Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- 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
- Boeing First Quarter Results: Tariffs, Return flights, $10.55bn asset sale April 23, 2025
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
Boeing FY 2024: Capital raise, debt, order cash advances helped Boeing avoid running out of cash in 4Q
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By Karl Sinclair
Note: Boeing has not released its Securities and Exchange Commission filing (10-K) for the full year. Much of the analysis contained herein is based on press releases and previously filed statements, exact figures being unavailable and noted as such. A section of the analysis will also be based upon comments by CEO Kelly Ortberg and CFO Brian West, taken from the Jan. 28 earnings call. LNA reached out to Boeing and was told that the annual report was to be filed later today.
Feb. 3, 2025, © Leeham News: Financial documents reveal that The Boeing Company (BA) needed to make some very astute financial moves during 2024 to avoid running out of operating capital in the fourth quarter.
It did so by tapping into three sources: lenders, investors, airlines, and lessors (purchasers).
At the end of 2023, Boeing indicated on its Consolidated Statement of Cash Flows an ending balance of $12.691bn in cash and equivalents as of December 31, 2023.
Free cash flow (FCF) for 2024 was ($14.31bn), with ($4.098bn) used in 4Q2024 alone.
If Boeing does not make these moves, then cash burn ($14.31bn) will outstrip cash and equivalents of $12.691bn in the fourth quarter, and Boeing must dip into its revolving line of credit.
Boeing needed capital, and it needed it fast.
Bjorn’s Corner: Air Transport’s route to 2050. Part 7.
By Bjorn Fehrm
January 31, 2025, ©. Leeham News: We do a Corner series about the state of developments to replace or improve hydrocarbon propulsion concepts for Air Transport. We try to understand why the development has been slow.
We have covered the progress of battery-based aircraft and hybrids, both serial and parallel hybrids. A couple of mild hybrids have a larger chance of success than the ones we described. We will look into these and then start looking at different hydrogen-fueled alternatives.
Figure 1. The LEAP-1A with auxiliary gearbox. Source: Safran Transmissions.
Boeing sees achieving pre-MAX grounding production rates 8 years later
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By Scott Hamilton
Jan. 30, 2025, © Leeham News: When Airbus began to record more orders than Boeing in the early 2000 decade, Boeing’s CEO dismissed the shift.
Orders didn’t matter, sniffed Phil Condit. Only deliveries mattered. The statement ignored the obvious: if you didn’t have orders, you wouldn’t have deliveries.
For much of the past two decades, Airbus has been delivering more airplanes than Boeing. According to both companies’ forecasts, this trend will continue in the heart of the market in the coming years by a wide margin.
Deliveries of the 737 MAX are key to Boeing’s financial recovery. The cash flow and profits from the MAX line will drive Boeing’s ability to develop a new airplane. (This does not ignore the necessity of Boeing’s defense unit to get its financial house in order.)
Kelly Ortberg, Boeing’s CEO, appeared on the financial news network CNBC this week and said Boeing hopes to return to a production rate of 38/mo in the second half of this year.
“I’m not going put a date on when we need to get to rate 38 and get approval for the FAA to go beyond,” he said. “It’s more important that we do this right; we have a stable production system, we get through that, and I expect by the second half of the year, we’ll have that approval, and we’ll be moving to a higher production rate.”
Rate breaks in 5 every six months
Ortberg added, “Well, we’re planning to be at about 38 a month for the balance of this year, ramping up, and we’ll go in five-step increments every six months after that. On 787, we’re at five a month rate, moving to seven a month rate…hopefully, that’s in the next quarter or so.”
The 737 data can be extrapolated to suggest Boeing will return to the pre-MAX grounding rate (52/mo) in the first half of 2027. (Others are skeptical, and the ramp-up appears aggressive.) This would be eight years after the MAX was grounded on March 10-13, 2019, for what turned out to be 21 months.
Boeing was on its way to a rate of 57/mo by the end of 2019. Under the Boeing plan, this rate won’t be achieved until the end of 2027. If Boeing still believes demand supports this rate, a higher rate of 63/mo that was planned pre-grounding would follow in 2028.
Airbus will also increase its production rate. Production and delivery forecasts appear to place Boeing at a permanent distant second to Airbus as long as the competitors are the A320neo and 737 MAX.
Ortberg sees path with FAA for returning to full rate 737 production
By Karl Sinclair
Jan. 28, 2025, © Leeham News: Boeing’s CEO Kelly Ortberg, now five months into his job, painted an encouraging picture of the company’s path to recovery in an appearance on the financial news network CNBC before the 2024 full-year earnings call.
Kelly Ortberg, CEO of Boeing. Credit: Boeing.
Ortberg said there is a path for Boeing Commercial Airplanes to win approval from the Federal Aviation Administration (FAA) to return this year to a production rate of 38/mo for the 737 MAX. This is the rate before the Jan. 5, 2024, accident involving an Alaska Airlines 10-week-old MAX 9 in which a door plug blew off the airplane at 14,000 ft after take off from Portland (OR). The accident was traced to a production failure by Boeing. Nobody died, and the injuries were minor. The plane safely returned to Portland for an emergency landing.
Since then, production has trickled along at 20 or less per month. Returning to a rate of 38 and growing beyond is critical to Boeing’s financial recovery.
Ortberg told CNBC this path appears to be on track finally.
RTX 2024 Earnings: Pratt Progress on GTF AOG and MRO While Preparing to Seize the Advantage; Collins Battles BFE Supply-Chain
By Chris Sloan
January 28, 2025 © Leeham News: RTX chief executive Christoper T. Calio says the company’s number one priority is executing on its $218 bn backlog and meeting its commitment to customers – topped by the Geared Turbo Fan program. MRO and Original Equipment momentum has gathered pace in the last year since the powdered metal saga began two years ago.
“AOGs[Aircraft On Ground] have been stable. MRO output is the key enabler. PW1100 output was up 30% last year. So, very good, good progress in terms of material flow and in-shop performance,” he proclaimed. Pratt’s goal of 30% growth in 2025 will be governed by the supply chain – particularly powdered metal. The company didn’t disclose current AOG numbers – which have been up to 30% of the fleet, with protracted durations of up to a year commonplace.
Boeing: 2024 Earnings-another bad, bad year
By Karl Sinclair
Jan. 28, 2025, © Leeham News: The Boeing Company (BA) reported its full-year 2024 fiscal results today and it went pretty much as expected: it was another bad, bad year.
The full press release is here.
Boeing had a tumultuous 12 months:
- A door-plug departed a brand new Alaska Airlines 737-9 MAX aircraft shortly after takeoff in January;
- Its commercial crew spacecraft stranded astronauts at the ISS in June;
- The company was forced to an agreement to purchase a major supplier (Spirit Aerosystems) in July;
- A CEO change happened in August;
- The 777X flight testing program ground to a halt due to broken thrust links (also in August);
- A 53-day union strike hit the PNW in September;
- An equity sale to raise cash occurred in October; and finally,
- The 2024 financial year-end was put out of its misery with this filing.
777 P2F market grinds to a halt: lack of feedstock, Boeing, war, money to blame
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By Scott Hamilton
Jan. 27, 2025, (c) Leeham News: Boeing’s inability to deliver 787s on time and continued delays in certification of the 777-9 mean airlines planning to replace aging aircraft or expand must retain older aircraft longer than expected.
Airbus’ inability to deliver the A350 on planned schedules also affects fleet renewal and expansion plans, but to a much lesser extent than caused by Boeing.
IAI’s Big Twin Boeing 777-300ERF. Credit: IAI.
Boeing’s circumstances also mean that feedstock intended for conversions of 777-300ERs from passenger aircraft to freighters upset the business models of the three P2F conversion companies: IAI Bedek, KMC, and Mammoth Freighters.
Finally, certification of IAI’s conversation program is running two years behind schedule, and Boeing’s reluctance to license critical flight control software has also stalled P2F programs.
In addition to the problems outlined above, the inability to convert the big twin 777-300ER to freighters or receive new 777-8Fs and A350Fs in the coming years means that 747-400 freighters, which are gas-guzzlers by today’s standards and expensive to maintain, must remain in service longer than planned.
It’s a bleak picture emerging for the near- to-mid-term freighter market.
Bjorn’s Corner: Air Transport’s route to 2050. Part 6.
Bjorn Fehrm
January 24, 2025, ©. Leeham News: We do a Corner series about the state of developments to replace or improve hydrocarbon propulsion concepts for Air Transport. We try to understand why the development has been slow.
We have covered why the progress of battery-based aircraft is slow and also described what to expect at the end of this decade and the beginning of next.
Now, we look at hybrids, an inherently more complex design. Upstarts are changing to hybrids after realizing that battery-only aircraft will not have useful range this side of 2030.
Figure 1. The Heart Aerospace ES-30 has passed the phases in the article. Source: Heart Aerospace.
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Boeing came close to running out of cash in 4th quarter
By Scott Hamilton
Jan. 23, 2025, © Leeham News: The Boeing Co. nearly ran out of cash in the fourth quarter, the company said today as it previewed earnings that will be announced next week.
Boeing’s fourth-quarter cash flow was negative at $3.5bn, in part due to a strike that overlapped the third and fourth quarters.
Fourth quarter revenue will only be $15.2bn, reflecting the 53-day strike by its largest union, the IAM 751 in Washington and Oregon. The strike began on September 13. A new contract was approved on October 31. Employees returned to work by November 12, but retraining and the Christmas-New Year holidays delayed returning to full production.
Boeing said it lost $5.46 per share, or nearly $3.4bn, in the quarter. The company raised $25bn in cash and securities in the quarter. It entered the fourth quarter with $10bn in cash and short-term investments. It had $26.3bn at year-end. These figures illustrate how precarious Boeing’s position had become during the fourth quarter.
Hexcel Earnings: Returning to Pre-Pandemic Revenues, Ready for Rate Increases, but MAX Remains A Wild Card
By Chris Sloan
January 23, 2025 © Leeham News: Composites supplier Hexcel is ready, willing, and able to return to pre-pandemic production, profitability, and revenue benchmarks but can only move as quickly as its OEM clients up the supplier chain.
“While OEM production (rates) are increasing, recent history has clearly shown that ramping up aircraft build rates continues to be a challenging process. (OEM) Production levels in 2024 were only 68% of 2018 levels. Hexcel is close to about 80% as compared to 2019 levels,” concedes Hexcel’s Chairman, CEO, and President Tom Gentile.
Though the company forecasts its core commercial aviation aerospace sales to advance by high single-digits, the Gentile waves cautionary flags. “Because of the continued [start, stop, start ] production environment, uncertainty remains in relation to the outlook for our 2025 performance. Sales growth may be impacted by potential delays to the recovery in production rates.” The choppy rates have obvious knock-on effects on revenue and operating leverage – ultimately weighing down profit margins that will likely need until 2026 or 2027 to recover to pre-pandemic levels. “Daunting” and “Maximum” are words Gentile uses to describe labor, materials, and utilities inflation over the last 3-4 years. Not one to waste a good crisis, Hexcel is pledging to use this to its advantage. “It gives us time to work on our productivity and future factory initiatives to drive productivity to offset some of the (inflationary environment).”
The good news/bad news combination of bullish demand and constrained supply—a refrain common to all of commercial aviation—echoes through the halls of Hexcel.
Shipset Status: Program by Program Updates Offer Clues To OEM Rates
Hexcel is well positioned as the shift to composites and next generation materials, continues its unabated march forward. A350 and 787 generate the most revenue and production, obviously due to their sheer fuselage size and greater use of composites. But, the narrow-body programs hold their own with volume. The uneven production rate curve is causing consternation in the program production rate updates from Hexcel. With OEM’s guiding production rate increases, stability continues to bedevil every airframe model line and their suppliers, none more so than the MAX.