Instead of progress, Boeing must deal with new crisis of Alaska Flight 1282 on Wednesday’s earnings call

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By Scott Hamilton and Judson Rollins

Jan. 29, 2024, © Leeham News: Twenty-twenty-four will be a crucial year for Boeing.

A door plug blew off a Boeing 737-9 MAX Jan. 5. The company must deal with the fallout on its 2023 year-end earnings call Wednesday. Credit: Capt. Chris Brady.

An unexpected twist is the crisis  from Alaska Airlines Flight 1282, in which a door plug blew off a 737-9 MAX at 16,000 ft. Nobody died, and injuries were light. But the MAX 9 fleet was grounded in the US by the Federal Aviation Administration. The FAA launched a formal investigation into the “quality escape” that is believed to have led to the accident. Last week, the FAA put a freeze on current production rates of the 737 and, for now, killed Boeing’s plans to add a line at its Everett (WA) plant.

Beyond dealing with the 1282 aftermath, Boeing hopes this year to clear its inventory of 737 MAXes and the 787. Clearing the inventories brings cash and some profits. But will this move to the right while Boeing is under even more scrutiny by the FAA?

Boeing planned to be positioned for 2025 to pay down debt incurred during the MAX grounding and the COVID-19 pandemic. Progress toward free cash flow targets of $10bn per year by 2025/26 was forecast at its Nov. 2, 2022, investors day. This is almost certainly inoperative.

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Certifications of MAX 7 and 10 may take hit from 737-9 grounding

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By Scott Hamilton

Jan. 22, 2024, © Leeham News: The grounding of the Boeing 737-9 MAX is likely to delay certification of the 737-7 and 737-10, customers fear.

At a minimum, certification of the 737-7 is likely to shift by months, customers suggest. Certification of the MAX 7 has been repeatedly shifting. Boeing hoped that certification would be achieved in 2022 or 2023. It’s now 2024. In December, Boeing asked the Federal Aviation Administration (FAA) for an exemption to safety standards for a deicing of the leading edge of the composite engine nacelle. There already was opposition from some pilot unions to this request. Now, with the Jan. 5 grounding of the MAX 9 due to the Alaska Airlines Flight 1282 decompression, some believe this exemption won’t be granted.

Flight testing for the MAX 7 is all but done. Boeing hoped to deliver the first MAX 7s to launch customer Southwest Airlines this year.

Flight testing for the MAX 10 is in its early stages. Certification processes were suspended during the MAX grounding, which ended in November 2020. Testing has been slow since because there are only a few MAX 10s available for testing, and due to the slow certification process for the MAX 7. One MAX 10 customer fears certification will be delayed 6-12 months. This would shift deliveries from early 2025 to later in the year or into 2026.

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Outlook 2024: Milestone year for alternative energy development

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By Scott Hamilton and Bjorn Fehrm

Jan. 18, 2024, © Leeham News: Twenty twenty four is 10 years after the Sustainable Aircraft discussions started when Airbus flew its battery-powered E-Fan before the world’s OEMs and press in July 2014 at the Farnborough Air Show.

The time that has passed is longer than the normal development time for a new aircraft, and what have the hundreds of projects that started in the wake of the E-Fan achieved? We have one new two-seat trainer, the Pipistrel Velis Electro, in production, but not much else.

 

 

 

 

 

A typical urban air mobility vehicle concept.

There has been no lack of electric airplane project announcements, one more fanciful than the other. Operational ranges and economics that will enable the replacement of the typical regional turboprops have been presented, but the two functional demonstrators we have in the air that go beyond nine seats are hydrogen fuel cell aircraft, not battery-electric or hybrid electric.

We have hybrid five and nine-seat commuters flying in prototypes, and a couple of hybrids will start production during the year. These will reach the market in 2025 or 2026, but how operationally viable these is still not clear. But beyond nine seats, there are only plans, no projects that plan to fly prototypes this year or next.

The one-battery electric project, Eviation Alice, flew once, then packed up, declaring we needed better batteries. It’s clear the job of exchanging the hydrocarbon combustion engine for aircraft is much harder than thought. The problem is that aircraft are supposed to fly for hours, and the energy density of normal fuel is still 50 times higher than for batteries.

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ZeroM, Airbus’ effort to reduce traveled work

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By Scott Hamilton

Jan. 16, 2023, © Leeham News: Traveled work is the bane of any airplane manufacturer’s production line.

“Traveled work” is when parts are unavailable when the plane is in final assembly. To keep production moving, the manufacturer—whether it’s Airbus, Boeing, Embraer, or some other firm—notes the missing item and continues production. The airplane is rolled off the line and the work is finished on the ramp when the part becomes available.

Jurgen Westermeier, Airbus Chief Procurement Officer. Credit: Airbus.

The OEMs (Original Equipment Manufacturers) approach the issue differently. Some prefer the parts to arrive “just in time,” which keeps inventory to a minimum. This reduces cash outflow.

But just in time creates the problem of missing parts. One time, Airbus was assembling A320s, and USB ports failed to arrive while planes were on the assembly line. The ports had to be installed later—traveled work.

Another option is to create an inventory. But to minimize the cash commitment, and the space taken up by inventory, the OEMs limit the supply. Airbus, for example, has a “buffer” of between a few weeks and a few months, depending on the parts.

Airbus also attacks the challenge with a program called ZeroM. LNA met last month with Airbus’ chief procurement officer (CPO), Jurgen Westermeier, on the sidelines of the Aviation Forum in Hamburg. He explained ZeroM and how it works. Below is a transcript of our meeting. It has been edited for clarity and space.

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Outlook 2024: Can ATR finally achieve its production target?

By Judson Rollins

Jan. 15, 2024, © Leeham News: For the second year in a row, ATR fell short of its stated production targets.

ATR delivered just 25 new aircraft in 2022 and 35 in 2023. The latter was five short of its stated target. In early 2023, the manufacturer said supply chain and staffing shortages were the two main reasons for its 2022 shortfall. It has not yet discussed what went wrong last year.

At last year’s Paris Air Show, ATR said it wants to deliver 80 aircraft per year by 2026. However, this seems unrealistic given the OEM’s current order book of 176 aircraft, according to recent data viewed by LNA.

ATR STOL test aircraft. Source: v1Images.com.

Summary
  • Turboprop demand forecasts seem questionable.
  • ATR is delaying its timeline for a new eco turboprop.
  • Progress continues on a future STOL variant.

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2024 Outlook: A Mixed Bag for Propulsion OEMs

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By Chris Sloan and Gordon Smith

January 11, 2033, © Leeham News: In 2023, a slew of problems plagued propulsion providers, with Pratt & Whitney’s GTF Engine and supply-chain shortcomings grabbing the bulk of negative headlines and customer complaints. There were bright spots for all the big three with a slew of significant orders, emerging technologies, and critical management shifts.

As the calendar turns to 2024, all eyes will be on a return to fulfilling enormous backlogs, supporting OEM production rate increases, and returning GTF-propelled planes to the skies – while edging towards new technologies, both incremental and revolutionary.

Summary
  • Pratt and its operators navigate massive AOGs (aircraft on ground) and unhappy customer claims for its GTF.
  • The GTF Advantage closes in on EIS.
  • GTF maladies open the door to a possible new platform, the long-mooted Airbus A220-500.
  • The X66A Tranonic-Truss-Braced Wing offers promise for both Pratt’s GTF and GE’s future RISE engines.
  • GEnx and GE-9X win blockbuster campaigns on the 787 and 777X as the 777X hurtles toward certification.
  • CFM’s LEAP goes from strength to strength on the heels of MAX orders and 737-7 and 737-10 certification and entry-into-service.
  • Fixing LEAP durability and delivery challenges.
  • Rolls-Royce Trent troubles continue to draw the ire of customers.
  • UltraFan testing moves forward in Roll’s quest to build a next-generation engine platform for the 2030s. Read more

Managing supply chain stress continues

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By Scott Hamilton

Jan. 9, 2024, © Leeham News: The COVID-19 pandemic impact on aerospace and its supply chain was deep and long lasting. The airframe and engine manufacturers haven’t fully recovered. Part of the reason is that the supply chain hasn’t fully recovered, either.

LNA attended the Aviation Forum in Hamburg, Germany, last month. On the sidelines of the event, we met with Jurgen Westermeier, the chief procurement officer for Airbus. We discussed the supply chain and other issues. The following is a transcript of this interview. It has been edited for space and clarity.


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Outlook 2024: Embraer’s continued recovery

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By Bjorn Fehrm

January 8, 2024, © Leeham News: Embraer was hit by a double whammy before and during COVID. The non-closure of the merger of Boeing’s and Embraer’s Commercial Aircraft Divisions and the halving of its E-Jet deliveries during COVID. The year that passed marked the recovery from the extra cost and effort of the non-merger and an increase in E-Jet deliveries and orders.

It was also a progress year for the EVE eVTOL venture, with Embraer finalizing design and starting prototype production. Despite the EVE lagging behind other programs by about a year, the customers believe it’s one the most viable programs. Eve doubles the preorders of the nearest competitors.

The past year will also be seen as the break-trough year for the KC-390, Embraer’s bet to replace the venerable Lockheed-Martin C-130 military airlifter. The customer list went from three to five, with more country air forces in serious negotiations for the KC-390.

Summary:
  • The E-Jets are trending back to normal volumes with better margins.
  • EVE is the best-selling eVTOL, as operators trust Embraer’s knowledge and support.
  • The KC-390 is on its way to capture a big slice of the C-130 Hercules replacement marker.

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Outlook 2024: Boeing needs a boring year in 2024

By Dan Catchpole

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Jan. 4, 2024 © Leeham News: Boeing’s priorities in 2024 are clear: get the job done on time and without drama, and don’t cause any scandals. In short, it needs a boring year. However, to do that, the aerospace giant has to overcome several obstacles.

Boeing Commercial Airplanes has to increase production rate goals, sign a new labor contract and help suppliers along. That means going against Boeing management’s cultural predilection for extracting concessions from unions and contractors.

Defense is a mess, and there’s little reason to think it will improve much this year. Several fixed-cost programs are bleeding money. Boeing is competing for three major United States Department of Defense programs, but it is not favored to win any of them. This year, leadership is expected to focus on controlling costs.

A new position of executive vice president and chief operating officer for The Boeing Co. was created last month. Stephanie Pope, previously CEO of Boeing Global Services, was named to fill this slot. She’s an unknown to some customers and hasn’t run a company approaching the size of Boeing. She’ll have to prove herself in this new position of greater responsibilities than she’s ever had.


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Summary
  • BCA has to smoothly increase production rates.
  • Sign a new contract with Machinists.
  • Staunch the bleeding at Boeing Defense, Space and Security.

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Outlook 2024: European airline consolidation

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By Gordon Smith

January 3, 2024, © Leeham News: Consolidation is certainly in the air. Even before the shock announcement on December 3 that Hawaiian and Alaska are planning to tie the knot, the industry was gripped by the ‘will-they, won’t they’ saga of the proposed JetBlue and Spirit deal.

Although it’s US carriers that have been making headlines, the European airline market is experiencing its own flurry of mergers and acquisitions. This is a topic LNA covered at length pre-pandemic (Our backgrounder is available here).

At the time of this writing, big changes are happening at three of the continent’s best-known flag carriers. Significant shareholdings in ITA Airways (formerly Alitalia), TAP Air Portugal, and SAS Scandinavian Airlines are changing hands, with Europe’s aviation supergroups spying an opportunity to expand their respective empires.

Tapping into the latest data provided to LNA from aviation data analysts Cirium, we can get a better understanding of what these changes could mean for existing fleets and upcoming airliner deliveries.

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