Gorilla Buying Blocks Scramble Airline Planners

Airline planners and airline strategist have two camps. The planners are tasked with fitting in a Gorilla buy blocks of 100 or more aircraft ordered, when its current fleet size is half that amount. The first 50 ordered are possibly destined for fleet renewal, and the second 50 are destined for fleet expansion coming from the airline's Gorilla strategist. The purpose of a big order is twofold. One is for a big equipment order, buying at discount. The other is for leveraging airline growth with that buy. The second class of member are the planners taking the form of "chief", GM, or even a VP. These types must find a slot for aircraft purchased beyond its current fleet configuration. They are called the Guerrillas. The English language can confuse me at times, and that's a problem since it’s my main dialect, English!

Here's what happens when the strategist and manager collide. The planner is in a clandestine corporate camp plotting the execution of the strategist delusion of leveraged grandeur. It's Gorilla against Guerrilla. It was reported today on the CAPA News with the following summary:

CAPA: 7/11/2015

"Norwegian has admitted that it may not be able to use all of its planned aircraft and Wizz Air's order now provides an opportunity to review the data on the number, and types, of narrow bodies on order in Europe. Narrow body deliveries to Europe look set to rise, at a time of rising global deliveries. Success is not guaranteed for all. Meanwhile the expanding role of LCCs in both leisure and business markets continues to undermine the positions of legacy airlines on short haul routes.

Both Norwegian and Wizz-Air must turn to its Guerrilla team to find slots for all its leverage buys it had confirmed from its Gorilla actions. They must expand its upcoming fleet in advance of arrival with its current over-stretched equipment inventory. The Gorillas must say, "make it so #2", in true Star Trek tradition. The Guerrilla team must keep expanding routes with current older equipment when a route comes available, in its preparation for an overabundance of incoming newly framed bodies.  

Airplane wars is really complex, and it requires a modicum of luck, timing and performance. If all three are missing it could be disastrous for any airline. Stock holders could then expect to shoot its Gorillas who leveraged its buys, and then replace its guerrillas who did not manage the transition from a smaller to bigger fleet structure.

Iran Wishes To unhook The Airplane Buying Lynch Pin After Nuke Agreement.

To be honest, to be fair, and to be logical is appropriate phase Iran needs to go through when buying a re-purposed inventory before going all-in with new aircraft. The Nuke talks need to succeed for both Europe and North America, before even looking at an order book. If all goes well during a treaty signing for concerned factions then its back to catching up with the travel industry. Brand new equipment for Iran would be a disaster after flying 40-year-old aircraft. It would be as if everyone in Cuba gets a hybrid car without an owners manual.

The Iran talks will do more than just stop insane aspirations for nuking the world on religious principals. It will turn a trade conduit into a flood of Hybrid airplanes totally different than its 40 years old 747's it has in its fleet. Iran will need to develop its airplane infrastructure up to the 787 level of operation before buying that class of airplane. Even the A-350 would complicate Iranian operations to extent of missing some operational points and flying policy for operations. It would be better if they would order the 767 or A-330's for fleet renewal in the first five years and learn how to efficiently operate a solid standard, before leaping at the all new formats found in the duopoly's newest aircraft. Buying used is a high priority when renewing its commercial fleet.

However, pride once again influences decisions. A dual approach for Iran's new found purchasing access should not be hurried nor should it be an archaic expression for quality. They won't go old as in well just keeping old airplanes. They have an opportunity to buy recently replaced equipment from other airlines which has more life and value than what Iran needs for a fleet in the near term. I see the country seeking a middle ground in the purchase arena. Buying what it needs from used inventory for a fast start-up, and then placing orders at the same time anticipating they are at the back of the delivery line for the latest technology aircraft. Iran would expect to catch-up its operations during its transition from 1970's to 2015 during the next 10 years.

Iran is in a good place with so much used airplane inventory available for them to acquire at bargain prices where it may build its personnel up with relatively new equipment while waiting for Aircraft like the Max or NEO. It all depends on this Nuke negotiation currently under consideration. Iran's future is in its own hands at this time.

Holy Take-Off Batman, Another Fifty 767 300F For Boeing Is Hanging: NOW CONFIRMED (Updated)!!!!

Yes, you heard it hear first if you are an astute reader. Boeing is in talks with FedEx for 50 767 Freight types. The 767 has long been a FedEx stalwart for moving freight 24/7. It can hold tons and fly reliably as a FedEx package comes to your door. Because that package probably rode in a 767. Talks are ongoing at this time suggesting an announcement is in the offing.

UPDATED ADDITION INCLUDES THE BELOW Paragraph and ENDING ABOVE above the 767 photo:

Global Post Link for full article:

That's 50 confirmed 767F's and plus an additional 50 options on the 767 in the Fedex order play, Batman.

"SINGAPORE (Reuters) - FedEx Corp <FDX.N>, the world's largest cargo firm, has signed a deal to buy 50 additional Boeing Co <BA.N> 767-300 freighters in the biggest order ever for the plane, allowing the aircraft maker to extend its production line well into the next decade.

The deal, announced in a statement by the U.S. cargo operator, includes options for another 50 767Fs and is worth $9.97 billion at list prices. Customers typically receive an undisclosed discount off the list prices.

FedEx said the aircraft will be delivered by Boeing for its FedEx Express arm over the fiscal years 2018-2023. The latest deal brings FedEx's firm orders for 767Fs to 106 and extends the company's drive to modernize its fleet."

I will now defer to the real report: 

Boeing Co Might Beat Airbus Group If It Signs FedEx Corporation Order Of 50 Jets

Remember these important facts about FedEx:

• 767 trained FedEx mechanics, pilots and ground support
• 767 reliability
• Boeing's need for a 767 build process as it develops the KC-46 program
• FedEx business model built around its Boeing equipment
• A FedEx sweet price from Boeing

Fifty, 767 sounds like a fleet renewal and expansion jump, as freight market has begun a surge since freight growth continued being neutral during the last five years. The FedEx order can't come soon enough for either Boeing or FedEx. Boeing will sign the FedEx order request with a few caveat edits FedEx can live with.

Here are important “Bidness ETC” quotes:

"Boeing Co (NYSE:BA) is currently lagging in booking orders of commercial jets compared to rival Airbus Group (OTCMKTS:EADSY). However Boeing announced recently that it has received an order of 50 single-aisle 737 jets from China Easters Corp valued at approximately $4.6 billion.

Boeing also announced that it was in talks with FedEx Corporation (NYSE:FDX) to sign another deal of around 50 767 freighters valued at approximately $10 billion. If Boeing receives FedEx’s order of 50 jets it would beat Airbus in booking most commercial jet orders. FedEx operates a fleet of 378 jets including 102 Boeing 757-300s, 23 Boeing 767-300s with an additional 37 jets on pending order."

There you have it. A Boeing second half performance is starting to gain some steam. Not including some 787 yet to be announced, there will be some more surprises coming forward much to Boeing's style and its liking, as they remark, "I love it when a plan(e) comes together"!

Seatability: The New Parking Spot for Airline Customers

Winging It Definition: Seatability: “A process of seating more passengers per flight through attracting passengers through lower prices and gaining higher profits. This new describing noun is seatability, and airlines are filling more seats per aircraft with this endeavor for higher profits. The industry is trying to capture the single aisle profits similar to what Southwest Airlines has done in North America.

24/7 Wall Street Quote: "Parker’s remarks in May came in response to a challenge from Southwest Airlines Co. (NYSE: LUV), which had just changed its order for 31 Boeing 737-700s to an equal number of 737-800s, adding 32 more seats per plane. Southwest said at the time that it expects capacity growth of up to 8% this year. "

Cause and effect of "Seatability" Prices: Everyone can Fly.

Typically nominal life style people won't afford airline tickets unless it is necessary for their lives to do so.  Flying is necessary investment for most people. The market hasn't been fully tapped, only with Southwest Airlines, since it has made its business model upon this market segment. The vast majority of North Americans can only fly to weddings, funerals and graduations. Dropping prices adds vacations, business, and maybe a Vegas trip. Legacy carriers miss much of this market from higher ticket prices. American Airlines has begun a pivot towards this market segment, as it sees Southwest's profitability model a doable advantage for its own overarching global scheduling. American Airlines wants to play too, in the continents travel sandbox.

"In late May, American Airlines Group Inc. (NASDAQ: AAL) CEO Doug Parker told Bloomberg News that his company would compete “aggressively” with discount carriers by adding more seats and cutting fares to keep flights full. Friday morning American said it would delay delivery of five new planes from Boeing Co. (NYSE: BA) and 35 new planes from Airbus. 

Aside from higher fuel costs, there is nothing that affects an airline’s profitability more than flying empty seats around. Analysts almost unanimously target capacity as a profit signal, and adding capacity, especially at the legacy carriers, needs to be accompanied by increased routes in order to maintain profit levels. Friday’s announcement will be greeted with cheers from airline analysts." WS 24/7

The above description of American Airline order pause, signals it is maximizing it profitability and is adjusting its delivery timing while syncing with financials flows it has strained, during the last few years. It is increasing its "Seatability". By using a delay in delivery suggests that operational optimization of sources and uses is the action.  It is not to be read as a weakness, as most news report airline failures and a forthcoming delivery delay. American has indeed signaled it is in an opportunity zone, and is taking the pause for aligning financial and operational programs.

The more filled seats American Airlines has, the better efficiency and profits. This is straight out of the Southwest's playbook. However, Southwest has been in this position for a long time tapping the nominal market, and will continue whether American Airlines taps in or not at this point in time. American would have to feature this element of travel by expanding its destination footprint considerably beyond its current routes. It sounds like American Airlines would like to maximize seat and price affects within its current network initially.

China Eastern Goes In For 50 737-800's

Boeing slipped another order by when everyone was thinking wide body and seats. The 737-800 is the choice. It signals a pause with COMAC confidence as China's favorite own home grown single aisle framer, as it falters at the development blocks. Adding the fifty to last year’s 80 single aisle also confirmed, it brings China Eastern's organization with 130 Boeing single aisle ordered in two years. It can't wait for home cooking to age. This also signals a long term development plan for China Eastern in the region. It is building its business plan on Boeing aircraft at this time suggesting a long term investment of major proportion with Boeing indicates COMAC is further away from its intended objective than China Eastern's current growth allows.

The Puget Sound Business Journal reported, "The Commercial Aircraft Corporation of China, also called COMAC, has delayed the first flight of its C919 — a 737 rival — until sometime in 2016, Reuters reported Thursday."  

Even though it was just announced regarding COMAC’s plight of its C919, it seems Boeing knew this for quite some time, and was waiting for the other COMAC shoe to drop. It did before Thursday having Boeing announce this order for 50, 737-800 NG's, with China Eastern’s organization.  This could be a bridge order for Boeing’s Max Program, as it gains another couple of months’ worth of production with NG’s while expanding its NG remaining backlog. However, both the Max and NG will build side by side in Renton, Wa. Eliminating any production gaps for single aisle.

Airbus Takes Orders On as if Taking Water On Like A Torpedoed Tuna Boat

Boeing knew about 10 years ago it had to ramp up its production with all frames of its airplane types. Even though Boeing was on par with Airbus at the time for receiving new orders. The key to its retaining world's largest Aircraft builder, was directly inclusive of airline production. Boeing retooled all its production plants and published the feat of plant renewal for its customers. The backlog of unfinished aircraft after the 787 start-up, grew beyond a customers planning range. Boeing realized this was a very dangerous condition for its future sales.

Airbus  sales hubris possibly ignored Boeing's own realization of a backlog, worry, yet gloated on its A-350 and  NEO sales, as Airbus main talking points. However, did Airbus do enough on its production side for stemming Boeing's expansive capability when it recapturing the Title of "World's Largest Framer"? The answer is obviously "no", as Boeing mid-year 2015 has outstripped the Airbus air frame building and delivery pace. The Airbus web page is a mess to read, as it has chosen to feature number of orders and aircraft since the beginning off time through Airbus' delivery on June 30, 2015. A reader needs to dig a little deeper to ferret out accurate numbers for the first half of 2015. Airbus delivered 304 frames in the first six months without my differentiation in monetary value or or class of aircraft.

Boeing on the other-hand delivered 381 frames which exceeded Airbus by 77 units. The number also represents about 13 units a month more than what Airbus produces. Boeing is now focused on lean production techniques in all of its massive plants. In fact they will increase its production in a continuous progression, even while constructing its plant capability in Everett, by adding the new 777X wing plant. It is also closing the 787 surge line in Everett since 787 production has met optimal output within its normal production space for the 787. Boeing can do this using both Everett and Charleston. The former surge line will accommodate 777-300 production as the 777X production floor is establish in the same facility. Boeing is juggling its space, during its march on the world of airplane manufacturing.

The internal production strategy makes it possible. Reduce the backlog and match customer demand is the obvious observation. The over-arching production theme was addressed at the beginning of the 787 program back in 2005. Boeing then lacked an ability for addressing its order book back-log. Now they have completed its initial stage for reducing backlog, while taking more orders in at the same time. Even though it lags behind Airbus at this point for 2015 orders, multiple orders are hanging out ready conformation, during the second half of 2015. The customer controls the announcement. Case in point, is the recent Vietnam Airlines meetings this week in DC. There are multiple 787's in play, possibly 777X orders hanging on approval with Vietnam Government oversight. Boeing has just tendered an offer on various aircraft types. Such as the 787-8 and 787-10 totaling sixteen additional 787's for Vietnam Airlines.

Additionally, as mentioned, there are talks of the 777X with Vietnam Airlines, and its government.

This one example is also repeated throughout the world, as customers need to Identify its own financial resources and approvals first, before stepping up for ordering. This could take time not in years, but in months. There is a lot more to come in 2015 as the time element moves forward. However, this matches Boeing's productivity model. It is making room for new orders faster than Airbus can build against its own backlog. An extremely huge talking point for airline customers. Boeing is seizing the backlog moment and shrinking it into a customers relevant range of need for ordering and planning. While Airbus has expanded its own backlog without achieving any significant production capability whether or not orders swell.

Boeing has achieved customer positioning for timely delivery, where Airbus has outpaced its capability to deliver aircraft to its customers within the customers own window of opportunity. The productivity emphasis has been a long time coming with Boeing, as it has made production a main focus for the last ten years. Airbus has only just begun this production journey, during the last few years. It may be too late for Airbus, as the Boeing 787 is now reaching its customers consistent validation with airplane appeal and timely delivery. Boeing's availability of production slots are more in sync with customer's own five year plans, than a competing Airbus A-350 can currently manage. The A-350 is the real "Late" aircraft not the 787.

Vietnam's Chief General Secretary of the Communist Party of Vietnam Nguyen Phu Trong Shakes Hands on Trade

Vietnam political arm has met the US on US home ground today in DC. The back drop happens to be Vietnam's Airline 787-9 sitting at JFK waiting for customer delivery after the big ceremony photo ops. More telling is the backroom discussion which needs Vietnam's government approval for its next big order in the offing. It is mentioned in talks, with inclusion of eight 787-8 and eight 787-10's for ordering by Vietnam Airline. The deal may have been already been struck during this event, as high government officials are present. Vietnam Airlines needs government approval before validating a deal with Boeing. All the participants are currently in DC this week. This is only unconfirmed speculation that another deal was struct with Boeing.

Spectacular Washington DC Fly-by for Vietnam Airline 787-9

 australianaviation.com.au  Photo Boeing

Already Vietnam Airlines have bagged confirmed deals for 19 787-9's of which one sits in DC during this auspicious occasion. It will be delivered later in July. The DC parked bird went to Paris and back thrilling the crown with its versatility in its air demonstration. This 787-9 also flew over DC showing everyone, its capability, with the same amount of awe for this dynamic aircraft.

A summary of everything Vietnam Airlines has accomplished so far:

19  787-9 ordered and one awaiting customer pick-up
8    787-10  sale not yet closing, awaiting Vietnam's approval for confirming
8    787-8    sale not yet closing, awaiting Vietnam's approval for confirming

Total Fleet alignment when all transactions are complete: 35 787's for Vietnam Airlines.

Seasonality, The Heart Of A Boeing Forecast

When making statistical projections seasonality skews the projection according to what may occur if the statistical influences are added to the math model for projecting outcomes. The reason both Airbus and Boeing come up with different results is based on different seasonal variables. These can include many affects on the not so straight line assumption of how many aircraft will be ordered. Below are a few seasonal indices affecting a twenty year forecast.

• Fuel Market
• Economic Stability 
• Labor Market
• Financial Market 
• Demand Constraint
• Supply Constraint

These are just to name a few where a statistical model factors in each of these seasonal influences, smoothing the outcome, and  apportioning its influences in the forecast. With all these variables the manufacturer who makes its proclamations about the airplane market futures; comes up with a plausible outcome, which reasonably affixes a demand for just a general prediction for customers who will need an airplane through til 2034.  Each years projection updates the date range. During 2016 the date range will go through 2035. Each succeeding year's forecast will include the "n"th year twenty years out. If going longer than twenty the forecast suppositions starts to lose accuracy and relevance. In fact a ten year forecast is a better predictability reliance than twenty years. The narrower the time range, the better the forecast will match what actually occurs. 

It's just like the weather forecast. Having a 72 hour weather window is an excellent method for predictability, and usually a most accurate forecast. Adding seasonality factors into the weather forecast can extend a reasonable reliance 30 days out with high confidence. The Confidence component is another statistical tweak which continues to enhance a more accurate outcome by defining a range of accuracy expected. A ninety day weather forecast becomes closer to a guess with some  seasonality influences and is less reliable. The further a statistical forecast goes out the more unstable the outcome accuracy becomes compared to what will really happen.

A statistical Airplane model would have to include some seasonal factors, including the affects of  War or Depression.  It would include additions with more extensive seasonality factoring with any 20 year model. The 20 year prediction  reels its long range seasonality influences when adding those factors to an forecast outcome. A complexity of factors become so unstable and whimsical that it becomes a useless model if too many seasonal consideration are applied. The only sanity in the process is doing a year to year with a twenty year range. War and depression forecasts are similar to predicting the next earthquake. Therefore, why predict the airplane market dynamics during the next twenty years using "earthquake data" in its forecast model? It is more solid to use straight forward industry growth projections and social and economic indicators in the model, which are a manageable, and a reasonable resource for projecting the next twenty years from year to year reports.

A reasonable answer from forecasting should be simple and should be part of every participant from the industry. Remember in the weather forecast example above, the first 72 hours are usually a golden prediction,  with only having a few degrees of temperature variance from what actually is recorded when it happens. A week long weather report becomes plausible and fairly reliable. A month long weather outlook is a best information outcome with all the seasonal bells and whistles included. It even has its own forecast within the forecast. How reliable and how accurate will the outcome actual match the forecast is another forecast in itself. That is known as the confidence factor. A twenty year forecast has a broader spectrum for its confidence when calculating what the market will become. Hence an annual forecast keeps updating the Airplane industry's "weather report", adding on a year. It is similar to what the news contemplates when conducting your own local weather reporting. The importance of the Airplane forecast is those first five years and how Boeing sees it. Those years are the most accurate and are within a customers own five year financial plans. 

It then becomes important to a customer, supplier, or financial markets, to take into consideration the first five year window of a Boeing 20 year market prediction.

It also important for development teams, innovators and industry planners to take into account the 5-10 year segment of what Boeing predicts. It takes that much time for completing innovation steps, allowing for maturing, and plant facility growth to occur. The last ten years of the prediction, is an over-arching case-maker when organizations are proposing a quantified change affected by predicted demand quotient.

Boeing doesn't claim absolute accuracy, but does claim all things considered you can expect 22,000 units from here to 2034. Next year it will be from then to 2035. Airbus smooths it out a little less perhaps accommodating a seasonal decline on its own narrow body demand during the next twenty years.

Boeing Data Full Market Outlook PDF

   

“Concurrency” are You Nuts Military

Most American citizens aren't aware of this term, but the best-laid plans of mice and men say concurrency in its military planning language. I say, "are you nuts!" Not everyone knows we are a weaker nation with concurrency running our military industrial complex. Now it's up to me to explain this fools notion to make industrialist rich and the US Vulnerable. I will be writing about concurrency with the following epic demonstrations listed below:

• DDG1000  Zumwalt $2.6 Billion
• F-35 A,B,C   $150 million each
• Gerald R Ford CVN-78 $12 Billion

Latin definition for the word Concurrency (with your currency). :)

The military explanation did not have your vote nor your common sense. It simply made the case to Congress and stated, Build a program on the fly and we will learn and make changes as we go! This is a paraphrased concept of the military and a process killing its own military industry while losing its ability to defend and then losing this nation who gave its trust for the complex. Concurrency is not a component of American exceptionalism. It defeats the competitive process and gives our country far less back than what is spent on its defense, leaving the country vulnerable to any aggression. Strong words, I hope so!

The DDG1000 is the first boat point up. It is the Navy's newest iteration of a warship at sea. It cost 2.6 billion for the first one now plying the oceans in our defense. It is stealth, it is speed, and lethal. Designed with out-of-the-box thinking and beyond. It could fire a projectile 75 (less)miles on target within inches of accuracy. So what is the problem, my friend? They are only going to build only three copies and are reverting back to a decades-old DDG51 series with new destroyers to fill the gap from its cutting off the DDG1000 program. Concurrency killed it! The billions up front on ship number 1 made it a big "no" when acquiring twenty more of its type. A continuing progression going from model to model found in the concurrency group think would take the DDG1000's series cost to infinity and beyond. So they think? Rather than let BIW find continuous march towards efficiency, through additional builds or supplier innovations lowering the cost of each succeeding model, Washington lost its stomach for the Navy's venture into a concurrency leakage of your money building just one boat. 

However, China is now exceeding where we have pulled back strategically on the sea theater. They are building new destroyers and building new sea Islands near our old friends in the Philippines.

Concurrency programs are grinding innovation backward as military money dries up. Doing upgrades on the fly with concurrent programs is a flawed mindset, and does not make the military as able. I going to jump to the F-35 program. At the beginning where the bidders of the JSF program. A one size fits all workshop theme not yet applied to the military. The bidders had to supply three models to three services with one frame concept. It had to be stealthy. It didn't have to be fast. It had to beat every aircraft out there. It would cost 60-70 million per aircraft. I am getting to the point. ... and so forth.

The F-35 Lockheed award beat Boeing's flying potato. Then stage II of concurrency started. The F-35 underperformed, it has many shortfalls. The claim came forward from test pilots. The F-16 flies better, faster, and can beat the F-35 nine times out of ten in dogfights. But the F-35 looks good like a fighter and now costs $150 million each. It's a long stand-off weapon, not a dogfighter.

I will quote an unnamed source not to protect identity, but I can't remember his name. But you can find it if you read as much as I do online. Anyways, he said, "only if the Marines would have been awarded the Boeing VTOL offering". It did a great job, it looked ugly like a Marine, and it flew better than anything they had seen, including Lockheed's offering. But wiser heads prevailed and opted for looks in the beauty pageant, and choose the sleek looking F-35. Concurrency was now on board for the long taxpayer run on the bank.

It has been stated the F-35 has delivered its first block point, and the military has sent back its review and shortcomings on jet performance. They produced another batch and then got re-reviewed. In fact, they have gone through three rounds of aircraft generations for 100 within just one service for configuration changes.  The F-16 is still better at flying. Conclusion, people could get killed up there flying the F-35 against an F-16. Concurrency doesn't work and military operations do not make a good testing process just to discover something is truly inadequate prior to a pilot's ejection.

Solution: Best Practices Best Fit. The F-35 Air Force and Navy frame gave up speed when accommodating design features for the Marine VTOL version. Drop those speed robbing features in the non-Marine frame. Award the Marines a Boeing frame, for a run with the expeditionary forces, they fight ugly. Award a move towards an F-35 frame revamped for the Air Force and Navy. The purpose is for gaining additional speed air superiority it lacks.  Complete additional war characteristics that are missing. The concurrent change will enhance the warbird so it can out-fly the F-16 and outperform any adversarial combatant up close or with a long distance advantage. That is true concurrency philosophy after the one-frame-fits-all, miserably fails to cost this nation more than just money.

The Gerald R Ford the newest Nuclear Aircraft Carrier is just going to completion. Let's go to sea for 12.5 billion and see what we have to change as Ford stumbles during sea trails? No problem, it will come in for a $2 billion in up-charge and fix. Do this three times, and the carrier will tap the people of these United States for a total cost of $18 Billion making the CVN-78 program scandalous, before its combat ready. It will be a great ship concurrently speaking. Actually, the word concurrency should replace the word "currency". After all "a con is a con" only with currency on the table.

Somewhere Boeing Has a 787 Backlog Target

Boeing has about 800 number of 787's on the backlog line. What that causes for the sales team is a night mare. The A-330's backlog number in in the three hundreds counting its NEO's. Price and production availability are the calling cards for Airbus which causes Boeing angst, if you ask Randy Tinseth. As Boeing's Marketing VP, his main grip is customers need a slot filler sooner rather than later for fleet expansions or renewals. The A-330 a diminish aircraft in advancement then the 787, and a cheaper buy. Suites emerging and legacy carriers currently just fine until a much later time. The full conversion to the 787 product won't be complete until the A-330 dies a natural death by the 787.

So what is the answer to Boeing's dilemma? The answer is:

• smaller backlog through production. 
• Having a higher efficiency in production,
• where efficiency brings lower cost gaining sales flexibility for its customers

Those points alone would kill the A-330 noise. The mere fact that Airbus can offer an A-330 within a customer's five year fleet plans makes it an attractive option fitting a customers plans. The new customer's 787 is stuck on the factory floor waiting for its work order as soon as its turn is called. All the platitudes of the 787 are lost on customers hearing, because they can plan "B" it with the A-330 NEO. 

But  :  

• The 787 flies farther,
• it flies more efficiently,
• it is more passenger centered from its advanced evolutionary features,
• and its just plain better than the A-330.

The customers turn to Boeing and says when can you deliver it, and for how much? Randy needs a earlier delivery dates to sell more 787. He needs the ability for price packaging incentives for the customer. The sales market is frozen for the 787, because of inflexibility, not because of product inferiority. Customers can buy a A-330 NEO  within a customer's five year plan and maybe get one by year three for less money.

The key comes back to Boeing's inflexibility metric, which is quite high on the 787. Metrics are cards drawn from the big game board which pleases managers. When all the metrics align within an optimal range the managers get promoted. So an arbitrary scale is made from non statistical sources since you can play with statistics and make them what you them to say (??). The scaling method most people understand. On a scale of 1-10 is the start of it all. An outcome called "1", represents optimal customer conditions and 10 represents total inflexibility and market risk. This scale is set by the customer and not the manufacturer. The customer knows its finance, its growth plans and its competitive counterparts, therefore it knows what is optimal for its own success. The manufacturer can only supply the customer what it wants when it wants and for the customers ability to pay for it. All other talking points become ancillary to the purchase issue. The A-330 NEO has only focused upon Boeing's ability to deliver the 787 and its competitive price.

Boeing knows it needs to remove those purchasing impediment of delivery timing and better pricing when it can afford to do so. The answer is given at the beginning of the blog. Boeing's backlog for the 787 must match the customer's own typical planning cycle. Statistic can be brought in at this point. It needs to sync Boeing's backlog with a typical airlines time plan.

Back to the scale. A customers Optimal timing is counted as a 1 rating. The customer's most riskiest timing is too far out for taking delivery of a 787. It looses its ability for measuring financial impact within its own five year plan projections.  This makes it a 10 for potential customers. The 787 averages about an 8 on the scale for taking on new orders (highly inflexible). The NEO averages about a "3" on the buy scale (good flexibility). A great rating of "1" was when the 787 was first offered during its first years on the order block. It has matured to an 8 rating from its  own success (of mostly inflexible), Mr. Tinseth supports the notion let's clear the production decks, and we will sell more 787. It it does, it will leave the A-330 NEO orphaned from its customers. Airbus has struck only at opportunity given by Boeing's successfully large and inflexible backlog, using the A-330 NEO as the flexible purchase option for customers.

Money always trumps uncertainty on the scale. Certain mega airline customers are wealthy, mitigating timing and risk from financial vulnerability. Those are the out lying marketing customers that Boeing will do back flips at any time. They will always have a default rating of a 5 no matter the maker or type. However, the customer who is more fragile in its nature, Boeing must reduce its backlog in an attempt to woe that customer having its own flexibility scaling for its optimal purchase and delivery cycle. The scale of a "1" for a particular customer is a fruit dropped from the tree. A scale of a 10 for a customer is fruit just forming. It is waiting for the price and backlog to drop so it can order having the lowest airline company risk, and a more favorable price.

The Backlog target Boeing may consider is between 350 and 400 unfilled 787 orders in a static range for its sales team to maximize its efforts year in and year out. Boeing then must sell its production units of about 120 each year. If Boeing did not sell another 787 for three years it would reach this optimal backlog number, Boeing is going to sell more 787 this year out of demand from airline growth. It may take Boeing ten more years to reach optimal backlog for its customers needs. The scale is a guide for how ripe the fruit maybe for Boeing. Economic climate can change the scale number quickly or it cam give the fruit a frost, as it falls off the tree as a brick.