NewsWhats happening
Carriers try to plan their flight networks as plane makers juggle supply-chain, other constraints
Airlines in need of more pilots and spare parts are increasingly facing another shortage: new jets.
Boeing Co. and Airbus SE are months behind handing over new single-aisle jets often used for U.S. domestic flights or other short-haul trips, constraining carriers’ ability to add flights to meet resurgent demand and plan their schedules, according to company executives and industry officials.
“It makes it really hard for our team to plan,” Southwest Airlines Co. Chairman Gary Kelly said at an aerospace industry event in Washington, D.C., last month.
A Boeing spokeswoman said the company continues to work closely with suppliers to meet its commitments to customers.
In addition to supply problems, Boeing is facing regulatory challenges for its latest two iterations of the 737 MAX. Both face uncertain futures if Boeing can’t win Federal Aviation Administration approval for them by the end of the year. Current federal law would require a cockpit overhaul if the planes aren’t approved in 2022.
Excerpt from WSJ
Read the full article
While China’s airlines haven’t resumed using the plane, one of the jetliners operated by a Mongolian airline landed in Guangzhou
A Boeing Co. 737 MAX operated by MIAT Mongolian Airlines landed in China on Monday in what industry experts say is the jet’s first commercial flight in Chinese skies since Beijing grounded the plane in 2019.
The 737 MAX jet flew to China’s southern city of Guangzhou from Ulaanbaatar, according to flight tracker Flightradar24. Chinese regulators gave MIAT permission to fly the 737 MAX into China in August, a spokesman for the Mongolian airline said in an email, adding that the jet had been leased out to another operator until now.
The flight by the non-Chinese carrier comes weeks after China’s air-safety regulators met with Boeing to discuss the 737 MAX in September. China grounded the series in early 2019—the first country to do so—after two deadly accidents in the space of less than six months in other countries. Chinese airlines have yet to resume commercial flights using the plane.
Qi Qi, a Chinese aviation analyst, said that the MIAT Mongolian Airlines flight is the first commercial flight for the 737 MAX in China since the grounding. The flight is another step toward a broad resumption of MAX’s commercial flights in China, he said.
Since late 2020, the 737 MAX has resumed operations in the U.S., Australia and Canada, among other countries. Only a handful, including China, are still grounding the model.
Excerpt from WSJ
Read the full article
A Boeing 737 MAX jet landed in China today in what industry experts say is the aircraft's first commercial flight in Chinese skies since Beijing grounded the plane in 2019. That was shortly after two deadly accidents involving 737 MAX jets in other countries in the space of less than six months. Since late 2020, the Boeing jet has resumed operations in the US, Australia and Canada, among other countries.
Planemaker slows aggressive ramp up of A320 narrow-body as suppliers scramble to hit targets
LONDON—Airbus cut its aircraft delivery guidance for this year and slowed production plans, citing delays in its supply chain that are holding back the European planemaker’s aggressive ramp up targets.
The company will deliver 700 aircraft this year, 20 fewer than it had initially planned, it said on Wednesday. Airbus delivered 297 aircraft in the first half, with some handovers held back by missing or late components.
While it held on to plans to increase production of its bestselling narrow-body family to 75-a-month in 2025, it said production would increase more slowly through 2023. Rates for that aircraft, the A320, will now only reach a rate of 65-a-month in early 2024, about six months behind schedule. Rates are currently at about 50 a month.
“We are late on the trajectory we had given to ourselves,” Airbus Chief Executive Guillaume Faury said on a call with reporters, citing the supply-chain challenges. “We are trying to go as fast as we can.”
Excerpt from WSJ
Read the full article
U.S. manufacturer has increased production and deliveries of its 737 MAX amid supplier bottlenecks
Boeing Co. said its quarterly profit fell as it awaited regulatory approval to resume deliveries of its 787 Dreamliner and charges continued to mount at its military and space unit.
The company said its second-quarter results showed it was making progress in stabilizing its operations after a series of production and regulatory problems have prevented it from delivering commercial aircraft on time and without quality issues.
“We do believe we’re in the middle of a momentum shift,” Chief Executive David Calhoun said in a call with analysts Wednesday.
Boeing shares were recently trading around even, having climbed more than 3% at one point.
Production of the 737 MAX has reached 31 planes a month, up from 16 a year ago, as it deals with supply-chain challenges such as engine shortages that are also affecting rival Airbus SE, which also reported earnings Wednesday. Boeing has said it stepped up 737 deliveries in June.
Excerpt from WSJ
Read the full article
737 MAX deliveries are key if the plane maker is to generate cash this year, but maintaining June’s positive trends won’t be easy
The once-troubled 737 MAX jet now carries Boeing investors’ hopes and dreams.
On Wednesday, the Arlington, Va.-based plane maker reported second-quarter earnings that fell short of Wall Street expectations. Still, free cash flow, which is a more important metric, was better than forecast thanks to a jump in MAX deliveries. If it keeps this going, Boeing should hit its target of positive cash flow for the year for the first time since 2018.
To be sure, defense revenues continued to disappoint and U.S. regulators still haven’t cleared the way for its other key product, the 787 Dreamliner, following a series of defects. But deliveries seem set to resume this summer, and the fallout from the war in Ukraine will probably soon send a wave of cash toward defense contractors.
The fate of the MAX is subject to many more unknowns, both positive and negative. It may be the key driver of Boeing’s stock, which is down more than 50% since the onset of the pandemic but still not an obvious buy. The plane maker is trading at an enterprise value of around 12 times expected 2024 earnings—the year when travel is expected to fully recover. This is in line with pre-Covid valuations, but those were historically elevated.
On the one hand, the MAX is selling better than its detractors predicted. During last week’s Farnborough International Airshow, it garnered 233 orders, including 100 planes by Delta Air Lines —the only top U.S. carrier that hadn’t yet bought it. This compared with 73 orders for Airbus’s competing A320 family. The A320 remains more popular overall. Counterintuitively, though, this may work in favor of the MAX right now, as airlines are much more likely to get their planes ahead of time. While the A320 has a backlog of around 6,000 orders, the MAX’s is closer to 3,400 due to cancellations in recent years.
Excerpt from WSJ
Read the full article
Boeing entered Farnborough Airshow behind Airbus, particularly in the narrow-body jet market
Boeing is typically nearly tied for orders with rival Airbus entering the annual Farnborough Airshow, but this year it's well behind. WSJ’s George Downs reports from the show on how Boeing is trying to catch up and what it will take to restore balance to the aviation duopoly.
Excerpt from WSJ
Video
Carrier is offering more flexibility as it expects some challenges despite efforts to reset operations
Delta’s broad waiver underscores the challenging conditions that travelers could encounter this weekend.
Nervous about flying during a busy holiday weekend? Delta Air Lines Inc. has an alternative: don’t.
Delta is allowing customers to change flights for free, letting them rebook trips before or after potentially challenging weekend days without paying a higher last-minute fare or a change fee.
The waiver will apply across Delta’s entire network for July 1 through July 4, as long as customers travel between the same origins and destinations by July 8.
Delta said it expects some challenges this holiday weekend, despite efforts by the company and its staff to reset the carrier’s operations.
Excerpt from WSJ
Read the full article