Leeham News and Analysis
There's more to real news than a news release.
China banks on C919, but numbers say it still needs Boeing
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By Scott Hamilton
Sept. 2, 2024, © Leeham News: Airbus and Boeing see China doubling its airliner fleet over the next 20 years. The numbers vary between the two companies. But the underlying data points to how challenging it will be for China to meet this demand without letting Boeing back into the mix.
Boeing has largely been frozen out of China since 2017 when then-President Donald Trump initiated a trade war with one of the world’s largest economies. Then, Boeing’s self-inflicted wounds came in the form of the 21-month grounding of the 737 MAX, a 20-month suspension of deliveries of the 787, and major, slow rework required for each model.
On top of this, after Russia invaded Ukraine, the Biden Administration—which kept Trump’s tariffs upon taking office in 2021—ramped up the pressure on China, which initially covertly supported Russia’s war on Ukraine. This support became more open as the war dragged on.
Few Boeing airplanes have been delivered to China since 2017 and fewer orders have been placed.
Boeing predicts that China will need 6,720 single-aisle aircraft through 2043. Airbus sees a need for 7,950 single aisles for the same period. On the widebody side, Boeing forecasts a requirement for 1,575 aircraft; Airbus forecasts a need for 1,380. Widebody freighter forecasts for China are 170 and 190 by Boeing and Airbus, respectively.
Let’s compare these numbers with production rates. China still needs Boeing.
Bjorn’s Corner: New engine development. Part 22. High Turbine technologies.
By Bjorn Fehrm
August 30, 2024, ©. Leeham News: We do an article series about engine development and why it has longer timelines than airframe development. It also carries larger risks of product maturity problems when it enters service than the airframe of an airliner.
We reached the turbine part on our way through the engine, where we last looked at high-pressure turbine temperatures. It’s the most stressed part of the engine and, in most cases, decides its durability. To understand why, we look closer at turbine technologies.
Figure 1. Our example engine, the LEAP-1A, is in cross-section with booster to compressor bleed valve area marked with a red circle. Source: CFM.
The A330 for medium haul or twice the frequency with A321XLR? Part 1
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By Bjorn Fehrm
August 29, 2024, © Leeham News: We have compared the Airbus A321XLR to the Boeing 757 to see if it can replace the long-range single aisle on its trans-Atlantic routes. The result was convincing: The A321XLR is, in many respects, what the Boeing NMA should have been: a replacement for the 757 with additional range.
Now, we look at the short- to medium-range market and check whether a route that was previously only possible with the Airbus A330 can be flown with a fleet of A321XLRs. The advantage, at an equal per-passenger cost, is the doubling of the frequency to drive market growth, revenue, and margin.
Summary:
- The A321XLR is close to 50% of the passenger capacity of the A330-300/900 in a long-range configuration.
- It has most of the range of the A330-300 and can fly the bulk of the routes of an A330-900.
- Can an airline operate a dual daily A321XLR to a daily A330 at the same per-passenger cost?
Using stock could be one option for IAM salary demands
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By The Leeham News Team
Aug. 26, 2024, © Leeham News: Boeing’s in contract negotiations with its touch labor union, the International Association of Machinists District 751 (IAM 751). The powerful union wants a 40% raise over the life of a four-year contract. Leadership wants to recover medical co-pays and reinstate a defined pension plan, given up in previous contracts.
The union also wants a guarantee that the Next Boeing Airplane (NBA) will be built in the Seattle area. Boeing’s executives used the threats of relocating 737 MAX and 777X assembly elsewhere to wring economic concessions out of 751 members in previous contract talks.
The contract expires on September 12. The union membership already has voted to authorize a strike on September 12 if the contract offer is voted down.
This time, the membership believes it is in a stronger bargaining position. Boeing’s weak financial position is viewed as playing right into labor’s strength. Jon Holden, president of the union, echoed those sentiments. “We understand our power. We are ready to use it,” Holden told The Seattle Times. Holden was also not going to let management off the hook, due to the poor financial position Boeing finds itself in, he told the newspaper. “It’s not about whether they can afford to pay us. That’s not even a question,” he added. “They can.”
But the ultimate question is, How can Boeing afford to pay what the union wants?
Here’s how.
Bjorn’s Corner: New engine development. Part 21. The High Turbine.
August 23, 2024, ©. Leeham News: We do an article series about engine development and why it has longer timelines than airframe development. It also carries larger risks of product maturity problems when it enters service than the airframe. We discuss why.
In our journey through an engine, we have reached the turbine part, where we will dig deeper into the high-pressure turbine. This is the most stressed part of the engine and has a major influence on engine performance and durability.
Figure 1. Our example engine, the LEAP-1A cross-section with the high-pressure turbine marked. Source: CFM.
The Military Gravy Train. Not for everyone.
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By the Leeham News Team
Aug. 22, 2024, © Leeham News: Lockheed Martin (LM). RTX. Northrop Grumman (NG), General Dynamics (GD). BAE Systems (BAE). These are the world’s largest defense contractors, by revenue.
| 2023 | 2022 | 2021 | |||||
| Sales | Earnings | Sales | Earnings | Sales | Earnings | ||
| Lockheed Martin | $67,571 | 6,920 | 65,984 | 5,732 | 67,044 | 6,315 | |
| RTX | $68,920 | 3,195 | 67,074 | 5,5216 | 64,388 | 3,897 | |
| Northrop Grumman | $39,290 | 2,056 | 36,602 | 4,896 | 35,667 | 7,005 | |
| General Dynamics | $42,272 | 3,315 | 39,407 | 3,390 | 38,469 | 3,257 | |
| BAE Systems (in £) | £25,284 | 2,682 | 23,256 | 2,479 | 21,310 | 2,205 | |
| (in millions) |
Source: 2023 Financial reports. BAE reporting in EBIT.
Five corporations. Three years. Fifteen sets of data points. Not a drop of red ink to be seen. Airbus and Boeing can’t say the same thing.
Aviation’s recruiting problem shifting from pilots to technicians, cabin crew
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By Judson Rollins
Introduction
August 19, 2024, © Leeham News: Boeing issued the latest edition of its annual Pilot and Technician Outlook (PTO) last month, forecasting demand for 2.3 million new aviation personnel by 2043.
Of these, 649,000 are new pilots, 690,000 are new technicians, and 938,000 are new cabin crew.
“Driven by aviation traffic trending above pre-pandemic levels, personnel attrition, and commercial fleet growth, the demand for aviation personnel continues to rise,” said Chris Broom, vice president of Commercial Training Solutions at Boeing Global Services.
Source: United Airlines.
The Seattle-based OEM says demand for new personnel will be driven primarily by single-aisle airplanes, except in Africa and the Middle East, where widebody airplane demand will be the key factor.
According to the forecast, greater Europe — what Boeing now calls “Eurasia” — China and North America will account for more than half of new industry personnel.
The company believes South Asia, Southeast Asia, and Africa will be the fastest-growing regions for personnel, with demand expected to more than triple within 20 years.
Two-thirds of new personnel will address replacement due to retiring staff and other attrition, while one-third will support growth in the commercial fleet.
Summary
- The global pilot shortage may peak sooner than expected.
- Technician recruiting is increasingly hampered by competition from other industries and obsolete educational programs.
- Increasing cabin crew attrition could drive higher costs for airlines.
Bjorn’s Corner: New engine development. Part 20. Temperatures.
By Bjorn Fehrm
August 16, 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.
We have covered the different areas of a gas turbine except the exhaust (Figure 1). Before we go to the exhaust and the different outputs from a gas turbine Core, we look at the temperatures and how to cope with them in the different sections of a gas turbine.
Figure 1. The gas turbine cycle and its parts. Source: Rolls-Royce: The Jet Engine.
The all-important Unit Cost
- Part II of the Boeing Liabilities Problem
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By the Leeham News Team
Aug. 15, 2024, © Leeham News: Chief Financial Officer Brian West recently cautioned Boeing (BA) analysts and investors about the cash burn on the Q2/2024 earnings call;
“I’m just not smart enough right at this moment to say whether it’s $5bn or $10bn,”
BA used $4.3bn in the second quarter, which followed a burn-off of $3.9bn in the first quarter. The company shored up its cash position by borrowing $10bn during Q2/2024, injecting much-needed funds to cover losses. Eventually, all that money must be repaid.
LNA continues to analyze just how short Boeing is from that point and where it needs to be to make that happen.
Supply chain may be stabilising — but risks remain, says Accenture’s aerospace lead
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By the Leeham News Team
August 12, 2024, © Leeham News at Farnborough: After a period of intense disruption, the aerospace supply chain is showing signs of stabilisation, partly due to Boeing’s recent production slowdown, according to Accenture’s global aerospace and defense lead, John Schmidt.
Titanium is now a scarce material given the sanctions against Russia. All Airbus and Boeing airplanes use the material. Photo Credit: Leeham News.
The reduction in output has eased some pressure on suppliers, allowing them to catch up on backlogs and recalibrate operations. However, Schmidt warned this respite may be short-lived as new challenges loom on the horizon.
Geopolitical tension involving Western nations and Russia, and the Asia-Pacific region, risks raw material shortages that may disrupt the delicate balance once more.
“The supply chain has evolved and changed in terms of where the focus is since COVID,” noted Schmidt in a sit-down interview with LNA at the Farnborough Airshow in July. “It wasn’t too long ago that we couldn’t get chips – chips were holding things back. It seems like we’ve gotten ahead of that, and now we’re dealing with trying to find other sources of supply, and sometimes it’s an issue with quality coming in.”
“What’s next is going to be sources of supply for things like titanium? There is enough in the supply chain already that has insulated the impact, but we’re starting to see early indications that [titanium] might be the next thing that comes up.” Read more