Aviation Week & Space Technology
Why Are Airliners Still Helicopter Industry Report U.S. Space Force Getting Shot Down? New Decade, Old Problems Takes Shape RICH MEDIA EXCLUSIVE $14.95 JANUARY 27- FEBRUARY 9, 2020
HOW ISRAEL KEEPS
ITS EDGE Digital Edition Copyright Notice
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airbus.com January 27-February 9, 2020 . Volume 182 . Number 2 AVIATIONWEEK 2019Winner Winner 2016 & SPACE TECHNOLOGY
The Spitzer Space Telescope’s observations were the first 16 to reveal the smooth, bright ring of dust (in red) that circles the Sombrero galaxy and that the disk is warped.
DEPARTMENTS BUSINESS 6 | Feedback 16 | Launchpad 25 | IAG architect Willie Walsh 32 | The new trend in acquisitions: 7 | Who’s Where 64 | Classified passes leadership to Iberia CEO mergers of equal but different | First Take 65 | Contact Us 8 26 | Chinese governments expand SPACE 12 | Up Front 65 | Aerospace airline investments 34 | SLS core stage is shipped to 14 Calendar | Going Concerns Stennis for green run 15 | Leading Edge 27 | Malaysia faces lengthy process to regain FAA rating 37 | SpaceX passes last major test DEFENSE before crewed flight FEATURES 29 | U.S. Air Force Death Claw shows 38 | First official member joins the 22 | Deja Vu new way to speed development new U.S. Space Force Airlines are fending for themselves SIMULATION & TRAINING as industry/government conflict- AIR TRAFFIC MANAGEMENT 30 Eye-tracking system is seen as zone measures remain elusive | 40 | European and North Atlantic a new aid for pilot training data-link mandates come due 42 | Helicopter Report Updates on Formula 1 tech for TECHNOLOGY VIEWPOINT rotorcraft, Swiss Kopter and 31 | Research on pilot brain activity is 66 | Governments, not airlines, must Bell 525 program progress, helping with cockpit design decide when it is not safe to fly H160 automation and Russian investment BEHIND THE SCENES 51 | The Engineering Life During a tour of Israel Aerospace The Naval Air Warfare Center’s Industries in early January, Defense Dan Prosser, an Aviation Week 20 Editor Steve Trimble visited “B3,” Twenty of 2013 the third and final prototype from 52 | Aerospace in Israel the Lavi fighter program that Israel Our special report on the country’s canceled in 1987 under heavy distributed command-and-control pressure by the U.S. For a snapshot network, New Space, UAS, sensors, of Israel’s military technology missiles and evolving industry base today, see our special report starting on page 52.
COMMERCIAL AVIATION ISRAELAEROSPACE 18 | Suppliers and customers suffer as ON THE COVER Boeing 737 MAX return slips Israeli Air Force fighters such as the Lockheed Martin F-35I are increasingly employing technologies that can conquer the essential challenge of modern warfare: How to choose the right weapon from the 20 | Boeing knowingly pushed cost right platform within minutes? Defense Editor Steve Trimble’s reporting, informed by a tour of Israeli savings over safety with MAX aerospace and defense companies, begins on page 52. Photo by Amit Agronov. 24 | NATO works with ATC as silent Aviation Week publishes a digital edition every week. Read it at AviationWeek.com/AWST flights spur fighter jet scrambles DIGITAL EXTRAS Access exclusive online features from articles accompanied by this icon.
AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 3 FLY ABOVE EXPECTATIONS Editor-In-Chief AT SINGAPORE AIRSHOW 2020 Joseph C. Anselmo [email protected] Executive Editors As Asia’s largest aerospace and defence event, Singapore Jen DiMascio (Defense and Space) [email protected] Jens Flottau (Commercial Aviation) [email protected] Airshow 2020 will play a crucial role in creating opportunities, Graham Warwick (Technology) [email protected] driving innovations and shaping the future of flight. Editors Lindsay Bjerregaard, Sean Broderick, Michael Bruno, Bill Carey, Thierry Dubois, William Garvey, 5 reasons to visit aviation’s finest Ben Goldstein, Lee Hudson, Irene Klotz, Helen Massy- • View exhibits from over 1,000 of the world’s leading aerospace companies Beresford, Jefferson Morris, Guy Norris, Tony Osborne, Bradley Perrett, James Pozzi, Adrian Schofield, • Explore disruption solutions devised by entrepreneurial minds at What’s Next Lee Ann Shay, Steve Trimble startup showcase Chief Aircraft Evaluation Editor Fred George • Gain insights from world-class though leaders at high-level conferences and Director, Editorial and Online Production Michael O. Lavitt business forums including Associate Managing Editor Andrea Hollowell - Singapore Airshow Aviation Leadership Summit (SAALS) Art Director Lisa Caputo - Next Generation MRO in a Digital World Artists Thomas De Pierro, Rosa Pineda, Colin Throm - Changing the Game for Manufacturing - How New OEM Business Models are Rewriting Copy Editors Jack Freifelder, Arturo Mora, the Rule Book for Suppliers Natalia Pelayo, Andy Savoie - Lindbergh Innovation Forum Production Editor Bridget Horan • Network with leaders in government, defence and commercial sectors Contributing Photographer Joseph Pries Director, Digital Content Strategy Rupa Haria • Witness breathtaking aerobatics and static aircraft display Content Marketing Manager Rija Tariq Register now at www.singaporeairshow.com to visit the show! Data & Analytics Director, Forecasts and Aerospace Insights Brian Kough To start building your show To book your space, contact: For the U.S. Pavilion, contact: Senior Manager, Data Operations/Production marketing plans, contact: Danny Soong / Cathryn Lee Michael Petrassi Terra Deskins Iain Blackhall [email protected] [email protected] Manager, Military Data Operations Michael Tint [email protected] Editorial Offices 2121 K Street, NW, Suite 210, Washington, D.C. 20037 @OfficialSingaporeAirshow @SGAirshow OFFICIAL MEDIA PARTNER Phone: +1 (202) 517-1100 OF THE SINGAPORE AIR SHOW @SingaporeAirshow #SGAirshow2020 605 Third Avenue, New York, N.Y. 10158 Phone: +1 (212) 204-4200 Bureau Chiefs Auckland Adrian [email protected] Beijing Bradley Perrett [email protected] Cape Canaveral Irene Klotz [email protected] Chicago Lee Ann Shay [email protected] Frankfurt Jens Flottau [email protected] Houston Mark Carreau [email protected] Kuala Lumpur Marhalim Abas [email protected] London Tony Osborne [email protected] Los Angeles Guy Norris [email protected] Lyon Thierry Dubois [email protected] Moscow Maxim Pyadushkin [email protected] New Delhi Jay Menon [email protected] Paris Helen Massy-Beresford [email protected] Washington Jen DiMascio [email protected] Wichita Molly McMillin [email protected]
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4 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/awst FLY ABOVE EXPECTATIONS Editor-In-Chief AT SINGAPORE AIRSHOW 2020 Joseph C. Anselmo [email protected] Executive Editors As Asia’s largest aerospace and defence event, Singapore Jen DiMascio (Defense and Space) [email protected] Jens Flottau (Commercial Aviation) [email protected] Airshow 2020 will play a crucial role in creating opportunities, Graham Warwick (Technology) [email protected] driving innovations and shaping the future of flight. Editors Lindsay Bjerregaard, Sean Broderick, Michael Bruno, Bill Carey, Thierry Dubois, William Garvey, 5 reasons to visit aviation’s finest Ben Goldstein, Lee Hudson, Irene Klotz, Helen Massy- • View exhibits from over 1,000 of the world’s leading aerospace companies Beresford, Jefferson Morris, Guy Norris, Tony Osborne, Bradley Perrett, James Pozzi, Adrian Schofield, • Explore disruption solutions devised by entrepreneurial minds at What’s Next Lee Ann Shay, Steve Trimble startup showcase Chief Aircraft Evaluation Editor Fred George • Gain insights from world-class though leaders at high-level conferences and Director, Editorial and Online Production Michael O. Lavitt business forums including Associate Managing Editor Andrea Hollowell - Singapore Airshow Aviation Leadership Summit (SAALS) Art Director Lisa Caputo - Next Generation MRO in a Digital World Artists Thomas De Pierro, Rosa Pineda, Colin Throm - Changing the Game for Manufacturing - How New OEM Business Models are Rewriting Copy Editors Jack Freifelder, Arturo Mora, the Rule Book for Suppliers Natalia Pelayo, Andy Savoie - Lindbergh Innovation Forum Production Editor Bridget Horan • Network with leaders in government, defence and commercial sectors Contributing Photographer Joseph Pries Director, Digital Content Strategy Rupa Haria • Witness breathtaking aerobatics and static aircraft display Content Marketing Manager Rija Tariq Register now at www.singaporeairshow.com to visit the show! Data & Analytics Director, Forecasts and Aerospace Insights Brian Kough To start building your show To book your space, contact: For the U.S. Pavilion, contact: Senior Manager, Data Operations/Production marketing plans, contact: Danny Soong / Cathryn Lee Michael Petrassi Terra Deskins Iain Blackhall [email protected] [email protected] Manager, Military Data Operations Michael Tint [email protected] Editorial Offices 2121 K Street, NW, Suite 210, Washington, D.C. 20037 @OfficialSingaporeAirshow @SGAirshow OFFICIAL MEDIA PARTNER Phone: +1 (202) 517-1100 OF THE SINGAPORE AIR SHOW @SingaporeAirshow #SGAirshow2020 605 Third Avenue, New York, N.Y. 10158 Phone: +1 (212) 204-4200 Bureau Chiefs Auckland Adrian [email protected] Beijing EXTREME Bradley Perrett [email protected] Cape Canaveral Irene Klotz [email protected] Advanced thermal management Chicago Lee Ann Shay [email protected] Frankfurt for extreme military environments Jens Flottau [email protected] Houston Mark Carreau [email protected] Kuala Lumpur Around the globe, military and aerospace systems designers Marhalim Abas [email protected] have turned to Meggitt to help them meet thermal and power London Tony Osborne [email protected] management challenges with compact, lightweight, and efficient Los Angeles vapor cycle systems, liquid cooling systems and components Guy Norris [email protected] Lyon including fans, pumps and compressors. Thierry Dubois [email protected] Moscow Maxim Pyadushkin [email protected] Meggitt has developed cooling solutions for the most challenging New Delhi flight conditions, missions, and extreme environments. From Jay Menon [email protected] Paris low supersonic flight, to high hot wet hover, to desert and arctic Helen Massy-Beresford [email protected] operations, our thermal management solutions are proven and Washington Jen DiMascio [email protected] ready to meet the challenge of the more electronic platform and Wichita battlefield. Molly McMillin [email protected]
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RISING ABOVE BEHIND THE SCENES Your article “CEO Shuffle” about Boeing (Jan. 13-26, p. 22) touches on a France Bureau Chief sign of the times with any corporation Thierry Dubois in flux as it evolves into the first half experienced live electro of the 21st century. But Boeing was caught not having a deep bench. Many encephalography while line managers who came up through flying a Socata TB20 Boeing Commercial Airplanes are light single in Toulouse, to thought to be tainted by the 737 MAX. measure the workload on a The fixer CEO is going to have to be pilot’s brain during various the “perfect Renaissance individual”— phases of flight. His report with a firm vision of Boeing for the begins on page 31. future and a road map on how to lead the company there. The person will re- quire an awesome set of interpersonal FREDERIC DEHAIS/ISAE-SUPAERO skills because they will need to repair and suitably prepared for within ONLINE, the letter from the editor ti the very tarnished reputation of automated system instructions. If, on tled “After Muilenburg” (Jan. 13-26, p. 66) Boeing as a company, heal the employ- top of this, the selection of manual has drawn a number of comments: ees, fix the MAX, plan for a future new override itself entails a convoluted set midmarket airplane and, most import- of instructions, we have a recipe for JOSEPH.BRAUCH writes: ant, put the company back in the game disaster. In one report I read about Well written article, sir. I have met of making trusted airplanes based on the 737 MAX crashes, it appeared that Mr. Muilenburg on several occasions sound engineering design, vision, a manual override was possible only via and will attest, he was great for Boeing. command of innovation processes and a system that was an optional extra. However, your assertion on the Boeing’s a heck of a lot of luck. It is common knowledge now that culture is—in my opinion—the genesis of David Calhoun may be that person, airline pilot training entails more the problem. People preach culture . . . but but he now has a “stale by” date on time devoted to learning to operate they do listen when it really is time to his head, with an urgency to perform computerized cockpit systems and listen. Speaking up against a seasoned miracles. As Socrates said: “Man must far too little time on basic stick-and- executive at certain areas within Boeing rise above the Earth—to the top of rudder flying. Some reconsideration will get one black-balled very quickly. The the atmosphere and beyond—for only is necessary on the topic of the flight culture must change now. thus will he fully understand the world control of commercial aircraft—and in which he lives.” the training of aircrew. At this point, MSAROFF opines: I am inclined to drive from point A to McDonnell, an investment bank mas- James Sherrard, Plano, Texas point B. querading as an aviation company, took over Boeing with Boeing’s mon- MANDATORY MANUAL OVERRIDE David Green, Thornhill, Ontario ey, largely as a result of government After reading “Boeing 737 Pilots Focus pressure to merge during the 1990s. on Modified Procedures” (Dec. 23, A DISASTER WAITING TO HAPPEN? Stonecipher broke Boeing, and in 2019- Jan. 12, 2020, p. 12), I think that if Regarding “Nuclear Air Force?” order to fix it, it needs to go back to I were an airline pilot today, I might be (Nov. 25-Dec. 8, 2019, p. 52), I have seen being what Boeing was, a group of en- seriously considering a career change. several mentions of compact nuclear gineers masquerading as a company. At the very least, a prerequisite would power for remote military bases. This The financial engineering, stock be flying aircraft with an absolute is insane. Has the military fought so buybacks, etc., must end. minimum of computer-controlled many low-intensity wars that they flight/cockpit management systems, forget the enemy sometimes shoots where I would be able to quickly select back? Now every base would be a CORRECTION: full manual override by flipping a Chernobyl disaster waiting to happen. “Green Gambit” (Jan. 13-26, p. 38) simple and intuitive switch. A missile or anti-materiel sniper is all should have identified the aircraft All computer-controlled systems— it would take. Boeing acquired from Air China and whether for automated canned food Nuclear power is not a great idea transformed into an ecoDemonstra- production or flight management anyway, but for remote military out- tor as a 777-200. equipment—are software-controlled. posts, it couldn’t get much dumber. Experience has shown that soft- This correction was made to the article ware-code writers cannot be expected Dale Gibby, Columbus, Indiana online and in the Aviation Week archive. to think of every possible event that may require a predetermined set of instructions written into the program. Address letters to the Editor-in-Chief, Aviation Week & Space Technology, No checklist can be created by fallible 2121 K Street, NW, Suite 210, Washington, DC, 20037 or send via email to: humans to ensure that every conceiv- [email protected] Letters may be edited for length and clarity; able possibility has been envisaged a verifiable address and daytime telephone number are required.
6 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST FEEDBACK WHO’S WHERE
RISING ABOVE BEHIND THE SCENES Your article “CEO Shuffle” about NASA has promoted Safe Flight Instrument Corp., a lift- board. He succeeds Enesa President/ Boeing (Jan. 13-26, p. 22) touches on a France Bureau Chief Robert Pearce to instrumentation and control-systems CEO Chico Pardo, who was lead direc- sign of the times with any corporation Thierry Dubois associate adminis- maker, has promoted tor in January 2016-20. The Aerospace Corp. has elected in flux as it evolves into the first half experienced live electro trator for the Aero- Maria Ferrara to vice of the 21st century. But Boeing was nautics Research president of manufac- three new board members: former vice caught not having a deep bench. Many encephalography while Mission Directorate. turing, a new position, chairman of the Joint Chiefs of Staff line managers who came up through flying a Socata TB20 He was acting as- from director of qual- U.S. Air Force Gen. (ret.) Paul J. Selva; Boeing Commercial Airplanes are light single in Toulouse, to sociate administrator and has held ity assurance, during former Defense Department official thought to be tainted by the 737 MAX. measure the workload on a a number of strategic executive and which she oversaw Kathleen H. Hicks; and Massachusetts The fixer CEO is going to have to be pilot’s brain during various program management positions at Safe Flight’s AS9100 Institute of Technology professor and the “perfect Renaissance individual”— phases of flight. His report NASA. Pearce succeeds Jaiwon Shin, certification. Ferrara was BAE Sys- former NASA officialDava J. Newman. Platinum Tools has with a firm vision of Boeing for the begins on page 32. who has retired. tems’ lead quality assurance engineer. future and a road map on how to lead Wizz Air has hired Jourik Hooghe as Virgin Galactic has hired Michelle hired Scott Lipsett the company there. The person will re- executive vice president/chief finan- Kley as general counsel, secretary and as marketing manag- quire an awesome set of interpersonal FREDERIC DEHAIS/ISAE-SUPAERO cial officer. Hooghe had been with the executive vice president of legal. Kley er, succeeding Jason skills because they will need to repair and suitably prepared for within ONLINE, the letter from the editor ti Adecco Group. Wizz Air also promot- was senior vice president, chief legal/ Chesla, who recently the very tarnished reputation of automated system instructions. If, on tled “After Muilenburg” (Jan. 13-26, p. 66) ed Iain Wetherall to chief investment compliance officer and secretary at was named national Boeing as a company, heal the employ- top of this, the selection of manual has drawn a number of comments: officer, a new position; Wetherall was Maxar Technologies Inc. accounts manager. ees, fix the MAX, plan for a future new override itself entails a convoluted set chief financial officer. Triumph Group has promoted Thomas Lipsett was brand midmarket airplane and, most import- of instructions, we have a recipe for JOSEPH.BRAUCH writes: The Aerospace Corp. has promoted A. Quigley III to vice president of in- manager at Reactor ant, put the company back in the game disaster. In one report I read about Well written article, sir. I have met Todd Nygren to senior vice president of vestor relations and controller, from Watch. Before join- of making trusted airplanes based on the 737 MAX crashes, it appeared that Mr. Muilenburg on several occasions the engineering and technology group, corporate officer and controller. He ing Platinum Tools sound engineering design, vision, a manual override was possible only via and will attest, he was great for Boeing. which comprises 1,500 engineers and succeeds Michael Pici, who has left. as marketing man- command of innovation processes and a system that was an optional extra. However, your assertion on the Boeing’s scientists. Nygren has held multiple Airlines for Amer- ager in 2016, Chesla a heck of a lot of luck. It is common knowledge now that culture is—in my opinion—the genesis of leadership positions at the company ica has named Riva was a sales and mar- David Calhoun may be that person, airline pilot training entails more the problem. People preach culture . . . but including general manager and chief Khoshaba Parker keting consultant at but he now has a “stale by” date on time devoted to learning to operate they do listen when it really is time to engineer for addressing emerging na- vice president of LiveWire Innovation. his head, with an urgency to perform computerized cockpit systems and listen. Speaking up against a seasoned tional security threats. labor and employ- Lufthansa has added a board-level miracles. As Socrates said: “Man must far too little time on basic stick-and- executive at certain areas within Boeing Northrop Grumman has promoted ment/litigation. position for customer and corporate rise above the Earth—to the top of rudder flying. Some reconsideration will get one black-balled very quickly. The Lesley Kalan to corporate vice presi- Parker had worked responsibility, led by Brussels Airlines the atmosphere and beyond—for only is necessary on the topic of the flight culture must change now. dent and chief strategy and develop- at the Office of the CEO Christina Foerster. It has also thus will he fully understand the world control of commercial aircraft—and ment officer. Kalan was vice president Judge Advocate General of the U.S. appointed Thorsten Dirks to head the in which he lives.” the training of aircrew. At this point, MSAROFF opines: of government relations since Jan. 1, Army and helped create the Army’s new IT, digital and innovation depart- I am inclined to drive from point A to McDonnell, an investment bank mas- 2018, and vice president of legislative first nationwide labor litigation team. ment and Harry Hohmeister to lead the James Sherrard, Plano, Texas point B. querading as an aviation company, affairs since 2010. Ulla Lettijeff has been appointed commercial passenger airlines division. took over Boeing with Boeing’s mon- The American director of Helsinki Airport and a mem- Swiss International Airlines Chief MANDATORY MANUAL OVERRIDE David Green, Thornhill, Ontario ey, largely as a result of government Enterprise Institute ber of Finavia’s executive group, effec- Finanacial OfficerMichael Niggemann After reading “Boeing 737 Pilots Focus pressure to merge during the 1990s. (AEI) has named tive Feb. 6. Lettijeff has held several has joined the board for three years on Modified Procedures” (Dec. 23, A DISASTER WAITING TO HAPPEN? Stonecipher broke Boeing, and in Kori Schake a foreign managerial positions at Fiskars Group and taken over management of human 2019- Jan. 12, 2020, p. 12), I think that if Regarding “Nuclear Air Force?” order to fix it, it needs to go back to and defense policy and Nokia. resources and legal affiars. I were an airline pilot today, I might be (Nov. 25-Dec. 8, 2019, p. 52), I have seen being what Boeing was, a group of en- studies director and The DuPage Airport Authority of seriously considering a career change. several mentions of compact nuclear gineers masquerading as a company. resident scholar. She West Chicago, Illinois, has named Mark HONORS AND ELECTIONS At the very least, a prerequisite would power for remote military bases. This The financial engineering, stock succeeds Danielle Pletka, who remains Doles executive director. He succeeds Makenzie Lystrup be flying aircraft with an absolute is insane. Has the military fought so buybacks, etc., must end. an AEI senior fellow focused on the David Bird, who has retired. Doles was vice president/ minimum of computer-controlled many low-intensity wars that they Middle East and U.S. foreign policy. interim executive director. general manager of flight/cockpit management systems, forget the enemy sometimes shoots Schake was deputy director general of RTCA Inc. has made three board ap- civil space at Ball where I would be able to quickly select back? Now every base would be a CORRECTION: the International Institute for Strategic pointments: Nathan Boelkins, Michael Aerospace, has been full manual override by flipping a Chernobyl disaster waiting to happen. “Green Gambit” (Jan. 13-26, p. 38) Studies in London. Ingram and Lorne Cass. Boelkins heads elected a Fellow simple and intuitive switch. A missile or anti-materiel sniper is all should have identified the aircraft Airbus has created a new commu- Collins Aerospace commercial avionics; of the American All computer-controlled systems— it would take. Boeing acquired from Air China and nications and corporate affairs office Ingram is vice president/general man- Association for the whether for automated canned food Nuclear power is not a great idea transformed into an ecoDemonstra- whose leadership comprises: Maggie ager of Honeywell cockpit systems, and Advancement of Science in recognition of production or flight management anyway, but for remote military out- tor as a 777-200. Bergsma, head of communications for Cass is American Airlines operations/ her distinguished record in the fields of equipment—are software-controlled. posts, it couldn’t get much dumber. commercial aircraft; Yves Barille, head industry affairs vice president. planetary science and infrared astron- Experience has shown that soft- This correction was made to the article of communications for helicopters; D. Scott Davis has been named inde- omy, science policy and advocacy, and ware-code writers cannot be expected Dale Gibby, Columbus, Indiana online and in the Aviation Week archive. Dirk Erat, head of communications for pendent lead director of the Honeywell aerospace industry leadership. c to think of every possible event that defense and space; and Philipp Encz, may require a predetermined set of head of the company’s creative con- To submit information for the Who’s Where column, send Word or attached text files (no instructions written into the program. Address letters to the Editor-in-Chief, Aviation Week & Space Technology, tent teams and internal and external PDFs) and photos to: [email protected] For additional information on No checklist can be created by fallible 2121 K Street, NW, Suite 210, Washington, DC, 20037 or send via email to: communications. Guillaume Steuer companies and individuals listed in this column, please refer to the Aviation Week Intelligence humans to ensure that every conceiv- [email protected] Letters may be edited for length and clarity; has been appointed head of external Network at AviationWeek.com/awin For information on ordering, telephone able possibility has been envisaged a verifiable address and daytime telephone number are required. communications, reporting to Encz. U.S.: +1 (866) 857-0148 or +1 (515) 237-3682 outside the U.S.
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International Airlines Group has protested BAE Systems has proposed the $2.2 bil- TAKE to the UK government over assistance to lion purchase of Collins Aerospace’s For the latest, go to regional carrier Flybe, describing the res- military GPS business and Raytheon’s AVIATIONWEEK.COM cue effort for the Exeter, England-based airborne tactical radio division, to be di- airline as “a misuse of public funds.” vested as part of United Technologies’ merger with Raytheon. COMMERCIAL AVIATION Boeing is to start again with clean-sheet Leonardo has won another key U.S. de- design of its next commercial aircraft, fense program, receiving a $176 million says President and CEO David Calhoun, contract on Jan. 13 to supply the U.S. revisiting its new midmarket airplane Navy with 32 military trainer versions because of changes in the competitive of the AW119 light helicopter. playing field and a need to start with the flight control laws in the wake of the 737 Indonesian Aerospace rolled out an in- MAX crisis (page 20). digenously designed medium-altitude, long-endurace (MALE) UAV in late Embraer is targeting entry into service by U.S. NAVY December. Two prototypes are to fly in early 2026 for a turboprop airliner that DEFENSE 2020, with military certification planned would be developed under the planned Bell Boeing plans to deliver the U.S. Navy’s for 2023. joint venture with Boeing, says com- first of 44 CMV-22B carrier onboard mercial aircraft President and CEO delivery tiltrotors to the HX-21 test and The U.S. Air Force Research Laboratory’s John Slattery. evaluation squadron in early 2020 after Generation Orbit X-60A hypersonic completing a first flight in December. testbed has moved closer to flight after As it ramps up single-aisle production to 63 a month from 60, Airbus is to build VIEW FROM MONTREAL another final assembly line for the A321neo in Toulouse, in a plant created for the A380, production of which ends Exit Signs at Bombardier? in 2021. Is Bombardier poised to exit aviation? First, the Canadian compa- ny handed a majority stake in its C Series (now A220) passenger The FAA’s certification process is not fun- damentally flawed and “was followed” jet program to Airbus. Then it sold off its storied regional aircraft for the 737 MAX, but shortcomings in business, leaving it focused on business aviation and rail transport. guidance, global perspective, safety as- The five-year turnaround plan led by CEO Alain Bellemare has sessments and agency staffing should be addressed, says an independent com- shored up the company’s liquidity and cash flow, but a surprise an- mittee’s report. nouncement has cast doubt on that strategy ahead of Bombardier’s release of full-year results on Feb. 13. Israeli startup Eviation’s prototype Alice all-electric regional airliner caught The company says it is “reassessing future participation” in the fire during ground testing at Prescott A220 partnership and “actively pursuing alternatives” to accelerate Regional Airport in Arizona on Jan. paydown of its $9 billion debt load. “We speculate that the company 23. Eviation believes a ground battery being used for the test caused the fire. may be looking at strategic alternatives that could include the sale of one of its two remaining divisions,” National Bank of Canada Finan- Japanese automaker Toyota has led a cial Markets analyst Cameron Doerksen wrote in a research note to $590 million investment round at elec- tric vertical-takeoff-and-landing air taxi clients. “The most obvious candidate would be its aviation business.” startup Joby Aviation, contributing $394 Airbus controls the A220 program, but Bombardier is on the million and its manufacturing expertise hook for about 40% of its costs after it completes an investment (page 15). commitment of $925 million. “Keeping up with the cost growth A modified A350-1000 performed auto- is probably not an option, and so it is likely Bombardier will exit mated takeoffs at Toulouse in December the joint venture with only a fraction of the $2 billion at which it is using a computer vision system as part of Airbus’ Autonomous Taxi, Takeoff currently valued,” writes JP Morgan analyst Seth Seifman. and Landing project. Whatever move the company makes will require the blessing of the Beaudoin family, which owns just 12.2% of Bombardier’s equity Fluid- and motion-control systems supplier Woodward and materials leader Hexcel but has 50.9% of voting rights through a special class of stock. “The plan a stock merger to create one of the Beaudoin-Bombardier family’s views are a key variable in how this largest independent aerospace and de- situation will evolve,” Seifman says. fense suppliers (page 32).
8 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST 43 GALLON TANK 2 HOUR FLIGHT ENDURANCE MILES* OVER 200 NAUTICAL OR R66 OPTIONAL AUX FUEL TANKS Contact Your Local Robinson Dealer Contact Your 23 GALLON TANK 1 HOUR FLIGHT ENDURANCE OVER 100 NAUTICAL MILES* OVER 100 NAUTICAL Optional Aux Fuel Tanks Extend Optional Aux Fuel Tanks to 5 Hours Flight Endurance Up Fly Long Long Fly Fly Far TURBINE *Actual flight endurance and mileage may vary. © Robinson Helicopter Company. R66 is a registered trademark of Robinson Helicopter Company Helicopter Company. © Robinson *Actual flight endurance and mileage may vary.
- an in- the $2.2 bil- key U.S. de U.S. key AviationWeek.com/AWST AviationWeek.com/AWST The U.S. Air Force Research Laboratory’s Research Air Force The U.S. BAE Systems has BAE Systems proposed has Leonardo won another Indonesian rolled Aerospace out digenously digenously designed medium-altitude, long-endurace (MALE) in UAV late prototypes are to Two fly in December. planned certification military with 2020, 2023. for fense program, receiving a $176 million $176 a receiving program, fense on contract 13 Jan. to supply the U.S. with Navy 32 military trainer versions helicopter. light of the AW119 lion lion purchase of Collins Aerospace’s military GPS business and Raytheon’s di- be to division, radio tactical airborne vested as part of Technologies’ United with Raytheon. merger Generation Generation Orbit X-60A hypersonic testbed has moved closer to flight after - U.S. NAVY has protested has the U.S. Navy’s Navy’s U.S. the The five-year turnaround plan led by CEO Alain Bellemare has by CEO Alain Bellemare plan led turnaround The five-year the in participation” future it is “reassessing says The company is on the but Bombardier A220 program, the controls Airbus the blessing of will require makes the company move Whatever Exit Signs at Bombardier? - compa the Canadian First, aviation? poised to exit Bombardier Is A220) passenger in its C Series (now stake handed a majority ny regional aircraft Then it sold off its storied to Airbus. jet program transport. and rail aviation on business it focused business, leaving but a surprise an- and cash flow, liquidity up the company’s shored of Bombardier’s ahead strategy has cast doubt on that nouncement 13. on Feb. results of full-year release to accelerate alternatives” pursuing and “actively A220 partnership the company that speculate “We of its $9 billion debt load. paydown include the sale of could that alternatives strategic be looking at may - Finan Bank of Canada National divisions,” remaining one of its two note to in a research wrote Doerksen Cameron analyst cial Markets business.” be its aviation would candidate clients. “The most obvious an investment after it completes about 40% of its costs hook for growth up with the cost million. “Keeping of $925 commitment will exit Bombardier not an option, and so it is likely is probably it is which of the $2 billion at with only a fraction the joint venture analyst Seth Seifman. writes JP Morgan valued,” currently equity just 12.2% of Bombardier’s owns which the Beaudoin family, a special class of stock. “The through rights of voting but has 50.9% this in how variable a key are views family’s Beaudoin-Bombardier Seifman says. will evolve,” situation VIEW VIEW FROM MONTREAL to the UK government over assistance to assistance over government UK the to res the describing Flybe, carrier regional England-based forthe Exeter, cue effort funds.” misuse of public as “a airline International Airlines Group Airlines International DEFENSE deliver to plans Boeing Bell first first of 44 carrier CMV-22B onboard andtest HX-21 the to tiltrotors delivery after 2020 early in squadron evaluation in December. flight a first completing
- - to by auto
is not fun- not is has led a with clean-sheet For the latest, go to go to the latest, For AVIATIONWEEK.COM TAKE FIRST FIRST early 2026 for a turboprop airliner that that airliner turboprop a for 2026 early planned the under developed be would joint venture with says - com Boeing, mercial aircraft President and CEO Slattery. John damentally andflawed followed” “was for the MAX, 737 but shortcomings in - as safety perspective, global guidance, sessments and staffing agency should - com independent an says addressed, be report. mittee’s $590 $590 million round investment at elec- taxi air vertical-takeoff-and-landing tric $394 contributing Aviation, Joby startup million expertise and its manufacturing 15). (page Israeli startup Eviation’s prototype Alice prototype Israeli startup Eviation’s Japanese automaker Toyota performed A modified A350-1000 supplier systems motion-control and Fluid- 2020 9, 27-FEBRUARY TECHNOLOGY/JANUARY WEEK & SPACE 8 AVIATION COMMERCIAL AVIATION COMMERCIAL Boeing is to start again service into entry targeting is Embraer As it up ramps single-aisle production process certification FAA’s The mated takeoffs at Toulouse in December in Toulouse at takeoffs mated part as system vision computer a using of Airbus’ Autonomous Takeoff Taxi, and Landing project. 63 a month Airbus is from 60, to build another final assembly line for the in a plant created A321neo in Toulouse, production the for of A380, which ends in 2021. all-electric regional airliner caught fire during ground testing at Prescott Regional Airport in Arizona on Jan. 23. Eviation believes a ground battery the test caused the fire. being used for Hexcel leader materials and Woodward the of one create to merger stock a plan and de independent aerospace largest 32). (page suppliers fense design of its next commercial aircraft, Calhoun, David CEO and President says revisiting its airplane new midmarket because of in changes the competitive the with start to need a and field playing 737 the of wake the in laws control flight 20). MAX crisis (page FIRST TAKE MIXED FORTUNES 266 265 an integrated vehicle propulsion system Commercial Helicopter test at Cecil Spaceport in Florida. 209 Deliveries, 2019 vs. 2018
DYNETICS 168 2019 Total: 629 129 119 2018 Total: 646
68 49 Dynetics has conducted the first test flight of the X-61A Gremlins Air Vehicle un- 13 der a DARPA program to demonstrate 8 3 9 airborne launch and recovery of un- Airbus Bell Leonardo Robinson Sikorsky Others manned aircraft systems. Source: Daniel Williams/Aviation Week Intelligence Network
Airbus Helicopters held on to its lead in 2019, but Bell saw good growth as overall com-
LEONARDO mercial turbine helicopter deliveries declined in 2019 amid a continued tough market for heavier aircraft. Our helicopter industry coverage begins on page 42.
ed it to integrate and demonstrate the DASSAULT AVIATION Operational Fires surface-to-surface weapon system. Leonardo flew its Falco Xplorer MALE unmanned aircraft for the first time on Boeing, with the CH-47F, and Sikorsky, Jan. 15, from Trapani air base, Italy. with the CH-53K, have submitted pro- posals for Germany’s STH requirement Lockheed Martin has won its sixth prime for 44-60 heavy-lift helicopters to re- contractor role in a U.S. hypersonic place its CH-53G Stallions. The award missile program as DARPA has select- is expected in 2021.
France has awarded Dassault and Thales a contract to develop the Archange sig- 40 YEARS AGO IN AVIATION WEEK nals-intelligence platform. Based on the The first test flight of the Ariane launch Falcon 8X business jet, three aircraft are to replace two C-160 Gabriel platforms. vehicle took place on Dec. 24, 1979, but it took more than a month for Aviation Week SPACE to publish photos. Our Jan. 28, 1980, cover A SpaceX Falcon 9 lifted off from Kennedy featured a color image of the three-stage, Space Center on Jan. 19 and intention- all-liquid-fueled Ariane 1 lifting off from ally shut down 85 sec. later, setting the the European Space Agency’s spaceport stage for a 131,000-ft. (40-km), Mach 2.2 at Kourou, French Guiana. The mission test of the Dragon capsule launch escape system, the last major milestone before successfully placed a test satellite in a crewed flight test to the International geostationary transfer orbit. Two months Space Station as early as April (page 37). later, Arianespace was established as “the world’s first commercial space transporta- OBITUARY tion company,” and in late 1981 received its Walter Boyne, prolific aviationwriter/his - first commercial launch contract from GTE torian, died on Jan. 9 in Silver Spring, Spacenet. Entering 2020, the company has Maryland. He was 90. A U.S. Air Force bomber and test pilot from 1951-74, Col. launched 449 satellites over 40 years. Boyne was later appointed director of the National Air and Space Museum. Read every issue of Aviation Week back to 1916 at: archive.aviationweek.com He served as chairman of the National Aeronautic Association from 2006-14. c
10 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST FIRST TAKE FAST FIVE WITH HONEYWELL MIXED FORTUNES 266 265 an integrated vehicle propulsion system Commercial Helicopter test at Cecil Spaceport in Florida. Why don’t airlines provide free Wi-Fi? What does Honeywell 209 Deliveries, 2019 vs. 2018 A. Current satellite capacity remains a precious off er to secure Wi-Fi commodity. High-defi nition products consume so much connectivity for crews
DYNETICS 168 2019 Total: 629 of that capacity that for all passengers to have a quality and passengers? JOHN PETERSON experience, there has to be some usage limits. We have A. We’re an innovator VP and General Manager 129 2018 Total: 646 Software Services 119 developed creative ways to manage that capacity, so in how to handle cyber Honeywell Connected Enterprise passengers can stay connected in a responsible way. security using active John Peterson leads the software By 2024-2026, there will be an exponential change in onboard threat detection 68 and services portfolio to create terms of capacity but also in passenger expectations. on the aircraft. Our software solutions, cabin services 49 and connectivity for aircraft Dynetics has conducted the first test flight Airlines and aircraft operators that get the connected surveillance software and passengers. of the X-61A Gremlins Air Vehicle un- aircraft right will enjoy a competitive advantage. ensures that people 8 9 13 der a DARPA program to demonstrate 3 getting on the aircraft don’t bring along a device that has airborne launch and recovery of un- Airbus Bell Leonardo Robinson Sikorsky Others Why is Honeywell an important technology player a bug that could aff ect other passengers and certainly manned aircraft systems. Source: Daniel Williams/Aviation Week Intelligence Network in aircraft connectivity? not the fl ying system. When a threat is detected, we A. When you talk to airliners or bizjet OEMs who want notify the airline’s IT department, so they can decide Airbus Helicopters held on to its lead in 2019, but Bell saw good growth as overall com-
LEONARDO mercial turbine helicopter deliveries declined in 2019 amid a continued tough market for to make things more reliable, they turn to us because how to act upon it. From there, we off er them the ability heavier aircraft. Our helicopter industry coverage begins on page 42. Honeywell is the natural fi t for delivering a packet of data to shut down services, block devices and further fi lter and getting it routed properly. That is a very complex, or shape traffi c, so people are less likely to do malicious sophisticated pathway and Honeywell knows all the or predatory things. ed it to integrate and demonstrate the DASSAULT AVIATION links along that path—sensors, data buses, routers, Operational Fires surface-to-surface satellite links, global ground network and analytical What do you believe 2020 will bring to the connected weapon system. tools to generate alerts or provide guidance on fi xing aircraft and the industry? Leonardo flew its Falco Xplorer MALE problems. We have done unprecedented work over the A. Ninety percent of our engineering hiring is in unmanned aircraft for the first time on Boeing, with the CH-47F, and Sikorsky, past three years to pull that pathway together. software. We are getting candidates who are finding Jan. 15, from Trapani air base, Italy. with the CH-53K, have submitted pro- posals for Germany’s STH requirement how fun it is to be part of this as Honeywell shifts from Lockheed Martin has won its sixth prime for 44-60 heavy-lift helicopters to re- What is Honeywell Forge and how can it help airlines a traditional industrial company to what you would only contractor role in a U.S. hypersonic place its CH-53G Stallions. The award off er free in-fl ight Wi-Fi? see in some of the most innovative software companies. missile program as DARPA has select- is expected in 2021. A. An airline has three key paths to be competitive We’re going to bring forward a 500% to 700% and gain advantage—best ticket price, best on-time reduction in cost to collect and offload data from France has awarded Dassault and Thales a contract to develop the Archange sig- performance, best passenger experience, which includes aircraft. 40 YEARS AGO IN AVIATION WEEK nals-intelligence platform. Based on the connectivity. If there’s a single thing that makes all With Honeywell Forge, all the connectivity pieces
The first test flight of the Ariane launch Falcon 8X business jet, three aircraft are three come together, that’s data, data going through are designed to fi t together and deliver real value to to replace two C-160 Gabriel platforms. vehicle took place on Dec. 24, 1979, but it the aircraft network. the aviation industry. We have met with dozens of Honeywell designed the network in order to maximize airline customers and hundreds of aircraft operators took more than a month for Aviation Week SPACE to publish photos. Our Jan. 28, 1980, cover A SpaceX Falcon 9 lifted off from Kennedy the value it provides to operators. It provides better in 2019. Through their input, we continue to develop featured a color image of the three-stage, Space Center on Jan. 19 and intention- service to passengers and at the same time allows us our platform and overall vision. Our customers have all-liquid-fueled Ariane 1 lifting off from ally shut down 85 sec. later, setting the to process important sensor data from the brakes, the already started initiatives for 2020 which rely heavily the European Space Agency’s spaceport stage for a 131,000-ft. (40-km), Mach 2.2 APU and all the other aircraft subsystems. We aren’t on our new software platform, our connectivity at Kourou, French Guiana. The mission test of the Dragon capsule launch escape giving the airlines a terabyte of data on everything; hardware, and our services. It’ll be a very exciting year system, the last major milestone before successfully placed a test satellite in a crewed flight test to the International we are giving them insight on the factors that drive for all of us and certainly an experience that few could geostationary transfer orbit. Two months Space Station as early as April (page 37). their specifi c key performance indicators. The result is have predicted even 18 months ago! later, Arianespace was established as “the lower maintenance costs, reduced fuel consumption, world’s first commercial space transporta- OBITUARY fewer operational disruptions which all contribute Learn more about Honeywell’s initiatives here. tion company,” and in late 1981 received its Walter Boyne, prolific aviationwriter/his - to the passenger experience. That’s all part of torian, died on Jan. 9 in Silver Spring, first commercial launch contract from GTE Honeywell Forge. Spacenet. Entering 2020, the company has Maryland. He was 90. A U.S. Air Force bomber and test pilot from 1951-74, Col. launched 449 satellites over 40 years. Boyne was later appointed director of Sponsored Content by the National Air and Space Museum. Read every issue of Aviation Week back to 1916 at: archive.aviationweek.com He served as chairman of the National Aeronautic Association from 2006-14. c
10 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST COMMENTARY UP FRONT KEVIN MICHAELS
BOEING’S SHUTDOWN OF 737 MAX 737 MAX Supply Chain Vulnerability production is the issue of the day for com- Shipset Supplier mercial aerospace. This decisive move, Segment Estimate coupled with a company recommendation (U.S. $ million) Vulnerability that pilots undergo full flight-simulator training prior to its return to service—and the fact that there are just 34 A $10-12 simulators in the global inventory—means we could be facing a production shutdown of at least 3-6 months. What are the implications for the supply chain? Which A E 7-9 suppliers are most vulnerable and why? Aerostructures, which has an estimated shipset value of $10-12 million on the MAX, is by far the most vulnerable 5-6 segment. Profitability for these suppliers—typically in the single digits—is closely linked to production volume, and aftermarket revenue is limited. Spirit AeroSystems, A 1.5-2 which derives 50% of its revenue from making the MAX fuselage, has already announced layoffs of 2,800 em- ployees at its Wichita facililities, with more to follow. 5-6 Ducommun, which depends on the MAX for nearly 20% of its business, is another vulnerable Tier 1 supplier. SOURCE: AERODYNAMIC ADVISORY The real concern in aerostructures is with hundreds Aircraft systems and components—hydraulic, fuel, of subtier aerostructures suppliers, many located in the pneumatic components and the like—are worth an esti- Wichita-Dallas/Fort Worth central U.S. aerospace cor- mated $5-6 million per MAX aircraft. Major suppliers in- ridor. OEM supply-chain initiatives like Partnering for clude Collins Aerospace, Honeywell, Safran, Eaton Corp. Success have extended payment terms to 90-120 days and Meggitt. Like aero-engine OEMs, these suppliers or more. This effectively sucked the working capital support a diverse group of civil and military platforms and can lean on a healthy aftermarket revenue stream for profitibility. A typical component OEM derives 35-40% of MAX Production Shutdown its revenue from the aftermarket. Subtier suppliers mak- Which suppliers are most vulnerable? ing engineered components, forgings, castings and such could feel more impact than the OEMs in this sector. out of many suppliers, making them highly vulnerable Major avionics OEMs will be fine, as the majority of to production slowdowns. On top of this, Tier 2 and 3 the MAX’s avionics content is supplied by Collins and aerostructures suppliers were tasked with capitalizing Honeywell. GE Aviation and BAE Systems are also for a MAX production rate of 57 per month before the notable avionics suppliers but part of much larger cor- trouble began. We could see many failures here. This porations. With a MAX avionics shipset value of $1.5-2 means Boeing and its major Tier 1 suppliers must estab- million, the loss of some $80-100 million in avionics de- lish a support program—perhaps maintaining low-rate mand per month will hurt, but avionics suppliers are less production for the most vulnerable suppliers. Tier 4 raw vulnerable than any other segment. material and forging/casting suppliers will also be affect- Finally, what about interiors and inflight entertain- ed. Moody’s estimates that Precision Castparts derives ment? Major suppliers include Collins, Safran, Pana- more than 10% of its revenue from the MAX. sonic, Thales and Boeing itself. Like aerostructures, What about aero engines? CFM International profitability is closely linked with volume, and losing 52 joint-venture partners Safran and GE Aviation, which shipsets per month will be painful. Larger suppliers can are not paid until engines are delivered, have effectively handle a 3-6 month shutdown, but as in the aerostruc- funded the Leap 1B engines produced since last March. tures segment, subtier-parts suppliers are vulnerable. CFM paid its suppliers along the way. While it is pain- In summary, a 3-6-month pause will yield carnage that ful, Safran and GE can absorb a 3-6-month production Boeing and its Tier 1 partners must proactively man- halt. They have a healthy portfolio of military and busi- age to ensure production ecosystem viability. The irony ness aviation engine programs, can shift production to of the situation is that since launching Partnership for the Leap 1A and derive most of their profits from the af- Success in 2013, Boeing’s relationship with its suppliers termarket. The production shutdown will actually stim- has been characterized more by conflict and unlilateral ulate aftermarket demand for legacy CFM56 engines, demands than partnership. Boeing CEO David Calhoun which could grow at a high-single-digit rate in the near would do well to use this crisis as an opportunity to reset future. Like aerostructures, the real concern in the ae- supplier relations to ensure long-term mutual success. c ro-engine supply chain is with subtier suppliers. Many are highly dependent on the Leap programs, and they do Contributing columnist Kevin Michaels is managing director of not benefit from aftermarket profits. AeroDynamic Advisory in Ann Arbor, Michigan.
12 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST COMMENTARY UP FRONT KEVIN MICHAELS
BOEING’S SHUTDOWN OF 737 MAX 737 MAX Supply Chain Vulnerability production is the issue of the day for com- Shipset Supplier mercial aerospace. This decisive move, Segment Estimate coupled with a company recommendation (U.S. $ million) Vulnerability that pilots undergo full flight-simulator training prior to March 30 - April 2, 2020 its return to service—and the fact that there are just 34 A $10-12 simulators in the global inventory—means we could be facing a production shutdown of at least 3-6 months. What are the implications for the supply chain? Which A E 7-9 suppliers are most vulnerable and why? Aerostructures, which has an estimated shipset value of $10-12 million on the MAX, is by far the most vulnerable 5-6 segment. Profitability for these suppliers—typically in the single digits—is closely linked to production volume, and aftermarket revenue is limited. Spirit AeroSystems, A 1.5-2 which derives 50% of its revenue from making the MAX fuselage, has already announced layoffs of 2,800 em- ployees at its Wichita facililities, with more to follow. 5-6 Ducommun, which depends on the MAX for nearly 20% of its business, is another vulnerable Tier 1 supplier. SOURCE: AERODYNAMIC ADVISORY The real concern in aerostructures is with hundreds Aircraft systems and components—hydraulic, fuel, of subtier aerostructures suppliers, many located in the pneumatic components and the like—are worth an esti- Wichita-Dallas/Fort Worth central U.S. aerospace cor- mated $5-6 million per MAX aircraft. Major suppliers in- ridor. OEM supply-chain initiatives like Partnering for clude Collins Aerospace, Honeywell, Safran, Eaton Corp. Success have extended payment terms to 90-120 days and Meggitt. Like aero-engine OEMs, these suppliers or more. This effectively sucked the working capital support a diverse group of civil and military platforms and can lean on a healthy aftermarket revenue stream for profitibility. A typical component OEM derives 35-40% of MAX Production Shutdown its revenue from the aftermarket. Subtier suppliers mak- Which suppliers are most vulnerable? ing engineered components, forgings, castings and such could feel more impact than the OEMs in this sector. out of many suppliers, making them highly vulnerable Major avionics OEMs will be fine, as the majority of to production slowdowns. On top of this, Tier 2 and 3 the MAX’s avionics content is supplied by Collins and aerostructures suppliers were tasked with capitalizing Honeywell. GE Aviation and BAE Systems are also for a MAX production rate of 57 per month before the notable avionics suppliers but part of much larger cor- trouble began. We could see many failures here. This porations. With a MAX avionics shipset value of $1.5-2 means Boeing and its major Tier 1 suppliers must estab- million, the loss of some $80-100 million in avionics de- lish a support program—perhaps maintaining low-rate mand per month will hurt, but avionics suppliers are less production for the most vulnerable suppliers. Tier 4 raw vulnerable than any other segment. material and forging/casting suppliers will also be affect- Finally, what about interiors and inflight entertain- ed. Moody’s estimates that Precision Castparts derives ment? Major suppliers include Collins, Safran, Pana- more than 10% of its revenue from the MAX. sonic, Thales and Boeing itself. Like aerostructures, What about aero engines? CFM International profitability is closely linked with volume, and losing 52 joint-venture partners Safran and GE Aviation, which shipsets per month will be painful. Larger suppliers can are not paid until engines are delivered, have effectively handle a 3-6 month shutdown, but as in the aerostruc- funded the Leap 1B engines produced since last March. tures segment, subtier-parts suppliers are vulnerable. CFM paid its suppliers along the way. While it is pain- In summary, a 3-6-month pause will yield carnage that ful, Safran and GE can absorb a 3-6-month production Boeing and its Tier 1 partners must proactively man- halt. They have a healthy portfolio of military and busi- age to ensure production ecosystem viability. The irony ness aviation engine programs, can shift production to of the situation is that since launching Partnership for Register Early for Best Savings! the Leap 1A and derive most of their profits from the af- Success in 2013, Boeing’s relationship with its suppliers termarket. The production shutdown will actually stim- has been characterized more by conflict and unlilateral ulate aftermarket demand for legacy CFM56 engines, demands than partnership. Boeing CEO David Calhoun SpaceSymposium.org which could grow at a high-single-digit rate in the near would do well to use this crisis as an opportunity to reset future. Like aerostructures, the real concern in the ae- supplier relations to ensure long-term mutual success. c ro-engine supply chain is with subtier suppliers. Many are highly dependent on the Leap programs, and they do Contributing columnist Kevin Michaels is managing director of +1.800.691.4000 not benefit from aftermarket profits. AeroDynamic Advisory in Ann Arbor, Michigan. +1.800.691.4000+1.800.691.4Share:000 12 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST COMMENTARY GOING CONCERNS MICHAEL BRUNO
A LITTLE MORE THAN TWO YEARS pected midyear, the roughly $765 million cash infusion ago, then-Canada-based MacDonald, Dett- should cut Maxar’s debt load around 24% and bring its wiler and Associates—better known as net debt-to-pretax-earnings ratio down to 5.24X from MDA—closed on its acquisition of U.S.- around 6.64X. based DigitalGlobe and announced a major transition Weeks before, Maxar closed an expected sale-lease- to a U.S.-headquartered space conglomerate focused back on its key campus in Palo Alto, California, for $291 on Washington customers. Analysts applauded the million. The company signed a 10-year agreement to move as both transformational for MDA and one that continue using the primary facilities there for satellite marked the rise of the commercial space economy. manufacturing, research and development. Palo Alto has been the home of Maxar’s legacy SSL subsidiary. “This transaction—when combined with the re- cently completed sale of real estate in Palo Alto—re- Star-Crossed duces Maxar’s overall debt by more than $1 billion How MDA became Maxar and then sold MDA and significantly reduces Maxar’s leverage ratio,” Maxar Chief Financial Officer Biggs Porter said after So much for that idea. On the penultimate day of the MDA announcement. “Also, the loss of future cash 2019, Maxar Technologies, as the company is now flow from MDA will be significantly offset by interest known, unveiled a deal to sell its MDA Canadian savings from the reduction of debt.” space subsidiary to a group of private equity inves- That may be so, but Porter was not kidding when tors led by Northern Private Capital for about $765 he acknowledged the lost juice. Analysts called MDA million. a high-quality asset responsible for almost 11% of No one saw that coming when MDA bought Digital- Maxar’s annual revenue stream. And while the Palo Globe, itself the end result of a rollup last decade of Alto deal monetizes the property to pay for imme- commercial space imagery providers including Geo- diate demands, the company must pay to increase Eye. Part of the investment proposal back then had worker morale. About 16% of the original campus was been the combined company’s breadth across space sold a little more than year ago, and the employee at- businesses, from building geostationary satellites for trition rate skyrocketed as high as 20% for obvious communications customers to providing intelligence reasons. Attrition there since has dropped below San photographs to the U.S. intelligence community. But Francisco/Silicon Valley Bay Area averages, Porter the best-laid plans sometimes do not work out, and said in early December. they certainly did not for MDA-turned-Maxar. Instead, the sell-off serves as the climax of Westmin- ster, Colorado-based Maxar’s annus horribilis. A year WE’RE NOT EMOTIONALLY OR RELIGIOUSLY ATTACHED that started with the loss of an anchor satellite and “ continued with sudden management turnover, layoffs TO ANYTHING IN THE BUSINESS.” and lingering doubts about whether geosat manufac- turing would ever recover. By autumn, top executives — DAN JABLONSKY, MAXAR CEO were openly advertising that practically anything was for sale for the right price, as they sought to stabilize the corporation’s balance sheet. “We continue to get asked what else we might do; Nevertheless, no one involved in MDA or Max- we continue to look at all alternatives,” CEO Dan ar is likely to forget the past few years. “Over that Jablonsky told an investor conference at the start of two-plus-year period, we’ve seen extremes from the December. “We’re not emotionally or religiously at- potential for great promise for the stock to points of tached to anything in the business.” despair, given what was perceived to be a debilitating Long rumored, the MDA sale was no surprise. It debt load,” said National Bank of Canada Financial includes all of MDA’s Canadian businesses—once the Markets analyst Richard Tse. company’s core assets—encompassing ground sta- Assuming the turnaround works, and Maxar goes tions, radar satellite products, robotics, defense and on as a viable space services company, it will be inter- satellite components, representing 1,900 employees. esting to see if there are lessons learned for the wider It further entails certain radar-related imagery sales space sector. that have historically been included in Maxar’s imag- For his part, Tse —perhaps the most well-acquaint- ery segment. ed analyst covering Maxar dating to its more humble “We think the recently announced MDA sale sig- MDA days —admits a reason to reassess. In a Dec. 31 nificantly derisks the Maxar story by meaningfully investor note, he wrote: “The promise of synergies reducing the likelihood of a liquidity crunch,” Credit touted by the former merger definitely raises ques- Suisse analysts Rob Spingarn and Scott Deuschle said tions in regard to the strategic decision-making by in a Jan. 15 investor note. Once closed, which is ex- the company.” c
14 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST COMMENTARY COMMENTARY GOING CONCERNS LEADING EDGE MICHAEL BRUNO GRAHAM WARWICK
A LITTLE MORE THAN TWO YEARS pected midyear, the roughly $765 million cash infusion “CLOSER THAN YOU THINK” IS A demonstrator flew in 2012; Joby began flight-test- ago, then-Canada-based MacDonald, Dett- should cut Maxar’s debt load around 24% and bring its an unofficial mantra of the nascent ur- ing the S4 in 2017 and applied for FAA certification late wiler and Associates—better known as net debt-to-pretax-earnings ratio down to 5.24X from ban air mobility (UAM) industry, and in 2018. The 2.1 version now flying (pictured) “is near MDA—closed on its acquisition of U.S.- around 6.64X. two events in the first weeks of 2020 to the vehicle we want to operate,” says Sciarra. The based DigitalGlobe and announced a major transition Weeks before, Maxar closed an expected sale-lease- underline the progress made in little more than a piloted five-seater has a cruise speed of 200 mph and to a U.S.-headquartered space conglomerate focused back on its key campus in Palo Alto, California, for $291 decade. a range of up to 150 mi. on a single battery charge. “We on Washington customers. Analysts applauded the million. The company signed a 10-year agreement to On Jan. 6, South Korean carmaker Hyundai unveiled are not assuming any improvement in cells from what move as both transformational for MDA and one that continue using the primary facilities there for satellite its electric vertical-takeoff-and-landing (eVTOL) air we are using now,” he says. marked the rise of the commercial space economy. manufacturing, research and development. Palo Alto taxi concept and a plan to invest $1.5 billion in UAM Joby plans to own and fly the vehicles on behalf of has been the home of Maxar’s legacy SSL subsidiary. over the next five years. On Jan. 15, U.S. startup Joby Uber, under its own Part 135 air-taxi operating certif- “This transaction—when combined with the re- Aviation revealed its production prototype cently completed sale of real estate in Palo Alto—re- and a $394 million investment by automaker Star-Crossed duces Maxar’s overall debt by more than $1 billion Toyota, which will also provide its manufac- How MDA became Maxar and then sold MDA and significantly reduces Maxar’s leverage ratio,” turing expertise to the eVTOL developer. Credible Progress Maxar Chief Financial Officer Biggs Porter said after For Uber, which ignited the eVTOL market Automaker involvement boosts UAM prospects So much for that idea. On the penultimate day of the MDA announcement. “Also, the loss of future cash in 2016 with its vision for the Elevate urban 2019, Maxar Technologies, as the company is now flow from MDA will be significantly offset by interest aerial ride-sharing service, the announce- known, unveiled a deal to sell its MDA Canadian savings from the reduction of debt.” ments are a major boost. Performance space subsidiary to a group of private equity inves- That may be so, but Porter was not kidding when and noise figures from flight tests of Joby’s tors led by Northern Private Capital for about $765 he acknowledged the lost juice. Analysts called MDA all-electric aircraft show the vehicle capa- million. a high-quality asset responsible for almost 11% of bilities required to begin limited commercial No one saw that coming when MDA bought Digital- Maxar’s annual revenue stream. And while the Palo service in 2023 can be met with available bat- Globe, itself the end result of a rollup last decade of Alto deal monetizes the property to pay for imme- tery technology. And involvement of two of commercial space imagery providers including Geo- diate demands, the company must pay to increase the world’s largest carmakers holds promise Eye. Part of the investment proposal back then had worker morale. About 16% of the original campus was that urban air taxi operations can be scaled been the combined company’s breadth across space sold a little more than year ago, and the employee at- to large volumes beginning in 2025. businesses, from building geostationary satellites for trition rate skyrocketed as high as 20% for obvious “Three years ago, we presented a crazy communications customers to providing intelligence reasons. Attrition there since has dropped below San white paper here,” Mark Moore, director of photographs to the U.S. intelligence community. But Francisco/Silicon Valley Bay Area averages, Porter aviation for Uber Elevate, told the Vertical the best-laid plans sometimes do not work out, and said in early December. Flight Society’s Transformative Vertical they certainly did not for MDA-turned-Maxar. Flight conference in San Jose, California, on Instead, the sell-off serves as the climax of Westmin- Jan. 21. “Today, we are right on target, exe- ster, Colorado-based Maxar’s annus horribilis. A year WE’RE NOT EMOTIONALLY OR RELIGIOUSLY ATTACHED cuting exactly what we said in that white pa- that started with the loss of an anchor satellite and “ per. Joby’s stunning vehicle shows the capa- continued with sudden management turnover, layoffs bilities we are after are very real.” TO ANYTHING IN THE BUSINESS.” JOBY AVIATION and lingering doubts about whether geosat manufac- But to ex-NASA eVTOL pioneer Moore, turing would ever recover. By autumn, top executives — DAN JABLONSKY, MAXAR CEO Hyundai’s announcement may have even more signif- icate. “We are working on that already,” says Sciarra. were openly advertising that practically anything was icance. It was Google that began developing driver- For both safety and customer adoption, the aircraft for sale for the right price, as they sought to stabilize less cars, he points out. A handful of automakers then will be piloted. “It is not yet clear how fully autono- the corporation’s balance sheet. started working on the technology, and now the entire mous passenger operations can be certified,” he says. “We continue to get asked what else we might do; Nevertheless, no one involved in MDA or Max- automotive industry is investing billions of dollars in “We wanted to get out as quickly as possible before the we continue to look at all alternatives,” CEO Dan ar is likely to forget the past few years. “Over that self-driving vehicles. Within five years, he expects ev- rules are fully set.” Jablonsky told an investor conference at the start of two-plus-year period, we’ve seen extremes from the ery carmaker to be involved in UAM. Operating the vehicles “will allow us to bearhug December. “We’re not emotionally or religiously at- potential for great promise for the stock to points of Secretive Joby took an early lead in developing an the safety early on,” says Sciarra. “We will be able to tached to anything in the business.” despair, given what was perceived to be a debilitating eVTOL air taxi, using computer modeling and subscale choose where and when to operate.” The company is Long rumored, the MDA sale was no surprise. It debt load,” said National Bank of Canada Financial prototypes to investigate dozens of configurations be- planning a production plant in Marina, California, and includes all of MDA’s Canadian businesses—once the Markets analyst Richard Tse. fore settling on the S4 design, with its six tilting pro- as the world’s largest carmaker, Toyota will provide company’s core assets—encompassing ground sta- Assuming the turnaround works, and Maxar goes pellers, in 2014. The guiding principles were safety, expertise in manufacturing, quality and cost control. tions, radar satellite products, robotics, defense and on as a viable space services company, it will be inter- low noise and minimum cost per passenger-mile, says Joby is already using robotic automated fiber place- satellite components, representing 1,900 employees. esting to see if there are lessons learned for the wider founder and CEO JoeBen Bevirt. ment to produce composite structures. It further entails certain radar-related imagery sales space sector. Joby is the first eVTOL manufacturer to commit to With its early market lead and a 150-mi. range, the that have historically been included in Maxar’s imag- For his part, Tse —perhaps the most well-acquaint- deploying vehicles to meet Uber’s 2023 target for be- company is looking at more than just urban trips— ery segment. ed analyst covering Maxar dating to its more humble ginning commercial service in pilot cities, and the $594 suburban, intercity and rural flights are within the “We think the recently announced MDA sale sig- MDA days —admits a reason to reassess. In a Dec. 31 million Series C investment round led by Toyota will vehicle’s capability, says Sciarra. Acoustics are a high nificantly derisks the Maxar story by meaningfully investor note, he wrote: “The promise of synergies take the company through certification into produc- priority for community acceptance, particularly if reducing the likelihood of a liquidity crunch,” Credit touted by the former merger definitely raises ques- tion and putting initial vehicles into service, says Paul flights move out from noisy city centers. A 60-dB noise Suisse analysts Rob Spingarn and Scott Deuschle said tions in regard to the strategic decision-making by Sciarra, Joby executive chairman, early investor and level has been demonstrated, “but we need to continue in a Jan. 15 investor note. Once closed, which is ex- the company.” c Pinterest cofounder. to improve,” says Bevirt. c
14 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 15 COMMENTARY THE LAUNCHPAD IRENE KLOTZ
IT IS A LITTLE IRONIC THAT NASA’S Another area where Spitzer had a major impact was Spitzer Space Telescope, the final mem- the study of the very distant universe. Together with ber and least expensive of four so-called Hubble, Spitzer imaged the most distant galaxies ever Great Observatories that have operated found, objects that formed when the universe was about across the electromagnetic spectrum to expand human- 3% of its current age. “They probably formed earlier, since ity’s view of the universe, is being decommissioned for by the time we see it the star population is somewhat lack of $14 million a year. mature,” Werner says. Launched on Aug. 25, 2003, the Space Infrared Tele- “It was really not expected that galaxies of this size scope Facility, as it was originally known, joined the would be present in such abundance in the early universe. Hubble Space Telescope, the Compton Gamma Ray Spitzer has seen a number of these objects, studied the Observatory and the Chandra X-Ray Observatory in properties of their stars,” he adds. orbit, though it circled the Sun, not Earth. Following a 2.5-year primary mission, Spitzer was giv- Spitzer also was the only Great Observatory that en four extensions before losing funding priority. It won did not launch on a space a final, one-year reprieve shuttle, the result of a to continue operating redesign following the Spitzer Shutdown through 2019 after techni- 1986 Challenger accident cal problems delayed the and subsequent ban of NASA pulls the plug on a Great Observatory launch of its successor, the liquid-fueled Centaur the James Webb Space upper-stage engine— Visible + Infrared Telescope. needed to put the tele- NASA now plans to scope into its operational cease Spitzer operations orbit—from the shuttle on Jan. 30. Hubble and payload bay. Chandra remain oper- Slimmed down to fly on ational. Compton was a Delta II, Spitzer none- deorbited in 2000 after theless far surpassed its one of its three gyro- mission goals. From an scopes failed, which had Earth-trailing, heliocen- sparked concerns of an tric orbit, scientists had uncontrolled reentry over planned to use the tele- populated areas should scope’s infrared detectors another one falter. to peer inside the veils of Visible Infrared NASA tried to find cosmic dust to study the a private organization early universe, galaxy and to take over Spitzer, star-formation and proto- but neither of the two planetary discs that circle proposals received had young stars. enough funding for op- They ended up doing NASA/JPL/R. KENNICUTT, UNIVERSITY OF ARIZONA, SINGS TEAM erations, says Bill Latter, all that and much more, including hunting extrasolar Spitzer program scientist at NASA headquarters in planets, the first of which were discovered only in the Washington. mid-1990s, as Spitzer was under construction. “We had a party, and nobody came with enough money “Because Spitzer was extremely well-designed, stable, to buy a ticket,” Werner adds dolefully. reliable and capable of observing for days on end . . . it Annual operating costs are about $14 million a year. had tremendous impact on the study of exoplanets,” says Spitzer will be put into a safe mode but not deorbited, Project Scientist Mike Werner, with the Jet Propulsion since it is so far from Earth and does not pose an im- Laboratory in Pasadena, California. pact or debris threat. Theoretically, it would be possible “We made the first detection of light from an exoplan- to restore communications with Spitzer, but “it would et, the first measurements of molecules in exoplanets’ be difficult—and before long, impossible,” because the atmospheres, the first measurements of energy transport telescope’s antenna will no longer be pointed at Earth, on exoplanets, and we had some remarkable individual Werner adds. discoveries including the Trappist-1 system,” which con- Shutting down Spitzer will not end its contributions sists of seven rocky, Earth-like planets orbiting the same to science. “We have a tremendous archive of more than faint red star, Werner says. 16 years of very high-quality infrared data, which is pub- Several of the Trappist-1 family orbit their parent licly accessible and for which NASA, in a competitive star at a distance where liquid surface water is possible. process, will award funding,” Werner says. “People will “The Trappist-1 discovery was mind-blowing,” Werner continue to work on the Spitzer data for decades into tells Aviation Week. the future.” c
16 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST COMMENTARY THE LAUNCHPAD IRENE KLOTZ
IT IS A LITTLE IRONIC THAT NASA’S Another area where Spitzer had a major impact was Spitzer Space Telescope, the final mem- the study of the very distant universe. Together with ber and least expensive of four so-called Hubble, Spitzer imaged the most distant galaxies ever Great Observatories that have operated found, objects that formed when the universe was about across the electromagnetic spectrum to expand human- 3% of its current age. “They probably formed earlier, since ity’s view of the universe, is being decommissioned for by the time we see it the star population is somewhat lack of $14 million a year. mature,” Werner says. Launched on Aug. 25, 2003, the Space Infrared Tele- “It was really not expected that galaxies of this size scope Facility, as it was originally known, joined the would be present in such abundance in the early universe. Hubble Space Telescope, the Compton Gamma Ray Spitzer has seen a number of these objects, studied the Observatory and the Chandra X-Ray Observatory in properties of their stars,” he adds. orbit, though it circled the Sun, not Earth. Following a 2.5-year primary mission, Spitzer was giv- Spitzer also was the only Great Observatory that en four extensions before losing funding priority. It won did not launch on a space a final, one-year reprieve shuttle, the result of a to continue operating redesign following the Spitzer Shutdown through 2019 after techni- 1986 Challenger accident cal problems delayed the and subsequent ban of NASA pulls the plug on a Great Observatory launch of its successor, the liquid-fueled Centaur the James Webb Space upper-stage engine— Visible + Infrared Telescope. needed to put the tele- NASA now plans to scope into its operational cease Spitzer operations orbit—from the shuttle on Jan. 30. Hubble and payload bay. Chandra remain oper- Slimmed down to fly on ational. Compton was a Delta II, Spitzer none- deorbited in 2000 after theless far surpassed its one of its three gyro- mission goals. From an scopes failed, which had Earth-trailing, heliocen- sparked concerns of an tric orbit, scientists had uncontrolled reentry over planned to use the tele- populated areas should scope’s infrared detectors another one falter. to peer inside the veils of Visible Infrared NASA tried to find cosmic dust to study the a private organization early universe, galaxy and to take over Spitzer, star-formation and proto- but neither of the two planetary discs that circle proposals received had young stars. enough funding for op- They ended up doing NASA/JPL/R. KENNICUTT, UNIVERSITY OF ARIZONA, SINGS TEAM erations, says Bill Latter, Thinking ahead – all that and much more, including hunting extrasolar Spitzer program scientist at NASA headquarters in planets, the first of which were discovered only in the Washington. mid-1990s, as Spitzer was under construction. “We had a party, and nobody came with enough money the future of aviation now. “Because Spitzer was extremely well-designed, stable, to buy a ticket,” Werner adds dolefully.
reliable and capable of observing for days on end . . . it Annual operating costs are about $14 million a year. The aviation industry has set itself ambitious targets, including a + had tremendous impact on the study of exoplanets,” says Spitzer will be put into a safe mode but not deorbited, dramatic reduction in emissions by the year 2050. In order to achieve Project Scientist Mike Werner, with the Jet Propulsion since it is so far from Earth and does not pose an im- See us at Laboratory in Pasadena, California. pact or debris threat. Theoretically, it would be possible this, we need aero engine solutions that surpass the technology “We made the first detection of light from an exoplan- to restore communications with Spitzer, but “it would of today. 10,000 MTU experts are already working day-to-day with SINGAPORE et, the first measurements of molecules in exoplanets’ be difficult—and before long, impossible,” because the passion and enthusiasm, bringing visionary ideas to life. AIRSHOW atmospheres, the first measurements of energy transport telescope’s antenna will no longer be pointed at Earth, The future of aviation starts now. on exoplanets, and we had some remarkable individual Werner adds. February 11 – 16, 2020 discoveries including the Trappist-1 system,” which con- Shutting down Spitzer will not end its contributions Booth J65 sists of seven rocky, Earth-like planets orbiting the same to science. “We have a tremendous archive of more than www.mtu.de faint red star, Werner says. 16 years of very high-quality infrared data, which is pub- Several of the Trappist-1 family orbit their parent licly accessible and for which NASA, in a competitive star at a distance where liquid surface water is possible. process, will award funding,” Werner says. “People will “The Trappist-1 discovery was mind-blowing,” Werner continue to work on the Spitzer data for decades into tells Aviation Week. the future.” c
16 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST COMMERCIAL AVIATION > MAX thrift over safety p. 20 Conflict-zone issues p. 22 Silent flights and fighter jets p. 24 IAG leadership change p. 25 Chinese airline investments p. 26 Malaysia’s FAA rating p. 27 YEARS OF PAIN > AIRLINES FORCED TO BRIDGE SUMMER WITH MASSIVE CAPACITY SHORTFALL > SUPPLIERS HIT BY MAX PRODUCTION STOP > RECOVERY TO TAKE SEVERAL YEARS
Jens Flottau Dublin and Sean Broderick and Michael Bruno Washington
fter AerCap CEO Aengus Kelly heard Boeing’sBoeing’s Bad Bad Year Year about the latest expected Boeing 737 GROSSGROSS ORDERS ORDERS NETNET ORDERS ORDERS DELIVERIESDELIVERIES MAX return-to-service delay, his 1,1311,131 schedule changed instantly. “I have met 1,0901,090 A 893893 863863 with all the big MAX operators in the last 72 hr.,” 831831 800800 806806 he says. They were meetings of very, very unhap- 747747768768 py customers, united by anger and uncertainty. 380380 That the MAX grounding is now likely to extend another six months has huge consequences across the industry. Air- 246246 lines must rearrange schedules again and endure another 54 54 round of mass cancellations months after expecting the MAX to return, even in their worst-case scenarios. Lessors are 2018201820192019 2018201820192019 2018201820192019 2018201820192019 2018201820192019 2018201820192019 struggling to deal with the fall out, unsure when they can get AirbusAirbus BoeingBoeing AirbusAirbus BoeingBoeing AirbusAirbus BoeingBoeing and place aircraft with customers. Boeing’s suppliers also N N A A 0 0 . . have almost no visibility on the schedule. There will be no Boeing narrowbody deliveries until the summer, and it is on the heels of two MAX accidents in less than fi ve months. increasingly clear that it will take Boeing years to return By the summer, around 800 aircraft will either be stored to the production rates it had reached—and even longer to undelivered or never built as a consequence of the produc- achieve the increased output it had targeted. tion stop. On top of that, almost 400 aircraft had been deliv- There is also growing uncertainty around some wide- ered to operators before the grounding. The resulting airline body programs, including 787 and 777 rates, and Airbus capacity gap will be well more than 1,000 aircraft by summer. continues with production delays at its Hamburg fi nal as- There is little clarity on initial rates following the return to sembly lines. How many aircraft can and will be built and in fl ight, with analyst estimates varying. One industry source what time frame will likely be open questions for years. The believes Renton, Washington, can put out around 32 aircraft once clear path toward much higher narrowbody output is per month initially and step in fi ve-aircraft-per-month incre- blocked for now. ments every six months. Even so, Boeing would not return to “It is a big setback for airlines to have another summer an earlier rate of 52 aircraft per month until around the end gone,” says Kelly about the expected new MAX schedule. of 2022. And some doubt that a target rate of 57 is achievable “It is a very di cult situation for them.” All have been sell- in the medium term, given uncertainty around demand and ing seats based on now invalid capacity assumptions. As a backlog vulnerability. consequence, there is big demand for lease extensions but In the short term, not everyone thinks that missing the hardly any dry-lease capacity available. Lessors with a MAX MAX fl eet is a bad thing. “We were saved by incompetence,” orderbook are in the same boat: It is “impossible to o er Avitas Senior Vice President Adam Pilarski said at the Airfi - customers a slot” until Boeing sorts out the delivery stream, nance Journal Dublin 2020 conference. Airlines would have Kelly says. And he makes clear that “the damage caused to operated “way too many aircraft” if all had gone according our shareholders has to be compensated by Boeing.” to the overambitious plan, he said, citing slowing passenger “Production will be re invigorated . . . months before [an- demand and the risk of overcapacity. ticipated FAA approval],” Boeing’s new President and CEO The MAX grounding has been “painful for all stakehold- David Calhoun said Jan. 22 during his fi rst press conference. ers,” says Avolon CEO Domhnal Slattery, a major buyer of He mentioned June as a more specifi c target for anticipated the aircraft. Like other lessors, Avolon has “PDPs [pre deliv- FAA certifi cation, before clarifying that he was “not going to ery payments] sitting with Boeing not generating returns.” give [out] a precise date.” However, Slattery considers the latest schedule announce- The supply chain will come online even earlier as part of ment “the best news” coming out of Boeing in a long time a slow ramp-up starting in the idled production line’s fi rst because “I think we are getting near the end game.” position and will include new processes put in place during When aerostructures giant Spirit AeroSystems an- the shutdown, Calhoun said. MAX production halted in Jan- nounced job cuts due to the MAX production halt, managers uary, 10 months after the fl eet’s mid-March 2019 grounding noted further cuts could occur because of the MAX ramp-up
1 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST COMMERCIAL AVIATION > MAX thrift over safety p. 20 Conflict-zone issues p. 22 Silent flights and fighter jets p. 24 IAG leadership change p. 25 Chinese airline investments p. 26 Malaysia’s FAA rating p. 27
Until the January stoppage, most of the supply chain had been bu ered because Spirit and CFM International, the GE-Safran engine joint venture, OF had maintained production rates at 52 and 42 units YEARS PAIN a month, respectively. But the stoppage means all suppliers will share the pain, with little warning. > AIRLINES FORCED TO BRIDGE SUMMER WITH MASSIVE CAPACITY SHORTFALL In turn, four of 24 suppliers rated by Moody’s have been put on watch for credit downgrades. > SUPPLIERS HIT BY MAX PRODUCTION STOP > RECOVERY TO TAKE SEVERAL YEARS But “hundreds” more unrated suppliers around the world likely will feel the downturn. “The im- pact will be felt for many more months, though, as Jens Flottau Dublin and Sean Broderick and Michael Bruno Washington we expect a very gradual resumption of activity to pregrounding levels over an extended multiyear fter AerCap CEO Aengus Kelly heard Boeing’sBoeing’s Bad Bad Year Year time frame,” add Moody’s analysts. about the latest expected Boeing 737 While the MAX problems are the dominating GROSSGROSS ORDERS ORDERS NETNET ORDERS ORDERS DELIVERIESDELIVERIES industry concern, they are not the only one. Slug- MAX return-to-service delay, his 1,1311,131 gish widebody demand, exacerbated by several schedule changed instantly. “I have met 1,0901,090 market-specifi c headwinds point to potential pro- A 893893 duction-rate cuts for several Airbus and Boeing pro- 863863 with all the big MAX operators in the last 72 hr.,” 831831 800800 806806 grams, a Bloomberg Intelligence analysis contends. 747747768768 he says. They were meetings of very, very unhap- “The 787 is the closest to a cut and needs a book- py customers, united by anger and uncertainty. to-bill of 1 in 2020, since airframers are typically comfortable with about three years of backlog,” 380380 That the MAX grounding is now likely to extend another Bloomberg analyst George Ferguson wrote . Boeing six months has huge consequences across the industry. Air- 246246 has a backlog of 328 787s, the Aviation Week Intelli- lines must rearrange schedules again and endure another 54 54 gence Network’s Commercial Aviation Fleet Discov- round of mass cancellations months after expecting the MAX ery database shows, with a planned production-rate to return, even in their worst-case scenarios. Lessors are 2018201820192019 2018201820192019 2018201820192019 2018201820192019 2018201820192019 2018201820192019 cut to 12 per month, from 14, later this year. struggling to deal with the fall out, unsure when they can get AirbusAirbus BoeingBoeing AirbusAirbus BoeingBoeing AirbusAirbus BoeingBoeing Widebody demand has been sluggish across and place aircraft with customers. Boeing’s suppliers also the board, with Boeing and Airbus combining for N N A A 0 0 . . Sources: Airbus and Boeing have almost no visibility on the schedule. There will be no about 200 net fi rm orders in 2019, compared to 419 Boeing narrowbody deliveries until the summer, and it is on the heels of two MAX accidents in less than fi ve months. deliveries. The fi gures will likely translate into a increasingly clear that it will take Boeing years to return By the summer, around 800 aircraft will either be stored book-to-bill of about 0.5, even after Boeing fi nalizes to the production rates it had reached—and even longer to undelivered or never built as a consequence of the produc- Boeing was forced to its full-year fi rm order totals. achieve the increased output it had targeted. tion stop. On top of that, almost 400 aircraft had been deliv- stop 737 MAX production Boeing’s problems are more acute than those of There is also growing uncertainty around some wide- ered to operators before the grounding. The resulting airline in early January. its European rival, thanks largely to the U.S.-Chi- body programs, including 787 and 777 rates, and Airbus capacity gap will be well more than 1,000 aircraft by summer. na trade rift holding up sales to Chinese airlines. continues with production delays at its Hamburg fi nal as- There is little clarity on initial rates following the return to STEP EN RAS EAR/GETTY IMAGES “Without China in the marketplace we have today, sembly lines. How many aircraft can and will be built and in fl ight, with analyst estimates varying. One industry source uncertainty. “Spirit has not received notice from its custom- it’s hard to see rate 12 being sustainable. . . . It wouldn’t be a what time frame will likely be open questions for years. The believes Renton, Washington, can put out around 32 aircraft er, Boeing, on how long the production suspension will last or surprise if we saw it go to rate 10,” Air Lease Corp. President once clear path toward much higher narrowbody output is per month initially and step in fi ve-aircraft-per-month incre- what the production rate will be in the future,” the Wichita and CEO John Plueger says. blocked for now. ments every six months. Even so, Boeing would not return to supplier said Jan. 10. “Spirit believes that, when production The 777 program’s monthly rate was adjusted to three “It is a big setback for airlines to have another summer an earlier rate of 52 aircraft per month until around the end resumes, the levels will be lower than previously expected from 3.5 as part of the bridge to the 777X, and some 777 gone,” says Kelly about the expected new MAX schedule. of 2022. And some doubt that a target rate of 57 is achievable due, in part, to the customer’s need to consume over 100 freighters are being moved up in the production queue to “It is a very di cult situation for them.” All have been sell- in the medium term, given uncertainty around demand and MAX shipsets currently in storage at Spirit’s facilities. In help accommodate for delays in the 777X program. Boeing’s ing seats based on now invalid capacity assumptions. As a backlog vulnerability. addition, Boeing has several hundred MAX airplanes built notional plans are to ramp up the rate once the 777X is in consequence, there is big demand for lease extensions but In the short term, not everyone thinks that missing the but not yet delivered to its customers.” service, but Ferguson said several factors could force the hardly any dry-lease capacity available. Lessors with a MAX MAX fl eet is a bad thing. “We were saved by incompetence,” Spirit had increasingly dialed back expectations for 737 manufacturer to re examine its strategy. orderbook are in the same boat: It is “impossible to o er Avitas Senior Vice President Adam Pilarski said at the Airfi - production during 2019. By November, it did not expect to ex- The A330 backlog appears solid at 331, thanks in part to an customers a slot” until Boeing sorts out the delivery stream, nance Journal Dublin 2020 conference. Airlines would have ceed a 737 fuselage production rate of 52 new units a month order for 40 A330-900neos Airbus booked in December and a Kelly says. And he makes clear that “the damage caused to operated “way too many aircraft” if all had gone according until 2022. Boeing had initially said it expected to reach rate production rate of four per month that has been in place for a our shareholders has to be compensated by Boeing.” to the overambitious plan, he said, citing slowing passenger 57 in late 2020. But those forecasts were issued before 737 year. But large exposure to AirAsiaX and Iran Air, a combined “Production will be re invigorated . . . months before [an- demand and the risk of overcapacity. work stopped completely and before the latest schedule shift. 35% of the backlog, is cause for concern, Ferguson said. ticipated FAA approval],” Boeing’s new President and CEO The MAX grounding has been “painful for all stakehold- Now fi nancial analysts see a lower-for-longer production Airbus separately decided to build another fi nal assembly David Calhoun said Jan. 22 during his fi rst press conference. ers,” says Avolon CEO Domhnal Slattery, a major buyer of scenario. “Spirit basically just cut 21% of its workforce, and line for the A321neo in Toulouse to be opened in 2022, a con- He mentioned June as a more specifi c target for anticipated the aircraft. Like other lessors, Avolon has “PDPs [pre deliv- it certainly seems like production rates are going to be in the sequence of high demand and serious production problems at FAA certifi cation, before clarifying that he was “not going to ery payments] sitting with Boeing not generating returns.” 40s for the next couple of years,” says Michael Ciarmoli of its Hamburg site. It is producing 60 single-aisle aircraft per give [out] a precise date.” However, Slattery considers the latest schedule announce- SunTrust Robinson Humphrey. month—split among Toulouse; Hamburg; Mobile, Alabama; The supply chain will come online even earlier as part of ment “the best news” coming out of Boeing in a long time Credit analysts think most of the supply chain is in for and Tianjin , China—and is ramping up to 63 per month. a slow ramp-up starting in the idled production line’s fi rst because “I think we are getting near the end game.” trouble. “Several companies face potentially signifi cant earn- But even with the new line , overall single-aisle capacity in position and will include new processes put in place during When aerostructures giant Spirit AeroSystems an- ings and cash fl ow pressures that could erode their liquidity Toulouse will remain fl at. Airbus already has two fi nal assem- the shutdown, Calhoun said. MAX production halted in Jan- nounced job cuts due to the MAX production halt, managers in relatively short order,” Moody’s Investors Service said Jan. bly lines for the A320 in need of modernization. As the compa- uary, 10 months after the fl eet’s mid-March 2019 grounding noted further cuts could occur because of the MAX ramp-up 10. How that slows future rate increases is anyone’s guess. ny adds A321neo capacity, it is upgrading the two legacy lines.c
1 AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 AviationWeek.com/AWST AviationWeek.com/AWST AVIATION WEEK & SPACE TECHNOLOGY/JANUARY 27-FEBRUARY 9, 2020 1 COMMERCIAL AVIATION
lines Flight 302 in March 2019—that Unsafe Decisions led regulators to ground the MAX in mid-March 2019. The fleet remains grounded while Boeing addresses > NEW DOCUMENTS SHED LIGHT ON BOEING’S DECISION-MAKING regulators’ concerns, including add- ing MCAS training and modifying the > BOEING DOWNPLAYED MCAS TO SKIP REGULATORY SCRUTINY system’s logic. Most pilots did not know the MCAS Sean Broderick Washington existed until after the Lion Air acci- dent. Boeing maintains that it kept the oeing knew in 2013 that intro- emphasize MCAS is a new function, MCAS, designed to be transparent to ducing the Maneuvering Char- there may be a greater certifi cation pilots, out of manuals to simplify pi- Bacteristics Augmentation Sys- and training impact.” lot training, and that an erroneous tem (MCAS) to the 737 MAX might Boeing’s solution: Refer to the MCAS activation would be quickly trigger additional training require- MCAS externally as an addition to diagnosed as a runaway stabilizer. The ments, so it made a decision: refer- the 737 Speed Trim, not by its name. 2013 memo casts doubt on the former, ring to MCAS internally was fi ne. But Boeing knew the approach might be and the two MAX accident sequences externally, particularly when talking questioned, so it sought input from its showed Boeing and regulators were with regulators, the MCAS would not FAA-designated authorized represen- wrong about the latter. be named, but rather described as an tative (AR) “to ensure this strategy is Boeing’s e orts to win approval for extension of an existing 737 system. acceptable” for certifi cation, an inter- simulator-free MAX transition training Four years later, when Lion Air nal email says. succeeded with FAA approval in Au- was developing its MAX training “After speaking with the [AR], con- gust 2016, nine months before Malindo program in preparation for accepting currence was provided that we can Air become the fi rst customer to take its fi rst deliveries, the airline wanted to include simulator sessions for 737 Many issues Boeing pilots transitioning to the family’s newest version. Boeing pushed back weighed when developing aggressively, arguing that Lion Air the MAX look question- was burdening itself unnecessarily. able in hindsight, but Eventually, the airline relented. others are drawing The two scenarios, revealed in doc- scrutiny based on what uments Boeing recently made public, the company knew at are part of a growing pile of evidence the time. being used to piece together how the MAX program ended up where it is: two fatal accidents, a grounded fl eet, an idle production line, and no clear idea of when things will change. They also offer the clearest evidence yet that Boeing made some of its mon- ey-saving decisions despite having strong indications pointing to safer, more conservative options. Boeing determined early on that ensuring 737 pilots could transition to the MAX without simulator time would be a huge cost advantage when pitching the model to customers. It AVI RY ER/GETTY IMAGES also realized that regulators could continue to use the MCAS nomencla- delivery of a MAX. But some MAX cus- consider the extent of the MAX’s ture internally . . . while still consid- tomers and regulators were not con- new features as too much to cover ering MCAS to be an addition to the vinced that CBT, or Level B training, in computer-based training (CBT). Speed Trim function,” the email says. would be su cient. Among them: Lion The MCAS, a fl ight control law that “This will allow us to maintain the Air and Indonesia’s Directorate Gener- commands automatic stabilizer move- MCAS nomenclature while not driving al of Civil Aviation (DGCA). ments in certain flight profiles, was additional work due to training impacts Lion Air was the fi rst Asia-Pacifi c chief among them. and maintenance manual expansions.” customer to order the MAX and would A version of the MCAS was devel- The plan extended to keeping men- be one of the model’s fi rst operators. oped for the 767 tanker program, “but tion of the MCAS out of MAX pilot In June 2017, with its fi rst delivery just [treated as an] analogous function, as training materials. Its erroneous ac- days away, the airline was still devel- a speed trim-type function,” a Boeing tivation played key roles in the two oping its training curriculum, and document summarizing a June 2013 MAX accidents—Lion Air Flight 610 simulator sessions were on the table. MAX program meeting said. “If we in October 2018 and Ethiopian Air- The airline’s early entry-into-service