Feb. 21, 2023, © Leeham News: Boeing will have some bumps in the road (or maybe I should say, some turbulence) now and then, but its chief financial officer is confident the company is solidly on its way to recovery.

Recovery is daunting. There’s $51bn in total debt (more than $34.5bn in net debt), with $5.2bn coming due this year. Production of the 737 and 787 remains erratic. Deliveries are slower than hoped. Certification of the 737-7 and 737-10 has yet to be achieved. Program progress on the 777X is slow. A host of defense programs are in money-losing positions. Nylon Fiber Flap Disc

But orders picked up nicely for the 737 and 787. Even the 777X won 10 orders, from Air India, after a long, long drought. Debt, huge though it is, is coming down. Revenues are up at Commercial Airplanes and Global Services, though down at Defense.

Brian West, the CFO, outlined Boeing’s outlook during an appearance at a Cowen Co. investors conference last week. There was little new since Boeing held its own investors’ day on Nov. 2 and the 2022 earnings call on Jan. 26. But there are always a few nuggets to come out of these appearances.

“It was an important milestone to generate positive cash flow,” West said at the top of his discussion—highlighting the No. 1 priority of the investment community and by extension, the Boeing C-Suite. “We still feel momentum coming into this calendar year. In terms of where we’re at with recovery, we know where we’re headed.”

But, West said, there are two top priorities for this and next year in the recovery stream. “A couple of two really big, important things that have to happen. The inventory of the 737 and 787 has to unwind. We have to relieve production of all the rework.

“It’s going to get bumpy. We will have lower February deliveries, in the low 20s. Then deliveries will accelerate throughout the year,” he said. Boeing guided 400-450 MAX deliveries this year from the factory and inventory. West expects seven MAXes a month from inventory, gradually increasing to 10-12 a month. Although Spirit AeroSystems, which makes the 737 fuselages, is planning on a production rate of 42/mo by year-end, West is sticking with a top rate of 38/mo this year.

“What’s important is that the factory space is there, the tooling is there and the labor is there. Getting there is the function of the supply chain and the skilled labor force,” he said. The supply chain is still unstable but getting better.

Sales slots for the 737 are sold out through 2026, West said. The 787 sold out through 2025. As international traffic begins to recover, “we are seeing a pickup in conversations with customers. Last year, we had 200 widebody orders, the most since 2018. The trans-Atlantic is back to pre-COVID levels.” Trans-Pacific and Asia traffic is gaining momentum, he said. Boeing announced it is adding a fourth 737 production line in Everett (WA), the site of all its widebody production. The North Line, as the new one is called, has an operational target date of 2024. The 737s with unique or complicated configurations (the 737-8200 and 737-10) will be assembled there.

“We’re very fortunate to have Everett as an option. We’ve got the space and we have the skilled workforce. I won’t guess beyond 50. The fourth line will start with handling the more complicated configure airplanes and Renton will be very reliable. This bodes well for the near term and for the long term.

The day before the Cowen appearance, Boeing and Airbus won orders for 500 aircraft from Air India. Asked about what to expect for the Paris Air Show this June, West said only, “stay tuned. We really enjoyed yesterday.”

All the indicators bode well for long-term demand, West said.

 Tags: 737, 777X, 787, Brian West, Cowen & Co

With Airbus’ a220/320 pretty much sold out until end of decade, Boeing have an opportunity to mop up short/medium term orders going forward. Disadvantage of a duopoly is when there’s no availability at one, it’s a pseudo-monopoly at the other. Anywho… Not a BA management fan but good luck with their recovery.

And yet Air India just committed to more A32X than MAX, so maybe availability isn’t as big a factor as you’re suggesting?

Think aircraft manufacturers reserve slots for “key customers”, the rest has to hope for other customers not taking up their slots and can get a few planes now and then or wait for years (the price then increase by the price escalation clauses in the contracts). The leasing companies of cause tries to fill those gaps too keep demand up for their fleets hence the aircraft manufacturer needs to hold them open as long as they dare keeping everybody sort of happy.

“Airbus is sold out at a production rate of 65/mo through 2028. Even boosting the rate to 75/mo doesn’t help. The lines are still sold out through 2028. Only by boosting the rate to 83/mo—something Airbus is studying—do a few slots open in 2027 and a few more in 2028. Not until 2029 do an appreciable number of production slots open.”

https://leehamnews.com/2022/12/09/hotr-tuesdays-boeing-announcement-may-give-indication-of-a350-future-at-united/

What’s not always seen in order reports but OEMs know, some orders are deferred or will be cancelled. That leaves some room

“Airbus is sold out at a production rate of 65/mo through 2028.”

If that were true, how do you explain this:

Air India Finalizes Order For 470 Jets With Airbus & Boeing

‘Some planes will start to be delivered in late 2023, though we’re told to expect the bulk of deliveries starting in mid-2025. ‘

The Air India order came after the Leeham article.

Most likely some orders were deferred opening up slots.

“Most likely some orders were deferred opening up slots.”

Who are the likely suspects? Everyone is scrambling for aircraft AFAIK.

This years Air India will receive:

Six cancelled Aeroflot A350-900s that have already been built.

A number of A320s & A321s that were acquired from lessors in December 2022. Four A321s for AI are currently in production at Hamburg Finkenwerder.

Well put. Boeing is a huge part of the economy as well as exports.

It seems a good idea to relieve the Renton 737 FAL from the off standard -10 work. And strategically, keeping Everett resources vibrant.

It seems 48 787 have been delivered since x-mas 2020. A330/A350 are ramping up. The UA 100 787 commitment, tankers and freighters are nice, but don’t let stakeholders get seduced again. Work to be done or “WB dominance” will be history soon.

I wonder if Boeing’s relative position to Airbus was actually strengthened by COVID. COVID forced Airbus to cut production while Boeing could not produce or deliver its two best-sellers (MAX and 787) anyway. Now Airbus can’t fill the demand since production ramp up takes time.

It is easier to accelerate from 60km/h while you are moving at 30 km/h. or is it easier to get to 60 when you are standing still?

That and it got the MAX crashes off the news. If one was cynical, the timing could not have been better for Boeing.

> That and it got the MAX crashes off the news. If one was cynical, the timing could not have been better for Boeing. <

Reports are that Airbus forced Airlines to take their orders, Boeing was in a position to be generous as everything came to a halt on the MAX and 787 (the big ticket sellers).

Hard telling how that may play into the future.

The backlog of A320neo family vs the 737 MAX tells me everything I need to know.

Too bad the MAX was grounded and FAA halted 787 delivery, that’s why BA was not able to enforce most of their contracts.

Fact: Mid 2021 FG: Scherer says almost every customer contract was reviewed and 80% of aircraft slots were amended.

replace “enforce” with “fullfil”, obstacle was on the B-side 🙂

Why again was the MAX grounded? ( MCAS was a Boeing own goal )

FAA was forced to introduce some sanity ( Sad thing the FAA needed coercion! )

I get his point. Boeing will get massive cash flows in once they get their stock Max and B787s off. That should ease things up double: On the balance sheet and in production, as the workers that are refitting Max and B787s are missing in production. It needs time and a lot of capacity.

But on the other side, Boeing isn`t getting any better. Max still doesn`t have an answer to A321neos. And Max10 not yet certified doesn`t make that better. For now, Max 9 and 10 combined have 1200 orders. From the 900 Max 10 ordered, none is flying. While A321neo has more than 940 in the air. And almost 5000 orders alone. So for ever Max 9+10 sold, Airbus has sold 4! A321neos. And it`s not that the A320 neo is selling worse, we didn`t even talk about the A220. Boeing announced that they won`t do a NSA or MOM. While Airbus will sooner or later bring the A225.

Boeing has a strategic problem in the SA market, where they are dogs.

And it doesn`t look like the WB market is a clear win for Boeing. Yes the B787 is selling great, and they won United as a sole modern WB, but with all the troubles and the hefty discounts Boeing offers they will have a hard time to make money. Airbus has almost sold 1000 A350s already and is catching up in deliveries.

The B777x still is very dependend on the gulf carriers and unless GE provides a killer engine, will have a hard time to sell. Around since a decade, still not in the air while everyone buys B789 and A359. Airbus A330neo isn`t doing much better sales wise, but with a freighter incoming, and higher interest rate thus higher capital cost, it should get some more orders. And while Boeing has a idk, 10 bn. $ ticket on the B777x meanwhile, Airbus has a 2 bn. $ ticket on the A330neo.

Boeing might do better financially, but it`s in a strategic dog situation. Loosing in the SA, and maybe on a draw in the WB market. Hard to come out of it if you don`t spend R&D and have not much in your pipeline.

“Boeing will get massive cash flows in once they get their stock Max and B787s off. That should ease things up double: On the balance sheet and in production, as the workers that are refitting Max and B787s are missing in production. It needs time and a lot of capacity”.

Will they, though? They are having to spend on those frames to get them fit to deliver and that is going to eat into their margins, and on top of that there are the ongoing storage costs as they wait their turn in the rework queue. And the cash flows are unlikely to be massive if it takes another two years to clear them, more of a steady flow at best!

“Boeing will get massive cash flows in once they get their stock Max and B787s off. ”

In summ that will be less than they would have had with regular uninterrupted deliveries. Stopping production was more expensive than reducing production (AB). Turning stored frames into deliverables seems to be expensive and resource intensive.

After a long drought a rush in of money. Overall it will stay a dry spell.

@Uwe: of course, but that`s sunken cost and past.

Once they get their planes out and to the customers, they`ll recover a lot of money that`s now in the balance sheet. It will ease up their financial situation a lot.

https://en.wikipedia.org/wiki/Sunk_cost

In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered.

It was unclear to me by what you meant as a freighter coming in when it was linked to the A330. The A350 is the freighter model. A330-300 are being converted.

there`s rumors that Airbus will bring a A339 based freigther, to replace B767 and B777F when they are going out of sales in 2027.

It should be quiet a cheap development, regarding an A330F already exists.

I don`t think that everyone will need the 70m A350F or B777xF. Might be a market for smth smaller and cheaper. Seems like Airbus is making a case if it makes sense vs. A333 conversions and B777F.

Durability of Trent 7000 is still far away from what RR promised. This is a lack to promote A330-9F.

I think the claims that RR Trents engines including the 7000 under performing are exaggerated and based on old news stories by a lot of folks in this forum. At the Airbus press conference last week https://www.youtube.com/watch?v=8ZwMEjrt3S4 (see link), Bjorn of Leehamnews asked a very specific question (59:23 minutes in) with regards to the performance of the Trent 7000, and Airbus CEO’s answer was that it was performing well, no worse than any new engine used in Airbus’s current programs.

I think it is time folks in the forum update themselves on the performance of the Trent engines instead of quoting from 2017, 2018 (pre-Covid) articles.

They all get their “tar” from the original Trent1000 failures.

Next step is to paint all other newer RR engines with that stuff. ( Trent1000TEN, Trent6000, TrentXWB )

Max 10 is a like for like match to the A321 line ( except for the different weight and wing XLR) Max 9 is also much larger than A320 (the Max 8 is also) that the 9 and 10 group can be considered the A321 target markets

Range of Max 10 does not match that of A321-XLR, major selling point I hear.

For only a portion of routes which will be a smaller part of 321 orders and deliveries. Any airline not needing that range (aka only the range of any ceo) will be perfectly fine with a -10. I believe once it’s certified we will see many upgauges and some new orders for it. If nothing else WN and Ryanair will take a few hundred each not yet ordered

Seriously?? What’s the chance WN would go for MAX 10? 😳

The 737-10 vs. A321neo logic was Boeing Chicago as most US domestic routes was ok with the 737-10 that is cheaper and lighter with a more modern wing. Still the world will use the A321neo’s up to its performance limits and thus be a bigger new and used plane market. Like the original UAL 777-300 vs 777-300ER.

> Any airline not needing that range

I suspect that the A321neo range of 4000nm up to 4700nm (XLR) is not so needed for US airliners but it will be a game changer for many airlines across the world.

Qantas switched from B737 to A320neo family; Air Canada, which has switched from A320 to 737 MAX (at a pretty hefty price to BCA/BCC – they took in AC’s E190 several couldn’t be remarketed and had been scrapped!!) ordered 30 A321XLR recently; UA ordered 50 A321XLR and 70 A321. The limited market to place MAX 10 will hurt lessors’/financiers’ willingness to step in.

A321 neo range isnt 4000km – that would be the xtra fuel tanks LR. its 3200km in its standard version with 1 extra tank to match max 10 internal fuel

A321 XLR is specially excluded , its still in development ( major reason was it just didnt have enough internal fuel and aux tanks meant it had no room for a full pass load baggage) New wing flaps because the plane was getting runway restricted and extra weight because of all above.

“A321 XLR is specially excluded , its still in development”

But but but … how ’bout the MAX 10? 🤔

a large number ( something like less than 10 ?)have been wing joined. That is completely different thing. You can see that, its obvious?

From the same poster that fantasized about a MAX 10 LR. 😄

Are you trying to make stuff up, AGAIN??

The XLR is said to have more room for cargo or baggage than the LR.

XLR is excluded because it needs a new certification above the standard A321 and is thus a new variant completely. Surely you know this Thats delayed for some *reasons*

Remember to even have the *same* internal fuel volume as a max 10 the standard A321 needs 1 ACT belly tank… Thats doesnt require a new certification. Glad to help in your upskilling

Sash. Please try to get things correct. A large number of -10s for customers have flown and are idle awaiting cert to happen. UALs first -10 for example flew in Nov 2022.

https://simpleflying.com/united-airlines-first-boeing-737-max-10-flight/

None is flying. It`s not in service. Not certified.

Every day more A321neos get to happy customers, while Boeings customers are waiting for a subpar product.

Lol, and the simpleflying link, great, then i understand which level you`re on.

Sash….. You wrote, and the quotes are there because I copied you IN CONTEXT “For now, Max 9 and 10 combined have 1200 orders. From the 900 Max 10 ordered, none is flying. ” You were quite specific, you said no -10s were flying. You didn’t say in service, you didn’t say squat about certification, you said FLYING. I posted an article showing UALs first 737-10 FLYING. My brain Is CORRECT, I know that a picture of a 737-10 climbing out in UAL colors means that they ARE flying just as its headline says. If you wish to now change what said, thats fine, but be intellectually honest to admit that 737-10s are flying, because they are Again…. Here’s the pretty picture https://simpleflying.com/united-airlines-first-boeing-737-max-10-flight/

” … be intellectually honest to admit that 737-10s are flying”

About time to admit, even though the MAX 10 are flying, they are flying to no where anytime soon!! 😀

This one wasnt flying to anywhere either https://www.flightradar24.com/blog/filling-up-the-tanks-the-airbus-a321xlrs-13-hour-test-flight/

@DoU How ’bout the 777-X? Oh BTW should I add B787 to the list?? 🤭

I would think the -7 and the -10 will be delivered to Southwest and UAL respectively well before the year is out.

Not according to BA I’m afraid.

” A large number of -10s ”

Can you qualify that into a numerical value?

( production list I could find don’t go beyond 10 known frames. Only two ( test aircraft, Boeing seem to be finished/in use )

The $50billion debt simply reflects the fact that Boeing have had the inferior product line up for far too long.

To have ended up with that level of debt despite having sold a ton of aircraft over the past few decades points to the fact that none of their aircraft programmes have been profitable. The only reason large numbers of deliveries turns into debt, not profit, is because they’re being sold too cheaply. This in turn suggests that their products won’t sell at higher prices.

It’s as basic as that. And, Boeing seem resolved not to do anything realistic about their product line up for the foreseeable future. Again.

The debt rise came in mostly since 2019 as for 2018 FY they had earnings of $10.5 bill and long term debt of $10.6 bill

Without real facts your claims are baseless

A ton of aircraft over the last few decades have made them a ton of money

“Without real facts your claims are baseless”

@Matthew is correct. We get the “real facts” every quarter when BA publishes yet another dismal quarterly earnings report.

Cash flow last quarter was outstanding. Pros concentrate on this measure, which explains why you chose another

@ DoU Cashflow last quarter came purely from deferred payments. Surely even you can see that that trick only works for a short time?

Sash says ‘Max still doesn`t have an answer to A321neos’

Which means you dont understand the Max 10 . Its a near close equivalent to the A321neo ( standard version) Seating is half a row or 3 seats less. Range with same fuel is the same ( the max 10 has greater internal tankage like other max) so A321 needs a belly tank to match it.

What you might consider isnt matched is the long awaited A322 version also known as the A321XLR , its a major new variant which required new fuselage section and new wing flap system plus a bumped up gross weight ( wonder how different the engines will be ?) its clearly got first to market advantages for the airlines rushing to make single aisle long haul for 8-9 hours ( ive flown 5 hrs in one) and fills the gap where A321 neo cant do transcontinental full load flights

“A321 neo cant do transcontinental full load flights”

“Looking at routes operating between now and December, long A321neo services are hugely about Europe and North America, with Stockholm to Chicago – some 4,272 miles – the longest. Operated by SAS, this connects two Star Alliance hubs. It will be served from September 1st until the end of October, and it has a block time to the USA of nine hours and 15 minutes (!).”

“Some 11 of the top-50 routes are from Lisbon, including five with TAP to northern Brazil. This nicely demonstrates how the 32Q can be used on longer and thinner routes that don’t need the capacity of widebodies in exchange for a much lower trip cost.”

https://simpleflying.com/longest-a321neo-routes/

*“It was an important milestone to generate positive cash flow,” West said at the top of his discussion—highlighting the No. 1 priority of the investment community and by extension, the Boeing C-Suite.*

This is the key statement and Scott has picked it up, out of the clutter.

Not a word about margins and delivering profits. These are the previous fours years at BCA and their margins:

Boeing commercial has generated a $29.349 billion loss from operations, over those 4 years. Those losses are sitting on the balance sheet and are now called debt.

Another point Scott brought up, was the long term debt going down, moving into short term.

The current liabilities went up dramatically, year over year. (Anything over 10%, you ask yourself why?)

Obligations….are obligations. You owe them to borrowers, suppliers, employees and others – no matter what you call them.

Total liabilities essentially did not change, dropping some $450 million, YoY.

Just because you know the financial business of say commercial property or from working at a company making chocolate bars your commentary doesnt give context from just copying bare numbers. read the full commentary and financial notes ( or get an aerospace sector financial analyst newsletter) and tell us why Boeings liabilities have increased by the amount mentioned, is that too hard ? but instead you fall back on your wisdom – ‘liabilities are liabilities ‘…thats it.

Given Boeings position and the fact that much of it was shorter term maturities it seems entirely reasonable portions of LT debt are now ST to be paid within the year. That’s the importance of the deliveries to free up cash but a lot of this was covering the unsold inventory investment which should come down as deliveries increase. I haven’t checked the financial notes but the people who make a lot more than me have taken these into account or have revolving credit they can cover a shortfall with.

My my – aren’t we triggered.

Do you really need a re-hash of the past 4 years? You need me to tell you why BA is in this mess and why liabilities have increased?

The nuanced point I was trying to make, but I guess I’ll hit you over the head with the hammer, is that you can shift obligations around the liabilities section, you can roll expenses into the Inventory account to puff up assets, but at the end of the day – you still owe what you owe.

Those last four years have shown that while BCA delivered 1,357 aircraft, it cost them over $29 billion.

Yes, I know you love to focus on cash flow – but at the end of the day, if you sell something for $45 million and it costs you $45 million to make, you are just marking time. Mind you, if BCA could break even on those sales, they’d be a lot better off.

Don’t hate me, Hate the numbers.

Everybody with a real grasp of company financials focuses on free cash flow. if you dont we might assume something else about your knowledge.

That much touted “free cash flow” thingie is a last straw metric to lipstick enhance a dying pig.

“In corporate finance, free cash flow (FCF) or free cash flow to firm (FCFF) is the amount by which a business’s operating cash flow exceeds its working capital needs and expenditures on fixed assets (known as capital expenditures).[1] It is that portion of cash flow that can be extracted from a company and distributed to creditors and securities holders without causing issues in its operations. As such, it is an indicator of a company’s financial flexibility and is of interest to holders of the company’s equity, debt, preferred stock and convertible securities, as well as potential lenders and investors.”

But hey – there you go again, attacking the messenger when you don’t like the message. Very revealing at just how much you don’t want to discuss the actual financial situation and how desperate you are to change the narrative.

Frank, indeed free cash flow is a measure of whether a company is on the way up, or on the way down.

Still, $50billion is a long way down, but not as deep as can be. What I have just found to be illuminating is the Wikipedia page “List of Most Indebted Companies”, which lists the top 20 most indebted companies for 2014, 16 and 19. Boeing’s $50billion barely makes it into the top 20, and is less than 1/5th the debt that General Electric had in 2014.

I suppose the interesting thing to consider then is that GE, having topped the list in 2014, were half way down it in 2016 and off the list altogether by 2019. That’s quite a large clear-out of debt. Boeing’s $50billion is smaller, and it is not unprecedented for companies to come back from deeper down.

Question is, will Boeing manage it? I don’t know why Boeing are saying there’s no big jump in engine tech coming up. There is – RR’s Ultrafan looks pretty good, and it could be being offered on all Airbus wide bodies inside a few years. If that’s anywhere near half-way good, it’ll be worth putting on every aircraft that it can power. Boeing’s pessimistic outlook (no new engines, no new aircraft for a decade) seems to suggest that they’re going to spend a long time reducing that $50billion debt pile.

Question is, will Airbus build a decisive lead in the meantime? Boeing is giving them a lot of opportunity to do that. If Boeing are relying on their current order book to clear the debt decks, they could end up debt free but with no new orders and no customers.

I trust the maxim, “develop, or die”. Boeing probably should acknowledge it too.

Free cash flow. What every investor loves to hear. Why? This is from the 2018 (Boeing’s best year ever):

‘Record operating cash flow of $15.3 billion; repurchased 26.1 million shares for $9.0 billion’

https://s2.q4cdn.com/661678649/files/doc_financials/quarterly/2018/q4/4Q18-Earnings-Release.pdf

How’d that work out for them?

GE got into trouble by acquiring a bunch of things (amongst other reasons) – but the silver lining was that they had things to sell, to pay off debts.

Do you think Boeing is about to sell off things to get out of debt? Do they have a bunch of things they can sell?

Let’s say that BCA is responsible for about $40 billion of the debt they currently hold. In 2018, they had about $10 billion in debt, so we’ll use that as a starting point.

In that year, BCA produced earnings of $7.879 billion, on sales of $60.715 billion. They delivered 806 aircraft, that year.

Boeing needs ~5 years just like 2018, in a row – to get rid of that $40 billion in debt.

(Considering they are paying an additional $2.5 billion in interest payments per year, that number is probably higher)

Do you see that happening?

Since you are fact free in your claims on liabilities here some $50.3 bill of the liabilities is actually because Boeing has such a massive future order stream and thats the advances and progress payments Advances and progress billings [ FY 2022] 53,081 [FY2021] 52,980

On the other side of liabilities theres inventory of FY2022 $78 bill

you would think anyone with some accounting “credentials” would be able to find this sort of background information in a flash….

@DoU The inventory won’t help at all if margins are too thin to generate earnings. We’re seeing that every quarter — e.g. Q4 2022: 154 deliveries, yet $600M loss.

Operating cash flow 4Q 2022 was $4.3 bill. Free cash flow was $3.1 bill The losses you talk about mostly just accounting adjustments, future pensions etc and of course they are still making capital investments which are spending money

Cash flow is king as that can be used to pay debt And it gets better , not just a single Q bounce from timing but each quarter from here on to FY 2025 $10 bill of free cash flow and around 10% BCA operating margins

Backlog is $400 bill orders with $50 bill in down payments already

GE once had a big finance portfolio under GE Capital (think of it like a bank running under an industrial company).

Jan 2016 Reuters -> U.S. conglomerate General Electric Co said it signed $157 billion in transactions in 2015 as part of its efforts to divest most of its finance business, GE Capital.

2018 CNN: Everything is shrinking at GE except its massive debt -> Almost everything about General Electric is getting smaller. That includes its business empire, its profits and, of course, its stock price. https://money.cnn.com/2018/03/16/investing/ge-stock-debt/index.html

You just ignore everything you don’t like to see and run down those who point it out, huh?

About that YUGE amount in Inventory (here we go again…)

https://s2.q4cdn.com/661678649/files/doc_financials/2022/q4/c93682a4-8b3c-4251-a2ed-97c4e474a214.pdf

From BA’s latest 10Q

“At December 31, 2022 and 2021, commercial aircraft programs inventory included the following amounts related to the 737 program: deferred production costs of $2,955 and $1,296 and unamortized tooling and other non-recurring costs of $626 and $617”

“At December 31, 2022 and 2021, commercial aircraft programs inventory included the following amounts related to the 777X program: $4,059 and $3,363 of work in process, $1,330 and $652 of deferred production costs, and $3,774 and $3,521 of unamortized tooling and other non-recurring costs.”

“At December 31, 2022 and 2021, commercial aircraft programs inventory included the following amounts related to the 787 program: deferred production costs of $12,689 and $11,693, $1,831 and $1,907 of supplier advances, and $1,722 and $1,815 of unamortized tooling and other non-recurring costs.”

Let’s get a calculator out to help you along:

In deferred production costs. NOT sellable inventory

$23.096 Billion of fluff in Inventory, that you’re trying to push on us as aircraft to be sold.

So all of your sudden, your Inventory is actually

Yes – I was able to find this information. Not the first time, I’ve presented it to you, either. You seem to keep forgetting, each time I do.

But it’s always such a pleasure to hear from you…

“The losses you talk about mostly just accounting adjustments, future pensions etc and of course they are still making capital investments which are spending money”

Once more, from the 10Q

“Abnormal production costs in 2022 were $1,753 million, including $1,240 million related to the 787 program, $325 million related to the 777X program, and $188 million related to the 737 program.”

Doesn’t sound like accounting adjustments, pensions and Capex, does it?

But they explain it, further down in the comments. I guess you were too busy to read:

“In April 2022, we decided to pause production of the 777X-9 during 2022 and 2023. We implemented the production pause during the second quarter of 2022, and it is expected to result in abnormal production costs of approximately $1.5 billion that are being expensed as incurred until 777X-9 production resumes. During the year ended December 31, 2022, $0.3 billion of abnormal costs were period expensed.”

“We are currently producing at low rates and expect to gradually return to 5 per month in 2023. In the third quarter of 2021, we determined that production rates below 5 per month represented abnormally low production rates and result in abnormal production costs. We also determined that the inspections and rework costs on inventoried aircraft are excessive and should also be accounted for as abnormal production costs that are required to be expensed as incurred. Cumulative abnormal costs recorded through December 31, 2022 totaled $1.7 billion. During the fourth quarter of 2022 we adjusted the total estimate of abnormal production costs up to $2.8 billion with most being incurred by the end of 2023. At December 31, 2021, we were expecting to incur approximately $2 billion of abnormal production costs on a cumulative basis. The increase was primarily driven by a decision in the fourth quarter of 2022 to slow down near-term production due to supply chain constraints and increased inspection and rework costs. We continue to work with customers and suppliers regarding timing of future deliveries and production rate changes.”

“737 Program. We increased the production rate to 31 per month in 2022, and expect to implement further gradual production rate increases based on market demand and supply chain capacity. We expensed abnormal production costs of $188 million and $1,887 million during the years ended December 31, 2022 and 2021.”

All West can say is: let’s put all the bad numbers aside … trust me, there’s a pot of gold at the end of the rainbow (2025-26″ish” slipping from 2025).

Pedro said….. All West can say is: let’s put all the bad numbers aside … trust me, there’s a pot of gold at the end of the rainbow (2025-26″ish” slipping from 2025).

I can see why BA is so upbeat on positive cash flow, there is NO OTHER NEWS that doesn’t look like crap. Make no mistake, When I say Boeing has turned the corner, I understand just how long a trip they are on and perhaps I should say they have stopped the bleeding, but they haven’t done that either. I don’t trust the messages from management and here’s why. BA is so upbeat on positive cash flow because there is NO OTHER NEWS that doesn’t look like crap. There are over 100 737s and 787s in their respective parking lots. The 747 just ended production and the 767 will have production ended by law in 2027. The 737-10, 737-7, 777X ALL are hung up in a much delayed certification process. Airforce One is a black hole of silent writedowns. BA STILL insists that the globalization of Engineering is the future path to recovery. The next new product is undefined and has no timeline. In the light of ALL this crap, its exceptionally difficult to say BA has turned the corner, thats a semantic argument for a different day. Has BA started to improve their lot in life. I see little things that make me hopeful, but a management tool banging the table saying there is positive cashflow make me a lot more nervous than I was. I don’t trust BA any more. And for me to feel that way should tell you guys a few thngs.

Yah – this guy is hardly anti-Boeing.

If he’s not believing the corporate speak put out by West, then you can take it to the bank that he feels uneasy with the current direction of the company.

Boeing has a mountain to climb and one has to wonder if the current crop of leaders are in for the long haul, or are just looking to get paid before heading for the door.

$400 bill of existing orders ( $40 bill alone last year) and $50 bill of down payments. Thats not a declining business

You’re no CPA , maybe high school accounting was your glass ceiling

Blessings from the Pope! Thank you.

Those are YUGE numbers. The biggliest, most perfect numbers, ever…

I suggest you take ever penny you have and invest it BA stock.

-> U.S. 10-year real yields are climbing again, now at the highest since early January

Can BA repay its debts fast enough?

-> 2-year US Treasury yield hitting a new high of 4.84% indicates more to go!

I think the MAX-10 will prove to be a mistake. We’ll see.

IMU it is a complex and expensive makeover to get closer to A321. It also got more interest than the -9(00), a better fit for customers.

You said it: complexity, piled high and deep. Too much of it, IMO. Tempting the Gods..

Its not closer – its exactly like for like to A321 neo ( standard model) , except carries more internal fuel without belly tanks

Dont take my word for it , read the Leeham 1st take analysis ( now out of paywall) https://leehamnews.com/2017/03/13/boeing-737-max-10-analyzed/

space :”The 737 MAX holds three seats (a half row) fewer than the A321neo” range :’This means both aircraft are just passing 3,200nm without becoming limited by the fuel amount.” Thats ‘modelled’ as of course the Max 10 MTOW isnt officially released yet

Costs of flights : ‘Our model shows them to be close on this dimension as well.’

Now why does buyer interest not reflect that metric?

Airbus could satisfy the sliding window interest of buyers ( A321 xyz sells like sliced bread ) and Boeing could not. Sales gravity for Boeing still is at the MAX8 size slot. If the MAX10 is really like for like offer matching the A321: why are MAX10 sales not 50+% of MAX sales?

There is nothing quite like a well formed and posed question. Thank you.

Timing . One has a customer base going back to the early 90s and the neo version was miles ahead too. The Max 10 of course hasnt yet entered service. Just dont confuse ‘capability’ where they are like for like and market share, where they arent. The Max 9 and 10 are the ‘same market’ as the A321 so the numbers should be aggregated. After all the smaller A320 neo is ‘cross shopped’ ( by the commentators) to larger capacity and longer range Max 8.

I posted a chart from Jon Ostrower showing how BA’s SA in-flight market share has been eroding, rapidly in recent years. You can’t explain away by “customer base”. BA once dominated the market.

Market share A321neo vs Max10: Airbus: 4596 orders Boeing: 920 orders

The Max10 is not yet certified. It won’t be before 2024 either.

The A321neo order was so important to Qatar that a comparison with was favoured. The Max10 wasn’t good enough for the airline.

The figures show that Boeing has almost completely lost this market at 200 places.

The A321neo in particular generates maximum profit for Airbus. With a market share of over 80 percent, this is no wonder.

How many time have this been debunked? Laughable that it’s the only fig leave you can show up with.

According to the linked LNA article:

-> ” … a more efficient configuration for the A321neo. We could have used two over-wing exits and blocked the third door pair. It would have filled the cabin attendants seats at the third door in the floor plan. The A321neo then takes 16+180 seats = *196 seats*. One can also use the same configuration for the MAX 10. Due to the service doors (fore and aft, on the right side) being of lower exit rating than Airbus doors, the cabin then can only be equipped with *189 seats*.

-> The MAX 10 will have worse field performance

And the Max series can be packed out too. The LNA analysis is for fairly standard airliner configurations and seating arrangements battery farming flights are always an outlier

never heard of the max8-200 ? The 200 is number of seats…..in. a. max. 8 !

A max 10 could be packed out as well, You heard it first from me

So you choose to ignore all the other usual comparisons that LNA experts ( no you arent one) have decided there are a ‘very close match.’ Ignore those ‘possible’ capacity numbers for Sardine Air And Im sure Boeing might spring some surprises in capability once its EIS- as they have plenty of time for design tweeks

You know, how many passengers can the A321neo have max out? And the MAX 10??

According to LNA who base their numbers on cabin length and allow for galleys and toilets the Max 10 is only 3 seats short of a standard A321 . number of emergency exits comes into it , but they have been added to the Max 8-200 already

Wizz Air does pack in 239 in its A321 neos so Max 10 is going to be around the 230+ number

Apparently an A321neo with 196 seats is NOT max out! Seven more seats than the MAX 10 according to LNA! These are the facts you chose to ignore in your rantings.

A321neo (ACF Version) max 244 Seats Max10 max 230 Seats

= +14 Seats for Airbus by more Range.

LNA said the Max 10 compared with a similarly eqipped A321 is *3* seats difference ( half a seat row) Where did you get 6 seats from. It hardly matters anyway

Airlines with much more seats need extra exits , Max 10 in normal version doesnt have those ….but wait can be adapted for that as the A321 sardine version does.

Lol. I provided an exact quote from LNA above. Sigh.

Pedro and Duke. Context Gentlemen. Pedro has it right. A standard MAX10 uses a type B mid cabin exit door to save weight. Weight on the -10 is critical because the gas or people tradeoff point is less advantageous than the AB. In order to add seats, you need exit capacity gained by using the wider class A mid cabin exit door. This door is 4 inches wider, weighs a lot more and allows you to have exit capacity to be legal at the extreme end of seat count. That weight costs you fuel and range. Ultimately you get 2 aircraft that are very close on range/payload until the MAX runs out of divert fuel before the AB does. If the differences really matter is up to the route structure the customer fly’s BUT when you sell the airplane without a customer, as leasing companies do, The AB is simpler to sell as less config management needs to be done.

Scott , the Max 10 like all maxes has greater internal fuel than the Neos (it came from its new wing for the NG) To match the fuel , a neo has to have 1 ACT , its a removable tank which is extra dead weight

And you are worrying about a exit door that is 4 in wider having extra weight. A321 doesnt get a sardine capacity without extra width doors too, theres the slimline toilets also used to squeeze space some more.

How come the MAX from BA also follows with slimline toilets, for “sardine capacity”?? 🙄 (AAL for example.)

Duke. The -10 lacking belly fuel , at high seat configs runs out of divert fuel before the Airbus. It has less range. That is an indusputable fact….. BA tries to get some of that range back by installing lighter mid cabin escape doors as standard allowing more fuel to be loaded.. Remember there is a crossover point where you carry either gas or people, not both, the Max10 hits t¹his point before an Airbus. If you look at the range payload charts, it’s obvious what’s going on. The Airbus with 1 belly tank does lose out on belly cargo space. All airplanes are compromises, the Airbus may be more easily configured but each operators specific route structure makes each decision different. Ultimately the decision comes down to a mix of things including those beyond strictly aircraft performance. Please quit arguing that the 321 is inferior to the MAX. It isn’t necessarily so. The 2 aircraft are close enough that either could be the correct operator choice and that aircraft performance alone is not the only deciding factor. Think bigger and work the Equation not the elements inside it…

Boeing missed out on buying Bombardier C series and instead wasted money on lawyers!

> Boeing missed out on buying Bombardier C series.. <

Boeing, to their arch-competitor: "Here, take it! All yours, and for [essentially] free! "

No one paid $1 for $100% of Cseries business Airbus didnt want it either at the same conditions offered to Boeing.

The government in Canada ( both Ottawa and Quebec city) didnt want the other rumoured buyer on Bombardiers terms which was Comac and they knew Airbus with its multi country plants was the only viable choice.

Special deal was C$1 for a part share in only the final assembly line and all the planes IP. The production sub assemblies plants in Montreal and Belfast UK ( complete wings) were bought for a a considerable sum plus cost new FAL in Alabama. Bombardier sold separately its DHC line and the CRJ support business and retained the business jets ( Lear in Wichita has just closed)

If Boeing had bought it they would not need Alabama, so that was an Airbus decision self imposed burden.

Boeing would have taken in for a bonfire. Boeing is a scavenging entity. Just like the US wrapper.

Boeing was more interested in another manufacturer , remember. Was that going to be a bonfire ? Anyway like the Embraer JV , any buyout of Cseries would be a JV with Quebec pension fund , which is like a golden share, so you cant break it up

My guess is that Embraer as a “high quality functional unit” would not have survived the experience.

Embraer is the poster child for globalisation of manufacture which you rail against, now its a ‘highly functional unit’ ?

Hardly any of the E series major structures are made in Brasil – there is a plant or two owned by a global aerospace businesses who do the work while Embraer does mostly final assembly only Some assemblys were even made in Everett, yes that one

“.. global aerospace businesses who do the work while Embraer does mostly final assembly only”

And without any major complications. ( Same is valid for Airbus.)

See, my “RAILINGs” as you so nicely put it are about US/Boeing style ( trying to shaft every one else) globalization.

Not the same as Airbus – who own plants around the world

Broughton wing- Airbus owned Hamburg- Airbus owned, theres multiple other sub assembly sites in France Germany and Canada – all Airbus subsidiaries

Embraer only makes the nose section Japan is even in on the design production ,Kawasaki does entire wing structure for E190/195 https://global.kawasaki.com/en/mobility/air/aircrafts/e170.html

Yet they still haven’t made any money on it and continue to wrap dollars around each delivery. Disregarding the whataboutism of talking about the cseries in a Boeing post, it’s far too early to take a victory lap on this one. Even if they become positive cash per plane they still have an aircraft that’s not harmonized with the 320 from a cockpit, Mx or operations standpoint.

Many here have no idea about the difference between cash margin and profit/loss. My two cents.

Yes, most likely does Airbus need to launch the A220-500 just to renegotiate all supplier contracts and drop the A220-100. Most likely with an engine option. The A220-500 should then be a cheaper A220 with a few rows bigger cabin with a new wing that UK pays Belfast to make. Then the A220-300 can be dropped unless it can be made cheaper than the -300. It depends on how much of the optimal -500 can be carried over to the -300 in a Block update. Now Airbus is a bit stuck in old contracts, the -500 would change all that with Airbus jetliner engineers getting bored just doing cost/productivity and weight optimization work.

They couldn’t buy it because it’s too modern and would make the Max look bad. And no yoke; real airplanes have yokes!

And don’t forget positive feedback from said control items and throttles not bump steering.

Because the 787 and 777’s are not modern according to you?… Any other more relevant comments please?

S.”…While A321neo has more than 940 in the air. And almost 5000 orders alone…” — I’m afraid you’re wrong, The parity of the A321neo is roughly equal to the A320neo. It is simply impossible that there are 5.000 A321neo orders out of nearly 7.000 gigantic entire A32Xneo family order —-

S.”…Boeing announced that they won`t do a NSA or MOM. While Airbus will sooner or later bring the A225…” —- So as late as possible. I find it hard to imagine Airbus cannibalizing one of their best-selling products. However, I would see the A220 cross section being reused for a possible replacement of A320neo around 2035 with CFM Open-Fan Next-Gen Engine. Then reuse cross section of the A32Xneo for something like very efficient A321 or A322X size for the replacement A321neo

But for now I see both Airbus and Boeing having to put positive cash flow on the table in this decade before moving on to something “fairly new”

—– S.”…Max still doesn`t have an answer to A321neos….” —— With the solution of a simple stretch and simple development derisked, thé 737MAX-10 is the downhill answer to the market +1000 orders in 4 years, including 2 years of uncertainty that held back MAX’s orders before recertification in 2020 is not bad at all. —

S.”..While A321neo has more than 940..” in the air…” —- Perfectly logical since the A321neo was launched in 2010, while the MAX-10 “only” in 2018, adding 2 years of grounding with that one. —–

S. “…Airbus A330neo isn`t doing much better sales wise, but with a freighter incoming ..” —- Nothing prevents the competitor from doing so with its 787-F, although nothing has been heard about an A330neo-F…

https://aviationweek.com/special-topics/sustainability/cfm-details-open-fan-plan-next-gen-engine

We are moving away from prop jobs, not towards them.

People do not like prop jobs (I love them but that is me).

Ak Airlines (Horizon) has dumped its Q400 fleet and is going all jet.

CFM is selling the snake oil that in 12 years there is no improvement in jet engines as well as getting free money from Europe to develop a core and a gear box.

Its called throwing sand in the gears while they try to catch up.

Or, as the cartoon used to say, Is a Bird, its a Plane, no, its Superdog.

US isnt the typical world market ( much bigger country than most and mostly more competition) the market is further distorted by the scope rules which have a max 76 seats or weight. Thats right in the TP sweet spot. Other countries that use regional jets like their seating around the 90 range and TP for the next size down

Trans. Turbine engines have been bumping up against metallurgy limits as they try to run hotter in order to run leaner mixtures and lower SFC. the push has been to smaller hotter gas generators. They have been at the point of diminishing returns for quite a while. The other way to improve things is with geared fans, or ultimately UDFs. We may finally be to the point where “props” become the norm,

P&W had not pushed those limits like GE, they had the GTF.

So P&W not only can improve the GTF end, they can go more exotic materials and get more.

I don’t buy the Open Rotor.

> ..nothing has been heard about an A330neo-F… <

"..Faury hinted that Airbus is nearing a decision to launch a freighter version of the A330neo, now that it has started dFaury hinted that Airbus is nearing a decision to launch a freighter version of the A330neo, now that it has started development of the A350F. “We have to choose our battles,” he said. A launch of an “A321neoF” was “not very likely” for the time being. “You can draw your own conclusion about the third [A330neo] platform,” he said.evelopment of the A350F. “We have to choose our battles,” he said. A launch of an “A321neoF” was “not very likely” for the time being. “You can draw your own conclusion about the third [A330neo] platform,” he said… "

https://aviationweek.com/air-transport/aircraft-propulsion/airbus-boosts-widebody-production-slows-narrowbody-growth

Quite a thorough article, for those in the evidence-based community.

Yes indeed the announcement of the A330neo-F is very recent and ignored. Take note.

I had not seen it either though it says they are looking at it vs are doing it.

We are seeing a sudden drop off in Air Freight and or more accurately a shift to belly freight with international wide body routes getting back into the swing.

I like the full honesty on next years narrow body production. They should have done that in 2022 rather than act like Boeing.

9 a month of A350 seems excessive. Historically the average for that size is more like 7. 787 might be able to do 9 (if they can get there) but it was totally unrealistic at 14 just to chop the produion and that was before the joint issues came up.

And the RR issues are not going away soon.

MAX10 has been stated to be certified in 2024. So that is off the table for this year. Makes sense to have it up in Everett as noted.

The MAX7 should be built this year. There are also P-8 and Wedgetail production. Those are supply limited not production limited. They also are not normal production so like The A330CEO, that has impact on the costs or profits on them.

Defense side will be moving up and probably a lot. The Wedgetail is the only near or medium solution to the AWACs decline.

The MAX10 competes fairly well against the A321 (high and hot and the rotation limits). It does not compete against the A321XLR but that is a niche product as you get the range at a cost in Pax load and the tank situation is not resolved yet.

Boeing needs to stabilize itself. Clearly it is barely managing current production (finally) let alone new.

The 777X has not even begun official FAA tests and it needs to reach that milestone.

“…CFM is selling the snake oil that in 12 years there is no improvement in jet engines as well as getting free money from Europe to develop a core and a gear box…”

I don’t understand your disappointment about CFM. They have powerful, robust and reliable engines.

It is normal that they look to the future when they could catalyze the development of new aircraft for Airbus and Boeing of the 2030+, with Open-Fan engines.

Who would do that now?

Its not disappointment with CFM, its that anyone would believe the line of BS that is being spun there.

Open Rotor has been ballyhoed since (early 80s?). Its always just 10-20 years away for success. Its always morphing when they figure out how bad and non viable the current variant will be.

So they get free money to play with because the EU has a prop program, not because it has merit. By doing so they get to develop a new core and gear box.

Its not going anywhere like it always has not gone anywhere. Oh, let build an airplane that has a captive engine market and risk a face plant on a prop job.

FAA allows new airliners to fly certification tests using ‘Letter of Intent’ (LOA) approval rather than wait for the full TIA process ‘507. Official Flight Tests. Official flight tests will not be started until a TIA or LOA has been issued.’ https://www.faa.gov/documentlibrary/media/order/8110.41a.pdf

Theres always a waiver to any ‘rule’

Duke. The hold up was caused by the late evaluation of public comments coming back off the derivative regulations. These were changed as a result of congress passing the aircraft cert and safety bill….. the late completion of that reg has a cascade effect where the manufactures have to rewrite their internal processes to be in compliance before they can do cert flights. You cant get TIA until MIDO and Flight standards agree on the path forward……. Airbuss’s integral tank is also hostage to this process…. In any case, it matters little under what reason you test fly because there is so much flying not related to actual cert flights that needs to be done……. You are fighting windmills

“Airbuss’s integral tank is also hostage to this process….”

Which was intentional:if Boeing must reform also hamper Airbus in the process. Leveling the table so to speak.

Just like inventing FAA ETOPS vs just going with ICAO extended times.

There are more examples around.

ICAO is just an airlines centered group not a regulatory agency

The FAA was first to allow 180 mins ETOPs from EIS for 777 in 1990 They already had 180 mins under strict conditions from 1988

The JAA, as the european agency was known, disagreed ( included many non EU nations in Europe)

Of course back then etops was only for twins and most over water longhaul was done by tri and quad jets

So the ICAO is little more than a trade association?? 🙂 Have a nice day.

This is what a so called international “rule-based” system is treated when they don’t like it!

Ask Qatar about ICAO rules which are supposed to stop Saudi Arabia/UAE from black listing its overflights until recently The Saudis just thumbed their nose at it. ICAO doesnt have a regulatory function, countries can follow their rules or not, they arent some sort of super rules maker like you erroneously claim Its airline centric as the phrase ‘civil aviation’ means what ?

My main point was the FAA led the way in Etops changes while the europeans dragged their feet.

There are already 30 MAX 7 and MAX 10 in the inventory.

Last but not the least, the 737 Max 10 is not as effective in “its overall versatility, performance capacity and passenger appeal as the A321. That’s just the bottom line.” ~ Steven Udvar-Hazy

Incorrect . The Max 10 is roughly equivalent capability to the A321 standard model ( except it has more internal fuel without belly tank) https://leehamnews.com/2017/03/13/boeing-737-max-10-analyzed/

Lessors ‘like’ a plane type with a bigger in service quantities.

Passenger appeal ? They want their baggage to arrive with them and not to have a booking bumped.

Our poster knows the best. Sadly our poster is much less influential than Mr Udvar-Hazy. I know whom I’d pay more attention to. 👌

If I recall , Mr. Udvar-Hazy also predicated the 330 neo will sell at least a thousand units.. Even the so called experts cannot accurately predict future aircraft demand …

It’s still early days my friend. LNA: ” … the A330ceo family has the broadest operator base, and there are still almost 1,000 units in passenger service.”

-> …except that in much of Asia, “medium-haul” works a bit differently. There are a lot of very high-demand routes, where aircraft the size of the 767 and the A330 have been very appropriate. This region has seen more sales of the A330 than anywhere else in the world. Its replacement in the Airbus lineup is the A330neo. And unlike the larger A350, the A330neo is financially viable even for such shorter, medium-haul routes.

THE OPPOSITE OF “LONG AND THIN” ROUTES? The 787-8/9 is the closest thing that Boeing has to an A330neo. So far, Cathay Pacific hasn’t placed an order for this type. But like the A350, the 787 is better suited to the “long and thin” routes that Boeing designed it for. It is not clear if it could do the kind of medium-haul work that Cathay has in mind. And this is where Boeing’s current aircraft lineup reveals its mid-size aircraft gap, in practice.

medium haul for Cathay with A330 type …..is from Hong Kong to Europe. ( 12 hrs for HK to Paris) Works well for Chinese airlines too to various European capitals and such.

No I dont claim to know best I rely on experts like LNA published estimates , while you rely on twitter , dont read Boeings financials – hence cant see the unit/program accounting numbers

You need to get better intel from your ‘balloons’

OK, so let’s say your losses are up, but your free cash flow is also up, what does that mean? In Pacioli’s equation where A=L+E there are some limitations. The numbers on the books only reflect those things where can be measured using monetary values, and either they have been through an arm’s length transaction or there is some generally accepted method for valuation and two independent teams of accountants can be expected to come up with similar values. So, there are things in each of the three top clades of the equation which are not on the books.

Everyone knows this about the assets and the liabilities. Typically in any company dealing with some sort of technology product or service, its most valuable assets walk out the door at the end of each shift. Similarly, there may be risks that are potential liabilities. These may or may not show up on the books. If they do, they are typically there in the form of reserves in the equity section.

Hidden equities are things that are required to satisfy Pacioli’s equation. If there is an asset that is not on the books, who owns them? In the case of employees, they own themselves and represent a key part of the equities. This routinely shows up in healthy companies in the form of employee’s showing that they deeply care about the place and doing above and beyond what is nominally expected.

OK, so how do you monetize as a loss things that are not on the books? Clearly this is what would have to happen to have positive cash flow, declining debt, and increasing losses (Pacioli’s equation must be satisfied). This is actually quite easy. One quick method in a case like Boeing’s would be to get rid of qualified people, replace them with unqualified people, thus dramatically increasing the costs of production, while at the same time your sales are drawing down the inventory.

This would have the same effect as a switch from one one of the other methods of inventory valuation to FIFO, without actually showing it on the books. If you have a whole lot of expensive buffer stock in inventory, this works. Your inventory valuation goes down faster than sales, while your cost to produce goes way up. Does that shoe fit Boeing – maybe on the commercial side of the business? Just saying …

As an aside, there are several other tried and true ways to monetize things that are not on the books and have them come onto the books as losses. None of them are good for the health of the firm. They all amount to liquidation activities.

Maybe it would be better to ignore what the c-suite folks in Boeing say and instead only look at the results of what they do.

Wow, is that a small novels way of saying stay tuned?

I just don’t think we should pay any attention at all to what Calhoun and others in Boeing’s c-suite say on any topic about the business. What we should do is only look at what they do, and construct behavioral models that fit their actions. Then we should use those models to talk about what is likely.

I think we spend way too much time talking about intent, which assumes some rationality tied to our assumption that they are there to nurture the “going concern” assumptions about Boeing and it’s future, and that just maybe that motivation has nothing to do with what they are about on a daily basis.

Ostensibly, this discussion is prompted by what Scott wrote about Brian West’s comments. I’m just saying that maybe we should just ignore West’s words, and only look at where he is getting that free cash flow while at the same time he is piling up billions more in deficits in the equity section of the balance sheet. The talk here is as if he thinks he is in the airplane business. What if he thinks he is in the Boeing liquidation business? Which of these assumptions would be a better fit to his actions, ignoring what he says?

“.. I think we spend way too much time talking about intent..”

I’d qualify that further: “… talking about PROJECTED intent..”

so much in your face lying … This saturates the domain of commercial and political communications from the US.

I found it quite interesting the 787 for Tata will have GE engines.

Also ordered 40 A350, didn’t you know?? 🙄

This remains a lost market share for RR. Indeed, they are well established in the Asian market…

Selecting the 787 with GE engines is like stepping into the RR stronghold. The A350, I remind you, is only powered by RR engines. AI had no choice. It would seem that the 777-X GE engines don’t mind them…

… the biggest ever order of Trent XWB-97 engines 68 (+ 20 options) to power the @Airbus A350-1000 & 12 Trent XWB-84 engines to power the Airbus A350-900

https://mobile.twitter.com/RollsRoyce/status/1625536662519398401

What ‘blow’ to RR Air India existing 787 fleet ( 27 units) is all GEnx powered too, it was a slam dunk they would repeat

That and what NTU 787 lawndarts has Boeing sitting around? ( how many 787 are idling on the lawn anyway? )

TW Really no surprises there, considering AI’s current 787 is GE. powered.. What a massive win for GE /CFM on the Tata order.. Still a growing list of undecided engine contracts on the 787…!! Some major carriers yet to make that decision.. United , Emirates, and China Airlines yet to officially announce their selection for latest or existing orders.!! Hard to believe United would part with GE… That leaves Emirates and China Airlines as the major carriers yet to decide… Perhaps Rolls has a shot on those orders.!!

I suspect no on Emirates strongly, they got smacked hard with the over blown claims on the Trent 900 and will pay a price for that (granted they bought into it knowing better)

China airlines? Again I doubt it. They have exposure to the RR engines and given a choice they will not pick the worst by far.

What I find interesting is that they have to know the A350 XWB is not giving good service and they buy the aircraft. That is a head scratcher.

What overblown ? Its just you repeating the anti RR messages by the GE/PW fan boys in the media.

The 777-200ER were retired early by a lot of airlines as the PW engines were failing spectacularly https://www.usatoday.com/in-depth/travel/news/2021/02/22/boeing-777-grounding-engine-failure-pratt-and-whitney-united-flight-328-who-makes-the-engines/4541359001/ “Two Boeing planes dropped engine parts on Saturday. Same engine manufacturer as past events.” 2 in one day … same as past events

Thank you @Dukeodurl. Our friend @Transworld is obssessed with parroting the GE/PW diatribe about RR’s poor performing engines dating back as far as 2014 without ever providing updates on current performance.

For @Transworld I am providing 2 links that are examples of the false news he keeps repeating 1. Addressing the current performance of Trent 7000 engines as in answer to a question from Bjorn of LNA last week the CEO of Airbus said the engine was performing well as were the other RR engines on Airbus aircraft. See limk immediately below 59.23 minutes in the video where he provides Bjorn with the answer. https://www.bing.com/videos/search?q=airbus+financial+press+conference+2022&docid=13932542369927&mid=85314B85EF2F1EB64B5985314B85EF2F1EB64B59&view=detail&FORM=VIRE

2. This is a flightglobal report from also last week on the current performance on the CFM (GE/SAFRAN) LEAP engines on the A320s, B737s and C919s https://www.flightglobal.com/air-transport/leap-engines-still-suffering-in-harsh-conditions-says-safran-chief/152149.article

Now hopefully we can start to have an end to unsubtantiated claims of poor RR engine performance in the forum and get some REAL news on the various OEMs, the products, and how well those products are doing or not doing.

Just a gentle nudge my friend @Dukeofurl, though I enjoy your spirited defence of Boeing and your pushback with @Frank, I just want to let you know that generally @Frank is correct on the analysis of Boeing’s financial state. Small disclosure, I am a finance professional of 40 years plus having practiced in Europe, the Americas, Asia and Africa and his dissection is generally accurate. Anyway good luck to you my friend.

Thanks for your useful information Mr B. of course Boeing dug itself a big hole financially but with $400 bill on order backlog and $50 bill already in advance payments ( but listed as liabilities even though almost all wont be refunded) they have a path to improving their performance with a $10 bill cash flow for FY2025 or so predicted. Some people just hate it when their doom and gloom for Boeing and its demise turned out ( as some predicted) to wrong

Airbus has hit deep pot holes too. A400M was expensive mistake (€7 bill for Airbus and billions more for customers) only because the captive customers couldnt walk away. The A400 is like Boeings planes , turned out fine …eventually. In the long run of things thats what matters.

1st Time In History, Modified F-16 Fighter Jet Completed AI-Controlled Flight

https://www.youtube.com/watch?v=YePN_yLk_hE

…”Sales gravity for Boeing still is at the MAX8 size slot. If the MAX10 is really like for like offer matching the A321: why are MAX10 sales not 50+% of MAX sales?…” —-

It’s really very simple to understand. The A321neo was launched in 2010, the 737MAX-8 in 2011 and the 737MAX-10 only in 2018.

As I explain in my review you may not have read. The center of gravity cannot shift to the MAX-10 in such a short time. I don’t see the MAX-10 beating the MAX-8 anytime soon. It will not in the current state of the market and maybe never… Maybe…

Formerly the A321ceo did not sell as much as the A320ceo but with the “neo” it is ~50/50 and not sure that Airbus expected such sales. However time will reveal things there are too many parameters to take into account. Remember that Airbus must force itself to honor promised deliveries. This has not been done yet and we do not really know when the maximum production rate promised by Airbus will arrive, There will still be 10-12 years if not more (2033-2035+) of production for the A32Xneo and 737 MAX families. (!) While I anticipate the launch of their replacements around ~2028 for a 2035-2036 EIS…

Things should change so let’s not put the carts before the horse… ——–

…”There is nothing quite like a well formed and posed question. Thank you…” —- There is nothing quite like a well-answered and well-formed question Thanks

MAX10 is a better MAX9 which is a reengined 900NG.

My theory is that the next bigger frame in a family gets preferential interest when its range capabilities expand over some “magic range” ( that need not be fixed over all times ) You can follow my theory via looking at A320 family sales distribution over time. After the A319 was introduced it could gather about 50% of interest. Over time the A321 went from low interest to 50% while the A319 after its peak in the 2000 years has lost out to near invisibility.

Boeing could not achieve that for the 900NG/MAX9. ( Though with the market gravitiy sitting half way between A320 and A321 the then largest 737 model sitting in that center capacitywise should have flown off the shelves.

MAX10 fares better but not comparable to the A321 success by far. IMU the capacity expansion is hampered by a growing bag of compromised design issues. Its leverage on tech/engine improvements is limited.

A321 was also compromised by design issues hence the XLR increased weight, new wing flap design and the lack of internal fuel with a novel belly tank structure

“A321 was also compromised by design issues”

The A320 platform has the leeway to make those changes effectively. MTOW potential is what the 737 platform lacks.

The XLR tank is a major change. obviously. _and_ it is enabled by that available MTOW headroom and sufficient belly space.

The new XLR high lift design is a simplification of the existing solution on the A321 IMU it will probably be backported to the smaller frame(s). This then is an overall simplification of the production lineup.

The -10MAX gear leg changes lacks that kind of synergy. more complexity, wrong direction. the wing and high lift design is a pimped version of the original 1960ties type start.

Uwe wrote The -10MAX gear leg changes lacks that kind of synergy. more complexity, wrong direction.

Your view seems to be focused on the gear leg itself. If you look at the ENTIRE problem, which is getting fuselage clearance for rotation angle, it is the simplest solution there. The -10 uses the same doors, center wing box interface and retraction cylinders as well as swinging in the same trunnions as all other MAXs. The change was limited to the gear leg itself and basically added a pull rod that pulled the lower strut into the upper strut housing. They added 3 parts per side. Its not driven, there is no actuator or system difference between the Maxs. I think you protest too much….

” I think you protest too much….”

I don’t protest. I observe. And I have quite enough engineering background for this to be a valid observation.

“The new XLR high lift design is a simplification of the existing solution on the A321 IMU it will probably be backported to the smaller frame(s).’

Really ? You seem to have forgotten ‘The A321 has double-slotted flaps while the A318/A319/A320 all have single-slotted flaps, also known as simplex flaps’

So thats means 3 different actual flaps systems for one family …its getting complicated here. I doubt if the XLR has reused the A320 parts

It would be a gain if you could “brain up” on these details before answering.

The family up to A320 has single slotted flaps. the A321 got double slotted flaps for more lift with the longer fuselage limits. A321XLR get a SINGLE slotted solution that provides for better lift than the established solution based on improved aerodynamic understanding. ( and pandering to the increased MTOW ) Talk is that the XLR solution will over time be applied to the smaller models. unifying, simplifying … impact on manufacturing and MX cost … ( depressing required takeoff speeds should have a wider impact too )

So you agree *now* that the A320/321 family of planes will have a complicated parts/maintenance system of 3 differing flaps

And yet it was a big deal the Max 10 had a few parts in the undercarriage that were unique ? Just repeating what I had to point out for you doesnt make your point . For maintenance reasons , no they wont be changing the ‘basic’ A321 coming off production to the newer system. Thats would spread their complication further for airlines

‘In October 2016, Boeing’s board of directors granted authority to offer the stretched variant with two extra fuselage sections forward and aft with a 3,100 nautical miles (5,700 km) range reduced from 3,300 nmi (6,100 km) of the MAX 9. Boeing ended the 2017 Paris Air Show with 361 orders and commitments, including 214 conversions, from 16 customers ‘

Pretty hard to say it was launched in 2018, if in the 2017 Paris Air Show they had 361 orders, huh?

‘Authority to offer’ marketing is only a provisional way of getting orders on a new plane . Its not till Boeing made a definite decision to build the plane the next year that the provisional orders became firm

Incorrect. The MAX 10 was launched in 2017, not 2018. 🙄

Well if you want to quibble a year that’s okay …

The A321XLR, a niche according to BA, was launched in 2019. How many orders it has? 600 give or take?

BTW BA discloses its backlog for the MAX 10 is *720* only.

Not just according to Boeing, according to some people too.

But I HAVEN’T seen Boeing say that anywhere. Many make up stories here.

It’s very funny that for you 600 orders of A321XLR is good but 720 orders of 737MAX10 is bad according to you.

(!) It is time for you NOW to prove to us the veracity of your statements concerning the sales of the 737MAX 10 to 720 orders and not 1,000 orders. Also include MAX-9 while we’re at it…

More like watching a train crash in slow motion. What about taking some cortical pause? Think. then write.

Apropos: https://www.google.com/search?q=A321XLR+Boeing+niche+product

FlightGlobal: “Boeing executives say … XLR just a niche product”. 🙂

Thanks for the link (from 2019).

What do I think of it ? It’s still a niche market as I said before and the reason why Boeing canceled its NMA and certainly develop the 737 replacement around 2030+.

Boeing has repositioned itself on its priorities

For the moment, it will bring the positive cash flow back to the table…

(!) Lufthansa also thinks the same thing. https://www.airdatanews.com/for-lufthansa-a321xlr-is-a-niche-product/

Pay attention: I’ve said *many* times before, Boeing SEC filing 10K 😏

Hang on a moment! You seem to be comparing sales of the A321XLR to those of the 737Max10 – should you not be comparing sales of the Max10 to all variants of the A321 in the same period, for a fair comparison? I don’t know what the exact outcome will be, but I suspect the picture would look rather different!

Yes they are two different aircraft one is complex in development and different compared to the A321neo variants, and the other is a simple strech of the 737-8/-9 MAX’s

If they are compared both it is just because they were launched almost at the same time for 1,000 orders of 737MAX-10 and 600 orders of the niche market A321-XLR

Then the comparison you should be making is sales of the standard A321Neo vs the 737-Max10 over the given time period. I cannot tell what the answer actually is, but my suspicion is that it will not fit your narrative!

(Hey, you know BA, and I repeat AGIAN, said there are only *720* backlog for the MAX 10.)

You have to add orders for Max 9 too. As it has no direct comparison to other planes but is way bigger than the A320 ( even max 8 is bigger/better) The A321 has some runway advantage because they gave it new double slotted faps carried over to neo ( and different again on XLR)

heres was LNA take on how great the Max 8 is over A320 12 more seats , 2.5m longer cabin, better range on standard internal fuel. ( 3500nm) So we have the max8 compared to A320 yet its 12 seats less. But it is what it is, so lets do the same with the Max 9 , compare to the A321 neo which only has 15 seats more ( on LNA seating comparison)

The Max 7 is bigger again than the A319 neo ( which seems to be dead in the market) LNA-‘ A319neo has 126 seats in our normalized domestic cabin, the CS300 132 seats and the 737 MAX 7 138 seats.’ A220 leads in many ways compared to other types but its a completely different family

Scott is sending out positive signals about Boeing recovery, as Boeing does. Let’s hope for a healthy competition later on.

Not much point in selling aircraft if there isn’t enough margin on them to make a (meaningful) profit. When did BA last post a positive quarter? Why is BCA consistently losing about $600M per quarter, despite good delivery figures?

BA’s debt is only going down at a snail’s pace, so there’ll be crippling interest payments for quite some time to come.

https://ycharts.com/companies/BA/total_long_term_debt#:~:text=Boeing%20Total%20Long%20Term%20Debt%20(Quarterly)%3A%2056.80B%20for,31%2C%202022

“Free Cash Flow” in Boeing’s case is a seeming perpetual-motion machine, but with several pesky leaks.

Bryce There is a point you are missing. Aircraft built with minimal margin are still beneficial to the enterprise in that they paid their chunk of the facility overhead. When you are as tight as BA is, it is better to build/sell minimal margin aircraft and pay the fixed expenses than not to. You ARE correct that spinning your wheels on low margin products doesn’t allow you to grow in a healthy manner.

…”Pay attention: I’ve said *many* times before, Boeing SEC filing 10K ..” —- Could you please be more explicit. We are still waiting for your disputes on the 1,000 737MAX-10 orders…🙄

“…The backlog of A320neo family vs the 737 MAX tells me everything I need to know..” —- What is the purpose of this please?

We can also write the thing as follows,

“…The backlog of Boeing widebody aircraft vs the Airbus widebody aircraft tells me everything I need to know..” 😉

Add to that the BBJ variants far outsell the ACJ versions and then we come to freighters ….. and guess what ? Business is business.

Its like some of these commenters have found some ancient talisman which they clutch as though their life depends on it … but its not some work of ancient craftsmen , instead it just a few words on it that are repeated over and over to appease a deity… the god of single aisles , apparently

…”Not much point in selling aircraft if there isn’t enough margin on them to make a (meaningful) profit…” —– And yet the frustration of M. O’Leary, Rayanair CEO proves you wrong…

…”O’Leary said he was still interested in a large order for the MAX 10 – the largest member of its best-selling single-aisle airplane family – but that Boeing had NOT offered ATTRACTIVE enough PRICING yet…”

…”We would hope eventually they will get there,” he said. —- O’Leary may be waiting an eternity, obviously….

(!) “Ryanair last year walked away from negotiations with Boeing (BA.N) for 200 of the MAX 10”

https://www.reuters.com/business/aerospace-defense/ryanair-voices-concern-over-boeing-delays-max-10-certification-2022-07-25/

(!) The quote is from Bryce, not Pedro.

Your (lack of) logic is stunning.

Ryanair already got 69% on its last order…maybe it was looking for 80% on the MAX-10s, for example? 69% is still unsustainable. 65% is breakeven.

154 deliveries in Q4 2022, and still $600M loss for BCA –> unsustainable pricing.

…”Ryanair already got 69% on its last order…”

Still with the lack of evidence and lack of source…? ___

…”maybe it was looking for 80% on the MAX-10s, for example?…”

“For example” ? If the example goes hand in hand with your pious wishes then yes .. “for example”… —- …”69% is still unsustainable. 65% is breakeven.

154 deliveries in Q4 2022, and still $600M loss for BCA –> unsustainable pricing….” —– Strawman argument development regarding a price, *for example*, without *source*. As I already repeat like a mantra. Boeing sticks its head out of the water. 2023 will be better than 2022, which was better than 2021. You are out of context and repeating the same straw man argument, which goes against Scott’s article

Change disc things have changed

While I agree to a degree – you still have Calhoun in charge and his consistent MO (so much so it looks like its in his DNA) is to do stock buy back and dividends. A minnow does not become a flying bird.

We don’t know until enough debt it paid down that there is discretionary money and then we see.

Like a Shark in the water with blood, you expect predictable actions.

The Leopard has not changed its spots.

Yes. The ‘Max 10 order of 200’ is like a weather balloon, it didnt exist.

There is however an existing order of 210 Max8-200 https://simpleflying.com/ryanair-ceo-boeing-737-max-delivery-plans/

Call the guy out on one misstatement and lo he follows toute suite on with another on highly secret price negotiations, but known to him apparently

I do not understand your comment Duckeofurl, you seem to say that the order 200 Max-10 does not exist?

That’s not what the article you shared says….

“Simple English”: There is a large order for MAX8200 from RyanAir. There is no large order for MAX10 from RyanAir.

There is Interest from RyanAir in the MAX10 but O’Leary is not satisfied with the offer from Boeing, deferred. all as of Sept. 2022

And he calls himself checklist …but doesnt check ?

My first thought is, that’s good news for shareholders, but does it make a dimes worth of difference for anyone else? Once they have positive cash flow it will go to share buybacks and dividends. I suppose if they are able to increase production rates it creates a few jobs in production support. My second thought is, that this news comes from Boeing management, not exactly an unbiased party. I want to see a headline someday, “Boeing CEO sees intractable problems with no solution, Recommends Selling the Stock Immediately”

It much like a ship that has been torpedoed and they were able to counter flood, patch the holes and the ship is stabilized.

Its not a win, its a hold, you are still down in the water, can’t function, major damage and you limp or get towed to a dry dock and face a long recovery.

In Boeing case they have a lot of debt to pay down.

While I believe what Calhoun will do as soon as he can get away with it is to start buying stock and or pay dividends, we only know right now its not happening.

Kind of like watching the Dallas Cowboys, you want them to win enough they don’t do anything about their organization.

The best for Boeing will be enough money coming in to deal with the debt and not so much that they can do something smart while we wait for Calhoun to ride off into the sunset.

“In Boeing case they have a lot of debt to pay down.”

I see! The ship is now “flooded” in debts. Too bad, in better times, the owners and the capt(s) decided to take out all safety measures like extra war chest, life boats, water pumps and sold them for scraps to enrich their pockets.

I don’t think replacing Mister Calhoun- who is merely a highly compensated functionary- will make much difference, as he takes orders from way above. BlackRock™ types.. RTF’s comment from the other day is worth re-reading.

I’m going to throw out a question which is a bit, but not a lot, off topic: How is it that the GE cliques in the C-suite has been able to keep itself in power for 20 some years? Stonecipher, McNerny, Muilenberg, Calhoun: 3 out of 4 were direct disciples of JW (Jack Welch himself) and Muilenberg was so thoroughly trained by McNerny that he can be considered a disciple via the doctrine of apostolic succession.

Agree with your point. Your comment is excellent and usefull.

If the safety culture has been reinstated, there are still gray areas regarding decisions that could actually be altered by this kind of practice unfortunately. But I don’t want to put the cart before the horse.

Because D. Calhoun patiently ticked a lot of boxes to put Boeing back where Stonecipher, Mc Nerney, Muillenberg have led Boeing for over 20 years.

Unfortunately, even Condit was seduced by Welsh’s practices. He could have believed a lie and thought it was a mistake today and Calhoun seems to have recognized that too, he’s done a lot of good things since then…

I see tons of hope. Boeing delivering what they promised yrs ago is sold as new strategy. I’m afraid they’ll be pushed around for some time. On WB’s too, looking at portfolio, backlogs, deliveries and customer base. I would love to see new vision, from Boeing.

No suitable new technology has become an favorite excuse to avoid investment & save short term free cash for the last decade. And related executive bonusses that do not reflect company performance or real strength.

-> … There were zero deliveries off the 787 assembly line in January.

https://mobile.twitter.com/dominicgates/status/1627382392053989376

In all fairness to BA Pedro – in December there is a big push by both OEM’s to make y/e targets. January is a catch up month, with even the employees running away on accrued vacation time, to avoid the winter chills.

I suspect BA, rather belatedly, found out they priced the 737-8200 too low (as they plan to have a separate FAL for these “unique”/complicated configurations) and it becomes a major obstacle for Ryanair to place a major order (after asking their most experienced workers to go).

If an airline wants to acquire one or others models of aircraft, it only has to put its hand in its pocket that’s all…

Airbus and Boeing are only asking for that!

The rest is just speculation…

Reuters: Rolls-Royce beats forecasts with 57% profit rise

Rolls-Royce shares soar by 23% https://mobile.twitter.com/CNBC/status/1628760562598305793

What then did we see in the week before last week:

“RR on the ropes, no products, no profits, no future.”

My guess at the time was that this was another case of the media protective shroud protecting GE.

> My guess at the time was that this was another case of the media protective shroud protecting GE. <

Good news for RR, the order of IA put butter in the spinach…!

…”My guess at the time was that this was another case of the media protective shroud protecting GE..” —- Lol! Are you serious with this? The media protecting GE? Why would he?

Maybe you just don’t recognize the obvious difficulties that RR went through ?

It is certainly due to the order of IA who put butter in the spinach… A happy circumstance for them and that’s good!

Its not that RR issues shouldnt be covered by GE had major issues with its new GEnx at the time and is doing the same with the GE9x ( a section had to be redesigned at the 777X test flight stage) hardly covered at all except in more specialised outlets

I see it as GE Aviation is only covered in depth by Bloomberg who are then syndicated widely for the general media. If Bloomberg dont do a story ( mostly their stories are puff pieces as exclusives from management, useful but …) then nothing much else is published

I wonder how BA will make its concessions.

-> Qantas sees delays like every other airline, with Joyce citing Boeing for delivering 3 787-9s 2 years late.

https://mobile.twitter.com/ByERussell/status/1628814771834298368

For those 2 years Qantas was only running skeleton international services. They wouldnt have taken delivery/paid for even if they were ready ‘Qantas has confirmed that it will take delivery of three further Boeing 787-9 Dreamliners as early as next year, after *suspending* deliveries in May 2020.’

Haha. As you regurgitate old news, let me remind you what happened: December 2021 Qantas will also take delivery of three new Boeing 787-9 Dreamliners during *2022*

And what about those airlines who have missed delivery of Airbus planes this January as only 20 made it On average they *have* to deliver over 50 pm to meet even last years low number compared to what airlines were promised. Apparently CEO Faury is blaming others

Obacht! They may have got them early in the December “Broom Out” already :-)))

Apropos with a nod to B deliveries in January: Who got into wailing lament that Airbus was cooking the books with high Dec output and low Jan deliveries 🙂

Delay of months is comparable with delay of years?? No kidding 🤣

‘…got them early in the December’

Please try to keep up Last year was a bust too, so you think they were over delivering last year when the numbers say they were well down on their ( revised ) guidance 720 revised down to 700 when December was down it was 661. Thats almost 60 planes *missing* from customers deliveries over last year Its getting worse not better with now below monthly deliveries for Jan 2022 (30)

FAA halts 787 delivery..fuselage issues https://www.cnbc.com/2023/02/23/boeing-temporarily-halts-delivery-of-787-dreamliners-over-fuselage-issue.html

Lol! Your sources! Or pious wishes? Be serious…

No situation makes a person an idiot. But there are those situations that allow idiots to expose themselves.

a bit of google foo would have allowed you to avoid this trap.

WSJ reports that FAA has issued a “no go” on paper trail issues.

..some kind of non-sentient entity, I think. Very strange syntax and word choices (not just non-native speaker).

Might be time to look aluminum lithium fuselage for 787 (keep the composite wing) Advance the technology to reduce the number of drill and fill fasteners There were studies showing a new design could reduce fasteners count by 25% on AL LI fuselages

Wonder if the 787 fuselage molds have advance wear and the parts are out of tolerance

Wow. Lightning never strikes the same place twice, right? 🙄

-> Deliveries will not resume until the FAA is satisfied that the issue has been addressed,” the agency said in a statement.

-> “The FAA is working with Boeing to determine any actions that might be required for recently delivered airplanes.”

-> “Boeing temporarily halted deliveries of 787 Dreamliners after notifying the FAA that it is conducting additional analysis on a fuselage component,” the FAA said in a statement.

BA discovered an analysis error by a supplier related to the 787 forward pressure bulkhead.

Boeing has “temporarily halted” 787 deliveries over documentation issues relating to a fuselage component.

https://www.wsj.com/articles/boeing-halts-787-dreamliner-jet-deliveries-due-to-documentation-issue-115f2f2

https://www.reuters.com/business/aerospace-defense/boeing-halts-deliveries-787-dreamliner-jets-faa-2023-02-23/

IIRC the C-Suite boys of Boeing were in NY (about a year ago?) quietly inquiring about an equity sale to raise some $30 billion. Their valuation of the stock price didn’t meet expectations, so they were told no.

$50 billion in debt is an awful big pile of money to pay back and the road back, if they try to do it from operations, is a long one.

What if the goal is to get the share price back up into a region that is palatable (they’re never going to get that $400 price, they bought shares back at…), where they don’t look like complete knuckleheads at that decision, to raise $30 billion and take a chunk out of the deficit.

Every year that they generate free cash flow, Wall Street will be on them to issue dividends and re-start buybacks. So;

Get the share price up.

Bite the bullet and rip the band-aid off in one fell swoop.

Pay off 60% of the LTD.

My take (for now) is quite a bit different, though the evidence is sketchy: that company appears to be getting the Sears – K-mart – Montgomery Ward treatment, but in *slow motion*. Forced dismantling, while claiming there is no choice..

We’ll see how it goes.

Boeing has existing commercial orders worth $200 bill plus and new orders last year alone of $41 bill.

$50 bill of its ‘liabilities’ are actually down payments ahead of delivery…. I think those airlines are locked in !

The facts dont agree with your high school level claims

Hmm 😒 …… WOW!! What more can I say!?! 🤣🤣

“$50 bill of its ‘liabilities’ are actually down payments ahead of delivery”

@Frank: any book recommendation for “beginners”?

He complained ‘liabilities’ are increasing for no particular reason !

Its because the order book is *increasing *( its more like $400 bill not the typo of $200bill I put) and down payments are increasing accordingly with the $40 bill on new orders this year he couldnt even explain that simple explanation in accounts. As with airplane contracts, depending on circumstances, deposits mostly arent refundable

Any luck finding the Boeing figures where they put unit and program accounting numbers side by side ? Its not that hard, strange that you refute they even exist A sneak preview for your education Program Accounting (859) (242) (643) (626) (2,370) Unit-Cost Accounting * (1,245) (503) (1,144) (1,812) (4,704)

And this was the FY2018- their best ever cash flow year Earnings from operations Program 7,830 Unit 8,828 Showing that rather than puffing their accounts , the program number was LESS than the Unit number

Oh Duke – why do you do this to yourself?

From the Q4-2018 financials:

From the Q4-2022 financials:

A whole ~$2.5 billion more in deposits.

Yah – must be those deposits, huh?

You’re embarrassing yourself, here.

Pay attention to these numbers: (2022) 5,190; 51,811; 11,846 (2021) 1,296 56,806

I am inclined to agree with @Frank. Looking at Boeing’s situation, with few readily available saleable assets, I have been thinking that an equity sale looks like the way out of the debt trap.

Off course current shareholders wont like it and it will also impact somewhat on management bonus payments to themselves. This however is the cleanest and quickest way to off load a large part of that US$50 billion debt overhang. Looking to clear the debt and develop new products simultaneously without a cash infusion, looks nigh impossible in the current situation Boeing finds itself in.

Off course large military orders for existing equipment that need no developing would help, but Boeing just announced its closing the F/A-18 line in 2025 due to lack of orders and the F-15EX sales look like they have stalled beyond the initial USAF orders. maybe more Pegasus Tanker orders etc., might help but I still don’t see how Boeing gets out of its debt jam within the next decade without some sort of equity infusion that will allow it to then start developing and marketing new large ticket products, both commercial and military.

Alternative is for Boeing to find a suitable (for regulators etc.) sugardaddy with deep pockets that will buy it and inject new cash. Problem is , I can’t think of one right now other than some large hedge fund that will take Boeing private and probably end up gutting it.

What needs to be assessed is Boeing cleaning up its programs and the 777X is the one left that needs that.

The other is you don’t do share buy back or dividends until the ship is fully righted and a new aircraft is been paid for.

There will be a large order of Wedgetails coming on as well as extending the KC-46A contract for another 170.

The defense side is in a lull but that is going to change. Israel is going to buy another 25 F-15EX type. The USAF is going to have to look at Continental US defense again.

The T-7A will hit serial production and then the follow up including a need for a modern adversarial fighter.

The 787 is clearly proving itself to be THE widebody of choice (supplemented by A350/777x)

Boeing can pay that debts down, its just a matter of will. .

All three programs still have issues. 787 will have abnormal production costs through 2023. Cleaning up both the 787 and 737 Max inventory will also cost them margin.

Check out the neat table on Program Development, page 34, of the 10Q from BA:

https://s2.q4cdn.com/661678649/files/doc_financials/2022/q4/c93682a4-8b3c-4251-a2ed-97c4e474a214.pdf

The 777X and the 737Max 7 now are tied for longest development to EIS time of 12 years.

SWA placed their first order for the Max 7 in Dec 2011.

After all this time, you think SouthWest is going to pay a lot of money for those aircraft, or BA is getting bent over backwards on them?

The timeline you are talking about, to get debt under control, will take them into the next decade. You think Calhoun wants to stick around that long (along with others) nursing a wounded animal back to health?

The only will they have, is to get paid.

There’s a reason Mister Calhoun was recently awarded a $5,300,000,000 bonus- and it’s not because the ruling class are unhappy with “his” actions.

Tell me how much Boeing had to write off/charge off for those defense programs? Shrugged.

@Trans I don’t if you are aware, but most Israeli military orders are paid for by the USA taxpayer, estimated to be around US$5 billion annually. Also 25 F15EX orders aren’t going to do much for Boeing if intent is to generate massive cash injection quickly to pay down the US$50+ billion in debt that the company is servicing.

-> How the stock market works: 3:50 pm NYSE reports order imbalance (Sell side) on $BA shares 4:10 pm WSJ reports $BA to halt Dreamliner deliveries

https://twitter.com/mdbaccardax/status/1628878637473693703

Greg Smith, ex-CFO, becomes AMR chairman

Qantas exercise purchase right options for 9 A220-300 aircraft,taking the total number of A220s on firm order to 29, for FY26 and FY27

No need to be condescending with those who give their opinion, it is not in this way, unfortunately for you, that you will gain credibility. 90% of the time unfounded arguments, out of context, nonsense based on pious wishes, and non-objective reactions. So please put away your childish smileys and chat like an adult. THANKS…

“90% of the time unfounded arguments, out of context, nonsense based on pious wishes, and non-objective reactions. ”

you don’t have to sign your confession with an Ad Hominem.

Bit by bit, skeletons are marching out of the closet?

Reuters: -> When Boeing obtained approval from the FAA to restart Dreamliner deliveries, the company said it was required to outfit those 787s with a modified version of the forward pressure bulkhead that would resolve previous quality problems. That version of the component was given a temporary operational limit of four years, providing Boeing time to update its documentation.

-> Deliveries of 787 are the main drivers of the $1.7 billion of year-on-year cash flow growth Boeing projects, Seifman said. “While there are puts and takes around cash flow timing, if we simply remove any more 787 deliveries for the rest of 1H23, the cash balance drops to $6.7 billion at June 30 after $3.75 billion of upcoming debt repayments, lower than any point since the start of the MAX crisis.”

AW: “Boeing subsequently discovered that the fatigue analysis for the bulkhead had been based on incorrect thermal loads. The fix required updated analysis, new limits on inspection intervals and a redesign—most of which was released to engineering by late May 2022. The fixes required the calculation of an updated airworthiness limitation, which will reduce the inspection threshold at which the bulkhead should be inspected from the current 44,000 cycles to an as-yet unspecified number.

Boeing is also meanwhile tackling another non-compliance issue related to the trim air muffler—part of the environmental control system which helps control cabin air temperature. The company is thought to have discovered quality escapes with the component, which is provided by a sub-contractor to Collins, the supplier of the air system. “

-> ” … reports Bernstein Research. “At the direction of the FAA, Boeing has paused delivery of 787s as it requires Boeing to complete stress analysis and documentation related to the forward pressure bulkhead.” https://mobile.twitter.com/LeehamNews/status/1629196124434366464

FYI My quotes and their sources may worth a reading- at least for the *evidence-based* community

Apart from the fact that you know how to “copy and paste” articles , what is your point of view regarding the 787 cessation of temporary deliveries?

They say it’s just a matter of paperwork

“… temporary operational limit of four years …”

Does the holdup now indicate that those 4 years have gone by? ( and without curative action on Boeing’s side.)

Adding: hints can be found in recent articles where the *humans* who build Boeing aircraft and its subsystems- once referred to as employees, or, a bit disparagingly, as “workers”- are now called “laborers”.

The narrative-shaping is not hard to see. Again: cui bono?

I don’t know what you are trying to prove with your comment. But I think the standards are pretty much the same with Airbus. I don’t see aircraft assembly as anything more difficult at Boeing and whether it’s Disneyland or Alice In Wonderland at Airbus… It doesn’t seem too relevant to me as a comment… Believe me there were difficult working conditions at Airbus, you don’t have to believe me though because I don’t have a source, but it’s hard to talk about “glamour” for this kind of position (assembly) in aeronautics in general.

But it is a good thing that these people are properly protected. Recently (a few months ago) there would have been negotiations favoring the machinists at Boeing which has been a victory for both parties so far

Talk about paying a small fortune. I thought credit card companies were bad…

From the last 10Q, pg 43;

(Dollars in millions)…………………………….. Current Long-term Total

Long-term debt (including current portion) $5,197 $52,338 $57,535

Interest on debt……………………………………….. 2,266 31,397 33,663 . . . If they don’t retire the debt early, they’re on the hook for $33.6 billion in interest payments.

Scheduled principal payments for debt

And they don’t have anywhere near enough cash/earnings to make those repayments. So, we’ll probably be seeing debt rollovers to even higher interest rates.

Didnt you claim before that existing loans ratchet up the interest during the term. ? So which is it, new loans pay more or old loans are on variable rather than fixed rates

As Ive shown before your numbers are easily refuted by an amateur like me From Boeings 2022 10K Debt repayments 22(1,310) 21(15,371) 20(10,998) New borrowings (22)34 (21)9,795 (20)47,248

Only $34 mill of new debt last year. as for long term debt its reducing (22)51,811 (21)56,806

A $5 bill reduction long term debt from previous FY, those numbers you have for repayments easily achieved on this basis

Poor Duke — you’re embarrassing yourself again. The $5B reduction in long-term debt has merely moved to short-term debt, because it is due within a year (actually, within 2 months at this stage). Scott even tells you this in the article above.

Since BA isn’t generating positive earnings, that repayment has to come out of cash-on hand. If/when cash on hand dwindles further, BA will have to consider taking on new debt to fill up the kitty again.

If you can’t understand the exchanges between @Frank and myself, perhaps you should just stay out of them?

Long term is ‘length of term’ It doesnt become short term merely because the long term ends this year ‘At December 31, 2022 and 2021 debt balances totaled $57.0 billion and $58.1 billion, of which $5.2 billion and $1.3 billion were classified as short-term’ they consider long term debt that is coming due is “current” its not moved at all. ‘Long-term debt (including current portion) current $5,197 LT $52,338 Total $57,535 So its clear even without your car boot accountant advisor you are ‘underwater’ and drowning fast

Rather than being stung by higher interest expense ( which could happen) its not yet happening Interest and debt expense 2022 (2,533) 2021 (2,682) 2020 (2,156)

Short term debt is defined as debt that’s due within one year — do you need me to post you a link for that definition, or can you find one yourself?

If you look back to Q2 last year, you’ll see that long term debt decreased by $5.2B…and short term debt increased by the same amount. That’s how debt gets moved around on the books as its maturity approaches. It’s also the reason why it’s best to look at total debt (long plus short) rather than just long-term debt.

Why do you do this to yourself?

Our poster need to have some basic understanding how those # are calculated!! 😁 How about an online course for beginners before further embarrassing yourself?

BA has debt due (in millions) In 2023: $5,128 2024: $5,081 2025: $4,306 2026: $7,966

So what Debt ‘repayments’ previously were higher , much higher $15 bill in 2021

Debt repayments 2022(1,310) 2021(15,371) 2020(10,998) [totalling $27 bill] Your list for next 3 years is only $14 bill, so they had shown over the last 3 years of most difficult conditions that they can repay or rollover double that

Depending on the interest and the term some will be rolled over as they have even better cash flow than before. Im no expert but longer term might be higher interest rate

@ DoU Can you give us a link for these “debt repayments” that you’re talking/fantasizing about?

Because BA’s debt amount has barely budged in the past 3 years — other than moving $5.2B from long-term to short-term debt. So, it would be very interesting to know what sources you’re using.

https://ycharts.com/companies/BA/total_long_term_debt

…”you don’t have to sign your confession with an Ad Hominem….” —- Sweep already in front of your door, before that of others…

(.. “No situation makes a person an idiot. But there are those situations that allow idiots to expose themselves…)”

…”Bit by bit, skeletons are marching out of the closet?…” —– So far it is reported that it is just a matter of paperwork and it was Boeing who notified the FAA. The safety culture was well established by D. Calhoun. Let’s hope it’s for the best, and that it’s fast…

Q1 2023 is shaping up to be another miserable quarter for BCA:

– 787: just 3 deliveries in Jan, 1 delivery in Feb, and deliveries now paused. 1/2 of these deliveries were from inventory, so they won’t have generated any earnings of note.

– MAX: 39 deliveries in Jan and 23 in Feb. About 1/3 of these deliveries were from inventory, so so they won’t have generated any earnings of note.

Total deliveries of these 2 models so far: 66. For reference: in Q4 2022, 154 deliveries still generated a $600M loss (without one-offs).

In Jan/Feb, Airbus deliveries currently stand at: – A320/A321: 57 – A220: 6 – A350: 3 – A330 neo: 2

Total deliveries so far: 68 However: AB doesn’t have $620M in interest payments to cover each quarter, and AB hasn’t sold its soul to the devil using unsustainable discounts.

No doubt, some commenters here will now tell us how “positive cash flow” will nevertheless somehow save the day for BA in the present quarter 😉

Claims without evidence are worthless. I have already refuted your point with the example of Ryanair’s refusal to acquire 737MAX-10. I had argued that the Southwest example was a special case. Please be objective and do not spread such nonsense.

Are you capable of other things?

I’m guessing that you are referring to the low revenues generated at BCA, right?

Well, tell us then – good sir, how do you account for the continual losses there?

There are usually two components which determine whether you make a profit or a loss on a sale; Revenue and Expenses.

Bryce has a legitimate claim that BA isn’t getting enough for it’s aircraft. Compare the revenue figures in 2018 (before the grounding and covid) and after, balanced against how many aircraft were delivered (including delivery mix).

The evidence he presents are the 4 years of losses at BCA. The figures are undisputable. Just because Ryanair didn’t get the price THEY wanted on their aircraft, still doesn’t prove that BCA is getting enough for it’s aircraft.

No doubt BA had to give WN significant concessions in order to mop up its excessive MAX 8 slots not taken up last year as it “de-risked” itself and dreamed up of delivering 500 MAX. Think about how much customers’ PDP BA could soak up by saying/pretending “500” delivery!!! 🤔

Airbus couldnt even match last years Jan deliveries, as this years is only 20. No shortcuts allowed to keep the 6 or so production lines going Southwest has always had big orders – and wants delivery- thats how it works. United has deferred a few of its deliveries this year so doesnt sound as though production has been ‘excessive’

The 737 is already sold out its slots for the next 3 years, so its another fantasy of yours that theres skyline ‘not taken up ‘ Do try to keep up

Haha haven’t you heard that BA has only delivered a total of 66 MAX & 787 this year while AB not only catches up but exceeds that by 2?? 😁

You shouldn’t have mixed up 2023 with 2022. You have to rewind to early 2022 and go through earnings conference calls and news reports. Thx.

@ Checklist You need to sharpen your act. In recent weeks, I posted links here for: – 65% discount at Southwest; – 69% discount for Ryanir; – 70% discount at United.

In addition, as @Frank points out, the consistent losses at BCA — despite decent delivery numbers — point indisputably to excessively low pricing. The fact that BCA drew a line for a new Ryanair order doesn’t refute the evidence that the airline’s previous order was at an unsustainable discount.

FRANK Bryce and Cheklist. Instead of focusing completely on incorrect pricing being the reason for the reduced revenue, let’s widen our perspective. Production costs are up on all lines to the point that charges for reduced production efficiency are noted and taken. Additionally, we know that BA has consumed the normal deposits from customers and diverted them to paying overhead for a couple years. I suggest that the current revenue slump is tied to this more than pricing inaccuracies. It’s probably fairly accurate to say that compared to BA, ABs revenues are also depressed but not to the extent that BAs are and their issue isn’t incorrect pricing either….. Take it from there FRANK

Is Airbus ‘liabilities’ from customer deposits and progress payments way in excess of Boeings because of the bigger order book.

From what my non expert quick scan shows ‘ current contract liabilities’ as around €23 bill . maybe they have the payments under other headings but it seems ‘tiny’ for such a big order book in comparison to the Boeings numbers. It could be a sign they are ‘cheap to order’ or worse , Airbus itself finances some airlines deposits and progress payments

You are correct on the Expenses side of things. Production costs have gone up – as noted in my response to His Royal Highness, the Duke, concerning Abnormal Production Costs.

Whether revenues are not as high as expected, requires more information than is available, but a good starting point is a comparison to revenues generated in previous years (2018 for example) allowing for delivery mixes.

Deposits have nothing to do with profitability, as you know. However, I will be replying to HRH in his post below yours.

Boeing has moved payments from customers left. ( pay early and you get another % of rebates … )

My guess is that Airbus takes smaller advance bytes and takes those late in the production process ( when there is actual outlay for the ordered frames?)

thus Boeing will have more liabilities that are longer on the books too. What about subcontractor payments ( those where moved right into the future )similar effect?

Now that you’re banging the drum on deposits, we can address this tangent you’ve gone off on.

Deposits and PDP’s are held in the liability section of the B/S until revenue recognition – the aircraft is handed over to the customer. Final payment is received and the amounts are backed out of deposits.

But to your point about the massively yuge amounts that Boeing is carrying in it’s accounts, I ask you this:

Where are the two biggest sources of funds that BA get monies from?

1) Customers – in your favorite new buzzword, Deposits

2) Lenders – sitting there a little further down in the Liabilities section.

So let’s look at what has gone on with these Accounts:

and how much does BA have in it’s accounts?

Cash and cash equivalents $14,614 Short-term and other investments 2,606

We also need to account that BA spent money on Inventory, so the we need to add in the amount in Inventory that is SELLABLE, namely (from the post above):

So all of your sudden, your Inventory is actually $78,151 – 23,096 = $55,055

They have in Deposits (as you love to point out);

Advances and progress billings $53,081 Long-term debt (including current portion) $57,535

So Boeing has taken in $110.6 billion in cashola from Customers and Lenders and has $72.275 billion to show for it.

When the actual inventory amount of $55 billion was calculated, removing the deferred production balance and tooling, you missed that this number is a company wide inventory pool. It also has monies attributable to Defense and Services in it.

Boeing does not have $55 billion in Commercial Aircraft for sale.

I’m afraid Duke, that all those monies from customers, is long gone. Poof.

Discounts for the very largest of orders are usual in business. car fleet discounts are the better known. Those sort of discounts mentioned are same as what Airbus offers to its biggest customers , who even more importantly have a steady stream of new deliveries through out the year to keep those production lines stable for the demand end. The supply end of assemblies and engines for final assembly is the problem these days. Airbus Jan deliveries for 2023 is half the jan numbers for 2022. A ramp up over even last years diminished total now seems out of the question

“Is Airbus ‘liabilities’ from customer deposits and progress payments way in excess of Boeings because of the bigger order book.”

Boeing uses program accounting while Airbus uses percentage of completion accounting, sometimes known as contract accounting.

@ DoU Got any links to support your assertion that Airbus is giving similar-sized discounts as Boeing?

I doubt it: because if it were, AB wouldn’t be making the profit margins that it currently has.

Well – here’s a cursory look at Revenues and delivery mix, from a few threads back:

So the number of the higher ticket price aircraft delivered were essentially the same (Boeing had 1 more WB delivered). AB delivered 182 more narrow bodies.

Airbus 2022 661 Deliveries ~$50.5 billion (equivalent USD) in revenues

BA 2022 480 Deliveries $25.867 billion in revenues

So essentially 182 more narrowbodies brought Airbus an extra $24.633 billion in revenues.

Boeing does include program and unit accounting in its 10K results This is for 2022 by quarter and FY at end Unit-Cost Accounting (1,245) (503) (1,144) (1,812) (4,704)

Its been provided for a decade at least maybe longer ( current 10K shows back to 2017) However outstanding liabilities to customers from firm orders has nothing to do with ‘program costs’ Once a plane is delivered and final payments made then the previous progress payments are removed from ‘progress payment liabilities ‘ item ,thats plane by plane month by month

has nothing to do with development or production costs , not that you have any clue about accounting

I really don’t know what you’re on about, Duke.

Could you please provide a page number on the most current 10Q.

I searched the exact words of @DoU and came up empty-handed. 😏

Pedro… not that I’m sticking up for him, but, could he be quoting the shareholders annual report?? Otherwise I have no idea where he drags up his stuff…..

Let’s see what Duke is talking about. Just provide us with the page number from the 10Q that you are referencing and we’ll see what it’s all about.

At last an admission you dont even look properly at the accounts, especially the notes and the further information unit accounting, deferred production costs, progress billings all there

Its been there for over a decade maybe almost 20 years

https://www.boeing.com/investors/accounting-considerations.page#

You actually came up with something extraordinary. (But unfortunately, it doesn’t give a good picture for BA….it looks worse, on which I will elaborate)

I always simply referenced the financials (10-Q, not 10-K, as you call them) and didn’t mess around the BA website.

For 2022, using program accounting – in which revenues and expenses are supposed to be reliably estimated, along with an expected profit, and divided up over an estimated number of deliveries for the program (the accounting block), BA came up with this:

So using program accounting, the loss for BCA is $2.370 billion.

However….as a comparison, had they used Unit Cost Accounting

(A unit cost is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service. Unit costs are synonymous with cost of goods sold (COGS). )

BCA would have had a loss of $4.704 billion.

So where is that extra loss, the difference between $2.370 and $4.704 billion, you ask? Well – with everything else, in the deferred production balance in Inventory…where expenses go to wait.

Meaning the can has been kicked down the road….again.

BA has a nice little breakdown, of what’s sitting in Inventory.

(Spoiler; It isn’t all aircraft ready to be sold.)

Long-term contracts in progress 582 Commercial aircraft programs 67,702 Commercial spare parts, used aircraft, general stock materials and other 9,867 Inventories 78,151

That 78,151 matches up nicely, with what we have on the b/s.

So BCA has 67.702 billion in Inventory.

But there is also a DPB sitting in there. We calculated that for Duke, a few comments ago:

The deferred production balance for all 3 program, along with the tooling (which will be sold for scrap eventually, like the 757 line, in the future) is $23.096 billion.

BCA Inventory of sellable aircraft is $44.606 billion.

Thanks for the link, Duke!

Hi. I think JPM analyst has largely written-off any more 787 delivery in 1H 2023.

Looks like we might now know a destination for the MAXs that IAG ordered:

“IAG agrees to purchase the remaining 80% of Air Europa for 400 million euros”

https://www.aviation24.be/airlines/air-europa/iag-agrees-to-purchase-the-remaining-80-of-air-europa-for-400-million-euros/

Air Europa traditionally used 737s for shorthaul work, and it still has 2 in service.

It is indeed a possibility. There was MAX-8-200 and MAX-10 in the mix

Source : https://www.flightglobal.com/airframers/iag-shareholders-agree-to-50-strong-737-max-order/150732.article

Reuters: Families appeal ruling that upheld Boeing plea deal for 737 Max crashes

Hows the Airbus/Air France criminal trial underway in Paris going ?

Wonder why its being ignored by the media feeds and you wont mention it because of your bias Luckily for Airbus no one is going to upend the plea deals they did for the bribery involved in their aircraft sales… one way to ‘move the metal’ and beat the competitors

You really are behind the curve…

The appeals court had already thrown out the prosecution dropping the case previously, so using that argument again wont work a second time.

I already knew of the prosecution favouring the defendants, lets see what the judge says after hearing the ‘other side’ Not unusual for you to love it when theres a sweetheart deal between Airbus and the prosecution and dispute the same outcome when its Boeing ( who werent even charged with a criminal offence like Airbus is)

Got a link for that alleged “sweetheart deal” between Airbus and the prosecutor?

A prosecutor doesn’t need a deal in order to drop charges…

The case was dropped a few years back by prosecutors in a deal , this was overturned by appeals court and led to current trial – when the prosecutor tried again to gaslight the victims families and their case again

Do try to keep up

Still no link, Duke? Just like another commenter’s “wing join” rant — a total fantasy. Ah well…

One issue with these things is that the crash victim relatives don’t really want justice, they want a conviction. There must be touchable cause for their grieve. ( and monetary compensation, for sure! )

bad luck longer exists in this world.

Mentour has a good take on things, here:

https://www.youtube.com/watch?v=4XFq9HjyeRc

Does BOEING need a New Type of Leader?!

(he mentions Leeham, once again)

Great piece. However, he neglected to discuss the (crippling) lack of funding for anything new.

Yes, that was a good Mentour Pilot video, even if he didn’t mention Boeing’s crippling and constraining debt. I can think of a rather tidy explanation for Mister Calhoun’s recent statements and actions, but I’m not sure yet that it’s a correct one. Thanks for the link.

DoU has some superb insights upthread, such as “Bigger is bigger than smaller”. Myself, I’m still trying to figger out how Airbus is even able to sell their forlorn, apparently uncompetitive narrowbody aircraft..

DoU is my favorite commenter here, and by quite a margin.

“perfect entertainement” only if you are in the initial pangs of Alzheimers 🙂

cost: Boeing is incurring massive out of band ( regular production wise ) cost. rework, storage and warming up after storage, paperwork is not cheap. For the 787 that is a from DayZero issue.

UWE. Even I find Duke to be an embarrassment at times. That should tell you a few things.

Interesting that AB continually provides certification updates on its new models — in this case, the link concerns cold weather testing for the A321 XLR — whereas we get no such updates from BA.

In the case of the 777X, this is somewhat understandable — after all, the plane doesn’t have a TIA, and thus doesn’t have a path to certification at present.

But, for the 737-7 and 737-10, this lack of info is fascinating…unless, of course, there simply is no progress to report.

https://simpleflying.com/airbus-cold-weather-tests-for-a321xlr/

What is fascinating indeed is that the MAX-8 and -9 have been certified by the MAX-7. The FAA sleeps?

The basic MAX line was certified on the early MAX prototypes ( a couple of MAX8 the a 9 ?)

_MCAS rework_ was recertified on the MAX7 ( afaiu and because the original set of cert objects where sold away?)

…And yet the certification of the A321-XLR has been postponed for a year (2024)… You overestimate AB too much and lower BA too much, this is not a fair judgment.

Your problem is that you are NOT objective, and I have already told you…

Checklist and Uwe. ABs delays on the tank, and the latest pause on the -7 and -10 are BOTH caused by congressional demands that derivative cert basis and major minor changes be rewritten. The new rules were released mid November and the changes to ABs and BAs production systems needs to be brought into conformity and approved by the regulators. Blaming AB for responding to changes forced on them is umfair…..

I doubt that you have any incling about the concept of “objectivity.”

.. and in context of your current reply: I gave tentative reasoning why the MCAS V2 interim solution was done on a MAX7. now riddle me your reasoning for your reply content.

A MAX-7 testbed was only used as part of the re-certification process for MCAS 2.0 — other than that, the MAX-7 has been in certification limbo for years, and wasn’t involved in the basic cert of the MAX-8/9.

The problem isn’t at the FAA — it reacted very quickly vis-a-vis AB’s design changes for the center tank in the A321 XLR.

The problem is at BA.

Bryce. The MAX8 and MAX9 were certified by commonality with their NG base aircraft. Boeing passed off all the changes by filling out the Major/Minor change forms and ONLY addressing changes. The -7and -10 were caught up in the changes mandated by congress. they attempted to get them done by dec31 and failed. The biggest issue was that BA and the FAA were also racing the deadline for the AC21,12 revision that changed the rules. Airbusses fuel tank was also caught up in the EASAs companion revisions, I listed all that in the other post.

Checklist and UWE. The FAA revisions to Certification Basis demanded by congress in the Aircraft Safety Act are found starting in AC21.12 which was released in NOVEMBER 2022. This top level document lists a large number of subordinate regulations that required changes. Among these are AC21.8, AC21.15, AC21.23. Of note are the requirements for Australia found AC21-601 and the EUROPEAN changes driven by EASA AMC and GM to Part 21 as well as EASA CS-25 AMC 1309.

Clearly nobody is sleeping as these revisions went live in November and the internal revisions at Airbus and BA in response to them are in process. Both EASA and the FAA have been the pacing items. The concurrence loop necessary with regulators signing off on the cert basis changes for the -7, -10 and 321 can’t just happen overnight, especially looking at the disruption caused by Christmas and New Year. This is a very large package of work and with a start date of Nov 2022, I wouldn’t expect a lot of movement quite yet……..

The -7 MCAS update was sold by commonality under the last revision of AC21.12, but questions remain on the impact of the new rev on that package, it may need to be resubmitted but I cant see that being an issue as it should be cleared before the -7 cert badsis is confirmed and issued.

777X TIA cant be issued by the FAA until all the cert basis changes driven by the new regs are defined, and the FAA isnt there yet. The FAAs past statements saying the 777x isnt ready for TIA were based on BOTH the aircrafts status AND tthe fact that the regulations revision status precluded it………

Of note regarding the MAX-7 and -10: As of September last year, the FAA was waiting for multiple SSAs from BA…

https://news.yahoo.com/1-faa-says-boeing-not-053754474.html

Bryce , Also of note is that all submissions were made last September.

It seems that the 787 has an ongoing lightning damage problem. The photos of this newest incident are startling.

“Lightning Strike Forcibly Separates Fuselage Of American Airlines 787”

fuselage. damage seems to extend under the top skin.

mesh reduction was done on the wings and afair slightly later (2019) than this production sample (2018).

Time for more speed tape on 787 !! Wonder how AAB feels?!

In the automotive domain foliation has turned rather popular 🙂

Bryce, thanks great pictures. I always wondered why we expect all lightning strikes to be absorbed without damage. In the real world, you set a lightning energy level that the airplane should absorb without damage AND you design things so on the rare occasion that limit is exceeded, the people stay safe. This looks to be a very very significant strike, the airplane got home and the people were safe, Looks fine to me. Make the repair and move on…… You do have to ask if the upper energy limit in the lightning protection spec needs a look, but the aircraft seems to have performed very well…….

Well, at least we now know what BA engineers are doing instead of designing aircraft and/or getting them certified 😏

“Boeing Engineers Set a New Record for Paper Plane Flight Distance”

more like “Throwing darts” ref: “Ruble’s tosses are all about brute strength”

back in the 80ties we did lecture hall runoffs that went beyond 70 seconds. real paper (sail) planes. Never bothered to do the Guinness Records book boasting thing.

Bryce, Pedro, and Uwe, are going down an unfortunately (still) falsifying path. Damage …

https://www.researchgate.net/figure/Lightning-strike-effects-Goraj-2004_fig7_332090040/amp

https://twitter.com/Aviationdailyy/status/1003985336316452864?t=Chg5lPwA3N6K_X99-SSLPQ&s=19

…”This looks to be a very very significant strike, the airplane got home and the people were safe, Looks fine to me. Make the repair and move on…… You do have to ask if the upper energy limit in the lightning protection spec needs a look, but the aircraft seems to have performed very well…”

Looks like @Checklist is confusing lightning with hail… 😉

…” Wonder how AAB feels?!…” ——- No worse than that, That’s why, wishful thinking is ineffective…

“Mentour has a good take on things, here:

https://www.youtube.com/watch?v=4XFq9HjyeRc …” 90% of what Mentour said, I’ve said before (in the sense that we obviously had a pretty similar thought) including that Boeing will wait until 2026 before making a decision.

In truth, it will be a stabilization after a few years of cash-flow on the table.

The supposedly “top secret développement”, has already been mentioned by D. Gates and other journalists. It’s just a fantasy…

What connections and sources does Mentour pilot have with the plane development industry ?? I can tell you …none While Gates is far far closer than you think , often like the LNA staff they know stuff which is still under embargo as their sources are very very close to the decision trees… both from the design and the suppliers manufacturing side Theres been various clues around for years , but often they arent specifically linked to this or that rumoured new plane

Cutting Disc Diamond “What connections and sources does Mentour pilot have with the