Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 18. April 18, 2025
- Natilus: Composite BWB, entry-into-service by 2029, 570 on order April 17, 2025
- China bans Boeing, US parts imports in tariff war April 15, 2025
- Boeing welcomes COMAC competition as Asia-Pacific demand soars April 15, 2025
- How good is the C929? April 14, 2025
JetZero sees big sales potential, but consultants say it won’t be them to bring BWB to market
By Scott Hamilton
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JetZero Z4 commercial BWB and USAF tanker concepts. Credit: JetZero.
Feb. 10, 2025, © Leeham News: There will be a surge in aircraft replacement requirements as today’s Airbus A320neos and Boeing 737 MAXes age. Simultaneously, the seating capacity of aircraft is increasing, says Michel Merluzeau, the Head of Sales Engineering and Market Development for the start-up company JetZero.
JetZero is developing the first commercial blended wing body (BWB) aircraft, a 250-plus seat design with a goal of reducing fuel consumption by 50% over the remaining Boeing 767s and Airbus A330ceos still in operation.
Merluzeau joined JetZero last year after decades as a consultant in commercial and defense aerospace sectors. He spoke last week to the annual conference of the Pacific Northwest Aerospace Alliance in a Seattle suburb.
The replacement forecast and the up-gauging will open a replacement market for at least 7,000 aircraft, Merluzeau said, for which JetZero’s Z4 concept is designed.
Hopes, skepticism, for Boeing from suppliers
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By Scott Hamilton
Feb. 6, 2025, © Leeham News: Hope and skepticism for Boeing permeated the sidelines of a suppliers’ conference this week in the Seattle area as the big manufacturer struggles to regain footing following six years of back-to-back-to-back crises.
Boeing’s CEO Kelly Ortberg said on Jan. 28 that the company is on a path with the Federal Aviation Administration to achieve a production rate of 38/mo for the 737 MAX later this year. Afterward, rates would increase in increments of 5/mo every six months. At this rate, production won’t return to the pre-MAX grounding production of 52/mo until the fall of 2027.
But suppliers at the annual Pacific Northwest Aerospace Alliance (PNAA) conference this week interviewed on the sidelines think Boeing won’t hit rate 38 until late next year. If Boeing then could ramp up in increments of 5/mo thereafter, the pre-grounding production rate would be achieved in the fall of 2028, nine years after the MAX was grounded.
Suppliers think the ramp up rate is also optimistic.
Ihssane Mounir. Boeing photo.
But at the PNAA conference, Ihssane Mounir detailed Boeing’s new approach to the supply chain, safety and quality Boeing has adopted since the grounding and after the Jan. 5, 2024, accident involving a door plug separation from an Alaska Airlines 737-9 MAX. Mounir is the Boeing Commercial Airplanes (BCA) senior vice president of Global Supply Chain & Fabrication.
The same suppliers who are skeptical of the ramp plans express hope and optimism of BCA’s plans to return to normalcy.
A few also expressed residual anger toward Boeing over the six years of lurching from one crisis to another that disrupted business.
One supplier noted that it received no tooling orders for years because of the disrupted production and the absence of a new airplane program.
Boeing FY 2024: Capital raise, debt, order cash advances helped Boeing avoid running out of cash in 4Q
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By Karl Sinclair
Note: Boeing has not released its Securities and Exchange Commission filing (10-K) for the full year. Much of the analysis contained herein is based on press releases and previously filed statements, exact figures being unavailable and noted as such. A section of the analysis will also be based upon comments by CEO Kelly Ortberg and CFO Brian West, taken from the Jan. 28 earnings call. LNA reached out to Boeing and was told that the annual report was to be filed later today.
Feb. 3, 2025, © Leeham News: Financial documents reveal that The Boeing Company (BA) needed to make some very astute financial moves during 2024 to avoid running out of operating capital in the fourth quarter.
It did so by tapping into three sources: lenders, investors, airlines, and lessors (purchasers).
At the end of 2023, Boeing indicated on its Consolidated Statement of Cash Flows an ending balance of $12.691bn in cash and equivalents as of December 31, 2023.
Free cash flow (FCF) for 2024 was ($14.31bn), with ($4.098bn) used in 4Q2024 alone.
If Boeing does not make these moves, then cash burn ($14.31bn) will outstrip cash and equivalents of $12.691bn in the fourth quarter, and Boeing must dip into its revolving line of credit.
Boeing needed capital, and it needed it fast.
Boeing sees achieving pre-MAX grounding production rates 8 years later
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By Scott Hamilton
Jan. 30, 2025, © Leeham News: When Airbus began to record more orders than Boeing in the early 2000 decade, Boeing’s CEO dismissed the shift.
Orders didn’t matter, sniffed Phil Condit. Only deliveries mattered. The statement ignored the obvious: if you didn’t have orders, you wouldn’t have deliveries.
For much of the past two decades, Airbus has been delivering more airplanes than Boeing. According to both companies’ forecasts, this trend will continue in the heart of the market in the coming years by a wide margin.
Deliveries of the 737 MAX are key to Boeing’s financial recovery. The cash flow and profits from the MAX line will drive Boeing’s ability to develop a new airplane. (This does not ignore the necessity of Boeing’s defense unit to get its financial house in order.)
Kelly Ortberg, Boeing’s CEO, appeared on the financial news network CNBC this week and said Boeing hopes to return to a production rate of 38/mo in the second half of this year.
“I’m not going put a date on when we need to get to rate 38 and get approval for the FAA to go beyond,” he said. “It’s more important that we do this right; we have a stable production system, we get through that, and I expect by the second half of the year, we’ll have that approval, and we’ll be moving to a higher production rate.”
Rate breaks in 5 every six months
Ortberg added, “Well, we’re planning to be at about 38 a month for the balance of this year, ramping up, and we’ll go in five-step increments every six months after that. On 787, we’re at five a month rate, moving to seven a month rate…hopefully, that’s in the next quarter or so.”
The 737 data can be extrapolated to suggest Boeing will return to the pre-MAX grounding rate (52/mo) in the first half of 2027. (Others are skeptical, and the ramp-up appears aggressive.) This would be eight years after the MAX was grounded on March 10-13, 2019, for what turned out to be 21 months.
Boeing was on its way to a rate of 57/mo by the end of 2019. Under the Boeing plan, this rate won’t be achieved until the end of 2027. If Boeing still believes demand supports this rate, a higher rate of 63/mo that was planned pre-grounding would follow in 2028.
Airbus will also increase its production rate. Production and delivery forecasts appear to place Boeing at a permanent distant second to Airbus as long as the competitors are the A320neo and 737 MAX.
777 P2F market grinds to a halt: lack of feedstock, Boeing, war, money to blame
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By Scott Hamilton
Jan. 27, 2025, (c) Leeham News: Boeing’s inability to deliver 787s on time and continued delays in certification of the 777-9 mean airlines planning to replace aging aircraft or expand must retain older aircraft longer than expected.
Airbus’ inability to deliver the A350 on planned schedules also affects fleet renewal and expansion plans, but to a much lesser extent than caused by Boeing.
IAI’s Big Twin Boeing 777-300ERF. Credit: IAI.
Boeing’s circumstances also mean that feedstock intended for conversions of 777-300ERs from passenger aircraft to freighters upset the business models of the three P2F conversion companies: IAI Bedek, KMC, and Mammoth Freighters.
Finally, certification of IAI’s conversation program is running two years behind schedule, and Boeing’s reluctance to license critical flight control software has also stalled P2F programs.
In addition to the problems outlined above, the inability to convert the big twin 777-300ER to freighters or receive new 777-8Fs and A350Fs in the coming years means that 747-400 freighters, which are gas-guzzlers by today’s standards and expensive to maintain, must remain in service longer than planned.
It’s a bleak picture emerging for the near- to-mid-term freighter market.
Earnings: Pay closer attention to the supply chain than to the OEMs
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By Scott Hamilton
Jan. 23, 2025, © Leeham News: Earnings season begins today. Among the companies followed by LNA, GE Aerospace and Hexcel report today. RTX and Boeing report next week. ATI and Spirit AeroSystems follow the week after. Other suppliers follow then.
Airbus doesn’t report until Feb. 20. Rolls-Royce reports on Feb. 27.
The manufacturers draw the headlines, but LNA found long ago that the supply chain often provides better information to draw conclusions about the future than listening to the OEMs. All it takes is one supplier to fall down on the job to muck up the works for the OEMs.
That’s not to say listening to the OEMs is not important. Clearly, it is. But there’s just no getting around it: the credibility of many of the OEMs is damaged. Airbus hasn’t hit its production ramp up targets in years. Quality control suffers. And deliveries are consistently late.
Steven Udvar-Hazy, executive chairman of the board for Air Lease Corp, says that every single Airbus aircraft, 250 of them, has been late since 2017. That’s long before the pandemic began in March 2020, which caused such disruption continuing to this day. Airbus was still delivering A320ceos during 2017 and 2018, which didn’t have engine issues.
Boeing’s credibility speaks for itself. It doesn’t matter that it has a new CEO. Until Boeing starts performing, anything it currently says is hope, not performance. Post-strike delivery recovery will be an important indicator of Boeing’s performance in the essentially truncated fourth quarter and January.
Suppliers often discuss information on their earnings calls that provides a better understanding of production rates at the OEMs and where downstream issues are or are emerging.
A321neo continues upward market share; good luck hitting rate 14/mo for the A220
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By Scott Hamilton
Jan. 20, 2025, © Leeham News: The A321neo continues its climb as the dominant single-aisle airplane in the Airbus family.
Figure 1. Airbus A321neo deliveries overtook all its single-aisle deliveries beginning in 2023 and continued to climb last year. Credit: Leeham News.
Given Boeing’s continued inability to deliver its 737 MAX single 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.
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
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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.
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FAA understaffing affects air operations oversight; NTSB falls short, too
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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?
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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?