McAllister out, a new Deal at Boeing Commercial Airplanes

By Scott Hamilton


Oct. 23, 2019, © Leeham News: Kevin McAllister’s departure yesterday as CEO of Boeing Commercial Airplanes comes as no surprise.

Only the timing—now instead of next year, as was widely surmised—caught people off guard.

Kevin McAllister, left, and Stan Deal, right, at an order signing. McAllister is out and Deal is in. Credit:

Reports conflict whether he resigned, was fired or (as one report put it), it was a “separation;” it really doesn’t matter.

Word was circulating for months, long before the 737 MAX grounding, that his was a fading star.

He was replaced by Stan Deal, CEO of Boeing Global Services.

That McAllister is the first high-profile casualty of the MAX grounding and recertification crisis is also not a surprise. That he would be sacrificed had been rumored for weeks. The New York Times openly wrote about this prospect 10 days ago.

But tying McAllister to the MAX crisis is to some degree scapegoating.

As I wrote Oct. 7, the fingers of blame for the crisis point much higher than McAllister.

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Boeing recaps actions ahead of earnings call

Oct. 22, 2019: Boeing today recapped its actions to bring the 737 MAX back to certification and service, ahead of its earnings call tomorrow.

The company has taken huge hits since Friday when the information about pilot text messages were revealed by Reuters. The Seattle Times today has a detailed report that makes an independent assessment of the context of the text messages. The story, by Dominic Gates, who’s reporting has been ground-breaking,  supports Boeing’s narrative in this case.

Boeing’s press release recapping its actions to fix MAX and return it to service it below. LNA doesn’t publish press releases except in extraordinary circumstances. Given the bashing Boeing has been under–including by LNA–we’re making an exception in this case.

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NMA off the table in 2020–and maybe entirely

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Oct. 21, 2019, © Leeham News, New York: What is the impact of the 737 MAX grounding on Boeing’s plan for the New Midmarket Airplane (NMA)?

This question was common along the sidelines last week of the Wings Club and two conferences in New York City. (See Pontifications.)

There is, of course, no definitive answer today.

But the plurality of opinion is that the NMA is off the table for the indefinite future.

  • There is no clear picture when the MAX will be recertified, either by the FAA or other regulators.
  • There is no clear picture how long Boeing will maintain production rate at 42/mo, which depends on how much longer it must wait for recertification.
  • With turmoil in the executive suite (the CEO lost his chairman’s title Oct. 11), there is no clear picture how long Dennis Muilenburg has a job.
  • With, apparently, Boeing Commercial CEO Kevin McAllister also in the cross hairs, there is no clear picture of executive suite stability at Longacres, the BCA HQ.
  • Any successors for Muilenburg and/or McAllister will want to review Boeing’s entire product strategy.
  • Therefore, do not expect any go-forward for NMA in 2020.

Other than that, everything is fine.

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Preferred 737 MAX return to service timeline for Airlines

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By Vincent Valery


Oct. 21, 2019, © Leeham News: As Boeing sorts out final requirements with regulators for the 737 MAX return to service, preparations to resume deliveries are in full steam.

The company is hiring scores of temporary workers to return grounded and built but not yet delivered airframes. A note from Alliance Bernstein estimates that Boeing will be able to hand over 25 aircraft per month on top of those that come off the assembly line.

After taking hefty losses and having lost its most robust cash flow source for almost a year, Boeing will want to hand over as many aircraft to airlines as fast as possible.

Do all 737 MAX customers, likewise, want their aircraft back in service as soon as possible?

  • National regulators will drive return to service timeline;
  • Passenger demand variations;
  • 737 MAX exposure by region;
  • Demand peaks might dictate who flies first;
  • Maintenance, compensation, and other considerations.

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Pontifications: To no surprise, MAX was major topic at 3 NYC events

  • Media, Twitter go mad over text messages.
  • Recertifying MAX now looks like December or January.
  • Boeing’s initial compensation offers.

By Scott Hamilton

Oct. 21, 2019, © Leeham News: New York: The grounding of the Boeing 737 MAX was expected to be a hot topic of conversation on the sidelines of the Wings Club event here Friday as well as two aviation conferences in town at the same time.

And it was.

How long would the grounding last? What’s the long-term impact on MAX values? How many cancellations might there be?

And then the media frenzy began and the Twittersphere went wild.

Reuters reported that a pilot at Boeing experienced, in 2016—two years before the Lion Air crash—the symptoms of a runaway MCAS in a simulator.

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737 MAX special report

Oct. 16, 2019: AlJazeera produced a 30 minute special report on the Boeing 737 MAX.

Unlike the hour-long hit piece on the 787 several years ago, undertaken with questionable tactics, this one is well done.

See the report below.

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Pontifications: Muilenburg loses chairman’s title; are his days numbered?

By Scott Hamilton

Oct. 14, 2019, © Leeham News: Look for Boeing CEO Dennis Muilenburg to leave in 2020.

At least this is my view.

But some aerospace analysts I spoke with over the weekend are split. Some believe Friday’s action by the Boeing Board of Directors “stripping” (as most media headlines and stories positioned it) the chairman’s title from Muilenburg, while his retaining the president and CEO titles, is the first step in easing him out the door next year. This is my view, too.

Muilenburg also remains on the Board.

Others think handing the non-executive chairman’s title to lead director David Calhoun is actually an effort to save Muilenburg’s job.

Here’s the divergent thinking. None of the analysts wanted to be identified because by investment bank policy, their remarks hadn’t been cleared for quotation and none had yet issued research notes in reaction.

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The time for a 767RE passenger model has come and gone

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Oct. 14, 2019, © Leeham News: Boeing is reconsidering a previous idea to re-engine the 767 with GEnx powerplants, Flight Global reported last week.

The idea was run up the flagpole, so-to-speak, in 2017.

Boeing 747-400. Source: Delta Air Lines.

At that time, the 737 MAX was just entering service. There was, of course, no hint of any turbulence on the horizon.

The business case for the New Midmarket Aircraft was difficult even then. So why not look at a 767RE and restarting the 757 line, also up upgrades?

Boeing being Boeing, it looks at everything. It ruled out restarting the 757 line (the challenges would have been pretty daunting).

The 767 got more studious traction, including simply restarting the passenger line and providing a really cheap acquisition. A 767RE, however, was viewed as too complex under the circumstances and it would compete with the 787.

American Airlines and United Airlines were actually interested in the airplane restart.

  • B767F-RE may be to counter A330-900F approach to a major cargo airline.
  • B767P-RE likely would be met favorably–by Airbus.
  • Re-engining 767 repeats 737RE experience.

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JATR study “damning” to Boeing, FAA, New York Times says

Oct. 11, 2019: The international study group that was named to examine the certification of the Boeing 737 MAX and the MCAS system was issued today.

The New York Times obtained an advance copy. It wrote that the study is “damning” to Boeing and the FAA.

LNA now has the full study. It may be downloaded here: Final_JATR_Submittal_to_FAA_Oct_2019.


Bjorn’s Corner: Fly by steel or electrical wire, Part 12

October 11, 2019, ©. Leeham News: In our series about classical flight controls (“fly by steel wire”) and Fly-By-Wire (FBW or “fly by electrical wire”) we continue our discussion of pitch stability augmentation systems when we have a mechanical (“fly by steel wire”) pitch control system.

Figure 1. The typical pitch moment curve of a modern airliner. Source: Leeham Co.

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