Monday, May 4, 2015

787 April 2015 Month End Report

Boeing started final assembly on 12 Dreamliners in April while rolling out a further 12 from their factories. Boeing was able to deliver 11. This put Boeing's 787 production efficiency at 1.09 (12 roll out/11 deliveries) which is slightly higher than the last 2 months and is higher than desirable.  An efficiency ratio less than 1 indicates that Boeing delivering more 787s than they are rolling out and would be desirable for times when Boeing need to deliver early production and/or test flight aircraft or during times when there are deliver delays like the one that occurred when Zodiac fell behind seat deliveries.  In an ideal world roll outs would match deliveries and efficiency ratio would be 1. Thus far this year, the 787 production efficiency is slightly over 1 at 1.02.  However what is impressive to note is how spread out deliveries have been though the month of April.

Notable deliveries include a 787-9 delivered to a BBJ operator Kalair as well as 2 delayed 787-8 for American bringing their fleet to 4. American has been conducting training flights since January and will start revenue flights this month in domestic routes (Dallas to Chicago) and international operations in June.

It appears that Boeing has an opportunity to deliver 13 to 14 787s in May though almost half of these airplanes have yet to fly a B-1 test flight.  It is an ambitious delivery schedule with at least 5 of these deliveries schedule to be made on May 21, just before the start of the Memorial Day weekend.  If Etihad is able to take up two 787-9 in May then Boeing will have delivered 14 787s. Key to achieving this delivery rate is timely flight tests of the production 787s as well as no more supplier issues.

On the production front, Boeing will start final assembly on the first 787-9 for Air Canada as well as a 787-8 BBJ for the Sultan of Brunei.  Boeing appears to be aiming to start final assembly on 11 787s this month (with 4 of them in North Charleston like in April) so I have to wonder if they're already at a higher rate given that they rolled out 12 airplanes and started final assembly on 11 in April.  It's something that will be watched, particularly in North Charleston where it may appear that Boeing is at a 4/month rate.

In recent news, everyone is well aware of United's order switch of 10 787-9 for 10 777-300ER and American Airlines' deferral of 5 787s due next year now schedule for delivery in 2017 and 2018.  The impact to the order book was minimal but it does free up slots (especially for next year) that will be most likely be taken up by Hainan Airlines as they expect to place a large order for the 787-9. American's switching of delivery slots also opens up 5 near term slots for customers, potentially also for Hainan's upcoming 787-9 order. American will stall take delivery of 8 787s next year.  All in all these adjustments may actually help Boeing win more orders later this year, especially with the Paris Air Show coming up next month.  I wouldn't be surprised if Boeing announces the Hainan 787-9 order there and perhaps some exercising of some options.  Also I expect Air Austral's order for two 787-8 to be reveals (it's already booked as a UFO order on Boeing's order and delivery web site).  The next 6 weeks we may see some more unidentified 787 order being booked that will be revealed in mid June.

787 Full Production Table
787 Build Location By Operator 
787 Build Location By Customer

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