Leeham News and Analysis
There's more to real news than a news release.
Trump tariffs beginning to hurt US aerospace companies; EU competitors to benefit
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By Scott Hamilton and Karl Sinclair
Sept. 1, 2025, © Leeham News: New policies by President Donald Trump in the first six months of his second administration in trade, with the North Atlantic Treaty Organization (NATO) and the European Union (EU) are causing a what may become a significant shift in defense spending that will benefit European companies.
The added business could strengthen those that also participate in commercial aerospace, to the detriment of US companies, notably Airbus.
US companies that for decades were the major suppliers to allies are already beginning to see European countries redirect spending to EU firms. Following Trump’s imposition of high tariffs on certain EU countries and others on Aug. 1, US defense companies have been hurt.
India canceled deliveries of Boeing 737-based P-8A Poseidons. Spain and Switzerland canceled orders for Lockheed Martin’s F-35 fighter.
Figure 1. Boeing P-8, based on the commercial 737 NG. India suspended delivery of the P8 due to the Trump tariffs. Credit: Boeing. Airbus now proposes a rival airplane based on the A321.
Airbus, Rolls-Royce, MTU, and others expect to benefit from these changes. And, as these companies see more defense work coming their way, then—at least in theory—their commercial business will benefit from stronger balance sheets, profits, cash flow, and perhaps the corporations’ technology.
In an interview at the Paris Air Show in June, the consulting firm Accenture told LNA that it is beginning to see key trends and increases in the defense sector.
Figure 2. Spain and Switzerland canceled orders for the Lockheed F-35. Credit: Lockheed. Airbus stands to benefit, among other EU-based defense contractors.
“Obviously, things are changing in terms of the dynamics,” said Jeff Wheless, Growth & Strategy Research Leader at Accenture. “I think certainly from a NATO perspective, I think folks are increasing their spending.”
Mark Rutte, the NATO secretary general, said that Trump’s pressure on NATO countries to increase defense spending to 5% of their budgets paid off. For decades, NATO countries were committed to a 2% spending level, but often failed to meet this commitment.
“Europe is spending by far less money on defense acquisitions than the US,” said Airbus CEO Guillaume Faury in response to an LNA question at the Paris Air Show. “It’s a ratio of one to four or one to five. On top of that, Europe is procuring a lot from the US. I think the message is loud and clear from the U.S. that Europe should take better care of its own security.”
Airbus’ A330neo gets better and better. Part 4
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By Bjorn Fehrm
August 28, 2025, © Leeham News: We analyze Airbus’s A330neo, how the different variants were developed, their sales, and their performance before and after the neo upgrade.
After examining the history of the A330-200 and its evolution into a neo version, the A330-800, we now assess its performance. We utilize our Aircraft Performance and Cost Model (APCM) to compare the performance of the A330-800 to Boeing’s smallest Dreamliner, the 787-8.
Figure 1. The A330-800, the very long-range A330. Source: Airbus.
Summary:
- The Airbus A330-800 is an aircraft for especially demanding routes. It’s the only 8,000nm airliner in the 250-seat class.
- Our 787-8 comparison shows where the A330-800 has its advantage, on the world’s longest routes.
China, Boeing appear near massive order: report
By Scott Hamilton
Aug. 21, 2025, © Leeham News: Boeing is nearing a massive order for up to 500 aircraft with China, Bloomberg reports. Completing the deal depends on political considerations, as so many of these do between China and the US for Boeing or Europe for Airbus airplanes.
Air China is the primary state airline of China. Boeing 737 MAX. Credit: CNBC.
But it’s significant that negotiations are active and appear nearing a deal if the politics can be worked out between the Chinese government and the Trump Administration. Boeing was frozen out by Beijing in 2017 when President Donald Trump, in his first term, began imposing tariffs on China in 2017.
President Biden, who took office in 2021, not only kept the Trump tariffs in place, economic and industrial sanctions were imposed when China covertly aligned itself with Russia following its 2022 invasion of Ukraine. When Trump was reelected in 2024, one of his first actions the following year was to impose more tariffs on China.
Even if the Boeing deal doesn’t successfully conclude soon, the very fact that serious negotiations and a near-deal validate LNA’s thesis since
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LNA’s analysis over the years concluded that China’s home-grown COMAC C919 could not fill the gap for the domestic demand for new airliners in the coming years created with the 2019 21-month grounding of the Boeing 737 MAX. China was the first to ground the aircraft after two fatal crashes of the MAX five months apart in 2018 and 2019. It was the last to un-ground the MAX after the Federal Aviation Administration recertified the airplane in November 2021.
Boeing starts the 787 production expansion in Charleston
By Bjorn Fehrm
August 18, 2025, © Leeham News: In our July 16 Article “ Boeing ponders 16/mo production rate for 787,” we concluded that Boeing needed to expand its present 787 plant in Charleston, South Carolina, to reach a rate of 16 Dreamliners per month before the end of the decade.
The Charleston Post and Courier reported on August 9th that Boeing has started the $1 billion expansion of the Charleston site. The article presents a Boeing rendering of the expanded site with the planned new buildings.
Figure 1 shows the rendering where we have marked the added buildings and site expansion.
Figure 1. The Boeing 787 production site south of the Charleston International Airport. Source: Boeing.
The new FAL building is essentially a copy of the present FAL, doubling the final assembly line capacity for the 787. Boeing has reached rate seven and plans to be at rate 10 per month next year.
The expansion is planned to be finished in 2028, after which Boeing will have the facilities to reach a rate of 16 787 per month.
Airbus’ A330neo gets better and better. Part 2
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By Bjorn Fehrm
August 14, 2025, © Leeham News: We analyze Airbus’s A330-900, the larger of the A330neos. Last week, we examined the product improvements that Airbus will roll out in the coming years, including the latest increase in Maximum TakeOff Weight (MTOW) and the resulting increase in range.
The A330 entered the market as a mid-range aircraft. With the launch of the A330neo and subsequent improvements, it is today a long-range aircraft that covers several trans-Pacific trunk routes.
How does the improved A330-900 stack up against the efficiency of the Boeing 787-9? We use our Aircraft Performance and Cost Model (APCM) to find out.
Figure 1. The A330-900 in the colors of Delta Airlines, a major operator of the model. Source: Airbus.
Summary:
- The Airbus A330 is tested on a challenging route, LAX to Shanghai, versus Boeing’s perhaps best long-ranger, the 787-9.
- Where Airbus can’t match the efficiency and cargo capacity of a 20-year younger 787-9, it can compensate with lower capital costs.
Boeing’s Ortberg’s first year as CEO: progress, but lots remaining to do
By Scott Hamilton
Analysis
Kelly Ortberg, shortly after assuming his position as the the CEO of The Boeing Co. on Aug. 8, 2024. It was his first visit to Boeing’s 737 production line. Credit: Boeing.
Aug. 8, 2025, © Leeham News: Today is the one-year anniversary of Kelly Ortberg stepping into what is probably the most challenging career move of his professional life: becoming the chief executive officer of The Boeing Co.
He took on a company that was in yet another existential crisis. It was still reeling from the Jan. 5, 2024, accident of Alaska Airlines flight 1282. On that date, a door plug of an inactive emergency exit on a new 737 MAX 9 that had been in service for a mere 10 weeks blew at 14,800 ft, minutes after takeoff from the Portland (OR) International Airport. But because of the circumstances and the skills of the pilots, there were only a few injuries, no fatalities, nobody was sucked out of the pressurized airplane, and the flight crew landed safely 16 harrowing minutes after taking off.
A new crisis was underway.
Progress Boeing had made in recovering from the twin MAX disasters of October 2018 and March 2019, the COVID-19 pandemic, and major production issues in the 737 and 787 lines ground to a halt. A new crisis of confidence in Boeing’s leadership, safety, and relationship with the Federal Aviation Administration (FAA) emerged.
As a result of AS 1282, CEO David Calhoun announced in March his “retirement;” sources say this wasn’t his decision, despite the public relations spin that it was. Calhoun said he would stick around until a new CEO was named.
Stan Deal, the CEO of Boeing Commercial Airplanes (BCA), likewise was “retiring” immediately. Board Chairman Larry Kellner would step down in April.
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Summary
- Early Missteps with the unions
- Inaction on a SPEEA safety plan
- Returning to higher rate production
- Certification challenges remain
- Restoring Boeing’s financial health
- The next new airplane
Boeing adds back deferred production costs for 777X in 1H2025
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By Karl Sinclair
August 5, 2025, © Leeham News: Boeing boosted program deferrals in the second financial quarter on the 777X and 737 MAX, shifting costs around, which had the effect of improving the profit-and-loss picture for the quarter.
Boeing spent more money on a unit-cost basis (UCB) than the company reported in its earnings.
Source: Boeing 2Q2025 Financial Reports.
Using program accounting, Boeing Commercial Aircraft (BCA) claimed a loss of $557m for the quarter. On a unit-cost basis (UCB), the amount spent to produce those aircraft delivered to airlines during the period was ~$1bn more than declared in its financial results.
However, the silver lining is that this is an improvement over the 1Q2025 UCB, when $2.933bn was lost.
This has become the typical result at BCA, where expenses are understated on the income statement, with a sizable portion capitalized and stored in Inventory.
Collins Aerospace pacing for new materials, production for next new airplane
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By Scott Hamilton
Aug. 4, 2025, © Leeham News: As the aviation industry considers what new major airliners to develop for the next 50 years, new engines, folding wings, advanced materials, and new design and production processes will also be key.
Collins Aerospace, a unit of RTX Corp., is deep into research and development of advanced structures.
This portion of Collins’ antecedents is Hamilton-Sundstrand and B. F. Goodrich Aerospace. Each was acquired by United Technologies, the forerunner of today’s RTX.
Collins has three basic lines of business: aerostructures, landing systems, and propeller and cockpit controls.
Going back to Jim McNerney, the CEO of The Boeing Co. from 2005-2015, the company said repeatedly that its next new airplane will be as much, or more, about production than it will be about the aircraft.
A new materials airplane based on composites or thermoplastics or a similar material to replace the ubiquitous 737 needs a production rate of 60-80 a month, or even more. This can’t be achieved with an autoclave process. Boeing and NASA, the US space agency, are studying new materials processes aimed at this rate.
Airbus is conducting similar studies in Europe with EU companies.
Airbus is openly talking about launching a new airplane program in 2030 to replace the A320 beginning in 2038. Boeing is quietly understood to be operating on a similar timeline for a new program that may be aimed at a New Midmarket Airplane (NMA) category airplane.
The underlying question, then, is whether these new processes will be ready by the time Airbus and Boeing want to launch an airplane program.
Bjorn’s Corner: Faster aircraft development. Part 1.
By Bjorn Fehrm
August 1, 2025, ©. Leeham News: Four years ago I did a series about aircraft development together with Henry Tam and Andrew Telesca. Both worked on the Mitsubishi Spacejet program. You can find the series here.
It was about the arduous task of developing and producing a certified aircraft for the FAA Part 23 standard and its EASA equivalent. The idea was to better describe what’s ahead for the many upstarts that wanted to develop 9-seat and 19-seat alternative propulsion aircraft.
Now we do a series about recent ideas on how the long development times for large airliners can be shortened. New projects talk about cutting development calendar time by one-third or more. Is this realistic?
Figure 1. The A350 development schedule from December 2011. Source: Airbus.
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What’s the next new aircraft, Part 5
By Scott Hamilton and Bjorn Fehrm
July 31, 2025, © Leeham News: We wrap up our five-part series today on What’s the Next New Airplane in the coming decades. We now look at Airplanes 9-13 in Figure 1 below.
Figure 1. The 13 airliners we look at in the series. Source: Leeham Co.
These are the (9) COMAC 929, (10) Eco-version of New Light Twin, (11) CFM Open Fan single aisle, (12) the Boeing 787 re-engine, and (13) the Airbus A350 re-engine.