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
Muilenburg opening statement to Senate
Oct. 28, 2019: Boeing released the opening statement of CEO Dennis Muilenburg to the US Senate at a hearing scheduled for tomorrow.
The statement may be downloaded here: Opening Statement-DM-102919
Boeing’s 777X problem: Shifting market, lagging economics, softening order book
By Judson Rollins
Subscription Required
Introduction
Oct. 28, 2019, © Leeham News: The Boeing 777X’s lackluster sales to date put it in a similar light as the soon-to-end A380 program. Is the era of the 400+ seat aircraft turning onto final approach?
There are only 344 777Xs on firm order at present. As many as 59 of these orders are soft. The aircraft has been available for sale since May 2013, during a period of near-record global airline profitability. This calls into question the market viability of the 777X – and whether Boeing will ever break even on the program.
Summary
- VLA demand is limited; Airbus’s forecast seems overly optimistic.
- 777X order book is concentrated on just a handful of customers.
- Middle East carriers account for two-thirds of 777X orders.
- Inferior economics limit the 777-8 to a narrow niche like the 777-200LR.
- 777-9 economics outweighed by trip cost risk, lower yield of marginal seats.
A year since the Lion Air JT610 crash
By Bjorn Fehrm
October 28, 2019, ©. Leeham News: Tomorrow it’s one year since the crash of Lion Year JT610 into the sea in Indonesia. The aircraft which went down was a brand new Boeing 737 MAX 8 and the world was stunned how such a new aircraft could crash.
The crash triggered the deepest crisis in Boeing’s 100-year history and revealed shortcomings in Boeing’s and FAA’s airworthiness work and supervision. The Lion Air JT610 final report was issued Friday and we now know what happened.
Pontifications: Southwest to evaluate splitting airplane supplier next year
Oct. 28, 2019, © Leeham News: Gary Kelly, the chairman of Southwest Airlines, told CNBC Thursday that next year, the company will review whether to source airplanes from another manufacturer besides Boeing.
This, of course, means Airbus.
The prolonged grounding of the Boeing 737 MAX is the reason. Southwest says the grounding already has cost nearly $500m in lost revenues.
Kelly said the analysis won’t be for “smaller” airplanes, but he didn’t specify to CNBC what this means.
Southwest has 500 Boeing 737-700s seating 143 passengers at 30-31 inch pitch.
The Airbus A220-300 seats 145 at 32 inches in the Air Baltic one-class configuration.
The Embraer E195-E2 seats 146 passengers, but in a 28-inch pitch. At Southwest’s preferred 31-32 inch pitch, the E-Jet seats 132 passengers.
Since the context was the 737-8 MAX, did Kelly mean, not smaller than the -8? This isn’t known.
Bjorn’s Corner: Analysing the 737 MAX crashes
October 25, 2019, ©. Leeham News: To better understand what went wrong in the Boeing 737 MAX crashes I have over the last half-year run Corner series around aircraft Pitch stability and Aircraft Flight Control systems and how these attack the problems of today’s airliners need for stable characteristics over a very wide flight envelope.
With this as a backgound, we will now in a series of Corners go into the Lion Air final crash report which is issued today, to understand what happened and why.
Is reengining the Boeing 767 a good idea? Part 2.
By Bjorn Fehrm
Subscription Required
Introduction
October 24, 2019, © Leeham News: According to FlightGlobal, Boeing is investigating reengining the 767-400ER with GE GEnx engines to produce a new freighter and perhaps a replacement for the NMA project.
We started an analysis of what this would look like last week where we analyzed the aircraft fundamentals. Now, we continue with the capacities of passenger and cargo variants.
Summary:
- The 767-400ER is one size larger than the largest NMA. It would be a competitor to the Boeing 787-8. This makes the variant doubtful as an NMA replacement.
- As a cargo variant, it adds less than 20% of cargo volume on top of the present freighter, the 767-300F. Is this attracitve enough to motivate a reengine for a freighter?
Boeing earnings call: still hopes for 4Q recertification
Oct. 23, 2019, © Leeham News: Boeing reaffirmed its belief that the Federal Aviation Administration will authorize a return to service for the grounded 737 MAX this quarter.
The FAA certification flight will occur soon, said Dennis Muilenburg, president and CEO.
He made the remarks during the third quarter earnings call today.
“We look forward to regulatory approval for return to service this quarter. This may include a phased approach” with other global regulators, Muilenburg said.
Boeing has hosted 545 participants more than 140 customers and regulators around the world to understand the technical changes. Meetings with more than 1,100 others, including the finance community which funds MAX acquisitions, also have been held.
At this defining moment, Boeing must take a leadership role to increase safety, he said.
We expect to maintain the current production rate of 42/mo, followed by incremental rate increases to 57/mo by the end of next year.
Majority of deliveries of stored production should be delivered in the first year, but it is clear deliveries will spill into 2021. Muilenburg was not more specific.
Boeing to cut 787 production rate, cites global trade environment
Oct. 23, 2019, © Leeham News: Boeing will cut the 787 production rate from 14 to 12 for two years beginning next year, the company said this morning.
“Given the current global trade environment, 787 production rate will be reduced to 12 airplanes per month for approximately two years beginning in late 2020,” it said, an apparent reference to the Trump Administration trade wars.
Boeing raised the 787 production rate in part in anticipation of orders from China. Donald Trump’s trade war with China has frozen orders by the giant country since 2017.
Boeing CEO Dennis Muilenburg previously said slow 787 orders were tied to China’s lack of them.
McAllister out, a new Deal at Boeing Commercial Airplanes
By Scott Hamilton
Analysis
Oct. 23, 2019, © Leeham News: Kevin McAllister’s departure yesterday as CEO of Boeing Commercial Airplanes comes as no surprise.
Only the timing—now instead of next year, as was widely surmised—caught people off guard.
Kevin McAllister, left, and Stan Deal, right, at an order signing. McAllister is out and Deal is in. Credit: Azal.az.
Reports conflict whether he resigned, was fired or (as one report put it), it was a “separation;” it really doesn’t matter.
Word was circulating for months, long before the 737 MAX grounding, that his was a fading star.
He was replaced by Stan Deal, CEO of Boeing Global Services.
That McAllister is the first high-profile casualty of the MAX grounding and recertification crisis is also not a surprise. That he would be sacrificed had been rumored for weeks. The New York Times openly wrote about this prospect 10 days ago.
But tying McAllister to the MAX crisis is to some degree scapegoating.
As I wrote Oct. 7, the fingers of blame for the crisis point much higher than McAllister.
Boeing recaps actions ahead of earnings call
Oct. 22, 2019: Boeing today recapped its actions to bring the 737 MAX back to certification and service, ahead of its earnings call tomorrow.
The company has taken huge hits since Friday when the information about pilot text messages were revealed by Reuters. The Seattle Times today has a detailed report that makes an independent assessment of the context of the text messages. The story, by Dominic Gates, who’s reporting has been ground-breaking, supports Boeing’s narrative in this case.
Boeing’s press release recapping its actions to fix MAX and return it to service it below. LNA doesn’t publish press releases except in extraordinary circumstances. Given the bashing Boeing has been under–including by LNA–we’re making an exception in this case.