Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing’s 2025 annual safety report due this month May 20, 2025
- FAA’s data of accident, incidents, often not shared May 19, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 22. May 16, 2025
- Services are driving revenues and profits in difficult times, Part I May 15, 2025
- The BWB has a long way to go before flying passengers, freight May 12, 2025
Pontifications: Gifts that keep on giving
Feb. 15, 2016, © Leeham Co. In the news business, it’s called the gift that keeps on giving.
By Scott Hamilton
These are news stories on topics that just won’t go away. And we get to write about them over and over and over and over. And then we get to write about them some more.
For most of the decade of 2001-2009 and into 2011, we journalists got to write about the USAF aerial refueling tanker scandal and procurement process. First, Boeing struck a deal to lease 100 KC-767s to the USAF. This deal blew up like an IED in late 2003 when Sen. John McCain (R-AZ), who sat on the US Senate’s powerful Armed Services Committee, challenged the fiscal responsibility of the deal. His investigation uncovered improprieties. A former USAF procurement officer who was hired by Boeing after the contract award went to jail. So did the CFO. And Boeing CEO Phil Condit resigned, giving us as his successor former McDonnell Douglas CEO Harry Stonecipher. (This later became story in its own right.)
- See my column at Forbes about last week’s bad news day at Boeing.
- See Reuters story on Boeing’s use of program accounting.
Bombardier earnings preview
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Introduction
Feb. 16, 2016, © Leeham Co.: Bombardier’s fourth quarter and full year 2015 financial results will be reported
Wednesday, and we don’t expect the situation to be pretty.
Yes, officials will highlight the recent closing of the sale of 30% of the Transportation (Rail) subsidiary.
Yes, the C Series is now on a world tour and appearing at the Singapore Air Show this week.
Yes, the CS100 will enter service in the second quarter.
Yes, the CS300 should be certified, delivered and enter service before the end of this year.
But missing will be any concrete information about new orders.
Summary
- Still no C Series orders since September 2014.
- Bombardier has its hand out for more government aid.
- ATR is making a new push in China and North America, the latter a stronghold for the Q400.
PNAA Day 2: Airbus says Boeing has product gap.
Feb. 10, 2016 © Leeham Co. Boeing has a product gap that Airbus is filling with its airplanes, says Simon Pickup, strategic marketing director.
Pickup said Boeing has a gap in its product line between the 737-8 and the 787-9. The 737-9 and 787-8 aren’t selling, creating a hole in the market for Boeing that is filled by Airbus.
Feb. 10, 2016: Today is the second of three days of conference meetings organized by 
the Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.
The A321 and the smaller A330 fill this gap, says Pickup, who noted the A321neo outsold the 737-9 by 9:1 in the last two years and the A330-200/800 dramatically outsold the 787-8 during the same period.
PNAA Day 2: Cautionary note raised
- Feb. 10, 2016: Today is the second of three days of conference meetings organized by
the Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.
Feb. 10, 2016: Large commercial aircraft deliveries hit just under $104bn in 2015, a 4.9% gain over 2014. Regional aircraft values, however, were just $7.1bn, a decline of 10.5% year-over-year, said Richard Aboulafia, a consultant with the Teal Group.
Deliveries of all aircraft types, including military, rotocraft, etc., saw only a 0.6% increase YOY. Jetliners account for 60% of the total values.
PNAA Conference Day 1: Aerospace Clusters
- Feb. 9, 2016: Today is the first of three days of conference meetings organized by the Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.
Aerospace clusters are evolving throughout the world, said Kevin Michael, vice president of ICF International.
California is on the decline. Two new clusters on the rise are Mexico and the Southeastern US. The Netherlands and Singapore are successful, long-term clusters.
California was the premier aerospace cluster for decades, but its demise began when Lockheed chose Georgia as the location to build the C-130. The founding of Airbus was not good news for SoCal, and neither was the end of the Cold War. The acquisition of McDonnell Douglas by Boeing in 1997 further precipitated the decline of SoCal.
Pontifications: Bad week for aerospace stocks
Feb. 1, 2016, © Leeham Co. Ouch.
By Scott Hamilton
Boeing stock tanked about 10% last Wednesday when the company surprised analysts with unexpected news and below expectations 2016 guidance.
Bombardier became a penny stock.
What the heck happened?
Bjorn’s Corner: Exciting 2016
By Bjorn Fehrm
29 January 2016, ©. Leeham Co: In the corner of two weeks ago we did a retrospective of 2015. Time for looking ahead. The year of 2016 will be quite interesting. We had entry into service of the first re-engine single aisle aircraft this week, the Airbus A320neo, the same week as we expect first flight from its main competitor, Boeing’s 737 MAX 8. We will also see first flight of the Embraer E190E2 and A350-1000 before the year is over.
The Mitsubishi MRJ shall go test flying in earnest and Bombardier’s CSeries 100 and 300 shall enter service. On top of that, the COMAC 919 will probably start ground roll tests this year and we should see roll out of Irkut’s MC-21. I would say 2016 is a busy year for civil aviation.
In the 2015 corner we talked a lot about engine technology as a key driver to further efficiency of air transportation. Now will dissect the airframe technology that all these new projects will bring us. Read more
Boeing earnings call: will Muilenburg be more forthcoming than McNerney?
- See Scott Hamilton’s new column with Forbes on-line, It’s time for hard questions for Boeing.
Jan. 26, 2016, © Leeham Co. Boeing’s earnings call tomorrow could have additional revelations about the 777 production rate and how its cash flow is being 
enhanced by continued maneuvering of advances and accelerated pre-delivery deposits (PDPs).
Whether it will or not remains to be seen. Under former CEO Jim McNerney, Boeing’s penchant for obfuscation was legendary among the aerospace analysts.
Dennis Muilenburg, who took the CEO title last summer in addition to his Chief Operating Officer position, has already shown he’s different than McNerney, evidenced by the surprise, early contract agreement with the engineers union, SPEEA.
Boeing last week announced a further rate cut, effective in September, for the ailing 747-8 program. Along with this came a pre-tax charge of nearly $900m.
Major questions to be answered revolve around the future production rate for the 777 and the cash flow.
Bjorn’s Corner: The coin has two sides
By Bjorn Fehrm
22 January 2016, ©. Leeham Co: Today’s Corner should have been about something else. But we learned yesterday that yet another order did not go Bombardier’s way, the 125 seat aircraft order of 40 units for United Airlines.
Normally I don’t care about who gets a single aisle order; the players that are active are all producing very good products and which one that gets chosen in not a big deal.
Boeing took this business with its smallest 737NG member 737-700. The 737NG was scheduled to take on aircraft like the CSeries and the re-engined A320neo while Boeing perfected a clean sheet single aisle for the end of this decade.
This corner is about national characters and what happens when this character gets under pressure. It’s also about the fact that the coin has two sides.
United chooses 737-700 over CS100 in big blow to Bombardier
Jan. 21, 2016: United Airlines elected to order 40 Boeing 737-700s instead of the Bombardier CS100, it was announced today. It’s a huge blow to Bombardier, which was hoping to land this order to give a big boost to the CSeries program.
The reasons are obvious, even to an outsider, and don’t speak to the attributes of the CSeries, which remain compelling.
Here’s what we believe was behind the United decision: