Boeing President and CEO David Calhoun spoke with Aviation Week editors Joe Anselmo, Guy Norris and Sean Broderick about the company’s path forward through numerous challenges. Excerpts follow.

AW&ST: When you became CEO at the beginning of 2020, a lot of people said: “This guy is a caretaker. He’s going to right the ship and then hand the reins over.” You’re not going anywhere, are you? Anyone who has touched this industry knows you can’t do anything in a year or two. There are cycles in our industry, and it’s hard to see results in 10 years on some of the decisions we have to make. I wasn’t confused by that at all, and I don’t think my board was confused. This was just confirmation that it’s going to go on a little longer.

Give us your sense of the state of the market going forward. [Last year], we thought 3-5 years would be the best-case scenario for return to pre-COVID volumes. I have gotten more and more optimistic as time went on because of the vaccine. Our recovery is following the global distribution of that vaccine almost perfectly: Big, developed, domestic markets are returning the fastest because they got the greatest vaccine distribution the earliest. The U.S. market feels a little bit like the old days. I expect the long-haul recovery will be in full swing by the end of the next calendar year and into 2023. Given the state of supply chains and the aviation industry and the difficulty we had ramping before, I think this reramp is going to be another challenge. It’s actually most of what I think about.

There are reports your new airplane study has started to shift toward a single-aisle, 757-class replacement. Is that an accurate reflection of where the thinking is going right now? We are not really at any stage in calling out “Is it narrow, is it wide, how many seats?” and so forth. The big differentiator will be the technology airframers use to engineer the airplane, the simplicity with which they do it and the manufacturing techniques they use to get efficiency out of the cost. 

We can’t just talk about an incremental or marginal improvement. It has to be fundamental. So you have to prove that your modeling capability can do the next airplane and the manufacturing techniques can be used at scale and are repeatable. You have seen the developmental composites on an airplane, and you see many things; 3D printing is finding its way into many of our applications. We have to call those things out as mature before I give our team license to call out the point design on that airplane.

We recently saw Boeing’s T-7 military aircraft development prove out a model-based engineering concept that puts those things together in a remarkably quick time. Does that help the business case for the new airplane? Without a doubt. We have to do that on a very large scale and be able to repeat it. Step 1 for us is insertion of a technology like that into an existing program, because then we can prove it before we lock down on that next design. I think we have plenty of time to do this right. These are 30-, 40-, 50-year programs. You don’t want to mess up because you start one or two years early. You want to get it right, and I think COVID has given us a chance to stand back and get these pre-programs nailed down before we launch the airplane program.

In urban air mobility, Boeing has a relationship with Wisk. Where do you see that going? Wisk is probably the highest on our list as a program I want to do and double down on. It’s electric. It displaces an incredibly inefficient market on urban mobility. Its real big win is noise—this virtually takes noise out of the equation. I went to our test facility and watched it do its thing, and we have 1,500 flights now that have been flawless. But when you look at it, and you’re standing not too far from the airplane, you can hardly hear it. It’s amazing. And second, the original design—and now with Boeing support the simplicity of this design—will avoid taking on more complex technologies for marginal improvement. This thing is fully capable today to run everything autonomously. It just shows you how far we have come.

Boeing 787 deliveries have paused while you answer questions from the FAA. Are the questions related to the inspections and rework that were behind the previous five-month delivery pause, or is it new things as production is consolidated in South Carolina? Or is it a mix of the two? It’s a mix but mostly issues that we have already seen resolved and completed before we started up deliveries again. We are determined to let them take the time they need. The good news is the market is not knocking our doors down to get their hands on the airplane—in 6-12 months they will be. So that’s even more reason to just work our way through this. I’m not upset with anybody on our team or their team. The recovery is coming. I don’t want to be short an airplane when that moment arrives. And I don’t want to repeat any of the supply chain or delivery snafus we had before COVID. I want to create some disciplines across all of our delivery lines so that we can remain stable, though the uptick is not that far off.

Airbus has announced big production increases in narrowbody production by the middle of the decade. Where is Boeing going with the MAX, and can the supply chain keep up? The rates we’ve discussed are the rates we intend to get to. I do not want to get further out than that. I have a gigantic inventory of finished airplanes that, when you add it to my production rate for this year and next year, ends up with a delivery rate that’s quite robust. I’m not trying to go win back production losses that I had a year or two ago to even up my market share. And I don’t want to get back to the stage where suppliers are second-guessing us. We need transparency that suppliers can trust so when we ask them [to increase] capacity, they will do it willingly. I’m not going to try to match every rate that gets announced [by Airbus].

As you come out of the MAX grounding, the Airbus A320neo family has a big lead in orders, and the enormously popular A321XLR is coming down the pike. What’s an acceptable market share for the MAX family? That’s probably not a number I can articulate. I fully expect the percentages to be something close to the 10 years before MCAS [the Maneuvering Characteristics Augmentation System that grounded the MAX]. I do not feel disadvantaged. There are certain routes where we have advantages and certain routes where they have advantages. Ultimately, how we package and price our portfolios to deal with that set of route structures is why you get to this relative parity. I’ve seen nothing—nothing—that scares me on that front. And [when you want] long range and more passengers, the 787 is so strong in these markets. This portfolio is good. We upset the apple cart because of MCAS and shutting down the line.

Next year, you’ll end the production run of the 747. That kind of leaves a gap in the freighter market. Do you think the 777X could represent a new freighter line? The 747’s time span was amazing, but in some ways I wish we would have been more decisive [in halting production] five or even 10 years ago, because I believe so strongly in the 777 and the 777X. It is the right solution to that big part of the market. The 777X will play on its own, I think, for 50 years. It’s that efficient, that good, and its only two competitors are going by the wayside. The freighter version of it is very powerful, and I am committed to finding a way to get that program launched, and our customers are, too.

China is both a competitor and a customer for Boeing. How do you balance those dynamics? My job is to make sure the [Civil Aviation Administration of China] has everything they need to recertify the MAX. Concerning the bigger geopolitical questions between our countries, I have to advocate on behalf of the commercial aviation industry. If we can’t move airplanes into China, which is 25% of global growth in the next decade, our global leadership [in aviation] is going to suffer. I don’t think our government has any intention of ceding that leadership to the Europeans. That’s a real important objective that I think the [Biden] administration is beginning to understand in the bigger framework for discussions with China.

We are seeing regulators diverging on common issues such as recertifying the MAX. I’m not going to discount the MCAS experience and the scrutiny that comes with it. But I don’t want our global regulators to get into a battle over preeminence on a subject like safety, where they impose one set of rules and restrictions on another player’s domain, particularly in the big three markets, the U.S., Europe and China. They need to relearn how to trust each other and recreate most of the bilateral agreements that existed. I’d like it to be trilateral. It’s hard work, and unfortunately, there’s a large element of politics involved.

Boeing has committed to certifying all of its aircraft to run on sustainable aviation fuels (SAF) by 2030. Will the industry get behind that push? I think capital will jump at it. It will deploy in big scale, and the scale-players will learn how to exercise it. And then you will have an all-out competition for it. I don’t think I’m naive thinking that’s exactly the way this is going to play out, and our industry should embrace it. The hydrogen [propulsion] focus in Europe is predicated on ground-based energy development. That’s real, and it’s good and smart. Where I’ve taken exception is the timeline. I just don’t believe that is going to deliver anything for us between now and 2050. Boeing has run plenty of experiments on this with the military and with our own commercial applications. We’re not going to divorce ourselves from developments in that industry, but I have to be realistic because I don’t think sustainability is going to wait for that.

Boeing looked at the supersonic business jet market with Aerion and decided that really wasn’t your cup of tea. Now United Airlines has ordered supersonic airliners from Boom. Do you think there is a place for supersonic aircraft in the next generation of air transport? I hope so. I applaud [United CEO] Scott [Kirby] and the team taking that step forward and announcing their intentions. Boeing decided it wasn’t for us. Sustainability had a lot to do with it, amongst other things.

Last July, you told us that Boeing’s goal of achieving $50 billion in annual aftermarket revenues needed “a big adjustment.” Is there a new goal? I expect services to continue to be a mid-single-to-double-digit growth portfolio. Our digital platform operating with Jeppesen and other applications will be a double-digit grower and will take a lion’s share of our investment appetite with respect to services. We want to capitalize on technology that we bring, intellectual property that we bring and/or scale in the case of parts distribution like Boeing Distribution Services Inc. and others, scale that benefits suppliers as a distribution arm. These are the things we’ll focus on. We will not turn wrenches just to turn wrenches. And we will earn our cost of capital in each of our discrete product lines. That is a different approach than where we were pre-COVID, when growth was the most important objective with less attention to returning our cost to capital.

What is Boeing’s future in missile defense after your elimination from the Next-Generation Interceptor competition? Incumbency might have worked to our disadvantage in this case. There are other opportunities where our incumbencies might give us opportunities to take a few things from our competitors. We were disappointed, I don’t want to suggest otherwise, but there’s a lesson in it. Every now and then, you need a clean sheet of paper and a slightly different way of thinking about it than the incumbent position.

What about hypersonics? We hear more about Lockheed, Raytheon and Northrop Grumman than we do about Boeing. We’re not out of hypersonics by any stretch. I will say it’s not first on my list of things to think about. Hypersonics goes all the way back to my days at GE in the late 1990s, when we probably thought we were within five years of some answer. So that’s just a long-term research program that our Phantom Works and others continue to work on. And when there’s a little break in that action, Boeing will be a player in it.

In the last year, there have been a number of problems across the company—787 deliveries, MAX, 777X certification delays, KC-46 charges, Starliner delays. Are these unique problems, or are they evidence of a problem with Boeing’s culture? It is largely deficiencies unique to the programs they serve. Cultures can always be better, and Boeing can definitely get better. But I’m going to shake off the notion that Boeing has some unique engineering cultural issues relative to our industry. I don’t think so. I think we all like to take on big challenges and work our way toward great answers.

Editor's note: This article was updated to clarify when 747 production is expected to end.