Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Services are driving revenues and profits in difficult times, Part II May 22, 2025
- Boeing publicizes fourth Chief Aerospace Safety Officer Report May 21, 2025
- Boeing’s 2025 annual safety report due this month May 20, 2025
- FAA’s data of accident, incidents, often not shared May 19, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 22. May 16, 2025
Puget Sound conference looks at Boeing, aviation
We just attended a two-day conference organized by the Pacific Northwest Aerospace Alliance, a major event in Seattle’s Puget Sound region.
Michele Dunlop of The Everett Herald wrote several stories; here are our impressions.
- Surprisingly, given the downturn in the economy, there were about 50 more attendees to the conference than last year. This speaks to the growing importance of this event and the desire on the part of suppliers to prepare for what all expect to be production cuts by Boeing.
- Although Boeing is now openly talking about a 10% production cut in 2010, two major suppliers at the conference we talked to believes this could happen in the second half of this year.
- Boeing on Tuesday at two separate investors’ conferences reaffirmed its schedule for first delivery of the 787 in 1Q10. One supplier we talked to at the PNAA conference believes first delivery will be later in the year than that.
- Airbus touted its US supply base at the conference. Washington State ranks #4 in terms of dollars spent in the US.
- Washington State and Snohomish County (Everett, where the wide-bodies are built) officials at the conference are considering strategies to keep Boeing’s next new airplane programs in Washington and Everett. Proceeding on the assumption that Boeing may try to relocate these to other states, the county economic development group in particular is concerned that Legislators don’t believe Boeing might pick up and move–that all discordant notes espoused by Boeing are just talk. (Our comment: the Legislators seem to have short memories; Washington barely retained the 787 assembly; Boeing officials have about had it with the unions.)
- Richard Branson’s tongue-lashing of Boeing and the unions was a topic of networking discussion. One Seattle newspaper reporter who covered the Branson threat to cease buying Boeing because of labor strife at the company believes the entire tirade was choreographed by Boeing and Branson to send a harsh message to the IAM, which struck the company for 57 days–delaying delivery of a Boeing 777 to Branson’s VAustralia airline.
787 lightning protection
Dominic Gates at The Seattle Times had a long story Sunday (Feb. 8, 2009) about the Federal Aviation Administration relaxing rules on lightning strikes as too stringent and which the new composite Boeing 787 cannot meet.
The rules, adopted following the in-flight destruction of TWA Flight 800, a Boeing 747 (which crashed for reasons other than originating with a lightning strike), could not be met by other manufacturers, either, according to the Gates story. What we find eyebrow-raising is that the FAA proposes changing the rules to permitting only one system for lightning protection, abandoning the decades-long concept of redundancy for safety.
You have to read the Gates story for the details and why the FAA thinks this move is OK in the case of the 787.
But we’ll point out that there is a recent example of an aircraft design without a second back-up system leading to a fatal crash: Alaska Airlines Flight 261, when the McDonnell Douglas MD-83 lost control, inverted and crashed into the Pacific Ocean when the vertical tail’s jackscrew failed. This system controls the horizontal stablizer on the top of the T tail. Alaska, with approval of the FAA and Boeing (which by then had acquired McDonnell Douglas), changed suppliers for the grease and the maintenance interval for the jackscrew. This proved a mistake; the new grease wasn’t as durable as the old. Then the grease wore out, the jackscrew failed and because there wasn’t a second system, the flight crew lost control of the airplane. Everyone was killed in the ensuing crash.
Airbus A400M program in doubt: report
Just so readers don’t think Boeing is the only one with problems, Germany’s Der Spiegal reports things may be going far south with the Airbus A400M. Here’s their report, via Business Week.
Boeing: 2010 production cut possible
James Bell, the CFO of The Boeing Co., appeared today at a Cowen & Co. investors conference. Here is a synopsis of his presentation, as he gave it. The third bullet point refers to potential production cuts in 2010.
- This is one of the toughest commercial and financing markets we’ve ever seen.
- 2008 challenging: progress made, but outweighed by IAM strike and financial markets.
- 2009: expect up to $68bn in revenue as return to full production rates (from the IAM strike.) We still think stable production rates for commercial are appropriate, based on conversations with customers, strike-adjusted schedules. 2009 financial guidance assumes may have to make modest schedule adjustments starting in 2010 [NOTE: this statement is more definitive since the earnings call last week–see our additional comment at the end of this column]. (No detail on possible production rates was provided.)
- If network carriers don’t start taking delivery of new airplanes in next several years, they will face unmanageable fleet replacement in the middle of the next decade.
- Productivity on mature programs: 737 has been on Lean track for years, 777 improved by 20% with more improvements possible.
- Boeing Capital Corp. believes it has adequate sources to support airplanes in 2009 from diverse sources. BCC will be financing in 2009, the first time in several years. We assume BCC will finance $1bn this year, issuing debt to cover a large portion of this.
- Defense: International markets provide significant growth opportunities from 14% of revenue in 2008.
Q&A begins:
LCAL Cancels 787 order
Also see the Updates after the jump.
LCAL, based in Dubai, has canceled 16 Boeing 787s, it has now been confirmed. This is the cancellation we wrote about on January 14 and hinted overtly about in this post.
LCAL canceled 16 of the 21 787s it had on order. Five of the aircraft were under contract to be delivered to Royal Jordanian, and these remain on the books to be delivered directly to the airline, we understand.
While the number of cancellations isn’t a “wow factor,” what is especially significant here is that LCAL was formed for the express purpose of being a 787 lessor. Because of the 787 program delays, canceling the order puts LCAL out of business, if the Royal Jordanian aspect of this is confirmed. (We’re working on that.)
We understand that penalties paid by Boeing, based on the delays, to LCAL are significant. Boeing attributes the cancellation to “tough challenges” and “other factors;” we understand this is really about the delays to the 787 program.
Assessing the 747 program
Since Boeing’s earnings call last week, spurred on by the Flight International and Everett Herald stories doubting the future of the 747-8 program, we’ve received media inquiries whether we think the program will be canceled.
For those who missed or already forgot our first post of 2009, the answer to this is No. We called 2009 the year of program recovery for Boeing, and this included then and includes now the 747 program. Nothing has happened to change our view.
Our post earlier this week, Keeping or Ditching the 747?, added some color and independent reporting to the stories in Flight and The Herald. We reported–as did Flight–that Boeing has run various scenarios about what to do with the program: cancel it entirely, or keep the freighter but cancel the passenger model, or slow the program down.
For those who understand Boeing’s way of doing things, running all scenarios is SOP, Standard Operating Procedure. For those who understand Boeing CEO Jim McNerney, he’s going to want all options laid out for him. This is his SOP.
Word of these studies quickly became known.
Ryanair and a GTF-powered A320/737
Jon Ostrower has an interesting think piece about the prospect of Ryanair ordering up to 400 Airbus A320s or Boeing 737s powered by the new Pratt & Whitney GTF, or Geared Turbo Fan P1000G.
We first broke the story that Boeing is evaluating the prospect of 737 “re-generation” for an article we did for Aviation and the Environment magazine. P&W is developing the engine for Mitsubishi’s MRJ regional jet and Bombardier’s CSeries, but both airplanes are small. The MRJ seats 70-90 and the CSeries 110-149, but the MRJ has only one order in Japan and the CSeries continues (at this writing) to be stillborn. P&W has been developing the GTF for 20 years; without re-engining the A320 or 737, this investment is pretty much down the drain.
With Boeing and Airbus seemingly putting off a full replacement airplane for their prime jets until around 2020 or even later, airlines–notably Southwest–want a more fuel efficient airplane before then. The GTF would save 12%-15% on fuel burn. As we wrote for AE magazine, Boeing is on track to make some decisions for a 737RG this year with a prospect for an EIS in the 2013-15 period. This is a timeframe P&W can meet to provide the GTF to Boeing.
Airbus, of course, provided an A340-600 test bed for P&W to get some good data for the GTF. This information went to Airbus’ R&D department, where evaluation of a GTF A320 is almost a certainty.
Or not. James Wallace of The Seattle Post-Intelligencer reports that Airbus super-chief John Leahy says there aren’t any talks going on with Ryanair.
FAA weighs in on 787 flight test timeline
Update, Feb. 8:
The Puget Sound Business Journal has this article focusing on the certification timeline.
Original Post:
Boeing has publicly said that it plans a flight test timeline of 6-8 months, depending on when Boeing was making its public statements (it’s been a bit of a moving target). The latest information appears to be an 8 month timeline.
Boeing forecasts making its first flight of the 787 in the second quarter; its internal timeline was about April 20 or 24 (first reported by Air Transport World) but we understand this is now a To Be Determined date, with an internal timeline in June–still within the second quarter, it must be noted. (We previously predicted a first flight in the June-August period, and are at the moment sticking to this.)
All Nippon Airlines, the launch customer set to receive the first airplane, said it expects delivery in February 2010. This reaffirms the anticipated eight month flight test forecast made by Boeing, assuming a June first flight. If the first flight comes as late as August, a February delivery to ANA still is theoretically possible if a six month flight test program can be achieved.
As we previously reported, Boeing has reorganized its flight testing department with the intent of increasing manpower and efficiencies. Full implementation isn’t expected until September, about mid-way into the currently projected 787 flight testing timeline. This suggests the 787 flight test program may partially benefit from the reorganization.
As many have written, previous Boeing test programs have taken 11 months or more and aerospace analysts seem fairly well united in predicting a year-long flight test program is more realistic for the 787 than that suggested by Boeing. So we asked the Federal Aviation Administration what it thinks about the timeline. Here’s the answer.
Keeping or ditching the 747-8?
When Boeing CEO James McNerney gave a somewhat mixed assessment of the 747-8 program last week during the earnings call, this set off a couple of key stories about the future of the airplane.
Michele Dunlop of The Evertt Herald wrote this interesting piece, published today. Max Kingsley-Jones of Flight International beat her to the punch slightly with this story on Saturday.
As readers know, we’ve been closely following the 747-8 development for more than a year and were the first to report that delays were likely.