Future profitability of the 787 program is going to be
driven by production efficiencies both in final assembly as well as at the
supplier level. The drive for greater
efficiency seems to be having positive results as 787 build times have reduced
but also build quality has improved.
A way to indirectly track this is via the number of flight
tests that each 787 conducts prior to delivery.
Usually with a mature program like the 777, the aircraft conducts a B-1
(Boeing) flight test to wring out the aircraft and look for any issues that may
have occurred during production. This is
followed by a C-1 (customer) flight. Flights
for painting are not included. Looking
at this metric optically we can see that the number of flights that are flown
has decreased to point that Boeing needs about 3 to 4 flight with a few needing
as few as 2. Clearly Boeing is trying to
reach 777 level of program maturity and improving build quality will be
important in the company’s ability to achieve that goal.
Additionally Boeing is also trying to achieve production
efficiency which is going to be needed as Boeing eyes a rate increase early
next year as well as closing the surge line and moving the three airplanes that
are produced on that line to the main 787 lines in Everett and North
Charleston. The two main production
lines need to be more efficient in order to handle the transfer of work which
entails each line to produce 5 airplanes per month by the end of the year.
Boeing plans to go to 12 per month in the first quarter of next year (Perhaps
as early as January but I think February is more likely).
I am revising my 787 delivery estimate for June based on
information from sources. Earlier I had
projected 14 787s will be delivered and I believe that they will now deliver 10
787s in June. Boeing should roll out 11
787 from Everett and North Charleston this month. The revised delivery projection includes 2
Etihad 787-9 (1 of which has just been delivered) however the other one has yet
to conduct its first flight. I still
have no clarity on what the issues maybe on the Etihad aircraft and given that
Boeing delivered one, I’m not inclined to believe that this has anything to do
with Zodiac seat issues but barring any new information it is hard to speculate
on what these issue(s) may be. Boeing
still has to conduct B-1 flights on 3 other 787s that are due to be delivered
this month other than the aforementioned Etihad 787-9.
There was some good news reported by Guy Norris at AviationWeek. He reported that the 787-10 is
running ahead of schedule. Reports are
out via Aspire Aviation that the -10’s entry in to service is being pushed up
to 1st quarter 2018 versus the 2nd quarter of that
year. Norris reports that they will have
reached 90% of the detailed engineering release later this year. The -10 is a simple stretch of the 787-9 and
is expected to have 95% commonality with its shorter sibling thus simplifying
spares and training expenses for airlines.
The aircraft is expected to start production in early 2017 when ZC001
(LN528) is assembled in North Charleston.
Thus far the -10 (like the -9) has had a trouble free birth and will
probably be one of the stars of Boeing’s widebody lineup which brings us to my
last topic of the post…..sales.
The 2015 Paris Air Show is right around the corner and while
it is expected that Airbus will rule the airshow order book, Boeing will have a
few announcements of its own. There are
several unidentified 787 orders that are on Boeing’s firm order book most of
which are 787-9 orders. Based on
conversations I do see Boeing announcing the customers for some of these orders
including 30 787-9 for Hainan Airlines (I believe that 24 to be purchased and 6 acquired on
lease). 6 787-8s for Ethiopian which
will be culled from the “terrible teens” is also expected to be announced. Sources have told me that Qatar Airways,
whose order of 30 787-8 will be filled by this time next year, may exercise the
30 787 options it has for the 787-10.
Beyond Paris other potential orders to look forward to include 100 x 787
from Emirates which would mostly be the 787-10 but would also include some
787-9 says Saj Ahmad of Strategic Aero Research. He said that Emirates would possibly take up
an additional 50 787 options to be exercised on any 787 model. This order should be revealed at the Dubai
Air Show in November. QANTAS is expected
to exercise the 50 787-9 options later this year.
Lastly, even though we're not quite to mid year it's not too early to look towards 2016 deliveries on a macro level. If, as expected, Boeing increases production early next year to 12/month. I do see Boeing having the potential to deliver around 143 787 including several "terrible teens." This will be the year that the 787-9 will greatly out deliver the 787-8 by a margin of 3 to 1. This equates to 107 787-9 deliveries and 36 787-8 deliveries. This is not unexpected as Boeing has delivered, thus far, almost 56% of the total 787-8 order intake since the program inception while only delivering 5.5% of the total 787-9 order book. Many observers are of the opinion that future 787-8 order will be limited as many airlines are gravitating to the 787-9 either as new orders or converting existing 787-8 order to the larger -9 and -10 models. Barring a major improvement program for the 787-8 this trend may very well continue thus leaving the 787-8 size market to the A330-800NEO.
Total 787 Deliveries By Customer
2015 Projected Operator Deliveries
2015 Projected Customer Deliveries
2015 Projected Operator Deliveries
2015 Projected Customer Deliveries
787 Build Location By Customer
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