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By Tom Batchelor
March 18, 2023, © Leeham News
A strengthening order backlog and an uptick in deliveries helped Embraer turn a profit last year.
In a call with investors as the company outlined its 2023 earnings results, Francisco Gomes Neto, president and CEO of Embraer, said commercial activity had “intensified” over the last 12 months, with “solid demand” across its markets.
Unsurprisingly, Embraer has felt the effects of supply chain delays buffeting the entire industry (though it said not as acutely as in 2022). The company still managed to deliver a total of 181 jets, up from 160 in 2022.
Of those, 64 were commercial aircraft, 115 were executive jets (74 light and 41 medium, helped by the strong performance of the Phenom 300) and two were military C-390s. E2 family deliveries more than doubled year-on-year, from 19 to 39 in 2023.
The recent firm order from American Airlines for 90 E175s, with purchase rights for 43 additional jets, had resulted in a “great start to 2024”, Neto added.
Revenues totaled $1.975bn in the fourth quarter and $5.269bn across 2023, which was 16% higher than in 2022 but at the lower end of the guidance range for the year.
In 2023 as a whole, the company reported adjusted EBIT of $350m, with adjusted EBIT and EBITDA margins of 6.6% and 10.7%. Adjusted EBIT stood at $181.7m in 4Q23, with adjusted EBIT and EBITDA margins of 9.2% and 12.8%, respectively.
Looking ahead to 2024, Embraer said total company revenues would sit in the $6 to $6.4bn range, with an adjusted EBIT margin of between 6.5% and 7.5%.
March 15, 2024, ©. Leeham News: We started the series a year ago about the New Aircraft Technologies that can be used when replacing our present single-aisle airliners.
We have covered a lot, including the typical development phases, from initial studies to preparing for the aircraft’s in-service phase.
Let’s make a resume of what we have discussed.
By the Leeham News Team
March 13, 2024, © Leeham News: The Federal Aviation Administration (FAA) is considering whether to suspend the Production Certificate of Boeing Commercial Airplanes (BCA) if it’s not satisfied changes to its safety culture are sufficient, LNA has learned.
It’s the “nuclear option” LNA has written about on previous occasions following the Jan. 5 in-flight accident/explosive decompression of a Boeing 737-9 MAX operated by Alaska Airlines. Already under heightened scrutiny by the FAA, Boeing took yet another in a series of safety blows when a special panel of experts appointed by the FAA to independently review Boeing’s safety culture issued a scathing report on Feb. 26.
The FAA levied fines—and suspended some of them—for previous safety violations 36 times, according to a tracking website. And despite pledges and actions taken to improve safety following the 2018-2019 MAX crisis, Boeing still has fallen short.
Now, with an intensive FAA audit of the 737 production line, the FAA yet again found lapses. The FAA on Feb. 29 gave Boeing 90 days to come up with an actionable plan and shape up. It did not say what would happen if Boeing either fails to produce an acceptable plan or fails to implement it satisfactorily.
And, the National Transportation Safety Board (NTSB) chair complained Boeing is withholding information in the investigation into the Alaska Airlines MAX 9 accident.
The ultimate option is to suspend the Production Certificate that authorizes Boeing to build commercially-based airliners. Such a move would have huge political and economic implications, however.
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March 12, 2024, © Leeham News: Loss of confidence in Boeing’s leadership from its customers is growing, according to industry sources.
It’s not just with the leadership at Boeing Commercial Airplanes (BCA), where CEO Stan Deal is under increasing pressure to fix a growing number of problems. Leadership at the corporate level of The Boeing Co. is also losing confidence from airlines and lessors.
Some airlines and lessors, most of whom want to remain anonymous to speak freely, want the departure of David Calhoun in addition to Deal and others in top leadership. In the past, most fingers were pointed at Deal and the leadership of BCA.
An increasing number of customers want Calhoun, the CEO of The Boeing Co., and others in the corporate leadership, also gone.
Tim Clark, the president of Emirates Airline, publicly criticized Boeing leadership many times. But he’s always avoided naming names in the public domain.
Michael O’Leary, the CEO of Ryanair, was not so reticent. Many times, he’s criticized the leadership of “Seattle” (a thinly veiled reference to Deal and his key people). But O’Leary generally defended Calhoun.
The latest series of Boeing anomalies and delivery delays prompted more customers to privately call for sweeping changes.
And, the New York Times reported that the six-week audit by the Federal Aviation Administration (FAA) found Boeing failed to follow proper procedures 37% of the time.
What happened to all the pledges by Boeing to improve safety after the 2018-19 MAX crashes that killed 346 people?
The buck stops with the CEOs of Boeing Commercial Airplanes and The Boeing Co.
March 8, 2024, ©. Leeham News: We are discussing the different phases of a new airliner program. After covering the Design and Production, we now look at the Operational phase of a new airliner family.
For the operational phase, the airplane must pass scrutiny for Continued Airworthiness. The biggest item in a regulator’s Instructions for Continued Airworthiness is the required Maintenance program to keep an airliner airworthy. We discussed airframe maintenance in the last article. Now, we look at engine maintenance.
By Tom Batchelor
Mar. 7, 2024, © Leeham News: Strengthening demand for airframe structures and engine components helped British supplier GKN Aerospace, a subsidiary of Melrose PLC, achieve higher profits and record margins in 2023.
The company, whose supply contracts encompass all leading commercial narrowbody and widebody aircraft, as well as business jet and defence customers, announced full-year results on Thursday.
Melrose posted revenue of £3.35bn ($4.29bn), 17% growth over the previous year, and adjusted operating profit of £420m (up from £186m in 2022). Operating margin reached 12.5%, up from 6.3%.
The Birmingham, England-based group enjoyed growth within its engines division of 16%, and structures growth of 18%, largely from OEM deliveries ramping-up.
CEO Peter Dilnot told investors 2023 had been a “transformational” year with “profit more than doubling, ahead of expectations.”
He said order backlogs stretching nearly a decade across Airbus and Boeing lines, and a “significant gap” in time before next-generation platforms are likely to be introduced, had resulted in “something of a harvest period” for GKN.
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By Bjorn Fehrm
March 7, 2024, © Leeham News: Over the last decades, the choice of domestic market airliners has gone from the typical 120-seater to today 200 seats or more. We will look into what drives these decisions and where the cross-over points are from, say, an Airbus A319 to A320 and then to A321. We will limit the investigation to the Airbus range as the Boeing 737 MAX range has still not their MAX 7 and MAX 10 in service.
We will use our Airliner Performance and Cost Model (APCM) to model typical sectors and investigate what load factors favor a switch.
March 5, 2024, © Leeham News: The Federal Aviation Administration (FAA) last week gave The Boeing Co. 90 days to come up with a real program that has measurable results to fix safety and quality shortcomings.
The move follows the release on Feb. 26 of a year-long safety audit by a panel of 24 industry experts appointed by the FAA. More than 50 recommendations were made. Much of the focus was on failures in Boeing’s Organization Designation Authority (ODA), the Safety Management System (SMS), and pressure and fear of retaliation of employees who came forward with alerts about safety issues during aircraft production at Boeing Commercial Airplanes (BCA).
ODAs are employed by Boeing but represent the FAA. The FAA is considering establishing an independent ODA system at Boeing.
In giving Boeing 90 days to come up with a solid safety program, Administrator Mike Whitaker was blunt: “Boeing must commit to real and profound improvements. Making foundational change will require a sustained effort from Boeing’s leadership, and we are going to hold them accountable every step of the way, with mutually understood milestones and expectations.”
But Boeing and the FAA have been down this road before. Boeing and the FAA established the ODA systems ago and the SMS was created in 2019. The FAA previously fined Boeing for failing to follow through on elements of both programs.