Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Collins Aerospace faces new merger before previous one is fully integrated July 16, 2019
- 14 new airplanes and derivatives see EIS through 2027 July 15, 2019
- Pontifications: Boeing can’t catch a break July 15, 2019
- Airbus pulls anniversary book July 12, 2019
- Bjorn’s Corner: Kjos departure signals changes at Norwegian July 12, 2019
Paris Air Show, Day 2: Orders and commitments
June 18, 2019, © Airfinance Journal: Boeing received a much-needed vote of confidence in its grounded 737 Max aircraft with a commitment for 200 of the type from IAG. 
Nonetheless, the US manufacturer failed to register a firm order from the second day in a row.
Airbus, in contrast, continued to build momentum for its new A321XLR with orders and commitments from IAG and Cebu Pacific.
CFM also had a good day, registering big orders from lessors and AirAsia for its LEAP engine.
Stabilizing 737 production is Boeing’s priority, CFO says
By Dan Catchpole
June 5, 2019, © Leeham News: Boeing is focused on smoothing out 737 production at 42 aircraft a month for now. Any decision to returning production to 52/month is well down the road, Boeing CFO Greg Smith said Wednesday at the UBS Global Industrials and Transportation Conference in New York.
“It’s going to be all about stability,” Smith said. “And stability is not just about on schedule but ensuring that we’ve got predictability and accuracy that’s more finite than what it’s been in the past.”
The company had planned to step up production from 52/month to 57/month in June or July. Boeing slowed down production of the workhorse single-aisle in April after a second 737 MAX crashed shortly after takeoff. At the time, it cited the accidents as the reason for slowing 737 production. However, the aerospace giant already had been struggling with production disruptions prior to the crashes. The biggest headache came from slow deliveries from engine-maker CFM, as LNA reported in April.
Industry insiders at the Aviation Week MRO Americas conference in April said Boeing already planned to hit 57/month in September. However, at Wednesday’s investor conference, Smith’s sidestepped any question about when 737 production could reach that pace.
Pontifications: 50×2
By Scott Hamilton
June 3, 2019, © Leeham News: Airbus and Embraer are 50 years old this year.
Airbus broke out the party hats last Wednesday. It arranged a formation flying of all its in-production aircraft, including the Beluga XL. It launched a website microsite with its history. A new book, Airbus, The First 50 Years, has been issued. A celebration is planned for the Paris Air Show.
Embraer’s anniversary is Aug. 19, so at this point, its party plans haven’t been solidified, but there will likely be something at the Paris Air Show. Embraer plans to have its new specially painted E195-E2 at the air show.
How Boeing named, promoted the MAX in early days
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Introduction
May 16, 2019, © Leeham News: As a Congressional investigation into the Federal Aviation Administration’s oversight and certification of the Boeing 737 MAX development ramps up, LNA dipped into its archives to review what the company was telling the public.
The MAX was hastily launched in July 2011, when American Airlines informed Boeing it was about to place a record-setting order for nearly 500 airplanes. Airbus was lined up to snare it all with the A320ceo and neo families unless Boeing could make a credible offer.
Within 48 hours, Jim McNerney, then-CEO of Boeing, made the decision to launch the re-engined design of the 737. This later was branded the MAX.
It was a plane Boeing designed but didn’t want to build.
Once launched, Boeing had to play catch up to Airbus, which had a seven month lead with its neo. The public messaging was long on bashing the A320. There were few technical details presented in public, but the basis for what’s become in focus today after two fatal crashes was there.
Summary
- Boeing promoted commonality between NG and MAX.
- Making a virtue of basic design.
- Integrating the larger engines.
- Promoting the same simulators.
MAX impact on Boeing NMA beginning to emerge
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Introduction
May 2, 2019, © Leeham News: There was indication last week Boeing’s decision on whether to approve the New Midmarket Airplane program will slide.
CEO Dennis Muilenburg said on the company’s first quarter earnings call the focus is returning the grounded 737 MAX to service.
A decision on authorizing the sales force to offer the NMA for sale is ambiguous. For the first time, targeting 2025 for entry into service appears to be acknowledged as iffy.
The statements confirm LNA’s analysis and our reports that the 2025 EIS is unlike.
Summary
- Advanced manufacturing is key to NMA production, but all elements need to fall into place—a “production moonshot.”
- For more than a year, LNA and others predicted the NMA EIS in 2025 is not possible.
- Engines won’t be ready by 2025 EIS. See here and here from March 2018.
- Latest woes from CFM on the LEAP add to uncertainty; CFM is the favorite for NMA. See here.
- Engine selection by Boeing put off until after MAX problems solved, grounding lifted.
- Authority to Offer for sale at Paris Air Show unlikely and 2025 EIS now in doubt.
Latest engine problem means NMA EIS slides
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Introduction
April 22, 2019, © Leeham News: If there remains any doubt that Boeing’s prospective New Midmarket Airplane (NMA) won’t be ready for entry into service (EIS) by 2025, it should be dispelled by now.
The grounding of the 737 MAX March 13, which is likely to continue well into the summer, will delay any launch of the program—should Boeing proceed.
The Board of Directors is unlikely to approve Authority to Offer (ATO) the NMA for sale as long as the cash flow for the MAX is outgoing and not in-coming.
Although this has its own impact on the NMA timing, it’s not the critical factor.
Last week, it was revealed that the CFM LEAP engine on the MAX (and the Airbus A321neo) has a problem called coking, which led to the contained engine failure of a Southwest Airlines MAX being ferried from Orlando (FL) to Victorville (CA) for the grounding of the Boeing airplane (see here and here). It’s the latest in a long line of engine maker problems with their current generation of powerplants.
This issue is unrelated to the MAX MCAS grounding. It also affects some engines on the A320neo family.
Summary
From the sidelines at MRO America, Day 2; the real reason for 737 production rate cutback
April 11, 2019, © Leeham News: Conversation from the sidelines of the Aviation Week MRO Americas conference in Atlanta on Day 2:
Ramping the 737 production back up
Boeing already has its plans for ramping production of the 737 back up from the current rate reduction of 42 airplane per month.
According to the information here, this is the schedule for ramping back up:
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Delta Tech Ops 5-year goal to double revenues
#MROAM
Ed Bastian, Delta Air Lines CEO.
April 9, 2019, © Leeham News: Delta Air Lines has the third largest third-party MRO company in North America and aggressively seeks to grow, in sharp contrast to its competitors.
While American and United airlines have limited their own maintenance, repair and overhaul, let alone seek third party business, Delta Tech Ops is a business unit and profit center. Delta CEO Ed Bastian said today that Tech Ops will achieve $1bn in revenues this year and has a goal of $2bn within five years.
Bastian was the lead-off speaker at the Aviation Week MRO Americas conference in Atlanta this week.
Cutting A220 costs is an ‘ongoing exercise’ for Airbus
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Introduction
March 14, 2019, © Leeham News: Airbus’ effort to slash supply costs for A220 production is “an ongoing exercise at this point,” Joe Marcheschi, Airbus’ head of procurement in North America, told LNA in an interview last month.
The A220-300 for JetBlue will be assembled at the Airbus plant in Mobile (AL). Airbus rendering.
“There are no specific, let’s say, achievements yet,” he said. “We are working closely with our supply chain.”
It takes time to squeeze cost out of the supply chain, he said. “We only took over July 1. That’s when we got full knowledge of the existing contracts.”
In January, Philippe Balducchi, head of the Airbus-led venture overseeing production, told journalists that the aerospace giant aims to realize “significant double-digit” percentage cost reduction. He indicated that most of the savings likely would come from the supply chain, according to news reports.
“Look, the airplane is absolutely fantastic—it just costs a lot of money,” Marcheschi said. “Now, we have to find a way to reduce the cost.”
Summary
- Airbus is working to slash supply chain costs on A220 program, but no announcements yet.
- The European plane maker wants to offer commercial MRO services in North America.
Pontifications: Delays, design creep, cost overruns–nope, it’s not an airplane program
By Scott Hamilton
March 11, 2019, © Leeham News: It’s late. There have been creeping delays. There’s been design creep. There were unknown unknowns. It’s way over budget.
No, it’s not a new airplane program, though the parallels are quite apparent.
It’s our new house.
After a three year process, including changing builders, going through the city twice, hitting expensive unknowns and facing rising costs, today is finally, finally, moving day.
It’s been a horrible experience I wouldn’t wish on anyone.
This will sound familiar to Airbus, Boeing, Bombardier, Mitsubishi, Rolls-Royce, Pratt & Whitney and, to a lesser extent, GE and CFM. Only Embraer can say it finished on time and on budget.