Boeing simply can’t afford a cash deal for Spirit AeroSystems

By Scott Hamilton


June 25, 2024, © Leeham News: News that Boeing over the weekend wanted to acquire Spirit AeroSystems through a stock rather than a cash transaction should surprise absolutely nobody.

Anyone following Boeing’s financial performance and weak balance sheet could see this one coming.

Boeing’s financial condition is a mess. Frankly, it’s unfathomable that the credit agencies still rate Boeing as investment grade, albeit at the lowest level.

Boeing’s production rate is a mess and so is its quality control. There is no end in sight. There is not assurance when certifications of the 737-7, 737-10 and 779-9 will occur. Boeing apparently shifted engineers from its X-66A Truss Brace Wing project these programs, things are so bad. This shifts development of a new airplane to the right by at least two years.

When it comes to reacquiring Spirit, Boeing simply can’t afford to pay cash for the company, which at the close of the stock market yesterday had a market cap of $3.8bn+. Essentially, in our view, it’s the same reason Boeing walked away from the Embraer joint venture in April 2020: it could not afford the $4.5bn cash price tag. (The decision by an arbitrator of whether Boeing’s walk was justified is expected within the coming weeks or months.)

Boeing can’t afford to buy Spirit. We’re not sure Boeing can even afford to acquire Spirit in a stock swap. The  money required to bring Spirit into shape is unknown, perhaps even to Boeing.

This is a mess that keeps on giving.

Leeham shifting locations

Leeham Co LLC, our consulting business, and Leeham News, is in the process of relocating from Bainbridge Island (WA) to Wheaton (IL). We are relocating for personal and family reasons. Our access is limited until July 9, at which time we expect our new office to be fully functional. Emails remain the same. Our landline telephone number will eventually be discontinued. Our number of 206-819-9600 is the new telephone number.

Scott Hamilton will have limited accessibility and availability until July 9.

385 Comments on “Boeing simply can’t afford a cash deal for Spirit AeroSystems

  1. No surprises here.
    Maybe the plan is to sell certain Spirit divisions to AB (which does have cash), and then let the rest of the US Spirit divisions go bankrupt…after which BA can acquire them for a dollar?

    But, even then, this whole plan has to be greenlighted by regulators in various countries, and that will likely be a (very) protracted process…

    For those who missed it last week, here’s an AirInsight link to the X-66A story:

    Of course, with the ongoing Starliner debacle, it’s not inconceivable that NASA told BA to find a TBW partner elsewhere…

    • So you think Airbus should, in effect, subsidise Spirit’s reintegration into BCA?

      And how does BCA not sink if Spirit sinks? After all BCA need the 737 at sufficiently high rates to get the blood flowing to survive, which is also what Spirit needs.

      Rather than an outright buy of parts of Spirit, Airbus could invest in Spirit at a distressed valuation, get QC fixed and stabilise the business and so profit from fixing its own supply issues and also profit from fixing BCA’s supply issues.

      Meanwhile, Boeing should sell off something, be it divisions, large parts of, or simply individual lines, and use the cash to fix the root/rot, the QC. Before it is too late.

      • Who made any mention of the concept of “should”?

        Why would Airbus pump money into Spirit so as to fix BA’s self-inflicted woes?
        Whether before or after a Spirit bankruptcy, AB only needs to cherrypick the parts that it itself needs.

        The Spirit divisions in the UK are already assuming that they’ll be falling into AB’s hands…the unions there are vigorously distancing themselves from any notion of BA involvement.

        • I read somewhere that Airbus is bargaining for a doury to take Sprits Belfast plant as its loss making

          • BA doesn’t have any money for a dowry — so, perhaps the UK government will have to foot the bill?
            Under the guise of “preservation of employment”, etc…

          • Belfast should count on Airbus moving the wings and tooling to Dassault wing factory if there is no agreement with Spirit and Belfast goes bankrupt unless the UK government steps in to save the plant.

          • Since this plant is losing money, AB may ask money to take It, instead of paying.

        • Either BA pays the dowry or they can pay for the losses.Also they have to get it past competition authorities if they keep it
          There is obviously some pondering about what to do with the A220 at Airbus already,I don’t think they like the producibility of the wings
          I really don’t know why the British government needs to cough up

        • Poor Boing!

          “Boeing is on pace to burn through about $8 billion in cash during the first half of 2024 as it slows work in its factory to retrain mechanics and address quality lapses.”

          • …another BA bond offering coming soon…?

          • At what credit rating??
            They can’t add more debt before they can prove their future cash flow, but if their cash flow improves, they have less need for debt. Debtors dilemma.

          • @Abalone

            They already had a ($3.9) FCF in Q1, so an $8 billion figure for the first half would imply another ~$4+ billion for Q2.

            Cash and cash equivalents $6,914
            Short-term and other investments 615

            At the end of Q1 and they took on another $10 billion, so add about $6 billion to the Q1 amounts.

            LTD goes from :

            Long-term debt 46,877 to ~$57 billion.

            Net debt position is in the $44.5 billion range. Up goes the interest expense, again…

        • Whatever the outcome to Boeing.

          Airbus needs to save guard its supplier ecology.
          ( I am a bit surprised that Airbus shares react “softer”
          to released information than Boeing’s.)

    • Try Airbus? They should have somewhere a lot of data regarding TBW from back when Hurel Dubois built their aircraft which operated successfully for years!

      • Not sure that NASA knows much about Hurel Dubois — after all, that was “over there in the old world”, so it couldn’t possibly be of any relevance, right? 👀

        Re-inventing the wheel.

        • Actually, he didn’t really invent a true truss braced wing. The airfoil profiles weren’t the same, and the truss was as much for strength to stiffen the high wing that anything else. A true TBW will use the truss as a lifting surface as well as a structural member. It certainly would look like a TBW, but was it? No, not really. We may be splitting hairs on what the precise definition is, I suppose.

          • Agreed. Braced wings are a long standing method.

            Long thin wings have long been the provenience of Gliders.

            Bringing a Jet airfoil, with the Truss as a means to achieve that to save major weight to get that length is new.

        • “after all, that was “over there in the [new] world”, so it couldn’t possibly be of any relevance,”

          Thats ewactly what was said in France when the news of the Wright Bros first controlled powered flight came through.
          cant possibly be true the French sages & media said , this is what we are world class at The photos are faked they said !
          So the Wright Bros took their plane to France to demonstrate in person

          your hubris comments is the same as France in 1908

          • It remains to be seen whether this X-66A TBW is another boondoggle from BA.

  2. Not surprised. Pretty sure in the UK Boeing would likely be defined as trading whilst insolvent as its liabilities exceed its assets. This would be noted in the accounts as a minimum by the auditors as concerns where the accounts represent a ongoing business.

    “When a company becomes insolvent, the directors must act in the best interests of the company’s creditors and minimise their losses. If you continue to trade an insolvent company when it’s no longer viable and incur further debts as a result, you could be on the receiving end of a wrongful trading claim.”

    • I’m pretty sure Duke is right.

      Insolvency is a state of financial distress in which a business or person is unable to pay their bills.

      Boeing can pay their bills, as they just borrowed another $10 billion to do so.

      • How much FCF is created out of thin air by putting off supplier payments further and further down the road?

        Persistent losses for last four years and current quagmire don’t lend me such confidence.

        • Easily answered:

          Accounts payable $11,616
          Accrued liabilities 21,607

          Along with another liability:

          Advances and progress billings 58,972

          All having to be re-paid with either cash or product.


          ‘Persistent losses for last four years and current quagmire don’t lend me such confidence.’

          That isn’t the scary part. This is:

          Commercial Airplanes Unit Cost vs. Program
          Segment Information – Earnings from Operations
          Boeing Commercial Airplanes
          (Dollars in millions)

          2024 1Q24
          Commercial Airplanes – Program Accounting (1,143)
          Commercial Airplanes – Unit Cost Accounting * (1,644)


          Commercial Airplanes – Program Accounting (1,635)
          Commercial Airplanes – Unit Cost Accounting * (4,459)

          Boeing can declare pretty much anything it wants as a margin and pile the rest into Inventory. But they’re still declaring less of a loss, than what it is actually costing them to build the darn things.

          It really gets funny when BA tries to announce a profit in Q4/2023 of $41 million, based on Program Accounting. But during the same quarter, on a unit cost basis, they lost $521 million.

          Doesn’t anyone ask Brian West about any of this?

  3. Some interesting extra info:

    “(Reuters) -Boeing has offered to acquire Spirit AeroSystems Holdings in a deal funded mostly by stock that values its key supplier at about $35 per share, Bloomberg News reported on Monday, citing people familiar with the matter.

    “This offer represents a premium of nearly 6% over Spirit’s stock closing price of $33.07 on Monday and a 22.4% upside to its closing price on Feb. 29, the day before Boeing’s takeover talks became public.”

    Presumably BA is acquiring Spirit as a whole, with an immediate divestment of certain parts to Airbus if the deal is consummated by regulators?
    And if such consummation is slow, what then? Bankruptcy for Spirit?

    • Why not bankruptcy for Spirit? It would allow Boeing and Airbus to pick up only interesting assets for pennies.

      • Bankruptcy would probably be a legal nightmare: for example, existing contracts would become void, BA/AB would have to horse-deal with a court-appointed Receiver, the Brits and Moroccans might nationalize their bits of Spirit, etc. And while all that was going on, production would fall still.

        • Not to mention that there might be a 3rd party (read: vulture) willing to make an offer, to pick up the carcass on the cheap.

          Remember; everyone and his uncle knows that Boeing needs to acquire Spirit. They are over a barrel. If someone thinks that they can make a buck by outbidding Boeing’s pennies, then selling the parts to BA & AB…they just might.

    • Not happening. You don’t move the Skills for Wing production like that.

      Moving equipment is bad in a major disruption and even if you could move the whole workforce to the Brit Wing Factory, you loose people.

      Move the whole thing (in theory) and its still massive disruption.

      • And then comes the cost. Airbus does not like what they are paying for wings though they knew what they had contract wise going in.

        So spend 500 million (or more) to move to a new location with the reality of the above?

        Ain’t happening

      • Are the people there fearful of an Airbus takeover?
        Any talk of cash injections by the UK government, to act as deal sweeteners?

  4. The Boeing upper management can’t give a straight and honest answer. They evade even the most simple questions. They try and hide and lie their way out of situations. They hid the entire MCAS system from Airlines, Pilots, even the FAA. And it seems they can’t operate open and honestly. They aren’t listening to whistleblowers. Their own workers want to talk directly to the FAA and they won’t let them. The entire culture is borderline criminal. The recent 737 door panel story is the same senario. They won’t cooperate with the NTSB with even saying who did the work. The records were destroyed or weren’t even there to begin with. How can you give any trust to a company like this? How can you believe anything they say?

    • Borderline criminal? Two crashes with hundreds of casualties, doors blowing out of new planes, hundreds of millions of dollars paid out over the last two decades in bonuses, stock manipulation. The guns are still smoking… That’s right – “It’s only business…”

      • Addendum: United States Department of Justice prosecutors recommend criminal charges against Boeing. Final decision on this will be reached next month.

        • Betcha nothing happens. More theatre, IMO (NYT already reported they won’t be prosecuted). I’d love to be wrong.

      • Borderline criminal ?

        Thats the same judgement of the Paris court which found negligence from Airbus – 6 counts guilty – over the Air France A330 crash in the South Atlantic ( Air France also found negligent)
        They both escaped other charges of criminal manslaughter by a narrow margin
        228 passengers and crew lost their lives because of corporate negligence said the court

        • Found negligent?? Source? The same article with a headline that says “court acquits Air France, Airbus over Rio disaster”??

          “… there was not a sufficiently strong causal link between these failings and the accident to prove that an offence had been committed.”

  5. Speaking of Boeing… I’d like to know if the MCAS system activated or didn’t during this recent go-around in Hawaii.
    But, unless you are able to read the black box tapes,
    I don’t think there is any way to know? The 737-MAX was in a maximum climb with possibly a slight turn to the missed approach waypoint. And then the pilot flying
    pushed the nose down for 400 feet? Why? Was the plane entering the ‘escape maneuver’ that MCAS is supposed to adapt for? DID MCAS ACTIVATE? Was it supposed to
    activate and didn’t? Obviously, the 737-MAX engines are twice as powerful as the original engines with basically the same airframe. Should full power be used on
    a 737-MAX during a go-around, or does it cause some sort of instability in pitch that is difficult to control with limited elevator authority, in that unique situation?
    Why did the pilot flying pitch down during the go-around, should MCAS have activated, and did it? I think there should be some warning light indication or other notification
    to the flight crew that MCAS has activated, in order to separate it from the normal speed trim system commands.

    • The MAX, NG and Classic are bigger aircraft with more pax.

      Trying to create a controversy where bad piloting is the cause does not contribute anything.

      MCAS 2.0 has been extensively tested and if it activated, it did the same thing as Speed Trim does, it maintains the response evenly.

      • I’m hoping an NTSB report comes out of this, but, I doubt it. Is anyone able to tell if MCAS 2.0 activated or should have activated in this situation? Is there any light or other signal to verify MCAS 2.0 working or not? If not, then it’s a hidden system from the pilots. I don’t like that.
        I think Boeing aircraft should be tested by Airbus or another company. And Airbus tested by Boeing etc. Or some truely independant outfit do any aircraft testing. Having the same company that builds and sells the aircraft then test it, is fraught with conflict. The Boeing 737-MAX is the ultimate example. The FAA is just a division of Boeing currently. Saying MCAS 2.0 has been extensively tested is like Pfizer saying their experimental mRNA is “safe and effective”. Are they going to say something different?

        • “I think Boeing aircraft should be tested by Airbus or another company. And Airbus tested by Boeing etc.”

          I don’t know about Airbus.

          But Boeing certainly would use that for entangling and “deep spying” the competitors product.
          We already see this in an “indirected” way via the FAA.

          There is no neutral ground in US interaction with others.
          All and sundry has been weaponized.

  6. the ultimate bankruptcy of Boeing is the end goal of the Neutron Jack Cash Extraction Shareholder Value management school.

    this should be a surprise to no one.

    The next step is likely “taking Boeing private” divesting anything they can get money for and then selling the name to AVIC for them to slap on their 919.

  7. This is what happens when a company ceases to be a manufacturer of tangible goods and simply becomes an entity for financial manipulation. Thank you Jack Welch for bringing shareholder value & a completely destroyed economic outlook for a premiere American company. This is the future in a world where money and profits are all that matter. I personally will not set foot on a Boeing airframe.

  8. Boeing may have lacked the cash to consummate the Embraer deal, but there was a more basic reason: the market cap of Embraer fell dramatically with the onset of COVID. Prior to COVID, Boeing had negotiated $4 billion for Embraer’s commercial operations. After COVID hit, the market value of Embraer plunged to $1.5 billion. You do the math.

    • Boeing was deciding if they wanted a government hand out and buying Embraer meant that they would have to cut their dividend and share buy back.

      That was against all that Calhoun and his like stand for.

      A well managed company would have bought Embraer if the original goal had merit. You judge a company on how it acts during a down turn and Boeing failed (borrowing 13 billion as I recall to pay the dividend when they were loosing money hand over fist)

  9. Should we expect Calhoun and most of the Bored to start a ‘ go fund US ‘ account?

  10. Boeing-gate continues….
    Worth repeating that from about 2008 to 2018 Boeing management gave $64b to the shareholders. Perhaps keeping a bit of that cash would have been a good idea?

    • It was an imitated descent after the pressurization issue occurred. Pressurization issues happen to all kinds of aircraft and have happened many times. But when they do happen you have to descend quickly.

      I understand yes you all hate Boeing but please let us separate what they’re rightly to blame for and what is actually just commonplace in this industry.

      • Tell that to the Damage Control team over at the McB PR department.

        Luckily, in this particular case, foreign pilots can be blamed — unlike the recent “all-American” door blowout, Dutch Roll and anomalous Hawaii landing issues.
        Oh yeah: let’s not forget the anomalous cabin smoke incidents (2x) resulting from large bird ingestion.
        And, of course, the particular propensity for 787 windscreens to crack…several recent incidents of that.

        All standard stuff, of course.

        • Not everything that happens to a Boeing aircraft is Boeings faultt.

          I hope you’re educated enough to understand that

          • Thank you Opus.

            I know the press will go nuts over any and all. That does not mean knowledge people have to jump in on the mass hysteria that has developed.

  11. It’s been a very quick trip from “this transaction will be completed quickly” to “Boeing can’t afford it”. Why would Spirit shareholders accept Boeing’s problematic stock, in any case?

    • this all goes back to Boeing’s “Partnership for Poverty” program And now Boeing pays the price. Maybe a third party will come in buy a major part of Boeing (and get rid of the existing BOD) to infuse it with cash.

      Interesting only a few years ago the talk was about launching a new aircraft, it seems like Boeing going to life support mode

    • there was article back a month or so about the billions of dollars needed to update mfg. equipment and facilities to make Spirit more efficient. Where is that money going to come from if Boeing can’t afford to buy it outright with cash

      Airbus can buy the A220 wing plant and invest into it to raise the production rate to 14 a month….probably good thing that Spirit Aero is being sold off in pieces

  12. I can’t believe how tiny these numbers must seem to people like Musk and Gates.Putler wouldn’t even notice if someone bought Boeing and Rolls Royce using his personal bank account Boeing is a massive and strategically vital company.

    • Is Boeing still “strategically vital”…with emphasis on “vital”?
      Shift out a handful of old programs to LM/NG — for continuity of spare parts — and all the “vital” stuff is gone.
      What’s then left is just an imploded shell.

      • so play out the scenario

        Boeing buys Spirit for stock, Boeing BOD members remain the same, Pope is the new Boeing CEO (so the board can control her)

        Airline carriers don’t like the choice of Pope for CEO, major players (Emirates…) start moving to purchasing more Airbus aircraft, China doesn’t buy more Boeing aircraft, Boeing can’t back to 50 737 a month rate for 5 years, no new aircraft launch…… nothing really changes.

      • Er, yeah, BCA is strategically important to the USA.

        Aviation is a massive part of the transportation sector in the USA, and Boeing is a big part of that. If the US became dependent on overseas manufacturers for its airborne transportation – say, China’s Comac – then a big slice of economic activity in the US is beholden to Chinese control. Does anyone in the USA want that?

        Being beholden to Airbus would be preferable, or Embraer, but Airbus is already at full stretch and despite rumours Embraer doesn’t have the products. If it is a “Comac or nothing” choice for airlines like Southwest, then Comac it’ll have to be, especially if they do get certified.

        • (1) You’ve precisely articulated the reason why China will prioritize making a success of COMAC — in the age of deglobalization, no country wants to be overly dependent on another.

          (2) Just because the US might want a commercial aircraft manufacturer doesn’t mean that it has to be called ” Boeing”: LM (for example) could acquire BCA in the event of a bankruptcy.

  13. Good luck with the move, my friend. We’ll miss you out here.

  14. I’m surprised as well that the credit agencies haven’t already downgraded Boeings debt to junk. It’s already trading at junk yields. I worked in mortgage banking during the global financial crisis. I saw mortgage backed securities go from AA to D default in a matter of weeks. The agencies were so far behind the curve. Wonder if Boeings ratings are as well.

    • Possibly it’s the “Boeing is too big to fail” fantasy. There’s a lot of people who have the assumption that the US gov is somehow going to intervene, shower them with taxt payer money and make it all OK again.

      Given that it’s Boeing’s overseas sales that are criticial, and those are subject to the moods of the overseas regulators and not the US government / FAA, Boeing’s current stockholders really, really need the company to start impressing abroad. All this bad news filtering out of the USA is not exactly encouraging foreign regulators.

      • If Boeing stockholders cared they would not have voted to have Calhoun on the board, against recommendations so at least 51% voted to do so.

        Boeing needs to start dumping business segments Satellites would be one, the Capsule business another. Munitions is another one.

        Focus it down to Aviation on the Defense side (KC-46A, T-7A, E-7, P-8 , F-15EX etc). Some of those programs are in good shape and KC-46A and T-7A will pay returns down the road.

        • I doubt that KC-46 may some day return money. Boeing offered the aircraft for a far to low price. With the Pacific more of interest for the US a bigger tanker would be a nice to have.

          • I know this veers off a bit and the points are valid enough.

            Boeing will get another order for KC-46A, and at the rate the USAF manages its fleets, another 150 or so.

            Its not the range that is the issue, its the long range missiles being deployed that can hit a tanker at long ranges.

            Ergo, the USAF wants stealth tanker and that means smaller (radar cross section being what it is, bigger is always larger). You get a smaller off load of course.

            Probably what will happen is a piggy back mission where a A330MRT or KC-46A gets a package into an area and then tops up the lot of if they can make it work, a stealth tanker gets them closer.

            There are still a lot of tanker missions that do not need stealth as well. So Boeing sells a bunch more and they have the support contracts.

            No way I can say that Boeing will make money for sure but I believe so. And there are some smaller orders that will come through. Some have been delivered and clearly the USAF is willing to let slots go to those sales.

      • The Feds are intruding on this by having the Justice Department offer the 200 Million dollar plea deal…

  15. Fascinating:
    “Boeing Will Not Bring 737 MAX Or 777X Test Aircraft To Farnborough Airshow 2024”

    “Boeing’s aircraft will have a minimal presence at the static display area at the upcoming Farnborough International Airshow, with the company’s products being represented by Qatar Airways and the UK Royal Air Force (RAF) at the event. That will be in contrast with its main competitor, Airbus, which will bring several aircraft to the trade show.”

    “The Farnborough International Airshow detailed that Boeing will not have any aircraft on display at the trade event, with only Qatar Airways bringing its Boeing 787-9 on static display during the four-day event between July 22 and July 26, 2024. Meanwhile, the RAF has scheduled two flying displays with its Boeing P-8 Poseidon, which are scheduled to happen on July 22 and July 24.”

    Not even trying any more…

    • How many times we are reminded how many the 777-9 has sold? Huh.

      The Air Current:
      “Boeing will not bring any of its commercial aircraft currently under development to next month’s Farnborough air show, the company confirmed. The 777-9, 737 Max 7 and 10 will not attend the biennial summer air show, as Boeing opts to focus its resources on completing those protracted development programs.”

    • This is the second airshow in a row where Boeing is doing that. The Singapore Airshow last February was the same, with USAF and Singapore Airforce showing Boeing aircraft and no live air display.
      To me it is a bad message where Boeing openly admits to their potential customers that they are in big trouble.

  16. “Airbus eyes operations at four Spirit Aero plants, sources say”

    “As expected, the two main plants involved in the transfer to Airbus are Kinston, North Carolina, where Spirit makes a crucial part of the A350 fuselage known as Section 15, and a historic plant in Northern Ireland that makes carbon wings for the A220.

    “Additionally, Airbus is expected to absorb activities at a plant in the aerospace cluster in Casablanca, Morocco, where Spirit does some fuselage work for the A220 and produces some engine nacelles or housings for the A320, they said.

    “Also expected to be involved is Spirit’s plant in Saint-Nazaire in western France, which receives the A350 sections built in Kinston and partially assembles them to be sent on to Airbus in Toulouse where the wide-body jets are made.”

  17. Thinking like Brian West (BW) for a moment, there are a couple ways to do this deal. But, doing the deal and fixing the issues at Stearman – Commercial (oops, the Wichita Division – commercial side; opps Spirit) is something else entirely. Changing the equity alignment won’t address that.

    One BW method that would work is to come to an agreement on some amount of Boeing stock based on an expectation that the additional shares would have at least a little bit of a dilution impact on the price of the shares as traded on NYSE. That is probably the easiest method.

    Another method would be to leverage the bond fund scam and do a special issue of Boeing bonds with an up-front syndication agreement to stuff them into some funds. And of the big fund syndication houses could do this (Fidelity, T. Rowe, Vanguard, etc.). So money is not the obstacle here. There is plenty of insanity in the equity markets to cover a deal of this size.

    Now fixing the issues in Wichita is another story. The whole logic behind spinning it out in the first place was to get better utilization of Wichita’s assets, which included their talent base. There were two key assumptions on the part of the people who understood the dynamics and believed it could be a winner, which BTW, included me. One was they had to retain their number one asset, which was their people. The other was that they would be more open to growing their supplier business by selling more stuff to other air frame companies, including AB.

    The reason that the deal went south was also twofold. One was that like the rest of Boeing, they made war on their human talent base in the face of the enormous challenge they were already facing from the tech industry and shrinking supply coming out of the schools, which was also shifting toward supplying tech.

    The other was that they, like the rest of Boeing, reverted to a 19th century command and control management culture and did not treat any of their product lines as components in virtual enterprises. Boeing helped with this one by erecting barriers to information flow, and stupid Boeing IT people who seem to never get off their duffs and actually measure the impact of the systems they build, but instead, only develop to requirements documents so they can blame their customers for any shortcomings. So of course the whole thing went south.

    The reality is that the equity ownership and process management systems have absolutely nothing to do with each other. This deal is very much like rearranging the deck chairs on the Titanic.

    BTW, do I hear any volunteers for a ride up to the ISS on a Dragon capsule and then return on the Starliner? I think this would be a great space tourism opportunity for messers Calhoun, Kelner, Muilenburg, McNerney, Stonecipher, and Condit. I would even chip in to buy their tickets.

    • @RTF
      excellent comment. Having once worked for Boeing for almost 20 years I can share the sentiments about the brain drain. Loved the last part about the Starliner… good grief that’s got to be very serious and they are keeping tight mouthed about it.

      But I digress. What’s happening at Boeing today is simply failed leadership since Condit screwed the pooch on the buyout of McD! We former employees all witnessed it over the years. People put in charge with absolutely no accountability or qualifications and this includes Calhoun and now it’s likely successor Pope. (I was hoping it would be Pat Shanahan). You’re right, rearranging the deck chairs on the Titanic.

      Saw this today:

      Goes to show just how bad things are if not really doing a sales effort for this huge air show.

      When I retired in late 2020 I thought Boeing would get their act together. Failure used to not be an option…. But it sure is now.

    • I think a fundamental aspect is missed in the thoughts above.

      When you have two companies that do the exact same thing, both have to make a profit to exist. There is not cost savings.

      I have seen that played out repeatedly with companies outsourcing what should be internal work. The sub company has to do it cheaper and that means lower pay, lower benefits and people will move on as soon as they can.

      Then another company comes along and underbids the first one. More cuts.

      Its a race to the bottom until the failure occurs and they go bankrupt and the original (in this case Boeing) buys the operation out.

      That is how Boeing got Charleston. It was not planned, but the contractor was not going to go broke putting money into a loosing operation and Boeing bought out Chance Vought, then Leonardo and then decided to make a clean sweep in union busting and built a plant to assemble those parts that were on site.

    • I don’t often disagree with you TransWorld, and I suspect that even in this case if were to sit down to an extended discussion we would discover that our differences are miniscule at most, and maybe non-existent. I think our experience causes us to focus on different things.

      As for the BSC mess, I spent some time in both plants there (the Vought one and the JV between Vought and Alenia called Global Aeronautica). All of their problems were self imposed.

      It’s kind of amazing that Drucker’s book on “The Concept of the Corporation” was published in 1946 and McGregor’s “The Human Side of Enterprise” came out in 1960. William Ouchi’s “Theory z” in 1981. These three cover basically every problem that Boeing, Spirit, Vought, Alenia, and GA ever created for themselves and continue to do so. None of this stuff is new. These folks just refuse to accept the notion that their managerial approaches are THE problem.

      As for cost management, I’m a very strong advocate of ABC (activity based costing) and at least taking both an ABC and traditional cost accounting look at an activity. Usually, the notion that cost is a function of equity division is just not borne out by the data. In any business, the cost of a process should include a reasonable return on capital, and total return should be a reasonable percentage of total cost. So how the ownership of equity is sliced and diced should have zero impact on the gross totals.

      Usually, the single biggest driver of waste costs is a lack of trust, and there are quite a few ways in which trust issues can creep into a process. Equity ownership boundaries are certainly one way, especially if the wrong incentives are in place, but it doesn’t have to be that way.

      Mulally’s “Working Together” schtick, which has continuously evolved over the past several decades, does a pretty good job of identifying a dealing with trust issues. By insisting on real meaningful transparency from top to bottom, the trust issues really do begin to dissipate. But, when the top leadership is providing a perfect model of greed in their everyday behavior, then effectively they are telling everyone that trust is out and everyone should think of their own needs first and ignore the overall system and processes.

      This year, Boeing’s trust and resulting cost problems start with the figure $32.7 million. As long as that number is that far out of being reasonable (It’s at least $27 million out of whack, and arguably the whole $32.7 is a problem), the company has zero chance of managing its costs, regardless of how hard they try, or who owns what.

      • ‘But, when the top leadership is providing a perfect model of greed in their everyday behavior, then effectively they are telling everyone that trust is out and everyone should think of their own needs first and ignore the overall system and processes.’

        This passage sums up everything wrong that is going on at BA.

        Employees are in CYA mode. Do what the boss says, make sure you have proof he told you to do it like that, get your paycheck and move on. Being a whistleblower, even with the best intentions of trying to improve the quality of the product going out the door – is a losing proposition.

        Keep your mouth shut, be prepared to say “I dunno” a bunch of times and just ship it.

        • I worked in a toxic operation. And what Frank P says is spot on.

          The good news was any damage by others was limited to the facility and never got to the level of being being injured or killed.

          I could at least sleep at night (mostly). There were life safety aspects they ignored. Fortunate it was the so rare kind that it never occurred.

          But you could whistle blow all you wanted, you just lost your job and the clown show went on.

          The hard lesson was that any quality for a group or a business came down from the top. You can’t fix BCA at the BCA level.

          • >The hard lesson was that any quality
            >for a group or a business came down
            >from the top.

            Thing is, it’s a lesson that has been taught in Systems Engineering for nearly 40 years. Any manager / chairman worth their salt should at least read up on why Toyota are so good, even if they’re not in the car business.

            >You can’t fix BCA at the BCA level.

            Total agreement from me on that! It requires a complete rethink of what the company is all about, at the very top of the company, and what they personally are there to do. If they keep focusing on shareholders first, they’re doing it wrong.

            That’s probably by an extension an indicment against the corporate environment in the USA. You can’t do quality manufacturing there anymore, if you have publicly traded shares.

      • RTF:

        I think you are spot on with agreement as well as different focus based on our work history.

        My company was a prime example of what Spirit has become (leaving Boeing out of that aspect for now). You keep cutting trying to make money on something that only cost cuts will do and in any business, those cost cuts will at best get some good parts and in desperate business like Spirit, we all see what comes out of (or was) Wichita.

        My company went down the drain about 4 years after I quit. Ops were taken back in house.

        I had a brother who shifted over to another company, same work he was doing, much higher pay. Of course then someone looked at it and it was, we contracted that out why?

        The company refrain was its a competitive business, ie, they cut our throats so the managers could eek out being employed. The company actually was doing ok, none of it filtered down to where the work was being done. But each time contract came up they cut it again.

        Boeing has no where to go but Spirit. Spirit held all the cards but caved each time. Now we see Boeing has dumped a bunch of money into them.

        And then Spirit ran out and got the A220 Wings, so add onto the high cost structure to start with, what they paid and not making any money and its a ?????????

        I don’t contend paying bad workers more makes them good workers. So you need to offer benefits that attract good workers.

        I think we fully agree it starts at the top but that is the first step to fixing, the rest is a lot of work to fix the mess.

        In the meantime other issues are cropping up. Phew

        What I do know is when you never see the top people in your work place you know they don’t care and its a huge hit on morale and focus.

    • The US aerospace industry has a talent problem as young engineers can do financial analysis instead of stress analysis and get paid twice. A bit similar for factory floor as you need to automate and have much less staff to reach 5-7% of build cost is manhrs. As the world learns to produce most old US products get made abroad, from lightbulbs to cars/ships/appliances/electronics. The US must find new products or do the gritty job of improving productivity on old products. Some people see parallels between GM and Boeing.

    • And the stock approach wins, which is a good thing in my book, since bonds are much more difficult to deal with in a recapitalization exercise.

      • Yep, all those shares moldering away in the safe, pull them out and do some good for Boeing with them!

  18. If someone could find a way of clawing back the severance paid to the various CEOs and other top officers, then Boeing would have more than enough to pay for Spirit.

    • Oddly that is not true.

      Say its 50 million a year, went on for 20 years. That is a billion.

      So, while not accurate in the sense of exact numbers, they ruined a 100 sp,e billion dollar comapny for basically peanuts (not that I would not love to have those peanuts)

      The share buy backs is worse as is the last dividend they borrowed to pay.

  19. Nothing to see here, no problem folks, Boeing bought back $39 billion worth of stock in the last 10 years, that’s worth way more than Spirit. Now where did we put those share certificates……

  20. So, Leeham Co LLC and Leeham News are moving their headquarters from Seattle to Chicago? I don’t know why but this sounds familiar. It also tells us how bad the situation has become in Seattle…

    More seriously, I don’t think the situation is as bad as it looks right now and that explains why Boeing doesn’t have junk status yet and analysts think Boeing has a promising future despite the seriousness of the difficulties it is facing today.

    My view on this is twofold:

    Primo, the disappearance of Boeing is simply unthinkable. It just won’t happen. For there are only two Big Players in commercial aviation and the world needs them both, and at the moment no one else can take the place of Boeing.

    Secundo, eventually planes will be certified, no matter how long it takes to get there; and production will also return to normal levels, no matter how long it takes to get there, and when this happens money will start flowing again.

    That being said, I do not exclude the possibility of a restructuring, or at least a complete reorganization of the company as we know it today. In the worse case scenario, which I actually view as the best possible outcome, is for Boeing to return home (like Scott is doing right now) and concentrate on commercial aviation, including manufacturing its own sub-assemblies, while divesting its Space and Military divisions.

    • For the most part I agree, but divisions divestment (selling) should be selective.

      There is a not of cross between Military Aviation and Commercial. So the Military Aircraft end should be kept (and some good stuff on the P-8 and E-7 is based off the 737 commercial product). KC-46A is an issue but long term it will pay off.

      Space is a given to dump. Its a stupid area for Boeing to be in and clearly theft don’t have the talent. Munitions is another area, it may pay but its not core and could be sold off for a gain.

    • Boeing will not disappear, even Boeing commercial will not disappear. But whether it’s market share is 60% (at merger in 1997), or 40% (as now), or 10% (as easily could happen if the Welch virus is not purged), is not going to force government intervention in the interest of national security.
      National security requires Boeing continue in the market space for defense, and perhaps a minimal footprint in commercial, but not more.
      If the Welchites are allowed to continue strip mining the company for cash, Boeing’s market share will dwindle to eventual irrelevance.

      • Kodak disappeared.
        Big, all-American name…gone.

        Same with PanAm and Xerox, for example.

        Spirit is on the brink of disappearing.

        Boeing’s defense units can be acquired by LM, NG and/or Raytheon — there’s no need for them to continue their activities under the Boeing name.

        In a way, Boeing is already dead…it just hasn’t been buried yet.

        • Boeing could be broken up: Defense to 3 or 4 going defense concerns; Space to 2 or 3 candidates; Same with Commercial believe it or not…

          • Absolutely.
            A far more likely scenario than many here (want to) realize.

            Chapter 11 –> bankuptcy –> divide up and sell off the remaining (semi-)viable portions.

          • A Ch. 11 would wipe out almost $57 billion deposits from airline customers 😬

  21. Elon should buy Boeing, take it private and save us all from this train wreck.

      • I doubt he would be at all interested. His vehicles don’t have nobs, switches etc. Not his style.

        Seriously, I suspect it would be an even bigger disaster, the successes of Space X notwithstanding.

    • Hes got not cash either . His compensation is in company stock which limits how he can sell it – and crash the price.
      Any cash he has goes to his Space X rockets and X social media

      For tax reasons hes only interested in technology stocks , as thats various right offs or deferments in capital gains when rein invested in similar

    • BA has a market cap of $108 billion. Elon had to borrow to buy and destroy twitter.

    • commercial aircraft development is not the place to beta test with the fielded product.

      you think MCAS was bad…. have you seen “Full Self Driving”? purely due to Elon’s belief that “since humans can drive with just their eyes, so can self driving cars” FSD development has stalled for 5 years.

      even the best cameras in existence can not compete with the human eye and the computer behind it in processing varying light, environment, weather, object ID and hazard analysis. predictive behavior modelling is something humans do intrinsically WRT the other cars on the road, the environment, the road itself, the weather…. FSD is just a glorified “if this, do that” lookup table.

      • Elon is countering all such arguments by turning to AI — which, of course, is just a new name for “machine learning”, which has been around for years.

        Up to now, AI has “enriched” our lives by facilitating the production of deepfake videos, and writing essays for cheating schoolkids — but, before you know it, it will become the Cup of Plenty for all humanity’s endeavours…

        It’s 1999 all over again.

  22. I hope the move goes smoothly and trouble free! Good luck from us all!

  23. It seems like at some point Boeing may need to be “reorganized” in a Chapter 11 bankruptcy. I am always surprised that Boeing’s stock market capitalization remains as high as it does ($107B at the close on 6/25, as much as Ford and GM combined, and they make real money).

    I claim no knowledge about this. I assume that if it came to that, the federal government would help out as they did with GM and Chrysler (now part of Stallantis (sp?) because of the importance of Boeing to the country.

    Any thoughts on this?

    • Dan:

      Its pretty simple. A company has to be bankrupt to get US intervention.

      Others can detail what it takes to do that, I don’t believe Boeing is close to meeting the requirements.

  24. I have to believe that a BA bankruptcy is plausible within the next 12 months. If the EIS of their Max7/10 and 777-9 does not move forward within that timeframe, they simply wont have the cash flow to sustain this development effort.

    The Max delivery rate of 20 / mo is untenable.

    I dont see a government bailout, but I do see where a goverment organized buyout from a cash-sustainable supplier is how Boeing returns to reality by shedding its legacy debt load.

    • Why should they go to bankruptcy?

      The market will not stop to finance them.

      They have about zig bn. in planes already sold.

      B787 is profitable now and a cash cow. Boeing has still plenty of planes standing around that customers want to have, and they pay on delivery.
      Same with the Max. 20 as a rate might not be great, but there are 5000 orders outstanding.

      The B777x is written off , the loss is in the books, and though it will have taken 12 years once they are done, there are almost 500 orders. Even if you distract Etihad, Cathay and unknown orders, it`s still 400 and Qatar, Emirates, LH, SIA, BA, ANA, they need the B779.

      Boeing will actually be better in about 1-2 years, once their production trouble is fixed and the B779 + Max 10 got cert.

      In the end, it`s still the 2nd largest plane maker, and right now there are only 2 other companies that can build these planes. Airbus and Comac.

      • ‘B787 is profitable now and a cash cow. ‘

        In what universe is this happening? Not this one…maybe an alternate timeline?

        From the Q1/2024 financials:

        ‘At March 31, 2024 and December 31, 2023, commercial aircraft programs inventory included the following amounts related to the 787 program: deferred production costs of $12,107 and $12,384, $1,606 and $1,764 of supplier advances, and $1,443 and $1,480 of unamortized tooling and other non-recurring costs. At March 31, 2024, $11,601 of 787 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders, and $1,949 is expected to be recovered from units included in the program accounting quantity that represent expected future orders. We expensed abnormal production costs of $80 and $379 during the three months ended March 31, 2024 and 2023.’

        787 Program

        ‘We are slowing near-term production to below 5 per month due to supply chain constraints, which are also impacting 2024 deliveries. As of March 31, 2024, we had approximately 40 aircraft in inventory that require rework which we expect to complete by the end of 2024. The inspections and rework costs on inventoried aircraft are accounted for as abnormal production costs, and we expensed $80 million in the three months ended March 31, 2024.’

        They’re still expensing abnormal production costs in Q1 and have some ~40 aircraft in storage that are costing them money.

        There is no ‘cash cow’ at Boeing. They are in Cash Burn mode. Just ask Brian West, the CFO.

      • Boeing is going to have a liquidity crisis with their current cash burn rate. They are unable to finance their operations without raising debt at this point. All it takes is a lack of confidence from Wall Street for that to go away

        • IIRC – they have an unused line of credit with some $10 billion of space on it. I think they got the most recent $10 billion selling debt.

          I could be wrong, but I don’t think they used ‘that’ credit card yet

          • $10B is 2.5 quarter’s worth of cashburn at the current rate, and it comes at a 7.25% interest rate (plus surcharge in the event of a ratings downgrade).

            That won’t hold the fort for long.

          • @Abalone

            The Bloomberg article says $8 billion for the year (not including the Spirit mess).

            They’re already halfway there, so the expectation is about another $4 billion this quarter, than a break even the rest of the way. (or it could be $3 billion burn this quarter, than $1 billion the next…you get the point)

            It’s not $4 billion a quarter, which would be $16 billion for the year.


            But yah, that $2.5+ billion wasted on debt servicing is going to continue, isn’t it? Call it $57 billion in LT & STD.

            At an average of 5% it’s $2.85 billion in annual Interest Expense.

            Every percentage point adds $570 million to that number.

            Q2 financials are going to be interesting to look at…

      • “Boeing will actually be better in about 1-2 years”

        This has been what Calhoun and CFO West have been saying for like the last three, four years. How much has been achieved? Persistent losses over the last four years, the inventory of 737 MAX that supposed to be cleared in 2021 & 2022 still need another year or two!! The failure to certify the 737 MAX 7 & 10 (up to now), not only BCA, BDS also has been losing money most of the time over last couple of years. The much touted about turnaround, when will it come??

        • How long did it take them to get into this mess? It’s always easier to destroy than build.

      • Koamopolit wrote
        In the end, it`s still the 2nd largest plane maker, and right now there are only 2 other companies that can build these planes. Airbus and Comac.

        Really??? Don’t tell that to those Brazillians at Embraer….. Also, your thinking that the 787 is profitable almost made rootbeer fly out my nose it is so laughable….Im sure Pedro’s man servant will chime in with the actual facts on this one

        • The 787 if built per cert makes money.

          The horrid cost is lost.

          So yea, the 787 would created cash, its so messed up its not.

          Huge amount of orders and space for more.

    • That’s not the way bankruptcy works. The debtors end up owning the assets and the shareholders are usually wiped out.

      • Yea that would be the sweet part.

        Anyone that can’t see the future deserves what they get and those that voted to keep Calhoun on the board even more so.

  25. As far as i know and understand,
    the European operations of Spirit is not profitable.

    They bought the factory in Ireland from Bomba and the Scotland one for BAE.
    The one in Prestwick builds mainly for Airbus, and the one in Ireland builds the A220 wings and some stuff for the A350.
    Tulsa also builds stuff for Airbus, and Dallas, as it was with Bomba before. And there`s some stuff in France which i guess is for Airbus too.

    So, Boeing wants their stuff in Kansas back, which they sold 20 years ago.
    Great, consultants, accountants and management earns nice on these deals.
    But Airbus shall now buy plants that are not core, loose money, to help out Boeing?

    What price should Airbus pay for that?

    And then Boeing thinks they can improve the quality at Wichtia?

    I guess we stay entertained.

    • But do the factories making Airbus parts have to be profitable if they become owned by Airbus? Surely, if they can make those parts to the specified price and not make a loss that’s all that Airbus needs? Or, in the modern world, does each individual part of a company have to be a profit centre?

      • Since the only customer for A220 wings is Airbus, the factory being profitable or not does not matter. If they take it over, then any ‘profit’ would be just moving money from one pocket to another. Airbus makes profit on selling planes, manufacturing parts (except for spares) will be always nothing more than a cost.

        • ‘If they take it over, then any ‘profit’ would be just moving money from one pocket to another.’

          As would any loss, which is where they are at now.

          Why would you pay a premium for a money losing operation that is going to cost you profits?

          Right now, Airbus get’s it’s wings at an agreed upon price. Bring the business in-house and you are increasing your expenses.

          Why would I do that?

    • Kosmopolit, in my other comments on the Spirit situation I made an explicit point that I was limiting those comments to the commercial side, which is the part that is in Spirit. The defense side was shut down, and the work was moved to OKC in a monster building that was once an aircraft assembly plant. It’s now chopped up and has several tenants, the largest of which is Navistar’s school bus operation. Anyway, this is significant with respect to Spirit.

      As a comment on some of Scott’s previous “Pontifications” I pointed out that the way engineering talent was distributed in the old Boeing, was that the highest paid engineers were mostly on the defense side, with a few in the advanced R&D organization. There is an internal process for lending people across the major internal organizational boundaries. It was called “B sheeting” before I retired. Anyway, those defense engineers are gone and not available to backstop issues in Spirit. Just to give you an idea as to how huge of an impact this was and is, the departure of the defense engineering team in Wichita (departure from Boeing – they did not uproot their families and move to OKC, which was why their work was moved – short term cost cutting greed at work), their absence is why the new Air Force One program essentially fell apart. The people who could do the work were simply pushed out of the company.

      These kinds of “war on engineering costs and unions” all over the company have had a devastating impact. But the message continues to be clear. Calhoun quite explicitly through his actions has told every manager in the company that “I’ve got my $32.7 million, now how you get your work done and keep your salary with the substandard talent pool you have is your problem.” So the theory x scramble continues.

      BTW, this sort of thing is not unique to Boeing, but is super common throughout the American (and Russian) economies. My daughter is seeing it the company where she works – which is another once well managed American company that has been infected by greed and stupidity.

      • There are just too many fires at Boeing to put out and not enough hands on the bucket brigade.

        If…everything was working well, they might have been able to get away with it.

        How do they even begin to fix this? Get someone on the retiree list and start offering 150% to come back for a year or two?

        • It would take several things. A good idea that has been mentioned several times is to setup retiree mentoring teams in every discipline at every site. Many would volunteer their time, but they should be compensated in some way.

          The next thing would be to commit to at least two moonshot programs, one on the defense side and one in commercial. I think the one for commercial is obvious – dust off the 20xx program plan and commit to it. On the defense side we would probably be talking about some sort of breakthrough classified programs. I can think of a couple of topical areas, but this is not the place to discuss them.

          Funding it would actually not be that hard. But protecting the investment from being ruined by another “minions of Jack Welch” gang of thieves would have to be insured first. I think that the best way to do that is to recharter the company as a new kind of national corporation, and establish some very stringent requirements for the leadership. Some sort of professional licensing that has some teeth has worked well in the past. Both civil engineering and accounting have done well under having such requirements imposed on their professions.

          • RTF:

            That is a great idea. I would do it for a sincere operation and not getting stabbed in the back like I was.

            Huge amount of knowledge was lost when I quit.

            Eventually you can get someone to fix it, but I knew where the stuff failed and where to go, others have to start from scratch and often the only capable tech would be stateside.

    • Spirit CEO admitted they lost over $1.4 billion on their 787 program, on average more than $1 million per aircraft!

      To help Spirit survive, BA lent $180m to Spirit, in addition to increase what it pays Spirit for its 787 parts by a total of $455 million over the next two years. Furthermore, repayment of $100m advance has to be postponed.

      • $1.4 billion you say? Pocket change lost in the sofa.

        Boeing wrote off $3.5 billion on the program, then added another couple of billion when the 787’s were not delivered for 20 months and still has double digit billions in the DPB to write off. Oh ya, they also ‘reclassified’ a few 787’s as R&D instead of production blunders that no one wanted – and wrote off a couple of billion there.

        “You wanna see a loss? We’ll show you amateurs a loss – this is how the pro’s do it!”

        – BCA

  26. This is the key statement:

    ‘Boeing can’t afford to buy Spirit. We’re not sure Boeing can even afford to acquire Spirit in a stock swap. The money required to bring Spirit into shape is unknown, perhaps even to Boeing.’

    How long does this mess take to consummate?

    It is being said (Bloomberg) that the H1 cash burn is ~$8 billion. Q1 had a $4 billion burn, so another $4 for Q2 leaves BA with ~$3.5 billion plus another $10 billion they ran up on the credit card…$13.5 billion.

    That’s an $8 billion cash burn without any money spent on fixing Spirit.

    No Max 7 cert. No Max 10 cert. No 777X cert. All of these programs are costing them money along with a bunch of inventory that is another cash drain. 2025 is the earliest that Boeing will start to see some funds rolling in from the Max 7 program.


    How many messes can you fix at the same time?:

    1) CEO search
    2) Spirit acquisition & turnaround
    3) Program certifications
    4) Production/supply chain woes
    5) Financial/balance sheet disaster


    Add to all that, in Sept, this is coming:

    IAM 751 gearing up for Boeing contract talks in 2024

    Holding a New Airplane Hostage

    ‘I’ve no doubt that Boeing will hold a new airplane hostage to a new contract executives consider favorable to the company. This is as sure, in my mind, as the sun rising in the East and setting in the West.’

    While I do not claim to be an expert in union negotiations, I might offer a different view than Scott on the ‘hostage’ situation.

    If Boeing cannot afford to buy Spirit outright with cash, then it certainly doesn’t have the $20+ billion needed to launch a new design (and that’s the low end of the price scale). Anyone can look at the balance sheet and see this. Which would be the first question the Union should ask; With what money is this magical plane going to be launched with?

    The Boeing turnaround is a 5 to 10 year deal. At best.

    Suppliers gave concessions in ‘Partnering for Poverty’ and that blew up in Boeing’s face, as they now have to buy Spirit.

    Employees gave concessions in the previous contract and that has now blown up in their face, with internal production woes.

    Customers have been receiving compensation from Boeing for billions of dollars, as certification and grounding problems blew up in Boeing’s face.

    BA now has to borrow the money (again) to pay back for all the squeezing they previously did, to maximize the returns to investors.

    You can find $30+ million to pay off Dave to stay in his boating community? You can find some money to pay for the people who make your aircraft.

    5 year deal, see you in 2029, when you decide you are in a position to be able to offer the world a new aircraft. After all, Dave said; Nothing new until 2030.

  27. Holy Crap! How the mighty have fallen. Taking steps to move money from where it does good to accounts where it isn’t needed.

  28. I guess people at influential positions are seriously looking at scenarios to guarantee long term civil aerospace industry in the USA. And they are not focussed on what Boeing says/ does anymore.

    The 737-10 & 777-9 should have been rolling off the FAL’s at high rates for years now..

    What nobody dares to ask, how solid is the Boeing backlog really, if those airlines are buying the alternative products?

    • just a note…if they can do it for EV and can do it for their commercial aircraft industry

      China’s mammoth $230 billion investment: revolutionizing the global electric vehicle industry and opening up investor opportunities

      “The $230 billion sum invested by China in its electric car industry is almost twice as much as the United States’ total public and private spending in the sector. This figure reflects how China is positioning itself as a pioneer in the future of mobility, where electric vehicles (EVs) are set to play a pivotal role.”

      • CNBC: “Chinese automakers expected to achieve 33% global market share by 2030”

        “Chinese automakers are expected to continue rapidly expanding outside of China to achieve 33% of the global automotive market share by 2030, according to consulting firm AlixPartners.

        “Much of the growth, up from a forecast 21% market share this year, is expected to be outside of China.

        “Sales outside of China are expected to grow from 3 million this year to 9 million by 2030, representing growth from 3% to 13% of market share by the end of this decade.”


        (*sarcasm button on*)

        Thank goodness the Chinese could never achieve a similar landslide in the aviation world!

        (*sarcasm button off*)

        • ‘Thank goodness the Chinese could never achieve a similar landslide in the aviation world!’

          Who said never?

          The only sticking point seems to be that you think it’ll take a decade and the consensus is that it’ll happen in some 20-30 years, if they stay the course.

          I’ll also go further (as I have said before) and that it’s not the C919 that will be a problem for AB & BA, but the next aircraft, when Comac builds an experienced work force and learns how to navigate the cert process.

          Cars are not aircraft.

          (Side note: All we have to do is look at the debacle that Charleston has become. Boeing tried to take an auto industry friendly workforce in a region that supports such endeavors – and turn them into aerospace manufacturers. Doesn’t work. You need airplane guys and gals, with years of experience, to get there. That is why the tie up with Embraer would have been an embarrassment of riches, for Boeing. They would have had a ready made force to tackle all kinds of issues and churn out aircraft.

          Look, the bosses at Emb screwed up with the E2 line, but AFAIK the aircraft itself and the build quality is really, really good. They know how to get aircraft certified.

          If Boeing could ever swallow their pride and go back to Embraer, with hat in hands and get them to partner once again, they could solve a ton of the problems they face.

          Who knows…maybe they are quietly working on something)

          • (1) “…you think it’ll take a decade and the consensus is that it’ll happen in some 20-30 years”

            Definition of “consensus” in this instance: Cumulative, denialist auto-assumption by western analysts who (like to) think that China is just a factory for simple toys and appliances.

            (2) Re Embraer:
            Why in hell would Embraer want to enter into any sort of JV with the trainwreck that Boeing has become? What realistic advantage would that have for the Brazilians? Embraer can get itself a much better deal teaming up with the Chinese or Indians.

            To ponder:
            If Donnie gets back in the house, there’s likely to be a major disintegration of US-EU ties. What opportunities will that create for the Chinese?

          • Unless and until China aviation goes long and comes out with a design that stretches the limits and the far edge of the state of the art, no, they won’t produce world class aircraft.

            Everything they have done is old tech and slow and ponderous.

            China does not invest in aviation, it owns aviation, it controls aviation. With no one to0 answer to but themselves the employees of COMEC are not going to push cutting edge, fear of failure and the consequences.

            As for Electric, that is fading, the funny one was they build a charging station in a mountain pass in the US, powered by a Generator!

            Electrons don’t just magically appear, they come from solar (gone at night) and they come from some form of spinning generator (actually an alternator). So you hit the grid hard that is already stressed maxim.

  29. No cash to buy Spirit…but still billions to waste on this:

    “Boeing bets big on next-generation fighter manufacturing facility”

    “The US airframer has begun construction of a $1.8 billion advanced combat aircraft assembly facility in St. Louis, at a time when support for sixth-generation fighter programmes appears to be waning at the Pentagon.”

    For those not up-to-date on the matter: recent events in Ukraine and the Red Sea are serving as an eye-opener as regards the waning usefulness of fighter jets (and tanks) against enemies deploying swarms of relatively simple drones…

    • Yes and no. 4th gen fighters require combined arms to survive.

      We’ll probably never see it (and that’s a good thing) but it would be interesting to find out how the F-35 and the F-22 would do over there. Could the B-2 survive?

      The old tech vs numbers question.

      • Very soon we will see how well F-16 and possibly Mirage 2000-5 will survive. I don’t think fighters have anything to fear from current drones (except when they are sitting on an unprotected airfield), but SAMs are obviously a huge danger.

        • Mooch has an interesting video on exactly that subject:

          ‘The REAL Truth About Ukrainian F-16 Pilot Training’

          It’s not only about the aircraft, but the man in the plane and the doctrine taught to it’s pilots. Apparently the GCI system taught by eastern bloc nations is at a disadvantage in today’s environment and does not work well.

          Also – those brought up in the system are finding it difficult to convert over and revert to type under stress.

          • I could comment in depth on that, have to defer to Scott if its too far off topic.

            Ukraine has some unique aspects, if you don’t have a US type support system, then as Mooch accurately states, it does not work. They saw the same with Armored Brigades.

            Something that is worth noting, the Maginot Line worked (Viva La France!). It was never penetrated. It was gone through in the middle where it was not (Ardennes) and around the end where it was not.

            France called it right in building the Magninot line and if it had defended the two vulnerabilities, that attack would have been crushed. Sadly for all, they failed to do the final bits.

          • The Russians and all their clients or former clients went deep into GC, so it dates back to the Cold War as well as Iraq I and II.

            US knows how to knock down an IAD, Ukraine simply does not have the equipment to do it nor the fighter types needed even if they do (you need at least an F-15C, E or EX to take on an SU-35.

    • That’s very un-patriotic of him 🤔

      If it weren’t for a recent, ill-conceived MAX order — and some lingering old BA frames — he could have put the slogan “proudly non-Boeing” on his planes 🙈

      • Whaddya mean – A320’s & A220’s are proudly assembled in Mobile, Alabama. Employing the good folks of the Cotton State.

    • I am not a Chevy or Chrysler liker either, but saving them had nothing to do with what I like or not like nor patriotism.

      Its pure greed, I want to see as many jobs and industry in the USA as we can get or keep. What is Airbus other than a way to keep high tech jobs in Europe? Europe consolidated all those companies knowing there was no future in Aviation if they did not (and it was a close run thing it worked)

      The other aspect is Boeing is a key defense supplier. I don’t want to loose what they make (nor see it consolidated more under NG or Lockheed, Lockheed has done more than enough to us with the F-35 thank you)

      Do I hold a tremendous amount of Nostalgia for Boeing? Yea I do. I did for Pan Am and our local owned hardware store. A lot of it is gone. I can appreciate they were there and morn their going, it does not mean I can’t be pragmatic as well (that or get run over)

      I went from a world on Computers in a data center and a total mystery to computers controlling indivual rooms for cooling and heat. I had to adapt to what was happening.

      I don’t hold nostalgia or patriotism as a metric for Boeing. Nothing is going to change the path Management has taken and what its done to the company.

      But there are real people at that pointy end of the spear who need jobs, have aspirations and ensure we have an economy.

      So yea, I want Boeing fixed, or more accurately I want Boeing management fixed so the people in the company can work, knowing there are managers at all levels that will need to be weeded out.

      A reminder, that Airbus puts out a well done and fully functional product (and while I disagree with their controls philosophy it generally works unless you mess it up)

      That said, the Airlines that fly Airbus then do the same thing that the Airlines that fly Boeing do, they have equipment failures, they use the MEL list to get around it and they fly no longer perfectly functioning aircraft. Pilots then have to revert to work arounds.

      Reality is it could have been an Airbus with a bad door that would have been allowed to be dispatched to Hawaii on ETOPs, same rules apply to Airbus as Boeing.

      ETOPs is not supposed to be a license to dispatch an aircraft that is not fully functional but clearly it is and does.

      Upset training is needed for both as is no rote emergencies (AF447 should NEVER have happened).

      So, ask yourself, when was the last structural fialure of an aircraft? DC-10 days? 747-100 cargo door that did not lock right? Aloha who ignored the corrosion procedures (violated them).

      Not disagreement that the MAX-9 Exit Plug blowout is and continues to be a debacle. How and why it got there has to be fixed.

      But there are other arena’s in aviation that you just have to watch Mentour Video on that by far the biggest cause of losses is pilots and training (or lack of that). A co pilot who has so few hours they are no use in CRM is not a backup, its a tragedy waiting to happen (and has).

      • That means airlines like AF/KLM, Lufthansa, British Airways, Varig or Air Canada should have never bought a single Boeing. Got it.

      • Its a shame that we can’t have a tech discussion and reverts to snark.

        After delivery its all about maintenance and of course Airbus is immune to that need. Well amend that, its also about training. Airbus is immune as well of course as the automation takes care of everything.

        Some very good people have noted that if Boeing management allowed the aircraft to be built to spec, they would be equal to Airbus.

        Is the 737 dated? Yes, it never should have gone past the NG. Even a me too of the A320 would have given them a platform that could compete on equal footing and prior to the tragedy of MCAS, the MAX was proving that an old bird can match a new bird economics wise.

        Its interesting to see 767s retained because nothing can match the slot they fill. Funny how old the A330 is but its fine (older than 767).

        • “Its interesting to see 767s retained because nothing can match the slot they fill. Funny how old the A330 is but its fine (older than 767).”

          Bit of revisionist history here: the first 767s entered service in 1982 and the first A330s in 1994, according to Google. I know it’s perhaps not the most reliable source, but 12 years is a big difference!

          • The a330 has constantly been updated while the 767 is at a standstill.

          • Amazon Air has A330 freighters to replace their 767s. Oops.

          • Feedstock of 767s is getting scarce.

          • Roger:

            The A300/310 came first, then the 767 came along and Airbus moved the fuselage up to a longer length.

            That smaller wide body was a good market, Boeing has build over 1000 x 767s and still doing so.

            Airbus continued in that segment with the A330/310 freighters that were popular with FedEx and UPS.

  30. Frank P:

    I would be interested in your input on using shares to buy out Spirit and can the bought back shares be used? I know releasing shares dilutes Boeing stock but when you are in a corner??????

    Also, could Boeing do massive write offs and would there be any gain to that? Is that a violation of Program accounting? Limits of some kind as we have seen Boeing write things off before.

    And yes I cheerfully acknowledge finance of that type is a mystery to me. I spent my career in out of the way rooms keeping things running. Someone has to (clearly as we have seen the various maint failures getting reported so well lately) – the best equipment in the world still needs TLC.

    • @TW
      I think that Boeing will look to clear the deck of the skeletons in the closet when the new CEO steps in. At this point the balance sheet already defies the laws of physics. When you have negative equity all it takes is a lack of lender confidence for this company to fold.

      • I am inclined to the same thought though some consideration of doing it before a new CEO. Seems far too much to do before Calhoun is given his soft heave ho.

        Still interested in the mechanisms involved financially. I can see big picture stuff but the details are definitely not my bailiwick. Frank P maybe and or AP Roberts though have not heard from him in some time.

    • Boeing: Are the bought back shares “stashed” or “retired” ?
      I could not find any info on that.

  31. Not even *trying* anymore to abide by rules:

    “NTSB sanctions Boeing over release of 737 MAX investigation details, flags to DOJ”

    “WASHINGTON (Reuters) -The National Transportation Safety Board said early on Thursday it was sanctioning Boeing for disclosing non-public details of the ongoing investigation into a 737 MAX mid-air emergency and referring its conduct to the Justice Department.

    “The NTSB said Boeing had “blatantly violated” the agency’s investigative regulations by providing “non-public investigative information to the media” and speculating about possible causes of the Jan. 5 Alaska Airlines door plug blowout.”

    “The move by Boeing has further deepened the strain between the crisis-hit planemaker and government agencies at a time when it is trying to avoid criminal charges being brought by the U.S. Department of Justice (DOJ) ahead of a July 7 deadline.

    “The NTSB said Boeing would retain its status as a party to the investigation into the Alaska Airlines incident, but it would no longer have access to the information the agency produces during its probe.

    “The planemaker will not be allowed to ask questions of other participants at an investigative hearing on August 6-7, whereas other participants at the hearing will be allowed to do so.

    “As a party to many NTSB investigations over the past decades, few entities know the rules better than Boeing,” the NTSB said.”

  32. And now we have yet another one:

    “Ryanair Boeing 737 Max dives 2,000ft in 17 seconds sparking investigation”

    “A Boeing 737 Max flown by Ryanair dived at high speed in the final stages of a journey to Stansted airport, sparking an official investigation, i can reveal.

    “Data shows flight FR1269 descended more than 2,000ft in just 17 seconds on 4 December last year.

    “Air accident experts declared a “serious incident” after the aircraft dropped at a rate of more than 8,000ft per minute, despite flying at a low altitude at the time.”

    “…flight records show that this 737 Max, which typically flies five or six routes a day, did not take off again for two days after the incident.”

    “…it is “unusual” for an airline to refer an unstable approach to the AAIB, he said, which indicates Ryanair must have been “concerned” about the dive. It is also rare for the authority to open an investigation into one, which shows “they want to know what happened and why”.”


    On the subject of the MAX: June is almost gone, and I haven’t heard of any MAX orders this month…has anyone else?
    If not, then that’s 3 months in a row with zero MAX orders.
    Gosh, I wonder why…🤔

    • David P:

      And where do they save by shifting elsewhere?


      The never ending 787 build issues? How has that worked out?

      Billions spent buying out Chance Vought and Alenia as well as building an assembly plant there. Billions more in trying to build a work force that never saw an aluminum aircraft let alone a composite one.


      • Transworld

        To keep the next new aircraft in Seattle (Everett or Renton FAL/Wings) they need to design in automation/ lower part count to eliminate labor hours to make it work if they have to be on the highest pay scale. Nothing wrong with high pay, but bucking rivets is not high skill work. With the right automation, it will lower headcount.

        ex. That’s one of the reasons for the new 737 Wing Riveter line in Renton, no individual operators, just a master control center (6 WRS, not 6 operators x 3 three shift (18), but just one master control operator x 3 shifts (3) saves 15 headcount

        So be careful what you want….32,000 workers with reasonable pay increase to 16,000 workers in future with higher skill levels?

      • David P:

        I would disagree on rivets. Its not a steel structure though they don’t buck rivets there or on ships either. Bolted or welded.

        So first you suggest build somewhere else and now automation? Not sure which hook you are hanging your hat on there.

        But the ability to focus on a high quality need with a repetitive task? Yea that is worth some bucks (pun). Where do you think the Spirit issues come from ? (aka rivet issues and out of sequence work which revealed Boeing massive gaps as well as FAA failures)

        The glue that held Charleston together was contract workers (union hands who had been laid off or quit). In theory shims are not high tech either, but I have done valve sets in the tolerance area of the 787 shim specs, it ain’t as easy as people think it is that have not done that kind of work. Unless you can automate it (yet to see it done on shims) then its an experience by feel job.

        So you contend you can just move those skills out, but you ignore Charleston. The reason Everett worked was those guys had a bazillion years of collective experience in fitting aircraft together and it translates directly to composites.

        I have no issue with automation. I do have an issue with the lack of understanding that things have to be designed from the ground up to make it work. C919 a good case in point (not that their production is doing anything much and wont, but still……………..)

        Equally you ignore where Boeing has open space to build things and that is Everett, unless you want the Charleston debacle all over again and that give keeps on giving (all new facility where?)

        Everett mechanics are still making a good living fixing 787s. But those hulls will be gone in a couple of years.

        So yea, you got empty halls, no 747, few 767s, no 787s. That is why Boeing was going to open a line for MAX in Everett.

        What is the cost of all the Boeing debacles compared to a wage increase?

        They could not make the automation work on the 777X and that was the best company in the world trying to do that.

        Ironically what do we have in Everett? Yep, the 777X wing factory.

        Equally Ironic, Calhoun destroys Boeing worth 100 billion or so, just so he can get a messily 33 million a year. Boeing would be far better off if they paid him a 100 million a year to go away.

        • Trans
          “So yea, you got empty halls, no 747, few 767s, no 787s. That is why Boeing was going to open a line for MAX in Everett.”

          I don’t think a 70 year old empty building in Everett will lend to the next generation commercial aircraft mfg. The facility will be designed around the mfg. processes that will be develop for the next aircraft

          Yes 777x wing is advancing technology but if you look at FAUB for 777 it failed because the design of the airframe was not focused on robot access (in 1991 no robot technology available)

          While this a 10 year video…it touches on some possible ways of mfg. a new aircraft.

          • David P:

            Phew, an aircraft plant is nothing more than a big empty hall where they assemble the bits and pieces fed into the hall.

            So yea, Everett has empty halls. Like the 777X wing, you have to build or have areas to assemble stuff. In the case of the wing they built a new facility that allowed the feeding of the bits and pieces that go into the wing.

            747 wing was assembled next to the 747 line.

            Its exactly what Airbus does but on a large scale. Wings in the UK (or Ireland) stuff from Germany and Spain as well as assembly in Germany as well as Toulouse – US and China.

            And Boeing built a Hall in Charleston where the former Chance Vought fuselage and the Alenia bit were assembled (Aleania shipped stuff to Charleston and assembled in another hall).

            If you have enough space and you can attach the flow areas that work, you can build a hall in the middle of an empty field and it works.

            But to assemble an aircraft, you just need an empty hall, the assembly pieces just sit on the floor and are mobile.

            I don’t get any logic on the argument other than you think something that is not true and has no logic.

          • Trans

            hmmm…Boeing new aircraft program ….say 2035…so you are going build a 21st century commercial aircraft in a 20th century building /factory and program length could reach close to the 22nd century?

          • Hard to explain how digital robots improve workflow to one who hasn’t experienced anything remotely close IRL.

        • 😭 That’s news to me. BA/BCA moved 787 to SC to cower the union workers, when did Charleston become an union shop??

          “The glue that held Charleston together was contract workers (union hands who had been laid off or quit).”

    • @Pritchard
      That’s a win and a loss if the union gets that raise. I almost look at it as sucking as much money from the company as possible before an eventual bankruptcy filing

  33. Airbus and Engines:

    the regional (German) newspaper here reported in context of Airbus supply ( luxury ) issues that CFM will not increase output to Airbus in a move to not alienate Boeing.

    • CFM is a 50/50 JV between GE and Safran.
      One wonders to what extent Safran is contractually entitled to up production without GE’s blessing (and vice versa)…

      • It does not matter.

        CFM will shift production to the NEO if long term they see MAX stuck in low deliveries.

        They are different engines and it would take some years to re-tool. Every single bit on an engine has to be there or no engine.

        You don’t just change to a different engine. The only reason CFM does not deliver more LEAP to Airbus is that P&W has close to 50% of the market so its about the same size for CFM as the MAX program is supposed to be at this stage.

        Long term CFM will keep an eye on it but as long as Boeing pays for the engines its not going to jerk and stop MAX LEAP-B to A just to have to ramp up B again.

  34. More evidence of the complete disconnect from reality at Boeing:


    “This week, Boeing said the Starliner capsule’s problems aren’t a concern for the return trip and “the astronauts are not stranded.””

    Hard to imagine that any astronaut feels good about trying to return to earth on that leaking, dysfunctional piece of junk…

    “Just Launch It”

  35. Looks like the order drought over at BA doesn’t apply at AB — despite the (so-called) lack of slots at the latter:

    “Airbus nears initial deal with Cebu for 70 jets, sources say”

    “PARIS/MANILA :Airbus is closing in on a preliminary deal with Philippine budget airline Cebu Air for dozens of narrow-body jets to be announced in the coming days, three people familiar with the matter said on Friday.”

    @ Frank P

    You cite a Bloomberg article above which opines that the severe cashburn at BA will cease in Q3…which starts in just 3 days.
    Do you think that’s likely? Because I don’t think it’s likely at all!
    No MAX orders, only a trickle of other orders, painfully low deliveries, and no let-up in FAA/NTSB scrutiny. That sounds like a recipe for a continuing cash haemorrhage…

    • Frank P:

      It not the lack of MAX orders at issue, mfgs don’t get that much money up[ front for an order. Yes they have squandered the up front on the orders they have.

      Its the low delivery rate that is the big immediate issue. Not only getting paid the remainder of the payment (whatever that is) but compensation for not delivering.

      At least from my view I just see them limping along though I think the flow will increase as they sort out the quality failures and travel work. Maybe 4th quarter based on nothing but a guess.

      • ‘BCA total backlog increased from $440,507 million as of December 31, 2023 to $447,533 million at March 31, 2024 reflecting new orders in
        excess of deliveries’

        Advances and progress billings 58,972

        13.17 %

    • MAY 23 2024

      ‘Boeing burned through nearly $4 billion in cash in the first quarter and West said that figure could be similar or “possibly a little worse” in the second quarter, but that the company would likely return to generating cash in the second half of 2024.’

      Mind you, the guy also said this:

      ‘A month ago, West forecast Boeing would generate free cash flow “in the low single-digit billions.” The new forecast shows the mounting costs of the plane maker’s latest crises.’

      Will there be an updated FCF number when Q3 rolls around? Probably…

      • Sorry, Frank, but I don’t attach ANY credence to ANYthing that Mr. West says.
        I suspect that the same applies to the bondholders who recently lent BA that $10B…only to be told a few days later what the true extent of the cashburn at the company was.

        Cash has to come from somewhere: at present, it’s not coming from deliveries or from PDPs — both are at far too low a level to even approach covering costs. So, that means continuing cashburn — Mr. West just hasn’t admitted it yet. Maybe he hasn’t even grasped it yet — who knows?

    • ….You cite a Bloomberg article above which opines that the severe cashburn at BA will cease in Q3…which starts in just 3 days.
      Do you think that’s likely? Because I don’t think it’s likely at all!
      No MAX orders…

      Not entirely true, I think – Alalaskan Air have apparently ordered a 737-10 to replace the returned “unplugged” 737-9!

      • @Abalone and Roger

        Q3 runs for 3 months, July, August & September.

        Farnborough Airshow goes from July 22 to 26. Perhaps…they have some orders coming.

        Could the cash burn get to $10 billion, then backtrack a couple of billion in the final quarter to end the year with a 12 month spend of $8 billion? Sure.

        Another important point is how much will it cost them to turn around Spirit, once they close? Scott has no idea and it still depends on how the deal is structured. What does Airbus pay to acquire what it needs?

        There are a lot of unknowns and it is difficult to give any sort of projections.

        One thing I will say is that the debt servicing costs, on an annual basis will be north of $3 billion, which is huge.

        We’ll see.

        • Frank

          “What does Airbus pay to acquire what it needs?”

          or “What does Spirit pay Airbus to get rid of the assets and contracts”

          • $559 million, apparently

            I guess Airbus had them by the short and curlies and wasn’t about to give them a break

  36. CFM is paying its staff to sit around rather than shift production from Boeing to Airbus?
    I find this unlikely,is Boeing just continuing to purchase contracted engines in the hopes of radically increasing production?Or just to stop Airbus getting their hands on them?

    • Aren’t the LEAP-As made by Safran in France, and the LEAP-Bs made by GE in the US?

      If Safran is currently maxed out and GE is unwilling to modify its tooling, then the there’ll be no change in LEAP-A production rates any time soon.

      It does, though, make you wonder what the current LEAP-B production rate is, and how many p/m Boeing is taking.

      • While there may be some common part numbers between the two engines, they likely don’t have the ability to switch production on a dime…forgetting where the engines are assembled.

        The long lead-time parts can take up to a couple years to boost production.

        The biggest problem is in forgings and castings. CFM is being loyal all right. But largely because they cannot pivot production anyways.

  37. You must be joking .
    Leap 1A final assembly is carried out in both the U.S. and France…
    Leap production would be at a virtual standstill, if the 1B variety was assembled in the U.S.only.

    • No point in continuing the pretence that a commercial TBW aircraft will actually materialize from this project.

      The whole X-66A thing may just have been a PR stunt to try to elevate the stock price…who knows?

      • @Abalone, I wish it was just a PR stunt. No, the highest advocates of that project and the “players” truly believed its the next best thing BCA could do. None paid any attention to the warnings from the white haired experts that it is a bunch of hot air. Yes, Boeing has sunk to this level.
        At its core, the present crisis is really a crisis of competence, more than that of ethics, however the two tend to go hand in hand.

  38. Reuters: Alaska Air Returns 737 MAX 9 Involved in Mid-Air Blowout to Boeing

    “Alaska Airlines said on Friday it has returned to Boeing the 737 MAX 9 plane that in January was involved in a mid-air door panel blowout. “They have taken possession of it and the registration has been changed,” an Alaska Airlines spokesperson said, adding an order for a new 737-10 has also been placed.

    • One wonders what BA will do with that frame: patch it up and try to sell it off at a steep discount…or scrap it?

      This should become the norm: any airline that receives defective junk like this should just return it for a full refund.

      • I wonder if the aircraft is considered a piece of evidence until the criminal investigation is over.

        • This is probably being handled as some sort of warranty claim…one that Boeing would not typically take back but for optics they are not going to say anything.

          As to resale…the aircraft is probably salvageable. Some airline desparate for lift will being willing to take this aircraft at a heavy discount.

          As to evidence…I would be more concerned that they would almost need to do a D-Check to verify it was put together correctly.

  39. Just thinking about the implications of the coming Airbus acquisition of the pieces of Spirit in its supply chain. Looking back at Boeing’s road to perdition, it was basically infected with the toxic Welch cash flow virus in the McD merger. Now the coming Airbus acquisition of part of Spirit gives the US an opportunity to transmit the virus overseas. Once Boeing gets Spirit they just put some Calhoun cash flow mini-me in charge of the Irish plant, which then moves over to Airbus,. Use a trojan horse maneuver to infect the competition and level the playing field….I suppose they need to find a European national to transmit the virus though. That could be the sticking point.

    • On July 1, LNA looks at the Boeing-Spirit-Airbus transactions.

      • Unfortunately its behind the paywall.

        I love the inflammatory (grin) headline though.

  40. So BA/BCA actually hasn’t got AS9100??

    AW: Boeing Plans To Seek AS9100 Certification

    • If AS9100 is anything like ISO9000, its a total waste.

      The FAA was paper auditing Boeing and you can see what that got us.

      Oh, we have to put people on the shop floor.

      Either you have a quality control system or you do not and all the paper stuff can be fudged or worse. Nothing replaces organization integrity.

      All ISO9000 did to us was make our job harder. You need to be on the pointy end of the spear to understand that aspect.

      And in fact once the managers realized how intrusive it was and no return, we hid instruments away in dark corners so they did not have to be checked (part of ISO9000 is a year sticker).

      Drop the instrument and wreck it, the sticker does not protect it or make it read correctly. You just use another instrument to cross check if you think you have an issue.

      And who cared if your meter said 479 volts when it was 480 volts? Do I have relevant voltage or not?

  41. Neat summary of the DOJ/BA situation for the week ahead (deadline: July 7):

    “Boeing on edge as it awaits fateful decision from DOJ”

    If the DOJ decides not to prosecute, the matter reverts to Judge Reed O’Connor in Texas, who was instructed months ago by the 5th Circuit Court of Appeals to review the DPA in accordance with earlier jurisprudence regarding application of the CVRA. So, even if the DOJ refuses to prosecute, BA may yet get an unpleasant message from O’Connor.

    “In light of the Fifth Circuit’s decision, the case now effectively returns to the district court. If (as expected) the Justice Department moves to dismiss the conspiracy charge against Boeing, the effect of granting that motion would be (as the Fifth Circuit pointedly noted) that “no company, and no executive and no employee, ends up convicted of any crime, despite the Government and Boeing’s DPA agreement about criminal wrongdoing leading, the district court has found, to the deaths of 346 crash victims.” The families will strenuously object to any such resolution of the case, as it is impossible to see how such a result could be consistent with the public interest”

    “See United States v. Hamm, 659 F.2d 624, 629 (5th Cir. Unit A Oct. 1981) (en banc) (reiterating Supreme Court and prior Fifth Circuit precedent that district judges are empowered to deny dismissal when “clearly contrary to manifest public interest” as assessed “at the time of the decision to dismiss”)”

    Interesting soap opera ahead 🙈

    • Airbus say that they are being paid 550M or so to take on the plants producing components for their aircraft. If that is the case, presumably it is coming as cash and. if so, where/who from?

        • This is a quote for AIN – it makes more sense. Now granted, Finances and sense can be two different things.

          “Meanwhile, Airbus contracts with Spirit for the production of A350 fuselage sections in Kinston, North Carolina, and Saint-Nazaire, France; the A220’s wings and mid-fuselage in Belfast, Northern Ireland, and Casablanca, Morocco; and the A220 pylons in Wichita. The potential deal would see Spirit compensated $559 million for control over those activities.”

    • It’s at just under $33, so better than a 10% premium.

      I wonder what the pieces they are going to shed will cost?

      You think because they need to pay a premium to secure their supply chain, they’re going to ask Airbus for a premium? “We’re paying more for this, so you should pay more, too…”

      • “Airbus, meanwhile, said Monday it has reached an agreement with Spirit so that the European aircraft manufacturer is compensated $559 million by Spirit to acquire its manufacturing lines dedicated to Airbus planes.”

        “Including Spirit’s debt the deal has a transaction value of $8.3 billion Boeing said”
        **So…BA’s debt goes up by $3.6B

        “He said he expects the deal to close mid-2025, subject to approval by regulators, Spirit shareholders and the sale of Spirit’s operators dedicated to Airbus planes.”
        **That’s another full year to get this deal done.

        • Wow. Another year. And more debt.

          So to summarize:

          BA gives Spirit shareholders $4.3 billion in stock. Out of that, they will have to pay off everything over the $3.6 billion mark of debt AND pay Airbus $559 million.

          Boeing also adds $3.6 billion to it’s debt.

          (for those keeping score)

          At the end of Q1

          Long-term debt 46,877

          Add: $10 billion in new borrowings: $56.877 billion

          Add: $3.6 billion Spirit debt: $60.477 billion

          Or does BA just use some of the new debt to pay it off, ASAP?


          From the new Leeham article:

          ‘Boeing is paying far more to get Spirit back than what it got when it sold off what became Spirit in 2005 to private equity firm Onex Corp. for $900 million in cash and assumption of about $300 million in debt. Adjusted for inflation, that is equivalent to about $1.9 billion now.’

          Paying $8.3 billion for something they sold off for $1.9 billion (adjusted) isn’t the best way to conduct business, is it?

          • And don’t forget: Bloomberg has estimated that, of the $10B recently borrowed, $8B is already burned off. So, per the discussion above, unless there’s a radical source of new positive cashflow in the coming weeks, then BA is going to have to borrow AGAIN.

          • @Abalone

            That $8 billion estimate includes the ~$4 billion burned in Q1. Q2 being a rinse, repeat get’s you to $8 billion.

            We don’t have to pile on here…BA is doing just fine with it’s own missteps.

          • Update:

            Sorry, BA is swapping $4.7 billion, not $4.3 billion in stock for Spirit. The $4.3 billion was the earlier number from Bloomberg.

          • Isnt the definition of a Ponzi scheme hitting up investors to plow money into a business but then only using that money to pay off old debts?
            I would be very nervous continuing to issue that debt to Boeing. Not concerned so much of the return for money as the return “of my money”

          • Using the vault shares it cost Boeing nothing to do the deal and they have been paying Spirit more, loans etc, so some of that so called debt is their own loans.

            What do they get for the BBD part?

    • The rumored deal requires Boeing to plead guilty to various charges — which it may not be willing to do, since that would impede its ability to do business with the US government.

      “A guilty plea could also carry implications for Boeing’s ability to enter into government contracts such as those with the US military that make up a significant portion of its revenue. Companies with felony convictions can receive waivers, and it remained unclear to what extent the Justice Department’s proposed plea deal addresses the issue.”

  42. So, it looks as if Airbus is paying just 1$ for its share of Spirit…AND Boeing will additionally be paying Airbus $559M to sweeten the deal:

    “Airbus said it would “be compensated by payment of $559 million” from Spirit “for a nominal consideration of $1.00, subject to adjustments including based on the final transaction perimeter.””

    • “Airbus returns to the $1 shop, this time with Spirit asset deal”

      “(Bloomberg) — Almost seven years after picking up Bombardier Inc.’s troubled C-Series aircraft program for next to nothing, Airbus SE is going discount shopping once more — this time for assets being offloaded by Spirit AeroSystems Inc. for a symbolic $1 price tag.”

      “The European planemaker will also get a sweetener to the tune of $559 million from Spirit to take on its wing plant in Belfast in North Ireland, as well as factories in Kinston, North Carolina, and St Nazaire in France that supply its A350 widebody model.”

      • IIRC Spirit paid Bombardier to acquire that plant, which Airbus did not buy, at the time. Now, they get the plant (and others) plus an additional $559 million.

        On the surface of it, it seems that one company is playing chess, while the other is playing checkers…

        • Spirit did indeed pay Bombardier.

          “Spirit/Spirit UK paid $275 million to Bombardier, and acquired certain liabilities as previously disclosed including the Short Brothers plc pension scheme and financial payment obligations under a repayable investment agreement between Short Brothers and the United Kingdom’s Department for Business, Energy and Industrial Strategy. On the first anniversary of closing, Spirit will make a special contribution of £100 million (approximately $130 million) to the Shorts pension scheme. The total enterprise valuation of the acquisition is $865 million.”

          From a UK perspective it must be noted that Airbus are only taking some of the Belfast plant and none of Prestwick. Spirit are looking to sell the non-Airbus bits in the UK separately. It’s reported that roughly 1,400 of the 3,600 staff at Belfast are working on non-Airbus projects which include Bombardier and Rolls Royce.

          • So another $865 million paid to Bombardier by Spirit, with obligations to fall onto BA when it acquire Spirit.

            Why am I sensing that Boeing trying to kill the A220 in the past, will come back to bite them in the buttocks. They royally pissed off Delta, who is happy that they are now with Airbus and now have to take on the mess created in the aftermath.

          • Its worth watching the Mentour pilot channel (commentary side not the air incidents) on the A220 subject.

            Lots of issues from the non Airbus control system, parts sources out of Airbus supply stream and once the A220-500 is done, then it has no where to go.

            You don’t have common type rating so to move up to A321 it would take a whole standard conversion course.

            None of the systems will be developed further as Airbus will use its own systems as the basis for anything they come out with down the road.

            It would fit Boeing far better as the MAX is non conforming already and the C2220-500 would have nicely replaced the MAX leaving Boeing to develop an A321 type.

            And when if ever does Airbus make money on the now A220?

          • And when if ever BA make a penny out of the 777X / 787 programs?? 😂

          • Thx BA Airbus is going to pocket $0.6 billion and own the production facilities for $1. Hehe.

          • Pedro:

            Your comments generally go in the direction of deflection.

            777X is its own program, it has its own Boeing issues.

            The A220 is a Unique program, rarely if ever does an airline mfg buy out a program like that and then determine to deal with it.

            Bovine g717 comes to mind. A dead end, not all that good a seller and Boeing dropped it after seeing where it was not going.

            The A220 is a premier program for Airbus that does not fit in at all with any other Airbus program and everything they say and do shows they plan to keep it in production for a normal life.

            But its always going to be a stand alone program that has little if anything in common with Airbus other philosophy and cockpit setup/control methods.

            People knock Boeing for lack of commonality, this is no different.

            Its also interesting to see how it plays out.

            If you want to talk about the 777X then do a separate post or insert when the topic comes up again. Otherwise its just a snark comment with no meaning.

  43. Barely has the deal been announced…but the circus is already starting:

    “Shareholder Alert: Ademi LLP investigates whether Spirit AeroSystems Holdings, Inc. has obtained a Fair Price for its Public Shareholders”

    “Spirit stockholders will receive Boeing common stock equal to an exchange ratio calculated as $37.25 divided by the volume weighted average share price of Boeing common stock over the 15-trading-day period ending on the second trading day prior to the closing, subject to a floor of $149.00 per share of Boeing common stock and a ceiling of $206.94 per share of Boeing common stock. Spirit stockholders will receive 0.25 shares of Boeing common stock for each of their shares of Spirit common stock if the closing price is at or below $149.00, and 0.18 shares of Boeing common stock for each of their shares of Spirit common stock if the closing price is at or above $206.94. At $37.25 per share, this represents an equity value of approximately $4.7 billion and an enterprise value of approximately $8.3 billion including Spirit’s last reported net debt.”

    “The transaction agreement unreasonably limits competing transactions for Spirit by imposing a significant penalty if Spirit accepts a competing bid. Spirit insiders will receive substantial benefits as part of change of control arrangements.

    “We are investigating the conduct of Spirit’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.”


    On a related but tangential matter: it will be interesting to see what Chinese regulators do with this deal. I imagine that they’ll turn the situation into some sort of power play.

    The deal has to be approved by regulators in every country in which Boeing, Spirit or Airbus conducts business…and that’s a lot of countries. No wonder BA doesn’t expect the deal to be consummated before mid 2025…and even that date is probably optimistic.

    • ‘The deal has to be approved by regulators in every country in which Boeing, Spirit or Airbus conducts business…and that’s a lot of countries.’

      You’ve mentioned this before. Have you got a link to a source that confirms this and who actually is involved.

      AB & BA sell aircraft to almost every country in the world, which is ‘conducting business’. I’m not sure that is the case.

      • It’s basic international trade law.
        See, for example:

        And this:
        “China’s merger clearance authority plays a critical role in global M&A, even for deals that have few obvious ties to China. Particularly in the technology area, China is often the last hurdle to clear. Moreover, unlike those in other major jurisdictions, China’s competition regulator must consider the impact of a deal not only on competition but also on China’s national economic interests.”

        And this:
        “When planning an acquisition or merger involving global companies, merging parties often concentrate on obtaining merger approvals in the United States and the European Union, in the expectation that other countries’ regulators would follow the substantive lead provided by those authorities. However, with the growth in national merger control systems and other regulators’ increased activity, other countries’ regulators may also significantly affect a deal.”

        And this:
        “Like numerous other jurisdictions, China applies its merger control to those transactions where the parties have substantial business presence on the Chinese markets”

        The recent Intel / Tower merger was eventually abandoned because China dragged its feet for too long. Yes, that’s what you read: a merger between two US companies was barred by China.

        • Any sources related directly to this transaction? Like the one you posted relating to Spirit shareholders…

          • I saw one the other day, but will have to go look for it.
            Try taking my word in the meantime 👀

        • As well Abalone;

          Airbus, which has a substantial manufacturing presence in China, which provides aircraft to Chinese airlines and jobs to the Chinese people, is represented in this deal – getting half a billion dollars to bring some vertical integration to it’s supply chain.

          Ya don’t think Airbus went to their Chinese partners already and told them what was going on and paved the way for this to move forward?

          You think China wants to mess with Airbus production and Chinese jobs? Both at the FAL and in airlines?

          A350 parts are also part of the Spirit deal.

          If they don’t get jets from Airbus, where are they going to get them from? Boeing? Comac?


          Secondly – you like to go on about BRICS, well…what about the I jn that word. India? Indigo has some 700 aircraft on order with Airbus. You think they want the partner China, messing with the company making those aircraft?


          Thirdly…and this is probably the best one;

          Boeing is being forced to pay some $8.3 billion, for something it sold for $1.9 billion. It will be taking on extra debt and put itself further in the hole.

          What do you think the chances are that:

          1) Given the BA debt load & financial position
          2) Given the way they’ve treated their employees
          3) Given the way they have delivered to their customers
          4) Given the way they are running their production/engineering/everything…

          That Boeing is magically going to take over Spirit. Integrate it seamlessly into it’s operation. Do so effectively and not without taking on extra debt. Find competent, qualified, hard working people, led by leaders with integrity and a desire for BA to make the best aircraft in the world (over financial incentives).

          What are the chances of that happening? How did it work out for them when they had to acquire those companies on the 787 program? That go well for them? A financial and production success?

          It was recently reported BA was shifting TBW staff to cert. Who are you going to send to Wichita?

          Why would you get in the way of that? With Stephanie Pope at the helm of BCA.

          But popcorn and enjoy the show.


          And finally, some next level politicking and horse trading;

          Let’s say you’re right, China can make it difficult/impede the deal.


          They can get something that they want, in return.

          Boeing doesn’t want China to get in the way? Then don’t mess with the deliveries of Leap engines for the C919.

          Deals like this happen all the time.

          • No need to get your panties in a twist 🫣
            I didn’t say that China would block the deal — I said they’d use it for power play purposes.
            So will the Indians, I suspect.
            And I’d expect the Brazilians to do the same.

            Tell me why the Chinese impeded the Intel/Tower deal…even though, at the time, China bought a lot of Intel products.

          • Panties are not twisted – facts just getting stated:

            ‘The recent Intel / Tower merger was eventually abandoned because China dragged its feet for too long. Yes, that’s what you read: a merger between two US companies was barred by China.’

            Here you are talking about a deal being blocked.

            BTW – Tower is Israeli, not American.

            ‘The reported stalling by Chinese regulators comes amid rising strains in the US-China relationship, with the semiconductor industry a central point of contention.

            California-based Intel is seen as a key tool for the United States to reduce its dependence on major global producers, such as Taiwan’s TSMC.’


          • Sheeese and I get hit for going off topic. Sigh.

            Briefs by the way.

        • ‘Try taking my word in the meantime’

          Facts are one thing. Opinions are another.

          I’ll take it under advisement.

          • I didn’t ask you to trust my opinion — I asked you to trust the fact that I had read an article a few days ago about specific Chinese involvement in the Spirit deal.

            I don’t just read western news sources…there’s a lot to be learned ftom Chinese and Indian news outlets.

            Tower is Israeli — but it has a subsidiary in Newport Beach, and fabs in California and Texas.

          • And this has gone wildly speculative. Unless it affects China in some way, they can only control what they have happen inside their borders.

            They can disprove all they want. Are they going to seize the MAX completion center? Not by Boeing jets?

            If every Tom Dick and Harry country could stop it, then they would do it to all of them and hold companies hostage for a payoff.

            Europe on the other hand has influence in it as there are affected bushiness in Europe.

            But the UK is no longer part of the EU.

            Funny to see a total hypothetical being argued.

          • Trans:

            Reality is the deal between INTC and Tower required approval from China.

          • @ Pedro
            US antitrust regulators have been dragging their feet approving the Korean/Asiana merger.
            The Boeing/Spirit deal now gives the Koreans some leverage: “you clear our deal, then we’ll clear yours”.

            Geopolitics is such fun 🙈

        • @Abalone

          Another point was brought to my attention:

          The A220 mid section is built in China. They have skin in the game. If they mess with the wing plant/pylons on the A220, they are screwing themselves.

          • And, conversely, if Airbus messes with the Chinese, it’s screwing itself.
            Same applies to Boeing.

            If you had actually read the links that I posted above on international mergers, you’d have seen how geopolitics and vested interests are greatly increasing complexity of the regulatory landscape.

            Boeing itself has indicated that consummation of the deal will take (at least) a year.

          • That is pretty funny, the logic of course is a bust.

            When you are down to one supplier, who you gonna call? COMAC? Right Mel.

    • Airbus can do it, but its going to set them back a bit just like the A220 program keeps setting them back.

      They have no choice unless they want Boeing running key aspects of their programs.

      Maybe they can get a hand out from Europe?

      Oh, they already did that.

  44. “Airbus may end up owning some Spirit Aero assets in Scotland, Malaysia”

    “(Reuters) – Airbus may end up owning some assets of Spirit AeroSystems in Scotland and Malaysia if the transatlantic supplier is unable to find a buyer for them, a filing from the aerostructures company showed on Monday.”

    “Spirit said on Monday it planned to sell operations in Prestwick, Scotland and in Subang, Malaysia that support Airbus programs and those in Belfast that do not support the programs.”

    “However, Spirit’s term sheet with Airbus – named “Project Sparrow” – leaves the door open for the planemaker to own parts of two plants that were not a part of the deal announced on Monday.

    “Airbus and Spirit shall cooperate to “implement an alternative arrangement pursuant to which the Subang Assets and the associated liabilities shall be allocated and transferred to Spirit and Airbus” if the assets are not bought by a third party before mid-2025, the filing showed.

    “The Subang plant makes wing fixed leading edge and wing movable leading edge for Boeing’s 787 Dreamliner, according to Spirit’s website.

    “Its Prestwick plant, which makes wing parts for Airbus A320, could be classified under “transferred business” if a buyer could not be found, the filing said.”

  45. From what I can parse out, Boeing is paying Airbus to take the Shorts Plant in Ireland.

    Then Airbus can sell off non relevant portions.

    This is a good summation from what I have found so far. Airbus gets its large parts under its roof(s). Spirit pays Airbus not Boeing though that is ??????

    Spirit or Boeing will divest other aspects that are not relevant to Boeing or Airbus.

    Something like the A220 Pylons may stay with Spirit, have to see.

    I know of other mfgs that have done that with no issues (supply parts to competitors). As long as its a viable contract no reason not to keep it.

    It might also be a longer term, ok, for X years we will maintain mfg on that but its on a clock and you will need to source it someplace else by the expiration.

    • Have to amend my post, Airbus is paying Spirit for X part of the business, from the looks of it NE and US A350 parts.

  46. “Airbus is taking control of the part of the business which makes wings and fuselage for its A220 jet.
    There is uncertainty for the non-Airbus parts of the Belfast business with Spirit saying it will sell them separately.
    That part of the business includes a range of work on Bombardier business jets.”

    • I am seeing another report that Airbus pays Spirit for its portion which makes more sense. $559 million I believe.

      In reality a few billion more debt by Boeing changes nothing. The stock I assume is in the vault from all the buy backs.

      It dilutes the existing stocks a bit but too bad for those who are hanging onto it.

      If lucky 5 years before they get out of hock, more likely 10 years and that assumes good management.

      • @TW

        ‘In reality a few billion more debt by Boeing changes nothing.’

        $3.6 billion @ 5% means an increase of $180 million in interest payments each year.

        To put it into repayment of principle context:

        If Boeing sells a 737 Max 8 for $50 million and makes a margin of 10% on the deal, they’ll earn $5 million.

        It would take them 36 Max deliveries to cover the debt servicing costs for one year.

        It would also take them 720 deliveries, at that rate, to pay back the principle.

        That is one whole year of Max production, with Renton and the supply chain firing on all cylinders, at a production rate of 60 a month.

        One entire year of Max production and profits…wasted.

        (IF Boring could get to a rate of 60 and IF they could make positive margins on it’s deliveries….something we haven’t seen in over 5 years)


        The BCA backlog is $448 billion.

        At a 10% margin, this means that $36 billion of that, is required to pay off that loan (not including interest) or 8% of the backlog.

        The BA debt load just went from $57. 94 billion to $61.54 billion, a 6% increase.

        An even scarier thought:

        If Boeing could make the entire $448 billion commercial backlog overnight, deliver it and earn a 10% margin, they would get $44.8 billion in earnings.

        If they turned around and slapped that entire amount on the debt, they would still have $16.74 billion to pay.


        You may say it changes nothing, but there is another way to look at it;

        At some point, reality will set in and BA will no longer be able to pay it’s obligations. There will be a tipping point.

        Is going from $58 to $61.5 billion in debt…that point? The straw that broke the camels back?

        • It will be going even further than $61.5B…just wait a few weeks/months.

          And your 10% margin in very generous…but I realize that you’re just giving an example.

          Some commenters here continually fail to grasp the difference between revenue value and earnings value of the backlog.

          • He has a habit of saying

            “If BA was making 10% on the ______ program, it’ll turn a profit for them”

      • Frank P:

        You spiral out things but the reality is a few more billion does not change anything.

        And Boeing just pulls those stocks out of the Vault and it cost them what?

        Or the could issue more stock and dilute what they have.

        Its an all stock transaction and the Spirit Recipients will probably sell as soon as they can call their broker.

        The bigger aspect is Boeing has to bring Spirits ops into their system (as bad as it is)

        Boeing has leant Spirit money, made advance payments and I believe adjusted prices. So what is new? Is that not more debt?

        And best case for Boeing is they get so deep in debt they can declare Chapter 11. Then the doors open for loans, trust me, I was with a company that did that, I got a big raise! (granted I told them I would quit if they did not)

        • ‘You spiral out things but the reality is a few more billion does not change anything.’

          If by ‘spiral’ you mean detail out the minutiae of the financial aspects to someone who obviously cannot fathom the impact….then yes, spiral.

          I’m not even going to bother with the rest

          • Frank P:

            Ahh yes, the usual I can prove it but all I see is a dump of numbers and not the aspects behind it.

            You won’t even answer the Stock question.

            And the reality is they pull the stock out of the safe, dust it off and you have Spirit.

            They paid for the stock so its sitting doing nothing.

            A bit of stock dilution does not hurt Boeing at all.

            The real issue is not buying Spirit, its managing it and the transition.

            Airbus will have its own challenge with the A220 and A350 stuff.

      • So yea, somewhere in there it comes out of the wash as to who pays what for what

  47. The agreement is dated July 1st. It’s a subsequent event for Q2.

      • Post period-end event for Q2.

        Although both Calhoun & West said they expect the deal to take place before the end of Q2 IIRC.

        • Lemme run some scenarios by you and you tell me what happens:

          1) There is an incident with a US based 737 Max, which flies itself into terrain. BA shares go down like the Titanic.

          2) An A220 engine comes off in flight and the pylon is found to be at fault, with illegal materials or processes used in it’s construction. Spirit shares go downhill faster than Mark Cavendish on the descent of Mont Ventoux.

          Even though there are floors and ceilings set for share price in the agreement, worthless BA stock or worthless Spirit stock is still…worthless, if you’re exchanging shares.

          It’s like the old OEM adage;

          You haven’t sold an aircraft, until the customer takes delivery and the check clears.

          Just ask Embraer (who are having a good belly laugh today) who was left at the altar, when they were deemed ‘less than’.

          • Frank P:

            You writing fiction now?

            No one sane wants the scenarios you have presented and I think its in really bad taste to entertaining it.

          • “No one sane wants the scenarios you have presented”

            Reality does not go by wishes.

            It needed two crashes to raise Boeing’s professional deterioration over the public perception horizon.
            ( though it existed before and should have created internal pressure to fix )

            .. and it seems to be a “gift” that keeps on giving.

            i.e. expectancy is negatively preloaded.

          • @Trans

            Have you no memory, ability to logic things?

            BA walked away from Embraer because the value of the company tanked when the pandemic hit.

            The whole point, is that they SIGNED AN AGREEMENT, just like one that is in effect now, then walked away from it. The two scenarios (one from each side) is an illustration of what would be required to scupper the deal, in the next 12 months before closing.

            I could have said that Spirit was discovered to be infiltrated by the Cali cartel and was found out to be the central distribution point for narcotics around the world. Does that make you feel better?

            It could be any other event, that causes the whole thing to be off.

            It is not a wish. It is a possible scenario, which in a similar situation – one of the three parties to the deal used before.

            Do you get it now?

          • Nope, all I can see is you can’t put together a logical and cohesive presentation.

            You try to steamroll with an eye watering cascade of numbers, but until put into context and logic, they make no sense.

            I had to present complex mechanical issues in simpler terms so action could be taken.

            You don’t do that. Nor do you address reality of product, backlog and what can be done with it.

  48. So, you can’t get a grip of of quality in your own company,buy another company with very similar quality and financial problems!
    Airbus needs to make a decision on the A220 mk2,at the moment there is a bit of a case for shutting it down and using the facilities and workers to bang out A321s

    • Well that is an interesting take.

      I always said that the C220 for Airbus was taking a tiger by the tail. Yea it kept it out of Boeings hands but product wise for the further future it does not work into anything for Airbus (well other than a plant to shut down someday)

      Short term its non Airbus control system and setup means extra costs for an airline.

      Now, if you run all A220 (Baltic) that is not an issue or Delta that probably would not be swapping A220/A320 pilots around anywise.

      SouthWest would be a good candidate as its non conforming to the MAX as well, so no loss or added pain you would not see with an E2.

      Did Airbus really understand what they were getting into?

      The free Airplane is not so free.

      And don’t get me wrong, I really like the A220, a lot better than MAX or NEO, but that does not change where its at, where it does or does not fit and what its costing (big bucks) to get to pay back which is again delayed.

    • Last we heard, it’s the supply chain that can’t get up to speed. What would opening up a new A321 line do to help that? More storage space for parts as they come in?

      When you say A220 mk 2, you mean….all of it? Really? Walk away from the rest of the orders in the backlog? Walk away from a cheap and easy stretch into a clean sheet jet to eat the A320/737Max 8 segment from the bottom? One that airlines are asking for.

      Walk away from a segment that they own and nothing BA or Emb can field to match up with it?


      • No Airbus is not going to walk away from it.

        But the A220 has a lot of downside for Airbus due to both its loosing money and the non conformance of the FBW system used in the A220 vs the rest of Airbus.

        Some NC does not matter for but others that want to fly A320/A321NEO will want A320NEO not an A220.

      • Now that much of Spirit will transfer to Airbus, do you think that Airbus will be able to increase efficiency at the facilities in question, thereby lowering production costs?

        I do.
        I’ve seen it before in other European acquisitions of US companies.

        • Yea we saw how well it went when Daimler Benz took over Chrysler.

          Airbus can make things more efficient over time but it does not happen over night. No magic to it, a lot of hard work and more money invested.

          • And now who owns Chrysler? A French-Italian automaker.

          • Yep, and they were smart and let Chrysler manage a US market Chrysler understands.

            DB, not so much. Its situational specific.

      • When someone gives you an airliner program for $1 and then someone else gives you half a billion dollars to take over the wing production line,it’s a bit of a clue. I’m of the opinion that Airbus should go all in, but I don’t have the numbers.It’s obvious that a lot more money needs to be invested to make the program efficient,money that BBD didn’t have. It’s also clear that developing a new narrow body is far more expensive than most people think,there is a vast supply chain and tooling for volume involves a lot more investment

  49. As expected, politicians in the UK are getting involved regarding the particulars of the deal:

    “Stormont ministers to reach out in bid secure NI aerospace industry”

    ““Obviously, the best outcome would have been Airbus to take the entirety of the operation here,” he said.

    ““They’re focused on the area around the wing production unit, which of course is good news for those involved. There’s a significant number of workers in relation to that particular part of the operation. But there are a larger number of workers that are outside of that.”

    “He said the process for Spirit to find a buyer for the rest of the business was set to take between six to 12 months.

    ““We are intending to reach out, I’m hoping actually perhaps this week to reach out to the department in London but certainly with an incoming government on the other side of this week, we have clearly intended to reach out there as well. And we will continue to engage,” said Mr Murphy.”

    • Kind of a so what? Nothing Burger. The real news is who is paying for what.

      Of course the UK is getting involved, its in NI for crying out loud.

      They invested a lot of bucks into Shorts operation.

      Now wildly outrageous would be the US refusing to let Airbus have the US A350 plant. I say hold out for them to subsidize Boeing for its new TTBW jet!

  50. “Aviation attorney recommends Boeing take plea deal from DOJ”

    “”Lindquist says that the deal offers a plea to conspiracy to defraud rather than something like manslaughter. Some might call it a sweetheart deal, but he adds there’s more oversight.

    “”A guilty plea to a felony is a step-up in accountability from the initial deal, which was a deferred prosecution agreement,” said Lindquist. “Additionally, this federal independent monitor is new leverage.”

    “Lindquist feels Boeing will strongly consider it.

    “”Boeing would be absolutely brutalized at trial. The evidence is overwhelming. Their own executives have made admissions,” said Lindquist.

    “The company has until the end of the week to accept.

    “”Boeing should jump on this deal right away. Boeing cannot go to trial. The evidence is overwhelming,” said Lindquist. “If they go to trial, all their negligence, all their dirty laundry will come out in a highly public form. Boeing has to take a deal, any deal, and this is as good as it’s going to get for Boeing.””

  51. “Airbus deliveries rise 2% in first half, despite supply chain worries”

    “ – Airbus Group SE (EPA:AIR) delivered an estimated total of 67 aircraft in June, according to industry insiders. This brings the total for the first half of the year to around 323 aircraft, marking a 2% increase from the same period last year.”

    It will be interesting to see what the corresponding figure is over at Boeing…

  52. “Airbus Wins $24 Billion Deal From Cebu Pacific for Over 150 Jets”

    “(Bloomberg) — Cebu Pacific Air reached a preliminary agreement to buy 152 single-aisle jets from Airbus SE in a deal worth $24 billion at list price, the company announced on Tuesday.

    “The order by Philippines low-cost carrier will be the biggest jet purchase in the country’s history, the airline said in a stock exchange filing. As part of the agreement, Cebu will buy 102 A321neo jets with options for another 50 planes.”

    “Cebu had previously said it was looking at both Airbus as well as Boeing Co. planes for its next major order, however the US planemaker failed to win over the largest airline in the Philippines.”


    Ironic, isn’t it?
    BA is drowning in debt, and has to pay for Spirit.
    AB is swimming in cash, and gets paid to take Spirit.

    • ‘The carrier has selected Pratt & Whitney as its engine maker of choice for the new narrowbodies. ‘

      Showing some faith that the time on wing problem will be resolved.


      Cebu is really trying to grow it’s fleet

      Aircraft In service Orders Passengers[75] Notes
      Airbus A320-200 19 — 180
      Airbus A320neo 19 4 188
      Airbus A321-200 7 — 230
      Airbus A321neo 14 10 236
      Airbus A321XLR — 10 TBA Deliveries start in 2024
      Airbus A330-900 8 8 459

      It’s got 26 A320Ceo family aircraft, with 24 A320Neo family planes on order.

      Now they’re adding in 102 A321Neo’s.

      • For LCCs, ordering new aircraft is a means to stay in the business!
        The only part that’s certain to generate cash flow.

      • When were you last in Southeast Asia?
        That part of the world has explosive growth.
        Air Asia has an impressive network, offers very good service at very low fares, and its planes are full.
        There’s plenty of demand for other such carriers — from a very young population that is increasingly affluent.

        LCCs have truly revolutionized air travel.

    • Unfortunately during recent years the duopoly we love to see, isn’t really there anymore. Not in terms of cash position, backlogs, reliability or product development.

      Only in terms of fleets in operation, # employees etc. they look similar. That is historical grown.

      Yes, but WB, cargo.. only if you look back it seems. The 787 backlog has been shrinking wasn’t it for a huge United commitment. And the 777.. is the 777x.

    • When you’re hot, you’re hot. When you’re not, you’re not. The benefits of less corrupt leadership.

    • that’s what happens when you don’t have a corporation stock buy back strategy and focus on your product lines and innovation

      • Airbus has done stock buy back.

        I don’t know what they are doing in that regard now

    • P&W is making an upgraded GTF that deal with time on wing as well as incorporates all the fixes for other issues.

      The issue is that you have all the old GTF in the system and you can only make parts so fast, maintain production and get engines into a shop visit to do the work and its so slogged its a backlog.

      Anyone buying a new GTF aircraft is getting a much more mature product.

    • It’s also the production rate. 6 a month / 70 a year aren’t really large numbers for a NB, where margins are thin – compared to a WB. It needs to scale up.

      There’s also the problem of the Quebec gov’t owning 25% of the program and the large A320Neo backlog. In 3 years everything will start to converge for the program.

      AB is going to squat on the niche until then.

      • Airbus wants to boost production from 6-8 aircraft per month to 14, across the Mirabel and Mobile sites by 2026. And 20 pm / 240 per year after that. This may be delayed but the goal is there.

        A220 main strategy is replacing A319s and 737-700s. Airbus seems more then happy to give up A319/A320 NEO slots for extra A321NEOs/XLR’s slots as far as A220 “stealing” NEO orders is concerned.

        • I think RTX/P&W has something funny.
          Airbaltic is airing its displeasure.
          “There’s some friction now in the discussions, of course, because Pratt is a big company. We’re a small company. And they’re using the power of being a big US military complex company and basically telling us where we are from. I don’t like it, but I have to live with it…

          “An attendee wearing a badge identifying them as an Airbus employee was overheard… they suggested that Pratt was pushing – and Airbus was being dragged along in the process – to determine the absolute ‘minimum, minimum, minimum’ number of aircraft needed for an airline to operate.”

          • If you watch CNBC on a regular basis, you’ll see that profit is the main/only driver for many/most exchange-listed US corporations.

            The foremost question is always: “How can we monitize this?”.
            You never hear (with any sincerity): “How can we delight our customers” or “How can we benefit society?”.

            Absolutely everything revolves around the next dollar.

            Just look where that ethos got Boeing. Sounds like RTX is not far behind.

          • The various Spirit acquisitions for Airbus is not going to change supply chain aspects.

            While the A220 is involved, there is also a major A350 build facility involved.

            Regardless, Airbus is going to have to change the management to its system and that is going to cost money and people time.

            As the A220 always will remain outside Airbus system, its going to be on its own Island production wise. Very little if any in common with other Airbus products (and even if the same supplier its a different device)

            Those contracts that were made by any supplier were written to the benefit of the supplier, BBD had to agree.

            Unless those suppliers are offered something, they have no reason to change the agreement that Airbus inherited with the C series and is legally committed to despite being changed to A220.

            Getting A220 and A350 longer term ensures stability and removes a failure meltdown that would bring both programs to a smoking halt.

            Its still going to cost Airbus and its going to take years to integrate a non conforming to Airbus setup into Airbus.

            Airbus has to do it but its only a stability return, no short or medium term financial return and even long term its not a major financial benefit.

          • Airbus in many ways can’t stop A320NEO production.

            While the numbers being built are down, those who operate a mixed A320/321 fleet are going to demand the A320.

            Cockpit commonality is crucial for those LCCs and an aspect for any mixed fleet to condenser.

            And if you run A330 or A350, more so and many do.

    • ownership is not process control.

      you do not need to own a production facility for efficient control.

      you can own something and have no control over it either.

      Though not having ownership allows competition to entangle your supply line. Avio being a case in point.

      • I would disagree as to how big the production element is that drives the train.

        Wings are big, fuselages are big, noses are big etc.

        Sub systems not so much, but those areas where there is only one supplier and its a large part of your aircraft, yea, controlling it is impossible unless you own it.

        None of those large mfg parts existed to not make money. And clearly Airbus has had issues with quality aspects as has Boeing.

        Being in control get them solved faster (at least for Airbus) and you don’t have to negotiate layers of another company and responses.

          • Well I am going to have to ponder that.

            Certainly could be worse things and for the situation for them it made a lot of sense.

            I would not make it in a jungle though. Bugs, humidity and no shower, do me in even when I was young and tough.

            I truly admire those people. Like the Inupiat, one of the worst environments and they figued how to make it work. Dessert tribes would be the other one.

            I would not last a minute in the Jungle or the Dessert and at -40F not much longer up North.

    • BA lost the contract for the 5th-generation JSF…so what makes it think that it will win the contract for a 6th-gen fighter? Particularly after the ongoing KC-46A debacle.

      And, indeed, one can/should ligitmately ask if the whole concept of fighter jets has much of a future — in an age of proliferating drones, cruise missiles and ballistic missiles.

      Mind you, the Chinese appear to be developing a 6th-gen fighter — though, of course, the Pentagon auto-dismisses the abilities of the Chinese in that regard (yawn).

      • I can still remember the J-20 and J31/35 designs were met with caution. It would take a long time before they’ld actually fly, they lacked avionics, not really stealth 5th gen, etc. Dismissing them as copies had already decreased. When the “mock-ups” flew weeks later and mass production started off (300 J20’s, upgrades) the tone changed.

        • Do we get to discuss this as a subject or if I respond I am considered in violation of going off topic?

        • Purely on the tech side of the engine, it was not overtaxed to start with.

          Frankly P&W has done a fantastic job getting the power out of it that was nor forecast.

          Most people don’t know about the heat sink needed and the engine penalty for cooling that stuff off.

          Its why an upgraded engine is being developed.

          Like the KC-46A boom shock absorb (simple terms) Boeing could only design to USAF specs, to do anything else is out of contract compliance.

          Yea I now all the snark comments. If Boeing caught it they would have let the USAF know.

          That said having worked on large contracts, if you see something, you speak up and you get smacked down. Installers may see it but getting to a sane decision level gets you nothing but grief.

          Not saying that is what happened.

          P&W built the engine to spec with the agreed on growth factor and the USAF is putting more stuff on than that allowed for.

          The engine is reliable enough and the USAF knew what was going to happen when they asked P&W to push it. More shop visits due to lower in fuselage time.

          USAF wrote the LM contract, so no one to blame but their own uppers stupidity for what is going on.

          For grins in speculating, the USAF may have gotten a lot better aircraft if they went with Boeing, granted it was an ugly aircraft.

  53. Time is of the essence:
    “With this deal, Boeing acquires a troubled company running out of money. In the first quarter Spirit lost $617 million and at the end of March was $4.1 billion in debt with just $352 million cash on hand.”
    – Seattle Times

    • What state will Spirit be in one year from now?
      Because that’s (at least) how long it’s going to take to get this deal consummated.
      Will BA be propping it up in the meantime?

      • What alternatives BA has other than more advances/loans to bridge the gap?

        • Boeing needs to engage in more program sharing arrangements. This is wildly at odds of putting your suppliers in competition with each other to extract the lowest possible price.

          Boeing may have to give up the possibility of owning every program so that its suppliers are solvent enough to actually delivery quality product. The good part though is it blunts the effect of collosal writedowns by spreading the risk around.

          • Neither Boeing nor Airbus controls all their suppliers, not even close.

            Engines alone are huge. Its a very good reason to have dual sources on those and frankly the rest if you can manage.

            Some you can’t avoid, engines and landing gear come to mind.

            Others like fuselage and wings should be in your owned production system.

          • Engines aren’t a supplier to the OEM’s. They are a supplier to the airlines.

            Airlines purchase/lease/negotiate directly with engine suppliers.


            Or…Ba could go to it’s suppliers and say

            “Remember when we squeezed you for every penny and negotiated like an SOB, even though over the long term, prices rise under inflation? Maybe that was a mistake. We should sit down and talk…”

          • Red Hot Pokers would not get Calhoun to say that!

            Maybe the next CEO up.

    • Pretty much the same.

      The only Chinese orders were the ones sitting in Renton (or Mosses Lake or) and no backlogs past that.

  54. “Boeing’s $4.7 bn purchase of Spirit AeroSystems represents “fair value” – Barclays”

    “ — Boeing’s (NYSE:BA) $4.7 billion deal to purchase Spirit AeroSystems (NYSE:SPR) represents fair value for the jet parts supplier and is unlikely to be challenged by a higher bid, according to analysts at Barclays.”

    “In a note to clients, the Barclays analysts said that amount is equivalent to eight times Spirit AeroSystem’s peak core earnings and about 7% free cash flow yield on their 2026 forecast.

    “We […] do not see a higher bid emerging,” the Barclays analysts said.

    “They also downgraded their rating of Spirit AeroSystem’s stock to “Equal Weight” from “Overweight”, flagging that they do not expect the company to be profitable or cash flow positive until 2025.”–barclays-3507085


    So, as expected: Spirit will be burning cash for the rest of 2024. Boeing will be footing that bill, on top of the $8.3B that it’s paying for the acquisition.

    • What a miracle! An analyst with an OW rating and a TP of $40 changed mind because the “fair value” is actually $2.75 lower.

  55. “BofA says Airbus purchase of Spirit Aero will de-risk medium-term ramp”

    “They judged the purchase – which was set to close in mid-2025 – to be “positive”, adding that it would help to de-risk its ramp in production over the medium-term.

    Near-term on the other hand the transaction was expected to be a drag on margins, which led them to trim their estimates for operating profit in 2025 by about 2-3%.

    Earnings before interest and tax at Airbus’s Commercial operations would be around €200m lower in 2025 as a result of the acquisition and capital outlays would need to be increased by about €50m annually.

    BofA lowered its target price from €174 per share to €170.

    The analysts also believed that buying parts of Spirit Aero would production rates of 14 and 12 A220s and A350s per month in 2026 and 2028, respectively.

    “Execution & delivery watching will remain the near-term focus. Yet we remain buyers on attractive valuation (c.10x EV/EBIT 2026E) & strong demand environment.”–17026231.html

  56. The US trade deficit for May has widened to $75.1B.
    Looks like the lack of Boeing deliveries is having a noticable fiscal effect…

  57. China’s COMAC challenges Airbus and Boeing for African market

    “While Congo-Brazzaville is currently the only African country openly considering the purchase of a Chinese airliner, the manufacturer is emerging as a real challenger to the global giants.”

    • Of course — the whole Global South will be knocking at COMAC’s door.
      Works a treat: China pays for Africa’s raw materials, oil/gas, and foodstuffs in yuan…and Africa then uses those yuan to buy China’s aircraft, EVs, trains, medical apparatus and electronics. No dollars involved. And those same yuan can be used to buy stuff from a growing list of other countries, using clearing via the SDB (and, soon, mBridge).
      No sanctions, no frozen assets, and much lower interest rates on yuan financing (already the world’s second largest currency for trade financing).
      Works for everybody (except in the West).

      BUT: critically important for COMAC is to get non-Western engines on its planes a.s.a.p. After all, Trump II is looking increasingly likely — and that will mean lots of tariffs, sanctions, and abandoned treaties all around.

        • Absolutely — a second term will just accelerate the de-coupling that started in his first term. He’s already said that he wants to sanction countries that stop using the dollar for trade — can you fathom that?

          On a related note: Iran — which is a technologically sophisticated country — has become a master at replicating aircraft/engine parts. I can imagine that the Chinese are looking over the Iranian’s shoulders…in preparation for the day when the US stops parts supply to China. Don’t assume that this is far-fetched: the US is already badgering semiconductor equipment manufacturers in Europe and Japan (and the US) to renege on years-old service contracts with Chinese customers.

          P.s. There are always those who try to argue that trade in yuan us unattractive because it isn’t a stable currency. ROFL. Here’t the dollar index over the past 4 decades…fluctuations of up to 50%.

          • Good insight on the Decoupling

            I will have to wait to November for election results…but looks like a new research paper in the making for me

            “Global Decoupling of the US Commercial Aircraft Industry: Trade Implications for New US Tariffs and Sanctions.”

          • Indentured servitude is the best that comes to mind.

            As for Aircraft, ask Mexican Airlines (Air Mexico?) how the S100 worked out. Sukoi offered them a bunch more airframes at no cost so they could keep some running.

            For some odd reason that did not appeal, maybe because they broke on startup and after transferring to the 6th backup the flight was off. Or they broke in the Air and were stuck paying for the pax to fly someone else when they landed.

          • @ Transworld
            Why go specifically to Mexico when we can instead ask a whole list of PW GTF customers how dissatisfied they are with RTX’s minimalist after-sales service?

            Or let’s just ask United Airlines how happy it is with Boeing, e.g. as compared to Embraer.

            Alaska recently returned a MAX 9 to Boeing, minus a door plug…looks as if the airline wasn’t satisfied with the airframe…any particular reason why that might be?

            Glass houses 🙈

          • Abalone:

            You are not worth responding to but I do like to point out logic failures. You would have fit in nicely with most of the people my former company kept on.

            A commercial aircraft program consists of a lot of aspects. A good bird is one of them (and nothing wrong with the MAX, built to spec its a good aircraft, amazing even when its as good as an A320 series and heritage back to the 60s)

            Training, support for parts (yea ll things mechanical fail sooner or latter – that is why there is a 5 year warranty on LCA)

            I value Bjorns take above most others, he feels like I do that the MAX is a good aircraft. So do a lot of others.

            The Sukoi was a decent enough aircraft, but its support was awful and the stuff that was failing was not corrected. So the same stuff kept failing and you had to keep replacing the same parts as well as the next bunch that started to fail.

            How many MAX are sitting on the ground without parts?

            For better or worse there are only two major mfgs that have succeeded in a global support system for their aircraft. Embraer would be a third though they do not crank out LCA like Boeing did and Airbus is, despite having to put off production increases.

            BBD does it with Private Jets and did it with the Dash 8 and other aircraft it no longer builds (DH builds the Otter and the CL series now) . DH is supporting the Dash 8 so they too span the globe and I have never read anything about failing to support the various former BBD (granted Mitsubishi has the CRJ line under their control)

            Nothing I have seen says the C919 is not a decent enough aircraft. Its built under something beyond regulatory capture and they know it. So they are extremely cautious with build and production, its one way to try to ensure no disasters strike.

            The C919 is like a mid generation between an NG/CEO and a MAX/NEO. FBW, engines but more a MAX/CEO build structure.

            Nothing special. The A300/330 series was special. It opened up a whole new world of aircrat type (twin engine wide body).

            The A320 was special. L attest in aerodynamics, engines and of rouse FBW (I prefer the C series programing of the control system, AF447 which dumps you into alternative control law is dumb programing in my opinion).

            ARJ is a DC-9, again, nothing special and limps along at low rate cause it has no where to go that anyone wants, even China airlines.

            Keep it internal and make all them take some and its an even playing field. Also they compete with High Speed Trains. Given a choice of an flight vs a train I would take the train, probably 3-4 hours would be a crossover point.

            You seem to think that assessment of Airbus or Embraer or COMAC is off the table but Boeing is not.

            Over here we call that two faced.

            You try to rewrite the FAA history with China, the reality is they tried their level best with the ARJ and failed. Its hard to work with a top down organization that is going to do it their way.

            While this is for others, that was when relations with China were fairly good. FAA has done the same with others as has EASA.

            I believe recognition of all other countries that have cert (Brazil and Canada for larger stuff) is linked to one of those two, not to each other. I know Japan is linked to USA.

            There was nothing malicious about the Mitsubishi MRJ Jet issues, they had not made a civilian aircraft in forever and they got off on the wrong foot.

            As the US had experience, they move the program to Mosses Lake. They had made great progress then started shifting aircraft as they realized they made made a huge mistake as did Embraer assuming the scope clause would go away or be amended.

            At which point they realized the market was not there for the costs and Mitsubishi was working on getting a fighter contract (and did get it a bit latter). So they dumped the program.

            You should educate yourself on how many regional jets are made vs the larger SA builds of Airbus and Boeing. The market is no where near as big.

            ATR can make a sort of living in the TP space, Embraer can in the Regional jet space but neither is going to be anywhere close to LCA Single Aisles.

            That is not a knock on ATR or Embraer, its just a fact. Its why BBD wanted to go big. They saw the reality.

            And while the C Series was and is a terrific aircraft, they could not manage the transition into production vs a great build. I am still in awe of BBD.

            But that also says exactly what I am pointing out. Its a system, any one part not working dooms you.

            Boieng has huge issues. I don’t know if they will correct them or not. While part of the issues are the gross failure of management, the system in place if run to spec can and did build very good aircraft.

            COMAC may indeed build a pretty good aircraft. Their reality is different that Embraer, former C Series, Airbus or Boeing.

            Now they are talking about a C939. That will be interesting as it requires a mastery of both a new tech and all the rest that goes into LCA. The C929 is kaput. It clearly was a dead end and China never got the tech for it from Russia they wanted.

          • Reuters: Former ASML CEO called the disputes over chips are ideological and not based on facts.

            “These kind of discussions are not being conducted on the basis of facts or content or numbers or data but on the basis of ideology,” Wennink said.

    • “The trailblazing ARJ21 completed its first commercial flight in June 2016. Its No. 1 high-plateau test flight took place in March 2017, and in July 2020, it carried out a successful test flight at Daocheng Yading Airport, the world’s highest civilian airport, which is perched among the mountains of Sichuan province, over 4,410 meters above sea level.”

      Appears that BA currently does not* have a production aircraft that can fulfill such task. Hehe.

      • And the production rate is currently at 3.5 p/m, heading more recently toward 5 p/m.

          • Tell you something



            Seating capacity 90 (1-class)
            78 (2-class)

            MTOW 40,500 kg (89,300 lb) STD

            If Comac could drop ~3,000 lbs from it’s MTOW and certify a variant with 76 seats, it would be Scope compliant.

            OK, it is some 7,000 lbs heavier than an E-175, based on OEW, but Comac could make up for that in pricing…

  58. “Airbus Completes New Assembly Line for A321XLR in Hamburg”

    “HAMBURG- European Plane Marker Airbus has inaugurated a cutting-edge assembly line for the A321XLR in Hamburg, marking a significant milestone in the aircraft’s production ramp-up.”


    One wonders to what extent the Spirit facilities in Kinston, Belfast and Morocco will need to be upgraded by Airbus …

    • the places you mention are not FAL, they do precursory work.

      My info was that FXW got a _partial_ line integrating the center fuselage with the special tankage.
      : for getting to grips with the changed assembly and added parts
      without entangling the regular flow of A320 frames.

      THIS or have they expanded the “XLR Tank siding” into another full blown FAL line?

      • Correct.

        “Airbus completes the #a321xlr roduction line in Hamburg. Today was the inauguration ceremony for the new XLR Structure Assembly Line for the centre & aft fuselage section in Hangar 246, a former A380 hangar. Here, the XLR receives its “heart”, the 13,000 liter Rear Center Tank.

  59. What a classy outfit!

    “Former Boeing Inspector Says Scrap Parts Were Used In Planes For Over A Decade: Report”

    “Merle Meyers, a former Boeing quality-control manager with 30 years of experience, disclosed to CNN that workers at the 787 Dreamliner factory in Everett, Washington, regularly retrieved parts from an internal scrap yard and reintroduced them into the assembly lines. Meyers claims that these practices were used to meet production deadlines.

    “…Meyers alleges that these lapses were deliberate and organized efforts to bypass quality control processes and maintain demanding production schedules.”

    “He further claims that this practice has been ongoing since the early 2000s, with an estimated 50,000 parts that were meant to be scrapped being used in aircraft construction. These parts ranged from small items like screws to more complex assemblies like wing flaps.”

    “Boeing, in a statement to CNN, did not refute Meyers’ allegations but stated that it investigates all allegations of improper behavior and makes improvements when necessary”


    So, with this stunning quality record, Boeing somehow thinks that it will be able to improve the quality situation at Spirit..?

  60. @Abalone
    “Will BA be propping it up in the meantime?”

    Yup. But BA/BCA has limited financial flexibility.

    In April, BA agreed to advance $425 million to Spirit, to be repaid in six installments:
    $36.6 million on June 12
    $89.5 million on July 17
    $150.6 million on Aug. 14
    $134.3 million on Sept. 18
    $14 million on Oct. 16

    Is Spirit able to repay BA?

    At the same time Boeing agreed to “merge” with Spirit, Spirit entered a bridge credit agreement with MS of $350 m at TLB plus 0.5%.

  61. BA analyst EPS estimates per MarketWatch:

    Q2 / Q3 / FY 2024 / FY 2025
    Current -1.24 / 0.42 / -1.25 / 5.04
    1 m ago -0.96 / 0.45 / -0.86 / 5.37
    3 m ago -0.37 / 0.76 / 0.79 / 6.69

    • The usual descending slope.
      The actual figures will be worse than the most recent consensus — they always are 🙈

    • Based on outstanding shares (~600 million), the estimates are for about a $750 million loss in 2023 and a $3 billion profit in 2025, for all of BA.

      BCA is probably a rinse repeat of 2023 when they lost $1.635 billion.

      BGS was the bright spot in 2023, which made them $3.3 billion.

      BDS lost them $1.764 billion in 2023 and is the wild card. What will be the financial effect of having the Starliner crew taking an extended vacation at the ISS be?

      Then there is:

      Interest and debt expense (2,459)

      Which in 2023 was based on ~$53 billion of LTD & STD.

      In 2024 debt will be around $57 billion (if they pay off the Short-term debt and current portion of long-term debt 1,063, they were planning to) , since they borrowed another $10 billion in Q2.

      But hey – I’m sure all of these experts have that all factored in.

    • From the article:

      ‘Boeing delivered a total of 83 aircraft in the first quarter, a considerable drop from the 130 delivered the year prior, and has stated its second-quarter total will be similar. There are over 100 disclosed orders for Boeing aircraft from Chinese customers, although the true figure is higher when including undisclosed orders. In a filing at the end of 2023, Boeing said it had a surplus of around 140 MAX aircraft in its inventory, of which 85 were due for Chinese customers.’

      ‘Boeing is still planning on ramping up 787 Dreamliner production to five jets per month by the end of 2024, despite ongoing supply chain problems.’


      The Q1 filing has updated inventory numbers:

      ‘As of March 31, 2024, we had approximately 110 737-8 aircraft in inventory that were produced prior to 2023, including approximately 70 aircraft
      for customers in China. We expect to deliver most of the aircraft in inventory by the end of 2024.’

      As of March 31, 2024, we had approximately 35 737-7 and
      737-10 aircraft in inventory.’

      ‘As of March 31, 2024, we had approximately 40 aircraft (787) in inventory that require rework which we expect to complete by the end of
      2024. ‘


      What is the upper boundary for 2024 delivery numbers if all 737-8’s and 787’s are delivered from Inventory AND they hit the 38 per month permitted for Max deliveries & 5 per month on 787 deliveries? (best possible scenario and interpret the rules in their favour)

      110 Max’s (inventory)
      228 Max’s FAA limit (6 months x 38)

      40 – 787’s (inventory)
      30 – 787’s (6 months x 5)

      83 – Q1

      83 – Q2

      574 Deliveries. Add in another ~25 – 767’s & 777’s and they hit an absolute best case ceiling of around 600 aircraft for 2024.

      Realistically, if they can manage to hit the 528 deliveries of 2023, they will have done well, when BCA lost $1.6 billion for the year.

        • Well then, they should have no problem delivering between 90 to 105 Max’s from the production line plus some of the 110 Max 8’s from the inventory pile.

          I guess we’ll see come the end of the month.

          • We can deduce how many 737 MAX BA has been making when the Q2 result is released. 😏

    • Presumably a penalty-free cancellation, due to overly-delayed delivery?

      I wonder when a replacement A330MRTT order will be announced? 🤔

  62. BBC: “Boeing to plead guilty to criminal fraud charge

    Boeing has agreed to plead guilty to a criminal fraud conspiracy charge after the US found the company violated a deal meant to reform it after two fatal crashes by its 737 Max planes that killed 346 passengers and crew.”

    IMHO these off court “bargained” judgements in the US judicial system are a pox. Misuse galore.

    • “Boeing pleads guilty to fraud for deceiving FAA in certifying 737 MAX Boeing accepts DOJ plea deal “We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms”

      • The deal still has to be approved by a federal judge in Texas — and there’s a considerable chance that he’ll block it and order a trial instead (he was effectively ordered to do so by an earlier ruling from the 5th Circuit Appeals Court).

        “Paul Cassell, a lawyer for victims’ family members, said he plans to ask the federal judge on the case to reject the deal and “simply set the matter for a public trial, so that all the facts surrounding the case will be aired in a fair and open forum before a jury.””

  63. The A220 has opened up a lot of new markets for operators, such as Delta, JetBlue and Breeze, connecting city pairs that previously haven’t had non-stop services.

    Air Canada has previously said that the arrival of its A220s allows it to enter longer, thinner routes in North America.

    The aircraft also gives them a lower-risk ability to go into new markets with a lower trip cost than would be possible with narrowbodies.

    Breeze, for example, has just opened up Huntsville, Alabama, to Los Angeles [with A220-300s]. That’s never been served with a non-stop.

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