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Gremlinzzzz
Posts: 343
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 3:20 pm

sxf24 wrote:
Boeing borrowed to offset negative cash flow that comes from not delivering airplanes. This is mostly due to their mistakes (MAX grounding, 787 rework), but also due to COVID. Even if there were no deferred production costs, Boeing would have needed to borrow to get through the current situation.
They borrowed because their hubris caught up with them. We can make shoddy products and bully the FAA into certifying them, and when there is an issue we can take our sweet time solving the issue. We can continue to manufacture jets because we think the grounding will be short. We can spend 'profits' buying our own stock and not on quality.

Every silly decision they made in the last decade has been exposed. And there is more pain coming.
 
morrisond
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 3:22 pm

Gremlinzzzz wrote:
Revelation wrote:
brindabella wrote:
To those a-netters out there who are also appalled at this arcane dogfight: this is a long, long way from the first time all this smoke and dust has been raised.
Infuriatingly.
The combatants are mainly new when compared to previous iterations, however one or two are on the same-old, same-old.

And yes, those previous iterations also consisted of the combatants shouting past each other using their own assumptions and making little or no effort to deal with the arguments

Amazing, isn't it?

Somehow a discussion of market share veered into the black hole of GAAP vs ASC accounting, what debt actually means, and for some, profound questions about the meaning of life itself.

Here I was thinking accountants were not a passionate bunch...

brindabella wrote:
... of the others. I posted a little bit some years ago after researching that:
FWIW, the published P&L + Balance Sheets showed ACTUAL debt around $11Bn..
Quite manageable for a Corporation of this size.
And the much-debated 787 program debt at the time was around $30Bn.
So, indeed the reality was and is: "This was money owed by Boeing to Boeing".

:checkmark: :checkmark: :checkmark: :checkmark: :checkmark:

And, as Boeing just showed with 777X, it's one they can write off whenever they feel they need to, without dire consequences.
Then why are they borrowing money? And why are they stating that they need to borrow more money, and that they will not be paying dividends for some time?

Turns out that if you make silly mistakes and weaken the balance sheet, there is a price to pay. Boeing's price is more debt, interest payments galore, and unrelated to this point, money to right poor culture.


Except they haven't stated they need to borrow more money. On the earnings call they said they don't need too - I provided you the direct quote. They increased the size of their revolver (line of credit) just in case but it is completely undrawn.
 
sxf24
Posts: 1249
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 3:37 pm

Gremlinzzzz wrote:
sxf24 wrote:
Business is the difference between money in and money out?!?
Yes.
sxf24 wrote:
The end game is to accumulate money and assets?!?
Yes, and it has not changed.
sxf24 wrote:
Nothing in business known as a non-cash entry?!?
Yes. Anyone that tells you this has no right running a business.

sxf24 wrote:
Setting aside the complete nonsense you’re writing, I thought A.net determined the purpose of Airbus and Boeing was to invest in new programs, regardless of financial potential, because their purpose is innovation.
Their purpose is to make money. They only make money when they innovate by making the right bets.

No one wants a Concorde, A380, 747-8 or 777X.

sxf24 wrote:
I would agree that Boeing is in a difficult position today without the resources to invest billions in a new program. To call them a zombie company is a bit ignorant since they are a going concern. I would also agree that if Boeing were to be liquidated tomorrow, shareholders would not see a return, hence the negative equity. However, I’d point out that liquidation value does not determine if a company is a zombie or a going concern.
If Boeing is liquidated tomorrow, the first people to be paid would be its lenders and suppliers. Shareholders would be back of the line.

sxf24 wrote:
One reason Boeing has negative equity because of the accounting rules related to health care and pension costs. They’re required to carry the value of the liability on the balance sheet adjusted for current interest rates. This inflates the costs in a way that is disconnected from what Boeing actually has to pay. If you’re going to make arbitrary adjustments to Boeing assets, please don’t ignore liabilities.
Everyone needs to account for pensions and pay into them.


Here’s why you’re not making credible statements about finance and accounting:

- Business is not the difference between money in and money out, that’s cash flow.
- The end game for a business is not to accumulate, but to provide returns to the owners. A business sitting on a pile of assets provides no value to anyone.
- There are plenty of non-cash journal entries in business. Have you ever heard of intangible assets?
- Innovation is one way to make money, but not the only way. There are plenty of businesses that make loads of money from good execution on mature products and technologies.
- HOW you account for pensions makes a huge difference. If you assume low interest rates forever, your pension liability will look large and be inconsistent with what you may actually need to pay.

Gremlinzzzz wrote:
sxf24 wrote:
Boeing borrowed to offset negative cash flow that comes from not delivering airplanes. This is mostly due to their mistakes (MAX grounding, 787 rework), but also due to COVID. Even if there were no deferred production costs, Boeing would have needed to borrow to get through the current situation.
They borrowed because their hubris caught up with them. We can make shoddy products and bully the FAA into certifying them, and when there is an issue we can take our sweet time solving the issue. We can continue to manufacture jets because we think the grounding will be short. We can spend 'profits' buying our own stock and not on quality.

Every silly decision they made in the last decade has been exposed. And there is more pain coming.


This statement reflects loads of emotion and a real myopic perspective. It’s clear that in your eyes, there’s nothing Boeing could do right.
 
mig17
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 3:46 pm

Boeing aims to evenly spilt narrowbody aircraft market share because it is currently not the case. Hasn't been since neo/max launch. They sell less aircraft and make less margin per aircraft on that market:
narrowbody planes in service in 2020 => 91* 717; 34* 727; 5743* 737; 5868 Boeing / 105 A220; 6269 A320; 6374 Airbus
narrowbody planes order backlog in 03/2021 => 3240 737; 3240 Boeing / 497 A220; 5701 A320; 6198 Airbus
Airbus currently holds 2/3 of the backlog with 2 "newer" family. Based on that, the trend is only going to accentuate.

So the right question here is what Boeing is going to do next to achieve that "ambitious" goal of 50/50.
 
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Revelation
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 3:59 pm

mig17 wrote:
Airbus currently holds 2/3 of the backlog with 2 "newer" family. Based on that, the trend is only going to accentuate.

I doubt the trend will accelerate. You are measuring at the low point of Boeing. Airlines have been given the freedom to cancel Boeing aircraft, no similar freedom has been given to Airbus customers, while we are in the worst crisis in aviation history where airlines are all losing huge amounts of money so cancellation is a life saver. Boeing has not been able to move forward with MAX10 and wise customers will wait to see it hit EIS before ordering more so it has nothing to sell in an important segment of the market.

mig17 wrote:
So the right question here is what Boeing is going to do next to achieve that "ambitious" goal of 50/50.

I doubt they will reach 50:50, and as I wrote earlier before the accounting zealots decided to take over this thread, it's a really questionable move by Calhoun to put the spotlight on market share.
 
Gremlinzzzz
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 4:02 pm

sxf24 wrote:
Here’s why you’re not making credible statements about finance and accounting:

- Business is not the difference between money in and money out, that’s cash flow.
- The end game for a business is not to accumulate, but to provide returns to the owners. A business sitting on a pile of assets provides no value to anyone.
- There are plenty of non-cash journal entries in business. Have you ever heard of intangible assets?
- Innovation is one way to make money, but not the only way. There are plenty of businesses that make loads of money from good execution on mature products and technologies.
- HOW you account for pensions makes a huge difference. If you assume low interest rates forever, your pension liability will look large and be inconsistent with what you may actually need to pay.

This statement reflects loads of emotion and a real myopic perspective. It’s clear that in your eyes, there’s nothing Boeing could do right.

1. Business is taking risk to try and gain a profit. Businesses that cannot make money generally close shop. So it is what I said it is.

2. The end game of every business is to accumulate. Always. This is why businesses grow in an organic fashion and why they buyout other companies. Kill or lessen competition. In this accumulation, more value can be returned to shareholders.

3. Intangible assets can be sold. They are IP that can be licensed, traded, sold off. There is money backing their development and the cost is not an asset, the IP is. They may not be physical in nature but they are what make the most money today.

4. To get to a mature product or technology, some innovation would have been done previously.

5. I do not lack emotion or let it dictate what my beliefs are. I see things for what they are. How many times have you read of how Boeing employees felt they were being maligned by McDonnell Douglas staff that came in? How many times have you read that money that they had traditionally used to better their processes was now going to shareholder value? How many times have you read that old engineers would have rather built the 787 in-house but the people making decisions decided trying to do it the cheapest was the best way to go? How much have you read of engineers warning that some things were wrong or processes in the factory floor did not meet safety standards? How many times have you seen this company make a poor design and then blame pilots? How many times have you read that Boeing was a great engineering company and not a great business and it needed to behave more like a business and less like an engineering entity?

I cannot suffer fools. There are a good amount of people working for Boeing that want nothing more than to see a good product out and then you have the people that head the company that see it as a tool to enrich themselves. I have been in an organization where this happened and people lost jobs; I know first hand what damage myopic management does to people that depend on a company for a living. I have seen first hand at another company that not keeping the best talent you have leads to under-performance. I have seen how a lack of planning and foresight leads to problems that take years to resolve.

People that run companies are custodians and the current lot at Boeing do not behave as such, and it is the same with the airlines, and the unions that represent employees. I learnt a long time ago that if you want good results, get good leadership and if you want to turn things around, make the hard decisions.
Last edited by Gremlinzzzz on Sat May 01, 2021 4:20 pm, edited 2 times in total.
 
Sokes
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 4:08 pm

sxf24 wrote:
One reason Boeing has negative equity because of the accounting rules related to health care and pension costs. They’re required to carry the value of the liability on the balance sheet adjusted for current interest rates. This inflates the costs in a way that is disconnected from what Boeing actually has to pay.

I didn't know. Can you expand?
I remember Bombardier had IIRC 6 or 8 billion $ equity, not sure if Canadian or US. Then interest rates went to close to zero. They shifted nearly all the equity to pension plans. Only a few hundred millions were left, if at all. I remember I asked myself if they were a bit creative not to get negative equity.
 
mig17
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 4:15 pm

Revelation wrote:
mig17 wrote:
Airbus currently holds 2/3 of the backlog with 2 "newer" family. Based on that, the trend is only going to accentuate.

I doubt the trend will accelerate. You are measuring at the low point of Boeing. Airlines have been given the freedom to cancel Boeing aircraft, no similar freedom has been given to Airbus customers, while we are in the worst crisis in aviation history where airlines are all losing huge amounts of money so cancellation is a life saver. Boeing has not been able to move forward with MAX10 and wise customers will wait to see it hit EIS before ordering more so it has nothing to sell in an important segment of the market.

Before the MAX crashes, there was already a clear advantage for Airbus in that segment. Even considering difference of launch date between neo and max. The market was favoring neo. Airbus was able to charge higher even with slots further down the way. While the 737 sales were in some case supported by avaibility when Airbus wasn't able to supply enough for the fast growing market.
That market is gone ... A par between Airbus and Boeing on the narrowbody market without a game changer on Boeing side is a dream.
 
Gremlinzzzz
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 4:26 pm

mig17 wrote:
Boeing aims to evenly spilt narrowbody aircraft market share because it is currently not the case. Hasn't been since neo/max launch. They sell less aircraft and make less margin per aircraft on that market:
narrowbody planes in service in 2020 => 91* 717; 34* 727; 5743* 737; 5868 Boeing / 105 A220; 6269 A320; 6374 Airbus
narrowbody planes order backlog in 03/2021 => 3240 737; 3240 Boeing / 497 A220; 5701 A320; 6198 Airbus
Airbus currently holds 2/3 of the backlog with 2 "newer" family. Based on that, the trend is only going to accentuate.

So the right question here is what Boeing is going to do next to achieve that "ambitious" goal of 50/50.
They need to concentrate on getting the MAX right and after that they need to make a successor for this program. A 50/50 split is not happening with the MAX as their narrow body jet.

They would need paradigm shift for this.
 
sxf24
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 4:54 pm

Gremlinzzzz wrote:
sxf24 wrote:
Here’s why you’re not making credible statements about finance and accounting:

- Business is not the difference between money in and money out, that’s cash flow.
- The end game for a business is not to accumulate, but to provide returns to the owners. A business sitting on a pile of assets provides no value to anyone.
- There are plenty of non-cash journal entries in business. Have you ever heard of intangible assets?
- Innovation is one way to make money, but not the only way. There are plenty of businesses that make loads of money from good execution on mature products and technologies.
- HOW you account for pensions makes a huge difference. If you assume low interest rates forever, your pension liability will look large and be inconsistent with what you may actually need to pay.

This statement reflects loads of emotion and a real myopic perspective. It’s clear that in your eyes, there’s nothing Boeing could do right.

1. Business is taking risk to try and gain a profit. Businesses that cannot make money generally close shop. So it is what I said it is.

2. The end game of every business is to accumulate. Always. This is why businesses grow in an organic fashion and why they buyout other companies. Kill or lessen competition. In this accumulation, more value can be returned to shareholders.

3. Intangible assets can be sold. They are IP that can be licensed, traded, sold off. There is money backing their development and the cost is not an asset, the IP is. They may not be physical in nature but they are what make the most money today.

4. To get to a mature product or technology, some innovation would have been done previously.

5. I do not lack emotion or let it dictate what my beliefs are. I see things for what they are. How many times have you read of how Boeing employees felt they were being maligned by McDonnell Douglas staff that came in? How many times have you read that money that they had traditionally used to better their processes was now going to shareholder value? How many times have you read that old engineers would have rather built the 787 in-house but the people making decisions decided trying to do it the cheapest was the best way to go? How much have you read of engineers warning that some things were wrong or processes in the factory floor did not meet safety standards? How many times have you seen this company make a poor design and then blame pilots? How many times have you read that Boeing was a great engineering company and not a great business and it needed to behave more like a business and less like an engineering entity?

I cannot suffer fools. There are a good amount of people working for Boeing that want nothing more than to see a good product out and then you have the people that head the company that see it as a tool to enrich themselves. I have been in an organization where this happened and people lost jobs; I know first hand what damage myopic management does to people that depend on a company for a living. I have seen first hand at another company that not keeping the best talent you have leads to under-performance. I have seen how a lack of planning and foresight leads to problems that take years to resolve.

People that run companies are custodians and the current lot at Boeing do not behave as such, and it is the same with the airlines, and the unions that represent employees. I learnt a long time ago that if you want good results, get good leadership and if you want to turn things around, make the hard decisions.


It is foolish to argue that businesses exist to “accumulate” and return value to shareholders and then turn around attack Boeing for returning value to shareholders during good times. You appear to be from the Trumpian school of thought were anything is spun to attack your enemies.
 
Gremlinzzzz
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 7:21 pm

sxf24 wrote:
It is foolish to argue that businesses exist to “accumulate” and return value to shareholders and then turn around attack Boeing for returning value to shareholders during good times. You appear to be from the Trumpian school of thought were anything is spun to attack your enemies.
It just so happens that when you are in the business of manufacturing, you also need to make good products to avoid repeat work and for a healthy company, you need to pay down costs.

It just so happens that you similarly need to have a rainy day fund. You know GM? They have a CEO that took over a company in debt. She paid back government, she bulked cash reserves to the point where the same near sighted Wall St. crowd called a meeting to cap money GM could hold. Her thinking was she never wanted GM to be where it was around 2008/9.

Boeing did none of these. Some seem to be missing this too.

I made a post of what a good company does. Returning shareholder value is at the bottom.

This was a post I made in page 1.

Gremlinzzzz wrote:
I also think that you underestimate just how finite a resource money is for any company that has this much debt and these many issues. Profitable companies do a few things:
i) They invest in themselves. Taking some proceeds from profits and putting them aside for future product development.
ii) They plan for the worst case scenarios, and this means having a substantial rainy day fund (see Mary Barra and GM).
iii) They invest in processes that make them more efficient, or allow them to put out a more reliable product i.e. investments in assembly plants.
iv) Give a return to shareholders.

Boeing has done more of (iv) than they have done of anything else.
My views on business are always long term health. Next time you want to smear someone, you might actually want to have their post history on deck.
 
morrisond
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 10:46 pm

Gremlinzzzz wrote:
morrisond wrote:
Gremlinzzzz wrote:
My stance has not changed and I have proven it right time and again.

On the 777X, they have spent money and they are not going to make it back. They take a charge, that charge is a liability i.e. money spent and not coming back. It is loss of cash on the balance sheet and they can either pay it using profits or leave it as is. Notice that even without taking a charge this was not going to be paid.

On their deferred costs, it is simple, they have no business being accounted as assets. The programs are the assets and if you book these entries (deferred cost) where they should be, assets would come down and liabilities would go up. Those liabilities could be paid down by paying cost to develop programs, essentially what Boeing are doing to pay down program costs.
Notice how this ties in with the 777X scenario? Notice how it correctly captures program accounting and why it is idiotic to book these entries as assets?

There are a lot of people lending money and buying dead companies. It does not mean that they are right. Remember that in 08' the geniuses brought the worldwide economy to its knees, it was using such reasoning. Today, there is risk in stocks because that is the place you can make money and not in banks earning an interest.

On cash flow, no good investor obsesses about cash flow. Dummies do that. A good investor wants to make money long term instead of day trading. What they look at is what is the competitive environment is like, the health of the company, debt and liabilities, cash at hand and assets.

What tangible assets does Boeing have? It is their programs, plants, equipment, land, buildings, inventory (and I mean inventory that can be sold) and it shares. Its liabilities are debt, money spent on programs, and yet to be established future charges emanating from bad culture and the ensuing reputation cost.


No you haven't proven your point at all. Keep ranting all you want - but it has been shown to you that they have significant assets and levers they can pull to reduce their debt.

Back to accounting 101 - if you put 787 Program costs as liabilities, assets can't go down - by definition they have to be at the same level.

On the 777X yes they wrote down the development costs as they don't think they can make their expected margin and pay back the development costs over the 350 in the block accounting quantity. (See the 2021 Annual 10-Q Page 37 for the accounting quantities) It is not the 1,200 you were assuming.

Per the 2021 Q1 Transcript the Boeing CFO sees the Program turning cash flow positive within one to two years. So they probably won't make money on the first 50-60 frames. The rest of the block (which is firming up) will be profitable. How much who knows. But over the next twenty years 500 including freighters is not inconceivable.

Will they make at least $7B on the first 350 frames in the accounting block when the 77W program had a 30% profit margin - probably as you are probably looking at $70'ish billion on sales on the first 350 units. You only need a 10% margin to do that.

You would have to assume they have already written off the excess production costs on the first 12 early frames they have already produced - that was part of the $7B.
Lehman had assets, and unlike Boeing, they were not in negative equity. They went the way of the dodo.


Your really trying to compare a highly levered Financial Services Company with an Industrial Company? You made me laugh hard on that one.

Luckily Boeing does not live in a mark to market world. Lehman went bankrupt as they were incredibly highly levered and they were faced with $60-70 Billion in losses on the assets with no market to sell them in and nowhere near enough capital to cover those losses or the ability to sell enough shares to cover those losses. You aren't allowed to live in financial services if you can't cover those losses right at that time. They weren't paper losses either - there subprime portfolios were almost worthless.

Boeing had almost zero leverage pre-MAX/Covid. With $17B of projected cash flow for 2019 it's $12ishB in debt was almost meaningless.
 
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atcsundevil
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 11:12 pm

Please keep the thread on topic. There are a lot of personal attacks and personal comments. Please try to respect other users when posting.

✈️ atcsundevil
 
RJMAZ
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 11:35 pm

mig17 wrote:
Boeing aims to evenly spilt narrowbody aircraft market share because it is currently not the case. Hasn't been since neo/max launch.

Wrong. The neo/max launched in 2010/2011 respectively. In 2015 Boeing delivered more narrowbodies than Airbus 495 to 491.

mig17 wrote:
They sell less aircraft and make less margin per aircraft on that market:

Boeing has greater margin. 2018 was the last year where they were both in normal production where we could calculate margin. In 2018 Boeing made $10.5 billion profit versus only $3.6 biliion for Airbus. Both delivered nearly identical number of aircraft.

Airbus has multiple production lines for the A320 family which always kills margin. No one would deny that Airbus is structured inefficiently compared to Boeing. Airbus is structured perfectly for a company owned by multiple countries. Workshare has to be evenly spread. Even a superior product can have less margin if it is built inefficiently.

mig17 wrote:
narrowbody planes in service in 2020 => 91* 717; 34* 727; 5743* 737; 5868 Boeing / 105 A220; 6269 A320; 6374 Airbus

In 2018 How my had more Narrowbody aircraft in service. If we exclude the 737MAX grounding or Coronavirus there would still be more Boeing Narrowbody in service. Demand is split.

mig17 wrote:
narrowbody planes order backlog in 03/2021 => 3240 737; 3240 Boeing / 497 A220; 5701 A320; 6198 Airbus
Airbus currently holds 2/3 of the backlog with 2 "newer" family. Based on that, the trend is only going to accentuate.

Airlines are jumping in the queue as they might need an A320 in 10 years time. If the production rate increased most of the tail of backlog will defer. The backlog does not show short term demand but medium term demand. Airbus increasing production would show near term demand as that means customer want aircraft ASAP.


mig17 wrote:
So the right question here is what Boeing is going to do next to achieve that "ambitious" goal of 50/50.
Boeing was at 47/53 before the grounding in terms of deliveries. So to gain an extra 3% market share would involve reducing some of their margin. Lucky Boeing had a very large margin to capture orders.
 
ewt340
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sat May 01, 2021 11:54 pm

How are they gonna do 50/50 when the NEOs outsold the MAXes by 2,935 aircraft.

Also, Boeing only have the MAXes to offer. Airbus have the NEOs, A220 and they have 50% stakes at ATR.
Didn't he forget that Boeing screwed over their partnership with Embraer?
 
RJMAZ
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 12:49 am

ewt340 wrote:
How are they gonna do 50/50 when the NEOs outsold the MAXes by 2,935 aircraft.

Orders do not give you market share. Deliveries give you market share. In 2018 Boeing had a 51% market share of narrowbodies actually flying.

IF Boeing runs out of backlog then get back to me. Until then deliveries are all that matters. That is a big IF.

Deliveries are also the only thing that shows the quality of the backlog or short term demand. A shady startup airline could easily place an order for 500 A321.

When the 737NG came out Boeing was producing twice as many narrowbody aircraft per year as the A320/A321. Most of the 737NG are still flying which counts towards the current Boeing share of the market. When the A320NEO launched Boeing still had around 60% of the narrowbody market share of aircraft in operation. Despite Airbus averaging 10% more deliveries per year for the last decade they have only been capturing around 1% of the market share per year average.

Only after the 737MAX was grounded did Airbus exceed 50% of the flyable aircraft in the market.

https://en.m.wikipedia.org/wiki/Competi ... and_Boeing
 
Gremlinzzzz
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 2:25 am

RJMAZ wrote:
ewt340 wrote:
How are they gonna do 50/50 when the NEOs outsold the MAXes by 2,935 aircraft.

Orders do not give you market share. Deliveries give you market share. In 2018 Boeing had a 51% market share of narrowbodies actually flying.

IF Boeing runs out of backlog then get back to me. Until then deliveries are all that matters. That is a big IF.

Deliveries are also the only thing that shows the quality of the backlog or short term demand. A shady startup airline could easily place an order for 500 A321.

When the 737NG came out Boeing was producing twice as many narrowbody aircraft per year as the A320/A321. Most of the 737NG are still flying which counts towards the current Boeing share of the market. When the A320NEO launched Boeing still had around 60% of the narrowbody market share of aircraft in operation. Despite Airbus averaging 10% more deliveries per year for the last decade they have only been capturing around 1% of the market share per year average.

Only after the 737MAX was grounded did Airbus exceed 50% of the flyable aircraft in the market.

https://en.m.wikipedia.org/wiki/Competi ... and_Boeing
Orders on both sides will continue to shrink once airlines are allowed to collapse.

Boeing is talking about future orders and deliveries. This is where they need to compete. They will not accomplish this with lower deliveries or if all factors remain equal, a smaller order book.
 
Sokes
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 2:35 am

Short undercarriage and non-containerized cargo is best at smaller capacity.
There was a need to replace B757s and B767s. Naturally Airbus won this competition. Add pilot shortage.
There will be a time the A319s and -700s will need replacements. The MAX may be the better plane for it.
The -10's main function is to keep Airbus pricing honest. Happy to be corrected.
 
Noshow
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 5:44 am

The A220 is now part of this competition.
 
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zeke
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 6:37 am

Noshow wrote:
The A220 is now part of this competition.


According to Boeing (https://www.boeing.com/commercial/marke ... t-outlook/) the segment includes 717, 737, 757, MD80/90, A220, A320, CRJ-1000, C919, EMB190, F100, MS21, take out those that are only still in production 737, A220, A320, C919, EMB190, MS21, pretty arrogant to suggest they are going to hold 50% market share with a substandard single product.

I simply dont see they delivering another 16,000 737s, that is what their own data is saying 50% of the market holds.
 
DL220MSP
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 8:07 am

RJMAZ wrote:
mig17 wrote:
Boeing aims to evenly spilt narrowbody aircraft market share because it is currently not the case. Hasn't been since neo/max launch.

Wrong. The neo/max launched in 2010/2011 respectively. In 2015 Boeing delivered more narrowbodies than Airbus 495 to 491.

mig17 wrote:
They sell less aircraft and make less margin per aircraft on that market:

Boeing has greater margin. 2018 was the last year where they were both in normal production where we could calculate margin. In 2018 Boeing made $10.5 billion profit versus only $3.6 biliion for Airbus. Both delivered nearly identical number of aircraft.

Airbus has multiple production lines for the A320 family which always kills margin. No one would deny that Airbus is structured inefficiently compared to Boeing. Airbus is structured perfectly for a company owned by multiple countries. Workshare has to be evenly spread. Even a superior product can have less margin if it is built inefficiently.

mig17 wrote:
narrowbody planes in service in 2020 => 91* 717; 34* 727; 5743* 737; 5868 Boeing / 105 A220; 6269 A320; 6374 Airbus

In 2018 How my had more Narrowbody aircraft in service. If we exclude the 737MAX grounding or Coronavirus there would still be more Boeing Narrowbody in service. Demand is split.

mig17 wrote:
narrowbody planes order backlog in 03/2021 => 3240 737; 3240 Boeing / 497 A220; 5701 A320; 6198 Airbus
Airbus currently holds 2/3 of the backlog with 2 "newer" family. Based on that, the trend is only going to accentuate.

Airlines are jumping in the queue as they might need an A320 in 10 years time. If the production rate increased most of the tail of backlog will defer. The backlog does not show short term demand but medium term demand. Airbus increasing production would show near term demand as that means customer want aircraft ASAP.


mig17 wrote:
So the right question here is what Boeing is going to do next to achieve that "ambitious" goal of 50/50.
Boeing was at 47/53 before the grounding in terms of deliveries. So to gain an extra 3% market share would involve reducing some of their margin. Lucky Boeing had a very large margin to capture orders.


So you declare that market share is only determined by deliveries and then pick numbers which favour only one manufacturer. What a balanced and unbiased analysis.
 
Noshow
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 9:30 am

Their future strategy is what matters most. The've harvested what they had for too long.
 
Sokes
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 9:54 am

Noshow wrote:
The A220 is now part of this competition.

I admit if an airline needs some planes with 110 and some with 130 seats, Boeing has no chance.
 
Noshow
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 10:21 am

These is a reason why the MAX 8 is the most promising family member.
 
morrisond
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 1:32 pm

zeke wrote:
Noshow wrote:
The A220 is now part of this competition.


According to Boeing (https://www.boeing.com/commercial/marke ... t-outlook/) the segment includes 717, 737, 757, MD80/90, A220, A320, CRJ-1000, C919, EMB190, F100, MS21, take out those that are only still in production 737, A220, A320, C919, EMB190, MS21, pretty arrogant to suggest they are going to hold 50% market share with a substandard single product.

I simply dont see they delivering another 16,000 737s, that is what their own data is saying 50% of the market holds.


Yes 16,000 would be a pretty big stretch. Out of the 32,000 in that category though between 2020-2039 as 6,500 are projected for China and another couple thousand with Russia and their combined trading partners - I can see the C919 delivering 3,000 by 2039 to take 30% of that market

So that leaves 28,000 if you take some out for E-Series and MS21 as well (another 1,000).

MAX I can see another 7,000 between now and a replacement in about 2035. Then another 2,000 of the replacement by 2039 as it ramps up. NMA in -5ish size (757) maybe another 1,500.

That would [put Boeing at about 10,500 and that would leave about 17,500 for A220/320. That seems a little high and Covid probably put a pretty big wrench in the forecast market demand. But if it holds that puts Boeing at 37.5% of the market vs just Airbus, and 32.8% overall. If the market is a little softer (29,000 overall, 10% less roughly) maybe A220/A320 does 14,500 putting, Boeing at about 42% vs Airbus and 36.2% of the overall market.

Yes Calhoun is probably smoking something.

However that 4,000 frame advantage for A220/A330 basically almost exists already in terms of existing orders. Maybe he is talking about orders going forward where the split would be a lot closer to 50/50.
 
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SQ22
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 2:22 pm

This is the last warning, please respect the opinions of other users and do not attack them when posting.
 
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Revelation
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 6:52 pm

Sokes wrote:
The -10's main function is to keep Airbus pricing honest. Happy to be corrected.

Definitely won't be issuing corrections, but will offer data.

If you go to https://en.wikipedia.org/wiki/List_of_B ... deliveries and sort by clicking on the up/down arrows next to MAX-10 twice, you can see who has been ordering them. While the biggest customer, UA with 100, and second, VietJet with 80, may be using their orders as you suggest, the next batch of four operators (155 total orders) have Boeing exclusively in their narrow body fleets. The next bunch of orders come from leasing firms. Thus, I think it's fair to suggest MAX-10 is also about offering a growth path for customers who already have large investments in the 737 ecosystem, and a bummer for these airlines that they won't be available till 2023 at the earliest.
 
mjoelnir
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 7:07 pm

Revelation wrote:
Sokes wrote:
The -10's main function is to keep Airbus pricing honest. Happy to be corrected.

Definitely won't be issuing corrections, but will offer data.

If you go to https://en.wikipedia.org/wiki/List_of_B ... deliveries and sort by clicking on the up/down arrows next to MAX-10 twice, you can see who has been ordering them. While the biggest customer, UA with 100, and second, VietJet with 80, may be using their orders as you suggest, the next batch of four operators (155 total orders) have Boeing exclusively in their narrow body fleets. The next bunch of orders come from leasing firms. Thus, I think it's fair to suggest MAX-10 is also about offering a growth path for customers who already have large investments in the 737 ecosystem, and a bummer for these airlines that they won't be available till 2023 at the earliest.


Most of the orders for the 737-10 came at a time when the A321neo was sold out for years in advance. Now if an airline orders some, I expect Airbus to be able to deliver in a reasonable time frame. Airlines taking late deliveries have opened slots in the near term.
Airbus will be delivering at least 200 A321neo a year the next years. With the already delivered frames there will be over 1.000 A321neo in operation when the first 737-10 is expected to be delivered.
 
mjoelnir
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 7:47 pm

morrisond wrote:
Gremlinzzzz wrote:
morrisond wrote:
The problem with using your Business 101 level of knowledge is that it generally would not cover Program cost accounting and that is why you still haven't shown why Boeing is a lost cause and is a Zombie company.
Business is the difference between money in and money out. The end game is to accumulate money and assets. This does not change regardless of how you account.

Boeing, is a zombie company. $63 billion in debt, over $20 billion in cost masquerading as assets, programs in the red as far as the eye can see. The only things making money are programs that were developed before the merger.

morrisond wrote:
Boeing has been paying back the $30B (to itself) - but again it's a non-cash entry just like if they write the remaining balance off.

All you keep banging on about are non-cash entries on balance sheets that have nothing to do with Boeing Continuing as a going concern.

You can keep ignoring it - but if tomorrow they write off all the remaining Deferred Production cost which is included in Inventories - Cash flow will still be the same in the future, Reported earnings will be higher (in the quarters following the write off), Debt will be the same and retained earnings will be less. No cash will actually have to leave the company.

It won't matter.
There is nothing in business known as a non cash entry. Cost is money spent and moving it around different portfolios does not change this. Paying down program cost is using money gained to write down cost. There is real money behind these two entries.

If tomorrow Boeing writes off its entire deferred cost or if they book it where it needs to be booked, which is liabilities because there is no tangible asset backing the cost unless it is paid, liabilities would go up $22 billion and assets would decrease by the same amount. It may not affect cash flow today, but it would push the company to junk status. Good luck trying to raise more debt needed for liquidity.

As stated, you have this habit of missing the forest from the trees.


No - you don't understand accounting or Boeing's Financial statements - just look at what happened with the 777X write-off. You can't have one side go up and other go down. Basic accounting 101.

If they write off the whole $22B - Inventories under Assets would decrease by $22B and the corresponding entry on the Liability side (retained earnings) would also decrease by $22B - both non-cash entries.

Luckily the people who would be loaning Boeing more money (which they don't need as they have $37B in liquidity, plus over $20B in inventory plus, plus) understand this.

That write off would have no impact on there debt rating. The rating agencies understand cash flow and have evolved beyond the text books in Business 101.


An Asset write of lowers equity. Equity is not a liability, but own capital. So it lowers the amount of capital shareholders are supposed to own in the company.

It is the same effect, that if you own let us say 30% in your house, your equity, and the bank owns 70%, a sudden devaluation of the house, let us say a leaking roof, leads to you owning 0% and the bank 100%.

In the case of Boeing, the creditors own already more than 100% of the assets, as the equity in Boeing's case is negative, before you look at the 20 billion deferred cost.
 
Sokes
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 9:52 pm

Revelation wrote:
Sokes wrote:
The -10's main function is to keep Airbus pricing honest. Happy to be corrected.

...
Thus, I think it's fair to suggest MAX-10 is also about offering a growth path for customers who already have large investments in the 737 ecosystem, and a bummer for these airlines that they won't be available till 2023 at the earliest.

That's of course possible.
I had engine size and therefore maintenance, luggage (not) in containers and landing speed in mind.
But your point is good.

Anything known about maintenance of the Leaps when used close to max power? With a lower bypass ratio my assumption may be wrong.
 
morrisond
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 10:14 pm

Sokes wrote:
Revelation wrote:
Sokes wrote:
The -10's main function is to keep Airbus pricing honest. Happy to be corrected.

...
Thus, I think it's fair to suggest MAX-10 is also about offering a growth path for customers who already have large investments in the 737 ecosystem, and a bummer for these airlines that they won't be available till 2023 at the earliest.

That's of course possible.
I had engine size and therefore maintenance, luggage (not) in containers and landing speed in mind.
But your point is good.

Anything known about maintenance of the Leaps when used close to max power? With a lower bypass ratio my assumption may be wrong.


Vs all the earlier engines of lower bypass ratio? Or are you saying less maintenance vs more highly stressed NEO power plants?
 
Sokes
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 10:28 pm

morrisond wrote:
Sokes wrote:
Anything known about maintenance of the Leaps when used close to max power? With a lower bypass ratio my assumption may be wrong.


Vs all the earlier engines of lower bypass ratio? Or are you saying less maintenance vs more highly stressed NEO power plants?

Compared to the Neo engines.
 
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 10:43 pm

mjoelnir wrote:
Most of the orders for the 737-10 came at a time when the A321neo was sold out for years in advance. Now if an airline orders some, I expect Airbus to be able to deliver in a reasonable time frame. Airlines taking late deliveries have opened slots in the near term.
Airbus will be delivering at least 200 A321neo a year the next years. With the already delivered frames there will be over 1.000 A321neo in operation when the first 737-10 is expected to be delivered.

CEO Calhoun has this covered, he'll just tell the investors to reset the clock again.
 
morrisond
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Sun May 02, 2021 11:45 pm

mjoelnir wrote:
morrisond wrote:
Gremlinzzzz wrote:
Business is the difference between money in and money out. The end game is to accumulate money and assets. This does not change regardless of how you account.

Boeing, is a zombie company. $63 billion in debt, over $20 billion in cost masquerading as assets, programs in the red as far as the eye can see. The only things making money are programs that were developed before the merger.

There is nothing in business known as a non cash entry. Cost is money spent and moving it around different portfolios does not change this. Paying down program cost is using money gained to write down cost. There is real money behind these two entries.

If tomorrow Boeing writes off its entire deferred cost or if they book it where it needs to be booked, which is liabilities because there is no tangible asset backing the cost unless it is paid, liabilities would go up $22 billion and assets would decrease by the same amount. It may not affect cash flow today, but it would push the company to junk status. Good luck trying to raise more debt needed for liquidity.

As stated, you have this habit of missing the forest from the trees.


No - you don't understand accounting or Boeing's Financial statements - just look at what happened with the 777X write-off. You can't have one side go up and other go down. Basic accounting 101.

If they write off the whole $22B - Inventories under Assets would decrease by $22B and the corresponding entry on the Liability side (retained earnings) would also decrease by $22B - both non-cash entries.

Luckily the people who would be loaning Boeing more money (which they don't need as they have $37B in liquidity, plus over $20B in inventory plus, plus) understand this.

That write off would have no impact on there debt rating. The rating agencies understand cash flow and have evolved beyond the text books in Business 101.


An Asset write of lowers equity. Equity is not a liability, but own capital. So it lowers the amount of capital shareholders are supposed to own in the company.

It is the same effect, that if you own let us say 30% in your house, your equity, and the bank owns 70%, a sudden devaluation of the house, let us say a leaking roof, leads to you owning 0% and the bank 100%.

In the case of Boeing, the creditors own already more than 100% of the assets, as the equity in Boeing's case is negative, before you look at the 20 billion deferred cost.


If you want to debate Boeing's financial health - start a new thread.
 
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Re: Boeing aims to evenly spilt narrowbody aircraft market share

Mon May 03, 2021 12:15 am

Despite previous warnings put in this thread off topic and personal comments continue to happen so this thread is now locked

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