Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Bjorn’s Corner: Air Transport’s route to 2050. Part 13. March 14, 2025
Spirit Aero teeters on bankruptcy, but what’s new about that?
By Karl Sinclair
Feb. 10, 2025, © Leeham News: Spirit Aerosystems (SPR) of Wichita (KS) filed an 8-K report with the Securities and Exchange Commission today with a troubling statement in its Investor Presentation:
“Due to Spirit’s cash flow and liquidity position, management expects to make a going concern disclosure in its 2024 Form 10-K. The Company anticipates that it will conclude in its 2024 From 10-K that there is substantial doubt about its ability to continue as a going concern.”
Going concern is an accounting term indicating that a corporation has serious doubts about its ability to continue operations for the next year.
Given Spirit’s important position as a Tier 1 supplier for Airbus and Boeing, this is a troubling development for both OEMs. But it’s not unexpected. Airbus and Boeing have been propping up Spirit for years with hundreds of millions of dollars in advance payments or loans. Without them, Spirit probably would have filed for bankruptcy long before now.
Preliminary Results
Spirit published these results, detailing them as preliminary and unaudited. The reason was revealed to be discussions with lenders concerning its senior secured term loan B credit facility.
All metrics, except net cash from operations and free cash flow (marginal increases of $22m and $49m, respectively), went in the wrong direction.
Net revenues were down, cost of sales increased, gross profit went into the red by $704m (year-over-year), cash decreased, and total debt increased.
Heavily tied to operations at Boeing, it was no surprise that Spirit would suffer due to the 53-day work stoppage, primarily in 4Q2024.
Source: Spirit 8K, Feb. 10, 2025.
Year-over-year, Airbus deliveries increased in every program, with the lowest totals in the A330 (+1) and the A350 (+5) programs. Narrowbody shipments increased by 30% in the A220 program and 13% in the A320 family. Total deliveries increased by 14%.
Airbus has planned increases to the A220 (14/mo) and A320 family (75/mo) by 2026 and 2027, respectively. This translates to 42/qtr and 225/qtr, up from 26 and 181 in 4Q2024.
Every Boeing program showed a decrease, with the exception of the 787 Dreamliner, which has its Final Assembly Line (FAL) in non-union Charleston (SC). Total Boeing deliveries dropped by 18% in 2024.
Spirit wants to amend its credit agreement to remove the requirement that the audited financials be accompanied by an unqualified audit opinion regarding its status as a going concern solely for FY2024. Lenders who agree will receive a 25bps fee.
In 2024, Spirit booked a $401m forward loss charge related to the 787, A220, and A350 programs. In 2024, both Airbus and Boeing agreed to provide Spirit with financing of $107m and $350m, respectively. At year-end, $37 m and $150m of that remained undrawn.
FCF usage is expected to be $700m through 1H2024.
Tariff impacts on Spirit, Airbus, and Boeing
Source: Spirit FY 2024 Investor Presentation.
Aboard Air Force One on Sunday, as he traveled from Florida to New Orleans to watch the Super Bowl, President Donald Trump announced his intention to levy 25% tariffs on aluminum and steel imports from Canada and Mexico.
Canadian Industry Minister François-Philippe Champagne responded in a social media post that “Canadian steel and aluminum support key industries in the US, from defence to shipbuilding and auto.”
This also includes the commercial aviation industry.
Related Article:
There is an old adage in the aviation industry, that says that an aircraft is not sold until the check clears and the customer has taken possession of the plane.
One must ask the obvious question: How do tariffs affect Spirit and its two biggest customers?
As things stand, Spirit is the corporation responsible for paying for any tariff increases related to raw materials coming in from Canada and Mexico. However, Spirit’s exposure is unclear.
In the Boeing 2024 earnings call, officials detailed how Spirit’s production and quality improved since the Alaska Airlines door-plug blowout on Jan. 5, 2024. Once a deal closes, both Airbus and Boeing will be on the hook for any cost increases.
Spirit already has to pay Airbus $559m to take over its portion of the operation. Do tariffs further devalue the assets, and are there provisions in the contract for that?
There is also the possibility that the brakes will be pumped a little. At the same time, negotiations take place with the Trump regime to garner a carve-out due to “national security implications.”
Customers avoid tariffs
During the first Trump administration, Delta Air Lines refused to incur the costs of tariffs levied on Airbus products. Airbus had to absorb the tariffs on its aircraft delivered to US customers. Any tariffs now would have to be absorbed by Airbus and Boeing. Any tariffs Spirit pays before its dismembers and parts are merged into Airbus and Boeing may either be passed on to its customers or “eaten” by Spirit, given its circumstances and near-bankrupt condition. This will be a matter of discussion between the three companies.
Airbus and Boeing contracts with customers contain cost escalation clauses, but LNA doesn’t know how tariff tax treatments are factored in. We presume that after the first Trump Administration imposed tariffs, this possibility is now included in subsequent contracts and mostly likely excluded from customer liabilities.
Boeing contracts are also understood to include caps on price increases.
The expected result when Harry ordered wichita to be sold ..
” When I say I changed the culture of Boeing, that was the intent, so it’s run like a business rather than a great engineering firm. It is a great engineering firm, but people invest in a company because they want to make money. ”
Harry Stonecipher, 2004, former CEO of The Boeing Company, reflecting on the late 1990s
May the fleas of a thousand camels infest his armpits as he leaves heelmarks in the sands of time.
Spot on.
He was absolutely correct.
The engineers work for the stockholders. Not the other way around.
No engineers, no stock.
The idea is a company makes stuff for which it needs product and the engineers design the product.
Kill off the company and the stock is worthless.
Shares are an investment, stock holders are investors not owners
Invest in a stock, get a return.
No product, no return.
the perfect company, in the eyes of every CEO ever, and every MBA factory in the educational universe is as follows:
makes no product, touches no product, owns nothing except a legislated middleman role that allows them to put a vig on every item of some class sold.
for instance, the alcohol “distributors” in Massachusetts. no alcohol can be sold in the state direct from the manufacturer to a retailer, it must all go through a “Distributor” for “reasons”. in practice this means that some electronic paperwork flows from the manufacturer, through the “Distributor”‘s automated computer system and a copy goes to the state alcohol regulator and to the retailer. some money flows (electronically) from the Manufacturer’s bank, through the “Distributor”‘s bank and then on to the state alcohol tax collector (fully automated of course). the actual alcohol is then directly trucked from the manufacturer to the retailer in the manufacturers truck.
for this “service” the “distributor” collects a 20% vig. they never actually touch or handle any physical objects. they rent an office and some computers to do the routing.
the perfect company, no product, no employees, no infrastructure, pure legislated profit.
Boeing seemed to believe this was possible as an aircraft manufacturer, but we can all see this is not possible.
The shareholders select the board and its chairman, they select the CEO and tell him how to run the business. The board decides where the money goes, so much for shareholders and so much to develop the company with top engineers, satisfied cusotmers and new programs. If they are too greedy the company will fail and someone else will pick up the remains. The late shareholders, employees and suppliers will hurt.
Can anyone tell me what FLE and S-15 means?
The Fixed Leading Edge (FLE) is a part of the Airbus A350 aircraft that Spirit AeroSystems designs and manufactures.
Spirit AeroSystems Delivers First A350 XWB Section 15 to Airbus
https://investor.spiritaero.com/news-presentations/news-details/2012/Spirit-AeroSystems-Delivers-First-A350-XWB-Section-15-to-Airbus/default.aspx
Google is your friend
How can Spirit be described as ‘teetering’ on edge of bankruptcy.
The takeover deal by Boeing was approved by shareholders so is in progress and just months away from becoming a fully owned subsidiary.
Finances may dire but any cash flow that’s needed will come from Boeing, or financial guarantees will be in place.
The claim is totally weird
@Pedro
The only thing that tells me is that they cannot bank the merger yet. While unlikely there is a scenario where the acquisition could fall through. That is the only scenario where Spirit fails. If they were really close to filling then DIP financing would be lined up.
“Due to Spirit’s cash flow and liquidity position, management expects to make a going concern disclosure in its 2024 Form 10-K. The Company anticipates that it will conclude in its 2024 From 10-K that there is substantial doubt about its ability to continue as a going concern.”
Going concern is an accounting term indicating that a corporation has serious doubts about its ability to continue operations for the next year.
—————————————–
Take it up with mgmt. They’re the ones issuing the going concern statement.
But Spirit, as independent company, is not continuing operations this year is it.
Its major customers , Airbus included, have provided credit and would continue to do so.
Plus they have to pay Airbus $500 mill or so to ‘buy’ the Airbus structures business and they currently dont have the money for that. But its all part of the takeover too.
Gosh, the 4th paragraph in the Spirit story includes this:
“Airbus and Boeing have been propping up Spirit for years with hundreds of millions of dollars in advance payments or loans. Without them, Spirit probably would have filed for bankruptcy long before now.”
And near the bottom, there’s this: “Spirit already has to pay Airbus $559m to take over its portion of the operation. Do tariffs further devalue the assets, and are there provisions in the contract for that?”
Seems the story had all of this covered.
@Duke: Did you even read the story? The fourth graph talks about Airbus and Boeing keeping Spirit alive.
I saw that , that why I couldnt understand the headlines.
The comments reflected what others assumed from the headline, that actual bankruptcy was a real prospect.
And the headline reflects what a “Going Concern” means under US accounting standards. You might do a simple Google search to understand US GAAP vs NZ.
Going concern is a common accounting term.
Duke refuses to accept reality, has nothing to do with GAAP down under or not.
The “merger” is still awaiting regulators’ approval and disposal of Airbus business to proceed.
“that’s needed will come from Boeing, or financial guarantees will be in place.”
Until such arrangements are in place.
Don’t hold your breath waiting for Chinese regulator approval of this deal.
And yes, Chinese approval is required for the merger (or splitting) of any foreign companies doing substantial business in China.
For example:
https://www.reuters.com/markets/deals/china-slows-reviews-mergers-involving-us-companies-wsj-2023-04-04/
https://arstechnica.com/tech-policy/2023/04/china-fights-us-export-bans-by-slowing-down-reviews-of-tech-mergers-report-says/
No need to look for any logic: the Chinese will relish the opportunity to cause delay, and will want concessions.
New Zealanders have a totally weird view.
to be fair, they are living upside down and the toilets all swirl in the wrong direction.
Can’t be all bad. After all, Elon Musk has his doomsday shelter there, ready to house him in the event it all goes sideways.
Now if we could just get him to go there!
I mean its time NZ took a hit for the rest of us.
NZ recently changed a few laws to address the billionaire doomsday bunker issue.
Does that mean we are stuck with him?
Peter Thiel was the tech billionaire who took a liking to NZ , got citizenship and built a place
Musk has never been there.
Lucky them
If I understand correctly,as soon as a company is declared bankrupt the administrator has the right and duty to do whatever it takes to maximise compensation for the creditors.At this point they can make delivery of parts extremely expensive instead of the current underpriced parts.
@Grubbie
Yes and no…it is a small world. No supplier at the bottom of the supply chain is well-served stopping deliveries. The products these suppliers make are tailor made to the end product. Nobody else is going to buy it.
Mutually assured destruction. But to your point…price locking is a perfectly valid reason why Boeing will be hard-pressed to ever let Spirit go through Chapter 11. Boeing assumes whatever pricing structure instead of allowing a judge to modify terms. Better to float Spirit today than re-negotiate in court.
That applies to Airbus as well.
And in fact, going Chapter 11 would mean they don’t have to pay Airbus anything (or vastly reduced) – still don’t get why they should pay Airbus anything. Airbus was dumb enough to get involved with them.
That said, Boeing delivered more aircraft in January than Airbus did. Not at all sustainable but that made end of the year rush means Airbus workforce is exhausted trying to meet unrealistic delivery figures.
In the meantime Boeing methodically mfg 20 x MAX (not sure if any P-8 or E-7 in there) and 787s (mostly).
Airbus will be back to normal next month and beat Boeing handily. But it is funny to see Boeing bounce back for a month when nada for years.
Airbus has a $10 billion euro rainy day fund, what does Boeing have?? A $54.4 billion financial hole.
Last but not the least, administrator is not in the business of extraction! These guys have a reputation they want to protect.
Oops
extortion*
Extraction is their job
I doubt whether the exhausted Airbus workforce is produced as few as show A32X series planes in January, though.
Its funny to see them scramble for no net gain.
Now they have to make up for a slack January so at the end of the year when production targets are not met its another mad scramble. Shades of the Soviet Union.
Steady and consistent is the way to go.
tw
Let’s see how soon BCA can make more than 38 MAX a month and who has the last laugh.
No disagreement Airbus is kicking their plane down the runway.
Its just funny to see a panic when there is zero need.
Nice of them to give Boeing a moment of glory though.
“Its funny to see them scramble for no net gain.”
“Its just funny to see a panic when there is zero need.”
I can’t stop laughing. Planes delivered means money in the bank; planes delivered means production slots are now available to makes other planes…
Wait to see how many Boeing delivers this month.
BA still expects cash drain in 1H. How much interest is Boeing paying every quarter? 🤔
The P8 seems a positive in the 737 program, little competition, probably good margin. I guess it’s future is coming under pressure,
Airbus is launching a possibly superior alternative A321 MPA.
https://www.airbus.com/en/newsroom/press-releases/2025-02-airbus-signs-new-study-contract-to-define-frances-future-maritime
Boeing should at least upgrade the P8 with todays engines, increase range.
https://07185918574543712684.googlegroups.com/attach/c2bb917e3d4c/Airbus%20A321%20MPA%20concept%20keesje.jpg?part=0.1&view=1&vt=ANaJVrGYVF-YWkdXnTtBlheAAeMSe0_Hw3LFKIEL7zM10FklSBh6MRucerB1YqZ2ZtiQdpFt-UHBjIp5tvkMjP-nTer7YcY7aFp9E3U3qcWntq9LS4dipSM
Keesje wrote…. Boeing should at least upgrade the P8 with todays engines, increase range.
Range is a non issue, you can tank it. Some think the NG engines are more robust in a salt air environment
Check out the operational flight level of an P-8. There is a reason why the P-8 lacks MAD. There is no salt up there.
Does the US Air Force has enough tankers like KC-46? What is the range of an A320neo with XLR tanks?
Base A321XLR has 4700NM range for typical commercial use.
Flying slower, lower and lighter, having an additional forward fuel tank could increase flight time to 12-14 hours I estimate. Inflight refuelling could still be an option (A400 like hose). Radar could become a Rafal like multi function AESA, air ground, air-air, mapping, weather and EW
radar.
I think other EC members could jump on this train, even UK, Germany, Italy, Spain, Portugal, Canada Scandinavia and Benelux. Things like budgets and loyalties are changing fast.
Many used MPA’s changed ownership over time. Like the German P3s.
Equipped with state of the art radars, sensors and a new air-to-air refuel capability, the P-8A is scheduled to receive periodic future enhancements to keep pace with the ASW threat.
https://www.navair.navy.mil/product/P-8A-Poseidon
Combat range: 1,383 mi (2,225 km, 1,200 nmi) radius with 4 hours on station for anti-submarine warfare mission
@Frank P
A range of 1.200 nm and 4 hours on station at 45o kn is a distance auf 4.200 nm. Therefor a basic XLR with a full pax load could stay 1 hour longer on station.
Range of P-8 already includes addtional tanks of about 6,800 liter.
Airbus is late to the large Maritime Patrol Aircraft game. Even Germany was not interested in what would be an endlessly protracted development.
People are assuming the USN can’t read the numbers. The very specifically selected the -800 fuselage. It more than met current needs and had future expansion. they could have gone with a 900.
The MAD detector election was a decision based on the development of Sub to Air Anti Aircraft Missiles. Spend a lot of resources for anti missile defense or get out of the envelope. MAD drop also saved weight.
The MO is to prosecute from altitude and drop a torpedo on a Sub. Active Sonar Buoy vastly better than MAD, you need to roughly know where a sub is before you can use it.
The P-3 systems had been modernized all along and they morphed those into the P-8 so they had a solid working system and just the usual aircraft bugs to work out.
They have since added new systems and updated the older ones as needed. Older aircraft will get those retrofitted as they go back into depot level maint.
France is starting off with either the old Atlantique systems or all new. All new means a hugely protracted development. Regardless they are starting far behind the P-8.
For a jet, drop the MAD makes sense on ops, a TP thrives down low a jet does not. An A321 will weight more, take more power and it seems they need the space. The A320 seems to not meet the need and the A321 probably a lot too big, but they have nothing in between (Boeing had the 900 if that was deemed required).
Like buying the C-130, France would be far better off to spend those huge bucks on something they need (more subs) than try to compete with the P-8 with a product that is 20 years behind.
Apparently the A321 fuselage was selected over the A320 because of the requirement to hold the new hypersonic long range anti ship/air missiles internally. In combination with the AESA multirole radar. And 101t MTOW and cabin flexibility.
I suspect there will be a forward center tank for additional range (+ 2hrs) and c.o.g. management during take off and landing.
It will have the latest systems, sensors and warloads.
It can’t have any of that until they make them.
And if you want to carry a fancy missile, you got lots of A330MRTs to do that.
As they would say in Mission Impossible
Your job is to hunt and kill subs.
@TransWorld
re: >>The MAD detector election was a decision based on the development of Sub to Air Anti Aircraft Missiles. Spend a lot of resources for anti missile defense or get out of the envelope. MAD drop also saved weight.<<
A submarine can't detect an aircraft in the sky. It can hear the dipping sonar of a helicopter.
The MAD decicion was related to efficiency of turbofan engines compared to turbo-prop. Turbofan are more efficient at altitude. The P-8 doesn't even have any range advantage over the P-3. The P-3 is slower and can stay longer with two engines shut down.
You don’t shift to new engines just because they are new.
The LEAP has had more than its share of issues and the latest Rev has not proven itself either.
Boeing can cover the cost of the P-8/E-7 withing the MAX build as they have a lot in common and the people working on it are current with NG. KC-46A is more of a cost issue as its going to be the only variant built, no Civie models.
New engine means new wing. None of which is justified for the mission. And all the costs to shift from a NG to a MAX that returns no gain.
Airbus on the A330MRT is stuck in a box. The numbers built are not close to KC-46A numbers. Equally people converted A330CEO and may continue to do so. So for Airbus to shift makes some sense though its going to cost for the change.
Engines will be good for 50 years. There are huge numbers out there.
@Mhalblaub
The tanker acquisition was for something like 170-180 total. I would have to look up the exact number but the order is roughly 2/3 delivered. There is no secondary tanker out there today. Even if the USAF wanted to go A330…it would still need years to adapt to USAF specifications.
USAF will need to decide in about 2 years whether it wants more KC46 or not. Now that the freighter version is gone, this is the final variant of the B767 left. Boeing will want a commit for more orders or the decision about future acquisition will be made for the USAF by default. There would be nothing except for A330 in that scenario.
What the USAF really wants is a freighter compatible with the whole NGAS strategy that is somewhat stealthy. That is…unfunded.
It’s not about how many KC-46 USAF ordered. My question was, are there or will be there enough aircraft to additonaly supply the P-8s.
There are about 400 KC-135 still in US service (of ~800 ) and just 100 KC-46 built.
>>Even if the USAF wanted to go A330…it would still need years to adapt to USAF specifications.<<
KC-30 was already refueling USAF fighter jets over Iraq in 2014, E-7A Wedgetail and B-1B in 2016. Just because it did take Boeing years to build an aircraft according to specification why do you think Airbus would produce the same mess?
Problem for USAF and Boeing will be the small amount of 767 aircraft to be produced per year. Airbus still produces 30 A330 per year with a backlog of about 240 aircaft. Last official order by Cathay Pacific.
@Mhalblaub
From what I can tell, the current tranche of tanker orders was intended to be followed by another order the (the KC-Y) if memory serves me. The tanker slotting into the KC-Y will by definition be the A330 if there is no other option (or continue to fly really old KC-135).
I suspect Boeing will not be entirely enthusiastic about aggressively bidding on another tranche given the low volume.
@PNW
There is something to be said for having a highly reliable engine on wing. That engine would go “decades” on wing if it really wanted to. The utilization is nowhere near enough to ever pull it off anytime soon. The only real consideration is having fundamental access to spare parts and service. It will be a solid 30 years before that is ever a concern. The same goes for the tanker engines
And don’t discount throttle back.
If its not an urgent mission you can cut down the thrust and save SFC as well as wear factor.
Airlines tend to be late and need to push it.
The Kawaski P1 is the best maritime patrol aircraft in the “democratic alliance” arsenal. the UK, EU and other “Western” allies should stop wasting money on “bespoke” maritime aircraft that in the case of the P8 is an obsolete airframe, no matter how you look at it.
The A321 is at least a fly by wire architecture that allows for easier “plug and play’ modular insertions of digital components while the P1 is next generation fly-by-optic fiber, a faster data transfer implementation architecture. P1 currently has better loitering time than the P8, is better to fly low and slow and has MAD and is specifically designed and built for the maritime role.
The Boeing 737NG P8 and E7 is dated as a platform and is a “dead end” platform. The USAF, Navy, UK and EU nations should, in my opinion just buy the Japanese platform and save their R&D money for other pressing weapon systems.
The missions systems inside the P-8 and presumably the P-321 too are what matters
The airframe doesnt matter
Indeed the P-3 used an ever more obsolete airframe, based on the last gasp turbo prop medium haul airliner the Lockheed electra. Same with the British Nimrod based on the Comet airframe
if the japanese airframe was used it still would be fitted out with US or French equipment
The idea that A321 as a maritime ASW aircraft would be ‘digital plug and play’ is comical
The F-35 isnt even plug and play let alone an airliner for the late 70s.
The other hoot is, with the low hours a P-8 sees, the airframe is good until the heat death of the Universe.
Branaboy just does not get it. Frankly the FBW is a weakness, you got to work around all that delicate stuff. With a good old wire and pulley control system, you just hog it out, beef it up and good to go.
Its why turning an A320 into a freighter was such an issue. Any Boeing aircraft you just cut out a door and away you went. Granted if you PLANNED for an F, then its ready to hog out as well. Airbus never planned for any of it.
He forgets that despite a hugely corrosive environment and incredible abusive no maint on it, the Aloha 737 hung together with a good chunk of its top blown off (the inspection by Aloha had been pencil whipped).
Or that the A320 is 40 years old build (and design older still) and I challenge anyone to call that new.
He is funny to read though.
“Its why turning an A320 into a freighter was such an issue.”
Hilarious!
Airbus ran the FBW down the side of the A320/321 that had to be rerouted for the cargo door. One of the issues that had to be dealt with.
F35 is not plug and play because of the 1980 software architecture which Lockheed is working on to update in its delayed Tr3 iteration which it is trying to reconfigure into a more modular design, thus the difficulties and delay.
The P1 has a more modern modular software architecture with the upgraded Grippen E/F having the best upgraded software architecture which allows for easier addition of new hardware via ” drivers” and functionality via “apps” with having to do major rewrites of large part of the aircraft’s software. Only Israel has been able to do major additions of their kit to the F35 because they have been given access to the source code of the current software.
Yes I am also very aware that buyers of the P1 would want some of their kit in there. It is easier to do so with the P1 than the P8 or the F35. Case in point being the UK.
@TW, I will refrain from commenting on your posting on use of pulleys and cables on large commercial aircraft. Current trends in aircraft design by all the major manufacturers globally using “fly by wire” and “fly by light” clearly shows that the pulley and cables you wax lyrically about are now outdated.
An airliners flight software – they all have it even with pulleys and cables- doesnt have any other software ‘plugged in’…ever.
There is no central operating system used for all functions. In fact its a ‘feature’ that they have multiple independent processors running simultaneously, and it could be different software doing the same job.
The A320/321 series still had ‘cable’ control of the rudder outside the FBW system. The A321XLR changes that for the first time
I would recommend the A400M as a patrol aircraft. About the same range as an A321XLR but slower. That translates into more time on station. Could even shut down two engines for even longer loitering times.
https://news.usni.org/2025/01/20/report-to-congress-on-u-s-air-force-next-generation-air-dominance-fighter
“U.S. Air Force officials paused a planned contract award for the Next-Generation Air Dominance (NGAD) to rethink the aircraft’s requirements
This is really about Boeing, who were the potential contract awardee saying to USAF ‘ we dont do money losing contracts anymore’
Sounds like Boeing wants Cost Plus and USAF wants Boeing to take some risk.
This is me reading between the lines of the unknowns about NGAD and the knowns about Boeings financials. But we will see if it really is a ‘rethink’
Duke: That is months old news.
The bottom line is the USAF wants cheap and the airframe they need to meet their specs is about an F-111 size bird. The bigger the bird, the higher the cost and lets not even talk about operational costs.
That is the USAF, they got big eyes and no budget.
Buy more F-15EX. Upgraded, carries a bazillion missiles, great range.
As good as the turkeys in Bekaa Vallay…
The NGAD is 55-65,000 lb max takeoff weight. Its not F-111 sized.
My view is that its Boeing wanting a cost plus contract type for FSD. They may have even lost money on the existing development awards
I think Chinese developments, technological, development speed, ramp up and costs made DoD & USAF smell the coffee.
And no, they’re not just copying our brilliant technology.. New realties require new approaches.
@all
NGAG and NGAS are suspended because they are too expensive and because they are not necessarily what this country needs. This is not the worst decision to make. This a multi decade decision. It’s better to pause a few years and commit to something with higher confidence. It’s ok to push back every now and then on a general saying the sky is falling.
Musk for all his other baggage may be right on this one.
I don’t think anyone is pausing on NGAG / NGAS. They are adjusting to unexpected new realities.
The Trump family seems worried like hell on what they see in China. Technology, money, vision and they don’t listen to anyone, just keep on moving, much faster than we can taking over every industry.
They are developing 5th+ 6th gen stealth aircraft, aircraft carriers and space stations while Trump forbids paper straws, gender equality & fights US credibility every day.
Four years to go? Boeing now needs new energy, programs, financial stability and customers.
@keesje
The cost was the biggest factor. Way too expensive. Sometimes recent experience can shatter long-held assumptions about future needs. Yes China is blazing ahead…but are they blazing ahead blindly?
It is the job of the Pentagon and defense contractors to paint a narrative that other world powers will dominate without immediate and unchecked commitment to spending on new programs.
Nor do I worry about any technological shortfall in the long-run. DARPA is full of all kinds of whiz-bang platforms that they simply do not talk about. But you did hit the nail on the head with Boeing…they need new energy now. But for a company that cannot get a Max7/10 or 777X over the finish line, I have a hard time believing a new program will help until they clean up their current mess.
The MAX -7 (A220) and MAX-10 (A321) seem bypassed anyway. Scrapping the -7 seems likely. Hardly a backlog left.
Delaying a new NB programs seems sensible only if you don’t look beyond next year. Airbus isn’t done yet with A320 & A220 series. New A321 MPA confirms. US civil aerospace must move on.
https://07185918574543712684.googlegroups.com/attach/57f1d448a2948/Airbus%20Future%20A320%20portfolio.jpg?part=0.1&view=1&vt=ANaJVrFScTjljL0dtYJ0_wxh_Czf-w716PphlEVhsMrwvQ3jRKHubGe_8xhKHTHjDlNFPxZFKJvXMJzPf4uPSIK5RtWpf4dvjELdhz2sAKYpFKVrgktSu-s
@keesje
That is certainly one way to clean up the mess and I certainly do not necessarily disagree with your logic. Cut your losses and move on. Lets call the Max7 what it is…the Southwest plane. You don’t design an airplane for one airline. The Max10 is only making sales (not deliveries) because the A321 is sold out and it is cheaper for airlines that do not need the full A321 benefit. The Max will alway play second fiddle to the neo. Airbus has future improvements available on the neo. Boeing with the Max has none. While you are at it, cancel the 777-8.
Strategically, Boeing needs two new platforms not one…something that covers 150 – 250 seats. You dont do that with one plane competently. Ideally the larger plane would contemplate freighter applications because the B787 is not there (yet anyways).
Be mindful too that not having an NGAD frees up the bench depth to competently support a new commercial launch.
You should start out that the A321 MPA is 10 to 15 years from reality. Its also niche. Its the systems not the aircraft that count and MAD is no longer deemed a benefit. That is open to disagreement, but active sonar buoys are vastly more effective. And keep in mind, its going to be off the NEO, not any future version of the A321. Do the super wing and you still have to keep the older airframe in production (and that assumes any orders past France which is not likely, Germany would have been the most likely)
As for the MAX-7, shrug. If South West after the shakeup still wants it, its probably no real cost factor to build it. Work is done, a number have been built. Make what money you can.
China is really not part of this discussion. Its really off track but am responding as its an area of deep interest, Scott will shut it down soon.
The -10 is selling in enough numbers that its also worth production.
The -8/9 compete very well against the A320, bread and butter.
777-8 can’t be cancelled, too many freighter orders. You may not see it in a Pax version but its selling nicely as an F. It should be noted so is the 777F, its the only thing keeping the line going and it returns a great profit.
People keep buying MAX because its the only thing they can get in numbers as Airbus is extended far to the right delivery wise. Sure they can snake out one or two occasionally but people want the aircraft not any bennies Airbus offers.
The Airline growing is what counts.
“…777-8 can’t be cancelled…”
Anything can be cancelled.
All that’s needed is one or more of:
– lack of funding;
– lack of resources;
– lack of sufficient uptake.
Boeing has all three to a greater or lesser extent.
If a solution to that thrust link issue is too costly, the whole program may get axed.
They pause it because of the presidential handover and let the new team have a final say. Now the SV tech bro all want a piece of the carcass. It’s a society of grifters.
If the past is any indication, more time and more money spent.
https://www.defensenews.com/breaking-news/2024/12/05/air-force-defers-ngad-decision-to-trump-administration/
The US is about to retreat back to the Western hemisphere, leaving others to hold the bag
Hmmm, should not those countries be creating their own bags?
Poland has taken it seriously and as I recall up t o 4.5% GDP on defense spending.
Something about memories of the last time their neighbors came calling.
Flip is that I count at least 4 areas that are now items of US Strategic interest (that is the US version of the East Asian Sea though it may soon be the Gulf of California)
Granted this is more than wildly off topic.
What till Trump finds out how little of its GDP Taiwan spends on defence – compared to say distant Singapore !
I can see a Nixonian type ‘beautiful deal’ coming ?
Oh no, not another one. I can only take so many beautiful deals and being so rich I just don’t know where to spend it.
@TW
I enjoy playing on the margins of this topic area. If I may steer it back closer to the intended realm of topics…the USG only has so much money to spend despite what many want to believe. Sometimes that means buying what is affordable instead of what is most capable.
The KC46 is not the most capable but it is the cheapest. To the extent it works, I think the taxpayer got a good deal (at Boeing’s cost). The components that go with the tanker will get there eventually. Same goes with the new Air Force One. If Boeing is gullible enough to low-ball the bid that much, then the taxpayers got a bargain.
Personal belief…I think you are going to see some cold feet on massive new defense outlays that are multi-decade bets. You can spend a lot of money and in the end only pay for product that is not even relevant. The biggest risk Boeing Defense has is staying relevant. There are no flagship programs at the beginning of the life cycle. This might be the perfect opportunity to split the company so that BDS can be acquired by an entity that can focus on defense while Boeing concentrates on commercial. I like BDS + Northrop but that is just me.
@Casey:
I would have no issue with Boeing defense split, but the former sane US govt felt it had let too much consolidation take place.
What would happen in the current whacky present where we are going to occupy Gaza and kick out the Palestinians , not a clue.
You are going to see no cohesive policy until Trump is gone, be it he blows a gasket or JD (I mean Colonel Mustard) Does him in in the Library with the Candlestick.
I agree on the KC-46A and it will prove out (and be extended sans Trump as its really the only game in town that makes sense)
AF1 is simply a joke and it was Calhoun sucking up to Trump.
The rest is a good portfolio, it needs execution like BCA but a lot of programs aka AH-64, P-8 , T-7A and E-7 that work or can work
Right now Boeing does not want to bid on anything as its just a mess no one wins until Trump is gone.
There’s a difference between spending money and sqandering money.
China developed top-notch AI LLMs for a few million dollars. Similar models in the US cost hundreds of billions of dollars.
So, by extension, how efficient is US defense spending?
Is it the percentage of GDP that matters, or what’s done with the money?
@Bondi
There is a lot of truth to that statement. Keep talking like that and you might have a career in senior management available to you at Boeing.
There are a lot of companies that will help you spend your money. Who are they really looking after.
It’s over. Don’t you know??? You can only live in your fantasy for so long. The earlier you wake up, the better. The US is spending more on paying interest than defense. The US spent two trillion dollar for Afghanistan. What’s the result it has to show? The US is on a debt spiral totally out of control. It’s a matter of time when the creditors are going to dictate the terms. Listen to what this guy said. BTW look up who he is before you hit send of your reply. He makes decisions, you don’t. 🙂
https://pbs.twimg.com/media/Gjrklh1XAAAMNea?format=png&name=medium
https://x.com/austinjdahmer/status/1826243645588304164
On that note, just this week:
“Billionaire Ray Dalio warns America faces ‘economic heart attack’ if it doesn’t radically reduce U.S. fiscal deficit”
https://fortune.com/2025/02/13/trump-national-debt-fiscal-deficit-economic-heart-attack-ray-dalio-bridgewater-hedge-fund/
In their minds, many US-ians are living in an era that no longer exists.
‘Hmmm, should not those countries be creating their own bags?’
This is how the US has maintained its power base, over the past 50 years. How it can influence other gov’ts and exert pressure, without having to send out the Marine quick reaction force, every time there a problem.
For instance:
How many billions/trillions in revenues were lost, because the Russians invaded Ukraine? The knock-on effects are enormous.
If there was a US base in Ukraine, or a military presence there, you think they take that chance? We’re not talking Syria here, where mercenaries were used (Wagner) then left to be ground into dirt.
Having bases in South Korea, Japan, Singapore, the Middle East, the Caribbean et al. – protects US economic interests.
For instance:
In Australia, the US has a bunch of joint bases.
Australia joint bases
Pine Gap – Joint Defence Facility Pine Gap (JDFPG), near Alice Springs, Northern Territory.
Naval Communication Station Harold E. Holt – located on the northwest coast of Australia, 6 kilometres (4 mi) north of the town of Exmouth, Western Australia.
Robertson Barracks – located in Darwin, Northern Territory.
Australian Defence Satellite Communications Station – located near Kojarena 30 km east of Geraldton, Western Australia.
Other U.S. bases in Australia are present and this list does not include ADF bases with U.S. access. The U.S. military has access to many ADF training areas, northern Australian RAAF airfields, port facilities in Darwin, Fremantle, Stirling naval base in Perth, and the airfield on the Cocos Islands in the Indian Ocean.
What does that provide for the US?
Well, for one thing, America does not have a natural supply of bauxite, the mineral where AL comes from. Australia, a friendly country, has some of the world’s biggest reserves. Guinea, Viet Nam, Brazil and Jamaica are in the top 5.
It ensures that the raw material will always flow to the US. Also from the Caribbean, if US produces buy from there. Or it safely flows to Canada, who smelts it due to lower energy costs, then sends it to the US.
Economic protection.
The US signed the Budapest Memorandum in 1996, committing itself to the defense of Ukraine in return for Ukraine turning in its Soviet-era nuclear weapons. Today, we see what US “defense guarantees” are worth — nada (except for Israel, of course).
Saudi Arabia saw that years ago in its Yemenese conflict, and The Philippines is currently seeing it in skirmishes in the South China Sea. You can ask Egypt about it, too — a country that has now turned to Russia and China for its defense products.
Lots of hot air about “bag carrying”.
@Bondi:
Egypt is welcome to the Russian junk they can’t get as well as Chineese junk that is not supported.
Keep in mind Egypt is buying Rafael. They can by Typhoon.
But they are not buying Russkie or Chinese stuff on US aid, you have to spend that in the US.
So where does Egypt get the money? Suez Canal is way down, them pesky Houthi.
In the meantime Russia, Turkey and Egypt are all fighting over Libya.
Another delighted customer:
“Air India will Not Exercise its Boeing 787 and 737 MAX Options Order”
https://aviationa2z.com/index.php/2025/02/13/air-india-will-not-exercise-its-boeing-options-order/
…and that’s even before the effects of tariffs kick in…
Take it for what its worth. Those are options. You don’t think they can’t wink wink nod nod?
Right now Boeing is trying to stabilize and Air India can twist the arm a bit.
Boeing has its work cut out for it and years to correct the programs if they can though the 787 lately is looking better.
And Boeing is still getting orders as Airbus is having a hard time finding any slots.
Being number 2 is not all bad.
in the meantime you see Airbus dropping green project left right and center.
An interesting piece from AW and Richard A:
Opinion: China’s Airliner Demand Is Back—And That Raises Big Questions
‘The downturn was particularly tough for Boeing, due largely to the 737 MAX grounding—China was the first to ground the type and the last to reapprove it—but also to U.S.-China political tensions. Between 2018 and 2024, China ordered a grand total of three Boeing passenger jetliners. Between 2019 and 2023, the country took only token numbers of Boeing jets.’
The relationship will probably not get any better, under the current admin.
Probably not, but China if they need aircraft?
Well they can order Embraer E2 195s I guess.
C919 is slow and 10 years from any significance.
A220 is sold out and low production.
China already has hundreds of Airbus aircraft on order.
Have a look at Planespotters — see how many AB aircraft are sent to China every month.
and produced in China!
Airbus has fly away aircraft in China and Boeing doesn’t
Same thing is starting to happen in India, it comes down to how much domestic content is done in country
Re MPA market: I wouldn’t exclude the possibility that the A321MPA will become a long range multirole “frigate” with strong sensor, over land, intelligence, EW, coordination and attack capabilities, that far surpass tradidition ASW specifications. Recent Atlantique II mods and artist impressions suggest so.
The P-3 did that long ago and the P-8 is doing so. Both well devloped systems and new systems added to the P-8 all the time.
Frigate is nonsense, its an aircraft not a ship.
France talks a lot but the reality is its at least 10 years out if not 15. In the meantime you live with an overloaded Atlantique. Its a wonder the thing can even fly.
At leas the US had sense to use a 4 engine aircraft for the P-3. They could see two engines was not cutting it back in the 50s with the Neptune.
France can do it, it will take forever and it will cost twice as much as the P-8.
Now what we need is their nuke Fast Attacks out in the Asian seas, those are handy and quite good and well developed.
Maybe sell the Aussies 6 for a Nuke Starter set (not that nonsense they came up with before)
@TW,
“The nonsense they came up with before” is the exact same design ( without a lot of the US kit specified by Australia) that the Royal Netherlands Navy has ordered to replace its Walrus boats. https://www.defensenews.com/global/europe/2024/09/30/dutch-submarine-buy-from-france-to-spark-11-billion-in-offsets/
“The NTSB’s crash investigation has found that “there may be bad data” in the Blackhawk’s cockpit, which could have shown the wrong altitude moments before the crash with a passenger jet outside of DCA Airport.”
https://bsky.app/profile/davidslotnick.bsky.social/post/3li5x3leoys2k
Drip drip drip.
Clearly the helicopter was too high (let alone it never should have been there).
They also do not know which method was being used, RA or Barometric pressure (and they would know what is the normal process for the Helicopter, they tend to fly under very specific process and more so for a NVG mission)
All we need to know is the helicopter should not have been there in the first place.
The rest is sooner or latter this was going to happen.
Just like the Ship hitting the Baltimore Bridge.
The authorities KNEW that a ship cant recover from a blackout in time to do anything.
Like so much of it, they just ignored it until 6 people died.
Exon Valdez was the same thing. Now they have escort tugs. An oil spill disaster too late.
[Pretend to be shocked]
CNN: Trump officials fired nuclear staff not realizing they oversee the country’s weapons stockpile, sources say
https://bsky.app/profile/billkuchman.bsky.social/post/3li6iwgngis2w
In the US, it seems that the greatest threat really is “from within”.
Mr. Vance might want to take note of that before he goes lecturing others.
Oh no, those who are stupid spew forth.
To take note actually means a thinking process and there is none of that present in the administration.
Even better, little known fact for non US is that the US has a separate court system that deals only with immigration (or attempts there of, aka illegal migrants)
they are firing judges. The system was slogged to irrelevant already, the through put is now diminished.
Pure chaos.
And the Nuke workers can’t be contacted because they were erased out of the system.
😱 🤯
Boeing’s Air Force One program could be delayed until 2029, or later, senior official says.
You don’t understand, Musk and the DOGE brothers are involved now.
First they lay off all the workers and then announce it will be delivered 2 years sooner.!
But then there will be no FAA controllers to clear the airspace for it.
@Pedro
This AF1 always fascinated me. Yes it is a B747…but the end product is more of a one-off suite of highly classified mods. The chassis is the cheap part. The government is its own worst enemy when it comes to change orders with a big burden that it is an exceptionally thin body of individuals cleared to work on this aircraft. You have to wonder how much of the content is one-of-a-kind. I would point out Marine One is still not completely full in service.
How Often Have Boeing’s 4 Test 777Xs Flown This Year?
article has good pic of thrust link
https://simpleflying.com/how-often-boeing-777x-flown/
The article provides insightful analysis on Spirit Aero’s financial struggles, offering valuable industry context and expert perspectives on potential outcomes.