Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- A321neo continues upward market share; good luck hitting rate 14/mo for the A220 January 20, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 5. January 17, 2025
- What’s the future of the Boeing 787-8? January 16, 2025
- FAA understaffing affects air operations oversight; NTSB falls short, too January 13, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 4. January 10, 2025
A321neo continues upward market share; good luck hitting rate 14/mo for the A220
Subscription Required
By Scott Hamilton
Jan. 20, 2025, © Leeham News: The A321neo continues its climb as the dominant single-aisle airplane in the Airbus family.
Given Boeing’s continued inability to deliver its 737 MAX singles aisles at pre-grounding rates in early 2019 and the inability to certify and deliver the MAX 7 and MAX 10, comparisons are irrelevant.
The A321neo became Airbus’ dominant narrowbody aircraft in 2023. The upward trajectory gained momentum last year. The A321 is compared with the A320neo, the largely irrelevant A319neo, and the A220. A220 deliveries are overwhelmingly for the -300 model, with the -100 model, like the A319, largely irrelevant.
Figure 1. Deliveries of the A321 are now dominant across all Airbus single-aisle airplanes. Source: Leeham News.
Airbus wants to increase production of the A320 family to 75 per month by 2027. It has studied boosting rates to 83 per month. Supply chain and engine delivery constraints caused Airbus to push the 75 rate to the right. There is no projected date for increasing to rate 83.
Airbus also wants to increase production of the A220 to 14/mo next year. Supply chain and engine delivery issues have also hurt boosting rates. Regardless, the goal of 14/mo next year seems unrealistic, given the current rate, which is believed to be around six or seven a month.
What’s the future of the Boeing 787-8?
By the Leeham News Team
Subscription Required
Jan. 16, 2025, © Leeham News: The short-body Boeing 787-8s have a problem when they come off lease. They aren’t as efficient people haulers as their larger cousins, the -9 and the -10.
Concept of Boeing 787-8F. Credit: Leeham News.
Understanding that, what is their future? 1) Re-lease them to another operator or extend the current leases, both at very favorable rates, to get something out of them. 2) Reduce them to spares, which could work for a few to fill the spare parts pipeline, but after that the spares value really starts dropping as supply goes up. 3) P2F freighter conversions.
Of the choices, a P2F program seems the best way to extract value out of the airframes. The key to making it work is conversion cost. There have been some fairly solid rumblings that Boeing has either completed the conversion engineering package or, in fact, started to offload the planning to Boeing of India to get the package executed. Boeing says there is no current engineering underway but would not comment on previous work.
Related Article
Let’s look at what it takes from the P to the F.
FAA understaffing affects air operations oversight; NTSB falls short, too
Subscription Required
By Colleen Mondor
Commentary
Jan. 13, 2025, © Leeham News: When discussing the topic of Federal Aviation Administration (FAA) staffing, it is traditionally Air Traffic Controllers that command media attention. Even when problems surfaced after the Boeing 737 MAX accidents in 2018-19, and following the Jan. 5, 2024, door plug failure on Alaska Airlines flight 1282, the discussion of FAA oversight remained narrow, focused only on Boeing.
Staffing levels within Flight Standards District Offices (FSDO) and how they impact commercial operations, especially among Part 135 operators, are rarely mentioned. (Part 135 operators are commuter airlines and on-demand companies.) And yet it is the inspectors for operations, maintenance, and avionics who can have the greatest positive impact on flight safety or, when absent, the most detrimental.
Between 2019 and 2023, there were 330 accidents involving Part 135 operators. (More than 100 occurred while operating under Part 91 or Part 133. Part 91 are individuals and corporate operators. Part 133 covers rotorcraft external operations.) In 11 of them, the National Transportation Safety Board (NTSB) conducted extensive interviews with FAA inspectors. Such interviews are largely the only way to obtain direct information on inspectors’ feelings about staffing and workload concerns. Their experiences vary, with Alaska standing out with the most severe staff shortages. A common theme is not having enough time to conduct in-person visits.
The market is ready for a 787F. But is Boeing?
Subscription Required
By Scott Hamilton
Jan. 9, 2025, © Leeham News: Boeing will cease production of its important 767F and 777F freighters in two years. Emission rules approved in 2017 by the International Civil Aviation Organization (ICAO) and adopted by the Federal Aviation Administration means these aircraft will be non-compliant beginning in 2028. As a consequence, production must cease.
Concept of Boeing 787-8F converted freighter. Credit: Leeham News.
Boeing has a solution to replace the 777F: the 777X family’s -8F is now targeted for entry into service (EIS) in 2028. Many believe that this date is squishy due to repeated delays in the 777X program. The aircraft still isn’t certified. The lead model, the passenger 777-9, was supposed to enter service as early as December 2019. Now, Boeing hopes to deliver the first -9s in 2026. This date remains uncertain, however.
The 777-8F is the next in the family, followed in 2030 by the ultra-long-haul 777-8 passenger model.
Boeing asked the US Congress for an exemption to allow the 767F, based on the -300ER passenger frame, to continue production after 2027. Congress approved the request. But with no orders after 2027 anyway, Boeing’s new CEO Kelly Ortberg announced in October that the production of the 767F will end in 2027. (Production of the KC-46A US Air Force refueling tanker, based on the 767-200ER, will continue.)
The market is ready for a 787 freighter to replace the 767F. But is Boeing ready to launch a program?
2025 remains another year for recovery in commercial aerospace
Subscription Required
By Scott Hamilton
Jan. 6, 2025, © Leeham News: Don’t look for any dramatic new product launches in 2025.
Nor should you expect any dramatic news, absent global upheaval of some kind.
This year is going to be yet another year dominated by recovery. Recovery from the COVID-19 pandemic, which officially ended in 2022. Recovery by the supply chain. Recovery for Pratt & Whitney’s nearly decade-long problems with its Pure Power GTF engines supplying the Airbus A220, A320 family and Embraer E2 jets. Recovery by Airbus from its production and delivery delays. Recovery by Boeing from its series of self-inflicted crises, now beginning the sixth year.
There is just no getting around the fact that the commercial aerospace industry isn’t a smooth-running industry. It’s a long way from 2018, when all sectors were running smoothly. There is still a long way to go to recovery.
Here’s LNA’s take on what’s to come this year.
A decade to normal? Delivering every airplane in backlog won’t clear debt to 2018 levels
Subscription Required
By Karl Sinclair
Dec. 20, 2024, © Leeham News: In 2018, the Boeing Company (BA) delivered a whopping 806 commercial aircraft to customers.
That year, the corporation declared revenues of $60.715bn at Boeing Commercial Aircraft (BCA) and an operating margin of $7.879bn.
Operating cash flow was $15.322bn and Free Cash Flow (FCF) was $13.6bn.
2016 was the last year that Boeing did not have a negative net debt position (cash and cash equivalents less short and long-term debt).
In 2018, Boeing increased its net debt position by ($4.158bn), year over year, while spending $12.946bn on buybacks and dividends.
It borrowed money to give to shareholders.
Fast-forward to the end of 3Q2024. Boeing was forced to raise $21bn in a stock offering on Oct. 28, with $57.65bn in total debt and a ($47.18bn) net debt position.
How long will it take Boeing to get back to a position where it can invest in a much needed clean-sheet design to replace the beleaguered 737 MAX family?
Lilium on the clock to survival or dissolution
Update, Jan. 4, 2025: A German investment group will pump €200m+ into Lilium, purchasing all its assets.
By Scott Hamilton
Dec. 19, 2024, © Leeham News: Lilium, one of the earliest battery-powered eVTOLs, has two weeks to raise €1m to give it more time to fully reorganize—or on Jan. 1, the company moves into dissolution.
Lilium filed for bankruptcy in the US and insolvency under German law in November. As a German company, its future is governed by much stricter insolvency laws than in the US where bankruptcy laws give the debtor wide latitude and almost unlimited time to reorganize.
Under German law, Lilium has until Dec. 31 to raise €1m to tide it over while substantial funding is raised or a merger with a healthy partner can be arranged.
Lilium has an order and commitment book for more than 700 of its eVTOL, a 6-8 passenger Advanced Air Mobility (AAM) design that is flown by one pilot. The advertised range is enough to fly from New York City to Philadelphia. Lilium calls the AAM an electric jet, but in reality the powerplants are electric motors—a lot of them.
Lilium’s “jet” eVTOL battery-powered aircraft. Credit: Lilium.
But Lilium has gone through $1.1bn. It pays its executives handsomely, with critics complaining that they are way overpaid for a start-up company with no revenue. It purchased the former Dornier executive offices and built three big hangars to house parts and components, pre-production and final production.
Lilium bought the former Dornier headquarters at Munich’s research airport, and built three hangers. Critics point to this expense as an example of overspending. Credit: Lilium.
Critics say Lilium’s design is impractical, far behind schedule, and has yet to undergo meaningful flight testing.
Be that as it may, the company believes that German politics got in the way of approving a $100m Bavarian state loan that was a prerequisite for an equal investment from private sources. The critics say Lilium’s spending and executive pay played a role in Bavaria’s rejection.
“What’s past is prologue.” –William Shakespeare.
Subscription Required
By Scott Hamilton
Dec. 16, 2024, © Leeham News: A new airplane from Airbus or Boeing is years away.
Engines drive whether a new airplane program makes sense. Technology just isn’t “there” yet. In any event, Boeing can’t afford to fund a new airplane program even if it wants to. Furthermore, until its stored inventory of 737s and 787s are cleared, or mostly so, production rates are back to 2018 levels, debt is substantially reduced, and profits and cash flows return, Boeing is mired in recovery from the past. Addressing the future must wait.
Airbus has no incentive to rush into a new airplane program, even if engine technology was available. Its backlogs extend into the 2030s, and it can’t meet the current demand. Production is mired in delays for the A320 and A350 families.
Both companies, and Embraer, remain adversely affected by supply chain parts delays.
Airbus CEO Guillaume Faury previously said he doesn’t see the company moving forward with a new airplane until 2035-2040. Additional insight into the company’s thinking came last month at the Aviation Forum 2024 in Munich, where vice presidents of Airbus’ propulsion and new programs departments outlined what’s ahead.
Boeing, Airbus still struggle with supply chains and personnel shortages
Subscription Required
By Scott Hamilton
Dec. 13, 2024, © Leeham News: It’s been two years since the generally accepted end of the COVID-19 pandemic. But the aerospace industry hasn’t fully recovered. Nor will it do so for some time to come.
Predictions suggest another year or two will be required to restore pre-pandemic employment levels within the supply chain. This isn’t even certain. What is certain is that the impact of inexperienced new hires in the meticulous aerospace requirements will linger on for years to come.
Michael Haidinger, President of Boeing European and Middle Eastern regions. Credit: Boeing.
Michael Haidinger, president of Boeing’s European and Middle Eastern regions, and Juergen Westermeier, chief procurement officer for Airbus, agree challenges remain in the near future.
“There is always a shortage of skilled aerospace talent intensified by the pandemic,” Haidinger said this month at the annual Aviation Forum (2024) in Munich, Germany. “As all the professionals retired, fewer new employees entered the field. Our industry needs more people who not only bring expertise but also embrace the mission of advancing aerospace.”
Haidinger added, “The deficit of skilled engineers, technicians, and other aerospace workers has made ramping up production more challenging. Attracting and retaining talent has become a top priority for us. [We are] with many companies investing in workforce development, partnerships with universities, training programs, and apprenticeship programs.”
Airbus procurement head “convinced” supply chain issues are on right path
Subscription Required
By Scott Hamilton
Juergen Westermeier, head of procurement for Airbus. Source: Airbus.
Dec. 12, 2024, © Leeham News: Airbus wants to sharply increase the production rates of its A220, A320, and A350 lines between now and 2027. This has been a goal since emerging from the COVID-19 pandemic.
However, continuing supply chain issues repeatedly moved the targets to the right. The A220 production rate goal of 14/mo was moved from 2025 to 2026. A dramatic increase in the A320 family rate to 75/mo is now set for 2027, a delay of more than a year. The new production target for the A350, 12/mo, is now 2028.
Increasing the rates is key for Airbus to meet demand and take full advantage of Boeing’s continuing disruptions as it works to emerge from its long-running safety, quality assurance, and production disruptions.
Airbus officials have been frustrated by the repeated delays in ramping up production and obtaining a reliable stream of parts deliveries from the supply chain. Annual delivery goals are challenging to meet and have fallen short of guidance. Airlines and lessors are unhappy over missed delivery dates.
But the head of Airbus’ procurement believes things are, at long last, on the right track.
Juergen Westermeier explained why in an interview with LNA last month during the Aviation Forum 2024 in Munich.
