Leeham News and Analysis
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Leeham News and Analysis
- Boeing’s future depends on FAA approvals May 26, 2025
- Department of Justice, Boeing OK to Non-Prosecution Agreement May 23, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 23. May 23, 2025
- Services are driving revenues and profits in difficult times, Part II May 22, 2025
- Boeing publicizes fourth Chief Aerospace Safety Officer Report May 21, 2025
Boeing’s future depends on FAA approvals
By Scott Hamilton
Analysis
May 26, 2025, © Leeham News: Boeing’s future depends on satisfying the Federal Aviation Administration (FAA) that its failures to follow safety protocols and quality control standards are behind it.
It’s been a rough six years since the worldwide Boeing 737 MAX fleet was grounded for 21 months following two fatal accidents five months apart. The existential threat to Boeing from the grounding was exacerbated by the two-year COVID-19 pandemic and a 20-month suspension in deliveries of the Boeing 787 due to production defects.
Then, just when Boeing was making progress, a previously undetected quality “escape” allowed a door plug on a brand new 737-9 MAX operated by Alaska Airlines to separate from the airplane at 14,800 ft shortly after take-off from Portland (OR) on Jan. 5, 2024.
A new crisis hit Boeing. The FAA, which had clamped down on Boeing’s 737 production line following the grounding on March 13, 2019, tightened its grip even further.
Today, Boeing is slowly clawing its way back.
In a media briefing last week for its fourth annual release of its Chief Aerospace Safety Officer Report (CASO Report), Don Ruhmann, the CASO, and three colleagues outlined Boeing’s progress in satisfying the FAA that Boeing is on a path to technical and safety recovery. (Financial recovery is not strictly the FAA’s concern and wasn’t covered in the briefing.)
Summary
- Boeing’s Speak Up program for employees did not have an independent manager to whom complaints, concerns, and suggestions could be tendered. Previously, line managers received complaints, raising fears among employees that retaliation was possible. Now, an independent manager is part of the process.
- Boeing told LNA that Ruhmann welcomes a meeting with the engineers’ union, SPEEA, to hear concerns over a stalled SPEEA safety initiative called ASAP.
- Preparations for expansion of 737 production to the Everett (WA) widebody factory are underway, but this, too, depends on the FAA.
The annual report is an outgrowth of the 2018-2019 737 MAX crashes and the crisis that followed.
Department of Justice, Boeing OK to Non-Prosecution Agreement
May 23, 2025, (c) Leeham News: The US Department of Justice and Boeing okayed the framework of a Non-Prosecution Agreement to finally resolve the litigation dating to the 2018/19 737 MAX accidents and the Jan. 5, 2024, Alaska Airlines flight 1282 accident. The notice was filed today in the federal court of the Northern District of Texas.
Boeing agrees to pay a total of $1.1bn in fines, compensation and investments. Some of this was previously paid with a Deferred Prosecution Agreement reached in 2021; and some was agreed in a second DPA reached last December. The first DPA was essentially voided following the Flight 1282 accident and the second was rejected on procedural grounds by the judge in the Texas federal court.
The notice may be downloaded here: NPA Notice 5-23-25.
The full agreement should be filed next week, the DOJ said.
Boeing’s 2025 annual safety report due this month
By Scott Hamilton
May 20, 2025, © Leeham News: Boeing will release its fourth annual safety report this month. The first was in 2022.
The document is the Chief Aerospace Safety Officer Report (CASO Report). Previous CASO reports outlined programs Boeing adopted since the 2019 737 MAX grounding and safety crises emerged across Boeing Commercial Airplanes.
Related Documents
Quality control, safety protocols, intimidation, retribution, and retaliation against line workers were highlighted during the MAX accident investigations and whistleblowing accusations at the Renton, Everett (WA), and Charleston (SC) production plants.
Quality control at Spirit AeroSystems, which builds the 737 fuselage and nose sections of the other 7-Series commercial airliners, also emerged as an issue.
The Federal Aviation Administration’s cooperation with Boeing and transfer of inspection and quality authority also came under scrutiny. The FAA revoked Boeing’s “ticketing authority” to certify 737s and 787s as airworthy before delivery, assuming this role itself. FAA inspectors clamped down on Boeing, reviewing previous work and overseeing production lines.
There is no end in sight for the FAA to relax its grip on Boeing. Boeing must meet six Key Performance Indicators (KPIs) before the FAA is convinced that the company has its house in order, allowing production rates to return to pre-MAX grounding levels and boost production for the 787. These KPIs are:
- Employee proficiency measures share of employees currently staffed who are deemed proficient in core skills.
- Notice of Escape (NoE) rework hours measures time performing rework due to non-conforming work from Fabrication and suppliers.
- Supplier shortages measures shortages per day from Fabrication and suppliers.
- Rework hours per airplane measures time spent performing rework in Final Assembly.
- Travelers at factory rollout measures unfinished jobs traveling from Final Assembly.
- Ticketing performance measures quality escapes per ticketed airplane prior to delivery.
Source: Boeing.
The 2024 CASO Report is expected to update these topics and more.
Services are driving revenues and profits in difficult times, Part I
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By Karl Sinclair
May 15, 2025, © Leeham News: The aerospace industry is a maintenance-intensive operation, where strict regulatory rules drive many requirements.
Assets must be constantly maintained, governed by the time or usage an airline derives from them.
This goes for airframes, engines, and human resources.
Services account for a large part of aerospace corporate profits. Boeing’s Global Services division is the most profitable part of the company. Photo credit: Boeing Global Services.
Some equipment manufacturers derive little or no profits from product sales, but they make lucrative and long-term revenues from attached maintenance contracts.
Political factors are also coming into play in the services segment.
As airlines are forced into a difficult and expensive decision regarding the payment of tariffs on new aircraft they acquire, many could opt for a different strategy.
Older aircraft that were due for replacement with newer, more fuel-efficient jets will be sent into MRO facilities for an additional heavy-maintenance check.
With falling fuel prices playing less of a factor in the acquisition decision, airlines will be tempted to defer deliveries (thus avoiding the payment of tariffs) using their current assets in their installed fleets.
Extending an aircraft’s useful life by another six to seven years will allow carriers to simply wait out the tariff threat when things return to normal.
LNA looks into the growing services revenue segment among various companies in the aviation industry.
Does an Airbus A220-500 need a new wing and engines?
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By Bjorn Fehrm
May 1, 2025, © Leeham News: For years, the debate has been going on about when Airbus will complement the A220-100 and -300 with a longer, higher-capacity A220-500.
In fact, the Bombardier team that designed the A220 as the CS300 already foresaw the prospect of a longer -500. The latest discussions have been around how much to stretch and whether a new wing and stronger engines are needed if the A220-500 replaces the A320neo in the Airbus lineup.
We use the Leeham Aircraft Performance and Cost Model (APCM) to examine the design data for the A220-100 and -300 and determine whether a stretched -500 would benefit from a new wing and stronger engines (which would then be the CFM LEAP-1Bs used on the Boeing 737 MAX).
Figure 1. A rendering of a possible A220-500. Source: Leeham Co.
Summary:
- The A220 started life as the CSeries, designed to compete with Embraer’s E-Jet E2.
- It has since added range through increased Maximum Takeoff Weights to enter the single aisle segment range-wise.
- A stretched A220 would expand the present A220 series upwards and potentially replace the A320neo for Airbus.
- We start by comparing the A220 to the E2, then we move on to examining whether an A220-500 can successfully replace the A320neo.
Teamsters, Boeing have a new contract
By Scott Hamilton
April 29, 2025, © Leeham News: One down, two more to go this year.
The Teamsters Local 174 and Boeing have a new contract. Union members ratified a new contract on April 19. Results were announced on April 21. Local 174 represents about 300 truck drivers for Boeing in the greater Seattle region. A strike could have disrupted production.
The union said the “contract materially surpasses all previous contracts for the group. The new agreement, which not only makes major language improvements but also guarantees economic victories that raise the bar for the rest of the industry, comes on the heels of labor disputes between Boeing and the International Association of Firefighters and the International Association of Machinists.
“Contrary to those negotiations, bargaining with the Teamsters took an entirely different tone, and the resulting Agreement will protect and reward Boeing Teamsters for years to come.”
Related Story
Boeing faces three labor contracts this year
Boeing wants to remarket China’s airplanes. It’s costly and time consuming.
- China has 130 Boeing airplanes that are identified in the Boeing backlog. On last week’s earnings call, officials said China accounts for 10% of its backlog of 6,319 aircraft as of March 31. This means there are about 500 Chinese-destined aircraft in the “Unidentified” backlog.
- Reconfiguring airplanes would cost millions of dollars. Backlogs to order materials and complete the work could be as much as two years. Engineering that may be required and regulatory review also could take a year or two.
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By Scott Hamilton
Reconfiguring aircraft interiors is a costly and time-consuming challenge. Aftermarket company ATS is one of those engaged in this sector. It explains the process here. Credit: ATS.
April 28, 2025, © Leeham News: China used to be Boeing’s most important single collective customer. By the end of 2016, this country’s airlines and lessors accounted for between 25% and 33% of Boeing’s annual deliveries, depending on the year.
Boeing was losing ground to Airbus there. The European rival aggressively sought to partner with China. In 2008, the company opened an A320 family final assembly line in Tianjin. This followed a long courtship in which Airbus boosted its supply chain and engineering in China. Airbus establishing an A330 finishing center in China in 2017.
In China, doing business there meant providing “benefit” to its new and growing industries. “Benefit” was a loosely defined term that generally meant transferring technology, helping create a supply chain and ordering parts and components made in China. For some, it meant providing kickbacks. (This is not suggesting Airbus engaged in kickbacks, but corruption is a matter of public record. Such was suggested to me when I was doing business in China between 1989 and 1993.)
It had been a long struggle. When Airbus was establishing its presence there selling airplanes, some officials said they didn’t need any air buses—passengers boarded by jet bridges. Over time, Airbus began to surpass Boeing’s orders in China and today is the leader.
Boeing recognized it needed to do more in China. It floated the idea of establishing a 737 final assembly line in China, but its touch-labor union, the IAM 751 exercised its veto contract clause to stop the idea. Instead, Boeing opened a 737 completion center in China in 2018.
Completion centers paint the airplanes and install the interiors. A few 737s were at Boeing’s completion center when President Trump started the tariff war with China; the airplanes returned to the United States.
How good is the C929? Part 2.
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By Bjorn Fehrm
April 24, 2025, © Leeham News: We started looking at the future COMAC C929 widebody 10 days ago. The C929 development has gone through a number of challenges, the first being how to structure the cooperation between China’s COMAC and Russia’s United Aircraft, with the latest being what engines to use for the aircraft.
The first problem was solved by COMAC deciding to go it alone, whereas the last problem around engines has no definite solution yet.
Figure 1. The C929, a new COMAC widebody that shall complement the C919. Source: COMAC.
Summary:
- The C929 airframe is taking form with detailed design having started, according to COMAC.
- The engine side is less settled. The likely engine is the Chinese CJ-2000, a 78,000lbf development of the CJ-1000A engine aimed at the C919.
- We apply the CJ-2000’s likely performance to the C929 airframe and use our Aircraft Performance and Cost Model (APCM) to predict the C929’s operational performance.
Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified”
By Karl Sinclair
April 23, 2025, © Leeham News: China represents 10% of Boeing’s commercial airliner backlog,
Boeing first quarter 2025 earnings report.
CFO Brian West clarified on the Boeing 1Q2025 earnings call. About 50 aircraft are scheduled to be delivered to China this year, but all are in limbo due to President Donald Trump’s trade war tariff fight, which began this month.
Previously thought to represent some 2% of the commercial backlog, with another 2%- 3% added for lessors, it was revealed that China represents 10% of the Boeing (BA) backlog. There are 130 Boeing jets identified in the backlog destined for China. With 6,319 Unidentified orders, about 500 are placed by China’s airlines and lessors.
“We have roughly 50 airplanes in our plan this year going into China, so we’re going to be pretty pragmatic with what we do here. For those airplanes that haven’t been built yet, we’ll be looking to maybe redirect those to other customers. For the airplanes that have been built, we call it re-marketing,” said Boeing CEO Kelly Ortberg on the CNBC financial network this morning.
Re-marketing, as Ortberg puts it, can be a costly endeavour.
At the end of FY2024, Boeing still had 50 aircraft in inventory (40 for China) it needed to “re-market.”
The 737 MAX program also incurred abnormal production costs and write-offs of ~$22bn since the grounding.
It was revealed that Boeing also had four 787s in production destined for China.
Holding onto inventory, especially commercial aircraft that need to be maintained, can be an expensive exercise.
Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale
By Karl Sinclair
Boeing first quarter 2025 earnings report.
April 23, 2025, © Leeham News: As aircraft destined for delivery for airlines in China were turned around and returned to the US, the Boeing Company (BA) released 1Q2025 results today. Results were better than expected, with the loss lower than forecast and Free Cash Flow better than analysts forecast.
Revenue in the quarter was $19.5bn, the loss per share before charges was 49 cents and free cash flow, while negative at $2.3bn, was well below analyst projections.
Boeing ended the quarter with $23.7bn in cash and marketable securities, down from $26.3bn on Dec. 31. Debt was $53.6bn, down slightly from the end of last year. Boeing has an untapped $10bn line of credit.
The company said it still expects to return to a new production rate on the 737 MAX line of 38/mo. Production for the 787, how at 5/mo, is forecast to go to 7/mo this year. Both figures are lower than previously targeted (42/mo and 10/mo, respectively).
Yesterday, Boeing announced that it had reached a deal with Thoma Bravo – a software investment firm, to spin-off parts of the company for $10.55bn in cash. The deal includes Jeppesen, ForeFlight, AerData and OzRunways assets, and is expected to close by the end of 2025.