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