Saturday, December 23, 2017

787 2017 Year End Review and December Month End Report


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Number
Testing Complete3
To be assembled in Everett129
To be assembled in Charleston99
Parts Arriving6
Undergoing final assembly8
Storage1
Storage/Change Incorporation and Re-Work0
Change Incorporation and Re-Work0
Pre-Flight Prep12
Production Testing2
Non Customer Flight Tests3
Ready for Delivery0
Donation3
Delivered636
TOTAL902

2017 was a transformative year for the 787 program.  It was not just because the introduction of the largest and newest member of the 787 family of aircraft but also because the program is now putting the painful gestation of the 787 in the rear view mirror.  Now that Boeing has delivered the last 787 for 2017 and will shut down production on all aircraft lines for the Holiday break, this is a good time to review what happened in December and in 2017 as a whole.

Why do I say that 10`7 was a transformational year for Boeing?  3 reasons: 1) Boeing was finally able to start reducing the accumulated deferred production cost that has been a drag not just for the 787 financially but a drag on the company as a whole.  It remains to be seen if Boeing can totally eliminate the accumulated production cost over the remaining lifetime of the program. 2) The last of the early production 787-8s that were produced almost a decade ago and sat on a runway storage area at Everett were delivered to paying customers and freed Boeing from that burden that was a very visible eyesore and reminder of the programs early difficulties. 3) The introduction of the 787-10 the newest and largest member of  the family into production and testing.  The 787-9 and 787-10 will be the dominate 787 production in the years to come and is the reason why Boeing will go to 14 airplanes per month in 2019.



Boeing delivered 11 787s in December all of them 787-9.  Most notable they delivered 3 787-9s to Hainan Airlines.  The company delivered 136 787s in 2017 (26 x 787-8, 110 x 787-9).  This is one lower than last year when Boeing delivered a record 137 787s (35 x 787-8 and 102 x 787-9).  Boeing did deliver 5 early build 787-8s in 2017 and 2016.  Boeing went to 12/month rate on the 787 but the reason for the lower delivery rate in 2017 was most certainly the introduction of the 787-10 into the 787 production system for the first time.  The effect of introducing a new airplane into production causes a reduction of the build rate, in this case at Charleston, despite mitigating some of the lost production by using the Everett production line.  

During the past year Boeing rolled out 136 787s while starting final assembly on 135.  Thus Boeing was able to maintain an efficiency ratio of 1 (number of 787s rolled out divide by number of 787s delivered).  In December, Boeing rolled out 8 787s while starting assembly on 8 more aircraft.  Even though the production rate is 12/month, Boeing rolled out 787s at an average rate of 11.3 per month during 2017 due to the introduction of the 787-10 into the production system which slowed things down in the early part of 2017.

Speaking of the 787-10. This airplanes was built rolled out and started certification testing during the past year.  To date the 787-10 flight test team has accumulated over 1,030 flight hours on the three flight test aircraft.  Boeing rolled out a production 787-10 (ZC003, LN 622, 9V-SCB) that will presumably fly functionality and reliability test flights early next year.

Boeing had a good year in terms of orders though they weren't able to break 1 in the 787 book-to-bill.  As of today (December 23, 2017) Boeing had 89 net 787 orders though we won't know the final order totals until early January 2018.  The 787 program also scored some major order victories in 2017 some of which will be finalized in 2018.  These included large orders from Emirates and Turkish Airlines.  Boeing firmed up large orders from AerCap (30 x 787-9), Singapore Airlines (19 x 787-10), WestJet (10 x 787-9) and China.

Again 2017 was transformational for the 787 program and sets Boeing up nicely for the planned rate increase coming in about 2 years as well as leaving the memories of the early 787 setbacks in the rear view mirror.  I'll be back shortly to take a look at what 2018 has in store for the 787 program.

787 Spreadsheets

1 comment:

Christopher D. Dye said...

I think one of the 787's biggest advantages over the A350 is its huge base of 100s of planes in service. Hopefully this means that all the bugs have been dealt with, and most important that the plane's operating costs are known and low. Back when Tim Clark cancelled EK's A350 orders he said that he would not buy any plane until its the real time, in service operational costs were clear. It looks like these costs were clear to Clark because he bought up to 100, including options.