Friday, July 31, 2015

Boeing Progress Report July 31, 2015

The below reports are  not final, as of July 31, which has not closed. However, it is an accurate thumbnail sketch of  the first month of Quarter III. My own Boeing expectations for the 787 segment, builds on the various loose ends remaining before the end of 2015, while filling the 787 program again. Expectations are set for a Qantas 787 confirmation placement before year's end. There remains multiple possibilities for add-on 787 orders since customer's initial orders have been delivered and have been in operation for some years. Creating an expectation of 787-10 orders and additional 787-9 orders before year's end. This report demonstrates  Boeing's capability for both Order Book status and delivery consistency, inferring a guidance on Boeing's ability for more 787 Orders remaining in 2015 making these numbers conventional expectations. 

Chart: 7-2015-1
* YTD numbers

The above chart 1 indicates an order opportunity for those who are prime for fleet enhancements (only 25 net orders). Such as Qantas who have indicated it is waiting for its "ship to come in" during 2015, then it will fill out commitments for 50 787-9's as confirmed. There remains some opportunity for 787-10's this year. The second half of 2015 will be robust for the 787 as Winging It, has long since believed, 2015 will become a separation point from its competitor in sales and delivery. 2015, will be a strong 787 order year with a reduction of backlog at the same time. 

Chart 7-2015-2:

The order book status remains higher than what it was during its first production year in 2011 even after 304 787's are delivered. 

Chart: 7-2015-3

Production Management is extremely pleased with a steady 90 day delivery pace of about 12, 787's each month. It indicates Boeing is serious with its goals of 12 787's a month, in-spite of any road blocks. It is achieving a difficult pace, which a competitor will find hard to duplicate in any circumstance. 

Chart: 7-2015-4

The 90 day moving average is a long term measure which adjusts the production flow over three months into one number. All road bumps during ninety days are smoothed into this number in Chart 4.

A 90 day moving average 11.667 units a month, says what will happen over time as Boeing delivers almost 12-787's a month pace, every month. Customers are loving this particular talking point. Any Customer sensitivity towards financial uncertainty, disrupts its own operations. It needs to know when its  aircraft will become ready for delivery, so it is ready to complete the 200 million dollar purchase with its operations, finances, and with its own flying customer's. The moving average of about 12 units a month has become the norm, and a customer will need to arrange with the bank for its next delivery at a specified time. Any customer now knows that it has to have a plan in place by having all its own moving parts from logistics to crew training at least planned one year ahead of a certain delivery date. However, this can frustrate Boeing also, when a customer meets its own bump in the road before delivery, as often is the case. The customer can gum up the Boeing production line with its own problems of not being ready or having financial goals met.

Thursday, July 30, 2015

KC-46 Will Not Be Your Father's F-22 Procurement Debacle

Boeing is making serious moves in its demonstration for the DOD, why they choose Boeing wisely. What's at stake is not the KC-46 Pegasus program, but a genuine effort in preparation for the next Boeing bid. Part of that preparation is company integrity, leadership and delivery of mission accomplished. Boeing is stepping ahead of any avalanche coming down from on top of them during the KC-46 project.

Normally, writing about the KC-46 is a summer past time, but this is really an important change in corporate responsibility coming from Boeing. They really can't stand Airbus and its A-330 offering for a tanker. Scott Fancher, the company's head of development programs at Commercial Airplanes, is standing in the middle of the KC-46 program for one purpose, and one purpose only. Deliver the program on time exceeding all military expectations for this tanker.

This is the corporate specialist on board, and will be taking names and overseeing the program. Nobody is on the hot seat, yet! He is Boeing's point man for mission accomplished. Something important is going on in Boeing's scheme of military thing's and the KC-46 is the stepping stone to that import goal. Perhaps a sizable drone contract has an unannounced RFP in the formation, and Boeing wants to add a due diligence criteria coming from completing its KC-46 Pegasus mission, as on time and meeting all expectations.

Boeing Shuffles Leadership for Struggling KC-46 Program

By Aaron Mehta6:21 p.m. EDT July 30, 2015  Defense News

Tuesday, July 28, 2015

Make Flying Fun and Passengers Will Come.

An Airline Like Scoot has captured an inspired theme with its Yellow Gold livery. It has to compete with the Big Boys and Girls of the sky. By 2019 it will have Twenty 787 of both types supplanting its former fleet dichotomy.

Image result for Scoot 787-9

Fly Scoot.Com starts the fun theme. Tech savvy customers see the nuance in the .com painted on the airline. The 375 seat 787-9 has a party theme of everybody is here for the party. The 335 passenger 787-8 seating theme, is about: "shush, don't tell anybody else, we're good". The party is started when the bright Yellow/Gold lands. Everyone not flying on Scoot notices the illuminated incursion on the flight line.
787-9 375 Seats

This isn't the first time Winging It has featured a Scoot photo or aircraft and it won't be the last time. I also had a hankering for Ethiopian's 787's, when it took off. What caught my eye is its livery that just looks like fun "E" ticket ride. Scoot is considering going west as far as London. It was or is, a small airline on the grand scheme of things. It's rubbing shoulders with the China barrage of options in the region. Qantas is also looking over its shoulders whether to order up 787-9's.

787-8 335 Seats

However, Scoot is making it possible for its plan now, with its handful of 787 in Scoot Livery. It looks fun flying Scoot. It turned my head in an airport full of Blue hued aircraft liveries sitting idol while waiting for passengers. I just wanted to fly on the Yellow-Gold Bird. I wanted to change my ticket to the yellow livery, and have a little fun. I'm an impulsive traveler. with a penchant for loyalty with what works. Yellow-Gold really works on my brain.

Over-stressing On 787 Occurances

From time to time something happens to the 787. For that matter from time something happens to every other Airplane model in existence. It may be metal fatigue or an anomaly found on its fight systems such as the A-330 found in a dicey situation flying over the Atlantic when it was lost coming out of Brazil to Paris. You may know it as Air France flight #442. Either way it was a disaster. Somehow every time a 787 gets a nick in the bonnet, it headlines and the doom and gloom come out to play with the 787.

Recently it was a hail storm on a 787: From Daily Mail

American Airlines' new Dreamliner jet was pummeled by hail, 'dropped hundreds of feet' and was forced to return to Beijing
·       Texas-bound Flight 88 carrying 209 passengers and a crew of 13 on board returned to Beijing after sustaining hail damage 44 minutes into the trip
·       American has seven Dreamliners, which carry a list price of $224.6million each 
·       Plane's fuselage and wings are made from carbon-fiber composite material instead of aluminum to reduce weight
·       Delta Air Lines Flight 159 from Detroit to Seoul, South Korea, had its nose badly battered by hail while flying over China in June 

Word Play headlines from “Forbes” conjures up this image:

American Airlines' 787 Dreamliner Nightmare

"American Airlines probably thought it was making the right move when it bought seven Boeing 787 Dreamliners. After all, as I noted in my book, You Can’t Order Change, the $166 million 250 to 330 seat aircraft was known for using 20% less fuel — thus the profits from filling them up would be higher.

But that was before American Airlines Flight 88 flew through a hailstorm outside of Beijing on July 27. The result was a punched-in nose that will keep the aircraft on the ground for now.

However, I think the Forbes opinion piece is hogwash over the nose cone. It can be replaced, it can be fixed, and it just happens as all in aircraft flights. The plastic model expects hail, sleet and Ice. It also plans on having bumps on the ground. So when that happens the news flow over to the doom and gloom committee for a thorough vetting. Wall Street is not grabbing its umbrella and jumping off the nearest bridge. Read the Forbes article if it even added anything of value before you leap to an untimely conclusion about the plastic airplane."

The maturation process of the 787 is a work in progress of its all new technology. It will fly under all conceivable conditions. It can be repaired with all conceivable damage. Note the Ethiopian 787 crown fire was a first time unknown on how to repair.  It flies on just the same. The American Airlines hail incident is a 787 bloody nose during a hail storm and not a night mare as dared click on the headline, where the reader expects doom and gloom.

Monday, July 27, 2015

EX-IM: The X's and Ohhh's Team Meeting

Boeing is the unwanted guest as the congressional table for funding the EX-IM; Vision: Give equal opportunity for world competitor's through gaining financial access to American trade good's, otherwise fair competition would not exist with the world's market place.

EX-IM Mission summary: Ex-Im Bank, an independent, self-sustaining federal agency, helps create and maintain U.S. jobs by filling gaps in export financing and strengthening U.S. export competitiveness. The Bank provides a variety of financing products, including working capital guarantees to help small and medium-sized U.S. businesses, export-credit insurance to protect against nonpayment by foreign buyers, and loan guarantees and direct loans to assist foreign buyers of U.S. goods and services.

Sounds reasonable, what's not to like? This was at the small business level featuring a discussion of how small business can grow from third world regions accessing US markets.

The EXIM vision Seminar  you must read it to discuss it. Otherwise forgetaboutit!!

The Congress has politicized this notion in a Frank Sinatra way by "Doing It My Way", lyrical rebuke, while not extending the EXIM in 2015. Boeing says, "these are our customers your talking about" "Kapeesh?" A liberal likes it and that's good enough for a conservative to say no! So Conservatives checked the vote for and against list twice and voted no more EXIM funding, just because, thinking is so hard when you are in congress.

Somewhere In The paper Work Is The 300th 787 Delivered

Boeing now has delivered the 300th 787 but today also marks the 302nd 787 delivered when just this early morning they showed only 297's on books, out of this afternoon's adjusted total of 302 units in customers hands. Yesterday the stock price  went up on the "corporate writing pens commodity", as the auto pen machine handled initials all over a ream of Boeing paper-work. Four 787's were delivered today, of which one of its number became the distinguished 300th 787 delivered.

July 26th:

Customer Name, Type,    delivery #

Air Canada      787-   9-         298

July 27th:
Etihad              787-  9-          ?
Vietnam           787-  9-          ?
ANA                787-  9-          ?
United              787-  9-          ?

Saturday, July 25, 2015


Going old school isn't a bad thing. But not out pacing an adversary is a bad thing! China not technically an adversary nor is Russia, as both are gaining some high sea advantage as they try imposing dominance over the US Navy. China is building Islands and ships for the South China Sea, and Russia is finding its Mojo again with a submarine Navy. The USN finds itself in the maelstrom of international intent once again. The DDG class Arleigh-Burke is the USN sword. Its Ohio class Nuclear Subs is the boot on any adversarial nation's neck.

Since the DDG Zumwalt withdrawal, by stopping at three of its stealthy types, the retrofitted Arleigh-Burke bears the load of primary naval surface defense and offense. Aircraft Carriers are floating airports and DDG (destroyers) are a fighting Blue water surface vessel, or a misbehaving littoral combat incursion. Its very significance for our Navy cannot be overlooked. Nor can the Navy under appreciate its importance by letting it rust until a scheduled retirement. The older generation DDG framework is being built fresh today for renewing the fleet. First one up: 

May 2, 2015 The John Finn Is Christened 

Here are 10 things to know about the future USS John Finn and her namesake:

John William Finn
John William Finn
1. The future USS John Finn is the 63rd Arleigh Burke class destroyer, and the first of the DDG 51 Flight IIA restart ships.
2. The destroyer was named in honor of Lt. John William Finn, who as a Chief Petty Officer served at Naval Air Station Kanoehe Bay, Oahu, Territory of Hawaii on Dec. 7, 1941 during the Japanese air raid that struck that facility and others on Oahu.
3.  While under heavy machine gun fire, chief aviation ordnanceman Finn manned a .50-caliber machinegun mounted on an instruction stand in a completely exposed section of the parking ramp.  Painfully wounded multiple times, he had to be convinced to leave his post.  After receiving first aid treatment, he overcame the severe pain of his injuries and returned to the squadron area to supervise the rearming of returning planes. 
4. DDG 113 will be capable of engaging in air, surface and subsurface battles simultaneously and will contain a myriad of offensive and defensive weapons designed to support maritime warfare including Integrated Air and Missile Defense capabilities.
5. DDG 113 will be equipped with the Navy’s Aegis Combat System, the world’s foremost integrated naval weapons system.
6. At age 100, Finn was the oldest surviving recipient of the nation’s highest medal for valor and the only recipient still alive among those who received the medal for actions during the attack of Dec. 7, 1941.
PEARL HARBOR, Hawaii (Dec. 12, 2007)  Medal of Honor recipient Lt. John Finn (Ret.) pays his respects to the Sailors and Marines killed aboard USS Arizona during the Dec. 7, 1941 attack on Pearl Harbor.
PEARL HARBOR, Hawaii (Dec. 12, 2007) Medal of Honor recipient Lt. John Finn (Ret.) pays his respects to the Sailors and Marines killed aboard USS Arizona during the Dec. 7, 1941 attack on Pearl Harbor.
 7. In June 1942, Finn was temporarily commissioned as an Ensign, rising in rank to Lieutenant two years later.
8.  USS John Finn will be able to conduct a variety of operations, from peacetime presence and crisis management to sea control and power projection.
9. John William Finn passed away on May 27, 2010.
10. As part of the DDG 51 Flight IIA ships, Finn will provide increased capabilities over previous flights of Arleigh Burke destroyers, including advances in anti-submarine warfare, command and control, and anti-surface warfare.
John Finn DDG 113 590 px

By starting with DDG 51 and going consecutively through #119, consider each subsequent build an improvement over the prior number. The US Navy is on version #119. Version #51 is retrofitted on a decade to decade progression until its retirement.

Flight IIA: Restart
John FinnDDG-113Ingalls Shipbuilding28 March 2015[67]Launched
Ralph JohnsonDDG-114Ingalls ShipbuildingKeel laid[68]
Rafael PeraltaDDG-115Bath Iron WorksKeel laid[69]
Flight IIA: Technology Insertion
Thomas HudnerDDG-116Bath Iron WorksKeel Laid
Paul IgnatiusDDG-117Ingalls ShipbuildingKeel Laid[70]
Daniel InouyeDDG-118Bath Iron WorksKeel Laid[71]
Delbert D. BlackDDG-119Ingalls ShipbuildingKeel Laid[72]
DDG-120Bath Iron WorksContract awarded (MYP)
DDG-121Ingalls ShipbuildingContract awarded (MYP)
DDG-122Bath Iron WorksContract awarded (MYP)
DDG-123Ingalls ShipbuildingContract awarded (MYP)
Flight III
DDG-124Bath Iron WorksContract awarded (MYP)
DDG-125Ingalls ShipbuildingContract awarded (MYP)
DDG-126Bath Iron WorksContract awarded (MYP
Wikipedia Chart

At left, the hull of the second ship in the class, the Michael Monsoor (DDG 1001), is coming together. At right is the Rafael Peralta (DDG 115), first of the latest batch of Arleigh Burke DDG 51-class destroyers under construction at Bath. Similar ships are built in Mississippi at Ingalls Shipbuilding.

At left, the hull of the Michael Monsoor (DDG 1001), second ship in the class, is coming together. At right is the Rafael Peralta (DDG 115), first of the latest batch of Arleigh Burke DDG 51-class destroyers under construction at Bath. Similar ships are built in Mississippi at Ingalls Shipbuilding.

The DDG51 Realm of Battle is "pretty" (nasty)
Aegis-class destroyer USS Hopper (DDG-70) launches a standard missile (SM) 3 Blk IA during a 2009 exercise. US Navy Photo
Aegis-class destroyer USS Hopper (DDG-70) launches a standard missile (SM) 3 Blk IA during a 2009 exercise. US Navy Photo

So, DDG119 should be something special! However, the DDG 1000 is something featured on Winging It, because it’s so advanced like the 787, it can't bear comparison with  "another" Navy, because even comparing a status quo DDG family member is even incomparable with the DDG1000. The stuff DDG1000 has, won't exist on the newest DDG119. 

In fact some other temperamental Navy's across the oceanic broad expanse, may attempt to keep up with the US Navy's Delbert D. Black DDG119 just laid keel. The pivot to the Orient is in a ship yard near you.

Its DDG 119 Keel Laying Day, about July 21, 2015 
Delbert D. Black (DDG 119) Start Fab

Below: DDG 115 Artists Rendering

What was said About the DDG115, at its Ceremonial  Start: "“While this keel-laying marks an important step in our construction process, we are focused today in welcoming the Peralta as the newest members of our Bath Iron Works family. Mrs. Peralta, Karen and Icela, we are honored to have you here, and stand in deep appreciation of your son and brother’s ultimate service to our nation,” Kenyon said. “Over the coming months, we will continue to build the Rafael Peralta with knowledge and expertise honed over the decades. She will be a true and steady vessel and will reflect the spirit of her namesake.”

The DDG 119 will advance the "Peralta, DDG115" by tweaking lessons learned during Peralta's build process, and as it installs the newest proven advances in military systems since earlier DDG51. The DDG119 will rule for another 20 years. It's a "concurrency only within its step progression" coming from prior builds, and developed by time for its systems. It's not a concurrency testing model sitting confused during an ongoing ship build. Its pure deep Blue water, even while the Navy's builder's floats another stop loss program. Such as the DDG1000 series, failed attempt from its own continuous upgrading and military do-overs imposed. Its continuous money flow for spending has now stopped on with this new DDG ship series at three ships.

Note: the DDG1000 series is a long term 4.6 Billion dollar build scope with a stop loss impounding it. It then becomes a true Taxpayer money pit not serving the nation well at this time! The Zumwalt Cookie cutter productions are just another ten years away for the DDG1000 family, at which time the Arleigh-Burke, becomes more of a needed spear handle than the Spear Point, in its assigned warfare battle scope, The Zumwalt class, also becomes the next "Pretty (nasty)".

Always improving model is admirable, and should be "always part of the plan", from a ship's dock cradle to the scrap-metal program. However, "the always tinkering model" is also madness in the shop. A war starts at 3:00 AM, and not the three years down the road of tinkering, as allowed under "always tinkering" program of concurrency, or after its sea trial completion with a, "it's still unreliable underneath its tinkering rating”. War is today and yesterday, not when a DDG model could be readied for combat during the next eighteen months of war? The DDG51's is ready at this time and its still very good, and it's comfortably the best today, and ready for Yesterday around the world!

This is why the Navy wisely steps back into the Arleigh -Burke era with the newest proven systems. Where 99% of the world's nations can't match it. It's keeping smartly ahead of all potential adversarial Navies. The current DDG has some lethal secrets yet deployed.  

Here is what the Navy Hints at on the next 14 DDG51's, #113-#123. While going further with its Flight III block point build found in #124-#126, as currently funded. 

"The Navy plans to introduce the first DDG 51 Flight III on the second ship in FY 2016. Once Flight III requirements are approved, the new baseline will be implemented as an engineering change proposal. It is anticipated that the Flight III design will replace 

  • the Aegis AN/SPY-1D radar with the Air and Missile Defense Radar (AMDR),
  • and provide for more electrical power and cooling capacity, 
  • providing the next generation of integrated air and missile defense 
  • and joint battle space awareness."

After Shock Section:

Arleigh Burke-class guided missile destroyer (DDG-51) under construction. HII Photo

"Ingalls Shipbuilding launched the first destroyer in four years at its yard in Pascagoula, Miss., on Saturday, marking the return of the ship class after being stopped and then restarted.
John Finn (DDG-113) is the 63rd Arleigh Burke-class (DDG-51) destroyer and the first of the Flight IIA restart ships being built by Huntington Ingalls Industries (HII) and General Dynamics Bath Iron Works (BIW).
“This is the first DDG-51 class ship to launch in almost four years, and we’re both proud and excited with the progress the program is making,” DDG-51 program manager Capt. Mark Vandroff said in a Navy statement.
“I look forward to John Finn joining the fleet and the other ships of her class to continue in the legacy of success that is the Arleigh Burke destroyer.”
"The Navy decided in July 2008 to restart the DDG-51 production line and limit the newer DDG-1000 ship class to only three ships. As a Flight IIA destroyer, the ship will be outfitted with the Aegis Combat System and engage in air, undersea and surface warfare and ballistic missile defense. Beginning in Fiscal Year 2016, the Navy will upgrade the ships to a Flight III configuration, which will include the Air and Missile Defense Radar (AMDR).
The Navy needs this ship, even if it is in order to pull one DDG51, into an off duty status for upgrading it, making it advanced just like this new John Finn will soon sail with the newest advanced installations.  

Thursday, July 23, 2015

What Does 767 FEDex Order Do For Boeing's 767 Military Industrial Complex

Fedex came into a 50 plus 50 plus and another 56 on order this week. All of them, 767's, not yet built.

  • 56 Ordered originally not yet built
  • 50 just ordered not yet built
  • 50 on option if it wants more at a frozen price.
In total 156 potential 767 has just fueled Boeing's industrial complex. It will take another fifteen years of 767 production just on the Fedex side of production. In the meantime 179 KC-46 tankers are yet to be built by Boeing, you know it as the frame from the 767 with 787 avionics. I would think the next 767's for Fedex will have 787 Avionics.

Another point in all this excitement, is time itself. Give the military another ten years, and they could come up with additional uses on the 767 frame. A dedicated cargo hauler, troop hauler, or a battlefield command center. Not only including installing AWACS capability it could be an airborne drone management and command center. The 767 could launch 100 missiles during a conflict before having to reload. Is could be a missile magazine in the sky with 10 circular missile magazines auto loading and sending ten guided missiles per missile magazine out of  a belly shooter from the 767 frame.  All this is done at Mach .85 or about a closing speed of 550 NM/hr while shooting a 2,000 mile an hour missiles at any and every target found within a hundred mile circle from the 767.

In this military fantasy there would be a crew on deck at multiple display stations or on the ground signaling the flying 767 via satellite, executing target guidance. Or launching flying drones to its field of operation during the duration of a mission. Drone recovery could be both at pre positioned sea bases or land base. The high ground launch extends the drone efficiency 

I am only just getting started with 767 ideas since it will keep producing until 2030. The military should warm up its "idea people too". The 767 will carry what is needed even if re-engined in the next reiteration of tanker platform, as it becomes a purpose built heavy duty support platform that can fly 5,000 NM.  It could be the first off shore missile bomber built.

The 767 is hard core.

Scoot Has Started Its Own Purge Line With The 787

Clear from Boeing's 787 Surge line out of Everett's Mega Building, Scoot Airlines has started its own Purge Line. It is administering a holistic approach, by replacing each of its family of existing larger aircraft with an exclusivity for Boeing 787 models. They are taking in one 787 a month since the first of the year in 2015. July, Scoot received its first 787-8, the smaller of the two currently available Boeing models. It has already received five 787-9's.

Image result for scoot 787-8

The last 777-200  Scoot operates will go away by late August 2015, while more 787 are on the way. The surge/purge will result in a total of Ten 787-9's, and Ten 787-8's, as the company expands by becoming an all 787 fleet of twenty. This purging of the old inventory, and its 787 expansion will represent a first with what the 787 model can do for a business plan in total. Boeing's marketing talking points can use Scoot's 2016 financial results, having a true picture what the all 787 fleet does to an Airline's Bottom line.

Budget Airlines beware, Scoot has your number.

Wednesday, July 22, 2015

Like The 787, The DDG Zumwalt Has Teething Problems

The DDG 1000 stalls "the works" or as insiders call it,  "Teething woes". Sounds familiar to Boeing's own transition from 20th century to 21st century technology, as it had processed with the 787 project. The 787 "Teething Woes" were a headline feature from 2007-2013. A five year maturation process before customers exhaled. The Zumwalt is now welcomed into the BIW fold of "Teething Woes" and Boeing's exclusive club.  

BIW Lauches its first DDG-1000 destroyer April 12, 2014.

While Bath Iron Works remains tasked with some 20th century Burke class Destroyers, or the DDG51's and above group, it is also bogged down with the Zumwalt class destroyer as pictured. A whole new evolution of technology is stuffed on-board the Zumwalt. This dock side appearance represents thousands of resources expended on its existence. The BIW was awarded the bid for many more, then it was cut by the Navy, down to three of its types, as costs rose on the project. BIW was hooked and landed by the Navy. DOD made a pivot towards the 1990's Arleigh Burke Class destroyer, back filling its ranks and sustaining the Navy's fleet renewal program.

Since BIW immense resources are tied to a changed Zumwalt program, which was recently dead-ended, it finds itself losing out to competitors from Mississippi during the Zumwalt gridlock. The Navy is a fickle mistress with flighty aspirations.

BIW thought all along, it was the premier ship builder worthy of the Zumwalt assignment. The too pricey project was served by Congressional slights in a down size resolution. The Mississippi ship builders gleefully picks up where BIW stalled with the Navy's closure on the Zumwalt three.


"Our shipbuilders are very excited about beginning the fabrication process of another DDG 51 destroyer, especially one named after the first Master Chief Petty Officer of the Navy," said George Nungesser, Ingalls' DDG 51 program manager. "Serial production provides the most effective and efficient way to build ships, and this is our fourth ship started in three years." 

Ima Black reacts after starting a plasma cutter machine at Ingalls Shipbuilding, officially beginning construction of the Arleigh Burke-class destroyer Delbert D. Black (DDG 119), which is named in honor of her late husband. Photo by Andrew Young/Huntington Ingalls Industries.

Tuesday, July 21, 2015

Hot Link Boeing $9.97 Billion-US 767 Order: Confirmed By Fedex

Image result for Fire cracker explosion

Boeing 2nd Quarter, EVA Airways plans to buy 24 to 26 Boeing 787 jets

"Boeing Co posts second-quarter results. The company on Friday said it will take a $536 million after-tax charge related to its aerial refueling tanker for the U.S. Air Force. The commercial aircraft business will still show strong underlying growth, after delivering 381 commercial jets in the first half, more than half of its annual target of 750-755 jets. The company also announced that EVA Airways plans to buy 24 to 26 Boeing 787 jets for around $65 billion at listed price, with delivery slated for 2018 to 2019."

Quarterly reports sometimes are all about notations and not the rock hard crunched numbers. The Taiwan Air, EVA, considers 787 in a Boeing purchase footnote, and it comes at time as if it were a smoothing pink solution for Boeing's 787 order book. It’s an indication of Boeing's relentless sales pursuit of note. EVA and 787 are considered a mutually exclusive impression by most people not familiar with Taiwan. However, this drawing board notion becomes interesting, since EVA hauls passengers in and from the region to North America.

WSJ 24/7: 2ND QUARTER pre announcement speculations. "Boeing also may say something about its 777 orders. The company announced a new order Tuesday morning for four of the freighter versions of the plane from Taiwanese airline EVA Air. The company needs to add about 40 to 60 orders annually for the current version of the 777 in order to keep the production line running. The new version of the plane, the 777X, is not scheduled for first deliveries to customers until 2020. 

The second quarter for Boeing becomes a much needed second quarter exhale during 2015. All-in-all, Boeing financials seems to reflect its business churning on several fronts from military contracts, freight orders, and commercial intrigue. This comes as its on the cusp of making its financial goals. Its vulnerability is in the cash flow section as mentioned, since it is a finite positive condition. Boeing keeps using the positive flow propping up its development costs from its production generating the surplus cash, all the while, sustaining its positive position. Boeing can use its cash infusions, applied to its concurrent programs, but at some point cash can become a finite source for pushing its frames to customers. Even though Boeing pushes out the next Boeing 787, it currently costs more than the delivered price. The economic 787 engine has its limits for its cash position, as analysed in the second quarter 2015 report.

Boeing knows this too well and is striving to turn the 787 production efficiency into a financial efficiency by this year's end. It’s well positioned itself by  the end of the second quarter for a positive production condition, only when delivering its 787 as it begins gaining more cash flow above its production cost, even though for a long time it took more cash to build the 787 than it received at delivery. That condition of positive cash will be an announced 2015 benchmark for year’s end. Once more, Boeing claims the build at delivery will have an actual revenue value above  and ahead of the production cost of goods sold. Currently cash is sourced from: stock sales/price, bonds, sales transactions, and debt. 

The Cash position on the 787 by 2016 will stand on its productions shoulders. Cash position vs COGS for every unit delivered.
  • 737 NG +
  • 747-8 +
  • 777 300 ER +
  • 787 - (until January 2016)
  • 737 Max (Cash flowing into the program is considered an investment until its first deliveries)
  • 777X (same status as the Max Program)
Cash will become a scarce commodity for programs unless the 787 turns a corner in early 2016 when Boeing builds each 787 for less than what the customers pay for it.

Monday, July 20, 2015

Part III: Key Aerial Refueling Capabilities Should Be Demonstrated Prior to the Production Decision

Part III Winging IT: The GAO report is an auditor's delight. The decision point comes in October for all players scripted in this immense saga of the KC-46 Tanker program. Aviation Class take note; Read the GAO report before raising your hand and then write a 500 word essay on what it actually means for Boeing and its KC-46 problems. 

Winging It Findings and Recommendation:

The GAO Report Link April 2015 Your reading assignment "should be" completed before making comments.

Having read through it, I came to several conclusions, the GAO audit was cautiously crafting warnings, while sounding calm about the whole matter. Cost to the government are below expectations. Cost excessive conditions for Boeing, isn’t a GAO’s problem.

However, the Taxpayer and aviation junkies should know this, Boeing has its hands full on this project, since it’s a fixed cost on Boeing’s shoulders weighted down by the specter of cost over-run.

Secondly, all the issues not delved into explicitly by the GAO remains a dangerous tight rope for Boeing. Parts in the fueling area haven’t reached a state of completeness or otherwise known as engineering open problems are running in the background, as exampled with some fuel delivery systems, remaining on the design table renderings.

What does that mean to Boeing? Anything on the design table is costing Boeing until completed and is not ready for gaining a full Air Force Validation or a demonstration of its operational competency in front of the government compliance teams.

Let’s cut to the chase: The GAO cheat sheet

The program is also working to resolve other development challenges that pose additional schedule risk to the flight test pace needed to demonstrate aerial refueling capabilities, such as late delivery of parts, software defects, and assumptions related to flight test cycle times. These challenges could result in additional schedule delays. The following is a summary of these development challenges and any steps Boeing is taking to address them."

Findings points: By Government Accountability Auditors

Officials of GAO's Corporation Audits Division, 1949.

Ted Westfall is fourth from the left.

• Late delivery of parts for aircraft final assembly: Boeing’s suppliers are having difficulties delivering several key aerial refueling parts. For example, the telescope actuator, which extends and retracts the boom, needs to be redesigned in order to work properly. A redesigned telescope actuator is tentatively scheduled to be delivered in April 2015, enabling the boom that will be used to support the July/August 2015 demonstration flights to be delivered two weeks prior to its June 2015 need date. In another example, the supplier of the wing aerial refueling pod and center-line drogue system is experiencing delays in delivering these subsystems due to design and manufacturing issues with a number of parts. To stay within schedule targets, Boeing and the supplier have developed a plan to complete parts qualification testing and safety of flight testing in parallel. Program officials have said that one of the risks of this parallel approach is that discoveries during safety of flight testing could drive design changes that would then require qualification testing to be re-done. Boeing has sent engineers and other staff to help the aerial refueling suppliers overcome these challenges, and held regular management meetings to stay abreast of the latest developments.

9 GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-14-340SP (Washington, D.C.: Mar. 31, 2014). Page 15 GAO-15-308 KC-46 Tanker Aircraft 

• Defects in delivered software: Boeing and the program office consider the resolution of software problems as one of the program’s top risks. According to program documentation, open problem reports may have peaked in December 2014, at roughly 780 priority problem reports. Boeing fixed 170 of these problems over the past few months. As of March 2015, however, a little over 600 problem reports were still not resolved, including several hundred that must be addressed prior to the KC-46 first flight, currently planned for June 2015. Many of these problems are related to the military subsystems and either adversely affect the accomplishment of an essential operational or test capability or increase the project’s technical, cost, or schedule risk—and no workaround solution is known. Additional problems may be identified as Boeing integrates the last two software modules related to aerial refueling. Boeing expects to fully integrate these software modules in April 2015, about 10 months later than originally planned.

• Flight test cycle time assumptions: The program may not be able to meet the established time frames, or cycle times for flight testing. Both Boeing and the program office regard maintaining the planned flight test rate of 65 hours per month for the 767-2C aircraft and 50 hours per month for the KC-46 aircraft’s military tests as one of the program’s greatest risks. DOD test organizations have shown that the planned military flight test rate is more aggressive than other programs have demonstrated historically.

10 10 According to the Director of Operational Test and Evaluation’s FY 2011 Annual Report, military testing experience with aircraft including the P-8, C-17, C-130J, C-27, and C-5 reflects fewer than 30 flight hours per aircraft per month on average.

·      The Director of Operational Test and Evaluation also reported that the test schedule does not include sufficient time to address deficiencies discovered during tests. Despite these concerns, Boeing predicts that it can achieve the flight test rates as it has local maintenance and engineering support and control over the flight test priorities as testing is being conducted at Boeing facilities. Deviations from its proposed flight test cycle times could pose risk to the program’s ability to capture the knowledge necessary to hold the low-rate production decision in October 2015. 

Page 16 GAO-15-308 KC-46 Tanker Aircraft Boeing provided an updated schedule to the program office in January 2015 that may address some of the risks we highlighted. 

·      As part of the updated test plan, the program office and Boeing also revised their approach to conducting operational test and receiver aircraft certification. The new approach re-phases some receiver aircraft certification and shifts test execution responsibility for 10 receiver aircraft from Boeing to the government. This approach may result in adding additional risk to the program should the Air Force fail to complete the testing on time. The new schedule and associated contract modifications are expected to be approved by early 2015. Program officials stated that they are reviewing the information to determine whether they need to further adjust milestone dates, including the low-rate production decision and the start of operational test. That analysis has not yet been completed.

Photo - GAO's European Office survey team, 1952

The GAO survey team that studied the feasibility of opening an office in Europe in 1952 Note: Ted Westfall is no longer fourth from Left and is missing from the European Junket. The stiffs were not included in photo.

...and you thought I would feature a KC-46 Tanker Picture. It’s always been about auditing and not aviation! 

The Marquis of Queensbury rules says these are friendly slaps of encouragement administered to Boeing. The real rubber meets the pavement event, arrives during October 2015, when it is determines if Boeing can actually start its slow build rate for the KC-46. If it does not gain approval in October 2015 for an initial build rate, it means it did not solve many of the critical problems found within the program during the interim time, as suggested with the GAO summary report.  

Part I: Boeing KC-46 Takes Write-off for stock holders, Fixes found during phase 1.

The news is when "another GAO interim report is due", as it comes before the decision to proceed is granted for Boeing. This is an important news event for the KC-46 program, which all aviation outlets should be tuned-into, as part of the running up to the "October’s Build Status" announcement. 

Part II: Develop, Determine and Deliver The KC-46 Phase II

With the recent write-off of $536 Million on KC-46 Tanker (767), Boeing has moved into phase II or what I call it the "Determination" Phase II through its flight validations. All ground tested systems are now loaded up after all its quirky non-conforming items have been ironed out. The ground development phase should be whole at this time. The main mission is refueling and Boeing just wrote the corporate check on the fuel management solutions found during phase 1. All other systems are ancillary to that main mission. The defensive systems, multi role capability and electronic warfare elements incorporated into the frame are generally tested, and applied through other aviation platforms.  The over-all risks of the KC-46 development aircraft are generally risk averse at this time. 

asset image

Boeing Defense Space and Security 
The door remains wedged open a crack for any unforeseen risk going into phase II "Determinations Phase", or otherwise its avionic realm for validation. It has to fly integrating all its systems under operational stresses. The last minute tweaks will run into the future and beyond, since it’s the always improving model for the military.  Systems integration should have been run and completed, during the last eighteen months of this project. The radar, communications and computer management all should have worked together while functioning as a simulation in some Boeing building used for applying the KC-46 operational capability. The complete integrated management systems are now installed on the first fully loaded test frame, awaiting its initial flight testing, validating its over-all integration of its systems and avionics in flight. The KC-46 battle promise and bid proposition, must come to fruition, since Boeing was awarded the KC-46 Tanker bid now rest with Boeing's reputation on the "flight line". 

July 20, 2015 stock Analysis Quotation: From "Financial News" . co . uk

"Increased company investment in the program primarily is being driven by required rework on the airplane´s integrated fuel system that was identified as Boeing prepared for and conducted test and verification of that system during the second quarter. The added investment will support the engineering redesign, manufacturing retrofit and qualification and certification of the fuel system changes, and the conclusion of ground and flight testing on the program. 

Paraphrased by Winging IT Below : continues the quote...

The KC-46 fuel system is a complex, integrated system that provides fuel to the aircraft´s engines and advanced capabilities to refuel other aircraft in flight. It is also the final major system road block under scrutiny as it is also the primary objective for the project during the KC-46 development program. Non-fuel related system qualification testing is now more than 90 percent complete, and the overall ground and flight test program continues to progress melding together both environments in a test framework. Looking at initial airworthiness flight tests successfully completed in the second quarter, the KC-46 is almost ready to come out and play for Boeing.

Is Boeing nervous? A certain degree of uncertainty is hidden by thinkers at Boeing, and its subcontractors who think, "We’ve got this covered!" The worst case scenario is nothing works during the first fully implemented/loaded aircraft. The most optimal experience is everything really works fantastic. Somewhere between these two bookend outcomes, is the truth. Boeing believes the outcome will always need improvement to some degree. If in fact by proving a systems concept, it now enables the contractor or Boeing to go further from its early success with testing. They are now assured of the next progression step for the military. The "what we've learned" curve starts climbing rapidly. The military could become giddy over tests results and order additional add-ons based on flight tests. Or Boeing could bog down in the developmental swamp of despair, since it’s on Boeing head to make it right with the military. The latter is unlikely since the 767 is a marvelous flying machine for the last 30 years. Fueling was always the crazy card not yet played. After-all fueling is its main mission for multiple customers at the same time. Freight a second mission Boeing has in spades. Defensive systems is always a works-in-progress venture. By the time the KC-46 serves one year in the field, new updates to its capabilities will be on the way. The battle field doesn't stand still nor do its adversaries.

Getting it right in flight testing with a fully implemented KC-46 tanker is the big show. It means so much for the home team awardee and its military. Anything short of meets expectations is a failure for the procurement process and Boeing. Exceeds expectation is truly a time to celebrate both the contractor and process was absolutely correct.

In order for Boeing to exceed expectations it must accomplish all its talking points found in the bid process. It must deliver its vision for the KC-46. The range, the systems and its capability must be spot on. The fueling boom (s) must work right out of the wrapper, when installed and as advertised. The convertibility to medical or evacuation missions must be flawless. In all, the concept actually works well and the military can go forward with all its lessons learned.

If Boeing meets expectations, Boeing will need spending more money than what it intended for the project. It will fix everything not meeting expectation during tests to a final solution for meeting expectations. It will cost them.

However, a does not meet expectation conclusion will devastate the program and the bid process. Everybody has skin in the game. It meant, Boeing could not get one or more features working as required. If the fueling booms need extensive redesign or even additional adjustment beyond original expectations, it is a failure for the contractors, and will cost them significant money. If the complex fueling software codes are in a severe rewrite mode, it also becomes a program failure. If the KC-46 has an inadequate mission capability for its ancillary purposes, such as fright, troops or medical missions it becomes a does not meet expectations.  Boeing got beyond all these outcomes in phase I. Risk is now low for the program. The GAO wants a proof of concept before production starts for the delivery phase. It is a SOP compliance request and gets the GAO off the hook if production models are flawed. (See link at bottom of page for full GAO report)
Having any low rating, compromises all of the acquisition processes, contractor, and military, where it ends up loosing, and most of all this nation looses. 

Winging Surplus Item: It's Free therefore surplus if you click on the below link.

GAO Report KC-46 April, 2015