AIR COGITATIO

As Boeing is likely preparing to migrate the 787 program final assembly to South Carolina, questions are emerging about the evolution and the future of the production capacity of the company in its native Puget Sound area. Yet again, we are facing the exact same sempiternal debate about Boeing, and its supposed inevitable departure from WA state, or are we?

What is the current contraction of production in Everett telling us about Boeing’s near to medium term programmatic plans, and is Everett role likely to change, rather than disappear…

It is unquestionable that the commercial aerospace industry is facing a near term existential crisis. While the situation at aircraft OEMs is daunting, Boeing is faced with challenges that currently gives Chicago absolutely zero margin for error. In the event of another delay or setback(s) for the airline industry, we believe that Boeing will be faced with few options but to contemplate Chapter 11.

And the topic goes on… We have amply covered the MAX crisis over the past 24 months but perhaps need now to recalibrate our position as the market environment will profoundly alter competitive dynamics in the next 3-5 years.

The events of the past 24 months have indeed pushed the 737 MAX into a downward spiral. Two accidents, resulting civil and criminal lawsuits, and a regular stream of technical flaws, mismanagement…

“Thus are the dangers of target fixation—focusing so intently on the goal of one’s desire that bad choices inevitably follow. … More often, it ends in lost opportunities, wasted time, and goals never achieved.”

For those who have been reading our notes over the past four years, you may remember our initial hesitations concerning the Embraer-Boeing deal in the summer of 2018.

The COVID-19 White Swan is a cataclysmic disruptor for the global economy and our societies. The human impact will be catastrophic, and it will likely take years to precisely understand the root cause of the disease, its epidemiology and the changes needed to more effectively tackle the next event for mankind.

Devin Lidell, Principal Futurist at TEAGUE said it best in a recent insight that we highly recommend: “so the days of system shock followed by collective amnesia will need to end . The realities of a post-COVID-19 world will pose new challenges to cities and transportation systems in particular”

So, three months into this crisis, what are some of the preliminary lessons learned?

1) We saw it coming but we completely failed to estimate the velocity of the societal and financial freefall.

While January confirmed the possibility of COVID-19 eventually making landfall outside of China, our perspective and framing of a potential response to the epidemic (at the time) was entirely based on still incomplete information

There has been a significant  number of incoherent messages coming out on the NMA topic, and the apparent lack of product strategy from the Boeing company.  We have not been shying away from expressing our criticism at this perceived lack of strategic decision making and at the inconsistent messaging from the new Boeing CEO, Dave Calhoun.  NMA is a topic of particular importance.  We have stated this ad nauseam…

…to know if Boeing’s transformation will have failed or succeeded. Boeing’s CEO Dave Calhoun has offered little visibility during his first earnings call today.

As it often is the case with such events,  it is what was not discussed that really provides the…

Hexcel and Woodward have decided to combine their activities, forming a company with revenues of $5.3B in 2019. The all stock merger sees Woodward shareholders taking 55% of the company, which will be renamed Woodward Hexcel. This perhaps marks the beginning of a “different” wave of mergers involving

The tragic reality of the fate of flight 752 has now settled and we are left essentially with two basic questions, why and what to do to prevent such events from taking place in the future.

At this juncture even our most optimistic analysis suggests a crisis that will likely extend to Q1 2021 with lingering implications for airline operations, the competitive environment and the supply chain.

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The Future Combat Air System (FCAS) is experiencing some turbulences – as one might expect. On one side, France, represented by Dassault, SAFRAN and Thales, the key partners in the Mirage and Rafale families and on the other side Germany, mostly represented by Airbus and MTU. Since its unveiling at the Paris Airshow, FCAS has been delayed by the politics of European Defense, and the latest move by Spain, with the selection of Indra as the lead for the Spanish industry is perhaps not desirable for the program at this early juncture.