Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Parent agency, FAA often at odds as politics outweighs safety June 26, 2025
- Electric Flight and the Ugly Duckling June 25, 2025
- Engine makers tout “Plan A” but have “Plan B” backups in R&D June 23, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 27. June 20, 2025
- Pontifications: A Personal Note June 19, 2025
787 battery diagrams
Boeing Monday (Feb. 18) made available two battery diagrams for the 787 lithium-ion batteries.
Diagram #1
Diagram #2
- The New York Times has a Reuters article revealing the second battery on the ANA 787 had some swelling.
- Boeing was seeking extended ETOPS prior to the incidents, according to this article.
- Bloomberg News has this long article on the prospect of a SPEEA strike vote tonight.
- Where’s Waldo is a famous game. Where are the grounded 787s? See here to find out.
SPEEA vote due tomorrow
As if the Boeing 787 problems weren’t enough of a headache for the company, the second vote by its engineers will be counted tomorrow on a contract offer.
SPEEA members rejected the first contract offer from Boeing in October with a 96% vote. Boeing subsequently agreed to extend the current SPEEA contract provisions except for all issues related to the pension. The headline issue on this section is that Boeing wants to shift from a defined benefit retirement plan to a defined contribution plan. SPEEA says this results in a 40% reduction in benefits; Boeing says it’s less than that but still significant.
Boeing points out that all non-union employees are on a defined contribution plan and new hires for the unions should be, too. Current members would retain the defined benefit plan.
Boeing hopes this split approach will be enough to win approval for the new contract offer.
Also being voted on: whether members will grant SPEEA negotiations authorization to call a strike should the contract be rejected. Executive Director Ray Goforth has already said negotiators would not call an immediate strike, but they will seek a return to the bargaining table.
[Reuters has this article profiling Goforth.]
The hazard is that Boeing could withdraw its “Best and Final Offer” on all the other issues it agreed to and seek to renegotiate the entire contract rather than just the pension issues. Of course, this would incense union members and make a settlement ultimately that much more difficult.
Boeing needs the engineers to resolve the issues surrounding the 787, and to return the plane to service–the number one priority of 2013, says CEO Jim McNerney. The development programs of the 787-10 and 777X can wait (and, according to our information, these have been pushed to the right as a result of the 787 issues). Management’s lead engineer, Mike Delaney, basically said SPEEA members aren’t needed–that Boeing can rely on other engineers to resolve the 787 problems, a statement that went over like the proverbial screen door in a submarine.
In a webcast for SPEEA, Ray Conner, CEO of Boeing Commercial Airplanes, played the patriotic card, according to those who listened to it, by saying a strike would hurt customers and aid Airbus. (Boeing traditionally doesn’t comment on internal employee communications.)
We think the vote will be close, though we don’t know how to define it other than we don’t expect margins to remotely reflect the 96% rejection last October or the 85% rejection by IAM 751 in 2006 (and a similar strike vote). As we’ve talked to people, the sentiment seemed fairly evenly split with a tilt toward rejection and a strike vote.
Unlike IAM 751, which needs a two-thirds vote to strike, SPEEA needs only 50% plus one.
Votes will be counted tomorrow, Feb. 19; results will be known tomorrow night.
Odds and Ends: 787 likely grounded to May; More Batteries; Boeing’s 10K
787 Battery short-term fix: The Seattle Times has this story which recounts Boeing’s effort to design a short-term fix to get the 787 fleet flying again. The scenario outlined in the article suggests the 787 will be grounded at least until May. The story also paints a picture that if the grounding lasts nine months, production would have to slow and financial impacts will start to hurt Boeing.
More on Batteries:
The A350: Reuters has this story on Airbus’ switch from lithium-ion to current technology batteries.
The New York Times has this story about the different directions Airbus and Boeing are taking.
The Puget Sound Business Journal has a good story about the evolving technology of lithium ion batteries and even though the 787 is currently the world’s most advanced airplane, battery technology has advanced beyond the 787. PSBJ787Batteries
On Other Stuff
Boeing issued its annual 10K report on February 11. We were already engaged in the PNAA conference Feb. 12-14 and didn’t have a chance to read it until after the conference. The following excepts are from the 10K.
747 Program: The accounting quantity for the 747 program increased by 25 units in 2012, reflecting the normal process of estimating planned production under existing and anticipated contracts. We continue to incorporate changes identified during flight testing into previously completed airplanes. First delivery of the 747-8 Intercontinental occurred in February 2012.
The production rate increased from 1.5 to 2 airplanes per month in May 2012. Ongoing weakness in the air cargo market and lower-than-expected demand for large commercial passenger aircraft have resulted in pricing pressures and fewer orders than anticipated in 2012. We have a number of unsold Freighter and Intercontinental production positions beyond 2013. If we are unable to obtain orders for multiple Freighter aircraft in 2013 consistent with our near-term production plans, we may be required to take actions including reducing the number of airplanes produced and/or building airplanes for which we have not received firm orders. We also remain focused on reducing out-of-sequence work, improving supply chain efficiency and implementing cost-reduction efforts. If market and production risks cannot be mitigated, the program could face an additional reach-forward loss that may be material.
[787 Information]
[787 test airplanes]: During the fourth quarter of 2012 we finalized an order for one of the three remaining flight test aircraft. We continue to believe that the other two 787 flight-test aircraft are commercially saleable and we continue to include costs related to those airplanes in program inventory at December 31, 2012. If we determine that either of the remaining aircraft cannot be sold, we may incur additional charges.
[787 grounding]: We are unable to reasonably estimate a loss or a range of loss at this time because such estimates are dependent on the ultimate finding as to cause and the timing and conditions surrounding a resolution and return to flight. Any such resolution could have a material effect on our financial position, results of operations or cash flows.
Airbus drops lithium battery for A350
Airbus, A350 and Lithium battery: Airbus has dropped plans to use the lithium-ion battery in the A350. An Airbus official told us, “We confirm we are opting for nickel cadmium for the A350 main batteries to protect the programme schedule. This decision is about protecting the integrity of our program schedule… (it’s not about any safety concerns about Li-ion batteries, we continue in parallel to mature for the A350. With so much uncertainty raised by the Boeing 787 investigation, we are being prudent in order protect our programme schedule. This is business as usual.”
“As a result of making this decision now, Airbus does not expect it to impact the A350 XWB Entry Into Service schedule,” an Airbus statement added.
PNAA conference: Embraer Enhanced E-Jet improves fuel burn by 5%; talks of re-engine
The E175 Enhanced (a step below the full re-engine) will improve fuel burn by 5%, says Tobias Caldas of Embraer at the Pacific Northwest Aerospace Alliance. This includes a redesign winglet and other fuselage/engine PIPs.
Enhancements include new avionics, interior improvements, maintenance cost reductions and noise reductions. Aerodynamic improvements will be forthcoming on the E-190/195. The E1`70 will have a 5% improvement, the E175 will have 5.5%, the E190 3.5% and the E195 4%.
Republic Airways is the launch customer for E-Jet “E” and will operate the plane for American Airlines’ Eagle unit. The order brings the current backlog for the E-Jet to about 150. (Aerospace analysts have been concerned for some time about the shrinking backlog, with production rates exceeding a 1:1 book-to-bill.)
Embraer continues to promote the E_Jet as a right-sizing mainline aircraft in the 90-125 seat segment, with 3,765 forecast as a requirement in the next 20 years in this segment.
The re-engined E-Jet includes a new wing and the Pratt & Whitney GTF engines. EMB is calling the revised airplane the E-Jet Second Generation (E-Jet SG). EMB to formally launch the program this year, with EIS in 2018. The models and size are being defined (though our market sourcing says there will be an eight passenger stretch). EMB says there will be “double digit” fuel burn improvment.
Odds and Ends: 787-10/777X; 737NG engine issues; American-US Airways
787-10/777X: Aspire Aviation has this long analysis of the current status of these developmental programs.
737NG Engine Issues: Aviation Week on February 8 had a report of thrust irregularities on the Boeing 737NG. The Seattle Times reported it on line last night and in print today. And then the Seattle media went mad. We’re perplexed. The issue goes back five years, it happened 32 times and not since December when a fix appears to have–fixed it. What’s the big deal?
American-US Airways: The long-awaited merger was announced today and to our great relief, the US Airways management will run the place. American CEO Tom Horton is booted upstairs to non-executive chairman, much as was Glenn Tilton in the United-Continental combination. Unfortunately the AA-US merger keeps the awful tail livery rolled out by Horton a few weeks ago.
Allegiant Air sees starting commercial service at Paine Field by the fall
Allegiant Air, a discount carrier that serves Bellingham and other cities in Washington, and which started the studies for commercial aviation service for Paine Field in Everett (WA), said it sees starting air service at Paine Field this fall. “We’re in negotiations now. The first opportunity is in the fall,” says Jude Bricker, VP of Allegiant, who made the announcement at the PNAA conference.
Other stuff:
- Allegiant serves a half dozen cities from Bellingham, including Phoenix, Las Vegas and two cities in Hawaii with 15 flights a week.
- I am as bullish today about the business as ever. Will see real rationalization come to the space. Capacity will be rationalized. There is more ability to pass on higher costs.
- Allegiant serves about 200 markets. Scheduling is done for price. Thursday into Vegas, Sunday out. We don’t fly anything on Tuesday.
- We unbundle product because people who fly Allegiant are extremely elastic as to fares.
- $1.5bn market cap at $78 stock price.
- We schedule by week, by market. We always ask ourselves, what is the least crappy thing we can do with this airplane?
- Roughly we don’t make any money on air fares. We would lose money selling only fares. Ancillary revenue is the profit base.
PNAA Endorses Commercial Air Service at Paine Field
The Pacific Northwest Aerospace Alliance today endorsed commercial air service at Paine Field in Everett (WA). The move is highly controversial. The Snohomish County Council and the City Councils of Edmonds and Mukilteo, adjacent suburbs, oppose the service.
PNAA made the announcement at its conference in the Seattle suburb of Lynnwood, a few miles from Paine Field.
Allegiant Air, which also spoke at the conference, first proposed commercial service at Paine a few years ago. Alaska Air Group, based in Seattle and the largest carrier at SEA-TAC Airport, opposes service at Paine but has filed the paperwork with the FAA to commence service if Allegiant does. Alaska Airlines and sister company Horizon Air would provide some 50 flights a week to a half-dozen destinations. Allegiant proposes four or five flights a week to two or three cities.
PNAA, a trade group that represents more than 100 companies with nearly 100,000 employees, said commercial service will benefit the supply chain, employees and residents who live north of Seattle who currently have to rely on the congested I-5 and I-405 corridors to go to and from SEA-TAC. The Seattle area is considered one of the Top 10 most traffic congested cities in the country.
Paine Field has about 400 flights a day, only one-third of the airport capacity. Boeing’s wide-body production is at the airport and accounts for only about 5% of the operations. The balance is private aviation and MRO traffic.
PNAA Conference Pt 3: Renewable biofuels
The future of bio-fuel is different from the bio-fuel today, says John Plaza, CEO of Imperium Renewables. He is speaking at the Pacific Northwest Aerospace Alliance conference in suburban Seattle. It will be drop-in fuel, potential to be cheaper, meet same specifications as petroleum, equivalent to civilian (JP-8) and military fleets (JP-10).
First generation of bio-fuel is bio-diesel. Second generation will be the drop-in described above. Bio-fuels have to become multiple products as in the petroleum industry.
- We’re seeing increasing density of bio-fuels, which increases BTUs and efficiency on long-haul flights.
- WA State has one of highest recycling programs in the country but still generates a lot of trash (much of which is trained to Oregon). Trash can contribute to bio-fuel.
- Bio-fuel without subsidy costs around $4/gal vs $3.25 or so for jet fuel, so there is still a price disparity.
- 200 million gallons of jet fuel within 100 mile radius of wood slash can be generated.
- Other feed stocks: Jatropha, Eucalyptus, mixed growth plots. Algae is interesting but requires more research.