Boeing Deftly Playing Two Markets

Long ago I made a prediction for Boeing, stating that Boeing would reach a break-even for the 787 project in late 2017 or perhaps early 2018. In order to break-even Boeing has to reduce the per copy production cost total below the expended investment for the 787 development bringing it to market. They, Boeing, felt that 2015 is obtainable for reaching the break-even production unit during that year.  What comes into play is Boeing two markets, the Sales Market and the Stock Market. The more 787's per month that Boeing can deliver to its customers off-sets the investor angst towards paying more for a share of Boeing in the financial market. By saying it will be in 2015, that every 787 delivered during time , will give Boeing profit dollars is an extreme goal.

After taking a glance at what Boeing has wrought in the form of set backs and change, it is well established that Break-even reality if farther out than sometime 2015. I gave it the 2017 or a little later proclamation, big deal huh? So with those divergent thoughts in mind let's ponder the process. Boeing needs an actual 10 a month delivery by years end, they can't keep piling up 787 at Paine field collecting sun light. Scattering some to Portland, California and Texas for residual work. The room at Paine will become a premium if they produce 10 units out of the factory each month when not ready for completeness and delivery. They say they will produce 110 this year, but will 110 units have its customer money prepared for that many deliveries?

• I think some will delay deliveries in blocks of several weeks until money is supplied. 
• I think some will not be ready for acceptance due to its own infrastructure and training issues.
• I also believe the strain of delivery preparation will overwhelm Boeing capabilities. 

At some point in time, the parking lot at all the aforementioned locations may reach grid lock as Boeing won't slow down its ten a month and then 12 a month at the factory door. Does that pace allow for room for the its door pace on the flight line, and enable it to reach the break-even point during the next 24 months? I am just saying there are too many moving pieces where Boeing needs some slack time written into its floor plan as units are brought forward. No two production 787's are the same nor do they achieve the same factory pacing speed. The slack is completed outside even though they go through those same big doors every Xth hour. Consider the millions of parts which arrive, and may not pass testing, or correcting systems during upgrades. The nebulous production issues  make each 787 a unique work of art and those units can tend to build up outside not ready for delivery.

Boeing has a strong mitigation team for those unique situations and have planned to handle each aircraft accordingly. They also work with its customers to gain assurances that its customer will ready for delivery. Boeing has grown-up as a 787 producer of the World's most advanced commercial airplane, including the A350 family of aircraft. Boeing also has matured the 787 from its problematic examples of glitching. The 787 is ready to take to the world aviation market by storm. The 787-9 will really be that dream that Boeing had hoped for during the 787-8 push out in 7-7-2007, when it could only muster a plastic shell for an aircraft. The dream delayed by three years of do-overs, mistakes and change management is a virtuoso in concert today. If Boeing made violins, the 787 would be a Stradivarius Violin. Airbus builds really big Tubas Worthy of October Feast.  Some days I'm tempted too, to take a shot at Airbus, I'm sorry for that digression.

Back to the flight line and the two markets. The markets are in a symbiotic relationship. The sales team has given Boeing a production backlog exceeding Break-even in spite of the cost of getting all the wrinkles out of the 787 family of aircraft grew. Airbus A380 has not sold enough A380's, and will lay up short on the A380 break-even until another decade clicks off on the clock. Counting on where they will eventually sell enough A380's is a risk. The A350 family through its 900 may reach Break-even for Airbus. Enough of Airbus already! The Boeing two markets will reach its apex in 2017. The break-even units will roll out the door during that year. Sales will energize in a second tier buying spree. The financials will no longer bother with any glitches or batteries as they will have long been put to rest. Airbus will change its battery by 2017 saying, "me bad".  They will brag they are the most advanced airline in the world with its NBO battery.  Boeing will be flying the 777X in tests gaining distance towards first delivery. The two markets in 2017 converge into one big realization that Boeing's 737, 747,787 and 777 are remarkable aircraft. Fantasy? No its not, its Boeing's goal for proven Boeing Technology. Its the continuous improvement slog through Boeing's stated goals. The only change from the script is that Boeing will not Break-even during 2015 but during 2017. Once this forecast die was set, it is a matter of execution for things Boeing does best. Build airplanes. However, its wishful thinking skills needs improvement.                  

Hot Dog, Its Shandong Down for Fifty Max and NG from 2016-2020

Just when the order book has a stagnation, and a press writing about thin orders for the first part of 2014; up pops this little press cork about Shandong Airlines from China, boosting its fleet with fifty: 16 NG's and 34 Max Aircraft until 2020.

Airline to buy 50 jets

Xinhua-Global Times | 2014-4-22 0:13:02 By Xinhua - Global Times

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China's Shandong Airlines signed a contract on Monday with the US-based Boeing Company to buy 50 Boeing 737 passenger airplanes.

The airliners, including Boeing's 737 NG and 737 MAX models, will be delivered to Shandong Airlines from 2016 to 2020, said Ma Chongxian, chairman of the company, which is based in Ji'nan, capital of East China's Shandong Province.

Shandong Airlines aims to increase its fleet to over 140 at the end of 2020, which will be a surge of almost 100 percent, Ma said.

Shandong Airlines already operates 74 passenger aircraft, including 67 Boeing 737 airplanes.

Xinhua - Global Times

Boeing is busy booking billions while  the report of the stagnate order book is greatly exagerated. 

2014 marches forward. There are other orders in limbo in the Asia market. Those with ANA promises and others have been reported, but not added to the order book, which is often the case as arangements behind the scenes have not been completed. Boeing will not add orders until the customers consents for a release of the information. Eventually it may end up on Boeing's unidentified customer list for awhile. This Shandong order represents a little more than a months worth of production when analyzing the over-all impact to the production line. Even though they will pace deliveries during the 2016-2020 four year window, it allows all parties a seamless integration of current aircraft with its future Max deliveries.

Using a rule of thumb financial scale with, Booking 80 million for NG's and maybe 100 million for each Max, an unofficial estimate would float around at 4.65 Billion $ US . Without out details on future Max aircraft, and only having some actual NG or Max unit numbers availble it is a safe estimate that Shandong needs that much money during the purchasing time frame mentioned.

Delta's Purchase Philosophy For Wide Bodies

Analysis of Delta’s Widebody Replacement Options for 767-300ER and 747-400

Airchive.com presents talking points and analysis of what  Delta may do when it comes to fleet wide body renewal. I will offer some counter points for its interpretations of buying older proven technology vs all new technology, when it scraps the aging Delta wide body fleet.

Delta strategy and philosophic channeling for Capitalization is a key part of its focus.  Buy cheaper older proven technologies, while avoiding high purchasing prices and follow-on high interest costs generated by the newest technology purchasing premium. That strategy will buy a lot of fuel and make up for lost efficiency when using proven current technology purchases like the A350 or 777's. Its a Ryan Air-like approach. On the table are those RFP aircraft from both Boeing and Airbus that are in play as charted below from Airchive,com web site.

Our (Airchive) full analysis is displayed below.

Aircraft	Boeing 777-9X	A350-1000	Boeing 777-300ER	Boeing 747-400
Fuel Cost	$92,739	$80,619	$95,937	$116,084
Maintenance Costs	$13,837	$12,282	$16,687	$20,859
Crew Costs	$20,447	$19,257	$19,257	$19,257
Navigation and Landing fees	$11,286	$10,791	$11,039	$11,694
Total Operating Cost	$138,309	$122,949	$142,920	$167,894
Cost per Aircraft Mile	$25.15	$22.35	$25.99	$30.53
Number of Seats – 3 Class	407	350	360	376
Operating Cost per Seat Mile	$0.0618	$0.0639	$0.0722	$0.0812
Capital Cost	$41,387	$37,037	$24,780	$12,181
Total Operating Cost	$179,696	$159,986	$167,700	$180,075
Total Cost per Aircraft Mile	$32.67	$29.09	$30.49	$32.74
Total Operating Cost per Seat Mile	$0.0803	$0.0831	$0.0847	$0.0871

The A330 NEO is a pending consideration for Delta as it needs further information about the aircraft.

Secondly, it does not fit its philosophy of venturing too far out from the development box, as it did when purchasing the 787 order. Even though they like the idea of going low-ball on the A330-NEO, and obtain an early place in the A330 NEO first delivery line, is a no start issue. The paper efficiency for a A330 NEO is questionable as Airbus has not made its mind up on whether to scrape the A350-800 project or go NEO for an interim period of time, until they get it right for the A350-800.

Delta would would like assurance on aircraft performance and reliability. A proven design is requested on this proposal. Airbus has dumbed down the A350 as it strives to deliver a fault free A350-900. They will thumb its nose at Boeing if it does. Boeing will have close to 200 787-8s and 9s flying by years end, and say it is the most advanced aircraft in the world, while Airbus only can copy with a simpler A350. Both taunts are lost on customers. Airbus would like Delta to stay true to its mantra of only flying what is proven. Boeing has made up tremendous ground with its 787 as proven ground. It will be in service for three years soon.

Back to the prize, the 777X and A350-1000 battle for Delta.  Neither the A350-1000 or 777X have flown. The 747-400 is getting old. What has not been considered in the Airchives article, is the economic and proven ability of the 747-8i. Snap, that fits Delta's own philosophy of sticking to the basics with high reliability. The 747-8i is a dark horse rising. You hear no Lufthansa grips and complaints. Delta could sneak on more than four hundred passengers on this bird, and pass the fuel bill over to the Accounts Payable division, where they may not even notice that 747-8i fuel cost at Delta. Go ahead replace the 747-400 with 8i's they may arrive sooner rather than later with its proven track record, where even the  A350 can't even muster a record, since it hasn't been built or delivered. The 747-8i is not on the above chart. I would like to see the comparison rather than the 747-400 unit costs. It would make an interesting horse race with its many more per seat cost per mile. Delta then could wait for its 777X RFP as it develops. It will receive is 787-8's and find out how well this aircraft operates. Boeing customers have used these 787's during the last three years as Boeing has executed  a frantic catch-up of reacting its proposed value for a Wonder-Plane. The press can't write hardly an article without reaching back reminding the public of its past glitches from the firs two years.

Delta could surprise everyone with 787-10 and 747-8i's orders.     It would have relative position for both production lines and meet its expectations on reliable aircraft sporting the newest efficiencies. Doe this kill the A330 NEO and the A350-900 or 1000? Yes ,on all three counts. Delta meets its strategic goals as well as keeping its vision intact by buying a Boeing suite of proven aircraft while shocking the airline world.

Air India Bridge Loan From Brooklyn.

The old sayings for having a weakness in your financial portfolio is "you're going to sell someone a bridge in Brooklyn, New York", or I had recently sold 20 acres of swamp land in LA as a measure of obtaining mad money". The problem with Air India is obtaining a "Bridge Loan" for Aircraft, specifically for the 787, within six months. They need $500  million (US) of mad money for a purchase of the next four 787. This is like going for  "Money Tree Loans", before the next paycheck. This covers/plugs a gap in the monthly financial flow, and allows making a timely purchase while not having to wait until its long term financials are set in place.

Why does Air India go there, because they need four more 787 revenue units that have a lower operational cost, which will infuse more money into Air India. The Bridge loan is a bridge cash account until Air India reconfigures its fleet. They are selling three 777's from its fleet. This alone demonstrates a concerted effort for maximizing the fleet. Perhaps those 777 can not be filled, and are flying too much passenger space around at a loss. The economics of the 787 will have fill-able seats quantity arriving at cheaper operating costs than the aging 777.

A bridge loan is a useful tool, but it shows a venerability of Air India's cash position. Demonstrating an inability from its operational efficiency where it has not achieved a plus position on cash flows. Four more 787s and three less 777 would start tipping the balance sheet. Air India is not there yet. The revenue inputs, and reduced operational expenses from the 787 shows Air India, that it needs all of its 27, 787's. This should right the Air India financial ship. If they can get them on the flight line fast enough. The baby steps are taken from Boeing's production schedule and its recieving blocks of money from the use of Bridge Loans.

When Air India goes into long term financing arrangements, they will have a per unit Revenue and cost center for each 787. They will demonstrate how a loan will make Air India profitable, and how it can easily pay for these aircraft from just flying them every day. Air India will demonstrate how it fills seats with these aircraft. It is the right size at the right time. Bankers will nod, look sternly, and stare at one another, and then will defer to its analytical team for a report creation of Air India's loan request. The Bridge Loan is like a credit card at higher interest rates for paying Boeing in behalf of Air India. The long term loan is a consolidation of potential debt under financial arrangements for these next four 787s.

As mentioned before these four aircraft will bring the 787 fleet closer to 20 of its type. A very significant portion of Air India revenue stream and expense reduction as a whole will help Air India over all. Each group of aircraft inducted is a change for the airline, as it opens up new opportunity where it needs to compete. The Boeing 787 is an "Affect" on Air India's financial position, business plan, and success. The company will simple change, because it will eventually have twenty-seven Boeing 787. It no longer will have reasons to fail, or lose money. It will compete with all its competitors until they too can have the 787-8 or 787-9 during the next ten years. Having the sharpest knife in the drawer does matter in this case. The sure weight of having one type of airplane as the core for your fleet makes the difference.

Will The KC-46 Be The Smallest Snowball Coming Down Capital Hill?

The Pentagon and Capital Hill create military spending projects and the "Hill" funds those same projects. A continuous flow of cost expands as a project keeps rolling down Capital Hill's slopes to a catechismic stop at the completion of a project. Think of past endeavors for the Air force. The F-22 which halted at 187 in number for its type. Far short of the initial desired want. The snowball stopped because of money and the cost of support per copy. Then the F-35 came along, a multi-role fighter where is was to be built relatively affordable for all services off the same design points. That is not working so well. It was intended to field thousands of this type and also sell thousands to its allies over a long period of time. The Navy, Marines and Air force are waiting in the wings for its proven batch of aircraft. The cost is rolling down the hill collecting more snow during the process. It will make one large snowball by the time it stops. The Military is not certain for its reliability yet as it goes through the paces.

Reference Link:

Why Boeing's tanker is Pentagon's least contentious multibillion-dollar program

The Navy bought a concept called Littoral Combat Ships. In fact they hedged the bet by building two types from different boat builders. The concept is for a combat ship that plies the coastal waters, like those found on the Pacific rim around Asia. Currently the beef is, they are in testing and they appear slower than was wanted during the the initial proposal period of requirements. So goes the money down Capital Hills Slope in Snow Ball Fashion. It just keeps getting bigger.

The KC-46 tanker project demonstrates not just new technology bolted onto an 20 year old proven airframe design, it uses an all new purchasing process addressing the snowball problem for military projects of its types. Procurement of new weapons or equipment that will stop expanding the cost problem that it currently experienced in former projects. The KC-46 procurement is contained by these types of constraints.

• The provider of aircraft (Boeing) is to use an existing and functional airframe meeting all mission requirements. 
• Boeing submitted a bid price that is fixed, any overrun is absorb by manufacture. 
• A buffer amount is provided as a result of Air Force change management during build. 
• Financial and timely delivery risks are born by Boeing.

The list for Boeing's do's and don't's is far Longer, as one can see it gets very complicated for the KC-46 project to succeed for Boeing. The GAO has recently completed a milestone review of progress and cost expended on the project. The main concern from the first review completed in 2013 indicated Boeing had gone through a significant amount of the "buffer money", mentioned earlier. Boeing responds with a report of where the  money was applied. Early on at the out-set of the project; there where multiple changes required, and start-up contingencies for a new project of this nature. By the end of the next year those issues would retire as the project matured. The GAO has a concern that the money has become scarce for purposes of including additional engineering into the final design process, and establishing the build process. There is very little contingency money remaining as the KC-46 project moves forward into its pre-production phase.



However, Boeing has a couple cards up its sleeve. One being any changes to the original design required by the Air Force are added on cost. Boeing can absorb cost of the project by using components from its supply chain or within the Company's R & D
catalogue. Boeing has the  ability for cost reduction when the build begins. All current cost are a result of all its new implementations for building this multi-role tanker. This last GAO report is seen more of a "We're watching you Boeing"  because some project money is dangerously low. After all the negatives, the GAO could muster, it seems that Boeing is in good shape for moving forward on the KC-46.

The 767 frame flies well and is strong. The biggest risks are any new technology bolted on the aircraft. Like fuel filling appliances. Defensive counter measures and a host of other features never used before for this type of aircraft. Boeing is banking that it has those items covered and its just a matter of installing and testing. Its not like an all new F-35.  This is a seriously tricked out 767 for military purposes.

Oh That Black Bird Is Back

Many years ago I was intrigued with Lockheed, "Skunk Works", and more importantly the SR-71 project. A top secret  project that left many fantasizing about its merits. I had one family member involved in its R & D and later on as a contracted factory rep with the Air Force, representing Lockheed and the SR-71. I gained little or no insight for its capabilities. All I learned came from books on the subject, and various nods, shrugs, and smiles from my uncle. He gave me a wealth of commemorative objects for milestones flown in the SR-71.



Then out comes this "Second Black Bird" from Boeing and Air New Zealand, refreshing all my memories of those heady days of the SR71. The times when it out flew over Russian, Lybia and Vietnam with missiles shooting at it during the cold war and the Vietnam conflict. How it ate and devoured Fox Bat engines (MiG 25). At the time, Russia (USSR) bragged, it had the world's fastest jet, yet the SR-71 flat-out, out ran every thing with wings, and almost all the missiles of the day. I remember those days, it was reported that the SR-71 skipped around the edges of space and back.

However, here comes the 787-9 from Air New Zealand, with those same eery markings of the SR.71 in an all Black hull.



Those same soulful stirrings are awakened again while looking at this beautiful Black Bird from Air NewZealand. Even though, I never rode in/on an SR-71, only a special breed of Aviators or Astronaut types did, I crave those child hood dreams through this new 787-9 aircraft. Today, a passenger only has to gaze out those huge windows and dream of going Mach 3+ in a SR-71, having its big Boeing wings flexing out its muscles in relative silence over the Pacific. The Kiwi 787-9 will ply those same oceans were the SR-71 once often flew, as it secretly observed the world scene.

Welcome back "Black Bird", you are a graceful and elegant super plane that will make many a dreamer happy like myself.

Even though this paricular Black Bird misses an all titanium hull, and extending engine nacelles for hyper jet speed. It brings its own swagger with its all plastic hull, super computers and newer and more efficient jet engines. There is a taste of titanium in the Air New Zealand's "Black Bird". It doesn't go skipping off space, but the passengers have plenty of space with its travel comfort while passengers are getting there safer and more rested.

The SR-71 did not have a wind tunnel for testing Mach 3+. Engineers of the day used Lake Washington, and various hydroplane hulls when determining final configuration. No wind tunnel would emulate Mach 3+ for testing wing and body configuration.

This new NZA "Black Bird" had a mass of computer models, wind tunnels and no slide rule-ruling for figuring out the optimal hull and wing build. In many ways this "Black Bird" is so far superior to the old Black Bird in its own rights. Both aircraft were purpose driven, but this one, the 787-9, measures how far the aviation frontier has travelled with its passengers. The old Black Bird is relegated to museums like Smithsonian. I salute the SR-71, and applaud Air New Zealand for its first 787-9 in all Black. A fitting tribute for aviation's progress.

The Marooning of The A350-900

This is an Airline Tale of great complexity, "The Marooning of the A350-900". The corporate wise guys from Airbus have marooned the A350-900 as the stand alone champion in the wide body market. Customers are rapidly shifting flagships over to other options. Boeing's Other Options, known as (BOO) has scared many Airbus' customers to a wider offering, fitting Boeing orders into its complex market niches. What has BOO done? It has shrink the A350-800 down to 34 on order as Boeing keeps selling both the 777X's and 787 family of aircraft. The Airbus sycophants (customers) move A350-8's orders up a class to the 900's, fattening that order book through its customer loyalty impulse. Customers own markets have no fit with the A350-900 since the A350-800 can't cut it, it goes ahead and absorbs an A350-900 instead. Route adjustments fall on customers of Airbus. This could bring on thin route condition where the former   A350-800 order turned A50-900 may have half empty airplanes flying those same routes once marketed for the A350-800.

That condition has left the A350-900 marooned in the wide body world as its fleet family members can't hold its oars against Boeing's family of aircraft, Airbus is marooned on "A350 Island". "But what about the A350-1000 who has a comparable order book with the Boeing 787-10?" The answer is, "exactly my point!" In less time that the A350-1000 has been offered, the 787-10, the 777-8 and the 777-9 have amassed a staggering number of sales for all classes which is more than easily twice the A350-1000 number of orders. It leaves the A350-9 marooned to fight the sales "Air War Battle" in the market place. In fact, the customer’s order for the A350-1000 has weak numbers, even though it has had multi-year head start on both the 787-10 and the 777X family.

Airbus is pondering what to do with its A333-300 as it considers going for a NEO platform or kill the A350-800 program. What a choice before them! If they kill the A350-800, then Airbus will have lost the plastic wars. If they reinvent the A330, then it means they take a step back and are pretenders in the plastic wars. Airbus may consider adding extra floors on top on its offices, just for jumping purposes. They biffed it big. It’s back to national pride of three countries to pull this out of the dumpster. Today (literally) Airbus is flying around in its only viable A350-9 model with Airbus employees, testing cup holders and footstools which are placed on board a fully plushed out A350. That A350 fancy seats makes it look like the 787. The dumbed down operating systems convince buyers it’s a safer way to go with little performance penalties. The 787 has developed a safety record exceeding expectation for a new aircraft of its complexity via FAA audit.

Airbus is marooned, with no help coming during the next decade. They half-heatedly threw in on the A350-row boat. They can't figure out how to inflate sales numbers upward to get off the island. The A350-800 chamber has sprung a leak and is now down to 34 units under 787 pressure. Love for Airbus is blind, they still have suitors with 34 on order for the A350-800.

When judging its one trick pony, the A350-900, you sense the staff is huddling in one corner of that Toulouse building. Yes, they have a preponderance of A350-900 on order, but it’s not a one size fits all aircraft. Many of those orders rolled forward from former A350-800 class of orders. Thus marooning the plastic order book, and making it a marooned one trick pony in France and Germany.

What is missing in most discussions of who should buy from Boeing or Airbus, is the value indicator discussions. Those discussions on value hold equally with the fuel economy. The Boeing family of aircraft hold more value. First for its flying customers and second value for its on-ground operations. Boeing has imbued a tremendous amount of value into its aircraft. Airbus does offer a lot of add-on bling to its frame as illusions of something new is happening on board. But it isn't happening at the level Boeing has achieved. The never before implemented advanced systems on the Boeing has lived up to its promise, and can't be matched at this time. Closely monitoring the Airbus statements, they are careful to, "never say that they have something advanced of Boeing". That is a strange observation for an all "New" Airbus aircraft. They have nothing forward and beyond Boeing. The fact of the matter is the main difference of how they assemble with plastic panels on a frame, as Boeing rolls out single unit barrels with internal frames as part of the barrel design. All other differences are not advancements for Airbus, but it is the best they can do on short notice technology. Marooned again at the drawing board.

The only thing that would rescue Airbus in this quandary is scrap the A350-800, scrap the A330 Neo idea, and build something all new while the A350-900 still has an order book. That will get them (Airbus) off the "Island".

The Three Phases Of The 787 Orderbook

The 787 is experiencing three phases of order maturity. It has just completed phase I and is part way through the second phase. where corporate cards are now on the table with defensive ordering. The Spring Offensive was tumultuous and complex with out a rational thought of only getting hands on the best Aircraft ever built. Vicious counter offensives were mouth as casualties mounted. There where exploding batteries. brakes on fire and can't catch break months going by as 787 orders mount clear up to over 850 initial orders where there weren't orders before for this type of aircraft. Kayos ensued as Boeing's battle flag flew high, and so goes the epic phase I of airplane conflagration.

3 Phases of The Boeing 787 Order Book and sales

1. Spring Offensive
2. Winter Defensive
3. Resupply 

The second phase started about 6 months ago where airlines started mounting its offensive through defensive purchasing. Lessons learned in the first phase is you can't keep a good idea down or in this case a good airplane down. The idea was promulgated forward with a knock off breach from the A350's. It catered to the loyal customers and sometimes not so loyal Boeing customers, like JAL Routes needed protection by ordering more 787's, because they now have progressed out of the frying pan into the market place fire. Lease companies  like Gecas and ALC ordered forty 787-10, because they had customers who were in winter defensive mode. "A hora nunca", was the battle cry. 787-Tens for everyone who still want to win. Never mind that knock-off A350-1000. Its paltry 151 sold types don't even come close the big X bird from Boeing who has closer to 300 sales  or almost double of Airbus' 150 A350-1000 units. The winter defensive is about ordering sooner rather than later to protect your routes with really good aircraft such as the 777-9.

Resupply, Phase 3 for sales:

Boeing has not entered this phase officially, unless you count ANA's recent 14 787-9 ordered. Resupply comes on the heals of financial reports of several watched airlines. It is important for an airline to know that the 787 "Sea change" has shifted bottom lines. More resupply orders will be coming forward replacing dividends for 787's. Phases 3 is an important period as it could validate Boeing's big 787  gamble.

What has Airbus Done? A paltry attempt of reinvigorating its A330 as a cheaper knock-off of an 787-8 with its no start A330-NEO, which isn't an option for most serious players. The A350-1000 is a quick and dirty response to anything Boeing with plastic or metal wings. Bigger is not better, even when the bigger is going to be significantly smaller than Boeing's better 777-X. The leaders of said European companies and Desert like countries should take a vacation and clear its collective heads before listening to the same sales pitch one more time as it signs on the Airbus bottom lime.

A concluding observation is for a perfect ordering storm is waiting for Boeing. The factors contributing to this storm is as follows:

• Financial numbers demonstrate a companyis in the plus from 787's
• Financial Resources are made available
• A definitive defensive plan for more 787 is required as routes become available.
• Resupply and fleet expansion are the same thing. The first Born 787's (phase I) buy more follow-on 787's. 

This storm is forming for the last half of 2014 as Boeing begins to run the inventory of back ordered 787-8's decked to the "nines" going out the door at 6-4 split a month. Most of, or,  if all the factory and supply issues are retired and under permanent observation as part of quality control measures. 10 months is more than duable at Boeing has mapped a reasonable production rate. It just a matter of time before Boeing arrives to that 10 a month benchmark 

Boeing's 1st Quarter Revenue Deposits From Its Delivery (Sticky Note :<)

  Boeing's First Quarter Numbers For Aircraft Delivery 

737	747	777	787	Total

1.  35                     6         4         45   January

2.  36          2         8         4         50   February

3.  44          2        10       10        66   March
--------------------------------------------------

T# 115       4         24      18       161   *Totals  

Projecting the Year  Based on First Quarter Performance X's 4

     460       16       96       72        644  GT 

*Production as a Simple Projection:

The 787 should deliver closer to 100 units and the 737 will deliver closer to 60 more units. In all a more accurate probablity of 700 + aircraft for Boeing is a better number than just extrapolating 1st quarter numbers times 4. The trend on the 737 is at 42 a month from this point forward, and the 787 trends towards 10 a month during the second half of the year without question.  

  

LOT Makes Money On "The Dreamliner Effect"

The DreamLiner Effect is simple. Buy Dreamliners and make money.

Travel Agent Central;  Link, and Publication Credit.

LOT Polish Airlines Achieves Profitability in 2013, First Time Since 2008

April 3, 2014
Even though LOT has taken many administrative actions affecting many processes and staffing. An audit pointed out weaknesses, where LOT responded and acted through change management. The central core change was the 787 it has purchased. LOT projected in 2012 that it needed to go through an effect-change by structural decisions towards profitability. The first big item affecting the bottom line was the 6, 787's it purchased as the core of its fleet. It makes money. LOT then address a more efficient way to run its business.
Five years ago LOT did not have a way out of its dismal position. The change management would not be enough to over come its loses during operations. It would probably fail.Enter the "Game Changer", the Boeing 787. Combining a change management approach with the Game Changer has made LOT profitable. It is at the cross road of breaking out as an airline leader, and carefully anticipates each subsequent Dreamliner in how it will play in its fleet.
The problem comes into play as more airlines acquire the Dreamliners. The market place has taken notice and is placing its Dreamliners near LOT's airspace. Airlines like Norwegian and British Airways are plying the same destinations. 
LOT needs to carefully decide where the DreamLiner needs to go, just as they have stated. Its becoming a "DreamLiner Chess Match".  LOT considers how the 787 Queens Bishop can cover Chicago. Norwegian Airlines move its 787 like pawns on the chess board with seasonal coverage in resort regions of the world. Japan Airlines builds its chess board with 787 castle like routes. Each route is run with precision and the returns are computed directly to its financials. That is a quick review of what the DreamLiner has done for them. Least we not forget Ethiopian, the jury is in and they are guilty of being successful with the DreamLiner before and after its debilitating fire at London/Heathrow. 
The Dreamliner chases off competition from (those) other market beaters. Passengers are getting use to a DreamLiner experience and are now considering it the expectation of air travel. The Boeing problem occurs when a 787 Glitches and the passengers are booted off the 787, because of a false code. While the 787 is checked, they may find themselves on an A330 replacement. I would call that experiance a "Does Not Meet Expectations 787 Depression", (DNME787D). 
LOT has a few chess pieces in the game. They are critical for its survival of where they will place them on the world game board. Each 787 follow-on delivery is vital to its profit margin for years to come. The LOT "Board" has some skin in the game, and is destined not to loose. In 2012, I mentioned the Airlines to watch and what they did with its 787. Those particular early 787's  affected each customer's bottom line. The short list was and still remains import, as a bell weather result for the 787 financial impact.

• Ethiopian
• LOT
• Japan Airlines
• ANA

I also said Air India, would be something not to watch as it was in so much turmoil, and remains so. 
Then Japan Airlines blinked. It will be interesting to watch them as they finally establish its 787 fleet. Look at its bottom line number before they take delivery of the A350, and watch the side by side operational numbers. JAL's blinking has failed a reflex for the eye lid back open.
If everyone of those early customers who were skidding around the loss meter is now substantially flying above the P/L line, then the case is made that the 787 lifted up those same customers by the boot straps in a turbulent market place and makes them money.