HOTR: Boeing works on HGW 787-10—and the 787-9

Jan. 5, 2022, © Leeham News: In his first interview since becoming CEO of Boeing Commercial Airplanes, Stan Deal told The Seattle Times that development of a High Gross Weight (HGW) version of the 787-10 is underway.

“[Deal] also revealed that Boeing is currently designing a new ‘high gross weight’ version of the largest Dreamliner, the 787-10, bumping up its payload and range to make it more competitive against the Airbus A350-900.”

But LNA learned exclusively that Boeing also is developing an HGW version of the 787-9.

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HOTR: Restarting M100 SpaceJet program is a very, very long runway

By the Leeham News Team

Dec. 21, 2021, © Leeham News: Speculation that Mitsubishi Heavy Industries (MHI) may restart the M100 SpaceJet program seems unrealistic.

The consulting firm Avascent on Dec. 8 reported that MHI and the Japanese government may complete the M90 SpaceJet (formerly the MRJ90) airplanes. This could lead to restarting the M100 SpaceJet.

LNA believes the former might happen. It doubts the latter will. Here’s why.

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HOTR: Dropping Embraer comes back to bite Boeing

By the Leeham News Staff

Updated with details of Air France – KLM order

Dec. 16, 2021, © Leeham News: When Boeing decided to drop its joint venture plan with Embraer, there were good business reasons to do so.

The grounding of the 737 MAX was dragging on much longer than anyone ever expected, and there was no end in sight. The coronavirus infections exploded into a global pandemic the month before. Air transportation plunged as much as 95%. Airlines were grounding fleets and some, at that point, looked certain to go bankrupt or go out of business. Boeing was bleeding cash and debt exploded by more than $20bn. The company was in survival mode.

Embraer faced the same industrial and customer challenges Boeing did. And while none of its airplanes were grounded, the E175-E2 turned out to be an airplane with no customers because the US market for which it was designed disappeared. Restrictions in pilot contracts limiting the weight of airlines in regional operations killed the airplane.

Finally, Embraer’s market value at the time the joint venture was agreed was set at $4.5bn. By April 2020, it had fallen to $1.25bn. Given the business environment and the drop in value, why pay the higher price?

With Qantas Airways abandoning Boeing, we now know why going through with the deal may have been smart.

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HOTR: A near $100bn Equity Hole to Fill

By the Leeham News Staff

Dec. 7, 2021, © Leeham News: LNA published an article last April highlighting the divergence in financial fortunes between airlines in lessors in the aftermath of the COVID-19 pandemic. While most lessors avoided heavy losses, airlines recorded losses more significant than during any previous downturn.

Many airlines hadn’t published their annual results at the time. LNA now updates the figures with the latest annual results.

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HOTR: 787 delivery restart appears to slip to April: customers

By the Leeham News Staff

Nov. 30, 2021, © Leeham News: Plans to resume deliveries of the Boeing 787—halted since October 2020—appear to be slipping again.

Customers tell LNA that deliveries may not resume until April, a slip of one or two months from the previous unofficial timeline. Boeing hasn’t announced any timeline, deferring to the Federal Aviation Administration’s review of plans to fix issues related to composite delamination and fuselage section mating.

“As we have previously shared, we are completing comprehensive inspections and associated rework across 787 production and within the supply chain, while holding detailed, transparent discussions with the FAA, suppliers, and our customers,” a Boeing spokesperson wrote LNA in an email.

“Work continues in our production facility and rates will continue to be dynamic as we focus on eliminating traveled work and prioritize resources to support our inspection and rework efforts. We are taking the time needed to ensure the highest levels of quality, and while these efforts will continue to impact deliveries, we’re confident this is the right approach to drive stability and first-time quality across our operations and to position the program for the long term as market demand recovers. None of the issues have been determined to present a safety of flight concern with respect to the active in-service fleet.”

Related Article

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HOTR: Boeing sees travel recovery end of 2024

By the Leeham News Team

Nov. 2, 2021, © Leeham News: Although US domestic passenger traffic seems to be booming, globally air travel remains well below 2019 levels preceding the 2020 COVID-19 pandemic.

Boeing sees domestic travel recovering in 2022. But international, widebody traffic won’t recover until the end of 2024, Boeing predicts.

In an appearance last week before the Aerospace Futures Alliance in Seattle, Janene Collins, VP of Contracts & Sourcing Supply Chain, also said Boeing expects a supply chain squeeze is likely to impact plans to increase airplane production rates.

Vaccinations, improving economies drive recovery

Collins said vaccinations and improving economies are accelerating air travel recovery. As vaccinations become more widespread and economies recover, pent-up demand is spurring traffic. However, international border restrictions and proof of vaccinations continue to inhibit travel recovery, however.

Supply chain squeeze

Collins also told the AFA conference that competition for raw materials and labor, especially in the US, is a rising concern. Shipping at US ports is backing up, with hundreds of cargo vessels anchored awaiting labor and truck drivers to unload and ship their freight.

On Boeing’s 3Q2021 earnings call the next day, CEO David Calhoun said, “We’re actively working to ensure the production system, including the supply chain, is stable prior to making decisions to further increase

the production rate. Raw materials, logistics and labor availability will also be key watch items for future rate increases.

“With economic activity picking up, labor availability within our supply chain will be the critical watch item,” Calhoun said.

Snippets from the Boeing earnings call

Other quick facts from the earnings call:

  • About one-third (122) of the current 737 MAX inventory of 370 airplanes is destined for China.
  • “We have to get better at delivering [737s] out of the completion center our inventoried airplanes,” Calhoun said. (Delivery of MAXes from inventory is taking about twice as long as previously expected, a knowledgeable source tells )
  • Boeing will increase the production capacity of the 777F, which currently is about 1.5/mo, due to the demand for freighters. Boeing did not specify the new rate.
Boeing faces cancellations for 787s

Boeing has about 110 787s in inventory, representing the suspension of deliveries since October 2020. LNA understands that one major customer sees as many as half of these aircraft as subject to cancellation before deliveries resume.  No date has been set for resumption. But, based on information LNA has obtained as affected airlines look for substitute lift, it may be well into the first quarter of 2022 before Boeing begins clearing this inventory.

Boeing, and airlines, are shopping for available 777-300ERs to provide substitute lift for the grounded 787s. Some airlines seek long-term leases, suggesting cancellations are possible. As the delivery delays pass 9-12 months, customers are able to cancel the aircraft–even if built.

 

HOTR: Lessors warn Airbus

By the Leeham News team

Oct. 26, 2021, © Leeham News: Two mega-lessors warned Airbus against dramatically upping production rates of the A320 family, London’s Financial Times reported Oct. 23.

“[B]old plans to speed up production are unjustified given still subdued demand from airlines after the coronavirus pandemic,” The Times wrote. Airbus notified suppliers earlier this year to study going to a production rate of 70 aircraft per month by 2025. Rates might go even higher, to 75/mo, Airbus said.

“The chief executives of Avolon and AerCap, wrote to Guillaume Faury, Airbus chief executive, in recent weeks to express their concerns that the aircraft market would not support the most aggressive increases in output rates, according to four people familiar with the situation. A surge in supply of new aircraft, potentially flooding the market, could push down the value of the lessors’ existing fleets. They make their money by renting to airlines,” the paper wrote.

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HOTR: Lockheed reveals tanker info: it’s all about America

Sept. 21, 2021, © Leeham News: Lockheed Martin (LMT) last week revealed its dedicated product launch web site page of the LMXT aerial refuel tanker. The LMXT uses the Airbus A330 MRTT as the platform for the US Air Force’s KC-Y competition for which initial information requests have been issued.

LMT and Airbus partnered in 2018 in anticipation of the KC-Y program, originally intended to replace the aging Boeing (nee McDonnell Douglas) KC-10. KC-Z was to follow, an entirely new concept in aerial refueling tankers.

KC-Y is now recast as a replacement for 140-160 Boeing KC-135s. It will be a follow-on to the original KC-X program, which was won by Boeing after three tries. Boeing has 179 orders for the 767-200ER-based KC-46.

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HOTR: When “Buy American” isn’t

By the Leeham News Team

Aug. 20, 2021, © Leeham News: President Biden’s “Buy American” policy means increasing the US content in things purchased by the federal government. Except when it doesn’t.

Biden announced the policy in July. LNA raised the prospect that the increasing US content requirements could make it difficult for Lockheed Martin and Airbus to offer an A330-200-based airplane for the US Air Force’s KC-Y Bridge Tanker.

LNA now has clarity on this. Under Biden’s Buy American policy, there are—as it turns out—some key exemptions.

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HOTR: Lockheed Martin’s LMXT rebranding has lots of competition

By the Leeham News Team

Aug. 12, 2021, © Leeham News: Lockheed Martin’s rebranding of the Airbus A330 MRTT aerial refueling tanker has some competition that already uses the name: LMXT.

The UK band LMXT.

LNA’s background includes branding. Other than the obvious “LM” means Lockheed Martin, we couldn’t see where “XT” comes from.

“XT” is on a lot of cars. The full acronym is on a warehouse management system, solar storage, a solar tube battery and a car charger.

A government in Maryland uses it as shorthand for Legacy Mixed-Use Transit Oriented Zone. It’s used for something called Lively Middleclass Xenial Tolerant (we can’t figure this one out.)

But our favorite is the acronym stands for Little Mix Tribute Rock Band, a UK group.

LNA can’t wait to see the band’s logo show up as nose art on the airplane formerly known as the A330 MRTT.

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