Emirates president says Boeing made life difficult

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By Scott Hamilton

Introduction

Tim Clark, president of Emirates Airline. Credit: ET Travel World News.

Jan. 27, 2022, © Leeham News: Despite vociferously criticizing Boeing over delays, technical difficulties and uncertainties over certification, delivery dates and performance, the president of Emirates Airline said the carrier is committed to the 777X.

Tim Clark said industry talk that Emirates may swap orders for the 777X for additional Boeing 787s isn’t correct.

Clark made his remarks in an interview with LNA on January 11. He also said he plans to retire within the next six months. Clark previously announced a retirement date but agreed to stay on to see Emirates through the pandemic crisis.

Summary

  • “Boeing made life difficult.”
  • Three-year delay has repercussions.
  • The future of 777-8 passenger model is uncertain.

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“Don’t delude the public” on environmental advances in aviation

 By Scott Hamilton

Jan. 26, 2022, © Leeham News: The International Air Transport Assn’s Annual General Meeting in Boston last October focused on industry progress and goals toward a greener environment.

Tim Clark, president of Emirates Airline. Photo Credit: ET Travel World News.

In a fanfare series of panels and announcements, IATA set a goal of industrial carbon neutrality by 2050. But in reality, this was a step backwards from a goal described in 2011 by Jim Albaugh, then-president of Boeing Commercial Airplanes. Albaugh made his remarks in a speech before the Royal Aeronautical Society.

At the IATA AGM, Tim Clark, president of Emirates Airline, cautioned the industry: “Don’t make promises you can’t keep.”

LNA spoke with Clark this month, who expanded on his IATA appearance.

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Exclusive: Boeing shifts 118 777 orders to “iffy” under accounting rule; 191 firm orders remain

By Scott Hamilton and Vincent Valery

Feb. 1, 2021, © Leeham News: There are now just 191 firm orders for the Boeing 777X.

Boeing last week reclassified 118 777X orders from firm to iffy (LNA’s term) due to the accounting rule called ASC 606. There were 17 iffy 777 orders before last week. The ASC total is now 135. After the adjustments, Boeing confirmed to LNA there are 191 firm orders for the X, down from 309 previously.

ASC 606 essentially requires contracts with customers that may be unable to take delivery due to their financial condition. Alternatively, an order can receive such classification if the seller has strong reasons to believe the transaction won’t materialize, despite the customer’s ability to pay.

Source: Boeing

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Looking ahead for 2020 and 2030 decades: Boeing

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Second in a series.

By Scott Hamilton and Vincent Valery

Introduction

June 24, 2020, © Leeham News: “Airbus’ widebody strategy is a mess.”

This is what Kostya Zolotusky, then a VP with Boeing Capital Corp., said a few years ago on the sidelines of a major aerospace conference.

Today, it may be going too far to say there is increasing opinion in the industry that Boeing’s product strategy is a mess. But it’s fair to say it’s seriously challenged.

Even setting aside the 737 MAX grounding, Airbus clearly outpaced the MAX with the A320neo family. The A321LR and XLR thrust Airbus into dominance in the single-aisle, 150-220 seat sector.

Airbus fell into a winner with the acquisition of the Bombardier C Series. Boeing’s 737-7 MAX has captured fewer than 100 orders since the program launch in 2011. Demand for the 777X is weak.

Boeing critics, and there are many, see little but doom and gloom ahead. Even before the COVID-19 crisis, Boeing faced years of recovery from the MAX grounding.

There’s no doubt Boeing has a deep hole to climb out of, exacerbated by the COVID crisis. The question is, what does Boeing do after the MAX is returned to service and the virus crisis is over?

Summary
  • Airbus is clear leader in single-aisle sector.
  • Boeing’s product strategy for New Midmarket Airplane, Embraer role is over.
  • Former CEO Jim McNerney said, “no more moonshots.” But is this just what Boeing needs to regain its position?

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Pontifications: Assessing the impact of COVID-19: today’s take

By Scott Hamilton

April 6, 2020, © Leeham News: It’s going to be quite a while before there is a clear understanding how coronavirus will change commercial aviation.

LNA already touched on impacts to Airbus, Boeing and Embraer. None of it is good. For Boeing, burdened with the additional stress of the 737 MAX, is in the worst position. Even when the MAX is recertified, there won’t be many—or any—customers in a position to take delivery of the airplane.

Bearing in mind that what’s true today will change in a day, or even an hour, let’s take a rundown of where things seem to stand now.

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First flight of Boeing 777-9 today, weather-dependent

By Scott Hamilton

Jan. 24, 2020, © Leeham Co.: In a year filled with bad news, Boeing finally had something good to crow about.

The 777-9’s first flight is today.

It comes about a year late, due to design issues with the GE Aviation GE9X engine that powers the airplane.

And, as if this weren’t bad enough, when the engines were returned from GE, a hard landing damaged one of them.

Despite rainy and cloudy weather today at Paine Field in Everett (WA), where the 777 has been assembled since the program was launched in the early 1990s.

The 777-9 is scheduled to lift off at 10am PST, depending on the Seattle area’s lousy weather this week.

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Pontifications: MAX RTS, Emirates 777X order, Suspending 737 production, more

By Scott Hamilton

Editor’s Note: News reports Sunday indicated Boeing is considering reducing or suspending production of the 737 MAX. LNA reported this possibility Dec. 11.

While Sunday’s reports suggest Boeing will halt production, LNA is told a rate cut to between 10-20 airplanes a month is also possible in order to minimize impact to the supply chain.

Dec. 16, 2019, © Leeham News: It’s time for catching up on a variety of topics.

Topics this week:

  • 737 MAX Return to Service.
  • Emirates Airline 777X order reduction.
  • Suspending or reducing 737 production—it’s not the first time.
  • E175-E2 first flight.
  • Airbus wins Project Sunrise.

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Pontifications: Good, and Bad, news from the Dubai Air Show

By Scott Hamilton

Nov. 25, 2019, © Leeham News: The Dubai Air Show proved to be a mixed bag for Airbus and Boeing.

Each company picked up important orders and commitments.

But each company saw some previously announced commitments reduced in the process, including, for Boeing, a reduction in the backlog for the slow-selling 777X.

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Big Three Gulf Carriers’ financials

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By Vincent Valery

Introduction

Nov. 4, 2019, © Leeham News: The rise of the Big Three Middle Eastern carriers since the mid-2000s has been nothing short of astounding.

They took full advantage of an advantageous geographical location: 85% of the world population is within a 10-hour flight from either Qatar or the UAE. Emirates and Qatar Airways connect all continents, except Antarctica.

This transformation into super connectors did not come without controversies. The most vocal are the Big Three US legacy carriers, through the Partnership for Open and Fair Skies. They accuse the Gulf Carriers of benefiting from massive subsidies that allow them to underprice their competitors.

As part of a deal between Qatar, the UAE, and the USA, the Big Three Gulf Carrier started publishing audited financial statements. Emirates’ and Qatar Airways’ financial statements are publicly available on their websites since 1994 and 2015, respectively. Etihad Airways has been releasing some income statement information since 2010.

Ahead of the upcoming Dubai Air Show Nov. 18-19, LNA had a look at those financial statements. We outline our takeaways in this article.

 

Summary
  • Very high growth at all three airlines;
  • Funded by different means;
  • Global slowdown and Geopolitical tensions force strategy rethink;
  • Varying levels of earnings quality;
  • An unsuspected (significant) source of revenues.

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Boeing’s 777X problem: Shifting market, lagging economics, softening order book

By Judson Rollins

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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.

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