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 20. May 2, 2025
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- Airbus 1Q2025 results: So far, so good, but US tariffs make future results unpredictable May 1, 2025
- Does an Airbus A220-500 need a new wing and engines? May 1, 2025
- Teamsters, Boeing have a new contract April 29, 2025
“I’m sure glad 2020 is in the rear view mirror.”–David Calhoun, Boeing CEO
By Scott Hamilton
David Calhoun, Boeing CEO. Source: CNBC.
Jan. 27, 2021, © Leeham News: “I’m sure glad 2020 is in the rear view mirror.”
This was Boeing CEO David Calhoun’s opening statement in his appearance today on CNBC’s Squawk Box.
Calhoun appeared on the financial news network following the release of its 2020 full year financial results.
“The one big charge was for the 777X program,” Calhoun said. Boeing took a forward pre-tax charge of $6.5bn for the program. Carter Copeland of Melius Research noted in a video this morning that this probably was related to an adjustment in the accounting block. Calhoun said on CNBC that Boeing adjusted the accounting block, which has not been publicly announced, as part of the charge.
“Based on everything we learned in the 737 MAX recertification effort, we put more time into the 777X effort. It’s going to be a little more costly and take more time to certify,” he said.
Calhoun expects the 777X will be a big money maker in the future.
Update 1: Big loss for 2020 for Boeing; $6.5bn charge for 777X-delivery now late 2023; 737 MAX cleared by EASA
Updated
- Europe’s aviation regulator EASA clears Boeing 737 MAX for return to service with minor, additional requirements. Information is here.
- $6.5bn charge for 777X program. First delivery now late 2023, nearly 4 years late.
By Scott Hamilton
Jan. 27, 2021, © Leeham News: Boeing today announced a $11.941bn net loss for the full year 2020, as expected.
Boeing reported an operating loss of $12.767bn. The company’s cash flow was a negative $18.41bn last year. It ended the year with $25.6bn in cash and securities.
The press release is here. The webcast is at 10:30 Eastern time and may be accessed here. Calhoun message to employees is here. The earnings presentation is here.
Boeing took a $6.5bn forward loss on the 777X program. First delivery is now late 2023, nearly four years later than initially planned. Source: Boeing
Podcast: 10 Minutes About the A321XLR and Why Boeing Can’t Compete
Jan. 26, 2021: © Leeham News: Today’s episode is 10 Minutes About the A321XLR and Why Boeing Can’t Compete. LNA’s Judson Rollins worked 
for Boeing when the MAX was created. He brings an airline background as well, having worked for Air New Zealand and Continental.
Boeing’s production plans
Subscription Required
By Vincent Valery
Introduction
Jan. 26, 2021, © Leeham News: LNA wrote earlier this month that Boeing needs a boring year after a challenging 2020. Ramping up 737 production, clearing up the accumulated 737 MAX and 787 inventories, and keeping 737-7/10 and 777X certification campaigns on track are among the OEM’s main goals for 2021.
Credit: Boeing
Like Airbus, Boeing had to significantly adjust its production plans downward for the foreseeable future as airlines pushed back scheduled deliveries. Boeing’s latest plans involve increasing the 737 line production rate to 31 per month by early 2022. The 787 production rate will go down to five per month (from a peak of 14) in the second quarter of 2021. The 747, 767, and 777 rates remain at 0.5, three, and two per month, respectively.
Ahead of Boeing’s earnings release on Jan. 27, LNA analyzes the updated delivery schedule for coming years on the five major commercial programs.
Summary
- Shallower rates on 747 and 767;
- Dreamliner delivery delays;
- Analyzing new 737 MAX order and inventory cleanup;
- Notable changes behind stable 777 production rate.
Small jet demand likely to stay depressed after COVID
Subscription Required
By Judson Rollins
Introduction
January 25, 2020, © Leeham News: As passenger travel trickles back to life, one trend that’s already apparent is a long-term diminution of airline yields in most regions.
This is largely driven by a reduction in business travel, some of which is likely to never return.
Regional jets and small single-aisles like the Airbus A220 and Embraer’s E2 family have higher unit cost, or cost per available seat-mile (CASM), than larger aircraft like the Boeing 737 or Airbus A320.
Achieving an operating profit with smaller jets requires high unit revenue, or revenue per available seat-mile (RASM). This will be difficult to achieve in a world where business travel is still down 70%-80% this year, even with a vaccine – and may be down 30% or more permanently.
What role will these smaller jets have after the pandemic? And will production match this new reality? A closer look is required.
Summary
- Regional jets and smaller single-aisles have higher unit costs.
- High costs require higher unit revenue to be profitable.
- Business travel likely slow to return, with some permanently impaired.
- Smaller jets previously used for routes now in danger of demand fragmentation.
The A350, Part 2: Analyzing the A350-800
Subscription Required
By Bjorn Fehrm
Introduction
January 21, 2020, © Leeham News: Before the holidays, we started a series to look into Airbus’ A350 family. We analyzed the development program and how the variants have sold.
Initially, the A350-800 won about 180 orders. But as the market received more information about the smaller variant, the more it realized it wasn’t an optimal airplane. It was never officially canceled. But orders was up-gauged to the A350-900. Airbus decided the variant wasn’t competitive and developed the A330neo instead. We now look into why.
Summary
- The A350-800 was positioned as Airbus’ main defense against Boeing’s new 787-9, the most efficient variant of the Dreamliner.
- As the A350 program was delayed, the A350-800 moved from an optimized variant to a “cut and shut” version. This compromised its efficiency.
- Gradually Airbus changed its strategy how to compete with the 787.
HOTR: Boeing could further cut 787 production rate—JP Morgan
By the Leeham News Staff
Jan. 20, 2021, © Leeham News: There is risk of another production rate cut for the 787, JP Morgan wrote in a Jan. 12 note.
Boeing already is reducing the rate to 5/mo this year. There are an estimated 60 787s in inventory due to production and quality control issues discovered last year that halted deliveries in November-December.
Boeing 787 family. Source: Boeing.
Podcast: 10 Minutes About China’s Commercial Aviation Industry
Jan. 19, 2021, © Leeham News: Today’s edition is 10 Minutes About China’s commercial aviation industry.
China has one airliner in service, a second in flight testing and a third on the drawing board. Production is still a challenge.
We discuss how viable the airliners are and a bit about production–all in 10 minutes.
HOTR: Some predictions for Airbus and Boeing
Jan. 14, 2021, © Leeham News: Making predictions is always a hazardous business.
Some predictions take years to resolve. The outcome of others come sooner than later. If you’re right, you look sage. If you’re wrong, you look like an idiot.
But HOTR is going to take a stab at it anyway.
Boeing’s Calhoun completes first year as CEO
By the Leeham News Team
Jan. 13, 2021, © Leeham News: Today marks the first anniversary of David Calhoun becoming CEO of The Boeing Co.
Calhoun’s first year faced challenges unprecedented in Boeing’s history. There was the 737 MAX crisis. Sales of the 777X were stagnant. The balance sheet was stressed.
And then COVID exploded, all but destroying commercial passenger demand and with it, ability by airlines to take delivery of new airplanes.
David Calhoun. Source: CNBC.
Boeing’s balance sheet went further upside down. Production and quality control problems with the 787 emerged.
Finally, Calhoun was afflicted with a case of foot-in-mouth disease. This contrasted with his calm, well-received initial public face during the waning days of then-CEO Dennis Muilenburg’s stilted public persona.