Monday, January 2, 2017

787 Program 2017 Look Ahead

-->
Number
Testing Complete3
To be assembled in Everett143
To be assembled in Charleston104
Parts Arriving6
Undergoing final assembly8
Storage0
Storage/Change Incorporation and Re-Work0
Change Incorporation and Re-Work3
Pre-Flight Prep7
Production Testing7
Non Customer Flight Tests1
Ready for Delivery2
Donation3
Delivered500
TOTAL787

The 787 program has accomplished much in 2016 with 137 deliveries and a turn to profitability for the program as Boeing is just starting to reduce the huge deferred production expense line item on it's balance sheet.

Part of the reduction of this expense is not just attributable to reducing across the board costs with Partnering for Success as well as internal cost management but also a greater mix of 787-9 vs 787-8 aircraft being delivered.  This trend is going to continue through 2017 as we'll see a greater number of 787-9s delivered vs. 2016.

I am projecting that Boeing will deliver 145 787s in 2017 vs. 137 in 2016 (6% increase).  This includes 118 787-9s vs. 102 that were actually delivered in 2016 (up 16% from the 2016 levels).  Thus there will be 27 787-8 deliveries vs. 35 that were delivered in 2016 (a 23% decrease year over year).  The 787-8 delivery total includes 5 early build 787-8s that should conclude a forgettable part of the 787 program.

New 787 Operators in 2017

There are going to be a few new operators of the 787 stating in 2017. Among them are:

Air Tanzania (787-8 rumored to be delivered in 2017)
El Al Airlines (787-9)
Korean Air (787-9)
Neos (787-9)
QANTAS (787-9)
and whomever buys Crystal Air's 787-8

Additionally, UAE Presidential Flight which had taken delivery of a 787-8 will also take delivery of a 787-9 this year as will Thai International Airways.

2017 Deliveries: More 787-9s

From the table below you can see the distribution of deliveries by customer and operator.  AerCap looks to be the 2017 winner with 16 787-9 deliveries coming in the new year followed by American Airlines with 13 and Norwegian Air with 10.  Unsurprisingly most these are 787-9s.


OperatorTotal Expected 787 Deliveries (2017)Total Expected 787-8 Deliveries (2017)Total Expected 787-9 Deliveries (2017)
Aeroméxico404
Air Canada10010
Air China707
Air Europa330
Air France404
Air India550
Air New Zealand202
American Airlines13310
ANA606
Avianca220
British Airways110
Crystal Air110
El Al Airlines202
Ethiopian Airlines532
Etihad Airways909
Hainan Airlines909
Japan Airlines505
KLM - Royal Dutch Airlines202
Korean Air505
LAN202
LOT Polish Airlines220
Neos101
Norwegian Air International Ltd10010
Oman Air303
QANTAS303
Royal Jordanian220
Saudi Arabian Airlines707
Scoot Pte Ltd440
Thai Airways International202
Unknown110
Thomson101
UAE Presidential Flight101
United Airlines505
Vietnam Airlines101
Virgin Atlantic Airways202
Xiamen Airlines303
TOTAL14527118


CustomerTotal Expected 787 Deliveries (2017)Total Expected 787-8 Deliveries (2017)Total Expected 787-9 Deliveries (2017)
AerCap16016
Aeroméxico404
Air Canada10010
Air China707
Air Europa330
Air France202
Air India550
Air New Zealand202
ALC303
American Airlines13310
ANA606
Avianca220
BBJ211
British Airways110
CIT Leasing404
Ethiopian Airlines330
Etihad Airways909
Hainan Airlines707
Japan Airlines505
Korean Air505
LAN101
LOT Polish Airlines220
Norwegian Air International Ltd404
QANTAS303
Royal Jordanian220
Saudi Arabian Airlines404
Saudi Ministry of Finance303
Scoot Pte Ltd440
Unknown110
TUI Travel101
United Airlines505
Vietnam Airlines101
Virgin Atlantic Airways202
Xiamen Airlines303
TOTAL14527118

The tables below summarizes the number of planned deliveries by month, build location and variant.

It's interesting to note that currently, Boeing is planning to deliver 16 787s at the end of the year.  The delivery totals are quite uneven with most deliveries coming in the second half of the year.  In fact the delivery rate for the 1st half of 2017 won't keep up with the production rate thus creating a temporary backlog that should be cleared in the second half of 2017.  Still with a production rate of 12/month equating to a yearly output of 144 787s, Boeing, it seems will be lowering the delivery rate. The logic is as follows.  While Boeing is projected to deliver 145 787s, 5 of these are early build 787s thus the delivery rate  of new build 787s in 2017 is 140 as opposed to a production rate of 144.  However, during this year Boeing will also produce 4 787-10 that will not be delivered until 2018, Thus with the introduction of the 787-10 into the production system, the 787 delivery rate will be slightly lower than would be normally expected given the 12/month rate.

The delivery of 787 number 600 should take place in late September and of course there will be just shy of 650 787s flying the world skies by the end of 2017.


MonthTotal787-8787-9CharlestonEverett
January1221048
February102846
March104628
April102846
May123939
June92727
July1331058
August1441068
September1211157
October1321167
November1411368
December1611579








LocationPlanned 2017 Deliveries
Charleston54
Everett91
 
CharlestonPlanned 2017 Deliveries
787-81
787-953

EverettPlanned 2017 Deliveries
787-826
787-965

With the cancellation of Delta's 787-8 order (inherited from Northwest during the merger of those carriers), the total 787 order book has dropped below 1200 but ominously for the 787-8, the current backlog of that variant is at 90 with 26 or those being delivered this year.  Given that there are other 787-8 orders that are still sketchy, the actual 787-8 may actually be lower than 90. I can see the number of 787-8 deliveries in future years dropping into the single digits.  Boeing will need to execute on the 787-9 and 787-10 as they will form the backbone and the cash cow of the 787 program in the years to come save a major revamp of the 787-8 in the same vein of the 777-300ER development.

Lastly, now that January 2017 is here, let's take a glance at expected deliveries for this month.  Again Boeing is scheduled to hand over 12 787s this month, 10 will be 787-9 and will be 787-8.  8 are produced in Everett and the remaining 4 are built in North Charleston.In terms of the customer mix this month, there aren't any new operators or customers receiving their first 787 this month.  2017 is looking to get off to a bold start for the 787 program.

787 Full Production Table

6 comments:

johnv777 said...

Great Analysis. Thanks

mokong78 said...

Thanks for the great heads-up. Maybe by now they can develop a derivative of the 8s with the knowlege gained over the hundreds of units successfully flying, feedback from customers and passengers. They're such a nice flying machines.

1coolguy1 said...

Uresh - I see AI just took delivery of their 23rd, after just 2 checkout flights. Apparently AI has figured out how to maintain their 787's, as I haven't read any recent Boeing bashing on their part. What has changed there, as they were the loudest and most disgruntled 787 customer. They also had trouble paying for their planes, initially. Do they have new management?

Basil said...

Hi Uresh,
do we have any idea when the 787-9 will be delivered to Qatar?
Thanks

Uresh said...

I don't have that information yet.

1coolguy1 said...

An indication of the line having matured: 4,3,2,4,2,4,3,3,5: These are the number of checkout flights in January which indicate the planes are rolling off in great shape.