The Boeing CompanyBA
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Boeing's Q2 revenue rose 8% and adjusted free cash flow swung to $631M from -$200M, driving shares back above $200 despite lower August deliveries.
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United StatesAirbus Delivers 72 Aircraft in September, Recovering from Delays, but New Quality Issue Emerges on A330
Airbus delivered 72 aircraft in September, a figure nearly matching the 73 delivered in the same month a year earlier, according to industry sources. If confirmed, that would exceed the mid-to-high 60s analysts had expected and top Jefferies' estimate of 68. The unexpected recovery comes amid concerns over recent manufacturing defects involving A321neo parts and system-wide delays caused by shortages of components such as engines. Meeting the year-end target of about 870 aircraft will require record deliveries in the fourth quarter, and Lars Wagner, CEO of the commercial aircraft division, said this week he is "very confident." Meanwhile, Airbus disclosed that it has advised airlines to check A330 aircraft for foreign objects after tools were found in the horizontal tail of planes earlier this year, which has delayed deliveries. The recommendation covers aircraft delivered between January 2021 and July this year, amounting to 160 planes, including 15 MRTT military aerial refueling and transport aircraft, according to Cirium data.
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Aerospace & Aviation › Airframe OEMs Supply
AIR.PA · Demand · Positive Airbus delivered 72 aircraft in September, beating analyst expectations and supporting its ~870 year-end target.
AIR.PA · Supply · Negative Airbus advised airlines to inspect 160 A330s for foreign objects (tools found in tail), delaying deliveries.
United States▲2
FAA Clears Boeing 737 MAX Software Glitch as Not a Safety Issue
The Federal Aviation Administration has determined that a newly identified software glitch in the Boeing 737 MAX does not present a flight-safety concern, according to The Wall Street Journal. The agency convened its Corrective Action Review Board on Friday to assess whether the issue constituted an unsafe condition requiring immediate action. The FAA said the board reached its determination because pilots retain full control of the aircraft and the indications to the flight crew are clear and unambiguous, adding that it will consider appropriate action if new information emerges. The software problem had raised concerns among some aviation industry officials about potential safety implications when 737 MAX aircraft are landing under certain circumstances. Boeing shares traded 1.5% higher following the report.
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Aerospace & Aviation › Avionics & Aircraft Systems ▲Regulation
Aerospace & Aviation › Airframe OEMs ▲Regulation
BA · Regulation · Positive FAA determined the 737 MAX software glitch is not a safety issue, removing a regulatory overhang on the aircraft.
United States▲9impact 4
Boeing Wins U.S. Navy F/A-XX Sixth-Generation Fighter Contract
Boeing has been awarded the U.S. Navy's F/A-XX sixth-generation fighter contract, a multi billion dollar program. The F/A-XX is planned to replace the Navy's current F/A-18 Super Hornet fleet and extend carrier air wing reach. The award follows Boeing's earlier win on the U.S. Air Force's F-47 next generation fighter, consolidating its role in future combat aircraft. The win strengthens the part of the Boeing thesis that leans on advanced technology and a diversified backlog across commercial jets and defense, helping offset some reliance on the loss making commercial division by anchoring long duration military work alongside programs like the F-47 and P 8A. The award also magnifies concerns analysts already highlight around execution risk, supply chain complexity and high debt, since another classified, multi billion dollar fighter program increases capital and delivery commitments.
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Defense & Geopolitical Fragmentation › Defense Primes — United States ▲Demand
Aerospace & Aviation › Airframe OEMs ▲Demand
BA · Capital · Negative The award magnifies execution risk, supply chain complexity and high debt by adding another classified multi-billion-dollar fighter program with heavy capital and delivery commitments.
BA · Demand · Positive Boeing awarded the U.S. Navy's multi-billion-dollar F/A-XX sixth-generation fighter contract, adding a major defense program to its backlog.
Thailand▲2
PM discusses Airbus support for investment and aerospace technology transfer
Prime Minister and Interior Minister Anutin Charnvirakul held talks with Wouter van Wersch, Executive Vice President for International Affairs at Airbus, and Bert Porteman, a representative of Airbus Thailand, on ways to upgrade and expand cooperation between Thailand and Airbus in the aviation industry, space technology, human resource development, and clean energy. The Prime Minister affirmed the policy of promoting the aviation industry and future industries, and asked Airbus to consider broadening cooperation to cover more areas by building on the cooperation models the company has with other countries and extending them to Thailand. On clean energy, the Prime Minister proposed that Airbus promote the use of sustainable aviation fuel, or SAF, produced in Thailand, using Thai raw materials and agricultural output as part of the production chain. In addition, Airbus plans to establish a Center of Excellence in Thailand as a hub for developing knowledge, technology, and personnel, linking Airbus's global network to Thailand. The Prime Minister also proposed expanding cooperation in space technology and security, building on existing cooperation with the Geo-Informatics and Space Technology Development Agency, or GISTDA, and Thaicom Public Company Limited, as well as discussing cooperation with Thai Airways International Public Company Limited to support the goal of pushing Thailand to become the region's aviation hub.
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Synthetic Biology (non-pharma) › Sustainable Aviation Fuel & Bio-Fuels ▲Capital
AIR.PA · Demand · Positive Airbus is expanding cooperation with Thailand across aviation, space technology, personnel development, and clean energy, including establishing a Center of Excellence in Thailand.
THAI.BK · Demand · Positive Airbus and Thai officials discussed cooperation with Thai Airways to support Thailand's goal of becoming the region's aviation hub, implying potential business for the airline.
THCOM.BK · Demand · Positive Airbus plans to expand space technology cooperation building on existing work with GISTDA and Thaicom, signaling potential new business for the satellite operator.
United States▲
Boeing engineers approve four-year contract, averting strike risk
Boeing shares rose about 4% Thursday after the company's largest white-collar union approved a new four-year contract, removing the threat of a strike that could have disrupted production and certification work at the aircraft maker. The Society of Professional Engineering Employees in Aerospace, which represents roughly 17,000 Boeing engineers, scientists, technicians and other workers, said both of its bargaining units voted to ratify the improved offer. About 68% of members in the professional unit, representing roughly 13,000 engineers and scientists, backed the agreement, while more than 53% of the technical unit, which represents about 4,000 designers, analysts and technicians, also voted in favor. The new contract provides a 10% wage increase upon ratification, followed by annual raises of 4% and the potential for an additional 2% performance-based increase. The agreement removes the immediate prospect of a strike after Boeing workers had rejected the company's initial proposal, with the current contracts set to expire October 6 and a work stoppage potentially beginning as soon as October 7. A strike could have added another complication for Boeing as it works to advance certification of its long-delayed 737 MAX 10 and 777X aircraft while increasing production and accelerating deliveries.
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BA · Regulation · Positive Boeing's largest white-collar union ratified a four-year contract, averting a strike that could have disrupted production and 737 MAX 10/777X certification work.
United States▼6impact 4
FAA Weighs Safety Review of Boeing 737 Max Software as Max 10 Certification Delayed
The Federal Aviation Administration could convene a safety review panel as soon as Friday to examine a software problem affecting Boeing's 737 Max family, potentially leading to additional regulatory action, Bloomberg News reported, citing people familiar with the matter. The glitch can increase pilot workload during certain aborted landing procedures by shifting the autopilot to a less automated mode for pitch control. The FAA's Corrective Action Review Board is expected to determine whether the problem constitutes a flight-safety issue and whether measures such as an airworthiness directive are necessary. Boeing notified operators about the issue in August and is working on a software update, while GE Aerospace, which supplies the affected software, said it is assisting Boeing and the FAA with the review. The smaller Max 7 was certified in August with the same software, although Southwest Airlines, United Airlines and Alaska Air Group have said their fleets don't use the faulty version; United also said it is not accepting new aircraft equipped with the affected software, while Southwest said its recent and upcoming Max 8 deliveries won't contain it. The FAA has said certification of the 737 Max 10 will remain on hold until the review is completed, adding another potential obstacle for a model already years behind schedule, and Boeing has more than 1,500 orders for the Max 10, making its entry into service important to the company's production plans and future cash generation.
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Aerospace & Aviation › Airframe OEMs ▼Regulation
Aerospace & Aviation › Avionics & Aircraft Systems ▼Regulation
BA · Regulation · Negative FAA safety review of 737 Max software and Max 10 certification hold add regulatory obstacles.
GE · Regulation · Negative GE Aerospace supplies the affected software and is assisting the FAA review.