September Month End Review
Boeing delivered 11 787s in September thus ending the third quarter on a high note after a a slow start in July. For the quarter, Boeing delivered 31 787s. The yearly total thus far is 80 aircraft in 2014 (includes one aircraft delivered on Oct.1) and 194 since deliveries began a little over three years ago.
The target is still 110 deliveries in 2014 and they can easily make that with and average of 10 aircraft delivered a month for the next 3 months. Earlier I had projected that Boeing can deliver around 120 aircraft. Clearly that number can't be reached but they do have the ability to deliver between 110 and 122. 787s deliveries were lackluster in July but rebounded nicely in August with 13 deliveries and maintained a strong pace with 10 in September.
In terms of efficiency. Charleston delivered 3 Dreamliners and rolled out only 2. That translates to and efficiency of .667 (the lower the number the more efficient the plant is. The Everett plane had an efficiency rating of 1 (rolled out 7 and delivered 7).
Deliveries included 3 787-9 (one each to United, ANA and Air New Zealand).
Planned deliveries for October are looking to be on the order of 11 to 13 aircraft. This includes the 10th and final 787-8 for Ethiopian that is company owned which was delivered on October 1st. Ethiopian will be taking 3 or 4 more 787-8s on lease from AerCap over the next year or so. Boeing should break 200 deliveries easily though it's difficult to speculate which aircraft/customer will have that honor.
Deliveries should include:
1 787-9 to Virgin Atlantic (expected around Oct. 6)
1 787-9 to Etihad Airways
1 787-9 to United Airlines
1 787-8 to Fuerza Aérea Mexicana (Mexican Air Force) (around Oct. 8th)
1 787-8 each to Avianca, Kenya Airways, Xiamen, Thai Airways (leased from AerCap), Royal Jordanian (leased from CIT Leasing), and Air Canada
2 787-8 to Qatar Airways
Of course much of this depends on the preparations and readiness of the individual aircraft to be delivered including undertaking ground testing and production flight tests s well as the readiness of the customer to induct them into service. Of the aircraft mentioned in the above list, three have yet to conduct their B-1 flights.
Etihad 787-9 on 40-51 Ramp. Photo Courtesy of Brandon Ferris
Japan Airlines 787-9 in the EMC. Photo Courtesy of Brandon Ferris
In terms of production, Boeing should start final assembly on 10 to 11 787s this month. 4 will start on on the main line in 40-26, 3 on the surge line in 40-24 and 3 to 4 on the Charleston line. They should roll out 10 this month but it is key that current month deliveries exceed the number of aircraft rolled out in order to reduce the carried inventory. Boeing had built up a large 787 inventory during the first half of 2014 that they are now trying to catch up to deliveries in the second half. They did a good job in the third quarter but the 4th quarter will be critical in reducing it further.
Boeing is also aiming to move the aged inventory (test flight aircraft plus the early build 787s (terrible teens). ZA006 will be delivered to the Mexican Air Force and ZA003 will be donated to the Museum of Flight in November.
In the meantime, Boeing is continuing with several sales campaigns which can yield some significant orders for the 787. However late last month they booked a cancellation for 15 787-9 for Air Berlin as part of a cost cutting move. Interestingly, at the same time Boeing booked an unidentified order for 15 787-9s. It is widely believed that the unidentified customer is Etihad which will use the aircraft either for itself or for one of the partner airlines in which the carrier has a financial interest. This is reinforced by the fact that Air Berlin didn't pay any penalties for the order cancellation because Etihad took up the order. This cancellation may have ramifications for a another sales campaign that is currently on going. It is expected that Virgin Atlantic will exercise 5 787-9 options and I wouldn't be surprised if they make that announcement when they pick up their first 787-9 from Everett on Tuesday. Sir Richard Branson also indicated that he is interested in the 787-10 so we might even see a new 787-10 order from them on Tuesday but let's wait and see on that one.
The two big sales campaign are Delta's order for 50 widebody aircraft. Delta has shortlisted the selection to the 787-9 and the A350-900 and this is where the Air Berlin cancellation may have an effect. The cancellation frees up early delivery slots which can entice Delta to buy the -9. However, with Etihad taking up the order it remains uncertain if they kept Air Berlin's delivery slots. If not then Boeing may have a leg up on Airbus for this order.
The second major 787 order would be one from Emirates which Boeing has coveted for a long time. With the success of placing an incredibly huge number of 777 (777-300ER and 777X) with Emirates, Boeing still wanted to get them signed on to the 787. With Emirates' cancellation of their entire A350 order, which will now be competed with the 787 and the A350, Boeing has a tremendous opportunity to finally place the 787 with the only holdout of the ME3 that hasn't placed a 787 order. The decision is expected to come sometime in the first quarter of next year but I suspect that Boeing will be very aggressive in the pricing vs. the A350.
787 Full Production Table