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Aviation Industry Updates: June 8, 2021

By June 8, 2021 Industry News

American 737 High-Speed Abort | Bird Strike

United’s New Supersonic Order | The Concorde Failed For A Reason

KEY POINTS:

  • On Thursday, United Airlines announced a deal to buy 15 Overture supersonic passenger jets from Boom Technology. The 88-seat aircraft, designed to fly at 1.7 times the speed of sound, versus 0.8 times for subsonic jets, is scheduled to enter service around the end of the decade.
  • Buzz around the potential return of supersonic travel—18 years after the retirement of the Anglo-French Concorde project—has been audible in the aviation industry for years. United’s vote of confidence will likely make it a notch louder.
  • The idea is that many of the problems that made the Concorde a money-losing proposition—only 14 entered commercial service between 1976 and 2003—can now be mitigated. Some backers believe that more efficient designs could bring ticket costs in line with a regular first-class fare, compared with the Concorde’s roughly 10% premium.
    New projects also promise to reduce the “sonic boom” that created intolerable levels of noise and can even break windows.
  • The one constant in aviation economics since the industry was liberalized 50 years ago is that price is the overwhelming factor in buying plane tickets. This is why, between 1968 and 2014, aircraft didn’t get any faster while fuel burn—the main cost of operating them—dropped by 45%, ICCT data shows. Boeing abandoned its Sonic Cruiser project to build a near-supersonic jet in 2002 for a reason: People don’t pay much to fly faster.
  • To be sure, supersonic flights are targeted at price-insensitive executives. But with in-flight internet services getting better and allowing them to work comfortably, getting to London from New York City in 3½ hours rather than six hardly seems like a game-changer, especially since a big part of the hassle is traveling to and from airports. Supersonic cabins would be more cramped than business folk are used to.
  • Supersonic jets are undoubtedly cool, which explains why aerospace engineers and the general public are eager to see more of them. Paying $5,000 to get aboard, though, is a different story.

Wall Street Journal

United Requires New Employees Get Vaccinated | Corporate Overreach or Responsibility?

KEY POINTS:

  • United said it will require new hires from outside of the company to attest that they have been fully vaccinated against Covid-19.
  • The move follows a similar action by rival Delta last month.
  • The new rule requires external candidates with job offers made after June 15 to confirm they have been fully vaccinated by their start date, the Chicago-based airline said.
  • The new employees “will be required to upload their COVID vaccine card in My Info no later than 7 days post hire date,” the airline said. The company added it will evaluate any religious or medical circumstances of candidates who can’t be vaccinated.

CNBC

Boeing Targets Airbus

KEY POINTS:

  • In the latest twist to Boeing’s revised new aircraft development strategy to compete with the Airbus A321XLR, the manufacturer now appears to be exploring a large single-aisle design similar in size and dimensions to the 757.
  • The latest evolution appears to build on revelations earlier this year that Boeing was working with industry suppliers on defining a new variant of the NMA family dubbed the -5X which is thought to be targeting the 250-275 seat size category.
  • The new aircraft would form Boeing’s long-looked-for replacement for the 757-200/300, but with a range of up to 5,000 nm and significantly improved operating economics.
  • However, even if the market warms to the revised new aircraft strategy, the report also cautions Boeing remains in a weakened position to launch an all-new product. “Due to the 737 MAX grounding issues, 787 grounding issues, and COVID-19, Boeing’s debt load today is the highest in the company’s history with Net Debt of $41.7 billion ($63.6 billion of Total Debt, $7 billion of Cash and Cash Equivalents, and ~$14.8 billion of Short-Term and Other Investments). This debt load and negative free cash flow today could pressure Boeing’s ability to fund a new program,” says the company.
  • The company also cautions that program delays, cost overruns, and execution mistakes “could trigger the need for an equity raise when a new program transitions from development to production. Even if a program were announced today, the timing of this transition is likely 3-5 years away.”

Aviation Week

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