Podcast: Is Boeing’s Recovery Still Gaining Altitude?

Analyst Scott Mikus joins Aviation Week editors to discuss third-quarter earnings and why an oversupply of narrowbodies may be looming. 

Read Scott's column here

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AI-Generated Summary

This episode of Aviation Week's Check 6 examines the third-quarter earnings of Boeing and Airbus and asks whether Boeing's recovery is gaining altitude or stalling. The conversation opens with Boeing's results. Production of the 737 MAX is constrained by a wing bottleneck, and stabilizing at 47 aircraft per month slips to 2027, pushing the step up to 52 further out. Boeing's projected free cash flow outlook through 2029 was below analyst expectations. 

Positives include the MAX 7 and MAX 10 certifications, new defense contract wins, and a negotiated agreement with its engineers and technicians. On the 777X, the final phase of certification, extended-range twin operations testing, remains the key item to watch, though development aircraft are returning to flight and crosswind testing has begun in Iceland.

The discussion then turns to demand. Concerns are raised about narrowbody oversupply as deliveries approach prior peaks, aircraft with grounded engines return to service, and growth slows in the United States and Chinese domestic markets, which points to rising retirements. 

Airbus results are described as unexciting but strong, with 547 deliveries so far against a full-year target of 870, and ambitious rate targets for the A320 family and A220 depend on engine supply. Upcoming decisions on how far to raise A350 capacity are previewed. The episode closes with the aerospace supply chain's ability to absorb higher rates, which requires long notice, capital and restored credibility with suppliers.

Key Topics:

• Boeing's Third-Quarter Results and Investor Reaction
• The 737 Max Production Ramp and Wing Bottleneck
• Boeing's Free Cash Flow Outlook
• 777X Certification and Flight Testing
• Narrowbody Oversupply and Rising Retirements
• Airbus Earnings and Delivery Targets
• Engine Supply and Airbus Production Rates
• Supply Chain Capacity and Lead Times