Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Engine makers emphasizing durability, reliability June 4, 2025
- Boeing CEO: Lessons learned are key to certification of 737-7/10 and 777X June 2, 2025
- Digital twin is a key to JetZero’s hopes for Blended Wing Body entry June 2, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 24. May 30, 2025
- Does an A220-500 need a new wing and engines? Part 3. May 29, 2025
Boeing webcast on 787 8/27
Update:
Here is a 16 minute podcast about the conference call and news.
Original Post:
Here is a running recap of the Boeing webcast on the announcement today of the new schedule and $2.5bn charge.
Present on the call are CEO Jim McNerney, CFO James Bell, Scott Carson, CEO of BCA, and Pat Shanahan, VP Products at BCA.
McNerney (JM): There is no question the execution of this program has had challenges and there is work still to be done. We see the 787 adding tremendous value to the customers and Boeing.
Carson (SC): We are contacting customers with timing of deliveries. 787-9 first delivery in 4Q13. As part of schedule adjustment increased time between first flight and first delivery to address issues that might arise during testing. First three test airplanes, suitable for flight testing and certification, have limited commercial value.
787 Schedule, $2.5bn charge announced
Boeing’s Press Release: Note webcast at 0700 PDT referenced at the end.
The 787 is to fly by the “end of the fourth quarter” and frst flight in the 4th quarter of 2010. Production rate to 10/mo is now projected in late 2013, a year later than planned on the previously revised schedule.
Split view on 787 forward loss
During the 2Q09 earnings call, Boeing seemed to be laying the foundation that a forward loss might be forthcoming on the 787 program and some analysts shortly thereafter issued notes predicting there will be one. However, within the last two weeks two analysts that we know of have taken a different view. (We see reports from only six of the aerospace analysts who cover Boeing.) Read more
C-17 profile
Defense Industry Daily has a superb profile of the Boeing C-17. It’s timely because Boeing is ramping up efforts to convince Congress to fund more C-17s over opposition of the Air Force and the Obama Administration. Read more
Keeping Boeing in Seattle
Update, Aug. 26:
Bloomberg’s story; the Seattle Post-Intelligencer’s story; Charleston Regional Business Journal.
Update, Aug. 25:
KING 5 TV Seattle (NBC) reported today that Boeing will file for permits tomorrow to expand the Charleston, SC, plant in anaticipation of a Line 2 for the 787–but that no decision about placing the plant there has been made. The story may be found here.
Original Post:
On-line newspaper Crosscut has an interesting piece about the debate over how and whether to keep Boeing in the Puget Sound region (Seattle). (Link warning: Crosscut is very slow.) The debate is heating up again because of the recent purchase by Boeing of Vought’s 787 plant in South Carolina, and the presumption by many that this is a prelude to locating a second 787 production line there. Read more
Former defense official favors split tanker buy
George Talbot of The Mobile Press-Register has an article about John Lehman, a former defense official in the Reagan administration, favoring a split buy for the KC-X program. Read more
USAF Cadets work on tanker fuel burn reduction, and other things
US Air Force Cadets are designing wing refinements for the aging fleet of Boeing KC-135R tankers to improve fuel efficiency by 8%, reports CleanTechnica.com.
Why a bunch of cadets? Perhaps because the US Air Force Academy in Colorado Springs aerospace engineering programs ranks in the Top 5 in US News & World Report’s annual rankings (2009). (None of the universities or colleges in Washington State, where the KC-135 was built and where Boeing Commercial Airplanes is headquarter, ranks even in the Top 15 aerospace engineering schools.)
Airbus analysis
AirInsight’s Addison Schonland and Ernie Arvai have published a 54-page report about Airbus, A Market Analysis and Outlook. The report looks at each A3-Series program, including the forthcoming A350, and the A400M and KC-30.
A350/UK Funding
It’s a bit of old news this week, but as readers know the UK agreed to kick in GBP340m to fund the A350 development. Predictably, the US Trade Representative and Boeing objected. As long-time readers know, so do we. We don’t like government participation of any kind to corporations (it doesn’t matter what industry it is). Furthermore, at June 30, EADS had $9bn in cash vs. $5bn for Boeing.
Southwest loses Frontier bid
Southwest Airlines lost its bid to acquire Frontier Airlines in the bankruptcy auction this week. The bid was a long shot because its competition was Republic Holdings, a DIP lender to Frontier and the largest unsecured creditor. Read more
EADS short sales
A while back we published the short stock sales for Boeing. We’ve been trying to find short sales for EADS and the best we could do is find, through one of the US aerospace analysts, the EADS short sales in the USA, where the stock is traded Over The Counter (OTC).
The problem is that there are only an average of 230 trades per day, a volume that is so small as to be almost meaningless. Our analyst friend could not find any data in France about EADS short sales, but neither he nor we know if this is a function that the US data base used doesn’t find it or if by regulation this doesn’t have to be disclosed. If there are any Europeans who can fund the EADS short sales in France, Germany or any other market in which EADS stock is heavily traded, please send us the data on an Excel spreadsheet.
Meanwhile, here is the short sales record on the OTC market. Because the average daily trade is so small, the short interest ratios are huge.
Some good news for Boeing
Boeing could use some good news, following more revelations last week and this about the wing-body issues of the 787, and this is it.
Southwest Airlines plans a $113m bid for bankrupt Frontier Airlines in an auction next month. In a conference call, WN officials said that Frontier’s fleet of 51 Airbus A320 family members will be phased out in favor of Boeing 737NGs, probably over a two year period. (If WN wins the auction, government approvals will push consummation of the deal to the end of this year or into 1Q10.)