Boeing MAX crisis dominated 2019 Top stories

By Scott Hamilton

Dec. 30, 2019, © Leeham News: Boeing and the 737 MAX dominated the Top 10 Stories on Leeham News in 2019.

This should surprise no one.

The year-end late-breaking news that Boeing CEO Dennis Muilenburg had been fired by the Board of Directors should be in the Top 10 Stories of 2019.

But coming as it did on Dec. 23, the start of Christmas week, it failed to make it into LNA’s Top 10 list.

Readership, obviously, falls off dramatically over the Christmas holidays. The fall-off continues between Christmas and New Year’s evidenced by LNA’s own decision to take a holiday (except for breaking news).

The Ethiopian Airlines crash on March 10 grabbed three of the Top 10 stories and shared, with Lion Air 610 (the Oct. 29, 2018, crash) a fourth story.

Boeing photo.

Boeing’s pickle with the 737 NG pickle fork cracking was of the Top 10 stories.

An historical review that Boeing didn’t want to re-engine the 737, preferring instead a new airplane in 2011 when what became the MAX was launched, was in the Top 10.

An April 2018 story about a potential Blended Wing Body airplane from Boeing hit the Top 10 after an enthusiast site linked it to its forum.

Other MAX MCAS stories were in the Top 10. Finally, anticipated announcements by Mitsubishi for the Paris Air Show was the only non-Boeing story to be in the Top 10 reads for the year.

Airbus didn’t hit the Top 10 but did have a #11 story concerning a pitch-up issue on the A321.

The Boeing stories propelled record readership on LNA in 2019.

Here is the rundown.

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Analysis: Boeing’s priority after recertifying, delivering MAX: remake the Board

  • Editor’s Note: Just last night I wrote this piece for publication on Jan. 6 as Pontifications. The news today of Dennis Muilenburg’s ouster causes acceleration.

By Scott Hamilton

Jan. 6, 2020, Dec. 23, 2019, © Leeham News: Boeing’s first priority this year is to get the 737 MAX recertified, returned to service, production restarted and begin the long path on the road to normalcy.

The second priority is to remake the leadership and governance.

The third, which may slip to 2021, is to launch a new airplane program to replace the MAX 9 and MAX 10.

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Analysis: Calhoun’s insider status raises question: is he the one to pull Boeing out of its dive?

Analysis

By Scott Hamilton

Dec. 23, 2019, © Leeham News: The Boeing Board of Directors has fired Dennis Muilenburg.

Dennis Muilenburg. Source: Boeing photo.

Board chairman David Calhoun was named president and CEO, effective next month. The delay is required while Calhoun resigns from other business commitments.

Boeing CFO Greg Smith was named interim CEO. Board member Lawrence Kellner was named non-executive chairman.

Calhoun has been on the board 10 years. The roots of Boeing’s current crisis includes decisions made by the Board. Is Calhoun, an insider, the right person to pull Boeing out of its dive?

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Breaking News: Muilenburg out, Calhoun becomes president and CEO, Kellner named chairman

Dec. 23, 2019: Boeing press release:

(Leeham News analysis to come.)

New Leadership to Bring Renewed Commitment to Transparency and Better Communication With Regulators and Customers in Safely Returning the 737 MAX to Service

CHICAGO, Dec. 23, 2019 /PRNewswire/ — Boeing [NYSE: BA] announced today that its Board of Directors has named current Chairman, David L. Calhoun, as Chief Executive Officer and President, effective January 13, 2020. Mr. Calhoun will remain a member of the Board. In addition, Board member Lawrence W. Kellner will become non-executive Chairman of the Board effective immediately.

David Calhoun is named president and CEO of Boeing. Source: CNBC photo.

The Company also announced that Dennis A. Muilenburg has resigned from his positions as Chief Executive Officer and Board director effective immediately. Boeing Chief Financial Officer Greg Smith will serve as interim CEO during the brief transition period, while Mr. Calhoun exits his non-Boeing commitments.

The Board of Directors decided that a change in leadership was necessary to restore confidence in the Company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders.

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Boeing tells union: MAX production halt “weeks;” others see months

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By Scott Hamilton and Byran Corliss

Introduction

Dec. 23, 2019, © Leeham News: The Boeing 737 MAX production shut down will be measured in “weeks,” Boeing told one of its unions.

But “weeks” is a highly  open-ended description.

One supplier estimated for LNA that the suspension will be at least 60-90 days.

An aerospace analyst sees the halt lasting 3-6 months at a minimum.

Boeing 737 MAXes stored at Boeing Field. Source: Seattle Times.

LNA’s analysis does not see production resuming before the Federal Aviation Administration notifies Boeing that it has a date certain for recertification. It has announced no timeline, although published reports already suggest this could be any time from mid-February to well into March.

But these are speculative dates. 

Summary
  • Boeing now says that once certification is achieved, delivering from the inventory is a priority over producing new airplanes.
  • This raises additional uncertainty over restarting production.
  • Spirit Aerosystems has some 90 fuselages in storage.
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Pontifications: There was other news in 2019 besides MAX. Really.

By Scott Hamilton

Dec. 23, 2019, © Leeham News: The Boeing 737 MAX crisis clearly dominated the news this year.

It’s felt like the aviation stories have been all-MAX, all-the-time.

Believe it or not, there was aviation news other than the MAX.

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Boeing union creates strike fund for 2024 contract negotiations

Dec. 21, 2019, © Leeham News: The International Association of Machinists District 751, the touch-labor union at Boeing’s Seattle-area plants, launched a campaign for a strike fund this week.

The current labor contract expires in September 2024, five years from now.

Nevertheless, the union announced its campaign on its Facebook page and a micro-website here.

The union urges members to contribute $50 per paycheck to raise $6,000 by 2024.

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Why did Qantas choose Airbus’ A350-1000 for project Sunrise?

By Bjorn Fehrm

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Introduction

December 19, 2019, © Leeham News: Qantas Airways declared the Airbus A350-1000 the winner for its project Sunrise last week. After two years of competition with Boeing’s 777-8, it was the preferred aircraft for what many say is the holy grail of airline routes, the Sydney-London route.

Many speculate it’s the delay in the availability of the 777-8 that was the deciding factor. We use our airliner performance model to check if this is true or if there are other factors that turned the A350-1000 the favorite.

A350-1000 chosen for project Sunrise. Source: Qantas.

 

Summary:
  • The A350-1000 is a stretch from the A350-900 while the 777-8 is a shrink from the larger 777-9.
  • A derivative based on a stretch is often more efficient than one based on a shrink.
  • When Airbus adjusts the Maximum Take-Off Weight and fuel capacity of the A350-1000, it can fly the routes Qantas asks for.

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Minimum 3-6 month 737 MAX production shutdown seen

By Scott Hamilton

Dec. 17, 2019, © Leeham News: Boeing announced yesterday a suspension in production of the 737 MAX line. It didn’t put a timetable to the shutdown.

But one aerospace analyst predicts the shutdown will be a minimum of three to six months.

The reason? Boeing listed as its new priority, after recertifying the airplane, as clearing out the inventory of 400 stored new-production aircraft.

  • LNA was the first outlet to raise the prospect that Boeing was nearing a decision point on whether to reduce or suspend production. The post has two graphics: one shows where the MAXes are stored and the other shows deliveries vs production.

SunTrust Robinson Humphrey made the prediction in a note issued after Boeing’s after-market announcement yesterday.

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Analysts align in reaction to MAX production suspension

Dec. 17, 2019, © Leeham News: Wall Street analysts were fairly aligned in their reaction to Boeing’s decision to suspend production.

Below are excerpt of some of the research notes received by LNA:

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