Recogition, Self Awareness, and Boeing Production Increase

Long ago, Boeing made thirty-two 737's a month, and was satisfied with that number. Mean while back at the Airbus barn, they produced near forty of its type for its customers. Boeing gave a big yawn in those days, satisfied with its own play book of 747, 767, and 757 churning out the door.  A main problem existed with the Boeing yawn. The backlog was coming to an end! Boeing needed a "Sea Change" as it was about collapse under the weight of its own lethargy. That change flew in the face of Boeing conventional wisdom. The only big back log was with the 737 and 777 models. Both were cash cows for the company. Boeing needed cash quickly if they were going to turn this company around and beat Airbus. To do so, they needed a new aircraft family, a refreshed 737 Max and a mini Jumbo that would slice up the airline dichotomy with an award winning 777X. Money, Money, and more Money was needed.

The playing cards were on the table and they were just a few to play. A 737 and 777 backlog as the other models were dying. Boeing had to liquidate back log for cash in order to build the 787. It had to increase its order book to survive. Boeing needed a game changer and difference maker. It also needed to recharge its order book. The order is like charging the production battery. But at this point, in 2004, Boeing had to power up that order book with an older offering of aircraft. The 737 NG, a waning 767, and the 777 300-ER. The 747 was slim in the order line and it needed a boost itself with orders.

Orders ultimately equal cash flow and "profits". Excessive cash margins are  relative to profits when delivering airplanes. Boeing needed to install new profit gears like the 787, 747-8i, and 777X. It needed  to reinvent the 737 into the Max. All taking capital investment or cash. It, Boeing needed sales. Two thousand two hundred Max later, Boeing resupplied the order book. Boeing needed deliveries (cash). Hence the forty - two 737's a month. Now its looking at 52 a month. It also went deep into the play book with one hundred 777-300ERs a year, with no help coming from the 747-8i, or a 767 cadre of tankers yet to be accounted for in a tangle of production slots.

Boeing has pulled its lethargic dilemma from 2004, shrinking it's backlog as if pulling itself up from its bootstrap. It has essentially caught Airbus, and made a pass on the fast production track. Not only has Boeing met and exceeded expectation in marketing, but in customer satisfaction, using its hold card from increased production while it still had a back log to draw from. Now its backlog has grown by 14% this year over last year. A remarkable gamble paid off as sales are spurred on from increased delivery.

Customers can now count on receiving product when they need and are ordering with confidence where Boeing will meet its promise. Customers are planning fleet renewal and expansion around that promise of timely delivery. The 737, the littlest engine, that could, is chugging up the hill for Boeing opening doors with new customers. During 2014 it surpasses the NEO 2014 orders at this time. A strong part of the catching and passing process against Airbus. The 777X promise has stemmed the tide against the Airbus A350 Family. The 787 remains a cost pig.

This cost pig marks its line at 22.5 billion in the hole. Boeing says the tide will turn at half past 25 billion, and start a profitability binge. If Boeing is correct then its robust effort on efficiency will pay dividends from the production floor as suppliers as well as builders will hone the cost downward for each 787 made. Boeing is losing money on each 787 delivered at this point. It assumed it would not go past twenty billion sunk, but has already eclipsed the number by more than two billion and will dig a little deeper when it reaches past twenty-five billion sunk. What is Boeing doing to squeeze down towards a profitable 787, is all the predictable actions.

• Factory design efficiency and production floor renewal
• Supplier streamlining
• Boeing recapture from under performing suppliers (bringing some assembly home)
• The Learning Production Curve is Maximized

All of these points have been enacted since the first 787 flew out from the doors. It's the always improving model.  There is still some inefficiency margin remaining, and it's open for leaning out towards profitability. Boeing is reluctant to increase prices for its customers, but it will have to consider some price adjustments in sales round two. Sales round one sold one thousand or more 787's. Now Boeing has invested a great amount of capital on 787 improvements, and must recall that investment expended on improvements through price adjustments. It's simply stated that the current production craft are better than first delivered aircraft, where the 787 should cost more in the second round of sales after 1,000 units ordered are delivered.

The Boeing increase production strategy has worked. It built past the naysayers when the backlog started to shrink from increased production numbers. Because of that gamble, customers responded by ordering more aircraft. Boeing gained important cash infusion. It became a counter balance to the 787 program cost. The 747 hangs on by just an order thread. New life for its ilk are found in upcoming freighter orders, and some passenger slots, as airlines seek the sweet spot. If the 747 can find a customer sweet spot, then it will live another twenty years on the delivery block. The 787 becomes a Boeing tool purchased, not only for passenger travel, but as a follow-on play book for succeeding aircraft such as the the Max and 777X. The gamble won from increased production is pollinating Boeing's future aspirations through its many new commercial programs. The production floor has made this all possible, enabling Boeing moving forward with its engineering acumen and for its aviation grand play. 

Boeing Is Shifting To Over Drive

Boeing is not just stopping at 42 737's a month or 100 777's a year, it is going all-the-way with three new big bodied and one single aisle flea flicker pass to the end zone. Its a busy place for Boeing as both production teams and financial execs are scrambling in a mad dash to seize the opportunity in its counter move on Airbus' aspirations. It may leave the European giant flat footed as Boeing scores a triple play. No longer is Boeing just satiated with sitting on its laurels, or it is not looking back on past exploits since the 707, it is moving forward without regard of Marquis of Queens-bury rules in this latest round of pugilistic airplane making actions.

The 777X is no lie as it will surpass the Airbus' 30 years of investment  found with the A350 family. The 787 is going forward by another leap, as its most advanced systems become cherished by flight-line knights of the wrench. They, (the systems) will tell the ground crew which nut needs tightening and when. The much overplayed reports of 787 miscues, mishaps and mistakes are well, just print fodder for publications. Yes they exist, and are problematic. However, part of any process is to make it perfect after millions on lines of code and more millions of parts are played out each time the 787 flies. What is more important is that Boeing expected developmental issue to arise, and they planned for four and five different ways to keep the 787 safe, intact, and flying. That has worked as planned and expected. The most complex jet in the world performs better than anticipated. As it matures, the jet becomes more outstanding. When the A350 is delivered it will still lack behind what Boeing has done for another thirty years. It is big and it is bigger and it leans on biggest when advertising smuck takes over. The 787, Is it what customers want. Some say yes and some say no. That is the nature of business. But the real question is who is better? Not who is the biggest?

Boeing is once again attempting a mini Jumbo make-over and a single aisle renovation. It is developing a tanker which will compete with the A330 tanker ordered by other nations. The military set Boeing up with an older air frame technology, while Airbus is re configuring its A330 frame in an international tanker competition. However, Boeing is bringing forward a 787 like avionics package, improved engine technology and the latest in a military counter measures. It will be a real work horse and not a dolled up commercial airplane dressed in camo colors. Boeing is stuck with changing its wiring scheme in the event of a missile strike or other strike, so it won't take all the electrical out with one well placed hit. Boeing is going back and rewiring the systems all over the KC-46 tanker where you  would have to cut the KC-46 in half to take it down. Because all wiring systems are independent of each other, it will supply avionics, fly-by-wire system and other critical systems with power unless the KC-46 totally explodes.

I hope that by reading this, one will gain an understanding of Boeing's all-hands-on-deck mentality during the current quiet news cycle in aviation. Its not your dad's Boeing! The Boeing work force doesn't have time to ponder about "what if's", because they are doing the "what ifs" now! On every front there is a Max effort to win the day in the manufacturing business. They don't have the GM attitude of, "if we build it they will buy". The Boeing attitude over-all is, "we are in it to win it". Even though not all is perfect in Boeing Land, as labor always continues plying for its needs, Boeing is more focused than it has been during the last fifty years or since the war years, in the 1940's back when Boeing was focused and much smaller. Now they are gigantic and are regaining that focus from its leadership onward down to the floor. If the execs stay focused on stock holders only, they will lose it all. The stock holders will come if they execute well with its amassed technology, work-force and vision. These three components insure the success of Boeing. The investors will come when they have those ingredients. They now have now those ingredients.

The Tale Of Two Plants, An Epic Digression In Metal Works

Boeing Everett and Boeing Renton are going to the well with its new planes. The 777X and The Max respectively. At the North End of the "Boeing Triangle", is Everett's new under construction buildings for the 777X. The intent is for plastic wing making not unlike the 787 wings made in Japan. Everett must reinvent the 777 in a duopoly building scheme for both the 777 300ER and the 777X projects. It has started by making a satellite building around the 777's ground zero for significant structures assembly, with wings that will attach to the assembled 777X, namely, its complex lifting surfaces made of plastic. Metal large parts constructs can come from Spirit systems by train. Other supplying contractors will feed the beast as specialized parts are built from around the world and shipped to Everett. Including Japan's aviation making submissions.

Puget Journal Biz Journal Photo

Rendering of One Million Sq Ft. Everett Wing plant for the the 777X Below:

Puget Sound Business Journal Photo

At the southern tip of "Boeing's Triangle", is Renton, and the MAX. Rather than building expansion's for the MAX they are re-configuring the production floor. They will slot in the 737 Max at its first station inside its current production space. An area it has made available for its first and initial assembly area where it can continue forward, and slide in through insertion to the full production line. The initial aircraft will probably reach completion in that Initial area until mastery of the new Max is achieved. After which a continuous stream will develop for delivery aircraft, once test aircraft are completed, flying and certified by aviation's governing bodies.

Below is the southern tip of "Boeing's Triangle", the Renton, WA Facility and Air Strip.

737 "Max Spot" floor clearing for first construction of the Max aircraft. Note the NG line adjacent to the "Spot" with a fully formed green bodied 737. I anticipate the Max could slide in behind the NG's from this location when Boeing ramps up its delivery production units from the "spot" as soon as testing is complete and approved by aviation authorities.

Boeing Photo From Randy's Journal

The final point of  "Boeing's Triangle" is at the apex found at Boeing Field where all new types land and strut its stuff. Both the 777X  and the Max will debut at Boeing Field when inaugurated with a first Landing as the 787 completed its debut.

     

Photo Credits: Davis Monthan Aviation Register

Airbus Puffs Its Chest Through EASA Certification

The XWB A350 has gained another puffing bench mark with its European Aviation Safety Agency certification greater than the American ETOPS certification for Boeing's 787 family aircraft of 330 minutes. They awarded Airbus an  extra 40 minutes single engine flying time with a  370 minutes ETOPS rating.

Sans Engine, Fueling A-350-9 Under 370 Minutes

What does it matter? Not much at this time, since most to "All" common routes fall within the 330 minute ETOPS certification from the US governance of Airlines. Airbus can now stick another sticker on its body with the XWB , moniker,  ETOPS 370 Euro designation. The 787 won't bother with anymore puffing stickers, as it is concerned with fitting the market better with its 787 program. An extra forty minute single engine certification on the Airbus A350 will not alter its routing in the market. Unless a new, never before routing occurs, and straight line flying is required for its unique distance flying around the globe, during any two points encountered.

However, this becomes a useless John Leahy talking point at the next airshow. Airbus has the XWB going 370 minutes ETOPS on one engine. I couldn't stand the suspense for 370 minutes on a single engine stretch of the Pacific anyways. Its nice to know you can circle the nearest airport an extra 40 minutes in your XWB ride waiting to land if needed.

XWB is a term when comparing bodies in inches for the 787 and feet on single aisle. It becomes extra weight over the life of the airplane. The 777X will not be a good Airbus comparison as it will be a 2XWB over the Airbus configured dimensions. I am also confident the 787 could test for the 370 EASA certification, if it needed to do so. Since it has already done the 330 ETOPS, which defaulted an acceptance within the European governance, it won't need to do so for the 370 ETOPS. It's just an additional plane sticker for airshows, since the FAA doesn't have a 370 ETOPS classification in its certification program.

The Max Attacks The Future As 50 More Are Ordered

The "Max" or the 737, where the MAX gains fifty in an order today as announced with Indonesian Airlines,  "Garuda". This opens up a new classification for ordering that has been around for a long time. A current customer bridge order. Garuda, a long time Boeing operative, has reached near the end of its order book with only a remaining four 737 NG's to deliver. The Boeing sales team is counting the order slack from prior orders to bridge with any new orders, by refreshing its order books with the Max. In Garuda's case, by the time this latets order was signed for, they trimmed four from the backlog and added it to this new Max order. New orders equal 46 Max,  plus four prior orders converted Max, equaling a total of fifty.

Boeing measures prior orders remaining, airline company growth, and fleet renewal factors as it would launch a campaign with an offer where Garuda  should not refuse. Even though an order sometimes takes years in the making, Boeing would need to start further back on Garuda's delivery Que in months, before the order is complete. Garuda came through and established its fleet renewal needs with its expanding fleet needs, ordering 50 Max.  A continuity bridge is established for the single aisle type. These are the little details that are always under consideration when an airline orders, as Boeing stays focused on a customer needs. Its a commonly occurring type of order when linking existing prior orders with a new order as a "Current Customer Bridge Order". This completes a trickle down effect going to the ultimate customer, the passenger.

Passengers have gained an appreciation, expectation and familiarity for an aircraft such as the 737. The airline is positioned, trained and  managed for that type of aircraft with a certain knowledge of what it will produce for its profits. The sales team must assure those customer expectations will expand with an all new 737 MAX where it will exceed those established company bench marks with a significant change. Garuda plans that a profit will occur in greater abundance, where a certain amount of that profit can be dedicated for financing follow-on deliveries from this new order. The win/win result is increased customer appeal, tickets and expanding routes.

Boeing sales has made significant headway with the Max, and is closing in on the NEO from Airbus. Something has happened in the market where the MAX is getting more sales legs and is moving at an awesome rate of sales. Boeing has gained 722 in number, with 737 sales types this year. What has not been added to the order book is in the Billions of US dollars. Ryan Air has not yet booked its 100-737, Nor has Garuda 50 been added to the Boeing 737 book on its web site (soon). Just those two un-booked numbers would bring the single aisle order book for Boeing to 872 for the year. There are several others hanging orders for finalization with Boeing. In all, it is safe to predict 1000+ 737's ordered this year. Even though Airbus has not stopped working in the market place, it too will add more orders before year-end.

However, Boeing continues to eat away Airbus' NEO margin lead over the MAX. There are so many moving parts to a placed order. So many its not practical to list them all on this blog. If a company had a 100 point check list for its own business model, where one column was Boeing and the other was Airbus, Boeing in 2014 is winning that check list battle with more checks gaining a buy summary.

Of course items on a proverbial list would include a matrix with: fuel, seat numbers, maintenance cost, and so forth. Boeing is winning the internals checking by going down the list, including capital outlay at purchase.

The NEO rush  during Airbus announcement year where place holders from dedicated Airbus' customers. The second year since the Airbus announcement is Boeing's first year, actually started about 14 months after the NEO  launch announcement. It was at an obvious order disadvantage. However, Boeing has a striking change in the balance of who ordered what. Lately its been MAX upon Max. Customers have read the MAX white paper and really like what it will do for its own business plan. Even dedicated Neo customers are reading the reports, since they are having to compete with that pesky MAX as it expands its base.

Boeing used to consider itself fortunate to break the 1000 order barrier, in a given year for all its types combined. Now the 737 may reach that number by itself this year. As two and a half months remain with significant un-booked orders to be added.

Congratulation to Garuda, its a note worthy Bridge to the future for both the airline and Boeing. Its a battle for the best value and the 737 MAX  is gaining value over the NEO in this market.

No Chem Trails Con Trails Just This: Montana Hot Springs

The Lodge:

My Family are my roomies

103 degrees and some friends of mine enjoy the "Tel" guests Private Hot springs

We jut got out of the soaking pool 20 minutes ago from posting this blog.

Rainbow lights at night, Didn't need them, the forest around us is more incentive. Pretty Hot Springs Pool, though.

The wild life just around the corner from us take one for the team.

Another Zumwalt Note and Why I Love This Ship DDG1000

When I first read this quote, I celebrated with Joy. The Zumwalt will be Captained by none other than a man named James Kirk. Here is the quote for your own imagination and enjoyment.

Sidney Daily News Quote Link:

"Built with a stealth-like design intended to reduce the ship’s radar profile, the Zumwalt’s futuristic appearance seems fitting given that the ship’s commanding officer is Capt. James Kirk.

The ship has advanced technologies in every area – engines, power systems, weapons systems, shipboard electronics and sensors – making it one of the world’s most capable ships. When at sea, Zumwalt will perform a variety of missions including attacking targets on land with gunfire and cruise missiles, hunting and tracking submarines, airspace surveillance and support to special operations forces.

Longer than two football fields, the ship is 80 feet wide and weighs more than 15,000 long tons when fully loaded. Twin gas turbine engines can push the ship through the water at more than 30 knots. Zumwalt is named in honor of Adm. Elmo R. “Bud” Zumwalt Jr., who served as chief of naval operations, the Navy’s most senior uniformed officer, from 1970-1974."

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I would pay to go on a practice cruise on this ship with Captain James Kirk. I do pay by the way with Income taxes, but not from this blog Revenue :(> .

Petty Officer 1st Class Benjamin Platfoot is a fire controlman and leading petty officer aboard the Zumwalt. From Sidney Ohio 

I salute you, with hand on heart.

Beyond The Seat Mile Addiction

Airlines today have a penchant for seat/mile profits and efficiency. The end of that goal is putting as many passengers on for a given trip at the lowest operating cost. There is a second layer to this approach, and it’s not about raw density numbers and efficient operations. It’s about what the airline company offers with its equipment. Much like a cruise ship, people don't care about the cheapest ticket by 5% advantage but the travel experience. That is why passengers often rely upon expectations when traveling. They want to go on board knowing they will have an outstanding experience when traveling for a particular airline on a particular aircraft type. Hence the case of the Air China's first 747-8i.

Case in Point:

Photos: Inside Air China's Boeing 747-8 first, business class

The above link from Australian Business Traveler inspires the Idea for business travel as well as the vacationer. What an airline does with it cubic feet allotted from the aircraft frame is just as or more important for selling seats than fuel economy. The 787-8i provides space for airlines. As in cruise shipping manufacturing, no one cares if a ship is built in Bath Maine or Spain. It’s how the ship is fitted and the experience gained. The choice is between a Motel 6 for $59.99 per night or Comfort Inn for $99.99 a night. It’s your choice.

What did Air China do to its 747-8i to make your valued choice more productive. It gives you its first 747-8i with many choices from the Business Traveler to the Vacationer. It is a high valued experience with a solid economic footing. If you have not linked with the article above, here are a few pictures and my rational for what I see on the Australian Business Travelers Article, below.

 

Towards the pointy end second deck of the 747-8i are the moguls of industry sitting 1-2-1 across first class. It is a purpose filled space without the fluff.

"Contains first, business, premium economy and economy class across a total of 365 seats."

Business Class is all Business when comes to comfort and room. Below (ABT Photo)

Upstairs is private space for either the Execs or the refined traveler.

Getting there doesn't have to be painful by having a semi-standing posture from an under pitched space. It can actually be a happy experience on an airplane design for travel. Premium economy for a few dollars more than economy is worth the reservation and price. Shown Below (ABT Photo)

Doing ETOPS for 10 Days

Extended Trip Out People Socializing (ETOPS) for 240 hours is my next attempt at normalizing with society. I will be in a sketchy mode at best, writing blogs. There are 432 blogs listed on LiftNdrag at your disposal during the next ten days. If I am able I will post either something snarky or informative about aviation. Since I'm going to the back woods and further into the mountains, it depends how much wifi I'll have from Kalispell, MT (Nearest town with a mall). Enjoy all the older stuff and think about bears chasing my family around the wilderness and "Park".

Single Aisle Notes For 2014 Orderbook

The 737 has orders for a net total of 712  while the A-320 Neo has two hundred less at 512. Hold on a minute, what about the A-321? Okay I knew somebody from Airbus  would ask that question in "order" to make a point, so let's add another 146.

Order score (Net) as of September 30, 2014

Boeing                   Airbus
1000                        791

Boeing still leads the single aisle order market with that addition at the end of September with 712 Boeing 737's over the Airbus 658 A-320-321's. Not to rub it in on Airbus too much, let's change the subject to production.

The production score is as Follows on September 30, 2014:

Boeing            Airbus
528                     443

Boeing has an over-all production lead for the year by 85 units. Further analysis is taken. Boeing has produced 80 more 787's than the Airbus' 0 A350's to be fair during this period.  It has produced more wide-bodies cash cows than Airbus including the line-up of 777's and a couple of 747's just because they did.

Where did I stumble on these facts?:

The Peninsula (Qatar)

Boeing is not sitting still any longer in the midst of doing what it mentioned several years back. "We need  increased production for our customers sake." That they have done it, and addressed it as they go forward in the next 6 years with 52 a month 737s. The way they are now outselling the A320 NEO they will need that increased production in Renton, WA. Suppliers, its time to ramp up to 52 parts a month for both NG's and Max.