FAA temporarily ground US-based 787s, foreign based 787s to follow suit

The FAA, this evening, ordered a temporary grounding of US-based 787s due to the continuing Lithium Ion battery issues.  The precipitating event was the leakage of the battery's caustic electrolytes in the forward E/E bay of ZA102 (LN 9, JA804A) during the flight in Japan yesterday.  According to Dominic Gates, in an article posted this evening, battery fluid sprayed out to distance of 12 feet away from the battery.   The electrolytes are flammable and could have easily started a fire in the lower bay.  Some of the spray was vented overboard through an outflow valve. The FAA had issues an emergency airworthiness directive requiring the grounding and inspection of all US-based 787s.  Typically other countries follow the FAA or EASA lead when they issue such directives and it is expected that other aviation regulators in the countries that fly the 787s will also ground the aircraft and follow the FAA's lead on the next actions.  The other countries include Ethiopia, Japan, India, Qatar, Chile and Poland. Japan, Poland, Qatar and Chile has already announced the grounding of the 787s under their authority and I do expect that Chile and India will follow very soon.

Here is the text of the FAA statement:

As a result of an in-flight, Boeing 787 battery incident earlier today in Japan, the FAA will issue an emergency airworthiness directive (AD) to address a potential battery fire risk in the 787 and require operators to temporarily cease operations.  Before further flight, operators of U.S.-registered, Boeing 787 aircraft must demonstrate to the Federal Aviation Administration (FAA) that the batteries are safe.    

The FAA will work with the manufacturer and carriers to develop a corrective action plan to allow the U.S. 787 fleet to resume operations as quickly and safely as possible.

The in-flight Japanese battery incident followed an earlier 787 battery incident that occurred on the ground in Boston on January 7, 2013. The AD is prompted by this second incident involving a lithium ion battery.  The battery failures resulted in release of flammable electrolytes, heat damage, and smoke on two Model 787 airplanes.  The root cause of these failures is currently under investigation.  These conditions, if not corrected, could result in damage to critical systems and structures, and the potential for fire in the electrical compartment.

Last Friday, the FAA announced a comprehensive review of the 787’s critical systems with the possibility of further action pending new data and information.  In addition to the continuing review of the aircraft’s design, manufacture and assembly, the agency also will validate that 787 batteries and the battery system on the aircraft are in compliance with the special condition the agency issued as part of the aircraft’s certification.

United Airlines is currently the only U.S. airline operating the 787, with six airplanes in service. When the FAA issues an airworthiness directive, it also alerts the international aviation community to the action so other civil aviation authorities can take parallel action to cover the fleets operating in their own countries.

Here is the text of Boeing's statement:

Boeing Chairman, President and CEO Jim McNerney issued the following statement today after the U.S. Federal Aviation Administration (FAA) issued an emergency airworthiness directive that requires U.S. 787 operators to temporarily cease operations and recommends other regulatory agencies to follow suit:
"The safety of passengers and crew members who fly aboard Boeing airplanes is our highest priority.
"Boeing is committed to supporting the FAA and finding answers as quickly as possible. The company is working around the clock with its customers and the various regulatory and investigative authorities. We will make available the entire resources of The Boeing Company to assist.
"We are confident the 787 is safe and we stand behind its overall integrity. We will be taking every necessary step in the coming days to assure our customers and the traveling public of the 787's safety and to return the airplanes to service.
"Boeing deeply regrets the impact that recent events have had on the operating schedules of our customers and the inconvenience to them and their passengers."

Thus the FAA is requiring the operators to prove to the FAA that the batteries are safe to operate on their flights. I expect that other aviation regulatory agencies will require the same of the 787 operators registered in their own countries.

It is not known how long the 787s will be out of service but as a point of reference, the FAA grounded the DC-10 in 1979 after a horrific crash of an American Airlines DC-10 in Chicago.  Those airplanes were grounded for a month.  The seriousness of this battery issue is not fully understood at this time but it may not last as long as a month. 

The maker of the battery, GS Yuasa of Japan is under a lot of pressure to figure out what is happening with their batteries.  Everything will be examined including the manufacturing of the cells themselves as well as potential flaws in the design.  Solutions may include switching to a different type of battery, perhaps Ni-Cads but I'm not sure if that is feasible.

In terms of production, I don't believe that Boeing will stop production and assembly of the 787 though they will not be able to carry out any test flights until they are cleared to do so by the FAA.  The ramps at Everett and Charleston will fill up if the emergency AD lasts more than a month.  What is not known is how this will affect the planned ramp up of the 787s later this year.

One area that may see an effect is the on going labor negotiations between Boeing management and SPEEA.  Already SPEEA has flowated the idea of extending the already expired contract. According the the proposal from SPEEA's web site, they propose to roll the items to which both sides have agreed to into the existing contract and extending the current contract another four years.  Boeing may be advised to take this offer as they can ill aford a strike at this juncture.  Here's the text from SPEEA's web site:

With the desire to focus all attention on solving the emergent issues with the 787, 
the SPEEA Professional and Technical Negotiation Teams today (Jan. 16) the union representing engineers and technical workers today (Jan. 16) proposed incorporating areas of agreement from ongoing negotiations into existing contracts and extending our Boeing contracts for another four years.

This “best and final” offer by SPEEA, IFPTE Local 2001, was presented as negotiations with Boeing resumed at 1 p.m. with the assistance of the Federal Mediation and Conciliation Service (FMCS) at the SeaTac Hilton. 

SPEEA’s unprecedented offer would free Boeing and 23,000 engineers and technical workers from protracted and increasingly contentious negotiations that appear headed for a strike. It also allows the company and our technical workforce to focus on 
reaffirming confidence and proving the 787 
is the reliable and safe product employees know it to be. Completing negotiations also helps Boeing stay focused on supporting customers, engineering the 767 tanker, 737 MAX, increasing 737 and 777 production rates and the other products needed for our national defense.

“These negotiations have been going on for more than a year,” said Tom McCarty, SPEEA president and Professional Team member. “At this point, we should move forward with the items upon which we can agree, and leave the status quo in place for the remaining items.”

In addition to the proposed contract extension, SPEEA requested that Boeing continue to meet under the auspices of FMCS mediation to tackle the difficult issues that have proven so divisive in these negotiations.

“Our hope is that we can work collaboratively to find solutions in a data-rich environment outside of the constraints of the collective bargaining process” said Ryan Rule, Professional Team member. 

In making the proposal, SPEEA agreed to accept Boeing’s funding mechanism for the Ed Wells Partnership training program.  The status quo proposal continues to offset company medical costs through annual deductible increases based on salary growth.  To put to rest the pension issue, a major point of contention, SPEEA proposes to accept the same pension proposal that Boeing negotiated with the International Association of Machinists (IAM District 751). Finally, the contract extension offer is made with the understanding Boeing recognizes same-sex survivor pension benefits pursuant to Washington state law. 

“With our contracts put to rest, we can all roll up our sleeves and work the issues facing the 787 and Boeing,” said Sandy Hastings, Technical Team member. “SPEEA members know this is a great airplane, and we are eager to prove this to our customers, the flying public and the FAA (Federal Aviation Administration).”

SPEEA and Boeing started meeting in April to negotiate new contracts for 15,550 engineers and 7,400 technical workers. In October, engineers rejected Boeing’s initial offer by 95.5 percent. Technical workers rejected the company’s offer by 97 percent.  Existing contracts expired Nov. 25. Since resuming talks Jan. 9 after a month-long FMCS-imposed recess, members increased preparations for a possible strike. A 40-day strike in 2000 by SPEEA stopped deliveries and caused major factory and service bottlenecks at Boeing plants around the country.

The issues facing the 787 are extremely serious but they can be overcome.  The biggest hit will be to the 787s reputation and reliability.  Boeing will need to focus 110% of its talent and resources on fixing these issues and demonstrating that the 787 is a safe aircraft not just to their customers but to the traveling public.  I do hope that the FAA initiated review will get to the bottom of these problems and find solutions to them.  In the meantime, I'll continue to track the production of the 787 but I don't expect to see flights for another few weeks.

ANA 787 makes emergency landing after smoke appears in cabin.

UPDATE 2: Report now that Japan Airlines is temporarily grounding all 787s as well.

UPDATE: ANA has told the local Japanese media NHK that they are grounding all 17 787s for inspection.  The report of smoke is as of yet unconfirmed but the aicraft is questions is ZA102 (LN 9, JA804A) which was delivered on January 14, 2012 (exactly a year ago) and first flew on January 19, 2011.

Reports are coming out of Japan of another 787 incident this time there was smoke in cabin while the aircraft was in flight and lead to an emergency landing in Takamatsu in Western Japan.  The passengers evacuated via deployed emergency slides.  There is an unconfirmed report that cockpit indicators showed a battery failure. It is unknown which aircraft it was or when it was delivered.

There is a further unconfirmed report that ANA has ordered all 787 grounded for emergency inspections.  I'll update this story as more information becomes known.

American and Boeing closer to finalizing 787/737MAX deals

In a proposal revealed by Flightglobal's Stephen Trimble, AMR has proposed to finalize the 787 and 737MAX deals (both currently a purchase agreement) by the end of the month with some modifications.  With regards to the 787 there are two modifications:

1) Of the 42 787s that AMR intends to order, 20 will be for the 787-8 and 22 for the 787-9.  Previously AMR was going to order 42 787-9.
2) The first scheduled delivery of the 787-9 will be restored to the original 2014 time (November 2014).  The delivery time frame had slipped to beyond 2014 due to the production issues at Boeing.

This is just a proposal that AMR has to approval from the US Bankruptcy Court for the Southern District in New York.  The hearing is  to take place on January 23 and if the court (and creditors) gives its approval.  The firm order can be placed before the end of January for 42 787s and 100 737MAX.  Other changes to the purchase agreements includes a lower price on the737MAX and adding 60 737MAX options.  AMR will also have 58 787 options. that will be part of the contract.

AMR wold have to have negotiated the terms of the final contract with Boeing before filing the motion the the bankruptcy court and having the contract firmed before the end of the month so it does seem that Boeing is on board with AMR.

FAA to carry out detailed review of 787 electrical system,Boeing to continue to produce, assemble and deliver Dreamliners during review

The FAA and Boeing announced that the government will carry out a detailed review of the design, manufacture, and assembly of the electrical and power distribution systems abroad the 787.

Boeing has told me that this review does not affect the production, assembly and delivery of the 787s nor does it ground the 787s currently in service. Boeing did conduct a ferry flight of one 787 to Charleston after being painted in Ft. Worth and had planned to do a first flight of another 787 today (put off to tomorrow probably). Thus Boeing continues with operations as usual and the operators continue to fly the aircraft. today ANA did initiate service between San Jose and Tokyo using the 787. However, this action will delay the efforts of Boeing to certify the aircraft for ETOPS 330.

Possible results from the review can include:

1) redesign of components
2) changes in manufacturing processes and improved quality control
3) nothing

The last option is unlikely to happen and it is all but certain that there will changes coming. The question is what are the nature of the changes and what affect will it have on production and delivery as well as the program's bottom line which is already in the red?

Both Boeing, the DOT and the FAA went to great pains to reiterate during the announcement today that the aircraft is safe and reliable but observers do question that assessment given that the FAA is conducting the review in light of the electrical issues and the battery fire that the in service 787s have experienced to date. I do believe that at the end of the day there will be changes that could add to the cost of production of the 787 and may add delays to the planned ramp up to 10/month.

There is no timetable for the conclusion of the review and Michael Huerta did say that the length and any changes that the FAA will require will be dependent on the data that the agency collects and analyzes from Boeing and the suppliers.

A source told me that he feel that the investigation will either validate the design or find issues which they will fix and he welcomes the investigation. It is a serious enough issue to look into but he also thinks that the FAA won't find anything that won't require anything more than tweaks or adjustments to quality control and should not be a show stopper. He isn't losing sleep over the investigation.

In the meantime the battery fire on ZA183 and the fuel leak on her sister ship the following day has generated such a media frenzy that new outlets are now reporting on issues such as cracked windshields,and oil leaks. These are issues that occur on airplanes all over the world and are more of a nuisance than a public safety issue. The media jumped on every little squawk that occurred since the fire. My feelings is that the media has decided to make newsworthy, simple issues that occur everyday on airplanes around the world simply because they were bored and needed to sell papers. There is simply no need to to repot a cracked wind shield or a simple oil leak for any other reason except to jump on the bandwagon with those how are shrilling that the 787 is an unsafe airplane when in reality it is not.

At the end of the day the FAA will make recommendations for manufacturing, quality control, and/or design tweaks to make the electrical system safer and more reliable.

2nd JAL 787 suffers another incident, NTSB releases 787 fire preliminary findings

Another eventful day for Boeing and the 787.  In a surreal twist from yesterday's events, another JAL 787 in Boston experienced a fuel leak mishap as it was taxiing to the departure runaway for the return flight to Tokyo.  According to news reports, the aircraft leaked about 40 gallons of fuel by the time it returned to the terminal.  Maintenance crews inspected the aircraft and JAL 007 then departed at around 4pm for Tokyo after a delay of 4 hours.

The aircraft from yesterday's incident (ZA183) is still in Boston as the NTSB assigned two more investigators to team looking into the event from yesterday.  The team said that the lithium ion battery fire did cause extensive damage in the battery pack area and the damage was confined to no more than 20 inches away from the source.  These batteries are used to start the APU.  Boeing in a separate statement that this incident is not related to the other electrical issues that the 787 has faced.

However, Jon Ostrower reported that United Airlines, while inspecting the lithium ion batteries in one of their 787s, found that the wiring to the batteries were incorrectly connected.  This does not mean that the same condition existed in ZA183 or caused the fire but it may it disturbing nonetheless and would be looked into as a possible cause of the fire by the NTSB.  The battery fire may be a design issue with the battery, a one off manufacturing flaw, or incorrect installation or maintenance of the battery among the many root causes that the investigators have to examine. Despite the two incidents in two days, 787s are still in use by customers around the world and Boeing flew ZA430 (LN 73, B-2728) flew a function check flight. Though Boeing is still working with Chinese regulators to certify the 787 for use by that country's airlines.  China Southern is still expecting it's first 787 in March though it is unknown if the fire will set back those plans.

Japan Airlines 787 suffers fire in aft electrical bay

The most recently delivered 787 to Japan Airlines (ZA183, L/N 84, JA829J delivered on Dec. 20, 2012) suffered a small but intense fire in the aircraft's aft electrical bay less than a half an hour after landing at Boston's Logan International Airport. The aircraft had its first flight on Dec. 7, 2012 and conducted 3 test flights after completing final assembly in Everett. The passengers and crew had already deplaned by the time a maintenance worker smelled smoke in the cabin. Mass port and Boston FD responded to the fire to find smoke in the bay and had the fire under control a short time later.

Initial reports indicate that a battery exploded but it unclear if that happened because of the fire or was the cause of the fire. The NTSB has dispatched a team of investigators to Boston to determine the cause. Reports also indicate that there was a minor injury to one firefighter. Jon Ostrower reports in the Wall Street Journal that the fire may have been exacerbated by damage to the LiON battery by a fire ax.

The aft electrical bay has been a source of problems for the 787 since a fire on ZA002 a little over two years ago forced an emergency landing in Laredo, Tx and set back deliveries by 6 months. In the last few months, there has been an increasing number of in service 787s experiencing electrical issues, some in the aft electrical bay. The airlines that have reported electrical issues include United, Air India, Qatar and LAN. Today's fire is by far the most serious of the problems. One cannot ascribe these issues to teething problems as it now seems that the problems may be far more serious than initially thought but hat determination must await the NTSB report.

It is unclear what affect this fire will have on production, testing and delivery of new 787s from Everett and Charleston though ZA512 for ANA did fly not 1 but 2 test flights today well after the fire had occurred. I do suspect Boeing will continue production and testing while the investigation is on going unless the FAA orders a grounding.

787 Looking Back and Looking Forward: Part 2, 2013 Look Ahead

Now that Boeing has put to bed a very successful 2012 which includes regaining the title as the top commercial aircraft producer (thanks in part to the 787 deliveries that exceeded forecast), what is in store for the Dreamliner program in 2013?

There are several milestones for the 787 program coming up in the year.  Among those are:

787-9/787-10
Assembly and 1st flight of the first 787-9.  Assembly should start around early June and I anticipate that aircraft will be out about 1 month later to begin gauntlet testing in the run up for first flight in late summer or early fall. I expect Boeing to have 3 airplanes flying the certification testing and will be refurbished and delivered to customers after the planned 6 month test flight program is concluded.  Boeing is still aiming for first delivery to Air New Zealand in mid 2014.

Launch of the 787-10 variant with significant orders from major Boeing customers which may include British Airways, Qatar Airways and others.

Production and Delivery
Boeing had executed extremely well on its plan to increase 787 production from 1.5/month to 5/month at the end of the year.  Boeing's plan for production in 2013 was laid out in a conference call to investors. The plan is for Boeing to maintain the current 5/month rate through the middle of 2013 (end of June, perhaps) at which point they will break rate and go to 7/month and finally break rate again in late 2013 to the final 10/month rate.

How many can Boeing build in 2013 and how many they can deliver are two different numbers.  There is a lag between the break in rate and when the first aircraft assembled at the new rate is delivered.  Thus it is a couple of months before the increase in production rate translates to an increase in the delivery rate. 

Production Forecast:
Thus for the production rate Boeing would see a build rate of 30 787s for the first 6 months of 2013 (5/month for 6 months), followed by a build rate of 35 787s for the following 5 months (7/month for 5 months). Followed by a build rate in December of 10/month. Therefore, this total indicates that Boeing is capable of assembling a total of 75 787s during 2013.

Delivery Forecast:
I am going to attempt to quantify Boeing deliveries for 2013 but I have to make certain assumptions:

1) Boeing will produce at a rate of 5/month through June, 2013 then break to 7/month starting in July, 2013 and maintain that through November 2013.  In December 2013 Boeing will move to 10/month.  This is based on currently available information.

2) I'm assuming that there would be 9 week lag between the break from 5/month to 7/month, therefore the first 787 to deliver at 7/month would be in September, 2013.  Even though there is a break in production rate in December to 10/month this rate won't translate to a 10/month delivery rate until 2014.

3) The numbers don't account for production of 787-9s for testing purposes.  I am only looking at deliveries of 787s to customers in 2013.

4) As a point of reference, the first 787 for Royal Brunei Airlines is expected to be delivered around September 1, 2013 according to the airline.  I am assuming that September will be the first month of 7 Dreamliner deliveries from the final assembly lines.

5) Since I don't have the firing order for L/N 131 and beyond I am assuming the following deliver rates for the remainder: 4 aircraft in September and 7 each in the last three months of 2013.  This is a total of 25.  L/N 128 to L/N 130 will assumed to be delivered in September as well for a total of 7 aircraft delivered in that month.

6) Boeing will deliver 12 787s that will undergo change incorporation but this number may grow to 15.  As of January 1, 2013, Boeing has 26 787s that are under going or will under go change incorporation in preparation for delivery to customers.  This includes the last three test 787-8 (L/N 4 to L/N 6 with the last one already well into the change incorporation cycle.

7) I am assuming that all 787s earmarked for the Chinese carriers thus far will be delivered in 2013 (deliveries to start in March). I am also assuming that L/N 6 and L/N 17 will deliver but the customers are unknown at this time.  L/N 17 was originally earmarked for Royal Air Maroc but will be delivered to another 787 customer instead.

Given these assumption let's break up the deliveries between aircraft coming straight off the final assembly line and those that still require re-work through the Everett Modification Center or in San Antonio.

I am projecting that Boeing can deliver 76 787s from all three final assembly lines during 2013. As a point of reference, the first 787 for Royal Brunei Airlines should enter final assembly around late July and deliver about 2 months later in very early September.  I am projecting that from September to December that the delivery rate will be 7/month.

For the rework airplanes, I am projecting 12 787s that are going through the EMC and San Antonio (ZA006) will be delivered in 2013 but Boeing may be able to squeeze 3 more (ZA230, ZA231, and ZA115) if the modification process becomes more efficient.  Boeing is now going to work on 787s that need more time at the EMC due to all the re-work that has to be performed. The tables below summarizes my projections:






Disclaimer
While I try to be as accurate as I can the projections are my opinion and actual delivery numbers more likely differ from my estimate.  There are unforseen issues that can crop upo similar to the issues that held up deliveries to Air India, Qatar Airways and the Chinese carriers.  Additionally, labor strife may once again become a hinderance to deliveries this year if the engineers of SPEEA go on strike.  Word is that a strike may be authorized in Februrary.  Boeing and SPEEA are to go back to the Federal Mediator on January 9th to try and come to an agreement.  If one isn't forth coming then the strike will severely slow down production of all Boeing jetliners as well as significantly slow down the testing and certification of the 787-9.  Boeing can make up some work by using managment engineers but it won't be enough to fill the void. The other issue is the need to manage the production rate increases carefully.  2012 showed that Boeign can do this but they were very measured in their approach last year.  In 2013 Boeing will be more aggresive with the 787 rate increase (two rate jumps from 5 to 7 and then from 7 to 10) and any issues can mean serious trouble not unlike the production snafus in the late 1990s.

Boeing ended 2012 on an excellent note by regaining it's former position as the top commercial aircraft producer (thanks to the 46 787 deliveries).  Boeing is poised to continue that dominance but there will be issues that Boeing will need to resolve if 2013 is to be more successful in 787 deliveries than 2012.  We'll see how it tuens out.

787 Looking Back and Looking Forward: Part 1, 2012 Year in Review

2012 787 Year in Review

2012 was a year highs and lows for the 787 program.  While Boeing executed very well on it plan to increase production and work through the back log of airplanes sitting around Everett waiting to be modified and delivered, the program was bedeviled by teething problems while in customer service. 

The Bad
These problems were magnified by the media spotlight that this airplane had to contend with since 2007.  Every new squawk that appeared was magnified by the media despite the benign nature of most of these issues.  The most notable was the diversion of a scheduled United 787 flight from Houston to Newark, NJ.  The aircraft landed in New Orleans without incident as the pilot noticed irregular indications on the cockpit displays related to the electrical system.  United stated that the issue was traced to a starter generator supplied by Hamilton Sundstrand.

The Good
Despite all this many customers reported that they were very happy with the performance of the aircraft.  Air India was able to turn a money losing route (Delhi to Frankfurt) into a profitable one. ANA itself reported that the aircraft was more fuel efficient than they had expected.  As Boeing works out the excess weight of the aircraft in subsequent block numbers and GE & Rolls Royce brings their respective engines closer to promised fuel burn specs the 787-8 will only get better.

During 2012 Boeing had delivered 46 787s to 8 different customers.  7 of these customers received their first 787s this year.  The airlines that Boeing delivered these aircraft to represented every continent on the world except Antarctica (still waiting for Penguin Air to order, I guess).  Of the 46 airplanes delivered, 31 airplanes had to under go some amount of change incorporation through the Everett Modification Center while 15 were delivered straight from the the final assembly lines at Everett and Charleston. Over all Boeing has delivered 49 787s since deliveries began in September 2011.

I was expecting Boeing to deliver 50 787s this year and they fell short of this number quite narrowly by 4 airframes.  This is attributable to the failure of the Chinese and Air India to take delivery of 787s that are ready for service.

On the 787-9 development front, Boeing, at last report, had completed over 90% of the detailed engineering design work for this variant of the aircraft (this was accomplished back in September, 2012) and work started on the first major fuselage assemblies in the last couple of months.  Boeing is reporting that the aircraft is meeting weight expectations and does expect that they will deliver and aircraft that will come in well under the contractual weight made to customers.

Boeing has seemed to have executed well on its plan for 2012.  They had estimated that they would deliver between 35 and 43 787s in the year and they exceeded that delivery plan. 2013 will be a crucial year in terms of the production and delivery ramp up as well as the start of testing on Boeing newest 787 variant. However there are looming problems that can derail those plans in a significant way. These will be explored in the 787 2013 year look ahead.

Boeing delivers 6 787s in one day, exceed their 2012 high end estimate

Boeing gave a Christmas gift (an early one at that) to its shareholders by delivering 6 787s to 6 current operators of the aircraft.  Boeing delviered one each to ANA, Air India, Japan Airlines, LOT Polish Airlines, Qatar Airways and United Airlines. 

So far only one has flown away (Air India from Charleston) but the other 5 should leave over the next couple of days.  The following aircraft were delivered today:

ANA - ZA510 (LN 59, JA817A)
Air India - ZA239 (LN 60, VT-ANK)
Japan Airlines - ZA183 (LN 84, JA829J)
LOT Polish Airlines - ZA271 (LN 78, SP-LRB)
Qatar Airways - ZA462 (LN 62, A7-BCK)
United Airlines - ZA287 (LN 52, N27903)

To date Boeing has delivered 46 787s overall, 43 in 2012 and 8 in December, 2012.  They may not be done as there is a possiblity they can deliver 1 or 2 more this month but more test flights would have to carried out by both Boeing and customer pilots of Air India would have to be prepared to accept one or even two more 787s that are waiting for them in Charleston.

787 production update

As we approach the Holiday week, Boeing will be going into a slow down mode as is the custom around this time of the year.  There have been moves of late which I'll highlight here.

Boeing has moved out ZA274 (LN 88, SP-LRE) for LOT and ZA184 (LN 89, JA830J) for Japan Airlines.  They moved ZA513 (LN97, JA819A) for ANA into the body-wing join in 40-24 to start final assembly.  This is the last aircraft that will start final assembly in 2012. I expect it to be delivered sometime around middle to late February 2013.

Boeing also moved ZA232 (LN 28, VT-ANC) to the EMC to begin the change incorporation process for this airframe prior to delivery to Air India sometime next year.

I have also updated the tables to reflect the firing order for airplanes 116 to 130. The highlight of this list is ZB001 (LN126) which is the first 787-9 to go into final assembly.

There are a couple of things that caught my attention when I saw the list.  Boeing is assembling this aircraft on the 40-24 surge line and not on the main assembly line in 40-26.  Second, Boeing has diverted the final assembly of the 787-8s from 40-24 and is concentrating the production of customer aircraft in 40-26 and 88-03 in Charleston.  This is obviously in case they run into issues during final assembly of the first 787-9 that there aren't any bottlenecks in 787-8 production.  They are leaving themselves enough margin, it seems, to address issues with assembling the 787-9.  There will be a 3 airframe margin in front of the ZB001 and at least a 4 frame margin behind the aircraft as it makes it way through the final assembly stations in 40-24.

I don't have any information on follow on 787-9 frames just as yet but Boeing is believed to be planning for a 3 aircraft test fleet for the 787-9 with the test program lasting about 6 months.  I roughly estimate that ZB001 should enter the final assembly building around June 13, 2013.  Boeing has said the aircraft will start final assembly during the summer.  Since this is a brand new variant, I am assuming at least 6 weeks for final assembly and another 6 weeks for ground testing before first flight.  This would mean that this airplane can be flying around the middle of September, 2013.

On the firing order nothing stands out though we do get to see the first 787 for JetStar going through final assembly as well as the first 2 787s for Royal Brunei Airlines.  The Royal Brunei Order is listed as unidentified on Boeing's Order and Delivery website but they did order  787-8s with Trent-100 engines.  The airlines says that they are expecting to take delivery of the 1st 787 in early September 2013. This list as it stands now would cover deliveries through early September, 2013.

787 testing picking up as deliveries continue

787 flight activity picked up this week as the weather cleared long enough for Boeing to send up another 787 on its 1st flight.  Yesterday There were 4 787 flights including the B-1 flight for ZA285 (LN 45, N27901) for United Airlines.  There was supposed to be another test flight of ZA238 (LN 54, VT-ANJ but it didn't occur.

As Boeing aggressively ramps up flight tests this month deliveries are also starting to take shape. This evening, Boeing delivered United's 4th 787 (ZA289, LN 55, N45905).  According to a press report by Bloomberg, Qatar is expecting to take delivery of two 787s on Dec.19th. I also expect Boeing to further deliveries of 787s to ANA (2), United (1)and JAL (1).  Wild card deliveries can be made to Air India (2) and possibly China Southern (that airplane still has to make its 2nd test flight).

Now all this continues despite the recent spat of glitches that the 787 has experienced.  The most notable one is the issue with the starter generator supplied by Hamilton Sundstrand.  A second 787, ZA460 (LN 57, A7-BCA) experienced the fault and landed while being delivered to Doha from Victorville.  The generator is being swapped out and the aircraft should enter service soon but the issue is troubling.  Akbar (U-Turn Al) Al-Baker again vociferously complained about the teething problems of the 787 to the media (after the first revenue flight of Qatar's 787 to London) but Qatar is still planning to take delivery of 2 787 next week.  Still Boeing along with Hamilton Sundstrand and the FAA are looking into the issues.  Jon Ostrower of the Wall Street Journal reported that 2 other 787s are affected...one other delivered 787 that belongs to United and an undelivered 787 for Qatar (one of the two that are to be delivered next week). The FAA said the issue doesn't appear to be safety of flight issue and aside for Air India reporting unspecified "electrical problems" no other 787 customers have come forth with electrical probles as of late.  Dominic Gates of the Seattle Times also has an article on the 787 electrical issue.

On the production front, expect things to slow down as Boeing enters its traditional Holiday break.  One aircraft (ZA513, LN 97, JA819A) for ANA will be loaded into the final assembly line and that will be the last until after New Year.

As of today, Boeing has delviered a total of 40 787 to 8 customers worldwide.  They've delivered 37 in 2012 and have to potential to deliver anywhere from 6 to 8 more airplanes this month.

Charleston still building 787s but not rolling them out

With Boeing's North Charleston plant building a 787 once every month, there is an expectation that we would be seeing more airplanes on the ramp at Charleston.  However it has been more than a month since Boeing rolled out an airplane from building 88-03.

The planes being worked on (currently) at this plant are earmarked for Air India and two of the three Chinese customers (Hainan and China Southern).  Given the issues surrounding these customers, it is not anticipated that deliveries will be made anytime soon or if they are delivered, it would be a glacially slow pace.  787 assembly at Charleston is completed in four position, just like the 787 line in Everett. It is my belief that Boeing is going to take its time rolling these airplanes out of the Charleston factory and will use the extra positions within the assembly hall to store a couple of airplanes. There are 8 flightline spots at Charleston so there isn't a lack of room.  The only reason to keep them inside to to ensure all assembly tasks are completed and to protect the airplanes from the elements.

I've listed LN 76 as stored but its location is inside building 88-03 in Charleston.

Projected 787 Delivery Dates for December; AMR in a position to finalize their 787-9 order?

With many of the 787s that are in pre-delivery having gone through their first (B-1) flights. I am going to take a moment and speculate on delivery dates for these airplanes.  These are my own assumptions assuming that these aircraft will have to fly the minimal number of acceptance flights.  For now I'm assuming that these planes will deliver between 21 and 24 days after each B-1 flight though there are exceptions (as in Air India, Chinese carriers, and LOT).  This also assumes that there aren't any issues that would need to be corrected and re-tested in subsequent test flights prior to delivery.

Here's my projected delivery dates for this month:

ZA289 (LN 55, N45905) United Airlines - 12/12/12 - 12/15/12
ZA462 (LN 62, A7-BCK) Qatar Airways - 12/15/12 - 12/18/12
ZA464 (LN 82, A7-BCC) Qatar Airways - 12/24/12 - 12/27/12
ZA510 (LN 59, JA817A) ANA - 12/26/12 - 12/29/12
ZA512 (LN 83, JA818A) ANA - 12/27/12 - 12/30/12
ZA287 (LN 52, N27903) United Airlines - 12/28/12 - 12/31/12
ZA183 (LN 84, JA829J) JAL - 12/28/12 - 12/31/12

Again this is my own speculation but it's based on previous and recent deliveries of the 787.  These dates are always in flux and can change easily so I trust the reader will not hold me responsible if all the actual delivery dates turn out to be something totally different. 

Lastly, these numbers could change as Boeing can deliver 787s to Air India (2), China Southern (1) and even LOT Polish (1).  Boeing is making a huge effort to try and delivery these aircraft within the next 24 days and the way we can accurately tell is the flight activity of each of these airplanes over the next 2-3 weeks.

Lastly, the pilots union at American Airlines has ratified the new labor agreement with AMR today. This could be significant for 787-9 order that AA intends to finalize with Boeing as the order is dependent on AMR agreeing to a new contract with their pilots.  Now this was all before AMR entered Chapter 11 so the bankruptcy judge and AMR's creditors may have something to say about this order and whether it can proceed.  Additionally, a report emerged this evening that US Airways had submitted a bid for American in November.  What effect an AMR-US Airways merger would have on the MoU for the 42 787-9 American intends to finalize is unclear though US Airways does have an outstanding order for 18 A350-800 and 4 A350-900 by Airbus.  Boeing can deliver the 787-9 to American starting in 2014 (theoretically) which is much earlier than US Airways can get either variant of the A350 that they have ordered.  Also a combined company may be opened to operating a mixed Boeing-Airbus fleet as with Delta/Northwest and United/Continental.  A US Airways/American tie up would retain the American name.

Boeing conducts 6 new 787 first flights in one week.

UPDATE (6:38PM): Looks like Boeing has delivered LAN's 3rd 787 today.  Flightware shows a 787 delivery flight leaving Everett at 5:10PM local time for Santiago, Chile.

Boeing is quickening the pace of flying production 787s on their first flight.  Starting on Dec. 1, Boeing has sent up 6 different 787s for their first flight, otherwise known as the B-1 flight.  It appears that Boeing is aggressively trying to ramp up deliveries of these airplanes before the end of the year.  In addition to these 6 airplanes making their first flight, several others have had follow on test flights either by Boeing or customer pilots on several other 787s.

The planes that flew were as follows:

12/1/12
ZA271 (LN 78, SP-LRB) for LOT Polish Airlines

12/3/12
ZA464 (LN 82, A7-BCC) for Qatar Airways

12/4/12
ZA510 (LN 59, JA817J) for ANA

12/6/12
ZA512 (LN 83, JA818A) for ANA

12/7/12
ZA287 (LN 52, N27903) for United Airlines
ZA183 (LN 84, JA829J) for Japan Airlines

Obviously not all of these will be delivered this month, most notably ZA271 but I do still believe Boeing can deliver 8 787s this month possibly going to 10 if Air India sorts out its financial mess.

Given this pace, I can see Boeing delivering a couple airplanes next week but the bulk of deliveries should come around the week of December 17th.  The plan would be for Boeing to fly more test flights next week in preparation for delivery the following week (week of Dec. 17th). Boeing will be mostly closed during the week of Christmas but not fully shut down so we can certainly still see a couple of deliveries during the week of Dec. 24th depending on customer availability and needs.

I have made changes to the notes of some of the airplanes in the table.  Notably I am tracking the number of tests flights that each airplane takes during pre-delivery. After delivery I note which order it was delivered to that particular customer (i.e. ANA #1 meaning the first airplane delivered to ANA, etc.).

787 flight activity picking up. Is Boeing preparing to give a big Xmas present?

Boeing may be getting set to give AvGeeks and their shareholders a big Xmas gift in the form of several 787 deliveries before the end of the year.

There has a been a noticeable uptick in 787 flight activity both at Everett and Charleston since the first of the month. In the first four days of December, Boeing has conducted 3 B-1 flights on ZA271 (LN 78, SP-LRB), ZA464 (LN 82, A7-BCC) and ZA510 (LN 59, JA817A).  These three aircraft are for LOT Polish Airlines, Qatar Airways and ANA respectively. 

In addition to these first flights, Boeing has conducted a few follow on test flights of other 787s including two in Charleston.  Both ZA239 (LN 60, VT-ANK) and ZA240 (LN 65, VT-ANL) have flown out of Charleston in recent days. These aircraft were to have been delivered earlier in the fall but on going financing issues at Air India have prevented the carrier from taking delivery.  The fact that these two aircraft have flown on back-to-back days may raise the possibility that Air India has some how arranged the bridge financing needed to take delivery but this speculation is tempered by Air India complaining that their 787s are experiencing "electrical issues" and will not take anymore deliveries of 78s until these "issues" are corrected with a permanent fix.  Interestingly, none of the other 7 Dreamliner customers have reported (at least publicly) of any electrical issues with airplanes with the exception of yesterday's problem with United.

There are currently 7 787s that are in flight tests with another 6 that are making preparations for their B-1 flights.  Of the 6 preparing for 1st flight, I believe that 4 will eventually fly this month and fly fairly soon. There are 3 aircraft (all for Air India) that are ready for delivery but again it depends on the issues at Air India. Thus Boeing has the potential to deliver 14 though we know that they won't deliver that many.  For one thing Boeing hasn't conducted very many post B-1 test flights on these airplanes and some of the customers themselves may not be ready to take delivery by the end of the month.  Here's whom I believe will be able to take delivery this month:

ANA (2), Qatar Airways (2), United Airlines (2), LAN (1), Japan Airlines (1), Air India (2, maybe).

This is 8 (possibly going to 10) that can be delivered by the end of the month.  Since Boeing has taken the majority of these frames on a B-1 flight very early in the month, it leaves them enough time, prior to Boeing's Christmas break, to conduct further test flights and prepare the aircraft for delivery.

United had an incident with their third (and most recently delivered) 787.  This aircraft is N26902 which was delivered on Nov. 20th.  Thankfully, there wasn't any evidence fire or electrical arcing in the aft electrical bay of the 787 that made the emergency landing at New Orleans but preliminary reports say that one of the 6 starter generators on the aircraft failed.  The suspect part is being replaced and will be tested before the aircraft is placed back into service very soon. I believe the generators are made by Hamilton Sundstrand.

Is Boeing-SPEEA contract talks slowing down 787 work?

Boeing and SPEEA are in the midst of trying to negotiate a new contract with Boeing just yesterday saying that they will seek federal mediation in the contract negotiations.  However in recent weeks it has become very noticeable that the 787s that are on the flightline aren't flying that much despite many of these airplanes being outside for weeks and many that should have taken their B-1 flights have not made their first flight.

SPEEA has encouraged its members to take workplace actions such as slow downs and rejection of voluntary overtime.  These workplace actions may be the reason why there has been a drop off in flight and ground testing activity on the deliverable 787s at Everett.  I count at least 6 aircraft that haven't had any recent flight activity or has been out on the flightline for some time but have yet to take a first flight (this includes one aircraft in the paint hangar as of this morning). Boeing engineers are needed not just for design and production of the aircraft but are also for the pre-delivery ground and flight testing to resolve issues prior to delivery to the customer.

These workplace actions won't be enough to stop production and delivery but can significantly slow the delivery process down.  SPEEA members hasn't taken a vote, yet, on whether to authorize a strike but with the current contract expired and the negotiations deadlocked, it may not be too long before that happens.  If and when that happens then it is up to the leadership at SPEEA to call a strike and then all bet are off and production at Boeing's commercial aircraft plants will drastically slow down. 

In the event of a strike by SPEEA, Boeing will probably turn to management engineers to fill the void but that will probably still won't be enough. IAM751 has a current contract with Boeing but I'm not sure if they would honor a picket line by SPEEA or not.  As mentioned earlier, Boeing is asking for federal mediation in the contract talks so we'll have to see how that plays out.

Possible breakthrough between China and Boeing over 787s?

This afternoon Everett photographer, Matt Cawby, tweeted that ZA382 (LN 43, B-2727) has been moved from the South Ramp storage area to the Everett Fuel Dock.  I'm going out on a limb in saying that this may be an indication that the issues between CAAC and Boeing may have been resolved to allow delivery of 787s to the 3 Chinese carriers that have them on order (Air China, China Southern Airlines, and Hainan Airlines).

This particular aircraft has made only one flight in late October and has since been put into storage.  One other 787 for Hainan flew 4 times before being stored on the South Ramp but it has not been moved yet.

I cannot offer any other reason for the move other than either 1) preparations for delivery to the customer 2) Preparing the aircraft to be flown to a long term storage facility in the US Southwest (i.e. Arizona or Southern California desert storage) or 3) Boeing carrying out some maintenance or assembly tasks that need to be done.

Still it has raised eyebrows and I'll try to ascertain why the aircraft is at the fuel dock.

Updated 787 firing order - through 1st quarter 2013

First center wingbox section for ZA450 (LN 108) for British Airways

Photo Courtesy of Saj Ahmad (http://www.strategicaeroresearch.com/) and British Airways

787s for British Airways and Norwegian Air Shuttle (leased through ILFC) will begin final assembly in the 1st quarter of 2013 are the highlights of the firing order of the 1st quarter of 2013.

The customer list for LN 101 to LN 115 are: ANA, British Airways, China Southern Airlines, Japan Airlines, ILFC (Aeromexico), ILFC (Norwegian Air Shuttle), LAN, Qatar Airways, Thomson Airways.

LN 115 should enter the final assembly system by the end of March, 2013.  Here are the airlines and their allocations of 787s from this batch of 15 aircraft.

ANA (3)

ZA120 (LN 101)
ZA514 (LN 107)
ZA121 (LN 110)

British Airways (3)

ZA450 (LN 108)
ZA451 (LN 111)
ZA452 (LN 114)

China Southern Airlines (1)

ZA386 (LN 104)*

Japan Airlines (1)

ZA186 (LN 105)

ILFC/Aeromexico (1)

ZA561 (LN 115)

ILFC/Norwegian Air Shuttle (2)

ZA576 (LN 102)
ZA577 (LN 112)

LAN (1)

ZA539 (LN 113)*

Qatar Airways (2)

ZA466 (LN 103)
ZA467 (LN 109)*

TUI Travel PLC/Thomson Airways (1)

ZA320 (LN 106)

*These airplanes will be assembled in Charleston.

Again it seems that Boeing is allocating 4 787s (two for each line) to Everett and one for Charleston.  Everett is at 4 per month while Charleston is at 1 per month.  In mid 2013 the rate is to go up to 7/month though I am not sure if the two additional aircraft per month will be split evenly between Everett and Charleston.  Please see my table for complete information.

Boeing Execs Update on the 787 program through RBC Conference Call

Larry Loftis, VP and General Manager, 787 program and Pat Shanahan, Senior VP and general manager, Airplane Programs at Boeing were hosted on an investor conference call presented by RBC this afternoon.

Here's a synopsis of their comments and what was said on the call:

To date Boeing has delivered 38 787s overall and 35 in 2012 to 8 different customers. Boeing customers have told the company that the aircraft is meeting fuel burn expectations and passengers are also delivering great feedback in terms of comfort of the aircraft.

Started the year at 2.5/month production rate and will end the year at the current rate of 5/month. Boeing is tracking to plan to increase production to 10/month by the end of 2013. 

The next rate increase is to 7/month which is expected in mid 2013, whereupon it will stabilize at that rate before increasing to 10/month.

Boeing is well past the 90% engineering release milestone on the 787-9 and that was completed about 3-4 weeks ahead of schedule. The supply chain is largely the same as the 787-8 but have bought some work back in house. Schedule – the airplane is meeting all engineering milestones.  It is on original schedules with some suppliers ahead of schedule. The major components are currently being assembled by the major (tier 1) suppliers while wing assembly will start later this year into the very early part of 2013.  Boeing will introducing the 787-9 in to final assembly in late spring – late summer of 2013 and flight test in fall 2013 with EIS in early 2014. There will be 3 flight test aircraft with all three currently in production. the wing spars are currently being built at MHI (Mitsubishi Heavy Industries). There is a buffer in the schedule but it is looking like they won’t need it. The 787-9 weight has been stable and has improved by a couple hundred pounds. Boeing is planning for  6 months for flight test, but has been doing flight testing on the 787-8 to gather data to support the 787-9.  We now know why Boeing has been flying ZA005 lately. There is extra flow in the production system that has been allotted to the 787-9 in case there are issues during assembly of that aircraft.
 
Boeing has 3 final assembly lines going for the 787 and allows them a greater degree of flexibility to manage the ramp up of the 787 while introducing the 787-9 into the system.  The current plan is to continue to have the production split between Everett and Charleston at 70%/30%.  Boeing has been very pleased with the improvements in the production system over the last 12 months. The quality of the work and processes improve everyday, and the learning curve is tracking to their expectations. The curve at Charleston has been very good (for a new site, makes your wonder if Boeing had better expectations). Boeing has transferred best practices at Everett to Charleston and information is flowing back and forth very freely.  Boeing's intents is to make sure they have one standard set of best practices for both sites (one production system for 2 sites). 

Boeing has the ability to go beyond the 10/month production rate. The ability to go beyond 10/month will be determined by the market.  There's no constraint on bricks and mortar aspect of increasing the rate. Boeing has an understanding of the capabilities of the suppliers as well as their own capabilities.  The question will be the capacity of the suppliers and the rate to adding capacity.

By the end of the year, Boeing will have 60% of pre-LN 66 airplanes delivered. The remaining aircraft that are awaiting change incorporation will be delivered during 2013 to 2015 (Boeing currently has 23 aircraft undergoing change incorporation or awaiting change incorporation including 3 test airplanes).  The ones that remain are the lower line number and will take longer to complete as the extent of the changes  needed are extensive. There are firm homes for the majority of the planes that have yet to go through change incorporation. there are a couple that still need to find a customer (I'm guessing that these are ZA004 and ZA005).

With regards to delays, Boeing says that there  aren't any systemic delays (which would take weeks or months to resolve) in the production system but one off delays amounting  to a few days delivery of the 787 to customers because they are still learning.  Boeing would not comment on delays to specific customers or countries (China).

On the 787-10, Boeing is not ready to launch yet as they still have some work to do before they are ready to launch the program.  (Note they have said anything about Authority to Offer, ATO). Technically they are confident of the 787-10; operationally and financially they are trying to be more measured with their plans for the aircraft.  They are expecting an EIS at the back end of this decade (2017-2019 timeframe?).  It depends on when Boeing has finished the work they are engaged in with regards to the 787-10.  Boeing expects substitutions between the family of 787 models (go up or down within the different 787 models).

Boeing meets low end 787 delivery target for 2012 deliveries

At the beginning of the year, Boeing laid out its 2012 787/747 target estimate at between 70 and 85 aircraft with the split at 50/50 between the two aircraft.  This meant that Boeing was planning to deliver between 35 and 42 787s this year. Through out the year Boeing maintained that target and on November 20th, Boeing delivered two 787, one each to Qatar Airways and United Airlines, which allowed them to reach 35 787s delivered in 2012, the lower end of their estimate.  This accomplishment reinforces the belief that the 787 production system has recovered and places the company in an excellent position to continue the climb to 10/month on 787 production rate. Word has it that Boeing is asking suppliers about going beyond 10/month and push output to 14/month by late in the decade (around 2018-2019).  It still in the planning phase but this is probably great news for the program overall especially since Boeing is on the verge of a full launch of the 787-10.

Boeing certainly can reach the upper end of their estimate (another 7) with the 787s that are on the flightline preparing for first flight.  ZA289 (LN 55, N45905) for United Airlines made it's first flight on November 21st and I expect ZA462 (LN 62, A7-BCK) to fly around Nov. 23rd and both should deliver next month.  Two other 787s have had engine runs according to Matt Cawby on his photo blog. Both ZA285 (LN 45) and ZA510 (LN 59, JA817A) should fly by the first week of December if not by the end of November.  That is four 787s that I expect to deliver in December in addition to ZA538 (LN 80, CC-BCC) for LAN.

Here are the potential deliveries through Dec. 31st:

ZA285 (LN 45, N26901) - United Airlines
ZA286 (LN 50, N26902) - United Airlines

ZA238 (LN 54, VT-ANJ) - Air India*

ZA289 (LN 55, N45905) - United Airlines

ZA510 (LN 59, JA817A) - ANA

ZA239 (LN 60, VT-ANK) - Air India*

ZA462 (LN 62, A7-BCK) - Qatar Airways

ZA240 (LN 65, VT-ANL) - Air India*

ZA271 (LN 78, SP-LRB) - LOT Polish Airlines**

ZA538 (LN 80, CC-BBC) - LAN Airlines

ZA464 (LN 82, A7-BCC) - Qatar Airways

ZA512 (LN 83, JA818A) - ANA

ZA183 (LN 84, JA829J) - Japan Airlines

*Dependent on Air India obtaining bridge financing to pay for the aircraft

**Supposed to have delivery flight to Poland in early January but may contractually deliver in December

Of these listed 8 I believe are highly probable deliveries  but that does not include any for Air India or the aircraft for LOT Polish Airlines. It is rumored that Air India will take delivery of a 787 by the end of November but that is all dependent on the carriers' finances.