World Wide Wings. Boeing. China

Boeing is a growing concern as we often used that term in Business School at the University. The World Wide Web is an electronic construct linking servers in a web like pattern over the globe. Boeing is a world wide seller of wings  it builds linking cities in a web like manner. The Business plan for any airline is making a web of connections both long legged and serviceable short runs in a wide base of many customers. China has over a billion (1.3 billion) potential customers. The Boeing web of wings is spreading in China. Closer examination is Hainan Airlines portfolio and financials determines its WWW is spreading throughout China and Southeast Asia as a very successful business venture. Central to its business model is the Boeing Aircraft Family from 737 through its latest contribution, the 787.

When Hainan reports a 9% net profit margin then the WWW expands its web.over a potentially lucrative market found in China.

Forget China's recent stagnated growth, its economic slow down, and more competition from others in the airline Industry for China's market place, as many competing airlines want China's flying customers.  Hainans WWW keeps a pace with those constraints with its family of Boeing aircraft.

Hainan Airlines’ 2013 net profit increases 9.2%

Air Transport World: Katie Cantle Referenced article

Katie Cantle 

Mar 21, 2014

China’s Hainan Airlines has reported a net income of CNY2.1 billion ($337 million) for 2013, up 9.2% over the net profit of CNY1.9 billion in 2012.

According to the Haikou-based carrier’s filing released by the Shanghai Stock Exchange, operating revenue rose 4.71% to CNY30.23 billion on operating costs that rose 9% to CNY23.5 billion. Industry analysts credited “exchange gains resulting from the yuan appreciation” as the main contributor to the improved performance.

Hainan noted it experienced “a rapid growth of air traffic volume” last year, but said “the worsening external operating environment” and “slowdown of China’s economic growth” hampered revenues. The carrier’s mainline revenue from air transport operation grew only 2.37% to CNY27.51 billion.

Passenger boardings increased 16.4% to 26.2 million with an average load factor of 86.4%, improving two percentage points over the prior year.

Cargo traffic volume increased by 7% to 313,300 tonnes.

Last year, Hainan introduced 27 aircraft and phased out 13 aircraft, leaving a fleet of 131 aircraft comprising of six Airbus A330-200s, seven A330-300s, three Airbus A340-600s and one A330-VIP; plus one Boeing 737-400, five 737-500s, 99 737-800s, three Boeing 767-300s, six Boeing 787-800s.

WWW of Hainan:

Airbus: Revenue and Cost centers

A330-200  Six

A330-300  Seven

A340-600 Three

A330-VIP

Total= 17 Total Older Airbus Aircraft

Boeing  Revenue and Cost Centers

737-500 Five

737-800 Ninety-Nine

747-400 One

767-300 Three

787-800 Six

Total  114 mixed old and new Boeing Aircraft

Rough Numbers Below:

How much Boeing equipment influences the 9% net profit is considerable in that operational efficiency sets the profit pace using efficient aircraft in a highly volatile fuel price world. The aircraft performance must offset that volatility and contribute to the profit line.

131 total aircraft.

Fleet percentage by manufacturer raw units:

87% Boeing

13% Airbus

Contributions to net profit has a perponderance of Boeing Aircraft types for Revenue and Cost sources. During a slower economy, it is remarkable that Hainan has achieved this net profit number. What is import to know is what write-off's are taken and how each cost center contributes to that bottom net profit number. However, it can be said, "That it is positioned well to expand its WWW throughout the Asia region. Expect more 787-# and 737-MAX to be ordered by Hainan retiring the A340's and its remaining A330's and replaced by 787-8,-9 or -10

Looking ahead, the company expects the air transport market to continue to grow, especially in China’s less-developed cities and it believes domestic airports expansion projects will “bring new opportunities”. But domestic low cost carriers will “exert some impact” on traditional legacy carriers although they have become “new growth points” for China’s airline industry.

Is The A330 Blowing It Out Its Stern With A New Engine Option (Update Linked counter point)

Boeing is now forcing the Airbus' hand of airplane building. It has successfully cornered Airbus with its two types of A350's, or known as the -900 and -1000. The 777X family will meet and beat the XWB concept by more than just hull width. It will fly, virtually everywhere.

Aviation Pros Link and article:

Airbus Lags In Updating Midsize Widebody Jets, Say Experts

Airbus, maybe forced to play its NEO card once more, if by years end they don't announce any kind of A330 NEO program, they fall further behind. The problem that Airbus faces is turning out a real A330 NEO that will touch the 787 family of aircraft having a metal body with new engines. If they can't, and offer something just new, then it will have limited market appeal. Even as the A350 falls short of the technological benchmarks that Boeing has achieved with its 787. An A330 plastic version is three more years until it’s off the drawing boards, at which time Boeing will be reloading the twin aisle order book with a proven aircraft. 

Airbus is in a conundrum by failing with the A350-8 as a no go. It is a multiyear set back they do not wish to discuss at this time. The A330 Avenue is in need of some street repair before people will start driving that way again.  It will be difficult if not impossible to make the A330 NEO into a 787 clone or knock-off. Airbus is burning the midnight oil later into the morning with this sticking point. The A330 albeit, a good design in its day, as it further is matriculated or morph into the A350 will be metal airplane with new engines as a non-option. However, the A330 NEO cannot incorporate the 787 delivered promise and beat it. It will fall short even though development time is shortened by not achieving technological equivalence.

Here is what may happen, Airbus will use an X number on the A330 NEO and its new wings with some platic innovations plus adding the New Engine that is not an option, unless the option is ordering the old A330. It will refine the A330 taking from the A350 project lessons learned. It’s going to morph the A330 NEO half way past the old A330. It will promise superior performance over the 787.

The 787 will remain a superior aircraft as its longevity and maintenance cost efficiency will exceed everything that Airbus now offers and for the next 20 years. The strategic value of commonality from a Boeing fleet family, will make it a decision point for not having mixed fleets in one’s own operation scheme. The A330 NEO is the sign that Airbus is now firmly behind the Eight-Ball from Boeing's gamesmanship and effort.

Counter point:

Why Airbus Desperately Needs an A330 NEO

Please read this point as it greatly supports a position of hanging on to a shrinking market retreating to a niche status of economic purchasing with less efficient offering than the 787.

Boeing's Confidence Campaign Is Bolstered By FAA "Safe" Proclamation

Boeing has all along maintained an acknowledgement over glitches. It subtitles those glitches as teething woes. Boeing has attacked any new airplane breaking in period with a robust approach of leaving no stone unturned in the perfection phase of mastering the 787. The optimist says, "All glitches are protected by its internal controls from engineering, design, and redundancy. It can fly with out a battery, if you will. The FAA has concurred with its latest report on 787 safety. It is a safe airplane. Early on this blog mentioned that aspect of 787 safety. It has so many overbuilt systems that failure is mitigated in flight with an array of safe back-ups most airplanes lack. That heavy built emphasis of  "what if" technology protects flight with passengers on-board. The FAA concurs!

Boeing 787 design and manufacture safe, FAA says

Take-Away:

Boeing wasn't lying about the glitches being teething pains. It was a necessary evil to go through this period while shoring up unknown outcomes of designed parts from suppliers. The FAA is correct at pointing towards Boeing for that responsibility and its suppliers. A new paradigm is established with this aircraft as so many segments of development not by Boeing, but within its supply chain. The supply chain has been a sore spot for Boeing and its 787 from the onset. It is new way of doing business. Thus you have the same amount of glitching in this new way process as the airplane itself.

The FAA recommends that "Boeing's New Way", is to exercise better control over that element as well as FAA own self when a new generation aircraft has a heavier reliance on a no Boeing involvement on its parts, as it uses a preponderance of out side technology. Boeing cannot be complacent if the supplier assumes responsibility for the technology, like its battery problems. The FAA recommends that suppliers must meet the same scrutiny and standards of safety that Boeing is measured on. It also maintains the FAA must implement more inspection and advisory control of subcontractors as if it part of Boeing's over-all construction of a new aircraft.

Boeing has used these three years in service years with it customers, to wade through items not meeting performance standards such as batteries, brakes and plastic hull making.

The many issues with subsystem programming from subcontractors, delamination in critical areas (wing cracks), and failure of brake performance are examples where a more robust involvement of both Boeing and the FAA would or could of prevented those in-service glitches. Even though, Boeing didn't understand the full scope of supplier participation, the suppliers operate at a different level of assurance than Boeing does, and a dependence on suppliers having it right for Boeing opens the development of  a 787 weakness. The FAA is in a similar position as Boeing is considering oversight of the supply chain. Whether its under Boeing's roof or a supplier's roof the same due diligence is required for the all aircraft components going into the new processes, designs and the way of conducting the 787 project. Even if all sources are scattered over the world or are in-house at Boeing's facilities.

Having said this, the 787 is safe. Because many or most of the weaknesses have been addressed and changed out with a very solid protocol within those replacement methods. It makes the aircraft far more safe level than whats its own redundancy had provided prior to entry into customer service. It is a very safe aircraft.

The recent JAL airline 787 engine failure demonstrates its emergency capability. After the #2 engine was shut down during its Trans Pacific route to North America the pilot redirected the Aircraft to Hawaii. One of the greatest fears is a trans-pacific engine failure. The Boeing 787 worked seamlessly to safety. All the precautions, lessons learned, and systems concerning an engine shutdown worked as expected. The Boeing redundancy and the FAA oversight keeps risk of travel to a minimum on this particular model. The FAA reports indicates, all issues are tracked, corrected, and implemented with change, from manufacturing through flight maintenance. The 787 is a far better aircraft than what it first flew into service in November of 2011.

Flight MH370 A Purpose Driven Event That Extends Its Total Fuel Range

The actions recorded from monitoring points on the aircraft suggest a purpose driven take-over of the aircraft. I have mentioned before that the purpose is unknown but disturbing. The listing of what is known is disturbing because it flies away from conventional wisdom of a castistrosphic crash into the sea.


A linked update that concurs with this assessment

1. The secrecy of  tracking systems off
2. The low flight path evading radar fly technique
3. The expertise of knowing how to make the aircraft go invisible
4. The expertise of radar evasion
5. The fuel range

All suggest a future WMD delivery system has been acquired. The collective governments of the world are nervous as the clock runs. The longer it remains a mystery the better it can be found. It is act of terrorism that is not done for a headline splash, that has occurred. A purpose driven event suggest a larger target in the future. The least known about its whereabouts is better in this case for the terrorist. One can imagine the 777-200ER has landed on acreage bulldozed out on some remote piece of land within its estimated flight corridor. The search and rescue members suggest two corridors both in opposite directions. The North West direction has too many eyes. The Southwesterly arch has too little landing opportunities. So the truth may remain somewhere in between. This aircraft could be hidden in a hanger at this time as it is prepared for its true purpose of delivering something big. It doesn't need bomb-bay doors, its just needs to fly again somewhere and detonate in the air or fly into a target with its payload.. A terrible thought, but one that needs to be addressed by all nations with resources. A 777-200ER has jumped out of Pandora's box.

Since inside information is confusing and adrift with bits and pieces of information, the available evidence is a crash site in itself . As those bits and pieces float about the press waves with an enduring picture of total confusion. The sophistication of shuting down of its tracking and consequential flight direction tells a story that this is just the first chapter of a possible long episode with uncertain outcomes. The US government is probably has this marked with the highest importance on its list at this moment, for Immediate Resolution. Another two weeks in the dark, it becomes a critical mass type situation for half the world. Probably this could be a second 9/11 like attempt in the making. So the answer becomes more critical for each day this passes. A group of fundamental experts are following its years of preparatory plans, making this an important milestone in that effort. They have pilots, technicians and resources if this aircraft hadn't crashed. Current ambiguous information suggest it didn't crash. That is the basis of my understanding, that it didn't crash in front of the world press as some pointless gesture from terrorist, "we did it because we could". 

It is in the second level act of terrorism, where it becomes the first step for a greater purpose. 

• Obtain The Means-done
• Obtain the target-done
• Prepare the weapon- in process
• Execute the mission- in planning as 1st level terrorism 

The US realizes this, oh so importantly. I hope they can do its job well and find this aircraft in the next 30 days. Even if it tragically fell into the sea, the US needs to find it, because it is a national security problem of the highest level.

Flight MH370, A Terrible Thought Has Surfaced

The recent disappearance of flight MH370 has brought many of the usual items checked off for, in a rescue effort and finding the location of said missing flight. I wrote briefly before about flight MH370 on an earlier blog. Since this horrible disappearance has happened, I have fallowed the Wall Street Journal as it continues to explore all relevant information concerning the flight. Because of this due diligence from the WSJ, I had a perfect storm of a thought I would like to share.

The WSJ Has Reported:

• Tracking Beacons and communication went down south of Vietnam 
• Pinging and other engine data continued to report (ping for four more hours
• The last data ping put the aircraft well out into the Indian Ocean heading westerly
• The 777-200ER a long range wide body is officially a mystery.
• Further examination of this aircraft type concludes: somebody on board is trained and has expertise for this aircraft type to disable beacons, reporting computers and other satellite homing communications used for locating this aircraft.

What can be observed #1 is that the plane shredded like no other of class size has in the history of aviation and therefore has evaporated with all systems not leaving a trail. While an airplane of this stature, disintegrated and crashed after flying for four more hours from its disappearance nullifies this scenario. 

One other piece of critical data is its seven hours of fuel on board. Flight MH370 took off and flew about an hour heading for China and then turn abruptly towards the India Ocean with six remaining hours of fuel. It used up about 70% of its fuel when the last ping was recorded. Flight MH370 still had two hours of fuel that could go another thousand miles before making a descent downward.  This is important and it is  why so many military people are eager to find this aircraft.

If this airplane somehow landed on an unconventional surface away from people, it would put this incident in a unique position. If terrorist  did indeed take the aircraft is was not for publicity, it was for another mission far much more sinister. A refueled fully weaponize wide Body aircraft could fly and make havoc almost anywhere in the the super power part of the world. This aircraft has long legs and can go anywhere. That is why the military is so anxious, because a threat exists that may be even worse than 9/11. This aircraft has the potential of a mission specific strike that could disrupt what little peace we have today in the world. Because the communications were cut -off during 4 hrs during the blacken part of its flight, those on board had planned for years with training to do what they have accomplished to date. This airplane can now fly of the grid and show up anywhere seeking it main purpose of the high jackers. That is my disturbing thought with flight MH270. Like a war games thriller this has a sinister back story that could include weapons of mass destruction by using a wide body like the 777-200ER as its delivery system.

I awoke with these horrible thoughts and needed to write and share that possibility with those who have already come to that conclusion.

Its A Mad Mad Mad 787 World

Air India sighs as it reflects on why they did what, and where they flew when, and then starts to smile a little. Norwegian Air gloats as O'leary flames away at what Norwegian has done to Ryan Air purchase opportunity. These three airlines remarkably peal back the layers of the 787 Onion in a dramatic fashion. Its happening down under with Jet Star and will break out this summer with New Zealand Air with its 787-9's. What is happening is the unraveling of the market place as the 787 becomes ensconced in its rightful place in aviation' s history channel. The "Making of a giant, The 787.

Despite several glitches, Air India swears by Dreamliner


"HYDERABAD: Despite several glitches dogging Boeing's 787 Dreamliner since its debut in 2011, it is slated to continue its dream run in the country as state-run Air India is 'quite satisfied' with the aircraft and has no plans of grounding it, said Air India chairman Rohit Nandan on Wednesday.

The Air India top boss' shocking clean chit to the Dreamliner comes even as Boeing discovered 'hairline cracks' in the wings of about 40 Dreamliners under production at its US unit. Even the US Federal Aviation Administration (FAA) had launched a top-priority review of the much-hyped aircraft in January last year and had temporarily grounded all the Dreamliners in operation in the US market after battery related issued cropped up.

According to data provided by Union civil aviation minister Ajit Singh to Parliament, as many as 136 'minor errors' were recorded in the aircraft between September 2012 and November 2013.

"We have had a spate of incidents and we have had detailed discussion with the Boeing team on this matter. These incidents are not unusual in a new fleet or aircraft and everybody is trying to adjust to the new machine. There have been no safety issues involved and these incidents are related to software or technical matters and our engineers are very competent to handle that," Nandan said on the sidelines of the India Aviation 2014.

He further stated that the dispatch reliability of 787 Dreamliner was 98.6% for Air India, which was better than that of Dreamliner's global delivery average of 98%. "As far as the grounding of Dreamliners is concerned, Air India has got no such plans as of now. It is for the regulators to take a view on the matter, but we are quite satisfied with the quality of service that we have received from this plane," said a confident Nandan."

O'leary from Ryan Air Quips: 

Bjørn, godammit, you’ve taken all the aircraft!'

Norwegian Air Shuttle's chief executive Bjørn Kjos has boasted that his risky bet on Boeing’s new 787 Dreamliner has given him a five-year head start on long haul routes over his Irish rival Ryanair.

"I know Ryanair is just waiting to get underway with their long-distance efforts, but we have taken all the planes,” Kjos gleefully told his audience at Oslo's BI Norwegian Business School. "I heard that when I asked [Ryanair CEO] Michael O’Leary how it’s going: ‘Bjørn, godammit, you’ve taken all the aircraft!’"

Kjos argued that while Norwegian had seen a string of damaging delays as a result of using the new aircraft, it had secured them ahead of its rivals. 

“Those companies that have not positioned themselves for the future will not survive,” he said, according to Norway's Dagens Næringsliv business newspaper. “Be my guest if you want to fly with seven to eight year old aircraft.“

Kjos defended his decision to register new aircraft in Ireland, and to hire crews at lower wages in countries such as Thailand, arguing that any airline which attempted to keep Scandinavian cost levels was doomed.

A perfect storm for Qantas

It was a perfect storm for Qantas, with all the elements ripe for the anticipated drama. The Australian flag carrier lost A$252 million (US$225 million) for the FY2013/14 first-half ending December 31st and announced it would cut 5,000 jobs as part of a three-year plan to reduce costs by A$2 billion. Other measures include deferring delivery of eight Airbus A380 for the parent airline and 3 Boeing 787 Dreamliner aircraft for budget subsidiary Jetstar.

The many aviation players are beginning to scramble as they realise the 787 is the real deal. It flies, and it lands, and then flies again. Only much cheaper and much better than its competition. The Mad Mad rush is on to get some 787 right now not later. The 787-9 is the spoon in the pot that will stir aviation's commercial world even at a tempestuous rate, not seen for some time in the annals of aviation's story.

The 787 is bringing all this conversation to the surface of aviation's keen sensibilities. Airline CEO's make jokes such as O'Leary has, and Air India reassures they have a winner, "no problem all good". Those 136 glitches were used to game Boeing. Meanwhile we need 14 more 787's before the end of the year. Air India has a large bucket placed at the back of the 787, for its bucket loads of money they gather from its customers.  

Norwegian had a few mishaps with its 787, and went into conference with Boeing carrying a stern expression for its lunch date. Now Norwegian winks at Ryan Air and brags we are five years ahead of all those suckers who didn't take the gamble. Good job Norwegian, you didn't blink and got very lucky. Ryan Air don't worry, it will only get better as the 787 fully blooms. You may get in line for a fully enhanced 787 model as your empire grows. 

Jetstar and New Zealand are just positioned on the front row of a marathon race. All others will climb on board by 2017. Boeing's 787 back-log after three more years of furious production will look about the same in 2017 with 1,000 unfilled 787's level that it finds itself in 2014, even though they will crank out a plus 100 a year rate. Enhancements on the model will continue as the learning curve from R&D keeps the wax shine on the wings. 

I love the market ruckus.

Boeing's Stock IQ and Stock EQ

Warning, Opinion Only

Investors in the stock market and its players, often ply the market with programed transactions and instinctive timing. Using both the IQ investment (Intelligence) and EQ instincts (Emotional Intelligence). Where IQ stands for the extensive stock research models often taught in Business schools. Its IQ players use earning ratios and returns on equity, extracting the investment knowledge of when to buy or sell. The EQ, or "Emotional Intelligence", interjects quick buys or sells based on experience, self awareness, and knowledge of resources.  Boeing is now entering an EQ phase of dumping stock. Look back just one week on Boeing's horrible week of news. The disappearance of flight MH370 with its 777-200ER over Malaysia's region. Japan Airlines in-flight engine shutdown near Hawaii, and cracks discovered in the wing assembly coming from the factory.

EQ mental structures take over the stock market under those conditions. In spite of
the formulated stock market buy or sell algorithms. The EQ portion of decision making looks for the optimal spot to sell Boeing stock. Under the cover of bad news of investor's self awareness , investors will repositions itself on Boeing stock in hopes of buying back in at Boeing's new bottom. The "company" will swing back before spring is over.  A triggering event(s) has occurred affecting the EQ Stock market. Common sense, or self awareness will replace that swing  well before summer. The market will climb on statistical and timing sensibility of both the IQ and EQ part of a brains own decision making for those devout investors.

Filters on the mind affect decision-making and sometimes the market increases and decreases, effectively blasting through those mental filters causing an anomaly in both the micro or macro market. The micro market is your own investment portfolio, where the macro market is the stock exchange on the whole. The EQ elements are in play on your decision making attributes, and it tests your EQ maturity for those things to come. The IQ is relied upon to justify the EQ decision-making. That is a dangerous position as models can be affected by unforeseen forces. Programmers try to out guess trends and are often thwarted. The EQ investors from penny stock upwards, gets lucky on insight, and the self awareness of external indices affecting the price.  This may be a confusing concept in a short blog space. Therefore, I will attempt to boil it down in a simple picture for Boeing.

Boeing is a Blue Chip Stock, a stock with over-all longevity and solid performance. During its historical market position it will blip at times upwards or downwards. During those times the "players" come out and play and the retirement community of investors will go fishing on its yachts. The buy/sell cycle accelerates, and is spurned on by news and set backs. The retired portion of stockholders, or the EQ lot, know that the big picture will over-all, play well, as it keeps a weather eye for big, big mishaps!

For both investor types, IQ or EQ, once Boeing takes this dip, it would be an opportunity to strengthen one's own portfolio before the stock upswings again. Boeing has put all its marbles, future and wealth on the table. They are driven to make the family of its aircraft succeed. It is also driven in its science and military endeavors. Being, a Blue Chip player has a heavy mantle around its shoulders. It will stay with refinement through its repositioning efforts of its 787 manufacturing, advanced improvement of concepts, and attention to detail. Boeing is at the cusp of making it right. Failure to do so is not an option. Boeing will place its best resources at critical junctions. Everett should build the higher risk projects at this time, and give Charleston its proven processes. To move things to Charleston because its cheaper is a fools mission. Boeing needs to match its risks to its talent. The second team should not start in the "Super Bowl" of airplane manufacturing until it earns its chops.  If Boeing takes its mental momentum forward without consulting its own IQ and EQ, then the market will react accordingly and pull its money back.

The questions before you are:
Do you use your EQ to Buy?
Or your IQ to Sell?
or vise versa?

Pro s And Con' s Of Everett or Charleston 787-10 Selection

Boeing is currently unfurling the blue prints for either Everett or Charleston selection of whom will build the 787-10 and at what location. The pros and cons are weighed for each in my sophomoric attempt at discerning the outcome.

Everett Pros

• All or most the 787 talent lives in Puget Sound
• Synergy of Suppliers in Puget Sound
• Infrastructure intact for New airplane evolution
• Testing and engineering  slots in behind the dash nine
• Production slot ready for the Dash Ten with best work force.

Everett Cons

• Higher Labor Cost and unsettled labor force
• Property Expansion issues
• Additional distance for parts delivery from Charleston
• Over-all manufacturing costs are higher.

Charleston Pros

• Space, Space, Location
• Non Union
• Cheaper Location Cost than Everett
• Supply Line shortened: mid section and other European assemblies
• and more space

Charleston Cons

• Wings come from afar
• Labor pool shallow experience but cheaper
• Under developed production acumen
• Years off of Everett pacing and experience.
• Too many variables not reconciled, but will be in under 5 years

Going on about both is a tedious journey and ends with minutia for both places. In biblical fashion King Solomon will split the baby. I would suggest that 787-8 production goes to Charleston where both 787-9 and 787-10 will stay in Everett, Wa.

Why that answer?

Because RD is set in Everett and Boeing wants a quick launch using the experienced contracted union workers and engineeers.

The 787-8 will be  mastered in Charleston at 5  a month within the year of 2014. Charleston can dwindle the remaining 360 on the books within six years. Commonality on the production line will make efficiency improve as both units master its respected models in quick succession. Charleston is several years away for completeness in its production skills and leadership schemes. Everett is ready now for a two model split. The 787-9 and 787-10 is a natural and logical follow-on production sequence with two infusing lines of production.    Building #40-24 for the 787-9 and building #40-26 for the 787-10, is the second line with experienced protocols.

It would be reckless for Boeing to rely on Charleston for untested production models like the 787-9 and  787-10. It is high risk on Charleston, as it may be prone to massive cluster F**K on a gigantic plant scale. Boeing needs a solid production scheme in final stage of 787 development. Boeing should not risk billions more at this point, where customers are jittery over the Li-Ion battery driven aircraft. No more glitches is the Boeing motto in decision making. So this becomes one more point of why splitting the baby in Solomon's palace is necessary.  Charleston could work through the Dash Eight orders in consistent and a precise fashion. Giving Charleston an extra five years of building 787-8's would allow it to reach its full potential for follow-on aircraft such as both the -9's and -10's later on.

Follow-on orders from this point forward:

The dash 8's are in a slight pause period until market saturation demonstrates what both Airbus and Boeing can do with its plastic airplane. Only service efficiency  from this point forward will sell large blocks of aircraft. Airbus has sold large blocks of the A350 as Loyalty and commonality sales. When the final analysis is in, Boeing will show with its fuel cost reduction combined with service cost reduction that Airbus cost more to fly 365 days a year. This begins the long effort for follow-on orders for Boeing where both Everett and Charleston are sufficiently positioned to receive blocks of new orders in its respective roles as 787 producers.

Boeing's Horrible Week, The 777 200 ER, 787/GE and Wing Cracks

The temptation remains on edge, as each explicit aircraft happening  over Boeing's most advanced aircraft and its customers suffer a blight of events. First the 777 200ER disappears off the flight route with the last communication abruptly ending in mystery over the South China Sea.  The speculations rises and the facts are slowly coming forward, sort of!  Pieces and oil are found in an area right  near the last interrupted communication.

WRAPUP 10-Missing Malaysian jet may have disintegrated in mid-air - source

Bad headline #1 this last week.

To make attention getting news really aweful there is the GE engine on the 787 shut down in the area of Hawaii, of which it safely landed for repairs, study and a solution. A new GE engine goes to Hawaii sequel is now starring in "787 Production in the "Islands".

GE-powered JAL 787 has in-flight shutdown

Bad Headline #2:

If that isn't a monkey on ones, back Boeing just was tapped on the shoulder during an FAA audit. Presumably the FAA was there on a tip to audit processes in assembling the 787. What they found were fastener insets that cracked with the Carbon Fiber wing. The Japan wing maker changed processes that overlooked extensive application testing and the next 42 production aircraft are now under scrutiny and subject to cracking in the affected areas of up to a half inch for each occurrence. Boeing is taken a back and regroups on the problem with a face saving Harrumph to the press. Its a doable fix and will not affect our 2014 production forecast.

Boeing: 43 Dreamliners need inspection for wing cracks

Bad Headline #3:

The horrible week of Boeing is at last over where it can embark on a new crises. I greatly feel for the people on-baord the fateful unaccounted for flight. The early evidence indicates an instantaneous catastrophic hull loss, suggesting foul play over pilot error or manufacturing defect. 

The second case is of the engine shut down en route, The failure falls within planned for events. The aircraft landed safety in Hawaii as ETOPS would predict and is planned for in a crises situation. This isn't the first time an engine has failed, but since it is a new engine type and new aircraft type it is an important  and noteworthy event. I hope both Japan Airline and Boeing can derive a mishap cure with GE's guidance. Boeing has had a boatload of problems with its far more complex 787 aircraft. Since safety was built-in, every step of the way, it has brought everyone home so far to date. The 787 is rapidly becoming safer as each progression is installed in its over-all performance regimen. It is meeting all safety bench marks as each incident plays out. I hope this track record continues. If it does, then the 787 becomes truly more remarkable than imagined. 

The cracks that have developed as a result of new manufacturing applications are easily re mediated and fixed. It is not another problem in a long succession of glitches, it is a failure of trail and error attempts on smoothing the plastic building process. Boeing should have more over-sight on its new wing or parts building suppliers when changes are made on new parts shipped. It should have gone under an engineering review by Boeing when messing with the wings. Bad week for everyone home and abroad, This week should be far bettter over-all.

The Moving Average Of Production-Delivery: March 2014

The monthly moving average is a broader scope of production which takes into consideration both Boeing's production and the customers position for delivery. The customer often adds its own standard before delivery such as interiors, special electronics and other customer standards. Boeing additionally pushes fully assembled aircraft with traveled work, which represents extended periods of time in the EMC or the flight line before delivery. This 90 day moving average is an attempt to reflect a better financial prediction based off delivery per month rather than proposed production counts that contain traveled work to be completed or Customer extended time on the flight line awaiting customer standards installed. The 90 day production delivery moving average is a more realistic view of meeting Boeing's 10 production goal as it struggles to implement production change , customer inputs before delivery and 787 completeness testing before that same delivery. In other words, Production completeness bench mark is captured on day of delivery and customer acceptance.

A moving average smooths those Boeing bumps and customers delays into an average number which incorporates months of high numbers and low numbers from actual production flow out the big doors. It engulfs those EMC and Flight line contributions. Finally any customer delay is incorporate with a more representative production to delivery number.

The below numbers are a quick and efficient view, representing the complexity of a production number that Boeing could  use in over-all performance from inception of parts to delivery. The 10 a month goal for 787 must have all the various time flows through a final delivery number per month, rather than factory production in units. Boeing doesn't get paid until the 787 is delivered. That is the investors point of view. This handy chart below is just a reference point for time valuation of money based on production and delivery benchmarks.


Goal +/-                   12/2013   01/2014 02/2014  *03/2014  *Projected Mo
Month Deliveries            11               4               4              10
3 M-M-avg                       8.7            8.0              6.3           6.0
Production Goal             10             10               10            10
Production Trend (+/- ) -1.3        - 2.0               -3.7        -4.0

The production/Delivery  trend indicates Boeing is currently falling downhill in the first part of the year. My expectation, Boeing is holding a backlog of production examples, through its decisions that it has in the works at South Carolina, and is regrouping the mid-section unit in Charleston. Boeing is also doing some regrouping of effort  in both Everett and Charleston during this part of the year. By third quarter when the 787-9 starts delivery Boeing and its customers begin a strong march towards a + 10 a month number in sucession. The minus  numbers (production trend) a month will evaporate by May and begin a solid position at the 10 level of production and delivery reign, until the backlog is caught up.  By years end Boeing will have 200 flying copies in customer hands. That coincidentally will shadow the A350 entry into service.

Boeing needed a five year head start with its technology leap over the A350. Airbus took the low road to catch up with Boeing on an all new plastic airplane. But it did not catch-up at all with Boeing's overly complex and efficient aircraft. The Airbus fails by using dumbed down hydraulics and not using something similar to Boeing's robust core systems as found on the 787. When Boeing flies its 200+ 787 by years end, its leap in technology will have a completely smoothed out "Technological Gap" over Airbus from glitching. The only change that I can see coming from Boeing is testing and installing a new type of LI-Ion battery as science stabilises the L-I from  labs. That effort is on track at this time with new battery substrates at the molecular level absolutely calming any heat problems.