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
Odds and ends: More on DC-7B trip
Here are some more photos from our DC-7B trip. All photos by Scott Hamilton.
This PBY Catalina, a derelict but intact condition, is at the San Juan Airport. Given the loss of a PBY several years ago in a landing accident, could this become a new, restored edition?
Historical Flight Foundation’s DC-7B: Trip Report
I had the opportunity this month to join a group of 50 aviation geeks on the first international passenger flight of a Douglas DC-7 in decades.
Historical Flight Foundation’s Eastern Airlines DC-7B restoration, Opa-Locka Airport (Miami) prior to boarding for our trip to St. Maarten. Photo by Scott Hamilton.
This airplane, N836D, was delivered to Eastern Airlines in 1958. It flew with Eastern for about seven years and was sold to the Nomad travel club, which operated it for a number of years, still with the EA interior, before selling it to a third party who intended to create another travel club but never completed funding. It sat in St. Paul (MN) for 33 years until the owner of Florida Air Transport (FAT) discovered it and bought it. The Historical Flight Foundation was created for restoration to full EAL 1958 colors.
Ralph Pettersen, who was on the HFF trip, several years ago wrote this article with photos of the interior of the DC-7B as it had been stored at the St. Paul Airport.
Wikipedia has this history of the DC-7. Eastern ordered 49 DC-7Bs, more than any other carrier. According to the book, From the Captain to the Colonel, a history of Eastern by the late Robert Serling, EAL’s CEO Capt. Eddie Rickenbacker over-ordered the DC-7, knowing the jet-powered Boeing 707 and Douglas DC-8 were around the corner. (Eastern ordered the DC-8.) According to the book, had Eastern ordered fewer DC-7s and Lockheed Electras and more DC-8s, Eastern would not have been at a competitive disadvantage during the early years of the jet age.
Analyst takes on Boeing’s investors’ days
Here is what the analysts are saying about the Boeing investors’ days this week:
From Wells Fargo:
- 787 and Ramp Up. Overall, we believe the biggest issues that investors have been trying better to understand are (1) the ability of Boeing to ramp up production of the 787 to 10 per month in 2013; (2) the program accounting for the 787; and (3) the plan for replacing the 737NG and its impact on R&D. Management did not give any more clarity to the production ramp up and thinks it has increased its visibility into the supply chain through MRP & IT systems and that it believes the Tier 1 suppliers should be able to support the ramp to 10 per month. Management is more concerned about Tier 2 & 3 where it has less visibility into their readiness.
Flight recorders narrow cause of AF447
Recovery of the flight recorders from Air France 447, an Airbus A330-200 that crashed into the Atlantic two years ago, appears to have quickly identified the events that led to the crash–and contrary to all those who claimed the vertical tail fell off or the A330 is a deathtrap, it appears the pilots simply weren’t trained properly to handle the events.
The Wall Street Journal has this detailed account of what investigators have found.
Lest anyone now charge that the failure to fly through the frozen pitot tube situation is exclusively an Airbus problem, Flight Global’s David Kaminsky-Morrow posted a link to a National Transportation Safety Report from 19– in which a crew stalled an airplane after the pitot tubes froze up and crashed, killing all aboard.
The aircraft? A Boeing 727-200.
The point: accidents like these often happen across OEM lines. And the actions of Airbus-haters was pretty disgusting.
Odds and Ends: $19bn cash turnaround for Boeing
We’re catching up from a week out of the office and one thing that especially caught our eye is this comment in a research note late last week from JP Morgan:
Potential cash turnaround on 787 is enormous. By the end of this year, Boeing plans to have amassed $19 bil in 787 inventory, most of which will consist of so called deferred production costs, or the extra cost above the long-term average to build the first few dozen aircraft. We expect the initial 787 block to be 1,000 aircraft, which should take ~8 years to deliver. Even if the program never contributes a penny of earnings and ends after that initial block, it should therefore generate ~$19 bil of operating cash flow over that delivery period, or an average of ~$3/share annually. While from an accounting standpoint this would be a reduction of inventory, it is best thought of as underlying cash profitability on the aircraft (say 20% margin on 120 units/year times $100+ million each) that is offset perhaps entirely by the amortization of the sunk cost from the delays. The potential $3/share of positive 787 FCF compares to an expected cash outflow of $8/share from 787 inventory build this year, plus another $3/share of R&D and capex, making the total 787 outflow ~$11/share. Overall, the vast majority of the cash flow improvement opportunity results from elimination of the cash outflow, so while the difference between a 20% margin and a 10% margin might be significant, it pales in importance next to simply getting the program ramped up and into the black.
Other items of note:
We’re back, looking at the WTO’s ruling on Airbus case
While we were gone, the WTO issued its ruling on the Airbus case, which was appealed by both sides.
There’s been plenty post-ruling analyses written already, and since we’re nearly a week later, we’re not going to add much to it except to point you to Aspire Aviation’s analysis and say this: Both sides won some and both sides lost some in this case. The USTR failed to achieve its top goal, and that is to have the WTO rule launch aid illegal, so blocking aid to Airbus to make the A350 XWB was a failure.
Flightblogger has a very good take on how both sides “spin” the final appeal report. The Wall Street Journal has a balanced view on who won and who didn’t.
This is a major defeat for the US–and for Boeing.
DC7 Challenge for our Readers
A quick post in connection with our DC-7B trip. We’ll put the following in context when we do some trip reports next week. In the meantime, we have a series of challenges for our Readers.
Here are the “rules” for the following questions:
- Only certificated carriers (scheduled, non-scheduled, flying clubs and cargo airlines) are “eligible” for these questions.
- In answering, list the airline, the final route and the date.
- No gun-runners, drug smugglers or mere ferry flights.
When flying had panache
We’re off May 15-21 on another adventure (the previous one we talked about being our Alaskan polar bear photo safari). This time we’re scheduled on a trip that includes 12 hours of flying in a Douglas DC-7B
This airplane was originally Eastern Air Lines and it was discovered, with the original EAL interior, and restored. Here is a story about this restoration.