Boeing Reports Record Annual Loss
Boeing is hobbled by collapse in plane deliveries. And the new 777X is delayed until 2023.
Add it up and you have a Record Annual Loss.
Boeing reported its largest-ever annual loss and took a big financial hit on its newest jetliner, signs that the Covid-19 pandemic is compounding the aerospace giant’s problems.
The plane maker said the new 777X, its largest passenger jet, would be at least three years late for airline customers, the latest Boeing plane to hit trouble following the grounding of the 737 MAX after two fatal accidents. Quality problems with its popular 787 Dreamliner jet have halted deliveries since October.
The delay leaves Boeing even more reliant on its defense business and other troubled commercial-aircraft programs to reverse heavy losses, as the pandemic has sapped demand for new planes. Executives said Wednesday they didn’t expect Boeing would stop bleeding cash until next year.
Opening for Comac?
As the pandemic continues to weigh on the aviation industry, Chinese aircraft manufacturer Comac has been pushing ahead with testing a new passenger jet. If successful, the C919 could rival Boeing and Airbus in the largest aviation market in the world.
Will Comac Suceed?
I asked my aviation contact, an industry consultant what he thought about China's chances.
Selling an airplane alone is the small part. Supporting the fleet world wide will take China decades, if ever and is a key factor in a sale.
Boeing has engineers in every major airport in the world. They have what is called an AOG ( Airplane On Ground) team in Seattle. It took 75+ years to perfect this system. They are good at it. They have a huge warehouse full of spares. When an airplane is out of service, Boeing teams converge from all over the world.
For example, a few years back, an Air France 747 on takeoff from New Delhi, ran off the runway, severely damaging the undercarriage. Boeing flew in engineers and mechanics from Everett, WA. They worked in 110 degree weather for 3 weeks round the clock to assess the damage, temporarily fixed the aircraft making it airworthy to fly back to Seattle where it was fully repaired to the required safety standards and returned to Air France. A $250 mill product salvaged.
Boeing has done this dozens of times all over the world in hostile conditions. I doubt China can support a big fleet as Boeing did above.
No Fear of C919 for a Generation
This Leeham News article is a bit dated but please consider No Fear of C919 for a Generation
The first COMAC C919 was rolled out of the factory over the weekend, China’s mainline entry into the fiercely competitive arena now “owned” by the Airbus-Boeing duopoly.
The C919 will still have lower capital costs, but the Chinese have little experience at a global product support system for its military or commercial aircraft. Competing with Airbus and Boeing on this scale is, well, no competition at all.
Developing a commercial aerospace industry is a national goal of the Chinese. They’ve developed a space program and a blue water Navy. Anyone who thinks that the Chinese won’t develop a viable commercial aviation industry is sniffing kerosene. But it will take time.
The culture is a patient one. The leaders waited 99 years to reclaim Hong Kong and Macau. Waiting 26 years—a generation—is a piece of cake.
The first Airbus airplane, the A300B2, entered service in 1974. The A320 followed in 1988. By 2000, 26 years after the A300, Airbus captured 50% of the market.
The above article is from 2015 and is thus a bit dated. But it echoes what my contact stated about service.
If a generation is 26 years, China still has another 20 to go.
Here is an interesting comment on the Leeham site.
”My skepticism comes from Comac’s methods in designing and building the C919 . First, it is using engineers, mid-level managers and executives who have virtually no commercial aircraft experience. Second, it is outsourcing almost everything: parts, systems, subsystems and testing.”
“What is more disturbing is that Comac engineers and managers are not interested in understanding the engineering issues and problems. Rather, they only want the answers. Because of pressure from the top, they will outsource the answers and solutions from Western companies and simply implement them without understanding the “whys.”
My contact offered these final thoughts:
Airbus' A321 is a formidable airplane. Even Boeing cannot compete against it, let alone China.
Boeing has huge holes in its product line and Airbus has exploited it effectively. This is the single aisle market that Boeing, Airbus and China are eyeing.
- Designing an aircraft, assembling them, and servicing them are three different things.
- Neither Boeing nor Airbus made critical components in China and wisely so.
- Within China, Comac may have some forced success. But externally, Boeing and Airbus are not threatened by China yet and perhaps never will be.
Boeing has more to fear from Airbus than China.