Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Hopes for 1Q financial progress turns into bumpy ride for Boeing April 21, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 18. April 18, 2025
- Natilus: Composite BWB, entry-into-service by 2029, 570 on order April 17, 2025
- China bans Boeing, US parts imports in tariff war April 15, 2025
- Boeing welcomes COMAC competition as Asia-Pacific demand soars April 15, 2025
Boeing delays 777X first delivery delayed until 2025; posts $1.2 B loss in first quarter
UPDATED
April 27, 2022, © Leeham News: Boeing’s 777X program took another hit Wednesday, when the company said it won’t deliver the first 777-9 until 2025 due to new delays getting the plane certified. It has halted 777-9 production through 2023, which the company expects to incur $1.5 billion in abnormal costs until the assembly line starts moving again.
The aerospace giant’s Q1 earnings report is soaked in red ink: a $1.2 billion net loss, a $3.6 billion loss in free cash flow and a $2.06 GAAP loss per share and a $2.75 core (non-GAAP) loss per share. The results fell far below the roughly 20 cents per share loss and $15 billion expected by Wall Street analysts.
The company said it has filed a 787 certification plan with federal regulators, as it tries to resume deliveries of its premier twin-aisle jetliner.
Boeing Defense booked more than $1 billion in charges from two programs–Air Force One replacement and T-7 Red Hawk trainer for the U.S. Air Force. Read more
HOTR: Consensus that Boeing must launch new airplane in 2023 or 2024
By Scott Hamilton
Feb. 15, 2022, © Leeham News: There is a belief that when Boeing clears out much of its 737 MAX inventory, resumes delivery of the 787, and reduces a good portion of its debt that it will launch a new airplane program.
The Next Boeing Airplane (NBA), as LNA calls it, could be launched in 2023 or 2024, which seems to be a growing consensus.
Consultant Michel Merluzeau, who does work for Boeing on occasion, predicted last week that the NBA could be launched late next year or early the following year. The airplane would be a 225-240 passenger aircraft (two-class) and a single aisle. This is like the Boeing 757—which largely has exited passenger service—and the upper limits of the A321neo. Merluzeau made his predictions at the Pacific Northwest Aerospace Alliance conference.
Bjorn’s Corner: The challenges of airliner development. Part 28. Crew training
By Bjorn Fehrm, Henry Tam, and Andrew Telesca
November 5, 2021, ©. Leeham News: Last week, we looked at our role in creating a competent maintenance activity so our aircraft can be kept airworthy throughout its operational life. The other important part of operational safety is crew training.
We learned that these two parts, keeping the aircraft airworthy with its maintenance and providing adequate training and information to the crews operating the airplane, have a major influence on flight safety. In fact, FAA has found that these parts have a larger influence on flight safety than the aircraft certification regulations.
We, as the OEM, must therefore develop the documentation, curriculum, and training tools so that crews working in the aircraft can fly it safely. This encompasses not only initial training but a continued refresh and check training throughout the crew’s life with the aircraft.
Figure 1. Air Training Supporot’s simulator for the 19 seat Beech 1900. Source: A.T.S.
Pontifications: David Joyce fills key void on Boeing’s Board
Sept. 6, 2021, © Leeham News: Last week’s election of David Joyce to the Boeing Board of Directors fills a glaring hole of talent and expertise that’s been missing from the Board for years.
By Scott Hamilton
Joyce, an outside director, brings commercial aviation and engineering experience to a Board that has been dominated by political, defense and financial expertise.
Following the two 737 MAX crashes in October 2018 and March 2019, the Board came under criticism—including from LNA—about the lack of technical, commercial, engineering and pilot representation. The 2018 Board had one commercial airline expert, from the executive suite: Lawrence Kellner, the former CEO of Continental Airlines. David Calhoun worked for GE for 26 years for the transportation, aircraft engines, reinsurance, lighting and other GE units. He left GE in 2006. From that point forward, Calhoun focused on finance industries. Dennis Muilenburg, an engineer, came from Boeing’s defense side.
But, as the table below illustrates, the 13-member Board was top-heavy with other disciplines.
Pontifications: Does Embraer’s turboprop design foretell what Boeing needs?
By Scott Hamilton
Aug. 23, 2021, © Leeham News: Could Embraer’s new turboprop design have formed the basis for the 100-150 seat Boeing single-aisle aircraft had the joint venture proceeded?
A former Boeing engineer thinks it might have.
The aft-mounted, open rotor engines and the ability to switch later to hydrogen fuel represent the kind of advances Boeing could use to restore its leadership role in commercial aviation.
Under the proposed JV, which Boeing ash-canned in April 2020, Embraer would have been responsible for development of the 100-150 seat aircraft Boeing needs to replace the 737-7 and 737-8.
Pontifications: A deeper hole for the Boeing 737 MAX market share
By Scott Hamilton
Aug. 9, 2021, © Leeham News: Boeing’s 737 MAX market share vs Airbus is in a deeper hole than may be generally realized.
Aviation Week last week complied a list of the top seven low-cost carrier airlines in Asia with orders for 90 or more A320s or 737 family members.
The data illustrates just how deep a hole Boeing is in.
LNA created market-share pie charts based on the numbers above to better illustrate the challenge. It’s not a pretty picture for Boeing.
Boeing’s apparent shifting product strategy
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By Scott Hamilton
Introduction
Aug. 2, 2021, © Leeham News: Boeing last week reiterated it believes the 777-9 will be certified and delivered in late 2023. CEO David Calhoun also said, “I’m confident that might be the next of our programs.”
Let’s set aside for the moment whether the EIS prediction becomes reality and assume Boeing will be correct. Let’s assume the 777-XF will be the next program launched. The larger question then becomes, what does this mean for the Next Boeing Airplane (NBA)? And what are the implications for Airbus?
Summary
- The NBA launch seems unlikely in 2022; 2023 may be the target.
- But with the 777-XF moving up in priorities, will the NBA continue to slide to the right?
- What is the Airbus response to an NBA?
- Or, should Airbus move first to further preempt the NBA?
Pontifications: The reshaped commercial aviation sector
By Scott Hamilton
July 12, 2021, © Leeham News: With Washington State and the US open for business following nearly 18 months of COVID-pandemic shut-down, there is a lot of optimism in commercial aviation.
In the US, airline passenger traffic headcounts are matching or exceeding pre-pandemic TSA screening numbers. Airlines are placing orders with Airbus, Boeing and even Embraer in slowly increasing frequency.
The supply chain to these three OEMs looks forward to a return to previous production rates.
It’s great to see and even feel this optimism. But the recovery will nevertheless be a slow if steady incline.
China distorts progress in Boeing 737 MAX return to service
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By Scott Hamilton
Introduction
June 28, 2021, © Leeham News: There are now 265 Boeing 737 MAXes in airline service, according to data reviewed by LNA.
There are 263 MAXes in storage that appear to be previously delivered airplanes. This number is artificially inflated by the 95 MAXes that are grounded in China. China’s regulator hasn’t recertified the MAX, a move widely considered political due to the long-running trade war between the US and China initiated by the Trump Administration.
When the MAX was grounded in March 2019, there were 387 in service. The math indicates 147 MAXes were delivered from inventory or new production since the airplane was recertified by the Federal Aviation Administration in November 2020 and other regulators shortly afterward.
There were 400 MAXes in inventory at the end of the first quarter, down from 425 at the end of the year. Boeing resumed production in the single digits. Boeing does not reveal its rate, but it is believed to be about 10-14/mo going to 16/mo in the third quarter.
In contrast, there are 106 A320neos and 38 A321neos in storage as of last Friday.
Why the MAX isn’t back – yet
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By Judson Rollins
Introduction
April 29, 2021, © Leeham News: Much virtual ink has been spilled in recent weeks over an apparent surge in demand for Boeing’s 737 MAX, as a slow drip-drip-drip of cancellations finally reversed into net new orders.
The Boeing team must be grateful to see a shift toward positive headlines for its single-aisle family. Longtime 737 customers provided badly needed votes of confidence with top-ups to their previous orders.
However, such momentum has been slowed by a continuing wave of cancellations. Boeing logged just 12 net orders in February and 40 in March. More cancellations are due to be announced; Turkish Airlines recently said it would cancel or convert to options 50 of its previous MAX orders, and ch-aviation says a single unidentified customer cancelled another 45 in March. Aeromexico swapped MAX orders for other MAX orders, saving $2bn in the process – a revenue hit for Boeing down the line.
The total backlog, net of orders in doubt under ASC 606, is down from a high of 4,708 to just 3,240 as of this week. This is enough to support average production of just 30 airplanes per month through 2029. Boeing CEO David Calhoun said on yesterday’s earnings call that he remains confident the MAX demand will recover from this point forward.
Summary
- New orders are mostly from large existing MAX customers, and likely include mitigation discounts for delivery delays.
- Boeing has 400 undelivered aircraft in storage, some of which were due for delivery to now-defunct airlines.
- Pricing trends are quite negative, depriving Boeing of badly-needed free cash flow.