Friday, January 10, 2014

Its All About The 787 Boeing Customers From This Point Forward

The center of attention for the last  five years has been the 787-8 and now the -9. Boeing has suffered sales draughts at times, and then fire. The On-The-Fly development regimen is rapidly coming to close. Even though there will always be some continuous development needs as its customers robustly attack the passenger market place. Those numerous infractions on the aircraft will wash out in 2014. Reliability will once more become a term used for the 787. Part of Boeing's thinking was a quantum leap over its competitor, Airbus. They knew the various risks in 2005, but couldn't quantify those risks until it entered customer service. After two years of shaking out those glitches, here is what customers now count on when buying a 787.
  • Boeing will have the 787's back
  • Customers can count on the 787 to make greater profits and pull airlines out of financial Kaos.
The 787's are changing the airlines market footprint, greatly as the 787 is ready to take the market by storm by the end of 2014...
  • It will have 200 787's flying to expectations
  • The Airbus offering is a half measure of the 787

These are just a few talking point for consideration. Number one point is Boeing's bent on making sure customers have no adverse opinion for buying a 787. They will have the 787's back with an advanced team of engineers and mechanics that can solve any problem encountered. The 787, by end of 2014, will make reporting about Boeing problems a pinch tougher as those problems are quietly buried. If the publishers want to publish a book about the 787 glitches then they should because the writing material on that subject will dry up by 2015. Boeing has the 787's back and it is not going away. When both the aviation giants tale of the tape is read in 2016, the 787 remains the heavy hitter in the market place. Airbus will have to go back to the innovation board to beat the 787.

The profit addiction is effecting aviation board rooms. It just not the fuel savings that a 787 brings to a bottom line, its also the passenger customer appeal, the ability to extend routes, and the cheaper air fares. "Unfair", proclaims Airbus!  Oh well, the 787 is here to stay, deal with it. Just look at Ethiopian Airlines bottom line since adding the 787. Look at Air India dismal financial position from 2009 until now. Air India is now playing the 787 chips its has on the table, when they didn't have any of those chips to play with earlier. Air India flew to Frankfurt in 2010 and lost money every time they loaded its fares on to Germany. Now they need those 787's all the time.  In fact, Air India sold its 787s, just to take with same 787s back the next day as  leased aircraft. That is the chip they couldn't play during 2010 when they were financially broke. They will play these same 787 chips several more times to reach eventual profitably.

Foot print, as in Sasquatch. Air Canada can't wait. They will be receiving its first 787 by mid 2014. They will undercut foreign intruders from far and aboard,  when attempts from foriegn airlines  are made for coming efficiently or leaving effectively from Toronto. However, the 787 foot print will stomp the Canadian competition, safely leaving Canada and its World air space for; "Oh those Canadians" and other Canadian friends. This should be a model for other national carriers. They should follow on in like manner in order to salvage any national carrier's from alien predators. Norwegian Air, even though with its glitchy start is realizing 787 potential in spurts. Once all those pesky problems are treated, where Boeing has the 787's back, the glitches will terminate. Then Norwegian moves to the head of the class with its 787s. What the other customers aren't spouting off about, shows they like less attention towards its own strategy with the 787, and more attention about its own performance as an airline. Only when they buy another pot load of 787s will they speak up and make an obligatory statement; "Even though the 787 was grounded or having teething woes, this airplane has proven critical to our over -all success, therefore with great pleasure we will announce follow-on purchases of the 787 family line of aircraft."  That sentiment has already been stated as new 787-10s were ordered by various airlines

The end of 2014 will have satisfied those sitting on the sidelines, that the 787 is done with all its significant trials and will venture out and order a plethora of 787s. I would expect the new 787 customer category to grow as airlines order in band wagon like precision towards the end of the year. Boeing will grow its order book once again greater than its 787 production number of 100 units in 2014. Boeing needs to keep ratio sales to builds of over 1+. I would use a five year moving average ratio/ (calculation) over its second phase life of the program.

Boeing tells its sales team to keep the sales to delivery ratio above one.

Boeing  787 Five Year Moving Average Sales To Production Ratio

         2009   2010 2011 2012 2013
Sales -59     -  4     13      -12   182
Delivery                 3        50     65

Ratio calculation:
5 yr sales.        120
5 yr Delivery  118
Five Year Ratio 1.017

(anything above 1+ maintains a inventory buffer. The un-built inventory is virtually the same as it was in 2009 after it has 118 delivered units.)                        

This moving average summary for 2014 should stay at par with little change to the ratio. A good time for its continuous improvement  scheme.

  • Phase I was start-up period 1, since late 2011-2013, The Glitch AGE
  • Phase II is maturation with its customers 2014-2017, The Customer Age
  • Phase III, 2017... the Game Changer Age, claims a turn to reality through its customer's bragging points.
2014 will be written up as Boeing finally delivers its Dream.

That's how important 2014 will be for Boeing to have this bird meet customers expectation when signing an MOU for 787s. It is important for both Boeing and customer to share the customer's own dream of changing bottom lines for failing airlines, increasing the strategic foot print of an  airline who strives, for world relevance and defends its home turf. Finally, shore up mega airlines fight at the top with a multiple offerings from the duopoly of the giant framers that mega airlines seek.

As stated at the beginning of my writing participation back in 2012, I am taking on writing about just Boeing mostly, and other interesting aviation items. This exercise has been helpful for my critical thinking acumen and my enthusiasm for aviation. I chose the Boeing side of things and reserve the right to offer criticism towards Boeing as therapeutic treatment for my Boeing frustration. Airbus was never a favorite of mine, just because we live in a free country and I can write about my opinion on wings and things, hence the title, "Winging It", this has become an open digression on the Boeing company. I thank all who have ventured with me to read my inputs and I hopefully  can slender down my own glitches in writing. Only if you ever knew how far I've come to this point you would understand the effort in sharing these out  takes from aviation's Renaissance. I hope that 2014 will find  you smiling at my attempts to shine light on those things that also make me smile, think and write. After all it isn't about the money for me since its all deviously free. It all about those who share an interest in aviation and can't or won't chose sides. I've chosen mine and I'll probably go down with the ship when the order goes out from Boeing, to man the life boats.