Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
- Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale April 23, 2025
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
Al Jazeera dumps “Inside Story” look at 787 documentary
Update, Sept. 15, 12:20pm PDT: We got an email from Al Jazeera America Inside Story saying that Al Jazeera English Inside Story is the one that extended the invitation to appear, not Al Jazeera America Inside Story. If you all are confused, so was I. Apologies to AJA Inside Story.
Al Jazeera America English canceled its planned panel discussion of the documentary by sibling Al Jazeera English of the Boeing 787, aired last week to withering criticism by reviewers, including this column.
AJA’s AJE’s half hour discussion program, Inside Story, was to take a free-wheeling look at the documentary. I was invited, and accepted, a slot on the panel. Even after I pointed out my scathing review, AJA AJE assured me that I was still welcome.
The program was to air Sunday or Monday this week. I received notice in a 3am email Sunday (PDT) that the program had been canceled, although no reason why was given and none was provided when I asked.
I don’t know what the real intent of the program was, though I can guess. AJA AJE was trying to get the IAM and SPEEA unions as the other panel participants, so to me it smelled of validation of the documentary rather than an independent discussion. I have no way of knowing whether the unions accepted or declined and the program was canceled for lack of participants or whether it was canceled for other reasons.
Update, Sept. 15, 8:00 am PDT: AJA AJE says the news director concluded there had been enough coverage of the Boeing story and decided to move on.
However, I had my talking points ready. Here’s what I would have said had the program proceeded:
Ryanair becomes launch customer for 737 MAX 200
This has some additional information from our e-newsletter of Sept. 8. Additionally, Airbus has offered some observations about the 737 MAX 200 (as Boeing often does about Airbus products). We’ve initially confined this critique to our e-newsletter; this will be posted on this website next Monday.
Boeing Sept. 8 announced its launch customer for the 737 MAX 200, the 200-seat version of the 737-8: Ireland’s Ultra Low Cost Carrier, Ryanair.
Boeing announced the program at the Farnborough Air Show and it was only a matter of time before Ryanair, which had yet to order the 737-8, became a customer. The carrier’s CEO, Michael O’Leary, had been agitating for a 199-seat version of the 737-800/8 for more than a year. (At 200 seats, another flight attendant is required.)
The 737 MAX 200 is Boeing’s response to Airbus’ move to reconfigure the A320neo to seat 189 passengers, matching the standard layout of the 737-8. The A320neo-189 is at 28 inch seat pitch, and so is the MAX 200.
Odds and Ends: KC-46A update; A440M in the US; A320neo first flight; Southwest no longer an LCC
KC-46A update: Aviation Week has an update on the status of the Boeing KC-46A tanker. Among other things, first fight has now been moved from June to November at the earliest.
A400M in the US: Airbus thinks it’s possible to sell hundreds of its A400M to the US Armed Forces to replace the Lockheed Martin C-130 and Boeing C-17, according to this article by Reuters.
A320neo first flight: Is the Airbus A320neo first flight going to run behind schedule? Airbus won’t say but Reuters suggests that it might. So does Aviation Week, like Reuters, pointing to an issue with the engine.
Southwest no longer an LCC: Bloomberg writes that Southwest Airlines is no longer a low cost carrier, with Cost per Available Seat Mile now approaching the legacy carriers. Years ago we characterized Southwest as the first legacy LCC, as costs increased, low fares began to disappear (it’s often easier to find a low fare on a competitor today) and routes took it into big city airports previously eschewed.
Odds and Ends: Safran benefits from engine after-market; ExIm could back Airbus; Paine Field future
Engine After-market: Safran, which owns 50% of CFM International with GE Aviation owning the other half, is positioned in the “sweet spot” of the engine after-market, according to a recent report by Bernstein Research.
The report further supports our own analysis posted August 25 and the growing importance of MRO support in winning engine orders.
According to Bernstein, Safran “has the best positioning in the aircraft engine after-market” in the investment bank’s coverage. This position is “driven by two engine families with strong growth ahead and low exposure to older engines that are at risk of early retirement.”
Bernstein notes that more than 95% of Safran’s after-market sales are derived from the CFM56, which powers 75% of the narrow-bodied aircraft, and the GE90, which powers the Boeing 777-200LR/LRF and 777-300ER.
Future programs include the CFM LEAP, GEnx and GP7200. Past programs, in decline, are the first generation CFM56 and the CF6 on earlier wide-bodies.
ExIm and Airbus: In a statement surely to inflame those opposed to renew ExIm Bank authority, the president of the bank said it’s possible it could back funding of the Airbus A320 family built in Mobile (AL).
Paine Field future: It’s a little parochial but The Everett Herald has an article looking at the future of Paine Field, where Boeing’s wide-body airplanes are assembled. The article necessarily looks at the future of the Boeing 747, 767 and 777 Classic production.
Congress is now talking about a nine month extension of ExIm.
Al Jazeera slams 787; Boeing punches back; our scathing review
Special note: In a departure from our usual practice and instead I am signing this column. In the interests of full disclosure, I have occasionally appeared as a “talking head” on Al Jazeera America (AJM) with respect to breaking aviation news and on panel discussions over national airline policy. I had no involvement in the 787 special. I was skeptical of what I saw on the preview, which didn’t show anything of substance that was new but because of the attention already drawn to the program, I wanted to wait until seeing it myself before commenting. Al Jazeera America English has invited me to be on a panel to air Sunday or Monday to discuss this investigation; I have accepted. It remains to be seen after this review if AJM AJE still wants me.
–Scott Hamilton
Boeing and Al Jazeera news are trading punches over an hour-long program by the latter that Boeing says was positioned as a documentary under false pretenses and using tabloid tactics.
The controversial all-news station, which evolved when Al Jazeera bought Current TV from from vice president Al Gore (who is now suing for partial non-payment), focused on Boeing’s 787 South Carolina plant.
Boeing’s counter-offensive began Monday in advance of Wednesday’s broadcast. The Charleston Post and Courier neatly encapsulates the Boeing response to the show. Boeing’s full response is at the end of the post.
A Boeing communications official spoke with me at Tuesday’s Ryanair delivery event, repeating much of what is recounted in the Post and Courier article, with particular emphasis on:
O’Leary clowns around with acceptance of 349th 737-800
In an industry where dull MBAs now dominate and the likes of Herb Kelleher have long since retired, Michael O’Leary is a breath of fresh air.
O’Leary, CEO of Ryanair, was in Seattle Tuesday for the delivery of the carrier’s 349th Boeing 737-800 and the first one of a massive 737NG order announced last year at the Paris Air Show.
O’Leary, wearing a set of 737 MAX winglets made out of 3D printing by Boeing engineers, nearly pranced around a crowd of Boeing employees before accepting delivery of the aircraft.
Ryanair CEO Michael O’Leary clowns around with Boeing employees at the delivery of the carrier’s 349th 737-800, 9/9/14. Photo by Scott Hamilton
Repeating much of what he said Monday upon announcing an order for up to 200 737 MAX 200s, O’Leary said he had been hounding Boeing for 15 years (on Monday it was 10) to add more seats to the 737-800.
Final A330neo analysis; cabin improvements gives the A330neo gains over today’s A330
When we did our analysis of the A330neo after the Farnborough launch we limited our checks to trip fuel efficiency as we did not have enough clarity of the cabin improvements that Airbus announced. After a meeting in Toulouse last week with Airbus cabin experts we know have the missing information.
Airbus gives the A330 cabin an interesting update for the A330neo. It comprises A330 ideas (improved crew rests), A350 ideas (improved lighting and IFE) and finally ideas tried out on the A320 (SpaceFlex and SmartLav lavatories). Combined they give the A330neo cabin a better passenger experience and improved utilization of cabin space. Read more
Odds and Ends: Boeing leads net orders YTD; A320neo; ExIm Bank; Frontier Air
Airbus vs Boeing orders: Airbus reported its order tally through August and while it surpassed 1,000 gross orders, it’s net orders trail Boeing significantly. This article sums things up nicely, though it doesn’t include Boeing’s last four days of August. Boeing reports weekly and the latest report is due out today. Through August 26, Boeing trails Airbus slightly in gross orders but leads in net orders.
Update: Boeing just posted its weekly order tally: 1,004 gross orders (to Airbus’ 1,001) and 941 net orders, still well ahead of Airbus’ net orders.
A320neo first flight: Airbus will launch the first flight of the A320neo this month for the airborne test program. This is powered by the Pratt & Whitney GTF; the CFM LEAP A320neo is supposed to follow by about six months. Entry-into-service for the GTF neo is planned for October 2015.
ExIm Bank: Members of Congress are looking at a short-term extension of the ExIm Bank‘s authority (read: until after the November election).
Frontier Airlines: This carrier is rapidly converting to an Ultra Low Cost Carrier business model, a process begun several years ago and accelerated last year. Aviation Week has an article that takes a look.
Go Seahawks: The NFL season opens tonight with the 2014 Superbowl champs Seattle Seahawks hosting the Green Bay Packers. Go Hawks!
Buckingham lowers Boeing to Underperform (sell), others increasingly bearish
Update: 24/7 Wall Street just published this gloomy outlook about Boeing.
Buckingham Research Group today lowered its call on The Boeing Co. from Neutral to Underperform, the equivalent of Hold to Sell. As far as we can tell, this is the first research analyst to put a sell on Boeing in recent years.
According to Thompson/First Call, 10 analysts rate Boeing as a Strong Buy, nine as a Buy and seven as a Hold. None rated Boeing as an Underperform or a Sell (Thompson separates the two ratings; Buckingham’s Underperform is a Sell). According to Thompson/First Call tallies on Yahoo Finance, there hasn’t been a downgrade to sell since 2008, when the 787 program problems were ramping up.
Buckingham has become increasingly pessimistic in recent months about Boeing, so the new rating isn’t necessarily a surprise, and Buckingham isn’t alone. Bank of America Merrill Lynch recently downgraded Boeing to Neutral and in June RBC Capital Markets downgraded Boeing to Sector Perform from Outperform. Wells Fargo and Credit Suisse analysts have been raising concerns in recent notes but haven’t downgraded Boeing, and UBS has been bearish for some time.
Buckingham cited anticipated worsening free cash flow as its principal reason for the downgrade, driven by BRG’s forecast of lower 777 production rates and higher than Boeing’s forecasted $25bn in deferred production costs for the 787. BRG also cited about 1,500 737s not yet added to the accounting block it believes have been sold at steeper discounts than historically.