Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing 3Q deliveries up despite strike October 8, 2024
- Strike slows Boeing’s march toward improving safety culture October 7, 2024
- Aerospace supply chain still ailing; Sustainable Aviation Fuel isn’t the answer to go green October 4, 2024
- Bjorn’s Corner: New engine development. Part 27. Long developments October 4, 2024
- Longshoreman strike adds to Airbus, Boeing woes October 1, 2024
Quality Will Drive Pay for Spirit Executives
By Dan Catchpole
Feb. 6, 2024 © Leeham News: Quality more than quantity will drive Spirit Aerosystems executives’ compensation when the company unveils its new formula when it files its proxy statement in March, the company’s CEO Pat Shanahan told Wall Street analysts on Tuesday. 
“It will be significantly different, and the heaviest weighting will be only quality,” he said during a conference call discussing Spirit’s fourth quarter earnings report.
The panel blowout on Alaska Airlines Flight 1282 last month highlighted ongoing quality problems at Spirit and Boeing. Unlike the violent decompression on the 737 MAX 9, the quality problems typically just create financial headaches and public embarrassment for the two companies.
Spirit recorded $59M in net income, 48 cents adjusted earnings per share, and $42M free cash flow in the fourth quarter of 2023, its first profitable quarter since the beginning of 2022.
The company’s performance was boosted by a contract renegotiation and financing deal signed with Boeing in October. Spirit is getting close to signing a similar deal with Airbus, Shanahan said.
Summary
- Quality metrics for exec compensation
- Short term, long term plans for improving quality
- Negotiations with Airbus
Re-engining the Boeing 767, Part 4
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By Bjorn Fehrm
February 1, 2024, © Leeham News: We have been looking at a re-engine of the 767, a move that Boeing is considering to avoid a production stop after 2027. The present 767 engines don’t pass emission regulations introduced by the FAA, EASA, and other regulators for production and delivery beyond 2027.
We used our Aircraft Performance and Cost model to look at the economics of the original 767 Freighter versus a re-engined one before Christmas. Now, we install a passenger long-range cabin and look at the per-passenger mile economics of a re-engined 767-300ER versus the original version.
Summary:
- New, more environmentally friendly engines would give the 767-passenger version better fuel economics.
- The higher the engine maintenance costs of the new engines make the Cash Operating Costs difference between the existing 767-300ER and the new version small.
Bjorn’s Corner: New aircraft technologies. Part 41. Production learning curve
By Bjorn Fehrm
December 08, 2023, ©. Leeham News: We are discussing the different phases of an airliner development program. After covering Conceptual, Preliminary, and Detailed design, the manufacturing of prototypes, and their roles in Flight Tests, we now look at Production.
Last week, we explained why aircraft projects often fail 100 to 200 aircraft into production. What’s not well understood is the effects of production learning on product cost.
Figure 1. The development plan for a new airliner. Source: Leeham Co.
Re-engining the Boeing 767
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By Bjorn Fehrm
December 7, 2023, © Leeham News: We wrote last week that Boeing is considering re-engining the 767 to avoid a production stop after 2027. The 767 is still an interesting aircraft for companies flying cargo and for the US Air Force, which is taking delivery of the tanker version KC-46A for years to come.
The problem is that all the 767 versions are using engines from the 1970s (GE CF6, PW4000, RB211), and as the FAA has accepted the ICAO emission rules from 2017, the production of the 767 with these engines has to stop after 2027. As reported last week, Beoing is looking at re-engining the 767 to avoid a production stop.
We use our Aircraft Performance and Cost Model (APCM) to look at the different possible configurations with new engines and model their performance data and operating economics.
Summary:
- The Boeing 767 needs new engines if it shall be produced after 2027.
- While the engine candidate is clear, the rest of a re-engined 767 can be configured in several ways. We look at what different configurations bring in operational performance.
Bjorn’s Corner: New aircraft technologies. Part 40. The initial production crisis
By Bjorn Fehrm
December 01, 2023, ©. Leeham News: We are discussing the different phases of an airliner development program. After covering Conceptual, Preliminary, and Detailed design, the manufacturing of prototypes, and their roles in flight tests, we now look at Production.
Last week, we explained why the focus on the production phase has increased for recent and future projects. Now we go deeper into why the production phase and how it runs is so important.
Figure 1. The development plan for a new airliner. Source: Leeham Co.
Further developments of the A321, Part 6
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By Bjorn Fehrm
November 23, 2023, © Leeham News: We do an article series about what can be the subsequent development for Airbus’ most popular aircraft, the A321neo. We looked at different changes to the aircraft in previous articles and the economics in short haul configuration. Now, we compare the capacity and economics of the different variants when configured for long-haul missions.
We use our Airliner Performance and Cost Model (APCM) to look at passenger capacity, seat-mile costs, and range.
Summary:
- A stretched A321 is limited as a long-haul aircraft, as it needs additional fuel and additional takeoff weight to carry the fuel.
- Long-haul variants of a stretched A321 will need the XLR center tank or the new, larger wing of an A32x to extend the range to long-haul values.
Spirit Focused on Delivering On Time and At Quality
By Dan Catchpole
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Nov. 6, 2023, © Leeham News: Spirit Aerosystems’ new CEO Pat Shanahan’s focus right now is “to restore confidence in the company” with its biggest customers—Airbus and Boeing.
During a Nov. 1st conference call discussing the company’s third quarter earnings, Shanahan said, “I recognize we have disappointed our stakeholders.”
Shanahan just came on as chief executive in October to help turn around Spirit, which has been flailing, along with much of the aerospace supply chain. Boeing and Airbus will be watching Shanahan’s progress. He gained a reputation as Mr. Fix-It during his time at Boeing.
Summary
- Market responds favorably to latest earnings report and management’s promises.
- Shanahan says Spirit is on track to deliver more than 50 737 MAX airframes in 2025.
- Goal is zero-quality issues.
Bjorn’s Corner: New aircraft technologies. Part 36. Prototype manufacturing and Testing
By Bjorn Fehrm
October 27, 2023, ©. Leeham News: We are discussing the different design phases of an airliner development program. After covering Conceptual, Preliminary, and Detailed design (Figure 1), we now discuss prototype manufacturing and testing, where we today go deeper into structural testing.
Figure 1. The development plan for a new airliner. Source: Leeham Co.
Bjorn’s Corner: New aircraft technologies. Part 34. Design for Certification
October 13, 2023, ©. Leeham News: We are discussing the Detailed design phase of an airliner development program. We have discussed program management methods, development techniques, tools for Detailed design, that improved production methods are as important as improved technology, and that the interaction with the suppliers is key.
But another consideration that affects detail design is the influence of the Certification process. Certification has a major influence on the program work in every step of the aircraft program.
Figure 1. The online version of the FAA 14 CFR Part 25 Airliner Airworthiness regulations. Source: US CFR.
Further developments of the A321, Part 2
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By Bjorn Fehrm
October 5, 2023, © Leeham News: We look at what can be the next development for Airbus’ most popular aircraft, the A321neo. We looked at the history of the A320/A321 last week and how the aircraft progressively were updated to take more passengers and fly longer sectors.
The series represents more than 50% of the revenue and margin for Airbus. With the latest development, the A321XLR, soon finished, what is next? We use our Airliner Performance and Cost Model (APCM) to look at base data and what changes are necessary to increase capacity and efficiency further.
A321XLR during cold weather testing in Canada. Source: Airbus.
Summary:
- The A321 is reaching its weight and capacity limits.
- There are ways to lift these limits, but the changes must not break its Airport gate classification.