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
Boeing posts 2019 loss, IDs $9.2bn in additional MAX charges, costs
Jan. 29, 2020, © Leeham News: Boeing today announced a full year loss for 2019, as expected.
- Revenue of $76.6bn, GAAP loss per share of ($1.12) and core (non-GAAP)* loss per share of ($3.47)
- Operating cash flow of ($2.4bn); cash and marketable securities of $10bn
“We recognize we have a lot of work to do,” Boeing President and Chief Executive Officer David Calhoun said in a statement. “We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public.”
Boeing ended the year with $10bn in cash and marketable securities, down slightly from the $10.9bn at the end of 3Q2019.
Debt rose slightly to $27.3bn from $24.7bn at the end of the third quarter.
Calhoun faces first test on labor issues
By Bryan Corliss
Jan. 29, 2020 © Leeham News — Two weeks into the job, and new Boeing CEO Dave Calhoun is already facing his first labor-management showdown, with SPEEA, the union for engineers and technical workers at the company’s Puget Sound plants.
On Monday, the vice president of engineering functions for Boeing Commercial Airplanes sent a message to members of SPEEA at Boeing, saying that his team has agreed to meetings with SPEEA’s leadership to discuss “areas of contention between the company and the union.”
Chief among those is SPEEA’s charge that Boeing has been manipulating data used to help calculate annual pay adjustments for engineers and techs, while also allowing front-line managers to blow off annual performance reviews required for engineers and technical workers to determine who would be released first in the event of a layoff.
The union, through a spokesman, declined on Monday to talk about the accusations it’s made in writing about the wage issues. BCA’s VP of engineering functions, Todd Zarfos, said in his note that the two sides have “agreed to refrain from any further accusations and rebuttals about the identified areas of dispute.”
Instead, Zarfos said, they will “work together on possible solutions.”
Summary
- Blistering broadside on pay for engineers, techs.
- SPEEA goes to Legislature to seek end to “Boeing exemption.”
- IAM bargaining unit urges members to save for strike.
- Will Calhoun change management’s approach to labor?
Read more
Assessing airlines’ narrowbody replacement needs
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By Vincent Valery
Introduction
Jan. 27, 2020, © Leeham News: The Boeing 737 MAX crisis appears headed for resolution within a few months.
Stephen Dickson, the administrator of the Federal Aviation Administration, told American, Southwest and United airlines the MAX could be recertified by summer. This is the first time the FAA suggested a timeline—though anything could change this.
However, the entire commercial airline ecosystem has even less visibility on another key topic: once the 737 MAX returns to service, will airlines and lessors place new orders for what was Boeing’s best-ever selling aircraft?
Whether the 737 MAX can accumulate a meaningful amount of new orders will have far-reaching consequences on Boeing’s finances and product strategy. As outlined in a previous LNA article, it might take until 2022 at the earliest to return to the intended production rate (57/mo) before the grounding.
Even if not many airlines cancel their 737 MAX orders, Boeing will need to accumulate sizable new orders to keep the assembly line busy through the 2020s. Any clean-sheet aircraft design would only be ready in the late 2020s at the earliest. Boeing CEO Dave Calhoun expressed confidence in regaining the market share Boeing had before the grounding.
Is Calhoun’s optimism justified?
The most reliable market to accumulate new orders is the replacement of aging aircraft. In this article, we come up with a conservative estimate of the number of aircraft airlines still need to order or lease to replace older airframes. We will analyze the breakdown among customer types, as well as timelines.
Summary
- A significant number of aging narrowbody aircraft to replace;
- Different order and replacement mix at Airbus and Boeing;
- And airline fleet types;
- Concentrated order and replacement opportunities;
- Replacement needs timelines.
Pontifications: Back to drawing board on NMA, Boeing’s CEO says
Jan. 27, 2020, © Leeham News: Back to the drawing board.
So to speak.
By Scott Hamilton
There is no drawing board, of course, but, rather, computer design.
In his first media conference last week as president and CEO of The Boeing Co., David Calhoun is going back to a fresh start on evaluating what Boeing needs for its next new airplane.
The New Midmarket Airplane (NMA) and Future Small Airplane (FSA) appear dead.
That’s not to say, necessarily, restarting the analysis won’t conclude one of these concepts is the right one after all.
But something entirely new might emerge, too.
Third time is the charm: 777X takes to the sky today
By Scott Hamilton
Jan. 25, 2020, © Leeham News: The third time was the charm.
Boeing 777-9 on the way to what was hoped to be its first flight Jan. 24. As an experimental flight, the airplane had to take off north with a tailwind. The wind throughout the day exceeded the safe level. The flight was scrubbed. The airplane instead took to the sky the following day. Photo by Scott Hamilton.
After being rained out Thursday and scrubbing the first flight Friday due to high winds, Boeing successfully launched the 777X into the air Saturday for its first flight.
The flight left Everett (WA) Paine Field, where the 777 has been produced since the program began in the early 1990s.
After an uneventful couple of hours circling over central Washington State, the 777-9 landed at Boeing Field south of downtown Seattle. Test pilots reported solid controls and flying characteristics.
Bjorn’s Corner: Why e in ePlane shall stand for environment, Part 6. The CO2 problem.
January 24, 2020, ©. Leeham News: In the last Corners we tested some of the ideas why electric/hybrid propulsion would be more efficient and found the ideas could be easier and better implemented with existing technology, yet they are not. One wonders why. Perhaps the ideas are not that brilliant after all.
Before we look at alternative technologies that can help us lower air transports CO2 footprint we shall scope the problem and look at what part air transport plays. To what extent is air transport at the center of the problem?
Figure 1. The CO2 concentration in our atmosphere and what sectors contribute the CO2. Source: Wikipedia.
First flight of Boeing 777-9 today, weather-dependent
By Scott Hamilton
Jan. 24, 2020, © Leeham Co.: In a year filled with bad news, Boeing finally had something good to crow about.
The 777-9’s first flight is today.
It comes about a year late, due to design issues with the GE Aviation GE9X engine that powers the airplane.
And, as if this weren’t bad enough, when the engines were returned from GE, a hard landing damaged one of them.
Despite rainy and cloudy weather today at Paine Field in Everett (WA), where the 777 has been assembled since the program was launched in the early 1990s.
The 777-9 is scheduled to lift off at 10am PST, depending on the Seattle area’s lousy weather this week.
With Boeing’s 737 MAX delivered to storage instead of customers, unique cost and revenue insights can be gained.
By Bjorn Fehrm
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Introduction
January 23, 2020, © Leeham News: The last three-quarters of non-delivered Boeing 737 MAX production exposes the internals of an airliner OEM as seldom before.
The second, third and eventually fourth quarterly reports from Boeing can be compared to the same reports for the 2018 quarters. The differences in the numbers represent the production cost of the 737 MAX being booked as inventory instead of revenue. These values make for interesting reading as they give deeper insights into the production costs and net customer prices for the model.
Summary:
- When the MAX goes to storage it’s delivered to Boeing Commercial Airlane’s inventory.
- The net production cost appears in an increased inventory cost and the net customer price is missing in revenue.
- By careful comparison of the quarterly reports between 2019 and 2018, cost and revenue insights can be gained
Leasing industry sees a role in airline sustainability work
By Bjorn Fehrm
January 22, 2020, ©. Leeham News, Dublin: The yearly Air Finance Journal conference finished its second day with a Q&A with the top executives of the Leasing industry.
The Leasing companies buy 40% of all new airliners from the likes of Airbus and Boeing, to later rent them to the airlines on a monthly basis.
With 40% of all new aircraft delivered to these companies, their view on where we are in the cycle and what are the main challenges facing air transport is important.
The main topics during the three-day conference are the state of the airlines, the ease or difficulty to finance the purchase of $50bn of aircraft per year and the growing issue of air transport and the environment.
Analysts react negatively to Boeing slip of MAX recertification
Jan. 22, 2020, © Leeham News: Boeing’s announcement yesterday that it does not expect recertification of the 737 MAX until mid-year drew 
generally negative responses from Wall Street aerospace analysts.
More charges and costs to Boeing and the supply chain are expected beyond what was anticipated in next Wednesday’s 2019 earnings call.
Below are the initial reports from analysts in notes received by LNA. The bold face type is in the original.