Boeing talks about 787 during 1st quarter 2017 earnings conference call

Boeing gave an upbeat assessment of the 787 during the 1st quarter 2017 earning call.  Boeing deferred production cost for the 787 program decreased by $316 million during the 1st quarter.  The total program deferred production cost is now just under $27 billion.  Of course the achievement during the quarter is the start of flight testing on the 787-10 on March 31st.  So fat the sole 787-10 flight test aircraft has flown just under 90 hours and I expect it to be at or beyond 100 hours by the end of the month.

However, the current downturn in commercial aircraft market, particularly in the sale of widebodied  jets has analysts questioning Boeing's drive to increase 787 production from 12 to 14 per month by the end of the decade.  The 669 orders that are still represents about 4.5 years of production.  Given the slowdown it hard to imagine that Boeing can go up to 14 and it may be even hard to sustain 12.

Boeing execs still insist they can reach the order goal to go up in rate and I believe that would take a major order like the one that Emirates is proposing to make between the 787 and the A350.  Still Boeing book to bill for the 787 is not anywhere close to a number that would justify 14/month.  They do feel that they are on solid ground to sustain 12/month but unless there is a decent wave of orders coming through that will be hard to maintain.

Lastly, Boeing is continuing with the cost cutting measures company wide which included a around of lay-offs in Everett last week.  

787 April 2017 Mid Month Review

	Number
Testing Complete	3
To be assembled in Everett	183
To be assembled in Charleston	140
Parts Arriving	6
Undergoing final assembly	6
Storage	1
Storage/Change Incorporation and Re-Work	0
Change Incorporation and Re-Work	1
Pre-Flight Prep	10
Production Testing	5
Non Customer Flight Tests	2
Ready for Delivery	2
Donation	3
Delivered	540
TOTAL	902

Well most of the way through April Boeing has delivered 8 Dreamliners on their way to delivering 10 787s this month.  An early build 787 for Ethiopian has been pushed out though the delivery date for ZD008, (LN 18, ET-ATI) seems somewhat in flux.  I've heard that delivery can happen in May though I've also heard that delivery won't occur until "after June"  For now I'm listing as stored until there is more definite clarity to delivery.  In the meantime Boeing will deliver 2 more 787 before the end of the month for a total of 10 deliveries.

Production totals for April look to be 11 787s completed and rolled out from the two 787 factories with another 10 or 11 aircraft starting final assembly.  Note that 3 of these 787s were built in Everett and had started final assembly and rolled out within the month of April.

Boeing has gotten the 787-10 flight testing off to a good start.  It appears that they're only flying the aircraft on the weekdays thus far and I'm uncertain that this is going to change.  It may mean that the flight test team doesn't have as much risk to retire or that the flight test schedule doesn't require as many flight hours as the -8 or -9 thus limiting testing to the weekdays.  I'm also expecting that the second flight test 787-10, ZC036 (LN 548, N548ZC) should take to the air around May 2nd, a week from this coming Tuesday. ZC002 is still in final assembly and I expect it to roll out aroune the 2nd week of May and should join flight testing around late June.Thus far the lone 787-10 flight test aircraft has racked up about 72.38 flight test hours.  Boeing needs to achieve Initial Airwothiness Testing which I believe should be down shortly, it will be followed by the TIA (type inspection authorization) which would allow the 787-10 to start the certification program with the FAA and have the FAA on board the -10 to observe the certification flight tests and sign off on each required test flight objective.  The 787-9 achieve the TIA after about 275 flight test hours on the initial Roll Royce powered 787-9 which took about 3 months.  The 787-8 received it's TIA after about 4 months of flying. I believe certification testing for the -10 should start around the end of June to early July time frame if not earlier.

You can follow my log of the 787-10 flight test by clicking the link below for the 787 Spreadsheets.

787 Spreadsheets

Boeing delivers 11 787 in March while first 787-10 takes to the air as the quarter ends.

Production Snapshot

	Number
Testing Complete	3
To be assembled in Everett	188
To be assembled in Charleston	142
Parts Arriving	6
Undergoing final assembly	8
Storage	0
Storage/Change Incorporation and Re-Work	0
Change Incorporation and Re-Work	2
Pre-Flight Prep	8
Production Testing	3
Non Customer Flight Tests	2
Ready for Delivery	5
Donation	3
Delivered	532
TOTAL	902

Boeing Photo

Boeing Photo

Boeing Photo

The first quarter of 2017 was a busy period for the 787 program and time highlighted by the very successful first flight of the 787-10 yesterday at quarter end.  To the details of the quarter....

For the month of March, 2017 Boeing delivered 11 Dreamliners (4 x 787-8s and 7 x 787-9s) including the 200th 787-9 to be delivered to a customer. However two of these deliveries aren't confirmed: 1 787-8 ZD009 (LN 17, N947BA) left for Victorville to be stored but left under a Boeing flight number.  This aircraft was supposed to be delivered to Crystal Cruises who is now trying to sell it.  So far there aren't any buyers and is the second 787 that is up for sale.  The other 787 delivery in doubt is ZB703 (LN 533, HZ-AR11) for Saudi Arabian Ministry of Finance (leased to Saudi Arabian Airlines).  The aircraft was supposed to be delivered on March 30th but it is still parked on the Charleston flightline.  We'll know more about these two 787s when Boeing reveals its monthly order and delivery results hopefully on April 6th.  For the quarter, Boeing has delivered 32 787s (8 x 787-8s and 24 x 787-9s).  Total program deliveries stand at 532 (332 x 787-8, 200 x 787-9).  Boeing has delivered the 200th 787-9 to the Saudi Ministry of Finance which is leasing the aircraft to Saudi Arabian Airlines.  This is the aforementioned ZB703.

Production is going smoothly with Boeing rolling out 12 787s (including the second test flight 787-10) during this month and starting assembly on a further 13 787s.  Production efficiency declined due to lower deliveries in March.  In fact for the quarter  while the production rate was more or less on target deliveries were lower.  This is attributable to the introduction of the 787-10 into the production system.  Boeing transferred some 787 production aircraft to Everett from Charleston to mitigate production risk but it looks like Boeing can't transfer all of the Charleston 787 production thus deliveries fell.  During the 1st quarter, Charleston rolled out 12 787 (should be around 15) while delivering 10 (again vs. 15).  Everett, as I mentioned, picked up the slack in production (but not all of it) because of the 787-10 and rolled out 20 (vs. 24) and delivered 22 (vs. 28 including 2 early build deliveries). Production efficiency for March was 1.09 (an efficiency rating of 1 or lower is desirable as it shows declining inventory - roll outs vs. deliveries.  Charleston had a March efficiency ratio of 1.33 while Everett was 1.0.  Again this is all due to the introduction of the 787-10 into production and I expect that this will continue into early May until ZC002 (the third and last 787-10 flight test aircraft) has been rolled out from final assembly.

March deliveries were not all that interesting except for the two early build 787-8s (ZD007 and ZD009 and the 787-9 for the UAE Presidential (VIP) Flight.  For April, I believe that Boeing is targeting another 11 deliveries (3 x 787-8, 8 x 787-9).  This batch should include another early build 787-8 (ZD008) which will again go to Ethiopian Airlines as well as Air France's first direct purchased 787-9, they are currently operating 1 787-9 leased from AerCap.  Additionally, American Airlines will receive the last 787-8 that they have on order.

787-10
By far the most important event in the 787 program during the past quarter was the first flight of ZC001 (LN 528, N528ZC) the first 787-10.  I've included a few Boeing photos as well as embedded a couple of videos from that flight on March 31st.  The flight began much earlier than I anticipated, 9:38AM due to bad weather rolling in soon after.  The flight lasted 4 hours and 57 minutes and landed back at Charleston International Airport at about 2:35PM.  After landing the pilots reported no squawks and had run through the whole list of tests that they needed to perform as well as a few get ahead tasks.  The plan is for Boeing test pilots to fly ZC001 to Boeing Field late next week (I'm guessing next Friday) where it will be based for the remainder of the test flight program as will the other two test flight airplanes.  ZC036, the next 787-10 to fly and the first with GE engines is already on the Charleston flightline going through ground tests and I anticipate that this airplane will probably fly by the end of this month.  ZC002 will start final assembly by end of this week and I believe it should roll out by the end of the first week of May and join the flight test program around early June.  The 787-10 flight test and certification program should last about a year and there will be additional production ready 787-10 that will perform functionality and readiness testing (F & R)  similar to the 787-8 and 787-9 test programs.

Speaking of the flight test program, I will be attempting to track the flight test hours of the 787-10 flight test fleet similar to what I had done with the 787-8 and 787-9.  This is mainly keeping track of flight test as they're reported on FlightAware.com and flightradar24.com.  I will be keeping these logs on the spreadsheets in a tab called "787-10 Flight Test Hours."  You can view these spreadsheets through the link below.

787 Spreadsheets

I will also be posting updates to the test flight program on the blog as they become available.