer might be able to make some headway with the E2 line.
I think it’s pretty obvious that airlines don’t view it as able to do the job and don’t consider it as an option.
And, yet, we have this curious article today — evidence of a complete “reality disconnect” at BCA:
“737 MAX Production Rate Increase Reported”
“Boeing has signaled its 737 MAX program suppliers that the aircraft assembly rate will increase in September to an estimated 42 jets per month. The increase had been expected to be reached this month, but the OEM has been operating under voluntary limits as it works with regulators to determine the sources of various quality and performance failures with the narrow-body aircraft program.”
https://www.americanmachinist.com/news/article/55089109/737-max-production-rate-increase-reported-boeing
So, the current *real world* line rate appears to be about 10 p/m…but 42 p/m in September is being planned.
Sure!
An all-out effort to spin a bad story of delay into 42 jets per month! (disregard FAA’s limit at 38 only)
Look at the upside!
Reuters:
“Boeing’s supplier master schedule lays out expectations for when suppliers should be at a given production rate. Analysts say it does not necessarily reflect actual production which has been lagging due to a mixture of regulatory scrutiny and supply constraints. […]
The new supplier schedule calls for output to reach 47 a month in March 2025, compared with January of that same year. Output would reach 52 a month in September 2025, compared with June.”
Hey I have a bridge to sell! Who’s interested? Price negotiable!
@Abalone & Pedro
What I think BA is doing, is getting the supply chain up to those rates and putting into stock, any inventory they can’t deliver, what ever the reason;
FAA caps
Lack of staff at BCA
Re-work
No certification
This way the supply chain will be producing.
You didn’t think that extra $10 billion was going to buybacks & dividends, did you? I wonder how many investors hoped for just that occurrence….
@Frank…would be a nice exercise to know how much price escalation is going on with new aircraft sales.
Both airframers are really at the point where they can no longer raise production. The only two options left are sell out and/or raise prices.
Lowering prices is also an option, to entice existing customers to defect. For example: I think TC would get an attractive price on a batch of A350-1000s if he indicated that he was going to use them to dump ordered 777Xs.
Additionally, I can imagine that attractive pricing would be offered to Air Asia X (for example) for a big order of A330neos.
But I don’t see AB selling at a breakeven or loss, no matter how enticing the deal — unlike over at BA.
@Abalone
Major orders on A330 and A350 are easier to absorb…not the same level of backlog.
Strategically though…if I am Airbus…I do not want to kill off the B777X. That program will bleed Boeing for years to come. Killing it off would almost do a service so that they could focus on delivering the product that operators are actually looking for.
Boeing is in too deep. They can’t kill it. They’ve spent some $20+ billion on it, so far.
They’ve gotta hope that in 5 years it’ll turn into a game changer, airlines will want it and that nothing goes wrong, once it’s in service.
@ Frank P
BA won’t have to kill it — the FAA will do that for them, by denying cert.
@Abalone
I don’t think the FAA will do that. They’re taking enough heat, already. I honestly don’t think they want to hurt BA, but they want to hold them accountable to make safe planes.
They will probably make damn sure, because of the egg left on their face, that every i is dotted and every t is crossed.
BA is desperately in need of massive orders to right its FCF before June 30. How low can they go??
That’s a job for the gang at Leeham, who have inside info on pricing.
All profitability shown in the quarterly reports are a function of a group of aircraft delivered over a specific period.
With BA’s program accounting, they can also fudge the numbers.
https://s2.q4cdn.com/661678649/files/doc_financials/2024/q1/Commerical-Airplanes-Unit-Cost-vs-Program.pdf
2024 1Q24
Commercial Airplanes – Program Accounting (1,143)
Commercial Airplanes – Unit Cost Accounting * (1,644)
What they reported vs what it actually cost them.
For BA, P&L is less relevant as long as they can create FCF out of thin air. It’s all* about the narrative and the Potemkin village for 2025/26 and why the master schedule is stuck at a ridiculously high 52 per month in 2025.
The more I follow BA, the more I read some of the financial reporting on it, the more I believe that the PR being put out there is exclusively for investors (read: bag holders).
The focus always turns to;
1) It’s a duopoly
2) Look at our backlog
3) We’re going to XX rate at XX date
4) Free cash flow in the billions is coming soon
Every commercial program is a mess and not making any profits.
Defense is losing money.
This is a 5 to 10 year turnaround.
Damnit. I forgot ‘too big to fail’ in the list
@Frank
What can be found more easily is the lease rates on late-model aircraft that should run as some form of function of new aircraft value.
https://www.iba.aero/insight/aircraft-values-lease-rates-update-february-2024/
Found this article (a little dated) that has a nice table showing a 16% hike in new A321 lease rates projection over the first 6 months of the year.
AW
Qantas And Airbus Overcome Regulatory Hurdle For Project Sunrise
“Project Sunrise seeks to operate record-breaking flights, initially from Sydney to London and New York, beginning in mid-2026.”
“Project Sunrise flights are estimated at 19-20 hr.”
“EASA has since approved the extra fuel tank, Qantas Group CEO Vanessa Hudson confirmed at a briefing on the sidelines of the International Air Transport Association’s (IATA) Annual General Meeting in Dubai. This means the airline is “feeling very optimistic about the delivery timetable” for the A350-1000s, she said.”
https://aviationweek.com/air-transport/airlines-lessors/qantas-airbus-overcome-regulatory-hurdle-project-sunrise
Remind me again…why does the airline industry need the 777x?
“…why does the airline industry need the 777x”
Because it’s fun to needlessly carry around 30t of extra OEW…especially in an era in which aviation is attempting to cultivate a greener image! 🏝
“GE Aerospace’s Larry Culp declined Boeing’s request to take over as CEO, WSJ reports”
“(Reuters) -GE Aerospace CEO Larry Culp has declined Boeing’s request to consider taking over as the U.S. planemaker’s top boss, the Wall Street Journal reported on Monday.
“Boeing and GE Aerospace did not immediately respond to Reuters’ requests for comment.
“Culp on several occasions had said he was not interested in the job. In April, Culp told Reuters he can best serve Boeing by being its best supplier.”
https://finance.yahoo.com/news/ge-aerospaces-larry-culp-declines-184716440.html
Its all nattering. We will know when someone take the job and it could be Culp or not. Speculating fills the news, its is not news.
Of course he is going to deny. As is the guy from Carrier.
Like a football coach, they negotiate and want to have full ability to run the operation. Nothing wrong with that and its needed.
Good laugh. Be (better) informed.
https://x.com/jonostrower/status/1802875235257188852
“Sen[ator] Blumenthal said today a new Boeing whistleblower will come forward “in the next 24 hours” who will report “additional egregious safety problems”
https://x.com/davidshepardson/status/1802800262631059509
“New: here is full written testimony from Boeing CEO Dave Calhoun for tomorrow’s hearing
https://pbs.twimg.com/media/GQTgPy3XMAA20Gj?format=jpg
https://pbs.twimg.com/media/GQTgPy3XUAECJsr?format=jpg
https://x.com/davidshepardson/status/1802812316582384055
By the time the 777-9 becomes available in numbers, I believe the ongoing mid live upgrade programs for the A350 have progressed. Deliveries started 10 yrs ago & Airbus R&D doesn’t sit on it’s hands.
Ultrafans, A350F, A35XLR, capacity derivatives, less pilots cockpit certification, production ramp up, MRO optimizations, continuous production improvements, cabin options.
An uphill battle for the 777-9, let alone 777XF (a changed product derivative of an unapproved changed product derivative, FAA will love the certification paperwork)..
A picture on the 777x certification I made many years ago & was considered flamebait..
https://groups.google.com/group/aviation_innovation/attach/2d84b30595db3/FG%2096%20Flowchart%20TC.jpg?part=0.1&view=1&authuser=0
What does an A350Neo look like? A GE option for an engine? Will Airbus do folding wingtips?
Airbus has been working close with RR Ultrafan, dimensioned to fit the A350.
https://theaircurrent.com/engine-development/airbus-and-rolls-royce-plot-ultrafan-for-a350neo/
It could look like this:
https://07185918574543712684.googlegroups.com/attach/1d9a72e2665b7/A350%20evolution%20options%20keesje.jpg?part=0.1&view=1&vt=ANaJVrGLGVH3nVRslREXna0zjNJeX9EuKZti5qyeb2IZ3xdy-wzd-12oQSd9iae5APFILemgL7n8ejRvdifWcQChDgNe11CgyCDnsNLcK4LEBMTJs5ORCYM
I was just looking to see how a GE9X would fit on a A350. Not very likely:
RR
Dry weight 7,277 kg (16,043 lb) 7,550 kg (16,640 lb)
GE
Weight 21,230 lb (9,630 kg)
About 10,000 extra lbs in engine weight.
“Airlines are quite possibly the most complicated businesses on Earth. And, everyone that flies a lot thinks they know how to run them,” @Travel_Buddha said of Elliott’s bid for change at Southwest Airlines on @flightradar24 ‘s AvTalk.
https://x.com/ByERussell/status/1802821236806001092
I think that aircraft OEM’s like AB & BA are one of the most complicated businesses on earth.
AW
Iberia Tentatively Schedules November Airbus A321XLR Launch
“Spanish carrier Iberia, the launch customer for the Airbus A321XLR, has opened reservations for the first two routes that will be served using the aircraft type.
The airline has tentatively scheduled the inaugural commercial flight for Nov. 14, connecting Madrid Adolfo Suarez-Barajas Airport (MAD) and Boston Logan International Airport. A second A321XLR route from MAD to Washington Dulles International Airport (IAD) is due to start in mid-January 2025.”
https://aviationweek.com/air-transport/airlines-lessors/iberia-tentatively-schedules-november-airbus-a321xlr-launch
“Exciting” time
“When Boeing CEO Calhoun testifies today in a U.S. Senate hearing, what always promised to be an uncomfortable reception for him now looks set to be a roasting.
He’ll face new whistleblower claims of fraud and deception at the 737 MAX final assembly plant.
https://x.com/dominicgates/status/1803004729141670074
Another day, another amateuristic (and fraudulent) screw-up at McB:
“Boeing hid questionable 737 Max plane parts from FAA regulators, new whistleblower alleges”
“A current Boeing employee claims that the company tried to shield broken or out-of-specification 737 Max plane parts from regulators and lost track of them, according to a Senate subcommittee investigation made public Tuesday.
“Boeing tried to hide the nonconforming parts from Federal Aviation Administration regulators by moving them out of sight and falsifying records, claims Sam Mohawk, the new whistleblower who works for Boeing quality assurance unit in Renton, Washington. Boeing was unable to account for many of the parts that it moved around to skirt regulators, and they probably ended up getting installed in some planes, Mohawk said.”
https://abc13.com/post/boeing-hid-questionable-737-max-plane-parts-faa-regulators-whitleblower-sam-mohawk/14969769/
—–
“Just ship it”
Time to reduce the limit from 38 a month, have to make sure parts unaccounted for can’t happen again.
@Pedro
Not sure that will make a difference. Boeing already likely is swarmed with oversight. And a big reason they are nowhere near the 38/mo cap. It must be a painful process right now for each delivery.
Casey:
You are attempting to bring logic to the discussion, shame on you
As the delivery is maybe 20 MAX a month right now, 38 is a cap that is going to be some time before reached (rightfully so).
One issue I do have is the odd business that an aircraft mfg has to deliver a perfect aircraft (and should)
But then the airlines are allowed to use an MEL that allows a less than perfect aircraft to fly using various backup systems.
Vid
New Boeing whistleblower shared ‘chilling’ account of retaliation, senator says
https://www.cnn.com/videos/business/2024/06/18/boeing-whistleblower-blumenthal-intvu-ctm-digvid.cnn
‘Boeing was unable to account for many of the parts that it moved around to skirt regulators, and they probably ended up getting installed in some planes’
Or not installed, as the case may be. Just ask Alaska.
Boeing Lost Track of Up to 400 Bad 737 Parts, Whistleblower Says
“[…] The stock has lost about a third of its value this year.
Documents and whistleblower accounts collected by the panel thus far “paint a troubling picture of a company that prioritizes speed of manufacturing and cutting costs over ensuring the quality and safety of aircraft,” staff from the panel said in a memo to members. […[
The demands on Mohawk’s job monitoring those parts surged after the 737 Max’s worldwide grounding triggered by the two deadly crashes. Mohawk alleged that “the overwhelming number of nonconforming parts eventually led his superiors to direct him and others to eliminate or ‘cancel’ the records that designate a part as nonconforming,” according to the memo. […]
The concerns raised by Mohawk bear similarities to allegations previously raised by the late Boeing whistleblower John Barnett about the production of one of the company’s other flagship aircraft, the 787 Dreamliner.
https://www.bnnbloomberg.ca/boeing-lost-track-of-up-to-400-bad-737-parts-whistleblower-says-1.2086452
Last Thursday:
Boeing is ‘too big to fail,’ Bank of America says
“In its research note, Bank of America said it was upgrading its price target on Boeing’s stock to $200 a share from $180”
https://qz.com/boeing-too-big-to-fail-1851538207
How many analysts had a “buy” rating on SVB the day it went down the drain?
How many currently have a (strong) buy rating on Nvidia despite its ludicrously elevated P/E and P/S ratios?
The US equity landscape is rather detached from the real world…
Cloudy skies at the DOJ…?
“The session comes ahead of a Department of Justice determination on next steps after concluding in May that the company could be prosecuted for violating a criminal settlement following two fatal 737 MAX crashes in 2018 and 2019, off Indonesia and in Ethiopia.
“Blumenthal said there “is near overwhelming evidence… that prosecution should be pursued.”
“The DOJ has said it will notify a federal court of its plans by July 7.”
https://techxplore.com/news/2024-06-boeing-ceo-gravity-safety-crisis.html
“Boeing CEO cannot answer if the planemaker took tax dedutions or insurance coverage to account for 2021 DOJ penalty
https://x.com/davidshepardson/status/1803145319586390100
AW: Emirates Eyes New Ultra-Long-Haul Opportunities With Incoming A350-900
Also AW: IndiGo’s A320neo Delivery Stream Helps Offset Delays, CEO Says
> “Last year, two Southwest Airlines 737 MAX jets lost engines on takeoff after striking large birds, emergencies made much more serious when smoke and fumes penetrated inside the airplanes.
https://x.com/dominicgates/status/1803177770010464395
> “Recognizing an abnormally high risk in these two unusual incidents, Boeing sent an alert to airlines in February Yet a detail in Boeing’s alert — mention of a system on the MAX’s LEAP engine the pilots hadn’t known about — caused concern among some pilots.
“…mention of a system…the pilots hadn’t known about”
Mmhh…where have we heard that before…? 🤔
—–
“Most scrutinized plane in history”
1:48:36 video
LIVE: My subcommittee hears testimony from Boeing CEO Dave Calhoun. Boeing’s broken safety culture continues to prioritize profits, push limits, & disregards its workers. This is a culture that desperately needs to be repaired.
https://x.com/SenBlumenthal/status/1803126846101320130
More evidence of a COMPLETE disconnect from reality at McB:
“Boeing CEO David Calhoun says he’s ‘proud’ of the company’s safety record”
“”You are eliminating safety procedures. You are sticking it to your employees. You are cutting back jobs because you’re trying to squeeze every piece of profit you can out of this company,” Hawley said, per a clip from the hearing uploaded onto YouTube. “You’re strip-mining it. You’re strip-mining Boeing.”
“Sen. Hawley also mentioned Calhoun’s nearly $33 million payday for last year and asked the CEO why he still has not resigned.
“”Senator, I’m sticking this through. I’m proud of having taken the job. I’m proud of our safety record. And I am very proud of our Boeing people,” Calhoun said.
“”You’re proud of the safety record?” Sen. Hawley interrupted.
“”I am proud of every action we’ve taken,” Calhoun said.
“”Frankly, sir, I think it’s a travesty that you’re still in your job,” Sen. Hawley responded.”
https://www.businessinsider.com/boeing-ceo-david-calhoun-proud-of-safety-record-senate-hearing-2024-6
“Don’t admit to anything that may come back to bite you in court”
– Boeing lawyers prepping Calhoun
Boeing 737-800 lands safely in New Zealand after a fire shuts down an engine
777-9 N779XX departing Paine Field on a functional check flight.
https://x.com/mattcawby/status/1803275430088286251
First flight since April 1st.
Thanks to TransWorld and Pedro going off topic and violating reader comment rules, comments are now closed.
Hamilton
My apologiesT to all.
As always, there are many strings to a bow:
https://www.reuters.com/business/aerospace-defense/market-conditions-drive-international-airlines-away-brazil-airbus-says-2024-06-17/
RIO DE JANEIRO, June 17 (Reuters) – Complicated market conditions have prevented foreign airlines from launching local operations in Brazil, planemaker Airbus’ (AIR.PA), opens new tab head in the country told Reuters.
Airbus executive Gilberto Peralta said in an interview last week that the reluctance from international airlines to enter Brazil was mainly due to judicial uncertainty, citing a high number of legal actions taken by Brazilian customers against airlines, as well as high fuel prices.
“Capital barriers are gone, a foreigner could come and set up a company in Brazil, but they don’t… It’s a lot of trouble,” he said.
Late last year, airline lobby group IATA had urged state-run oil company Petrobras (PETR4.SA), opens new tab to reduce fuel costs, calling kerosene prices in the South American nation “excessively high.”
Exclusive-Boeing nearing deal with supplier Spirit Aero after months of talks, sources say
“The exact timing of the deal is unclear, but the sources said it could come within days or weeks, barring last-minute snags.”
“Airbus, which has been widely seen as the main stumbling block to a deal, is seeing “good progress” in talks with Spirit, a source familiar with the matter said. A second source said a deal over Spirit’s Airbus-related assets was more likely than not before Airbus’ mid-year earnings in July.”
https://finance.yahoo.com/news/exclusive-boeing-nearing-deal-supplier-211833576.html
I suspect that Chinese regulators will deliberately drag their feet approving any deal…they have the power to do that:
“Beijing had the authority to delay the Intel deal because China requires that its State Administration of Market Regulation approves mergers if one of the companies has significant business interest in the country.”
https://www.forbes.com/sites/johannacostigan/2023/08/17/china-blocks-intel-deal-spotlighting-us-chip-strategy-and-the-national-anxieties-driving-it/
A counterexample: US regulators are dragging their feet approving the merger of Korean Air and Asiana.
Welcome to the complicated world of M&A under WTO rules.
AW
Airbus A321XLR Arrival Could Disrupt Long-Haul Networks
“The A321XLR is reviving a niche created decades ago by the Boeing 757, currently the only narrowbody capable of flying true long-haul services.
Airbus asserts that the XLR will feature about 30% lower fuel burn than its predecessor, creating economic viability for thinner routes and new business models for long-haul travel”
seems the C929 program is coming along (Oct 2023)
Broetje won the bid for the C929 fuselage assembly line
“Boertje won the bid for the C929 fuselage wall panel assembly assembly line. ”
https://www.jeccomposites.com/news/spotted-by-jec/broetje-won-the-bid-for-the-c929-fuselage-assembly-line/
NASA, Boeing delay Starliner astronaut landing again, to study helium leaks and thruster issues
https://www.space.com/starliner-astronaut-mission-landing-delay-july-2024
Now into July