Thursday, June 23, 2016

Boeing-Iran 787

A little more detail came out regarding the proposed commercial aircraft deal between Boeing and Iran.  There are no 787s in the deal but here is the breakout:

Direct purchase:
4 x 747-8I
15 x 777-9
15 x 777-300ER
6 x 737 NG
40 x 737MAX

29 x 737 NG

In an unrelated note to follow up my previous blog post.  ZB416 (LN 447, JA880A) will fly its C-1 flight on July 21st after returning from Farnborough.  The aircraft is due to be delivered on July 26th.  Thus it appears Boeing will deliver 14 787s this month, not 15.

Wednesday, June 22, 2016

Boeing, Iran Air signs a MoU; Boeing starts practices for the 787 demonstration at Farnborough

Testing Complete2
To be assembled in Everett133
To be assembled in Charleston92
Parts Arriving6
Undergoing final assembly10
Storage/Change Incorporation and Re-Work1
Change Incorporation and Re-Work6
Pre-Flight Prep11
Production Testing11
Non Customer Flight Tests1
Ready for Delivery4

Boeing confirmed that they have signed an MoU to supply commercial aircraft to Iranian airlines.  The confirmation is understandably short on specifics since any deal has to go through the US Treasury for approvals as well as the Iranian government.  According to news reports the order involves at least 100 aircraft with some reports that it's a mix of 737s and 777-300ERs though there was one report that said the order may also involve 747-8Is.  Interestingly this order is supposedly for flag carrier Iran Air.  There is no word on aircraft orders for other Iranian airlines and more importantly, the media reports makes no mention of 787s being part of the MoU even though Boeing reportedly offered the aircraft.  It doesn't necessarily mean that it won't be ordered.

It's hard to get excited about this order as there are still many complications and steps before we see a 787 in Iran Air colors rolling out of the paint hangar, namely US government approval, continued political tension between the two countries, current US sanctions which places restrictions on financing and banking activity with Iran and needed in order to effectuate the final sale and delivery. Consequently, finalization of any Boeing deal with Iranian airlines will take several months to be completed, perhaps not until early next year.

Deliveries are progressing this month with 5 delivered through yesterday, June 21st.  Boeing is still on track to deliver 14 to 15 787s this month.  It could hit 15 if  they deliver ZD004 (LN 12, ET-ATL) to Ethiopian (long pole in the tent here is financing of delivery payment) and ZB416 (LN 416, JA880A).  The later has started flight practicing the aerial demonstration that it will perform at Farnborough next month.  The practice is taking place at Grant County Airport in Moses Lake.  I'm not sure if it will be delivered prior to month end or after the air show.  Right now, my latest intelligence has it being delivered by the end of this month but it has had its customer flight but I'll try to find out if the schedule has moved.  If you can't make it to Farnborough this year, here's video shot yesterday by #Avgeek OwnsGermany.

Video by OwnsGermany on You Tube

With the start of the major air show less than a month away There are a number of unidentified orders that will probably be announced including one UFO order that is already known (China Eastern Airlines for 15 787-9s).  

Qatar Airways is expected to take its 30th and final 787-8 on July 13th which is during the Farnborough Air Show even though its been ready for some weeks now.  I think the delivery was deliberately pushed to time with a possible air show announcement with Boeing.  My guess is that Qatar will announce the exercise of the 30 787 options at that time to coincide with the delivery of 787-8 number 30.

Lastly,  Boeing started final assembly on American Airlines's first 787-9 5 days ago on June 17th and yesterday they started final assembly on the first of 2 787-8s for Uzbekistan Airways.  There should be two more deliveries today, a 787-9 each to Air China (ZB49, LN 435, B-7879) and British Airways (ZB372, LN 442, G-ZBKK).  There are still 6 aircraft that have to have there C-1 flights if they're to be delivered this month.  Those flights, per the most current information that I have, should be conducted tomorrow and Friday.

787 Full Production Table

Friday, June 17, 2016

Looking good for 15 787 deliveries this month

Half through June  Boeing has delivered 4 787 (1 -8 and 3 -9s) and obviously as is common in this program, Boeing will make the bulk of their deliveries at the end of the month as is usual with them.  The good news is given the flight test activity over the last 10 days, they're well positioned to deliver 11 more Dreamliners to customers.  All 11 have had their B-1 flights and 8 have yet to fly their customer acceptance flights but most if not all of those should be done by the 24th.  One aircraft, a 787-9 for Air Canada, is still in paint.

If Boeing is able to deliver 15 787s this month then the 787 delivery count for mid year 2016 will be 69 which is half the 139 that I project that they will deliver.  This includes 6 early builds aircraft of which one has been delivered and one more should be delivered this month.

Speaking of which, Boeing might have found alternate means of financing sales that would have normally have gone through the Ex-Im Bank.  I'm hearing reports that Wall Street may fill in for the understaffed Export Import Bank and finance these transactions.  This not something that has been verified but if true should clear the way for deliveries of the early build 787s to Ethiopian Airlines.

Production is also going well with 8 airplanes having started final assembly so far this month while 8 others have been rolled out.  I anticipate that by the end of this month, we'll see 13 787 rolled out and 13 other starting final assembly.  The Everett plant is taking about 3 weeks to assemble and roll out 787s on occasion Everett has been able to assemble Dreamliners in as little as 18 days.  This rate will be needed if/when Boeing goes to 14/month.  One of the 787-9s that just started final assembly is the first one for American Airlines.  This airplane should be delivered in late September.

One last bit of speculation.  Qatar is due to receive the 30th and final 787-8 around July 13th.  This is right in the middle of  Farnborough 2016 so I'm wondering if we will see an announcement from Qatar exercising the 30 787 options that they have.  Given the delays tot he A350 and A320NEO, Qatar is not too happy with Airbus(t).  Firming up these options might be away of Qatar showing it's displeasure.  Like I said, just speculation on my part.

787 Full Production Table

Saturday, June 11, 2016

Boeing posts 14 787s deliveries in May

Boeing delivered 14 787s in May which was 1 more than I had expected them to deliver in the month.  The 14th unexpected delivery was a 787-9 to Japan Airlines and this certainly helps Boeing to get back on track in terms of the delivery target for the year.

In the past month Boeing started final assembly on 12 787s and rolled out 13 to start the flight testing and delivery process.  Over all the efficiency ratio for the month of May is a decent 0.93 (13 roll outs divided by 14 deliveries).  For Everett, the ratio was 1 which meant that they delivered the same number of 787s that they rolled out (8 rolled out and 8 delivered).  For North Charleston, the ratio was much better at 0.83.  That plant rolled out 5 787s and delivered 6 which meant that they delivered airplanes that were intended to be turned over in April.

One notable delivery made by Boeing in May was to Air Austral's first 787-8 which was ZD002 (LN 22, F-OLRC).  This was the first early built 787 to be delivered since March 2015.  I expect Boeing to deliver 5 more early build 787-8s this year including one this month (if all goes well; more on this later). Other notable deliveries made in May was the last 787-8 that ANA had on order and the first 787-9 for Air China.

Through May 2016 Boeing has delivered 417 787s since program deliveries began in September 2011.  54 have been delivered in 2016 through the end of May.  Of the 54 787s delivered through May, 40 are 787-9s and 14 are 787-8s.  In May Boeing delivered 6 787-8s and 8 787-9s.  The number of 787-8s to be delivered has continuously decreased as others for the smallest version of the 787 family has dried up.  Over 70% of the current total orders for the 787-8 have been delivered leaving about 126 -8s to be delivered.  In comparison, Boeing has yet to deliver 457 of the larger and more expensive 787-9s.  Over 20% of this order book have been delivered.

In June I expect Boeing to continue the 12/month production rate with 6 787s entering final assembly each in Everett and North Charleston.  This will include the 1st 787-8 for Uzbekistan Airways.  An interesting point to make is that Everett is taking about 21 days to assembly the 787 (from loading in position 1A to roll out from position 4).  For North Charleston the number of days is about 28 to 29.  Each 787s that rolls out still spends some time getting minor assembly tasks completed as well as some ground testing before being released to Boeing flight test but the aircraft is, in essence, assembled.

I expect that Boeing should be able to deliver 15 787s in June.  Thus far they have delivered 2 (both 787-9s) including the first to Steven Udvar-Hazy's Air Lease Corp. (ALC) which leased the aircraft to Hainan Airlines.  Most of the aircraft that are scheduled for a June delivery have already have had their B-1 flights.  Two 787s including one in Charleston that still has to be painted have yet to make their first flights and it is starting to gt a little tight schedule wise.

Other notable deliveries will be an early build 787-8 to Ethiopian Airlines. This aircraft, ZD004 (LN 12, ET-ATL) is currently in paint and one of 6 early build 787-8s that Ethiopian agreed to buy last year.  The only hiccup may come in the form of the (continuing) issues at the Ex-Im Bank as only 2 of the 5 board seats a re filled.  A minimum of 3 need to be filled in order for financing of purchases over $10 million to be approved.  Currently the Republican controlled House of Representatives are holding up the approval of the board nominees.  Boeing is still currently showing delivery of ZD002 for June 29th with a C-1 customer flight scheduled for 6/21.  If Boeing can deliver 15 787s in June they'll be half way to my predicted delivery target of 139 787s.  They would need to average 12 deliveries per month for the second half of the year to accomplish that goal.  Stay tuned and let's see what happens.

787 Full Production Table
Total 787 Deliveries By Customer
2016 Projected Operator Deliveries
2016 Projected Customer Deliveries
2015 Projected Operator Deliveries
2015 Projected Customer Deliveries

An Appeal

For 8 years I've shared my passion for aviation through this blog.  It obviously doesn't pay the bills and thus is a labor of love.  I've worked in the finance field for over 25 years, specifically covering residential mortgage backed securities. Now major changes in this industry bought on by new regulations in the wake of the 2007-2008 financial crises is forcing companies to reduce headcount and put a lot of talented people out of a job including myself.  I am part of a dying industry and I recognize the need to move onto something which I can be passionate about while at the same time being able to support my family.

Thus I am making an appeal to those of you who read and follow my blog.  If you are in the aerospace industry or related to the aerospace industry and can use someone with my skill set, please contact me so I can send you my resume and perhaps starting a dialog that would be mutually beneficial.  I know it's probably unusual for a blogger to be asking for a job though a blog but if I can reach people who can help me then why not.  Thank you for your support!