Sunday, December 15, 2019

787 Update for November 2019

Testing Complete3
To be assembled in Everett64
To be assembled in Charleston64
Parts Arriving6
Undergoing final assembly12
Storage/Change Incorporation and Re-Work0
Change Incorporation and Re-Work0
Pre-Flight Prep9
Production Testing17
Non Customer Flight Tests0
Ready for Delivery4

As the year draws to a close, Boeing is continuing to make a push to deliver 787s that have been piling up on the flightlines at Everett and Charleston.  They delivered an anemic 12 787s in November (2 x 787-8, 7 x 787-9 and 3 x 787-10). For the year, Boeing has delivered a total of 137 787s through November (8 x 787-8, 99 x 787-9, and 30 x 787-10).  Total program deliveries through November stand at 918 787s (368 x 787-8, 505 x 787-9, 45 x 787-10).

At the start of the year, I projected that Boeing would deliver around 164 jets.  To do that they would need to deliver 27 787s in December.  So far they've delivered only 4.  The big story affecting 787 deliveries is not production issues but rather deferrals of 787s by Chinese carriers. Boeing had to scramble to find new homes for airplanes that were built but not taken up by their customers.  Notable deferrals include 6 787s for Hainan Airlines, 2 leased 787s for Hong Kong Airlines.  Boeing found new customers for them: Vistara Airlines will take 4 787-9s destined for Hainan airlines but those deliveries won't start until early next year.  Bamboo Airways is taking the other two Hainan 787-9s and those should be delivered this month.  They were transferred from Hainan to China Aircraft Leasing Group which leased them to Bamboo.  The two 787-9s that were to be leased to Hong Kong Airlines from GECAS was sold to Biman Bangladesh Airlines and should be delivered this month.  The one common denominator here is that the deferrals and delays came from Chinese Airlines (Hong Kong Airlines and Hainan which owns Hong Kong Airlines).  I can't help but think if this is all related to the Trump Trade War with China or if it is a financial issue with HNA?  Suparna Airlines (also owned by HNA) was supposed to take several 787s but one of them was NTU and eventually will be going to the UAE as a business jet for the rich and infamous.   These still is another air frame for Suparna which has not flown and I am trying to find out if that aircraft will be going to another customer.  Nonetheless it has caused delays to the delivery of this airplanes which should have been delivered months ago.  Some of these airplanes should be delivered next year.

Charleston still is plagued with production issues leading to a shell game with 787s transiting between the final assembly building and the flightline to finish assembly tasks. Boeing is trying to maintain a build rate of 7/month and it appears that final assembly is taking longer than expected on the Charleston built 787s forcing Boeing to roll them out to the flight line before they are completed so that the line continues to move.  Boeing then rolls them back into 88-30 into a two or three final assembly positions where they can be worked on depending on the amount of work that is left to be done on each 787.  Charleston delivery rates however, have picked up over the last few months which has helped reduce the overcrowding at the flightline.  Everett continues to have a normal production output but their delivery rates have been very low leading to more 787s being left out on the flightline and even being stored on a closed runway that is also occupied by KC-46 tankers and 737 MAXs.  Some of the undelivered backlog belongs to the airlines that are taking some of HNA's airplanes like Vistara, Biman Bangladesh, and Bamboo.  However there are now 7 787-9s for Qatar Airways still sitting on the flightline and storage area at Everett.  Readers of this blog know Qatar Airways' habit for delays because of the smallest item that doesn't meet their standards.  All of Qatar's 787-9 are being built at Everett and the 7 airplanes are supposedly to be delivered this month. The delivery numbers will be important this month as Boeing desperately needs good news from BCA given all the 737 Max news that has come to define the company's performance this year.

The only notable order for the 787 program was from a big fish that Boeing has spent years trying to reel in: Emirates.  And it's firm order too!  Two years ago, Emirates stated their intention to buy 40 787-10s.  That was a big shot in the arm for the 787-10 which needed (and still needs) orders.  However it was just a letter of intent and as time went by the LoI was not firmed up and Emirates' fleet plans changed to the point that there were credible rumors that Emirates would not firm up the 787-10 order.  Indeed the LoI had lapsed during that time. In the last two years saw Emirates cut their A380 orders to the point that it spelled the death of the A380 and signed an LoI for the A350 and A330NEO (firmed up the A350 only). Boeing was (and still is) desperate to sign up more orders especially from a blue chip airline like Emirates. They were willing to cut some of the 777X orders that Emirates had firmed up years ago (a cut of 30 airplanes) in exchange for a firm order for 30 x 787-9s.  While it Boeing has achieved a book to bill of over 1 on the 787 this year, this order helped it with the dwindling 787 backlog and has helped keep the upcoming production rate reduction limited to the two years that Boeing has already announced.  We still have to wait for December's orders to come through in about 3.5 weeks but I'm not optimistic that will see any large orders like we saw from Emirates or Lufthansa this year.

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