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 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
- Digital twin is a key to JetZero’s hopes for Blended Wing Body entry June 2, 2025
Ortberg sees path with FAA for returning to full rate 737 production
By Karl Sinclair
Jan. 28, 2025, © Leeham News: Boeing’s CEO Kelly Ortberg, now five months into his job, painted an encouraging picture of the company’s path to recovery in an appearance on the financial news network CNBC before the 2024 full-year earnings call.
Kelly Ortberg, CEO of Boeing. Credit: Boeing.
Ortberg said there is a path for Boeing Commercial Airplanes to win approval from the Federal Aviation Administration (FAA) to return this year to a production rate of 38/mo for the 737 MAX. This is the rate before the Jan. 5, 2024, accident involving an Alaska Airlines 10-week-old MAX 9 in which a door plug blew off the airplane at 14,000 ft after take off from Portland (OR). The accident was traced to a production failure by Boeing. Nobody died, and the injuries were minor. The plane safely returned to Portland for an emergency landing.
Since then, production has trickled along at 20 or less per month. Returning to a rate of 38 and growing beyond is critical to Boeing’s financial recovery.
Ortberg told CNBC this path appears to be on track finally.
RTX 2024 Earnings: Pratt Progress on GTF AOG and MRO While Preparing to Seize the Advantage; Collins Battles BFE Supply-Chain
By Chris Sloan
January 28, 2025 © Leeham News: RTX chief executive Christoper T. Calio says the company’s number one priority is executing on its $218 bn backlog and meeting its commitment to customers – topped by the Geared Turbo Fan program. MRO and Original Equipment momentum has gathered pace in the last year since the powdered metal saga began two years ago.
“AOGs[Aircraft On Ground] have been stable. MRO output is the key enabler. PW1100 output was up 30% last year. So, very good, good progress in terms of material flow and in-shop performance,” he proclaimed. Pratt’s goal of 30% growth in 2025 will be governed by the supply chain – particularly powdered metal. The company didn’t disclose current AOG numbers – which have been up to 30% of the fleet, with protracted durations of up to a year commonplace.
Boeing: 2024 Earnings-another bad, bad year
By Karl Sinclair
Jan. 28, 2025, © Leeham News: The Boeing Company (BA) reported its full-year 2024 fiscal results today and it went pretty much as expected: it was another bad, bad year.
The full press release is here.
Boeing had a tumultuous 12 months:
- A door-plug departed a brand new Alaska Airlines 737-9 MAX aircraft shortly after takeoff in January;
- Its commercial crew spacecraft stranded astronauts at the ISS in June;
- The company was forced to an agreement to purchase a major supplier (Spirit Aerosystems) in July;
- A CEO change happened in August;
- The 777X flight testing program ground to a halt due to broken thrust links (also in August);
- A 53-day union strike hit the PNW in September;
- An equity sale to raise cash occurred in October; and finally,
- The 2024 financial year-end was put out of its misery with this filing.
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.
Bjorn’s Corner: Air Transport’s route to 2050. Part 6.
Bjorn Fehrm
January 24, 2025, ©. Leeham News: We do a Corner series about the state of developments to replace or improve hydrocarbon propulsion concepts for Air Transport. We try to understand why the development has been slow.
We have covered why the progress of battery-based aircraft is slow and also described what to expect at the end of this decade and the beginning of next.
Now, we look at hybrids, an inherently more complex design. Upstarts are changing to hybrids after realizing that battery-only aircraft will not have useful range this side of 2030.
Figure 1. The Heart Aerospace ES-30 has passed the phases in the article. Source: Heart Aerospace.
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Boeing came close to running out of cash in 4th quarter
By Scott Hamilton
Jan. 23, 2025, © Leeham News: The Boeing Co. nearly ran out of cash in the fourth quarter, the company said today as it previewed earnings that will be announced next week.
Boeing’s fourth-quarter cash flow was negative at $3.5bn, in part due to a strike that overlapped the third and fourth quarters.
Fourth quarter revenue will only be $15.2bn, reflecting the 53-day strike by its largest union, the IAM 751 in Washington and Oregon. The strike began on September 13. A new contract was approved on October 31. Employees returned to work by November 12, but retraining and the Christmas-New Year holidays delayed returning to full production.
Boeing said it lost $5.46 per share, or nearly $3.4bn, in the quarter. The company raised $25bn in cash and securities in the quarter. It entered the fourth quarter with $10bn in cash and short-term investments. It had $26.3bn at year-end. These figures illustrate how precarious Boeing’s position had become during the fourth quarter.
Hexcel Earnings: Returning to Pre-Pandemic Revenues, Ready for Rate Increases, but MAX Remains A Wild Card
By Chris Sloan
January 23, 2025 © Leeham News: Composites supplier Hexcel is ready, willing, and able to return to pre-pandemic production, profitability, and revenue benchmarks but can only move as quickly as its OEM clients up the supplier chain.
“While OEM production (rates) are increasing, recent history has clearly shown that ramping up aircraft build rates continues to be a challenging process. (OEM) Production levels in 2024 were only 68% of 2018 levels. Hexcel is close to about 80% as compared to 2019 levels,” concedes Hexcel’s Chairman, CEO, and President Tom Gentile.
Though the company forecasts its core commercial aviation aerospace sales to advance by high single-digits, the Gentile waves cautionary flags. “Because of the continued [start, stop, start ] production environment, uncertainty remains in relation to the outlook for our 2025 performance. Sales growth may be impacted by potential delays to the recovery in production rates.” The choppy rates have obvious knock-on effects on revenue and operating leverage – ultimately weighing down profit margins that will likely need until 2026 or 2027 to recover to pre-pandemic levels. “Daunting” and “Maximum” are words Gentile uses to describe labor, materials, and utilities inflation over the last 3-4 years. Not one to waste a good crisis, Hexcel is pledging to use this to its advantage. “It gives us time to work on our productivity and future factory initiatives to drive productivity to offset some of the (inflationary environment).”
The good news/bad news combination of bullish demand and constrained supply—a refrain common to all of commercial aviation—echoes through the halls of Hexcel.
Shipset Status: Program by Program Updates Offer Clues To OEM Rates
Hexcel is well positioned as the shift to composites and next generation materials, continues its unabated march forward. A350 and 787 generate the most revenue and production, obviously due to their sheer fuselage size and greater use of composites. But, the narrow-body programs hold their own with volume. The uneven production rate curve is causing consternation in the program production rate updates from Hexcel. With OEM’s guiding production rate increases, stability continues to bedevil every airframe model line and their suppliers, none more so than the MAX.
GE FY and Q4 2024 Earnings Power Above Consensus Driven By Services While LEAP Makes Durability Strides
By Chris Sloan
January 23, 2025 © Leeham News: Today, GE Aerospace reported a strong beat on its first full-year and fourth-quarter results as a standalone public company. Softer LEAP deliveries were more than offset by services.
“GE continues to demonstrate what a high-quality company can produce in a healthy aerospace environment – and that the aero aftermarket is far from dead,” said a Vertical Research Partners analyst report. Nearly eight years since LEAP’s EIS, the engine’s durability and reliability are beginning to catch up with fuel efficiency gains that continue to beat and exceed operational expectations. The world’s largest engine, the GE9X, is progressing toward next year’s launch under the wing of the world’s largest twin, the Boeing 777X.
Overall, demand continues to outstrip supply. The company touted orders for more than 4,600 commercial and defensive engines led by big LEAP-1B wins from American Airlines and El Al for 737 MAXs, GEnx-1B campaign victories for Royal Jordanian and British Airways 787s, and new GE9X orders from China Airlines. The entry-into-service of the first LEAP-powered Airbus A321XLR was another highlight. Supply chains and productivity, though still challenged, showed meaningful improvement powered by the engine maker’s so-called “Flight Deck lean operating model.”
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.