Pontifications: Legislature weighs overdue actions for aerospace

March 1, 2021, © Leeham News: Two bills before the Washington State Legislature intend to create long-term strategic plans to grow the state’s advanced manufacturing sector in general – and the space industry in particular.

By Bryan Corliss

To this we say yes, hell yes and amen.

North America’s largest aerospace cluster has lurched from crisis to crisis over the past 20 years, with elected officials scrambling to meet Boeing’s demands for tax, workforce and labor concessions.

And – much to our dismay – for most of the past two decades, leadership in the state Capitol of Olympia has been content to cobble together ad hoc responses with only the faintest lip service toward any kind of long-range strategic planning for future industry needs.

These bills – Substitute House Bill 1170 and Substitute House Bill 1190 – have the potential to change all of that.

  • Bills contain a lot of what we’ve long advocated
  • Manufacturing bill sets ambitious goals for state
  • Space bill seeks to boost – and capture – fast-growing sector
  • Taxes aren’t on the table — yet
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Pontifications: For Boeing, the future is a new airplane, not the status quo

By Scott Hamilton

 Feb. 22, 2021, © Leeham News: Tunnel-vision pundits, analysts, and even some experts say Boeing shouldn’t launch a new airplane program within the next few years.

Why? They say doing so will cannibalize the 737 MAX 9 and MAX 10. They say it will undermine sales of the entire MAX family.

I say, poppycock.

Boeing has a MAX problem. It’s not the grounding, although the issues from this are obvious. LNA has written about this ad nauseam, but it’s necessary to remind these new airplane-naysayers. The MAX 7 is a sales dud. The MAX 9 isn’t far behind. And the MAX 10 is uncompetitive with the Airbus A321neo family.

The only MAX that has a bright future is the MAX 8. Boeing can’t rely on the MAX 8 for its future in the 125-240 seat sector.

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Pontifications: The New Air Force One: Flying Fortress

Feb. 14, 2021, © Leeham News: Air Force One is, after the national flag, the most recognizable and prestigious symbol of the United States.

By Scott Hamilton

It’s also shrouded in mystery.

A new National Geographic special premiering Feb. 15 lifts the veil, at least partially.

NatGeo was granted unprecedented access to the development of the new airplanes, two Boeing 747-8s, that will replace the 30-year old 747-200s that serve as Air Force One.

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Pontifications: Boeing’s right direction, but don’t get ahead of reality

By Scott Hamilton

Feb. 8, 2021, © Leeham News: Boeing appears to be heading in the right direction: launch a new airplane program to take care of its 737 MAX product weakness. And do something different by pursuing the “NMA Lite” concept: a twin-aisle, three-member family starting at ~185 seats through ~250 seat and up to 5,000nm in range.

But don’t get ahead of ourselves on the NMA Lite. There are a lot of Ts to cross and i’s to dot.

And anything can change between now and a concerted effort to survey customers, prepare the supply chain and ask the Boeing Board for Authority to Offer the NMA Lite for sale.

Importantly, a three member family dramatically expands the potential market. Publicly, Boeing said the market for the NMA is about 4,000. Internally, officials knew it was more like 2,100—with Airbus capturing perhaps half.

With a third member, demand increases by roughly 7,000.

It’s tough to make a business case for 1,050 airplanes. It’s much easier for 4,550.

Still, this is the best news I’ve seen come out of Boeing in years. Even pre-dating the MAX ground. And pre-dating the COVID pandemic.

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Pontifications: Unraveling the numbers

By Scott Hamilton

Feb. 1, 2021, © Leeham News: Understanding the real market demand for an airplane sector is a complicated thing.

What Airbus and Boeing say the market is for an airplane sometimes is a matter of what they don’t say.

On the Jan. 27 earnings call, Boeing set the program accounting for the 777X at 350 airplanes. This number declined from 400. Simultaneously, Boeing took a whopping $6.5bn forward loss on the program. (Not all is attributed to the accounting block.)

Later in the same call, CEO David Calhoun said, “Across the total widebody market of more than 8,000 projected deliveries over the next two decades, we see replacement demand for over 1,500 large widebody airplanes which are well suited for the 777X.”

Some interpreted this to mean that Boeing expects to sell 1,500 777Xs.

Well, not really.

So, let’s unravel these numbers and what “market demand” or “replacement demand” means. Everything discussed below applies equally to Airbus or Boeing.

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Pontifications: Airbus slows A320 production ramp up; widebody rates squishy

By Scott Hamilton

Jan. 25, 2021, © Leeham News: JP Morgan thinks Boeing 787 production rates will come down more than the 5/mo planned from May.

Airbus last week announced ramping up A320 rates will be slower than previously hoped.

And Airbus’ widebody rates, while maintained for now, seem squishy.

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Pontifications: Electric aircraft builder poised to start production near Everett

By Bryan Corliss
Jan. 18, 2021 © Leeham News
— Western Washington aviation enthusiasts may need to send out an extra Valentine this year, addressed to Alice – the nine-passenger electric aircraft being developed by Eviation.

Sometime around Valentine’s Day, mechanics should begin assembling the first production Alice at the company’s new final assembly site in Arlington (WA), about 20 miles north of Boeing’s Everett facility.

“We are literally setting it up,” said Eviation Chairman Roei Ganzarski, last week from one of the two hangars that the company has taken over at Arlington Municipal Airport, as equipment boomed in the background. “We’re putting in fixtures and furniture and paint.”

Ganzarski said his plan is to have the first production aircraft ready to start flight tests for FAA certification this summer – assuming that both Eviation and magniX, the company providing the electric motors to power the craft – are able to stand up new facilities, complete their initial hiring and get the first shipsets assembled on time.

“What an exciting year 2021 is going to be,” Ganzarski said.
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Pontifications: Boeing’s exodus from Puget Sound

Jan. 11, 2021, © Leeham News: Last week appeared to be an ominous week for Washington State for aerospace.

By Scott Hamilton

On Monday, The Seattle Times reported that Amazon surpassed Boeing as Washington’s largest employer. The retailer now employs more than 80,000 in the state. Boeing, following COVID- and 737 MAX-grounding induced layoffs, employs just under 59,000 in Washington.

The Times reported Tuesday that Boeing’s research and development center at Boeing Field will be closed. At its peak, the center was to employ 900. The expansion began a mere 10 years ago.

Previously, Boeing announced Oct. 1 that it will close the Everett 787 production line and consolidate the final assembly at the Charleston (SC) plant.

The exodus by Boeing from Puget Sound and Washington State is underway. But was closing the R&D center as significant as it seemed?

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Pontifications: Outlook 2021 Series begins today

By Scott Hamilton

Jan. 4, 2021, © Leeham News: Beginning today through next week, Leeham News presents its annual Outlook series for the coming year.

We’ve been doing this for years. In recent years, the Outlook reflected continued growth in commercial aviation. The industry had the longest upward tick in the more than three decades I’ve been involved in the sector.

Not this year. As I wrote before the Christmas-New Year’s holiday period, 2020 was the worst year for commercial aviation I’ve ever seen in 41 years.

This year is the beginning of the end of the COVID crisis. Yes, the vaccines began distribution in December, but large spikes in COVID cases began simultaneously and are predicted to climb higher through the first quarter.

Over the coming days, as LNA provides its Outlook for 2021, readers will see what we believe will happen.

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Pontifications: 2020 Retrospective–the worst ever seen

By Scott Hamilton

Dec. 21, 2020, © Leeham News: This is my last Pontification of 2020. I’ll be off between the Christmas and New Year’s holidays.

It’s only fitting to look back at what is the worst year in commercial aviation—ever.

I’ve just completed my 41st year in this industry. I’ve seen two Gulf Wars, SARS, 9/11, the Great Recession and several economic cycles.

Lockheed and McDonnell Douglas exited the commercial airliner business.

I’ve seen three groundings: the McDonnell Douglas DC-10, Boeing 787 and 737 MAX. I’ve been on site of two significant crashes: the American Airlines DC-10 in Chicago and Delta Air Lines’ 727 in Dallas. I flew over a third, a Delta L-1011 in Dallas the day after it happened.

I worked for the first new airline certified by the Civil Aeronautics Board in 40 years, the first Midway. I also went through one bankruptcy and one merger, each part of the deregulation shake-out.

As a reporter, I covered some of the business giants, including Bob Crandall, Herb Kelleher, John Leahy and others.

It’s been a great four decades.

But nothing compares to the global industry disaster of 2020.

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