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Sunday, April 5, 2015

The Dreamliner-Kidman Affect

WHCA DINNER
Nicole Kidman is being criticized by American Airlines flight attendants for being a spokeswoman for Etihad Airways.

Nicole Kidman was enlisted by Etihad as the face of its airlines. Flight Attendants in Fort Worth/ Dallas- American Airlines, naturally would protest, as it has its own flight to Dubai, and says Etihad wants open skies, as in "Eyes Wide Shut Kidman". She just looks so good saying so for Etihad. American Airlines disagrees with the concept of open skies, and its flight attendants are in a hissy stand-by flight status over the whole Kidman look.

Flight Attendants Have Bone to Pick With Nicole Kidman

THEY'RE NOT PLEASED WITH ACTRESS'S ETIHAD AIRWAYS AD CAMPAIGN

By Evann Gastaldo,  Newser Staff

Posted Apr 3, 2015 9:20 AM CDT


(NEWSER) – Nicole Kidman is a UN Women Goodwill Ambassador ... and yet she also appears in ads for Etihad Airways, a United Arab Emirates-based company that has been accused of treating its female employees badly. A US flight attendants' union has taken issue with that, the Guardian reports, writing an open letter to Kidman explaining that Etihad and other UAE airlines "are well-known in our industry for their discriminatory labor practices and deplorable treatment of female employees" and noting that the airline's alleged behavior doesn't exactly jibe with Kidman's statement last month, on International Women's Day, that "I envisage a world where all women and girls have equal opportunities and rights."
Specifically, the union says, "the Wall Street Journal has publicly reported [Etihad] 'may fire women if they become pregnant' and forces flight attendants to live in 'confinement' in secure compounds" (see that December article by the Journal here). Etihad swung back at the allegations in a statement that specifically refutes the pregnancy discrimination claim. The Association of Professional Flight Attendants represents 25,000 American flight attendants who work for American Airlines and US Airways, and its letter is supported by Americans for Fair Skies, a lobbying group that backs other US carriers that are unhappy with UAE carriers. The group put out a statement calling for Kidman to end her "puzzling and unsettling" relationship with Etihad, the Dallas Morning News reports.

Source News.com.au:
A white paper commissioned by US carriers claimed that since 2004, Etihad has received as much as $22 billion in government subsidies and interest free loans.
The 55-page document titled “Restoring Open Skies” said along with other Gulf carriers Emirates and Qatar Airways, Etihad had been able to rapidly expand its fleet and international routes “seriously distorting the commercial marketplace and diverting global traffic to their hubs”.
It singled out Etihad as “unlikely to be in existence” without government subsidies and guarantees.
The airline has acknowledged receiving equity investment and shareholder loans supplemented by $US10.5 billion in loans from international financial institutions.
But addressing the annual Aviation Summit in Washington this week, Hogan hit out at the US airlines behind the white paper, and painted Etihad as the victim of jealous bullies.
------------------------------------------------------
I call all this commotion, "the Kidman Affect" on Dreamliners, I'll book a ticket with Etihad, if Nicole tells me personally to do it. It's as simple as that!

Saturday, April 4, 2015

Pent-Up WIP 787 Will Release In 2015

Those terrible teens orphaned in the 787 Production Purgatory (8 each), Those early 787-9's found in the Change Incorporation and Re-work holding tank (5 each) until its errant parents can fork over the bond money, and the shrinking buffer of preflight preparation goes from about 17 down to 12, represent a clearing of the flightline decks. By the end of 2015 the teens should be two. The tanked should be flying and the flight processing stage should be 6. Boeing will have made its guidance. It will produce a consistent 10 a month for 120 787 from factory to customer and adding pent-up Works-In-Process, it should go into the mid 130's delivered for 2015.

The question comes up how do I know that will happen? It is simple, it can't go for 12 a month production without it happening. The WIP and holding tank is a road block for 12 a month production, and the change management plans for adding the 787-10 would be stuffed with backlog of not sold or delivered. Part of Boeing's efficiency plan considers the introduction of twelve a month production pacing and the 787-10 project. It needs square footage available for the 777X project as well. The 787 has grown up and needs to go to customers. That is why the feverish pace is seen for delivering the terrible teens. Japan Airlines and New Zealand Air needs it 787-9 by the end of the year and out of Change Incorporation and Re-work status.

Everett is to become the work engine for both the 787-8 and 787-9 during the ramp-up process as Charleston, SC prepares for its 787-10 production. Does that mean Charleston will stop producing the -8 and -9 at this time? No, it means it will slow down its scheduled production of all its 787 slots for a short while, as it assembles the first test 787-10 testing aircraft. Everett will take on a full production effort during during this time to assure Boeing's 10-12 a month pacing is in place while Charleston gets its arms around the 787-10. Boeing South will be making all types at the same time but at a slightly slower pace. Everett will shift to a slightly faster pace as Boeing will balance for its guidance.

Boeing is now trying to empty the flightlines, the change incorporation work space and every other place it could use when maximizing production levels in Everett, so Boeing will meet its guidance during the next 2-3 years without any clumsy delays at its delivery cash register. They will to deliver above 130 in 2015 for its preparation for the 787-10 production and factory introduction.

Friday, April 3, 2015

Missing The Qantas Half Year Report? At The End Of Australian Summer...

...is not so bad if you are not from down under.

It was written by CEO Alan Joyce earlier, "Qantas is hoping for an even financial performance from its divisions before optioning for his 50 787" as shown in Boeing footnotes. So Far so good, International and other Qantas operations are positive growth and profitable. The half year report summarized best below, as all signs suggest Qantas will order 20 787-9's which have firm production slots if they do the deed before years end. 

The highlighted text below represents Alan Joyce underpinnings for completing a 787-9 order of 20, with assembly slots starting in 2017, and another 30 would not have dated assembly times into the future until Boeing assigns those 30 slots, during purchase negotiations.

Qantas Half Year Bullet Point December 31, 2014.

Qantas.com.au credit for JPEG <Link

Latest Half Year Results

View the highlights from Qantas latest and previous "Half Year Results" announcements as well as the accompanying Media Release and Australian Stock Exchange (ASX) release.

Results for the half year ending 31 December 2014

  • Underlying Profit Before Tax: $367 million
  • Statutory Profit After Tax: $206 million
  • Qantas Transformation Benefits: $374 million
  • Revenue increased 2.1 per cent from improved yields and loads
  • Comparable unit cost reduction: 4.8 per cent
  • Cash generated from operations: 1 billion
  • Positive net free cash flow: $194 million
  • Liquidity: $3.6 billion, including $2.9 billion cash
  • Earnings per share: 9.2 cents
Qantas is half way through its second half year results bullet point extravaganza. But here is what Joyce had to say for any student wanting 50 787-9 ordered by Qantas. (WI)

Qantas Group Half-Year Results Sydney, 26 February 2015 

Today I am pleased to report the results so far of the fundamental business transformation that is underway at Qantas. 

Qantas today reported an underlying profit before tax of $367 million for the six months to December 2014, and a statutory profit after tax of $206 million. 

This is a $619 million improvement over the same period last year at the underlying level. 

The decisive factor in this result – our best half-year performance for four years - is our transformation program, which delivered $374 million in benefits in the first half. 

Without the impact of transformation, Qantas would not be profitable today. 

The other positive drivers in the results were:

 $208 million from reduced depreciation; 
 $162 million from increased revenue per available seat kilometre; 
 $59 million from the removal of the carbon tax; and 
 $33 million from lower fuel prices. 

This result confirms that we are executing the right plan with discipline and speed. We are meeting, or exceeding, all our targets as we build a strong, sustainable future for Qantas and grow long-term shareholder value. Since we announced our transformation program in December 2013 we have:

 Lowered our cost base; 
 Grown free cash flow and revenue; 
 Improved fleet, product and service; 
 Strengthened customer satisfaction; 
 Reduced debt and strengthened the balance sheet; 
 Improved our return on invested capital; 
 Achieved our youngest fleet age in more than 20 years; and 
 Simplified the fleet from eleven to nine aircraft types, on the way down to seven. 

What sets this program apart is that we are reducing costs permanently, while at the same time delivering Qantas’ best ever fleet, product and service. 

We now have a strong foundation for sustainable growth. 

I want to express my deep appreciation to the people of Qantas who have worked so hard to make this transformation succeed. 

 2. We have come together to protect this great Australian company and give it a sustainable future. 

I also want to thank our customers. 

We are delighted to repay their loyalty with even better Qantas experiences today, and more rewards to come in the future. 

All parts of our business have contributed to this good result. 

Qantas International was profitable for the first time since the GFC with underlying earnings of $59 million, a turnaround of $321 million over the same period last year. 

Over the period it cut unit costs by almost 4 per cent while revenue increased by nearly 5 per cent.

The partnership with Emirates is now more than two years old and it continues to deliver. 

We've seen exceptional customer satisfaction with our Dubai hub and increased range of destinations, which in turn has given us a significant competitive advantage. 

With smarter fleet utilisation, Qantas has been able to offer new or additional capacity, including seasonal flights to Vancouver and additional services to LA, Santiago and Japan. 

Our new A330 product and lounges in Singapore, Hong Kong, and Los Angeles have been met with acclaim

In 2011 we set ourselves the task of getting Qantas International back into profit. We expect to achieve that goal this year, on target. 

Our domestic airline businesses performed well over the half – with total domestic profitability of just under $300 million. 

The Qantas Group strengthened its position substantially in the domestic market. 

Qantas Domestic reported an improvement of $170 million compared with the same period last year, with underlying earnings of $227 million. 

With its unrivalled network, frequencies, lounges, and Loyalty program, Qantas Domestic retained an overwhelming 80 percent revenue share of the Australian corporate market. 

 3. Looking at large corporate accounts, we recorded 113 renewals, 42 new accounts - with 16 of those won back from the competition - and just four lost. 

Customer satisfaction with Qantas Domestic was at record levels in the December quarter. 

The Jetstar Group continues to build scale and brand presence, flying to 66 destinations across 16 countries in the Asia-Pacific. 

It reported underlying earnings of $81 million, an improvement of $97 million on the same period last year. 

Domestically, Jetstar achieved earnings of $63 million, driven by improved yields and loads and a continued focus on managing costs and capacity Strong Jetstar International earnings of $51 million reflected the benefits of a network restructure and the roll-out of the Boeing 787 Dreamliner. 

Qantas’ investments in the Jetstar-branded airlines in Asia will generate long term returns in the world’s most important emerging markets. 

These airlines improved their performance in the first half, relative to the prior period, with a $13 million reduction in Qantas’ share of losses. 

Jetstar Asia in Singapore was profitable in the December quarter. Both Qantas and Jetstar have won a string of awards and recognition for product, service and safety. 

Qantas Loyalty continued its outstanding performance. 

With 10 per cent earnings growth, Loyalty achieved underlying earnings of $160 million. 

It attracted more than 400,000 new members in the half, to reach a new high of 10.5 million. 

Continued innovation and investment in programs like the online mall, Aquire, and Qantas Cash card, have helped grow, diversify and maximise the customer base. 

They have brought in a younger demographic, with 60 per cent of new members aged 36 or younger. 

Qantas Freight delivered underlying earnings of $54 million, a strong improvement which was driven by significant recovery in the international freight market - outweighing a challenging domestic market. 

Overall, this result demonstrates the continuing strength in our portfolio of integrated Qantas Group businesses. 

4. The Group’s financial position improved significantly with more than a billion dollars in cash generated from operations for the half, up nearly 45% on the prior year. 

The outlook for the Group’s operating environment in the second half of this financial year has improved after a turbulent period. Demand is mixed in the domestic market and steady in the international market. 

Importantly, market capacity – both domestic and international – is moderating and aligning more closely to demand. 

Yield and load factors have stabilised and are in the early stages of recovery. 

Lower fuel and Australian dollar values have, overall, improved our competitive position. 

While fuel prices produced a modest benefit in the first half, we expect fuel costs for the full year to be no more than $4 billion at current prices – which will be a significant boost to the bottom line in the second half. 

And we expect all operating segments to be profitable in the full year. 

Today’s results are good and we take pride in our progress so far. 

Transformation has been central to our recovery and we will drive it forward with all our energy. 

It is about making ourselves strong and resilient through the ups and downs of economic cycles. 

Over the next two years we will further strengthen the Qantas position. 

We will be a company able to withstand tough times, capitalise on the good times, and deliver sustainable and attractive long term returns to our shareholders. 

We will be a stronger integrated Group portfolio where each business complements the others, generating sustainable returns through the cycle. 

We will always be the airline that represents the best of the Australian way of life. 

And today we can see a bright future for this great Australian company. 

Thank you. (Alan Joyce Speaking)

--------------------------------------------------
What the highlight in yellow indicates, Qantas in the next four months can be convinced on completing its commitment by ordering its options, 50 787-9's, as some (20) are already reserved for production slots if acted upon. If Qantas does jump on its option plan, it will not lose out on pricing of approximately $187 million US per copy as rumored, otherwise missing it they only can expect receiving any 787-9 during the next 5-7 years with a stated Boeing list price of about $250 million US,. It must not miss its option deadlines as it would miss out on millions in savings from the original pricing commitment. Alan Joyce sounds optimistic about Qantas closing the deal,  His vicarious and enthusiastic Half Year Report almost says it, "We are really buying some Boeing"! Firming the option during the next six months awaits the slot machine cherries to line up. Qantas would start receiving 787-9's by 2017 as it goes for it in a non gambling position. 

This ordering sequence would mesh well with Jetstar's 787-8 delivery completions and Qantas domestic and international passenger growth. Plus its other stabilisation plans. A Boeing purchase, through its option of 50 787-9's, intersects well with Qantas' overall goals for its different operations. 

Jetstar has demonstrated a financial improvement generated from its own business position. If Jetstar had not gained altitude with its 787-8, Qantas would have forced a sale of the Jetstar brand. However, the reverse has happened, Jetstar is mopping up the market in the region while Qantas waits in a standby slot. That is soon to change in the fall. Qantas will close the deal and not lose its 787-9 assembly slots, as it will have its banking in a row after completing one year operating with the new business plan from all operations. The one year mark ends during June 30, 2015.

Boeing 787 Net orders Jump Up By 30 Today, Hainan?

Could it be Hainan or somebody else? Its unidentified!




2015 Net Orders663-734110

Customers737747767777787Total
Alaska Airlines6----6
All Nippon Airways5---38
GECAS2----2
Korean Airlines---5-5
Ryanair3----3
Silk Way Airlines-3---3
Unidentified Customer(s)55--23289
2015 Gross Orders713-735116
Changes-5----1-6
2015 Net Orders663-734110



737747767777787Total
I think its Hainan since it documented a stock advice-commitment for 30 787-9, the other could be anyone.
Changes since last update: 31 new orders (Unidentified Customer(s) one 737 and 30 787s). Identified All Nippon Airways order for three 787s previously listed as unidentified. In the changes category, reduced 737 net orders by one.
 Winging It: 787 Program Data sheet for the 787 (adjusted with Boeings updates).

2011
2012
2013
2014
2015
Total
Beg Backlog 736 778 773 891 842 736
Delivered 3 46 65 114 30 258
Ordered 45 41 183 65 34 368
Ending Backlog 778 773 891 842 846 846
Back-Log Delta 42 -5 118 -49 4 110
Total Boeing 787 Order Book
Ordered Delivered Back-Log
Total All Time 787 1104 258 846

Thursday, April 2, 2015

The Tide Has Shifted To The 787-9 and Air India

Today it was reported by The Financial Express where the 20th 787-8 signals a sea change for Air India as it considers converting its remaining 787-8 orders into 787-9 orders. Air India originally ordered 27 787-8's. It remains to be known, if the 7 remaining will be 787-9's or a combination of both. However, it must make a decision by the end of April to gain the earliest slots possible for any 787-9 deliveries with some 2017-2018 slots open.
The Financial Express Quotes:

"However, if Air India decides to go with the Boeing 787-9 variant instead of the older version, deliveries will begin only by 2017-18. If the airline decides to go ahead with the older variant, the 787-8, it will get the twenty-second aircraft by November, the twenty-third by December and the twenty-fourth by early 2016.
Air India is slated to take the delivery of its twenty-first aircraft by June. The airline had in 2006 placed an order for 27 Boeing 787-8 (Dreamliner) aircraft. It took the delivery of the first Dreamliner aircraft in 2012.
The fuel-efficient Dreamliner aircraft are key to the airline’s return to profitability, according to the government- approved Turn Around Plan (TAP).
“Air India will have to inform Boeing of its decision to upgrade the order by April so that we can work accordingly to deliver the aircraft,” Dinesh Keskar, Boeing’s senior vice president (sales), Asia Pacific & India, said."
Maybe Air India was bit by the Hainan bug as it has 30 more 787-9 under consideration for 2021 deliveries. If so an earlier,  "Winging It" prediction was true when the news came out Hainan mention of a 30 Airplane purchase in its stock filing notes. Winging  It concluded Others would soon follow mopping up available slots for the 787-9 in 2021. See:

cross link: (Hot News Of the Day For Boeing)

"The importance of this intent underscores the order book dynamics that are now in play. A shrinking order book and slots have emerge as the motivation for jumping in with 30 787-9's with order is an urgency by Hainan. The Opportunity index has risen to a level where airlines are now in the backrooms negotiating for the existence of 787 slots. Opportunity index during 2014 was dead, and now after 114 787 deliveries from 2014 proving and the steady start in 2015. The light at the end of proverbial tunnel is well lit for wide body customers like Hainan who has jumped first. Others will follow as the pace will quicken during 2015."

After considering this planning announcement, it stands to reason the change order is far along the process. Earlier in the year, Air India announced, a Sale lease-back (SLB) combo tender open to leasing companies. Air India's proactive financial arrangements for its current fleet indicates future planning is in play where a 787-9 order is imminently in the works.

The only negative, Air India faces is the pause in its fleet expansion plans if it switches the remaining standing order 787-8 converted into 787-9. A two year delay is in play waiting for additional aircraft. It would slow its feet expansion schedule. Other financial considerations could be in play, but not likely at this time. Air India could continue with the scheduled remaining seven 787-8's and then make an additional individual order for a half dozen or more 787-9's within normal order book availability, or as Boeing's backlog would allow. Boeing could be the decider for that type of ordering sequence.

If they offer special discounts on either the optional change order of switching to 787-9's from 787-8's on the remaining unfilled orders, or making an additional stand-alone 787-9 order, it will completed in the next 30 days. Either way Air India seems to struggle with financing from its government or from its own financial worthiness.

However, it has gained a financial improvement from the 787-8 in service, and this could be the tipping point for this "Winging It" speculation. Has the 787-8 done its job turning around Air India's profitability projections enough? Can Air India sustain meeting its commitment for conducting a significant follow-on order, or will it complete a change order instead, on its existing books? If the answer is yes or yes (either way), by the end of April the Air India 787 family of 787 will expand it's fleet dichotomy in seat count and route range.