Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Teamsters, Boeing have a new contract April 29, 2025
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
The Small Airliner Problem, Part 10. Cash costs for a battery-based airliner
Subscription required
By Bjorn Fehrm
July 6, 2023, © Leeham News: In our series on costs factors that make up Cash Operating Cost for a battery-based airliner with range extenders, we now add Crew costs and Airport/Airway fees.
We then have all the components of the Cash Operating Cost (COC) for the ES-30 and can compare it to a normal propulsion 30-seat turboprop.
Figure 1. The Heart Aerospace ES-30 hybrid 30-seat airliner. Source: Heart Aerospace.
Summary:
- The high operating weight and slow speed of a battery airliner increase the Airport/Airway fees and Crew costs for the ES-30.
- In summary, only one Cash cost remains competitive, and the COC total exceeds the cost of a 30-seater turboprop.
P2F conversion constrained by feedstock, certification issues
Subscription Required
By Judson Rollins
July 3, 2023, © Leeham News: As the supply chain chaos of the past two years finally winds down, the air cargo industry is trying to prepare for future growth.
IAI’s first 777 converted freighter, intended for Kalitta Air, has not flown since its initial testing flight on March 24. Source: IAI.
However, in an ironic twist, the industry’s near-to-intermediate term runway is constrained by some forces that propelled its supernormal profitability during the pandemic and recovery.
Thanks to growth in e-commerce, many industry observers revised their long-term growth forecasts upward. Cargo traffic growth estimates vary widely, from Cirium’s conservative 20-year expectation of 3.0% per year to Boeing’s optimistic call for 4.1% annually through 2042.
This year’s demand environment is less rosy as global trade falters, seaport backlogs have mostly cleared, shippers of high-value industrial goods suffer from microchip and other key commodity shortages, and recovering passenger airline service drives a glut of lower-deck “belly” capacity on most trade lanes.
The International Air Transport Association (IATA) recently said it expects air cargo demand to fall by 3.8% and revenues to contract by one-third for the full year. Cargo volumes were already down 5.3% year-over-year through April, said IATA.
Summary
- Express carriers are most exposed to short-term pain, but long-run prospects are brighter.
- Non-express carriers continue to be hard hit by excess capacity.
- Freighter conversion feedstock supply is tight.
- 777 P2F conversion slowed by possible certification issues; Boeing poised to sell more 777Fs?
The Small Airliner Problem, Part 9. Maintenance costs for battery airliners with range extenders
Subscription required
By Bjorn Fehrm
June 29, 2023, © Leeham News: In our series on fundamental costs factors that make up Cash Operating Cost, COC (Fuel, Maintenance, Airway/Airport fees, Crew costs) for new Green airliners, we have analyzed the energy costs and now move on to the maintenance costs.
For a battery-based airliner with range extenders, it’s a complex mix of battery and gas turbine costs.
Figure 1. The Heart Aerospace ES-30 hybrid 30-seat airliner. Source: Heart Aerospace.
Summary:
- The maintenance costs for a battery-based airliner are high. It’s the batteries that cost, not the electric motors.
- Adding range extenders complicates the propulsion system and adds further costs.
Striking Machinists to vote Thursday on revised contract offer from Spirit
Striking Machinists Union members outside the Spirit AeroSystems plant in Wichita, KS./ Wichita Business Journal photo
(Subscription required)
By Bryan Corliss
June 27, 2023, © Leeham News – Striking Machinists Union members at Spirit AeroSystems in Wichita will vote Thursday on a new contract offer from the company.
“The parties have reached a tentative agreement with the unanimous support of the entire Local 839 bargaining committee,” the union said Tuesday.
The tentative deal, which comes after three days of meetings between Spirit and union negotiators with a federal mediator, replaces the original offer rejected on June 21. Spirit shut down production at the Wichita plant the next day, and the union began picketing outside the factory on Saturday.
Spirit CEO Tom Gentile said his team “listened closely and worked hard in our talks over the last several days to further understand and address the priorities of our IAM-represented employees.”
Senior regional leaders of the International Association of Machinists are strongly recommending the deal.
“The contract is an industry-leading agreement that should make our members extremely proud,” IAM Southern Territory General Vice President Rickey Wallace and his chief of staff, Craig Martin, said in a statement released by the union.
A quick resolution to the walk-out would benefit Boeing. The Spirit plant in Wichita provides 70% of Boeing 737 aerostructures, along with nose sections for all other Boeing aircraft. It also provides components for the Airbus A220.
Thursday’s vote would require a simple majority for ratification. If it fails to get majority support, the strike would continue.
- Deal walks back unpopular health plan changes
- Bigger raises, reduced signing bonus
- Contract would end mandatory weekend overtime
- Union announced vote after meeting with stewards
Analysis: What went wrong in Wichita for Spirit and IAM
Striking members of Machinists Union Local Lodge 839 outside the Spirit AeroSystems plant in Wichita, Kans./Photo by The Wichita Eagle
Subscription Required
By Bryan Corliss
UPDATE: The two sides will continue talks with a federal mediator on Monday. In a statement, Spirit AeroSystems CEO Tom Gentile said the negotiating teams “have been working hard and making good progress.”
“We will continue discussions this week and remain committed to a timely resolution on a fair and competitive contract that addresses the priorities of our employees and other stakeholders,” he said.
Local 839 negotiators told their members that “with the mediator’s help, we are progressing toward getting another offer to the membership for consideration.”
June 26, 2023, © Leeham News – Strikers in Wichita broiled under a hot summer sun this weekend, as the International Association of Machinists’ strike against Spirit AeroSystems got under way.
The good news, for everyone who’s watching in the North American aerospace industry, is that the two sides resumed talks Saturday, with the help of a U.S. federal mediator.
This walk-out caught a lot of us by surprise. Insiders I talked with before the vote didn’t expect a strike. Equity analysts confidently projected the risk of strike as “very low.” Spirit itself must have been confident, because it sent much of its senior leadership team to Paris for the air show.
So what went wrong? Clearly both Spirit management and the union’s negotiating team misread the mood, and badly.
We took a deep dive into what workers are saying on social media about the contract. As we’ve noted in the past, social media posts aren’t the same as scientific surveys, but they do give some insight into the mood in Wichita.
And what they reveal is that there was a lot of frustration around some specific issues, which was exacerbated by the fact that IAM Local Lodge 839 had been locked into its recently expired contract for 13 years, during which pay and benefits stayed the same inside the factory, while literally the whole world changed outside it.
- Workers didn’t like many contract specifics
- No way to predict how long strike will last
Spirit AeroSystems and Machinists Union return to negotiations Saturday
Subscription required
By Bryan Corliss
June 23, 2023, © Leeham News — Negotiators for Spirit AerosSystems and International Association of Machinists Local Lodge 839 will resume negotiations Saturday, in hopes of reaching an agreement that would resolve a strike set to begin just after midnight tonight.
A Wichita Eagle photo of orange security fencing up around the Spirit AeroSystems plant in Wichita, Kan.
The meetings, which will include a federal mediator, will start about 10 hours after the walkout begins.
The strike, involving some 6,000 union-represented hourly workers at Spirit’s Wichita plant, threatens significant disruption to the wider aerospace industry — particularly at Boeing. The Wichita plant produces 70% of 737 aerostructures, along with the forward sections of all Boeing commercial jets.
It comes after workers rejected a proposed four-year deal on Wednesday, with 79% voting no and 85% voting to strike.
- Company: Two sides have been talking
- Worker: ‘Feathers on a dog don’t make it a chicken’
What’s the Green aviation news at Paris 2023?
Subscription required
By Bjorn Fehrm
June 22, 2023, © Leeham News: Every announcement from aircraft deals, OEM updates, or supply chain news now has the words Sustainable/Sustainability injected in every second sentence. It doesn’t matter what the subject is; if it’s about a gas-guzzling way of transporting people at supersonic or even hypersonic speeds or at the other end in an eVTOL which is only as fast as your car on a US highway.
What is the real news about making our air transport system less polluting behind this misuse of the buzzwords? You have to search behind the headlines and the announcements that you know will not turn the dial. Let’s tour the Paris Air Show 2023 and look at the real developments in Sustainability.
Figure 1. First flight of Universal Hydrogen’s DH8-300 with a hydrogen propulsion system on the starboard side. Source: Universal Hydrogen.
Summary:
- The waves of Green propulsion solutions with inflated claims have calmed down.
- It’s replaced with operationally usable solutions that deliver tangible emission gains.
Update: Spirit shuts down 737 lines after Machinists Union votes to strike
By Bryan Corliss
June 21, 2023, © Leeham News – Machinists Union members at Spirit AeroSystems in Wichita have overwhelmingly rejected a proposed four-year contract, setting the stage for a strike.
The contract between Spirit and IAM Local 839 expires at 12:01 a.m. Saturday. However, Spirit said Wednesday night that it would shut down production starting with Thursday’s first shift.
IAM members were not to report to work Thursday, the company said. They will get paid for their regular shifts, but all overtime is canceled.
Local 839 said that 79% of union members who cast ballots voted to reject Spirit’s offer, and 85% voted to authorize a strike.
“Most of our members have concluded the company’s offer is unacceptable,” union officers said.
Spirit leadership said it was “disappointed” by the outcome.
“We know that no one wins in a work stoppage; however, we respect the rights of our represented employees,” it said in a statement. “Despite this setback, we are not distracted from the task at hand. We look forward to continued meetings with IAM leadership.”
In a statement to Wichita-area news outlets, union officers said they would “regroup and begin planning the following steps to bring the company back to the table.”
There was no word Wednesday night whether the two sides had plans to meet.
A strike at Spirit would have significant ramifications throughout the aerospace industry. The company supplies Boeing with 70% of the aerostructures for the 737, and without those fuselages coming by train from Kansas, work at Boeing’s Renton factory will eventually come to a halt, impacting airlines who are expecting jets, as well as other suppliers who provide parts, components and subassemblies for Boeing’s best-selling commercial aircraft. Spirit also builds the nose sections for the 787, 767 and 777.
Related article
The union’s negotiating committee had recommended approval on the Spirit offer, which it received on Friday.
However, the contract seemed in trouble during a Wednesday morning union meeting, prior to the vote. The Wichita Eagle reported that workers made paper airplanes out of the pages of the contract summary, and covered the floor of the arena where they were meeting with them. In addition, Wichita station KWCH-TV published a photo of its website of workers wearing t-shirts emblazoned with the message “That’s a Big No.”
- Contract offered 34% more pay over four years
- Workers had gone 13 years without a new contract
Machinists Union members at Spirit to vote on four-year contract this week
Subscription required
By Bryan Corliss
June 19, 2023, © Leeham News – Roughly 6,000 Machinists Union members at Spirit AeroSystems in Wichita will vote Wednesday on a proposed four-year contract that would significantly increase pay for hourly workers.
The bargaining committee for IAM Local 839 is recommending that its members accept the deal.
“This is not an easy decision, but it is one that we believe is a good one,” the committee wrote in a letter to members on Friday.
It noted, however, that “the decision to accept or reject this offer is up to the membership,” and added that however the vote goes, the leadership “stands 100%” behind what the members decide.
At least some of those members are vocally urging the deal be rejected.
“How on earth did you think this is an offer we should accept?” one worker wrote on Local 839’s Facebook page. “You have betrayed us.”
The current contract expires just after midnight Friday, June 23.
- Offer on its face is generous
- Comes after 13 years without a new contract
- Industry-wide ramifications should a strike occur
Bjorn’s Corner: New aircraft technologies. Part 17P. Airframe with lower induced drag
Subscription required
June 16, 2023, ©. Leeham News: This is a complementary article to Part 17. Airframe with lower induced drag. It discusses in detail the simulations we have done on a Truss Braced Wing, using our Aircraft Performance and Cost model to compare it to today’s wings and alternative future concepts.