On The Cusp Of The 400th Dreamliner

Boeing started delivering the 787 in the fall of 2011. Since that beginning it has suffered smoke, fire, and groundings. It was stated, Boeing may have a "Bridge Too Far" for its aspirations in the latest generation of aircraft. It was often called the 7 Late 7 as a humorous slam towards its three year late on arrival to the market. The problem was Boeing stuffed the aircraft with a NASA like technological ambitions. It became the commercial airplane answering all the checklist items for a dream machine.

Boeing is on the cusp of delivering its 400th Dreamliner by April's end 2016. What has been validated is enormous. It checked off economy, environment, and customer appeal in one model progression. The innovations discovered, implemented and appreciated have become its legend. The culmination of its journey start is the 395 flying customer versions to date. Even though the reach forward by Boeing was farther than any aircraft framer has ever attempted, it pushed through with a flying record of unprecedented safety. Part luck and mostly innovation has kept the 787 intact and without mishap of a hull loss. Which is a polite way of saying a crash. 

I am not tempting fate by mentioning the word "crash" as with all aircraft types ever built, there have been incidences that make the hair stand on end. The Boeing 787 will be no different over time. It will have its moment or may have already had its moment when something does not go according to plan.

However, Boeing, and as other makers try for perfection, while using its build processes through a continuos improving way, in which to prevent any mishaps. The 787 represents a quantum leap in preventing such an occurrence, other than the things the man cannot control, and with that even weather anomalies become a fly over. The myriad amounts of data tracking, sensing, and onboard systems management found on the 787 has allowed it to complete its maturation until the 400th Dreamliner will be delivered by the end of this month. This blog could have been written last year when it delivered its 300th Dreamliner. But the 400th is a significant milestone because it represents the always improving model of the 20th century carried into the 21st century.

The 400th 787 also is a benchmark comparing against its rival Airbus. The counterpart A350 has only delivered about 20 A350's in comparison. It is a less sophisticated representation with its prolific use of older technology refined from the prior generation of aircraft. 

The 787 is in a class by itself, and that recognition will clearly be found out as time goes forward. The 787 duration in service will over match the A350 duration in service just from its use of conceptual vision of best technology applied to a new airframe. Even though Boeing had its battery problems, it was a risk for something better, and was supported with knowledge that the 787 was not dependent on the Lithium-Ion battery exclusively.

Someday Boeing's competitor may incorporate "787 like architecture" on its own aircraft. Having a core electrical system was logical even though no one had done it before. Electronic window shades was a doable concept Boeing believed it was ready for this implementation. The E-window shade has evolved since the first delivered 787, and now the windows will be a more complete fixture for the customer, as it will be able to give 100% darkening for its customers. The "competitor" was risk averse even on the window shade issue, and still employs window slats for its passengers instead. Even though this was a touch from the 1930's from the curtain era. 

Boeing also centered on an all-electric airplane system where it does not use bleed air bypass energy from its engines, while going with bleed air bypass system it could contaminate the air. The cabin environment has become one of the big issues today where the prior generation cabin air can make passengers sick while using the Bleed Air bypass system as it introduces contaminated air into the cabin. The 787 has the best air for the passenger’s experience period.

Boeing introduce a concept for its flight ride. Sensors determine rough air and make appropriate trim adjustments for muting the effects of turbulence occurring on the typical airplanes today. It provides customer comfort and peace of mind. I know when getting off the airplane usually the first thing spoken to family and friends in waiting is: "it was rough ride going over the Rockies". The 787 provides an environment where a customer remarks about the food service rather than turbulence terror.

The 400th Dreamliner will make you smile as it has a continuous improvement from its first dozen commercial Dreamliners. In fact Ethiopian Airline has purchased one of the terrible teens assembled in 2010. It is bringing its next delivered 787 up to a current standard. The only penalty coming forward is its overall aircraft weight coming from that first run as a heavier than current 787 aircraft coming off the production line. Even having an additional few thousand pounds included from the "early teens", performance is remarkable for the first 787-8.

Boeing is making number 400 for the airline customer and its travelling customer with the same scale of importance for each category. The airplane customer is keenly looking for value, and the Boeing value has increased since its first introduction. The travelling customer wants the experience of flying, as part of its rest and relaxation regimen. Once a passenger leaves the Jet way and boards the 787, the airport part is in the past. Since Boeing has taken special care and technology fashioned for the passenger experience. 

The only thing remaining is determining who will receive the 400th Dreamliner. It may be Etihad receiving a 787-9 on April 26, 2016.

Boeing Photo Credit

The Max Attack Has Begun

Boeing has entered if first 737-800 commercial production type on its line. These are special times where learned lessons from the NG, 787 and 747 projects. They will produce seven production (delivery) models but will not be ready for delivery until the engine maker goes through its testing and Boeing tweaks its test model until satisfied or when they have found a "Seattle Nirvana" replication. 

Rumor has it, Boeing may be months ahead with its Max schedule. They want a smooth roll out for the 737 unlike its arch rival Airbus who biffed it on the NEO having its engine retrenchments and step backs after it delivered its first single aisle Neo for Lufthansa. It has since re engineered its engine not meeting initial operational specs for its PW1100G needing extended warm-up time.

Boeing wants specifically a perfect first delivery to its customers with its CFM Leap engines. If they avoid those NG, 787 and 747 introductory drags, then it will have a leg up on the Airbus offering when selling the Max. The A320NEO has teething woes for its bread and butter single aisle offering. 

Boeing will hang cement blocks under the first delivery models until all engine testing is complete. The importance is not only for reliability issues but its often quoted 14% fuel increase over the NG. If it does tune the aircraft successfully prior to first delivery it will avoid a similar situation Airbus is now experiencing with its own A320NEO's coming off the line. Boeing will hang fundamentally complete advanced engine technology under its wings. Boeing is ahead of schedule and has its developmental program under control for the 737 Max. 

A Foreseeable Market.

As slow as the market seems to most observers of aircraft sales, it is suggest a market pause predicated on what the fuel price will do. The price per barrel of oil will boost or freeze sales at this junction. A true pause has made both Airbus and Boeing work harder pushing the respective order books. With Boeing's 122 net sales during the first quarter 2016 and then Airbus only netting a ten count, the manufacturers must rely on the foreseeable market trends.

Continued low fuel prices will grow the industry from the demand perspective. New aircraft orders for the latest airplanes will go into temporary repose as currently experienced during 2016. Leasing used airframes is a hedge against long term capital intensive acquisitions. As, and when fuel prices rise, a pent up need for new generation aircraft will rise to the top of the firing order for the market place.

This is the current position for having all new generation airplane orders flooding the market from wide body to single aisle frames. The new norm for fuel will have a steady but modest increase going forward until 2018. The modest fuel price increase will allow the market to settle with a steady but lower purchase pace. One American Company, Delta, has yet to commit for its MD 80 replacements. However, because of the used single aisle supply having a robust inventory, Delta will use the right time-right price strategy for replacing its fleet of older aircraft. The Airbus NEO backlog maybe too deep for Delta and Boeing's factory production of NG's may accommodate Delta at the right time for the right price.

A transition to the MAX would be made easier for transitioning forward using a low ball NG purchase and converting some of the single aisle in a purchase block later on by changing remaining open orders into MAX orders at an appropriate time. The Airbus book is too far out with its NEO's and the 737 NG is a better aircraft than the A320 CEO. A win for Boeing would make the Boeing order book draw closer to a 50-50 split with the Airbus offering.

Once fuel prices begin turning northward, it will signal a much anticipated resumption of a stable oil market from its current collapse of $40 per barrel price. A $70 per barrel price will begin to move more duo aisle aircraft for both makers. Boeing has a favorable and smaller 787 backlog at this time over the Airbus A350, as mentioned in a prior Winging It Blog. The Boeing 2016 book orders currently lead Airbus' paltry net of 10 ordered. In the coming months Airbus will have its order day, but it will be important to notice if Boeing continues its 40 ordered a month pace during the 2nd quarter 2016. If it does, and Airbus remains relatively quiet, then there is definitely a backlog bias in Boeing's favor.

The GAO's KC-46 Report Card

Below is a link which will help those entering summer with a reading report: The KC-46 has spent its time upfront and has little or no time to get it right before production authorization is achieved.

The GAO KC-46 report Link 

Commentary is withheld, as with all government audits, an audit meeting ends with a "We Concur"

Meanwhile, A Downsized Airbus Will Stick A Potato In Its Shorts

Airbus is having a cold shower in the first quarter 2016. It booked only a net of 10 Orders.

Net ordered per Airbus Reporting:

. 

Orders of note is the usual activity when upgrading already formerly placed classic orders and turning them into Neo orders having a net some gain of zero on the order book when making those types of order book upgrades. Otherwise, those order transactions occurred when transferring placed CEO orders and converting it to NEO orders. The first quarter 2016 single aisle order totals results in a net of -1.

The duo aisle class once again show a net increase of eleven A330's as a result of a customer upgrading its original order from a prior period of seven A330-300 CEO's and changing it into seven A330-800 NEO's. Thus affecting the order book for a net of zero gain within that order classification. In all, only a net eleven A330's were added to the Airbus book during 1st Q-2016.

A cancellation of two A380's were withdrawn from the Airbus order book and it added two on the same day. This transaction could be considered a book adjustment from changing customers in the build queue. It maybe the Air Austral deletion and Emirates addition 

netting zero.

Final Airbus book increase is Net 10!

Final Boeing book increase is net 122!

Perhaps Airbus is seeking out an oversize potato when expressing itself for second quarter 2016.

The 747 Had a Defibrillator Jolt For Four Unidentified

The Boeing 747-(8?), now has nine lives. For more unidentified orders were placed and one can assume it's from one customer who may have a penchant for freight. However, an unannounced caveat could suggest a commercial passenger intrigue holding some reservations for the imagination. The venerable 747-8 is out pacing Airbus in orders for the class of behemoth type orders during 2016. No A380's are yet told. The onset of the 777-9X is the death of the Euro Jumbo as the 747 seeks its own niche before customers stop looking for a way for making large frame money. 

 

The 747 has significantly tapped the freight genre for staying alive. So I will assume it was a freight order, as the A380 won't be a freight hauler loading space shuttle like freight consignments which goes to the Queen of the skies. A shock would be a passenger order for this type. But Boeing needs 747-8's like a glass of water is needed on the Sahara. Simile and metaphors alone can't revive the 747 program but every order from this point forward is a program shock to its heart. The A380 flat line is pending which is not a good sine wave for any program.

Has Boeing Turned The Airbus Corner?

Boeing since it realized a model gaff when it came late to the market with the 737 Max now beginning to catch the, Airbus swagger. An important Airbus note, it has delivered the NEO. The Max is about a year away and is filling NG orders like it was 2011. Boeing is already outputting Airbus at a consistent production pace during the first quarter of 2016. Airbus is late showing its first quarter numbers and no wonder as Boeing turns a production and a order corner as it already leads Airbus on both counts so far in 2016.

My own reason suggests the early to market NEO has lost its potential backlog energy as its customers are firm with the NEO and does not need the Airbus A320-CEO as arrivals of the NEO is the prime consideration of the day for all its single aisle customers. If the Max is truly the superior single Aisle a change will occur this year for the single aisle dichotomy of orders. The Max and NG will close the competitive gap with Airbus.

Further is the sluggish start of the A350 delivery cycle. It’s already into a delivery cycle of 16 months with only one A350-900 delivered to date in 2016. Remember the Seven Late Seven and all the complaints during the first 16 months. Boeing did better than Airbus during its first 16 months with having a more complex aircraft then the A350-900. Boeing flat out, out produced and delivered 49 of the 787 in the same first 16 months as compared with Airbus which only made about 16 A350-900's during its first 16 months of its production.

It has been mentioned before in a Winging It feature blog and it bears another take. Even with the grounding of the 787 during 2013 where for about 100 days no 787's were delivered, it will overcome any Airbus charge into the market. Boeing kept making the 787 during the battery groundings and then delivered it in multiples of 787’s after the battery solution was followed by FAA approval for that problem. During December 2018, Airbus will reach a thirty-six month production milestone assuming not having any Boeing like problems, it will also have little too few additional orders for its type. In Fact the A350 family has only sold a handful of A350's over the last 24 months where Boeing has sold about 149, 787’s in the last two years (or 24 months to date). There is little cheer going on in Toulouse these days. The A350 is withering under Boeing's orders and delivery, demonstrating the imminent success of the Dreamliner. 

The Airbus Corporation (EADS) has received a negative (36) orders in the last 24 months. Dropping its book total from 812 to 777. Combining its 16 deliveries in 16 months, it drops the Airbus backlog to 762 as compared with Boeing's total backlog of 746 while coming down from its 1,139 total orders. The case has been made and it’s apparent, Airbus is having some bad board meeting days without an apparent solution for its 787 problem, After all its billions spent and hype given on the behalf of the A350, it is now crumbling before the order book view as Boeing keeps outpacing the A350 on both orders and deliveries fronts. In fact, the Boeing order book is positioned for more timely orders than even Airbus can hope to deliver.

F-35 Hot Whitish Paper Link

The F-35 paper may answer all your questions.

Second Line Of Defense Report

The full report can be downloaded at the bottom of the initial article linked above by giving your email address and Name. It’s worth the access and a "save" to your hard drive.

Having an overarching long view of the F-35 gives the reader a backdrop for understanding the F-35 is just taking its baby steps and any fault encountered is part of the build process. The F-35 will make a quantum leap during 2016 for its initial deployment.

San Francisco Here We Come

KLM has announced its first 787 flight to San Francisco from Amsterdam this summer. In tribute to this auspicious and joint effort occasion. People break out in song from the Haight Asbury district clear to the Amsterdam's walk about. They all will be flying high over the announcement.

Amsterdam has its lights too and they aren't always white Neon

California, here I come
Right back where I started from
Where bowers and flowers bloom in the sun
Each morning at dawning birdies sing and everything
A sun kissed miss said, "Don't be late"
That's why I can hardly wait
So open up those Golden Gate
California, here I come

Boeing's Labor Fungibility

Fungible is not a term used for people but for liquid assets sometimes found in an oil pipeline. A barrel of oil found in a New Jersey pipeline is also a barrel of oil found in a company's portfolio for its nation-wide barrels of oil positioned for trading purposes. Has Boeing's workforce become a commodity where 4,000 to 8,000 employees are released from its system as working units in some sort of fungible manner?

Boeing needs to reduce its workforce footprint and still make guidance for its stockholders and achieve lofty goals needed in its airplane ware with Airbus. A 8,000 workforce reduction is a 10% sock in the gut for those whom are loyal to the cause of airplane building. Next workforce unit up in this case. Trimming the fat is a Boeing battle cry, and full steam ahead with less. The President of Boeing did not explain well what all this meant leaving the likes of this blogger with an attempt at better understanding the nature of it all regarding business at hand.

The storm swirls with airplane costs, workforce fat when competing with Airbus pricing in the market place. Long gone are the statements referring “bang for the buck" or "added value". Boeing is just dumping its fungible workforce. Most people don't even know what I'm talking about and that's just fine, but you need to use the word fungible in a sentence today as if you know something when impressing your friends with business school like acumen.

Going a little deeper on this subject requires a further imagination for what is occurring with Boeing in the workforce reduction announcement. It isn't from a thin backlog nor is it from a bad sales year coming up. The real cause for fungible workforce reduction companywide is the buildup problem occurring several years back. A time was occurring where Boeing was not meeting its objectives in a timely manner. It was smarting over the three years late reputation so Boeing hired more people to throw on the fire of progress for its multi-layered programs. Boeing had bit off more than it could chew in anyone program. 

The KC-46 problems are in the cusps of finding whether it will be allowed its first initial production run this year. It has problems too, but not insurmountable by any means it just needs more hours of tinkering. 

·      Boeing is building a building for building an Airplane for which is not ready yet, the 777X.

·      Boeing is building an airplane for which contains an X factor in the single aisle Max realm.

·      Boeing has just started building a perfect 10 machine in Charleston, SC.

·      Boeing has just announced 4,000 people will leave in this perfect industrial storm?

It doesn't pass the smell test of reducing cost for the purpose of competitive pricing against Airbus. Fickle customers who buy aircraft at a clip of $100 million a unit, do look at the price factor. The price factor becomes more fickle if all things are equal in what is purchased. In Boeing's case it claims superiority over the other, but it has to lower its selling price at the expense of furloughing workers.

The answer to all this confusion comes from analogy. In the cruise ship industry seasons affect the critical assets, the cruise ship itself. Boeing is in such a season where its workforce needs repositioning from one ocean to another to capitalize opportunity. Workforce build-ups in one area will reposition to another. Having this flexibility will cost Boeing employees up to 8,000 jobs in the next year while other programs will receive just in time human resources in another part of production cycle, as if it were a fungible matter.  

The prediction forthcoming and concerning lost Boeing manpower: 

"it will need workers sooner rather than later in other projects it even has already started or made the commitment". 

It can make a shift of its "too many workers" in one area where production costs are affecting the market. The downgrade of employee numbers is housekeeping which allows future absorption for the day where a further 8,000 workers are required and repositioned for its various programs. However for the 8,000 today it doesn't pay the rent.