Boeing HQ
Today’s key Boeing news centers about production rates for aircraft, and the P2F cargo conversion market.
Production rates differ from deliveries, as aircraft can be completed and not delivered, as we saw with the inventory build-up with the Boeing 737 MAX. In recent months before the IAM strike, we saw the company delivering around 30 MAX aircraft per month, but producing about 22 per month, the remainder being delivered from inventory.
For suppliers, this is an important distinction, as they would not be delivering components at the same rate as production. As Boeing ramps-up its production post-strike, it is important to track production as well as deliveries. We tracked 9 MAX 8s, 1 MAX8 BBJ, 4 787-9s, 2 787-10s, and 1 767F for a total of 16 aircraft in November, based on first flights conducted during the month. The 9 MAX jets indicates a quick ramp-up back to the low 20s is possible for December, but still well short of the FAA mandated 38 per month maximum, unlikely to be achieved before the second half of 2025.
Passenger to Freight (“P2F”) conversions are being constrained, with feedstock older than in prior conversion programs, impacting aircraft economics. It now appears that there may be overcapacity in narrow-body conversions, but continuing opportunities for late model cargo lift as the 767 ages out of the conversion market.
An investor lawsuit from a pension fund blames Boeing’s Board of Directors for the ‘rotten’ corporate culture at the company. While it is uncertain if the lawsuit will prevail or be settled out of court, the inclusion of members of the Board in the lawsuit places responsibility for corporate governance with the directors. This could provide an interesting precedent if successful, making D&O insurance an important element of Board service.
Boeing received a new order worth $165 million for additional CH-47F Block II Chinook helicopters. Meanwhile, announcement of additional layoffs has begun with the Huntsville, Alabama facility planning 158 layoffs.
Finally, Sierra Nevada has begun modification of the first 747-8i for the Air Force One fleet into ‘Doomsday’ configuration with the appropriate communications and defensive measures required for POTUS. Boeing is already well over budget on this fixed price contract.
Links to today’s key new follow:
- Production Estimates for November 2024 – AirInsight
- Converted aircraft operators looking for freighter mileage – Air Cargo News
- Boeing investor suit blames Board for “rotten” corporate culture – Bloomberg Law
- US Army orders additional Boeing CH-47F block II Chinooks – Boeing
- Boeing layoffs continue as new orders arrive – TipRanks
- Sierra Nevada begins modifying first 747-8i for ‘Doomsday’ jet replacement programme – Flight Global
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