Monday, June 9, 2014

Revenge is Best Served With An 787

In Texas Hold'em the turn card was flipped making the hand a full suite of Boeing aircraft. The turn card was the 787, because Boeing always knew they needed a 777X to complete the hand. They have that card sitting quietly as the hole card in the design bin. Now the hard get, was the 787 card which is crafted from a hard boot strap pull lifting Boeing off the ground. It has been goobering around with its passengers for almost three years with "teething woes", and a FAA Pacifier hanging off its lips every time it tries to alleviate those pesky gumming pains. Now the 787 has teeth in its third year. One hundred and fifty teeth are now flying.

The 777-9X is going to be played in suite and the Max cards as well. These are something Airbus can't match as in the game of Hearts, as Boeing  "Shoots The Moon". Smart hearts players players shoot the moon when they have an unstoppable hand after the first few cards are played. The cards are beginning to fall after its-up-from- the-boot strap 787 play. I know them as the first couple cards out of the hand whether its in Texas Hold'em or Hearts. The 787 made 'em (Airbus) think, blink and dink. The Airbus hand is in trouble.

Here's what shooting the moon by Boeing looks like from the Airbus perspective.

"Seeking Alpha" Points out what Its like to "Fly me To The Moon" when it comes to Boeing.

"Last week, Airbus reported that as of May 2014 (the first 5 months of the year), they took in net orders for 203 new aircrafts, while Boeing received nearly double the amount of orders with 394 new aircraft request. Nearly all of the orders Airbus received were for the single-aisle, narrow-body jets (namely the A320 and the A321 family, as in the diagram from Airbus’ site pictured below) which have a far lower profit-margin than the jumbo jets. Airbus noted 196 deliveries for single-aisle planes, while Boeing only 193. For both companies, single-aisle jets are the cheapest to produce and sell. To make matters worse, Airbus also received about 306 order cancellations to date – that means that nearly one in three orders for Airbus aircraft gets cancelled. So far, Boeing has managed to have just 52 order cancellations out of the 448 orders that they received in 2014"

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    Boeing is now starting to shoot the moon in the game of Hearts, as Airbus tried to take Boeing's high card heart, the 787, using a muffed-up efforted A350. You know that A350-8 that was sloughed and dumped. The do-over A330 NEO is trumped. The A320 family NEO ate up by several Boeing cards then it lay downs against the Max, but can no longer sustain itself in the game. Boeing started playing trump with the Max cards keeping power cards in reserve. The high Aces of Boeing is a pair of 777-X8 and 777-9X's. Where by 2020 Airbus will reap in its losses as pointed out in the seeking Alpha Observations.

    Airbus had 306 cancellations since January 2014! Boeing only had 52. Call those 52 cancellations, a typical slough-off in any year. However, the 306 number of cancellation is just brutal for Airbus with only keeping 203 orders at the party. The crowd just vacated the party when the lemonade came out as the main treat during Airbus' order year.  They will gain more orders before the end of the year, but this cold shower of cancellations as reported, made its sales campaign go limp just at the wrong time.

    Boeing had 448 gross orders during this same period. Airbus is losing the game at this time. The big why, is asked at closed board meetings. The newly appointed guy to speak-up, at the meeting, announces he wants to spend more time with his family before explaining why this is so. "Uh, hmmm", The A380 has hit order book bottom like the 747, The A350 clone war is an "Okay Airplane" against the 787. The 787 is experiencing good luck with its extremely advance design from nose to tail. After all the have the 787 in the air flying today. People really seem to like it as do its airline customers. Now for the Neo, I think you are really going to like this part of the presentation. The Neo and A320  orders lead the way for this years order book. Its a really big winner. We have sold a net of 203 single aisles so far. That's 5 months of production during the first 5 months of orders. We are keeping in the game with NEO's"

    "I see a hand at the head of the Table, yes sir, "

    "What has Boeing done the first five months?

    "Ahhh yes Sir, next question, time is tight, for my answers."

    Further more I want you to focus on screen slide exhibit 1D. Entitled Profit Margins By Model Type.

    Questions?, "yes you at the head of the table, go ahead with you Questions."

    Table Chief, "What about our big profit items such as the A380 that hasn't hit break-even yet, and the A330 our standard bearer, why aren't they listed on this chart for the month?"

    Presenter replies, "Yes Sir, may I draw your attention to the 2013 chart on this matter, and we don't have the number available yet at this time of year for big ticket items. We will update those profit centers at the end of the year. Did I mention I need to spend more time with my family, as this job is hurting my family life. I really love this job. What are true profit centers anyways? I will get back to you, as  numbers are my one priority. Did you hear the one about the 787 that flew over nine thousand miles with a full plane of people and its booked motel for the passengers after landing was over-book?"  See, Boeing has problems too!

    The murmur in the room is a sustained, "Whaaaat"?

    Next boardroom question is offered, as panic starts to set in at the meeting.

    "Can we make pigs fly?"

    Followed by "The 60 Second Manger guy, sitting in the corner muttering  comments;

    "Boeing took on 394 orders double what we did since the first of the year. Boeing production is beating us at our best game,  and is getting its units into the hands of customers. It seems to be working for them,  Ideas, ?.... Meeting adjourned.!"

    Airbus Press Statement that Afternoon by by Airbus PR press team.

    Board meeting  press release:

    Airbus has announced that its on track in the A350 development, The World's most best greatest, widest 350 XWB ever built. It will be introduced late this fall at the earliest before Christmas. Deliveries will begin in earnest when testing is complete. The A320 NEO is still far ahead of its counter-part, Boeing, as the single aisle orders continuous to expand the order book ahead of the MAX, even though the MAX is out preforming the NEO in the market over the last two years  a late concept trying to compete with the Airbus option. You can read the orders and deliveries updates on the Airbus website where we have hired a team of accountants that can interpret those gross numbers into real  and actual number instead of just using 12,000 units built to date which makes no understandable or useful analysis during the current year.