AIR COGITATIO

Cogitatio 84 – Week 43 in Review

Major quarterly results all this week – we won’t cover what the banks do exceedingly well and what we excel at even more profoundly here and here. We will stick to more industry focused topics.

Southwest Airlines (SWA) announced that it has ordered an additional 108 737 MAX aircraft. The airline unsurprisingly opted for the smaller -7 variant, which is intended for its single class short-haul network.

By Michel Merluzeau, ago

Cogitatio 83 – Boeing Q3 Results Reflections

Today’s Boeing Q3 conference provided the following interesting tidbits that retained our team’s attention:

737 MAX Production Issues and Recovery

The initial plan was to reach a production rate of 38 aircraft per month by August. However, this goal was not met due to the APB and other issues.  Boeing’s leadership emphasizes that the company must listen to constraints, particularly in the context…

By Michel Merluzeau, ago

Cogitatio 81 – Review of Boeing’s Q2 Results

We discuss Boeing’s positive results for Q2 2023 with AIR’s partner Jean-Pierre Picchiottino of Aero Analysis Partners. Overall, we are very encouraged by both the financial results and the delivery outlook for 2023. That said, there are some unknowns that should get to resolution by end of the year and/or the first half of 2024. We did not discuss the Space and Defense segments for this quarter. It is safe to say that F-18 is on the way out following the Indian Air Force decision to proceed with Dassault Rafale for its Navy, while T-7 is crawling towards IOC by 2027. The BDS portfolio is strong but is a financial drain at this juncture.

By Michel Merluzeau, ago

Cogitatio 79 – A program we like: Explorer Aircraft, refreshingly grounded in market reality.

“Start by doing what’s necessary; then do what’s possible; and suddenly you are doing the impossible.”
Saint Francis of Assisi

We are intrigued. As market analysts we always appreciate efforts that we deem logical and driven by solid market fundamentals and demand-based facts.
Two programs are increasingly getting some traction in our opinion. Their dynamics are however completely different in terms of market stages, segments and overall feasibility. We will address Explorer Aircraft in this note, while the other program, JetZero will be analyzed in a later note (and it’s a tough case!).

By Michel Merluzeau, ago

Cogitatio 76: PNAA 2023 and the End of the Time of Complacency

“There are decades where nothing happens; and there are weeks where decades happen.”
Vladimir Ilyich Ulyanov (Lenin)

We attended the annual PNAA conference last week near Seattle. This pillar event was especially notable again for the expressed and persisting levels of concern via-a-vis the health of the lower tiers of the aerospace supply chain. Two issues were particularly dominating the proceedings:
Number one: The financial health of suppliers,  particularly the 3s and 4s.
Number two: The lingering labor constraints that continue to affect the productive capital of many suppliers, with the potential ripple effect that one can expect from such workforce disruptions.

By Michel Merluzeau, ago

Cogitatio 66 – The Russian Aerospace Industry and Western Suppliers After the Ukraine Operation

Russia’s goals are not only military – the main secondary goal is to further reshape and redirect the past three decades of politics and trade with the West

The Russian commercial aerospace industry global access is already limited and exports will be impacted minimally as it restructures and strengthens relations with partner nations

Russia can redirect its efforts towards China. The maturation of these efforts will be effected well after the Ukrainian crisis is over and sanctions likely have evolved or are altogether suspended

By Michel Merluzeau, ago
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