Thursday, April 24, 2014

Boeing details 787 progress during 1st quarter earnings call

Yesterday Boeing released its 1s quarter earnings which topped analyst expectations.  The 787 deliveries has contributed significantly to the improved bottom line and Boeing was more than happy to share the progress on the 787 program.

Boeing noted that they hit the 10/month production rate fully during the quarter but also have completed the preliminary design review on the 787-10.  Boeing will now proceed with the detail design of the 787-10 which is expected to enter production around 2016.

The production rate has stabilized at both Charleston and Everett which will also help them stabilize the delivery rate.  Boeing did note that there will be continued variance in the delivery rate as they are there are 18 customers receiving their first 787 this year and typically those customers have different requirements and testing that need to be done as well as differences in financing the final payment.  They did reiterate that they will deliver 110 787s this year. So far through today (April 24, 2014) they have delivered 21 787s.  I believe they can deliver at least 2 more, possibly 3 this month for a total of 23 to 24 for the year and 5 to 6 for the month of April.  Obviously they will need to pick it up in the later months going forward.  The lack of deliveries to Air Canada, I believe, hurt their April delivery number which could have added at least 2 more to that monthly total.  IT is rumored that the delays are attributable to issues with the IFE though it is not confirmed.

As mentioned earlier, Boeing said that the production system has stabilized.  The two issues that have also contributed to slower deliveries was the wing issue by Mitsubishi and the increase in travelled work on the mid body fuselage.  With regards to the former, Boeing said that there are only 3 more aircraft that need to be inspected and fixed thus that issue is largely behind them.  On the later, there has been a great improvement in the reduction of the number of open jobs.  Sources have confirmed this to me to be true but that there is still some improvement needed with regards to the travelled work.  It does appear that there are fewer aircraft going to the EMC and are actually going to the ramp to finish off the minor jobs still opened and then proceeding to the paint hangar.

The 787-9 testing is also going really well and Boeing is still maintaining first delivery in the middle of the year.  The 6th 787-9 to be built just rolled out of final assembly.  This is ZB167 that will be delivered to United Airlines in July.  This aircraft will participate in the flight testing program as well and I anticipate that it should start flying around the middle of next month.  It will undertake F&R/ETOPs testing with the GE GEnx-1B engines.  Boeing also said that unit cost for the 787-9 have improved 30% between the first and 6th 787-9 which is tremendous.  It should continue to drop as more aircraft are introduced into the production system and the assembly has stabilized.  However Boeing is expecting that most of the production over the next couple of years will be 787-8 vs. 787-9.

Lastly, dispatch reliability is continuing to trend above 98% but Boeing still is not satisfied and will be looking to get that above 99% which is not expected to happen until later this summer when improved software is introduced to the 787 fleet.

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All Things 787: Projected 787 Deliveries


 






Thursday, April 17, 2014

2014 787 delivery prediction and production update

Thus far though the 1st quarter of 2014 Boeing seems to be on track to deliver between 100 and 110 787s.  Aircraft are still entering final assembly at a rate of about 10 to 11 per month which is good but the backlog of completed 787s around Everett has been growing.  That said, last month Boeing delivered 10 787s and they will have to average that rate for the last 3 quarters of this year.

So given the available information that is out there, I put together my best estimate of who will get a 787 this year and how many.  Some of these will be 787-9 deliveries to ANA, Air New Zealand, Scoot, Virgin and possibly American Airlines.  Additionally, Boeing will be looking to complete all contractual firm deliveries to certain customers which includes China Southern (2), Azerbaijan airlines (2), and Ethiopian (5) while British Airways will have their full complement of 8 787-8.  They still have 22 787-9 and 12 787-10 on order.  This table will be updated as warranted so you may want to bookmark it.

All Things 787: Projected 787 Deliveries




The production of 787s continue as the final assembly lines are humming away more or less).  We are seeing aircraft load into the final assembly positions at a rate of 9 to 11 aircraft per month between both lines. While it is too early to tell, the delivery rate for April may look to be around 10 which is what Boeing needs to average over the next nine months to meet its guidance.  There are 4 787s that appear to be ready to be delivered now that they have had their first customer test flights.  There are 5 more that need to have their customer acceptance flights but with 13 days left in the month this can be done easily.  Boeing has been flying a bit more so it seems that the y are starting to over come the traveled work and wing issues that have hung over the program for the last few months.  One surprise is the seemingly lack of any progress to get the 3 787s for Air Canada ready for delivery.  Two are on the flightline at Everett and a third is at the EMC.  I'm not sure but they may be looking for a triple delivery of 787s but as of today not one AC 787 has even performed a first flight despite being painted and ready to fly.  Boeing will need to conduct a few more B-1 flights in order to prepare the aircraft slated to deliver in May.


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Wednesday, April 9, 2014

Big week for the 787-9


Boeing Photo
 
The 787-9 is seen by some observers as the 787 program done right.  Indeed Boeing has applied lessons learned (and there are countless number of lessons) to the stretch of their new airplane.  The results have been excellent as it appears that Boeing has learned from past mistakes of the 787-8.


Boeing Photo
This week the 787-9 passed several milestones on the road to certification, delivery and entry into service.  We saw the rollout of the first production 787-9 for Air New Zealand, ZB003 (LN 169, ZK-NZE) from the Everett paint hangar.  The aircraft was beautiful in ANZ black and white scheme and is easily the best scheme on a 787.  This aircraft, which apparently has its passenger cabin all fitted out, went back into the EMC hangar for more change incorporation work as the FAA signs off on the tests as they are accomplished by the test flight fleet. 

Boeing Photo

Boeing is adding 2 production 787-9 to the test flight program for functionality and reliability testing (F & R) and ETOPs testing.  The last of these two aircraft, which is destined to be delivered to United Airlines in about 3 months time, was rolled out last night on April 8th and is ZB167 (LN 181).  It will do the F & R/ETOPs testing for the GEnx engines and I am guessing that it could start that testing as early the 1st or 2nd week of May. This aircraft has its passenger cabin installed.

The first aircraft to conduct F & R/ETOPs testing is ZB197 (LN 146, JA830A) which is to be delivered to ANA probably sometime this year. This aircraft also has its passenger cabin fitted out. It will conduct the same testing on the Roll Royce engines. It had conducted its B-1 flight today, April 9th and will stage the flight testing from Boeing Field.  I believe that ZB197 should complete its flight test duties sometime around the end of May to early June.

Given these development this past week, it appears that Boeing is well on its way to delivering the 787-9.

Saturday, April 5, 2014

Boeing delivers 18 787s in 1st quarter 2014; 787-9 stays on pace to complete certification by June.

Boeing reported 3rd quarter 787 deliveries on Thursday and, given the issues of the past quarter, were surprisingly good.  Boeing has delivered 18 787s in the first quarter of 2014 and 132 through March 31st.  To date Boeing has delivered 133 787s.

I was full expecting 787 deliveries to be curtailed during this quarter due to the on going travelled work as well as the wing inspections.  In March Boeing delivered 10 787s of these 6 of them were in the batch that had been identified as needing wing inspections and possible repairs.  This suggests that not all the 787 in the batch which includes LN 151 to LN 193 inclusive may have the wing issues.  Future deliveries may not be hurt as much as was feared due to this issue.  Notable deliveries were made to Kenya Airways, 2 each to Japan Airlines and Qatar Airways as well as deliveries to Royal Brunei, Aeromexico, Norwegian, United Airlines, and Air India (the first 787 assembled for them).  So far so good.  However, Boeing needs to maintain a delivery rate of 10/month in order to meet their guidance of 100-110 787 deliveries in 2014.  They were hurt by low deliveries in February where the expectation was to be a significantly higher delivery rate compared to the 4 that were actually handed over.

Production seems to have moved back to a regular pace since the travelled work issues forced Boeing to extend the amount of time that each airframe was spent in final assembly.  At the start of the year air frames were spending 34 days in final assembly.  This grew to as many as 42 days but now looks to be trending down.  The last aircraft to be rolled out, ZA136 (LN 179) for ANA spent 37 days in final assembly.  Boeing expects to be over the travelled work issues by the time LN 195 is loaded into Position 1A sometime next Friday.  According to sources, the travelled work has greatly improved thus I do expect that by May Boeing will have stabilized the production system for the 787.  They are are still building at a rate of 10/month according to my data.

While it is still early in April, Boeing does need to pick up the pace of production flight tests.  They have delivered 1 787 to Qatar Airways on April 1 and have started customer flights on ZA275 (LN 161, SP-LRF) for LOT.  This aircraft may deliver as early as next week.  However there are only 4 other aircraft that have started production flights and none of those have had customer flights as of yet.  ZA472 (LN 150, A7-BCM) is probably the closest to having customer flights.  There has been a notable lack of 787 B-1 flights, the last came on March 25th...11 days ago.  Moreover aircraft that have been out on the flightline for sometime don't appear ready to start production flights.  ZA610 (LN 160, C-GHPQ) was observed by Matt Cawby going back into the EMC for an unknown reason.  Air Canada maintains that they expect their first 787 this spring but there hasn't been anything regarding a month.  They may be able to deliver 10 787s this month but they need to start getting these airplanes into the air.

787-9 flight testing has been steaming along with very few hitches.  It appears that Boeing is on the cusp of starting functionality and reliability and ETOPs flight testing very soon. ZB197 (LN 146, JA830A) was observed by Matt Cawby as having a US civil registration decal.  I think this aircraft should be conducting its first flight within the next one week and subsequently join the 787-9 test flight program. The program has accumulated well over 1000 flight test hours and about 450 test flights.  It is expected that will accumulated over 1500 flight test hours by the time Boeing is done.  ZB197 will perform the F& R/ETOPs flight tests for the 787-9 powered by Roll Royce, ZB167 (LN 181) for United Airlines will undertake the same testing for the GE powered version of the 787-9.  This aircraft should roll out around Monday, April 7th.  I would expect it to start flying around mid to late May.  It is around this time that flight testing on the Rolls Royce powered 787-9 should almost be complete.

As far as April deliveries are concerned, we've already seen one aircraft delivered to Qatar Airways.  There should be two more than should deliver relatively soon:  ZA 275 (LN 161, SP-LRF) for LOT Polish, and ZA472 (LN 150, A7-BCM) for Qatar.  Other carriers that may see deliveries include: Air Canada, Ethiopian, Air India, Hainan, Aeromexico, Norwegian, Royal Brunei, and Jetstar (QANTAS).  A few of the still have to conduct a first flight and more still have to conduct follow on Boeing flights.


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Sunday, March 23, 2014

Mea Culpa....Boeing 787 deliveries looking good for March

Ok so last post I figured that Boeing will not deliver more than 4 787s in March.  Well I'm having a crow dinner as Boeing has delivered 5 this month and looks to possibly deliver 4 to 5 more before the end of the month.

Last week Boeing did deliver three 787s to customers (one for Japan Airlines, one for Qatar, and one for United Airlines).  Now it's looking like Boeing can deliver one to Qatar this week as well as two for ILFC (for Norwegian and Aeromexico), Royal Brunei and possibly Kenya Airways.  The later is to fly to Nairobi around April 4th but it may deliver a few days before that and fly away on April 3rd. 

It does appear that Boeing flight activities are picking up, possibly to verify any wing fixes on the aircraft that needed them.  I do believe that the airplanes are still going to the EMC to finish off travel work but also to conduct the wing inspections and implement the fix if needed.

Meanwhile the ramp in Everett continues to get crowded while the Charleston ramp is starting to see an easing of congestion.  Of the 5 787s delivered this month, 3 were Charleston built 787 and 2 were built in Everett. One aircraft that was built in Everett, ZA230 (LN 25, VT-ANA) for Air India was delivered at Charleston even though it was built in Everett.

Boeing did deliver LN 152, on the 787s that was within the batch with suspected wing issues.  It appears that this aircraft was cleared of the issues after the inspection and was subsequently delivered to Japan Airlines.

In terms of production, It appears that Boeing is continuing on rolling out 10 787s per month.  LN 190 should be the last 787 to enter final assembly this month. Lastly, I do anticipate that ZB197 (LN 146, JA830A) should make its first flight sometime in April and join the 787-9 test flight fleet.  This will be a production standard aircraft with little to no flight test wiring/equipment.

As far as April 787 deliveries goes...it's too soon to tell.  We would need to see more B-1 flights and there hasn't been one of those since March 10th...2 weeks ago.


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Monday, March 17, 2014

Boeing's March Madness - 787s starting to crowd Everett Ramp as inventory grows

The inventory of completed or almost completed 787s grows at the Boeing flightline in Everett.  So far this month there have been two 787 deliveries, both made from he North Charleston final assembly site though one of the delivered aircraft was an Everett built frame for Air India.

Testing continues to be very slow with only one aircraft going up for a single test flight per day on average.  Obviously Boeing is in the middle of inspection of the shear ties in the wings where cracks may have developed when fasteners were over-tightened with out gap fillers.  Given the dearth of 787 flight activity from Everett, it appears that many of the 787s in the batch that includes L/N 151 to L/N 193  Many of these aircraft have been built or are in final assembly.  The wing crack issues only exacerbated the delays in the 787 production stream bought on by increasing traveled work in the mid-body fuselage from South Carolina.  The increase in traveled work, as you may recall, was caused by the laying off of about 600 experienced contract employees from Charleston coupled with the increase in production of the 787 and the introduction of the 787-9 into the production system.

I don't expect Boeing to deliver more than 2 more 787s this month one to Qatar Airways and one to Japan Airlines.  Thus I expect the inventory of 787s to grow through at least mid April then to decrease thereafter but the only way to figure that out is to watch the flight activity out of both Everett and Charleston.

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Tuesday, March 11, 2014

787 testing and deliveries slow in March

On the heels of the revelation of the wing crack on certain 787s and the inspection and repair program that Boeing has implemented, the testing and deliveries of 787s to customers has slowed considerably through the first 10 days of March. This is certainly attributable to the ramp up of inspection of the block of Dreamliners that have been identified (LN 151 to LN 193 inclusive) as possibly having the cracks.  It should be noted that not all of these airplanes may have the cracks as the aircraft has to be inspected for them. 


Reminiscent of the last years grounding as well as the delays to program prior to FAA certification, the Everett ramp is filling up with 787s once again. There 13 production 787s that are out on the Everett flightline.  Boeing continues to build 787s at the same rate of 10/month.


The wing problems already exacerbate the existing issues revolving around the production of the 787 mid-body fuselage section which has been slowed due to the introduction of the higher production rate and the start of 787-9 assembly.  Boeing certainly didn't do themselves any favors when they let go of hundreds of contractors last year.


In terms of production flights, the trend, of late, is that there would be a flight made by 1 or 2 787s a day but this included a 787-8 B-1 flight made by ZA275 (LN 161, SP-LRF) for LOT.  There hasn't been a flight made by airplanes that flew last month as these aircraft are either going through inspections or are having repairs made to them.  Reports in the media say that deliveries would be delayed a few weeks with some reports saying this would be 1 to 2 weeks.


Certainly the repairs shouldn't take that much time as well as any post repair inspections but the large number of aircraft that are potentially affected may make this a longer project than most anticipate.
Boeing has delivered 1 787, ZA230 (LN 25, VT-ANA) to Air India and they could potentially deliver 2-3 787s to Qatar Airways and possibly 1 to United Airlines.  All these aircraft are pre-L/N 151 aircraft and is not subject to the wing inspections.  If they can get their act together they could still deliver 1 to 2 aircraft that are in the lot of 43 aircraft.  Most likely Boeing can deliver a total of 5 to 6 787s this month and try to catch up to deliveries during April and May.  I think they should be back on their regular delivery schedule by June but until then, 787s will continue to stack up on the flightlines at Everett and North Charleston.


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