Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- The Boeing 767 Cross Section, Part 1 November 24, 2022
- Movie Review: Devotion November 21, 2022
- China will accelerate development of its commercial aerospace sector November 21, 2022
- Bjorn’s Corner: Sustainable Air Transport. Part 46. eVTOL comparison with helicopter November 18, 2022
- The economics of a 787-9 and A330-900 at eight or nine abreast November 16, 2022
Pontifications: Airbus almost certain to be hurt by MAX crisis
By Scott Hamilton
Jan. 6, 2020, © Leeham News: This may be the year that Airbus is hit with the negative consequences of the Boeing 737 MAX crisis.
Most observers see Airbus benefitting with greater A320 family sales while the MAX remains grounded.
In LNA’s 2020 Outlook last week, we pointed out that the long-running trade war between the US and European Union could be coming to a head this year. Airbus and the EU are waiting for the World Trade Organization’s authorization to impose tariffs on US products. This decision is expected in May or June. Boeing is expected to be the first target. The Trump Administration last year imposed a 10% tariff on Airbus aircraft.
The MAX crisis could ratchet up tariffs on Airbus aircraft.
Boeing MAX crisis dominated 2019 Top stories
By Scott Hamilton
Dec. 30, 2019, © Leeham News: Boeing and the 737 MAX dominated the Top 10 Stories on Leeham News in 2019.
This should surprise no one.
The year-end late-breaking news that Boeing CEO Dennis Muilenburg had been fired by the Board of Directors should be in the Top 10 Stories of 2019.
But coming as it did on Dec. 23, the start of Christmas week, it failed to make it into LNA’s Top 10 list.
Readership, obviously, falls off dramatically over the Christmas holidays. The fall-off continues between Christmas and New Year’s evidenced by LNA’s own decision to take a holiday (except for breaking news).
The Ethiopian Airlines crash on March 10 grabbed three of the Top 10 stories and shared, with Lion Air 610 (the Oct. 29, 2018, crash) a fourth story.
Boeing photo.
Boeing’s pickle with the 737 NG pickle fork cracking was of the Top 10 stories.
An historical review that Boeing didn’t want to re-engine the 737, preferring instead a new airplane in 2011 when what became the MAX was launched, was in the Top 10.
An April 2018 story about a potential Blended Wing Body airplane from Boeing hit the Top 10 after an enthusiast site linked it to its forum.
Other MAX MCAS stories were in the Top 10. Finally, anticipated announcements by Mitsubishi for the Paris Air Show was the only non-Boeing story to be in the Top 10 reads for the year.
Airbus didn’t hit the Top 10 but did have a #11 story concerning a pitch-up issue on the A321.
The Boeing stories propelled record readership on LNA in 2019.
Here is the rundown.
Analysis: Boeing’s priority after recertifying, delivering MAX: remake the Board
- Editor’s Note: Just last night I wrote this piece for publication on Jan. 6 as Pontifications. The news today of Dennis Muilenburg’s ouster causes acceleration.
By Scott Hamilton
Jan. 6, 2020, Dec. 23, 2019, © Leeham News: Boeing’s first priority this year is to get the 737 MAX recertified, returned to service, production restarted and begin 
the long path on the road to normalcy.
The second priority is to remake the leadership and governance.
The third, which may slip to 2021, is to launch a new airplane program to replace the MAX 9 and MAX 10.
Analysis: Calhoun’s insider status raises question: is he the one to pull Boeing out of its dive?
Analysis
By Scott Hamilton
Dec. 23, 2019, © Leeham News: The Boeing Board of Directors has fired Dennis Muilenburg.
Dennis Muilenburg. Source: Boeing photo.
Board chairman David Calhoun was named president and CEO, effective next month. The delay is required while Calhoun resigns from other business commitments.
Boeing CFO Greg Smith was named interim CEO. Board member Lawrence Kellner was named non-executive chairman.
Calhoun has been on the board 10 years. The roots of Boeing’s current crisis includes decisions made by the Board. Is Calhoun, an insider, the right person to pull Boeing out of its dive?
Boeing tells union: MAX production halt “weeks;” others see months
Subscription Required
By Scott Hamilton and Byran Corliss
Introduction
Dec. 23, 2019, © Leeham News: The Boeing 737 MAX production shut down will be measured in “weeks,” Boeing told one of its unions.
But “weeks” is a highly open-ended description.
One supplier estimated for LNA that the suspension will be at least 60-90 days.
An aerospace analyst sees the halt lasting 3-6 months at a minimum.
Boeing 737 MAXes stored at Boeing Field. Source: Seattle Times.
LNA’s analysis does not see production resuming before the Federal Aviation Administration notifies Boeing that it has a date certain for recertification. It has announced no timeline, although published reports already suggest this could be any time from mid-February to well into March.
But these are speculative dates.
Summary
- Boeing now says that once certification is achieved, delivering from the inventory is a priority over producing new airplanes.
- This raises additional uncertainty over restarting production.
- Spirit Aerosystems has some 90 fuselages in storage.
Read more
Pontifications: There was other news in 2019 besides MAX. Really.
By Scott Hamilton
Dec. 23, 2019, © Leeham News: The Boeing 737 MAX crisis clearly dominated the news this year.
It’s felt like the aviation stories have been all-MAX, all-the-time.
Believe it or not, there was aviation news other than the MAX.
Boeing union creates strike fund for 2024 contract negotiations
Dec. 21, 2019, © Leeham News: The International Association of Machinists District 751, the touch-labor union at Boeing’s Seattle-area plants, launched a campaign for a strike fund this week.
The current labor contract expires in September 2024, five years from now.
Nevertheless, the union announced its campaign on its Facebook page and a micro-website here.
The union urges members to contribute $50 per paycheck to raise $6,000 by 2024.
Minimum 3-6 month 737 MAX production shutdown seen
By Scott HamiltonDec. 17, 2019, © Leeham News: Boeing announced yesterday a suspension in production of the 737 MAX line. It didn’t put a timetable to the shutdown.
But one aerospace analyst predicts the shutdown will be a minimum of three to six months.
The reason? Boeing listed as its new priority, after recertifying the airplane, as clearing out the inventory of 400 stored new-production aircraft.
- LNA was the first outlet to raise the prospect that Boeing was nearing a decision point on whether to reduce or suspend production. The post has two graphics: one shows where the MAXes are stored and the other shows deliveries vs production.
SunTrust Robinson Humphrey made the prediction in a note issued after Boeing’s after-market announcement yesterday.
Analysts align in reaction to MAX production suspension
Dec. 17, 2019, © Leeham News: Wall Street analysts were fairly aligned in their reaction to Boeing’s decision to suspend production.
Below are excerpt of some of the research notes received by LNA:
Boeing halts 737 production
Dec. 16, 2016: Boeing said it is suspending 737 MAX production.
Here is the full press release.