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
China still needs Boeing as much as Boeing needs China, despite interminable limbo
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By Scott Hamilton
Oct. 31, 2022, © Leeham News: China needs Boeing as much as Boeing needs China was the conclusion of an analysis by LNA in July 2021. A trade expert last week agreed. Airbus and China’s COMAC won’t be able to fill the future demand forecast for China.
Michael McAdoo, Partner & Director, Global Trade and Investment of the Boston Consulting Group (BCG) in Montreal and a former strategic chief of Bombardier Commercial Aircraft, told LNA in an interview last week that China needs the Boeing 737 MAX and widebody airplanes to meet demand in the near-to-medium term.
It will be long-term before China’s commercial aviation industry will be competitive with airplane designs and production.
Summary
Forecasts for China’s demand for jet aircraft are consistent between Airbus and Boeing. But COMAC, which is the leader of China’s burgeoning commercial aviation industry, is significantly higher in its forecast. The independent Japan Aircraft Development Corp (JADC) is significantly lower.
- Boeing forecasts that China needs 8,485 new jets through 2041.
- Airbus forecasts 8,420 new aircraft will be needed through 2041.
- COMAC forecasts China will need 9,084 aircraft through 2040.
- JADC is more conservative, forecasting a requirement for 6,172 new jets in China through 2041.
Source: Boeing Current Market Outlook.
China will account for 21% of the world’s new aircraft deliveries through 2041, Boeing says.
Pontifications: Analysts overlook Boeing losses for cash flow gain; what’s behind the jump in charges?
By Scott Hamilton
Oct. 31, 2022, © Leeham News: Boeing last week surprised Wall Street aerospace analysts with a huge loss instead of the expected profit for the third quarter.
But positive cash flow was the metric the analysts focused on. The loss was attributed mostly to big write-offs of five defense programs: the KC-46A, VC-25B, MQ-25, T-7A, and Commercial Crew (the Starliner) programs. Boeing wrote off $2.8bn for these programs in the quarter. The company previously wrote off $8.8bn for these programs.
The specifics: Boeing took charges of $1.2bn for the KC-46 tanker, $766m on Air Force One, $351m for the MQ-25 aircraft carrier tanker drone, $285m for the T-7 jet fighter trainer, and $195m for the Commercial Crew.
All are fixed price contracts that have come back to bite Boeing big time.
Boeing also had a loss of $643m in the quarter at Commercial Airplanes. Global Services reported a profit of $733m and Boeing Capital Corp (BCC)—the leasing unit—eked out a $23m profit.
For the nine months, Commercial Airplanes recorded a loss of $1.74bn. Defense lost $3.66bn. Services reported a profit of $2.1bn and BCC barely recorded a profit of $14m.
But cash flow was positive at $2.9bn. And this is what analysts liked. Yet there was a little smoke-and-mirrors involved in this. Boeing said the cash flow was helped by “higher commercial deliveries, favorable receipt timing, and a tax refund,” as analyst Robert Stallard of Vertical Research put it. The tax refund was $1.5bn, a huge chunk of the cash flow touted by Boeing.
Mammoth, NIAR settle lawsuit with prejudice
By Scott Hamilton
Oct. 28, 2022, © Leeham News: A settlement has been reached between the Mammoth Freighters and other plaintiffs and NIAR, the aerospace research arm of Wichita State University, it was announced today.
“This agreement now concludes all existing litigation between NIAR and Wagner/Mammoth, without any payment from either party or restrictions on NIAR, its personnel, its customers or partners, or its conversion aircraft program going forward,” NIAR/WSU said in a statement. The court filing dismissing the lawsuit says each side bears its own costs.
Airbus 9 months 2022 results: Widebody demand picking up
By Bjorn Fehrm
October 28, 2022, © Leeham News: Airbus presented its results for the first nine months of 2022 today. Airbus’ problem is how to fulfill demand as the supply chain is still recovering from COVID.
The deterioration of supply chain performance has stopped, according to Airbus CEO Guillaume Faury, but not improved. Performance is now steady but at a lower level than Airbus needs. The planned rate increases in single aisle and widebody are unchanged, but in addition to planned increases in single aisle, discussions have started with the supplier base on how to increase production of widebodies as demand has picked up.
Airbus delivered 437 commercial aircraft in the first nine months, compared with 424 last year. Guidance for the year is unchanged at 700 deliveries and €5.5bn EBIT, except for Free Cash Flow, which will increase to €4.5bn due to a strong dollar.
Bjorn’s Corner: Sustainable Air Transport. Part 43. eVTOL IFR range.
By Bjorn Fehrm
October 28, 2022, ©. Leeham News: This is a summary of the article Part 43P, eVTOL IFR range. It discusses the range of a typical eVTOL flying a feeder mission from a city center to an airport during IFR conditions.
IFR conditions mean we have a dicey weather forecast for our airport destination and must plan with an alternate landing site where the weather forecast is better.
Figure 1. The Vertical Aerospace VX4 in an early rendering with similar looks to the eVTOL we discuss. Source: Vertical Aerospace.
Bjorn’s Corner: Sustainable Air Transport. Part 43P. eVTOL IFR range. The deeper discussion.
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October 28, 2022, ©. Leeham News: This is a complementary article to Part 43, eVTOL IFR range. It discusses the typical maximum range we can expect from a certified eVTOL when it faces IFR weather conditions.
Flying in IFR conditions requires flight planning with increased reserves if the eVTOL can’t land at the destination airport and must divert to an alternate airport.
Boeing R&D spending continues to rise, surpassing/matching 2020 level
By Scott Hamilton
Oct. 27, 2022, © Leeham News: The Boeing Co’s research and development spending for the nine months ending Sept. 30 is 10% higher than the same period in 2020. R&D spending for Boeing Commercial Airplanes for the current period is fractionally lower than for the nine months in 2020.
R&D spending in 2020 took a sharp dive as the global COVID-19 pandemic set in beginning in March. With the global 737 MAX fleet grounded (from March 2019) and production halted (from December 2019), CEO David Calhoun took a knife to spending as cash flow dried up.
The A350 enhancements, Part 1
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By Vincent Valery
Introduction
Oct. 24, 2022, © Leeham News: Last month, Airbus announced that it started delivering A350s with a New Production Standard (NPS) with Iberia. The upgrades include weight savings, a maximum takeoff weight increase, and a longer and wider cabin.
A350 Fuselage. Credit: Airbus
Except for a few low-cost operators, the economy-class cabin on the A350 has usually featured a nine-abreast configuration with operators. The wider cabin could lead to a wider adoption of a 10-abreast economy class configuration with more A350 operators, for instance the legacy ones.
Despite the lingering effects of the Covid-19 pandemic on long-haul travel, several airlines still need to place sizeable twin-aisle aircraft orders in the coming years. The A350 enhancements could prove crucial in securing orders for Airbus against the competing Boeing 787 and 777X.
In this article series, we will assess how the A350 enhancements impact the economic performance of the aircraft against its main competitors. Before comparing competing aircraft, we define a methodology for consistent comfort standards among different aircraft families.
Summary
- The A350 enhancements in detail;
- A brief history of adding economy class seats in each row;
- Assessing passenger comfort standards;
- Upcoming twin-aisle sales campaigns.
Boeing adds 737 MAX 7 to at-risk status with MAX 10 for cancellation over FAA certification
By Scott Hamilton
Oct. 26, 2022, © Leeham News: Boeing may terminate the 737 MAX 7 program if the deadline for a cockpit warning system is not extended, blocking certification.
Boeing 737-7 MAX. Credit: Boeing.
CEO David Calhoun previously said the 737 MAX 10 program might be certified.
In a federal filing of the 10Q quarterly report today, Boeing added that the MAX 7’s future is in doubt.
“If the Aircraft Certification, Safety and Accountability Act (ACSAA) deadline is not amended [beyond Dec. 27 this year] and we otherwise fail to achieve certification, we might choose to discontinue the MAX 7 and/or MAX 10, resulting in future earnings charges and other financial impacts. We may be able to partially mitigate some of these financial impacts to the extent that customers exercise substitution rights into MAX 8 and/or MAX 9 aircraft,” Boeing wrote in its 10Q.
HOTR: Trump’s 757 return
Oct. 26, 2022, (c) Leeham News: There was a bit of a splash on the Internet when the VIP-configured Boeing 757 owned by Donald Trump was delivered to Palm Beach (FL) after undergoing refurbishment and maintenance. The airplane had been in storage since Trump assumed the presidency in 2017.
Trump critics and cynics claimed the airplane has a range of 4,400 statute miles and speculated that Trump might flee to Saudi Arabia or Moscow now that he has his 757 back.
LNA’s Aircraft Performance Model (APM) was put to use to analyze just how far the 757 can go. For this exercise, we ignored winds, hold times, and alternates—focusing only on the advertised range. Passenger-configured 757-200s (Trump’s model, with Rolls-Royce engines) can seat up to 200 people. Trump’s VIP-configured airplane can carry 25 or one—it’s up to Trump. VIP configuration weighs a lot, so this is taken into account in our analysis.
Distance from West Palm Beach (FL) and Bangor, Maine, to Moscow. Analysis by Leeham News Aircraft Performance Model. Graphic from Great Circle Mapper.
The APM analysis concludes that with the maximum allowable extra fuel tanks, the aircraft can go up to 5,000nm when flown with 25 passengers of equivalent weight. Without the extra fuel tanks, the range is 4,000nm. As a general rule, winds, hold time and alternates reduce the range by up to 20%, depending on the flight’s direction.
Ranges from Bangor, Maine, via Leeham News Aircraft Performance Model. Graphic Great Circle Mapper.