Boeing Ends 2018 with 109 net 787 Orders; Book-To-Bill for 787 in 2018 is .75

Today Boeing released its December and full year order and delivery numbers.  Boeing confirmed my earlier post of 17 787s delivered in December and 145 deliveries in 2018.  Boeing did not have any firmed 787 contracts in December thus their final net order tally is 109 while gross orders was 138.  The net book-to-bill is .75 (anything above 1 is considered good).

Boeing's aim is to have more net orders for any given year compared to actual deliveries. The 787 book-to-bill for 2018 is .75 which is quite low but it has been lower in the past.  However, Boeing is initiating a rate increase early this year to 14/month or 168 aircraft each year.  If current trends hold then Boeing would have completed the current 787 backlog of 622 787 (84 x 787-8, 384 x 787-9, and 154 x 787-10) in about 3 years, 9 months.  Of course they will get more 787s but the question is can they get enough each year to support 168.  Clearly, Boeing has confidence that they will however, Boeing has yet to close on some announced LoIs which were placed over the last few years but not firmed up (Emirates, Bamboo Airways, and Garuda Indonesia). Given that they didn't get a single new order or firmed existing LoI/MoUs at a time where they traditionally make a mad dash to firm up orders to crow about at year end is concerning.

787 Spreadsheets

Boeing Grows 787 Order Book With Aid of Asian Orders Ahead of Critical Dubai Air Show

As we barrel ahead to the end of the year, Boeing is starting to get some significant traction on the sales front for the 787.  Just today they announced a "fake" order for 300 airplanes (fake because many of these orders were already announced or placed sometime ago) from China.  The order is made up of both widebody and narrowbody aircraft though numbers and types were not detailed in the announcement (hmmmm).  For sure some of these 300 airplanes are new orders but unfortunately we have no transparency into those details as of yet.

However, in the weekly order and delivery report Boeing showed additional orders for 13 more 787s - 8 x 787-9s for China Development Bank and 5 unidentified 787s for an unidentified customer.  Additionally Boeing showed that an unidentified order for 4 787-8s was for Japan Airlines though this announcement was made sometime ago.  Thus Boeing has 96 net 787s orders for 2017 and would need about 50 more to ensure a book-to-bill of under 1.  These orders also brings the total program order book to 1,296

777 Partners announced yesterday that they are resurrecting World Airways which folded about 3 years ago and is in negotiations with Boeing for 10 x 787s (they didn't announce a the sub-type).  These airplanes would be used to fly to Latin America and Asia from hubs in Miami and LA thus this is one potential order.

The other potential order is Garuda Indonesia finally completing their order for 30 787s though that will probably happen when Trump finally stops tweeting (never happening).

The potential for a major order comes starting Monday, November 13th with the start of the Dubai Air Show.  It's at this show where we can see possible 787 orders from the region's major airlines and lessors including Emirates, EgyptAir, and ALAFCO.  Given that Boeing is sending one of the test flight 787-10 (ZC002, LN 565, N565ZC) to Dubai World Central Airport, I'm willing to bet that there should be a significant order announcement(s) planned for the airshow next week with regards to the 787 (and 737MAX).  Stay tuned next week as I'll give order updates.

787 Spreadsheets

EgyptAir to buy 6 x 787-9s

Word from different sources is that EgyptAir and Boeing have come to an agreement for the Middle Eastern carrier to buy 6 787-9s.  The official order announcement could be made this week.  In addition the carrier is buying the A320NEO from Airbus thus splitting their fleet renewal order between the major manufacturers.  It is unknown whether this order is firm or an MoU.

The order by EgyptAir continues a string of wins for the 787 program of late after getting the node from Malaysia Air (8 x 787-9) and Turkish Airlines (40 x 787-9).  If these orders are finalized prior to year end then Boeing would have booked 132 net orders for the 787 assuming no other orders or cancellations.  I'm still waiting for Garuda Indonesia's 787-9 order to be finalized.

Boeing Achieves 600th 787 Delivery

On September 26th, Boeing delivered the 600th Dreamliner coming exactly 6 years and 1 day after the first 787 was delivered to ANA (a 787-8) on September 25th, 2011.  As far as I can ascertain, the 600th aircraft was also a 787-8 for British Airways which is ZA458 (LN 609, G-ZBJI).  There wasn't any announcement or celebration recognizing this milestone but to deliver 600 airplane in 6 years is quite notable for a widebody aircraft program and especially so for the 787 which had so much trouble in the early years.

Orders seems to be picking up as mentioned in previous posts with Turkish Airlines and Malaysia's order for the 787.  There is still a chance that Dubai-based Emirates can announce a 787 order at November's Dubai Air Show and I also received word that EgyptAir will be ordering the 787 (no word on numbers or version).  EgyptAir's possible order is intriguing as they have 10 A330 series aircraft that would be ready for renewal.  The 777-300ERs are fairly new but they just retired the 777-200ER so they could possibly use the 787-10 and 787-9 to replace the 777-200ER and A330 (both -200 and -300).  If an order from EgyptAir is close I wouldn't be surprised to see it drop at Dubai as well.

I'm still waiting to hear about Garuda Indonesia's 30 x 787-9 order to be finalized.

Lastly, Boeing is celebrating the 1 millionth passenger flight of the 787.  They released a video commemorating this feat below:

Boeing reports earnings, says rate of deferred production costs is slowing; 787 order drive heads into final quarter

Boeing reported very strong 3rd quarter earnings despite increasing deferred production cost related to the 787 program.  The good news is the costs are coming at a decreasing rate.  Boeing reported that total deferred production costs increased by $577mm (down from $790 mm reported for 2Q15) to $28.3bn (up from $27.7bn reported in 2Q15).  Boeing anticipates that deferred production costs will start to decrease once the rate break to 12 occurs in the 1st quarter of next year.  Along with the increase in rate Boeign anticipates further margin increases as 787 production is increasingly made up of the 787-9 and (later on) the 787-10.  787-9 deliveries already make up the majority of 787 deliveries as over 60% of the total 787-8 order book has been delivered.  However, this doesn't mean that Boeing has given up in reducing 787-8 production costs.  Over the last 230 -8 deliveries, production costs on the -8 have been reduced by 40%.  Production costs on the first 50 -9s have decreased a dramatic 30%.  Boeing is still insisting that it will be cashflow positive on the 787 in the 4th quarter (meaning that they will start taking more money then they are spending to assemble and deliver each 787.  Lastly, Boeing continues to beat up their 787 suppliers in order to wring out additional production efficiencies and cost savings.  They expect to see a step down in supplier pricing during 2016 which will aid in reducing production costs.

Boeing's drive to finish out the 2015 787 sales campaign hits the 4th quarter and it does appear that Boeing is lining up order to announce prior to year end.  Already some potential orders are coming to light: 24 787-10 for Eva Airways which is a coup for Boeing as it was being evaluated against the A350-900 by the airline.  The airline has confirmed it's intention to order the aircraft along with 2 777-300ER.  This order still has to be finalized.  A rumor that had just surfaced today is Air China's intention to order 15 Roll Royce powered 787-10.  The carrier already has 15 787-9 on order the first of which will be delivered next year.  There's no word on when this order will be made public but I wouldn't be surprised if it's part of the huge 300 air frame order China intends to finalize with Boeing.  There are two other Chinese orders that are on the books.  One is a 24 frame order from Hainan for the 787-9 that is currently booked as unidentified.  The first 6 aircraft of this order will be delivered next year in addition to 2 787-9 that will be leased from ALC.  Xiamen Airlines is probably behind the 6 787-9 also listed as unidentified.  They'll take delivery of their first aircraft also in 2016.

One order that was anticipated to be made was Emirates choice for their new twin engine aircraft to replace the 777-200 in their fleet.  Tim Clark did say that they have all the information they need but anticipate making a final decision in 2016.  Lastly, we're still waiting for Boeing to firm up Garuda Indonesia's 30 x 787-9 MoU announced earlier this year at the Paris Air Show.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer
2015 Projected Operator Deliveries
2015 Projected Customer Deliveries

Paris Air Show 2015 - Day 1

With day 1 of the 2015 Paris Air Show in the bag, there were a few surprises but on the whole a typical first day at the bi-annual air show. Airbus, which usually saves up order announcements for the big summer air shows (Farnborough or Paris) went out to quick lead.

The surprise was Garuda Indonesia signing LoIs for 30 787-9s along with the 737Max and A350.  No one saw that one coming and it's nice to see the 787 picking up another major customer when this order is finalized.  Despite the A350 order from Garuda, the airlines widebody fleet is mostly the A330 with a few 777-300ERs.

Another surprise...Qatar's firm order for 10 x 777X.  Saj Ahmad of Strategic Aero Research says that this is not the 777X order that Boeing had booked last week along with the 15 x 787 cancellations.  In fact he confirmed my suspicion that Etihad is the source of the 777X order as well as the 15 787 cancellations (though the order is attributable to an unknown customer, it is Etihad's).  Etihad may announce the 777X order at Paris but it currently unknown if they will.

Boeing

Eva Air – 5 x 777F (LoI)

Garuda Indonesia – 30 x 787-9, 30 x 737MAX (LoI)

Qatar Airways – 10 x 777-8X (Firm), 4 x 777F (Firm)

Airbus

ALC – 1 x A350-900, 1 x A321ceo, 3 x A320ceo

Garuda Indonesia – 30 x A350 (LoI)

GECAS – 60 x A320neo (Firm)

Saudi Arabian – 20 x A330-300, 30 x A320ceo (Firm)

ATR

Air New Zealand – 1 x ATR42-600 (Firm)

Japan Air Commuter – 9 x ATR 42-600 (8 Firm, 1 option)

BahamasAir – 3 x ATR 42-600, 2 x ATR 72-600 (Firm)

Binter Canarias – 6 x ATR 42-600 (Firm)

Bombardier

WestJet Encore – 6 x Q400

COMAC

Ping An Leasing – 50 x C919 (LoI)

Puren Airlines – 7 x C919, 7 x ARJ21 (LoI)

Embraer

Air Castle – 30 x ERJ-190E2 (15 Firm, 15 Option), 30 x ERJ-195E2 (15 Firm, 15 Option)

Colorful Guizhou Airlines – 17 x ERJ-190 (7 Firm, 10 Option)

Skywest – 8 x ERJ-175 (Firm)

United Airlines – 28 x ERJ-175 (Firm)

Superjet International

Yakutia Airlines – 3 x Superjet 100LR (Firm)

Guy Norris: More Dreamliner 3 pictures inside and out

Guy Norris had a great posting this morning with more pictures of the Dreamliner 3 from yesterdays 787 interior reveal. Today Boeing will be doing evacuation slide deployment tests on Dreamliner 3, Guy reports.

Some other 787 news: Garuda Indonesia, who had a letter of intent to purchase 10 787 from Boeing has decided to swap out the 787 for the 777-300ER. This doesn't have an effect on the 787 order book as the LoI was never finalized and a deposit never placed with Boeing. It is unknown if the 777-300ER order is a firm order or an LoI.

Guy Norris: 787 - ZA003 Inside and Out

The always charming Mary Kirby had a great article on FlightGlobal about the ZA003 interior and its plans in the test flight program.

Mary Kirby: First 787 with interior to fly by month's end

Mary Kirby: Details from Boeing's 787 interior event in Everett

On Monday I'll be covering the 747-8 first flight from the East Coast and look for reports on the taxi tests that are expected to start this weekend.

787 Landing Gear Test and new 787 order coming soon?

Image Courtesy of Boeing

Dreamliner 1 started landing gear tests 3 days ago (August 9th). This is a major milestone confirming that the electrical, hydraulics and avionics systems are working together. Initially each gear (left main, right main and nose) were tested individually and then all were tested together. The gear swing tests is top replicate how the landing gear would work as if in actual flight. In order to do this, Boeing jacked the airplane off its landing gear. These tests will continue for the next few days presumably also testing the opening and closing of the landing gear doors as well.

Jon Ostrower is also reporting that Boeing will have a video available of the gear tests available soon. I'll try to post it here (once I've figured out how to do that)!

UPDATE: The video and more pics of the gear swing is here. Boeing even got some amazing footage inside the wheel well as the gear is retracted into it.

New 787 Customer?

In other 787 news, I learned from multiple sources that Boeing will reveal a buyer of 23 787-8s as early as next month. Boeing booked a 23 order from an unidentified customer back in January of this year. Since this order was booked, speculation has been rampant on the web that it must be a current customer who has already purchased the 787 and has a large number of options that they can exercised. Air Canada (who has 23 unexercised 787 options) became the prime suspect. The buyer was not revealed at Farnborough (I guess they didn't want to compete with all the other news coming out of the air show) but I have since learned that this order may be for a new 787 operator. I've also learned from sources that the customer is NOT a North American or European customer. One source told me that it probably is a company that is not subject to regulatory fillings where large material purchases such as 23 787 would have to be disclosed.

So who can it be? Well it can be an Asian, Middle Eastern or South American customer in my opinion. Those are the only regions of the world that have airlines that don't have to reveal this purchase in regulatory filings in addition to being able to afford to buy a large number of widebody aircraft and who has not previously purchased the 787. From these regions we could probably look at airlines like Thai, TAM, Emirates, Garuda Indonesia, Malaysian or even Iraq Airways (with the help of US govt. loans or the $49 bn surplus the Iraqi govt. has). One source speculated to me that TAM is going to take delivery of 4 777-300ERs in September and wouldn't the delivery ceremony make a great opportunity to announce a TAM order for the 787. This is a company that has already bought 12 A350-800, 10 A350-900 and 15 A330-200. The 787-8 would be a great size for TAM for which Airbus' only competitor in the 787-8 size category is the A330-200 (the A350-800 competes with the 787-9 and the A350-900 would compete with the 777-200ER and the proposed 787-10) and the 767-300ERs that TAM recently leased out.