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 24. May 30, 2025
- Does an A220-500 need a new wing and engines? Part 3. May 29, 2025
- 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
Boeing 2024 Proxy Statement: Executive Compensation includes retirement gifts for Calhoun, Deal; housing support for Ortberg, Pope, and other stuff
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By Karl Sinclair
March 17, 2025, © Leeham News: Boeing’s top executives on average earn 81 times more money than the average company employee, the 2024 Proxy Statement reveals.
And in addition to the usual perks that top executives received, the exit packages for former corporate CEO David Calhoun and the CEO of Boeing Commercial Airplanes, Stan Deal, included unidentified retirement gifts. Deal, 61, received outplacement and unspecified transitional compensation.
Boeing filed its annual proxy statement with the Securities and Exchange Commission (SEC) on March 7, announcing the annual meeting of Boeing shareholders to be held via a virtual meeting on April 24.
In the SEC filing, Boeing detailed the compensation paid to executive officers during 2024.
(BCA: Boeing Commercial Aircraft, BDS: Boeing Defense, Space & Security, BGS: Boeing Global Services). Source: Boeing.
In 2024, more than $69m was spent compensating executives, with $55.4m paid in stock awards and options.
NASA hit by DOGE layoffs, office closures; Boeing’s X-66A R&D continues for now
By Scott Hamilton
March 11, 2025, © Leeham News: The National Aeronautics and Space Administration (NASA) is the latest federal government agency to come into Elon Musk’s sights for major cost cutting, and a union representing about 1,000 probationary employees is worried about the impact that massive layoffs on the agency might have on aerospace research and development.
Musk is a special representative of President Donald Trump. He heads the Department of Government Efficiency (DOGE), which has wreaked havoc throughout federal government departments, slashing jobs and programs. NASA (which contracts with Musk’s SpaceX and Boeing, a Musk competitor) announced that it is cutting the Office of Technology, Policy, and Strategy, the Office of the Chief Scientist, and the Diversity, Equity, Inclusion, and Accessibility branch in the Office of Diversity and Equal Opportunity.
NASA provides funding and research support to Boeing and other aerospace companies in the commercial aviation, defense, and space sectors. Airbus, Boeing’s prime competitor, has also benefited from NASA research.
Currently, Boeing’s highest-profile projects with NASA are its SLS space booster, the Starliner crew capsule, and the X-66A Transonic Trussed Brace Wing (TTBW) research project for a new commercial airliner.
The SLS and Starliner projects are years behind schedule, billions of dollars over budget and fraught with technical problems. SpaceX competes with both space projects. Boeing previously warned that about 400 employees associated with the SLS could lose their jobs if NASA cancels this program.
Boeing is proceeding with the X-66A research, the company says. Whether NASA continues its funding remains to be seen.
Boeing faces three labor contracts expiring this year
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By Scott Hamilton
March 10, 2025, © Leeham News: Boeing endured a costly 53-day strike last fall by its largest and most powerful union, the IAM 751. The November settlement provided a 43% wage hike, added benefits to its 401(k) retirement program for employees, cash bonuses, and a commitment to assemble the next new airplane in the greater Seattle area.
The strike cost Boeing around $10bn in lost revenue and other costs. Boeing nearly exhausted its entire cash reserve, which had been depleted after years of crises. Only by raising $25bn in the equity and debt markets did Boeing avoid draining its bank accounts.
However, settling the strike doesn’t mean its labor issues are over. Three more contracts expire this year, including one with a different IAM district.
The next contract expiring this year is with a Teamsters local in Puget Sound (Seattle). It expires next month.
Here is the lineup of expiring contracts:
- April 2025: Boeing drivers (Teamsters Local 174) in Puget Sound. They haul wing components from Auburn and Frederickson north to Renton and Everett. A strike there would seriously impact Boeing production.
- July 2025: IAM 837 assembly workers in St. Louis. (Building T-7s, F-15s and F-18s.)
- October 2025: Boeing welders in Puget Sound. Small group — a few hundred — represented by the International Union of Operating Engineers Local 302. There’s a pretty serious shortage of welders both nationwide and regionally, so they have more leverage than their numbers would indicate. Needed more for plant operations than for production.
- January 2026: SPEEA Wichita Technical and Professional Unit. About 1,600 people are now working for Spirit.
- October 2026: SPEEA Northwest Professional Unit and Technical Unit. Two separate but connected bargaining agreements currently cover slightly more than 17,000 workers in Washington, Oregon, California and Utah.
Boeing and Airbus: A financial comparison
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By Karl Sinclair
March 3, 2025, © Leeham News: “It was the best of times, it was the worst of times,” famously wrote Charles Dickens in the opening of A Tale of Two Cities.
Boeing 737 MAX. Credit: Boeing.
Indeed, the financial results may indicate that neither Airbus (AB) nor Boeing (BA) are going through the best of times. However, one corporation clearly weathered 2024 better than the other.
While Airbus (with Helicopters, and Defense and Space) and Boeing (with Defense and Space, and Global Services) have other business segments, make no mistake: these are the undercards that make up the heavyweight title fight.
Airbus and Boeing will both go as their respective commercial aircraft divisions do.
Airbus A320neo. Credit: Airbus.
Both OEMs have released 20-year commercial aircraft market projections, forecasting that more than 40,000 new aircraft are needed, worth trillions of euros and dollars. This is the huge prize Airbus and Boeing are grappling with.
Summary
- About 10 years for Boeing’s financial recovery.
- Boeing could deliver its entire backlog, and its debt will still be greater than pre-crisis levels.
- A400M continues to be a drag on Airbus financials.
- Spirit AeroSystems will add to Boeing’s debt.
Ortberg, SPEEA meet; union surveys members for contract negotiations, strike
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By Scott Hamilton
Boeing CEO Kelly Ortberg (left) and SPEEA president John Dimas. Credit: SPEEA.
Feb. 27, 2025, © Leeham News: Boeing CEO Kelly Ortberg met with the company’s engineers and technicians union, SPEEA, on Feb. 7. The meeting was the first since Ortberg was named CEO and took office on Aug. 8.
Neither SPEEA nor Boeing commented on the substance of the meeting. “We discussed matters of mutual concern and agreed to continue the dialogue going forward,” SPEEA President John Dimas said in a benign statement published on SPEEA’s website. Boeing declined comment.
SPEEA’s labor contract with Boeing expires next year. Negotiations won’t begin until next spring. A contract with Spirit AeroSystems’ technical workers represented by SPEEA expires on January 31. Boeing should complete its acquisition of Spirit by summer, so negotiations for that contract will be between SPEEA and Boeing.
Some SPEEA officials, noting Ortberg’s early statements about doing a “reset” with labor relations, complained that he hadn’t met with SPEEA.
But upon his arrival in August, Ortberg had his hands full. Contract negotiations were already underway with Boeing’s largest labor union, the IAM 751, whose contract expired 34 days after his arrival. The union walked out on September 13 for 53 days. Ortberg also had to deal with the long-running safety and quality control issues, the Federal Aviation Administration, and the fact that Boeing was running out of cash.
While it’s early yet, and the meeting between SPEEA and Ortberg only occurred on Feb. 7, on Feb 19, SPEEA published a survey for its members to identify issues and wants for next year’s contract negotiations. The responses must be returned by March 21. SPEEA will keep the results confined to the union’s leadership.
Among the questions is how long members would be prepared to stay out on strike. SPEEA is not prone to walkouts, as is the much more militant IAM.
GE sees 2,500 LEAP engine deliveries by 2028, enough for more than 1,000 A320neos and 737 MAXes
Larry Culp, CEO of GE Aerospace. Credit: GE Aerospace.
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By Scott Hamilton
Feb. 24, 2025, © Leeham News: CFM International plans to deliver 2,500 LEAP engines by 2028, enough to power more than 1,000 Airbus A320neos and Boeing 737 MAXes plus spare engines in a single year.
CFM is the 50-50 joint venture between GE Aerospace and Safran. The 737 exclusively uses the LEAP. The A320neo family splits its powerplant business between CFM and Pratt & Whitney’s Geared Turbo Fan engines. Between the MAX and a portion of the A320neo engines, CFM has a solid majority of the market share for the mainline single-aisle aircraft sector.
CFM is the brand for the CFM56 and LEAP, but GE and Safran benefit from the aftermarket business. Between the two engines, the maintenance, repair, and overhaul business is big and profitable.
Larry Culp, CEO of GE Aerospace, spoke at the Barclays investors conference on Feb. 20.
“There’s no question that from an aftermarket perspective, LEAP on top of CFM56 is going to keep us very busy,” Culp said. “We haven’t been particularly good at calling the outlook here because we’ve undershot the reality with the CFM56 the last couple of years.”
Culp said that GE continues to believe that it’s got several years of growth ahead. “We probably don’t see an apex until probably the 2027, 28-ish time period, and then we’ll see a gradual fade with the CFM56.
“I think we’re still talking about 2,000 shop visits at the end of the decade. We’ll see if we’re right or wrong on that, but that’s our current view. I think our partners at Safran have in effect echoed that recently at their own earnings call.”
Ortberg reaffirms goal of Boeing 777X certification at first appearance at bank’s investors’ conference
By Scott Hamilton
Kelly Ortberg, Boeing CEO. Credit: Boeing.
Feb. 20, 2025, © Leeham News: Boeing hopes to certify its largest aircraft, the 777-9, late this year or early next year so that it can finally begin delivery of the 425-seat aircraft.
Delivery was originally supposed to be in December 2019 or the following quarter. However, technical delays, including those with the giant 115,000 lb thrust engines from GE Aerospace and the negative halo effect from the 737 MAX crisis, resulted in this unusually long delay.
Kelly Ortberg, Boeing’s CEO, reaffirmed the certification and delivery hopes during his first appearance since taking his job last August at an investment bank’s investor conference.
“We’re going through the flight test program, and we’re planning to get the certification done towards the end of this year or early next year so we can start the delivery,” Ortberg told the Barclays Bank event today. “The challenge is we’ve got to get through the certification here on the Dash 9 to start delivering these things to our customers.
“I was just with Carsten Spohr, the CEO of Lufthansa. He impressed upon me how critical that airplane is to his operating model,” Ortberg said.
The program is in a reach forward loss, so Ortberg said that any additional schedule delay with the program will likely result in another loss. Over the life of the program, he says it’ll be a profitable airplane.
Tier 1 suppliers are a “failed market”
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By Scott Hamilton
Feb. 20, 2025, © Leeham News: The Tier 1 supply chain is all but dead.
Kevin Michaels.
This rather startling conclusion belongs to Kevin Michaels, the managing director of the consulting firm Aerodynamic Advisory. When he explains his thinking, it supports a major shift in the aerospace industry.
He made his remarks at the Pacific Northwest Aerospace Alliance conference this month in the Seattle area.
Tier 1 supplies are the last step in the supply chain, delivering products directly to the Original Equipment Manufacturers (OEMs), such as Airbus, Boeing, Embraer, and the engine makers.
Michaels said the supply chain is “fragile” and “red hot.” “Overall, the supply chain is in better shape than it was last year at this time. It’s in better shape now than it was two years ago. But it’s still incredibly fragile.” OEMs purchase about 75% of the value of the aircraft from the supply chain. Aerostructures are the first tier. And this is where Michaels’ rubber hits the road.
Another One Bites the Dust; alternative energy gives way to realities
Grounded: Eviation’s Alice, a concept that had more questions than answers. Credit: Eviation.
By Scott Hamilton
Feb. 18, 2025, © Leeham News: Universal Hydrogen. Lilium. Volocopter. Tecnam’s electric airplane. Airbus electric. Airbus hydrogen. ATR hybrid.
Eviation was just the latest alternative energy project to bite the dust.
And these are just the ones we’ve heard about.
Boeing declined comment on the status of its WISK autonomous electric air taxi. Its future may have as much to do with the company’s current financial condition and efforts to recover from a series of crises since the March 2019 grounding of the 737 MAX than with technology or business model concerns.
The alternative energy aviation industry, the soup du jour in recent years, is running out of gas, so-to-speak. LNA’s aerospace engineer, Bjorn Fehrm, predicted years ago that battery-, and hybrid-powered airplanes were concepts that wouldn’t fly and that hydrogen’s availability at airports is tough nut to crack.
The International Air Transport Association in October 2021 adopted a goal for the airline industry to achieve net zero carbon emissions by 2050. Aggressive milestones also were adopted. Included were ambitious goals to significantly increase the use of Sustainable Aviation Fuel (SAF), the path favored by Boeing.
Tim Clark, the president of Emirates Airline, said then, Don’t make promises you can’t keep.
The industry, it now increasingly admits, can’t keep these promises.
Howmet tariffs to be paid by customers: CEO
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By Karl Sinclair
Feb. 17, 2025, © Leeham News: Howmet Aerospace (HWM), a supplier to Airbus, Boeing, and other aerospace companies, last week reported sharply improved earnings for 2024.
Howmet is a Pittsburgh (PA)-based aerospace manufacturer, generally classified as a Tier 2 supplier. It produces components for engines, aluminum and titanium structures, fasteners, and other aircraft components.
On the Feb 13, annual earnings call, Howmet Executive Chairman and CEO John Plant remarked that he expects that Howmet will be well positioned to deal with the effects of the tariffs instituted by President Donald Trump, due to the strong contracts it has. Any costs incurred in those respects will be passed onto its customers.
Howmet is segmented into four divisions: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels.