Boeing suppliers ramp up schedule for MAX: 52/mo by July, 57/mo by August

Source: Boeing.

April 29, 2019, © Leeham News: Boeing reduced the production rate on the 737 line in mid-April from 52/mo to 42/mo in response to the grounding of the airplane by regulators worldwide.

The company and others said they didn’t know how long the airplane would be grounded.

But Boeing told suppliers to keep producing parts, components and the fuselage at rate 52.

The announcement was made April 5. At the same time, Boeing gave suppliers the rate ramp-up schedule.

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Impact of MAX grounding emerges with earnings reports

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Introduction

April 29, 2019, © Leeham News: With first quarter financial results beginning to be reported, the impact of the grounding of the Boeing 737 MAX is beginning to emerge.

Boeing 737 MAXes stored at Everett Paine Field. Photo by Jennifer Schuld.

The first out was from Boeing itself, followed by a few of the airlines that operated the MAX before it was grounded March 13.

Boeing reported the grounding cost it about $1bn, for just the two weeks the airplane has been on the ground.

Norwegian Air Shuttle, which was using the MAX on new trans-Atlantic services, lost millions of dollars.

American Airlines will take a $350m hit from the groundings.

Southwest Airlines surprised many with a stronger-than-expected first quarter despite having 34 MAXes on the ground and a cost of $200m.

Air Canada extended the removal of its MAX fleet from its schedules another month, to Aug. 1.

Summary
  • JP Morgan doesn’t predict deliveries resuming until the fourth quarter.
  • The investment bank sees 200 MAXes in inventory accumulating and cash losses of $1.5bn per month while the plane is grounded.
  • Wall Street hopes that 2020 will be a normalized year.
  • If simulator training is required by regulators before the MAX can return to service, JP Morgan estimates more than 4,400 pilots need to be trained.

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Boeing didn’t want to re-engine the 737–but had design standing by

March 20, 2019, © Leeham News: With nearly 400 Boeing 737 MAXes grounded across the globe, few will remember that Boeing didn’t really want to do the MAX.

Officials in 2010-2011 engineered the MAX as a fallback airplane in case its hand was forced by Airbus as it first pondered and then launched the A320neo.

Jim Albaugh, then president of Boeing Commercial Airplanes, didn’t want to re-engine the 737. He wanted a new airplane. Seattle Times photo.

The president of Boeing Commercial Airplanes at the time, Jim Albaugh, and the head of the 737 program then, Mike Bair, talked down the thought of re-engining the 737 even as it was developed. Albaugh wanted a new, clean sheet airplane to replace the 737.

When Airbus was about to land American Airlines with a huge order for the A320 family, both the ceo and neo, Boeing’s hand was forced. Within 48 hours, Jim McNerney, Albaugh’s boss, made the decision to go forward with what would become the MAX.

LNA dug into its archives for recorded interviews, transcripts and events with Albaugh and Bair. What follows paints the picture of Boeing’s view at the time about the 737 re-engining. LNA also spoke last year with a former Boeing engineer who worked on the MAX program. This interview was before the Lion Air crash in October.

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Pontifications: 737 MAX events remind of Lockheed Electra story

By Scott Hamilton

March 18, 2019, © Leeham News: There’s a saying that history repeats itself.

When it comes to the crisis of the Boeing 737 MAX, I’m reminded of the crisis Lockheed faced in 1959-1960 when the Electra propjet crashed in September and the following March, killing all aboard both airplanes.

The Electra entered service Jan. 12, 1959, with Eastern Airlines. It was considered a pilot’s airplane. Coming off decades of piston engine aircraft and early in the jet age, the Electra was the only airplane that was over-powered, piston or jet. Timing, however, was poor and crashes soon overtook the euphoria.

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Pontifications: The 747 revolutionized air travel

By Scott Hamilton

Feb. 11, 2019, © Leeham News: Few airplanes truly can be called revolutionary. Most are evolutionary.

The Boeing 747 was one of those that falls into the former category.

Just as the Boeing 707 revolutionized air travel, so did the 747.

The spaciousness and, after a period of engine difficulties, the economics put the 747 into a class by itself.

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Key customers shrug off Boeing’s 2020 NMA launch date

Jan. 30, 2019, © Leeham News: Key customers and suppliers shrugged off Boeing’s announcement today that a program launch for the prospective New Midmarket Aircraft won’t come until 2020.

If Boeing goes ahead with the NMA, a decision yet to be made, an announcement was widely expected at the Paris Air Show in June.

Authority to Offer (ATO) the airplane for sale may still come as early as March or April.

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Legendary Herb Kelleher dead at 87

Jan. 3, 2019, © Leeham News: The incomparable Herb Kelleher died today. He was 87.

Kelleher was a co-founder of Southwest Airlines, which rewrote airline service in the US and which became the forerunner of many, many low cost carriers across the globe.

Herb Kelleher, wrestling for the rights to an advertising tag line. The publicity stunt literally drew worldwide attention. Photo via Google images,.

When I lived in Dallas from 1985-1996, I interviewed Kelleher many times and on occasion would lunch with him “just because.”

What follows are memories about Herb I’ve written as part of my own unpublished memoirs (of a sort) about my lifetime in commercial aviation.

Legendary antics

Kelleher’s antics are legendary, as was his smoking and drinking. He was an open flirt with his female flight attendants and they loved him for it. He was an absolutely ruthless competitor, but his clownish approach to life overshadowed it. He could be deadly serious and totally irreverent.

I need not recount his many antics, his dressing like Elvis, his motorcycle riding or similar activities because they have been well covered and are well known.

There is one story in particular to tell. It’s about Malice in Dallas. (See here, one of six parts.)

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LNC’s Top 10 stories in 2018

Jan. 2, 2019, © Leeham News: Boeing dominated the Top 10 news stories last year, as measured by views.

Displacing Airbus at Hawaiian Airlines, which ordered the 787-9 and canceled the A330-800, led the readership.

Boeing’s flip of the Hawaiian Airlines order for the A330-800 to the 787-9 was the most read story of 2018. Photo: Hawaiian Airlines.

Airbus’ launch of the A350-900ULR came in second.

Here are the Top 10 stories on Leeham News for 2018: Read more

Boeing deal, “crucial to Embraer survival,” in doubt

Update, Dec. 7: Embraer to appeal injunction.

According to the Google translation of a Brazilian newspaper, the injunction appears to be intended to halt any completion of the deal during the interim between the November presidential election and the assumption of office by the president-elect. The Google translation does not appear to indicate the injunction is based on any specific objection to the proposed JV.

ANALYSIS

Dec. 6, 2018, © Leeham News: In a stunning piece of news, a Brazilian court blocked the proposed joint venture between Boeing and Embraer.

If the action holds, this is a major blow to Boeing’s future plans.

The new joint venture, which LNC dubs NewCo for the lack of a name, was to be responsible for all future Boeing aircraft of 150 seats and below, according to a Memorandum of Understanding revealed by Embraer’s labor unions.

This is critical to Boeing’s long-term future for the 2030 decade. Read more

Huge surge of A320 orders greatly exceed near-, mid-term A320 retirements

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Introduction

Oct. 4, 2018, © Leeham News: The huge surge of orders for the Airbus A320 family far outstrips the aging aircraft statistics, an analysis shows.

Airbus has a backlog of more than 6,000 A320 family members, with more than 1,700 sales potential just for retirements.

There is a backlog of more than 6,000 A320neo family members, with the near- and mid-term delivery schedule far exceeding A320 retirements. Photo credit: Airbus.

There are more than 4,300 A320s scheduled for delivery from 2019 through 2025.

There are just 765 A320s that hit 25 years old during the same period.

The surge in A320-family aging aircraft begins in 2030, just as the bulk of the current backlog ends, according to data bases maintained by Ascend and Airfinance Journal’s Fleet Tracker.

Summary
  • Useful lives of A320s in passenger service historically have been 25 years. Till now, no P2F programs existed to extend the useful lives.
  • But, some passenger airlines are returning A320s off lease in 12 years or less—accounting for some of the surge in orders vs aging aircraft.
  • Supply-demand imbalance in the secondary markets could emerge.

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