Monday, August 27, 2018

Supplier issues creating 787 delivery bottleneck at Charleston.

AS I reported last week, Boeing was having issues with deliveries out of Charleston.  The flightline has been increasingly crowded as Dreamliners are rolled out of the main assembly building 88-30 and parked in every spot that is available including the Charleston Delivery Center.

A source has indicated that supplier delays are now affecting at least 6 aircraft at Charleston while another 2 are delayed at the request of customers.

The aircraft that are affected by supplier delays include Shanghai Airlines (seats), United Airlines (seats), Eva Air (seats), and ANA (engines).  Hainan Airlines has requested a delay to delivery for an unknown reason, they have four 787s in Charleston waiting delivery with another 2 at Everett which I assume may also be delayed.

A 787-9 for Air China is sitting in storage for an unknown reason.  The aircraft was assembled  over 5 months ago but hasn’t had it engines installed.

Lastly, I’ve updated the 787 firing order to reflect final assembly of line numbers 842 to 860.

Check out the spreadsheets by clicking on the link below.

787 Spreadsheets

Thursday, August 23, 2018

787 crowd Charleston Flightline

Over the last couple of months the number of 787s delivered from Boeing's North Charleston facility has shrunk compared to previous months and the effect has been an increasingly crowded flightline.  While I haven't pinned down the exact cause or causes for the delay in deliveries, it is curious that Boeing's Everett facility doesn't seem to be hampered when it comes to delivering 787s to customers.  That's not to say that there is something definitively wrong in North Charleston but the low number of deliveries from that campus is concerning.  There are currently about 16 787s at various stages of completion and testing along with 8 more that are in various stages of final assembly.

Already I have heard that there are seat supply issues but it may be more than that or engine issues with Rolls Royce Trent 1000 powerplants.  Boeing has been having supply chain issues and it's not just the 787 program but the other major commercial aircraft programs (737 and 777) that are effected.  This month I expect that Boeing will deliver 3 787 (same as last month) while rolling out 4 to 5 airplanes in August. One can easily see why the Charleston flightline has gotten very crowded in a short amount of time.  Unless Charleston deliveries pick up very soon, Boeing may have to look for new and innovative ways to store undelivered 787.

Thursday, August 16, 2018

787 August 2018 Mid Month Update

As we approach the end of summer, Boeing seems to have some struggles delivering airplanes.  Last month Boeing delivered 8 787 to customers.  Now it appears that Boeing will deliver only 11 787s in August.  They've delivered 3 787-9 aircraft to KLM, El Al and AerCap (lsd to Ethiopian). The 787 wasn't the only commercial program to post low delivery numbers.  The 737 program saw only 29 deliveries and the 777 didn't deliver a single airplane!  The 737 and 787 were the major cash flow generators for Boeing Commercial Airplanes (plus one lone 747-8F).  Reports have attributed the low delivery numbers to issues with suppliers.

I have been informed by sources that 787 deliveries are slower due to issues with seat suppliers.  It appears that this has affected deliveries to Eva Airways, China Eastern and United Airlines.  There's no further information on other suppliers that could be causing the delivery slowdowns. 787 output continues at the 12/month pace thus crowding the flightlines at Everett and Charleston.

Lastly, Boeing posted only 1 order for the 787 which was the finalization of the Hawaiian Air deal.  Boeing's 787 backlog currently stands at 668 airplanes (89 x 787-8, 414 x 787-9, 165 x 787-10). Boeing has delivered 719 787s to date (354 x 787-8, 359 x 787-9, 6 x 787-10). 787 Spreadsheets

Friday, August 3, 2018

787 Deliveries drop month over month by 11 units; Boeing 787 Monthly Review for July 2018

Testing Complete3
To be assembled in Everett77
To be assembled in Charleston65
Parts Arriving6
Undergoing final assembly8
Storage/Change Incorporation and Re-Work0
Change Incorporation and Re-Work3
Pre-Flight Prep15
Production Testing4
Non Customer Flight Tests0
Ready for Delivery1

Deliveries of the 787 dropped by 11 aircraft during July as Boeing turned over 8 airplanes to their customers.  Production continues at 12/month thus the Boeing flight lines in Charleston and Everett are getting crowded as Boeing rolled out 13 787s during July as opposed to 10 Dreamliners in June while delivering 8. It should be noted that just like June 787 deliveries of 17 were an outlier I also believe that this month's anemic delivery rate is also an outlier due to the lower number of airplanes that were rolled out in June.  Through July, Boeing has averaged 11.42 deliveries in 2018 about 4 airplanes shy of the targeted delivery rate.

Boeing delivered 1 x 787-8 and 7 x 787-9.  The only notable delivery was to the 787-8 to Air Tanzania which is their first and only 787.  For the year Boeing delivered 80 787 (5 x 787-8, 69 x 787-9, 6 x 787-10).  Total program deliveries are 716 787s in total.  Of note, Boeing now has delivered more 787-9 compared to the 787-8.  This was accomplished when Boeing delivered a 787-9 to ANA which seems quite fitting given that ANA was the launch customer for both the 787-8 and the 787-9.  The company has turned over 354 x 787-8, 356 x 787-9 and 6 x 787-10.  Obviously, given the current breakdown of the backlog the number of 787-9s vs 787-8 will only grow unless there is a sudden surge in 787-8.  I believe, unless there is a major re-capitalization of the 787-8, that the smaller 787 will continue to have a decreasing share of the over all 787 order book.

Production has been stable as Boeing rolled out 13 787 in July.  I expect that most if not all these 13 should deliver in August.  

Orders were pretty good as the Farnborough Air Show gave Boeing the opportunity to make a big splash order wise.  As usual the show is dominated by narrowbody orders but Boeing did have 787 orders to announce even though some of them were already announced as MoU or LoIs.  Hawaiian firmed up their order for 10 x 787-9 with a further 10 options.  Air Lease Corp and United topped up their current 787-9 order book with 3 and 4 more respectively.  Vistara Airlines signed and LoI for 6 x 787-9 and a couple of unknown customers signed LoIs for 15 x 787-9 (one of which is a current customer).  The disappointment comes from Emirates still not finalizing their 787 orders which they announced late last year though that booking could show up (along with any other orders that were finalized since the air show) soon when Boeing releases its monthly order and delivery numbers for July in about a week.

Lastly, Boeing released it's 2nd quarter financial results last week.  The 787 deferred production cost should a decrease of $449 million from the 1st quarter of this year.  The total deferred costs has been reduced to $24.241 billion.  Additionally, Boeing increased the accounting block for the 787 program from 1,400 airplanes to 1,500 airplanes.  Thus in doing so Boeing is showing better profit margins on each 787 that they produce by spreading out the amortizing costs across a larger block of airplanes.  Overall, Boeing says that the 787 program is improving the cash flow to the company especially with the higher 787-9/787-10 mix that is currently being delivered to customers.

787 Spreadsheets