HOTR: Compensation wins Southwest order for MAX

By the Leeham News Team

March 29, 2021, © Leeham News: Southwest Airlines today announced an order for 100 Boeing 737-7 MAXes.

The order was expected. The carrier also considered the Airbus A220-300. But any prospect of diverging from the 50-year relationship with Boeing was at best a crapshoot.

Despite the flowering language in the press release, the key reasons are buried.

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HOTR: Putting the 2020 Delivery Slump into historical perspective

By the Leeham News Team

March 16, 2021, © Leeham News: OEMs delivered 743 jet-powered passenger aircraft to airlines last year, compared with 1,684 at this cycle’s peak in 2018. The below chart shows the total for all OEMs as well as Airbus and Boeing (including McDonnell-Douglas).

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HOTR: Investors optimistic for Boeing. Are they too optimistic?

By the Leeham News Team

March 10, 2021, © Leeham News: Boeing’s recovery will be long, slow and painful.

But Boeing has been through long, slow and painful periods before.

Investors appear optimistic. The stock price has been rising since lows hit immediately after and throughout the pandemic.

The stock price is far off its high of $440 on March 1, 2019. March 1 was after the October 2018 Lion Air 737 MAX accident but nine days before the March 10, 2019, Ethiopian Airlines MAX crash. The price closed yesterday at $231, abut equal to where it was a year ago today.

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HOTR: Alaska begins service with 737 MAX

  • Alaska likely to cancel A320neo order. Details below.

By the Leeham News Team

March 1, 2021, © Leeham News: Alaska Airlines today launched its first service with the 737 MAX.

The carrier’s first flight was flight AS 482 from Seattle to San Diego, operated with a 737-9.

Alaska is the fourth US airline to operate the MAX. It is the third to use it in service since the type was recertified in November by the Federal Aviation Administration. American and United airlines returned their MAXes to service earlier. Southwest Airlines followed later this month. The Seattle-based airline hadn’t taken delivery of the MAX before the March 13, 2019 grounding.

Alaska is the second carrier to place a follow-on order for the MAX, after Ryanair, following recertification by the FAA. The MAX 9 will replace Alaska’s remaining Airbus A319/320ceos by 2024. Alaska continues to operate 10 Airbus A321neos and still has 30 A320neos on order, all from its acquisition of Virgin America in December 2016. In its annual 10K filing, Feb. 26, with the Securities and Exchange Commission, Alaska said, “At this time, we do not expect to take delivery of these 30 Airbus aircraft.” Alaska disclosed that $15m in deposits for the A320neo order, made by Virgin America, are “not likely to be recoverable.”

Alaska Airlines Boeing 737-9. Source: Woody’s Aeroimages.

The carrier originally ordered the 737-8. Officials later swapped these orders for the larger MAX 9. Alaska’s 737-900ERs are configured with 178 seats compared with the 737-800’s 159 seats. The advertised range of the MAX 9 is 3,550 statute miles with one auxiliary fuel tank. The tank adds about 270 miles to the range of the base specification.

Boeing doesn’t break out the sales of the MAX sub-types. There are an estimated 250-300 orders for the MAX 9, a “tweener” airplane between the MAX 8 and MAX 10.

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HOTR: Boeing continues to burn off deferred charges

By the Leeham News Team

Jan. 29, 2021, © Leeham News: With all the headlines about Boeing’s record-breaking 2020 loss and the $6.5bn forward loss for the 777X program, there was one item overlooked.

Boeing continues to reduce the deferred production costs for the 787. This is despite reducing production last year and suspending deliveries from October.

Deferred costs continued to come down quarter-over-quarter. Peaking at more than $32bn years ago, the total now is $16.6bn.

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HOTR: Boeing could further cut 787 production rate—JP Morgan

By the Leeham News Staff

Jan. 20, 2021, © Leeham News: There is risk of another production rate cut for the 787, JP Morgan wrote in a Jan. 12 note.

Boeing already is reducing the rate to 5/mo this year. There are an estimated 60 787s in inventory due to production and quality control issues discovered last year that halted deliveries in November-December.

Boeing 787 family. Source: Boeing.

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HOTR: Some predictions for Airbus and Boeing

Jan. 14, 2021, © Leeham News: Making predictions is always a hazardous business.

Some predictions take years to resolve. The outcome of others come sooner than later. If you’re right, you look sage. If you’re wrong, you look like an idiot.

But HOTR is going to take a stab at it anyway.

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HOTR: Narrowbody delivery recovery in 2025

By the Leeham News Team

Dec. 15, 2020, © Leeham News: “We do not expect Airbus or Boeing to get back to planned narrowbody deliveries (adjust for MAX grounding) before 2025, with widebody deliveries taking much longer.”

That’s the view of Bernstein Research in a note published Dec. 14. It is a pessimistic view that belies the hopes of others in the industry.

 

Boeing officials said they hope to deliver about half the ~450 stored MAXes in 2021. Most of the remaining stored aircraft will deliver in 2022. There will be some spillover into 2023, Boeing said.

On this basis, Bernstein’s forecast suggests Boeing will deliver about 208 new-production MAXes in 2021. This computes to a production rate of 17/mo. The current rate is 6/mo, according to a Wall Street analyst. A rate break to 10/mo is expected soon.

In 2022, the Bernstein data suggests Boeing will deliver about 378 new-production MAXes. This is a production rate of about 31/mo. Boeing said it hopes to be at rate 31 in “early 2022.”

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HOTR: Boeing hopes for break in China order drought after electors vote for Biden:

By the Leeham News Team

Nov. 30, 2020, © Leeham News: Boeing hopes the three-year order drought from China may come to an end next month.

The order, according to market intelligence, would be a boost for the slow-selling 777X. It could also mean new orders for the 787. Orders for the latter dropped significantly enough to prompt Boeing’s decision to shutter the Everett 787 production line next year. Production for the 787 will be consolidated in Charleston (SC).

Dec. 14 is when US presidential electors meet to cast their votes for Joe Biden or President Donald Trump, making official the projected winner. Biden won 306 electoral votes to Trump’s 232 in projections by all the major media. With almost all votes counted—and in some cases, recounted—Biden has 51.1% of the vote to Trump’s 47.2%. Biden received 80.1m votes to Trump’s 73.9m. The margin was nearly 6.2m.

China hasn’t ordered a Boeing airplane since 2017. Trump launched a trade war with China that escalated several times. He charged, without evidence, that China interfered with the US presidential election.

Boeing hopes for a major order from China as early as December. Included would be a sorely needed order for the 777X. (Shown: Boeing 777-300ER.) Photo source: Boeing.

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HOTR: New workforce newsletter; the return of Airchives

By the Leeham News Team

Nov. 12, 2020, © Leeham News: A new on-line newsletter, Future Aviation/Aerospace Workforce News, was launched last week focusing on industry regulatory, corporate, training, recruitment and retention challenges.

Created by Kathryn Creedy, a decades-long aviation writer and a contributor to LNA, the newsletter tackles workforce issues that long have received superficial coverage.

Boeing, for as long as can be remembered, issued annual forecasts about the need for pilots and mechanics over the next decade. As the workforce aged, the numbers grew in each category to hundreds of thousands.

The regional airline industry has long had challenges finding pilots.

Now, with COVID-19, cutbacks and bankruptcies upend the workforce.

Creedy’s new publication tackles these issues and more.

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