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
Boeing defends 787, 777 against whistleblower charges
By Scott Hamilton
April 17, 2024, © Leeham News: A whistleblower appeared before the US Senate today recommending that the entire fleet of Boeing 787s be grounded until inspections can be performed to assure safety.
The whistleblower, Sam Salehpour, is a Boeing engineer who worked on the 787. He claims he was moved off the program by Boeing in retaliation for raising safety concerns about the 787 and the 777. Boeing denies this charge.
Salehpour went public with his safety charges a week ago. He focused on the small gaps between fuselage sections and other areas on the airplane that failed to meet Boeing’s own specifications. Production gaps, where parts of the airplane are mated, are common. Boeing and other manufacturers use shims to fill these gaps.
This illustration, which is not to scale, shows how gaps develop, how joins are pulled together and how shims fill gaps that remain. The gaps are 0.005 to 0.008 inches wide–about the thickness of a piece of paper. Source: Boeing.
In 2020, Boeing revealed that in some cases, the gaps were greater than the 0.005 inches of its own specifications. Gaps of 0.008 inches were found. The gaps are the thickness of a piece of paper. Boeing initially grounded eight 787s for inspection.
In October 2020, Boeing suspended delivery of the 787 for what would eventually be 20 months. Deliveries already had been deferred by customers because of the COVID-19 pandemic. Ultimately, Boeing has 110 787s parked that were completed. After a lengthy process with the Federal Aviation Administration, the FAA approved Boeing’s fix. The fuselages of the 110 airplanes have to be inspected and measured. If repairs are necessary, it takes longer (5-6 months and in some extreme cases, 7-8 months) to complete than it does to assemble the airplanes in the first place. There are about 40 787s still awaiting rework.
Dissecting Boeing CEO’s statement next new airplane will cost $50bn
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By the Leeham News Team
April 15, 2024, © Leeham News: It was a stunning number.
Boeing CEO David Calhoun said his successor will have to decide on whether, or how, Boeing will proceed with its next new airplane. The price tag, he said, will be $50bn.
The Bombardier C Series was the last all-new, widely used single-aisle jetliner design completed and in service today as the Airbus A200. China’s C919 has only a handful of aircraft in service and Russia’s MC-21’s EIS is uncertain. Credit: AP Canada.
No airplane program at Boeing, except for the 787, ever came close to this cost. No program at Airbus did, either—and certainly none came close at Bombardier or Embraer.
The 787’s cost was a financial and industrial nightmare. Design, production, and industrial snafus combined to create delivery delays of 3 ½ years. Deferred production and tooling costs reached a peak of about $32bn. Customer compensation and other factors are believed to have boosted the total cost to around $50bn, a figure Boeing never confirmed.
On March 25, Boeing announced Calhoun will retire no later than Dec. 31. Chairman Larry Kellner won’t stand for reelection to the Board of Directors at the annual meeting (date TBA). Stan Deal, the CEO of Boeing Commercial Airplanes (BCA), retired immediately. He was replaced by Stephanie Pope, the former CEO of Boeing Global Services and current EVP and COO of The Boeing Co. Pope’s new role at BCA is in addition to her corporate position.
Shortly after the Monday Morning Massacre, Calhoun appeared on the financial network CNBC and, among other things, made his stunning price tag prediction. It’s a figure he referenced in passing before—but this time it caught the attention of broader media.
Single-aisle airplane programs historically cost between $10bn and $12bn. Widebody programs cost between $15bn and $20bn, excluding cost overruns. Bombardier’s C-Series, the most recent all-new, widely used single-aisle airplane, cost an estimated $6bn before Airbus took over.
Boeing hasn’t done an all-new new single-aisle airplane since 1982’s 757. Airbus hasn’t done an all-new single-aisle airplane since 1984’s A320.
LNA explains Calhoun’s number below.
Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency
By Bjorn Fehrm
April 12, 2024, ©. Leeham News: We have started an article series about engine development. The aim is to understand why engine development now dominates the new airliner development calendar time and the risks involved.
To understand why engine development has become a challenging task, we need to understand engine fundamentals and the technologies used for these fundamentals. We started last week with thrust generation, now we develop this to propulsive efficiency.
Figure 1. The base engine in our propulsive efficiency discussion, the CFM56-7 for the Boeing 737ng. Source: CFM.
A350-1000 or 777-9? Part 2
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By Bjorn Fehrm
April 10, 2024, © Leeham News: We are doing an article series comparing the capabilities of the Airbus A350-1000 and the Boeing 777-9. The A350-1000 has not been a hot seller, and a lot of analysts asked why. Is there a capability gap or what is the reason?
At the same time, the reworked Boeing 777X had reassuring initial sales at the November 2013 launch at the Dubai Air Show, where Emirates ordered 150 777-9 out of a total show orderbook of 259 aircraft for Emirates (150), Qatar (50), Lufthansa (34), and Ethiad (20). The orders have since grown to 481 as of late 2023.
The A350-1000 has had a recent resurgence in orders and switches from the A350-900 orders, whereas the 777–9 has seen several delays due to engine and certification problems and is now scheduled for 2025 delivery instead of 2020.
Does the 777-9 or the A350-1000 hold the upper hand in a long-term race between the largest widebodies after the Airbus A380 and Boeing 747-8i stopped deliveries? We use our Aircraft Performance and Cost model to compare the two to understand their present performance and potential for upgrades.
Summary:
- The Boeing 777-9 is a larger and heavier aircraft with a 12% higher passenger capacity.
- Does an advanced wing and later generation engines compensate for an older and heavier fuselage structure?
Pontifications: Boeing “transparency”–not so much.
By Scott Hamilton
April 9, 2024, © Leeham News: “Since [Aircraft Certification, Safety, and Accountability Act] ACSAA became law, Boeing has supported implementation of the legislation, including providing full transparency for the FAA’s expert review panel in its evaluation of our safety culture and other safety measures,” Boeing said in a statement responding to questions from The Seattle Times. “Over the past several years, we’ve taken a number of significant actions to strengthen our safety practices and culture. (Emphasis added.)
“We put safety and quality above all else, and continue to make significant changes to our culture, production and processes as we strive to improve.”
I couldn’t believe my eyes when I read this in the second major front page article by The Seattle Times dissecting how Boeing has become an industrial embarrassment.
Make no mistake. I want Boeing to be a healthy, thriving company. Commercial aviation needs a healthy Boeing to compete with a healthy Airbus. As a reporter and commentator, I want to balance the negatives with the positives. But since the 2018-2019 MAX crisis, there has been little positive to find about Boeing to write or say.
The reason I couldn’t believe my eyes with Boeing’s statement above, referring to the Federal Aviation Administration’s Expert Panel, is buried within the 50 page report. It also is at variance with decades of my experience, and that of other journalists, in dealing with Boeing.
Airbus charges and write-offs since 1999: more than €33bn
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By Scott Hamilton
April 8, 2024, © Leeham News: The A400M is Airbus’s biggest financial albatross when it comes to taking charges and write-offs, an analysis shows.
LNA last week reported Boeing’s long history of charges and write-offs that arguably hurt shareholder value in a company that’s placed this metric ahead of all others since the 1997 merger with McDonnell Douglas Corp. (MDC). Boeing has written off or taken charges of more than $73bn since 1996, the last year before the merger.
Airbus’ public records go back to 1999. Since then, the company wrote off more than €33bn (about $35bn using today’s exchange rate). This is about half of Boeing’s $70bn from 1999 through 2023.
The A400M military transport has been a financial thorn in Airbus’ side since inception. More than €10.5bn has been written off. Airbus’ other financial albatross, the A380, saw write-offs of €3.7bn.
Airbus’ infamous bribery scandal resulted in $4.2bn in European and US fines. Of this, $500m was paid to the US Justice Department for violating ITAR rules, which govern technology transfer to restricted governments such as China. (Notably, Boeing paid a criminal penalty fine of just $244m to Justice in connection with the two 737 MAX MCAS crashes in 2018 and 2019 in which 346 people died.)
The A350 program resulted in charges and write-offs totaling €2.57bn.
Airbus purchased Bombardier’s C Series for $1 for 50.1% control of the program. Airbus completed this purchase in 2018, taking a €2.6bn charge the same year for the purchase (and has invested billions of euros since then).
Below are two charts detailing the charges and write-offs. The first is by year and the second is by category.
Related Article
Boeing took +$73bn in charges since 1996
Airbus charges by category
Airbus charges and write-offs by year
Bjorn’ s Corner: New engine development. Part 2. Thrust generation
By Bjorn Fehrm
April 5, 2024, ©. Leeham News: We started an article series about engine development last week. The aim is to understand why engine development nowadays dominates the needed time and the risks involved in new aircraft development.
To understand why engine development has become perhaps the most challenging task, we need to understand engine fundamentals and the technologies used for these fundamentals. We start this week with thrust generation.
Figure 1. The principle for thrust generation using air as medium. Source: NASA.
Airbus’ A350-1000 or Boeing’s 777-9?
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By Bjorn Fehrm
April 4, 2024, © Leeham News: Korean Air confirmed an order for 33 Airbus A350 in the week, 27 of which are the larger A350-1000. The order is significant on two accounts:
First, 27 A350-1000 and only 6 A350-900, where analysts have for years asked why the -1000 isn’t selling.
Secondly, for a carrier that has a rather 50-50 fleet of Airbus and Boeing planes, its large widebody was the Boeing 777-300ER, whereof it has 27 out of 37 Boeing 777 in total. Korean Air now chooses the A350-1000 to replace the 777-300ER. Why not the 777-9?
Was this a question of availability (the 777-9 should have been delivered in 2020 but has had several delays; the present plan says 2025), or was there a technical-economic reason for Korean Air’s decision? We examine the characteristics of the two planes to find the answers.
Summary:
- The Boeing 777-300ER was an exceptionally successful stretch of the original 777-200. The 777-9 is the sequel to the 777-300ER.
- The market did not like the original A350-1000. Therefore, the present -1000 is a reconfigured aircraft compared to the original variant.
Boeing wrote off, took charges in excess of $70bn since McDonnell Douglas merger
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By Scott Hamilton
April 1, 2024, © Leeham News: The Boeing Co. wrote off or took forward loss charges of more than $70bn since the 1997 merger with McDonnell Douglas Corp. (MDC). That’s when most legacy Boeing employees and many observers view the inflection point when Boeing became focused on shareholder value vs the engineering legacy that once defined the company.
LNA has tracked Boeing’s charges and write-offs for years. We’ve also tracked Airbus’ performance since 1999 financial reporting. From then through 2023, Airbus took charges and forward losses of more than €33bn. At today’s exchange rate, this is about $35bn. During the same period, Boeing’s figure was more than $70bn, twice that of Airbus.
From 1997 through 2019, when Boeing suspended stock buybacks due to the first 737 MAX crisis, Boeing spent more than $60bn in stock buybacks to boost shareholder value, according to an analysis for LNA.
For a company focused for decades on shareholder value, the write-offs and charges is a lot of money out the door.
A detailed analysis reveals a surprising detail. More than half of Boeing’s charges and write-offs come from Boeing Commercial Airplanes–$44.66bn. More than $22bn was incurred since 2020, when the MAX crisis and the COVID-19 pandemic were in full swing.
In the charts below, LNA breaks down the charges and write-offs under each chief executive officer beginning with Phil Condit, the CEO who engineered the merger with MDC. Unsurprisingly, most of the charges came under current CEO David Calhoun and his predecessor, Dennis Muilenburg because of the MAX and the pandemic. Fixed price defense contracts also were major contributors. The KC-46A refueling tanker and Air Force One lead the way.
Bjorn’ s Corner: Engine development. Part 1. Introduction
March 29, 2024, ©. Leeham News: We finished our article series about New Aircraft Technologies last week. It dealt with the different new technologies that a next-generation airliner could use to increase efficiency and by it environmental emissions.
An area that we touched upon but didn’t dig deeper into was engine development. When airframe development historically decided how long a new generation of aircraft took to develop, it gradually changed to engine development being the more calendar-time-consuming and riskier development for the last generations. This article series will discuss why and what can be done about it.
Figure 1. CFM RISE, a new engine development for the next generation of airliners. Source: CFM.