Pontifications: Fluid, dynamic events upend MAX story

Special Edition

By Scott Hamilton

March 20, 2019, © Leeham Co: I’ve been covering or employed in commercial aviation since 1979. I’m an aviation historian buff.

I’ve read all about the groundings of the Douglas DC-6, Lockheed Constellation, Martin 202 and de Havilland Comet. I read about how the Federal Aviation Administration didn’t ground the Lockheed Electra, choosing operating restrictions instead.

I lived through the grounding of the McDonnell Douglas DC-10 and Boeing 787. As a reporter, I walked through the debris of the American Airlines DC-10 crash that led to the grounding. I went to the crash scene of the Delta Air Lines Boeing 727 at D/FW Airport and I’ve covered many, many crashes through reporting and as a commentator.

I’ve never seen anything evolve in air accidents as has evolved in the Boeing 737 MAX investigations.

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Rolls cites timing, analysts cite poor financial condition for NMA withdrawal

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Introduction

March 4, 2019, © Leeham News: Rolls-Royce last week announced it had withdrawn from competition for the Boeing NMA engine provider, citing a mismatch in timing between its Ultra Fan being ready and Boeing’s desired entry into service.

Warren East, the RR CEO, glossed over other reasons, but they were there: the program making commercial sense and the impact of the Trent 1000 engine challenges.

Aerospace analysts interviewed by LNA and whose research notes were provided have other reasons.

Summary

  • After dissecting RR’s financial statements, with special charges, accounting changes and Free Cash Flow analysis, some analysts concluded the company simply doesn’t have the money to develop the engine for the NMA.
  • Although CEO East glossed over the Trent 1000 issues, some analysts feel this was more important than let on.
  • CFM, according to one analyst (and many observers), believes it is the favorite for the NMA engine selection, so RR bowed out.

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Transcript: RR told Boeing before end of 2018 it’s out of NMA competition

Feb. 28, 2019, © Leeham News: The announcement today by Rolls-Royce that it has withdrawn from the competition to provide an engine for the Boeing New Midmarket Airplane came as a surprise.

Warren East, CEO of Rolls-Royce. Source: Youtube.

This leaves CFM and Pratt & Whitney as the remaining competitors.

RR’s withdrawal wasn’t the only surprise.

CEO Warren East revealed Boeing had been notified shortly before the end of 2018.

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Airbus appears poised to launch A321XLR

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Introduction

Feb. 25, 2019, © Leeham News: The longer Boeing dithers on launching the New Midmarket Airplane, the harder it is to close an already difficult business case.

News last week that Airbus finally, at long last, is appears about to launch its Xtra Long Range A321XLR this year is overdue. Doing so will make Boeing’s NMA business case more difficult to close.

The aircraft should have been launch in late 2017, an insider told LNA recently. But the corruption scandals enveloping Airbus disrupted plans and drove executives to indecision. Launching the A321XLR was put on hold.

Summary
  • Killing the NMA.
  • A321XLR details.
  • Narrow market.
  • Engine down select soon.

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Pontifications: March is a critical month for engine OEMs

By Scott Hamilton

Feb. 25, 2019, © Leeham News: Even as Boeing put off a decision whether to launch the New Midmarket Aircraft until 2020, next month could be an important milestone—not only for the program but especially for the engine makers.

Unless delayed, engine down-select is supposed to be made in March.

This is a critical decision that could have huge implications to one of the engine OEMs—Rolls-Royce.

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Launching the NMA could mean new business model for Boeing

By Dan Catchpole

Feb. 14, 2019, © Leeham News: Commercial aerospace’s super cycle is alive and well—and looks to keep going through the foreseeable future. Major suppliers and OEMs, and industry analysts at the Pacific Northwest Aerospace Alliance annual conference are all optimistic about the industry demand. Analysts noted potential concerns, such as a trade war with China, a catastrophic terrorist attack, or an economic shock. However, even the often bubble-bursting Richard Aboulafia, an aerospace analyst and vice president at the Teal Group, said the party likely will keep rolling on for several years more.

Amid such a sunny forecast, Boeing is weighing whether to overhaul its commercial aerospace business model, said Kevin Michaels, a co-founder of AeroDynamic Advisory.

The company is working to close the business case on a new midmarket airplane (NMA), already dubbed the 797 by industry watchers. The NMA—or, if Boeing does not launch it, then its next single aisle airplane—likely will usher in “the next evolution of the jetliner business model,” Michaels said.

The new model, he said, has four key aspects:

  • Greater vertical integration and in-sourcing work;
  • Targeted, yet aggressive expansion of services;
  • Redefining supplier relationships to capture more aftermarket revenue; and
  • Introducing model-based systems engineering.

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Boeing expects another banner year for customers

By Dan Catchpole

Danieljcatchpole[at]gmail[dot]com

Feb. 13, 2019, © Leeham News: Boeing Commercial Airplanes expects another banner year in 2019, Randy Tinseth, BCA vice president of marketing, said Tuesday at the PNAA conference.

The airplane maker expects its customers to make about $36 billion in profit this year, he said. That would make five consecutive years of BCA customers recording more than $30 billion in profits.

Tinseth declined to comment on the company’s decision to delay possibly launching the New Midmarket Airplane (NMA) to 2020. However, as Boeing CEO Dennis Muilenburg noted during the Jan. 30 earnings call, Boeing likely will seek authority to offer this year from its board of directors.

He did say he was surprised to hear so many people already referring to it as the 797.

“I can tell you one thing—that has not been discussed,” Tinseth said.

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Countdown to NMA decision, Part 4: Time out

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Feb. 4, 2019, © Leeham News: It’s time for Airbus to launch the A321XLR.

Boeing last week announced a program launch for the New Midmarket Airplane won’t come until 2020 at the earliest.

Authority to Offer (ATO) may come as early as March or April. It had been widely expected a program launch would be announced at the Paris Air Show in June.

Airbus has been mulling the XLR launch since 2017. Inside information says a November 2017 launch was planned when all the distractions over the corruption scandals, coupled with key executive retirements, overwhelmed events.

Fifteen months later, Airbus dithers while Boeing vacillates.

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Key customers shrug off Boeing’s 2020 NMA launch date

Jan. 30, 2019, © Leeham News: Key customers and suppliers shrugged off Boeing’s announcement today that a program launch for the prospective New Midmarket Aircraft won’t come until 2020.

If Boeing goes ahead with the NMA, a decision yet to be made, an announcement was widely expected at the Paris Air Show in June.

Authority to Offer (ATO) the airplane for sale may still come as early as March or April.

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Pontificatons: From the sidelines at the AFJ Dublin conference

 

By Scott Hamilton

Jan. 28, 2019, © Leeham News: Launch by Boeing of the New Midmarket Aircraft (NMA) is pretty much a given, despite a still undecided business case, say people on the sidelines of the Airfinance Journal’s Dublin 2019 conference.

Here is a potpourri of information picked up at the conference, which is attended by about 2,000 people.

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