Under the cloud of the 737 MAX groundings in the wake of the Lion Air and Ethiopian crashes, Boeing announced it's earnings for the 1st quarter 2019.
for the 787 program, the deferred production cost decreased to $22,029 mm from $22,967 mm. This is a very healthy decrease of $938 mm. Boeing attributed the almost $1 bn decrease to the investment they made in manufacturing system but also in part to the supply chain efficiencies as well as the increase in rate to 14/month.
One down note from the earnings announcement is the cancellation of Jet airways orders due to the financial collapse of the airline. Thus Boeing not only cancelled the 737 MAX order the airline placed but they also cancelled the 10 x 787-9s that was on order. Boeing's order book for hte 787 now stands at 1,431
Given the current issues withe 737 MAX, Boeing is going to depend on the 787 and, to a lesser extent, the 777 programs to be its cash cow for the foreseeable future.
787 Spreadsheets
Showing posts with label Ethiopian. Show all posts
Showing posts with label Ethiopian. Show all posts
Wednesday, April 24, 2019
Friday, March 15, 2019
787 and 737 MAX, A Tale of Two Groundings
The two horrible 737 MAX 8 accidents within 6 months of each other and under similar if not outright identical circumstances brings to mind the grounding of the 787s 6 years ago that were prompted by LION batteries that are used by that aircraft. In each case there are similarities but also notable differences in the issues and how the different parties reacted to the safety of flight issues that were causes for both groundings.
In order to properly understand the context of these issues we should review what happened in January 2013. In a matter of one week, multiple 787-8 belonging to Japanese carriers, Japan Airlines and ANA experienced electrical fires that were traced to the lithium ion (LION) batteries that were carried in the equipment bay of the 787s and used to supply internal power to the aircraft. January 7 the first incident occurred on a JAL 787-8 that had just landed at Boston's Logan Airport. Soon after the passengers and crew had deplaned, a maintenance worker noticed a burning smell. Airport fire rescue put out a fire that had started when the LION battery exploded in the aft electrical bay.
8 days later on January 15, 2013 an ANA 787-8 was flying a domestic route when smoke had entered the cabin. The 787 made an emergency landing in Takamatsu, Japan where the passengers and crewed evacuated the airplane using the emergency slides. After this incident, ANA promptly grounded all its 787s (which numbered 17 at the time). One day later on January 16th, the FAA ordered the grounding of all US based 787s which, at that time, numbered 6 all owned by United Airlines. However, other countries took the cue from the FAA and a worldwide grounding was in effect as aviation regulators took similar actions that the FAA had implemented.
It would be over four months before the FAA certified a containment system for these batteries that would protect the aircraft in the case of another battery fire. The airplanes returned to service once the FAA approved containment system was retrofitted in in service aircraft over the course of several months starting in late April, 2013.
Currently we don't have a definitive cause for the Lion Air and Ethiopian Airlines 737 MAX 8 disasters though it appears, from initial reports, that a flight control system new to the 737 and known as the maneuvering characteristics augmentation system (MCAS) is getting faulty angle of attack information from external sensors and forcing the aircraft into a nose down attitude. This is one possible factor in the two crashes. The other factor is flight crew training on the new system as well as the documentation in the flight manuals of this system and how to respond appropriately to any emergencies caused by MCAS.
Soon after the Ethiopian crash on March 10th and over the next 2 days, aviation regulators all over the wold started grounding the 737 MAX 8 but the FAA did not act and this is where bizarre things start to happen. Take for instance that Boeing CEO Dennis Muilenburg called the President to reiterate that the 737 MAX is safe to fly. As more and more aviation safety officials and airlines around the world ground the airplane the FAA still insisted that the airplane is safe to fly. This goes one for two and half days until finally the President (not the FAA) announces the grounding of the 737 MAX 8 and 737 MAX 9. The announcement didn't come from the FAA, it came from the President which is extremely unusual and, quite frankly, disturbing. Equally disturbing is the lack of leadership in the aftermath of these crashes from the FAA unlike the response it demonstrated with the 787 battery issue. The United States was the last to ground the 737 MAX 8 (and MAX 9) after data of both crashes showed a lot of similarities.
Lastly it appears that Boeing has been working on a software fix for MCAS since the Lion Air crash but the long government shutdown in December/January delayed the implementation of testing and certification of the fix. It's unknown what the pre-shutdown plan for testing and certification was or if the shutdown had not occurred if the fix would have been rolled out in time to prevent the Ethiopian crash.
With the 787 battery issue in 2013, the FAA had lead from the get go thus reassuring airlines and their customer that they took safety of flight issues seriously. However, the FAA in 2019 abdicated its fiduciary responsibilities by not grounding the 737 MAX after the Ethiopian crash and thus leaving it to aviation safety regulators outside of the US to ensure safety of flight issues with the 737 are addressed. The FAA was had to dragged into the grounding kicking and screaming after over 300 people had died. The FAA and Boeing need to do more to ensure that the commercial aircraft used world wide are free from safety of flight issues if they want to redeem their reputation. Outside individuals who are not involved with aviation safety and implementation of the regulations need to keep quiet and let the professionals decide what is safe and what isn't.
In order to properly understand the context of these issues we should review what happened in January 2013. In a matter of one week, multiple 787-8 belonging to Japanese carriers, Japan Airlines and ANA experienced electrical fires that were traced to the lithium ion (LION) batteries that were carried in the equipment bay of the 787s and used to supply internal power to the aircraft. January 7 the first incident occurred on a JAL 787-8 that had just landed at Boston's Logan Airport. Soon after the passengers and crew had deplaned, a maintenance worker noticed a burning smell. Airport fire rescue put out a fire that had started when the LION battery exploded in the aft electrical bay.
8 days later on January 15, 2013 an ANA 787-8 was flying a domestic route when smoke had entered the cabin. The 787 made an emergency landing in Takamatsu, Japan where the passengers and crewed evacuated the airplane using the emergency slides. After this incident, ANA promptly grounded all its 787s (which numbered 17 at the time). One day later on January 16th, the FAA ordered the grounding of all US based 787s which, at that time, numbered 6 all owned by United Airlines. However, other countries took the cue from the FAA and a worldwide grounding was in effect as aviation regulators took similar actions that the FAA had implemented.
It would be over four months before the FAA certified a containment system for these batteries that would protect the aircraft in the case of another battery fire. The airplanes returned to service once the FAA approved containment system was retrofitted in in service aircraft over the course of several months starting in late April, 2013.
Currently we don't have a definitive cause for the Lion Air and Ethiopian Airlines 737 MAX 8 disasters though it appears, from initial reports, that a flight control system new to the 737 and known as the maneuvering characteristics augmentation system (MCAS) is getting faulty angle of attack information from external sensors and forcing the aircraft into a nose down attitude. This is one possible factor in the two crashes. The other factor is flight crew training on the new system as well as the documentation in the flight manuals of this system and how to respond appropriately to any emergencies caused by MCAS.
Soon after the Ethiopian crash on March 10th and over the next 2 days, aviation regulators all over the wold started grounding the 737 MAX 8 but the FAA did not act and this is where bizarre things start to happen. Take for instance that Boeing CEO Dennis Muilenburg called the President to reiterate that the 737 MAX is safe to fly. As more and more aviation safety officials and airlines around the world ground the airplane the FAA still insisted that the airplane is safe to fly. This goes one for two and half days until finally the President (not the FAA) announces the grounding of the 737 MAX 8 and 737 MAX 9. The announcement didn't come from the FAA, it came from the President which is extremely unusual and, quite frankly, disturbing. Equally disturbing is the lack of leadership in the aftermath of these crashes from the FAA unlike the response it demonstrated with the 787 battery issue. The United States was the last to ground the 737 MAX 8 (and MAX 9) after data of both crashes showed a lot of similarities.
Lastly it appears that Boeing has been working on a software fix for MCAS since the Lion Air crash but the long government shutdown in December/January delayed the implementation of testing and certification of the fix. It's unknown what the pre-shutdown plan for testing and certification was or if the shutdown had not occurred if the fix would have been rolled out in time to prevent the Ethiopian crash.
With the 787 battery issue in 2013, the FAA had lead from the get go thus reassuring airlines and their customer that they took safety of flight issues seriously. However, the FAA in 2019 abdicated its fiduciary responsibilities by not grounding the 737 MAX after the Ethiopian crash and thus leaving it to aviation safety regulators outside of the US to ensure safety of flight issues with the 737 are addressed. The FAA was had to dragged into the grounding kicking and screaming after over 300 people had died. The FAA and Boeing need to do more to ensure that the commercial aircraft used world wide are free from safety of flight issues if they want to redeem their reputation. Outside individuals who are not involved with aviation safety and implementation of the regulations need to keep quiet and let the professionals decide what is safe and what isn't.
Thursday, November 2, 2017
787 Month End Report for October 2017
Boeing starts the final final quarter of 2017 by delivering 13 787s in October but that is one shy of the expected 14. It was expected that Boeing was to deliver ZD012 (LN 19, VP-CSC) this month but the delivery of the final early build 787-8 has not been confirmed as of yet and probably has not occurred. Yet Boeing has been able to deliver 13 787 this month (2 x 787-8, 11 x 787-9) shows that Boeing is starting the sprint to the end of the year delivery goals for the 787. This 13 airplanes included Air India's 27th and last 787-8 on order as well as Ethiopian Airlines' first 787-9 taken on lease from AerCap as well as QANTAS' first 787-9. So far this year Boeing has delivered 113 787s (24 x 787-8, 89 x 787-9) and 613 since program deliveries began in September 2011 (348 x 787-8, 265 x 787-9).
Meanwhile inside the two 787 production facilities, rolled out 12 787s while starting assembly on 12. Of those 12 787s that started final assembly in October 3 were rolled out before the end of the month. Compared to the 13 airplanes that Boeing delivered the production efficiency was.92 (13 deliveries/12 roll outs). Charleston a little bit more efficient (.83) vs. Everett (1.0) this month.
During the conference call to discuss Boeing's 3rd quarter results, management reaffirmed the decision to raise 787 output to 14/month in 2019. The 787 helped increase operating margins for the firm as it increased by 9.9%. This was probably helped by the continued reduction in the deferred production cost for the 787. In the third quarter the 787 deferred production cost dropped from $26.461 bn to $25.948 bn. This equates to a quarterly reduction of $513 mm. Still that is a huge number to bring down even though Boeing increased the accounting block by 100 airplanes.
The 787-10 program saw a huge reduction in the number of flights that were flown in October. Though I'm not sure but I do believe that Boeing was focusing the program on ground testing of the aircraft. I don't believe that Boeing is any near finished with flight testing the -10 and they're continuing to build 787-10 in concurrency with the flight test program so any changes that are mandated by the FAA will have to be incorporated into these early build 787-10 airplanes most of which are going to Singapore Airlines.
787 Spreadsheets
During the conference call to discuss Boeing's 3rd quarter results, management reaffirmed the decision to raise 787 output to 14/month in 2019. The 787 helped increase operating margins for the firm as it increased by 9.9%. This was probably helped by the continued reduction in the deferred production cost for the 787. In the third quarter the 787 deferred production cost dropped from $26.461 bn to $25.948 bn. This equates to a quarterly reduction of $513 mm. Still that is a huge number to bring down even though Boeing increased the accounting block by 100 airplanes.
The 787-10 program saw a huge reduction in the number of flights that were flown in October. Though I'm not sure but I do believe that Boeing was focusing the program on ground testing of the aircraft. I don't believe that Boeing is any near finished with flight testing the -10 and they're continuing to build 787-10 in concurrency with the flight test program so any changes that are mandated by the FAA will have to be incorporated into these early build 787-10 airplanes most of which are going to Singapore Airlines.
787 Spreadsheets
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