Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Teamsters, Boeing have a new contract April 29, 2025
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
Elliott takes 11% share in Southwest, demands leadership overhaul
By Judson Rollins
June 10, 2024, © Leeham News: Hedge fund Elliott Investment Management announced yesterday that it has a $1.9bn position in Southwest Airlines, comprising 11% of the company’s shares. It issued a letter to the airline’s board, calling for new directors, a new CEO, more executives from outside, and a comprehensive business review.
In its letter, Elliott wrote, “While Southwest has a proud history, that history is not an argument for supporting poor leadership and sticking with a strategy that no longer succeeds in the modern airline industry.”
Source: Elliott Investment Management.
The announcement came as Southwest’s stock price remains near its April 2020 value, and management faces growing questions about excessive costs and middling unit revenue.
Elliott included with its letter a 51-slide presentation laying out its case for overhauling Southwest. One slide features a 2014 quote from founder and former CEO Herb Kelleher: “If things change faster outside your company than they change inside your company, you’ve got something to worry about.” Read more
Freighter market faces turmoil while passenger sector gets the headlines
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By Scott Hamilton
June 10, 2024, © Leeham News: Delivery delays of widebody airplanes are causing disruptions in freighter conversion plans as feedstock is retained for passenger operations.
IAI Bedek Boeing 777-300ER P2F. Photo: IAI Bedek.
Demand for passenger airplanes also is slowing Airbus’ plans for the A350 freighter, according to market intelligence.
Softening of the cargo market since the end of the COVID-19 pandemic also impacts the immediate need for converting airliners to freighters, sources say.
Although Boeing’s delays with the 787 and 777X get most of the blame, Airbus also gets some credit for the A350 program. Already, say potential cargo airplane buyers, the A350 freighter is looking at a delay beyond the 2026 entry into service (EIS) date. Uncertainties among Middle Eastern carriers Etihad and Emirates over the A350-1000 Rolls-Royce engine durability are also causing officials to rethink retaining Boeing 777-200LRs and 777-300ERs in service.
Certification of the IAI Bedek 777-300ER freighter conversion program is taking longer than expected. The reason: the negative halo effect dating to the Federal Aviation Administration (FAA) certification crisis with the Boeing 737 MAX.
It took Boeing 21 months to recertify the MAX after its grounding began in March 2019. The MAX 7 and MAX 10 still aren’t certified and aren’t expected to be until sometime next year.
Certification of the 777X, also affected by the negative halo effect of the MAX crisis, isn’t certified. EIS was intended to be in 1Q2020. Boeing has yet to receive Type Inspection Authorization (TIA) from the FAA, one of the final steps required before certification. Boeing officially hopes certification will occur next year. But quietly some within Boeing now don’t think TIA will come until 1Q2025. Emirates and Lufthansa Airlines, the first scheduled operators of the airplane, openly say they don’t expect deliveries until 2026.
The upshot: feedstock of the 777-300ERs for conversion companies is drying up.
Bjorn’s Corner: New engine development. Part 10. Propeller, Rotor or Fan?
By Bjorn Fehrm
June 7, 2024, ©. Leeham News: We do an article series about engine development. The aim is to understand why engine development now has longer timelines than airframe development and carries larger risks of product maturity problems.
To understand why engine development has become a challenging task, we need to understand engine fundamentals and the technologies used for these fundamentals.
Following the last Corner on airframe integration, several comments were made about the definition of propeller, open rotor, and/or fan. So, we’ll explore this further.
Figure 1. Evolution of Wright Brothers propellers from 1903 to 1905. Source: wright-brothers.org
The all-important cabin. Part 3
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By Bjorn Fehrm
June 6, 2024, © Leeham News: We do an article series about the all-important cabin and its seating for an airliner. We have looked at different narrowbody cabins and how the seating differs widely depending on the market and customer segments the aircraft addresses.
This week, we focus on why widebody aircraft have relatively low seat counts compared with single-aisle aircraft, like the A321neo.
We use the cabin generator in our Aircraft Performance and Cost Model (APCM) to configure widebody cabins and compare these with the narrowbody equivalents.
Summary:
- The widebody cabins are configured for longer flight times, resulting in them taking more space.
- When a widebody is configured for domestic flights, its seating per cabin area is closer to that of a narrowbody.
Analyzing Boeing’s 90-Day Plan
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By the Leeham News Team
Analysis
June 3, 2024, © Leeham News: There is no timetable for Boeing to gain approval to boost production rates of the 737 MAX. And there is no timetable for the beleaguered company to regain “ticketing” authority for certification of its 737s or 787s. The Federal Aviation Administration (FAA) will be calling the shots indefinitely.
Boeing last week presented the FAA with its plan to improve safety. The long PowerPoint, said FAA Administrator Mike Whitaker in a press conference on Thursday, wasn’t released to the public. But press releases from the FAA and Boeing, and an 11-page Executive Summary released by the manufacturer, were in many ways recitations of what’s already been done.
“All those highlighted bullet points posted below were all being done when I worked as a delivery manager 14 years ago,” a retired Boeing employee emailed LNA after reviewing the Boeing press release and Executive Summary.
“Eliminate defects? They’ve been saying that for 100 years. Of course, we want zero defects. The KPIs are nothing new. Been there done that. Nothing’s changed. Nothing.”
KPI stands for Key Performance Indicators. Boeing, and Whitaker, highlighted these in statements. There are six KPIs:
- Employee proficiency measures share of employees who are deemed proficient in core skills.
- Notice of Escape (NoE) rework hours measures time performing rework in Boeing’s final assembly facilities to address non-conforming work from its fabrication division and external suppliers.
- Supplier shortages measures shortages per day from Boeing’s fabrication division and external suppliers.
- Rework hours per airplane measures time spent performing rework in Boeing’s final assembly facilities.
- Travelers at factory rollout measures unfinished jobs traveling from Final Assembly
- Ticketing performance measures quality escapes per ticketed airplane prior to delivery.
The Boeing 90 day executive summary to the FAA: An analysis
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By the Leeham News Team
June 3, 2024, © Leeham News: Boeing and the Federal Aviation Administration last week released summaries of the company’s plan to fix its safety shortcomings following the Jan. 5 accident of Alaska Airlines Flight 1282.
That’s the day a 10-week-old 737-9 MAX saw a door plug blow out at 16,000 ft on take-off from Portland (OR). Nobody died but there were some injuries and damage throughout the cabin and the cockpit occurred. The flight crew made an emergency landing at Portland.
Following this accident, the FAA on Feb. 29 gave Boeing 90 days to come up with yet another plan to address safety and production failures. (Boeing developed plans after the 2018/19 737-8 MAX crashes that killed 346 people.)
In a three-hour meeting on May 31, Boeing CEO David Calhoun and other senior executives outline its latest plan. The FAA’s press release afterward largely was a reaffirmation that it will hold Boeing’s feet to the fire until it is satisfied the safety culture at Boeing changes. There is no timeline for Boeing to implement changes—at least none that was announced.
Boeing released an 11-page Executive Summary that largely outlined steps it has taken to improve safety, and which ones continue. The detailed PowerPoint presentation given to the FAA was not released. Through a spokesperson, the FAA declined to make FAA Administrator Mike Whitaker available for an interview.
A key element of the go-forward plan is a requirement by the FAA that a voluntary Safety Management System (SMS) is now mandatory.
The FAA and Boeing statements released last week drew immediate criticism for lack of detail, repetitive nature of steps already taken, and—given the steps taken in 2019 and 2020—why this is necessary today.
LNA’s news team, which includes former Boeing employees whose duties included safety, reviewed the information announced last week. This is the analysis.
Boeing, firefighters settle contract, ending lockout
By the Leeham News Team
Analysis
May 31, 2024, © Leeham News: Boeing firefighters on Thursday approved a new contract, ending a lockout by Boeing since May 1.
Firefighters approved the new contract by a vote of 78% to 22% (86 to 24). Firefighters return to work tomorrow.
The offer was good enough to end the lockout, but it’s not clear whether it will solve the chronic turnover in Boeing’s Fire Department. Despite Boeing’s attempts to paint the offer as competitive with other industrial fire departments around the United States, pay remains below the municipal departments right next door to its facilities in Everett, Renton and Seattle.
It still will take Boeing firefighters 10 years to get to maximum pay, which is an improvement over the current 14. (Most Seattle-area departments move firefighters to maximum pay in three to five years.)
Bjorn’s Corner: New engine development. Part 10. Airframe integration
By Bjorn Fehrm
May 24, 2024, ©. Leeham News: We do an article series about engine development. The aim is to understand why engine development now has longer timelines than airframe development and carries larger risks of product maturity problems.
To understand why engine development has become a challenging task, we need to understand engine fundamentals and the technologies used for these fundamentals.
In the last Corner, we looked at the nacelles used for a turbofan engine and for an open-rotor engine. Now, we go one step further and look at the integration of modern engines on an airliner.
Figure 1. Boeing 737NG (left) and MAX (right) nacelles compared. Source: Leeham Graphic from Boeing 737 images.
Boeing releases Executive Summary of FAA plan (Update with FAA comment)
Update: The FAA, responding to a query from LNA about deadlines and milestones, had this to say:
“This is about systemic change, and there’s a lot of work to be done. Boeing must meet milestones and the timing of our decisions will be driven by their ability to do so. Boeing has delivered a roadmap to change its safety culture, and the FAA will make sure Boeing implements the changes they have outlined. We will not approve production increases beyond the current cap until we’re satisfied they’ve followed through on implementing corrective actions and transforming their safety culture. The FAA will make sure Boeing makes lasting change using all of the tools at our disposal. We need to see a strong and unwavering commitment to safety and quality that endures over time.”
May 30, 2024, © Leeham News: Boeing today released an 11-page executive summary of its plan to the Federal Aviation Administration.
A top-level summary is below.
“A significant component of our Safety & Quality Plan are these six key performance indicators (KPIs) focused on safety, quality and production health,” a spokesperson wrote in an email.
- Employee proficiency measures share of employees who are deemed proficient in core skills.
- Notice of Escape (NoE) rework hours measures time performing rework in Boeing’s final assembly facilities to address non-conforming work from its fabrication division and external suppliers.
- Supplier shortages measures shortages per day from Boeing’s fabrication division and external suppliers.
- Rework hours per airplane measures time spent performing rework in Boeing’s final assembly facilities.
- Travelers at factory rollout measures unfinished jobs traveling from Final Assembly
- Ticketing performance measures quality escapes per ticketed airplane prior to delivery.
The all-important cabin. Part 2
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By Bjorn Fehrm
May 30, 2024, © Leeham News: We will do an article series about the all-important cabin and its seating for an airliner. The cabin layout and its comfort are the most important part of an airliner for the passenger. For an airline it’s its face to the customer.
We will look at the different types of cabins used and how these use the airliner’s real estate, what the cost is, and what the weight is. With the weight, we can also predict how different cabins affect the aircraft’s performance.
Summary:
- The configuration of the cabin has a large influence on total seating, weight, and cost.
- The relationships change up to 500%.