Monday, June 30, 2014

Boeing contractually delivers first 787-9 to Air New Zealand

Boeing has delivered the first 787-9 to Air New Zealand today in a contractual delivery.  As I had earlier reported, Boeing was planning to deliver the first 787-9 ZB003 (LN 169, ZK-NZE) but the aircraft will not leave for another 9 to 10 days or so while the airlines' staff undergoes further training in Everett.

This delivery is the first of 12 787-9s that I expect Boeing will deliver this year and represents a silver lining for the company's flagship commercial aircraft program.  Though some dark clouds do remain.  I had expect Boeing to have started ETOPs/F & R testing on the 787-9 equipped with the GE GEnX-1B engines well by now word is that this won't start until later in July.  United Airlines will be the first customer to receive the GE powered version of the -9 and this was expected to be delivered at the end of July.  Now I believe the delivery won't occur until late August. 

Boeing should deliver another 787-9 to ANA in July (ZB197, LN 146, JA830A) will be delivered to the airline by around the third week of July.  The delivery of 787-9s in 2014 should be as follows:

ANA#1 - 7/2014
UA#1 - 8/2014
ANA#2 - 8/2014
ANZ#2 - 9/2014
Virgin#1 - 9/2014
UA#2 - 10/2014
Etihad#1 - 10/2014
ANZ#3 - 10/2014
Scoot#1 - 11/2014
Virgin#2 - 11/2014
Etihad#2 - 12/2014
In June Boeing, thus far, has posted an impressive 14 787 deliveries though there may be one more which I am working to confirm and the total may end up being 15 total 787s delivered in June.  This is the greatest number of 787s delivered in any one month since December of last year which saw 11 aircraft delivered.  If there is one more delivery tomorrow, Boeing would have delivered 48 787s through the first 6 months of 2014 and 162 overall since deliveries began in September 2011.  Boeing is aiming to deliver at least another 62 787s in the last 6 months though they will try for a number as high as 74 in the last 6 months which will include a few more early build 787s.  Though the 787 deliveries started 2014 very weekly, the program did finish the 2nd quarter in very strong fashion.  It remains to be seen if they finish 2014 in a similar way.

Thursday, June 26, 2014

Boeing South Carolina achieves 3/month 787 production rate.

Boeing revealed to its employees yesterday that the South Carolina plant has achieved the planned 787 production rate of 3 airplanes/month when ZA660 (LN 224, 5Y-KZF) entered into position 0 on the final assembly line in plant 88-30 on June 24th.  This aircraft is destined for Kenya Airways and should deliver around September of this year.  I am assuming that Everett will slow down to 7/month given the rate change.  This means that Charleston should load a new 787 every 10 days while Everett will load a 787 every 8.6 days for each line (40-26 and 40-24).

This was an important milestone for this plant especially in light of a muckraking report in a certain Seattle newspaper this past week. 

Boeing managers hope to complete a 787 from loading into the first position to roll out in about 38 days at the new rate.  Prior to the step up in rate, the South Carolina plant was building a 787 in about 46 days and a year ago it was at 70 days. 

The plant will also start building its first 787-9 when ZB170 (LN 269) is loaded into position sometime this fall.  The aircraft will go to United Airlines sometime in March of 2015.
The signs of progress at Boeing South Carolina counters a false belief that the plant and its workers are not up to the challenge of building the 787 in sufficient quantities and quality that would justify the investment that was and is continuing to be made by the company.  As recently as this past week a newspaper report slammed the Boeing South Carolina workers and cast doubt on their ability to make the 787 especially in light of the bonuses that were just paid out to them for reducing the JBS (jobs behind schedule) or other wise known as travelled work. It is my understanding that the JBS number as tracked by Boeing is remaining at a flat rate.  It does appear that some people in the media are looking to highlight every mistake and incident in order to sell newspapers rather than looking at the whole story in proper context.

I attempt to put some context to the 787 production story in the form of a table that I've put together comparing number of 787s that have entered final assembly, finished final assembly and have been delivered.  The table looks at these attributes for Everett, Charleston as well as the total for both plants.

Looking at the table one can see that both plants are producing at their respective assigned rates in terms of loadings and roll outs.  We should ignore January and February as both plants were essentially ramping back up after the 2013 holidays as is  evident from the tables with the low number of loadings, rolls outs, and deliveries.  However starting in March Boeing South Carolina loaded, on average, 2.75 aircraft per month, rolled out an average of 3.25 aircraft per month and delivered an average of 2.5 aircraft per month.  This is through June 25th and I do expect at least one more delivery from North Charleston this month.

Everett has a much higher work load but during the same period the plant has loaded an average of 8 airplanes per month, rolled out an average of 8 airplanes per month and has delivered and average of 6 airplanes per month.  To look at it a different way, I take the average roll outs divided by the average deliveries in order to gauge how efficient each plant is in building and delivering 787s and this is what I have from March through June 25th:

Everett = 8/6 = 1.33
Charleston = 3.25/2.5 = 1.3

The lower the number the more efficient the plant is in building and delivering aircraft.  This shows that Charleston looks to be slightly more efficient in delivering the 787.  Please note that this is a little incomplete as we have to complete the month of June and there is at least one more 787 line move in Everett to come as well as more deliveries from each location.  Additionally, this tables ignores where the aircraft was delivered from, i.e. Charleston built aircraft for Qatar but delivered from Everett was a delivery from Charleston.



Friday, June 20, 2014

Revised June Delivery Estimate For 787

In my previous post, I estimated that Boeing could deliver about 14 787s in June.  New information now leads me to revise that estimate upwards to as many as 16 though it is quite possible that some of these deliveries can spill over into July for delivery.  They have already delivered 8 thus far in June.

Obviously with the quarter end coming up, Boeing wants to book as many deliveries and income as possible, thus this is the rationale for the push to deliver as many as possible.

Given the new information here is a list of aircraft that I believe can be delivered in the next 10 days:

ZA267 (LN 168, ET-AOV)
ZB003 (LN 169, ZK-NZE) - this plane should deliver at the end of the month but expect it to stay in Everett until July 10th for crew training.
ZA219 (LN 175, VK-VKF) - this plane also should deliver at the end of the month but the delivery may spill over to July.
ZA541 (LN 185, CC-BBF) - should deliver around 6/24.
ZA295 (LN 186, N28912) - should also deliver around 6/24.
ZA456 (LN 187, G-ZBJG) - this aircraft still needs to conduct its first flight but is tentatively scheduled to be delivered at the end of this month.
ZA588 (LN 190, HS-TQA)  - should be delivered at the end of this month but it may spill over to July.
ZA321 (LN 191, G-TUIE) - should be delivered at the end of this month but it may spill over to July.

If Boeing can deliver all 8 then they would have achieved 50 787 deliveries in the first 6 months of 2014 and will have put themselves in a good position to deliver 60 to 70 more in the second half of the year.


Wednesday, June 18, 2014

Boeing increases 787 production flight testing

Over the past few weeks, Boeing has been aggressively flying production 787s on Boeing and customer flight tests.  In June, Boeing has conducted seven B-1 flights on the production 787s and I do think that they can fly at least 4 more before the end of the month. This should include one aircraft for British Airways, ZA456 (LN 187, G-ZBJG), a BBJ for the Saudi Ministry of Finance, ZA779 (LN 193, HZ-MF8), one for United Airlines, ZB167 (LN 181, N38950) which will be used for 787-9/GEnX F&R/ETOPs testing and one for Qatar Airways, ZA474 (LN 188, A7-BCO).  ZA456 did file a flight plan on June 17th but the aircraft did not fly).

There was a large up tick in flight activity during the last week or so which leads me to believe the Boeing is going for an all out push to deliver around 14 787s this month.  They have already delivered 6 this month including the last 787 for China Southern Airlines from their order of 10 aircraft.

As for deliveries for the rest of this month, in my opinion this is the aircraft I see being delivered in the next 12 days:

ZA267 (LN 168, ET-AOV) for Ethiopian
ZB003 (LN 169, ZK-NZE) for Air New Zealand (1st 787-9 delivery)
ZA473 (LN 176, A7-BCN) for Qatar Airways
ZA580 (LN 183, EI-LNG) for ILFC/Norwegian
ZA656 (LN 184, 5Y-KZB) for Kenya Airways
ZA541 (LN 185, CC-BBF) for LAN
ZA295 (LN 186, N28912) for United Airlines
ZA588 (LN 190, HS-TQA) for ILFC/Thai (may not deliver until July)

Boeing does need to deliver many of these planes as ramp space is quickly being filled at both Everett and Charleston. There are about 30 planes that are outside on the flightlines, paint hangars and other spots at the two assembly locations but if the current pace of flight activity continues then much of that ramp space should be cleared over the next couple of weeks and occupied by aircraft that will be coming out of final assembly.  It does seem that Boeing has a pretty good handle on the assembly aspect but the build quality still has to improve a bit in order to avoid inventories from creeping higher again. 

Lastly, one additional note to my previous post regarding the 787-9.  The FAA has certified this aircraft for ETOPS 330 thus fulfilling Boeing's promise to Air New Zealand to deliver the ETOPS certified aircraft.



Monday, June 16, 2014

FAA and EASA certifies the 787-9

Boeing announced this morning that the FAA and EASA has certified the 787-9 clearing the way for the first delivery to launch customer Air New Zealand.  The first aircraft for the carrier is already undergoing production flight tests and should deliver in about 2 weeks.

Air New Zealand has ordered the Rolls Royce powered aircraft.  Boeing has yet to start F&R/ETOPs testing on the GE powered version of the aircraft but that should start this month.  I still believe that Boeing should deliver the first GE powered 787-9 to United Airlines late next month.

There has been some questions if the FAA would grant the Amended Type certificate to Boeing due to two separate issues: 1) a need to re-design a capacitor in the RAT and 2) an altitude select knob on the Mode Control Panel (MCP) that doesn't have enough torque and can lead to an error in setting attitude as directed by ATC.  Boeing has asked for a time limited exemptions from these two issues and apparently the FAA and EASA has agreed.  Flightglobal has an a detailed explanation of the issues in an article here.

I do anticipate that Boeing will be able to deliver 12 787-9 this year as follows:

Air New Zealand - 3
ANA - 2
Etihad Airways - 2
Scoot - 1
United Airlines - 2
Virgin Atlantic - 2

Here's Boeing Press Release announcing the award of the Amended Type Certificate:

Boeing 787-9 Dreamliner Earns FAA, EASA Certification

Newest commercial airplane nears delivery on track

EVERETT, Wash., June 16, 2014 /PRNewswire/ -- The Boeing (NYSE: BA) 787-9 Dreamliner has been certified by the U.S. Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA) for commercial service. Boeing is now in the final stages of preparing for the first 787-9 delivery to launch customer Air New Zealand.

"Certification is the culmination of years of hard work and a rigorous flight-test program that started with the 787-9's first flight last September," said Boeing Commercial Airplanes President and CEO Ray Conner. "With this validation that the airplane is ready for commercial operations, Boeing along with our airline and leasing customers now look forward to introducing the newest member of the Dreamliner family to passengers around the world."

To earn certification for the 787-9, Boeing undertook a comprehensive test program with five airplanes and more than 1,500 hours of flight testing, plus ground and laboratory testing. Following the rigorous and thorough certification process, the FAA and EASA each granted Boeing an Amended Type Certificate for the 787-9, certifying that the design complies with aviation regulations and is safe and reliable.

"Throughout 787-9 development, the dedication and discipline of our entire global team drove outstanding performance," said Mark Jenks, vice president, 787 Airplane Development, Boeing Commercial Airplanes. "From the start of assembly last spring to a flawless first flight and now our on-time certification, we thank everyone on the Boeing and partner team as well as our customers for making 787-9 development so successful."

The FAA also has granted Boeing an Amended Production Certificate, validating that the Boeing production system can produce 787-9s that conform to the design. EASA accepts FAA oversight of Boeing production certificates, just as the FAA accepts EASA oversight of European manufacturers' production certificates.

The new 787-9 Dreamliner will complement and extend the super-efficient 787 family. With the fuselage stretched by 20 feet (6 meters) over the 787-8, the 787-9 will fly more passengers and more cargo farther with the same exceptional environmental performance — 20 percent less fuel use and 20 percent fewer emissions than similarly sized airplanes. The 787-9 leverages the visionary design of the 787-8, offering passengers features such as large windows, large stow bins, modern LED lighting, higher humidity, a lower cabin altitude, cleaner air and a smoother ride.

Twenty-six customers around the world have ordered 413 787-9s, accounting for 40 percent of all 787 orders.

Wednesday, June 11, 2014

787 Production Update - June 2014

Thus far through the end of May Boeing has delivered 33 787s.  With 7 months to go in the year, Boeing needs to ramp up the delivery rate if it is to deliver 110 787s by the end of the year.  That means they have to deliver 77 aircraft in the last 7 months...11/month delivery rate.

May Review
May was a disappointing month.  I was expecting at least 10 deliveries and Boeing managed 7. If the theme sounds familiar it's because it is.  There is an expectations that Boeing delivery rate will match the 787 build rate which currently is at 10/month though the airplanes that have emerged from final assembly still have minor travelled work that needs to be completed.  An interesting side to the delivery story for May though.  Boeing, it seems had delivered 2 787s to Air India last month while the official tally on Boeing's Order and Delivery website show that they delivered 1 to the carrier.  Sources have confirmed to me that Boeing did indeed make contractual delivery of ZA232 (LN 28, VT-ANC) though this aircraft still remains in Charleston.  The reason for this is still unknown.
June Preview
Boeing has ramped up 787 flight activity significantly and has delivered 4 787s through the first 10 days of June.  Some of these deliveries were slated for May but had rolled into June.  Boeing will need to deliver at least 7 more 787s which, at least for now, looks like they can accomplish easily.  They currently have 11 787s that are in production testing or that are ready for delivery.  I do think that 8 to 9 of those can be delivered this month.  Boeing should deliver the first 787-9 to Air New Zealand on June 30th pending a decision by the FAA (see below).  ZB003 (LN 169, ZK-NZE) has been flying lately and should be ready for delivery in the next couple of weeks.  Boeing will probably run a few more flight than they typically do in order to work out all the bugs and make sure that the aircraft has sufficient maturity to enter airline service.
Flightglobal revealed that Boeing is asking the FAA for a waiver in order to deliver the 787-9. The request is related to two items that are not compliant with the certification standards that Boeing and the FAA agreed to concerning the 787-9.  Boeing is scheduled to deliver ZB003 (LN 169, ZK-NZE), the first 787-9, to Air New Zealand on June 30th.  The two issues are 1) a capacitor in the ram Air turbine (RAT) that failed during a flight test.  This capacitor needs to be redesign and certified for use on the aircraft.  The second issues relates to a dial on a control panel in the cockpit of the aircraft.  The dial is altitude select knob that is used in the vertical flight mode.  The dial can be inadvertently rotate 1 or 2 stops beyond the desired setting if the pilot just presses the knob and thus violate altitude range set by the ATC.  There is a lack of sufficient torque that is causing this issue.  This will be watched closely to see what the FAA will do but it is concerning especially since the 787-9 flight testing has gone so well.  Boeing doesn't want to deliver this aircraft late even by a few weeks let alone a few months.
Most of the 787-9 testing appears to have been completed though Boeing still has to undertake F&R/ETOPs flight testing using an production aircraft equipped with the GE  GEnX-1B engines.  I anticipate that ZB167 (LN 181, N38950) should take to the air within the next 10 to 14 days and should fly a comparable number of hours as ZB197 (LN146, JA830A).
Charleston Production Ramp Up
Boeing is preparing to ramp up the 787 production at Charleston to 3/month from the current 2.  This switch should take place in early to mid July.  Boeing is currently loading a 787 into Position 1A every 12 to 13 days. They will need to load one every 10 days but the number of available assembly spots to conduct assembly activities has been reduced to 6 from 8 as two positions are undergoing construction (Position 1B and Position 6).
Boeing did get some good news from the FAA last month when the approved the 787-8 for ETOPS 330.  This means the 787-8 can operate from an airport that is no further than five and half hours flying time in case of an emergency.  This means the carriers can fly more direct and fuel efficient routes, especially over the Pacific and fully take advantage of the 787s capabilities.  It is now up to the local civil aviation regulators to approve or deny the airlines that are under their oversight to fly the 787 under ETOPS 330.  The 787-9 will not receive this certification until much later but it will probably be Boeing's next major certification as Air New Zealand is eager to have the aircraft certified for ETOPS 330.  I do not know when Boeing plans to achieve ETOPS 330 certification for the 787-9.