Boeing's Good News, Bad News Week
Boeing landed a major order from long-time customer WestJet even as U.S. regulators indicated they are unlikely to certify the last two models of the 737 Max, the -7 and -10, before a critical year-end deadline. Welcome to the latest in the Max saga.
The Federal Aviation Administration took — for understandable reasons — a slow and deliberate approach to, first, re-certifying the 737 Max models that were already flying when the plane was grounded in 2019. And, since those returned to the sky in late 2020, certifying the two remaining variants. The latter two models, the 737-7 and -10, remain under review by the FAA even as they face a Congressional requirement that they be certified by the end of 2022 or fall subject to newer, more stringent cockpit safety rules, including the addition of the Engine Indicating and Crew Alerting System (EICAS).
Arlington, Virginia-based Boeing has hundreds of orders for the two Max models. At the end of June, there were at least 270 orders for the 737-7 from Allegiant Air, Southwest Airlines, and others. And more than 350 for the 737-10 from the likes of Gol, United Airlines, and Virgin Australia.
Boeing, for its part, appears to be playing the hand it has being the U.S.’ largest industrial exporter in maneuvering around that year-end requirement. The WestJet order for up to 64 737-10s last week is the latest in recent months that also includes Delta Air Lines’ deal for up to 130 aircraft in July, and International Airlines Group in May. All of these deals place pressure on at least Congress to move the certification goalpost given the increasing unlikelihood that the FAA will sign off on either model by December 31.
“I would urge everyone — Congress, the FAA — that that commonality is the bellwether for us,” said Mahendra Nair, senior vice president of fleet at Delta, in July in response to questions over certification. His reference to commonality referred to the design changes that would be required if Boeing’s waiver from more stringent safety rules for the 737-10 lapsed and major changes to the cockpit — and pilot training — were required compared to other 737 models.
Boeing’s gambit appears to be working, at least to a degree. While the FAA reaffirmed that its certification process would not be subject to “arbitrary calendar” dates, as the regulator’s executive director for aviation safety Lirio Liu put it in a letter to Boeing on September 19, Congress appears more amenable. Senator Roger Wicker (R-Miss.) filed an amendment Thursday to a defense bill that would extend Boeing’s waiver to September 30, 2024, The Seattle Times reported.
Wicker submitted a number of amendments to the National Defense Authorization Act on September 29, according to Congressional records. However, the text of those amendments were not immediately available.
The moves and countermoves come after Liu’s letter all but quashed the possibility of certifying the 737-7 and -10 by the end of the year. As of September 19, Boeing had yet to submit all of the requested system assessments to the FAA that the regulator needed in order to sign off on the aircraft; only 10 percent had been accepted and another 70 percent were in review. He added that all of the assessments were needed by mid-September if a year-end deadline was to be considered.
“There are a lot of resources that are working very hard to get the [737]-7 and the -10 certified, answering the questions from the regulators,” Boeing Chief Financial Officer Brian West said at an investor event on September 15. “There’s good constructive collaboration with the FAA.”
He added that, in terms of the imminent safety waiver expiration, it was “top of the list of things that we’re trying to mitigate risk around.”
Airbus Sees Early 2023 Global Traffic Recovery
Airbus updated the investor community on its business as the global airline industry recovers earlier in September. Based on current projections, the company sees worldwide traffic, measured in RPKs, returning to pre-pandemic levels as early as the first quarter of 2023. A full recovery may not occur until the final quarter of 2024 under a worst case scenario. This year, Airbus hopes to deliver 700 commercial jets, mostly A320-family aircraft but also A220s, A330s, and A350s. Through August, it had delivered 382 planes.
A central product initiative is developing the, already delayed, A321XLR, which will be capable of longer-range international missions. Another important program is its A350 Freighter. Also, Airbus believes a larger version of the A220 — an A220-500 — “makes a lot of sense for us at a certain point in time.” (Air France for one really wants one). But CEO Guillaume Faury added: “We don’t want to be right too early on that one. We still have a lot of work to do on the 220 before we get there.”
Another big topic was sustainability, with Airbus expressing confidence that hydrogen power can one day be a solution to carbon-free shorthaul flying, if not longhaul flying. Separately, executives bemoaned the supply chain challenges bedeviling aircraft production. Airbus said its commercial division alone uses parts — roughly 3 million per plane — from 3,200 different suppliers. Faury called managing the supply chain “the biggest challenge for the industry.” Looking far into the future — something aircraft manufacturers can’t avoid — Airbus sees the need for a new generation of commercial airplanes around the second half of the 2030s or early 2040s.
Fleet Briefs
- Eviation’s all-electric Alice made an eight-minute maiden sortie on September 27. The nine-seat plane is among the first electric passenger aircraft to take to the skies amid an industry-wide push to decarbonize the industry by the middle of the century. While significant, the first flight is just the latest in a lengthy process to certification and eventual commercial passenger flights with the plane. Reports indicate the batteries on the Alice currently lack the energy density needed to operate scheduled flights of 150-250 miles. Cape Air and DHL Express have commitments for the Alice.
- Taiwan’s China Airlines finalized an order for up to 24 Boeing 787s last week. The deal, which was first unveiled in August, includes 16 firm 787-9s with the balance as options. The aircraft will replace aging Airbus A330-300s in China Airlines’ fleet, according to Reuters. The carrier operated 22 A330s at the end of May, and plans to fly 21 at the end of the year.
- China’s state-owned COMAC won certification for its C919 last week, an aircraft designed to compete with Boeing’s 737 and the Airbus A320. It’s less technologically sophisticated, though, and relies on critical parts from western manufacturers whose governments are increasingly wary of supplying Chinese companies with technology. In any case, China Eastern will soon start receiving its first C919s now that the plane is certified to fly within China. COMAC’s ability to compete with Boeing and Airbus in major markets outside China still appears a distant prospect.