Boeing responds to FAA recertification of the 737 MAX

  • Coverage of recertification of the Boeing 737 MAX continues with the next post.

Nov. 18, 2020: Boeing issued the following statements in response to the US Federal Aviation Administration recertifying the 737 MAX.

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Breaking News: FAA recertifies 737 MAX–continuing coverage

  • Coverage continues in the next post.

Nov. 18, 2020, (c) Leeham News: The US Federal Aviation Administration today recertified the Boeing 737 MAX, ending a 20-month grounding.

Underlying photo: Source, Boeing.

Recertification of the airplane will follow by Transport Canada and Europe’s EASA, probably this month.

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FAA recertifies Boeing 737 MAX

  • Continuing coverage in next post

By Bjorn Fehrm

November 18, 2020, ©. Leeham News: The FAA has declared the Boeing 737 MAX 8 and 9 safe to fly after a 20 months grounding. On March 10, 2019, the Ethiopian Air ET302 crashed after Boeing’s pitch augmentation software MCAS triggered erroneously and caused the aircraft to crash. This accident followed a similar accident of Lion Air JT610 on October 29, 2018.

Ethiopia grounded the MAX on the day, China the day after, and the FAA on March 13. The 737 MAX has been grounded worldwide since the FAA grounding.

It has been a gruesome 20 months for Boeing, where it’s gone from denial of guilt to a full acceptance of responsibility and a complete change of attitude. With changes to the MAX verified by FAA, EASA, Transport Canada, and Brazil’s ANAC, it’s now ready to fly again.

We will cover the return to flight of the 737 MAX in several articles, the first dealing with the question: Is the 737 MAX safe to fly?

Below we go through what went wrong and why this chain of events will not happen again on an updated 737 MAX.

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Podcast: 10 Minutes About the 737 MAX Return to Service

Nov. 18, 2020, © Leeham News: LNA today launches a new feature, a periodic podcast about key issues of the moment.

Called “10 Minutes About,” the podcast is—as the title says—10 minutes about the issue selected. This time frame is short, to the point and doesn’t take too much time from the listener.

Today’s launch podcast is 10 Minutes About the 737 MAX Return to Service. The US Federal Aviation Administration today recertified the MAX.

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Pontifications: EU tariffs on Boeing airplanes in effect; ~60 at risk

Nov. 16, 2020, © Leeham News: The European Union implemented tariffs Nov. 9 on Boeing and other US products in retaliation for the Trump Administration tariffs on Airbus and EU products.

By Scott Hamilton

This is the latest in the 16-year trade battle between the US and Europe over subsidies and tax breaks found to be illegal under World Trade Organization rules.

The US was authorized last year to impose tariffs on Airbus and other EU products. The Trump Administration initially imposed a 10% tariff on imported Airbus aircraft. A320/321s assembled at Airbus’ Mobile (AL) plant were exempt, even though major components were imported.

Trump increased the tariffs to 15% in March, just as the COVID-19 pandemic erupted worldwide. As a result, few Airbus airplanes were delivered into the US since then.

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HOTR: Don’t get over-optimistic on COVID-19 vaccine news

By the Leeham News team

Nov. 10, 2020, © Leeham News: Pfizer yesterday announced it’s on track to produce a COVID-19 vaccine that appears to be 90% effective in trials. The company is one of the world’s leading drug makers.

This is good news.

But before jumping to the old cliché about a light at the end of the tunnel, LNA’s Judson Rollins cautions, do the math.

“Read the fine print at the end of the press release,” Rollins says.

“Based on current projections, we expect to produce globally up to 50m vaccine doses in 2020 and up to 1.3b doses in 2021,” the press release says.

“It’s a two-dose vaccine, so divide by two to figure the number of people who could be immunized,” Rollins says. “Even if a second candidate is approved and can be produced in the same quantity next year, that means just 17% of the world’s population will be vaccinated. And that assumes everything goes according to plan.”

Rollins did an extensive analysis of how quickly global air traffic would return to normal. In his July 13 post, Rollins projected that traffic won’t fully recover until 2024 at the earliest or 2028 at the latest. It all depends on how quickly a vaccine was developed, how quickly it could be distributed globally and how quickly people had confidence in it.

“We’re in only the second or maybe third inning of a very long ball game,” Rollins says. “Vaccines kill off a virus by denying it bodies in which to reproduce. If you don’t innoculate enough of the population while immunity lasts, you’re back to square one.”

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Boeing needs 737 replacement launch by 2026 if not sooner

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By Scott Hamilton

Introduction

Nov. 9, 2020, © Leeham News: Boeing needs hundreds of new orders for the 737 MAX and/or a new replacement program launch by 2026, if not sooner.

An analysis shows that 737 deliveries tank by 2028.

This isn’t just about the 737-10 and 737-9, which don’t fare well against the Airbus A321neo. The shrinking backlog is the problem.

Ryanair’s CEO, Michael O’Leary, said last week Boeing will delay delivery/entry into service of the 737-10 MAX by up to two years.

This largely stated the obvious.

The first 10 MAX rolled out of the factory Nov. 22 last year. It could not enter flight testing because the MAX family was grounded March 13. The MAX remains grounded. Recertification may come this month, but it appears more likely next month.

Boeing 737-10. Source: Boeing.

This delays the start of flight testing until probably January. This is a 14-month delay.

Flight testing will take a year to 15 months, or to January to March 2022—about two years after the planned EIS. Boeing’s production ramp up will further impact delivery of the 10 MAX.

Although some recent new focus was on the 10 MAX, the larger issue is the entire 737 family.

Summary
  • Production ramp up will be slow.
  • Inventory will take two years to clear.
  • Airline demand is poor the next 2-3 years.
  • Boeing’s breadwinner sees major delivery drop from 2026.
  • A further drop by 2028 demonstrates need for a 737 replacement—not just an A321 competitor.

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Pontifications: Certification timing may push EIS for 777X

Nov. 2, 2020, © Leeham News: Throughout the 737 MAX investigations and recertification process, former Boeing CEO Dennis Muilenburg said there would be no delay on 777X certification.

By Scott Hamilton

On Boeing’s earnings call last week, Muilenburg’s successor, David Calhoun, said there could be.

“On the 777X, we continue to work with the regulators on certification work scope, including reflecting the learnings from the 737 cert process,” Calhoun said. “As with any development program, there are inherent risks that can affect schedule. And while we continue to drive toward entry into service in 2022, this timing will ultimately be influenced by certification requirements defined by the regulators.”

Boeing is certifying the 777X under the Changed Product Rule, the same process used for the MAX. Certification is being pursued as a derivative of the 777, a point of scrutiny on the MAX.

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Pontifications: Earnings previews Airbus, Boeing; Watching Mitsubishi

By Scott Hamilton

Oct. 26, 2020, © Leeham News: It’s earnings call week for Boeing and Airbus.

And Mitsubishi Heavy Industries is said to plan an announcement “freezing” development of the SpaceJet.

Let’s preview these events.

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Lessors to Take Growing Share of Fleeting the Future

By Kathryn B. Creedy

Air Lease Executive Chair Steven Udvar Hazy expects lessors to play a larger role in aircraft fleeting in the future, according to comments made during yesterday’s Aviation Week Fireside Chat with the lessor.

“I don’t see lessors going below 40%,” he told Air Transport World Editor Karen Walker. “I see it creeping up to perhaps 50% or 55% and that includes operating leases and various other exotic mechanisms.”

Udvar Hazy pointed to the poor financial shape of the world’s airlines which have used all their current levers to increase liquidity to ride out the Covid 19 crisis.

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