Lessors, airlines seek 1 year lease extensions in MAX groundings

June 26, 2019, © Leeham News: Airlines and lessors are making plans to extend leases by up to one year as the Boeing 737 MAX grounding drags on with no end in sight and carriers scramble to cover their routes, LNA is told.

Shortly after the MAX was grounded, on March 13, airlines began extending leases on airplanes that were to be replaced by the MAX up to six months.

This was until the September-October timeframe.

Now, with estimates that the Federal Aviation Administration may not be ready to lift its grounding order until then—and other regulators may come later—airlines see a need for another lease extension.

Lessors are not interested in another six month extension, however, LNA is told.

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Pontifications: Heard around the Paris Air Show

June 24, 2019, © Leeham News: Heard around the Paris Air Show last week:

Airbus

Reporters long used to the entertaining and sometimes acerbic tongue former super-salesman John Leahy wondered how Christian Scherer would compare.

By Scott Hamilton

Scherer’s own sharp tongue began to emerge at the Airbus Innovation Days pre-air show briefing last month and got sharper at the executive round table the Friday before and on Day 1 of the international event.

On Day 2, Boeing and International Airlines Group (British Airways, et al) stunned the world journalists and Airbus with the LOI for 200 737 MAXes. On Thursday, Scherer expressed his displeasure.

The deal wasn’t unprecedented. In the 1990s, Boeing blindsided Leahy with an exclusive deal with American Airlines, followed by Delta and Continental airlines. “I was…pissed,” Leahy told LNA years later.

It seems Scherer is following in Leahy’s shoes in more ways than one.

The launch of the A321XLR was totally expected. The top question: does this kill the Boeing NMA? (LNA’s answer: Nope.)

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IAG’s super MAX deal likely means super discounts, services

June 20, 2019, © Leeham News: Boeing gets a Letter of Intent for 200 737 MAXes from International Airlines Group (British Airways, et al), announced Tuesday at the Paris Air Show.

Today, Airbus complained the deal came as a surprise—there hadn’t been a tender, Airbus had no chance to bid.

Christian Scherer, meet John Leahy.

Scherer is Leahy’s successor, and like Scherer, Leahy was blindsided in 1996 when American Airlines signed a 20-year exclusive procurement deal with Boeing.

Then, Delta and Continental airlines did the same.

Leahy complained bitterly that he didn’t know of American’s deal and had had no chance to bid.

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Paris Air Show Day 3: Eyes focus on Boeing for more MAX commitments

June 18, 2019, © Leeham News: As the Paris Air Show prepares for Day 3 (June 19, Paris time), eyes will be on Boeing to see whether another commitment for the 737 MAX will be forthcoming.

Headlines the first day were split between Boeing’s early morning briefing in which executives apologized for the fatalities on the Lion Air and Ethiopian crashes, sympathies to their families and disruptions to the airlines for the groundings and the Airbus launch of the A321XLR.

Tuesday’s headlines belonged to Airbus until 4:30pm when International Airlines Group, the parent of British Airways, Iberia, Aer Lingus, Vueling and LEVEL, announced a commitment for 200 MAX 8s and MAX 10s.

If any such order was to come at the air show, observers expected it to be from Ryanair, whose CEO Michael O’Leary already had publicly endorsed the MAX and said he could order more.

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Paris Air Show, Day 2: Orders and commitments

June 18, 2019, © Airfinance Journal: Boeing received a much-needed vote of confidence in its grounded 737 Max aircraft with a commitment for 200 of the type from IAG.

Nonetheless, the US manufacturer failed to register a firm order from the second day in a row.

Airbus, in contrast, continued to build momentum for its new A321XLR with orders and commitments from IAG and Cebu Pacific.

CFM also had a good day, registering big orders from lessors and AirAsia for its LEAP engine.

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IAG (British Air) gives huge boost to MAX

June 18, 2019, © Leeham News: In a major vote of confidence for the embattled Boeing 737 MAX, International Airline Group (IAG), parent of British Airways, Vueling, Iberia, LEVEL and Aer Lingus, signed a letter of intent late today for 200 737-8/10s.

This is a huge shot in the arm Boeing, which until the Paris Air Show, hadn’t booked an order in two months following the March 13 grounding of the MAX.

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Returning MAX safely to service is Boeing’s “top priority”

June 17, 2019, © Leeham News: Boeing executives focused on its top priority, returning the grounded 737 MAX, safely to service, in its lead off briefing today at the Paris Air Show.

Greg Smith, EVP of The Boeing Co., appeared instead of CEO Dennis Muilenburg, taking the lead in recapping much of what has been known for weeks: Boeing’s regret for the 346 fatalities in the Lion Air and Ethiopian accidents, the MCAS software upgrade and working with airlines and regulators to determine the path back to recertifying the MCAS and the best curriculum for pilot training.

Boeing Commercial Airplanes CEO Kevin McAllister, Defense unit CEO Leanne Caret and Global Services unit CEO Stan Deal followed Smith in a tightly scripted set of presentations and answers to questions.

The four immediately left the stage after the Q&A instead of loitering for the usual press gaggles.

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Pontifications: The elephant in the room

By Scott Hamilton

June 17, 2019, © Leeham News: The Paris Air Show opens today and the elephant in the room is the Boeing 737 MAX.

There is no telling when the airplane will get FAA approval to return to service. According to some news reports, Boeing will hasn’t turned over the MCAS revisions to the FAA for review, testing and approval.

The acting administrator of the FAA said he expects the MAX to be back in the air by the end of the year. Some leapt to the conclusion this means December—and it may, but let’s remember September, October and November are before the “end of the year,” too.

There’s no telling how other global regulators will act, and when, to conduct their own review and approvals. Airlines would like a global action. It’s tough to tell customers one country sees the airplane as safe but others don’t.


  • Leeham News will be at the Paris Air Show this week, with coverage by Scott Hamilton, Bjorn Fehrm and Judson Rollins. All coverage will be open to all readers.

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Stabilizing 737 production is Boeing’s priority, CFO says

By Dan Catchpole

June 5, 2019, © Leeham News: Boeing is focused on smoothing out 737 production at 42 aircraft a month for now. Any decision to returning production to 52/month is well down the road, Boeing CFO Greg Smith said Wednesday at the UBS Global Industrials and Transportation Conference in New York.

“It’s going to be all about stability,” Smith said. “And stability is not just about on schedule but ensuring that we’ve got predictability and accuracy that’s more finite than what it’s been in the past.”

The company had planned to step up production from 52/month to 57/month in June or July. Boeing slowed down production of the workhorse single-aisle in April after a second 737 MAX crashed shortly after takeoff. At the time, it cited the accidents as the reason for slowing 737 production. However, the aerospace giant already had been struggling with production disruptions prior to the crashes. The biggest headache came from slow deliveries from engine-maker CFM, as LNA reported in April.

Industry insiders at the Aviation Week MRO Americas conference in April said Boeing already planned to hit 57/month in September. However, at Wednesday’s investor conference, Smith’s sidestepped any question about when 737 production could reach that pace.

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Boeing CEO says steady progress being made on getting 737 MAX back into the air

 By Dan Catchpole

May 30, 2019, © Leeham News: Boeing CEO Dennis Muilenburg said Wednesday steady progress is being made on getting the 737 MAX back in the air following two devastating crashes within a few months of each other. He stopped short of giving a specific time frame, though.

Boeing CEO Dennis Muilenburg

However, a spokesman for the International Air Transport Association said the same day that the trade group does not expect the MAX to be back in service before mid-August.

Speaking at the Bernstein Strategic Decisions Conference, Muilenburg struck an upbeat tone overall and called the crashes a “defining moment” for Boeing. However, he did not indicate that Boeing intends any major changes as a result, and he expressed confidence in the company’s design and certification processes. Though, he did not shut the door to making changes as a result of lessons learned in the wake of the crash.

Muilenburg insisted that the MAX challenges will not affect entry into service for either the 777X in 2021 or the New Midsize Airplane (NMA) in 2025. He also discussed changes to the 737 supply chain, resumption of deliveries and future production rates for the popular single-aisle airplane.

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