By Scott Hamilton
Aug. 9, 2023, © Leeham News: Boeing yesterday revealed the orders for sub-types for the 737 MAX and 777X, the first time it has done so publicly.
The Seattle Times first reported the MAX detail.
The MAX data is largely similar to LNA’s estimates over the years, in which we analyzed the backlog, including Unidentified customers, to percentages. When the MAX 10 was program was launched, customers who ordered the MAX 8 or MAX 9 switched some of these to the MAX 10. Others have done so since then.
MAX orders remain concentrated around the MAX 8 and the high-capacity MAX 8 200, also known as the MAX 8200. Seventy-one percent of the MAX orders in backlog are for these two aircraft types. In contrast, 62% of the Airbus A320neo family backlog is for the largest model, the A321neo. Boeing’s direct competitor to the A321neo, the MAX 10, represents 19% of the MAX backlog.
The MAX 7 and MAX 10 have yet to be certified. Only the A321XLR remains to be certified of all the A320neo family variants.
Aug. 8, 2023, © Leeham News: The cargo conversion market faces the prospect of oversupply of certain types, the consulting firm IBA said last week in a webcast.
The aftermarket conversion of Boeing 737-800s is already at 60 this year, according to IBA’s estimate.
The forecast doesn’t extend beyond this year—and therefore is incomplete. IBA notes that the Airbus A321 P2F supply is a fraction of the 737-800 conversions, which are undertaken mainly by Boeing and aeronautical Engineers Inc (AEI). There are more than 100 A320 family conversions orders (all but a handful for the A321) that will be coming on line in future years.
Likewise, IBA’s forecast for widebody conversions doesn’t extend beyond this year. There are also more than 100 orders for Airbus A330ceo conversions (all but a handful for the A330-300). Figure 2, like Figure 1, paints an incomplete picture.
Aug. 1, 2023, © Leeham News: Air India is taking 55 Boeing 737 MAXes originally built for Chinese airlines and lessors, LNA has learned. These are part of the order announced in February for up to 150 MAXes. The order was finalized during the June Paris Air Show.
This deal accounts for the sharp reduction in inventoried MAXes reported last week during the Boeing 2Q2023 earnings call. It also represents another development in the see-saw saga of whether to remarket the 140 MAXes built for China.
First, Boeing was going to remarket around 140 737 MAXes ordered by Chinese airlines and lessors but which remained in inventory due to Beijing’s refusal to authorize delivery.
Then, a mere three months later, Boeing CEO David Calhoun—who announced the remarketing effort in the first place—said Boeing would pause remarketing the aircraft.
By Bryan Corliss
July 26, 2023, (c) Leeham News — The Boeing Co. on Wednesday reported a quarterly loss of $99 million, due in part to spending tied to production rate increases in its Commercial Airplanes division.
Boeing said that rates on its 737 line in Renton are increasing to 38 a month. The 787 program has increased rates to four a month, with a plan to increase that to five a month by the end of this year.
Boeing is working with suppliers to get rates up to 50 a month on the 737 line sometime in 2025-26. CEO Dave Calhoun said during Wednesday earning call that demand is there for even higher rates.
“I’d love to get to 60 and the market is there for it,” he said. “The industry is short of airplanes by a relatively large margin.”
However, Boeing and its suppliers need to stabilize production at currently projected rates before considering going beyond what’s already been announced, the CEO said. “We’re going to work hard on stability.”
For this year, Boeing said it expects to deliver between 400 and 450 737s, along with 70 to 80 787s.
By the Leeham News Team
Last week, we examined Boeing’s challenges this Boeing Commercial Airplanes (BCA). This week we look at Boeing’s Defense unit, Boeing Defense, Space and Security (BDS). BDS is often overshadowed by BCA’s issues. But BDS has a recent track record of negative margins and negative cash flows.
Fixed priced contracts Boeing won proved to be underbid. BDS has taken a stream of big write-offs that don’t seem to have an end in sight.
This is an excerpt from the 2018 Boeing Company (BA) financial statements (edited for brevity):
Some odds and ends after three weeks on the road.
July 18, 2023, © Leeham News: When NASA gives up on a project, it’s time for others to take notice.
The agency is best known for space travel. But it funds and undertakes research and development for aeronautics, including commercial aviation. NASA, after all, is the acronym for National Aeronautics and Space Administration. Boeing, and Airbus, benefitted from NASA research in the past. NASA currently is working with Boeing on the transonic truss brace wing concept (TTBW) that could redefine how airplanes are designed and look as early as the end of this decade.
So, what has NASA abandoned? Late last month, the agency pulled the plug on the X-57 electric airplane before the first flight. NASA concluded that the electric and battery technology for the X-57, a small airplane, is too dangerous. NASA wouldn’t even authorize test flights.
It’s worth noting that LNA’s Bjorn Fehrm, an aerospace engineer, called bullshit on electric airplanes in his first of a series of articles way back on June 30, 2017. Billions of dollars have funded some 200 companies pursuing electric airplanes. This is money that could have been invested in expanding production of Sustainable Aviation Fuel, the leading alternative of alternative energy projects.
The current, continued frenzy over alternative energy vehicles is like the 1990s dot com frenzy. And just as the dot com boom went bust, the day is coming soon when the alternative energy book will go bust, too.
By the Leeham News Team
July 17, 2023, © Leeham News: The Boeing Co. (BA) reports its second quarter earnings next week. The company continues to struggle with challenges, mostly but not entirely at Boeing Commercial Airplanes (BCA). BA has posted four consecutive years of financial losses, dating back to 2019.
Beset by issues indigenous to them, the pandemic exacerbated an already difficult situation. With a net debt load of over $40bn and annual interest payments hovering around the $2.5bn mark, it will be difficult for BA to regain financial health if their core business does not produce positive results.
LNA looks at the BCA division, how it is crucial to the long-term success of the company and the correlation it plays in regard to company profitability.
July 14, 2023, ©. Leeham News: Developments in engines and airframe technologies require that the aircraft are flown differently to maximize the benefits.
We start by locking what changes in parasitic and induced drag mean for how airliners fly.
July 7, 2023, ©. Leeham News: We explore different technologies in the series that can make our next-generation airliners more efficient and, thus, less polluting.
We have discussed developments of engine and airframe technologies, such as Turbofans versus Open Rotors and different airframe configurations to minimize drag and, thus, energy consumption.
When utilizing these developments to increase efficiency we must fly the aircraft in a different way depending on the technology.
And how we fly the aircraft is not only influenced by the factors we have discussed. We must consider factors at the airplane level, at the airliner operational level, and finally, at the airline fleet level.
By Bryan Corliss
June 30, 2023, © Leeham News – Machinists Union members working for Spirit AeroSystems in Wichita, KS, will return to work on July 5, after ratifying a new four-year contract with the company.
Some 63% of Local 839 members voted in favor of the contract on Thursday, union officials said. Spirit’s first offer was rejected by 79% of union members voting.
“This membership vote by the majority of 63% is a move in the right direction for our local,” said Cornell Beard, the president of IAM District 70, the parent organization of Local 839. “Let’s work hard to set ourselves up for the big win in four years too.”
In a statement, Spirit leadership welcomed the yes vote, and said they would “closely coordinate” with suppliers and customers as the company restarts production.
Workers will start today preparing for the production restart after the Fourth of July holiday, the company said. The plant has been closed since June 22, the day after Local 839 members rejected the first offer.