Monday, January 2, 2017

The 787 2016 Before Boeing Numbers Recap

The Pre Boeing 787-2016 Numbers Analysis is a daunting task when not knowing what cards Boeing may hold, since it has not announced anything but the Delta cancellation of 18  Dreamliners during the last month. Those were 787-8's and it hurt the backlog and order book. However, they is plenty of good new on the horizon for the order category. There are several large 787 orders hanging in the market place one of which may come from Emirates and Tim Clark. That announcement should come in the year 2017. There are some additional orders from the Chinese market which have yet to be confirm but are hanging on with MOU's.

The chart below (Fig. 1) main thing is the strong production year of 137 Dreamliners for 2016. Looking at the 694 in backlog illustrates a twofold impact. If a customer orders a Boeing wide body it could receive it before an Airbus placed order. Secondly, Boeing demonstrates a resiliency in the market place outpacing Airbus over the last several years over Airbus. Airbus since the beginning of 2013 has booked only a net of 162 A-350's. Boeing has booked a net 382 of its 787 family of aircraft.

This represent a greater than 2-1 booking pace over Airbus even long after it had announced selling its wide body.  




Fig. 1


Fig. 2, represents net numbers starting in 2012, marking the beginning of the delivery cycle for the 787 aircraft. Noting the order to delivery comparison over this time period shows almost a 1-1 book to bill rate. Five hundred 787's are billed and 427 are booked, returning a .85 book to bill rate. Ideal is a ratio of 1 after the backlog has been established. When first entering the market, the desirable rate should be well above the number 1 as production has not yet started until years later. In Boeing's case the .85 ratio is a measure at full production while having a healthy backlog. Boeing with a few great years could maintain a 1-1 ratio is it takes on another 150 ordered 787's in the next several years. That would be a Boeing sales goal.

Fig. 2

The ninety day moving average is a production efficiency number. Guidance was established in the first quarter of 2016 at 12 per month. The month of January 2016 only delivered seven 787's and it reached 12 a month by March 2016. However, fourth quarter 2016 only delivered 11 a month during this time period. Boeing also exceeded 12 a month pace during the 2nd and 3rd quarters of 2016.

Fig. 3


The Year Over year chart below demonstrates a steady growth of the program with predictable changes in both delivery and order dynamics. The latter being typically inconsistent.


Fig. 4


Fig. 5

Fig. 6


Fig. 7