Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Supplier Howmet exceeds expectations despite tariffs May 1, 2025
- Airbus 1Q2025 results: So far, so good, but US tariffs make future results unpredictable May 1, 2025
- Does an Airbus A220-500 need a new wing and engines? May 1, 2025
- 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
Pontifications will return July 18
Scott Hamilton is taking some time off. Pontifications will return July 18.
P2F conversion constrained by feedstock, certification issues
Subscription Required
By Judson Rollins
July 3, 2023, © Leeham News: As the supply chain chaos of the past two years finally winds down, the air cargo industry is trying to prepare for future growth.
IAI’s first 777 converted freighter, intended for Kalitta Air, has not flown since its initial testing flight on March 24. Source: IAI.
However, in an ironic twist, the industry’s near-to-intermediate term runway is constrained by some forces that propelled its supernormal profitability during the pandemic and recovery.
Thanks to growth in e-commerce, many industry observers revised their long-term growth forecasts upward. Cargo traffic growth estimates vary widely, from Cirium’s conservative 20-year expectation of 3.0% per year to Boeing’s optimistic call for 4.1% annually through 2042.
This year’s demand environment is less rosy as global trade falters, seaport backlogs have mostly cleared, shippers of high-value industrial goods suffer from microchip and other key commodity shortages, and recovering passenger airline service drives a glut of lower-deck “belly” capacity on most trade lanes.
The International Air Transport Association (IATA) recently said it expects air cargo demand to fall by 3.8% and revenues to contract by one-third for the full year. Cargo volumes were already down 5.3% year-over-year through April, said IATA.
Summary
- Express carriers are most exposed to short-term pain, but long-run prospects are brighter.
- Non-express carriers continue to be hard hit by excess capacity.
- Freighter conversion feedstock supply is tight.
- 777 P2F conversion slowed by possible certification issues; Boeing poised to sell more 777Fs?
Machinists at Spirit vote to end strike; will return to work on July 5
Machinists Union members in Wichita, KS, wait in line to vote on a second contract offer from Spirit AeroSystems Thursday. The offer was approved with a 63% yes vote. Spirit will resume production of critical Boeing aircraft components on July 5./International Association of Machinists photo
By Bryan Corliss
June 30, 2023, © Leeham News – Machinists Union members working for Spirit AeroSystems in Wichita, KS, will return to work on July 5, after ratifying a new four-year contract with the company.
Some 63% of Local 839 members voted in favor of the contract on Thursday, union officials said. Spirit’s first offer was rejected by 79% of union members voting.
“This membership vote by the majority of 63% is a move in the right direction for our local,” said Cornell Beard, the president of IAM District 70, the parent organization of Local 839. “Let’s work hard to set ourselves up for the big win in four years too.”
In a statement, Spirit leadership welcomed the yes vote, and said they would “closely coordinate” with suppliers and customers as the company restarts production.
Workers will start today preparing for the production restart after the Fourth of July holiday, the company said. The plant has been closed since June 22, the day after Local 839 members rejected the first offer.
- Strike closes plant for less than two weeks
- Workers get 9.5% raise this year, plus bonus
- Second offer ‘what we worked for’
Bjorn’s Corner: New aircraft technologies. Part 19. Supersonic drag
By Bjorn Fehrm
June 30, 2023, ©. Leeham News: In our discussions about the drag of an airliner, we now cover the most complex drag type, Wave drag, or the drag created when the air goes from subsonic to supersonic flow.
We will focus on the physical understanding of what’s happening as the math behind the drag calculation is complex.
Figure 1. The Concord is designed for low Wave drag. Source: BAC and Aerospatiale.
The Small Airliner Problem, Part 9. Maintenance costs for battery airliners with range extenders
Subscription required
By Bjorn Fehrm
June 29, 2023, © Leeham News: In our series on fundamental costs factors that make up Cash Operating Cost, COC (Fuel, Maintenance, Airway/Airport fees, Crew costs) for new Green airliners, we have analyzed the energy costs and now move on to the maintenance costs.
For a battery-based airliner with range extenders, it’s a complex mix of battery and gas turbine costs.
Figure 1. The Heart Aerospace ES-30 hybrid 30-seat airliner. Source: Heart Aerospace.
Summary:
- The maintenance costs for a battery-based airliner are high. It’s the batteries that cost, not the electric motors.
- Adding range extenders complicates the propulsion system and adds further costs.
Striking Machinists to vote Thursday on revised contract offer from Spirit
Striking Machinists Union members outside the Spirit AeroSystems plant in Wichita, KS./ Wichita Business Journal photo
(Subscription required)
By Bryan Corliss
June 27, 2023, © Leeham News – Striking Machinists Union members at Spirit AeroSystems in Wichita will vote Thursday on a new contract offer from the company.
“The parties have reached a tentative agreement with the unanimous support of the entire Local 839 bargaining committee,” the union said Tuesday.
The tentative deal, which comes after three days of meetings between Spirit and union negotiators with a federal mediator, replaces the original offer rejected on June 21. Spirit shut down production at the Wichita plant the next day, and the union began picketing outside the factory on Saturday.
Spirit CEO Tom Gentile said his team “listened closely and worked hard in our talks over the last several days to further understand and address the priorities of our IAM-represented employees.”
Senior regional leaders of the International Association of Machinists are strongly recommending the deal.
“The contract is an industry-leading agreement that should make our members extremely proud,” IAM Southern Territory General Vice President Rickey Wallace and his chief of staff, Craig Martin, said in a statement released by the union.
A quick resolution to the walk-out would benefit Boeing. The Spirit plant in Wichita provides 70% of Boeing 737 aerostructures, along with nose sections for all other Boeing aircraft. It also provides components for the Airbus A220.
Thursday’s vote would require a simple majority for ratification. If it fails to get majority support, the strike would continue.
- Deal walks back unpopular health plan changes
- Bigger raises, reduced signing bonus
- Contract would end mandatory weekend overtime
- Union announced vote after meeting with stewards
Update: Spirit presents revised contract offer to striking Wichita Machinists
Striking workers outside the Spirit AeroSystems plant in Wichita, KS./Wichita Business Journal photo
By Bryan Corliss
June 21, 2023, © Leeham News – Spirit AeroSystems has presented a revised contract offer to striking members of the International Association of Machinists.
“We have delivered a revised offer to the IAM following days of positive discussions with IAM representatives, along with the assistance of the federal mediator,” the company confirmed to LNA. “We remain committed to reaching a timely and fair resolution.”
IAM District Lodge 70 in Wichita, which is the parent organization for striking members of Local 839, announced Monday night that it would hold a mandatory meeting for union stewards today to discuss a contract offer. However, from the statement, it wasn’t clear whether the meeting would be to cover a new offer, or review the one that workers rejected with a 79% no vote June 21.
This morning, however, Spirit confirmed to Wichita station KSN-TV, as well as the Wichita Business Journal, that it had presented a revised offer to the IAM. Any details would be released later in coordination with the union, Spirit said.
Spirit and IAM negotiators have been meeting with a federal mediator since Saturday.
If Spirit has presented a revised offer, it would not be surprising that the union’s negotiating team would want to review it with union stewards before deciding whether to take it to the entire membership for a vote. The union stewards are full-time employees of Spirit who volunteer as union representatives to assist their coworkers in resolving questions surrounding pay, benefits and other contract questions. As such, they will have the best sense of how their coworkers would respond to the new offer.
Picket lines went up around the factory just after midnight Saturday morning. Today, with thunderstorms in the forecast, Spirit invited strikers to take cover in the shacks manned by security guards at the factory’s various gates. “Our primary concern is for their safety,” the company said.
Pontifications: A330neo, still struggling, nears 300 sales
By Scott Hamilton
June 27, 2023, © Leeham News: Airbus inked a memorandum of understanding with lessor Avolon for 20 A330-900s at last week’s Paris Air Show. When converted to a firm contract, this will bring the -900 order book to 299. Another 12 of the short, longer-range A330-800 make the total 309.
This compares with 664 A330-200s, 784 A330-300s and 38 A330-200Fs. The A330ceo is one of Airbus’ best-setting widebody airliners. The entire A330ceo and neo families are Airbus’ best-selling widebody, followed by the A350 family. The original A300/A310 family is third.
However, the A330neo has struggled in the market. First offered in 2014, it was the last of the new generation twin aisle airplanes up to that point. Boeing’s 787 and the A350 preceded it. Through May, 2,096 gross orders were placed for the 787. Nearly 600 remain in the backlog.
Why hasn’t the A330neo done better? In an interview with LNA at the air show, Christian Scherer, Airbus’ chief commercial officer, said there were two factors.
Analysis: What went wrong in Wichita for Spirit and IAM
Striking members of Machinists Union Local Lodge 839 outside the Spirit AeroSystems plant in Wichita, Kans./Photo by The Wichita Eagle
Subscription Required
By Bryan Corliss
UPDATE: The two sides will continue talks with a federal mediator on Monday. In a statement, Spirit AeroSystems CEO Tom Gentile said the negotiating teams “have been working hard and making good progress.”
“We will continue discussions this week and remain committed to a timely resolution on a fair and competitive contract that addresses the priorities of our employees and other stakeholders,” he said.
Local 839 negotiators told their members that “with the mediator’s help, we are progressing toward getting another offer to the membership for consideration.”
June 26, 2023, © Leeham News – Strikers in Wichita broiled under a hot summer sun this weekend, as the International Association of Machinists’ strike against Spirit AeroSystems got under way.
The good news, for everyone who’s watching in the North American aerospace industry, is that the two sides resumed talks Saturday, with the help of a U.S. federal mediator.
This walk-out caught a lot of us by surprise. Insiders I talked with before the vote didn’t expect a strike. Equity analysts confidently projected the risk of strike as “very low.” Spirit itself must have been confident, because it sent much of its senior leadership team to Paris for the air show.
So what went wrong? Clearly both Spirit management and the union’s negotiating team misread the mood, and badly.
We took a deep dive into what workers are saying on social media about the contract. As we’ve noted in the past, social media posts aren’t the same as scientific surveys, but they do give some insight into the mood in Wichita.
And what they reveal is that there was a lot of frustration around some specific issues, which was exacerbated by the fact that IAM Local Lodge 839 had been locked into its recently expired contract for 13 years, during which pay and benefits stayed the same inside the factory, while literally the whole world changed outside it.
- Workers didn’t like many contract specifics
- No way to predict how long strike will last
Spirit AeroSystems and Machinists Union return to negotiations Saturday
Subscription required
By Bryan Corliss
June 23, 2023, © Leeham News — Negotiators for Spirit AerosSystems and International Association of Machinists Local Lodge 839 will resume negotiations Saturday, in hopes of reaching an agreement that would resolve a strike set to begin just after midnight tonight.
A Wichita Eagle photo of orange security fencing up around the Spirit AeroSystems plant in Wichita, Kan.
The meetings, which will include a federal mediator, will start about 10 hours after the walkout begins.
The strike, involving some 6,000 union-represented hourly workers at Spirit’s Wichita plant, threatens significant disruption to the wider aerospace industry — particularly at Boeing. The Wichita plant produces 70% of 737 aerostructures, along with the forward sections of all Boeing commercial jets.
It comes after workers rejected a proposed four-year deal on Wednesday, with 79% voting no and 85% voting to strike.
- Company: Two sides have been talking
- Worker: ‘Feathers on a dog don’t make it a chicken’