By Vincent Valery
March 27, 2023, © Leeham News: In an article last year, LNA highlighted the divergence in the post-Covid-19 recovery among OEMs and select Tier 1 suppliers. Airbus had higher profits than before the Covid-19 pandemic, while all others lagged. Revenues were well below 2019 levels.
Commercial Aviation OEMs were severely impacted last year by supply chain disruptions. Airbus and Boeing ramped up production significantly slower than envisioned on all programs. The war in Ukraine and tighter financial conditions are complicating the situation further.
LNA collected financial information on the big three aircraft manufacturers and 10 major commercial aircraft suppliers to assess how quickly they recovered. There will also be an analysis of the numerous charges Airbus and Boeing have taken since 1999 through 2022.
By Bryan Corliss
March 23, 2023, © Leeham News – Chinese leader Xi Jinping flew into Moscow this week for a three-day summit with accused Russian war criminal Vladimir Putin.
They wined and dined. They talked publicly about economic accords and oil pipelines and pledged mutual support. In private, Putin almost certainly made a plea for stepped-up Chinese support for his faltering invasion of Ukraine. They made bold statements about banding together to oppose the hegemony of the West, which has united against Russia with sanctions including bans on providing Russia with the basic technology it needs to build weapons.
And at the end of it all, on Wednesday, Xi walked up the jet stairs to his Air China 747, built by Boeing in Everett, America. He turned and waved, and then flew back to Beijing.
That moment, with Xi standing in front of the massive American-made jet, may just illustrate China’s conundrum right now: Xi, by all accounts, wants nothing more than to shove aside the post-Cold War order that has confined his nation from global Great Power status. An alliance with Putin’s Russia could be a key step toward that.
And Xi, as he looks around the interior of his jumbo jet, has to be acutely aware that China remains dependent upon the Western democracies for software, computer chips, and – critically – aircraft.
March 21, 2023, © Leeham News: Airbus is resting on its laurels while Boeing struggles to recover from one crisis after another since the March 2019 grounding of the global 737 MAX fleet.
Multiple sources tell me that Airbus, aside from the production problems it has in common with Boeing, is enjoying Boeing’s deep freeze by China. The decision by Boeing CEO David Calhoun to delay the “introduction” of a new airplane until the middle of the next decade took the pressure off Airbus to be ready to move sooner than later.
While Boeing struggles, Airbus has become conservative, complacent and—gasp—even arrogant, a longtime Boeing trait.
By Bryan Corliss
March 20, 2023, © Leeham News – In a filing with federal regulators, The Boeing Co. acknowledges it struggled to stabilize 737 MAX production rates at 31 a month last year.
However, the company is sticking to that and expects a “gradual” increase in 737 rates this year – dependent upon the ability of key suppliers to keep up.
Those are some of the takeaways from Boeing’s annual report, filed with the U.S. Securities and Exchange Commission earlier this year.
The reports, which are required under U.S. law for publicly traded companies, include much of the fine print that isn’t included in typical earnings releases and calls, including detailed discussions of the risks companies face.
The filing doesn’t contain any shocking revelations but does shed more light on how Boeing is coping with the challenges facing the industry: workforce recruitment and retention in a globally tight labor market, supply change management challenges, inflation, and geopolitical turmoil in key markets including China and Russia.
Reports also mirror information provided by Airbus in regulatory filings in the Netherlands, where the company is registered.
The filings paint a picture in which 2023 will be an important year for both OEMs as they try to recover from a series of serious setbacks.
By Bjorn Fehrm
March 10, 2023, ©. Leeham News: This is a complementary article to New aircraft technologies. Part 3. Airframe improvements. It discusses in detail the areas of an airliner airframe where tangible improvement can be made to make it more efficient and thus lower cost combined with less Green-House-Gas (GHG) emissions.
By Vincent Valery
Feb. 20, 2023, © Leeham News: Last month, LNA analyzed the single-aisle market order opportunities for Airbus, Boeing, COMAC, Embraer, and UAC. We now focus on the twin-aisle duopoly of Airbus and Boeing.
Unlike in the single-aisle market, Boeing leads in market share: 64% nominally and 69% after Boeing’s at-risk ASC 606 adjustments and LNA’s assessment for Airbus, which doesn’t publish at-risk order numbers. If we exclude government and freighter orders, Boeing’s market share lead is 60% and 65% after at-risk adjustments.
However, the A330ceo family has the broadest operator base, and there are still almost 1,000 units in passenger service. LNA investigates the order twin-aisle aircraft order books and assesses replacement opportunities for both OEMs based on the in-service fleet.
By Bjorn Fehrm
February 16, 2022, © Leeham News: Airbus presented its results for 2022 today. The company announced net profits of €4.3bn on revenue of €58.8bn despite several disruptive events during 2022.
Disruptions like the effects of the Russia-Ukraine war and the supply chain ramp after COVID kept the delivery increase for 2022 at half the target of 110 jets, resulting in 661 deliveries instead of the originally guided 720.
Guidance for 2023 keeps the 720 airliner delivery target, an operating profit of €6bn, and a Free Cash Flow of €3bn.
By Bryan Corliss
Feb. 15, 2023, © Leeham News – Howmet Aerospace is taking a “cautious and conservative view” that Boeing will build 30 737s a month this year and Airbus will build 53 or 54 A320s and A321s.
That’s what CEO John Plant told investors Tuesday, as Howmet reported its year-end and fourth-quarter earnings.
That’s far more conservative than the 737 build rate that Spirit AeroSystems had projected the week prior, Plant acknowledged. Executives with the Wichita airframer project sending 42 737 fuselages a month to Boeing by the end of this year.
Howmet, which fabricates fasteners and casts pieces for aerostructures and jet engines, reported annual profit of $1.3 billion for last year, up 12% when adjusted for one-time items. For the fourth quarter, its adjusted profit was $336 million, up 13%.
By Scott Hamilton
Feb. 13, 2023, © Leeham News: The aerospace supply chain is still struggling to recover from the grounding of the Boeing 737 MAX, the suspension of deliveries of the 787, the delays to the Boeing 777X, and the COVID pandemic.
Labor shortages and workforce quality/experience is also a challenge for the supply chain.
Profits remain elusive and capital is available at high interest rates, if at all. CFM, GE, Pratt & Whitney, and Rolls-Royce continue to face technical challenges with their engines. The CFM LEAP and PW Geared TurboFan engines have durability issues and must be taken off wing for maintenance and warranty work at a fraction of the time their predecessor engines were on wing.
It’s a rather bleak picture painted of the state of the aerospace industry during the annual conference of the Pacific Northwest Aerospace Alliance (PNAA) last week in a Seattle suburb.
By Vincent Valery
Feb. 6, 2023, © Leeham News: With the publication of the Airbus and Boeing announcing 2022 orders and deliveries last month, and Boeing’s published its 2022 Annual Report (10-K), we undertake our annual analysis of at-risk deals on their books.
Airbus and Boeing have outstanding orders with airlines where there is a material probability some orders won’t translate into deliveries. Most were the result of airlines encountering financial difficulties, but some were related to contractual disputes. Boeing flags such orders as subject to an ASC 606 accounting rule adjustment.
Unlike Boeing, Airbus isn’t subject to an accounting rule like the ASC 606 adjustments at a program level. Therefore, the European OEM does not break down the orders at risk of cancellation by the program. Airbus only discloses the nominal value of its total adjusted order book in its annual report.
LNA analyzed July 2020, November 2020, August 2021, February 2022, and August 2022 Airbus’ and Boeing’s order books to identify orders at risk and come up with an apples-to-apples comparison. We update this analysis with the latest order books from both OEMs. The above links explain our methodology and its differences with Boeing’s ASC 606 adjustments.