Leeham News and Analysis
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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
Updates 1 and 2: Key reason for Jeju 2216’s tragedy: the airport localizer construction and location
Update, Dec. 30: Reuters published this graphic, which is superb and self-explanatory. The full story is here.
Update 2. Dec. 31: A new Reuters article has some important detail about the location of the localizer vis-a-vis the runway and apron. Excerpts:
- Comments in the airport’s operating manual, uploaded early in 2024, said the embankment was too close to the end of the runway and recommended that the location of the equipment be reviewed during a planned expansion.
- “Unfortunately, that thing was the reason that everybody got killed, because they literally hit a concrete structure,” Captain Ross Aimer, the chief executive of Aero Consulting Experts, told Reuters. “It shouldn’t have been there.”
- Muan International Airport’s Operations Manual said the navigation equipment, or localisers, had been installed too near the end of the runway, or just 199 m (218 yards) from the crash site.
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South Korean officials have previously said the structure was about 250 m (273 yards) from the end of the runway itself, though a paved apron extends past that.
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The runway design did not meet industry best practices, however, said John Cox, chief executive of Safety Operating Systems and a former 737 pilot, adding that they preclude any hard structure like a berm within at least 300 m (330 yards) of the end of the runway.
By Scott Hamilton
Commentary
Dec. 30, 2024, © Leeham News: The Dec. 29 (local time) accident of Jeju Flight 2216 is a tragedy that didn’t have to happen.
It’s far too soon to say what caused the emergency on the airplane. Within hours a host of theories emerged about the cause. The airport fire chief blamed the accident on a bird strike (singular). I’ve never heard of a single bird strike bringing down an airliner. Multiple bird strikes have brought down airliners going back to the propeller days. In recent history, US Airways 1549—the flight that Capt. Chesley Sullenburger and co-pilot Jeff Skiles safely landed in the Hudson River—is the most famous example.
Korean and assisting investigators will reveal if 2216 suffered multiple strikes that caused power to both engines to quit, as happened with 1549. The flight data recorder (FDR) and cockpit voice recorder (CVR) should put this to rest. The analysis of these should also reveal why the landing gear, slats and flaps were not extended. The cockpit resource management (CRM) will be analyzed as well to understand the coordination between the two pilots.
Whatever the reason for the emergency landing, the incontrovertible cause for the disaster that befell the plane was the presence of a berm and concrete structure of the runway localizer a short distance from the end of the runway. This structure should never have been constructed in this manner. Having been done, it should have been later removed and replaced by a structure that would not have been disastrous to the emergency flight.
I’m optimistic that the initial readout of at least one of the flight recorders will be available this week. One of the recorders was damaged and is being sent to the US National Transportation Safety Board in Washington (DC) for analysis. (It was not revealed which one at this writing.)
In the meantime, a wide list of topics will be investigated. These include but are not limited to:
Merry Christmas 2024 and Happy New Year 2025
Leeham News is taking the holidays off. Unless there is some huge breaking news before, we will return on Jan. 6, 2025.
Adams Park in Wheaton, IL USA, across from the Leeham Co. World Headquarters.
A decade to normal? Delivering every airplane in backlog won’t clear debt to 2018 levels
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By Karl Sinclair
Dec. 20, 2024, © Leeham News: In 2018, the Boeing Company (BA) delivered a whopping 806 commercial aircraft to customers.
That year, the corporation declared revenues of $60.715bn at Boeing Commercial Aircraft (BCA) and an operating margin of $7.879bn.
Operating cash flow was $15.322bn and Free Cash Flow (FCF) was $13.6bn.
2016 was the last year that Boeing did not have a negative net debt position (cash and cash equivalents less short and long-term debt).
In 2018, Boeing increased its net debt position by ($4.158bn), year over year, while spending $12.946bn on buybacks and dividends.
It borrowed money to give to shareholders.
Fast-forward to the end of 3Q2024. Boeing was forced to raise $21bn in a stock offering on Oct. 28, with $57.65bn in total debt and a ($47.18bn) net debt position.
How long will it take Boeing to get back to a position where it can invest in a much needed clean-sheet design to replace the beleaguered 737 MAX family?
Legendary analyst Cai Von Rumohr retires after 55 years
By Scott Hamilton
Dec. 19, 2024, (c) Leeham News: It is rare that LNA takes special note of aerospace analysts. Too many of them cozy up to the companies they cover because if they don’t, they’re access may be cut off or curtailed. For most reports, we look at them for information rather than analysis and we’re happy to cite the details rather than the conclusions.
Today, we’re making an exception. Cai Von Rumohr, an analyst of 55 years, has retired. He ended his career with TD Securities, more commonly known as Cowen. In his final note to investors, Von Rumohr provides an entertaining lessons learned and rules he followed during his long career. We don’t publish full reports without permission (after all, analysts sell their reports just like LNA sells subscriptions) but in this case, we don’t think Cai will mind offering his farewell for download. It’s available below.
Lilium on the clock to survival or dissolution
Update, Jan. 4, 2025: A German investment group will pump €200m+ into Lilium, purchasing all its assets.
By Scott Hamilton
Dec. 19, 2024, © Leeham News: Lilium, one of the earliest battery-powered eVTOLs, has two weeks to raise €1m to give it more time to fully reorganize—or on Jan. 1, the company moves into dissolution.
Lilium filed for bankruptcy in the US and insolvency under German law in November. As a German company, its future is governed by much stricter insolvency laws than in the US where bankruptcy laws give the debtor wide latitude and almost unlimited time to reorganize.
Under German law, Lilium has until Dec. 31 to raise €1m to tide it over while substantial funding is raised or a merger with a healthy partner can be arranged.
Lilium has an order and commitment book for more than 700 of its eVTOL, a 6-8 passenger Advanced Air Mobility (AAM) design that is flown by one pilot. The advertised range is enough to fly from New York City to Philadelphia. Lilium calls the AAM an electric jet, but in reality the powerplants are electric motors—a lot of them.
Lilium’s “jet” eVTOL battery-powered aircraft. Credit: Lilium.
But Lilium has gone through $1.1bn. It pays its executives handsomely, with critics complaining that they are way overpaid for a start-up company with no revenue. It purchased the former Dornier executive offices and built three big hangars to house parts and components, pre-production and final production.
Lilium bought the former Dornier headquarters at Munich’s research airport, and built three hangers. Critics point to this expense as an example of overspending. Credit: Lilium.
Critics say Lilium’s design is impractical, far behind schedule, and has yet to undergo meaningful flight testing.
Be that as it may, the company believes that German politics got in the way of approving a $100m Bavarian state loan that was a prerequisite for an equal investment from private sources. The critics say Lilium’s spending and executive pay played a role in Bavaria’s rejection.
“What’s past is prologue.” –William Shakespeare.
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By Scott Hamilton
Dec. 16, 2024, © Leeham News: A new airplane from Airbus or Boeing is years away.
Engines drive whether a new airplane program makes sense. Technology just isn’t “there” yet. In any event, Boeing can’t afford to fund a new airplane program even if it wants to. Furthermore, until its stored inventory of 737s and 787s are cleared, or mostly so, production rates are back to 2018 levels, debt is substantially reduced, and profits and cash flows return, Boeing is mired in recovery from the past. Addressing the future must wait.
Airbus has no incentive to rush into a new airplane program, even if engine technology was available. Its backlogs extend into the 2030s, and it can’t meet the current demand. Production is mired in delays for the A320 and A350 families.
Both companies, and Embraer, remain adversely affected by supply chain parts delays.
Airbus CEO Guillaume Faury previously said he doesn’t see the company moving forward with a new airplane until 2035-2040. Additional insight into the company’s thinking came last month at the Aviation Forum 2024 in Munich, where vice presidents of Airbus’ propulsion and new programs departments outlined what’s ahead.
Boeing, Airbus still struggle with supply chains and personnel shortages
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By Scott Hamilton
Dec. 13, 2024, © Leeham News: It’s been two years since the generally accepted end of the COVID-19 pandemic. But the aerospace industry hasn’t fully recovered. Nor will it do so for some time to come.
Predictions suggest another year or two will be required to restore pre-pandemic employment levels within the supply chain. This isn’t even certain. What is certain is that the impact of inexperienced new hires in the meticulous aerospace requirements will linger on for years to come.
Michael Haidinger, President of Boeing European and Middle Eastern regions. Credit: Boeing.
Michael Haidinger, president of Boeing’s European and Middle Eastern regions, and Juergen Westermeier, chief procurement officer for Airbus, agree challenges remain in the near future.
“There is always a shortage of skilled aerospace talent intensified by the pandemic,” Haidinger said this month at the annual Aviation Forum (2024) in Munich, Germany. “As all the professionals retired, fewer new employees entered the field. Our industry needs more people who not only bring expertise but also embrace the mission of advancing aerospace.”
Haidinger added, “The deficit of skilled engineers, technicians, and other aerospace workers has made ramping up production more challenging. Attracting and retaining talent has become a top priority for us. [We are] with many companies investing in workforce development, partnerships with universities, training programs, and apprenticeship programs.”
Airbus procurement head “convinced” supply chain issues are on right path
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By Scott Hamilton
Juergen Westermeier, head of procurement for Airbus. Source: Airbus.
Dec. 12, 2024, © Leeham News: Airbus wants to sharply increase the production rates of its A220, A320, and A350 lines between now and 2027. This has been a goal since emerging from the COVID-19 pandemic.
However, continuing supply chain issues repeatedly moved the targets to the right. The A220 production rate goal of 14/mo was moved from 2025 to 2026. A dramatic increase in the A320 family rate to 75/mo is now set for 2027, a delay of more than a year. The new production target for the A350, 12/mo, is now 2028.
Increasing the rates is key for Airbus to meet demand and take full advantage of Boeing’s continuing disruptions as it works to emerge from its long-running safety, quality assurance, and production disruptions.
Airbus officials have been frustrated by the repeated delays in ramping up production and obtaining a reliable stream of parts deliveries from the supply chain. Annual delivery goals are challenging to meet and have fallen short of guidance. Airlines and lessors are unhappy over missed delivery dates.
But the head of Airbus’ procurement believes things are, at long last, on the right track.
Juergen Westermeier explained why in an interview with LNA last month during the Aviation Forum 2024 in Munich.
CFM gets FAA and EASA certification for a more robust LEAP-1A turbine.
By Bjorn Fehrm
December 10, 2024, © Leeham News: CFM has announced that FAA and EASA have certified an upgrade to the LEAP-1A turbine, allowing the engine to stay on wing longer, especially in hot and harsh environments.
The upgrade was developed using a new dust ingestion method CFM developed to simulate the wear on the LEAP first turbine stage and nozzle in certain dusty environments.
CFM LEAP-1A with the booster bleed ports marked with (2) and the turbine that has been improved marked with (7). Source: CFM.
Global instability poses questions for aerospace industry
By the Leeham News Team
Dec 9, 2024, © Leeham News: The global aerospace sector is facing significant uncertainty as geopolitical tensions, including trade disputes and security concerns, weigh heavily on sections of the industry.
China Southern Airlines plans to sell its 787-8s, but will hang onto its 787-9s. How Chinese airlines proceed from here is not certain. Credit: Boeing
A new administration in Washington (DC), and the impact that may have on the Ukraine war and relations with China, alongside a rapidly evolving situation in the Middle East, will likely alter the balance further in 2025.
A lot has already been baked in, but the industry is still grappling with how each scenario may unfold.
“I’ve been feeling for a while that Boeing’s prospects in China are pretty bleak,” says Bruce McClelland, a senior analyst at market analysts Teal Group, when asked how he expects the next few months will play out for OEMs.
“[Chinese customers] will probably take delivery of a few 737s, and maybe some 787s that are currently on order or may have been built already But I think that China, increasingly, for a number of reasons, doesn’t necessarily need all the Boeing planes that it might have thought it would need.” Read more