Boeing suppliers ramp up schedule for MAX: 52/mo by July, 57/mo by August

Source: Boeing.

April 29, 2019, © Leeham News: Boeing reduced the production rate on the 737 line in mid-April from 52/mo to 42/mo in response to the grounding of the airplane by regulators worldwide.

The company and others said they didn’t know how long the airplane would be grounded.

But Boeing told suppliers to keep producing parts, components and the fuselage at rate 52.

The announcement was made April 5. At the same time, Boeing gave suppliers the rate ramp-up schedule.

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Impact of MAX grounding emerges with earnings reports

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Introduction

April 29, 2019, © Leeham News: With first quarter financial results beginning to be reported, the impact of the grounding of the Boeing 737 MAX is beginning to emerge.

Boeing 737 MAXes stored at Everett Paine Field. Photo by Jennifer Schuld.

The first out was from Boeing itself, followed by a few of the airlines that operated the MAX before it was grounded March 13.

Boeing reported the grounding cost it about $1bn, for just the two weeks the airplane has been on the ground.

Norwegian Air Shuttle, which was using the MAX on new trans-Atlantic services, lost millions of dollars.

American Airlines will take a $350m hit from the groundings.

Southwest Airlines surprised many with a stronger-than-expected first quarter despite having 34 MAXes on the ground and a cost of $200m.

Air Canada extended the removal of its MAX fleet from its schedules another month, to Aug. 1.

Summary
  • JP Morgan doesn’t predict deliveries resuming until the fourth quarter.
  • The investment bank sees 200 MAXes in inventory accumulating and cash losses of $1.5bn per month while the plane is grounded.
  • Wall Street hopes that 2020 will be a normalized year.
  • If simulator training is required by regulators before the MAX can return to service, JP Morgan estimates more than 4,400 pilots need to be trained.

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Latest engine problem means NMA EIS slides

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Introduction

April 22, 2019, © Leeham News: If there remains any doubt that Boeing’s prospective New Midmarket Airplane (NMA) won’t be ready for entry into service (EIS) by 2025, it should be dispelled by now.

The grounding of the 737 MAX March 13, which is likely to continue well into the summer, will delay any launch of the program—should Boeing proceed.

The Board of Directors is unlikely to approve Authority to Offer (ATO) the NMA for sale as long as the cash flow for the MAX is outgoing and not in-coming.

Although this has its own impact on the NMA timing, it’s not the critical factor.

Last week, it was revealed that the CFM LEAP engine on the MAX (and the Airbus A321neo) has a problem called coking, which led to the contained engine failure of a Southwest Airlines MAX being ferried from Orlando (FL) to Victorville (CA) for the grounding of the Boeing airplane (see here and here). It’s the latest in a long line of engine maker problems with their current generation of powerplants.

This issue is unrelated to the MAX MCAS grounding. It also affects some engines on the A320neo family.

Summary
  • CFM is considered the favorite to power the NMA.
  • All four engine makers remain under stress and recover modes.
  • Rolls-Royce dropped out of NMA competition in December.
  • LNA reported in March 2018 the engines needed to be the focus for the NMA launch. See here and here.

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Training is a factor in the MAX crashes

 

By Scott Hamilton

April 15, 2019, © Leeham News: This column will no doubt light up the blog-o-sphere.
There’s been a major debate going on since the crash of Lion Air JT610, the Boeing 737-8 MAX that immediately became a huge controversy.

Boeing immediately blamed the pilots. So did some pilots of some US airlines, who said if the Lion Air crew had just flown the airplane, it wouldn’t have crashed. It was a training issue, some said.

Having got tremendous blow back over Lion Air, Boeing publicly held its tongue when Ethiopian Airlines flight ET302 crashed five months later.

Still, Boeing officials quietly still said there was nothing wrong with the airplane.
Some US and Canadian pilots maintained, publicly and privately, that a lack of training and pilot skills in the Third World was responsible.

They’re not entirely wrong.

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Pontifications: 737 MAX events remind of Lockheed Electra story

By Scott Hamilton

March 18, 2019, © Leeham News: There’s a saying that history repeats itself.

When it comes to the crisis of the Boeing 737 MAX, I’m reminded of the crisis Lockheed faced in 1959-1960 when the Electra propjet crashed in September and the following March, killing all aboard both airplanes.

The Electra entered service Jan. 12, 1959, with Eastern Airlines. It was considered a pilot’s airplane. Coming off decades of piston engine aircraft and early in the jet age, the Electra was the only airplane that was over-powered, piston or jet. Timing, however, was poor and crashes soon overtook the euphoria.

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Legendary Herb Kelleher dead at 87

Jan. 3, 2019, © Leeham News: The incomparable Herb Kelleher died today. He was 87.

Kelleher was a co-founder of Southwest Airlines, which rewrote airline service in the US and which became the forerunner of many, many low cost carriers across the globe.

Herb Kelleher, wrestling for the rights to an advertising tag line. The publicity stunt literally drew worldwide attention. Photo via Google images,.

When I lived in Dallas from 1985-1996, I interviewed Kelleher many times and on occasion would lunch with him “just because.”

What follows are memories about Herb I’ve written as part of my own unpublished memoirs (of a sort) about my lifetime in commercial aviation.

Legendary antics

Kelleher’s antics are legendary, as was his smoking and drinking. He was an open flirt with his female flight attendants and they loved him for it. He was an absolutely ruthless competitor, but his clownish approach to life overshadowed it. He could be deadly serious and totally irreverent.

I need not recount his many antics, his dressing like Elvis, his motorcycle riding or similar activities because they have been well covered and are well known.

There is one story in particular to tell. It’s about Malice in Dallas. (See here, one of six parts.)

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US start-up has a lot of Moxy

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Introduction

June 21, 2018, © Leeham News: A new US airline secured delivery positions for 60 Bombardier CS300s for deliveries from 2020, according to its business plan circulating this month.

Moxy Airlines is led by David Neeleman, founder of several airlines including Morris Air (later acquired by Southwest Airlines), WestJet, JetBlue and Brazil’s Azul Airlines.

No application for certification had been filed with the US Department of Transportation as of last week.

The plan was first reported by Airfinance Journal June 11.

Summary
  • Business plan says an “order” has been placed for 60 CS300s but also says “delivery positions” were procured.
  • Delivery positions may be those of Republic Airways Holdings.
  • Initial funding of $100m raised.
  • Secondary cities, point-to-point business model.
  • Likely boost for C Series plant in Mobile (AL)—but a suggestion that this fills the line for two years is off base.

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Southwest accelerates 737-700 retirements

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Introduction

April 30, 2018, © Leeham News: Southwest Airlines announced orders 80 Boeing 737-8s so far this year and market intelligence indicates the carrier may be far from done.

Another 60 orders may come during the year, though this trend could slow, market intelligence indicates.

The carrier is accelerating fleet retirements of its Boeing 737-700s with the orders. The latest round last week now makes Southwest the largest single customer for the MAX.

Significantly, the orders represent an up-gauging to the 8 MAX from the -700. The similarly-sized, slow-selling 737-7 MAX, of which Southwest is one of only four identified customers, is being bypassed. Southwest previously deferred delivery of 23 7 MAXes four years.

Click on image to enlarge.

Southwest historically operated its 737s for at least 25 years. Some 737-300s were 28 years old by the time they were retired and stored, according to the Airfinance Journal Fleet Tracker.

Summary
  • Strong economic business case cited to retire 737-700s.
  • 40 737-700s to be retired with concurrent deliveries.
  • Retirements occurring at earlier age.
  • Aging aircraft issues exist.

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Pontifications: Limited operations raise doubts over Paine Field airline service

By Scott Hamilton

April 9, 2018, © Leeham News: This fall, the Seattle area will get a second passenger airport: three airlines will begin service at Paine Field, in Everett, which is also home to Boeing’s massive wide-body production plant.

Alaska, Southwest and United airlines will offer 24 fights out of two gates that are under construction.

It’s the first passenger service from Paine Field.

It’s not hardly enough.

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Southwest CEO sees 60% of fleet becoming the 737-7

March 1, 2018, © Leeham Co.: Southwest Airlines needs about 100 more Boeing 737-8s before turning its

Gary Kelly, CEO of Southwest Airlines. Photo via Google images.

attention to the 737-7, CEO Gary Kelly told LNC in a press scrum at the 2018 Aviation Summit today, sponsored by the US Chamber of Commerce.

The current fleet of 737-700s won’t see retirements until about 2022, at which time the need for the 7 MAX arises.

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