AIR ANALYST NOTES

AIR127 – Boeing’s Next Moves Should Be Essentially Driven By Narrowbody Production Capacity

REALITY DENIAL: A subconscious defense mechanism characterized by refusal to acknowledge (or rationalization of) unwanted or unpleasant facts, realities, thoughts, or feelings. 

2022 has been shaping up to be an erratic year for the markets and for the Boeing company in particular.  Under our initial scenario, we had been assuming that Boeing  would eventually go back to optimal rates of 21 aircraft (or about) per month for each of the Renton FAL lines by 2025. The maximum achievable production rate would be circa 63 aircraft per month, representing about 756 aircraft a year. This number is indeed actually slightly higher potentially depending on the staffing/supply chain output capabilities.

By Michel Merluzeau, ago

AIR126 – Airbus Q1 Results Validate Strengths of Commercial Operations but Also Highlight Persisting Weakness of Defense Activities

More results for Q1 2022. This time we cross the ocean to hear about the situation at Airbus Group. Let us start with some good numbers for the group as a whole. These are very solid numbers, particularly operating margins. The backlog remains strong with slots available for “prime” customers if needed. The projected 3-6 months delay for the

By Michel Merluzeau, ago

AIR125 – Boeing’s Q1 Results Highlight Persisting Vulnerabilities

The Q1 2022 result of the Boeing are nothing short of concerning.  The chronic, poor execution with commercial and defense programs has fundamentally company resources issues at its very core.

No matter what the leadership was trying to explain during last week’s call using rationalities ranging from the pandemic, inflation and regulators,  this crisis is increasingly looking like it is essentially self-inflicted.

By Michel Merluzeau, ago

AIR120 – “And Now for Something Completely Different” (2022 Outlook Part 1: Commercial Markets)

As 2021 draws to a close,  it is now customary for our team to review events that have affected our industries in the past twelve months and provide you with our expectations for the coming calendar year.   While our ability to measure accurately the impact of the pandemic has somewhat limited our near-term analysis  (yes,  the pandemic has made near-term predictions more of a challenge than long-term’s),  we believe that the near-term outlook is entering a new phase, with different and perhaps elevated levels of threats and risks.  We have borrowed the title of this note from the Monty Pythons to illustrate our point; what may come to this industry and the economy might be indeed completely (and unpleasantly) different in 2022.

By Michel Merluzeau, ago

AIR119 – Boeing has a 767 problem

As Boeing progressively emerges from the MAX disaster and rebuilds its product strategy,  our attention has recently been focusing on the post 767 era.  We characterize the 767 as an anchor aircraft – a system that serves many purposes and is an essential component to Boeing’s commercial and defense market shares.  However,  the expiry date is coming up and Seattle needs to take a decision about the

By Michel Merluzeau, ago

The Traveling Analyst 1 – Business is booming

We attended the NBAA convention in windy Las Vegas over the past couple of days and are returning to the office with stronger than expected sentiments of uncertainty.

While the mood of the industry is striking a definite positive tone,  we are equally cautious about the deteriorating state of a supply chain that remains deeply woven in other segments of the aerospace and defense industries. However,  the demand outlook  for business aircraft in the near to medium term remains strong and is primarily driven by social and economical circumstances.  This is not a demand cycle associated with

By Michel Merluzeau, ago

AIR117 – The US Air Force Bridge Tanker RFI and our (very) preliminary interpretations

The document issued by USAF on 19 July 2021 is an important start for the full recapitalization of the entire legacy Eisenhower tanker fleet. Since the controversial awards of the KC-X program to (initially) Northrop Grumman in 2009 and subsequently to Boeing Defense & Space in 2011, only 179 of the 479 tankers in service are scheduled to be replaced by the end of the decade.  By 2029, the targeted delivery date of the second replacement tranche, existing KC-135s will be seven decades old while KC-10s will be bordering on five decades of service on average.  This state of affairs is an operational weakness for the services, particularly in the event that incidents and potentially wider conflicts erupt in the western Pacific theatre.

By Michel Merluzeau, ago

Cogitatio 59: Just One Chart

We take a look at potential new programs from 2021 to 2040.   We have only included programs that have either been announced or are driven by realistic market and technology considerations.  The absence of new programs from 2031+ is a reflection of the above.  We of course expect programs to develop during that decade.  Commercial, business and selected defense programs are included.

By Michel Merluzeau, ago
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