Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing’s 737 North Line and the Everett factory: in transition now June 9, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 25. June 6, 2025
- New RISE powerplant benefits from decades of GE research and development June 5, 2025
- Engine makers emphasizing durability, reliability June 4, 2025
- Boeing CEO: Lessons learned are key to certification of 737-7/10 and 777X June 2, 2025
Pontifications: Some Boeing product development engineers reassigned to 737, 787 lines to fix problems
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By Scott Hamilton
Nov. 21, 2022, © Leeham News: When Boeing CEO David Calhoun told his audience at the Nov. 2 investors day (and all those watching on the web) that there will be no new airplane introduced until the middle of the next decade, it was a shocker to some.
Wall Street analysts and investors loved the news. There would be no spike in research and development spending. Free Cash Flow—which is seemingly all that matters to analysts—was forecast to be $10bn by 2025-2026. Returning money to shareholders seemed to be restored as Boeing’s No. 1 priority. The stock price went up 18% in the week after the news.
Calhoun said there would not be a new engine before the middle of the next decade that would support the development of a new airplane. Calhoun ignored advances in airplane/wing design as a contributor to reducing fuel burn, however.
But, as the late radio commentator Paul Harvey used to say, “now, for the rest of the story.”
Since the Nov. 2 investors day, the first since 2018, LNA quickly learned that there was more than expressed at the investors day event.
Summary
- While officials pointed to continuing production challenges, mostly fingering the supply chain, this is only part of the story.
- Quality control slipped not only at the Charleston 787 factory, as has been widely reported. It remains an issue even today.
- Quality control is also a problem at the 737 Renton and 767 Everett factories.
- Quality declined in part because there are so many new hires to replace retirements, early buyouts, and layoffs. These new hires have a learning curve required that slows production and makes quality control challenging.
- Product Development engineers diverted to 737 and 787 production to resolve issues.
In the meantime, Calhoun purchased 25,000 shares of stock on Nov. 8 for approximately $3.87m. Insider purchases like this typically send a message to Wall Street and stockholders that the CEO (or whomever) has confidence in the company’s future.
The economics of a 787-9 and A330-900 at eight or nine abreast
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By Bjorn Fehrm
Introduction
Nov. 16, 2022, © Leeham News: Over the last weeks, we have looked at the economics of our typical long haul widebodies when fitted with normal and high-density seating.
We continue this series by comparing the Boeing 787-9 and Airbus A330-900, when both fly eight or nine abreast economy cabins. As before, we fly the world’s busiest long-haul route, London Heathrow, to New York JFK and look at the comfort and economic data.
Summary
- The 787-9 is the more capable aircraft with about 700nm longer range than the A330-900.
- The economics of the two on routes both can fly is close. It comes down to cabin layouts.
With Boeing’s decision against new airplanes, Airbus will stand down, too
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By Scott Hamilton
Kiran Rao. Credit: Airborne Capital.
Nov. 14, 2022, © Leeham News: Boeing’s decision to suspend the launch of any new airplane until the middle of the next decade means innovation of any kind from any company is largely dead for the next decade.
Airbus won’t launch a new airplane either, now that Boeing has stood down, says its former chief strategic officer, Kiran Rao. Rao is now an advisor to airlines and lessors. He had been with Airbus for 25 years in sales and product strategy.
While Boeing’s decision to suspend new airplane development casts a dark cloud over its strategic future, Airbus now is going to rest on its own status quo, Rao said.
Summary
- Airbus engineers will atrophy.
- Boeing was “one step away from checkmate” against Airbus in 2005-2006 and made a big mistake not taking up the opportunity.
- GE and Safran don’t want to innovate. Pratt & Whitney can’t do much beyond today.
- Boeing should have launched the NMA. It would have beaten the A321XLR.
- The NMA would have created a new market.
The A350 enhancements, Part 3
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By Vincent Valery
Introduction
A350 Fuselage, Credit: Airbus
Nov. 10, 2022, © Leeham News: Last week, we saw the impact of the New Production Standard (NPS) on the Airbus A350-900’s economic performance against the Boeing 787-10. While using a ten-abreast economy class cabin configuration negatively impacted passenger comfort, it significantly improved the relative competitiveness of the A350-900.
We now turn our attention to the larger variant that will benefit from the NPS, the A350-1000, and compare it against its closest competitor, the 777-9.
Summary
- Future major large-twin sales campaigns;
- Comparing aircraft cabins;
- The extra seat changes the economic pecking order;
- It is not all about unit costs.
Excluding China in Boeing forecast recognizes trade, geopolitical realities
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By Scott Hamilton
Nov. 8, 2022, © Leeham News: Boeing CEO David Calhoun last week said Boeing’s future through at least 2025/2026 doesn’t include assuming China is part of its equations.
It’s a good thing. Relations between the US and China are heading south. The Pentagon last week outlined an extremely pessimistic outlook pointing to future military conflict with China. The Biden Administration not only didn’t reverse tariffs imposed in 2017 by the Trump Administration, but in some respects, Biden upped the game.
Related Article
Boeing started remarketing 737 MAXes ordered by China. It also began taking engines off those airplanes to put onto new production aircraft. Boeing—and others—don’t see China taking any new deliveries from China in the next two or three years or placing orders with Boeing.
Michael McAdoo of Boston Consulting Group. Credit: Leeham News.
Trade publication Airfinance Journal reported Oct. 31 that nearly one in five leased aircraft owned by Chinese lessors are being offered for sale to non-Chinese interests. LNA previously reported that Chinese lessors were being allowed to accept a small number of MAXes providing they were leased outside China.
A trade expert for Boston Consulting Group outlined how he sees relations between China, the US and Europe in an Oct. 26 interview with LNA.
Summary
- China considers the US to be the enemy, one well-placed observer notes.
- The US, EU see China differently.
- Airbus has a window of opportunity.
How Boeing can pursue new airplane sooner than 2030 decade
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By Scott Hamilton
Nov. 7, 2022, © Leeham News: Boeing is methodically working through the full return of the 737 MAX to service, a process that will continue to early 2025 to clear the stored inventory. There were 270 stored MAXes at the end of the third quarter, Sept. 30.
David Calhoun. Source: Boeing.
Delivering 115 787s that were built but stored during a pause of nearly 20 months from October 2020 will also take two years to complete.
Ramping up production of each line is a slow, arduous process. The 737 line was shut down in December 2019. The line now is geared to produce 31 737s a month, though meeting this target has been erratic.
The 787 line in Everett was shut down permanently and the Charleston (SC) line was reduced to just half an airplane per month. It will be a couple of years before production returns to 5/mo, the level at the start of the pandemic and reduced when deliveries were suspended.
CEO David Calhoun said stability and reliability are keys to Boeing’s recovery from the MAX and pandemic crises that sapped finances and all but destroyed a once-sterling credibility.
Calhoun also said he has no plans to launch an airplane program to fill a gap in the product line—a reference to Boeing’s weak position vis-à-vis the Airbus A321neo. Rather, he wants to launch a game-changing airplane that at a minimum is 20% more efficient than today’s aircraft. He believes engines coming off today’s technology will only host a 10% gain.
He added that Boeing won’t launch a new airplane program until the next decade because a new engine won’t be ready until then. He made his remarks at the first investors day since 2018. Three weeks before that, Boeing hosted a meeting with advisors, consultants, and opinion makers.
Bjorn’s Corner: Sustainable Air Transport. Part 44P. eVTOL operating costs. The deeper discussion.
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By Bjorn Fehrm
November 4, 2022, ©. Leeham News: This is a complementary article to Part 44, eVTOL operating costs. It discusses the typical operating costs we can expect from an eVTOL when used in an air taxi operation.
Despite the operation of such transports being years off, an eVTOL has dominant cost factors that can be estimated today.
The A350 enhancements, Part 2
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By Bjorn Fehrm
Introduction
Nov. 3, 2022, © Leeham News: Last week, we described the New Production Standard (NPS) of the Airbus A350. Now we look at the economic performance of the A350-900 versus the Boeing 787-10 on the world’s busiest long-haul route, London Heathrow to New York JFK.
We compare the economics with a nine abreast economy cabin and what difference the NPS and a 10 abrest change for the A350 produces.
Summary
- The 787-10, with its long fuselage, is seat mile cost-optimized for medium long-haul routes.
- Airbus gives the airline the option with the A350 NPS, comfort, or seat mile optimization.
China still needs Boeing as much as Boeing needs China, despite interminable limbo
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By Scott Hamilton
Oct. 31, 2022, © Leeham News: China needs Boeing as much as Boeing needs China was the conclusion of an analysis by LNA in July 2021. A trade expert last week agreed. Airbus and China’s COMAC won’t be able to fill the future demand forecast for China.
Michael McAdoo, Partner & Director, Global Trade and Investment of the Boston Consulting Group (BCG) in Montreal and a former strategic chief of Bombardier Commercial Aircraft, told LNA in an interview last week that China needs the Boeing 737 MAX and widebody airplanes to meet demand in the near-to-medium term.
It will be long-term before China’s commercial aviation industry will be competitive with airplane designs and production.
Summary
Forecasts for China’s demand for jet aircraft are consistent between Airbus and Boeing. But COMAC, which is the leader of China’s burgeoning commercial aviation industry, is significantly higher in its forecast. The independent Japan Aircraft Development Corp (JADC) is significantly lower.
- Boeing forecasts that China needs 8,485 new jets through 2041.
- Airbus forecasts 8,420 new aircraft will be needed through 2041.
- COMAC forecasts China will need 9,084 aircraft through 2040.
- JADC is more conservative, forecasting a requirement for 6,172 new jets in China through 2041.
Source: Boeing Current Market Outlook.
China will account for 21% of the world’s new aircraft deliveries through 2041, Boeing says.
Bjorn’s Corner: Sustainable Air Transport. Part 43P. eVTOL IFR range. The deeper discussion.
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October 28, 2022, ©. Leeham News: This is a complementary article to Part 43, eVTOL IFR range. It discusses the typical maximum range we can expect from a certified eVTOL when it faces IFR weather conditions.
Flying in IFR conditions requires flight planning with increased reserves if the eVTOL can’t land at the destination airport and must divert to an alternate airport.