Boeing HQ
Today’s news about Boeing reads between the lines, as the media examine the implications of recent events. Two stories talk about NASA, one of which indicates that the US space program is not in crisis, while another indicates that the fate of the moonshot is tied to Boeing’s performance. The failure of a test mission needs to be taken in context, as not all tests are successful. While we strive for perfection, we are human. But if Boeing wasn’t in trouble with its other programs, a failure of this nature might have been more easily forgiven. Instead, it is considered normal for a failing culture at Boeing – the key challenge for new CEO Kelly Ortberg.
Unfortunately, Boeing is bleeding everywhere, from Space to commercial aircraft to defense, and the multiplicity of failures is harming its reputation. The media, of course, feed on a wounded animal, and headlines like Delta Boeing 757 tire explodes imply that Boeing make tires that are unsafe for a nearly 30 year old airplane. A tire explosion will likely be examined first with the maker of the tire, which isn’t Boeing. That’s like saying a flat tire on my car is the fault of GM, Ford, or Mercedes Benz when none of them manufacture tires. Since football season is right around the corner, throw the flag and give the press a 15 yard penalty for piling on.
In other news, Ethiopian has turned to lessors as delivery delays would have otherwise prevented the carrier from growing its fleet. The good news is that lessors have access to airplanes, but the bad news is that in a supply constrained environment, it is costly. They will likely be asking for compensation on future deliveries.
As COMAC celebrates delivery of the C919 to two Chinese airlines, forecasts call for China to have major growth by 2042. A projected market share for that time shows COMAC at 25%, Boeing only 30%, and Airbus at 45%. Boeing needs to do better than a 30% share, but will have its work cut out for it ramping up production and developing a new aircraft in that time frame. Kelly Ortberg needs to set a goal to regain parity with Airbus by 2050. The bad news for Boeing is that it typically costs about 10 times more to recover a point of market share than it does to defend it in the first place, which prior management didn’t seem to realize.
While the C919 isn’t as efficient as the MAX or new narrow-bodies from the big 2, it is close enough that the Chinese government can mandate its use in what will soon become the world’s largest aircraft market. COMAC will be commercially successful and become the prototype for future Chinese aircraft development programs.
Finally, more reports are emerging that indicate the IAM is headed for a strike at Boeing, The company may need to be very creative to solve this problem with the union.
Links to todays key news follow:
- Stranded ISS astronauts reveal the US space programme is not in crisis – NewScientist
- ‘The fate of the moonshot is inextricably tied to Boeing’s performance’ – New York Times
- Delta Boeing 757 tire explodes in Atlanta airport killing two – eTurboNews
- Boeing delivery delays force top Africa carrier Ethiopian to lease planes – Bloomberg
- Two more Chinese airlines to start flying China-made COMAC C919 jet – Reuters
- Boeing, union ‘really far apart’ weeks ahead of possible strike – BNN Bloomberg
