DUBAI, United Arab Emirates, Nov. 9, 2021, PRNewswire – The new Boeing [NYSE: BA] 777X arrived at Dubai World Central at 14:02 p.m. (GST) today, ahead of the upcoming Dubai Airshow. The airplane will be on static display and featured in the show’s flying program starting November 14.
The 777-9 flight test airplane made a nearly 15-hour nonstop flight from Seattle’s Boeing Field to Dubai, the first international flight and longest flight to date for the 777X as it continues to undergo a rigorous test program.
Building on the best of the industry-leading 777 and 787 Dreamliner families, the 777-9 will be the world’s largest and most efficient twin-engine jet, delivering 10% better fuel use, emissions and operating costs than the competition and an exceptional passenger experience. The 777X family has a total of 351 orders and commitments from eight leading customers around the globe. First delivery of the airplane is expected in late 2023.
Boeing will showcase its market-leading portfolio of commercial, defense and services products at the 2021 Dubai Airshow this month, including the international debut of its newest fuel-efficient widebody jet, the 777X. Building on the best of the industry-leading 777 and 787 families, the 777-9 will be the world’s largest and most efficient twin-engine jet, delivering 10% better fuel use, emissions and operating costs than the competition. Shown here: A Boeing 777-9 airplane photographed during flight testing. (Boeing Photo)
DUBAI, United Arab Emirates, Nov. 4, 2021 /PRNewswire/ — Boeing (NYSE: BA) will showcase its market-leading portfolio of commercial, defense and services products at the 2021 Dubai Airshow this month, including the international debut of its newest fuel-efficient widebody jet, the 777X, along with the company’s growing autonomous capabilities such as the Boeing Airpower Teaming System.
During the event, a Boeing 777-9 flight-test airplane will soar in the airshow’s flying program and appear in the static display. Building on the best of the industry-leading 777 and 787 families, the 777-9 will be the world’s largest and most efficient twin-engine jet, delivering 10% better fuel use, emissions and operating costs than the competition.
The company’s static display will also feature the 2021 Boeing ecoDemonstrator, an Alaska Airlines 737-9 that is flight testing about 20 technologies to reduce fuel use, emissions and noise and further improve safety.
In addition, Etihad Airways will display a 787-10 Dreamliner that showcases the airline’s collaboration with Boeing to advance sustainable aviation. Etihad’s program researches and tests innovative technologies, products and practices on its fleet of 787s and within its operations to further reduce carbon emissions. Also on display, flydubai – the region’s largest 737 operator – will feature a 737 MAX 9 that reduces fuel use and CO2 by 14% compared to its predecessors.
Boeing’s exhibit in Dubai will highlight defense products including the F-15EX Eagle II fighter jet and T-7A Advanced Pilot Training System, as well as its Autonomous Systems portfolio, including the Boeing Airpower Teaming System and the Insitu Integrator ER and ScanEagle unmanned systems.
Global defense customers are expected to display several operational Boeing aircraft, including the MV-22 Osprey, KC-46A Pegasus, P-8A Poseidon, C-17 Globemaster III, AH-64 Apache and CH-47F Chinook.
Boeing also will discuss its parts, modifications, digital, sustainment and training solutions, including an expansive global supply chain, maintenance and logistics network. Government services will feature in-country partnerships with on-the-ground support for its installed base of defense platforms. Commercial services highlights will include Boeing Converted Freighters, expanded support to regional customers and near-term sales opportunities.
Financial results significantly impacted by COVID-19, 737 MAX grounding, and commercial widebody programs
777X program recorded $6.5 billion pre-tax charge; first delivery expected in late 2023
737 MAX began receiving regulatory approval to resume operations and restarted deliveries
Revenue of $15.3 billion, GAAP loss per share of ($14.65) and core (non-GAAP)* loss per share of ($15.25)
Full-Year 2020
Revenue of $58.2 billion, GAAP loss per share of ($20.88) and core (non-GAAP)* loss per share of ($23.25)
Operating cash flow of ($18.4) billion; cash and marketable securities of $25.6 billion
Total backlog of $363 billion, including more than 4,000 commercial airplanes
Strengthening safety processes, improving performance, managing liquidity and transforming for the future
Table 1. Summary Financial Results
Fourth Quarter
Full Year
(Dollars in Millions, except per share data)
2020
2019
Change
2020
2019
Change
Revenues
$15,304
$17,911
(15)%
$58,158
$76,559
(24)%
GAAP
Loss From Operations
($8,049)
($2,204)
NM
($12,767)
($1,975)
NM
Operating Margin
(52.6)%
(12.3)%
NM
(22.0)%
(2.6)%
NM
Net Loss
($8,439)
($1,010)
NM
($11,941)
($636)
NM
Loss Per Share
($14.65)
($1.79)
NM
($20.88)
($1.12)
NM
Operating Cash Flow
($4,009)
($2,220)
NM
($18,410)
($2,446)
NM
Non-GAAP*
Core Operating Loss
($8,377)
($2,526)
NM
($14,150)
($3,390)
NM
Core Operating Margin
(54.7)%
(14.1)%
NM
(24.3)%
(4.4)%
NM
Core Loss Per Share
($15.25)
($2.33)
NM
($23.25)
($3.47)
NM
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”
The Boeing Company [NYSE: BA] reported fourth-quarter revenue of $15.3 billion, reflecting lower commercial deliveries and services volume primarily due to COVID-19 as well as 787 production issues, partially offset by a lower 737 MAX customer considerations charge in the quarter compared to the same period last year (Table 1). GAAP loss per share of ($14.65) and core loss per share (non-GAAP)* of ($15.25) reflected a $6.5 billion pre-tax charge on the 777X program and a tax valuation allowance, partially offset by a lower 737 MAX customer considerations charge. Boeing recorded operating cash flow of ($4.0) billion.
“2020 was a year of profound societal and global disruption which significantly constrained our industry. The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results. I am proud of the resilience and dedication our global team demonstrated in this environment as we strengthened our safety processes, adapted to our market and supported our customers, suppliers, communities and each other,” said Boeing President and Chief Executive Officer Dave Calhoun. “Our balanced portfolio of diverse defense, space and services programs continues to provide important stability as we lay the foundation for our recovery. While the impact of COVID-19 presents continued challenges for commercial aerospace into 2021, we remain confident in our future, squarely-focused on safety, quality and transparency as we rebuild trust and transform our business.”
The return to service of the 737 MAX in the U.S. and several other markets was an important step, and Boeing continues to follow the lead of global regulators and support its customers. Since the FAA’s approval to return to operations, Boeing has delivered over 40 737 MAX aircraft and five airlines have safely returned their fleets to service as of January 25, 2021, safely flying more than 2,700 revenue flights and approximately 5,500 flight hours.
Boeing now anticipates that the first 777X delivery will occur in late 2023. This schedule, and the associated financial impact, reflect a number of factors, including an updated assessment of global certification requirements, the company’s latest assessment of COVID-19 impacts on market demand, and discussions with its customers with respect to aircraft delivery timing.
Click the link below to read the full press release!
– 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
1Marketable 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 20th 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.
Three hour, 51 minute flight marks new phase for rigorous test program
Largest and most fuel efficient twin-engine commercial jet expected to deliver in 2021
The new Boeing (NYSE: BA) 777X jetliner took to the skies today, entering the next phase of its rigorous test program. Based on the popular 777 and with proven technologies from the 787 Dreamliner, the 777X took off in front of thousands at Paine Field in Everett, Washington, at 10:09 a.m. local time for a three hour, 51 minute flight over Washington state before landing at Seattle’s Boeing Field.
“The 777X flew beautifully, and today’s testing was very productive,” said Capt. Van Chaney, 777/777X chief pilot for Boeing Test & Evaluation. “Thank you to all the teams who made today possible. I can’t wait to go fly your airplane again.”
Capt. Chaney and Boeing Chief Pilot Craig Bomben worked through a detailed test plan to exercise the airplane’s systems and structures while the test team in Seattle monitored the data in real time.
“Our Boeing team has taken the most successful twin-aisle jet of all time and made it even more efficient, more capable and more comfortable for all,” said Stan Deal, president and CEO of Boeing Commercial Airplanes. “Today’s safe first flight of the 777X is a tribute to the years of hard work and dedication from our teammates, our suppliers and our community partners in Washington state and across the globe.”
The first of four dedicated 777-9 flight test airplanes, WH001 will now undergo checks before resuming testing in the coming days. The test fleet, which began ground testing in Everett last year, will endure a comprehensive series of tests and conditions on the ground and in the air over the coming months to demonstrate the safety and reliability of the design.
The newest member of Boeing’s market-leading widebody family, the 777X will deliver 10 percent lower fuel use and emissions and 10 percent lower operating costs than the competition through advanced aerodynamics, the latest generation carbon-fiber composite wing and the most advanced commercial engine ever built, GE Aviation’s GE9X.
The new 777X also combines the best of the passenger-preferred 777 and 787 Dreamliner cabins with new innovations to deliver the flight experience of the future. Passengers will enjoy a wide, spacious cabin, large overhead bins that close easily for convenient access to their belongings, larger windows for a view from every seat, better cabin altitude and humidity, less noise and a smoother ride.
Boeing expects to deliver the first 777X in 2021. The program has won 340 orders and commitments from leading carriers around the world, including ANA, British Airways, Cathay Pacific Airways, Emirates, Etihad Airways, Lufthansa, Qatar Airways and Singapore Airlines. Since its launch in 2013, the 777X family has outsold the competition nearly 2 to 1.
About the Boeing 777X Family
The 777X includes the 777-8 and the 777-9, the newest members of Boeing’s market-leading widebody family.
The folding wingtip of an unpainted 777X is pictured at Boeing’s facility in Everett
(Reuters) – Boeing Co <BA> said on Wednesday it was delaying 777X airplane’s first test flight, which was scheduled to take place on Thursday, due to bad weather.
Boeing said it was currently assessing the possibility of conducting the test flight on Friday.
(Reporting by Rama Venkat in Bengaluru and Tracy Rucinski in Chicago; Editing by Anil D’Silva)
LONDON/CHICAGO (Reuters) – Boeing Co’s new chief executive has sent the aerospace giant back to the drawing board on proposals for a new mid-market aircraft, effectively shelving in their current form plans worth $15 billion-$20 billion that had been overtaken by the 737 MAX crisis.
A decision on whether to launch a New Midsize Airplane (NMA) seating 220-270 passengers, which seemed imminent barely a year ago, had already been postponed as Boeing gave all its attention to the grounding of the smaller 737 MAX after two fatal crashes.
But days after taking the helm with a mandate to lift Boeing out of its 10-month-old reputational crisis, Chief Executive Dave Calhoun said the competitive playing field had changed.
“Since the first clean sheet of paper was taken to it, things have changed a bit … the competitive playing field is a little different,” he told journalists on a conference call on Wednesday.
“We’re going to start with a clean sheet of paper again; I’m looking forward to that,” Calhoun said.
He also spoke of a fresh approach to the market.
A Boeing spokesman said Calhoun had ordered up a new study on what kind of aircraft was needed. New aircraft typically take 6-7 years or more to bring to market once a decision is made, though Boeing aims to shorten that in part through digital technology and new business models designed around the NMA.
Calhoun “has asked the team to do an assessment of the future market and what kind of airplane is needed to meet the future market,” spokesman Gordon Johndroe said.
Noting that the original assessments on the NMA were made about two and a half years ago, he said the new study would “build upon what has been learned … in design and production.”
In further evidence of a change of pace, people familiar with the matter said a meeting between Boeing and a major potential supplier, originally scheduled for next week, had been abruptly cancelled with no new date set.
That contrasts with the approach just weeks ago when Boeing was still presenting new details of the NMA to some airlines, including a working logo – “theNMA” – and details of an “advanced composite” structure, according to a slide seen by Reuters.
The NMA had been designed to address a slender gap between single-aisle workhorse jets like the 737 MAX and long-haul wide-body jets like the 787.
But most of the effort revolved around a new production system designed not only to support the NMA but to lay the groundwork for the next single-aisle aircraft after the 737 MAX.
Calhoun said he expected the MAX, whose return to service was delayed again earlier this week, to resume its previous place in the market and remain in service for a generation.
Traditionally toe-to toe-with Europe’s Airbus SE, Boeing has fallen behind in sales for the largest category of single-aisle planes, such as the 200-240-seat Airbus A321neo, which overlaps with the niche being targeted by the NMA.
By delaying a decision on the NMA, Boeing already risked losing the sweetest part of the market, especially after Airbus seized contracts with two major U.S. airlines, analysts said.
Analysts have also questioned whether Boeing, facing costs equivalent to a new programme to repair the MAX crisis, as well as delays on its large new 777X jet whose maiden flight is set for Thursday, would have appetite for such a costly project now.
(Reporting by Tracy Rucinski in Chicago and Tim Hepher in London; Editing by Matthew Lewis)
FILE PHOTO: A passenger stands in front of a window where Qantas planes are parked at Melbourne Airport, Australia
SYDNEY (Reuters) – Qantas Airways Ltd <QABSY> said on Friday it has chosen Airbus SE <EADSY> as preferred supplier for jets capable of the world’s longest commercial flights from Sydney to London, beating rival Boeing Co <BA> after a hard-fought contest.
The choice of up to 12 A350-1000 planes fitted with an extra fuel tank for flights of up to 21 hours cements Airbus as the leader in ultra-long haul flying globally at a time when Boeing is battling delays on its rival 777X programme and a broader corporate crisis following two deadly 737 MAX crashes.
The Qantas flights would begin in the first half of 2023, but remain subject to reaching a pay deal with pilots, who would need to extend their duty times to around 23 hours to account for potential delays and switch between flying the A350 and the airline’s current A330 fleet. A final decision on an order is expected in March, the airline said.
Qantas Chief Executive Alan Joyce said the airline “had a lot of confidence” in the market for non-stop services from Sydney to London and to New York based on two years of flying non-stop from Perth to London, where it has achieved a 30% fare premium over one-stop rivals in premium classes.
“The A350 is a fantastic aircraft and the deal on the table with Airbus gives us the best possible combination of commercial terms, fuel efficiency, operating cost and customer experience,” he said.
Singapore Airlines Ltd <SINGY> operates the world’s current longest flight, nearly 19 hours from Singapore to New York, using an ultra-long range version of the smaller A350-900.
Airbus Chief Commercial Officer Christian Scherer thanked Qantas for its selection in a statement, while a Boeing spokesman said it was disappointed with the decision but looked forward to continuing its longstanding partnership with the airline.
Rico Merkert, a transport professor at the University of Sydney Business School, said the A350-1000 fit the Qantas brief well and was the safer choice, given Boeing has recently reported problems such as the grounding of the 737 MAX, structural cracks in 737 NGs and a fuselage split in a stress test of its 777-9.
“The A350 just seems to be a much safer bet,” he said. “And safety is at the core of everything that Qantas does including its brand.”
Airbus no longer provides list prices for aircraft, but based on its 2018 price list, the Qantas order could be worth up to $4.4 billion before heavy discounts that are standard for airline customers.
Citi on Friday estimated the planes would cost A$3 billion (1.6 billion pounds) to $3.5 billion, with the investment likely to be phased over three years.
The selection of the A350-1000 will add to growing doubts over Boeing’s plans to produce the 777-8 that it had proposed to Qantas for the mission.
Boeing had already said the entry into service for the plane, a smaller, longer-range version of the 777-9, would be delayed beyond 2022 but has declined to give a new date, saying it would be based on customer demand.
Customers Emirates and Qatar Airways have indicated they could switch orders for the 777-8 to the 777-9.
The 777-9 is due to enter service in 2021, following delays associated with its GE <GE.N> engines.
The Boeing spokesman said on Friday the manufacturer was focused on the development of the 777-9 and after that it would complete development of the 777-8, with the first delivery scheduled a few years after that.
(Reporting by Jamie Freed; Editing by Sam Holmes and Stephen Coates)
An Airbus A350-1000 performs at the 53rd International Paris Air Show at Le Bourget Airport near Paris
PARIS, Dec 5 (Reuters) – Airbus must hand a record number of aircraft to customers in December to meet delivery goals, company data showed on Thursday, and is all but certain of winning an annual order race against Boeing.
The European planemaker has been facing production snags in its best-selling A321neo jet, due in part to the introduction of a complex new flexible cabin, but has said it is confident of meeting a goal of 860 jets in 2019, revised down from 880-890.
To reach that target it must deliver 135 jets in December, beating a previous record of 127 December deliveries by 6%.
Airbus delivered 77 aircraft in November to reach 725 for the year so far, according to Thursday’s progress report.
Airbus has a track record of achieving a late surge in deliveries, though it is also working to spread deliveries more evenly over the year in future to smooth earnings and avoid quality problems that can creep in when it is working flat out.
Whether or not it meets targets, Airbus is set to regain the crown as the world’s largest commercial plane producer this year as U.S. rival Boeing approaches nine months without deliveries of its 737 MAX, grounded after two crashes.
Boeing is expected to jump back into the lead next year as projected deliveries include 737 MAX jets parked during the grounding, while remaining ahead on larger jets, but the timing of the 737 MAX return to service depends on global regulators.
Airbus is also on course to win an annual order contest between the plane giants after booking orders for 222 aircraft in November, driven mainly by last month’s Dubai Airshow.
Emirates ordered 50 A350-900 jets at the show as part of a fleet shake-up that also saw the world’s largest wide-body operator cut a remaining order for A380s and reduce its requirement for Boeing 777X jets, while adding the Boeing 787.
Airbus sold a total of 940 jets in January-November, or 718 after cancellations, leaving it well ahead of Boeing, whose year has been derailed by the grounding of the 737 MAX. In the latest period for which data is available, Boeing sold 180 jets in the first nine months or 45 after cancellations.
The latest figures were released days after Airbus won a sale of 50 A321XLR jets to United Airlines, narrowing the potential market for a mid-market plane that Boeing has been studying, while slowing those discussions during the MAX crisis.
United also delayed delivery of 45 A350s by several years to 2027 and beyond. UK analysts Agency Partners said on Thursday that this could put pressure on A350 output in coming years.
(Reporting by Tim Hepher; Editing by Giles Elgood and Andrew Heavens)
DUBAI, Nov 22 (Reuters) – The board of Rolls-Royce must urgently address its engine performance problems, the head of Dubai’s Emirates said, as the world’s largest buyer of wide-body jets weighs up who will power its order of Boeing 787 jets.
Emirates agreed to buy its first 787 Dreamliners in a last-minute, $9 billion deal at the Dubai Airshow on Wednesday, without specifying what engine would power it, while reducing its order for the U.S. planemaker’s delayed 777X model.
The 787’s, which can take either Rolls or rival GE Aviation’s GEnx engines, will be delivered to Emirates in 2023, a year later than a tentative purchase plan outlined two years ago.
That gives Rolls-Royce more time to sort out the durability issues in its Trent 1000 engines before Emirates believes a realistic competition can be held.
“Rolls have had a number of wake up calls and they really need to sort themselves out. I think the alarm clock has gone off a number of times,” Emirates President Tim Clark said at the Dubai Airshow.
“If I were on the board, I would be looking to recognise the issues… and deal with them immediately, meaningfully, forcefully and drive change,” he told reporters.
A spokeswoman for Rolls-Royce said it was proud that Emirates had chosen to order 50 Airbus A350s, powered by Rolls’ Trent XWB, in a deal announced this week.
“We are confident in the reliability and performance of our engines, and in our commitment to meeting the high standards expected by our customers,” the spokeswoman said.
“(Emirates) is one of the largest operators of our Trent engines in the world, and we are committed to maintaining our strong relationship with them.”
The Rolls-powered version of the 787 has been hit by repeated technical problems, leading to share price pressure and drawing criticism from airlines.
The engine maker’s chief executive Warren East said on Nov. 7 that the company would spend more on parts and replacement engines to reduce the time aircraft are grounded while turbine blades are replaced.
Clark said that the situation at Rolls was “salvageable” if board acted quickly and accepted the issues they were having.
“With the reputation that (Rolls) has for quality engineering and its excellence in the past, they must restore that as the gold standard,” he said.
He said his comments should not be read as a criticism of any individuals including East.
Clark has been a vocal critic of engine makers, saying in September he wouldn’t take new planes unless their engines were ready and said he was “a little bit irritated” by delays at Rolls and GE.
GE powers the 777X, which Emirates cut its order of on Wednesday after Boeing pushed back its entry into service, partly due to issues with its engines.
Clark said engine makers should only offer technology that was mature enough to work reliably in the demanding conditions of the Gulf, adding: “Don’t use (airlines) as guinea pigs”.
(Reporting by Tim Hepher, writing by Alistair Smout, Editing by Louise Heavens)
