Tag Archives: Boeing

Boeing statement on MAX 8 Operations Manual Bulletin

Delivered August 13, 2018, crashed into the Java Sea on October 29, 2018

Boeing issued this statement:

Boeing is providing support and technical assistance to the Indonesian National Transportation Safety Committee and other government authorities responsible for the investigation into Lion Air flight 610.

 

The Indonesian National Transportation Safety Committee has indicated that Lion Air flight 610 experienced erroneous input from one of its AOA (Angle of Attack) sensors. 

 

Whenever appropriate, Boeing, as part of its usual processes, issues bulletins or makes recommendations regarding the operation of its aircraft. 

 

On November 6, 2018, Boeing issued an Operations Manual Bulletin (OMB) directing operators to existing flight crew procedures to address circumstances where there is erroneous input from an AOA sensor. 

 

The investigation into Lion Air flight 610 is ongoing and Boeing continues to cooperate fully and provide technical assistance at the request and under the direction of government authorities investigating the accident.

Top Copyright Photo: Lion Air (PT Lion Mentari Airlines) Boeing 737-8 MAX 8 PK-LQP (msn 43000) BFI (James Helbock). Image: 944190.

Lion Air aircraft slide show:

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Boeing and Flightdocs enter exclusive partnership

Boeing and Flightdocs have entered into a multi-year agreement to exclusively market and sell the Flightdocs Enterprise platform, a full-service maintenance, compliance and inventory management solution for the business and general aviation market.

The companies have also entered into a memorandum of understanding (MOU) to integrate the Flightdocs Enterprise platform with Boeing Global Services’ portfolio of companies, products and services including Aviall, Inventory Locator Services, and Jeppesen.

“We are excited to partner with Boeing, the recognized leader in aviation worldwide,” stated Rick Heine, CEO of Flightdocs. “Together, we are working towards delivering incredible, integrated tools that will transform business and general aviation operations by offering efficiency and cost savings to operators of all brands and aircraft types across the globe.”

This partnership strengthens Boeing Global Services’ broad portfolio of products of services with Flightdocs’ industry-leading, cloud-based aviation maintenance, compliance and inventory management Software as a Service (SaaS) solution.

“Our exclusive agreement with Flightdocs will deliver end-to-end, industry-first solutions to business and general aviation operators,” said William Ampofo, Vice President, Business & General Aviation, Boeing Global Services. “We look forward to exploring future expansion of our partnership as we collaborate on innovative solutions for this market.”

Boeing and Flightdocs will exhibit at the 2018 National Business Aviation Association Business Aviation Convention & Exhibition (NBAA-BACE) being held at Orlando’s Orange County Convention Center October 16-18.

Operating as one of Boeing’s three business units, Global Services is headquartered in the Dallas area.

Flightdocs provides mission-critical cloud-based maintenance, compliance and inventory management Software as a Service (SaaS) solutions to the aviation industry. The company’s solutions assist aircraft owners and operators in tracking and managing the maintenance and airworthiness of their aircraft, comply with rigorous safety rules and regulatory guidelines, reduce costs, mitigate risks and minimize asset downtime. Flightdocs’ customers include Fortune 1000 corporate flight departments, air charters, air medical providers, fractional aircraft operators, government agencies, and regional carriers. Headquartered in Bonita Springs, Florida, Flightdocs has been serving the aviation industry for over 15 years.

Boeing 747 celebrates 50 Years

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Boeing announced on social media:

On September 30, 1968, the first 747 rolled out of the Everett assembly building before representatives of the 26 airlines that had ordered the airplane.

Thank you to our exceptional 747/767 teammates who are continuing the legacy of producing this incredible airplane!

Photo: Boeing.

Boeing forecasts greatest demand for pilots, technicians, cabin crew in Asia Pacific Region

Boeing reports that the Asia Pacific region will have the greatest global demand for new civil aviation personnel over the next 20 years. The region is projected to account for 33 percent of the global need for pilots, 34 percent for technicians and 36 percent for cabin crew.

The 2018 Boeing Pilot and Technician Outlook is an industry forecast of new aviation personnel demand. It is closely tied to projections for new airplane deliveries around the globe. As with personnel demand, the Asia Pacific region leads demand for new commercial airplane deliveries over the next 20 years. Forty percent of all new passenger airplane deliveries in the next 20 years will be delivered to airlines in the Asia Pacific region.

According to the outlook:

  • The 20-year demand for new commercial sector pilots in the region remains strong at 240,000. While demand decreased five percent, this was driven by regional trends that indicate a peak in pilot retirements in the first decade of the forecast and a softening of replacement demand in the later years, due to a younger generation entering the pilot ranks long before reaching mandatory retirement age.
  • New commercial technician demand decreased five percent to 242,000. This is due to advancements in product development on the 737 MAX, which have resulted in increased maintenance efficiencies. Overall, maintenance hours required over the life of the airplane will be reduced.
  • New commercial cabin crew demand increased three percent to 317,000 due to anticipated fleet mix, cabin configuration and regulatory requirements.

For the first time, the outlook included the helicopter and business aviation markets. The inclusion of these sectors increases the region’s demand to 261,000 pilots, 257,000 technicians and 321,000 cabin crew.

Leading the region in projected demand for new pilots, technicians and cabin crew:

  • China: 128,500 pilots; 126,750 technicians; 147,250 cabin crew
  • Southeast Asia: 48,500 pilots; 54,000 technicians; 76,250 cabin crew
  • South Asia: 42,750 pilots; 35,000 technicians; 43,250 cabin crew

“Strong demand for pilots in the region continues, and we expect that this will continue for the next several years,” said Keith Cooper, vice president of Training & Professional Services for Boeing Global Services. “Through our pilot training solutions, including the Pilot Development Program, we are helping to ensure a pipeline of pilots is ready to meet the industry’s demand.”

Boeing’s Pilot Development program is an accelerated training program intended to guide pilots from early stage ab-initio training through type rating as a first officer.

For more information about the Pilot & Technician Outlook, please visit: http://www.boeing.com/commercial/market.

For the 2018 Business Environment Update, please visit: http://www.boeing.com/commercial/market/boeing-market-insight.

Qatar Airways welcomes its 100th Boeing aircraft and 70th 777

Qatar Airways made this announcement:

It’s been a wonderful journey with a successful partner, and we are looking for many more to come; for more miles to fly, and more places to go. We welcomed our 100th Boeing aircraft at our state of the art hub in Doha.

In other news, Qatar Airways has announced that it is the Prestige Partner and Official Airline of the 18th Asian Games Jakarta Palembang 2018, taking place in Jakarta and Palembang, Indonesia, from August 18 until September 2, 2018. The highly-anticipated sporting event will bring athletes from 45 participating nations to Jakarta and Palembang to compete for the coveted prizes.

Qatar Airways slide show:

https://airlinersgallery.smugmug.com/frame/slideshow?key=5NJqVC&autoStart=1&captions=1&navigation=1&playButton=1&randomize=1&speed=3&transition=fade&transitionSpeed=2

Boeing reports its second quarter results

  • Revenue increased to $24.3 billion reflecting 194 commercial deliveries and higher defense and services volume
  • GAAP EPS of $3.73 and core EPS (non-GAAP)* of $3.33 on solid execution across the company
  • Strong operating cash flow of $4.7 billion; repurchased 8.6 million shares for $3.0 billion
  • Backlog grew to $488 billion, including nearly 5,900 commercial airplanes
  • Cash and marketable securities of $9.8 billion provide strong liquidity
  • Raised revenue and updated segment margin guidance

Table 1. Summary Financial Results

Second Quarter

First Half

(Dollars in Millions, except per share data)

2018

2017

Change

2018

2017

Change

Revenues

$24,258

$23,051

5%

$47,640

$45,012

6%

GAAP

Earnings From Operations

$2,710

$2,530

7%

$5,585

$4,736

18%

Operating Margin

11.2%

11.0%

0.2 Pts

11.7%

10.5%

1.2 Pts

Net Earnings

$2,196

$1,749

26%

$4,673

$3,328

40%

Earnings Per Share

$3.73

$2.87

30%

$7.88

$5.41

46%

Operating Cash Flow

$4,680

$4,949

(5)%

$7,816

$7,047

11%

Non-GAAP*

Core Operating Earnings

$2,393

$2,173

10%

$4,903

$4,033

22%

Core Operating Margin

9.9%

9.4%

0.5 Pts

10.3%

9.0%

1.3 Pts

Core Earnings Per Share

$3.33

$2.49

34%

$6.97

$4.67

49%

* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, “Non-GAAP Measures Disclosures.”     

The Boeing Company reported its second quarter revenue of $24.3 billion reflecting higher commercial deliveries and mix, defense volume and services growth (Table 1). GAAP earnings per share increased to $3.73 and core earnings per share (non-GAAP)* increased to $3.33 reflecting solid execution across the company. Results also reflect a charge related to the previously announced Spirit litigation outcome ($0.21 per share). Boeing delivered strong operating cash flow of $4.7 billion, repurchased $3.0 billion of shares, and paid $1.0 billion of dividends.

The company’s revenue guidance increased $1 billion to between $97.0 and $99.0 billion, driven by defense volume and services growth. Commercial Airplanes margin guidance is increased to greater than 11.5% on strong performance and Defense, Space & Security margin guidance was adjusted to reflect the impact of cost growth on the KC-46 Tanker program.

“We are seeing the results of our One Boeing approach as our teams work together across the Boeing enterprise to deliver value to our customers and grow our business.  In the quarter, we generated improved revenue and earnings, delivered strong cash and captured $27 billion in new orders,” said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg.

“We celebrated the first anniversary of the launch of Boeing Global Services and the one-year revenue service anniversary of the 737 MAX. We booked 239 net commercial airplane orders in the quarter, which included 59 787s – further demonstrating the value this airplane family brings to our customers. Solid progress continued on the 777X program with the first two test aircraft currently being built in the factory. We finalized the production contract for 28 F/A-18 Super Hornets for Kuwait, completed production of the 100th P-8 Poseidon, and conducted two successful tests for the U.S. Air Force’s Minuteman III. Our services business delivered the first 737 Boeing Converted Freighter and secured performance based logistics contracts to support rotorcraft in the Netherlands. Additionally, customers continued to recognize the value of our digital solutions with Etihad Airways signing a contract to implement our crew management solutions.”

“Continued services growth, increasing defense volume and strong performance of our commercial business, as well as our positive market outlook, give us the confidence to raise our revenue and Commercial Airplanes margin guidance for the year. We remain focused on execution, driving innovation, continuing to develop and maintain the best team and talent in the industry, and increasing value for our customers, shareholders, employees and other stakeholders.”

Table 2. Cash Flow

Second Quarter

First Half

(Millions)

2018

2017

2018

2017

Operating Cash Flow

$4,680

$4,949

$7,816

$7,047

Less Additions to Property, Plant & Equipment

($376)

($439)

($770)

($905)

Free Cash Flow*

$4,304

$4,510

$7,046

$6,142

* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, “Non-GAAP Measures Disclosures.”

Operating cash flow in the quarter of $4.7 billion reflects planned higher commercial airplane production rates, strong operating performance, and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 8.6 million shares for $3.0 billion, leaving $12.0 billion remaining under the current repurchase authorization which is expected to be completed over approximately the next 18 to 24 months. The company also paid $1.0 billion in dividends in the quarter, reflecting a 20 percent increase in dividends per share compared to the same period of the prior year.

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q2 18

Q1 18

Cash

$8.1

$9.2

Marketable Securities1

$1.7

$0.7

Total

$9.8

$9.9

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$9.6

$10.0

Boeing Capital, including intercompany loans

$2.5

$2.5

Total Consolidated Debt

$12.1

$12.5

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

Cash and investments in marketable securities totaled $9.8 billion, compared to $9.9 billion at the beginning of the quarter (Table 3). Debt was $12.1 billion, down from $12.5 billion at the beginning of the quarter due to repayment of debt.

Total company backlog at quarter-end was $488 billion, up from $486 billion at the beginning of the quarter, and included net orders for the quarter of $27 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

Second Quarter

First Half

(Dollars in Millions)

2018

2017

Change

2018

2017

Change

Commercial Airplanes Deliveries

194

183

6%

378

352

7%

Revenues

$14,481

$14,280

1%

$28,133

$27,233

3%

Earnings from Operations

$1,644

$1,282

28%

$3,152

$2,152

46%

Operating Margin

11.4%

9.0%

2.4 Pts

11.2%

7.9%

3.3 Pts

Commercial Airplanes second-quarter revenue was $14.5 billion reflecting higher deliveries and mix (Table 4). Second-quarter operating margin increased to 11.4 percent, reflecting strong operating performance on production programs, including a higher 787 margin, partially offset by a charge of $307 million related to cost growth on the KC-46 Tanker program. This cost growth was primarily due to higher estimated costs of incorporating changes into six flight test and two early build aircraft as well as additional costs as we progress through late stage testing and the certification process. We continue to make steady progress towards final certification for KC-46 Tanker and recently completed all flight tests required to deliver the first aircraft, which is expected to be in October this year as now agreed upon with the U.S. Air Force.

During the quarter, Commercial Airplanes delivered 194 airplanes, including delivery of the first 737 MAX airplanes to Jet Airways, Ethiopian Airlines, and Xiamen Airlines. The 737 MAX program celebrated the one year anniversary of entering revenue flight service and continues to be well received in the market with over 4,600 orders since its launch. The 777X program remains on track for delivery in 2020 as the first two test airplanes moved into the low-rate initial production line.

Commercial Airplanes booked 239 net orders during the quarter, including 91 widebodies. Backlog remains robust with nearly 5,900 airplanes valued at $416 billion.

Defense, Space & Security

Table 5. Defense, Space & Security

Second Quarter

First Half

(Dollars in Millions)

2018

2017

Change

2018

2017

Change

Revenues

$5,593

$5,142

9%

$11,355

$10,254

11%

Earnings from Operations

$521

$614

(15)%

$1,170

$1,163

1%

Operating Margin

9.3%

11.9%

(2.6) Pts

10.3%

11.3%

(1.0) Pts

Defense, Space & Security second-quarter revenue increased to $5.6 billion driven by F/A-18 and weapons volume (Table 5). Second-quarter operating margin was 9.3 percent, primarily reflecting KC-46 Tanker cost growth of $111 million, partially offset by solid execution and favorable mix.

During the quarter, Defense, Space & Security finalized a production contract for 28 F/A-18 Super Hornets for Kuwait, received contracts for 18 additional F/A-18 Super Hornets and 3 P-8 Poseidon aircraft for the U.S Navy, and was awarded a multi-year contract for 58 V-22 Osprey aircraft. Significant milestones during the quarter included induction of the first F/A-18 aircraft into the Service Life Modification program, two successful tests for the U.S. Air Force’s Minuteman III, and the completion of the 100th P-8 Poseidon aircraft. On the commercial satellites side, we successfully completed O3b mPOWER preliminary design review with SES.

Backlog at Defense, Space & Security was $52 billion, of which 35 percent represents orders from international customers.

Global Services

Table 6. Global Services

Second Quarter

First Half

(Dollars in Millions)

2018

2017

Change

2018

2017

Change

Revenues

$4,090

$3,552

15%

$8,033

$7,205

11%

Earnings from Operations

$603

$569

6%

$1,247

$1,192

5%

Operating Margin

14.7%

16.0%

(1.3) Pts

15.5%

16.5%

(1.0) Pts

Global Services second-quarter revenue increased to $4.1 billion, reflecting growth across the portfolio (Table 6). Second-quarter operating margin was 14.7 percent reflecting product and services mix.

During the quarter, Global Services was awarded an F/A-18 depot maintenance contract for the U.S. Navy and Marine Corps and secured rotorcraft performance based logistics contracts for the Netherlands. Global Services also contracted to implement crew management solutions at Etihad Airways and captured a Global Fleet Care contract for Primera Air’s 737 fleet. Global Services also entered into an agreement to acquire KLX Aerospace which will broaden our range of offerings and increase customer value, and agreed to a strategic partnership with Safran for auxiliary power units as we strengthen Boeing’s vertical capabilities and expand our services portfolio.

Additional Financial Information

Table 7. Additional Financial Information

Second Quarter

First Half

(Dollars in Millions)

2018

2017

2018

2017

Revenues

Boeing Capital

$72

$72

$137

$164

Unallocated items, eliminations and other

$22

$5

($18)

$156

Earnings from Operations

Boeing Capital

$24

$25

$44

$64

FAS/CAS service cost adjustment

$317

$357

$682

$703

Other unallocated items and eliminations

($399)

($317)

($710)

($538)

Other (loss)/income, net

($15)

$25

$51

$51

Interest and debt expense

($109)

($93)

($211)

($180)

Effective tax rate

15.1%

29.0%

13.9%

27.8%

At quarter-end, Boeing Capital’s net portfolio balance was $3.0 billion. Total pension expense for the second quarter was $70 million, down from $94 million in the same period of the prior year. The change in earnings from other unallocated items and eliminations is primarily due to the previously announced litigation charge. The effective tax rate for the second quarter decreased from the same period in the prior year primarily due to the reduction of the federal tax rate to 21%.

Outlook

The Company’s 2018 guidance is updated below (Table 8).

Table 8. 2018 Financial Outlook

Current

Prior

(Dollars in Billions, except per share data)

Guidance

Guidance

The Boeing Company

Revenue

$97.0 – 99.0

$96.0 – 98.0

GAAP Earnings Per Share

$16.40 – 16.60

$16.40 – 16.60

Core Earnings Per Share*

$14.30 – 14.50

$14.30 – 14.50

Operating Cash Flow

$15.0 – 15.5

$15.0 – 15.5

Commercial Airplanes

Deliveries

810 – 815

810 – 815

Revenue

$59.5 – 60.5

$59.5 – 60.5

Operating Margin

>11.5%

~11.5%

Defense, Space & Security

Revenue

$22.0 – 23.0

$21.5 – 22.5

Operating Margin

10.0 – 10.5%

~11.0%

Global Services

      Revenue

$15.5 – 16.0

$15.0 – 15.5

      Operating Margin

~15.5%

~15.5%

Boeing Capital

Portfolio Size

Stable

Stable

Revenue

~$0.2

~$0.2

Pre-Tax Earnings

~$0.07

~$0.05

Research & Development

~$3.7

~$3.7

Capital Expenditures

~$2.2

~$2.2

Pension Expense 1

~$0.1

~$0.1

Effective Tax Rate

~16.0%

~16.0%

* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, “Non-GAAP Measures Disclosures.”

1 Approximately $1.4 billion of pension expense is expected to be allocated to the business segments

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per shareexcluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings/per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on pages 14-15.

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow without capital expenditures for property, plant and equipment additions. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

 

Boeing warns of a pilot shortage

Boeing has made this announcement:

Boeing today released its 2018 Pilot & Technician Outlook, projecting demand for 790,000 pilots over the next 20 years. This represents double the current workforce and the most significant demand in the outlook’s nine-year history.

The demand is being driven by an anticipated doubling of the global commercial airplane fleet — as reported in Boeing’s Commercial Market Outlook — as well as record-high air travel demand and a tightening labor supply. This year’s outlook also includes data from the business aviation and civil helicopter sectors for the first time.

“Despite strong global air traffic growth, the aviation industry continues to face a pilot labor supply challenge, raising concern about the existence of a global pilot shortage in the near-term,” said Keith Cooper, vice president of Training & Professional Services, Boeing Global Services. “An emphasis on developing the next generation of pilots is key to help mitigate this. With a network of training campuses and relationships with flight schools around the globe, Boeing partners with customers, governments and educational institutions to help ensure the market is ready to meet this significant pilot demand.”

Boeing offers the Pilot Development Program – an accelerated training program that guides future pilots from early stage ab-initio training through type rating as a first officer – to help operators meet their growing pilot needs. Boeing also helps operators improve crew efficiency with tools that optimize resources and minimize disruption.

Despite the commercial pilot demand forecast holding nearly steady, maintenance technician demand decreased slightly from 648,000 to 622,000, primarily due to longer maintenance intervals for new aircraft. Collectively, the business aviation and civil helicopter sectors will demand an additional 155,000 pilots and 132,000 technicians.

Demand for commercial cabin crew increased slightly from 839,000 to 858,000, due to changes in fleet mix, regulatory requirements, denser seat configurations and multi-cabin configurations that offer more personalized service. In addition, 32,000 new cabin crew will be required to support business aviation.

For more information about the Pilot & Technician Outlook, please visit: http://www.boeing.com/commercial/market

For the 2018 Business Environment Update, please visit: http://www.boeing.com/commercial/market/boeing-market-insight

Photo: Boeing.