Wednesday, February 25, 2015

787 new order development efforts gaining traction at Boeing

Drumming up new orders for the 787 seems to be improving.

Yesterday Bloomberg news reported that Boeing was in talks with Ethiopian to purchase 8 787-8 all of which would come from the stock of existing 787s already assembled and parked on Everett's Runway 11/29 or at the EMC otherwise known as the "Terrible Teens."

This is addition to the two terrible teens that Boeing has firmly sold to Air Austral the Reunion based vacation airline news of which I broke last week.  Boeing sold them LN 15 and LN 22.  The latter was to be delivered later this year but it now appears it will be delivered in May of 2016 while LN 15 will be delivered around October of the same year.

Getting 10 of these airplanes (out of 12) will be a huge boost to Boeing in reducing their inventory while the airlines will still be getting good fuel efficient aircraft at a fraction of their worth.

787s orders are not done as ANA still has to firm up 3 787-10 that they intend to take and QANTAS, who reported excellent earning today, are looking to firm 50 787 options that they hold for delivery starting later this decade.  Turkish Airlines is also expected to place an order for either the 787 or A350 this year which can be significant while Emirates  looks to choose between the 787-10 and the A350-900 possibly around spring to summer time.

Boeing is planning to increase production to 12 airplanes next year.  This increase is expected to meet not just new orders but conversions of purchase rights and options into firm orders by existing customers.  The options and rights need to be exercised by a particular date and with the existing firm order pipeline being filled, attention will now turned to the additional orders from existing clients.

Tuesday, February 17, 2015

787 February 2015 Mid Month Production and Delivery Report

A little more than halfway through February and Boeing has been producing 787s at the expected rate but  delivering aircraft to customers at a snails pace.  Through today, Feb. 17th Boeing has delivered 3 787s to customers.  They have started final assembly on 6 aircraft and rolled out another 5.

One bright spot is that Boeing is not sending the newly rolled out aircraft to the EMC which indicates that traveled work is less of an issue. Another bright spot is final assembly times.  These are trending downward with 787s from Everett now taking about 31 to 33 days for final assembly from 42 to 47 days while Charleston built 787s are at around 42 to 45 days down from 51 to 59 days.  Clearly the aircraft are coming out more complete and both Everett and North Charleston facilities are now getting more comfortable with the production process ahead of the planned increase to 12/month next year.

However, the trouble still lies in the delivery rate.  With only 10 aircraft delivered in 2015 it is way to low even for Boeing to meet its guidance of 120+ 787 deliveries.  Granted there are the usual delays because certain airlines continue to have issues like Qatar Airways that has 2 scheduled for delivery or Air India with their typical incompetent management trying to find financing for the delivery of a single aircraft.  It does appear that the bulk of 787 deliveries will again occur within the last week of the month.  I'll report back in early March to see how they did.

787 Full Production Table
787 Build Location By Operator 
787 Build Location By Customer

Friday, February 13, 2015

Air Austral orders 2 "Terrible Teen" 787-8

According to sources, Boring will deliver LN 15 and LN 22 to Air Austral, the French holiday carrier.  Air Austral had ordered but did not take delivery of 777-300ER.  It now appears that Air Austral switched the order for the 787-8. It appears they will take delivery on LN 22 this year and LN 15 next year.

This may be the unidentified order for two 787s that Boeing posted on their Order and Delivery website on Feb. 12th though I'm still trying to confirm this.

Wednesday, February 11, 2015

787 Line 11 first flight imminent

According to sources, ZA841 (LN 11, N507BJ) which is tentatively scheduled to be delivered to Korean Air Lines in April will attempt its first flight on Feb. 13th.  After this flight the aircraft will go into the paint hangar for about 3 weeks.

It would be the first of the "terrible teens" to have a fly after spending extensive time in storage and re-work.  It is rumored that it will be used by Korean Air Lines as a South Korean government VIP transport.

787 Production Looks to be improving

Analysis of 787 final assembly trends at Boeing's Everett plant seems to point to an improvement in the amount of traveled work that is reaching Everett.  Looking at the movements of recently completed 787s at Everett, I've noticed that, with the exceptions of 787s for Etihad and American Airlines, Boeing hasn't been sending rolled out 787s to the Everett Modification Center to finish assembly tasks that were delayed due to traveled work.

The last current production 787 that visited the EMC was ZA199 (LN 271, JA840J) for Japan Airlines which was there until early February.  Since then there have been 6 787s that have been rolled out to the 40-51 ramp but none have made the trip to the EMC though some have spent some time on the ramp outside the 40-51 building to finish minor assembly activities.  Currently, the only 787s that are at the EMC are 3 early build aircraft, the 3 787-9 flight test aircraft and one 787-8 for American Airlines.

With regards to American Airlines and Etihad, it seems that for the aircraft for those two carriers will continue to go to the EMC because of delays in delivering the premium seats from Zodiac until the production issues are smoothed out.  This is pretty good news for the 787 in terms of the production costs which Boeing has been wrestling with since the start of production.  It does not mean the end of traveled work as Boeing expects that to continue.  Many aircraft programs have some amount of traveled work but the 787 issues have been very painful, very public and very plentiful.  They will continue to have some amount of traveled work but it will eventually get to a point where the work can be completed in final assembly as opposed to being rolled out to the 40-51 ramp to be finished.

As always, I'll keep track of this trend but continued reduction of traveled work to a point where the airplanes no longer have to go to the EMC is very good news to the program.

Tuesday, February 3, 2015

January 2015 787 Delivery and Production Report

Boeing had a disappointing month as far as 787 deliveries goes.  Internally, Boeing is looking at 138 deliveries (publicly they gave their guidance as 124-127) which translates to 11.5 deliveries per month in 2015.  In January Boeing delivered only 7 787 to customers, far fewer than what is needed.  Annualized this would represent only 84 deliveries.  It is the beginning of the new year and Boeing has been a bit slow to ramp up activities after the Holiday season but they will need to make a much stronger showing in February and March.  The efficiency ratio was 1.43 which is way too high as deliveries did not match the number of aircraft rolled out.

The company did roll out 10 787s from it's 3 final assembly lines and started final assembly on a further 11 787 air frames to the flightlines though a number of them had to go the EMC.

According to the most latest information that I have, there are 15 787s tentatively scheduled for delivery in February including a number that were to be delivered in January.  It is highly doubtful that Boeing will deliver this number of 787s and I believe that in the best case scenario, they will deliver 11 to 13. Up to 6 of these deliveries would be the 787-9 including LAN's first -9 (via lease from AerCap).

Production rate is holding steady and it has taken Boeing an average of 102 days to build, test and deliver 787s (based on January deliveries not including outliers) last month.  Boeing needed an average of 5 test flights per delivered aircraft to complete the delivery process.

787 Full Production Table
787 Build Location By Operator 
787 Build Location By Customer