Category Archives: Boeing

Boeing will require all employees to be vaccinated

Boeing will require all employees to be vaccinated.

From the Seattle Times:

https://www.seattletimes.com/business/boeing-aerospace/despite-wary-labor-unions-and-conservative-opposition-boeing-will-require-all-employees-to-be-vaccinated/

In other news, Boeing released its third quarter deliveries:

The Boeing Company announced major program deliveries across its commercial and defense operations for the third quarter of 2021.

“We made important progress driving stability throughout our operations in the third quarter, as we prioritized safety and quality and worked to deliver for our customers,” the company said.

“Our defense and services teams delivered across several key programs. In our commercial business, we increased 737 MAX deliveries in the quarter, and progressed in safely returning the 737 MAX to service in more international markets.

We are also continuing to complete comprehensive inspections across the 787 production system and within the supply chain, while holding detailed, transparent discussions with the FAA, suppliers and our customers. Production resources remain focused on inspections and rework and the 787 production rate remains lower than five airplanes per month. We will continue to take the time needed to ensure the highest levels of quality. While these efforts continue to impact deliveries, we’re confident this is the right approach to drive stability and first-time quality across our operations and to position the program for the long term as market demand recovers.”

Major program deliveries during the third quarter were as follows:

Major Programs

3rd Quarter
2021

Year-to-Date
2021

Commercial Airplanes Programs

737

66

179

747

2

4

767

11

24

777

6

20

787

14

Total

85

241

Defense, Space & Security Programs

   AH-64 Apache (New)

4

19

   AH-64 Apache (Remanufactured)

11

42

   CH-47 Chinook (New)

6

12

   CH-47 Chinook (Renewed)

1

5

   F-15 Models

3

11

   F/A-18 Models

4

15

   KC-46 Tanker

3

7

   P-8 Models

5

11

   Commercial and Civil Satellites

   Military Satellites

Note: Delivery information is not considered final until quarterly financial results are issued.

Boeing to add 767-300BCF conversion lines at GAMECO to meet strong market demand

Boeing and Guangzhou Aircraft Maintenance Engineering Company Limited (GAMECO) today announced plans to create additional capacity for the 767-300 Boeing Converted Freighter (BCF) to help meet continued strong market demand.

The agreement, revealed by the two companies during a signing ceremony at the China International Aviation & Aerospace Exhibition in Zhuhai, will expand freighter conversion capacity at GAMECO, opening two new 767-300BCF conversion lines next year.

GAMECO will be the first MRO in China to convert the 767-300BCF and the only MRO converting both the 767-300BCF and the 737-800BCF. Earlier this year, GAMECO announced plans to open a third 737-800BCF conversion line.

Boeing forecasts 1,720 freighter conversions will be needed over the next 20 years. Of those, 520 will be widebody conversions with Asia carriers accounting for more than 40 percent of that demand. The 767-300BCF has more than 95 orders and commitments.

GAMECO, established in October 1989 at Guangzhou Baiyun International Airport, is a joint venture between China Southern Airlines Co. Ltd. and Hutchison Whampoa (China) Ltd. from Hong Kong that specializes in aircraft and airborne component maintenance, repair and overhaul. GAMECO provides comprehensive, high-quality and highly efficient services to customers, covering line maintenance, base maintenance, component repair and overhaul, aircraft engineering, and training and technical service of ground-support equipment.

WSJ: US to charge ex-Boeing pilot over 737 MAX crashes

Federal prosecutors are reportedly preparing to charge a former Boeing test pilot for misleading aviation regulators over the safety issues concerning the certification of the 737 MAX which lead to two fatal 737 MAX crashes.

From WSJ:

https://www.wsj.com/articles/former-boeing-pilot-expected-to-face-prosecution-in-737-max-probe-11631845255

New Boeing 787 Dreamliner deliveries may be delayed until late October

From Reuters:

“Boeing’s delivery of 787 Dreamliners will likely remain halted until at least late October as the U.S. Federal Aviation Administration has rejected the company’s recent proposal to inspect them, the Wall Street Journal reported on Saturday.”

Read the full report:

https://www.reuters.com/business/aerospace-defense/boeings-delivery-new-787-dreamliners-may-remain-halted-until-late-oct-wsj-2021-09-04/

Boeing has not commented.

Ethiopian Airlines and Boeing have signed a strategic MOU to position Ethiopia as Africa’s Aviation Hub

Ethiopian Airlines Group and the Boeing company have signed a strategic Memorandum of Understanding (MOU) on positioning Ethiopia as an aviation hub for Africa. Building on the two parties’ seventy years of shared history in aviation, the MOU aims at positioning Ethiopia as Africa’s aviation hub – “Ethiopia for Africa”.

Boeing has recognized Ethiopian as a global aviation leader in the continent. The MOU is indicative of Boeing and Ethiopian Airlines interest to establish a mutually beneficial world class aviation partnership.

To realize their shared vision, Ethiopian and Boeing have agreed to work in partnership in four areas of strategic collaboration namely: Industrial Development, Advanced Aviation Training, Educational Partnership, and Leadership Development in a span of three years. To this effect, joint multidisciplinary teams have been established to implement the strategic partnership and important milestones have already been registered.

Ethiopian and Boeing desire Ethiopian Aviation Academy to be recognized as a global standard for aviation training. Boeing is committed to developing Ethiopia’s manufacturing capability and aftermarket aviation service. Through this MOU, Boeing and Ethiopian will partner to advance capabilities to compete globally. They seek to build a 21st century pipeline for aviation careers in Ethiopia. They will collaborate with highly qualified educational institutions and aviation industry partners to create specialized learning and development programs to meet workforce demands. Boeing and Ethiopian will also work together to develop current and future generations of leaders in Ethiopia for Africa.

Boeing adds ANA and Qatar titles to its 777-9 N779XW, now gone

August 22, 2021 was the ending date of the Boeing Classic golf tournament in Seattle to which a Boeing airplane normally flies over the course to mark the end of the tournament.

This year the aircraft flown was the prototype 777-9, registered as N779XW.
When flown, it had large “Stronger Together” underside titles (above), with ANA titles enlarged on the right side and Qatar on the left (below).
The airline titles have now been removed.
Copyright Photos and report by Joe G. Walker from Seattle.

Boeing reports its second quarter results

Boeing issued this second quarter financial report:

  • Continued progress on global safe return to service of 737 MAX
  • Revenue of $17.0 billion, GAAP earnings per share of $1.00 and core (non-GAAP)* earnings per share of $0.40
  • Operating cash flow of ($0.5) billion; cash and marketable securities of $21.3 billion
  • Commercial Airplanes backlog grew to $285 billion and added 180 net orders

 

Table 1. Summary Financial Results

Second Quarter

First Half

(Dollars in Millions, except per share data)

2021

2020

Change

2021

2020

Change

Revenues

$16,998

$11,807

44%

$32,215

$28,715

12%

GAAP

Earnings/(Loss) From Operations

$1,023

($2,964)

NM

$940

($4,317)

NM

Operating Margin

6.0%

(25.1)%

NM

2.9%

(15.0)%

NM

Net Earnings/(Loss)

$567

($2,395)

NM

$6

($3,036)

NM

Earnings/(Loss) Per Share

$1.00

($4.20)

NM

$0.09

($5.31)

NM

Operating Cash Flow

($483)

($5,280)

NM

($3,870)

($9,582)

NM

Non-GAAP*

Core Operating Earnings/(Loss)

$755

($3,319)

NM

$402

($5,019)

NM

Core Operating Margin

4.4%

(28.1)%

NM

1.2%

(17.5)%

NM

Core Earnings/(Loss) Per Share

$0.40

($4.79)

NM

($1.12)

($6.49)

NM

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”  

The Boeing Company reported second-quarter revenue of $17.0 billion, driven by higher commercial airplanes and services volume. GAAP earnings per share of $1.00 and core earnings per share (non-GAAP)* of $0.40 primarily reflects higher commercial volume and lower period costs (Table 1). Boeing recorded operating cash flow of ($0.5) billion.

“We continued to make important progress in the second quarter as we focus on driving stability across our operations and transforming our business for the future,” said Boeing President and Chief Executive Officer David Calhoun. “While our commercial market environment is improving, we’re closely monitoring COVID-19 case rates, vaccine distribution and global trade as key indicators for our industry’s stability. As we continue to position for a robust recovery, we remain committed to safety and quality, while investing in our people, products and technology. I am proud of our team’s resilience and commitment as we work to rebuild trust, improve our performance and deliver for our commercial, defense, space and services customers.”

As part of Boeing’s ongoing focus on global sustainability, the company published its first integrated Sustainability Report in July. “This was an important step in our continued efforts to reinforce our Environmental, Social, and Governance principles,” Calhoun said.

Table 2. Cash Flow

Second Quarter

First Half

(Millions)

2021

2020

2021

2020

Operating Cash Flow

($483)

($5,280)

($3,870)

($9,582)

Less Additions to Property, Plant & Equipment

($222)

($348)

($513)

($776)

Free Cash Flow*

($705)

($5,628)

($4,383)

($10,358)

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

Operating cash flow improved to ($0.5) billion in the quarter, driven by higher commercial deliveries, higher order receipts, and lower expenditures (Table 2).

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q2 21

Q1 21

Cash

$8.2

$7.0

Marketable Securities1

$13.1

$14.9

Total

$21.3

$21.9

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$62.1

$62.0

Boeing Capital, including intercompany loans

$1.5

$1.6

Total Consolidated Debt

$63.6

$63.6

1 Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities decreased to $21.3 billion, compared to $21.9 billion at the beginning of the quarter, primarily driven by operating cash outflows (Table 3). The company has access to credit facilities of $14.8 billion which remain undrawn.

Total company backlog at quarter-end was $363 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

Second Quarter

First Half

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Commercial Airplanes Deliveries

79

20

295%

156

70

123%

Revenues

$6,015

$1,633

268%

$10,284

$7,838

31%

Loss from Operations

($472)

($2,762)

NM

($1,328)

($4,830)

NM

Operating Margin

(7.8)%

(169.1)%

NM

(12.9)%

(61.6)%

NM

Commercial Airplanes second-quarter revenue increased to $6.0 billion primarily driven by higher commercial airplane deliveries. Second-quarter operating margin improved to (7.8) percent, primarily due to lower period costs as well as higher delivery volume (Table 4).

Boeing is continuing to make progress on the global safe return to service of the 737 MAX. Since the FAA’s approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 130 737 MAX aircraft and airlines have returned more than 190 previously grounded airplanes to service. 30 airlines are now operating the 737 MAX, safely flying nearly 95,000 revenue flights totaling more than 218,000 flight hours (as of July 25, 2021). The 737 program is currently producing at a rate of approximately 16 per month and continues to expect to gradually increase production to 31 per month in early 2022 with further gradual increases to correspond with market demand. The company will continue to assess the production rate plan as it monitors the market environment and engages in customer discussions.

As Boeing has previously shared, the company is conducting inspections and rework and continues to engage in detailed discussions with the FAA on verification methodology for 787. In connection with these efforts, the company announced earlier this month that it has identified additional rework that will be required on undelivered 787s. Based on our assessment of the time required to complete this work, Boeing is reprioritizing production resources for a few weeks to support the inspection and rework. As that work is performed, the 787 production rate will temporarily be lower than five per month and will gradually return to that rate. Boeing expects to deliver fewer than half of the 787s currently in inventory this year.

Commercial Airplanes secured orders for 200 737 aircraft for United Airlines, 34 737 aircraft for Southwest Airlines, and a total of 31 freighter aircraft. Commercial Airplanes delivered 79 airplanes during the quarter and backlog included over 4,100 airplanes valued at $285 billion.

Defense, Space & Security

Table 5. Defense, Space & Security

Second Quarter

First Half

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Revenues

$6,876

$6,588

4%

$14,061

$12,630

11%

Earnings from Operations

$958

$600

60%

$1,363

$409

233%

Operating Margin

13.9%

9.1%

53%

9.7%

3.2%

203%

Defense, Space & Security second-quarter revenue increased to $6.9 billion driven by higher KC-46A Tanker and P-8A Poseidon volume. Second-quarter operating margin increased to 13.9 percent, primarily reflecting the absence of a charge on the KC-46A Tanker program as compared to second quarter 2020, as well as a favorable non-US contract adjustment.

During the quarter, Defense, Space & Security secured an award for 14 H-47 extended-range Chinook helicopters for the U.K. Royal Air Force and signed an agreement with the German Ministry of Defense for five P-8A Poseidon aircraft. Defense, Space & Security conducted the first MQ-25 unmanned aerial refueling of a F/A-18 Super Hornet and successfully joined T-7A Red Hawk front and aft sections in under 30 minutes enabled by digital design. Also, the first Core Stage for NASA’s Space Launch System began stacking with other Artemis I elements.

Backlog at Defense, Space & Security was $59 billion, of which 32 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global Services

Second Quarter

First Half

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Revenues

$4,067

$3,488

17%

$7,816

$8,116

(4)%

Earnings/(Loss) from Operations

$531

($672)

NM

$972

$36

NM

Operating Margin

13.1%

(19.3)%

NM

12.4%

0.4%

NM

Global Services second-quarter revenue increased to $4.1 billion and second-quarter operating margin increased to 13.1 percent primarily driven by higher commercial services volume. Operating margin was also favorably impacted by lower asset impairments, lower severance costs, and mix of products and services.

During the quarter, Global Services signed an expanded parts agreement with Turkish Technic and announced a partnership to expand capacity for 737-800 Boeing Converted Freighters. Global Services was also selected to provide P-8A training and sustainment as well as C-17 training to the U.K. Royal Air Force, and was awarded a modification for KC-46A interim contract support for the U.S. Air Force.

Additional Financial Information

Table 7. Additional Financial Information

Second Quarter

First Half

(Dollars in Millions)

2021

2020

2021

2020

Revenues

Boeing Capital

$78

$69

$138

$134

Unallocated items, eliminations and other

($38)

$29

($84)

($3)

Earnings/(Loss) from Operations

Boeing Capital

$36

($7)

$57

$17

FAS/CAS service cost adjustment

$268

$355

$538

$702

Other unallocated items and eliminations

($298)

($478)

($662)

($651)

Other income, net

$199

$94

$389

$206

Interest and debt expense

($673)

($553)

($1,352)

($815)

Effective tax rate

(3.3)%

30.0%

126.1%

38.4%

At quarter-end, Boeing Capital’s net portfolio balance was $1.9 billion. The change in revenue from other unallocated items and eliminations was primarily due to the timing of allocations. The loss from other unallocated items and eliminations was impacted by lower deferred compensation expense as compared to the second quarter of 2020. Interest and debt expense increased due to higher debt balances. The second quarter 2021 effective tax rate primarily reflects benefits from a lower valuation allowance.

Top Copyright Photo: Joe G. Walker. The Boeing test fleet at Boeing Field in Seattle.