This is Part One of the Industry Primers audio program on aerospace, published by Latticework from MOI Global. It is the first of two audio programs that accompany the written primer on the airframers and their suppliers, and it is the story of the industry, told for a general audience. The account is built from documented scenes, with the people named, the dates given, and the participants quoted in their own words. No background in aviation or finance is assumed, and the terms it uses, from a certificate of airworthiness to a service bulletin and a type rating, are explained as they arrive. This episode is public.
The program runs from four flights on the North Carolina coast in 1903 to the 737 line at Renton, near Seattle, and it passes through Hartford, Toulouse, Derby, Farnborough, Paris and the chambers of Parliament and Congress. Its people are test pilots and engineers, a lawyer who wrote out his reasons for not wanting to run Boeing, the founders of Airbus, a family of investors in Miami, ministers and members of Congress, accident investigators, and passengers, among them a Boeing mechanic who saved for four years to fly on Pan Am's first 707 flight. The program follows what the industry has always put at risk: companies that commit their future to a single new airplane, a city that depends on one employer, and the lives of the people aboard.
Part One stands on its own. It tells how the industry came to be shaped as it is, from the airmail contracts of the 1920s to the regulator's decisions on how many 737s Boeing may build in a month. The economics of the business, and the companies as investments, are the subject of Part Two and of the written primer.
The program runs in fourteen sections:
It Sold a Lot of Airplanes. On Sunday, August 7, 1955, Boeing's chief of flight test, Tex Johnston, rolls the Dash 80 prototype twice over the hydroplane races on Lake Washington, with Bill Allen watching from a yacht among the heads of the world's airlines, and not one airline has yet ordered the airplane.
Home Christmas. Orville and Wilbur Wright fly four times at Kill Devil Hills on December 17, 1903, the longest 852 feet in 59 seconds, and on July 1, 1927 Boeing Air Transport begins carrying the mail between Chicago and San Francisco on a Pratt & Whitney Wasp engine.
Less Than a Million Dollars. The Air Mail Act of June 12, 1934 breaks up United Aircraft and Transport and leaves Boeing, in Allen's words to Time, with "less than $1,000,000 in liquid assets," and on October 30, 1935 the Model 299 bomber crashes at Wright Field with its control locks engaged, the morning the modern checklist is traced to.
Thorny, but Well Rooted. Bill Allen, a lawyer who listed five reasons against taking the job, becomes Boeing's president on September 1, 1945, and in 1952 the board he leads commits about $16 million of the company's own money to a jet transport prototype that no airline and no air force had ordered.
Five Hundred and Twenty Fathoms. The de Havilland Comet flies the first scheduled jet passenger service on May 2, 1952, loses its certificates of airworthiness after two airplanes are lost off Italy in 1954, and on October 13, 1955 Pan American orders 45 American jets for $269 million, the first order any airline placed for American jet airliners.
A Dozen Bathrooms and No Engines. Pan American orders 25 Boeing 747s for $525 million on April 13, 1966, the largest order for commercial aircraft ever placed, and its first 747 service, due out of New York on the evening of January 21, 1970, leaves at 1:52 in the morning, nearly 7 hours late, with 332 passengers.
Turn Out the Lights. Boeing's employment falls from 101,500 to 46,800 in a little over two years, the Senate ends the supersonic transport on March 24, 1971, and on April 16, 1971 two real-estate agents put up a billboard near Sea-Tac airport asking the last person leaving Seattle to turn out the lights.
A Grave Statement. On February 4, 1971 a British minister tells the House of Commons that Rolls-Royce will ask for a receiver, its RB211 engines for the Lockheed TriStar costing £110,000 apiece more than the contract price, and on August 2, 1971 the Senate passes Lockheed's $250 million loan guarantee by 49 votes to 48.
Seventy-Seven Seconds. On March 3, 1974 a Turkish Airlines DC-10 loses its rear cargo door after leaving Paris-Orly and strikes a forest 77 seconds later, killing all 346 aboard; the support plate a service bulletin called for had never been fitted, though three inspectors had signed records saying it had.
Never With a Single Aircraft. France and Germany found Airbus Industrie on December 18, 1970, the A300 first flies on October 28, 1972, and after sales stall, Eastern Air Lines takes four on trial in 1977 and on April 6, 1978 orders 23 in all.
The Part Nobody Else Can Make. A Miami accountant and his two sons take over HEICO, a small loss-making maker of certified replacement engine parts, on New Year's Day 1990, and on May 15, 2019 a congressman confronts TransDigm over a part that cost $173 to make and for which it charged the Defense Department $6,986.
The Profits Go With the Work. In February 2001 a Boeing structures engineer, John Hart-Smith, warns in an internal paper that when the work is outsourced "all of the profits associated with the work are out-sourced, too," and the 787, launched on April 26, 2004 with whole sections built by partners, reaches its first customer in September 2011, about three and a half years late.
A Million Dollars an Airplane. Boeing's December 2011 contract with Southwest Airlines would have cut the price of every 737 MAX by at least $1 million if the regulator required simulator training, and after the crashes of Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 on March 10, 2019, which killed 189 and 157 people, Boeing agrees on January 7, 2021 to pay over $2.5 billion.
Four Bolts. On January 5, 2024 a door plug comes away from Alaska Airlines Flight 1282 at about 14,830 feet, and the NTSB traces it to Boeing's Renton factory, where the plug had been opened on September 18, 2023 and closed again without its four bolts, and where "no removal record was generated."
The program runs 1 hour 32 minutes (1:31:51). The written primer and its companion slide deck are on the Latticework Substack under the title Industry Primer: Aerospace. Part Two, the deep dive for professional investors, is a separate episode, available to members of Latticework.
This audio program is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; listeners should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.
Transcript
The transcript is available for download to members only.
