Podcast: Airbus Races, Boeing Staggers To The 2024 Finish Line

Listen in as editors discuss whether Airbus will meet its delivery target and the long climb ahead for Boeing. 

Subscribe Now

Don't miss a single episode of the award-winning Check 6. Follow us in Apple Podcasts, Spotify or wherever you listen to podcasts.

Discover all of our podcasts at aviationweek.com/podcasts.

Transcript

Joe Anselmo:

Welcome to Aviation Week's Check 6 Podcast. I'm Joe Anselmo, Editorial Director for the Aviation Week Network. As we head into the final days of 2024, Airbus is firing the afterburners on its production lines to try to reach its target of 770 deliveries this year. Does it have a chance of succeeding? Jens Flottau, who leads our commercial aviation team, just visited Toulouse and will share with us what he thinks.

Boeing is staggering to the finish line of a truly awful year. Just five days into it, and improperly installed door plug blew out on a 737 MAX flight. For the middle of the year, the company had a new CEO, and barely a month after he took over, the company's machinists went on strike, shutting down MAX production. One bright spot: production of those MAX's has just resumed, setting the stage for what hopefully will be a recovery year in 2025. Safety Editor Sean Broderick, who has been following all this closely, will weigh in.

And joining the discussion to keep us all honest is “the numbers guy,” Daniel Williams, Aviation Week's Director of Fleet Data. Dan, let's kick off with you. What are some of the key numbers?

Dan Williams:

Well, thank you very much, and yes, it's probably a good idea to set the scene of where we're at through the end of November 2024. Let's start with Airbus, because Joe, you talked about Airbus. They made a bold statement at the start of the year saying they were looking at 800 deliveries for 2024. Then around about mid-year, they reduced their outlook to about 770. Now, recently, the word is that they've slipped in front of that 770, is “around” 770. So, there's a discussion on what you would class as around 770 is. Now, where they were through the end of November was 643 deliveries. Now, to get to the 770, they need a little under 130 more deliveries for the rest of the year. So, I took a look at our fleet discovery tool and there are three years, in 2017, 2018 and 2019, Airbus delivered enough aircraft in December for them to meet the 770 mark this year.

They delivered 127 in 2018, 130 in 2017, the year prior, and in 2018, which was the last big year for deliveries because that was the last year globally for the commercial fleet that the MAX was fully delivered, was 138. So, Airbus has still got an opportunity. However, and there's a big however, this is not going to be without its difficulties. What they have in their advantage is they have a couple of XLRs that are backed up because they had to wait for type certification, for the XLR to come through. So, there might be a little push with some additional XLRs that they couldn't previously deliver because they weren't certified. So, there's promise there. A320 deliveries through November as a family are up, but only marginally, only by 20 aircraft compared to the same 11 months in '23.

A330s remain flat. A350s are down. They're down about 15% on what they were by the same time in 2023. But the A220 on the other hand is up. They've delivered 65 A220s through the end of November, which is almost 12% more than they had done in ‘23. So, can Airbus make the 770? They’ve still got a chance. I remember we did a podcast earlier in the year and it wasn't beyond the realms of possibility, but will be difficult as we sit here today. It's not beyond the realms of possibility, but is ever more increasingly difficult to hit that 770 number by the end of the year.

As for Boeing, slightly different story. They're at 318 deliveries this year through the end of November. They were at 460 through the end of November last year. So, we know the reasons why those numbers are so low, and pretty much every production line has been impacted by that. So, with Boeing, it's not so much about what numbers they're going to get out, it's where they're resetting their base and how they look to get increased production on the production line of that MAX.

Joe Anselmo:           

 Jens, what did you see in Toulouse? And what were the impressions you came away with?

Jens Flottau

 I saw a lot of aircraft. Unfortunately, I also saw a lot of aircraft without engines and aircraft parked in places at the airport that shouldn't see that many aircraft. Bottom line is there's a lot of stored aircraft at the main Airbus space waiting for components, and that's what's been a particular problem of late on the widebody side. If you look at the numbers that Dan just discussed, the output on the narrowbody side wasn't that bad. All the growth that we've seen has been 100% growth on the narrowbody side, A220s, as Dan mentioned, and surprisingly to me, most of the A230neo family output increase has been A321 neos, which are particularly difficult to build.

So, that part went well, in part I think because there is understood to be a deal between Airbus and CFM International for CFM to deliver more engines to the final assembly line at the end of this year, to enable Airbus to reach or get at least close to its targets. We'll see what that means in January and February when there is the traditional lull in deliveries, but that's a problem for next year.

I went to Toulouse because I will soon write a feature about the first 10 years of the A350 in revenue service. And so, I went through the final assembly line and saw the aircraft and I talked to some people. A350s are a problem right now. Five were delivered in November. That's at least close to the rate, but if you look at the annual numbers, it's 43. And if you look back in history, in the history of the program, the worst year so far was 2016, which was really the first year in the initial ramp up of the A350s.

So, very early days when it takes a lot of time to assemble aircraft because the learning curve isn't there yet and so on. So, it just shows how difficult the situation is. On the A350, its cabin components, its engines have been a problem. Spirit AeroSystems has been a huge problem for fuselage components. So, yeah. That will be hard, hard work to recover. And don't forget the 350 is supposed to be at 10 in 2028. Similarly, A330, just one delivery in November, flat. Also, engine issues are delaying some deliveries. So, the picture is, wide-bodies are more of a problem than narrowbodies at this point.

Joe Anselmo:            

Turning to Boeing, Sean, at the beginning of this year, a key number everyone kept throwing out was 38, 38 being if Boeing could produce 38 MAXs a month, that would be the point where it stopped bleeding cash. They obviously didn't come anywhere near it this year, and it's going to pretty much take most of next year, if not all of next year to get back to 38 a month, won't it?

Sean Broderick: 

I think that's right. I think betting on 38 a month before 2026 is not a great bet at this point. But bigger picture, it's more about can Boeing get on a consistent cadence with not just the 737 program, but really, with the 787 and the 777 as well. And can they get, heading towards rates that, the last time they gave solid guidance was in November 2022. It seems like a century ago with all that's happened at the company. That guidance included 57 737s a month, four 777s a month, and 10 787's a month in the 2025, 2026 window. They purposely kept that window large because they weren't sure, and they didn't give any guidance for 2024 back then because they weren't really sure what was going to happen between late 2022 and now. Well, that proved prescient because a whole lot happened and not much of it good for Boeing.

Today, they have different issues affecting each of those programs. I mean, you talked about the 737. They had issues before the door plug blowout. The door plug blowout in January magnified those issues, their production quality issues. They've worked to get those in shape or at least to get those identified and begin to get their entire production, including external suppliers, in shape. That was just coming together when the strike hit. So, getting back to where they were even pre-strike is going to be a little bit of a challenge. They were around 20, call it 25, they dropped to below 20 after the Alaska accident in terms of monthly production on the 737. Getting back to that mid-20s number, it's not going to happen in January because the production processes were changing. Some of the build instructions were changing. Boeing's rewriting more than 1,000 documents to make things easier on their frontline production workers.

787's been dealing with supply chain issues back when Dave Calhoun was still [CEO] he said that it wouldn't be until 2025 until some of those issues were, some of those headwinds had completely disappeared. That's proving true. 777 has a certification issue as we know. They paused, that airplane was paused, I believe, during when the 2022 guidance was given. I think that's right. They paused it around late 2022. So, the 777-9, they weren't even making those for the better part of a year.

So, looking at their rates and looking at their totals, it's more about what did they do compared to last month and is it steadily getting better? And fingers crossed, Boeing will begin to climb that mountain or has begun to climb that mountain, but man, it's going to be, it's not a sprint. It's going to be, there's no afterburners going on out of Boeing. All the afterburning's going on in Toulouse and Hamburg, I guess.

Dan Williams

 It's really interesting because the Boeing issues, they go back even further than 2024, than the door plug. They go back to the snowmen holes in the Spirit AeroSystems were drilling back in July 2023 because Spirit had a 10-day strike in early July 2023, which then led into the snowmen holes, to use a crude term. However, that was the last time. Late June 2023 was the last time Boeing, on the 737 production line, were at rate 32. So, that is over 18 months ago since Boeing were at rate 32, and it took them a long time to get to rate 32.

So, Sean's right. We are at the point now that if Boeing gets a rate mid-20s by the end of quarter one, 2025, that will be a step in the direction. If they can move that rate from mid-20s to 30s, give or take, before the Paris Air Show, that will be a great step in their direction. If they can get to rate 32 before the end of 2025, that's rapidly becoming probably the best that we can hope for Boeing. And then, I agree with Sean. I think rate 38 is a 2026 goal, a more likely outcome today than it was X many weeks ago.

Sean Broderick:   

And of course, that rate 38, that's the de facto cap that Boeing has agreed to with the FAA. Adding yet another layer of potential difficulty, Boeing is going to have to deal with a new FAA administrator if that cap is going to be lifted because Mike Whitaker has announced that he Is departing on January 20th, 2025. So, that adds more. The leadership at the FAA was already in a little bit of churn and this only adds to it. And so, who knows what that's going to mean when Boeing finally gets to the point where they can produce more than 38 airplanes, 737s a month. So, it's going to be very interesting to watch.

Dan Williams:    

And just to reiterate, when we talk about rate 38, for example, that's 38 aircraft coming off the production line per month. There are still inventory MAXs that are built awaiting delivery, which I believe are part of the FAA's cap of deliver 38 or ticket 38 per month. “Rate 38” and “ticket 38” are two slightly different things. However, that's what's given Boeing the buffer and allowed Boeing to deliver some MAX's during November because they were already built. So, they just had to push them through all their checks and get them certified and then deliver them. So, whilst they weren't producing any MAXs, they were still delivering about a dozen MAX'\s.

Sean Broderick:  

 Absolutely right. I mean, the FAA limit, worth pointing out, and I'll turn it over to you Joe, worth pointing out that the FAA's limits actually on ticketing airplanes that were recently built. They will not ticket more than 38 new build 737s per month. So, Boeing could deliver 45 and still be under, and still be at their limit.

Joe Anselmo:         

 So, Sean, you mentioned that it's going to be a long slog for Boeing next year climbing out of this, but for the last five years, we've been asking, has Boeing hit rock bottom? From where you sit, does it look like Boeing's hit rock bottom, that it's uphill from here, barring any unforeseen disasters?

Sean Broderick:       

I hesitate to say it can't get any worse. I mean, I suppose if Boeing is going to continue as we know it, as a manufacturer of commercial airplanes and other things that people at Aviation Week care about certainly more than I do, I think this has to be rock bottom. If it gets any worse, I think you're looking at a different aerospace conglomerate and you still may be looking at one. We haven't seen what Kelly Ortberg's plan for trimming the company down by 10% means. But from a commercial aircraft production standpoint, it really can't get any worse than it is now.

Again, we talked about the 767 is going to be sun setting late this decade. Their are other three programs that are all key programs have been having major issues for the better part of the decade, really, each one of them. And so, at some point, Boeing has to start hitting the targets that it puts out there, not only for its customers, but for its accountants and for the people it owes money to and just for its balance sheet. And I think if Michael Bruno was on here, he'd say the same thing. I mean, at some point, it becomes a Going Concerns issue to steal Michael's Aviation Week column name, and I think we're absolutely there.

Joe Anselmo:     

Jens, before we wrap up, I wanted to ask you, you've been traveling a lot. You were also in Geneva this week where Willie Walsh, the head of IATA, the International Air Transport Association, delivered a scathing criticism of the OEMs and accused them of anti-competitive behavior.

Jens Flottau:       

 He just basically said the airlines have had enough of this, and he said, "We are dealing with quasi monopoly suppliers, an issue that we need to look at that could well be evidence that this is a case of these suppliers being able to abuse their dominant position. They are benefiting from the supply chain issues and there's no evidence that they are resolving this. This is just not good enough." So, he doesn't really accuse them of anti-competitive behavior yet, but is indicating that they're not doing enough to resolve the situation because high prices for spare parts, high prices for aircraft are something that's obviously good for the industry.

 It's also good for a lessors because the in-service fleet that's owned by lessors is a lot more valuable than it used to be, and new leasing deals can be signed at much higher lease rates. So, the airline industry is losing patience. There's not much it can do, frankly, to resolve that issue other than being more patient. Sean, you may remember, there's been one case where IATA and some airlines have been involved in something similar with CFM International in 2016, 2017, right?

Sean Broderick: 

Right. And yes, the short answer is yes. I think there'd be some debate over how successful that complaint ultimately was. But suffice it to say that CFM and GE and Safran put together a very official sounding document that made some people feel better.

Jens Flottau:        

 Yeah, and I think it's not about actually pursuing an antitrust case or something like that. It felt like, really, towards the end of the year, he really needed to vent again and add pressure on OEMs and just highlight again in front of the global aviation press, which was assembled in Geneva, how serious this issue for the airlines is. And it is. I mean, still, we've got 700 aircraft on the ground because of engine durability issues. Some say it's not 700, it's 1,000. So, it's somewhere in between. It's a big issue.

 mean, we have to put this in perspective. Airlines are now saying they're quite, “happy” is the wrong word, but let's say happy that it's not getting worse, but it's still 700 aircraft that they're missing. So, and the other thing is, Walsh made clear that he thinks this is not resolved by the end of '25, it may not be resolved by 2030, and by resolved meaning they're back on track in terms of production rates, deliveries and so on. So, the airlines are extremely frustrated, that's the bottom line, but there's little they can do.

Sean Broderick:       

 Right. I'm not sure it's ever going to be resolved. If you define the word “resolved” like things were 10 years ago, I'm not sure it's ever going to get back to that simply because the pressure on the supply chain, the pressure on the entire, on everybody who's either building or fixing airplanes, there's so little room for headwinds now that ripples quickly become waves. And I think that might just be sort of the new world order until we have a major event that saps demand, and I think that would be even worse than what we're dealing with now.

Jens Flottau:         

Yeah, I guess a good definition of being resolved would be a better balance between supply and demand, and that we won't see for years. That's the message.

Joe Anselmo:        

 Okay. We're just about out of time, but Dan, I was hoping you'd take us to the finish line. You had the misfortune of issuing your Aviation Week Intelligence Network annual forecast in the middle of the Boeing strike. So, now that the strike's over, what is your projection for Boeing deliveries in 2025? And reiterate what you said Airbus would do.

Dan Williams:    

 Thank you for that. Luckily for our forecast, we don't forecast any black swan events of which the strike was quasi a black swan event. Everybody hoped it wouldn't happen. So, we did some number crunching, and as a result of the strike, the 53-day strike, and also now the extended downturn because production was stopped through December, we now think that Boeing will produce about 80-90 less MAXs between the end of the strike and the end of 2025 than they would've done had the strike not gone ahead.

 Now, you take those numbers and you sprinkle on a few extra 777s and seven 767s, some of which will obviously go to the KC-46 program, and you are probably in the region between the end of the strike and the end of '25 in the region of about 90 to 100 aircraft that Boeing ultimately didn't produce, therefore couldn't deliver. And that will go on a little bit further as we were talking before about with Sean as well in saying that probably rate 38 isn't going to happen until '26. There's a forever behind the curve. So, that's where they're at with that. With Airbus, it's very tricky. Airbus still looking at that 770 mark, but again, it's that keyword that they keep putting in there, around 770, which probably is somewhere in the region from 750 to 770.

Joe Anselmo:           

 Well, we will definitely have all three of you back here on Check 6 early next year to talk about the latest chapter in this saga, whatever it may be. But for now, that is a wrap for today's Check 6.

If you want to hear more about Boeing, be sure to check out this week's MRO Podcast. You'll find Dan on there with the venerable Guy Norris, discussing the 787 program as heavy checks ramp up on the Dreamliner. Thanks to Dan, Jens and Sean for joining us today, and thanks to our producer in London, Guy Ferneyhough.

Finally, if you're listening to us on Apple Podcasts and want to support this podcast, please leave us a star rating or write a review. Better yet, share this episode with a friend or a colleague. Bye for now, and have a great week.

Announcer:

 Aviation Week Network's Supply Chain conference will take place on March 12th and 13th in Southlake, Texas. This event is a premier gathering for professionals in the aerospace and defense industries, focusing on the modernization and optimization of global supply chains. The conference program covers vital topics, assessing OEMs, focusing on critical materials, looking at what's next for the commercial market, strategic sourcing, the outlook for a supply and demand equilibrium, and more. Attendees include senior decision makers, engineers, analysts, and financial professionals, offering networking opportunities with key players across the sector. Save 20% on registration fees with promotion code Check6. That's the number 6 at the end. Find out more and secure your place at events.aviationweek.com.