Leeham News and Analysis
There's more to real news than a news release.
Boeing’s Muilenburg opening statement to the US House
Dennis Muilenburg
Oct. 29, 2019: Having completed his appearance before the US Senate today, Boeing CEO Dennis Muilenburg will appear before the US House tomorrow.
Here is his opening statement: Opening Statement-10-30.
His appearance before the Senate was about as expected. Most Senators seemed more interested in their five minutes of TV time than trying to get at answers and determine a path forward.
Sen. Ted Cruz (R-TX) was an exception, as was Sen. John Tester (D-MT). Cruz, a former prosecutor, pressed Muilenburg on his ignorance of key documents and the lack of communication with key employees.
Congress is accountable in Boeing MAX crisis, too
By Scott Hamilton
Commentary
Dennis Muilenburg
When Boeing CEO Dennis Muilenburg appears before the US Senate today and the US House tomorrow, he needs to be sure the company owns up to its role in the Lion Air and Ethiopian Airlines 737 MAX crashes.
The advance copy of the opening statement to the Senate, released yesterday, heads in this direction.
But if Congress truly wants to understand how 346 people died and certification of the MCAS and MAX evolved, it damn well better hold the Federal Aviation Administration accountable, too.
There is little doubt Congress will put Boeing and the FAA through the meat grinder.
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.