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
Bjorn’s Corner: Analysing the Lion Air JT610 crash, Part 2.
November 8, 2019, ©. Leeham News: We started the series on analyzing the Lion Air JT610 crash based on the final crash report last week by looking at what went wrong with the aircraft’s Angle of Attack sensors.
Now we continue with looking at why an MCAS system is needed in an aircraft like the Boeing 737 MAX and why a correctly designed MCAS is not an irrational addition to the aircraft.
Air France-KLM wants to simplify the fleet
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Nov. 7, 2019, © Leeham News: Air France-KLM will strive to greatly simplify its fleet by early next decade, the group outlined in an investors day presentation Nov. 5.
The Group includes Air France, KLM and Transavia. The low-cost carriers Joon and Hop! are discontinued.
Fleet simplification
KLM
The company wants to reduce today’s fleet types at KLM from six to four, dropping the Airbus A330 and Boeing 747s.
The Future Fleet concentrates around the Embraer E1 and E2 E-Jets; the Boeing 737 NG; the Boeing 787-9 and the Boeing 777 Classic.
At the moment, there are no Boeing 737 MAXes in the future fleet plans. KLM had none on order, even before the October 29, 2018, Lion Air accident.
The possibility of a Boeing 777X is also not shown in the rendering.
“It’s not easy to compare:” Airbus’ CEO Faury
- Guillaume Faury has been the chief executive officer of Airbus Group since April 1. In this exclusive interview, he looks back on his first six months and ahead for the future of the company. Part 1 appeared Oct. 30. This is the second of two parts.
Guillaume Faury
Nov. 6, 2019, © Leeham News: “It’s not easy to compare the performance of the two companies,” says Guillaume Faury, the CEO of Airbus, when the inevitable comparisons between his company and Boeing are made.
The context was talking about advanced manufacturing, discussed in Part 1 of this interview.
“I don’t think we are behind on digital. I think they might have gained more preparation on the future of production systems. We are catching up big time if not ahead in some important places. I think we will know who’s first when the next generation of airplanes is launched. These will be the first ones with digital design and manufacturing. There’s not a single plane today which is full DDMS.”
The issue is key to the next new airplane produced by Airbus or Boeing.
Boeing charges, costs nearly $35bn since 1996
By Vincent Valery
Introduction
Nov. 5, 2019, © Leeham News: Boeing already has racked up $9.2bn in one-time charges and additional costs to the accounting block in the 737 MAX crisis.
Some expect there will be more substantial charges before the dust settles. Even Boeing officials said it will be years before all customer claims are settled. Legal liabilities are only partially covered by insurance.
Program accounting, which is unique to the US, allows a company to spread the costs of an expensive development over the anticipated life of the program and the forecasted orders.
Other countries require unit accounting or charging off costs as they occur during development.
Boeing is one of few companies in the US to use program accounting. This masks current charges in the GAAP-approved financial statements. A few years ago, Boeing also began reporting non-GAAP numbers on the basis of unit costs as additional information.
With one-time charges and added costs to program accounting assumptions related to the 737 MAX grounding, Boeing’s accounting policies are back in the spotlight. The accounting policy became controversial as deferred production costs spiked on the 787 program.
As commercial and defense programs faced cost overruns and delays, the company had to record billions of US Dollars in charges and various losses over the years.
LNA went through all of Boeing’s annual 10-K filings since 1996 to identify all the charges recorded on commercial and defense programs.
After recording billions in charges since Dennis Muilenburg became CEO in 2016, we assess whether there is more to come in future quarters.
Summary
- Program Accounting fundamentals;
- Dreamliner Deferred production cost controversy;
- Billions in (not so) one-off charges;
- Current and future charges under Muilenburg’s watch.
Pontifications: Congressional hearings on Boeing dominated by grandstanding–but damning documents revealed
By Scott Hamilton
- Senate hearing largely theater.
- House hearing has grandstanding, but substance, too.
- House reveals some damning documents.
- Muilenburg claims no knowledge of legal strategy, but top lawyer reports directly to him.
Nov. 4, 2019, © Leeham News: Last week’s Congressional hearings about the Boeing 737 MAX crisis was just as I expected: theatre, lots of grandstanding, little substance and testimony that elicited little in the way of new information.
The US Senate hearing was a perfect example of playing to the television by many Senators.
The House hearing certainly had its share, but in more lucid moments, some House members produced new documents that were especially damning to Boeing.
Boeing CEO Dennis Muilenburg and John Hamilton, VP and chief engineer, did no harm to Boeing, which was probably the prime objective. (Hamilton is no relation to me.)
Muilenburg did harm to himself, however, and some Members of Congress landed some damning blows.
A Basic “MCAS” System was installed in the Boeing 707 in the 1960s
By Oliver Stuart Menteth
Fintech Aviation Services
Special to Leeham News
Oliver Stuart Menteth
Nov. 1, 2019, © Leeham News: It was simplistic in design, had a graduated and limited input into the pitch control system and details were included in the relevant training, operational and maintenance manuals. It worked seamlessly and because of this its existence, and reason for installation, has eluded most people in the industry. The system was installed not as a result of a recommendation or regulation imposed by the FAA but at the insistence of the Air Registration Board (now the Civil Aviation Authority) of the United Kingdom.
But first, some relevant background.
Bjorn’s Corner: Analysing the Lion Air 737 MAX crash, Part 1.
By Bjorn Fehrm
November 1, 2019, ©. Leeham News: We start the series on analyzing the Lion Air 737 MAX crash by looking at what went wrong in the aircraft. It’s important to understand MCAS is not part of what went wrong. It worked as designed during all seven Lion Air flights we will analyze in this series.
It was a single sensor giving a faulty value that was wrong with these aircraft. How a single faulty sensor could get MCAS to doom the JT610 flight (called LNI610 in the report) is something we look into later in the series. Now we focus on why the sensor came to give a faulty value for five out of seven Lion Air flights and how these flights could be exposed to two different sensor faults.
One year after Lion Air crash, what’s the MAX’s future in Asia?
By Judson Rollins
Oct. 31, 2019, © Leeham News: One year ago this week, Lion Air flight JT610 went down in the Java Sea near Jakarta. It was the first of two accidents that would expose catastrophic design problems with the 737 MAX – and a regulatory relationship between Boeing and the FAA that had become too close to comfort.
Although much has been written about the US major carriers’ orders for the MAX, relatively little has been said about orders from the Eastern Hemisphere. Prior to the MAX’s grounding, 136 airplanes had been delivered to the region and another 1,186 were on firm order. This comprises nearly 27% of Boeing’s firm MAX orders.
The following table shows the top MAX operators in Asia & Australasia:
Faury looks to transform Airbus
- Guillaume Faury has been the chief executive officer of Airbus Group since April 1. In this exclusive interview, he looks back on his first six months and ahead for the future of the company. This is part 1 of two parts. Part 2 will appear soon.
Guillaume Faury
Oct. 30, 2019, © Leeham News: Guillaume Faury assumed his office as chief executive officer of the Airbus Group at a time when the company was trying to emerge from years-long scandals over bribery and corruption probes and the industry was only beginning to reel from the grounding of the Boeing 737 MAX.
Now, he’s focused on guiding Airbus in the future through a series of transformations to put the scandals behind the company, change production for the future and prepare for new airplanes that inevitably must be designed.
Becoming CEO
Faury’s been with Airbus for 20 years, surrounding a four-year stint with Peugeot from 2009-2013 as EVPO of Research and Development. He was named president of Airbus Commercial in February 2018. He previously was president and CEO of Airbus Helicopters from 2013-2018.
He succeeded CEO Tom Enders, who was not going to be given another term as part of the fallout of the numerous government investigations into past practices at Airbus involving third parties for aircraft sales, bribery and corruption allegations.
This advertisement is sponsored by Aviation Forum.
Although Enders and CFO Harald Wilhelm initiated the probes and reported the problems to the governments, they along with many others had to go as Airbus tried to limit the damage.
Boeing’s Muilenburg opening statement to the US House
Dennis Muilenburg
Oct. 29, 2019: Having completed his appearance before the US Senate today, Boeing CEO Dennis Muilenburg will appear before the US House tomorrow.
Here is his opening statement: Opening Statement-10-30.
His appearance before the Senate was about as expected. Most Senators seemed more interested in their five minutes of TV time than trying to get at answers and determine a path forward.
Sen. Ted Cruz (R-TX) was an exception, as was Sen. John Tester (D-MT). Cruz, a former prosecutor, pressed Muilenburg on his ignorance of key documents and the lack of communication with key employees.