The Death Of The 767 Is Greatly Exaggerated

The 767 isn't dead as it took its largest 767 order in the history of the program during 2015.

A Seeking Alpha 767 Snapshot

If you would count orders and active considerations, the 767 lives on into the freight world as the type that can make freight business run.

A list of what's up with the 767F: per Seeking Alpha 767 Report

• FedEx @ 69 with 50 more options
• Air Force KC-46 @ 179
• UPS ponders its fleet renewal while considering 50 767 Freighters
• SF China ponders for ordering 30
• Amazon ponders for ordering 30-60

With this short list, a total of 258 frames are dialed up with customers during the next decade, ... and if all active considerations are tallied as the potential for the 767, it could mean another 190-767 could turn into hard sales before this decades ends. In other words, the total 767 order book may become resurgent as a tanker, freighter and possibly passenger airliner in the upcoming years with a potential of 448 frames identified by customers from this point forward. More to come...?

The semi-truck of the skies doesn’t need 787 like GPM (Gallons per mile)rating. It is lighter than a 787 hull and is needed for freight hauling. Having a reliability rating of over 98%, and an almost zero delivery waiting period, makes the 767 desirable for freight operators. Even some second tier airlines see a niche for the 767 for its fleet as a passenger carrying capability traveling under 5,000 miles. For the long haul, the 787 would be a better match for any airline.

The magic number of 20% efficiency variance with the 787 defines the niche for the 767 as an effective tool for going from point A to B just hauling everything. The military couldn’t even put the 767 dog down, since it bought 179 KC-46 tankers as an effective military component. 

The A330 with a superior passenger configuration did not beat the 767 when morphed into a tanker bid. The 767 is very much liked for its durability and reliance, a key component for military service. It’s not so strange when thinking about freight, it rises to the top of the buy list when thinking about Mack trucks and air freight.

Seeking Alpha illustrates  how burning 8,000 gallons on the 787 is the same as burning 10,000 gallons on the 767 while going to the same place. Sounds semi-truck like, using fuel numbers compared with an RV. The current price of Jet A ranges according to region, nation or locality. Seeking Alpha went with a visual, but used a math number of $5.00 a gallon for a thumbnail in its estimation, which is good enough for an illustration. The fuel cost cash receipt difference, from the 787 or a 767, factors about $10,000 dollars cheaper for the 787, since only burning 8,000 gallons when going the same distance as provided from the above example.  

The purchase price interest rate cost, when buying a new 767 for $199 million versus the 787’s $250 million purchase price, would mitigate additional operational fuel cost by a significant portion. Additionally, even buying a used 767, the fuel consumption cost compared with buying a newer efficient aircraft, and has a significant impact when applying a 767's diminished interest cost as counted in operations accounting, or as compared with any other airplane type or maker. 

A new or used 767 would considerably reduce its accumulated operational accounting cost (bank loan interest is included on books) significantly, and a used 767 purchase makes more financial room for any additional fuel cost when compared with buying new generation (787) or when acquiring any 767 instead over the purchase cost of another type.

If buying a 777 freighter, the business plan would include extra-large loads or uniquely configured freight bulk. Hence, charging a larger per piece freight charge. The 777 requires a greater revenue stream supporting its higher airplane purchase price. A business can easily see a need for letters, packages and sundry via 767. A freight business tends to charge via parcel quantity movements, priced at a rate supporting a 767 operation. If moved on a 777 freight, it would require a different price rate table or freight type in order to stay in business. 

The 767 has a business niche unmatched and will stay unmatched since any newly developing competitor airplane equaling the same haul capacity would make its new airplane sale price so high it couldn't compete or could it obtain any profitable scheme competing with "the long paid for R&D, on a new/not new 767 purchase price." Therefore the 767, will be around awhile until unit costs drop with the plastic airplanes competing with the 767 business case.

The 1767 Lafitte Credit: Pricy Spicy

One of the rarest bottles ever sold was purchased by Christopher Forbes for a mere Â£105,000 ($160,000). It was an unmarked green glass bottle with the inscription of “1787 Lafitte Th. J.” (now known as Lafite and thought to be owned by Thomas Jefferson), found behind a wall in Paris. The third president of the U.S. is also associated

Boeing is positioned for optimized profit every time one is ordered. Long gone are the R & D expenses, and entry into service costs when refining the concept with its customers. The 767 has a cost refinement down to achieving optimal production output with optimal profit margin. The 767 has a 98% reliability history.  Boeing has aged the 767 as a fine wine, into a vintage blend of optimal manufacturing efficiency with optimal function efficiency when keeping the 767 going into the freight market position.

The A320 B.O. Late? Let's Crow Some, and Eat Bagels In Seattle.

Being late for entry into service is not so bad. Boeing heard it from its arch rival Airbus minion since 2007. Boeing's 7 Late 7 became the mantra. However, we here, at the scallywag post can't even rhyme with the A320NEO with some sort of "late slogan". The remainder of the day will be dedicated for just rhyming with NEO. Because it really stinks that Airbus is two weeks late and not three years late, it raises the ire of something stinky. The A320-B.O. does almost fit while rhyming with NEO. If you don't take a bath on your Airbus stock then B.O. is succinct and it can cure the B.O. of lateness, if only by two weeks.

Remember the 787 was an all-new plastic airplane and the A320 B.O. is a metal replica of its vaunted single aisle swag. Oh come on Airbus! Laugh a little, live a little, being late really stinks if the A320 B.O. is late being delivered in the second week of January 2016. After-all Airbus had plenty of time making the B.O. slide out the door during 2015. The single aisle gap will narrow by a fortnight for the Max introduction and entry into service date. How important is it to be on time? Not very, in the scheme of things, and only if you complain about a competitor who tried to do so much more with its 787 compared with the A320 B.O. lateness. 

Remember Boeing wasn't building an all new aircraft, it was also rebooting a whole company with a common theme, concerning every type matters. The 737, 767, 777 and 747 will have advanced architecture beyond what the former aircraft had before the 787 started and now all will fly like a 787. The 787 was about Boeing stealing the march at every level not just on one aircraft. It took an additional three years to realign Boeing's design and technology advances now used in every new aircraft design, including the MAX and the KC-46.

So a two week B.O. delay is nothing to crow about, but does deserve a wily smirk and a chuckle just for old times’ sake.

Final 787 2015 Year-end Snap-Shot After Jan. 7

Boeing.com has posted it will provide a final order count for 2015, will occur on January 7, 2016. Therefore, Winging It will publish its analysis following Boeing's final numbers are posted when they become available. Usually it has been my attempt by posting Winging It analysis at the close of a month or shortly after a month closes so the next summary should post about January 8, 2016, once Boeing shares its data with the public. So goes the blogging world.

Boeing Information Note from Boeing.com

Orders through December 22, 2015

(Next update, including final 2015 orders, will be January 7, 2016)

The A380 Slowly Fades In Stage Three Of Market Pulse (Part II)

The demonstration today is about the various periods or stages of an Airplane Order cycle.

1.  Promise (Authorization to build announcement date and initial ordering until Production starts) 

2. Production/(delivery period starts with entry into market until customers start reordering the type)

3. Performance (signals a double down on a successful program when significant reorders and up-orders for larger types are booked.)

  

The three stages above could be quantified in math formulas from data after an aircraft framer announces a new and huge aircraft type. The cases brought forward are exemplified by the Airbus A380, and the Boeing 777X. Even these two different classes of airplane each having different philosophies for supporting its inceptions, also cross each other market lines within the world markets. Making them an interesting study about ordering.  Because the cost of buying these two aircraft represent immense fortunes for any customer, it takes on a process using mathematical smoothing when determining risk and before any sense is made about what aircraft will settle the WB battle. 

In other words, the risks are from cost of buying (or not), and it represents a value found in the Airline Company's affirmative purchasing schemes or decision making.

Winging It Reference:

The A380 Makes The 777X Extraordinary (Part I)

The A380 has entered into stage #3 identified during an order life cycle called "Performance Phase". The 777X has entered into stage #1 “Promise Phase”, of its own order life cycle. Taking both of these different two aircrafts, and examining its respective order histories can help map out future numbers predicting an order flow for each type. 

The first effort is drawing a circle for charting the respective order dichotomy of the Market. There is only a certain potential a market can absorb concerning the orders for super large aircraft, or any aircraft type for that matter. The circle chart represents 100% for super large aircraft types and its market potential. 

Even if only one airplane type is in play, it may not sell up to a total market potential, because not every customer can match its own corporate needs coming from just one maker, who happens to have a super large aircraft for sale. 

Therefore, even having a sole sourced A380 available as the Jumbo default offered, it does not include all customers who were interested in a super sized flagship. Boeing swooped in during 2007, and upgraded with its 747-8i having a small dampening effect on the A380 sales progress. Boeing then again switched gears in 2013 announcing the 777X family of aircraft. It's the old counter move using the 787-8i blocking and gaining more buying time perfectly. They made a wedge in time for its secret 777X completion schedule formed back in 2007, and have aided the A380 complacent spiral downward all the while as Boeing got it going. The 777X jumped through the time hole, while the 747-8i provided a counter block slowing the A380 for another market score.

The limit of the A380 orders has a finite quantity hidden in the Venn diagram circle, even if there are super bodied aircraft that are smaller, a market remains available for ordering. Boeing is counting on the Airbus stage three A380 marketing status where it will give Boeing an opportunity for its stage one 777X. So far it appears they are correct, as Boeing's 777X strategy will be validated when it reaches its own stage 3, of Performance. The 777X family straddles the market when compared with the A380 size or its capacity metrics. However, Boeing is counting on the 777X flexibility for making its fortune. The 777X can out dispatch, out fly, and out arrive the A380. Boeing is counting on not caring about passenger capacity per aircraft when it examines the 500-800 passenger level, but it makes the A380 appear unimportant in the scheme of things. 

Proof comes from observing order history from both framers of the WB class.

Customer	Entry into service	Firm Orders	Deliveries	EA	RR	Press Release
Air Austral		2		*
Air France	2009	12	10	*		[3]
Amedeo	2016	20				[4]
Asiana Airlines	2014	6	4		*	[5][6][7]
British Airways	2013	12	10		*	[8]
China Southern Airlines	2011	5	5		*	[9]
Emirates	2008	140	69	90	50	[10][11][12]
Etihad Airways	2014	10	5	*		[13]
Unidentified Customer(s)		10
Korean Air	2011	10	10	*		[14]
Lufthansa	2010	14	14		*	[15]
Malaysia Airlines	2012	6	6		*	[16]
Qantas	2008	20	12		*	[17]
Qatar Airways	2014	10	6	*		[18][19]
Singapore Airlines	2007	24	19		*	[20]
Thai Airways International	2012	6	6		*	[21]
Transaero Airlines	2016	4		*		[22]
Virgin Atlantic	2018	6			*	[23][24]
Totals		317	176	148	156

As you come to appreciate the facts, only 317 units of A380's have been ordered in the fourteen years since 2001, or known as the start of stage one A380 orders. However, It has demonstrated going from stage one to stage three, the A380 is rapidly becoming the "A380 white elephant" of which many aviation experts had initially predicted.

777X Summary Through November 2015

Model Series			Orders	Deliveries	Unfilled
777X Total			306	-	306

Customer Name	Eng	First Order	Orders	Deliveries	Unfilled	First Delivery
All Nippon Airways	GE	31-Jul-2014	20	-	20
Cathay Pacific Airways	GE	20-Dec-2013	21	-	21
Emirates	GE	08-Jul-2014	150	-	150
Etihad Airways	GE	17-Nov-2013	25	-	25
Lufthansa German Airlines	GE	17-Nov-2013	20	-	20
Qatar Airways	GE	16-Jul-2014	60	-	60
Unidentified Customer(s)	GE	04-Jun-2015	10	-	10

Model Series			Orders	Deliveries	Unfilled
777X Total			306	-	306

The stage one of the 777X order number count resides at 306 units and counting, validating the concept before its first stage ends in the year 2020, and even, before entering into stage two order cycle known as Production/delivery. The Production/Delivery stage can only establish the Performance stage 3. The Production/delivery causes a stir in the market as other potential customers weigh the merits of the 777X. 

The Airbus A380 had settled at 189 purchased during its Stage One order period, and it cannot go any further since by this definition it's locked in after entry into service. However, once the 777X Production/delivery "Phase two" begins in 2020, it will ice the A380 as the biggest loser. 

When the 777X reaches its final "Ordering phase three", or a successful performance phase, the A380 becomes "Dumbo the elephant.

Additional Information regarding the A380:Program History Orders

Order: analysis:

Stage 1: A380:   189 Units (currently in stage 3 with 317 A380's ordered).

Stage 1:  777-X: 306 Units and its counting continues until first delivery arrives in four years marking the start of 777X’s stage two).

As an example using the 787 program, Boeing announced in 2004 it would build the 787 where it gained 348 initial orders through 2006. Once the 787 body pushed out in 2007, 267 orders were booked in one year. After first delivery in 2011 and the "Battery problems" following, it gained only 86 orders for those two years ending in 2012. 

However, since the "Promise Phase" began, and since the 787-10 announcement, the "Production/delivery" phase including its overall battery solution, during the 2014 and 2015 order period continues with a solid 138 more 787 orders. The Airbus A350 orders began to languish in 2015, even though it has not experienced any battery problem. The total is zero A350's ordered this year. Though the A350 "Production Phase" has begun its delivery schedule is topped with only 13 delivered in 13 months. A slow start-up is apparently costing Airbus some orders.

Boeing 787:

1. Promise Stage = 787 units ordered

2. Production stage = 362 units ordered, until it transitions to Performance stage. The production stage ends per each customer, when Boeing adds newly booked aircraft for a same type (i.e. 787) while having a prior order history from the customer for that type.  

3. Performance Stage = further analysis for the period is required. However, follow-on orders have begun showing-up similar to ANA's, who has since ordered 3, 787-10's, or Norwegian Airlines ordering 19 more 787-9's this fall. This illustrates stage 3 orders defined as coming in for the performance phase for ordering.

Ordering a 787 is more confident decision than ordering the A350, and now customers are getting one in a reasonable amount of time.

If the Classic 777-300ER orders are added in this comparison, it's obvious game over for the A380 in spite of what John Leahy can sputter at the next airshow.