Friday, March 15, 2019

787 and 737 MAX, A Tale of Two Groundings

The two horrible 737 MAX 8 accidents within 6 months of each other and under similar if not outright identical circumstances brings to mind the grounding of the 787s 6 years ago that were prompted by LION batteries that are used by that aircraft.  In each case there are similarities but also notable differences in the issues and how the different parties reacted to the safety of flight issues that were causes for both groundings.

In order to properly understand the context of these issues we should review what happened in January 2013.  In a matter of one week, multiple 787-8 belonging to Japanese carriers, Japan Airlines and ANA experienced electrical fires that were traced to the lithium ion (LION) batteries that were carried in the equipment bay of the 787s and used to supply internal power to the aircraft.  January 7 the first incident occurred on a JAL 787-8 that had just landed at Boston's Logan Airport.  Soon after the passengers and crew had deplaned, a maintenance worker noticed a burning smell. Airport fire rescue put out a fire that had started when the LION battery exploded in the aft electrical bay.

8 days later on January 15, 2013 an ANA 787-8 was flying a domestic route when smoke had entered the cabin.  The 787 made an emergency landing in Takamatsu, Japan where the passengers and crewed evacuated the airplane using the emergency slides.  After this incident, ANA promptly grounded all its 787s (which numbered 17 at the time).  One day later on January 16th, the FAA ordered the grounding of all US based 787s which, at that time, numbered 6 all owned by United Airlines.  However, other countries took the cue from the FAA and a worldwide grounding was in effect as aviation regulators took similar actions that the FAA had implemented.

It would be over four months before the FAA certified a containment system for these batteries that would protect the aircraft in the case of another battery fire. The airplanes returned to service once the FAA approved containment system was retrofitted in in service aircraft over the course of several months starting in late April, 2013.

Currently we don't have a definitive cause for the Lion Air and Ethiopian Airlines 737 MAX 8 disasters though it appears, from initial reports, that a flight control system new to the 737 and known as the maneuvering characteristics augmentation system (MCAS) is getting faulty angle of attack information from external sensors and forcing the aircraft into a nose down attitude.  This is one possible factor in the two crashes.  The other factor is flight crew training on the new system as well as the documentation in the flight manuals of this system and how to respond appropriately to any emergencies caused by MCAS.

Soon after the Ethiopian crash on March 10th and over the next 2 days, aviation regulators all over the wold started grounding the 737 MAX 8 but the FAA did not act and this is where bizarre things start to happen.  Take for instance that Boeing CEO Dennis Muilenburg called the President to reiterate that the 737 MAX is safe to fly.  As more and more aviation safety officials and airlines around the world ground the airplane the FAA still insisted that the airplane is safe to fly.  This goes one for two and half days until finally the President (not the FAA) announces the grounding of the 737 MAX 8 and 737 MAX 9.   The announcement didn't come from the FAA, it came from the President which is extremely unusual and, quite frankly, disturbing.  Equally disturbing is the lack of leadership in the aftermath of these crashes from the FAA unlike the response it demonstrated with the 787 battery issue.  The United States was the last to ground the 737 MAX 8 (and MAX 9) after data of both crashes showed a lot of similarities.

Lastly it appears that Boeing has been working on a software fix for MCAS since the Lion Air crash but the long government shutdown in December/January delayed the implementation of testing and certification of the fix.  It's unknown what the pre-shutdown plan for testing and certification was or if the shutdown had not occurred if the fix would have been rolled out in time to prevent the Ethiopian crash.

With the 787 battery issue in 2013, the FAA had lead from the get go thus reassuring airlines and their customer that they took safety of flight issues seriously.  However, the FAA in 2019 abdicated its fiduciary responsibilities by not grounding the 737 MAX after the Ethiopian crash and thus leaving it to aviation safety regulators outside of the US to ensure safety of flight issues with the 737 are addressed.  The FAA was had to dragged into the grounding kicking and screaming after over 300 people had died.  The FAA and Boeing need to do more to ensure that the commercial aircraft used world wide are free from safety of flight issues if they want to redeem their reputation.  Outside individuals who are not involved with aviation safety and implementation of the regulations need to keep quiet and let the professionals decide what is safe and what isn't.

Wednesday, March 13, 2019

Boeing 787 achieve 800 customer deliveries in February

Testing Complete3
To be assembled in Everett128
To be assembled in Charleston129
Parts Arriving6
Undergoing final assembly7
Storage/Change Incorporation and Re-Work0
Change Incorporation and Re-Work1
Pre-Flight Prep12
Production Testing4
Non Customer Flight Tests0
Ready for Delivery7

Boeing delivered 11 787s in February and in the process achieved 800 787 deliveries to paying customers.Boeing delivered 10 x 787-9 and 1 x 787-10.  So far this year Boeing has delivered 19 787 (16 x 787-9 and 3 x 787-10).  Total deliveries through February stand at 800 (360 x 787-8, 422 x 787-9 and 19 x 787-10).

787 number 800 went to Norwegian Air and was delivered on February 28.  This aircraft is L/N 813 (ZB837, G-CKWS).

Notable deliveries in February includes GECAS' 1st 787 which was leased to Suparna Airlines (owned by Hainan Group). This is also Supana's 1st 787.  American Airlines accepted the last 787 from its first order of 42 Dreamliners.  They have a new order of 22 x 787-8 and 25 x 787-9 which was placed last year.  This will give American 89 787s when the second tranche of 787s are finally delivered.

March deliveries look to be about 14 thus it appears that Boeing will start achieve a 14/month delivery rate this month though I'm still waiting for more information to confirm this.  If this hold expect a nice boost to Boeing's earnings with this increase rate and the expected accelerated drop in the deferred accumulated production costs.

As previously reported, Boeing rolled out 13 787s in January.  In February, Boeing rolled out 15 more thus it appears the 787 program is firmly producing at 14/month.  I expect a slight dip in roll outs in March due to February being a shorter month and Boeing starting final assembly on only 12 airplanes but Boeing is now rolling out 787s at 14/month.  Moreover, it appears that Boeing has assigned even numbered line numbers to Charleston and odd numbered line numbers to Everett.  Lastly, it appears that Boeing's production schedule has two 787s rolling out of the factories on the same from each final assembly location.  I believe this is to standardize production and delivery schedules.  If you take a look at the 787 spreadsheets, starting in mid February, one 787 was rolling out of Everett and Charleston each. We'll see if this trend continues.

Finally, orders are coming in for the 787.  Bamboo Airways of Vietnam was revealed to be the customer who ordered 10 787-9s in January.  This morning Lufthansa signed on to be the newest 787-9 operator.  Lufthansa confirmed to me that the this order is a firm order for 20 787-9s and the contract does not contain any options.  The German air carrier is another "blue chip" airlines to order the 787 (they also ordered the A350-900).  These airplanes are to be delivered between 2022 and 2027 and will replace some of the A380s that the airlines will be selling back to Airbus.  Ouch! Thus far in the 1st quarter of 2019, Boeing has firm orders for 38 787.  As I mentioned previously, Boeing needs to book on average of 14/month to keep up with the new production rate.  If the 1st quarter order book shows at least 42 787s ordered then it validates Boeing decision, thus far, to produce at 14/month.

Make sure you check out my 787 Spreadsheets for all the latest information: