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Big politics will shape the next 30 years, just as Boeing’s operational execution will determine its viability as a competitive force over the same period. In our opinion, the “too big to fail” argument no longer holds water, especially in a market environment where threatening DC regulatory overreach needs tempered by sound economic and financial principles.
As we return from Farnborough and another customer trip in East Asia, it’s an opportune moment to reflect on the state of the industry, having covered 25,000 steps and air miles over the past month. Farnborough is no Le Bourget, and we certainly appreciate that—not only because of the near impeccable organization, which is often lacking south of the Channel, but also due to the unusually cooperative weather this time around.
How do we approach this year’s industry “family reunion”? The headlines are still dominated by Boeing, supply chain challenges…read more
We have often mentioned JetZero in our notes over the years, and we now believe it is appropriate to dedicate another analysis to the startup company. In this analysis, we will go deeper into the potential of the organization and its designs, assess the challenges ahead, and better situate the market potential for both military operators and commercial airlines. Full disclosure: we have visited JetZero twice and have seen its promise firsthand. As always, we will strive to remain balanced in our assessment. Simply put, this is the most exciting aircraft program since the A320 some 40 years ago.
Boeing 737 production update – what to look for a year from now.
As we have indicated in prior notes, there is a fair amount of uncertainty driving markets, forecasts, and programs at this particular juncture. Essentially, the bulk of our work and that of others focuses on further differentiating “the signal from the noise.”
In “The Signal and the Noise: Why So Many Predictions Fail — but Some Don’t,” Nate Silver provides a unique take on the art and science of prediction. Silver primarily emphasizes the importance of Bayesian reasoning, which involves updating the probability of a hypothesis as more supporting evidence becomes available. Instead of making absolute predictions, he advocates for probabilistic forecasts, which express outcomes in terms of likelihoods. This approach, which we agree with, helps in understanding the uncertainty and potential variability in predictions.
In aerospace forecasting or research in general, the core challenge in prediction is to…read more
There is an abundance of conversation about the current issues plaguing the Boeing 737 and 787, but little is being said about Boeing Defense, except that it is in an equally poor situation (notably with the KC-46 and VC-25B). This is particularly evident in lesser publications that seem to automatically denigrate Boeing at every opportunity.
Boeing’s defense slump was primarily concentrated in the late 2000s and early 2010s, with a significant reduction in output from St. Louis, despite the strong performance of Boeing Field with E-7 and P-8 sales and production.
In today’s hyper-focused discussions, an underlying question often remains unvoiced: “What is happening to our industry?” What are the root causes of the current turbulence? Which are external, driven by macro and industry-wide factors, and which stem from internal forces?
The aerospace ecosystem is undeniably complex and one of the most regulated industries globally. It is also a place where aerospace engineering miracles occur daily. The pressing questions are: How did we reach this point? How can we address the issues at hand? Most importantly, what lies ahead, and what will the future landscape look like?
While many advanced supply chain participants have embraced Industry 4.0 and are advancing towards Industry 5.0, most lower-tier suppliers are just beginning to explore these areas. Technologies like additive manufacturing, IoT, and cloud computing are becoming more widespread at all levels. This is partly driven by upper-tier requirements, but it is also largely due to a natural transition and adoption of these established standards and technologies. However, Industry 5.0 aims for new…
Ah, it seems pontificating on Boeing’s missteps has become quite the trend in this age of rampant opinionating and obligatory ratings. Suddenly, everyone from the unwashed masses to the self-proclaimed experts feels compelled to chime in on topics they’ve never even pondered before. The 2024 Boeing bashing brigade has truly become a fashionable pastime, or a badge of honor a la UA flag emoji. It’s a veritable Ephesian tumult of amateur analysis, a cacophony of (overpaid) armchair pundits flexing their expertise in fields they’ve barely dipped a toe into. This chaotic spectacle mirrors the narcissistic zeitgeist of our times, where clarity takes a backseat to confusion, and genuine insights are drowned out by Suburra’s chaos.
As we finalize an “unscheduled” post January 5 revision of our long-range forecast, we have yet to fully firm up some of the numbers due to a higher degree of uncertainty with the following elements:
The sequencing of the next-generation narrowbodies at Airbus and Boeing. We currently assume that the entry-into-service (EIS) of both OEMs will be timed closely before 2035.
Boeing’s midmarket aircraft will likely be relaunched at some point. The need is acute, and the 787 is too expensive and…
“Try not to screw up. This will satisfy a few people, and amaze everybody else.”
Forrest Gump – Greenbow, AL
Life often presents us with a mix of corporate and personal challenges. We all make mistakes occasionally, but it would appear that a particular aerospace company seem to have stumbled upon an especially unpleasant box of chocolates lately. This raises the question: are we merely handed the box of chocolates, or do our choices determine where we obtain it from, consequently shaping the quality of the chocolates inside? The same question can be posed about Boeing: is the current situation the result of three-plus decades of mismanagement of talent, resources, and product
And so it unfolds, after months of a deftly orchestrated, amplified media campaign, we arrive at an unavoidable denouement: the leadership of the Boeing company has been dealt a decapitation strike.
While we do not disagree about the rationale and the ultimate need of replacing some of the C-Suite leaders, we are questioning the timing and the execution of this decision. This event leaves us grappling with more questions than answers, indeed marking a pivotal point in our questioning of Boeing’s management approach of the past three to four decades. This even is akin to a message written in the sky in Boeing’s case, also prompting us to ponder the benefits of replacing executives with others who show no discernible degree of differentiating competences compared to those they replace. This decision is a no slam dunk case.
Ah, the joy of dissecting reality – where the media’s version collides head-on with the trivial facts on the boring old ground in Week 10 of an already troubled 2024. This week’s masterpiece (or mess, depending on your perspective) beautifully showcases the abyss between what the average Joe is being fed (and consequentially believes), what the media concocts, and what the industry pretends to care about. Hats off to the OEMs and regulators, diligently ensuring our airborne chariots meet the highest safety standards (sometime expressed by their communicators as if they’re curing world hunger). But this week, let’s give a round of applause to the “hypocritical Victorian gent” (thank you again, Tom Wolfe), who’s managed to turn unrelated events into a circus that’s no different from the standard operation of this industry over the countless eons of safety strides.
Heli Expo is no more; Long live Verticon from 2025. Despite the industry seemingly experiencing stable growth, the EVTOL sector, often compared to a kindergarten reminiscent of the accidental mass hallucination called Very Light Jets (VLJs), continues to dominate headlines. The EVTOL fallacy has led some seemingly rational industry actors to embrace exuberant projections as gospel. However, realizing these projections remains contingent on aligning infrastructure, business models, and regulatory environments. We anticipate that the EVTOL market will not achieve stability until 2040, solidifying itself as a subsegment of the vertical lift market. A subsequent growth phase is likely to strengthen between…
The discussion surrounding Boeing has grown increasingly repetitive and, let’s face it, somewhat dull. This monotony reflects the media cycle’s impact on inherently incompatible issues. The resolution of Boeing’s issues will be time-consuming, requiring a thorough search for a new strategy and a renaissance of sorts.
As we have consistently argued, the challenges facing Boeing are more intricate than the public narrative suggests. While the company’s overall commercial business segment is flourishing, it is not being captured and capitalized upon optimally for various reasons ranging from location(s), production systems, workforce, ingrained management, insular behaviors, etc.. To revitalize Boeing, a second coming, if you will, it is imperative for the company to reduce its dependence on the 737…
The PNAA conference always provides an opportunity to gauge the pulse of the Pacific Northwest Cluster. Over the years, the conference has undergone positive transformations, particularly in the last two years, embracing a more regional focus. It has shifted its goals to cater primarily to the needs of its membership, a direction that aligns with the current trend of breaking away from the homogeneity prevalent in the conference circuit. Nowadays, many conferences tend to revolve around identical topics, feature the same speakers, and delve into the customary FL300 subjects. In contrast, PNAA introduces a breath of fresh…
The first one is obviously China. The second one is slightly murkier, it is about disclosure, or lack thereof, about a specific situation. Just as in the China Syndrome, failure to disclose follows the law of unintended consequences. That rarely positive but often negative effect or as French economist Frédéric Bastiat defined as the “seen” and the “unseen.”
We are increasingly drawing parallels between the aerospace industry and the developments that occurred in the automotive industry during the 1980s and 1990s.. Do you recall the 1986 movie “Gung Ho”? The plot revolves around a struggling American automotive plant in a small rust belt town that gets acquired by a Japanese corporation. The incoming Japanese management introduces a disciplined and efficient work environment, initially causing tension and misunderstandings among the American workers. Interestingly, most of the movie was filmed not far from our home office in the Greater Pittsburgh area, in the charming town of Beaver by the Ohio River. The key point here is, as you may have guessed, our beloved national Boeing company and its vintage 1960s production system…
That feeling of getting stuck in a time loop, making the same mistakes over and over again, and not being able to drag yourself out. Sounds familiar? ‘Groundhog Day’ is a 1990s movie that tells us the story of a Pittsburgh-based weatherman, a fairly arrogant (!) and condescending (!) individual, that finds himself stuck in a time loop, reliving the same day over and over, making mistakes, and ultimately learning from those mistakes to get himself out of that loop.
If this sounds familiar and reminds you of a commercial aircraft company based in the Pacific Northwest, you might be onto something.
In light of the MAX9 incident and the subsequent production audit, along with the associated disruptions, we have reevaluated our Boeing production estimates. These estimates also incorporate input from Aero Analysis Partners.
In general, we anticipate the majority of the disruption to affect Boeing in the first half of 2024. Although we were initially optimistic about rollouts for 2024 (500+)
