Big week for the 787 program

Boeing saw two 787 customer fly aways this week as mostly positive news about the program reinforced the view that the program is on a solid course to recover and to become profitable. 
First came news (that this blog revealed in an earlier post) that Boeing is producing the 787 at 5/month including one per month from Boeing Charleston.

This further reinforces the view that Boeing is on a solid track to achieve the planned production rate of 7/month in Everett and 3/month in North Charleston. ZA511 (LN 83, JA818A) was rolled out last week and represents the first aircraft built at the 5/month rate.

Boeing's Board of Directors gave a soft ok to Boeing's Commercial Sales staff to begin discussions with customers regarding the 787-10 which is a double stretch of the baseline 787-8.  This aircraft, which will compete head on with Airbus' A330-300 and A350-900 and will be marketed as a 777-200 replacement, has generated a lot of positive feedback.  Qatar Airways' is reportedly in negotiations to convert some of the 30 firm and 30 options that they have on the 787-8 into the 787-10.  Since the 787-10 is not due to be delivered around 2018 or 2019, conversions will allow Boeing to free up short term delivery slots for 787-8 and 787-9 thus helping sales of those versions of the Dreamliner.  Given that the program needs sales of over 1000 787s to achieve breakeven, the 787-10 will certainly help Boeing attain that as it is rumored that Boeing can sell as many as 500 787-10s.  Boeing doesn't have the full ATO (Authority To Offer) but it is widely rumored that this should happen very very shortly, (as soon as this month) which leads me to believe that Boeing will probably have one or two launch customers lined up with an MoU.  These sales won't be posted as firm until next year however.  Other potential customers include British Airways, Singapore Airlines, Ethihad, Air France, Lufthansa, American Airlines, United Airlines, and any carrier with a 777-200 or an A330-300.

The not so good news is that Gulf Air is reducing the number of 787s they have on order.  The order book once had 24 787ss for the Middle Eastern carrier which has been reduced to the current 16 and may go as low as 12.

Boeing had official handovers of 787s this week to Qatar Airways and LOT Polish Airlines.  Both aircraft were contractually delivered earlier so these "deliveries" were ceremonial (read: for the media) in nature as was the fly aways to the airlines' respective home bases.

Looking ahead Boeing will load another 787 tomorrow into position 1 on the surge line.  This will be ZA317 (LN 92, G-TUIA) for Thomson Airways, the British charter airline.  It'll be the first 787 delivered to a British carrier but it certainly won't be the only British carrier to receive the 787 in 2013.  Boeing will push out ZA183 (LN 84, JA829J) for Japan Airlines.  This aircraft should be delivered by the end of December to the Japanese carrier.

In terms of deliveries, there are currently 5 787s that are ready to be delivered but two of them are for Air India and given the precarious state of the bridge financing needed to pay for the deliveries, it is highly unlikely that they will be delivered anytime soon but Boeing has prepared them for delivery.  There are one each for Untied Airlines, Qatar and Ethiopian that are ready.  According to my sources, Qatar should take their third 787 next week, Ethiopian will take their fourth later this week and Untied should follow with their third late next week.  There are several more that are preparing to fly or are in the middle of Boeing/customer test flights.  LAN's third had its B-1 flight which was cut short due to a squawk that developed 20 minutes into the flight. Matt Caby reported that the issue was in the (air conditioning) packs. One 787 each for Qatar and United should be flying very soon though expect their deliveries to occur around December if the B-1 flights are not performed this week.  ANA's 17th aircraft is on the flightline but probably won't fly until the end of this month at the earliest. 

Boeing has the potential to deliver at least 3 more 787s this month in addition to the 2 already delivered but if Air India gets its act together then we can see two more 787s delivered this month for a total of 7.  Right now 5 is more realistic for a delivery number in November.