Today Is National Zumwalt Day: It Delivered!

DDG 1000 delivered today after 4.4 billion was spent and follow-on Billions will be spent pushing forward a Navy dream of Oceanic dominance protecting US interest, allies, and it defense of America. What can the DDG do is the big mystery? So far it has shown it can go stealthy, run fast, and mess with any electronic warfare imposed on the ship. It can light up a small city with its gas turbines generation. 

DDG1000 US Navy Photo

What is proposed for the DDG 1000 while in San Diego during 2017?

·      Complete ship’s array of weapons (known/unknown)

·      Install war fighting capabilities (unknown)

·      Test in secret operational capability (Unknown)

·      Complete training of war fighting crew (about 140 members)

The 33+ knot and 16,000 ton Zumwalt is something not to criticize as another DoD expenditure that is flawed. It’s the pride of Bath Iron Works and Raytheon Technology. All systems will be go in 2018. It will turn lose a capability, the Arleigh Burke class of destroyer cannot not match. The DDG 51 series is a twentieth century tool of defense from the 1990's. This destroyer, who can't be found easily, and does not yet have installed its full lethal function will change geopolitical aspirations. First assignment maybe the South China seas where China is building military sand castles in the sea region of multiple nations.  China is imposing its will and the US has a ship China can't build at this time.

Winging It solutes the people of Bath Iron Works and the US Navy having made this day possible. It’s the first of a family of three, but once accomplished the added value will be more follow-on Zumwalt types as a repayment for billions invested. 

Ruili Orders Six 787-9's

Boeing, who is stuck in a ordering down cycle, does a pick six 787-9's from Ruili, a Chinese airlines expanding its footprint going forward. This year, in particularly is noted as a "order pause year" for Boeing citing low fuel costs and customer's solid fleet inventory as a reason for the 2016 pause. Airbus also has had a slow order start, thus making any order binges "so last year". This period sets up as an airshow dependent year for order announcements. 

Ruili 737 in action

The airshow grows in importance when Boeing or Airbus tents have something to say at the shows. Even though Boeing holds this year’s order lead during the first half of 2016, an airshow may change whose doing what to whom. My own order predictions are out the window as the makers are shaking the order tree for any ripe commitments.  Any prediction will be coming from the airplane makers themselves born out of hopefulness from a friendly customer. The other side of the order business is hanging onto any orders placed prior to 2016, and preventing cancellations. This year remains prone to order cancellations in the wide body arena.

Flash Back 2015:

AIRSHOW-Boeing wins order for 30 737 MAX from Ruili Airlines

The economy is not the culprit for airline ordering malaise, but underlying factors contribute to the order pause such as competitive risks. Opening a new route with its current aircraft inventory is a risk when the competitive margins are slim going into a new market served by another airline. Buying new aircraft for such a market is a greater risk. An expanding airline such as Ruili may hesitate investing with new equipment when they have older. However, in Ruili's case they have a small inventory to begin with including any wide bodied aircraft. Summarily, all Chinese based airlines are strictly given oversight by its government and its respective fleet expansion mode. Making Ruili's order transaction an accomplishment for Boeing completing the deal.

This does indicate the condition of the world airline market where special situations makes the order during 2016. The remainder of the year should see sales with customers who have rendered down to a decision point, where risk taking becomes the higher priority for its business model, rather than waiting for all the tea leaves to line up before ordering. The six Ruili 787-9's is a big deal in today's market.

Airline Aging Inventory FIFO Bodes Well For 787

The US airline giants American, Delta and United have inventory that will be approaching 20 years old by 2020. The combined fleets contain a variety of both Airbus and Boeing frames. The fleet renewal paradigm is now in play. United is running up 787 deliveries without replacing older models as they become a serious target for Boeing's order making team. The Boeing backlog is becoming ripe for order placing with its family of 787 and 777. United recently converted fourteen 787's into 777's on its books. That particular move by United, suggest a near term fleet adjustment during a time of a retiring fleet age and increasing fleet capacity. United moved with a lower financial impact while increasing its order book.

American airlines became a Boeing star when it received its first 787 in the bright colors of its hanger. It too has its fleet shuffling as jets retire, routes are expanded, and passenger capacity changes. Out goes older 767's and in comes the 787 so Boeing hopes will happen. The battle field has changed to the fleet renewal scheme of things and both Boeing and Airbus are suitors expecting big orders from these three US shoppers during the next two years. When placing an order an airline should expect a five year window in which a delivery is completed. Manufacturing analyst see the customer's fleet age per unit, they can expect orders to be placed in a certain window of time.

Delta is a wild card for Boeing as they have demonstrated a propensity for choosing any manufacturer at any time. The result is a mixed fleet of Airbus and Boeing where Boeing maintains the lead and Airbus has an aging fleet. The Single aisle is the anxious area for Boeing while Airbus has received favorable order status for its wide body. They just stalled Boeing by ordering 25, A330-900 and 25, A350-900's which becomes not a good day is for Boeing, as the Airbus good day replaces its aging Boeing aircraft such as the 767. Boeing didn't beat Airbus on pricing and Delta went for the best price. 

Delta Fleet Age and Numbers

The First in First Out (FIFO) market mode is the buying impetus for 2016-2017. The oldest aircraft in a fleet must go and be replaced by any aircraft manufacturer offering the best deal. That buying environment will extend Boeing's $30 billion development charges beyond the 1,300 unit block, before all sunk coasts are recovered from the "Pit". 

787 Is Expanding The Market In An Overlapping Coverage

A long headline for saying the 787 is rapidly fulfilling its promise of connecting all the world's loose ends when aviation could not connect those ends before the 787. Previously, a connectivity outlook would involve the 777 or the 747, but the 787 isn't about mass, its about convenience. The 787 can land at "almost" any sensible sized airport in the world without much ado. That is the 787 market, and everyday the news headlines searched by "787" opens another new route at an alarming pace.

Asia, the Mideast and America are rapidly filling the skies with new 787 routes. The A350 has stumbled out of the gates where Qatar threatens a Boeing purchase over another A350 delivery delay. Time is Qatar's enemy as the world routes are rapidly being filled with 787's. The 787 market overlaps in all corners of the earth is noticed after delivery number 400 from the 787. Every week the news documents how some airlines is assigning the 787 to current or new route.  All 787 equipped airlines are announcing route expansion with its fleets of 787's. The Dreamliner will soon turn a momentum corner, as it will soon become a fleet replacement model for older aircraft including the venerable A330 flock and its routes flown.  

Boeing Taking A Moon Shot On Market Management

In a "what if", one can dream? Boeing is playing its future "what if" card clear from the production floor. The leadership of Boeing has made its pronouncement. It is a target capability of production units, coupled with a reliance on wide body cash and profitability engines. Boeing will once again depend on its 787's as a make or break aircraft for its gigantic mega corporation.

Business News Net Work:

Boeing plans to hike revenue and profit, aims to roll out 900 planes a year by 2020

"Boeing Co's top executives laid out an ambitious, five-year strategy on Wednesday to increase revenue and profits and secure the company's future for the next 100 years, promising to boost efficiency, return free cash to shareholders and expand the after-market services and parts business."

Ambition is that "what if" dream coming from Muilenburg, Boeing chief, as he outlined the: who, what, when and where, of the financial sources and uses for stockholder value. Part of that plan is maximum productivity.

"Boeing described how it will pay back nearly $30 billion in deferred costs from the 787, saying 70 per cent would come from selling larger, more profitable versions of the plane and higher prices.

Boeing also addressed whether its output will overshoot demand if there's a downturn in the aerospace cycle. New plane orders have slowed, and by 2020, Boeing will be making more than 900 planes a year, a position some analysts questioned."

My own head took a snap at that expectation of 900 airplanes made a year by 2020. The following head shaking conditions will exist then as does now:

• Whose money will build the production capability needed?
• Will there will be Department of Defense (DOD) terminology or acronyms used such as Initial Operational Capability (IOC)?
• Can I get a Real estate License before 2020?
• Does Just in Time actually mean Just in Time?
• Is Boeing betting Airbus can't meet, match, or exceed Muilenburg expectations?

The sum of Boeing's parts will push Boeing to market resiliency which is a noble concept originating from a multitude of terabytes from a business computer analysis. The accounts agree that it is possible if you have your "what Ifs" in a row. Now talk to the people who will build 900 aircraft a year and see if it flies.

The F-35 Is Different And Changes War Fighting

A recent article illustrates how the F-35 is not in a dog fight with the F-16 but is actually micro managing combatants to its own demise. The Article of note headlines.

"What Is the Pentagon's Multi-Billion Dollar F-35 Jet Actually Supposed to Do?"

It becomes a "Winging It" reading assignment structured towards unconventional aerial warfare. The F-35 does not dogfight, it just out thinks any known aircraft today, and into the future for years to come! Please refer to the link above for a different perspective on the F-35 and why its problematic architecture must use resolve for fixing the amalgamated war fighting capability. The word fusion is tossed about when naming the conceptualized intent of bringing all things together that has inherently evolved since flying began.

The F-35 is not an evolution of faster, bigger, or more mobile fighter when it doesn't have to be. It just cheats during the waring conflicts of the air. The F-35, as this article illustrates, and then I go on (metaphorically), how a pudgy little bumble bee can fly circles around the other insects of the air and strike with a finality not yet experienced in aerial combat. 

Keep in mind the word "fusion", its key to this whole discussion, and why pilots are learning to love flying this aircraft. The pilots see it all (helmet) and then they see it all again (electronic fusion/sensors), without even an adversary noticing the F-35 has its number. The first question up, why dogfight? Second question up why the need for speed?

Read on via the link above and you will understand why a faster horse travelling can't beat an automobile or why the F-16 can't run with the F-35.  

Boeing Needs 100 787 A Year Onto Its Books

Faced with a thirty billion 787 money pit. Dealing with a 1,300 787 unit block point for that little matter. When all is said and done, Boeing needs to keep selling and booking about 100 787's a year going forward. Boeing has booked about 15 787-9's during 2016 with the Farnborough Air show coming up next. Hopefully they have come up some forty orders from the event. Once the 787-10 gets rolling, errh flying, an impetus may strike the market for ordering more 787-8's and 787-9's just because its time to line-up on the Boeing Backlog.

Why order a 787-8 at this time? It out flies the A330 NEO and it out performs every legacy wide body found flying in the first decade of the 21st century. Some have stuffed 334 passengers on its own fleet. Other have managed 291 seats without any bodily harm. Boeing has less than 150 of its type on backlog suggesting another reason an airline can order up the model. The 787-8 is perfect for many an airline special operational needs. The question before us today what is the 787-8 sweet spot. A spot that is defined by fuel load balance by passenger capability and market need. The fuel price upward will motivate fleet renewal in a hurry. This is coming sooner rather than later as the low fuel price is coming to an end. All that old tin will reach the scrap heap when fuel prices go up by another 50%. The Boeing backlog will be ready for a special inter destination retirement of older aircraft where customers won't be ordering the same of what they are replacing.

Why Order a 787-9 at this time, while the backlog is tedious for impatient stock holders of an Airline company? The reasons come from a Boeing production efficiency, evolving since successfully converting 787-8 productivity into 787-9 productivity. There was a time when the common view of Boeing was steeped in anxious anticipation when the 787-9 hit the production floor. Boeing seamlessly introduced the 787-9 and promptly built over 106 of its type while building another 188 787-8's during the 9's introduction. All expectations are now set for the 787-10 program, as a do-over of the 787-9 exercise. Customers can assuredly get its 787-9 faster than an Airbus A350-900 if ordering one of each today. The compelling reason for buying the A350-900 has faded as Airbus enters its own version of being late concerning its prime customer such as Qatar.

Why Order the 787-10? Because it makes money in the heart of the Market. It will carry over 330 comfortably seated passengers going 7,000 miles which happens to be over 90% of the market span of travel. Once this aircraft assuredly flies like the 787-9 more orders will follow as its utility maximizes passenger demand for a customer’s profit line. Boeing is building an airplane for every customer's purpose or business intent as its overarching business model.

Boeing is a Fighter and Airbus Has A Punchers Chance

Boeing keeps bobbing and weaving its way through its order book and Airbus has thrown some pretty good punches staggering Boeing a bit. The 787 was a strategic move for world dominance and Airbus punched back with A350 family of aircraft. The 737 is the single aisle champion having over 9,001 737 delivered and 13,364 ordered at some recent point in time. Even though the Airbus NEO has punched its way into the Single Aisle ring, Boeing is making headway back into the fight with its Max. The goal for Boeing is Single Aisle parity in a split scimitar decision during round five. 

The undisputed heavy weight, A-380 is left shadow boxing in a corner, while the 747 became fashionably retired. Boeing the fighter, and Airbus the puncher goes to round six which brings the Light heavy 777X to the forefront. The A350-1000 or presumptive unannounced A350-1100 will not match well against the craftier 777-9X. Once Airbus fans get done screaming and cheering about its Light-Heavy's A350-1000's when purchasing its tickets, the fight will be over. The 777-9X comes through as a better fighter.

As Airbus keeps punching away with its family of aircraft types, they lack an innovative edge for a ten round fight. A lucky blow is the lost leader of the A-380 whose ship has already sailed along with the pigs that can still fly.

Airbus becomes arm weary before anything is decided. Boeing keeps circling its prey looking for an opening is the 777-9X and not the 737 Max nor the 787's blows. The fight reaches a culmination of the sum of its techniques over the numerous blows Airbus offers. The tenth round is a Boeing knockout.

The China Eastern 787 Sale Is A Sea Change For Boeing

China Eastern just placed an order with Boeing for fifteen 787-9's. To the casual observer they will mention Airbus is besting Boeing with a twenty count A350-900 order during the China Eastern announcement from its buying spree for the year.

Youtube Photo credit

However it is better to examine a little deeper into the story as Motley Fool has examined with the headline:

Who's the Mystery Buyer Behind Boeing's 787?

The not so fast my friend approach and sale with the Airbus’ 20 wide bodies, suggests Boeing has breached into a market where it has not had much success.

Motley Fool on the 787 Sale:

"Given that the China Eastern Airlines order was not mentioned in last week's order update, and that since it was announced on April 28, it just missed the cutoff for reporting as a firm order in that update (which covered orders placed up through April 27), it seems safe to say I think we have found our buyer: China Eastern was the company that bought the 787's this week."

It is more import to note that China Eastern is an Airbus Company and would only order twenty A350-900 for its fleet consistency. 

Motley Fool Quote:

"China Eastern currently operates a mostly Airbus (NASDAQOTH:EADSY) fleet."

"Weighed against China Eastern's 293 Airbus aircraft of all shapes and sizes, that makes Boeing a relative bit player at the carrier -- but now its presence is growing.

For a company that places so much faith in the potential of the Chinese market, that's a good thing."

Boeing did not lose an Airbus battle going with a score of 20 A350's to 15 B787 wide bodies. It won a significant beach head in the Chinese aviation market place. Boeing keeps chipping away just as Airbus did in the 1990's. 

June 2016 Schedules: 17, 787's For Delivery

I got excited by Boeing's production intent for the month of May, the month of June production Queue was ready for view from the All Things 787  website. Once again the data was extrapolated and presented from a filtered view for the month of June 2016 delivery schedule. The number on the list is Seventeen 787 models which are scheduled for June delivery. The biggest observation; is Boeing has set its sight on making the 787's at a 100% production capacity pacing over the next two months.

A delivery of note is Ethiopian will take a preteen   #12 build number, a long wait from the Change Incorporation-Rework Center lady in waiting. This is the first of Ethiopia's next six terrible teens, all fixed up. Even though these are heavier than current 787-8's, it will provide a 15% improvement on fuel economy, but its buy price does compensate and will buy many gallons of Jet A. It is also significant to note, this unit # 12 has all the latest upgrades equal to what now comes off the production line today. The weight of this aircraft is the main penalty.

  

British Airways will receive its second 787-9 late from the Zodiac Seat production snag. Note it is a 396 build number. Boeing will be delivering in the 430's build numbers during June 2016. The highest number scheduled for delivery in June is build #447.

Air China will receive two more 787-9's in June bringing its first three 787's delivered in two months.  The rapid delivery pace will make an Airbus production response not worthy of mentioning, as Boeing will have delivered 31 787's in this two month period, that is if no delays are encounter from the production floor or from the customer. Boeing has shown in the last several years, its production capability is at a premium level for the 787 type. 

Monthly Type Production:

• 787-8 Three
• 787-9 Fourteen