Leeham News and Analysis
There's more to real news than a news release.
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.
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.
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.
WTO compliance decision poses new risks for Airbus, US customers
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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.
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.
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.
Bjorn’s Corner: Analysing the Lion Air JT610 crash, Part 5.
November 29, 2019, ©. Leeham News: We continue the series about the Lion Air JT610 crash by now analyzing the final part of the flight.
We try to understand what changed when the First Officer took over the flying from the Captain and why the aircraft subsequently crashed.
Converting customers to the FSA
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By Vincent Valery
Introduction
Nov. 28, 2019, © Leeham News: As Boeing works its way through the 737 MAX crisis, all consideration whether to launch the New Midmarket Aircraft (NMA) is on hold.
But the Boeing sales force has been testing the market with a single-aisle concept, the Future Small Airplane (FSA) to replace the MAX.
This highly confidential effort has been underway for months. Some lessors have been approached to swap some MAX orders for the FSA—there was a supply-demand imbalance for lessor-ordered MAXes even before the grounding—and airlines across the globe have been approached to gauge interest.
Summary
- Solving a lessor placement headache;
- Older 737 NG replacement;
- Accommodating airlines that over-ordered;
- Brand new (non) metal for old carriers.
Looking beyond MAX
Nov. 25, 2019, © Leeham News: Boeing still doesn’t have a timeline for recertification of the 737 MAX and the Federal Aviation Administration isn’t going to be rushed, but aerospace analysts are increasingly looking beyond the grounding at a normalized Boeing.
It will be well into 2021 before Boeing clears the inventory of MAXes.
Nevertheless, analysts see the proverbial light at the end of the tunnel, hoping that it isn’t an oncoming train.
Boeing quietly rolled out the 737-10 MAX last week in an employee-only event. The 10 MAX is the last of the long line of 737s that began with the -100 model in 1967. It had a capacity for 110 passengers. The 10 MAX can seat 220 passengers. Boeing photo.
Bjorn’s Corner: Analysing the Lion Air JT610 crash, Part 4.
By Bjorn Fehrm
November 22, 2019, ©. Leeham News: We continue the series on analyzing the Lion Air JT610 crash by analyzing MCAS in more depth before we go to the final part of the flight.
We look at what was wrong with the initial version of MCAS, the augmentation system that caused JT610 to crash and what has changed in the updated version. Read more