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.