Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Pontifications: The reshaped commercial aviation sector
By Scott Hamilton
July 12, 2021, © Leeham News: With Washington State and the US open for business following nearly 18 months of COVID-pandemic shut-down, there is a lot of optimism in commercial aviation.
In the US, airline passenger traffic headcounts are matching or exceeding pre-pandemic TSA screening numbers. Airlines are placing orders with Airbus, Boeing and even Embraer in slowly increasing frequency.
The supply chain to these three OEMs looks forward to a return to previous production rates.
It’s great to see and even feel this optimism. But the recovery will nevertheless be a slow if steady incline.
Pontifications: The WTO Airbus/Boeing standstill and pursuing China
June 28, 2021, © Leeham News: The US and European Union agreed on June 15 to a standstill in the 17-year old trade dispute over illegal subsidies to Airbus and Boeing.
The World Trade Organization (WTO) found each violated international rules. By the time all was said and done, the US was authorized to levy tariffs on $7.5bn worth of European goods. The EU received authorization to levy tariffs on $4bn of US goods.
Tariffs on goods went beyond Airbus and Boeing products. But it was 15% tariffs on Airbus planes imported into the US and Boeing planes imported into the EU that were the highest-profile and most costly.
Despite initial reports in some uninformed media that the long-running dispute was “resolved,” in fact, only a standstill was agreed. The US and EU now have five years to negotiate a permanent settlement to Airbus’ “reimbursable launch aid” and Boeing’s benefits from tax breaks and NASA.
The two sides also agreed to put China’s commercial aerospace industry in the crosshairs.
Pontifications: MHIRJ prepares for narrowbody aftermarket business
By Scott Hamilton
June 21, 2021, © Leeham News: MHIRJ Aviation Group said last week its 100,000 sf expansion of MRO facilities is sized to accommodate narrowbody aircraft.
MHIRJ is the former Bombardier CRJ global product support system purchased last year by Mitsubishi Heavy Industries.
The expansion, valued at $20m, was first disclosed by LNA in its May 31-June 1 one-year anniversary updates.
Related stories:
- Mitsubishi grows ex-Bombardier business: One Year later, Part 1
- MHIRJ expanding floor space: One Year later, Part 2
Ismail Mokabel, Senior Vice President, Head of Aftermarket, told LNA then that MHIRJ would be ready to diversify its aftermarket work beyond the CRJ regional jet after 2023. In a groundbreaking ceremony of the hangar expansion at its Bridgeport (WV) facility June 16, Mokabel disclosed that hangars will be big enough for narrowbody jets.
Pontification: It’s time to replace the 737, says industry leader
By Scott Hamilton
June 14, 2021, © Leeham News: One of commercial aviation’s most influential leaders said last week Boeing needs to replace the 737 with a new technology airplane.
Steven Udvar-Hazy, chairman of Air Lease Corp., said in a CNBC interview June 9 the 737 is a good airplane, but the time has come for a replacement.
“Boeing has to look at the future. What kind of airplanes that airlines will need with all the environmental challenges, regulatory challenges? What is the airplane type airlines will need 5, 10, 15, 20 years from now?” Hazy said.
“Boeing needs to invest. The 737 is a wonderful airplane, but it’s been in operation since 1967. We have an airplane that its basic design has been around for 54 years. It’s time for a new technology airplane that will give airlines and the public greater efficiency, better economics, better environmental footprint so the airlines can make money with it and yet meet the challenges that we’re facing on the environmental front.”
Pontifications: Qatar, United, Boom, Airbus and Aerion
By Scott Hamilton
June 7, 2021, © Leeham News: It’s been a busy couple of weeks in commercial aviation, with several reports last week alone.
- Qatar Airways expresses interest in Boeing 777X-F and Airbus A350F.
- United Airlines announces a “commercial agreement” with Boom Supersonic to purchase 15 Overture jets and option 35.
- Boeing exploring reinventing the 757.
- Airbus moves toward a new wing for A320 family.
- Aerion Aviation terminates program, shuts down. May 21.
Some of these reports were new and interesting Others were over-hyped and fluff.
Let’s run them down.
Pontifications: The Wing of Tomorrow and Airbus’ future
May 31, 2021, © Leeham News: It’s not as if Boeing doesn’t have enough challenges right now.
By Scott Hamilton
Airbus seems ready to up the ante by re-winging the A320 series, according to an article last week by Bloomberg News.
The “Wing for Tomorrow,” as Airbus calls it, has been in the works for years. It’s a composite wing, designed for a new production process. The process will be quicker, more efficient and less costly than the cumbersome, expensive autoclave used today.
Public discussion about an enlarged A321 has been around for years. Variously called the A321 Plus Plus or A322, the broad concept is a 12 seat stretch (Bloomberg suggests it could be 24 seats), more powerful engines and the new composite wing. Bloomberg wrote that the wing, with a wider span, could have folding wingtips.
This A322 would be a true Boeing 757 in terms of capacity. Range would be well into the “Middle of the Market” definition proffered by Boeing for the better part of a decade.
But what about the A320 and A319?
Pontifications: Remembering an industry visionary
By Scott Hamilton
May 24, 2021, © Leeham News: In the 42 years I’ve in associated with commercial aviation, I’ve met lots of people. I became friends with some. Others were good business acquaintances.
Michael Chowdry fell into the former category. Jeff Cole fell into the second.
Both died in an airplane accident Jan. 24, 2001. Chowdry was CEO of Atlas Air, a pioneering ACMI operator.
Cole was the aviation reporter for the Wall Street Journal. Cole went to Denver to interview Chowdry about the ACMI operation. ACMI stood for Aircraft, Crew, Maintenance and Insurance. The concept is common today. It wasn’t then.
As part of the visit, Chowdry decided to give Cole a ride in a Czech-built L-39 jet trainer he owned. Almost immediately after take-off, the flight ran into trouble. Chowdry, piloting the plane, never got higher than some 400 feet. He couldn’t keep the plane airborne. It crashed, killing himself and Cole instantly.
Now, 20 years later, Chowdry’s widow, Linda, published a biography called No Man’s Son, A Flight from Obscurity to Fame.
Pontifications: Book Review, “Tigers in the Sea”
By Scott Hamilton
May 17, 2021, © Leeham News: Tiger in the Sea is a new book about the 1962 ditching of a Flying Tigers Lockheed Constellation L-1049H in the stormy North Atlantic.
It was, in modern-day comparisons, the US Airways Flight 1549 of its day. But while all 155 passengers and crew on 1549 survived the ditching in Hudson River, 28 of the 76 on board died.
US Airways 1549’s captain, Chesley Sullenberger, landed in the cold but calm Hudson River. Rescuers surrounded the plane within minutes. Tigers Capt. John Murray ditched in 20 feet seas in the middle of a storm with gale-force winds. The nearest ship was 13 hours away. Those who died survived the impossible landing.
Pontifications: Long road ahead, but Boeing will recover
By Scott Hamilton
May 3, 2021, © Leeham News: Cowen Co. called the Boeing 1Q21 financial results “messy” with questions unanswered.
Credit Suisse characterized a “challenging 1Q, though recovery should begin to accelerate.”
My take falls in line with Credit Suisse. It was a challenging first quarter and lots of variables overhang Boeing going forward. But I was struck by the confidence displayed by CEO David Calhoun and CFO Greg Smith going forward. And I’m not one to drink the Kool-Aid by any stretch.
To be sure, many challenges lie ahead for Boeing. Returning the 737 MAX to service has been anything but smooth. New issues popped up that resulted in Boeing (not the regulators) grounding the airplane again. Deliveries were suspended once more.
After 10 years of production, Boeing suspended deliveries of the 787. The KC-46 tanker still isn’t performing as required after nearly two years of delivery delay and limited operations with the US Air Force.
This is not The Boeing Co. of decades past.
Pontifications: Balance shareholder value with product development and strategy
April 26, 2021 © Leeham News: Balance shareholder value with the long-term strategy of The Boeing Co.
By Scott Hamilton
This is what Boeing needs to do. But there were conflicting signals from the 2020 annual shareholders meeting held April 20 via virtual webcast and dial-in participation.
“We want to get back to a dividend policy. I can’t give you a date and we need a return in our commercial aviation department to support that.” So said David Calhoun, CEO.
Yet Calhoun was circumspect about a new airplane program.
When asked about developing a new airplane, Calhoun said—as he has before—that Boeing’s current research and development focus is on refining engineering modeling and production methods. These will be the “real differentiators” for the next new airplane.
“Calhoun vowed to return Boeing to its engineering roots,” reported Bloomberg News.