2015 Look Ahead for the 787

With 2014 firmly in the rear view mirror, we can start looking ahead at what's next for the 787 program.

According to sources, Boeing is planning for 138 deliveries.  Given they just finished a year where program execution was not good, the prospect of Boeing hitting 138 deliveries is a little far fetched.  They would need to execute final assembly perfectly and drive down  assembly to delivery times.  In December, if the delivery outliers (namely aircraft going to Avianca, Etihad and Azerbaijan Airways) are taken out, then Boeing was able to assemble and delivery the 787 at an average of 107 days.  This is much to long if they intend to increase the number of deliveries in 2015.  In my view Boeing should be able to deliver around 125 to 130 787s.  I'll track their progress vs. the 138 plan deliveries and their delivery guidance for 2015 as it can help gauge how well the production system is working especially in terms of their internal goals.

2015 will be notable year for a few reason.  First there will be customers taking deliveries of their first 787s as well as existing operators taking delivery of their first 787-9.  Last year Boeing managed to deliver 10 787-9.  In the new year Boeing expects to deliver a significant number of the enlarged version of the aircraft.  The expectation is for 64 deliveries of the 787-9 which will help profitability of the 787 program overall.

Here is a list of operators who will be receiving their first 787 this year:

1st Time 787 Operator

American Airlines

Kalair (Bermuda)

Korean Air

Oman Air

PrivatAir

KLM - Royal Dutch Airlines

Saudi Arabian Airlines

Scoot Pte Ltd

Tuifly Nordic

Vietnam Airlines

An a list of operators who will be receiving their first 787-9:

1st Time 787-9 Operator

Air Canada

British Airways

Japan Airlines

Kalair (Bermuda)

LAN

KLM - Royal Dutch Airlines

Saudi Arabian Airlines

Scoot Pte Ltd

Vietnam Airlines

Obviously some of these deliveries had rolled over from last year, namely American Airlines, Korean Air, and Scoot.

However, the overriding theme of the year will not just be making timely deliveries but also trying to further reduce the cost of the 787 program and that starts with reducing deferred production costs and trying to cap it at the current $25.2bn level.

Finally here's a projection of the 2015 operator deliveries:

Projected 2015 Deliveries (Operator)	Expected Total Deliveries	Actual Deliveries	Exp.Pre-L/N 66 Deliveries	Actual Pre-L/N 66 Deliveries	Expected 787-8 Deliveries	Actual 787-8 Deliveries	Expected 787-9 Deliveries	Actual 787-9 Deliveries
Aeroméxico	3				3
Air Canada	5				2		3
Air India	4				4
Air New Zealand	3						3
American Airlines	12				12
ANA	10				3		7
Arke	1				1
Avianca	3				3
British Airways	5						5
Ethiopian Airlines	3				3
Etihad Airways	4						4
Hainan Airlines	2				2
His Majesty The Sultan's Flight	1				1
Japan Airlines	6				4		2
Jetstar	4				4
Kalair (Bermuda)	1						1
Kenya Airways	3				3
KLM - Royal Dutch Airlines	2						2
Korean Air	1		1		1
LAN	7						7
Norwegian Air International Ltd	1				1
Oman Air	2				2
PrivatAir	1				1
Qatar Airways	7				7
Royal Air Maroc	1				1
Saudi Arabian Airlines	1						1
Scoot Pte Ltd	10				4		6
TBD	3		3		3
Thai Airways International	2				2
Thomson	1				1
Tuifly Nordic	2				2
United Airlines	11						11
Vietnam Airlines	5						5
Virgin Atlantic Airways	7						7
Xiamen Airlines	4				4
Total	138	0	4	0	74	0	64	0

And a list of 2015 customer deliveries:

Projected 2015 Deliveries (Customer)	Expected Total Deliveries	Actual Deliveries	Exp.Pre-L/N 66 Deliveries	Actual Pre-L/N 66 Deliveries	Expected 787-8 Deliveries	Actual 787-8 Deliveries	Expected 787-9 Deliveries	Actual 787-9 Deliveries
AerCap	12				5		7
Aeroméxico	1				1
Air Canada	5				2		3
Air India	4				4
Air New Zealand	3						3
American Airlines	12				12
ANA	10				3		7
Avianca	3				3
BBJ	1				1
British Airways	5						5
CIT Leasing	2				2
Etihad Airways	4						4
Hainan Airlines	2				2
Japan Airlines	6				4		2
Kalair (Bermuda)	1						1
Kenya Airways	3				3
Korean Air	1		1		1
LAN	2						2
Norwegian Air International Ltd	1				1
Oman Air	2				2
PrivatAir	1				1
QANTAS	4				4
Qatar Airways	7				7
Royal Air Maroc	1				1
Saudi Arabian Airlines	1						1
Scoot Pte Ltd	10				4		6
TBD	3		3		3
TUI Travel	4				4
United Airlines	11						11
Vietnam Airlines	5						5
Virgin Atlantic Airways	7						7
Xiamen Airlines	4				4
Total	138	0	4	0	74	0	64	0

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer
2015 Projected Operator Deliveries
2015 Projected Customer Deliveries

Undelivered Air Canada 787 heading to Iqaluit, Canada, Why?

So this morning, a lot of 787 watcher, including myself observed that Boeing is sending a 787 that is scheduled to be delivered to Air Canada later this month to Iqaluit, Canada.  I'm at a loss to explain why though I'm going to speculate.

Iqaluit has an airport that used for extreme cold weather testing of aircraft.  Boeing has done cold weather testing on the 787 so this may be additional testing of a fully kitted out Air Canada 787 being done for the airline.  The aircraft ZA616 (LN 254, C-GHQQ) was flown to Portland, Or. for painting and then to Boeing Field which is unusual except Boeing's Test Flight group is headquartered there.  It is possible that the test flight crews were fitting out the aircraft with test flight equipment and the engineers were running tests prior to flying to Canada.  Again this is speculation on my part but it's the best possible explanation.

787 2014 Year End Report - Boeing finishes 2014 with 114 787 deliveries

Boeing finished 2014 with a typical December delivery rush including handing over 18 787s during December 2014.  This is a new 787 delivery record which surpasses 15 787 that was delivered in June of this year in order to make mid year delivery goals.

Here are the 787 numbers thus far:

228 - the total number of 787 that have been delivered to customers since deliveries began in 2011
114 - the total number of 787s delivered in 2014
35 - the total number of 787s delivered in the 4th quarter
18 - the total number of 787s delivered in December, 2014
118 - the total number of 787s that started final assembly in 2014
120 - the total number of 787s rolled out the 2 787 assembly halls
10 - the total number of 787-9s delivered in 2014
104 - the total number of 787-8s delivered in 2014
1.05 - the efficiency of the 787 production system in 2014 (the number should be below 1 to indicate an efficient production system)
0.97 - the efficiency of the North Charleston final assembly
1.09 - the efficiency of the Everett final assembly (includes both the main Everett and surge lines).

Boeing overall did well on the 787 program in 2014 though it does remain to be seen how they've been able to handle deferred production costs. Boeing did exceed their guidance by 4 aircraft though they were planning to deliver 120 787s in 2014.  Several had to be deferred to 2015 for various reasons including the lack of seats for completed aircraft. The fact that the production efficiency is above 1 indicates that the the production system is still not stable.  The difficulties that with traveled work and the need to re-hire temporary workers in North Charleston highlighted the ongoing production system issues that continue to plague the 787 program.  Even now aircraft that have finished final assembly are still worked on to complete assembly tasks.

Still Boeing was able to flawlessly execute on the 787-9, as well as get the production rate up to 10/month despite issues coming out of the North Charleston campus with traveled work.  Deferred production cost has increased to over $25bn as Boeing stockpiled parts to mitigate shortages and reduce traveled work.

787s were delivered to first time new operators including:

Air Canada
Air New Zealand
Arke
Avianca
Azerbaijan Airlines
Etihad Airways
Kenya Airways
Royal Air Maroc
Royal Jordanian
Thai Airways International
Virgin Atlantic
Xiamen

Plus new BBJ owners

December's delivery count was unusually large due to the delayed delivery of several 787s to Avianca (4) and Azerbaijan Airlines (2).  Earlier this year I was projecting that Boeing would deliver 120 787s.  Several were deferred due to delays with seats as well as knock on effects from previous delays.  Notably American Airlines and Scoot were to receive their first 787s in 2014 are now expected to receive them in 2015.  One early build 787 for Korean Airlines (VIP) was ready for delivery in 2014 but is now taped and sealed at the Everett Modification Center.  The fact that this aircraft is not being worked on and is sealed indicates that there is an unknown issue(s) holding up delivery to Korean Airlines.  This aircraft is to be used as a government VIP aircraft and it is possible the delay can be attributed to the finished interior that is to be installed in the aircraft including classified military gear though this is speculation on my part.

Boeing has set it self up for a 2015 rather well but issues still remain including deferred production cost and continued traveled work.  If they are able to over come these issues then we should see a high number of 787 deliveries in 2015 compared to 2014.

Stay tuned for my 787 2015 look ahead which will be out soon.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

Boeing meets 787 delivery guidance for 2014

With the delivery of the second 787 for Azerbaijan Airlines, Boeing had met their 787 delivery guidance of 110 for 2014.  The aircraft manufacturer isn't done and should be able to deliver 4 more 787s including 2 787-9s.  These aircraft all have had their first customer flights though there may be additional customer flights required and these should deliver starting early next week.

In a related note: Boeing pushed out the last 787 to be built in 2014.  The aircraft is for American Airlines and should deliver around March.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker

Boeing delivers first 787 to Avianca....finally

Update from my earlier post.   Avianca has finally taken possession of its first 787 yesterday.  The aircraft ZA665 (LN 217, N780AV) was reported at the Everett Delivery Center by sources. This indicates that the aircraft is due to depart from Everett soon.

This aircraft had a very long gestation period at Everett spending over 6 months from the start of final assembly to delivery at Everett.  It is suspected that there were seat issues but also financing issues that held up delivery.  Avianca is expected to take three more 787s before the end of the month.

Seats and Financing - hold ups to 787 deliveries in December

Boeing's aggressive 787 delivery schedule is being threatened by two issues: availability of BFE (buyer furnished equipment) namely the premium seats from Zodiac but more importantly the ability of certain airlines to fund the final payment to Boeing upon delivery.  Most of the aircraft's purchase price is paid upon delivery.  The seat issue has already shifted several deliveries into January.

For some carriers with less than stellar cashflow, obtaining the financing to fund this final payment has been tough.  In particular Avianca and Azerbaijan Airlines have had aircraft that are all set to deliver yet are still sitting on the flightlines at Everett and North Charleston.  The delivery dates have been repeatedly moved to the right and there hasn't been any further test flights nor any need for further test flights unless the delays take much longer at which point Boeing would have to fly a FCF (functional check flight) to make sure that the aircraft and it's systems still all check out.

Avianca has 4 787s on the flightline with 3 ready to be delivered.  Azerbaijan has both 787s that they ordered ready to be delivered as well.  The delays have been driven by the customers and not Boeing yet represents 6 aircraft that could be added to their year end and month end revenue totals.  Boeing is trying to keep the delivery schedule for these 6 airplanes in December and it does appear that they have time especially since the issues doesn't appear to be technical.

787 December Mid Month Report

It's already December 15th and thus far I can confirm that Boeing has delivered 5 787s thus far but I am waiting on confirmation on 3 additional deliveries to Avianca (2) and Azerbaijan Airlines (1) that are scheduled to be completed by the end of today.  With the 5 deliveries in December (thus far), Boeing has delivered 101 787s in 2014 and need 9 more to achieve their guidance of 110 deliveries.  They do have plenty of aircraft that appear to be ready to be handed over to customer as additional customer flights have taken place over the last few days.

the delayed deliveries of many of these aircraft have been attributable to different reasons including:

Delay seat deliveries from seat vendors (i.e. Zodiac) or delays in certifying the seats for installations Avianca, Etihad, American Air).  Bloomberg has an excellent article on the delays attributable to Zodiac

Financing issues (Azerbaijan Airlines).

Despite the trouble with deliveries, Boeing has still being going full tilt on production and my season adjusted calculations show that Boeing will start work on 8 787s in December while rolling out 9 from final assembly.

Lastly, the plane spotters in Abu Dhabi will get a special treat as Etihad's 1st 787-9 ZB077 (LN 229, A6-BLA) will fly to the country today, December 15th for a marketing trip.  It'll be there until the 18th and then fly back to Everett.  This aircraft still has not been delivered and has yet to take a customer flight though I don't know if the flight to Abu Dhabi wold count as a customer flight.  Boeing is still aiming to deliver this aircraft to Etihad on Dec. 31st.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker

Boeing falls short on November 787 deliveries, off to a slow start in December

Last month Boeing delivered an anemic number of 787s despite the growing backlog of aircraft at both Everett and North Charleston.  By the end of November, Boeing had delivered 96 787s for 2014 and needs to deliver a further 14 aircraft by the end of December in order to meet their goal of 110 787 deliveries for the year. The delays have pushed aircraft that were to be delivered in November to December yet almost 1/3 of the way through December Boeing has delivered only 1 787. 

According to the latest information (which changes more often than I can keep track), Boeing is looking to deliver 18 more 787s this month in addition to the 1 that has already been delivered to Air New Zealand.  I do believe that this number will eventually be trimmed down to 14 if not fewer.  Several aircraft have not had their B-1 flight as of yet despite having delivery dates later this month.  Several might also be pushed in January due to issues with customer supplied interiors and financing among other issues.  Other sources of delays maybe driven by weather conditions (B-1 flights have weather restrictions placed on them for safety sake) as well as the upcoming Holidays.  Boeing had delivered 15 787s in June of this year so it is entirely possible for them to crank out this number and I do think they can deliver 110 for the year but they do need to pick up the pace.  There are several 787s that were scheduled for delivery in December but those aircraft have already slipped into January, among them the first 787s for American Airlines and Scoot.

Among the candidates that expect deliveries this month are:

Aeromexico - 1

Air India - 1

ANA - 1

Avianca - 4 (787s that were delayed for yet unknown reasons but suspected to be interior furnishings)

Azerbaijan Airlines - 2 (rumored to have financing issues to complete the purchase, any one have any spare nickels and dimes to lend to them?)

Etihad - 1 (rumored to be delivered in January)

Japan Airlines - 2

Korean Air - 1 (terrible teen aircraft LN 11 for VIP transport but still needs to do a B-1)

Royal Air Maroc - 1 (still need to fly a B-1)

Thai - 1

TUI Travel (Arke) - 1

United Airlines - 1 (last 787-8 for UA)

Virgin Atlantic Airways - 1 (787-9, still needs to do a B-1)


A full year end review will be written up soon after the New Year followed by a 2015 Look Ahead.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker

Boeing announces the start of final assembly of 1st Charleston built 787-9

First Charleston Built 787-9 for United Airlines.  Boeing Photo

Boeing announced the start of final assembly on the first 787-9 to be built at their North Charleston facility and which will ultimately be delivered to United Airlines in about 3 months time.  The aircraft, ZB170 (LN270, N35953) was loaded into position 1A on November 23rd according to my sources.

Boeing is aggressively expanding its footprint in the North Charleston area and plans to build all three version of the 787 at the plant.

Here is Boeing's press release on the start of final assembly of ZB170.

Boeing South Carolina Begins Final Assembly of its First 787-9 Dreamliner

North Charleston site joins Everett, Wash., team in building newest 787

NORTH CHARLESTON, S.C., Nov. 24, 2014 /PRNewswire/ -- Boeing (NYSE: BA) has started final assembly of the 787-9 Dreamliner at its South Carolina facility. The team began joining large fuselage sections of the newest 787 Nov. 22 on schedule, a proud milestone for the South Carolina team and another sign of stability for the program.  

The North Charleston, S.C., site joins Boeing's Everett, Wash., final assembly, which began 787-9 production in May 2013. United Airlines will take delivery of the first South Carolina-built 787-9. 

"Our team is well prepared and eager to assemble the 787-9 Dreamliner," said Jack Jones, vice president and general manager of Boeing South Carolina. "Achieving this significant milestone in our final assembly operations demonstrates that we're performing well here at Boeing South Carolina. We're looking forward to delivering our first South Carolina-built 787-9 to United Airlines, and delivering 787-9s as well as 787-8s to all our customers." 

The 787-9 complements and extends the 787 family, offering airlines the ability to grow routes opened with the 787-8. With the fuselage stretched by 20 feet (6 meters), the 787-9 can fly up to 40 more passengers an additional 450 nautical miles (830 kilometers) with the same exceptional environmental performance – 20 percent less fuel use and 20 percent fewer emissions than the airplanes it replaces. The 787-9 leverages the visionary design of the 787-8, offering passenger-pleasing features such as large, dimmable windows, large stow bins, modern LED lighting, higher humidity, a lower cabin altitude, cleaner air and a smoother ride.

Charleston to start building 787-9

Since Boeing's 787 plant in North Charleston opened in 2011 it has exclusively built the 787-8.  This Sunday (Nov. 23rd) that will change when ZB170 (LN 269, N35953) is loaded into position 1A at the North Charleston plant to start the final assembly process.  The aircraft is destined for United Airlines and should be delivered sometime in March.

This is a huge milestone as the future of the 787 seems to be tied to the 787-9 and, to certain extent, the 787-10.  As the production rate increases in North Charleston there should be more 787-9s being built in North Charleston but for the first year or so most of the 787s that are built in Boeing North Charleston will be the 787-8.  In 2015 I expect the lion share of 787-9 that are delivered will be built in Everett.

Delta goes with Airbus for widebody order spurning Boeing

Leeham Co. analyst Scott Hamilton broke the news last night that Delta Airlines has decided to go with Airbus' offer of the A350-900 and A330-900 aircraft essentially rejecting Boeing's offer of the 787.  The rumor, right now, is that Airbus offered favorable delivery slots in 2017 while Boeing's delivery book for that year is completely sold out.


Interestingly Delta had inherited Northwest Airlines' 787 order when they merged in 2009.  At that point the Delta had the early delivery slots for the 787s yet over time they had elected to move those delivery slots further out to the right to around 2020 and beyond.  If they had kept those delivery slots for the 2017-2018 time frame, Delta could have had the 787-9 and at a very competitive price as well.  One has to question Delta's fleet management decisions in context of the Airbus order while still holding a 787 order with early delivery slots.


Now that they have gone with Airbus the 787 order is in limbo and, in my opinion, order that will never be delivered even though it will remain on the Boeing order book just like Virgin Atlantic's A380 order with Airbus.

Boeing looks to deliver fewer than 10 787s in November

With November more than half over Boeing has recorded only 1 delivery of a 787 this month but more troubling is the continuous shifting of the delivery schedule to the right setting up what may be a very un-happy holiday season for the Boeing workers who would have to put in overtime to get these aircraft completed, tested and delivered.

Boeing can deliver 8 more aircraft this month but one of them, a 787-9 for Air New Zealand, hasn't had its first flight yet and is tentatively scheduled to be delivered around Nov. 24th.  It appears that this aircraft may fall into the December delivery time frame thus I see Boeing only delivering only a total of 8 787s this month.

Notably there are 4 787s for Avianca all of who are ready for delivery or are close to being ready for delivery but these deliveries are now not scheduled to start until December due to some unspecified issue.  Rumor has it that the 1st class seats are not FAA certified though I doubt that as all the customer supplied options such as seats come from the Boeing catalog which are FAA certified.

Also many of the 787s have yet to take their first customer flights and that schedule is also slipping to the right.

This can leave a large number of 787s hanging around Everett (not so much Charleston due to the low production output) as the Holidays come up.  This can serve to continue to increase Boeing's deferred production costs well past the $25.2bn mark as Boeing will have to pay a tremendous amount of over time to catch up in December.  If Boeing only delivers 8 total 787s in November, their YTD total would be 98 and 12 short of their goal of 110.  It is certainly possible for them to deliver 12 787s in one month; they demonstrated they can deliver a significant number of 787s in 1 month but it will come at a cost.

Additionally, they have undertaken very few B-1 flights for aircraft that are due to be delivered in December and there a re still a number of 787s that are at the EMC or on the 40-51 ramp that are finishing up traveled work.

All the while production continues at the 10/month pace though with continued traveled work issues.  Thus far they've rolled out 4 787s with a 5th due to roll out on Sunday night and they've started final assembly on 5 other air frames.  Clearly the backlog in increasing so much that Boeing will be sending 787s to Charleston for final delivery as the ramp space at Everett is shrinking.

It is plainly obvious that Boeing production issues on the 787 are far from over and I do think the only way for them to be resolved is to through more resources and money now before the issues continue to snowball.

We'll see for December brings but right now I  think it's safe to say that Boeing 787 deliveries for this month will be terrible at best.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker

Boeing Delivers 200th 787

Boeing officially delivered the 200th 787 today to Qatar Airways.  The delivery was made at Everett where the aircraft was assembled and tested.  This aircraft is the 16th delivered to Qatar Airways and is the 86th Dreamliner delivered this year and the 7 delivered this month.  Boeing delivered the 100th 787 on Nov. 4th, 2013 to Japan Airlines so it too just under one year to deliver the 200th 787.  Qatar is expected to fly the aircraft away by tomorrow to Victorville, Ca.

If Boeing is able to maintain 10 deliveries per month then we should see the 300th 787 delivered around early to mid August 2015.


787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker

787 Mid Month Report - October, 2014

With 10 days left in the month, Boeing seems to be struggling to get production airplanes into the air for testing prior to delivery by the end of this month.  Thus far Boeing has delivered 5 787s this month but I do expect 1 more to deliver by the end of this week.  With those deliveries Boeing will hit 199 deliveries and I believe the 200th delivery will go to Qatar Airways when ZA475 (LN 207, A7-BCP) is delivered to the carrier around October 27.  Boeing is trying to deliver a total of 11 787s this month including a -9 to United Airlines.  Production flight testing seems to have slowed though it's unclear why.There are still a number of aircraft that still need to perform further Boeing and/or customer flights before they're ready for delivery within the next 10 days.

On the production front Boeing has rolled out 8 787s and started final assembly on another 8.  They will end rolling out a total of 11 787s from final assembly this month.  The inventory backlog sitting on the flightlines at Everett and Charleston won't change this month.  The schedules for many 787s deliveries have been pushed to the right.  For example, Avianca's first 787 was supposed to have been delivered in September.  It is now scheduled to be delivered in mid November.  As we move into November Boeing will change the final assembly line slightly in 40-24 (the surge line).  Instead of the 6 positions that are currently in use (0, 1A, 1B, 2, 3, 4), Boeing will go back to 5 positions starting around October 29th. (0, 1, 2, 3, 4).  I believe this is in preparation of winding down the surge activities by 2016 and moving all Everett 787 production to 40-26.

Production is slow and 787 inventory is growing.  While I don't have any concrete information as to why 787 deferred production costs are rising ($25.2bn through the end of the third quarter), I feel that it is undoubtedly due to the traveled work following all these airplanes.  For a 787 to go from the start if final assembly to delivery takes almost 4 months and therein lies the problem for the increase in deferred production costs.  These airplanes, going through the production system at Everett and Charleston, have to spend a lot of time finishing assembly tasks after final assembly is completed.  The promised efficiencies on the final assembly level have yet to materialize but Boeing insists they will start turning profitable on the 787 program in 2015. Part of the increase in production cost is due to the introduction of the 787-9.  These aircraft had to spend time at the EMC undergoing change incorporation as well as finishing traveled work.  As the aircraft is more integrated into the 787 production system and change incorporation is no longer necessary, cost to produce the 787-9 should come down  and should aid the overall reduction of deferred production costs in 2015.

I believe that in order to gauge that is to closely examine the time it takes for Boeing to get a plane from start of final assembly to delivery.  We need to see the aircraft coming out of final assembly without any traveled work.  This means that the 787 goes from the final assembly hall to the paint hangar then directly to the flightline to start production testing.  It also means that Boeing minimizes company and customer test flights which indicates improved build quality.  Currently Boeing has 32 787s (including the the "Terrible Teens" but not including those that are in production) in Everett.  This rising inventory needs to be cleared faster than the current rate which can be tracked on the production Trends spreadsheet.  Simply, Boeing needs to deliver 787s faster than then they are rolling them out at the factory.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker

Boeing rolls out the first 787 for American Airlines.

Boeing rolled out the first 787 for American Airlines on Oct. 6th.  The aircraft was originally supposed to be delivered in November is now slated for delivery on December.  It is on the 40-51 Ramp finishing up assembly activities followed by painting.

First 787 for American Airlines, Photo by MOONM

Additionally Boeing has finally delivered one of 3 787-8 flight test aircraft to a customer.  The Fuerza Aérea Mexicana (Mexican Air Force) took possession of ZA006, the last test flight aircraft. After undergoing extensive re-work and re-build, the aircraft was bought up to FAA certificate standards though I am not sure if it has it full passenger interior installed or not. The aircraft is at the Charleston Delivery Center and is supposed to fly away tomorrow Oct. 9th).

ZA006 at the Charleston Delivery Center, Photo by reader

Boeing 787 production looks to be in ok shape but it is taking quite a bit of time to deliver the 787 into customer hands. I have observed a continuing movement of delivery dates to the right of the schedule that at this point I think Boeing will deliver about 10 to 11 787s in October. This is not a bad number but it only gradually reduces the built up inventory. I examined the average number of days it took Boeing to get an aircraft from final assembly to delivery.  I took out outliers or aircraft where I did not have complete information. The results may surprise you:

February, 2014 - 114.8 days
March, 2014 - 117.6 days
April, 2014 - 126.4 days
May, 2014 - 112.4 days
June, 2014 - 206.5 days
July, 2014 - 141.4 days
August, 2014 - 117.7 days
September, 2014 - 127.5 days

These averages need to be put into proper context.  They include the 787-9 (from June on)  These early 787-9s had to go through change incorporation and required more build time compared to the 787-8 thus the number of days fro the start of final assembly to delivery were  higher for these airplanes and distorted the results. Here are the average number of days it took to build the 787-8:

February, 2014 - 114.8 days
March, 2014 - 117.6 days
April, 2014 - 126.4 days
May, 2014 - 112.4 days
June, 2014 - 125.6 days
July, 2014 - 121.1 days
August, 2014 - 117.7 days
September, 2014 - 118.4 days

As you can observe the average time it takes to build the 787-8 (this includes both Charleston and Everett) is fairly stable.  As Boeing get more familiar with building the 787-9 and the need for change incorporation goes away as well as the need for extensive time  to finish traveled work, we should see build times for both versions of the 787 go down to below 100 days.

There is still no known timetable when the stabilization of the production system will occur and it appears that Boeing is continuing to struggle with traveled work which has been the bane of the 787 program currently.  There has been flashes of hope for a 90 day rate or lower (start of final assembly to contractual delivery).  For example Boeing delivered a 78 to Tui Travel in 84 days from Everett and Charleston delivered a 78 in 86 day to Kenya Airways.  2015 should bring much required and welcomed improvements to the 787 production system.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker

Boeing 787 September deliveries end third quarter on a high note.

September Month End Review

Boeing delivered 11 787s in September thus ending the third quarter on a high note after a a slow start in July.  For the quarter, Boeing delivered 31 787s.  The yearly total thus far is 80 aircraft in 2014 (includes one aircraft delivered on Oct.1) and 194 since deliveries began a little over three years ago.

The target is still 110 deliveries in 2014 and they can easily make that with and average of 10 aircraft delivered a month for the next 3 months.  Earlier I had projected that Boeing can deliver around 120 aircraft.  Clearly that number can't be reached but they do have the ability to deliver between 110 and 122.  787s deliveries were lackluster in July but rebounded nicely in August with 13 deliveries and maintained a strong pace with 10 in September.

In terms of efficiency. Charleston delivered 3 Dreamliners and rolled out only 2.  That translates to and efficiency of .667 (the lower the number the more efficient the plant is.  The Everett plane had an efficiency rating of 1 (rolled out 7 and delivered 7).

Future Deliveries

Deliveries included 3 787-9 (one each to United, ANA and Air New Zealand).

Planned deliveries for October are looking to be on the order of 11 to 13 aircraft.  This includes the 10th and final 787-8 for Ethiopian that is company owned which was delivered on October 1st.  Ethiopian will be taking 3 or 4 more 787-8s on lease from AerCap over the next year or so.  Boeing should break 200 deliveries easily though it's difficult to speculate which aircraft/customer will have that honor.

Deliveries should include:

1 787-9 to Virgin Atlantic (expected around Oct. 6)
1 787-9 to Etihad Airways
1 787-9 to United Airlines
1 787-8 to Fuerza Aérea Mexicana (Mexican Air Force) (around Oct. 8th)
1 787-8 each to Avianca, Kenya Airways, Xiamen, Thai Airways (leased from AerCap), Royal Jordanian (leased from CIT Leasing), and Air Canada
2 787-8 to Qatar Airways

Of course much of this depends on the preparations and readiness of the individual aircraft to be delivered including undertaking ground testing and production flight tests s well as the readiness of the customer to induct them into service.  Of the aircraft mentioned in the above list, three have yet to conduct their B-1 flights.

Production




Etihad 787-9 on 40-51 Ramp. Photo Courtesy of Brandon Ferris




Japan Airlines 787-9 in the EMC. Photo Courtesy of Brandon Ferris

In terms of production, Boeing should start final assembly on 10 to 11 787s this month. 4 will start on on the main line in 40-26, 3 on the surge line in 40-24 and 3 to 4 on the Charleston line.  They should roll out 10 this month but it is key that current month deliveries exceed the number of aircraft rolled out in order to reduce the carried inventory.  Boeing had built up a large 787 inventory during the first half of 2014 that they are now trying to catch up to deliveries in the second half.  They did a good job in the third quarter but the 4th quarter will be critical in reducing it further.

Boeing is also aiming to move the aged inventory (test flight aircraft plus the early build 787s (terrible teens).  ZA006 will be delivered to the Mexican Air Force and ZA003 will be donated to the Museum of Flight in November.

Sales

In the meantime, Boeing is continuing with several sales campaigns which can yield some significant orders for the 787.  However late last month they booked a cancellation for 15 787-9 for Air Berlin as part of a cost cutting move.  Interestingly, at the same time Boeing booked an unidentified order for 15 787-9s.  It is widely believed that the unidentified customer is Etihad which will use the aircraft either for itself or for one of the partner airlines in which the carrier has a financial interest.  This is reinforced by the fact that Air Berlin didn't pay any penalties for the order cancellation because Etihad took up the order.  This cancellation may have ramifications for a another sales campaign that is currently on going.  It is expected that Virgin Atlantic will exercise 5 787-9 options and I wouldn't be surprised if they make that announcement when they pick up their first 787-9 from Everett on Tuesday.  Sir Richard Branson also indicated that he is interested in the 787-10 so we might even see a new 787-10 order from them on Tuesday but let's wait and see on that one.

The two big sales campaign are Delta's order for 50 widebody aircraft.  Delta has shortlisted the selection to the 787-9 and the A350-900 and this is where the Air Berlin cancellation may have an effect.  The cancellation frees up early delivery slots which can entice Delta to buy the -9.  However, with Etihad taking up the order it remains uncertain if they kept Air Berlin's delivery slots.  If not then Boeing may have a leg up on Airbus for this order.

The second major 787 order would be one from Emirates which Boeing has coveted for a long time.  With the success of placing an incredibly huge number of 777 (777-300ER and 777X) with Emirates, Boeing still wanted to get them signed on to the 787.  With Emirates' cancellation of their entire A350 order, which will now be competed with the 787 and the A350, Boeing has a tremendous opportunity to finally place the 787 with the only holdout of the ME3 that hasn't placed a 787 order.  The decision is expected to come sometime in the first quarter of next year but I suspect that Boeing will be very aggressive in the pricing vs. the A350.

787 Full Production Table

787 Current Production Table

Delivered 787 List

787 Production and Delivery Trends

787 Monthly Delivery Tracking

Current 787 Operators

Total 787 Deliveries By Customer

2014 Projected 787 Deliveries

787-9 Flight Testing Tracker