Leeham News and Analysis
There's more to real news than a news release.
Boeing can’t build 737s fast enough to meet demand
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Introduction
Nov. 5, 2018, © Leeham News: With a backlog of more than 4,700 737 MAXes and pressure to increase the production rate beyond 57/mo, an analysis of the backlog shows why Boeing has plenty of room left to sell more 737s and push rates to 63 or even 70/mo.
Current 737 operators have only placed MAX orders to replace 56.5% of the airplanes in service. This compares with 77% of the A320 family ratio.
The resulting 3,430 airplanes Boeing potentially can sell, when divided equally between 2020 through 2029, comes to 381 airplanes per year. Even at increased production rates to 63/mo in 2020 and 70/mo in 2021, Boeing would not be able to fulfill these orders.
There wouldn’t be surplus production slots until 2024 at this evenly distributed assumption. Realistically, deliveries have to concentrate between 2023 and 2029.
Summary
- Boeing can’t build 737s fast enough to fulfill the replacement requirement, let alone handle industry growth demand.
- 737 replacement launch expected once NMA enters service.
Pontifications: Pilots train for instrumentation mismatches
By Scott Hamilton
Nov. 5, 2018, © Leeham News: It was a week ago that Lion Air JT 610 crashed into the sea, just 13 minutes after takeoff.
The crash was the first involving the Boeing 737 MAX (in this case, the -8 model). The airplane was virtually new, having been delivered to the airline in August. Lion Air was not new to the 737, having flown the NG models for years.
Because the airplane crashed into the sea, recovery of the black boxes was not quick. The flight data recorder was recovered several days later but the cockpit voice recorder is still missing. The FDR data apparently has not yet been downloaded for a preliminary read. At least nothing has been made public, if it has. Read more
How useful is an NMA, Part 4
By Bjorn Fehrm
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Introduction
November 1, 2018, © Leeham News.: Last week we looked at how a Boeing NMA would function as a medium range airliner in the Asia-Pacific.
We now continue with flying the two aircraft variants from Middle East locations, exploring how large an area in Asia, Europe and Africa the aircraft would cover.
Artists impression of the Boeing NMA. Source: The Air Current.
Summary:
- The profile of an NMA fits well in a Middle East Carrier’s fleet. Dependent on location it covers all of Europe and most of Africa and Asia.
- As the NMA is a lesser aircraft than the present long-range aircraft used on the routes it would have impressive economics for this type of operation.
Areas of inquiry in Lion Air crash
Oct. 29, 2018, (c) Leeham News: A three month old Boeing 737-8 MAX crashed into the sea yesterday.
There are scant clues.
A technical fault was reported the day before the flight, which was unspecified in the news reports LNC has seen. It was said to have been corrected.
Flight tracking showed a rapid descent into the water. One news story reported the pilot radioed he wanted to return due to something, but this is vague and unconfirmed.
It is far too early to speculate what happened to the airplane. There is just too much we don’t know, other than FlightTracker showed what appeared to be a rapid descent into the water.
Here’s what investigations will consider—all as a matter of the normal course of any investigation. This is not listed in priority.
Airbus’ disadvantages in widebody campaigns
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Introduction
Oct. 29, 2018, © Leeham Co.: Airbus faces a key disadvantage when it comes to winning current wide-body campaigns against Boeing.
The disadvantage is entirely out of its control.
It’s not about whether the A330neo or A350 vs the 787 economics are out of kilter. They’re not.
It’s about the engines, LNC is told by multiple market sources. Specifically Rolls-Royce engines, which exclusively power the Airbus wide-bodies.
Summary
- Airlines affected by Rolls-Royce-powered 787 problems are hopping mad.
- The negative halo effect puts questions over the Trent 7000-powered A330neo.
- While less affected, there is a negative halo effect over the Trent XWB-powered A350.
- Airlines considering follow-on ordered of 787s are ready to jump from RR to GE.
Pontifications: Engines, engines, engines
By Scott Hamilton
Oct. 29, 2018, © Leeham Co.: Engines, engines, engines.
News emerged last week that Rolls-Royce admitted its continuing problems with the Trent 1000 that powers the Boeing 787 now bled over to the Trent 7000.
RR will fall short of delivering the number of engines need to Airbus for the A330neo, meaning fewer deliveries of the airplane this year.
Boeing said it is clearing its inventory of 737 MAXes, but CFM LEAP engines are still late, slowing the effort.
Pratt & Whitney’s GTF engine deliveries to Airbus are caught up, but technical issues still plague in-service engines. CFM still has technical issues as well, though not as severe or persistent as with GTF, with its LEAP engines. Read more
How useful is an NMA, Part 3
By Bjorn Fehrm
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Introduction
October 25, 2018, © Leeham News.: Last week we looked at the trans-Atlantic capabilities for a Boeing NMA. We could see West Europe to East US worked fine, but then it quickly became sensitive to bad Winter weather on the Westward routes when we wanted to fly further.
Now we look at what works and not for Asia-Pacific, an important market for the NMA.
Artists impression of the Boeing NMA. Source: The Air Current.
Summary:
- The NMA is not ideal for the trans-Atlantic US to Europe market. Its reach is too limited.
- The Asian market works better as long as routes to “Down Under” are not considered.
Boeing reports strong 3Q results
Oct. 24, 2018: Boeing reported a stronger than expected third quarter when it announced financial results today.
The press release is here.
The stock was up more than 3% ($10.87) in early morning trading.
Wall Street analysts issued these quick notes ahead of the earnings call:
Boeing’s growing 777X challenge
- Boeing 3Q earnings call Oct. 24, 10:30am EDT.
Oct. 23, 2018, © Leeham News: Boeing has been confident it has bottomed out the production rate of the 777 line, successfully bridging between the Classic and the X models.
CEO Dennis Muilenburg nevertheless typically couches this confidence with “with still have some work to do.”
But during LNC’s trip last week to New York, sources said this bridge may be moving to the right.
Etihad Airways was a launch customer for the Boeing 777X. It’s deferred delivers once. It may do so again. LNC has been on this story since January 2017. Image via Google images.
Pontifications: Market Intelligence from NY
By Scott Hamilton
Oct. 22, 2018, © Leeham News: I was in New York City last week for a series of meetings. Here’s what “the street” is talking about. I make no judgment calls about whether the thoughts are on target or not. Read more