Tag Archives: Civil Aircraft

Business

Apple, Amazon, McDonald’s Headline Busy Earnings Week

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Amazon.

com Inc.,

Apple Inc.

and

Meta Platforms Inc.

are among the tech heavyweights featured in a packed week of earnings that investors will probe for indicators about the broader economy.

Other tech companies scheduled to report their latest quarterly reports include Google parent company

Alphabet Inc.

and

Microsoft Corp.

Investors also will hear from airlines such as

Southwest Airlines Co.

and

JetBlue Airways Corp.

, automotive companies

General Motors Co.

and

Ford Motor Co.

, and energy giants

Chevron Corp.

and

Exxon

Mobil Corp.

Nearly a third of the S&P 500, or 161 companies, are slated to report earnings in the coming week, according to FactSet. Twelve bellwethers from the Dow Jones Industrial Average, including

Boeing Co.

and

McDonald’s

Corp., are expected to report as well.

The flurry of results from a broad set of companies will give a sense of how businesses are faring as they deal with inflation denting consumer spending, ongoing supply-chain challenges and a stronger dollar.

People awaited the release of Apple’s latest iPhones in New York last month. The company will report quarterly results on Thursday afternoon.



Photo:

ANDREW KELLY/REUTERS

One area holding up to the challenges has been travel. Several airline companies have reported that consumers still have an appetite to spend on trips and vacations. On Friday,

American Express Co.

raised its outlook for the year in part because of a surge in travel spending.

“We expected the recovery in travel spending to be a tailwind for us, but the strength of the rebound has exceeded our expectations throughout the year,” American Express Chief Executive

Stephen Squeri

said.

In addition to airlines reporting, companies such as car-rental company

Hertz Global Holdings Inc.

and lodging companies

Hilton Worldwide Holdings Inc.

and

Wyndham Hotels & Resorts Inc.

will offer reads into leisure spending.

Overall, earnings for the S&P 500 companies are on track to rise 1.5% this period compared with a year ago, while revenue is projected to grow 8.5%, FactSet said.

Other companies will serve as a gauge for how consumers have responded to higher prices and whether they have altered their spending as a result.

Coca-Cola Co.

and

Kimberly-Clark Corp.

on Tuesday and

Kraft Heinz Co.

on Wednesday will show how consumers are digesting higher prices.

Mattel Inc.,

set to report on Tuesday, will highlight whether demand for toys remains resilient. Rival

Hasbro Inc.

issued a warning ahead of the holiday season.

United Parcel Service Inc.

will release its results on Tuesday and provide an opportunity to show how it is faring ahead of the busy shipping season. The Atlanta-based carrier’s earnings come weeks after rival

FedEx Corp.

warned of a looming global recession and outlined plans to raise shipping rates across most of its services in January to contend with a global slowdown in business.

Results from credit-card companies

Visa Inc.

and

Mastercard Inc.

will offer insights into whether inflation has finally put a dent in consumer spending after both companies reported resilient numbers last quarter.

Wireless carrier

T-Mobile US Inc.’s

numbers on Thursday will give more context to mixed results from competitors

Verizon Communications Inc.

and

AT&T Inc.

AT&T

issued an upbeat outlook on Thursday after its core wireless business exceeded the company’s expectations, whereas Verizon on Friday said earnings tumbled as retail customers balked at recent price increases.

Other notable companies lined up to report include

Chipotle Mexican Grill Inc.

on Tuesday, chicken giant

Pilgrim’s Pride Corp.

on Wednesday and chip maker

Intel Corp.

on Thursday.

Write to Denny Jacob at denny.jacob@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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World

U.S. Army Grounds Entire Fleet of Chinook Helicopters

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The Army has about 400 Chinook helicopters in its fleet, a U.S. official says. Soldiers approach a Chinook during a training exercise in Pirkkala, Finland, earlier in August.



Photo:

Roni Rekomaa/Bloomberg News

The U.S. Army has grounded its entire fleet of CH-47 Chinook helicopters because of a risk of engine fires, U.S. officials said.

Army officials are aware of a small number of engine fires with the helicopters, and the incidents didn’t result in any injuries or deaths, the U.S. officials said. One of the officials said the fires occurred in recent days.

The U.S. Army Materiel Command grounded the fleet of hundreds of helicopters “out of an abundance of caution,” but officials were looking at more than 70 aircraft that contained a part that is suspected to be connected to the problem, officials said.

The grounding of the Chinook helicopters, a battlefield workhorse since the 1960s, could pose logistical challenges for American soldiers, depending on how long the order lasts.

The grounding was targeted at certain

Boeing Co.

-made models with engines manufactured by

Honeywell International Inc.,

people familiar with the matter said. The grounding took effect within about the last 24 hours, these people said. The Army has about 400 helicopters in its fleet, one of the U.S. officials said.

Boeing declined to comment, referring questions to the Army.

A Honeywell spokesman said the engine maker worked with the Army to determine that certain components known as O-rings didn’t meet the company’s design specifications. He said the parts were installed during routine maintenance at an Army facility. While he declined to name the company that made the parts, the Honeywell spokesman said the company is working to supply the Army with replacements.

An Army spokeswoman said the service has identified the root cause of fuel leaks that caused “a small number of engine fires among an isolated number” of the helicopters. She said the Army is taking steps to resolve the issue.

“The safety of our soldiers is the Army’s top priority, and we will ensure our aircraft remain safe and airworthy,” the spokeswoman said.

The Chinook is a heavy-lift utility helicopter that is used by both regular and special Army forces, ferrying more than four dozen troops or cargo. It has been a staple of the Army’s helicopter fleet for six decades.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Gordon Lubold at Gordon.Lubold@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the August 31, 2022, print edition as ‘Army Grounds Entire Chinook Helicopter Fleet.’

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Business

Boeing Profit Falls as Executives Point to Turnaround

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The company said its second-quarter results showed it was making progress in stabilizing its operations after a series of production and regulatory problems have prevented it from delivering commercial aircraft on time and without quality issues.

“We do believe we’re in the middle of a momentum shift,” Chief Executive

David Calhoun

said in a call with analysts Wednesday.

Boeing shares were recently trading around even, having climbed more than 3% at one point.

Production of the 737 MAX has reached 31 planes a month, up from 16 a year ago, as it deals with supply-chain challenges such as engine shortages that are also affecting rival Airbus SE, which reports quarterly earnings later Wednesday. Boeing has said it stepped up 737 deliveries in June.

Executives said Wednesday Boeing appeared on the verge of receiving regulatory approval to resume deliveries of its wide-body 787 Dreamliner. A series of production issues has kept the plane maker from handing over that jet to customers for much of the last two years, leaving it with more than $25 billion of the aircraft in inventory.

A rebound in air travel has fueled airlines’ continued demand for new aircraft, which Mr. Calhoun said hasn’t slowed. “While we understand the sort of recession fears that are growing out there, so far it has not impacted the aviation industry or our customers,” Mr. Calhoun said.

Boeing is typically nearly tied for orders with rival Airbus entering the annual Farnborough Air Show, but this year it’s well behind. WSJ’s George Downs reports from the show on how Boeing is trying to catch up and what it will take to restore balance to the aviation duopoly. Illustration: Rami Abukalam

The company on Wednesday reported a profit of $160 million, or 32 cents a share, for the three months to June 30, down from $567 million, or $1, during the same period a year earlier.

The adjusted per-share loss of 37 cents, which excludes pension charges, fell short of the 13-cent loss consensus among analysts polled by FactSet. Sales in the quarter fell 2% to $16.7 billion, with analysts expecting $17.6 billion.

Results of Arlington, Va.-based Boeing’s defense business continued to be weighed down by around $400 million in charges during the quarter. This included $93 million on its Starliner space capsule in the quarter. Boeing successfully launched the Starliner in May, but it has incurred higher costs after earlier failed attempts to launch and dock with the International Space Station. It also took a $147 million charge on its MQ-25 refueling drone as costs rose to meet requirements set by the U.S. Navy.

Boeing faces a possible strike at three of its defense plants from Aug. 1 after workers rejected a new contract, which Mr. Calhoun said on CNBC could disrupt deliveries.

The company said it had positive operating cash flow in the second quarter. It reiterated the target of generating surplus cash for the full year.

Over the last couple of years, Boeing has dealt with production and regulatory problems that have impeded a recovery from two crises: a nearly two-year grounding of its 737 MAX after two fatal crashes in 2018 and 2019, and the pandemic’s hit to demand for new aircraft.

A year ago, Mr. Calhoun expressed optimism, telling analysts in July 2021: “We are turning a corner, and the recovery is gaining momentum.”

More recently, Mr. Calhoun has said this year would mark a turning point. “I can’t measure it week by week or month by month or even quarter by quarter, but I know the year is going to be substantially better,” he said at a June analyst event.

Airbus has been producing its A320 narrow-body family at a monthly rate of about 50, with a goal of reaching 75 by 2025. But Mr. Calhoun said Wednesday he couldn’t predict when Boeing would be in a position to increase its 737 MAX production rates, citing supply constraints as a barrier to ramping up.

“If I thought I had an engine supply, I’d do it today,” he said.

Boeing has had to slow production of its narrow-body aircraft this year due to supply bottlenecks, and getting stored MAX jets out of inventory has taken longer than the company anticipated. Scores of the planes have been in storage since the MAX grounding. Many of the MAX jets are bound for customers in China, which hasn’t allowed the aircraft to return to service in the country.

After previously saying it expected to deliver about 500 of 737 MAX jets by the end of the year, Boeing finance chief

Brian West

on Wednesday said the company now estimates it will deliver closer to 400 of the aircraft by the end of 2022. As of June 30, the company had handed over 181 of the aircraft to customers.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Doug Cameron at doug.cameron@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Boeing Reports Loss, Hit by Dreamliner and Starliner Setbacks

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The plane maker said it is benefiting from a recovery in air travel in recent months, and has been delivering new planes to satisfy growing demand for flights.

Boeing has sold more jets than rival

Airbus

SE this year, and efforts to cut costs have helped reduce the drain on its finances. But it is still hampered by manufacturing problems that have frozen most 787 deliveries for much of the past year and technical issues that forced its Starliner spacecraft launch to be scrubbed.

The company took a $183 million charge in the latest quarter to cover disrupted Dreamliner production, which has been slowed to about two a month from around five after Boeing accumulated more than 100 jets awaiting delivery. Boeing estimated on Wednesday the cost of the disrupted production could be as high as $1 billion.

The $185 million charge on the Starliner space taxi follows a $410 million hit last year to pay for a new launch after the first in December 2019 failed to reach the correct orbit. Faulty valves thwarted another launch attempt during the summer, with the flight now delayed until next year.

A new type of defect on Boeing’s Dreamliner aircraft surfaced recently, the latest in a series of issues that have led to a halt in deliveries. The company now has more than $25 billion of jets in its inventory. WSJ’s Andrew Tangel explains how Boeing got here. Photo: Reuters

Boeing Chief Executive

David Calhoun

said in an internal message Wednesday the charges reinforced “the importance of our efforts to enhance our own performance and drive stability in our operations.”

Mr. Calhoun likened work on the Dreamliner to earlier fixes of the 737 MAX, noting the company’s plans to produce 31 of those jets a month early next year, up from 19 currently. Boeing made various fixes to the MAX jet’s software, hardware and related training package while regulators grounded the aircraft for nearly two years.

The net loss of $132 million in the quarter compared with a $466 million loss in the year-ago period. Sales climbed 8% to $15.3 billion. The per-share loss of 19 cents compared with 79 cents a year earlier.

Boeing burned $262 million in cash during the quarter compared with $4.8 billion a year earlier. The improvement was helped by cost cuts, receipts from airplane deliveries and a tax gain. The core loss of 60 cents, which excludes pension costs, was better than the loss of 20 cents estimated by analysts polled by FactSet.

The company’s shares were slightly lower in morning trading.

Boeing’s services arm was its most profitable in the quarter. Sales of spare parts is an area of growth for aerospace right now as airlines return parked aircraft to service, and revenue at the services unit in the quarter almost matched those of the core commercial airplanes business.

Over the past year, Boeing has been dealing with a series of production defects with its 787 Dreamliner, the popular wide-body jet often used on long-haul flights. The manufacturing problems have drawn increased scrutiny from the Federal Aviation Administration.

The plane maker has built up an inventory of more than 100 Dreamliners worth more than $25 billion as it addresses defects and seeks regulatory approval for inspections before handing over the jets to customers.

Boeing expects to boost production of its Dreamliner after it resumes deliveries—though Mr. Calhoun said on CNBC he couldn’t predict when that would happen. The market for wide-body jets has been depressed during the Covid-19 pandemic as countries around the world imposed travel restrictions. That has eased pressure on Boeing while it addresses Dreamliner production issues.

Boeing has been hoping for significant aircraft deals with Chinese customers amid continued U.S. trade tensions with the country. China’s aviation regulators haven’t approved the 737 MAX to resume flying customers, but Mr. Calhoun said on CNBC the authorities have been working hard on the aircraft’s recertification.

Write to Doug Cameron at doug.cameron@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Technology

Boeing’s Starliner Launch Could Face Delay of Several Months

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Boeing Co. ’s Starliner space capsule launch could be delayed several months as the company will likely need to remove it from atop a rocket for repairs, people familiar with the matter said.

Such a delay would be a setback for Boeing’s space program. The company has spent years developing the Starliner and was supposed to launch it late last month to dock with the International Space Station, without crew on board—after a failed attempt a year and a half ago. Ultimately, the capsule is supposed to ferry astronauts to the space station.

Boeing engineers have been working to repair a problem with some of the valves in a propulsion system on the Starliner that was discovered earlier this month while the vehicle sat on a launchpad. The company first said it was investigating the valve issues last week, and on Monday disclosed that 13 valves had failed to open as expected during preflight checks.

Nine of the valves are now functioning and Boeing engineers are working to address the other four, the company said Thursday.

“Over the past couple of days, our team has taken the necessary time to safely access and test the affected valves,” said John Vollmer, a Boeing executive overseeing the Starliner.

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Science

Plans for the Boeing Starliner Launch

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Boeing Co. said a second attempt to launch its Starliner space taxi has been canceled, with launch officials on Tuesday citing inclement weather. The testing of the capsule precedes its planned first flight with astronauts on board later this year.

The National Aeronautics and Space Administration previously said it has another launch window on Wednesday.

A botched effort in late 2019 dented the record of a company that has been at the forefront of U.S. space exploration, including the Apollo missions to the moon. The Starliner is the latest of an array of new rockets, capsules and other vehicles aimed at furthering U.S. ambitions in a new space race to the moon, Mars and beyond.

The Starliner would give the U.S. more options to reach low earth orbit and the space station. U.S. astronauts had to hitch rides on Russian Soyuz spacecraft to get there following the retirement of the Space Shuttle in 2011. NASA opted to outsource a replacement through its Commercial Crew Program and picked Boeing and Space Exploration Technologies Corp., the formal name for Elon Musk’s SpaceX, to provide space taxi services.

The CST-100 Starliner is slated to deliver more than 400 pounds of NASA cargo and crew supplies, and bring back material including oxygen tanks. A mannequin named Rosie the Rocketeer is expected to be on board, equipped with sensors to capture data ahead of a crewed mission.

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Business

United’s Recent Engine Failure Spooked Denver. It’s Happened Before.

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When a Boeing 777’s engine cover broke apart and rained parts on a Denver suburb on Feb. 20, the news rang familiar to Christopher Behnam. In February 2018, the 777 he was piloting as captain suffered a similar emergency with the same engine type.

His plane, United Airlines Flight 1175 to Honolulu, was over the ocean 120 miles from the runway carrying more than 370 passengers and crew when a violent blast rocked it.

The jet shook uncontrollably, rolled sharply, and the noise was deafening, said Capt. Behnam. An engine had suffered severe damage. Years of training kicked in, the pilots regained control and shut the engine down. Even so, the plane was hard to handle. A third pilot went into the cabin and looked out the window: The engine hadn’t just failed; its cover had ripped away.

“After the explosion, it felt like she was going to fall apart,” Capt. Behnam said. “I knew I could fly the airplane. The issue was, can I fly it long enough to land it?” The pilots brought the plane to a safe landing in Hawaii.

The National Transportation Safety Board, which investigates U.S. aviation failures, concluded that a roughly 35-pound fan blade broke in the plane’s Pratt & Whitney PW4000 engine due to fatigue, spiraling forward and causing parts of the engine cover to drop into the sea.

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Business

Boeing Faces New Hurdle in Delivering Dreamliners

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Federal air-safety regulators have stripped

Boeing Co.

BA 3.28%

’s authority to inspect and sign off on several newly produced 787 Dreamliners, part of heightened scrutiny of production problems that have halted deliveries of the popular wide-body jets.

The Federal Aviation Administration said its inspectors, rather than the plane maker’s, would perform routine pre-delivery safety checks of four Dreamliners that Boeing has been unable for months to hand over to its airline customers while it grapples with various quality lapses.

The agency has long empowered Boeing to perform the final safety signoffs on the FAA’s behalf, allowing it to issue what are known as airworthiness certificates needed to hand over new jets to airlines. The FAA said it has withheld the same authority on some of the planes in previous years to keep inspectors’ skills current.

Now, the FAA said its move to withhold final-approval authority was part of a broader set of actions directed at Boeing’s 787 production issues. A spokesman said the agency could decide to have its own inspectors sign off on more Dreamliners. “We can extend the retention to other 787 aircraft if we see the need,” he said.

A Boeing spokesman said Wednesday that the company has engaged the FAA throughout its efforts to resume Dreamliner deliveries and would follow the agency’s direction on final approvals as it has in the past. The spokesman said Boeing was “encouraged by the progress our team is making” on restarting the deliveries.

After halting deliveries in October, Boeing has built up an inventory of more than 80 newly produced, undelivered Dreamliners, according to aviation consulting firm Ascend by Cirium. Boeing has said it expects to resume deliveries by the end of March.

The wide-body jets have an excellent safety record and are used frequently on international routes. Boeing learned of the FAA’s move in January and has already factored the FAA signoffs into its expected delivery schedule, a person familiar with Boeing’s planning said.

Among specific aircraft slated for final approvals by agency inspectors are two Dreamliners ordered by

United Airlines Holdings Inc.

United expects to receive the planes in late March or early April, a person familiar with the Chicago-based carrier’s plans said this week.

The Boeing spokesman said the manufacturer would adjust its delivery plans if needed so it can take the time to conduct comprehensive 787 inspections “to ensure each meets our rigorous engineering specifications.”

The suspension of deliveries has cut off a significant source of cash paid by customers as the plane maker navigates the Covid-19 pandemic and weak demand in global air travel. Bernstein analyst

Doug Harned

has estimated the Dreamliner delivery slowdown could cost Boeing as much as $8 billion in cash flow through 2020 and 2021. He expects half of that to be recovered next year as airlines take delivery and pay the rest of the cost.

Boeing said in January that it would likely continue burning cash this year but has adequate liquidity after raising billions of dollars in debt last year. Investor optimism about the broader travel recovery helped lift its shares by 21% last week. The stock gained another 3.3% on Wednesday, valuing Boeing at $149 billion.

While limited in scope, the FAA move on the Dreamliner is similar to a step the agency took after two crashes of Boeing 737 MAX jets killed 346 people in 2018 and 2019.

The FAA stripped Boeing of its authority to perform the pre-delivery safety checks on MAX jets in late 2019. At the time, a faulty flight-control system and production-related missteps with that aircraft were under congressional and regulatory scrutiny. The FAA approved the 737 MAX to resume passenger flights last year.

The Dreamliner lapses are among several quality problems Boeing has faced in recent years in its commercial, defense and space programs.

Many of the 787 quality lapses involve tiny gaps where sections of the jet’s fuselage, or body of the plane, join together. Problems have emerged in other places, too, including the vertical fin and horizontal stabilizer at the tail, according to a March 12 FAA summary of the agency’s regulatory actions viewed by The Wall Street Journal.

Boeing has previously disclosed problems with a factory process used to generate small shims—materials used to fill the small gaps where the aircraft sections are joined together. Such gaps could lead to eventual premature fatigue of certain portions of the aircraft, potentially requiring extensive repairs during routine, long-term maintenance.

In its summary, the agency said it would hold on to its Dreamliner approval authority “until it is confirmed all shimming issues are resolved and airplanes conform to the FAA-approved design.”

Write to Andrew Tangel at Andrew.Tangel@wsj.com

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