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
UPDATE: Calhoun upbeat on cash flow despite fifth consecutive quarterly loss
By Bryan Corliss
Oct. 26, 2022, (c) Leeham News: The Boeing Co. posted a loss from operations of nearly $2.8 billion for the third quarter, citing losses on fixed-price defense development programs that offset an overall 4% growth in revenues.
The consensus of Wall Street analysts earlier this week was that Boeing would announce profits of 13 cents a share and would break a streak of four consecutive losing quarters. Instead, Boeing posted a loss of $5.49 a share.
However, in a conference call with stock analysts later in the morning, Calhoun was upbeat, emphasizing Boeing’s positive operating cash flow of nearly $3.2 billion for the quarter.
“This quarter was a big one for us,” he said. “We hit a marker … to generate positive cash flow.”
Boeing booked losses of roughly $1.95 billion on two defense programs, CFO Brian West said: KC-46 tankers and new Air Force One presidential transports. Both are fixed-price contracts for commercial jet conversions that forced Boeing to eat any cost overruns.
“We aren’t embarrassed by them,” Calhoun said. “They are what they are.”
But in an interview with CNBC’s Phillip LeBeau Wednesday, Calhoun said Boeing will not do fixed-price defense contracts in the future. “That is not our intent.”
Summary:
- BCA: 737 and 787 deliveries resume; engines in short supply
BDS: ‘Labor instability’ hurts key programs
Calhoun: Boeing ‘supports China’ but is re-marketing planes
Read more
Lockheed Martin expects competitive bidding for next tanker
By Byan Corliss
Oct. 25, 2022 © Leeham News: A Lockheed Martin official said the company believes the U.S. Air Force will end up seeking competing bids for the next batch of aerial refueling tankers it will buy.
When that happens, the company is confident the Air Force will pick its proposed LMXT tanker, based on the Airbus A330 airframe, for the role, said Larry Gallogly, who is Lockheed Martin’s director for the tanker campaign.
Back in 2007, the Air Force outlined a plan under which it would replace its then-existing tanker fleet in three rounds, KC-X, KC-Y and KC-Z.
KC-X, after many missteps, became the KC-46 program. The Air Force now is looking ahead to KC-Y, but with the recent steps forward with Boeing’s KC-46, some are arguing that a full-blown tanker competition isn’t necessary because USAF could just tack on additional orders to the 179 KC-46s it now plans to buy.
But during a briefing from Lockheed Martin’s offices in Alexandria, Va. today, Gallogly said he expects the Air Force will announce its criteria for the next round of tankers after the first of the year. When it does, Gallogly continued, it’s likely that the Air Force will be seeking a more-capable tanker than the one it’s buying now.
“If we take all of the stakeholders at their word that the requirements are vastly different than they were 16 years ago, that takes you down a path where a competition is more likely than not,” Gallogly said.
Summary
- Lockheed Martin teams with Airbus for proposal
- LMXT differnt from Airbus KC-330
- USAF approved KC-46 for all missions last month
“The music will stop” because aviation will miss target “green” deadlines: Boeing’s Calhoun
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By Scott Hamilton
David Calhoun. Source: Boeing.
Oct. 24, 2022, © Leeham News: Boeing CEO David Calhoun believes that the plethora of concepts for shifting to “green” aviation may be confusing policymakers.
And, he says, the pace outlined by the commercial aviation industry may contribute to the confusion.
Calhoun also said that Sustainable Aviation Fuel (SAF), while the most promising near-term technology to reduce aviation emissions, isn’t an easy solution, nor is it a complete solution.
Calhoun made his remarks last month at the US Chamber of Commerce Aerospace Summit in Washington (DC).
Pontifications: Two sentences described Boeing’s last two years
By Scott Hamilton
Oct. 24, 2022, © Leeham News: The question to Boeing CEO David Calhoun was put in levity. His response was telling.
Susanne Clark, the president of the US Chamber of Commerce, noted before last month’s Aerospace Summit that Calhoun assumed the CEO position in January 2020.
“It’s been a long 10 years,” she postulated.
“Yes, it’s been a long 20 years,” Calhoun replied.
These two sentences couldn’t describe the situation at Boeing more clearly.
Although Calhoun had been on the Board of Directors since 2009, including serving as lead director, the challenges he faced with the 737 MAX grounding were greater than he expected. Two months after becoming CEO, the COVID-19 pandemic erupted. And seven months later, deliveries of the 787 were suspended.
The MAX and 787 issues went on much longer than anyone expected. (The MAX challenges still aren’t over.) Recovery from the pandemic is going better than forecast.
The Chamber’s Aerospace Summit was an in-person event. The previous one was in March 2020.
HOTR: Amazon to add A330 P2F to Prime Air fleet
Oct. 21, 2022, © Leeham News: Amazon’s Prime Air will add 10 Airbus A330-300 freighters to its fleet from 2023. The aircraft will be converted by EFW, in which Airbus is a partner, and leased from Altavair of Issaquah (WA).
Source: Airbus.
These are the first A330 freighters that will be operated under the Prime Air brand. Hawaiian Airlines, an A330 operator, will operate the planes. Prime Air largely contracts out flight operations. Atlas Air flies Boeing 767-300ERFs and Sun Country fly Boeing 737Fs for Prime Air.
EFW now has orders for more than 100 A330 conversions, nearly all for the -300 model.
Bjorn’s Corner: Sustainable Air Transport. Part 42. eVTOL range.
By Bjorn Fehrm.
October 21, 2022, ©. Leeham News: This is a summary of the article Part 42P, eVTOL range. It discusses the range of a typical eVTOL flying a feeder mission from a city center to an airport.
The 42P article details the energy consumption for each stage in the mission and the range we fly. We summarize the results here.
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 42P. eVTOL mission range. The deeper discussion.
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October 21, 2022, ©. Leeham News: This is a complementary article to Part 42, eVTOL mission range. It discusses the typical maximum range we can expect from a certified eVTOL by mid-decade.
We have described the vehicle and the mission data in the three previous Corners; now, we analyze the energy consumption for the mission and discuss the range we can achieve.
Engine Development. Part 10. Next generation engines
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By Bjorn Fehrm
Introduction
October 20, 2022, © Leeham News: We finish our series about engine development by looking at the next-generation engines and future trends in airliner engine development.
We limit this look forward to engines that burn Jet fuel (Jet-A1 or SAF) as green propulsion solutions are a vast field and justify their own series. We will pick this up at a future date.
The Boeing 777-9, the first airliner with next-generation engines. Source: Boeing.
Summary
- The major reduction in fuel consumption and, thus, CO2 emissions will come from new engines.
- The technologies to drive fuel consumption down a further 15% are there.
HOTR: China-US relations continue to dive
By the Leeham News team
Oct. 17, 2022, © Leeham News: The G-7 meeting among the leaders of world’s top countries is next month. There were hopes that the USA’s President Biden and China’s President Xi would meet privately to work out some of the differences between the two countries. Resolving key differences is viewed as key to Boeing’s relationship with China.
The private meeting now is questionable. Biden last week imposed additional sanctions on the microchip industry. China is dominate in this sector. Beijing is now stonewalling setting an agenda for the Biden-Xi meeting.
Easing tensions between the US and China is crucial for Boeing. China historically accounted for between one quarter and one third of Boeing’s deliveries, depending on the year. There are more than 100 737 MAXes in storage built for Chinese airlines and lessors. (At one point, the number was 140. But lessors are allowed to accept deliveries, provided the lessee is not in China.)
Although China’s regulator, CAAC, recertified the MAX nearly a year ago, there were conditions required before the planes could return to service. Compliance has been slow. There were 97 MAXes in service in China in 2019, when CAAC became the first regulator to ground the fleet after the second MAX crash within a five-month period.
Boeing publicly decried the geopolitics between the US and China at one point as a roadblock that must be cleared. Domestically, China’s passenger traffic remains suppressed in part because of the zero tolerance to COVID infections. Returning the MAXes to service isn’t prompted by the need for the aircraft. Still, there are signs the MAX may return to service soon. However, new deliveries remain in doubt and Boeing is now beginning to remarket the stored aircraft to other operators.
Pontifications: Energy costs add to aerospace supply chain squeeze
By Scott Hamilton
Oct. 17, 2022, © Leeham News: The aerospace supply chain faces new strains due to rising energy costs, Airbus CEO Guillaume Faury said last week.
Bloomberg News reports that Faury said some suppliers are shutting down due to high costs.
“We see another thing coming, which is the consequences of energy prices skyrocketing leading to some suppliers trying to adapt, sometimes stop producing, waiting for the situation to normalize,” he said. “That’s very low in the supply chain, but it’s probably something new,” Bloomberg wrote. It was reporting on Faury’s appearance before the UK Aviation Club.
At an unrelated event last month, two top US suppliers said they continue to see financial distress in the supply chain. Some lower-tier suppliers had filed for bankruptcy and more may be expected.