Tuesday, September 16, 2014

Mexican Air Force to take delivery of test 787 at the end of September

As previously reported here on All Things 787, the Mexican Air Force had purchased ZA006 for use as a government transport.  when delivered it will mark the first 787 to be purchased by a government armed services.

Currently the aircraft is in New Iberia, LA. where it is probably getting a paint job and having some other work performed on it in preparation to convert it into a government transport.It is scheduled to fly to Charleston on September 22nd where it will be in stall A4 for a few days.  It will then transfer over to the delivery center at Charleston on the 25th of September and will be there until it flies away around September 28th.  It's been reported that Mexico paid $127mm for the aircraft which performed flight testing duties with the GEnX-1B engines.

Spotters at CHS, please be on the look out for this aircraft.  I'm sure a lot of people would like to see what kind of livery it will have.

Thursday, September 4, 2014

787 Report - August, 2014 Month End

With four months left in the year, Boeing is making a push to meet its 2014 787 delivery guidance.  Through the end of August, Boeing has delivered 69 787s in 2014.

Deliveries totaled 13 for August. but Boeing only rolled out only 8 787s to the flightlines in Everett and North Charleston.  That puts the 787 production efficiency at 0.62 (the 787 production efficiency is arrived at by dividing the number of 787s rolled out by the number of 787s delivered during the month).  Overall efficiency in 2014 is 1.27 which indicates that Boeing is rolling out more 787s in 2014 then they are delivering. Notable deliveries included the first 787-8 to Xiamen Airlines, Royal Jordanian and the last -8 to British Airways.

Boeing has delivered 183 787s through the end of August since deliveries began 3 years ago and it does look like they will break 200 deliveries in early October.  It is unknown who the lucky customer is that will take delivery of the 200th 787.

Production was slow in August as Boeing is starting the process of transitioning the 40-24 production over to 40-26.  However, sources have also told me that they are still dealing with some traveled work which is causing the completion of work either at the EMC or on the flightline.  With four months remaining, Boeing needs to deliver at least 10 787s a month if they are to meet their guidance of 110 deliveries in 2014. Internally Boeing hopes it can exceed that number and try to deliver about 120 787s including at least 2 early build 787s to customers this year.

In terms of production in September, it looks as if Boeing will start final assembly on 9 Dreamliners in this month.  These will include some of the last 787s that will be delivered in 2014.  The time it takes Everett to build, test and deliver a 787 is about 100 to 120 days.  It takes Charleston about 110 to 120 to do the same.  If this trends holds up then Boeing will be hard pressed to deliver 110 787s this year.  Clearly traveled work has to trend down and both assembly lines need to get more efficient if they are to hit the target.  Clearly taking 4 months to build and deliver a 787 is not going to cut it

Looking ahead to September deliveries, it appears that Boeing will try to finish the 3rd quarter with a bang similar to what they did in June.  That month they delivered 15 787s.  They could deliver anywhere from 13 to 15 787s depending on how flight testing progresses.  Deliveries in September should include the 1st 787-9 to Virgin Atlantic Airways and the first 787-8 delivered to Avianca.  I expect 3 787-9s to be delivered including one each to ANA and Air New Zealand.  Ethiopian should take delivery of its 10 787-8 from their direct order of 10 Dreamliners from Boeing.  This will not be Ethiopian's last 787 though as they will be taking several more on lease from AerCap.

While Boeing has been delivering aircraft at a very good pace there is still clouds that hang over the program.  Last month, there were two cancellations for the 787 totaling 9 aircraft.  It is widely believed that the first one is Lion Air (Batik Air) which had ordered 5 787s.  The second one is Transaero which announced that they had cancelled their order for 4 aircraft.

Boeing's Press Release on delivering United's 1st 787-9:
Delivery of UA's 1st 787-9. Photo Courtesy of the Boeing Co.

Boeing Delivers First North American 787-9 Dreamliner to United Airlines

787-9 joins 11 787-8s already in United's fleet

SEATTLE, Sept. 4, 2014 /PRNewswire/ -- Boeing (NYSE:BA) and United Airlines are celebrating the delivery of the airline's first 787-9 Dreamliner. United will become the first airline in North America to operate both the 787-8 and 787-9 variants of the Dreamliner family when the airline launches 787-9 service later this month. 
"We're proud that United has become the North America launch customer for both the 787-8 and 787-9, marking another important milestone in the successful history of Boeing and United working together," said Brad McMullen, vice president of North America Sales, Boeing Commercial Airplanes. 

Earlier this year, United announced it will fly the airplane on what will become the longest 787 route -- nonstop service between Los Angeles and Melbourne, Australia. 

The 787-9 complements and extends the 787 family. With the fuselage stretched by 20 feet (6 meters) over the 787-8, the 787-9 will 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 similarly sized airplanes. The airplane leverages the visionary design of the 787-8, offering passenger-pleasing features such as large windows, large stow bins, modern LED lighting, higher humidity, a lower cabin altitude, cleaner air and a smoother ride.

United operates 11 787 Dreamliners with an additional 54 on order, including the 787-10.

787 Full Production Table

Friday, August 22, 2014

GE powered 787-9 receives Amended Type Certificate clearing way for first delivery next week.

The FAA granted Boeing the amended type certificate for the GE powered version of the 787-9 clearing the way for deliveries to begin later next week with the first aircraft going to United Airlines.  That delivery should occur in the middle to late next week.

Boeing is slowly ramping up 787-9 production this year and is on track to deliver 10 to 12 this year though I'm in favor of the higher number.  The airplanes that are coming off the production line still have to go through some change incorporation at the EMC but I believe this should start to tail off by the middle of the fourth quarter (November).  2015 might prove to be a big year for deliveries of the larger 787 model.  I believe that Boeing can deliver around 50 to 55 787-9 which would be almost 50% of their 2015 deliveries.  If they are able to accomplish that coupled with a successful drive to reduce production and assembly costs, then the 787-9 can be extremely profitable for Boeing in 2015.

It could also help if Boeing can convert more customers from the 787-8 to either the 787-9 and/or the 787-10.  Already some airlines are getting out the 787-8 like Air Berlin which still has to confirm their conversion from the -8 to the -9.  This can only help the overall profitability of the 787 program in the long run.  Yesterday, Boeing showed a cancellation of 5 787s from it's weekly order report.  Speculation immediately fell on Lion Air/Batik as the source as they have been talking about converting that order into 10 737s.  There was also an unidentified order for 10 737s posted along with the cancellation thus Lion Air does seem to be the logical choice.

Thus far in August, Boeing has delivered 8 787s but I do expect 5 more to be delivered in the next 9 days. I'll give a fuller report at the end of the month along with a preview of September's deliveries around Labor Day.
787 Full Production Table

Tuesday, August 19, 2014

787 Update - August 19, 2014

787 deliveries picked up the first two and half weeks into August with 7 deliveries thus far including British Airways 8th and final 787-8.  They are second customer to have its 787-8 completely fulfilled this year (China Southern being the other).  In the next 12 days I do see Boeing delivering 7 more Dreamliners between the 20th and the 31st.  Currently they have delivered 177 787 since deliveries began, 63 this year, 15 thus far in the quarter and 7 so far this month.

The upcoming deliveries would include United's first 787-9 though Boeing is still waiting for the final FAA Type Certification for the GE powered aircraft.  We should also see the first deliveries to Royal Jordanian and Xiamen this month when they take 1 787-8 each.  Deliveries should also be made to Qatar, Jetstar (QANTAS), Kenya Airways and ANA.

For September, Boeing is looking to end the 3rd quarter 787s delivery on a bang with about 18 (maybe 19) deliveries.  The preliminary plan is for Boeing to deliver up to 4 787-9s including the first to Virgin Atlantic as well as one more each to ANA, Air New Zealand and United.  Also we can see the 10th and final delivery to Ethiopian of their order of 10 787-8s though they are going to be taking more on lease from AerCap. Both Avianca and CIT Leasing will take ownership of their 1st 787s.  In the case of CIT, these aircraft are being leased to Royal Jordanian.

While deliveries look promising this month, Boeing will start final assembly on only 7 787s this month.  It appears that there will be delay in the start of final assembly of LN 240 and LN 241 while Boeing South Carolina will continue producing at 3/month.  The word I've heard is that this to allow the start of transitioning of work from the surge line in 40-24 to 40-26 and the eventual shut down (in 2016) of the 787 surge line in 40-24.  Right now the surge is producing 3 787s while the main line is producing 4.  It'll be interesting to see how Boeing handles the transition over the next couple of years.

In September, Boeing should start final assembly on aircraft destined for American Airlines (2), Scoot and Royal Air Maroc.  If they are to deliver 26 airplanes by the end of September then Boeing can potentially have 203 total deliveries, 89 this year, and 41 in the third quarter.  They will have to put the pedal to the metal in terms of production flight testing however.  The next couple of leading up to the Labor Day holiday will probably be very slow as people go on vacation but come September 2nd the pace should quick substantially.  If they are able to deliver a substantial number of 787 in the next month and half then Boeing could potentially deliver closer to 120 787s this year.  Please note that there are a lot that can happen that would cause this estimation to go out the window but it does appear that Boeing is on a good track to deliver the delivery guidance.

787 Full Production Table

Saturday, August 9, 2014

ZA006 flying again

ZA006, one of the 6 787-8 that was part of the test flight program appears to be flying according to both Flightaware and Flightradar24.  The aircraft has been at Lackland Air Force Base for about 2 years first being stored and then undergoing change incorporation and refurbishment in preparation to delivery to the Mexican Air Force for use as a VIP transport.  There's no word on delivery though it is thought that it will be delivered towards the end of the year.  Right now it appears the aircraft is doing engineering flights to verify and test the aircraft after the refurbishment.

Friday, August 8, 2014

787 update - August 8, 2014

787 Deliveries in July
Boeing had a so-so delivery month in July with deliveries of only 8 Dreamliners.  They could have done better but I do think they are set up to deliver upwards of 15 787s in August.  July deliveries included ANA's first 787-9 which they are planning to press into service in early august n domestic routes in Japan.  In terms of production efficiency, Boeing delivered 8 aircraft rolled out 11 787s from all assembly lines.  That translates to an efficiency rating of 1.38 (11 rollouts/8 deliveries).  The lower the number the more efficient the program.  The Charleston plant delivered 3 and rolled out 3 for an efficiency of 1 while Everett delivered 5 aircraft and rolled out 8 giving it a an efficiency of 1.6.  Currently it does appear that Charleston is producing more efficiently given this metric but it doesn't take into account unforeseen circumstances that would not be in the control of Boeing or at either plant (i.e. customer difficulties, etc.). Eight days into August and thus far there have been 3 deliveries.  There has also been a noticeable pick up in flight testing tempo.  I do project that in addition to the 3 already delivered in August, Boeing can deliver 12 more of which 10 have flown and 2 more are awaiting their B-1 flights.

787 Production
The production pace at both plants continue as before with several more -9 entering final assembly in Everett.  Boeing is gradually shifting Everett 787 production from 40-24 where the surge line is located to 40-26 which is the main production line to a point where the surge line will shut down in 2016.  This will allow 40-24 to be freed up for 777X production that should start around 2017 after the surge line undergoes re-construction to prepare it for 777X production.  The build rate in 40-26 appears to be about 6 manufacturing days while in 40-24 it appears to be about 7 manufacturing day.  Over the next 18 months I expect the manufacturing days in 40-26 will decrease to about 3 days as Boeing slowly transfer the surge production to the main line.  During August we should seeing a couple of first: the 1st 787-9 for Scoot and the 1 787-8 for American Airlines should start final assembly during the 3rd week of August and both aircraft should deliver around November.
In Charleston the expansion continues as Boeing continues construction in the 88-30 line in order to prepare it to handle 7 airplanes/month by 2019. Work continues on a new paint facility and firefighting station but the expansion will not likely stop there. Currently the build rate is about 7 days at Charleston which will have that team pulling 3 787s out per month and delivering the same number in August.
The one big news for Charleston came out at the end of July.  Boeing announced that they will build the 787-10 exclusively in Charleston. The reason that was given that the fuselage can't fit into the Dreamlifter for transport to Everett.  According to some information that I received that is technically not true.  The fuselage can fit into the Dreamlifter but the FAA has set a limit as to the length of an object that can be carried by the aircraft.  The mid body fuselage for the 787-10 exceed the maximum length allowed by the FAA. For some time this decision was anticipated to go to Charleston and frankly was not a surprise. Neither was it a surprise that Charleston will taken on the additional rate increase that Boeing has planned for 2016 and around 2018-2019 to take the rate up to 14 aircraft per month.  Boeing has announced that they will build the -10 in Charleston but it remains to be seen if they will conduct certification flight testing in Charleston or if the 787-10 will conduct all it's testing out of Boeing Field where Boeing Flight Test team is headquartered.  It is conceivable that they can set up the facilities necessary to conduct certification tests in Charleston but I doubt that Boeing would take the expense to do that just for one derivative.  Most likely the test flight fleet will be flown to Boeing Field and testing will be based out of Seattle.  The location of the -10 shouldn't change the employment outlook at Charleston but the increase in work as well as the increase of the Boeing foot print in the Charleston area will drive the employment at the Boeing facility.
Here's Boeing's Statement on the 787-10:
Boeing to Assemble 787-10 Dreamliner in South Carolina

EVERETT, Wash., July 30, 2014 /PRNewswire/ -- Boeing [NYSE: BA] announced today that final assembly of the 787-10, the newest and longest member of the 787 Dreamliner family of airplanes, will take place exclusively in North Charleston, S.C. 
Boeing will continue to assemble both 787-8s and 787-9s in Everett, Wash., and North Charleston. Design of the 787-10 is underway in Everett, with final assembly of the first 787-10 scheduled to begin in South Carolina in 2017. 
"We looked at all our options and found the most efficient and effective solution is to build the 787-10 at Boeing South Carolina," said Larry Loftis, vice president and general manager, 787 program, Boeing Commercial Airplanes. "This will allow us to balance 787 production across the North Charleston and Everett sites as we increase production rates. We're happy with our growth and success in South Carolina, and the continued success at both sites gives us confidence in our plan going forward." 
The 787-10 will be 18 feet (5.5 meters) longer than the 787-9. With 10 feet (3 meters) of that increase in the midbody section, the 787-10 midbody is too long to be transported efficiently from North Charleston, where systems integration work is performed, to the Everett facility for final assembly. In addition, introducing the 787-10 in North Charleston takes advantage of that facility's capacity while allowing the Everett facility to continue improving productivity as it focuses on the 787-8 and 787-9. 
The 787 production system includes three production lines: two in Everett (including a temporary surge line) and one in South Carolina. The integrated production system currently operates at a production rate of 10 airplanes per month. As announced last year, the 787 production rate will increase to 12 airplanes per month in 2016 and 14 per month by the end of the decade.  
The Everett facility will continue to assemble seven airplanes per month, while Boeing South Carolina final assembly will gradually increase from three 787s per month today to five per month in 2016 and seven per month by the end of the decade.  
The Boeing 787 Dreamliner family of airplanes offers airlines unmatched fuel efficiencies and environmental performance, while providing a new level of comfort for passengers through the thoughtful application of new technologies. To date, the 787 family has won more than 1,000 orders and more than 165 airplanes have been delivered to 21 customers worldwide.  
The 787-10 will leverage 787 technology to provide more passenger and cargo capacity along with unparalleled seat-mile economics in the medium twin-aisle market. Since its launch in June 2013, the 787-10 has won 132 orders from six global customers.

A couple other notes of interest.  Boeing has stored a 787 that is supposed to be delivered to Azerbaijan Airlines from their order of 2 aircraft.  Rumor has it that the airline now wants to cancel the order though it is just rumor and the airline can also be delaying delivery.  It is unknown if this aircraft has an interior installed already but 2nd aircraft is scheduled to be assembled in Charleston around September for delivery in December.  This situation seems similar to the one Airbus faced with Skymark Airlines when they cancelled their A380 order after two aircraft had already been built.  For now this aircraft is in storage until there is a resolution to the situation with the customer and they will be building the 2nd aircraft as the parts are already in the supply chain. If they do agree to the cancellation then I don't think Boeing will have a problem placing these aircraft with another customer though it may take a few months depending on the interior.

Lastly, the assembly of the 787-9 is starting to hit it stride though the airplanes produced are still going through change incorporation at the Everett Modification Center.  This will continue because when the aircraft was certified there were part manufactured by Boeing or suppliers that had to be bought up to the FAA certification standards.  Many of these parts were deep within the supply chain. when the FAA issued the amended type certificate thus these parts need to be bought up to standard before the FAA certifies each aircraft as being in compliance.  This is the reason why Boeing is deliberately keeping the 787-9 assembly rate slow until the changes are reflected throughout the supply chain.  I believe that Boeing will start assembling aircraft that will not need change incorporation around the time that Charleston starts building it's first 787-9 in November for united Airlines.

787 Full Production Table

Saturday, July 19, 2014

All Things 787 Mega Update

First let me start out this update by saying that my prayers and condolences are with the victims and families of MH17.  I do hope that there is swift justice for all the responsible perpetrators of this awful crime.

Since my last blog post about 3 weeks ago there has been much activity with the 787.  Boeing posted 15 total deliveries in June and a total of 30 in the 2nd quarter.  This total included the first delivery of the 787-9 to Air New Zealand as well as delivering a 787 that completed a customers full order (China Southern receiving it's 10th 787 from an order of 10 that they placed).  Boeing has delivered 48 787s through the end of June (51 to date) and overall 787 deliveries to June 2014 stands at 162 (165 to date).

AS attention now turns to the last half of 2014, we will see the first 787-9 with GE engines delivered to United Airlines.  The first aircraft for UA, ZB167 (LN 181,N38950) performed its first flight on July 11th and is now into the F&R/ETOPs testing for the GEnx powered version of the 787-9. This aircraft should be delivered to United by the end of August.  ANA should also be receiving its first 787-9 later this month.  It will take delivery of ZB197 (LN 146, JA830A) after it had completed the F&R/ETOPs flight testing for the Roll Royce powered version of the -9.  It had to go through change incorporation and is at the final stages of production testing.

I do anticipate that Boeing can deliver around 10 787s in July including the one to ANA.  It already has delivered 3 aircraft and at least 5 more look to be ready for delivery over the next 11 days.  Including the aforementioned 787-9 for ANA other deliveries should include:

Air Canada - 1
Air India - 1
Ethiopian Airlines - 1
Kenya Airways - 1
Qatar Airways - 1

Boeing needs to deliver and average of 10.3 787s in the last 6 months of 2014 in order  to make good on it's 10 delivery projections for the Dreamliner.

July 2014 also meant that the who's who of the Aerospace world trekked to Farnborough, UK for the bi-annual Farnborough Air Show except for your trully (I still have my day job to worry about).  Though I was hoping for some more 787 orders (particularly the -8 and -10), there were still come decent 787 orders coming from lessor CIT for 10 787-9d and MG Aviation (Arkia Airlines) for 2 787-9.  There is an LoI for 6 787-9 from lessor Avolon.  However, baring a major order, Boeing's 787 book to bill will be significantly lower than 1 this year as the orders are only trickling in.  Certainly they will receive many more orders for the aircraft but this may be stymied by the launch of the A330neo.  Boeing still has to study the effect that the launch may have on future 787s orders and how to mitigate.  Certainly, Boeing can improve the fuel efficiency of the -8 by continuing to take weight out of the aircraft as well as incorporating improvements from the 787-9 flight test program.  Boeing can also start equipping the -8 with the same hybrid laminar flow control technology that will be standard on the 787-9 and 787-10.  Adding this can make the 787-8 more attractive to customers when it comes to a decision between the A330neo and the 787-8.  As far as I know Airbus is not installing the technology on the A330neo as it is still trying to develop the technology.  While the A330neo has garnered 121 orders during the airshow, 50 of these is to Air Asia which only buys Airbus, and most of the rest were to lessors all of whom already have the 787 in their portfolio.  We will only know which aircraft will be preferred by operators when there is a head to head competition of the two airplanes for airline orders.  One such competition is coming up later this year when Delta will look to refresh its widebody fleet. Delta inherited Northwest Airline's 18 787-8 order when the two companies merged thus it will be interesting to see how this will be factored into the final decision by Delta's fleet managers and board.

Here's the final order tally from Farnborough (Boeing vs. Airbus only):

Okay Airlines - 6 x 737Max8 (Firm), 4 x 737-800 (Firm)
Monarch - 30 x 737Max8 (LoI)
Avolon - 6 x 787-9 (LoI), 5 x 737Max9 (LoI)
Air Lease Corp - 6 x 777-300ER (Firm), 20 x 737Max8 (Firm)
Intrepid Aviation - 6 x 777-300ER (LoI)
CIT - 10 x 787-9 (Firm)
Hainan Airlines - 50 x 737Max8 (LoI)
MG Aviation - 2 x 787-9 (firm)
Qatar Airways - 50 x 777-9X (Firm), 4 x 777F (LoI)
Air Algerie - 2 x 737-700C (Firm)

Air Lease Corp - 25 x A330-900neo (LoI), 60 x A320neo (Firm)
AerCap - 50 x A320neo (Firm)
IAG - 20 x A320neo (Firm)
AirAsiaX - 50 x A330-900neo (LoI)
Avolon - 15 x A330neo (LoI)
BOC Aviation - 43 x A320neo
CIT - 15 x A330neo (LoI), 5 x A321neo (LoI)
SMBC Aviation - 110 x A320neo (Firm), 5x A320 (Firm)
Air Mauritius - 4 x A350-900 (LoI)
Hong Kong Aviation - 40 x A320neo (Firm), 30 x A321neo (Firm)
Transaero - 12 x A330neo (LoI), 8 x A330 (LoI)
Unidentified - 4 x A330neo (LoI)

787 Full Production Table