Leeham News and Analysis
There's more to real news than a news release.
Boeing to add 4th 737 FAL at underutilized Everett plant
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By Scott Hamilton
Jan. 30, 2023, © Leeham News: Boeing will establish a fourth final assembly line (FAL) for the 737 in the vast Everett (WA) assembly plant in 2024. The company announced the move internally today.
Boeing Everett plant, where all widebody aircraft are assembled. Boeing will add a narrowbody 737 line. Credit: Everett Herald
The move was one of many rumored for months. Consolidating the 787 FALs in Charleston (SC), a move announced in the early days of the COVID pandemic, and shutting down 747 production, announced two years ago, the future of the big, empty spaces at Everett was a question. When Boeing was studying whether to launch a New Midmarket Airplane (NMA), Everett was on the list for an FAL (as were other places). But when CEO David Calhoun killed this program, more questions arose.
Rework on the 787 temporarily filled the 787 bay and now, part of the 747 space. But this was hardly enough.
LNA has obtained production rate studies Boeing shared with suppliers for the future. Conceivably, the aggressive numbers could be accommodated at the 737 plants in Renton (WA), but there is more to consider than raw production numbers.
Summary
- Boeing has a lot of skilled workers in Everett who are losing their assignments when the 787 rework is completed (target: year-end 2024) and with the cessation of 747 production. These skilled workers need replacement work.
- Boeing needs to keep up with the Joneses (aka Airbus). Boeing is studying very high 737 production rates.
- There is no new airplane program for Everett and a lot of empty space.
- Everett’s overhead absorption rate is now covered by just the 767 and 777 at very low rates and rework.
Repost: Exclusive Interview with Joe Sutter’s grandson as Last Boeing 747 leaves Everett factory
Update, Jan. 30, 2023: The last Boeing 747 will be delivered to Atlas Air tomorrow. Below is the story LNA posted on Dec. 6, 2022, when the airplane was ready to roll out of the Everett factory. In it, we exclusively interviewed the grandson of Joe Sutter, the lead engineer of the 747 design.
Cargo carrier Atlas Air is taking the final 747-8Fs, the last of a legendary line of Boeing jumbo jets./Atlas Air photo
By Bryan Corliss
Dec. 6, 2022, © Leeham News: The final Boeing 747, line No. 1,574, rolls out of Boeing’s Everett factory tonight. The plane was built for Atlas Air, which is scheduled to take delivery in early 2023 – almost 52 years after the first 747 entered service with Pan Am in January 1970.
“It’s kind of a sad occasion,” said Jon Sutter, the grandson of legendary Boeing aircraft designer Joe Sutter, the father of the 747.
Jon Sutter – who now works at Boeing in the same Boeing Field building where his grandfather designed the Queen of the Skies – hadn’t been born when the first 747 flew.
And his grandfather, who passed away in 2016, didn’t live to see the end of the program he’s most closely associated with.
However, even with the end of the 747 program, Joe Sutter’s legacy lives on, his grandson said.
“His baby, Boeing, is still going,” Jon Sutter said in a recent interview with LNA. “You can see his influence in every other plane out there.”
SUMMARY:
- First-flight pilots called it a “two-finger” airplane
- 747 was Plan B after SST was canceled
- Last 747s sport special decal honoring Sutter
- 747 survived the Boeing Bust
- 747-8 was final iteration
- ‘Hard to imagine the world without it’
Read more
Update 2: Boeing pauses remarketing China’s airplanes, outlines prerequisite for a new airplane program. Update 1: Calhoun feels good despite earnings miss; Boeing reports 4Q, full year loss but financial progress continues
Jan. 25, 2023, © Leeham News: The Boeing Co. recorded a net loss in 4Q022 and for the full year while reporting positive cash flow. There were no one-time charges, the first time in many 
quarters—a key metric some Wall Street analysts were watching for. Long-term debt declined by 10% as current debt increased. Negative stock equity increased. Cash and marketable securities increased slightly.
- Cash increased to $14.6bn from $8bn year over year. Marketable securities decreased to $2.6bn from $8.2bn.
- Advances and progress billings (deposits and progress payments) were essentially flat: $53.1bn vs $52.98bn.
- Short-term debt (that is due within 12 months) increased to $5.2bn from $1.3bn.
- Long-term debt declined from %51.8bn from $56.8bn.
- The shareholders’ deficit increased to $15.88bn from $15bn.
- Free cash flow was $3.1bn for the quarter and $2.3bn for the year.
- Revenues for the quarter were $19.98bn vs $14.79bn and $66.6bn vs $62.286bn for the year.
- Operating loss was $353m vs a loss of $4.2bn for the quarter and $3.5bn vs $2.9bn for the year.
- Net loss was $663m vs a loss of $4.16bn for the quarter and $5bn vs $4.3bn for the year.
The full press release is here.
CEO Dave Calhoun said challenges remain to achieve production stability and within the supply chain.
Pontifications: Do you really want the Jetsons zipping around?
By Scott Hamilton
Jan. 24, 2023, © Leeham News: “For those of you old enough to remember, this is the Jetsons. This is the dream. This is what everybody would love to do.”
This cartoon is what former Boeing CEO Phil Condit used to segway into the hot topic of Urban Air Mobility vehicles (UAM). A cartoon is an apt illustration of UAMs.
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You walk out your front door, climb into the vehicle, and off you go. “All of a sudden, it looks like you can do that,” Condit said. Condit made his remarks on Jan. 9 at the University of Washington aerospace class.
Today’s Urban Air Mobility concepts hark back to the 1960s cartoon series, The Jetsons.
There is a concept called Air One, a battery-powered two-place UAM that has folding wings and a folding structure for the rotors. It fits in the garage. It uses a landing pad in front of the house. “This is a step to the Jetsons. What’s the problem?” Condit posited. “Well, there are a number of them.”
The advertisement shows Air One has 771 horsepower and a 96nm range. Reserves aren’t mentioned. A competing concept called Icon A5 shows 100hp, a range of 427nm, and a 45-minute reserve. This has wings to carry the lift. “Taking off vertically is not cheap. Wings are way more efficient than vertical lift.”
Condit pointed out that Air One suggests you could fly to a favorite fishing spot. But, Condit said, “unless your fishing spot has a charging port, I’ve got two vertical take-offs and two vertical landings. I have a net effective range of 30 miles. So, your fishing spot has to be within 30 miles.”
A deep dive into the single-aisle market
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By Vincent Valery
Introduction
Jan. 23, 2023, © Leeham News: Boeing’s share of outstanding single-aisle orders has fallen significantly behind Airbus. If we include the order book for single-aisle aircraft seating 100 or more passengers of Airbus, Boeing, COMAC, Embraer, and UAC, the American OEM’s market share is now 37% (Airbus has 58%, COMAC 3%, Embraer 2%, and UAC 2%).
Richard Aboulafia sees a risk that Boeing’s market share in the single-aisle market will dip below 30% without the entry into service of a new aircraft before 2035. Boeing Commercial Airplanes CEO Stan Deal said that it is viable for the American OEM’s single-aisle market share to stay around 40%.
A321neo Credit: Airbus
In the 2022 Boeing outlook, LNA also noted that there are significantly more A320ceo than 737 NG operators. A broader operator base means more opportunities to place new orders with a more diversified group of airlines. In the context of no new single-aisle family entering service in the next 10 years, convincing operators to “flip” to the competition will be the primary way to increase market share.
Exclusively looking at the nominal order books and A320ceo and 737 NG operators does not provide a comprehensive view of Airbus’ and Boeing’s relative positions in the single-aisle market, though.
In their 2022-2041 commercial market outlooks (CMO), Airbus and Boeing indicated that nearly half of all single-aisle deliveries would replace older-generation aircraft. Looking at the existing in-service fleet of older-generation aircraft provides a better picture of replacement order opportunities by the OEM.
LNA investigates in this article the existing order books of the five major OEMs and operator bases to better assess their relative competitive positions and quantify the current replacement order opportunities.
Summary
- A comprehensive single-aisle fleet snapshot;
- Breaking down the order books between replacements and growth;
- Keep track of order choices for older-generation operators;
- Remaining replacement order opportunities;
- A word about single-aisle freighters.
HOTR: Boeing ponders 777-300ER P2F program, again
By the Leeham News team
Jan. 19, 2023, © Leeham News: Already well behind the 8 ball in delivering 787s, Boeing quietly advised some customers recently that they may see yet another delay—this one up to 15 months. Some customers expecting 787s in 2024 now expect them in 2025.
These additional delays are causing some airlines to retain Boeing 777 Classics longer than planned. Others want to re-lease 777s returned or sold to lessors on the expectation of 787s deliveries.
Retaining 777 Classics has implications for the cargo market. There are three conversion companies: IAI Bedek, the launch P2F firm; Mammoth Freighters; and Kansas Modification Center (KMC). These companies rely on feedstock from the airlines and lessors for their conversions. Retaining 777s may cause a dip in the feedstock.
Pontifications: “What can be. What should be.”
By Scott Hamilton
Jan. 17, 2023, © Leeham News: “What can be. What should be.”
This was the title of an address last week at the University of Washington’s aerospace department. The speaker: the former CEO of The Boeing Co., Phil Condit.
Condit was named president of Boeing in 1992 and CEO in 1996. He retired in 2004 after a lifetime career at Boeing, with leadership roles in the 747, 757, 757, 767, and 777 programs.
With ecoAviation the soup de jour these days, beneficiaries of billions of dollars of investment (much of it stupid money) and the subject of much greenwashing, Condit had frank and candid observations about these concepts.
Although Condit retired from Boeing in the wake of the USAF tanker procurement scandal dating to 2001, his engineering skills and fundamental visions were highly regarded. He put these skills to good use a week ago.
HOTR: Air India faces a host of problems as owners negotiate massive jet deal
By Bryan Corliss
Jan. 11, 2023, © Leeham News:
Air India – now owned by the Indian industrial giant Tata Sons – is reportedly close to placing what may end up being the largest commercial aircraft order in the industry’s history.
Air India image of a Boeing 787 in the airline’s livery.
The market is a key one for Boeing, especially right now, after it has been locked out of China because of geopolitical tensions. Air India, in particular, is said to be negotiating with Boeing to take up to 50 737s originally built for Chinese airlines, as part of a massive order that could total 500 planes.
As LNA reported back in September, Boeing has about 140 737 MAXes ordered by Chinese airlines or leasing companies ordering on their behalf. That’s about 50% of the total number of built but undelivered MAXes Boeing had in storage going into last year’s fourth quarter.
It’s fortunate for Air India and Boeing both that the airline has a need for a lot of new aircraft at a time when Boeing needs to move a lot of planes, but adding new aircraft is just one of many major challenges Air India’s new owners face right now.
SUMMARY:
- 2023 in India: Two airlines dominate
- Air India may snap up Chinese whitetails
- Tata has a lot of work to do
Airbus and Boeing 2022 orders and deliveries
By Bjorn Fehrm
January 10, 2023, © Leeham News: Airbus and Boeing released their 2022 delivery and order data today. With a delivery of 661 airliners, Airbus is a 38% larger supplier than Boeing at 480 aircraft.
Airbus had a target of 700 deliveries but came short due to supplier constraints in a year of COVID recovery, raising energy prices due to the war in Ukraine and labor shortages. Boeing is not out of a tunnel caused by 737 Max crashes and 787 quality problems.
On the order side, Airbus booked 820 net orders versus Boeing’s 774. The Airbus backlog is 33% larger at 7,239 aircraft versus Boeing’s 5,430 jets.
Boeing needs “real honest-to-God product development:” ex-CEO
By Scott Hamilton
Ex-Boeing CEO Phil Condit. Credit: Leeham News.
Jan. 10, 2023, © Leeham News: An ex-chief executive officer of The Boeing Co. said Jan. 9 that the company needs to undertake “real honest-to-God” product development, or it will lose the skills required to do so.
Phil Condit, the CEO was named president of Boeing in 1992 and CEO in 1996. He retired in 2004 after a lifetime career at Boeing, with leadership roles in the 747, 757, 757, 767, and 777 programs. Speaking at the University of Washington aerospace school, Condit was asked about Boeing’s product development.
“I’ve got to be really careful,” Condit replied, choosing his words carefully. “I’ve been retired for almost two decades. I think there are some things that I have heard and observed that I agree with, like SAF as a place to go, is one of those. I think it’s important for Boeing to do some real honest-to-God important development because over time you lose skill. If you don’t do things, you lose your capability to do them. It’s important that skills get exercised.”
SAF is Sustainable Aviation Fuel. Boeing currently is placing its major bets in ecoAviation on SAF rather than hydrogen or battery-powered aircraft, although research and development of the latter two areas continue. Current CEO David Calhoun previously announced Boeing’s commercial airliners will be 100% SAF-capable by 2030. Airbus will, too, but it’s pursuing hydrogen as a major solution to some of aviation’s need to go “green.”