Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Embraer’s 2Q2020: Revenues more than halved, causing increasing losses August 5, 2020
- HOTR: Boeing warns of forward losses on 787, 777X programs August 5, 2020
- Boeing’s big opportunity August 3, 2020
Will the NMA-7 finally kill the A330?
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By Judson Rollins
July 11, 2019, © Leeham News: Boeing is expected to proceed with the New Midmarket Airplane (NMA) once the 737 MAX gets clearance to return to service. News from the Paris Air Show indicates Boeing may launch the larger model, the NMA-7, first.
The 270-passenger version of the NMA is viewed by some—including Boeing—as the airplane that would effectively kill the A330neo.
Twelve years ago, the 787 was supposed to finally kill the A330 once and for all … and we saw how that turned out. But this time may well be different.
Rendering of Boeing NMA-7. Source: Leeham Co.
SAP and advanced manufacturing cut costs for current, new airplanes
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July 1, 2019, © Leeham News: Improving supply chain management is one of the many, many key factors in making the business case for the prospective Boeing New Midmarket Airplane.
The prospective Boeing NMA needs SAP and advanced manufacturing processes to help close the business case. Source: Leeham Co.
The highly complex task of managing a supply chain with millions of parts across many product lines can break down quickly with any weak link, be it from a supplier or in the management system itself.
Quality control, security, misrouting, package integrity in shipping are among the key issues. The sheer magnitude of tracking inventory is huge.
Boeing uses Enterprise Resource Planning and is shifting the system to a new, expanded one called Systems Applications Projects. SAP is the next generation of ERP. Even though ERP has been in use for decades, last year there was a breakdown in deliveries that contributed to production interruptions of the 737 NG (late deliveries of the CFM 56 were a bigger problem).
Boeing’s transition from ERP to SAP is taking longer than anticipated, with a 2021-ish target.
Related articles:
With the NMA business case continuing to be difficult to close, Boeing’s need to attack every cost is clear.
Airbus launches long-expected A321XLR with ALC order; lessor also orders A220-300
By Judson Rollins
June 17, 2019, © Leeham News, Paris: Airbus launched its much-awaited A321XLR today with an initial order of 27 airplanes from lessor Air Lease Corp. ALC also ordered another 23 A321neos, which can optionally be taken as A321LRs. This brings ALC’s total 
Airbus order count to 387, making it Airbus’s third largest lessor.
Airbus also announced that ALC has ordered 50 A220-300s to be delivered between 2021 and 2026. ALC is the largest lessor to date to order the former C-Series aircraft. ALC executive chairman Steven Udvar-Hazy said, “We believe this aircraft will be a wonderful replacement for aging A319s, 737s, Fokker 100, BAe-146s, and other smaller jet aircraft.”
The order is structured as a letter of intent. ALC chief executive John Plueger said the LoI covers “all commercial business points” but that it will be converted to a firm order once certain terms are firmed on the A220 portion of the order.
Airbus Chief Commercial Officer Christian Scherer declined to discuss catalog pricing for the A321XLR.
Returning MAX safely to service is Boeing’s “top priority”
June 17, 2019, © Leeham News: Boeing executives focused on its top priority, returning the grounded 737 MAX, safely to service, in its lead off briefing today at the Paris Air Show.
Greg Smith, EVP of The Boeing Co., appeared instead of CEO Dennis Muilenburg, taking the lead in recapping much of what has been known for weeks: Boeing’s regret for the 346 fatalities in the Lion Air and Ethiopian accidents, the MCAS software upgrade and working with airlines and regulators to determine the path back to recertifying the MCAS and the best curriculum for pilot training.
Boeing Commercial Airplanes CEO Kevin McAllister, Defense unit CEO Leanne Caret and Global Services unit CEO Stan Deal followed Smith in a tightly scripted set of presentations and answers to questions.
The four immediately left the stage after the Q&A instead of loitering for the usual press gaggles.
Embraer in holding pattern awaiting JV approvals
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Introduction
June 10, 2019, © Leeham News: Embraer is in a holding pattern of sorts.
It’s awaiting international regulatory anti-trust approval for the joint venture with The Boeing Co.
It can’t coordinate with Boeing about synergies until these approvals come.
Its leadership is identifying areas that, from its perspective, can lead to synergies.
Some key campaigns for the E-Jet E2 appear to be on hold while customers wait for Boeing and Embraer to join in order to see how pricing may be reset, competition with the Airbus A220 shapes up, what synergies between the E2 and Boeing’s 7-Series product lines might emerge and how Embraer’s Services unit integrates with Boeing Global Services.
Boeing CEO says steady progress being made on getting 737 MAX back into the air
By Dan Catchpole
May 30, 2019, © Leeham News: Boeing CEO Dennis Muilenburg said Wednesday steady progress is being made on getting the 737 MAX back in the air following two devastating crashes within a few months of each other. He stopped short of giving a specific time frame, though.
Boeing CEO Dennis Muilenburg
However, a spokesman for the International Air Transport Association said the same day that the trade group does not expect the MAX to be back in service before mid-August.
Speaking at the Bernstein Strategic Decisions Conference, Muilenburg struck an upbeat tone overall and called the crashes a “defining moment” for Boeing. However, he did not indicate that Boeing intends any major changes as a result, and he expressed confidence in the company’s design and certification processes. Though, he did not shut the door to making changes as a result of lessons learned in the wake of the crash.
Muilenburg insisted that the MAX challenges will not affect entry into service for either the 777X in 2021 or the New Midsize Airplane (NMA) in 2025. He also discussed changes to the 737 supply chain, resumption of deliveries and future production rates for the popular single-aisle airplane.
NMA is a briar patch, top Airbus salesman says
#AirbusID
May 21, 2019, © Leeham News, Toulouse: The chief commercial officer for Airbus half hopes Boeing will step into a briar patch and launch its long-discussed New Midmarket Airplane, but the real message is clear: leave well enough alone.
Left unsaid it Airbus doesn’t want to have to launch a new airplane of its own.
Christian Scherer, the chief commercial officer for Airbus, said he wouldn’t speak for Boeing when asked if Boeing “has” to launch the NMA because of the declining market share of the 737 MAX vs the A321neo and inferior range and field performance of the -9/10 MAXes. He questioned Boeing’s own position about the NMA.
He made these remarks on the sidelines of the annual Airbus Innovation Days pre-air show briefings.
“I’m not sure they have a unified position on it. What I want to say is that we are in a very competitive duopoly, which is great for our customers,” he said. “There’s competition everywhere. You don’t have to dominate one segment or the other segment. There’s quite healthy business in it for Boeing on the 737. There’s quite healthy business in it on bigger airplanes. I’m not sure they have to do anything. Do they want to do something? Yeah, maybe.”
Airbus has the “rock” and “hard place” for Boeing NMA
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May 21, 2019, © Leeham News: Airbus has a “rock” and a “hard place” facing any manufacturer that might want to bring a new airplane to the market.
So says Christian Scherer, chief commercial officer of Airbus, who made the declaration at the first day of the Airbus Innovations Days pre-Paris Air Show briefings today.
He called the A321neo the “rock” and the A330-800 the “hard place.”
His oblique reference to another manufacturer was, of course, Boeing and its prospective New Midmarket Airplane, or NMA.
Boeing was widely expected to announce Authority to Offer the NMA for sale during the Paris Air Show next month. The 737 MAX crisis understood to put off this decision until the MAX is returned to service.
In the Middle of the Market, there “isn’t a one solution fits all. Airbus has by far the most competitive solution,” Scherer said. In this market space, a flexible solution is required,” he said.” The A320/321 offers single aisle economics approaching wide-body range. The A330-800 is re-engined, providing Airbus a left-hook, right-hook solution.
These mature programs give Airbus the pricing flexibility.
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 the MRO Americas conference
April 10, 2019, © Leeham News: China will be the last country to review and approve
fixes to the Boeing 737 MAX, according to the talk here on the sidelines of the Aviation Week MRO Americas conference in Atlanta.
Nobody knows, of course, when regulators will lift the MAX grounding orders. But none is looking for fast action.
And China, the first to ground the airplane, will be the last to lift the grounding, sideline talk here indicates.