Tag: Future (Page 7 of 11)

Boeing Reports Third-Quarter Results

October 28, 2020 / WIL BALDWIN

– Financial results continue to be significantly impacted by COVID-19 and the 737 MAX grounding

– Proactively managing liquidity and transforming for the future

– Revenue of $14.1 billion, GAAP loss per share of ($0.79) and core (non-GAAP)* loss per share of ($1.39)

– Operating cash flow of ($4.8) billion; cash and marketable securities of $27.1 billion

– Total backlog of $393 billion, including more than 4,300 commercial airplanes

Table 1. Summary Financial Results	Third Quarter		Nine Months
(Dollars in Millions, except per share data)	2020	2019	Change	2020	2019	Change

Revenues	$14,139	$19,980	(29)%	$42,854	$58,648	(27)%

GAAP
(Loss)/Earnings From Operations	($401)	$1,259	NM	($4,718)	$229	NM
Operating Margin	(2.8)%	6.3%	NM	(11.0)%	0.4%	NM
Net (Loss)/Earnings	($466)	$1,167	NM	($3,502)	$374	NM
(Loss)/Earnings Per Share	($0.79)	$2.05	NM	($6.10)	$0.66	NM
Operating Cash Flow	($4,819)	($2,424)	NM	($14,401)	($226)	NM
Non-GAAP*
Core Operating (Loss)/Earnings	($754)	$895	NM	($5,773)	($864)	NM
Core Operating Margin	(5.3)%	4.5%	NM	(13.5)%	(1.5)%	NM
Core (Loss)/Earnings Per Share	($1.39)	$1.45	NM	($7.88)	($1.13)	NM

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.”

The Boeing Company [NYSE: BA] reported third-quarter revenue of $14.1 billion, GAAP loss per share of ($0.79) and core loss per share (non-GAAP)* of ($1.39), reflecting lower commercial deliveries and services volume primarily due to COVID-19 (Table 1). Boeing recorded operating cash flow of ($4.8) billion.

“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” said Boeing President and Chief Executive Officer Dave Calhoun. “Our diverse portfolio, including our government services, defense and space programs, continues to provide some stability for us as we adapt and rebuild for the other side of the pandemic. We remain focused on the health and safety of our employees and their communities. I’m proud of the dedication and commitment our teams have demonstrated as they continued to deliver for our customers in this challenging environment. Despite the near-term headwinds, we remain confident in our long term future and are focused on sustaining critical investments in our business and the meaningful actions we are taking to strengthen our safety culture, improve transparency and rebuild trust.”

Following the lead of global regulators, Boeing made steady progress toward the safe return to service of the 737 MAX, including rigorous certification and validation flights conducted by the U.S. Federal Aviation Administration, Transport Canada and the European Union Aviation Safety Agency. The Joint Operational Evaluation Board, featuring civil aviation authorities from the United States, Canada, Brazil, and the European Union, also conducted its evaluations of updated crew training. The 737 MAX has now completed around 1,400 test and check flights and more than 3,000 flight hours as it progresses through the robust and comprehensive certification process.

To adapt to the market impacts of COVID-19 and position the company for the future, Boeing continued its business transformation across five key areas including its infrastructure footprint, overhead and organizational structure, portfolio and investment mix, supply chain health and operational excellence. As the company resizes its operations to align with market realities, Boeing expects to continue lowering overall staffing levels through natural attrition as well as voluntary and involuntary workforce reductions, and recorded additional severance costs in the third quarter.

Table 2. Cash Flow	Third Quarter	Nine Months
(Millions)	2020	2019	2020	2019
Operating Cash Flow	($4,819)	($2,424)	($14,401)	($226)
Less Additions to Property, Plant & Equipment	($262)	($465)	($1,038)	($1,387)
Free Cash Flow*	($5,081)	($2,889)	($15,439)	($1,613)

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.”

Operating cash flow was ($4.8) billion in the quarter, reflecting lower commercial deliveries and services volume primarily due to COVID-19, as well as timing of receipts and expenditures (Table 2).

Table 3. Cash, Marketable Securities and Debt Balances	Quarter-End
(Billions)	Q3 20	Q2 20
Cash	$10.6	$20.0
Marketable Securities¹	$16.5	$12.4
Total	$27.1	$32.4
Debt Balances:
The Boeing Company, net of intercompany loans to BCC	$59.1	$59.5
Boeing Capital, including intercompany loans	$1.9	$1.9
Total Consolidated Debt	$61.0	$61.4

¹ Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities decreased to $27.1 billion, compared to $32.4 billion at the beginning of the quarter, primarily driven by operating cash outflows (Table 3). Debt was $61.0 billion, down from $61.4 billion at the beginning of the quarter due to the repayment of maturing debt.

Total company backlog at quarter-end was $393 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes	Third Quarter		Nine Months
(Dollars in Millions)	2020	2019	Change	2020	2019	Change

Commercial Airplanes Deliveries	28	62	(55)%	98	301	(67)%

Revenues	$3,596	$8,249	(56)%	$11,434	$24,793	(54)%
Loss from Operations	($1,369)	($40)	NM	($6,199)	($3,813)	NM
Operating Margin	(38.1)%	(0.5)%	NM	(54.2)%	(15.4)%	NM

Commercial Airplanes third-quarter revenue decreased to $3.6 billion, reflecting lower delivery volume primarily due to COVID-19 impacts as well as 787 quality issues and associated rework. Third-quarter operating margin decreased to (38.1) percent, primarily driven by lower delivery volume, as well as $590 million of abnormal production costs related to the 737 program.

Commercial Airplanes added the final 777X flight test airplane to the test program and the GE9X engine received FAA certification. In October, the company decided it will consolidate 787 production in South Carolina in mid-2021, which did not have a significant financial impact on the program in the third quarter. Commercial Airplanes delivered 28 airplanes during the quarter, and backlog included over 4,300 airplanes valued at $313 billion.

Defense, Space & Security

Table 5. Defense, Space & Security	Third Quarter		Nine Months
(Dollars in Millions)	2020	2019	Change	2020	2019	Change

Revenues	$6,848	$7,002	(2)%	$19,478	$20,168	(3)%
Earnings from Operations	$628	$754	(17)%	$1,037	$2,581	(60)%
Operating Margin	9.2%	10.8%	(1.6) Pts	5.3%	12.8%	(7.5) Pts

Defense, Space & Security third-quarter revenue decreased to $6.8 billion, primarily due to derivative aircraft award timing, partially offset by higher fighter volume (Table 5). Third-quarter operating margin decreased to 9.2 percent reflecting less favorable performance, including a $67 million KC-46A Tanker charge.

During the quarter, Defense, Space & Security received an award for eight F-15EX advanced fighter aircraft for the U.S. Air Force and a contract extension for the International Space Station for NASA, as well as contracts for nine additional MH-47G Block II Chinook helicopters for the U.S. Army Special Operations and four additional 702X satellites. Also in the quarter, the U.S. Air Force and Boeing team was awarded the Collier Trophy for aerospace excellence for the X-37B autonomous spaceplane. Significant milestones included inducting the 20^th U.S. Navy F/A-18 into the Service Life Modification program as well as delivering the firstBell Boeing V-22 Osprey to Japan and the first MH-47G Block II Chinook to the U.S. Army Special Operations.

Backlog at Defense, Space & Security was $62 billion, of which 30 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global Services	Third Quarter		Nine Months
(Dollars in Millions)	2020	2019	Change	2020	2019	Change

Revenues	$3,694	$4,658	(21)%	$11,810	$13,820	(15)%
Earnings from Operations	$271	$673	(60)%	$307	$2,013	(85%)
Operating Margin	7.3%	14.4%	(7.1) Pts	2.6%	14.6%	(12.0) Pts

Global Services third-quarter revenue decreased to $3.7 billion, driven by lower commercial services volume due to COVID-19, partially offset by higher government services volume (Table 6). Third-quarter operating margin decreased to 7.3 percent primarily due to lower commercial services volume and additional severance costs.

During the quarter, Global Services signed an agreement with GECAS for 11 737-800 Boeing Converted Freighters, secured a six-year P-8A support contract for the Royal Australian Air Force, and was awarded F-15EX training and services support contracts by the U.S. Air Force. Global Services also delivered the first P-8A Operational Flight Trainer for the United Kingdom Royal Air Force.

Additional Financial Information

Table 7. Additional Financial Information	Third Quarter	Nine Months
(Dollars in Millions)	2020	2019	2020	2019
Revenues
Boeing Capital	$71	$66	$205	$207
Unallocated items, eliminations and other	($70)	$5	($73)	($340)
Earnings from Operations
Boeing Capital	$30	$29	$47	$86
FAS/CAS service cost adjustment	$353	$364	$1,055	$1,093
Other unallocated items and eliminations	($314)	($521)	($965)	($1,731)
Other income, net	$119	$121	$325	$334
Interest and debt expense	($643)	($203)	($1,458)	($480)
Effective tax rate	49.6%	0.8%	40.1%	(350.6)%

At quarter-end, Boeing Capital’s net portfolio balance was $2.0 billion. The change in revenue and earnings from other unallocated items and eliminations was primarily due to the timing of cost allocations. Earnings from other unallocated items and eliminations was also impacted by lower enterprise research and development expense. Interest and debt expense increased due to higher debt balances. The third quarter effective tax rate reflects tax benefits related to the five year net operating loss carryback provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act as well as the impact of pre-tax losses.

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on pages 12-13.

Free Cash Flow

Free cash flow is GAAP operating cash flow reduced by capital expenditures for property, plant and equipment. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation of free cash flow to GAAP operating cash flow.

Caution Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) the COVID-19 pandemic and related government actions, including with respect to our operations, our liquidity, the health of our customers and suppliers, and future demand for our products and services; (2) the 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, lower than planned production rates and/or delivery rates, and increased considerations to customers and suppliers, (3) general conditions in the economy and our industry, including those due to regulatory changes; (4) our reliance on our commercial airline customers; (5) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (6) changing budget and appropriation levels and acquisition priorities of the U.S. government; (7) our dependence on U.S. government contracts; (8) our reliance on fixed-price contracts; (9) our reliance on cost-type contracts; (10) uncertainties concerning contracts that include in-orbit incentive payments; (11) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (12) changes in accounting estimates; (13) changes in the competitive landscape in our markets; (14) our non-U.S. operations, including sales to non-U.S. customers; (15) threats to the security of our or our customers’ information; (16) potential adverse developments in new or pending litigation and/or government investigations; (17) customer and aircraft concentration in our customer financing portfolio; (18) changes in our ability to obtain debt financing on commercially reasonable terms and at competitive rates; (19) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (20) the adequacy of our insurance coverage to cover significant risk exposures; (21) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (22) work stoppages or other labor disruptions; (23) substantial pension and other postretirement benefit obligations; and (24) potential environmental liabilities.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Boeing, U.S. Navy to Demo Future Ramjet Missile Technology

October 20, 2020 / WIL BALDWIN

– The demonstrator will help the Navy determine technical requirements for future carrier-based weapons systems

Boeing [NYSE: BA] and the U.S. Navy will demonstrate advanced missile technologies that will make carrier air wing strike fighters more lethal against threats into the next decade.

Boeing has been awarded a $30 million contract from the Navy to co-develop the Supersonic Propulsion Enabled Advanced Ramjet (SPEAR) flight demonstrator with the Navy’s Air Warfare Center Weapons Division. The contract award comes after the Department of Defense requested information from the defense industry to help the Navy determine technical requirements of future carrier-based land and sea strike weapons systems.

“The SPEAR flight demonstrator will provide the F/A-18 Super Hornet and carrier strike group with significant improvements in range and survivability against advanced threat defensive systems,” said Steve Mercer, Boeing’s SPEAR program manager. “We have a talented team of engineers to meet the challenging technical demands and schedule timeline that the SPEAR program requires. We look forward to working with Navy experts to advance technologies for the Navy’s future capabilities.”

Boeing and the Navy Air Warfare Center Weapons Division plan to fly the SPEAR demonstrator in late 2022. Prior successes by Boeing in developing supersonic and hypersonic technologies include the X-51 Waverider test vehicle in 2010 and the Variable Flow Ducted Rocket propulsion system under the Triple Target Terminator program in 2014.

Boeing is the world’s largest aerospace company and leading provider of commercial airplanes, defense, space and security systems, and global services. As a top U.S. exporter, the company supports commercial and government customers in more than 150 countries. Building on a legacy of aerospace leadership, Boeing continues to lead in technology and innovation, deliver for its customers and invest in its people and future growth.

EmbraerX to Spin-Off Eve, Launch the Future of Urban Air Mobility

October 16, 2020 / WIL BALDWIN

Eve Urban Air Mobility Solutions, Inc. (Eve) has been launched as a new, independent company dedicated to accelerating the Urban Air Mobility (UAM) ecosystem. Eve is developing a full portfolio of solutions to enable the UAM market and ultimately benefit people’s lives, including the progression and certification of the company’s electric vertical takeoff and landing vehicle (eVTOL), the associated comprehensive services and support network, and the creation of urban air traffic management solutions. André Stein, former head of strategy for EmbraerX, has been appointed CEO of Eve.

Eve will benefit from greater focus, speed, and agility, allowing the company to innovate and execute at an accelerated pace in order to fully capitalize on the global UAM opportunity. Having been incubated for almost four years within EmbraerX, now is the right time to establish Eve as an independent company.

“We value the vast potential of the UAM market, as it represents a new business segment in which we foresee significant opportunities for Embraer. Innovation and diversification are key pillars of Embraer’s new strategic plan, which will increase revenue and improve profitability over the next few years,” said Francisco Gomes Neto, President and CEO of Embraer. “That is why I am eager to announce Eve, the first company to graduate from EmbraerX. Eve stands primed to create a new frontier in transportation with intelligent, environmentally friendly, autonomous-ready aircraft and the associated ubiquitous support and urban air traffic management solutions.”

As part of the company’s initiative to accelerate the UAM revolution, EmbraerX has been part of the Uber Elevate Network since its inception in 2017.

“Eve’s launch is an important next step in commercializing Embraer’s eVTOL designs while building on Embraer’s ability to design, certify, and deliver safe, globally-accepted aircraft. We look forward to our continued partnership to make aerial ridesharing a reality,” said Eric Allison, Head of Uber Elevate.

Benefitting from a startup mindset, backed by Embraer’s more than 50-year history of aerospace expertise, Eve today unveils a unique and valuable market proposition. Eve’s human-centered eVTOL design represents an actual, certifiable product development, as evidenced by the first flight of the engineering simulator in July 2020, and the company is harnessing the expertise of both Embraer and Atech, a subsidiary of the Embraer Group, in providing globally-recognized air traffic management software to create the solutions that will help safely scale the UAM industry going forward.

Boeing Partners with General Atomics & Aerojet Rocketdyne in Homeland Missile Defense Bid

September 27, 2020 / WIL BALDWIN

Boeing [NYSE: BA] is teaming with General Atomics Electromagnetic Systems and Aerojet Rocketdyne [NYSE: AJRD] in its bid to build the Next Generation Interceptor (NGI) for the U.S. Missile Defense Agency (MDA). The NGI is a key element of the MDA’s missile defense system, which is designed to intercept and destroy incoming intercontinental ballistic missiles.

“The Boeing-led team will deliver critical technology to enhance our homeland missile defense,” said Norm Tew, Boeing Missile and Weapon Systems vice president and general manager, and Huntsville site senior executive. “Combined, we bring decades of expertise in proven missile and weapon systems.”

On Aug. 12, the Boeing-General Atomics-Aerojet Rocketdyne team submitted an NGI offering that will improve performance and enhance the nation’s ability to defend against future threats.

GA-EMS has a long history of delivering missile technology and complex systems for critical national defense programs. “This partnership combines our legacies in innovation, bringing together new ideas to create an affordable and reliable solution to defend against emerging threats,” said Scott Forney, president of GA-EMS.

Aerojet Rocketdyne’s propulsion systems have powered the nation’s missile defense for decades. “As the country’s premier hit-to-kill propulsion provider, we’re able to deliver low-cost, high-performance systems by leveraging our skilled workforce and strategic investments in innovative technology and materials,” said Eileen Drake, Aerojet Rocketdyne CEO and president.

Northrop Grumman will serve as a component supplier on the Boeing-led team.

A contract award is expected later this year.

Leonardo Joins Adelaide’s Lot Fourteen Space Precinct

September 17, 2020 / WIL BALDWIN

– Partners with SmartSat CRC

Leonardo commits to the South Australian space ecosystem establishing a foothold for its space service business – through its subsidiary e-GEOS – in partnership with SmartSat CRC. e-GEOS is a joint venture between Telespazio – Leonardo’s subsidiary – and the Italian Space Agency.

The news was warmly welcomed by the local community and by the Premier of South Australia Hon. Steven Marshall who recently welcomed Leonardo at Lot Fourteen. “South Australia is the defence and space capital of the Country and it’s fantastic to see another incredible international company choosing South Australia to do business” he commented. “The strong interest being shown by major national and international players is a coup for South Australia and is further evidence that Lot Fourteen is a magnet for business and jobs. The addition of Leonardo to Lot Fourteen cements my governments strong commitment to create a once in a generation hub that will generate thousands of jobs for South Australians now and into the future.” Hon. Marshall stated.

As a dominant worldwide supplier in the space sector, Leonardo aims to collaborate with the Australian space industry to stimulate local growth and competitiveness in global markets.

In 2019, Leonardo Australia through the involvement of e-GEOS (a joint venture between Telespazio – Leonardo’s subsidiary – and the Italian Space Agency), became a supporting partner of Adelaide-based space Cooperative Research Centre SmartSat CRC. Leonardo Australia’s partnership with SmartSat is a key driver in the company’s strategy to grow its presence in the space industry within the Oceania region and to develop joint research and commercialisation opportunities. As prominent provider of the European Copernicus program, e-GEOS supports rapid security and disaster response operations all over the world, including providing Australian fire authorities rapid mapping during recent bushfires.

Leonardo Australia is the regional subsidiary of Leonardo, a global top ten high technology Defence and Space company with annual revenues of 23 bn AU$.

Mr George Coulloupas of Leonardo Australia (Business Development Manager – Space) is leading Leonardo Australia’s Space Line of Business based at Lot Fourteen. George has extensive Australian-based experience in start-up innovation, space-derived service commercialisation and primary.

Defence Ministers of Germany and France visit Airbus in Manching

September 17, 2020 / WIL BALDWIN

During a visit of the Airbus premises in Manching, Europe’s largest military aviation development centre, the Defence Ministers of Germany and France, Annegret Kramp-Karrenbauer and Florence Parly, expressed their nations’ support for key European defence programmes.

Ministers Kramp-Karrenbauer and Parly met with senior company executives led by Airbus Chief Executive Officer (CEO) Guillaume Faury, Airbus Defence and Space CEO Dirk Hoke as well as local policy-makers.

The event marked the first-ever joint visit of a German and French Defence Minister on site, which is home to some 5,600 Airbus employees from 43 nationalities and some 1,000 service-members from the German armed forces.

Both Ministers stressed the importance of fostering key European defence programmes such as the development of an European drone, the so called Euro MALE RPAS unmanned aerial vehicle, and the Future Combat Air System (FCAS).

An European industry consortium under the lead of Airbus, with its partners Dassault Aviation and Leonardo, aims at developing a European drone for France, Germany, Italy and Spain, also often publicly referred to as the “EuroDrone”. This new system is designed to bring unique operational capability to Europe in the field of unmanned aerial surveillance.

The FCAS programme, brought to life by the governments of France and Germany in 2017, will provide the next level of airpower by creating a System of Systems of manned and unmanned platforms with full operational capability planned for 2040. Spain has meanwhile joined the programme, making FCAS a true European endeavour.

On the industrial side, Dassault Aviation and Airbus are leading the FCAS activities together with other key partners. Despite constraints due the COVID19 pandemic, the Joint Concept Study, launched in 2019, and the Demonstrator Phase 1A, launched this year, remain on track.

“The visit of the French and German Defence Ministers to Manching is a clear signal of the importance of a strong and capable defence industry for Europe”, said Guillaume Faury, CEO of Airbus. “Manching is the centre of competence and national champion for all German fixed-wing military platforms and thus of strategic importance for our local customer. Here, we are also shaping the future of military aviation with multinational programmes such as the EuroDrone and FCAS and we are very grateful that we could showcase this today to decision-makers.”

Besides ongoing programmes, the Ministers also received a glimpse of the high-end technical engineering capabilities of Airbus by visiting into the future of flight with the Low Observable UAV Testbed (LOUT), a research project funded by the German Ministry of Defence that had first been publicly revealed in the fall of 2019. Low observability will be one of the key factors in the development of the Future Combat Air System.

Policymakers also praised the high-level visit to one of Bavaria’s top industry sites:

“Manching is a prime example of what Europe can achieve in defence if we join forces. Not only are we proud of the international spirit we see here in Bavaria coming from companies like Airbus where Germans, French, Spanish, British and other nationalities are working hand in hand. Manching is also an example for unique and critically important cooperation models with the Bundeswehr”, said Reinhard Brandl, member of the CSU in the Bundestag’s budget committee. “The future of European defence and the future of high-tech industry sites such as Manching hinges on programmes such as FCAS and the EuroDrone. Therefore, we have to ensure they are endorsed and brought forward in a joint and balanced manner.”

Air France-KLM’s Future in Doubt Without Cost Cuts – Dutch minister

September 13, 2020 / WIL BALDWIN

AMSTERDAM (Reuters) – Air France-KLM <AF.PA> might not survive its current crisis if the airline group cannot lower its costs, Dutch Finance minister Wopke Hoekstra said on Sunday.

“The survival of Air France-KLM is not a given,” Hoekstra said in an interview on Dutch public television.

“They will have to address their cost base even as things stand now. And suppose this situation lasts until the end of next year, then they will have to cut even deeper.”

Air France-KLM’s immediate future was secured by the French and Dutch governments in July, as they provided a total of 10.4 billion euros ($12.3 billion) in bailout loans and guarantees to help the group survive the disastrous effects of the COVID-19 pandemic on air travel.

In return for the support, Dutch arm KLM has said it would cut another 1,500 jobs, reducing its staff by 20%, while a pay hike agreed for 2020 was frozen by the company.

French arm Air France plans to cut 6,500 jobs, or 16% of its workforce, through 2022.

So far, however, KLM has failed to reach an agreement with unions on the cuts needed to meet the requirements set by the Dutch government.

Hoekstra indicated a thorough restructuring would be necessary for governments to contemplate further support.

“KLM will always be very important for the Dutch economy. But the question is whether that will be enough”, he said.

Air France-KLM said last month that it was losing 10 million euros per day due to the coronavirus crisis.

(Reporting by Bart Meijer; Editing by Susan Fenton)

Boeing Delivers SOCOM’s First Next-Gen Chinook Helicopter

September 1, 2020 / WIL BALDWIN

Boeing [NYSE: BA] is delivering new technologies and performance improvements to U.S. Special Operations Command (SOCOM) with the Block II Chinook helicopter. Boeing’s Philadelphia team recently delivered the first MH-47G Block II Chinook to SOCOM on time.

“This delivery marks a major step for the Chinook program,” said Andy Builta, vice president and H-47 program manager. “The new Chinook will give U.S. Special Operations Forces significantly more capability for extremely challenging missions and will enable them to conduct those missions on the future battlefield.”

The company is on contract for 23 more MH-47G Block II Chinooks, having signed a contract with SOCOM in July.

Boeing has more than 4,600 employees in Pennsylvania supporting Chinook, the V-22 Osprey, MH-139A Grey Wolf and a number of services and engineering efforts. Including suppliers and vendors, Boeing’s activities support an estimated 16,000 jobs in Pennsylvania.

Enter Air to Purchase Up to Four Boeing 737-8 Jets

August 19, 2020 / WIL BALDWIN

– New order expands Polish carrier’s commitment to the 737 family

– Enter Air: “Convinced 737 MAX will be the best aircraft…for many years to come”

Boeing [NYSE: BA] and Enter Air today announced the Polish airline is expanding its commitment to the 737 family with a new order for two 737-8 airplanes plus options for two more jets.

An all-Boeing operator and Poland’s biggest charter carrier, Enter Air began operations in 2010 with a single 737 airplane. Today, the airline’s fleet includes 22 Next-Generation 737s and two 737 MAX airplanes. When the new purchase agreement is fully exercised, Enter Air’s 737 MAX fleet will rise to 10 aircraft.

“Despite the current crisis, it is important to think about the future. To that end, we have agreed to order additional 737-8 aircraft. Following the rigorous checks that the 737 MAX is undergoing, I am convinced it will be the best aircraft in the world for many years to come,” said Grzegorz Polaniecki, general director and board member, Enter Air.

Enter Air and Boeing have also finalized a settlement to address the commercial impacts stemming from the grounding of the 737 MAX fleet. While the details of the agreement are confidential, the compensation will be provided in a number of forms and staggered over a period of time.

“In the settlement with Boeing, we agreed to revise the delivery schedule for the previously-ordered airplanes in response to current market conditions. The specific terms of the settlement are strictly confidential, but we are pleased with the way Boeing has treated us as its customer,” added Polaniecki.

“We are humbled by Enter Air’s commitment to the Boeing 737 family. Their order for additional 737-8s underscores their confidence in the airplane and the men and women of Boeing,” said Ihssane Mounir, senior vice president of Commercial Sales and Marketing, The Boeing Company. “We look forward to building on our decade-long partnership with Enter Air and working with the airline to safely return their full 737 fleet to commercial service.”

Enter Air 737 MAX 8 (7210) C1 Flight – November 28, 2018

Cathay Pacific Posts Record $1.27 Billion First Half Loss

August 12, 2020 / WIL BALDWIN

Cathay Pacific aircraft are seen parked on the tarmac at the airport, following the outbreak of the new coronavirus, in Hong Kong

SYDNEY (Reuters) – Hong Kong’s Cathay Pacific Airways Ltd reported a record HK$9.87 billion ($1.27 billion) first-half loss and said it did not expect a meaningful recovery in passenger demand for some time due to the coronavirus pandemic.

The figure was in line with the HK$9.9 billion forecast it had flagged last month and included HK$2.47 billion of impairment charges.

Revenue plunged 48.3% to HK$27.7 billion in the six months ended June 30 as it slashed passenger flying to a barebones schedule due to lower demand and border restrictions, though it added more cargo-only flights as freight yields rose 44.1%.

The airline, which received a $5 billion rescue package led by the Hong Kong government, has so far refrained from large-scale job cuts but has warned it is reviewing all aspects of its business model with an update expected by the fourth quarter.

“Inevitably this will involve rationalisation of future planned capacity compared to pre-crisis plans, taking into account the market outlook and cost structure at that time,” Chairman Patrick Healy said in a statement on Wednesday.

It has rearranged its aircraft order book with Airbus SE to delay deliveries, is in advanced talks with Boeing Co to do the same and has begun sending one-third of its fleet outside Hong Kong for storage in less humid conditions.

The airline said last month that it had reduced its monthly cash burn to about HK$1.5 billion from between HK$2.5 billion and HK$3 billion while maintaining a minimal flying schedule.

Cathay is expected to report a full-year loss of around HK$13.6 billion, according to the average of 13 analysts polled by Refinitiv before it released its half-year results.

The airline’s shares had surged 9.3% on Wednesday ahead of the earnings announcement, which was made while trading was suspended for the market’s lunch break.

“It is laggard buying on some traditional economy stocks,” Steven Leung, a sales director at UOB Kay Hian, said of the rise.

($1 = 7.7506 Hong Kong dollars)

(Reporting by Jamie Freed; additional reporting by Donny Kwok in Hong Kong; Editing by Himani Sarkar)

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