Norwegian’s attempt to survive

Subscription Required

By Vincent Valery

Introduction

Dec. 12, 2019, © Leeham News: Norwegian Air Shuttle (NAS), struggling to survive after years of over-expansion, took major steps over the last few weeks to overhaul its finances and strategy.

Major strategic shifts included the sale of the Argentinian subsidiary, the end of trans-Atlantic narrowbody operations, and exit out of long-haul markets in two Scandinavian capitals.

The airline appointed Jacob Shram, a former McKinsey consultant and Statoil executive, as a new CEO. Former JetBlue Chief Commercial Officer Marty St. George is also joining the airline on an interim basis.

After years of breakneck expansion, the airline vowed a shift in focus on profitability and business efficiency. In this article, LNA analyzes the various announcements and assesses whether NAS has a chance to survive in the long term.

Summary
  • (Finally) cutting the losses;
  • No stones left unturned to raise cash;
  • Drastically altered fleet plans;
  • Chances of working out.

Read more

With no end of MAX grounding in sight, Boeing may be forced to cut or suspend production soon

Dec. 11, 2019, © Leeham News: With confirmation by the Federal Aviation Administration that recertification of the 737 MAX won’t happen until 2020, Boeing is rapidly facing a decision whether to reduce or suspend MAX production.

With no end in sight, Boeing can’t continue production of the MAX at the rate of 42/mo much longer.

Through Dec. 6, there were just under 400 MAXes that have been produced. Another 381 MAXes were in service when global regulators grounded the fleet March 11-13.

Read more

FAA: No MAX certification until 2020; analysis forecast 15 more crashes if MCAS not fixed

Dec. 11, 2019, © Leeham News: A new round of Congressional Hearings about the Boeing 737 MAX got underway today.

FAA Administrator Stephen Dickson, testifying today before the US House Transportation Committee in a hearing about the Boeing 737 MAX.

Before the hearing began at the House Transportation Committee, FAA Administrator Steve Dickson appeared on CNBC today. Among his statements: recertification of the MAX will slip to 2020, confirming what had become apparent for some time.

“Like I said there are a number of processes, milestones, that have to be completed,” Dickson said in an interview on “Squawk Box.” “If you just do the math, it’s going to extend into 2020,” he told CNBC.

Read more

First reports from Boeing’s MAX briefings last week

Dec. 10, 2019, © Leeham News: The first reporting from last week’s Boeing briefings for analysts, opinion-makers, influencers and consultants (but not the media) began to emerge Saturday. (Media briefings may be scheduled in January.)

The briefings are the latest in Boeing’s effort to restore confidence in the 737 MAX.

Read more

Pontifications: Stop hitting the snooze button, Boeing

By Scott Hamilton

Dec. 9, 2019, © Leeham News: I know Boeing is preoccupied right now. But it has to get off the pot and decide to proceed with a new airplane.

We believe the New Midmarket Airplane is still required. But Boeing salesmen have also floated the concept of a new, single-aisle airplane to key players in the market. Either way, Boeing has to do something.

At least, that’s how we see it at Leeham Co.

The order last week by United Airlines for 50 Airbus A321XLRs should be a wake up call.

It’s not the only one Boeing has had.

Read more

FAA takes first steps for re-certification of the MAX

December 6, 2019, ©. Leeham News: The FAA issued a draft of the updated Master Minimum Equipment List (MMEL) for the Boeing 737 MAX 8 and 9 on its website yesterday. It’s there to be commented on by anyone who has input to its content within 30 days.

This step is the first external sign the re-certification of the 737 MAX has begun.

Read more

Bjorn’s Corner: Analysing the Lion Air JT610 crash, Part 6.

By Bjorn Fehrm

December 6, 2019, ©. Leeham News: We now finalize the series about the Lion Air JT610 crash by analyzing the changes Boeing has made to the aircraft to avoid further problems with MCAS (Maneuver Characteristics Augmentation System).

The changes bring MCAS to the level it should have had from entry into service and in some aspects further.

Read more

WTO compliance decision poses new risks for Airbus, US customers

Subscription Required

Introduction

Dec. 5, 2019, © Leeham News: The Trump Administration Tuesday threatened to increase the tariffs on European goods after a World Trade Organization (WTO) compliance panel concluded Airbus and the European Union have not fully cured illegal subsidies on the A350 and some residual “harm” to Boeing remains as the A380 program winds down.

The EU and Airbus criticized the conclusions as faulty. The EU is expected to appeal by next Wednesday.

The Administration already imposed a 10% tax on the A320 family, the A330neo and A350 imported into the US. So far, the A320 family assembled at Airbus’ Mobile (AL) plant are exempt.

US airlines and lessors whose lessees are US carriers are required to pay the tax. Airbus and its customers are working the problem behind the scenes.

Summary
  • The EU awaits a WTO arbitration decision next spring and is prepared to retaliate with taxes on Boeing airplanes.
  • Airbus believes it will be in a stronger position than Boeing once the WTO acts.
  • US customers are liable for tax.

Read more

Pontification: A320 production challenges may extend to 2022/23

By Scott Hamilton

  • Update of Boeing 737 NG Pickle Fork cracking issues.

Dec. 2, 2019, © Leeham News: Airbus sees struggles for A320 production continuing throughout next year, into 2021 and spilling into 2022/23 as the Air Space cabin is introduced on the A321XLR.

Executives also see lower margins than the target 15% for the A350 and losses on the A220 continuing into the middle of the next decade.

Even so, profit targets are expected to be met and officials still want to ramp up production rates on the A320.

This mixed picture was presented by Airbus CFO Dominik Asam during  series of investors meetings last month in Asia, arranged by Citi Research’s London office.

In a research note issued Nov. 22, Citi summarized the three days of meetings with investors in Australia, New Zealand and Tokyo.

Read more

FAA assumes MAX inspections, won’t slow deliveries, agency says

Boeing photo.

Nov. 29, 2019, © Leeham News: The decision by the Federal Aviation Administration this week to assume inspections of Boeing’s 737 MAXes before delivery won’t delay the company’s projected schedule, once the airplane is recertified.

The FAA Wednesday notified Boeing that federal inspectors will examine each of the hundreds of MAXes that have been built but stored since the March 13 grounding order before the airplanes can be delivered.

Boeing historically had this authority as designated representatives of the FAA.

The decision raised questions whether this would slow the delivery schedule Boeing plans.

Read more