Wednesday, December 23, 2020

Big changes for 787 program as manufacturing defects, demand and Covid-19 sends Dreamliners into storage

The past year has been a challenging one for the Boeing 787 program.

Even before COVID-19 became a household word, global commercial aviation was already facing a downtrend in the demand for widebody aircraft like the 787.  2019 saw a decrease in new 787 orders to such a point that Boeing was considering a rate cut. Covid-19 added to the production and delivery stresses for the 787 but now the manufacturing issues with the circumferential fuselage join where the skin of the airplane does not meet certain flatness or smoothness criteria at the the areas of fuselage join has all but stopped 787 deliveries though Boeing still is continuing to push production through both 787 final assembly lines though at a vastly reduced rate.  These two factors have created a glut of stored 787s at Charleston, Everett as well as at Victorville and a couple other smaller sites around the country.

However, the issue is not relegated to just newly assembled aircraft at Everett and Charleston or stored airplanes but also to those in service with airlines around the world.  Those Dreamliners will have to be checked during their next maintenance period and then repaired.

Some readers may recall that earlier this year, a few of Boeing's customers had to ground 8 newly built 787s because of 2 separate improper manufacturing issues that, when combined, had weakened the rear fuselage sections (sections 47/48) of the each of the grounded Dreamliners.  

Now the new issue surrounding the circumferential fuselage join where the sections of the 787 are mated and fastened together can have gaps that are created by the manufacturing flaw.  The flaw is not related to work done at any one location or by any one of Boeing's partners but is related to how the strips of carbon fiber tape are laid on the fuselage mold and cured in the high temperature and pressure autoclaves.  Boeing is still investigating how this issue has developed but it appears that they have a fix or are in the process of developing a fix.

Now this issue has huge implications for Everett and Charleston and the move of all final assembly work from Washington State to South Carolina.  The last Everett produced 787 will be a 787-9 for Hawaiian Airlines (ZE315, LN 1129).  

In a letter leaked to this blog, Lane Ballard, 787 program vice president and general manager and BSC site leader, says that Boeing has been "performing quality inspections related to fuselage skin flatness and shimming on all aspects of the 787 fuselage join. These inspections are taking place on yet-to-be-delivered airplanes" to ensure quality of the airplanes to be delivered. Boeing is also engaging in join verification requirements during in sequence assembly at each final assembly position.

However there is some big news concerning Everett's involvement in addressing the manufacturing issues amongst the fleet of built but yet to be delivered 787s that are being stored. Boeing is currently planning to simultaneously reduced the 787 build rate to 5/month and transfer all 787 final assembly to Charleston in March 2021. This means that there is freed up space at Everett to do the join verification and inspections as well as the rework of those affected joins thus while production has stopped at 40-26, there will be on going work to correct the manufacturing issues taking place at Everett's newly abandoned final assembly line. The join verification, inspection and rework to current in production 787s will also slow down final assembly in order that this work be done properly.

According to Ballard, Boeing South Carolina will also free up space in two final assembly positions in 88-30 for the inspections and rework: "All four of the current Everett 787 final assembly positions will become join verification positions, and two additional positions will continue to be utilized in the Butler building (building 45-12) at the Everett site. Additional join verification positions will be created in the South Carolina final assembly facility, while the balance will remain production positions." Boeing's "intent is to leverage additional resources in Mid Body, Aft Body and Everett Final Assembly to staff the respective join verification positions at their location. This join verification activity, however, will likely extend 787 work in Everett beyond the production consolidation plan." 

Ballard also added that "Airplanes that are stored until delivery, and airplanes currently in our production system, will go through this join verification process. Stored airplanes assembled in Everett will go to Everett for join inspection and delivery, and stored airplanes assembled in South Carolina will go to South Carolina for join inspection and delivery."

It remains to be seen how deliveries in 2021 will be impacted but currently Boeing has 88 787s that are in final assembly or in pre-delivery (including storage, and predelivery test flights or awaiting the start of test flights).  This back log will undoubtedly grow in the first quarter of 2021 but should start to shrink around March-April as the program breaks rate to 5 per month and the first few airplanes to complete the inspections and rework are delivered.

Boeing's ability to deliver 787s to customer's is also going to be impacted by the financial health of those customers themselves.  Covid-19 has hit the airlines extremely hard and I don't believe that some of these airlines will survive let alone be in a financially stable condition to accept new 787s.  Norwegian is one airline that comes to mind.  They have been in trouble even before the pandemic but the drastic reduction in revenues makes their viability to continue doubtful.  The airline recovery from Covid-19 as well as the 787 delivery skyline is dependent on the availability of the newly approved vaccines not just here in the United States but elsewhere around the world.  Transmission rates worldwide need to come down if intercontinental travel that utilizes the 787 is to recover.

Lastly, I want to add a word about the future of this blog and the spreadsheets I use to track the 787 program.  I know I've been away for over a year (due to demands of my regular job) but I plan on continuing to post 787 updates when I can but unfortunately I have lost several sources that have been invaluable to this blog and to posting updates to the 787 spreadsheets.  I'll try to update the spreadsheets as best as I can but unless I get new sources of solid information it will be difficult.  If there are any followers/readers of this blog out there who can supply me with information, I as well well as the followers of this blog will be most appreciative.  Please reach out to me.


787 Spreadsheets

Sunday, December 15, 2019

787 Update for November 2019



-->
Number
Testing Complete3
To be assembled in Everett64
To be assembled in Charleston64
Parts Arriving6
Undergoing final assembly12
Storage2
Storage/Change Incorporation and Re-Work0
Change Incorporation and Re-Work0
Pre-Flight Prep9
Production Testing17
Non Customer Flight Tests0
Ready for Delivery4
Donation3
Delivered918
TOTAL1102

As the year draws to a close, Boeing is continuing to make a push to deliver 787s that have been piling up on the flightlines at Everett and Charleston.  They delivered an anemic 12 787s in November (2 x 787-8, 7 x 787-9 and 3 x 787-10). For the year, Boeing has delivered a total of 137 787s through November (8 x 787-8, 99 x 787-9, and 30 x 787-10).  Total program deliveries through November stand at 918 787s (368 x 787-8, 505 x 787-9, 45 x 787-10).






At the start of the year, I projected that Boeing would deliver around 164 jets.  To do that they would need to deliver 27 787s in December.  So far they've delivered only 4.  The big story affecting 787 deliveries is not production issues but rather deferrals of 787s by Chinese carriers. Boeing had to scramble to find new homes for airplanes that were built but not taken up by their customers.  Notable deferrals include 6 787s for Hainan Airlines, 2 leased 787s for Hong Kong Airlines.  Boeing found new customers for them: Vistara Airlines will take 4 787-9s destined for Hainan airlines but those deliveries won't start until early next year.  Bamboo Airways is taking the other two Hainan 787-9s and those should be delivered this month.  They were transferred from Hainan to China Aircraft Leasing Group which leased them to Bamboo.  The two 787-9s that were to be leased to Hong Kong Airlines from GECAS was sold to Biman Bangladesh Airlines and should be delivered this month.  The one common denominator here is that the deferrals and delays came from Chinese Airlines (Hong Kong Airlines and Hainan which owns Hong Kong Airlines).  I can't help but think if this is all related to the Trump Trade War with China or if it is a financial issue with HNA?  Suparna Airlines (also owned by HNA) was supposed to take several 787s but one of them was NTU and eventually will be going to the UAE as a business jet for the rich and infamous.   These still is another air frame for Suparna which has not flown and I am trying to find out if that aircraft will be going to another customer.  Nonetheless it has caused delays to the delivery of this airplanes which should have been delivered months ago.  Some of these airplanes should be delivered next year.

Charleston still is plagued with production issues leading to a shell game with 787s transiting between the final assembly building and the flightline to finish assembly tasks. Boeing is trying to maintain a build rate of 7/month and it appears that final assembly is taking longer than expected on the Charleston built 787s forcing Boeing to roll them out to the flight line before they are completed so that the line continues to move.  Boeing then rolls them back into 88-30 into a two or three final assembly positions where they can be worked on depending on the amount of work that is left to be done on each 787.  Charleston delivery rates however, have picked up over the last few months which has helped reduce the overcrowding at the flightline.  Everett continues to have a normal production output but their delivery rates have been very low leading to more 787s being left out on the flightline and even being stored on a closed runway that is also occupied by KC-46 tankers and 737 MAXs.  Some of the undelivered backlog belongs to the airlines that are taking some of HNA's airplanes like Vistara, Biman Bangladesh, and Bamboo.  However there are now 7 787-9s for Qatar Airways still sitting on the flightline and storage area at Everett.  Readers of this blog know Qatar Airways' habit for delays because of the smallest item that doesn't meet their standards.  All of Qatar's 787-9 are being built at Everett and the 7 airplanes are supposedly to be delivered this month. The delivery numbers will be important this month as Boeing desperately needs good news from BCA given all the 737 Max news that has come to define the company's performance this year.

The only notable order for the 787 program was from a big fish that Boeing has spent years trying to reel in: Emirates.  And it's firm order too!  Two years ago, Emirates stated their intention to buy 40 787-10s.  That was a big shot in the arm for the 787-10 which needed (and still needs) orders.  However it was just a letter of intent and as time went by the LoI was not firmed up and Emirates' fleet plans changed to the point that there were credible rumors that Emirates would not firm up the 787-10 order.  Indeed the LoI had lapsed during that time. In the last two years saw Emirates cut their A380 orders to the point that it spelled the death of the A380 and signed an LoI for the A350 and A330NEO (firmed up the A350 only). Boeing was (and still is) desperate to sign up more orders especially from a blue chip airline like Emirates. They were willing to cut some of the 777X orders that Emirates had firmed up years ago (a cut of 30 airplanes) in exchange for a firm order for 30 x 787-9s.  While it Boeing has achieved a book to bill of over 1 on the 787 this year, this order helped it with the dwindling 787 backlog and has helped keep the upcoming production rate reduction limited to the two years that Boeing has already announced.  We still have to wait for December's orders to come through in about 3.5 weeks but I'm not optimistic that will see any large orders like we saw from Emirates or Lufthansa this year.

To stay informed of the current 787 order, production and delivery information, please bookmark my spreadsheets using the link below:

787 Spreadsheets