Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Does an A220-500 need a new wing and engines? Part 2. May 8, 2025
- Embraer downplays tariff impact on 2025 results May 6, 2025
- JetZero readies effort for private equity fund raising May 5, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 20. May 2, 2025
- Supplier Howmet exceeds expectations despite tariffs May 1, 2025
Congressional delegation urges Boeing to take federal funding
April 7, 2020, (c) Leeham News: The Democratic members of the Washington State Congressional delegation urged Boeing CEO David Calhoun to take federal emergency 
funding to protect employee wages.
The Republican members did not sign the letter.
Calhoun previously said if an equity stake is required, Boeing would reject it and seek funding through other unspecified options.
The letter is below.
HOTR: American sees virtually no travel for up to 7 months
By the Leeham News staff
April 7, 2020, © Leeham News: “Nobody’s traveling in the next 30 or 60 days,” said Vasu Raja, American Airlines Group Inc.’s senior vice president for network strategy. “But nobody is really making any plans to go travel in the next 90 to 150 days, either.
So reported the Wall Street Journal Sunday.
That basically takes you through the end of the year.
Singapore will suspend its Changi Airport Terminal 2 for 18 months from May 1. (Associated Press.)
Pontifications: Assessing the impact of COVID-19: today’s take
By Scott Hamilton
April 6, 2020, © Leeham News: It’s going to be quite a while before there is a clear understanding how coronavirus will change commercial aviation.
LNA already touched on impacts to Airbus, Boeing and Embraer. None of it is good. For Boeing, burdened with the additional stress of the 737 MAX, is in the worst position. Even when the MAX is recertified, there won’t be many—or any—customers in a position to take delivery of the airplane.
Bearing in mind that what’s true today will change in a day, or even an hour, let’s take a rundown of where things seem to stand now.
Engine maker, lessor see Boeing’s next airplane as a single-aisle design
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Now open to all readers.
By Scott Hamilton
“The NMA is gone. Long live the NMA.”–lessor CEO. Photo: Leeham Co.
April 2, 2020, © Leeham News: Boeing’s New Midmarket Airplane, or a new concept, is the last thing on the plate right now.
But Boeing’s future product strategy nevertheless requires long-term thinking even as the short- to medium-term is in chaos.
Interviews were conducted March 2 at a major aerospace conference in Austin (TX), just days before the coronavirus crisis exploded exponentially across the globe.
The CEO of the major lessor, Avolon, declared the NMA dead and predicted a new single-aisle airplane will be Boeing’s next project.
An executive of Pratt & Whitney offered a similar view.
Summary
- “The NMA is gone. Long live the NMA. That moment has passed.
- Back to the 757 replacement concept and, now, A321XLR competitor.
- Single-aisle vs light twin-aisle is part of the challenge.
- New airplane must be “dramatically” more efficient than MAX, neo.
- 2030 decade is the quickest this dramatic improvement can be achieved.
Pontifications: Critical step in Boeing MAX recertification target: May
By Scott Hamilton
March 30, 2020, © Leeham News: Barring further issues, the FAA Type Inspection Authorization for the MAX is targeted for the second half of May, LNA learned.
This is a critical step in recertifying the airplane.
Also barring more unexpected events in a year filled with them, Boeing should resume production of the 737 MAX in May, LNA confirmed.
The meaning and consequences of frozen credit markets
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By Vincent Valery
Introduction
March 26, 2020, © Leeham News: Credit markets are effectively frozen for many businesses, Boeing said this week.
That’s why the company asked Congress for $60bn in federal aid for itself and the aerospace industry as part of the $2 trillion emergency stimulus package. Although the bill, which at this writing is awaiting Congressional approval, doesn’t name Boeing specifically, The Washington Post indicated $17bn is for Boeing.
Related article
- See this article discussing Boeing CEO David Calhoun’s comments on the company’s liquidity and ability to raise debt in the current environment. Calhoun pointed
out that credit markets aren’t open now. Boeing CFO Greg Smith made a similar comment later in the day - The current market stress has similarities but fundamentally different origins from 2008. LNA analyses its causes and consequences for airlines and OEMs.
Summary
- A different economic shock from 2008 freezes credit markets;
- Significant consequences for nonfinancial corporations;
- Airlines and OEMs at the forefront of turmoil;
- Programs to re-open credit markets;
- Long-term consequences.
HOTR: Boeing has options to federal bailout, CEO says
By the Leeham News Staff
March 25, 2020: First, Boeing CEO David Calhoun said he wasn’t an insider (after 10 years on the Board of Directors, and as lead director for many of them). No, he merely had a front row seat in the movie theatre.
Then he trashed his predecessor, Dennis Muilenburg, for stock buyback and dividend policies (that the Board approved).
Next, Boeing said it needs a portion of the $60bn in federal aid it requested for the aerospace industry.
Now, Calhoun appears to have put his foot in his mouth again. Or did he?
When asked about the possibility of the government taking an equity position in Boeing as a condition to a bailout, Calhoun said Boeing has options to federal money.
The Wall Street Journal wrote yesterday, “I don’t have a need for an equity stake,” Boeing CEO Calhoun said Tuesday on Fox Business Network. “If they forced it, we’d just look at all the other options, and we have got plenty.”
There’s a very practical reason for Boeing to object to government taking an equity stake. It would effectively shut down bidding on some key defense contracts.
But wait a minute: if you’ve got all these other options, why ask for a federal bailout for Boeing?
Or was this a message to the street that Boeing is OK?
Still, on CNBC’s Squawk Box, Calhoun said if the credit markets stayed closed for eight months, it would be tough for Boeing to remain healthy.
Boeing has $15bn in liquidity and can survive in short term; credit markets need to reopen
By Scott Hamilton
Boeing CEO David Calhoun. Source: CNBC.
March 24, 2020, © Leeham News: Boeing CEO David Calhoun said the company has $15bn in liquidity and can survive in the short term, but federal aid is needed as long as the credit markets aren’t open.
The US Defense Department is working to accelerate payments to Boeing, which has a large defense business. Revenue at Boeing Global Services is down as airlines across the globe shut down or sharply reduced operations.
Calhoun made his remark on CNBC’s Squawk Box today.
Boeing suspends production of wide-bodies
March 23, 2020, (c) Leeham News: Boeing today announced it will suspend production of its wide-bodies for 14 days, beginning Wednesday. 
Production slowdown begins today.
The move is in response to the COVID-19 crisis. Boeing is the last of the Big Three aircraft manufacturers to do so. Airbus last week suspended production in France and Germany, restarting slowly today. Embraer suspended production last week.
Airbus expands virus precautions across production lines, company
By Scott Hamilton
Guillaume Faury
March 23, 2022, (c) Leeham News: Airbus is working to make its production lines safe, but will have lower rates than before the coronavirus pandemic caused lockdowns in France and Spain, the CEO said today.
Airbus temporarily shut production lines in these two countries last Monday. Production resume at a low, unspecified rate. He said initially production “efficiency” may be very low.
Guillaume Faury, the CEO, however, pointed to China as perhaps an example to follow with its other lines.
The Tianjin line was shut down for several weeks as the COVID-19 virus spread across China. It recently resumed and is back near the pre-shut down level of 6/mo. Faury said 99% of the employees are back at work.
Chinese airlines are back to 30% of pre-grounding levels.
