Qatar to exercise 787 options?

Boeing Photo

Boeing delivered two 787-8 Dreamliners to Qatar Airways today in Everett in a ceremony attended by Akbar (U-Turn Al) Al-Baker.  Qatar Airways will have their full complement of 30 787-8s by the end of next year but they also have 30 options still waiting to be exercised.

Al Baker said that Qatar Airways will look to firm the 30 options that they hold for the 787 though no timing was given.

The interesting question is now which model and when will they be delivered.  As some readers may recall, Qatar Airways staff had a tense relationship with Boeing workers at Charleston where Boeing had decided that Qatar's 787-8s would be built. Thus if they selects the 787-10 can Qatar's staff work with the Boeing Charleston staff? Certainly if Qatar firms up the 787-9 they can be built in Everett but at the end of the day Qatar will choose the right mix of 787s regardless of where they're built.

As to when they firm it up, well I had expected that to happen at the Paris Air Show this pat summer.  I also had expectation of an announcement today (I'm sure Boeing and Al-Baker did talk about firming the options behind close doors) but I think it may happen late next month if it is to happen before year end but quite possibly we can see the order at next week's Dubai Air Show.

Paris Air Show 2015 - Day 4

Talk about pulling your nuts out of a fire at the last minute.  Airbus was on the verge of being embarrassed on their home soil until a last minute deal with Wizz Air for 110 A321neos saved their chestnuts.  There are two bright spots for Boeing: 1) they were able to hold their own with Airbus in terms of Air Show orders this year and apparently the Wizz Air order could have easily gone in Boeing's favor and 2) Boeing did beat Airbus on widebody orders.

However, everyone knows that this is just 4 days out of 365 and we have a whole other 6 months + coming up that would see some major fleet contests being decided including the Emirates decision widely expected in November.

Boeing

AerCap – 100 x 737 Max 8 (Firm)

Ethiopian – 6 x 787-8 (Firm)

Eva Air – 5 x 777F (LoI)

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

Korean Air – 30 x 737 Max 8 (LoI), 20 x 737 Max 8 (Options), 2 x 777-300ER (LoI)

Minsheng Financial Leasing – 30 x 737 Max and NG (MoU)

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

Ruili Airlines (through AVIC Leasing) – 30 x 737 Max (LoI)

SMBC Aviation Capital – 10 x 737 Max 8 (Firm)

Sriwijaya Air – 2x 737-900ER (Firm), 20 x 737-800 (Options)

Unknown Customer – 1 x BBJ 737 Max 9 (Firm)

Volga-Dnepr – 20 x 747-8F (MoU)

Airbus

ALC – 1 x A350-900, 1 x A321ceo, 3 x A320ceo (Firm)

Eva Air – 4 x A330-300ceo (MoU)

Korean Air – 30 x A321neo (Firm), 20 x A321neo (Options)

Garuda Indonesia – 30 x A350 (LoI)

GECAS – 60 x A320neo (Firm)

Peach Aviation – 3 x A320ceo (Firm)

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

Synergy – 62 x A320neo (MoU)

Unknown Customer – 60 x A320neo (MoU)

Wizz Air – 110 x A321neo (MoU), 90 x A321neo (Purchase Rights)

VietJetAir – 6 x A321 (Firm)

ATR

Air Madagascar - 3 x ATR72-600 (Firm)
Air New Zealand – 1 x ATR72-600 (Firm)

BahamasAir – 3 x ATR42-600, 2 x ATR 72-600 (Firm)

Binter Canarias – 6 x ATR72-600 (Firm)
Braathens Aviation – 5 x ATR72-600 (Firm), 10 x ATR72-600 (Option)

Cebu Pacific Air – 16 x ATR72-600 (Firm), 10 x ATR72-600 (Option)

Japan Air Commuter – 8 x ATR42-600 (8 Firm, 15 option)
Unknown Customer - 2 x ATR72-600 (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)

Paris Air Show 2015 - Day 3

Day three bought more widebody orders for Boeing especially a nice shot in the arm for the 747-8.  Volga-Dnepr signed an MoU for 20 747-8F that will be partly purchased direct or acquired via lease.  Another shot in the arm came in the form of Ethiopian taking up 6 early build 787-8 airframes which I reported earlier but just confirmed today by the airline and Boeing.  This leaves Boeing with only 4 early build 787-8 left to sell:  LN4, LN5, LN17, & LN19 (the last 3 are GE-powered airplanes).

Airbus booked a couple of major MoU for the A320neo but that was about it.  Tomorrow should be the last day for any deals to be announced.  I'm still hoping that Boeing will announce the customers behind a couple of 787-9 deals that have so far remained unknown.

Boeing

AerCap – 100 x 737 Max 8 (Firm)

Ethiopian – 6 x 787-8 (Firm)

Eva Air – 5 x 777F (LoI)

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

Korean Air – 30 x 737 Max 8 (LoI), 20 x 737 Max 8 (Options), 2 x 777-300ER (LoI)

Minsheng Financial Leasing – 30 x 737 Max and NG (MoU)

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

Ruili Airlines (through AVIC Leasing) – 30 x 737 Max (LoI)

SMBC Aviation Capital – 10 x 737 Max 8 (Firm)

Sriwijaya Air – 2x 737-900ER (Firm), 20 x 737-800 (Options)

Unknown Customer – 1 x BBJ 737 Max 9 (Firm)

Volga-Dnepr – 20 x 747-8F (MoU)

Airbus

ALC – 1 x A350-900, 1 x A321ceo, 3 x A320ceo (Firm)

Eva Air – 4 x A330-300ceo (MoU)

Korean Air – 30 x A321neo (Firm), 20 x A321neo (Options)

Garuda Indonesia – 30 x A350 (LoI)

GECAS – 60 x A320neo (Firm)

Peach Aviation – 3 x A320ceo (Firm)

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

Synergy – 62 x A320neo (MoU)

Unknown Customer – 60 x A320neo (MoU)

VietJetAir – 6 x A321 (Firm)

ATR

Air Madagascar - 3 x ATR72-600
Air New Zealand – 1 x ATR72-600 (Firm)

BahamasAir – 3 x ATR42-600, 2 x ATR 72-600 (Firm)

Binter Canarias – 6 x ATR72-600 (Firm)
Braathens Aviation – 5 x ATR72-600 (Firm), 10 x ATR72-600 (Option)

Cebu Pacific Air – 16 x ATR72-600 (Firm), 10 x ATR72-600 (Option)

Japan Air Commuter – 8 x ATR42-600 (8 Firm, 15 option)
Unknown Customer - 2 x ATR72-600 (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)

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)

787 Flight testing, Paris 2015 preview, and 787 order cancellation

In a period of 4 days, June 10 to June 13th, the 787 program conducted 7 B-1 flights which is quite a few in a short span of time.  It does raise the question of how many 787s Boeing is planning to deliver by the end of this month.  Thus far in June Boeing has delivered 2 787-9s, a low number for sure.  But like in previous quarter ends, they usually end the quarter with a slew of deliveries and the 2nd quarter, 2015 doesn't look to be any different.  One thing that is interesting to note is that it appears North Charleston will deliver only 2 787s this month.  Given the flight test activity of the last few days, I believe that Boeing will ultimately deliver a total of 12 787s including the 2 already delivered.  This will include around 8 787-9 and 4 787-8.

Last week, we saw a cancellation for 15 787s.  We still don't know which model or the customer but Jon Ostrower tweeted a possible tantalizing clue:

Boeing nabs 10 777Xs. Customer count unchanged at six - someone topped up. Books cancellation for 15 787s, related? pic.twitter.com/hrV1g5hme4

— Jon Ostrower (@jonostrower) June 11, 2015

If the customer who bought the 10 777X is the same as the one who cancelled the 787s then the only tow possibilities can be ANA and Etihad.  However this is where it gets interesting.

When Air Berlin cancelled it's order for 15 787-9s last year on September 26th, another order for 15 787-9 also was recorded on the same day.  It is widely rumored that there was transfer of the order from Air Berlin to Etihad which, given that Etihad partly owns Air Berlin, is unsurprising.  It now appears that Etihad may have traded in those 15 787s (the unidentified 787-9) for the 10 777X increasing their order to 35.  More information may be coming in the next few days during the Paris Air Show.

So speaking of the Paris Air Show, from some of the noise that I've been hearing, it may be quiet with regards to 787 orders though there may be an announcement by Qatar Airways regarding their 787 options of which they have 30.  Also I expect that the some of the unidentified customers for the 787 will be made public including Ethiopian's top up order for 6 787s coming from the early build 787s that are currently stored at Everett. Hainan's 30 aircraft order for the 787-9 should also be made public during the coming week.  I'll be staying on top of the news coming from Le Bourget during the week and updating this blog as the news comes out....unless I'm a sleep.

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
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787 May Month End Review

Boeing had a pretty good month delivering 12 787s to customers.  Among the highlights is the 13th and last 787-8 for TUI Travel and 2 787-8 for American Airlines.  It does seem that for American the Zodiac seat issue is behind them but it appears the same cannot said for Etihad.  They have 3 787-9s waiting on the flightline, only 1 of which has flown.  Boeing achieved and production efficiency ratio of 0.83 (roll out of 10 787s vs. delivery of 12 aircraft).  Again anything lower than 1 is a good sign that Boeing is moving to reduce the backlog of 787s and make the production, testing and delivery process more efficient.  Overall production efficiency is just under 1 at 0.98 with Charleston being a little bit more efficient (0.94) versus Everett (1.0) thus far this year.

One notable achievement is that Boeing was able to deliver a 787-9 to Scoot in under 70 days from the time the aircraft started final assembly.  ZB130 (LN 308, 9V-OJD) started final assembly on March 23, 2015, rolled out on April 22nd, 2015, had its first flight on May 6, 2015 and was delivered on May 29th, 2015.  A total of 67 days.  This may well have been a test of new processes in the production system designed to cut build and delivery time significantly especially before the two main 787 lines in 40-26 and 88-30 go up in rate by the end of this year.  Eventually both lines are to be producing 7 aircraft each by the end of the decade but the upshot is that Boeing needs to cut the total time from the start of final assembly to delivery.

Boeing started final assembly on 10 787s including a 787-8 BBJ for the Sultan of Brunei and Air Canada's first 787-9.  Of these 10, 4 are 787-9 and 6 are 787-8.  Over the course of the next few months I expect that this ratio will change as the number of 787-8 remaining to be built (barring new orders) decreases.  If Boeing is to sell more 787-8s, I am starting to believe that they will need to look to reduce weight of the aircraft as well as introduce other fuel saving measures including urging GE and Rolls Royce to improve the fuel burn of their engines.  Roll Royce seems to be on that path with the Trent-1000-TEN.

Boeing rolled out 10 787s including the first 787-8 for PrivatAir.  Of the 10 rolled out, 5 are 787-8 and 5 are 787-9.

For next month Boeing should deliver 14 787s prior to the end of the second quarter.  Of these 14, 9 should be 787-9 including the three aforementioned Etihad airplanes.  Air India's final 787-8 (assuming they convert the remaining 6 into 787-9s) will also be delivered in June as will Japan Airlines' first 787-9 which coincidentally is the first of the 3 787-9 test airplanes to be delivered.  Another notable delivery is the first 787-9 for Vietnam Airlines which is rumored to be performing the flying display at this year's Paris Airshow in mid June.  Lastly, the penultimate 787-8 for both Kenya Airways and Xiamen Airlines will be delivered in June.

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
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787 April 2015 Month End Report

Boeing started final assembly on 12 Dreamliners in April while rolling out a further 12 from their factories. Boeing was able to deliver 11. This put Boeing's 787 production efficiency at 1.09 (12 roll out/11 deliveries) which is slightly higher than the last 2 months and is higher than desirable.  An efficiency ratio less than 1 indicates that Boeing delivering more 787s than they are rolling out and would be desirable for times when Boeing need to deliver early production and/or test flight aircraft or during times when there are deliver delays like the one that occurred when Zodiac fell behind seat deliveries.  In an ideal world roll outs would match deliveries and efficiency ratio would be 1. Thus far this year, the 787 production efficiency is slightly over 1 at 1.02.  However what is impressive to note is how spread out deliveries have been though the month of April.

Notable deliveries include a 787-9 delivered to a BBJ operator Kalair as well as 2 delayed 787-8 for American bringing their fleet to 4. American has been conducting training flights since January and will start revenue flights this month in domestic routes (Dallas to Chicago) and international operations in June.

It appears that Boeing has an opportunity to deliver 13 to 14 787s in May though almost half of these airplanes have yet to fly a B-1 test flight.  It is an ambitious delivery schedule with at least 5 of these deliveries schedule to be made on May 21, just before the start of the Memorial Day weekend.  If Etihad is able to take up two 787-9 in May then Boeing will have delivered 14 787s. Key to achieving this delivery rate is timely flight tests of the production 787s as well as no more supplier issues.

On the production front, Boeing will start final assembly on the first 787-9 for Air Canada as well as a 787-8 BBJ for the Sultan of Brunei.  Boeing appears to be aiming to start final assembly on 11 787s this month (with 4 of them in North Charleston like in April) so I have to wonder if they're already at a higher rate given that they rolled out 12 airplanes and started final assembly on 11 in April.  It's something that will be watched, particularly in North Charleston where it may appear that Boeing is at a 4/month rate.

In recent news, everyone is well aware of United's order switch of 10 787-9 for 10 777-300ER and American Airlines' deferral of 5 787s due next year now schedule for delivery in 2017 and 2018.  The impact to the order book was minimal but it does free up slots (especially for next year) that will be most likely be taken up by Hainan Airlines as they expect to place a large order for the 787-9. American's switching of delivery slots also opens up 5 near term slots for customers, potentially also for Hainan's upcoming 787-9 order. American will stall take delivery of 8 787s next year.  All in all these adjustments may actually help Boeing win more orders later this year, especially with the Paris Air Show coming up next month.  I wouldn't be surprised if Boeing announces the Hainan 787-9 order there and perhaps some exercising of some options.  Also I expect Air Austral's order for two 787-8 to be reveals (it's already booked as a UFO order on Boeing's order and delivery web site).  The next 6 weeks we may see some more unidentified 787 order being booked that will be revealed in mid June.

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

787 Build Location By Operator 
787 Build Location By Customer