Engine maker, lessor see Boeing’s next airplane as a single-aisle design

Subscription Required

By Scott Hamilton

“The NMA is gone. Long live the NMA.”–lessor CEO. Photo: Leeham Co.

April 2, 2020, © Leeham News: Boeing’s New Midmarket Airplane, or a new concept, is the last thing on the plate right now.

But Boeing’s future product strategy nevertheless requires long-term thinking even as the short- to medium-term is in chaos.

Interviews were conducted March 2 at a major aerospace conference in Austin (TX), just days before the coronavirus crisis exploded exponentially across the globe.

The CEO of the major lessor, Avolon, declared the NMA dead and predicted a new single-aisle airplane will be Boeing’s next project.

An executive of Pratt & Whitney offered a similar view.

Summary
  • “The NMA is gone. Long live the NMA. That moment has passed.
  • Back to the 757 replacement concept and, now, A321XLR competitor.
  • Single-aisle vs light twin-aisle is part of the challenge.
  • New airplane must be “dramatically” more efficient than MAX, neo.
  • 2030 decade is the quickest this dramatic improvement can be achieved.

Read more

Pontifications: Critical step in Boeing MAX recertification target: May

By Scott Hamilton

March 30, 2020, © Leeham News: Barring further issues, the FAA Type Inspection Authorization for the MAX is targeted for the second half of May, LNA learned.

This is a critical step in recertifying the airplane.

Also barring more unexpected events in a year filled with them, Boeing should resume production of the 737 MAX in May, LNA confirmed.

Read more

Boeing has $15bn in liquidity and can survive in short term; credit markets need to reopen

By Scott Hamilton

Boeing CEO David Calhoun. Source: CNBC.

March 24, 2020, © Leeham News: Boeing CEO David Calhoun said the company has $15bn in liquidity and can survive in the short term, but federal aid is needed as long as the credit markets aren’t open.

The US Defense Department is working to accelerate payments to Boeing, which has a large defense business. Revenue at Boeing Global Services is down as airlines across the globe shut down or sharply reduced operations.

Calhoun made his remark on CNBC’s Squawk Box today.

Read more

Coronavirus upends Airbus, Embraer in addition to Boeing woes

Subscription Required

By Scott Hamilton

Introduction

March 23, 2020, © Leeham News: The dramatically and continuously worsening impact of coronavirus worldwide is upending Boeing—more than it has been—and Airbus.

Boeing is considering shutting the wide-body production lines, The Seattle Times reported. It also wants US government aid.

Source: CDC.

Airbus shut its assembly lines in France and Spain for four days in response to federal restrictions.

LNA previously wrote about the impact it sees on Boeing and, to a degree, on Airbus.

These analyses are updated to the latest circumstances.

We also add a look at Embraer delivery stream for March-December.

Summary
  • Even if Boeing recertifies the 737 MAX by mid-year, deliveries now in doubt.
  • Customers can cancel MAXes without penalty.
  • Airbus faces massive deferrals under the circumstances. Penalties apply.
  • Embraer’s customer concentration is in USA.

Read more

Before handing $60bn to Boeing, consider this

By Scott Hamilton

Commentary

March 20, 2020, © Leeham News: Before the Trump Administration hands $60bn over to Boeing for its own purposes and to serve as a conduit to aid the supply chain, there are just one or two issues to address.

Read more

Why bailouts make sense under these circumstances

By Scott Hamilton

Commentary

By Scott Hamilton

March 18, 2020, © Leeham News: The Federal government is preparing a bailout, said to be more than $1 trillion, to pump into the US economy.

Airlines want $50bn. Boeing wants $60bn for the aerospace industry. It’s unclear how much is for Boeing and how much is for industry.

Opposition for the airlines and Boeing was quick to emerge. The objection: how much each spent in recent years on shareholder buybacks.

The bailout package goes across the US economy and includes direct cash grants to individuals. In keeping with LNA’s business, I focus in the column only on aviation.

Read more

Coronavirus impact to Boeing still unfolding

By Judson Rollins

Subscription Required

March 16, 2020, © Leeham News: Boeing stock sold off 28% last week on news that the company would draw down the remainder of a $13.8bn loan it arranged in February to cover ongoing expenses related to the 737 MAX.

In addition to MAX-related charges, the company is also hoping to close its joint venture with Embraer and has looming debt maturities later this year. But the company’s airplane sales prospects are an increasing source of worry for investors.

The coronavirus and its impacts – which are still unfolding – put up significant obstacles to Boeing’s recovery, even as it hopes to finally see the MAX recertified within a few months. Read more

“We’re sick and tired of new technologies:” Avolon CEO

Subscription Required

Introduction

By Scott Hamilton

March 16, 2020, © Leeham News: “I can tell you from our perspective, we’re kind of sick and tired of new, new technology. It’s not proven to be the home run.”

This blunt assessment comes from the chief executive officer of the big aircraft lessor, Avolon.

Domhnal Slattery

Domhnal Slattery, the CEO, was giving his critique of whether Boeing should launch a new airplane once the 737 MAX crisis is over.

Boeing was on a path to decide whether to launch the New Midmarket Airplane when the MAX was grounded one year ago this month.

Airbus was waiting for Boeing to move before deciding how to respond.

Summary
  • Airbus and Boeing should “stick to their knitting.”
  • Focus on incremental improvements for now.
  • 2030s to 2050s will be the next big advance in technologies.

Read more

Grounding takes toll on Boeing 737 MAX investment desires

By Scott Hamilton

March 2, 2020, © Leeham News, Austin (TX): A poll of people attending a major aerospace conference here today illustrates the hit Boeing took from the trouble with the 737 MAX.

The audience was asked to rate the Airbus A320neo against the 737-8 MAX for financier/lessor risk-reward investment.

The A320neo was rated favorably by 70% of the those voting. The MAX 8 was rated favorably by just 19%. The remainder rated the two planes equally.

In the era of the A320ceo and 737-800, the Boeing tended to have an edge by a few percentage points in this largely American audience. Audiences at similar European conference tended to tilt toward the A320ceo in past surveys.

In the same polling at this year’s conference 75% of those voting believe Airbus has the better narrow-body product line. Only 19% chose Boeing.

Read more

Why was the 737-8 losing market to the A320neo before the MAX crisis?

By Bjorn Fehrm

Subscription Required

Introduction

February 27, 2020, © Leeham News: While we wait on the Boeing 737-8 to get back in the air, we take a look at how this best seller in the 737 series compares with its direct rival, the Airbus A320neo.

The 737-800 and its follow on, the 737-8, have been the most popular single-aisles in Boeing’s lineup for decades. The 737-800 sold more units than the A320. But when both got re-engined, this changed. The A320neo is now outselling the 737-8.

We look into why.

Summary:
  • The trend where the A320neo is outselling the 737-8 started well before the MAX crisis. Is the root cause better airframe performance?
  • We find the cause to be another. The difference is not about a change in relative airframe performance between the two.

Read more