BA

Boeing is up almost 45% off its December low.
45% on a Dow stock in 2 months!
...hmph.
Whats it all mean?

 

1) Only 20% of the world's population has flown at least once 2) 787 is selling like hotcakes 3) 787 production is as expected 4) plenty of cash about to finance 3rd world airlines...

Metrics that move the airplane manufacturers' stock are orders and delay/ speedup in delivery schedules.

 

Yeah, but bear in mind the backlog is also a transparent metric in their reports. They will be running at 100% capacity for several more years going forward. What's humorous is none of that has changed between Dec. 26th and today; with or without fears of a recession.
It just goes to show how irrational the markets really behave and what fear can do to the herd mentality.

 

Former US ambassador Nikki R. Haley has been nominated for election to the Boeing board.

http://d18rn0p25nwr6d.cloudfront.net/CIK-0000012927/0d140b0c-c79a-4ec5-a365-59eb97242cbb.pdf

 

Rolls-Royce

Rolls-Royce recorded a whopping $3.86 billion loss for last year, largely thanks to the cost of fixing problems with its Trent 1000 engines, as used in Boeing's 787 Dreamliner. The aerospace firm also took a $247 million charge for Airbus's discontinuation of the A380 superjumbo, for which Rolls-Royce supplies Trent 900 engines. BBC

 

Boeing Sales

President Trump's Vietnamese excursion may not have yielded any progress as far as North Korean denuclearization is concerned, but Boeing did sign deals worth over $15 billion with the country's Bamboo Airways and VietJet Aviation. GE also signed a $5.3 billion deal to service the engines on 200 on-order VietJet Boeing 737 Maxs. Fortune

 

Boeing Shares

Boeing's shares have fallen as much as 10% following the Ethiopian Airlines disaster. Safran, which makes the plane's engines, also saw a stock drop. Indonesia may follow China in grounding all 737 Max 8 planes—that's where the still-recent Lion Air crash happened, featuring the same model—and South Korea has launched a special investigation of the craft. Ethiopian Airlines has now grounded its 737 Max fleet, and Cayman Airways has grounded both its 737 Max jets. Bloomberg

 

China grounds Boeing 737 Max 8 planes after deadly Ethiopian Airlines crash

China's Aviation Authority said that it has issued a notice to ground all Boeing 737 Max 8 planes used by domestic airlines in response to the crash of an Ethiopian Airlines flight, which killed 157 people. The Ethiopian Airlines crash occurred six minutes after takeoff on Sunday aboard a Boeing 737 Max 8 plane. (Business Insider)

 

Boeing weakness a buying opportunity, says expert

https://finance.yahoo.com/video/boeing-weakness-buying-opportunity-says-194806906.html

 

A little insider info for you all from Reddit.



I'm a pilot. Short/put $BADiscussion (self.wallstreetbets)

submitted 18 hours ago * by Xero-Asanari

Here's why:

There exists a new system on the 737 MAX jets. On all last-gen Boeing jets (and the vast majority of commercial and private jets), there exists systems designed to prevent a stall (the term used to describe the state an aircraft is in when it's currently aerodynamic profile is depriving it of lift to the point where the aircraft will begin to fall). These systems manipulate or provide feedback in the pilot controls to encourage a stall recovery. However these systems are easy to identify and combat, and disable.

The new system on these jets is a lot more aggressive in how it works to recover from stalls. Many would say pilots are well trained, and that is true. This system is designed to kick off when a pilot makes an instinctive step to control the system, but turns itself back on after five seconds. In short, if the aircraft believes it is stalling thanks to bad sensor data or bad software, it will fight the pilots until the aircraft either gets below 100 feet, the pilots use a cutoff switch, or the plane crashes. Although pilots might make the correct moves to combat a normal stall system, they can ultimately lose the battle with a computer that turns itself back on every few seconds, unless they move to activate an cutoff switch which prevents the plane from controlling the stab trim itself. This system is called MCAS.

The profile for this crash matches almost exactly with that of the Lion Air crash. Specifically, the pilots reported problems right after passing 100 feet after take off (the threshold for the MCAS turning on ), and fought sporadically with the controls until ultimately diving at an incredibly steep angle into the ground. It is very, very likely that MCAS is the cause of this crash. Witness statements say the plane impacted the ground nose first. The crash site is also very small, meaning the plane was travelling almost vertically when it impacted, and radio traffic indicates the pilots reported an instrumentation problem that is likely symptomatic of an MCAS or sensor failure.


Taking into consideration that any pilot worth their salt would look to mechanical problems as the first cause of physical problems with the aircraft, it is unreasonable and frankly stupid of Boeing to design software that could crash the plane if a pilot does not correctly identify this new software as the source of the problem.

Boeing and the NTSB are at the crash site at this very moment, and will have figured this out in no time flat. Based on pilot communication and command input, I have no doubt that they will find much the same situation that the Lion Air pilots faced. After fixing the issue, the plane only fights back, until ultimately the pilots are unable to prevent the aircraft from diving.

But why short/put BA? First, there is an incredible demand for these aircraft and a large number of outstanding orders. I have no doubt that many companies might seek to cancel their orders once this flaw is announced. Second, Boeing will ground the entire 737 MAX fleet globally until this problem is solved. This aircraft is already in service around the world and the grounding will cost airlines millions. If nothing else investor reaction to the news will drive the stock price down significantly over the next two weeks. We can also expect Boeing to face punitive action in the EU and US, as Boeing failed to include training material for their new system in the FCOM (basically crew operation training manual) for the aircraft, which is a big no no.

Also, this looks bad for a brand which should never have allowed an aircraft with these problems to take flight.

Feel free to ask questions.

EDIT: An earlier version said that there is nothing within the pilot's reach that could disable this new system. That is not accurate. There is a switch which disables computer control of the stabilizer trim, and the Lion Air pilot's failure to activate these two switches it what ultimately caused the crash. Also, MCAS only activates once flaps are up, and disables the engagement of autopilot. It is important to note that the period during which these accidents happened, right after takeoff, is a busy time for pilots, and at such low altitudes it is impossible to say that any pilot would be capable of immediately identifying the problem and solution before a fatal crash occurred.