Tuesday, December 6, 2016

Trump Opens AF-1 Negotiations with a "Drop IT" Too Much Money Statement

Boeing hasn't even begun its build of replacing the old AF-1's with four new 747-8i's when Donald Trump throws a negotiation hay maker with a cancellation notice. Don't worry Boeing, just offer Trump a deal he can't refuse? The new dog is in town and assuming the US Government is just there to write enormous checks is now over.

Image result for New Air Force One depiction 747-8i
Air Force Rendition of the 747-8i

Don't get his message wrong, he wants the Boeing 747-8i over his aging 757 BBJ campaign buster. The 747 costs as much as one Trump Tower and he's into prestige and big things. The US and Trump are in his 100+ day mode and bravado is needed until further notice. The opening offer for a new AF-1 is "to cancel it", makes Boeing scramble its position of giving the US an all-new 747-8i at tremendous costs reduction or until it shows only a nominal profit on the "deal". Trump wants a shiny new 747 no doubt about it. Boeing has to negotiate, satisfying Trump’s campaign theme of being a deal maker. First up is AF-1 not the F-35. I can't imagine Trump flying to Asia in an Old AF-1 or a BBJ 757 with Trump painted all over it.

Trump wants the Great Seal of the US on a new AF-1 having a “deal logo” behind it. If Boeing plays its cards right Trump will order more F-18's because the nation needs a strong military where a Trump F-18 deal will include some AF-1's thrown in for nothing much more. The F-18 deal would keep Boeing Jobs going and the AF-1 deal would keep jobs going and so forth. Trump is not stupid and the liberals need to get over it!

It’s all about the deal. Boeing needs to change its marketing appeal to its customers during the duration of Trump's term. "It's all about the deal." I got that message six months ago from Trumps campaign literature telling he is the Grand Deal Wizard (GDW) and you better get with it or lose your position at the tax payer money trough when the dinner bell rings.

AF-1 is a "symbolic deal" for his first term and he needs it badly. The AF-1 is a gilded flying pig and Trump needs it to fly from wizard tower to tower hauling the GDW. Showing up in Paris with a sick 757 is so not Trump. A new 747-8i would do just fine next to the press "Cessna's" parked on flight line row. The Red White and Blue livery says Trump all over the Iconic 747 Hump. The presidential seal needs a bill board area fuselage space hanging Trump credentials when pulling up on the tarmac. Not even Jet way worthy is an AF-1, as a president walks on the flight line as required for all heads of state.

No 777's, 787's, or even an Airbus A-380 will do. It has to be a deal driven 747-8i with a paint livery to die for (counting other casualties). Yes, Donald Trump will order the 747-8i on his terms and that is the whole purpose of saying, "cancel it".

Breaking News After this article posted J

Narrowing Down To Boeing's Red Letter 787-8's

Boeing has delivered its fair share of 787-8's in the last five years and now it seems the low hanging fruit has gone from the market, leaving only 110 of the 787-8 to be built. It reminds me of the pudding cup as a hungry appetite scraps the sides for some little extra culinary pleasure. Boeing has reached that point with the 787-8 undelivered clientele. Below is the menu list of 787-8 customers who have not yet received even one of the 787's and shows no life of receiving even one 787-8, which is troubling the firing order on the factory floor. Its getting hard to schedule a 787-8 for a production spot since the larger stake holders (customers) haven't committed to its first 787-8.

See below for the list of nine customers holding out from 787-8 delivery:

Fig. 1

The difficult list of nine customers represent about 60% of the 787-8 backlog undelivered. There are currently 110 787-8 not yet delivered and it seems a long way from any delivery completion with this customer list. Much can be said about the Aeroflot order with Russia or Delta's fascination with Airbus but the main thing with Iraq is an uncertainty at best. ALAFCO maybe holding eight positions having customer intentions validated. This makes any kind of Order Quality Analysis impossible. The summary statement from this list suggests too many loose ends exists with Boeing to be comfortable without some kind of definitive assurances coming from these listed customers.

However, the life line comes from the higher profit 787-9's and 787-10's currently waiting for the build order. Over 400 787-9's and 164 787-10's can fill the factory for years to come. 

Below are the zero built list for the 787-9. This list does not include any customers already receiving its 789-9's having more on backlog awaiting delivery.

Fig. 2

There are twenty-one customers who have yet to receive even one 787-9 out of 195 booked classified as a zero received group. There are plenty of good news stories in this group as some are new orders and almost all are committed customers.

The 787-10 has not been even built at this time so any analysis would be a ridiculous adventure. But... A FYI for any further analysis of customers buying the 787-10.

Fig. 3

Monday, December 5, 2016

Boeing Goes Black Friday, Cyber Monday and Now " 787 Tuesday" 12/6/2016

Tomorrow comes the delivery of four 787-9's to four different customers. Boeing is having its own "Aviation Tuesday" on December 6, 2016. There are four 787-9's scheduled for delivery per AllThings787 blog by: Uresh Seth.

This much referred to site is used by Winging It for its best information on the productivity of the 787 program. A long followed, very reliable and honest presentation for the 787 program. 

They have reported from its charts the following information gathered from its reliable sources. The following deliveries for tomorrow's events at the Boeing Customer Delivery Centers:

Customer              Model             Center
British Airways       787-9             Everett
Xiamen                  787-9            Charleston
Hainan                  787-9             Charleston
Aero Mexico           787-9             Everett 

An Auspicious Occasion for customers and Boeing just before Christmas. Boeing hopes to deliver its 500th 787 on December 20th sing “Foam, Foam, Foam”.

Sunday, December 4, 2016

Oh Canada... What Have You Done with the F-35??? National Anthem

With limited financial resources Canada caves for the F-18. A populist leader will make popular decisions of the people not necessarily the correct decision for the people. Trudeau is such a leader leading from behind the Canadian sentiment of no F-35’s because the perceived opinion of the F-35 is too expense while having multiple developmental glitches and will possibly be ineffective against adversarial incursions into Canadian airspace. All well intended ideas against having the F-35.

The best case scenario for the Canadian F-35 would be a wait and see if costs, defects, and lack of operational capabilities are mitigated. This is the position of Trudeau leading from behind the public sentiment. Yes, the F-35 is in a chaotic phase of development, and it appears wise to “can” the Conservative opinion of buying the F-35 fighters.

However, leading from the front suggests buying the F-35 en mass as Canada faces a vast front on the Arctic Circle with many possible incursions from many adversarial combatants. The Canadian front may be North America’s Achilles heel, which will bode unwell for Canada and the US sitting smug with its F-18 fighter squadrons.

Whose interest is it defending North America? The Canadians or the US? 

The answer is a mutually acceptable agreement because both need the best defense is a great offense and the F-35 will offer a fundamental solution being able to strike and defend. The multi role fighter does both at once when all its attributes are turned on.

Trudeau made a political statement with a no F-35’s response to Canada’s conservative sentiments. The Canadian voters were swallowed up in popular agreement making Canadian tax dollars available for other civil programs such as cheese inspections coming in from the US. It’s a Canadian tradition after all, having neatly pressed uniforms for the mounted police when defending by riding horse back along its southern border.

The following items have just been covered:
  •    Political Progressive Populism
  • ·      F-18’s fit the budget
  • ·      F-35 is not ready for prime time
  • ·      Leading from the wake of public sentiment
  • ·      Billions is not in the Canadian lexicon
What the US government, in behalf of its people need to do, defending the Lower 48, Alaska and Hawaii is go back to the World War II sphere of influence through several tactics. It needs the Canadian Shield protecting its cheese industry and other North American cultural oddities such as Hockey and the NHL.

America and Israel have a plan which should expand to all loyal allies to America. In post war Europe it was called the Lend/Lease treaty.

Wikipedia information:
The Lend-Lease policy, formally titled "An Act to Promote the Defense of the United States", (Pub.L. 77–11, H.R. 1776, 55 Stat. 31, enacted March 11, 1941)[1] was a program under which the United States supplied Free France, the United Kingdom, the Republic of China, and later the USSR and other Allied nations with food, oil, and materiel between 1941 and August 1945.”

The US needs to form an alliance with all its F-35 current partners and customers. Israel set the standard as a crucial ally in the Middle Eastern part of the word. 

They just plain get a budget from the US with no visible strings attached when buying the F-35. 

In Canada who is so strapped with Canadian dollar type cash, It should/could “buy” a fifth generation fighter for the price of a fourth generation fighter where US acts as a middle man on the purchase from Lockheed. The US military purchasing with its own contract price from Lockheed would then buy for any "Ally" an F-35 and then sell-back that F-35 to the same “Ally” with a current fourth generation replacement price.

Graphically charting a transaction with a Canadian would flow like this:

Canada buys 50 F-35’s to assist defending North America and its own nation (already by treaty). It has been often been recognized of its aging F-18’s and needs the F-35. The current market price of an F-18 (is $60 Million US each?). The current market price to the US of an F-35 from Lockheed is $100 million US. The US will buy an F-35 for Canada in behalf of North America’s over-arching defense at its own contract price and then sell back to Canada that same F-35 using a fourth generation price (i.e. the sixty million mentioned above).

Of course there are other expenses supporting the program and an ally who already has a support structure for its fourth generation fighters who would role that expense into a fifth generation budget support. This resource example is for; parts, maintaining and training of flight and ground operations.

It isn’t lend-lease but it does go a long way defending this nation and North America and other parts of the world. Israel has a sweet deal, because they are at the tip of the spear when defending American security in an active war region. Israel is essentially given an F-35 out of the US defense budget when the US allocates to Israel a defense award from each US budget year for F-35's.

The Canadian example mapped out above would give Canada a strong value for having its F-35 fighters. At full price, Canada would have to pay $100 million per aircraft from Lockheed at current conditions or pay $60 million to the US Government for its defense of North America using F-35's. It would then get Trudeau off his political hook he had set when he proclaimed “no F-35’s not on my watch”.

Fifty F-35’s at $60 million would then would cost Canada $3 Billion instead of $5 Billion at current full price. The difference of $2 Billion is a fair price to pay having Canada guarding the DEW line.

Friday, December 2, 2016

Boeing's 2017 Order Book Starts With Juneyao

Juneyao has agreed to buy ten 787-9's in its just signed MOU with Boeing. A long planned for wide body order is taking shape for the Chinese operator.

A quote from the news suggest Boeing sales is relentlessly pursuing the Far Eastern marketplace.

"Juneyao´s main base lies in Shanghai, where China Eastern Airlines is also based. The carrier currently operates 56 A320 family jets, largely on domestic services. Its only international routes are to points in Japan, South Korea and Thailand."

The mention of the fleet made up with the 56 A-320's is significant as the Boeing 787 shoe horns in on this exclusive Airbus customer, which may open the door for further Max orders and a future fleet change with Boeing could be achieved. 

Jayenao is an Airbus Customer having all its 57 single aisle A-320's family.
Image result for Juneyao airlines

Refer to Winging It Article:

Air France Flies Its First 787-9 with Boeing's Five Hundredth Frame Built

Once it was unimaginable how Boeing was going to build five hundred wide bodies. Well, it did just that and Air France received the 500th 787 built body in the form of a 787-9 Dreamliner. Congratulations are in order for both for this feat. The other story is that; Boeing is delivering its five hundredth customer DreamLiner this month. That delivery is scheduled for December 20, 2016 delivering to Avianca and it's a 787-8.

Image result for Air France 787-9

The significance of this accomplishment for Boeing. It can now claim Program maturity as it has significantly proven the 787's veracity for proof of concept and a free flowing reliability. Even though there are day to day incidences reported, such as engine shut down or warning indicators revealing an actual fault, those are typical mishaps not wanted, but endured by all aircraft of every type. The 787 difference is these types of failures have been significantly prepared for by Boeing and it has mitigated any problematic occurrences through advance technology monitoring and reporting.

Air France has a very mature and clean Dreamliner, and should not expect any mishaps that are not already dealt with from the other 499 aircraft now flying with its many customers. In addition, Air France is positioning itself for a more optimal operations as it will increase its profit margins demonstrated by so many other customers who fly the 787. They will compete with the region's burgeoning stars such Norwegian Air and Thompson Air. They will become on par with British Airways as it has its own 787-9's. BAC has nine 787-8's delivered or in production and sixteen 787-9's delivered including one to be delivered.

Air France is countering with 787's after its first 787-9 delivery this week having a dozen in total coming from Air Cap leasing. In addition Air France has a large direct purchase from Boeing after lining up some eighteen 787-9's and seven 787-10's. They will go head to head with the above mentioned Airlines once it stocks its inventory with Boeing wide bodied 787's. In all, Air France will fly with thirty-seven 787's from leasing or direct buys once all orders are filled making its competitors aware of its presences in the marketplace.

Thursday, December 1, 2016

Boeing 787 Month End Report

Below are the mid quarter numbers with YTD progress. Boeing has slacken the delivery pace in November having only nine 787 delivered but remains on schedule for delivering 138 787's during 2016. Order numbers remain at 68 787 after the robust order slurry in October.

Fig. 1

The 90 day moving average dipped from a plus 12 monthly average down to 11.33 falling below monthly guidance. However about 12 787's will be delivered in December capping off the year with 138 delivered in total if all goes well.
Fig. 2

Program health is solid as more 787 orders are expected soon rather than later.

Fig. 3

The 787-9 delivery Program to Date demonstrates its ever increased delivery profile compare with the 787-8. The 787-9 dominates with 616 orders verses the 787-8's 431 ordered.

Fig. 4

Final analysis comes from process totals as the In Production number decreases exhibiting program build efficiency has increased. In January 2016 only eight 787 were delivered with 45 frames in process as compared with November's 37 in process demonstrating a higher factory floor efficiency.

Fig. 5

Wednesday, November 30, 2016

Airplane Wars Strategic Plans "The Boeing Response"

For every wide body built and delivered there are two single aisle going out Boeing’s door. This brings several questions to mind. One, is how long can this pace be maintained? Two, how can Boeing “flip” strong Airbus customers over to Boeing building up of its backlog?

In answering these questions, a key Boeing strategy must evolve. It is hard to flip a customer because of “fleet commonality” advantages. Otherwise known as having a fleet consisting of only one type of manufacturer and all types operate similarly. Having an all Airbus or Boeing fleet is the goal for each. It builds an almost impregnable wall around the customer and keeps it from switching it inventory from one to another.

There is another class of customer having two or more fleet manufacturers in its inventory. These are usually mega operations fishing for the best deal or the best fit for its operation. Anything goes when replacing or expanding its inventory. This is an exception to the sole source customers. The second question is wrapped up in the sole source customer of how to break the customer strong hold of having only one manufacturer and only one. Airbus has flooded the market in orders with its single aisle offering, Boeing must catch them in the market place having limited opportunities as fleet holders decide which manufacturer is best for its operations.

The Boeing answer is through commonality for all its models. If flying the 737 then flying a 777 would be very similar as well as maintaining various types of one product source. A common bond makes a company more efficient regardless of performance advantages within a certain type of aircraft such as a single aisle version. Boeing has its work cut out breaking up Airbus sole source customers and flipping them into Boeing customers. Strategic keys are the 787 and 737 programs.

If an Airbus customer makes a fleet expansion or renewal then it will likely be an Airbus purchase over Boeing from convenience and efficiency going forward. Boeing has to offer a remarkable alternative for changing the sole source dynamic. 

This opens up the third question. Does Boeing have the remarkable alternatives to crack Airbus’ strongholds over its customers? Yes, the 787!

The short answer is in certain areas where it does have that remarkable advantage. Even though Airbus has made a valiant wide body attempt, it still falls short of Boeing's long term proposal from its competitive 787 offering. In time the 787 will make a significant statement over the A-350 as those performance numbers make the 787 the wide body leader in its class. 

The 777X is completing this strategy as it will revolutionize the ultra-big concept away from the 747 and the A-380 as a more sensible way to reach long range markets. Both Boeing entries is taking time for fracturing the Airbus market and was also late in the commonality game coming to the market. However, when this advantage is realized, then the single aisle orders will open up from airlines seeking commonalty as an efficiency metric for its operations regardless of its current fleet status of having just one source for fleet operations. (see Juneyao order)

The Max may be argued better than the NEO, but the difference are too close for flipping an Airbus customer as they too hold a common fleet source.

The 777X will be a remarkable change that Airbus is no position to address at this time or in the foreseeable future. It will change fleets from top to bottom for the airlines. Duo fleet operation are cumbersome and less efficient than having just one source for its fleet inventory. 

The 777X can and will start a gradual change toward having a complete and common fleet of aircraft from top to bottom. The 787 by large numbers is changing those have since received its first 787’s in the last five years. 

It is opening up customers who own the 787 with the convenience of owning both the Max and 777X, if a fleet needs those types through a planned fleet renewal or fleet expansion. 

The Boeing goal it to flip Airbus customers into Boeing customers and it will come the Boeing wide body family of aircraft. 

Boeing needs another 1,000 single aisle orders to match the Airbus backlog. Boeing can keep its current production pace going for another five years with today's current backlog. It will need to fill many more orders before feeling confident about its long range plans against arch rival Airbus. Product commonality is the long term lynch pin going forward.

Hence, a need for market place analysis and strategic sales planning where sales for a 777X translates into multiple sales of its single aisle for the same customer as time moves forward. When that strategy will work it will be over time and not have an immediate impact as question one and two are answered.

Boeing Is In Like Ten

That is, its 787 dash ten has entered Charleston's hall of assembly this week. The large bodies are joined as the 787-10 takes form. A long assembly schedule for the 787 model is anticipated. It won't be a 30 day wonder likes its siblings the 787-8 and 787-9. It will take late January until roll out.

Report questions newest Dreamliner
Kawasaki Heavy Industries Ltd. began major assembly of the first 787-10 Dreamliner in Nagoya, Japan, in March. Final assembly of the airplane will take place exclusively at Boeing’s campus in North Charleston.

The main thing here is the assembly often overlooked as a development hurdle is going through its paces at the Boeing Charleston plant. This is the first 787 ever assembled at the Charleston, SC plant as its initial test model. All other first built 787's, were assembled in Everett Washington under the careful eyes of planners, engineers, and craftsmen assigned that 787's first assembly.

Charleston effort is underscored by many milestones for the company and the plant itself. They are a demonstration of the program's maturity which had experienced so much before this week, and now the Charleston plant has become a main player with Boeing's aspirations. The mantle of leadership has passed with the 787-10 assembly this week.

Gone are the teething woes, broken concepts and ill framed fasteners. The 787-10 will be the prime star for Boeing in Charleston signaling an era change coming from Everett, WA as it goes to Charleston, SC. A hundred and sixty-three 787-10 are now slated for building in Charleston's factory, circumventing flying its too large 787 barrel sections to Everett, WA. Boeing has matured its manufacturing operation to support this strategic change. What was once just open space a few years ago is now a multi-billion dollar move for everything new and different for making the innovative wide bodies.

The 787-10 starts today for the casual observers where years of development have already occurred for this model. It will fly 6,800 miles having a three class configuration for 330 people and much more if re configuring for more seats in two classes. In the old school of business there was the discussions on the topic of "completeness", known for the thorough cycle of finishing before executing. In this case the execution of building the 787-10 completes and finishes the program cycle reaching its completeness.

Congratulations are not early and undeserving since so much has been accomplished to this point with the program. It is the culmination of an often conflicted program with its well-known problems coming from new technology failing often. Considering its batteries, fasteners, and systems achievements and failures, this is all represented in Charleston, SC with this 787-10 opus.  

Sunday, November 27, 2016

Boeing Order Book 2016 and MOM

Currently, Airbus lags the Boeing order book by seventy units ordered during the year to date. The net orders stand for Airbus at 395 after cancellations per Airbus website, and 465 net orders for Boeing per its website accounting. Boeing has a slight numerical lead over Airbus by 70 units. However a deeper probe is the billions on the 2016 Books only known by each manufacturer’s actual sales agreements made during 2016. Only an estimate can be made from list pricing of each manufacturers offering.

A more detailed analysis is needed... (See the musings below Fig. 1) where the billions are stacked against one another as a comparison from a financial point of view.

The unofficial chart from convoluted information which needs more work, but gives a sense Boeing will win the Year even it does not announce the MOM during December 2016.

Fig. 1

When Boeing announces the MOM aircraft, it will come with those customers known as "Launch Customer". Boeing will add about 200 orders to its books at that time judging from recent announcements with the 777X and 787-10 announcements. It will be a Boeing year even if no MOM announcement is forthcoming during 2016 and it becomes again the "World's Largest Air Framer".