Boeing B-29 “Doc” visits Seattle May 17-22

By Scott Hamilton

May 17, 2022, (c) Leeham News: A Boeing B-29 bomber, made famous in World War II, is here in Seattle May 17-22. Ground tours will be May 19-22. Rides will be the mornings of May 21-22. Times may be found here. The plane is at the Museum of Flight at Boeing Field.

Boeing B-29 “Doc” is visiting Boeing Field May 17-22. It will be open to the public May 19-22. Photo credit: Leeham News.

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Pontifications: Boeing spending millions to retain engineers

May 16, 2022, © Leeham News: Boeing is spending millions of dollars to retain engineers represented by the union, SPEEA.

It’s a reversal of efforts to trim SPEEA ranks through early buyouts and outsourcing and to address an aging workforce.

By Scott Hamilton

The proposed 2017 joint venture between Boeing and Embraer was meant to address the retirement crunch. But delays in clearing the JV by the European Union and then the Boeing 737 MAX crisis and the global COVID pandemic killed the deal. Boeing walked in April 2020, shortly after the pandemic began. Officials claimed that Embraer failed to meet all the terms and conditions outlined in the documentation. Embraer denied this, claiming Boeing’s self-inflicted MAX crisis was the reason Boeing walked. The companies are in arbitration over a $100m break-up fee. With the collapse of the JV, Boeing lost access to Embraer’s young (and less expensive) engineering workforce, the No. 1 reason to do the joint venture.

“There is a big push to keep people,” SPEEA tells LNA. “Boeing is using raises, restricted stock, and incentive bonuses to keep engineers. Our contracts called for $7m in out-of-sequence raises last year and the company spent $22m.”

Boeing is more than a year away from clearing its inventory of 737s and 787s. Until then, or until the end is definitively in sight, it’s highly unlikely that Boeing will launch a new airplane program. But there are five 7-Series airplane programs that engineers and others are working on: the certification of the 737-7 and 737-10 this year and next; the development of the 777-8F; and increasing the gross weight of the 787-9 and -10. Certification of the 777-9 is also outstanding. Nothing official has been said in detail, but changes to the airplane demanded by regulators may require engineering work.

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Impact of Russian Airspace Closure for mid-European freight airlines

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By Bjorn Fehrm

Introduction  

May 12, 2022, © Leeham News: Last week, we looked at what the closure of Russian airspace would mean for a mid-European airline that flies to Asia destinations like Japan, Korea, or Mainland China.

Air France now flies the routes from East Asia south of Russian airspace instead of over Siberia. The route is longer which increases the operating costs, but with the examples Boeing 777-300ER, there are no restrictions on passenger load factors, and most times, the cargo space can be loaded to the volume limit.

For a freight airline flying similar routes, the added distance impacts payload, as freighters have about 2,000nm less range than their passenger siblings. We check the operating cost and payload impact for mid-European freighter airlines flying from Far-East freighter hubs to West Europe.

Summary

  • A freighter airline takes a heavier hit from Russian airspace closure.
  • As the extra distance eats into the possible payload, the operating cost per tonne for hubs like Shanghai, Seoul, and Taipei increases more than for the airline’s passenger service.

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HOTR: Embraer gets launch customer for E-Freighter, Boeing adds Lufthansa for 777-8F

By the Leeham News Team

May 10, 2022, © Leeham News: Embraer yesterday received its launch order for the E-Jet E1 P2F conversions from lessor Nordic Aviation Capital (NAC).

NAC reach “an agreement in principle” to convert 10 E190/195-E1s into freighters. The first deliveries are in 2024. The aircraft are in NAC’s current fleet.

Embraer E190F for lessor Nordic Aviation Capital. Source: Embraer.

The E-Freighters have 50% more volume capacity and three times the range of turboprop freighters (read: ATR) and up to 30% lower operating costs than narrowbodies (read: Boeing 737s), Embraer says. The aircraft will be converted by Embraer at its Brazilian operations. The conversion “includes the main deck front cargo door; cargo handling system; floor reinforcement; Rigid Cargo Barrier (RCB) – 9G Barrier with access door; cargo smoke detection system, including class “E” extinguishers in upper cargo compartment; Air Management System changes (cooling, pressurization, etc.); interior removal and provisions for hazardous material transportation,” Embraer says. “The E190F can handle a payload of 23,600lb (10,700kg) while the E195F a payload of 27,100 lb (12,300 kg).”

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Mind the gap between announced and actual production rates

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By Vincent Valery

Introduction  

May 9, 2022, © Leeham News: As passenger traffic is recovering from the COVID-19 pandemic, especially in the Americas and Western Europe, many airlines are eager to take delivery of more fuel-efficient aircraft. Higher oil prices and ambitious plans to reduce carbon emissions are driving new-generation aircraft demand, notably for the Airbus A320neo and Boeing 737 MAX families.

A combination of supply chain disruptions and challenges associated with increased production means that Airbus and Boeing aren’t ramping-up A320neo and 737 MAX production as much as they would like. Boeing fell short last year on its 737 MAX production targets. The American company is also dealing with multiple delays in the resumption of Dreamliner deliveries.

In recent years there have been significant gaps between announced and actual production rates. The gaps have a material impact on projected OEM revenues, cashflows, and incomes.

LNA analyzes aircraft production rates on all the Airbus and Boeing programs since 2010 to assess whether the gaps were as significant in the past. LNA also evaluates the programs that were the closest and furthest away from announced production plans.

Summary
  • A metric to measure production line consistency;
  • Relatively consistent Single-Aisle rates;
  • More volatile twin-aisle rates;
  • A more consistent OEM.

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Pontifications: Next new mainline jet likely will be conventionally powered

By Scott Hamilton

May 9, 2022, © Leeham News: Pratt & Whitney thinks a hybrid-electric propulsion system might be ready for installation on the next new airplane from Boeing or Airbus by 2031. But more likely is that the new airplane, whatever design it is, will more likely be powered by a conventional engine that is capable of running on 100% Sustainable Aviation Fuel (SAF).

Graham Webb, the chief sustainability officer at Pratt & Whitney, said PW is “obviously investing in our Geared TurboFan. That’s our bread and butter. We are working to infuse a large number of technologies, including ceramic matrix composites, and aerodynamic improvements to the turbines and the compressor. We’re working on improving the cooling optimization and sealing, and the traditional core efficiency suite of technologies to enable us to get to the higher overall temperatures we need for the next generation cycles.

“We’ve already completed a suite of work with the FAA and our clean aviation program that enabled us to expand the bypass ratio of our Geared TurboFan engine further from where we are till now. We’re going to use that technology to grow the engine. We’ll put a different fan-drive gear system technology as a result of that expansion. That’s kind of like the traditional engine efficiency piece,” Webb said at the Aviation Week’s MRO Americas event in Dallas. LNA spoke with Webb on the sidelines of the huge event, attended by more than 13,000 people.

Under the FAA CLEEN Phase I program, PW developed ultra-high bypass ratio technologies beyond the current 12:1 present in today’s GTF engines. These technologies are ready for deployment for a future new aircraft. The specific bypass ratio of this new engine will be optimized to each installation on the new airframe configurations being developed by the airframers, a spokesperson added.

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HOTR: Boeing moving HQ to Washington, DC, was obvious to those looking

By the Leeham News Team

May 5, 2022, © Leeham News: Boeing is moving the corporate headquarters from Chicago to Arlington (VA) (a Washington (DC) suburb), the Wall Street Journal reported. The signs were there for all to see if you were looking.

Boeing closed its headquarters in Chicago as the COVID pandemic expanded. The Illinois/Chicago tax breaks expired. Key corporate communications people relocated already from Seattle to Washington, including Bernard Choi—whose duties expanded from oversight of Boeing Commercial Airplanes communications to the corporate level. There is an under-utilized Boeing building in Arlington.

Already under financial pressure because of the 737 MAX grounding in March 2019, the pandemic made things much, much worse. With no orders flowing into Boeing Commercial and few deliveries after the pandemic grew across the globe, Boeing’s cash flow took a huge hit. Then 787 deliveries were suspended in October 2020 and have yet to resume.

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Spirit AeroSystems seeks bigger role in aftermarket

By Scott Hamilton

May 5, 2022, © Leeham News: Spirit AeroSystems has had a tough couple of years. It’s not only had COVID to contend with, but its customer that provides more revenue than any other—Boeing—had a major impact on Spirit’s revenues and profits.

Boeing’s 737 MAX crisis, suspension of deliveries for the 787 and extended delays in the 777X programs all hurt Spirit. The Tier 1 supplier makes the fuselages for the 737s. It makes the nose sections for the 787 and 777. Spirit’s 737 production rate is now 31/mo. Deliveries for the 787 are expected to resume in the second half. Boeing said it will gradually increase production from the current rate of about 0.5 per month to 5/mo (though the timeline remains murky). Production of the 777X is suspended through 2023 while that for the 777-200LRF probably will hover around 2/mo for the indefinite future.

In its 1Q22 earnings release on May 4, Spirit appears on its way toward solid recovery. The company beat street expectations on strong Airbus deliveries, for which it’s also a supplier. Spirit’s own operational improvements and below-the-line improvements contributed to the better than expected results. And free cash flow was stronger than expected. The earnings detail is here.

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Impact of Russian Airspace Closure on mid-European airlines

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By Bjorn Fehrm

Introduction  

May 5, 2022, © Leeham News: Last week, we looked at what the closure of Russian airspace would mean for North European airlines that fly to Asia destinations like Japan, Korea, or Mainland China.

Our example was Finnair’s route from Helsinki to Tokyo and what it would mean for it cost-wise to fly over the North pole and then down to Tokyo instead of over Russia.

We now continue the analysis with what the air space closure means for a West European airline like Air France. We check the cost increase to fly from Paris to Seoul in South Korea when you can’t use Russian and Ukrainian air space.

Air France 777-300ER. Source: Wikipedia.

Summary
  • The costs for Air France from Russia’s airspace closure are more manageable than for Finnair.
  • Longer-term, it will mean changes to the route structure for affected airlines.

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HOTR: Shakeout of P2F companies coming

By the Leeham News Team

May 3, 2022, © Leeham News: A shakeout in the number of passenger-to-freighter conversion companies is coming, say industry stakeholders.

The conversion industry has seen a number of new lines and new entrants emerge as demand for air freight exploded during the COVID pandemic. But the long-term demand won’t sustain these new entrants, said members of a panel in April at the Aviation Week MRO Americas conference.

There are now four companies offering Airbus A320 conversions: EFW, which is partly owned by Airbus; Precision Conversions; CCC (known as C Cubed); and Sino Draco. Some have yet to produce a converted A320 and EFW has multiple lines.

There are four companies offering Boeing 777 conversions: IAI Bedek, the first to market; Mammoth Freighters, the only one offering 777-200LR conversions; Kansas Modification Center; and Eastern Airlines. The latter is converting 777 passenger aircraft without cutting a big cargo door into the airplane, essentially maintaining the “Preighter” approach used by several airlines during the pandemic. The termination of the Boeing 747-8F production and aging 747-400Fs will boost 777 P2F sales, panelists said.

Boeing partnered with third parties to convert 737-800s. AEI is an independent 737 conversion company. It also converts Boeing MD-80s and Bombardier CRJs. The latter two programs were not commercial successes, admits Bob Convey, SVP of Sales and Marketing. AEI will only recover its costs for the CRJ-200 P2F. Only about 30 MD-80s were converted. Odd-sized containers make the CRJ and MD-80 less desirable than 737s and A320s, he said.

Many companies are “late to the party” and will fail, Convey said.

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