Saturday, December 30, 2017

787 Program 2018 Look Ahead

With 2017 behind us, 2018 is a year where the 787 program will have some stability until 2019 at which time Boeing will break rate to 14 aircraft per month.

This year I expect Boeing to deliver 147 787s.  This is based on the 12/month production rate plus the three 787-10 flight test airplanes that will be delivered in the second of 2018.

Let's take a look at customers who will be taking their first new 787s or a recipients of a new 787 variant.


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1st Time 787 Operator1st Time 787-8 Operator1st Time 787-9 Operator1st Time 787-10 Operator
Air Tahiti NuiAir TanzaniaAir Tahiti NuiEtihad Airways
Air TanzaniaBiman Bangladesh AirlinesChina Eastern AirlinesSingapore Airlines
Biman Bangladesh AirlinesChina Southern AirlinesUnited Airlines
China Eastern AirlinesEva Air
Eva AirGulf Air
Gulf AirJuneyao Airlines
Juneyao AirlinesLOT Polish Airlines
Singapore AirlinesRoyal Air Maroc

Boeing is adding several new 787-9 operators a few through lessors (Air Tahiti Nui, Eva Air and LOT) but there will be 8 new 787 operators in 2018 so spotters will certainly be out at Everett and Charleston to get photos of new 787s in the livery of a new operator.

2018 is going to be exciting in that the newest 787 variant, the 787-10, is expected to be certified and delivered in the 1st quarter most likely towards the end of March.  All the -10s will be delivered from Charleston and Boeing is already producing production 787-10 with the first one for Singapore Airlines already siting on the Charleston flightline.  The introduction of the 787-10 into the production system last year pulled down the delivery rate for 2017 but now it is fully integrated into Charleston's production process.

Because of the addition of the 787-10 into the Charleston mix, it appears that all 787-8 production will be going to Everett in examining the 787 firing order.  Of the 18 787-8s that are planned to be built over the next 2 to 3 years, all of them will be built in Everett.  However, the -8 makes up a very small share of the total future 787 deliveries (63 orders left to be fulfilled) as the -9 and -10 take on a larger share of the production mix (and thus more profitable for Boeing).  Everett is expected to build a larger share of 787-9s given that they are at a 7/month production rate while Charleston is still at 5/month.

 So what will be the mix coming out of Boeing's 2 production sites?  The following tables give some insight into this.

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MonthTotal787-8787-9787-10CharlestonEverett
January11011065
February808035
March13012167
April14112168
May13010367
June13111176
July13211058
August13111167
September1019037
October1329267
November14210268
December1207575

LocationPlanned 2018 DeliveriesCharlestonPlanned 2018 DeliveriesEverettPlanned 2018 Deliveries
Charleston67787-80787-810
Everett80787-951787-970
787-1016787-100


Everett delivered 87 aircraft in 2017 while Charleston delivered 49 for a total of 136.  Because of the introduction of the 787-10 into the production system in 2017 at Charleston some production went to Everett and thus the delivery rate was higher at Everett compared to Charleston.  Now that the -10 is fully integrated into Charleston production system and Boeing is aggressively producing the -10 in 2018, Charleston's share of deliveries is increasing by 36% in 2018 while Everett's share decreases by 8% while overall 787 deliveries should climb by 8%.  this includes the three 787-10 test airplanes that will be re-worked in 2018 and delivered to Singapore Airlines and United Airlines in the 2nd half of the year.



Last year Charleston delivered 1 787-8 while Everett delivered 25.  This year Everett will deliver all 10 787-8 slated for delivery to customers.  In 2017 Charleston delivered 48 787-9s while Everett delivered 62.  In the coming year Charleston should deliver 51 787-9s (an increase of 6%) and Everett will see an increase of 8 787-9 deliveries from 62 in 2017 (an increase of 13%). Everett should out deliver Charleston mainly because Charleston is still churning out 787s at 5/month.  Due to the concurrency in the 787-10 there will be -10s that were built in 2017 but delivered later in 2018 thus increasing the Charleston delivery numbers for certain months.


The 787-9 will lead the way in deliveries given the large outstanding backlog for the aircraft.  The 787-8 will barely factor in the monthly delivery totals while the 787-10 will out deliver the -8 in 2018 (and in future years).  Over time I do expect that orders  for the -10 to rise significantly and may compete with the -9 in terms of monthly deliveries as long as the order book grows.  The monthly delivery rates should be pretty stable during 2018 with a couple of months (February due to lower production in December 2017 and August) where deliveries are lower than 11/month.


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OperatorTotal Expected 787 Deliveries (2018)Total Expected 787-8 Deliveries (2018)Total Expected 787-9 Deliveries (2018)Total Expected 787-10 Deliveries (2018)
Aeroméxico2020
Air Canada5050
Air China2020
Air Europa2020
Air France2020
Air New Zealand2020
Air Tahiti Nui1010
Air Tanzania1100
American Airlines6060
ANA3030
Avianca1100
Biman Bangladesh Airlines2200
British Airways5320
China Eastern Airlines4040
China Southern Airlines8080
El Al Airlines5050
Ethiopian Airlines2020
Etihad Airways7034
Eva Air2020
Gulf Air5050
Hainan Airlines100100
Japan Airlines4040
Juneyao Airlines3030
KLM - Royal Dutch Airlines3030
Korean Air4040
LOT Polish Airlines3030
Neos2020
Norwegian Air Shuttle ASA110110
Oman Air3030
QANTAS6060
Royal Air Maroc1010
Royal Brunei Airlines1100
Royal Jordanian1100
Saudi Arabian Airlines2020
Scoot Pte Ltd2020
Singapore Airlines8008
Thomson2020
United Airlines8044
Uzbekistan Airways1100
Virgin Atlantic Airways3030
Xiamen Airlines2020
Total1471012116


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CustomerTotal Expected 787 Deliveries (2018)Total Expected 787-8 Deliveries (2018)Total Expected 787-9 Deliveries (2018)Total Expected 787-10 Deliveries (2018)
AerCap120120
Aeroméxico1010
Air Canada5050
Air China2020
Air France2020
Air New Zealand1010
ALC7070
American Airlines6060
ANA3030
Avianca1100
Aviation Capital Group4040
Bank of Communications Leasing2020
Biman Bangladesh Airlines2200
British Airways5320
China Eastern Airlines4040
China Southern Airlines5050
CIT Leasing5050
El Al Airlines3030
Etihad Airways7034
Government of Tanzania1100
Gulf Air5050
Hainan Airlines8080
Japan Airlines4040
Juneyao Airlines3030
KLM - Royal Dutch Airlines3030
Korean Air4040
Norwegian Air Shuttle ASA5050
QANTAS6060
Royal Air Maroc1010
Royal Brunei Airlines1100
Royal Jordanian1100
Saudi Ministry of Finance2020
Scoot Pte Ltd2020
Singapore Airlines8008
TUI Travel2020
United Airlines8044
Uzbekistan Airways1100
Virgin Atlantic Airways3030
Xiamen Airlines2020
Total1471012116

Referencing the above tables, Boeing's deliveries to customers appear to be more spread out as there aren't many customers taking more then 10 787s in 2018. AerCap is the only customer taking more than 10 787s as they're projected to receive 12 787-9s during the coming year. Hainan and Norwegian are taking more than 10 during the year as operators.

By the end of 2018, several airlines will have received their full 787 order.  These customers include Aeromexico, Air China, Air New Zealand, Air Tanzania, Avianca, Bank of Communication Leasing, British Airways (787-8 and 787-9), QANTAS, Royal Brunei Airlines, Saudi Ministry of Finance (787-9), United Airlines (787-9), Virgin Atlantic Airways and Xiamen Airlines.

Production will continue at the 12/month pacing while Boeing and its supplies start to prepare to break rate in 2019 to 14/month though I don't have information as of yet on when the increase in rate will take place in 2019.

Also expected in the continued decrease in the 787 deferred production costs. since Boeing is now profitable on a production basis, people will be interested on how much Boeing is able to bring those costs down quarter over quarter.  What will be carefully looked at is if deferred productions costs decrease looks to be increasing over each successive quarter meaning that Boeing is reducing that total cost by a larger amount each quarter.

Lastly, orders should continue to come in but I expect that many current customers such as QANTAS and American Airlines will start to exercise options that are held as well as new customers (Emirates, and Turkish) firm up MoUs that were announced in 2017.  Last year's book-to-bill was under 1 for the 787 but I am cautiously optimistic that 2018 will be different especially if Boeing firms up the order from major customers and get several options converted into firm orders.  2018 will be an interesting year for the 787.  Buckle up!

As this is my last post for 2017, Happy New Year to all my readers.  I'll see you on the flip side.

787 Spreadsheets

8 comments:

Andrew Boydston said...

Great 2017 contributions regarding the 787. Thank you

Pete Templin said...

With the current production split at 7/month for Everett and 5/month for Charleston, do you have any predictions on the split once they increase to 14/month? 8 and 6 perhaps? Regardless, do you foresee the 787-10 becoming rate-constrained anytime soon (i.e. where Charleston is building 100% 787-10 and Everett is burning through the 787-8/787-9 backlog faster than Charleston is burning through the 787-10 backlog)?

Uresh said...

It’ll most likely be 7 for each production site. I don’t think the -10 is going to strain Charleston to a point where all -8 & -9 production goes to Everett

Traveling Man said...

Good stuff. Thanks for keeping us updated. Happy New Year.

Adik Avedissian said...

Happy New Year Uresh
Great site

David Jay said...

I made the point (either here or on Skyscraper City) about a year ago that the -8 would not be appropriate for Charleston. With the production volume of the -10 (exclusively in Charleston due to Dream-Lifter issues) and the production commonality of the -9 and -10 (touted by Boeing), it did not make sense to have the -8 in Charleston.

Daetrin said...

Any idea why the two -8s, LNs 652 and 660, are taking so long from rollout to delivery? Everything else in Everett seems to go from rollout to delivery in < 1 month, sometimes just a few weeks.

Something specific to the -8?

Uresh said...

Nope probably delivery dates requested by the customers