Its Jet Programs Stalled, Boeing Accentuates the Positive Ahead of the Year's Big Air Show

June 17, 2022
Missing news of any relief from Boeing's troubles, management nevertheless made a case that it is working methodically through its problems, and that Boeing can recover market share lost to rival Airbus.

Jun. 17—As the year's biggest aviation event approaches, with Boeing facing the prospect of a spotlight on the problems besetting its commercial jet programs and public criticism of its management by leading customers, the company opened up a little this week to highlight the positives.

A month before the Farnborough Air Show opens in the United Kingdom, Boeing gave limited executive briefings on the state of its business and let reporters tour its local jet assembly plants for the first time since the onset of the pandemic.

Missing was news of any relief from Boeing's troubles. Management nevertheless made a case that it is working methodically through its problems, and that Boeing can recover market share lost to rival Airbus.

"From the 737 all the way up to the future 777X family, we've got the most capable, but also the most versatile and efficient, aircraft for the needs of our customers ... through the next decades," said Darren Hulst, vice president of marketing at Boeing Commercial Airplanes.

Brian Hermesmeyer, who leads Boeing's efforts to market cargo jets — the one booming segment of aviation during the pandemic — emphasized Boeing's continued dominance of the air freighter market.

And senior vice president Mike Fleming, responsible for development of Boeing's latest derivative models, outlined the painstaking job of achieving Federal Aviation Administration certification for those new planes and the glacial pace of that work.

Reality inside the Boeing factories

On Wednesday's Everett and Renton factory tours, the thrill of getting a glimpse of the awesome manufacturing inside the assembly plants was tempered by reality.

In Everett, reporters saw the third-to-last 747 jumbo jet under assembly. That program will end forever this fall, 52 years after the plane entered service with Pan Am. With the jet's nose door flipped open, one could imagine a silent scream.

A few bays over, Boeing is building 777s at a rate of just two per month, and all of those are freighters. The 777-300ER passenger plane that was until recently considered the best plane in the sky is no more.

Meanwhile, reporters could catch glimpses in a far-off bay, or on the ramp, of the upturned wingtip of a giant 777X, designed to replace the 777-300ER. Though about 30 of those jets have been built, production is paused as the 777X's entry into service is delayed until 2025.

On the other side of the balcony that overlooked 777 production, reporters could look down on what was once the 787 Dreamliner assembly line. That assembly line is long gone to South Carolina.

And yet the assembly bay was filled with six 787s, all being reworked to fix defects at the fuselage and other structural joins that have prevented any 787 deliveries for more than a year.

It's expected that the FAA may finally give Boeing approval to resume deliveries in the coming weeks.

At the 737 MAX plant in Renton, two of the three assembly lines have reactivated since the 21-month grounding of the aircraft after the deadly crashes of 2018 and 2019.

There, 737 director of business operations Dennis Eng showed off assembly lines less cluttered and more organized than pre-COVID times, yet moving slower than the 31-jets-per-month pace Boeing targeted.

The barriers to achieving that goal are pandemic-driven: supply-chain issues and a shortage of labor.

"It depends on making sure that we've got the right number of trained personnel and the parts available on time," said Eng.

Having cut more than 16,000 jobs in this state during the pandemic, Boeing is hiring aggressively and offering engineers incentives to stay.

Eng said he expects to reach the target rate "later this year."

The Renton assembly line on Wednesday also offered another reminder of Boeing's current problems: the two latest models of the 737 MAX — the smallest MAX 7 variant and the largest MAX 10 model — were among those under assembly.

But neither the MAX 7 nor the MAX 10 are yet certified to carry passengers.

The MAX 10 is unlikely to be certified by a year-end deadline, after which legislation mandates that Boeing must either upgrade the jet's aging crew-alerting system or get an extension from Congress to the waiver granted the earlier MAX models.

Aviation's new regulatory regime

If something goes wrong in flight, the crew-alerting system tells the pilots where the problem is. If the system has to be redesigned for the MAX 10, making it different from the other MAX models, that will be expensive for Boeing and for the airlines that operate it.

Fleming said Boeing is working closely with the FAA to get the jet certified.

"It's indeterminate when that's going to happen," he said. "I don't think either side is going to try to rush anything forward."

He said Boeing has completed its own flight tests but is waiting for FAA approval before beginning the next phase, when FAA pilots conduct test flights to validate the Boeing data.

That means the MAX 10 is "roughly about halfway through" the process, Fleming said.

Since the MAX 10 began flight tests exactly a year ago on Saturday, that comment won't encourage anyone to think Boeing might meet the Dec. 20 deadline.

If not, Boeing must bank on a congressional extension. Fleming presented the elements of the case for that.

"We believe that the 737 is safe. We believe the crew alerting is safe," he said.

"We believe that commonality [among the MAX models] is one of the key safety features of our family of 737 airplanes," he added.

He said Boeing has added two cockpit system safety improvements for the MAX 10 that it's currently flight-testing:

* An enhanced angle of attack system, which provides the flight computer with a third measure of this critical data point.

* And a new switch on the instrument panel that will allow the pilot to silence an erroneous stick shaker (a heavy vibration of the control yoke when the computer thinks the plane is about to stall).

Airline pilots who have tested these upgrades on MAX 10 test flights have provided positive feedback, Fleming said.

They are "designed to eliminate most of the erroneous indications that we think could happen on the airplane," he said.

But Boeing still has to go through all the "human factors" assessments of these changes, which means testing the assumptions made about pilots' reactions.

And this is where Boeing runs into the reality of a new regulatory regime.

The Aircraft Certification Safety and Accountability Act passed in 2020 requires that "any system safety assessment that had 'human factors' assumptions associated with it, the FAA can't delegate that," said Fleming. "They need to work through that themselves.

"After the two unfortunate accidents that we had on the MAX," Fleming said, the regulatory process is "quite a bit more rigorous than what we have experienced in the past."

Fleming said the tighter oversight has not uncovered major issues or driven any major changes. But it is taking time.

This is what's behind also the protracted delay on the 777X.

Can Boeing regain market share?

Hulst and Hermesmeyer are trying to convince the world to buy Boeing's jets, both current and forthcoming.

Hermesmeyer confidently laid out the booming sales of the 767F and 777F widebody freighters.

He was unfazed when reporters raised a new global aviation carbon emissions standard that comes into force at the end of 2027. The engines on the 767F and 777F don't meet that standard and so those programs could be forced to end production at that date.

Boeing may seek a waiver to allow the 767 to continue a little longer.

And if the 767F is closed prematurely, Hermesmeyer said Boeing will develop a new midsize widebody freighter, most likely a cargo version of the 787.

As for the 777F, it will be replaced by the newly launched cargo version of 777X, the 777-8FX.

And Hulst talked up Boeing's opportunities in the passenger jet market.

Hulst called the 777X "the large aircraft of the future," a replacement for the big airliners now in service, including Airbus A380 super-jumbos as well as 777-300ERs and 747s.

And in the single-aisle jet market, where Airbus has grabbed 60% market share with huge sales of the A320neo family against the competing MAX family, Hulst defended Boeing's position.

The hottest-selling Airbus jet is the largest A321neo model, which is also offered with extra fuel tanks in long-range, LR, and extra-long-range, XLR, versions that some airlines are using for regional international flights traditionally flown by much more expensive widebody jets.

There is no MAX that can match the range of the XLR.

Hulst acknowledged that the A321neo "is absolutely a strong contender at the top end of the single aisle market." But he dismissed the XLR as a "niche" airplane that will achieve only a few hundred sales, "a fraction of a fraction of the market."

He said the MAX will compete well in every other segment of the single-aisle market.

"It's not our goal necessarily to match Airbus plane for plane at the top end of the market," Hulst said.

He pointed out that though United last year ordered 70 long range Airbus A321neos, at the same time it ordered 50 MAX 8s and 150 MAX 10s.

"The numbers, I think kind of speak for themselves," said Hulst, saying that if flown on dense transcontinental markets, the MAX 10 will provide United lower unit costs than the A321neo.

While the MAX badly trails the Airbus jet family now, Hulst insisted that it can hold its own in future sales competitions because of the versatility Boeing offers airlines with the five different MAX models in different sizes and ranges.

All of this positivity is pushing against three solid years of bad news and Boeing missteps.

Following intense criticism of Boeing management recently by executives at leading airplane leasing companies and by airline executives — including Michael O'Leary of Ryanair — on Thursday, Richard Aboulafia, aviation analyst with AeroDynamic Advisory, piled on in his monthly newsletter.

Boeing CEO Dave Calhoun's recent announcement that it will be at least two years before Boeing launches a new airplane "is effectively surrendering to Airbus," Aboulafia wrote.

He called for "new management, before things get even worse."

At Farnborough in July, Boeing will have to present its positive case in face of similar skepticism from international media.


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